Unassociated Document


    EXHIBIT
10.29

     

     

    
      	MORTGAGE AND SECURITY AGREEMENT	UNITED STATES OF AMERICA
	 	 
	 	STATE OF LOUISIANA
	 	 
	 	COUNTY/PARISH OF ST.
CHARLES


    

     

     

    
      	BY:	LVP GULF COAST INDUSTRIAL PORTFOLIO LLC
	 	 
	
              IN FAVOR
    OF:

            	
              WACHOVIA BANK, NATIONAL
      ASSOCIATION

            


    

     

    BE IT KNOWN, that on
the 31st day of January, 2007, to be effective on February 1, 2007, before me,
the undersigned Notary Public, duly commissioned and qualified in and for the
State Parish aforesaid, of LVP Gulf Coast Industrial Portfolio LLC, and in the
presence of the undersigned competent witnesses, personally came and
appeared:

    


    LVP GULF COAST INDUSTRIAL PORTFOLIO
LLC, a
Delaware limited liability company, having a mailing address c/o
The Lightstone Group, 326 Third Street, Lakewood, New Jersey 08701, last
four digits of taxpayer identification numbers of 5292, appearing herein through
Michael Schurer, its Vice President and duly authorized representative pursuant
to a resolution of its members and managers, a certified copy of which is
attached hereto (the “Mortgagor”).

    


    WHO AFTER BEING DULY SWORN DECLARED
AS FOLLOWS:

     

     

    Sealy
Fixed Portfolio C

    Loan No.
50-2859389

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    W I T N E
S S E T H:

     

    WHEREAS,
Lender has authorized a loan (hereinafter referred to as the “Loan”) to the
Delaware limited liability companies listed on Schedule 1 annexed hereto
(hereinafter collectively, "Borrower") in the
maximum principal sum of FIFTY THREE MILLION TWENTY FIVE THOUSAND AND NO/100
DOLLARS (53,025,000.00) (hereinafter referred to as the “Loan
Amount”), which
Loan is evidenced by that certain promissory note, dated the date hereof
(together with any supplements, amendments, modifications or extensions thereof,
hereinafter referred to as the “Note”) given
by Borrower, as maker, to Lender, as payee;

     

    WHEREAS,
in consideration of the Loan, Mortgagor has agreed to make payments in amounts
sufficient to pay and redeem, and provide for the payment and redemption of the
principal of, premium, if any, and interest on the Note when due;

     

    WHEREAS,
Mortgagor desires by this Mortgage and Security Agreement (this "Security
Instrument") to provide for, among other things, the issuance of the Note and
for the mortgage by Mortgagor with, and the creation of a security interest in
favor of, Lender, as security for Mortgagor’s obligations to Lender from time to
time pursuant to the Note and the other Loan Documents, but specifically
excluding the Indemnity and Guaranty (as hereinafter defined); and

     

    WHEREAS,
Mortgagor and Lender intend these recitals to be a material part of this
Security Instrument.

     

    WHEREAS,
all things necessary to make this Security Instrument the valid and legally
binding obligation of Mortgagor in accordance with its terms, for the uses and
purposes herein set forth, have been done and performed. 

     

    NOW
THEREFORE, to secure the payment of the principal of, prepayment premium (if
any) and interest on the Note and all other obligations, liabilities or sums due
or to become due under, or advanced in accordance herewith to protect the
security of, this Security Instrument, the Note or any other Loan Document,
including, without limitation, interest on said obligations, liabilities or sums
(said principal, premium, interest and other sums being hereinafter referred to
as the “Debt”), and
the performance of all other covenants, obligations and liabilities of Borrower
pursuant to the Loan Documents but specifically excluding the Indemnity and
Guaranty, and any and all other indebtedness now owing or which may hereafter be
owing by Borrower to Lender, now existing or hereafter coming into existence,
however and whenever incurred or evidenced, whether express or implied, direct
or indirect, absolute or contingent, or due or to become due, and all renewals,
modifications, consolidations, replacements and extensions thereof (together
with the Debt, collectively, the “Secured
Indebtedness” or
“secured
indebtedness”) FOR
THE PURPOSE OF SECURING THE SECURED INDEBTEDNESS OUTSANDING AT ANY TIME AND FROM
TIME TO TIME UP TO THE MAXIMUM AMOUNT OF FIFTY THREE MILLION TWNETY FIVE
THOUSAND AND NO/100 ($53,025,000.00) (THE “MAXIMUM AMOUNT”), Mortgagor has
executed and delivered this Security Instrument; and Mortgagor hereby
irrevocably mortgages, affects and hypothecates, pledges, collaterally assigns
and grants a continuing security interest upon, unto and in favor of Lender and
its successors and assigns all right, title and interest of Mortgagor in and to
all of the following property, rights, interests and estates, whether now owned
or hereafter acquired, together with the rights, privileges and appurtenances
thereto belonging, to the full extent that such property is susceptible of
mortgage under the Louisiana Civil Code, Louisiana Revised Statutes, and other
provisions of Louisiana law, grants a continuing security interest in favor of
Lender and its successors and assigns, as secured party, in all property and
rights described below as part of the Property (as defined below), whether now
owned or hereafter acquired, that are susceptible of a security interest under
Chapter 9 of the Louisiana Commercial Laws, La. R.S. § 10:9-101 et seq. or any
other provision of Louisiana law, and does further affect, hypothecate,
collaterally assign, and pledge unto and in favor of Lender and its successors
and assigns, as collateral assignee, all the present and future rents, as well
as all other property and rights described below as part of the Property (as
defined below), whether now owned or hereafter acquired, that are susceptible of
collateral assignment under La. R.S. § 9:4401, § 9:5386, or any other provision
of Louisiana law (collectively, the “Property”):

     

    
      
        
        

      

      
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    (a) the
plot(s), piece(s) or parcel(s) of real property described in Exhibits A -1 through Exhibit A-10
attached
hereto and made a part hereof (individually and collectively, hereinafter
referred to as the “Premises”);

     

    (b) (i) all
buildings, component parts, foundations, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
of every kind or nature now or hereafter located on the Premises (hereinafter
collectively referred to as the “Improvements”); and
(ii) to the extent permitted by law, the name or names, if any, as may now
or hereafter be used for each Improvement, and the goodwill associated
therewith;

     

    (c) all
easements, servitudes, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
ditches, ditch rights, reservoirs and reservoir rights, air rights and
development rights, lateral support, drainage, gas, oil and mineral rights,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
belonging, relating or pertaining to the Premises or the Improvements and the
reversion and reversions, remainder and remainders, whether existing or
hereafter acquired, and all land lying in the bed of any street, road or avenue,
opened or proposed, in front of or adjoining the Premises to the center line
thereof and any and all sidewalks, drives, curbs, passageways, streets, spaces
and alleys adjacent to or used in connection with the Premises and/or
Improvements and all the estates, rights, titles, interests, property,
possession, claim and demand whatsoever, both in law and in equity, of Mortgagor
of, in and to the Premises and Improvements and every part and parcel thereof,
with the appurtenances thereto;

     

    (d) all
machinery, equipment, fittings, apparatus, appliances, furniture, furnishings,
tools, fixtures (including, but not limited to, all heating, air conditioning,
ventilating, waste disposal, sprinkler and fire and theft protection equipment,
plumbing, lighting, communications and elevator fixtures) and other property of
every kind and nature whatsoever owned by Mortgagor, or in which Mortgagor has
or shall have an interest, now or hereafter located upon, or in, and located on
the Premises or the Improvements, or appurtenant thereto, and all building
equipment, materials and supplies of any nature whatsoever owned by Mortgagor,
or in which Mortgagor has or shall have an interest, now or hereafter located
upon, or in the Premises or the Improvements or appurtenant thereto
(hereinafter, all of the foregoing items described in this paragraph (d), along
with all replacement and additional items installed as contemplated in Section
8.01(e), are collectively called the “Equipment”), all
of which, and any replacements, modifications, alterations and additions
thereto, to the extent permitted by applicable law, shall be deemed to
constitute fixtures (herein, collectively, the “Fixtures”), and
are part of the real estate and security for the payment of the Debt and the
performance of Mortgagor’s obligations. To the extent any portion of the
Equipment is not real property or Fixtures under applicable law, it shall be
deemed to be personal property, and this Security Instrument shall constitute a
security agreement creating a security interest therein in favor of Lender under
the UCC;

     

    
      
        
        

      

      
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    (e) all
awards or payments, including interest thereon, which may hereafter be made with
respect to the Premises, the Improvements, the Fixtures, or the Equipment,
whether from the exercise of the right of eminent domain (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
said right), or for a change of grade, or for any other injury to or decrease in
the value of the Premises, the Improvements or the Equipment or refunds with
respect to the payment of property taxes and assessments, and all other proceeds
of the conversion, voluntary or involuntary, of the Premises, Improvements,
Equipment, Fixtures or any other Property or part thereof into cash or
liquidated claims;

     

    (f) all
leases, tenancies, licenses and other agreements affecting the use, enjoyment or
occupancy of the Premises, the Improvements, the Fixtures, or the Equipment or
any portion thereof now or hereafter entered into, whether before or after the
filing by or against Mortgagor of any petition for relief under the Bankruptcy
Code and all reciprocal easement agreements and license agreements (hereinafter
collectively referred to as the “Leases”),
together with all cash or security deposits, lease termination payments, advance
rentals and payments of similar nature and guarantees or other security held by,
or issued in favor of, Mortgagor in connection therewith to the extent of
Mortgagor’s right or interest therein and all remainders, reversions and other
rights and estates appurtenant thereto, and all base, fixed, percentage or
additional rents, and other rents, oil and gas or other mineral royalties, and
bonuses, issues, profits and rebates and refunds or other payments made by any
Governmental Authority from or relating to the Premises, the Improvements, the
Fixtures or the Equipment plus all rents, common area charges and other payments
now existing or hereafter arising, whether paid or accruing before or after the
filing by or against Mortgagor of any petition for relief under the Bankruptcy
Code (herein, collectively, the “Rents”) and
all proceeds from the sale or other disposition of the Leases and the right to
receive and apply the Rents to the payment of the Debt;

     

    (g) all
proceeds of and any unearned premiums on any insurance policies covering the
Premises, the Improvements, the Fixtures, the Rents or the Equipment, including,
without limitation, the right to receive and apply the proceeds of any
insurance, judgments, or settlements made in lieu thereof, for damage to the
Premises, the Improvements, the Fixtures or the Equipment and all refunds or
rebates of Impositions, and interest paid or payable with respect
thereto;

     

    
      
        
        

      

      
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    (h) all
deposit accounts, securities accounts, funds or other accounts maintained or
deposited with Lender, or its assigns, in connection herewith, including,
without limitation, the Security Deposit Account (to the extent permitted by
law), the Engineering Escrow Account, the Central Account, the Basic Carrying
Costs Sub-Account, the Basic Carrying Costs Escrow Account, the Debt Service
Payment Sub-Account, the Recurring Replacement Reserve Sub-Account, the
Recurring Replacement Reserve Escrow Account, the Reletting Reserve Sub-Account,
the Reletting Reserve Escrow Account, the Operation and Maintenance Expense
Sub-Account, the Operation and Maintenance Expense Escrow Account, the
Curtailment Reserve Escrow Account, the Curtailment Reserve Sub-Account, and all
monies and investments deposited or to be deposited in such
accounts;

     

    (i) all
accounts receivable, contract rights, franchises, interests, estate or other
claims, both at law and in equity, now existing or hereafter arising, and
relating to the Premises, the Improvements, the Fixtures or the Equipment, not
included in Rents;

     

    (j) all now
existing or hereafter arising claims against any Person with respect to any
damage to the Premises, the Improvements, the Fixtures or the Equipment,
including, without limitation, damage arising from any defect in or with respect
to the design or construction of the Improvements, the Fixtures or the Equipment
and any damage resulting therefrom;

     

    (k) all
deposits or other security or advance payments, including rental payments now or
hereafter made by or on behalf of Mortgagor to others, with respect to (i)
insurance policies, (ii) utility services, (iii) cleaning, maintenance, repair
or similar services, (iv) refuse removal or sewer service, (v) parking or
similar services or rights and (vi) rental of Equipment, if any, relating to or
otherwise used in the operation of the Premises, the Improvements, the Fixtures
or the Equipment;

     

    (l) all
intangible property now or hereafter relating to the Premises, the Improvements,
the Fixtures or the Equipment or its operation, including, without limitation,
software, letter of credit rights, trade names, trademarks (including, without
limitation, any licenses of or agreements to license trade names or trademarks
now or hereafter entered into by Mortgagor), logos, building names and
goodwill;

     

    (m) all now
existing or hereafter arising advertising material, guaranties, warranties,
building permits, other permits, licenses, plans and specifications, shop and
working drawings, soil tests, appraisals and other documents, materials and/or
personal property of any kind now or hereafter existing in or relating to the
Premises, the Improvements, the Fixtures, and the Equipment;

     

    (n) all now
existing or hereafter arising drawings, designs, plans and specifications
prepared by architects, engineers, interior designers, landscape designers and
any other consultants or professionals for the design, development,
construction, repair and/or improvement of the Property, as amended from time to
time;

     

    
      
        
        

      

      
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    (o) the
right, in the name of and on behalf of Mortgagor, to appear in and defend any
now existing or hereafter arising action or proceeding brought with respect to
the Premises, the Improvements, the Fixtures or the Equipment as set forth
herein and to commence any action or proceeding to protect the interest of
Lender in the Premises, the Improvements, the Fixtures or the Equipment as set
forth herein;

     

    (p) all
agreements, grants of easements and/or rights-of-way, reciprocal easement
agreements, permits, declarations of covenants, conditions and restrictions,
disposition and development agreements, planned unit development agreements,
management or parking agreements, party wall agreements or other instruments
affecting the Property and all proceeds or income received with respect thereto;
and

     

    (q) all
proceeds, products, substitutions and accessions (including claims and demands
therefor) of each of the foregoing.

     

    (r) all
unearned premiums under insurance policies now or subsequently obtained by
Mortgagor relating to the Premises or Improvements and Mortgagor’s interest in
and to all such insurance policies and all proceeds of any such insurance
policies (including title insurance policies) including the right to collect and
receive such proceeds, subject to the provisions relating to insurance generally
set forth below; and all awards and other compensation, including the interest
payable thereon and the right to collect and receive the same, made to the
present or any subsequent owner of the Premises or Improvements for the taking
by eminent domain, condemnation or otherwise, of all or any part of the Premises
or any servitude, easement or other right therein; and with respect to the
proceeds referred to above, this Security Instrument is a collateral assignment
thereof pursuant to Louisiana Revised Statutes 9:5386, et seq., whether such
proceeds or any of them now exist or arise in the future, and the Mortgagor does
hereby irrevocably make, constitute and appoint the Lender and the agents of the
Lender as the true and lawful mandataries and attorneys-in-fact of Mortgagor to
carry out and enforce all of the Mortgagor's right, title and interest in and to
any or all of the proceeds hereby collaterally assigned. The collateral
assignment herein made of the proceeds shall not be construed as imposing upon
the Lender any obligations with respect thereto unless and until the Lender
shall become the absolute owner thereof and the Mortgagor shall have been wholly
dispossessed thereof.

     

     

    All of
the foregoing items (a) through (q), together with all of the right, title and
interest of Mortgagor therein, are collectively referred to as the “Property”.

     

    AND
Mortgagor covenants with and warrants to Lender that:

     

    ARTICLE
I:   DEFINITIONS

     

    Section
1.01.   Certain
Definitions. 

     

    For all
purposes of this Security Instrument, except as otherwise expressly provided or
unless the context clearly indicates a contrary intent:

     

    
      
        
        

      

      
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    (i) the
capitalized terms defined in this Section have the meanings assigned to them in
this Section, and include the plural as well as the singular;

     

    (ii) all
accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with GAAP; and

     

    (iii) the words
“herein”, “hereof”, and “hereunder” and other words of similar import refer to
this Security Instrument as a whole and not to any particular Section or other
subdivision.

     

    “Adjusted Net Cash
Flow” shall
mean on any determination date, the Pro-Forma Net Operating Income less (a) the
Recurring Replacement Monthly Installment for all of the Cross-collateralized
Properties multiplied by twelve (12), (b) the Reletting Reserve Monthly
Installment for all of the Cross-collateralized Properties multiplied by twelve
(12), and (c) Net Capital Expenditures for all of the Cross-collateralized
Properties to be incurred (as estimated by Lender, in its reasonable discretion)
for the subsequent twelve (12) month period. The Adjusted Net Cash Flow shall be
calculated by Lender in accordance with the terms of this Security
Instrument.

     

    “Affiliate” of any
specified Person shall mean any other Person directly or indirectly Controlling
or Controlled by or under direct or indirect common Control with such specified
Person.

     

    “Allocated Loan
Amount” shall
mean the portion of the Loan Amount allocated to each Individual Property as set
forth on Exhibit F annexed hereto and made a part hereof.

     

    “Annual
Budget” shall
mean an annual budget submitted by Mortgagor to Lender in accordance with the
terms of Section 2.09 hereof.

     

    “Appraisal” shall
mean the appraisal of the Property and all supplemental reports or updates
thereto previously delivered to Lender in connection with the Loan.

     

    “Appraiser” shall
mean the Person who prepared the Appraisal.

     

    “Approved Annual
Budget” shall
mean each Annual Budget approved by Lender in accordance with terms
hereof.

     

    “Approved Manager
Standard” shall
mean the standard of business operations, practices and procedures customarily
employed by entities which possess the Minimum Manager Credentials.

     

    “Architect” shall
have the meaning set forth in Section 3.04(b)(i) hereof.

     

    “Assignment” shall
mean the Assignment of Leases and Rents and Security Deposits of even date
herewith relating to the Property given by Mortgagor to Lender.

     

    
      
        
        

      

      
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    “Bank” shall
mean the bank, trust company, savings and loan association or savings bank
designated by Lender, in its sole and absolute discretion, in which the Central
Account shall be located.

     

    “Bankruptcy
Code” shall
mean 11 U.S.C. §101 et seq., as amended from time to time.

     

    “Basic Carrying
Costs” shall
mean the sum of the following costs associated with the Property: (a) Real
Estate Taxes and (b) insurance premiums.

     

    “Basic Carrying Costs Escrow
Account” shall
mean the Escrow Account maintained pursuant to Section 5.06 hereof.


     

    “Basic Carrying Costs Monthly
Installment” shall
mean Lender’s reasonable estimate of one-twelfth (1/12th) of the annual amount
for Basic Carrying Costs. “Basic Carrying Costs Monthly Installment” shall also
include, if required by Lender, a sum of money which, together with such monthly
installments, will be sufficient to make the payment of each such Basic Carrying
Cost at least thirty (30) days prior to the date initially due. Should such
Basic Carrying Costs not be ascertainable at the time any monthly deposit is
required to be made, the Basic Carrying Costs Monthly Installment shall be
determined by Lender in its reasonable discretion on the basis of the aggregate
Basic Carrying Costs for the prior Fiscal Year or month or the prior payment
period for such cost. As soon as the Basic Carrying Costs are fixed for the then
current Fiscal Year, month or period, the next ensuing Basic Carrying Costs
Monthly Installment shall be adjusted to reflect any deficiency or surplus in
prior monthly payments. If at any time during the term of the Loan Lender
determines that there will be insufficient funds in the Basic Carrying Costs
Escrow Account to make payments when they become due and payable, Lender shall
have the right to adjust the Basic Carrying Costs Monthly Installment such that
there will be sufficient funds to make such payments.

     

    “Basic Carrying Costs
Sub-Account” shall
mean the Sub-Account of the Central Account established pursuant to Section 5.02
into which the Basic Carrying Costs Monthly Installments shall be
deposited.

     

    “Business
Day” shall
mean any day other than (a) a Saturday or Sunday, or (b) a day on which banking
and savings and loan institutions in the State of New York or the State of North
Carolina are authorized or obligated by law or executive order to be closed, or
at any time during which the Loan is an asset of a Securitization, the cities,
states and/or commonwealths used in the comparable definition of “Business Day”
in the Securitization documents.

     

    “Capital
Expenditures” shall
mean for any period, the amount expended for items capitalized under GAAP
including expenditures for building improvements or major repairs, leasing
commissions and tenant improvements.

     

    “Cash
Expenses” shall
mean for any period, the operating expenses for the Property as set forth in an
Approved Annual Budget to the extent that such expenses are actually incurred by
Mortgagor minus payments into the Basic Carrying Costs Sub-Account, the Debt
Service Payment Sub-Account, the Reletting Reserve Sub-Account and the Recurring
Replacement Reserve Sub-Account.

     

    
      
        
        

      

      
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    “Central
Account” shall
mean an Eligible Account, maintained at the Bank, in the name of Lender or its
successors or assigns (as secured party) as may be designated by
Lender.

     

    “Closing
Date”
shall mean the date of the Note.

     

    “Code” shall
mean the Internal Revenue Code of 1986, as amended and as it may be further
amended from time to time, any successor statutes thereto, and applicable U.S.
Department of Treasury regulations issued pursuant thereto.

     

    “Condemnation
Proceeds” shall
mean all of the proceeds in respect of any Taking or purchase in lieu
thereof.

     

    “Contractual
Obligation” shall
mean, as to any Person, any provision of any security issued by such Person or
of any agreement, instrument or undertaking to which such Person is a party or
by which it or any of the property owned by it is bound.

     

    “Control” means,
when used with respect to any specific Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person whether through ownership of voting securities,
beneficial interests, by contract or otherwise. The definition is to be
construed to apply equally to variations of the word “Control” including
“Controlled,” “Controlling” or “Controlled by.” 

     

    “CPI” shall
mean “The Consumer Price Index (New Series) (Base Period 1982-84=100) (all items
for all urban consumers)” issued by the Bureau of Labor Statistics of the United
States Department of Labor (the “Bureau”). If
the CPI ceases to use the 1982-84 average equaling 100 as the basis of
calculation, or if a change is made in the term, components or number of items
contained in said index, or if the index is altered, modified, converted or
revised in any other way, then the index shall be adjusted to the figure that
would have been arrived at had the change in the manner of computing the index
in effect at the date of this Security Instrument not been altered. If at any
time during the term of this Security Instrument the CPI shall no longer be
published by the Bureau, then any comparable index issued by the Bureau or
similar agency of the United States issuing similar indices shall be used in
lieu of the CPI.

     

    “Cross-collateralized
Mortgage” shall
mean that certain mortgage, security agreement, assignment of rents and fixture
filing as originally executed or as same may hereafter from time to time be
supplemented, amended, modified, extended granted by the Texas Borrowers to
Lender as security for the Note.

     

    “Cross-collateralized
Property” shall
mean each parcel or parcels of real property as identified on Exhibit G-1 to
G-14 attached hereto and made a part hereof encumbered by this Mortgage and the
Cross-collateralized Mortgage; provided, however, at such time, if any, that a
Cross-collateralized Property is released by Lender, the property which was
encumbered by either this Security Instrument or the Cross-collateralized
Mortgage shall no longer constitute a Cross-collateralized
Property.

     

    “Current
Month” shall
mean the period from the eleventh (11th) day of
each month through and including the tenth (10th) day of
the following month.

     

    
      
        
        

      

      
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    "Curtailment Reserve Escrow
Account" shall
mean the Escrow Account maintained pursuant to Section 5.11 hereof into which
sums shall be deposited during an O&M Operative Period.

     

    "Curtailment Reserve
Sub-Account" shall
mean the Sub-Account of the Central Account established pursuant to Section 5.02
hereof.

     

    “Debt” shall
mean the principal of, prepayment premium (if any) and interest on the Note and
all other obligations, liabilities or sums due or to become due under, or
advanced in accordance herewith to protect the security of, the Security
Instrument, the Note or any other Loan Document, including, without limitation,
interest on said obligations, liabilities or sums.

     

    “Debt Service
Coverage” shall
mean the quotient obtained by dividing Adjusted Net Cash Flow for all of the
Cross-collateralized Properties for the specified period by the sum of the
aggregate payments of interest and principal due for such specified period under
the Note (determined as of the date the calculation of Debt Service Coverage is
required or requested hereunder) based upon an assumed Debt Service due and
payable on the Loan as calculated on a 7.1% debt service constant. 

     

    “Debt Service Payment
Sub-Account” shall
mean the Sub-Account of the Central Account established pursuant to Section 5.02
hereof into which the Required Debt Service Payment shall be
deposited.

     

    “Default” shall
mean any Event of Default or event which would constitute an Event of Default if
all requirements in connection therewith for the giving of notice, the lapse of
time, and the happening of any further condition, event or act, had been
satisfied.

     

    “Default
Rate” shall
mean the lesser of (a) the highest rate allowable at law and (b) four percent
(4%) above the interest rate set forth in the Note.

     

    “Default Rate
Interest” shall
mean, to the extent the Default Rate becomes applicable, interest in excess of
the interest which would have accrued on (a) the Principal Amount and (b) any
accrued but unpaid interest, if the Default Rate was not
applicable.

     

    “Development
Laws” shall
mean all applicable subdivision, zoning, environmental protection, wetlands
protection, or land use laws or ordinances, and any and all applicable rules and
regulations of any Governmental Authority promulgated thereunder or related
thereto.

     

    “Eligible
Account” shall
mean a segregated account which is either (a) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
long term unsecured debt obligations of which are rated by each of the Rating
Agencies (or, if not rated by Fitch, Inc. (“Fitch”),
otherwise acceptable to Fitch, as confirmed in writing that such account would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
then current ratings assigned to any certificates issued in connection with a
Securitization) in its second highest rating category at all times (or, in the
case of the Basic Carrying Costs Escrow Account, the long term unsecured debt
obligations of which are rated at least “AA” (or its equivalent)) by each of the
Rating Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch, as
confirmed in writing that such account would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization) or, if the funds in
such account are to be held in such account for less than thirty (30) days, the
short term obligations of which are rated by each of the Rating Agencies (or, if
not rated by Fitch, otherwise acceptable to Fitch, as confirmed in writing that
such account would not, in and of itself, result in a downgrade, qualification
or withdrawal of the then current ratings assigned to any certificates issued in
connection with a Securitization) in its second highest rating category at all
times 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 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 $100,000,000 and subject
to supervision or examination by federal and state authority, or otherwise
acceptable (as evidenced by a written confirmation from each Rating Agency that
such account would not, in and of itself, cause a downgrade, qualification or
withdrawal of the then current ratings assigned to any certificates issued in
connection with a Securitization) to each Rating Agency, which may be an account
maintained by Lender or its agents. Eligible Accounts may bear interest. The
title of each Eligible Account shall indicate that the funds held therein are
held in trust for the uses and purposes set forth herein.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    “Engineer” shall
have the meaning set forth in Section 3.04(b)(i) hereof.

     

    “Engineering Escrow
Account” shall
mean an Escrow Account established and maintained pursuant to Section 5.12
hereof relating to payments for any Required Engineering Work. 

     

    “Engineering
Report” shall
mean the engineering report for the Property and any supplements or updates
thereto, previously delivered to Lender in connection with the
Loan.

     

    “Environmental
Problem” shall
mean any of the following:

     

    (a) the
presence of any Hazardous Material on, in, under, or above all or any portion of
the Property;

     

    (b) the
release or threatened release of any Hazardous Material from or onto the
Property;

     

    (c) the
violation or threatened violation of any Environmental Statute with respect to
the Property; or

     

    (d) the
failure to obtain or to abide by the terms or conditions of any permit or
approval required under any Environmental Statute with respect to the
Property.

     

    A
condition described above shall be an Environmental Problem regardless of
whether or not any Governmental Authority has taken any action in connection
with the condition and regardless of whether that condition was in existence on
or before the date hereof.

     

    “Environmental
Report” shall
mean the environmental audit report for the Property and any supplements or
updates thereto, previously delivered to Lender in connection with the
Loan.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    “Environmental
Statute” shall
mean any federal, state or local statute, ordinance, rule or regulation, any
judicial or administrative order (whether or not on consent) or judgment
applicable to Mortgagor or the Property including, without limitation, any
judgment or settlement based on common law theories, and any provisions or
condition of any permit, license or other authorization binding on Mortgagor
relating to (a) the protection of the environment or the health of persons
(including employees) from actual or potential exposure (or effects of exposure)
to any actual or potential release, discharge, disposal or emission (whether
past or present) of any Hazardous Materials or (b) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Hazardous Materials, including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
§9601 et seq., the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42
U.S.C. §6901 et seq., the
Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977,
33 U.S.C. §1251 et seq., the
Toxic Substances Control Act of 1976, 15 U.S.C. §2601 et seq., the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §1101
et seq., the
Clean Air Act of 1966, as amended, 42 U.S.C. §7401 et seq., the
National Environmental Policy Act of 1975, 42 U.S.C. §4321, the Rivers and
Harbors Act of 1899, 33 U.S.C. §401 et seq., the
Endangered Species Act of 1973, as amended, 16 U.S.C. §1531 et seq., the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §651
et seq., and the
Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §300(f) et seq., and all
rules, regulations and guidance documents promulgated or published
thereunder.

     

    “Equipment” shall
have the meaning set forth in granting clause (d) of this Security
Instrument.

     

    “ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated thereunder. Section references to ERISA
are to ERISA, as in effect at the date of this Security Instrument and, as of
the relevant date, any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

     

    “ERISA
Affiliate” shall
mean any corporation or trade or business that is a member of any group of
organizations (a) described in Section 414(b) or (c) of the Code of which
Mortgagor or Guarantor is a member and (b) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, described in Section 414(m) or (o) of the Code of which Mortgagor or
Guarantor is a member.

     

    “Escrow
Account” shall
mean each of the Engineering Escrow Account, the Basic Carrying Costs Escrow
Account, the Recurring Replacement Reserve Escrow Account, the Reletting Reserve
Escrow Account, the Operation, Maintenance Expense Escrow Account and the
Curtailment Reserve Escrow Account, each of which shall be an Eligible Account
or book entry sub-account of an Eligible Account.

     

    “Event of
Default” shall
have the meaning set forth in Section 13.01 hereof.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    “Extraordinary
Expense” shall
mean an extraordinary operating expense or capital expense not set forth in the
Approved Annual Budget or allotted for in the Recurring Replacement Reserve
Sub-Account or the Reletting Reserve Sub-Account.

     

    “Fiscal
Year” shall
mean the twelve (12) month period commencing on January 1 and ending on December
31 during each year of the term of this Security Instrument, or such other
fiscal year of Mortgagor as Mortgagor may select from time to time with the
prior written consent of Lender.

     

    “Fixtures” shall
have the meaning set forth in granting clause (d) of this Security
Instrument.

     

    “Force
Majeure” shall
mean strikes, lockouts, labor disputes, acts of God, governmental restrictions,
regulations or controls, enemy or hostile governmental actions, terrorist acts,
civil commotion, insurrection, revolution, sabotage or fire or other casualty or
other events beyond the reasonable control of Mortgagor and/or its Affiliates,
but Mortgagor’s and/or its Affiliates’ lack of funds in and of itself shall not
be deemed a cause beyond the control of Mortgagor and/or its
Affiliates.

     

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

     

    “General
Partner” shall
mean, if Mortgagor is a partnership, each general partner of Mortgagor and, if
Mortgagor is a limited liability company, each managing member of Mortgagor and
in each case, if applicable, each general partner or member of such general
partner or managing member. 

     

    “Governmental
Authority” shall
mean, with respect to any Person, any federal or State government or other
political subdivision thereof and any entity, including any regulatory or
administrative authority or court, exercising executive, legislative, judicial,
regulatory or administrative or quasi-administrative functions of or pertaining
to government, and any arbitration board or tribunal, in each case having
jurisdiction over such applicable Person or such Person’s property and any stock
exchange on which shares of capital stock of such Person are listed or admitted
for trading. 

     

    “Guarantor” shall
mean any Person guaranteeing, in whole or in part, the obligations of Mortgagor
under the Loan Documents.

     

    “Hazardous
Material” shall
mean any flammable, explosive or radioactive materials, hazardous materials or
wastes, hazardous or toxic substances, pollutants, asbestos or any material
containing asbestos, molds, spores and fungus which may pose a risk to human
health or the environment or any other substance or material as defined in or
regulated by any Environmental Statutes.

     

    “Impositions” shall
mean all taxes (including, without limitation, all real estate, ad valorem,
sales (including those imposed on lease rentals), use, single business, gross
receipts, value added, intangible, transaction, privilege or license or similar
taxes), assessments (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not commenced or completed within the term of this
Security Instrument), ground rents, water, sewer or other rents and charges,
excises, levies, fees (including, without limitation, license, permit,
inspection, authorization and similar fees), and all other governmental charges,
in each case whether general or special, ordinary or extraordinary, or foreseen
or unforeseen, of every character in respect of the Property and/or any Rent
(including all interest and penalties thereon), which at any time prior to,
during or in respect of the term hereof may be assessed or imposed on or in
respect of or be a lien upon (a) Mortgagor (including, without limitation, all
franchise, single business or other taxes imposed on Mortgagor for the privilege
of doing business in the jurisdiction in which the Property or any other
collateral delivered or pledged to Lender in connection with the Loan is
located) or Lender, (b) the Property or any part thereof or any Rents therefrom
or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Property, or any part thereof, or the leasing or use of the
Property, or any part thereof, or the acquisition or financing of the
acquisition of the Property, or any part thereof, by Mortgagor. 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    “Improvements” shall
have the meaning set forth in granting clause (b) of this Security
Instrument.

     

    “Indemnified
Parties” shall
have the meaning set forth in Section 12.01 hereof.

     

    “Indemnity and
Guaranty” shall
mean that certain Indemnity and Guaranty executed and delivered by Lightstone
Value Plus Real Estate Investment Trust, Inc., dated as of the date
hereof.

     

    “Independent” shall
mean, when used with respect to any Person, a Person who (a) is in fact
independent, (b) does not have any direct financial interest or any material
indirect financial interest in Mortgagor, or in any Affiliate of Mortgagor or
any constituent partner, shareholder, member or beneficiary of Mortgagor, (c) is
not connected with Mortgagor or any Affiliate of Mortgagor or any constituent
partner, shareholder, member or beneficiary of Mortgagor as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions and (d) is not a member of the immediate family of a Person
defined in (b) or (c) above.

     

    “Individual
Property” shall
mean each parcel or parcels of real property encumbered by this Security
Instrument as identified on Exhibit F attached hereto and made a part
hereof.

     

    “Initial Engineering
Deposit” shall
equal the amount set forth on Exhibit B attached hereto and made a part
hereof.

     

    “Initial Reletting Reserve
Deposit” shall
equal the amount set forth on Exhibit B attached hereto and made a part
hereof.

     

    “Initial Recurring Reserve
Deposit” shall
equal the amount required to be deposited by Mortgagor into the Recurring
Replacement Reserve Escrow Account on the Closing Date as set forth on Exhibit
B.

     

    “Insolvency
Opinion” shall
have the meaning set forth in Section 2.02(g)(xix) hereof.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    “Institutional
Lender” shall
mean any of the following Persons: (a) any bank, savings and loan
association, savings institution, trust company or national banking association,
acting for its own account or in a fiduciary capacity, (b) any charitable
foundation, (c) any insurance company or pension and/or annuity company,
(d) any fraternal benefit society, (e) any pension, retirement or
profit sharing trust or fund within the meaning of Title I of ERISA or for
which any bank, trust company, national banking association or investment
adviser registered under the Investment Advisers Act of 1940, as amended, is
acting as trustee or agent, (f) any investment company or business
development company, as defined in the Investment Company Act of 1940, as
amended, (g) any small business investment company licensed under the Small
Business Investment Act of 1958, as amended, (h) any broker or dealer
registered under the Securities Exchange Act of 1934, as amended, or any
investment adviser registered under the Investment Adviser Act of 1940, as
amended, (i) any government, any public employees’ pension or retirement
system, or any other government agency supervising the investment of public
funds, or (j) any other entity all of the equity owners of which are
Institutional Lenders; provided that each of said Persons shall have net assets
in excess of $1,000,000,000 and a net worth in excess of $500,000,000, be in the
business of making commercial mortgage loans, secured by properties of like
type, size and value as the Property and have a long term credit rating which is
not less than “BBB-” (or its equivalent) from the Rating Agency.

     

    “Insurance
Proceeds” shall
mean all of the proceeds received under the insurance policies required to be
maintained by Mortgagor pursuant to Article III hereof. 

     

    “Insurance
Requirements” shall
mean all terms of any insurance policy required by this Security Instrument, all
requirements of the issuer of any such policy, and all regulations and then
current standards applicable to or affecting the Property or any use or
condition thereof, which may, at any time, be recommended by the Board of Fire
Underwriters, if any, having jurisdiction over the Property, or such other
Person exercising similar functions.

     

    “Interest
Rate” shall
have the meaning set forth in the Note.

     

    “Late
Charge” shall
have the meaning set forth in Section 13.09 hereof.

     

    “Leases” shall
have the meaning set forth in granting clause (f) of this Security
Instrument.

     

    “Legal
Requirement” shall
mean as to any Person, the certificate of incorporation, by-laws, certificate of
limited partnership, articles of organization, agreement of limited partnership
or other organization or governing documents of such Person, and any law,
statute, order, code, ordinance, judgment, decree, injunction, treaty, rule or
regulation (including, without limitation, Environmental Statutes, Development
Laws and Use Requirements) or determination of an arbitrator or a court or other
Governmental Authority and all covenants, agreements, restrictions and
encumbrances contained in any instruments, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.

     

    “Lender” shall
mean the Lender named herein and its successors or assigns.

     

    “Loan” shall
have the meaning set forth in the Recitals hereto.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    “Loan
Amount” shall
have the meaning set forth in the Recitals hereto.

     

    “Loan
Documents” shall
mean this Security Instrument, the Note, the Assignment, and any and all other
agreements, instruments, certificates or documents executed and delivered by
Mortgagor, Borrower or any Affiliate of Mortgagor in connection with the
Loan.

     

    “Loan Year” shall
mean each 365 day period (or 366 day period if the month of February in a leap
year is included) commencing on the first day of the month following the Closing
Date (provided, however, that the first Loan Year shall also include the period
from the Closing Date to the end of the month in which the Closing Date occurs).


     

    “Loss
Proceeds” shall
mean, collectively, all Insurance Proceeds and all Condemnation Proceeds.


     

    "Louisiana
Borrowers" shall
mean the Delaware limited liability companies listed on Schedule 1 annexed
hereto.

     

    “Major Space
Lease” shall
mean any Space Lease of a tenant or Affiliate of such tenant where such tenant
or such Affiliate leases, in the aggregate, in excess of ten (10%) percent of
rentable square feet of space at the Property.

     

    “Management
Agreement” shall
have the meaning set forth in Section 7.02 hereof.

     

    “Manager” shall
mean Mortgagor and any other Person, other than Mortgagor, which manages the
Property on behalf of Mortgagor.

     

    “Manager
Certification” shall
have the meaning set forth in Section 2.09 hereof.

     

    “Material Adverse
Effect” shall
mean any event or condition that has a material adverse effect on (a) the
Property, (b) the business, profits, management, operations or condition
(financial or otherwise) of Mortgagor, (c) the enforceability, validity,
perfection or priority of the lien or security interest of any Loan Document or
(d) the ability of Mortgagor to perform any material obligations under any Loan
Document.

     

    “Maturity”, when
used with respect to the Note, shall mean the Maturity Date set forth in the
Note, as same may be extended in accordance with the Note, or such other date
pursuant to the Note on which the final payment of principal, and premium, if
any, on the Note becomes due and payable as therein or herein provided, whether
at Stated Maturity or by declaration of acceleration, or otherwise.

     

    “Maturity
Date” shall
mean the Maturity Date set forth in the Note.

     

    “Minimum Manager
Credentials” shall
mean (i) the employment of a senior executive who has the responsibility for
oversight of the Property and has at least five (5) years’ experience in the
management of industrial centers and (ii) the management of not less than five
(5) industrial center properties (excluding the Cross-collateralized Properties)
having an aggregate leasable square footage of not less than the lesser of (a)
one million leasable square feet and (b) five (5) times the leasable square feet
of the Property.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    “Multiemployer
Plan” shall
mean a multiemployer plan defined as such in Section 3(37) of ERISA to which
contributions have been, or were required to have been, made by Mortgagor,
Guarantor or any ERISA Affiliate and which is covered by Title IV of
ERISA.

     

    “Net Capital
Expenditures” shall
mean for any period the amount by which Capital Expenditures during such period
exceeds reimbursements for such items during such period from any fund
established pursuant to the Loan Documents.

     

    “Net Operating
Income” shall
mean in each Fiscal Year or portion thereof during the term hereof, Operating
Income less Operating Expenses.

     

    “Net
Proceeds” shall
mean the excess of (a)(i) the purchase price (at foreclosure or otherwise)
actually received by Lender with respect to the Property as a result of the
exercise by Lender of its rights, powers, privileges and other remedies after
the occurrence of an Event of Default, or (ii) in the event that Lender (or
Lender’s nominee) is the purchaser at foreclosure by credit bid, then the amount
of such credit bid, in either case, over (b) all costs and expenses, including,
without limitation, all attorneys’ fees and disbursements and any brokerage
fees, if applicable, incurred by Lender in connection with the exercise of such
remedies, including the sale of such Property after a foreclosure against the
Property.

     

    “Note” shall
have the meaning set forth in the Recitals hereto.

     

    "O&M Operative
Period" shall
mean the period of time commencing upon the determination by Lender that the
Debt Service Coverage (tested quarterly except during the continuance of an
O&M Operative Period, in which event Debt Service Coverage shall be tested
monthly and shall be calculated based upon information contained in the reports
furnished to Lender pursuant to Section 2.09 hereof) is less than 1.10:1.0 for
the preceding fiscal quarter and terminating, in each case, on the Payment Date
next succeeding the date upon which Lender has determined that the Debt Service
Coverage has been 1.10:1 or greater for the immediately preceding two fiscal
quarters.

     

    “OFAC List” means
the list of specially designated nationals and blocked persons subject to
financial sanctions that is maintained by the U.S. Treasury Department, Office
of Foreign Assets Control and accessible through the internet website
www.treas.gov/ofac/t11sdn.pdf.

     

    “Officer’s
Certificate” shall
mean a certificate delivered to Lender by Mortgagor which is signed on behalf of
Mortgagor by an authorized representative of Mortgagor which states that the
items set forth in such certificate are true, accurate and complete in all
respects.

     

    “Operating
Expenses” shall
mean, in each Fiscal Year or portion thereof during the term hereof, all
expenses directly attributable to the operation, repair and/or maintenance of
the Property including, without limitation, (a) Impositions, (b) insurance
premiums, (c) management fees, whether or not actually paid, equal to the
greater of the actual management fees or expenses and four percent (4%) of
annual “base” or “fixed” Rent due under the Leases and (d) costs attributable to
the operation, repair and maintenance of the systems for heating, ventilating
and air conditioning the Improvements and actually paid for by Mortgagor.
Operating Expenses shall not include interest, principal and premium, if any,
due under the Note or otherwise in connection with the Debt, income taxes,
Capital Expenditures, any non-cash charge or expense such as depreciation,
amortization or 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 or contributions by Mortgagor to any reserve
funds required under the Loan Documents.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    “Operating
Income” shall
mean, in each Fiscal Year or portion thereof during the term hereof, all revenue
derived by Mortgagor arising from the Property including, without limitation,
rental revenues (whether denominated as basic rent, additional rent, escalation
payments, electrical payments or otherwise) and other fees and charges payable
pursuant to Leases or otherwise in connection with the Property, and the
proceeds of business interruption, rent or other similar insurance. Operating
Income shall not include (a) Insurance Proceeds (other than proceeds of
rent, business interruption or other similar insurance allocable to the
applicable period) and 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), or interest accrued on
such Condemnation Proceeds, (b) proceeds of any financing, (c) proceeds of any
sale, exchange or transfer of the Property or any part thereof or interest
therein, (d) capital contributions or loans to Mortgagor or an Affiliate of
Mortgagor, (e) any item of income otherwise includable in Operating Income but
paid directly by any tenant to a Person other than Mortgagor except for real
estate taxes paid directly to any taxing authority by any tenant, (f) any other
extraordinary, non-recurring revenues, (g) Rent paid by or on behalf of any
lessee under a Space 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 Space Lease has been affirmed by
the trustee in such proceeding or action, (h) Rent paid by or on behalf of any
lessee under a Space Lease the demised premises of which are not occupied either
by such lessee or by a sublessee thereof unless the lessee thereunder has a
long-term unsecured debt rating of not less than “BBB+” (or its equivalent) from
the Rating Agency, (i) Rent paid by or on behalf of any lessee under a Space
Lease in whole or partial consideration for the termination of any Space Lease,
(j) rent paid by or on behalf of lessees under month-to-month Space Leases for
lessees which have been in occupancy for less than six (6) months, (k) rent paid
by or on behalf of any lessee under a Space Lease that is more than thirty (30)
days in arrears in its obligations under such Space Lease, (l) Rents paid by or
on behalf of lessees who have given notice that they will be vacating the
premises demised under their respective Space Leases more than thirty (30) days
prior to the stated expiration date set forth in such Space Leases, or (m) sales
tax rebates from any Governmental Authority.

     

    “Operation and Maintenance
Expense Escrow Account” shall
mean the Escrow Account maintained pursuant to Section 5.09 hereof relating to
the payment of Operating Expenses (exclusive of Basic Carrying
Costs).

     

    “Operation and Maintenance
Expense Sub-Account” shall
mean the Sub-Account of the Central Account established pursuant to Section 5.02
hereof into which sums allocated for the payment of Cash Expenses, Net Capital
Expenditures and approved Extraordinary Expenses shall be
deposited.

     

    “Payment
Date” shall
have the meaning set forth in the Note.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    “PBGC” shall
mean the Pension Benefit Guaranty Corporation established under ERISA, or any
successor thereto.

     

    “Permitted
Encumbrances” shall
have the meaning set forth in Section 2.05(a) hereof.

     

    “Person” shall
mean any individual, corporation, limited liability company, partnership, joint
venture, 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.

     

    “Plan” shall
mean an employee benefit or other plan established or maintained by Mortgagor,
Guarantor or any ERISA Affiliate during the five-year period ended prior to the
date of this Security Instrument or to which Mortgagor, Guarantor or any ERISA
Affiliate makes, is obligated to make or has, within the five year period ended
prior to the date of this Security Instrument, been required to make
contributions (whether or not covered by Title IV of ERISA or Section 302 of
ERISA or Section 401(a) or 412 of the Code), other than a Multiemployer
Plan.

     

    “Premises” shall
have the meaning set forth in granting clause (a) of this Security
Instrument.

     

    “Principal
Amount” shall
mean the Loan Amount as such amount may be reduced from time to time pursuant to
the terms of this Security Instrument, the Note or the other Loan
Documents.

     

    “Pro-Forma Net Operating
Income” shall
mean Pro-Forma Operating Income less Pro-Forma Operating Expenses.

     

    “Pro-Forma Operating
Expenses” shall
mean projected aggregate annualized Operating Expenses for all of the
Cross-collateralized Properties based on a trailing twelve (12)-month period as
reasonably adjusted by Lender to take into account, among other things,
anticipated increases or decreases in Operating Expenses.

     

    “Pro-Forma Operating
Income” shall
mean the lesser of (i) projected aggregate Operating Income for the
Cross-collateralized Properties for the immediately subsequent 12-month period
and (ii) actual aggregate Operating Income for the Cross-collateralized
Properties for the immediately preceding 12-month period, as increased by
scheduled rent increases set forth in the Space Leases and rent anticipated from
tenants under Space Leases relating to any portion of the Premises which was
previously not occupied provided such tenants are then in occupancy pursuant to
Space Leases entered into in accordance with the terms of this Security
Instrument and have paid all rents due under the Space Lease without abatement,
suspension, deferment, diminution, reduction or other allowances for at least
one full calendar month, in each case as determined by Lender based on the most
recent rent roll and such other information as is required to be delivered by
Mortgagor pursuant to Section 2.09 hereof and as reasonably adjusted by Lender
to take into account, among other things, a vacancy factor equal to the greater
of (x) anticipated vacancies for the succeeding 12-month period and (b) actual
vacancies during the immediately preceding 12-month period. 

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    “Prohibited
Person” means
any Person identified on the OFAC List or any other Person with whom a U.S.
Person may not conduct business or transactions by prohibition of Federal law or
Executive Order of the President of the United States of America. 

     

    “Property” shall
have the meaning set forth in the granting clauses of this Security
Instrument.

     

    “Property
Agreements” shall
mean all agreements, grants of easements and/or rights-of-way, reciprocal
easement agreements, permits, declarations of covenants, conditions and
restrictions, disposition and development agreements, planned unit development
agreements, management or parking agreements, party wall agreements or other
instruments affecting the Property, but not including any brokerage agreements,
management agreements, service contracts, Space Leases or the Loan
Documents.

     

    “Rating
Agency” shall
mean Standard & Poor’s Ratings Services, Inc., a division of The McGraw-Hill
Company, Inc. (“Standard &
Poor’s”),
Fitch, Inc., and Moody’s Investors Service, Inc. (“Moody’s”),
collectively, and any successor to any of them; provided, however, that at any
time after a Securitization, “Rating Agency” shall mean those of the foregoing
rating agencies that from time to time rate the securities issued in connection
with such Securitization.

     

    “Real Estate
Taxes” shall
mean all real estate taxes, assessments (including, without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Security Instrument), water, sewer or other rents and
charges, and all other governmental charges, in each case whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Property (including all interest and penalties
thereon), which at any time prior to, during or in respect of the term hereof
may be assessed or imposed on or in respect of or be a lien upon the Property or
any part thereof or any estate, right, title or interest therein. 

     

    “Realty” shall
have the meaning set forth in Section 2.05(b) hereof.

     

    “Recurring Replacement
Expenditures” shall
mean expenditures related to capital repairs, replacements and improvements
performed at the Property from time to time. 

     

    “Recurring Replacement
Monthly Installment” shall
mean the amount per month as set forth on Exhibit B attached hereto and made a
part hereof.

     

    “Recurring Replacement
Reserve Escrow Account” shall
mean the Escrow Account maintained pursuant to Section 5.08 hereof relating to
the payment of Recurring Replacement Expenditures.

     

    “Recurring Replacement
Reserve Sub-Account” shall
mean the Sub-Account of the Central Account established pursuant to Section 5.02
hereof into which the Recurring Replacement Monthly Installment shall be
deposited.

     

    “Reletting
Expenditures” shall
mean reasonable and actual out-of-pocket expenditures payable to bona-fide third
parties incurred by Mortgagor relating to reletting of space at the Property and
in connection with any brokerage commissions due and payable, or any
improvements and replacements required to be made by Mortgagor (or reasonable
and actual out-of-pocket expenditures paid to tenants in connection with any
improvements and replacements made by tenants at the Property) under the terms
of any Lease to prepare the relevant space for occupancy by the tenant
thereunder.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    “Reletting Reserve Escrow
Account” shall
mean the Escrow Account maintained pursuant to Section 5.07 hereof relating to
the payment of Reletting Expenditures.

     

    “Reletting Reserve Monthly
Installment” shall
mean (a) the amount set forth on Exhibit B attached hereto and made a part
hereof plus (b) all sums received by Mortgagor in connection with any
cancellation, termination or surrender of any Lease, including, without
limitation, any surrender or cancellation fees, buy-out fees, or reimbursements
for tenant improvements and leasing commissions.

     

    “Reletting Reserve
Sub-Account” shall
mean the Sub-Account of the Central Account established pursuant to Section 5.02
hereof into which the Reletting Reserve Monthly Installment shall be
deposited.

     

    “Rents” shall
have the meaning set forth in granting clause (f) of this Security
Instrument.

     

    “Rent
Account” shall
mean an Eligible Account, maintained at the Bank, in the joint names of
Mortgagor and Lender or its successors or assigns (as secured party) as may be
designated by Lender.

     

    “Rent Roll” shall
have the meaning set forth in Section 2.05 (o) hereof.

     

    “Required Debt Service
Coverage” shall
mean a Debt Service Coverage of not less than –1.20:1.0.

     

    “Required Debt Service
Payment” shall
mean, as of any Payment Date, the amount of interest and principal then due and
payable pursuant to the Note, together with any other sums due thereunder,
including, without limitation, any prepayments required to be made or for which
notice has been given under this Security Instrument, Default Rate Interest and
premium, if any, paid in accordance therewith.

     

    “Required Engineering
Work” shall
mean the immediate engineering and/or environmental remediation work set forth
on Exhibit D attached hereto and made a part hereof.

     

    “Retention
Amount” shall
have the meaning set forth in Section 3.04(b)(vii) hereof.

     

    “Securities
Act” shall
mean the Securities Act of 1933, as the same shall be amended from time to
time.

     

    “Securitization” shall
mean a public or private offering of securities by Lender or any of its
Affiliates or their respective successors and assigns which are collateralized,
in whole or in part, by this Security Instrument. 

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    “Security Deposit
Account” shall
have the meaning set forth in Section 5.01 hereof.

     

    “Security
Instrument” shall
mean this Security Instrument as originally executed or as it may hereafter from
time to time be supplemented, amended, modified or extended by one or more
indentures supplemental hereto.

     

    “Single Purpose
Entity” shall
mean a corporation, partnership, joint venture, limited liability company, trust
or unincorporated association, which is formed or organized solely for the
purpose of holding, directly, an ownership interest in the Property or a general
partner interest in a Person, does not engage in any business unrelated to the
Property, does not have any assets other than those related to its interest in
the Property or a general partner interest in such Person, or any indebtedness,
other than as permitted by this Security Instrument or the other Loan Documents,
has its own separate books and records and has its own accounts, in each case
which are separate and apart from the books and records and accounts of any
other Person, holds itself out as being a Person separate and apart from any
other Person and which otherwise satisfies the criteria of the Rating Agency, as
in effect on the Closing Date, for a special-purpose bankruptcy-remote entity.


     

    “Solvent” shall
mean, as to any Person, that (a) the sum of the assets of such Person, at a fair
valuation, exceeds its liabilities, including contingent liabilities, (b) such
Person has sufficient capital with which to conduct its business as presently
conducted and as proposed to be conducted and (c) such Person has not incurred
debts, and does not intend to incur debts, beyond its ability to pay such debts
as they mature. For purposes of this definition, “debt” means
any liability on a claim, and “claim” means
(a) a right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured, or (b) a right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured,
or unsecured. With respect to any such contingent liabilities, such liabilities
shall be computed in accordance with GAAP at the amount which, in light of all
the facts and circumstances existing at the time, represents the amount which
can reasonably be expected to become an actual or matured
liability.

     

    “Space
Leases” shall
mean any Lease or sublease thereunder (including, without limitation, any Major
Space Lease) or any other agreement providing for the use and occupancy of a
portion of the Property as the same may be amended, renewed or
supplemented.

     

    “State” shall
mean any of the states which are members of the United States of
America.

     

    “Stated
Maturity”, when
used with respect to the Note or any installment of interest and/or principal
payment thereunder, shall mean the date specified in the Note as the fixed date
on which a payment of principal and/or interest is due and payable.

     

    “Sub-Accounts” shall
have the meaning set forth in Section 5.02 hereof. 

     

    “Substantial
Casualty” shall
have the meaning set forth in Section 3.04(a)(iv) hereof.

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    “Taking” shall
mean a condemnation or taking pursuant to the lawful exercise of the power of
eminent domain.

     

    “Transfer” shall
mean the conveyance, assignment, sale, mortgaging, encumbrance, pledging,
hypothecation, granting of a security interest in, granting of options with
respect to, or other disposition of (directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, and whether or not for
consideration or of record) all or any portion of any legal or beneficial
interest (a) in all or any portion of the Property; (b) if Mortgagor or, if
Mortgagor is a partnership, any General Partner, is a corporation, in the stock
of Mortgagor or any General Partner; (c) if Mortgagor is a limited or general
partnership, joint venture, limited liability company, trust, nominee trust,
tenancy in common or other unincorporated form of business association or form
of ownership interest, in any Person having a legal or beneficial ownership in
Mortgagor, excluding any legal or beneficial interest in any constituent limited
partner, if Mortgagor is a limited partnership, or in any non-managing member,
if Mortgagor is a limited liability company, unless such interest would, or
together with all other direct or indirect interests in Mortgagor which were
previously transferred, aggregate 49% or more of the partnership or membership,
as applicable, interests in Mortgagor or would result in any Person who, as of
the Closing Date, did not own, directly or indirectly, 49% or more of the
partnership or membership, as applicable, interests in Mortgagor, owning,
directly or indirectly, 49% or more of the partnership or membership, as
applicable, interests in Mortgagor and excluding any legal or beneficial
interest in any General Partner unless such interest would, or together with all
other direct or indirect interest in the General Partner which were previously
transferred, aggregate 49% or more of the partnership or membership, as
applicable, interests in the General Partner (or result in a change in control
of the management of the General Partner from the individuals exercising such
control immediately prior to the conveyance or other disposition of such legal
or beneficial interest) and shall also include, without limitation to the
foregoing, the following: an installment sales agreement wherein Mortgagor
agrees to sell the Property or any part thereof or any interest therein for a
price to be paid in installments; an agreement by Mortgagor leasing all or
substantially all of the Property to one or more Persons pursuant to a single or
related transactions, or a sale, assignment or other transfer of, or the grant
of a security interest in, Mortgagor’s right, title and interest in and to any
Leases or any Rent; any instrument subjecting the Property to a condominium
regime or transferring ownership to a cooperative corporation; and the
dissolution or termination of Mortgagor or the merger or consolidation of
Mortgagor with any other Person. Notwithstanding
the foregoing, “Transfer” shall not include the following transfer which would
otherwise be a Transfer pursuant to clause (c) above with respect to Mortgagor:
the acquisition, issuance or transfer (whether in one transaction or in a series
of transactions) of securities in Lightstone Value Plus Real Estate Investment
Trust, Inc., a Maryland corporation (hereinafter, "REIT") or the sale of REIT
shares pursuant to its prospectus dated May 22, 2005, as supplemented, if the
shares of REIT are listed on a national securities exchange and such transfer is
in the ordinary course of trading of REIT's shares on a national securities
exchange and so long as the securities of REIT are publicly traded except that
(x) REIT shall not merge or consolidate into another entity (i.e., where REIT is
not the surviving entity) (a “Merger”), and any transfer of interests or series
of transfers in interests in REIT shall not result in more than 49% of REIT
being owned by any single person or entity (or related group of people or
entities) (a “Majority Transfer”) if provided all of the following conditions
are satisfied if (i) written notice of any transfer pursuant
to this proviso is given to Lender together with such documents relating to the
transfer as Lender may reasonably require, (ii) there is a change in Control of
Mortgagor, (iii) in the event that any Person (a “Principal
Transferee”) who
does not, as of the Closing Date, own or Control, directly or indirectly, 49% or
more of the partnership or membership, as applicable, interests in Mortgagor
acquires, directly or indirectly, 49% or more of the partnership or membership,
as applicable, interests in Mortgagor, Lender is furnished an opinion, in form
and substance and from counsel reasonably satisfactory to Lender, substantially
similar to the Insolvency Opinion which discusses the substantive
non-consolidation of Mortgagor with the Principal Transferee, (iv) no such
transfer has any adverse effect either on the Single Purpose Entity status of
Mortgagor under the requirements of any Rating Agency or on the status of
Mortgagor as a continuing legal entity liable for the payment of the Debt and
the performance of all other obligations secured hereby, (v) Mortgagor has
delivered a letter from each Rating Agency confirming that any rating issued by
the Rating Agency in connection with a Securitization will not, as a result of
the transfer, be downgraded from the then current ratings thereof, qualified or
withdrawn, (vi) in the event that any Person (together with its Affiliates)
acquires a twenty percent (20%) or greater interest, directly or indirectly, in
Mortgagor or there is a change in Control of Mortgagor, as a result of such
transfer, Lender shall have consented to such transfer in its sole and absolute
discretion.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    “UCC” shall
mean the Uniform Commercial Code as in effect from time to time in the State in
which the Property is located. 

     

    “Unscheduled
Payments” shall
mean (a) all Loss Proceeds that Mortgagor has elected or is required to apply to
the repayment of the Debt pursuant to this Security Instrument, the Note or any
other Loan Documents, (b) any funds representing a voluntary or involuntary
principal prepayment and (c) any Net Proceeds.

     

    “Use
Requirements” shall
mean any and all building codes, permits, certificates of occupancy or
compliance, laws, regulations, or ordinances (including, without limitation,
health, pollution, fire protection, medical and day-care facilities, waste
product and sewage disposal regulations), restrictions of record, easements,
reciprocal easements, declarations or other agreements affecting the use of the
Property or any part thereof.

     

    “Welfare
Plan” shall
mean an employee welfare benefit plan as defined in Section 3(1) of ERISA
established or maintained by Mortgagor, Guarantor or any ERISA Affiliate or that
covers any current or former employee of Mortgagor, Guarantor or any ERISA
Affiliate.

     

    “Work” shall
have the meaning set forth in Section 3.04(a)(i) hereof.

     

    ARTICLE
II: REPRESENTATIONS,
WARRANTIES

    AND COVENANTS OF
MORTGAGOR

     

    Section
2.01. Payment of
Debt.
Mortgagor will pay the Debt at the time and in the manner provided in the Note
and the other Loan Documents, all in lawful money of the United States of
America in immediately available funds.

     

    Section
2.02. Representations, Warranties
and Covenants of Mortgagor.
Mortgagor represents, warrants and covenants to Lender:

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

    (a) Organization and
Authority. Each
entity comprising Mortgagor (i) is a limited liability company, general
partnership, limited partnership or corporation, as the case may be, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, (ii) has all requisite power and authority
and all necessary licenses and permits to own and operate the Property and to
carry on its business as now conducted and as presently proposed to be conducted
and (iii) is duly qualified, authorized to do business and in good standing in
the jurisdiction where the Property is located and in each other jurisdiction
where the conduct of its business or the nature of its activities makes such
qualification necessary. If Mortgagor is a limited liability company, limited
partnership or general partnership, each general partner or managing member, as
applicable, of Mortgagor which is a corporation is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation.

     

    (b) Power.
Mortgagor and, if applicable, each General Partner has full power and authority
to execute, deliver and perform, as applicable, the Loan Documents to which it
is a party, to make the borrowings thereunder, to execute and deliver the Note
and to grant to Lender a first lien on and security interest in the Property,
subject only to the Permitted Encumbrances.

     

    (c) Authorization of
Borrowing. The
execution, delivery and performance of the Loan Documents to which Mortgagor is
a party, the making of the borrowings thereunder, the execution and delivery of
the Note, the grant of the liens on the Property pursuant to the Loan Documents
to which Mortgagor is a party and the consummation of the Loan are within the
powers of Mortgagor and have been duly authorized by Mortgagor and, if
applicable, the General Partners, by all requisite action (and Mortgagor hereby
represents that no approval or action of any member, limited partner or
shareholder, as applicable, of Mortgagor is required to authorize any of the
Loan Documents to which Mortgagor is a party other than such approval or action
that has already been granted or taken) and will constitute the legal, valid and
binding obligation of Mortgagor, enforceable against Mortgagor in accordance
with their terms, except as enforcement may be stayed or limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity (whether considered in proceedings
at law or in equity) and will not (i) violate any provision of its partnership
agreement or partnership certificate or certificate of incorporation or by-laws,
or operating agreement, or articles of organization, as applicable, or, to its
knowledge, any law, judgment, order, rule or regulation of any court,
arbitration panel or other Governmental Authority, domestic or foreign, or other
Person affecting or binding upon Mortgagor or the Property, or (ii) violate any
provision of any indenture, agreement, mortgage, deed of trust, contract or
other instrument to which Mortgagor or, if applicable, any General Partner is a
party or by which any of their respective property, assets or revenues are
bound, or be in conflict with, result in an acceleration of any obligation or a
breach of or constitute (with notice or lapse of time or both) a default or
require any payment or prepayment under, any such indenture, agreement,
mortgage, deed of trust, contract or other instrument, or (iii) result in the
creation or imposition of any lien, except those in favor of Lender as provided
in the Loan Documents to which it is a party. The loan evidenced by the Note is
being made for business or investment purposes.

     

    (d) Consent. Neither
Mortgagor nor, if applicable, any General Partner, is required to obtain any
consent, approval or authorization from, or to file any declaration or statement
with, any Governmental Authority or other agency in connection with or as a
condition to the execution, delivery or performance of this Security Instrument,
the Note or
the other Loan Documents which has not been so obtained or filed.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

     

    (e) Intentionally
Deleted.

     

    (f) Other
Agreements.
Mortgagor is not a party to nor is otherwise bound by any agreements or
instruments which, individually or in the aggregate, are reasonably likely to
have a Material Adverse Effect. Neither Mortgagor nor, if applicable, any
General Partner, is in violation of its organizational documents or other
restriction or any agreement or instrument by which it is bound, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
Governmental Authority, or any Legal Requirement, in each case, applicable to
Mortgagor or the Property, except for such violations that would not,
individually or in the aggregate, have a Material Adverse Effect.

     

    (g) Maintenance of
Existence.
Mortgagor and, if applicable, General Partner at all times since their formation
have been duly formed and existing and shall preserve and keep in full force and
effect their existence as a Single Purpose Entity.

     

    (ii) Mortgagor
and, if applicable, General Partner, at all times since their organization have
complied, and will continue to comply, with the provisions of its certificate
and agreement of partnership or certificate of incorporation and by-laws or
articles of organization and operating agreement, as applicable, and the laws of
its jurisdiction of organization relating to partnerships, corporations or
limited liability companies, as applicable.

     

    (iii) Mortgagor
and, if applicable, General Partner have done or caused to be done and will do
all things necessary to observe organizational formalities and preserve their
existence and each Mortgagor and, if applicable, General Partner will not amend,
modify or otherwise change the certificate and agreement of partnership or
certificate of incorporation and by-laws or articles of organization and
operating agreement, as applicable, or other organizational documents of
Mortgagor and, if applicable, General Partner without the prior written consent
of Lender. 

     

    (iv) Mortgagor
and, if applicable, General Partner, have at all times accurately maintained,
and will continue to accurately maintain, their respective financial statements,
accounting records and other partnership, company or corporate documents
separate from those of any other Person, and Mortgagor will file its own tax
returns or, if Mortgagor and/or, if applicable, General Partner is part of a
consolidated group for purposes of filing tax returns, Mortgagor and General
Partner, as applicable will be shown as separate members of such group.
Mortgagor and, if applicable, General Partner have not at any time since their
formation commingled, and will not commingle, their respective assets with those
of any other Person and will maintain their assets in such a manner such that it
will not be costly or difficult to segregate, ascertain or identify their
individual assets from those of any other Person. Mortgagor and, if applicable,
General Partner will not permit any Affiliate independent access to their bank
accounts. Mortgagor and, if applicable, General Partner have at all times since
their formation accurately maintained and utilized, and will continue to
accurately maintain and utilize, their own separate bank accounts, payroll and
separate books of account, stationery, invoices and checks.

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

     

    (v) Mortgagor
and, if applicable, General Partner, have at all times paid, and will continue
to pay, their own liabilities from their own separate assets and shall each
allocate and charge fairly and reasonably any overhead which Mortgagor and, if
applicable, General Partner, shares with any other Person, including, without
limitation, for office space and services performed by any employee of another
Person.

     

    (vi) Mortgagor
and, if applicable, General Partner, have at all times identified themselves,
and will continue to identify themselves, in all dealings with the public, under
their own names and as separate and distinct entities and shall correct any
known misunderstanding regarding their status as separate and distinct entities.
Mortgagor and, if applicable, General Partner, have not at any time identified
themselves, and will not identify themselves, as being a division of any other
Person.

     

    (vii) Mortgagor
and, if applicable, General Partner, have been at all times, and will continue
to use commercially reasonable efforts to be, adequately capitalized in light of
the nature of their respective businesses; provided, however, in no event shall
any direct or indirect member, partner or principal of Mortgagor be required to
make additional capital contributions to any Mortgagor.

     

    (viii) Mortgagor
and, if applicable, General Partner, (A) have not owned, do not own and will not
own any assets or property other than the Property and any incidental personal
property necessary for the ownership, management or operation of the Property,
(B) have not engaged and will not engage in any business other than the
ownership, management and operation of the Property, (C) have not incurred and
will not incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than (X) the Loan, and (Y) unsecured trade
and operational debt which (1) is not evidenced by a note, (2) is incurred in
the ordinary course of the operation of the Property, (3) does not exceed in the
aggregate two percent (2%) of the Allocated Loan Amount for the Property and (4)
which is, unless being contested in accordance with the terms of this Security
Instrument, paid prior to the earlier to occur of the forty-fifth (45th) day
after the date incurred and the date when due, (D) have not and will not pledge
their assets for the benefit of any other Person, and (E) have not made and will
not make any loans or advances to any Person (including any
Affiliate).

     

    (ix) Neither
Mortgagor nor, if applicable, any General Partner will change its name or
principal place of business without giving Lender at least thirty (30) days
prior written notice thereof.

     

    (x) Neither
Mortgagor nor, if applicable, any General Partner have, and neither of such
Persons will have, any subsidiaries.

     

    (xi) Mortgagor
will preserve and maintain its existence as a general partnership, limited
partnership or limited liability company, as applicable as of the Closing Date,
which is organized and existing under the laws of the State in which it is
organized as of the Closing Date and all material rights, privileges, tradenames
and franchises.

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    (xii) Neither
Mortgagor, nor, if applicable, any General Partner, will merge or consolidate
with, or sell all or substantially all of its respective assets to any Person,
or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up
or dissolution). Neither any Mortgagor, nor, if applicable, any General Partner
will acquire any business or assets from, or capital stock or other ownership
interest of, or be a party to any acquisition of, any Person.

     

    (xiii) Mortgagor
and, if applicable, General Partner, have not at any time since their formation
assumed, guaranteed or held themselves out to be responsible for, and will not
assume, guarantee or hold themselves out to be responsible for the liabilities
or the decisions or actions respecting the daily business affairs of their
partners, shareholders or members or any predecessor company, corporation or
partnership, each as applicable, any Affiliates, or any other Persons. Mortgagor
has not at any time since its formation acquired, and will not acquire,
obligations or securities of its partners or shareholders, members or any
predecessor company, corporation or partnership, each as applicable, or any
Affiliates. Mortgagor and, if applicable, General Partner, have not at any time
since their formation made, and will not make, loans to its partners, members or
shareholders or any predecessor company, corporation or partnership, each as
applicable, or any Affiliates of any of such Persons. Mortgagor and, if
applicable, General Partner, have no known contingent liabilities nor do they
have any material financial liabilities under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which such Person is a
party or by which it is otherwise bound other than under the Loan
Documents.

     

    (xiv) Mortgagor
has not at any time since its formation entered into and was not a party to,
and, will not enter into or be a party to, any transaction with its Affiliates,
members, partners or shareholders, as applicable, or any Affiliates thereof
except in the ordinary course of business of Mortgagor on terms which are no
less favorable to Mortgagor than would be obtained in a comparable arm’s length
transaction with an unrelated third party.

     

    (xv) If
Mortgagor is a limited partnership or a limited liability company, the General
Partner shall be a corporation or limited liability company whose sole asset is
its interest in Mortgagor and the General Partner will at all times comply, and
will cause Mortgagor to comply, with each of the representations, warranties,
and covenants contained in this Section 2.02(g) as if such representation,
warranty or covenant was made directly by such General Partner.

     

    (xvi) Mortgagor
shall at all times cause there to be at least two (2) duly appointed members of
the board of directors or board of managers or other governing board or body, as
applicable (an “Independent
Director”), of,
if Mortgagor is a corporation or single member limited liability company formed
in the State of Delaware, Mortgagor, and, if Mortgagor is a limited partnership
or multi-member limited liability company, of the General Partner, reasonably
satisfactory to Lender who shall not have been at the time of such individual’s
appointment, and may not be or have been at any time (A) a shareholder, officer,
director, attorney, counsel, partner, member or employee of Mortgagor or any of
the foregoing Persons or Affiliates thereof, (B) a customer or creditor of, or
supplier or service provider to, Mortgagor or any of its shareholders, partners,
members or their Affiliates, (C) a member of the immediate family of any Person
referred to in (A) or (B) above, D) a Person Controlling, Controlled by or under
common Control with any Person referred to in (A) through (C) above. A natural
person who otherwise satisfies the foregoing definition except for being the
Independent Director of a Single Purpose Entity Affiliated with Mortgagor or
General Partner shall not be disqualified from serving as an Independent
Director if such individual is at the time of initial appointment, or at any
time while serving as the Independent Director, an Independent Director of a
Single Purpose Entity Affiliated with Mortgagor or General Partner if such
individual is an independent director provided by a nationally-recognized
company that provides professional independent directors.

     

    
      
        
        

      

      
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    (xvii)
 Mortgagor
and, if applicable, General Partner, shall not cause or permit the board of
directors or board of managers or other governing board or body, as applicable,
of each Mortgagor or, if applicable, General Partner, to take any action which,
under the terms of any certificate of incorporation, by-laws or articles of
organization with respect to any common stock, requires a unanimous vote of the
board of directors of Mortgagor, or, if applicable, the General Partner, unless
at the time of such action there shall be at least two members who are
Independent Directors.

     

    (xviii) Mortgagor
and, if applicable, General Partner shall pay the salaries of their own
employees and maintain a sufficient number of employees in light of their
contemplated business operations.

     

    (xix) Mortgagor
shall, and shall cause its Affiliates to, conduct its business so that the
assumptions made with respect to Mortgagor in that certain opinion letter
relating to substantive non-consolidation dated the date hereof (the
“Insolvency
Opinion”)
delivered in connection with the Loan shall be true and correct in all
respects.

     

    (h) No
Defaults. No
Default or Event of Default has occurred and is continuing or would occur as a
result of the consummation of the transactions contemplated by the Loan
Documents. To the best of Mortgagor’s knowledge, Mortgagor is not in default
beyond any applicable notice and/or grace periods in the payment or performance
of any of its Contractual Obligations in any respect.

     

    (i) Consents and
Approvals.
Mortgagor and, if applicable, each General Partner, have obtained or made all
necessary (i) consents, approvals and authorizations, and registrations and
filings of or with all Governmental Authorities and (ii) consents,
approvals, waivers and notifications of partners, stockholders, creditors,
lessors and other nongovernmental Persons, in each case, which are required to
be obtained or made by Mortgagor or, if applicable, the General Partner, in
connection with the execution and delivery of, and the performance by Mortgagor
of its obligations under, the Loan Documents.

     

    
      
        
        

      

      
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    (j) Investment Company Act
Status, etc.
Mortgagor is not (i) an “investment company,” or a company “controlled” by an
“investment company,” as such terms are defined in the Investment Company Act of
1940, as amended, or (ii) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow
money.

     

    (k) Compliance with
Law. (i)
Except as previously disclosed to Lender in writing, Mortgagor has received no
notice of violation of any Legal Requirements and (ii) except for such
violations which would not, individually or in the aggregate, have a Material
Adverse Effect, Mortgagor is in compliance in all material respects with all
Legal Requirements to which it or the Property is subject, including, without
limitation, all Environmental Statutes, the Occupational Safety and Health Act
of 1970, the Americans with Disabilities Act and ERISA. No portion of the
Property has been or will be purchased, improved, fixtured, equipped or
furnished with proceeds of any illegal activity and to the best of Mortgagor’s
knowledge, no illegal activities are being conducted at or from the
Property.

     

    (l) Financial
Information. To the
best of Mortgagor’s knowledge, all financial data that has been delivered by
Mortgagor to Lender (i) is true, complete and correct in all material respects,
(ii) accurately represents the financial condition and results of operations of
the Persons covered thereby as of the date on which the same shall have been
furnished in all material respects, and (iii) to the extent prepared by an
independent certified public accounting firm, has been prepared in accordance
with GAAP (or such other accounting basis as is reasonably acceptable to Lender)
throughout the periods covered thereby except as disclosed therein. As of the
date hereof, neither Mortgagor nor, if applicable, any General Partner, has any
contingent liability, liability for taxes or other unusual or forward commitment
not reflected in such financial statements delivered to Lender. Since the date
of the last financial statements delivered by Mortgagor to Lender except as
otherwise disclosed in such financial statements or notes thereto, there has
been no change in the assets, liabilities or financial position of Mortgagor
nor, if applicable, any General Partner, or in the results of operations of
Mortgagor which would have a Material Adverse Effect. Neither Mortgagor nor, if
applicable, any General Partner, has incurred any obligation or liability,
contingent or otherwise not reflected in such financial statements which would
have a Material Adverse Effect.

     

    (m) Transaction Brokerage
Fees. Neither
Mortgagor nor Lender have dealt with any financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Security Instrument. MORTGAGOR HEREBY AGREES TO INDEMNIFY
AND HOLD LENDER HARMLESS FOR, FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES,
COSTS AND EXPENSES OF ANY KIND IN ANY WAY RELATING TO OR ARISING FROM (I) A
CLAIM BY ANY PERSON THAT SUCH PERSON ACTED ON BEHALF OF MORTGAGOR IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED HEREIN OR (II) ANY BREACH OF THE FOREGOING
REPRESENTATION. THE PROVISIONS OF THIS SUBSECTION (M) SHALL SURVIVE THE
REPAYMENT OF THE DEBT.

     

    (n) 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 Regulations T, U or X of the
Board of Governors of the Federal Reserve System or for any other purpose which
would be inconsistent with such Regulations T, U or X or any other Regulations
of such Board of Governors, or for any purposes prohibited by Legal Requirements
or by the terms and conditions of the Loan Documents.

     

    
      
        
        

      

      
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    (o) Pending
Litigation. Except
as previously disclosed in writing to Lender, there are no actions, suits or
proceedings pending or, to the knowledge of Mortgagor, threatened against or
affecting Mortgagor or the Property in any court or before any Governmental
Authority which if adversely determined either individually or collectively has
or is reasonably likely to have a Material Adverse Effect. 

     

    (p) Solvency; No
Bankruptcy.
Mortgagor and, if applicable, the General Partner, (i) is and has at all times
been Solvent and will remain Solvent immediately upon the consummation of the
transactions contemplated by the Loan Documents and (ii) is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment
for the benefit of creditors and is not contemplating the filing of a petition
under any state or federal bankruptcy or insolvency laws or the liquidation of
all or a major portion of such Person’s assets or property and Mortgagor has no
knowledge of any Person contemplating the filing of any such petition against it
or, if applicable, the General Partner. None of the transactions contemplated
hereby will be or have been made with an intent to hinder, delay or defraud any
present or future creditors of Mortgagor and Mortgagor has received reasonably
equivalent value in exchange for its obligations under the Loan Documents.
Mortgagor’s assets do not, and immediately upon consummation of the transaction
contemplated in the Loan Documents will not, constitute unreasonably small
capital to carry out its business as presently conducted or as proposed to be
conducted. Mortgagor does not intend to, nor believe that it will, incur debts
and liabilities beyond its ability to pay such debts as they may
mature.

     

    (q) Use of
Proceeds. The
proceeds of the Loan shall be applied by Mortgagor to, inter alia, (i)
satisfy certain secured loans presently encumbering all or a part of the
Property and (ii) pay certain transaction costs incurred by Mortgagor in
connection with the Loan. No portion of the proceeds of the Loan will be used by
Mortgagor for family, personal, agricultural or household use.

     

    (r) Tax
Filings.
Mortgagor and, if applicable, each General Partner, have filed all federal,
state and local tax returns required to be filed and have paid or made adequate
provision for the payment of all federal, state and local taxes, charges and
assessments payable by Mortgagor and, if applicable, each General Partner.
Mortgagor and, if applicable, each General Partner, believe that their
respective tax returns properly reflect the income and taxes of Mortgagor and
said General Partner, if any, for the periods covered thereby, subject only to
reasonable adjustments required by the Internal Revenue Service or other
applicable tax authority upon audit.

     

    (s) Not Foreign
Person.
Mortgagor is not a “foreign person” within the meaning of §1445(f)(3) of the
Code.

     

    (t) ERISA. (i)
The
assets of Mortgagor and Guarantor are not and will not become treated as “plan
assets”, whether by operation of law or under regulations promulgated under
ERISA. Each Plan and Welfare Plan, and, to the knowledge of Mortgagor, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, its terms and the
applicable provisions of ERISA, the Code and any other applicable Legal
Requirement, and no event or condition has occurred and is continuing as to
which Mortgagor would be under an obligation to furnish a report to Lender under
clause (ii)(A) of this Section. Other than an application for a favorable
determination letter with respect to a Plan, there are no pending issues or
claims before the Internal Revenue Service, the United States Department of
Labor or any court of competent jurisdiction related to any Plan or Welfare Plan
under which Mortgagor, Guarantor or any ERISA Affiliate, directly or indirectly
(through an indemnification agreement or otherwise), could be subject to any
material risk of liability under Section 409 or 502(i) of ERISA or Section 4975
of the Code. No Welfare Plan provides or will provide benefits, including,
without limitation, death or medical benefits (whether or not insured) with
respect to any current or former employee of Mortgagor, Guarantor or any ERISA
Affiliate beyond his or her retirement or other termination of service other
than (A) coverage mandated by applicable law, (B) death or disability benefits
that have been fully provided for by fully paid up insurance or (C) severance
benefits.

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

     

    (ii) Mortgagor
will furnish to Lender as soon as possible, and in any event within ten (10)
days after Mortgagor knows or has reason to believe that any of the events or
conditions specified below with respect to any Plan, Welfare Plan or
Multiemployer Plan has occurred or exists, an Officer’s Certificate setting
forth details respecting such event or condition and the action, if any, that
Mortgagor or its ERISA Affiliate proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or given to PBGC (or any
other relevant Governmental Authority)) by Mortgagor or an ERISA Affiliate with
respect to such event or condition, if such report or notice is required to be
filed with the PBGC or any other relevant Governmental Authority:

     

    (A) any
reportable event, as defined in Section 4043 of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which PBGC has not by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within
thirty (30) days of the occurrence of such event (provided that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section 302
of ERISA, including, without limitation, the failure to make on or before its
due date a required installment under Section 412(m) of the Code and of Section
302(e) of ERISA, shall be a reportable event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code), and any request for a
waiver under Section 412(d) of the Code for any Plan;

     

    (B) the
distribution under Section 4041 of ERISA of a notice of intent to terminate any
Plan or any action taken by Mortgagor or an ERISA Affiliate to terminate any
Plan;

     

    (C) the
institution by PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by Mortgagor or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by PBGC with respect to such Multiemployer
Plan;

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

     

    (D) the
complete or partial withdrawal from a Multiemployer Plan by Mortgagor or any
ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a result of a
purchaser default) or the receipt by Mortgagor or any ERISA Affiliate of notice
from a Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA;

     

    (E) the
institution of a proceeding by a fiduciary of any Multiemployer Plan against
Mortgagor or any ERISA Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within thirty (30) days;

     

    (F) the
adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the
Code or Section 307 of ERISA, would result in the loss of tax-exempt status of
the trust of which such Plan is a part if Mortgagor or an ERISA Affiliate fails
to timely provide security to the Plan in accordance with the provisions of said
Sections; or

     

    (G) the
imposition of a lien or a security interest in connection with a
Plan.

     

    (iii) Mortgagor
shall not knowingly engage in or permit any transaction in connection with which
Mortgagor, Guarantor or any ERISA Affiliate could be subject to either a civil
penalty or tax assessed pursuant to Section 502(i) or 502(l) of ERISA or Section
4975 of the Code, permit any Welfare Plan to provide benefits, including without
limitation, medical benefits (whether or not insured), with respect to any
current or former employee of Mortgagor, Guarantor or any ERISA Affiliate beyond
his or her retirement or other termination of service other than
(A) coverage mandated by applicable law, (B) death or disability benefits
that have been fully provided for by paid up insurance or otherwise or (C)
severance benefits, permit the assets of Mortgagor or Guarantor to become “plan
assets”, whether by operation of law or under regulations promulgated under
ERISA or adopt, amend (except as may be required by applicable law) or increase
the amount of any benefit or amount payable under, or permit any ERISA Affiliate
to adopt, amend (except as may be required by applicable law) or increase the
amount of any benefit or amount payable under, any employee benefit plan
(including, without limitation, any employee welfare benefit plan) or other
plan, policy or arrangement, except for normal increases in the ordinary course
of business consistent with past practice that, in the aggregate, do not result
in a material increase in benefits expense to Mortgagor, Guarantor or any ERISA
Affiliate.

     

    (u) Labor
Matters. No
organized work stoppage or labor strike is pending or, to Mortgagor’s best
knowledge, threatened by employees or other laborers at the Property and neither
Mortgagor nor Manager (i) is involved in or, to the best of their knowledge,
threatened with any labor dispute, grievance or litigation relating to labor
matters involving any employees and other laborers at the Property, including,
without limitation, violation of any federal, state or local labor, safety or
employment laws (domestic or foreign) and/or charges of unfair labor practices
or discrimination complaints; (ii) has engaged in any unfair labor practices
within the meaning of the National Labor Relations Act or the Railway Labor Act;
or (iii) is a party to, or bound by, any collective bargaining agreement or
union contract with respect to employees and other laborers at the Property and
no such agreement or contract is currently being negotiated by Mortgagor,
Manager or any of their Affiliates.

     

    
      
        
        

      

      
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    (v) Mortgagor’s Legal
Status.
Mortgagor’s exact legal name that is indicated on the signature page hereto,
organizational identification number and place of business or, if more than one,
its chief executive office, as well as Mortgagor’s mailing address, if
different, which were identified by Mortgagor to Lender and contained in this
Security Instrument, are true, accurate and complete. Mortgagor (i) will not
change its name, its place of business or, if more than one place of business,
its chief executive office, or its mailing address or organizational
identification number if it has one without giving Lender at least thirty (30)
days prior written notice of such change, (ii) if Mortgagor does not have an
organizational identification number and later obtains one, Mortgagor shall
promptly notify Lender of such organizational identification number and (iii)
Mortgagor will not change its type of organization, jurisdiction of organization
or other legal structure.

     

    (w) Compliance with
Anti-Terrorism, Embargo and Anti-Money Laundering Laws. (i)
None of Mortgagor, General Partner, any Guarantor, or any Person who owns any
equity interest in or Controls Mortgagor, General Partner or any Guarantor
currently is identified on the OFAC List or otherwise qualifies as a Prohibited
Person, and Mortgagor has implemented procedures, approved by General Partner,
to ensure that no Person who now or hereafter owns an equity interest in
Mortgagor or General Partner is a Prohibited Person or Controlled by a
Prohibited Person, and (ii) none of Mortgagor, General Partner, or any Guarantor
are in violation of any Legal Requirements relating to anti-money laundering or
anti-terrorism, including, without limitation, Legal Requirements related to
transacting business with Prohibited Persons or the requirements of the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the related
regulations issued thereunder, including temporary regulations, all as amended
from time to time. To the best of Mortgagor’s knowledge, no tenant at the
Property currently is identified on the OFAC List or otherwise qualifies as a
Prohibited Person, and, to the best of Mortgagor’s knowledge, no tenant at the
Property is owned or Controlled by a Prohibited Person. Mortgagor has
implemented procedures to ensure that no tenant at the Property is a Prohibited
Person or owned or Controlled by a Prohibited Person.

     

    Section
2.03. Further Acts,
etc.
Mortgagor will, at the cost of Mortgagor, and without expense to Lender, do,
execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, mortgages, deeds of trust or deeds to secure debt, as applicable,
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, given, granted, bargained, sold, alienated, enfeoffed,
conveyed, confirmed, pledged, assigned and hypothecated, or which Mortgagor may
be or may hereafter become bound to convey or assign to Lender, or for carrying
out or facilitating the performance of the terms of this Security Instrument or
for filing, registering or recording this Security Instrument and, on demand,
will execute and deliver and hereby authorizes Lender to execute in the name of
Mortgagor or without the signature of Mortgagor to the extent Lender may
lawfully do so, one or more financing statements, chattel mortgages or
comparable security instruments to evidence more effectively the lien hereof
upon the Property. Mortgagor grants to Lender an irrevocable power of attorney
coupled with an interest for the purpose of protecting, perfecting, preserving
and realizing upon the interests granted pursuant to this Security Instrument
and to effect the intent hereof, all as fully and effectually as Mortgagor might
or could do; and Mortgagor hereby ratifies all that Lender shall lawfully do or
cause to be done by virtue hereof; provided that Lender shall not exercise such
power of attorney unless and until Mortgagor fails to take the required action
within five (5) Business Days of demand unless the failure to so exercise it
could, in Lender’s reasonable judgment, result in a Material Adverse Effect.
Upon receipt of an affidavit of an officer of Lender as to the loss, theft,
destruction or mutilation of the Note or any other Loan Document which is not of
public record, and, in the case of any such mutilation, upon surrender and
cancellation of such Note or other applicable Loan Document, Mortgagor will
issue, in lieu thereof, a replacement Note or other applicable Loan Document,
dated the date of such lost, stolen, destroyed or mutilated Note or other Loan
Document in the same principal amount thereof and otherwise of like
tenor.

     

    
      
        
        

      

      
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    Section
2.04. Recording of Security
Instrument, etc.
Mortgagor forthwith upon the execution and delivery of this Security Instrument
and thereafter, at the request of Lender, from time to time, will cause this
Security Instrument, and any security instrument 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 perfect and protect the lien or security interest hereof
upon, and the interest of Lender in, the Property. Mortgagor will pay all
filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Security Instrument, any
mortgage, deed of trust or deed to secure debt, as applicable, supplemental
hereto, any security instrument with respect to the Property and any instrument
of further assurance, and all federal, state, county and municipal taxes,
duties, imposts, assessments and charges imposed on, or arising out of or in
connection with the execution, delivery and recording of this Security
Instrument, any mortgage, deed of trust or deed to secure debt, as applicable,
supplemental hereto, any security instrument with respect to the Property or any
instrument of further assurance, except where prohibited by law to do so, in
which event Lender may declare the Debt to be immediately due and payable.
Mortgagor shall hold harmless and indemnify Lender, and its successors and
assigns, against any liability incurred as a result of the imposition of any tax
on the making and recording of this Security Instrument.

     

    Section
2.05. Representations and
Warranties as to the Property.
Mortgagor represents and warrants with respect to the Property as
follows:

     

    (a) Lien Priority and
Perfection. This
Security Instrument is a valid and enforceable (and, upon recordation in the
Official Records, will be a perfected) first lien on the Property, free and
clear of all encumbrances, security interests, and liens having priority over
the lien and security interest of this Security Instrument, except for the items
set forth as exceptions to or subordinate matters in the title insurance policy
insuring the lien of this Security Instrument, none of which, individually or in
the aggregate, materially interfere with the benefits of the security intended
to be provided by this Security Instrument, materially affect the value or
insurability of the Property, impair the use or operation of the Property for
the use currently being made thereof or impair Mortgagor’s ability to pay its
obligations in a timely manner (such items being the “Permitted
Encumbrances”).

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

     

    (b) Title.
Mortgagor has, subject only to the Permitted Encumbrances, good, insurable and
marketable fee simple title to the Premises, Improvements and Fixtures
(collectively, the “Realty”) and to
all easements and rights benefiting the Realty and has the right, power and
authority to mortgage, encumber, give, grant, bargain, sell, alien, enfeoff,
convey, confirm, pledge, assign, and hypothecate the Property. Subject to
Permitted Encumbrances, Mortgagor will preserve its interest in and title to the
Property and will forever warrant and defend the same to Lender against any and
all claims made by, through or under Mortgagor and will forever warrant and
defend the validity and priority of the lien and security interest created
herein against the claims of all Persons whomsoever claiming by, through or
under Mortgagor. The foregoing warranty of title shall survive the foreclosure
of this Security Instrument and shall inure to the benefit of and be enforceable
by Lender in the event Lender acquires title to the Property pursuant to any
foreclosure. In addition, there are no outstanding options or rights of first
refusal to purchase the Property or Mortgagor’s ownership thereof.

     

    (c) Taxes and
Impositions. Other
than those being contested in accordance herewith, all taxes and other
Impositions and governmental assessments due and owing and not delinquent in
respect of, and affecting, the Property have been paid. Other than those being
contested in accordance herewith, Mortgagor has paid all Impositions which
constitute special governmental assessments in full, except for those
assessments which are permitted by applicable Legal Requirements to be paid in
installments, in which case all installments which are due and payable have been
paid in full. There are no pending, or to Mortgagor’s best knowledge, 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.

     

    (d) Casualty; Flood
Zone. Except
as set forth in the Engineering Report and Environmental Report, the Realty is
in good repair and free and clear of any damage, destruction or casualty
(whether or not covered by insurance) that would materially affect the value of
the Realty or the use for which the Realty was intended, there exists no
structural or other material defects or damages in or to the Property and
Mortgagor has not received any written notice from any insurance company or
bonding company of any material defect or inadequacies in the Property, or any
part thereof, which would materially and 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.
No portion of the Premises is located in an “area of special flood hazard,” as
that term is defined in the regulations of the Federal Insurance Administration,
Department of Housing and Urban Development, under the National Flood Insurance
Act of 1968, as amended (24 CFR § 1909.1) or Mortgagor has obtained the
flood insurance required by Section 3.01(a)(vi) hereof. The Premises either does
not lie in a 100 year flood plain that has been identified by the Secretary of
Housing and Urban Development or any other Governmental Authority or, if it
does, Mortgagor has obtained the flood insurance required by Section 3.01(a)(vi)
hereof.

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    (e) Completion;
Encroachment. All
Improvements necessary for the efficient use and operation of the Premises,
including, without limitation, all Improvements which were included for purposes
of determining the appraised value of the Property in the Appraisal, have been
completed and none of said Improvements lie outside the boundaries and building
restriction lines of the Premises. Except as set forth in the title insurance
policy insuring the lien of this Security Instrument, no improvements on
adjoining properties encroach upon the Premises.

     

    (f) Separate
Lot. The
Premises are taxed separately without regard to any other real estate and
constitute a legally subdivided lot under all applicable Legal Requirements (or,
if not subdivided, no subdivision or platting of the Premises is required under
applicable Legal Requirements), and for all purposes may be mortgaged,
encumbered, conveyed or otherwise dealt with as an independent parcel. Except as
previously disclosed in writing to Lender, the Property does not benefit from
any tax abatement or exemption.

     

    (g) Use. To the
best of Mortgagor’s knowledge, the existence of all Improvements, the present
use and operation thereof and the access of the Premises and the Improvements to
all of the utilities and other items referred to in paragraph (k) below are in
compliance in all material respects with all Leases affecting the Property and
all applicable Legal Requirements, including, without limitation, Environmental
Statutes, Development Laws and Use Requirements. Mortgagor has not received any
notice from any Governmental Authority alleging any uncured violation relating
to the Property of any applicable Legal Requirements. There will be no
residential use of the Property.

     

    (h) Licenses and
Permits.
Mortgagor currently holds and will continue to hold all certificates of
occupancy, licenses, registrations, permits, consents, franchises and approvals
of any Governmental Authority or any other Person which are material for the
lawful occupancy and operation of the Realty or which are material to the
ownership or operation of the Property or the conduct of Mortgagor’s business.
All such certificates of occupancy, licenses, registrations, permits, consents,
franchises and approvals are current and in full force and effect.

     

    (i) Environmental
Matters.
Mortgagor has received and reviewed the Environmental Report and has no reason
to believe that the Environmental Report contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained therein or herein, in light of the circumstances under which such
statements were made, not misleading.

     

    (j) Property
Proceedings. Other
than as previously disclosed in writing by Mortgagor to Lender, there are no
actions, suits or proceedings pending or, to Mortgagor’s knowledge, threatened
in any court or before any Governmental Authority or arbitration board or
tribunal (i) relating to (A) the zoning of the Premises or any part
thereof, (B) any certificates of occupancy, licenses, registrations,
permits, consents or approvals issued with respect to the Property or any part
thereof, (C) the condemnation of the Property or any part thereof, or
(D) the condemnation or relocation of any roadways abutting the Premises
required for access or the denial or limitation of access to the Premises or any
part thereof from any point of access to the Premises, (ii) asserting that
(A) any such zoning, certificates of occupancy, licenses, registrations,
permits, consents and/or approvals do not permit the operation of any material
portion of the Realty as presently being conducted, (B) any material
improvements located on the Property or any part thereof cannot be located
thereon or operated with their intended use or (C) the operation of the
Property or any part thereof is in violation in any material respect of any
Environmental Statutes, Development Laws or other Legal Requirements or Space
Leases or Property Agreements or (iii) which might (A) affect the validity or
priority of any Loan Document or (B) have a Material Adverse
Effect.

     

    
      
        
        

      

      
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    (k) Utilities. The
Premises has rights of access to water, gas and/or electrical supply, storm and
sanitary sewerage facilities, other required public utilities (with respect to
each of the aforementioned items, by means of either a direct connection to the
source of such utilities or through connections available on publicly dedicated
roadways directly abutting the Premises or through permanent insurable easements
benefiting the Premises), fire and police protection, parking, and means of
direct access between the Premises and public highways over recognized curb cuts
(or such access to public highways is through private roadways which may be used
for ingress and egress pursuant to permanent insurable easements).

     

    (l) Mechanics’
Liens. The
Property is free and clear of any mechanics’ liens or liens in the nature
thereof, and no rights are outstanding that under law could give rise to any
such liens, any of which liens are or may be prior to, or equal with, the lien
of this Security Instrument, except those which are insured against by the title
insurance policy insuring the lien of this Security Instrument. No stop notices
have been served with respect to any work, labor or materials furnished to or
for the benefit of the Property or any portion thereof, and no disputes
currently exist with respect to any of such matters.

     

    (m) Title
Insurance. Lender
has received a lenders’ commitment to issue a title insurance policy insuring
this Security Instrument as a first lien on the Realty subject only to Permitted
Encumbrances.

     

    (n) Insurance. The
Property is insured in accordance with the requirements set forth in Article III
hereof.

     

    (o) Space
Leases.

     

    (i) Mortgagor
has delivered a true, correct and complete schedule of all Space Leases as of
the date hereof, which accurately and completely sets forth in all material
respects, for each such Space Lease, the following (collectively, the “Rent
Roll”): the name and address of the tenant with the lease expiration date,
extension and renewal options; the base rent and percentage rent payable; all
additional rent and pass through obligations; and the security deposit held
thereunder and the location of such deposit.

     

    (ii) Each
Space Lease constitutes the legal, valid and binding obligation of Mortgagor
and, to the knowledge of Mortgagor, is enforceable against the tenant thereof.
Except as set forth on the Rent Roll or in any
estoppel certificate delivered to Lender, no
default exists, or with the passing of time or the giving of notice would exist
by Mortgagor or, to the best of Mortgagor’s knowledge, by any tenant at the
Property, (A) under any Major Space Lease or (B) under any other Space Leases
which would, in the aggregate, have a Material Adverse Effect.

     

    
      
        
        

      

      
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    (iii) Except as
disclosed to Lender and to the best of Mortgagor’s knowledge, no tenant under
any Space Lease has, as of the date hereof, paid Rent more than thirty (30) days
in advance, and the Rents under such Space Leases have not been waived,
released, or otherwise discharged or compromised.

     

    (iv) Except as
set forth on the Rent Roll or previously disclosed in writing to Lender, all
material work to be performed by Mortgagor under the Space Leases has been
substantially performed, all contributions to be made by Mortgagor to the
tenants thereunder have been made except for any held-back amounts, and all
other conditions precedent to each such tenant’s obligations thereunder have
been satisfied.

     

    (v) Except as
previously disclosed to Lender in writing or in the Space Leases provided to
Lender, there are no options to terminate any Space Lease.

     

    (vi) Except as
previously disclosed in writing to Lender, each tenant under a Major Space Lease
has entered into occupancy of the demised premises to the extent required under
the terms of its Major Space Lease, and each such tenant is open and conducting
business with the public in the demised premises. Except as previously disclosed
in writing to Lender, to the best knowledge of Mortgagor, after due inquiry,
each tenant under a Lease other than a Major Space Lease has entered into
occupancy of its demised premises under its Lease to the extent required under
the terms of its Lease and each such tenant is open and conducting business with
the public in the demised premises.

     

    (vii) Mortgagor
has delivered to Lender true, correct and complete copies of all Space Leases
described in the Rent Roll.

     

    (viii) Each
Space Lease is in full force and effect and (except as disclosed on the Rent
Roll or in any estoppel certificate delivered to Lender) has not been assigned,
modified, supplemented or amended in any way.

     

    (ix) Except as
set forth on the Rent Roll, each tenant under each Space Lease is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment
for the benefit of creditors.

     

    (x) No Space
Lease provides any party with the right to obtain a lien or encumbrance upon the
Property superior to the lien of this Security Instrument or to subject to the
Property to any mechanics lien. 

     

    (p) Property
Agreements.

     

    (i) Mortgagor
has delivered to Lender true, correct and complete copies of all Property
Agreements.

     

    (ii) No
Property Agreement provides any party with the right to obtain a lien or
encumbrance upon the Property superior to the lien of this Security
Instrument.

     

    
      
        
        

      

      
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    (iii) To the
best of Mortgagor’s knowledge, no default exists or with the passing of time or
the giving of notice or both would exist under any Property Agreement which
would, individually or in the aggregate, have a Material Adverse
Effect.

     

    (iv) Mortgagor
has not received or given any written communication which alleges that a default
exists or, with the giving of notice or the lapse of time, or both, would exist
under the provisions of any Property Agreement.

     

    (v) No
condition exists whereby Mortgagor or any future owner of the Property may be
required to purchase any other parcel of land which is subject to any Property
Agreement or which gives any Person a right to purchase, or right of first
refusal with respect to, the Property.

     

    (vi) To the
best knowledge of Mortgagor, no offset or any right of offset exists respecting
continued contributions to be made by any party to any Property Agreement except
as expressly set forth therein. Except as previously disclosed to Lender in
writing, no material exclusions or restrictions on the utilization, leasing or
improvement of the Property (including non-compete agreements) exists in any
Property Agreement.

     

    (vii) All
“pre-opening” requirements contained in all Property Agreements (including, but
not limited to, all off-site and on-site construction requirements), if any,
have been fulfilled, and, to the best of Mortgagor’s knowledge, no condition now
exists whereby any party to any such Property Agreement could refuse to honor
its obligations thereunder.

     

    (viii) Except as
previously disclosed in writing to Lender, all work, if any, to be performed by
Mortgagor under each of the Property Agreements has been substantially
performed, all contributions to be made by Mortgagor to any party to such
Property Agreements have been made, and all other material conditions to such
party’s obligations thereunder have been satisfied.

     

    (q) Personal
Property.
Mortgagor has delivered to Lender a true, correct and complete schedule of all
personal property, if any, owned by Mortgagor and located upon the Realty or
used in connection with the use or operation of the Realty and Mortgagor
represents that it has good and marketable title to all such personal property,
free and clear of any liens or security interests, except for liens and security
interests created under the Loan Documents, liens and security interests
otherwise disclosed to Lender in writing and disclosed in the title insurance
policy insuring the lien of this Security Instrument, and liens and security
interests which describe the equipment and other personal property owned by
tenants.

     

    (r) Leasing Brokerage and
Management Fees. Except
as previously disclosed to Lender in writing, there are no brokerage fees or
commissions payable by Mortgagor with respect to the leasing of space at the
Property and there are no management fees payable by Mortgagor with respect to
the management of the Property.

     

    (s) Security
Deposits. All
security deposits with respect to the Property on the date hereof have been
transferred to the Security Deposit Account on the date hereof, and Mortgagor is
in compliance with all Legal Requirements relating to such security deposits as
to which failure to comply might, individually or in the aggregate, have a
Material Adverse Effect. 

     

    
      
        
        

      

      
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    (t) Appraisal.
Mortgagor has no knowledge that any of the facts or assumptions on which the
Appraisal was based are false or incomplete in any material respect and has no
information that would reasonably suggest that the fair market value determined
in the Appraisal does not reflect the actual fair market value of the
Property.

     

    (u) Representations
Generally. No
representation, warranty or statement of fact made by or on behalf of Mortgagor
in this Security Instrument or in any certificate, document or schedule
furnished to Lender pursuant hereto, contains any untrue statement of a material
fact or omits to state any material fact necessary to make statements contained
therein or herein not misleading (which may be to Mortgagor’s best knowledge
where so provided herein). There are no facts presently known to Mortgagor which
have not been disclosed to Lender which would, individually or in the aggregate,
have a Material Adverse Effect nor as far as Mortgagor can foresee might,
individually or in the aggregate, have a Material Adverse Effect.

     

    Section
2.06. Removal of
Lien. (a)
Mortgagor shall, at its expense, maintain this Security Instrument as a first
lien on the Property and shall keep the Property free and clear of all liens and
encumbrances of any kind and nature other than the Permitted Encumbrances.
Mortgagor shall, within thirty (30) days following receipt of notice of the
filing thereof, promptly discharge of record, by bond or otherwise, any such
liens and, promptly upon request by Lender, shall deliver to Lender evidence
reasonably satisfactory to Lender of the discharge thereof. 

     

    (b) Without
limitation to the provisions of Section 2.06(a) hereof, Mortgagor shall (i) pay,
from time to time when the same shall become due, all claims and demands of
mechanics, materialmen, laborers, and others which, if unpaid, might result in,
or permit the creation of, a lien on the Property or any part thereof, (ii)
cause to be removed of record (by payment or posting of bond or settlement or
otherwise) any mechanics’, materialmens’, laborers’ or other lien on the
Property, or any part thereof, or on the revenues, rents, issues, income or
profit arising therefrom, and (iii) in general, do or cause to be done, without
expense to Lender, everything reasonably necessary to preserve in full the lien
of this Security Instrument. If Mortgagor fails to comply with the requirements
of this Section 2.06(b), then, upon ten (10) Business Days’ prior notice to
Mortgagor, Lender may, but shall not be obligated to, pay any such lien, and
Mortgagor shall, within ten (10) Business Days after Lender’s demand therefor,
reimburse Lender for all sums so expended, together with interest thereon at the
Default Rate from the date advanced, all of which shall be deemed part of the
Debt. Nothing contained herein shall be deemed a consent or request of Lender,
express or implied, by inference or otherwise, to the performance of any
alteration, repair or other work by any contractor, subcontractor or laborer or
the furnishing of any materials by any materialmen in connection
therewith.

     

    (c) Notwithstanding
the foregoing, Mortgagor may contest any lien (other than a lien relating to
non-payment of Impositions, the contest of which shall be governed by Section
4.04 hereof) of the type set forth in subparagraph (b)(ii) of this Section 2.06
provided that, following prior notice to Lender (i) Mortgagor is contesting the
validity of such lien with due diligence and in good faith and by appropriate
proceedings, without cost or expense to Lender or any of its agents, employees,
officers, or directors, (ii) Mortgagor shall preclude the collection of, or
other realization upon, any contested amount from the Property or any revenues
from or interest in the Property, (iii) neither the Property nor any part
thereof nor interest therein, shall be in any danger of being sold, forfeited or
lost by reason of such contest by Mortgagor, (iv) such contest by Mortgagor
shall not affect the ownership, use or occupancy of the Property, (v) such
contest by Mortgagor shall not subject Lender or Mortgagor to the risk of civil
or criminal liability (other than the civil liability of Mortgagor for the
amount of the lien in question), (vi) such lien is subordinate to the lien of
this Security Instrument, (vii) Mortgagor has not consented to such lien, (viii)
Mortgagor has given Lender prompt notice of the filing of such lien and, upon
request by Lender from time to time, notice of the status of such contest by
Mortgagor and/or confirmation of the continuing satisfaction of the conditions
set forth in this Section 2.06(c), (ix) Mortgagor shall promptly pay the
obligation secured by such lien upon a final determination of Mortgagor’s
liability therefor, and (x) Mortgagor shall deliver written notice of its intent
to contest such lien at least thirty (30) days before commencing such contest
and also shall deliver to Lender, if requested by Lender, cash, a bond or other
security acceptable to Lender equal to 125% of the contested amount pursuant to
collateral arrangements reasonably satisfactory to Lender. 

     

    
      
        
        

      

      
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    Section
2.07. Cost of Defending and
Upholding this Security Instrument Lien. If any
action or proceeding is commenced to which Lender is made a party relating to
the Loan Documents and/or the Property or Lender’s interest therein or in which
it becomes necessary to defend or uphold the lien of this Security Instrument or
any other Loan Document, Mortgagor shall, on demand, reimburse Lender for all
expenses (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Lender in connection therewith, and such sum,
together with interest thereon at the Default Rate from and after such demand
until fully paid, shall constitute a part of the Debt.

     

    Section
2.08. Use of the
Property.
Mortgagor will use, or cause to be used, the Property for such use as is
permitted pursuant to applicable Legal Requirements including, without
limitation, under the certificate of occupancy applicable to the Property, and
which is required by the Loan Documents. Mortgagor shall not suffer or permit
the Property or any portion thereof to be used by the public, any tenant, or any
Person not subject to a Lease, in a manner as is reasonably likely to impair
Mortgagor’s title to the Property, or in such manner as may give rise to a claim
or claims of adverse usage or adverse possession by the public, or of implied
dedication of the Property or any part thereof.

     

    Section
2.09. Financial
Reports.
(a)
Mortgagor
will keep and maintain or will cause to be kept and maintained on a Fiscal Year
basis, in accordance with GAAP (or such other accounting basis reasonably
acceptable to Lender) consistently applied, proper and accurate books, tax
returns, records and accounts reflecting (i) all of the financial affairs
of Mortgagor and (ii) all items of income and expense in connection with the
operation of the Property or in connection with any services, equipment or
furnishings provided in connection with the operation thereof, whether such
income or expense may be realized by Mortgagor or by any other Person
whatsoever, excepting lessees unrelated to and unaffiliated with Mortgagor who
have leased from Mortgagor portions of the Premises for the purpose of occupying
the same. Lender shall have the right from time to time at all times during
normal business hours upon reasonable advance notice to examine such books, tax
returns, records and accounts at the office of Mortgagor or other Person
maintaining such books, tax returns, records and accounts and to make such
copies or extracts thereof as Lender shall desire. During the continuance of an
Event of Default, Mortgagor shall pay any costs and expenses incurred by Lender
to examine Mortgagor’s and Guarantor’s accounting records with respect to the
Property, as Lender shall determine to be necessary or appropriate in the
protection of Lender’s interest.

     

    
      
        
        

      

      
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    (b) Mortgagor
will furnish Lender (i) annually, within one hundred twenty (120) days following
the end of each Fiscal Year of Mortgagor and (ii) on a quarterly basis, within
thirty (30) days following the end of each fiscal quarter of Mortgagor, with a
complete copy of Mortgagor’s financial statement consistently applied covering
(A) all of the financial affairs of Mortgagor and (B) the operation of the
Property for such Fiscal Year or fiscal quarters, as applicable, and containing
a statement of revenues and expenses, a statement of assets and liabilities and
a statement of Mortgagor’s equity. Each annual financial statement shall be
prepared by an Independent certified public accountant that is reasonably
acceptable to Lender in accordance with GAAP (or such other accounting basis
reasonably acceptable to Lender). Upon request made in connection with a
Securitization of the Loan or after the occurrence of an Event of Default, such
annual financial statements shall be audited by an Independent certified public
accountant that is reasonably acceptable to Lender in accordance with GAAP.
Together with the financial statements required to be furnished pursuant to this
Section 2.09(b), Mortgagor shall furnish to Lender (A) an Officer’s Certificate
certifying as of the date thereof (1) that the financial statements accurately
represent the results of operations and financial condition of Mortgagor and the
Property all in accordance with GAAP (or such other accounting basis reasonably
acceptable to Lender) consistently applied, and (2) whether, to the best of
such officer’s knowledge, there exists a Default under the Note or any other
Loan Document executed and delivered by Mortgagor, and if such event or
circumstance exists, the nature thereof, the period of time it has existed and
the action then being taken to remedy such event or circumstance and (B)
together with the financial statements delivered pursuant to Section 2.09(b)(ii)
above, a statement showing (1) Pro-Forma Net Operating Income at the end of the
most recent fiscal quarter (subject to verification by Lender in its reasonable
discretion) and (2) the calculation of Debt Service Coverage.

     

    (c) Mortgagor
will furnish Lender monthly, within twenty (20) days following the end of each
month, with (i) a true, complete and correct cash flow statement with respect to
the Property in the form attached hereto as Exhibit C and made a part hereof,
showing (A) all cash receipts of any kind whatsoever and all cash payments and
disbursements, (B) year-to-date summaries of such cash receipts, payments
and disbursements, and (C) during an O&M Operative Period, Pro Forma Net
Operating Income (subject to the verification by Lender) and a calculation of
Debt Service Coverage, (ii) a certification of Manager stating that such cash
flow statement is true, complete and correct and a list of all litigation and
proceedings affecting Mortgagor or the Property in which the amount involved is
$250,000 or more, if not covered by insurance (or $2,500,000 or more whether or
not covered by insurance), (iii) the sales per square foot for each lessee under
the Space Leases to the extent such information is required to be delivered by
such lessees and (iv) an occupancy report for the Property.

     

    (d) Mortgagor
will furnish Lender monthly, within twenty (20) days following the end of each
month, with a certification of Manager stating that all Operating Expenses with
respect to the Property which had accrued as of the last day of the month
preceding the delivery of the cash flow statement referred to in clause (c)
above have been fully paid or otherwise reserved for by Manager (any such
certification or any certification furnished by a Manager pursuant to clause (c)
above, a “Manager
Certification”).

     

    
      
        
        

      

      
        -42-

        
          

        

      

      
        
        

      

    

     

    (e) Mortgagor
will furnish Lender annually, within twenty (20) days following the end of each
year and within twenty (20) days following receipt of such request therefor,
with a true, complete and correct rent roll for the Property, including a list
of which tenants are in default under their respective Leases, dated as of the
date of Lender’s request, identifying each tenant, the monthly rent and
additional rent, if any, payable by such tenant, the expiration date of such
tenant’s Lease, the security deposit, if any, held by Mortgagor under the Lease,
the space covered by the Lease, each tenant that has filed a bankruptcy,
insolvency, or reorganization proceeding since delivery of the last such rent
roll, the sales per square foot of each tenant, to the extent reported by
tenants under the terms of the Leases and the arrearages for such tenant, if
any, and such rent roll shall be accompanied by an Officer’s Certificate, dated
as of the date of the delivery of such rent roll, certifying that such rent roll
is true, correct and complete in all material respects as of its date and a copy
of each Space Lease entered into during the prior month.

     

    (f) Mortgagor
shall furnish to Lender, within thirty (30) days after Lender’s request
therefor, with such further detailed information with respect to the operation
of the Property and the financial affairs of Mortgagor as may be reasonably
requested by Lender.

     

    (g) Mortgagor
shall cause Manager to furnish to Lender, within twenty (20) days following the
end of each month, a schedule of tenant security deposits showing any activity
in the Security Deposit Account for such month, together with a certification of
Manager as to the balance in such Security Deposit Account and that such tenant
security deposits are being held in accordance with all Legal
Requirements.

     

    (h) Mortgagor
will furnish Lender annually, within ninety (90) days after the end of each
Fiscal Year, with a report setting forth (i) the Net Operating Income for such
Fiscal Year, (ii) the average occupancy rate of the Property during such
Fiscal Year, and (iii) the capital repairs, replacements and improvements
performed at the Property during such Fiscal Year and the aggregate Recurring
Replacement Expenditures made in connection therewith.

     

    (i) Mortgagor
shall furnish to Lender annually, within thirty (30) days of filing its
respective tax return, a copy of such tax return and either a copy of the tax
return of Guarantor within such thirty (30) day period or within ninety (90)
days after the end of each Fiscal Year, a certificate from an Independent
certified public accountant indicating the net worth of the
Guarantor.

     

    (j) Mortgagor
shall submit to Lender for Lender’s written approval an Annual Budget not later
than sixty (60) days prior to the commencement of each Fiscal Year or, with
respect to the Fiscal Year in which the Closing Date occurs, within sixty (60)
days of the Closing Date, in form satisfactory to Lender setting forth in
reasonable detail budgeted monthly operating income and monthly operating
capital and other expenses for the Property. Each Annual Budget shall contain,
among other things, limitations on management fees, third party service fees,
and other expenses as Mortgagor may reasonably determine. Lender shall have the
right to approve such Annual Budget which approval shall not be unreasonably
withheld, and in the event that Lender objects to the proposed Annual Budget
submitted by Mortgagor, Lender shall advise Mortgagor of such objections within
ten (10) Business Days after receipt thereof (and deliver to Mortgagor a
reasonably detailed description of such objections) and Mortgagor shall, within
four (4) Business Days after receipt of notice of any such objections, revise
such Annual Budget and resubmit the same to Lender. Lender shall advise
Mortgagor of any objections to such revised Annual Budget within seven (7)
Business Days after receipt thereof (and deliver to Mortgagor a reasonably
detailed description of such objections) and Mortgagor shall revise the same in
accordance with the process described herein until Lender approves an Annual
Budget, provided, however, that if Lender shall not advise Mortgagor of its
objections to any proposed Annual Budget within the applicable time period set
forth in this Section, then such proposed Annual Budget shall be deemed approved
by Lender. Until such time that Lender approves a proposed Annual Budget, the
most recently Approved Annual Budget shall apply; provided that, such Approved
Annual Budget shall be adjusted to reflect actual increases in Basic Carrying
Costs and utilities expenses. In the event that Mortgagor must incur an
Extraordinary Expense, then Mortgagor shall promptly deliver to Lender a
reasonably detailed explanation of such proposed Extraordinary Expense for
Lender’s approval, which approval may be granted or denied in Lender’s
reasonable discretion; provided, however, so long as no O&M Operative Period
is then in existence, no approval from Lender shall be required if (i) a single
Extraordinary Expense is equal to or less than five percent (5%) of the amount
set forth in the Approved Annual Budget for expenses related to such
Extraordinary Expense, or (ii) if no sum was budgeted for such expense in the
Approved Annual Budget, the Extraordinary Expense is less than or equal to five
percent (5%) of the Approved Annual Budget, provided that all Extraordinary
Expenses in any Fiscal Year do not exceed five percent (5%) of the Approved
Annual Budget. The Approved Annual Budget shall be prepared for the Property as
well as for all of the Cross-collateralized Properties.

     

    
      
        
        

      

      
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    (k) In the
event that Mortgagor fails to deliver any of the financial statements, reports
or other information required to be delivered to Lender pursuant to this Section
2.09 on or prior to their due dates, if any such failure shall continue for
fifteen (15) days following notice thereof from Lender, without waiving any
default arising out of such failure, Mortgagor shall pay to Lender on each
Payment Date for each month or portion thereof that any such financial
statement, report or other information remains undelivered, an administrative
fee in the amount of Two Thousand Five Hundred Dollars ($2,500) and (ii) if
Mortgagor has not delivered any such reports within five (5) Business Days of
Lender’s giving an additional notice to Mortgagor requesting the missing
financial statement, report or other information, an O&M Operative Period
shall be deemed to have commenced. Mortgagor agrees that such administrative fee
(i) is a fair and reasonable fee necessary to compensate Lender for its
additional administrative costs and increased costs relating to Mortgagor’s
failure to deliver the aforementioned statements, reports or other items as and
when required hereunder and (ii) is not a penalty.

     

    Section
2.10. Litigation.
Mortgagor will give prompt written notice to Lender of any litigation or
governmental proceedings pending or threatened (in writing) against Mortgagor
which might have a Material Adverse Effect.

     

    
      
        
        

      

      
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    Section
2.11. Updates of
Representations.
Mortgagor shall deliver to Lender within ten (10) Business Days of the request
of Lender an Officer’s Certificate updating all of the representations and
warranties contained in this Security Instrument and the other Loan Documents
and certifying that all of the representations and warranties contained in this
Security Instrument and the other Loan Documents, as updated pursuant to such
Officer’s Certificate, are true, accurate and complete as of the date of such
Officer’s Certificate or shall set forth the exceptions to representations
and/or warranties in reasonable detail, as applicable, and, upon Lender’s
request for further information with respect to such exceptions, shall provide
Lender such additional information as Lender may reasonably request.
Notwithstanding the foregoing, provided that no Event of Default has occurred
and is continuing, Mortgagor shall not be required to deliver the foregoing
Officer’s Certificate more than two (2) times in any Loan Year. 

     

    ARTICLE
III:   INSURANCE AND CASUALTY
RESTORATION

     

    Section
3.01. Insurance
Coverage.
Mortgagor shall, at its expense, maintain the following insurance coverages with
respect to the Property during the term of this Security
Instrument:

     

    (a) (i) Insurance
against loss or damage by fire, casualty and other hazards included in an
“all-risk” coverage endorsement or its equivalent, with such endorsements as
Lender may from time to time reasonably require and which are customarily
required by Institutional Lenders of similar properties similarly situated,
including, without limitation, if the Property constitutes a legal
non-conforming use, an ordinance of law coverage endorsement which contains
“Demolition Cost”, “Loss Due to Operation of Law” and “Increased Cost of
Construction” coverages, covering the Property in an amount not less than the
greater of (A) 100% of the insurable replacement value of the Property
(exclusive of the Premises and footings and foundations) and (B) such other
amount as is necessary to prevent any reduction in such policy by reason of and
to prevent Mortgagor, Lender or any other insured thereunder from being deemed
to be a co-insurer. Not less frequently than once every three (3) years,
Mortgagor, at its option, shall either (A) have the Appraisal updated or obtain
a new appraisal of the Property, (B) have a valuation of the Property made by or
for its insurance carrier conducted by an appraiser experienced in valuing
properties of similar type to that of the Property which are in the geographical
area in which the Property is located or (C) provide such other evidence as
will, in Lender’s sole judgment, enable Lender to determine whether there shall
have been an increase in the insurable value of the Property and Mortgagor shall
deliver such updated Appraisal, new appraisal, insurance valuation or other
evidence acceptable to Lender, as the case may be, and, if such updated
Appraisal, new appraisal, insurance valuation, or other evidence acceptable to
Lender reflects an increase in the insurable value of the Property, the amount
of insurance required hereunder shall be increased accordingly and Mortgagor
shall deliver evidence satisfactory to Lender that such policy has been so
increased.

     

    (ii) Commercial
general liability insurance against claims for personal and bodily injury and/or
death to one or more persons or property damage, occurring on, in or about the
Property (including the adjoining streets, sidewalks and passageways therein) in
such amounts as Lender may from time to time reasonably require (but in no event
shall Lender’s requirements be increased more frequently than once during each
twelve (12) month period) and which are customarily required by Institutional
Lenders for similar properties similarly situated, but not less than $1,000,000
per occurrence and $2,000,000 general aggregate on a per location basis and, in
addition thereto, not less than $75,000,000 excess and/or umbrella liability
insurance shall be maintained for any and all claims. 

     

    
      
        
        

      

      
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    (iii) Business
interruption, rent loss or other similar insurance (A) with loss payable to
Lender, (B) covering all risks required to be covered by the insurance provided
for in Section 3.01(a)(i) hereof and (C) in an amount not less than 90% of the
projected fixed or base rent plus percentage rent for the succeeding eighteen
(18) month period based on an occupancy rate of 100%. Such insurance coverage
shall provide for a six (6) month extended period of indemnity. The amount of
such insurance shall be determined upon the execution of this Security
Instrument, and not more frequently than once each calendar year thereafter
based on Mortgagor’s reasonable estimate of projected fixed or base rent plus
percentage rent, from the Property for the next succeeding eighteen (18) months.
In the event the Property shall be damaged or destroyed, Mortgagor shall and
hereby does assign to Lender all payment of claims under the policies of such
insurance, and all amounts payable thereunder, and all net amounts, shall be
collected by Lender under such policies and shall be applied in accordance with
this Security Instrument; provided, however, that nothing herein contained shall
be deemed to relieve Mortgagor of its obligations to timely pay all amounts due
under the Loan Documents.

     

    (iv) Intentionally
Deleted.

     

    (v) Insurance
against loss or damages from (A) leakage of sprinkler systems and (B) explosion
of steam boilers, air conditioning equipment, pressure vessels or similar
apparatus now or hereafter installed at the Property, in such amounts as Lender
may from time to time reasonably require and which are then customarily required
by Institutional Lenders of similar properties similarly situated.

     

    (vi) Flood
insurance in an amount equal to the full insurable value of the Property or the
maximum amount available, whichever is less, if the Improvements are located in
an area designated by the Secretary of Housing and Urban Development as being
“an area of special flood hazard” under the National Flood Insurance Program
(i.e., having
a one percent or greater chance of flooding), and if flood insurance is
available under the National Flood Insurance Act.

     

    (vii) Worker’s
compensation insurance or other similar insurance which may be required by
Governmental Authorities or Legal Requirements.

     

    (viii) Intentionally
Deleted.

     

    (ix) Insurance
against damage resulting from acts of terrorism, or an insurance policy without
an exclusion for damages resulting from terrorism, on terms consistent with the
commercial property insurance policy required under subsections (i), (ii) and
(iii) above.

     

    
      
        
        

      

      
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    (x) Such
other insurance as may from time to time be required by Lender and which is then
customarily required by Institutional Lenders for similar properties similarly
situated, against other insurable hazards, including, but not limited to,
malicious mischief, vandalism, mold, spores or fungus, sinkhole and mine
subsidence, acts of terrorism, windstorm and/or earthquake, due regard to be
given to the size and type of the Premises, Improvements, Fixtures and Equipment
and their location, construction and use. Additionally, Mortgagor shall carry
such insurance coverage as Lender may from time to time require if the failure
to carry such insurance may result in a downgrade, qualification or withdrawal
of any class of securities issued in connection with a Securitization or, if the
Loan is not yet part of a Securitization, would result in an increase in the
subordination levels of any class of securities anticipated to be issued in
connection with a proposed Securitization.

     

    (b) Mortgagor
shall cause any Manager of the Property to maintain fidelity insurance in an
amount equal to $5,000,000 or such lesser amount as Lender shall
approve.

     

    Section
3.02. Policy
Terms. (a)
All
insurance required by this Article III shall be in the form (other than with
respect to Sections 3.01(a)(vi) and (vii) above when insurance in those two
sub-sections is placed with a governmental agency or instrumentality on such
agency’s forms) and amount and with deductibles as, from time to time, shall be
reasonably acceptable to Lender, under valid and enforceable policies issued by
financially responsible insurers authorized to do business in the State where
the Property is located, with a general policyholder’s service rating of not
less than A- and a financial rating of not less than X as rated in the most
currently available Best’s Insurance Reports (or the equivalent, if such rating
system shall hereafter be altered or replaced) and shall have a claims paying
ability rating and/or financial strength rating, as applicable, of not less than
“AA” (or its equivalent), or such lower claims paying ability rating and/or
financial strength rating, as applicable, as Lender shall, in its sole and
absolute discretion, consent to, from a Rating Agency (one of which after a
Securitization in which Standard & Poor’s rates any securities issued in
connection with such Securitization, shall be Standard & Poor’s). Originals
or certified copies of all insurance policies shall be delivered to and held by
Lender. All such policies (except policies for worker’s compensation) shall name
Lender, its successors and/or assigns as an additional named insured, shall
provide for loss payable to Lender, its successors and/or assigns and shall
contain (or have attached): (i) standard “non-contributory mortgagee”
endorsement or its equivalent relating, inter alia, to
recovery by Lender notwithstanding the negligent or willful acts or omissions of
Mortgagor; (ii) a waiver of subrogation endorsement as to Lender; (iii) an
endorsement indicating that neither Lender nor Mortgagor shall be or be deemed
to be a co-insurer with respect to any casualty risk insured by such policies
and shall provide for a deductible per loss of an amount not more than the
lesser of (x) that which is customarily maintained by owners of similar
properties similarly situated and (y) five percent (5%) of the Adjusted Net Cash
Flow, and (iv) a provision that such policies shall not be canceled, terminated,
denied renewal or amended, including, without limitation, any amendment reducing
the scope or limits of coverage, without at least thirty (30) days’ prior
written notice to Lender in each instance. Not less than thirty (30) days prior
to the expiration dates of the insurance policies obtained pursuant to this
Security Instrument, originals or certified copies of renewals of such policies
(or certificates evidencing such renewals) bearing notations evidencing the
payment of premiums or accompanied by other reasonable evidence of such payment
(which premiums shall not be paid by Mortgagor through or by any financing
arrangement which would entitle an insurer to terminate a policy) shall be
delivered by Mortgagor to Lender. Mortgagor shall not carry separate insurance,
concurrent in kind or form or contributing in the event of loss, with any
insurance required under this Article III.

     

    
      
        
        

      

      
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    (b) If
Mortgagor fails to maintain and deliver to Lender the original policies or
certificates of insurance required by this Security Instrument, or if there are
insufficient funds in the Basic Carrying Costs Escrow Account to pay the
premiums for same, Lender may, at its option, procure such insurance, and
Mortgagor shall pay, or as the case may be, reimburse Lender for, all premiums
thereon promptly, upon demand by Lender, with interest thereon at the Default
Rate from the date paid by Lender to the date of repayment and such sum shall
constitute a part of the Debt.

     

    (c) Mortgagor
shall notify Lender of the renewal premium of each insurance policy and Lender
shall be entitled to pay such amount on behalf of Mortgagor from the Basic
Carrying Costs Escrow Account. With respect to insurance policies which require
periodic payments (i.e., monthly or quarterly) of premiums, Lender shall be
entitled to pay such amounts fifteen (15) days (or such lesser number of days as
Lender shall determine) prior to the respective due dates of such
installments.

     

    (d) The
insurance required by this Security Instrument may, at the option of Mortgagor,
be effected by blanket and/or umbrella policies issued to Mortgagor covering the
Property provided that, in each case, the policies otherwise comply with the
provisions of this Security Instrument and allocate to the Property, from time
to time (but in no event less than once a year), the coverage specified by this
Security Instrument, without possibility of reduction or coinsurance by reason
of, or damage to, any other property (real or personal) named therein. If the
insurance required by this Security Instrument shall be effected by any such
blanket or umbrella policies, Mortgagor shall furnish to Lender (i) original
policies or certified copies thereof, or an original certificate of insurance
together with reasonable access to the original of such policy to review such
policy’s coverage of the Property, with schedules attached thereto showing the
amount of the insurance provided under such policies applicable to the Property
and (ii) an Officer’s Certificate setting forth (A) the number of properties
covered by such policy, (B) the location by city (if available, otherwise,
county) and state of the properties, (C) the average square footage of the
properties, (D) a brief description of the typical construction type included in
the blanket policy and (E) such other information as Lender may reasonably
request.

     

    Section
3.03. Assignment of
Policies. (a)
Mortgagor
hereby assigns to Lender the proceeds of all insurance (other than worker’s
compensation and liability insurance) obtained pursuant to this Security
Instrument, all of which proceeds shall be payable to Lender as collateral and
further security for the payment of the Debt and the performance of the
Mortgagors’ obligations hereunder and under the other Loan Documents, and
Mortgagor hereby authorizes and directs the issuer of any such insurance to make
payment of such proceeds directly to Lender. Except as otherwise expressly
provided in Section 3.04 or elsewhere in this Article III, Lender shall have the
option, in its discretion, and without regard to the adequacy of its security,
to apply all or any part of the proceeds it may receive pursuant to this Article
in such manner as Lender may elect to any one or more of the following: (i) the
payment of the Debt, whether or not then due, in any proportion or priority as
Lender, in its discretion, may elect, (ii) the repair or restoration of the
Property, (iii) the cure of any Event of Default or (iv) the reimbursement of
the costs and expenses of Lender incurred pursuant to the terms hereof in
connection with the recovery of the Insurance Proceeds. Nothing herein contained
shall be deemed to excuse Mortgagor from repairing or maintaining the Property
as provided in this Security Instrument or restoring all damage or destruction
to the Property, regardless of the sufficiency of the Insurance Proceeds, and
the application or release by Lender of any Insurance Proceeds shall not cure or
waive any Default or notice of Default.

     

    
      
        
        

      

      
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    (b) In the
event of the foreclosure of this Security Instrument or any other transfer of
title or assignment of all or any part of the Property in extinguishment, in
whole or in part, of the Debt, all right, title and interest of Mortgagor in and
to all policies of insurance required by this Security Instrument shall inure to
the benefit of the successor in interest to Mortgagor or the purchaser of the
Property to the extent that such policies are assignable or transferable. If,
prior to the receipt by Lender of any proceeds, the Property or any portion
thereof shall have been sold on foreclosure of this Security Instrument or by
deed in lieu thereof or otherwise, or any claim under such insurance policy
arising during the term of this Security Instrument is not paid until after the
extinguishment of the Debt, and Lender shall not have received the entire amount
of the Debt outstanding at the time of such extinguishment, whether or not a
deficiency judgment on this Security Instrument shall have been sought or
recovered or denied, then, the proceeds of any such insurance to the extent of
the amount of the Debt not so received, shall be paid to and be the property of
Lender, together with interest thereon at the Default Rate, and the reasonable
attorney’s fees, costs and disbursements incurred by Lender in connection with
the collection of the proceeds which shall be paid to Lender and Mortgagor
hereby assigns, transfers and sets over to Lender all of Mortgagor’s right,
title and interest in and to such proceeds. Notwithstanding any provisions of
this Security Instrument to the contrary, Lender shall not be deemed to be a
trustee or other fiduciary with respect to its receipt of any such proceeds,
which may be commingled with any other monies of Lender; provided, however, that
Lender shall use such proceeds for the purposes and in the manner permitted by
this Security Instrument. Any proceeds deposited with Lender shall be held by
Lender in an interest-bearing account, but Lender makes no representation or
warranty as to the rate or amount of interest, if any, which may accrue on such
deposit and shall have no liability in connection therewith. Interest accrued,
if any, on the proceeds shall be deemed to constitute a part of the proceeds for
purposes of this Security Instrument. The provisions of this Section 3.03(b)
shall survive the termination of this Security Instrument by foreclosure, deed
in lieu thereof or otherwise as a consequence of the exercise of the rights and
remedies of Lender hereunder after a Default.

     

    Section
3.04. Casualty
Restoration. (a)
(i) In the
event of any damage to or destruction of any Individual Property, Mortgagor
shall give prompt written notice to Lender (which notice shall set forth
Mortgagor’s good faith estimate of the cost of repairing or restoring such
damage or destruction, or if Mortgagor cannot reasonably estimate the
anticipated cost of restoration, Mortgagor shall nonetheless give Lender prompt
notice of the occurrence of such damage or destruction, and will diligently
proceed to obtain estimates to enable Mortgagor to quantify the anticipated cost
and time required for such restoration, whereupon Mortgagor shall promptly
notify Lender of such good faith estimate) and, provided that restoration does
not violate any Legal Requirements, Mortgagor shall promptly commence and
diligently prosecute to completion the repair, restoration or rebuilding of such
Individual Property so damaged or destroyed to a condition such that such
Individual Property shall be at least equal in value to that immediately prior
to the damage to the extent practicable, in full compliance with all Legal
Requirements and the provisions of all Leases, and in accordance with Section
3.04(b) below. Such repair, restoration or rebuilding of the Property are
sometimes hereinafter collectively referred to as the “Work”.

     

    
      
        
        

      

      
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    (ii) Notwithstanding
the foregoing provisions of this Section 3.04, upon the occurrence of any damage
to or destruction of the Individual Property, provided that such damage or
destruction is not a Substantial Casualty, if in Lender’s reasonable judgment
the cost of repair of or restoration to the Individual Property required as a
result of any damage or destruction is less than $1,000,000 in the aggregate and
the Work can be completed in less than one hundred eighty (180) days (but in no
event beyond the date which is six (6) months prior to the Maturity Date), then
Lender, shall permit Mortgagor to apply for and receive the Insurance Proceeds
directly from the insurer (and Lender shall advise the insurer to pay over such
Insurance Proceeds directly to Mortgagor), to the extent required to pay for any
such Work, with any excess thereof to be retained by Mortgagor.

     

    (iii) Subject
to Section 3.04(a)(iv), Lender shall apply any Insurance Proceeds which it may
receive towards the Work in accordance with Section 3.04(b) and the other
applicable sections of this Article III.

     

    (iv) If (A) an
Event of Default shall have occurred and is continuing, (B) Lender is not
reasonably satisfied that the Debt Service Coverage, after substantial
completion of the Work, will be at least equal to the Required Debt Service
Coverage, (C) more than thirty percent (30%) of the reasonably estimated fair
market value of the applicable individual Property is damaged or destroyed, (D)
Lender is not reasonably satisfied that the Work can be completed six (6) months
prior to Maturity or (E) Lender is not reasonably satisfied that Leases covering
at least 75% of the rentable square footage for the applicable individual
Property (immediately prior to such damage or destruction) will not be
terminated due to the casualty during and following the restoration, or (F)
Lender is not reasonably satisfied that the Work can be completed within twelve
(12) months of the damage to or destruction of the applicable individual
Property (each, a “Substantial
Casualty”),
Lender shall have the option, in its sole discretion to apply any Insurance
Proceeds it may receive pursuant to this Security Instrument (less any
reasonable cost to Lender of recovering and paying out such proceeds incurred
pursuant to the terms hereof and not otherwise reimbursed to Lender, including,
without limitation, reasonable attorneys’ fees and expenses) to the payment of
the Debt, without any prepayment fee or charge of any kind, or to allow such
proceeds to be used for the Work pursuant to the terms and subject to the
conditions of Section 3.04(b) hereof and the other applicable sections of this
Article III.

     

    
      
        
        

      

      
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    (v) In the
event that Lender elects or is obligated hereunder to allow Insurance Proceeds
to be used for the Work, any excess proceeds remaining after completion of such
Work shall be applied to the payment of the Debt without any prepayment fee or
charge of any kind.

     

    (b) If any
Condemnation Proceeds in accordance with Section 6.01(a), or any Insurance
Proceeds in accordance with Section 3.04(a), are to be applied to the repair,
restoration or rebuilding of the Individual Property, then such proceeds shall
be deposited into a segregated interest-bearing bank account at the Bank, which
shall be an Eligible Account, held by Lender and shall be paid out from time to
time to Mortgagor as the Work progresses (less any reasonable cost to Lender of
recovering and paying out such proceeds, including, without limitation,
reasonable attorneys’ fees and costs allocable to inspecting the Work and the
plans and specifications therefor), subject to Section 5.13 hereof and to all of
the following conditions:

     

    (i) An
Independent architect or engineer selected by Mortgagor and reasonably
acceptable to Lender (an “Architect” or
“Engineer”) or a
Person otherwise reasonably acceptable to Lender, shall have delivered to Lender
a certificate estimating the cost of completing the Work, and, if the amount set
forth therein is more than the sum of the amount of Insurance Proceeds then
being held by Lender in connection with a casualty and amounts agreed to be paid
as part of a final settlement under the insurance policy upon or before
completion of the Work, Mortgagor shall have delivered to Lender (A) cash
collateral in an amount equal to such excess, or (B) an unconditional,
irrevocable, clean sight draft letter of credit, in form, substance and issued
by a bank reasonably acceptable to Lender, in the amount of such excess and
draws on such letter of credit shall be made by Lender to make payments pursuant
to this Article III following exhaustion of the Insurance Proceeds therefor or
(C) a completion bond in form, substance and issued by a surety company
reasonably acceptable to Lender.

     

    (ii) If the
cost of the Work is reasonably estimated by an Architect or Engineer in a
certification reasonably acceptable to Lender to be equal to or exceed five
percent (5%) of the Allocated Loan Amount for the Property, such Work shall be
performed under the supervision of an Architect or Engineer, it being understood
that the plans and specifications with respect thereto shall provide for Work so
that, upon completion thereof, the Property shall be at least equal in
replacement value and general utility to the Individual Property prior to the
damage or destruction.

     

    (iii) Each
request for payment shall be made on not less than ten (10) days’ prior notice
to Lender and shall be accompanied by a certificate of an Architect or Engineer,
or, if the Work is not required to be supervised by an Architect or Engineer, by
an Officer’s Certificate stating (A) that payment is for Work completed or
materials delivered in compliance with the plans and specifications, if required
under clause (ii) above, (B) that the sum requested is required to reimburse
Mortgagor for payments by Mortgagor to date, or is due to the contractors,
subcontractors, materialmen, laborers, engineers, architects or other Persons
rendering services or materials for the Work (giving a brief description of such
services and materials), and that when added to all sums previously paid out by
Lender does not exceed the value of the Work done to the date of such
certificate, (C) if the sum requested is to cover payment relating to repair and
restoration of personal property required or relating to the applicable
Property, that title to the personal property items covered by the request for
payment is vested in Mortgagor (unless Mortgagor is lessee of such personal
property), and (D) that the Insurance Proceeds and other amounts deposited by
Mortgagor held by Lender after such payment is equal to or more than the
estimated remaining cost to complete such Work; provided, however, that if such
certificate is given by an Architect or Engineer, such Architect or Engineer
shall certify as to clause (A) above, and such Officer’s Certificate shall
certify as to the remaining clauses above, and provided, further, that Lender
shall not be obligated to disburse such funds if Lender determines, in Lender’s
reasonable discretion, that Mortgagor shall not be in compliance with this
Section 3.04(b). Additionally, each request for payment shall contain a
statement signed by Mortgagor stating that the requested payment is for Work
satisfactorily done to date or for materials for the Work.

     

    
      
        
        

      

      
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    (iv) Each
request for payment shall be accompanied by waivers of lien, in customary form
and substance, covering that part of the Work for which payment or reimbursement
is being requested and, if required by Lender, a search prepared by a title
company or licensed abstractor, or by other evidence satisfactory to Lender that
there has not been filed with respect to the applicable Individual Property any
mechanic’s or other lien or instrument for retention of title relating to any
part of the Work not discharged of record. Additionally, as to any personal
property covered by the request for payment, Lender shall be furnished with
evidence of having incurred a payment obligation therefor and such further
evidence reasonably satisfactory to assure Lender that UCC filings therefor
provide a valid first lien on the personal property.

     

    (v) Lender
shall have the right to inspect the Work at all reasonable times upon reasonable
prior notice and may condition any disbursement of Insurance Proceeds upon
satisfactory compliance by Mortgagor with the provisions hereof. Neither the
approval by Lender of any required plans and specifications for the Work nor the
inspection by Lender of the Work shall make Lender responsible for the
preparation of such plans and specifications, or the compliance of such plans
and specifications of the Work, with any applicable law, regulation, ordinance,
covenant or agreement.

     

    (vi) Insurance
Proceeds shall not be disbursed more frequently than once every thirty (30)
days.

     

    (vii) Until
such time as the Work has been substantially completed, Lender shall not be
obligated to disburse up to ten percent (10%) of the cost of the Work (the
“Retention
Amount”) to
Mortgagor. Upon substantial completion of the Work, Mortgagor shall send notice
thereof to Lender and, subject to the conditions of Section 3.04(b)(i)-(iv),
Lender shall disburse one-half of the Retention Amount to Mortgagor; provided,
however, that the remaining one-half of the Retention Amount shall be disbursed
to Mortgagor when Lender shall have received copies of any and all final
certificates of occupancy or other certificates, licenses and permits required
for the ownership, occupancy and operation of the Property in accordance with
all Legal Requirements. Mortgagor hereby covenants to diligently seek to obtain
any such certificates, licenses and permits. Notwithstanding the foregoing,
Lender will release the portion of the Retention Amount being held with respect
to any contractor, subcontractor or materialman engaged in the Work as of the
date upon which the Architect or Engineer 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, provided, (A) 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
issuing the Lender’s title policy and (B) if required by Lender, the release of
any such portion of the Retention Amount 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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    (viii) Upon
failure on the part of Mortgagor promptly to commence the Work as provided for
herein or to proceed diligently and continuously to completion of the Work,
subject to Force Majeure, not to exceed sixty (60) days, which failure shall
continue after notice for thirty (30) days, Lender may apply any Insurance
Proceeds or Condemnation Proceeds it then or thereafter holds to the payment of
the Debt in accordance with the provisions of the Note; provided, however, that
Lender shall be entitled to apply at any time all or any portion of the
Insurance Proceeds or Condemnation Proceeds it then holds to the extent
necessary to cure any Event of Default.

     

    (c) If
Mortgagor (i) within ninety (90) days after the occurrence of any damage to the
applicable Individual Property or any portion thereof (or such shorter period as
may be required under any Major Space Lease) shall fail to submit to Lender for
approval plans and specifications for the Work (approved by the Architect and by
all Governmental Authorities whose approval is required), (ii) after any such
plans and specifications are approved by all Governmental Authorities, the
Architect and Lender, shall fail to promptly commence such Work as provided for
herein or (iii) shall fail to diligently prosecute such Work to completion,
then, in addition to all other rights available hereunder, at law or in equity,
Lender, or any receiver of the Property or any portion thereof, upon five (5)
days’ prior notice to Mortgagor (except in the event of emergency in which case
no notice shall be required), may (but shall have no obligation to) perform or
cause to be performed such Work, and may take such other steps as it reasonably
deems advisable. Mortgagor hereby waives, for Mortgagor, any claim, other than
for gross negligence or willful misconduct, against Lender and any receiver
arising out of any act or omission of Lender or such receiver pursuant hereto,
and Lender may apply all or any portion of the Insurance Proceeds (without the
need to fulfill any other requirements of this Section 3.04) to reimburse Lender
and such receiver, for all reasonable costs not reimbursed to Lender or such
receiver upon demand together with interest thereon at the Default Rate from the
date such amounts are advanced until the same are paid to Lender or the
receiver.

     

    (d) Subject
to Section 3.04(a)(ii) above, Mortgagor hereby irrevocably appoints Lender as
its attorney-in-fact, coupled with an interest, to collect and receive any
Insurance Proceeds paid with respect to any portion of the Property or the
insurance policies required to be maintained hereunder, and to endorse any
checks, drafts or other instruments representing any Insurance Proceeds whether
payable by reason of loss thereunder or otherwise.

     

    
      
        
        

      

      
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    Section
3.05. Compliance with Insurance
Requirements.
Mortgagor promptly shall comply with, and shall cause the Property to comply
with, all Insurance Requirements, even if such compliance requires structural
changes or improvements or would result in interference with the use or
enjoyment of the Property or any portion thereof provided Mortgagor shall have a
right to contest in good faith and with diligence such Insurance Requirements
provided (a) no Event of Default shall be continuing during such contest and
such contest shall not subject the Property or any portion thereof to any lien
or affect the priority of the lien of this Security Instrument, (b) failure to
comply with such Insurance Requirements will not subject Lender or any of its
agents, employees, officers or directors to any civil or criminal liability, (c)
such contest will not cause any reduction in insurance coverage, (d) such
contest shall not affect the ownership, use or occupancy of the Property, (e)
the Property or any part thereof or any interest therein shall not be in any
danger of being sold, forfeited or lost by reason of such contest by Mortgagor,
(f) Mortgagor has given Lender prompt notice of such contest and, upon request
by Lender from time to time, notice of the status of such contest by Mortgagor
and/or information of the continuing satisfaction of the conditions set forth in
clauses (a) through (e) of this Section 3.05, (g) upon a final determination of
such contest, Mortgagor shall promptly comply with the requirements thereof, and
(h) prior to and during such contest, Mortgagor shall furnish to Lender security
satisfactory to Lender, in its reasonable discretion, against loss or injury by
reason of such contest or the non-compliance with such Insurance Requirement
(and if such security is cash, Lender shall deposit the same in an
interest-bearing account and interest accrued thereon, if any, shall be deemed
to constitute a part of such security for purposes of this Security Instrument,
but Lender (i) makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue thereon and shall have no liability in
connection therewith and (ii) shall not be deemed to be a trustee or fiduciary
with respect to its receipt of any such security and any such security may be
commingled with other monies of Lender). Upon completion of any contest, Lender
shall return the security , if any, deposited with Lender pursuant to clause (h)
of this Section 3.05. If Mortgagor shall use the Property or any portion thereof
in any manner which could permit the insurer to cancel any insurance required to
be provided hereunder, Mortgagor immediately shall obtain a substitute policy
which shall satisfy the requirements of this Security Instrument and which shall
be effective on or prior to the date on which any such other insurance policy
shall be canceled. Mortgagor shall not by any action or omission invalidate any
insurance policy required to be carried hereunder unless such policy is replaced
as aforesaid, or materially increase the premiums on any such policy above the
normal premium charged for such policy. Mortgagor shall cooperate with Lender in
obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable to Lender in connection with the transaction contemplated
hereby.

     

    Section
3.06. Event of Default During
Restoration.
Notwithstanding anything to the contrary contained in this Security Instrument
including, without limitation, the provisions of this Article III, if, at the
time of any casualty affecting the Property or any part thereof, or at any time
during any Work, or at any time that Lender is holding or is entitled to receive
any Insurance Proceeds pursuant to this Security Instrument, a Default exists
and is continuing (whether or not it constitutes an Event of Default), Lender
shall then have no obligation to make such proceeds available for Work and
Lender shall have the right and option, to be exercised in its sole and absolute
discretion and election, with respect to the Insurance Proceeds, either to
retain and apply such proceeds in reimbursement for the actual costs, fees and
expenses incurred by Lender in accordance with the terms hereof in connection
with the adjustment of the loss and any balance toward payment of the Debt in
such priority and proportions as Lender, in its sole discretion, shall deem
proper, or towards the Work, upon such terms and conditions as Lender shall
determine, or to cure such Default, or to any one or more of the foregoing as
Lender, in its sole and absolute discretion, may determine. If Lender shall
receive and retain such Insurance Proceeds, the lien of this Security Instrument
shall be reduced only by the amount thereof received, after reimbursement to
Lender of expenses of collection, and actually applied by Lender in reduction of
the principal sum payable under the Note in accordance with the
Note.

     

    
      
        
        

      

      
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    Section
3.07. Application of Proceeds to
Debt Reduction.
(a) No
damage to the Property, or any part thereof, by fire or other casualty
whatsoever, whether such damage be partial or total, shall relieve Mortgagor
from its liability to pay in full the Debt and to perform its obligations under
this Security Instrument and the other Loan Documents.

     

    (b) If any
Insurance Proceeds are applied to reduce the Debt, Lender shall apply the same
in accordance with the provisions of the Note. 

     

    ARTICLE
IV:   IMPOSITIONS

     

    Section
4.01. Payment of Impositions,
Utilities and Taxes, etc. (a)
Mortgagor
shall pay or cause to be paid all Impositions prior to the date upon which any
fine, penalty, interest or cost for nonpayment is imposed, and furnish to
Lender, upon request, receipted bills of the appropriate taxing authority or
other documentation reasonably satisfactory to Lender evidencing the payment
thereof. If Mortgagor shall fail to pay any Imposition in accordance with this
Section and is not contesting or causing a contesting of such Imposition in
accordance with Section 4.04 hereof, or if there are insufficient funds in the
Basic Carrying Costs Escrow Account to pay any Imposition, Lender shall have the
right, but shall not be obligated, to pay that Imposition, and Mortgagor shall
repay to Lender, on demand, any amount paid by Lender, with interest thereon at
the Default Rate from the date of the advance thereof to the date of repayment,
and such amount shall constitute a portion of the Debt secured by this Security
Instrument and the other Cross-collateralized Mortgage.

     

    (b) Mortgagor
shall, prior to the date upon which any fine, penalty, interest or cost for the
nonpayment is imposed, pay or cause to be paid all charges for electricity,
power, gas, water and other services and utilities in connection with the
Property, and shall, upon request, deliver to Lender receipts or other
documentation reasonably satisfactory to Lender evidencing payment thereof. If
Mortgagor shall fail to pay any amount required to be paid by Mortgagor pursuant
to this Section 4.01 and is not contesting such charges in accordance with
Section 4.04 hereof, Lender shall have the right, but shall not be obligated, to
pay that amount, and Mortgagor will repay to Lender, on demand, any amount paid
by Lender with interest thereon at the Default Rate from the date of the advance
thereof to the date of repayment, and such amount shall constitute a portion of
the Debt secured by this Security Instrument and the other Cross-collateralized
Mortgage.

     

    (c) Mortgagor
shall pay all taxes, charges, filing, registration and recording fees, excises
and levies imposed upon Lender by reason of or in connection with its ownership
of any Loan Document or any other instrument related thereto, or resulting from
the execution, delivery and recording of, or the lien created by, or the
obligation evidenced by, any of them, other than income, franchise and other
similar taxes imposed on Lender and shall pay all corporate stamp taxes, if any,
and other taxes, required to be paid on the Loan Documents. If Mortgagor shall
fail to make any such payment within ten (10) days after written notice thereof
from Lender, Lender shall have the right, but shall not be obligated, to pay the
amount due, and Mortgagor shall reimburse Lender therefor, on demand, with
interest thereon at the Default Rate from the date of the advance thereof to the
date of repayment, and such amount shall constitute a portion of the Debt
secured by this Security Instrument and the other the Cross-collateralized
Mortgage.

     

    
      
        
        

      

      
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    Section
4.02. Deduction from
Value. In the
event of the passage after the date of this Security Instrument of any Legal
Requirement deducting from the value of the Property for the purpose of
taxation, any lien thereon or changing in any way the Legal Requirements now in
force for the taxation of this Security Instrument, the other the
Cross-collateralized Mortgage and/or the Debt for federal, state or local
purposes, or the manner of the operation of any such taxes so as to adversely
affect the interest of Lender, or impose any tax or other charge on any Loan
Document, then Mortgagor will pay such tax, with interest and penalties thereon,
if any, within the statutory period; provided, however, such tax payments shall
not include such taxes incurred more than ninety (90) days prior to the date
Mortgagor receives Lender’s notice of payment. In the event the payment of such
tax or interest and penalties by Mortgagor would be unlawful, or taxable to
Lender or unenforceable or provide the basis for a defense of usury, then in any
such event, Lender shall have the option, by written notice of not less than
sixty (60) days, to declare the Debt immediately due and payable, with no
prepayment fee or charge of any kind.

     

    Section
4.03. No Joint
Assessment.
Mortgagor shall not consent to or initiate the joint assessment of the Premises
or the Improvements (a) with any other real property constituting a separate tax
lot and Mortgagor represents and covenants that the Premises and the
Improvements are and shall remain a separate tax lot or (b) with any portion of
the Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Property as a
single lien.

     

    Section
4.04. Right to
Contest.
Mortgagor shall have the right, after prior notice to Lender, at its sole
expense, to contest by appropriate legal proceedings diligently conducted in
good faith, without cost or expense to Lender or any of its agents, employees,
officers or directors, the validity, amount or application of any Imposition or
any charge described in Section 4.01(b), provided that (a) no Default or Event
of Default shall exist during such proceedings and such contest shall not
(unless Mortgagor shall comply with clause (d) of this Section 4.04) subject the
Property or any portion thereof to any lien or affect the priority of the lien
of this Security Instrument, (b) failure to pay such Imposition or charge will
not subject Lender or any of its agents, employees, officers or directors to any
civil or criminal liability, (c) the contest suspends enforcement of the
Imposition or charge (unless Mortgagor first pays the Imposition or charge), (d)
prior to and during such contest, Mortgagor shall furnish to Lender security
satisfactory to Lender, in its reasonable discretion, against loss or injury by
reason of such contest or the non-payment of such Imposition or charge (and if
such security is cash, Lender may deposit the same in an interest-bearing
account and interest accrued thereon, if any, shall be deemed to constitute a
part of such security for purposes of this Security Instrument, but Lender (i)
makes no representation or warranty as to the rate or amount of interest, if
any, which may accrue thereon and shall have no liability in connection
therewith and (ii) shall not be deemed to be a trustee or fiduciary with respect
to its receipt of any such security and any such security may be commingled with
other monies of Lender), (e) such contest shall not affect the ownership, use or
occupancy of the Property, (f) the Property or any part thereof or any interest
therein shall not be in any danger of being sold, forfeited or lost by reason of
such contest by Mortgagor, (g) Mortgagor has given Lender notice of the
commencement of such contest and upon request by Lender, from time to time,
notice of the status of such contest by Mortgagor and/or confirmation of the
continuing satisfaction of clauses (a) through (f) of this Section 4.04, and (h)
upon a final determination of such contest, Mortgagor shall promptly comply with
the requirements thereof. Upon completion of any contest, Mortgagor shall
immediately pay the amount due, if any, and deliver to Lender proof of the
completion of the contest and payment of the amount due, if any, following which
Lender shall return the security, if any, deposited with Lender pursuant to
clause (d) of this Section 4.04. Mortgagor shall not pay any Imposition in
installments unless permitted by applicable Legal Requirements, and shall, upon
the request of Lender, deliver copies of all notices and bills relating to any
Imposition or other charge covered by this Article IV to Lender.

     

    
      
        
        

      

      
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    Section
4.05. No Credits on Account of the
Debt.
Mortgagor will not claim or demand or be entitled to any credit or credits on
account of the Debt for any part of the Impositions assessed against the
Property or any part thereof and no deduction shall otherwise be made or claimed
from the taxable value of the Property, or any part thereof, by reason of this
Security Instrument or the Debt. In the event such claim, credit or deduction
shall be required by Legal Requirements, Lender shall have the option, by
written notice of not less than forty-five (45) days, to declare the Debt
immediately due and payable, and Mortgagor hereby agrees to pay such amounts not
later than forty-five (45) days after such notice.

     

    Section
4.06. Documentary
Stamps. If, at
any time, the United States of America, any State or Commonwealth thereof or any
subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, this Security Instrument or any other Loan Document, or
impose any other tax or charges on the same, Mortgagor will pay the same, with
interest and penalties thereon, if any.

     

     

    ARTICLE
V: CENTRAL CASH
MANAGEMENT

     

    Section
5.01. Cash Flow.
Mortgagor hereby acknowledges and agrees that (i) the Rents (which for the
purposes of this Section 5.01 shall not include security deposits from tenants
under Leases held by Mortgagor and not applied towards Rent) derived from the
Property and (ii) Loss Proceeds (other than Loss Proceeds that Lender has
elected to apply to reduce the Debt in accordance with the terms of Article III
hereof) shall be utilized (a) to fund the Basic Carrying Costs Sub-Account, (b)
to pay all amounts to become due and payable under the Note by funding the Debt
Service Payment Sub-Account, (c) to fund the Recurring Replacement Reserve
Sub-Account, (d) to fund the Reletting Reserve Sub-Account, (e) to fund the
Operation and Maintenance Expense Sub-Account and (f) to fund the Curtailment
Reserve Sub-Account, all to the extent provided for herein. Mortgagor shall
collect all security deposits from tenants under valid Leases, which shall be
held by Mortgagor, in accordance with applicable law and in a segregated demand
deposit bank account at such commercial or savings bank or banks as may be
reasonably satisfactory to Lender (the “Security Deposit
Account”).
Mortgagor shall notify Lender of any security deposits held as letters of credit
and, upon Lender’s request, such letters of credit shall be promptly delivered
to Lender. Mortgagor shall have no right to withdraw funds from the Security
Deposit Account; provided that,
prior to the occurrence of an Event of Default, Mortgagor may withdraw funds
from the Security Deposit Account to refund or apply security deposits as
required by the Leases or by applicable Legal Requirements. During the
continuance of an Event of Default, all withdrawals from the Security Deposit
Account must be approved by Lender. Mortgagor shall cause all Rent which is due
and payable to Mortgagor pursuant to the terms of the Leases (other than
security deposits under valid Leases which are held in the Security Deposit
Account) to be paid through automated clearing house funds (“ACH”), a
check drawn on an account in a bank located in the continental United States
which is a member of the New York Clearing House Association or by Federal wire
directly to the Rent Account. Mortgagor shall give each tenant under a Lease an
irrevocable direction in the form of Exhibit E attached hereto and made a part
hereof to deliver all rent payments made by tenants and other payments
constituting Rent directly to the Rent Account and shall deliver copies of such
letters to Lender, together with an Officer’s Certificate certifying that such
letters were delivered to each tenant under the Leases within five (5) days of
the Closing Date. Notwithstanding the foregoing, if any Rent is received by
Mortgagor or Manager, then (a) such amounts shall be held in trust for the
benefit, and as the property, of Lender, (b) such amounts shall not be
commingled with any other funds or property of Mortgagor or Manager and (c)
Mortgagor or Manager shall deposit such amounts in the Rent Account within one
(1) Business Day of receipt. Mortgagor shall, or shall cause Manager to, give to
the bank in which the Rent Account is located an irrevocable written
instruction, in form and substance acceptable to, and acknowledged by, Lender,
that all funds deposited in the Rent Account shall be automatically transferred
through ACH or by Federal wire to the Central Account prior to 2:00 p.m. (New
York City time) on each Business Day. Upon execution of any Space Lease after
the Closing Date, Mortgagor shall deliver to Lender a copy of the irrevocable
direction letter referred to above, the receipt of which has been acknowledged
by the tenant under such Space Lease. Lender may elect to change the financial
institution in which the Central Account or the Rent Account shall be
maintained; however, Lender
shall give Mortgagor and the bank in which the Rent Account is located not fewer
than ten (10) Business Days’ prior notice of such change. Neither Mortgagor nor
Manager shall change the bank in which the Rent Account is located or the Rent
Account without the prior written consent of Lender. All fees and charges of the
bank in which the Central Account is located shall be paid by
Mortgagor.

     

    
      
        
        

      

      
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    Section
5.02. Establishment of
Accounts. Lender
has established the Escrow Accounts and the Central Account in the name of
Lender as secured party and Mortgagor has established the Central Account in the
joint names of Lender, as secured party, and Mortgagor. The Central Account, the
Rent Account and the Escrow Accounts shall be under the sole dominion and
control of Lender and funds held therein shall not constitute trust funds.
Mortgagor hereby irrevocably directs and authorizes Lender to withdraw funds
from the Central Account, the Rent Account and the Escrow Accounts, all in
accordance with the terms and conditions of this Security Instrument. Mortgagor
shall have no right of withdrawal in respect of the Central Account, the Rent
Account or the Escrow Accounts. Each transfer of funds to be made hereunder
shall be made only to the extent that funds are on deposit in the Central
Account, the Rent Account or the affected Sub-Account or Escrow Account, and
Lender shall have no responsibility to make additional funds available in the
event that funds on deposit are insufficient. The Central Account shall contain
the Basic Carrying Costs Sub-Account, the Debt Service Payment Sub-Account, the
Recurring Replacement Reserve Sub-Account, the Reletting Reserve Sub-Account,
the Operation and Maintenance Expense Sub-Account and the Curtailment Reserve
Sub-Account, each of which accounts shall be Eligible Accounts or book entry
sub-accounts of an Eligible Account (each a “Sub-Account” and
collectively, the “Sub-Accounts”) to
which certain funds shall be allocated and from which disbursements shall be
made pursuant to the terms of this Security Instrument. In addition, on the date
hereof, the Central Account shall also contain (x) a Sub-Account entitled the
“Engineering Escrow Sub Account”, which shall be funded by Mortgagor at Closing
with the Initial Engineering Deposit set forth on Exhibit B attached hereto
(representing the sum applicable to the Required Engineering Work described in
Section 5.12 below and on Exhibit D attached hereto. Disbursements from the
Engineering Sub-Account shall be made in accordance with Section 5.12 hereof.
Sums held in the Escrow Accounts may be commingled with other monies held by
Lender.

     

    
      
        
        

      

      
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    Section
5.03. Permitted
Investments. All
sums deposited into the Curtailment Reserve Escrow Account, Recurring
Replacement Reserve Sub-Account, the Reletting Reserve Escrow Account and the
Operation and Maintenance Expense Escrow Account shall be held in an interest
bearing account but Mortgagor acknowledges that Lender makes no representation
or warranty as to the rate of return. Lender shall not have any liability for
any loss in investments of funds in the Curtailment Reserve Escrow Account,
Recurring Replacement Reserve Sub-Account, the Reletting Reserve Escrow and the
Operation and Maintenance Expense Escrow Account and no such loss shall affect
Mortgagor’s obligation to fund, or liability for funding, the Central Account
and each Sub-Account and Escrow Account, as the case may be. Mortgagor agrees
that Lender shall include all such earnings on the Curtailment Reserve Escrow
Account, Recurring Replacement Reserve Sub-Account, the Reletting Reserve Escrow
Account and the Operation and Maintenance Expense Escrow Account as income of
Mortgagor (and, if Mortgagor is a partnership, limited liability company or
other pass-through entity, the partners, members or beneficiaries of Mortgagor,
as the case may be) for federal and applicable state and local tax purposes. All
interest paid or other earnings on funds deposited into the Recurring
Replacement Reserve Sub-Account, the Reletting Reserve Escrow Account and the
Operation and Maintenance Expense Escrow Account made hereunder shall be
deposited into the Central Account and shall be allocated to the Curtailment
Reserve Escrow Account, Recurring Replacement Reserve Sub-Account, the Reletting
Reserve Escrow Account and the Operation and Maintenance Expense Escrow Account.
Mortgagor shall pay all costs, fees and expenses incurred in connection with the
establishment and maintenance of, or the disbursement from the Curtailment
Reserve Escrow Account, the Recurring Replacement Reserve Sub-Account, the
Reletting Reserve Escrow Account and the Operation and Maintenance Expense
Escrow Account, which sums shall be due and payable by Mortgagor upon demand and
may be deducted by Lender from amounts on deposit in the Central Account or the
Escrow Accounts.

     

    
      
        
        

      

      
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    Section
5.04. Servicing
Fees. At the
option of Lender, the Loan may be serviced by a servicer (the “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Security Instrument to the Servicer. Provided that
no Default has occurred and is continuing, Mortgagor shall have no obligation to
reimburse Lender for servicing fees incurred in connection with the ordinary,
routine servicing of the Loan; provided, however, that Mortgagor shall reimburse
Lender for (a) any and all costs and expenses incurred after the occurrence of a
Default and (b) as otherwise provided for in this Security Instrument.
Additionally, Mortgagor shall pay all reasonable servicing fees of Servicer, if
any, not to exceed $500.00 per month, charged in connection with any
disbursement of funds from the Escrow Accounts pursuant to the Servicer’s then
standard conditions and rates.

     

    Section
5.05. Monthly Funding of
Sub-Accounts and Escrow Accounts. (a) On
or before each Payment Date during the term of the Loan, commencing on the first
(1st) Payment Date occurring after the month in which the Loan is initially
funded, Mortgagor shall pay or cause to be paid to the Central Account, Basic
Carrying Costs Monthly Installment, the Required Debt Service Payment, the
Recurring Replacement Monthly Installment, the Reletting Reserve Monthly
Installment and all sums required to be deposited in the Operation and
Maintenance Expense Sub-Account and the Curtailment Reserve Sub-Account, if any,
pursuant to clauses (i) through (viii) of this Section 5.05(a) and all funds
transferred or deposited into the Central Account shall be allocated among the
Sub-Accounts as follows and in the following priority: 

     

    (i) first, to
the Basic Carrying Costs Sub-Account, until an amount equal to the Basic
Carrying Costs Monthly Installment for such Current Month has been allocated to
the Basic Carrying Costs Sub-Account;

     

    (ii) second,
to the Debt Service Payment Sub-Account, until an amount equal to the Required
Debt Service Payment for the Payment Date occurring in such Current Month has
been allocated to the Debt Service Payment Sub-Account;

     

    (iii) third, to
the Recurring Replacement Reserve Sub-Account, until an amount equal to the
Recurring Replacement Monthly Installment for such Current Month has been
allocated to the Recurring Replacement Reserve Sub-Account;

     

    (iv) fourth,
to the Reletting Reserve Sub-Account, until an amount equal to the Reletting
Reserve Monthly Installment for such Current Month has been allocated to the
Reletting Reserve Sub-Account;

     

    (v) fifth,
but only during an O&M Operative Period, to the Operation and Maintenance
Expense Sub-Account in an amount equal to the Cash Expenses, other than
management fees payable to Affiliates of Mortgagor, for such Current Month
pursuant to the related Approved Annual Budget;

     

    (vi) sixth,
but only during an O&M Operative Period, to the Operation and Maintenance
Expense Sub-Account in an amount equal to the amount, if any, of the Net Capital
Expenditures for such Current Month pursuant to the related Approved Annual
Budget; 

     

    
      
        
        

      

      
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    (vii) seventh,
but only during an O&M Operative Period, to the Operation and Maintenance
Expense Sub-Account in an amount equal to the amount, if any, of the
Extraordinary Expenses approved by Lender for such Current Month;

     

    (viii) eighth,
but only during an O&M Operative Period, the balance, if any, to the
Curtailment Reserve Sub-Account. 

     

    Provided
that (I) no Event of Default has occurred and is continuing and (II) Lender has
received the Manager Certification referred to in Section 2.09(d) hereof for the
most recent period for which the same is due, Lender agrees that in each Current
Month any amounts deposited into or remaining in the Central Account after the
Sub-Accounts have been funded in accordance with clauses (i) through (viii)
above with respect to the Current Month and any periods prior thereto, shall be
disbursed by Lender to Mortgagor on the Payment Date and, to the extent that
funds are available for such purpose, on the fifteenth and twenty-fifth day of
each Current Month or, if such days are not Business Days, on the next
succeeding Business Day in accordance with Mortgagor’s irrevocable written
instruction delivered to Lender on the Closing Date. During the existence of an
Event of Default, no funds held in the Central Account shall be distributed to
Mortgagor and Lender shall have the right to apply all or any portion of the
funds held in the Central Account or any Sub-Account or any Escrow Account to
the Debt in Lender’s sole discretion.

     

    (b)  On each
Payment Date, (i) sums held in the Basic Carrying Costs Sub-Account shall be
transferred to the Basic Carrying Costs Escrow Account, (ii) sums held in the
Debt Service Payment Sub-Account, together with any amounts deposited into the
Central Account that are either (x) Loss Proceeds that Lender has elected to
apply to reduce the Debt in accordance with the terms of Article III hereof or
(y) excess Loss Proceeds remaining after the completion of any restoration
required hereunder, shall be transferred to Lender to be applied towards the
Required Debt Service Payment, (iii) sums held in the Recurring Replacement
Reserve Sub-Account shall be transferred to the Recurring Replacement Reserve
Escrow Account, (iv) sums held in the Reletting Reserve Sub-Account shall be
transferred to the Reletting Reserve Escrow Account, (v) sums held in the
Operation and Maintenance Expense Sub-Account shall be transferred to the
Operation and Maintenance Expense Escrow Account; and (vi) sums held in the
Curtailment Reserve Sub-Account shall be transferred to the Curtailment Reserve
Escrow Account.

     

    (c)  While
this Security Instrument is cross-collateralized with the other
Cross-collateralized Mortgage, the monies in the Central Account relating to all
of the Cross-collateralized Property(s) shall be commingled and the cash
management arrangements hereunder and under the other Cross-collateralized
Mortgage shall be administered as if it were under one waterfall. 

     

    Section
5.06. Payment of Basic Carrying
Costs.
Mortgagor hereby agrees to pay all Basic Carrying Costs (without regard to the
amount of money in the Basic Carrying Costs Sub-Account or the Basic Carrying
Costs Escrow Account). At least ten (10) Business Days prior to the due date of
any Basic Carrying Costs, and not more frequently than once each month,
Mortgagor may notify Lender in writing and request that Lender pay such Basic
Carrying Costs on behalf of Mortgagor on or prior to the due date thereof, and,
provided that no Event of Default has occurred and that there are sufficient
funds available in the Basic Carrying Costs Escrow Account, Lender shall make
such payments out of the Basic Carrying Costs Escrow Account before same shall
be delinquent. Together with each such request, Mortgagor shall furnish Lender
with bills and all other documents necessary, as reasonably determined by
Lender, for the payment of the Basic Carrying Costs which are the subject of
such request. Mortgagor’s obligation to pay (or cause Lender to pay) Basic
Carrying Costs pursuant to this Security Instrument shall include, to the extent
permitted by applicable law, Impositions resulting from future changes in law
which impose upon Lender an obligation to pay any property taxes or other
Impositions or which otherwise adversely affect Lender’s interests as provided
for in this Security Instrument.

     

    
      
        
        

      

      
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    Provided
that no Event of Default shall have occurred, all funds deposited into the Basic
Carrying Costs Escrow Account shall be held by Lender pursuant to the provisions
of this Security Instrument and shall be applied in payment of Basic Carrying
Costs in accordance with the terms hereof. Should an Event of Default occur, the
sums on deposit in the Basic Carrying Costs Sub-Account and the Basic Carrying
Costs Escrow Account may be applied by Lender in payment of any Basic Carrying
Costs or may be applied to the payment of the Debt or any other charges
affecting all or any portion of the Cross-collateralized Properties as Lender in
its sole discretion may determine; provided,
however, that no
such application shall be deemed to have been made by operation of law or
otherwise until actually made by Lender as herein provided.

     

    Section
5.07. Reletting Reserve Escrow
Account. (a)
Mortgagor hereby agrees to pay all Reletting Expenditures (without regard to the
amount of money then available in the Reletting Reserve Sub-Account or the
Reletting Reserve Escrow Account). Upon the execution of any Space Lease with
respect to which Mortgagor is obligated to undertake or pay for any Reletting
Expenditures, Mortgagor shall submit to Lender (i) an itemized line item budget
(a “Budget”)
reasonably acceptable to Lender outlining all of the Reletting Expenditures,
(ii) a copy of the signed Lease for which said Reletting Expenditures relate, in
each case which has an expiration date at least three (3) years after the
commencement thereof and which is otherwise in compliance with the provisions of
this Security Instrument, (iii) a copy of the plans and specifications, if any,
for the proposed Reletting Expenditures and (iv) an Officer’s Certificate with
respect to the items referred to in clauses (i) through (iii) and setting forth
an anticipated completion date for the Reletting Expenditures. Thereafter,
provided that no Event of Default has occurred and is continuing and that Lender
has received a written request from Mortgagor for payment or reimbursement of
any costs incurred in connection with any Reletting Expenditures, together with
(i) unconditional lien waivers (subject only to payment), (ii) a statement from
an Architect or Engineer, indicating that such portion of the Reletting
Expenditures for which payment or reimbursement is sought has been substantially
completed in compliance with all Legal Requirements, (iii) unless Mortgagor
requests disbursement by means of check payable jointly to Mortgagor and the
applicable vendor, copies of bills for such Reletting Expenditures marked “paid
in full” (or such other documentation reasonably satisfactory to Lender to
establish the payment of the Reletting Expenditures) for the portion due and for
which payment or reimbursement is sought, (iv) upon final completion of such
Reletting Expenditures, tenant estoppel certificates from the tenant leasing
space in the Premises for whom the Reletting Expenditures are being made which
indicate, among other things, that the tenant under such Space Lease has been in
occupancy and open for business for at least one full calendar month and paid
all rents due under the Space Lease without abatement, suspension, deferment,
diminution, reduction or other allowances for at least one full calendar month,
and (v) such other documentation as may be reasonably requested by Lender to
establish that the Reletting Expenditures or portion thereof which are the
subject of such request have been completed, all of which are reasonably
acceptable in form and substance to Lender, Lender shall disburse to Mortgagor,
to the extent of funds remaining in the Reletting Reserve Escrow Account, any
actual expenses incurred in connection with such Reletting Expenditures which
were set forth in the approved Budget provided that Mortgagor may make a request
for disbursement of sums from the Reletting Reserve Escrow Account no more than
once during any month and any request (other than the final request) shall be in
a minimum amount of $5,000. With respect to any Reletting Expenditures which
relate to brokerage commissions, upon the receipt of (i) copies of bills for
such Reletting Expenditures marked “paid in full”, (ii) tenant estoppel
certificates from the tenant leasing space in the Premises for which Lease the
brokerage commissions are due which indicate, among other things, that the
tenant under such Space Lease has been in occupancy and open for business for at
least one full calendar month and paid all rents due under the Space Lease
without abatement, suspension, deferment, diminution, reduction or other
allowances for at least one full calendar month and (iii) a copy of the signed
Lease for which said Reletting Expenditures relate, in each case which has an
expiration date at least three (3) years, all of which are reasonably acceptable
to Lender, Lender shall disburse to Mortgagor any actual expenses incurred in
connection with such Reletting Expenditures out of the Reletting Reserve Escrow
Account. Lender shall not be required to make any disbursements out of the
Reletting Reserve Escrow Account if an Event of Default shall have occurred and
is continuing, if more than one such request is made in any month or if
sufficient funds are not available in the Reletting Reserve Escrow
Account.

     

    
      
        
        

      

      
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    (b) In
addition, Mortgagor shall pay to Lender for deposit with Lender all funds
received by Mortgagor in excess of $50,000 in connection with any cancellation,
termination or surrender of any Lease, including, but not limited to, any
surrender or cancellation fees, buyout fees, or reimbursements for tenant
improvements and leasing commissions (“Termination Payments”); provided, as long
as no Event of Default exists, when the applicable space is re-leased pursuant
to a Space Lease entered into in accordance with the terms of this Security
Instrument, any such Termination Payments on deposit with Lender and remaining
after payment of all tenant improvements and leasing commissions in connection
with such new Space Lease pursuant to 5.07(a) above shall be paid to Mortgagor
upon the occupancy and the payment of rents due under the new Space Lease for at
least one full calendar month

     

    (c) Provided
that no Event of Default shall have occurred, all funds deposited into the
Reletting Reserve Escrow Account relating to Reletting Expenditures shall be
held by Lender pursuant to the provisions of this Security Instrument and shall
be applied in payment of Reletting Expenditures. Should an Event of Default
occur, the sums on deposit in the Reletting Reserve Sub-Account and the
Reletting Reserve Escrow Account may be applied by Lender in payment of any
Reletting Expenditures or may be applied to the payment of the Debt or any other
charges affecting all or any portion of the Property, as Lender, in its sole
discretion, may determine; provided,
however, that no
such application shall be deemed to have been made by operation of law or
otherwise until actually made by Lender as herein provided.

     

    
      
        
        

      

      
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    (d) In the
event that Mortgagor holds any letters of credit as security for obligations
under Leases, within thirty (30) days (or if any letters of credit may expire
within such thirty (30) day period, prior to the expiration of such letter of
credit) of the occurrence of a monetary event of default or a material
non-monetary event of default under the related Lease, Mortgagor shall present
for draw and use all commercially reasonable efforts to draw the full amount
which it is entitled to draw under such letter of credit; provided, however,
Mortgagor shall not be obliged to draw on such letter of credit if (i) Mortgagor
has submitted to Lender a plan of action to resolve any event of default which
gave rise to Mortgagor’s right to draw on the applicable letter of credit and
Lender shall, in its reasonable discretion, have consented to such plan or
Mortgagor is precluded from making a draw on the applicable letter of credit by
applicable law, and (ii) the term of such letter of credit will not expire prior
to the implementation of such submitted plan. Mortgagor shall deliver to Lender
all security deposits which are applied against sums due to Mortgagor under
Leases (including, without limitation, all sums drawn on letters of credits held
as security for obligations of tenants under Leases) and Rent paid by or on
behalf of any lessee under a Space Lease in whole or partial consideration for
the termination, cancellation or surrender of any Space Lease including, without
limitation, surrender or cancellation fees, buy-out fees or reimbursements for
tenant improvements or leasing commissions, within five (5) Business Days of
receipt thereof and all such sums shall be held in the Reletting Reserve Escrow
Account and shall be disbursed therefrom as set forth above.

     

    Section
5.08. Recurring Replacement
Reserve Escrow Account.
Mortgagor hereby agrees to pay all Recurring Replacement Expenditures with
respect to the Property (without regard to the amount of money then available in
the Recurring Replacement Reserve Sub-Account or the Recurring Replacement
Reserve Escrow Account). Provided that Lender has received written notice from
Mortgagor at least five (5) Business Days prior to the due date of any payment
relating to Recurring Replacement Expenditures and not more frequently than once
each month, and further provided that no Event of Default has occurred and is
continuing, that there are sufficient funds available in the Recurring
Replacement Reserve Escrow Account and that Mortgagor shall have theretofore
furnished Lender with lien waivers, copies of bills, invoices and other
reasonable documentation as may be required by Lender to establish that the
Recurring Replacement Expenditures which are the subject of such request
represent amounts due for completed or partially completed capital work and
improvements performed at the Property, Lender shall make such payments out of
the Recurring Replacement Reserve Escrow Account. 

     

    Provided
that no Event of Default shall have occurred, all funds deposited into the
Recurring Replacement Reserve Escrow Account shall be held by Lender pursuant to
the provisions of this Security Instrument and shall be applied in payment of
Recurring Replacement Expenditures. Should an Event of Default occur, the sums
on deposit in the Recurring Replacement Reserve Sub-Account and the Recurring
Replacement Reserve Escrow Account may be applied by Lender in payment of any
Recurring Replacement Expenditures or may be applied to the payment of the Debt
or any other charges affecting all or any portion of the Cross-collateralized
Properties, as Lender in its sole discretion may determine; provided,
however, that no
such application shall be deemed to have been made by operation of law or
otherwise until actually made by Lender as herein provided.

     

    
      
        
        

      

      
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    Section
5.09. Operation and Maintenance
Expense Escrow Account.
Mortgagor hereby agrees to pay all Operating Expenses with respect to the
Property (without regard to the amount of money then available in the Operation
and Maintenance Expense Sub-Account or the Operation and Maintenance Expense
Escrow Account). All funds allocated to the Operation and Maintenance Expense
Escrow Account shall be held by Lender pursuant to the provisions of this
Security Instrument. Any sums held in the Operation and Maintenance Expense
Escrow Account shall be disbursed to Mortgagor within five (5) Business Days of
receipt by Lender from Mortgagor of (a) a written request for such disbursement
which shall indicate the Operating Expenses (exclusive of Basic Carrying Costs
and any management fees payable to Mortgagor or to Affiliates of Mortgagor) for
which the requested disbursement is to pay and (b) an Officer’s Certificate
stating that no Operating Expenses with respect to the Property are more than
sixty (60) days past due; provided,
however, in the
event that Mortgagor legitimately disputes any invoice for an Operating Expense,
and (i) no Event of Default has occurred and is continuing hereunder, (ii)
Mortgagor shall have set aside adequate reserves for the payment of such
disputed sums together with all interest and late fees thereon, (iii) Mortgagor
has complied with all the requirements of this Security Instrument relating
thereto, and (iv) the contesting of such sums shall not constitute a default
under any other instrument, agreement, or document to which Mortgagor is a
party, then Mortgagor may, after certifying to Lender as to items (i) through
(iv) hereof, contest such invoice. Together with each such request, Mortgagor
shall furnish Lender with bills and all other documents necessary for the
payment of the Operating Expenses which are the subject of such request.
Mortgagor may request a disbursement from the Operation and Maintenance Expense
Escrow Account no more than one (1) time per calendar month. Should an Event of
Default occur and be continuing, the sums on deposit in the Operation and
Maintenance Expense Sub-Account or the Operation and Maintenance Expense Escrow
Account may be applied by Lender in payment of any Operating Expenses for the
Property or may be applied to the payment of the Debt or any other charges
affecting all or any portion of the Property as Lender, in its sole discretion,
may determine; provided,
however, that no
such application shall be deemed to have been made by operation of law or
otherwise until actually made by Lender as herein provided.

     

    Section
5.10. Intentionally
Deleted

     

    Section
5.11. Curtailment Reserve Escrow
Account. Funds
deposited into the Curtailment Reserve Escrow Account during an O&M
Operative Period shall be held by Lender in the Curtailment Reserve Escrow
Account as additional security for the Loan until the Loan has been paid in
full. Notwithstanding anything herein to the contrary, provided that no Event of
Default and no O&M Operative Period has occurred and is continuing, Lender
shall, upon written request from Mortgagor, disburse all sums contained in the
Curtailment Reserve Escrow Account to Mortgagor. Should an Event of Default
occur, the sums on deposit in the Curtailment Reserve Sub-Account and the
Curtailment Reserve Escrow Account may be applied by Lender to the payment of
the Debt or other charges affecting all or any portion of the Property, as
Lender, in its sole discretion, may determine; provided, however, that no such
application shall be deemed to have been made by operation of law or otherwise
until actually made by Lender as herein provided. Lender shall calculate the
Debt Service Coverage as of the end of each fiscal quarter. Such calculation
shall be completed within ten (10) Business Days of Lender’s receipt of the
quarterly financial statements required under Section 2.09(b) with respect to
such fiscal quarter.

     

    
      
        
        

      

      
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    Section
5.12. Performance of Engineering
Work. (a)
Mortgagor
shall promptly commence and diligently thereafter pursue to completion (without
regard to the amount of money then available in the Engineering Escrow Account)
the Required Engineering Work prior to the twelve (12) month anniversary of the
Closing Date. After Mortgagor completes an item of Required Engineering Work,
Mortgagor may submit to Lender an invoice therefor with lien waivers and a
statement from the Engineer, reasonably acceptable to Lender, indicating that
the portion of the Required Engineering Work in question has been completed in
compliance with all Legal Requirements, and Lender shall, within twenty (20)
days thereafter, although in no event more frequently than once each month,
reimburse such amount to Mortgagor from the Engineering Escrow Account;
provided,
however, that
Mortgagor shall not be reimbursed more than the amount set forth on Exhibit D
hereto as the amount allocated to the portion of the Required Engineering Work
for which reimbursement is sought. 

     

    (b) From and
after the date all of the Required Engineering Work is completed, Mortgagor may
submit a written request, which request shall be delivered together with final
lien waivers and a statement from the Engineer, as the case may be, reasonably
acceptable to Lender, indicating that all of the Required Engineering Work has
been completed in compliance with all Legal Requirements, and Lender shall,
within twenty (20) days thereafter, disburse any balance of the Engineering
Escrow Account to Mortgagor. Should an Event of Default occur, the sums on
deposit in the Engineering Escrow Account may be applied by Lender in payment of
any Required Engineering Work or may be applied to the payment of the Debt or
any other charges affecting all or any portion of the Cross-collateralized
Property as Lender in its sole discretion may determine; provided,
however, that no
such application shall be deemed to have been made by operation of law or
otherwise until actually made by Lender as herein provided.

     

    Section
5.13. Loss
Proceeds. In the
event of a casualty to the Property, unless Lender elects or is required
pursuant to Article III hereof to make all of the Insurance Proceeds available
to Mortgagor for restoration, Lender and Mortgagor shall cause all such
Insurance Proceeds to be paid by the insurer directly to the Central Account,
whereupon Lender shall, after deducting Lender’s reasonable costs of recovering
and paying out such Insurance Proceeds, including without limitation, reasonable
attorneys’ fees, apply the same to reduce the Debt in accordance with the terms
of the Note; provided,
however, that if
Lender elects, or is deemed to have elected, or is required to make the
Insurance Proceeds available for restoration, all Insurance Proceeds in respect
of rent loss, business interruption or similar coverage shall be maintained in
the Central Account, to be applied by Lender in the manner as Rent received with
respect to the operation of the Property; provided,
further,
however, that in
the event that the Insurance Proceeds with respect to rent loss, business
interruption or similar insurance policy are paid in a lump sum in advance,
Lender shall hold such Insurance Proceeds in a segregated interest-bearing
escrow account, which shall be an Eligible Account, shall estimate, in Lender’s
reasonable discretion, the number of months required for Mortgagor to restore
the damage caused by the casualty, shall divide the aggregate rent loss,
business interruption or similar Insurance Proceeds by such number of months,
and shall disburse from such bank account into the Central Account each month
during the performance of such restoration such monthly installment of said
Insurance Proceeds. In the event that Insurance Proceeds are to be applied
toward restoration, Lender shall hold such funds in a segregated bank account at
the Bank, which shall be an Eligible Account, and shall disburse same in
accordance with the provisions of Section 3.04 hereof. Unless Lender elects, or
is required pursuant to Section 6.01 hereof to make all of the Condemnation
Proceeds available to Mortgagor for restoration, Lender and Mortgagor shall
cause all such Condemnation Proceeds to be paid to the Central Account,
whereupon Lender shall, after deducting Lender’s reasonable costs of recovering
and paying out such Condemnation Proceeds, including without limitation,
reasonable attorneys’ fees, apply same to reduce the Debt in accordance with the
terms of the Note; provided,
however, that
any Condemnation Proceeds received in connection with a temporary Taking shall
be maintained in the Central Account, to be applied by Lender in the same manner
as Rent received with respect to the operation of the Property; provided,
further,
however, that in
the event that the Condemnation Proceeds of any temporary Taking are paid in a
lump sum in advance, Lender shall hold such Condemnation Proceeds in a
segregated interest-bearing bank account, which shall be an Eligible Account,
shall estimate, in Lender’s reasonable discretion, the number of months that the
Property shall be affected by such temporary Taking, shall divide the aggregate
Condemnation Proceeds in connection with such temporary Taking by such number of
months, and shall disburse from such bank account into the Central Account each
month during the pendency of such temporary Taking such monthly installment of
said Condemnation Proceeds. In the event that Condemnation Proceeds are to be
applied toward restoration, Lender shall hold such funds in a segregated bank
account at the Bank, which shall be an Eligible Account, and shall disburse same
in accordance with the provisions of Section 3.04 hereof. If any Loss Proceeds
are received by Mortgagor, such Loss Proceeds shall be received in trust for
Lender, shall be segregated from other funds of Mortgagor, and shall be
forthwith paid into the Central Account, or paid to Lender to hold in a
segregated bank account at the Bank, in each case to be applied or disbursed in
accordance with the foregoing. Any Loss Proceeds made available to Mortgagor for
restoration in accordance herewith, to the extent not used by Mortgagor in
connection with, or to the extent they exceed the cost of, such restoration,
shall be paid to Mortgagor promptly following the completion of the
Work.

     

    
      
        
        

      

      
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    ARTICLE
VI:   CONDEMNATION

     

    Section
6.01. Condemnation.
(a)
Mortgagor shall notify Lender promptly of the commencement or threat of any
Taking of any Individual Property or any portion thereof. Lender is hereby
irrevocably appointed as Mortgagor’s attorney-in-fact, coupled with an interest,
with exclusive power to collect, receive and retain the proceeds of any such
Taking and to make any compromise or settlement in connection with such
proceedings (subject to Mortgagor’s reasonable approval, except after the
occurrence of an Event of Default, in which event Mortgagor’s approval shall not
be required), subject to the provisions of this Security Instrument; provided,
however, that Mortgagor may participate in any such proceedings and shall be
authorized and entitled to compromise or settle any such proceeding with respect
to Condemnation Proceeds in an amount less than five percent (5%) of the
Allocated Loan Amount. Mortgagor shall execute and deliver to Lender any and all
instruments reasonably required in connection with any such proceeding promptly
after request therefor by Lender. Except as set forth above, Mortgagor shall not
adjust, compromise, settle or enter into any agreement with respect to such
proceedings without the prior consent of Lender. All Condemnation Proceeds are
hereby assigned to and shall be paid to Lender. With respect to Condemnation
Proceeds in an amount in excess of five percent (5%) of the Allocated Loan
Amount, Mortgagor hereby authorizes Lender to compromise, settle, collect and
receive such Condemnation Proceeds, and to give proper receipts and acquittance
therefor. Subject to the provisions of this Article VI, Lender may apply such
Condemnation Proceeds (less any cost to Lender of recovering and paying out such
proceeds, including, without limitation, reasonable attorneys’ fees and
disbursements and costs allocable to inspecting any repair, restoration or
rebuilding work and the plans and specifications therefor) toward the payment of
the Debt or to allow such proceeds to be used for the Work.

     

    
      
        
        

      

      
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    (b) “Substantial
Taking” shall
mean (i) a Taking of such portion of the applicable Individual Property that
would, in Lender’s reasonable discretion, leave remaining a balance of the
applicable Individual Property which would not under then current economic
conditions, applicable Development Laws and other applicable Legal Requirements,
permit the restoration of the applicable individual Property so as to constitute
a complete, rentable facility of the same type as existed prior to the Taking,
having adequate ingress and egress to the applicable individual Property, the
Leases of which covering 75% of the square footage of the Individual Property
immediately prior to such Taking will not be terminated due to the Taking during
and following the restoration of such individual Property and being capable of
producing a projected Net Operating Income (as reasonably determined by Lender)
yielding a projected Debt Service Coverage therefrom for the next two (2) years
of not less than the Required Debt Service Coverage or (ii) a Taking which
occurs less than two (2) years prior to the Maturity Date or (iii) a Taking
which Lender is not reasonably satisfied could be repaired within twelve (12)
months and at least six (6) months prior to the Maturity Date or (iv) a Taking
of fifteen percent (15%) or more of the Individual Property.

     

    (c) In the
case of a Substantial Taking, Condemnation Proceeds shall be payable to Lender
in reduction of the Debt but without any prepayment fee or charge of any kind
and, if Mortgagor elects to apply any Condemnation Proceeds it may receive
pursuant to this Security Instrument to the payment of the Debt, Mortgagor may
prepay the balance of the Debt without any prepayment fee or charge of any
kind.

     

    (d) In the
event of a Taking which is less than a Substantial Taking, Mortgagor at its sole
cost and expense (whether or not the award shall have been received or shall be
sufficient for restoration) shall proceed diligently to restore, or cause the
restoration of, the remaining Improvements not so taken, to maintain a complete,
rentable, self-contained fully operational facility of the same sort as existed
prior to the Taking in as good a condition as is reasonably possible. In the
event of such a Taking, Lender shall receive the Condemnation Proceeds and shall
pay over the same:

     

    (i) first,
provided no Default shall have occurred and be continuing, to Mortgagor to the
extent of any portion of the award as may be necessary to pay the reasonable
cost of restoration of the Improvements remaining, and

     

    
      
        
        

      

      
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    (ii) second,
to Lender, in reduction of the Debt without any prepayment premium or charge of
any kind.

     

    If one or
more Takings in the aggregate create a Substantial Taking, then, in such event,
the sections of this Article VI above applicable to Substantial Takings shall
apply.

     

    (e) In the
event Lender is obligated to or elects to make Condemnation Proceeds available
for the restoration or rebuilding of the Property, such proceeds shall be
disbursed in the manner and subject to the conditions set forth in Section
3.04(b) hereof. If, in accordance with this Article VI, any Condemnation
Proceeds are used to reduce the Debt, they shall be applied in accordance with
the provisions of the Note and, with no prepayment fee or charge of any kind.
Mortgagor shall promptly execute and deliver all instruments requested by Lender
for the purpose of confirming the assignment of the Condemnation Proceeds to
Lender. Application of all or any part of the Condemnation Proceeds to the Debt
shall be made in accordance with the provisions of Sections 3.06 and 3.07
hereof. No application of the Condemnation Proceeds to the reduction of the Debt
shall have the effect of releasing the lien of this Security Instrument until
the remainder of the Debt has been paid in full. In the case of any Taking,
Lender, to the extent that Lender has not been reimbursed by Mortgagor, shall be
entitled, as a first priority out of any Condemnation Proceeds, to reimbursement
for all costs, fees and expenses reasonably incurred in the determination and
collection of any Condemnation Proceeds. All Condemnation Proceeds deposited
with Lender pursuant to this Section, until expended or applied as provided
herein, shall be held in accordance with Section 3.04(b) hereof and shall
constitute additional security for the payment of the Debt and the payment and
performance of Mortgagor’s obligations, but Lender shall not be deemed a trustee
or other fiduciary with respect to its receipt of such Condemnation Proceeds or
any part thereof. All awards so deposited with Lender shall be held by Lender in
an Eligible Account, but Lender makes no representation or warranty as to the
rate or amount of interest, if any, which may accrue on any such deposit and
shall have no liability in connection therewith. For purposes hereof, any
reference to the award shall be deemed to include interest, if any, which has
accrued thereon.

     

    ARTICLE
VII:   LEASES AND
RENTS

     

    Section
7.01.  Assignment. (a)
Mortgagor
does hereby bargain, sell, assign and set over unto Lender, all of Mortgagor’s
interest in the Leases and Rents. The assignment of Leases and Rents in this
Section 7. 01 is a collateral and conditional assignment from Mortgagor to
Lender and the existence or exercise of Mortgagor’s license (revocable by Lender
only during the continuance of an Event of Default) to collect Rent shall not
operate to subordinate this assignment to any subsequent assignment. The
exercise by Lender of any of its rights or remedies pursuant to this Section
7.01 shall not be deemed to make Lender a Lender-in-possession. In addition to
the provisions of this Article VII, Mortgagor shall comply with all terms,
provisions and conditions of the Assignment.

     

    (b) So long
as there shall exist and be continuing no Event of Default, Mortgagor shall have
a revocable license to take all actions with respect to all Leases and Rents,
present and future, including the right to collect and use the Rents, subject to
the terms of this Security Instrument and the Assignment.

     

    
      
        
        

      

      
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    (c) In a
separate instrument Mortgagor shall, as requested from time to time by Lender,
assign to Lender or its nominee by specific or general assignment, any and all
Leases, such assignments to be in form and content reasonably acceptable to
Lender, but subject to the provisions of Section 7.01(b) hereof. Mortgagor
agrees to deliver to Lender, within thirty (30) days after Lender’s request, a
true and complete copy of every Lease and, within ten (10) Business Days after
Lender’s request, a complete list of the Leases, certified by Mortgagor to be
true, accurate and complete and stating the demised premises, the names of the
lessees, the Rent payable under the Leases, the date to which such Rents have
been paid, the material terms of the Leases, including, without limitation, the
dates of occupancy, the dates of expiration, any Rent concessions, work
obligations or other inducements granted to the lessees thereunder, and any
renewal options.

     

    (d) The
rights of Lender contained in this Article VII, the Assignment or any other
assignment of any Lease shall not result in any obligation or liability of
Lender to Mortgagor or any lessee under a Lease or any party claiming through
any such lessee or constitute an assumption by Lender of any such liability or
obligation.

     

    (e) At any
time during the continuance of an Event of Default, the license granted
hereinabove may be revoked by Lender, and Lender or a receiver appointed in
accordance with this Security Instrument may enter upon the Property, and
collect, retain and apply the Rents toward payment of the Debt in such priority
and proportions as Lender in its sole discretion shall deem proper.

     

    (f) In
addition to the rights which Lender may have herein, upon the occurrence and
during the continuance of any Event of Default, Lender, at its option, may
require Mortgagor to pay monthly in advance to Lender, or any receiver appointed
to collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be used and occupied by Mortgagor
and may require Mortgagor to vacate and surrender possession of the Property to
Lender or to such receiver and, in default thereof, Mortgagor may be evicted by
summary proceedings or otherwise.

     

    Section
7.02.  Management of
Property. 

     

    (a) Mortgagor
shall manage the Property or cause the Property to be managed in a manner which
is consistent with the Approved Manager Standard. The Manager (other than
Mortgagor) shall at all times meet the Minimum Manager Credentials. All Space
Leases shall provide for rental rates comparable to then existing local market
rates and terms and conditions which constitute good and prudent business
practice and are consistent with prevailing market terms and conditions, and
shall be arm’s length transactions. All Space Leases shall be on a form
previously approved by Lender with such commercially reasonable changes as are
consistent with the standards of other similarly situated owners when compared
with terms and conditions of leases in similarly situated industrial centers in
similar context at the time in question, taking into account, inter alia, the
type, creditworthiness and bargaining power of the prospective tenant and the
location and size of the space covered by the proposed Lease, and shall provide
that they are subordinate to this Security Instrument and that the lessees
thereunder attorn to Lender. Mortgagor shall deliver copies of all Leases,
amendments, modifications and renewals thereof to Lender. All proposed Space
Leases for the Property shall be subject to the prior written approval of
Lender, not to be unreasonably withheld or delayed, provided, however that
Mortgagor may enter into new Space Leases with unrelated third parties without
obtaining the prior consent of Lender provided that: (i) the leases conform with
the requirements of this Section 7.02; (ii) the space to be leased pursuant to
such proposed Lease, together with any other space which is leased to the
proposed tenant or an Affiliate thereof, is not a Major Space Lease; and (iii)
the term of the proposed lease does not exceed six (6) years and, inclusive of
all extensions and renewals, does not exceed ten (10) years. Lender’s consent to
any Lease shall be deemed given, if the first correspondence from Mortgagor to
Lender requesting such approval is in an envelope marked “PRIORITY” and contains
a bold-faced, conspicuous legend at the top of the first page thereof stating
that “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL
IN WRITING WITHIN FIVE (5) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”,
and is accompanied by the information and documents required above and any other
information reasonably requested by Lender in writing prior to the expiration of
such five (5) Business Day period in order to adequately review the same has
been delivered and, if Lender fails to respond or to expressly deny such request
for approval in writing within the five (5) Business Day period a second notice
is delivered to Lender from Mortgagor in an envelope marked “PRIORITY”
requesting approval containing a bold-faced, conspicuous legend at the top of
the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY
THIS REQUEST FOR APPROVAL IN WRITING WITHIN FIVE (5) BUSINESS DAYS, YOUR
APPROVAL SHALL BE DEEMED GIVEN” and Lender fails to respond or to expressly deny
each request for approval within the five (5) Business Day period.

     

    
      
        
        

      

      
        -70-

        
          

        

      

      
        
        

      

    

     

    (b) Mortgagor
(i) shall observe and perform all of its material obligations under the Leases
pursuant to applicable Legal Requirements and shall not do or permit to be done
anything to impair the value of the Leases as security for the Debt; (ii) shall
promptly send copies to Lender of all notices of default which Mortgagor shall
receive under the Leases; (iii) shall, consistent with the Approved Manager
Standard, enforce all of the terms, covenants and conditions contained in the
Leases to be observed or performed; (iv) shall not collect any of the Rents
under the Leases more than one (1) month in advance (except that Mortgagor may
collect in advance (A) such security deposits as are permitted pursuant to
applicable Legal Requirements and are commercially reasonable in the prevailing
market and (B) all rent deemed “additional rent” under the Leases); (v) shall
not execute any other assignment of lessor’s interest in the Leases or the Rents
except as otherwise expressly permitted pursuant to this Security Instrument;
(vi) shall not cancel or terminate any of the Space Leases or accept a surrender
thereof in any manner inconsistent with the Approved Manager Standard; (vii)
shall not convey, transfer or suffer or permit a conveyance or transfer of all
or any part of the Premises or the Improvements or of any interest therein so as
to effect a merger of the estates and rights of, or a termination or diminution
of the obligations of, lessees thereunder; (viii) shall not alter, modify
or change the terms of any guaranty of any Major Space Lease or cancel or
terminate any such guaranty in any manner inconsistent with the Approved Manager
Standard; (ix) shall, in accordance with the Approved Manager Standard, make all
reasonable efforts to seek lessees for space as it becomes vacant and enter into
Leases in accordance with the terms hereof; (x) shall not materially modify,
alter or amend any Major Space Lease or Property Agreement without Lender’s
consent, which consent will not be unreasonably withheld or delayed; (xi) shall
notify Lender promptly if any Pad Owner shall cease business operations or of
the occurrence of any event of which it becomes aware affecting a Pad Owner or
its property which might have any material effect on the Property; and (xii)
shall, without limitation to any other provision hereof, execute and deliver at
the reasonable request of Lender all such further assurances, confirmations and
assignments in connection with the Property as are required herein and as Lender
shall from time to time reasonably require.

     

    
      
        
        

      

      
        -71-

        
          

        

      

      
        
        

      

    

     

    (c) All
security deposits of lessees, whether held in cash or any other form, shall be
treated by Mortgagor as trust funds, shall not be commingled with any other
funds of Mortgagor and, if cash, shall be deposited by Mortgagor in the Security
Deposit Account. Any bond or other instrument which Mortgagor is permitted to
hold in lieu of cash security deposits under applicable Legal Requirements shall
be maintained in full force and effect unless replaced by cash deposits as
hereinabove described shall, if permitted pursuant to Legal Requirements, at
Lender’s option, name Lender as payee or mortgagee thereunder or be fully
assignable to Lender and shall, in all respects, comply with applicable Legal
Requirements and otherwise be reasonably satisfactory to Lender. Mortgagor
shall, upon request, provide Lender with evidence reasonably satisfactory to
Lender of Mortgagor’s compliance with the foregoing. During the continuance of
any Event of Default, Mortgagor shall, upon Lender’s request, if permitted by
applicable Legal Requirements, turn over the security deposits (and any interest
thereon) to Lender to be held by Lender in accordance with the terms of the
Leases and all Legal Requirements.

     

    (d) Lender
shall, upon request of Mortgagor, enter into a subordination, nondisturbance and
attornment agreement (“SNDA”) with
respect to each proposed tenant entering into a Lease in compliance with the
requirements of this Security Instrument provided that such Lease is (i) with a
tenant under a Major Space Lease at an Individual Property or is with an
existing tenant pursuant to a Lease dated prior to the Closing Date which
provides that the tenant thereunder is entitled to an SNDA or with any tenant
which is renting space on a national basis which leases at least 2,000 square
feet of the Premises, (ii) with a tenant reasonably approved by Lender in
writing prior to Mortgagor’s execution of any such Lease and (iii) on the
standard form of Lease previously approved in writing by Lender with such
commercially reasonable changes as are consistent with the Approved Manager
Standard. Any SNDA executed by Lender shall be in Lender’s then standard form
with such changes as Lender shall agree to and provide that in the event Lender
or any purchaser at foreclosure shall succeed to Mortgagor’s interest in the
Property, the Leases of such tenants will remain in full force and effect and be
binding upon Lender or such purchaser and such tenant as though each were
original parties thereto.

     

    (e) Mortgagor
covenants and agrees with Lender that (i) the Property will be managed at all
times by Mortgagor in accordance with Mortgagor’s organizational documents or by
a Manager pursuant to a management agreement approved by Lender (the
“Management
Agreement”), (ii)
after Mortgagor has knowledge of a fifty percent (50%) or more change in control
of the ownership of Manager, Mortgagor will promptly give Lender notice thereof
(a “Manager Control
Notice”) and
(iii) the Management Agreement (or in the case Mortgagor is acting as Manager,
Mortgagor’s right to manage the Property) may be terminated by Lender at any
time for cause (including, but not limited to, Manager’s gross negligence,
misappropriation of funds, willful misconduct or fraud) or at any time following
(A) the occurrence of an Event of Default, or (B) the receipt of a Manager
Control Notice, or (C) the date upon which the Debt Service Coverage is 1.10:1.0
or less. In the event of any such termination, a substitute managing agent shall
be appointed by Mortgagor, subject to Lender’s prior written approval, which may
be given or withheld in Lender’s sole discretion and which may be conditioned
on, inter alia, a letter from each Rating Agency confirming that any rating
issued by the Rating Agency in connection with a Securitization will not, as a
result of the proposed change of Manager, be downgraded from the then current
ratings thereof, qualified or withdrawn. Mortgagor may from time to time appoint
a successor manager to manage the Property with Lender’s prior written consent
which consent shall not be unreasonably withheld or delayed, provided that any
such successor manager shall be a reputable management company which meets the
Minimum Manager Credentials and each Rating Agency shall have confirmed in
writing that any rating issued by the Rating Agency in connection with a
Securitization will not, as a result of the proposed change of Manager, be
downgraded from the then current ratings thereof, qualified or withdrawn.
Mortgagor further covenants and agrees that Mortgagor shall require Manager (or
any successor managers) to maintain at all times during the term of the Loan
worker’s compensation insurance as required by Governmental
Authorities.

     

    
      
        
        

      

      
        -72-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
VIII:   MAINTENANCE AND
REPAIR

     

    Section
8.01. Maintenance
and Repair of the Property; Alterations; Replacement of Equipment. Mortgagor
hereby covenants and agrees:

     

    (a) Mortgagor
shall not (i) desert or abandon the Property, (ii) change the use of the
Property or cause or permit the use or occupancy of any part of the Property to
be discontinued if such discontinuance or use change would violate any zoning or
other law, ordinance or regulation; (iii) consent to or seek any lowering of the
zoning classification, or greater zoning restriction affecting the Property; or
(iv) take any steps whatsoever to convert the Property, or any portion thereof,
to a condominium or cooperative form of ownership.

     

    (b) Mortgagor
shall, at its expense, (i) take good care of the Property including grounds
generally, and utility systems and sidewalks, roads, alleys, and curbs therein,
and shall keep the same in good, safe and insurable condition and in compliance
with all applicable Legal Requirements, (ii) promptly make or cause to be made
all repairs to the Property, above grade and below grade, interior and exterior,
structural and nonstructural, ordinary and extraordinary, unforeseen and
foreseen, and maintain the Property in a manner appropriate for the facility and
(iii) not commit or suffer to be committed any waste of the Property or do or
suffer to be done anything which will increase the risk of fire or other hazard
to the Property or impair the value thereof. Mortgagor shall keep the sidewalks,
vaults, gutters and curbs comprising, or adjacent to, the Property, clean and
free from dirt, snow, ice, rubbish and obstructions. All repairs made by
Mortgagor shall be made with first-class materials, in a good and workmanlike
manner, shall be equal or better in quality and class to the original work and
shall comply with all applicable Legal Requirements and Insurance Requirements.
To the extent any of the above obligations are obligations of tenants under
Space Leases or other Persons under Property Agreements, Mortgagor may fulfill
its obligations hereunder by causing such tenants or other Persons, as the case
may be, to perform their obligations thereunder. As used herein, the terms
“repair” and “repairs” shall be deemed to include all necessary
replacements.

     

    
      
        
        

      

      
        -73-

        
          

        

      

      
        
        

      

    

     

    (c) Mortgagor
shall, except in connection with tenant improvement work under Space Leases
entered into in accordance with the terms of this Security Instrument, not
demolish, remove, construct, or, except as otherwise expressly provided herein,
restore, or alter the Property or any portion thereof which could diminish the
value of the Property nor consent to or permit any such demolition, removal,
construction, restoration, addition or alteration which would diminish the value
of the Property without Lender’s prior written consent in each instance, which
consent shall not be unreasonably withheld or delayed.

     

    (d) Mortgagor
represents and warrants to Lender that (i) there are no fixtures, machinery,
apparatus, tools, equipment or articles of personal property attached or
appurtenant to, or located on the Property, except for the Equipment and
equipment leased by Mortgagor for the management, operation or maintenance of
the Property in accordance with the Loan Documents; (ii) the Equipment and the
leased equipment constitute all of the fixtures, machinery, apparatus, tools,
equipment and articles of personal property necessary to the proper operation
and maintenance of the Property; and (iii) all of the Equipment is free and
clear of all liens, except for the lien of this Security Instrument and the
Permitted Encumbrances. All right, title and interest of Mortgagor in and to all
extensions, improvements, betterments, renewals and appurtenances to the
Property hereafter acquired by, or released to, Mortgagor or constructed,
assembled or placed by Mortgagor in the Property, and all changes and
substitutions of the security constituted thereby, shall be and, in each such
case, without any further mortgage, encumbrance, conveyance, assignment or other
act by Lender or Mortgagor, shall become subject to the lien and security
interest of this Security Instrument as fully and completely, and with the same
effect, as though now owned by Mortgagor and specifically described in this
Security Instrument, but at any and all times Mortgagor shall execute and
deliver to Lender any documents Lender may reasonably deem necessary or
appropriate for the purpose of specifically subjecting the same to the lien and
security interest of this Security Instrument.

     

    (e) Notwithstanding
the provisions of this Security Instrument to the contrary, Mortgagor shall have
the right, at any time and from time to time, to remove and dispose of Equipment
which may have become obsolete or unfit for use or which is no longer useful in
the management, operation or maintenance of the Property. Mortgagor shall
promptly replace any such Equipment so disposed of or removed with other
Equipment of equal value and utility, free of any security interest or superior
title, liens or claims; except that, if replacement of the Equipment so removed
or disposed of is not necessary or desirable for the proper management,
operation or maintenance of the Property, Mortgagor shall not be required to
replace the same. All such replacements or additional equipment shall be deemed
to constitute “Equipment” and shall be covered by the security interest herein
granted.

     

    (f) Mortgagor
shall diligently take all actions required to cause the temporary certificate of
occupancy relating to the Property known as 5405 Bandera Road to be renewed
prior to each and every expiration thereof until the permanent, unconditional
certificate of occupancy is issued. Borrower shall provide quarterly updates to
Lender of the progress of the work required to obtain the permanent,
unconditional certificate of occupancy, inspections or approval processes and
shall promptly provide Lender with copies of evidence of the removal of any and
all violations affecting the Property, if any, and any new temporary
certificates of occupancy and the permanent, unconditional certificate of
occupancy upon issuance of same.

     

    
      
        
        

      

      
        -74-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
IX:   TRANSFER OR ENCUMBRANCE OF
THE PROPERTY

     

    Section
9.01. Other
Encumbrances.
Mortgagor shall not further encumber or permit the further encumbrance in any
manner (whether by grant of a pledge, security interest or otherwise) of the
Property or any part thereof or interest therein, including, without limitation,
of the Rents therefrom. In addition, Mortgagor shall not further encumber and
shall not permit the further encumbrance in any manner (whether by grant of a
pledge, security interest or otherwise) of Mortgagor or any direct or indirect
interest in Mortgagor except as expressly permitted pursuant to this Security
Instrument. 

     

    Section
9.02. No
Transfer. (a)
Mortgagor acknowledges that Lender has examined and relied on the expertise of
Mortgagor and, if applicable, each General Partner, in owning and operating
properties such as the Property in agreeing to make the Loan and will continue
to rely on Mortgagor’s ownership of the Property as a means of maintaining the
value of the Property as security for repayment of the Debt and Mortgagor
acknowledges that Lender has a valid interest in maintaining the value of the
Property. Mortgagor shall not Transfer, nor permit any Transfer, without the
prior written consent of Lender, which consent Lender may withhold in its sole
and absolute discretion other than pursuant to Space Leases as provided herein.
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 Transfer without Lender’s consent. This
provision shall apply to every Transfer regardless of whether voluntary or not,
or whether or not Lender has consented to any previous Transfer.

     

    (b) Notwithstanding
any provision of this Security Instrument to the contrary, no person or entity
may, after the date hereof, become an owner of a direct or indirect interest in
any entity comprising Mortgagor, which interest exceeds forty-nine percent
(49%), without Lender’s written consent in each instance and receipt by Lender
of (x) written confirmation that any rating issued by such Rating Agency in
connection with the Securitization will not, as a result of the proposed
Transfer, be downgraded from the then current ratings thereof, qualified or
withdrawn, and (y) a substantive non-consolidation opinion in form and
substance acceptable to Lender.

     

    Section
9.03. Due on
Sale. Lender
may declare the Debt immediately due and payable upon any Transfer or further
encumbrance without Lender’s consent without regard to whether any impairment of
its security or any increased risk of default hereunder can be demonstrated.
This provision shall apply to every Transfer or further encumbrance of the
Property or any part thereof or interest in the Property or in Mortgagor
regardless of whether voluntary or not, or whether or not Lender has consented
to any previous Transfer or further encumbrance of the Property or interest in
Mortgagor.

     

    Section
9.04. Permitted
Transfer.
Notwithstanding the foregoing provisions of this Article IX, the sale,
conveyance or transfer of the Cross-collateralized Properties in their entirety,
except as otherwise set forth in Section 9.04(B) (hereinafter, “Sale”) shall
be permitted hereunder provided that each of the following terms and conditions
are satisfied:

     

    
      
        
        

      

      
        -75-

        
          

        

      

      
        
        

      

    

     

    (a) no Event
of Default is then continuing hereunder or under any of the other Loan Documents
and no O&M Operative Period shall have commenced and be
continuing;

     

    (b) Lender
shall have consented to the Sale, provided, however, such consent shall not be
unreasonably withheld and, if the proposed Sale is to occur at any time after a
Securitization, each Rating Agency shall have delivered written confirmation
that any rating issued by such Rating Agency in connection with the
Securitization will not, as a result of the proposed Sale, be downgraded from
the then current ratings thereof, qualified or withdrawn; provided, however,
that no request for consent to the Sale will be entertained by Lender if the
proposed Sale is to occur within sixty (60) days of any contemplated sale of the
Loan by Lender, whether in connection with a Securitization or
otherwise;

     

    (c) Mortgagor
gives Lender written notice of the terms of the proposed Sale not less than
forty-five (45) days before the date on which such Sale is scheduled to close
and, concurrently therewith, gives Lender (i) all such information concerning
the proposed transferee of the Property (hereinafter, “Buyer”) as
Lender would require in evaluating an initial extension of credit to a borrower
and Lender determines, in its reasonable discretion that the Buyer is acceptable
to Lender in all respects and (ii) a non-refundable application fee equal to
$7,500; 

     

    (d) Mortgagor
pays Lender, concurrently with the closing of such Sale, a non-refundable
assumption fee in an amount equal to (x) one half of one percent (.5%) of the
then outstanding Loan Amount for the first such Sale and (y) one percent (1.0%)
of the then outstanding Loan Amount for each Sale thereafter, together with all
reasonable out-of-pocket costs and expenses, including, without limitation,
reasonable attorneys’ fees, incurred by Lender in connection with the
Sale;

     

    (e) Buyer
assumes all of the obligations under the Loan Documents and, prior to or
concurrently with the closing of such Sale, Buyer executes, without any cost or
expense to Lender, such documents and agreements as Lender shall reasonably
require to evidence and effectuate said assumption and delivers such legal
opinions as Lender may require;

     

    (f) Mortgagor
and Buyer execute, without any cost or expense to Lender, new financing
statements or financing statement amendments and any additional documents
reasonably requested by Lender;

     

    (g) Mortgagor
delivers to Lender, without any cost or expense to Lender, such endorsements to
Lender’s title insurance policy, hazard insurance policy endorsements or
certificates and other similar materials as Lender may deem necessary at the
time of the Sale, all in form and substance reasonably satisfactory to Lender,
including, without limitation, an endorsement or endorsements to Lender’s title
insurance policy insuring the lien of this Security Instrument, extending the
effective date of such policy to the date of execution and delivery (or, if
later, of recording) of the assumption agreement referenced above in
subparagraph (e) of this Section, with no additional exceptions added to such
policy, and insuring that fee simple title to the Property is vested in
Buyer;

     

    (h) Mortgagor
executes and delivers to Lender, without any cost or expense to Lender, a
release of Lender, its officers, directors, employees and agents, from all
claims and liability relating to the transactions evidenced by the Loan
Documents, through and including the date of the closing of the Sale, which
agreement shall be in form and substance reasonably satisfactory to Lender and
shall be binding upon Buyer; 

     

    
      
        
        

      

      
        -76-

        
          

        

      

      
        
        

      

    

     

    (i) subject
to the provisions of Section 18.32 hereof, such Sale is not construed so as to
relieve Mortgagor of any personal liability under the Note or any of the other
Loan Documents for any acts or events occurring or obligations arising prior to
or simultaneously with the closing of such Sale, and Mortgagor executes, without
any cost or expense to Lender, such documents and agreements as Lender shall
reasonably require to evidence and effectuate the ratification of said personal
liability; provided that, upon the closing of such Sale, if Mortgagor and Buyer
have satisfied each of the terms of this Section 9.04, as reasonably determined
by Lender, Lender shall release Mortgagor from all obligations arising after the
closing of such Sale. Additionally, if a replacement guarantor acceptable to
Lender in its reasonable discretion executes a guaranty identical in substance
to the Indemnity and Guaranty, Lender shall release the existing Guarantor from
any liabilities under the Indemnity and Guaranty arising after the closing of
such Sale;

     

    (j) such Sale
is not construed so as to relieve any Guarantor of its obligations under any
guaranty or indemnity agreement executed in connection with the Loan and each
such Guarantor executes, without any cost or expense to Lender, such documents
and agreements as Lender shall reasonably require to evidence and effectuate the
ratification of each such guaranty agreement, provided that if Buyer or a party
associated with Buyer approved by Lender in its sole discretion assumes the
obligations of the current Guarantor under its guaranty and Buyer or such party
associated with Buyer, as applicable, executes, without any cost or expense to
Lender, a new guaranty in similar form and substance to the existing guaranty
and otherwise satisfactory to Lender, then Lender shall release the current
Guarantor from all obligations arising under its guaranty after the closing of
such Sale; and

     

    (k) Buyer is
a Single Purpose Entity and Lender receives a non-consolidation opinion relating
to Buyer from Buyer’s counsel, which opinion is in form and substance acceptable
to Lender.

     

     

    ARTICLE
X:   CERTIFICATES

     

    Section
10.01. Estoppel
Certificates. (a)
After
request by Lender, Mortgagor, within fifteen (15) days and at its expense, will
furnish Lender with a statement, duly acknowledged and certified, setting forth
(i) the amount of the original principal amount of the Note, and the unpaid
principal amount of the Note, (ii) the rate of interest of the Note, (iii) the
date payments of interest and/or principal were last paid, (iv) any offsets or
defenses to the payment of the Debt, and if any are alleged, the nature thereof,
(v) that the Note and this Security Instrument have not been modified or if
modified, giving particulars of such modification and (vi) to the best of
Mortgagor’s knowledge, that there has occurred and is then continuing no Default
or if such Default exists, the nature thereof, the period of time it has
existed, and the action being taken to remedy such Default.

     

    
      
        
        

      

      
        -77-

        
          

        

      

      
        
        

      

    

     

    (b) Within
fifteen (15) days after written request by Mortgagor, Lender shall furnish to
Mortgagor a written statement confirming the amount of the Debt, the maturity
date of the Note and the date to which interest has been paid.

     

    (c) Mortgagor
shall use all commercially reasonable efforts to obtain estoppel certificates
from tenants in form and substance reasonably acceptable to Lender or in form
and substance as provided in the applicable Leases, but, provided no Event of
Default has occurred and is continuing, in no event shall Mortgagor be required
to deliver estoppel certificates more than twice during any Loan
Year.

     

    ARTICLE
XI:   NOTICES

     

    Section
11.01.   Notices. Any
notice, demand, statement, request or consent made hereunder shall be in writing
and delivered personally or sent to the party to whom the notice, demand or
request is being made by Federal Express or other nationally recognized
overnight delivery service, as follows and shall be deemed given when delivered
personally or one (1) Business Day after being deposited with Federal Express or
such other nationally recognized delivery service:

     

    If to
Lender: To
Lender, at the address first written above,

     

    
      	 	
              with
      a copy to:

            	
              Winston
      & Strawn LLP

            


    

    
      	 	 	
              200
      Park Avenue

            


    

    
      	 	 	
              New
      York, New York 10166

            


    

    
      	 	 	
              Attention:
      Corey A. Tessler, Esq.

            


    

     

    
      	 	
              If
      to Mortgagor:

            	
              To
      Mortgagor,
      at the address first written above,

            


    

     

    
      	 	
              with
      a copy to:

            	
              Herrick
      Feinstein LLP

              2 Park Avenue

              New York, New York 10016

              Attention: Sheldon Chanales,
  Esq.

            


    

     

    
      	 	
              and

            	
              c/o
      The Lightstone Group

              326 Third Street

              Lakewood, New Jersey 08701

              Attention: Joseph Teichman

              Facsimile No.: (732)
  363-7183

            


    

     

    or such
other address as either Mortgagor or Lender shall hereafter specify by not less
than ten (10) days prior written notice as provided herein; provided, however,
that notwithstanding any provision of this Article to the contrary, such notice
of change of address shall be deemed given only upon actual receipt thereof.
Rejection or other refusal to accept or the inability to deliver because of
changed addresses of which no notice was given as herein required shall be
deemed to be receipt of the notice, demand, statement, request or
consent.

     

    
      
        
        

      

      
        -78-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
XII:   INDEMNIFICATION

     

    Section
12.01. Indemnification Covering
Property. In
addition, and without limitation, to any other provision of this Security
Instrument or any other Loan Document, Mortgagor shall protect, indemnify and
save harmless Lender and its successors and assigns, and each of their agents,
employees, officers, directors, stockholders, partners and members
(collectively, “Indemnified
Parties”) for,
from and against any claims, demands, penalties, fines, actual liabilities,
settlements, actual damages, actual costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation,
reasonable attorneys’ fees and disbursements imposed upon or incurred by or
asserted against any of the Indemnified Parties by reason of (a) ownership of
this Security Instrument, the Assignment, the Property or any part thereof or
any interest therein or receipt of any Rents; (b) any accident, injury to or
death of any person or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (c) any use, nonuse or condition in, on or about, or
possession, alteration, repair, operation, maintenance or management of, the
Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (d) any failure on the part of Mortgagor to perform or
comply with any of the terms of this Security Instrument or the Assignment; (e)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof; (f) any claim by
brokers, finders or similar Persons claiming to be entitled to a commission in
connection with any Lease or other transaction involving the Property or any
part thereof; (g) any Imposition including, without limitation, any Imposition
attributable to the execution, delivery, filing, or recording of any Loan
Document, Lease or memorandum thereof; (h) any lien, security interest, or claim
arising on or against the Property or any part thereof under any Legal
Requirement or any liability asserted against any of the Indemnified Parties
with respect thereto; (i) any claim arising out of or in any way relating to any
tax or other imposition on the making and/or recording of this Security
Instrument, the Note or any of the other Loan Documents unless otherwise set
forth herein; (j) a Default under Sections 2.02(f) or 2.02(g) hereof, (k) the
failure of any Person to file timely with the Internal Revenue Service an
accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate,
Broker and Barter Exchange Transactions, which may be required in connection
with the Loan, or to supply a copy thereof in a timely fashion to the recipient
of the proceeds of the Loan; or (l) the claims of any lessee or any Person
acting through or under any lessee or otherwise arising under or as a
consequence of any Lease prior to the time Lender may have taken possession of
the Property. Notwithstanding the foregoing provisions of this Section 12.01 to
the contrary, Mortgagor shall have no obligation to indemnify the Indemnified
Parties pursuant to this Section 12.01 for liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses relative to the
foregoing which result from Lender’s, and its successors’ or assigns’, willful
misconduct or gross negligence. Any amounts payable to Lender by reason of the
application of this Section 12.01 shall constitute a part of the Debt secured by
this Security Instrument and the other Loan Documents and shall become
immediately due and payable and shall bear interest at the Default Rate from the
date the liability, obligation, claim, cost or expense is sustained by Lender,
as applicable, until paid. The provisions of this Section 12.01 shall survive
the termination of this Security Instrument whether by repayment of the Debt,
foreclosure or delivery of a deed in lieu thereof, assignment or otherwise. In
case any action, suit or proceeding is brought against any of the Indemnified
Parties by reason of any occurrence of the type set forth in (a) through (l)
above, Mortgagor shall, at Mortgagor’s expense, resist and defend such action,
suit or proceeding or will cause the same to be resisted and defended by counsel
at Mortgagor’s expense for the insurer of the liability or by counsel designated
by Mortgagor (unless reasonably disapproved by Lender promptly after Lender has
been notified of such counsel); provided,
however, that
nothing herein shall compromise the right of Lender (or any other Indemnified
Party) to appoint its own counsel at Mortgagor’s expense for its defense with
respect to any action which, in the reasonable opinion of Lender or such other
Indemnified Party, as applicable, presents a conflict or potential conflict
between Lender or such other Indemnified Party that would make such separate
representation advisable. Any Indemnified Party will give Mortgagor prompt
notice after such Indemnified Party obtains actual knowledge of any potential
claim by such Indemnified Party for indemnification hereunder. The Indemnified
Parties shall not settle or compromise any action, proceeding or claim as to
which it is indemnified hereunder without notice to, and provided that no Event
of Default has occurred and is continuing, consultation with,
Mortgagor.

     

    
      
        
        

      

      
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    ARTICLE
XIII:   DEFAULTS

     

    Section
13.01. Events of
Default. The
Debt shall become immediately due at the option of Lender upon any one or more
of the following events (“Event of
Default”):

     

    (a) if the
final payment or prepayment premium, if any, due under the Note shall not be
paid on Maturity;

     

    (b) if any
monthly payment of interest and/or principal due under the Note (other than the
sums described in (a) above) shall not be fully paid on the date upon which the
same is due and payable thereunder;

     

    (c) if
payment of any sum (other than the sums described in (a) above or (b) above)
required to be paid pursuant to the Note, this Security Instrument or any other
Loan Document shall not be paid within seven (7) Business Days after Lender
delivers written notice to Mortgagor that same is due and payable thereunder or
hereunder;

     

    (d) if
Mortgagor, Guarantor or, if Mortgagor or Guarantor is a partnership, any general
partner of Mortgagor or Guarantor, or, if Mortgagor or Guarantor is a limited
liability company, any member of Mortgagor or Guarantor, shall institute or
cause to be instituted any proceeding for the termination or dissolution of
Mortgagor, Guarantor or any such general partner or member;

     

    (e) if the
insurance policies required hereunder are not kept in full force and effect, or
if the insurance policies are not assigned and delivered to Lender as herein
provided;

     

    (f) if
Mortgagor or Guarantor attempts to assign its rights under this Security
Instrument or any other Loan Document or any interest herein or therein, or if
any Transfer occurs other than in accordance with the provisions
hereof;

     

    
      
        
        

      

      
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    (g) if any
representation or warranty of Mortgagor or Guarantor made herein or in any other
Loan Document or in any certificate, report, financial statement or other
instrument or agreement furnished to Lender shall prove false or misleading in
any material respect as of the date the representation or warranty was
made;

     

    (h) if
Mortgagor, Guarantor or any general partner of Mortgagor or Guarantor shall make
an assignment for the benefit of creditors or shall admit in writing its
inability to pay its debts generally as they become due;

     

    (i) if a
receiver, liquidator or trustee of Mortgagor, Guarantor or any general partner
of Mortgagor or Guarantor shall be appointed or if Mortgagor, Guarantor or their
respective general partners shall be adjudicated a bankrupt or insolvent, or if
any petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to by, or acquiesced in by, Mortgagor, Guarantor or their
respective general partners or if any proceeding for the dissolution or
liquidation of Mortgagor, Guarantor or their respective general partners shall
be instituted; however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Mortgagor, Guarantor or their
respective general partners, as applicable, upon the same not being discharged,
stayed or dismissed within sixty (60) days or if Mortgagor, Guarantor or their
respective general partners shall generally not be paying its debts as they
become due;

     

    (j) if
Mortgagor shall be in default beyond any notice or grace period, if any, under
any other mortgage or deed of trust or security agreement covering any part of
the Property without regard to its priority relative to this Security
Instrument; provided, however, this provision shall not be deemed a waiver of
the provisions of Article IX prohibiting further encumbrances affecting the
Property or any other provision of this Security Instrument;

     

    (k) if the
Property becomes subject (i) to any lien or security interest which is superior
to the lien of this Security Instrument, other than a lien for real estate taxes
and assessments not due and payable, or (ii) to any mechanic’s, materialman’s or
other lien which is or is asserted to be superior to the lien of this Security
Instrument, and such lien shall remain undischarged (by payment, bonding, or
otherwise) for ten (10) days unless contested in accordance with the terms
hereof; 

     

    (l) if
Mortgagor discontinues the operation of the Property or any part thereof for
reasons other than repair or restoration arising from a casualty or condemnation
for ten (10) days or more; 

     

    (m) except as
permitted in this Security Instrument, any material alteration, demolition or
removal by, on behalf or with the consent of Mortgagor of any of the
Improvements without the prior consent of Lender;

     

    (n) if
Mortgagor consummates a transaction which would cause this Security Instrument
or Lender’s rights under this Security Instrument, the Note or any other Loan
Document to constitute a non-exempt prohibited transaction under ERISA or result
in a violation of a state statute regulating government plans subjecting Lender
to liability for a violation of ERISA or a state statute;

     

    
      
        
        

      

      
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    (o) if an
Event of Default shall occur under the other the Cross-collateralized
Mortgage;

     

    (p) if
Mortgagor breaches any provision of Article IX or Section 2.02(g) of this
Security Instrument; or

     

    (q) if a
default shall occur under any of the other terms, covenants or conditions of the
Note, this Security Instrument or any other Loan Document, other than as set
forth in (a) through (p) above, for 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
for thirty (30) days after notice from Lender in the case of any other default
or an additional ninety (90) days if Mortgagor is diligently and continuously
effectuating a cure of a curable non-monetary default, other than as set forth
in (a) through (p) above.

     

    Section
13.02. Remedies. (a) Upon
the occurrence and during the continuance of any Event of Default, Lender may,
in addition to any other rights or remedies available to it hereunder or under
any other Loan Document, at law or in equity, take such action, to the extent
permitted by law, without notice or demand, as it reasonably deems advisable to
protect and enforce its rights against Mortgagor and in and to any Property or
any one or more of the Cross-collateralized Properties including, but not
limited to, the following actions, each of which may be pursued singly,
concurrently or otherwise, at such time and in such order as Lender may
determine, in its sole discretion, without impairing or otherwise affecting any
other rights and remedies of Lender hereunder, at law or in equity: (i) declare
all or any portion of the unpaid Debt to be immediately due and payable;
provided, however, that upon the occurrence of any of the events specified in
Section 13.01(i), the entire Debt will be immediately due and payable without
notice or demand or any other declaration of the amounts due and payable; or
(ii) bring, an action to foreclose this Security Instrument and without applying
for a receiver for the Rents, but subject to the rights of the tenants under the
Leases, enter into or upon the Property or any part thereof, either personally
or by its agents, nominees or attorneys, and dispossess Mortgagor and its agents
and servants therefrom, and thereupon Lender may (A) use, operate, manage,
control, insure, maintain, repair, restore and otherwise deal with all and every
part of the Property and conduct the business thereat, (B) make alterations,
additions, renewals, replacements and improvements to or on the Property or any
part thereof, (C) exercise all rights and powers of Mortgagor with respect to
the Property or any part thereof, whether in the name of Mortgagor or otherwise,
including, without limitation, the right to make, cancel, enforce or modify
Leases, obtain and evict tenants, and demand, sue for, collect and receive all
earnings, revenues, rents, issues, profits and other income of the Property and
every part thereof, and (D) apply the receipts from the Property or any part
thereof to the payment of the Debt, after deducting therefrom all expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
reasonably incurred in connection with the aforesaid operations and all amounts
necessary to pay the Impositions, insurance and other charges in connection with
the Property or any part thereof, as well as just and reasonable compensation
for the services of Lender’s third-party agents; or (iii) have an appraisal or
other valuation of the Property or any part thereof performed by an Appraiser
(and Mortgagor covenants and agrees it shall cooperate in causing any such
valuation or appraisal to be performed) and any cost or expense incurred by
Lender in connection therewith shall constitute a portion of the Debt and be
secured by this Security Instrument and shall be immediately due and payable to
Lender with interest, at the Default Rate, until the date of receipt by Lender;
or (iv), sell the Property or institute , proceedings for the complete
foreclosure of this Security Instrument, or take such other action as may be
allowed pursuant to Legal Requirements, at law or in equity, for the enforcement
of this Security Instrument in which case the Property or any part thereof may
be sold for cash or credit in one or more parcels; or (v) with or without entry,
and to the extent permitted and pursuant to the procedures provided by
applicable Legal Requirements, institute proceedings for the partial foreclosure
of this Security Instrument, or take such other action as may be allowed
pursuant to Legal Requirements, at law or in equity, for the enforcement of this
Security Instrument for the portion of the Debt then due and payable, subject to
the lien of this Security Instrument continuing unimpaired and without loss of
priority so as to secure the balance of the Debt not then due; or (vi) sell the
Property or any part thereof and any or all estate, claim, demand, right, title
and interest of Mortgagor therein and rights of redemption thereof, pursuant to
power of sale or otherwise, at one or more sales, in whole or in parcels, in any
order or manner, at such time and place, upon such terms and after such notice
thereof as may be required or permitted by law, at the discretion of Lender, and
in the event of a sale, by foreclosure or otherwise, of less than all of the
Property, this Security Instrument shall continue as a lien on the remaining
portion of the Property; or (vii) institute an action, suit or proceeding in
equity for the specific performance of any covenant, condition or agreement
contained in the Loan Documents, or any of them; or (viii) recover judgment on
the Note or any guaranty either before, during or after (or in lieu of) any
proceedings for the enforcement of this Security Instrument; or (ix) apply,
ex parte, for the
appointment of a custodian, trustee, receiver, keeper, liquidator or conservator
of the Property or any part thereof, irrespective of the adequacy of the
security for the Debt and without regard to the solvency of Mortgagor or of any
Person liable for the payment of the Debt, to which appointment Mortgagor does
hereby consent and such receiver or other official shall have all rights and
powers permitted by applicable law and such other rights and powers as the court
making such appointment may confer, but the appointment of such receiver or
other official shall not impair or in any manner prejudice the rights of Lender
to receive the Rent with respect to any of the Property pursuant to this
Security Instrument or the Assignment; or (x) require, at Lender’s option,
Mortgagor to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of any portion of the Property occupied by Mortgagor and may require
Mortgagor to vacate and surrender possession to Lender of the Property or to
such receiver and Mortgagor may be evicted by summary proceedings or otherwise;
or (xi) without notice to Mortgagor (A) apply all or any portion of the cash
collateral in any Sub-Account and Escrow Account, including any interest and/or
earnings therein, to carry out the obligations of Mortgagor under this Security
Instrument and the other Loan Documents, to protect and preserve the Property
and for any other purpose permitted under this Security Instrument and the other
Loan Documents and/or (B) have all or any portion of such cash collateral
immediately paid to Lender to be applied against the Debt in the order and
priority set forth in the Note; or (xii) pursue any or all such other rights or
remedies as Lender may have under applicable law or in equity; provided,
however, that the provisions of this Section 13.02(a) shall not be construed to
extend or modify any of the notice requirements or grace periods provided for
hereunder or under any of the other Loan Documents. Mortgagor hereby waives, to
the fullest extent permitted by Legal Requirements, any defense Mortgagor might
otherwise raise or have by the failure to make any tenants parties defendant to
a foreclosure proceeding and to foreclose their rights in any proceeding
instituted by Lender. 

     

    
      
        
        

      

      
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    (b) Any time
after an Event of Default Lender, shall have the power, to the extent permitted
by applicable law, to sell the Property or any part thereof at public auction,
in such manner, at such time and place, upon such terms and conditions, and upon
such public notice as Lender may deem best for the interest of Lender, or as may
be required or permitted by applicable law, consisting of advertisement (if
required by law) in a newspaper of general circulation in the jurisdiction and
for such period as applicable law may require and at such other times and by
such methods, if any, as may be required or permitted by law to convey the
Property or portions thereof in one or more sales in fee simple by Lender's deed
to and at the cost of the purchaser, who shall not be liable to see to the
application of the purchase money. The proceeds or avails of any sale made under
or by virtue of this Section 13.02, together with any other sums which then may
be held by Lender under this Security Instrument, whether under the provisions
of this Section 13.02 or otherwise, shall, to the extent permitted by applicable
law, be applied as follows:

     

    First: To
the payment of the third-party costs and expenses reasonably incurred in
connection with any such sale and to advances, fees and expenses, including,
without limitation, title service guaranty fees, reasonable fees and expenses of
Lender’s legal counsel as applicable, of the title company and of any judicial
proceedings wherein the same may be made, and of all expenses, liabilities and
advances reasonably made or incurred by Lender under this Security Instrument,
together with interest as provided herein on all such advances made by Lender,
and all Impositions, except any Impositions or other charges subject to which
the Property shall have been sold;

     

    Second:
To the payment of the whole amount then due, owing and unpaid under the Note for
principal and interest thereon, with interest on such unpaid principal at the
Default Rate from the date of the occurrence of the earliest Event of Default
that formed a basis for such sale until the same is paid;

     

    Third: To
the payment of any other portion of the Debt required to be paid by Mortgagor
pursuant to any provision of this Security Instrument, the Note, or any of the
other Loan Documents; and

     

    Fourth:
The surplus, if any, to Mortgagor or such other Persons as may be legally
entitled thereto, unless otherwise required by Legal Requirements.

     

    Lender
and any receiver or custodian of the Property or any part thereof shall be
liable to account for only those rents, issues, proceeds and profits actually
received by it.

     

    (c) Lender,
to the extent permitted by law, may adjourn from time to time any sale by it to
be made under or by virtue of this Security Instrument by announcement at the
time and place appointed for such sale or for such adjourned sale or sales and,
except as otherwise provided by any applicable provision of Legal Requirements,
Lender, without further notice or publication, may make such sale at the time
and place to which the same shall be so adjourned.

     

    
      
        
        

      

      
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    (d) Upon the
completion of any sale or sales made by Lender under or by virtue of this
Section 13.02, Lender or any officer of any court empowered to do so, shall
execute and deliver to the accepted purchaser or purchasers a good and
sufficient instrument, or good and sufficient instruments, granting, conveying,
assigning and transferring all estate, right, title and interest in and to the
property and rights sold. Lender is hereby irrevocably appointed the true and
lawful attorney-in-fact of Mortgagor (coupled with an interest), in its name and
stead, to make all necessary conveyances, assignments, transfers and deliveries
of the property and rights so sold pursuant to this Section 13.02 and for that
purpose Lender may execute all necessary instruments of conveyance, assignment,
transfer and delivery, and may substitute one or more Persons with like power,
Mortgagor hereby ratifying and confirming all that its said attorney-in-fact or
such substitute or substitutes shall lawfully do by virtue hereof. Nevertheless,
Mortgagor, if so requested by Lender, shall ratify and confirm any such sale or
sales by executing and delivering to Lender, or to such purchaser or purchasers
all such instruments as may be advisable, in the sole judgment of Lender, for
such purpose, and as may be designated in such request. Any such sale or sales
made under or by virtue of this Section 13.02, whether made under or by virtue
of judicial proceedings or a judgment or decree of foreclosure and sale, shall
operate to divest all the estate, right, title, interest, claim and demand
whatsoever, whether at law or in equity, of Mortgagor in and to the property and
rights so sold, and shall, to the fullest extent permitted under Legal
Requirements, be a perpetual bar, both at law and in equity against Mortgagor
and against any and all Persons claiming or who may claim the same, or any part
thereof, from, through or under Mortgagor.

     

    (e) In the
event of any sale made under or by virtue of this Section 13.02 (whether made
under or by virtue of judicial proceedings or a judgment or decree of
foreclosure and sale), the entire Debt immediately thereupon shall, anything in
the Loan Documents to the contrary notwithstanding, become due and
payable.

     

    (f) Upon any
sale made under or by virtue of this Section 13.02 (whether made under or by
virtue of judicial proceedings or a judgment or decree of foreclosure and sale),
Lender may bid for and acquire the Property or any part thereof and in lieu of
paying cash therefor may make settlement for the purchase price by crediting
upon the Debt the net sales price after deducting therefrom the expenses of the
sale and the costs of the action.

     

    (g) No
recovery of any judgment by Lender and no levy of an execution under any
judgment upon the Property or any part thereof or upon any other property of
Mortgagor shall release the lien of this Security Instrument upon the Property
or any part thereof, or any liens, rights, powers or remedies of Lender
hereunder, but such liens, rights, powers and remedies of Lender shall continue
unimpaired until all amounts due under the Note, this Security Instrument and
the other Loan Documents are paid in full.

     

    (h) Upon the
exercise by Lender of any power, right, privilege, or remedy pursuant to this
Security Instrument which requires any consent, approval, registration,
qualification, or authorization of any Governmental Authority, Mortgagor agrees
to execute and deliver, or will cause the execution and delivery of, all
applications, certificates, instruments, assignments and other documents and
papers that Lender or any purchaser of the Property may be required to obtain
for such governmental consent, approval, registration, qualification, or
authorization and Lender is hereby irrevocably appointed the true and lawful
attorney-in-fact of Mortgagor (coupled with an interest), in its name and stead,
to execute all such applications, certificates, instruments, assignments and
other documents and papers.

     

    
      
        
        

      

      
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    Section
13.03. Payment of Debt After
Default. If,
following the occurrence of any Event of Default, Mortgagor shall tender payment
of an amount sufficient to satisfy the Debt in whole or in part at any time
prior to a foreclosure sale of the Property, and if at the time of such tender
prepayment of the principal balance of the Note is not permitted by the Note or
this Security Instrument, Mortgagor shall, in addition to the entire Debt, also
pay to Lender all amounts due Lender under Section 1.5(b) of the Note. If at the
time of such tender, prepayment of the principal balance of the Note is
permitted, such tender by Mortgagor shall be deemed to be a voluntary prepayment
of the principal balance of the Note and Mortgagor shall, in addition to the
entire Debt, also pay to Lender the applicable prepayment consideration
specified in the Note and this Security Instrument.

     

    Section
13.04. Possession of the
Property. Upon
the occurrence of any Event of Default hereunder and the acceleration of the
Debt or any portion thereof, Mortgagor, if an occupant of the Property or any
part thereof, upon demand of Lender, shall immediately surrender possession of
the Property (or the portion thereof so occupied) to Lender, and if Mortgagor is
permitted to remain in possession, the possession shall be as a month-to-month
tenant of Lender and, on demand, Mortgagor shall pay to Lender monthly, in
advance, a reasonable rental for the space so occupied and in default thereof
Mortgagor may be dispossessed. The covenants herein contained may be enforced by
a receiver of the Property or any part thereof. Nothing in this Section 13.04
shall be deemed to be a waiver of the provisions of this Security Instrument
making the Transfer of the Property or any part thereof without Lender’s prior
written consent an Event of Default.

     

    Section
13.05. Interest After
Default. If any
amount due under the Note, this Security Instrument or any of the other Loan
Documents is not paid within any applicable notice and grace period after same
is due, whether such date is the stated due date, any accelerated due date or
any other date or at any other time specified under any of the terms hereof or
thereof, then, in such event, Mortgagor shall pay interest on the amount not so
paid from and after the date on which such amount first becomes due at the
Default Rate; and such interest shall be due and payable at such rate until the
earlier of the cure of all Events of Default or the payment of the entire amount
due to Lender, whether or not any action shall have been taken or proceeding
commenced to recover the same or to foreclose this Security Instrument. All
unpaid and accrued interest shall be secured by this Security Instrument as part
of the Debt. Nothing in this Section 13.05 or in any other provision of this
Security Instrument shall constitute an extension of the time for payment of the
Debt.

     

    Section
13.06. Mortgagor’s Actions After
Default. After
the happening of any Event of Default and immediately upon the commencement of
any action, suit or other legal proceedings by Lender to obtain judgment for the
Debt, or of any other nature in aid of the enforcement of the Loan Documents,
Mortgagor will (a) after receipt of notice of the institution of any such
action, waive the issuance and service of process and enter its voluntary
appearance in such action, suit or proceeding, and (b) if required by Lender,
consent to the appointment of a receiver or receivers of the Property or any
part thereof and of all the earnings, revenues, rents, issues, profits and
income thereof. 

     

    
      
        
        

      

      
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    Section
13.07. Control by Lender After
Default.
Notwithstanding the appointment of any custodian, receiver, liquidator or
trustee of Mortgagor, or of any of its property, or of the Property or any part
thereof, to the extent permitted by Legal Requirements, Lender shall be entitled
to obtain possession and control of all property now and hereafter covered by
this Security Instrument and the Assignment following the occurrence of an Event
of Default in accordance with the terms hereof.

     

    Section
13.08. Right to Cure
Defaults. (a)
Upon the
occurrence of any Event of Default, Lender or its agents may, but without any
obligation to do so and without notice to or demand on Mortgagor and without
releasing Mortgagor from any obligation hereunder, make or do the same in such
manner and to such extent as Lender may deem necessary to protect the security
hereof. Lender and its agents are authorized to enter upon the Property or any
part thereof for such purposes, or appear in, defend, or bring any action or
proceedings to protect Lender’s interest in the Property or any part thereof or
to foreclose this Security Instrument or collect the Debt, and the cost and
expense thereof (including reasonable attorneys’ fees to the extent permitted by
law), with interest as provided in this Section 13.08, shall constitute a
portion of the Debt and shall be immediately due and payable to Lender upon
demand. All such costs and expenses incurred by Lender or its agents in
remedying such Event of Default or in appearing in, defending, or bringing any
such action or proceeding shall bear interest at the Default Rate, for the
period from the date so demanded to the date of payment to Lender. All such
costs and expenses incurred by Lender or its agents together with interest
thereon calculated at the above rate shall be deemed to constitute a portion of
the Debt and be secured by this Security Instrument.

     

    (b) If Lender
makes any payment or advance that Lender is authorized by this Security
Instrument to make in the place and stead of Mortgagor (i) relating to the
Impositions or tax liens asserted against the Property, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of the bill, statement or
estimate or into the validity of any of the Impositions or the tax liens or
claims thereof; (ii) relating to any apparent or threatened adverse title, lien,
claim of lien, encumbrance, claim or charge, Lender will be the sole judge of
the legality or validity of same; or (iii) relating to any other purpose
authorized by this Security Instrument but not enumerated in this Section 13.08,
Lender may do so whenever, in its judgment and discretion, the payment or
advance seems necessary or desirable to protect the Property and the full
security interest intended to be created by this Security Instrument. In
connection with any payment or advance made pursuant to this Section 13.08,
Lender has the option and is authorized, but in no event shall be obligated, to
obtain a continuation report of title prepared by a title insurance company. The
payments and the advances made by Lender pursuant to this Section 13.08 and the
cost and expenses of said title report will be due and payable by Mortgagor on
demand, together with interest at the Default Rate, and will be secured by this
Security Instrument.

     

    Section
13.09. Late Payment
Charge. If any
portion of the Debt is not paid in full on or before the day on which it is due
and payable hereunder Mortgagor shall pay to Lender an amount equal to five
percent (5%) of such unpaid portion of the Debt (“Late
Charge”) to
defray the expense incurred by Lender in handling and processing such delinquent
payment, and such amount shall constitute a part of the Debt; provided, that no
late charge shall be due and payable if Mortgagor fails to repay the Loan
evidenced hereby upon the Maturity Date (whether by acceleration or
otherwise). 

     

    
      
        
        

      

      
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    Section
13.10. Recovery of Sums Required to
Be Paid. Lender
shall have the right from time to time to take action to recover any sum or sums
which constitute a part of the Debt as the same become due and payable hereunder
(after the expiration of any grace period or the giving of any notice herein
provided, if any), without regard to whether or not the balance of the Debt
shall be due, and without prejudice to the right of Lender thereafter to bring
an action of foreclosure, or any other action, for a default or defaults by
Mortgagor existing at the time such earlier action was commenced.

     

    Section
13.11. Marshalling and Other
Matters.
Mortgagor hereby waives, to the fullest extent permitted by law, the benefit of
all appraisement, valuation, stay, extension, reinstatement, redemption (both
equitable and statutory) and homestead laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Property or any
part thereof or any interest therein. Nothing herein or in any other Loan
Document shall be construed as requiring Lender to resort to any particular
Cross-collateralized Property for the satisfaction of the Debt in preference or
priority to any other Cross-collateralized Property but Lender may seek
satisfaction out of all the Cross-collateralized Properties or any part thereof
in its absolute discretion. Further, Mortgagor hereby expressly waives any and
all rights of redemption from sale under any order or decree of foreclosure of
this Security Instrument on behalf of Mortgagor, whether equitable or statutory
and on behalf of each and every Person acquiring any interest in or title to the
Property or any part thereof subsequent to the date of this Security Instrument
and on behalf of all Persons to the fullest extent permitted by applicable
law.

     

    Section
13.12. Tax Reduction
Proceedings. After
an Event of Default, Mortgagor shall be deemed to have appointed Lender as its
attorney-in-fact to seek a reduction or reductions in the assessed valuation of
the Property for real property tax purposes or for any other purpose and to
prosecute any action or proceeding in connection therewith. This power, being
coupled with an interest, shall be irrevocable for so long as any part of the
Debt remains unpaid and any Event of Default shall be continuing.

     

    Section
13.13. General Provisions Regarding
Remedies.

     

    (a) Right to Terminate
Proceedings. Lender
may terminate or rescind any proceeding or other action brought in connection
with its exercise of the remedies provided in Section 13.02 at any time before
the conclusion thereof, as determined in Lender’s sole discretion and without
prejudice to Lender.

     

    (b) No Waiver or
Release. The
failure of Lender to exercise any right, remedy or option provided in the Loan
Documents shall not be deemed a waiver of such right, remedy or option or of any
covenant or obligation contained in the Loan Documents. No acceptance by Lender
of any payment after the occurrence of an Event of Default and no payment by
Lender of any payment or obligation for which Mortgagor is liable hereunder
shall be deemed to waive or cure any Event of Default. No sale of all or any
portion of the Property, no forbearance on the part of Lender, and no extension
of time for the payment of the whole or any portion of the Debt or any other
indulgence given by Lender to Mortgagor or any other Person, shall operate to
release or in any manner affect the interest of Lender in the Property or the
liability of Mortgagor to pay the Debt. No waiver by Lender shall be effective
unless it is in writing and then only to the extent specifically
stated.

     

    
      
        
        

      

      
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    (c) No Impairment; No
Releases. The
interests and rights of Lender under the Loan Documents shall not be impaired by
any indulgence, including (i) any renewal, extension or modification which
Lender may grant with respect to any of the Debt; (ii) any surrender,
compromise, release, renewal, extension, exchange or substitution which Lender
may grant with respect to the Property or any portion thereof; or (iii) any
release or indulgence granted to any maker, endorser, guarantor or surety of any
of the Debt.

     

    (d) Effect on
Judgment. No
recovery of any judgment by Lender and no levy of an execution under any
judgment upon any Property or any portion thereof shall affect in any manner or
to any extent the lien of the other Cross-collateralized Mortgage upon the
remaining Cross-collateralized Properties or any portion thereof, or any rights,
powers or remedies of Lender hereunder or thereunder. Such lien, rights, powers
and remedies of Lender shall continue unimpaired as before.

     

    ARTICLE
XIV:   COMPLIANCE WITH
REQUIREMENTS

     

    Section
14.01. Compliance with Legal
Requirements. (a)
Mortgagor
shall promptly comply with all present and future Legal Requirements, foreseen
and unforeseen, ordinary and extraordinary, whether requiring structural or
nonstructural repairs or alterations including, without limitation, all zoning,
subdivision, building, safety and environmental protection, land use and
development Legal Requirements, all Legal Requirements which may be applicable
to the curbs adjoining the Property or to the use or manner of use thereof, and
all rent control, rent stabilization and all other similar Legal Requirements
relating to rents charged and/or collected in connection with the Leases.
Mortgagor represents and warrants that the Property to the best of Mortgagor’s
knowledge is in compliance in all material respects with all Legal Requirements
as of the date hereof, no notes or notices of violations of any Legal
Requirements have been entered or received by Mortgagor and there is no basis
for the entering of such notes or notices.

     

    (b) Mortgagor
shall have the right to contest by appropriate legal proceedings diligently
conducted in good faith, without cost or expense to Lender, the validity or
application of any Legal Requirement and to suspend compliance therewith if
permitted under applicable Legal Requirements, provided (i) failure to comply
therewith may not subject Lender to any civil or criminal liability, (ii) prior
to and during such contest, Mortgagor shall furnish to Lender security
reasonably satisfactory to Lender, in its discretion, against loss or injury by
reason of such contest or non-compliance with such Legal Requirement, (iii) no
Default or Event of Default shall exist during such proceedings and such contest
shall not otherwise violate any of the provisions of any of the Loan Documents,
(iv) such contest shall not (unless Mortgagor shall comply with the provisions
of clause (ii) of this Section 14.01(b)) subject the Property to any lien or
encumbrance the enforcement of which is not suspended or otherwise affect the
priority of the lien of this Security Instrument; (v) such contest shall not
affect the ownership, use or occupancy of the Property; (vi) the Property or any
part thereof or any interest therein shall not be in any danger of being sold,
forfeited or lost by reason of such contest by Mortgagor; (vii) Mortgagor shall
give Lender prompt notice of the commencement of such proceedings and, upon
request by Lender, notice of the status of such proceedings and/or confirmation
of the continuing satisfaction of the conditions set forth in clauses (i) - (vi)
of this Section 14.01(b); and (viii) upon a final determination of such
proceeding, Mortgagor shall take all steps necessary to comply with any
requirements arising therefrom.

     

    
      
        
        

      

      
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    (c) Mortgagor
shall at all times comply with all applicable Legal Requirements with respect to
the construction, use and maintenance of any vaults adjacent to the Property. If
by reason of the failure to pay taxes, assessments, charges, permit fees,
franchise taxes or levies of any kind or nature, the continued use of the vaults
adjacent to Property or any part thereof is discontinued, Mortgagor nevertheless
shall, with respect to any vaults which may be necessary for the continued use
of the Property, take such steps (including the making of any payment) to ensure
the continued use of vaults or replacements.

     

    Section
14.02. Compliance with Recorded
Documents; No Future Grants.
Mortgagor shall promptly perform and observe or cause to be performed and
observed, all of the terms, covenants and conditions of all Property Agreements
and all things necessary to preserve intact and unimpaired any and all
appurtenances or other interests or rights affecting the Property.

     

    ARTICLE
XV:   PREPAYMENT

     

    Section
15.01. Prepayment.
 Except as
set forth in Section 1.5 of the Note, no prepayment of the Debt may be made in
whole or in part.

     

    ARTICLE
XVI:   ENVIRONMENTAL
COMPLIANCE

     

    Section
16.01.   Covenants, Representations
and Warranties.
(a)
Mortgagor
has not, at any time, and, to Mortgagor’s best knowledge after due inquiry and
investigation, except as set forth in the Environmental Report, no other Person
has at any time, handled, buried, stored, retained, refined, transported,
processed, manufactured, generated, produced, spilled, allowed to seep, leak,
escape or leach, or pumped, poured, emitted, emptied, discharged, injected,
dumped, transferred or otherwise disposed of or dealt with Hazardous Materials
on, to or from the Premises or any other real property owned and/or occupied by
Mortgagor (other than in compliance with all Legal Requirements), and Mortgagor
does not intend to and shall not use the Property or any part thereof or any
such other real property for the purpose of handling, burying, storing,
retaining, refining, transporting, processing, manufacturing, generating,
producing, spilling, seeping, leaking, escaping, leaching, pumping, pouring,
emitting, emptying, discharging, injecting, dumping, transferring or otherwise
disposing of or dealing with Hazardous Materials, except for use and storage for
use of heating oil, cleaning fluids, pesticides and other substances customarily
used in the operation of properties that are being used for the same purposes as
the Property is presently being used, provided such use and/or storage for use
is in compliance with the requirements hereof and the other Loan Documents and
does not give rise to liability under applicable Legal Requirements or
Environmental Statutes or be the basis for a lien against the Property or any
part thereof. In addition, without limitation to the foregoing provisions,
Mortgagor represents and warrants that, to the best of its knowledge, after due
inquiry and investigation, except as previously disclosed in writing to Lender
or in the Environmental Report or Engineering Report, there is no asbestos in,
on, over, or under all or any portion of the fire-proofing or any other portion
of the Property.

     

    
      
        
        

      

      
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    (b) Mortgagor,
after due inquiry and investigation, knows of no seepage, leak, escape, leach,
discharge, injection, release, emission, spill, pumping, pouring, emptying or
dumping of Hazardous Materials into waters on, under or adjacent to the Property
or any part thereof or any other real property owned and/or occupied by
Mortgagor, or onto lands from which such Hazardous Materials might seep, flow or
drain into such waters, except as disclosed in the Environmental
Report.

     

    (c) Mortgagor
shall not permit any Hazardous Materials to be handled, buried, stored,
retained, refined, transported, processed, manufactured, generated, produced,
spilled, allowed to seep, leak, escape or leach, or to be pumped, poured,
emitted, emptied, discharged, injected, dumped, transferred or otherwise
disposed of or dealt with on, under, to or from the Property or any portion
thereof at any time, except for use and storage for use of heating oil, ordinary
cleaning fluids, pesticides and other substances customarily used in the
operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is in
compliance with the requirements hereof and the other Loan Documents and does
not give rise to liability under applicable Legal Requirements or be the basis
for a lien against the Property or any part thereof.

     

    (d) Mortgagor
represents and warrants that no actions, suits, or proceedings have been
commenced, or are pending, or to the best knowledge of Mortgagor, are threatened
with respect to any Legal Requirement governing the use, manufacture, storage,
treatment, transportation, or processing of Hazardous Materials with respect to
the Property or any part thereof. Mortgagor has received no notice of, and,
except as disclosed in the Environmental Report, after due inquiry, has no
knowledge of any fact, condition, occurrence or circumstance which with notice
or passage of time or both would give rise to a claim under or pursuant to any
Environmental Statute pertaining to Hazardous Materials on, in, under or
originating from the Property or any part thereof or any other real property
owned or occupied by Mortgagor or arising out of the conduct of Mortgagor,
including, without limitation, pursuant to any Environmental
Statute.

     

    (e) Mortgagor
has not waived any Person’s liability with regard to Hazardous Materials in, on,
under or around the Property, nor has Mortgagor retained or assumed,
contractually or by operation of law, any other Person’s liability relative to
Hazardous Materials or any claim, action or proceeding relating
thereto.

     

    (f) In the
event that there shall be filed a lien against the Property or any part thereof
pursuant to any Environmental Statute pertaining to Hazardous Materials,
Mortgagor shall, within sixty (60) days or, in the event that the applicable
Governmental Authority has commenced steps to cause the Premises or any part
thereof to be sold pursuant to the lien, within fifteen (15) days, from the date
that Mortgagor receives notice of such lien, either (i) pay the claim and remove
the lien from the Property, or (ii) furnish (A) a bond satisfactory to Lender in
the amount of the claim out of which the lien arises, (B) a cash deposit in the
amount of the claim out of which the lien arises, or (C) other security
reasonably satisfactory to Lender in an amount sufficient to discharge the claim
out of which the lien arises.

     

    
      
        
        

      

      
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    (g) Mortgagor
represents and warrants that (i) except as disclosed in the Environmental
Report, Mortgagor has no knowledge of any violation of any Environmental Statute
or any Environmental Problem in connection with the Property, nor has Mortgagor
been requested or required by any Governmental Authority to perform any remedial
activity or other responsive action in connection with any Environmental Problem
and (ii) neither the Property nor any other property owned by Mortgagor is
included or, to Mortgagor’s best knowledge, after due inquiry and investigation,
proposed for inclusion on the National Priorities List issued pursuant to CERCLA
by the United States Environmental Protection Agency (the “EPA”) or on
the inventory of other potential “Problem” sites issued by the EPA and has not
otherwise been identified by the EPA as a potential CERCLA site or included or,
to Mortgagor’s knowledge, after due inquiry and investigation, proposed for
inclusion on any list or inventory issued pursuant to any other Environmental
Statute, if any, or issued by any other Governmental Authority. Mortgagor
covenants that Mortgagor will comply with all Environmental Statutes affecting
or imposed upon Mortgagor or the Property.

     

    (h) Mortgagor
covenants that it shall promptly notify Lender of the presence and/or release of
any Hazardous Materials and of any request for information or any inspection of
the Property or any part thereof by any Governmental Authority with respect to
any Hazardous Materials and provide Lender with copies of such request and any
response to any such request or inspection. Mortgagor covenants that it shall,
in compliance with applicable Legal Requirements, conduct and complete all
investigations, studies, sampling and testing (and promptly shall provide Lender
with copies of any such studies and the results of any such test) and all
remedial, removal and other actions necessary to clean up and remove all
Hazardous Materials in, on, over, under, from or affecting the Property or any
part thereof in accordance with all such Legal Requirements applicable to the
Property or any part thereof to the satisfaction of Lender.

     

    (i) Following
the occurrence of an Event of Default that is continuing hereunder, and without
regard to whether Lender shall have taken possession of the Property or a
receiver has been requested or appointed or any other right or remedy of Lender
has or may be exercised hereunder or under any other Loan Document, Lender shall
have the right (but no obligation) to conduct such investigations, studies,
sampling and/or testing of the Property or any part thereof as Lender may, in
its discretion, determine to conduct, relative to Hazardous Materials. All costs
and expenses incurred in connection therewith including, without limitation,
consultants’ fees and disbursements and laboratory fees, shall constitute a part
of the Debt and shall, upon demand by Lender, be immediately due and payable and
shall bear interest at the Default Rate from the date so demanded by Lender
until reimbursed. Mortgagor shall, at its sole cost and expense, fully and
expeditiously cooperate in all such investigations, studies, samplings and/or
testings including, without limitation, providing all relevant information and
making knowledgeable people available for interviews.

     

    (j) Mortgagor
represents and warrants that, except as disclosed in the Environmental Report,
all paint and painted surfaces existing within the interior or on the exterior
of the Improvements are not flaking, peeling, cracking, blistering, or chipping,
and do not contain lead or are maintained in a condition that prevents exposure
of young children to lead-based paint, as of the date hereof, and that the
current inspections, operation, and maintenance program at the Property with
respect to lead-based paint is consistent with FNMA guidelines and sufficient to
ensure that all painted surfaces within the Property shall be maintained in a
condition that prevents exposure of tenants to lead-based paint. To Mortgagor’s
knowledge, there have been no claims for adverse health effects from exposure on
the Property to lead-based paint or requests for the investigation, assessment
or removal of lead-based paint at the Property.

     

    
      
        
        

      

      
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    (k) Mortgagor
represents and warrants that except in accordance with all applicable
Environmental Statutes and as disclosed in the Environmental Report, (i) no
underground treatment or storage tanks or pumps or water, gas, or oil wells are
or have been located about the Property, (ii) no PCBs or transformers,
capacitors, ballasts or other equipment that contain dielectric fluid containing
PCBs are located about the Property, (iii) no insulating material
containing urea formaldehyde is located about the Property and (iv) no
asbestos-containing material is located about the Property.

     

    (l) For the
properties known as 100 James Drive, 120 Mallard Street, 6565 Exchequer Drive,
7042 Alamo Downs Parkway, 11301 Industriplex Blvd., 11441 Industriplex Blvd. and
1701-1759 Grandstand Drive, Mortgagor
covenants and agrees to institute, within thirty (30) days after the date
hereof, an operations and maintenance program (the "Maintenance Program")
designed by an environmental consultant, satisfactory to the Lender, with
respect to asbestos containing materials ("ACM's"), consistent with "Guidelines
for Controlling Asbestos-Containing Materials in Buildings" (USEPA, 1985) and
other relevant guidelines, and such Maintenance Program will hereafter
continuously remain in effect until the indebtedness secured hereby is repaid in
full. In furtherance of the foregoing, Mortgagor shall inspect and maintain all
ACM's on a regular basis and ensure that all ACM's shall be maintained in a
condition that prevents exposure of residents to ACM's at all times. Without
limiting the generality of the preceding sentence, Lender may reasonably require
(i) periodic notices or reports to Lender in form, substance and at such
intervals as Lender may specify, (ii) an amendment to such Maintenance Program
to address changing circumstances, laws or other matters, (iii) at Mortgagor's
sole expense, supplemental examination of the Property by consultants specified
by Lender, and (iv) variation of the Maintenance Program in response to the
reports provided by any such consultants.

     

    Section
16.02. Environmental
Indemnification.
Mortgagor shall defend, indemnify and hold harmless the Indemnified Parties for,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, known or
unknown, contingent or otherwise, whether incurred or imposed within or outside
the judicial process, including, without limitation, reasonable attorneys’ and
consultants’ fees and disbursements and investigations and laboratory fees
arising out of, or in any way related to any Environmental Problem, including
without limitation:

     

    (a) the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threat of release of any Hazardous Materials in, on, over, under,
from or affecting the Property or any part thereof whether or not disclosed by
the Environmental Report;

     

    (b) any
personal injury (including wrongful death, disease or other health condition
related to or caused by, in whole or in part, any Hazardous Materials) or
property damage (real or personal) arising out of or related to any Hazardous
Materials in, on, over, under, from or affecting the Property or any part
thereof whether or not disclosed by the Environmental Report;

     

    
      
        
        

      

      
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    (c) any
action, suit or proceeding brought or threatened, settlement reached, or order
of any Governmental Authority relating to such Hazardous Material whether or not
disclosed by the Environmental Report; and/or

     

    (d) any
violation of the provisions, covenants, representations or warranties of Section
16.01 hereof or of any Legal Requirement which is based on or in any way related
to any Hazardous Materials in, on, over, under, from or affecting the Property
or any part thereof including, without limitation, the cost of any work
performed and materials furnished in order to comply therewith whether or not
disclosed by the Environmental Report.

     

    Notwithstanding
the foregoing provisions of this Section 16.02 to the contrary, Mortgagor shall
have no obligation to indemnify Lender for liabilities, claims, damages,
penalties, causes of action, costs and expenses relative to the foregoing which
result directly from Lender’s willful misconduct or gross negligence. Any
amounts payable to Lender by reason of the application of this Section 16.02
shall be secured by this Security Instrument and shall, upon demand by Lender,
become immediately due and payable and shall bear interest at the Default Rate
from the date so demanded by Lender until paid.

     

    This
indemnification shall survive the termination of this Security Instrument
whether by repayment of the Debt, foreclosure or deed in lieu thereof,
assignment, or otherwise. The indemnity provided for in this Section 16.02 shall
not be included in any exculpation of Mortgagor or its principals from personal
liability provided for in this Security Instrument or in any of the other Loan
Documents. Nothing in this Section 16.02 shall be deemed to deprive Lender of
any rights or remedies otherwise available to Lender, including, without
limitation, those rights and remedies provided elsewhere in this Security
Instrument or the other Loan Documents. The foregoing indemnity shall
specifically not include any such costs relating to Hazardous Materials which
are initially placed on, in or under any of the Properties after foreclosure or
other taking of title of such Properties by Lender or its successors or
assigns.

     

    ARTICLE
XVII:   ASSIGNMENTS

     

    Section
17.01. Participations and
Assignments. Lender
shall have the right to assign this Security Instrument and/or any of the Loan
Documents, and to transfer, assign or sell participations and subparticipations
(including blind or undisclosed participations and subparticipations) in the
Loan Documents and the obligations hereunder to any Person; provided, however,
that no such participation shall increase, decrease or otherwise affect either
Mortgagor’s or Lender’s obligations under this Security Instrument or the other
Loan Documents or increase the Debt.

     

    ARTICLE
XVIII:   MISCELLANEOUS

     

    Section
18.01. Right of
Entry. Lender
and its agents shall have the right to enter and inspect the Property or any
part thereof at all reasonable times, and, except in the event of an emergency,
upon reasonable notice and to inspect Mortgagor’s books and records and to make
abstracts and reproductions thereof (but in no event more frequently than two
(2) times per calendar year provided no Event of Default has
occurred).

     

    
      
        
        

      

      
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    Section
18.02. Cumulative
Rights. The
rights of Lender under this Security Instrument shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No act
of Lender shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision. Lender shall not be limited
exclusively to the rights and remedies herein stated but shall be entitled,
subject to the terms of this Security Instrument, to every right and remedy now
or hereafter afforded by law.

     

    Section
18.03. Liability. If
Mortgagor consists of more than one Person, the obligations and liabilities of
each such Person hereunder shall be joint and several.

     

    Section
18.04. Exhibits
Incorporated. The
information set forth on the cover hereof, and the Exhibits annexed hereto, are
hereby incorporated herein as a part of this Security Instrument with the same
effect as if set forth in the body hereof.

     

    Section
18.05. Severable
Provisions. If any
term, covenant or condition of the Loan Documents including, without limitation,
the Note or this Security Instrument, is held to be invalid, illegal or
unenforceable in any respect, such Loan Document shall be construed without such
provision.

     

    Section
18.06. Duplicate
Originals. This
Security Instrument may be executed in any number of duplicate originals and
each such duplicate original shall be deemed to constitute but one and the same
instrument.

     

    Section
18.07. No Oral
Change. The
terms of this Security Instrument, together with the terms of the Note and the
other Loan Documents, constitute the entire understanding and agreement of the
parties hereto and supersede all prior agreements, understandings and
negotiations between Mortgagor and Lender with respect to the Loan. This
Security Instrument, and any provisions hereof, may not be modified, amended,
waived, extended, changed, discharged or terminated orally or by any act on the
part of Mortgagor or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.

     

    Section
18.08. Waiver of Counterclaim,
Etc.
MORTGAGOR 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, AND WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER OR IN ANY COUNTERCLAIM
MORTGAGOR MAY BE PERMITTED TO ASSERT HEREUNDER OR WHICH MAY BE ASSERTED BY
LENDER OR ITS AGENTS, AGAINST MORTGAGOR, OR IN ANY MATTERS WHATSOEVER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS SECURITY INSTRUMENT OR THE
DEBT.

     

    Section
18.09. Headings; Construction of
Documents; etc. The
table of contents, headings and captions of various paragraphs of this Security
Instrument are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.
Mortgagor acknowledges that it was represented by competent counsel in
connection with the negotiation and drafting of this Security Instrument and the
other Loan Documents and that neither this Security Instrument nor the other
Loan Documents shall be subject to the principle of construing the meaning
against the Person who drafted same.

     

    
      
        
        

      

      
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    Section
18.10. Sole Discretion of
Lender.
Whenever Lender exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Lender, the decision of Lender to
approve or disapprove or to decide that arrangements or terms are satisfactory
or not satisfactory shall be in the sole discretion of Lender and shall be final
and conclusive, except as may be otherwise specifically provided
herein.

     

    Section
18.11. Waiver of
Notice.
Mortgagor shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Security Instrument
specifically and expressly provides for the giving of notice by Lender to
Mortgagor and except with respect to matters for which Mortgagor is not,
pursuant to applicable Legal Requirements, permitted to waive the giving of
notice.

     

    Section
18.12. Covenants Run with the
Land. All of
the grants, covenants, terms, provisions and conditions herein shall run with
the Premises, shall be binding upon Mortgagor and shall inure to the benefit of
Lender, subsequent holders of this Security Instrument and their successors and
assigns. Without limitation to any provision hereof, the term “Mortgagor” shall
include and refer to Mortgagor named herein, any subsequent owner of the
Property, and its respective heirs, executors, legal representatives, successors
and assigns. The representations, warranties and agreements contained in this
Security Instrument and the other Loan Documents are intended solely for the
benefit of the parties hereto, shall confer no rights hereunder, whether legal
or equitable, in any other Person and no other Person shall be entitled to rely
thereon.

     

    Section
18.13. Applicable
Law.
THIS
SECURITY INSTRUMENT WAS NEGOTIATED IN NEW YORK, AND MADE BY MORTGAGOR AND
ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE WERE
DISBURSED FROM 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 SECURITY
INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED
STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,
PERFECTION, PRIORITY, ENFORCEMENT AND FORECLOSURE OF THE LIENS AND SECURITY
INTERESTS CREATED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE
LAW OF THE STATE IN WHICH THE PREMISES IS LOCATED, IT BEING UNDERSTOOD THAT, TO
THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF
NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS, AND
THE DEBT OR OBLIGATIONS ARISING HEREUNDER.

     

    
      
        
        

      

      
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    Section
18.14. Security
Agreement. (a)
(i) This
Security Instrument is both a real property mortgage, deed to secure debt or
deed of trust, as applicable, and a “security agreement” within the meaning of
the UCC. The Property includes both real and personal property and all other
rights and interests, whether tangible or intangible in nature, of Mortgagor in
the Property, and Mortgagor hereby grants to Lender a security interest in all
portions of the Property constituting personal property or fixtures under the
UCC. This Security Instrument is filed as a fixture filing and covers goods
which are or are to become fixtures on the Property. Mortgagor by executing and
delivering this Security Instrument has granted to Lender, as security for the
Debt, a security interest in the Property to the full extent that the Property
may be subject to the UCC (said portion of the Property so subject to the UCC
being called in this Section 18.14 the “Collateral”). If an
Event of Default shall occur, Lender, in addition to any other rights and
remedies which it may have, shall have and may exercise immediately and without
demand, any and all rights and remedies granted to a secured party upon default
under the UCC, including, without limiting the generality of the foregoing, to
the extent allowed by Legal Requirements. the right to take possession of the
Collateral or any part thereof, and to take such other measures as Lender may
deem necessary for the care, protection and preservation of the Collateral. Upon
request or demand of Lender following an Event of Default, Mortgagor shall, at
its expense, assemble the Collateral and make it available to Lender at a
convenient place acceptable to Lender. Mortgagor shall pay to Lender on demand
any and all expenses, including reasonable legal expenses and attorneys’ fees,
incurred or paid by Lender in protecting its interest in the Collateral and in
enforcing its rights hereunder with respect to the Collateral. Any disposition
pursuant to the UCC of so much of the Collateral as may constitute personal
property shall be considered commercially reasonable if made pursuant to a
public sale which is advertised at least twice in a newspaper in which sheriff’s
sales are advertised in the county where the Premises is located. Any notice of
sale, disposition or other intended action by Lender with respect to the
Collateral given to Mortgagor in accordance with the provisions hereof at least
ten (10) days prior to such action, shall constitute reasonable notice to
Mortgagor. The proceeds of any disposition of the Collateral, or any part
thereof, may be applied by Lender to the payment of the Debt in such priority
and proportions as Lender in its discretion shall deem proper. It is not
necessary that the Collateral be present at any disposition thereof. Lender
shall have no obligation to clean-up or otherwise prepare the Collateral for
disposition.

     

    (ii) The
mention in a financing statement filed in the records normally pertaining to
personal property of any portion of the Property shall not derogate from or
impair in any manner the intention of this Security Instrument. Lender hereby
declares that all items of Collateral are part of the real property encumbered
hereby to the fullest extent permitted by law, regardless of whether any such
item is physically attached to the Improvements or whether serial numbers are
used for the better identification of certain items. Specifically, the mention
in any such financing statement of any items included in the Property shall not
be construed to alter, impair or impugn any rights of Lender as determined by
this Security Instrument or the priority of Lender’s lien upon and security
interest in the Property in the event that notice of Lender’s priority of
interest as to any portion of the Property is required to be filed in accordance
with the UCC to be effective against or take priority over the interest of any
particular class of persons, including the federal government or any subdivision
or instrumentality thereof. No portion of the Collateral constitutes or is the
proceeds of “Farm Products”, as defined in the UCC.

     

    
      
        
        

      

      
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    (iii) If
Mortgagor is at any time a beneficiary under a letter of credit now or hereafter
issued in favor of Mortgagor, Mortgagor shall promptly notify Lender thereof
and, at the request and option of Lender, Mortgagor shall, pursuant to an
agreement in form and substance satisfactory to Lender, either (A) arrange for
the issuer and any confirmer of such letter of credit to consent to an
assignment to Lender of the proceeds of any drawing under the letter of credit
or (B) arrange for Lender to become the transferee beneficiary of the letter of
credit, with Lender agreeing, in each case, that the proceeds of any drawing
under the letter to credit are to be applied as provided in this Security
Instrument.

     

    (iv) Mortgagor
and Lender acknowledge that for the purposes of Article 9 of the UCC, the law of
the State of New York shall be the law of the jurisdiction of the bank in which
the Central Account is located.

     

    (v) Lender
may comply with any applicable Legal Requirements in connection with the
disposition of the Collateral, and Lender’s compliance therewith will not be
considered to adversely affect the commercial reasonableness of any sale of the
Collateral.

     

    (vi) Lender
may sell the Collateral without giving any warranties as to the Collateral.
Lender may specifically disclaim any warranties of title, possession, quiet
enjoyment or the like. This procedure will not be considered to adversely affect
the commercial reasonableness of any sale of the Collateral.

     

    (vii) If Lender
sells any of the Collateral upon credit, Mortgagor will be credited only with
payments actually made by the purchaser, received by Lender and applied to the
indebtedness of Mortgagor. In the event the purchaser of the Collateral fails to
fully pay for the Collateral, Lender may resell the Collateral and Mortgagor
will be credited with the proceeds of such sale.

     

    (b) Mortgagor
hereby irrevocably appoints Lender as its attorney-in-fact, coupled with an
interest, to file with the appropriate public office on its behalf any financing
or other statements signed only by Lender, as secured party, or, to the extent
permitted under the UCC, unsigned, in connection with the Collateral covered by
this Security Instrument.

     

    Section
18.15. Actions and
Proceedings. Lender
has the right to appear in and defend any action or proceeding brought with
respect to the Property in its own name or, if required by Legal Requirements
or, if in Lender’s reasonable judgment, it is necessary, in the name and on
behalf of Mortgagor, which Lender believes will adversely affect the Property or
this Security Instrument and to bring any action or proceedings, in its name or
in the name and on behalf of Mortgagor, which Lender, in its reasonable
discretion, decides should be brought to protect its interest in the
Property.

     

    Section
18.16. Usury
Laws. This
Security Instrument and the Note are subject to the express condition, and it is
the expressed intent of the parties, that at no time shall Mortgagor be
obligated or required to pay interest on the principal balance due under the
Note at a rate which could subject the holder of the Note to either civil or
criminal liability as a result of being in excess of the maximum interest rate
which Mortgagor is permitted by law to contract or agree to pay. If by the terms
of this Security Instrument or the Note, Mortgagor is at any time required or
obligated to pay interest on the principal balance due under the Note at a rate
in excess of such maximum rate, such rate of interest shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of such
maximum rate shall be applied and shall be deemed to have been payments in
reduction of the principal balance of the Note. No application to the principal
balance of the Note pursuant to this Section 18.16 shall give rise to any
requirement to pay any prepayment fee or charge of any kind due hereunder, if
any.

     

    
      
        
        

      

      
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    Section
18.17. Remedies of
Mortgagor. In the
event that a claim or adjudication is made that Lender has acted unreasonably or
unreasonably delayed acting in any case where by law or under the Note, this
Security Instrument or the Loan Documents, it has an obligation to act
reasonably or promptly, Lender shall not be liable for any monetary damages, and
Mortgagor’s remedies shall be limited to injunctive relief or declaratory
judgment.

     

    Section
18.18. Offsets, Counterclaims and
Defenses. Any
assignee of this Security Instrument, the Assignment and the Note shall take the
same free and clear of all offsets, counterclaims or defenses which are
unrelated to the Note, the Assignment or this Security Instrument which
Mortgagor may otherwise have against any assignor of this Security Instrument,
the Assignment and the Note and no such unrelated counterclaim or defense shall
be interposed or asserted by Mortgagor in any action or proceeding brought by
any such assignee upon this Security Instrument, the Assignment or the Note 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
Mortgagor.

     

    Section
18.19. No Merger. If
Mortgagor’s and Lender’s estates become the same including, without limitation,
upon the delivery of a deed by Mortgagor in lieu of a foreclosure sale, or upon
a purchase of the Property by Lender in a foreclosure sale, this Security
Instrument and the lien created hereby shall not be destroyed or terminated by
the application of the doctrine of merger and in such event Lender shall
continue to have and enjoy all of the rights and privileges of Lender as to the
separate estates; and, as a consequence thereof, upon the foreclosure of the
lien created by this Security Instrument, any Leases or subleases then existing
and created by Mortgagor shall not be destroyed or terminated by application of
the law of merger or as a result of such foreclosure unless Lender or any
purchaser at any such foreclosure sale shall so elect. No act by or on behalf of
Lender or any such purchaser shall constitute a termination of any Lease or
sublease unless Lender or such purchaser shall give written notice thereof to
such lessee or sublessee.

     

    Section
18.20. Restoration of
Rights. In case
Lender shall have proceeded to enforce any right under this Security Instrument
by foreclosure sale, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely, then, in every such case, Mortgagor and Lender shall be restored to
their former positions and rights hereunder with respect to the Property subject
to the lien hereof.

     

    
      
        
        

      

      
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    Section
18.21. Waiver of Statute of
Limitations. The
pleadings of any statute of limitations as a defense to any and all obligations
secured by this Security Instrument are hereby waived to the full extent
permitted by Legal Requirements.

     

    Section
18.22. Advances. This
Security Instrument shall cover any and all advances made pursuant to the Loan
Documents, rearrangements and renewals of the Debt and all extensions in the
time of payment thereof, even though such advances, extensions or renewals be
evidenced by new promissory notes or other instruments hereafter executed and
irrespective of whether filed or recorded. Likewise, the execution of this
Security Instrument shall not impair or affect any other security which may be
given to secure the payment of the Debt, and all such additional security shall
be considered as cumulative. The taking of additional security, execution of
partial releases of the security, or any extension of time of payment of the
Debt shall not diminish the force, effect or lien of this Security Instrument
and shall not affect or impair the liability of Mortgagor and shall not affect
or impair the liability of any maker, surety, or endorser for the payment of the
Debt.

     

    Section
18.23. Application of Default Rate
Not a Waiver.
Application of the Default Rate shall not be deemed to constitute a waiver of
any Default or Event of Default or any rights or remedies of Lender under this
Security Instrument, any other Loan Document or applicable Legal Requirements,
or a consent to any extension of time for the payment or performance of any
obligation with respect to which the Default Rate may be invoked.

     

    Section
18.24. Intervening
Lien. To the
fullest extent permitted by law, any agreement hereafter made pursuant to this
Security Instrument shall be superior to the rights of the holder of any
intervening lien or security interest.

     

    Section
18.25. No Joint Venture or
Partnership.
Mortgagor and Lender intend that the relationship created hereunder be solely
that of mortgagor and mortgagee or grantor and beneficiary or borrwoer and
lender, as the case may be. Nothing herein is intended to create a joint
venture, partnership, tenancy-in-common, or joint tenancy relationship between
Mortgagor and Lender nor to grant Lender any interest in the Property other than
that of mortgagee, beneficiary or lender.

     

    Section
18.26. Time of the
Essence. Time
shall be of the essence in the performance of all obligations of Mortgagor
hereunder.

     

    Section
18.27. Mortgagor’s Obligations
Absolute.
Mortgagor acknowledges that Lender and/or certain Affiliates of Lender are
engaged in the business of financing, owning, operating, leasing, managing, and
brokering real estate and in other business ventures which may be viewed as
adverse to or competitive with the business, prospect, profits, operations or
condition (financial or otherwise) of Mortgagor. Except as set forth to the
contrary in the Loan Documents, all sums payable by Mortgagor hereunder shall be
paid without notice or demand, counterclaim, set-off, deduction or defense and
without abatement, suspension, deferment, diminution or reduction, and the
obligations and liabilities of Mortgagor hereunder shall in no way be released,
discharged, or otherwise affected (except as expressly provided herein) by
reason of: (a) any damage to or destruction of or any Taking of the Property or
any portion thereof or any other Cross-collateralized
Property; (b) any restriction or prevention of or interference with any use of
the Property or any portion thereof or any other Cross-collateralized Property;
(c) any title defect or encumbrance or any eviction from the Premises or any
portion thereof by title paramount or otherwise; (d) any bankruptcy proceeding
relating to Mortgagor, any General Partner, or any guarantor or indemnitor, or
any action taken with respect to this Security Instrument or any other Loan
Document by any trustee or receiver of Mortgagor or any other
Cross-collateralized Mortgagor or any such General Partner, guarantor or
indemnitor, or by any court, in any such proceeding; (e) any claim which
Mortgagor has or might have against Lender; (f) any default or failure on the
part of Lender to perform or comply with any of the terms hereof or of any other
agreement with Mortgagor or any other Cross-collateralized Mortgagor; or (g) any
other occurrence whatsoever, whether similar or dissimilar to the foregoing,
whether or not Mortgagor shall have notice or knowledge of any of the
foregoing. 

     

    
      
        
        

      

      
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    Section
18.28. Publicity. All
promotional news releases, publicity or advertising by Manager, Mortgagor or
their respective Affiliates through any media intended to reach the general
public shall not refer to the Loan Documents or the financing evidenced by the
Loan Documents, or to Lender or to any of its Affiliates without the prior
written approval of Lender or such Affiliate, as applicable, in each instance,
such approval not to be unreasonably withheld or delayed. Lender shall be
authorized to provide information relating to the Property, the Loan and matters
relating thereto to rating agencies, underwriters, potential securities
investors, auditors, regulatory authorities and to any Persons which may be
entitled to such information by operation of law. 

     

    Section
18.29. Securitization
Opinions. In the
event the Loan is included as an asset of a Securitization by Lender or any of
its Affiliates, Mortgagor shall, within fifteen (15) Business Days after
Lender’s written request therefor, at Lender’s sole cost and expense, deliver
opinions in form and substance and delivered by counsel reasonably acceptable to
Lender and each Rating Agency, as may be reasonably required by Lender and/or
each Rating Agency in connection with such securitization. Mortgagor’s failure
to deliver the opinions required hereby within such ten (10) Business Day period
shall constitute an “Event of Default” hereunder.

     

    Section
18.30. Intentionally
Deleted. 

     

    Section
18.31. Securitization
Financials.
Mortgagor covenants and agrees that, upon Lender’s written request therefor in
connection with a Securitization, Mortgagor shall, at Lender’s sole cost and
expense, promptly deliver audited financial statements and related documentation
prepared by an Independent certified public accountant that satisfy securities
laws and requirements for use in a public registration statement (which may
include up to three (3) years of historical audited financial
statements).

     

    
      
        
        

      

      
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    Section
18.32. Exculpation.
Notwithstanding anything herein or in any other Loan Document to the contrary,
except as otherwise set forth in this Section 18.32 to the contrary, Lender
shall not enforce the liability and obligation of Mortgagor or (a) if Mortgagor
is a partnership, its constituent partners or any of their respective partners,
(b) if Mortgagor is a trust, its beneficiaries or any of their respective
Partners (as hereinafter defined), (c) if Mortgagor is a corporation, any of its
shareholders, directors, principals, officers or employees, or (d) if Mortgagor
is a limited liability company, any of its members, managers, officers or
directors (the Persons described in the foregoing clauses (a) - (d), as the case
may be, are hereinafter referred to as the “Partners”) to
perform and observe the obligations contained in this Security Instrument or any
of the other Loan Documents by any action or proceeding wherein a money judgment
shall be sought against Mortgagor or the Partners, except that Lender may bring
a foreclosure action, action for specific performance, or other appropriate
action or proceeding (including, without limitation, an action to obtain a
deficiency judgment) solely for the purpose of enabling Lender to realize upon
(i) Mortgagor’s interest in the Property, (ii) the Rent to the extent received
by Mortgagor (or received by its Partners) after the occurrence of an Event of
Default and not either delivered to Lender (or Lender’s agent) or applied to
ordinary and necessary expenses of owning and operating the Property (the
“Recourse
Distributions”) and
(iii) any other collateral given to Lender under the Loan Documents (the
collateral described in the foregoing clauses (i) - (iii) is hereinafter
referred to as the “Default
Collateral”);
provided,
however, that
any judgment in any such action or proceeding shall be enforceable against
Mortgagor or the Partners, as the case may be, only to the extent of any such
Default Collateral. The provisions of this Section shall not, however, (a)
impair the validity of the Debt evidenced by the Note or in any way affect or
impair the lien of this Security Instrument or any of the other Loan Documents
or the right of Lender to foreclose this Security Instrument following the
occurrence of an Event of Default; (b) impair the right of Lender to name
Mortgagor as a party defendant in any action or suit for judicial foreclosure
and sale under this Security Instrument; (c) affect the validity or
enforceability of the Note, this Security Instrument, or any of the other Loan
Documents, or impair the right of Lender to seek a personal judgment against the
Guarantor; (d) impair the right of Lender to obtain the appointment of a
receiver; (e) impair the enforcement of the Assignment; (f) impair the right of
Lender to bring suit for a monetary judgment against Mortgagor with respect to
any losses resulting from fraud, material misrepresentation, or failure to
disclose a material fact, any untrue statement of a material fact or omission to
state a material fact in the written materials and/or information provided to
Lender or any of its affiliates by or on behalf of Mortgagor, Guarantor or any
of their Affiliates in connection with this Security Instrument, the Note or the
other Loan Documents, and the foregoing provisions shall not modify, diminish or
discharge the liability of Mortgagor, Guarantor or any of their Affiliates with
respect to same; (g) impair the right of Lender to bring suit for a monetary
judgment against Mortgagor to obtain the Recourse Distributions received by
Mortgagor including, without limitation, the right to bring suit for a monetary
judgment to proceed against Guarantor to the extent of Guarantor’s liability
under any guaranty delivered by Guarantor and the foregoing provisions shall not
modify, diminish or discharge the liability of Mortgagor or Guarantor with
respect to same; (h) impair the right of Lender to bring suit for a monetary
judgment against Mortgagor with respect to any losses resulting from Mortgagor’s
misappropriation of tenant security deposits or Rent (other than rent deemed
“additional rent” under the Leases) collected more than one (1) month in
advance, and the foregoing provisions shall not modify, diminish or discharge
the liability of Mortgagor with respect to same; (i) impair the right of Lender
to obtain Loss Proceeds due to Lender pursuant to this Security Instrument to
the extent actually paid by the insurer; (j) impair the right of Lender to
enforce the provisions of Sections 2.02(g), 16.01 or 16.02, inclusive of this
Security Instrument, even after repayment in full by Mortgagor of the Debt or to
bring suit for a monetary judgment against Mortgagor with respect to any losses
resulting from any obligation set forth in said Sections; (k) prevent or in any
way hinder Lender from exercising, or constitute a defense, or counterclaim, or
other basis for relief in respect of the exercise of, any other remedy against
any or all of the collateral securing the Note as provided in the Loan
Documents; (l) impair the right of Lender to bring suit for a monetary judgment
against Mortgagor with respect to any losses resulting from any misappropriation
or conversion of Loss Proceeds, and the foregoing provisions shall not modify,
diminish or discharge the liability of Mortgagor with respect to same; (m)
impair the right of Lender to sue for, seek or demand a deficiency judgment
against Mortgagor solely for the purpose of foreclosing the Property or any part
thereof, or realizing upon the Default Collateral; provided,
however, that
any such deficiency judgment referred to in this clause (m) shall be enforceable
against Mortgagor and Guarantor only to the extent of any of the Default
Collateral; (n) impair the ability of Lender to bring suit for a monetary
judgment against Mortgagor with respect to any losses resulting from arson or
physical waste to or of the Property or damage to the Property in each case
resulting from the intentional acts or intentional omissions of Mortgagor,
Guarantor or any of their Affiliates; (o) impair the right of Lender to bring a
suit for a monetary judgment against Mortgagor in the event of the exercise of
any right or remedy under any federal, state or local forfeiture laws resulting
in the loss of the lien of this Security Instrument, or the priority thereof,
against the Property; (p) be deemed a waiver of any right which Lender may have
under Sections 506(a), 506(b), 1111(b) or any other provision 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; (q) impair the right of
Lender to bring suit for monetary judgment against Mortgagor with respect to any
losses resulting from any claims, actions or proceedings initiated by Mortgagor
(or any Affiliate of Mortgagor) alleging that the relationship of Mortgagor and
Lender is that of joint venturers, partners, tenants in common, joint tenants or
any relationship other than that of debtor and creditor; (r) impair the right of
Lender to bring suit for a monetary judgment with respect to any losses
resulting from a Transfer in violation of the provisions of Article IX hereof;
or (s) impair the right of Lender to bring suit against Mortgagor for
Mortgagor’s failure to pay any valid taxes, assessments, mechanic’s liens,
materialmen’s liens or other liens which could create liens on any portion of
the Property superior to the lien or security title of this Security Instrument
or the other Loan Documents, except, (1) with respect to any such taxes or
assessments, to the extent that funds have been deposited with Lender pursuant
to the terms of this Security Instrument specifically for the applicable taxes
or assessments and not applied by Lender to pay such taxes and assessments, and
(2) to the extent that there is insufficient available cash flow at any time to
enable Mortgagor to pay all operating expenses (including taxes and assessments)
then due and payable,
necessary property improvement expenditures and amounts due and payable under
the Loan Documents (as demonstrated to the reasonable satisfaction of Lender)
and Mortgagor applies all available cash flow to the payment of any one or more
of the foregoing items. The
provisions of this Section 18.32 shall be inapplicable to Mortgagor if (a) any
proceeding, action, petition or filing under the Bankruptcy Code, or any similar
state or federal law now or hereafter in effect relating to bankruptcy,
reorganization or insolvency, or the arrangement or adjustment of debts, shall
be filed by, consented to or acquiesced in by or with respect to Mortgagor, or
if Mortgagor shall institute any proceeding for its dissolution or liquidation,
or shall make an assignment for the benefit of creditors or (b) Mortgagor or any
Affiliate contests or interferes with Lender’s enforcement of its rights and
remedies hereunder or under the Loan Documents by asserting any defense (x) as
to the validity of the obligations under the Loan Documents or in any way
relating to the structure of the Mortgagor or the enforceability of Lender’s
rights and remedies under the Loan Documents, or (y) for the purpose of
delaying, hindering or impairing Lender’s rights and remedies under the Loan
Documents (collectively, a “Contest”)
(provided that if any such Person obtains a non-appealable order successfully
asserting a Contest, Mortgagor shall have no liability under this clause (b)),
in which event Lender shall have recourse against all of the assets of Mortgagor
including, without limitation, any right, title and interest of Mortgagor in and
to the Property.

     

    
      
        
        

      

      
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    Section
18.33. Intentionally
Deleted

     

    Section
18.34. Intentionally
Deleted

     

    Section
18.35. Release of Security
Instrument. If all
of the Debt is paid, then and in that event only, all rights under this Security
Instrument, except for those provisions hereof which by their terms survive,
shall terminate and the Property shall become wholly clear of the liens,
security interests, conveyances and assignments evidenced hereby, which shall be
promptly released of record by Lender at Grantor’s sole cost and
expense.

     

    Section
18.36. Cooperation. (a)
Mortgagor covenants and agrees that in the event the Loan is to be included as
an asset of a Securitization, Mortgagor shall (a) gather any information
reasonably required by the Rating Agencies in connection with such a
Securitization, (b) at Lender’s request, meet with representatives of the Rating
Agency to discuss the business and operations of the Property, and (c) cooperate
with the reasonable requests of each Rating Agency and Lender in connection with
all of the foregoing as well as in connection with all other matters and the
preparation of any offering documents with respect thereof, including, without
limitation, entering into any amendments or modifications to this Security
Instrument or to any other Loan Document which may be requested by Lender to
conform to Rating Agency or market standards for a Securitization provided that
no such modification shall modify (a) the interest rate payable under the Note,
(b) the stated maturity of the Note, (c) the amortization of principal under the
Note, (d) Section 18.32 hereof, (e) any other material economic term of the Loan
or (f) any provision, the effect of which would materially increase Mortgagor’s
obligations or materially decrease Mortgagor’s rights under the Loan Documents.
Mortgagor acknowledges that the information provided by Mortgagor to Lender may
be incorporated into the offering documents for a Securitization. Lender and
each Rating Agency shall be entitled to rely on the information supplied by, or
on behalf of, Mortgagor and Mortgagor indemnifies and holds harmless the
Indemnified Parties, their Affiliates and each Person who controls such Persons
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as same may be amended from time to time, for,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, known or
unknown, contingent or otherwise, whether incurred or imposed within or outside
the judicial process, including, without limitation, reasonable attorneys’ fees
and disbursements (including, without limitation, reasonable attorney’s fees and
expenses, whether incurred within or outside the judicial process) that arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such information or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated in such information or necessary in order to make the statements in such
information, or in light of the circumstances under which they were made, not
misleading.

     

    
      
        
        

      

      
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    (b) Further,
Mortgagor shall cooperate at no cost to Mortgagor, with Lender and its
affiliates in connection with any such sale of the Loan by mortgage backed pass
through certificates, participations, securities or pari passu notes evidencing
whole or component interests therein through one of more public or private
offerings, including, but not limited to:

     

    (i) separating
the Loan into two or more separate notes (or components that correspond to one
or more tranches of the certificates/securities created in a Securitization) or
participation interests. Such notes or components or participation interests may
be assigned different interest rates, so long as the weighted average of such
interest rates equals the interest rate on the Note. Additionally, Lender may
split the Loan into a senior/subordinated participation structure;

     

    (ii) obtaining
ratings from two or more Rating Agencies;

     

    (iii) making or
causing to be made reasonable changes or modifications to the loan
documentation, organizational documentation, opinion letters and other
documentation; 

     

    (iv) reviewing
prepared offering materials relating to the Property, Mortgagor, Guarantor and
the Loan;

     

    (v) delivering
updated information on the Mortgagor, Guarantor and the Property;

     

    (vi) participating
in investor or Rating Agency meetings if requested by Lender; 

     

    (vii) permitting
adjustment of Lender’s security interest to permit a senior/subordinate or other
structure to enhance a Securitization, participation interest or a distribution
of the Loan; 

     

    (viii) restructuring
of the Loan and/or a reduction of the Loan Amount with the imposition of a
mezzanine loan in the corresponding amount to be reduced, which mezzanine loan
shall be secured by a pledge of ownership interests in Mortgagor or the members
of Mortgagor. Such notes or components may be assigned different interest rates,
so long as the weighted average of such interest rates equals the interest rate
on the Note; and

     

    (ix) uncrossing
the Loan and each Cross-collateralized Mortgage to two (2) or more separate
loans.

     

    
      
        
        

      

      
        -103-

        
          

        

      

      
        
        

      

    

     

    Section
18.37. Regulation
A/B.
(a)
If requested by Lender, Mortgagor shall furnish, or shall cause the applicable
tenant to furnish, to Lender financial data and/or financial statements in
accordance with Regulation AB (as defined herein) for any tenant of any Property
if, in connection with a securitization, Lender expects there to be, with
respect to such tenant or group of affiliated tenants, a concentration within
all of the mortgage loans included or expected to be included, as applicable, in
such securitization such that such tenant or group of affiliated tenants would
constitute a Significant Obligor (as defined herein); provided, however, that in
the event the related lease does not require the related tenant to provide the
foregoing information, Mortgagor shall use commercially reasonable efforts to
cause the applicable tenant to furnish such information.

     

    (b)
If,
at the time one or more Disclosure Documents are being prepared for a
securitization, Lender expects that Mortgagor alone or Mortgagor and one or more
affiliates of Mortgagor collectively, or the Property alone or the Property and
any other parcel(s) of real property, together with improvements thereon and
personal property related thereto, that is “related”, within the meaning of the
definition of Significant Obligor, to the Property (a “Related Property”)
collectively, will be a Significant Obligor, Mortgagor shall furnish to Lender
upon request (i) the selected financial data or, if applicable, net operating
income, required under Item 1112(b)(1) of Regulation AB and meeting the
requirements thereof, if Lender expects that the principal amount of the Loan,
together with any loans made to an affiliate of Mortgagor or secured by a
Related Property that is included in a securitization with the Loan (a “Related
Loan”), as of the cut-off date for such securitization may, or if the principal
amount of the Loan together with any Related Loans as of the cut-off date for
such securitization and at any time during which the Loan and any Related Loans
are included in a securitization does, equal or exceed ten percent (10%) (but
less than twenty percent (20%)) of the aggregate principal amount of all
mortgage loans included or expected to be included, as applicable, in the
securitization or (ii) the financial statements required under Item 1112(b)(2)
of Regulation AB and meeting the requirements thereof, if Lender expects that
the principal amount of the Loan together with any Related Loans as of the
cut-off date for such securitization may, or if the principal amount of the Loan
together with any Related Loans as of the cut-off date for such securitization
and at any time during which the Loan and any Related Loans are included in a
securitization does, equal or exceed twenty percent (20%) of the aggregate
principal amount of all mortgage loans included or expected to be included, as
applicable, in the securitization. Such financial data or financial statements
shall be furnished to Lender (A) within ten (10) Business Days after notice from
Lender in connection with the preparation of Disclosure Documents for the
securitization, (B) not later than thirty (30) days after the end of each fiscal
quarter of Mortgagor and (C) not later than seventy-five (75) days after the end
of each fiscal year of Mortgagor; provided, however, that Mortgagor shall not be
obligated to furnish financial data or financial statements pursuant to clauses
(B) or (C) of this sentence with respect to any period for which a filing
pursuant to the Securities Exchange Act of 1934 in connection with or relating
to the securitization (an “Exchange Act Filing”) is not required. As used
herein, “Regulation AB” shall mean Regulation AB under the Securities Act of
1933 and the Securities Exchange Act of 1934 (as amended). As used herein,
“Disclosure Document” shall mean a prospectus, prospectus supplement, private
placement memorandum, or similar offering memorandum or offering circular, in
each case in preliminary or final form, used to offer securities in connection
with a securitization. As used herein, “Significant Obligor” shall have the
meaning set forth in Item 1101(k) of Regulation AB.

     

    
      
        
        

      

      
        -104-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
XIX: STATE SPECIFIC
PROVISIONS

     

    Section
19.01. Louisiana
Remedies. If any
Event of Default shall occur and be continuing, Lender may, in addition to and
not in lieu of any other rights and remedies hereunder or provided by law,
exercise any and all remedies provided in any of the other Loan Documents, or
exercise one or more of the following rights and remedies:

    


    (a) Acceleration;
Foreclosure. Lender
shall have the right, at its sole option, to accelerate the maturity and demand
payment in full of the secured indebtedness. Lender shall then have the right to
commence appropriate foreclosure proceedings against the Property as provided in
this Mortgage.

    


    (b) Seizure and Sale of
Property. In the
event that the Lender elects to commence appropriate Louisiana foreclosure
proceedings under this Mortgage, Lender may cause the Property, or any part or
parts thereof, to be immediately seized and sold, whether in term of court or in
vacation, under ordinary or executory process, in accordance with applicable
Louisiana law, to the highest bidder for cash, with or without appraisement, and
without the necessity of making additional demand upon or notifying Mortgagor or
placing Mortgagor in default, all of which are expressly waived.

    


    (c) Confession of Judgment.
For
purposes of foreclosure under Louisiana executory process procedures, Mortgagor
confesses judgment and acknowledges to be indebted unto and in favor of the
Lender, up to the full amount of the secured indebtedness, in principal,
interest, costs, expenses, and attorneys’ fees. To the extent permitted under
applicable Louisiana law, Mortgagor additionally waives: (a) the benefit of
appraisal as provided in Articles 2332, 2336, 2723 and 2724 of the Louisiana
Code of Civil Procedure, and all other laws with regard to appraisal upon
judicial sale; (b) the demand and three (3) days' delay as provided under
Article 2721 of the Louisiana Code of Civil Procedure; (c) the notice of seizure
as provided under Articles 2293 and 2721 of the Louisiana Code of Civil
Procedure; (d) the three (3) days' delay provided under Articles 2331 and 2722
of the Louisiana Code of Civil Procedure; and (e) all other benefits provided
under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil Procedure and
all other Articles not specifically mentioned above.

    


    (d) Keeper. Should
any or all of the Property be seized as an incident to an action for the
recognition or enforcement of this Mortgage, by executory process,
sequestration, attachment, writ of fieri facias or otherwise, Mortgagor hereby
agrees that the court issuing any such order shall, if requested by Lender,
appoint Lender, or any agent designated by Lender, or any person or entity named
by Lender at the time such seizure is requested, or any time thereafter, as
Keeper of the Property as provided under La. R.S. 9:5136 et seq. Such a
Keeper shall be entitled to reasonable compensation. Mortgagor agrees to pay the
reasonable fees of such Keeper, which are hereby fixed at the greater of market
rate or $50.00 per hour, which compensation to the Keeper shall also be secured
by this Mortgage.

    


    (e) Declaration of
Fact. Should
it become necessary for Lender to foreclose under this Mortgage, all
declarations of fact, which are made under an authentic act before a Notary
Public in the presence of two witnesses, by a person declaring such facts to lie
within his or her knowledge, shall constitute authentic evidence for purposes of
executory process and also for purposes of La. R.S. 9:3509.1, La. R.S.
9:3504(D)(6) and La. R.S. 10:9-629, where applicable.

     

    
      
        
        

      

      
        -105-

        
          

        

      

      
        
        

      

    

     

    (f) Specific
Performance. Lender
may, in addition to the foregoing remedies, or in lieu thereof, in Lender’s sole
discretion, pursuant to Louisiana Civil Code Article 1986, commence an
appropriate action against Mortgagor seeking specific performance of any
covenant contained herein, or in aid of the execution or enforcement of any
power herein granted.

    


    (g) Cumulative
Remedies. Lender’s
remedies as provided herein shall be cumulative in nature and nothing under this
Mortgage shall be construed as to limit or restrict the options and remedies
available to Lender following any Event of Default, or to in any way limit or
restrict the rights and ability of Lender to proceed directly against Mortgagor
and/or any guarantor or endorser of Mortgagor's secured indebtedness, or to
proceed against other collateral directly or indirectly securing any such
secured indebtedness.

    


    (h) Assignment of
Leases. Upon the
occurrence of an Event of Default hereunder, then the assignment of Rents and
Profits granted in this Mortgage shall automatically become absolute as provided
in La. R.S. 9:4401, and Lender, without in any way waiving such default, at its
option, upon notice and without regard to the adequacy of the security for the
secured indebtedness or to whether it has exercised any of its other rights or
remedies hereunder, shall have the right to directly collect and receive all
rents and any other proceeds and/or payments arising under or in any way
accruing under the leases assigned herein, as such amounts become due and
payable and to apply the same to the secured indebtedness as provided herein.
Nothing herein shall be construed to limit the exercise of any remedies
otherwise granted to Lender in this instrument. Mortgagor unconditionally agrees
to deliver to Lender, immediately following demand, any and all of Mortgagor’s
records, ledger sheets, and other documentation, in the form requested by
Lender, with regard to the Leases and the Rents and any and all proceeds and/or
payments applicable thereto. Lender shall have the further right, upon the
occurrence of an Event of Default, where appropriate and within Lender’s sole
discretion, to file suit, either in Mortgagor’s own name or in the name of
Lender, to collect any and all Rents and other proceeds and payments that may
then and/or in the future be due and owing under and/or as a result of the
Leases assigned herein. Where it is necessary for Lender to attempt to collect
any such Rents and other proceeds and/or payments from the obligors therefor,
Lender may compromise, settle, extend, or renew for any period (whether or not
longer than the original period) any obligation or indebtedness thereunder or
evidenced thereby, or surrender, release, or exchange all or any part of said
obligation or indebtedness, without affecting the liability of Lender under this
Mortgage or under the Debt. To that end, Mortgagor hereby irrevocably
constitutes and appoints Lender as its attorney-in-fact, coupled with an
interest and with full power of substitution, to take any and all such actions
and any and all other actions permitted hereby, either in the name of Mortgagor
or Lender. In order to permit the foregoing, Lender shall have the additional
irrevocable right, coupled with an interest, to: (a) remove any and all of
Mortgagor’s documents, instruments, files and records relating or pertaining to
the Leases and/or the Rents from any premises where the same shall then be
located; (b) at Mortgagor’s sole cost and expense, use such of Mortgagor’s
personnel, supplies and space at Mortgagor’s place or places of business as may
be necessary and proper within Lender’s sole discretion, to administer
collection of such proceeds and/or payments; (c) receive, open and dispose of
all mail addressed to Mortgagor pertaining to any of the Leases and/or the Rents
and proceeds and/or payments thereunder; (d) notify the postal authorities to
change the address the delivery of mail addressed to Mortgagor pertaining to any
of the Leases and/or Rents and proceeds and/or payments thereunder, to such
address as Lender may designate; (e) endorse Mortgagor’s name on any and all
notes, acceptances, checks, drafts, money orders, or other evidences of payment
of such proceeds and/or payments that may come into Lender’s possession, and to
deposit or otherwise collect the same; (f) prepare and mail invoices and/or
statements to such obligors and/or debtors; (g) send verifications of amounts
owed to such obligors; and (h) execute in Mortgagor’s name affidavits and/or
notices with regard to lien rights available to Mortgagor in connection with
such Leases and/or Rents. In the event that Mortgagor should, for any reason
whatsoever, receive any proceeds derived from the sale, lease, insurance loss,
damage and/or condemnation, of all or any part of said premises and/or the
Leases or Rents, or should Mortgagor receive any other payments under the Leases
or Rents as provided hereunder (with such proceeds and/or payments being
hereinafter individually, collectively and interchangeably referred to as
Mortgagor’s “Rent Funds”),
following notice to the obligors thereunder to make their respective payments
directly to Mortgagor, Mortgagor shall hold such Rent Funds in trust for and on
behalf of Lender, and Mortgagor hereby unconditionally agrees to remit or to
otherwise turn over such Rent Funds to Lender immediately following demand.
Should Mortgagor deposit any such Rent Funds into one or more of Mortgagor’s
deposit accounts, no matter where located, Lender shall have the additional
right to attach any and all of Mortgagor’s deposit accounts in which Lender may
prove such Rent Funds were deposited, whether or not such Rent Funds are or were
commingled with other moneys of Mortgagor, and whether or not such Rent Funds
then remain on deposit in such an account or accounts. Anything to the contrary
in this Mortgage notwithstanding, Lender will not be deemed or construed to have
taken possession of said premises or to be managing it by reason of its exercise
of any of its rights or remedies under this Paragraph.

     

    
      
        
        

      

      
        -106-

        
          

        

      

      
        
        

      

    

     

    The term
“lien” will also mean a privilege, mortgage, security interest, assignment, or
other encumbrance. The term “real property” will mean “immovable property” as
that term is used in the Louisiana Civil Code. The term “personal property” will
mean “movable property” as that term is used in the Louisiana Civil Code. The
term “easement” will mean “servitude” as that term is used in the Louisiana
Civil Code. The term “building” will also include “other constructions” as that
term is used in the Louisiana Civil Code. The term “tangible” will mean
“corporeal” as that term is used in the Louisiana Civil Code. The term
“intangible” will mean “incorporeal” as that term is used in the Louisiana Civil
Code. The term “Uniform Commercial Code” will mean Louisiana Commercial Laws,
La. R.S. 10:1-101 et seq. The
term “fee estate” will mean “full ownership interest” as that term is used in
the Louisiana Civil Code. The term “condemnation” will include “expropriation”
as that term is used in Louisiana law. The term “receiver” will include “keeper”
as that term is used in Louisiana law. The term “conveyance in lieu of
foreclosure” or “action in lieu thereof” will mean “giving in payment” as that
term is used in the Louisiana Civil Code and “dation en paiment”. The term
“joint and several” will mean “solidary” as that term is used in the Louisiana
Civil Code. The term “county” will mean “parish” as that term is used in
Louisiana.

     

    
      
        
        

      

      
        -107-

        
          

        

      

      
        
        

      

    

     

    (i) Automatic Transfer of
Rights. In the
event of foreclosure under this Mortgage, or other transfer of title or
assignment of the Property, or any part or parts thereof, in lieu of payment of
the Debt, whether in whole or in part, all policies of insurance and other
incorporeal rights applicable to the foreclosed upon or transferred Property
(collectively, the “Rights”) shall automatically inure to the benefit of and
shall pass to the purchaser(s) or transferee)s) thereof, subject to the rights
of the purchaser(s) or transferee(s) to reject such insurance coverage and/or
Rights at its or their sole option and election.

     

    (j) Public or Private Sale of
Collateral. To the
extent that any of the Property is then in Lender’s possession, Lender shall
have full power to sell, lease, transfer, or otherwise deal with the Property or
proceeds thereof in its own name or that of Mortgagor. Lender may sell the
Property at public auction or private sale. Unless the Property threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Lender will give Mortgagor reasonable notice of the time after which any
private sale or any other intended disposition of the Property is to be made.
All expenses relating to the disposition of the Property, including without
limitation the expenses of retaking, holding, insuring, preparing for sale and
selling the Property, shall become a part of the Debt secured hereby and shall
be payable on demand, with interest at the Default Interest Rate from date of
expenditure until repaid. Mortgagor agrees that any such sale shall be
conclusively deemed to be conducted in a commercially reasonable manner if it is
made consistent with the standard of similar sales of collateral by commercial
banks in Louisiana.

     

    (k) Collect Revenues, Apply
Accounts. Lender
shall have the right, at its sole option and election, to directly collect and
receive all proceeds and/or payments arising under or in any way accruing from
the Property, as such amounts become due and payable. In order to permit the
foregoing, Mortgagor unconditionally agrees to deliver to Lender, immediately
following demand, any and all of Mortgagor’s records, ledger sheets, and other
documentation, in the form requested by Lender, with regard to the Property and
any and all proceeds and/or payments applicable thereto. Lender shall have the
further right within Lender’s sole discretion, to file suit, either in Lender’s
own name or in the name of Mortgagor, to collect any and all proceeds and
payments that may then and/or in the future be due and owing under this
Mortgage, and if as a result of such it is necessary for Lender to attempt to
collect any such proceeds and/or payments from the obligors therefor, Lender may
compromise, settle, extend, or renew for any period (whether or not longer than
the original period) any obligation or indebtedness thereunder or evidenced
thereby, or surrender, release, or exchange all or any part of said obligation
or indebtedness, without affecting the liability of Mortgagor under this
Mortgage or under the Obligations. To that end, Mortgagor hereby irrevocably
constitutes and appoints Lender as its attorney-in-fact, coupled with an
interest and with full power of substitution, to take any and all such actions
and any and all other actions permitted hereby, either in the name of Mortgagor
or Lender.

     

    (l) Additional
Expenses. In the
event that it should become necessary for Lender to conduct a search for any of
the Property in connection with any foreclosure action, or should it be
necessary to remove the Property, or any part or parts thereof, from the
premises in which or on which the Property is then located, and/or to store
and/or refurbish such Property, Mortgagor agrees to reimburse Lender for the
cost of conducting such a search and/or removing and/or storing and/or
refurbishing such Property, which additional expense shall also be secured by
the lien of this Mortgage and the assignments and security interests created
herein.

     

    
      
        
        

      

      
        -108-

        
          

        

      

      
        
        

      

    

     

    Section
19.02. Waiver and
Release. The
parties to this Security Instrument hereby waive the production of mortgage,
conveyance, tax, paving and other certificates and relive and release the Notary
Public before whom this Security Instrument was passed from all responsibilities
and liabilities in connection therewith.

     

    Section
19.03. No Paraph.
Mortgagor declares that none of the secured indebtedness secured by this
Mortgage has been “paraphed” for identification with this Mortgage.

     

    Section
19.04. The
parties to this Security Instrument hereby waive the production of mortgage,
conveyance, tax, paying, assignment of accounts receivable and other
certificates and relieve and release the Notary before whom this Mortgage was
passed from all responsibilities and liabilities in connection
therewith

     

    Section
19.05. This
Security Instrument secures any and all present and future loans, advances,
and/or other extensions of credit or other indebtedness now owing or which
hereafter be owing by Mortgagor to Lender, as well as Lender’s successors and
assigns, from time to time, one or more times, now and in the future, and any
and all promissory notes evidencing such present and/or future loans, advances
and/or other extensions of credit, as well as any and all other obligations,
including, without limitation, Mortgagor’s covenants and agreements in any
present or future loan or credit agreement or any other agreement, document or
instrument executed by Mortgagor, and liabilities that Mortgagor may now and/or
in the future owe to and/or incur in favor of Lender, as well as Lender’s
successors and assigns, whether direct or indirect, or by way of assignment or
purchase of a participation interest, and whether related or unrelated, or
whether committed or purely discretionary, however and whenever incurred or
evidenced, whether express or implied, direct or indirect, absolute or
contingent, or due or to become due, and all renewals, modifications,
consolidations, replacements and extensions thereof, whether Mortgagor is
obligated alone or with others on a “solidary” or “joint and several” basis, as
a principal obligor or as a surety, guarantor, or endorser, of every nature and
kind whatsoever, whether or not any such indebtedness may be barred under any
statute of limitations or prescriptive period or may be or become otherwise
unenforceable or voidable for any reason whatsoever, up to the Maximum Amount.
Notwithstanding any other provision of this Mortgage, the maximum amount of
indebtedness secured hereby at any time and from time to time shall be limited
to the Maximum Amount.

     

    Section
19.06. This
Security Instrument has been executed by Mortgagor pursuant to Article 3298 of
the Louisiana Civil Code and other applicable law for the purpose of securing
the secured indebtedness that may now be existing and/or that may arise in the
future as provided herein, with the preferences and priorities provided under
applicable Louisiana law. However, nothing under this Security Instrument shall
be construed as limiting the duration of this Mortgage or the purpose or
purposes for which the secured indebtedness may be requested or
extended.

     

    Section
19.07. Forfeiture. There
has not been and shall never be committed by Mortgagor 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 Mortgagor’s obligations under any of the Loan
Document.

     

    
      
        
        

      

      
        -109-

        
          

        

      

      
        
        

      

    

     

    Section
19.08. Rents and
Leases. In
order to secure the secured indebtedness up to the Maximum Amount and to the
extent permitted by La. R.S. 9:4401 et seq., as additional and collateral
security for the payment of the Debt and cumulative of any and all rights and
remedies herein provided for, Mortgagor hereby collaterally and conditionally
assigns to Lender all existing and future Rents and Leases, such assignment to
become absolute upon the occurrence of an Event of Default.

     

    Section
19.09. As used
in this Security Instrument, the definition of "Environmental Statutes" includes
the Louisiana Environmental Quality Act (Louisiana Revised Statutes § 30:2001,
et seq.), as amended and any other laws of the State of Louisiana governing the
handling of hazardous materials, and the regulations promulgated thereunder as
used in this Security Instrument the term "Environmental Statute"
included.

     

    Section
19.10. Foreclosure. At any
time after an Event of Default, Lender has immediately commence an action to
foreclose this Mortgage or to specifically enforce its provisions or any of the
indebtedness secured hereby pursuant to the statutes in such case made and
provided and sell the Property or cause the Property to be sold in accordance
with the requirements and procedures provided by said statutes in a single
parcel or in several parcels at the option of Lender.

     

    
      	(1)  	
              In
      the event foreclosure proceedings are filed by Lender, all expenses
      incident to such proceeding, including, but not limited to, reasonable
      attorneys' fees and costs, shall be paid by Mortgagor and secured by this
      Mortgage and by all of the other Loan Documents securing all or any part
      of the indebtedness evidenced by the Note. The secured indebtedness and
      all other obligations secured by this Mortgage, including, without
      limitation, interest at the Default Interest Rate (as defined in the
      Note), any prepayment charge, fee or premium required to be paid under the
      Note in order to prepay principal (to the extent permitted by applicable
      law), attorneys' fees and any other amounts due and unpaid to Lender under
      the Loan Documents, may be bid by Lender in the event of a foreclosure
      sale hereunder. In the event of a judicial sale pursuant to a foreclosure
      decree, it is understood and agreed that Lender or its assigns may become
      the purchaser of the Property or any part
  thereof.

            


    

     

    
      	(2)  	
              Lender
      may, by following the procedures and satisfying the requirements
      prescribed by applicable law, foreclose on only a portion of the Property
      and, in such event, said foreclosure shall not affect the lien of this
      Mortgage on the remaining portion of the Property
    foreclosed.

            


    

     

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OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
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    THUS DONE AND
SIGNED in
________________, ________________on this 31st day of
January, 2007, in the presence of the undersigned witnesses and Notary Public
after due reading of the whole.

     

    


    LVP GULF
COAST INDUSTRIAL PORTFOLIO
LLC, a Delaware limited liability company

     

     

    
      	By:	/s/ Michael
      Schurer	 	 	 
	 	
              
                
      

              Name: Michael Schurer

              Title: Vice President

            	 	 	
            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-1

    


    (Legal
Description)

    PARCEL 1

    


    100 JAMES DRIVE
EAST.

    


    THAT
CERTAIN PORTION OF GROUND, situated in the State of Louisiana, Parish of St.
Charles, in that part thereof know as James Business Park, and shown on a plan
of resubdivision of J.J. Krebs & Sons, Inc., dated April 14, 1983, approved
by the St. Charles Parish Planning Commission on June 1, 1983, and registered in
COB 298, folio 297 on June 2, 1983, and identified as Lot 15-A, Square 4, and
said lot is more particularly described as follows:

    


    Commence
at the intersection of the northerly right of way of James Drive East and the
easterly right of way of James Drive West a near point of curvature on James
Drive East, thence along the northerly right of way line of James Drive East
North 72 degrees 46 minutes 00 seconds East a distance of 175.38 feet to the
point of beginning;

    


    Thence
North 00 degrees 11 minutes 00 seconds West a distance of 564.18 feet to a point
on the line common to Lots 15-A and 15-B;

    


    Thence
along said common line North 89 degrees 49 minutes 00 seconds East a distance of
466.87 feet tot a point;

    


    Thence
South 00 degrees 11 minutes 00 seconds East a distance of 421.00 feet to a point
on the northerly right of way of James Drive East; 

    


    Thence
South 72 degrees 46 minutes 00 seconds West along said right of way line a
distance of 488.33 feet to the point of beginning.

    


    Lot 15-A
is a portion of former Lot 15, James Business Park.

    


    The
improvements thereon bear the municipal no. 100 James Drive East.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-2

    PARCEL 2

    


    120 MALLARD
STREET

    


    THAT
CERTAIN PORTION OF GROUND, situated in the State of Louisiana, Parish of St.
Charles, in that part thereof known as James Business Park, and shown on a plan
of resubdivision of J.J. Krebs & Sons, Inc., dated April 14, 1983, approved
by the St. Charles Parish Planning Commission on June 1, 1983, and registered in
COB 298, folio 297 on June 2, 1983, and identified as Lot 15-B, Square 4, and
said lot is more particularly described as follows:

    


    Lot 15-B
begins 133.13 feet from the near point of curvature of the intersection of the
easterly right of way of James Drive West and the southerly right of way of
Mallard Street and measures thence along the southerly right of way of Mallard
Street North 89 degrees 49 minutes 00 seconds East a distance of 440 feet to a
point;

    


    Thence
South 00 degrees 11 minutes 00 seconds East, a distance of 200 feet to a
point;

    


    Thence
North 89 degrees 49 minutes 00 seconds East, a distance of 26.87 feet to a
point;

    


    Thence
South 00 degrees 11 minutes 00 seconds East, a distance of 129.00 feet to the
line common to Lots 15-A and 15-B;

    


    Thence
South 89 degrees 49 minutes 00 seconds West along said common line a distance of
466.87 feet to a point;

    


    Thence
North 00 degrees 11 minutes 00 seconds West a distance of 329.00 feet to the
point of beginning.

    


    Said Lot
15-B is composed of a portion of former Lot 15 and all of Lots 6, 7, 8 and 9,
Square 4, James Business Park.

    


    The
improvements thereon bear the municipal no. 120 Mallard Street.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-3

    


    PARCEL 3

    


    150 CANVASBACK
DRIVE

    


    THAT
CERTAIN PORTION OF GROUND, situated in the Parish of St. Charles, State
Louisiana, in that part thereof known as James Business Park Extension No. 2 in
Square No. 11 thereof, bounded by James Drive East, Pintail Street, James West
and Canvasback Drive, designated as Lot 10-A, according to a resubdivision plan
made by J.J. Krebs & Sons, Inc., dated December 9, 1986, approved by St.
Charles Parish Planning Director April 10, 1987, recorded at Entry No. 127655,
COB 371, folio 8 on April 23, 1987, and which lot is described as
follows:

    


    Begin at
the intersection of the westerly right of way of James Drive East and the
southerly right of way of Canvasback Drive, the point of curvature on James
Drive East;

    


    Thence
South 00 degrees 11 minutes 00 seconds East, a distance of 329.53 feet to a
point;

    


    Thence
South 89 degrees 49 minutes 00 seconds West, a distance of 325.00 feet to a
point;

    


    Thence
North 00 degrees 11 minutes 00 seconds West a distance of 354.53 feet to a point
on the southerly right of way of Canvasback Drive;

    


    Thence
along said right of way North 89 degrees 49 minutes 00 seconds East a distance
of 300.00 feet to a point of curve;

    


    Thence
along a curve to the right having a radius of 25.00 feet, a distance of 39.27
feet to the Point of Beginning.

    


    Improvements
thereon bear Municipal Number 150
Canvasback Drive.

    


    Together
with those certain servitudes established as follows:

    


    
      	1.  	
              COB
      366, folio 626 - Servitude by Destination of Owner as established by St.
      Charles Three, Limited Partnership, by act before Frank J. Stitch, Jr.,
      N.P. , dated January 13, 1987, filed January 14, 1987, under Entry No.
      125464, as shown on the Lot 10-A
Survey.

            


    

    


    (the
“Insured Servitudes”)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-4

    


    PARCEL 4

    


    107 MALLARD
STREET

    


    THAT
CERTAIN PORTION OF GROUND, situated in the State of Louisiana, Parish of St.
Charles, in that part thereof known as James Business Park, in accordance with a
plan of resubdivision prepared by J. J. Krebs & Sons, Inc., dated June 13,
1978, last revised August 14, 1979, approved under St. Charles Parish Policy
Jury Ordinance No. 66-3-544 and registered in COB 234, folio 490 on October 2,
1979, and identified as Lots 1, 2, and 3, Square 5, and said lots are more
particularly described as follows:

    


    Begin at
a near point of curvature at the northeast intersection of Mallard Street and
James Drive West; thence along the east right of way of James Drive West North
00 degrees 11 minutes 00 seconds West a distance of 175.00 feet to a
point;

    


    Thence
North 89 degrees 49 minutes 00 seconds East a distance of 325.00 feet to a point
on the line common to Lots 3 and 4;

    


    Thence
South 00 degrees 11 minutes 00 seconds East a distance of 200.00 feet to the
northerly right of way of Mallard Street;

    


    Thence
along said right of way South 89 degrees 49 minutes 00 seconds West a distance
of 300 feet to a point on a curve to the right at the northeast intersection of
Mallard Street and James Drive West;

    


    Thence
along said curve, having a radius of 25.00 feet a distance of 39.27 feet to the
point of beginning.

    


    The
improvements thereon bear the municipal no. 107 Mallard Street.

    


    Together
with those servitudes benefiting the land and established as
follows:

    


    
      	1.  	
              COB
      305, folio 4 - Destination of the Owner with Respect to Driveway, dated
      October 20, 

            


    

    
      	2.  	
              1983
      and establishing non-exclusive driveway servitudes across Lots 1 through
      18, Square 5, filed October 20,
1983.

            


    

    
      	3.  	
              COB
      305, folio 8 - Destination of the Owner with Respect to Non-Exclusive
      Parking Areas dated October 20, 1983, and establishing non-exclusive
      parking areas across Lots 1 through 18, Square 5, filed October 20,
      1983.

            


    

    
      	4.  	
              COB
      507, folio 148 - Supplement to Act of Destination by T.L. James &
      Company, Inc., dated April 9, 1996.

            


    

    (the
“Insured Servitudes”)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-5

    


    PARCEL 5

    


    143 MALLARD
STREET

    


    THAT
CERTAIN PORTION OF GROUND, situated in the State of Louisiana, Parish of St.
Charles, in that part thereof known as James Business Park, in accordance with a
plan of resubdivision prepared by J. J. Krebs & Sons, Inc., dated June 13,
1978, last revised August 14, 1979, approved under St. Charles Parish Police
Jury Ordinance No. 66-3-544 and registered in COB 234, folio 490 on October 2,
1979, and identified as Lots 7, 8 and 9, Square 5, and said lots are more
particularly described as follows:

    


    Begin at
the northwest intersection of James Drive East and Mallard Street, a near point
of curvature on Mallard Street;

    


    Thence
along the northerly right of way of Mallard Street South 89 degrees 49 minutes
00 West a distance of 300.00 feet to a point on the line common to Lots 6 and
7;

    Thence
along said line North 00 degrees 11 minutes 00 seconds West a distance of 200.00
feet to a point;

    


    Thence
North 89 degrees 49 minutes 00 seconds East a distance of 325.00 feet to a point
on the westerly right of way of James Drive East; 

    


    Thence
along said right of way South 00 degrees 11 minutes 00 seconds East a distance
of 175.00 feet to a point of curve;

    


    Thence
along the arc of a curve to the right having a radius of 25.00 feet a distance
of 39.27 feet to the point of beginning.

    


    The
improvements thereon bear municipal no. 143 Mallard Street.

    


    Together
with those servitudes benefiting the land and established as
follows:

    
      	1.  	
              COB
      305, folio 4 - Destination of the Owner with Respect to Driveway, dated
      October 20, 1983, and establishing non-exclusive driveway servitudes
      across Lots 1 through 18, Square 5, filed October 20,
  1983.

            


    

    
      	2.  	
              COB
      305, folio 8 - Destination of the Owner with Respect to Non-Exclusive
      Parking Areas dated October 20, 1983, and establishing non-exclusive
      parking areas across Lots 1 through 18, Square 5, filed October 20,
      1983.

            


    

    
      	3.  	
              COB
      507, folio 148 - Supplement to Act of Destination by T.L. James &
      Company, Inc., dated April 9, 1996.

            


    

    (the
“Insured Servitudes”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-6

    


    PARCEL 6

    


    150 TEAL STREET

    


    A CERTAIN
PIECE OR PORTION OF GROUND, situated in Section 39, Township 12 South, Range 9
East, St. Charles Parish, La., that part thereof known as James Business Park,
designated as Lot 10-A, Square 5, on a plan of Resubdivision by Krebs, LaSalle,
LeMieuz Consultants, Inc. entitled Resubdivision of Lots 10, 11, 12, 13, 14, 15
& 16, Square 5 into Lot 10-A, James Business Park in Section 39, Township 12
South, Range 9 East, dated October 29, 1998, approved by Director, St. Charles
Parish Planning and Zoning on November 2, 1998, filed November 10, 1998,
registered at COB 546, folio 226, Parish of St. Charles, State of Louisiana, and
Lot 10-A is more particularly described as follows:

    


    Commence
at the point of curvature on the southerly right of way line of Teal Street at
the intersection of James Drive West;

    


    Thence
along the southerly right of way line of Teal Street, North 89 degrees 49
minutes 00 seconds East a distance of 200.00 feet to the Point of
beginning;

    


    Thence
continue along the southerly right of way line of Teal Street, North 89 degrees
49 minutes 00 seconds East, a distance of 700.00 feet to a point of
curvature;

    


    Thence
along a curve to the right, having a radius of 25.00 feet, an arc length of
39.27 feet, a chord bearing of South 45 degrees 11 minutes 00 seconds East, a
chord distance of 35.36 feet to a point on the westerly right of way line of
James Drive East;

    


    Thence
along the westerly right of way line of James Drive East, South 00 degrees 11
minutes 00 seconds East, a distance of 175.00 feet to a point;

    


    Thence
South 89 degrees 49 minutes 00 seconds West, a distance of 725.00 to a
point;

    


    Thence
North 00 degrees 11 minutes 00 seconds West a distance of 200.00 feet to a point
of beginning.

    


    Improvements
bear municipal number 150 Teal Street.

    


    Together
with those servitudes benefiting the land and established as
follows:

    


    
      	1.  	
              COB
      305, folio 4 - Destination of the Owner with Respect to Driveway, dated
      October 20, 1983, and establishing non-exclusive driveway servitudes
      across Lots 1 through 18, Square 5, filed October 20,
  1983.

            


    

    
      	2.  	
              COB
      305, folio 8 - Destination of the Owner with Respect to Non-Exclusive
      Parking Areas, dated October 20, 1983, and establishing non-exclusive
      parking areas across Lots 1 through 18, Square 5, filed October 20,
      1983.

            


    

    
      	3.  	
              COB
      507, folio 148 - Supplement to Act of Destination by T.L. James &
      Company, Inc., dated April 9, 1996.

            


    

    


    (the
“Insured Servitudes”)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-7

    


    PARCEL 7

    


    520 AND 524 ELMWOOD PARK
BOULEVARD

    


    A CERTAIN
PIECE OR PORTION OF GROUND, situated in the Parish of Jefferson, State of
Louisiana, in that portion thereof known as Elmwood Industrial Park, designated
as Parcel 16-C-2, per plan of Michael W. Flores, C.E. and L.S., dated April 3,
1985 last revised November 21, 1985, approved by Jefferson Parish Council
Ordinance No. 16704 on December 18, 1985 filed in COB 1396, folio 307. Parcel
16-C-2 is described as follows:

    


    Commence
at the intersection of the west right of way line of Jefferson Highway and the
south right of way line of Elmwood Park Boulevard, thence North 47 degrees 25
minutes 41 seconds West along the south right of way line of Elmwood Park
Boulevard, a distance of 405.37 feet to the Point of Beginning; thence South 42
degrees 33 minutes 47 seconds West a distance of 521.05 feet to a point; thence
North 47 degrees 26 minutes 11 seconds West, a distance of 445.00 feet to the
point; thence North 42 degrees 33 minutes 47 seconds East a distance of 521.12
feet to a point on the south right of way line of Elmwood Park Boulevard; thence
along said right of way line South 47 degrees 25 minutes 41 seconds East a
distance of 445.00 feet to the Point of Beginning.

    


    Address:
520 and 524 Elmwood Park Boulevard.

    


    Together
with those certain servitudes benefiting the land and established as
follows:

    


    
      	1.  	
              COB
      1916, folio 275 - Servitude of Destination of the Owner as established by
      Crow-Coleman, New Orleans, #1, a Louisiana General Partnership by act
      dated March 21, 1988, registered as Entry No. 88-12359. This is a
      non-exclusive servitude of common drive and passage, affecting a portion
      of Parcels 16-C-2 and 16-C-3.

            


    

    


    
      	2.  	
              COB
      1913, folio 221 - Servitude of Destination of the Owner established by
      Crow-Coleman New Orleans #1, a Louisiana General Partnership, by act last
      dated March 16, 1988, filed as Entry No. 88-11515. This is a non-exclusive
      servitude of common drive affecting a portion of Parcels 16-C-1 and
      16-C-2. (Collectively the “Insured
Servitudes”)

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-8

    


    PARCEL 8

    


    11301 INDUSTRIPLEX
BOULEVARD

    


    A CERTAIN
PIECE OR PORTION OF GROUND, situated in that subdivision of East Baton Rouge
Parish, Louisiana, known as Baton Rouge Industriplex Subdivision, Fourth Filing,
and designated as Lot No. 99-A, and according to Map Showing Resubdivision of
Lots 98-101, Baton Rouge Industriplex Subdivision, Fourth Filing, creating Lots
99-A and 101-A, by James R. Clary, Sr., P.L.S., dated March 3, 1988, approved by
East Baton Rouge Planning Commissions on March 9, 1988, recorded as Original 85,
Bundle 9987, Lot 99-A is more particularly described as follows:

    


    Begin at
the intersection of the northerly right of way of Industriplex Boulevard and the
easterly right of way of Fieldstone Drive;

    


    Thence
North 13 degrees 14 minutes 11 seconds East along the east right of way of
Fieldstone Drive, a distance of 291.70 feet to a point;

    


    Thence
South 81 degrees 13 minutes 20 seconds East a distance of 377.15 feet to a
point;

    


    Thence
South 13 degrees 14 minutes 11 seconds West a distance of 321.02 feet to a point
on the north right of way of Industriplex Boulevard;

    


    Thence
North 76 degrees 45 minutes 49 seconds West along the north right of way of
Industriplex Boulevard a distance of 376.01 feet to the Point of
Beginning.

    


    Improvements
thereon bear Municipal No. 11301 Industriplex Boulevard.

    


    Together
with those certain servitudes established as follows:

    


    
      	1.  	
              Original
      586, Bundle 9988 - Servitude of Destination of the Owner as established by
      Baton Rouge Trade Center Partnership by act dated March 21, 1988, filed
      March 22, 1988. This is a non-exclusive servitude of common drive and
      passage, affecting a portion of Lots 99-A and
  101-A.

            


    

    


    (the
“Insured Servitude”)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-9

    


    PARCEL 9

    


    11441 INDUSTRIPLEX
BOULEVARD

    


    A CERTAIN
PIECE OR PORTION OF GROUND, situated in the that subdivision of East Baton Rouge
Parish known as Baton Rouge Industriplex Subdivision, Fourth Filing and Baton
Rouge Industriplex Subdivision, Fifth Filing and designated as Lot 104-A-1, and
according to Map Showing Resubdivision of Lots 103, 104-A and 105 Baton Rouge
Industriplex Subdivision Fourth Filing and Lots 106-A and 107-A, Baton Rouge
Industriplex Subdivision, Fifth Filing, creating Lots 103-A, 104-A-1 and
107-A-1, by James R. Clary, Sr., P.L.S., dated March 7, 1988, approved by East
Baton Rouge Planning Commission March 9, 1988, recorded as Original 86, Bundle
9987, said Lot 104-A-1 is more described as follows:

    


    Begin at
the northeast intersection of Industriplex Boulevard and Sunbelt
Court:

    


    Thence
along the northeasterly right of way of Industriplex Boulevard along a curve
having a radius of 290.20 feet, a distance of 286.42 feet to point;

    


    Thence
continue along said right of way line North 76 degrees 45 minutes 49 seconds
West a distance of 10.49 feet to a point;

    


    Thence
North 13 degrees 14 minutes 11 seconds East a distance of 343.42 feet to a
point;

    


    Thence
South 81 degrees 13 minutes 20 seconds East a distance of 239.57 feet to a
point;

    


    Thence
South 09 degrees 04 minutes 39 seconds West a distance of 275.02 feet to a
point;

    


    Thence
South 19 degrees 56 minutes 22 seconds East a distance of 8.89 feet to a
point;

    


    Thence
South 50 degrees 55 minutes 59 seconds East a distance of 165.01 feet to a
point;

    


    Thence
South 34 degrees 24 minutes 55 seconds East a distance of 28.62 feet to a point
on the north right of way line of Sunbelt Court;

    


    Thence
South 69 degrees 47 minutes 07 seconds West the north right of way line of
Sunbelt Court a distance of 216.58 feet to the Point of Beginning.

    


    Improvements
thereon bear Municipal No. 11441 Industriplex Boulevard.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
A-10

    


    PARCEL
10

    


    6565 EXCHEQUER
DRIVE

    


    TWO (2)
CERTAIN PIECES OR PORTIONS OF GROUND, situated in the subdivision of East Baton
Rouge Parish, Louisiana known as Baton Rouge Industriplex Subdivision, First and
Second Filing, designated as Lot Nos. 33-A and 34-A and according to a map
prepared by Dawson Engineers Incorporated, Consulting Civil Engineers, dated
August 2, 1982, entitled “Map Showing Survey of a Resubdivision of Lot 18 of the
Baton Rouge Industriplex Subdivision (First filing) into Lot 18A and Lot 33 of
the Baton Rouge Industriplex Subdivision (Second filing) into Lot 33-A and Lot
34 of the Baton Rouge Industriplex Subdivision (Second Filing) into Lot 34-A,
located in Section 6, T8S, R2E, Greensburg Land District, Parish of East Baton
Rouge, Louisiana”, approved by East Baton Rouge Planning Commission August 11,
1982, recorded on Original 557, Bundle 9514, said Lots 33-A and 34-A are more
particularly described as follows:

    


    Commence
at the north right of way line of Industriplex Boulevard and last right of way
line of Exchequer Drive;

    


    Thence
North 18 degrees 17 minutes 07 seconds East along the east right of way of
Exchequer Drive a distance of 300.00 feet to the Point of
Beginning;

    


    Thence
continuing along the east right of way of Exchequer Drive North 18 degrees 17
minutes 07 seconds East a distance of 291.13 feet to a point;

    Thence
North 89 degrees 41 minutes 35 seconds East a distance of 456.21 feet to a
point;

    


    Thence
South 36 degrees 53 minutes 09 seconds East a distance of 327.29 feet to a
point;

    


    Thence
South 01 degrees 22 minutes 42 seconds West a distance of 260.94 feet to a
point;

    


    Thence
North 71 degrees 42 minutes 53 seconds West a distance of 776.95 feet to the
Point of Beginning.

    


    Improvements
thereon bear Municipal No. 6565 Exchequer Drive.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
B

     

    SUMMARY OF
RESERVES

     

    
      	
              Reserve
      Items

            	
              Initial
      Deposit Amount

            	
              Monthly
      Installment Amount

            
	
              Basic
      Carrying Costs

              ·  Taxes

              ·  Insurance
      Premiums

            	
              ·  Taxes
      

                  
      $139,237,51

              ·  Insurance
      Premium

                  
      $139,422.18

            	
               

              ·  Taxes

                  
      $59,132.84

               

              ·  Insurance
      Premiums

                  
      12,582.09

            
	
              Initial
      Engineering/Environmental Deposits

              ·  Immediate
      Repairs

              ·  Environmental
      Remediation

            	
               

               

              ·  Immediate
      Repairs

                  
      $843,241.25

               

              ·  Environmental
      Remediation

            	
              N/A

            
	
              Recurring
      Monthly Replacement Reserve Deposit

            	
              N/A

            	
              $12,584.40
      Capped at $528,544.80

            
	
              Reletting
      Reserve

            	
              N/A

            	
              $29,363.61
      Capped at 1,233,271.20

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
C

     

    CASH FLOW
STATEMENT

     

     

    
      	 	 	Property:____________________________
	 	 	Location:____________________________
	Cash Flow Statement for Month of:____________
      	 	Year: 


    

     

    
      	
            	
              Current

              Month

            	
              Year
      to

              Date

            
	
               

              REVENUE

              Net
      Rental Revenue

              Other
      Revenue

              Effective
      Gross Income

               

            	
               

               

               

              ________

               

            	
               

               

               

              ________

               

            
	
               

              OPERATING
      EXPENSES

              Common
      Area Maintenance

              Payroll

              Administration

              Leasing
      

              Service

              Clean
      & Decorate

              Utilities

              Repairs
      & Maintenance

              Taxes
      

              Insurance

              Management
      Fees

              Other

              Total
      Operating Expenses

              Net
      Operating Income

            	
               

               

               

               

               

               

               

               

               

               

               

              ________

              ________

            	
               

               

               

               

               

               

               

               

               

               

               

              ________

              ________

               

            
	
               

              RECURRING
      EXPENSES

              To
      Include Expenses for: Carpet Replacement, Appliance Replacement,
      HVAC/Water Heater Replacement; Miniblinds/Drapes/Ceiling
    Fans:

            	
               

               

               

               

              ________

            	
               

               

               

               

              ________

            
	
               

              NON-RECURRING
      EXPENSES

              To
      Include Capital Expenses for: Playground, Major Signage,
      Lawns/Trees/Shrubs, Paving/Parking, Roof Replacement,
      Carpentry/Siding/Balconies, Exterior Paint, Major Concrete/Sidewalks,
      Foundations, Major Exterior, Boiler Replacement, Major HVAC Replacement,
      Plumbing Replace, Electrical Replace, Other Major, Fire & Storm, Ins.
      Loss Recovery:

              Net
      Cash Flow

            	
               

               

               

               

              ________

               

            	
               

               

               

               

              ________

            


    

    Certified
By:_____________________________

    Name:_____________________________

    Title:_____________________________

                                 
Management Company:_____________________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
D

     

    Required
Engineering Work for100 James Drive

    


    
      	
              ITEM

            	 	
              AMOUNT

            	 
	 	 	 	 
	
              1. Provide
      2 ADA Parking Spaces

            	 	
              $

            	
              0.00

            	 
	
              2. Concrete
      Pavement Repair

            	 	
              $

            	
              0.00

            	 
	
              3. Roof
      Surfacing

            	 	
              $

            	
              150,693.00

            	 
	
              Subtotal

            	 	
              $

            	
              150,693.00

            	 
	
              Plus
      25% Contingency

            	 	 	 	 
	
              TOTAL

            	 	
              $

            	
              188,366.25

            	 


    

     

    Required
Engineering Work for120 Mallard Street

    


    
      	
              ITEM

            	 	
              AMOUNT

            	 
	 	 	 	 
	
              1. Replace
      Roof

            	 	
              $

            	
              36,000.00

            	 
	
              2. Striping
      of Parking Lot

            	 	
              $

            	
              0.00

            	 
	
              3. Replace
      4-Ton Heat Pumps

            	 	
              $

            	
              144,000.00

            	 
	
              Subtotal

            	 	
              $

            	
              180,000.00

            	 
	
              Plus
      25% Contingency

            	 	 	 	 
	
              TOTAL

            	 	
              $

            	
              225,000.00

            	 


    

     

    Required
Engineering Work 1700 Grandstand Drive

    


    
      	
              ITEM

            	 	
              AMOUNT

            	 
	 	 	 	 
	
              1. Remove
      and Replace Exterior Sealants

            	 	
              $

            	
              0.00

            	 
	
              2. Allowance
      for roof repair indicated in the roof inspection report provided for our
      review. The opinion of cost is based upon estimated repair budget reported
      in the inspection report

            	 	
              $

            	
              15,000.00

            	 
	
              Subtotal

            	 	
              $

            	
              15,000.00

            	 
	
              Plus
      25% Contingency

            	 	 	 	 
	
              TOTAL

            	 	
              $

            	
              18,750.00

            	 


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Required
Engineering Work 5405 Bandera Road

    


    
      	
              ITEM

            	 	
              AMOUNT

            	 
	 	 	 	 
	
              1. Remove
      and Replace Exterior Sealants

            	 	
              $

            	
              0.00

            	 
	
              2. Allowance
      to have concrete wall panel cracking issue evaluated by a structural
      engineer. This allowance does not include any repairs that may be required
      based upon the results of the evaluation.

            	 	
              $

            	
              10,000.00

            	 
	
              3. Allowance
      to repair the distressed stairs in the loading dock area.

            	 	
              $

            	
              2,500.00

            	 
	
              4. Allowance
      to seal creaking and replace distressed sections in the concrete
      pavement.

            	 	
              $

            	
              0.00

            	 
	
              5. Allowance
      to have the fire sprinkler system inspected. This allowance does not
      include any repairs that may be required based upon the results of the
      inspection.

            	 	 	
              Routine
      Maintenance

            	 
	
              Subtotal

            	 	
              $

            	
              12,500.00

            	 
	
              Plus
      25% Contingency

            	 	 	 	 
	
              TOTAL

            	 	
              $

            	
              15,625.00

            	 


    

     

    Required
Engineering Work 7402-7648 Reindeer Trail

    


    
      	
              ITEM

            	 	
              AMOUNT

            	 
	 	 	 	 
	
              1. Remove
      and Replace Exterior Sealants

            	 	
              $

            	
              0.00

            	 
	
              2. Allowance
      to seal cracks and repair distressed sections of the concrete
      pavements

            	 	
              $

            	
              0.00

            	 
	
              3. Allowance
      to make fence repairs.

            	 	 	
              Routine
      Maintenance

            	 
	
              4. Allowance
      for roof repairs indicated in the roof inspection report provided for our
      review. The opinion of cost is based upon the estimated repair budget
      reported in the inspection report.

            	 	
              $

            	
              16,400.00

            	 
	
              5. Replace
      roof of 7402-7424 building. Estimate is based upon replacement cost
      indicated in roof condition report provided for our
review.

            	 	
              $

            	
              300,000.00

            	 
	
              Subtotal

            	 	
              $

            	
              316,400.00

            	 
	
              Plus
      25% Contingency

            	 	 	 	 
	
              TOTAL

            	 	
              $

            	
              395,500.00

            	 


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
E

     

    Form
of Direction Letter

     

    [Letterhead
of Landlord]

     

    [Name and
Address of tenant]

     

    Re:
[Address of Premises]

     

    Dear
tenant:

     

    You are
hereby directed to make all future payments of rent and other sums due to
Landlord under the Lease payable as follows:

     

    Payable
To: [____________]
and Wachovia Bank, National Association

     

    
      	 	If by federal wire
      transfer:	 
	 	
            	
            
	 	Bank: 	Wachovia Bank, NA
	 	ABA #: 	053-000-219
	 	Acct Name:	[__________]
	 	Acct #:  	 
	 	Ref Loan #:	___________________


    

    
       

      
        	 	If by US
      Mail:
	 	
              
	 	_________________
	 	PO Box _____
	 	Charlotte, NC
  28260-1443
	 	 
	 	If by Overnight
      Courier:
	 	
              
	 	
                Wachovia
      Bank, NA

                1525
      West WT Harris Blvd

                Bldg
      2C2 (Ref # ______)

                Charlotte,
      NC 28262

                Ref
      Loan #:_____________________

              


      

       

    

    Please
take particular care in making the check payable only to the above-mentioned
names because only checks made payable to the referenced names will be credited
against sums due by you to landlord. Until otherwise advised in writing by
Landlord and the
above-mentioned bank (or its successor), you should continue to make your
payments for rent and other sums as directed by the terms of this
letter.

     

    Thank you
in advance for your cooperation with this change in payment
procedures.

     

    
      	 	
              By:
    _________________________________

            
	 	
              _______________________________

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
F

    


    Allocated
Loan Amount and

    Individual
Properties

    


    
      	Individual Property	 	
              The
      Allocated Loan Amount

            	 
	
              100
      James Drive

            	 	
              $

            	
              2,025,000

            	 
	
              5405
      Bandera Road

            	 	
              $

            	
              5,475,000

            	 
	
              120
      Mallard Street

            	 	
              $

            	
              3,112,500

            	 
	
              150
      Canvasback Drive

            	 	
              $

            	
              1,612,500

            	 
	
              107
      Mallard Street

            	 	
              $

            	
              2,062,500

            	 
	
              143
      Mallard Street

            	 	
              $

            	
              1,762,500

            	 
	
              150
      Teal Street

            	 	
              $

            	
              3,787,500

            	 
	
              520-524
      Elmwood Park

            	 	
              $

            	
              7,912,500

            	 
	
              7042
      Alamo Drive

            	 	
              $

            	
              1,837,500

            	 
	
              7402-7648
      Reindeer Trail

            	 	
              $

            	
              9,375,000

            	 
	
              11301
      Industriplex Blvd.

            	 	
              $

            	
              2,662,500

            	 
	
              11441
      Industriplex Blvd.

            	 	
              $

            	
              2,962,500

            	 
	
              1700
      Grandstand Drive

            	 	
              $

            	
              3,975,000

            	 
	
              6565
      Exchequer Dr.

            	 	
              $

            	
              4,462,500

            	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-1

    


    (Legal
Description)

    PARCEL 1

    


    100 JAMES DRIVE
EAST.

    


    THAT
CERTAIN PORTION OF GROUND, situated in the State of Louisiana, Parish of St.
Charles, in that part thereof know as James Business Park, and shown on a plan
of resubdivision of J.J. Krebs & Sons, Inc., dated April 14, 1983, approved
by the St. Charles Parish Planning Commission on June 1, 1983, and registered in
COB 298, folio 297 on June 2, 1983, and identified as Lot 15-A, Square 4, and
said lot is more particularly described as follows:

    


    Commence
at the intersection of the northerly right of way of James Drive East and the
easterly right of way of James Drive West a near point of curvature on James
Drive East, thence along the northerly right of way line of James Drive East
North 72 degrees 46 minutes 00 seconds East a distance of 175.38 feet to the
point of beginning;

    


    Thence
North 00 degrees 11 minutes 00 seconds West a distance of 564.18 feet to a point
on the line common to Lots 15-A and 15-B;

    


    Thence
along said common line North 89 degrees 49 minutes 00 seconds East a distance of
466.87 feet tot a point;

    


    Thence
South 00 degrees 11 minutes 00 seconds East a distance of 421.00 feet to a point
on the northerly right of way of James Drive East; 

    


    Thence
South 72 degrees 46 minutes 00 seconds West along said right of way line a
distance of 488.33 feet to the point of beginning.

    


    Lot 15-A
is a portion of former Lot 15, James Business Park.

    


    The
improvements thereon bear the municipal no. 100 James Drive East.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-2

    PARCEL 2

    


    120 MALLARD
STREET

    


    THAT
CERTAIN PORTION OF GROUND, situated in the State of Louisiana, Parish of St.
Charles, in that part thereof known as James Business Park, and shown on a plan
of resubdivision of J.J. Krebs & Sons, Inc., dated April 14, 1983, approved
by the St. Charles Parish Planning Commission on June 1, 1983, and registered in
COB 298, folio 297 on June 2, 1983, and identified as Lot 15-B, Square 4, and
said lot is more particularly described as follows:

    


    Lot 15-B
begins 133.13 feet from the near point of curvature of the intersection of the
easterly right of way of James Drive West and the southerly right of way of
Mallard Street and measures thence along the southerly right of way of Mallard
Street North 89 degrees 49 minutes 00 seconds East a distance of 440 feet to a
point;

    


    Thence
South 00 degrees 11 minutes 00 seconds East, a distance of 200 feet to a
point;

    


    Thence
North 89 degrees 49 minutes 00 seconds East, a distance of 26.87 feet to a
point;

    


    Thence
South 00 degrees 11 minutes 00 seconds East, a distance of 129.00 feet to the
line common to Lots 15-A and 15-B;

    


    Thence
South 89 degrees 49 minutes 00 seconds West along said common line a distance of
466.87 feet to a point;

    


    Thence
North 00 degrees 11 minutes 00 seconds West a distance of 329.00 feet to the
point of beginning.

    


    Said Lot
15-B is composed of a portion of former Lot 15 and all of Lots 6, 7, 8 and 9,
Square 4, James Business Park.

    


    The
improvements thereon bear the municipal no. 120 Mallard Street.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-3

    


    PARCEL 3

    


    150 CANVASBACK
DRIVE

    


    THAT
CERTAIN PORTION OF GROUND, situated in the Parish of St. Charles, State
Louisiana, in that part thereof known as James Business Park Extension No. 2 in
Square No. 11 thereof, bounded by James Drive East, Pintail Street, James West
and Canvasback Drive, designated as Lot 10-A, according to a resubdivision plan
made by J.J. Krebs & Sons, Inc., dated December 9, 1986, approved by St.
Charles Parish Planning Director April 10, 1987, recorded at Entry No. 127655,
COB 371, folio 8 on April 23, 1987, and which lot is described as
follows:

    


    Begin at
the intersection of the westerly right of way of James Drive East and the
southerly right of way of Canvasback Drive, the point of curvature on James
Drive East;

    


    Thence
South 00 degrees 11 minutes 00 seconds East, a distance of 329.53 feet to a
point;

    


    Thence
South 89 degrees 49 minutes 00 seconds West, a distance of 325.00 feet to a
point;

    


    Thence
North 00 degrees 11 minutes 00 seconds West a distance of 354.53 feet to a point
on the southerly right of way of Canvasback Drive;

    


    Thence
along said right of way North 89 degrees 49 minutes 00 seconds East a distance
of 300.00 feet to a point of curve;

    


    Thence
along a curve to the right having a radius of 25.00 feet, a distance of 39.27
feet to the Point of Beginning.

    


    Improvements
thereon bear Municipal Number 150 Canvasback Drive.

    


    Together
with those certain servitudes established as follows:

    


    
      	2.  	
              COB
      366, folio 626 - Servitude by Destination of Owner as established by St.
      Charles Three, Limited Partnership, by act before Frank J. Stitch, Jr.,
      N.P. , dated January 13, 1987, filed January 14, 1987, under Entry No.
      125464, as shown on the Lot 10-A
Survey.

            


    

    


    (the
“Insured Servitudes”)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
G-4

    


    PARCEL 4

    


    107 MALLARD
STREET

    


    THAT
CERTAIN PORTION OF GROUND, situated in the State of Louisiana, Parish of St.
Charles, in that part thereof known as James Business Park, in accordance with a
plan of resubdivision prepared by J. J. Krebs & Sons, Inc., dated June 13,
1978, last revised August 14, 1979, approved under St. Charles Parish Policy
Jury Ordinance No. 66-3-544 and registered in COB 234, folio 490 on October 2,
1979, and identified as Lots 1, 2, and 3, Square 5, and said lots are more
particularly described as follows:

    


    Begin at
a near point of curvature at the northeast intersection of Mallard Street and
James Drive West; thence along the east right of way of James Drive West North
00 degrees 11 minutes 00 seconds West a distance of 175.00 feet to a
point;

    


    Thence
North 89 degrees 49 minutes 00 seconds East a distance of 325.00 feet to a point
on the line common to Lots 3 and 4;

    


    Thence
South 00 degrees 11 minutes 00 seconds East a distance of 200.00 feet to the
northerly right of way of Mallard Street;

    


    Thence
along said right of way South 89 degrees 49 minutes 00 seconds West a distance
of 300 feet to a point on a curve to the right at the northeast intersection of
Mallard Street and James Drive West;

    


    Thence
along said curve, having a radius of 25.00 feet a distance of 39.27 feet to the
point of beginning.

    


    The
improvements thereon bear the municipal no. 107 Mallard Street.

    


    Together
with those servitudes benefiting the land and established as
follows:

    


    
      	5.  	
              COB
      305, folio 4 - Destination of the Owner with Respect to Driveway, dated
      October 20, 

            


    

    
      	6.  	
              1983
      and establishing non-exclusive driveway servitudes across Lots 1 through
      18, Square 5, filed October 20,
1983.

            


    

    
      	7.  	
              COB
      305, folio 8 - Destination of the Owner with Respect to Non-Exclusive
      Parking Areas dated October 20, 1983, and establishing non-exclusive
      parking areas across Lots 1 through 18, Square 5, filed October 20,
      1983.

            


    

    
      	8.  	
              COB
      507, folio 148 - Supplement to Act of Destination by T.L. James &
      Company, Inc., dated April 9, 1996.

            


    

    (the
“Insured Servitudes”)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-5

    


    PARCEL 5

    


    143 MALLARD
STREET

    


    THAT
CERTAIN PORTION OF GROUND, situated in the State of Louisiana, Parish of St.
Charles, in that part thereof known as James Business Park, in accordance with a
plan of resubdivision prepared by J. J. Krebs & Sons, Inc., dated June 13,
1978, last revised August 14, 1979, approved under St. Charles Parish Police
Jury Ordinance No. 66-3-544 and registered in COB 234, folio 490 on October 2,
1979, and identified as Lots 7, 8 and 9, Square 5, and said lots are more
particularly described as follows:

    


    Begin at
the northwest intersection of James Drive East and Mallard Street, a near point
of curvature on Mallard Street;

    


    Thence
along the northerly right of way of Mallard Street South 89 degrees 49 minutes
00 West a distance of 300.00 feet to a point on the line common to Lots 6 and
7;

    Thence
along said line North 00 degrees 11 minutes 00 seconds West a distance of 200.00
feet to a point;

    


    Thence
North 89 degrees 49 minutes 00 seconds East a distance of 325.00 feet to a point
on the westerly right of way of James Drive East; 

    


    Thence
along said right of way South 00 degrees 11 minutes 00 seconds East a distance
of 175.00 feet to a point of curve;

    


    Thence
along the arc of a curve to the right having a radius of 25.00 feet a distance
of 39.27 feet to the point of beginning.

    


    The
improvements thereon bear municipal no. 143 Mallard Street.

    


    Together
with those servitudes benefiting the land and established as
follows:

    
      	4.  	
              COB
      305, folio 4 - Destination of the Owner with Respect to Driveway, dated
      October 20, 1983, and establishing non-exclusive driveway servitudes
      across Lots 1 through 18, Square 5, filed October 20,
  1983.

            


    

    
      	5.  	
              COB
      305, folio 8 - Destination of the Owner with Respect to Non-Exclusive
      Parking Areas dated October 20, 1983, and establishing non-exclusive
      parking areas across Lots 1 through 18, Square 5, filed October 20,
      1983.

            


    

    
      	6.  	
              COB
      507, folio 148 - Supplement to Act of Destination by T.L. James &
      Company, Inc., dated April 9, 1996.

            


    

    (the
“Insured Servitudes”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-6

    


    PARCEL 6

    


    150 TEAL STREET

    


    A CERTAIN
PIECE OR PORTION OF GROUND, situated in Section 39, Township 12 South, Range 9
East, St. Charles Parish, La., that part thereof known as James Business Park,
designated as Lot 10-A, Square 5, on a plan of Resubdivision by Krebs, LaSalle,
LeMieuz Consultants, Inc. entitled Resubdivision of Lots 10, 11, 12, 13, 14, 15
& 16, Square 5 into Lot 10-A, James Business Park in Section 39, Township 12
South, Range 9 East, dated October 29, 1998, approved by Director, St. Charles
Parish Planning and Zoning on November 2, 1998, filed November 10, 1998,
registered at COB 546, folio 226, Parish of St. Charles, State of Louisiana, and
Lot 10-A is more particularly described as follows:

    


    Commence
at the point of curvature on the southerly right of way line of Teal Street at
the intersection of James Drive West;

    


    Thence
along the southerly right of way line of Teal Street, North 89 degrees 49
minutes 00 seconds East a distance of 200.00 feet to the Point of
beginning;

    


    Thence
continue along the southerly right of way line of Teal Street, North 89 degrees
49 minutes 00 seconds East, a distance of 700.00 feet to a point of
curvature;

    


    Thence
along a curve to the right, having a radius of 25.00 feet, an arc length of
39.27 feet, a chord bearing of South 45 degrees 11 minutes 00 seconds East, a
chord distance of 35.36 feet to a point on the westerly right of way line of
James Drive East;

    


    Thence
along the westerly right of way line of James Drive East, South 00 degrees 11
minutes 00 seconds East, a distance of 175.00 feet to a point;

    


    Thence
South 89 degrees 49 minutes 00 seconds West, a distance of 725.00 to a
point;

    


    Thence
North 00 degrees 11 minutes 00 seconds West a distance of 200.00 feet to a point
of beginning.

    


    Improvements
bear municipal number 150 Teal Street.

    


    Together
with those servitudes benefiting the land and established as
follows:

    


    
      	4.  	
              COB
      305, folio 4 - Destination of the Owner with Respect to Driveway, dated
      October 20, 1983, and establishing non-exclusive driveway servitudes
      across Lots 1 through 18, Square 5, filed October 20,
  1983.

            


    

    
      	5.  	
              COB
      305, folio 8 - Destination of the Owner with Respect to Non-Exclusive
      Parking Areas, dated October 20, 1983, and establishing non-exclusive
      parking areas across Lots 1 through 18, Square 5, filed October 20,
      1983.

            


    

    
      	6.  	
              COB
      507, folio 148 - Supplement to Act of Destination by T.L. James &
      Company, Inc., dated April 9, 1996.

            


    

    


    (the
“Insured Servitudes”)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-7

    


    PARCEL 7

    


    520 AND 524 ELMWOOD PARK
BOULEVARD

    


    A CERTAIN
PIECE OR PORTION OF GROUND, situated in the Parish of Jefferson, State of
Louisiana, in that portion thereof known as Elmwood Industrial Park, designated
as Parcel 16-C-2, per plan of Michael W. Flores, C.E. and L.S., dated April 3,
1985 last revised November 21, 1985, approved by Jefferson Parish Council
Ordinance No. 16704 on December 18, 1985 filed in COB 1396, folio 307. Parcel
16-C-2 is described as follows:

    


    Commence
at the intersection of the west right of way line of Jefferson Highway and the
south right of way line of Elmwood Park Boulevard, thence North 47 degrees 25
minutes 41 seconds West along the south right of way line of Elmwood Park
Boulevard, a distance of 405.37 feet to the Point of Beginning; thence South 42
degrees 33 minutes 47 seconds West a distance of 521.05 feet to a point; thence
North 47 degrees 26 minutes 11 seconds West, a distance of 445.00 feet to the
point; thence North 42 degrees 33 minutes 47 seconds East a distance of 521.12
feet to a point on the south right of way line of Elmwood Park Boulevard; thence
along said right of way line South 47 degrees 25 minutes 41 seconds East a
distance of 445.00 feet to the Point of Beginning.

    


    Address:
520 and 524 Elmwood Park Boulevard.

    


    Together
with those certain servitudes benefiting the land and established as
follows:

    


    
      	3.  	
              COB
      1916, folio 275 - Servitude of Destination of the Owner as established by
      Crow-Coleman, New Orleans, #1, a Louisiana General Partnership by act
      dated March 21, 1988, registered as Entry No. 88-12359. This is a
      non-exclusive servitude of common drive and passage, affecting a portion
      of Parcels 16-C-2 and 16-C-3.

            


    

    


    
      	4.  	
              COB
      1913, folio 221 - Servitude of Destination of the Owner established by
      Crow-Coleman New Orleans #1, a Louisiana General Partnership, by act last
      dated March 16, 1988, filed as Entry No. 88-11515. This is a non-exclusive
      servitude of common drive affecting a portion of Parcels 16-C-1 and
      16-C-2. (Collectively the “Insured
Servitudes”)

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-8

    


    PARCEL 8

    


    11301 INDUSTRIPLEX
BOULEVARD

    


    A CERTAIN
PIECE OR PORTION OF GROUND, situated in that subdivision of East Baton Rouge
Parish, Louisiana, known as Baton Rouge Industriplex Subdivision, Fourth Filing,
and designated as Lot No. 99-A, and according to Map Showing Resubdivision of
Lots 98-101, Baton Rouge Industriplex Subdivision, Fourth Filing, creating Lots
99-A and 101-A, by James R. Clary, Sr., P.L.S., dated March 3, 1988, approved by
East Baton Rouge Planning Commissions on March 9, 1988, recorded as Original 85,
Bundle 9987, Lot 99-A is more particularly described as follows:

    


    Begin at
the intersection of the northerly right of way of Industriplex Boulevard and the
easterly right of way of Fieldstone Drive;

    


    Thence
North 13 degrees 14 minutes 11 seconds East along the east right of way of
Fieldstone Drive, a distance of 291.70 feet to a point;

    


    Thence
South 81 degrees 13 minutes 20 seconds East a distance of 377.15 feet to a
point;

    


    Thence
South 13 degrees 14 minutes 11 seconds West a distance of 321.02 feet to a point
on the north right of way of Industriplex Boulevard;

    


    Thence
North 76 degrees 45 minutes 49 seconds West along the north right of way of
Industriplex Boulevard a distance of 376.01 feet to the Point of
Beginning.

    


    Improvements
thereon bear Municipal No. 11301 Industriplex Boulevard.

    


    Together
with those certain servitudes established as follows:

    


    
      	2.  	
              Original
      586, Bundle 9988 - Servitude of Destination of the Owner as established by
      Baton Rouge Trade Center Partnership by act dated March 21, 1988, filed
      March 22, 1988. This is a non-exclusive servitude of common drive and
      passage, affecting a portion of Lots 99-A and
  101-A.

            


    

    


    (the
“Insured Servitude”)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-9

    


    PARCEL 9

    


    11441 INDUSTRIPLEX
BOULEVARD

    


    A CERTAIN
PIECE OR PORTION OF GROUND, situated in the that subdivision of East Baton Rouge
Parish known as Baton Rouge Industriplex Subdivision, Fourth Filing and Baton
Rouge Industriplex Subdivision, Fifth Filing and designated as Lot 104-A-1, and
according to Map Showing Resubdivision of Lots 103, 104-A and 105 Baton Rouge
Industriplex Subdivision Fourth Filing and Lots 106-A and 107-A, Baton Rouge
Industriplex Subdivision, Fifth Filing, creating Lots 103-A, 104-A-1 and
107-A-1, by James R. Clary, Sr., P.L.S., dated March 7, 1988, approved by East
Baton Rouge Planning Commission March 9, 1988, recorded as Original 86, Bundle
9987, said Lot 104-A-1 is more described as follows:

    


    Begin at
the northeast intersection of Industriplex Boulevard and Sunbelt
Court:

    


    Thence
along the northeasterly right of way of Industriplex Boulevard along a curve
having a radius of 290.20 feet, a distance of 286.42 feet to point;

    


    Thence
continue along said right of way line North 76 degrees 45 minutes 49 seconds
West a distance of 10.49 feet to a point;

    


    Thence
North 13 degrees 14 minutes 11 seconds East a distance of 343.42 feet to a
point;

    


    Thence
South 81 degrees 13 minutes 20 seconds East a distance of 239.57 feet to a
point;

    


    Thence
South 09 degrees 04 minutes 39 seconds West a distance of 275.02 feet to a
point;

    


    Thence
South 19 degrees 56 minutes 22 seconds East a distance of 8.89 feet to a
point;

    


    Thence
South 50 degrees 55 minutes 59 seconds East a distance of 165.01 feet to a
point;

    


    Thence
South 34 degrees 24 minutes 55 seconds East a distance of 28.62 feet to a point
on the north right of way line of Sunbelt Court;

    


    Thence
South 69 degrees 47 minutes 07 seconds West the north right of way line of
Sunbelt Court a distance of 216.58 feet to the Point of Beginning.

    


    Improvements
thereon bear Municipal No. 11441 Industriplex Boulevard.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-10

    


    PARCEL
10

    


    6565 EXCHEQUER
DRIVE

    


    TWO (2)
CERTAIN PIECES OR PORTIONS OF GROUND, situated in the subdivision of East Baton
Rouge Parish, Louisiana known as Baton Rouge Industriplex Subdivision, First and
Second Filing, designated as Lot Nos. 33-A and 34-A and according to a map
prepared by Dawson Engineers Incorporated, Consulting Civil Engineers, dated
August 2, 1982, entitled “Map Showing Survey of a Resubdivision of Lot 18 of the
Baton Rouge Industriplex Subdivision (First filing) into Lot 18A and Lot 33 of
the Baton Rouge Industriplex Subdivision (Second filing) into Lot 33-A and Lot
34 of the Baton Rouge Industriplex Subdivision (Second Filing) into Lot 34-A,
located in Section 6, T8S, R2E, Greensburg Land District, Parish of East Baton
Rouge, Louisiana”, approved by East Baton Rouge Planning Commission August 11,
1982, recorded on Original 557, Bundle 9514, said Lots 33-A and 34-A are more
particularly described as follows:

    


    Commence
at the north right of way line of Industriplex Boulevard and last right of way
line of Exchequer Drive;

    


    Thence
North 18 degrees 17 minutes 07 seconds East along the east right of way of
Exchequer Drive a distance of 300.00 feet to the Point of
Beginning;

    


    Thence
continuing along the east right of way of Exchequer Drive North 18 degrees 17
minutes 07 seconds East a distance of 291.13 feet to a point;

    Thence
North 89 degrees 41 minutes 35 seconds East a distance of 456.21 feet to a
point;

    


    Thence
South 36 degrees 53 minutes 09 seconds East a distance of 327.29 feet to a
point;

    


    Thence
South 01 degrees 22 minutes 42 seconds West a distance of 260.94 feet to a
point;

    


    Thence
North 71 degrees 42 minutes 53 seconds West a distance of 776.95 feet to the
Point of Beginning.

    


    Improvements
thereon bear Municipal No. 6565 Exchequer Drive.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    EXHIBIT
G-11

     

    (Legal
Description)

     

    5405 BANDERA ROAD

     

    TRACT
I (WEST LOOP PARK):

     

    Lot
4, Block 1, West Loop Park, City of Leon Valley, an addition in Bexar County,
Texas, according to the map or plat thereof, recorded in Volume19100,
Page 150, Deed and Plat Records of Bexar County, Texas, being more particularly
described as follows:

     

    BEGINNING
at the most Southerly corner of Lot 4, said point being North 67 degrees 03
minutes 09 seconds West, 522.91 feet from the point of intersection of the
Northeast line of Bandera Road and the Northwest line of Hodges
Drive;

     

    THENCE
North 67 degrees 25 minutes 37 seconds West, 208.69 feet along the Northeast
line of Bandera Road to a found THD Monument for an angle point;

     

    THENCE
North 67 degrees 07 minutes 44 seconds West, 69,71 feet along the Northeast line
of Bandera Road to an iron pin found for the Southwest corner of Lot
4;

     

    THENCE
along the Westerly line of Lot 4, the following courses and distances: North 30
degrees 52 minutes 54 seconds East, 806.84 feet to a found iron pin. North 61
degrees 37 minutes 28 seconds West, 67.49 feet to a found iron pin,

     

    North
44 degrees 16 minutes 59 seconds East, 493.79 feet to an iron pin in the
Southwest line of Evers Road for the Northwest corner of Lot 4;

     

    THENCE
South 48 degrees 44 minutes 00 seconds East, 232.74 feet along the Southwest
line of Evers Road to an iron pipe found for the Northeast corner of the herein
described tract;

     

    THENCE
along the Easterly line of Lot 4, the following courses and distances: South 30
degrees 57 minutes 36 seconds West, 693.00 feet to a found iron pin, South 30
degrees 37 minutes 51 seconds West, 159.42 feet to a found iron
pin.

     

    South
30 degrees 54 minutes 31 seconds West, 34 9.99 feet to a found iron pipe, said
iron pipe being the POINT OP BEGINNING.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-12

     

    (Legal
Description)

     

    7402-7648 REINDEER
TRAIL

     

    TRACT
II (NORTHWEST BUSINESS PARK, PHASE 5):

     

    A
14.216 acre tract out of Lot 1, Block 2, North Valley Unit 5, and Lot 6, Block
2, Northwest Business Park Phase 5, an addition in Bexar County, Texas,
according to the map or plat thereof, recorded in Volume 7500, Page 241 and
Volume 9507, Page 189, respectively, Deed and Plat Records of Bexar County,
Texas, and being described as follows:

     

    BEGINNING
at a found 1/2" iron pin on the South Right-of-Way line of Reindeer Trail, in a
Westerly direction, 851.07 feet from the West Right-of-Way line of Bandera Road,
said pin being the Northernmost corner of this tract and the POINT OP
BEGINNING;

     

    THENCE
departing the South Right-of-Way line of Reindeer Trail, South 46 degrees 05
minutes 06 seconds East, a distance of 380.00 feet to a found "X on concrete for
an angle point;

     

    THENCE
South 46 degrees 11 minutes 19 seconds East, a distance of 163.92 feet to a
found "X" on concrete, and said "X" on concrete being the Easternmost corner of
this tract;

     

    THENCE
South 40 degrees 43 minutes 11 seconds West, a distance of 1061.87 feet to a
found 1/2" iron pin for an angle point;

     

    THENCE
North 80 degrees 44 minutes 12 seconds West, a distance of 364.73 feet to a
found 1/2" iron pin on the South Right-of-Way line of Reindeer Trail, said pin
being the Northwest corner of this tract;

     

    THENCE
along the South Right-of-Way line of Reindeer Trail, North 09 degrees 15 minutes
48 seconds East, a distance of 153.91 feet to a found 1/2" iron pin for a
P.C.,

     

    THENCE
along the South Right-of-Way line of Reindeer Trail on a curve to the right
whose radius is 1670.73 feet and length is 418.53 feet to a found 1/2" iron pin
for a P.C.C. ,

     

    THENCE
along the South Right-of-Way line of Reindeer Trail on a curve to the right
whose radius is 370.00 feet and length is 131.09 feet to a found 1/2" iron pin
for a P.T.,

     

    THENCE
continuing along the South Right-of-Way line of Reindeer Trail North 43 degrees
54 minutes 54 seconds East, a distance of 641.99 feet to the POINT OF BEGINNING
and containing 14.216 acres of land.

     

    NOTE:
COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-13

     

    (Legal
Description)

     

    7042 ALAMO DOWNS
PARKWAY

     

    TRACT
III (COMMERCE BUSINESS PARK)s

     

    A
2.855 acre (124,394
square feet) tract of land being all of Lot 4, Block 4, New City Block 16115,
Commerce Center at Alamo Downs Subdivision, an addition to the City of San
Antonio, Bexar County, Texas according to the map or plat thereof, recorded in,
Volume 9200,Page 103, Deed and Plat Records of Bexar County, Texas and being
more particularly described as follows:

     

    BEGINNING
at a found 1/2 inch iron pin in the North Right-of-Way line of Alamo Downs
Parkway at the cutback to Grandstand Drive, said point being at the Southeast
corner of said Lot 4;

     

    THENCE
South 54 degrees 02 minutes 38 seconds West for a distance of 311.00 feet along
the North Right-of-Way line of Alamo Downs Parkway to a set "X" in concrete and
the South most corner of said Lot 4;

     

    THENCE
North 35 degrees 57 minutes 22 seconds West for a distance of 442.00 feet along
the West line of said Lot 4 to a set X" in concrete;

     

    THENCE
North 54 degrees 02 minutes 38 seconds East for a distance of 210.67 feet along
the North line of said Lot 4 to a found "X" in concrete, said point being in the
South Right-of-Way line of Grandstand Drive and a point on the curve of a
cul-de-sac;

     

    THENCE
116.59 feet along a curve to the left said curve having a radius of 100 feet, a
delta angle of 66 degrees 48 minutes 10 seconds and a chord bearing and distance
of South 75 degrees 05 minutes 59 seconds East, 110.10 feet and also along the
cul-de-sac and Right-of-Way line of Grandstand Drive to a found 1/2 inch iron
pin;

     

    THENCE
South 35 degrees 57 minutes 22 seconds East for a distance of 152.56 feet along
the West Right-of-Way line of Grandstand to a found 1/2 inch iron pin and point
of curvature;

     

    THENCE
100.01 feet along a curve to the left, said curve having a radius of 205.00
feet, a delta angle of 27 degrees 57 minutes 04 seconds and a chord bearing and
distance of South 49 degrees 55 minutes 54 seconds East, 99.02 feet and also
along the West Right-of-Way line of Grandstand Drive to a found 1/2 inch iron
pin and a point of reverse curvature;

     

    THENCE
70.74 feet along a curve to the right, said curve having a radius of 145.00
feet, a delta angle of 27 degrees 57 minutes 04 seconds and a chord bearing and
distance of South 49 degrees 55 minutes 54 seconds East, 70.04 feet and also
along the West Right-of-Way line of Grandstand Drive to a found 1/2 inch iron
pin and a point of tangency;

     

    THENCE
South 35 degrees 57 minutes 22 seconds East for a distance of 30.00 feet along
the West Right-of-Way line of Grandstand Drive and the East line of said Lot 4
to a found 1/2 inch iron pin and a point of curvature;

     

    THENCE
15.71 feet along a curve to the right, said curve having a radius of 10.00 feet,
a delta angle of 90 degrees 01 minutes 10 seconds, and a chord bearing and
distance of South 09 degrees 02 minutes 57 seconds West 14.14 feet and also
along the cutback Right-of-Way line at the Northwest intersection of Grandstand
Drive and Alamo Downs Parkway to the POINT OF BEGINNING and containing 2.855
acres (124,394 square feet) of land.

     

    NOTE:
COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
G-14

     

    (Legal
Description)

     

    1700 GRANDSTAND
DRIVE

     

    TRACT
IV (WESTWAY SERVICE CENTER):

     

    A
6.803 acres {296,374 square feet) tract of land being all of Lot 8, Block 4, New
City Block 16115, Lincoln Service Center Phase III, at Alamo Downs, an addition
to the City of San Antonio, Bexar County, Texas according to the map or plat
thereof, recorded in Volume 9400, Page 129, Deed and Plat Records of Bexar
County, Texas, being more particularly described as follows:

     

    BEGINNING
at a found 1/2 inch iron pin at the South most corner of said Lot
8;

     

    THENCE
North 53 degrees 59 minutes 08 seconds West for a distance of 460.56 feet along
the Southwest line of said Lot 8 to a found 1/2 inch iron pin;

     

    THENCE
North 35 degrees 56 minutes 21 seconds East for a distance of 599.21 feet along
the Northwest line of said Lot 8 to a found "X" in concrete;

     

    THENCE
North 38 degrees 40 minutes 49 seconds East for a distance of 75.75 feet along
the Northwest line of said Lot 8 to a found 1/2 inch iron pin, said point being
the North corner of said Lot 8;

     

    THENCE
South 54 degrees 02 minutes 40 seconds East for a distance of 381.19 feet along
the Northeast line of said Lot 8 to a set 1/2 inch iron pin with Vickery &
Associates property corner cap, said point being in the West Right-of-Way line
and cul-de-sac of Grandstand;

     

    THENCE
233.79 feet along a curve to the left said curve having a radius of 100 feet, a
delta angle of 133 degrees 57 minutes 03 seconds and a chord bearing and
distance of South 11 degrees 36 minutes 43 seconds West, 184.07 feet and along
the West Right-of-Way line and cul-de-sac of Grandstand and the East line of
said Lot 8 to a set 1/2 inch iron pin with Vickery &. Associates property
corner cap;

     

    THENCE
South 35 degrees 56 minutes 53 seconds for a distance of 507.65 feet along the
East line of said Lot 8 to the POINT OF BEGINNING and containing 6.803 acres
(296,374 square feet) of land.

     

    NOTE:
COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    SCHEDULE
1

    


    


    "Texas
Borrowers"

    


    LIGHT
5405 BANDERA LLC

    LIGHT
1700 GRANDSTAND LLC

    LVP 7042
ALAMO DOWNS LLC

    LVP 7402
REINDEER LLC 

    


    "Louisiana
Borrower":

    


    LVP GULF
COAST INDUSTRIAL PORTFOLIO LLC