Loan No: 33-0914051


 


LOAN AGREEMENT


 


Dated as of January 31, 2012


 


Between


 


ARC3 FEBMTNH001, LLC and


ARC3 ESBKYMO001, LLC,


individually and/or collectively, as the context
requires,


as Borrower


 


and


 


WELLS FARGO BANK, NATIONAL ASSOCIATION,


as Lender 


	 


 



    	 



    	 



    

 


TABLE OF CONTENTS


 


	ARTICLE 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION	1
	 	 	 
	Section 1.1.	Definitions	1
	Section 1.2.	Principles of Construction	22
	 	 	 
	ARTICLE 2	22
	 	 
	GENERAL TERMS	22
	 	 	 
	Section 2.1.	The Loan	22
	Section 2.2.	Disbursement to Borrower	22
	Section 2.3.	[Intentionally Omitted.]	22
	Section 2.4.	The Note and the other Loan Documents	22
	Section 2.5.	Interest Rate	22
	Section 2.6.	Loan Payments	27
	Section 2.7.	Prepayments	28
	Section 2.8.	Interest Rate Protection Agreement.	30
	Section 2.9.	Releases	32
	 	 	 
	ARTICLE 3	34
	 	 
	REPRESENTATIONS AND WARRANTIES	34
	 	 	 
	Section 3.1.	Legal Status and Authority	34
	Section 3.2.	Validity of Documents	34
	Section 3.3.	Litigation	35
	Section 3.4.	Agreements	35
	Section 3.5.	Financial Condition	35
	Section 3.6.	Disclosure	36
	Section 3.7.	No Plan Assets	36
	Section 3.8.	Not a Foreign Person	36
	Section 3.9.	Business Purposes	36
	Section 3.10.	Borrower Information	36
	Section 3.11.	Status of Property	36
	Section 3.12.	Financial Information	38
	Section 3.13.	Condemnation	38
	Section 3.14.	Separate Lots	38
	Section 3.15.	Insurance	38


 



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	Section 3.16.	Use of Property	38
	Section 3.17.	Leases and Rent Roll	39
	Section 3.18.	Filing and Recording Taxes	39
	Section 3.19.	Management Agreement	39
	Section 3.20.	Illegal Activity/Forfeiture	40
	Section 3.21.	Taxes	40
	Section 3.22.	Permitted Encumbrances	40
	Section 3.23.	Third Party Representations	40
	Section 3.24.	Non-Consolidation Opinion Assumptions	40
	Section 3.25.	Federal Reserve Regulations	40
	Section 3.26.	Investment Company Act	41
	Section 3.27.	Fraudulent Conveyance	41
	Section 3.28.	Embargoed Person	41
	Section 3.29.	Patriot Act	42
	Section 3.30.	Organizational Chart	42
	Section 3.31.	Bank Holding Company	42
	Section 3.32.	No Breach of Fiduciary Duty	43
	Section 3.33.	Property Document Representations	43
	Section 3.34.	No Change in Facts or Circumstances	43
	Section 3.35.	Perfection of Accounts	43
	Section 3.36.	Ground Lease	43
	Section 3.37.	Guarantor and Sponsor Representations	45
	 	 	 
	ARTICLE 4 BORROWER COVENANTS	45
	 	 	 
	Section 4.1.	Existence	45
	Section 4.2.	Applicable Law	45
	Section 4.3.	Maintenance and Use of Property	47
	Section 4.4.	Waste	47
	Section 4.5.	Taxes and Other Charges	47
	Section 4.6.	Litigation	48
	Section 4.7.	Access to Property	48
	Section 4.8.	Notice of Default	48
	Section 4.9.	Cooperate in Legal Proceedings	48
	Section 4.10.	Performance by Borrower	48
	Section 4.11.	Awards	48
	Section 4.12.	Books and Records	49
	Section 4.13.	Estoppel Certificates	51
	Section 4.14.	Leases and Rents	52
	Section 4.15.	Management Agreement	54


 



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	Section 4.16.	Payment for Labor and Materials	55
	Section 4.17.	Performance of Other Agreements	56
	Section 4.18.	Debt Cancellation	56
	Section 4.19.	ERISA	56
	Section 4.20.	No Joint Assessment	57
	Section 4.21.	Alterations	57
	Section 4.22.	Property Documents Covenants	58
	Section 4.23.	Ground Lease	58
	Section 4.24.	Acquisition of Fee Interests	59
	 	 	 
	ARTICLE 5 ENTITY COVENANTS	60
	 	 	 
	Section 5.1.	Single Purpose Entity/Separateness	60
	Section 5.3.	Compliance Certificate	66
	Section 5.4.	Change of Name, Identity or Structure	66
	Section 5.5.	Business and Operations	66
	 	 	 
	ARTICLE 6 NO SALE OR ENCUMBRANCE	66
	 	 	 
	Section 6.1.	Transfer Definitions	66
	Section 6.2.	No Sale/Encumbrance	67
	Section 6.3.	Permitted Equity Transfers	68
	Section 6.4.	[Intentionally Omitted.]	71
	Section 6.5.	Lender’s Rights	71
	 	 	 
	ARTICLE 7 INSURANCE; CASUALTY; CONDEMNATION; RESTORATION	71
	 	 	 
	Section 7.1.	Insurance	71
	Section 7.2.	Casualty	77
	Section 7.3.	Condemnation	78
	Section 7.4.	Restoration	78
	 	 	 
	ARTICLE 8 RESERVE FUNDS	82
	 	 	 
	Section 8.1.	[Intentionally Omitted.]	82
	Section 8.2.	Replacement Reserve Funds	83
	Section 8.3.	Punch List Work Reserve Funds	84
	Section 8.4.	[Intentionally Omitted]	84
	Section 8.5.	[Intentionally Omitted]	84
	Section 8.6.	Tax and Insurance Funds	84
	Section 8.7.	The Accounts Generally	85
	Section 8.8.	Letters of Credit	87


 



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	ARTICLE 9 CASH MANAGEMENT AGREEMENT	88
	 	 	 
	Section 9.1.	Cash Management Agreement	88
	Section 9.2.	Cash Flow Sweep	88
	 	 	 
	ARTICLE 10 EVENTS OF DEFAULT; REMEDIES	88
	 	 	 
	Section 10.1.	Event of Default	88
	Section 10.2.	Remedies	92
	 	 	 
	ARTICLE 11 SECONDARY MARKET	94
	 	 	 
	Section 11.1.	Secondary Market Transactions	94
	Section 11.2.	Servicer	95
	Section 11.3.	Mezzanine Option	96
	Section 11.4.	Conversion to Registered Form	96
	 	 	 
	ARTICLE 12 INDEMNIFICATIONS	96
	 	 	 
	Section 12.1.	General Indemnification	96
	Section 12.2.	Mortgage and Intangible Tax and Transfer Tax Indemnification	97
	Section 12.3.	ERISA Indemnification	97
	Section 12.4.	Duty to Defend, Legal Fees and Other Fees and Expenses	97
	Section 12.5.	Survival	97
	Section 12.6.	Environmental Indemnity	98
	 	 	 
	ARTICLE 13 EXCULPATION	98
	 	 	 
	Section 13.1.	Exculpation	98
	Section 13.2.	Survival	101
	 	 	 
	ARTICLE 14 NOTICES	102
	 	 	 
	Section 14.1.	Notices	102
	 	 	 
	ARTICLE 15 FURTHER ASSURANCES	103
	 	 	 
	Section 15.1.	Replacement Documents	103
	Section 15.2.	Recording of Security Instrument, etc.	103
	Section 15.3.	Further Acts, etc	104
	Section 15.4.	Changes in Tax, Debt, Credit and Documentary Stamp Laws	104
	 	 	 
	ARTICLE 16 WAIVERS	105
	 	 	 
	Section 16.1.	Remedies Cumulative; Waivers	105


 



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	Section 16.2.	Modification, Waiver in Writing	105
	Section 16.3.	Delay Not a Waiver	105
	Section 16.4.	Waiver of Trial by Jury	105
	Section 16.5.	Waiver of Notice	106
	Section 16.6.	[Intentionally Omitted]	106
	Section 16.7.	Marshalling and Other Matters	106
	Section 16.8.	Waiver of Statute of Limitations	106
	Section 16.9.	Waiver of Counterclaim	106
	Section 16.10.	Sole Discretion of Lender	106
	 	 	 
	ARTICLE 17 MISCELLANEOUS	107
	 	 	 
	Section 17.1.	Survival	107
	Section 17.2.	Governing Law	107
	Section 17.3.	Headings	108
	Section 17.4.	Severability	108
	Section 17.5.	Preferences	109
	Section 17.6.	Expenses	109
	Section 17.7.	Cost of Enforcement	110
	Section 17.8.	Exhibits and Schedules Incorporated	110
	Section 17.9.	Offsets, Counterclaims and Defenses	110
	Section 17.10.	No Joint Venture or Partnership; No Third Party Beneficiaries	111
	Section 17.11.	Publicity	112
	Section 17.12.	Conflict; Construction of Documents; Reliance	112
	Section 17.13.	Entire Agreement	112
	Section 17.14.	Liability	113
	Section 17.15.	Duplicate Originals; Counterparts	113
	Section 17.16.	Contribution	113
	Section 17.17.	Cross-Default; Cross-Collateralization	116
	Section 17.18.	Special Missouri Notice	117


 


SCHEDULES AND EXHIBITS


 


	Exhibit A	Additional Definitions
	Exhibit B	Punch List Items
	Schedule I	Intentionally Omitted
	Schedule II Replacements
	Schedule III Organizational Chart
	Schedule IV Description of REA’s
	Schedule V Allocated Loan Amounts


 



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LOAN AGREEMENT


 


THIS LOAN AGREEMENT,
dated as of January 31, 2012 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”),
between WELLS FARGO BANK, NATIONAL ASSOCIATION, having an address at Wells Fargo Center, 1901 Harrison Street, 2nd
Floor, Oakland, California 94612 (together with its successors and/or assigns, “Lender”), and ARC3
FEBMTNH001, LLC, a Delaware limited liability company (“NH Borrower”), and ARC3 ESBKYMO001, LLC,
a Delaware limited liability company (“MO Borrower”; NH Borrower and MO Borrower, individually and/or collectively,
as the context may require, together with each of their respective permitted successors and/or assigns, “Borrower”),
each having an address at 405 Park Avenue, 15th Floor, New York, New York 10022.


 


RECITALS:


 


Borrower desires to obtain the Loan (defined below) from
Lender.


 


Lender is willing to make the Loan to Borrower,
subject to and in accordance with the terms of this Agreement and the other Loan Documents (defined below).


 


In consideration of the
making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this Agreement, the parties
hereto hereby covenant, agree, represent and warrant as follows:


 


ARTICLE 1


DEFINITIONS; PRINCIPLES OF CONSTRUCTION


 


Section 1.1.          Definitions.
For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary
intent:


 


“30/360 Basis” shall mean
on the basis of a 360-day year consisting of 12 months of 30 days each.


 


“Acceptable LLC”
shall mean a limited liability company formed under Delaware or Maryland law which (i) has at least one springing member, which,
upon the dissolution of all of the members or the withdrawal or the disassociation of all of the members from such limited liability
company, shall immediately become the sole member of such limited liability company, and (ii) otherwise be satisfactory to Lender.


 


“Accounts” shall have the meaning
set forth in the Cash Management Agreement. 


 


“Act” shall have the meaning set forth
in Section 5.1(c) hereof.


 


“Acts of Terror” shall have the meaning
specified in Section 7.1 hereof.


 



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“Actual/360 Basis”
shall mean on the basis of a 360-day year and charged on the basis of actual days elapsed for any whole or partial month in which
interest is being calculated.


 


“Actual Debt
Service Coverage Ratio” shall have the meaning set forth on Exhibit A attached hereto and made a part hereof.
All capitalized terms in such definition are also set forth on Exhibit A.


 


“Additional Interest” shall have the
meaning set forth in Section 2.8(f) hereof.


 


“Adjusted LIBOR
Rate” shall mean, with respect to the applicable Interest Accrual Period, the quotient of (i) LIBOR applicable to such
Interest Accrual Period, divided by (ii) one (1) minus the Reserve Percentage:


 


	Adjusted LIBOR Rate	=	LIBOR
	 	 	(1 – Reserve Percentage)


 


“Affiliate”
shall mean, as to any Person, any other Person that, directly or indirectly, owns more than forty-nine percent (49%) of, is in
control of, is Controlled by or is under common ownership or Control with such Person or is a director or officer of such Person
or of an Affiliate of such Person.


 


“Affiliated Manager”
shall mean any managing agent of the Property in which Borrower, Guarantor, Sponsor, any SPE Component Entity (if any) or any
Affiliate of such entities has, directly or indirectly, any legal, beneficial or economic interest.


 



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“Allocated Loan
Amount” shall mean the portion of the principal amount of the Loan allocated to any applicable Individual Property as
set forth on Schedule V hereof, as such amounts may be adjusted from time to time as hereinafter set forth. Upon each adjustment
in the amount of Debt due to either a regular payment of monthly Debt Service and/or a prepayment of the Loan in accordance with
the terms hereof, each Allocated Loan Amount shall be decreased by an amount equal to the product of (i) the amount of such payment
and (ii) a fraction, the numerator of which is the applicable Allocated Loan Amount (prior to the adjustment in question) and
the denominator of which is the total of all Allocated Loan Amounts (prior to the adjustment in question). Notwithstanding the
foregoing or anything herein to the contrary, (a) any partial prepayment made pursuant to Section 2.9 hereof shall be applied
to the Allocated Loan Amount of each Individual Property in accordance with Section 2.9(a)(vi) hereof; (b) in the event of a Casualty
or Condemnation whereby Net Proceeds shall be applied to the Debt pursuant to the terms of Section 7.4 hereof, then such Net Proceeds
shall be applied (1) first, to reduce the Allocated Loan Amount of the Individual Property affected by such Casualty or Condemnation
and (2) second, pro rata to reduce the Allocated Loan Amounts of each of the other Individual Properties and (c) notwithstanding
the terms of the foregoing clause (b), when the Debt is reduced as the result of Lender’s receipt of proceeds with respect
to a Condemnation or Casualty affecting one hundred percent (100%) of an Individual Property, the Allocated Loan Amount for such
Individual Property with respect to which the insurance proceeds or Award were received shall, at Lender’s sole discretion,
be reduced to zero (such Allocated Loan Amount prior to reduction being referred to as the “Withdrawn Allocated Amount”),
and each other Allocated Loan Amount shall, if the Withdrawn Allocated Amount exceeds such proceeds (such excess being referred
to as the “Proceeds Deficiency”), be increased by an amount equal to the product of (1) the Proceeds Deficiency
and (2) a fraction, the numerator of which is the applicable Allocated Loan Amount (prior to the adjustment in question) and the
denominator of which is the aggregate of all of the Allocated Loan Amounts (prior to the adjustment in question) other than the
Withdrawn Allocated Amount.


 


“ALTA” shall mean American Land Title
Association, or any successor thereto.


 


“Alteration Threshold”
shall mean, with respect to each Individual Property, an amount equal to 2% of the outstanding principal balance of the Allocated
Loan Amount attributable to such Individual Property.


 


“Annual Budget” shall have the meaning
set forth in Section 4.12(a)(v).


 


“Applicable Contribution”
shall have the meaning set forth in Section 17.16 hereof.


 


“Applicable Law”
shall mean all applicable federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental Authorities affecting Borrower or the Property or any part thereof,
or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force,
including, without limitation, the Americans with Disabilities Act of 1990, and all permits, licenses and authorizations and regulations
relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record
or known to Borrower, at any time in force affecting Borrower or the Property or any part thereof, including, without limitation,
any which may (i) require repairs, modifications or alterations in or to the Property or any part thereof, or (ii) in any way
limit the use and enjoyment thereof.


 


“Applicable Policies” shall have the
meaning specified in Section 7.1 hereof.


 



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“Appraisal”
shall mean an appraisal acceptable to Lender prepared in accordance with the requirements of FIRREA, prepared by an independent
third party appraiser acceptable to Lender holding an MAI designation, who is state licensed or state certified if required under
the laws of the state where each applicable Individual Property is located, who meets the requirements of FIRREA.


 


“Approved Accounting
Method” shall mean GAAP, federal tax basis accounting (consistently applied) or such other method of accounting, consistently
applied, as may be reasonably acceptable to Lender.


 


“Approved Bank”
shall mean (a) a bank or other financial institution which has the Required Rating or (b) a bank or other financial institution
otherwise acceptable to Lender.


 



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“Approved ID
Provider” shall mean each of CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington
Trust Company, Stewart Management Company and Lord Securities Corporation; provided, that, additional national providers of Independent
Directors may be deemed added to the foregoing hereunder to the extent approved in writing by Lender.


 


“ARC III Transfer” shall have the
meaning set forth in Section 6.3(a) hereof.


 


“Assignment of
Management Agreement” shall mean that certain Conditional Assignment of Management Agreement dated as of the date hereof
among Lender, Borrower and Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time
to time.


 


“Award” shall mean any compensation
paid by any Governmental Authority in connection with a Condemnation in respect of all or any part of the Property.


 


“Bad Debt” shall have the
meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“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 regulations from time to time promulgated thereunder, and any comparable foreign laws relating
to bankruptcy, insolvency or creditors’ rights.


 


“Benefit Amount” shall have the meaning
set forth in Section 17.16 hereof. 


 


“Bonds” shall have the meaning set
forth in the Ground Lease.


 


“Borrower” shall have the meaning
set forth in the introductory paragraph


hereof.


 


“Borrower Party” shall mean
any Person acting on behalf of or at the direction of Borrower, SPE Component Entity, Guarantor and/or Sponsor.


 


“Breakage Costs” shall have the meaning
set forth in Section 2.5 hereof.


 


“Business Day” shall mean
any day other than a Saturday, Sunday or any other day on which commercial banks in the State of California are not open for business.


 



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“Cash and Cash
Equivalents” shall mean all unrestricted or unencumbered (A) cash and (B) any of the following: (x) marketable direct
obligations issued or unconditionally guaranteed by the United States Government or issued by an agency thereof and backed by
the full faith and credit of the United States; (y) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public instrumentality thereof which, at the time of acquisition,
has one of the two highest ratings obtainable from any two (2) of Standard & Poor’s Corporation, Moody’s Investors
Service, Inc. or Fitch Investors (or, if at any time no two of the foregoing shall be rating such obligations, then from such
other nationally recognized rating services as may be acceptable to Lender) and is not listed for possible down-grade in any publication
of any of the foregoing rating services; (z) domestic certificates of deposit or domestic time deposits or repurchase agreements
issued by any commercial bank organized under the laws of the United States of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than $1,000,000,000.00, which commercial bank has a rating of at least
either AA or such comparable rating from Standard & Poor’s Corporation or Moody’s Investors Service, Inc., respectively;
(aa) any funds deposited or invested by Replacement Guarantor in accounts maintained with Lender and which are not held in escrow
for, or pledged as security for, any obligations of Replacement Guarantor, Borrower and/or any of their affiliates; (bb) money
market funds having assets under management in excess of $2,000,000,000.00 and/or (cc) any unrestricted stock, shares, certificates,
bonds, debentures, notes or other instrument which constitutes a “security” under the Security Act of 1933 (other
than Replacement Guarantor, Borrower and/or any of their affiliates) which are freely tradable on any nationally recognized securities
exchange and are not otherwise encumbered by Replacement Guarantor.


 


“Cash Management
Agreement” shall mean that certain Cash Management Agreement of even date herewith among Wells Fargo Bank, National
Association, as depository, Lender, Borrower and Manager.


 


“Cash Trap Event
Period” shall have the meaning set forth in the Cash Management Agreement.


 


“Casualty” shall have the meaning
set forth in Section 7.2.


 


“Casualty Consultant” shall have the
meaning set forth in Section 7.4 hereof. 


 


“Closing Date” shall mean the date
of the funding of the Loan.


 


“Collateral Assignment
of Interest Rate Protection Agreement” shall mean that certain Collateral Assignment of Interest Rate Protection Agreement,
dated as of the date hereof, executed by Borrower in connection with the Loan for the benefit of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.


 


“Condemnation”
shall mean a temporary or permanent taking by any Governmental Authority as the result, in lieu or in anticipation, of the exercise
of the right of condemnation or eminent domain, of all or any part of the Property, or any interest therein or right accruing
thereto, including any right of access thereto or any change of grade affecting the Property or any part thereof.


 


“Constituent
Members” shall have the meaning set forth in Section 5.2(b) hereof.


 


“Contribution” shall have the meaning
set forth in Section 17.16 hereof.


 



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“Control”
shall mean the power to direct the management and policies of an entity, directly or indirectly, whether through the ownership
of voting securities or other beneficial interests, by contract or otherwise.


 


“Counterparty”
shall mean the counterparty under any Interest Rate Protection Agreement or Replacement Interest Rate Protection Agreement,
which counterparty shall be (i) Wells Fargo Bank, N.A. or (ii) any other counterparty acceptable to Lender.


 


“Creditors’
Rights Laws” shall mean any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to its debts or debtors.


 


“DBRS” shall mean DBRS, Inc.


 


“Debt”
shall mean (i) the outstanding principal amount set forth in, and evidenced by, this Agreement and the Note together with
all interest accrued and unpaid thereon and all other sums due to Lender in respect of the Loan under the Note, this Agreement
or the other Loan Documents, (ii) any Additional Interest due and payable pursuant to the Interest Rate Protection Agreement,
and (iii) the payment of all sums advanced and costs and expenses incurred (including unpaid or unreimbursed servicing and special
servicing fees) by Lender in connection with the enforcement and/or collection of the Debt or any part thereof.


 


“Debt Service” shall mean,
with respect to any particular period of time, scheduled principal and/or interest payments under the Loan.


 


“Default”
shall mean the occurrence of any event hereunder or under the Note or the other Loan Documents which, but for the giving of notice
or passage of time, or both, would be an Event of Default.


 


“Default Rate”
shall mean, with respect to the Loan, a rate per annum equal to the lesser of (i) the Maximum Legal Rate, or (ii) the sum
of (a) the Interest Rate and (b) five percent (5%).


 


“Determination
Date” shall mean, with respect to any Interest Accrual Period, the date that is two (2) London Business Days prior to
the first (1st) day of such Interest Accrual Period.


 


“Eligible Account”
shall mean a separate and identifiable account from all other funds held by the holding institution that is either (a) an account
or accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition
of Eligible Institution or (b) a segregated trust account or accounts maintained with a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or
trust company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by federal and state authority. An Eligible Account
will not be evidenced by a certificate of deposit, passbook or other instrument.


 



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“Eligible Institution”
shall mean (a) a depository institution or trust company insured by the Federal Deposit Insurance Corporation, (i) the short term
unsecured debt obligations or commercial paper of which are rated at least “A-1+” (or its equivalent) from two (2)
of the Rating Agencies in the case of accounts in which funds are held for thirty (30) days or less and (ii) the senior unsecured
debt obligations of which are rated at least “AA” (or its equivalent) from two (2) of the Rating Agencies in the case
of accounts in which funds are held for more than thirty (30) days or (b) such other depository institution otherwise approved
by Lender from time-to-time.


 


“Embargoed Person” shall have the
meaning set forth in Section 3.28 hereof.


 


“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 the benefit of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.


 


“Environmental Laws” shall
have the meaning set forth in the Environmental Indemnity.


 


“Equity Collateral” shall have the
meaning set forth in Section 11.6 hereof.


 


“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as the same may heretofore have been or shall be amended, restated,
replaced or otherwise modified.


 


“Event of Default” shall have the
meaning set forth in Section 10.1 hereof.


 


“Exculpated Parties” shall have the
meaning set forth in Section 13.1 hereof.


 


“Exit Fee” shall have the meaning
set forth in Section 2.7(d) hereof.


 


“Expense Reimbursements”
shall have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“FATCA” shall mean Sections
1471 through 1474 of the IRS Code and any regulations or official interpretations thereof.


 


“Fitch” shall mean Fitch, Inc.


 


“Flood Insurance Acts” shall have
the meaning set forth in Section 7.1 hereof. 


 


“Foreign Taxes” shall have the meaning
set forth in Section 2.5 hereof. 


 


“Funding Borrower” shall have the
meaning set forth in Section 17.16 hereof.


 



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“GAAP” shall mean generally
accepted accounting principles in the United States of America as of the date of the applicable financial report.


 


“Gap Amount” shall have the meaning
set forth in Section 13.1(a)(xv) hereof.


 


“Governmental
Authority” shall mean any court, board, agency, commission, office or other authority of any nature whatsoever for any
governmental unit (foreign, federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence.


 


“Gross Potential Rent” shall
have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“Ground Lease”
shall mean, collectively, (i) that certain Lease Agreement, dated as of January 1, 2011, by and between St. Louis County, Missouri,
as lessor, and 4400 N. Hanley, LLC, a Delaware limited liability company, as lessee, of which a memorandum was recorded in Book
19337, Page 3461 in the Office of the St. Louis County, Missouri Recorder of Deeds, (ii) that certain Trust Indenture, dated as
of January 1, 2011, by and between St. Louis County, Missouri and UMB Bank, N.A., as trustee, (iii) that certain Performance Agreement,
dated as of January 1, 2011, by and between St. Louis County, Missouri and 4400 N. Hanley, LLC, (iv) that certain Bond Purchase
Agreement, dated as of January 1, 2011, made by 4400 N. Hanley, LLC and accepted and agreed to by St. Louis County, Missouri,
and (v) that certain Estoppel Certificate, dated as of January 24, 2012 by St. Louis County, Missouri and accepted and agreed
to by MO Borrower.


 


“Ground Rent” shall mean
any rent, additional rent or other charge payable by the tenant under the Ground Lease.


 


“Guarantor” shall mean American
Realty Capital Operating Partnership III, L.P., a Delaware limited partnership.


 


“Guaranty” shall mean that
certain Guaranty of Recourse Obligations executed by Guarantor and dated as of the date hereof.


 


“Hazardous Substances” shall
have the meaning set forth in the Environmental Indemnity.


 


“Improvements” shall mean,
individually and/or collectively (as the context requires), the “Improvements” as defined in each applicable Security
Instrument.


 


“Indebtedness”
shall mean, for any Person, without duplication: (i) all indebtedness of such Person for borrowed money, for amounts drawn under
a letter of credit, or for the deferred purchase price of property for which such Person or its assets is liable, (ii) all unfunded
amounts under a loan agreement, letter of credit, or other credit facility for which such Person would be liable if such amounts
were advanced thereunder, (iii) all amounts required to be paid by such Person as a guaranteed payment to partners or a preferred
or special dividend, including any mandatory 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 which such Person is liable, (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 liable contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations
such Person otherwise assures a creditor against loss, and (vii) any other similar amounts.


 



    	9



    	 



    

 


“Indemnified
Parties” shall mean (a) Lender, (b) any successor owner or holder of the Loan or participations in the Loan, (c) any
Servicer or prior Servicer of the Loan, (d) any Investor or any prior Investor in the Loan, (e) any trustees, custodians or other
fiduciaries who hold or who have held a full or partial interest in the Loan for the benefit of any Investor or other third party,
(f) any receiver or other fiduciary appointed in a foreclosure or other Creditors’ Rights Laws proceeding, (g) any officers,
directors, shareholders, partners, members, employees, agents, servants, representatives, contractors, subcontractors, affiliates
or subsidiaries of any and all of the foregoing, and (h) the heirs, legal representatives, successors and assigns of any and all
of the foregoing (including, without limitation, any successors by merger, consolidation or acquisition of all or a substantial
portion of the Indemnified Parties’ assets and business) in all cases whether during the term of the Loan or as part of
or following a foreclosure of the Loan.


 


“Independent
Director” shall have the meaning set forth in Section 5.2(a) hereof.


 


“Individual Property”
shall mean each parcel of real property, the Improvements thereon and all personal property owned by Borrower and encumbered
by the applicable Security Instrument, together with all rights pertaining to such property and Improvements, as more particularly
described in the granting clauses of the applicable Security Instrument and referred to therein as the “Property.”


 


“Insurance Premiums” shall have the
meaning set forth in Section 7.1 hereof.


 


“Interest Accrual
Period” shall mean the period beginning on the first day of each calendar month during the term of the Loan and ending
on (but including) the last day of such calendar month.


 


“Interest Bearing Reserve Funds”
shall mean the Replacement Reserve Funds and the Punch List Work Reserve Funds.


 


“Interest Rate”
shall mean the rate or rates at which the outstanding principal amount of the Loan bears interest from time to time in accordance
with the provisions of Section 2.5 hereof.


 


“Interest Rate
Protection Agreement” shall mean, as applicable, any interest rate swap agreement (together with the confirmation and
schedules relating thereto) in form and substance reasonably satisfactory to Lender between Borrower and Counterparty or any Replacement
Interest Rate Protection Agreement.


 


“Interest Shortfall”
shall have the meaning set forth in Section 2.7 hereof.


 



    	10



    	 



    

 


“IRS Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time or any successor statute.


 


“Land”
shall mean individually and/or collectively (as the context requires), the “Land” as defined in each applicable
Security Instrument.


 


“Lease”
shall mean any and all leases, subleases, rental agreements and other agreements whether or not in writing affecting the use,
enjoyment or occupancy of the Land and/or the Improvements heretofore or hereafter entered into and all extensions, amendments
and modifications thereto, whether before or after the filing by or against Borrower of any petition for relief under Creditors’
Rights Laws.


 


“Lease Event”
shall mean any event which would, directly or indirectly, (i) cause a termination right, right of first refusal, right of first
offer or any other similar right, and/or cause any termination fees to be due under any Lease or (ii) cause a Material Adverse
Effect; provided, however, any of the foregoing shall not be deemed a Lease Event to the extent Lender’s prior written consent
is obtained with respect to the same.


 


“Lender” shall have the meaning set
forth in the introductory paragraph hereof.


 


“Letter of Credit”
shall mean an irrevocable, auto-renewing, unconditional, transferable, clean sight draft standby letter of credit having an
initial term of not less than one (1) year and with automatic renewals for one (1) year periods (unless the obligation being secured
by, or otherwise requiring the delivery of, such letter of credit is required to be performed at least thirty (30) days prior
to the initial expiry date of such letter of credit), for which Borrower shall have no reimbursement obligation and which reimbursement
obligation is not secured by the Property or any other property pledged to secure the Note, in favor of Lender and entitling Lender
to draw thereon in New York, New York and/or San Francisco, California, based solely on a statement that Lender has the right
to draw thereon executed by an officer or authorized signatory of Lender. A Letter of Credit must be issued by an Approved Bank.
If at any time (a) the institution issuing any such Letter of Credit shall cease to be an Approved Bank or (b) if the Letter of
Credit is due to expire prior to the termination of the event or events which gave rise to the requirement that Borrower deliver
the Letter of Credit to Lender, Lender shall have the right to draw down the same in full and hold the proceeds thereof, unless
Borrower shall deliver a replacement Letter of Credit from an Approved Bank within (i) as to


(a)  above,
twenty (20) days after Lender delivers written notice to Borrower that the institution issuing the Letter of Credit has ceased
to be an Approved Bank or (ii) as to


(b)  above,
within ten (10) days prior to the expiration date of said Letter of Credit. Borrower’s delivery of any Letter of Credit
hereunder shall, at Lender’s option, be conditioned upon Lender’s receipt of a New Non-Consolidation Opinion relating
to such Letter of Credit.


 


“Liabilities” shall have the meaning
set forth in Section 11.2 hereof.


 



    	11



    	 



    

 


“LIBOR”
shall mean, with respect to each Interest Accrual Period, the rate (expressed as a percentage per annum and rounded upward,
as necessary, to the next nearest 1/1000 of 1%) equal to the rate reported for deposits in U.S. dollars, for a one-month period,
that appears on Reuters Screen LIBOR01 Page (or the successor thereto) as of 11:00 a.m., London time, on the related Determination
Date; provided that, (i) if such rate does not appear on Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on such Determination
Date, Lender shall request the principal London office of any four major reference banks in the London interbank market selected
by Lender to provide such bank’s offered quotation (expressed as a percentage per annum) to prime banks in the London interbank
market for deposits in U.S. dollars for a one-month period as of 11:00 a.m., London time, on such Determination Date for the amounts
for a comparable loan at the time of such calculation and, if at least two such offered quotations are so provided, LIBOR shall
be the arithmetic mean of such quotations and (ii) if fewer than two such quotations in clause (i) are so provided, Lender shall
request any three major banks in New York City selected by Lender to provide such bank’s rate (expressed as a percentage
per annum) for loans in U.S. dollars to leading European banks for a one-month period as of approximately 11:00 a.m., New York
City time on the applicable Determination Date for the amounts for a comparable loan at the time of such calculation and, if at
least two such rates are so provided, LIBOR shall be the arithmetic mean of such rates. Lender’s computation of LIBOR shall
be conclusive and binding on Borrower for all purposes, absent manifest error.


 


“LIBOR Loan” shall mean
the Loan at such time as interest thereon accrues at a rate of interest based upon LIBOR.


 


“LIBOR Rate” shall mean
the sum of (i) the Adjusted LIBOR Rate and (ii) the LIBOR Spread.


 


“LIBOR Spread” shall mean
two and four hundred ninety five thousandths percent (2.495%).


 


“Liquidity”
shall mean (a) unencumbered Cash and Cash Equivalents of Replacement Guarantor and (b) marketable securities of Replacement Guarantor,
each valued in accordance with GAAP (or other principles acceptable to Lender).


 


“LLC Agreement” shall have the meaning
set forth in Section 5.1(c) hereof.


 


“Loan” shall mean the loan
made by Lender to Borrower pursuant to this Agreement.


 


“Loan Bifurcation” shall have the
meaning set forth in Section 11.1 hereof.


 


“Loan Documents”
shall mean, collectively, this Agreement, the Note, the Security Instrument, the Environmental Indemnity, the Assignment of Management
Agreement, the Cash Management Agreement, the Guaranty, the Collateral Assignment of Interest Rate Protection Agreement and all
other documents executed and/or delivered in connection with the Loan.


 


“Loan-To-Value Ratio” shall
mean a percentage calculated by multiplying (i) a fraction, the numerator of which is the outstanding principal balance of the
Loan and the denominator of which is the value of all applicable Individual Properties based on a current Appraisal thereof, by
(ii) one hundred (100).


  



    	12



    	 



    

 


“London Business Day” shall
mean any day other than a Saturday, Sunday or any other day on which commercial banks in London, England are not open for business.


 


“Lockout Release
Date” shall mean the Monthly Payment Date occurring thirty-six (36) months following the Closing Date.


 


“Losses”
shall mean any and all claims, suits, liabilities (including, without limitation, strict liabilities and any impairment of Lender’s
security for the Loan), actions, proceedings, obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, judgments, awards, amounts paid in settlement of whatever kind or nature (including but not limited to legal fees and other
costs of defense).


 


“Management Agreement”
shall mean the management agreement entered into by and between Borrower and Manager, pursuant to which Manager is to provide
management and other services with respect to the Property.


 


“Manager”
shall mean American Realty Capital Properties III, LLC, a Delaware limited liability company, or such other entity selected as
the manager of any applicable Individual Property in accordance with the terms of this Agreement or the other Loan Documents.


 


“Material Adverse
Effect” shall mean a material adverse effect upon (i) the ability of Borrower, Guarantor or Sponsor to perform, or of
Lender to enforce, any material provision of any Loan Document, (ii) the enforceability of any material provision of any Loan
Document, or (iii) the value, net operating income, use or enjoyment of the Property or the operation or occupancy thereof.


 


“Maturity Date”
shall mean (i) February 1, 2017 or (ii) such other date on which the final payment of the principal amount of the Loan becomes
due and payable as herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.


 


“Maximum Legal
Rate” shall mean the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted
for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan
Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest
rate provisions of the Loan.


 


“Member”
shall have the meaning set forth in Section 5.1(c) hereof. 


 


“Mezzanine Borrower”
shall have the meaning set forth in Section 11.3 hereof. 


 


“Mezzanine Option”
shall have the meaning set forth in Section 11.3 hereof.


 



    	13



    	 



    

 


“Minimum Disbursement Amount”
shall mean Twenty-Five Thousand and No/100 Dollars ($25,000).


 


“Missouri Fee Interest” shall
mean the fee interest in that portion of the Property which is subject to the Ground Lease.


 


“Missouri Property” shall
mean that applicable Individual Property ground leased by MO Borrower.


 


“Monthly Insurance
Deposit” shall have the meaning set forth in Section 8.6 hereof.


 


“Monthly Payment Amount” shall
mean the monthly interest accrued on the Loan for the preceding Interest Accrual Period.


 


“Monthly Payment Date” shall
mean the first (1st) day of every calendar month occurring during the term of the Loan.


 


“Monthly Tax Deposit” shall have the
meaning set forth in Section 8.6 hereof. 


 


“Morningstar” shall mean Morningstar,
Inc.


 


“Moody’s” shall mean Moody’s
Investor Service, Inc.


 


“New Hampshire Property” shall
mean that applicable Individual Property owned by NH Borrower.


 


“Net Proceeds”
shall mean: (i) the net amount of all insurance proceeds payable as a result of a Casualty to any Individual 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, but not
limited to, reasonable attorneys’ fees), if any, in collecting such Award.


 


“Net Proceeds
Deficiency” shall have the meaning set forth in Section 7.4 hereof.


 


“Net Rental Income” shall
have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“New Manager” shall have the meaning
set forth in Section 4.15 hereof.


 


“New Non-Consolidation
Opinion” shall mean a substantive non-consolidation opinion provided by outside counsel acceptable to Lender and otherwise
in form and substance acceptable to Lender.


 


“Non-Conforming
Policy” shall have the meaning set forth in Section 7.1 hereof.


 



    	14



    	 



    

 


“Non-Consolidation
Opinion” shall mean that certain substantive non-consolidation opinion delivered to Lender by Bond, Schoeneck &
King, PLLC in connection with the closing of the Loan.


 


“Note”
shall mean that certain Promissory Note of even date herewith in the principal amount of $24,406,000, made by Borrower in favor
of Lender, as the same may be amended, restated, replaced, extended, renewed, supplemented, severed, split, or otherwise modified
from time to time.


 


“Obligations” shall have the meaning
set forth in Section 17.16 hereof.


 


“OFAC” shall have the meaning set
forth in Section 3.28 hereof.


 


“Officer’s Certificate”
shall mean a certificate delivered to Lender by Borrower which is signed by Responsible Officer of Borrower.


 


“Operating Expenses” shall
have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


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


 


“Other Income” shall have
the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“Partial Release” shall have the meaning
set forth in Section 2.9 hereof.


 


“Patriot Act” shall have the meaning
set forth in Section 3.29 hereof.


 


“Percentage Rent” shall
have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“Periodic
Treasury Yield” shall mean the annual yield to maturity of the actively traded non-callable United States Treasury
fixed interest rate security (other than any such security which can be surrendered at the option of the holder at face value
in payment of federal estate tax or which was issued at a substantial discount) that has a maturity closest to (whether before,
on or after) the Lockout Release Date (or if two or more such securities have maturity dates equally close to the Lockout Release
Date, the average annual yield to maturity of all such securities), as reported in the The Wall Street Journal or other
authoritative publication or news retrieval service on the fifth (5th) Business Day preceding the prepayment date.


 


“Permitted Encumbrances”
shall mean, with respect to each Individual Property, collectively, (a) the lien and security interests created by this Agreement
and the other Loan Documents, (b) all liens, encumbrances, Leases and other matters disclosed in the Title Insurance Policy, (c)
liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent, and (d) such other title and survey
exceptions as Lender has approved or may approve in writing in Lender’s sole discretion.


 



    	15



    	 



    

 


“Permitted Equipment
Leases” shall mean equipment leases or other similar instruments entered into with respect to the Personal Property;
provided, that, in each case, such equipment leases or similar instruments (i) are entered into on commercially reasonable terms
and conditions in the ordinary course of Borrower’s business and (ii) relate to Personal Property which is (A) used in connection
with the operation and maintenance of the Property in the ordinary course of Borrower’s business and (B) readily replaceable
without material interference or interruption to the operation of the Property.


 


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


 


“Personal Property”
shall mean individually and/or collectively (as the context requires), the “Personal Property” as defined in each
applicable Security Instrument.


 


“Policies” shall have the meaning
specified in Section 7.1 hereof.


 


“Prime Rate”
shall mean the annual rate of interest publicly announced by Wells Fargo Bank, N.A. in San Francisco, California, as its prime
rate, as such rate shall change from time to time. If Wells Fargo Bank, N.A. ceases to announce a prime rate, Prime Rate shall
mean the rate of interest published in The Wall Street Journal from time to time as the “Prime Rate.” If more
than one “Prime Rate” is published in The Wall Street Journal for a day, the average of such “Prime
Rates” shall be used, and such average shall be rounded up to the nearest 1/100th of one percent (0.01%).
If The Wall Street Journal ceases to publish the “Prime Rate,” Lender shall select an equivalent publication
that publishes such “Prime Rate,” and if such “Prime Rates” are no longer generally published
or are limited, regulated or administered by a governmental or quasigovernmental body, then Lender shall select a comparable interest
rate index.


 


“Prime Rate Loan”
shall mean the Loan at such time as interest thereon accrues at a rate of interest based upon the Prime Rate.


 


“Prime Rate Spread”
shall mean the difference (expressed as the number of basis points) between (a) LIBOR plus the LIBOR Spread on the date LIBOR
was last applicable to the Loan and (b) the Prime Rate on the date that LIBOR was last applicable to the Loan; provided, however,
in no event shall such difference be a negative number.


 


“Prohibited Transfer” shall have the
meaning set forth in Section 6.2 hereof.


 


“Property”
and “Properties” shall mean, individually and/or collectively (as the context requires), each Individual
Property which is subject to the terms hereof and of the other Loan Documents.


 



    	16



    	 



    

 


“Property Documents” shall
mean, individually and/or collectively (as the context requires), each REA and the Ground Lease.


 


“Property Document
Event” shall mean any event which would, directly or indirectly, (i) cause a termination right, right of first refusal,
right of first offer or any other similar right, and/or cause any termination fees to be due under the Property Documents or (ii)
cause a Material Adverse Effect; provided, however, any of the foregoing shall not be deemed a Property Document Event to the
extent Lender’s prior written consent is obtained with respect to the same.


 


“Punch List Items”
shall have the meaning set forth in Section 8.3 hereof.


 


“Punch List Work Reserve Funds”
shall have the meaning set forth in Section 8.3 hereof.


 


“Qualified Equityholder”
shall mean (i) American Realty Capital Trust, Inc. or (ii) a bank, savings and loan association, investment bank, insurance company,
trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, mutual fund, government entity
or plan, real estate company, investment fund or an institution substantially similar to any of the foregoing, provided in each
case under this clause (ii) that such Person (x) has total assets (in name or under management) in excess of $450,000,000 and
(except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholder's equity in excess
of $100,000,000 (in both cases, exclusive of the Property), (y) is regularly engaged in the business of owning and operating comparable
properties in major metropolitan areas and (z) (I) within the last ten (10) years, has not (a) had a credit event that has caused
or will cause a material adverse effect on its organization or business operations, (b) been subject to any material, uncured
event of default in connection with a loan financing which resulted in (A) litigation or (B) an acceleration of an indebtedness
held by Lender or any other secondary market or institutional lender of similar size and with similar operations as Lender or
(c) been the subject of any action or proceeding as a debtor under the Bankruptcy Code, and (II) none of the principals or Persons
which Control such person or own a material direct or indirect equity interest in such Person have ever been convicted of a felony,
or (iii) any other Person reasonably approved by Lender.


 


“Qualified Insurer”
shall have the meaning set forth in Section 7.1 hereof.


 


“Qualified Manager” shall
mean a reputable and experienced professional management organization approved by Lender.


 


“Rating Agencies”
shall mean each of S&P, Moody’s, Fitch, DBRS, and Morningstar, any other nationally-recognized statistical rating
agency (and any successor to any of the foregoing).


 


“REA”
shall mean, individually and/or collectively (as the context requires), each reciprocal easement, covenant, condition and restriction
agreement or similar agreement affecting the Property as more particularly described on Schedule IV hereto and any future
reciprocal easement or similar agreement affecting the Property entered into in accordance with the applicable terms and conditions
hereof.


 



    	17



    	 



    

 


“Registrar” shall have the meaning
set forth in Section 11.7 hereof.


 


“Release Price”
shall mean an amount equal to the greater of (i) 125% of the Allocated Loan Amount for the subject Individual Property, (ii) an
amount such that the Loan-to-Value Ratio for the Unreleased Property is equal to the lesser of (a) the Loan-to-Value Ratio with
respect to all of the Individual Properties (including the Released Property) on the date such Partial Release is consummated
and (b) the Loan-to-Value Ratio with respect to all of the Individual Properties (including the Released Property) on the Closing
Date, and (iii) an amount such that the Debt Service Coverage Ratio on the Unreleased Property is equal to the greater of (a)
the Debt Service Coverage Ratio of all of the Individual Properties (including the Released Property) on the date such Partial
Release is consummated and (b) the Debt Service Coverage Ratio of all of the Individual Properties (including the Released Property)
on the Closing Date.


 


“Released Property”
shall have the meaning set forth in Section 2.9 hereof.


 


“Reimbursement Contribution”
shall have the meaning set forth in Section 17.16 hereof.


 


“Rent Concessions” shall
have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“Rent Loss Proceeds”
shall have the meaning set forth in Section 7.1 hereof. 


 


“Rent Roll”
shall have the meaning set forth in Section 3.17 hereof.


 


“Rents” shall have the meaning set
forth in the Security Instrument.


 


“Replacement Interest Rate Protection
Agreement” shall have the meaning set forth in Section 2.8(c) hereof.


 


“Replacement
Reserve Funds” shall have the meaning set forth in Section 8.2 hereof.


 


“Replacement Reserve Monthly Deposit”
shall have the meaning set forth in Section 8.2 hereof.


 


“Replacements”
for any period shall mean either (i) amounts expended for any of those certain replacements and/or alterations to the Property
set forth on Schedule II attached hereto or (ii) if no such replacements and/or alterations are specified on such Schedule
II, amounts expended for replacements and/or alterations to the Property and required to be capitalized according to GAAP
and reasonably approved by Lender.


 


“Reporting Failure” shall have the
meaning set forth in Section 4.12 hereof.


 



    	18



    	 



    



 


“Required Financial
Item” shall have the meaning set forth in Section 4.12 hereof.


 


“Required Rating”
shall mean a rating of not less than “A-1” (or its equivalent) from each of the Rating Agencies if the term of
such Letter of Credit is no longer than three (3) months or if the term of such Letter of Credit is in excess of three (3) months,
a rating of not less than “AA-” (or its equivalent) from each of the Rating Agencies, or, such other rating that is
reasonably acceptable to Lender.


 


“Reserve Funds”
shall mean the Tax and Insurance Funds, the Replacement Reserve Funds, the Punch List Work Reserve Funds and any other escrow
funds established by this Agreement or the other Loan Documents.


 


“Reserve Percentage”
shall mean the rates (expressed as a decimal) of reserve requirements applicable to Lender on the date two (2) London Business
Days prior to the beginning of such Interest Accrual Period (including, without limitation, basic, supplemental, marginal and
emergency reserves) under any regulations of any Governmental Authority as now and from time to time hereafter in effect, dealing
with reserve requirements prescribed for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities”
in Regulation D of the Board of Governors of the Federal Reserve System) (or against any other category of liabilities which includes
deposits by reference to which LIBOR is determined or against any category of extensions of credit or other assets which includes
loans by a non-United States office of a depository institution to United States residents or loans which charge interest at a
rate determined by reference to such deposits). The determination of the Reserve Percentage shall be based on the assumption that
Lender funded 100% of the Loan in the interbank Eurodollar market. In the event of any change in the rate of such Reserve Percentage
during an Interest Accrual Period, or any variation in such requirements based upon amounts or kinds of assets or liabilities,
or other factors, including, without limitation, the imposition of Reserve Percentages, or differing Reserve Percentages, on one
or more but not all of the holders of the Loan or any participation therein, Lender may use any reasonable averaging and/or attribution
methods which it deems appropriate and practical for determining the rate of such Reserve Percentage which shall be used in the
computation of the Reserve Percentage. Lender’s computation of the Reserve Percentage shall be determined conclusively by
Lender and shall be conclusive and binding on Borrower for all purposes, absent manifest error.


 


“Responsible
Officer” shall mean with respect to a Person, (i) the chairman of the board, president, chief operating officer, chief
financial officer, treasurer or vice president of such Person or (ii) such other similar officer of such Person reasonably acceptable
to Lender and appropriately authorized by the applicable Person in a manner reasonably acceptable to Lender.


 


“Restoration” shall have the meaning
set forth in Section 7.2 hereof. 


 


“Restoration Retainage” shall have
the meaning set forth in Section 7.4 hereof.


 



    	19



    	 



    

 


“Restoration
Threshold” shall mean, with respect to each Individual Property, an amount equal to 4% of the outstanding principal
balance of the Allocated Loan Amount attributable to such Individual Property.


 


“Restricted Account” shall
have the meaning set forth in the Cash Management Agreement.


 


“Restricted Party” shall have the
meaning set forth in Section 6.1 hereof. 


 


“Sale or Pledge” shall have the meaning
set forth in Section 6.1 hereof.


 


“Secondary Market Transaction”
shall have the meaning set forth in Section 11.1 hereof.


 


“Security Instrument”
and “Security Instruments” shall mean, individually and/or collectively (as the context requires), each first
priority (i) Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing and (ii) Leasehold Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing, each dated the date hereof, executed and delivered by the
applicable Borrower to Lender, as security for the Loan and encumbering the applicable Individual Property (or any portion thereof),
as each of the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Servicer”
shall have the meaning set forth in Section 11.4 hereof.


 


“Severed Loan Documents” shall have
the meaning set forth in Article 10.


 


“Single Purpose
Entity” shall mean an entity which satisfies all of the requirements of Section 5.1 hereof and whose structure and organizational
and governing documents are otherwise in form and substance acceptable to Lender.


 


“SPE Component
Entity” shall have the meaning set forth in Section 5.1(b) hereof.




 





“Special Member” shall have the meaning
set forth in Section 5.1(c) hereof.


 


“Sponsor” shall mean American
Realty Capital Operating Partnership III, L.P., a Delaware limited partnership.


 


“Spread Maintenance
Premium” shall mean, with respect to any prepayment of the outstanding principal amount of the Loan on or prior to the
Lockout Release Date, a payment to Lender in an amount equal to the sum of the present value of each future installment of interest
that would be payable under the Loan on the outstanding principal amount of the Loan from the date of such prepayment through
the Lockout Release Date, assuming an interest rate equal to the LIBOR Spread, such future installments of interest to be discounted
at an interest rate per annum equal to the Periodic Treasury Yield. Lender’s calculation of the Spread Maintenance Premium
shall be conclusive and binding on Borrower absent manifest error.


 



    	20



    	 



    

 


“S&P” shall mean Standard
& Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.


 


“State” shall mean the state in which
the Property or any part thereof is located.


 


“Tax and Insurance
Funds” shall have the meaning set forth in Section 8.6 hereof.


 


“Taxes”
shall mean all taxes, assessments, water rates, sewer rents, business improvement district or other similar assessments and other
governmental impositions, including, without limitation, vault charges and license fees for the use of vaults, chutes and similar
areas adjoining the Land, now or hereafter levied or assessed or imposed against the Property or any part thereof.


 


“TC Cap” shall have the meaning specified
in Section 7.1 hereof.


 


“Tenant” shall mean any
Person leasing, subleasing or otherwise occupying any portion of the Property under a Lease or other occupancy agreement with
Borrower.


 


“Tenant Direction
Letter” shall have the meaning set forth in Section 9.2(a) hereof.


 


“Title Insurance
Policy” shall mean those certain ALTA mortgagee title insurance policies issued with respect to each Individual Property
and insuring the lien of the Security Instruments.


 


“TRIPRA” shall have the meaning specified
in Section 7.1 hereof.


 


“UCC” or “Uniform
Commercial Code” shall mean the Uniform Commercial Code as in effect in the State.


 


“Underwritten EGI” shall
have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“Underwritten NOI” shall
have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“Underwritten Operating Expenses”
shall have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 


“Unreleased Property” shall have the
meaning set forth in Section 2.9 hereof. 


 


“Updated Information” shall have the
meaning set forth in Section 11.1 hereof.


 


“U.S. Obligations” shall
mean direct full faith and credit obligations of the United States of America that are not subject to prepayment, call or early
redemption.


 


“Vacancy Deduction” shall
have the meaning set forth on Exhibit A attached hereto and made a part hereof.


 



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“Work Charge” shall have
the meaning set forth in Section 4.16(a) hereof.


 


Section 1.2.                Principles
of Construction. All references to sections, exhibits and schedules are to sections, exhibits and schedules in or to this
Agreement unless otherwise specified. All uses of the word “including” shall mean “including, without limitation”
unless the context shall indicate otherwise. Unless otherwise specified, the words “hereof,” “herein”
and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified, all meanings attributed to defined terms herein
shall be equally applicable to both the singular and plural forms of the terms so defined.


 


ARTICLE 2


 


GENERAL TERMS


 


Section 2.1.                The
Loan. Subject to and upon the terms and conditions set forth herein,
Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on the Closing Date.


 


Section 2.2.               Disbursement
to Borrower. Borrower may request and  receive only one borrowing hereunder in respect of the Loan and any amount borrowed
and repaid hereunder in respect of the Loan may not be re-borrowed.


 


Section 2.3.               [Intentionally
Omitted.]The Note and the other Loan Documents. The Loan shall be evidenced
by the Note and this Agreement and secured by this Agreement, the Security Instrument and the other Loan Documents.


 


Section 2.5.                 Interest
Rate.


 


(a)        Generally. Interest
on the outstanding principal balance of the Loan shall accrue from the Closing Date up to but excluding the Maturity Date at the
Interest Rate.


 


(b)        Interest
Calculation. Interest on the outstanding principal balance of the Loan shall accrue at the Interest Rate calculated on an
Actual/360 Basis. Borrower acknowledges that interest calculated on an Actual/360 Basis exceeds interest calculated on a 30/360
Basis.


 


(c)        Determination
of Interest Rate.


 


(i)               The
Interest Rate with respect to the Loan shall be: (A) the LIBOR Rate with respect to the applicable Interest Accrual Period for
a LIBOR Loan or (B) the Prime Rate plus the Prime Rate Spread for a Prime Rate Loan if the Loan is converted to a Prime Rate Loan
pursuant to the provisions hereof. Notwithstanding any provision of this Agreement to the contrary, in no event shall Borrower
have the right to convert a LIBOR Loan to a Prime Rate Loan.


 



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(ii)                Subject
to the terms and conditions hereof, the Loan shall be a LIBOR Loan and Borrower shall pay interest on the outstanding principal
amount of the Loan at the LIBOR Rate for the applicable Interest Accrual Period. Any change in the rate of interest hereunder
due to a change in the Interest Rate shall become effective as of the opening of business on the first day on which such change
in the Interest Rate shall become effective. Each determination by Lender of the Interest Rate shall be conclusive and binding
for all purposes, absent manifest error.


 


(iii)               In
the event that Lender shall have determined (which determination shall be conclusive and binding upon Borrower absent manifest
error) that by reason of circumstances affecting the interbank Eurodollar market, adequate and reasonable means do not exist for
ascertaining LIBOR, then Lender shall forthwith give notice by telephone of such determination, confirmed in writing, to Borrower
at least one (1) day prior to the last day of the related Interest Accrual Period. If such notice is given, the related outstanding
LIBOR Loan shall be converted, on the last day of the then current Interest Accrual Period, to a Prime Rate Loan.


 


(iv)                If,
pursuant to the terms hereof, any portion of the Loan has been converted to a Prime Rate Loan and Lender shall determine (which
determination shall be conclusive and binding upon Borrower absent manifest error) that the event(s) or circumstance(s) which
resulted in such conversion shall no longer be applicable, Lender shall give notice by telephone of such determination, confirmed
in writing, to Borrower at least one (1) day prior to the last day of the related Interest Accrual Period. If such notice is given,
the related outstanding Prime Rate Loan shall be converted to a LIBOR Loan on the last day of the then current Interest Accrual
Period.


 


(v)                 All
payments made by Borrower hereunder shall be made free and clear of, and without reduction for or on account of, income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions, assessments, fees, charges, reserves or withholdings (including,
without limitation, backup withholdings) imposed, levied, collected, withheld or assessed by any Governmental Authority, which
are imposed, enacted or become effective after the date hereof (such non-excluded taxes being referred to collectively as “Foreign
Taxes”), excluding income and franchise taxes of the United States of America imposed by the jurisdiction under the
laws of which Lender is organized or any political subdivision or taxing authority thereof or therein or imposed by the jurisdiction
of Lender’s applicable lending office where Lender is resident or engaged in business or any political subdivision or taking
authority thereof or therein. If any Foreign Taxes are required to be withheld from any amounts payable to Lender hereunder, the
amounts so payable to Lender shall be increased to the extent necessary to yield to Lender (after payment of all Foreign Taxes)
principal, interest and/or any such other amounts payable hereunder at the rate or in the amounts specified hereunder. Whenever
any Foreign Tax is payable pursuant to applicable law by Borrower, as promptly as possible thereafter, Borrower shall send to
Lender an original official receipt, if available, or certified copy thereof showing payment of such Foreign Tax. Borrower hereby
indemnifies Lender for any incremental taxes, interest or penalties that may become payable by Lender which may result from any
failure by Borrower to pay any such Foreign Tax when due to the appropriate taxing authority or any failure by Borrower to remit
to Lender the required receipts or other required documentary evidence.


 



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(vi)                If
any requirement of law or any change therein or in the interpretation or application thereof, shall hereafter make it unlawful
for Lender to make or maintain a LIBOR Loan as contemplated hereunder (A) the obligation of Lender hereunder to make a LIBOR Loan
or to convert a Prime Rate Loan to a LIBOR Loan shall be canceled forthwith and (B) any outstanding LIBOR Loan shall be converted
automatically to a Prime Rate Loan on the last day of the then current Interest Accrual Period or within such earlier period as
required by law. Borrower hereby agrees to promptly pay to Lender, upon demand, any additional amounts necessary to compensate
Lender for any costs incurred by Lender in making any conversion in accordance with this Agreement, including, without limitation,
any interest or fees payable by Lender to lenders of funds obtained by it in order to make or maintain the LIBOR Loan hereunder.
Lender’s notice of such costs, as certified to Borrower, shall be conclusive absent manifest error.


 


(vii)                In
the event that any change in any requirement of law or in the interpretation or application thereof, or compliance by Lender with
any request or directive (whether or not having the force of law) hereafter issued from any central bank or other Governmental
Authority:


 


(A)         shall
hereafter impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of Lender which is not otherwise included in the determination of LIBOR hereunder;


 


(B)         shall
hereafter have the effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder
to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration
Lender’s policies with respect to capital adequacy) by any amount deemed by Lender to be material; or


 


(C)         shall
hereafter impose on Lender any other condition and the result of any of the foregoing is to increase the cost to Lender of making,
renewing or maintaining loans or extensions of credit or to reduce any amount receivable hereunder;


 



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then, in any such case, Borrower
shall promptly pay Lender, upon demand, any additional amounts necessary to compensate Lender for such additional cost or
reduced amount receivable which Lender deems to be material as reasonably determined by Lender, provided that, such demand by
Lender shall apply to all loans similarly affected by such change. If Lender becomes entitled to claim any additional amounts
pursuant to this subsection, Lender shall provide Borrower with not less than thirty (30) days notice specifying in
reasonable detail the event by reason of which it has become so entitled and the additional amount required to fully
compensate Lender for such additional cost or reduced amount. A certificate as to any additional costs or amounts payable
pursuant to the foregoing sentence submitted by Lender to Borrower shall be conclusive in the absence of manifest error. This
provision shall survive payment of the Note and the satisfaction of all other obligations of Borrower under this Agreement
and the Loan Documents.


 


(viii)               Borrower
agrees to indemnify Lender and to hold Lender harmless from any loss or expense which Lender sustains or incurs as a consequence
of (A) any default by Borrower in payment of the principal of or interest on a LIBOR Loan, including, without limitation, any
such loss or expense arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain a
LIBOR Loan hereunder, (B) any prepayment (whether voluntary or mandatory) of the LIBOR Loan on a day that is not the last day
of an Interest Accrual Period, including, without limitation, such loss or expense arising from interest or fees payable by Lender
to lenders of funds obtained by it in order to maintain the LIBOR Loan hereunder and (C) the conversion (for any reason whatsoever,
whether voluntary or involuntary) of the Interest Rate from the LIBOR Rate to the Prime Rate plus the Prime Rate Spread with respect
to any portion of the outstanding principal amount of the Loan then bearing interest at the LIBOR Rate on a date other than the
last day of an Interest Accrual Period, including, without limitation, such loss or expenses arising from interest or fees payable
by Lender to lenders of funds obtained by it in order to maintain a LIBOR Loan hereunder (the amounts referred to in clauses (A),
(B) and (C) are herein referred to collectively as the “Breakage Costs”); provided, however, Borrower shall
not indemnify Lender from any loss or expense arising from Lender’s willful misconduct or gross negligence. This provision
shall survive payment of the Note in full and the satisfaction of all other obligations of Borrower under this Agreement and the
other Loan Documents. Notwithstanding the foregoing or anything herein to the contrary, provided Borrower makes any prepayment
(whether voluntary or mandatory) of the LIBOR Loan on the last day of an Interest Accrual Period, or if such date is not the last
day of an Interest Accrual Period but such prepayment includes the payment of Interest Shortfall, then no Breakage Costs shall
be due and payable in connection with such prepayment.


 


(ix)                Lender
shall not be entitled to claim compensation pursuant to this subsection for any Foreign Taxes, increased cost or reduction in
amounts received or receivable hereunder, or any reduced rate of return, which was incurred or which accrued more than ninety
(90) days before the date Lender notified Borrower of the change in law or other circumstance on which such claim of compensation
is based and delivered to Borrower a written statement setting forth in reasonable detail the basis for calculating the additional
amounts owed to Lender under this subsection, which statement shall be conclusive and binding upon all parties hereto absent manifest
error.


 



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(x)                Lender
will use reasonable efforts (consistent with legal and regulatory restrictions) to maintain the availability of the LIBOR Loan
and to avoid or reduce any increased or additional costs payable by Borrower under this subsection, including, if requested by
Borrower, a transfer or assignment of the Loan to a branch, office or affiliate of Lender in another jurisdiction, or a redesignation
of its lending office with respect to the Loan, in order to maintain the availability of the LIBOR Loan or to avoid or reduce
such increased or additional costs, provided that the transfer or assignment or redesignation (A) would not result in any additional
costs, expenses or risk to Lender that are not reimbursed by Borrower and (B) would not be disadvantageous in any other respect
to Lender as determined by Lender in its sole discretion.


 


(xi)               Tax
Forms. Prior to the date that any Lender organized under the laws of a jurisdiction outside the United States of America becomes
a party hereto, such Lender shall deliver to the Borrower such certificates, documents or other evidence, as required by the IRS
Code or Treasury Regulations issued pursuant thereto (including Internal Revenue Service Forms W-8ECI and W-8BEN, as applicable,
or appropriate successor forms), properly completed, currently effective and duly executed by such Lender establishing that payments
to it hereunder and under the Note are (i) not subject to United States Federal backup withholding tax and (ii) not subject to
United States Federal withholding tax under the Code. Each such Lender shall (x) deliver further copies of such forms or other
appropriate certifications on or before the date that any such forms expire or become obsolete and after the occurrence of any
event requiring a change in the most recent form delivered to the Borrower and (y) obtain such extensions of the time for filing,
and renew such forms and certifications thereof, as may be reasonably requested by the Borrower. If a payment made to a Lender
under or in respect of this Agreement or any other Loan Document would be subject to United States federal withholding tax imposed
by FATCA and such Lender fails to comply with the applicable reporting requirements of FATCA, such Lender shall deliver (A) a
certification signed by the chief financial officer, principal accounting officer, treasurer or controller, and (B) other documentation
reasonably requested by the Borrower sufficient for the Borrower to comply with its obligations under FATCA and to determine that
such Lender has complied with such applicable reporting requirements. The Borrower shall not be required to pay any amount pursuant
to Subsection (v) above to any Lender that is organized under the laws of a jurisdiction outside of the United States of America
if such Lender fails to comply with the requirements of this Subsection (xi). Borrower will not be required to pay any additional
amounts in respect of United States federal income tax pursuant to Subsection (v) above to Lender if the obligation to pay such
additional amounts would not have arisen but for a failure by Lender to comply with its obligations under this Subsection (xi).


 



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(d)          Default
Rate. In the event that, and for so long as, any Event of Default shall have occurred and be continuing, the outstanding principal
balance of the Loan and, to the extent permitted by Applicable Law, overdue interest in respect of the Loan, shall accrue interest
at the Default Rate, calculated from the date such payment was due without regard to any grace or cure periods contained herein.


 


(e)          Usury
Savings. This Agreement and the other Loan Documents are subject to the express condition that at no time shall Borrower be
required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the Maximum Legal Rate. If by the terms of this Agreement or the other Loan Documents,
Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the
Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction
of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender for the use or forbearance
of the sums due under the Loan, shall, to the extent permitted by Applicable Law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan
does not exceed the Maximum Legal Rate from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.


 


Section 2.6.            Loan
Payments.


 


(a)      Payment
Before Maturity. Borrower shall make a payment to Lender of interest only on the Closing Date for the period from the Closing
Date through the last day of the month in which the Closing Date occurs (unless the Closing Date is the first day of a calendar
month, in which case no such separate payment of interest shall be due). Borrower shall pay to Lender on each Monthly Payment
Date the Monthly Payment Amount.


 


(b)       [Intentionally
Omitted.] 


 


(c)       Payment
on Maturity. Borrower shall pay to Lender on the Maturity Date the outstanding principal balance of the Loan, all accrued
and unpaid interest and all other amounts due hereunder and under the Note, the Security Instrument and the other Loan Documents.


 


(d)       Late
Payment Charge. If any principal, interest or any other sum due under the Loan Documents, other than the payment of principal
due on the Maturity Date, is not paid by Borrower within five (5) days when due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5%) of such unpaid sum or the maximum amount permitted by Applicable Law in order to defray
the expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the
use of such delinquent payment. Any such amount shall be secured by the Security Instrument and the other Loan Documents.


 



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(e)          Method
and Place of Payment.


 


(i)               Except
as otherwise specifically provided herein, all payments and prepayments under this Agreement and the Note shall be made to Lender
not later than 12:00 P.M., California time, on the date when due and shall be made in lawful money of the United States of America
in immediately available funds at Lender’s office, and any funds received by Lender after such time shall, for all purposes
hereof, be deemed to have been paid on the next succeeding Business Day.


 


(ii)              Whenever
any payment to be made hereunder or under any other Loan Document shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be deemed to be the immediately succeeding Business Day.


 


(iii)             All
payments required to be made by Borrower hereunder or under the Note or the other Loan Documents shall be made irrespective of,
and without deduction for, any setoff, claim or counterclaim and shall be made irrespective of any defense thereto.


 


Section2.7.              Prepayments.


 


(a)         Voluntary
Prepayments. Prior to the Lockout Release Date, the outstanding principal amount of the Loan may not be prepaid in whole or
in part. On the last day of any Interest Accrual Period occurring on or after the Lockout Release Date, provided no Event of Default
has occurred and is continuing, Borrower may, at its option and upon prior notice to Lender as set forth herein, prepay the Debt
in whole or in part. Notwithstanding the foregoing, Borrower may not partially prepay the Loan more than one (1) time in any calendar
year and Borrower shall obtain Lender’s consent for any additional partial prepayment of the Loan in any calendar year,
which consent shall be given in Lender’s sole and absolute discretion. Lender shall not be obligated to accept any prepayment
unless it is accompanied by the prepayment premium due in connection therewith. Any partial prepayment shall be applied to the
Loan in such order and priority as may be determined by Lender in its sole discretion. Any prepayment received by Lender on a
date other than the last day of any Interest Accrual Period shall include interest which would have accrued from such date of
prepayment through and including the last day of the Interest Accrual Period during which such prepayment is being made (such
amounts, the “Interest Shortfall”). Additionally, Borrower shall pay the Exit Fee, any Additional Interest
and any Breakage Costs (provided that the same are not duplicative of any Interest Shortfall paid in connection with such prepayment)
in connection with any prepayment of the Loan. As a condition to any voluntary prepayment, Borrower shall give Lender written
notice (a “Prepayment Notice”) of its intent to prepay, which notice must be given at least sixty (60) and
not more than ninety  (90) days prior to the Business Day upon which prepayment is to be made and must specify the Business
Day on which such prepayment is to be made. Borrower hereby agrees that, in the event Borrower delivers a Prepayment Notice and
fails to prepay the Loan in accordance with the Prepayment Notice and the terms of this Section 2.7 (a “Prepayment Failure”),
Borrower shall indemnify Lender from and against, and shall be responsible for, all Losses (including any consequential damages)
incurred by Lender with respect to any such Prepayment Failure.


 



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(b)          Mandatory
Prepayments. On each date on which Lender actually receives a distribution of Net Proceeds, and if such Net Proceeds are not
made available to Borrower for Restoration, Borrower shall prepay the outstanding principal balance of the Note in an amount equal
to one hundred percent (100%) of such Net Proceeds together with any applicable Interest Shortfall, the Exit Fee any Additional
Interest and any Breakage Costs (provided that the same are not duplicative of any Interest Shortfall paid in connection with
such prepayment) and such prepayment shall be applied to the Debt in accordance with Section 7.4(c) hereof. No prepayment premium
shall be due in connection with any prepayment made pursuant to this Section 2.7(b).


 


(c)          Prepayments
After Default. If concurrently with or after an Event of Default, payment of all or any part of the principal of the Loan
is tendered by Borrower, a purchaser at foreclosure or any other Person, such tender shall be deemed an attempt to circumvent
the prohibition against prepayment prior to the Lockout Release Date as set forth herein and Borrower, such purchaser at foreclosure
or other Person shall pay, in addition to the outstanding principal balance, all accrued and unpaid interest and other amounts
payable under the Loan Documents, (i) an amount equal to the greater of (x) five percent (5%) of the outstanding principal balance
of the Loan to be prepaid or satisfied and (y) the Spread Maintenance Premium, (ii) Interest Shortfall, (iii) Breakage Costs (provided
that the same are not duplicative of any Interest Shortfall paid in connection with such prepayment), and (iv) Additional Interest.
Additionally, Borrower shall pay the Exit Fee to Wells Fargo.


 


(d)          Exit
Fee. Borrower agrees that in all events and under all circumstances, Borrower shall be obligated to pay to Wells Fargo Bank,
N.A. an exit fee of an amount equal to one quarter of one percent (0.25%) of the outstanding principal balance of the Loan or
(b) in connection with a partial prepayment of the Loan, the principal amount of the Loan being prepaid (the “Exit Fee”),
which shall be payable upon (i) any partial prepayment of the Loan by Borrower and (ii) the earlier of (x) the payment by Borrower
of the Loan in full, or (y) the Maturity Date (or any acceleration of the Loan following an Event of Default). In furtherance
of the foregoing, Borrower acknowledges and agrees that Lender shall have no obligation to accept any payment of the Loan unless
and until Borrower shall have also paid the Exit Fee, and Lender shall have no obligation to release any Loan Document upon payment
of the Debt unless and until Lender shall have received the entire Exit Fee. Notwithstanding the foregoing or anything herein
to the contrary, the Exit Fee shall not be payable with respect to any Principal Payment included in a Monthly Payment Amount.
Notwithstanding the foregoing, payment of the Exit Fee shall be waived in the event Borrower refinances the Loan with a new permanent
loan from Wells Fargo Bank, N.A. (which may be provided by Wells Fargo Bank, N.A., in its sole discretion).


 



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(e)          Cash
Trap Event Payoff. Notwithstanding the foregoing or anything contained herein to the contrary, in the event there is a Cash
Trap Event Period caused by a Tenant Cash Trap Event (as defined in the Cash Management Agreement) or a NH Cash Trap Event (as
defined in the Cash Management Agreement), (i) Borrower is permitted to prepay the Loan in full or (ii) with respect to a Tenant
Cash Trap Event relating solely to the New Hampshire Property or a NH Cash Trap Event, Borrower is permitted to prepay the Loan
in part in an amount equal to the Allocated Loan Amount for the New Hampshire Property. In connection with a prepayment made in
accordance with either clause (i) or (ii) of the foregoing sentence, Borrower shall not be required to pay the Exit Fee or any
prepayment premium; provided, however, Borrower shall be required to pay any Interest Shortfall, Breakage Costs, or Additional
Interest in connection with such prepayment.


 


Section 2.8.            Interest
Rate Protection Agreement.


 


(a)       Prior
to or contemporaneously with the Closing Date, Borrower shall enter into an Interest Rate Protection Agreement with a LIBOR swapped
rate acceptable to Lender. The Interest Rate Protection Agreement (i) shall be in a form and substance reasonably acceptable to
Lender, (ii) shall be with a Counterparty acceptable to Lender, (iii) shall be for a period equal to the term of the Loan and
(iv) shall have an initial notional amount equal to the principal balance of the Loan. Borrower shall direct such Counterparty
to deposit directly into the Restricted Account any amounts due Borrower under such Interest Rate Protection Agreement so long
as any portion of the Debt exists, provided that the Debt shall be deemed to exist if the Property is transferred by judicial
or non-judicial foreclosure or deed-in-lieu thereof. Additionally, Borrower shall collaterally assign to Lender, pursuant to the
Collateral Assignment of Interest Rate Protection Agreement, all of its right, title and interest to receive any and all payments
under the Interest Rate Protection Agreement, and shall deliver to Lender an executed counterpart of such Interest Rate Protection
Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into
the Restricted Account.


 


(b)        Borrower
shall comply with all of its obligations under the terms and provisions of the Interest Rate Protection Agreement. All amounts
paid by the Counterparty under the Interest Rate Protection Agreement to Borrower or Lender shall be deposited immediately into
the Restricted Account. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under
the Interest Rate Protection Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify
any of its rights thereunder.


 



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(c)        If
at any time (i) Wells Fargo Bank, N.A. or any of its affiliates is not “Lender” under the Loan, or (ii) Wells Fargo
Bank, N.A. or any of its affiliates is not the Counterparty, then, in the event there is any downgrade, withdrawal or qualification
of the long-term unsecured debt rating of the Counterparty below an “A” by S&P or below an “A2” by
Moody’s, Borrower shall replace the Interest Rate Protection Agreement with a new Interest Rate Protection Agreement with
a Counterparty acceptable to Lender (a “Replacement Interest Rate Protection Agreement”), not later than ten
(10) Business Days following receipt of notice from Lender of such downgrade, withdrawal or qualification. Notwithstanding the
foregoing, in the event the Counterparty is Wells Fargo Bank, N.A. or any of its affiliates and neither Wells Fargo Bank, N.A.
nor any of its affiliates is the Lender, such Replacement Interest Rate Protection Agreement is only required to be delivered
in the event there is any downgrade, withdrawal or qualification of the long-term unsecured debt rating of the Counterparty below
an “A” by S&P and below an “A2” by Moody’s. In furtherance of the foregoing, if Wells Fargo
Bank, N.A. and/or any of its affiliates are both Lender and Counterparty, then no Replacement Interest Rate Protection Agreement
shall be required.


 


(d)        In
the event that Borrower fails to purchase and deliver to Lender the Interest Rate Protection Agreement or fails to maintain the
Interest Rate Protection Agreement in accordance with the terms and provisions of this Agreement, Lender may purchase the Interest
Rate Protection Agreement and the cost incurred by Lender in purchasing such Interest Rate Protection Agreement shall be paid
by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost
is reimbursed by Borrower to Lender.


 


(e)        If
required by Lender, in connection with the Interest Rate Protection Agreement where Wells Fargo Bank, N.A. or any affiliate thereof
is not the Counterparty thereunder, Borrower shall obtain and deliver to Lender an opinion from counsel (which counsel may be
in-house counsel for the Counterparty) for the Counterparty (upon which Lender and its successors and assigns may rely) which
shall provide, in relevant part, that:


 


(i)            the
Counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation and
has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate Protection
Agreement;


 


(ii)           the
execution and delivery of the Interest Rate Protection Agreement by the Counterparty, and any other agreement which the Counterparty
has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized
by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational
documents) or any law, regulation or contractual restriction binding on or affecting it or its property;


 


(iii)          all
consents, authorizations and approvals required for the execution and delivery by the Counterparty of the Interest Rate Protection
Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of
its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied
with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such
execution, delivery or performance; and


 



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(iv)          the
Interest Rate Protection Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto,
has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty,
enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).


 


(f)        Borrower
shall pay to Wells Fargo Bank, National Association (“Wells Fargo”) any
losses (including, without limitation, loss of bargain), costs (including, without limitation, cost of funding), and expenses
that Wells Fargo incurs, as Lender and/or Counterparty, as a result of any default in performance of, or the termination of, the
obligations of Borrower pursuant to the Interest Rate Protection Agreement, if any. All such losses, costs and expenses shall
be payable by Borrower to Wells Fargo as additional interest under the Loan (“Additional Interest”).
The Additional Interest is deemed to constitute interest and not principal under the Loan and the only reference to “principal”
herein shall not be deemed to apply to Additional Interest. The Additional Interest shall be due and payable by Borrower pursuant
to the terms of the Interest Rate Protection Agreement and shall be secured on a pari-passu basis with the Debt by the lien of
the Security Instrument.


 







(g)        In
connection with the Interest Rate Protection Agreement, Borrower shall deliver to Lender a TIRSA SWAP Endorsement to the Title
Insurance Policy in an amount satisfactory to Lender.


 


Section 2.9.            Releases


 


(a)         Release
of Individual Property. On and after the Lockout Release Date, Borrower may obtain the release of the New Hampshire
Property (the “Released Property”) from the lien of the applicable Security Instrument (and related Loan
Documents) and the release of Borrower’s obligations under the Loan Documents with respect to the Released Property
(other than those expressly stated to survive) (such release, a “Partial Release”), upon the satisfaction
of each of the following conditions:




 





(i)       Borrower
shall provide Lender with thirty (30) days (or such shorter period as may be agreed to by Lender) prior written notice of the
proposed Partial Release;


 


(ii)      No
Event of Default shall have occurred and be continuing at the time the applicable Partial Release is requested or at the time
that the applicable Partial Release occurs;


 



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(iii)       Borrower
shall submit to Lender, not less than thirty (30) days prior to the date of the Partial Release, a release of lien (and related
Loan Documents) for the Released Property for execution by Lender. Such release shall be in a form appropriate in each jurisdiction
in which the Released Property is located and shall contain standard provisions protecting the rights of the releasing lender,
in each case, reasonably satisfactory to Lender. In addition, Borrower shall provide all other documentation Lender reasonably
requires to be delivered by Borrower in connection with the Partial Release, together with an Officer’s Certificate certifying
that such documentation (A) is in compliance with all Legal Requirements, (B) will effect the Partial Release in accordance with
the terms of this Agreement, and (C) will not impair or otherwise adversely affect the liens, security interests and other rights
of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the
Loan Documents not being released);


 


(iv)       The
Released Property shall be conveyed to a Person other than Borrower;


 


(v)         Borrower
shall prepay the Loan in accordance with the applicable terms and conditions hereof in an amount equal to the Release Price applicable
to the Released Property and shall pay any Exit Fee, Interest Shortfall, Breakage Costs, Additional Interest and all other sums
due under this Agreement, the Note and the other Loan Documents in connection therewith. Such prepayment in the amount of the
applicable Release Price shall, notwithstanding anything to the contrary contained herein, be applied (A) first, to reduce the
Allocated Loan Amount of the Released Property to zero and (B) second, pro-rata to reduce the Allocated Loan Amounts of each Unreleased
Property (defined below);


 


(vi)        After
giving effect to the Partial Release, the Actual Debt Service Coverage Ratio for the Properties then remaining subject to the
applicable Security Instruments (collectively, the “Unreleased Properties” and, each, an “Unreleased
Property”) shall be greater than the greater of (A) the Debt Service Coverage Ratio of all Individual Properties (including
the Released Property) immediately prior to the Partial Release or (B) 3.01x to 1.00;


 


(vii)       After
giving effect to the Partial Release, the Loan-to-Value Ratio for the Unreleased Properties shall be no greater than the lesser
of (A) the Loan-To-Value Ratio with respect to all of the Individual Properties (including the Released Property) immediately prior
to the Partial Release or (B) 52.4% (with each of (vii)(A) and (vii)(B) being determined based upon updated Appraisals for each
of the Individual Properties); and


 


(viii)      Borrower
shall pay all of Lender’s reasonable costs and expenses in connection with the Partial Release, including, without limitation,
reasonable attorneys’ fees and Appraisal costs.


 


Except as set forth in this Section 2.9, no
repayment or prepayment of all or any portion of the Loan shall cause, give rise to a right to require, or otherwise result in,
the release of any lien of any Security Instrument on any Individual Property.


 



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Notwithstanding anything contained herein
to the contrary, Borrower shall not be permitted to obtain a Partial Release of the applicable Individual Property in which MO
Borrower holds a leasehold interest pursuant to the Ground Lease.


 


(b)          Release on Payment in Full. Lender shall, upon the written request and
at the expense of Borrower, upon payment in full of all principal and interest due on the Loan and all other amounts due and payable
under the Loan Documents in accordance with the terms and provisions of the Note and this Agreement, release the lien of the Security
Instruments on each Individual Property not theretofore released.


 


ARTICLE 3


 


REPRESENTATIONS AND WARRANTIESBorrower
represents and warrants as of the Closing Date that:


 


Section 3.1.          Legal
Status and Authority. Each Borrower (a) is duly organized, validly existing and in good standing under the laws of its state
of formation; (b) is duly qualified to transact business and is in good standing in the applicable State; and (c) has all necessary
approvals, governmental and otherwise, and full power and authority to own, operate and lease the applicable Individual Property.
Borrower has full power, authority and legal right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey
the Property pursuant to the terms hereof and to keep and observe all of the terms of this Agreement, the Note, the Security Instrument
and the other Loan Documents on Borrower’s part to be performed.


 


Section 3.2.          Validity
of Documents. (a) The execution, delivery and performance of this Agreement, the Note, the Security Instrument and the other
Loan Documents by Borrower and its applicable Affiliates and the borrowing evidenced by the Note and this Agreement (i) are within
the power and authority of such parties; (ii) have been authorized by all requisite organizational action of such parties; (iii)
have received all necessary approvals and consents, corporate, governmental or otherwise; (iv) will not violate, conflict with,
result in a breach of or constitute (with notice or lapse of time, or both) a material default under any provision of law, any
order or judgment of any court or Governmental Authority, any license, certificate or other approval required to operate the Property,
Borrower’s organizational documents, or any indenture, agreement or other instrument to which Borrower is a party or by
which it or any of its assets or the Property is or may be bound or affected, including, without limitation, the Management Agreement;
(v) will not result in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of its assets, except
the lien and security interest created hereby and by the other Loan Documents; and (vi) will not require any authorization or
license from, or any filing with, any Governmental Authority (except for the recordation of the Security Instrument in appropriate
land records in the applicable State and except for Uniform Commercial Code filings relating to the security interest created
hereby), (b) this Agreement, the Note, each Security Instrument and the other Loan Documents have been duly executed and delivered
by Borrower through the undersigned authorized representative of Borrower and (c) this Agreement, the Note, the Security Instrument
and the other Loan Documents constitute the legal, valid and binding obligations of Borrower. The Loan Documents are not subject
to any right of rescission, set-off, counterclaim or defense by Borrower, including the defense of usury, nor would the operation
of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable (except
as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Creditors’ Rights
Laws, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or
at law)), and Borrower has not asserted any right of rescission, set-off, counterclaim or defense with respect thereto.


 



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Section 3.3.          Litigation.
There is no action, suit or proceeding, judicial, administrative or otherwise (including any condemnation or similar proceeding),
pending or, to the best of Borrower’s knowledge, overtly threatened in writing against Borrower, Sponsor or Guarantor or
against or affecting the Property that has not been disclosed to Lender by Borrower in writing in connection with the closing
of the Loan, is not fully covered by insurance or, if determined adversely to Borrower, would have a Material Adverse Effect.


 


Section 3.4.          Agreements.
Borrower is not a party to any agreement or instrument or subject to any restriction which would have a Material Adverse Effect.
Borrower is not in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument to which it is a party or by which Borrower or the Property is bound. Borrower
has no material financial obligation under any agreement or instrument 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 this Agreement, the Security Instrument, the Note and the other Loan Documents. There is no agreement or instrument
to which Borrower is a party or by which Borrower is bound that would require the subordination in right of payment of any of
Borrower’s obligations hereunder or under the Note to an obligation owed to another party.


 


Section 3.5.          Financial
Condition.


 


(a)       Borrower
is solvent, and no proceeding under Creditors’ Rights Laws with respect to Borrower has been initiated and Borrower has
received reasonably equivalent value for the granting of the Security Instrument.


 


(b)       No
petition in bankruptcy has been filed by or against Borrower, Sponsor, nor Guarantor in the last ten (10) years, and neither Borrower,
Sponsor, nor Guarantor in the last ten (10) years has ever made any assignment for the benefit of creditors or taken advantage
of any Creditors’ Rights Laws.


 


(c)       Borrower
is not contemplating either the filing of a petition by it under any Creditors’ Rights Laws or the liquidation of its assets
or property.


 



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Section 3.6.            Disclosure.
Borrower has disclosed to Lender all material facts and has not failed to disclose any material fact that could cause any representation
or warranty made herein to be materially misleading.


 


Section 3.7.            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) of ERISA, subject to Title I of ERISA, (b) Borrower is not and will not be a “governmental
plan” within the meaning of Section 3(32) of ERISA, (c) transactions by or with Borrower are not and will not be subject
to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans; and (d) none of
the assets of Borrower constitutes or will constitute “plan assets” of one or more such plans within the meaning of
29 C.F.R. Section 2510.3-101.


 


Section 3.8.            Not
a Foreign Person. Borrower is not a “foreign person” within the meaning of § 1445(f)(3) of the IRS Code.


 


Section 3.9.           Business
Purposes. The Loan is solely for the business purpose of Borrower, and is not for personal, family, household, or agricultural
purposes.


 


Section 3.10.         Borrower
Information. Borrower’s principal place of business and its chief executive office as of the date hereof is 405 Park
Avenue 15th Floor, New York, New York 10022. Borrower’s mailing address,
as set forth in the opening paragraph hereof or as changed in accordance with the provisions hereof, is true and correct. Borrower
is not subject to back-up withholding taxes.


 


Section 3.11.         Status
of Property.


 


(a)       Borrower
has obtained all necessary certificates, licenses and other approvals, governmental and otherwise, necessary for the operation
of each Individual Property and the conduct of its business and all required zoning, building code, land use, environmental and
other similar permits or approvals, all of which are in full force and effect as of the date hereof and not subject to revocation,
suspension, forfeiture or modification.


 


(b)       Except
as otherwise disclosed to Lender by Borrower in writing in connection with the closing of the Loan or as otherwise disclosed to
Lender in any third party report delivered in connection with the closing of the Loan, each Individual Property and the present
and contemplated use and occupancy thereof are in full compliance with all applicable zoning ordinances, building codes, land
use laws, Environmental Laws and other similar Applicable Law.


 


(c)       Each
Individual Property is served by all utilities required for the current or contemplated use thereof. All utility service is provided
by public utilities and the Property has accepted or is equipped to accept such utility service.


 


(d)       Each
Individual Property is served by public water and sewer systems.


 



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(e)      All
public roads and streets necessary for service of and access to each Individual Property for the current or contemplated use thereof
have been completed, are serviceable and all-weather and are physically and legally open for use by the public. Each Individual
Property has either direct access to such public roads or streets or access to such public roads or streets by virtue of a perpetual
easement or similar agreement inuring in favor of Borrower and any subsequent owners of the applicable Individual Property.


 


(f)       Except
as otherwise disclosed to Lender by Borrower in writing in connection with the closing of the Loan or as otherwise disclosed to
Lender in any third party report delivered in connection with the closing of the Loan, the Property is free from damage caused
by fire or other casualty. The Property, including, without limitation, all buildings, improvements, parking facilities, sidewalks,
storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order and repair
in all material respects; there exists no structural or other material defects or damages in the Property, whether latent or otherwise,
and Borrower has not received notice from any insurance company or bonding company of any defects or inadequacies in the Property,
or any part thereof, which would adversely affect the insurability of the same or cause the imposition of extraordinary premiums
or charges thereon or of any termination or threatened termination of any policy of insurance or bond.


 


(g)      All
costs and expenses of any and all labor, materials, supplies and equipment used in the construction of the Improvements have been
paid in full. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and
no rights are outstanding that under Applicable Law could give rise to any such liens) affecting the Property which are or may
be prior to or equal to the lien of the Security Instrument.


 


(h)      Borrower
has paid in full for, and is the owner of, all furnishings, fixtures and equipment (other than Tenants’ property) used in
connection with the operation of the Property, free and clear of any and all security interests, liens or encumbrances, except
the lien and security interest created by this Agreement, the Note, the Security Instrument and the other Loan Documents.


 


(i)       All
liquid and solid waste disposal, septic and sewer systems located on the Property are in a good and safe condition and repair
and, to the best of Borrower’s knowledge, in compliance with all Applicable Law.


 


(j)       No
portion of the Improvements is located in an area identified by the Federal Emergency Management Agency or any successor thereto
as an area having special flood hazards pursuant to the Flood Insurance Acts or, if any portion of the Improvements is located
within such area, Borrower has obtained and will maintain the insurance prescribed in Section 7.1(a) hereof. No part of the Property
consists of or is classified as wetlands, tidelands or swamp and overflow lands.


 



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(k)      All
the Improvements lie within the boundaries of the Land and any building restriction lines applicable to the Land.


 


(l)       To
Borrower’s actual knowledge after due inquiry, there are no pending or proposed special or other assessments for public
improvements or otherwise affecting the Property, nor are there any contemplated improvements to the Property that may result
in such special or other assessments.


 


Section 3.12.         Financial
Information. All financial data, including, without limitation, the balance sheets, statements of cash flow, statements of
income and operating expense and rent rolls, that have been delivered to Lender in respect of Borrower, Sponsor, Guarantor and/or
the Property (a) are true, complete and correct in all material respects, (b) accurately represent the financial condition of
Borrower, Sponsor, Guarantor or the Property, as applicable, as of the date of such reports, and (c) to the extent prepared or
audited by an independent certified public accounting firm, have been prepared in accordance with the Approved Accounting Method,
except as disclosed therein. Borrower does not have any contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments that are known to Borrower and reasonably likely
to have a Material Adverse Effect, except as referred to or reflected in said financial statements. Since the date of such financial
statements, there has been no materially adverse change in the financial condition, operations or business of Borrower, Sponsor
or Guarantor from that set forth in said financial statements.


 


Section 3.13.          Condemnation.
No Condemnation or other proceeding has been commenced or, to Borrower’s best knowledge, is threatened in writing with respect
to all or any portion of the Property or for the relocation of the access to any Individual Property.


 


Section 3.14.          Separate
Lots. Each Individual Property is assessed for real estate tax purposes as one or more wholly independent tax lot or lots,
separate from any adjoining land or improvements not constituting a part of such lot or lots, and no other land or improvements
is assessed and taxed together with each such Individual Property or any portion thereof.


 


Section 3.15.          Insurance.
Borrower has obtained (or caused to be obtained) and has delivered to Lender certified copies of all Policies reflecting the insurance
coverages, amounts and other requirements set forth in this Agreement. There are no present claims of any material nature under
any of the Policies, and to Borrower’s knowledge, no Person, including Borrower, has done, by act or omission, anything
which would impair the coverage of any of the Policies.


 


Section 3.16.           Use
of Property.     Each Individual Property is used exclusively as industrial – distribution
and other appurtenant and related uses.


 








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Section
3.17.         Leases and Rent Roll. Except as disclosed in the rent roll
for each Individual Property delivered to and approved by Lender (the “Rent Roll”) and the aging report
and Tenant estoppels delivered to and approved by Lender, (a) Borrower is the sole owner of the entire lessor’s
interest in the Leases; (b) the Leases are valid and enforceable against Borrower and the Tenants set forth therein and are
in full force and effect; (c) all of the Leases are arms-length agreements with bona fide, independent third parties; (d) no
party under any Lease is in default; (e) all Rents due have been paid in full and no Tenant is in arrears in its payment of
Rent; (f) none of the Rents reserved in the Leases have been assigned or otherwise pledged or hypothecated; (g) none of the
Rents have been collected for more than one (1) month in advance (except a security deposit shall not be deemed rent
collected in advance); (h) the premises demised under the Leases have been completed and the Tenants under the Leases have
accepted the same and have taken possession of the same on a rent-paying basis; (i) there exist no offsets or defenses to the
payment of any portion of the Rents and Borrower has no monetary obligation to any Tenant under any Lease; (j) Borrower has
received no notice from any Tenant challenging the validity or enforceability of any Lease; (k) there are no agreements with
the Tenants under the Leases other than expressly set forth in each Lease; (l) no Lease contains an option to purchase,
right of first refusal to purchase, right of first refusal to lease additional space at the Property, or any other similar
provision; (m) no person or entity has any possessory interest in, or right to occupy, the Property except under and pursuant
to a Lease; (n) no Tenants have exercised any right to “go dark” that they may have under their Leases; (o) all
security deposits relating to the Leases reflected on the Rent Roll have been collected by Borrower; (p) no brokerage
commissions or finders fees are due and payable regarding any Lease; (q) each Tenant is in actual, physical occupancy of the
premises demised under its Lease and is paying full rent under its Lease; and (r) no Tenant occupying 20% or more (by square
feet) of the net rentable area of each Individual Property is, to Borrower’s knowledge, a debtor in any state or
federal bankruptcy or insolvency proceeding.


 


Section 3.18.         Filing
and Recording Taxes. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person
under Applicable Law currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection
or enforcement of any of this Agreement, the Security Instrument, the Note and the other Loan Documents, including, without limitation,
the Security Instrument, have been paid or will be paid, and, under current Applicable Law, the Security Instrument is enforceable
in accordance with its terms by Lender (or any subsequent holder thereof), except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Creditors’ Rights Laws, and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).


 


Section 3.19.         Management
Agreement. The Management Agreement is in full force and effect and there is no default thereunder by any party thereto and,
to Borrower’s knowledge, no event has occurred that, with the passage of time and/or the giving of notice would constitute
a default thereunder. As of the date hereof, no management fees under the Management Agreement are due and payable.


 



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Section 3.20.         Illegal
Activity/Forfeiture.


 


(a)          No
portion of the Property has been or will be purchased, improved, equipped or furnished with proceeds of any illegal activity and
to the best of Borrower’s knowledge, there are no illegal activities or activities relating to controlled substances at
the Property.


 


(b)          There
has not been and shall never be committed by Borrower or any other person in occupancy of or involved with the operation or use
of the Property any act or omission affording the federal government or any state or local government the right of forfeiture
as against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under this Agreement,
the Note, the Security Instrument or the other Loan Documents. Borrower hereby covenants and agrees not to commit, permit or suffer
to exist any act or omission affording such right of forfeiture.


 


Section 3.21.         Taxes.         Borrower
has filed all federal, state, county, municipal, and city income, personal property and other tax returns required to have been
filed by it and has paid all taxes and related liabilities which have become due pursuant to such returns or pursuant to any assessments
received by it. Borrower knows of no basis for any additional assessment in respect of any such taxes and related liabilities
for prior years.


 


Section 3.22.         Permitted
Encumbrances.         None of the Permitted Encumbrances, individually
or in the aggregate, materially interferes with the benefits of the security intended to be provided by this Agreement, the Security
Instrument, the Note and the other Loan Documents, materially and adversely affects the value or marketability of the Property,
impairs the use or the operation of the Property or impairs Borrower’s ability to pay its obligations in a timely manner.


 


Section 3.23.         Third
Party Representations. Each of the representations and the warranties made by Sponsor and Guarantor in the other Loan Documents
(if any) are true, complete and correct in all material respects.


 


Section 3.24.         Non-Consolidation
Opinion Assumptions. All of the assumptions made in the Non-Consolidation Opinion, including, but not limited to, any exhibits
attached thereto, are true, complete and correct.


 


Section 3.25.         Federal
Reserve Regulations. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin
stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose
which would be inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any purposes prohibited
by Applicable Law or by the terms and conditions of this Agreement, the Security Instrument, the Note or the other Loan Documents.


 



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Section 3.26.         Investment
Company Act.         Borrower is not (a) an “investment company”
or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act
of 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 the Public Utility Holding Company Act of 1935, as amended; or (c) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.


 


Section 3.27.         Fraudulent
Conveyance. Borrower (a) has not entered into the Loan or any Loan Document with the actual intent to hinder, delay, or defraud
any creditor and (b) received reasonably equivalent value in exchange for its obligations under the Loan Documents. Giving effect
to the Loan, the fair saleable value of Borrower’s assets exceeds and will, immediately following the execution and delivery
of the Loan Documents, exceed Borrower’s total liabilities, including, without limitation, subordinated, unliquidated, disputed
or contingent liabilities. The fair saleable value of Borrower’s assets is and will, immediately following the execution
and delivery of the Loan Documents, be greater than Borrower’s probable liabilities, including the maximum amount of its
contingent liabilities or its debts as such debts become absolute and matured. Borrower’s assets do not and, immediately
following the execution and delivery of the Loan Documents will not, constitute unreasonably small capital to carry out its business
as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it will, incur debts and liabilities
(including, without limitation, contingent liabilities and other commitments) beyond its ability to pay such debts as they mature
(taking into account the timing and amounts to be payable on or in respect of obligations of Borrower).


 


Section 3.28.         Embargoed
Person. As of the date hereof and at all times throughout the term of the Loan, including after giving effect to any transfers
of interests permitted pursuant to the Loan Documents, (a) none of the funds or other assets of Borrower, Sponsor or Guarantor
constitute property of, or are beneficially owned, directly or indirectly, by any person, entity or country which is a sanctioned
person, entity or country under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C.
§§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated
thereunder (including regulations administered by the Office of Foreign Assets Control (“OFAC”) of the U.S.
Department of the Treasury and the Specially Designated Nationals List maintained by OFAC) with the result that the investment
in Borrower, Sponsor and/or Guarantor, as applicable (whether directly or indirectly), is prohibited by Applicable Law or the
Loan made by Lender is in violation of Applicable Law (“Embargoed Person”); (b) unless expressly waived in writing
by Lender, no Embargoed Person has any interest of any nature whatsoever in Borrower, Sponsor or Guarantor, as applicable, with
the result that the investment in Borrower, Sponsor and/or Guarantor, as applicable (whether directly or indirectly), is prohibited
by Applicable Law or the Loan is in violation of Applicable Law; and (c) to the best knowledge of Borrower, none of the funds
of Borrower, Sponsor or Guarantor, as applicable, have been derived from any unlawful activity with the result that the investment
in Borrower, Sponsor and/or Guarantor, as applicable (whether directly or indirectly), is prohibited by Applicable Law or the
Loan is in violation of Applicable Law. Borrower covenants and agrees that in the event Borrower receives any notice that Borrower,
Sponsor or Guarantor (or any of their respective beneficial owners, affiliates or participants) or any Person that has an interest
in the Property is designated as an Embargoed Person, Borrower shall immediately notify Lender in writing. At Lender’s option,
it shall be an Event of Default hereunder if Borrower, Guarantor, Sponsor or any other party to the Loan is designated as an Embargoed
Person.


 



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Section 3.29.         Patriot
Act. All capitalized words and phrases and all defined terms used in the USA Patriot Act of 2001, 107 Public Law 56 (October
26, 2001) and in other statutes and all orders, rules and regulations of the United States government and its various executive
departments, agencies and offices related to the subject matter of the Patriot Act (collectively referred to in this Section only
as the “Patriot Act”) are incorporated into this Section. Borrower hereby represents and warrants that Borrower,
Sponsor and Guarantor and each and every Person affiliated with Borrower, Sponsor and/or Guarantor or that to Borrower’s
knowledge has an economic interest in Borrower, or, to Borrower’s knowledge, that has or will have an interest in the transaction
contemplated by this Agreement or in the Property or will participate, in any manner whatsoever, in the Loan, is: (i) in full
compliance with all applicable requirements of the Patriot Act and any regulations issued thereunder; (ii) operated under policies,
procedures and practices, if applicable, that are in compliance with the Patriot Act and available to Lender for Lender’s
review and inspection during normal business hours and upon reasonable prior notice; (iii) not in receipt of any notice from the
Secretary of State or the Attorney General of the United States or any other department, agency or office of the United States
claiming a violation or possible violation of the Patriot Act; (iv) not a person who has been determined by competent authority
to be subject to any of the prohibitions contained in the Patriot Act; and (v) not owned or controlled by or now acting and or
will in the future act for or on behalf of any person who has been determined to be subject to the prohibitions contained in the
Patriot Act. Borrower covenants and agrees that in the event Borrower receives any notice that Borrower, Sponsor or Guarantor
(or any of their respective beneficial owners, affiliates or participants) or any Person that has an interest in the Property
is indicted, arraigned, or custodially detained on charges involving money laundering or predicate crimes to money laundering,
Borrower shall immediately notify Lender. At Lender’s option, it shall be an Event of Default hereunder if Borrower, Guarantor,
Sponsor or any other party to the Loan is indicted, arraigned or custodially detained on charges involving money laundering or
predicate crimes to money laundering.


 


Section 3.30.         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 and as of the date hereof.


 


Section 3.31.         Bank
Holding Company. Borrower is not a “bank holding company” or a direct or indirect subsidiary of a “bank
holding company” as defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y thereunder of the Board
of Governors of the Federal Reserve System.


 



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Section 3.32.         No
Breach of Fiduciary Duty. No Person currently owning a direct or indirect equity ownership interest in Borrower (nor any past
or current affiliate of such Person), has breached any fiduciary duty owed by such Person to any other Person now or previously
owning a direct or indirect equity ownership interest in Borrower or in any other prior owner of the Property.


 


Section 3.33.         Property
Document Representations.         Each Property Document is in full force
and effect and neither Borrower nor, to Borrower’s knowledge, any other party to any Property Document, is in default thereunder,
and to the best of Borrower’s knowledge, there are no conditions which, with the passage of time or the giving of notice,
or both, would constitute a default thereunder. Except as set forth on Schedule IV hereof or as otherwise disclosed to
Lender in writing, no Property Document has been modified, amended or supplemented.


 


Section 3.34.         No
Change in Facts or Circumstances.


 


All information submitted
by Borrower, Guarantor or Sponsor to Lender and in all financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan or in satisfaction of the terms thereof and all statements of fact made by Borrower, Sponsor
and/or Guarantor in this Agreement or in the other Loan Documents, are accurate, complete and correct in all material respects.
There has been no material adverse change in any condition, fact, circumstance or event that would make any such information inaccurate,
incomplete or otherwise misleading in any material respect or that would otherwise have a Material Adverse Effect.


 


Section 3.35.         Perfection
of Accounts. Borrower hereby represents and warrants to Lender that:


 


(a)          This
Agreement, together with the other Loan Documents, create a valid and continuing security interest (as defined in the Uniform
Commercial Code) in the Accounts in favor of Lender, which security interest is prior to all other liens, other than Permitted
Encumbrances, and is enforceable as such against creditors of and purchasers from Borrower. Other than in connection with the
Loan Documents and except for Permitted Encumbrances, Borrower has not sold or otherwise conveyed the Accounts; and


 


(b)          The
Accounts constitute “deposit accounts” or “securities accounts” within the meaning of the Uniform Commercial
Code, as set forth in the Cash Management Agreement.


 


Section 3.36.         Ground
Lease.


 


Borrower hereby represents and warrants to Lender the following
with respect to the Ground Lease:


 


(a)          Recording;
Modification. A memorandum of the Ground Lease has been duly recorded. The Ground Lease permits the interest of Borrower to
be encumbered by the Security Instrument and does not restrict the use of the Property in a manner that would adversely affect
the security provided by the Security Instrument. As of the date hereof, there are no other amendments, modifications, assumptions
or assignments of the Ground Lease not heretofore delivered to Lender. The Ground Lease may not be canceled, terminated, surrendered,
modified or amended without the prior written consent of Lender and any such action without such consent shall not be binding
on Lender.


 



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(b)          No
Liens. Except for the Permitted Encumbrances, Borrower’s interest in the Ground Lease is not subject to any liens or
encumbrances superior to, or of equal priority with, the related Security Instrument other than the ground lessor’s related
fee interest. To Borrower’s actual knowledge after due inquiry, except for the Permitted Encumbrances, there is no lien
encumbering the ground lessor’s fee interest, and the Ground Lease shall remain prior to any lien upon the related fee interest
that may hereafter be granted.


 


(c)          Ground
Lease Assignable; Leasehold Mortgage. Borrower’s interest in the Ground Lease is assignable to Lender upon notice to,
but without the consent of, the ground lessor (or, if any such consent is required, it has been obtained prior to the Closing
Date). The Ground Lease is further assignable by Lender, its successors and assigns without the consent of the ground lessor.
The Ground Lease permits the interest of the lessee thereunder to be encumbered by a leasehold mortgage and contains no restrictions
on the identity of a leasehold mortgagee.


 


(d)          Default.  As
of the date hereof, to the actual knowledge of Borrower after due inquiry, (i) the Ground Lease is in full force and effect, (ii)
no default has occurred under the Ground Lease and (iii) there is no existing condition which, but for the passage of time or
the giving of notice, could result in a default under the terms of the Ground Lease.


 


(e)          Notice.  The
Ground Lease, or estoppel letters received by Lender from the ground lessor, requires the ground lessor to give notice of any
default by Borrower to Lender. The Ground Lease, or estoppel letters received by Lender from the ground lessor, further provides
that notice of termination given under the Ground Lease is not effective against Lender unless a copy of the notice has been delivered
to Lender in the manner described in the Ground Lease.


 


(f)          Cure.  Lender
is permitted the opportunity (including, where necessary, sufficient time to gain possession of the interest of the applicable
Borrower under the Ground Lease) to cure any default under the Ground Lease, which is curable after the receipt of notice of any
of the default before the ground lessor thereunder may terminate the Ground Lease.


 


(g)          New
Lease. The Ground Lease requires the ground lessor to enter into a new lease with Lender upon termination of the Ground Lease
for any reason, including rejection of the Ground Lease in a bankruptcy proceeding.


 


(h)          Subleasing.  The
Ground Lease does not impose any restrictions on subleasing.


 



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(i)          Insurance
Proceeds. Under the terms of the Ground Lease and the Security Instrument, taken together, any related insurance and condemnation
proceeds will be applied either to the repair or restoration of all or part of the applicable Individual Property, or to the payment
of the outstanding principal balance of the Loan together with any accrued interest thereon.


 


(j)          Term.
The Ground Lease has a term which extends approximately five (5) years following the Maturity Date. The Ground Lease does
not provide for any extension options.


 


(k)          Outstanding
Principal Amount of Bonds. The outstanding principal amount due and owing on the Bonds, as of the date hereof, is $4,518,696.00, which such amount may not be increased under any circumstances.


 


Section 3.37.         Guarantor
and Sponsor Representations. Borrower hereby represents and warrants that, as of the date hereof, the representations and
warranties set forth in Sections 3.1 through 3.8, 3.12, 3.18, 3.21, 3.23, 3.27, 3.28, 3.29, 3.32, and 3.34 above are true and
correct with respect to Guarantor and Sponsor, as the same are applicable to such party. Wherever the term “Borrower”
is used in each of the foregoing Subsections it shall be deemed to be “Guarantor” and “Sponsor”, with
respect to each such party.


 


Borrower agrees that, unless expressly provided otherwise, all
of the representations and warranties of Borrower set forth in this Article 3 and elsewhere in this Agreement and the other Loan
Documents shall survive for so long as any portion of the Debt remains owing to Lender. All representations, warranties, covenants
and agreements made in this Agreement and in the other Loan Documents shall be deemed to have been relied upon by Lender notwithstanding
any investigation heretofore or hereafter made by Lender or on its behalf.


 


ARTICLE 4


BORROWER COVENANTS


 


From the date hereof and
until payment and performance in full of all obligations of Borrower under this Agreement, the Security Instrument, the Note and
the other Loan Documents or the earlier release of the lien of the Security Instrument (and all related obligations) in accordance
with the terms of this Agreement, the Security Instrument, the Note and the other Loan Documents, Borrower hereby covenants and
agrees with Lender that:


 


Section 4.1.          Existence.
Each Borrower will continuously maintain (a) its existence and shall not dissolve or permit its dissolution, (b) its rights to
do business in the applicable State and (c) its franchises and trade names, if any.


 


Section 4.2.          Applicable
Law.


 


(a)          Borrower
shall promptly comply and shall cause the Property to comply in all material respects with all Applicable Law affecting the Borrower
and the Property, or the use thereof, including, without limitation, all Environmental Laws and Applicable Law relating to OFAC,
Embargoed Persons and the Patriot Act.


 



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(b)          Borrower
shall from time to time, upon Lender’s written request, but no more than one (1) time during any twelve (12) month period
(provided, no Event of Default has occurred and is continuing), provide Lender with evidence reasonably satisfactory to Lender
that the Property complies with all Applicable Law or is exempt from compliance with Applicable Law.


 


(c)          Borrower
shall give prompt notice to Lender of the receipt by Borrower of any written notice related to a violation of any Applicable Law
and of the commencement of any proceedings or investigations which relate to compliance with Applicable Law.


 


(d)          After
prior written notice to Lender, Borrower, at its own expense, may contest (or permit to be contested) by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the validity of any Applicable Law, the applicability of
any Applicable Law to Borrower or any Individual Property or any alleged violation of any Applicable Law, provided that (i) no
Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any instrument to which Borrower is subject and shall not constitute a default thereunder and such proceeding
shall be permitted by and conducted in accordance with all Applicable Law; (iii) neither the applicable Individual Property nor
any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower
shall promptly upon final determination thereof comply with (or cause compliance with) any such Applicable Law determined to be
valid or applicable or cure any violation of any Applicable Law; (v) such proceeding shall suspend the enforcement of the contested
Applicable Law against Borrower or the Property; and (vi) Borrower shall furnish (or cause to be furnished) such security as may
be required in the proceeding, or as may be requested by Lender, to insure compliance with such Applicable Law, together with
all interest and penalties payable in connection therewith. Lender may apply any such security or part thereof, as necessary to
cause compliance with such Applicable Law at any time when, in the judgment of Lender, the validity, applicability or violation
of such Applicable Law is finally established or the applicable Individual Property (or any part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or lost.


 






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Section 4.3.          Maintenance
and Use of Property. Borrower shall cause the Property to be maintained in a good and safe condition and repair in all material
respects. The Improvements and the Personal Property shall not be removed, demolished or materially altered (except for normal
replacement of the Personal Property) without the consent of Lender or as otherwise permitted pursuant to Section 4.21 hereof.
Borrower shall promptly repair, replace or rebuild any part of the Property which may be destroyed by any casualty, or become
damaged, worn or dilapidated or which may be affected by any proceeding of the character referred to in Section 3.13 hereof and
shall complete and pay for any structure at any time in the process of construction or repair on the Land. Borrower shall not
initiate, join in, acquiesce in, or consent to any change in any private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses which may be made of the Property or any part thereof; provided, however, Borrower
shall have no obligation to prosecute the Restoration of the Property if Net Proceeds are not made available to Borrower for such
purpose; provided, however, Borrower shall be obligated to repair the Property to the extent necessary (i) to protect life and
safety at the Property and (ii) to return the Property to a condition where the Property is deemed an architectural whole whereby
access to any portion of the Property is not impaired and the shell of the Improvements is fully complete and closed. If under
applicable zoning provisions the use of all or any portion of the Property is or shall become a nonconforming use, Borrower will
not cause or permit the nonconforming use to be discontinued or the nonconforming Improvement to be abandoned without the express
written consent of Lender.


 


Section 4.4.          Waste.
Borrower shall not commit (or permit to be committed) or suffer (or permit to be suffered) any waste of the Property or make any
change in the use of the Property which will in any way materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take (or permit to be taken) any action that might invalidate or give cause for cancellation of
any Policy, or do or permit to be done thereon anything that may in any way impair the value of the Property or the security for
the Loan. Borrower will not, without the prior written consent of Lender, permit any drilling or exploration for or extraction,
removal, or production of any minerals from the surface or the subsurface of the Property, regardless of the depth thereof or
the method of mining or extraction thereof.


 


Section 4.5.          Taxes
and Other Charges.


 


(a)          Borrower
shall pay all Taxes and Other Charges now or hereafter levied or assessed or imposed against the Property or any part thereof
as the same become due and payable; provided, however, Borrower’s obligation to directly pay Taxes and Other Charges shall
be suspended for so long as Borrower complies with the terms and provisions of Section 8.6 hereof. Upon Lender’s request,
Borrower shall furnish to Lender receipts for the payment of the Taxes and the Other Charges prior to the date the same shall
become delinquent (provided, however, that Borrower is not required to furnish (or permit to be furnished) such receipts for payment
of Taxes and Other Charges in the event that such Taxes and Other Charges have been paid by Lender pursuant to Section 8.6 hereof).
Borrower shall not suffer and shall promptly cause to be paid and discharged any lien or charge whatsoever which may be or become
a lien or charge against the Property, and shall promptly pay for all utility services provided to the Property.


 



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(b)          After
prior written notice to Lender, Borrower, at its own expense, may contest by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, the amount or validity or application in whole or in part of any Taxes or
Other Charges, provided that (i) no Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted
under and be conducted in accordance with the provisions of any other instrument to which Borrower is subject and shall not constitute
a default thereunder and such proceeding shall be permitted by and conducted in accordance with all Applicable Law; (iii) neither
the applicable Individual Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated,
canceled or lost; (iv) Borrower shall promptly upon final determination thereof pay (or cause to be paid) the amount of any such
Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (v) such
proceeding shall suspend the collection of such contested Taxes or Other Charges from the applicable Individual Property; and
(vi) Borrower shall furnish (or caused to be furnished) such security as may be required in the proceeding, or deliver to Lender
such reserve deposits as may be requested by Lender, to insure the payment of any such Taxes or Other Charges, together with all
interest and penalties thereon. Lender may pay over any such cash deposit or part thereof held by Lender to the claimant entitled
thereto at any time when, in the judgment of Lender, the entitlement of such claimant is established or the applicable Individual
Property (or part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, canceled or lost or there
shall be any danger of the lien of the Security Instrument being primed by any related lien.


 


Section 4.6.          Litigation.
Borrower shall give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened in writing
against Borrower which might have a Material Adverse Effect.


 


Section 4.7.          Access
to Property. Subject to the rights of any Tenant under any Lease, Borrower shall permit agents, representatives and employees
of Lender to inspect the Property or any part thereof at reasonable hours upon reasonable advance notice.


 


Section 4.8.          Notice
of Default. Borrower shall promptly advise Lender of any material adverse change in Borrower’s, Sponsor’s and/or
Guarantor’s condition (financial or otherwise) or of the occurrence of any Default or Event of Default of which Borrower
has actual knowledge.


 


Section 4.9.          Cooperate
in Legal Proceedings. Borrower shall cooperate fully with Lender with respect to any proceedings before any court, board or
other Governmental Authority which may in any way affect the rights of Lender hereunder or any rights obtained by Lender under
any of the Note, the Security Instrument or the other Loan Documents and, in connection therewith, permit Lender, at Lender’s
election, to participate in any such proceedings.


 


Section 4.10.         Performance
by Borrower. Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term and provision to
be observed and performed by Borrower under this Agreement, the Security Instrument, the Note and the other Loan Documents and
any other agreement or instrument affecting or pertaining to the Property and any amendments, modifications of changes thereto.


 


Section 4.11.         Awards.
Borrower shall cooperate with Lender in obtaining for Lender the benefits of any Awards or Insurance Proceeds lawfully or equitably
payable in connection with the Property, and Lender shall be reimbursed for any expenses incurred in connection therewith (including
reasonable, actual attorneys’ fees and disbursements, and the payment by Lender of the expense of an appraisal on behalf
of Borrower in case of a Casualty or Condemnation affecting the Property or any part thereto) out of such Awards or Insurance
Proceeds.


 



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Section 4.12.         Books
and Records.


 


(a)          Borrower
shall keep adequate books and records of account in accordance with an Approved Accounting Method, and furnish (or cause to be
furnished) to Lender:


 


(i)          quarterly
(and if required by Lender, monthly) certified rent rolls (in the form approved by Lender in connection with the closing of the
Loan) and tenant sales reports (if applicable) for each Individual Property, each signed and dated by a Responsible Officer of
Borrower, within ten (10) days after the end of each calendar month upon Lender’s request, or forty-five (45) days after
the end of each calendar quarter, as applicable;


 


(ii)         quarterly
(and, if required by Lender, monthly) operating statements of each Individual Property, prepared and certified by a Responsible
Officer of Borrower, on a consolidated basis, in the form required by Lender, detailing the revenues received and the expenses
incurred, within ten (10) days after the end of each calendar month upon Lender’s request or forty-five (45) days after
the end of each calendar quarter, as applicable;


 


(iii)        an
annual balance sheet, profit and loss statement, statement of cash flow of Borrower prepared on a consolidated basis with Sponsor,
by an accounting firm or other independent certified public accountant reasonably acceptable to Lender, within ninety (90) days
after the close of each fiscal year of Borrower;


 


(iv)        an
annual operating statement of each Individual Property, prepared and certified by a Responsible Officer of Borrower, on a consolidated
basis, in the form required by Lender, detailing the revenues received, the expenses incurred and containing appropriate year-to-date
information, within ninety (90) days after the close of each fiscal year of Borrower;


 


(v)         by
no later than December 15 of each calendar year upon the occurrence and during the continuance of a Cash Trap Event Period, an
annual operating budget for the next succeeding calendar year presented on a monthly basis consistent with the annual operating
statement described above for each Individual Property, including cash flow projections for the upcoming year and all proposed
capital replacements and improvements, which such budget shall not take effect until approved by Lender (each such annual budget,
individually and/or collectively, as the context may require, an “Annual Budget”). Upon the occurrence and
during the continuance of any Cash Trap Event Period, Lender shall have the right to approve each Annual Budget;


 


(vi)        [intentionally
omitted];


 



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(vii)       to
the extent applicable with respect to each Individual Property, by no later than ten (10) days after and as of the end of each
calendar month if required by Lender, and thereafter by no later than forty-five (45) days after and as of the end of each calendar
quarter, a summary report containing each of the following with respect to each Individual Property for the most recently completed
calendar month or quarter (as applicable): (A) aggregate sales by tenants under Leases or other occupants of the applicable Individual
Property, both on an actual (or to the extent such information is not provided by such tenants or occupants, Borrower’s
best estimate) and on a comparable store basis, (B) rent per square foot payable by each such tenant or occupant, (C) aggregate
occupancy of the applicable Individual Property by anchor space and in-line store space and (D) a tenant aging and receivables
report; and


 


(viii) the
Officer’s Certificate required pursuant to Section 5.3 hereof.


 


(b)          To
the extent applicable with respect to each Individual Property, upon request from Lender, Borrower shall furnish in a timely manner
to Lender:


 


(i)          a
property management report for each Individual Property, showing the number of inquiries made and/or rental applications received
from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender, in reasonable
detail and certified by a Responsible Officer of Borrower to be true and complete, but no more frequently than quarterly; and


 


(ii)         an
accounting of all security deposits held in connection with any Lease of any part of the Property, including the name and identification
number of the accounts in which such security deposits are held, the name and address of the financial institutions in which such
security deposits are held and the name of the person to contact at such financial institution, along with any authority or release
necessary for Lender to obtain information regarding such accounts directly from such financial institutions.


 


(c)          Within
ten (10) days of Lender’s request, Borrower shall furnish Lender (and shall cause Sponsor and/or Guarantor to furnish to
Lender) with such other additional financial or management information as may, from time to time, be reasonably required by Lender
in form and substance satisfactory to Lender. Borrower shall furnish to Lender and its agents convenient facilities for the examination
and audit of any such books and records at any reasonable time from time to time during business hours upon reasonable advance
notice.


 


(d)          Borrower
agrees that all financial statements and other items required to be delivered to Lender pursuant to this Section 4.12 (each a
“Required Financial Item” and collectively, the “Required Financial Items”) shall: (i) be
complete and correct in all material respects; (ii) present fairly the financial condition of the party; (iii) disclose all liabilities
that are required to be reflected or reserved against; and (iv) be prepared (A) in hardcopy and electronic formats and (B) in
accordance with the Approved Accounting Method. Borrower shall be deemed to warrant and represent that, as of the date of delivery
of any such financial statement, there has been no material adverse change in financial condition, nor have any assets or properties
been sold, transferred, assigned, mortgaged, pledged or encumbered since the date of such financial statement except as disclosed
by Borrower in a writing delivered to Lender. Borrower agrees that all Required Financial Items shall not contain any misrepresentation
or omission of a material fact. 


 



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(e)          Borrower
agrees to cause Guarantor to comply with the reporting requirements set forth in Section 10 of the Guaranty.


 


Section 4.13.         Estoppel
Certificates.


 


(a)          After
written request by Lender, Borrower, within twenty (20) days of such request, shall furnish Lender or any proposed assignee with
a statement, duly acknowledged and certified, setting forth (i) the original principal amount of the Note, (ii) the unpaid principal
amount of the Note, (iii) the rate of interest of the Note, (iv) the terms of payment and maturity date of the Note, (v) the date
installments of interest and/or principal were last paid, (vi) that, except as provided in such statement, no Event of Default
exists, (vii) that this Agreement, the Note, the Security Instrument and the other Loan Documents are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of such modification, (viii) whether any offsets or
defenses exist against the obligations secured hereby and, if any are alleged to exist, a detailed description thereof, (ix) that
all Leases are in full force and effect and have not been modified (or if modified, setting forth all modifications), (x) the
date to which the Rents thereunder have been paid pursuant to the Leases, (xi) whether or not, to the best knowledge of Borrower,
any of the lessees under the Leases are in default under the Leases, and, if any of the lessees are in default, setting forth
the specific nature of all such defaults, (xii) the amount of security deposits held by Borrower under each Lease and that such
amounts are consistent with the amounts required under each Lease, and (xiii) as to any other matters reasonably requested by
Lender and reasonably related to the Leases, the obligations created and evidenced hereby and by the Security Instrument or the
Property.


 


(b)          Borrower
shall use its best efforts to deliver to Lender, promptly upon request, duly executed estoppel certificates from any one or more
Tenants (and related lease guarantors) as required by Lender either (i) in substantially the same form as required pursuant to
the applicable Lease or (ii) attesting to such facts regarding the Lease as Lender may require, including, but not limited to,
attestations that each Lease covered thereby is in full force and effect with no defaults thereunder on the part of any party,
that none of the Rents have been paid more than one month in advance, except as security, and that the lessee claims no defense
or offset against the full and timely performance of its obligations under the Lease.


 


(c)          In
connection with a Secondary Market Transaction in connection with the Loan (or any portion thereof or interest therein), at Lender’s
written request, Borrower shall provide an estoppel certificate to any Investor or any prospective Investor in such form, substance
and detail as Lender, such Investor or prospective Investor may require.


 



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(d)          Borrower
shall deliver to Lender, upon request, estoppel certificates from each party under the Property Documents in form and substance
reasonably acceptable to Lender.


 


Section 4.14.         Leases
and Rents.


 


(a)          All
Leases and all renewals of Leases executed after the date hereof shall (i) provide for rental rates comparable to existing local
market rates for similar properties, if available, (ii) be on commercially reasonable terms with unaffiliated, third parties (unless
otherwise consented to by Lender), (iii) provide that such Lease is subordinate to the Security Instrument and that the lessee
will attorn to Lender and any purchaser at a foreclosure sale, (iv) not contain any terms which would have a Material Adverse
Effect and (v) shall be subject to Lender’s prior written approval as provided herein. Borrower shall not, without the prior
written consent of Lender, grant any approval under (or permit any approval to be deemed granted under), permit any sublease of,
enter into, enter into any agreement with respect to (including, without limitation, any non-disturbance agreement), renew, extend,
amend, modify, permit any assignment of, waive any provisions of (other than a waiver of immaterial provisions that do not have
a Material Adverse Effect), release any party to, terminate, exercise any recapture or enforcement rights with respect to (including,
without limitation, any exercise of rights after a Tenant default), reduce rents under, accept a surrender of space under, or
shorten the term of, in each case, any Lease. Notwithstanding the foregoing or anything contained herein to the contrary, Borrower
may enter into one or more subleases at any Individual Property, without Lender’s consent, provided, that (i) the applicable
Tenant remains fully liable under the terms of the applicable Lease, (ii) the aggregate subleases at an Individual Property do
not exceed forty-nine percent (49%) of the total rentable area of the applicable Individual Property, and (iii) there is no downgrade,
withdrawal or qualification of the long term unsecured debt rating of the applicable Tenant below its long term unsecured debt
rating as of the date hereof. Further, notwithstanding the foregoing or anything contained herein to the contrary, the prior written
consent of Lender shall not be required in connection with an amendment or modification of any Lease, if such amendment or modification
is immaterial and Borrower furnishes Lender with a copy of the same after execution thereof.


 


(b)          Borrower
(i) shall observe and perform the obligations imposed upon the lessor under the Leases in all material respects in a commercially
reasonable manner; (ii) shall enforce the terms, covenants and conditions contained in the Leases upon the part of the lessee
thereunder to be observed or performed in a commercially reasonable manner, provided, however, Borrower shall not terminate or
accept a surrender of a Lease without Lender’s prior approval; (iii) shall not collect any of the Rents more than one (1)
month in advance (other than security deposits); (iv) shall not execute any assignment of lessor’s interest in the Leases
or the Rents (except as contemplated by the Loan Documents); and (v) shall hold all security deposits under all Leases in accordance
with Applicable Law. Upon request, Borrower shall furnish Lender with executed copies of all Leases.


 



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(c)          Notwithstanding
anything contained herein to the contrary, Borrower shall not willfully withhold from Lender any information regarding renewal,
extension, amendment, modification, waiver of provisions of, termination, rental reduction of, surrender of space of, or shortening
of the term of, any Lease during the term of the Loan. Borrower further agrees to provide Lender with written notice of a Tenant
“going dark” under such Tenant’s Lease within five (5) Business Days after such Tenant “goes dark”
and Borrower’s failure to provide such notice shall constitute an Event of Default.


 


(d)          Borrower
shall notify Lender in writing, within two (2) Business Days following receipt thereof, of Borrower’s receipt of any termination
fee or payment (“Lease Payment”) paid by any Tenant under any Lease in consideration of any termination, modification
or amendment or settlement of any Lease or any release or discharge of any Tenant under any Lease from any obligation thereunder
(a “Lease Payment Event”). Borrower further covenants and agrees that (i) Borrower shall hold any such Lease
Payment in trust for the benefit of Lender and (ii) (A) in the event such Lease Payment is less than $100,000 and such Lease Payment
Event does not have a Material Adverse Effect, such Lease Payment shall be payable to Borrower or (B) in the event such Lease
Payment equals or exceeds $100,000 or such Lease Payment Event has a Material Adverse Effect, such Lease Payment shall be placed
by Borrower in reserve with Lender, to be disbursed by Lender for tenant improvement and leasing commission costs with respect
to the Property and/or for payment of the Debt or otherwise in connection with the Loan and/or the Property, as so determined
by Lender, in its sole discretion.


 


(e)          If
Borrower shall default in the performance or observance of any term, covenant or condition of any Lease and shall fail to cure
the same prior to the expiration of any applicable cure period provided thereunder, Lender shall have the right, but shall be
under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms,
covenants and conditions of such Lease on the part of Borrower to be performed or observed on behalf of Borrower, to the end that
the rights of Borrower in, to and under such Lease shall be kept unimpaired and free from default. If any party to any Lease shall
deliver to Lender a copy of any notice of default under such Lease, such notice shall constitute full protection to Lender for
any action taken or omitted to be taken by Lender, in good faith, in reliance thereon.


 


(f)          Notwithstanding
anything to the contrary contained herein, to the extent Lender’s prior approval is required for any leasing matters set
forth in this Section 4.14, Lender shall have ten (10) Business Days from receipt of written request and all required information
and documentation relating thereto in which to approve or disapprove such matter, provided that such request to Lender is marked
in bold lettering with the following language: “LENDER’S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT
OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER” and the envelope containing
the request must be marked “PRIORITY”. In the event that Lender fails to respond to the leasing matter in question
within such time, Lender’s approval shall be deemed given for all purposes. Borrower shall provide Lender with such information
and documentation as may be reasonably required by Lender, including, without limitation, lease comparables and other market information
as reasonably required by Lender.


 



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(g)          In
the event of any conflict or inconsistency between the terms and provisions of this Section 4.14 and the balance of the provisions
hereof and/or any of the other Loan Documents, the terms and conditions set forth in this Section 4.14 shall control and be binding.


 


Section 4.15.         Management
Agreement.


 


(a)          Borrower
shall (i) diligently perform, observe and enforce all of the terms, covenants and conditions of the Management Agreement on the
part of Borrower to be performed, observed and enforced to the end that all things shall be done which are necessary to keep unimpaired
the rights of Borrower under the Management Agreement and (ii) promptly notify Lender of the giving of any notice to Borrower
of any default by Borrower in the performance or observance of any of the terms, covenants or conditions of the Management Agreement
on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice. Without Lender’s
prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, Borrower shall not surrender
the Management Agreement, consent to the assignment by Manager of its interest under the Management Agreement, or terminate or
cancel the Management Agreement or modify, change, supplement, alter or amend the Management Agreement, in any respect, either
orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance
and observance of the terms, covenants and conditions of this Agreement, all the rights, privileges and prerogatives of Borrower
to surrender the Management Agreement or to terminate, cancel, modify, change, supplement, alter or amend the Management Agreement
in any respect, and any such surrender of the Management Agreement or termination, cancellation, modification, change, supplement,
alteration or amendment of the Management Agreement without the prior consent of Lender shall be void and of no force and effect.
If Borrower shall default in the performance or observance of any material term, covenant or condition of the Management Agreement
on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Agreement,
and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under
no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants
and conditions of the Management Agreement on the part of Borrower to be performed or observed to be promptly performed or observed
on behalf of Borrower, to the end that the rights of Borrower in, to and under the Management Agreement shall be kept unimpaired
and free from default. Lender and any person designated by Lender shall have, and are hereby granted, the right to enter upon
the Property at any time and from time to time for the purpose of taking any such action. If Manager shall deliver to Lender a
copy of any notice sent to Borrower of default under the Management Agreement, such notice shall constitute full protection to
Lender for any action taken or omitted to be taken by Lender in good faith, in reliance thereon. Borrower shall notify Lender
if Manager sub-contracts to a third party or an affiliate any or all of its management responsibilities under the Management Agreement.
Borrower shall, from time to time, use its best efforts to obtain from Manager under the Management Agreement such certificates
of estoppel with respect to compliance by Borrower with the terms of the Management Agreement as may be requested by Lender. Borrower
shall exercise each individual option, if any, to extend or renew the term of the Management Agreement upon demand by Lender made
at any time within one (1) year of the last day upon which any such option may be exercised. Any sums expended by Lender pursuant
to this paragraph shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Lender,
shall be deemed to constitute a portion of the Debt, shall be secured by the lien of the Security Instrument and the other Loan
Documents and shall be immediately due and payable upon demand by Lender therefor.


 



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(b)          Without
limitation of the foregoing, if the Management Agreement is terminated pursuant to the Assignment of Management Agreement or for
any other reason, then Lender, at its option, may require Borrower to engage, in accordance with the terms and conditions set
forth in the Assignment of Management Agreement, a new manager (the “New Manager”) to manage the applicable
Individual Property, which such New Manager shall be a Qualified Manager. New Manager shall be engaged by Borrower pursuant to
a written management agreement that complies with the terms hereof and of the Assignment of Management Agreement and is otherwise
satisfactory to Lender in all respects. New Manager and Borrower shall execute an Assignment of Management Agreement in the form
then used by Lender. To the extent that such New Manager is an Affiliated Manager, Borrower’s engagement of such New Manager
shall be subject to Borrower’s delivery to Lender of a New Non-Consolidation Opinion with respect to such New Manager and
new management agreement.


 


Section 4.16.         Payment
for Labor and Materials.


 


(a)          Subject
to Section 4.16(b), Borrower will promptly pay when due all bills and costs for labor, materials, and specifically fabricated
materials incurred in connection with the Property (any such bills and costs, a “Work Charge”) and never permit
to exist in respect of the Property or any part thereof any lien or security interest, even though inferior to the liens and the
security interests hereof, and in any event never permit to be created or exist in respect of the Property or any part thereof
any other or additional lien or security interest other than the liens or security interests created hereby and by the Security
Instrument, except for the Permitted Encumbrances.


 



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(b)          After
prior written notice to Lender, Borrower, at its own expense, may contest (or permit to be contested) by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the validity of any Work Charge, the applicability of any
Work Charge to Borrower or to any Individual Property or any alleged non-payment of any Work Charge and defer paying the same,
provided that (i) no Event of Default has occurred and is continuing; (ii) such proceeding shall be permitted under and be conducted
in accordance with the provisions of any instrument to which Borrower is subject and shall not constitute a default thereunder
and such proceeding shall be conducted in accordance with all Applicable Law; (iii) neither the applicable Individual Property
nor any part thereof or interest therein will be in imminent danger of being sold, forfeited, terminated, cancelled or lost; (iv)
Borrower shall promptly upon final determination thereof pay (or cause to be paid) any such contested Work Charge determined to
be valid, applicable or unpaid; (v) such proceeding shall suspend the collection of such contested Work Charge from the Property
or Borrower shall have paid the same (or shall have caused the same to be paid) under protest; and (vi) Borrower shall furnish
(or cause to be furnished) such security as may be required in the proceeding, or as may be reasonably requested by Lender, to
insure payment of such Work Charge, together with all interest and penalties payable in connection therewith. Lender may apply
any such security or part thereof, as necessary to pay for such Work Charge at any time when, in the judgment of Lender, the validity,
applicability or non-payment of such Work Charge is finally established or the applicable Individual Property (or any part thereof
or interest therein) shall be in present danger of being sold, forfeited, terminated, cancelled or lost.


 


Section 4.17.         Performance
of Other Agreements. Borrower shall observe and perform each and every term to be observed or performed by Borrower pursuant
to the terms of any agreement or recorded instrument affecting or pertaining to the Property, or given by Borrower to Lender for
the purpose of further securing the Debt and any amendments, modifications or changes thereto.


 


Section 4.18.         Debt
Cancellation. Borrower shall not cancel or otherwise forgive or release any claim or debt (other than termination of Leases
in accordance herewith) owed to Borrower by any Person, except for adequate consideration and in the ordinary course of Borrower’s
business.


 


Section 4.19.         ERISA


 


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


 


(b)          Borrower
further covenants and agrees to deliver to Lender such certifications or other evidence from time to time throughout the term
of the Loan as requested by Lender in its reasonable discretion, that (i) Borrower is not an “employee benefit plan”
as defined in Section 3(3) of ERISA, or other retirement arrangement, which is subject to Title I of ERISA or Section 4975 of
the IRS Code, or a “governmental plan” within the meaning of Section 3(32) of ERISA; (ii) Borrower is not subject
to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (iii) one or more of
the following circumstances is true:


 


(A)         Equity
interests in Borrower are publicly offered securities, within the meaning of 29 C.F.R. § 2510.3 101(b)(2);


 


(B)         Less
than 25 percent of each outstanding class of equity interests in Borrower are held by “benefit plan investors” within
the meaning of 29 C.F.R.§ 2510.3 101(f)(2), as modified by § 3(42) of ERISA, disregarding the value of any equity interests
in Borrower held by (I) a Person (other than a benefit plan investor) who has discretionary authority or control with respect
to the assets of Borrower, (II) any Person who provides investment advice for a fee (direct or indirect) with respect to the assets
of Borrower, or (III) any affiliate of a Person described in the immediately preceding clause (I) or (II); 


 



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(C)         Borrower
qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R
§ 2510.3 101(c) or (e) or an investment company registered under The Investment Company Act of 1940; or


 


(D)         The
assets of Borrower are not otherwise “plan assets” of one or more “employee benefit plans” (as defined
in Section 3(3) of ERISA) subject to Title I of ERISA, within the meaning of 29 C.F.R. § 2510.3-101.


 


Section 4.20.         No
Joint Assessment. Borrower shall not suffer, permit or initiate the joint assessment of any Individual Property with (a) any
other real property constituting a tax lot separate from the applicable Individual Property, or (b) any portion of the applicable
Individual Property which may be deemed to constitute personal property, or any other procedure whereby the lien of any taxes
which may be levied against such personal property shall be assessed or levied or charged to the applicable Individual Property.


 


Section 4.21.         Alterations.
Lender’s prior approval (which approval shall not be unreasonably withheld, conditioned, or delayed) shall be required in
connection with any alterations to any Improvements (a) that may have a Material Adverse Effect, (b) the cost of which (including
any related alteration, improvement or replacement) is reasonably anticipated to exceed the Alteration Threshold or (c) that are
structural in nature, (1) except for alterations or tenant improvements being made expressly pursuant to existing Leases that
have been reviewed and approved by Lender and (2) excluding any immaterial structural alterations to any Improvements. If the
total unpaid amounts incurred and to be incurred with respect to any alterations to the Improvements shall at any time exceed
the Alteration Threshold, Borrower shall promptly deliver (or cause to be delivered) to Lender as security for the payment of
such amounts and as additional security for Borrower’s obligations under the Loan Documents any of the following: (i) cash,
(ii) U.S. Obligations, (iii) other securities acceptable to Lender, or (iv) a completion bond acceptable to Lender. Such security
shall be in an amount equal to the excess of the total unpaid amounts incurred and to be incurred with respect to such alterations
to the Improvements over the Alteration Threshold. All alterations to any Improvements shall be made lien-free and in a good and
workmanlike manner in accordance with all Applicable Laws.


 



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Section 4.22. Property
Documents Covenants. Borrower agrees that without the prior consent of Lender, Borrower will not enter into any new Property
Document or execute modifications to any existing Property Document if such new Property Document or such modifications will have
a Material Adverse Effect. Borrower shall enforce, shall comply with, and shall use commercially reasonable efforts to cause each
of the parties to each Property Document to comply with all of the terms and conditions contained in such Property Document.


 


Section 4.23.         Ground
Lease.


 


(a)          Borrower
shall (i) pay (or cause to be paid) all rents, additional rents and other sums required to be paid by Borrower, as tenant
under and pursuant to the provisions of the Ground Lease, (ii) diligently perform and observe all of the terms, covenants and
conditions of the Ground Lease on the part of Borrower, as tenant thereunder, to be performed and observed, (iii) promptly notify
Lender of the giving of any written notice by the landlord under the Ground Lease to Borrower of any default by Borrower in the
performance or observance of any of the terms, covenants or conditions of the Ground Lease on the part of Borrower, as tenant
thereunder, to be performed or observed, and deliver to Lender a true copy of each such notice within five (5) Business Days of
receipt, and (iv) promptly notify Lender of any bankruptcy, reorganization or insolvency of the landlord under the Ground Lease
or of any notice thereof, and deliver to Lender a true copy of such notice within five (5) Business Days of Borrower’s receipt.
Borrower shall not, without the prior consent of Lender, surrender the leasehold estate created by the Ground Lease or terminate
or cancel the Ground Lease or modify, change, supplement, alter or amend the Ground Lease, either orally or in writing. Borrower
hereby assigns to Lender, as further security for the payment and performance of the obligations and for the performance and observance
of the terms, covenants and conditions of the Security Instrument, this Agreement and the other Loan Documents, all of the rights,
privileges and prerogatives of Borrower, as tenant under the Ground Lease, to surrender the leasehold estate created by the Ground
Lease or to terminate, cancel, modify, change, supplement, alter or amend the Ground Lease in any material respect, and any such
surrender of the leasehold estate created by the Ground Lease or termination, cancellation, modification, change, supplement,
alteration or amendment of the Ground Lease in any material respect without the prior consent of Lender shall be void and of no
force and effect. If Borrower shall default in the performance or observance of any term, covenant or condition of the Ground
Lease on the part of Borrower, as tenant thereunder, and shall fail to cure the same prior to the expiration of any applicable
cure period provided thereunder, then, without limiting the generality of the other provisions of the Security Instrument, this
Agreement and the other Loan Documents, and without waiving or releasing Borrower from any of its obligations hereunder, Lender
shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate
to cause all of the terms, covenants and conditions of the Ground Lease on the part of Borrower to be performed or observed on
behalf of Borrower, to the end that the rights of Borrower in, to and under the Ground Lease shall be kept unimpaired and free
from default. If the landlord under the Ground Lease shall deliver to Lender a copy of any notice of default under the Ground
Lease, such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender, in good faith,
in reliance thereon. Borrower shall exercise each individual option, if any, to extend or renew the term of the Ground Lease upon
demand by Lender made at any time not more than one (1) year prior to, and not less than one (1) month prior to the last day upon
which any such option may be exercised, and Borrower hereby expressly authorizes and appoints Lender its attorney-in- fact to
exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be
deemed to be coupled with an interest. Borrower will not consent to any mortgage, security deed, lease or other interest on or
in the landlord’s interest in all or any part of the Property, nor will it subordinate or consent to the subordination of
the Ground Lease to any such interest, unless, in each such case, the written consent of Lender shall have been first had and
obtained.



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Notwithstanding anything contained in the
Ground Lease to the contrary, Borrower shall not further sublet any portion of the Property (other than as permitted pursuant
to Section 4.14 hereof) without prior written consent of Lender. Each such sublease hereafter made shall provide that (i) in the
event of the termination of the Ground Lease, the sublease shall not terminate or be terminable by the lessee thereunder; (ii)
in the event of any action for the foreclosure of the Security Instrument, the sublease shall not terminate or be terminable by
the lessee thereunder by reason of the termination of the Ground Lease unless such lessee is specifically named and joined in
any such action and unless a judgment is obtained therein against such lessee; and (iii) in the event that the Ground Lease is
terminated as aforesaid, the lessee under the sublease shall attorn to the lessor under the Ground Lease or to the purchaser at
the sale of the Property on such foreclosure, as the case may be. In the event that any portion of the Property shall be sublet
pursuant to the terms of this subsection, such sublease shall be deemed to be included in the Property.


 


Section 4.24.         Acquisition
of Fee Interests.


 


Upon expiration or earlier
termination of the Ground Lease, MO Borrower shall be required to acquire the Missouri Fee Interest (“Fee Interest Acquisition”);
provided, that, in connection therewith, each of the following conditions are satisfied (i) the applicable Borrower shall provide
Lender with at least ten (10) days prior written notice of the Fee Interest Acquisition, (ii) the Borrower and, if required by
Lender, Guarantor, shall enter into such amendments or other modifications to the Loan Documents as may be reasonably required
by Lender (which such amendments or modifications shall be limited to such amendments or modifications as may be reasonably required
to add the Missouri Fee Interest to the definition of “Property” thereunder and otherwise collateralize the same unless
a specific fact or circumstance related to such Missouri Fee Interest, Borrower, Guarantor, the applicable seller of such Missouri
Fee Interest and/or the Property shall exist and shall reasonably necessitate additional amendments or modifications to the Loan
Documents as reasonably required by Lender), (iii) the applicable Borrower shall provide Lender (A) a title search for the applicable
Individual Property indicating that the applicable Individual Property is free from all liens, claims and other encumbrances other
than Permitted Encumbrances and (B) such Title Insurance as may be reasonably required by Lender, (iv) to the extent that any
Tenant has any interest in the portion of the Property to which the Ground Lease relates, the applicable Borrower shall provide
Lender an Officer’s Certificate certifying that, after giving effect to the Fee Interest Acquisition and termination of
such Ground Lease, the applicable Lease will remain in full force and effect and said Tenant will, if applicable, attorn to the
applicable Borrower as owner of the Missouri Fee Interest, (v) the applicable Borrower shall provide Lender with copies of the
documents and/or instruments entered into in connection with the Fee Acquisition (the “Fee Acquisition Documents”)
and such legal opinions and other physical condition reports, in each case, as may be reasonably required by Lender (which such
opinions shall be limited to the due authorization, authority and enforceability of any Loan Document amendments entered into
in connection with this Section unless a specific fact or circumstance related to such Missouri Fee Interest, the applicable Borrower,
Guarantor, the applicable seller of such Missouri Fee Interest and/or the applicable Individual Property shall exist and shall
reasonably necessitate additional opinions required by Lender), (vi) the applicable Borrower shall provide Lender UCC, judgment,
lien, litigation searches and such other searches as may be reasonably required by Lender, in each case, with respect to the applicable
Borrower, the seller of the Missouri Fee Interest and the applicable portion of the Property, which such searches (including,
without limitation, the form and results thereof and jurisdictions searches) shall be reasonably satisfactory to Lender, (vii)
the applicable Borrower shall pay all of its own costs and expenses (including, without limitation, the sums required to consummate
the Fee Interest Acquisition) and shall pay all of Lender’s reasonable, out-of-pocket costs and expenses incurred in connection
therewith (including, without limitation, reasonable attorneys’ fees, mortgage or similar taxes and recording fees) and
(xi) the applicable Borrower shall provide Lender an Officer’s Certificate certifying that, as of the consummation of the
Fee Interest Acquisition, the terms and conditions of this Section 6.6 have been satisfied. Notwithstanding anything to the contrary
contained herein or in any other Loan Document, after the consummation of any Fee Interest Acquisition in accordance with the
terms and conditions hereof, (i) the defined term “Property” hereunder and under the other Loan Documents shall be
deemed to include the Missouri Fee Interest and (ii) the applicable Borrower shall have the right, without the prior consent of
Lender, to terminate the Ground Lease to which the Missouri Fee Interest relates.


 



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ARTICLE 5


 


ENTITY COVENANTS


 


Section 5.1.          Single
Purpose Entity/Separateness.


 


(a)          Each
Borrower has not, and, for so long as the Debt remains outstanding,


will not:


 


(i)          engage
in any business or activity other than the ownership, operation and maintenance of the applicable Individual Property and activities
incidental thereto and, with respect to MO Borrower, the Bonds;


 


(ii)         acquire
or own any assets other than (A) the applicable Individual Property, and (B) with respect to the MO Borrower only, the Bonds,
and (C) such incidental Personal Property as may be necessary for the ownership, leasing, maintenance and operation of such Individual
Property;


 



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(iii)        merge
into or consolidate with any Person, or dissolve, terminate, liquidate in whole or in part, transfer or otherwise dispose of all
or substantially all of its assets or change its legal structure;


 


(iv)        fail
to observe all organizational formalities, or fail to preserve its existence as an entity duly organized, validly existing and
in good standing (if applicable) under the Applicable Law of the jurisdiction of its organization or formation, or amend, modify,
terminate or fail to comply with the provisions of its organizational documents;


 


(v)         own
any subsidiary, or make any investment in, any Person;


 


(vi)        commingle
its assets with the assets of any other Person;


 


(vii)       incur
any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt,
(B) trade and operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness
is (1) unsecured, (2) not evidenced by a note, (3) on commercially reasonable terms and conditions, and (4) due not more than
sixty (60) days past the date incurred and paid on or prior to such date, (C) Permitted Equipment Leases and/or (D) Borrower’s
obligations and liabilities under the Interest Rate Protection Agreement; provided however, the aggregate amount of the indebtedness
described in (B) and (C) shall not exceed at any time two percent (2%) of the outstanding aggregate Allocated Loan Amounts associated
with the portions of the Property owned by Borrower. No Indebtedness other than the Debt may be secured (subordinate or pari passu)
by the Property;


 


(viii)      fail
to maintain all of its books, records, financial statements and bank accounts separate from those of its affiliates and any constituent
party. Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided,
however, that Borrower’s assets 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 the separateness of Borrower and such
affiliates and to indicate that Borrower’s assets and credit are not 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
has maintained and will maintain its books, records, resolutions and agreements as official records;


 


(ix)         enter
into any contract or agreement with any general partner, member, shareholder, principal or affiliate, except upon terms and conditions
that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with unaffiliated
third parties;


 



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(x)          maintain
its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from
those of any other Person;


 


(xi)         assume
or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge
its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other
Person, other than in the context of the cross-collateralization and cross-defaulting of the Loan;


 


(xii)        make
any loans or advances to any Person;


 


(xiii)       fail
to file its own tax returns (unless prohibited by Applicable Law from doing so);


 


(xiv)      fail
either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business
solely in its own name or fail to correct any known misunderstanding regarding its separate identity;


 


(xv)       fail
to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in
light of its contemplated business operations (to the extent there exists sufficient cash flow from the applicable Individual
Property to do so after the payment of all operating expenses and Debt Service and shall not require any equity owner to make
additional capital contributions to Borrower);


 


(xvi)      without
the unanimous written consent of all of its partners or members, as applicable, and the consent of each Independent Director (regardless
of whether such Independent Director is engaged at the Borrower or SPE Component Entity level), (a) file or consent to the filing
of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Rights Laws, (b) seek or consent to
the appointment of a receiver, liquidator or any similar official, (c) take any action that might cause such entity to become
insolvent, or (d) make an assignment for the benefit of creditors;


 


(xvii)     fail
to allocate shared expenses (including, without limitation, shared office space) or fail to use separate stationery, invoices
and checks;


 


(xviii)    fail
to pay its own liabilities (including, without limitation, salaries of its own employees) from its own funds or fail to maintain
a sufficient number of employees in light of its contemplated business operations (in each case to the extent there exists sufficient
cash flow from the applicable Individual Property to do so);


 


(xix)       acquire
obligations or securities of its partners, members, shareholders or other affiliates, as applicable; or


 



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(xx) violate
or cause to be violated the assumptions made with respect to Borrower and its principals in the Non-Consolidation Opinion or in
any New Non-Consolidation Opinion.


 


(b)          If
Borrower is a limited partnership or a limited liability company (other than an Acceptable LLC), each general partner or managing
member (each, an “SPE Component Entity”) shall be a corporation or an Acceptable LLC (I) whose sole asset is
its interest in Borrower, (II) which has not been and shall not be permitted to engage in any business or activity other than
owning an interest in Borrower; (III) which has not been and shall not be permitted to incur any debt, secured or unsecured, direct
or contingent (including guaranteeing any obligation); and (IV) which has and will at all times own at least a 0.5% direct equity
ownership interest in Borrower. Each such SPE Component Entity will at all times comply, and will cause Borrower to comply, with
each of the representations, warranties, and covenants contained in this Article 5 (to the extent applicable) as if such representation,
warranty or covenant was made directly by such SPE Component Entity. Upon the withdrawal or the disassociation of an SPE Component
Entity from Borrower, Borrower shall immediately appoint a new SPE Component Entity whose articles of incorporation or organization
are substantially similar to those of such SPE Component Entity and deliver a New Non-Consolidation Opinion to Lender with respect
to the new SPE Component Entity and its equity owners. As of the date hereof, Borrower is an Acceptable LLC and an SPE Component
Entity is not required so long as Borrower continues to qualify as an Acceptable LLC.


 


(c)          In
the event Borrower or the SPE Component Entity is an Acceptable LLC, the limited liability company agreement of Borrower or the
SPE Component Entity (as applicable) (the “LLC Agreement”) shall provide that (i) upon the occurrence of any
event that causes the last remaining member of Borrower or the SPE Component Entity (as applicable) (“Member”)
to cease to be the member of Borrower or the SPE Component Entity (as applicable) (other than (A) upon an assignment by Member
of all of its limited liability company interest in Borrower or the SPE Component Entity (as applicable) and the admission of
the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission
of an additional member of Borrower or the SPE Component Entity (as applicable) in accordance with the terms of the Loan Documents
and the LLC Agreement), any person acting as Independent Director of Borrower or the SPE Component Entity (as applicable) shall,
without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or the SPE Component
Entity (as applicable) automatically be admitted to Borrower or the SPE Component Entity (as applicable) as a member with a 0%
economic interest (“Special Member”) and shall continue Borrower or the SPE Component Entity (as applicable)
without dissolution and (ii) Special Member may not resign from Borrower or the SPE Component Entity (as applicable) or transfer
its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower or the SPE Component Entity (as
applicable) as a Special Member in accordance with requirements of Delaware or Maryland law (as applicable) and (B) after giving
effect to such resignation or transfer, there remains at least one (1) Independent Director of the SPE Component Entity or Borrower
(as applicable) in accordance with Section 5.2 below. The LLC Agreement shall further provide that (i) Special Member shall automatically
cease to be a member of Borrower or the SPE Component Entity (as applicable) upon the admission to Borrower or the SPE Component
Entity (as applicable) of the first substitute member, (ii) Special Member shall be a member of Borrower or the SPE Component
Entity (as applicable) that has no interest in the profits, losses and capital of Borrower or the SPE Component Entity (as applicable)
and has no right to receive any distributions of the assets of Borrower or the SPE Component Entity (as applicable), (iii) pursuant
to the applicable provisions of the limited liability company act of the State of Delaware or Maryland (as applicable, the “Act”),
Special Member shall not be required to make any capital contributions to Borrower or the SPE Component Entity (as applicable)
and shall not receive a limited liability company interest in Borrower or the SPE Component Entity (as applicable), (iv) Special
Member, in its capacity as Special Member, may not bind Borrower or the SPE Component Entity (as applicable) and (v) except as
required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote
on, approve or otherwise consent to any action by, or matter relating to, Borrower or the SPE Component Entity (as applicable)
including, without limitation, the merger, consolidation or conversion of Borrower or the SPE Component Entity (as applicable);
provided, however, such prohibition shall not limit the obligations of Special Member, in its capacity as Independent Director,
to vote on such matters required by the Loan Documents or the LLC Agreement. In order to implement the admission to Borrower or
the SPE Component Entity (as applicable) of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior
to its admission to Borrower or the SPE Component Entity (as applicable) as Special Member, Special Member shall not be a member
of Borrower or the SPE Component Entity (as applicable), but Special Member may serve as an Independent Director of Borrower or
the SPE Component Entity (as applicable).


 



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(d)          The
LLC Agreement shall further provide that, (i) upon the occurrence of any event that causes the Member to cease to be a member
of Borrower or the SPE Component Entity (as applicable) to the fullest extent permitted by law, the personal representative of
Member shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of Member in
Borrower or the SPE Component Entity (as applicable) agree in writing (A) to continue Borrower or the SPE Component Entity (as
applicable) and (B) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute
member of Borrower or the SPE Component Entity (as applicable) effective as of the occurrence of the event that terminated the
continued membership of Member in Borrower or the SPE Component Entity (as applicable), (ii) any action initiated by or brought
against Member or Special Member under any Creditors’ Rights Laws shall not cause Member or Special Member to cease to be
a member of Borrower or the SPE Component Entity (as applicable) and upon the occurrence of such an event, the business of Borrower
or the SPE Component Entity (as applicable) shall continue without dissolution, and (iii) each of Member and Special Member waives
any right it might have to agree in writing to dissolve Borrower or the SPE Component Entity (as applicable) upon the occurrence
of any action initiated by or brought against Member or Special Member under any Creditors’ Rights Laws, or the occurrence
of an event that causes Member or Special Member to cease to be a member of Borrower or the SPE Component Entity (as applicable).


 



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(a)          The
organizational documents of each Borrower (to the extent such Borrower is a corporation or an Acceptable LLC) or the SPE Component
Entity, as applicable, shall provide that at all times there shall be at least one (1) duly appointed member of its board of directors
or managers, as applicable (each, an “Independent Director”) reasonably satisfactory to Lender who each shall
not have been at the time of each such individual’s initial appointment, and shall (I) not have been at any time during
the preceding five years, and shall not be at any time while serving as Independent Director, either (i) a shareholder (or other
equity owner) of, or an officer, director (other than in its capacity as Independent Director), partner, member or employee of,
any Borrower or any of its respective shareholders, partners, members, subsidiaries or affiliates, (ii) a customer of, or supplier
to, or other Person who derives any of its purchases or revenues from its activities with, any Borrower or any of its respective
shareholders, partners, members, subsidiaries or affiliates, (iii) a Person who Controls or is under common Control with any such
shareholder, officer, director, partner, member, employee supplier, customer or other Person, or (iv) a member of the immediate
family of any such shareholder, officer, director, partner, member, employee, supplier, customer or other Person, and (II) be
employed by, in good standing with and engaged by such Borrower in connection with, in each case, an Approved ID Provider.


 


The organizational documents
of each Borrower or the SPE Component Entity (as applicable) shall further provide that (I) the board of directors or managers
of each Borrower or the SPE Component Entity as applicable, and the constituent members of such entities (the “Constituent
Members”) shall not take any action which, under the terms of any organizational documents of such Borrower or the SPE
Component Entity as applicable requires the unanimous vote of (1) the board of directors or managers of such Borrower or the SPE
Component Entity as applicable, or (2) the Constituent Members, unless at the time of such action there shall be at least one
(1) engaged as provided by the terms hereof; (II) any resignation, removal or replacement of any Independent Director shall not
be effective without two (2) Business Days prior written notice to Lender accompanied by evidence that the replacement Independent
Director satisfies the applicable terms and conditions hereof and of the applicable organizational documents; (III) to the fullest
extent permitted by applicable law, including Section 18- 1101(c) of the Act and notwithstanding any duty otherwise existing at
law or in equity, the Independent Director shall consider only the interests of the Constituent Members and such Borrower and
any SPE Component Entity (including such Borrower’s and any SPE Component Entity’s respective creditors) in acting
or otherwise voting on the matters provided for herein and in such Borrower’s and SPE Component Entity’s organizational
documents (which such fiduciary duties to the Constituent Members and such Borrower and any SPE Component Entity (including such
Borrower’s and any SPE Component Entity’s respective creditors), in each case, shall be deemed to apply solely to
the extent of their respective economic interests in such Borrower or SPE Component Entity (as applicable) exclusive of (x) all
other interests (including, without limitation, all other interests of the Constituent Members), (y) the interests of other affiliates
of the Constituent Members, such Borrower and SPE Component Entity and (z) the interests of any group of affiliates of which the
Constituent Members, such Borrower or SPE Component Entity is a part)); (IV) other than as provided in subsection (III) above,
the Independent Director shall not have any fiduciary duties to any Constituent Members, any directors of such Borrower or SPE
Component Entity or any other Person; (V) the foregoing shall not eliminate the implied contractual covenant of good faith and
fair dealing under applicable law; and (VI) to the fullest extent permitted by applicable law, including Section 18-1101(e) of
the Act, an Independent Director shall not be liable to such Borrower, SPE Component Entity, any Constituent Member or any other
Person for breach of contract or breach of duties (including fiduciary duties), unless the Independent Director acted in bad faith
or engaged in willful misconduct.


 



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Section 5.3.          Compliance
Certificate. Upon request from Lender, but no more than one (1) time during any twelve (12) month period (provided no Event
of Default or Cash Trap Event Period has occurred and is continuing), Borrower shall provide an Officer’s Certificate certifying
as to such Borrower’s continued compliance with the terms of this Article 5 and the terms of the Cash Management Agreement.


 


Section 5.4.          Change
of Name, Identity or Structure. Borrower shall not change (or permit to be changed) Borrower’s or the SPE Component
Entity’s (a) name, (b) identity (including its trade name or names), (c) principal place of business set forth on the first
page of this Agreement or, (d) if not an individual, Borrower’s or the SPE Component Entity’s corporate, partnership
or other structure, without notifying Lender of such change in writing at least thirty (30) days prior to the effective date of
such change and, in the case of a change in Borrower’s or the SPE Component Entity’s structure, without first obtaining
the prior written consent of Lender. Borrower shall execute and deliver to Lender, prior to or contemporaneously with the effective
date of any such change, any financing statement or financing statement change required by Lender to establish or maintain the
validity, perfection and priority of the security interest granted herein. At the request of Lender, Borrower shall execute a
certificate in form satisfactory to Lender listing the trade names under which Borrower or the SPE Component Entity intends to
operate the Property, and representing and warranting that Borrower or the SPE Component Entity does business under no other trade
name with respect to the Property.


 


Section 5.5.          Business
and Operations. Borrower will continue to engage in the businesses now conducted by it as and to the extent the same are necessary
for the ownership, maintenance, management and operation of the Property. Borrower will qualify to do business and will remain
in good standing under the laws of the jurisdiction as and to the extent the same are required for the ownership, maintenance,
management and operation of the Property.


 


ARTICLE 6


 


NO SALE OR ENCUMBRANCE


 


Section 6.1.          Transfer
Definitions.         For purposes of this Article 6,“Restricted
Party” shall mean Borrower, Sponsor, Guarantor, any SPE Component Entity, any Affiliated Manager, or any shareholder,
partner, member or non-member manager, or any direct or indirect legal or beneficial owner of Borrower, Sponsor, Guarantor, any
SPE Component Entity, any Affiliated Manager or any non-member manager; and a “Sale or Pledge” shall mean a
voluntary or involuntary sale, conveyance, lease, mortgage, grant, bargain, encumbrance, pledge, assignment, grant of any options
with respect to, or any other transfer or disposition of (directly or indirectly, voluntarily or involuntarily, by operation of
law or otherwise, and whether or not for consideration or of record) a legal or beneficial interest.


 



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Section 6.2.          No
Sale/Encumbrance.


 


(a)          Except
as otherwise expressly provided in this Agreement, without the prior written consent of Lender, Borrower shall not cause or permit
(i) a Sale or Pledge of the Property or any part thereof, (ii) a Sale or Pledge of an interest in any Restricted Party or (iii)
any change in Control of Borrower, Sponsor, Guarantor, any Affiliated Manager, or any change in the direct or indirect control
of the day-to-day operations of the Property (collectively, a “Prohibited Transfer”), other than pursuant to
Leases of space in the Improvements to Tenants in accordance with the provisions of Section 4.14.


 


(b)          A
Prohibited Transfer shall include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the
Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial
part of the Property for other than actual occupancy by a Tenant thereunder or a sale, assignment or other transfer of, or the
grant of a security interest in, Borrower’s right, title and interest in and to (A) any Leases or any Rents or (B) the Property
Documents; (iii) any action instituted by (or at the behest of) Borrower or its affiliates or consented to or acquiesced in by
Borrower or its affiliates which results in a Property Document Event; (iv) if a Restricted Party is a corporation, any merger,
consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock in one or a series
of transactions; (v) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or
the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general
or limited partner or any profits or proceeds relating to such partnership interests or the creation or issuance of new limited
partnership interests; (vi) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal,
resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge
of the membership interest of any member or any profits or proceeds relating to such membership interest; (vii) if a Restricted
Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted
Party or the creation or issuance of new legal or beneficial interests; or (viii) the removal or the resignation of Manager (including,
without limitation, an Affiliated Manager) other than in accordance with Section 4.15.


 



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Section 6.3.          Permitted
Equity Transfers.


 


(a)          Notwithstanding
the restrictions contained in this Article 6, the following equity transfers shall be permitted without Lender’s consent:
(i) a transfer (but not a pledge) by devise or descent or by operation of law upon the death of a Restricted Party or any member,
partner or shareholder of a Restricted Party, (ii) the transfer (but not the pledge), in one or a series of transactions, of the
stock, partnership interests or membership interests (as the case may be) in a Restricted Party, (iii) the sale, transfer or issuance
of shares of common stock in any Restricted Party that is or becomes a publicly traded entity, provided such shares of common
stock are listed on the New York Stock Exchange or another nationally recognized stock exchange (provided, that, the foregoing
provisions of this clause (iii) shall not be deemed to waive, qualify or otherwise limit Borrower’s obligation to comply
(or to cause the compliance with) the other covenants set forth herein and in the other Loan Documents (including, without limitation,
the covenants contained herein relating to ERISA matters)), or (iv) subject to Subsection (b) below, a transfer (but not the pledge)
of direct or indirect equity ownership interests in Sponsor (each, an “ARC III Transfer”); provided, further,
that, with respect to the transfers listed in clauses (i), (ii) and/or (iv) above, (A) Lender shall receive not less than thirty
(30) days prior written notice of such transfers, except in connection with any transfer of shares in the REIT (defined below)
in connection with the REIT’s redemption program for which reporting is completed as required pursuant to applicable securities
laws, (B) subject to Subsection (b) below, no such transfers shall result in a change in Control of Sponsor, Guarantor or Affiliated
Manager, (C) after giving effect to such transfers, Sponsor shall (I) own at least a 51% direct or indirect equity ownership interest
in each of Borrower and any SPE Component Entity; (II) directly or indirectly Control Borrower and any SPE Component Entity; and
(III) directly or indirectly control the day-to-day operation of the Property, (D) after giving effect to such transfers, the
Property shall continue to be managed by Affiliated Manager or a New Manager approved in accordance with the applicable terms
and conditions hereof, (E) in the case of the transfer of any direct equity ownership interests in Borrower or in any SPE Component
Entity, such transfers shall be conditioned upon continued compliance with the relevant provisions of Article 5 hereof, (F) in
the case of (1) the transfer of the management of the Property to a new Affiliated Manager in accordance with the applicable terms
and conditions hereof, or (2) the transfer of any direct or indirect equity ownership interests in any Restricted Party that results
in any Person and its Affiliates owning in excess of forty-nine percent (49%) of the direct or indirect equity ownership interests
in Borrower or in any SPE Component Entity, such transfers shall be conditioned upon delivery to Lender of a New Non-Consolidation
Opinion addressing such transfer, provided that the same was not previously delivered pursuant to Section 4.21 hereof, (G) such
transfers shall be conditioned upon Borrower’s ability to, after giving effect to the equity transfer in question (I) remake
the representations contained herein relating to ERISA, OFAC, and Patriot Act matters (and, upon Lender’s request, Borrower
shall deliver to Lender an Officer’s Certificate containing such updated representations effective as of the date of the
consummation of the applicable equity transfer) and (II) continue to comply with the covenants contained herein relating to ERISA
OFAC and Patriot Act matters, and (IT) such transfers shall not cause a Property Document Event. Upon request from Lender, Borrower
shall promptly provide Lender a revised version of the organizational chart delivered to Lender in connection with the Loan reflecting
any equity transfer consummated in accordance with this Section 6.3.


 



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(b)          Notwithstanding
the foregoing or anything contained herein to the contrary, an ARC III Transfer shall only be permitted (without Lender’s
consent and without payment of any fee), provided that the requirements set forth in Section 6.3(a) above are otherwise satisfied,
and provided, further, that the following conditions are met: (i) no Event of Default shall have occurred and be continuing, (ii)
after giving effect to such transfer, Sponsor shall be Controlled by one (1) or more Qualified Equityholders and (iii) Lender
shall receive copies of all instruments effectuating such transfer promptly after giving effect to such transfer.


 


(c)          Replacement
Guarantor. Upon the occurrence of an ARC III Transfer, Borrower (I) may elect
to replace Guarantor or (II) shall replace Guarantor if, as a result of such ARC III Transfer, Guarantor does not own any direct
or indirect equity interests in Borrower, pursuant to the terms hereof with any Person (“Replacement Guarantor”),
provided that Borrower shall only be permitted to replace such Guarantor if the following conditions are met: (i) such Replacement
Guarantor (A) shall have a net worth (as calculated in accordance with GAAP) in excess of $50,000,000, (B) shall have Liquidity
of no less than $4,000,000, and (C) shall (x) assume the obligations of Guarantor under the Guaranty and under the Environmental
Indemnity and, in connection therewith, shall execute, without any cost or expense to Lender, such documents and agreements as
Lender shall reasonably require to evidence and effectuate said assumption and (y) shall agree in such documents in the foregoing
clause (x) to maintain Liquidity in the minimum amount of $2,000,000 throughout the remainder of the term of the Loan; (ii) Lender
shall have received a due formation, authorization, execution and enforceability opinion in connection with such documents and
agreements executed by such Replacement Guarantor; and (iii) no Event of Default shall have occurred and be continuing. Notwithstanding
the foregoing, no Person shall be deemed to be an acceptable Replacement Guarantor if such Person (or any other Person owned or
Controlled by such Person or Affiliated with such Person) (1) has been, within the last ten (10) years, (y) subject to any material,
uncured event of default in connection with a loan financing which resulted in litigation or an acceleration of an indebtedness
held by Lender or any other secondary market or institutional lender of similar size and with similar operations as Lender or
(z) the subject of any action or proceeding under applicable Creditors Rights Laws or (2) any of the principals or entities which
Control such Person or own a material direct or indirect equity interest in such Person have ever been convicted of a felony.


 


(d)          Permitted
REIT Pledge. Notwithstanding the foregoing or anything contained herein to
the contrary, American Realty Capital Trust III, Inc. shall be permitted to pledge its indirect equity interest in Borrower, as
collateral for unsecured corporate-level lines of credit or other company financing, provided, that (i) the holder of such debt,
and any interest therein, shall be a Person that is a Qualified Equity Holder, (ii) the debt facility for such pledge is secured
by a pledge of interests in entities having an interest in substantially all of the properties directly or indirectly owned by
American Realty Capital Trust III, Inc., and (iii) the repayment of the debt facility is not specifically tied to the cash flow
of any Individual Property.


 


(e)          Permitted
Conversion to Delaware Statutory Trust. Notwithstanding the foregoing or anything
herein to the contrary, and provided that no Event of Default has occurred and is continuing, upon thirty (30) days’ written
notice to Lender, each Borrower shall be permitted to convert from a Delaware single member limited liability company to a Delaware
Statutory Trust (a “Conversion”), at Borrower’s sole cost and expense, provided that the following conditions
are met: 


 






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(i)          Lender
shall have consented to such Conversion (which consent shall not be unreasonably withheld, conditioned or delayed);


 


(ii)         the
new Borrower (the “New Borrower”) shall be a single purpose bankruptcy remote entity;


 


(iii)        the
organizational documents of the New Borrower shall contain single purpose entity and bankruptcy remote provisions substantially
similar to those set forth in Article 5 hereof and organizational documents shall otherwise be acceptable to Lender;


 


(iv)        The
Loan Documents shall be amended as required by Lender, including, but not limited to, an amendment to Article 5 hereof;


 


(v)         the
New Borrower shall affirm and ratify the Loan Documents as valid and binding, including, but not limited to, all representations,
warranties and covenants therein;


 


(vi)        Borrower
shall have delivered to Lender, without any cost or expense to Lender, either (A) such endorsements to the Title Insurance Policy
or (B) a no impact letter from the title company, insuring that fee simple title to the Property is vested in the New Borrower
(subject to Permitted Encumbrances), hazard insurance endorsements or certificates and other similar materials as Lender may deem
necessary at the time of the Conversion, all in form and substance satisfactory to Lender;


 


(vii)       if
a Management Agreement is in place at the time of such Conversion, the New Borrower shall assume the obligations of Borrower under
any Management Agreement or provide a new management agreement with a new manager which meets with the requirements of the terms
hereof and assign to Lender as additional security for the Loan such new management agreement pursuant to an Assignment of Management
Agreement and otherwise reasonably acceptable to Lender;


 


(viii)      New
Borrower shall furnish an opinion of counsel satisfactory to Lender (A) that New Borrower’s formation documents provide
for the matters described in subparagraphs (i) and (ii) above, (B) that the documents delivered in connection with the Conversion
have been duly authorized, executed and delivered, and that the Note, the Security Instrument, this Agreement, any modification
agreements and the other Loan Documents are valid, binding and enforceable against the New Borrower in accordance with their terms,
(C) that the New Borrower has been duly organized, and is validly existing and in good standing, and (D) with respect to such
other matters as Lender may reasonably request;


 


(ix)         New
Borrower shall deliver a New Non-Consolidation Opinion in form, scope and substance acceptable in all respects to Lender;


 



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(x)          New
Borrowers shall provide such other documents as Lender may reasonably require; and


 


(xi)         New
Borrowers shall have paid to Lender, concurrently with the closing of such Conversion all reasonable out-of-pocket costs and expenses,
including reasonable attorneys’ fees and any Rating Agency fees, incurred by Lender in connection with the Conversion.


 


  Section 6.4.          [Intentionally
Omitted.].


 


Section
6.5.          Lender’s Rights. Lender reserves the right to
condition the consent to a Prohibited Transfer requested hereunder upon (a) a modification of the terms hereof and on
assumption of this Agreement and the other Loan Documents as so modified by the proposed Prohibited Transfer, (b) payment of
a transfer fee of 1% of outstanding principal balance of the Loan and all of Lender’s expenses incurred in connection
with such Prohibited Transfer, (c) [intentionally omitted], (d) the proposed transferee’s continued compliance with the
covenants set forth in this Agreement, including, without limitation, the covenants in Article 5, (e) receipt of a New
Non-Consolidation Opinion with respect to the Prohibited Transfer, and/or (f) such other conditions and/or legal 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 the Prohibited Transfer. Lender shall not be required to demonstrate
any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due
and payable upon a Prohibited Transfer without Lender’s consent. This provision shall apply to every Prohibited
Transfer, whether or not Lender has consented to any previous Prohibited Transfer.


 


ARTICLE 7


 


INSURANCE; CASUALTY; CONDEMNATION;
RESTORATION


 


Section 7.1.          Insurance.


 


(a)          Each
Borrower shall obtain and maintain, or cause to be obtained and maintained, insurance for each Borrower and each Individual Property
providing at least the following coverages:


 






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(i)          insurance
with respect to the Improvements and, if applicable, the Personal Property insuring against any peril now or hereafter included
within the “Special” or “All Risks” Causes of Loss form (which shall not exclude fire, lightning, windstorm
(including named storms), hail, explosion, riot, civil commotion, aircraft, vehicles and smoke), in each case (A) in an amount
equal to 100% of the “Full Replacement Cost,” which for purposes of this Agreement shall mean actual replacement value
exclusive of costs of excavations, foundations, underground utilities and footings waiving of depreciation; (B) to be written
on a no coinsurance form or containing an agreed amount endorsement with respect to the Improvements and, if applicable, Personal
Property waiving all co-insurance provisions; (C) providing for no deductible in excess of $25,000, excluding windstorm and earthquake
insurance which may have a deductible of 5% of the total insurable value; (D) at all times insuring against at least those hazards
that are commonly insured against under a “Special” or “All Risks” Causes of Loss form of policy, as the
same shall exist on the date hereof, and together with any increase in the scope of coverage provided under such form after the
date hereof; and (E) providing Law & Ordinance coverage, including Coverage for Loss to the Undamaged Portion of the Building,
Demolition Costs and Increased Cost of Construction in amounts acceptable to Lender. The Full Replacement Cost shall be re-determined
from time to time (but not more frequently than once in any twelve (12) calendar months) at the request of Lender by an appraiser
or contractor designated and paid by Borrower and approved by Lender, or by an engineer or appraiser in the regular employ of
the insurer. After the first appraisal, additional appraisals may be based on construction cost indices customarily employed in
the trade. No omission on the part of Lender to request any such ascertainment shall relieve Borrower of any of its obligations
under this Subsection;


 


(ii)         commercial
general liability insurance against all claims for personal injury, bodily injury, death or property damage occurring upon, in
or about the applicable Individual Property, including “Dram Shop” or other liquor liability coverage if the Borrower
sells or distributes alcoholic beverages from the Property, such insurance (A) to be on the so-called “occurrence”
form with a general aggregate limit of not less than $2,000,000 and a per occurrence limit of not less than $1,000,000; (B) to
continue at not less than the aforesaid limit until required to be changed by Lender in writing by reason of changed economic
conditions making such protection inadequate; and (C) to cover at least the following hazards: (1) premises and operations; (2)
products and completed operations on an “if any” basis; (3) independent contractors; (4) contractual liability for
all insured contracts; and (5) contractual liability covering the indemnities contained in Articles 12 and 13 hereof to the extent
the same is available;


 



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(iii)        loss
of rents and/or business interruption insurance (A) with loss payable to Lender; (B) covering all risks required to be covered
by the insurance provided for in Subsections 7.1(a)(i), (iv) and (vi) through (viii); (C) in an amount equal to 100% of the projected
gross income from the applicable Individual Property on an actual loss sustained basis for a period beginning on the date of Casualty
and continuing until the Restoration of the applicable Individual Property is completed, or the expiration of eighteen (18) months,
whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period; the amount of such business
interruption/loss of rents insurance shall be determined prior to the Closing Date and at least once each year thereafter based
on the greatest of: (x) Borrower’s reasonable estimate of the gross income from the applicable Individual Property and (y)
the highest gross income received with respect to such Individual Property during the term of the Loan for any full calendar year
prior to the date the amount of such insurance is being determined, in each case for the succeeding eighteen (18) month period
and (D) containing an extended period of indemnity endorsement which provides that after the physical loss to the Improvements
has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior
to the loss, or the expiration of twelve (12) from the date that the Property is repaired or replaced and operations are resumed,
whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period. All Net Proceeds payable
to Lender pursuant to this Subsection (the “Rent Loss Proceeds”) shall be held by Lender in accordance with
the terms of the Cash Management Agreement and shall be applied to the obligations secured hereunder from time to time due and
payable hereunder and under the Note; provided, however, that (I) nothing herein contained shall be deemed to relieve Borrower
of its obligations to pay the obligations secured hereunder on the respective dates of payment provided for in the Note except
to the extent such amounts are actually paid out of the Rent Loss Proceeds and (II) in the event the Rent Loss Proceeds are paid
in a lump sum in advance and Borrower is entitled to disbursement of such Rent Loss Proceeds in accordance with the terms hereof,
Lender or Servicer shall hold such Rent Loss Proceeds in a segregated interest-bearing Eligible Account and Lender or Servicer
shall estimate the number of months required for Borrower to restore the damage caused by the applicable Casualty, shall divide
the applicable aggregate Rent Loss Proceeds by such number of months and shall disburse such monthly installment of Rent Loss
Proceeds from such Eligible Account into the Restricted Account each month during the performance of such Restoration;


 


(iv)        at
all times during which structural construction, repairs or alterations are being made with respect to the Improvements and only
if the current property and liability coverage forms do not otherwise apply (A) commercial general liability and umbrella liability
insurance covering claims related to the construction, repairs or alterations being made at the Property which are not covered
by or under the terms or provisions of the commercial general liability and umbrella liability insurance policies required herein;
and (B) the insurance provided for in Subsection 7.1(a)(i) written in a so-called builder’s risk completed value form (1)
on a non-reporting basis, (2) against all risks insured against pursuant to Subsections 7.1(a)(i), (iv) and (vi) through (viii),
as applicable, (3) including permission to occupy the Property, and (4) written on a no coinsurance form or containing an agreed
amount endorsement waiving coinsurance provisions;


 


(v)         workers’
compensation, subject to the statutory limits of the state in which the applicable Individual Property is located, and employer’s
liability insurance with a limit of at least $1,000,000 per accident and per disease per employee, and $1,000,000 for disease
aggregate in respect of any work or operations on or about the applicable Individual Property, or in connection with the applicable
Individual Property or its operation (if applicable);


 



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(vi)        equipment
breakdown/boiler and machinery insurance covering all mechanical and electrical equipment in such amounts as shall be reasonably
be required by Lender, on terms and in amounts consistent with the commercial property insurance policy required under Subsection
7.1(a)(i) above or in such other amount as shall be reasonably required by Lender (if applicable to the Property);


 


(vii)       if
any portion of the Improvements is at any time located in an area identified by the Secretary of Housing and Urban Development
or any successor thereto as an area having special flood hazards pursuant to the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended, or any successor law
(the “Flood Insurance Acts”), flood hazard insurance in an amount equal to “Full Replacement Cost”,
which shall include, without limitation, the maximum limit of coverage available for the applicable Individual Property under
the Flood Insurance Acts; provided, that, the insurance provided pursuant to this clause (vii) shall be on terms consistent with
the “All Risk” insurance policy required in Section 7.1(a)(i) above


 


(viii)      earthquake
insurance, if required, in amounts equal to one and one- half times (1.5x) the probable maximum loss or scenario expected loss
of the Property plus loss of rents and/or business interruption as determined by Lender in its sole discretion and in form and
substance satisfactory to Lender, provided that the insurance pursuant to this Subsection (viii) shall be on terms consistent
with the all risk insurance policy required under Section 7.1(a)(i);


 


(ix)         umbrella
liability insurance in an amount not less than $25,000,000 per occurrence on terms consistent with the commercial general liability
insurance policy required under subsection (ii) above;


 


(x)          insurance
against employee dishonesty in amounts acceptable to Lender (if applicable to the Property and Borrower);


 


(xi)         auto
liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits per occurrence
of One Million and No/100 Dollars ($1,000,000) (if applicable);


 


(xii)        such
insurance as may be required pursuant to the terms of the Property Documents, if any; and


 


(xiii)       such
other insurance and in such amounts as Lender from time to time may reasonably request against such other insurable hazards which
at the time are commonly insured against for property similar to the applicable Individual Property located in or around the region
in which the applicable Individual Property is located.


 



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(b)          All
insurance provided for in Subsection 7.1(a) hereof shall be obtained under valid and enforceable policies (the “Policies”
or in the singular, the “Policy”), in such forms and, from time to time after the date hereof, in such
amounts as may be satisfactory to Lender, issued by financially sound and responsible insurance companies authorized to do business
in the state in which the applicable Individual Property is located and approved by Lender. The insurance companies must have
a financial strength rating of “A” or better and a financial size category of “VIII” or better by A.M.
Best Company, Inc., or a rating of “A-” (or its equivalent) or better by two (2) of the Rating Agencies (one of which
must be S&P) (each such insurer shall be referred to below as a “Qualified Insurer”). Not less than fifteen
(15) days prior to the expiration dates of the Policies theretofore furnished to Lender pursuant to Subsection 7.1(a), Borrower
shall deliver carrier-issued binders and certificates of the renewal Policies, and thereafter, complete copies of the Policies
when issued. Upon renewal of the Policies, Borrower shall deliver evidence satisfactory to Lender of payment of the premiums due
thereunder (the “Insurance Premiums”).


 


(c)          Except
to the extent required pursuant to Section 7.1(a) hereof, Borrower shall not obtain (or permit to be obtained) (i) any umbrella
or blanket liability or casualty Policy unless, in each case, such Policy is approved in advance in writing by Lender and Lender’s
interest is included therein as provided in this Agreement and such Policy is issued by a Qualified Insurer, or (ii) separate
insurance concurrent in form or contributing in the event of loss with that required in Subsection 7.1(a) to be furnished by,
or which may be reasonably required to be furnished by, Borrower. In the event Borrower obtains (or causes to be obtained) separate
insurance or an umbrella or a blanket Policy, Borrower shall notify Lender of the same and shall cause complete copies of each
Policy to be delivered as required in Subsection 7.1(a). Any umbrella or blanket Policy remains subject to review and approval
by Lender based on the schedule of locations and values. Notwithstanding Lender’s approval of any umbrella or blanket liability
or casualty Policy hereunder, Lender reserves the right, in its sole discretion, to require Borrower to obtain a separate Policy
in compliance with this Section 7.1.


 


(d)          All
Policies of insurance provided for or contemplated by Subsection 7.1(a) shall name Borrower as the named insured and, in the case
of liability policies, except for the Policies referenced in Subsection 7.1(a)(v) and (xi), shall name Lender as additional insured,
as their respective interests may appear, and in the case of property coverages, including but not limited to the all-risk/special
form coverage, rent loss, business interruption, terrorism, boiler and machinery, earthquake and flood insurance, shall name Lender
as mortgagee/lender’s loss payable by a standard noncontributing mortgagee clause in favor of Lender providing that the
loss thereunder shall be payable to Lender.


 


(e)          All
property Policies of insurance provided for in Subsection 7.1(a) shall provide that:


 


(i)          no
(A) act, failure to act, violation of warranties, declarations or conditions, or negligence by Borrower, or anyone acting for
Borrower, or by any Tenant under any Lease or other occupant, (B) occupancy or use of the applicable Individual Property for purposes
more hazardous than those permitted, (C) foreclosure or similar action by Lender, or (D) failure to comply with the provisions
of any Policy which might otherwise result in a forfeiture of the insurance or any part thereof, shall in any way affect the validity
or enforceability of the insurance insofar as Lender is concerned;


 






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(ii)         the
Policy shall not be cancelled without at least 30 days’ written notice to Lender;


 


(iii)        each
Policy shall provide that (A) the issuers thereof shall give written notice to Lender if the Policy has not been renewed ten (10)
days prior to its expiration and (B) Lender is permitted to make payments to effect the continuation of such Policy upon notice
of cancellation due to non-payment of Insurance Premiums; and


 


(iv)        Lender
shall not be liable for any Insurance Premiums thereon or subject to any assessments thereunder.


 


Additionally, Borrower further covenants and
agrees to promptly send to Lender any notices of non-renewal or cancellation it receives from the insurer with respect to the
Policies required pursuant to this Section 7.1.


 


(f)          Borrower
shall furnish to Lender, on or before thirty (30) days after the close of each of Borrower’s fiscal years, a statement certified
by Borrower or a Responsible Officer of Borrower of the amounts of insurance maintained in compliance herewith, of the risks covered
by such insurance and of the insurance company or companies which carry such insurance and, if requested by Lender, verification
of the adequacy of such insurance by an independent insurance broker or appraiser acceptable to Lender.


 


(g)          If
at any time Lender is not in receipt of written evidence that all insurance required hereunder is in full force and effect, Lender
shall have the right, without notice to Borrower to take 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 deems appropriate,
and all expenses incurred by Lender in connection with such action or in obtaining such insurance and keeping it in effect shall
be paid by Borrower to Lender upon demand and until paid shall be secured by the Security Instrument and shall bear interest at
the Default Rate.


 


(h)          In
the event of a foreclosure of the Security Instrument or other transfer of title to the Property in extinguishment in whole or
in part of the Debt, all right, title and interest of Borrower in and to the Policies then in force concerning the Property and
all proceeds payable thereunder shall thereupon vest exclusively in Lender or the purchaser at such foreclosure or other transferee
in the event of such other transfer of title.


 


(i)          As
an alternative to the Policies required to be maintained pursuant to the preceding provisions of this Section 7.1, Borrower will
not be in default under this Section 7.1 if Borrower maintains (or causes to be maintained) Policies which (i) have coverages,
deductibles and/or other related provisions other than those specified above and/or (ii) are provided by insurance companies not
meeting the credit ratings requirements set forth above (any such Policy, a “Non-Conforming Policy”), provided,
that, prior to obtaining such Non-Conforming Policies (or permitting such Non-Conforming Policies to be obtained), Borrower shall
have received Lender’s prior written consent thereto.


 



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(j)          The
property, loss of rents/business interruption, general liability and umbrella liability insurance policies required in this Section
7.1 shall not exclude Terrorism Coverage (defined below) (such insurance policies, the “Applicable Policies”).
Such Terrorism Coverage shall comply with each of the applicable requirements for Policies set forth above (including, without
limitation, those relating to deductibles); provided that, Lender, at Lender’s option, may reasonably require Borrower to
obtain or cause to be obtained the Terrorism Coverage with higher deductibles than set forth above. As used above, “Terrorism
Coverage” shall mean insurance for acts of terror or similar acts of sabotage; provided, that, for so long as the Terrorism
Risk Insurance Act of 2002, as extended and modified by the Terrorism Risk Insurance Program Authorization Act of 2007 (as the
same may be further modified, amended, or extended, “TRIPRA”) (i) remains in full force and effect and (ii)
continues to cover both foreign and domestic acts of terror, the provisions of TRIPRA shall determine what is deemed to be included
within this definition of “Terrorism Coverage.” Notwithstanding the foregoing, whether or not TRIPRA or subsequent
statute, extension, or reauthorization is in effect, Borrower shall be required to carry terrorism insurance throughout the term
of the Loan as required by the preceding sentence; provided, however, if TRIPRA (or such subsequent statute, extension or reauthorization)
is not in effect Borrower shall not be required to pay annual premiums in excess of the TC Cap (defined below) in order to obtain
the Terrorism Coverage (but Borrower shall be obligated to purchase the maximum amount of Terrorism Coverage available with funds
equal to the TC Cap). As used above, “TC Cap” shall mean an amount equal to two (2) times the premium for a
separate “Special Form” or “All Risks” policy or equivalent policy insuring only the Property on a stand-alone
basis (including, without limitation, the insurance required pursuant to Sections 7.1(a)(i) and (iii) hereof) at the time that
any Terrorism Coverage is excluded from any Applicable Policy.


 


(k)          To
the extent the insurance maintained by the applicable Tenant at the Missouri Property or the New Hampshire Property complies with
all of the requirements set forth in this Section 7.1 or, if not in compliance with this Section 7.1, is otherwise acceptable
to Lender in Lender’s sole discretion, Borrower shall be deemed to be in compliance with this Section 7.1, so long as (i)
the applicable Tenant maintains the Policies required pursuant to this Section 7.1 or as approved by Lender in its sole discretion;
and (ii) Lender is named as a loss payee, mortgagee and additional insured, as applicable, on each of the Policies maintained
by the applicable Tenant.


 


Section
7.2.          Casualty. If any Individual Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall give prompt notice
of such damage to Lender and shall promptly commence and diligently prosecute the completion of the repair and restoration of
the applicable Individual Property as nearly as possible to the condition the applicable Individual Property was in immediately
prior to such Casualty, with such alterations as may be reasonably approved by Lender (a “Restoration”) and
otherwise in accordance with Section 7.4. Borrower shall pay all costs of such Restoration whether or not such costs are covered
by insurance. Lender may, but shall not be obligated to make proof of loss if not made promptly by Borrower.


 



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Section 7.3.          Condemnation.
Borrower shall promptly give Lender notice of the actual or threatened commencement of any proceeding for the Condemnation of
the Property of which Borrower has knowledge and shall deliver to Lender copies of any and all papers served in connection with
such proceedings. Lender may participate in any such proceedings, and Borrower shall from time to time deliver to Lender all instruments
requested by it to permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, and shall
consult with Lender, its attorneys and experts, and cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any taking by any public or quasi-public authority through Condemnation or otherwise (including but not limited
to any transfer made in lieu of or in anticipation of the exercise of such taking), Borrower shall continue to pay the Debt at
the time and in the manner provided for its payment in the Note and in this Agreement and the Debt shall not be reduced until
any Award shall have been actually received and applied by Lender, after the deduction of expenses of collection, to the reduction
or discharge of the Debt. Lender shall not be limited to the interest paid on the Award by the condemning authority but shall
be entitled to receive out of the Award interest at the rate or rates provided herein or in the Note. If the Property or any portion
thereof is taken by a condemning authority, Borrower shall promptly commence and diligently prosecute the Restoration of the Property
and otherwise comply with the provisions of Section 7.4. If the Property is sold, through foreclosure or otherwise, prior to the
receipt by Lender of the Award, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been
sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Debt.


 


Section 7.4.          Restoration.
The following provisions shall apply in connection with the Restoration of any Individual Property:


 


(a)          If
the Net Proceeds shall be less than the Restoration Threshold and the costs of completing the Restoration shall be less than the
Restoration Threshold, the Net Proceeds will be disbursed by Lender to Borrower upon receipt, provided that all of the conditions
set forth in Section 7.4(b)(i) are met and Borrower delivers to Lender a written undertaking to expeditiously commence and to
satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement.


 


(b)          If
the Net Proceeds are equal to or greater than the Restoration Threshold or the costs of completing the Restoration are equal to
or greater than the Restoration Threshold, Lender shall make the Net Proceeds available for the Restoration in accordance with
the provisions of this Section 7.4.


 


(i)          The
Net Proceeds shall be made available for Restoration provided that each of the following conditions are met:


 



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		(A)	no Event of Default shall have occurred and be continuing;



 


		(B)	(1) in the event the Net Proceeds are insurance proceeds,
less than thirty percent (30%) of each of (i) the fair market value of the applicable
Individual Property as reasonably determined by Lender, and (ii) the rentable area of the applicable Individual Property
has been damaged, destroyed or rendered unusable as a result of a Casualty or (2) in
the event the Net Proceeds are condemnation proceeds, less than ten percent (10%) of each of (i)
the fair market value of the applicable Individual Property as reasonably determined
by Lender and (ii) the rentable area of the applicable Individual Property is taken,
such land is located along the perimeter or periphery of the applicable Individual
Property, no portion of the Improvements is located on such land and such taking does
not materially impair the existing access to the applicable Individual Property;



 


		(C)	Leases demising in the aggregate a percentage amount equal
to or greater than 75% of the total rentable space in the applicable Individual
Property which has been demised under executed and delivered Leases in effect as of
the date of the occurrence of such fire or other casualty or taking, whichever the
case may be, shall remain in full force and effect during and after the completion
of the Restoration, notwithstanding the occurrence of any such Casualty or Condemnation,
whichever the case may be, and Borrower furnishes to Lender evidence satisfactory to
Lender that all Tenants under Major Leases shall continue to operate their respective
space at the applicable Individual Property after the completion of the Restoration;



 


		(D)	Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than thirty (30) days after the issuance
of a building permit with respect thereto) and shall diligently pursue the same to satisfactory
completion in compliance with all Applicable Laws, in all material respects, including,
without limitation, all applicable Environmental Laws;



 


		(E)	Lender shall be satisfied that any operating deficits which
will be incurred with respect to the applicable Individual Property as a result
of the occurrence of any such fire or other casualty or taking will be covered out of (1) the Net Proceeds, (2) the insurance
coverage referred to in Section 7.1(a)(iii) above, or (3) by other funds
of Borrower;



 


		(F)	Lender shall be satisfied that, upon the completion of the
Restoration, the fair market value and cash flow of the applicable Individual
Property will not be less than the fair market value and cash flow of the applicable
Individual Property as the same existed immediately prior to the applicable Casualty
or Condemnation;



 



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		(G)	Lender shall be satisfied that the Restoration will be completed
on or before the earliest to occur of (1) six (6) months prior to the Maturity
Date, (2) the expiration of the insurance coverage referred to in Section 7.1(a)(iii)
above, or (3) such time as may be required under applicable zoning law, ordinance,
rule or regulation in order to repair and restore the applicable Individual Property to the condition
it was in immediately prior to such fire or other casualty or taking;



 


		(H)	Borrower and Guarantor shall execute and deliver to Lender
a completion guaranty in form and substance satisfactory to Lender and
its counsel pursuant to the provisions of which Borrower and Guarantor shall, jointly
and severally, guaranty to Lender the lien-free completion by Borrower of the Restoration
in accordance with the provisions of this Subsection 7.4(b);



 


		(I)	the applicable Individual Property and the use thereof after
the Restoration will be in compliance with and permitted under the Property
Documents and all Applicable Law;



 


		(J)	the Property Documents will remain in full force and effect
during and after the Restoration and a Property Document Event shall not occur as
a result of the applicable Casualty, Condemnation and/or Restoration; and



 


		(K)	the Restoration shall be done and completed in an expeditious and diligent
fashion and in compliance with the Property Documents and all Applicable Law.



  


(ii)          The
Net Proceeds shall be held by Lender and, until disbursed in accordance with the provisions
of this Section 7.4(b), shall constitute additional security for the Debt and other
obligations under this Agreement, the Security Instrument, the Note and the other Loan Documents. The Net Proceeds (other
than the Rent Loss Proceeds) shall be disbursed by Lender to, or as directed by, Borrower
from time to time during the course of the Restoration, upon receipt of evidence
satisfactory to Lender that (A) 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 connection with the related Restoration item have been paid for in full, and (B)
there exist no notices of pendency, stop orders, mechanic’s or materialman’s
liens or notices of intention to file same, or any other liens or encumbrances of
any nature whatsoever on the applicable Individual Property which have not either
been fully bonded to the satisfaction of Lender and discharged of record or in the
alternative fully insured to the satisfaction of Lender by the title company issuing
the Title Insurance Policy.


 


 



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(iii)          All
plans and specifications required in connection with the Restoration shall be subject
to prior review and acceptance in all respects by Lender and by an independent consulting
engineer selected by Lender (the “Casualty Consultant”). Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in connection
with the Restoration. The identity of the contractors, subcontractors and materialmen
engaged in the Restoration shall be subject to prior review and acceptance by Lender
and the Casualty Consultant. All costs and expenses incurred by Lender in connection
with making the Net Proceeds available for the Restoration including, without limitation, reasonable counsel fees and disbursements
and the Casualty Consultant’s fees, shall be paid by Borrower. Borrower shall
have the right to settle all claims under the Policies jointly with Lender, provided
that (a) no Event of Default exists, (b) Borrower promptly and with commercially reasonable
diligence negotiates a settlement of any such claims and (c) the insurer with respect
to the Policy under which such claim is brought has not raised any act of the insured
as a defense to the payment of such claim. If an Event of Default exists, Lender shall,
at its election, have the exclusive right to settle or adjust any claims made under
the Policies in the event of a Casualty.


 


(iv)          In
no event shall Lender be obligated to make disbursements of the Net Proceeds in excess
of an amount equal to the costs actually incurred from time to time for work in place as part of the Restoration, as certified
by the Casualty Consultant, minus the Restoration Retainage. The term “Restoration
Retainage” as used in this Subsection 7.4(b) shall mean an
amount equal to 10% of the costs actually incurred for work in place as part of the Restoration,
as certified by the Casualty Consultant, until such time as the Casualty Consultant
certifies to Lender that Net Proceeds representing 50% of the required Restoration
have been disbursed. There shall be no Restoration Retainage with respect to costs
actually incurred by Borrower for work in place in completing the last 50% of the
required Restoration. The Restoration Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Subsection 7.4(b), be less than the
amount actually held back by Borrower from contractors, subcontractors and materialmen
engaged in the Restoration. The Restoration Retainage shall not be released until the Casualty Consultant certifies to Lender
that the Restoration has been completed in accordance with the provisions of this
Subsection 7.4(b) and that all approvals necessary for the re-occupancy and use of
the Property have been obtained from all appropriate governmental and quasi-governmental
authorities, and Lender receives evidence satisfactory to Lender that the costs of
the Restoration have been paid in full or will be paid in full out of the Restoration
Retainage, provided, however, that Lender will release the portion of the Restoration
Retainage being held with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the
date upon which the Casualty Consultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s
or materialman’s contract, and the contractor, subcontractor or materialman
delivers the lien waivers and evidence of payment in full of all sums due to the contractor,
subcontractor or materialman as may be reasonably requested by Lender or by the title
company insuring the lien of the Security Instrument. If required by Lender, the release of any such portion of the Restoration
Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect
to the contractor, subcontractor or materialman.


 



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(v)          Lender
shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.


 


(vi)          If
at any time the Net Proceeds or the undisbursed balance thereof shall not, in the
reasonable opinion of Lender in consultation with the Casualty Consultant, be sufficient
to pay in full the balance of the costs which are estimated by the Casualty Consultant
to be incurred in connection with the completion of the Restoration, Borrower shall
deposit the deficiency (the “Net Proceeds Deficiency”) with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall be
held by Lender and shall be disbursed for costs actually incurred in connection with
the Restoration on the same conditions applicable to the disbursement of the Net Proceeds,
and until so disbursed pursuant to this Section 7.4(b) shall constitute additional security for the Debt and other obligations
under this Agreement, the Security Instrument, the Note and the other Loan Documents.


 


(vii)          The
excess, if any, of the Net Proceeds and the remaining balance, if any, of the Net
Proceeds Deficiency deposited with Lender after the Casualty Consultant certifies to
Lender that the Restoration has been completed in accordance with the provisions of this Section 7.4(b), and the receipt
by Lender of evidence satisfactory to Lender that all costs incurred in connection with 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 this Agreement,
the Security Instrument, the Note or any of the other Loan Documents.


 


(c)          All
Net Proceeds not required (i) to be made available for the Restoration or (ii) to be
returned to Borrower as excess Net Proceeds pursuant to Subsection 7.4(b)(vii) shall be retained and applied by Lender toward
the payment of the Debt whether or not then due and payable in such order, priority and proportions
as Lender in its discretion shall deem proper. If Lender shall receive and retain Net Proceeds, the lien of
the Security Instrument shall be reduced only by the amount thereof received and retained
by Lender and actually applied by Lender in reduction of the Debt.


 


ARTICLE 8


 


RESERVE FUNDS


 


Section
8.1.          [Intentionally Omitted.]


 



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Section 8.2.          Replacement
Reserve Funds. Upon the occurrence and during the continuance of an Event of Default,
Borrower shall deposit with Lender on the next Monthly Payment Date and on each Monthly
Payment Date thereafter an amount equal to $3,791.12 for the Missouri Property and $138.89 for the New Hampshire Property
(collectively, the “Replacement Reserve Monthly Deposit”) for the Replacements.
Amounts deposited pursuant to this Section 8.2 are referred to herein as the “Replacement
Reserve Funds”. Lender may reassess its estimate of the amount necessary
for Replacements from time to time and, and may require Borrower to increase the monthly
deposits required pursuant to this Section 8.2 upon thirty (30) days notice to Borrower if Lender determines in its reasonable
discretion that an increase is necessary to maintain proper operation of the Property. Lender
shall disburse Replacement Reserve Funds only for Replacements. Lender shall disburse to Borrower the Replacement Reserve
Funds upon satisfaction by Borrower of each of the following conditions: (i) Borrower
shall submit a request for payment to Lender at least ten (10) days prior to the date on which Borrower requests such payment be
made and specifies the Replacements to be paid; (ii) on the date such request is received by Lender and on the date such
payment is to be made, no Event of Default shall exist and remain uncured, (iii) Lender shall
have received a certificate from Borrower (A) stating that the items to be funded by the
requested disbursement are Replacements, (B) stating that all Replacements at the applicable
Individual Property to be funded by the requested disbursement have been completed
in a good and workmanlike manner and in accordance with all Applicable Law, such certificate
to be accompanied by a copy of any license, permit or other approval required by any
Governmental Authority in connection with the Replacements, (C) identifying each Person
that supplied materials or labor in connection with the Replacements 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 such disbursement, such certificate to be accompanied
by lien waivers or other evidence of payment satisfactory to Lender; (iv) at Lender’s
option, a title search for the applicable Individual Property indicating that the applicable
Individual Property is free from all liens, claims and other encumbrances other than
Permitted Encumbrances; (v) at Lender’s option, if the cost of any individual Replacement exceeds $75,000, Lender
shall have received a report satisfactory to Lender in its reasonable discretion from an
architect or engineer approved by Lender in respect of such architect or engineer’s
inspection of the applicable Replacement; and (vi) Lender shall have received such
other evidence as Lender shall reasonably request that the Replacements at the applicable
Individual Property to be funded by the requested disbursement have been completed
and are paid for or will be paid upon such disbursement to Borrower. Lender shall
not be required to disburse Replacement Reserve Funds more frequently than once each
calendar month nor in an amount less than the Minimum Disbursement Amount (or a lesser
amount if the total amount of Replacement Reserve Funds is less than the Minimum Disbursement
Amount, in which case only one disbursement of the amount remaining in the account
shall be made).


 


(c)          Nothing
in this Section 8.2 shall (i) make Lender responsible for making or completing the Replacements; (ii) require Lender to expend
funds in addition to the Replacement Reserve Funds to complete any Replacements; (iii)
obligate Lender to proceed with the Replacements; or (iv) obligate Lender to demand from Borrower additional
sums to complete any Replacements.


 



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(d)          Borrower
shall permit Lender and Lender’s agents and representatives (including, without
limitation, Lender’s engineer, architect, or inspector) or third parties to
enter onto the Property during normal business hours (subject to the rights of Tenants under
their Leases) to inspect the progress of any Replacements and all materials being used in connection therewith and to examine
all plans and shop drawings relating to such Replacements. Borrower shall cause all contractors
and subcontractors to cooperate with Lender or Lender’s representatives or such
other Persons described above in connection with inspections described in this Section.


 


(e)          In
addition to any insurance required under the Loan Documents, Borrower shall provide
or cause to be provided workmen’s compensation insurance, builder’s risk,
and public liability insurance and other insurance to the extent required under Applicable
Law in connection with the Replacements. All such policies shall be in form and amount reasonably satisfactory to Lender.


 


Section 8.3.          Punch
List Work Reserve Funds


 


(a)          On
the date hereof, Borrower shall deposit an amount equal to $25,000 with Lender for the completion of the outstanding “punch
list” construction items at the New Hampshire Property set forth on Exhibit B attached hereto (such items referred
to herein as the “Punch List Items”). Amounts deposited pursuant
to this Section 8.3 are referred to herein as the “Punch List Work Reserve Funds”.


 


(b)          Lender
shall disburse to Borrower the Punch List Work Reserve Funds upon satisfaction of the following conditions: (i) in the event
that Lender receives evidence reasonably acceptable to Lender (including, without limitation,
an engineering report) that the estimated cost to complete the outstanding Punch List
Items (the “Estimated Cost”) is less than the amounts then on reserve
in the Punch List Work Reserve Funds, Lender shall disburse to Borrower the difference between the amount then on reserve
in the Punch List Work Reserve Funds and the Estimated Cost; provided, however, that if the
Estimated Cost is less than $10,000, Lender shall only disburse the positive difference,
if any, between the amount then on reserve in the Punch List Work Reserve Funds
and $10,000; and (ii) in the event that Lender receives evidence reasonably acceptable to Lender from the Tenant at the
New Hampshire Property, including, without limitation, a Tenant estoppel certificate, acknowledging
that the Punch List Items have been completed to Tenant’s satisfaction in full,
Lender shall disburse to Borrower the amount then remaining in the Punch List Work
Reserve Funds.


 


Section 8.4.          [Intentionally
Omitted]


 


Section 8.5.          [Intentionally
Omitted]


 


Section 8.6.          Tax
and Insurance Funds


 


 



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(a)          Upon
the occurrence and during the continuance of an Event of Default, Borrower shall pay
(or cause to be paid) to Lender on each Monthly Payment Date (a) one-twelfth of an
amount which would be sufficient to pay the Taxes payable, or reasonably estimated by Lender to be payable, during the next
ensuing twelve (12) months (the “Monthly Tax Deposit”), and (b) at the
option of Lender, if the liability or casualty Policy maintained by Borrower covering
the Property shall not constitute an approved blanket or umbrella Policy pursuant
to Subsection 7.1(c) hereof, or Lender shall require Borrower to obtain a separate
Policy pursuant to Subsection 7.1(c) hereof, one-twelfth of an amount which would be
sufficient to pay the Insurance Premiums due for the renewal of the coverage afforded
by the Policies upon the expiration thereof (the “Monthly Insurance Deposit”).
Amounts deposited pursuant to this Section 8.6 are herein referred to as the “Tax
and Insurance Funds”). In the event Lender shall elect, after the occurrence
and during the continuance of an Event of Default, to collect payments in escrow for
Insurance Premiums, Borrower shall pay to Lender an initial deposit to be determined
by Lender, in its reasonable discretion, to increase the amounts in the Tax and Insurance
Funds to an amount which, together with anticipated monthly escrow payments, shall
be sufficient to pay all Insurance Premiums as they become due. Borrower agrees to
notify Lender immediately of any changes to the amounts, schedules and instructions for payment of any Taxes and Insurance Premiums
of which it has or obtains knowledge and authorizes Lender or its agent to obtain the
bills for Taxes directly from the appropriate taxing authority. Provided there are
sufficient amounts in the Tax and Insurance Funds, and no Event of Default exists,
Lender shall be obligated to pay the Taxes and Insurance Premiums as they become due on their respective due dates on behalf
of Borrower by applying the Tax and Insurance Funds to the payment of such Taxes and Insurance Premiums. If the amount of the Tax
and Insurance Funds shall exceed the amounts due for Taxes and Insurance Premiums pursuant
to Sections 4.5 and 7.1 hereof, Lender shall, in its discretion, return any excess
to Borrower or credit such excess against future payments to be made to the Tax and
Insurance Funds. If the Tax and Insurance Funds are not sufficient to pay the amounts set forth above, Borrower shall promptly
pay to Lender, upon demand, an amount which Lender shall reasonably estimate as sufficient
to make up the deficiency.


 


Section 8.7.          The
Accounts Generally.


 


(a)          All
Reserve Funds shall be held in Eligible Accounts. Borrower grants to Lender a first-priority
perfected security interest in each of the Reserve Funds and all sums now or hereafter
deposited in the Reserve Funds as additional security for payment of the Debt. Until
expended or applied in accordance herewith, the Reserve Funds shall constitute additional
security for the Debt. The provisions of this Section 8.7 are intended to give Lender and/or Servicer “control”
of the Reserve Funds within the meaning of the UCC. Borrower acknowledges and agrees that
the Reserve Funds are subject to the sole dominion, control and discretion of Lender,
its authorized agents or designees, subject to the terms hereof, and Borrower shall
have no right of withdrawal with respect to any Reserve Funds except with the prior
written consent of Lender or as otherwise provided herein. The Reserve Funds shall
not constitute trust funds and may be commingled with other monies held by Lender.


 



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(b)          Borrower
shall not, without obtaining the prior written consent of Lender, further pledge, assign
or grant any security interest in the Reserve Funds or permit any lien to attach thereto,
or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming
Lender as the secured party, to be filed with respect thereto. Lender shall have the right to file a financing statement or statements
under the UCC in connection with any of the Reserve Funds with respect thereto in the form required
to properly perfect Lender’s security interest therein. Borrower agrees that at any
time and from time to time, at the expense of Borrower, Borrower will promptly execute
and deliver all further instruments and documents, and take all further action, that may be reasonably necessary or desirable,
or that Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted
hereby or to enable Lender to exercise and enforce its rights and remedies hereunder with
respect to any Reserve Funds.


 


(c)          Notwithstanding
anything to the contrary contained herein or in any other Loan Document, upon the
occurrence and during the continuance of an Event of Default, without notice from Lender or Servicer (i) Borrower shall have no
rights in respect of the Reserve Funds and (ii) Lender shall have all rights and remedies
with respect to the Accounts and the amounts on deposit therein and the Reserve Funds
as described in this Agreement, the Cash Management Agreement and in the Security Instrument,
in addition to all of the rights and remedies available to a secured party under the
UCC, and, notwithstanding anything to the contrary contained in this Agreement, the
Cash Management Agreement or in the Security Instrument, may apply the Reserve Funds
as Lender determines in its sole discretion including, but not limited to, payment of the Debt.


 


(d)          The
insufficiency of Reserve Funds on deposit with Lender shall not absolve Borrower of
the obligation to make any payments, as and when due pursuant to this Agreement and
the other Loan Documents, and such obligations shall be separate and independent, and
not conditioned on any event or circumstance whatsoever.


 


(e)          Borrower
shall indemnify Lender and hold Lender harmless from and against any and all actions,
suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses
(including litigation costs and reasonable attorneys fees and expenses) arising from
or in any way connected with the Reserve Funds, the sums deposited therein or the performance of the obligations for which
the Reserve Funds were established, except to the extent arising from the gross negligence
or willful misconduct of Lender, its agents or employees. Borrower shall assign to
Lender all rights and claims Borrower may have against all Persons supplying labor,
materials or other services which are to be paid from or secured by the Reserve Funds; provided, however, that Lender may
not pursue any such right or claim unless an Event of Default has occurred and remains uncured.


 


(f)          Interest
accrued, if any, on the Reserve Funds, other than on the Interest Bearing Reserve
Funds, shall not be required to be remitted to any Account and may instead be retained by Lender. Reserve Funds that are Interest
Bearing Reserve Funds shall be held in an interest-bearing account. In no event shall Lender or any Servicer be required
to select any particular interest-bearing account or the account that yields the highest
rate of interest, provided that selection of the account shall be consistent with the general standards at the time being utilized
by Lender or such Servicer, as applicable, in establishing similar accounts for loans
of comparable type. All such interest that so becomes part of the applicable Interest
Bearing Reserve Funds shall be disbursed in accordance with the disbursement procedures
contained herein applicable to such Interest Bearing Reserve Funds; provided, however,
that Lender may, at its election, retain any such interest for its own account during
the occurrence and continuance of an Event of Default.


 



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Section 8.8.          Letters
of Credit.


 


(a)          Notwithstanding
anything to the contrary contained herein, Borrower may, at Borrower’s option, provide a Letter of Credit in lieu
of any of the cash deposits required to be made pursuant to Article 8 hereof, provided that
such Letter of Credit is in the amount of the cash deposit required thereunder and
otherwise meets all applicable requirements related thereto set forth herein. Other
than in connection with any Letters of Credit delivered in connection with the closing
of the Loan, Borrower shall give Lender no less than ten (10) days written notice
of Borrower’s election to deliver a Letter of Credit in lieu of any cash deposit
required under Article 8 hereof and Borrower shall pay to Lender all of Lender’s reasonable out-of-pocket costs and expenses
in connection therewith. No party other than Lender shall be entitled to draw on any
such Letter of Credit. Upon ten (10) days prior written notice to Lender, Borrower
may replace a Letter of Credit with a cash deposit to the applicable Reserve Fund.
Prior to the return of a Letter of Credit, Borrower shall deposit an amount equal to
the amount that would have accumulated in the applicable Reserve Fund and not been
disbursed in accordance with this Agreement if such Letter of Credit had not been delivered. In the event that any disbursement
of any Reserve Funds relates to a portion thereof provided through a Letter of Credit, any “disbursement” of said funds
as provided above shall be deemed to refer to (i) Borrower providing Lender a replacement
Letter of Credit in an amount equal to the original Letter of Credit posted less the
amount of the applicable disbursement provided hereunder and (ii) Lender, after receiving
such replacement Letter of Credit, returning such original Letter of Credit to Borrower;
provided, that, no replacement Letter of Credit shall be required with respect to
the final disbursement of the applicable Reserve Funds such that no further sums are
required to be deposited in the applicable Reserve Funds. Borrower shall pay all cost, expenses and fees relating to any assignment
of the Letter of Credit to Lender and/or from Lender to its successors and assigns.


 


(b)          Each
Letter of Credit delivered hereunder shall be additional security for the payment
of the Debt. Upon the occurrence and during the continuance of an Event of Default,
Lender shall have the right, at its option, to draw on any Letter of Credit and to apply
all or any part thereof to the payment of the items for which such Letter of Credit was
established or to apply each such Letter of Credit to payment of the Debt in such order,
proportion or priority as Lender may determine. Any such application to the Debt shall be subject to the terms and conditions hereof
relating to application of sums to the Debt. Lender shall have the additional rights
to draw in full any Letter of Credit: (i) if Lender has received a notice from the
issuing bank that the Letter of Credit will not be renewed and a substitute Letter
of Credit is not provided at least forty five (45) days prior to the date on which the outstanding Letter of Credit is scheduled
to expire; (ii) if Lender has not received a notice from the issuing bank that it has renewed the Letter of Credit at least forty
five (45) days prior to the date on which such Letter of Credit is scheduled to expire
and a substitute Letter of Credit is not provided at least forty five (45) days prior to the date on which the outstanding
Letter of Credit is scheduled to expire; (iii) upon receipt of notice from the issuing bank
that the Letter of Credit will be terminated (except if the termination of such Letter
of Credit is permitted pursuant to the terms and conditions hereof or a substitute
Letter of Credit is provided by no later than forty five (45) days prior to such termination);
(iv) if Lender has received notice that the bank issuing the Letter of Credit shall
cease to be an Approved Bank and Borrower has not substituted a Letter of Credit from an Approved Bank within fifteen (15)
days after notice; and/or (v) if the bank issuing the Letter of Credit shall fail to (A) issue
a replacement Letter of Credit in the event the original Letter of Credit has been
lost, mutilated, stolen and/or destroyed or (B) consent to the transfer of the Letter
of Credit to any Person designated by Lender. If Lender draws upon a Letter of Credit
pursuant to the terms and conditions of this Agreement, provided no Event of Default
exists, Lender shall apply all or any part thereof for the purposes for which such
Letter of Credit was established. Notwithstanding anything to the contrary contained
in the above, Lender is not obligated to draw any Letter of Credit upon the happening
of an event specified in (i), (ii), (iii), (iv) or (v) above and shall not be liable
for any losses sustained by Borrower due to the insolvency of the bank issuing the
Letter of Credit if Lender has not drawn the Letter of Credit.


 



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ARTICLE 9 CASH MANAGEMENT AGREEMENT


 


Section 9.1.          Cash
Management Agreement.


 


Borrower
shall enter into the Cash Management Agreement on the date hereof which shall govern
the collection, holding and disbursement of Rents and any other income from the Property
during the term of the Loan.


 


Section 9.2.          Cash
Flow Sweep.


 


In
the event of a Cash Trap Event Period, all Excess Cash Flow (as defined in the Cash
Management Agreement) shall be deposited into the FedEx Reserve Account (as defined in the Cash Management Agreement) or the Excess
Cash Flow Reserve Account (as defined in the Cash Management Agreement), as applicable
and as more particularly set forth in the Cash Management Agreement.


 


ARTICLE 10


 


EVENTS OF DEFAULT; REMEDIES


 


Section 10.1.          Event
of Default.


 


The occurrence
of any one or more of the following events shall constitute an “Event of Default”:


 


 



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(a)          if
Borrower shall fail to (i) pay when due (A) any sums which by the express terms of
this Agreement and the other Loan Documents require immediate or prompt payment without
any grace period or (B) sums which are payable on the Maturity Date, or (ii) pay within
five (5) days when due (A) any monthly Debt Service and any amount required to be
paid into the Reserve Funds or (B) any other sums payable under the Note, this Agreement
or any of the other Loan Documents;


 


(b)          if
any of the Taxes or Other Charges is not paid when the same is due and payable except to
the extent sums sufficient to pay such Taxes and Other Charges have been deposited
with Lender in accordance with the terms of this Agreement and Lender’s access
to such sums is not restricted or constrained in any manner;


 


(c)          if
the Policies are not kept in full force and effect or if evidence of the same is not
delivered to Lender as provided in Section 7.1 hereof;


 


(d)          if
any of the representations, warranties and/or covenants contained in Article 5 or Article
6 hereof are breached or violated;


 


(e)          if
any representation or warranty of, or with respect to, Borrower, Sponsor, Guarantor
or any member, general partner, principal or beneficial owner of any of the foregoing,
made herein, in the Guaranty or in the Environmental Indemnity or in any other guaranty, or in any certificate, report,
financial statement or other instrument or document furnished to Lender shall have been false
or misleading in any material adverse respect when made;


 


(f)          if
(i) Borrower, any SPE Component Entity, Sponsor or Guarantor shall commence any case,
proceeding or other action (A) under any Creditors’ Rights Laws seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt
or insolvent, or seeking reorganization, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all or any substantial
part of its assets, or Borrower or any managing member or general partner of Borrower, any SPE Component Entity, Sponsor
or Guarantor shall make a general assignment for the benefit of its creditors; (ii) there shall
be commenced against Borrower or any managing member or general partner of Borrower,
any SPE Component Entity, Sponsor or Guarantor any case, proceeding or other action
of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication
or appointment or (B) remains undismissed, undischarged or unbonded for a period of
sixty (60) days; (iii) there shall be commenced against Borrower, any SPE Component
Entity, Sponsor or Guarantor any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of any order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof;
(iv) Borrower, any SPE Component Entity, Sponsor or Guarantor shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) Borrower, any SPE Component Entity, Sponsor or Guarantor shall
generally not, or shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due;


 



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(g)          if
Borrower shall be in default beyond applicable notice and grace periods under any other
mortgage, deed of trust, deed to secure debt or other security agreement covering
any part of the Property whether it be superior or junior in lien to the Security Instrument;


 


(h)          if
the Property becomes subject to any mechanic’s, materialman’s or other lien
other than a lien for any Taxes not then due and payable and the lien shall remain undischarged
of record (by payment, bonding or otherwise) for a period of thirty (30) days;


 


(i)          if
any federal tax lien is filed against Borrower, any SPE Component Entity, Sponsor,
Guarantor or the Property and same is not discharged of record (by payment, bonding
or otherwise) within thirty (30) days after same is filed;


 


(j)          if
Borrower shall fail to comply with the covenants in Article 15 or otherwise fails to
deliver to Lender, within twenty (20) days after request by Lender, the estoppel certificates
required by Section 4.13(a) or (c) hereof;


 


(k)          if
any default occurs under any guaranty or indemnity executed in connection herewith
(including, without limitation, the Environmental Indemnity and/or the Guaranty) and such default continues after the expiration
of applicable grace periods, if any;


 


(l)          if
any of the assumptions contained in the Non-Consolidation Opinion, or in any New Non-Consolidation Opinion are untrue or
shall become untrue in any material respect;


 


(m)          if
Borrower shall fail to deliver to Lender within thirty (30) days after request by Lender
any Required Financial Item;


 


(n)          if
Borrower defaults under the Management Agreement beyond the expiration of applicable
notice and grace periods, if any, thereunder or if the Management Agreement is canceled,
terminated or surrendered or expires pursuant to its terms, unless in such case Borrower
shall enter into a new management agreement with a Qualified Manager in accordance
with the applicable terms and provisions hereof;


 


(o)          if
any representation and/or covenant herein relating to ERISA matters is breached;


 


(p)          if
(i) Borrower defaults under the Property Documents beyond the expiration of applicable notice and grace periods, if any,
thereunder, (ii) any of the Property Documents are amended, supplemented, replaced, restated
or otherwise modified without Lender’s prior written consent or if Borrower
consents to a transfer of any party’s interest thereunder without Lender’s
prior written consent, (iii) any Property Document is canceled, terminated, surrendered
or expires pursuant to its terms, unless in such case Borrower enters into a replacement
thereof in accordance with the applicable terms and provisions hereof or (iv) a Property Document Event occurs;


 



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(q)          if
Borrower shall fail to observe, perform or discharge any of Borrower’s obligations,
covenants, conditions or agreements under the Interest Rate Protection Agreement and
otherwise comply with the covenants set forth in Section 2.8 hereof;


 


(r)          if
(A) Borrower shall fail in the payment of any rent, additional rent or other charge mentioned in or made payable by the Ground
Lease as and when such rent or other charge is payable (unless waived by the landlord
under the Ground Lease) and Borrower does not cure such failure prior to the expiration
of any grace period as expressly provided for in the Ground Lease, (B) there shall occur
any default by Borrower, as tenant under the Ground Lease, in the observance or performance
of any term, covenant or condition of the Ground Lease on the part of Borrower, to
be observed or performed (unless waived by the landlord under the Ground Lease) and
Borrower does not cure such failure prior to the expiration of any grace period as
expressly provided for in the Ground Lease, (C) if any one or more of the events referred
to in the Ground Lease shall occur which would cause the Ground Lease to terminate without notice or action by the
landlord under the Ground Lease or which would entitle the landlord to terminate the Ground
Lease and the term thereof by giving notice to Borrower, as tenant thereunder (unless waived by the landlord under the Ground
Lease), (D) if the leasehold estate created by the Ground Lease shall be surrendered or the
Ground Lease shall be terminated or canceled for any reason or under any circumstances
whatsoever or (E) if any of the terms, covenants or conditions of the Ground Lease
shall in any manner be modified, changed, supplemented, altered, or amended without
the consent of Lender except as otherwise permitted by this Agreement;


 


(s)          if
(i) any Lease is canceled, terminated, surrendered or expires pursuant to its terms,
unless in such case Borrower enters into a replacement thereof in accordance with the
applicable terms and provisions hereof or (ii) a Lease Event occurs;


 


(t)          if
Borrower shall continue to be in default under any term, covenant or condition of
this Agreement not specified in subsections (a) through (r) above or not otherwise specifically specified as an Event of Default
herein, (i) for more than ten (10) days after notice from Lender, in the case of any
default which can be cured by the payment of a sum of money or (ii) for thirty (30)
days after notice from Lender, in the case of any other default, provided that if
such default cannot reasonably be cured within such thirty (30) day period and Borrower
shall have commenced to cure such default within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty (30) day period
shall be extended for so long as it shall require Borrower in the exercise of due
diligence to cure such default, it being agreed that no such extension shall be for
a period in excess of ninety (90) days (subject to further extension by Lender, in
Lender’s sole discretion); and/or


 


(u)          if
there shall be default under any of the other Loan Documents beyond any applicable
cure periods contained in such Loan Documents, whether as to Borrower or the Property,
or if any other such event shall occur or condition shall exist, if the effect of
such event or condition is to accelerate the maturity of any portion of the Debt or to permit
Lender to accelerate the maturity of all or any portion of the Debt.


 



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Section 10.2.          Remedies.


 


(a)          Upon
the occurrence and during the continuance of an Event of Default (other than an Event of Default described in Section 10.1(f)
above with respect to Borrower and SPE Component Entity only) and at any time thereafter Lender
may, in addition to any other rights or remedies available to it pursuant to this Agreement, the Security Instrument, the Note
and 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 the Property, including, without
limitation, declaring the Debt to be immediately due and payable, and Lender may enforce or avail itself
of any or all rights or remedies provided in this Agreement, the Security Instrument, the
Note and the other Loan Documents against Borrower and the Property, including, without
limitation, all rights or remedies available at law or in equity. Upon any Event of Default described in Section 10.1(f)
above (with respect to Borrower and SPE Component Entity only), the Debt and all other obligations
of Borrower under this Agreement, the Security Instrument, the Note and the other Loan Documents shall immediately
and automatically become due and payable, without notice or demand, and Borrower hereby
expressly waives any such notice or demand, anything contained herein or in the Security Instrument, the Note and the other Loan
Documents to the contrary notwithstanding.


 


(b)          Upon
the occurrence and during the continuance of an Event of Default, all or any one or
more of the rights, powers, privileges and other remedies available to Lender against
Borrower under this Agreement, the Security Instrument, the Note or the other Loan
Documents executed and delivered by, or applicable to, Borrower or at law or in equity
may be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not Lender shall have
commenced any foreclosure proceeding or other action for the enforcement of its rights
and remedies under this Agreement, the Security Instrument, the Note or the other Loan Documents with respect to the Property.
Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently,
singularly, successively, together or otherwise, at such time and in such order as
Lender may determine in its sole discretion, to the fullest extent permitted by Applicable
Law, without impairing or otherwise affecting the other rights and remedies of Lender
permitted by Applicable Law, equity or contract or as set forth herein or in the Security Instrument, the Note or the other
Loan Documents. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any
such remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of one Default or Event
of Default with respect to Borrower shall not be construed to be a waiver of any subsequent
Default or Event of Default by Borrower or to impair any remedy, right or power consequent
thereon.


 


 



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(c)          With
respect to Borrower and the Properties, nothing contained herein or in any other Loan
Document shall be construed as requiring Lender to resort to any Individual Property
for the satisfaction of any of the Debt in preference or priority to any other Individual
Properties, and Lender may seek satisfaction out of all of the Properties or any part
thereof, in its absolute discretion in respect of the Debt. In addition, Lender shall
have the right from time to time to partially foreclose the Security Instruments in any manner and for any amounts secured
by the Security Instruments then due and payable as determined by Lender in its sole discretion
including, without limitation, the following circumstances: (i) in the event Borrower
defaults beyond any applicable grace period in the payment of one or more scheduled payments of principal and interest,
Lender may foreclose one or more of the Security Instruments to recover such delinquent payments,
or (ii) in the event Lender elects to accelerate less than the entire outstanding principal
balance of the Loan, Lender may foreclose one (1) or more of the Security Instruments
to recover so much of the principal balance of the Loan as Lender may accelerate and
such other sums secured by one or more of the Security Instruments as Lender may elect.
Notwithstanding one or more partial foreclosures, the Property shall remain subject
to the Security Instruments to secure payment of sums secured by the Security Instruments
and not previously recovered.


 


(d)          Upon
the occurrence and during the continuance of an Event of Default, Lender shall have the right from time to time to sever
the Note and the other Loan Documents into one or more separate notes, security instruments
and other security documents (the “Severed Loan Documents”) in such
denominations as Lender shall determine in its sole discretion for purposes of evidencing and enforcing its rights and remedies
provided hereunder. Borrower shall execute and deliver to Lender from time to time,
promptly after the request of Lender, a severance agreement and such other documents
as Lender shall request in order to effect the severance described in the preceding
sentence, all in form and substance reasonably satisfactory to Lender. Borrower hereby
absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled
with an interest, in its name and stead to make and execute all documents necessary
or desirable to effect the aforesaid severance, Borrower ratifying all that its said
attorney shall do by virtue thereof; provided, however, Lender shall not make or execute
any such documents under such power until three (3) days after notice has been given
to Borrower by Lender of Lender’s intent to exercise its rights under such power.
Borrower shall not be obligated to pay any costs or expenses incurred in connection
with the preparation, execution, recording or filing of the Severed Loan Documents and the Severed Loan Documents shall not contain
any representations, warranties or covenants not contained in the Loan Documents and any such representations
and warranties contained in the Severed Loan Documents will be given by Borrower only
as of the Closing Date.


 


(e)          Any
amounts recovered from the Property or any other collateral for the Loan after an
Event of Default may be applied by Lender toward the payment of any interest and/or principal of the Loan and/or any other
amounts due under the Loan Documents in such order, priority and proportions as Lender in
its sole discretion shall determine.


 



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(f)          Lender
may, but without any obligation to do so and without notice to or demand on Borrower
and without releasing Borrower from any obligation hereunder or being deemed to have
cured any Event of Default hereunder, make, do or perform any obligation of Borrower
hereunder in such manner and to such extent as Lender may deem necessary. Lender is
authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to protect
its interest in the Property for such purposes, and the cost and expense thereof (including
reasonable attorneys’ fees to the extent permitted by Applicable Law), with interest
as provided in this Section, shall constitute a portion of the Debt and shall be due
and payable to Lender upon demand. All such costs and expenses incurred by Lender
in remedying such Event of Default or such failed payment or act or in appearing in, defending, or bringing any action or
proceeding shall bear interest at the Default Rate, for the period after such cost or expense
was incurred through and including the date of payment to Lender. All such costs and
expenses incurred by Lender together with interest thereon calculated at the Default Rate shall be deemed to constitute a portion
of the Debt and be secured by the liens, claims and security interests provided to
Lender under the Loan Documents and shall be immediately due and payable upon demand
by Lender therefore.


 


ARTICLE 11


 


SECONDARY MARKET


 


Section 11.1.          Secondary
Market Transactions


 


(a)          Lender
shall have the right (i) to sell or otherwise transfer the Loan or any portion thereof
as a whole loan and/or (ii) to sell participation interests in the Loan. The transaction referred to in clauses (i) and
(ii) above shall hereinafter be referred to, collectively, as “Secondary Market
Transactions”.


 


(b)          If
requested by Lender, Borrower shall assist Lender in satisfying the market standards
to which Lender customarily adheres or which may be reasonably required in the marketplace
in connection with any Secondary Market Transactions, including, without limitation,
to:


 


(i)          (A)
provide updated financial and other information with respect to the Property, the business operated at the Property, Borrower,
Guarantor, Sponsor and Manager, (B) provide updated budgets relating to the Property and (C)
provide updated appraisals, market studies, environmental reviews (Phase I’s and, if appropriate, Phase II’s),
property condition reports and other due diligence investigations of the Property (the “Updated
Information”), together, if customary, with appropriate verification of the Updated Information through letters
of auditors or opinions of counsel acceptable to Lender and the Rating Agencies;


 


(ii)          provide
opinions of counsel, which may be relied upon by Lender, the Rating Agencies and their
respective counsel, agents and representatives, as to non-consolidation, fraudulent
conveyance, matters of Delaware (or Maryland, as applicable) and federal bankruptcy
law relating to limited liability companies and true sale or any other opinion customary
in Secondary Market Transactions with respect to the Property and Borrower and Borrower’s
Affiliates, which counsel and opinions shall be satisfactory in form and substance
to Lender;


 



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(iii)          provide
updated, as of the closing date of the Secondary Market Transaction, representations and warranties made in the Loan Documents
and such additional representations and warranties as the Lender may reasonably require;


 


(iv)          provide
such information, documents and agreements relating to the Property Documents as Lender
may reasonably request in connection with a Secondary Market Transaction; and


 


(v)          execute
such amendments to the Loan Documents and Borrower or any SPE Component Entity’s
organizational documents as may be reasonably requested by Lender including, without
limitation, bifurcation of the Loan into two or more components and/or separate notes and/or creating a senior/subordinate
note structure (any of the foregoing, a “Loan Bifurcation”); provided,
however, that Borrower shall not be required to modify or amend any Loan Document
if such modification or amendment would change the interest rate, the stated maturity or the amortization of principal set forth
in the Note, except in connection with a Loan Bifurcation which may result in varying
fixed interest rates and amortization schedules, but which shall have the same initial
weighted average coupon of the original Note.


 


(c)          Lender
may disseminate to any Lender Party (and to any investment banking firms, accounting
firms, law firms and other third party advisory firms and investors involved with the
Loan and the Loan Documents or the applicable Secondary Market Transaction) all documents and financial and other information then
possessed by or known to Lender with respect to: (a) the Property and its operation;
and (b) any party connected with the Loan (including, without limitation, Borrower,
any partner or member of Borrower, any constituent partner or member of Borrower, any guarantor).


 


Section 11.2.          Servicer.
At the option of Lender, the Loan may be serviced by a servicer/trustee selected
by Lender (the “Servicer”) and Lender may delegate all or any portion
of its responsibilities under this Agreement and the other Loan Documents to such servicer/trustee
pursuant to a servicing agreement between Lender and such Servicer.


 



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Section 11.3. Mezzanine
Option. Lender shall have the option (the “Mezzanine Option”) at any time
to divide the Loan into two parts, a mortgage loan and a mezzanine loan, provided, that (i) the total loan amounts for such
mortgage loan and such mezzanine loan shall equal the then outstanding amount of the Loan immediately prior to Lender’s
exercise of the Mezzanine Option, and (ii) the weighted average interest rate of such mortgage loan and mezzanine loan shall initially
equal the Interest Rate. Borrower shall, at Borrower’s sole cost and expense, cooperate with Lender in Lender’s exercise
of the Mezzanine Option in good faith and in a timely manner, which such cooperation shall include, but not be limited to,
(i) executing such amendments to the Loan Documents and Borrower or any SPE Component Entity’s
organizational documents as may be reasonably requested by Lender or requested by
the Rating Agencies, (ii) creating one or more Single Purpose Entities (the “Mezzanine
Borrower”), which such Mezzanine Borrower shall (A) own, directly or indirectly,
100% of the equity ownership interests in Borrower (the “Equity Collateral”),
and (B) together with such constituent equity owners of such Mezzanine Borrower as
may be designated by Lender, execute such agreements, instruments and other documents
as may be required by Lender in connection with the mezzanine loan (including, without
limitation, a promissory note evidencing the mezzanine loan and a pledge and security
agreement pledging the Equity Collateral to Lender as security for the mezzanine loan);
and (iii) delivering such opinions, title endorsements, UCC title insurance policies
and other materials as may be required by Lender or the Rating Agencies.


 


Section
11.4. Conversion to Registered Form. At the request of Lender, Borrower shall appoint, as its agent, a registrar
and transfer agent (the “Registrar”) reasonably acceptable to Lender which shall
maintain, subject to such reasonable regulations as it shall provide, such books and records as are necessary for the registration
and transfer of the Note in a manner that shall cause the Note to be considered to
be in registered form for purposes of Section 163(f) of the IRS Code. The option to
convert the Note into registered form once exercised may not be revoked. Any agreement
setting out the rights and obligation of the Registrar shall be subject to the reasonable
approval of Lender. Borrower may revoke the appointment of any particular person as
Registrar, effective upon the effectiveness of the appointment of a replacement Registrar.
The Registrar shall not be entitled to any fee from Borrower or Lender or any other lender in respect of transfers of the Note
and other Loan Documents.


 


ARTICLE 12


 


INDEMNIFICATIONS


 


Section 12.1.          General
Indemnification. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all actual Losses imposed upon or incurred by or
asserted against any Indemnified Parties and directly or indirectly arising out of
or in any way relating to any one or more of the following: (a) any accident, injury to or death of persons
or loss of or damage to property occurring in, on or about the Property or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (b) any use, nonuse or condition in, on or about the Property or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (c) performance of any labor or services or the furnishing of any materials
or other property in respect of the Property or any part thereof; (d) any failure of
the Property to be in compliance with any Applicable Law; (e) any and all claims and demands
whatsoever which may be asserted against Lender by reason of any alleged obligations
or undertakings on its part to perform or discharge any of the terms, covenants, or
agreements contained in any Lease; (f) the payment of any commission, charge or brokerage
fee to anyone (other than a broker or other agent retained by Lender) which may be
payable in connection with the funding of the Loan evidenced by the Note and secured
by the Security Instrument; and/or (g) the holding or investing of the funds on deposit
in the Accounts or the performance of any work or the disbursement of funds in each
case in connection with the Reserve Funds. Any amounts payable to Indemnified Parties
by reason of the application of this Section 12.1 shall become immediately due and
payable and shall bear interest at the Default Rate from the date loss or damage is sustained
by Indemnified Parties until paid.


 



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Section 12.2.          Mortgage
and Intangible Tax and Transfer Tax Indemnification. Borrower shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties from and against any and all Losses
imposed upon or incurred by or asserted against any Indemnified Parties and directly
or indirectly arising out of or in any way relating to (a) any tax on the making and/or recording of the Security Instrument,
the Note or any of the other Loan Documents (whether due upon the making of same or upon the
exercise of its remedies under the Loan Documents), and (b) any transfer tax incurred
by Indemnified Parties in connection with the exercise of remedies hereunder or under
any other Loan Documents.


 


Section 12.3.          ERISA
Indemnification. Borrower shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified Parties from and against any and
all Losses (including, without limitation, reasonable attorneys’ fees and costs
incurred in the investigation, defense, and settlement of Losses incurred in correcting
any prohibited transaction or in the sale of a prohibited loan, and in obtaining any
individual prohibited transaction exemption under ERISA that may be required, in Lender’s
sole discretion) that Indemnified Parties may incur, directly or indirectly, as a result
of a default under Sections 3.7 or 4.19 of this Agreement.


 


Section 12.4.          Duty
to Defend, Legal Fees and Other Fees and Expenses. Upon written request by any
Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any
Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals
approved by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified
Parties may, in their sole discretion, engage their own attorneys and other professionals
to defend or assist them, and, at the option of Indemnified Parties, their attorneys shall control the resolution of any claim
or proceeding. Upon demand, Borrower shall pay or, in the sole discretion of the Indemnified
Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers, environmental
consultants, laboratories and other professionals in connection therewith.


 


Section 12.5.          Survival.
The obligations and liabilities of Borrower under this Article 12 shall fully survive
indefinitely notwithstanding any termination, satisfaction, assignment, entry of a
judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu
of foreclosure of the Security Instrument.


  



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Section 12.6.          Environmental
Indemnity.          Simultaneously herewith, Borrower
and Guarantor have executed and delivered the Environmental Indemnity to Lender, which Environmental Indemnity is not secured by
the Security Instrument.


 


ARTICLE 13 


 


EXCULPATION


 


Section 13.1.          Exculpation.


 


(a)          Subject
to the qualifications below, Lender shall not enforce the liability and obligation
of Borrower to perform and observe the obligations contained in the Note, this Agreement, the Security Instrument or the other
Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing
personal liability shall be sought against Borrower or any principal, director, officer,
employee, beneficiary, shareholder, partner, member, trustee, agent, or Affiliate of
Borrower (but specifically excluding Guarantor) or any legal representatives, successors
or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Lender may bring a
foreclosure action, an action for specific performance or any other appropriate action
or proceeding to enable Lender to enforce and realize upon its interest under the
Note, this Agreement, the Security Instrument and the other Loan Documents, or in the
Property, the Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as
specifically provided herein, any judgment in any such action or proceeding shall
be enforceable against Borrower only to the extent of Borrower’s interest in
the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement,
the Security Instrument and the other Loan Documents, shall not sue for, seek or demand any
deficiency judgment against Borrower or any of the Exculpated Parties in any such action
or proceeding under or by reason of or under or in connection with the Note, this Agreement,
the Security Instrument or the other Loan Documents. The provisions of this Section
shall not, however, (1) constitute a waiver, release or impairment of any obligation
evidenced or secured by any of the Loan Documents; (2) impair the right of Lender to
name Borrower as a party defendant in any action or suit for foreclosure and sale under
the Security Instrument; (3) affect the validity or enforceability of any indemnity,
guaranty or similar instrument (including, without limitation, the indemnities set
forth in Article 12 hereof, in the Guaranty and in the Environmental Indemnity) made in
connection with the Loan or any of the rights and remedies of Lender thereunder (including,
without limitation, Lender’s right to enforce said rights and remedies against Borrower
and/or Guarantor (as applicable) personally and without the effect of the exculpatory
provisions of this Article 13); (4) impair the right of Lender to obtain the appointment
of a receiver; (5) impair the enforcement of the assignment of leases and rents contained
in the Security Instrument; (6) impair the right of Lender to enforce Section 4.12(e)
of this Agreement; (7) constitute a prohibition against Lender to seek a deficiency
judgment against Borrower in order to fully realize the security granted by the Security
Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against
the Property or any Individual Property; or (8) constitute a waiver of the right of Lender
to enforce the liability and obligation of Borrower, by money judgment or otherwise,
to the extent of any Losses incurred by Lender (including attorneys’ fees and
costs reasonably incurred) arising out of or in connection with any of the following:


 






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(i)          fraud
or intentional misrepresentation or any failure to disclose a material fact by Borrower, Guarantor, Sponsor, or any Borrower Party
in connection with the Loan;


 


(ii)         the
gross negligence or willful misconduct of Borrower, any SPE Component Entity, Guarantor, Sponsor, or any Borrower Party or the
commission of a criminal act by Borrower, any SPE Component Entity, Guarantor, Sponsor or any Borrower Party which results in
a forfeiture of the Property;


 


(iii)        material
physical waste to the Property caused by the intentional acts or intentional omissions of Borrower, any SPE Component Entity,
Guarantor, Sponsor, or any Borrower Party (including, without limitation, any arson or abandonment of the Property) and/or the
removal or disposal of any portion of the Property after an Event of Default by Borrower, any SPE Component Entity, Guarantor,
Sponsor or any Borrower Party;


 


(iv)        the
misapplication, misappropriation or conversion by Borrower of (A) any insurance proceeds paid by reason of any loss, damage or
destruction to the Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion
of the Property, (C) any Rents following an Event of Default or (D) any Tenant security deposits or Rents collected in advance;


 


(v)         failure
to pay (or cause to be paid) any Taxes or Other Charges, charges for labor or materials or any other charges that can create liens
on any portion of the Property to the extent that the revenue from the Property is sufficient to pay such amounts (other than
(x) amounts deposited with Lender as Tax and Insurance Reserve Funds for Taxes or Other Charges where Lender elects not to apply
such funds toward payment of such Taxes or Other Charges owed or (y) Taxes or Other Charges owed that are contested strictly in
accordance with the terms of the Loan Documents);


 


(vi)        the
breach of any material representation, warranty, covenant or indemnification provision in the Environmental Indemnity, this Agreement
or in the Security Instrument concerning Environmental Laws and Hazardous Substances and any indemnification of Lender with respect
thereto in either document;


 


(vii)       any
fees or commissions paid by Borrower after the occurrence of an Event of Default to Guarantor, Sponsor and/or any Borrower Party
in violation of the terms of the Note, this Agreement, the Security Instrument or the other Loan Documents;


 



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(viii)      Borrower’s
breach of, or failure to comply with, the representations, warranties and covenants contained in Article 15 of this Agreement
and/or the provisions of Sections 12.2 and 12.3 hereof;







 


(ix)         failure
to maintain insurance as required by this Agreement to the extent that the revenue from the Property is sufficient to pay the
Insurance Premiums relating thereto (other than the failure to pay amounts deposited with Lender as Tax and Insurance Funds for
Insurance Premiums to be paid to maintain such insurance where Lender elects not to apply such funds toward payment of such Insurance
Premiums);


 


(x)          Borrower
fails to permit on-site inspections of the Property, fails to provide the Required Financial Items or fails to appoint a new property
manager upon the request of Lender, each as required by, and in accordance with the terms and provisions of, this Agreement, the
Assignment of Management Agreement and the other Loan Documents or Borrower appoints a new property manager or replaces the property
manager other than in accordance with the terms of this Agreement, the Assignment of Management Agreement and the other Loan Documents;


 


(xi)         any
litigation or other legal proceeding related to the Debt filed in bad faith by Borrower, any SPE Component Entity, Guarantor,
Sponsor or any Borrower Party that delays, opposes, impedes, obstructs, hinders, enjoins or otherwise interferes with or frustrates
the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the other Loan Documents;


 


(xii)     the
seizure or forfeiture of the Property, or any portion thereof, or Borrower’s interest therein, resulting from criminal wrongdoing
by Borrower, Guarantor, Sponsor, or any Borrower Party;


 


(xiii)    failure
to pay (or cause the payment of) rent, additional rent or any other amounts due and payable under the Ground Lease, including,
without limitation, the SAF Contribution (as defined in the Ground Lease);


 


(xiv)    failure
to pay (or cause the payment of) all outstanding SAF Contributions, the outstanding amounts payable under the Bonds, and any compensation
payable to Trustee or the County (each as defined in the Ground Lease) upon termination or earlier expiration of the Ground Lease
(including, without limitation, prior to a foreclosure or delivery of deed-in-lieu of foreclosure);


 


(xv)     failure
to pay (or cause the payment of) an amount equal to the difference between (A) the Allocated Loan Amount for the New Hampshire
Property and (B) the sum of (i) the building insurance proceeds estimated to be received from the insurance carrier for the New
Hampshire Property and (ii) the proceeds from the sale of the land for the New Hampshire Property (such amount being referred
to herein as the “Gap Amount”), in the event that there is a Casualty at the New Hampshire Property; and/or


 



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(xvi) Additional Interest not being paid.


 


Notwithstanding anything
to the contrary in this Agreement, the Note or any of the Loan Documents, (A) Lender shall not be deemed to have waived any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for
the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lender in accordance
with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower in the event that: (i) any representation, warranty
or covenant contained in Article 5 or Article 6 or Section 4.14 hereof is violated or breached, provided, however, that any such
breach or violation with respect to Article 5 shall not result in recourse liability hereunder unless such breach was material
and, within fifteen (15) days of notice from Lender, Borrower fails to cure such breach and fails to deliver to Lender a New Non-Consolidation
Opinion to the effect that such failure does not negate/impair the opinion previously delivered to Lender; (ii) Borrower or any
SPE Component Entity files a voluntary petition under the Bankruptcy Code or any other Creditors’ Rights Laws; (iii) an
Affiliate, officer, director, or representative which Controls, directly or indirectly, Borrower or any SPE Component Entity files,
or joins in the filing of, an involuntary petition against Borrower or any SPE Component Entity under the Bankruptcy Code or any
other Creditors’ Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against
Borrower or any SPE Component Entity from any Person; (iv) Borrower or any SPE Component Entity files an answer consenting to
or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy
Code or any other Creditors’ Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary
petition from any Person; (v) any Affiliate, officer, director, or representative which Controls Borrower or any SPE Component
Entity consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner
for Borrower, any SPE Component Entity or any portion of the Property; (vi) Borrower or any SPE Component Entity makes an assignment
for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as
they become due; (vii) there is substantive consolidation of Borrower or any SPE Component Entity (or any Restricted Party) with
any other Person in connection with any federal or state bankruptcy proceeding involving the Guarantor or any of its Affiliates;
(viii) Borrower or any SPE Component Entity (or any Restricted Party) contests or opposes any motion made by Lender to obtain
relief from the automatic stay or seeks to reinstate the automatic stay in the event of any federal or state bankruptcy or insolvency
proceeding involving the Guarantor or its Affiliates; (ix) Borrower’s failure to deposit any springing Reserve Funds deposits
pursuant to the terms of this Agreement; and/or (x) the Ground Lease is terminated, cancelled or otherwise ceases to exist and
MO Borrower has not exercised its purchase option pursuant to the terms of the Ground Lease.


 


Section 13.2.          Survival.
The obligations and liabilities of Borrower under this Article 13 shall fully survive indefinitely notwithstanding any termination,
satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of
foreclosure of the Security Instrument.


 



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ARTICLE 14


 


NOTICES


 


Section 14.1.          Notices.         All
notices or other written communications hereunder shall be deemed to have been properly given (a) upon delivery, if delivered
in person or by facsimile transmission with receipt acknowledged by the recipient thereof and confirmed by telephone by sender,
(b) one (1) Business Day after having been deposited for overnight delivery with any reputable overnight courier service, or (c)
three (3) Business Days after having been deposited in any post office or mail depository regularly maintained by the U.S. Postal
Service and sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:


 


	If to Borrower:	c/o American Realty Capital
	 	106 York Road 
	 	Jenkintown, PA 19046
	 	Attn: Brian Block
	 	Facsimile No.: 215-887-2585
	 	 
	With a copy to:	c/o American Realty Capital
	 	405 Park Avenue
	 	15th floor
	 	New York, New York 10022
	 	Attn: William M. Kahane


 


	With a copy to:	Bond, Schoeneck & King, PPLC
	 	350 Linden Oaks Suite 310,
	 	Rochester, New York 14625
	 	Attention: Timothy Fitzgerald
	 	Facsimile No.: 585-362-4750
	 	 
	If to Lender:	WELLS FARGO BANK, NATIONAL ASSOCIATION
	 	Wells Fargo Center
	 	1901 Harrison Street, 2nd Floor
	 	MAC A0227-020
	 	Oakland, California 94612
	 	Attention: Commercial Mortgage Servicing
	 	Facsimile No.: 866-359-5352
	 	 
	With a copy to:	Alston & Bird LLP
	 	90 Park Avenue
	 	New York, New York 10016
	 	Attention: Meryl P. Diamond, Esq. 
	 	Facsimile No.: 212-210-9444


 






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or addressed as such party may from time to time designate by written
notice to the other parties.


 


Either party by notice to the other may designate
additional or different addresses for subsequent notices or communications.


 


ARTICLE 15


 


FURTHER ASSURANCES


 


Section 15.1.          Replacement
Documents. Upon receipt of an affidavit of an officer of Lender as to the loss, theft, destruction or mutilation of the Note,
this Agreement or any of the other Loan Documents which is not of public record, and, in the case of any such mutilation, upon
surrender and cancellation of the Note, this Agreement or such other Loan Document, Borrower will issue, in lieu thereof, a replacement
thereof, dated the date of the Note, this Agreement or such other Loan Document, as applicable, in the same principal amount thereof
and otherwise of like tenor.


 


Section 15.2.          Recording
of Security Instrument, etc.


 


(a)          Borrower
forthwith upon the execution and delivery of the Security Instrument and thereafter, from time to time, will cause the Security
Instrument and any of the other Loan Documents creating a lien or security interest or evidencing the lien hereof upon the Property
and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required
by any present or future law in order to publish notice of and fully to protect and perfect the lien or security interest hereof
upon, and the interest of Lender in, the Property. Borrower will pay all taxes, filing, registration or recording fees, and all
expenses incident to the preparation, execution, acknowledgment and/or recording of the Note, the Security Instrument, this Agreement,
the other Loan Documents, any note, deed of trust or mortgage supplemental hereto, any security instrument with respect to the
Property and any instrument of further assurance, and any modification or amendment of the foregoing documents, and all federal,
state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in connection with the execution
and delivery of the Security Instrument, any deed of trust or mortgage supplemental hereto, any security instrument with respect
to the Property or any instrument of further assurance, and any modification or amendment of the foregoing documents, except where
prohibited by Applicable Law so to do.


 



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Section 15.3.          Further
Acts, etc. Borrower will, at the cost of Borrower, and without expense to Lender, do, execute, acknowledge and deliver all
and every further acts, deeds, conveyances, deeds of trust, mortgages, assignments, notices of assignments, transfers and assurances
as Lender shall, from time to time, reasonably require, for the better assuring, conveying, assigning, transferring, and confirming
unto Lender the property and rights hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned,
warranted and transferred or intended now or hereafter so to be, or which Borrower may be or may hereafter become bound to convey
or assign to Lender, or for carrying out the intention or facilitating the performance of the terms of this Agreement or for filing,
registering or recording the Security Instrument, or for complying with all Applicable Law. Borrower, on demand, will execute
and deliver, and in the event it shall fail to so execute and deliver, hereby authorizes Lender to execute in the name of Borrower
or without the signature of Borrower to the extent Lender may lawfully do so, one or more financing statements to evidence more
effectively the security interest of Lender in the Property. Borrower grants to Lender an irrevocable power of attorney coupled
with an interest for the purpose of exercising and perfecting any and all rights and remedies available to Lender at law and in
equity, including without limitation, such rights and remedies available to Lender pursuant to this Section 15.3.


 


Section 15.4.          Changes
in Tax, Debt, Credit and Documentary Stamp Laws.


 


(a)          If
any law is enacted or adopted or amended after the date of this Agreement which deducts the Debt from the value of the Property
for the purpose of taxation and which imposes a tax, either directly or indirectly, on the Debt or Lender’s interest in
the Property, Borrower will pay the tax, with interest and penalties thereon, if any. If Lender is advised by counsel chosen by
it that the payment of tax by Borrower would be unlawful or taxable to Lender or unenforceable or provide the basis for a defense
of usury then Lender shall have the option by written notice of not less than one hundred eighty (180) days to declare the Debt
immediately due and payable, provided, however, that in such event no Exit Fee or other prepayment premium shall be due and payable.


 


(b)          Borrower
will not claim or demand or be entitled to any credit or credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Property, or any part thereof, and no deduction shall otherwise be made or claimed from the assessed value
of the Property, or any part thereof, for real estate tax purposes by reason of the Security Instrument or the Debt. If such claim,
credit or deduction shall be required by Applicable Law, Lender shall have the option, by written notice of not less than ninety
(90) days, to declare the Debt immediately due and payable.


 


(c)          If
at any time the United States of America, any State thereof or any subdivision of any such State shall require revenue or other
stamps to be affixed to the Note, the Security Instrument, or any of the other Loan Documents or impose any other tax or charge
on the same, Borrower will pay for the same, with interest and penalties thereon, if any.


 



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ARTICLE 16


 


WAIVERS


 


Section 16.1.          Remedies
Cumulative; Waivers.


 


The rights, powers and
remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement, the Security Instrument, the Note or the other Loan Documents, or existing
at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued singularly, concurrently or otherwise,
at such time and in such order as Lender may determine in Lender’s sole discretion. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as
a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient.
A waiver of one Default or Event of Default with respect to Borrower shall not be construed to be a waiver of any subsequent Default
or Event of Default by Borrower or to impair any remedy, right or power consequent thereon.


 


Section 16.2.          Modification,
Waiver in Writing.


 


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


 


Section 16.3.          Delay
Not a Waiver.


 


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


 


Section 16.4.          Waiver
of Trial by Jury.


 


TO THE EXTENT PERMITTED
BY APPLICABLE LAW, BORROWER AND LENDER, BY ACCEPTANCE OF THIS AGREEMENT, HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY
OR INDIRECTLY TO THE LOAN, THE APPLICATION FOR THE LOAN, THIS AGREEMENT, THE NOTE, THE SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS
OR ANY ACTS OR OMISSIONS OF LENDER OR BORROWER.


 



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Section 16.5.          Waiver
of Notice.


 


Borrower shall not be
entitled to any notices of any nature whatsoever from Lender except (a) with respect to matters for which this Agreement specifically
and expressly provides for the giving of notice by Lender to Borrower and (b) with respect to matters for which Lender is required
by Applicable Law to give notice, and Borrower hereby expressly waives the right to receive any notice from Lender with respect
to any matter for which this Agreement does not specifically and expressly provide for the giving of notice by Lender to Borrower.


 


Section 16.6.          [Intentionally
Omitted]


 


Section 16.7.          Marshalling
and Other Matters.


 


Borrower hereby waives,
to the extent permitted by Applicable Law, the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption
laws now or hereafter in force and all rights of marshalling in the event of any sale under the Security Instrument of the Property
or any part thereof or any interest therein. Further, Borrower hereby expressly waives any and all rights of redemption from sale
under any order or decree of foreclosure of the Security Instrument on behalf of Borrower, and on behalf of each and every person
acquiring any interest in or title to the Property subsequent to the date of the Security Instrument and on behalf of all persons
to the extent permitted by Applicable Law.


 


Section 16.8.          Waiver
of Statute of Limitations.


 


To the extent permitted
by Applicable Law, Borrower hereby expressly waives and releases to the fullest extent permitted by Applicable Law, the pleading
of any statute of limitations as a defense to payment of the Debt or performance of its obligations hereunder, under the Note,
Security Instrument or other Loan Documents.


 


Section 16.9.          Waiver
of Counterclaim. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action
or proceeding brought against it by Lender or its agents.


 


Section 16.10.                     Sole
Discretion of Lender. Wherever pursuant to this Agreement (a) Lender exercises any right given to it to approve or disapprove,
(b) any arrangement or term is to be satisfactory to Lender, or (c) any other decision or determination is to be made by Lender,
the decision to approve or disapprove all decisions that arrangements or terms are satisfactory or not satisfactory, and all other
decisions and determinations made by Lender, shall be in the sole discretion of Lender, except as may be otherwise expressly and
specifically provided herein.


 



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ARTICLE 17


 


MISCELLANEOUS


 


Section 17.1.           Survival.
This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant
hereto shall survive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue
in full force and effect so long as all or any of the Debt is outstanding and unpaid unless a longer period is expressly set forth
in this Agreement, the Security Instrument, the Note or the other Loan Documents. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed 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 benefit of the legal
representatives, successors and assigns of Lender.


 


Section 17.2.          Governing
Law.          THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK,
AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE
DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO 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 AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES
OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,
PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN
THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.
TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.


 



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(B) ANY LEGAL
SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER’S OPTION
BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM
NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:


 


TIMOTHY FITZGERALD

C/O BOND, SCHOENECK & KING, PLLC

350 Linden Oaks, Suite 310

Rochester, New York 14625


 


AS ITS AUTHORIZED
AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN
NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE
A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE
PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES
TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.]


 


Section 17.3.        Headings.
The Article and/or Section headings in this Agreement are included herein for convenience of reference only and shall not constitute
a part of this Agreement for any other purpose.


 


Section 17.4.         Severability.
Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under Applicable
Law, but if any provision of this Agreement shall be prohibited by or invalid under Applicable Law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions
of this Agreement.


 



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Section 17.5.       Preferences.
Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion
of the obligations of Borrower hereunder. To the extent Borrower makes a payment or payments to Lender, which payment or proceeds
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid
to a trustee, receiver or any other party under any Creditors’ Rights Laws, state or federal law, common law or equitable
cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied
shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender.


 


Section 17.6.      Expenses.
Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender within ten (10) Business Days of receipt
of written notice from Lender for all reasonable, out-of-pocket costs and expenses (including reasonable, actual attorneys’
fees and disbursements) reasonably incurred by Lender in accordance with this Agreement in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement, the Security Instrument, the Note and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower
(including without limitation any opinions requested by Lender as to any legal matters arising under this Agreement, the Security
Instrument, the Note and the other Loan Documents with respect to the Property); (ii) [intentionally omitted]; (iii) Lender’s
ongoing performance and compliance with all agreements and conditions contained in this Agreement, the Security Instrument, the
Note and the other Loan Documents on its part to be performed or complied with after the Closing Date; (iv) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement, the Security
Instrument, the Note and the other Loan Documents and any other documents or matters as are required herein or pursuant to the
other Loan Documents; (v) securing Borrower’s compliance with any requests made pursuant to the provisions of this Agreement;
(vi) the filing and recording fees and expenses, title insurance and reasonable fees and expenses of counsel for providing to
Lender all required legal opinions, and other similar expenses incurred in creating and perfecting the lien in favor of Lender
pursuant to this Agreement, the Security Instrument, the Note and the other Loan Documents; (vii) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation, in
each case against, under or affecting Borrower, this Agreement, the Security Instrument, the Note, the other Loan Documents, the
Property, or any other security given for the Loan; and (viii) enforcing any obligations of or collecting any payments due from
Borrower under this Agreement, the Security Instrument, the Note and the other Loan Documents or with respect to the Property
or in connection with any “special servicing” of the Loan or in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement in the nature of a “work-out” or of any insolvency or bankruptcy
proceedings (including, without limitation, loan servicing or special servicing fees, loan advances, and “work-out”
and/or liquidation fees which shall be customary loan servicing and/or special servicing fees applicable to the Loan, which such
servicing and special servicing fees shall be uniformly applied by Lender to borrowers with balance sheet loans); provided, however,
that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by reason of the
gross negligence, illegal acts, fraud or willful misconduct of Lender. In addition, if Borrower is undertaking a Restoration or
is performing any work at the Property that requires the obtaining of a building permit, then Borrower shall pay the reasonable
out-of-pocket costs of architect’s engineers and other consultants retained by Lender to review the performance of such
Restoration or work. Any amounts payable to Lender pursuant to this Section 17.6 shall become immediately due and payable upon
written demand and, if the same is not paid within ten (10) Business Days from such written demand, shall bear interest at the
Default Rate from the date which is five (5) Business Days from such written demand until the date such amounts have been paid.


 



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Section 17.7.          Cost
of Enforcement. In the event (a) that the Security Instrument is foreclosed in whole or in part, (b) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of Borrower or any of its constituent Persons or an assignment by Borrower
or any of its constituent Persons for the benefit of its creditors, or (c) Lender exercises any of its other remedies under this
Agreement, the Security Instrument, the Note and the other Loan Documents, Borrower shall be chargeable with and agrees to pay
all costs of collection and defense, including reasonable attorneys’ fees and costs, incurred by Lender or Borrower in connection
therewith and in connection with any appellate proceeding or post judgment action involved therein, together with all required
service or use taxes. Any amounts payable to Lender pursuant to this Section 17.7 shall become immediately due and payable upon
written demand and, if the same is not paid within ten (10) Business Days from such written demand, shall bear interest at the
Default Rate from the date which is ten (10) Business Days from such written demand until the date such amounts have been paid.


 


Section 17.8.          Exhibits
and Schedules Incorporated. The Exhibits and Schedules annexed hereto are hereby incorporated herein as a part of this Agreement
with the same effect as if set forth in the body hereof.


 


Section 17.9.          Offsets,
Counterclaims and Defenses. Any assignee of Lender’s interest in and to this Agreement, the Security Instrument, the
Note and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated
to such documents which Borrower may otherwise have against any assignor of such documents, and no such unrelated counterclaim
or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents
and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by Borrower.


 



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Section 17.10.         No
Joint Venture or Partnership; No Third Party Beneficiaries.


 


(a)          Borrower
and Lender intend that the relationships created under this Agreement, the Security Instrument, the Note and the other Loan Documents
be solely that of borrower and lender. Nothing herein or therein is intended to create a joint venture, partnership, tenancy-in-common,
or joint tenancy relationship between Borrower and Lender nor to grant Lender any interest in the Property other than that of
mortgagee, beneficiary or lender.This Agreement, the Security Instrument, the Note and the other Loan Documents are solely for
the benefit of Lender and Borrower and nothing contained in this Agreement, the Security Instrument, the Note or the other Loan
Documents shall be deemed to confer upon anyone other than Lender and Borrower any right to insist upon or to enforce the performance
or observance of any of the obligations contained herein or therein. All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction
of such conditions in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan in the absence
of strict compliance with any or all thereof and no other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s sole discretion,
Lender deems it advisable or desirable to do so.


 


(c)          The
general partners, members, principals and (if Borrower is a trust) beneficial owners of Borrower are experienced in the ownership
and operation of properties similar to the Property, and Borrower and Lender are relying solely upon such expertise and business
plan in connection with the ownership and operation of the Property. Borrower is not relying on Lender’s expertise, business
acumen or advice in connection with the Property.


 


(d)          Notwithstanding
anything to the contrary contained herein, Lender is not undertaking the performance of (i) any obligations under the Leases;
or (ii) any obligations with respect to such agreements, contracts, certificates, instruments, franchises, permits, trademarks,
licenses and other documents.


 


(e)          By
accepting or approving anything required to be observed, performed or fulfilled or to be given to Lender pursuant to this Agreement,
the Security Instrument, the Note or the other Loan Documents, including, without limitation, any officer’s certificate,
balance sheet, statement of profit and loss or other financial statement, survey, appraisal, or insurance policy, Lender shall
not be deemed to have warranted, consented to, or affirmed the sufficiency, the legality or effectiveness of same, and such acceptance
or approval thereof shall not constitute any warranty or affirmation with respect thereto by Lender.


 


(f)          Borrower
recognizes and acknowledges that in accepting this Agreement, the Note, the Security Instrument and the other Loan Documents,
Lender is expressly and primarily relying on the truth and accuracy of the representations and warranties set forth in Article
3 of this Agreement without any obligation to investigate the Property and notwithstanding any investigation of the Property by
Lender; that such reliance existed on the part of Lender prior to the date hereof, that the warranties and representations are
a material inducement to Lender in making the Loan; and that Lender would not be willing to make the Loan and accept the this
Agreement, the Note, the Security Instrument and the other Loan Documents in the absence of the warranties and representations
as set forth in Article 3 of this Agreement.


 



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Section
17.11.         Publicity. (a) All news releases, publicity or advertising
by Borrower or its Affiliates through any media intended to reach the general public which refers to this Agreement, the
Note, the Security Instrument or the other Loan Documents or the financing evidenced by this Agreement, the Note, the
Security Instrument or the other Loan Documents, to Lender or any of its Affiliates shall be subject to the prior written
approval of Lender, not to be unreasonably withheld, except to the extent such disclosure is required to comply with
Applicable Law.


 


(b) Borrower hereby agrees
that Lender and its affiliated entities, including, without limitation, Wells Fargo & Company and its subsidiaries, may publicly
identify details of the Loan in their respective advertising and public communications of all kinds, including, but not limited
to, press releases, direct mail, newspapers, magazines, journals, e-mail or internet advertising or communications. Such details
may include the name of the Property, the address of the Property, the amount of the Loan, the Closing Date, and a description
of the size and location of the Property.


 


Section 17.12.         Conflict;
Construction of Documents; Reliance. In the event of any conflict between the provisions of this Agreement and the Security
Instrument, the Note or any of the other Loan Documents, the provisions of this Agreement shall control. Wherever the phrase “during
the continuance of an Event of Default” or the like appears herein or in any other Loan Document, such phrase shall not
mean or imply that Lender has any obligation to accept a cure of such Event of Default. The parties hereto acknowledge that they
were represented by competent counsel in connection with the negotiation, drafting and execution of this Agreement, the Note,
the Security Instrument and the other Loan Documents and this Agreement, the Note, the Security Instrument and the other Loan
Documents shall not be subject to the principle of construing their meaning against the party which drafted same. Borrower acknowledges
that, with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into the Loan without
relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate of
Lender. Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under
this Agreement, the Note, the Security Instrument and the other Loan Documents or any other agreements or instruments which govern
the Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them
may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis
of the foregoing with respect to Lender’s exercise of any such rights or remedies. Borrower acknowledges that Lender engages
in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse-to
or competitive with the business of Borrower or its Affiliates.


 


Section 17.13.         Entire
Agreement. This Agreement, the Note, the Security Instrument and the other Loan Documents contain the entire agreement of
the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among
or between such parties, whether oral or written between Borrower and Lender are superseded by the terms of this Agreement, the
Note, the Security Instrument and the other Loan Documents.


 



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Section 17.14.         Liability.
If Borrower consists of more than one person, the obligations and liabilities of each such person hereunder shall be joint and
several. This Agreement shall be binding upon and inure to the benefit of Borrower and Lender and their respective successors
and assigns forever.


 


Section 17.15.         Duplicate
Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve
the other signatories from their obligations hereunder.


 


Section 17.16.         Contribution.


 


(a)          As
a result of the transactions contemplated by this Agreement and the other Loan Documents, each Borrower will benefit, directly
and indirectly, from each Borrower’s obligation to pay the Debt and perform its obligations hereunder and under the other
Loan Documents (collectively, the “Obligations”) and in consideration therefore each Borrower desires to enter
into an allocation and contribution agreement among themselves as set forth in this Section to allocate such benefits among themselves
and to provide a fair and equitable agreement to make contributions among each of Borrowers in the event any payment is made by
any individual Borrower hereunder to Lender (such payment being referred to herein as a “Contribution,”
and for purposes of this Section, includes any exercise of recourse by Lender against any Unit of a Borrower and application
of proceeds of such Unit in satisfaction of such Borrower’s obligations, to Lender under the Loan Documents).


 


(b)          Each
Borrower shall be liable hereunder with respect to the Obligations only for such total maximum amount (if any) that would not
render its Obligations hereunder or under any of the Loan Documents subject to avoidance under Section 548 of the Bankruptcy Code
or any comparable provisions of any state law.


 


(c)          In
order to provide for a fair and equitable contribution among Borrowers in the event that any Contribution is made by an individual
Borrower (a “Funding Borrower”), such Funding Borrower shall be entitled to a reimbursement Contribution (“Reimbursement
Contribution”) from all other Borrowers for all payments, damages and expenses incurred by that Funding Borrower in
discharging any of the Obligations, in the manner and to the extent set forth in this Section.


 


(d)          For
purposes hereof, the “Benefit Amount” of any individual Borrower as of any date of determination shall be the
net value of the benefits to such Borrower and its affiliates from extensions of credit made by Lender to (i) such Borrower and
(ii) to the other Borrowers hereunder and the Loan Documents to the extent such other Borrowers have guaranteed or mortgaged their
property to secure the Obligations of such Borrower to Lender.


 



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(e)       Each
Borrower shall be liable to a Funding Borrower in an amount equal to the greater of (i) the (A) ratio of the Benefit Amount of
such Borrower to the total amount of Obligations, multiplied by (B) the amount of Obligations paid by such Funding Borrower, or
(ii) ninety-five percent (95%) of the excess of the fair saleable value of the property of such Borrower over the total liabilities
of such Borrower (including the maximum amount reasonably expected to become due in respect of contingent liabilities) determined
as of the date on which the payment made by a Funding Borrower is deemed made for purposes hereof (giving effect to all payments
made by other Funding Borrowers as of such date in a manner to maximize the amount of such Contributions).


 


(f)          In
the event that at any time there exists more than one Funding Borrower with respect to any Contribution (in any such case, the
“Applicable Contribution”), then Reimbursement Contributions from other Borrowers pursuant hereto shall be
allocated among such Funding Borrowers in proportion to the total amount of the Contribution made for or on account of the other
Borrowers by each such Funding Borrower pursuant to the Applicable Contribution. In the event that at any time any Borrower pays
an amount hereunder in excess of the amount calculated pursuant to this Section above, that Borrower shall be deemed to be a Funding
Borrower to the extent of such excess and shall be entitled to a Reimbursement Contribution from the other Borrowers in accordance
with the provisions of this Section.


 


(g)          Each
Borrower acknowledges that the right to Reimbursement Contribution hereunder shall constitute an asset in favor of Borrower to
which such Reimbursement Contribution is owing.


 


(h)          No
Reimbursement Contribution payments payable by a Borrower pursuant to the terms of this Section shall be paid until all amounts
then due and payable by all of Borrowers to Lender, pursuant to the terms of the Loan Documents, are paid in full in cash. Nothing
contained in this Section shall limit or affect in any way the Obligations of any Borrower to Lender under the Loan Documents.


 


(i)           To
the extent permitted by applicable law, each Borrower waives:


 


(i)          any
right to require Lender to proceed against any other Borrower or any other person or to proceed against or exhaust any security
held by Lender at any time or to pursue any other remedy in Lender’s power before proceeding against Borrower;


 


(ii)         any
defense based upon any legal disability or other defense of any other Borrower, any guarantor of any other person or by reason
of the cessation or limitation of the liability of any other Borrower or any guarantor from any cause other than full payment
of all sums payable under the Loan Documents;


 


(iii)        any
defense based upon any lack of authority of the officers, directors, partners or agents acting or purporting to act on behalf
of any other Borrower or any principal of any other Borrower or any defect in the formation of any other Borrower or any principal
of any other Borrower;


 



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(iv)        any
defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount
nor in any other respects more burdensome than that of a principal;


 


(v)         any
defense based upon any failure by Lender to obtain collateral for the indebtedness or failure by Lender to perfect a lien on any
collateral;


 


(vi)        presentment,
demand, protest and notice of any kind;


 


(vii)       any
defense based upon any failure of Lender to give notice of sale or other disposition of any collateral to any other Borrower or
to any other person or entity or any defect in any notice that may be given in connection with any sale or disposition of any
collateral;


 


(viii)      any
defense based upon any failure of Lender to comply with applicable laws in connection with the sale or other disposition of any
collateral, including any failure of Lender to conduct a commercially reasonable sale or other disposition of any collateral;


 


(ix)         any
defense based upon any use of cash collateral under Section 363 of the Bankruptcy Code;


 


(x)          any
defense based upon any agreement or stipulation entered into by Lender with respect to the provision of adequate protection in
any bankruptcy proceeding;


 


(xi)         any
defense based upon any borrowing or any grant of a security interest under Section 364 of the Bankruptcy Code;


 


(xii)        any
defense based upon the avoidance of any security interest in favor of Lender for any reason;


 


(xiii)       any
defense based upon any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding,
including any discharge of, or bar or stay against collecting, all or any of the obligations evidenced by the Note or owing under
any of the Loan Documents;


 


(xiv)      any
defense or benefit based upon Borrower’s, or any other party’s, resignation of the portion of any obligation secured
by the Security Instrument to be satisfied by any payment from any other Borrower or any such party;


 


(xv)       all
rights and defenses arising out of an election of remedies by Lender even though the election of remedies, such as non-judicial
foreclosure with respect to security for the Loan or any other amounts owing under the Loan Documents, has destroyed Borrower’s
rights of subrogation and reimbursement against any other Borrower; and


 



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(xvi) all rights
and defenses that Borrower may have because any of Debt is secured by real property. This means, among other things (subject to
the other terms and conditions of the Loan Documents): (1) Lender may collect from Borrower without first foreclosing on any real
or personal property collateral pledged by any other Borrower, and (2) if Lender forecloses on any real property collateral pledged
by any other Borrower, (I) the amount of the Debt may be reduced only by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price and (II) Lender may collect from Borrower even if any other Borrower,
by foreclosing on the real property collateral, has destroyed any right Borrower may have to collect from any other Borrower.
This is an unconditional and irrevocable waiver of any rights and defenses Borrower may have because any of the Debt is secured
by real property; and except as may be expressly and specifically permitted herein, any claim or other right which Borrower might
now have or hereafter acquire against any other Borrower or any other person that arises from the existence or performance of
any obligations under the Loan Documents, including any of the following: (1) any right of subrogation, reimbursement, exoneration,
contribution, or indemnification; or (2) any right to participate in any claim or remedy of Lender against any other Borrower
or any collateral security therefor, whether or not such claim, remedy or right arises in equity or under contract, statute or
common law.


 


(j)          Each
Borrower hereby restates and makes the waivers made by Guarantor in the Guaranty for the benefit of Lender. Such waivers are hereby
incorporated by reference as if fully set forth herein (and as if applicable to each Borrower) and shall be effective for all
purposes under the Loan (including, without limitation, in the event that any Borrower is deemed to be a surety or guarantor of
the Debt (by virtue of each Borrower being co-obligors and jointly and severally liable hereunder, by virtue of each Borrower
encumbering its interest in the Property for the benefit or debts of the other Borrowers in connection herewith or otherwise)).


 


Section 17.17.         Cross-Default;
Cross-Collateralization


 


(a)          Borrower
acknowledges that Lender has made the Loan to Borrower upon the security of its collective interest in the Properties and in reliance
upon the aggregate of the Properties taken together being of greater value as collateral security than the sum of each Individual
Property taken separately. Borrower agrees that each of the Loan Documents (including, without limitation, the Security Instruments)
are and will be cross-collateralized and cross-defaulted with each other so that (i) an Event of Default under any of Loan Documents
shall constitute an Event of Default under each of the other Loan Documents; (ii) an Event of Default hereunder shall constitute
an Event of Default under each Security Instrument; (iii) each Security Instrument shall constitute security for the Note as if
a single blanket lien were placed on all of the Properties as security for the Note; and (iv) such cross-collateralization shall
in no event be deemed to constitute a fraudulent conveyance and Borrower waives any claims related thereto.


 



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(b)          To
the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives all rights to a marshalling of
the assets of Borrower, Borrower’s partners and others with interests in Borrower, and of the Properties, or to a sale in
inverse order of alienation in the event of foreclosure of all or any of the Security Instruments, and agrees not to assert any
right under any laws pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Lender under
the Loan Documents to a sale of the Properties for the collection of the Debt without any prior or different resort for collection
or of the right of Lender to the payment of the Debt out of the net proceeds of the Properties in preference to every other claimant
whatsoever. In addition, Borrower, for itself and its successors and assigns, waives in the event of foreclosure of any or all
of the Security Instruments, any equitable right otherwise available to Borrower which would require the separate sale of the
Properties or require Lender to exhaust its remedies against any Individual Property or any combination of the Properties before
proceeding against any other Individual Property or combination of Properties; and further in the event of such foreclosure Borrower
does hereby expressly consent to and authorize, at the option of Lender, the foreclosure and sale either separately or together
of any combination of the Properties.


 


Section 17.18.         Special
Missouri Notice. The following notice is provided pursuant to Section 432.045 of the Missouri Revised Statutes:


 


Oral agreements or commitments
to loan money, extend credit or to forbear from enforcing repayment of a debt including promises to extend or renew such debt
are not enforceable. To protect you (borrower) and us (lender) from misunderstanding or disappointment, any agreements we reach
covering such matters are contained in this Loan Agreement and the other Loan Documents, which is the complete and exclusive statement
of the agreement between you and us, except as we may later agree in writing to modify it.


 


[NO FURTHER TEXT ON THIS PAGE]


 



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


 


	 	BORROWER:
	 	 
	 	ARC3 FEBMTNH001, LLC, a
    Delaware limited 

liability company
	 	 
	 	By:	/s/ William M. Kahane
	 	Name: William M. Kahane
	 	Title: President


 


[SIGNATURES CONTINUE ON FOLLOWING PAGE]


 


Loan Agreement — Signature Page




  



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	 	BORROWER:
	 	 
	 	ARC3 ESBKYM0001, LLC, a Delaware limited
	 	liability company
	 	 
	 	By:	/s/ William M. Kahane
	 	Name: William M. Kahane
	 	Title: President


 


[SIGNATURES CONTINUE ON
FOLLOWING PAGE]


 


Loan Agreement — Signature Page 


 



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	 	LENDER:
	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION
	 	 
	 	By:	/s/ Jeffrey Cirrilo
	 	Name: Jeffrey L. Cirrilo
	 	Title:   Director


 


Loan Agreement — Signature Page 


 



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EXHIBIT A


 


ADDITIONAL DEFINITIONS


 


“Actual Debt Service Coverage Ratio”
shall mean as of the last day of the calendar month immediately preceding the applicable date of calculation, the quotient obtained
by dividing (1) the Adjusted Net Cash Flow by (2) the aggregate principal and interest projected to be due and payable over the
twelve (12) month period subsequent to the date of calculation and a 30-year amortization period. Borrower shall deliver to Lender
such information as is reasonably required for Lender to make all applicable calculations. Lender’s calculation of the Actual
Debt Service Coverage Ratio, and all component calculations, shall be conclusive and binding on Borrower absent manifest error.


 


“Adjusted Net Cash Flow”
shall mean Underwritten NOI minus (a) normalized tenant improvement and leasing commission expenditures equal to $0.81 per square
foot per annum, and (b) normalized capital improvements equal to $0.18 per square foot per annum.


 


“Underwritten NOI” shall
mean Underwritten EGI minus Underwritten Operating Expenses.


 


INCOME


 


“Underwritten EGI” shall
mean Net Rental Income plus Other Income minus Bad Debt and Rent Concessions.


 


“Net Rental Income” shall
mean Gross Potential Rent plus Expense Reimbursements minus Vacancy Deduction plus Percentage Rent.


 


“Gross Potential Rent”
shall mean gross potential rent, computed in accordance with accounting principles reasonably acceptable to Lender, based on the
most recent rent roll annualized, which should include (a) effective rent for occupied space (that is, actual rent collected from
tenants in actual physical occupancy pursuant to valid Leases (which may be adjusted downward by Lender to reflect market rents),
provided that to the extent a particular tenant is either in a scheduled rent concession period at the time of determination or
has a rent concession period scheduled in the future, such tenant’s annualized rent may be adjusted by Lender in its reasonable
discretion to reflect a normalized annualized amount unless no future rent is scheduled to be received from such tenant in which
case no rent will be included for such tenant) and (b) market rents for vacant space.


 


“Expense Reimbursements”
shall mean expense reimbursements as determined from the most recent operating statement, to the extent deemed recurring and sustainable,
determined on a trailing 12-month basis (which should include actual expense reimbursements for occupied space and market expense
reimbursements for vacant space and newly-leased space); provided, however, that (a) total Expense Reimbursements cannot exceed
one hundred percent (100%) of Borrower’s actual Operating Expenses, and (b) if the Underwritten Expenses are used for determination
of Operating Expenses, then Lender’s underwritten gross potential expense reimbursements will be used, which equal $141,664.00.


 



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“Vacancy Deduction” shall
be determined by multiplying Gross Potential Rent and Expense Reimbursements by the greatest of (a) the actual vacancy at the
Property at the time of determination, (b) the then-prevailing market vacancy in the vicinity of the Property, and (c) an imputed
vacancy rate of 8.0%.


 


“Percentage Rent” shall
mean percentage rent as determined from the most recent operating statement, to the extent deemed recurring and sustainable, determined
on a trailing 12-month basis; provided, however, that for any particular tenant, the aggregate annual rent (including percentage
rent) attributed to such tenant cannot exceed market rent.


 


“Other Income” shall mean
all other applicable income as determined from the most recent operating statement for the Property at the time of determination,
to the extent such income is deemed recurring and sustainable, determined on a trailing 12-month basis, computed in accordance
with accounting principles reasonably acceptable to Lender, including, without limitation (and without duplication), parking income,
cellular tower income, vending income and other similar items. Notwithstanding the foregoing, Other Income will not include Insurance
Proceeds (other than proceeds of rent loss, business interruption or other similar insurance allocable to the applicable period);
Condemnation Proceeds (other than Condemnation Proceeds arising from a temporary taking or the use and occupancy of all or part
of the applicable Property allocable to the applicable period); proceeds of any financing; proceeds of any sale, exchange or transfer
of the Property or any part thereof or interest therein (including proceeds of any sales of furniture, fixtures and equipment);
capital contributions or loans to Borrower or an Affiliate of Borrower; any item of income otherwise includable in Other Income
but paid directly by any tenant to a Person other than Borrower; any other extraordinary, non-recurring revenues; payments paid
by or on behalf of any tenant under a Lease which is the subject of any proceeding or action relating to its bankruptcy, reorganization
or other arrangement pursuant to the Bankruptcy Code or any similar federal or state law or which has been adjudicated a bankrupt
or insolvent unless such Lease has been affirmed by the trustee in such proceeding or action pursuant to a final, non-appealable
order of a court of competent jurisdiction; payments paid by or on behalf of any tenant under a Lease the demised premises of
which are not occupied either by such tenant or an affiliate or sublessee thereof; payments paid by or on behalf of any tenant
under a Lease in whole or partial consideration for the termination of any Lease; sales tax rebates from any Governmental Authority;
sales, use and occupancy taxes on receipts required to be accounted for by Borrower to any Governmental Authority; refunds and
uncollectible accounts; interest income from any source; unforfeited security deposits, utility and other similar deposits; income
from tenants not paying rent; or any disbursements to Borrower from the Reserve Funds.


 


“Bad Debt” shall mean bad
debt determined on a trailing 12-month basis.


 



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“Rent Concessions” shall
mean any remaining rent concessions for the Leases used to determine Gross Potential Rent (other than any concessions already
accounted for in the determination of Gross Potential Rent above) to the extent such rent concessions relate to the forward 12-month
period at the time of determination.


 


EXPENSE


 


“Underwritten Operating Expenses”
shall mean projected annualized Operating Expenses based on a trailing 12-month period adjusted upwards or downwards in Lender’s
reasonable discretion by anticipated changes in Operating Expenses.


 


“Operating Expenses” shall
mean the greater of (a) all expenses, computed in accordance with accounting principles reasonably acceptable to Lender, of whatever
kind and from whatever source, relating to the ownership, operation, repair, maintenance and management of the Property that are
incurred on a regular monthly or other periodic basis, including, without limitation (and without duplication): Taxes (based on
the most current bill annualized, subject to adjustment by Lender to take into account any change in assessment that has not yet
been reflected in the most current tax bill); Insurance Premiums (based on the most current premium annualized); management fees
(whether or not actually paid) equal to the greater of the actual management fees or 3% of Underwritten EGI; costs attributable
to the ordinary operation, repair and maintenance of the Improvements; common area maintenance costs; advertising and marketing
expenses; professional fees; license fees; general and administrative costs and expenses; utilities; payroll, benefits and related
taxes and expenses; janitorial expenses; computer processing charges; operating equipment or other lease payments as approved
by Lender; ground lease payments; bond assessments; and other similar costs and expenses; in each instance, unless otherwise noted,
only to the extent actually paid for by Borrower (the foregoing expenses being referred to herein as “Actual Operating
Expenses”), or (b) Lender’s underwritten operating expenses at the time of closing (“Underwritten Expenses”),
which equal $153,807.00. Notwithstanding the foregoing, Operating Expenses shall not include debt service (including principal,
interest, impounds and other reserves), capital expenditures, tenant improvement costs, leasing commissions or other expenses
which are paid from escrows required by the Loan Documents; any payment or expense for which Borrower was or is to be reimbursed
from proceeds of the loan or insurance or by any third party; federal, state or local income taxes; any non-cash charges such
as depreciation and amortization; and any item of expense otherwise includable in Operating Expenses which is paid directly by
any tenant except real estate taxes paid directly to any taxing authority by any tenant.


 


In making the calculations described herein,
applicable line items may be adjusted by Lender in its reasonable discretion (a) to accurately reflect the amounts of any extraordinary
non-recurring items in the relevant period and to reflect on a pro rata basis those items on an annual or semi-annual basis and
(b) to reflect Leases (and projected changes to the applicable line items above) which are either (i) anticipated to terminate
within the 90 days of the date of calculation or (ii) executed with creditworthy tenants with rent commencement dates scheduled
to occur within 90 days of the date of calculation.


 



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