Exhibit 10.1




 





LOAN
AGREEMENT


Dated as of June
8, 2007


by and between


BEHRINGER HARVARD SANTA CLARA LP


as Borrower


and


CITIGROUP
GLOBAL MARKETS REALTY CORP.


as Lender




 





















TABLE OF
CONTENTS


	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS; PRINCIPLES OF CONSTRUCTION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Specific Definitions

  	
   

  	
  1

  
	
  1.2

  	
   

  	
  Index of Other Definitions

  	
   

  	
  15

  
	
  1.3

  	
   

  	
  Principles of Construction

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  GENERAL LOAN TERMS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Loan Commitment; Disbursement to Borrower.

  	
   

  	
  18

  
	
  2.2

  	
   

  	
  Interest; Loan Payments; Late Payment Charge.

  	
   

  	
  22

  
	
  2.3

  	
   

  	
  Loan Repayment.

  	
   

  	
  26

  
	
  2.4

  	
   

  	
  Release of Property.

  	
   

  	
  28

  
	
  2.5

  	
   

  	
  Payments and Computations.

  	
   

  	
  30

  
	
  2.6

  	
   

  	
  Interest Rate Cap Agreement.

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  CASH MANAGEMENT AND RESERVES

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Cash Management Arrangements

  	
   

  	
  33

  
	
  3.2

  	
   

  	
  Required Repairs; Completion of Required Repairs

  	
   

  	
  33

  
	
  3.3

  	
   

  	
  Tax and Insurance Subaccount

  	
   

  	
  33

  
	
  3.4

  	
   

  	
  Intentionally Omitted.

  	
   

  	
  34

  
	
  3.5

  	
   

  	
  Mezzanine Loan Subaccount

  	
   

  	
  34

  
	
  3.6

  	
   

  	
  Casualty/Condemnation Subaccount

  	
   

  	
  34

  
	
  3.7

  	
   

  	
  Security Deposit Subaccount

  	
   

  	
  34

  
	
  3.8

  	
   

  	
  Intentionally Omitted.

  	
   

  	
  34

  
	
  3.9

  	
   

  	
  Grant of Security Interest; Application of Funds

  	
   

  	
  34

  
	
  3.10

  	
   

  	
  Property Cash Flow Allocation

  	
   

  	
  35

  
	
  3.11

  	
   

  	
  Initial Deposits into Reserves

  	
   

  	
  36

  
	
  3.12

  	
   

  	
  Tenant Improvement Reserve Subaccount

  	
   

  	
  36

  
	
  3.13

  	
   

  	
  Replacement Reserve Subaccount.

  	
   

  	
  37

  
	
  3.14

  	
   

  	
  Lender Waiver of Reserves

  	
   

  	
  41

  
	
  3.15

  	
   

  	
  Lender Reliance

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Organization; Special Purpose

  	
   

  	
  41

  
	
  4.2

  	
   

  	
  Proceedings; Enforceability

  	
   

  	
  42

  
	
  4.3

  	
   

  	
  No Conflicts

  	
   

  	
  42

  
	
  4.4

  	
   

  	
  Litigation

  	
   

  	
  42

  
	
  4.5

  	
   

  	
  Agreements

  	
   

  	
  42

  
	
  4.6

  	
   

  	
  Title

  	
   

  	
  43

  
	
  4.7

  	
   

  	
  No Bankruptcy Filing

  	
   

  	
  43

  
	
  4.8

  	
   

  	
  Full and Accurate Disclosure

  	
   

  	
  44

  
	
  4.9

  	
   

  	
  Tax Filings

  	
   

  	
  44

  
	
  4.10

  	
   

  	
  No Plan Assets

  	
   

  	
  44

  



 



 i
 









 


	
  4.11

  	
   

  	
  Compliance

  	
   

  	
  44

  
	
  4.12

  	
   

  	
  Contracts

  	
   

  	
  45

  
	
  4.13

  	
   

  	
  Federal Reserve Regulations; Investment Company Act

  	
   

  	
  45

  
	
  4.14

  	
   

  	
  Easements; Utilities and Public Access

  	
   

  	
  45

  
	
  4.15

  	
   

  	
  Physical Condition

  	
   

  	
  45

  
	
  4.16

  	
   

  	
  Leases

  	
   

  	
  46

  
	
  4.17

  	
   

  	
  Fraudulent Transfer

  	
   

  	
  46

  
	
  4.18

  	
   

  	
  Ownership of Borrower

  	
   

  	
  47

  
	
  4.19

  	
   

  	
  Purchase Options

  	
   

  	
  47

  
	
  4.20

  	
   

  	
  Management Agreement

  	
   

  	
  47

  
	
  4.21

  	
   

  	
  Hazardous Substances

  	
   

  	
  47

  
	
  4.22

  	
   

  	
  Name; Principal Place of Business

  	
   

  	
  48

  
	
  4.23

  	
   

  	
  Other Debt

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  COVENANTS

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Existence

  	
   

  	
  48

  
	
  5.2

  	
   

  	
  Taxes and Other Charges

  	
   

  	
  48

  
	
  5.3

  	
   

  	
  Access to Property

  	
   

  	
  49

  
	
  5.4

  	
   

  	
  Repairs; Maintenance and Compliance; Alterations.

  	
   

  	
  49

  
	
  5.5

  	
   

  	
  Performance of Other Agreements

  	
   

  	
  50

  
	
  5.6

  	
   

  	
  Cooperate in Legal Proceedings

  	
   

  	
  50

  
	
  5.7

  	
   

  	
  Further Assurances

  	
   

  	
  50

  
	
  5.8

  	
   

  	
  Environmental Matters.

  	
   

  	
  50

  
	
  5.9

  	
   

  	
  Title to the Property

  	
   

  	
  53

  
	
  5.10

  	
   

  	
  Leases.

  	
   

  	
  53

  
	
  5.11

  	
   

  	
  Estoppel Statement

  	
   

  	
  55

  
	
  5.12

  	
   

  	
  Property Management.

  	
   

  	
  55

  
	
  5.13

  	
   

  	
  Special Purpose Bankruptcy Remote Entity

  	
   

  	
  56

  
	
  5.14

  	
   

  	
  Assumption in Non-Consolidation Opinion

  	
   

  	
  57

  
	
  5.15

  	
   

  	
  Change In Business or Operation of Property

  	
   

  	
  57

  
	
  5.16

  	
   

  	
  Debt Cancellation

  	
   

  	
  57

  
	
  5.17

  	
   

  	
  Affiliate Transactions

  	
   

  	
  57

  
	
  5.18

  	
   

  	
  Zoning

  	
   

  	
  57

  
	
  5.19

  	
   

  	
  No Joint Assessment

  	
   

  	
  57

  
	
  5.20

  	
   

  	
  Principal Place of Business

  	
   

  	
  57

  
	
  5.21

  	
   

  	
  Change of Name, Identity or Structure

  	
   

  	
  57

  
	
  5.22

  	
   

  	
  Indebtedness

  	
   

  	
  58

  
	
  5.23

  	
   

  	
  Licenses

  	
   

  	
  58

  
	
  5.24

  	
   

  	
  Compliance with Restrictive Covenants, Etc

  	
   

  	
  58

  
	
  5.25

  	
   

  	
  ERISA.

  	
   

  	
  58

  
	
  5.26

  	
   

  	
  Transfers.

  	
   

  	
  59

  
	
  5.27

  	
   

  	
  Liens

  	
   

  	
  59

  
	
  5.28

  	
   

  	
  Dissolution

  	
   

  	
  60

  
	
  5.29

  	
   

  	
  Expenses

  	
   

  	
  60

  
	
  5.30

  	
   

  	
  Indemnity

  	
   

  	
  60

  
	
  5.31

  	
   

  	
  Intentionally Omitted.

  	
   

  	
  61

  



 



 ii
 









 


	
  5.32

  	
   

  	
  Intentionally Omitted.

  	
   

  	
  61

  
	
  5.33

  	
   

  	
  Patriot Act Compliance

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  NOTICES AND REPORTING

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Notices

  	
   

  	
  62

  
	
  6.2

  	
   

  	
  Borrower Notices and Deliveries

  	
   

  	
  63

  
	
  6.3

  	
   

  	
  Financial Reporting.

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  INSURANCE; CASUALTY; AND CONDEMNATION

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Insurance.

  	
   

  	
  67

  
	
  7.2

  	
   

  	
  Casualty.

  	
   

  	
  71

  
	
  7.3

  	
   

  	
  Condemnation.

  	
   

  	
  72

  
	
  7.4

  	
   

  	
  Application of Proceeds or Award.

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  DEFAULTS

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Events of Default

  	
   

  	
  74

  
	
  8.2

  	
   

  	
  Remedies.

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  SPECIAL PROVISIONS

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Sale of Notes and Securitization.

  	
   

  	
  78

  
	
  9.2

  	
   

  	
  Securitization Indemnification.

  	
   

  	
  80

  
	
  9.3

  	
   

  	
  Reallocation of Loan Amounts.

  	
   

  	
  83

  
	
  9.4

  	
   

  	
  Intercreditor Agreement

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  MISCELLANEOUS

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Exculpation

  	
   

  	
  84

  
	
  10.2

  	
   

  	
  Brokers and Financial Advisors

  	
   

  	
  86

  
	
  10.3

  	
   

  	
  Retention of Servicer

  	
   

  	
  86

  
	
  10.4

  	
   

  	
  Survival

  	
   

  	
  86

  
	
  10.5

  	
   

  	
  Lender’s Discretion

  	
   

  	
  86

  
	
  10.6

  	
   

  	
  Governing Law.

  	
   

  	
  87

  
	
  10.7

  	
   

  	
  Modification, Waiver in Writing

  	
   

  	
  88

  
	
  10.8

  	
   

  	
  Trial by Jury

  	
   

  	
  88

  
	
  10.9

  	
   

  	
  Headings/Exhibits

  	
   

  	
  88

  
	
  10.10

  	
   

  	
  Severability

  	
   

  	
  88

  
	
  10.11

  	
   

  	
  Preferences

  	
   

  	
  88

  
	
  10.12

  	
   

  	
  Waiver of Notice

  	
   

  	
  89

  
	
  10.13

  	
   

  	
  Remedies of Borrower

  	
   

  	
  89

  
	
  10.14

  	
   

  	
  Prior Agreements

  	
   

  	
  89

  
	
  10.15

  	
   

  	
  Offsets, Counterclaims and Defenses

  	
   

  	
  89

  
	
  10.16

  	
   

  	
  Publicity

  	
   

  	
  90

  
	
  10.17

  	
   

  	
  No Usury

  	
   

  	
  90

  
	
  10.18

  	
   

  	
  Conflict; Construction of Documents

  	
   

  	
  90

  



 



 iii
 









 


	
  10.19

  	
   

  	
  No Third Party Beneficiaries

  	
   

  	
  90

  
	
  10.20

  	
   

  	
  Spread Maintenance Premium

  	
   

  	
  91

  
	
  10.21

  	
   

  	
  Assignment

  	
   

  	
  91

  
	
  10.22

  	
   

  	
  Borrower’s Designee

  	
   

  	
  91

  
	
  10.23

  	
   

  	
  Intentionally Omitted.

  	
   

  	
  91

  
	
  10.24

  	
   

  	
  Set-Off

  	
   

  	
  91

  
	
  10.25

  	
   

  	
  Counterparts

  	
   

  	
  92

  



 


	
  Schedule 1  -

  	
  TI and Free Rent

  
	
  Schedule 2  -

  	
  Required Repairs

  
	
  Schedule 3  -

  	
  Exceptions to Representations and Warranties

  
	
  Schedule 4  -

  	
  Organization of Borrower

  
	
  Schedule 5  -

  	
  Definition of Special Purpose Bankruptcy Remote
  Entity

  
	
  Schedule 8  -

  	
  Rent Roll

  
	
  Exhibit A  -

  	
  Out-Parcel

  



 



 iv















LOAN
AGREEMENT


LOAN AGREEMENT dated as of June
8, 2007 (as the same may be modified, supplemented, amended or otherwise
changed, this “Agreement”) by and between BEHRINGER HARVARD SANTA CLARA LP, a Delaware limited partnership (“Borrower”) and CITIGROUP GLOBAL
MARKETS REALTY CORP., a New York corporation (together with its
successors and assigns, “Lender”).


1.                                      DEFINITIONS;
PRINCIPLES OF CONSTRUCTION


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


Acceptable Counterparty: any Counterparty to the
Interest Rate Cap Agreement that has and shall maintain, until the expiration
of the applicable Interest Rate Cap Agreement, a long-term unsecured debt
rating of not less than “AA-” (or the equivalent) by the Rating Agencies and a
short term unsecured debt rating of not less than “A-1+” (or the equivalent) by
the Rating Agencies.


Additional Advance:  any advance made under the Note in accordance
with the terms of Section 2.1.4 of this Agreement.


Adjusted Debt Service: with respect to any
particular period of time, the payments of principal and interest that would be
due on the outstanding principal balance of the Loan assuming a loan constant
equal to the Market Constant Rate for such period.


Adjusted Mezzanine Debt Service:  the meaning ascribed to the term “Debt
Service” in the Mezzanine Loan Agreement.


Adjusted Prime Rate: an interest rate per annum
equal to the Prime Rate in effect from time to time plus the Prime Rate Spread
per annum.


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


Affiliated Loans: 
a loan made by Lender to a parent, subsidiary or such other entity
affiliated with Borrower, any Guarantor and any other loan that is
cross-collateralized with the Loan.


Approved Accountant:  a “Big Four” accounting firm or other
independent certified public account acceptable to Lender.


Approved Bank: a bank, the long term unsecured
debt obligations of which are rated at least “AA” by S&P and its
successors, and the equivalent by Fitch and its successors and Moody’s and its
successors (unless Lender approves in writing a financial institution other
than a bank or a lower rating, in each case in Lender’s sole and absolute
discretion).













Approved Leasing Expenses:  actual out-of-pocket expenses incurred by
Borrower in leasing space at the Property pursuant to Leases entered into in
accordance with the Loan Documents, including brokerage commissions (including
those paid pursuant to the Management Agreement) and tenant improvements, which
expenses (i) are (A) specifically approved by Lender in connection
with approving the applicable Lease, (B) incurred in the ordinary course
of business and on market terms and conditions in connection with Leases which
do not require Lender’s approval under the Loan Documents, or
(C) otherwise approved by Lender, which approval shall not be unreasonably
withheld or delayed, and (ii) are substantiated by executed Lease
documents and brokerage agreements.


Assignment of Interest Rate Cap: that certain
Collateral Assignment of Interest Rate Cap Agreement made by Borrower to Lender
dated as of the date hereof
required by this Agreement as security for the Loan, consented to by the
Counterparty, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.


Behringer Harvard REIT:  Behringer Harvard REIT I, Inc., a Maryland
corporation.


Behringer Harvard Operating Partnership:  Behringer Harvard
Operating Partnership I LP, a Texas limited partnership.


Behringer Harvard Opportunity REIT:  Behringer Harvard Opportunity REIT I, Inc., a
Maryland corporation.


BHR Partners:  BHR
Partners, LLC, a Delaware limited liability company.


Borrower:  has the meaning set forth in the
preamble to this Agreement.


Borrower’s Designee:  the Manager or such other Person as Borrower,
with the consent of Lender (not to be unreasonably withheld), may from time to
time designate as “Borrower’s Designee”; provided that there shall be only one
Borrower’s Designee at any time.


Borrower GP:  Behringer
Harvard Santa Clara GP, LLC, a Delaware limited liability company.


Building 800: 
the improvements on the Property located at 800 Central Expressway,
Santa Clara, California.


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


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


CBRE:  CBRE
Real Estate Services Inc., a Delaware corporation.



 2
 









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


Collateral: 
has the meaning set forth in the Mezzanine Loan Agreement.


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


Counterparty: 
any Person which is the issuer of the Interest Rate Cap Agreement.


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


Debt Service: 
with respect to any particular period, the scheduled interest payments
due under the Note in such period.


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


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


Deposit Bank: 
JPMorgan Chase Bank, N.A., a national banking corporation, or such other
bank or depository selected by Lender in its discretion.


Eligible Account: 
a separate and identifiable account from all other funds held by the
holding institution that is either (i) an account or accounts (A) maintained
with a federal or state-chartered depository institution or trust company which
complies with the definition of Eligible Institution or (B) as to which
Lender has received a Rating Comfort Letter from each of the applicable Rating
Agencies with respect to holding funds in such account, or (ii) a segregated
trust account or accounts maintained with the corporate trust department of a
federal depository institution or state chartered depository institution
subject to regulations regarding fiduciary funds on deposit similar to Title 12
of the Code of Federal Regulations §9.10(b), having in either case corporate
trust powers, acting in its fiduciary capacity, and a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authorities.  An
Eligible Account will not be evidenced by a certificate of deposit, passbook or
other instrument.


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



 3
 









which funds are held for more than thirty (30) days,
the long term unsecured debt obligations of which are rated at least “AA” by
Fitch and S&P and “Aa2” by Moody’s.


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


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


Eurodollar Rate: with respect to any Interest
Period, an interest rate per annum equal to LIBOR plus the Spread.


Facility End Date:  the
last Business Day to occur in the thirty-fifth Interest Period.


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


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


Guarantor:  Behringer
Harvard Opportunity REIT or any other entity guaranteeing any payment or
performance obligation of Borrower.


Harvard Fund I: 
individually or collectively, Behringer Harvard Short-Term Opportunity
Funds I, L.P., a Texas limited partnership and/or Behringer Harvard Mid-Term
Value Enhancement Fund I, L.P. a Texas limited partnership and/or Behringer
Harvard Strategic Opportunity Fund LLP, a Texas limited partnership, and/or any
other fund for which Behringer Harvard Holdings, LLC, or an Affiliate of it
under its Control, serves as general partner, manager or advisor.


Harvard REIT: 
individually or collectively, the Behringer Harvard Operating
Partnership and/or Behringer Harvard REIT and/or Behringer Harvard Opportunity
REIT, and/or any other fund for which Behringer Harvard Holdings, LLC, or an
Affiliate of it under its Control, serves as general partner, manager or
advisor.


HPT:  HPT
Management Services LP, a Texas limited partnership.


Initial Advance: 
an initial advance of the Loan made on the date hereof in the original
principal amount of $35,115,000.00.


In Place Base Rent and Recoveries:  fixed base rent and recoveries paid by
tenants that have occupied the space covered by their respective leases and
have commenced paying rent and the free rent or rent abatement periods under
such leases have expired, and there



 4
 









are no defaults under such leases (nor does there
exist any event or condition, which with the passage of time or the giving of
notice, or both, could result in such a default).


In Place Debt Service Coverage Ratio:  as of any date, the ratio calculated by
Lender in which:


(a)                                          the
numerator is the Net Operating Income (which shall be computed utilizing the
sum of (i) the current annualized In Place Base Rent and Recoveries (with
adjustments for increases in such amounts occurring within the twelve (12)
month period following the calculation date) and (ii) any other income deemed
recurring by Lender within the twelve (12) month period following the
calculation date) minus annualized expenses per the Approved Annual Budget
(with adjustments, as reasonably determined by Lender), and which such Net
Operating Income and expenses shall be subject to Lender’s DSC Adjustments; and


(b)                                         the
denominator is the aggregate amount of Adjusted Debt Service and Adjusted
Mezzanine Debt Service which would be due and payable for such period.


Interest Period: 
in connection with the calculation of interest accrued with respect to
any specified Payment Date, the period from and including the fifteenth (15th)
day of the prior calendar month to and including the fourteenth (14th) day of
the calendar month in which the applicable Payment Date occurs; provided,
however, that with respect to the Payment Date occurring in June, 2007, the
Interest Period shall be the period commencing on the Closing Date to and
including June 14, 2007.  Each Interest
Period, except for the Interest Period ending June 14, 2007, shall be a full
month and shall not be shortened by reason of any payment of the Loan prior to the
expiration of such Interest Period.


Interest Rate: 
(A) from and including the date of this Agreement through June 14, 2007,
an interest rate per annum equal to 7.07%; and (B) from and including June 15,
2007 and for each successive Interest Period through and including the date on
which the Debt is paid in full, an interest rate per annum equal to (I) the
Eurodollar Rate or (II) the Adjusted Prime Rate, if the Loan begins bearing
interest at the Adjusted Prime Rate in accordance with the provisions of
Section 2.2.3 hereof.


Interest Rate Cap Agreement: the Interest Rate
Cap Agreement  (together with the
confirmation and schedules relating thereto), between SMBC Derivative Products
Limited and Borrower obtained by Borrower and dated as of the date hereof.  The Interest Rate Cap Agreement shall be
written on the then current standard ISDA documentation, and shall provide for
interest periods and calculations consistent with the payment terms of this
Agreement.  After delivery of a
Replacement Interest Rate Cap Agreement to Lender, the term “Interest Rate Cap
Agreement” shall be deemed to mean such Replacement Interest Rate Cap
Agreement.


Key Principal: 
Behringer Harvard Holdings, LLC, a Delaware limited liability company.


Leases: 
all leases and other agreements or arrangements heretofore or hereafter
entered into providing for the use, enjoyment or occupancy of, or the conduct
of any activity upon or in, the Property or the Improvements, including any
guarantees, extensions, renewals,



 5
 









modifications or amendments thereof and all additional
remainders, reversions and other rights and estates appurtenant thereunder.


Leasing Costs: 
tenant improvement and leasing commission obligations under existing
Leases or incurred in connection with the re-leasing of any space at the
Property pursuant to Leases approved by Lender in accordance with Section 5.10
hereof.


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


Lender’s DSC Adjustments:  Lender’s adjustments to projected revenue and
expense items based on each of the following:


(1)                                  a
credit loss/vacancy allowance equal to the greatest of 7.0%, actual vacancy or
market vacancy;


(2)                                  reduction
of above market rents to market as reasonably determined by Lender with the
most recent like-kind leases executed at the subject property being given the
greatest weight in determining market rent;


(3)                                  increases
in expenses from amounts set forth in the Approved Annual Budget as determined
by Lender;


(4)                                  management
fees equal to the greater of actual management fees and 3% of total revenues;


(5)                                  material
increases in future operating expenses as determined by Lender;


(6)                                  an
annual minimum replacement reserve equal to $91,229;


(7)                                  an
annual tenant improvement/leasing costs reserve equal to $342,108; and


(8)                                  the
exclusion of rents and recoveries attributable to space where Borrower has
received notice of tenant’s intention to vacate.


LIBOR: for the first Interest Period 5.32% per
annum.  For each Interest Period
thereafter LIBOR shall mean the quoted offered rate for one-month United States
dollar deposits with leading banks in the London interbank market that appears
as of 11:00 a.m. (London time) on the related LIBOR Determination Date on the
display page designated as Telerate Page 3750.


If, as of such time on any LIBOR Determination Date, no quotation is
given on Telerate Page 3750, then the Lender shall establish LIBOR on such
LIBOR Determination Date by requesting four Reference Banks meeting the
criteria set forth herein to provide the quotation



 6
 









offered by its principal London office for making
one-month United States dollar deposits with leading banks in the London
interbank market as of 11:00 a.m., London time, on such LIBOR Determination
Date.


(i)                                     If
two or more Reference Banks provide such offered quotations, then LIBOR for the
next Interest Period shall be the arithmetic mean of such offered quotations
(rounded upward if necessary to the nearest whole multiple of 1/1,000%).


(ii)                                  If
only one or none of the Reference Banks provides such offered quotations, then
LIBOR for the next Interest Period shall be the Reserve Rate.


(iii)                               If
on any LIBOR Determination Date, Lender is required but is unable to determine
the LIBOR in the manner provided in paragraphs (i) and (ii) above, LIBOR for
the next Interest Period shall be LIBOR as determined on the preceding LIBOR
Determination Date.


All percentages resulting from any calculations of LIBOR referred to in
this Agreement will be carried out to five decimal places and all U.S. dollar
amounts used in or resulting from such calculations will be rounded upwards to
the nearest cent.  The establishment of
LIBOR on each LIBOR Determination Date by the Lender shall be final and
binding, absent manifest error.  Lender
shall use its commercially reasonable efforts to notify Borrower of LIBOR after
LIBOR is determined on each LIBOR Determination Date, provided that any failure
of Lender to so notify Borrower shall not have any effect on Borrower’s
obligation to make the payments required hereunder nor impose any liability on
Lender.


LIBOR Business Day:  a day upon which (i) United States dollar
deposits may be dealt in on the London interbank markets and (ii) commercial
banks and foreign exchange markets are open in London, England and in New York,
New York, USA.


LIBOR Determination Date:  with respect to any Interest Period, the date
that is two (2) LIBOR Business Days prior to the fifteenth (15th) calendar day
of the month in which such Interest Period commenced.


Lien: any mortgage, deed of trust, lien
(statutory or otherwise), pledge, hypothecation, easement, restrictive
covenant, preference, assignment (intended as security), security interest or
any other encumbrance, charge or transfer (intended as security) of, or any
agreement to enter into or create any of the foregoing, on or affecting all or
any part of the Property or any interest therein, or any direct or indirect
interest in Borrower, including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, the filing of any financing statement, and mechanic’s,
materialmen’s and other similar liens and encumbrances.


Loan Documents: 
this Agreement and all other documents, agreements and instruments now
or hereafter evidencing or securing the Loan or pursuant to which any Person
incurs, has incurred or assumes any obligation to or for the benefit of Lender,
or makes any certification, representation or warranty to Lender in connection
with the Loan, including the following, each of which is dated as of the date
hereof:  (i) the Note, (ii) the
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
Filing made by Borrower to a



 7
 









trustee, for the benefit of Lender which covers the
Property (the “Mortgage” or the “Security Instrument”),
(iii) the Assignment of Leases and Rents from Borrower to Lender (the “Assignment of Leases”),
(iv) the Assignment of Agreements, Licenses, Permits and Contracts from
Borrower to Lender, (v) the Clearing Account Agreement among
Borrower, Lender and the Clearing Bank (the “Clearing
Account Agreement”), (vi) the Deposit Account Agreement
among Borrower, Lender, Servicer and the Deposit Bank (the “Deposit Account Agreement”), (vii)
the Guaranty of Recourse Obligations made by Guarantor for the benefit of
Lender, and (viii) the Consent and Subordination of Manager made by Manager and
consented to by Borrower (the “Consent and Subordination”);
as each of the foregoing may be (and each of the foregoing defined terms shall
refer to such documents as they may be) amended, restated, replaced,
supplemented or otherwise modified from time to time (including pursuant to
Section 9.1 hereof).


Loan to Value Ratio:  as of the date of its
calculation, the ratio of (i) the outstanding principal amount of the Loan and
the Mezzanine Loan to (ii) the most recent appraised value (according to the
most recently available appraisal of the Property).


Management Agreement:  the Fourth
Amended and Restated Property Management and Leasing Agreement, pursuant to
which Manager is to manage the Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time in accordance
with Section 5.12.


Manager: 
HPT or any successor, assignee or replacement manager appointed by
Borrower in accordance with Section 5.12.


Market Constant Rate: at the time of any
calculation, an interest rate per annum equal to the greatest of (a) the
Interest Rate then in effect; (b) 7.15%; and (c) the “on-the-run” ten year Treasury Rate plus 100 basis
points.


Material Alteration: any alteration affecting
structural elements of the Property the cost of which exceeds $250,000;
provided, however, that in no event shall (i) any Required Repairs (if
any), (ii) any tenant improvement work performed pursuant to any Lease existing
on the date hereof or entered into hereafter in accordance with the provisions
of this Agreement, (iii) alterations performed as part of a Restoration,
constitute a Material Alteration, or (iv) any Work relating to the Building 800
Work Expenditures or Building 800 Leasing Costs Expenditures.


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


Maximum Loan Amount:  FIFTY-NINE MILLION FIVE HUNDRED THOUSAND AND
00/100 DOLLARS ($59,500,000.00).


Mezzanine Borrower:  Behringer Harvard Santa Clara M, LLC, a
Delaware limited liability company.


Mezzanine Debt Service:  with respect to any particular period, the
scheduled interest payments due under the Mezzanine Note in such period.



 8
 









Mezzanine Event of Default:  the meaning ascribed to the term “Event of
Default” in the Mezzanine Loan Agreement.


Mezzanine Extension Option:  the meaning ascribed to the term “Extension
Option” in the Mezzanine Loan Agreement.


Mezzanine Lender: 
the owner and holder of the Mezzanine Loan.


Mezzanine Loan: 
that certain loan made by Mezzanine Lender to Mezzanine Borrower on the
date hereof pursuant to the Mezzanine Loan Agreement, as the same may be
amended or split pursuant to the terms of the Mezzanine Loan Documents.


Mezzanine Loan Agreement:  that certain Mezzanine Loan Agreement, dated
as of the date hereof, between Mezzanine Borrower and Mezzanine Lender.


Mezzanine Loan Documents:  all documents or instruments evidencing,
securing or guaranteeing the Mezzanine Loan, including without limitation, the
Mezzanine Loan Agreement.


Mezzanine Note: 
that certain Mezzanine Promissory Note, dated as of the date hereof,
given by Mezzanine Borrower to Mezzanine Lender in the maximum principal amount
of TWENTY-MILLION AND 00/100 DOLLARS ($20,000,000.00).


Monthly Debt Service Payment Amount:   the monthly amount
of interest due and payable pursuant to this Agreement and the Note.


Monthly Mezzanine Debt Service Payment Amount:   the monthly amount
of interest due and payable pursuant to the Mezzanine Loan Agreement and the
Mezzanine Note.


Net Liquidation Proceeds After Debt Service:  the meaning set forth in the Mezzanine Loan
Agreement.


Net Operating Income:  for any period, the underwritten net cash
flow of the Property determined by Lender in its sole discretion exercised in
good faith (uniformly and consistently applied in the same manner as Lender
exercises similar discretion in other loans of this type and nature for comparable
properties) in accordance with Lender’s then current underwriting standards for
loans of this type and the then current underwriting standards of the Rating
Agencies.


Note:  that
certain promissory note dated as of even date hereof evidencing the Maximum
Loan Amount.


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


Other Charges: 
all maintenance charges, impositions other than Taxes, and any other
charges, including vault charges and license fees for the use of vaults, chutes
and similar



 9
 









areas adjoining the Property, now or hereafter levied
or assessed or imposed against the Property or any part thereof.


Out-Parcel: 
Building 800 and any other area of the Property as delineated on Exhibit
A attached hereto.


Payment Date: the ninth (9th) day of each calendar month during the
term of the Loan or, if such day is not a Business Day, the immediately
preceding Business Day.  The first
Payment Date hereunder shall be July 9, 2007.


Permitted Encumbrances: (i) the Liens
created by the Loan Documents, (ii) all Liens and other matters disclosed
in the Title Insurance Policy, (iii) Liens, if any, for Taxes or Other
Charges not yet delinquent, (iv) any workers’, mechanics’ or other similar
Liens on the Property provided that any such Lien is bonded or discharged
within 30 days after Borrower first receives notice of such Lien, (v) such
other title and survey exceptions as Lender approves in writing in Lender’s
discretion, and (vi) Liens securing a Mezzanine Loan in accordance with the
Mezzanine Loan Documents.


Permitted Transfers:


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


(ii)                                  a
Permitted Encumbrance;


(iii)                               [intentionally
omitted];


(iv)                              provided
that no Event of Default shall then exist, a Transfer of an indirect interest
in Borrower to any Person (including the Transfer or issuance of publicly
traded shares or of operating partnership units in the Harvard REIT, Behringer
Harvard Opportunity REIT, Harvard Fund I or the Behringer Harvard Operating
Partnership, which shall be permitted whether or not an Event of Default shall
exist) provided that (A) such Transfer shall not (x) cause the transferee
(other than Key Principal), together with its Affiliates, to acquire Control of
Borrower or to increase its indirect interest in Borrower to an amount which
equals or exceeds forty-nine percent (49%) or (y) result in Borrower no longer
being Controlled by Key Principal, (B) Borrower shall give Lender notice of such
Transfer together with copies of all instruments effecting such Transfer not
less than ten (10) days prior to the date of such Transfer (other than with
respect to Transfers of “unit interests” in Harvard Fund I), and (C) the
legal and financial structure of Borrower and its member(s) or partners, as
applicable, and the special purpose nature and bankruptcy remoteness of
Borrower and its member(s) or partners, as applicable, after such Transfer,
shall satisfy Lender’s then current applicable underwriting criteria and
requirements;


(v)                                 provided
that no Event of Default shall then exist, a Transfer of an indirect interest
in Borrower related to or in connection with the estate planning of such
transferor to (1) the spouse, children or grandchildren of such transferor
(and/or any spouse of a child or grandchild), or any other immediate family
member of such transferor, or (2) a trust established for the benefit of any
such parties, provided that (A) such Transfer shall not cause a change in the
Control of Borrower, (B) such Transfer shall not result in a change of the day
to day management and operations of the Property, (C) Borrower shall give
Lender notice of such



 10
 









Transfer together with copies of all instruments
effecting such Transfer not less than ten (10) days after the date of such
Transfer and (D) the legal and financial structure of Borrower, and its
member(s) or partners, as applicable, and the special purpose nature and
bankruptcy remoteness of Borrower and its member(s) or partners, as applicable,
after such Transfer, shall satisfy Lender’s then current applicable
underwriting criteria and requirements;


(vi)                              a
Transfer of an indirect interest in Borrower that occurs by devise or bequest
or by operation of law upon the death of a natural person that was the holder
of such interest to a member of the immediate family of such interest holder or
a trust established for the benefit of such immediate family member, provided
that (A) no such Transfer shall result in a change of the day to day
operations of the Property, (B) Borrower shall give Lender notice of such
Transfer together with copies of all instruments effecting such Transfer not
less than 30 days after the date of such Transfer, (C) Borrower shall
continue to be a Special Purpose Bankruptcy Remote Entity, (D) if any such
Transfer would result in a change of Control of Borrower and occurs prior to
the occurrence of a Secondary Market Transaction, such Transfer is approved by
Lender in writing within thirty (30) days after any such Transfer, and (E) if
any such Transfer would result in a change of Control of Borrower and occurs
after the occurrence of a Secondary Market Transaction, Borrower, at Borrower’s
sole cost and expense, shall, within thirty (30) days after any such Transfer,
(a) deliver (or cause to be delivered) (x) a Rating Comfort Letter to
Lender, and (y) a substantive non-consolidation opinion to Lender and the
Rating Agencies with respect to such Borrower and such transferee in form and
substance satisfactory to Lender and the Rating Agencies, (b) obtain the
prior written consent of Lender which shall not be unreasonably withheld, and
(c) reimburse Lender for all reasonable expenses incurred by Lender in
connection with such Transfer; or


(vii)                           the
pledge of any interest in Borrower in connection with the Mezzanine Loan and
the exercise of any rights or remedies that Mezzanine Lender may have under the
Mezzanine Loan Documents, as applicable.


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


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


Prime Rate: 
on a particular date, a rate per annum equal to the rate of interest
published in The Wall Street Journal
as the “prime rate”, as in effect on such day, with any change in the prime
rate resulting from a change in said prime rate to be effective as of the date
of the relevant change in said prime rate; provided, however, that if more than
one prime rate is published in The
Wall Street Journal for a day, the average of the prime rates shall be
used; provided, further, however, that the Prime Rate (or the average of the
prime rates) will be rounded to the nearest 1/16 of 1% or, if there is no
nearest 1/16 of 1%, to the next higher 1/16 of 1%.  In the event that The Wall Street Journal should cease or temporarily interrupt publication,



 11
 









then the Prime Rate shall mean the daily average prime
rate published in another business newspaper, or business section of a
newspaper, of national standing chosen by Lender.  If The
Wall Street Journal resumes publication, the substitute index will
immediately be replaced by the prime rate published in The Wall Street Journal. 
In the event that a prime rate is no longer generally published or is
limited, regulated or administered by a governmental or quasi-governmental
body, then Lender shall select a comparable interest rate index which is
readily available to Borrower and verifiable by Borrower but is beyond the
control of Lender.  Lender shall give
Borrower prompt written notice of its choice of a substitute index and when the
change became effective.  Such substitute
index will also be rounded to the nearest 1/16 of 1% or, if there is no nearest
1/16 of 1%, to the next higher 1/16 of 1%. 
The determination of the Prime Rate by Lender shall be conclusive and
binding absent manifest error.


Prime Rate Spread:  the difference (expressed as the number of
basis points, whether negative or positive) between (a) LIBOR plus the Spread
on the date LIBOR was last applicable to the Loan and (b) the Prime Rate on the
date that LIBOR was last applicable to the Loan.


Principal: 
the outstanding principal balance of the Loan.


Pro Forma Debt Service Coverage Ratio:  as of any date, the ratio calculated by
Lender in which:


(a)                                          the
numerator is the Net Operating Income (which shall be computed utilizing the pro
forma gross potential revenue of the Property (including giving credit for
rents to be due and payable under all Leases approved in accordance with the
terms hereof during the twelve (12) month period following the calculation
date) (as reasonably determined by Lender) minus annualized expenses per the
Approved Annual Budget (with adjustments, as reasonably determined by Lender),
and which such Net Operating Income and expenses shall be subject to Lender’s
DSC Adjustments; and


(b)                                         the
denominator is the aggregate amount of Adjusted Debt Service and Adjusted
Mezzanine Debt Service which would be due and payable for such period.


Property: 
the parcel of real property and Improvements thereon owned or leased by
Borrower and encumbered by the Mortgage; together with all rights pertaining to
such real property and Improvements, and all other collateral for the Loan as
more particularly described in the granting clauses of the Mortgage and
referred to therein as the “Property”. 
The Property is commonly known as Hitachi Data Systems Campus, Santa
Clara, California.


Qualifying Sub-Manager:  a sub-manager of the Property which (a) is a
reputable management company having at least five (5) years’ experience in the
management of commercial properties with similar uses as the Property and in
the jurisdiction in which the Property is located, (b) has, for at least five
(5) years prior to its engagement as sub-manager, managed at least five (5)
properties of the same property type as the Property, (c) at the time of its engagement
as sub-manager manages at least 1,000,000 square feet of office space, and (d)
is not the subject of a bankruptcy or similar insolvency proceeding.



 12















Rating Agency: 
each of Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. (“S&P”),
Moody’s Investors Service, Inc. (“Moody’s”),
and Fitch, Inc., a division of Fitch Ratings Ltd. (“Fitch”),
or any other nationally-recognized statistical rating organization to the
extent any of the foregoing have been engaged by Lender or its designee in
connection with or in anticipation of any Secondary Market Transaction.


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


Reference Bank: a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market
that has an established place of business in London.  If any such Reference Bank should be removed
from the Telerate Page 3750 or in any other way fail to meet the qualifications
of a Reference Bank, Lender may designate alternative Reference Banks meeting
the criteria specified above.


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


Replacement Interest Rate Cap Agreement:  an interest rate cap agreement from an
Acceptable Counterparty with terms identical to the Interest Rate Cap Agreement
with a termination date no earlier than (i) the Stated Maturity Date, or (ii)
if the Loan is extended pursuant to the terms hereof, the applicable Extended
Maturity Date.


Reserve Rate: 
the rate per annum which Lender determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
1/1,000%) of the one-month United States dollar lending rates that at least
three major New York City banks selected by Lender are quoting, at 11:00 a.m.
(New York time) on the relevant LIBOR Determination Date, to the principal
London offices of at least two of the Reference Banks, or (ii) in the event
that at least two such rates are not obtained, the lowest one-month United
States dollar lending rate which New York City banks selected by Lender are
quoting as of 11:00 a.m. (New York time) on such LIBOR Determination Date to
leading European banks.



 13
 









Secondary Market Transaction:  a sale, assignment, participation and/or
Securitization of the Loan.


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


Spread:  (i)
with respect to the Initial Advance, one and three quarters percent (1.75%) per
annum and (ii) with respect to each Additional Advance, one and three quarters
percent (1.75%) per annum.


Spread Maintenance Premium:  with respect to any repayment of the
outstanding principal amount of the Loan prior to June 14, 2008, a payment to
Lender in an amount (without duplication of any Interest Shortfall) equal to
the sum of each future installment of interest that would be payable under the
Note on the outstanding principal amount of the Loan from the date of such
prepayment through and including June 14, 2008 assuming an interest rate equal
to the Spread, discounted at an interest rate per annum equal to LIBOR as of
the date of such repayment.


State: the state in which the Property is
located.


Stated Maturity Date:  June 9, 2010, as such date may be extended
pursuant to the terms hereof.


Sub-Manager: 
CBRE or any successor, assignee or replacement sub-manager appointed by
Borrower in accordance with Section 5.12.


Sub-Management Agreement:  the Property
Management Subcontract, between HPT and CBRE, pursuant to which CBRE is to
sub-manage the Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time in accordance with Section
5.12.


Strike Rate: 
(i) 6% for the initial term of the Loan; and (ii) with respect to each
Extension Period, the greater of (A) 6% and (B) the highest strike rate, as
determined by Lender at the commencement of each such Extension Period, which
rate when added to the applicable Spread (as defined herein and the
Mezzanine Loan Agreement) would result in an In Place Debt Service
Coverage Ratio on the then outstanding principal balances of the Loan and
the Mezzanine Loan of 1.00:1.00 (assuming that the aggregate amount of
Adjusted Debt Service and Adjusted Mezzanine Debt Service for purposes of
calculating such In Place Debt Service Coverage Ratio would be due at such
Strike Rate plus the applicable Spread); provided, however, Borrower may obtain
an Interest Rate Cap Agreement with a strike rate lower than the strike rate as
determined above and such lower strike rate shall be deemed the “Strike Rate”
for all purposes hereunder; provided, further, however, that the Strike Rate on
the Interest Rate Cap Agreement and the Mezzanine Interest Rate Cap Agreement
shall be the same.


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



 14
 









Telerate Page 3750:  the display designated as page 3750 on the
Dow Jones Telerate Service (or such other page as may replace page 3750 on that
service or such other service as may be nominated by the British
Bankers-Association as the information vendor
for the purposes of displaying British Bankers-Association Interest Settlement
Rates for U.S. dollar deposits).


Term:  the
entire term of this Agreement, which shall expire upon repayment in full of the
Debt and full performance of each and every obligation to be performed by
Borrower pursuant to the Loan Documents (other than surviving indemnity
obligations with respect to matters as to which no claim for indemnification is
then pending).


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


Transfer: 
any sale, conveyance, transfer, lease or assignment, or the entry into
any agreement to sell, convey, transfer, lease or assign, whether by law or
otherwise, of, on, in or affecting (i) all or part of the Property
(including any legal or beneficial direct or indirect interest therein) or
(ii) any direct or indirect interest in Borrower (including any profit
interest).


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


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


Work: 
capital improvements, replacements, repairs and alterations.


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


“Acquired Property” – 6.3.6


“Acquired Property Statements” – 6.3.6


“Act” – Schedule 5


“Annual Budget” - 6.3.5


“Applicable Taxes” - 2.2.5


“Approved Annual Budget” - 6.3.5


“Award” - 7.3.2


“Bankruptcy Act” – 5.35


“Bankruptcy Proceeding” - 4.7


“Borrower’s Recourse Liabilities” - 10.1(a)


“Breakage Costs” – 2.2.3(d)


“Building 800 Leasing Costs Expenditures” – 2.1.4


“Building 800 Work Expenditures” – 2.1.4


“Cash Management Accounts” - 3.9


“Casualty” - 7.2.1


“Casualty/Condemnation Prepayment” - 2.3.2


“Casualty/Condemnation Subaccount” - 3.6



 15
 









“Citigroup” – 9.2(b)


“Citigroup Group” – 9.2(b)


“Clearing Account” - 3.1


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


“Clearing Bank” - 3.1


“Condemnation” - 7.3.1


“Consent and Subordination” - 1.1 (Definition of
Loan Documents)


“Deposit Account” - 3.1


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


“Disclosure Document” - 9.2(a)


“Easements” - 4.14


“Election” – 5.35


“Environmental Laws” - 4.21


“Equipment” - Mortgage


“Event of Default” - 8.1


“Exchange Act” - 9.2(a)


“Exchange Act Filing” - 9.2(a)


“Extended Maturity Date” - 2.2.1(b)


“Extension Option” – 2.2.1(b)


“Extension Period” – 2.2.1(b)


“First Extension Option” – 2.2.1(b)


“Fitch” - 1.1 (Definition of Rating Agency)


“Hazardous Substances” - 4.21


“Improvements” - Mortgage


“Indemnified Liabilities” - 5.30


“Indemnified Party” - 5.30


“Independent Director” - Schedule 5


“Insolvency Action” – 10.1(b)


“Insurance Premiums” - 7.1.2


“Insured Casualty” - 7.2.2


“Intercreditor Agreement” – 9.4


“Interest Shortfall” – 2.3.4(b)


“Late Payment Charge” - 2.5.3


“Lender’s Consultant” - 5.8.1


“Lender’s Losses” – 10.1(a)


“Liabilities” – 9.2(b)


“Licenses” - 4.11


“Loan” - 2.1


“Maximum Additional Advance Amount” – 2.1.2


“Mezzanine Loan Subaccount” – 3.5


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


“Mortgage” - 1.1 (Definition of Loan Documents)


“New Payment Date” – 2.2.6


“Notice” - 6.1


“OFAC” – 5.33


“Offering Document Date” – 6.3.6



 16
 









“Out-Parcel Release” – 2.4.1


“Permitted Indebtedness” - 5.22


“Permitted Investments” - Deposit Account Agreement


“Policies” - 7.1.2


“Prepayment Date” – 2.3.4


“Prepayment Notice” - 2.3.4


“Proceeds” - 7.2.2


“Proposed Lease” - 5.10.2


“Provided Information” - 9.1


“Qualified Carrier” - 7.1.1(j)


“Registration Statement” – 9.2(b)


“Remaining Parcel” – 2.4.1(g)


“Remedial Work” - 5.8.2(c)


“Rent Roll” - 4.16


“Replacement Reserve Fund” – 3.13.1


“Replacement Reserve Subaccount” – 3.13.1


“Replacements” – 3.13.1


“Required Repairs” – 3.2


“Restoration” - 7.4.1


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


“Second Extension Option” – 2.2.1(b)


“Securities” - 9.1


“Securities Act” - 9.2(a)


“Securitization” – 9.1


“Security Deposit Subaccount” - 3.7


“Security Instrument” - 1.1 (Definition of Loan
Documents)


“Significant Casualty” - 7.2.2


“Single Member Bankruptcy Remote LLC” – Schedule 5


“SNDA” – 5.10.4


“Sole Member” – Schedule 5


“Special Member” – Schedule 5


“Special Purpose Bankruptcy Remote Entity” –
Schedule 5


“Springing Recourse Event” - 10.1(b)


“Standard Statements” – 6.3.6


“Subaccounts” - 3.1


“Tax and Insurance Subaccount” - 3.3


“Tenant Improvement Funds” – 3.12


“Tenant Improvement Reserve Subaccount” – 3.12


“Third Party Report” – 9.2(f)


“TI Leases” – 3.12


“Toxic Mold” - 4.21


“Underwriter Group” – 9.2(b)


1.3                               Principles
of Construction.  Unless
otherwise specified, (i) all references to sections and schedules are to
those in this Agreement, (ii) the words “hereof,” “herein” and “hereunder”
and words of similar import refer to this Agreement as a whole and not to any



 17
 









particular provision, (iii) all
definitions are equally applicable to the singular and plural forms of the
terms defined, (iv) the word “including” means “including but not limited
to,” and (v) accounting terms not specifically defined herein shall be
construed in accordance with GAAP.


2.                                      GENERAL
LOAN TERMS


2.1                               Loan
Commitment; Disbursement to Borrower.


2.1.1                     Agreement
to Lend and Borrow.


Subject to and upon the terms and conditions set forth herein, Lender
hereby agrees to make and Borrower hereby agrees to accept the Initial Advance
of the Loan on the Closing Date.


2.1.2                     Additional
Advances.


Subject to and upon the terms and conditions herein set forth, Lender
agrees, at any time and from time to time on or after the Closing Date and to
and including the Facility End Date, to make Additional Advances to Borrower,
which Additional Advances shall not exceed $24,385,000.00 in the aggregate (the
“Maximum Additional Advance Amount”).  Any amount borrowed and repaid hereunder in
respect of the Loan (or any portion thereof comprising an Additional Advance)
may not be reborrowed.


2.1.3                     Limitation
on Additional Advances.


Each Additional Advance shall be used solely to pay for the Building
800 Work Expenditures and the Building 800 Leasing Costs Expenditures.  No Additional
Advance shall be made after the Facility End Date.  There shall be no more than one (1)
Additional Advance made in any calendar month.


2.1.4                     Request
for Additional Advances; Conditions Precedent.


(a)                          Subject
to and upon the terms and conditions herein set forth, Lender agrees, at any
time and from time to time on or after the Closing Date and to and including
the Facility End Date, to make Additional Advances to Borrower, which
Additional Advances shall not exceed: $4,000,000.00 in the aggregate for the
purpose of paying the actual costs of (or reimbursing Borrower for) Work
relating to the outfitting of Building 800 for tenant occupancy (the “Building 800 Work Expenditures”);
and $20,385,000 in the aggregate for the purpose of paying the actual costs of
(or reimbursing Borrower for) Leasing Costs relating to Leases of space in
Building 800 which have been approved in accordance with the terms hereof (the “Building 800 Leasing Costs Expenditures”).  Each Additional Advance shall be considered
added to the unpaid principal balance of the Loan as of the day such Additional
Advance is made for purposes of Borrower’s payment obligations under this
Agreement, and repayment thereof, together with interest thereon at the
Interest Rate and shall be secured by the Mortgage and other collateral given
for the Loan.


(b)                         [Intentionally
Omitted]



 18
 









(c)                          Lender
shall make Additional Advances to Borrower for Building 800 Work Expenditures
and Building 800 Leasing Costs Expenditures upon satisfaction of the following
conditions:


(1)                                  Borrower
shall submit to Lender a request for an Additional Advance in the same manner
required with respect to disbursements from the Replacement Reserve Subaccount
(with respect to Building 800 Work Expenditures) and the Tenant Improvement
Reserve Subaccount (with respect to Building 800 Leasing Costs Expenditures).


(2)                                  No
Event of Default shall have occurred and be continuing (on the date of the
request for the Additional Advance and on the date the disbursement is actually
made).


(3)                                  With
respect to Building 800 Leasing Costs Expenditures, Borrower shall satisfy all
requirements for a disbursement from the Tenant Improvement Reserve Subaccount
as set forth in Section 3.12 of this Agreement, as if such Additional Advance
was a disbursement from the Tenant Improvement Reserve Subaccount.


(4)                                  With
respect to Building 800 Work Expenditures, Borrower shall satisfy all requirements
for a disbursement from the Replacement Reserve Subaccount as set forth in
Section 3.13 of this Agreement, as if such Additional Advance was a
disbursement from the Replacement Reserve Subaccount.


(5)                                  Borrower
shall not submit a request for, and Lender shall not be required to make, more
than one (1) Additional Advance during any calendar month.


(6)                                  No
request for an Additional Advance shall be in an amount less than $250,000.00.


(7)                                  With
respect to all Building 800 Leasing Costs Expenditures, the Pro Forma Debt
Service Coverage Ratio shall be equal to or greater than 1.25:1.00 and the Loan
to Value Ratio shall be equal to or less than 74.5%.


(8)                                  In
the event that the then-outstanding principal balance of the Loan (after giving
effect to the making of the Additional Advance) is greater than the combined
notional amounts of all Interest Rate Cap Agreements previously delivered to
Lender in accordance with the terms hereof, Borrower shall have delivered to
Lender a fully executed supplemental Interest Rate Cap Agreement, and Borrower
shall have delivered to Lender an Assignment of Interest Rate Cap with respect
to such Interest Rate Cap Agreement.  The
Interest Rate Cap Agreement delivered pursuant to this subsection (8) shall (i)
be effective through the end of the current Loan Term, (2) have a notional
amount (when added to the combined notional amounts of any Interest Rate Cap
Agreements previously delivered to Lender in accordance with the terms hereof)
not less than the outstanding principal balance of the Loan (after giving
effect to the making of the Additional Advance), (iii) provide for payments to
be made by the Counterparty if, at any time during the term of the Loan, the
LIBOR Rate exceeds the Strike Rate and (iv) otherwise satisfy all requirements
of Section 2.6 hereof.



 19
 









(9)                                  If
the insured amount under the Title Insurance Policy is less than the amount of
the then-outstanding principal balance of the Loan (after giving effect to the
funding of the Additional Advance), Borrower shall deliver to Lender a Title
Insurance Policy or endorsement thereto with respect to such Additional Advance
in form and substance reasonably satisfactory to Lender, redating the date of
such policy and insuring the priority of the lien of the Mortgage subject only to
Permitted Encumbrances in the amount of the then-outstanding principal balance
of the Loan (after giving effect to the funding of the Additional Advance).


(10)                            Prior
to each Additional Advance by Lender to Borrower pursuant to this Agreement for
Building 800 Work Expenditures or Building 800 Leasing Costs Expenditures,
Borrower shall, upon request of Lender, furnish Lender with evidence reasonably
satisfactory to Lender showing payment of all bills and charges for the
Building 800 Work Expenditures or Building 800 Leasing Costs Expenditures paid
for with the immediately prior Additional Advance made pursuant to this
Agreement.  Borrower shall also deliver
to Lender, upon request, such bills, receipts, invoices and other evidence as
may reasonably be required by Lender to substantiate the actual incurrence by
Borrower of Building 800 Work Expenditures or Building 800 Leasing Costs
Expenditures to be paid or reimbursed by the requested Additional Advance
(including the actual incurrence of the obligation to make a payment to a
tenant pursuant to the terms of the applicable Lease).


(11)                            Borrower
shall have paid all out-of-pocket costs and expenses incurred by Lender in
connection with the Additional Advance.


(12)                            Lender
shall have received evidence that the cost of any Building 800 Work
Expenditures or Building 800 Leasing Costs Expenditures partially paid for or
partially reimbursed by the immediately prior requested Additional Advance
shall have been paid in full by Borrower.


(13)                            Borrower
shall have delivered to Lender such other documentation that Lender in its
reasonable discretion may require in connection with the Additional Advance.


(d)                         Performance
and completion of the Work relating to the Building 800 Work Expenditures shall
be subject to all requirements and conditions forth in Section 3.13, and
performance and completion of the Work relating to the Building 800 Leasing
Costs Expenditures shall be subject to all requirements and conditions forth in
Section 3.12.  Should an Event of Default
occur as a result of Borrower’s failure to perform (and/or pay for, as
applicable) the Building 800 Work Expenditures and Building 800 Leasing Costs
Expenditures, then, in addition to all of Lender’s rights and remedies, Lender
shall have the right to advance a portion or all of the unadvanced Maximum
Additional Advance Amount and use such funds to complete (and/or pay for, as
applicable) the Building 800 Work Expenditures and Building 800 Leasing Costs
Expenditures (but Lender shall not be obligated to do so).



 20
 









(e)                          Upon
the satisfaction of each of the conditions precedent to the Additional Advance,
Lender shall disburse, in accordance with this Section 2.1.4, the amount
requested in the Borrower’s written request to Lender for such Additional
Advance.


(f)                            Notwithstanding
any provision of this Agreement to the contrary, Lender shall not be obligated
to advance any surplus to Borrower of the Additional Advances after full
payment of the Building 800 Work Expenditures and the Building 800 Leasing
Costs Expenditures.


(g)                         Borrower
shall permit Lender and Lender’s agents and representatives to enter onto the
Property to inspect the progress of any Work relating to the Building 800 Work
Expenditures and Building 800 Leasing Costs Expenditures and all materials
being used in connection therewith and to examine all plans and shop drawings
relating to such Work which are or may be kept at the Property.  Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender’s agents and representatives
in connection with inspections described in this subsection (g).


(h)                         Lender
shall have no obligation to advance any Additional Advance at any time during
which an Event of Default exists.  The
making of any Additional Advance by Lender at the time when an Event of Default
has occurred and is then continuing shall not be deemed a waiver or cure by
Lender of that Event of Default, nor shall Lender’s rights and remedies by
prejudiced in any manner thereby.  Any
amount borrowed and repaid hereunder in respect of the Loan (or any portion
thereof comprising an Additional Advance) may not be reborrowed.


Lender’s obligations to perform in accordance with this Section 2.1.4
and to make any Additional Advance in accordance with the terms and provisions
of this Agreement are an independent contract made by Lender to Borrower
separate and apart from any other obligation of Lender to Borrower under the
other provisions of this Agreement and the other Loan Documents.  The obligations of Borrower under this
Agreement and the other Loan Documents shall not be reduced, discharged or
released because or by reason of any existing or future offset, claim or
defense of Borrower, or any other party, against Lender by reason of Lender’s
failure to perform its obligations under this Section 2.1.4.


2.1.5                     Disbursement
of Additional Advances.


No later than 2:00 p.m., New York City time, on the Payment Date
specified by Borrower in its request for any Additional Advance, provided all
Additional Advance conditions precedent to the making of such Additional
Advance have been satisfied by Borrower or waived by Lender, Lender will make
such Additional Advance pursuant to the terms hereof in accordance with the
wire instructions provided by Borrower.


2.1.6                     Repayment
in Full.


In the event the then outstanding principal balance of the Loan has
been repaid in full, Borrower’s right to receive any future Additional Advances
shall automatically terminate, and upon such termination, Borrower shall have
no right to reinstate Lender’s obligation to make any future Additional
Advances.



 21
 









2.1.7                     Intentionally
Omitted.


2.1.8                     The Note,
Mortgage and Loan Documents.


The Loan shall be evidenced by the Note and secured by the Mortgage,
the Assignment of Leases and the other Loan Documents.


2.1.9                     Use of
Proceeds.


Borrower shall use the proceeds of the Loan to (a) [intentionally
omitted], (b) repay and discharge any existing loans (secured, mezzanine or
otherwise) relating to the Property, (c) pay all past due Basic Carrying Costs,
if any, with respect to the Property, (d) make deposits into the Reserve Funds
on the Closing Date in the amounts provided herein or in the other Loan
Documents, (e) pay costs and expenses incurred in connection with the
refinancing of the Property, (f) pay costs and expenses incurred in connection
with the closing of the Loan, as approved by Lender, or (g) fund any working
capital requirements of the Property. 
The balance, if any, shall be distributed to Borrower.


2.2                               Interest;
Loan Payments; Late Payment Charge.


2.2.1                     Payments.


(a)                                  Interest.  Interest on the outstanding principal balance
of the Loan shall accrue from the Closing Date to the end of the Interest
Period in which the Maturity Date occurs at the Interest Rate.  Monthly installments of interest only shall
be paid on each Payment Date commencing on July 9, 2007 and on each subsequent Payment Date thereafter up
to and including the Maturity Date for the Interest Period in which such
Payment Date or Maturity Date 
occurs.  Interest on the
outstanding principal amount of the Loan for the period through and including
June 14, 2007 shall be
paid by Borrower on the Closing Date. 
The outstanding principal balance of the Loan together with all accrued
and unpaid interest thereon  shall be due and payable on the Maturity Date,
including, without limitation, all interest that would accrue on the
outstanding principal balance of the Loan through the end of the Interest
Period in which the Maturity Date occurs (even if such period extends beyond
the Maturity Date).


(b)                                 Extension
of the Maturity Date.  Borrower shall
have the option to extend the term of the Loan beyond the initial Maturity Date
for two (2) successive terms (each, an “Extension
Option”) of one (1) year each (each, an “Extension Period”) to (y) the Payment Date occurring in
June, 2011 (the “First
Extension Option”) and (z) the Payment Date occurring in June,
2012 (the “Second Extension Option”)
(each such date, the “Extended
Maturity Date”), respectively, and, as to each Extension Option,
upon satisfaction of the following terms and conditions:


(1)                                  no
Event of Default shall have occurred and be continuing at the time the
applicable Extension Option is exercised and on the date that the applicable
Extension Period is commenced;



 22
 









(2)                                  Borrower
shall notify Lender of its irrevocable election to extend the Maturity Date as
aforesaid not earlier than one hundred twenty (120) days and no later than
sixty (60) days prior to the then applicable Maturity Date;


(3)                                  Borrower
shall obtain and deliver to Lender on or prior to the commencement of each such
Extension Period, one or more Replacement Interest Rate Cap Agreements, which
Replacement Interest Rate Cap Agreements shall be effective commencing on the
first day of such Extension Option and shall have a maturity date not earlier
than the next succeeding Extended Maturity Date;


(4)                                  in
connection with each Extension Option, Borrower shall have delivered to Lender
together with its notice pursuant to subsection (b)(2) of this Section 2.2.1
and as of the commencement of the applicable Extension Option, an Officer’s
Certificate in form reasonably acceptable to the Lender certifying that each of
the representations and warranties of Borrower contained in the Loan Documents
is true, complete and correct in all material respects as of the date of such
Officer’s Certificate except to the extent such representations and warranties
are matters which by their nature can no longer be true and correct as a result
of the passage of time;


(5)                                  the In Place Debt Service Coverage Ratio is
at least 1.00:1.00;


(6)                                  [Intentionally Omitted]; and


(7)                                  the
Mezzanine Extension Option corresponding to the applicable Extension Period
shall have been exercised in accordance with the terms of the Mezzanine Loan
Agreement.


(c)                                  All
references in this Agreement and in the other Loan Documents to the Maturity
Date shall mean the applicable Extended Maturity Date in the event the
applicable Extension Option is exercised.


(d)                                 All
payments and other amounts due under the Note, this Agreement and the other
Loan Documents shall be made without any setoff, defense or irrespective of,
and without deduction for, counterclaims.


2.2.2                     Interest Calculation.  Interest on the outstanding principal balance
of the Loan shall be calculated by multiplying (a) the actual number of days
elapsed in the period for which the calculation is being made by (b) a daily
rate equal to the Interest Rate divided by three hundred sixty (360) by (c) the
outstanding principal balance.


2.2.3                     Eurodollar Rate
Unascertainable; Illegality; Increased Costs.


(a)                                  (i)  In the event that Lender shall have
determined (which determination shall be conclusive and binding upon Borrower
absent manifest error) that by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for ascertaining LIBOR,
then Lender shall forthwith give notice by telephone of such determination, to
Borrower at least one (1) Business Day prior to the last day of the related
Interest Period, with a written confirmation of such determination promptly
thereafter.  If such



 23
 









notice is given, the Loan shall bear interest
at the Adjusted Prime Rate beginning on the first day of the next succeeding
Interest Period. (ii) If, pursuant to the terms of this Section 2.2.3(a),  the Loan is bearing interest at the Adjusted
Prime Rate and Lender shall determine (which determination shall be conclusive
and binding upon Borrower absent manifest error) that the event(s) or
circumstance(s) which resulted in such conversion shall no longer be
applicable, Lender shall give notice thereof to Borrower by telephone of such
determination, confirmed in writing, to Borrower as soon as reasonably
practical, but in no event later than one (1) Business Day prior to the last
day of the then current Interest Period. 
If such notice is given, the Loan shall bear interest at the Eurodollar
Rate beginning on the first day of the next succeeding Interest Period.  Notwithstanding any provision of this
Agreement to the contrary, in no event shall Borrower have the right to elect
to have the Loan bear interest at either the Eurodollar Rate or the Adjusted
Prime Rate.


(b)                                 If
any requirement of law or any change therein or in the interpretation or
application thereof, shall hereafter make it unlawful for Lender in good faith
to make or maintain the portion of the Loan bearing interest at the Eurodollar
Rate, (I) the obligation of Lender hereunder to make the Loan bearing interest
at the Eurodollar Rate shall be canceled forthwith and (II) the Loan shall
automatically bear interest at the Adjusted Prime Rate on the next succeeding
Payment Date or within such earlier period as required by Applicable Law.  Borrower hereby agrees promptly to pay Lender
(within ten (10) days of Lender’s written demand therefor), any additional
amounts necessary to compensate Lender for any reasonable costs incurred by
Lender in making any conversion in accordance with this Agreement, including,
without limitation, any interest or fees payable by Lender to lenders of funds
obtained by it in order to make or maintain the Loan hereunder.  Upon written demand from Borrower, Lender
shall demonstrate in reasonable detail the circumstances giving rise to Lender’s
determination and the calculation substantiating the Adjusted Prime Rate and
any additional costs incurred by Lender in making the conversion.  Lender’s written notice of such costs, as
certified to Borrower, shall be conclusive absent manifest error.


(c)                                  In
the event that any change in any requirement of any Applicable Law or in the
interpretation or application thereof, or compliance in good faith by Lender
with any request or directive (whether or not having the force of law)
hereafter issued from any Governmental Authority which is generally applicable
to all Lenders subject to such Governmental Authority’s jurisdiction:


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


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



 24
 









(3)                                  shall,
if the Loan is then bearing interest at the Eurodollar Rate, hereafter impose
on Lender any other condition, the result of which is to increase the cost to
Lender of making, renewing or maintaining loans or extensions of credit or to
reduce any amount receivable hereunder;


then, in any such case, Borrower shall promptly pay
Lender (within ten (10) days of Lender’s written demand therefor), any
additional amounts necessary to compensate Lender for such additional cost or
reduced amount receivable which Lender deems to be material.  If Lender becomes entitled to claim any
additional amounts pursuant to this Section 2.2.3(c), Lender shall provide
Borrower with written notice specifying in reasonable detail the event or circumstance
by reason of which it has become so entitled and the additional amount required
to fully compensate Lender for such additional cost or reduced amount.  A certificate as to any additional costs or
amounts payable pursuant to the foregoing sentence submitted by Lender to
Borrower shall be conclusive absent manifest error.  This provision shall survive payment of the
Note and the satisfaction of all other obligations of Borrower under the Note,
this Agreement and the other Loan Documents.


(d)                                 Borrower
agrees to indemnify Lender and to hold Lender harmless from any loss or expense
which Lender sustains or incurs as a consequence of (I) any default by Borrower
in payment of the principal of or interest on the Loan while bearing interest
at the Eurodollar Rate, including, without limitation, any such loss or expense
arising from interest or fees payable by Lender to lenders of funds obtained by
it in order to maintain the Eurodollar Rate, (II) any prepayment (whether
voluntary or mandatory) of the Loan on a day that is not a Payment Date,
including, without limitation, such loss or expense arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain
the Eurodollar Rate hereunder and (III) the conversion (for any reason
whatsoever, whether voluntary or involuntary) of the Interest Rate from the
Eurodollar Rate to the Adjusted Prime Rate with respect to any portion of the
outstanding principal amount of the Loan then bearing interest at the
Eurodollar Rate on a date other than the Payment Date immediately following the
last day of an Interest Period, including, without limitation, such loss or
expenses arising from interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain the Eurodollar Rate  hereunder (the amounts referred to in clauses
(I), (II) and (III) are herein referred to collectively as the “Breakage Costs”).  This provision shall survive payment of the
Note and the satisfaction of all other obligations of Borrower under this
Agreement and the other Loan Documents.


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


2.2.5                     Taxes.  Any and all payments by Borrower hereunder
and under the other Loan Documents shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on Lender’s income, and franchise taxes imposed on Lender by the
law or regulation of any Governmental Authority (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to in this Section 2.2.5 as “Applicable Taxes”). 
If Borrower shall be required by law to deduct any



 25
 









Applicable Taxes from or in respect of any
sum payable hereunder to Lender, the following shall apply:  (i) the sum payable shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.2.5), Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions and
(iii) Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.  Payments pursuant to this Section 2.2.5 shall
be made within ten days after the date Lender makes written demand
therefor.  If the amounts payable
hereunder relate to Applicable Taxes which are not of general application to
lending institutions making secured mortgage loans at such time, Borrower shall
have the option to prepay the Loan in full without any Spread Maintenance
Premium unless Lender, at its option, elects not to require Borrower to pay
such Applicable Taxes pursuant to this Section 2.2.5.  Notwithstanding the foregoing, if the Loan is
transferred to a transferee which is organized under the laws of any
jurisdiction other than the United States of America or any state thereof, the
transferor shall cause such transferee, concurrently with the effectiveness of
such transfer, to furnish to the transferor and Borrower either a United States
Internal Revenue Service Form 4224 or United States Internal Revenue Service
Form 1001 (wherein such transferee claims entitlement to complete exemption
from United States federal withholding tax on all interest payments hereunder);
provided, however, that in the event that the transferor fails to cause the
transferee to furnish either such Form, Borrower shall deduct any Applicable
Taxes to the extent required by law and payments shall be made net of any
Applicable Taxes without regard to the provisions of clause (i) of the
second sentence of this Section 2.2.5.


2.2.6                     New
Payment Date.  Lender shall have the right, to be exercised
not more than once during the term of the Loan, to change the Payment Date to a
date other than the ninth day of each month (a “New Payment Date”), on 30 days’ written notice to
Borrower; provided, however, that any such change in the Payment Date: (i)
shall not modify the amount of regularly scheduled monthly interest payments,
except that the first payment of interest payable on the New Payment Date shall
be accompanied by interest at the interest rate herein provided for the period
from the Payment Date in the month in which the New Payment Date first occurs
to the New Payment Date, and (ii) shall extend the Stated Maturity Date to the
New Payment Date occurring in the month set forth in the definition of Stated
Maturity Date.


2.3                               Loan
Repayment.


2.3.1                     Repayment.  Borrower shall repay the entire outstanding
principal balance of the Note in full on the Maturity Date, together with
interest thereon to (but excluding) the date of repayment and any other amounts
due and owing under the Loan Documents. 
Borrower shall have no right to prepay all or any portion of the
Principal except in accordance with Section 2.2.5, Section 2.3.2, Section
2.3.4, Section 2.4 and Section 7.4.2 hereof. 
Except during the continuance of an Event of Default, all proceeds of
any repayment, including any prepayments of the Loan, shall be applied by
Lender as follows in the following order of priority:  First, accrued
and unpaid interest at the Interest Rate together with all interest that would
be due through the end of the current Interest Period; Second,
to Principal; and Third, to any other amounts then
due and owing under the Loan Documents. 
If prior to June 14, 2008 the Debt is accelerated by reason of an Event
of Default, then Lender shall be entitled to receive, in addition to the unpaid
Principal and accrued interest and other sums due under the Loan



 26
 









Documents, an amount equal to the Spread
Maintenance Premium.  During the
continuance of an Event of Default, all proceeds of repayment, including any
payment or recovery on the Property (whether through foreclosure, deed-in-lieu
of foreclosure, or otherwise) shall, unless otherwise provided in the Loan
Documents, be applied in such order and in such manner as Lender shall elect in
Lender’s discretion.


2.3.2                     Mandatory
Prepayments.  The Loan is subject
to mandatory prepayment in certain instances of Insured Casualty or
Condemnation (each a “Casualty/Condemnation
Prepayment”), in the manner and to the extent set forth in
Section 7.4.2.  Each
Casualty/Condemnation Prepayment, after deducting Lender’s costs and expenses
(including reasonable attorneys’ fees and expenses) in connection with the
settlement or collection of the Proceeds or Award, shall be applied in the same
manner as repayments under Section 2.3.1, and such Casualty/Condemnation
Payment shall include interest that would have accrued on the Principal prepaid
through the end of the current Interest Period. 
Provided that no Event of Default is continuing, any such mandatory
prepayment under this Section 2.3.2 shall be without the payment of the Spread
Maintenance Premium.  Notwithstanding
anything to the contrary contained herein, each Casualty/Condemnation
Prepayment shall be applied in inverse order of maturity and shall not extend
or postpone the due dates of the monthly installments due under the Note or
this Agreement, or change the amounts of such installments.  In addition, and notwithstanding anything to
the contrary contained herein or in any other Loan Document, provided no Event
of Default is continuing, no Spread Maintenance Premium shall be payable in
connection with any prepayment of the Debt required by Lender under Section 5
or 6 of the Mortgage.


2.3.3                     Intentionally
Omitted.


2.3.4                     Optional
Prepayments.  Borrower may, at
its option, prepay the Loan (i) in whole at any time during the term of the
Loan or, (ii)(A) after June 14, 2008 or (B) in connection with the Out-Parcel
Release pursuant to Section 2.4.1(b) hereof, in part, upon satisfaction of the
following conditions:


(a)                                  Except with respect
to a partial prepayment of the Loan in connection with the Out-Parcel Release,
Borrower shall provide prior written notice (the “Prepayment Notice”) to Lender specifying the date (the “Prepayment Date”) upon which
the prepayment is to be made, which notice shall be delivered to Lender not
less than thirty (30) days prior to such payment; provided, however, that such
notice may be revoked up to ten (10) days prior to the Prepayment Date provided
Borrower pays to Lender all actual out-of-pocket expenses reasonably incurred
by Lender in connection with the Prepayment Notice;


(b)                                 Borrower shall pay to
Lender, simultaneously with such prepayment, (i) all accrued and unpaid
interest calculated at the Interest Rate on the amount of principal being
prepaid through and including the Prepayment Date together with an amount equal
to the interest that would have accrued at the Interest Rate on the amount of
principal being prepaid through the end of the Interest Period in which such
prepayment occurs notwithstanding that such Interest Period extends beyond the
date of prepayment (the “Interest
Shortfall”), (ii) if such prepayment occurs prior to June 14,
2008, the Spread Maintenance Premium; (iii) 



 27
 









Breakage Costs; and (iv) all other sums then due under this Agreement,
the Note or the other Loan Documents;


(c)                                  Mezzanine Borrower
shall have simultaneously with such prepayment made a pro rata prepayment of
the Mezzanine Loan; and


(d)                                 If a Prepayment Notice
is given by Borrower to Lender pursuant to this Section 2.3.4, the amount
designated for prepayment and all other sums required under this Section 2.3.4
shall be due and payable on the Prepayment Date unless the applicable
Prepayment Notice has been revoked in accordance with this Section 2.3.4.


2.4                               Release
of Property.


2.4.1                     Partial
Release.  Provided no Event of
Default has occurred and is continuing, Borrower shall have the right to obtain
a release (an “Out-Parcel Release”)
of the Out-Parcel from the lien of the Mortgage upon compliance with (or waiver
by Lender of) the following terms and conditions:


(a)                                  Borrower
shall give Lender at least thirty (30) days, but no more than ninety (90) days,
prior written notice of its request to obtain an Out-Parcel Release;


(b)                                 Borrower
shall prepay the loan in accordance with Section 2.3.4 on a pro-rata basis with
the Mezzanine Loan, such that the aggregate principal balance of the Loan and
the Mezzanine Loan following the Out-Parcel Release is less than seventy-five
percent (75%) of the value of the remaining Property, as determined by Lender
in its reasonable discretion.  In
connection with any such determination, Lender shall have the right to require
Borrower to deliver at Borrower’s own cost, an updated appraisal of the
remaining Property in form and substance reasonably acceptable to Lender;


(c)                                  The
Pro Forma Debt Service Coverage Ratio for the Property following the Out-Parcel
Release shall be greater than 1.20:1.00 (after giving effect to any prepayments
made pursuant to Section 2.4.1(b) hereof);


(d)                                 Borrower
shall provide evidence reasonably acceptable to a prudent mortgage loan lender
that upon an Out-Parcel Release (i) the balance of the Property shall continue
to be subject to the lien of the Mortgage, (ii) ingress and egress to and from
the portion of the Property remaining subject to the lien of the Mortgage will
not be terminated or restricted as a result of the Out-Parcel Release, (iii)
the Out-Parcel Release shall not cause or result in a violation of any of the
provisions of any of the Leases, and (iv) the remaining Property shall be in
compliance with all applicable Legal Requirements;


(e)                                  Borrower
shall provide Lender with an endorsement to Lender’s Title Insurance Policy
insuring that the Out-Parcel Release shall not adversely affect or impair the
title insurance provided in the Title Insurance Policy and insuring the
easements referenced in Section 2.4.1(k) hereof;



 28















(f)            Borrower shall provide Lender with such surveys,
descriptions, title insurance endorsements, computations of acreage and other
information as Lender may in its reasonable discretion require in connection
with the Out-Parcel Release;


(g)           If required by any Legal Requirement, Borrower shall
obtain all subdivisions and zoning approvals with respect to the portion of the
Property remaining subject to the lien of the Mortgage as may be reasonably
required by Lender to ensure that the parcel being released and the portion of
the Property remaining subject to the lien of the Mortgage (the “Remaining Parcel”) shall be
independent of each other for all building, zoning, subdivision and taxing
purposes;


(h)           Borrower shall submit to Lender a release of lien for the
applicable Out-Parcel for execution by Lender. 
Such release shall be in a form appropriate in the State and that
contains standard provisions, if any, protecting the rights of the releasing
lender;


(i)            Lender shall have received evidence reasonably satisfactory
to Lender that following the Out-Parcel Release, the provisions of Section 5.13
shall remain true and correct in all material respects;


(j)            Borrower has complied with any requirements applicable to
such release of the Out-Parcel contained in any of the Leases, reciprocal
easement agreements, operating agreements, parking agreements or other similar
agreements affecting the Property and the release does not violate any of the
provisions of such documents in any respect that would result in a termination
(or give any other party thereto the right to terminate), or extinguishment or
other loss of material rights of Borrower or in a material increase in Borrower’s
obligations under such documents;


(k)           Borrower shall deliver to Lender copies of each proposed
permanent easement, cross easement and mutual or non-exclusive easement for
ingress, egress, access, pedestrian walkways, parking, traffic flow, utilities
and services being shared by the portion of the property being released and the
portion of the Property remaining subject to the lien of the Mortgage which may
be required by any governmental authority or which are necessary for the
operation of such parcels, all of which are subject to Lender’s reasonable
approval;


(l)            Borrower shall pay all of Lender’s reasonable costs and
expenses, including reasonable counsel fees and disbursements incurred in
connection with the Out-Parcel Release from the lien of the Mortgage, the
review and approval of the documents and information required to be delivered
in connection therewith and all recording fees and title charges;


(m)          Borrower shall provide Lender with a certificate certifying
the requirements set forth in this Section 2.4.1 have been satisfied;


(n)           If a Securitization has occurred, if required by a Rating
Agency, Borrower shall be required to provide Lender with a legal opinion
(standard in commercial lending transactions similar to the Loan and subject to
customary qualifications, assumptions and exceptions) that the tax
qualification and status of the REMIC will not be adversely affected or
impaired as a result of the release if each of the requirements of this Section
2.4.1 have been 



 29
 









satisfied. 
The term REMIC, as used herein, shall mean a real estate mortgage
investment conduit within the meaning of Section 860D of the Internal Revenue
Code of 1986, as amended, and the related Treasury Department regulations,
including temporary regulations; and


(o)        All of the provisions
of Section 2.4.1 of the Mezzanine Loan Agreement have been satisfied.


2.4.2       Release on Payment in Full.  Lender shall, upon the written request and at
the expense of Borrower, upon payment in full of the Debt in accordance
herewith, release or, if requested by Borrower, assign to Borrower’s designee
(without any representation or warranty by and without any recourse against
Lender whatsoever), the Lien of the Loan Documents if not theretofore released,
and remit any remaining reserve funds held hereunder to Mezzanine Lender, if
the Mezzanine Loan is still outstanding or Borrower, if the Mezzanine Loan has
been paid in full.


2.5          Payments and Computations.


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


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


2.5.3       Late Payment Charge.  If any regularly scheduled payment of
Principal, interest or other monthly payment or reserve or escrow deposit due
under any Loan Document is not paid by Borrower on the date on which it is due,
Borrower shall pay to Lender upon demand an amount equal to the lesser of five
percent (5%) of such unpaid sum or the maximum amount permitted by applicable
law (the “Late Payment Charge”),
in order to defray the expense incurred by Lender in handling and processing
such delinquent payment and to compensate Lender for the loss of the use of
such delinquent payment.  Such amount
shall be secured by the Loan Documents. 
With respect to the foregoing five (5) day grace period, the parties
agree that such five (5) day grace period shall only be applicable no more than
twice during the Term, and in all other instances, the Late Payment Charge
shall be payable in accordance with this Section 2.5.3 with respect to any
Principal, interest or other sum due under any Loan Document which is not paid
by Borrower on the date on which the same is due (other than the balloon
payment of Principal due on the Maturity Date or acceleration of the Loan).



 30
 









2.6          Interest
Rate Cap Agreement.


(a)           Borrower shall obtain, or cause to be obtained, and shall
thereafter maintain in effect, an Interest Rate Cap Agreement with an
Acceptable Counterparty, which shall be coterminous with the Loan and have a
notional amount which shall not at any time be less than the outstanding
principal balance of the Loan and which shall at all times have a strike rate
equal to the Strike Rate.  The
Counterparty shall be obligated under the Interest Rate Cap Agreement to make
monthly payments equal to the excess of one (1) month LIBOR over the Strike
Rate, calculated on the notional amount. 
The notional amount of the Interest Rate Cap Agreement may be reduced
from time to time in amounts equal to any prepayment of the principal of the
Loan in accordance with Section 2.3 hereof.


(b)           Borrower shall collaterally assign to Lender pursuant to
the Assignment of Interest Rate Cap Agreement all of its right, title and
interest to receive any and all payments under the Interest Rate Cap Agreement
(and any related guarantee, if any) and shall deliver to Lender an executed
counterpart of such Interest Rate Cap Agreement and notify the Counterparty of
such collateral assignment (either in such Interest Rate Cap Agreement or by
separate instrument).  The Counterparty
shall agree in writing to make all payments it is required to make under the
Interest Rate Cap Agreement directly to the Deposit Account or if the Deposit
Account is not then required to be in effect, into such account as specified by
Lender, and provided that no Event of Default shall then exist, such payments
shall be applied to the payment of amounts due and payable by Borrower in
accordance with Section 3.10 hereof.  At
such time as the Loan is repaid in full, all of Lender’s right, title and
interest in the Interest Rate Cap Agreement shall terminate and Lender shall
promptly execute and deliver at Borrower’s sole cost and expense, such
documents as may be required to evidence Lender’s release of Lender’s security
interest in the Interest Rate Cap Agreement and to notify the Counterparty of
such release.


(c)           Borrower shall comply with all of its obligations under
the terms and provisions of the Interest Rate Cap Agreement.  Borrower
shall take all actions reasonably requested by Lender to enforce Lender’s
rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty
and shall not waive, amend or otherwise modify any of its rights thereunder.


(d)           In the event of any downgrade, withdrawal or qualification
of the long-term unsecured debt rating of the Counterparty below “AA-” (or the
equivalent) or the short-term unsecured debt rating of “A-1+” or the equivalent
by the Rating Agencies, Borrower shall replace the Interest Rate Cap Agreement
with a Replacement Interest Rate Cap Agreement with an Acceptable Counterparty
not later than thirty (30) days following receipt of notice from Lender or
Servicer of such downgrade, withdrawal or qualification.


(e)           In the event that Borrower fails to purchase and deliver
to Lender the Interest Rate Cap Agreement or any Replacement Interest Cap
Agreement as and when required hereunder, Lender may purchase such Interest
Rate Cap Agreement and the cost incurred by Lender in purchasing such Interest
Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at
the Default Rate from the date such cost was incurred by Lender until such cost
is paid by Borrower to Lender.



 31
 









(f)            Each Interest Rate Cap Agreement shall contain the
following language or its equivalent: “In the event of any downgrade,
withdrawal or qualification of the long-term unsecured debt rating of the
Counterparty below “AA-” (or the equivalent) or the short-term unsecured debt
rating of “A-1+” or the equivalent by the Rating Agencies, the Counterparty
must, within thirty (30) days, either (x) post collateral on terms acceptable
to each Rating Agency or (y) find a replacement Acceptable Counterparty, at the
Counterparty’s sole cost and expense, acceptable to each Rating Agency
(notwithstanding the foregoing, if the Counterparty’s rating is downgraded to “A”
or lower, only the option described in clause (y) will be acceptable); provided
that, notwithstanding such a downgrade, withdrawal or qualification, unless and
until the Counterparty transfers the Interest Rate Cap Agreement to a
replacement Acceptable Counterparty pursuant to the foregoing clause (y), the
Counterparty will continue to perform its obligations under the Interest Rate
Cap Agreement.  Failure to satisfy the
foregoing shall constitute an Additional Termination Event as defined by
Section 5(b)(v) of the ISDA Master Agreement, with the Counterparty as the
Affected Party.”


(g)           In connection with an Interest Rate Cap Agreement,
Borrower shall obtain and deliver to Lender an opinion of counsel from counsel
for the Counterparty (upon which Lender and its successors and assigns may
rely) which shall provide, in relevant part (subject to customary
qualifications, assumptions and exceptions), that:


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


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


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


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



 32
 









3.                                      CASH
MANAGEMENT AND RESERVES


3.1          Cash Management Arrangements.  Borrower shall cause all Rents to be
transmitted directly by tenants of the Property into a trust account (the “Clearing Account”)
maintained by Borrower at a local bank selected by Borrower, which shall at all
times be an Eligible Institution (the “Clearing Bank”) as more fully described in
the Clearing Account Agreement.  Without
in any way limiting the foregoing, all Rents received by Borrower, Manager or
Sub-Manager shall be deposited into the Clearing Account within two Business
Days of receipt.  Funds deposited into
the Clearing Account shall be swept by the Clearing Bank on a daily basis into
an Eligible Account at the Deposit Bank controlled by Lender (the “Deposit Account”) and
applied and disbursed in accordance with this Agreement.  Funds in the Deposit Account shall be
invested at Lender’s discretion only in Permitted Investments.  Lender will also establish subaccounts of the
Deposit Account which shall at all times be Eligible Accounts (and may be ledger
or book entry accounts and not actual accounts) (such subaccounts are
collectively referred to herein as “Subaccounts”).  The Deposit Account and any Subaccount will
be under the sole control and dominion of Lender, and Borrower shall not have
any right of withdrawal therefrom. 
Borrower shall pay for all expenses of opening and maintaining all of
the above accounts.


3.2          Required Repairs; Completion of
Required Repairs.  Borrower shall perform and
complete each item of the repairs and environmental remedial work at the
Property described on Schedule 2 (the “Required Repairs”), if any, within one (1)
year of the date hereof or such shorter period of time for such item set forth
on Schedule 2, if any.  All such repairs
and remedial work shall be completed in a good and workmanlike manner in
accordance with all applicable Legal Requirements and free from all Liens not
previously approved by Lender.


3.3          Tax and Insurance Subaccount.  Borrower shall pay to Lender on each Payment
Date (i) one-twelfth of the Taxes that Lender estimates will be payable
during the next 12 months in order to accumulate with Lender sufficient funds
to pay all such Taxes at least thirty (30) days prior to the delinquency date
and (ii) at the option of Lender, if the liability or casualty Policy
maintained by Borrower covering the Property shall not constitute an approved
blanket or umbrella Policy pursuant to Section 7.1 hereof, one-twelfth of the
Insurance Premiums that Lender estimates will be payable for the renewal of the
coverage afforded by the Policies upon the expiration thereof in order to
accumulate with Lender sufficient funds to pay all such Insurance Premiums at
least 30 days prior to the expiration of the Policies.  Such amounts will be transferred by Lender to
a Subaccount (the “Tax
and Insurance Subaccount”). 
In the event Lender shall elect to collect payments in escrow for
Insurance Premiums pursuant to clause (ii) above, Borrower shall pay to Lender
an initial deposit to be reasonably determined by Lender, in its sole discretion,
to increase the amounts in the Tax and Insurance Subaccount to an amount which,
together with anticipated monthly deposits for Insurance Premiums, shall be
sufficient to pay all Insurance Premiums as they become due.  Provided
that no monetary Event of Default or material non-monetary Event of Default has
occurred and is continuing, Lender will (a) apply funds in the Tax and
Insurance Subaccount to payments of Taxes and Insurance Premiums required to be
made by Borrower pursuant to Sections 5.2 and 7.1, provided that Borrower has
promptly supplied Lender with notices of all Taxes and Insurance Premiums due,
or (b) reimburse Borrower for such amounts upon presentation of evidence
of payment; subject, however, to Borrower’s’ right to contest Taxes in
accordance with Section 5.2.  In making
any



 33
 









payment relating to Taxes and Insurance
Premiums, Lender may do so according to any bill, statement or estimate
procured from the appropriate public office (with respect to Taxes) or
insurer or agent (with respect to Insurance Premiums), without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof.  If Lender determines in its reasonable
judgment that the funds in the Tax and Insurance Subaccount will be
insufficient to pay (or in excess of) the Taxes or Insurance Premiums next
coming due, Lender may increase (or decrease) the monthly contribution
required to be made by Borrower to the Tax and Insurance Subaccount.


3.4          Intentionally Omitted.


3.5          Mezzanine Loan Subaccount.  Lender shall deposit the Monthly Mezzanine
Debt Service Payment Amount and all other amounts due under the Mezzanine Loan,
as directed by Mezzanine Lender pursuant to written instructions given by
Mezzanine Lender to Lender, into a Subaccount (the “Mezzanine Loan Subaccount”)
in accordance with the provisions of Section 3.10 hereof.  Lender shall disburse funds from the
Mezzanine Loan Subaccount to Mezzanine Lender in accordance with Mezzanine
Lender’s written instructions.


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


3.7          Security Deposit Subaccount.  Borrower shall keep all security deposits
under Leases in accordance with applicable Legal Requirements.  After the occurrence of an Event of Default,
Borrower shall, upon Lender’s request, if permitted by applicable Legal
Requirements, turn over to Lender the security deposits (and any interest
theretofore earned thereon) under Leases, to be held by Lender in a Subaccount
(the “Security Deposit
Subaccount”) subject to the terms of the Leases.  Security deposits held in the Security
Deposit Subaccount will be released by Lender upon notice from Borrower together
with such evidence as Lender may reasonably request that such security deposit
is required to be returned to a tenant pursuant to the terms of a Lease or may
be applied as Rent pursuant to the rights of Borrower under the applicable
Lease.  Any letter of credit or other
instrument that Borrower receives in lieu of a cash security deposit under any
Lease shall (i) be maintained in full force and effect in the full amount
unless replaced by a cash deposit as hereinabove described and (ii) if permitted
pursuant to any Legal Requirements, name Lender as payee or mortgagee
thereunder (or at Lender’s option, be fully assignable to Lender).


3.8          Intentionally Omitted.


3.9          Grant of Security Interest;
Application of Funds.  As security for payment of the Debt and the
performance by Borrower of all other terms, conditions and provisions of the
Loan Documents, Borrower hereby pledges and assigns to Lender, and grants to
Lender a security interest in, all Borrower’s right, title and interest in and
to all Rents and in and to all payments to or monies held in the Clearing
Account, the Deposit Account, all Subaccounts created pursuant to this
Agreement (collectively, the “Cash Management Accounts”).  Borrower



 34
 









hereby grants to Lender a continuing security
interest in, and agrees to hold in trust for the benefit of Lender, all Rents
in its possession prior to the (i) payment of such Rents to Lender or
(ii) deposit of such Rents into the Deposit Account.  Borrower shall not, without obtaining the
prior written consent of Lender, further pledge, assign or grant any security
interest in any Cash Management Account, or permit any Lien to attach thereto,
or any levy to be made thereon, or any UCC Financing Statements, except those
naming Lender as the secured party, to be filed with respect thereto.  This Agreement is, among other things,
intended by the parties to be a security agreement for purposes of the
UCC.  Upon the occurrence and during the
continuance of an Event of Default, Lender may apply any sums in any Cash
Management Account in any order and in any manner as Lender shall elect in
Lender’s discretion without seeking the appointment of a receiver and without
adversely affecting the rights of Lender to foreclose the Lien of the Mortgage
or exercise its other rights under the Loan Documents, provided that Lender
will not apply any such sums to prepayment of Principal unless it has
accelerated the Loan.  Cash Management
Accounts shall not constitute trust funds and may be commingled with other
monies held by Lender.  All interest
which accrues on the funds in any Cash Management Account (other than the Tax
and Insurance Subaccount) shall accrue for the benefit of Borrower and shall be
taxable to Borrower and shall be added to and disbursed in the same manner and
under the same conditions as the principal sum on which said interest
accrued.  Upon repayment in full of the
Debt, all remaining funds in the Subaccounts, if any, shall be promptly
disbursed to Borrower.


3.10        Property Cash Flow Allocation.  (a) All Rents deposited into the Deposit
Account during the immediately preceding Interest Period shall be applied on
each Payment Date as follows in the following order of priority:
(i) First, to make payments into the Tax and Insurance Subaccount as
required under Section 3.3; (ii) Second, to pay the monthly portion of the fees
charged by the Deposit Bank in accordance with the Deposit Account Agreement;
(iii) Third, to Lender to pay the Monthly Debt Service Payment Amount due
on such Payment Date (plus, if applicable, interest at the Default Rate and all
other amounts, other than those described under other clauses of this Section
3.10(a), then due to Lender under the Loan Documents); (iv) Fourth, to
deposit into the Mezzanine Loan Subaccount, (A) the Monthly Mezzanine Debt Service
Payment Amount and (B) any Net Liquidation Proceeds After Debt Service;  and  (v) 
Lastly, provided no Event of Default shall exist under the Loan Documents, all
amounts remaining in the Deposit Account after deposits for items (i) through
(iv) for the current month and all prior months shall be disbursed (A) if
Lender has received written notice from Mezzanine Lender that a Mezzanine Event
of Default has occurred and is continuing, to the Mezzanine Loan Subaccount or
such other account designated by Mezzanine Lender or (B) in all other
instances, to Borrower.  Notwithstanding
the foregoing, except during the existence of an Event of Default or a
Mezzanine Event of Default, provided that in any given Interest Period, all
amounts referred to in the foregoing clauses (i)-(iv) have been paid (if and as
applicable), then at Borrower’s request, the payments to Borrower under the
foregoing clause (v) shall be made on a weekly basis.


(b)           The failure of Borrower to make all of the payments
required under clauses (i) through (iii) of Section 3.10(a) in full on each
Payment Date shall constitute an Event of Default under this Agreement;
provided, however, if adequate funds are available in the Deposit Account for
such payments, the failure by the Deposit Bank to allocate such funds into the
appropriate Subaccounts shall not constitute an Event of Default.



 35
 









(c)           Notwithstanding anything to the contrary contained in this
Section 3.10, after the occurrence of an Event of Default, Lender may apply all
Rents deposited into the Deposit Account and other proceeds of repayment in
such order and in such manner as Lender shall elect, provided that Lender may
not apply Rents to the prepayment of principal unless the Loan has been
accelerated.


(d)           All transfers of funds from the Deposit Account or other
sources to or for the benefit of Mezzanine Lender or Mezzanine Borrower
pursuant to this Agreement or any of the other Loan Documents, are intended by
Borrower and Mezzanine Borrower to constitute and shall constitute
distributions from Borrower to Mezzanine Borrower of such funds.


3.11        Initial Deposits into Reserves.  The initial deposits required to be made on
the date hereof into the reserve accounts established under this Article 3 are
funded from the proceeds of the Loan disbursed at closing.


3.12        Tenant Improvement Reserve Subaccount.  On the date hereof, Borrower shall deposit
with Lender $0.00 (the “Tenant
Improvement Funds”) and Lender shall transfer such amount into a
Subaccount (the “Tenant
Improvement Reserve Subaccount”).  The Tenant Improvement Funds shall be used to
reimburse Borrower and/or to pay, in the allocated amounts and in accordance
with the terms and conditions set forth in this Agreement, for the reasonable
costs and expenses incurred by Borrower in completing the tenant improvements
and/or paying the tenants under the applicable Leases allowances for tenant
improvements and/or paying leasing commissions under the applicable Leases, in
each case in the amounts allocated to, and as described for each applicable Lease
(the “TI Leases”).  Provided that no Event of Default has
occurred and is continuing, Lender shall disburse Tenant Improvement Funds held
in the Tenant Improvement Reserve Subaccount and applicable to each TI Lease to
Borrower, within fifteen (15) days after the delivery by Borrower to Lender of
a request therefore (but not more often than once per month), in increments of
at least $25,000 (or the remaining balance of the amount allocated to the
applicable TI Lease, if less), provided: (i) Borrower shall have provided
Lender with either (1) as to leasing commissions relating to the applicable TI
Lease, reasonable evidence that such commissions have been paid, or are then
due and will be paid with proceeds of the requested disbursement, or (2) as to
leasehold improvement work or allowances therefor, reasonable evidence (which
may, if required by Lender, include a tenant estoppel certificate from the
tenant under the applicable TI Lease) indicating, as applicable, (A) that the
tenant improvements or allowances therefor have been completed in accordance
with the applicable TI Lease, (B) that the tenant under the applicable TI Lease
is then owed and entitled to payment upon the applicable tenant allowance
pursuant to the terms of such TI Lease, or (C) if the time period upon which
the applicable tenant may draw upon the applicable TI Lease has elapsed, that
such tenant is no longer entitled to obtain or require the payment of the
applicable tenant allowance under the terms of the applicable TI Lease; and (ii)
the request for disbursement is accompanied by (A) an Officer’s Certificate
certifying that such funds will be used only to pay (or reimburse Borrower for)
the relevant expenditures set forth above (or, in the event of a disbursement
under clause (i)(C) above, that the condition set forth in such clause (i)(C)
has been satisfied with respect to the applicable TI Lease), and that the same
have not been the subject of a previous disbursement, and (B) reasonably
detailed supporting documentation as to the amount, necessity and purpose
therefor.  Any such disbursement of more
than $50,000 to pay



 36
 









(rather than reimburse) tenant improvements
under this Section may, at Lender’s option, be made by joint check payable to
Borrower and the payee of such tenant improvements.


3.13        Replacement Reserve Subaccount.


3.13.1     Replacement Reserve Fund.


Borrower shall deposit with Lender $0.00 for the replacements and
repairs required to be made to the Property during the calendar year
(collectively, the “Replacements”) and Lender
shall transfer such amount into a Subaccount (the “Replacement
Reserve Subaccount”). 
Amounts so deposited shall hereinafter be referred to as Borrower’s “Replacement Reserve Fund”.  Lender may reassess its estimate of the
amount necessary for the Replacement Reserve Fund from time to time, and,
following such reassessment, may increase the monthly amounts required to be
deposited into the Replacement Reserve Fund upon thirty (30) days notice to
Borrower if Lender determines in its reasonable discretion that an increase is
necessary to maintain the proper maintenance and operation of the Property.


3.13.2     Disbursements from Replacement Reserve
Subaccount.


(a)           Lender shall make disbursements from the Replacement
Reserve Subaccount to pay or reimburse Borrower only for the costs of the
Replacements.  Lender shall not be
obligated to make disbursements from the Replacement Reserve Subaccount to pay
or reimburse Borrower for the costs of routine maintenance to the Property or
for costs which are to be reimbursed from any other reserve fund established
hereunder.


(b)           Lender shall, upon written request from Borrower and
satisfaction of the requirements set forth in this Section 3.13.2, disburse to Borrower amounts from
the Replacement Reserve Subaccount necessary to pay or reimburse Borrower for
the actual approved costs and Replacements upon completion of such Replacements
(or, upon partial completion in the case of Replacements made pursuant to
Section 3.13.2(e)) as determined by Lender. 
In no event shall Lender be obligated to disburse funds from the
Replacement Reserve Subaccount if a Default or an Event of Default exists.


(c)           Each request for disbursement from the Replacement Reserve
Subaccount shall be in a form specified or approved by Lender and shall specify
(i) the specific Replacements for which the disbursement is requested, (ii) the
quantity and price of each item purchased, if the Replacement includes the
purchase or replacement of specific items, (iii) the price of all materials
(grouped by type or category) used in any Replacement other than the purchase
or replacement of specific items, and (iv) the cost of all contracted labor or
other services applicable to each Replacement for which the disbursement is
requested.  With each request Borrower
shall certify that, to the best of Borrower’s knowledge, all Replacements have
been made in accordance with all applicable Legal Requirements of any
Governmental Authority having jurisdiction over the Property to which the
Replacements are being provided.  Each request
for disbursement shall include copies of invoices for all items or materials
purchased or to be purchased and all contracted labor or services provided or
to be provided and, each request shall include evidence satisfactory to Lender
that all such amounts have been incurred by Borrower.  Except as provided in Section 3.13.2(e), each
request for disbursement



 37
 









from the Replacement Reserve Subaccount shall
be made only after completion of the Replacement for which disbursement is
requested.  Borrower shall provide Lender
evidence of completion satisfactory to Lender in its reasonable judgment.


(d)           In addition to compliance with all of the requirements of
this Section 3.13, if a reimbursement is requested, Borrower shall pay all
invoices in connection with the Replacements with respect to each request for
disbursement prior to submitting such request for disbursement from the
Replacement Reserve Subaccount, or if a payment is requested, Lender will
disburse to Borrower the requested payment amount (provided that funds directly
disbursed by Lender to Borrower shall not exceed $2,000,000 per
disbursement).  In lieu of all or a
portion of such reimbursement or direct disbursement, at the request of
Borrower, Lender will issue joint checks (in a minimum amount of $50,000),
payable to Borrower and the contractor, supplier, materialman, mechanic,
subcontractor or other party to whom payment is due in connection with a
Replacement.  In the case of payments
made to Borrower or by joint check, Lender may require a waiver of lien from
each Person receiving payment prior to Lender’s disbursement from the
Replacement Reserve Subaccount.  In
addition, as a condition to any disbursement, Lender may require Borrower to
obtain lien waivers from each contractor, supplier, materialman, mechanic or
subcontractor who receives payment in an amount equal to or greater than
$25,000 for completion of its work or delivery of its materials, and evidence
reasonably satisfactory to Lender that any prior disbursements have been
applied to the payment of sums for which such disbursement was requested.  Any lien waiver delivered hereunder shall
conform to the requirements of Applicable Law and shall cover all work
performed and materials supplied (including equipment and fixtures) for the Property
by that contractor, supplier, subcontractor, mechanic or materialman through
the date covered by the current disbursement request (or, in the event that
payment to such contractor, supplier, subcontractor, mechanic or materialman is
to be made by joint check, the release of lien shall be effective through the
date covered by the previous release of funds request).


(e)           If the contractor performing such Replacement requires
periodic payments pursuant to terms of a written contract (and, if such
contract is for work the cost of which exceeds $100,000.00, Lender has approved
in writing in advance such contract), a request for disbursement from the
Replacement Reserve Subaccount may be made after completion of a portion of the
work under such contract, provided (A) such contract requires payment upon
completion of such portion of the work, (B) the materials for which the request
is made are on site at the Property and are properly secured or have been
installed at the Property, (C) all other conditions in this Section 3.13 for
disbursement have been satisfied, (D) [intentionally omitted], and (E) if
required by Lender, each contractor or subcontractor receiving payments under
such contract shall provide a waiver of lien with respect to amounts which have
been paid to that contractor or subcontractor.


(f)            Borrower shall not make a request for disbursement from
the Replacement Reserve Subaccount more frequently than once in any calendar
month and (except in connection with the final disbursement) the total cost of
all Replacements in any request shall not be less than $25,000.



 38
 









3.13.3     Performance of Replacements.


(a)           Borrower shall make Replacements when required in order to
keep the Property in condition and repair consistent with other first class,
full service office centers in the same market segment in the area in which the
Property is located, and to keep the Property or any portion thereof from
deteriorating.  Borrower shall complete
all Replacements in a good and workmanlike manner as soon as practicable following
the commencement of making each such Replacement.


(b)           Lender reserves the right, at its option, to approve all
contracts or work orders with materialmen, mechanics, suppliers,
subcontractors, contractors or other parties providing labor or materials in
connection with the Replacements costing, in the aggregate, in excess of
$15,000.  Upon Lender’s request, Borrower
shall assign any contract or subcontract to Lender.


(c)           In the event Lender determines in its reasonable
discretion that any Replacement is not being performed in a workmanlike or
timely manner or that any Replacement has not been completed in a workmanlike
or timely manner, Lender shall have the option to withhold disbursement for
such unsatisfactory Replacement and to proceed under existing contracts or to
contract with third parties to complete such Replacement and to apply the
Replacement Reserve Fund toward the labor and materials necessary to complete
such Replacement, without providing any prior notice to Borrower and to
exercise any and all other remedies available to Lender upon an Event of
Default hereunder.


(d)           In order to facilitate Lender’s completion or making of
the Replacements pursuant to Section 3.13.3(c) above, Borrower grants Lender
the right to enter onto the Property and perform any and all work and labor
necessary to complete or make the Replacements and/or employ watchmen to
protect the Property from damage.  All
sums so expended by Lender, to the extent not from the Replacement Reserve
Fund, shall be deemed to have been advanced under the Loan to Borrower and
secured by the Mortgage.  For this
purpose, Borrower constitutes and appoints Lender its true and lawful attorney-in-fact
with full power of substitution to complete or undertake the Replacements in
the name of Borrower.  Such power of
attorney shall be deemed to be a power coupled with an interest and cannot be
revoked.  Borrower empowers said attorney-in-fact
as follows:  (i) to use any funds in the
Replacement Reserve Subaccount for the purpose of making or completing the
Replacements; (ii) to make such additions, changes and corrections to the
Replacements as shall be necessary or desirable to complete the Replacements;
(iii) to employ such contractors, subcontractors, agents, architects and
inspectors as shall be required for such purposes; (iv) to pay, settle or
compromise all existing bills and claims which are or may become Liens against
the Property, or as may be necessary or desirable for the completion of the
Replacements, or for clearance of title; (v) to execute all applications and
certificates in the name of Borrower which may be required by any of the
contract documents; (vi) to prosecute and defend all actions or proceedings in
connection with the Property or the rehabilitation and repair of the Property;
and (vii) to do any and every act which Borrower might do in its own behalf to
fulfill the terms of this Agreement.


(e)           Nothing in this Section 3.13.3  shall:  (i) make Lender responsible for making or
completing the Replacements; (ii) require Lender to expend funds in addition to
the Replacement Reserve Fund to make or complete any Replacement; (iii)
obligate Lender to



 39
 









proceed with the Replacements; or (iv)
obligate Lender to demand from Borrower additional sums to make or complete any
Replacement.


(f)            Borrower shall permit Lender and Lender’s agents and
representatives (including, without limitation, Lender’s engineer, architect,
or inspector) or third parties making Replacements pursuant to this Section
3.13.3 to enter onto the Property during normal business hours (subject to the
rights of tenants under their Leases) to inspect the progress of any
Replacements and all materials being used in connection therewith, to examine
all plans and shop drawings relating to such Replacements which are or may be
kept at the Property, and to complete any Replacements made pursuant to this
Section 3.13.3.  Borrower shall cause all
contractors and subcontractors to cooperate with Lender or Lender’s
representatives or such other persons described above in connection with
inspections described in this Section 3.13.3 (f) or the completion of
Replacements pursuant to this Section  3.13.3.


(g)           Lender may require an inspection of the Property at
Borrower’s expense prior to making a monthly disbursement from the Replacement
Reserve Subaccount in order to verify completion of the Replacements for which
payment or reimbursement is sought. 
Lender may require that such inspection be conducted by an appropriate
independent qualified professional selected by Lender and/or may require a copy
of a certificate of completion by an independent qualified professional
acceptable to Lender prior to the disbursement of any amounts from the
Replacement Reserve Subaccount.  Borrower
shall pay the expense of the inspection as required hereunder, whether such
inspection is conducted by Lender or by an independent qualified professional.


(h)           The Replacements and all materials, equipment, fixtures,
or any other item comprising a part of any Replacement shall be constructed,
installed or completed, as applicable, free and clear of all mechanic’s,
materialmen’s or other Liens.


(i)            Before each disbursement from the Replacement Reserve
Subaccount, Lender may require Borrower to provide Lender with a search of
title to the Property effective to the date of the disbursement, which search
shows that no mechanic’s or materialmen’s Liens or other Liens of any nature
have been placed against the Property since the date of recordation of the
Mortgage (other than Permitted Encumbrances) and that title to the Property is
free and clear of all Liens (other than the Lien of the Mortgage and other
Permitted Encumbrances).


(j)            All Replacements shall comply with all applicable Legal
Requirements of all Governmental Authorities having jurisdiction over the
Property and applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations, and
requirements of insurance underwriters.


(k)           In addition to any insurance required under the Loan
Documents, Borrower shall provide or cause to be provided workmen’s
compensation insurance, builder’s risk, and public liability insurance and
other insurance to the extent required under Applicable Law in connection with
a particular Replacement.  All such
policies shall be in form and amount reasonably satisfactory to Lender and
shall comply with the requirements of Section 7.1 hereof.  Certified copies of such policies shall be
delivered to Lender.



 40















3.13.4              Failure to Make
Replacements.


(a)                                  It
shall be an Event of Default under this Agreement if Borrower fails to comply
with any provision of this Section 3.13 and such failure is not cured within
thirty (30) days after notice from Lender; provided, however, that if such
Event of Default is susceptible of cure but cannot reasonably be cured within
such 30-day period, and Borrower shall have commenced to cure such default
within such 30-day period and thereafter diligently and expeditiously proceeds
to cure the same, such 30-day period shall be extended for an additional period
of time as is reasonably necessary for Borrower in the exercise of due
diligence to cure such default, such additional period not to exceed 60
days.  Upon the occurrence of an Event of
Default, Lender may use the Replacement Reserve Fund (or any portion thereof)
for any purpose, including but not limited to completion of the Replacements as
provided in Sections 3.13.3(c) and 3.13.3(d), or for any other repair or
replacement to the Property or toward payment of the Debt in such order,
proportion and priority as Lender may determine in its sole discretion.  Lender’s right to withdraw and apply the
Replacement Reserve Funds shall be in addition to all other rights and remedies
provided to Lender under this Agreement and the other Loan Documents.


(b)                                 Nothing
in this Agreement shall obligate Lender to apply all or any portion of the
Replacement Reserve Fund on account of an Event of Default to payment of the
Debt or in any specific order or priority.


3.13.5              Balance in the
Replacement Reserve Subaccount.


The insufficiency of any
balance in the Replacement Reserve Subaccount shall not relieve Borrower from
its obligation to fulfill all preservation and maintenance covenants in the
Loan Documents.


3.14                        Lender
Waiver of Reserves.  In the event
Lender waives the requirement for Borrower to maintain the Clearing Account and
the Deposit Account, Lender hereby consents to the Mezzanine Borrower
establishing and maintaining a Clearing Account and Deposit Account with
Mezzanine Lender that would operate as provided in this Article 3.


3.15                        Lender
Reliance.  Lender shall have no
duty to confirm, inquire or determine whether a Mezzanine Event of Default has
occurred.  Lender may rely on any notice
it believes in good faith to be genuine and given by Mezzanine Lender.


4.                                      REPRESENTATIONS
AND WARRANTIES


Borrower represents and
warrants to Lender as of the date hereof that, except to the extent (if any)
disclosed on Schedule 3 with reference to a specific Section of this Article 4:


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



 41
 









where it is required to be so qualified in
connection with its properties, business and operations.  Borrower is a Special Purpose Bankruptcy
Remote Entity.


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


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


4.4                               Litigation.  There are no actions, suits or other
proceedings at law or in equity by or before any Governmental Authority now
pending or threatened against or affecting Borrower, the Manager or the
Property, which, if adversely determined, might materially adversely affect the
condition (financial or otherwise) or business of Borrower, Manager or the
condition or ownership of the Property.


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



 42
 









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


4.7                               No
Bankruptcy Filing.  Borrower is not contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
law or the liquidation of all or a major portion of its property (a “Bankruptcy Proceeding”),
and Borrower has no knowledge of any Person contemplating the filing of any
such petition against Borrower.  In
addition, neither Borrower nor any principal nor Affiliate of Borrower has been
a party to, or the subject of a Bankruptcy Proceeding for the past ten years.



 43
 









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


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


4.10                        No Plan
Assets.  As of the date hereof
and throughout the Term (i) Borrower is not and will not be an “employee
benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of
ERISA, (ii) none of the assets of Borrower constitutes or will constitute “plan
assets” of one or more such plans within the meaning of 29 C.F.R.
Section 2510.3-101, (iii)  Borrower is not and will not be a “governmental
plan” within the meaning of Section 3(32) of ERISA, and
(iv) transactions by or with Borrower are not and will not be subject to
state statutes regulating investment of, and fiduciary obligations with respect
to, governmental plans.  As of the date
hereof, neither Borrower, nor any member of a “controlled group of corporations”
(within the meaning of Section 414 of the Code) maintains, sponsors or
contributes to a “defined benefit plan” (within the meaning of Section 3(35) of
ERISA) or a “multiemployer pension plan” (within the meaning of Section
3(37)(A) of ERISA).


4.11                        Compliance.  Each 
Borrower and, to Borrower’s best knowledge, the Property and the use
thereof comply in all material respects with all applicable Legal Requirements
(including with respect to parking and applicable zoning and land use laws,
regulations and ordinances).  Borrower is
not in default or violation of any order, writ, injunction, decree or demand of
any Governmental Authority, the violation of which might materially adversely
affect the condition (financial or otherwise) or business of
Borrower.  The Property is used
exclusively as an office building property and other appurtenant and related
uses.  In the event that all or any part of
the Improvements are destroyed or damaged, said Improvements can be legally
reconstructed to their condition prior to such damage or destruction, and
thereafter exist for the



 44
 









same use without violating any zoning or
other ordinances applicable thereto and without the necessity of obtaining any
variances or special permits.  No legal
proceedings are pending or, to the knowledge of Borrower, threatened with
respect to the zoning of the Property. 
Neither the zoning nor any other right to construct, use or operate the
Property is in any way dependent upon or related to any property other than the
Property. All certifications, permits, licenses and approvals, including
certificates of completion and occupancy permits required for the legal use,
occupancy and operation of the Property (collectively, the “Licenses”), have been
obtained and are in full force and effect. 
The use being made of the Property is in conformity with the certificate
of occupancy issued for the Property and all other restrictions, covenants and
conditions affecting the Property.


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


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


4.14                        Easements;
Utilities and Public Access.  All
easements, cross easements, licenses, air rights and rights-of-way or other
similar property interests (collectively, “Easements”), if any, necessary for the full
utilization of the Improvements for their intended purposes have been obtained,
are described in the Title Insurance Policy and are in full force and effect
without default thereunder.  The Property
has rights of access to public ways and is served by water, sewer, sanitary
sewer and storm drain facilities adequate to service it for its intended
uses.  All public utilities necessary or
convenient to the full use and enjoyment of the Property are located in the
public right-of-way abutting the Property, and all such utilities are connected
so as to serve the Property without passing over other property absent a valid
easement.  All roads necessary for the
use of the Property for its current purpose have been completed and dedicated
to public use and accepted by all Governmental Authorities.


4.15                        Physical
Condition.  To Borrower’s
knowledge and except as set forth in the property condition assessment,
prepared by AEI Consultants and delivered to Lender in connection with the
Loan, the Property, including all Improvements, parking facilities, systems,
Equipment and landscaping, are in good condition, order and repair in all
material respects; to Borrower’s knowledge there exists no structural or other
material defect or damages to the



 45
 









Property, whether latent or otherwise.  Borrower has not received notice from any
insurance company or bonding company of any defect or inadequacy in the
Property, or any part thereof, which would adversely affect its insurability or
cause the imposition of extraordinary premiums or charges thereon or any
termination of any policy of insurance or bond. 
No portion of the Property is located in an area as identified by the
Federal Emergency Management Agency as an area having special flood
hazards.  The Improvements have suffered
no material casualty or damage which has not been fully repaired and the cost
thereof fully paid.


4.16                        Leases.  The rent roll attached hereto as Schedule 8
(the “Rent Roll”)
is true, complete and correct and the Property is not subject to any Leases
other than the Leases described in the Rent Roll.  Except as set forth on the Rent Roll or
tenant estoppel certificates delivered to Lender prior to the date hereof:
(i) each Lease is in full force and effect; (ii) the tenants under
the Leases have accepted possession of and are in occupancy of all of their
respective demised premises, have commenced the payment of rent under the
Leases, and there are no offsets, claims or defenses to the enforcement
thereof; (iii) all rents due and payable under the Leases have been paid
and no portion thereof has been paid for any period more than 30 days in
advance; (iv) the rent payable under each Lease is the amount of fixed
rent set forth in the Rent Roll, and there is no claim or basis for a claim by
the tenant thereunder for an adjustment to the rent; (v) to Borrower’s
best knowledge, no tenant has made any claim against the landlord under any
Lease which remains outstanding, there are no defaults on the part of the
landlord under any Lease, and no event has occurred which, with the giving of
notice or passage of time, or both, would constitute such a default;
(vi) to Borrower’s best knowledge, there is no present material default by
the tenant under any Lease; (vii) all security deposits under Leases are
as set forth on the Rent Roll and are held consistent with Section 3.7; (viii) Borrower
is the sole owner of the entire lessor’s interest in each Lease; (ix) each
Lease is the valid, binding and enforceable obligation of Borrower and the
applicable tenant thereunder; (x) to Borrower’s best knowledge, no Person
has any possessory interest in, or right to occupy, the Property except under
the terms of the Lease; and (xi) each Lease is subordinate to the Loan
Documents, either pursuant to its terms or pursuant to a subordination and
attornment agreement.  None of the Leases
contains any option to purchase or right of first refusal to purchase the
Property or any part thereof.  Neither
the Leases nor the Rents have been assigned or pledged except to Lender, and no
other Person has any interest therein except the tenants thereunder.


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



 46
 









4.18                        Ownership
of Borrower.  The sole limited
partner (99.9% limited partner) of Borrower is Behringer Harvard Santa Clara M,
LLC.  The sole general partner (0.1%
general partner) of Borrower is Borrower GP. 
The only member of Behringer Harvard Santa Clara M, LLC is Behringer
Harvard Opportunity OP I, LP.  The only
partners of Behringer Harvard Opportunity OP I, LP are BHO, Inc. (less than
0.1% general partner), and BHO Business Trust (in excess of 99.9% limited
partner).  The sole beneficiary of BHO
Business Trust and sole shareholder of BHO, Inc. is Behringer Harvard
Opportunity REIT.  The partnership
interests in Borrower, the membership interest in Borrower GP, the membership
interest in Behringer Harvard Santa Clara M, LLC, and the partnership interests
in Behringer Harvard Opportunity OP I, LP are owned free and clear of all
Liens, warrants, options and rights to purchase (other than those granted in
connection with the making of the Mezzanine Loan).  Borrower has no obligation to any Person to
purchase, repurchase or issue any ownership interest in it.  The organizational chart attached hereto as
Schedule 4 is complete and accurate and illustrates all Persons who have a
direct or indirect ownership interest in Borrower.


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


4.20                        Management
Agreement.  The Management
Agreement is in full force and effect. 
There is no default, breach or violation existing thereunder, and no
event has occurred (other than payments due but not yet delinquent) that,
with the passage of time or the giving of notice, or both, would constitute a
default, breach or violation thereunder, by either party thereto.  Pursuant to the Management Agreement,
Borrower has appointed the Manager as its agent for (i) hiring, terminating
(subject to the provisions thereof), overseeing and otherwise dealing with any
sub-property manager for the Property, (ii) otherwise overseeing the operation
and management of the Property, and (iii) making decisions and otherwise
interacting and dealing with Lender with respect to the Loan, this Agreement,
the other Loan Documents and the Property. 
Additionally, subject to the provisions of Section 3.1 and the Clearing
Account Agreement and the Deposit Account Agreement, the Manager has control of
all operating and other bank accounts with respect to the Property.


4.21                        Hazardous
Substances.  Except as disclosed
in the environmental assessment reports delivered to Lender in connection with
the Loan, (i) the Property is not in violation of any Legal Requirement
pertaining to or imposing liability or standards of conduct concerning
environmental regulation, contamination or clean-up, including the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Emergency Planning and Community
Right-to-Know Act of 1986, the Hazardous Substances Transportation Act, the
Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic
Substance Control Act, the Safe Drinking Water Act, the Occupational Safety and
Health Act, any state super-lien and environmental clean-up statutes, any local
law requiring related permits and licenses and all amendments to and
regulations in respect of the foregoing laws (collectively, “Environmental Laws”);
(ii) the Property is not subject to any private or governmental Lien or
judicial or administrative notice or action or inquiry, investigation or claim
relating to hazardous, toxic and/or dangerous substances, toxic mold or fungus
of a type that may pose a risk to human health or the environment or would
negatively impact the value of the Property (“Toxic Mold”) or any other substances or
materials which are included under or regulated by Environmental Laws
(collectively, “Hazardous



 47
 









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


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


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


5.                                      COVENANTS


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


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


5.2                               Taxes
and Other Charges.  Borrower
shall pay all Taxes and Other Charges prior to delinquency, and deliver to
Lender receipts for payment or other evidence satisfactory to Lender that the
Taxes have been so paid at least thirty (30) days prior to the delinquency date
(provided, however, that Borrower need not pay such Taxes nor furnish such
receipts for payment of Taxes paid by Lender pursuant to Section 3.3) and that
the Other Charges have been so paid prior to delinquency.  Borrower shall not suffer and shall promptly
cause to be paid and discharged any Lien against the Property, and shall
promptly pay for all utility services provided to the Property.  After prior notice to Lender, Borrower, at
their own expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the amount or
validity or application of any Taxes or Other Charges, provided that
(i) no Event of Default has occurred and is continuing, (ii) such
proceeding shall suspend the collection of the Taxes or such Other Charges,
(iii) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any other instrument to which Borrower is subject and
shall not constitute a default thereunder, (iv) no part of or interest in
the Property will



 48
 









be in imminent danger of being sold,
forfeited, terminated, canceled or lost, (v) Borrower shall have furnished
such security as may be required in the proceeding, or as may be requested by
Lender, to insure the payment of any such Taxes or Other Charges, together with
all interest and penalties thereon, which shall not be less than one hundred
twenty-five percent (125%) of the Taxes and Other Charges being contested (less
amounts then being retained in the Taxes and Insurance Subaccount to pay such
Taxes so contested), and (vi) Borrower shall promptly upon final
determination thereof pay the amount of such Taxes or Other Charges, together
with all costs, interest and penalties and Borrower shall be permitted to use
such security to make such payment. 
Lender may, with the prior approval of Borrower (not to be unreasonably
withheld), pay over any such security or part thereof held by Lender to the
claimant entitled thereto at any time when, in the judgment of Lender, the
entitlement of such claimant is established. 
Provided no Default or Event of Default shall have occurred and is
continuing, upon delivery of evidence reasonably satisfactory to Lender that
such Taxes or Other Charges have been paid in full or are otherwise no longer
due and payable, any unused portion of any security deposited with Lender
pursuant to this Section 5.2 shall promptly be released to Borrower.


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


5.4                               Repairs;
Maintenance and Compliance; Alterations.


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


5.4.2                     Alterations.  Borrower may, without Lender’s consent,
perform alterations to the Improvements and Equipment which (i) do not
constitute a Material Alteration, (ii) do not adversely affect Borrower’s
financial condition or the value or Net Operating Income of the Property and
(iii) are in the ordinary course of Borrower’s business.  Borrower shall not perform any Material
Alteration without Lender’s prior written consent, which consent shall not be
unreasonably withheld or delayed.  Lender
may, as a condition to giving its consent to a Material Alteration, require
that Borrower deliver to Lender security for payment of the cost of such
Material Alteration in an amount equal to one hundred twenty-five percent
(125%) of the cost of the Material Alteration as estimated by Lender and
Borrower shall be permitted to use such security to make such payment of the
cost of such Material Alteration by satisfying the same conditions for
disbursement from the Replacement Reserve Subaccount set forth in Section 3.13 



 49
 









hereof as though a request for disbursement
were made thereunder.  Upon substantial
completion of the Material Alteration, Borrower shall provide evidence
satisfactory to Lender that (i) the Material Alteration was constructed in
accordance with applicable Legal Requirements and substantially in accordance
with plans and specifications approved by Lender (which approval shall not be
unreasonably withheld or delayed), (ii) all contractors, subcontractors,
materialmen and professionals who provided work, materials or services in
connection with the Material Alteration have been paid in full and have
delivered unconditional releases of lien and (iii) all material Licenses
necessary for the use, operation and occupancy of the Material Alteration
(other than those which depend on the performance of tenant improvement
work) have been issued.  Borrower
shall reimburse Lender upon demand for all out-of-pocket costs and expenses
(including the reasonable fees of any architect, engineer or other professional
engaged by Lender) incurred by Lender in reviewing plans and
specifications or in making any determinations necessary to implement the
provisions of this Section 5.4.2. 
Provided no Default or Event of Default shall have occurred and is
continuing, upon delivery of evidence reasonably satisfactory to Lender that
such Material Alterations have been fully completed in accordance with the
terms of this Section 5.4.2, any unused portion of any security deposited with
Lender pursuant to this Section 5.4.2 shall promptly be released to Borrower.


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


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


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


5.8                               Environmental
Matters.


5.8.1                     Hazardous
Substances.  So long as Borrower
owns or is in possession of the Property, Borrower shall (i) keep the
Property free from Hazardous Substances and in compliance with all
Environmental Laws, (ii) promptly notify Lender if Borrower shall become
aware that (A) any Hazardous Substance is on or near the Property,
(B) the Property is in violation of any Environmental Laws or (C) any
condition on or near the Property shall pose a threat to the health, safety or
welfare of humans and (iii) remove such Hazardous Substances and/or cure
such violations and/or remove such threats, as applicable, as required by law
(or as



 50
 









shall be required by Lender in the case of
removal which is not required by law, but in response to the opinion of a
licensed hydrogeologist, licensed environmental engineer or other qualified
environmental consulting firm engaged by Lender (“Lender’s Consultant”)), promptly after Borrower becomes
aware of same, at Borrower’s sole expense. 
Nothing herein shall prevent Borrower from recovering such expenses from
any other party that may be liable for such removal or cure.


5.8.2                     Environmental
Monitoring.


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


(b)                                 Upon
Lender’s request, at any time and from time to time, Borrower shall provide an
inspection or audit of the Property prepared by a licensed hydrogeologist,
licensed environmental engineer or qualified environmental consulting firm
approved by Lender assessing the presence or absence of Hazardous Substances
on, in or near the Property, and if Lender in its good faith judgment
determines that reasonable cause exists for the performance of such
environmental inspection or audit, then the cost and expense of such audit or
inspection shall be paid by Borrower. Such inspections and audit may include
soil borings and ground water monitoring. 
If Borrower fails to provide any such inspection or audit within 30 days
after such request, Lender may order same, and Borrower hereby grants to Lender
and its employees and agents access to the Property and a license to undertake
such inspection or audit.


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



 51
 









Improvements affected by Toxic
Mold in or about the Improvements, including providing any necessary moisture
control systems at the Property.  If any
investigation, site monitoring, containment, cleanup, removal, restoration or
other work of any kind is reasonably necessary under an applicable
Environmental Law (“Remedial
Work”), Borrower shall commence all such Remedial Work within 30
days after written demand by Lender and thereafter diligently prosecute to
completion all such Remedial Work within such period of time as may be required
under applicable law).  All Remedial Work
shall be performed by licensed contractors approved in advance by Lender and
under the supervision of a consulting engineer approved by Lender.  All costs of such Remedial Work shall be paid
by Borrower, including Lender’s reasonable attorneys’ fees and disbursements
incurred in connection with the monitoring or review of such Remedial
Work.  If Borrower does not timely
commence and diligently prosecute to completion the Remedial Work, Lender may
(but shall not be obligated to) cause such Remedial Work to be performed
at Borrower’s expense.  Notwithstanding
the foregoing, Borrower shall not be required to commence such Remedial Work
within the above specified time period: (x) if prevented from doing so by
any Governmental Authority, (y) if commencing such Remedial Work within
such time period would result in Borrower or such Remedial Work violating any
Environmental Law, or (z) if Borrower, at its expense and after prior
written notice to Lender, are contesting by appropriate legal, administrative
or other proceedings, conducted in good faith and with due diligence, the need
to perform Remedial Work.  Borrower shall
have the right to contest the need to perform such Remedial Work, provided
that, (1) Borrower is permitted by the applicable Environmental Laws to delay
performance of the Remedial Work pending such proceedings, (2) neither the
Property nor any part thereof or interest therein will be sold, forfeited or
lost if Borrower fails to promptly perform the Remedial Work being contested,
and if Borrower fails to prevail in contest Borrower would thereafter have the
opportunity to perform such Remedial Work, (3) Lender would not, by virtue
of such permitted contest, be exposed to any risk of any civil liability for
which Borrower has not furnished additional security as provided in clause (4) below,
or to any risk of criminal liability, and neither the Property nor any interest
therein would be subject to the imposition of any Lien for which Borrower has
not furnished additional security as provided in clause (4) below, as a
result of the failure to perform such Remedial Work and (4) Borrower shall
have furnished to Lender additional security in respect of the Remedial Work
being contested and the loss or damage that may result from Borrower’s failure
to prevail in such contest in such amount as may be reasonably requested by
Lender but in no event less than one hundred twenty-five percent (125%) of the
cost of such Remedial Work as estimated by Lender or Lender’s Consultant and
any loss or damage that may result from Borrower’s failure to prevail in such contest,
which amount shall periodically be disbursed to Borrower during the course of
such Remedial Work, within ten (10) days after the delivery by Borrower to
Lender of a request therefor (but not more often than once per month), in
increments of at least $5,000, accompanied by the following items (which items
shall be in form and substance satisfactory to Lender): (i) an Officer’s
Certificate (A) certifying that the Remedial Work or any portion thereof which
are the subject of the requested disbursement have been completed in a good and
workmanlike manner and in accordance with all applicable Legal Requirements,
(B) identifying each Person that supplied materials or labor in connection with
such Remedial Work or any portion thereof and (C) stating that each such Person
has been or, upon receipt of the requested disbursement, will be paid in full
with respect to the portion of the Remedial Work which is the subject of the
requested disbursement; (ii) copies of appropriate Lien waivers or other
evidence of payment



 52
 









satisfactory to Lender; (iii)
with respect to any disbursement that exceeds $50,000, at Lender’s option, a
title search for the Property indicating that it is free from all Liens not
previously approved by Lender; (iv) a copy of each License required to be
obtained with respect to the portion of the Remedial Work which is the subject
of the requested disbursement; and (v) such other evidence as Lender shall
reasonably request that the Remedial Work which is the subject of the requested
disbursement have been completed and paid for. 
Provided no Default or Event of Default shall have occurred and is
continuing, upon completion of the Remedial Work, any unused portion of any
security deposited with Lender pursuant to this Section 5.8.2 shall promptly be
released to Borrower.  Any such
disbursement of more than $10,000 to pay (rather than reimburse) any Remedial
Work may, at Lender’s option, be made by joint check payable to Borrower and
the Person that supplied materials or labor in connection with such Remedial
Work.


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


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


5.10                        Leases.


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


5.10.2              Leases.  Borrower shall not enter into a proposed
Lease or a proposed renewal, extension (other than a renewal or extension that
is being unilaterally exercised by a tenant pursuant to the terms of an
existing Lease, with respect to which Lender shall not have any consent rights)
or modification of an existing Lease without the prior written consent of
Lender, which consent shall not, so long as no Event of Default is continuing,
be unreasonably withheld or delayed.  Prior
to seeking Lender’s consent to any Lease, Borrower shall deliver to Lender a
copy of such proposed lease (a “Proposed
Lease”) and, if such Proposed Lease is based on the standard
form of Lease approved by Lender, blacklined to show changes from the standard
form of Lease approved by Lender and then being used by Borrower.  Lender shall approve or disapprove each
Proposed Lease or proposed renewal, extension or modification of an existing
Lease for which Lender’s approval is required under this Agreement within 10
Business Days of the submission by Borrower to Lender of a written request for
such approval, accompanied by a final copy of the Proposed Lease or proposed
renewal, extension or modification of an existing Lease.  If requested by Borrower, Lender will grant
conditional approvals of Proposed Leases or proposed renewals, extensions or
modifications of existing Leases at any stage of the leasing process, from
initial “term sheet” through negotiated lease drafts, provided that Lender
shall retain the right to disapprove any such Proposed Lease or proposed
renewal, extension or modification of an existing Lease, if subsequent to any
preliminary approval material changes are made to the terms previously approved
by Lender, or



 53
 









additional material terms are added that had
not previously been considered and approved by Lender in connection with such
Proposed Lease or proposed renewal, extension or modification of an existing
Lease. Provided that no Event of Default is continuing, if Borrower provides Lender
with a written request for approval (which written request shall be marked in
bold lettering with the following: “LENDER’S RESPONSE IS REQUIRED WITHIN TEN
(10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF SECTION
5.10.2 OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER” and the envelope
containing the request must be marked “PRIORITY”, and explicitly state that
failure by Lender to approve or disapprove within 10 Business Days will
constitute a deemed approval) and Lender fails to reject the request in
writing delivered to Borrower within 10 Business Days after receipt by Lender
of the request, the Proposed Lease or proposed renewal, extension or
modification of an existing Lease shall be deemed approved by Lender, and
Borrower shall be entitled to enter into such Proposed Lease or proposed
renewal, extension or modification of an existing Lease.  Notwithstanding anything to the contrary in
this Section 5.10, unless expressly agreed to in writing by Lender or
unless Lender’s approval of the Capital Expense budget described in Section
5.10.3 hereof is given, any approval or deemed approval by Lender of a proposed
Lease or proposed renewal, extension or modification of an existing Lease
pursuant to this Section 5.10 shall not be deemed to constitute (in and of
itself) an approval or deemed approval by Lender of any Approved Leasing
Expenses in connection therewith.


5.10.3              Capital Expense
Budget for Tenant Improvements. 
In the event that a Proposed Lease or a proposed renewal, extension or
modification of an existing Lease requires the payment by Borrower of amounts
for tenant improvements and/or the performance by Borrower of such tenant
improvements, Borrower shall submit to Lender for its approval in connection
with such Proposed Lease or proposed renewal, extension or modification of an
existing Lease, a Capital Expense budget (together with all information and
materials reasonably required by Lender to make a determination of whether to
approve such Capital Expense budget) showing, on a month-by-month basis, in
reasonable detail, each line item of anticipated Capital Expenses relating to
the tenant improvements required under such Proposed Lease or existing
Lease.  It shall be a condition of Lender’s
approval of such Proposed Lease or proposed renewal, extension or modification
of an existing Lease pursuant to this Section 5.10 that Lender approves such
Capital Expense budget.


5.10.4              Additional
Covenants with respect to Leases. 
Borrower (i) shall observe and perform the material obligations
imposed upon the lessor under the Leases, and shall not do or permit anything
to impair the value of the Leases as security for the Debt;  (ii) shall promptly send copies to
Lender of all notices of default that Borrower shall send or receive under any
Lease; (iii) shall enforce, in accordance with commercially reasonable
practices for properties similar to the Property, the terms, covenants and
conditions in the Leases to be observed or performed by the lessees, short of
termination thereof; (iv)  shall not collect any of the Rents more than
one month in advance (other than security deposits); (v) shall not execute
any other assignment of lessor’s interest in the Leases or the Rents (except as
contemplated by the Loan Documents); (vi) shall not modify any Lease in a
manner inconsistent with the Loan Documents; (vii) shall not convey or
transfer or suffer or permit a conveyance or transfer of the Property so as to
effect a merger of the estates and rights of, or a termination or diminution of
the obligations of, lessees under Leases; (viii) shall not consent to any
assignment of or subletting



 54
 









under any Lease unless required in accordance
with its terms without the prior consent of Lender, which, with respect to a
subletting, may not, so long as no Event of Default is continuing, be
unreasonably withheld or delayed; (ix) shall not cancel or terminate any
Lease or accept a surrender thereof without the prior consent of Lender,
which consent shall not, so long as no Event of Default is continuing, be unreasonably
withheld or delayed and (x) shall deliver to Lender within five (5) Business
Days of receipt all notices from any Tenant of such Tenant’s intent to vacate
the Property or terminate the Lease. 
Upon request from Borrower, Lender shall enter into a subordination,
attornment and non-disturbance agreement (an “SNDA”) with any tenant (other than an Affiliate of
Borrower) entering into a Lease satisfying the requirements of this Section
5.10, within seven (7) Business Days after written request therefor by
Borrower, provided that such request is accompanied by an Officer’s Certificate
stating that such Lease complies in all material respects with this Section
5.10 and that Lender has received a copy of the proposed Lease.  All reasonable third-party costs and expenses
actually incurred by Lender in connection with the negotiation, preparation,
execution and delivery of any SNDA, including, without limitation, reasonable
fees and disbursements of outside counsel, shall be paid by Borrower or the
applicable tenant.  The SNDA shall be on
Lender’s then current standard form with such commercially reasonable changes
as may be requested by the applicable tenant as may be appropriate given the
size, creditworthiness and bargaining power of the applicable tenant as well as
the size of the space demised under the applicable Lease.


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


5.12                        Property
Management.


5.12.1              Management
Agreement.  Borrower shall
(i) cause the Property to be managed pursuant to the Management Agreement;
(ii) promptly perform and observe all of the covenants required to be
performed and observed by it under the Management Agreement and do all things
necessary to preserve and to keep unimpaired its rights thereunder;
(iii) promptly notify Lender of any default under the Management Agreement
of which it is aware; (iv) promptly deliver to Lender a copy of each
financial statement, business plan, capital expenditure plan, and property
improvement plan and any other notice, report and estimate received by Borrower
under the Management Agreement; and (v) promptly enforce the performance
and observance of all of the covenants required to be performed and observed by
Manager under the Management Agreement. 
Without Lender’s prior written consent, Borrower shall not (a) surrender,
terminate, cancel, extend or renew the Management Agreement (other than
extensions or renewals pursuant to the express renewal/extension provisions set
forth in the Management Agreement on the same terms and conditions set forth
therein (as in effect on the date hereof, or as hereinafter amended or modified
in accordance with the terms and conditions set forth in this Agreement)) or
otherwise replace the Manager or enter into any other management agreement
(except pursuant to Section 5.12.2); (b) reduce or consent to the
reduction of the term of the Management Agreement; (c) increase or consent
to the increase of the amount of any charges under the Management Agreement;
(d) otherwise modify, change, supplement, alter or amend in any



 55
 









material respect, or waive or release any of
its rights and remedies under, the Management Agreement; (e) suffer or
permit the occurrence and continuance of a default beyond any applicable cure
period under the Management Agreement (or any successor management agreement) if
such default permits the Manager to terminate the Management Agreement (or such
successor management agreement); or (f) suffer or permit the ownership,
management or control of the Manager to be transferred to a Person other than
an Affiliate of Behringer Harvard REIT.


5.12.2              Termination of
Manager / Sub-Manager.


(a)                                  If
(i) an Event of Default shall be continuing, or (ii) Manager is in
material default under the Management Agreement, or (iii) upon the gross
negligence, malfeasance or willful misconduct of the Manager or if Manager
becomes insolvent or a debtor in a bankruptcy proceeding, Borrower shall, at
the request of Lender, terminate the Management Agreement and replace Manager
with a replacement manager acceptable to both Lender (in Lender’s discretion)
and the applicable Rating Agencies, on terms and conditions satisfactory to
both Lender and the applicable Rating Agencies. 
Borrower’s failure to appoint an acceptable manager within thirty
(30) days after Lender’s request of Borrower to terminate the Management
Agreement shall constitute an immediate Event of Default.  Borrower may from time to time appoint a
successor manager to manage the Property, which successor manager and
Management Agreement shall be approved in writing by both Lender (in Lender’s
discretion) and the applicable Rating Agencies. 
Any successor manager shall execute and deliver to Lender a consent and
subordination of manager in form and substance substantially similar to the
Consent and Subordination delivered to Lender on the date hereof.


(b)                                 If
(i) an Event of Default shall be continuing, or (ii) Sub-Manager is
in default under the Sub-Management Agreement, or (iv) upon the gross
negligence, malfeasance or willful misconduct of the Sub-Manager, Borrower
shall, at the request of Lender, terminate the Sub-Management Agreement and, at
Borrower’s option, replace Sub-Manager with a replacement manager acceptable to
both Lender (in Lender’s discretion) and the applicable Rating Agencies, on
terms and conditions satisfactory to both Lender and the applicable Rating
Agencies; provided, however, in the event that Borrower elects to replace
Sub-Manager with a Qualifying Sub-Manager, no approval of Lender or the
applicable Rating Agencies shall be required. 
Borrower’s failure to terminate the Sub-Management Agreement within
thirty (30) days after Lender’s request of Borrower shall constitute an
immediate Event of Default.  Borrower may
from time to time appoint a successor sub-manager to sub-manage the Property,
which successor sub-manager and Sub-Management Agreement shall be approved in
writing by both Lender (in Lender’s discretion) and the applicable Rating
Agencies; provided, however, in the event that Borrower elects to replace
Sub-Manager with a Qualifying Sub-Manager, no approval of Lender or the
applicable Rating Agencies shall be required for such replacement, however,
Lender and the applicable Rating Agencies’ approval shall be required with
respect to any new Sub-Management Agreement. 
Any successor sub-manager shall execute and deliver to Lender a consent
and acknowledgment in form and substance substantially similar to the Consent
of Subcontractor delivered to Lender on the date hereof.


5.13                        Special
Purpose Bankruptcy Remote Entity. 
Borrower shall at all times be a Special Purpose Bankruptcy Remote
Entity. Borrower shall not directly or indirectly make any



 56















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


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


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


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


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


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


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


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


5.21                        Change
of Name, Identity or Structure. 
Borrower shall not change its name, identity (including its trade name
or names) or Borrower’s organizational structure without notifying Lender of
such change in writing at least thirty (30) days prior to the effective date of



 57
 









such change and, in the case of a change in
Borrower’s structure, without first obtaining the prior written consent of
Lender.  Borrower shall execute and
deliver to Lender, prior to or contemporaneously with the effective date of any
such change, any financing statement or financing statement change required by
Lender to establish or maintain the validity, perfection and priority of the
security interest granted herein.  At the
request of Lender, Borrower shall execute a certificate in form satisfactory to
Lender listing the trade names under which Borrower intends to operate the
Property, and representing and warranting that Borrower does business under no
other trade name with respect to the Property.


5.22                        Indebtedness.  Borrower shall not directly or indirectly
create, incur or assume any indebtedness other than the Debt and unsecured
trade payables incurred in the ordinary course of business relating to the
ownership and operation of the Property which do not exceed, at any time, a
maximum amount of three percent (3%) of the original amount of the Principal
and are paid within sixty (60) days of the date incurred or invoiced
(collectively, “Permitted
Indebtedness”); provided,
however, such three percent (3%) limitation shall not apply to (i) any asset
management or property management fee payable pursuant to the terms of the
Management Agreement, or (ii) any amounts that are payable out of the proceeds
of Additional Advances or from any reserves established under this
Agreement.  Notwithstanding the
foregoing, with respect to the 60-day period set forth above, Borrower may,
after prior notice to Lender, at its own expense, contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity of any such Permitted Indebtedness (during
which time such 60-day period shall be tolled), provided that if Borrower
desires to withhold payment of such Permitted Indebtedness during the pendency
of the contest, (i) no Event of Default has occurred and is continuing,
(ii) no part of or interest in the Property will be in danger of being
sold, forfeited, terminated, canceled or lost, (iii) Borrower shall have
furnished such security as may be required in the proceeding, or as may be
reasonably requested by Lender, to insure the payment of any such Permitted
Indebtedness, together with all interest and penalties thereon, which security
shall not be less than one hundred twenty-five percent (125%) of the Permitted
Indebtedness being contested, and (iv) Borrower shall promptly upon final
determination thereof pay the amount of such Permitted Indebtedness, together
with all costs, interest and penalties and Borrower shall be permitted to use
such security to make such payment.


5.23                        Licenses.  Borrower shall not Transfer any License
required for the operation of the Property (other than in connection with a
Permitted Transfer).


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


5.25                        ERISA.


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



 58
 









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


5.25.3              Borrower shall deliver
to Lender such certifications or other evidence from time to time throughout
the Term, as requested by Lender in its sole discretion, that (A) Borrower is
not and does not maintain an “employee benefit plan” as defined in
Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental
plan” within the meaning of Section 3(3) of ERISA; (B) Borrower is not
subject to state statutes regulating investments and fiduciary obligations with
respect to governmental plans; and (C) one or more of the following
circumstances is true:


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


(2)                                  Less than twenty-five
percent (25%) of each outstanding class of equity interests in Borrower are
held by “benefit plan investors” within the meaning of 29 C.F.R.
§2510.3-101(f)(2); or


(3)                                  Borrower qualifies as
an “operating company” or a “real estate operating company” within the meaning
of 29 C.F.R. §2510.3-101(c) or (e).


5.26                        Transfers.


5.26.1              Generally.  Borrower shall not directly or indirectly
make, suffer or permit the occurrence of any Transfer other than a Permitted
Transfer.  No Transfer of a direct
interest in Borrower shall be permitted except in connection with the making of
the Mezzanine Loan.


5.26.2              Intentionally
Omitted.


5.26.3              Intentionally
Omitted.


5.27                        Liens.  Without Lender’s prior written consent,
Borrower shall not create, incur, assume, permit or suffer to exist any Lien on
all or any portion of the Property or any direct or indirect legal or
beneficial ownership interest in Borrower, except Liens in favor of Lender and
Permitted Encumbrances, unless such Lien is bonded or discharged within 30 days
after Borrower first receives notice of such Lien (or such longer period as is
permitted under this Agreement in the event and to the extent the Lien is of a
nature which may be contested by Borrower under the provisions of this
Agreement and Borrower is in fact contesting such Lien in accordance with the
express provisions and conditions set forth in this Agreement).  Notwithstanding the foregoing, pledges of any
direct or indirect legal or beneficial ownership interest in Behringer Harvard
Operating Partnership shall not constitute Liens prohibited hereunder.



 59
 









5.28                        Dissolution.  Borrower shall not (i) engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity, (ii) engage in any business activity not related to the
ownership and operation of the Property or (iii) transfer, lease or sell, in one
transaction or any combination of transactions, all or substantially all of the
property or assets of Borrower except to the extent expressly permitted by the
Loan Documents.


5.29                        Expenses.  Subject to Sections 9.1 and 9.2 hereof,
Borrower shall reimburse Lender upon receipt of notice for all reasonable
out-of-pocket costs and expenses (including reasonable attorneys’ fees and
disbursements) incurred by Lender in connection with the Loan, including
(i) the preparation, negotiation, execution and delivery of the Loan
Documents and the consummation of the transactions contemplated thereby and all
the costs of furnishing all opinions by counsel for Borrower;
(ii) Borrower’s and Lender’s ongoing performance under and compliance with
the Loan Documents, including confirming compliance with environmental and
insurance requirements; (iii) the negotiation, preparation, execution,
delivery and administration of any consents, amendments, waivers or other
modifications of or under any Loan Document and any other documents or matters
requested by Lender; (iv) filing and recording of any Loan Documents;
(v) title insurance, surveys, inspections and appraisals; (vi) the
creation, perfection or protection of Lender’s Liens in the Property and the
Cash Management Accounts (including fees and expenses for title and lien
searches, intangibles taxes, personal property taxes, mortgage recording taxes,
due diligence expenses, travel expenses, accounting firm fees, costs of
appraisals, environmental reports and Lender’s Consultant, surveys and
engineering reports); (vii) enforcing or preserving any rights in response
to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, the Loan Documents, the Property, or any other security given for the
Loan; (viii) fees charged by Rating Agencies in connection with any
modification of the Loan requested by Borrower; and (ix) enforcing any
obligations of or collecting any payments due from Borrower under any Loan
Document or with respect to the Property or in connection with any refinancing
or restructuring of the Loan in the nature of a “work-out”, or any insolvency
or bankruptcy proceedings.  Any costs and
expenses due and payable by Borrower hereunder which are not paid by Borrower
within ten days after demand may be paid from any amounts in the Deposit
Account, with notice thereof to Borrower. 
The obligations and liabilities of Borrower under this Section 5.29
shall survive the Term and the exercise by Lender of any of its rights or
remedies under the Loan Documents, including the acquisition of the Property by
foreclosure or a conveyance in lieu of foreclosure.


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



 60
 









manner, relating to or arising out of or by
reason of the Loan, including: (i) any breach by Borrower of its
obligations under, or any misrepresentation by Borrower contained in, any Loan
Document; (ii) the use or intended use of the proceeds of the Loan;
(iii) any information provided by Borrower; (iv) ownership of the
Mortgage, the Property or any interest therein, or receipt of any Rents;
(v) any accident, injury to or death of persons or loss of or damage to
property occurring in, on or about the Property or on the adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways;
(vi) any use, nonuse or condition in, on or about the Property or on
adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (vii) performance of any labor or services or the
furnishing of any materials or other property in respect of the Property;
(viii) the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release, or threatened release of any Hazardous Substance
on, from or affecting the Property; (ix) any personal injury (including
wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Substance; (x) any lawsuit brought or threatened,
settlement reached, or government order relating to such Hazardous Substance;
(xi) any violation of the Environmental Laws which is based upon or in any
way related to such Hazardous Substance, including the costs and expenses of
any Remedial Work; (xii) any failure of the Property to comply with any
Legal Requirement; (xiii) any claim by brokers, finders or similar persons
claiming to be entitled to a commission in connection with any Lease or other
transaction involving the Property or any part thereof, or any liability
asserted against Lender with respect thereto; and (xiv) the claims of any
lessee of any portion of the Property or any Person acting through or under any
lessee or otherwise arising under or as a consequence of any Lease; provided,
however, that Borrower shall not have any obligation to any Indemnified Party
hereunder to the extent that it is finally judicially determined that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of such Indemnified Party. 
Any amounts payable to any Indemnified Party by reason of the
application of this paragraph shall be payable within 10 days after demand and
shall bear interest at the Default Rate from the date due until paid.  The obligations and liabilities of Borrower
under this Section 5.30 shall survive the Term (with respect to any matter
occurring or in existence prior to the end of the Term, and thereafter with
respect to third party claims, suits and actions) and the exercise by Lender of
any of its rights or remedies under the Loan Documents, including the
acquisition of the Property by foreclosure or a conveyance in lieu of
foreclosure.


5.31                        Intentionally
Omitted.


5.32                        Intentionally
Omitted.


5.33                        Patriot
Act Compliance.  (a) Borrower will use their good faith
and commercially reasonable efforts to comply with the Patriot Act (as defined
below) and all applicable requirements of governmental authorities having
jurisdiction over Borrower and the Property, including those relating to money laundering
and terrorism.  Lender shall have the
right to audit Borrower’s compliance with the Patriot Act and all applicable
requirements of governmental authorities having jurisdiction over Borrower and
the Property, including those relating to money laundering and terrorism.  In the event that Borrower fails to comply
with the Patriot Act or any such requirements of governmental authorities, then
Lender may, at its option, cause Borrower to comply therewith and any and all
reasonable costs and expenses incurred by Lender in connection therewith shall
be secured by the Mortgage and the other Loan Documents and shall be
immediately due and payable.  For
purposes hereof, the term “Patriot
Act” means



 61
 









the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001, as the same may be amended from time to time, and
corresponding provisions of future laws.


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


6.                                      NOTICES
AND REPORTING


6.1                               Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document (a “Notice”) shall be
given in writing and shall be effective for all purposes if either hand
delivered with receipt acknowledged, or by a nationally recognized overnight
delivery service (such as Federal Express), or by certified or registered
United States mail, return receipt requested, postage prepaid, or by facsimile
and confirmed by facsimile answer back, in each case addressed as follows (or
to such other address or Person as a party shall designate from time to time by
notice to the other party):  If to
Lender: Citigroup Global Markets Realty Corp., 388 Greenwich St., Floor 11, New
York, NY 10013, Attention: Paul Schuler, Telecopier (212) 816-1299, with a copy
to:  Thacher Proffitt & Wood LLP, Two
World Financial Center, New York, New York 10281, Attention: Donald F. Simone,
Telecopier: (212) 912-7751; if to Borrower: 
c/o the Borrower’s Designee, 15601 Dallas Parkway, Suite 600, Addison,
Texas  75001, to the attention of
Borrower, Telecopier: (214) 655-1610.  A
notice shall be deemed to have been given: 
in the case of hand delivery, at the time of delivery; in the case of
registered or certified mail, when delivered or the first attempted delivery on
a Business Day;



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or in the case of overnight delivery, upon
the first attempted delivery on a Business Day; or in the case of facsimile,
upon the confirmation of such facsimile transmission.


6.2                               Borrower
Notices and Deliveries.  Borrower
shall (a) give prompt written notice to Lender of: (i) any litigation,
governmental proceedings or claims or investigations pending or threatened
against Borrower which might materially adversely affect Borrower’s condition
(financial or otherwise) or business or the Property; (ii) any
material adverse change in Borrower’s condition, financial or otherwise, or of
the occurrence of any Default or Event of Default of which Borrower has
knowledge; and (b) furnish and provide to Lender all instruments,
documents, boundary surveys, footing or foundation surveys, certificates, plans
and specifications, appraisals, title and other insurance reports and
agreements, reasonably requested, from time to time, by Lender within the
possession or reasonable control of Borrower. 
In addition, after request by Lender (but no more frequently than twice
in any year), (x) Borrower shall furnish to Lender within ten days, a
certificate addressed to Lender, its successors and assigns reaffirming (to the
best of their knowledge) all representations and warranties of Borrower set
forth in the Loan Documents as of the date requested by Lender or, to the
extent of any changes to any such representations and warranties, so stating
such changes, and (y) Borrower shall use commercially reasonable efforts
to furnish to Lender within 30 days, tenant estoppel certificates addressed to
Lender, its successors and assigns from each tenant at each Property in form
and substance reasonably satisfactory to Lender.


6.3                               Financial
Reporting.


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


6.3.2                     Annual
Reports.  Borrower shall furnish
to Lender annually, within 120 days after each calendar year, a complete copy
of Borrower’s annual financial statements audited (if Lender requires for such
statements for any year by notice delivered no later than October 31 of the
calendar year in question; in the absence of such Lender requirement such statements
need not be audited) by an Approved Accountant (accompanied by an unqualified
opinion from such Approved Accountant), each in accordance with GAAP (or
federal income tax basis of accounting, consistently applied) and containing
balance sheets and statements of profit and loss for Borrower and the Property
in such detail as Lender may request. 
Each of such financial statements (x) shall be in form and
substance satisfactory to Lender, (y) shall set forth the financial
condition and the income and expenses for the Property for the immediately
preceding calendar year, including statements of annual Net Operating Income as
well as (1) a list of tenants, if any, occupying more than twenty percent
(20%) of the rentable space of the Property,



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(2) a breakdown showing (a) the
year in which each Lease then in effect expires, (b) the percentage of
rentable space covered by such Lease, (c) the percentage of base rent with
respect to which Leases shall expire in each such year, expressed both on a per
year and a cumulative basis and (z) shall be accompanied by an Officer’s
Certificate certifying (1) that such statement is true, correct, complete
and accurate and presents fairly the financial condition of the Property and
has been prepared in accordance with GAAP(or federal income tax basis of
accounting, consistently applied) and (2) whether there exists a Default
or Event of Default, and if so, the nature thereof, the period of time it has
existed and the action then being taken to remedy it.


6.3.3                     Monthly/Quarterly
Reports.  Borrower shall furnish
to Lender within 30 days after the end of each calendar month or calendar
quarter (as indicated below) the following items: (i) monthly and
year-to-date operating statements, noting Net Operating Income and other information
necessary and sufficient under GAAP (or federal income tax basis of accounting,
consistently applied) to fairly represent the financial position and results of
operation of the Property during such calendar month, all in form satisfactory
to Lender; (ii) a balance sheet for such calendar month; (iii) a
comparison of the budgeted income and expenses and the actual income and
expenses for each month and year-to-date for the Property, together with a
detailed explanation of any variances of ten percent (10%) or more between
budgeted and actual amounts for such period and year-to-date; (iv) a
statement of the actual Capital Expenses made by Borrower during each calendar
quarter as of the last day of such calendar quarter; (v) intentionally
omitted; (vi) an aged receivables report and (vii) rent rolls
identifying the leased premises, names of all tenants, units leased, monthly
rental and all other charges payable under each Lease, date to which paid, term
of Lease, date of occupancy, date of expiration, material special provisions,
concessions or inducements granted to tenants, and a year-by-year schedule
showing by percentage the rentable area of the Improvements and the total base
rent attributable to Leases expiring each year) and a delinquency report for the
Property.  Each such statement shall be
accompanied by an Officer’s Certificate certifying that to the best of such
officer’s knowledge, (1) that such items are true, correct, accurate, and
complete and fairly present the financial condition and results of the
operations of Borrower and the Property in accordance with GAAP (or federal
income tax basis of accounting, consistently applied) (subject to normal
year-end adjustments) and (2) whether there exists a Default or Event of
Default, and if so, the nature thereof, the period of time it has existed and
the action then being taken to remedy it.


6.3.4                     Other
Reports.  Subject to the
provisions of Section 6.3.2, Borrower shall furnish to Lender, within ten
Business Days after request, such further detailed information with respect to
the operation of the Property and the financial affairs of Borrower or Manager
as may be reasonably requested by Lender or any applicable Rating Agency.


6.3.5                     Annual
Budget.  Borrower shall prepare
and submit (or shall cause Manager to prepare and submit) to Lender by December
15th of each year during the Term for approval by
Lender, which approval shall not be unreasonably withheld or delayed, a
proposed pro forma budget for the Property for the succeeding calendar year
(the “Annual Budget”,
and each Annual Budget approved by Lender is referred to herein as the “Approved Annual Budget”),
and, promptly after preparation thereof, any revisions to such Annual
Budget.  The Annual Budget shall consist
of an operating expense budget showing, on a month-by-month basis, in
reasonable detail, each line item of Borrower’s anticipated operating income
and operating expenses (on a cash and accrual basis), including amounts
required to establish,



 64
 









maintain and/or increase any monthly payments
required hereunder.  Until such time that
any Annual Budget has been approved by Lender, the prior Approved Annual Budget
shall apply for all purposes hereunder (with such adjustments as reasonably
determined by Lender (including increases for any non-discretionary
expenses)).  The Annual Budget for the
2007 calendar year delivered to Lender is approved as an Approved Annual
Budget.


6.3.6                     Additional
Reporting.


(a)                                  If
requested by Lender, Borrower shall provide Lender, promptly upon request or
within the time periods set forth in this subsection (a), with the following
financial statements if, at the time a Disclosure Document is being prepared
for a Securitization, it is expected that the principal amount of the Loan
together with any Affiliated Loans at the time of Securitization may equal or
exceed 20% of the aggregate principal amount of all mortgage loans included or
expected to be included, as applicable, in the Securitization:


(1)                                  A balance sheet with
respect to the Property for the two most recent fiscal years, meeting the
requirements of Section 210.3-01 of Regulation S-X of the Securities Act and
statements of income and statements of cash flows with respect to the Property
for the three most recent fiscal years, meeting the requirements of Section 210.3-02
of Regulation S-X, and, for any interim period between the last audited balance
sheet and the date of the most recent interim financial statements, interim
financial statements of the Property meeting the requirements of Section
210.3-01 and 210.3-02 of Regulation S-X (all of such financial statements,
collectively, the “Standard
Statements”); provided, however, that with respect to a Property
(other than properties that are hotels, nursing homes, or other properties that
would be deemed to constitute a business and not real estate under Regulation
S-X or other legal requirements) that has been acquired by Borrower from an
unaffiliated third party (such Property, “Acquired Property”), as to which the other
conditions set forth in Section 210.3-14 of Regulation S-X for provision of
financial statements in accordance with such Section have been met, in lieu of
the Standard Statements otherwise required by this section, Borrower shall
instead provide the financial statements required by such Section 210.3-14 of
Regulation S-X (“Acquired
Property Statements”).


(2)                                  Not later than 30
days after the end of each fiscal quarter following the date hereof, a balance
sheet of the Property as of the end of such fiscal quarter, meeting the
requirements of Section 210.3-01 of Regulation S-X, and statements of income
and statements of cash flows of the Property for the period commencing
following the last day of the most recent fiscal year and ending on the date of
such balance sheet and for the corresponding period of the most recent fiscal
year, meeting the requirements of Section 210.3-02 of Regulation S-X (provided,
that if for such corresponding period of the most recent fiscal year Acquired
Property Statements were permitted to be provided hereunder pursuant to subsection
(i) above, Borrower shall instead provide Acquired Property Statements for such
corresponding period).


(3)                                  Not later than 75
days after the end of each fiscal year following the date hereof, a balance
sheet of the Property as of the end of such fiscal year, meeting the
requirements of Section 210.3-01 of Regulation S-X, and statements of income
and



 65
 









statements of cash flows of the Property for such fiscal year, meeting
the requirements of Section 210.3-02 of Regulation S-X.


(4)                                  Within ten business days
after notice from the Lender in connection with the Securitization of this
Loan, such additional financial statements, such that, as of the date (each an “Offering Document Date”)
of each Disclosure Document, Borrower shall have provided Lender with all
financial statements as described in this subsection (a)(1) above; provided
that the fiscal year and interim periods for which such financial statements
shall be provided shall be determined as of such Offering Document Date.


(b)                                 If
requested by Lender, Borrower shall provide Lender, promptly upon request (but
in no event later than the time periods set forth in Section 6.3.6(a) hereof),
with “selected financial data” regarding the net operating income for Borrower
and the Property for the most recent fiscal year and interim period (or such
longer period as may be required by Regulation S-K if the Loan is not treated
as a non-recourse loan under Instruction 3 for Item 1101(k) of Regulation AB)
meeting the requirements and covering the time periods specified in Section 301
of Regulation S-K and Item 1112 of Regulation AB of the Securities Act if, at
the time a Disclosure Document is being prepared for a Securitization, it is
expected that the principal amount of the Loan and any Affiliated Loans at the
time of Securitization may equal or exceed 10% (but is less than 20%) of the
aggregate principal amount of all mortgage loans expected to be included in a
Securitization.


(c)                                  All
financial statements provided by Borrower hereunder pursuant to Section
6.3.6(a) and (b) hereof shall be prepared in accordance with GAAP, and shall
meet the requirements of Regulation S-K or Regulation S-X, as applicable,
Regulation AB and other applicable legal requirements.  All financial statements referred to in
Subsections 6.3.6(a)(1) and (3) above shall be audited by independent Approved
Accountants of Borrower acceptable to Lender in accordance with Regulation S-K
or Regulation S-X, as applicable, Regulation AB and all other applicable legal
requirements, shall be accompanied by the manually executed report of the
independent Approved Accountant thereon, which report shall meet the
requirements of Regulation S-K or of Regulation S-X, as applicable, Regulation
AB and all other applicable legal requirements, and shall be further accompanied
by a manually executed written consent of the independent Approved Accountants,
in form and substance acceptable to Lender, to the inclusion of such financial
statements in any Disclosure Document and any Exchange Act Filing and to the
use of the name of such independent Approved Accountants and the reference to
such independent Approved Accountants as “experts” in any Disclosure Document
and Exchange Act Filing, all of which shall be provided at the same time as the
related financial statements are required to be provided.  All financial statements (audited or
unaudited) provided by Borrower under this Section 6.3.6 shall be certified by
the chief financial officer or administrative member of Borrower, which
certification shall state that such financial statements meet the requirements
set forth in the first sentence of this Section 6.3.6(c).


(d)                                 If
requested by Lender, Borrower shall provide Lender, promptly upon request, with
any other or additional financial statements, or financial, statistical or
operating information, as Lender shall determine to be required pursuant to
Regulation S-K or Regulation S-X, as applicable, Regulation AB or any
amendment, modification or replacement thereto or other legal requirements in
connection with any Disclosure Document or any Exchange Act



 66
 









filing in connection with or
relating to a Securitization or as shall otherwise be reasonably requested by
the Lender.


(e)                                  In
the event Lender determines, in connection with a Securitization, that the
financial statements required in order to comply with Regulation S-K or
Regulation S-X, as applicable, Regulation AB or other legal requirements are
other than as provided herein, then notwithstanding the provisions of Sections
6.3.6(a), (b) and (c) hereof, Lender may request, and Borrower shall promptly
provide, such combination of Acquired Property Statement and/or Standard
Statements or such other financial statements as Lender determines to be
necessary or appropriate for such compliance.


(f)                                    Intentionally
Deleted.


(g)                                 If
requested by Lender, Borrower shall provide Lender, promptly upon request, a
list of tenants (including all affiliates of such tenants) that in the
aggregate (1) occupy 10% or more (but less than 20%) of the total floor
area of the improvements or represent 10% or more (but less than 20%) of
aggregate base rent, and (2) occupy 20% or more of the total floor area of the
improvements or represent 20% or more of aggregate base rent.


(h)                                 In
addition, if requested by Lender, Borrower shall provide Lender, promptly upon
request, with financial information regarding any of the tenants identified in
the list prepared pursuant to the preceding sentence in form and substance
sufficient to satisfy the requirements of Item 1112 of Regulation AB.


(i)                                     Notwithstanding
any other provisions of this Section 6.3.6, Borrower’s obligations with respect
to the delivery of information (i) with respect to periods predating Borrower’s
acquisition of the Property, (ii) relating to tenants of the Property, or (iii)
otherwise relating to Persons or property not owned by Borrower or within its
reasonable control (or in the control of one or more of its Affiliates) shall
be limited to using commercially reasonable efforts to (A) enforce Borrower’s
contractual rights, if any, to the delivery of such information (e.g., by its
seller, pursuant to the applicable purchase and sale agreement, or by a tenant
pursuant to its Lease) or (B) otherwise obtain such information.  Lender shall notify Borrower in the event the
Loan is intended to be included in a Securitization in which Borrower alone or
Borrower and one or more of its Affiliates collectively, or the Property alone
or the Property and other properties collectively, will be a “Significant
Obligor” (as defined in Regulation AB) and, in such event, Lender shall credit
Borrower $20,000 for expenses (other than legal fees and disbursements of
Borrower’s counsel) incurred by Borrower in connection with its compliance with
Regulation AB prior to the cut-off date for such Securitization.


7.                                      INSURANCE;
CASUALTY; AND CONDEMNATION


7.1                               Insurance.


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


(a)                                  Property
insurance insuring against loss or damage customarily included under so called “all
risk” or “special form” policies including fire, lightning, vandalism, and



 67
 









malicious mischief, boiler and
machinery and, if required by Lender in accordance with subsections (b) or (i)
below, flood and/or earthquake coverage, and subject to subsection (j)
below, coverage for damage or destruction caused by the acts of “Terrorists”
(or such policies shall have no exclusion from coverage with respect thereto)
and such other insurable hazards as, under good insurance practices, from time
to time are insured against for other property and buildings similar to the
premises in nature, use, location, height, and type of construction.  Such insurance policy shall also insure costs
of demolition and increased cost of construction (which insurance for
demolition and increased cost of construction may contain a sub-limit
satisfactory to Lender).  Each such
insurance policy shall (i) be in an amount equal to one hundred percent
(100%) of the then replacement cost of the Improvements without deduction for
physical depreciation and in any event in such amount as is necessary so
that the insurer would not deem Borrower a co-insurer under such policies,
(ii) have deductibles no greater than the lesser of $25,000 or five percent
(5%) of the Net Operating Income per occurrence, (iii) be paid annually in
advance and (iv) contain an agreed amount replacement cost endorsement
with a waiver of depreciation, and shall cover, without limitation, all tenant
improvements and betterments that Borrower is required to insure on a
replacement cost basis.  Lender shall be
named Loss Payee on a Standard Mortgagee Endorsement.


(b)                                 Flood
insurance if any part of the Improvements or (whether or not constituting
Improvements) the paved parking area or parking garage included in the Property
is now or hereafter located in an area now or hereafter designated by the
Federal Emergency Management Agency as a Zone “A” & “V” Special Hazard
Area, or such other Special Hazard Area if Lender so requires in its sole
discretion.  Such policy shall (i) be in
an amount equal to (A) one hundred percent (100%) of the full replacement cost
of the Improvements on the Property (without any deduction for depreciation) or
(B) such other amount as is agreed by Lender and (ii) have a maximum
permissible deductible of $3,000.


(c)                                  Public
liability insurance, including (i) “Commercial General Liability Insurance”,
(ii) “Owned”, “Hired” and “Non Owned Auto Liability”; and (iii) umbrella
liability coverage for personal injury, bodily injury, death, accident and
property damage, such insurance providing in combination no less than
containing minimum limits per occurrence of $1,000,000 and $2,000,000 in the
aggregate for any policy year; together with at least $10,000,000 excess and/or
umbrella liability insurance for any and all claims with no deductible.  The policies described in this subsection
shall also include coverage for elevators, escalators, independent contractors,
“Contractual Liability” (covering, to the maximum extent permitted by law,
Borrower’s obligation to indemnify Lender as required under this Agreement and
the other Loan Documents), “Products” and “Completed Operations Liability”
coverage.


(d)                                 Rental
loss and/or business interruption insurance (i) with Lender being named as “Lender
Loss Payee”, and (ii) in an amount equal to one hundred percent (100%) of the
projected Rents from the Property for not less than a 24 month period
commencing at the time of loss until repairs are completed with reasonable
speed and diligence plus a post-repair completion extended period of indemnity
such that the continued loss of income will be insured until the Property is
restored and such income returns to the same level it was at prior to the loss,
or the expiration of not less than such 24 month period from the time of loss,
whichever first occurs, and notwithstanding that the policy may expire prior to
the end of such period.  The



 68
 









amount of such insurance shall
be increased from time to time during the Term as and when the estimated or
actual Rents increase.


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


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


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


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


(i)                                     Such
other insurance (including environmental liability insurance, earthquake (but
only if a future seismic study indicates a PML in excess of twenty percent
(20%) insurance, mine subsidence insurance and windstorm insurance) as may from
time to time be reasonably required by Lender in order to protect its
interests.


(j)                                     Notwithstanding
anything in subsection (a) above to the contrary, Borrower shall be required to
obtain and maintain coverage in its property insurance Policy (or by a separate
Policy) against loss or damage by terrorist acts in an amount equal to one
hundred percent (100%) of the “Full Replacement Cost” of the Property; provided
that such coverage is available.  In the
event that such coverage with respect to terrorist acts is not included as part
of the “all risk” property policy required by subsection (a) above, Borrower
shall, nevertheless be required to obtain coverage for terrorism (as stand
alone coverage) in an amount equal to 100% of the “Full Replacement Cost” of
the Property; provided that such coverage is available.  Notwithstanding the foregoing, with respect
to any such stand-alone policy covering terrorist acts, Borrower shall not be
required to pay any Insurance Premiums solely with respect to such terrorism
coverage in excess of the Terrorism Premium Cap (hereinafter defined); provided
that if the Insurance Premiums payable with respect to such terrorism coverage
exceeds the Terrorism Premium Cap, Lender may, at its option (1) purchase such
stand-alone terrorism Policy, with Borrower paying such portion of the
Insurance Premiums with respect thereto equal to the Terrorism Premium Cap and
the Lender paying such portion of the Insurance Premiums in excess of the
Terrorism Premium Cap or (2) modify the deductible amounts, policy limits and
other required policy terms to reduce the Insurance Premiums payable with
respect to such stand-alone terrorism Policy to the Terrorism Premium Cap.  As used herein, (i) “Terrorism Premium Cap” means an amount equal to one
hundred percent (100%) of the aggregate Insurance Premiums payable with respect
to all the insurance coverage under Section 7.1.1(a) 



 69
 









for the last policy year in
which coverage for terrorism was included as part of the “all risk” property
policy required by subsection (a) above, adjusted annually by a percentage
equal to the increase in the Consumer Price Index (hereinafter defined) and
(ii) “Consumer Price Index”
means the Consumer Price Index for All Urban Consumers published by the Bureau
of Labor Statistics of the United States Department of Labor, New York
Metropolitan Statistical Area, All Items (1982-84 = 100), or any successor
index thereto, approximately adjusted, and in the event that the Consumer Price
Index is converted to a different standard reference base or otherwise revised,
the determination of adjustments provided for herein shall be made with the use
of such conversion factor, formula or table for converting the Consumer Price
Index as may be published by the Bureau of Labor Statistics or, if said Bureau
shall not publish the same, then with the use of such conversion factor,
formula or table as may be published by Prentice-Hall, Inc., or any other
nationally recognized publisher of similar statistical information; and if the
Consumer Price Index ceases to be published, and there is no successor thereto
(i) such other index as Lender and Borrower shall agree upon in writing or (ii)
if Lender and Borrower cannot agree on a substitute index, such other index, as
reasonably selected by Lender.  Borrower
shall obtain the coverage required under this subsection (j) from a carrier
which otherwise satisfies the rating criteria specified in Section 7.1.2 (a “Qualified Carrier”) or in the
event that such coverage is not available from a Qualified Carrier, Borrower
shall obtain such coverage from the highest rated insurance company providing
such coverage.


7.1.2                     Policies.  All policies of insurance (the “Policies”) required pursuant
to Section 7.1.1 shall (i) be issued by companies approved by Lender
and licensed to do business in the State, with a claims paying ability rating
of “A” or better by S&P (and the equivalent by any other Rating Agency) and
a rating of A:VIII or better in the current Best’s Insurance Reports;
(ii) name Lender and its successors and/or assigns as their interest may
appear as the mortgagee (in the case of property insurance), loss payee (in the
case of business interruption/loss of rents coverage) and an additional insured
(in the case of liability insurance); (iii) contain (in the case of
property insurance) a Non-Contributory Standard Mortgagee Clause and a Lender’s
Loss Payable Endorsement, or their equivalents, naming Lender as the person to
which all payments made by such insurance company shall be paid;
(iv) contain a waiver of subrogation against Lender; (v) be assigned
and the originals thereof delivered to Lender, or in lieu of delivering
originals of the Policies, Borrower may, on an annual basis, deliver Acord
evidences of coverages or the equivalent, as adequate proof of coverage;
provided, however, if at any time, Lender requests carrier certification of
Policies, Borrower shall deliver such certification within ten (10) days of
Lender’s request therefor; (vi) contain such provisions as Lender deems
reasonably necessary or desirable to protect its interest, including (A)
endorsements providing that neither Borrower, Lender nor any other party shall
be a co-insurer under the Policies, (B) that Lender shall receive at least 30
days’ prior written notice of any modification, reduction or cancellation of
any of the Policies, (C) an agreement whereby the insurer waives any right to
claim any premiums and commissions against Lender, provided that the policy
need not waive the requirement that the premium be paid in order for a claim to
be paid to the insured and (D) providing that Lender is permitted to make
payments to effect the continuation of such policy upon notice of cancellation
due to non-payment of premiums; (vii) in the event any insurance policy
(except for general public and other liability and workers compensation
insurance) shall contain breach of warranty provisions, such policy shall
provide that with respect to the interest of Lender, such insurance policy
shall not be invalidated by and shall insure Lender regardless of (A) any act,
failure to act or negligence of or violation of warranties, declarations or
conditions



 70















contained in such policy by any named
insured, (B) the occupancy or use of the premises for purposes more hazardous
than permitted by the terms thereof, or (C) any foreclosure or other action or
proceeding taken by Lender pursuant to any provision of the Loan Documents; and
(viii) be satisfactory in form and substance to Lender and approved by
Lender as to amounts, form, risk coverage, deductibles, loss payees and
insureds.  Borrower shall pay the
premiums for such Policies (the “Insurance
Premiums”) as the same become due and payable and furnish to
Lender evidence of the renewal of each of the Policies together with (unless
such Insurance Premiums have been paid by Lender pursuant to Section 3.3)
receipts for or other evidence of the payment of the Insurance Premiums
reasonably satisfactory to Lender.  If
Borrower does not furnish such evidence and receipts at least ten (10) Business
Days prior to the expiration of any expiring Policy, then Lender may, but shall
not be obligated to, procure such insurance and pay the Insurance Premiums
therefor, and Borrower shall reimburse Lender for the cost of such Insurance
Premiums promptly on demand, with interest accruing at the Default Rate.  Borrower shall deliver to Lender a certified
copy of each Policy within 30 days after its effective date.  Within 30 days after request by Lender,
Borrower shall obtain such increases in the amounts of coverage required
hereunder as may be reasonably requested by Lender, taking into consideration
changes in the value of money over time, changes in liability laws, changes in
prudent customs and practices, and the like. 
Borrower shall not obtain any umbrella or blanket liability or casualty
Policy unless, in each case, such Policy is approved in advance in writing by
Lender and Lender’s interest is included therein as provided in this Agreement
and such Policy is issued by a Qualified Carrier.  In the event Borrower obtains an umbrella or
a blanket Policy, Borrower shall notify Lender of the same and shall cause
certified copies of each Policy to be delivered as required in this Section
7.1.  Any blanket insurance Policy shall
specifically allocate to the Property the amount of coverage from time to time
required hereunder and shall otherwise provide the same protection as would a
separate Policy insuring only the Property in compliance with the provisions of
this Section 7.1.


7.2                               Casualty.


7.2.1                     Notice;
Restoration.  If the Property is
damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall give
prompt notice thereof to Lender. 
Following the occurrence of a Casualty, Borrower, regardless of whether
insurance proceeds are available (unless Lender has breached its obligation (if
any) to make such insurance proceeds available pursuant to Section 7.4.1),
shall promptly proceed to restore, repair, replace or rebuild the Property in
accordance with Legal Requirements to be of at least equal value and of
substantially the same character as prior to such damage or destruction.


7.2.2                     Settlement
of Proceeds.  If a Casualty
covered by any of the Policies (an “Insured
Casualty”) occurs where the loss does not exceed $250,000,
provided no Event of Default has occurred and is continuing, Borrower may
settle and adjust any claim without the prior consent of Lender; provided such
adjustment is carried out in a competent and timely manner, and Borrower is
hereby authorized to collect and receipt for the insurance proceeds (the “Proceeds”).  In the event of an Insured Casualty where the
loss exceeds $250,000 (a “Significant
Casualty”), Borrower may settle and adjust any claim with the
prior consent of Lender (which consent shall not be unreasonably withheld or
delayed) unless either (i) an Event of Default has occurred and is
continuing or (ii) the loss equals or exceeds $1,000,000, in which either
such case Lender may, in its sole discretion, settle and adjust any claim
without the



 71
 









consent of Borrower and agree with the
insurer(s) on the amount to be paid on the loss, and the Proceeds shall be
due and payable solely to Lender and held by Lender in the
Casualty/Condemnation Subaccount and disbursed in accordance herewith.  If Borrower or any party other than Lender is
a payee on any check representing Proceeds with respect to a Significant
Casualty, Borrower shall immediately endorse, and cause all such third parties
to endorse, such check payable to the order of Lender.  Borrower hereby irrevocably appoints Lender
as its attorney-in-fact, coupled with an interest, to endorse such check
payable to the order of Lender.  The
expenses incurred by Lender in the settlement, adjustment and collection of the
Proceeds shall become part of the Debt and shall be reimbursed by Borrower to
Lender upon demand.  Notwithstanding
anything to the contrary contained herein, if in connection with a Casualty any
insurance carrier makes a payment under a property insurance Policy that
Borrower proposes be treated as business or rental interruption insurance,
then, notwithstanding any designation (or lack of designation) by the insurance
carrier as to the purpose of such payment, as between Lender and Borrower, such
payment shall not be treated as business or rental interruption insurance
proceeds unless Borrower has demonstrated to Lender’s satisfaction that the
remaining net Proceeds that will be received from the property insurance
carriers are sufficient to pay one hundred percent (100%) of the cost of fully
restoring the Improvements or, if such net Proceeds are to be applied to repay
the Debt in accordance with the terms hereof, that such remaining net Proceeds
will be sufficient to pay the Debt in full.


7.3                               Condemnation.


7.3.1                     Notice;
Restoration.  Borrower shall
promptly give Lender notice of the actual or threatened commencement of any
condemnation or eminent domain proceeding affecting the Property (a “Condemnation”) and shall
deliver to Lender copies of any and all papers served in connection with such
Condemnation.  Following the occurrence
of a Condemnation, Borrower, regardless of whether an Award is available
(unless Lender has breached its obligation (if any) to make such Award
available pursuant to Section 7.4.1), shall promptly proceed to restore,
repair, replace or rebuild the Property in accordance with Legal Requirements
to the extent practicable to be of at least equal value and of substantially
the same character (and to have the same utility) as prior to such
Condemnation.


7.3.2                     Collection
of Award.  If a Condemnation
occurs where the award or payment in respect thereof (an “Award”) does not exceed
$250,000 or which results in the taking of five percent (5%) or less of the
Property, provided no Event of Default has occurred and is continuing, Borrower
may make any compromise, adjustment or settlement in connection with such
Condemnation with the prior consent of Lender, not to be unreasonably withheld,
provided such adjustment is carried out in a competent and timely manner, and
Borrower is hereby authorized to collect and receipt for the Award.  In the event of a Condemnation where the
Award is in excess of $250,000 or which results in the taking of more than five
percent (5%) of the Property, Lender is hereby irrevocably appointed as
Borrower’s attorney-in-fact, coupled with an interest, with exclusive power to
collect, receive and retain such Award and to make any compromise, adjustment
or settlement in connection with such Condemnation with the prior consent of
Borrower (unless an Event of Default is continuing, in which case, Borrower’s
prior consent shall not be required), not to be unreasonably withheld (which
shall be deemed consented to if Borrower fails to respond to any request for
consent therefor within 10 days’ of request). 
Notwithstanding any Condemnation (or any transfer made in lieu of or in
anticipation



 72
 









of such Condemnation), Borrower shall
continue to pay the Debt at the time and in the manner provided for in the Loan
Documents, and the Debt shall not be reduced unless and until any Award shall
have been actually received and applied by Lender to expenses of collecting the
Award and to discharge of the Debt. Lender shall not be limited to the interest
paid on the Award by the condemning authority but shall be entitled to receive
out of the Award interest at the rate or rates provided in the Note.  If the Property is sold, through foreclosure
or otherwise, prior to the receipt by Lender of such Award, Lender shall have
the right, whether or not a deficiency judgment on the Note shall be
recoverable or shall have been sought, recovered or denied, to receive all or a
portion of the Award sufficient to pay the Debt.  Borrower shall cause any Award that is
payable to Borrower to be paid directly to Lender.  Lender shall hold such Award in the
Casualty/Condemnation Subaccount and disburse such Award in accordance with the
terms hereof.


7.4                               Application
of Proceeds or Award.


7.4.1                     Application
to Restoration.  If an Insured
Casualty or Condemnation occurs where (i) the loss is in an aggregate
amount less than twenty-five percent (25%) of the unpaid Principal,
(ii) in the reasonable judgment of Lender, the Property can be restored
within nine months after all applicable restoration permits have been obtained,
and prior to six months before the Stated Maturity Date and prior to the
expiration of the rental or business interruption insurance with respect
thereto, to the Property’s pre-existing condition and utility as existed
immediately prior to such Insured Casualty or Condemnation and to an economic
unit not less valuable and not less useful than the same was immediately prior
to the Insured Casualty or Condemnation, and after such restoration will
adequately secure the Debt, (iii) less than (x) thirty percent (30%), in the
case of an Insured Casualty or (y) fifteen percent (15%), in the case of a
Condemnation, of the rentable area of the Improvements has been damaged, destroyed
or rendered unusable as a result of such Insured Casualty or Condemnation; (iv)
Leases demising in the aggregate at least sixty-five percent (65%) of the total
rentable space in the Property and in effect as of the date of the occurrence
of such Insured Casualty or Condemnation remain in full force and effect during
and after the completion of the Restoration (hereinafter defined); and
(v) no Event of Default shall have occurred and be then continuing, then
the Proceeds or the Award, as the case may be (after reimbursement of any
expenses incurred by Lender), shall be applied to pay for or reimburse Borrower
for the cost of restoring, repairing, replacing or rebuilding the Property (the
“Restoration”), in
the manner set forth herein.  Borrower
shall commence and diligently prosecute such Restoration.  Notwithstanding the foregoing, in no event
shall Lender be obligated to apply the Proceeds or Award to reimburse Borrower
for the cost of Restoration unless, in addition to satisfaction of the
foregoing conditions, both (x) Borrower shall pay (and if required by
Lender, Borrower shall deposit with Lender in advance) all costs of such
Restoration in excess of the net amount of the Proceeds or the Award made
available pursuant to the terms hereof; and (y) Lender shall have received
evidence reasonably satisfactory to it that during the period of the
Restoration, the Rents will be at least equal to the sum of the operating
expenses and Debt Service, as reasonably determined by Lender.


7.4.2                     Application
to Debt.  Except as provided in
Section 7.4.1, any Proceeds and/or Award may, at the option of Lender in its
discretion, be applied to the payment of (i) accrued but unpaid interest
on the Note, (ii) the unpaid Principal and (iii) other charges due



 73
 









under the Note and/or any of the other Loan
Documents, or applied to reimburse Borrower for the cost of any Restoration, in
the manner set forth in Section 7.4.3. 
Any such prepayment of the Loan shall be without any Spread Maintenance
Premium, unless an Event of Default has occurred and is continuing at the time
the Proceeds are received from the insurance company or the Award is received
from the condemning authority, as the case may be, in which event Borrower
shall pay to Lender an additional amount equal to the Spread Maintenance
Premium, if any, that may be required with respect to the amount of the
Proceeds or Award applied to the unpaid Principal.  Notwithstanding anything to the contrary
contained herein, if any Proceeds or Award are not required to be made available
for a Restoration and are retained and applied by Lender toward the payment of
the Debt, Borrower may prepay the entire outstanding Principal without payment
of any Spread Maintenance Premium provided that (x) such prepayment is
made within 90 days after Lender applies such Proceeds or Award to the Debt and
(y) together with such prepayment, Borrower pay to Lender all accrued and
unpaid interest and all other sums payable under the Loan Documents.


7.4.3                     Procedure
for Application to Restoration. 
If Borrower is entitled to reimbursement out of the Proceeds or an Award
held by Lender, such Proceeds or Award shall be disbursed from time to time
from the Casualty/Condemnation Subaccount upon Lender being furnished with
(i) evidence satisfactory to Lender of the estimated cost of completion of
the Restoration, (ii) a fixed price or guaranteed maximum cost
construction contract for Restoration satisfactory to Lender, (iii) prior
to the commencement of Restoration, all immediately available funds in addition
to the Proceeds or Award that in Lender’s judgment are required to complete the
proposed Restoration (or such additional funds are irrevocably committed to the
satisfaction of Lender by or on behalf of Borrower for that purpose),
(iv) such architect’s certificates, waivers of lien, contractor’s sworn
statements, title insurance endorsements, bonds, plats of survey, permits,
approvals, licenses and such other documents and items as Lender may reasonably
require and approve in Lender’s discretion, and (v) all plans and
specifications for such Restoration, such plans and specifications to be
approved by Lender prior to commencement of any work.  Lender may, at Borrower’s expense, retain a
consultant to review and approve all requests for disbursements, which approval
shall also be a condition precedent to any disbursement.  No payment made prior to the final completion
of the Restoration shall exceed ninety percent (90%) of the value of the work
performed from time to time; funds other than the Proceeds or Award shall be
disbursed prior to disbursement of such Proceeds or Award; and at all times,
the undisbursed balance of such Proceeds or Award remaining in the hands of
Lender, together with funds deposited for that purpose or irrevocably committed
to the satisfaction of Lender by or on behalf of Borrower for that purpose,
shall be at least sufficient in the reasonable judgment of Lender to pay for
the cost of completion of the Restoration, free and clear of all Liens or
claims for Lien.  Provided no Default or
Event of Default then exists, any surplus that remains out of the Proceeds held
by Lender after payment of such costs of Restoration shall be paid to
Borrower.  Any surplus that remains out
of the Award received by Lender after payment of such costs of Restoration
shall, in the discretion of Lender, be retained by Lender and applied to
payment of the Debt or returned to Borrower.


8.                                      DEFAULTS


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



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(a)                                  any
portion of the Debt is not paid when due or any other amount under
Section 3.10(a)(i) through (iii) is not paid in full on each Payment
Date (provided, however, if adequate funds are available in the Deposit Account
for such payments, the failure by the Deposit Bank to allocate such funds into
the appropriate Subaccounts shall not constitute an Event of Default);


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


(c)                                  the
Policies are not kept in full force and effect, or are not delivered to Lender
pursuant to Section 7.1.2(v) within 10 days after request;


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


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


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


(g)                                 a
receiver, liquidator or trustee shall be appointed for Borrower or Guarantor;
or Borrower or Guarantor shall be adjudicated a bankrupt or insolvent; or any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Borrower or Guarantor, as the case
may be; or any proceeding for the dissolution or liquidation of Borrower or
Guarantor shall be instituted; provided however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower or Guarantor, as the case may be, only upon the same not being
discharged, stayed or dismissed within 60 days;


(h)                                 Borrower
breaches any covenant contained in Sections 5.12.1(a)-(f), 5.13, 5.15, 5.22
(other than failure to pay trade payables within 60 days if due to lack of
available funds), 5.25 or 5.28;


(i)                                     except
as expressly permitted hereunder, the alteration, improvement, demolition or
removal of all or any of portion of the Improvements without the prior written
consent of Lender (if such consent is required pursuant to the terms of this
Agreement);


(j)                                     an
Event of Default as defined or described elsewhere in this Agreement or in any
other Loan Document occurs;


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



 75
 









(l)                                     any
of the assumptions contained in any substantive non-consolidation opinion,
delivered to Lender by Borrower’s counsel in connection with the Loan or
otherwise hereunder, were not true and correct as of the date of such opinion
or thereafter became untrue or incorrect;


(m)                               if
Key Principal fails to Control (as defined in clause (ii) of the defined term “Control”
in Section 1.1) the Manager and the day to day management and operations of the
Property (unless the Manager is replaced with a successor manager in accordance
with and subject to satisfaction of the terms and conditions set forth in
Section 5.12.2);


(n)                                 [intentionally
omitted]; or


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


8.2                               Remedies.


8.2.1                     Acceleration.  Upon the occurrence and during the
continuance of an Event of Default (other than an Event of Default described in
paragraph (f) or (g) of Section 8.1) and at any time and from time to time
thereafter during the continuance of such Event of Default, in addition to any
other rights or remedies available to it pursuant to the Loan Documents or at
law or in equity, Lender may take such action, without notice or demand, that
Lender deems advisable to protect and enforce its rights against Borrower and
in and to the Property; including declaring the Debt to be immediately due and
payable (including unpaid interest), Default Rate interest, Late Payment
Charges, Spread Maintenance Premium and any other amounts owing by Borrower),
without notice or demand; and upon any Event of Default described in paragraph
(f) or (g) of Section 8.1, the Debt (including unpaid interest, Default Rate
interest, Late Payment Charges, Spread Maintenance Premium and any other
amounts owing by Borrower) shall immediately and automatically become due
and payable, without notice or demand, and Borrower hereby expressly waives any
such notice or demand, anything contained in any Loan Document to the contrary
notwithstanding.


8.2.2                     Remedies
Cumulative.  Upon the occurrence
and during the continuance of an Event of Default, all or any one or more of
the rights, powers, privileges and other remedies available to Lender against
Borrower under the Loan Documents or at law or in equity may be exercised by
Lender at any time and from time to time, whether or not all or any of the Debt
shall be declared, or be automatically, due and payable, and whether or not
Lender shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and



 76
 









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


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


8.2.4                     Delay.  No delay or omission to exercise any remedy,
right or power accruing upon an Event of Default, or the granting of any
indulgence or compromise by Lender shall impair any such remedy, right or power
hereunder or be construed as a waiver thereof, but any such remedy, right or
power may be exercised from time to time and as often as may be deemed
expedient.  A waiver of one Default or
Event of Default shall not be construed to be a waiver of any subsequent
Default or Event of Default or to impair any remedy, right or power consequent
thereon.  Notwithstanding any other
provision of this Agreement, Lender reserves the right to seek a deficiency
judgment or preserve a deficiency claim in connection with the foreclosure of
the Mortgage to the extent necessary to foreclose on all or any portion of the
Property, the Rents, the Cash Management Accounts or any other collateral.


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



 77
 









applicable laws, secured by the Mortgage and
other Loan Documents) and shall bear interest thereafter at the Default
Rate.  Notwithstanding the foregoing,
Lender shall have no obligation to send notice to Borrower of any such
failure.  Additionally, during the
continuance of an Event of Default, Lender shall have the right, but not the
obligation, to make any Protective Advance (hereinafter defined) (provided,
however, that Lender will only make such Protective Advance from its own funds
if there are insufficient funds in the Cash Management Accounts), and the same
shall be added to the Debt (and to the extent permitted under applicable laws,
secured by the Mortgage and other Loan Documents) and shall bear interest
thereafter at the Default Rate.  As used
herein, “Protective Advance”
means all sums advanced for the purpose of payment of real estate taxes
(including special payments in lieu of real estate taxes), maintenance costs,
insurance premiums, operating expenses, trade payables or other items with
respect to the Property (including capital items) reasonably necessary to
protect the Property or any other security given for the Loan or to preserve
any of Lender’s rights or remedies under the Loan Documents.


9.                                      SPECIAL
PROVISIONS


9.1                               Sale
of Notes and Securitization.  


Lender may, at any time,
sell, transfer or assign the Note, this Agreement, the Mortgage and the other
Loan Documents or any portion thereof, and any or all servicing rights with
respect thereto, or grant participations therein or issue mortgage pass-through
certificates or other securities (the “Securities”)
evidencing a beneficial interest in a rated or unrated public offering or
private placement (a “Securitization”).  At the request of the holder of the Note and,
to the extent not already required to be provided by Borrower under this
Agreement, Borrower shall satisfy the market standards to which the holder of
the Note customarily adheres or which may be reasonably required in the
marketplace or by the Rating Agencies in connection with a Securitization or
the sale of the Note or the participations or Securities, including, without
limitation, to:


(a)                                  (i)
provide such financial and other information with respect to the Property,
Borrower, Guarantor  and the
Manager, (ii) provide budgets relating to the Property and (iii) perform or
permit or cause to be performed or permitted such site inspection, appraisals,
market studies, environmental reviews and reports (Phase I’s and, if
appropriate, Phase II’s), engineering reports and other due diligence
investigations of the Property, as may be reasonably requested by the holder of
the Note or the Rating Agencies or as may be necessary or appropriate in
connection with the Securitization (the “Provided
Information”), together, if customary, with appropriate
verification and/or consents of the Provided Information through letters of
auditors or opinions of counsel of independent attorneys acceptable to Lender
and the Rating Agencies;


(b)                                 if
required by the Rating Agencies, deliver (i) a revised Insolvency Opinion, (ii)
revised opinions of counsel as to due execution and enforceability with respect
to Borrower, Guarantor and their respective Affiliates and the Loan Documents,
and (iii) revised organizational documents for Borrower, Guarantor and their
respective Affiliates (including, without limitation, such revisions as are
necessary to comply with the provisions of Section 5.13 



 78
 









hereof), which counsel,
opinions and organizational documents shall be satisfactory to Lender and the
Rating Agencies;


(c)                                  if
required by the Rating Agencies, use commercially reasonable efforts to deliver
such additional tenant estoppel letters, subordination agreements or other
agreements from parties to agreements that affect the Property, which estoppel
letters, subordination agreements or other agreements shall be satisfactory to
Lender and the Rating Agencies.


(d)                                 execute
such amendments to the Loan Documents and organizational documents as may be
requested by the holder of the Note or the Rating Agencies or otherwise to
effect the Securitization; provided, however, that Borrower shall not be
required to modify or amend any Loan Document if such modification or amendment
would (except for modifications and amendments required to be made pursuant to
Section (e) and (f) below), (i) change the interest rate, the stated maturity
or the amortization of principal set forth in the Note, or (ii) modify or amend
any other material economic term of the Loan.


(e)                                  if
Lender elects, in its sole discretion, prior to or upon a Securitization, to
split the Loan into two or more parts, or the Note into multiple component
notes or tranches which may have different interest rates, amortization
payments, principal amounts (including, without limitation, the amounts and
obligations to make Additional Advances thereunder), payment priorities and
maturities, Borrower agrees to cooperate with Lender in connection with the
foregoing and to execute the required modifications and amendments to the Note,
this Agreement and the Loan Documents and to provide opinions necessary to
effectuate the same.  Such Notes or
components may be assigned different interest rates, so long as the weighted
average of the interest rate spreads for such Notes or components after such
modification shall not exceed the weighted average of the interest rate spreads
for such Notes or components immediately prior to such modification (without
giving effect to any deviation attributable to the imposition of any rate of
interest at the Default Rate, default prepayments pursuant to Section 2.3.1
hereof or mandatory prepayments pursuant to Section 2.3.2 hereof), it being
understood and agreed that such weighted average of the interest rate spreads
after such modification shall not exceed LIBOR plus 1.75% (without giving
effect to any deviation attributable to the imposition of any rate of interest
at the Default Rate, default prepayments pursuant to Section 2.3.1 hereof or
mandatory prepayments pursuant to Section 2.3.2 hereof);


(f)                                    execute
modifications to the Loan Documents changing the interest rate and/or the
amortization payments for the Loan and the Mezzanine Loan (including, without
limitation, the amounts and obligations to make Additional Advances
thereunder), provided that the weighted average of the interest rate spreads
for the Loan and the Mezzanine Loan after such modification shall not exceed
the weighted average of the interest rate spreads for the Loan and the
Mezzanine Loan immediately prior to such modification (without giving effect to
any deviation attributable to the imposition of any rate of interest at the
Default Rate, default prepayments pursuant to Section 2.3.1 hereof or mandatory
prepayments pursuant to Section 2.3.2 hereof), it being understood and agreed
that such weighted average of the interest rate spreads after such modification
shall not exceed LIBOR plus 1.75% (without giving effect to any deviation
attributable to the imposition of any rate of interest at the Default Rate,
default prepayments pursuant to Section 2.3.1 hereof or mandatory prepayments
pursuant to Section 2.3.2 



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hereof).  Borrower shall also provide opinions and
title insurance reasonably necessary to effectuate the same;


(g)                                 make
such representations and warranties as of the closing date of the
Securitization with respect to the Property, Borrower, and the Loan Documents
as are customarily provided in securitization transactions and as may be
reasonably requested by the holder of the Note or the Rating Agencies and
consistent with the facts covered by such representations and warranties as
they exist on the date thereof, including the representations and warranties
made in the Loan Documents; and


(h)                                 supply
to Lender such documentation, financial statements and reports in form and
substance required for Lender to comply with Regulation S-X and/or AB of the
federal securities law, if applicable, in accordance with Section 6.3.6 hereof.


All reasonable third
party costs and expenses incurred by Lender or Borrower in connection with
Borrower’s complying with requests made under this Section 9.1 (other than
legal fees and disbursements of Borrower’s counsel) shall be paid by Lender but
Borrower shall pay all legal fees and disbursements of Borrower’s counsel.  The foregoing shall not limit Borrower’s obligation
under Section 9.2 hereof.


9.2                               Securitization
Indemnification.


(a)                                  Borrower
understands that certain of the Provided Information may be included in
disclosure documents in connection with the Securitization, including, without
limitation, a prospectus supplement, private placement memorandum, offering
circular or other offering document (each a “Disclosure Document”) and may also be included in
filings (an “Exchange Act Filing”)
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended (the “Securities
Act”), or the Securities and Exchange Act of 1934, as amended
(the “Exchange Act”), or
provided or made available to Investors or prospective Investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization.  In the event that the
Disclosure Document is required to be revised prior to the sale of all
Securities, Borrower will cooperate with the holder of the Note in updating the
Disclosure Document by providing all current information necessary to keep the
Disclosure Document accurate and complete in all material respects.


(b)                                 Borrower
agrees to provide in connection with each of (i) a preliminary and a final
private placement memorandum or (ii) a preliminary and final prospectus or
prospectus supplement, as applicable, or (iii) collateral and structured term
sheets or similar materials, an indemnification certificate (A) certifying that
Borrower has carefully examined such memorandum or prospectus or term sheets,
as applicable, solely with respect to the factual contents thereof related to
the Loan, the Mezzanine Loan, Borrower, Mezzanine Borrower, Guarantor, Manager,
the Property, the collateral for the Mezzanine Loan and the Provided
Information, including, without limitation, the sections entitled “Special
Considerations,” “Description of the Mortgages,” “Description of the Mortgage
Loans and Mortgaged Property,” “The Manager,” “The Borrower” and “Certain Legal
Aspects of the Mortgage Loan,” and such sections (and any other sections
reasonably requested) do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made,
in



 80
 









the light of the circumstances
under which they were made, not misleading, (B) indemnifying Lender (and for
purposes of this Section 9.2, Lender hereunder shall include its officers and
directors), the Affiliate of Lender (“Citigroup”)
that has filed the registration statement relating to the Securitization (the “Registration Statement”),
each of its directors, each of its officers who have signed the Registration
Statement and each Person who controls the Affiliate within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively, the “Citigroup
Group”), and Citigroup, each of its directors and each Person
who controls Citigroup within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any losses, claims, damages or
liabilities (collectively, the “Liabilities”)
to which Lender, the Citigroup Group or the Underwriter Group may become
subject insofar as the Liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such sections
described in clause (A) above (but solely with respect to the factual contents
thereof relating to the Loan, the Mezzanine Loan, Borrower, Mezzanine Borrower,
Guarantor, Manager, the Property, the collateral for the Mezzanine Loan and the
Provided 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
sections (as they relate to such matters) or necessary in order to make the
statements in such sections or in light of the circumstances under which they
were made, not misleading and (C) agreeing to reimburse Lender, the Citigroup
Group and the Underwriter Group for any legal or other expenses reasonably
incurred by Lender the Citigroup Group and the Underwriter Group in connection
with investigating or defending the Liabilities; provided, however, that
Borrower will be liable in any such case under clauses (B) or (C) above only to
the extent that any such Liability arises out of or is based upon any such
untrue statement or omission made therein in reliance upon and in conformity
with information furnished to Lender by or on behalf of Borrower in connection
with the preparation of the memorandum or prospectus or in connection with the
underwriting of the debt, including, without limitation, financial statements
of Borrower, operating statements, rent rolls, environmental site assessment
reports and property condition reports with respect to the Property.  This indemnification will be in addition to
any liability which Borrower may otherwise have.  Moreover, the indemnification provided for in
clauses (B) and (C) above shall be effective whether or not an indemnification
certificate described in (A) above is provided and shall be applicable based on
information previously provided by Borrower or its Affiliates if Borrower does
not provide the indemnification certificate.


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


(d)                                 Promptly
after receipt by an indemnified party under this Section 9.2 of notice of the
commencement of any action, such indemnified party will, if a claim in respect



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thereof is to be made against
the indemnifying party under this Section 9.2, notify the indemnifying party in
writing of the commencement thereof, but the omission to so notify the
indemnifying party will not relieve the indemnifying party from any liability
which the indemnifying party may have to any indemnified party hereunder except
to the extent that failure to notify causes prejudice to the indemnifying
party.  In the event that any action is
brought against any indemnified party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled, jointly
with any other indemnifying party, to participate therein and, to the extent
that it (or they) may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel satisfactory to such
indemnified party.  After notice from the
indemnifying party to such indemnified party under this Section 9.2 the
indemnifying party shall not be responsible for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there are any legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
to parties.  The indemnifying party shall
not be liable for the expenses of more than one such separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another indemnified party.


(e)                                  In
order to provide for just and equitable contribution in circumstances in which
the indemnifications provided for in Section 9.2(b) or (c) is or are for any
reason held to be unenforceable by an indemnified party in respect of any
Liabilities (or action in respect thereof) referred to therein which would
otherwise be indemnifiable under Section 9.2(b) or (c), the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such Liabilities (or action in respect thereof); provided, however,
that no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.  In determining the amount of contribution to
which the respective parties are entitled, the following factors shall be
considered: (i) Citigroup’s and Borrower’s relative knowledge and access to
information concerning the matter with respect to which claim was asserted;
(ii) the opportunity to correct and prevent any statement or omission; and
(iii) any other equitable considerations appropriate in the circumstances.  Lender and  Borrower
hereby agree that it would not be equitable if the amount of such contribution
were determined solely by pro rata or per capita allocation.


(f)                                    Notwithstanding
anything to the contrary contained in this Section 9.2, nothing contained in
this Section 9.2 shall impose liability upon Borrower for any losses, claims,
damages or liability arising out of or based upon an untrue statement of any
material fact contained in any statement, report or document provided to Lender
on behalf of Borrower by a party who is not an Affiliate of Borrower (a “Third Party Report”), unless
Borrower had actual knowledge at the time Borrower provided such statement,
report or document to Lender that such Third Party Report contains such untrue
statement.



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(g)                                 The
liabilities and obligations of both Borrower and Lender under this Section 9.2
shall survive the termination of this Agreement and the satisfaction and
discharge of the Debt.


9.3                               Reallocation
of Loan Amounts.


(a)                                  Lender,
without in any way limiting its other rights hereunder, in its sole and
absolute discretion, shall have the right, at any time prior to a
Securitization, to reallocate the amount of the Loan and the Mezzanine Loan
(including, without limitation, the amounts and obligations to make Additional
Advances thereunder) and/or adjust the interest rate rates thereon provided
that (i) the aggregate principal amount of the Loan and the Mezzanine Loan
immediately following such reallocation shall equal the outstanding principal
balance of the Loan and the Mezzanine Loan immediately prior to such
reallocation, and (ii) the weighted average of the interest rate spreads for
the Loan and the Mezzanine Loan after such reallocation shall not exceed the
weighted average of the interest rate spreads for the Loan and the Mezzanine
Loan immediately prior to such reallocation (without giving effect to any
deviation attributable to the imposition of any rate of interest at the Default
Rate, default prepayments pursuant to Section 2.3.1 hereof or mandatory prepayments
pursuant to Section 2.3.2 hereof), it being understood and agreed that such
weighted average of the interest rate spreads after such reallocation shall not
exceed LIBOR plus 1.75% (without giving effect to any deviation attributable to
the imposition of any rate of interest at the Default Rate, default prepayments
pursuant to Section 2.3.1 hereof or mandatory prepayments pursuant to Section
2.3.2 hereof).  Borrower shall cooperate
with all reasonable requests of Lender in order to reallocate the amount of the
Loan and the Mezzanine Loan and shall execute and deliver such documents as
shall reasonably be required by Lender in connection therewith, including,
without limitation, amendments to the Loan Documents and the Mezzanine Loan
Documents, and endorsements to the Title Insurance Policy and the UCC title
insurance policy, all in form and substance reasonably satisfactory to Lender.


(b)                                 All
reasonable third party costs and expenses incurred by Lender or Borrower in
connection with Borrower’s complying with requests made under this Section 9.3
(other than legal fees and disbursements of Borrower’s counsel) shall be paid
by Lender but Borrower shall pay all legal fees and disbursements of Borrower’s
counsel.  The foregoing shall not limit
Borrower’s obligation under Section 9.2 hereof.


9.4                               Intercreditor
Agreement.  Lender and Mezzanine
Lender are or will be parties to a certain intercreditor agreement (the “Intercreditor Agreement”)
memorializing their relative rights and obligations with respect to the Loan,
the Mezzanine Loan, Borrower, Mezzanine Borrower, the Collateral and the
Property.  Borrower hereby acknowledges
and agrees that (i) such Intercreditor Agreement is intended solely for the
benefit of Lender and Mezzanine Lender and (ii) Borrower and Mezzanine Borrower
are not intended third-party beneficiaries of any of the provisions therein and
shall not be entitled to rely on any of the provisions contained therein.  Lender and Mezzanine Lender shall have no
obligation to disclose to Borrower the contents of the Intercreditor
Agreement.  Borrower’s obligations
hereunder are independent of such Intercreditor Agreement and remain unmodified
by the terms and provisions thereof.



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10.                               MISCELLANEOUS


10.1        Exculpation.  (a)  Subject to the qualifications
below, Lender shall not enforce the liability and obligation of Borrower to
perform and observe the obligations contained in the Loan Documents by any
action or proceeding wherein a money judgment shall be sought against Borrower,
except that Lender may bring a foreclosure action, an action for specific
performance or any other appropriate action or proceeding to enable Lender to
enforce and realize upon its interest and rights under the Loan Documents, or
in the Property, the Rents or any other collateral given to Lender pursuant to
the Loan Documents; provided, however, that, except as specifically provided
herein, any judgment in any such action or proceeding shall be enforceable against
Borrower only to the extent of Borrower’s interest in the Property, in the
Rents and in any other collateral given to Lender, and Lender shall not sue
for, seek or demand any deficiency judgment against Borrower in any such action
or proceeding under or by reason of or under or in connection with any Loan
Document.  The provisions of this Section
shall not, however, (i) constitute a waiver, release or impairment of any
obligation evidenced or secured by any Loan Document; (ii) impair the
right of Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under the Mortgage; (iii) affect the validity or
enforceability of any of the Loan Documents or any guaranty made in connection
with the Loan or any of the rights and remedies of Lender thereunder;
(iv) impair the right of Lender to obtain the appointment of a receiver;
(v) impair the enforcement of the Assignment of Leases;
(vi) constitute a prohibition against Lender to commence any other
appropriate action or proceeding in order for Lender to fully realize the
security granted by the Mortgage or to exercise its remedies against the
Property; or (vii) constitute a waiver of the right of Lender to enforce
the liability and obligation of Borrower, by money judgment or otherwise, to
the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Lender (including attorneys’ fees and costs reasonably
incurred) (collectively, “Lender’s
Losses”) arising out of or in connection with any of the following
(all such liability and obligation of Borrower for any or all of the following
being referred to herein as “Borrower’s Recourse Liabilities”): (a) fraud or
intentional misrepresentation by Borrower, or Guarantor in connection with
obtaining the Loan; (b) physical waste of the Property or any portion thereof
(other than acts committed by a third party non-affiliated property manager),
or after an Event of Default the removal or disposal of any portion of the
Property (other than acts committed by a third party non-affiliated property
manager); (c) any Proceeds paid by reason of any Insured Casualty or any
Award received in connection with a Condemnation or other sums or payments
attributable to the Property not applied in accordance with the provisions of
the Loan Documents (other than acts committed by a third party non-affiliated
property manager) (except to the extent that Borrower did not have the legal
right, because of a bankruptcy, receivership or similar judicial proceeding, to
direct disbursement of such sums or payments); (d) all Rents of the
Property received or collected by or on behalf of Borrower after an Event of
Default and not applied to payment of Principal and interest due under the
Note, and to the payment of actual and reasonable operating expenses of the
Property, as they become due or payable (other than acts committed by a third
party non-affiliated property manager) (except to the extent that such
application of such funds is prevented by bankruptcy, receivership, or similar
judicial proceeding in which Borrower is legally prevented from directing the
disbursement of such sums); (e) misappropriation (including failure to
turn over to Lender on demand following an Event of Default) of tenant security
deposits and rents collected in advance, or of funds held by Borrower for the
benefit of another party (other than acts committed by a third party
non-affiliated property manager); (f) the failure to pay Taxes,



 84
 









provided that Borrower shall not be liable
(A) to the extent funds to pay such amounts are available in the Tax and
Insurance Subaccount and Lender failed to pay same or has elected not to pay
the same pursuant to Section 3.3 or (B) Rents are insufficient to yield
sufficient funds to pay such amounts; (g) the breach of any representation,
warranty, covenant or indemnification in any Loan Document concerning
Environmental Laws or Hazardous Substances, including Sections 4.21 and 5.8,
and clauses (viii) through (xi) of Section 5.30; (h) any
representation or warranty made by Borrower in Section 4.1 shall be false or
misleading in any material respect as of the date made, or the breach of the
covenants set forth in Section 5.13 (other than a breach of any of the
covenants described in clauses (x) and (xxi) (with respect to unsecured trade
payables) set forth in the definition of “Special Purpose Bankruptcy Remote
Entity” on Schedule 5, if the same occurs as a result of the economic
performance of the Property); (i) Borrower or Guarantor or any of their direct
or indirect Affiliates taking any action or making any omission intended or
reasonably likely to hinder, delay, impair or prevent Lender in or from
enforcing any and all of its rights and remedies under or pursuant to the Loan
Documents or at law or in equity (unless the same is brought in good faith and
is determined in favor of Borrower or Guarantor pursuant to a final,
non-appealable judgment of a court of competent jurisdiction); (j) the
termination of the Management Agreement or the removal of the then-current
Manager as property manager thereunder without Lender’s consent; or (k)
Borrower’s misappropriation or failure to pay to the appropriate parties the
amounts due and owing to such parties for which a disbursement request was made
pursuant to Section 3.13 where such disbursement was made directly to Borrower
(provided, however, there shall be no liability with respect to a particular
disbursement in the event that evidence reasonably satisfactory to Lender has
been delivered which shows that such disbursement has been applied to the
payment of sums for which such disbursement was requested).


(b)           Notwithstanding anything to the
contrary in this Agreement or any of the Loan Documents, (A) Lender shall
not be deemed to have waived any right which Lender may have under Section
506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy
Code to file a claim for the full amount of the Debt or to require that all
collateral shall continue to secure all of the Debt in accordance with the Loan
Documents, and (B) Lender’s agreement not to pursue personal liability of
Borrower as set forth above SHALL BECOME NULL AND VOID and shall be of no
further force and effect, and the Debt shall be fully recourse to the Borrower
in an amount equal to the greater of (x) Lender’s Losses arising out of or in
connection with the following matters or (y) an amount equal to the unpaid
balance of the Debt, in the event that one or more of the following occurs
(each, a “Springing Recourse Event”):
(i) an Event of Default described in Section 8.1(d) shall have
occurred, (ii) the occurrence of any condition or event described in
either Section 8.1(f)(i) (with respect to Borrower only) or Section
8.1(g) (with respect to Borrower only) (each, an “Insolvency Action”) and, with respect to such Insolvency
Action described in Section 8.1(g), either Borrower, Guarantor or any Person
owning an interest (directly or indirectly) in Borrower or Guarantor
consents to, aids, solicits, supports, or otherwise cooperates or colludes to
cause such Insolvency Action or fails to contest such Insolvency Action, except
in the event that any such party has a fiduciary or legal duty to take such
action, (iii) any involuntary bankruptcy proceeding is brought by Borrower or
Guarantor or any of their respective Affiliates against any of them; (iv) if
subsequent to the commencement of any voluntary bankruptcy proceeding with
respect to Borrower, any involuntary bankruptcy proceeding is brought by Lender
against Borrower, and Borrower or Guarantor files any motion contesting the same;
or (v) Borrower, Guarantor or any



 85
 









of their respective Affiliates
brings or joins in any action or proceeding for the partition of the Property
or any portion thereof or interest therein.


10.2        Brokers and Financial Advisors.  Borrower hereby represents that it has dealt
with no financial advisors, brokers, underwriters, placement agents, agents or
finders in connection with the Loan, other than Northmarq Capital, Inc., whose
fee shall be paid by Borrower or an affiliate of Borrower (to the extent such affiliate
is liable for the payment of the same). 
Borrower shall indemnify and hold Lender harmless from and against any
and all claims, liabilities, costs and expenses (including attorneys’ fees,
whether incurred in connection with enforcing this indemnity or defending
claims of third parties) of any kind in any way relating to or arising
from a claim by any Person that such Person acted on behalf of Borrower in
connection with the transactions contemplated herein.  The provisions of this Section 10.2 shall survive
the expiration and termination of this Agreement and the repayment of the Debt.


10.3        Retention of Servicer.  Lender reserves the right to retain the
Servicer to act as its agent hereunder with such powers as are specifically
delegated to the Servicer by Lender, whether pursuant to the terms of this
Agreement, any pooling and servicing agreement or similar agreement entered
into as a result of a Secondary Market Transaction, the Deposit Account
Agreement or otherwise, together with such other powers as are reasonably
incidental thereto.  Borrower shall pay
any reasonable fees and expenses of the Servicer in connection with a release
of the Property, assumption or modification of the Loan, enforcement of the
Loan Documents or any other action taken by Servicer hereunder on behalf of
Lender, to the extent such actions are permitted to be taken pursuant to the
terms of the Loan Documents, but only to the extent that Borrower is expressly
required to pay such expenses pursuant to the terms of this Agreement.  Notwithstanding anything to the contrary
contained herein, to the extent any matter described in this Agreement requires
the consent or approval of the special servicer under the pooling and servicing
agreement (or other similar agreement) entered into in connection with a
Securitization, such special servicer shall be afforded a consent period for
such matter equal to the greater of (i) the period of time given to Lender
hereunder within which to consent or approve such matter, or (ii) 15 Business
Days (to the extent such 15 Business Day period is required under the terms of
such pooling and servicing agreement).


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


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



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10.6        Governing Law.


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


(b)           ANY LEGAL SUIT, ACTION OR PROCEEDING
AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL
BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK COUNTY, NEW YORK  AND BORROWER WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. 
BORROWER DOES HEREBY DESIGNATE AND APPOINT CT CORPORATION SYSTEM, 111
EIGHTH AVENUE, NEW YORK, NEW YORK 10011 AS ITS AUTHORIZED AGENT TO ACCEPT AND
ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN
ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK,
NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS
AND WRITTEN NOTICE OF SAID SERVICE OF BORROWER MAILED OR DELIVERED TO BORROWER
IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON BORROWER (UNLESS LOCAL LAW REQUIRES ANOTHER METHOD OF
SERVICE), IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK.  BORROWER (i) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (ii) MAY
AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH
AN OFFICE IN NEW



 87
 









YORK, NEW YORK (WHICH OFFICE
SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND
(iii) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT
CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING
A SUCCESSOR.


10.7        Modification, Waiver in Writing.  No modification, amendment, extension,
discharge, termination or waiver of any provision of this Agreement or of any
other Loan Document, nor consent to any departure by Borrower therefrom, shall
in any event be effective unless the same shall be in a writing signed by the
party against whom enforcement is sought, and then such waiver or consent shall
be effective only in the specific instance, and for the purpose, for which
given.  Except as otherwise expressly
provided herein, no notice to or demand on Borrower shall entitle Borrower to
any other or future notice or demand in the same, similar or other
circumstances.  Neither any failure nor
any delay on the part of Lender in insisting upon strict performance of any
term, condition, covenant or agreement, or exercising any right, power, remedy
or privilege hereunder, or under any other Loan Document, shall operate as or
constitute a waiver thereof, nor shall a single or partial exercise thereof
preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege.  In particular, and
not by way of limitation, by accepting payment after the due date of any amount
payable under any Loan Document, Lender shall not be deemed to have waived any
right either to require prompt payment when due of all other amounts due under
the Loan Documents, or to declare an Event of Default for failure to effect
prompt payment of any such other amount.


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


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


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


10.11      Preferences.  Upon the occurrence and continuance of an
Event of Default, Lender shall have the continuing and exclusive right to apply
any and all payments by Borrower



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


10.12      Waiver of Notice.  Borrower shall not be entitled to any notices
of any nature whatsoever from Lender except with respect to matters for which
this Agreement or any other Loan Document specifically and expressly requires
the giving of notice by Lender to Borrower and except with respect to matters
for which Borrower is not, pursuant to applicable Legal Requirements, permitted
to waive the giving of notice.  Borrower
hereby expressly waives the right to receive any notice from Lender with
respect to any matter for which no Loan Document specifically and expressly
requires the giving of notice by Lender to Borrower.


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


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


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



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10.16      Publicity.  All news releases, publicity or advertising
by Borrower or its Affiliates through any media intended to reach the general
public, which refers to the Loan Documents, the Loan, Lender or any member of
the Citigroup Group, a Loan purchaser, the Servicer or the trustee in a
Secondary Market Transaction, shall be subject to the prior written approval of
Lender; provided however, that Lender’s consent shall not be required by Borrower,
Borrower’s Affiliates, or any broker dealer or investor representative related
to the marketing or sale of any investment fund or investment trust managed by
Borrower’s Affiliates which disclosure is required under the Securities Act of
1933 or 1934 or to any potential purchaser of an interest in the Property.  Lender shall have the right to issue any of
the foregoing without Borrower’s approval.


10.17      No Usury.  Borrower and Lender intend at all times to
comply with applicable state law or applicable United States federal law (to
the extent that it permits Lender to contract for, charge, take, reserve or
receive a greater amount of interest than under state law) and that this
Section 10.17 shall control every other agreement in the Loan Documents.  If the applicable law (state or
federal) is ever judicially interpreted so as to render usurious any
amount called for under the Note or any other Loan Document, or contracted for,
charged, taken, reserved or received with respect to the Debt, or if Lender’s
exercise of the option to accelerate the maturity of the Loan or any prepayment
by Borrower results in Borrower having paid any interest in excess of that
permitted by applicable law, then it is Borrower’s and Lender’s express intent
that all excess amounts theretofore collected by Lender shall be credited
against the unpaid Principal and all other Debt (or, if the Debt has been or
would thereby be paid in full, refunded to Borrower), and the provisions of the
Loan Documents immediately be deemed reformed and the amounts thereafter
collectible thereunder reduced, without the necessity of the execution of any
new document, so as to comply with applicable law, but so as to permit the
recovery of the fullest amount otherwise called for thereunder.  All sums paid or agreed to be paid to Lender
for the use, forbearance or detention of the Loan shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Debt does not exceed the maximum
lawful rate from time to time in effect and applicable to the Debt for so long
as the Debt is outstanding. 
Notwithstanding anything to the contrary contained in any Loan Document,
it is not the intention of Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.


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


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



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10.20      Spread Maintenance Premium.  Borrower acknowledges that (a) Lender is
making the Loan in consideration of the receipt by Lender of all interest and
other benefits intended to be conferred by the Loan Documents and (b) if
payments of Principal are made to Lender prior to June 14, 2008, for any reason
whatsoever, whether voluntary, as a result of Lender’s acceleration of the Loan
after an Event of Default, by operation of law or otherwise, Lender will not
receive all such interest and other benefits and may, in addition, incur
costs.  For these reasons, and to induce
Lender to make the Loan, Borrower agrees that, except as expressly provided in
Section 2.2.5, Section 2.3.2, Section 2.3.4 and Section 7.4.2 of this Agreement,
all prepayments, if any, whether voluntary or involuntary, will be accompanied
by the Spread Maintenance Premium.  Such
Spread Maintenance Premium shall be required whether payment is made by
Borrower, by a Person on behalf of Borrower, or by the purchaser at any
foreclosure sale, and may be included in any bid by Lender at such sale.  Borrower further acknowledges that (A) it is
a knowledgeable real estate developer and/or investor; (B) it fully understands
the effect of the provisions of this Section 10.20, as well as the other
provisions of the Loan Documents; (C) the making of the Loan by Lender at
the Interest Rate and other terms set forth in the Loan Documents are
sufficient consideration for Borrower’s obligation to pay a Spread Maintenance
Premium (if required); and (D) Lender would not make the Loan on the terms
set forth herein without the inclusion of such provisions.  Borrower also acknowledges that the
provisions of this Agreement limiting the right of prepayment and providing for
the payment of the Spread Maintenance Premium and other charges specified
herein were independently negotiated and bargained for, and constitute a
specific material part of the consideration given by Borrower to Lender for the
making of the Loan except as expressly permitted hereunder.


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


10.22      Borrower’s Designee.  Borrower hereby authorizes, designates and
directs Borrower’s Designee to give Lender directions of any kind, to take the
actions or make such deliveries specified herein to be taken or delivered by
Borrower’s Designee (including under Sections 5.11, 6.3 and 9.1, and including
with respect to any requisitions from any reserve accounts under Article 3) and
to give and receive notices of any kind on behalf of Borrower under this
Agreement or any of the other Loan Documents. 
Any notice given by Lender to Borrower’s Designee shall be deemed to
have been given to each and every Borrower.


10.23      Intentionally Omitted.


10.24      Set-Off.  In addition to any rights and remedies of
Lender provided by this Agreement and by law, Lender shall have the right,
without prior notice to Borrower, any such notice being expressly waived by
Borrower to the extent permitted by applicable law, upon any amount becoming
due and payable by Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against



 91
 









such amount
any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by Lender or any Affiliate
thereof to or for the credit or the account of Borrower.  Lender agrees promptly to notify Borrower
after any such set-off and application made by Lender; provided that the
failure to give such notice shall not affect the validity of such set-off and
application.


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



 92















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


	
  

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD SANTA CLARA LP,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BEHRINGER HARVARD SANTA

  CLARA GP, LLC, a Delaware limited

  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  CITIGROUP GLOBAL MARKETS REALTY

  CORP., a New York corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						



 


















Schedule 1



 1-1















Schedule 2


Required Repairs


















Schedule 3


Exceptions to Representations and Warranties


1.             Title and rights of use / access
representations and warranties with respect to the Property expressly except
any rights of use of the portion of the Property described in that certain
unrecorded Groundwater Monitoring Well Sale and Access Agreement Language,
dated as of January 11, 2006, between Sobrato Development Companies
(predecessor-in-interest to Borrower) and Pharmacia Corporation, if any, as
Pharmacia may have under such unrecorded instrument.



 3-1















Schedule
4


Organization of Borrower



 4-1















Schedule 5


Definition of Special Purpose Bankruptcy Remote
Entity


A “Special
Purpose Bankruptcy Remote Entity” means (x) a limited
liability company that is a Single Member Bankruptcy Remote LLC, or (y) a
corporation, limited partnership or limited liability company which at all
times since its formation and at all times thereafter (i) was and will be
organized solely for the purpose of (A) owning or leasing the Property or
(B) acting as a general partner of the limited partnership that owns or
leases the Property or member of the limited liability company that owns or
leases the Property; (ii) has not engaged and will not engage in any
business unrelated to (A) the ownership or leasing of the Property,
(B) acting as general partner of the limited partnership that owns or
leases the Property or (C) acting as a member of the limited liability
company that owns or leases the Property, as applicable; (iii) has not had
and will not have any assets other than those related to the Property or its
partnership or member interest in the limited partnership or limited liability
company that owns or leases the Property, as applicable; (iv) has not
engaged, sought or consented to and will not engage in, seek or consent to any
(A) dissolution, winding up, liquidation, consolidation, merger, asset sale
(except as expressly permitted by this Agreement), transfer of partnership or
membership interests or the like, or (B) amendment of its limited partnership
agreement, articles of incorporation, articles of organization, certificate of
formation or operating agreement (as applicable); (v) if such entity is a
limited partnership, has and will have, as its only general partners, Special
Purpose Bankruptcy Remote Entities that are corporations or that are Single
Member Bankruptcy Remote LLC’s; (vi) if such entity is a corporation or a
Single Member Bankruptcy Remote LLC, has and will have at least one Independent
Director, and has not caused or allowed and will not cause or allow the board
of directors or board of managers, as applicable, of such entity to take any
action requiring the unanimous affirmative vote of one hundred percent (100%)
of the members of its board of directors or board of managers, as applicable,
unless all of the directors or managers, as applicable, and all Independent
Directors shall have participated in such vote; (vii) if such entity is a
limited liability company, has and will have at least one member that has been
and will be a Special Purpose Bankruptcy Remote Entity that has been and will
be a corporation or a Single Member Bankruptcy Remote LLC and such corporation
or such Single Member Bankruptcy Remote LLC is the managing member of such
limited liability company; (viii) if such entity is a limited liability
company with more than one member, has and will have articles of organization,
a certificate of formation and/or an operating agreement, as applicable,
providing that (A) such entity will dissolve only upon the bankruptcy of
the managing member, (B) the vote of a majority-in-interest of the
remaining members is sufficient to continue the life of the limited liability
company in the event of such bankruptcy of the managing member and (C) if
the vote of a majority-in-interest of the remaining members to continue the
life of the limited liability company following the bankruptcy of the managing
member is not obtained, the limited liability company may not liquidate the
Property without the consent of the applicable Rating Agencies for as long as
the Loan is outstanding; (ix) has not, and without the unanimous consent
of all of its partners, directors or members (including all Independent
Directors), as applicable, will not, with respect to itself or to any other
entity in which it has a direct or indirect legal or beneficial ownership
interest (A) file a bankruptcy, insolvency or reorganization petition or
otherwise institute insolvency proceedings or otherwise seek any relief under
any laws relating to the relief from



 5-1
 









debts or the protection
of debtors generally, (B) seek or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar
official for such entity or for all or any portion of such entity’s properties,
(C) make any assignment for the benefit of such entity’s creditors or
(D) take any action that might cause such entity to become insolvent;
(x) has remained and will remain solvent and has maintained and will
maintain adequate capital in light of its contemplated business operations;
(xi) has not failed and will not fail to correct any known misunderstanding
regarding the separate identity of such entity; (xii) has maintained and
will maintain its accounts, books and records separate from any other Person;
provided, however, that the financial statements of such Person may be included
in the consolidated financial statements of another Person in accordance with
GAAP, provided that in each case, such financial statements identify such
Person as a separate member of such consolidated group and include an express
statement to the effect that the assets of such Person are not available to
satisfy the claims of creditors of such other Person, and will file its own tax
returns; provided, however, that if such entity is a so-called “disregarded
entity” under applicable law for tax purposes, and such entity is required or
permitted to be included in a consolidated return of another entity, then such
entity may be included in the consolidated return of such other entity;
(xiii) has maintained and will maintain its books, records, resolutions
and agreements as official records; (xiv) has not commingled and will not
commingle its funds or assets with those of any other Person; (xv) has
held and will hold its assets in its own name; (xvi) has conducted and
will conduct its business in its name or under the trade name of the Property,
(xvii) subject to the proviso in clause (xii) above, has maintained and
will maintain its financial statements, accounting records and other entity
documents separate from any other Person; (xviii) has paid and will pay
its own liabilities, including the salaries of its own employees, out of its
own funds and assets; (xix) has observed and will observe all partnership,
corporate or limited liability company formalities, as applicable;
(xx) subject to sub clause (xxx) below, has maintained and will maintain
an arm’s-length relationship with its Affiliates; (xxi) (a) if such
entity owns the Property, has and will have no indebtedness other than the Loan
and Permitted Indebtedness (subject to the provisions of Section 5.22 of this
Agreement), or (b) if such entity acts as the general partner of a limited
partnership which owns the Property, has and will have no indebtedness (in
addition to such liability as it has by virtue of its status as general
partner) other than unsecured trade payables in the ordinary course of business
relating to acting as general partner of the limited partnership which owns the
Property which (1) do not exceed, at any time, $10,000 and (2) are
paid within thirty (30) days of the date incurred, or (c) if such
entity acts as a managing member of a limited liability company which owns the
Property, has and will have no indebtedness other than unsecured trade payables
in the ordinary course of business relating to acting as a member of the
limited liability company which owns the Property which (1) do not exceed,
at any time, $10,000 and (2) are paid within thirty (30) days of the date
incurred; (xxii) except, if applicable, by virtue of its status as a
general partner, has not and will not assume or guarantee or become obligated
for the debts of any other Person or hold out its credit as being available to
satisfy the obligations of any other Person except for the Loan;
(xxiii) has not and will not acquire obligations or securities of its
partners, members or shareholders; (xxiv) has allocated and will allocate
fairly and reasonably shared expenses, including shared office space, and uses
separate stationery, invoices and checks; (xxv) except in connection with
the Loan, has not pledged and will not pledge its assets for the benefit of any
other Person; (xxvi) has held itself out and identified itself and will
hold itself out and identify itself as a separate and distinct entity under its
own name and not as a division or part of any other Person; (xxvii) has maintained
and will maintain its assets



 5-2
 









in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any other Person; (xxviii) has not made and
will not make loans to any Person; (xxix) has not identified and will not
identify its partners, members or shareholders, or any Affiliate of any of
them, as a division or part of it; (xxx) except for the Management
Agreement, has not entered into or been a party to, and will not enter into or
be a party to, any transaction with its partners, members, shareholders or
Affiliates except in the ordinary course of its business and on terms which are
intrinsically fair and are no less favorable to it than would be obtained in a
comparable arm’s-length transaction with an unrelated third party;
(xxxi) has and will have no obligation to indemnify its partners,
officers, directors, members or Special Members, as the case may be, or has
such an obligation that is fully subordinated to the Debt and will not constitute
a claim against it if cash flow in excess of the amount required to pay the
Debt is insufficient to pay such obligation; and (xxxii) to the fullest
extent permitted under applicable law, will consider the interests of its
creditors in connection with all corporate, partnership or limited liability
actions, as applicable.


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



 5-3
 









Director, an Independent
Director of a “special purpose entity” affiliated with the Borrower (other than
any entity that owns a direct or indirect equity interest in the Borrower).


“Single
Member Bankruptcy Remote LLC” means a limited liability company
organized under the laws of the State of Delaware which at all times since its
formation and at all times thereafter (i) complies with the following
clauses of the definition of Special Purpose Bankruptcy Remote Entity
above:  (i), (ii), (iii), (iv), (ix),
(x), (xi) and (xiii) through (xxxii); (ii) has maintained and will
maintain its accounts, books and records separate from any other person;
(iii) has and will have an operating agreement which provides that the
business and affairs of such Single Member Bankruptcy Remote LLC shall be
managed by its sole member (the “Sole Member”),
and at all times there shall be at least one duly appointed Independent
Director, and the Sole Member will not, without the written consent of its
Independent Director (1) take any action affecting its status as a “Special
Purpose Bankruptcy Remote Entity” (as set forth in this Schedule 5) or (2) take
any other “Material Action” (which for purposes hereof means any action to
consolidate or merge such Single Member Bankruptcy Remote LLC with or into any
Person, or sell all or substantially all of the assets of such Single Member
Bankruptcy Remote LLC other than in connection with a payment in full of the
Loan in accordance with the terms of the Loan Documents, or to institute
proceedings to have such Single Member Bankruptcy Remote LLC be adjudicated
bankrupt or insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against such Single Member Bankruptcy Remote LLC or file
a petition seeking, or consent to, reorganization or relief with respect to
such Single Member Bankruptcy Remote LLC under any applicable federal or state
law relating to bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of such
Single Member Bankruptcy Remote LLC or a substantial part of its property, or
make any assignment for the benefit of creditors of such Single Member
Bankruptcy Remote LLC, or admit in writing such Single Member Bankruptcy Remote
LLC’s inability to pay its debts generally as they become due, or take action
in furtherance of any such action, or, to the fullest extent permitted by
law,  dissolve or liquidate such Single
Member Bankruptcy Remote LLC); (iv)  has and will have an operating
agreement which provides that, as long as any portion of the Debt remains
outstanding, (A) upon the occurrence of any event that causes Sole Member to
cease to be a member of such Single Member Bankruptcy Remote LLC (other than
(x) upon an assignment by Sole Member of all of its limited liability
company interest in such Single Member Bankruptcy Remote LLC and the admission
of the transferee, if permitted pursuant to the organizational documents of
such Single Member Bankruptcy Remote LLC and the Loan Documents, or (y) the resignation
of Sole Member and the admission of an additional member of such Single Member
Bankruptcy Remote LLC, if permitted pursuant to the organizational documents of
such Single Member Bankruptcy Remote LLC and the Loan Documents), the person
acting as an Independent Director of such Single Member Bankruptcy Remote LLC
shall, without any action of any Person and simultaneously with Sole Member
ceasing to be a member of such Single Member Bankruptcy Remote LLC,
automatically be admitted as the sole member of such Single Member Bankruptcy
Remote LLC (the “Special Member”) and shall
preserve and continue the existence of such Single Member Bankruptcy Remote LLC
without dissolution, (B) no Special Member may resign or transfer its rights as
Special Member unless (x) a successor Special Member has been admitted to
such Single Member Bankruptcy Remote LLC as a Special Member, and (y) such
successor Special Member has also accepted its appointment as an Independent
Director and (C) except as expressly permitted pursuant to the terms of this
Agreement, Sole Member may not resign and no additional member shall be
admitted to such Single Member Bankruptcy Remote



 5-4
 









LLC; (v) has and
will have an operating agreement which provides that, as long as any portion of
the Debt remains outstanding, (A) such Single Member Bankruptcy Remote LLC
shall be dissolved, and its affairs shall be would up only upon the first to
occur of the following: (x) the termination of the legal existence of the
last remaining member of such Single Member Bankruptcy Remote LLC or the
occurrence of any other event which terminates the continued membership of the
last remaining member of such Single Member Bankruptcy Remote LLC in such
Single Member Bankruptcy Remote LLC unless the business of such Single Member
Bankruptcy Remote LLC is continued in a manner permitted by its operating
agreement or the Delaware Limited Liability Company Act (the “Act”) or (y) the entry of a decree
of judicial dissolution under Section 18-802 of the Act; (B) upon
the occurrence of any event that causes the last remaining member of such
Single Member Bankruptcy Remote LLC to cease to be a member of such Single
Member Bankruptcy Remote LLC or that causes Sole Member to cease to be a member
of such Single Member Bankruptcy Remote LLC (other than (x) upon an
assignment by Sole Member of all of its limited liability company interest in
such Single Member Bankruptcy Remote LLC and the admission of the transferee,
if permitted pursuant to the organizational documents of such Single Member
Bankruptcy Remote LLC and the Loan Documents, or (y) the resignation of Sole
Member and the admission of an additional member of such Single Member
Bankruptcy Remote LLC, if permitted pursuant to the organizational documents of
such Single Member Bankruptcy Remote LLC and the Loan Documents), to the
fullest extent permitted by law, the personal representative of such member
shall be authorized to, and shall, within 90 days after the occurrence of the
event that terminated the continued membership of such member in such Single
Member Bankruptcy Remote LLC, agree in writing to continue the existence of
such Single Member Bankruptcy Remote LLC and to the admission of the personal
representative or its nominee or designee, as the case may be, as a substitute
member of such Single Member Bankruptcy Remote LLC, effective as of the
occurrence of the event that terminated the continued membership of such member
in such Single Member Bankruptcy Remote LLC; (C) the bankruptcy of Sole Member
or a Special Member shall not cause such member or Special Member,
respectively, to cease to be a member of such Single Member Bankruptcy Remote
LLC and upon the occurrence of such an event, the business of such Single
Member Bankruptcy Remote LLC shall continue without dissolution; (D) in the
event of dissolution of such Single Member Bankruptcy Remote LLC, such Single
Member Bankruptcy Remote LLC shall conduct only such activities as are
necessary to wind up its affairs (including the sale of the assets of such
Single Member Bankruptcy Remote LLC in an orderly manner), and the assets of
such Single Member Bankruptcy Remote LLC shall be applied in the manner, and in
the order of priority, set forth in Section 18-804 of the Act; and
(E) to the fullest extent permitted by law, each of Sole Member and the Special
Member shall irrevocably waive any right or power that they might have to cause
such Single Member Bankruptcy Remote LLC or any of its assets to be
partitioned, to cause the appointment of a receiver for all or any portion of
the assets of such Single Member Bankruptcy Remote LLC, to compel any sale of
all or any portion of the assets of such Single Member Bankruptcy Remote LLC
pursuant to any applicable law or to file a complaint or to institute any
proceeding at law or in equity to cause the dissolution, liquidation, winding
up or termination of such Single Member Bankruptcy Remote LLC.



 5-5















Schedule 8


Rent Roll


(See Attached)



 8-1















Exhibit A


Out-Parcel


(See Attached)



 8-1