TABLE OF CONTENTS           Page       I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION  1        Section 1.1 Definitions  1 Section 1.2 Principles of Construction  16        II. THE LOAN  16        Section 2.1 The Loan  16 2.1.1 Agreement to Lend and Borrow  16 2.1.2 Single Disbursement to Borrower  17 2.1.3 The Note  17 2.1.4 Use of Proceeds  17 Section 2.2 Interest Rate  17 2.2.1 Interest Rate  17 2.2.2 Intentionally Omitted  17 2.2.3 Default Rate  17 2.2.4 Interest Calculation  17 2.2.5 Usury Savings  17 Section 2.3 Loan Payments  18 2.3.1 Payment Before Maturity Date  18 2.3.2 Intentionally Omitted  18 2.3.3 Payment on Maturity Date  18 2.3.4 Late Payment Charge  18 2.3.5 Method and Place of Payment  18 Section 2.4 Prepayments  19 2.4.1 Voluntary Prepayments  19 2.4.2 Mandatory Prepayments  19 2.4.3 Prepayments After Default  19 Section 2.5 Defeasance  19 2.5.1 Total Defeasance  19 2.5.2 Partial Defeasance  21 2.5.3 Defeasance Collateral Account  24 2.5.4 Successor Borrower  24 Section 2.6 Foreign Lenders  25        III. REPRESENTATIONS AND WARRANTIES  26        Section 3.1 Borrower Representations  26 3.1.1 Organization  26 3.1.2 Proceedings  26 3.1.3 No Conflicts  26 
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           Page 3.1.4 Litigation  27 3.1.5 Agreements  27 3.1.6 Consents  27 3.1.7 Title  27 3.1.8 No Plan Assets  27 3.1.9 Compliance  27 3.1.10 Financial Information  28 3.1.11 Condemnation  28 3.1.12 Utilities and Public Access  28 3.1.13 Separate Lots  28 3.1.14 Assessments  28 3.1.15 No Defenses  28 3.1.16 Assignment of Leases  28 3.1.17 Insurance  29 3.1.18 Licenses  29 3.1.19 Flood Zone  29 3.1.20 Physical Condition  29 3.1.21 Boundaries  29 3.1.22 Leases  29 3.1.23 Filing and Recording Taxes  30 3.1.24 Single Purpose  30 3.1.25 Tax Filings  33 3.1.26 Solvency  34 3.1.27 Federal Reserve Regulations  34 3.1.28 Organizational Chart  34 3.1.29 Investment Company Act  34 3.1.30 Access/Utilities  34 3.1.31 No Bankruptcy Filing  35 3.1.32 Full and Accurate Disclosure  35 3.1.33 Foreign Person  35 3.1.34 No Change in Facts or Circumstances; Disclosure  35 3.1.35 Perfection of Accounts  35 3.1.36 Intentionally Omitted  36 3.1.37 Intentionally Omitted  36 3.1.38 Patriot Act  36 Section 3.2 Survival of Representations  36        IV. BORROWER COVENANTS  36        Section 4.1 Borrower Affirmative Covenants  36 4.1.1 Existence; Compliance with Legal Requirements  36 4.1.2 Taxes and Other Charges  36 4.1.3 Litigation  37 4.1.4 Access to Property  37 4.1.5 Intentionally Omitted  37 4.1.6 Financial Reporting  37 
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           Page 4.1.7 Title to the Property  39 4.1.8 Estoppel Statement  39 4.1.9 Leases  40 4.1.10 Alterations  41 4.1.11 Intentionally Omitted  41 4.1.12 Material Agreements  42 4.1.13 Performance by Borrower  42 4.1.14 Intentionally Omitted  42 4.1.15 Business and Operations  42 4.1.16 Loan Fees  42 4.1.17 Intentionally Omitted  42 4.1.18 Handicapped Access  42 4.1.19 Intentionally Omitted  43 4.1.20 Notice of Certain Events  43 4.1.21 Further Assurances  43 4.1.22 Taxes on Security  43 4.1.23 Stop and Shop Estoppel  44 Section 4.2 Borrower Negative Covenants  44 4.2.1 Liens  44 4.2.2 Dissolution  44 4.2.3 Debt Cancellation  44 4.2.4 Zoning  44 4.2.5 No Joint Assessment  44 4.2.6 Principal Place of Business  45 4.2.7 ERISA  45 4.2.8 Material Agreements  45 4.2.9 Intentionally Deleted  45 4.2.10 Intentionally Omitted  45        V. INSURANCE, CASUALTY AND CONDEMNATION  46        Section 5.1 Insurance  46 5.1.1 Insurance Policies  46 5.1.2 Insurance Company  50 Section 5.2 Casualty and Condemnation  50 5.2.1 Casualty  50 5.2.2 Condemnation  50 5.2.3 Casualty Proceeds  51 Section 5.3 Delivery of Net Proceeds  51 5.3.1 Minor Casualty or Condemnation  51 5.3.2 Major Casualty or Condemnation  51        VI. RESERVE FUNDS  55        Section 6.1 Required Repair Funds  55 6.1.1 Deposit of Required Repair Funds  55 
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           Page 6.1.2 Release of Required Repair Funds  55 Section 6.2 Tax Funds  56 6.2.1 Deposits of Tax Funds  56 6.2.2 Release of Tax Funds  56 Section 6.3 Insurance Funds  56 6.3.1 Deposits of Insurance Funds  56 6.3.2 Release of Insurance Funds  56 Section 6.4 Capital Expenditure Funds  57 6.4.1 Deposits of Capital Expenditure Funds  57 6.4.2 Release of Capital Expenditure Funds  57 Section 6.5 Rollover Funds   58 6.5.1 Deposits of Rollover Funds  58 6.5.2 Release of Rollover Funds  58 Section 6.6 Intentionally Deleted  59 Section 6.7 Security Interest in Reserve Funds  59 6.7.1 Grant of Security Interest  59 6.7.2 Interest on Reserve Funds  59 6.7.3 Prohibition Against Further Encumbrance  69        VII. PROPERTY MANAGEMENT  60        Section 7.1 The Management Agreement  60 Section 7.2 Prohibition Against Termination or Modification  60 Section 7.3 Replacement of Manager  60        VIII. TRANSFERS  61        Section 8.1 Prohibited Transfer or Encumbrance of Property  61 Section 8.2 Permitted Transfers  63 8.2.1 Permitted Transfer of the Property  63 8.2.2 Permitted Transfer of Interest in Borrower  64 Section 8.3 Substitute Guarantor  64        IX. SALE AND SECURITIZATION OF MORTGAGE  65        Section 9.1 Sale of Mortgage and Securitization  65 Section 9.2 Securitization Indemnification  66        X. DEFAULTS  68        Section 10.1 Event of Default  68 Section 10.2 Remedies  70 Section 10.3 Right to Cure Defaults  71 Section 10.4 Remedies Cumulative  72 
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           Page       XI. MISCELLANEOUS  72        Section 11.1 Successors and Assigns  72 Section 11.2 Lender’s Discretion  72 Section 11.3 Governing Law  73 Section 11.4 Modification, Waiver in Writing  74 Section 11.5 Delay Not a Waiver  74 Section 11.6 Notices  75 Section 11.7 Trial by Jury  76 Section 11.8 Headings  76 Section 11.9 Severability  76 Section 11.10 Preferences  77 Section 11.11 Waiver of Notice  77 Section 11.12 Remedies of Borrower  77 Section 11.13 Expenses; Indemnity  77 Section 11.14 Schedules Incorporated  78 Section 11.15 Offsets, Counterclaims and Defenses  78 Section 11.16 No Joint Venture or Partnership; No Third Party Beneficiaries  79 Section 11.17 Publicity  79 Section 11.18 Waiver of Marshalling of Assets  79 Section 11.19 Waiver of Offsets/Defenses/Counterclaims  80 Section 11.20 Conflict; Construction of Documents; Reliance  80 Section 11.21 Brokers and Financial Advisors  80 Section 11.22 Exculpation  80 Section 11.23 Prior Agreements  83 Section 11.24 Servicer  83 Section 11.25 Joint and Several Liability  83 Section 11.26 Creation of Security Interest  83 Section 11.27 Assignments and Participations  84 Section 11.28 Set-Off  84 Section 11.29 Component Notes  84 Section 11.30 Approvals; Third Parties; Conditions  85 Section 11.31 Limitation on Liability of Lender’s Officers, Employees, etc.  85 SCHEDULES       Schedule I — Rent Roll  Schedule II — Required Repairs  Schedule III — Organizational Chart  Schedule IV — Form of Subordination, Non-Disturbance and Attornment Agreement  Schedule V — Intentionally Deleted  Schedule VI — Description/Diagram of Release Parcel  
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**LOAN AGREEMENT**          THIS LOAN AGREEMENT, dated as of November 1, 2004 (as amended, restated, replaced,supplemented or otherwise modified from time to time, this **“****Agreement****”**), between EUROHYPOAG, NEW YORK BRANCH, the New York branch of a German banking corporation, having an address at 1114Avenue of the Americas, Twenty-Ninth Floor, New York, New York 10036 (together with its permittedsuccessors and assigns, **“****Lender****”**), and CEDAR-FRANKLIN VILLAGE LLC, a Delaware limitedliability company, having an address at c/o Cedar Shopping Centers Partnership, L.P., 44 SouthBayles Avenue, Suite 304, Port Washington, NY 11050 (together with its permitted successors andassigns **“****borrower****”**).          All other capitalized terms used herein shall have the respective meanings set forth inArticle I hereof.**WITNESSETH****:**          WHEREAS, Borrower desires to obtain the Loan from Lender; and          WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with theconditions and terms of this Agreement and the other Loan Documents.          NOW, THEREFORE, in consideration of the covenants set forth in this Agreement, and other goodand valuable consideration, the receipt and sufficiency of which are hereby acknowledged, theparties hereto hereby agree, represent and warrant as follows:          **I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION**          **Section 1.1 Definitions.**          For all purposes of this Agreement, except as otherwise expressly provided:          **“****Access Laws****”**shall have the meaning set forth in Section 4.1.18.          **“****Additional Collateral****”**shall mean U.S. Obligations, that provide payments on aportion of the Loan in the principal amount of $3,200,000 which are (i) paid on or prior to, but asclose as possible to, the Business Day immediately preceding all Monthly Payment Dates and otherscheduled payment dates, hereunder and (ii) in amounts equal to the scheduled payments of interestup to and including the Permitted Repayment Date (including, the payment of principal in the amountof $3,200,000.00 on the Permitted Repayment Date), and all other payments, if any, required, underthe Loan Documents for servicing fees, and other similar charges.          **“****Accounts****”**shall have the meaning set forth in Section 3.1.35(a).          **“****Acquired Property Statements****”**shall have the meaning set forth in Section9.1(c)(i).
 

 
          **“****Affiliate****”**shall mean, as to any Person, any other Person that, directly orindirectly, owns more than forty percent (40%) of, is in control of, is controlled by or is undercommon ownership or control with such Person or is a director or officer of such Person or of anAffiliate of such Person. As used in this definition, the term “control” means the possession,directly or indirectly, of the power to direct or cause the direction of the management, policiesor activities of a Person, whether through ownership of voting securities, by contract orotherwise.          **“****Affiliated Manager****”**shall mean any managing agent in which Borrower, BorrowerPrincipal, any SPC Party (if any) or any Affiliate of such Persons has, directly or indirectly, anylegal, beneficial or economic interest.          **“****Agent****”**shall mean PNC Bank, National Association and any successor EligibleInstitution thereto.          **“****Allocated Loan Amount****”**shall mean with respect to the release of the Release Parcelpursuant to Section 2.5.2, $4,785,000.          **“****ALTA****”**shall mean American Land Title Association, or any successor thereto.          **“****Alteration Threshold****”**shall mean an amount equal to five percent (5%) of the originalprincipal amount of the Loan.          **“****Annual Budget****”**shall mean the operating and capital budget for the Property settingforth Borrower’s good faith estimate of Gross Income from Operations, Operating Expenses, andCapital Expenditures for the applicable Fiscal Year.          **“****Approved Property Manager****”**shall mean (i) Cedar Shopping Centers Partnership L.P. , aDelaware limited partnership, for so long as that entity is an Affiliate or sole member of Borrowerand controlled by Cedar Shopping Centers, Inc., a Maryland corporation or (ii) a reputable andexperienced management organization possessing experience in managing properties similar in size,scope and value to the Property, provided that with respect to an Approved Property Manager underclause (ii), (A) prior to a Securitization, Borrower shall have obtained the prior written consentof Lender for such entity, which consent shall not be unreasonably withheld and (B) after aSecuritization, Borrower shall have obtained prior written confirmation from the Rating Agenciesthat management of the Property by such entity will not, in and of itself, cause a downgrade,withdrawal or qualification of the then current ratings of the Securities issued pursuant to theSecuritization.          **“****Assignment of Leases****”**shall mean that certain first priority Assignment of Leases andRents, dated as of the date hereof, from Borrower, as assignor, to Lender, as assignee, as the samemay be amended, restated, replaced, supplemented or otherwise modified from time to time.          **“****Assignment of Management Agreement****”**shall mean that certain Assignment of ManagementAgreement and Subordination of Management Fees dated the date hereof among Borrower, Manager andLender, as the same may be amended, restated, replaced, supplemented or otherwise modified fromtime to time.
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          **“****Award****”**shall mean any compensation paid by any Governmental Authority in connectionwith a Condemnation in respect of all or any part of the Property.          **“****Bankruptcy Code****”**shall mean Title 11 of the United States Code entitled “Bankruptcy”,as amended from time to time, and any successor statute or statutes and all rules and regulationsfrom time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy,insolvency or creditors’ rights.          **“****Basic Carrying Costs****”**shall mean the sum of the following costs associated with theProperty for the relevant Fiscal Year or payment period: (i) Taxes and (ii) Insurance Premiums.          **“****Borrower Principal****”**shall mean Cedar Shopping Centers Partnership, L.P.          **“****Business Day****”**shall mean any day other than a Saturday, a Sunday or a legal holidayon which national banks are not open for general business in (i) the State of New York, (ii) thestate where the corporate trust office of the Trustee is located, or (iii) the state where theservicing offices of the Servicer are located.          **“****Capital Expenditures****”**for any period shall mean amounts expended for replacements andalterations to the Property and required to be capitalized according to GAAP.          **“****Capital Expenditure Funds****”**shall have the meaning set forth in Section 6.4.1.          **“****Capital Expenditures Work****”**shall mean any labor performed or materials installed inconnection with any Capital Expenditure.          **“****Cash Management Agreement****”**shall mean that certain Cash Management Agreement of evendate herewith among Lender, Borrower, Manager and Agent.          **“****Casualty****”**shall mean the occurrence of any casualty, damage or injury, by fire orotherwise, to the Property or any part thereof.          **“****Casualty Consultant****”**shall have the meaning set forth in Section 5.3.2(c).          **“****Casualty Retainage****”**shall have the meaning set forth in Section 5.3.2(d).          **“****Closing Date****”**shall mean the date of funding the Loan.          **“****Code****”**shall mean the Internal Revenue Code of 1986, as amended, and as it may befurther amended from time to time, any successor statutes thereto, and applicable U.S. Departmentof Treasury regulations issued pursuant thereto in temporary or final form.          **“****Condemnation****”**shall mean a temporary or permanent taking by any GovernmentalAuthority as the result or in lieu or in anticipation of the exercise of the right of condemnationor eminent domain, of all or any part of the Property, or any interest therein or right accruingthereto, including any right of access thereto or any change of grade affecting the Property or anypart thereof.
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          **“****Control****”**shall mean the power to direct the management and policies of a RestrictedParty, directly or indirectly, whether through the ownership of voting securities or otherbeneficial interests, by contract or otherwise.          **“****Debt****”**shall mean the outstanding principal amount of the Loan together with allinterest accrued and unpaid thereon and all other sums (including the Yield Maintenance Premium)due to Lender in respect of the Loan under the Note, this Agreement, the Mortgage, theEnvironmental Indemnity or any other Loan Document.          **“****Debt Service****”**shall mean, with respect to any particular period of time, scheduledinterest payments under the Note.          **“****Debt Service Coverage Ratio****”**shall mean a ratio for the applicable period in which:     (i) the numerator is the Net Cash Flow for such period as set forth in thefinancial statements required in accordance with this Agreement; and     (ii) the denominator is the Debt Service due for such period.          **“****Default****”**shall mean the occurrence of any event hereunder or under any other LoanDocument which, but for the giving of notice or passage of time, or both, would be an Event ofDefault.          **“****Default Rate****”**shall mean, with respect to the Loan, a rate per annum equal to thelesser of (i) the maximum rate permitted by applicable law, or (ii) five percent (5%) above theInterest Rate.          **“****Defeasance Collateral****”**shall mean the Total Defeasance Collateral or the PartialDefeasance Collateral, as the case may be.          **“****Defeasance Collateral Account****”**shall have the meaning set forth in Section 2.5.3.          **“****Defeasance Date****”**shall mean the Total Defeasance Date or the Partial Defeasance Date,as the case may be.          **“****Defeasance Event****”**shall mean a Total Defeasance Event or a Partial Defeasance Event,as the case may be.          **“****Defeased Note****”**shall have the meaning set forth in Section 2.5.2(a)(iv)hereof.          **“****Disclosure Document****”**shall have the meaning set forth in Section 9.2(a).          **“****Disclosure Document Date****”**shall have the meaning set forth in Section9.1(c)(iv).
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          **“****Eligible Account****”**shall mean a separate and identifiable account from all other fundsheld by the holding institution that is either (i) an account or accounts maintained with a federalor state-chartered depository institution or trust company which complies with the definition ofEligible Institution or (ii) a segregated trust account or accounts maintained with a federal orstate chartered depository institution or trust company acting in its fiduciary capacity which, inthe case of a state chartered depository institution or trust company is subject to regulationssubstantially similar to 12 C.F.R. § 9.10(b), having in either case a combined capital and surplusof at least $50,000,000.00.00 and subject to supervision or examination by federal and stateauthority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or otherinstrument.          **“****Eligible Institution****”**shall mean a depository institution or trust company insured bythe Federal Deposit Insurance Corporation the short term unsecured debt obligations or commercialpaper of which are rated at least A-1 by S&P and having at least the equivalent rating from one ofthe two other Rating Agencies in the case of accounts in which funds are held for thirty (30) daysor less or, in the case of Letters of Credit or accounts in which funds are held for more thanthirty (30) days, the long term unsecured debt obligations of which are rated at least “AA” byFitch and S&P and “Aa2” by Moody’s.          **“****Environmental Indemnity****”**shall mean that certain Environmental Indemnity Agreement,dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan for thebenefit of Lender.          **“****Equipment****”**shall have the meaning set forth in the granting clause of the Mortgage.          **“****ERISA****”**shall have the meaning set forth in Section 4.2.7.          **“****Event of Default****”**shall have the meaning set forth in Section 10.1.          **“****Exchange Act****”**shall have the meaning set forth in Section 9.2(a).          **“****Exchange Act Filing****”**shall have the meaning set forth in Section 9.1(c)(vii).          **“****Executive Order****”**shall have the meaning set forth in the definition of “ProhibitedPerson”.          **“****Exxon Remediation****”**shall mean those certain remediation efforts at the Property madeor to be made by Exxon Mobil in connection with a petroleum release from an underground storagetank located on the Property, which remediation efforts include that certain Phase III RemedialAction Plan and that certain Phase VI Remedy Implementation Plan developed by Groundwater &Environmental Services, Inc. in accordance with Environmental Law as enforced by the New JerseyDepartment of Environmental Protection.          **“****Fiscal Year****”**shall mean each twelve month period commencing on January 1 and endingon December 31 during each year of the term of the Loan.          **“****Fitch****”**shall mean Fitch, Inc. and its successors.
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          **“****GAAP****”**shall mean generally accepted accounting principles set forth in the opinionsand pronouncements of the Accounting Principles Board and the American Institute of CertifiedPublic Accountants and statements and pronouncements of the Financial Accounting Standards Board(or agencies with similar functions of comparable stature and authority within the accountingprofession), or in such other statements by such entity as may be in general use by significantsegments of the U.S. accounting profession.          **“****Governmental Authority****”**shall mean any court, board, agency, commission, office orauthority of any nature whatsoever or any governmental unit (federal, state, county, district,municipal, city or otherwise) whether now or hereafter in existence.          **“****Gross Income from Operations****”**shall mean, for any period, all income, computed inaccordance with GAAP, derived from the ownership and operation of the Property from whatever sourceduring such period, including, but not limited to, Rents, utility charges, escalations, forfeitedsecurity deposits, interest on credit accounts, service fees or charges, license fees, parkingfees, rent concessions or credits, and other pass-through or reimbursements paid by tenants underthe Leases of any nature but excluding Rents from month-to-month tenants or tenants that aredebtors in any proceeding under the Bankruptcy Code, sales, use and occupancy or other taxes onreceipts required to be accounted for by Borrower to any Governmental Authority, refunds anduncollectible accounts, sales of furniture, fixtures and equipment, Net Proceeds (other thanbusiness interruption or other loss of income insurance), and any disbursements to Borrower fromthe Tax Funds, Insurance Funds, the Capital Expenditure Funds, the Rollover Funds, or any otherescrow fund established by the Loan Documents.          **“****Guaranties****”**shall have the meaning set forth in Section 8.3 hereof.          **“****Guarantor****”**shall mean Cedar Shopping Centers Partnership, L.P.          **“****Guaranty****”**shall mean that certain Guaranty of even date herewith from Guarantor forthe benefit of Lender.          **“****Improvements****”**shall have the meaning set forth in the granting clause of theMortgage.          **“****Indebtedness****”**shall mean, for any Person, without duplication: (i) all indebtednessof such Person for borrowed money, for amounts drawn under a letter of credit, or for the deferredpurchase price of property for which such Person or its assets is liable, (ii) all unfunded amountsunder a loan agreement, letter of credit, or other credit facility for which such Person would beliable if such amounts were advanced thereunder, (iii) all amounts required to be paid by suchPerson as a guaranteed payment to partners or a preferred or special dividend, including anymandatory redemption of shares or interests, (iv) all indebtedness guaranteed by such Person,directly or indirectly, (v) all obligations under leases that constitute capital leases for whichsuch Person is liable, and (vi) all obligations of such Person under interest rate swaps, caps,floors, collars and other interest hedge agreements, in each case whether such Person is liablecontingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligationssuch Person otherwise assures a creditor against loss.
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          **“****I&G Funds****”**shall mean the constituent entities (and their wholly owned subsidiaries)from time to time of the fund marketed as the “J.P. Morgan U.S. Real Estate Income and GrowthFund,” of which JPMorgan Investment Management Inc. (or JPMorgan Chase Bank, or any of theiraffiliates) and/or their successors and assigns is the investment advisor and, as of the datehereof includes, without limitation, JPM I&G Domestic REIT, Inc., J.P. Morgan U.S. Real EstateIncome and Growth Direct, LP, J.P. Morgan U.S. Real Estate Income and Growth Corp. (Cayman), J.P.Morgan U.S. Real Estate Income and Growth Finance Corp (Cayman), J.P. Morgan U.S. Real EstateIncome and Growth Investment Corp (Cayman), J.P. Morgan U.S. Real Estate Income and Growth GmBH &Co. KG, and J.P. Morgan U.S. Real Estate and Growth Domestic, LP.          **“****Indemnified Liabilities****”**shall have the meaning set forth in Section11.13(b).          **“****Independent Director****”**shall have the meaning set forth in Section 3.1.24(p).          **“****Interest Rate****”**shall mean a rate per annum equal to four and eighty-one hundredthspercent (4.81%).          **“****Insolvency Opinion****”**shall mean that certain bankruptcy non-consolidation opinionletter, dated the date hereof, rendered by Lavenfeld Pearlstein, LLC in connection with the Loan.          **“****Insurance Funds****”**shall have the meaning set forth in Section 6.3.1.          **“****Insurance Premiums****”**shall have the meaning set forth in Section 5.1.1(b).          **“****Lease****”**shall mean any lease, sublease or subsublease, letting, license, concession orother agreement (whether written or oral and whether now or hereafter in effect) pursuant to whichany Person is granted a possessory interest in, or right to use or occupy all or any portion of anyspace in the Property, and every modification, amendment or other agreement relating to such lease,sublease, subsublease, or other agreement entered into in connection with such lease, sublease,subsublease, or other agreement and every guarantee of the performance and observance of thecovenants, conditions and agreements to be performed and observed by the other party thereto.          **“****Legal Requirements****”**shall mean all federal, state, county, municipal and othergovernmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees andinjunctions of Governmental Authorities affecting Borrower or the Property or any part thereof orthe construction, use, alteration or operation thereof, or any part thereof, whether now orhereafter enacted and in force, including, without limitation, the Americans with Disabilities Actof 1990, and all permits, licenses and authorizations and regulations relating thereto, and allcovenants, agreements, restrictions and encumbrances contained in any instruments, either of recordor known to Borrower, at any time in force affecting the Property or any part thereof, including,without limitation, any which may (i) require repairs, modifications or alterations in or to theProperty or any part thereof, or (ii) in any way limit the use and enjoyment thereof.          **“****Lender Group****”**shall have the meaning set forth in Section 9.2(b).
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          **“****Lender Indemnitees****”**shall have the meaning set forth in Section 11.13(b).          **“****Liabilities****”**shall have the meaning set forth in Section 9.2(b).          **“****Lien****”**shall mean any mortgage, deed of trust, lien, pledge, hypothecation,assignment, security interest, or any other encumbrance or charge, on or affecting the Property orany portion thereof or Borrower, or any interest therein, including, without limitation, anyconditional sale or other title retention agreement, any financing lease having substantially thesame economic effect as any of the foregoing, the filing of any financing statement, andmechanic’s, materialmen’s and other similar liens and encumbrances.          **“****Loan****”**shall mean the loan in the original principal amount of Forty-Three MillionFive Hundred Thousand and No/100 Dollars ($43,500,000.00) made by Lender to Borrower pursuant tothis Agreement evidenced by the Note and secured by the Mortgage, together with all sums due or tobecome due thereunder.          **“****Loan Documents****”**shall mean, collectively, this Agreement, the Note, the Mortgage, theAssignment of Leases, the Cash Management Agreement, the Environmental Indemnity, the Guaranty, theSupplemental Guaranty, the Assignment of Management Agreement as well as all other documents now orhereafter executed and/or delivered in connection with the Loan.          **“****Loan to Value Ratio****”**shall mean the ratio, as of a particular date, in which thenumerator is equal to the outstanding principal balance of the Debt and the denominator is equal tothe appraised value of the Property based on a FIRREA-conforming appraisal in form and substancesatisfactory to Lender, as determined by Lender in its sole and absolute discretion.          **“****Major Lease****”**shall mean any Lease covering 10,000 square feet or more at theProperty, provided that the calculations set forth in this definition of Major Lease shall be madebased on theaggregate square footage leased, by any single Tenant and/or Affiliate of such Tenant, whetherpursuant to a single Lease or otherwise.          **“****Management Agreement****”**shall mean that certain management agreement entered into byand between Borrower and the Manager, pursuant to which the Manager is to provide management andother services with respect to the Property.          **“****Manager****”**shall mean Calarese Properties, Inc., a Massachusetts corporation, or anyother manager approved in accordance with the terms and conditions of the Loan Documents.          **“****Material Adverse Effect****”**shall mean any material adverse effect upon (i) the businessoperations, economic performance, assets, financial condition, equity, contingent liabilities,prospects, material agreements or results of operations of Borrower, Guarantor or the Property,(ii) the ability of Borrower or Guarantor to perform, in all material respects, its obligationsunder each of the Loan Documents, (iii) the enforceability or validity of any Loan Document, theperfection or priority of any Lien created under any Loan Document or the remedies of the Lenderunder any Loan Document or (iv) the value of, or cash flow from the Property or the operationsthereof.
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          **“****Material Agreements****”**shall mean each contract and agreement relating to theownership, management, development, use, operation, leasing, maintenance, repair or improvement ofthe Property, other than the Management Agreement and the Leases or other contract and/or agreementthat is material to the use and operation of the Property or to Borrower.          **“****Maturity Date****”**shall mean November 1, 2011 or such other date on which the finalpayment of principal of the Note becomes due and payable as therein or herein provided, whether atsuch stated maturity date, by declaration of acceleration, or otherwise.          **“****Maximum Legal Rate****”**shall mean the maximum nonusurious interest rate, if any, that atany time or from time to time may be contracted for, taken, reserved, charged or received on theindebtedness evidenced by the Note and as provided for herein or the other Loan Documents, underthe laws of such state or states whose laws are held by any court of competent jurisdiction togovern the interest rate provisions of the Loan.          **“****Minimum Disbursement Amount****”**shall mean Twenty-Five Thousand and No/100 Dollars($25,000.00).          **“****Monthly Debt Service Payment Amount****”**shall mean an amount equal to the interest onthe outstanding principal balance of the Loan that accrues at the Interest Rate during eachcalendar month during the term of the Loan, calculated in the manner set forth herein.          **“****Monthly Payment Date****”**shall mean the first (1st) day of every calendar monthoccurring during the term of the Loan, provided, however, that Lender shall have the right at anytime prior to Securitization of the Loan to change the Monthly Payment Date to any other day (orsuch other day of a calendar month selected by Lender, in its sole and absolute discretion, tocollect debt service payments under loans which it makes and securitizes) upon notice to Borrower(in which event such change shall then be deemed effective) and, if requested by Lender, Borrowershall promptly execute an amendment to this Agreement to evidence such change, at no cost toBorrower (except that Borrower shall pay its own legal fees).          **“****Moody’s****”**shall mean Moody’s Investors Service, Inc.          **“****Mortgage****”**shall mean that certain first priority Mortgage and Security Agreement,dated the date hereof, executed and delivered by Borrower as security for the Loan and encumberingthe Property, as the same may be amended, restated, replaced, supplemented or otherwise modifiedfrom time to time.          **“****Net Cash Flow****”**shall mean, for any period, the amount obtained by subtractingOperating Expenses for such period from Gross Income from Operations for such period.          **“****Net Proceeds****”**shall mean: (i) the net amount of all insurance proceeds payable as aresult of a Casualty to the Property, after deduction of reasonable costs and expenses (including,but not limited to, reasonable attorneys’ fees), if any, in collecting such insurance proceeds, or(ii) the net amount of the Award, after deduction of reasonable costs and expenses (including, butnot limited to, reasonable attorneys’ fees), if any, in collecting such Award.
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          **“****Net Proceeds Deficiency****”**shall have the meaning set forth in Section5.3.2(f).          **“****Note****”**shall have the meaning set forth in Section 2.1.3.          **“****Notice****”**shall have the meaning set forth in Section 11.6.          **“****Officer’s Certificate****”**shall mean a certificate delivered to Lender by Borrower whichis signed by an authorized senior officer of Borrower.          **“****Operating Agreements****”**shall mean any material covenants, restrictions or agreementsof record relating to the construction, operation or use of the Property.          **“****Operating Expenses****”**shall mean, for any period, the total of all expenditures,computed on a cash accounting basis, of whatever kind during such period relating to the operation,maintenance and management of the Property that are incurred on a regular monthly or other periodicbasis, including without limitation, utilities, ordinary repairs and maintenance (which ordinaryrepairs and maintenance for the purposes of this definition shall be no less than an assumedexpense of $54,062.50 per month), insurance, license fees, property taxes and assessments,advertising expenses, management fees, payroll and related taxes, computer processing charges,tenant improvements, leasing commissions and normalized capital expenditures (which tenantimprovements, leasing commissions and normalized capital expenditures for the purposes of thisdefinition shall be no less than an assumedexpense of $413,579.00 per month), operational equipment or other lease payments as approved byLender, and other similar costs, but excluding from such calculation depreciation, Debt Service andinterest costs.          **“****Other Charges****”**shall mean all ground rents, maintenance charges, impositions otherthan Taxes, and any other charges, including, without limitation, vault charges and license feesfor the use of vaults, chutes and similar areas adjoining the Property, now or hereafter levied orassessed or imposed against the Property or any part thereof.          **“****Partial Defeasance Collateral****”**shall mean U.S. Obligations, which provide payments(i) on or prior to, but as close as possible to, the Business Day immediately preceding all MonthlyPayment Dates and other scheduled payment dates, if any, under the Defeased Note after the PartialDefeasance Date and up to and including the Permitted Prepayment Date, and (ii) in amounts equal toor greater than the Scheduled Partial Defeasance Payments relating to such Monthly Payment Datesand other scheduled payment dates.          **“****Partial Defeasance Date****”**shall have the meaning set forth in Section 2.5.2(a)(i).          **“****Partial Defeasance Event****”**shall have the meaning set forth in Section 2.5.2(a).          **“****Patriot Act****”**shall mean collectively all laws relating to terrorism or moneylaundering, including Executive Order No. 13224 on Terrorist Financing (effective September 24,2001) and the Uniting and Strengthening America by Providing Appropriate Tools Required toIntercept and Obstruct Terrorism Act of 2001 (Public Law 107 56).
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          **“****Permitted Encumbrances****”**shall mean, collectively, (i) the Liens and securityinterests created by the Loan Documents, (ii) all Liens, encumbrances and other matters expresslyset forth onSchedule A or Schedule B of the Title Insurance Policy, (iii) Liens, if any, for Taxes imposed byany Governmental Authority not yet due or delinquent, (iv) such other title and survey exceptionsas Lender has approved or may approve in writing in Lender’s sole discretion, and (v) easementsgranted by Borrower from and after the date hereof in the ordinary course of business and approvedby Lender, which approval shall not be unreasonably withheld.          **“****Permitted Investments****”**shall have the meaning set forth in the Cash ManagementAgreement.          **“****Permitted Prepayment Date****”**shall have the meaning set forth in Section 2.4.1.          **“****Permitted Transferee****”**shall mean a corporation, partnership or limited liabilitycompany (i) acceptable to Lender in its sole discretion, (ii) that qualifies as a single purpose,bankruptcy remote entity under criteria established by the Rating Agencies and (iii) whose counselhas delivered to Lender a non-consolidation opinion reasonably acceptable to Lender and the RatingAgencies.          **“****Person**”**shall mean any individual, corporation, partnership, limited liabilitycompany, joint venture, estate, trust, unincorporated association, any other entity, any federal,state, county or municipal government or any bureau, department or agency thereof and any fiduciaryacting in such capacity on behalf of any of the foregoing.          **“****Policy****”**shall have the meaning set forth in Section 5.1.1(b).          **“****Prepayment Date****”**shall mean the date on which the Loan is prepaid in accordance withthe terms hereof.          **“****Prohibited Person****”**shall mean any Person:     (i) listed in the Annex to, or is otherwise subject to the provisions of, theExecutive Order No. 13224 on Terrorist Financing, effective September 24, 2001, andrelating to Blocking Propertyand Prohibiting Transactions With Persons Who Commit, Threaten to Commit, orSupport Terrorism (the **“****ExecutiveOrder****”**);     (ii) that is owned or controlled by, or acting for or on behalf of, any Person orentity that is listed in the Annex to, or is otherwise subject to the provisions of theExecutive Order;     (iii) with whom Lender is prohibited from dealing or otherwise engaging in anytransaction by any terrorism or money laundering Law, including the Executive Order;     (iv) who commits, threatens or conspires to commit or supports “terrorism” as definedin the Executive Order;
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     (v) that is named as a “specially designated national and blocked person” on the mostcurrent list published by the U.S. Treasury Department Office of Foreign Assets Control atits official website or at any replacement website or other replacement officialpublication of such list; or     (vi) who is an Affiliate of a Person listed above.          **“****Prohibited Transfer****”**shall have the meaning specified in Section 8.1(a).          **“****Property****”**shall mean the parcel of real property, the Improvements thereon and allpersonal property owned by Borrower and encumbered by the Mortgage, together with all rightspertaining to such property and Improvements, all as more particularly described in the grantingclauses of the Mortgage.          **“****Qualified Transferee****”**shall mean any one of the following Persons or wholly ownedsubsidiaries of such Person:     (i) a pension fund, pension trust or pension account that (a) has total real estateassets of at least One Billion Dollars and (b) is managed by a Person who controls atleast One Billion Dollars of real estate equity assets; or     (ii) a pension fund advisor who (a) immediately prior to such transfer, controls atleast One Billion Dollars of real estate equity assets and (b) is acting on behalf of oneor more pension funds that, in the aggregate, satisfy therequirements of clause (i) ofthis definition; or     (iii) an insurance company which is subject to supervision by the insurancecommissioner, or a similar official or agency, of a state or territory of the UnitedStates (including the District of Columbia) (a) with a net worth, as of a date no more thansix (6) months prior to the date of the transfer of at least Five Hundred Million Dollarsand (b) who, immediately prior to such transfer, controls real estate equity assetsof at least One Billion Dollars; or     (iv) a corporation organized under the banking laws of the United States or any stateor territory of the United States (including the District of Columbia) (a) with a combinedcapital and surplus of at least Five Hundred Million Dollars and (b) who, immediatelyprior to such transfer, controls real estate equity assets of at least OneBillion Dollars; or     (v) any Person (a) with a long-term unsecured debt rating from the Rating Agencies ofat least investment grade or (b) who (i) directly or indirectly owns or operates at leasttwelve (12) regional shopping centers totaling at least six million square feet of grossleasable area, (ii) has a net worth, as of a date no more than six (6) months priorto the date of such transfer, of at least Five Hundred Million Dollars and (iii)immediately prior to such transfer, controls real estate equity assets of at least OneBillion Dollars.
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          **“****Rating Agencies****”**shall mean, prior to the final Securitization of the Loan, each ofS&P, Moody’s and Fitch, or any other nationally-recognized statistical rating agency which has beendesignated by Lender and, after the final Securitization of the Loan, shall mean any of theforegoing that have rated any of the Securities.          **“****Rating Agency Confirmation****”**shall mean a written affirmation from each of the RatingAgencies that the credit rating of the Securities by such Rating Agency immediately prior to theoccurrence of the event with respect to which such Rating Agency Confirmation is sought will not bequalified, downgraded or withdrawn as a result of the occurrence of such event, which affirmationmay be granted or withheld in such Rating Agency’s sole and absolute discretion.          **“****Registration Statement****”**shall have the meaning set forth in Section 9.2(b).          **“****Release Date****”**shall mean the earlier to occur of (i) the fourth (4th) anniversary ofthe Closing Date and (ii) the date that is two (2) years from the “startup day” (within the meaningof Section 860G(a)(9) of the Code) of the REMIC Trust established in connection with the lastSecuritization involving any portion of this Loan.          **“****Release Parcel****”**shall mean that certain portion of the Property comprisingapproximately 50,000 square feet of office space more particularlyshown on Schedule VI attachedhereto.          **“****REMIC Trust****”**shall mean a **“**real estate mortgage investment conduit” within themeaning of Section 860D of the Code that holds the Note or any portion thereof.          **“****Rents****”**shall mean all rents (including, without limitation, percentage rents), rentequivalents, moneys payable as damages or in lieu of rent or rent equivalents, royalties(including, without limitation, all oil and gas or other mineral royalties and bonuses), income,receivables, receipts, revenues, deposits (including, without limitation, security, utility andother deposits), accounts, cash, issues, profits, charges for services rendered, and otherconsideration of whatever form or nature received by or paid to or for the account of or benefit ofBorrower or its agents or employees from any and all sources arising from or attributable to theProperty, and proceeds, if any, from business interruption or other loss of income insurance.          **“****Required Repair Funds****”**shall have the meaning set forth in Section 6.1.1.          **“****Required Repairs****”**shall have the meaning set forth in Section 6.1.1.          **“****Reserve Funds****”**shall mean, collectively, the Capital Expenditure Funds, the InsuranceFunds, the Tax Funds, the Required Repair Funds and the Rollover Funds.          **“****Restoration****”**shall have the meaning set forth in Section 5.2.1.          **“****Restoration Threshold****”**shall mean Eight Hundred Seventy Thousand and No/00 Dollars($870,000.00).
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          **“****Restricted Party****”**shall mean Borrower, Borrower Principal, and any SPC Party.          **“****RolloverFunds****”**shall have the meaning set forth inSection 6.5.1.          **“****S&P****”**shall mean Standard & Poor’s Ratings Services, a division of The McGraw-HillCompanies, Inc.          **“****Saleor Pledge****”**shall mean a voluntary or involuntary sale, conveyance, mortgage,grant, bargain, encumbrance, pledge, assignment, grant of any options with respect to, or any othertransfer or disposition of (directly or indirectly, voluntarily or involuntarily, by operation oflaw or otherwise, andwhether or not for consideration or of record) of a legal or beneficial interest, except withrespect to Permitted Encumbrances.          **“****Scheduled Defeasance Payments****”**shall mean Scheduled Partial Defeasance Payments orScheduled Total Defeasance Payments, as the case may be.          **“****Scheduled Partial Defeasance Payments**”**shall mean scheduled payments of interest andprincipal under the Defeased Note for all Monthly Payment Dates occurring after the PartialDefeasance Date and up to and including the Permitted Prepayment Date (including, the outstandingprincipal balance on the Defeased Note as of the Permitted Prepayment Date), and all paymentsrequired after the Partial Defeasance Date, if any, under the Loan Documents for servicing fees,and other similar charges.          **“****Scheduled Total Defeasance Payments****”**shall mean scheduled payments of interest andprincipal under the Note in the amount of the Monthly Debt Service Payment Amount for all MonthlyPayment Dates occurring after the Total Defeasance Date and up to and including the PermittedPrepayment Date (including, the outstanding principal balance on the Note as of the PermittedPrepayment Date), and all payments required after the Total Defeasance Date, if any, under the LoanDocuments for servicing fees and other similar charges.          **“****Secondary Market Transaction****”**shall have the meaning set forth in Section9.1(a).          **“****Securities****”**shall have the meaning set forth in Section 9.1(a).          **“****Securities Act****”**shall have the meaning set forth in Section 9.2(a).          **“****Securitization****”**shall have the meaning set forth in Section 9.1(a).          **“****Security Agreement****”**shall mean a security agreement in form and substance that wouldbe satisfactory to a prudent lender pursuant to which Borrower grants Lender a perfected, firstpriority security interest in the Defeasance Collateral Account and the Defeasance Collateral.          **“****Servicer****”**shall have the meaning set forth in Section 11.24(a).          **“****Servicing Agreement****”**shall have the meaning set forth in Section 11.24(a).
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          **“****Severed Loan Documents****”**shall have the meaning set forth in Section 10.2(c).          **“****SPC Party****”**shall have the meaning set forth in Section 3.1.24(o).          **“****Standard Statements****”**shall have the meaning set forth in Section 9.1(c)(i).          **“****State****”**shall mean the State or Commonwealth in which the Property or any part thereofis located.          **“****Stop and Shop****”**shall mean Stop & Shop Supermarket Company, Inc., as tenant under theStop and Shop Lease.          **“****Stop and Shop Lease****”**shall mean that certain lease dated July 1, 1986 between Stopand Shop, as tenant and Roger V. Calarese and Americo Calarese as Trustees for Franklin VillageTrust, as landlord (as modified and amended, including without limitation the Stop and Shop ThirdLease Amendment).          **“****Stop and Shop Third Lease Amendment****”**shall mean that certain Third Amendment to theStop and Shop Lease, dated April 2, 2004.          **“****Substitute Guarantor****”**shall have the meaning set forth in Section 8.3 hereof.          **“****Successor Borrower****”**shall have the meaning set forth in Section 2.5.3.          **“****Supplemental Guaranty****”**shall mean that certain Supplemental Guaranty of even dateherewith from Guarantor for the benefit of Lender.          **“****Survey****”**shall mean a current land survey for the Property, certified to the titlecompany and Lender and its successors and assigns, in form and content reasonably satisfactory toLender and prepared by a professional and properly licensed land surveyor reasonably satisfactoryto Lender in accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM Land TitleSurveys (i) meeting the classification of an “Urban Survey” and the following additional items fromthe list of “Optional Survey Responsibilities and Specifications” (Table A) should be added to eachsurvey: 2, 3, 4, 6, 8, 9, 10, 11 and 13, (ii) reflecting a metes and bounds description of the realproperty comprising part of the Property in conformity with the Title Insurance Policy, and (iii)together with the surveyor’s seal affixed to the Survey and a certification from the surveyor inform and substance reasonably acceptable to Lender.          **“****Tax Funds****”**shall have the meaning set forth in Section 6.2.1.          **“****Taxes****”**shall mean all real estate and personal property taxes, assessments, waterrates or sewer rents, now or hereafter levied or assessed or imposed against the Property or partthereof, together with all interest and penalties thereon.          **“****Tenant****”**shall mean any Person obligated by contract or otherwise to pay monies(including a percentage of gross income, revenue or profits) under any Lease now or hereafteraffecting all or any part of the Property.
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          **“****Terrorism Cap****”**shall have the meaning set forth in Section 5.1.1(a)(x)hereof.          **“****Title Insurance Policy****”**shall mean an ALTA mortgagee Title Insurance policy in theform reasonably acceptable to Lender issued with respect to the Property and insuring the lien ofthe Mortgage together with such endorsements and affirmative coverages as Lender may reasonablyrequire.          **“****Total Defeasance Collateral****”**shall mean U.S. Obligations, which provide payments (i)on or prior to, but as close as possible to, the Business Day immediately preceding all MonthlyPayment Dates and other scheduled payment dates, if any, under the Note after the Total DefeasanceDate and up to and including the Permitted Prepayment Date, and (ii) in amounts equal to or greaterthan the Scheduled Total Defeasance Payments relating to such Monthly Payment Dates and otherscheduled payment dates.          **“****Total Defeasance Date****”**shall have the meaning set forth in Section2.5.1(a)(i).          **“****Total Defeasance Event****”**shall have the meaning set forth in Section 2.5.1(a).          **“****Transferee****”**shall have the meaning set forth in Section 8.1(e)(ii).          **“****Trustee****”**shall mean any trustee holding the Loan in a Securitization.          **“****UCC****”**or **“****Uniform Commercial Code****”**shall mean the Uniform Commercial Code asin effect in the State.          **“****Undefeased Note****”**shall have the meaning set forth in Section 2.5.2(a)(iv)hereof.          **“****Underwriter Group****”**shall have the meaning set forth in Section 9.2(b).          **“****Updated Information****”**shall have the meaning set forth in Section 9.1(b)(i).          **“****U.S. Obligations****”**shall mean direct full faith and credit obligations of the UnitedStates of America that are not subject to prepayment, call or early redemption.          **“****Yield Maintenance Premium****”**shall mean the amount, if any, which, when added to theremaining principal amount of the Note, will be sufficient to purchase U.S. Obligations providingthe required Scheduled Defeasance Payments and any other costs and expenses that would be incurredin defeasing the Loan pursuant to Section 2.5 hereof.          **Section 1.2 Principles of Construction.**          All references to sections and schedules are to sections and schedules in or to this Agreementunless otherwise specified. Unless otherwise specified, the words “hereof,” “herein” and“hereunder” and words of similar import when used in this Agreement shall refer to this Agreementas a whole and not to any particular provision of this Agreement. Unless otherwise specified, allmeanings attributed to defined terms herein shall be equally applicable to both the singular andplural forms of the terms so defined.
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          **II. THE LOAN**          **Section 2.1 The Loan.**          **2.1.1****Agreement to Lend and Borrow**. Subject to and upon the terms and conditions setforth herein, Lender shall make the Loan to Borrower and Borrower shall accept the Loan from Lenderon the Closing Date.          **2.1.2****Single Disbursement to Borrower**. Borrower shall receive only one (1) borrowinghereunder in respect of the Loan and any amount borrowed and repaid hereunder in respect of theLoan may not be reborrowed.          **2.1.3****The Note**. The Loan shall be evidenced by that certain Promissory Note of evendate herewith, in the stated principal amount of Forty-Three Million Five Hundred Thousand andNo/100 Dollars ($43,500,000.00) executed by Borrower and payable to the order of Lender in evidenceof the Loan (as the same may hereafter be amended, supplemented, restated, increased, extended orconsolidated from time to time, the **“NOTE”**) and shall be repaid in accordance with the terms ofthis Agreement and the Note.          **2.1.4****Use of Proceeds**. Borrower shall use proceeds of the Loan to (a) to acquire theProperty, (b) deposit the Reserve Funds, (c) pay costs and expenses incurred in connection with theclosing of the Loan, as approved by Lender, (d) fund any working capital requirements of theProperty, as approved by Lender and (e) distribute the balance of the proceeds, if any to Borrower.          **Section 2.2 Interest Rate**.          **2.2.1****Interest Rate**. Interest on the outstanding principal balance of the Loan shallaccrue from the Closing Date up to and including the Maturity Date at the Interest Rate.          **2.2.2****Intentionally Omitted**          **2.2.3****Default Rate**. In the event that, and for so long as, any Event of Default shallhave occurred and be continuing, the outstanding principal balance of the Loan and, to the extentpermitted by law, overdue interest in respect of the Loan, shall accrue interest at the DefaultRate, calculated from the date such payment was due without regard to any grace or cure periodscontained herein.          **2.2.4****Interest Calculation**. Interest on the outstanding principal balance of the Loanshall be calculated by multiplying (a) the actual number of days elapsed in the period for whichthe calculation is being made by (b) a daily rate based on a three hundred sixty (360) day year(that is, the Interest Rate or the Default Rate, as then applicable, expressed as an annual ratedivided by 360) by (c) the outstanding principal balance.          **2.2.5****Usury Savings**. This Agreement and the other Loan Documents are subject to theexpress condition that at no time shall Borrower be required to pay interest on the principalbalance of the Loan at a rate which could subject Lender to either civil or criminal liability as aresult of being in excess of the Maximum Legal Rate. If by the terms of this
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Agreement or theother Loan Documents, Borrower is at any time required or obligated to pay interest on theprincipal balance due hereunder at a rate in excess of the Maximum Legal Rate, the Interest Rate orthe Default Rate, as the case may be, shall be deemed to be immediately reduced to the MaximumLegal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to havebeen payments in reduction of principal and not on account of the interest due hereunder. All sumspaid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due underthe Loan shall, to the extent permitted by applicable law, be amortized, prorated, allocated, andspread throughout the full stated term of the Loan until payment in full so that the rate or amountof interest on account of the Loan does not exceed the Maximum Legal Rate from time to time ineffect and applicable to the Loan for so long as the Loan is outstanding.          **Section 2.3 Loan Payments**.          **2.3.1****Payment Before Maturity Date**. Borrower shall make a payment to Lender ofinterest only on the Closing Date for the period from the Closing Date through the last day of themonth in which the Closing Date occurs (unless the Closing Date is the first (1st) day of acalendar month, in which case no such separate payment of interest shall be due). Borrower shallmake a payment to Lender of interest only in the amount of the Monthly Debt Service Payment Amounton the MonthlyPayment Date occurring in December, 2004 and on each Monthly Payment Date thereafter to andincluding the Maturity Date.          **2.3.2****Intentionally Omitted**.          **2.3.3****Payment on Maturity Date**. Borrower shall pay to Lender on the Maturity Date theoutstanding principal balance of the Loan, all accrued and unpaid interest and all other amountsdue hereunder and under the Note, the Mortgage and the other Loan Documents.          **2.3.4****Late Payment Charge**. If any principal, interest or any other sum due under theLoan Documents, other than the payment of principal due on the Maturity Date, is not paid byBorrower on or prior to the fifth (5th) day following the date on which it is due, Borrower shallpay to Lender upon demand an amount equal to the lesser of (a) five percent (5%) of such unpaid sumor (b) the maximum amount permitted by applicable law in order to defray the expense incurred byLender in handling and processing such delinquent payment and to compensate Lender for the loss ofthe use of such delinquent payment. Any such amount shall be secured by the Mortgage and the otherLoan Documents.          **2.3.5****Method and Place of Payment**.          (a) Except as otherwise provided herein, all payments and prepayments under this Agreement andthe Note shall be made to Lender not later than 1:00 P.M., New York City time, on the date when dueand shall be made in lawful money of the United States of America in immediately available funds atLender’s office at 1114 Avenue of the Americas, 29th Floor, New York, New York 10036, or at suchother place as Lender may from time to time designate in writing, and any funds received by Lenderafter such time shall, for all purposes hereof, be deemed to have been paid on the next succeedingBusiness Day.
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          (b) Whenever any payment to be made hereunder or under any other Loan Document shall be statedto be due on a day which is not a Business Day, the due date thereof shall be the immediatelypreceding Business Day, and such early payment shall in such case not be included in thecomputation of interest.          (c) All payments required to be made by Borrower hereunder or under the Note or the other LoanDocuments shall be made irrespective of, and without deduction for, any setoff, claim orcounterclaim and shall be made irrespective of any defense thereto.          **Section 2.4 Prepayments**.          **2.4.1****Voluntary Prepayments**. Except as otherwise provided herein, Borrower shall nothave the right to prepay the Loan in whole or in part. On and afterMay 1, 2011 (**“PermittedPrepayment Date”**), Borrower may, at its option and upon thirty (30) days prior notice to Lender,prepay the Debt in whole, but not in part, on any date without payment of the Yield MaintenancePremium or any other prepayment premium, but with payment of accrued and unpaid interest and allother sums owing under the Note, this Agreement and the other Loan Documents. Any prepaymentreceived by Lender on a date other than a Monthly Payment Date shall include interest which wouldhave accrued thereon to the next Monthly Payment Date.          **2.4.2****Mandatory Prepayments**. On each date on which Lender actually receives adistribution of Net Proceeds, and if Lender does not make such Net Proceeds available to Borrowerfor a Restoration, Borrower shall, at Lender’s option, prepay the outstanding principal balance ofthe Note in an amount equal to one hundred percent (100%) of such Net Proceeds together withinterest that would have accrued on such amounts through the next Monthly Payment Date. No YieldMaintenance Premium or any other prepayment premium shall be due in connection with any prepaymentmade pursuant to this Section 2.4.2. Any partial prepayment shall be applied to the payment due atmaturity.          **2.4.3****Prepayments After Default**. If after an Event of Default, but prior to the datewhen prepayment is permitted under Section 2.4.1, payment of all or any part of the principal ofthe Loan is tendered by Borrower (which tender Lender may reject to the extent permitted underapplicable Legal Requirements), a purchaser at foreclosure or any other Person, such tender shallbe deemed an attempt to circumvent the prohibition against prepaymentset forth in Section 2.4.1and Borrower, such purchaser at foreclosure or other Person shall pay a sum equal to the greater of(i) the Yield Maintenance Premium, and (ii) one percent (1.0%) of the outstanding principal balanceof the Loan, inaddition to the outstanding principal balance, all accrued and unpaid interest and other amountspayable under the Loan Documents.          **Section 2.5 Defeasance**.          **2.5.1****Total Defeasance**.          (a) Provided no Event of Default shall have occurred and remain uncured, Borrower shall havethe right at any time after the Release Date to voluntarily defease the entire Loan and obtain arelease of the lien of the Mortgage by providing Lender with the Total Defeasance Collateral(hereinafter, a **“Total Defeasance Event”**), subject to the satisfaction of the following conditionsprecedent:
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     (i) Borrower shall provide Lender not less than thirty (30) days notice (or suchshorter period of time if permitted by Lender in its sole discretion) specifying a date(the **“****Total Defeasance Date**”**) on which the Total Defeasance Event is to occur;     (ii) Borrower shall pay to Lender (A) all payments of interest due on the Loan to andincluding the Total Defeasance Date (including, without limitation, short-term interest,if any) and (B) all other sums, then due under the Note, this Agreement, the Mortgage andthe other Loan Documents;     (iii) Borrower shall deposit the Total Defeasance Collateral into the DefeasanceCollateral Account and otherwise comply with the provisions of Sections 2.5.3 and2.5.4 hereof;     (iv) Borrower shall execute and deliver to Lender a Security Agreement in respect ofthe Defeasance Collateral Account and the Total Defeasance Collateral;     (v) Borrower shall deliver to Lender an opinion of counsel for Borrower that isstandard and commercially reasonable in commercial lending transactions and subject onlyto customary qualifications, assumptions and exceptions opining, among other things, that(A) Lender has a legal and valid perfected first priority security interest in theDefeasance Collateral Account and the Total Defeasance Collateral, (B) if aSecuritization has occurred, the REMIC Trust formed pursuant to such Securitization willnot fail to maintain its status as a “real estate mortgage investment conduit” within themeaning of Section 860D of the Code as a result of a Total Defeasance Event pursuant tothis Section 2.5, (C) that Borrower has legally and validly transferred andassigned the Total Defeasance Collateral to the Successor Borrower and (D) anon-consolidation opinion with respect to the Successor Borrower;     (vi) Borrower shall deliver to Lender a Rating Agency Confirmation as to the TotalDefeasance Event;     (vii) Borrower shall deliver an Officer’s Certificate certifying that therequirements set forth in this Section 2.5 have been satisfied;     (viii) Borrower shall deliver a certificate of a “big four” or other nationallyrecognized public accounting firm reasonably acceptable to Lender certifying that theTotal Defeasance Collateral will generate monthly amounts equal to or greater than theScheduled Total Defeasance Payments;     (ix) Borrower shall deliver such other certificates, opinions, documents andinstruments as Lender may reasonably request; and     (x) Borrower shall pay all costs and expenses of Lender actually incurred inconnection with the Total Defeasance Event, including Lender’s reasonable attorneys’ feesand expenses and Rating Agency fees and expenses. Simultaneously with the notice describedin subparagraph (a)(i) above, Borrower shall deliver to Lender an amountreasonably determined by Lender to be sufficient to pay such costs and expenses, whichamount may be applied by Lender toward payment of such costs and expenses if a
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proposedTotal Defeasance Event does not occur,provided that if such amount is insufficient to pay such costs and expenses, Borrowershall remain obligated to pay any deficiency.          (b) If Borrower has elected to defease the Note and the requirements of this Section2.5.1 have been satisfied, the Property shall be released from the lien of the Mortgage and theTotal Defeasance Collateral pledged pursuant to the Security Agreement shall be the sole collateralsecuring the Note. In connection with the release of the Lien, Borrower shall submit to Lender, notless than thirty (30) days prior to the Total Defeasance Date (or such shorter time as isacceptable to Lender in its sole discretion), a release of Lien (and related Loan Documents) forexecution by Lender. Such release shall be in a form appropriate in the jurisdiction in which theProperty is located and shall contain standard provisions protecting the rights of the releasinglender. In addition, Borrower shall provide all other documentation Lender reasonably requires tobe delivered by Borrower in connection with such release, together with an Officer’s Certificatereasonably acceptable to Lender certifying that such documentation (i) is in material compliancewith all Legal Requirements, and (ii) will effect such release in accordance with the terms of thisAgreement. Borrower shall pay all reasonable costs, taxes and expenses associated with the releaseof the lien of the Mortgage, including Lender’s reasonable attorneys’ fees. Except as set forth inthis Section 2.5.1, no repayment, prepayment or defeasance of all or any portion of theNote shall cause, give rise to a right to require, or otherwise result in, the release of the lienof the Mortgage on the Property. The foregoing release shall be effective upon the Total DefeasanceDate but Lender agrees to provide written evidence of such release to Borrower promptly followingBorrower’s request therefor.          **2.5.2****Partial Defeasance**. (a) Provided no Event of Default shall have occurred and remainuncured beyond the expiration of any applicable cure period, Borrower shall have the right at anytime after the Release Date to obtain a partial release of the Lien of the Mortgage encumbering theRelease Parcel (hereinafter, a **“****Partial Defeasance Event****”**) upon satisfaction of thefollowing conditions:     (i) Borrower shall provide Lender thirty (30) days prior written notice (or suchshorter period of time if permitted by Lender in its sole discretion) specifying a MonthlyPayment Date (the **“****Partial Defeasance Date****”**) on which Borrower shall havesatisfied the conditions in this Section 2.5.2 and shall effect the defeasance;     (ii) Borrower shall pay to Lender (A) all payments of interest due and payable on theLoan up to and including the Partial Defeasance Date and (B) all other sums, then due andpayable under the Note, this Agreement, the Mortgage and the other Loan Documents;     (iii) Borrower shall deposit the Partial Defeasance Collateral into the DefeasanceCollateral Account and otherwise comply with the provisions of Sections 2.5.3 and2.5.4 hereof;     (iv) Borrower shall prepare all necessary documents to modify this Agreement and toamend and restate the Note and issue two substitute notes, one note having a principalbalance equal to 125% of the Allocated Loan Amount (the **“****Defeased Note****”**),
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and theother notehaving a principal balance equal to the excess of (A) the outstanding principalamount of the Loan, over (B) the amount of the Defeased Note (the **“****UndefeasedNote****”**). The Defeased Note and the Undefeased Note shall have identical payment termsas the Note except for the principal balance. The Defeased Note and the Undefeased Noteshall be cross defaulted and cross collateralized unless the Rating Agencies shallrequire otherwise or unless a Successor Borrower is established pursuant to Section2.5.4. A Defeased Note may not be the subject of any further defeasance;     (v) Borrower shall execute and deliver to Lender a Security Agreement in respect ofthe Defeasance Collateral Account and the Partial Defeasance Collateral;     (vi) After giving effect to the release of the Lien of the Mortgage encumbering theRelease Parcel, the Debt Service Coverage Ratio with respect to the remaining portion ofthe Property is not less than the greater of (A) the Debt Service Coverage Ratio prior tothe release and (B) Debt Service Coverage Ratio of 1.90x.     (vii) Borrower shall have delivered to Lender and the Rating Agencies shall havereceived from Borrower with respect to the matters referred to in clause (vi), (A)statements of the Net CashFlow and Debt Service (both on a consolidated basis and separately for theapplicable portion of the Property to be released) for the applicable measuring period and(B) based on the foregoing statements of Net Cash Flow and Debt Service, calculations ofthe Debt Service Coverage Ratio both with and without giving effect to the proposedrelease, and (C) calculations of the ratios referred to in such clause (vi),accompanied by an Officer’s Certificate stating that such statements, calculationsand information are true, correct and complete in all material respects;     (viii) Borrower shall deliver to Lender an opinion of counsel for Borrower that wouldbe reasonably satisfactory to a prudent lender opining, among other things, that (A)Lender has a legal and valid perfected first priority security interest in the DefeasanceCollateral Account and the Partial Defeasance Collateral, (B) if a Securitizationhas occurred, the REMIC Trust formed pursuant to such Securitization will not fail tomaintain its status as a “real estate mortgage investment conduit” within the meaning ofSection 860D of the Code as a result of the defeasance pursuant to this Section2.5.2, (C) that Borrower has legally and validly transferred and assigned the TotalDefeasance Collateral to the Successor Borrower (D) delivery of the PartialDefeasance Collateral and the grant of a security interest therein to Lender shall notconstitute an avoidable preference under Section 547 of the Bankruptcy Code or applicablestate law and (E) a non-consolidation opinion with respect to the Successor Borrower;     (ix) Borrower shall deliver to Lender a Rating Agency Confirmation as to the PartialDefeasance Event;     (x) Borrower shall deliver a certificate of a “big four” or other nationallyrecognized public accounting firm reasonably acceptable to Lender certifying that thePartial Defeasance Collateral will generate monthly amounts equal to or greater than theScheduled Defeasance Payments;
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     (xi) Borrower shall deliver to Lender an Officer’s Certificate certifying that therequirements set forth in this Section 2.5.2(a) have been satisfied;     (xii) Borrower shall deliver to Lender such other certificates, documents orinstruments as Lender may reasonably request; and     (xiii) Borrower shall pay all costs and expenses of Lender actually incurred inconnection with the defeasance, including Lender’s reasonable attorneys’ fees andexpenses.          (b) If Borrower has elected to make a partial defeasance and the requirements of Section2.5.2(a) have been satisfied, the Release Parcel shall be released from the Lien of theMortgage, upon satisfaction of the following additional conditions:     (i) on the date Borrower delivers to Lender notice of the proposed release and on thedate of the release, no Event of Default has occurred which is continuing;     (ii) not less than ten (10) Business Days prior to the date of the release, Borrowerdelivers to Lender a notice setting forth (i) the date of the release, (ii) a metes andbounds description of the Release Parcel and (iii) a Survey of the Release Parcel;     (iii) Borrower delivers to Lender evidence (together with an Officer’s Certificatecertifying to such documentation) which would be satisfactory to a prudent lender actingreasonably that (A) the Release Parcel has been, or is about to be (without any furtherdiscretionary or other approvals pending), legally subdivided from the remainder ofthe Property; (B) after giving effect to such transfer, each of the Release Parcel andthe balance of the Property conforms to and is in compliance in all material respects withapplicable Legal Requirements and constitute separate tax lots, and (C) the Release Parcelis not necessary for the Property to comply with any zoning, building, land useor parking or other Legal Requirements applicable to the Property or for the then currentuse of the Property, including without limitation for legal access, driveways, parking,utilities or drainage or, to the extent that the Release Parcel is necessary for any suchpurpose, a reciprocal easement agreement or other agreement has been executed andrecorded that would run to the benefit of Borrower, run with the land and allow the ownerof the Property to continue to use the Release Parcel to the extent necessary for suchpurpose;     (iv) in the event that the release would reasonably be expected to materiallyadversely effect Lender’s rights under the Title Insurance Policy as to any portion of theProperty other than as to the Release Parcel, Borrower shall deliver to Lender anendorsement to the Title Insurance Policy insuring the Mortgage (A) extending theeffective date of the policy to the effective date of the release; (B) confirming nochange in the priority of the Mortgage on the balance of the Property (exclusive of theRelease Parcel) or in the amount of the insurance or the coverage of the Property(exclusive of the Release Parcel) under the policy; and (C) insuring the rights andbenefits under any new or amended reciprocal easement agreement or such otheragreement required pursuant to clause (iii)(C) of this Section that has been executed andrecorded, and the lien of the
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Mortgage is a firstlien on Borrower’s beneficial interest in such easement, subject to no exceptionsother than Permitted Encumbrances and those approved by Lender in its reasonablediscretion;     (v) Borrower has complied with any requirements applicable to the release in theLeases, reciprocal easement agreements, operating agreements, parking agreements or othersimilar agreements affecting the Property and the release does not violate any of theprovisions of such documents in any respect that would result in a termination (orgive any other party thereto the right to terminate), extinguishment or other loss ofmaterial rights of Borrower or in a material increase in Borrower’s obligations under suchdocuments and, to the extent necessary to comply with such documents, the transferee ofthe Release Parcel has assumed Borrower’s obligations, if any, relating to theRelease Parcel under such documents;     (vi) Borrower shall submit to Lender, not less than five (5) Business Days prior tothe Partial Defeasance Date (or such shorter time as permitted by Lender in its solediscretion), a release of Lien (and related Loan Documents) for execution by Lender. Suchrelease shall be in a form appropriate in the jurisdiction in which the Propertyis located and that would be satisfactory to a prudent lender;     (vii) Borrower shall pay all costs, taxes and expenses actually incurred inconnection with the release of the Lien of the Mortgage, including Lender’s reasonableattorneys’ fees and reasonable out-of-pocket expenses;     (viii) Borrower delivers to Lender any other information, approvals and documentswhich would be required by a prudent lender acting reasonably relating to the release; and     (ix) Borrower shall cause, if applicable, title to the Release Parcel so releasedfrom the Lien of the Mortgage to be transferred to and held by a Person other thanBorrower.          (c) Exceptas set forth in this Section 2.5, no repayment, prepayment or defeasance of all orany portion of the Note shall cause, give rise to a right to require, or otherwise result in, therelease of any Lien of any Mortgage on any of the Property.          **2.5.3****Defeasance Collateral Account.** On or before the date on which Borrower deliversthe Defeasance Collateral, Borrower shall open at any Eligible Institution the defeasancecollateral account (the **“****Defeasance Collateral Account****”**) which shall at all times be anEligible Account. The Defeasance Collateral Account shall contain only (a) Defeasance Collateral,and (b) cash from interest and principal paid on the Defeasance Collateral. All cash from interestand principal payments paid on the Defeasance Collateral shall be paid over to Lender on eachMonthly Payment Date and applied to accrued and unpaid interest. Any cash from interest andprincipal paid on the Defeasance Collateral not needed to pay the Scheduled Defeasance Paymentsshall be paid to Borrower. Borrower shall cause the Eligible Institution at which the DefeasanceCollateral is deposited to enter an agreement with Borrower and Lender, satisfactory to Lender inits sole discretion, pursuant to which such Eligible Institution shall
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agree to hold and distributethe Defeasance Collateral inaccordance with this Agreement. The Borrower or Successor Borrower, as applicable, shall bethe owner of the Defeasance Collateral Account and shall report all income accrued on theDefeasance Collateral for federal, state and local income tax purposes in its income tax return.Borrower orSuccessor Borrower shall prepay all cost and expenses associated with opening and maintaining theDefeasance Collateral Account. Lender shall not in any way be liable by reason of any insufficiencyin the Defeasance Collateral Account.          **2.5.4****Successor Borrower.** In connection with a Defeasance Event under this Section 2.5, Borrower shall, if required by the Rating Agencies or if Borrower elects to do so, establishor designate a successor entity (the **“****Successor Borrower****”**) which shall be a single purposebankruptcy remote entity and which shall be approved by the Rating Agencies. Any such SuccessorBorrower may, at Borrower’s option, be an Affiliate of Borrower unless the Rating Agencies shallrequire otherwise. Borrower shall transfer and assign all obligations, rights and duties under andto the Note or the Defeased Note, as applicable, together with the Defeasance Collateral to suchSuccessor Borrower. Such Successor Borrower shall assume the obligations under the Note or theDefeased Note, as applicable, and the Security Agreement and Borrower shall be relieved of itsobligations under such documents. Borrower shall pay a minimum of One Thousand and No/100 Dollars($1,000.00) to any such Successor Borrower as consideration for assuming the obligations under theNote or the Defeased Note, as applicable, and the Security Agreement. Borrower shall pay all costsand expenses actually incurred by Lender, including Lender’s reasonable attorney’s fees andexpenses, actually incurred in connection therewith.          **Section2.6 Foreign Lenders.**          Any Lender that is not a United States “person” within the meaning of Section 7701(a)(30) ofthe Code (a **“****Non-U.S. Lender****”**) shall deliver to Borrower, upon making the Loan or acceptingan assignment of the Loan or any interest therein, two duly completed and signed copies of IRS FormW-8BEN, IRS Form W-8ECI or IRS Form W-8IMY or any successor form thereto (relating to such Non-U.S.Lender and entitling it to an exemption from, or reduction of, withholding tax on all payments tobe made to such Non-U.S. Lender by Borrower) or such other evidence satisfactory to Borrower thatsuch Non-U.S. Lender is entitled to an exemption from, or reduction of, U.S. withholding tax. AForm W-8BEN completed and delivered by (i) certain foreign trusts, or (ii) persons claiming anexemption or reduced rate of withholding at source under an income tax treaty will not beconsidered duly completed unless the Form W-8BEN contains such Person’s U.S. taxpayeridentification number. Thereafter and from time to time, such Non-U.S. Lender shall (a) uponreasonable requests from Borrower, submit to Borrower such additional duly completed and signedcopies of one of such forms (or such successor forms as shall be adopted from time to time by therelevant United States taxing authorities) as may then be available under then current UnitedStates laws and regulations to avoid, or such evidence as is satisfactory to Borrower of anyavailable exemption from or reduction of, United States withholding taxes in respect of allpayments to be made to such Non-U.S. Lender, (b) notify Borrower of any change in circumstanceswhich would to Lender’s actual knowledge, modify or render invalid any claimed exemption orreduction, and (c) upon reasonable requests from Borrower, take such steps as shall not bematerially disadvantageous to it, in the reasonable judgment of such Non-U.S. Lender, and as may bereasonably necessary to
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avoid anyrequirements that Borrower make any deduction or withholding for taxes from amounts payable tosuch Non-U.S. Lender. If such Non-U.S. Lender fails to deliver the above forms or otherdocumentation reasonably satisfactory to Borrower evidencing complete exemption from U.S. federalwithholding tax on all payments by Borrower under the Loan, or if for any reason Borrower isrequired by U.S. law to withhold U.S. income tax, then notwithstanding anything to the contrary inthe Loan Documents, Borrower may withhold from any interest payment to such Non-U.S. Lender anamount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Codeand deduct such withholding from such payment.          **III. REPRESENTATIONS AND WARRANTIES**          **Section3.1 Borrower Representations.**          Borrower represents and warrants that:          **3.1.1****Organization****.**          (a) Each of Borrower and each SPC Party is duly organized, validly existing and in goodstanding with full power and authority to own the Property and conduct its business, and is dulyqualified in all jurisdictions in which the ownership or lease of the Property or the conduct ofits business requires such qualification, except where the failure to be so qualified would nothave a Material Adverse Effect on its ability to perform its obligations hereunder, and Borrowerhas taken all necessary action to authorize the execution, delivery and performance of thisAgreement and the other LoanDocuments by it, and has the power and authority to execute, deliver and perform under thisAgreement, the other Loan Documents and all the transactions contemplated hereby.          (b) Borrower’s exact legal name is correctly set forth in the first paragraph of thisAgreement. Borrower is an organization of the type specified in the first paragraph of thisAgreement. Borrower is incorporated or organized under the laws of the state specified in the firstparagraph of this Agreement. Borrower’s principal place of business and chief executive office, andthe place where Borrower keeps its books and records, including recorded data of any kind ornature, regardless of the medium of recording, including software, writings, plans, specificationsand schematics, has been for the preceding four (4) months (or, if less than four (4) months, theentire period of the existence of Borrower) and will continue to be the address of Borrower setforth in the first paragraph of this Agreement (unless Borrower notifies Lender in writing at leastthirty (30) days prior to the date of such change). Borrower’s organizational identificationnumber, if any, assigned by the state of its incorporation or organization is 3830201. Borrower’sfederal tax identification number is 20-1414039.          **3.1.2****Proceedings****.** This Agreement and the other Loan Documents have been dulyauthorized, executed and delivered by Borrower and constitute a legal, valid and binding obligationof Borrower, enforceable against Borrower in accordance with their respective terms, except as suchenforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similarlaws affecting the enforcement of creditors’ rights generally, and by
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general principles of equity (regardless of whether such enforceability is considered in a proceedingin equity or at law).          **3.1.3****No Conflicts.** The execution and delivery of this Agreement and the other LoanDocuments by Borrower and the performance of its obligations hereunder and thereunder will notconflict with any provision of any law or regulation to which Borrower is subject, or conflictwith, result in a breach of, or constitute a default under, any of the terms, conditions orprovisions of any of Borrower’s organizational documents or any agreement or instrument to whichBorrower is a party or by which it is bound, or any order or decree applicable to Borrower, orresult in the creation orimposition of any lien on any of Borrower’s assets or property (other than pursuant to the LoanDocuments).          **3.1.4****Litigation.** There is no action, suit, proceeding or investigation pending or, toBorrower’s knowledge, threatened against Borrower in any court or by or before any otherGovernmental Authority that would have a Material Adverse Effect.          **3.1.5****Agreements.** Borrower is not a party to any agreement or instrument or subject toany restriction which would have a Material Adverse Effect. Borrower is not in default in anymaterial respect in the performance, observance or fulfillment of any of the obligations, covenantsor conditions contained in any agreement or instrument to which it is a party or by which Borroweror the Property is bound. Borrower has no material financial obligation under any agreement orinstrument to which Borrower is a party or by which Borrower or the Property is otherwise bound,other than (a) obligations incurred in the ordinary course of the operation of the Property and (b)obligations under the Loan Documents.          **3.1.6****Consents.** No consent, approval, authorization or order of any court orGovernmental Authority is required for the execution, delivery and performance by Borrower of, orcompliance by Borrower with, this Agreement or the consummation of the transactions contemplatedhereby, other than those which have been obtained by Borrower.          **3.1.7****Title.** Borrower has good, marketable and insurable fee simple title to the realproperty comprising part of the Property and good title to the balance of the Property, free andclear of all Liens whatsoever except the Permitted Encumbrances. The Mortgage, when properlyrecorded in the appropriate records, will create (a) a valid, first priority, perfected lien on theProperty, subject only to Permitted Encumbrances and (b) perfected security interests in and to,and perfected collateral assignments of, all personalty (including the Leases), all in accordancewith the terms thereof, in each case subject only to any Permitted Encumbrances. There are nomechanics’, materialman’s or other similar liens or claims which have been filed for work, labor ormaterials affecting the Property which are or may be liens prior to, or equal or coordinate with,the lien of the Mortgage. None of the Permitted Encumbrances, individually or in the aggregate,materially interfere with the benefits of the security intended to be provided by the Mortgage andthis Loan Agreement, materially and adversely affect the value of the Property, impair the use oroperations of the Property or impair Borrower’s ability to pay its obligations in a timely manner.          **3.1.8****No Plan Assets.** As of the date hereof and throughout the term of the Loan (a)Borrower is not and will not be an “employee benefit plan,” as defined in Section 3(3)
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of ERISA,subject to Title I of ERISA, (b) none ofthe assets of Borrower constitutes or will constitute “plan assets” of one or more such planswithin the meaning of 29 C.F.R. Section 2510.3-101, (c) Borrower is not and will not be a“governmental plan” within the meaning of Section 3(32) of ERISA, and (d) transactions by or withBorrower are not and will not be subject to any state statute regulating investments of, orfiduciary obligations with respect to, governmental plans.          **3.1.9****Compliance.** To the best of Borrower’s knowledge, Borrower and the Property andthe use thereof comply in all material respects with all applicable Legal Requirements, including,without limitation, building and zoning ordinances and codes. To the best of Borrower’s knowledge,Borrower is not in default or violation of any order, writ, injunction, decree or demand of anyGovernmental Authority, the violation of which would have a Material Adverse Effect. There has notbeen and shall never be committed by Borrower or any other person in occupancy of or involved withthe operation or use of the Property any act or omission affording the federal government or anystate or local government the right of forfeiture as against the Property or any part thereof orany monies paid in performance of Borrower’s obligations under any of the Loan Documents. Borrowerhereby covenants and agrees not to commit, permit or suffer to exist any act or omission affordingsuch right of forfeiture.          **3.1.10****Financial Information.** To the best of Borrower’s knowledge, all financial data,including, without limitation, the statements of cash flow and income and operating expense, thathave been delivered to Lender in respect of the Property (i) are true, complete and correct in allmaterial respects, (ii) accurately represent the financial condition of the Property as of the dateof such reports, and (iii) have been prepared in accordance with GAAP or such other accountingmethod that may be acceptable to Lender) throughout the periods covered, except as disclosedtherein. Borrower does not have any contingent liabilities, liabilities for taxes, unusual forwardor long-term commitments or unrealized or anticipated losses from any unfavorable commitments thatare known to Borrower and reasonably likely to have a Material Adverse Effect. Since the date ofthe most current financial statements delivered by Borrower to Lender, there has been no materialadverse change in the financialcondition, operations or business of Borrower or, to Borrower’s knowledge, the Property from thatset forth in said financial statements.          **3.1.11****Condemnation.** No Condemnation or other proceeding has been commenced or, toBorrower’s best knowledge, is threatened with respect to all or any portion of the Property or forthe relocation of roadways providing access to the Property.          **3.1.12****Utilities and Public Access.** The Property has rights of access to public waysand is served by water, sewer, sanitary sewer and storm drain facilities adequate to service theProperty for its intended uses.          **3.1.13****Separate Lots.** The Property is comprised of one (1) or more parcels whichconstitute separate tax lots and do not constitute a portion of any other tax lot not a part of theProperty.          **3.1.14****Assessments.** To Borrower’s knowledge, there are no pending or proposed specialor other assessments for public improvements or otherwise affecting the
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Property, nor are there anycontemplated improvements tothe Property that may result in such special or other assessments.          **3.1.15****No Defenses.** The Loan Documents are not subject to any right of rescission, setoff, counterclaim or defense by Borrower, including the defense of usury, nor would the operationof any of the terms of the Loan Documents, or the exercise of any right thereunder, render the LoanDocuments unenforceable, and Borrower has not asserted any right of rescission, set off,counterclaim or defense with respect thereto.          **3.1.16****Assignment of Leases.** The Assignment of Leases creates a valid assignment of,or a valid security interest in, certain rights under the Leases, subject only to a license grantedto Borrower to exercise certain rights and to perform certain obligations of the lessor under theLeases, as more particularly set forth therein. No Person other than Lender has any interest in orassignment of the Leases or any portion of the Rents due and payable or to become due and payablethereunder.          **3.1.17****Insurance.** Borrower has obtained and has delivered to Lender original orcertified copies of all of the Policies, with all premiums prepaid thereunder, reflecting theinsurance coverages, amounts and other requirements set forth in this Agreement. No claims havebeen made under any of the Policies, and no Person, including Borrower, has done, by act oromission, anything which would impair the coverage of any of the Policies.          **3.1.18****Licenses.** To the best of Borrower’s knowledge, all permits and approvals,including, without limitation, certificates of occupancy required by any Governmental Authority forthe use, occupancy and operation of the Property in the manner in which the Property is currentlybeing used, occupied and operated have been obtained and are in full force and effect.          **3.1.19****Flood Zone.** Except as disclosed on the Survey, none of the Improvements on theProperty is located in an area identified by the Federal Emergency Management Agency as a specialflood hazard area.          **3.1.20****Physical Condition.** Except as set forth in any property condition orengineering report delivered to and reviewed by Lender in connection with the Loan, and, toBorrower’s knowledge, the Property, including, without limitation, all buildings, improvements,parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fireprotection systems, electrical systems, equipment, elevators, exterior sidings and doors,landscaping, irrigation systems and all structural components, are in good condition, order andrepair in all material respects; except as set forth in any property condition or engineeringreport delivered to and reviewed by lender in connection with the Loan, and, to Borrower’sknowledge, there exists no structural or other material defects or damages in the Property, whetherlatent or otherwise, and Borrower has not received notice from any insurance company or bondingcompany of any defects or inadequacies in the Property, or any part thereof, which would adverselyaffect the insurability of the same or cause the imposition of extraordinary premiums or chargesthereon or of any termination or threatened termination of any policy of insurance or bond.
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          **3.1.21****Boundaries.** Except as set forth in the Survey and in Lender’s Title Insurancepolicy, all of the improvements which were included in determining the appraised value of theProperty lie wholly within the boundaries and building restriction lines of the Property, and noimprovements on adjoining properties encroach upon the Property, and no easements or otherencumbrances affecting the Property encroach upon any of the improvements, so as to affect thevalue or marketability of the Property except those which are insured against by Title Insuranceeach of which, whether or not insured are shown on the Survey.          **3.1.22****Leases.** Borrower represents and warrants to Lender with respect to the Leasesthat: (a) the rent roll attached hereto as Schedule I is true, complete and correct and theProperty is not subject to any Leases other than the Leases described in Schedule I, (b) the Leasesidentified on Schedule I are in full force and effect and there are no defaults thereunder byeither party except as otherwise set forth in an estoppel certificate executed by the applicableTenant delivered to Lender prior to the date hereof, (c) the copies of the Leases delivered toLender are true and complete in all material respects, and there are no oral agreements withrespect thereto except as otherwise set forth in an estoppel certificate executed by the applicableTenant delivered to Lender prior to the date hereof, (d) no Rent (including security deposits) hasbeen paid more than one (1) month in advance of its due date except as otherwise set forth in anestoppel certificate executed by the applicable Tenant delivered to Lender prior to the datehereof, (e) all work to be performed by Borrower under each Lease has been performed as requiredand has been accepted by the applicable Tenant except as otherwise set forth in an estoppelcertificate executed by the applicable Tenant delivered to Lender prior to the date hereof, (f) anypayments, free rent, partial rent, rebate of rent or other payments, credits, allowances orabatements required to be given by Borrower to any Tenant has already been received by such Tenantexcept as otherwise set forth in an estoppel certificate executed by the applicable Tenantdelivered to Lender prior to the date hereof, (g) all security deposits are being held inaccordance with Legal Requirements, (h) neither the landlord nor any Tenant is in default under anyof the Leases except as otherwise set forth in an estoppel certificate executed by the applicableTenant delivered to Lender prior to the date hereof; (i) Borrower has no knowledge of any notice oftermination or default with respect to any Lease; (j) Borrower has not assigned or pledged any ofthe Leases, the rents or any interests therein except to Lender; (k) no Tenant or other party hasan option or right of first refusal or offer, to purchase all or any portion of the Property (otherthan the Stop and Shop Lease, which right of first refusal has been waived by Stop and Shoppursuant to that certain Notice of Waiver of Right of First Refusal dated October 28, 2004); (l) noTenant has the right to terminate its Lease prior to expiration of the stated term of such Lease;and (m) all existing Leases are subordinate to the Mortgage eitherpursuant to their terms or a recordable subordination agreement delivered concurrently herewith, ordelivered hereafter as approved by Lender.          **3.1.23****Filing and Recording Taxes.** All transfer taxes, deed stamps, intangible taxesor other amounts in the nature of transfer taxes required to be paid under applicable LegalRequirements in connection with the transfer of the Property to Borrower have been paid or arebeing paid simultaneously herewith. All mortgage, mortgage recording, stamp, intangible or othersimilar tax required to be paid under applicable Legal Requirements in connection with theexecution, delivery, recordation, filing, registration, perfection or enforcement of any of theLoan Documents, including, without limitation, the Mortgage, have been paid or are being paid
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simultaneouslyherewith. All taxes and governmental assessments due and owing in respect of the Property havebeen paid, or an escrow of funds in an amount sufficient to cover such payments has beenestablished hereunder.          **3.1.24****Single Purpose.** Borrower hereby represents and warrants to, and covenants with,Lender that as of the date hereof and until such time as the Debt shall be paid in full, Borrowerhas not at any time, does not presently, and shall not:          (a) own any asset or property other than (i) the Property, and (ii) incidental personalproperty necessary for the ownership or operation of the Property;          (b) engage in any business other than the ownership, management and operation of the Propertyor fail to conduct and operate its business as presently conducted and operated;          (c) enter into any contract or agreement with any Affiliate of Borrower, any constituent partyof Borrower or any Affiliate of any constituent party, except upon terms and conditions that areintrinsically fair and substantially similar to those that would be available on an arms-lengthbasis with third parties other than any such party;          (d) incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables andoperational debt not evidenced by a note and in an aggregate amount not exceeding $1,000,000.00 atany one time, and (iii) Indebtedness incurred in the financing of equipment and other personalproperty used on the Property with annual payments not exceeding $500,000.00 in the aggregate;provided that any Indebtedness incurred pursuant tosubclauses (ii) and (iii) shall be (x) paidwithin sixty (60) days of the date incurred and (y) incurred in the ordinary course of business. NoIndebtedness other than the Debt may be secured (subordinate or pari passu) by the Property;          (e) make any loans or advances to any third party (including any Affiliate or constituentparty), or acquire obligations or securities of its Affiliates;          (f) fail to remain solvent or fail to pay its debts and liabilities (including, as applicable,shared personnel and overhead expenses) from its assets as the same shall become due;          (g) fail to do all things necessary to observe organizational formalities and preserve itsexistence, and Borrower will not, nor will Borrower permit any constituent party to amend, modifyor otherwise change the partnership certificate, partnership agreement, articles of incorporationand bylaws, operating agreement, trust or other organizational documents of Borrower or suchconstituent party without the reasonable prior consent of Lender in any manner that (i) violatesthe covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes anyprovision thereof that by its terms cannot be modified at any time when the Loan is outstanding orby its terms cannot be modified without Lender’s consent;          (h) fail to maintain all of its books, records, financial statements and bank accountsseparate from those of its Affiliates and any constituent party. Borrower’s assets will not belisted as assets on the financial statement of any other Person, provided, however, that
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Borrower’sassets may be included in a consolidated financial statement of its Affiliates provided that(i) appropriate notation shall be made on such consolidated financial statements to indicate theseparateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit arenot available to satisfy the debts and other obligations of such Affiliates or any other Person and(ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower will file itsown tax returns (to the extent Borrower is required to file any such tax returns) and will not filea consolidated federal income tax return with any Person other than Cedar Shopping Centers Inc.Borrower shall maintain its books, records, resolutions and agreements as official records;          (i) fail to be, or fail to hold itself out to the public as, a legal entity separate anddistinct from any other entity (including any Affiliate of Borrower or any constituent party ofBorrower), fail to correct any known misunderstanding regarding its status as a separate entity,fail to conduct business in its own name, or fail to maintain and utilize separate stationery,invoices and checks bearing its own name, and Borrower shall not identify itself or any of itsAffiliates as a division or part of the other;          (j) intentionally omitted;          (k) seek or effect the liquidation, dissolution, winding up, liquidation, consolidation ormerger, in whole or in part, of Borrower nor permit any constituent party of Borrower to do any ofthe foregoing;          (l) commingle the funds and other assets of Borrower with those of any Affiliate orconstituent party or any other Person, and will hold all of its assets in its own name;          (m) fail to maintain its assets in such a manner that it will not be costly or difficult tosegregate, ascertain or identify its individual assets from those of any Affiliate or constituentparty or any other Person;          (n) guarantee or become obligated for the debts of any other Person or hold itself out to beresponsible for or have its credit available to satisfy the debts or obligations of any otherPerson;          (o) (i) If Borrower is a limited partnership or a limited liability company (other than asingle member limited liability company), fail to cause each general partner or managing member(each, an **“****SPC Party****”**) to be a corporation whose sole asset is its interest in Borrower andeach such SPC Party will at all times comply, and will cause Borrower to comply, with each of therepresentations, warranties, and covenants contained in this Section 3.1.24 as if suchrepresentation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal orthe disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPCParty whose articles of incorporation are substantially similar to those of such SPC Party anddeliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable,with respect to the new SPC Party and its equity owners;     (ii) If Borrower is a single member limited liability company, fail to have at leasttwo (2) springing members, one of which, upon the dissolution of such sole member or thewithdrawal or the disassociation of the sole member from Borrower, shall immediatelybecome the sole member of Borrower, and the other of which shall become
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the sole memberof Borrower if the first such springing member no longer is available to serve assuch sole member.          (p) fail to cause there to be one duly appointed member of the board of directors who areprovided by a nationally recognized company that provides professional independent directors (each,an **“**Independent Director****”**) of Borrower reasonably satisfactory to Lender who shall not havebeen at the time of such individual’s appointment or at any time while serving as a director ofBorrower, and may not have been at any time during the preceding five years (i) a stockholder,director (other than as an Independent Director), officer, employee, partner, attorney or counselof Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person whoderives any of its purchases or revenues from its activities with Borrower or any Affiliate (otherthan payment for services as an Independent Director), (iii) a Person or other entity controllingor under common control with any such stockholder, partner, customer, supplier or other Person, or(iv) a member of the immediate family of any such stockholder, director, officer, employee,partner, customer, supplier or other Person. (For purposes of this subclause (p), the term“Affiliate” means any person controlling, under common control with, orcontrolled by the person in question; and the term “control” means the possession, directly orindirectly, of the power to direct or cause the direction of management, policies or activities ofa person or entity, whether through ownership of voting securities, by contract or otherwise.) Anatural person who satisfies the foregoing definition other than subparagraph (ii) shallnot be disqualified from serving as an Independent Director if such individual is an independentdirector provided by a nationally-recognized company that provides professional independentdirectors and that also provides other corporate services in the ordinary course of its business. Anatural person who otherwise satisfies the foregoing definition except for being the independentdirector of a “special purpose entity” affiliated with the borrower that does not own a direct orindirect equity interest in the borrower or any co-borrower shall not be disqualified from servingas an Independent Director of the SPC Party if such individual is at the time of initialappointment, or at any time while serving as a Independent Director of the SPC Party, anIndependent Director of a “special purpose entity” affiliated with the Borrower or the SPC Party(other than any entity that owns a direct or indirect equity interest in borrower or anyco-borrower) if such individual is an independent director provided by a nationally-recognizedcompany that provides professional independent directors. For purposes of this paragraph, a“special purpose entity” is an entity, whose organizational documents contain restrictions on itsactivities substantially similar to those set forth in the SPC Party’s organizational documents.          (q) cause or permit the board of directors of Borrower to take any action which, under theterms of any certificate of incorporation, by laws or any voting trust agreement with respect toany common stock or under any organizational document of Borrower, requires a vote of the board ofdirectors of each SPC Party and Borrower unless at the time of such action there shall be at leastone (1) member who is an Independent Director.          (r) intentionally omitted.          (s) permit any Affiliate or constituent party independent access to its bank accounts.
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          (t) fail to pay the salaries of its own employees (if any) from its own funds or fail tomaintain a sufficient number of employees (if any) in light of its contemplated businessoperations.          (u) fail to compensate each of its consultants and agents from its funds for services providedto it and pay from its own assets all obligations of any kind incurred.          **3.1.25****Tax Filings.** To the extent required, Borrower has filed (or has obtainedeffective extensions for filing) all federal, state and local tax returns required to be filed andhave paid or made adequate provision for the payment of all federal, state and local taxes, chargesand assessments payable by Borrower. Borrower believes that its tax returns (if any) properlyreflect the income and taxes of Borrower for the periods covered thereby, subject only toreasonable adjustments required by the Internal Revenue Service or other applicable tax authorityupon audit.          **3.1.26****Solvency.** Borrower (a) has not entered into the transaction or any LoanDocument with the actual intent to hinder, delay, or defraud any creditor and (b) receivedreasonably equivalent value in exchange for its obligations under the Loan Documents. Giving effectto the Loan, the fair saleable value of Borrower’s assets exceeds and will, immediately followingthe making of the Loan, exceed Borrower’s total liabilities, including, without limitation,subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value ofBorrower’s assets is and will, immediately following the making of the Loan, be greater thanBorrower’s probable liabilities, including the maximum amount of its contingent liabilities on itsdebts as such debts become absolute and matured. Borrower’s assets do not and, immediatelyfollowing the making of the Loan will not, constitute unreasonably small capital to carry out itsbusiness as conducted or as proposed to be conducted. Borrower does not intend to, and does notbelieve that it will, incur Indebtedness and liabilities (including contingent liabilities andother commitments) beyond its ability to pay such Indebtedness and liabilities as they mature(taking into account the timing and amounts of cash to be received by Borrower and the amounts tobe payable on or in respect of obligations of Borrower).          **3.1.27****Federal Reserve Regulations.** No part of the proceeds of the Loan will be usedfor the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U ofthe Board of Governors of the Federal Reserve System or for any other purpose which would beinconsistent with such Regulation U or any other Regulations of such Board of Governors, or for anypurposes prohibited by Legal Requirements or by the terms and conditions of this Agreement or theother Loan Documents.          **3.1.28****Organizational Chart.**The organizational chart attached as Schedule III hereto,relating to Borrower and certain Affiliates and other parties, is true, complete and correct on andas of the date hereof.          **3.1.29****Investment Company Act.** Borrower is not (a) an “investment company” or acompany “controlled” by an “investment company,” within the meaning of the Investment Company Actof 1940, as amended; (b) 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 thePublic Utility Holding Company Act of 1935, as amended; or
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(c)subject to any other federal or state law or regulation which purports to restrict or regulateits ability to borrow money.          **3.1.30****Access/Utilities.** Except as disclosed in the Survey, all public utilitiesnecessary to the continued use and enjoyment of the Property as presently used and enjoyed arelocated in the public right-of-way abutting the Property. All roads necessary for the fullutilization of the Property for its current purpose have been completed and dedicated to public useand accepted by all governmental authorities or are the subject of access easements for the benefitof the Property.          **3.1.31****No Bankruptcy Filing.** Borrower is not contemplating either the filing of apetition by it under any state or federal bankruptcy or insolvency laws or the liquidation of itsassets or property, and Borrower does not have any knowledge of any Person contemplating the filingof any such petition against it.          **3.1.32****Full and Accurate Disclosure.** To the best of Borrower’s knowledge, noinformation contained in this Agreement, the other Loan Documents, or any written statementfurnished by or on behalf of Borrower pursuant to the terms of this Agreement contains any untruestatement of a material fact or omits to state a material fact necessary to make the statementscontained herein or therein not misleading in light of the circumstances under which they weremade. There is no fact or circumstance presently known to Borrower which has not been disclosed toLender and which will have a Material Adverse Effect.          **3.1.33****Foreign Person.** Borrower is not a “foreign person” within the meaning ofSection 1445(f)(3) of the Code.          **3.1.34****No Change in Facts or Circumstances; Disclosure.** To the best of Borrower’sknowledge, there has been no material adverse change in any condition, fact, circumstance or eventthat would make the financial statements, rent rolls, reports, certificates or other documentssubmitted in connection with the Loan inaccurate, incomplete or otherwise misleading in anymaterial respect or that otherwise materially and adversely affects the business operations or thefinancial condition of Borrower or the Property.          **3.1.35****Perfection of Accounts.** Borrower hereby represents and warrants to Lender that:          (a) This Agreement, together with the other Loan Documents, create a valid and continuingsecurity interest (as defined in the Uniform Commercial Code) in the Accounts (as defined in theCash Management Agreement) in favor of Lender, which security interest is prior to all other Liens,and is enforceable as such against creditors of and purchasers from Borrower. Other than inconnection with the Loan Documents, Borrower has not sold or otherwise conveyed the Accounts;          (b) The Accounts constitute “deposit accounts” or “securities accounts” within the meaning ofthe Uniform Commercial Code, as set forth in the Cash Management Agreement;
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          (c) Pursuant to the Cash Management Agreement, Agent has agreed to comply with allinstructions originated by Lender, without further consent by Borrower, directing disposition ofthe Accounts and all sums at any time held, deposited or invested therein, together with anyinterest or other earnings thereon, and all proceeds thereof (including proceeds of sales and otherdispositions), whether accounts, general intangibles, chattel paper, deposit accounts, instruments,documents or securities; and          (d) The Accounts are not in the name of any Person other than Borrower, as pledgor, or Lender,as pledgee. Borrower has not consented to Agent’s complying with instructions with respect to theAccounts from any Person other than Lender.          **3.1.36****Intentionally Omitted.**          **3.1.37****Intentionally Omitted.**          **3.1.38****Patriot Act.**          (a) None of Borrower, any of its constituents or Affiliates, and to the best of Borrower’sknowledge, any of its brokers or other agents acting or benefiting in any capacity in connectionwith the Loan is a Prohibited Person.          (b) None of Borrower, any of its constituents or Affiliates, or, to Borrower’s knowledge, anyof its brokers or other agents acting in any capacity in connection with the Loan, (i) hasconducted or will conduct any business or has engaged or will engage in any transaction or dealingwith any Prohibited Person, including making or receiving any contribution of funds, goods orservices to or for the benefit of any Prohibited Person, (ii) has dealt or will deal in, orotherwise has engaged or will engage in any transaction relating to, any property or interests inproperty blocked pursuant to the Executive Order; or (iii) has engaged or will engage in or hasconspired or will conspire to engage in any transaction that evades or avoids, or has the purposeof evading or avoiding, or attempts to violate, any of the prohibitions set forth in the ExecutiveOrder or the Patriot Act.          (c) Borrower covenants and agrees to deliver to Lender any certification or other evidencerequested from time to time by Lender in its reasonable discretion, confirming Borrower’scompliance with this Section 3.1.38.          **Section 3.2 Survival of Representations.**          The representations and warranties set forth in Section 3.1 shall survive for so long as anyamount remains payable to Lender under this Agreement or any of the other Loan Documents.          **IV. BORROWER COVENANTS**          **Section 4.1 Borrower Affirmative Covenants.          Borrower hereby covenants and agrees with Lender that:
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          **4.1.1****Existence; Compliance with Legal Requirements.** Borrower shall do or cause to bedone all things necessary to preserve, renew and keep in full force and effect its existence,rights, licenses, permits and franchises and comply with all Legal Requirements applicable to itand the Property.          **4.1.2****Taxes and Other Charges.** Except as otherwise provided herein, Borrower shall payall Taxes and Other Charges now or hereafter levied or assessed or imposed against the Property orany part thereof as the same become due and payable; provided,however, Borrower’s obligation todirectly pay Taxes shall be suspended for so long as Borrower complies with the terms andprovisions of Section 6.2 hereof. Borrower shall furnish to Lender receipts for the payment of theTaxes and the Other Charges prior to the date the same shall becomedelinquent; provided, however,that Borrower is not required to furnish such receipts for payment of Taxes in the event that suchTaxes have been paid by Lender pursuant to Section 6.2 hereof. Borrower shall not permit or sufferand shall promptly discharge any lien or charge against the Property. After prior notice to Lender,Borrower, at its own expense, may contest by appropriate legal proceeding, conducted in good faithand with due diligence, the amount or validity of any Taxes or OtherCharges, provided that (a) noDefault or Event of Default has occurred and remains uncured; (b) such proceeding shall bepermitted under and be conducted in accordance with all applicable statutes, laws and ordinances;(c) neither the Property nor any part thereof or interest therein will be in danger of being sold,forfeited, terminated, canceled or lost; (d) Borrower shall promptly upon final determinationthereof pay the amount of any such Taxes or Other Charges,together with all costs, interest and penalties which may be payable in connection therewith; (e)such proceeding shall suspend the collection of Taxes or Other Charges from the Property; (f)Borrower shall deposit with Lender cash, or other security as may be reasonably approved by Lender,in an amount equal to one hundred twenty-five percent (125%) of the contested amount, to insure thepayment of any such Taxes or Other Charges, together with all interest and penalties thereon; and(g) such contest by Borrower is not in violation of Leases or Operating Agreements. Lender may payover any such cash or other security held by Lender to the claimant entitled thereto at any timewhen, in the judgment of Lender, the entitlement of such claimant is established.          **4.1.3****Litigation.** Borrower shall give prompt notice to Lender of any litigation orgovernmental proceedings pending or, upon discovery by Borrower, threatened against Borrower whichif adversely determined would have a Material Adverse Effect.          **4.1.4****Access to Property.** Borrower shall permit agents, representatives and employeesof Lender to inspect the Property or any part thereof at reasonable hours upon reasonable advancenotice, provided that such inspection is conducted in a manner that minimizes interference withTenants and the operation of the Property.          **4.1.5****Intentionally Omitted.**          **4.1.6****Financial Reporting.**          (a) GAAP. Borrower shall keep and maintain or shall cause to be kept and maintained,consistent with GAAP (or any other accounting basis that is reasonably acceptable to Lender) properand accurate books, records and accounts reflecting all of the financial affairs of
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Borrower andall items of income and expense in connection with the operation on an individual basis of the Property.All financial statements delivered to Lender consistent with thisSection 4.1.6 shall be preparedconsistent with GAAP in the United States of America as in effect on the date so indicated andconsistently applied.          (b) Monthly Reports. Prior to a Securitization, within thirty (30) days after the endof each calendar month, if requested by Lender Borrower, shall furnish to Lender a current (as ofthe calendar month just ended) balance sheet, a detailed operating statement (showing monthlyactivity and year to date) stating gross income from operations, operating expenses, for thecalendar month just ended, a rent roll for the subject month and, as requested by Lender, any otherdocumentation supporting the information disclosed in the most recent financial statements. Inaddition, such statement shall also be accompanied by (i) a calculation reflecting the Debt ServiceCoverage Ratio as of the last day of such month for such month and (ii) a certificate of an officerof Borrower or the general partner of Borrower stating that the representations and warranties ofBorrower set forth in Section 3.1.24 are true and correct as of the date of such certificate andthat there are no trade payables outstanding for more than sixty (60) days.          (c) Quarterly Reports. Within forty five (45) days after the end of each calendarquarter, Borrower shall furnish to Lender a detailed operating statement (showing quarterlyactivity and year to date) stating gross income and operating expenses for the calendar quarterjust ended and a balance sheet (which also reports capital expenditures) for such quarter forBorrower. Borrower’s quarterly statements shall be accompanied by (i) a current rent roll for theProperty and (ii) a summary report for the most recently completed calendar year of aggregate salesby tenants under Leases of the Property, to the extent such information is provided by Tenantsand/or required under the their Leases, and (iii) a certificate executed by an officer of Borroweror the general partner of Borrower stating that each such quarterly statement presents fairly thefinancial condition and the results of operations of the Borrower and the Property and has beenprepared consistent with general accepted accounting principles.          (d) Annual Reports. Within seventy five (75) days after the end of each calendar yearof Borrower’s operation of the Property, Borrower will furnish to Lender a complete copy ofBorrower’s annual financial statements prepared by Borrower (or, if required by Lender, audited byErnst & Young LLP or other firm of independent certified public accountants acceptable to Lender),consistent with GAAP for such calendar year which financial statements shall contain a balancesheet, a detailed operating statement stating gross income, operating expenses for each of Borrowerand the Property. Borrower’s annual financial statements shall be accompanied by (i) a certificateexecuted by an officer of Borrower or the managing member of Borrower stating that each such annualfinancial statement presents fairly the financial condition and the results of operations ofBorrower and the Property and has been prepared consistent with general accepted accountingprinciples, and (ii) if required by Lender, an unqualified opinion of Ernst & Young LLP or otherfirm of independent certified public accountantsacceptable to Lender (notwithstanding the foregoing, Borrower’s financial statements may beconsolidated with its Affiliates, provided that Borrower also provides appropriateschedules to report the amounts applicable to the Borrower and the Property).
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          (e) Certification; Supporting Documentation. Each such financial statement shall be inscope and detail reasonably satisfactory to Lender and certified by an officer of Borrower.          (f) Additional Reports. Borrower shall deliver to Lender as soon as reasonablyavailable but in no event later than thirty (30) days after such items become available to Borrowerin final form:     (i) copies of any final engineering or environmental reports prepared for Borrowerwith respect to the Property;     (ii) a copy of any notice received by Borrower from any environmental authorityhaving jurisdiction over the Property with respect to a violation of any environmental lawapplicable to the Property other than the Exxon Remediation;     (iii) a summary report containing each of the following with respect to the Propertyfor the most recently completed calendar year: (A) aggregate sales by Tenants under Leasesor other occupants of the Property (only to the extent such information is provided byTenants, and/or required under Leases) and on a comparable store basis), (B) rentper square foot payable by each tenant and (C) aggregate occupancy of the Property byanchor space and in-line store space as of December 31; and     (iv) if requested by Lender, a summary report listing only Tenants and square footageoccupied by such Tenants.          (g) Access. Lender shall have the right from time to time upon reasonable priorwritten notice to Borrower, at all times during normal business hours to examine such books,records and accounts at the office of Borrower or other Person maintaining such books, records andaccounts and to make such copies or extracts thereof as Lender shall reasonably desire. After theoccurrence of an Event of Default, Borrower shall pay any costs and expenses incurred by Lender toexamine Borrower’s records with respect to the Property, as Lender shall determine to be reasonablynecessary or appropriate in the protection of Lender’s interest.          (h) Format of Delivery. Any reports, statements or other information required to bedelivered under this Agreement shall be delivered (i) in paper form, (ii) on a diskette, and (iii)if requested by Lender and within the capabilities of Borrower’s data systems without change ormodification thereto, in electronic form reasonably acceptable to Lender.          (i) Annual Budget. Borrower shall submit the Annual Budget to Lender not later thantwenty (20) days prior to the commencement of each Fiscal Year.          (j) Other Required Information. Borrower shall furnish to Lender, within five (5)Business Days after request (or as soon thereafter as may be reasonably possible), such furtherdetailed information with respect to the operation of the Property and the financial affairs ofBorrower as may be reasonably requested by Lender, provided that Borrower has such informationavailable.
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          **4.1.7****Title to the Property.** Borrower will warrant and defend the validity andpriority of the Liens of the Mortgage and the Assignment of Leases on the Property against theclaims of all Persons whomsoever, subject only to Permitted Encumbrances.          **4.1.8****Estoppel Statement.**          (a) After request by Lender (not more than one (1) time in any calendar year provided no Eventof Default exists), Borrower shall within ten (10) Business Days furnish Lender with a statement,duly acknowledged and certified, stating (i) the unpaid principal amount of the Note, (ii) theInterest Rate of the Note, (iii) the date installments of interest were last paid, (iv) any offsetsor defenses to the payment of the Debt, if any, and (v) that this Agreement and the other LoanDocuments have not been modified or if modified, giving particulars of such modification.          (b) Borrower shall endeavor to deliver to Lender, within forty-five (45) days after request,an estoppel certificate from each Tenant under any Lease (provided that Borrower shall only berequired to use commercially reasonable efforts to obtain an estoppel certificate from any Tenantnot required to provide an estoppel certificate under its Lease); provided that such certificateshall be in the form required under such Lease; providedfurther that Borrowershall not be required to deliver such certificates more frequently than two (2) times in anycalendar year.          **4.1.9****Leases.**          (a) All Leases and other rental arrangements shall in all material respects be approved byLender and shall be on a standard Lease form previously approved by Lender with no modifications(except as approved by Lender). Such Lease form shall provide that (i) the Lease is subordinate tothe Mortgage, (ii) the tenant shall attorn to Lender, and (iii) that any cancellation, surrender,or amendment of such Lease without the prior written consent of Lender shall be voidable by Lender.Borrower shall hold, in trust, all tenant security deposits in a segregated account, and, to theextent required by applicable law, shall not commingle any such funds with any other funds ofBorrower. Within ten (10) days after Lender’s request, Borrower shall furnish to Lender a statementof all tenant security deposits, and copies of all Leases not previously delivered to Lender,certified by Borrower as being true and correct in all material respects. Notwithstanding anythingcontained in the Loan Documents, Lender’s approval shall not be required for future Leases, Leasemodifications, or Lease extensions if the following conditions are satisfied: (A) no Event ofDefault has occurred and is continuing; (B) the Lease is on the standard Lease form approved byLender with no modifications except for commercially reasonable modifications agreed to in theordinary course of Borrower’s business, but in no event shall there be any material modificationsto the subordination, attornment, estoppel and landlord liability clauses of such Lease without theprior written consent of Lender, which consent shall not be unreasonably withheld, conditioned ordelayed; (C) the Lease does not violate any restrictive covenant affecting the Property or anyother Lease for space in the Property; (D) the Lease is not a Major Lease; (E) the Lease shallprovide for rental rates and landlord concessions comparable to existing local market rates andshall be an arms length transaction and in no event be with an Affiliate of Borrower; (F) the Leaseshall be to a tenant which Borrower, in its professional and commercially reasonably judgment, hasdetermined is creditworthy; and (G) the
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Lease is for a term of not more than ten (10) years(exclusive of renewal options, which together with the initial lease term shall not exceedfifteen (15) years). Lender shall execute and deliver a Subordination Non-Disturbance andAttornment Agreement in the form annexed hereto as Schedule IV to Tenants under future Major Leaseapproved by Lender promptly upon request with such commercially reasonable changes as may berequested by Tenants, from time to time, and which are reasonably acceptable to Lender.          (b) Borrower (i) shall perform the obligations which Borrower is required to perform under theLeases; (ii) shall enforce the obligations to be performed by the tenants; (iii) shall promptlyfurnish to Lender any notice of default or termination received by Borrower from any tenant, andany notice of default or termination given by Borrower to any tenant; (iv) shall not collect anyrents for more than thirty (30) days in advance of the time when the same shall become due, exceptfor bona fide security deposits not in excess of an amount equal to two months rent; (v) shall notenter into any ground Lease or master Lease of any part of the Property; (vi) shall not furtherassign or encumber any Lease; (vii) shall not, except with Lender’s prior written consent, cancelor accept surrender or termination of any Lease, except as expressly set forth in Section4.1.9(c) hereof, and (viii) any Lease termination or cancellation fees shall be paid to Lenderand held in the Rollover Fund. Any action in violation of clauses (v), (vi),(vii), and (viii) of this Section 4.1.9(b) shall be void at the election ofLender.          (c) Notwithstanding anything to the contrary contained herein, Borrower shall have the rightto terminate any Lease which is not a Major Lease, provided such termination is (i) commerciallyreasonable, (ii) made in accordance with Borrower’s reasonable business judgment, and (iii) theLease so terminated is replaced with a Lease which otherwise complies with the requirements setforth in this Section 4.1.9.          (d) Notwithstanding anything to the contrary contained in this Section 4.1.9, wheneverLender’s approval or consent is required pursuant to the provisions of this Section 4.1.9for any matter that Lender has not previously approved, Lender shall respond within ten (10)Business Days after Lender’s receipt of Borrower’s written request for such approval or consent. IfLender fails to respond to such request within five (5) Business Days, and Borrower sends a secondrequest containing a legend inbold letters stating that Lender’s failure to respond within five (5) Business Days shall be deemedconsent or approval, Lender shall be deemed to have approved or consented to the matter for whichLender’s consent or approval was sought if Lender fails to respond to such second written requestbefore the expiration of such second five (5) Business Days period.          **4.1.10****Alterations.** Lender’s prior approval shall be required in connection with anyalterations to any Improvements (except tenant improvements under any Lease approved by Lender orunder any Lease for which approval was not required by Lender under this Agreement) (a) adverselyaffecting structural components of the Property, utilities, HVAC or the exterior of the building,(b) that may have a Material Adverse Effect or (c) the cost of which (including any relatedalteration, improvement or replacement) is reasonably anticipated to exceed the AlterationThreshold, which approval may be granted or withheld in Lender’s reasonable discretion. If thetotal unpaid amounts incurred and to be incurred with respect to such alterations to theImprovements shall at any time exceed the Alteration Threshold, Borrower shall promptly deliver toLender as security for the payment of such amounts and as
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additional security for Borrower’s obligations under the Loan Documents any of the followingselected by Borrower: (i) cash, (ii) Letters of Credit, (iii) U.S. Obligations, (iv) othersecurities reasonably acceptable to Lender, provided that Lender shall have received a RatingAgency Confirmation as to the form and issuer of same, or (v) a completion bond, provided thatLender shall have received a Rating Agency Confirmation as to the form and issuer of same. Suchsecurity shall be in an amount equal to the excess of the total unpaid amounts incurred and to beincurred with respect to such alterations to the Improvements (other than such amounts to be paidor reimbursed by Tenants under the Leases) over the Alteration Threshold.          **4.1.11****Intentionally Omitted.**          **4.1.12****Material Agreements.** Borrower shall (a) promptly perform and/or observe all ofthe material covenants and agreements required to be performed and observed by it under eachMaterial Agreement and Operating Agreement to which it is a party, and do all things necessary topreserve and to keep unimpaired its rights thereunder, (b) promptly notify Lender in writing of thegiving of any notice of any default by any party under any Material Agreement and OperatingAgreement of which it is aware which has a Material Adverse Effect on Borrower or the Property and(c) promptly enforce the performance and observance of all of the material covenants and agreementsrequired to be performed and/or observed by the other party under each Material Agreement andOperating Agreement to which it is a party in a commercially reasonable manner.          **4.1.13****Performance by Borrower.** Borrower shall in a timely manner observe, perform andfulfill each and every covenant, term and provision of each Loan Document executed and delivered byBorrower, and shall not enter into or otherwise suffer or permit any amendment, waiver, supplement,termination or other modification of any Loan Document executed and delivered by Borrower withoutthe prior consent of Lender.          **4.1.14****Intentionally Omitted.**          **4.1.15****Business and Operations.** Borrower will continue to engage in the businessescurrently conducted by it as and to the extent the same are necessary for the ownership and leasingof the Property. Borrower will qualify to do business and will remain in good standing under thelaws of each jurisdiction as and to the extent the same are required for the ownership and leasingof the related Property. Borrower shall at all times cause the Property to be maintained as acommercial retail shopping center.          **4.1.16****Loan Fees.** Borrower shall pay all fees and costs (including, withoutlimitation, all origination and commitment fees) required of Borrower pursuant to the terms of thatcertain term sheet between Cedar Shoppings Center Partnership, L.P. and Lender dated September 30,2004.          **4.1.17****Intentionally Omitted.**          **4.1.18****Handicapped Access.**          (a) Borrower covenants and agrees that the Property shall at all times comply to the extentapplicable with the requirements of the Americans with Disabilities Act of 1990, the
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Fair HousingAmendments Act of 1988, allstate and local laws and ordinances related to handicapped access and all rules, regulations,and orders issued pursuant thereto including, without limitation, the Americans with DisabilitiesAct Accessibility Guidelines for Buildings and Facilities (collectively, **“****Access Laws****”**).          (b) Notwithstanding any provisions set forth herein or in any other document regardingLender’s approval of alterations of the Property, Borrower shall not alter the Property in anymanner which would materially increase Borrower’s responsibilities for compliance with theapplicable Access Laws without the prior written approval of Lender. The foregoing shall apply totenant improvements constructed by Borrower or by any of its tenants. Lender may condition any suchapproval upon receipt of a certificate of Access Law compliance from an architect, engineer, orother person acceptable to Lender.          (c) Borrower covenants and agrees to give prompt notice to Lender of the receipt by Borrowerof any complaints related to violation of any Access Laws and of the commencement of anyproceedings or investigations which relate to compliance with applicable Access Laws.          **4.1.19****Intentionally Omitted.**          **4.1.20****Notice of Certain Events.** Borrower shall promptly notify Lender of (a) anyEvent of Default, together with a detailed statement of the steps being taken to cure such Defaultor Event of Default; (b) any notice of default received by Borrower under other obligationsrelating to the Property or otherwise material to Borrower’s business which, if determinedadversely, would have a Material Adverse effect on Borrower or the Property; and (c) any threatenedor pending legal, judicial or regulatory proceedings, including any dispute between Borrower andany Governmental Authority, affecting Borrower or the Property.          **4.1.21****Further Assurances.** Borrower shall, at Borrower’s sole cost and expense,promptly (a) cure any defects in the execution and delivery of the Loan Documents, (b) execute anddeliver, or cause to be executed and delivered, all such other documents, agreements andinstruments as Lender may reasonably request to further evidence and more fully describe thecollateral for the Loan, tocorrect any omissions in the Loan Documents, to perfect, protect or preserve any Liens createdunder any of the Loan Documents, or to make any recordings, file any notices, or obtain anyconsents, as may be necessary or appropriate in connection therewith provided such documents do notincrease Borrower’s monetary obligations or decrease Borrower’s rights hereunder and (c) do allsuch further lawful and reasonable acts, conveyances and assurances for the better and moreeffectively carrying out of the intents and purposes of this Agreement and the other Loan Documentsas Lender shall reasonably require from time to time, provided such documents do not increaseBorrower’s monetary obligations or decrease Borrower’s rights hereunder. Upon the occurrence andduring the continuation of an Event of Default, Borrower grants Lender an irrevocable power ofattorney coupled with an interest for the purpose of exercising and perfecting any and all rightsand remedies available to Lender under the Loan Documents, at law and in equity, including withoutlimitation such rights and remedies available to Lender pursuant to Sections 10.2,10.3, and 10.4.
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          **4.1.22****Taxes on Security.** Borrower shall pay all taxes, charges, filing, registrationand recording fees, excises and levies payable with respect to the Note or the Liens created orsecured by the Loan Documents, other than income, franchise and doing business taxes imposed onLender. If there shall be enacted any law (a) deducting the Loan from the value of the Property forthe purpose of taxation, (b) affecting any Lien on the Property, or (c) changing existing laws oftaxation of mortgages, deeds of trust, security deeds, or debts secured by real property, orchanging the manner of collecting any such taxes, Borrower shall promptly pay to Lender, on demand,all taxes, costs and charges, other than income, franchise or doing business taxes, for whichLender is or may be liable as a result thereof; however, if such payment would be prohibited by lawor would render the Loan usurious, then instead of collecting such payment, Lender may declare allamounts owing under the Loan Documents to be immediately due and payable without any prepaymentpenalty or fee.          **4.1.23****Stop and Shop Estoppel.** On or before May 5, 2006, Borrower shall deliverevidence that Stop and Shop has commenced paying the unabated annual fixed rent set forth in theStop and Shop Third Lease Amendment. If Borrower fails to comply with the provisions of thisSection 4.1.23, then Borrower shall deliver the Additional Collateral to Lender to be heldby Lender as additional security for the Loan to be deposited in an Account and maintained byLender pursuant to the Cash Management Agreement. At the request of Lender, Borrower shall agree toreasonable amendments to the Cash Management Agreement to reflect that the deposit of theAdditional Collateral and provide any and allother documentation reasonably required to perfect Lender’s security interest in the AdditionalCollateral. Any and all income earned on the Additional Collateral shall inure to the benefit ofBorrower.          **Section 4.2 Borrower Negative Covenants**.          Borrower covenants and agrees with Lender that:          **4.2.1****Liens.** Subject to Borrower’s right to contest in accordance with the expressterms set forth in this Agreement, Borrower shall not create, incur, assume or suffer to exist anyLien on any portion of the Property except for Permitted Encumbrances.          **4.2.2****Dissolution.** Except as expressly set forth in this Agreement, Borrower shall not(a) engage in any dissolution, liquidation or consolidation or merger with or into any otherbusiness entity, (b) transfer, lease or sell, in one transaction or any combination oftransactions, all or substantially all of the property or assets of Borrower except to the extentexpressly permitted by the Loan Documents, or (c) cause, permit or suffer any SPC Party to (i)dissolve, wind up or liquidate or take any action, or omit to take an action, as a result of whichsuch SPC Party would be dissolved, wound up or liquidated in whole or in part, or (ii) amend,modify, waive or terminate the certificate of incorporation or bylaws of such SPC Party, in eachcase without obtaining the prior consent of Lender.          **4.2.3****Debt Cancellation.** Borrower shall not cancel or otherwise forgive or release anyclaim or debt (other than termination of Leases in accordance herewith) owed to Borrower by anyPerson, except for adequate consideration and in the ordinary course of Borrower’s business.
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          **4.2.4****Zoning.** Borrower shall not initiate or consent to any zoning reclassification ofany portion of the Property or seek any variance under any existing zoning ordinance or use orpermit the use of any portion of the Property in any manner that could result in such use becominga nonconforming use under any zoning ordinance or any other applicable land use law, rule or regulation,without the prior written consent of Lender, which shall not be unreasonably withheld, conditionedor delayed.          **4.2.5****No Joint Assessment.** Borrower shall not suffer, permit or initiate the jointassessment of the Property (a) with any other real property constituting a tax lot separate fromthe Property, and (b) with any portion of the Property which may be deemed to constitute personalproperty, or any other procedure whereby the lien of any taxes which may be levied against suchpersonal property shall be assessed or levied or charged to the Property.          **4.2.6****Principal Place of Business.** Borrower shall not change its principal place ofbusiness from the address set forth on the first page of this Agreement without first giving Lenderthirty (30) days prior notice.          **4.2.7****ERISA.**          (a) Borrower shall not engage in any transaction which would cause any obligation, or actiontaken 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 administrativeclass exemption) prohibited transaction under the Employee Retirement Income Security Act of 1974,as amended (“**ERISA**”) or Section 4975 of the Code.          (b) Borrower shall deliver to Lender such certifications or other evidence from time to timethroughout the term of the Loan, as requested by Lender in its sole discretion, that (i) Borroweris not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title Iof ERISA, or a “plan” subject to Section 4975 of the Code, or a “governmental plan” within themeaning of Section 3(32) of ERISA; (ii) Borrower is not subject to any state statute regulatinginvestments of, or fiduciary obligations with respect to, governmental plans; and (iii) one or moreof the following circumstances is true:          (A) Equity interests in Borrower are publicly offered securities, within the meaning of 29C.F.R. §2510.3-101(b)(2);          (B) Less than twenty-five percent (25%) of each outstanding class of equity interests inBorrower is held by “benefit plan investors” within the meaning of 29 C.F.R. §2510.3-101(f)(2);or          (C) Borrower qualifies as an “operating company” or a “real estate operating company” withinthe meaning of 29 C.F.R. §2510.3-101(c) or (e).          **4.2.8****Material Agreements.** Borrower shall not, without Lender’s reasonable consent:(a) enter into, surrender or terminate any Material Agreement or Operating Agreement to which it isa party (unless the other party thereto is in material default and the termination of suchagreement would be commercially reasonable), (b) increase or consent to the increase of the amountof any charges under any Material Agreement or Operating Agreement to which it is a
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party, exceptas provided therein or on an arms-length basis andcommercially reasonable terms; or (c) otherwise modify, change, supplement, alter or amend, orwaive or release any of its rights and remedies under any Material Agreement or Operating Agreementto which it is a party in any material respect, except on an arms’-length basis and commerciallyreasonable terms.          **4.2.9****Intentionally Deleted.**          **4.2.10****Intentionally Omitted.**          **V. INSURANCE, CASUALTY AND CONDEMNATION**          **Section 5.1 Insurance.**          **5.1.1****Insurance Policies.**          (a) Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower andthe Property providing at least the following coverages:     (i) comprehensive all risk insurance on the Improvements and the personal property atthe Property (A) in an amount equal to one hundred percent (100%) of the “Full ReplacementCost,” which for purposes of this Agreement shall mean actual replacement value(exclusive of costs of excavations, foundations, underground utilities and footings) witha waiver of depreciation, but the amount shall in no event be less than the outstandingprincipal balance of the Loan; (B) containing an agreed amount endorsement with respect tothe Improvements and personal property at the Property waiving all co-insuranceprovisions; (C) providing for no deductible in excess of Twenty Five Thousand and No/100Dollars ($25,000.00) for all such insurance coverage; and (D) containing an “Ordinance orLaw Coverage” or “Enforcement” endorsement if any of the Improvements or the use ofthe Property shall at any time constitute legal non-conforming structures or uses. Inaddition, Borrower shall obtain: (y) if any portion of the Improvements is currently or atany time in the future located in a federally designated “special flood hazard area,”flood hazard insurance in an amount equal to the lesser of (1) the outstandingprincipal balance of the Note or (2) the maximum amount of such insurance available underthe National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or theNational Flood Insurance Reform Act of 1994, as each may be amended or such greateramount as Lender shall require; and (z) earthquake insurance in amounts and in form andsubstance satisfactory to Lender in the event the Property is located in an area with ahigh degree of seismic activity, provided that the insurance pursuant to clauses(y) and (z) hereof shall be on terms consistent with the comprehensive all risk insurancepolicy required under this subsection (i).     (ii) commercial general liability insurance against claims for personal injury,bodily injury, death or property damage occurring upon, in or about the Property, suchinsurance (A) to be on the so-called “occurrence” form with an occurrence limit of notless than One Million and No/100 Dollars ($1,000,000.00) and an aggregate limitof not less than Two Million and No/100 Dollars ($2,000,000.00); (B) to continue at notless than the aforesaid limit until required to be changed by Lender by reason of changed
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economic conditions making suchprotection inadequate; and (C) to cover at least the following hazards: (1) premisesand operations; (2) products and completed operations on an “if any” basis; (3)independent contractors; (4) blanket contractual liability for all legal contracts; and(5) contractual liability covering the indemnities contained in Article 9 of the Mortgageto the extent the same is available;     (iii) business income insurance (A) with loss payable to Lender; (B) covering allrisks required to be covered by the insurance provided for insubsection (i) above for aperiod commencing at the time of loss for such length of time as it takes to repair orreplace with the exercise of due diligence and dispatch; (C) containing anextended period of indemnity endorsement which provides that after the physical loss tothe Improvements and Personal Property has been repaired, the continued loss of incomewill be insured until such income either returns to the same level it was at prior to theloss, or the expiration of twelve (12) months from the date that the Property isrepaired or replaced and operations are resumed, whichever first occurs, andnotwithstanding that the policy may expire prior to the end of such period; and (D) in anamount equal to one hundred percent (100%) of the projected gross income from the Propertyfor a period from the date of loss to a date (assuming total destruction) which issix (6) months from the date that the Property is repaired or replaced and operations areresumed. The amount of such business income insurance shall be determined prior to thedate hereof and at least once each year thereafter based on Borrower’s reasonable estimateof the gross income from the Property for the succeeding twelve (12) monthperiod. Subject to Section 5.3.2 hereof, all proceeds payable to Lender pursuant to thissubsection shall be held by Lender and shall be applied to the obligations secured by theLoan Documents from time to time due and payable hereunder and under the Note;provided, however, that nothing herein contained shall be deemed torelieve Borrower of its obligations to pay the obligations secured by the Loan Documentson the respective dates of payment provided for in the Note and the other LoanDocuments except to the extent such amounts are actually paid out of the proceeds of suchbusiness income insurance;     (iv) at all times during which structural construction, repairs or alterations arebeing made with respect to the Improvements, and only if the Property coverage form doesnot otherwise apply, (A) owner’s contingent or protective liability insurance coveringclaims not covered by or under the terms or provisions of the above mentionedcommercial general liability insurance policy; and (B) the insurance provided for insubsection (i) above written in a so-called builder’s risk completed value form(1) on a non-reporting basis, (2) against all risks insuredagainst pursuant to subsection (i) above, (3) including permission to occupy theProperty, and (4) with an agreed amount endorsement waiving co-insurance provisions;     (v) workers’ compensation, subject to the statutory limits of the state in which theProperty is located, and employer’s liability insurance with a limit of at least OneMillion and No/100 Dollars ($1,000,000.00) per accident and per disease per employee, andOne Million and No/100 Dollars ($1,000,000.00) for disease aggregate in respectof any work or operations on or about the Property, or in connection with the Property orits operation (if applicable);
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     (vi) comprehensive boiler and machinery insurance, if applicable, in amounts as shallbe reasonably required by Lender on terms consistent with the commercial propertyinsurance policy required under subsection (i) above;     (vii) umbrella liability insurance in addition to primary coverage in an amount notless than $10,000,000.00.00 per occurrence on terms consistent with the commercial generalliability insurance policy required under subsection (ii) above and (viii)below;     (viii) motor vehicle liability coverage for all owned and non-owned vehicles,including rented and leased vehicles containing minimum limits per occurrence of OneMillion and No/100 Dollars ($1,000,000.00);     (ix) so-called “dramshop” insurance or other liability insurance required inconnection with the sale of alcoholic beverages, if served at the Property, and;     (x) If the commercial property and business income insurance policies required undersubsections (i) and (iii) above do not cover perils of terrorism or actsof terrorism, Borrower shall maintain commercial property and business income insurancefor loss resulting from perilsand acts of terrorism on terms (including amounts) consistent with those required undersubsections (i) and (iii) above; notwithstanding the foregoing, Borrowershall be required to obtain and maintain terrorism insurance in an amount not less thanthe amount of terrorism insurance that is available for an annual premium equal totwo (2) times Borrower’s then current premium for the “all-risk**”**insurance required undersubsection (i) above (such limitation shall be referred to as the “**TerrorismCap**”) for terrorism insurance that is at least equivalent to the existing terrorisminsurance required under this Section 5.1.1(a)(x); provided,however, the Terrorism Cap shall not apply if (A) owners and/or operators ofoffice buildings in the same class as the Property in Massachusetts are generallyobtaining terrorism insurance, (B) lenders financing such office buildings in thesame class as the Property in Massachusetts are generally requiring terrorism insurance asa condition of financing, or (C) Borrower Principal or any Affiliates of BorrowerPrincipal or any transferee of Borrower Principal or any of its Affiliates, is obtainingterrorism insurance on any other properties in Massachusetts which any of theforegoing Persons own or operate. The claims paying ability rating of the insurer shall beconsistent with the requirements of Section 5.1.2 hereof or, if no insurer of suchclaims paying ability rating is then issuing such terrorism insurance, the chosen insurershall be the insurer which is offering such terrorism insurance and which has aclaims paying ability rating the closest to that required by Section 5.1.2 hereof.If perils of terrorism and acts of terrorism or other similar acts or events arehereafter excluded from Borrower’s comprehensive all risk insurance policy or businessincome insurance coverage required under subsections (i) and (iii) above,Borrower shall obtain an endorsement to such policy, or a separate policy from aninsurance provider which meets the requirements set forth in Section 5.1.2 belowor is otherwise satisfactory to Lender, insuring against all such excluded acts orevents in the amounts required for such coverage under subsections (i) and(iii) above, or such lesser amount as may be approved by Lender in its solediscretion. The endorsement or policy shall be in form and
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substance reasonably satisfactory to Lender and shall meet Rating Agency criteria forsecuritized loans.     (xi) upon sixty (60) days’ notice, such other reasonable insurance and in suchreasonable amounts as Lender from time to time may reasonably request against such otherinsurable hazards which at the time are commonly insured against for property similar tothe Property located in or around the region in which the Property is located.          (b) All insurance provided for in Section 5.1.1(a) shall be obtained under valid andenforceable policies (collectively, the **“****Policies****”**or, in the singular, the**“****Policy****”**) and, to the extent not specified above, shall be subject to the approval ofLender as to deductibles, loss payees and insureds. Not less than fifteen (15) days prior to theexpiration dates of the Policies theretofore furnished to Lender, certificates of insuranceevidencing the Policies accompanied by evidence satisfactory to Lender of payment of the premiumsthen due thereunder (the **“****Insurance Premiums****”**), shall be delivered by Borrower to Lender.          (c) Any blanket insurance Policy shall specifically allocate to the Property the amount ofcoverage from time to time required hereunder and shall otherwise provide the same protection aswould a separate Policy insuring only the Property in compliance with the provisions of Section5.1.1(a).          (d) All Policies of insurance provided for or contemplated by Section 5.1.1(a) shallbe primary coverage and, except for the Policy referenced in Section 5.1.1(a)(v), shallname Borrower as the insured and Lender and its successors and/or assigns as the additionalinsured, as its interests may appear, and in the case of property damage, boiler and machinery,flood, earthquake and terrorism insurance, shall contain a so-called New York standard noncontributing mortgagee clause in favor of Lender providing that the loss thereunder shall bepayable to Lender. Borrower shall not procure or permit any of its constituent entities to procureany other insurance coverage which would be on the same level of payment as the Policies or wouldadversely impact in any way the ability of Lender or Borrower to collect any proceeds under any ofthe Policies.          (e) All Policies of insurance provided for in Section 5.1.1(a), except for thePolicies referenced in Sections 5.1.1(a)(v) and (a)(viii), shall contain clauses orendorsements to the effect that:     (i) no act or negligence of Borrower, or anyone acting for Borrower, or of any Tenantor other occupant, or failure to comply with the provisions of any Policy, which mightotherwise result in a forfeiture of the insurance or any part thereof, shall in any wayaffect the validity or enforceability of the insurance insofar as Lender isconcerned;     (ii) the Policy shall not be canceled or permitted to lapse without at least thirty(30) days’ written notice to Lender and any other party named therein as an additionalinsured and, shall not be materially changed (other than to increase the coverage providedthereby) without such a thirty (30) day notice; and
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     (iii) Lender shall not be liable for any Insurance Premiums thereon or subjectto any assessments thereunder.          (f) If at any time Lender is not in receipt of written evidence that all insurance requiredhereunder is in full force and effect, Lender shall have the right, without notice to Borrower, totake such action as Lender deems necessary to protect its interest in the Property, including,without limitation, the obtaining of such insurance coverage as Lender in its sole discretion deemsappropriate and all premiums incurred by Lender in connection with such action or in obtaining suchinsurance and keeping it in effect shall be paid by Borrower to Lender upon demand and until paidshall be secured by the Mortgage and shall bear interest at the Default Rate.          (g) In the event of foreclosure of the Mortgage or other transfer of title to the Property inextinguishment in whole or in part of the Debt, all right, title and interest of Borrower in and tothe Policies that are not blanket Policies then in force concerning the Property and all proceedspayable thereunder shall upon transfer of title to the Property vest in the purchaser at suchforeclosure or Lender or other transferee in the event of such other transfer of title.          **5.1.2****Insurance Company****.**All Policies, excluding “flood hazard” and “earthquake” Policiesprovided for in Section 5.1.1(a)(i) hereof, shall be issued by financially sound and responsibleinsurance companies authorized to do business in the state in which the Property is located andhaving a claims paying ability rating of “A” or better by S&P and the equivalent rating by one ofthe other Rating Agencies.          **Section 5.2 Casualty and Condemnation.**          **5.2.1****Casualty****.**If the Property shall sustain a Casualty, Borrower shall give promptnotice of such Casualty to Lender and shall promptly commence and diligently prosecute tocompletion the repair and restoration of the Property as nearly as possible to the condition theProperty was in immediately prior to such Casualty (a “**Restoration**”) and otherwise inaccordance with Section 5.3, it being understood, however, that Borrower shall not be obligated torestore the Property to the precise condition of the Property prior to such Casualty provided theProperty is restored, to the extent practicable, to be of at least equal value and of substantiallythe same character as prior to the Casualty. Borrower shall pay all costs of such Restorationwhether or not such costs are covered by insurance. Lender may, but shall not be obligated to, makeproof of loss if not made promptly by Borrower. In the event of a Casualty where the loss does notexceed the Restoration Threshold, Borrower may settle and adjust suchclaim; provided that (a) noEvent of Default has occurred and is continuing and (b) such adjustment is carried out in acommercially reasonable and timely manner. In the event of a Casualtywhere the loss exceeds the Restoration Threshold or if an Event of Default then exists, Borrowermay settle and adjust such claim only with the prior written consent of Lender (which consent shallnot be unreasonably withheld or delayed) and Lender shall have the opportunity to participate, atBorrower’s cost, in any such adjustments. Notwithstanding any Casualty, Borrower shall continue topay the Debt at the time and in the manner provided for its payment in the Note and in thisAgreement.
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          **5.2.2****Condemnation****.**Borrower shall give Lender prompt notice of any actual orthreatened Condemnation by any Governmental Authority of all or any part of the Property and shalldeliver to Lender a copy of any and all papers served in connection with such proceedings. Borrowermay settle and compromise the Condemnation only with prior written the consent of Lender (whichconsent shall not be unreasonably withheld or delayed) and Lender shall have the opportunity toparticipate, at Borrower’s cost, in any litigation and settlement discussions in respect thereofand Borrower shall from time to time deliver to Lender all instruments requested by Lender topermit such participation. Borrower shall, at its expense, diligently prosecute any suchproceedings, and shall consult with Lender, its attorneys and experts, and cooperate with them inthe carrying on or defense of any such proceedings following an Event of Default that remainsuncured. Lender is hereby irrevocably appointed as Borrower’s attorney-in-fact, coupled with aninterest, with exclusive power to collect, receive and retain any Award and to make any compromiseor settlement in connection with any such Condemnation. Notwithstanding any Condemnation, Borrowershall continue to pay the Debt at the time and in the manner provided for its payment in the Noteand in this Agreement. Lender shall not be limited to the interest paid on the Award by anyGovernmental Authority but shall be entitled to receive out of the Award interest at the rate orrates provided herein or in the Note. If the Property or any portion thereof is taken by anyGovernmental Authority, Borrower shall promptly commence and diligently prosecute the Restorationof the Property and otherwise comply with the provisions ofSection 5.3. If the Property is sold,through foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender shall havethe right, whether or not a deficiency judgment on the Note shall have been sought, recovered ordenied, to receive the Award, or a portion thereof sufficient to pay the Debt.          **5.2.3****Casualty Proceeds****.**Notwithstanding the last sentence of Section 5.1.1(a)(iii)and provided no Event of Default then exists hereunder, proceeds received by Lender on account ofthe business interruption insurance specified inSection 5.1.1(a)(iii) above with respect to anyCasualty shall be deposited by Lender directly into the Lockbox Account (as defined in the CashManagement Agreement) but (a) only to the extent it reflects a replacement for lost Rents thatwould have been due under Leases existing on the date of such Casualty, and (b) only to the extentnecessary to fully make the disbursements required by Sections 3.3(a)(i) through (vi) of the CashManagement Agreement. All other such proceeds shall be held by Lender and disbursed in accordancewith Section 5.3 hereof.          **Section 5.3 Delivery of Net Proceeds.**          **5.3.1****Minor Casualty or Condemnation****.**If a Casualty or Condemnation has occurred tothe Property and the Net Proceeds shall be less than the Restoration Threshold and the costs ofcompleting the Restoration shall be less than the Restoration Threshold, and provided (a) no Eventof Default shall have occurred and remain uncured and (b) the Casualty or Condemnation shall haveoccurred prior to the Maturity Date, the Net Proceeds will be promptly disbursed by Lender toBorrower. Promptly after receipt of the Net Proceeds, Borrower shall commence and satisfactorilycomplete with due diligence the Restoration in accordance with the terms of this Agreement. If anyNet Proceeds are received by Borrower and may be retained by Borrower pursuant to the terms hereof,such Net Proceeds shall, until completion of the Restoration, be held in trust for Lender and shallbe segregated from other funds of Borrower to be used to pay for the cost of Restoration inaccordance with the terms hereof.
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          **5.3.2****Major Casualty or Condemnation****.** (a) If a Casualty or Condemnation has occurredto the Property and the Net Proceeds are equal to or greater than the Restoration Threshold or thecosts of completing the Restoration is equal to or greater than the Restoration Threshold, Lendershall make the Net Proceeds available for the Restoration, provided that each of the followingconditions are met:     (i) no Event of Default shall have occurred and be continuing;     (ii) (A) in the event the Net Proceeds are insurance proceeds, less than thirty-fivepercent (35%) of the total floor area of the Improvements at the Property has beendamaged, destroyed or rendered unusable as a result of such Casualty or (B) in the eventthe Net Proceeds are an Award, less than fifteen percent (15%) of the landconstituting the Property is taken, and such land is located along the perimeter orperiphery of the Property, and no portion of the Improvements is the subject of theCondemnation;     (iii) Leases requiring payment of annual rent equal to sixty-five percent (65%) ofthe Gross Income from Operations received by Borrower during the twelve (12) month periodimmediately preceding the Casualty or Condemnation and all Major Leases shall remain infull force and effect during and after the completion of the Restoration withoutabatement of rent beyond the time required for Restoration, notwithstanding the occurrenceof such Casualty or Condemnation;     (iv) Borrower shall commence the Restoration as soon as reasonably practicable (butin no event later than sixty (60) days after such Casualty or Condemnation, whichever thecase may be, occurs) and shall diligently pursue the same to satisfactory completion;     (v) Lender shall be satisfied that any operating deficits and all payments ofinterest under the Note will be paid during the period required for Restoration from (A)the Net Proceeds, or (B) other funds of Borrower;     (vi) Lender shall be satisfied that the Restoration will be completed on or beforethe earliest to occur of (A) the date six (6) months prior to the Maturity Date, (B) theearliest date required for such completion under the terms of any Major Lease, (C) suchtime as may be required under applicable Legal Requirements in order to repairand restore the Property to the condition it was in immediately prior to such Casualty orto as nearly as possible the condition it was in immediately prior to such Condemnation,as applicable or (D) the expiration of the insurance coverage referred to in Section5.1.1(a)(iii);     (vii) the Property and the use thereof after the Restoration will be in compliancewith and permitted under all applicable Legal Requirements;     (viii) the Restoration shall be done and completed by Borrower in an expeditious anddiligent fashion and in compliance with all applicable Legal Requirements;
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     (ix) such Casualty or Condemnation, as applicable, does not result in the loss oflegal access to the Property or the related Improvements;     (x) all Operating Agreements shall remain in full force and effect; and     (xi) After giving effect to such Restoration, the Debt Service Coverage Ratio for theProperty shall be equal to the greater of (i) the Debt Service Coverage Ratio for thetwelve (12) full calendar months immediately preceding the Closing Date, and (ii) the DebtService Coverage Ratio for the Property for the twelve (12) full calendar monthsimmediately preceding the Casualty or Condemnation of the Property.          (b) The Net Proceeds shall be paid directly to Lender and held by Lender in aninterest-bearing account, which interest shall accrue for Borrower’s benefit, and, until disbursedin accordance with the provisions of this Section 5.3.2, shall constitute additionalsecurity for the Debt. The Net Proceeds (including all interest earned thereon) shall be disbursedby Lender to, or as directed by, Borrower from time to time during the course of the Restoration,upon receipt of evidence reasonably satisfactory to Lender that (i) all requirements set forth inSection 5.3.2(a) have been satisfied, (ii) all materials installed and work and labor performed(except to the extent that they are to be paid for out of the requested disbursement) in connectionwith the Restoration have been paid for in full, and (iii) there exist no notices of pendency, stoporders, mechanic’s or materialman’s liens or notices of intention to file same, or any other liensor encumbrances of any nature whatsoever on the Property arising out of the Restoration which havenot either been fully bonded to the satisfaction of Lender and discharged of record or in thealternative fully insured to the satisfaction of Lender by the title company issuing the TitleInsurance Policy.          (c) All plans and specifications required in connection with the Restoration shall be subjectto prior reasonable approval of Lender and an independent architect reasonably selected by Lender(the “**Casualty Consultant**”). The plans and specifications shall require that theRestoration be completed in a first-class workmanlike manner at least equivalent to the quality andcharacter of the original work in the Improvements (provided, however, that in thecase of a partial Condemnation, the Restoration shall be done to the extent reasonably practicableafter taking into account the consequences of such partial Condemnation), so that upon completionthereof, the Property shall be at least equal in value and general utility to the Property prior tothe damage or destruction; it being understood, however, that Borrower shall not be obligated torestore the Property to the precise condition of the Property prior to such Casualty provided theProperty is restored, to the extent practicable, to be of at least equal value and of substantiallythe same character as prior to the Casualty. Borrower shall restore all Improvements such that whenthey are fully restored and/or repaired, such Improvements and their contemplated use fully complywith all applicable material Legal Requirements. The identity of the contractors, subcontractorsand materialmen engaged in the Restoration, as well as the contracts under which they have beenengaged, shall be subject to reasonable approval by Lender and the Casualty Consultant. All costsand expenses incurred by Lender in connection with recovering, holding and advancing the NetProceeds for the Restoration including, without limitation, reasonableattorneys’ fees and disbursements and the Casualty Consultant’s fees and disbursements, shall bepaid by Borrower.
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          (d) In no event shall Lender be obligated to make disbursements of the Net Proceeds in excessof an amount equal to the costs actually incurred from time to time for work in place as part ofthe Restoration, as certified by the Casualty Consultant, less the Casualty Retainage. The term“**Casualty Retainage**” shall mean, as to each contractor, subcontractor or materialmanengaged in the Restoration, an amount equal to ten percent (10%) of the costs actually incurred forwork in place as part of the Restoration, as certified by the Casualty Consultant, until theRestoration has been completed. The Casualty Retainage shall in no event, and notwithstandinganything to the contrary set forth above in this Section 5.3.2(d), be less than the amountactually held back by Borrower from contractors, subcontractors and materialmen engaged in theRestoration. The Casualty Retainage shall not be released until the Casualty Consultant certifiesto Lender that the Restoration has been completed in accordance with the provisions of thisSection 5.3.2(d) and that all approvals necessary for the re-occupancy and use of theProperty have been obtained from all appropriate Governmental Authorities, and Lender receivesevidence satisfactory to Lender that the costs of the Restoration have been paid in full or will bepaid in full out of the Casualty Retainage; provided, however, that Lender willrelease the portion of the Casualty Retainage being held with respect to any contractor,subcontractor or materialman engaged in the Restoration as of the date upon which the CasualtyConsultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorilycompleted all work and has supplied all materials in accordance with the provisions of thecontractor’s, subcontractor’s or materialman’s contract, the contractor, subcontractor ormaterialman delivers the lien waivers and evidence of payment in full of all sums due to thecontractor, subcontractor or materialman as may be reasonably requested by Lender or by the titlecompany issuing the Title Insurance Policy, and Lender receives an endorsement to the TitleInsurance Policy insuring the continued priority of the lien of the Mortgage and evidence ofpayment of any premium payable for such endorsement. If required by Lender, the release of any suchportion of the Casualty Retainage shall be approved by the surety company, if any, which has issueda payment or performance bond with respect to the contractor, subcontractor or materialman.          (e) Lender shall not be obligated to make disbursements of the Net Proceeds more frequentlythan once every calendar month.          (f) If at any time the Net Proceeds or the undisbursed balance thereof shall not, in theopinion of Lender in consultation with the Casualty Consultant, be sufficient to pay in full thebalance of the costs which are estimated by the Casualty Consultant to be incurred in connectionwith the completion of the Restoration, Borrower shall deposit the deficiency (the “**NetProceeds Deficiency**”) with Lender before any further disbursement of the Net Proceeds shall bemade. The Net Proceeds Deficiency deposited with Lender shall be held by Lender and shall bedisbursed for costs actually incurred in connection with the Restoration on the same conditionsapplicable to the disbursement of the Net Proceeds, and until so disbursed pursuant to thisSection 5.3.2 shall constitute additional security for the Debt.          (g) The excess, if any, of the Net Proceeds and the remaining balance, if any, of the NetProceeds Deficiency deposited with Lender after the Casualty Consultant certifies to Lender thatthe Restoration has been completed in accordance with the provisions of this Section 5.3.2,and the receipt by Lender of evidence satisfactory to Lender that all costs incurred in connectionwith the Restoration have been paid in full, shall be remitted by Lender to Borrower,provided no Event of Default shall have occurred and shall be continuing under any of
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theLoan Documents; provided, however, the amount of such excess returned to Borrowerin the case of a Condemnation shall not exceed the amount of Net Proceeds Deficiency deposited byBorrower with the balance being applied to the Debt in the manner provided for in subsection5.3.2(h).          (h) All Net Proceeds not required (i) to be made available for the Restoration or (ii) to bereturned to Borrower as excess Net Proceeds pursuant to Section 5.3.2(g) may be retainedand applied by Lender toward the payment of the Debt, whether or not then due and payable, in suchorder, priority and proportions as Lender in its sole discretion shall deem proper, or, at thediscretion of Lender, the same may be paid, either in whole or in part, to Borrower for suchpurposes as Lender shall designate, without prepayment premium or other penalty.          **VI. RESERVE FUNDS**          **Section 6.1 Required Repair Funds.**          **6.1.1****Deposit of Required Repair Funds****.**Borrower shall perform the repairs at theProperty as set forth on Schedule II hereto (such repairs hereinafter referred to as “**RequiredRepairs**”) and shall complete each of the Required Repairs on or before the respective deadlinefor each repair as set forth on Schedule II. On the Closing Date, Borrower shall deposit withLender theamount that is one hundred and twenty-five percent (125%) of the cost to perform such RequiredRepairs as set forth on Schedule II hereto to perform the Required Repairs. Amounts depositedpursuant to this Section 6.1.1 are referred to herein as the “**Required RepairFunds.**”          **6.1.2****Release of Required Repair Funds****.**With respect to any item of Required Repairswhich has been completed, Lender shall disburse, or cause to be disbursed, to Borrower the RequiredRepair Funds upon satisfaction by Borrower of each of the following conditions: (a) Borrower shallsubmit a request for payment to Lender at least ten (10) days prior to the date on which Borrowerrequests such payment be made and specifies the Required Repairs to be paid, (b) on the date suchrequest is received by Lender and on the date such payment is to be made, no Event of Default shallexist and remain uncured, (c) Lender shall have received a certificate from Borrower (i) statingthat all Required Repairs to be funded by the requested disbursement have been completed in a goodand workmanlike manner and in accordance with all applicable Legal Requirements, such certificateto be accompanied by a copy of any license, permit or other approval by any Governmental Authority,if any, required in connection with the Required Repairs, (ii) identifying each Person thatsupplied materials or labor in connection with the Required Repairs to be funded by the requesteddisbursement, and (iii) stating that each such Person has been paid in full or will be paid in fullupon such disbursement, such certificate to be accompanied by lien waivers or other evidence ofpayment satisfactory to Lender, (d) at Lender’s option, a title search for the Property indicatingthat the Property is free from all liens, claims and other encumbrances not previously approved byLender, (e) at Lender’s option, if the cost of the Required Repairs exceeds Twenty-Five Thousandand No/100 Dollars ($25,000.00), Lender shall have received a report satisfactory to Lender in itsreasonable discretion from an architect or engineer approved by Lender in respect of such architector engineer’s inspection of the required repairs, and (f) Lender shall have received such otherevidence as Lender shall reasonably request that the Required Repairs to be
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funded by the requesteddisbursement have been completed and are paid for or will be paid upon such disbursement toBorrower. Lender shall not be required to disburse Required Repair Funds more frequently than onceeach calendar month, and the requested disbursement must be at least in an amount equal to theMinimum Disbursement Amount (or a lesser amount if the total Required Repair Funds is less than theMinimum Disbursement Amount, in which case only one disbursement of the amount remaining in theaccount shall be made). Lender shall have the right, but not the obligation, to make any of theRequired Repairs in the event Borrower fails to perform same in accordance with Section6.1.1.          **Section 6.2 Tax Funds.**          **6.2.1****Deposits of Tax Funds****.**On the Closing Date, Borrower shall deposit with Lenderthe amount of Twenty Nine Thousand Eight Hundred Forty Five and 90/100 Dollars ($29,845.90) andthere shall be deposited to the appropriate Accounts on each Monthly Payment Date an amount equalto one-twelfth of the Taxes that Lender estimates will be payable during the next ensuing twelve (12)months in order to accumulate sufficient funds to pay all such Taxes at least ten (10) days priorto their respective due dates. Amounts deposited pursuant to thisSection 6.2.1 are referred toherein as the “**Tax Funds.**” If at any time Lender reasonably determines that the Tax Funds will notbe sufficient to pay the Taxes, Lender shall notify Borrower of such determination and the monthlydeposits for Taxes shall be increased by the amount that Lender estimates is sufficient to make upthe deficiency at least ten (10) days prior to the respective delinquent dates for the Taxes;provided that if Borrower receives notice of any deficiency after the date that is ten (10) daysprior to the date that Taxes are due, Borrower will deposit such amount within two (2) BusinessDays after its receipt of such notice.          **6.2.2****Release of Tax Funds****.**Unless an Event of Default has occurred and is continuing,Lender shall apply the Tax Funds to payments of Taxes. In making any payment relating to Taxes,Lender may do so according to any bill, statement or estimate procured from the appropriate publicoffice (with respect to Taxes) without inquiry into the accuracy of such bill, statement orestimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claimthereof. If the amount of the Tax Funds shall exceed the amounts due for Taxes, Lender shall, inits sole discretion, return any excess to Borrower or credit such excess against future payments tobe made to the Tax Funds. Any Tax Funds remaining after the Debt has been paid in full shall bereturned to Borrower.          **Section 6.3 Insurance Funds.**          **6.3.1****Deposits of Insurance Funds****.**On the Closing Date, Borrower shall deposit withLender the amount of Five Thousand Seven Hundred Thirty and No/100 Dollars ($5,730.00) and thereshall be deposited to the appropriate Accounts on each Monthly Payment Date an amount equal toone-twelfth of the Insurance Premiums that Lender estimates will be payable for the renewal of thecoverage afforded by the Policies upon the expiration thereof in order to accumulate sufficientfunds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of thePolicies. Amounts deposited pursuant to this Section 6.3.1 are referred to herein as the“**Insurance Funds**”. If at any time Lender reasonably determines that the Insurance Fundswill not be sufficient to pay the Insurance Premiums, Lender shall notify Borrower of suchdetermination and the monthly deposits for Insurance Premiums shall be
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increased by the amount thatLender estimates is sufficient to make up the deficiency at least thirty (30) days prior toexpiration of the Policies.          **6.3.2****Release of Insurance Funds****.**Unless an Event of Default has occurred and iscontinuing, Lender shall apply the Insurance Funds to payment of Insurance Premiums. In making anypayment relating to Insurance Premiums, Lender may do so according to any bill, statement orestimateprocured from the insurer or its agent, without inquiry into the accuracy of such bill, statementor estimate. If the amount of the Insurance Funds shall exceed the amounts due for InsurancePremiums, Lender shall return any excess to Borrower. Any Insurance Funds remaining after the Debthas been paid in full shall be returned to Borrower.          **Section 6.4 Capital Expenditure Funds.**          **6.4.1****Deposits of Capital Expenditure Funds****.**On the Closing Date, Borrower shalldeposit with Lender the amount of Two Thousand Five Hundred Fourteen and 16/100 Dollars ($2,514.16)and there shall be deposited to the appropriate Accounts on each Monthly Payment Date, an amountequal to Two Thousand Five Hundred Fourteen and 16/100 Dollars ($2,514.16) for annual CapitalExpenditures approved by Lender, which approval shall not be unreasonably withheld or delayed;provided, however, Borrower shall have no obligation to make deposits under thisSection 6.4.1 during any month in which the amount then on deposit in the appropriateAccount is greater than or equal to $250,000. Amounts deposited pursuant to this Section6.4.1 are referred to herein as the “**Capital Expenditure Funds.**” Lender may reassessits estimate of the amount necessary for capital expenditures from time to time and, and mayrequire Borrower to increase the monthly deposits required pursuant to this Section 6.4.1 uponthirty (30) days notice to Borrower if Lender determines in its reasonable discretion that anincrease is necessary to maintain proper operation of the Property.          **6.4.2****Release of Capital Expenditure Funds.**          (a) Lender shall disburse, or cause to be disbursed, Capital Expenditure Funds only forCapital Expenditures.          (b) Lender shall disburse, or cause to be disbursed, to Borrower the Capital Expenditure Fundsupon satisfaction by Borrower of each of the following conditions: (i) Borrower shall submit arequest for payment to Lender at least ten (10) days prior to the date on which Borrower requestssuch payment be made and specifies the Capital Expenditures to be paid, (ii) on the date suchrequest is received by Lender and on the date such payment is to be made, no Event of Default shallexist and remain uncured, (iii) Lender shall have received a certificate from Borrower (A) statingthat the items to be funded by the requested disbursement are Capital Expenditures, (B) statingthat all Capital Expenditures at the Property to be funded by the requested disbursement have beencompleted in a good and workmanlike manner and in accordance with all applicable LegalRequirements, such certificate to be accompanied by a copy of any license, permit or other approvalrequired by any Governmental Authority, if any, inconnection with the Capital Expenditures, (C) identifying each Person that supplied materials orlabor in connection with the Capital Expenditures to be funded by the requested disbursement, and(D) stating that each such Person has been paid in full or will be paid in full upon suchdisbursement, such certificate to be accompanied by lien waivers or other evidence of payment
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satisfactory to Lender, (iv) at Lender’s option, a title search for the Property indicating thatthe Property is free from all Liens, claims and other encumbrances not previously approved byLender, (v) at Lender’s option, if the cost of any individual Capital Expenditure exceeds TwentyFive Thousand and No/100 Dollars ($25,000.00), Lender shall have received a report satisfactory toLender in its reasonable discretion from an architect or engineer approved by Lender in respect ofsuch architect or engineer’s inspection of the required repairs, and (vi) Lender shall havereceived such other evidence as Lender shall reasonably request that the Capital Expenditures atthe Property to be funded by the requested disbursement have been completed and are paid for orwill be paid upon such disbursement to Borrower. Lender shall not be required to disburse CapitalExpenditure Funds more frequently than once each calendar month, and each disbursement must be atleast an amount greater than the Minimum Disbursement Amount (or a lesser amount if the totalamount of Capital Expenditure Funds is less than the Minimum Disbursement Amount, in which caseonly one disbursement of the amount remaining in the account shall be made).          (c) Nothing in this Section 6.4.2 shall (i) make Lender responsible for making or completingthe Capital Expenditures Work; (ii) require Lender to expend funds in addition to the CapitalExpenditure Funds to complete any Capital Expenditures Work; (iii) obligate Lender to proceed withthe Capital Expenditures Work; or (iv) obligate Lender to demand from Borrower additional sums tocomplete any Capital Expenditures Work.          (d) Borrower shall permit Lender and Lender’s agents and representatives (including, withoutlimitation, Lender’s engineer, architect, or inspector) or third parties to enter onto the Propertyduring normal business hours (subject to the rights of Tenants under their Leases) to inspect theprogress of any Capital Expenditures Work and all materials being used in connection therewith andto examine all plans and shop drawings relating to such Capital Expenditures Work. Any suchinspection shall be conducted in a manner designed to minimize interference with Tenants orBorrower’s operation of the Property. Borrower shall cause all contractors and subcontractors tocooperate with Lender or Lender’s representatives or such other Persons described above inconnection with inspections described in this Section 6.4.2(d).          **Section 6.5 Rollover Funds.**          **6.5.1****Deposits of Rollover Funds****.**On the Closing Date, Borrower shall deposit withLender the amount of Thirty Two Thousand and No/00 Dollars ($32,000.00) and there shall bedeposited to the appropriate Account on each Monthly Payment Date the sum of Thirty Two Thousandand No/00 Dollars ($32,000.00), for tenant improvements and leasing commissions, lease cancellationfees, buy-out fees or a similar cost that may be incurred following the date hereof;provided, however, Borrower shall have no obligation to make deposits under thisSection 6.5.1 during any month in which the amount then on deposit in the appropriateAccount is greater than or equal to $500,000. Amounts deposited pursuant to this Section6.5.1 are referred to herein as the “**Rollover Funds.**”          **6.5.2****Release of Rollover Funds****.**Lender shall disburse, or cause to be disbursed, toBorrower the Rollover Funds upon satisfaction by Borrower of each of the following conditions: (a)Borrower shall submit a request for payment to Lender at least ten (10) days prior to the date onwhich Borrower requests such payment be made and specifies the tenant
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improvement costs and leasingcommissions to be paid, (b) on the date such request is received by Lender and on the date suchpayment is to be made, no Event of Default shall exist and remain uncured, (c) subject toSection 4.1.9 hereof, Lender shall have reviewed and approved the Lease in respect of whichBorrower is obligated to pay or reimburse certain tenant improvement costs and leasing commissions(to the extent approval is required pursuant to Section 4.1.9 hereof), (d) Lender shallhave received and approved a budget for tenant improvement costs and a schedule of leasingcommissions payments and the requested disbursement will be used to pay all or a portion of suchcosts and payments, (e) Lender shall have received a certificate from Borrower (i) stating that alltenant improvements at the Property to be funded by the requested disbursement have been completedin good and workmanlike manner and in accordance with all applicable federal, state and local laws,rules and regulations, such certificate to be accompanied by a copy of any license, permit or otherapproval by any Governmental Authority required in connection with the Capital Expenditures, (ii)identifying each Person that supplied materials or labor in connection with the tenant improvementsto be funded by the requested disbursement, and (iii) stating that each such Person has been paidin full or will be paid in full upon such disbursement, such certificate to be accompanied by lienwaivers or other evidence of payment satisfactory to Lender, (f) at Lender’s option, a title searchfor the Property indicating that the Property is free from all Liens, claims and other encumbrancesnot previously approved by Lender, (g) Lender shall have received an estoppel certificate from theapplicable tenant stating that (i) all required work is complete and (ii) such tenant is inoccupancy and paying full unabated rent or has taken possession of the demised premises, and (h)Lender shall have received such other evidence as Lender shall reasonably request that the tenantimprovements at the Property to be funded by the requested disbursement have been completed and arepaid for or will be paid upon such disbursement to Borrower. Lender shall not be required todisburse Rollover Funds more frequently than once each calendar month, and each disbursement mustbe in an amount greater than the Minimum Disbursement Amount (or a lesser amount if the totalamount of Rollover Funds is less than the Minimum Disbursement Amount, in which case only onedisbursement of the amount remaining in the account shall be made).          **Section 6.6 Intentionally Deleted.**          **Section 6.7 Security Interest in Reserve Funds.**          **6.7.1****Grant of Security Interest****.**Borrower hereby pledges to Lender, and grants toLender a security interest in, any and all monies now or hereafter deposited in the Reserve Fundsas additional security for the payment of the Loan. The Reserve Funds shall be held in Lender’sname and may be commingled with Lender’s own funds at financial institutions selected by Lender inits sole discretion. Upon the occurrence of an Event of Default, Lender may apply any sums thenpresent in the Reserve Funds to the payment of the Loan in any order in its sole discretion. Untilexpended or applied as above provided, the Reserve Funds shall constitute additional security forthe Loan. Lender shall have no obligation to release any of the Reserve Funds while any Event ofDefault or Default then exists.          **6.7.2****Interest on Reserve Funds****.**All interest or income earned on any and all funds ondeposit in any of the Reserve Funds shall be accumulated for the benefit of Borrower.
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          **6.7.3****Prohibition Against Further Encumbrance****.**Borrower shall not, without the priorconsent of Lender, further pledge, assign or grant any security interest in the Reserve Funds orpermit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1Financing Statements, except those naming Lender as the secured party, to be filed with respectthereto.          **VII.PROPERTY MANAGEMENT SECTION**          **Section 7.1 The Management Agreement.**          Borrower shall cause Manager to manage the Property in accordance with the ManagementAgreement. Borrower shall (a) diligently perform and observe all of the terms, covenants andconditions of the Management Agreement on the part of Borrower to be performed and observed, (b)promptly notify Lender of any notice to Borrower of any default that has occurred and is continuingbeyond expiration of applicable cure periods by Borrower in the performance or observance of any ofthe terms, covenants or conditions of the Management Agreement on the part of Borrower to beperformed and observed, and (c) promptly deliver to Lender a copy of each financial statement,business plan, capital expenditures plan, report and estimate received by it under the ManagementAgreement. If Borrowershall default beyond expiration of applicable cure periods in the performance or observance of anymaterial term, covenant or condition of the Management Agreement on the part of Borrower to beperformed or observed, then, without limiting Lender’s other rights or remedies under thisAgreement or the other Loan Documents, and without waiving or releasing Borrower from any of itsobligations hereunder or under the Management Agreement, Lender shall have the right, but shall beunder no obligation, to pay any sums and to perform any act as may be appropriate to cause all thematerial terms, covenants and conditions of the Management Agreement on the part of Borrower to beperformed or observed.          **Section 7.2 Prohibition Against Termination or Modification.**          Borrower shall not surrender, terminate, cancel, modify, renew, amend, or extend theManagement Agreement, or enter into any other agreement relating to the management or operation ofthe Property with Manager or any other Person, or consent to the assignment by the Manager of itsinterest under the Management Agreement, in each case without the express written consent ofLender, which consent shall not be unreasonably withheld;provided, however, with respect to a newmanager such consent may be conditioned upon Borrower delivering a Rating Agency Confirmation as tosuch new manager and management agreement and, if such new manager is an Affiliate of Borrower,upon delivery of a non-consolidation opinion acceptable to the Rating Agencies. If at any timeLender consents to the appointment of a new manager, such new manager and Borrower shall, as acondition of Lender’s consent, execute a subordination of management agreement in the form thenused by Lender. Notwithstanding the foregoing, Borrower shall have the right to terminate theManagement Agreement and enter into a new management agreement upon terms reasonably acceptable toLender with the Approved Property Manager; provided,however, Borrower shall (i) pay all ofLender’s expenses in connection therewith, and (ii) enter into an Assignment of ManagementAgreement with Lender similar to that which Lender and Manager have entered into as of the datehereof.
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          **Section 7.3 Replacement of Manager.**          Lender shall have the right to require Borrower to replace the Manager with a Person which isnot an Affiliate of, but is chosen by, Borrower and approved by Lender upon the occurrence of anyone or more of the following events: (a) at any time following the occurrence of an Event ofDefault, (b) if Manager shall be in default under the Management Agreement beyond any applicablenotice and cure period and/or (c) if Manager becomes insolvent or is adjudicated bankrupt or if anypetition for bankruptcy shall be filed against or consented to by Manager.          **VIII. TRANSFERS**          **Section 8.1 Prohibited Transfer or Encumbrance of Property.**          (a) Borrower shall not cause or permit a Sale or Pledge of the Property or any part thereof orany legal or beneficial interest therein nor permit a Sale or Pledge of an interest in anyRestricted Party (in each case, a “**Prohibited Transfer**”), other than pursuant to Leases ofspace in the Improvements to Tenants in accordance with the provisions of Section 4.1.9,without the prior written consent of Lender.          (b) A Prohibited Transfer shall include, but not be limited to, (i) an installment salesagreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paidin installments; (ii) an agreement by Borrower leasing all or a substantial part of the Propertyfor other than actual occupancy by a space tenant thereunder or a sale, assignment or othertransfer of, or the grant of a security interest in, Borrower’s right, title and interest in and toany Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation orSale or Pledge of such corporation’s stock or the creation or issuance of new stock in one or aseries of transactions; (iv) if a Restricted Party is a limited or general partnership or jointventure, any merger or consolidation or the change, removal, resignation or addition of a generalpartner or the Sale or Pledge of the partnership interest of any general or limited partner or anyprofits or proceeds relating to such partnership interests or the creation or issuance of newpartnership interests; (v) if a Restricted Party is a limited liability company, any merger orconsolidation or the change, removal, resignation or addition of a managing member or non-membermanager (or if no managing member, any member) or the Sale or Pledge of the membership interest ofany member or any profits or proceeds relating to such membership interest; (vi) if a RestrictedParty is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal orbeneficial interest in a Restricted Party or the creation or issuance of new legal or beneficialinterests; or (vii) the removal or the resignation of the Manager (including, without limitation,an Affiliated Manager) other than in accordance with Article VII.          (c) Notwithstanding the provisions of Section 8.1(b), the following transfers shallnot be deemed to be a Prohibited Transfer: (i) a transfer by devise or descent or by operation oflaw upon the death of a member, partner or shareholder of a Restricted Party; (ii) the Sale orPledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the stock,limited partnership interests or non-managing membership interests (as the case may be) in aRestricted Party; provided, however, no such transfers shall result in a change inControl in the Restricted Party or change in control of the Property, and as a condition to each
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such transfer, Lender shall receive not less than twenty (20) days prior written notice of suchproposed transfer, (iii) the sale, transfer, cancellation or issuance of stock or other securitiesof Cedar Shopping Centers, Inc., a Maryland corporation, provided such stock or other securitiesare listed on the New York Stock Exchange or such other nationally recognized stockexchange, (iv) transfers of direct or indirect membership interests in Borrower between any thenexisting I&G Fund to another I&G Fund, provided that (A) Borrower shall maintain its statusas a single purpose, bankruptcy remote entity under criteria established by the Rating Agencies,(B) if after giving effect to such transfer and all prior transfers, more than forty-nine percent(49%) in the aggregate of direct or indirect interests in Borrower are owned by any Person and itsAffiliates that owned less than a forty nine percent (49%) direct or indirect interest in Borroweras of the Closing Date, Lender shall receive a non consolidation opinion acceptable to Lender andthe Rating Agencies, (v) from and after a transfer pursuant to Sections 8.2.2(a) or (b), transfersamongst the then existing members of Cedar-Franklin Village 2 LLC of their direct membershipinterests in Cedar-Franklin Village 2 LLC, provided that (A) Borrower shall maintain itsstatus as a single purpose, bankruptcy remote entity under criteria established by the RatingAgencies, (B) if after giving effect to such transfer and all prior transfers, more than forty-ninepercent (49%) in the aggregate of direct or indirect interests in Borrower are owned by any Personand its Affiliates that owned less than a forty nine percent (49%) direct or indirect interest inBorrower as of the Closing Date, Lender shall receive a non consolidation opinion acceptable toLender and the Rating Agencies and (vi) transfers of interests in the I&G Funds by investors insuch I&G Funds.          (d) Lender reserves the right to condition the consent to a Prohibited Transfer requestedhereunder upon (a) a modification of the terms hereof and on assumption of the Note and the otherLoan Documents as so modified by the proposed Prohibited Transfer, (b) receipt of payment of atransfer fee equal to 0.5% of the outstanding principal balance of the Loan and all of Lender’sexpenses actually incurred in connection with such Prohibited Transfer, (c) receipt of RatingAgency Confirmation with respect to the transfer, (d) the proposed transferee’s continuedcompliance with the covenants set forth in this Agreement (including, without limitation, thecovenants in Section 3.1.24) and the other Loan Documents, (e) a new manager for theProperty and a new management agreement satisfactory to Lender, (f) a new guaranty(ies) andenvironmental indemnity, substantially in the form of the Guaranty, Supplemental Guaranty, andEnvironmental Indemnity delivered contemporaneously with this Agreement, from guarantor(s) andindemnitor(s) satisfactory to Lender, and (g) the satisfaction of such other conditions and/orlegal opinions as Lender shall determine in its sole discretion to be in the interest of Lender.All expenses incurred by Lender shall be payable by Borrower whether or not Lender consents to theProhibited Transfer. Lender shall not be required to demonstrate any actual impairment of itssecurity or any increased risk of default hereunder in order to declare the Debt immediately dueand payable upon a Prohibited Transfer made without Lender’s consent. This provision shall apply toeach and every Prohibited Transfer, whether or not Lender has consented to any previous ProhibitedTransfer. Notwithstanding anything to the contrary contained in this Section 8.1(d), in theevent a substantive non-consolidation opinion was delivered to Lender and the Rating Agencies inconnection with the closing of the Loan, and if any Prohibited Transfer results in any Person andits Affiliates owning in excess of forty-nine percent (49%) of the ownership interests in aRestricted Party, Borrower shall, prior to such transfer, and in addition to any other requirementfor Lender consent contained herein, deliver a revised substantive
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non-consolidation opinion toLender reflecting such Prohibited Transfer,which opinion shall be in form, scope and substance acceptable in all respects to Lender and theRating Agencies.          **Section 8.2 Permitted Transfers**          **8.2.1****Permitted Transfer of the Property**          (a) Notwithstandingthe provisions of Section 8.1, Borrower shall have a one-time right tosell or otherwise transfer the Property while the Loan or any portion thereof is outstanding,subject to the satisfaction of the following conditions:     (i) no Event of Default shall have occurred and remain uncured;     (ii) the proposed transferee (“**Transferee**”) shall be a Permitted Transfereeand shall be a reputable entity or person of good character, creditworthy, with sufficientfinancial worth considering the obligations assumed and undertaken, as evidenced byfinancial statements and other information reasonably requested by Lender;     (iii) the Transferee and its property manager shall have sufficient experience in theownership and management of properties similar to the Property, and Lender shall beprovided with reasonable evidence thereof (and Lender reserves the right to approve theTransferee without approving the substitution of the property manager);     (iv) Lender shall have received Rating Agency Confirmation with respect to thetransfer;     (v) Lender shall have received evidence satisfactory to it (which shall include a legalnon-consolidation opinion acceptable to Lender) that the single purpose nature andbankruptcy remoteness of Borrower its shareholders, partners, or members, as the case maybe, following such transfer are in accordance with the standards of the RatingAgencies;     (vi) the Transferee shall have executed and delivered to Lender an assumptionagreement in form and substance acceptable to Lender, evidencing such Transferee’sagreement to abide and be bound by the terms of the Note, the Mortgage and the other LoanDocuments, together with such legal opinions and Title Insurance endorsements asmay be reasonably requested by Lender; and     (vii) Lender shall have received on or prior to the date of the sale or transfer (A)an assumption fee equal to one-half of one percent (0.50%) of the then unpaid principalbalance of the Note, (B) a rating confirmation fee for each of the Rating Agenciesdelivering a Rating Agency Confirmation pursuant to clause (iv) above, whichconfirmation fees shall be equal to the then customary fees charged by each applicableRating Agency for such a confirmation and (C) the payment of all costs and expensesactually incurred by Lender and the Rating Agencies in connection with such assumption(including reasonable attorneys’ fees and costs).     (viii) the Transferee shall comply with the provisions of Section 3.1.38 hereof.
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          **8.2.2****Permitted Transfer of Interest in Borrower**          (a) Notwithstanding the provisions of Section 8.1, Borrower and the holder of anydirect or indirect owner of ownership interest in Borrower shall have the right to transfer of notmore than an aggregate of 80% of the direct or indirect ownership interests in the Borrower to aQualified Transferee, provided that (i) no Event of Default shall have occurred and be continuing,(ii) Borrower shall pay all out-of-pocket fees and expenses actually incurred by Lender inconnection with such Transfer including, without limitation, the cost of any third party reports,reasonable legal fees and expenses, or required legal opinions, (iii) Lender shall have receivedthirty (30) days advance written notice from Borrower of such Transfer, (iv) Lender shall havereceived such documents, certificates and legal opinions as it may reasonably request, (v) if aftergiving effect to such Transfer and all prior transfers, more than forty-nine percent (49%) in theaggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliatesthat owned less than a forty nine percent (49%) direct or indirect interest in Borrower as of theClosing Date, Lender shall receive a non consolidation opinion acceptable to Lender and the RatingAgencies (vi) Borrower shall maintain its status as a single purpose, bankruptcy remote entityunder criteria established by the Rating Agencies, (vii) if after giving effect to such transferand all prior transfers, more than forty-nine percent (49%) in the aggregate of direct or indirectinterests in Borrower are proposed to be transferred, Lender shall have received a Rating AgencyConfirmation, (viii) the Transferee shall comply with the provisions of Section 3.1.38hereof and (ix) the Property is managed by an Approved Property Manager.          (b) Notwithstanding the provisions of Section 8.1, Borrower and the holder of anydirect or indirect owner of ownership interest in Borrower shall have the right to transfer of notmore than an aggregate of 80% of the direct or indirect ownership interests in the Borrower to oneor more of the I&G Funds, provided that (i) no Event of Default shall have occurred and becontinuing, (ii) Borrower shall pay all out-of-pocket fees and expenses actually incurred by Lenderin connection with such Transfer including, without limitation, the cost of any third partyreports, reasonable legal fees and expenses, or required legal opinions, (iii) Lender shall havereceived thirty (30) days advance written notice from Borrower of such Transfer, (iv) Lender shallhave received such documents, certificates and legal opinions as it may reasonably request, (v) ifafter giving effect to such Transfer and all prior transfers, more than forty-nine percent (49%) inthe aggregate of direct or indirect interests in Borrower are owned by any Person and itsAffiliates that owned less than a forty nine percent (49%) direct or indirect interest in Borroweras of the Closing Date, Lender shall receive a non consolidation opinion acceptable to Lender andthe Rating Agencies (vi) Borrower shall maintain its status as a single purpose, bankruptcy remoteentity under criteria established by the Rating Agencies, (vii) the Transferee shall comply withthe provisions of Section 3.1.38 hereof, (viii) Borrower provides an Officer’s Certificatethat as of the date of the transfer, the I&G Funds’ net worth has not materially decreased sincethe date hereof and (ix) the Property is managed by an Approved Property Manager.          **Section 8.3 Substitute Guarantor.**          Solely in connection with Transfers permitted pursuant to Sections 8.2.1, 8.1(c)(v)and 8.2.2, Borrower may substitute the Guarantor under the Guaranty, the Supplemental
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Guaranty and the Environmental Indemnity (collectively, the “**Guaranties**”) with anotherguarantor (“**Substitute Guarantor**”)provided that: (i) such Substitute Guarantor satisfiesthe requirements of a Qualified Transferee as of the date of the proposed substitution and isotherwise acceptable to Lender in its sole discretion; and (ii) such Substitute Guarantor executesthe Guaranties, in the form identical to Guaranties executed by Guarantor as of the Closing Date.Upon such substitution in accordance with the provisions of this Section 8.3 the formerGuarantor shall be released from any liability or other obligation under each of the Guaranties.          **IX. SALE AND SECURITIZATION OF MORTGAGE**          **Section 9.1 Sale of Mortgage and Securitization.**          (a) Lender shall have the right (i) to sell or otherwise transfer the Loan or any portionthereof as a whole loan, (ii) to sell participation interests in the Loan or (iii) to securitizethe Loan or any portion thereof in a single asset securitization or a pooled loan securitization.(The transactions referred to inclauses (i), (ii) and (iii) shall hereinafter be referred to collectivelyas “**Secondary Market Transactions**” and the transaction referred to in clause (iii)shall hereinafter be referred to as a “**Securitization.**” Any certificates, notes or othersecurities issued in connection with a Securitization are hereinafter referred to as“**Securities**”).          (b) If requested by Lender, at not material cost to Borrower, Borrower shall assist Lender insatisfying the market standards to which Lender customarily adheres or which may be reasonablyrequired in the marketplace or by the Rating Agencies in connection with any Secondary MarketTransactions, including, without limitation, to:     (i) (A) provide updated financial and other information with respect to the Property,the business operated at the Property, Borrower and the Manager, (B) provide updatedbudgets relating to the Property and (C) provide updated appraisals, market studies,environmental reviews (Phase I’s and, if appropriate, Phase II’s), property conditionreports and other due diligence investigations of the Property (the “**UpdatedInformation**”), together, with appropriate verification of the Updated Informationthrough letters of auditors or opinions of counsel acceptable to Lender and the RatingAgencies;     (ii) provide opinions of counsel, which may be relied upon by Lender, the RatingAgencies and their respective counsel, agents and representatives, as to non-consolidationor any other opinion customary in Secondary Market Transactions or required by the RatingAgencies with respect to the Property and Borrower and Affiliates, which counseland opinions shall be reasonably satisfactory to Lender and the Rating Agencies;     (iii) provide updated, as of the closing date of the Secondary Market Transaction,representations and warranties made in the Loan Documents and such additionalrepresentations and warranties as the Rating Agencies may require;     (iv) execute such amendments to the Loan Documents and Borrower’s organizationaldocuments reasonably requested by Lender, including, without limitation,
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amending theMonthly Payment Date, the execution of one or more replacement loan agreements, as may berequested by Lender or the Rating Agencies to effect the Securitization and/or deliver oneor more new component notes to replace the original note or modify the original note toreflect multiple components of the Loan (and such new notes or modified note shall havethe same initial weighted average coupon of the original note, but such new notes ormodified note may changethe interest rate, Monthly Payment Date and amortization of the Loan), and modify the CashManagement Agreement with respect to the newly created components such that the pricingand marketability of the Securities and the size of each class of Securities andthe rating assigned to each such class by the Rating Agencies shall provide the mostfavorable rating levels and achieve the optimum rating levels for theLoan; provided,however, any such amendments or agreements will not result in an economic change in theLoan terms and will not materially alter the payment terms set forth in thisAgreement or the other Loan Documents or materially and adversely affect Borrower orimpose additional material obligations or liabilities upon Borrower; and     (v) attend management meetings and conduct tours of the Property.          **Section 9.2 Securitization Indemnification.**          (a) Borrower understands that information provided to Lender by Borrower and its agents,counsel and representatives may be included in disclosure documents in connection with theSecuritization, including, without limitation, an offering circular, a prospectus, prospectussupplement, private placement memorandum or other offering document (each, a “**DisclosureDocument**”) and may also be included in filings with the Securities and Exchange Commissionpursuant to the Securities Act of 1933, as amended (the “**Securities Act**”), or theSecurities and Exchange Act of 1934, as amended (the “**Exchange Act**”), and may be madeavailable to investors or prospective investors in the Securities, the Rating Agencies, and serviceproviders relating to the Securitization.          (b) Borrower shall provide in connection with each of (i) a preliminary and a final privateplacement memorandum or (ii) a preliminary and final prospectus or prospectus supplement, asapplicable, an agreement (A) certifying that Borrower has examined such Disclosure Documentsspecified by Lender and that each such Disclosure Document, as it relates to Borrower, BorrowerAffiliates, the Property, Manager and all other aspects of the Loan, does not contain any untruestatement of a material fact or omit to state a material fact necessary in order to make thestatements made, in the light of the circumstances under which they were made, not misleading, (B)indemnifying Lender (and for purposes of this Section 9.2, Lender hereunder shall includeits officers and directors), the Affiliate of Lender that has filed the registration statementrelating to the Securitization (the “**Registration Statement**”), each of its directors, eachof its officers who have signed the Registration Statement and each Person that controls theAffiliate within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act(collectively, the “**Lender Group**”), and Lender, and any other placement agent orunderwriter with respect to the Securitization, each of theirrespective directors and each Person who controls Lender or any other placement agent orunderwriter within the meaning of Section 15 of the Securities Act and Section 20 of the ExchangeAct (collectively, the “**Underwriter Group**”) for any losses, claims, damages or liabilities(collectively, the
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“**Liabilities**”) to which Lender, the Lender Group or the UnderwriterGroup may become subject insofar as the Liabilities arise out of or are based upon any untruestatement or alleged untrue statement of any material fact contained in such sections or arise outof or are based upon the omission or alleged omission to state therein a material fact required tobe stated in such sections or necessary in order to make the statements in such sections, in lightof the circumstances under which they were made, not misleading and (C) agreeing to reimburseLender, the Lender Group and/or the Underwriter Group for any legal or other expenses reasonablyincurred by Lender, the Lender Group and the Underwriter Group in connection with investigating ordefending the Liabilities; provided, however, that Borrower will be liable in anysuch case under clauses (B) or (C) above only to the extent that any such lossclaim, damage or liability arises out of or is based upon any such untrue statement or omissionmade therein in reliance upon and in conformity with information furnished to Lender by or onbehalf of Borrower in connection with the preparation of the Disclosure Document or in connectionwith the underwriting or closing of the Loan, including, without limitation, financial statementsof Borrower, operating statements and rent rolls with respect to the Property. This indemnityagreement will be in addition to any liability which Borrower may otherwise have.          (c) In connection with Exchange Act Filings, Borrower shall (i) indemnify Lender, the LenderGroup and the Underwriter Group for Liabilities to which Lender, the Lender Group or theUnderwriter Group may become subject insofar as the Liabilities arise out of or are based upon theomission or alleged omission to state in the Disclosure Document a material fact required to bestated in the Disclosure Document in order to make the statements in the Disclosure Document, inlight of the circumstances under which they were made, not misleading and (ii) reimburse Lender,the Lender Group or the Underwriter Group for any reasonable legal or other expenses actually andreasonably incurred by Lender, the Lender Group or the Underwriter Group in connection withdefending or investigating the Liabilities.          (d) Promptly after receipt by an indemnified party under this Section 9.2 of notice ofthe commencement of any action, such indemnified party will, if a claim in respect thereof is to bemade against the indemnifying party under this Section 9.2, notify the indemnifying partyin writing of the commencement thereof, but the omission to so notify the indemnifying party willnot relieve the indemnifying party from any liability which the indemnifying party may have to anyindemnified party hereunder except to the extent that failure to notify causes prejudice to theindemnifying party. In the event that any action is brought against any indemnified party, and itnotifies the indemnifying party of the commencement thereof, the indemnifying party will beentitled, jointly with any other indemnifying party, to participate therein and, to the extent thatit (or they) may elect by written notice delivered to the indemnified party promptly afterreceiving the aforesaid notice from such indemnified party, toassume the defense thereof with counsel reasonably satisfactory to such indemnified party. Afternotice from the indemnifying party to such indemnified party under this Section 9.2, suchindemnified party shall pay for any legal or other expenses subsequently incurred by suchindemnified party in connection with the defense thereof other than reasonable costs ofinvestigation; provided, however, if the defendants in any such action include boththe indemnified party and the indemnifying party and the indemnified party shall have reasonablyconcluded that there are any legal defenses available to it and/or other indemnified parties thatare different from or additional to those available to the indemnifying party, the indemnifiedparty or parties shall have the right to select separate counsel to assert such legal defenses andto
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otherwise participate in the defense of such action on behalf of such indemnified party at thecost of the indemnifying party. The indemnifying party shall not be liable for the expenses of morethan one separate counsel unless an indemnified party shall have reasonably concluded that theremay be legal defenses available to it that are different from or additional to those available toanother indemnified party.          (e) In order to provide for just and equitable contribution in circumstances in which theindemnity agreement provided for in Section 9.2(b) or (c) is for any reason held tobe unenforceable as to an indemnified party in respect of any losses, claims, damages orliabilities (or action in respect thereof) referred to therein which would otherwise beindemnifiable under Section 9.2(b) or (c), the indemnifying party shall contributeto the amount paid or payable by the indemnified party as a result of such losses, claims, damagesor liabilities (or action in respect thereof); provided, however, that no Personguilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)shall be entitled to contribution from any Person who was not guilty of such fraudulentmisrepresentation. In determining the amount of contribution to which the respective parties areentitled, the following factors shall be considered: (i) Lender’s and Borrower’s relative knowledgeand 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 equitableconsiderations appropriate in the circumstances. Lender and Borrower hereby agree that it would notbe equitable if the amount of such contribution were determined by pro rata or per capitaallocation.          (f) The liabilities and obligations of both Borrower and Lender under this Section 9.2 shallsurvive the termination of this Agreement and the satisfaction and discharge of the Debt.          **X. DEFAULTS**          **Section 10.1 Event of Default.**          (a) Each of the following events shall constitute an event of default hereunder (an “**Eventof Default**”):     (i) if (A) any monthly installment of interest due under the Note or the payment dueon the Maturity Date is not paid within five (5) days of the date when due or (B) any otherportion of the Debt is not paid when due and such non-payment in this Section10.1(a)(i)(B) continues for five (5) days following notice to Borrower that the sameis due and payable;     (ii) if any of the Taxes or Other Charges are not paid when due (except to the extent(A) Lender is obligated to disburse Tax Funds for the payment of Taxes pursuant toSection 6.2.2 hereof, (B) Lender has sufficient Tax Funds in the Tax Funds accountfor such payment to make such payment, (C) no other Event of Default shall have occurredand (D) Lender fails to make such payment of Taxes);     (iii) if the Policies are not kept in full force and effect provided,however, if Borrower has deposited sufficient funds into the Insurance Account (asdefined in the
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Cash Management Agreement) for the purchase of the Policies in accordance withSection 6.3 hereof, the failure to maintain such Policies due solely tonon-payment of the Insurance Premiums shall not be deemed an Event of Default hereunder;     (iv) if Borrower breaches or permits or suffers a breach of Article 6 of the Mortgageor Article VIII of this Agreement;     (v) if any representation or warranty made by Borrower herein or in any other LoanDocument, or in any report, certificate, financial statement or other instrument,agreement or document furnished to Lender shall have been false or misleading in anymaterial respect as of the date the representation or warranty was made;     (vi) if Borrower, any SPC Party or Guarantor shall make an assignment for the benefitof creditors;     (vii) if Borrower fails or admits its inability to pay debts generally as they becomedue;     (viii) if a receiver, liquidator or trustee shall be appointed for Borrower, any SPCParty or Guarantor or if Borrower, any SPC Party or Guarantor shall be adjudicatedbankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangementpursuant to federal bankruptcy law, or any similar federal or state law, shall befiled by or against, consented to, or acquiesced in by, Borrower, any SPC Party orGuarantor, or if any proceeding for the dissolution or liquidation of Borrower, any SPCParty or Guarantor shall be instituted; provided, however, if such appointment,adjudication, petition or proceeding was involuntary and not consented to byBorrower, and SPC Party or Guarantor, upon the same not being discharged, stayed ordismissed within forty-five (45) days or if an order for relief is entered;     (ix) if Borrower assigns its rights under this Agreement or any of the other LoanDocuments or any interest herein or therein in contravention of the Loan Documents;     (x) Intentionally Deleted;     (xi) if any of the assumptions contained in the Insolvency Opinion, or in any othernon-consolidation opinion delivered to Lender in connection with the Loan, or in any othernon-consolidation delivered subsequent to the closing of the Loan, is or shall becomeuntrue in any material respect and Borrower fails to deliver updates/correctionswithin thirty (30) days of request therefor;     (xii) if Borrower breaches any representation, warranty or covenant contained inSection 3.1.24 hereof;     (xiii) intentionally omitted;     (xiv) if Guarantor breaches in any material respect any covenant, warranty orrepresentation contained in the Guaranty or the Supplemental Guaranty;
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     (xv) if Borrower shall continue to be in Default under any of the other terms,covenants or conditions of this Agreement not specified in subsections (i) throughand including (xv) above, for ten (10) days after notice to Borrower from Lender, inthe case of any Default which can be cured by the payment of a sum of money, or forthirty (30) days after notice from Lender in thecase of any other Default; provided, however, that if such non monetaryDefault is susceptible of cure but cannot reasonably be cured within such thirty(30) day period and providedfurther that Borrower shall have commenced tocure such Default within such thirty (30) day period and thereafter diligently andexpeditiously proceeds to cure the same, such thirty (30) day period shall be extended forsuch time as is reasonably necessary for Borrower in the exercise of due diligence to curesuch Default, such additional period not to exceed ninety (90) days; or     (xvi) if there shall be Default under any of the other Loan Documents beyond anyapplicable cure periods contained in such Loan Documents, whether as to Borrower or theProperty, or if any other such event shall occur or condition shall exist, if the effectof such event or condition is to accelerate the maturity of any portion of the Debtor to permit Lender to accelerate the maturity of all or any portion of the Debt.          (b) Upon the occurrence of an Event of Default (other than an Event of Default described inSections 10.1(a)(vi), (vii) or (viii) above) and at any time thereafterLender may, in addition to any other rights or remedies available to it pursuant to this Agreementand the other Loan Documents or at law or in equity, take such action, without notice or demand,that Lender deems advisable to protect and enforce its rights against Borrower and in and to theProperty, including, without limitation, declaring the Debt to be immediately due and payable, andLender may enforce or avail itself of any or all rights or remedies provided in the Loan Documentsagainst Borrower and the Property, including, without limitation, all rights or remedies availableat law or in equity; and upon any Event of Default described in Sections 10.1(a)(vi),(vii) or (viii) above, the Debt and all other obligations of Borrower hereunder andunder the other Loan Documents shall immediately and automatically become due and payable, withoutnotice or demand, and Borrower hereby expressly waives any such notice or demand, anythingcontained herein or in any other Loan Document to the contrary notwithstanding.          **Section 10.2 Remedies.**          (a) Upon the occurrence 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 this Agreement or any ofthe other Loan Documents executed and delivered by, or applicable to, Borrower or at law or inequity may be exercised by Lender at any time and from time to time, whether or not all or any ofthe Debt shall be declared due and payable, and whether or not Lender shall have commenced anyforeclosure proceeding or other action for the enforcement of its rights and remedies under any ofthe Loan Documents with respect to the Property. Any such actions taken by Lender shall becumulative and concurrent and may be pursued independently, singly, successively, together orotherwise, at such timeand in such order as Lender may determine in its sole discretion, to the fullest extent permittedby law, without impairing or otherwise affecting the other rights and remedies of Lender permittedby law, equity or contract or as set forth herein or in the other Loan Documents. Without limitingthe generality of the
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foregoing and subject to applicable law, if an Event of Default is continuing(i) Lender is not subject to any “one action” or “election of remedies” law or rule, and (ii) allliens and other rights, remedies or privileges provided to Lender shall remain in full force andeffect until Lender has exhausted all of its remedies against the Property and the Mortgage hasbeen foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or the Debt hasbeen paid in full.          (b) Subject to applicable law, Lender shall have the right from time to time to partiallyforeclose the Mortgage in any manner and for any amounts secured by the Mortgage then due andpayable as determined by Lender in its sole discretion including, without limitation, the followingcircumstances: (i) in the event Borrower defaults beyond any applicable grace period in the paymentof one or more scheduled payments of principal and interest, Lender may foreclose the Mortgage torecover such delinquent payments, or (ii) in the event Lender elects to accelerate less than theentire outstanding principal balance of the Loan, Lender may foreclose the Mortgage to recover somuch of the principal balance of the Loan as Lender may accelerate and such other sums secured bythe Mortgage as Lender may elect. Notwithstanding one or more partial foreclosures, the Propertyshall remain subject to the Mortgage to secure payment of sums secured by the Mortgage and notpreviously recovered.          (c) Lender shall have the right from time to time to sever the Note and the other LoanDocuments into one or more separate notes, mortgages and other security documents (the “**SeveredLoan Documents**”) in such denominations as Lender shall determine in its sole discretion forpurposes of evidencing and enforcing its rights and remedies provided hereunder. Borrower shallexecute and deliver to Lender from time to time, promptly after the request of Lender, a severanceagreement and such other documents as Lender shall request in order to effect the severancedescribed 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, coupledwith an interest, in its name and stead to make and execute all documents necessary or desirable toeffect the aforesaid severance, Borrower ratifying all that its said attorney shall do by virtuethereof; provided, however, Lender shall not make or execute any such documentsunder such power until three (3) days after notice has been given to Borrower by Lender of Lender’sintent to exercise its rights under such power. Except as may be required in connection with aSecuritization pursuant to Section 9.1 hereof, (i) Borrower shall not be obligated to payany costs or expenses incurred in connection with the preparation, execution, recording or filingof the Severed Loan Documents, and (ii) the Severed Loan Documents shall not contain anyrepresentations, warranties or covenants not contained in the Loan Documents and any suchrepresentations and warranties contained in the Severed Loan Documents will be given by Borroweronly as of the Closing Date.          (d) Any amounts recovered from the Property or any other collateral for the Loan after anEvent of Default may be applied by Lender toward the payment of any interest and/or principal ofthe Loan and/or any other amounts due under the Loan Documents in such order, priority andproportions as Lender in its sole discretion shall determine.
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          **Section 10.3 Right to Cure Defaults.**          Lender may, but without any obligation to do so and without notice to or demand on Borrowerand without releasing Borrower from any obligation hereunder or being deemed to have cured anyEvent of Default hereunder, make, do or perform any obligation of Borrower hereunder in such mannerand to such extent as Lender may deem necessary. Lender is authorized to enter upon the Propertyfor such purposes, or appear in, defend, or bring any action or proceeding to protect its interestin the Property for such purposes, and the cost and expense actually incurred thereof (includingreasonable attorneys’ fees to the extent permitted by law), with interest as provided in thisSection 10.3, shall constitute a portion of the Debt and shall be due and payable to Lenderupon demand. All such costs and expenses actually incurred by Lender in remedying such Event ofDefault or such failed payment or act or in appearing in, defending, or bringing any action orproceeding shall bear interest at the Default Rate, for the period after such cost or expense wasincurred to the date of payment to Lender. All such costs and expenses incurred by Lender togetherwith interest thereon calculated at the Default Rate shall be deemed to constitute a portion of theDebt and be secured by the liens, claims and security interests provided to Lender under the LoanDocuments and shall be immediately due and payable upon demand by Lender therefore.          **Section 10.4 Remedies Cumulative.**          The rights, powers and remedies of Lender under this Agreement shall be cumulative and notexclusive of any other right, power or remedy which Lender may have against Borrower pursuant tothis Agreement or the other Loan Documents, or existing at law or in equity or otherwise. Lender’srights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and insuch order as Lender may determine in Lender’s sole discretion. No delay or omission to exerciseany remedy, right or power accruing upon an Event of Default shall impair any such remedy, right orpower or shall be construed as a waiver thereof, but any such remedy, right or power may beexercised from time to time and as often as may be deemed expedient. A waiver of one Default orEvent of Default with respect to Borrower shall not be construed to be a waiver of any subsequentDefault or Event of Default by Borrower or to impair any remedy, right or power consequent thereon.          **XI. MISCELLANEOUS**          **Section 11.1 Successors and Assigns.**          Whenever in this Agreement any of the parties hereto is referred to, such reference shall bedeemed to include the legal representatives, successors and assigns of such party. All covenants,promises and agreements in this Agreement, by or on behalf of Borrower, shall inure to the benefitof the legal representatives, successors and assigns of Lender.          **Section 11.2 Lender’s Discretion.**          Whenever pursuant to this Agreement Lender exercises any right given to it to approve ordisapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender toapprove or disapprove or to decide whether arrangements or terms are satisfactory or
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notsatisfactory shall (except as is otherwise specifically herein provided) be in the sole discretionof Lender and shall be final and conclusive. Prior to a Securitization, whenever pursuant to thisAgreement the Rating Agencies are given any right to approve or disapprove, or any arrangement orterm is to be satisfactory to the Rating Agencies, the decision of Lender to approve or disapproveor to decide whether arrangements or terms are satisfactory or not satisfactory, based uponLender’s determination of Rating Agency criteria, shall be substituted therefore.          **Section 11.3 Governing Law.**          (**A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY LENDER AND ACCEPTED BYBORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WEREDISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIPTO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY ANDPERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE ANDPERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OFTHE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,AND ENFORCEMENT OF THE LIEN AND SECURITYINTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY ANDCONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOODTHAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORKSHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THEOBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWERHEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHERJURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNEDBY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OFTHE NEW YORK GENERAL OBLIGATIONS LAW.**          **(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATINGTO THIS AGREEMENT MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OFNEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWAND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUMNON CONVENIENS OF**
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**ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TOTHE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBYDESIGNATE AND APPOINT:**Stuart H. Widowski**********