exv10w10






Exhibit 10.10




 





LOAN AGREEMENT




Dated as of November 17, 2005



Between



BRICKMAN DURHAM LLC

as Borrower



And



GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.

as Lender



 




 









 





TABLE OF CONTENTS




	 	 	 	 	 

	1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
	 	 	1	 
	1.1 Specific Definitions
	 	 	1	 
	1.2 Index of Other Definitions
	 	 	15	 
	1.3 Principles of Construction
	 	 	17	 
	 
	 	 	 	 
	2. GENERAL LOAN TERMS
	 	 	17	 
	2.1 The Loan
	 	 	17	 
	2.2 Interest; Monthly Payments
	 	 	18	 
	2.2.1 Generally
	 	 	18	 
	2.2.2 Default Rate
	 	 	18	 
	2.2.3 Taxes
	 	 	18	 
	2.2.4 New Payment Date
	 	 	18	 
	2.3 Loan Repayment
	 	 	19	 
	2.3.1 Repayment
	 	 	19	 
	2.3.2 Mandatory Prepayments
	 	 	19	 
	2.3.3 Defeasance
	 	 	19	 
	2.3.4 Optional Prepayments
	 	 	21	 
	2.4 Release of Property
	 	 	21	 
	2.4.1 Release on Defeasance
	 	 	22	 
	2.4.2 Release on Payment in Full
	 	 	22	 
	2.5 Payments and Computations
	 	 	22	 
	2.5.1 Making of Payments
	 	 	22	 
	2.5.2 Computations
	 	 	22	 
	2.5.3 Late Payment Charge
	 	 	22	 
	 
	 	 	 	 
	3. CASH MANAGEMENT AND RESERVES
	 	 	23	 
	3.1 Cash Management Arrangements
	 	 	23	 
	3.2 Intentionally Omitted
	 	 	23	 
	3.3 Taxes and Insurance
	 	 	23	 
	3.4 Capital Expense Reserves
	 	 	24	 
	3.5 Rollover Reserves
	 	 	24	 
	3.5.1 General Rollover
	 	 	24	 
	3.5.2 Special Rollover Reserve
	 	 	26	 
	3.6 Operating Expense Subaccount
	 	 	27	 
	3.7 Casualty/Condemnation Subaccount
	 	 	27	 
	3.8 Security Deposits
	 	 	27	 
	3.9 Cash Collateral Subaccount
	 	 	28	 
	3.10 Grant of Security Interest; Application of Funds
	 	 	28	 
	3.11 Property Cash Flow Allocation
	 	 	29	 
	 
	 	 	 	 
	4. REPRESENTATIONS AND WARRANTIES
	 	 	30	 
	4.1 Organization; Special Purpose
	 	 	30	 
	4.2 Proceedings; Enforceability
	 	 	30	 
	4.3 No Conflicts
	 	 	30	 






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	4.4 Litigation
	 	 	31	 
	4.5 Agreements
	 	 	31	 
	4.6 Title
	 	 	31	 
	4.7 No Bankruptcy Filing
	 	 	32	 
	4.8 Full and Accurate Disclosure
	 	 	32	 
	4.9 Tax Filings
	 	 	32	 
	4.10 ERISA; No Plan Assets
	 	 	32	 
	4.11 Compliance
	 	 	33	 
	4.12 Contracts
	 	 	33	 
	4.13 Federal Reserve Regulations; Investment Company Act
	 	 	33	 
	4.14 Easements; Utilities and Public Access
	 	 	33	 
	4.15 Physical Condition
	 	 	34	 
	4.16 Leases
	 	 	34	 
	4.17 Fraudulent Transfer
	 	 	34	 
	4.18 Ownership of Borrower
	 	 	35	 
	4.19 Purchase Options
	 	 	35	 
	4.20 Management Agreement
	 	 	35	 
	4.21 Hazardous Substances
	 	 	35	 
	4.22 Name; Principal Place of Business
	 	 	36	 
	4.23 Other Debt
	 	 	36	 
	4.24 Post-Purchase Obligations
	 	 	36	 
	 
	 	 	 	 
	5. COVENANTS
	 	 	36	 
	5.1 Existence
	 	 	36	 
	5.2 Taxes and Other Charges
	 	 	36	 
	5.3 Access to Property
	 	 	37	 
	5.4 Repairs; Maintenance and Compliance; Alterations
	 	 	37	 
	5.4.1 Repairs; Maintenance and Compliance
	 	 	37	 
	5.4.2 Alterations
	 	 	37	 
	5.5 Performance of Other Agreements
	 	 	38	 
	5.6 Cooperate in Legal Proceedings
	 	 	38	 
	5.7 Further Assurances
	 	 	38	 
	5.8 Environmental Matters
	 	 	38	 
	5.8.1 Hazardous Substances
	 	 	38	 
	5.8.2 Environmental Monitoring
	 	 	39	 
	5.8.3 O & M Program
	 	 	40	 
	5.9 Title to the Property
	 	 	41	 
	5.10 Leases
	 	 	41	 
	5.10.1 Generally
	 	 	41	 
	5.10.2 Material Leases
	 	 	41	 
	5.10.3 Minor Leases
	 	 	41	 
	5.10.4 Additional Covenants with respect to Leases
	 	 	42	 
	5.11 Estoppel Statement
	 	 	42	 
	5.12 Property Management
	 	 	42	 
	5.12.1 Management Agreement
	 	 	42	 
	5.12.2 Termination of Manager
	 	 	43	 
	5.13 Special Purpose Bankruptcy Remote Entity
	 	 	43	 






ii









 






	 	 	 	 	 

	5.14 Assumption in Non-Consolidation Opinion
	 	 	43	 
	5.15 Change in Business or Operation of Property
	 	 	44	 
	5.16 Debt Cancellation
	 	 	44	 
	5.17 Affiliate Transactions
	 	 	44	 
	5.18 Zoning
	 	 	44	 
	5.19 No Joint Assessment
	 	 	44	 
	5.20 Principal Place of Business
	 	 	44	 
	5.21 Change of Name, Identity or Structure
	 	 	44	 
	5.22 Indebtedness
	 	 	45	 
	5.23 Licenses
	 	 	45	 
	5.24 Compliance with Restrictive Covenants, Etc
	 	 	45	 
	5.25 ERISA
	 	 	45	 
	5.26 Prohibited Transfers
	 	 	45	 
	5.26.1 Generally
	 	 	45	 
	5.26.2 Transfer and Assumption
	 	 	45	 
	5.27 Liens
	 	 	47	 
	5.28 Dissolution
	 	 	47	 
	5.29 Expenses
	 	 	48	 
	5.30 Indemnity
	 	 	48	 
	5.31 Patriot Act Compliance
	 	 	49	 
	5.32 Upfit Obligations
	 	 	50	 
	 
	 	 	 	 
	6. NOTICES AND REPORTING
	 	 	50	 
	6.1 Notices
	 	 	50	 
	6.2 Borrower Notices and Deliveries
	 	 	51	 
	6.3 Financial Reporting
	 	 	51	 
	6.3.1 Bookkeeping
	 	 	51	 
	6.3.2 Annual Reports
	 	 	51	 
	6.3.3 Monthly/Quarterly Reports
	 	 	52	 
	6.3.4 Other Reports
	 	 	52	 
	6.3.5 Annual Budget
	 	 	53	 
	6.3.6 Breach
	 	 	53	 
	 
	 	 	 	 
	7. INSURANCE; CASUALTY; AND CONDEMNATION
	 	 	53	 
	7.1 Insurance
	 	 	53	 
	7.1.1 Coverage
	 	 	53	 
	7.1.2 Policies
	 	 	56	 
	7.2 Casualty
	 	 	57	 
	7.2.1 Notice; Restoration
	 	 	57	 
	7.2.2 Settlement of Proceeds
	 	 	57	 
	7.3 Condemnation
	 	 	57	 
	7.3.1 Notice; Restoration
	 	 	57	 
	7.3.2 Collection of Award
	 	 	58	 
	7.4 Application of Proceeds or Award
	 	 	58	 
	7.4.1 Application to Restoration
	 	 	58	 
	7.4.2 Application to Debt
	 	 	59	 
	7.4.3 Procedure for Application to Restoration
	 	 	59	 






iii









 






	 	 	 	 	 

	8. DEFAULTS
	 	 	60	 
	8.1 Events of Default
	 	 	60	 
	8.2 Remedies
	 	 	61	 
	8.2.1 Acceleration
	 	 	61	 
	8.2.2 Remedies Cumulative
	 	 	62	 
	8.2.3 Severance
	 	 	62	 
	8.2.4 Delay
	 	 	62	 
	8.2.5 Lender’s Right to Perform
	 	 	63	 
	 
	 	 	 	 
	9. SPECIAL PROVISIONS
	 	 	63	 
	9.1 Sale of Note and Secondary Market Transaction
	 	 	63	 
	9.1.1 General; Borrower Cooperation
	 	 	63	 
	9.1.2 Use of Information
	 	 	64	 
	9.1.3 Borrower Obligations Regarding Disclosure Documents
	 	 	64	 
	9.1.4 Borrower Indemnity Regarding Filings
	 	 	65	 
	9.1.5 Indemnification Procedure
	 	 	65	 
	9.1.6 Contribution
	 	 	65	 
	9.1.7 Rating Surveillance
	 	 	66	 
	9.1.8 Severance of Loan
	 	 	66	 
	 
	 	 	 	 
	10. MISCELLANEOUS
	 	 	66	 
	10.1 Exculpation
	 	 	66	 
	10.2 Brokers and Financial Advisors
	 	 	68	 
	10.3 Retention of Servicer
	 	 	69	 
	10.4 Survival
	 	 	69	 
	10.5 Lender’s Discretion
	 	 	69	 
	10.6 Governing Law
	 	 	69	 
	10.7 Modification, Waiver in Writing
	 	 	70	 
	10.8 Trial by Jury
	 	 	71	 
	10.9 Headings/Exhibits
	 	 	71	 
	10.10 Severability
	 	 	71	 
	10.11 Preferences
	 	 	71	 
	10.12 Waiver of Notice
	 	 	71	 
	10.13 Remedies of Borrower
	 	 	72	 
	10.14 Prior Agreements
	 	 	72	 
	10.15 Offsets, Counterclaims and Defenses
	 	 	72	 
	10.16 Publicity
	 	 	72	 
	10.17 No Usury
	 	 	72	 
	10.18 Conflict; Construction of Documents
	 	 	73	 
	10.19 No Third Party Beneficiaries
	 	 	73	 
	10.20 Yield Maintenance Premium
	 	 	73	 
	10.21 Assignment
	 	 	74	 
	10.22 Certain Additional Rights of Lender
	 	 	74	 
	10.23 Set-Off
	 	 	75	 
	10.24 Counterparts
	 	 	75	 






iv









 






	 	 	 

	Schedule 1

	 	Intentionally Omitted
	Schedule 2

	 	Exceptions to Representations and Warranties
	Schedule 3

	 	Rent Roll
	Schedule 4

	 	Organization of Borrower
	Schedule 5

	 	Definition of Special Purpose Bankruptcy Remote Entity







v











 





LOAN AGREEMENT




          LOAN AGREEMENT dated as of November 17, 2005 (as the same may be modified, supplemented,
amended or otherwise changed, this “Agreement”) between BRICKMAN DURHAM LLC, a Delaware limited
liability company (together with its permitted successors and assigns, “Borrower”), and GREENWICH
CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation (together with its successors and assigns,
“Lender”).



1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION




     1.1 Specific Definitions. The following terms have the meanings set forth below:



          Affiliate: as to any Person, any other Person that, directly or indirectly, is in Control of,
is Controlled by or is under common Control with such Person or is a director or officer of such
Person or of an Affiliate of such Person.




          Amortization Commencement Date: January 6, 2011, as such date may be changed in accordance
with Section 2.2.4.



          Approved Bank: a bank or other financial institution, the long term unsecured debt obligations
of which are rated at least “AN” by Fitch and S&P and “Aa2” by Moody’s.



          Approved Capital Expenses: Capital Expenses incurred by Borrower, provided that during a Cash
Management Period, such Capital Expenses shall either be (i) included in the Approved Capital
Budget for the current calendar month or (ii) approved by Lender in its reasonable discretion.




          Approved Leasing Expenses: actual out-of-pocket expenses incurred in leasing space demised
pursuant to Leases entered into after the date hereof in accordance with the Loan Documents,
including brokerage commissions and tenant improvements (provided that if any such expenses are
payable to a party that is an Affiliate of Borrower, such payment must be in the ordinary course of
Borrower’s business and on terms that are intrinsically fair and are no less favorable to Borrower
or such Affiliate than would be obtained in a comparable arm’s-length transaction with an unrelated
third party), which expenses (i) are (A) specifically approved by Lender in connection with
approving the applicable Lease, (B) incurred in the ordinary course of business and on market terms
and conditions in connection with Leases which do not require Lender’s approval under the Loan
Documents, (C) included in a Lease entered into in accordance with the Loan Documents
or (D) otherwise approved by Lender, which approval shall not be unreasonably withheld or delayed,
and (ii) and if such expenses are tenant improvements or brokerage commissions are substantiated by
executed Lease documents or brokerage agreements, respectively.




          Approved Major Lease Leasing Expenses: actual out-of-pocket expenses incurred in re-leasing
space demised under a Major Lease at the Property pursuant to replacement Leases entered into in
accordance with the Loan Documents, including brokerage commissions and tenant improvements
(provided that if any such expenses are payable to a party





 









 







that is an Affiliate of Borrower, such payment must be in the ordinary course of Borrower’s
business and on terms that are intrinsically fair and are no less favorable to Borrower or such
Affiliate than would be obtained in a comparable arm’s-length transaction with an unrelated third
party), which expenses (i) are (A) specifically approved by Lender in connection with approving the
applicable Lease, or (B) otherwise approved by Lender, which approval shall not be unreasonably
withheld or delayed, and (ii) and if such expenses are tenant improvements or brokerage commissions
are substantiated by executed Lease documents or brokerage agreements, respectively.




          Approved Management Fee: collectively, any and all fees, costs, services and expenses under
the Management Agreement (including reimbursed costs, and corporate overhead charged back against
the property from the corporate office) not to exceed one and one half percent (1.50%) of the gross
revenue of the Property. Approved Operating Expenses shall not include fees, costs or expenses
payable to the Manager under the Management Agreement in excess of the Approved Management Fee;
provided, however, that Borrower shall be permitted to pay, from its own funds, any such fees,
costs or expenses in excess of the Approved Management Fee payable pursuant to the terms of the
Management Agreement.




          Approved Operating Expenses: during a Cash Management Period, operating expenses incurred by
Borrower which (i) subject to clause (iii) below, are within 105% of the total amounts included in
the Approved Operating Budget for the current calendar month, (ii) are for real estate taxes,
insurance premiums, or Utility Expenses, (iii) are for payment of fees payable to Manager under the
Management Agreement; provided that (notwithstanding anything to the contrary contained on the
Approved Operating Budget) such fees under the Management Agreement do not exceed the Approved
Management Fee, or (iv) have been approved by Lender.




          Available Cash: as of each Payment Date during the continuance of Cash Management Period, the
amount of Rents, if any, remaining in the Deposit Account after the application of all of the
payments required under clauses (i) through (vii) of Section 3.11(a) hereof.




          Brickman Fund: Brickman Real Estate Fund II, LP, a Delaware limited partnership.




          Business Day: any day other than a Saturday, Sunday or any day on which commercial banks in
New York, New York are authorized or required to close.




          Calculation Date: the last day of each calendar quarter during the Term.




          Capital Expenses: expenses that are capital in nature or required under GAAP to be
capitalized.




          Cash Management Period: shall commence upon Lender giving notice to the Clearing Bank (with a
copy to Borrower) of the occurrence of any of the following:
(i) the Stated Maturity Date, (ii) an Event of Default, or (iii) if, as of any Calculation
Date from and after the December 31, 2006 Calculation Date, the Debt Service Coverage Ratio is less
than the applicable Minimum DSCR Threshold (a “DSCR Cash Management Period”) or (iv) the
commencement of a Lease Sweep Period; and shall end upon Lender giving notice to the





2









 







Clearing Bank (with a copy to Borrower) that the sweeping of funds into the Deposit
Account may cease, which notice Lender shall only be required to give if (1) the Loan and all other
obligations under the Loan Documents have been repaid in full or (2) the Stated Maturity Date has
not occurred and (A) with respect for the matters described in clause (ii) above, such Event of
Default has been cured and no other Event of Default has occurred and is continuing or (B) with
respect to the matter described in clause (iii) above, the Property has achieved the applicable
Minimum DSCR Threshold for two (2) consecutive Calculation Dates, in which case the Lender shall
promptly give notice thereof to the Clearing Bank, or (C) with respect to the matter described in
clause (iv) above, such Lease Sweep Period has ended.




          Code: the Internal Revenue Code of 1986, as amended and as it may be further
amended from time to time, any successor statutes thereto, and applicable U.S. Department of
Treasury regulations issued pursuant thereto in temporary or final form.




          Control: with respect to any Person, either (i) ownership directly or indirectly
of 49% or more of all equity interests in such Person or (ii) the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such
Person, through the ownership of voting securities, by contract or otherwise.




          Debt: the unpaid Principal, all interest accrued and unpaid thereon, any Yield
Maintenance Premium and all other sums due to Lender in respect of the Loan or under any Loan
Document.




          Debt Service: with respect to any particular period, the greater of (i) scheduled
Principal and interest payments due under the Note in such period or (ii) the product of (A) the
outstanding principal as of the end of such period multiplied by (B) 7.35%.




          Debt Service Coverage Ratio: as of any date, the ratio calculated by Lender of (i)
the Net Operating Income for the twelve (12)-month period ending with the most recently completed
calendar month to (ii) the Debt Service with respect to such period.




          Default: the occurrence of any event under any Loan Document which, with the
giving of notice or passage of time, or both, would be an Event of Default.




          Default Rate: a rate per annum equal to the lesser of (i) the maximum rate
permitted by applicable law, or (ii) five percent (5%) above the Interest Rate, compounded monthly.




          Defeasance Collateral: U.S. Obligations, which provide payments (i) on
or prior to, but as close as possible to, all Payment Dates and other scheduled payment dates, if
any, under the Note after the Defeasance Date and up to and including the Stated Maturity Date, and
(ii) in amounts equal to or greater than the Scheduled Defeasance Payments.




          Deposit Bank: Wachovia Bank, National Association, or such other bank or
depository selected by Lender in its discretion.




          Duke Entities: collectively, Duke University and Duke University Health System,
Inc.





3









 








          Eligible Institution: a depository institution insured by the Federal Deposit
Insurance Corporation the short term unsecured debt obligations or commercial paper of which are
rated at least A-1 by S&P, P-1 by Moody’s and F-1+ by Fitch, in the case of accounts in which funds
are held for thirty (30) days or less or, in the case of Letters of Credit or accounts in which
funds are held for more than thirty (30) days, the long term unsecured debt obligations of which
are rated at least “AA” by Fitch and S&P and “Aa2” by Moody’s.




          Environmental Report: that certain Phase I Environmental Site Assessment Report
issued October 27, 2005, prepared by Land America Assessment Corporation for Lender.




          ERISA: the Employment Retirement Income Security Act of 1974, as amended from time
to time, and the rules and regulations promulgated thereunder.




          ERISA Affiliate: all members of a controlled group of corporations and all trades
and business (whether or not incorporated) under common control and all other entities which,
together with Borrower, are treated as a single employer under any or all of Section 414(b), (c),
(m) or (o) of the Code.




          GAAP: generally accepted accounting principles in the United States of America as
of the date of the applicable financial report.




          Governmental Authority: any court, board, agency, commission, office or authority
of any nature whatsoever for any governmental unit (federal, state, county, district, municipal,
city or otherwise) now or hereafter in existence.




          Guarantors: each and collectively, Bruce S. Brickman, Kathleen Corton and Roderick
O’Connor, on a joint and several basis.




          Interest Period: (i) the period from the date hereof through the first day
thereafter that is the 5th day of a calendar month and (ii) each period thereafter from
the 6th day of each calendar month through the 5th day of the following
calendar month; except that the Interest Period, if any, that would otherwise commence before and
end after the Maturity Date shall end on the Maturity Date. Notwithstanding the foregoing, if
Lender exercises its right to change the Payment Date to a New Payment Date in accordance with
Section 2.2.4 hereof, then from and after such election, each Interest Period shall be the period
from the New Payment Date in each calendar month through the day in the next succeeding calendar
month immediately preceding the New Payment Date in such calendar month.




          Interest Rate: a rate of interest equal to 5.58% per annum (or, when applicable
pursuant to this Agreement or any other Loan Document, the Default Rate).




          Key Principals: Bruce S. Brickman, Kathleen Corton and Roderick O’Connor.




          Leases: all leases and other agreements or arrangements heretofore or hereafter
entered into affecting the use, enjoyment or occupancy of, or the conduct of any activity upon or
in, the Property or the Improvements, including any guarantees, extensions,
renewals, modifications or amendments thereof and all additional remainders, reversions and
other rights and estates appurtenant thereunder.





4









 








          Lease Sweep Period: the period which shall commence and end as hereinafter
provided.



          A Lease Sweep Period shall commence on the first Payment Date following the
occurrence of any of the following:




          (i) any Major Lease (or any portion thereof) is surrendered, cancelled or terminated
prior to its then current expiration date, unless (x) such surrender,
cancellation or termination occurs prior to December 1, 2013 and (y) after giving affect to
such surrender, cancellation or termination, at least ninety percent (90%) of the leasable
Improvements are demised pursuant to Leases; or




          (ii) any Major Tenant shall (x) prior to December 1, 2013, discontinue its business
(i.e., “goes dark”) at all or any material portion (i.e., in excess of 75,000 square feet)
of its premises at the Property for a period in excess of six (6) months, or (y) from and
after December 1, 2013, (x) discontinue its business at all or any portion of
its premises at the Property or (y) give notice that it intends to discontinue its business
at all or any portion of its premises at the Property; or




          (iii) the occurrence and continuance (beyond any applicable notice and cure periods)
of a material default under any Major Lease by the applicable Major Tenant thereunder (the
materiality of any such default to be determined by Lender in its reasonable judgment); or




          (iv) the occurrence of a Major Tenant Insolvency Proceeding; or




          (v) the credit rating of any Major Tenant being downgraded below BBB by S&P (or its
functional equivalent by any other Rating Agency).



          A Lease Sweep Period shall end upon the earliest to occur of:




               (1)
the reasonable determination by Lender that sufficient funds have been accumulated
in the Special Rollover Reserve Subaccount to pay for all anticipated expenses in
connection with the re-leasing of the space under the applicable Major Lease that gave rise
to the subject Lease Sweep Period, including brokerage commissions and tenant improvements,
and any anticipated shortfalls of payments required hereunder during any period of time
that Rents are insufficient as a result of down-time or free rent periods; or




               (2) the date on which all of the space demised under the subject Major Lease (or
portion thereof) that gave rise to the subject Lease Sweep Period has been fully leased
pursuant to a replacement Lease or replacement Leases approved by Lender, and entered into
in accordance with Section 5.10 hereof, and all Approved Major Lease Leasing Expenses (and
any other expenses in connection with the re-tenanting of such space) have been paid in
full or reserved or escrowed; or





5









 





               (3) the occurrence of any of the following:



          (A) with respect to a Lease Sweep Period caused by a matter described in
clause (iii) above, if the subject Major Tenant default has been cured, and no
other material Major Tenant default has occurred for a period of six (6)
consecutive months following such cure (the materiality of any such default to be
determined by Lender in its reasonable judgment); or




          (B) with respect to a Lease Sweep Period caused by a matter described in
clause (iv) above, if the applicable Major Tenant Insolvency Proceeding has
terminated or the applicable Major Lease has been affirmed or assumed, or has been
assigned in a manner reasonably satisfactory to Lender, or




          (C) with respect to a Lease Sweep Period caused by a matter described in
clause (v) above, upon the credit rating of the applicable Major Tenant being
restored to at least BBB by S&P (or its functional equivalent by any other Rating
Agency).



          Lease Termination Payments: (i) all fees, penalties, commissions or other payments
made to Borrower in connection with or relating to the rejection, buy-out, termination, surrender
or cancellation of any Lease (including in connection with any bankruptcy proceeding), (ii) any
security deposits or proceeds of letters of credit held by Borrower in lieu of cash security
deposits, which Borrower is permitted to retain pursuant to the applicable provisions of any Lease
and (iii) any payments made to Borrower relating to unamortized tenant improvements and leasing
commissions under any Lease.




          Legal Requirements: statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting Borrower, any Loan
Document or all or part of the Property or the construction, ownership, use, alteration or
operation thereof, whether now or hereafter enacted and in force, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instrument, either of record or known to Borrower, at any time in
force affecting all or part of the Property.




          Letter of Credit: an irrevocable, unconditional, transferable, clean sight draft
letter of credit acceptable to Lender in its reasonable discretion and to the Rating Agencies
(either an evergreen letter of credit or one which does not expire until at least thirty (30) days
after the Stated Maturity Date) in favor of Lender and entitling Lender to draw thereon in New
York, New York (or in accordance with the procedures of the issuing bank, provided that such
issuing bank allows for draws by facsimile), issued by a domestic Approved Bank or the U.S. agency
or branch of a foreign Approved Bank, to an applicant/obligor that is not the Borrower.



          Lien: any mortgage, deed of trust, lien (statutory or otherwise), pledge,
hypothecation, easement, restrictive covenant, preference, assignment, security interest or any
other encumbrance, charge or transfer of, or any agreement to enter into or create any
of the foregoing, on or affecting all or any part of the Property or any interest therein, or
any direct or indirect interest in Borrower, including any conditional sale or other title
retention agreement,


6









 










any financing lease having substantially the same economic effect as any of the foregoing, the
filing of any financing statement, and mechanics, materialmen’s and other similar liens and
encumbrances.




          Loan Documents: this Agreement and all other documents, agreements and instruments
now or hereafter evidencing or securing the Loan, including the following, each of which is dated
as of the date hereof: (i) the Promissory Note or Promissory Notes made by Borrower to Lender in
the aggregate principal amount equal to the Loan (the “Note”), (ii) the Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing made by Borrower to a trustee
in favor of Lender which covers the Property (the “Mortgage”), (iii) Assignment of
Leases and Rents from Borrower to Lender, (iv) Assignment of Agreements, Licenses, Permits and
Contracts from Borrower to Lender, (v) the Clearing Account Agreement (the “Clearing Account
Agreement”) among Borrower, Lender, Manager and Clearing Bank, (vi) the Deposit Account
Agreement (the “Deposit Account Agreement”) among Borrower, Lender, Manager and the
Deposit Bank and (vii) the Guaranty of Recourse Obligations made by Guarantors; as each of the
foregoing may be (and each of the foregoing defined terms shall refer to such documents as they may
be) amended, restated, replaced, severed, split, supplemented or otherwise modified from time to
time (including pursuant to Section 9.1.8 hereof).




          Major Lease: any Lease under which a Duke Entity (and/or its Affiliates) is a
tenant; but only to the extent that any such Lease does not expire prior to December 31, 2018.




          Major Tenant: any tenant under a Major Lease (leased by such tenant and/or its
Affiliates).




          Major Tenant Insolvency Proceeding: (A) the admission in writing by either Duke
Entity of its inability to pay its debts generally, or the making of a general assignment for the
benefit of creditors, or the instituting by either Duke Entity of any proceeding seeking to
adjudicate it insolvent or seeking a liquidation or dissolution, or the taking advantage by either
Duke Entity of any Insolvency Law (as hereinafter defined), or the commencement by either Duke
Entity of a case or other proceeding naming it as debtor under any Insolvency Law or the
instituting of a case or other proceeding against or with respect to either Duke Entity under any
Insolvency Law or (B) the instituting of any proceeding against or with respect to either Duke
Entity seeking liquidation of its assets or the appointment of (or if either Duke Entity shall
consent to or acquiesce in the appointment of) a receiver, liquidator, conservator, trustee or
similar official in respect of it or the whole or any substantial part of its properties or assets
or the taking of any corporate, partnership or limited liability company action in furtherance of
any of the foregoing. As used herein, the term “Insolvency Law”. shall mean Title 11 of
the United States Code (11 U.S.C. §§ 101 et seq.) as the same has been or may be amended or
superseded from time to time, or any other applicable domestic or foreign liquidation,
conservatorship, bankruptcy, receivership, insolvency, reorganization, or any
similar debtor relief laws affecting the rights, remedies, powers, privileges and benefits of
creditors generally.




          Management Agreement: the management agreement between Borrower and Manager,
pursuant to which Manager is to manage the Property, as same may be amended, restated, replaced,
supplemented or otherwise modified from time to time in accordance with Section 5.12 hereof.





7









 









          Manager: Brickman Management LLC, a Delaware limited liability company, or any
successor, assignee or replacement manager appointed by Borrower in accordance with Section
5.12 hereof.




          Material Alteration: any alteration affecting structural elements of the Property
the cost of which exceeds $250,000; provided, however, that in no event shall (i) any tenant
improvement work performed pursuant to any Lease existing on the date hereof or entered into
hereafter in accordance with the provisions of this Agreement, or (ii) alterations performed as
part of a Restoration, constitute a Material Alteration.




          Material Lease: all Leases which individually or in the aggregate with respect to
the same tenant and its Affiliates (i) cover more than 40,000 square feet of the Improvements or
(ii) have a gross annual rent of more than fifteen percent (15%) of the total annual Rents or (iii)
demise at least one (l) full floor of the Improvements.




          Maturity Date: the date on which the final payment of principal of the Note
becomes due and payable as therein provided, whether at the Stated Maturity Date, by declaration of
acceleration, or otherwise.




          Minimum DSCR Threshold: with respect to any Calculation Date which occurs (i) from
and after December 31, 2006 through and including December 31, 2009, a Debt Service Coverage Ratio
of 0.90: 1.00; (ii) after December 31, 2009 through and including December 31, 2012, a Debt Service
Coverage Ratio of 1.00:1.00; or (iii) after December 31, 2012, a Debt Service Coverage Ratio of
1.10:1.00.




          Minor Lease: any Lease that is not a Material Lease.




          Net Operating Income: for any period, the actual net operating income of the
Property determined on a cash basis of accounting, after deducting therefrom deposits to (but not
withdrawals from) any reserves required under this Agreement, and without giving credit for
non-recurring extraordinary items of income.




          Non-Major Lease: any Lease that is not a Major Lease.




          Officer’s Certificate: a certificate delivered to Lender by Borrower which is
signed by a senior executive officer of Borrower.



          Other Charges: all ground rents, maintenance charges, impositions other than
Taxes, and any other charges, including vault charges and license fees for the use of vaults,
chutes and similar areas adjoining the Property, now or hereafter levied or assessed or imposed
against the Property or any part thereof.




          Payment Date: the 6th day of each calendar month or, upon Lender’s
exercise of its right to change the Payment Date in accordance with Section 2.2.4 hereof,
the New Payment Date (in either case, if such day is not a Business Day, the Payment Date shall be
the first Business Day thereafter). The first Payment Date hereunder shall be January 6, 2006.






8









 








          Permitted Encumbrances: (i) the Liens created by the Loan Documents, (ii) all Liens and
other matters disclosed in the Title Insurance Policy, (iii) Liens, if any, for Taxes or Other
Charges not yet due and payable and not delinquent, (iv) any workers’, mechanics’ or other similar
Liens encumbering the Property provided that any such Lien is bonded or discharged within thirty
(30) days after Borrower first receives notice of such Lien, (v) such other title and survey
exceptions as Lender approves in writing in Lender’s discretion, and (vi) any Lien (but not the
foreclosure thereon, unless the same constitutes a Permitted Transfer) encumbering direct or
indirect interests in Borrower, provided that the holder of any such Lien (together with its
Affiliates) does not hold a Lien or Liens which, (A) individually or in the aggregate, encumber 49%
or more of the interests in Borrower or (B) if foreclosed upon, would result in such holder (other
than a Key Principal) acquiring Control of Borrower.




          Permitted Transfers:





          (i) a Lease entered into in accordance with the Loan Documents;
or




          (ii) a Permitted Encumbrance; or




          (iii) a Transfer and Assumption; or




          (iv) Transfer of Equipment in Borrower’s ordinary course of business (provided that,
to the extent reasonably required for the operation of the Property, such Equipment is
replaced with Equipment of equivalent value and functionality); or




          (v) provided that no Event of Default shall then exist and be continuing, a Transfer
of an interest in Borrower to any Person provided that:




               (A) such Transfer shall not (x) cause the transferee (other than Key Principal),
together with its Affiliates, to acquire Control of Borrower or to increase its direct or
indirect interest in Borrower to an amount which equals or exceeds 49% or (y) result in
Borrower no longer being Controlled by Key Principal(s);




               (B) after giving effect to such Transfer, the Key Principals and/or the Brickman Fund
shall continue to own at least fifty one percent (51%) of all equity interests
(direct or indirect) in Borrower;




               (C) if such Transfer would cause the transferee to increase its direct or indirect
interest in Borrower to an amount which equals or exceeds twenty-five percent (25%), Lender
shall have approved in its reasonable discretion such proposed transferee, which approval
shall be based upon Lender’s satisfactory determination as to the reputable character and
creditworthiness of
such proposed transferee, as evidenced by credit and background checks performed by
Lender and other information reasonably requested by Lender;




               (D) Borrower shall give Lender notice of such Transfer together with copies of all
instruments effecting such Transfer not less than ten (10) days prior to the date of such
Transfer; and



9









 






               (E) the legal and financial structure of Borrower and its members and the single
purpose nature and bankruptcy remoteness of Borrower and its members after such Transfer, shall
satisfy Lender’s then current applicable underwriting criteria and requirements; or




          (vi) provided that no Event of Default shall then exist and be continuing, a Transfer of an
interest in Borrower, which shall cause the transferee to increase its direct or indirect interest
in Borrower to an amount which equals or exceeds 49% or which results in a change of Control of
Borrower, provided that:




               (A) unless such Transfer is to a Key Principal, such Transfer is first approved by Lender in
its sole and absolute discretion;




               (B) Borrower, at its sole cost and expense, shall have (1) delivered (or caused to be
delivered) to Lender and, if such Transfer occurs after a Secondary Market Transaction, the
applicable Rating Agencies, a substantive non-consolidation opinion with respect to Borrower in
form and substance satisfactory to Lender and the applicable Rating Agencies and (2) reimbursed
Lender for all reasonable expenses incurred by it in connection with such Transfer; and




               (C) if such Transfer occurs after a Secondary Market Transaction, Borrower, at its sole cost
and expense, shall have delivered (or caused to be delivered) to Lender and the applicable Rating
Agencies, a Rating Comfort Letter; or




          (vii) a Transfer of any direct or indirect interest in Borrower related to or in connection
with the estate planning of such transferor to (1) an immediate family member of such interest
holder (or to partnerships or limited liability companies Controlled solely by one or more of such
family members) or (2) a trust established for the benefit of such immediate family member (any
such transferee permitted pursuant to this clause (vii) or clause (viii) below, a “Key
Principal Estate Planning Transferee”), provided that:




               (A) such Transfer shall not result in Borrower no longer being Controlled by a Key Principal
(in the sense of clause (ii) of the defined term “Control”);




               (B) such Transfer shall not otherwise result in a change of the day to day management and
operations of the Property;




               (C) if such Transfer results in the transferee (other than Key Principal (directly or
indirectly)) obtaining Control of Borrower (only in the sense of clause (i) of the defined term
“Control”), Borrower shall give Lender notice of such Transfer not less than ten (10) days prior to
the date of such Transfer; and




               (D) Borrower shall continue to be a Special Purpose Bankruptcy Remote Entity; or




          (viii) a Transfer of any direct or indirect interest in Borrower that occurs by devise or
bequest or by operation of law upon the death of a natural person that was



10









 







the holder of such interest to a member of the immediate family of such interest holder or a trust
established for the benefit of such immediate family member (or to partnerships or limited
liability companies Controlled solely by one or more of such family members), provided that:




               (A) such Transfer shall not otherwise result in a change of the management and
operations of the Property;




               (B) if such Transfer results in any transferee (other than (A) Key Principal (directly or
indirectly) or (B) the estate of a remaining Key Principal (during the pendency of the settlement
by the estate of such Key Principal and if such Transfer occurs as a result of the death of such
Key Principal) (a “Key Principal Estate”)), obtaining Control of Borrower,
Borrower shall give Lender notice of such Transfer together with copies of all instruments
effecting such Transfer not less than 10 days after the date of such Transfer;




               (C) Borrower shall continue to be a Special Purpose Bankruptcy Remote Entity;




               (D) if (x) any such Transfer would result in Borrower no longer being Controlled (in the sense
of clause (ii) of the defined term “Control”) by at least one of the Key Principals or a Key
Principal Estate and (y) such Transfer occurs prior to the occurrence of a Secondary Market
Transaction, then (I) such Transfer is approved by Lender in writing within 30 days
after any such Transfer, which approval shall not be unreasonably withheld or delayed, and (2)
Borrower shall reimburse Lender for all reasonable expenses incurred by Lender in connection with
such Transfer; and




               (E) if (x) any such Transfer would result in Borrower no longer being Controlled (in the sense
of clause (ii) of the defined term “Control”) by at least one of the Key Principals or a Key
Principal Estate and (y) such Transfer occurs after the occurrence of a Secondary Market
Transaction, then Borrower, at Borrower’s sole cost and expense, shall, within 90 days
after any such Transfer (or such longer time as may reasonably be necessary for Borrower to obtain
the Rating Comfort Letters required pursuant to this clause (E) (provided Borrower is diligently
pursuing same)), (1) deliver (or cause to be delivered) the applicable Rating Comfort Letters to
Lender, (2) obtain the written consent of Lender which shall not be unreasonably withheld or
delayed (provided that Lender’s approval may be conditioned upon Borrower delivering a Rating
Comfort Letter as set forth in the previous clause (E)(1)) and (3) reimburse Lender for all
reasonable expenses incurred by Lender in connection with such Transfer;




For purposes of clause (vii), “immediate family member” shall mean a sibling, family trust,
parent, spouse, child (or step-child), grandchild or other lineal descendant of the interest
holder.




Notwithstanding anything to the contrary contained in clauses (v), (v), (vi), (vii) or (viii) of
this definition of “Permitted Transfer”, if, as a result of such Permitted Transfer, no direct or
indirect interest in Borrower shall continue to be owned by at least one of the



11









 






Guarantors, it shall also be a condition hereunder that one or more creditworthy
Persons reasonably satisfactory to Lender that Controls Borrower or owns a direct or
indirect interest in Borrower, shall execute and deliver a guaranty of recourse obligations
(in the same form as the guaranty of recourse obligations delivered to Lender by Guarantors
on the date hereof) (A) in the case of a Permitted Transfer described in clause (v), (vi)
or (vii), on or prior to the date of such Permitted Transfer or (B) in the case of a
Permitted Transfer described in clause (viii), within thirty (30) days after the date of
such Permitted Transfer, pursuant to which, in each case, the replacement guarantor agrees
to be liable under such guaranty of recourse obligations (whereupon the previous guarantor
shall be released from any further liability under the guaranty and from and after the date
of such Permitted Transfer, such replacement guarantor shall be the “Guarantor” for all
purposes set forth in this Agreement (it being agreed and understood that the
previous guarantors shall remain the “Guarantor” with respect to any and all obligations
accruing prior to the date of such Permitted Transfer)).



          Person: any individual, corporation, partnership, limited liability company, joint venture,
estate, trust, unincorporated association, any other person or entity, and any federal, state,
county or municipal government or any bureau, department or agency thereof and any fiduciary acting
in such capacity on behalf of any of the foregoing.




          Plan: (i) an employee benefit or other plan established or maintained by Borrower or any ERISA
Affiliate or to which Borrower or any ERISA Affiliate makes or is obligated to make contributions
and (ii) which is subject to Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code.




          Post-Closing Payments: each and collectively, the “Post-Closing Payments”, as such term is
defined in the Purchase and Sale Agreement, and the “P-1 West Net Rent Yield”, as such term is
defined in the Purchase and Sale Agreement.




          Property: the parcel of land and Improvements thereon owned by Borrower and encumbered by the
Mortgage; together with all rights pertaining to such real property and Improvements, and all other
collateral for the Loan as more particularly described in the Granting Clauses of the Mortgage and
referred to therein as the Trust Property. The land, Improvements and Fixtures included in the
Property are located in Durham, North Carolina.




          Purchase and Sale Agreement: that certain Purchase and Sale Agreement dated as of September
26, 2005 by and among THE GMH FAMILY L.L.C., a North Carolina limited liability company, THE MMDT
FAMILY L.L.C., a North Carolina limited liability company, THE GARY M. HOCK L.L.C., a North
Carolina limited liability company, and Borrower, as amended by that certain First Amendment to
Purchase and Sale Agreement dated October 3, 2005, that certain Second Amendment to Purchase and
Sale Agreement dated October 14, 2005, that certain Third Amendment to Purchase and Sale Agreement
dated October 14, 2005, and that certain Fourth
Amendment to Purchase and Sale Agreement dated November 14, 2005, pursuant to which the
Brickman Fund became a party thereto.




          Rating Agency: each of Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc. (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”), and Fitch, Inc., a


12









 







division of Fitch Ratings Ltd. (“Fitch”) or any other nationally-recognized statistical rating
organization to the extent any of the foregoing have been engaged by Lender or its designee in
connection with or in anticipation of any Secondary Market Transaction.




          Rating Comfort Letter: a letter issued by each of the applicable Rating Agencies which
confirms that the taking of the action referenced to therein will not result in any qualification,
withdrawal or downgrading of any existing ratings of Securities created in a Secondary Market
Transaction.




          Release Date: the earlier to occur of (i) the forty second (42nd)
Payment Date of the Term and (ii) the date that is two (2) years from the “startup day”
(within the meaning of Section 860G(a)(9) of the Code) of the REMIC Trust established in connection
with the final Secondary Market Transaction involving this Loan.




          REMIC Trust: a “real estate mortgage investment conduit” within the meaning of Section 860D of
the Code that holds the Note.




          Rents: all rents, rent equivalents, moneys payable as damages (including payments by reason of
the rejection of a Lease in a Bankruptcy Proceeding) or in lieu of rent or rent equivalents,
royalties (including all oil and gas or other mineral royalties and bonuses), income, fees,
receivables, receipts, revenues, deposits (including security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other payment and consideration
of whatever form or nature received by or paid to or for the account of or benefit of Borrower,
Manager or any of their agents or employees from any and all sources arising from or attributable
to the Property and the Improvements, including all receivables, customer obligations, installment
payment obligations and other obligations now existing or hereafter arising or created out of the
sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of
the Property or rendering of services by Borrower, Manager or any of their agents or
employees and proceeds, if any, from business interruption or other loss of income
insurance.




          Scheduled Defeasance Payments: the Monthly Debt Service Payment Amount required under the
Note for all Payment Dates occurring after the Defeasance Date (including the outstanding Principal
balance on the Note as of the Stated Maturity Date).




          Security Agreement: a security agreement in form and substance that would be satisfactory to
Lender (in Lender’s sole but good faith discretion) pursuant to which Borrower grants Lender a
perfected, first priority security interest in the Defeasance Collateral Account and the Defeasance
Collateral.




          Servicer: a servicer selected by Lender to service the Loan, including any “master servicer”
or “special servicer” appointed under the terms of any pooling and servicing agreement or similar
agreement entered into as a result of a Secondary Market Transaction.




          State: the state in which the Property is located.




          Stated Maturity Date: December 6, 2015, as such date may be changed in accordance with
Section 2.2.4 hereof.






13









 








          Taxes: all real estate and personal property taxes, assessments, water rates or sewer rents,
maintenance charges, impositions, vault charges and license fees, now or hereafter levied or
assessed or imposed against all or part of the Property.




          Term: the entire term of this Agreement, which shall expire upon repayment in full of the Debt
and full performance of each and every obligation to be performed by Borrower pursuant to the Loan
Documents, except for Borrower’s indemnification obligations that are stated to survive the Term.




          Title
Insurance Policy: the ALTA mortgagee title insurance policy in the form reasonably
acceptable to Lender issued with respect to the Property and insuring the Lien of the
Mortgage.




          Transfer:
(i) any sale, conveyance, transfer, Lease or assignment, or the entry
into any agreement to sell, convey, transfer, lease or assign, whether by law or otherwise, of, on,
in or affecting (x) all or part of the Property (including any legal or beneficial direct or
indirect interest therein), (y) any direct or indirect interest in Borrower (including any profit
interest), or (z) any direct or indirect interest in Borrower or (ii) any change of Control of
Borrower. For purposes hereof, (i) a Transfer of an interest in Borrower
shall be deemed to include (A) if Borrower or controlling shareholder of Borrower is a corporation,
the voluntary or involuntary sale, conveyance or transfer of such corporation’s stock (or the stock
of any corporation directly or indirectly controlling such corporation by operation of law or
otherwise) or the creation or issuance of new stock in one or a series of transactions by which an
aggregate of more than ten percent (10%) of such corporation’s stock shall be vested in a party or
parties who are not now stockholders or any change in the Control of such corporation and (B) if
Borrower or controlling shareholder of Borrower is a limited or general partnership, joint venture
or limited liability company, the change, removal, resignation or addition of a general partner,
managing partner, limited partner, joint venturer or member or the transfer of the partnership
interest of any general partner, managing partner or limited partner or the transfer of the
interest of any joint venturer or member and (ii) a change of Control of Borrower shall be deemed
to have occurred if (A) there is any change in the identity of any individual or entity or any
group of individuals or entities who have the right, by virtue of any partnership agreement,
articles of incorporation, by-laws, articles of organization, operating agreement or any other
agreement, with or without taking any formative action, to cause Borrower to take some action or to
prevent, restrict or impede Borrower from taking some action which, in either case, Borrower could
take or could refrain from taking were it not for the rights of such individuals or (B) the
individual or entity or group of individuals or entities that Control Borrower as described in
clause (A) ever cease to own at least fifty one percent (51%) of all equity interests (direct or
indirect) in Borrower.




          UCC:
the Uniform Commercial Code as in effect in the State or the state in which
any of the Cash Management Accounts are located, as the case may be.




          U.S.
Obligations: obligations that are “government securities” within the meaning of Section
2(a)(16) of the Investment Company Act of 1940, as amended, and, to the extent acceptable to the
applicable Rating Agencies, other non-callable government securities satisfying the REMIC
Provisions (hereinafter defined), in each case to the extent such obligations are not
subject to prepayment, call or early redemption. As used herein, “REMIC






14









 







Provisions” mean provisions of the federal income tax law relating to real estate
mortgage investment conduits, which appear at Sections 860A through 860G of Subchapter M of Chapter
1 of Subtitle A of the Code, and related provisions, and temporary and final regulations and, to
the extent not inconsistent with such temporary and final regulations, proposed regulations, and
published rulings, notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.




          Utility
Expenses: expenses that are for electric, gas, oil, water, sewer or other
utility services to the Property.




          Welfare
Plan: an employee welfare benefit plan, as defined in Section 3(1) of
ERISA.




          Yield
Maintenance Premium: an amount which, when added to the outstanding
Principal, would be sufficient to purchase U.S. Obligations which provide payments (a) on or prior
to, but as close as possible to, all successive scheduled payment dates under this Agreement
through the Stated Maturity Date and (b) in amounts equal to the Monthly Debt Service Payment
Amount and/or Monthly Interest Payment Amount, as the case may be, required under this Agreement
through the Stated Maturity Date together with the outstanding principal balance of the Note as of
the Stated Maturity Date assuming all such Monthly Debt Service Payment Amounts and/or Monthly
Interest Payment Amounts, as the case may be, are made (including any servicing costs associated
therewith). In no event shall the Yield Maintenance Premium be less than zero.




     1.2 Index of Other Definitions. The following terms are defined in the sections or
Loan Documents indicated below:



“Annual Budget” - 6.3.5

“Applicable Taxes” - 2.2.3

“Approved Annual Budget” - 6.3.5

“Approved Capital Budget” - 6.3.5

“Approved Operating Budget” - 6.3.5

“Award” - 7.3.2

“Bankruptcy Proceeding” - 4.7

“Borrower Provided Information” - 9.1.1

“Borrower’s Recourse Liabilities” - 10.1

“Capital Reserve Subaccount” - 3.4

“Cash Collateral Subaccount” - 3.10

“Cash Management Accounts” - 3.11

“Casualty” - 7.2.1

“Casualty/Condemnation Prepayment” - 2.3.2

“Casualty/Condemnation Subaccount” - 3.7

“Clearing Account” - 3.1

“Clearing Account Agreement” - 1.1 (Definition of Loan Documents)

“Clearing Bank” - 3.1

“Condemnation” - 7.3.1

“Defeasance Collateral Account” - 2.3.3




15









 





“Defeasance Event” - 2.3.3

“Defeasance Date” - 2.3.3

“Deposit Account” - 3.1

“Deposit Account Agreement” - 1.1 (Definition of Loan Documents)

“Disclosure Document” - 9.1.2

“DSCR Cash Management Period” - 1.1 (Definition of Cash Management Period)

“Easements” - 4.14

“Eligible Account” - Deposit Account Agreement

“Endorsement” - 5.26

“Environmental Laws” - 4.21

“Equipment” - Mortgage

“Event of Default” - 8.1

“Exchange Act” - 9.1.2

“Fitch” - 1.1 (Definition of Rating Agency)

“Government Lists” - 5.31

“Hazardous Substances” - 4.21

“Improvements” - Mortgage

“Indemnified Liabilities” - 5.30

“Indemnified Party” - 5.30

“Independent Director” - Schedule 5

“Initial Rollover Deposit” - 3.5.1

“Insurance Premiums” - 7.1.2

“Insured Casualty” - 7.2.2

“Key Principal Estate” - 1.1 (Definition of Permitted Transfers)

“Key Principal Estate Planning Transferee” - 1.1 (Definition of Permitted Transfers)

“Late Payment Charge” - 2.5.3

“Lender’s Consultant” - 5.8.2

“Liabilities” - 9.1.3

“Licenses” - 4.11

“Loan” - 2.1

“Monthly Debt Service Payment Amount” - 2.2.1

“Monthly Interest Payment Amount” - 2.2.1

“Moody’s” - 1.1 (Definition of Rating Agency)

“Mortgage” - 1.1 (Definition of Loan Documents)

“New Payment Date” - 2.2.4

“Note” - 1.1 (Definition of Loan Documents)

“Notice” - 6.1

“O & M Program” - 5.8.3

“OFAC’ - 5.31

“Ongoing Rollover Deposit” - 3.5.1

“Operating Expense Subaccount” - 3.6

“Patriot Act” - 5.31”

“Patriot Act
Offense” - 5.31

“Permitted Indebtedness” - 5.22

“Permitted Investments” - Deposit Account Agreement

“Permitted Prepayment Date” - 2.3.4




16









 





“Policies” - 7.1.2

“Principal” - 2.1

“Proceeds” - 7.2.2

“Proposed Material Lease” - 5.10.2

“Provided information” - 9.1.1

“Qualified Carrier” - 7.1.1

“Remaining Space” - 3.5.1

“Remedial Work” - 5.8.2

“REMIC Provisions” - 1.1 (Definition of U.S. Obligations)

“Rent Roll” - 4.16

“Required Records” - 6.3.6

“Restoration” - 7.4.1

“Rollover Reserve Subaccount” - 3.5

“S&P” - 1.1 (Definition of Rating Agency)

“Secondary Market Transaction” - 9.1.1

“Securities” - 9.1.1

“Securities Act” - 9.1.2

“Security Deposit Account” - 3.8

“Security Deposit Subaccount” - 3.8

“Significant Casualty” - 7.2.2

“Special Purpose Bankruptcy Remote Entity” - 5.13

“Special Rollover Reserve Subaccount” - 3.5.2

“Springing Recourse Event” - 10.1

“Subaccounts” - 3.1

“Successor Borrower” - 2.3.3

“Tax and Insurance Subaccount” - 3.3

“Third Party Report” - 9.1.3

“Toxic Mold” - 4.21

“Transfer and Assumption” - 5.26

“Transferee Borrower” - 5.26




     1.3 Principles of Construction. Unless otherwise specified, (i) all references to
sections and schedules are to those in this Agreement, (ii) the words “hereof,” “herein” and
“hereunder” and words of similar import refer to this Agreement as a whole and not to any
particular provision, (iii) all definitions are equally applicable to the singular and plural forms
of the terms defined, (iv) the word “including” means “including but not limited to,” and (v)
accounting terms not specifically defined herein shall be construed in accordance with GAAP.


2. GENERAL LOAN TERMS




     2.1 The Loan. Lender is making a loan (the “Loan”) to Borrower on the date
hereof, in the original principal amount (the “Principal”) of $80,000,000, which shall
mature on the Stated Maturity Date. Borrower acknowledges receipt of the Loan, the proceeds of which
are being and shall be used to (i) acquire the Property, (ii) fund certain of the Subaccounts, and




17











 





(iii) pay transaction costs. Any excess proceeds may be used for any lawful purpose. No
amount repaid in respect of the Loan may be reborrowed.




     2.2 Interest; Monthly Payments.


          2.2.1 Generally. From and after the date hereof, interest on the unpaid Principal
shall accrue at the Interest Rate and be payable as hereinafter provided. On January 6, 2006 and
each Payment Date thereafter through and including the Payment Date immediately preceding the
Amortization Commencement Date, Borrower shall pay interest on the unpaid Principal accrued at the
Interest Rate during the Interest Period immediately preceding such Payment Date (the “Monthly
Interest Payment Amount”). On the Amortization Commencement Date and each Payment Date thereafter
through and including November 6, 2015, the Principal and interest thereon at the Interest Rate
shall be payable in equal monthly installments of $458,254.77 (the “Monthly Debt Service Payment
Amount”); which is based on the Interest Rate and a 360-month amortization schedule. The Monthly
Debt Service Payment Amount due on any Payment Date shall first be applied to the payment of
interest accrued during the preceding Interest Period and the remainder of such Monthly Debt
Service Payment Amount shall be applied to the reduction of the unpaid Principal. All accrued and
unpaid interest shall be due and payable on the Maturity Date. If the Loan is repaid on any date
other than on a Payment Date (whether prior to or after the Stated Maturity Date), Borrower shall
also pay interest that would have accrued on such repaid Principal to but not including the next
Payment Date.


          2.2.2 Default Rate. After the occurrence and during the continuance of an Event of
Default, the entire unpaid Debt shall bear interest at the Default Rate, and shall be payable upon
demand from time to time, to the extent permitted by applicable Law.


          2.2.3 Taxes. Any and all payments by Borrower hereunder and under the other Loan
Documents shall be made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding taxes imposed on Lender’s income, and franchise taxes imposed on Lender by the
law or regulation of any Governmental Authority (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to in this
Section 2.2.3 as “Applicable
Taxes”). If Borrower shall be required by law to deduct any
Applicable Taxes from or in respect of any sum payable hereunder to Lender, the following shall
apply: (i) the sum payable shall be increased as may be necessary so that after making
all required deductions (including deductions applicable to additional sums payable under this
Section 2.2.3), Lender receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrower shall make such deductions and (iii) Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority in accordance with
applicable law. Payments pursuant to this Section 2.2.3 shall be made within ten (10) days
after the date Lender makes written demand therefor.


          2.2.4 New Payment Date. Lender shall have the right, to be exercised not more than
once during the term of the Loan, to change the Payment Date to a date other than the sixth day of
each month (a “New Payment Date”), on thirty (30) days’ written notice to Borrower; provided,
however, that any such change in the Payment Date: (i) shall not modify the amount of regularly
scheduled monthly principal and interest payments, except that the first payment of



18









 








principal and interest payable on the New Payment Date shall be accompanied by interest at
the interest rate herein provided for the period from the Payment Date in the month in which the
New Payment Date first occurs to the New Payment Date, and (ii) shall change the Stated Maturity
Date to the New Payment Date occurring in the month set forth in the definition of Stated Maturity
Date; and (iii) shall extend the Amortization Commencement Date to the New Payment Date occurring
in the month set forth in the definition of Amortization Commencement Date.




     2.3 Loan Repayment.


          2.3.1 Repayment. Borrower shall repay the entire outstanding principal balance
of the Note in full on the Maturity Date, together with interest thereon to (but excluding) the
date of repayment and any other amounts due and owing under the Loan Documents. Borrower shall have
no right to prepay or defease all or any portion of the Principal except in accordance with
Section 2.3.2 below, Section 2.3.3 below Section 2.4 below, 2.3.4 below or
7.4.2 below. Except during the continuance of an Event of Default, all proceeds of any repayment,
including any prepayments of the Loan, shall be applied by Lender as follows in the following order
of priority: First, accrued and unpaid interest at the Interest Rate; Second,
to Principal; and Third, to and any other amounts then due and owing under the
Loan Documents. If prior to the Stated Maturity Date the Debt is accelerated by reason of an Event
of Default, then Lender shall be entitled to receive, in addition to the unpaid Principal and
accrued interest and other sums due under the Loan Documents, an amount equal to the Yield
Maintenance Premium applicable to such Principal so accelerated. During the continuance of an Event
of Default, all proceeds of repayment, including any payment or recovery on the Property (whether
through foreclosure, deed-in-lieu of foreclosure, or otherwise) shall, unless otherwise provided in
the Loan Documents, be applied in such order and in such manner as Lender shall elect in Lender’s
discretion.



          2.3.2 Mandatory Prepayments. The Loan is subject to mandatory prepayment
in certain instances of Insured Casualty or Condemnation (each a “Casualty/Condemnation
Prepayment”), in the manner and to the extent set forth in Section 7.4.2 hereof.
Each Casualty/Condemnation Prepayment, after deducting Lender’s costs and expenses (including
reasonable attorneys’ fees and expenses) in connection with the settlement or collection of the
Proceeds or Award, shall be applied in the same manner as repayments under Section 2.3.1
above, and if such Casualty/Condemnation Payment is made on any date other than a Payment Date,
then such Casualty/Condemnation Payment shall include interest that would have accrued on the
Principal prepaid to but not including the next Payment Date. Provided that no Event of Default
(other than an Event of Default which is caused solely by the applicable Insured Casualty or
Condemnation) is continuing, any such mandatory prepayment under this Section 2.3.2 shall
be without the payment of the Yield Maintenance Premium. Notwithstanding anything to the contrary
contained herein, each Casualty/Condemnation Prepayment shall be applied in inverse order of
maturity and shall not extend or postpone the due dates of the monthly installments due under the
Note or this Agreement, or change the amounts of such installments.


          2.3.3 Defeasance.



19









 







          (a) Conditions to Defeasance. Provided no Event of Default shall be continuing,
Borrower shall have the right after the Release Date and prior to the Permitted Prepayment Date to
voluntarily defease the entire amount of the Principal and obtain a release of the Lien of the
Mortgage by providing Lender with the Defeasance Collateral (a “Defeasance Event”),
subject to the satisfaction of the following conditions precedent:



               (i) Borrower shall give Lender not less than thirty (30) days prior written notice specifying
a Payment Date (the “Defeasance Date”) on which the Defeasance Event is to occur.



               (ii) Borrower shall pay to Lender (A) all payments of Principal and interest due on the Loan
to and including the Defeasance Date and (B) all other sums, then due under the Note, this
Agreement and the other Loan Documents;



               (iii) Borrower shall deposit the Defeasance Collateral into the Defeasance Collateral Account
and otherwise comply with the provisions of subsections (b) and (c) of this Section 2.3.3;



               (iv) Borrower shall execute and deliver to Lender a Security Agreement in respect of the
Defeasance Collateral Account and the Defeasance Collateral;



               (v) Borrower shall deliver to Lender an opinion of counsel for Borrower that is standard in
commercial lending transactions and subject only to customary qualifications, assumptions and
exceptions opining, among other things, that (A) Lender has a legal and valid perfected first
priority security interest in the Defeasance Collateral Account and the Defeasance Collateral, (B)
if a securitization has occurred, the REMIC Trust formed pursuant to such securitization will not
fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code as a result of a Defeasance Event pursuant to this Section 2.3.3,
and (C) a non-consolidation opinion with respect to the Successor Borrower;



               (vi) if required by any Rating Agency, Borrower shall deliver to Lender and the Rating
Agencies a Rating Comfort Letter as to the Defeasance Event;



               (vii) Borrower shall deliver an Officer’s Certificate certifying that the requirements set
forth in this Section 2.3.3 have been satisfied;



               (viii) Borrower shall deliver a certificate of a nationally recognized public accounting firm
acceptable to Lender certifying that (A) the Defeasance Collateral will generate monthly amounts
equal to or greater than the Scheduled Defeasance Payments, (B) the revenue from the Defeasance
Collateral will be applied within four (4) months of receipt towards payments of Debt Service,
(C) the securities that comprise the Defeasance Collateral are not subject to
prepayment, call or early redemption and (D) the interest income to Borrower (or the Successor
Borrower, if applicable) from the Defeasance Collateral will not in any tax year exceed the
interest expense associated with the defeased Loan;



               (ix) Borrower shall deliver such other certificates, opinions, documents and instruments as
Lender may reasonably request; and



20









 





               (x) Borrower shall pay all reasonable costs and expenses of Lender incurred in connection
with the Defeasance Event, including Lender’s reasonable attorneys’ fees and expenses and Rating
Agency fees and expenses.


          (b) Defeasance Collateral Account. On or before the date on which Borrower delivers
the Defeasance Collateral, Borrower shall open at any Eligible Institution the defeasance
collateral account (the “Defeasance Collateral
Account”) which shall be an Eligible
Account. The Defeasance Collateral Account shall contain only (i) Defeasance Collateral, and (ii)
cash from interest and principal paid on the Defeasance Collateral. All cash from interest and
principal payments paid on the Defeasance Collateral shall be paid over to Lender on each Payment
Date and applied first to accrued and unpaid interest and then to Principal. Any cash from interest
and principal paid on the Defeasance Collateral not needed to pay accrued and unpaid interest or
Principal shall be retained in the Defeasance Collateral Account as additional collateral for the
Loan. Borrower shall cause the Eligible Institution at which the Defeasance Collateral is deposited
to enter an agreement with Borrower and Lender, satisfactory to Lender in its sole
discretion, pursuant to which such Eligible Institution shall agree to hold and distribute the
Defeasance Collateral in accordance with this Agreement. The Successor Borrower shall be the owner
of the Defeasance Collateral Account and shall report all income accrued on Defeasance Collateral
for federal, state and local income tax purposes in its income tax return. Borrower shall pay all
cost and expenses associated with opening and maintaining the Defeasance Collateral Account. Lender
shall not in any way be liable by reason of any insufficiency in the Defeasance Collateral Account.


          (c) Successor Borrower. In connection with a Defeasance Event under this
Section 2.3.3, Borrower shall, if required by the Rating Agencies or if Borrower elects to do so, establish
or designate a successor entity (the “Successor
Borrower”) which shall be a Special
Purpose Bankruptcy Remote Entity and which shall be approved by the Rating Agencies. Any such
Successor Borrower may, at Borrower’s option, be an Affiliate of Borrower unless the Rating
Agencies shall require otherwise. Borrower shall transfer and assign all obligations, rights and
duties under and to the Defeased Note, together with the Defeasance Collateral to such Successor
Borrower. Such Successor Borrower shall assume the obligations under the Note and the Security
Agreement and Borrower shall be relieved of its obligations under such documents. Borrower shall
pay a minimum of $1,000 to any such Successor Borrower as consideration for assuming the
obligations under the Note and the Security Agreement. Borrower shall pay all costs and expenses
incurred by Lender, including Lender’s attorney’s fees and expenses, incurred in connection
therewith.



          2.3.4 Optional Prepayments. From and after the third Payment Date prior to the Stated
Maturity Date (the “Permitted Prepayment
Date”), Borrower shall have the right to
prepay the Loan in whole (but not in part), provided that Borrower gives Lender at least fifteen
(15) days’ prior written notice thereof. If any such prepayment is not made on a Payment Date,
Borrower shall also pay interest that would have accrued on
such prepaid Principal to, but not including, the next Payment Date. Any such prepayment shall
be made without payment of the Yield Maintenance Premium.



     2.4 Release of Property.



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          2.4.1 Release on Defeasance.


          (a) If Borrower has elected to defease the Principal and the requirements of Section
2.3.3 above and this Section 2.4 have been satisfied, the Property shall be released
from the Lien of the Mortgage and the Defeasance Collateral pledged pursuant to the Security
Agreement shall be the sole source of collateral securing the Note. In connection with the release
of the Lien, Borrower shall submit to Lender, not less than thirty (30) days prior to the
Defeasance Date (or such shorter time as is acceptable to Lender in its sole discretion), a
release of Lien (and related Loan Documents) for execution by Lender. Such release shall be in a
form appropriate in the jurisdiction in which the Property is located and contain standard
provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all
other documentation Lender reasonably requires to be delivered by Borrower in connection with such
release, together with an Officer’s Certificate certifying that such documentation (i) is in
compliance with all Legal Requirements, and (ii) will effect such release in accordance with the
terms of this Agreement. Borrower shall pay all costs, taxes and expenses associated with the
release of the Lien of the Mortgage, including Lender’s reasonable attorneys’ fees.


          2.4.2 Release on Payment in Full. Lender shall, upon the written request and at the
expense of Borrower, upon payment in full of the Debt in accordance herewith, release or, if
requested by Borrower, assign to Borrower’s designee (without any representation or warranty by and
without any recourse against Lender whatsoever), the Lien of the Loan Documents if not theretofore
released.



     2.5 Payments and Computations.


          2.5.1 Making of Payments. Each payment by Borrower shall be made in funds settled
through the New York Clearing House Interbank Payments System or other funds immediately available
to Lender by 11:00 a.m., New York City time, on the date such payment is due, to Lender
by deposit to such account as Lender may designate by written notice to Borrower. Whenever any such
payment shall be stated to be due on a day that is not a Business Day, such payment
shall be made on the first Business Day thereafter. All such payments shall be made irrespective
of, and without any deduction, set-off or counterclaim whatsoever and are payable without relief
from valuation and appraisement laws and with all costs and charges incurred in the collection or
enforcement thereof, including attorneys’ fees and court costs.


          2.5.2 Computations. Interest payable under the Loan Documents shall be computed on the
basis of the actual number of days elapsed over a 360-day year.



     2.5.3 Late Payment Charge. If any Principal (other than the balloon payment of
Principal payable on the Stated Maturity Date), interest or other sum due under any Loan Document
is not paid by Borrower on the date on which it is due, Borrower shall pay to Lender upon demand an
amount equal to the lesser of five percent (5%) of such unpaid sum or the maximum
amount permitted by applicable law (the “Late
Payment Charge”), in order to defray the expense incurred by Lender in handling and processing
such delinquent payment and to compensate Lender for the loss of the use of such delinquent
payment. Such amount shall be secured by the Loan Documents.



22









 





3. CASH MANAGEMENT AND RESERVES




     3.1 Cash Management Arrangements. Borrower shall cause all Rents to be
transmitted directly by non-residential tenants of the Property into an Eligible Account (the
“Clearing Account”) maintained by Borrower at a bank selected by Borrower, which shall
at all times be an Eligible Institution (the “Clearing Bank”) as more fully described
in the Clearing Account Agreement. Without in any way limiting the foregoing, all Rents received by
Borrower or Manager shall be deposited into the Clearing Account within one (1)
Business Day of receipt. Funds deposited into the Clearing Account shall be swept by the
Clearing Bank on a daily basis into Borrower’s operating account, unless a Cash Management Period
is continuing, in which event such funds shall be swept on a daily basis into an Eligible Account
at the Deposit Bank controlled by Lender (the “Deposit Account”) and applied and
disbursed in accordance with this Agreement. Funds in the Deposit Account shall be invested at
Lender’s discretion only in Permitted Investments. Lender will also establish subaccounts of the
Deposit Account which shall at all times be Eligible Accounts (and may be ledger or book entry
accounts and not actual accounts) (such subaccounts are referred to herein as
“Subaccounts”). The Deposit Account and any Subaccount will be under the
sole control and dominion of Lender, and Borrower shall have no right of withdrawal therefrom.
Borrower shall pay for all expenses of opening and maintaining all of the above accounts.



     3.2 Intentionally Omitted.



     3.3 Taxes and Insurance. Borrower shall pay to Lender on each Payment Date
(i) one-twelfth (l/12th) of the Taxes that Lender estimates will be payable
during the next twelve (12) months in order to accumulate with Lender sufficient funds
to pay all such Taxes at least thirty (30) days prior to their respective due dates and
(ii) one-twelfth
(1/12th) of the Insurance Premiums that Lender
estimates will be payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Lender sufficient funds to pay all such Insurance
Premiums at least thirty (30) days prior to the expiration of the Policies. Such amounts will be
transferred by Lender to a Subaccount (the “Tax and Insurance Subaccount”). Provided
that no Event of Default has occurred and is continuing, Lender will (a) apply funds in the Tax and
Insurance Subaccount to payments of Taxes and Insurance Premiums required to be made by Borrower
pursuant to Section 5.2 hereof and Section 7.1 hereof, provided that Borrower has
timely supplied Lender with notices of all Taxes and Insurance Premiums due, or (b) reimburse
Borrower for such amounts upon presentation of evidence of payment; subject, however, to Borrower’s
right to contest Taxes in accordance with Section 5.2 hereof. In making any payment
relating to Taxes and Insurance Premiums, Lender may do so according to any bill, statement or
estimate procured from the appropriate public office (with respect to Taxes) or insurer or agent
(with respect to Insurance Premiums), without inquiry into the accuracy of such bill, statement or
estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim
thereof. If Lender reasonably determines in its reasonable judgment that the funds in the Tax and
Insurance Subaccount will be insufficient to pay (or in excess of) the Taxes or Insurance Premiums
next coming due, Lender may increase (or decrease) the monthly contribution required to be made by
Borrower to the Tax and Insurance Subaccount to the extent required so there will be
sufficient funds.



23









 





     3.4 Capital Expense Reserves. Borrower shall pay to Lender on each Payment Date
an amount initially equal to $2,726.00 (which amount is equal to one-twelfth
(1/l2th) of the product obtained by multiplying $0.10 by the aggregate number
of rentable square feet of space in the Property). Lender will transfer such amounts into a
Subaccount (the “Capital Reserve Subaccount”). Additionally, upon thirty (30) days’
prior notice to Borrower, Lender may reassess the amount of the monthly payment required under this
Section 3.4 from time to time in its reasonable discretion (based upon then current
industry underwriting standards). Provided that no Event of Default has occurred and is continuing,
Lender shall disburse funds held in the Capital Reserve Subaccount to Borrower, within fifteen (15)
days after the delivery by Borrower to Lender of a request therefor (but not more often than once
per month), in increments of at least $5,000 provided that (i) such disbursement is for an Approved
Capital Expense; (ii) Lender shall have (if it desires) verified (by an inspection conducted at
Borrower’s expense if the requested disbursement is in excess of $25,000) performance of the work
associated with such Approved Capital Expense; and (iii) the request for disbursement is
accompanied by (A) an Officer’s Certificate certifying (1) that such funds will be used to pay or
reimburse Borrower for Approved Capital Expenses and a description thereof, (2) that all
outstanding trade payables (other than those to be paid from the requested disbursement or those
constituting Permitted Indebtedness) have been paid in full, (3) that the same has not been the
subject of a previous disbursement, and (4) that all previous disbursements have been used to pay
the previously identified Approved Capital Expenses, (B) if the requested disbursement is in excess
of $25,000, lien waivers or other evidence of payment satisfactory to Lender, (C) at Lender’s
option, a title search for the Property indicating that the Property is free from all Liens, claims
and other encumbrances not previously approved by Lender and (D) such other evidence as Lender
shall reasonably request that the Approved Capital Expenses at the Property to be funded by the
requested disbursement have been completed and are paid for or will be paid upon such disbursement
to Borrower. Any such disbursement of more than $25,000 to pay (rather than reimburse) Approved
Capital Expenses may, at Lender’s option, be made by joint check payable to Borrower and the payee
on such Approved Capital Expenses.



     3.5 Rollover Reserves.


          3.5.1 General Rollover.


          (a) On the date hereof, Borrower shall deposit with Lender $400,000 (the “Initial
Rollover Deposit”) to pay for Approved Leasing Expenses with respect to new Leases entered
into after the date hereof in accordance with Section 5.10 and demising space at the Property which
is currently unleased (the “Remaining Space”) and Lender shall cause such amount to
be transferred to a Subaccount (the “Rollover Reserve Subaccount”). Additionally,
unless ninety percent (90%) of the Property is demised pursuant to a Major Lease, to the extent
that, after the date hereof, the Remaining Space is demised pursuant to Non-Major Leases entered
into in accordance with Section 5.10, Borrower shall pay to Lender on each Payment Date an amount
equal to one twelfth (l/12th) of the product obtained by multiplying $1.25
by the aggregate number of rentable square feet of Remaining Space which has been so Leased (the
“Ongoing Rollover Deposit”). Lender will transfer such amount into the Rollover
Reserve Subaccount. Borrower shall also pay to Lender for transfer into the Rollover Reserve
Subaccount all Lease Termination Payments
received by Borrower with respect to Non-Major Tenants. If Lender determines in its reasonable
judgment that the funds in the Rollover Reserve



24









 








Subaccount will be insufficient to pay (or in excess of) the amounts due or to become due for
Approved Leasing Expenses, Lender may increase (or decrease) the monthly contribution required to
be made by Borrower to the Rollover Reserve Subaccount to the extent necessary to rectify such
insufficiency.



          (b) Provided that no Event of Default has occurred and is continuing, Lender shall disburse
funds held in the Rollover Reserve Subaccount to Borrower, within fifteen (15) days after the
delivery by Borrower to Lender of a request therefor (but not more often than once per month), in
increments of at least $5,000, provided (i) such disbursement is for an Approved Leasing Expense;
(ii) Lender shall have (if it desires) verified (by an inspection conducted at Borrower’s expense
if the requested disbursement is in excess of $25,000) performance of any construction work
associated with such Approved Leasing Expense; and (iii) the request for disbursement is
accompanied by (A) an Officer’s Certificate certifying (1) that such funds will be used only to pay
(or reimburse Borrower for) Approved Leasing Expenses and a description thereof, (2) that all
outstanding trade payables (other than those to be paid from the requested disbursement or those
constituting Permitted Indebtedness) have been paid in full, (3) that the same has not been the
subject of a previous disbursement, and (4) that all previous disbursements have been used only to
pay (or reimburse Borrower for) the previously identified Approved Leasing Expenses, and (B)
reasonably detailed supporting documentation as to the amount, necessity and purpose therefor. Any
such disbursement of more than $25,000 to pay (rather than reimburse) Approved Leasing Expenses
may, at Lender’s option, be made by joint check payable to Borrower and the payee of such Approved
Leasing Expenses.


          (c) Notwithstanding anything to the contrary contained in this Section 3.5.1, provided
that no Cash Management Period is continuing, and provided that (x) ninety percent (90%) of the
Property is leased under Major Leases or Non-Major Leases having an initial term of no less than
five (5) years, (y) each tenant under a Non-Major Lease entered into in accordance with the Loan
Documents has taken physical occupancy pursuant to such Non-Major Lease and (z) each such tenant
under a Non-Major Lease has provided an estoppel certificate reasonably satisfactory to Lender, or
such other evidence satisfactory to Lender, confirming that (i) there are no rental,
lease, or similar commissions payable with respect to such Non-Major Lease and (ii) any obligations
of Borrower to make or to pay such tenant for any improvements, alterations or work done on the
premises demised under such Non-Major Lease have been duly performed and completed, and the
improvements described in such Non-Major Lease have been constructed in accordance with the plans
and specifications therefor and have been accepted by such tenant; then all Initial
Rollover Deposit funds, if any, remaining on deposit in the Rollover Reserve Subaccount shall be
disbursed to Borrower.


          (d) Any Lease Termination Payments and any other funds deposited into the Rollover Reserve
Subaccount from the Security Deposit Subaccount in accordance with Section 3.8 hereof shall
be applied, at Lender’s election, towards either (a) subject to the rights of Borrower under the
applicable Lease, rent arrearages under such Lease (or to cure any other tenant default under such
Lease), (b) debt service shortfalls that may arise as a result of a termination of such Lease (and
Borrower hereby authorizes Lender to disburse to itself any such amounts without any request
therefor by Borrower) or (c) funding any Approved Leasing Expenses (or Approved Major Lease Leasing
Expenses, if applicable) which are anticipated to occur in connection with the re-tenanting of the space under the
Lease that was the subject of



25









 








such termination (in accordance with the terms and conditions of Section 3.5.1(b)
above or Section 3.5.2(b) below, if applicable).



          3.5.2 Special Rollover Reserve.


          (a) On each Payment Date occurring during the continuance of a Lease Sweep Period (provided no
Cash Management Period is then continuing (other than a Cash Management Period triggered solely as
a result of a Lease Sweep Period)), all Available Cash shall be paid to Lender and Lender will
transfer such amount into a Subaccount (the
“Special Rollover Reserve Subaccount”). Borrower shall
also pay to Lender for transfer into the Special Rollover Reserve Subaccount any Lease Termination
Payments received with respect to any Major Lease.


          (b) Provided that no Event of Default has occurred and is continuing, Lender shall disburse
funds held in the Special Rollover Reserve Subaccount to Borrower, within fifteen (15) days after
the delivery by Borrower to Lender of a request therefor (but not more often than once per month),
in increments of at least $5,000, provided (i) such disbursement is for an Approved Major Lease
Leasing Expense; (ii) Lender shall have (if it desires) verified (by an inspection conducted at
Borrower’s expense if the requested disbursement is in excess of $25,000) performance of any
construction work associated with such Approved Major Lease Leasing Expense; and (iii) the request
for disbursement is accompanied by (A) an Officer’s Certificate certifying (1) that such funds
will be used only to pay (or reimburse Borrower for) Approved Major Lease Leasing Expenses and a
description thereof, (2) that all outstanding trade payables (other than those to be paid from the
requested disbursement or those constituting Permitted Indebtedness) have been paid in full, (3)
that the same has not been the subject of a previous disbursement, and (4) that all previous
disbursements have been used only to pay (or reimburse Borrower for) the previously identified
Approved Major Lease Leasing Expenses, and (B) reasonably detailed supporting documentation as to
the amount, necessity and purpose therefor. Any such disbursement of more than $25,000 to pay
(rather than reimburse) Approved Major Lease Leasing Expenses may, at Lender’s option, be made by
joint check payable to Borrower and the payee of such Approved Major Lease Leasing Expenses.


          (c) Provided no Event of Default is continuing, upon the termination of the subject Lease
Sweep Period, and Lender’s receipt of satisfactory evidence that all Approved Major Lease Leasing
Expenses incurred in connection therewith (and any other expenses in connection with the
re-tenanting of the applicable space) have been paid in full (which evidence may include (i) a
letter or certification from the applicable broker, if any, that all brokerage commissions payable
in connection therewith have been paid or (ii) an estoppel certificate executed by each applicable
tenant which certifies that all contingencies under such Lease to the payment of full rent
(including Borrower’s contribution to the cost of any tenant improvement work) have been
satisfied), any funds (if any) remaining in the Special Rollover Reserve Subaccount that have been
deposited therein as a result of such Lease Sweep Period shall be disbursed to Borrower;
provided, however, if a Cash Management Period is then continuing, then no such funds
shall be
disbursed to Borrower, and all such funds shall instead be deposited into the Cash Collateral
Subaccount, to be applied in accordance with Section 3.9 hereof.



26









 








     3.6 Operating Expense Subaccount. During a Cash Management Period, on each Payment
Date, a portion of the Rents that have been deposited into the Deposit Account during the
immediately preceding Interest Period in an amount equal to the monthly amount set forth in the
Approved Operating Budget for the following month as being necessary for payment of Approved
Operating Expenses at the Property for such month, shall be transferred into a Subaccount for the
payment of Approved Operating Expenses (the “Operating Expense Subaccount”). In
addition, on the March Payment Date of each year after which a Cash Management Period has occurred
(beginning on the March 2006 Payment Date), and provided a Cash Management Period is then still
continuing, Borrower shall deposit with Lender (for deposit into the Operating Expense Subaccount)
those amounts disbursed to Borrower in accordance with this Section 3.6 during the prior calendar
year which have not been used to pay Approved Operating Expenses in order to “true-up” the Approved
Operating Expenses disbursed with the Approved Operating Expenses expended. Provided no Event of
Default has occurred and is continuing, Lender shall disburse funds held in the Operating Expense
Subaccount to Borrower, within five (5) Business Days after delivery by Borrower to Lender of a
request therefor (but not more often than twice per month), in increments of at least $1,000,
provided (i) such disbursement is for an Approved Operating Expense; and (ii) such
disbursement is accompanied by (A) an Officer’s Certificate certifying (1) that such
funds will be used to pay Approved Operating Expenses and a description thereof, (2) that all
outstanding trade payables (other than those to be paid from the requested disbursement or those
constituting Permitted Indebtedness) have been paid in full, (3) that the same has not been the
subject of a previous disbursement, and (4) that all previous disbursements have been or will be
used to pay the previously identified Approved Operating Expenses, and (B) reasonably detailed
documentation reasonably satisfactory to Lender as to the amount, necessity and purpose therefor.



     3.7
Casualty/Condemnation Subaccount. Borrower shall pay, or cause to be paid, to Lender all
Proceeds or Awards due to any Casualty or Condemnation to be transferred to a Subaccount (the
“Casualty/Condemnation Subaccount”) in accordance with the provisions of Article
7 hereof. All amounts in the Casualty/Condemnation Subaccount shall disbursed in accordance
with the provisions of Article 7 hereof.



     3.8 Security Deposits. Borrower shall deliver to Lender all security deposits (and any
interest theretofore earned thereon) under Leases, and, if requested by Lender, Borrower shall also
deliver any letters of credit (delivered in lieu of a cash security deposit), assigned with full
power of attorney and executed sight drafts to Lender. Lender will transfer such security deposits
into a Subaccount (the “Security Deposit Subaccount”), which will be held subject to
the terms of the Leases. Borrower shall also deliver to Lender (for deposit into the Security
Deposit Subaccount) all amounts drawn under any letters of credit and not utilized to cure a
default held by Borrower in lieu of cash security deposits. Security deposits held in the Security
Deposit Subaccount will be released by Lender upon notice from Borrower together with such evidence
as Lender may reasonably request that such security deposit is required to be returned to a tenant
pursuant to the terms of a Lease. Any funds in the Security Deposit Subaccount which Borrower is
permitted to retain pursuant to the applicable provisions of any Lease shall
be transferred by Lender into the Rollover Reserve Subaccount, to be applied and disbursed in
accordance with the provisions of Section 3.5 hereof. Any letter of credit or other
instrument that Borrower receives in lieu of a cash security deposit under any Lease entered into
after the date hereof shall (i) be maintained in full force and effect in the full
amount unless replaced by a



27









 





cash deposit as hereinabove described and (ii) if permitted pursuant to any Legal
Requirements or the terms of the letter of credit, name Lender as payee or mortgagee thereunder (or
at Lender’s option, be fully assignable to Lender).




     3.9 Cash Collateral Subaccount. If a Cash Management Period shall have commenced
(other than a Cash Management Period triggered solely as a result of a Lease Sweep Period), then on
the immediately succeeding Payment Date and on each Payment Date thereafter during the continuance
of such Cash Management Period, all Available Cash shall be paid to Lender, which amounts shall be
transferred by Lender into a Subaccount (the “Cash Collateral Subaccount”) as cash
collateral for the Debt. Notwithstanding the foregoing, if a Lease Sweep Period has occurred and is
then continuing during the continuance of any Cash Management Period (other than a Cash Management
Period triggered solely as a result of a Lease Sweep Period), Lender shall have the right (but not
the obligation) to allocate any funds in the Cash Collateral Subaccount to the Special Rollover
Reserve Subaccount to be applied in accordance with the terms and conditions of Section
3.5.2 hereof. Any funds in the Cash Collateral Account and not previously disbursed or applied
shall be disbursed to Borrower upon the termination of such Cash Management Period. Lender shall
have the right, but not the obligation, at any time during the continuance of an Event of Default,
in its sole and absolute discretion to apply all sums then on deposit in the Cash Collateral
Subaccount to the Debt, in such order and in such manner as Lender shall elect in its sole and
absolute discretion, including to make a prepayment of Principal (together with the Yield
Maintenance Premium applicable thereto). Additionally, Lender shall have the right, but not the
obligation, at any time subsequent to the fourth Calculation Date following the commencement of a
DSCR Cash Management Period (whether or not an Event of Default is then continuing), in its sole
and absolute discretion to apply all sums then on deposit in the Cash Collateral Subaccount towards
a partial Defeasance of the Loan (together with any Defeasance costs associated therewith), and
Borrower shall execute such documents and take such other actions necessary to satisfy the
Defeasance requirements set forth in Section 2.3.3 hereof.



     3.10 Grant of Security Interest; Application of Funds. As security for payment of the
Debt and the performance by Borrower of all other terms, conditions and provisions of the Loan
Documents, Borrower hereby pledges and assigns to Lender, and grants to Lender a security interest
in, all Borrower’s right, title and interest in and to all Rents and in and to all payments to or
monies held in the Clearing Account, the Deposit Account, all Subaccounts created pursuant to this
Agreement (collectively, the “Cash Management Accounts”). Borrower hereby grants to
Lender a continuing security interest in, and agrees to hold in trust for the benefit of Lender,
all Rents in its possession prior to the (i) payment of such Rents to Lender or (ii) deposit of
such Rents into the Deposit Account. Borrower shall not, without obtaining the prior written
consent of Lender, further pledge, assign or grant any security interest in any Cash Management
Account, or permit any Lien to attach thereto, or any levy to be made thereon, or any UCC Financing
Statements, except those naming Lender as the secured party, to be filed with respect thereto. This
Agreement is, among other things, intended by the parties to be a security agreement for purposes
of the UCC. Upon the occurrence and during the continuance of an Event of Default, Lender may apply
any sums in any Cash Management Account in any order and in any manner as Lender shall elect in
Lender’s discretion without seeking the appointment of a receiver and without adversely
affecting the rights of Lender to foreclose the Lien of the Mortgage or exercise its other
rights under the Loan Documents. Cash Management Accounts



28









 





shall not constitute trust funds and may be commingled with other monies held by Lender.
All interest which accrues on the funds in any Cash Management Account (other than the Tax and
Insurance Subaccount) shall accrue for the benefit of Borrower and shall be taxable to Borrower and
shall be added to and disbursed in the same manner and under the same conditions as the principal
sum on which said interest accrued. Upon repayment in full of the Debt, all remaining funds in the
Subaccounts, if any, shall be promptly disbursed to Borrower.




     3.11 Property Cash Flow Allocation.


          (a) During any Cash Management Period, all Rents deposited into the Deposit Account
during the immediately preceding Interest Period shall be applied on each Payment Date as follows
in the following order of priority:




               (i) First, to make payments into the Tax and Insurance Subaccount as
required under Section 3.3 hereof;




               (ii) Second, to pay the monthly portion of the fees charged by the Deposit Bank in
accordance with the Deposit Account Agreement;




               (iii) Third, to make payments for Utility Expenses as required under Section
3.6 hereof;




               (iv) Fourth, to Lender to pay the Monthly Debt Service Payment Amount or the Monthly
Interest Payment Amount, as the case may be, due on such Payment Date (plus, if applicable,
interest at the Default Rate and all other amounts, other than those described under other
clauses of this Section 3.11(a), then due to Lender under the Loan Documents);




               (v) Fifth, to make payments for Approved Operating Expenses (other than Utility
Expenses) as required under Section 3.6 hereof;




               (vi) Sixth, to make payments into the Capital Reserve Subaccount as required under
Section 3.4 hereof;




               (vii) Seventh, to make Ongoing Rollover Deposit payments (if any) into the Rollover
Reserve Subaccount as required under Section 3.5.1 hereof; and




               (viii) Lastly, (A) during the continuance of a Cash Management Period triggered solely
a result of a Lease Sweep Period, to make payments in an amount equal to all Available Cash
on such Payment Date into the Special Rollover Reserve Subaccount in accordance with
Section 3.5.2 hereof; or (B) to make payments in an amount equal to all Available
Cash on such Payment Date into the Cash Collateral Subaccount in accordance with
Section 3.9 hereof.


          (b) The failure of Borrower to make all of the payments required under clauses (i) through
(viii) of Section 3.11(a) above in full on each Payment Date shall constitute an Event of
Default under this Agreement; provided, however, if adequate funds are available in



29









 








the Deposit Account for such payments, the failure by the Deposit Bank to allocate such funds
into the appropriate Subaccounts shall not constitute an Event of Default.



          (c) Notwithstanding anything to the contrary contained in this Section 3.11, after the
occurrence of an Event of Default, Lender may apply all Rents deposited into the
Deposit Account and other proceeds of repayment in such order and in such manner as Lender shall
elect.


4. REPRESENTATIONS AND WARRANTIES



Borrower represents and warrants to Lender as of the date hereof that, except to the extent (if
any) disclosed on Schedule 2 hereto with reference to a specific Section of this
Article 4:




     4.1 Organization; Special Purpose. Borrower has been duly organized and is validly
existing and in good standing under the laws of the state of its formation, with requisite power
and authority, and all rights, licenses, permits and authorizations, governmental or otherwise,
necessary to own its properties and to transact the business in which it is now engaged. Borrower
is duly qualified to do business and is in good standing in each jurisdiction where it is required
to be so qualified in connection with its properties, business and operations. Borrower is a
Special Purpose Bankruptcy Remote Entity.



     4.2 Proceedings; Enforceability. Borrower has taken all necessary action to authorize
the execution, delivery and performance of the Loan Documents. The Loan Documents have been duly
executed and delivered by Borrower and constitute legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective terms, subject to applicable
bankruptcy, insolvency and similar laws affecting rights of creditors generally, and general
principles of equity. The Loan Documents are not subject to, and Borrower has not asserted, any
right of rescission, set-off, counterclaim or defense, including the defense of usury. No exercise
of any of the terms of the Loan Documents, or any right thereunder, will render any Loan Document
unenforceable.



     4.3 No Conflicts. The execution, delivery and performance of the Loan Documents by
Borrower and the transactions contemplated hereby will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, or result in the creation or
imposition of any Lien (other than pursuant to the Loan Documents) upon any of the property of
Borrower pursuant to the terms of, any agreement or instrument to which Borrower is a party or by
which its property is subject, nor will such action result in any violation of the provisions of
any statute or any order, rule or regulation of any Governmental Authority having jurisdiction over
Borrower or any of its properties. Borrower’s rights under the Licenses and the Management
Agreement will not be adversely affected by the execution and delivery of the Loan Documents,
Borrower’s performance thereunder, the recordation of the Mortgage, or the exercise of any remedies
by Lender (but Lender may not be able to realize upon the
licenses). Any consent, approval, authorization, order, registration or qualification of or
with any Governmental Authority required for the execution, delivery and performance by Borrower of
the Loan Documents has been obtained and is in full force and effect.



30









 





     4.4 Litigation. There are no actions, suits or other proceedings at law or
in equity by or before any Governmental Authority now pending or, to the best of Borrower’s
knowledge, threatened against or affecting Borrower, the Manager or the Property, which, if
adversely determined, might materially adversely affect the condition (financial or otherwise) or
business of Borrower (including the ability of Borrower to carry out its obligations under the Loan
Documents), Manager or the use, value, condition or ownership of the Property.



     4.5 Agreements. Borrower is not a party to any agreement or instrument or
subject to any restriction (other than Permitted Encumbrances) which might adversely affect
Borrower or the Property, or Borrower’s business, properties, operations or condition, financial or
otherwise, in any material respect. Borrower is not in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or conditions contained
in any Permitted Encumbrance or any other agreement or instrument to which it is a party or by
which it or, to the best of Borrower’s knowledge, the Property is bound.



     4.6 Title. Borrower has good, marketable and indefeasible title in fee to
the real property and good title to the balance of the Property, free and clear of all Liens except
the Permitted Encumbrances. All transfer taxes, deed stamps, intangible taxes or other amounts in
the nature of transfer taxes required to be paid by any Person under applicable Legal Requirements
in connection with the transfer of the Property to Borrower have been paid. The Mortgage when
properly recorded in the appropriate records, together with any UCC Financing Statements required
to be filed in connection therewith, will create (i) a valid, perfected first priority lien on the
Borrower’s interest in the Property and (ii) valid and perfected first priority security interests
in and to, and perfected collateral assignments of, all personalty (including the Leases), all in
accordance with the terms thereof, in each case subject only to any applicable Permitted
Encumbrances. All mortgage, recording, stamp, intangible or other similar taxes required to be paid
by any Person under applicable Legal Requirements in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan Documents have been
paid. The Permitted Encumbrances do not materially adversely affect the value, operation or use of
the Property, or Borrower’s ability to repay the Loan. No Condemnation or other proceeding has been
commenced or, to Borrower’s best knowledge, is contemplated with respect to all or part of the
Property or for the relocation of roadways providing access to the Property. There are no claims
for payment for work, labor or materials affecting the Property which are or may become a Lien
prior to, or of equal priority with, the Liens created by the Loan Documents. There are no
outstanding options to purchase or rights of first refusal affecting all or any portion of the
Property. To the best of Borrower’s knowledge, the survey for the Property delivered to Lender does
not fail to reflect any material matter affecting the Property or the title thereto that may be
shown on or depicted on a survey. To the best of Borrower’s knowledge, all of the Improvements
included in determining the appraised value of the Property lie wholly within the boundaries and
building restriction lines of the Property, and no improvement on an adjoining property encroaches
upon the Property, and no easement or other encumbrance upon the Property encroaches upon any of
the
Improvements, except those insured against by the Title Insurance Policy. To the best of
Borrower’s knowledge, each parcel comprising the Property is a separate tax lot and is not a
portion of any other tax lot that is not a part of the Property. To the best of Borrower’s
knowledge, there are no pending or proposed special or other assessments for public improvements or
otherwise affecting the Property, or any contemplated improvements to the Property that may result
in such special




31











 




or other assessments. With respect to the Title Insurance Policy, (i) the Title Insurance
Policy is in full force and effect, and (ii) the premium with respect thereto has been paid in full
(or will be paid in full with a portion of the proceeds of the Loan).




     4.7 No Bankruptcy Filing. Borrower is not contemplating either the filing of a
petition by it under any state or federal bankruptcy or insolvency law or the liquidation of all or
a major portion of its property (a “Bankruptcy Proceeding”), and Borrower has no
knowledge of any Person contemplating the filing of any such petition against it. In addition, none
of Borrower, any Guarantor or any Person Controlling any of the foregoing has been a party to, or
the subject of a Bankruptcy Proceeding for the past ten (10) years.



     4.8 Full and Accurate Disclosure. To the best of Borrower’s knowledge, no
statement of fact made by Borrower in any Loan Documents contains any untrue statement of a
material fact or omits to state any material fact necessary to make statements contained therein
not misleading. To the best of Borrower’s knowledge, there is no material fact presently known to
Borrower that has not been disclosed to Lender which adversely affects, or, as far as Borrower can
foresee, might adversely affect, the Property or the business, operations or condition (financial
or otherwise) of Borrower. All financial data, including the statements of cash flow and income and
operating expense, that have been delivered to Lender in respect of Borrower and the Property (i)
are true, complete and correct in all material respects, (ii) accurately represent the financial
condition of Borrower and the Property as of the date of such reports, and (iii) to the extent
prepared by an independent certified public accounting firm, have been prepared in accordance with
GAAP consistently applied throughout the periods covered, except as disclosed therein. Borrower has
no contingent liabilities, liabilities for taxes, unusual forward or long-term commitments,
unrealized or anticipated losses from any unfavorable commitments or any liabilities or obligations
not expressly permitted by this Agreement. Since the date of such financial statements, there has
been no materially adverse change in the financial condition, operations or business of Borrower or
the Property from that set forth in said financial statements.



     4.9 Tax Filings. To the extent required, Borrower has filed (or has obtained effective
extensions for filing) all federal, state and local tax returns required to be filed and have paid
or made adequate provision for the payment of all federal, state and local taxes, charges and
assessments payable by Borrower. Borrower believes that its tax returns (if any) properly reflect
the income and taxes of Borrower for the periods covered thereby, subject only to reasonable
adjustments required by the Internal Revenue Service or other applicable tax authority upon audit.



     4.10 ERISA; No Plan Assets. As of the date hereof and throughout the Term (i)
Borrower is not and will not be an “employee benefit plan,” as defined in Section 3(3) of ERISA,
(ii) none of the assets of Borrower constitutes or will constitute “plan assets” of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101, (iii) Borrower is not and will not
be a “governmental plan” within the meaning of Section 3(32) of ERISA, and (iv) transactions by or
with Borrower are not and will not be subject to state statutes regulating investment of, and
fiduciary obligations with respect to, governmental plans. As of the date hereof, neither Borrower,
nor any member of a “controlled group of corporations” (within the meaning of Section 414 of the
Code) maintains, sponsors or contributes to a “defined benefit



32









 




plan” (within the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan” (within
the meaning of Section 3(37)(A) of ERISA).




     4.11 Compliance. To the best knowledge of Borrower, Borrower and the Property and the
use thereof comply in all material respects with all applicable Legal Requirements (including with
respect to parking and applicable zoning and land use laws, regulations and ordinances). Borrower
is not in default or violation of any order, writ, injunction, decree or demand of any Governmental
Authority, the violation of which might materially adversely affect the condition (financial or
otherwise) or business of Borrower. The Property is used exclusively used for: office, medical,
educational, institutional and other appurtenant and related uses. In the event that all or any
part of the Improvements are destroyed or damaged, to the best knowledge of Borrower, said
Improvements can be legally reconstructed to their condition prior to such damage or destruction,
and thereafter exist for the same use without violating any zoning or other ordinances applicable
thereto and without the necessity of obtaining any variances or special permits. No legal
proceedings are pending or, to the knowledge of Borrower, threatened with respect to the zoning of
the Property. Neither the zoning nor any other right to construct, use or operate the Property is
in any way dependent upon or related to any property other than the Property. All certifications,
permits, licenses and approvals, including certificates of completion and occupancy permits
required for the legal use, occupancy and operation of the Property (collectively, the “Licenses”),
have been obtained and are in full force and effect. The use being made of the Property is in
conformity with the certificate of occupancy issued for the Property and all other restrictions,
covenants and conditions affecting the Property.



     4.12 Contracts. There are no service, maintenance or repair contracts affecting the
Property that are not terminable on one (1) month’s notice or less without cause and without
penalty or premium. All service, maintenance or repair contracts affecting the Property have been
entered into at arms-length in the ordinary course of Borrower’s business and provide for the
payment of fees in amounts and upon terms comparable to existing market rates.



     4.13 Federal Reserve Regulations; Investment Company Act. No part of the proceeds of
the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other
purpose that would be inconsistent with such Regulation U or any other regulation of such Board of
Governors, or for any purpose prohibited by Legal Requirements or any Loan Document. Borrower is
not (i) an “investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as amended; (ii) a “holding company” or a
“subsidiary company” of a “holding company” or an “affiliate” of either a “holding company”
or a “subsidiary company” within the meaning of the Public Utility Holding Company Act
of 1935, as amended; or (iii) subject to any other federal or state law or regulation which
purports to restrict or regulate its ability to borrow money.



     4.14 Easements; Utilities and Public Access. All easements, cross easements, licenses,
air rights and rights-of-way or other similar property interests (collectively, “Easements”), if
any, necessary (in the reasonable judgment of Borrower) for the full utilization of the
Improvements for their intended purposes have been obtained, are described in the Title Insurance
Policy and are in full force and effect without default thereunder. The Property has rights of
access to public ways and is served by water, sewer, sanitary sewer and storm drain



33









 




facilities adequate to service it for its intended uses. All public utilities necessary or
convenient to the full use and enjoyment of the Property are located in the public right-of-way
abutting the Property, and all such utilities are connected so as to serve the Property without
passing over other property absent a valid easement. All roads necessary for the use of the
Property for its current purpose have been completed and dedicated to public use and accepted by
all Governmental Authorities.




     4.15 Physical Condition. To the best of Borrower’s knowledge, the Property, including
all Improvements, parking facilities, systems, Equipment and landscaping, are in good condition,
order and repair in all material respects; and there exists no structural or other material defect
or damages to the Property. Borrower has not received notice from any insurance company or bonding
company of any defect or inadequacy in the Property, or any part thereof, which would adversely
affect its insurability or cause the imposition of extraordinary premiums or charges thereon or any
termination of any policy of insurance or bond. No portion of the Property is located in an area as
identified by the Federal Emergency Management Agency as an area having special flood hazards. The
Improvements have suffered no material casualty or damage which has not been fully repaired and the
cost thereof fully paid.



     4.16 Leases. To the best of Borrower’s knowledge, the rent roll attached hereto as
Schedule 3 (the “Rent Roll”) is true, complete and correct and the Property is not subject
to any Leases other than the Leases described in the Rent Roll. To the best of Borrower’s
knowledge, except as set forth on the Rent Roll: (i) each Lease is in full force and effect;
(ii) the tenants under the Leases have accepted possession of and are in occupancy of
all of their respective demised premises, have commenced the payment of rent under the Leases, and
there are no offsets, claims or defenses to the enforcement thereof; (iii) all rents due and
payable under the Leases have been paid and no portion thereof has been paid for any period more
than thirty (30) days in advance; (iv) the rent payable under each Lease is the amount of fixed
rent set forth in the Rent Roll, and, to the best of Borrower’s knowledge, there is no claim or
basis for a claim by the tenant thereunder for an adjustment to the rent; (v) no tenant has made
any claim against the landlord under any Lease which remains outstanding, and based on the tenant
estoppels delivered to Lender in connection with the Loan, there are no defaults on the part of the
landlord under any Lease, and, to the best of Borrower’s knowledge, no event has occurred which,
with the giving of notice or passage of time, or both, would constitute such a default; (vi) to
Borrower’s best knowledge, there is no present material default by the tenant under any Lease;
(vii) all security deposits under Leases are as set forth on the Rent Roll and are held consistent
with Section 3.8 hereof; (viii) Borrower is the sole owner of the entire lessor’s interest
in each Lease; (ix) each Lease is the valid, binding and enforceable obligation of the
Borrower and the applicable tenant thereunder; (x) no Person has any possessory interest in, or
right to occupy, the Property except under the terms of the Lease; and (xi) each Lease is
subordinate to the Loan Documents, either pursuant to its terms or pursuant to a subordination and
attornment agreement. None of the Leases contains any option to purchase or right of first refusal
to purchase the Property or any part thereof. Neither the Leases nor the Rents have been assigned
or pledged except to Lender, and no other Person has any interest therein except the tenants
thereunder.



     4.17 Fraudulent Transfer. Borrower has not entered into the Loan or any Loan Document
with the actual intent to hinder, delay, or defraud any creditor, and Borrower has received
reasonably equivalent value in exchange for its obligations under the Loan Documents.



34









 




Giving effect to the transactions contemplated by the Loan Documents, the fair saleable value
of Borrower’s assets exceeds and will, immediately following the execution and delivery of the Loan
Documents, exceed Borrower’s total probable liabilities, including subordinated, unliquidated,
disputed or contingent liabilities, including the maximum amount of its contingent liabilities or
its debts as such debts become absolute and matured. Borrower’s assets do not and, immediately
following the execution and delivery of the Loan Documents will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur debts and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts to be payable on or in respect of obligations of Borrower).




     4.18 Ownership of Borrower. The sole members of Borrower are Brickman Real Estate Fund
II REIT, Inc. and River Rock Holdings, LLC. The membership interests in Borrower are owned free and
clear of all Liens, warrants, options and rights to purchase. Borrower has no obligation to any
Person to purchase, repurchase or issue any ownership interest in it. The organizational chart
attached hereto as Schedule 4 is complete and accurate and illustrates all Persons who have
a direct or indirect Controlling interest or ownership interest equal to or greater than twenty
percent (20%) in Borrower.



     4.19 Purchase Options. Neither the Property nor any part thereof is subject to any
purchase options or other similar rights in favor of third parties.



     4.20 Management Agreement. The Management Agreement is in full force and effect. There
is no default, breach or violation existing thereunder, and no event has occurred (other than
payments due but not yet delinquent) that, with the passage of time or the giving of notice, or
both, would constitute a default, breach or violation thereunder, by either party thereto.



     4.21 Hazardous Substances. To the best of Borrower’s knowledge, except as set forth in
the Environmental Report, (i) The Property is not in violation of any Legal Requirement
pertaining to or imposing liability or standards of conduct concerning environmental regulation,
contamination or clean-up, including the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act, the Emergency Planning and Community
Right-to-Know Act of 1986, the Hazardous Substances Transportation Act, the Solid Waste
Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic Substance Control Act, the Safe
Drinking Water Act, the Occupational Safety and Health Act, any state super-lien and environmental
clean-up statutes (including with respect to Toxic Mold), any local law requiring related permits
and licenses and all amendments to and regulations in respect of the foregoing laws (collectively,
“Environmental Laws”); (ii) the Property is not subject to any private or governmental Lien or
judicial or administrative notice or action or inquiry, investigation or claim relating to
hazardous, toxic and/or dangerous substances, toxic mold or fungus of a type that may pose a risk
to human health or the environment or would negatively impact the value of the Property (“Toxic
Mold”) or any other substances or materials which are included under or regulated by Environmental
Laws (collectively, “Hazardous Substances”; provided, however, that Hazardous
Substances shall not include de minimis quantities of such substances commonly used in the ordinary
course of business of, or day-to-day operation and maintenance of the Property by, Borrower,
Manager or any tenant at the Property); (iii) after due



35









 




inquiry, no Hazardous Substances are or have been (including the period prior to
Borrower’s acquisition of the Property), discharged, generated, treated, disposed of or stored on,
incorporated in, or removed or transported from the Property other than in compliance with all
Environmental Laws; (iv) no Hazardous Substances in violation of Environmental Laws are present in,
on or under any nearby real property which could migrate to or otherwise affect the Property; (v)
after due inquiry, no Toxic Mold is on or about the Property which requires remediation; (vi) no
underground storage tanks exist on the Property and the Property has never been used as a landfill;
and (vii) there have been no environmental investigations, studies, audits, reviews or other
analyses conducted by or on behalf of Borrower which have not been provided to Lender.




     4.22 Name; Principal Place of Business. Borrower does not use and will not use any
trade name and has not done and will not do business under any name other than its actual name set
forth herein. The principal place of business of Borrower is its primary address for notices as set
forth in Section 6.1 hereof, and Borrower has no other place of business.



     4.23 Other Debt. There is no indebtedness of Borrower or any holder of any direct or
indirect interest in Borrower with respect to the Property or any excess cash flow or any residual
interest therein, whether secured or unsecured, other than Permitted Encumbrances and Permitted
Indebtedness.



     4.24 Post-Purchase Obligations. The Brickman Fund shall be solely responsible for the
payment of all Post-Closing Payments which are or may become payable under the Purchase and Sale
Agreement and Borrower is not, and shall not be, liable or responsible in any respect for any such
Post-Closing Payments.


All of the representations and warranties in this Article 4 and elsewhere in the Loan
Documents (i) shall survive for so long as any portion of the Debt remains owing to Lender and (ii)
shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or
hereafter made by Lender or on its behalf, provided, however, that the representations, warranties
and covenants set forth in Section 4.21 above shall survive in perpetuity.




5. COVENANTS



Until the end of the Term, Borrower hereby covenants and agrees with Lender that:




     5.1 Existence. Borrower shall (i) do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence and rights, (ii) continue to engage
in the business presently conducted by it, (iii) obtain and maintain all Licenses, and (iv) qualify
to do business and remain in good standing under the laws of each jurisdiction, in each case as and
to the extent required for the ownership, maintenance, management and operation of the Property.



     5.2 Taxes and Other Charges. Borrower shall pay all Taxes and Other Charges as the
same become due and payable, and deliver to Lender receipts for payment or other evidence
satisfactory to Lender that the Taxes and Other Charges have been so paid no later than thirty (30)
days before they would be delinquent if not paid (provided, however, that Borrower need not pay
such Taxes nor furnish such receipts for payment of Taxes paid by Lender pursuant to



36









 




Section 3.3 hereof). Borrower shall not suffer and shall promptly cause to be
paid and discharged any Lien against the Property (except to the extent that (and only for so long
as) such Lien is a Permitted Encumbrance), and shall promptly pay for all utility services provided
to the Property. After prior notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application of any Taxes or Other Charges, provided that (i)
no Event of Default has occurred and is continuing, (ii) such proceeding shall suspend the
collection of the Taxes or such Other Charges, (iii) such proceeding shall be permitted under and
be conducted in accordance with the provisions of any other instrument to which Borrower is subject
and shall not constitute a default thereunder, (iv) no part of or interest in the Property will be
in danger of being sold, forfeited, terminated, canceled or lost, (v) Borrower shall have furnished
such security as may be required in the proceeding, or as may be requested by Lender, to insure the
payment of any such Taxes or Other Charges, together with all interest and penalties thereon, which
shall not be less than 125% of the Taxes and Other Charges being contested, and (vi) Borrower shall
promptly upon final determination thereof pay the amount of such Taxes or Other Charges, together
with all costs, interest and penalties. Lender may pay over any such security or part thereof held
by Lender to the claimant entitled thereto at any time when, in the reasonable judgment of Lender,
the entitlement of such claimant is established.




     5.3 Access to Property. Borrower shall permit agents, representatives, consultants and
employees of Lender to inspect the Property or any part thereof at reasonable hours upon reasonable
advance notice, subject to the rights of the tenants, as tenants, under the Leases.



     5.4 Repairs; Maintenance and Compliance; Alterations.



          5.4.1 Repairs; Maintenance and Compliance. Borrower shall cause the Property to be
maintained in a good and safe condition and repair and shall not remove, demolish or alter the
Improvements or Equipment (except for alterations performed in accordance with Section
5.4.2 below and normal replacement of Equipment with Equipment of equivalent value and
functionality). Borrower shall promptly comply with all Legal Requirements in all material respects
and immediately cure properly any violation of a material Legal Requirement. Borrower shall notify
Lender in writing within one (1) Business Day after Borrower first receives notice of any such
non-compliance. Borrower shall promptly repair, replace or rebuild any part of the Property that
becomes damaged, worn or dilapidated and shall complete and pay for any Improvements at any time in
the process of construction or repair.




          5.4.2 Alterations. Borrower may, without Lender’s consent, perform alterations to the
Improvements and Equipment which (i) do not constitute a Material Alteration, (ii) do
not adversely affect Borrower’s financial condition or the value or Net Operating Income of the
Property and (iii) are in the ordinary course of Borrower’s business. Borrower shall not perform
any Material Alteration without Lender’s prior written consent, which consent shall not be
unreasonably withheld or delayed; provided, however, that Lender may, in its sole and absolute
discretion, withhold consent to any alteration the cost of which is reasonably estimated to exceed
$1,000,000 or which is likely to result in a decrease of Net Operating Income by two and one-half
percent (2.5%) or more for a period of thirty (30) days or longer. Lender may, as a condition to
giving its consent to a Material Alteration, require that Borrower deliver to Lender security for
payment of the cost of such Material Alteration in an amount equal to 125% of the







37









 







cost of the Material Alteration as estimated by Lender. Upon substantial completion of the
Material Alteration, Borrower shall provide evidence satisfactory to Lender that (i) the
Material Alteration was constructed in accordance with applicable Legal Requirements and
substantially in accordance with plans and specifications approved by Lender (which approval shall
not be unreasonably withheld or delayed), (ii) all contractors, subcontractors, materialmen and
professionals who provided work, materials or services in connection with the Material Alteration
have been paid in full and have delivered unconditional releases of lien and (iii) all material
Licenses necessary for the use, operation and occupancy of the Material Alteration (other than
those which depend on the performance of tenant improvement work) have been issued. Borrower shall
reimburse Lender upon demand for all out-of-pocket costs and expenses (including the reasonable
fees of any architect, engineer or other professional engaged by Lender) reasonably incurred by
Lender in reviewing plans and specifications or in making any determinations necessary to implement
the provisions of this Section 5.4.2.




     5.5 Performance of Other Agreements. Borrower shall observe and perform each and every
material term to be observed or performed by it pursuant to the terms of any agreement or
instrument affecting or pertaining to the Property, including the Loan Documents.



     5.6 Cooperate in Legal Proceedings. Borrower shall cooperate fully with Lender with
respect to, and permit Lender, at its option, to participate in, any proceedings before any
Governmental Authority which may in any way affect the rights of Lender under any Loan Document.



     5.7 Further Assurances. Borrower shall, at Borrower’s sole cost and expense, (i)
execute and deliver to Lender such documents, instruments, certificates, assignments and other
writings, and do such other acts necessary or desirable, to evidence, preserve and/or protect the
collateral at any time securing or intended to secure the Debt and/or for the better and more
effective carrying out of the intents and purposes of the Loan Documents, as Lender may reasonably
require from time to time; and (ii) upon Lender’s request therefor given from time to time after
the occurrence of any Default or Event of Default pay for (a) reports of UCC, federal tax lien,
state tax lien, judgment and pending litigation searches with respect to Borrower and (b)
searches of title to the Property, each such search to be conducted by search firms reasonably
designated by Lender in each of the locations reasonably designated by Lender.



     5.8 Environmental Matters.



          5.8.1 Hazardous Substances. So long as Borrower owns or is in possession of the
Property, Borrower shall (i) keep the Property (or cause the Property to be kept) free from
Hazardous Substances and in compliance with all Environmental Laws, (ii) promptly notify Lender if
Borrower shall become aware that (A) any Hazardous Substance is on or adjacent to the Property, (B)
the Property is in violation of any Environmental Laws or (C) any condition on or near the Property
shall pose a threat to the health, safety or welfare of humans and (iii) remove such Hazardous
Substances and/or cure such violations and/or remove such threats, as applicable, as required by
law, promptly after Borrower becomes aware of same, at Borrower’s sole expense. Nothing herein
shall prevent Borrower from recovering such expenses from any other party that may be liable for
such removal or cure.







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          5.8.2 Environmental Monitoring.




          (a) Borrower shall give prompt written notice to Lender of (i) any proceeding or inquiry
in writing by any party (including any Governmental Authority) with respect to the presence of any
Hazardous Substance on, under or from the Property, (ii) all claims made or threatened in writing
by any third party (including any Governmental Authority) against Borrower or the Property or any
party occupying the Property of which Borrower has knowledge relating to any loss or injury
resulting from any Hazardous Substance, and (iii) Borrower’s discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the Property that is reasonably
likely to cause the Property to be subject to any investigation or cleanup pursuant to any
Environmental Law. Upon becoming aware of the presence of mold or fungus on or within the
Improvements, Borrower shall (i) undertake an investigation to identify the source(s)
of such mold or fungus and shall develop and implement an appropriate remediation plan to eliminate
the presence of any Toxic Mold, (ii) perform or cause to be performed all acts reasonably necessary
for the remediation of any Toxic Mold (including taking any action necessary to clean and disinfect
any portions of the Property affected by Toxic Mold, including providing any necessary moisture
control systems at the Property), and (iii) provide evidence reasonably satisfactory to Lender of
the foregoing. Borrower shall permit Lender to join and participate in, as a party if it so elects,
any legal or administrative proceedings or other actions initiated with respect to the Property in
connection with any Environmental Law or Hazardous Substance, and Borrower shall pay all reasonable
attorneys’ fees and disbursements incurred by Lender in connection therewith.




          (b) Upon Lender’s request, at any time and from time to time (which request shall not be made
by Lender more frequently than once in any twelve (12) month period unless (i) such
request is made in connection with a Secondary Market Transaction, (ii) in Lender’s good faith
judgment there is a compelling reason to make such request or (iii) an Event of Default is
continuing), Borrower shall provide an inspection or audit of the Property prepared by a licensed
hydrogeologist, licensed environmental engineer or qualified environmental consulting firm approved
by Lender assessing the presence or absence of Hazardous Substances on, in or near the Property,
and if Lender in its good faith judgment determines that reasonable cause exists for the
performance of such environmental inspection or audit, then the cost and expense of such audit or
inspection shall be paid by Borrower. Such inspections and audit may include soil borings and
ground water monitoring. If Borrower fails to provide any such inspection or audit within thirty
(30) days after such request, Lender may order same, and Borrower hereby grants to Lender and its
employees and agents access to the Property and a license to undertake such inspection or audit,
subject to the rights of tenants as tenants under the Leases.




          (c) If any environmental site assessment report prepared in connection with such inspection or
audit recommends that an operations and maintenance plan be implemented for any Hazardous
Substance, whether such Hazardous Substance existed prior to the ownership of the Property by
Borrower, or presently exists or is reasonably suspected of existing, Borrower shall cause such
operations and maintenance plan to be prepared and implemented at its expense upon request of
Lender, and with respect to any Toxic Mold, Borrower shall take all action necessary to clean and
disinfect any portions of the Improvements affected by Toxic Mold in or about the Improvements,
including providing any necessary moisture control systems at the




39









 







Property. If any investigation, site monitoring, containment, cleanup, removal,
restoration or other work of any kind is reasonably necessary under an applicable Environmental Law
(“Remedial Work”), Borrower shall commence all such Remedial Work within thirty (30)
days after written demand by Lender and thereafter diligently prosecute to completion all such
Remedial Work within such period of time as may be required under applicable law. All Remedial Work
shall be performed by licensed contractors approved in advance by Lender and under the supervision
of a consulting engineer approved by Lender. All costs of such Remedial Work shall be paid by
Borrower, including Lender’s reasonable attorneys’ fees and disbursements incurred in connection
with the monitoring or review of such Remedial Work. If Borrower does not timely
commence and diligently prosecute to completion the Remedial Work, Lender may (but shall not be
obligated to) cause such Remedial Work to be performed at Borrower’s expense. Notwithstanding the
foregoing, Borrower shall not be required to commence such Remedial Work within the above specified
time period: (x) if prevented from doing so by any Governmental Authority, (y) if commencing such
Remedial Work within such time period would result in Borrower or such Remedial Work violating any
Environmental Law, or (z) if Borrower, at its expense and after prior written notice to Lender, is
contesting by appropriate legal, administrative or other proceedings, conducted in good faith and
with due diligence, the need to perform Remedial Work. Borrower shall have the right to contest the
need to perform such Remedial Work, provided that, (1) Borrower is permitted by the applicable
Environmental Laws to delay performance of the Remedial Work pending such proceedings, (2) neither
the Property nor any part thereof or interest therein will be sold, forfeited or lost if Borrower
fails to promptly perform the Remedial Work being contested, and if Borrower fails to prevail in
contest, Borrower would thereafter have the opportunity to perform such Remedial Work, (3) Lender
would not, by virtue of such permitted contest, be exposed to any risk of any civil liability for
which Borrower has not furnished additional security as provided in clause (4) below, or to any
risk of criminal liability, and neither the Property nor any interest therein would be subject to
the imposition of any Lien for which Borrower has not furnished additional security as provided in
clause (4) below, as a result of the failure to perform such Remedial Work and (4) Borrower shall
have furnished to Lender additional security in respect of the Remedial Work being contested and
the loss or damage that may result from Borrower’s failure to prevail in such contest in such
amount as may be reasonably requested by Lender but in no event less than 125% of the cost of such
Remedial Work as reasonably estimated by a licensed hydrogeologist, licensed environmental
engineer or other qualified environmental consulting firm engaged by Lender (“Lender’s
Consultant”) and any loss or damage that may result from Borrower’s failure to prevail in
such contest.




          (d) Borrower shall not install or permit to be installed on the Property any underground
storage tank.




          5.8.3 O & M Program. In the event any environmental report delivered to
Lender in connection with the Loan recommends the development of or continued compliance with an
operation and maintenance program for the Property (including, without limitation, with respect to
the presence of asbestos and/or lead-based paint) (“O & M Program”),
Borrower shall develop (or continue to comply with, as the case may be) such O &
M Program and shall, during the term of the Loan, including any extension or renewal
thereof, comply in all material respects with the terms and conditions of the O & M
Program.







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     5.9 Title to the Property. Borrower will warrant and defend the title to the Property,
and the validity and priority of all Liens granted or otherwise given to Lender under the Loan
Documents, subject only to Permitted Encumbrances, against the claims of all Persons.



     5.10 Leases.



          5.10.1 Generally. Upon request, Borrower shall furnish Lender with executed copies of
all Leases then in effect. All renewals of Leases and all proposed leases shall provide for rental
rates and terms comparable to existing local market rates and shall be arm’s length transactions
with bona fide, independent third-party tenants.




          5.10.2 Material Leases. Borrower shall not enter into a proposed Material Lease or a
proposed renewal, extension or modification of an existing Material Lease without the prior written
consent of Lender, which consent shall not, so long as no Event of Default is continuing, be
unreasonably withheld or delayed. Prior to seeking Lender’s consent to any Material Lease, Borrower
shall deliver to Lender a copy of such proposed lease (a “Proposed Material Lease”)
blacklined to show changes from the standard form of Lease approved by Lender and then being
used by Borrower. Lender shall approve or disapprove each Proposed Material Lease or proposed
renewal, extension or modification of an existing Material Lease for which Lender’s approval is
required under this Agreement within fifteen (15) Business Days of the submission by Borrower to
Lender of a written request for such approval, accompanied by a final copy of the Proposed Material
Lease or proposed renewal, extension or modification of an existing Material Lease. If requested by
Borrower, Lender will grant conditional approvals of Proposed Material Leases or proposed renewals,
extensions or modifications of existing Material Leases at any stage of the leasing process, from
initial “term sheet” through negotiated lease drafts, provided that Lender shall retain the right
to disapprove any such Proposed Material Lease or proposed renewal, extension or modification of an
existing Material Lease, if subsequent to any preliminary approval material changes are made to the
terms previously approved by Lender, or additional material terms are added that had not previously
been considered and approved by Lender in connection with such Proposed Material Lease or proposed
renewal, extension or modification of an existing Material Lease. Notwithstanding the foregoing,
however, Lender consent shall not be required with respect to any Material Lease entered into
pursuant to and in accordance with Section 18 of the Purchase and Sale Agreement.




          5.10.3 Minor Leases. Notwithstanding the provisions of Section 5.10.2 above,
provided that no Event of Default is continuing, renewals, amendments and modifications of existing
Leases and proposed leases, shall not be subject to the prior approval of Lender provided (i) the
proposed lease would be a Minor Lease or the existing Lease as amended or modified or the renewal
Lease is a Minor Lease, (ii) the proposed lease shall be written substantially in accordance with
the standard form of Lease which shall have been approved by Lender, (iii) the Lease as amended or
modified or the renewal Lease or series of leases or proposed lease or series of leases: (a) shall
provide for net effective rental rates comparable to existing local market rates, (b) shall have an
initial term (together with all renewal options) of not less than three (3) years or greater than
fifteen (15) years, (c) shall provide for automatic self-operative subordination to the Mortgage
and, at Lender’s option, (x) attornment to Lender and (y) the unilateral right by Lender, at the
option of Lender, to subordinate the Lien of the Mortgage to the Lease, and (d) shall not contain
any option to purchase, any right of first refusal to purchase, any







41









 







right to terminate (except in the event of the destruction or condemnation of
substantially all of the Property or after the seventh year of the Lease term), any requirement for
a non-disturbance or recognition agreement, or any other provision which might adversely affect the
rights of Lender under the Loan Documents in any material respect. Borrower shall deliver to Lender
copies of all Leases which are entered into pursuant to the preceding sentence together with
Borrower’s certification that it has satisfied all of the conditions of the preceding sentence
within ten (10) days after the execution of the Lease.




          5.10.4 Additional Covenants with respect to Leases. Borrower (i) shall observe and
perform the material obligations imposed upon the lessor under the Leases and shall not do or
permit anything to impair, in any material respect, the value of the Leases as security for the
Debt; (ii) shall promptly send copies to Lender of all notices of default that Borrower shall send
or receive under any Lease; (iii) shall enforce, in accordance with commercially reasonable
practices for properties similar to the Property, the terms, covenants and conditions in the Leases
to be observed or performed by the lessees, short of termination thereof; (iv) shall
not collect any of the Rents more than one (1) month in advance (other than security deposits); (v)
shall not execute any other assignment of lessor’s interest in the Leases or the Rents (except as
contemplated by the Loan Documents); (vi) shall not modify any Lease in a manner inconsistent with
the Loan Documents; (vii) shall not convey or transfer or suffer or permit a conveyance or transfer
of the Property so as to effect a merger of the estates and rights of, or a termination or
diminution of the obligations of, lessees under Leases; (viii) shall not consent to any assignment
of or subletting under any Material Lease, unless such subletting is to a Duke Entity or any
Affiliate thereof, unless required in accordance with its terms without the prior consent of
Lender, which, with respect to a subletting for which Lender’s consent is required, may not, so
long as no Event of Default is continuing, be unreasonably withheld or delayed; and (ix) shall not
cancel or terminate any Lease or accept a surrender thereof (except in the exercise of Borrower’s
commercially reasonable judgment in connection with a tenant default under a Minor Lease) without
the prior consent of Lender, which consent shall not, so long as no Event of Default is continuing,
be unreasonably withheld or delayed.




     5.11 Estoppel Statement. After request by Lender, Borrower shall within ten (10) days
furnish Lender with a statement addressed to Lender, its successors and assigns, duly acknowledged
and certified, setting forth (i) the unpaid Principal, (ii) the Interest Rate, (iii) the date
installments of interest and/or Principal were last paid, (iv) any offsets or defenses to the
payment of the Debt, and (v) that the Loan Documents are valid, legal and binding obligations and
have not been modified or if modified, giving particulars of such modification.



     5.12 Property Management.



          5.12.1 Management Agreement. Borrower shall (i) cause the Property to be managed
pursuant to the Management Agreement; (ii) promptly perform and observe all of the material
covenants required to be performed and observed by it under the Management Agreement and do all
things necessary to preserve and to keep unimpaired its rights thereunder; (iii) promptly notify
Lender of any material default’ under the Management Agreement of which it is aware; (iv) promptly
deliver to Lender a copy of each financial statement, business plan, capital expenditure plan, and
property improvement plan and any other material notice, report and estimate received by Borrower
under the Management Agreement; and (v) promptly enforce







42









 







the performance and observance of all of the material covenants required to be performed and
observed by Manager under the Management Agreement. Without Lender’s prior written consent,
Borrower shall not (a) surrender, terminate, cancel, extend or renew the Management Agreement or
otherwise replace the Manager or enter into any other management agreement (except pursuant to
Section 5.12.2 below); (b) reduce or consent to the reduction of the term of the Management
Agreement; (c) increase or consent to the increase of the amount of any charges under the
Management Agreement; (d) otherwise modify, change, supplement, alter or amend in any material
respect, or waive or release any of its material rights and remedies under, the Management
Agreement; (e) suffer or permit the occurrence and continuance of a default beyond any applicable
cure period under the Management Agreement (or any successor management agreement) if such default
permits the Manager to terminate the Management Agreement (or such successor management
agreement); or (f) suffer or permit the ownership, management or control of the Manager
to be transferred to a Person other than an Affiliate of Borrower.




          5.12.2 Termination of Manager. If (i) Borrower fails to satisfy the
Minimum DSCR Threshold for two consecutive Calculation Dates, or (ii) an Event of Default shall be
continuing, or (iii) Manager is in default under the Management Agreement beyond any applicable
notice and/or cure period, or (iv) upon the gross negligence, malfeasance or willful misconduct of
the Manager, Borrower shall, at the request of Lender, terminate the Management Agreement and
replace Manager with a replacement manager acceptable to Lender in Lender’s reasonable discretion
and acceptable to the applicable Rating Agencies on terms and conditions reasonably satisfactory to
Lender and satisfactory to the applicable Rating Agencies. All calculations of the Debt Service
Coverage Ratio for purposes of this Section 5.12.2 shall be subject to verification by
Lender. Borrower’s failure to appoint an acceptable manager within forty-five (45) days after
Lender’s request of Borrower to terminate the Management Agreement shall constitute an immediate
Event of Default. Borrower may from time to time appoint a successor manager to manage the
Property, provided that such successor manager and Management Agreement shall be approved in
writing by Lender in Lender’s reasonable discretion and approved by the applicable Rating Agencies
(and Lender’s approval may be conditioned upon Borrower delivering a Rating Comfort Letter as to
such successor manager and Management Agreement). If at any time Lender consents to the appointment
of a new manager, such new manager and Borrower shall, as a condition of Lender’s consent, execute
a consent and subordination of management agreement substantially in the form of the Consent and
Subordination of Manager of even date herewith executed and delivered by Manager to Lender.




     5.13 Special Purpose Bankruptcy Remote Entity. Borrower shall at all times be a
Special Purpose Bankruptcy Remote Entity. Borrower shall not directly or indirectly make any
change, amendment or modification to its organizational documents, or otherwise take any action
which could result in Borrower not being a Special Purpose Bankruptcy Remote Entity. A
“Special Purpose Bankruptcy Remote Entity” shall have the meaning set forth on
Schedule 5 hereto.



     5.14 Assumption in Non-Consolidation Opinion. Borrower shall conduct its
business so that the assumptions (with respect to each Person) made in that certain substantive
non-consolidation opinion letter dated the date hereof delivered by Borrower’s counsel in
connection with the Loan shall be true and correct in all material respects.



43









 





     5.15 Change in Business or Operation of Property. Borrower shall not purchase or own
any real property other than the Property and shall not enter into any line of business other than
the ownership and operation of the Property, or make any material change in the scope or nature of
its business objectives, purposes or operations, or undertake or participate in activities other
than the continuance of its present business or otherwise cease to operate the Property for
office, medical, educational, institutional and other appurtenant and related uses or terminate
such business for any reason whatsoever (other than temporary cessation in connection with
renovations to the Property).



     5.16 Debt Cancellation. Borrower shall not cancel or otherwise forgive or release any
claim or debt (other than termination of Leases in accordance herewith) owed to Borrower by any
Person, except for adequate consideration and in the ordinary course of Borrower’s business.



     5.17 Affiliate Transactions. Other than the Management Agreement, Borrower shall not
enter into, or be a party to, any transaction with an Affiliate of Borrower or any of the members
of Borrower except in the ordinary course of business and on terms which are fully disclosed to
Lender in advance and are no less favorable to Borrower or such Affiliate than would be obtained
in a comparable arm’s-length transaction with an unrelated third party.



     5.18 Zoning. Borrower shall not initiate or consent to any zoning reclassification of
any portion of the Property or seek any variance under any existing zoning ordinance or use or
permit the use of any portion of the Property in any manner that could result in such use becoming
a non-conforming use under any zoning ordinance or any other applicable land use law, rule or
regulation, without the prior written consent of Lender.



     5.19 No Joint Assessment. Borrower shall not suffer, permit or initiate the joint
assessment of the Property constituting real property (i) with any other real property
constituting a tax lot separate from the Property, and (ii) with any portion of the Property which
may be deemed to constitute personal property, or any other procedure whereby the lien of any
taxes which may be levied against such personal property shall be assessed or levied or charged to
the Property.



     5.20 Principal Place of Business. Borrower shall not change its principal place of
business or chief executive office without first giving Lender thirty (30) days’ prior notice.



     5.21 Change of Name, Identity or Structure. Borrower shall not change its name,
identity (including its trade name or names) or Borrower’s corporate, partnership or other entity
type without notifying Lender of such change in writing at least thirty (30) days prior to the
effective date of such change and, in the case of a change in Borrower’s structure, without first
obtaining the prior written consent of Lender. Borrower shall execute and deliver to Lender, prior
to or contemporaneously with the effective date of any such change, any financing statement or
financing statement change required by Lender to establish or maintain the validity, perfection and
priority of the security interest granted herein. At the request of Lender, Borrower shall execute
a certificate in form satisfactory to Lender listing the trade names under which Borrower intends
to operate the Property, and representing and warranting that Borrower does business under no other
trade name with respect to the Property.



44









 





     5.22 Indebtedness. Borrower shall not directly or indirectly create, incur or assume
any indebtedness other than (i) the Debt and (ii) unsecured trade payables incurred in the ordinary
course of business relating to the ownership and operation of the Property, which in the case of
such unsecured trade payables (A) are not evidenced by a note, (B) do not exceed, at any time, a
maximum aggregate amount of one percent (1%) of the original amount of the Principal and
(C) are paid within sixty (60) days of the date incurred (collectively, “Permitted
Indebtedness”).



     5.23 Licenses. Borrower shall not Transfer any License required for the operation
of the Property.



     5.24 Compliance with Restrictive Covenants, Etc. Borrower will not enter into, modify,
waive in any material respect or release any Easements, restrictive covenants or other Permitted
Encumbrances, or suffer, consent to or permit the foregoing, without Lender’s prior written
consent, which consent may be granted or denied in Lender’s reasonable discretion.



     5.25 ERISA.



          (1) Borrower shall not engage in any transaction which would cause any obligation, or action
taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note,
this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA.




          (2) Borrower shall not maintain, sponsor, contribute to or become obligated to contribute to,
or suffer or permit any ERISA Affiliate of Borrower to, maintain, sponsor, contribute to or become
obligated to contribute to, any Plan or any Welfare Plan or permit the assets of Borrower to become
“plan assets,” whether by operation of law or under regulations promulgated under ERISA.




          (3) Borrower shall deliver to Lender such certifications or other evidence from time to time
throughout the Term, as requested by Lender in its sole discretion, that (A) Borrower is not and
does not maintain an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject
to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA; (B)
Borrower is not subject to state statutes regulating investments and fiduciary obligations with
respect to governmental plans; and (C) the assets of Borrower do not constitute “plan assets”
within the meaning of 29 C.F.R. Section 2510.3-101.




     5.26 Prohibited Transfers.



          5.26.1 Generally. Borrower shall not directly or indirectly make, suffer or permit the
occurrence of any Transfer other than a Permitted Transfer.




          5.26.2 Transfer and Assumption.




          (a) Notwithstanding the foregoing and subject to the terms and satisfaction of all the
conditions precedent set forth in this Section 5.26.2, Borrower shall have the right to
Transfer the Property to another party (the “Transferee Borrower”) and have the
Transferee Borrower assume (and relieve Borrower of) all of Borrower’s obligations under the Loan







45









 







Documents, and have replacement guarantors and indemnitors assume all of the
obligations of the indemnitors and guarantors of the Loan Documents (collectively, a
“Transfer and Assumption”). Borrower may make a written application to
Lender for Lender’s consent to the Transfer and Assumption, subject to the conditions set forth in
paragraphs (b) and (c) of this Section 5.26.2. Together with such written application,
Borrower will pay to Lender the reasonable review fee then required by Lender. Borrower also shall
pay on demand all of the reasonable costs and expenses incurred by Lender, including reasonable
attorneys’ fees and expenses, and including the fees and expenses of Rating Agencies and other
outside entities, in connection with considering any proposed Transfer and Assumption, whether or
not the same is permitted or occurs.




          (b) Lender’s consent, which may be withheld in Lender’s sole and absolute discretion, to a
Transfer and Assumption shall be subject to the following conditions;




               (i) No Event of Default has occurred and is continuing;



               (ii) Borrower has submitted to Lender true, correct and complete copies of any and all
information and documents of any kind requested by Lender concerning the Property, Transferee
Borrower, replacement guarantors and indemnitors and Borrower;



               (iii) Evidence satisfactory to Lender has been provided showing that the Transferee Borrower
and such of its Affiliates as shall be designated by Lender comply and will comply with Section
5.13 hereof, as those provisions may be modified by Lender taking into account the ownership
structure of Transferee Borrower and its Affiliates;



               (iv) If the Loan, by itself or together with other loans, has been the subject of a Secondary
Market Transaction, then Lender shall have received a Rating Comfort Letter from the applicable
Rating Agencies;



               (v) If the Loan has not been the subject of a Secondary Market Transaction, then Lender shall
have determined in its reasonable discretion (taking into consideration such factors as Lender may
determine, including the attributes of the loan pool in which the Loan might reasonably be expected
to be securitized) that no rating for any securities that would be issued in connection with such
securitization will be diminished, qualified, or withheld by reason of the Transfer and Assumption;



               (vi) Borrower shall have paid all of Lender’s reasonable costs and expenses in connection with
considering the Transfer and Assumption, and shall have paid the amount reasonably requested by
Lender as a deposit against Lender’s costs and expenses in connection with the effecting the
Transfer and Assumption;



               (vii) Borrower, the Transferee Borrower, and the replacement guarantors and indemnitors shall
have indicated in writing in form and substance reasonably satisfactory to Lender their readiness
and ability to satisfy the conditions set forth in subsection (c) below;



46









 





               (viii) The identity, experience, financial condition and creditworthiness of the Transferee
Borrower and the replacement guarantors and indemnitors shall be reasonably satisfactory to Lender;
and



               (ix) The proposed property manager and proposed Management Agreement shall be reasonably
satisfactory to Lender and satisfactory to the applicable Rating Agencies.



          (c) If Lender consents to the Transfer and Assumption, the Transferee Borrower and/or Borrower
as the case may be, shall immediately deliver the following to Lender:




               (i) Borrower shall deliver to Lender an assumption fee in the amount of one-half of one
percent (0.5%) of the then unpaid Principal for the first Transfer and Assumption consummated
hereunder and one percent (1%) of the then unpaid Principal for each Transfer and Assumption
thereafter;



               (ii) Borrower, Transferee Borrower and the original and replacement guarantors and indemnitors
shall execute and deliver to Lender any and all documents reasonably required by Lender, in form
and substance required by Lender, in Lender’s reasonable discretion;



               (iii) Counsel to the Transferee Borrower and replacement guarantors and indemnitors shall
deliver to Lender opinions in form and substance satisfactory to Lender as to such matters as
Lender shall reasonably require, which may include opinions as to substantially the same matters
and were required in connection with the origination of the Loan (including a new substantive
non-consolidation opinion with respect to the Transferee Borrower);



               (iv) Borrower shall cause to be delivered to Lender, an endorsement (relating to the change in
the identity of the vestee and execution and delivery of the Transfer and Assumption documents) to
the Title Insurance Policies in form and substance acceptable to Lender, in Lender’s reasonable
discretion (the “Endorsement”); and



               (v) Borrower shall deliver to Lender a payment in the amount of all remaining unpaid costs
reasonably incurred by Lender in connection with the Transfer and Assumption, including but not
limited to, Lender’s reasonable attorneys fees and expenses, all recording fees, and all fees
payable to the title company for the delivery to Lender of the Endorsement.



     5.27 Liens. Without Lender’s prior written consent, Borrower shall not create, incur,
assume, permit or suffer to exist any Lien on all or any portion of the Property or any direct or
indirect legal or beneficial ownership interest in Borrower, except Liens in favor of Lender and
Permitted Encumbrances, unless such Lien is bonded or discharged within thirty (30) days after
Borrower first receives notice of such Lien.



     5.28 Dissolution. Borrower shall not (i) engage in any dissolution, liquidation or
consolidation or merger with or into any other business entity, (ii) engage in any business




47











 





activity not related to the ownership and operation of the Property or (iii) transfer, lease
or sell, in one transaction or any combination of transactions, all or substantially all of the
property or assets of Borrower except to the extent expressly permitted by the Loan Documents.



     5.29 Expenses. Except as limited by Section 9.1(b) or Section 10.3 hereof,
Borrower shall reimburse Lender upon receipt of notice for all reasonable out-of-pocket costs and
expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender or Servicer in
connection with the Loan, including (i) the preparation, negotiation, execution and delivery of the
Loan Documents and the consummation of the transactions contemplated thereby and all the costs of
furnishing all opinions by counsel for Borrower; (ii) Borrower’s and Lender’s ongoing performance
under and compliance with the Loan Documents, including confirming compliance with environmental
and insurance requirements; (iii) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications of or under any Loan
Document and any other documents or matters requested by Lender; (iv) filing and recording of any
Loan Documents; (v) title insurance, surveys, inspections and appraisals; (vi) the creation,
perfection or protection of Lender’s Liens in the Property and the Cash Management Accounts
(including fees and expenses for title and lien searches, intangibles taxes, personal property
taxes, mortgage recording taxes, due diligence expenses, travel expenses, accounting firm fees,
costs of appraisals, environmental reports and Lender’s Consultant, surveys and engineering
reports); (vii) enforcing or preserving any rights in response to third party claims or the
prosecuting or defending of any action or proceeding or other litigation, in each case against,
under or affecting Borrower, the Loan Documents, the Property, or any other security given for the
Loan; (viii) fees charged by Servicer or the Rating Agencies in connection with the Loan or any
modification requested by Borrower and (ix) enforcing any obligations of or collecting any payments
due from Borrower under any Loan Document or with respect to the Property or in connection with any
refinancing or restructuring of the Loan in the nature of a “work-out”, or any insolvency or
bankruptcy proceedings. Any costs and expenses due and payable by Borrower hereunder which are not
paid by Borrower within ten (10) days after demand may be paid from any amounts in the Deposit
Account, with notice thereof to Borrower. The obligations and liabilities of Borrower under this
Section 5.29 shall survive the Term and the exercise by Lender of any of its rights or
remedies under the Loan Documents, including the acquisition of the Property by foreclosure or a
conveyance in lieu of foreclosure.



     5.30 Indemnity. Borrower shall defend, indemnify and hold harmless Lender and each of
its Affiliates and their respective successors and assigns, including the directors, officers,
partners, members, shareholders, participants, employees, professionals and agents of any of the
foregoing (including any Servicer) and each other Person, if any, who Controls Lender, its
Affiliates or any of the foregoing (each, an “Indemnified Party”), from and against any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for an Indemnified Party in connection with any investigative,
administrative or judicial proceeding commenced, whether or not Lender shall be designated a party
thereto, court costs and costs of appeal at all appellate levels, investigation and laboratory
fees, consultant fees and litigation expenses), that may be imposed on, incurred by, or asserted
against any Indemnified Party (collectively, the
“Indemnified Liabilities”) in any manner, relating to or arising out of or by
reason of the Loan, including: (i) any breach by Borrower of its obligations under, or any
misrepresentation by Borrower contained in, any Loan Document;



48









 




(ii) the use or intended use of the proceeds of the Loan; (iii) any information provided
by or on behalf of Borrower, or contained in any documentation approved by Borrower; (iv) ownership
of the Mortgage, the Property or any interest therein, or receipt of any Rents; (v) any accident,
injury to or death of persons or loss of or damage to property occurring in, on or about the
Property or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (vi) any use, nonuse or condition in, on or about the Property or on adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways; (vii) performance of any labor
or services or the furnishing of any materials or other property in respect of the Property; (viii)
the presence, disposal, escape, seepage, leakage, spillage, discharge, emission, release, or
threatened release of any Hazardous Substance on, from or affecting the Property; (ix) any personal
injury (including wrongful death) or property damage (real or personal) arising out of or related
to such Hazardous Substance; (x) any lawsuit brought or threatened, settlement reached, or
government order relating to such Hazardous Substance; (xi) any violation of the Environmental Laws
which is based upon or in any way related to such Hazardous Substance, including the costs and
expenses of any Remedial Work; (xii) any failure of the Property to comply with any Legal
Requirement; (xiii) any claim by brokers, finders or similar persons claiming to be
entitled to a commission in connection with any Lease or other transaction involving the
Property or any part thereof, or any liability asserted against Lender with respect thereto; and
(xiv) the claims of any lessee of any portion of the Property or any Person acting through or under
any lessee or otherwise arising under or as a consequence of any Lease; provided, however, that
Borrower shall not have any obligation to any Indemnified Party hereunder to the extent that it is
finally judicially determined that such Indemnified Liabilities arise from the gross negligence,
illegal acts, fraud or willful misconduct of such Indemnified Party. Any amounts payable to any
Indemnified Party by reason of the application of this paragraph shall be payable within ten (10)
days of demand and, if not paid within such ten (10) day period, shall bear interest at the Default
Rate from the date loss or damage is sustained by any Indemnified Party until paid. The obligations
and liabilities of Borrower under this Section 5.30 shall survive the Term and the exercise
by Lender of any of its rights or remedies under the Loan Documents, including the acquisition of
the Property by foreclosure or a conveyance in lieu of foreclosure. Notwithstanding the foregoing,
however, Borrower shall not be obligated to indemnify any Indemnified Party for any event or
condition, that first arises on or after the date on which Lender (or its transferee) acquires
title or control of the Property (whether at foreclosure sale, conveyance in lieu of foreclosure or
similar transfer) or after a receiver has been appointed for the Property; provided that Borrower’s
obligation to indemnify the Indemnified Parties with respect to an event or condition specified in
clauses (viii) through (xi) above (relating to Hazardous Substances) shall continue in perpetuity
after Lender (or its transferee) acquires title or control of the Property unless such specified
event or condition occurs during Lender’s period of ownership and provided that Borrower shall bear
the burden of proving that such specified event or condition occurred during Lender’s period of
ownership.




     5.31 Patriot Act Compliance.



          (a) Borrower will use its good faith and commercially reasonable efforts to comply with the
Patriot Act (as defined below) and all applicable requirements of governmental authorities having
jurisdiction over Borrower and the Property, including those relating to money laundering and
terrorism. Lender shall have the right to audit Borrower’s compliance with the Patriot Act and all
applicable requirements of governmental authorities having jurisdiction over










49









 







Borrower and the Property, including those relating to money laundering and terrorism.
In the event that Borrower fails to comply with the Patriot Act or any such requirements of
governmental authorities, then Lender may, at its option, cause Borrower to comply therewith and
any and all reasonable costs and expenses incurred by Lender in connection therewith shall be
secured by the Mortgage and the other Loan Documents and shall be immediately due and payable. For
purposes hereof, the term “Patriot Act” means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as the same may be amended from time to time, and corresponding provisions of future laws.




     (b) Neither Borrower nor, to Borrower’s knowledge, any member in Borrower or member of such
member nor any owner of a direct or indirect interest in Borrower (i) is listed on any Government
Lists (as defined below), (ii) is a person who has been determined by competent authority to be
subject to the prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or
any other similar prohibitions contained in the rules and regulations of OFAC (as defined below) or
in any enabling legislation or other Presidential Executive Orders in respect thereof, (iii) has
been previously indicted for or convicted of any felony involving a crime or crimes of moral
turpitude or for any Patriot Act Offense (as defined below), or (iv) is currently under
investigation by any governmental authority for alleged criminal activity. For purposes hereof, the
term “Patriot Act Offense” means any violation of the criminal laws of the United
States of America or of any of the several states, or that would be a criminal violation if
committed within the jurisdiction of the United States of America or any of the several states,
relating to terrorism or the laundering of monetary instruments, including any offense under (A)
the criminal laws against terrorism; (B) the criminal laws against money laundering, (C) the Bank
Secrecy Act, as amended, (D) the Money Laundering Control Act of 1986, as amended, or the (E)
Patriot Act. “Patriot Act Offense” also includes the crimes of conspiracy to commit, or aiding and
abetting another to commit, a Patriot Act Offense. For purposes hereof, the term “Government
Lists” means (i) the Specially Designated Nationals and Blocked Persons Lists maintained by
Office of Foreign Assets Control (“OFAC”), (ii) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of
OFAC that Lender notified Borrower in writing is now included in “Governmental Lists”, or (iii) any
similar lists maintained by the United States Department of State, the United States Department of
Commerce or any other government authority or pursuant to any Executive Order of the President of
the United States of America that Lender notified Borrower in writing is now included in
“Governmental Lists”.



     5.32 Upfit Obligations. Borrower shall cause G.M. Hock Construction, Inc. to comply
with all “upfit” obligations set forth in the Purchase and Sale Agreement or any of the Leases.



6. NOTICES AND REPORTING




     6.1 Notices. All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document (a “Notice”) shall be given in writing and
shall be effective for all purposes if either hand delivered with receipt acknowledged, or by a
nationally recognized overnight delivery service (such as Federal Express), or by certified or
registered United States mail, return receipt requested, postage prepaid, or by facsimile and
confirmed by



50









 




facsimile answer back, in each case addressed as follows (or to such other address or Person
as a party shall designate from time to time by notice to the other party): If to Lender: Greenwich
Capital Financial Products, Inc., 600 Steamboat Road, Greenwich, Connecticut 06830, Attention:
Mortgage Loan Department, Telecopier (203) 618-2052, with a copy to: Kaye Scholer LLP, 425 Park
Avenue, New York, New York 10022, Attention: Stephen Gliatta, Esq., Telecopier: (212) 836-8689; if
to Borrower: c/o Brickman Associates, 712 Fifth Avenue, New York, New York 10019, Attention:
Kathleen Corton, Telecopier: (212) 956-5961, with a copy to: Dickstein, Shapiro, Morin &
Oshinsky, LLP, 2101 L Street, NW, Washington, DC 20037, Attention: Howard S. Jatlow, Esq.,
Telecopier: (202) 887-0689. A notice shall be deemed to have been given: in the case of hand
delivery, at the time of delivery; in the case of registered or certified mail, when delivered or
the first attempted delivery on a Business Day; in the case of overnight delivery, upon the first
attempted delivery on a Business Day; or in the case of facsimile, upon the confirmation of receipt
of such facsimile transmission.




     6.2 Borrower Notices and Deliveries. Borrower shall (a) give prompt written notice to Lender
of: (i) any litigation, governmental proceedings or claims or investigations pending or threatened
against Borrower which might materially adversely affect Borrower’s condition (financial or
otherwise) or business or the Property; (ii) any material adverse change in Borrower’s condition,
financial or otherwise, or of the occurrence of any Event of Default of which Borrower has
knowledge; and (b) furnish and provide to Lender: (i) any Securities and Exchange Commission or
other public filings, if any, of Borrower, Manager, or any Affiliate of any of the foregoing within
five (5) Business Days of such filing and (ii) all instruments, documents, boundary surveys,
footing or foundation surveys, certificates, plans and specifications, appraisals, title and other
insurance reports and agreements, reasonably requested, from time to time, by Lender. In addition,
after request by Lender (but no more frequently than twice in any year), Borrower shall use its
commercially reasonable efforts to furnish to Lender, within thirty (30) days after Lender’s
request, tenant estoppel certificates addressed to Lender, its successors and assigns from each
tenant at the Property in form and substance reasonably satisfactory to Lender.



     6.3 Financial Reporting.



          6.3.1 Bookkeeping. Borrower shall keep on a calendar year basis, in accordance with
GAAP, proper and accurate books, records and accounts reflecting all of the financial affairs of
Borrower and all items of income and expense and any services, Equipment or furnishings provided in
connection with the operation of the Property, whether such income or expense is realized by
Borrower, Manager or any Affiliate of Borrower. Lender shall have the right from time to time
during normal business hours upon reasonable notice to examine such books, records and accounts at
the office of Borrower or other Person maintaining them, and to make such copies or extracts
thereof as Lender shall desire. After an Event of Default, Borrower shall pay any costs incurred by
Lender to examine such books, records and accounts, as Lender shall determine to be necessary or
appropriate in the protection of Lender’s interest.




          6.3.2 Annual Reports. Borrower shall furnish to Lender annually, within 120 days after each
calendar year, a complete copy of Borrower’s annual financial statements audited by a “big four”
accounting firm or another independent certified public accountant (accompanied by an unqualified
opinion from such accounting firm or other independent




51









 







certified public accountant) reasonably acceptable to Lender, each in accordance with GAAP and
containing balance sheets and statements of profit and loss for Borrower and the Property in such
detail as Lender may request. Each such statement (x) shall be in form and substance reasonably
satisfactory to Lender, (y) shall set forth the financial condition and the income and expenses for
the Property for the immediately preceding calendar year, including statements of annual Net
Operating Income, as well as (z) shall be accompanied by an Officer’s Certificate certifying (1)
that such statement is true, correct, complete and accurate and presents fairly the financial
condition of the Property and has been prepared in accordance with GAAP and (2) whether, to the
best of their knowledge, there exists a Default or Event of Default, and if so, the nature thereof,
the period of time it has existed and the action then being taken to remedy it and (3) setting
forth a reconciliation of operating expenses identifying those funds which were disbursed to
Borrower from the Operating Expense Subaccount during the prior calendar year which were not been
used to pay Approved Operating Expenses. Notwithstanding the foregoing, Lender hereby approves of
The Schonbraun McCann Group, LLC as the aforementioned independent certified public accountant,
provided, however, that Lender reserves the right to disapprove The Schonbraun McCann Group, LLC as
the aforementioned independent certified public accountant (and to require a “big four” accounting
firm or another independent certified public accountant reasonably acceptable to Lender) if in
Lender’s reasonable opinion, The Schonbraun McCann Group, LLC is not preparing the requisite
financial statements substantially in accordance with the provisions contained herein.




          6.3.3 Monthly/Quarterly Reports. Borrower shall furnish to Lender within twenty (20)
days after the end of each calendar month or calendar quarter (as indicated below) the following
items: (i) monthly and year-to-date operating statements, noting Net Operating Income and other
information necessary and sufficient under GAAP to fairly represent the financial position and
results of operation of the Property during such calendar month, all in form satisfactory to
Lender; (ii) a balance sheet for such calendar month; (iii) a comparison of the budgeted income and
expenses and the actual income and expenses for each month and year-to-date for the Property,
together with a detailed explanation of any variances of ten percent (10%) or more between budgeted
and actual amounts for such period and year-to-date; (iv) a statement of the actual Capital
Expenses made by Borrower during each calendar quarter as of the last day of such calendar quarter;
(v) a statement that Borrower has not incurred any indebtedness other than indebtedness permitted
hereunder; (vi) an aged receivables report and (vii) rent rolls identifying the leased premises,
names of all tenants, units leased, monthly rental and all other charges payable under each Lease,
date to which paid, term of Lease, date of occupancy, date of expiration, and a delinquency report
for the Property. Each such statement shall be accompanied by an Officer’s Certificate certifying
(1) that such items are true, correct, accurate, and complete and fairly present the financial
condition and results of the operations of Borrower and the Property in accordance with GAAP
(subject to normal year-end adjustments) and (2) whether there exists a Default or Event of
Default, and if so, the nature thereof, the period of time it has existed and the action then being
taken to remedy it.




          6.3.4 Other Reports. Borrower shall furnish to Lender, within ten (10) Business Days
after request, such further detailed information with respect to the operation of the Property and
the financial affairs of Borrower or Manager as may be reasonably requested by Lender or any
applicable Rating Agency.








52









 








          6.3.5 Annual Budget. Borrower shall prepare and submit (or shall cause Manager to
prepare and submit) to Lender within thirty (30) days after a Cash Management Period and by
November 30th of each year thereafter during the Term until such Cash Management Period
has ended, for approval by Lender, which approval shall not be unreasonably withheld or delayed, a
proposed pro forma budget for the Property for the succeeding calendar year (the “Annual Budget”,
and each Annual Budget approved by Lender is referred to herein as
the “Approved Annual Budget”)),
and, promptly after preparation thereof, any revisions to such Annual Budget. The Annual Budget
shall consist of (i) an operating expense budget showing, on a month-by-month basis, in reasonable
detail, each line item of the Borrower’s anticipated operating income and operating expenses (on a
cash and accrual basis), including amounts required to establish, maintain and/or increase any
monthly payments required hereunder (and once such Annual Budget has been approved by Lender, such
operating expense budget shall be referred to herein as the
“Approved Operating Budget”), and (ii)
a Capital Expense budget showing, on a month-by-month basis, in reasonable detail, each line item
of anticipated Capital Expenses (and once such Annual Budget has been approved by Lender, such
Capital Expense budget shall be referred to herein as the “Approved Capital Budget”). Until such
time that any Annual Budget has been approved by Lender, the prior Approved Annual Budget shall
apply for all purposes hereunder (with such adjustments as reasonably determined by Lender
(including increases for any non-discretionary expenses)).




          6.3.6 Breach. If Borrower fails to provide to Lender or its designee any of the
financial statements, certificates, reports or information (the “Required Records”) required by
this Article 6 within thirty (30) days after the date upon which such Required Record is due,
Borrower shall pay to Lender, at Lender’s option and in its discretion, an amount equal to $2,500
for each Required Record that is not delivered; provided Lender has given Borrower at least fifteen
(15) days prior notice of such failure. In addition, thirty (30) days after Borrower’s failure to
deliver any Required Records, Lender shall have the option, upon fifteen (15) days notice to
Borrower to gain access to Borrower’s books and records and prepare or have prepared at Borrower’s
expense, any Required Records not delivered by Borrower.




7. INSURANCE; CASUALTY; AND CONDEMNATION




     7.1 Insurance.



          7.1.1 Coverage. Borrower, at its sole cost, for the mutual benefit of Borrower and
Lender, shall obtain and maintain during the Term the following policies of insurance:




          (a) Property insurance insuring against loss or damage customarily included under so called
“all risk” or “special form” policies including fire, lightning, vandalism, and malicious mischief,
boiler and machinery and, if required by Lender, flood and/or earthquake coverage and subject to
subsection (j) below, coverage for damage or destruction caused by the acts of
“Terrorists” (or such policies shall have no
exclusion from coverage with respect thereto) and such other insurable hazards as, under good
insurance practices, from time to time are insured against for other property and buildings similar
to the premises in nature, use, location, height, and type of construction. Such insurance policy
shall also insure for ordinance of law coverage, costs of demolition and increased cost of
construction in amounts satisfactory to Lender. Each such insurance policy shall (i) be
in an amount equal to 100% of the then










53









 







replacement cost of the Improvements without deduction for physical depreciation, (ii)
have deductibles no greater than the lesser of $25,000 or five percent (5%) of Net Operating Income
per occurrence, (iii) be paid annually in advance and (iv) be on a replacement cost basis and
contain either no coinsurance or, if coinsurance, an agreed amount endorsement, and shall cover,
without limitation, all tenant improvements and betterments that Borrower is required to insure on
a replacement cost basis. Lender shall be named Mortgagee and Loss Payee on a Standard Mortgagee
Endorsement.




          (b) Flood insurance if any part of the Property is located in an area now or hereafter
designated by the Federal Emergency Management Agency as a Zone “A” & “V” Special Hazard Area, or
such other Special Hazard Area if Lender so requires in its sole discretion. Such policy shall (i)
be in an amount equal to (A) 100% of the full replacement cost of the Improvements on the Property
(without any deduction for depreciation) or (B) such other amount as agreed to by Lender and (ii)
have a maximum permissible deductible of $3,000.




          (c) Public liability insurance, including (i) “Commercial General Liability Insurance”, (ii)
“Owned”, “Hired” and “Non Owned Auto Liability”; and (iii) umbrella liability coverage for personal
injury, bodily injury, death, accident and property damage, such insurance providing in combination
no less than containing minimum limits per occurrence of $1,000,000 and $2,000,000 in the aggregate
for any policy year with no deductible or self insured retention; together with at least
$25,000,000 excess and/or umbrella liability insurance for any and all claims. The policies
described in this subsection shall also include coverage for elevators, escalators, independent
contractors, “Contractual Liability” (covering, to the maximum extent permitted by law, Borrower’s
obligation to indemnify Lender as required under this Agreement and the other Loan Documents),
“Products” and “Completed Operations Liability” coverage.




          (d) Rental loss and/or business interruption insurance (i) with Lender being named as “Lender
Loss Payee”, (ii) in an amount equal to 100% of the projected Rents from the Property during the
period of restoration; and (iii) containing an extended period of indemnity endorsement which
provides that after the physical loss to the Property has been repaired, the continued loss of
income will be insured until such income either returns to the same level it was at prior to the
loss, or the expiration of eighteen (18) months from the date that the Property is repaired or
replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy
may expire prior to the end of such period. The amount of such insurance shall be increased from
time to time during the Term as and when the estimated or actual Rents increase.




          (e) Comprehensive boiler and machinery insurance covering all mechanical and electrical
equipment against physical damage, rent loss and improvements loss and covering, without
limitation, all tenant improvements and betterments that Borrower is required to insure pursuant to
the lease on a replacement cost basis and in an amount equal to the lesser of (i) $2,000,000 and
(ii) 100% of the full replacement cost of the Improvements on such Property (without any deduction
for depreciation).




          (f) Worker’s compensation and disability insurance with respect to any employees of Borrower,
as required by any Legal Requirement.





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          (g) During any period of repair or restoration, builder’s “all-risk” insurance on the so
called completed value basis in an amount equal to not less than the full insurable value of the
Property, against such risks (including fire and extended coverage and collapse of the Improvements
to agreed limits) as Lender may request, in form and substance acceptable to Lender.




          (h) Coverage to compensate for ordinance of law, the cost of demolition and the increased cost
of construction in an amount satisfactory to Lender.




          (i) Such other insurance (including environmental liability insurance, earthquake insurance,
mine subsidence insurance and windstorm insurance) as may from time to time be reasonably required
by Lender in order to protect its interests.




          (j) Notwithstanding anything in subsection (a) above to the contrary, Borrower
shall be required to obtain and maintain coverage in its property insurance Policy (or by a
separate Policy) against loss or damage by terrorist acts in an amount equal to 100% of the “Full
Replacement Cost” of the Property; provided that such coverage is available. In the event that such
coverage with respect to terrorist acts is not included as part of the “all risk” property policy
required by subsection (a) above, Borrower shall, nevertheless be required to obtain coverage for
terrorism (as stand alone coverage) in an amount equal to 100% of the “Full Replacement Cost” of
the Property; provided that such coverage is available. Notwithstanding the foregoing, with respect
to any such stand-alone policy covering terrorist acts, Borrower shall not be required to pay any
Insurance Premiums solely with respect to such terrorism coverage in excess of the Terrorism
Premium Cap (hereinafter defined); provided that if the Insurance Premiums payable with respect to
such terrorism coverage exceeds the Terrorism Premium Cap, Lender may, at its option (1) purchase
such stand-alone terrorism Policy, with Borrower paying such portion of the Insurance Premiums with
respect thereto equal to the Terrorism Premium Cap and the Lender paying such portion of the
Insurance Premiums in excess of the Terrorism Premium Cap or (2) modify the deductible amounts,
policy limits and other required policy terms to reduce the Insurance Premiums payable with respect
to such stand-alone terrorism Policy to the Terrorism Premium Cap. As used herein, (i)
“Terrorism Premium Cap” means an amount equal to 150% of the aggregate Insurance
Premiums payable with respect to all the insurance coverage under Section 7.1.1(a) above
for the last policy year in which coverage for terrorism was included as part of the “all risk”
property policy required by subsection (a) above, adjusted annually by a percentage equal to the
increase in the Consumer Price Index (hereinafter defined) and (ii) “Consumer Price Index”
means the Consumer Price Index for All Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of Labor, New York Metropolitan Statistical Area, All
Items (1982-84 = 100), or any successor index thereto, approximately adjusted, and in
the event that the Consumer Price Index is converted to a different standard reference base or
otherwise revised, the determination of adjustments provided for herein shall be made with the use
of such conversion factor, formula or table for converting the Consumer Price Index as may be
published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then
with the use of such conversion factor, formula or table as may be published by
Prentice-Hall, Inc., or any other nationally recognized publisher of similar statistical
information; and if the Consumer Price Index ceases to be published, and there is no successor
thereto (i) such other index as Lender and Borrower shall agree upon in writing or (ii) if Lender
and Borrower cannot agree on a substitute index, such










55









 







other index, as reasonably selected by Lender. Borrower shall obtain the coverage required under
this subsection (j) from a carrier which otherwise satisfies the rating criteria specified in
Section 7.1.2 below (a “Qualified
Carrier”) or in the event that such coverage
is not available from a Qualified Carrier, Borrower shall obtain such coverage from the highest
rated insurance company providing such coverage.




          7.1.2 Policies. All policies of insurance (the “Policies”) required
pursuant to Section 7.1.1 above shall (i) be issued by companies approved by
Lender and authorized to do business in the State, with a claims paying ability rating of “A” or
better by S&P (and the equivalent by any other Rating Agency) and a rating of A:X or better in the
current Best’s Insurance Reports; (ii) name Lender and its successors and/or assigns as their
interest may appear as the mortgagee (in the case of property insurance), loss payee (in the case
of business interruption/loss of rents coverage) and an additional insured (in the case of
liability insurance); (iii) contain (in the case of property insurance) a Non-Contributory Standard
Mortgagee Clause and a Lender’s Loss Payable Endorsement, or their equivalents, naming Lender as
the person to which all payments made by such insurance company shall be paid; (iv) contain a
waiver of subrogation against Lender; (v) be assigned and a carrier-certified copy thereof be
delivered to Lender; (vi) contain such provisions as Lender deems reasonably necessary or desirable
to protect its interest, including (A) endorsements providing that neither Borrower, Lender nor any
other party shall be a co-insurer under the Policies, (B) that Lender shall receive at least thirty
(30) days’ prior written notice of any modification, reduction or cancellation of any of the
Policies, (C) an agreement whereby the insurer waives any right to claim any premiums and
commissions against Lender, provided that the policy need not waive the requirement that the
premium be paid in order for a claim to be paid to the insured and (D) providing that Lender is
permitted to make payments to effect the continuation of such policy upon notice of cancellation
due to non-payment of premiums; (vii) in the event any insurance policy (except for general public
and other liability and workers compensation insurance) shall contain breach of warranty
provisions, such policy shall provide that with respect to the interest of Lender, such insurance
policy shall not be invalidated by and shall insure Lender regardless of (A) any act, failure to
act or negligence of or violation of warranties, declarations or conditions contained in such
policy by any named insured, (B) the occupancy or use of the premises for purposes more hazardous
than permitted by the terms thereof, or (C) any foreclosure or other action or proceeding taken by
Lender pursuant to any provision of the Loan Documents; and (viii) be satisfactory in form and
substance to Lender and approved by Lender as to amounts, form, risk coverage, deductibles, loss
payees and insureds. Borrower shall pay the premiums for such Policies (the “Insurance
Premiums”) as the same become due and payable and furnish to Lender evidence of the renewal of
each of the Policies together with (unless such Insurance Premiums have been paid by Lender
pursuant to Section 3.3 hereof) receipts for or other evidence of the payment of the
Insurance Premiums reasonably satisfactory to Lender. If Borrower does not furnish such evidence
and receipts at least thirty (30) days prior to the expiration of any expiring Policy, then Lender
may, but shall not be obligated to, procure such insurance and pay the Insurance Premiums therefor,
and Borrower shall reimburse Lender for the cost of such Insurance Premiums promptly on demand,
with interest accruing at the Default Rate. Borrower
shall deliver to Lender a certified copy of each Policy within thirty (30) days after its
effective date. Within thirty (30) days after request by Lender, Borrower shall obtain such
increases in the amounts of coverage required hereunder as may be reasonably requested by Lender,
taking into consideration changes in the










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value of money over time, changes in liability laws, changes in prudent customs and
practices, and the like.




     7.2 Casualty.



          7.2.1 Notice; Restoration. If the Property is damaged or destroyed,
in whole or in part, by fire or other casualty (a
“Casualty”), Borrower shall give
prompt notice thereof to Lender. Following the occurrence of a Casualty, Borrower, regardless of
whether insurance proceeds are available, shall promptly proceed to restore, repair, replace or
rebuild the Property in accordance with Legal Requirements to be of at least equal value and of
substantially the same character as prior to such damage or destruction.




          7.2.2 Settlement of Proceeds. If a Casualty covered by any of the Policies
(an “Insured Casualty”) occurs where the loss does not exceed $500,000, provided no
Default or Event of Default has occurred and is continuing, Borrower may settle and adjust any
claim without the prior consent of Lender; provided such adjustment is carried out in a competent
and timely manner, and Borrower is hereby authorized to collect and receipt for the insurance
proceeds (the “Proceeds”). In the event of an Insured Casualty where the loss equals or
exceeds $500,000 (a “Significant
Casualty”), Borrower may settle and adjust any claim
with the prior consent of Lender (which consent shall not be unreasonably withheld) unless an Event
of Default has occurred and is continuing, in which case Lender may, in its sole discretion, settle
and adjust any claim without the consent of any Borrower and agree with the insurer(s) on the
amount to be paid on the loss. The Proceeds shall be due and payable solely to Lender and held by
Lender in the Casualty/Condemnation Subaccount and disbursed in accordance herewith. If Borrower or
any party other than Lender is a payee on any check representing Proceeds with respect to a
Significant Casualty, Borrower shall immediately endorse, and shall use commercially reasonable
efforts to cause all such third parties to endorse, such check payable to the order of Lender.
Borrower hereby irrevocably appoints Lender as its attorney-in-fact, coupled with an interest, to
endorse such check payable to the order of Lender. The reasonable expenses incurred by Lender in
the settlement, adjustment and collection of the Proceeds shall become part of the Debt and shall
be reimbursed by Borrower to Lender upon demand. Notwithstanding anything to the contrary contained
herein, if in connection with a Casualty any insurance carrier makes a payment under a property
insurance Policy that Borrower proposes be treated as business or rental interruption insurance,
then, notwithstanding any designation (or lack of designation) by the insurance carrier as to the
purpose of such payment, as between Lender and Borrower, such payment shall not be treated as
business or rental interruption insurance proceeds unless Borrower has demonstrated to Lender’s
satisfaction that the remaining net Proceeds that will be received from the property insurance
carriers are sufficient to pay 100% of the cost of fully restoring the Improvements or, if such net
Proceeds are to be applied to repay the Debt in accordance with the terms of Section 7.4, that such
remaining net Proceeds will be sufficient to pay the Debt in full.




     7.3 Condemnation.



          7.3.1 Notice; Restoration. Borrower shall promptly give Lender
notice of the actual or threatened in writing commencement of any condemnation or eminent domain
proceeding affecting the Property (a
“Condemnation”) and shall deliver to Lender
copies of any




57









 




and all papers served in connection with such Condemnation. Following the occurrence of a
Condemnation, Borrower, regardless of whether an Award is available, shall promptly proceed to
restore, repair, replace or rebuild the Property in accordance with Legal Requirements to the
extent practicable to be of at least equal value and of substantially the same character (and to
have the same utility) as prior to such Condemnation.




          7.3.2 Collection of Award. If a Condemnation occurs where the award or payment in
respect thereof (an “Award”) does not exceed $500,000, provided no Event of Default has
occurred and is continuing, Borrower may make any compromise, adjustment or settlement in
connection with such Condemnation without the prior consent of Lender; provided such adjustment is
carried out in a competent and timely manner, and Borrower is hereby authorized to collect and
receipt for the Award. In the event of a Condemnation where the Award is in excess of $500,000,
Lender is hereby irrevocably appointed as Borrower’s attorney-in-fact, coupled with an interest,
with exclusive power to collect, receive and retain such Award and to make any compromise,
adjustment or settlement in connection with such Condemnation. Notwithstanding any Condemnation (or
any transfer made in lieu of or in anticipation of such Condemnation), Borrower shall continue to
pay the Debt at the time and in the manner provided for in the Loan Documents, and the Debt shall
not be reduced unless and until any Award shall have been actually received and applied by Lender
to expenses of collecting the Award and to discharge of the Debt. Lender shall not be limited to
the interest paid on the Award by the condemning authority but shall be entitled to receive out of
the Award interest at the rate or rates provided in the Note. If the Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of such Award, Lender shall have the
right, whether or not a deficiency judgment on the Note shall be recoverable or shall have been
sought, recovered or denied, to receive all or a portion of the Award (including interest, if any,
paid on the Award by the condemning authority) sufficient to pay the Debt. Borrower shall cause any
Award that is payable to Borrower to be paid directly to Lender. Lender shall hold such Award in
the Casualty/Condemnation Subaccount and disburse such Award in accordance with the terms hereof.




     7.4 Application of Proceeds or Award.



          7.4.1 Application to Restoration. If an Insured Casualty or Condemnation occurs where
(i) the loss is in an aggregate amount less than the fifteen percent (15%) of the unpaid Principal;
(ii) in the reasonable judgment of Lender, the Property can be restored within nine (9) months, and
prior to six (6) months before the Stated Maturity Date and prior to the expiration of the rental
or business interruption insurance with respect thereto, to the Property’s pre-existing condition
and utility as existed immediately prior to such Insured Casualty or Condemnation and to an
economic unit not less valuable and not less useful than the same was immediately prior to the
Insured Casualty or Condemnation, and after such restoration will adequately secure the Debt; (iii)
less than (x) thirty percent (30%), in the case of an Insured Casualty or (y) fifteen percent
(15%), in the case of a Condemnation, of the rentable area of the Improvements has been damaged,
destroyed or rendered unusable as a result of such Insured Casualty or Condemnation; (iv) Leases
demising in the aggregate at least sixty-five percent (65%) of the total rentable space in the
Property and in effect as of the date of the occurrence of such Insured Casualty or Condemnation
remain in full force and effect during and after the completion of the Restoration (hereinafter
defined); and (v) no Event of Default shall have




58









 




occurred and be then continuing, then the Proceeds or the Award, as the case may be
(after reimbursement of any expenses incurred by Lender), shall be applied to reimburse Borrower
for the cost of restoring, repairing, replacing or rebuilding the Property (the
“Restoration”), in the manner set forth herein. Borrower shall commence and diligently
prosecute such Restoration. Notwithstanding the foregoing, in no event shall Lender be obligated to
apply the Proceeds or Award to reimburse Borrower for the cost of Restoration unless, in addition
to satisfaction of the foregoing conditions, both (x) Borrower shall pay (and if required by
Lender, Borrower shall deposit with Lender in advance) all costs of such Restoration in excess of
the net amount of the Proceeds or the Award made available pursuant to the terms hereof; and (y)
Lender shall have received evidence reasonably satisfactory to it that during the
period of the Restoration, the Rents will be at least equal to the sum of the operating expenses
and Debt Service and other reserve payments required hereunder, as reasonably determined by Lender.




          7.4.2 Application to Debt. Except as provided in Section 7.4.1 above, any
Proceeds and/or Award may, at the option of Lender in its discretion, be applied to the payment of
(i) accrued but unpaid interest on the Note, (ii) the unpaid Principal and (iii) other charges due
under the Note and/or any of the other Loan Documents, or applied to reimburse Borrower for the
cost of any Restoration, in the manner set forth in Section 7.4.3 below. Any such prepayment of the
Loan shall be without any Yield Maintenance Premium, unless an Event of Default (other than an
Event of Default which is caused solely by the applicable Insured Casualty or Condemnation) has
occurred and is continuing at the time the Proceeds are received from the insurance company or the
Award is received from the condemning authority, as the case may be, in which event Borrower shall
pay to Lender an additional amount equal to the Yield Maintenance Premium, if any, that may be
required with respect to the amount of the Proceeds or Award applied to the unpaid Principal.
Notwithstanding anything to the contrary contained herein, if any Proceeds or Award are retained
and applied by Lender toward the payment of the Debt in accordance with this Section 7.4.2,
Borrower may prepay the entire outstanding Principal without payment of any Yield Maintenance
Premium provided that (x) such prepayment is made within 90 days after Lender applies such Proceeds
or Award to the Debt and (y) together with such prepayment, Borrower pay to Lender all accrued and
unpaid interest and all other sums payable under the Loan Documents.




          7.4.3 Procedure for Application to Restoration. If Borrower is entitled to
reimbursement out of the Proceeds or an Award held by Lender, such Proceeds or Award shall be
disbursed from time to time from the Casualty/Condemnation Subaccount upon Lender being furnished
with (i) evidence satisfactory to Lender of the estimated cost of completion of the Restoration,
(ii) a fixed price or guaranteed maximum cost construction contract for Restoration satisfactory to
Lender, (iii) prior to the commencement of Restoration, all immediately available funds in addition
to the Proceeds or Award that in Lender’s judgment are required to complete the proposed
Restoration, (iv) such architect’s certificates, waivers of lien, contractor’s sworn statements,
title insurance endorsements, bonds, plats of survey, permits, approvals, licenses and such other
documents and items as Lender may reasonably require and approve in Lender’s discretion, and (iv)
all plans
and specifications for such Restoration, such plans and specifications to be approved by
Lender prior to commencement of any work. Lender may, at Borrower’s expense, retain a consultant to
review and approve all requests for disbursements, which approval shall also be a condition
precedent to any disbursement. No payment made prior to the final completion of the Restoration
shall exceed ninety percent (90%) of the value of the










59









 







work performed from time to time, except that full payment shall be made for third-party
trade-payables that are complete; funds other than the Proceeds or Award shall be disbursed prior
to disbursement of such Proceeds or Award; and at all times, the undisbursed balance of such
Proceeds or Award remaining in the hands of Lender, together with funds deposited for that purpose
or irrevocably committed to the satisfaction of Lender by or on behalf of Borrower for that
purpose, shall be at least sufficient in the reasonable judgment of Lender to pay for the cost of
completion of the Restoration, free and clear of all Liens or claims for Lien. Provided no Event of
Default then exists, any surplus that remains out of the Proceeds held by Lender after payment of
such costs of Restoration shall be paid to Borrower. Any surplus that remains out of the Award
received by Lender after payment of such costs of Restoration shall, in the discretion of Lender,
be retained by Lender and applied to payment of the Debt or returned to Borrower.




8. DEFAULTS




     8.1 Events of Default. An “Event of Default” shall exist with respect to the Loan if
any of the following shall occur:



          (a) any portion of the Debt is not paid when due or Borrower shall fail to pay when due any
payment required under Sections 3.3, 3.4, 3.5, 3.6, 3.7 or 3.9 hereof (provided, however, if
adequate funds are available in the Deposit Account (or the applicable Subaccount) for such
payments the failure by Lender, Servicer or the Deposit Bank to allocate such funds into the
appropriate Subaccount shall not constitute an Event of Default);




          (b) any of the Taxes are not paid when due (unless Lender is paying such Taxes pursuant to
Section 3.3 or Section 3.11 hereof), subject to Borrower’s right to contest Taxes in accordance
with Section 5.2 hereof;




          (c) the Policies are not kept in full force and effect (unless Lender is paying the Insurance
Premiums pursuant to Section 3.3 or Section 3.11 hereof), or are not
delivered to Lender within ten (10) days of request;




          (d) a Transfer other than a Permitted Transfer occurs;




          (e) any representation or warranty made by Borrower or any Guarantor or in any Loan Document,
or in any report, certificate, financial statement or other instrument, agreement or document
furnished by Borrower or any Guarantor in connection with any Loan Document, shall be false or
misleading in any material respect as of the date the representation or warranty was made;




          (f) Borrower or any Guarantor shall (i) make an assignment for the benefit of creditors, or
(ii) shall generally not be paying its debts as they become due;




          (g) a receiver, liquidator or trustee shall be appointed for Borrower or a Guarantor; or
Borrower or a Guarantor shall be adjudicated a bankrupt or insolvent; or any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced in by, Borrower or
a Guarantor, as the case may be; or any proceeding for the dissolution or liquidation of Borrower
or a Guarantor shall be instituted; provided, however, if such appointment,




60









 




adjudication, petition or proceeding was involuntary and not consented to by Borrower
or a Guarantor, as the case may be, only upon the same not being discharged, stayed or dismissed
within sixty (60) days;




          (h) Borrower breaches any covenant contained in Sections 5. 12.1(a) — (c), and (e) 5.13, 5.15,
5.22, 5.25 or 5.28 hereof;




          (i) except as expressly permitted hereunder, the actual or threatened (in writing) alteration,
improvement, demolition or removal of all or any portion of the Improvements by or on behalf of
Borrower without the prior written consent of Lender;




          (j) an Event of Default as defined or described elsewhere in this Agreement or in any other
Loan Document occurs; or any other event shall occur or condition shall exist, if the effect of
such event or condition is to accelerate or to permit Lender to accelerate the maturity of any
portion of the Debt;




          (k) a default occurs under any term, covenant or provision set forth herein or in any other
Loan Document which specifically contains a notice requirement or grace period and such notice has
been given and such grace period has expired;




          (1) any of the assumptions contained in any substantive non-consolidation opinion, delivered
to Lender by Borrower’s counsel in connection with the Loan or otherwise hereunder, were not true
and correct as of the date of such opinion or thereafter became untrue or incorrect; provided that
in either case, no Event of Default shall be deemed to have occurred if such counsel reaffirms its
substantive non-consolidation opinion;




          (m) a default shall be continuing under any of the other terms, covenants or conditions of
this Agreement or any other Loan Document not otherwise specified in this Section 8.1, for ten (10)
days after notice to Borrower (and Guarantors, if applicable) from Lender, in the case of any
default which can be cured by the payment of a sum of money, or for thirty (30) days after notice
from Lender in the case of any other default; provided, however, that if such non-monetary default
is susceptible of cure but cannot reasonably be cured within such thirty (30)-day period, and
Borrower (or Guarantors, if applicable) shall have commenced to cure such default within such
thirty (30)-day period and thereafter diligently and expeditiously proceeds to cure the same, such
thirty (30)-day period shall be extended for an additional period of time as is reasonably
necessary for Borrower (or Guarantors, if applicable) in the exercise of due diligence to cure such
default, such additional period not to exceed sixty (60) days.




     8.2 Remedies.



          8.2.1 Acceleration. During the continuance of an Event of Default (other than
an Event of Default described in paragraph (f) or (g) of Section 8.1 above), in addition to any
other rights or remedies available to it pursuant to the Loan Documents or at law or in equity,
Lender may take such action, without written notice or demand, that Lender deems advisable to
protect and enforce its rights against Borrower and in and to the Property; including declaring the
Debt to be immediately due and payable (including unpaid interest),
Default Rate interest, Late Payment Charges, Yield Maintenance Premium and any other amounts
owing by Borrower), without notice or demand; and upon any Event of Default described in paragraph
(f) or (g) of




61









 




Section 8.1 above, the Debt (including unpaid interest, Default Rate interest, Late
Payment Charges, Yield Maintenance Premium and any other amounts owing by Borrower) shall
immediately and automatically become due and payable, without notice or demand, and Borrower hereby
expressly waives any such notice or demand, anything contained in any Loan Document to the contrary
notwithstanding.




          8.2.2 Remedies Cumulative. During the continuance of an Event of Default, all or
any one or more of the rights, powers, privileges and other remedies available to Lender against
Borrower under the Loan Documents or at law or in equity may be exercised by Lender at any time and
from time to time, whether or not all or any of the Debt shall be declared, or be automatically,
due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan Documents. Any such
actions taken by Lender shall be cumulative and concurrent and may be pursued independently,
singly, successively, together or otherwise, at such time and in such order as Lender may determine
in its discretion, to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender permitted by law, equity or contract or as set forth in the
Loan Documents. Without limiting the generality of the foregoing, Borrower agrees that if an Event
of Default is continuing, (i) to the extent permitted by applicable law, Lender is not subject to
any “one action” or “election of remedies” law or rule, and (ii) all Liens and other rights,
remedies or privileges provided to Lender shall remain in full force and effect until Lender has
exhausted all of its remedies against the Property, the Mortgage has been foreclosed, the Property
has been sold and/or otherwise realized upon in satisfaction of the Debt or the Debt has been paid
in full. To the extent permitted by applicable law, nothing contained in any Loan Document shall be
construed as requiring Lender to resort to any portion of the Property for the satisfaction of any
of the Debt in preference or priority to any other portion, and Lender may seek satisfaction out of
the entire Property or any part thereof, in its discretion.




          8.2.3 Severance. Lender shall have the right from time to time to sever the Note and
the other Loan Documents into one or more separate notes, mortgages and other security documents in
such denominations and priorities of payment and liens as Lender shall determine in its discretion
for purposes of evidencing and enforcing its rights and remedies. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a severance agreement
and such other documents as Lender shall request in order to effect the severance described in the
preceding sentence, all in form and substance reasonably satisfactory to Lender. Borrower hereby
absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or desirable to effect
such severance, Borrower ratifying all that such attorney shall do by virtue thereof.




          8.2.4 Delay. No delay or omission to exercise any remedy, right or power accruing upon
an Event of Default, or the granting of any indulgence or compromise by Lender shall impair any
such remedy, right or power hereunder or be construed as a waiver thereof, but any such remedy,
right or power may be exercised from time to time
and as often as may be deemed expedient. A waiver of one Default or Event of Default shall not
be construed to be a waiver of any subsequent Default or Event of Default or to impair any remedy,
right or power consequent thereon. Notwithstanding any other provision of this Agreement, Lender
reserves the










62









 







right to seek a deficiency judgment or preserve a deficiency claim in connection with the
foreclosure of the Mortgage to the extent necessary to foreclose on all or any portion of the
Property, the Rents, the Cash Management Accounts or any other collateral.




          8.2.5 Lender’s Right to Perform. If Borrower fails to perform any covenant or
obligation contained herein and such failure shall continue for a period of ten (l0) Business Days
after Borrower’s receipt of written notice thereof from Lender, without in any way limiting
Lender’s right to exercise any of its rights, powers or remedies as provided hereunder, or under
any of the other Loan Documents, Lender may, but shall have no obligation to, perform, or cause
performance of, such covenantor obligation, and all reasonable costs, reasonable expenses,
liabilities, penalties and fines of Lender incurred or paid in connection therewith shall be
payable by Borrower to Lender upon demand and if not paid shall be added to the Debt (and to the
extent permitted under applicable laws, secured by the Mortgage and other Loan Documents) and shall
bear interest thereafter at the Default Rate. Notwithstanding the foregoing, Lender shall have no
obligation to send notice to Borrower of any such failure.




9. SPECIAL PROVISIONS




     9.1 Sale of Note and Secondary Market Transaction.



          9.1.1 General; Borrower Cooperation.




          (a) Lender shall have the right at any time and from time to time (i) to sell or
otherwise transfer the Loan or any portion thereof or the Loan Documents or any interest therein to
one or more investors, (ii) to sell participation interests in the Loan to one or more investors or
(iii) to securitize the Loan or any portion thereof in a single asset securitization or a pooled
loan securitization of rated single or multi-class securities (the “Securities”)
secured by or evidencing ownership interests in the Note and the Mortgage (each such sale,
assignment, participation and/or securitization is referred to herein as a “Secondary Market
Transaction”). In connection with any Secondary Market Transaction, Borrower shall use all
reasonable efforts and cooperate fully and in good faith with Lender and otherwise assist Lender in
satisfying the market standards to which Lender customarily adheres or which may be reasonably
required in the marketplace or by the Rating Agencies in connection with any such Secondary Market
Transactions; including: (a) to (i) to provide such financial and other information with respect to
the Property, Borrower and its Affiliates, Manager and any tenants of the Property, (ii) provide
business plans and budgets relating to the Property and (iii) perform or permit or cause to be
performed or permitted such site inspection, appraisals, surveys, market studies, environmental
reviews and reports, engineering reports and other due diligence investigations of the Property, as
may be reasonably requested from time to time by Lender or the Rating Agencies or as may be
necessary or appropriate in connection with a Secondary Market Transaction or Exchange Act
requirements (the items prepared by Borrower or its Affiliates and provided by Borrower to Lender
pursuant to this paragraph (a) being called the “Borrower Provided Information”; and
the items otherwise provided to Lender pursuant to this paragraph (a), together with the Borrower
Provided
Information, collectively, the “Provided Information”), together, if customary,
with appropriate verification of and/or consents to the Provided Information through letters of
auditors or opinions of counsel of independent attorneys acceptable to Lender and the Rating
Agencies; (b) cause counsel to render opinions as to non-consolidation and any other





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opinion customary in securitization transactions with respect to the Property, Borrower and
its Affiliates, which counsel and opinions shall be reasonably satisfactory to Lender and the
Rating Agencies; (c) make such representations and warranties as of the closing date of
any Secondary Market Transaction with respect to the Property, Borrower and the Loan Documents as
are customarily provided in such transactions and as may be reasonably requested by Lender or the
Rating Agencies and consistent with the facts covered by such representations and warranties as
they exist on the date thereof, including the representations and warranties made in the Loan
Documents; (d) provide current certificates of good standing and qualification with respect to
Borrower from appropriate Governmental Authorities; and (e) execute such amendments to the Loan
Documents and Borrower’s organizational documents, as may be requested by Lender or the Rating
Agencies or otherwise to effect a Secondary Market Transaction, provided that nothing contained in
this subsection (e) shall result in a material economic change in the transaction, or Borrower or
Guarantor’s liabilities or obligations. Borrower’s cooperation obligations set forth herein shall
continue until the Loan has been paid in full.




          (b) Notwithstanding anything to the contrary in this Article 9 or elsewhere in the Loan
Documents, Borrower shall not be required to pay for any costs or expenses incurred in connection
with a Secondary Market Transaction (other than actual out of pocket costs incurred by Borrower
(including reasonable fees of Borrower’s counsel) up to $5,000).




          9.1.2 Use of Information. Borrower understands that all or any portion of the Provided
Information and the Required Records may be included in disclosure documents in connection with a
Secondary Market Transaction, including a prospectus or private placement memorandum (each, a
“Disclosure Document”) and may also be included in filings with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities
Act”), or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”),
or provided or made available to investors or prospective investors in the Securities, the
Rating Agencies, and service providers or other parties relating to the Secondary Market
Transaction. If the Disclosure Document is required to be revised, Borrower shall cooperate with
Lender in updating the Provided Information or Required Records for inclusion or summary in the
Disclosure Document or for other use reasonably required in connection with a Secondary Market
Transaction by providing all current information pertaining to
Borrower, Manager and the Property necessary to keep the Disclosure Document accurate and
complete in all material respects with respect to such matters.




          9.1.3 Borrower Obligations Regarding Disclosure Documents. In connection with a
Disclosure Document, Borrower shall: (a) if requested by Lender, certify in writing that Borrower
has carefully examined those portions of such Disclosure Document, pertaining to Borrower, the
Property, Manager and the Loan, and that such portions do not contain, to Borrower’s knowledge, any
intentional untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances under which they were made, not
misleading; and (b) indemnify Lender and its officers and directors for any actual losses, claims,
damages or liabilities (the “Liabilities”) to which Lender or its officers and
directors may become subject (including reimbursing all of them for any reasonable legal or other
expenses actually incurred in connection with investigating or defending the Liabilities) to the
extent and only to the extent any such loss, claim, damage or liability is based upon any
intentionally untrue statement of any material fact contained in any of










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the Borrower Provided Information; provided, however, that Borrower will be liable in
any such case under the preceding indemnification only to the extent that any such loss, claim,
damage or liability is based upon any such intentionally untrue statement made therein in reliance
upon and in conformity with information furnished to Lender by Borrower or its Affiliate related to
the Property or Borrower specifically for inclusion in the Disclosure Documents or in connection
with the underwriting of the Loan. Nothing contained herein shall impose liability upon Borrower
for any losses, claims, damages or liability arising out of or based upon an untrue statement of
any material fact (i) which could have reasonably been known to Lender or (ii) is contained in any
statement, report or document provided to Lender on behalf of Borrower by a party who is not an
Affiliate of Borrower (a “Third Party Report”), unless Borrower had actual knowledge at
the time Borrower provided such statement, report or document to Lender that such Third Party
Report contains such untrue statement.




          9.1.4 Borrower Indemnity Regarding Filings. In connection with filings under the
Exchange Act, Borrower shall (i) indemnify Lender for any Liabilities to which Lender may become
subject insofar as the Liabilities arise out of or are based upon the intentional omission or
alleged omission to state in the Borrower Provided Information a material fact required to be
stated in the Borrower Provided Information in order to make the statements in the Borrower
Provided Information, in light of the circumstances under which they were made not misleading and
(ii) reimburse Lender for any reasonable legal or other expenses actually incurred by Lender in
connection with defending or investigating the Liabilities.




          9.1.5 Indemnification Procedure. Promptly after receipt by an indemnified party under
Section 9.1.3 above or Section 9.1.4 above of notice of the commencement of any action for which a
claim for indemnification is to be made against Borrower, such indemnified party shall
notify Borrower in writing of such commencement, but the omission to so notify Borrower will not
relieve Borrower from any liability that it may have to any indemnified party hereunder except to
the extent that failure to notify causes prejudice to Borrower. If any action is brought against
any indemnified party, and it notifies Borrower of the commencement thereof, Borrower will be
entitled, jointly with any other indemnifying party, to participate therein and, to the extent that
it (or they) may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice of commencement, to assume the defense thereof with counsel
satisfactory to such indemnified party in its reasonable discretion. After notice from Borrower to
such indemnified party under this Section 9.1.5, Borrower shall not be responsible for any legal or
other expenses subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if the defendants in any
such action include both Borrower and an indemnified party, and any indemnified party shall have
reasonably concluded that there are any legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to Borrower, then the indemnified
party or parties shall have the right to select separate counsel to. assert such legal defenses and
to otherwise participate in the defense of such action on behalf of such indemnified party or
parties. Borrower shall not be liable for the expenses of more than one separate counsel unless
there are legal defenses available to it that are different from or additional to those available
to another indemnified party.




          9.1.6 Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 9.1.3 above or



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Section 9.1.4 above is for any reason held to be unenforceable by an indemnified party in
respect of any Liabilities (or action in respect thereof) referred to therein which would otherwise
be indemnifiable under Section 9.1.3 above or Section 9.1.4 above, Borrower shall contribute to the
amount paid or payable by the indemnified party as a result of such Liabilities (or action in
respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person not guilty of such fraudulent misrepresentation. In determining the amount of contribution
to which the respective parties are entitled, the following factors shall be considered: (i) the
GCM Group’s and Borrower’s relative knowledge and access to information concerning the matter with
respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement
or omission; and (iii) any other equitable considerations appropriate in the circumstances. Lender
and Borrower hereby agree that it may not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation.




          9.1.7 Rating Surveillance. Lender may, at no expense to Borrower, retain the Rating
Agencies to provide rating surveillance services on Securities.




          9.1.8 Severance of Loan. Lender shall have the right, at any time (whether prior to,
in connection with, or after any Secondary Market Transaction), with respect to all or any portion
of the Loan, to modify, split and/or sever all or any portion of the Loan as hereinafter provided.
Without limiting the foregoing, Lender may (i) cause the Note and the Mortgage to be split into a
first and second mortgage loan, (ii) create one more senior and subordinate notes (i.e., an A/B or
A/B/C structure), (iii) create multiple components of the Note or Notes (and allocate or reallocate
the principal balance of the Loan among such components) or (iv) otherwise sever the Loan into two
(2) or more loans secured by mortgages and by a pledge of partnership or membership interests
(directly or indirectly) in Borrower (i.e., a senior loan/mezzanine loan structure), in each such
case, in whatever proportion and whatever priority Lender determines; provided, however, in each
such instance the outstanding principal balance of all the Notes evidencing the Loan (or components
of such Notes) immediately after the effective date of such modification equals the outstanding
principal balance of the Loan immediately prior to such modification and the weighted average of
the interest rates for all such Notes (or components of such Notes) immediately after the effective
date of such modification equals the interest rate of the original Note immediately prior to such
modification. If requested by Lender, Borrower (and Borrower’s constituent members, if applicable,
and Guarantors) shall execute within two (2) Business Days after such request, such documentation
as Lender may reasonably request to evidence and/or effectuate any such modification or severance.




10. MISCELLANEOUS




     10.1 Exculpation. Subject to the qualifications below, Lender shall not enforce the
liability and obligation of Borrower to perform and observe the obligations contained in the Loan
Documents by any action or proceeding wherein a money judgment shall be sought against Borrower,
except that Lender may bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon its interest and
rights under the Loan Documents, or in the Property, the Rents or any other collateral given to
Lender pursuant to the Loan Documents; provided, however,
that, except as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable



66









 





against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and
in any other collateral given to Lender, and Lender shall not sue for, seek or demand any
deficiency judgment against Borrower in any such action or proceeding under or by reason of or
under or in connection with any Loan Document. The provisions of this Section 10.1 shall not,
however, (i) constitute a waiver, release or impairment of any obligation evidenced or secured by
any Loan Document; (ii) impair the right of Lender to name Borrower as a party defendant in any
action or suit for foreclosure and sale under the Mortgage; (iii) affect the validity or
enforceability of any of the Loan Documents or any guaranty made in connection with the Loan or any
of the rights and remedies of Lender thereunder; (iv) impair the right of Lender to obtain the
appointment of a receiver; (v) impair the enforcement of the Assignment of Leases; (vi) constitute
a prohibition against Lender to commence any other appropriate action or proceeding in order for
Lender to fully realize the security granted by the Mortgage or to exercise its remedies against
the Property; or (vii) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost,
expense, liability, claim or other obligation incurred by Lender (including attorneys’ fees and
costs reasonably incurred) arising out of or in connection with the following (all such liability
and obligation of Borrower for any or all of the following being referred to herein as
“Borrower’s Recourse Liabilities”):




          (a) fraud or intentional misrepresentation by Borrower or any Guarantor in
connection with obtaining the Loan;




          (b) intentional physical waste of the Property or any portion thereof, or after an
Event of Default the removal or disposal of any portion of the Property, except in the
ordinary course of business;




          (c) any Proceeds paid by reason of any Insured Casualty or any Award received in
connection with a Condemnation or other sums or payments attributable to the Property not
applied in accordance with the provisions of the Loan Documents (except to the extent that
Borrower did not have the legal right or ability, because of a bankruptcy, receivership,
similar judicial proceeding or otherwise, to direct disbursement of such sums or payments);




          (d) all Rents of the Property received or collected by or on behalf of the Borrower
during the continuance of an Event of Default are not paid to the Clearing Account (except
to the extent that such application of such funds is prevented by bankruptcy, receivership,
or similar judicial proceeding in which Borrower is legally prevented from directing the
disbursement of such sums);




          (e) misappropriation (including failure to turn over to Lender on demand following an
Event of Default) of tenant security deposits and rents collected in advance, or of funds
held by Borrower for the benefit of another party;




          (f) the failure to pay Taxes, provided Borrower shall not be liable (A) to the extent
funds to pay such amounts are available in the Tax and Insurance Subaccount and Lender
failed to pay same or (B) Rents paid during the tax payment period at issue are
insufficient to yield sufficient funds to pay such amounts;



67









 






          (g) the breach of any representation, warranty, covenant or indemnification in any
Loan Document concerning Environmental Laws or Hazardous Substances, including Section 4.21
hereof and Section 5.8 hereof, and clauses (viii) through (xi) of Section 5.30 hereof; or




          (h) a breach of the covenants set forth in (A) clauses (x) and (xxi) (with respect to
unsecured trade payables) set forth in the definition of “Special Purpose Bankruptcy Remote
Entity” on Schedule 5 or (B) clauses (xi) — (xx), clause (xxiv), clause (xxvi), and clause
(xxix) set forth in the definition of “Special Purpose Bankruptcy Remote Entity” on
Schedule 5, or (if applicable) clause (ii) in the definition of “Single Member Bankruptcy
Remote LLC” on Schedule 5, provided that if such breach results in a Springing Recourse
Event (i.e., the assets and liabilities of Borrower are substantively consolidated with
those of any other Person), then the Springing Recourse Event provisions of clause (2)
below shall control.


Notwithstanding anything to the contrary in this Agreement or any of the Loan Documents, (A)
Lender shall not be deemed to have waived any right which Lender may have under Section 506(a),
506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the Debt or to require that all collateral shall continue to secure all of the Debt in
accordance with the Loan Documents, and (B) Lender’s agreement not to pursue personal liability of
Borrower as set forth above SHALL BECOME NULL AND VOID and shall be of no further force and effect,
and the Debt shall be fully recourse to Borrower in the event that one or more of the following
occurs (each, a “Springing Recourse Event ”): (l) an Event of Default described in
Section 8.1(d) hereof shall have occurred, or (2) a breach of the covenants set forth in Section
5.13, other than the covenants set forth in clauses (x) and (xxi) (with respect to unsecured trade
payables) in the definition of “Special Purpose Bankruptcy Remote Entity” on Schedule 5 (provided,
however, with respect to a breach of any of the covenants described in clauses (xi) — (xx), clause
(xxiv), clause (xxvi), and clause (xxix) set forth in the definition of “Special Purpose Bankruptcy
Remote Entity” on Schedule 5, and clause (ii) in the definition of “Single Member Bankruptcy Remote
LLC” on Schedule 5, the foregoing recourse shall only be triggered if in connection with a pending
bankruptcy proceeding a court of competent jurisdiction has ordered the substantive consolidation
of the assets and liabilities of Borrower with any other Person), or (3) the occurrence of any
condition or event described in either Section 8.1(f)
hereof or Section 8.1(g) hereof and, with
respect to such condition or event described in Section 8.1(g) hereof, either Borrower, any
Guarantor or any Person owning an interest (directly or indirectly) in Borrower or any Guarantor
consents to, aids, solicits, supports, or otherwise cooperates or colludes to cause such condition
or event or fails to contest such condition or event.




     10.2 Brokers and Financial Advisors.



          (a) Borrower hereby represents that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders (each, a “Broker”) in connection
with the Loan. Borrower shall indemnify and hold Lender harmless from and against any and all
claims, liabilities, costs and expenses (including attorneys’ fees, whether incurred in connection
with enforcing this indemnity or defending claims of third parties) of
any kind in any way relating to or arising from a claim by any Person (including any Broker)
that such Person acted




68









 




on behalf of Borrower in connection with the transactions contemplated herein. The provisions
of this Section 10.2 shall survive the expiration and termination of this Agreement and the
repayment of the Debt.




          (b) Notwithstanding anything in Section 10.2(a) above to the contrary, Borrower hereby
acknowledges that (i) at Lender’s sole discretion, a Broker may receive further consideration from
Lender relating to the Loan or any other matter for which Lender may elect to compensate a Broker
pursuant to a separate agreement between Lender and Broker and (ii) Lender shall have no obligation
to disclose to Borrower the existence of any such agreement or the amount of any such additional
consideration paid or to be paid to a Broker whether in connection with the Loan or otherwise.




     10.3 Retention of Servicer. Lender reserves the right to retain the
Servicer to act as its agent hereunder with such powers as are specifically delegated to the
Servicer by Lender, whether pursuant to the terms of this Agreement, any pooling and servicing
agreement or similar agreement entered into as a result of a Secondary Market Transaction, the
Deposit Account Agreement or otherwise, together with such other powers as are reasonably
incidental thereto. Borrower shall pay any reasonable fees and expenses of the Servicer (i) in
connection with a release of the Property (or any portion thereof), (ii) from and after a transfer
of the Loan to any “master servicer” or “special servicer” for any reason, including without
limitation, as a result of a decline in the occupancy level of the Property, (iii) in connection
with an assumption or modification of the Loan, (iv) in connection with the enforcement of the Loan
Documents or (v) in connection with any other action or approval taken by Servicer hereunder on
behalf of Lender and for which Lender is entitled to reimbursement by Borrower hereunder (which
shall not include ongoing regular servicing fees relating to the day to day servicing of the Loan,
for which Borrower shall not be charged).



     10.4 Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and
shall continue in full force and effect so long as any of the Debt is unpaid or such longer period
if expressly set forth in this Agreement. All Borrower’s covenants and agreements in this Agreement
shall inure to the benefit of the respective legal representatives, successors and assigns of
Lender.



     10.5 Lender’s Discretion. Whenever pursuant to this Agreement or any other
Loan Document, Lender exercises any right given to it to approve or disapprove, or consent or
withhold consent, or any arrangement or term is to be satisfactory to Lender or is to be in
Lender’s discretion, the decision of Lender to approve or disapprove, to consent or withhold
consent, or to decide whether arrangements or terms are satisfactory or not satisfactory, or
acceptable or unacceptable or in Lender’s discretion shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender and shall be final and conclusive.



     10.6 Governing Law.



          (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE PROCEEDS OF THE NOTE
DELIVERED PURSUANT
HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE










69









 







HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED
HEREBY, AND IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE
AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR
THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL
BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND THE ENFORCEABILITY OF ALL LOAN DOCUMENTS AND THE
DEBT. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE
NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO § 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.




          (b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING
TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK COUNTY, NEW YORK
AND BORROWER WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER AGREES THAT SERVICE OF PROCESS UPON BORROWER
MAILED OR DELIVERED TO BORROWER AT THE ADDRESS SET FORTH IN SECTION 6.1 HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER (UNLESS LOCAL LAW REQUIRES ANOTHER METHOD
OF SERVICE), IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (i) SHALL
GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF BORROWER, (ii) MAY AT ANY TIME AND FROM
TIME TO TIME DESIGNATE AN AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL
BE DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND (iii) SHALL PROMPTLY DESIGNATE AN
AUTHORIZED AGENT IF BORROWER CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK.



     10.7 Modification, Waiver in Writing. No modification, amendment,
extension, discharge, termination or waiver of any provision of this Agreement or of any other Loan
Document, nor consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom enforcement is sought, and
then such waiver or consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as otherwise expressly provided herein, no notice to or demand on Borrower
shall entitle Borrower to any other or future notice or demand in the same,



70









 




similar or other circumstances. Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement, or exercising any
right, power, remedy or privilege hereunder, or under any other Loan Document, shall operate as or
constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and
not by way of limitation, by accepting payment after the due date of any amount payable under any
Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment
when due of all other amounts due under the Loan Documents, or to declare an Event of Default for
failure to effect prompt payment of any such other amount.




     10.8 Trial by Jury. BORROWER AND LENDER HEREBY AGREE NOT TO ELECT
A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR
ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER.



     10.9 Headings/Exhibits. The Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other
purpose. The Exhibits attached hereto, are hereby incorporated by reference as a part of the
Agreement with the same force and effect as if set forth in the body hereof.



     10.10 Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.



     10.11 Preferences. Upon the occurrence and continuance of an Event of Default, Lender
shall have the continuing and exclusive right to apply or reverse and reapply any and all payments
by Borrower to any portion of the Debt. To the extent Borrower makes a payment to Lender, or Lender
receives proceeds of any collateral, which is in whole or part subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the Debt or part thereof intended to be satisfied
shall be revived and continue in full force and effect, as if such payment or proceeds had not been
received by
Lender. This provision shall survive the expiration or termination of this Agreement and the
repayment of the Debt.



     10.12 Waiver of Notice. Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement or any other Loan
Document specifically and expressly requires the giving of notice by Lender to Borrower



71









 





and except with respect to matters for which Borrower is not, pursuant to applicable
Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the
right to receive any notice from Lender with respect to any matter for which no Loan Document
specifically and expressly requires the giving of notice by Lender to Borrower.



     10.13 Remedies of Borrower. If a claim or adjudication is made that Lender
or any of its agents, including Servicer, has acted unreasonably or unreasonably delayed acting in
any case where by law or under any Loan Document, Lender or any such agent, as the case may be, has
an obligation to act reasonably or promptly, Borrower agrees that neither Lender nor its agents,
including Servicer, shall be liable for any monetary damages, and Borrower’s sole remedy shall be
to commence an action seeking injunctive relief or declaratory judgment. Any action or proceeding
to determine whether Lender has acted reasonably shall be determined by an action seeking
declaratory judgment. Borrower specifically waives any claim against Lender and its agents,
including Servicer, with respect to actions taken by Lender or its agents on Borrower’s behalf.



     10.14 Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements, understandings and negotiations among or
between such parties, whether oral or written, are superseded by the terms of this Agreement and
the other Loan Documents.



     10.15 Offsets, Counterclaims and Defenses. Borrower hereby waives the
right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by Lender or its agents, including Servicer, or otherwise offset any obligations
to make payments required under the Loan Documents. Any assignee of Lender’s interest in and to the
Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which
Borrower may otherwise have against any assignor of such documents, and no such offset,
counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents, and any such right to interpose or assert any
such offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by
Borrower.



     10.16 Publicity. All news releases, publicity or advertising by Borrower or its
Affiliates through any media intended to reach the general public, which refers to the Loan
Documents, the Loan, Lender or any member of the GCM Group, a Loan purchaser, the Servicer or the
trustee in a Secondary Market Transaction, shall be subject to the prior written approval of Lender
(which approval shall not be unreasonably withheld, conditioned or delayed). Additionally, Lender
shall not have the right to issue any of the foregoing (other than as permitted under Article 9)
without Borrower’s approval (which approval shall not be unreasonably withheld, conditioned or
delayed).



     10.17 No Usury. Borrower and Lender intend at all times to comply with
applicable state law or applicable United States federal law (to the extent that it permits Lender
to contract for, charge, take, reserve or receive a greater amount of interest than under state
law) and that this Section 10.17 shall control every other agreement in the Loan Documents. If the
applicable law (state or federal) is ever judicially interpreted so as to render usurious any
amount called for



72









 





under the Note or any other Loan Document, or contracted for, charged, taken, reserved or
received with respect to the Debt, or if Lender’s exercise of the option to accelerate the maturity
of the Loan or any prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Borrower’s and Lender’s express intent that all excess
amounts theretofore collected by Lender shall be credited against the unpaid Principal and all
other Debt (or, if the Debt has been or would thereby be paid in full, refunded to Borrower), and
the provisions of the Loan Documents immediately be deemed reformed and the amounts thereafter
collectible thereunder reduced, without the necessity of the execution of any new document, so as
to comply with applicable law, but so as to permit the recovery of the fullest amount otherwise
called for thereunder. All sums paid or agreed to be paid to Lender for the use, forbearance or
detention of the Loan shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Debt does not exceed the maximum lawful rate from time
to time in effect and applicable to the Debt for so long as the Debt is outstanding.
Notwithstanding anything to the contrary contained in any Loan Document, it is not the intention of
Lender to accelerate the maturity of any interest that has not accrued at the time of such
acceleration or to collect unearned interest at the time of such acceleration.



     10.18
Conflict; Construction of Documents. In the event of any conflict
between the provisions of this Agreement and any of the other Loan Documents, the provisions of
this Agreement shall control. The parties hereto acknowledge that each is represented by separate
counsel in connection with the negotiation and drafting of the Loan Documents and that the Loan
Documents shall not be subject to the principle of construing their meaning against the party that
drafted them.



     10.19 No Third Party Beneficiaries. The Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in any Loan Document shall be deemed to confer
upon anyone other than the Lender and Borrower any right to insist upon or to enforce the
performance or observance of any of the obligations contained therein.



     10.20 Yield Maintenance Premium. Borrower acknowledges that (a) Lender is
making the Loan in consideration of the receipt by Lender of all interest and other benefits
intended to be conferred by the Loan Documents and (b) if payments of Principal are made to Lender
prior to the Stated Maturity Date, for any reason whatsoever, whether voluntary, as a result of
Lender’s acceleration of the Loan after an Event of Default, by operation of law or otherwise,
Lender will not receive all such interest and other benefits and may, in addition, incur costs. For
these reasons, and to induce Lender to make the Loan, Borrower agrees that, except as expressly
provided in Article 7 hereof, all prepayments, if any, whether voluntary or involuntary, will be
accompanied by the Yield Maintenance Premium. Such Yield Maintenance Premium shall be required
whether payment is made by Borrower, by a Person on behalf of Borrower, or by the purchaser at any
foreclosure sale, and may be included in any bid by Lender at such sale. Borrower further
acknowledges that (A) it is a knowledgeable real estate developer and/or investor; (B) it fully
understands the effect of the provisions of this Section 10.20, as well as the other provisions of
the Loan Documents; (C) the making of the Loan by Lender at the Interest Rate and other terms set
forth in the Loan Documents are sufficient consideration for Borrower’s obligation to pay a Yield
Maintenance Premium (if
required); and (D) Lender would not make the Loan on the terms set forth herein without the
inclusion of such provisions. Borrower also



73









 




acknowledges that the provisions of this Agreement limiting the right of prepayment and
providing for the payment of the Yield Maintenance Premium and other charges specified herein were
independently negotiated and bargained for, and constitute a specific material part of the
consideration given by Borrower to Lender for the making of the Loan except as expressly permitted
hereunder.




     10.21 Assignment. The Loan, the Note, the Loan Documents and/or Lender’s rights,
title, obligations and interests therein may be assigned by Lender and any of its successors and
assigns to any Person at any time in its discretion, in whole or in part, whether by
operation of law (pursuant to a merger or other successor in interest) or otherwise. Upon such
assignment, all references to Lender in this Loan Agreement and in any Loan Document shall be
deemed to refer to such assignee or successor in interest and such assignee or successor in
interest shall thereafter stand in the place of Lender. Borrower may not assign its rights, title,
interests or obligations under this Loan Agreement or under any of the Loan Documents.



     10.22 Certain Additional Rights of Lender. To the extent expressly permitted by this
Agreement and in accordance with the terms of this Agreement, Lender shall have:



          (i) the right to routinely consult with Borrower’s management regarding the significant
business activities and business and financial developments of Borrower, provided, however, that
such consultations shall not include discussions of environmental compliance programs or disposal
of hazardous substances. Consultation meetings should occur on a regular basis (no less frequently
than quarterly) with Lender having the right to call special meetings at any reasonable times;




          (ii) the right to examine the books and records of Borrower at any time upon reasonable
notice;




          (iii) the right to receive monthly, quarterly and year-end financial reports, including
balance sheets, statements of income, shareholder’s equity and cash flow, a management report and
schedules of outstanding indebtedness;




          (iv) the right, without restricting any other rights of Lender under this Agreement (including
any similar right), to restrict financing to be obtained with respect to the Property so long as
any portion of the Debt remains outstanding;




          (v) the right, without restricting any other right of Lender under this Agreement or the other
Loan Documents (including any similar right), to restrict, upon the occurrence of an Event of
Default, Borrower’s payments of management, consulting, director or similar fees to Affiliates of
Borrower from the Rents;




          (vi) the right, without restricting any other rights of Lender under this Agreement (including
any similar right), to approve any operating budget and/or capital budget of Borrower;




          (vii) the right, without restricting any other rights of Lender under this Agreement
(including any similar right), to approve any acquisition by Borrower of any other




74









 





significant property (other than personal property required for the day to day operation
of the Property); and




          (viii) the right, without restricting any other rights of Lender under this Agreement
(including any similar right), to restrict the transfer of interests in Borrower held by its
members, and the right to restrict the transfer of interests in such member, except for any
transfer that is a Permitted Transfer.




The rights described above may be exercised directly or indirectly by any Person that owns
substantially all of the ownership interests in Lender. The provisions of this Section are
intended to satisfy the requirement of management rights for purposes of the Department of Labor
“plan assets” regulation 29 C.F.R., Section 2510.3-101.



     10.23 Set-Off. In addition to any rights and remedies of Lender provided by this Loan
Agreement and by law, Lender shall have the right, without prior notice to Borrower, any such
notice being expressly waived by Borrower to the extent permitted by applicable  law, upon any
amount becoming due and payable by Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute
or contingent, matured or unmatured, at any time held or owing by Lender or any Affiliate thereof
to or for the credit or the account of Borrower. Lender agrees promptly to notify Borrower after
any such set-off and application made by Lender; provided that the failure to give such
notice shall not affect the validity of such set-off and application.



     10.24 Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.



[Remainder of Page Intentionally Left Blank]





75











 





     IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be
duly executed by their duly authorized representatives, all as of the day and year first
above written.



	 	 	 	 	 
	 	BRICKMAN DURHAM LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ Kathleen F. Corton
 	 
	 	 	Name:  	Kathleen F. Corton  	 
	 	 	Its: Manager 	 
	 
	 	GREENWICH CAPITAL FINANCIAL PRODUCTS,

INC., a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 




     IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be duly executed by their duly authorized representatives, all as of the day and year first
above written.



	 	 	 	 	 
	 	BRICKMAN DURHAM LLC, a Delaware

limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Its: 	 
	 
	 	GREENWICH CAPITAL FINANCIAL PRODUCTS,

INC., a Delaware corporation

 	 
	 	By:  	/s/ Stephen Jones
 	 
	 	 	Name:  	Stephen Jones        	 
	 	 	Title:  	Senior Vice President 	 



 









 






	 	 	 	 	 



Schedule 1




Intentionally Omitted




Sch. 1-1









 





Schedule 2




Exceptions to Representations and Warranties



          1. With respect to Section 4.11, under the current zoning of the Property and Permitted
Encumbrances, the uses, parking spaces and building size of the Improvements are dependent on the
uses, required parking spaces and building size of the improvements located Lot B as shown on the
Plat entitled “Final Plat — R/W Dedication and Revision of Easement -Property of the GMH Family
L.L.C. (Lot A) and Hock Plaza II, LLC (Lot B)” recorded in Plat Book 168, page 349
Durham County Registry [add reference to Declaration Of Easements and Restrictions] 1


          2. With respect to Section 4.12, the following contracts are not terminable on one (10
month’s notice or less:




               (a) Interior Plant Services (Initial Plants)



               (b) ThyssenKrupp Elevator


          3. With respect to Section 4.16, the rent under the P-l West Lease has not commenced.





 




			
	1	 	Borrower’s counsel to advise.




Sch. 2-1









 










Schedule 3




Rent Roll




(Attached)





Sch. 3-1












 






     



			
	Loan # 05-1230

Hock Plaza
	 	Rent Roll for. Hock Plaza

October 17, 2005






	 	 	 	 	 	 	 

	Date of Rent Roll:

	 	10/11/2005
	 	Property Name:
	 	Hock Plaza
	Analysis as of:

	 	10/1712005
	 	Rent Roll Header # of Units:
	 	329,399 sf






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual	 	 	Annual	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Original	 	 	 	 
	 	 	Tenant	 	 	Lease	 	 	Unit	 	 	 	 	 	 	Lease	 	 	Base	 	 	Base Rent	 	 	Annual	 	 	Annual Recovery	 	 	Total	 	 	Total	 	 	Occupancy	 	 	 	 
	Name	 	Type	 	 	Start ·	 	 	End	 	 	Status	 	 	SF	 	 	Type	 	 	Rent	 	 	PSF	 	 	Recoveries	 	 	PSF	 	 	Rent	 	 	PSF	 	 	Date	 	 	Footnotes	 
	Regular Tenants
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Duke University
	 	Local	 	 	9/1/04	 	 	 	10/31/19	 	 	Occupied	 	 	70,176	 	 	Mod Gross	 	$	1,592,744	 	 	$	22.70	 	 	$	0	 	 	$	0.00	 	 	$	1,592,744	 	 	$	22.70	 	 	 	9/4/05	 	 	 	(1	)(2)
	Duke University
	 	Local	 	 	9/4/04	 	 	 	10/31/19	 	 	Occupied	 	 	67,424	 	 	Mod Gross	 	$	1,453,356	 	 	$	21.56	 	 	$	0	 	 	$	0.00	 	 	$	1,453,356	 	 	 	21.56	 	 	 	9/4/05	 	 	 	(3	)(4)
	Duke University
	 	Local	 	 	2/5/05	 	 	 	10/31/19	 	 	Occupied	 	 	27,198	 	 	Mod Gross	 	$	545,048	 	 	$	20.04	 	 	$	0	 	 	$	0.00	 	 	$	545,048	 	 	 	20.04	 	 	 	 	 	 	 	(5	)
	Duke University
	 	Local	 	 	9/4/05	 	 	 	10/31/19	 	 	Occupied	 	 	24,143	 	 	Mod Gross	 	$	574,962	 	 	$	23.81	 	 	$	0	 	 	$	0.00	 	 	$	574,962	 	 	 	23.81	 	 	 	9/4/05	 	 	 	(6	)
	Duke University
	 	Local	 	 	2/1/05	 	 	 	10/31/19	 	 	Occupied	 	 	10,490	 	 	Mod Gross	 	$	262,670	 	 	$	25.04	 	 	$	0	 	 	$	0.00	 	 	$	262,670	 	 	 	25.04	 	 	 	2/1/05	 	 	 	(7	)(8)
	Duke University
	 	Local	 	 	10/5/05	 	 	 	10/31/19	 	 	Occupied	 	 	7,053	 	 	Mod Gross	 	$	178,777	 	 	$	25.35	 	 	$	0	 	 	$	0.00	 	 	$	178,777	 	 	 	25.35	 	 	 	10/5/05	 	 	 	(9	)(10)
	Duke University
	 	Local	 	 	11/5/05	 	 	 	10/31/19	 	 	Occupied	 	 	5,911	 	 	Mod Gross	 	$	122,358	 	 	$	20.70	 	 	$	0	 	 	$	0.00	 	 	$	122,358	 	 	 	20.70	 	 	 	 	 	 	 	(11	) (12)
	Duke University
	 	Local	 	 	8/5/05	 	 	 	10/31/19	 	 	Occupied	 	 	5,170	 	 	Mod Gross	 	$	170,453	 	 	$	32.97	 	 	$	0	 	 	$	0.00	 	 	$	170,453	 	 	 	32.97	 	 	 	8/5/05	 	 	 	(13	)(14)
	Duke University
	 	Local	 	 	8/1/05	 	 	 	10/31/19	 	 	Occupied	 	 	4,619	 	 	Mod Gross	 	$	119,144	 	 	$	25.79	 	 	$	0	 	 	$	0.00	 	 	$	119,144	 	 	 	25.79	 	 	 	 	 	 	 	(15	)(16)
	Duke University
	 	Local	 	 	11/4/05	 	 	 	 	 	 	Occupied	 	 	4,354	 	 	NNN	 	$	0	 	 	$	0.00	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	 	0.00	 	 	 	 	 	 	 	(17	)
	Duke University Health System
	 	Local	 	 	10/4/05	 	 	 	10/31/19	 	 	Occupied	 	 	48,286	 	 	Mod Gross	 	$	1,210,006	 	 	$	25.06	 	 	$	0	 	 	$	0.00	 	 	$	1,210,006	 	 	 	25.06	 	 	 	10/4/05	 	 	 	(18	)(19)
	Duke University Health System
	 	Local	 	 	7/5/05	 	 	 	10/31/19	 	 	Occupied	 	 	3,796	 	 	Mod Gross	 	$	104,921	 	 	$	27.64	 	 	$	0	 	 	$	0.00	 	 	$	104,921	 	 	 	27.64	 	 	 	7/5/05	 	 	 	(20	)(21)
	Duke University Health System
	 	Local	 	 	9/5/05	 	 	 	10/31/19	 	 	Occupied	 	 	1,073	 	 	Mod Gross	 	$	32,169	 	 	$	29.98	 	 	$	0	 	 	$	0.00	 	 	$	32,169	 	 	 	29.98	 	 	 	9/5/05	 	 	 	(22	)(23)
	Port City Java
	 	Local	 	 	10/1/05	 	 	 	10/1/15	 	 	Occupied	 	 	2,078	 	 	NNN	 	$	55,525	 	 	$	26.72	 	 	$	0	 	 	$	0.00	 	 	$	55,525	 	 	 	26.72	 	 	 	 	 	 	 	(24	) (25)(26)
	Vacant
	 	Local	 	 	 	 	 	 	 	 	 	Vacant	 	 	15,447	 	 	 	 	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	 	0.00	 	 	 	 	 	 	 	 	 
	Vacant
	 	Local	 	 	 	 	 	 	 	 	 	Vacant	 	 	14,322	 	 	 	 	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	 	0.00	 	 	 	 	 	 	 	 	 
	Vacant
	 	Local	 	 	 	 	 	 	 	 	 	Vacant	 	 	14,200	 	 	 	 	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	 	0.00	 	 	 	 	 	 	 	 	 
	Vacant
	 	Local	 	 	 	 	 	 	 	 	 	Vacant	 	 	2,239	 	 	 	 	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	 	0.00	 	 	 	 	 	 	 	 	 
	Vacant
	 	Local	 	 	 	 	 	 	 	 	 	Vacant	 	 	1,420	 	 	 	 	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	 	0.00	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Regular Tenants Tenants’
Sub-Total \PSF Average
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	329,399(86	%)	 	 	 	 	 	$	6,422,133	 	 	$	22.79	 	 	$	0	 	 	$	0.00	 	 	$	6.422,133	 	 	 	22.79	 	 	 	 	 	 	 	 	 






ES: Received Tenant Estoppel




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Base	 	 	Base Rent	 	 	 	 	 	 	Recoveries	 	 	 	 	 	 	Total	 
	 	 	SF	 	 	%	 	 	Rent	 	 	PSF	 	 	Recoveries	 	 	PSF	 	 	Total Rent	 	 	PSF	 
	Total
	 	 	329,399	 	 	 	100.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Indicated Underwriting
	 	 	281,771	 	 	 	85.54	 	 	$	6,422,133	 	 	$	22.79	 	 	$	0	 	 	$	0.00	 	 	$	6,422,133	 	 	$	22.79	 
	Occupied
	 	 	281,771	 	 	 	85.54	 	 	$	6,422.133	 	 	$	22.79	 	 	$	0	 	 	$	0.00	 	 	$	6,422,133	 	 	$	22.79	 
	Vacant
	 	 	47,628	 	 	 	14.46	 	 	 	 	 	 	 	 	 	 	$	0	 	 	$	0.00	 	 	$	0	 	 	$	0,00	 






	 		
	Page 1 of 4
	 	






 









 






			
	Loan # 05-1230

Hock Plaza
	 	Rent Roll for: Hock Plaza

October 17, 2005







	1	 	Cancer Center- department of Duke University.






	2	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck. Security Personnel, plus an administrative charge of
3% for providing such service. In addition, tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — None Parking — 185 Financial Disclosure — None
Abatements — None Guarantor — None






	3	 	With approximately 900 in staff, the Duke Clinical Research Institute (‘DCRI’) is the world’s
largest academic clinical research organization. DCRI combines the clinical expertise and
academic leadership of a premier teaching hospital with the full-service operational
capabilities of a major contract research organization. DCRI has conducted studies at more
than 3,592 sites in 63 countries, including the largest fibrinolytic trial in history. DCRI
has more than 507,700 patients enrolled and has completed 4,300 publications.






	4	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition, tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — None Parking — 178 Financial Disclosure — None
Abatements — None Guarantor — None






	5	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF, In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition, tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — Tenant may terminate lease at the end of the 7th
year with 180 days written notice. Parking — 72 Financial Disclosure — None Abatements — None
Guarantor — None






	6	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition, tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — None Parking — 64 Financial Disclosure — None
Abatements — None Guarantor — None






	7	 	Auditorium- Duke University






	8	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition, tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years,
Renewal Options — None Termination Options — None Parking — 28 Financial Disclosure — None
Abatements — None Guarantor — None






	9	 	Division of Radiology of Duke University.






	10	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition, tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — None Parking — 19 Financial Disclosure — None
Abatements — None Guarantor — None






	11	 	Early Termination Option: Tenant may terminate with 180 days notice last day of 7th lease
year. Lease shall terminate





	 		
	Page 2 of 4
	 	






 









 





			
	Loan # 05-1230

Hock Plaza
	 	Rent Roll for: Hock Plaza

October 17, 2005







	12	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata
share for operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share
(derived by dividing sf of premises by all premises then Leased by Duke) for Common Areas
including Taxes, Parking Deck, Lighting of Parking Deck, Security Personnel, plus an
administrative charge of 3% for providing such service. In addition, tenant shall pay for
upfit and equipment in Mail Room and Phone Room, the Security System and the Parking Deck
Systems amortized solely among the leases where Duke is the tenant at an annual rate of 8.75%
over a period of 14.5 years. Renewal Options — None Termination Options — Tenant may terminate
at the end of the 7th lease year with 180 days written notice. Parking — 16 Financial
Disclosure — None Abatements — None Guarantor — None






	13	 	Medical Physics — department of Duke University






	14	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition, tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — None Parking — 14 Financial Disclosure — None
Abatements — None Guarantor — None






	15	 	Duke Image Analysis Laboratory (DIAL) department of Duke University. DIAL is provides
comprehensive imaging support in research studies and clinical trials to various agencies.
Among these are pharmaceutical firms, biotechnology and medical device companies, Clinical
Research Organizations, government and academic research organizations. The capabilities of
the lab include protocol development, site training and certification, and image archival and
analysis for a variety of modalities including magnetic resonance imaging, magnetic resonance
spectroscopy, computed tomography and nuclear medicine.






	16	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition. tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — None Parking — 12 Financial Disclosure — None
Abatements — None Guarantor — None






	17	 	Nearly New Shoppe






	18	 	Part of Duke University Health System (‘DUHS’), Duke Health Technology Solutions is
responsible for developing solutions to technology issues and providing ongoing technology
support throughout DUHS.






	19	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition, tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — None Parking — 127 Financial Disclosure — None
Abatements — None Guarantor — None






	20	 	Part of Duke University Health System (‘DUHS’), Duke Health Technology Solutions is
responsible for developing solutions to technology issues and providing ongoing technology
support throughout DUHS.






	21	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes.
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition. tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — None Parking — 11 spaces Financial Disclosure -
None Abatements — None Guarantor — None






	22	 	Part of Duke University Health System (‘DUHS’), Duke Health Technology Solutions is
responsible for developing solutions to technology issues and providing ongoing technology
support throughout DUHS.





	 		
	Page 3 of 4
	 	






 









 





			
	Loan # 05-1230

Hock Plaza
	 	Rent Roll for: Hock Plaza

October 17, 2005







	23	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.25% (CPI)
every year on the first day of November. Expense Recovery — Tenant pays pro rata share for
operating expense in excess of $6.50 PSF. In addition tenant pays pro rata share (derived by
dividing sf of premises by all premises then Leased by Duke) for Common Areas including Taxes,
Parking Deck, Lighting of Parking Deck, Security Personnel, plus an administrative charge of
3% for providing such service. In addition, tenant shall pay for upfit and equipment in Mail
Room and Phone Room, the Security System and the Parking Deck Systems amortized solely among
the leases where Duke is the tenant at an annual rate of 8.75% over a period of 14.5 years.
Renewal Options — None Termination Options — None Parking — 11 spaces Financial Disclosure —
None Abatements — None Guarantor — None






	24	 	Early Termination Option: Tenant may terminate at last day of 5th lease year with 180 days
notice






	25	 	Premises is 2,078 — rent is paid on 2,221 which includes 143sf of common area.






	26	 	Type — Office Security Deposit — None Rent Steps — Annual base rent increases 2.75% (CPI)
every year on the first day of November. Expense Recovery — Net Lease Renewal Options — None
Termination Options — Tenant may terminate at the end of the 5th lease year with 180 days
written notice. Parking — 5 Financial Disclosure — None Abatements — None Guarantor — None





	 		
	Page 4 of 4
	 	







 










 





Schedule 4




Organization of Borrower



Sch. 4-1









 






HOCK PLAZA BORROWER ORGANIZATIONAL STRUCTURE









 









 








Schedule 5




Definition of Special Purpose Bankruptcy Remote Entity



A “Special Purpose Bankruptcy Remote Entity” means (x) a limited liability company that is a
Single Member Bankruptcy Remote LLC or (y) a corporation, limited partnership or limited liability
company which at all times since its formation and at all times thereafter




          (i) was and will be organized solely for the purpose of (A) owning the Property or (B)
acting as a general partner of the limited partnership that owns the Property or member of
the limited liability company that owns the Property;




          (ii) has not engaged and will not engage in any business unrelated to (A) the
ownership of the Property, (B) acting as general partner of the limited partnership that
owns the Property or (C) acting as a member of the limited liability company that owns the
Property, as applicable;




          (iii) has not had and will not have any assets other than those related to the
Property or its partnership or member interest in the limited partnership or limited
liability company that owns the Property, as applicable;




          (iv) has not engaged, sought or consented to and will not engage in, seek or consent
to any dissolution, winding up, liquidation, consolidation, merger, asset sale (except as
expressly permitted by this Agreement), transfer of partnership or membership interests or
the like, or amendment of its limited partnership agreement, articles of incorporation,
articles of organization, certificate of formation or operating agreement (as applicable);




          (v) if such entity is a limited partnership, has and Will have, as its only general
partners, Special Purpose Bankruptcy Remote Entities that are corporations;




          (vi) if such entity is a corporation, has and will have at least one Independent
Director, and has not caused or allowed and will not cause or allow the board of directors
of such entity to take any action requiring the unanimous affirmative vote of 100% of the
members of its board of directors unless all of the directors and all Independent Directors
shall have participated in such vote;




          (vii) if such entity is a limited liability company, has and will have (A) at least
one member that has been and will be a Special Purpose Bankruptcy Remote Entity that has
been and will be a corporation and such corporation is the managing member of such limited
liability company or (B) an Independent Manager;




          (viii) if such entity is a limited liability company, has and will have articles of
organization, a certificate of formation and/or an operating agreement, as applicable,
providing that (A) such entity will dissolve only upon
the bankruptcy of the managing member, (B) the vote of a majority-in-interest of the
remaining members is sufficient to continue the life of the limited liability company in
the event of such bankruptcy of the managing member and (C) if the vote of a
majority-in-interest of the



Sch. 5-1









 






remaining members to continue the life of the limited liability company following the
bankruptcy of the managing member is not obtained, the limited liability company may not liquidate
the Property without the consent of the applicable Rating Agencies for as long as the Loan is
outstanding;




          (ix) has not, and without the unanimous consent of all of its partners, directors or members
(including all Independent Managers), as applicable, will not, with respect to itself or to any
other entity in which it has a direct or indirect legal or beneficial ownership interest (A) file a
bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or
otherwise seek any relief under any laws relating to the relief from debts or the protection of
debtors generally, (B) seek or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian or any similar official for such entity or for all or any portion
of such entity’s properties, (C) make any assignment for the benefit of such entity’s creditors or
(D) take any action that might cause such entity to become insolvent;




          (x) has remained and intends to remain solvent and has maintained and intends to maintain
adequate capital in light of its contemplated business operations;




          (xi) has not failed and will not fail to correct any known misunderstanding regarding the
separate identity of such entity;




          (xii) has maintained and will maintain its accounts, books and records separate from any
other Person and will file its own tax returns;




          (xiii) has maintained and will maintain its books, records, resolutions and agreements as
official records;




          (xiv) has not commingled and will not commingle its funds or assets with those of any other
Person;




          (xv) has held and will hold its assets in its own name;




          (xvi) has conducted and will conduct its business in its name,




          (xvii) has maintained and will maintain its financial statements, accounting records and
other entity documents separate from any other Person;




          (xviii) has paid and will pay (to the extent that it has adequate funds) its own liabilities,
including the salaries of its own employees, out of its own funds and assets;




          (xix) has observed and will observe all partnership, corporate or limited liability company
formalities, as applicable;




          (xx) has maintained and will maintain an arm’s-length relationship with its Affiliates;



Sch. 5-2









 






          (xxi) (a) if such entity owns the Property, has and will have no indebtedness other than
Permitted Indebtedness, or (b) if such entity acts as the general partner of a limited partnership
which owns the Property, has and will have no indebtedness other than unsecured trade payables in
the ordinary course of business relating to acting as general partner of the limited partnership
which owns the Property which (1) do not exceed, at any time, $10,000 and (2) are paid within
thirty (30) days of
the date incurred, or (c) if such entity acts as a managing member of a limited liability
company which owns the Property, has and will have no indebtedness other than unsecured trade
payables in the ordinary course of business relating to acting as a member of the limited liability
company which owns the Property which (1) do not exceed, at any time, $10,000 and (2) are paid
within thirty (30) days of the date incurred;




          (xxii) has not and will not assume or guarantee or become obligated for the debts of any other
Person or hold out its credit as being available to satisfy the obligations of any other Person
except for the Loan;




          (xxiii) has not and will not acquire obligations or securities of its partners, members or
shareholders;




          (xxiv) has allocated and will allocate fairly and reasonably shared expenses, including shared
office space, and uses separate stationery, invoices and checks;




          (xxv) except in connection with the Loan, has not pledged and will not pledge its assets for
the benefit of any other Person;




          (xxvi) has held itself out and identified itself and will hold itself out and identify itself
as a separate and distinct entity under its own name and not as a division or part of any other
Person;




          (xxvii) has maintained and will maintain its assets in such a manner that it will not be
costly or difficult to segregate, ascertain or identify its individual assets from those of any
other Person;




          (xxviii) has not made and will not make loans to any Person;




          (xxix) has not identified and will not identify its partners, members or shareholders, or any
Affiliate of any of them, as a division or part of it;




          (xxx) has not entered into or been a party to, and will not enter into or be a party to, any
transaction with its partners, members, shareholders or Affiliates except in the ordinary course of
its business and on terms which are intrinsically fair and are no less favorable to it than would
be obtained in a comparable arm’s-length transaction with an unrelated third party;




          (xxxi) has and will have no obligation to indemnify its partners, officers, directors, members
or Special Members, as the case may be, or has such an obligation that is fully subordinated to the
Debt and will not constitute a claim against it if cash flow



Sch. 5-3









 






in excess of the amount required to pay the Debt is insufficient to pay such
obligation; and




          (xxxii) will consider the interests of its creditors in connection with all corporate,
partnership or limited liability actions, as applicable.


“Independent Director” or “Independent Manager” means (x) in the
case of a Single Member Bankruptcy Remote LLC: a natural person selected by Borrower and reasonably
satisfactory to Lender who shall not have been at the time of such individual’s appointment as an
Independent Director (or Independent Manager) of the Single Member Bankruptcy Remote LLC, does not
thereafter become while serving as an Independent Director (or Independent Manager) (except
pursuant to an express provision in the Single Member Bankruptcy Remote LLC’s limited liability
company agreement providing for the Independent Director (or Independent Manager) to become a
Special Member (defined below) upon the sole member of such Single Member Bankruptcy Remote LLC
(the “Sole Member”) ceasing to be a member in such Single Member Bankruptcy Remote LLC) and shall
not have been at any time during the preceding five (5) years (i) a shareholder/partner/member of,
or an officer or employee of, Borrower or any of its shareholders, subsidiaries or Affiliates, (ii)
a director (other than as an Independent Director) of any shareholder, subsidiary or Affiliate of
Borrower, (iii) a customer of, or supplier to, Borrower or any of its shareholders, subsidiaries or
Affiliates, (iv) a Person who Controls any such shareholder, supplier or customer, or (v) a member
of the immediate family of any such shareholder/ director/partner/member, officer, employee,
supplier or customer or of any director of Borrower (other than as an Independent Director); and
(y) in the case of a corporation, an individual selected by Borrower and reasonably satisfactory to
Lender who shall not have been at the time of such individual’s appointment as a director, does not
thereafter become while serving as an Independent Director and shall not have been at any time
during the preceding five (5) years (i) a shareholder/partner/member of, or an officer, employee,
consultant, agent or advisor of, Borrower or any of its shareholders, subsidiaries, members or
Affiliates, (ii) a director of any shareholder, subsidiary, member, or Affiliate of Borrower other
than Borrower’s general partner or managing member, (iii) a customer of, or supplier to, Borrower
or any of its shareholders, subsidiaries or Affiliates that derives more than 10% of its purchases
or income from its activities with Borrower or any Affiliate of Borrower, (iv) a Person who
Controls any such shareholder, supplier or customer, or (v) a member of the immediate family
(including a grandchild or sibling) of any such shareholder/director/partner/member, officer,
employee, supplier or customer or of any other director of Borrower’s general partner or managing
member.



“Single Member Bankruptcy Remote LLC” means a limited liability company
organized under the laws of the State of Delaware which at all times since its formation and at all
times thereafter (i) complies with the following clauses of the definition of Special Purpose
Bankruptcy Remote Entity above: (i)(A), (ii)(A), (iii), (iv), (ix), (x), (xi) and (xiii) through
(xxxii); (ii) has maintained and will maintain its accounts, books and records separate
from any other person; (iii) has and will have an operating agreement which provides that the
business and affairs of Borrower shall be managed by or under the direction of one or more managers
designated by Sole Member, and at all times there shall be at least one (1) duly appointed
Independent Manager, and the Manager(s) (or the Sole Member) will not take any action requiring the
unanimous affirmative vote of 100% of the Manager(s) (or the Sole Member) unless, at the time of
such action there is at least one (1) Independent Manager, and all of the manager(s) and all





Sch. 5-4









 








Independent Managers shall have participated in such vote; (iv) has and will have an
operating agreement which provides that, as long as any portion of the Debt remains outstanding,
(A) upon the occurrence of any event that causes Sole Member to cease to be a member of Borrower
(other than (x) upon an assignment by Sole Member of all of its limited liability company interest
in Borrower and the admission of the transferee, if permitted pursuant to the organizational
documents of Borrower and the Loan Documents, or (y) the resignation of Sole Member and the
admission of an additional member of Borrower, if permitted pursuant to the organizational
documents of Borrower and the Loan Documents), the person acting as an Independent Director of
Borrower shall, without any action of any Person and simultaneously with Sole Member ceasing to be
a member of Borrower, automatically be admitted as the sole member of Borrower (the “Special
Member”) and shall preserve and continue the existence of Borrower
without dissolution, (B) no Special Member may resign or transfer its rights as Special Member
unless (x) a successor Special Member has been admitted to Borrower as a Special Member, and (y)
such successor Special Member has also accepted its appointment as an Independent Director and (C)
except as expressly permitted pursuant to the terms of this Agreement, Sole Member may not resign
and no additional member shall be admitted to Borrower; (v) has and will have an operating
agreement which provides that, as long as any portion of the Debt remains outstanding, (A) Borrower
shall be dissolved, and its affairs shall be would up only upon the first to occur of the
following: (x) the termination of the legal existence of the last remaining member of Borrower or
the occurrence of any other event which terminates the continued membership of the last remaining
member of Borrower in Borrower unless the business of Borrower is continued in a manner permitted
by its operating agreement or the Delaware Limited Liability Company
Act (the “Act”) or (y) the entry of a decree of judicial dissolution under Section 18-802 of the Act; (B) upon the
occurrence of any event that causes the last remaining member of Borrower to cease to be a member
of Borrower or that causes Sole Member to cease to be a member of Borrower (other than (x) upon an
assignment by Sole Member of all of its limited liability company interest in Borrower and the
admission of the transferee, if permitted pursuant to the organizational documents of Borrower and
the Loan Documents, or (y) the resignation of Sole Member and the admission of an additional member
of Borrower, if permitted pursuant to the organizational documents of Borrower and the Loan
Documents), to the fullest extent permitted by law, the personal representative of such member
shall be authorized to, and shall, within 90 days after the occurrence of the event that terminated
the continued membership of such member in Borrower, agree in writing to continue the existence of
Borrower and to the admission of the personal representative or its nominee or designee, as the
case may be, as a substitute member of Borrower, effective as of the occurrence of the event that
terminated the continued membership of such member in Borrower; (C) the bankruptcy of Sole Member
or a Special Member shall not cause such member or Special Member, respectively, to cease to be a
member of Borrower and upon the occurrence of such an event, the business of Borrower shall
continue without dissolution; (D) in the event of dissolution of Borrower, Borrower shall conduct
only such activities as are necessary to wind up its affairs (including the sale of the assets of
Borrower in an orderly manner), and the assets of Borrower shall be applied in the manner, and in
the order of priority, set forth in Section 18-804 of the Act; and (E) to the fullest extent
permitted by law, each of Sole Member and the Special Members shall irrevocably waive any right or
power that they might have to cause Borrower or any of its assets to be partitioned, to cause the
appointment of a receiver for all or any portion of the assets of Borrower, to compel any sale of
all or any portion of the assets of Borrower
pursuant to any applicable law or to file a complaint or to institute any proceeding at law or
in equity to cause the dissolution, liquidation, winding up or termination of Borrower.





Sch. 5-5