Exhibit 10.5


 


 




 





 


MEZZANINE
LOAN AGREEMENT


Dated as of June 8,
2007


by and between


BEHRINGER HARVARD SANTA CLARA M, LLC


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

  	
  16

  
	
   

  	
  1.3

  	
   

  	
  Principles of Construction

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  GENERAL LOAN TERMS

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
   

  	
  Loan Commitment; Disbursement to Borrower

  	
  19

  
	
   

  	
  2.2

  	
   

  	
  Interest; Loan Payments; Late Payment Charge

  	
  21

  
	
   

  	
  2.3

  	
   

  	
  Loan Repayment

  	
  26

  
	
   

  	
  2.4

  	
   

  	
  Release of Property

  	
  28

  
	
   

  	
  2.5

  	
   

  	
  Payments and Computations

  	
  29

  
	
   

  	
  2.6

  	
   

  	
  Interest Rate Cap Agreement

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  CASH MANAGEMENT AND RESERVES

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
   

  	
  Cash Management Arrangements

  	
  32

  
	
   

  	
  3.2

  	
   

  	
  Required Repairs; Completion of Required Repairs

  	
  32

  
	
   

  	
  3.3

  	
   

  	
  Tax and Insurance Subaccount

  	
  32

  
	
   

  	
  3.4

  	
   

  	
  Interest Reserve Subaccount

  	
  33

  
	
   

  	
  3.5

  	
   

  	
  Intentionally Omitted

  	
  33

  
	
   

  	
  3.6

  	
   

  	
  Casualty/Condemnation Subaccount

  	
  33

  
	
   

  	
  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

  	
  34

  
	
   

  	
  3.11

  	
   

  	
  Intentionally Omitted

  	
  35

  
	
   

  	
  3.12

  	
   

  	
  Tenant Improvement Reserve Subaccount

  	
  35

  
	
   

  	
  3.13

  	
   

  	
  Replacement Reserve Subaccount

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
   

  	
  Organization; Special Purpose

  	
  35

  
	
   

  	
  4.2

  	
   

  	
  Proceedings; Enforceability

  	
  36

  
	
   

  	
  4.3

  	
   

  	
  No Conflicts

  	
  36

  
	
   

  	
  4.4

  	
   

  	
  Litigation

  	
  36

  
	
   

  	
  4.5

  	
   

  	
  Agreements

  	
  36

  
	
   

  	
  4.6

  	
   

  	
  Title

  	
  37

  
	
   

  	
  4.7

  	
   

  	
  No Bankruptcy Filing

  	
  37

  
	
   

  	
  4.8

  	
   

  	
  Full and Accurate Disclosure

  	
  37

  
	
   

  	
  4.9

  	
   

  	
  Tax Filings

  	
  38

  
	
   

  	
  4.10

  	
   

  	
  No Plan Assets

  	
  38

  
	
   

  	
  4.11

  	
   

  	
  Compliance

  	
  38

  
	
   

  	
  4.12

  	
   

  	
  Contracts

  	
  39

  



 



 i
 









 


	
  

  	
   

  	
   

  	
  Page 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.13

  	
   

  	
  Federal Reserve Regulations; Investment Company Act

  	
  39

  
	
   

  	
  4.14

  	
   

  	
  Easements; Utilities and Public Access

  	
  39

  
	
   

  	
  4.15

  	
   

  	
  Physical Condition

  	
  39

  
	
   

  	
  4.16

  	
   

  	
  Leases

  	
  40

  
	
   

  	
  4.17

  	
   

  	
  Fraudulent Transfer

  	
  40

  
	
   

  	
  4.18

  	
   

  	
  Ownership of Borrower

  	
  41

  
	
   

  	
  4.19

  	
   

  	
  Purchase Options

  	
  41

  
	
   

  	
  4.20

  	
   

  	
  Management Agreement

  	
  41

  
	
   

  	
  4.21

  	
   

  	
  Hazardous Substances

  	
  41

  
	
   

  	
  4.22

  	
   

  	
  Name; Principal Place of Business

  	
  42

  
	
   

  	
  4.23

  	
   

  	
  Other Debt

  	
  42

  
	
   

  	
  4.24

  	
   

  	
  Deposit Accounts

  	
  42

  
	
   

  	
  4.25

  	
   

  	
  Affiliates

  	
  42

  
	
   

  	
  4.26

  	
   

  	
  Mortgage Borrower Representations

  	
  42

  
	
   

  	
  4.27

  	
   

  	
  List of Mortgage Loan Documents

  	
  43

  
	
   

  	
  4.28

  	
   

  	
  Mortgage Event of Default

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  COVENANTS

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
   

  	
  Existence

  	
  43

  
	
   

  	
  5.2

  	
   

  	
  Taxes and Other Charges

  	
  43

  
	
   

  	
  5.3

  	
   

  	
  Access to Property

  	
  44

  
	
   

  	
  5.4

  	
   

  	
  Repairs; Maintenance and Compliance; Alterations.

  	
  44

  
	
   

  	
  5.5

  	
   

  	
  Performance of Other Agreements

  	
  45

  
	
   

  	
  5.6

  	
   

  	
  Cooperate in Legal Proceedings

  	
  45

  
	
   

  	
  5.7

  	
   

  	
  Further Assurances

  	
  45

  
	
   

  	
  5.8

  	
   

  	
  Environmental Matters

  	
  46

  
	
   

  	
  5.9

  	
   

  	
  Title to the Property

  	
  48

  
	
   

  	
  5.10

  	
   

  	
  Leases

  	
  49

  
	
   

  	
  5.11

  	
   

  	
  Estoppel Statement

  	
  50

  
	
   

  	
  5.12

  	
   

  	
  Property Management

  	
  51

  
	
   

  	
  5.13

  	
   

  	
  Special Purpose Bankruptcy Remote Entity

  	
  52

  
	
   

  	
  5.14

  	
   

  	
  Assumption in Non-Consolidation Opinion

  	
  52

  
	
   

  	
  5.15

  	
   

  	
  Change In Business or Ownership of the Collateral

  	
  52

  
	
   

  	
  5.16

  	
   

  	
  Debt Cancellation

  	
  53

  
	
   

  	
  5.17

  	
   

  	
  Affiliate Transactions

  	
  53

  
	
   

  	
  5.18

  	
   

  	
  Zoning

  	
  53

  
	
   

  	
  5.19

  	
   

  	
  No Joint Assessment

  	
  53

  
	
   

  	
  5.20

  	
   

  	
  Principal Place of Business

  	
  53

  
	
   

  	
  5.21

  	
   

  	
  Change of Name, Identity or Structure

  	
  53

  
	
   

  	
  5.22

  	
   

  	
  Indebtedness

  	
  54

  
	
   

  	
  5.23

  	
   

  	
  Licenses

  	
  54

  
	
   

  	
  5.24

  	
   

  	
  Compliance with Restrictive Covenants, Etc

  	
  54

  
	
   

  	
  5.25

  	
   

  	
  ERISA

  	
  54

  
	
   

  	
  5.26

  	
   

  	
  Transfers

  	
  55

  
	
   

  	
  5.27

  	
   

  	
  Liens

  	
  55

  
	
   

  	
  5.28

  	
   

  	
  Dissolution

  	
  56

  



 



 ii
 









 


	
  

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.29

  	
   

  	
  Expenses

  	
  56

  
	
   

  	
  5.30

  	
   

  	
  Indemnity

  	
  56

  
	
   

  	
  5.31

  	
   

  	
  Intentionally Omitted

  	
  57

  
	
   

  	
  5.32

  	
   

  	
  Intentionally Omitted

  	
  57

  
	
   

  	
  5.33

  	
   

  	
  Patriot Act Compliance

  	
  57

  
	
   

  	
  5.34

  	
   

  	
  Mortgage Reserve Funds

  	
  58

  
	
   

  	
  5.35

  	
   

  	
  Notices

  	
  58

  
	
   

  	
  5.36

  	
   

  	
  Special Distributions

  	
  59

  
	
   

  	
  5.37

  	
   

  	
  Mortgage Borrower Covenants

  	
  59

  
	
   

  	
  5.38

  	
   

  	
  Mortgage Loan Estoppels

  	
  59

  
	
   

  	
  5.39

  	
   

  	
  Limitation on Securities Issuances

  	
  59

  
	
   

  	
  5.40

  	
   

  	
  Distributions

  	
  60

  
	
   

  	
  5.41

  	
   

  	
  Refinancing or Prepayment of the Mortgage Loan

  	
  60

  
	
   

  	
  5.42

  	
   

  	
  Acquisition of the Mortgage Loan.

  	
  60

  
	
   

  	
  5.43

  	
   

  	
  Material Agreements

  	
  61

  
	
   

  	
  5.44

  	
   

  	
  Mortgage Loan Document Amendments

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  NOTICES AND REPORTING

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
   

  	
  Notices

  	
  62

  
	
   

  	
  6.2

  	
   

  	
  Borrower Notices and Deliveries

  	
  62

  
	
   

  	
  6.3

  	
   

  	
  Financial Reporting

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  INSURANCE; CASUALTY; AND CONDEMNATION

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
   

  	
  Insurance

  	
  66

  
	
   

  	
  7.2

  	
   

  	
  Casualty

  	
  67

  
	
   

  	
  7.3

  	
   

  	
  Condemnation

  	
  67

  
	
   

  	
  7.4

  	
   

  	
  Application of Proceeds or Award

  	
  68

  
	
   

  	
  7.5

  	
   

  	
  Rights of Lender

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  DEFAULTS

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
   

  	
  Events of Default

  	
  68

  
	
   

  	
  8.2

  	
   

  	
  Remedies

  	
  70

  
	
   

  	
  8.3

  	
   

  	
  Right to Cure Defaults

  	
  72

  
	
   

  	
  8.4

  	
   

  	
  Power of Attorney

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  SPECIAL PROVISIONS

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
   

  	
  Sale of Notes and Securitization

  	
  73

  
	
   

  	
  9.2

  	
   

  	
  Securitization Indemnification

  	
  75

  
	
   

  	
  9.3

  	
   

  	
  Reallocation of Loan Amounts

  	
  77

  
	
   

  	
  9.4

  	
   

  	
  Mortgage Loan Defaults

  	
  78

  
	
   

  	
  9.5

  	
   

  	
  Intercreditor Agreement

  	
  79

  
	
   

  	
  9.6

  	
   

  	
  Discussions with Mortgage Lender

  	
  80

  
	
   

  	
  9.7

  	
   

  	
  Independent Approval Rights

  	
  80

  



 



 iii
 









 


 


	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  MISCELLANEOUS

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
   

  	
  Exculpation

  	
  80

  
	
   

  	
  10.2

  	
   

  	
  Brokers and Financial Advisors

  	
  82

  
	
   

  	
  10.3

  	
   

  	
  Retention of Servicer

  	
  82

  
	
   

  	
  10.4

  	
   

  	
  Survival

  	
  83

  
	
   

  	
  10.5

  	
   

  	
  Lender’s Discretion

  	
  83

  
	
   

  	
  10.6

  	
   

  	
  Governing Law

  	
  83

  
	
   

  	
  10.7

  	
   

  	
  Modification, Waiver in Writing

  	
  84

  
	
   

  	
  10.8

  	
   

  	
  Trial by Jury

  	
  84

  
	
   

  	
  10.9

  	
   

  	
  Headings/Exhibits

  	
  85

  
	
   

  	
  10.10

  	
   

  	
  Severability

  	
  85

  
	
   

  	
  10.11

  	
   

  	
  Preferences

  	
  85

  
	
   

  	
  10.12

  	
   

  	
  Waiver of Notice

  	
  85

  
	
   

  	
  10.13

  	
   

  	
  Remedies of Borrower

  	
  85

  
	
   

  	
  10.14

  	
   

  	
  Prior Agreements

  	
  86

  
	
   

  	
  10.15

  	
   

  	
  Offsets, Counterclaims and Defenses

  	
  86

  
	
   

  	
  10.16

  	
   

  	
  Publicity

  	
  86

  
	
   

  	
  10.17

  	
   

  	
  No Usury

  	
  86

  
	
   

  	
  10.18

  	
   

  	
  Conflict; Construction of Documents

  	
  87

  
	
   

  	
  10.19

  	
   

  	
  No Third Party Beneficiaries

  	
  87

  
	
   

  	
  10.20

  	
   

  	
  Spread Maintenance Premium

  	
  87

  
	
   

  	
  10.21

  	
   

  	
  Assignment

  	
  87

  
	
   

  	
  10.22

  	
   

  	
  Borrower’s Designee

  	
  88

  
	
   

  	
  10.23

  	
   

  	
  Intentionally Omitted

  	
  88

  
	
   

  	
  10.24

  	
   

  	
  Set-Off

  	
  88

  
	
   

  	
  10.25

  	
   

  	
  Counterparts

  	
  88

  
						



 


	
  Schedule 1

  	
  -

  	
  Intentionally Omitted

  
	
  Schedule 2

  	
  -

  	
  Intentionally Omitted

  
	
  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

  
	
  Schedule 9

  	
  -

  	
  Mortgage Loan Documents

  
	
  Exhibit A

  	
  -

  	
  Out-Parcel

  



 



 iv















MEZZANINE
LOAN AGREEMENT


MEZZANINE 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
M, LLC, a Delaware limited liability company (“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 Mortgage Debt Service:  the meaning ascribed to the term “Debt
Service” in the Mortgage 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
Mortgage 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.


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.


Collateral: 
(i) the Collateral as defined in the Pledge Agreement, and (ii) all
other collateral for the Loan granted in the Loan Documents.



 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.


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 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.



 3
 









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 $17,000,000.00.


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 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).



 4
 









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



 5
 









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, Mortgage Borrower, any Loan
Document or all or part of the Collateral, 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
or Mortgage Borrower, at any time in force affecting all or part of the
Collateral or 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 Mortgage 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 offered by its principal London office for making one-month United
States dollar deposits with 



 6
 









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 the Collateral, the Property or any interest therein, or any
direct or indirect interest in Mortgage Borrower or 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
Pledge and Security Agreement made by Borrower to Lender which covers the
Collateral, (iii) the Guaranty of 



 7
 









Recourse Obligations made by Guarantor for the benefit
of Lender, and (iv) 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 Party: 
individually and collectively, as the context requires, Borrower,
Guarantor or any Mortgage Loan Party.


Loan to Value Ratio:  as of the date of its
calculation, the ratio of (i) the outstanding principal amount of the Loan and
the Mortgage 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
Mortgage 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 Agreement:  all agreements, other than the Management
Agreement, the Sub-Management Agreement, the Leases and any agreements for the
performance of the work relating to the Building 800 Work Expenditures or
Building 800 Leasing Costs Expenditures, entered into by any Loan Party
affecting or relating to the Property, the Collateral or any other direct or
indirect ownership interest of a Loan Party in Mortgage Borrower or Borrower
requiring the payment of more than $250,000  in the aggregate in
payments or liability in any annual period or which is not cancelable without
penalty or premium on no more than thirty (30) days notice.


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:  TWENTY MILLION AND 00/100 DOLLARS
($20,000,000.00).



 8
 









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


Mortgage Borrower:  Behringer Harvard Santa Clara LP, a Delaware
limited partnership.


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


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


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


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


Mortgage Guarantor:  the meaning ascribed to the term “Guarantor”
in the Mortgage Loan Agreement.


Mortgage Interest Rate Cap Agreement:  the meaning ascribed to the term “Interest
Rate Cap Agreement” in the Mortgage Loan Agreement.


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


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


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


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


Mortgage Loan Party:  individually and collectively, as the context
may require, Mortgage Borrower and Mortgage Guarantor.


Mortgage Note: 
that certain Promissory Note, dated as of the date hereof, given by
Mortgage Borrower to Mortgage Lender in the maximum principal amount of
FIFTY-NINE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($59,500,000.00).


Mortgage Permitted Indebtedness:  the meaning ascribed to the term “Permitted
Indebtedness” in the Mortgage Loan Agreement.


Mortgage Securities:  the meaning ascribed to the term “Securities”
in the Mortgage Loan Agreement.



 9
 









Net Liquidation Proceeds After Debt Service:  with respect to any Liquidation Event, all
amounts paid to or received by or on behalf of Mortgage Borrower in connection
with such Liquidation Event, including, without limitation, proceeds of any
sale, refinancing or other disposition or liquidation, less (i) in the event of
a Liquidation Event consisting of a Casualty or Condemnation, Lender’s,
Mortgage Borrower’s and/or Mortgage Lender’s reasonable costs incurred in
connection with the recovery thereof, (ii) in the event of a Liquidation Event
consisting of a Casualty or Condemnation, the costs incurred by Mortgage
Borrower in connection with a restoration of all or any portion of the Property
made in accordance with the Mortgage Loan Documents, (iii) in the event of a
Liquidation Event consisting of a Casualty or Condemnation or a Transfer, amounts
required or permitted to be deducted therefrom and amounts paid pursuant to the
Mortgage Loan Documents to Mortgage Lender, (iv) in the event of a Liquidation
Event consisting of a Casualty or Condemnation, those proceeds paid to Mortgage
Borrower pursuant to Section 7.4.3 of the Mortgage Loan Agreement as a surplus
that remains out of the Proceeds or the Award, (v) in the case of a foreclosure
sale, disposition or transfer of the Property in connection with realization
thereon following an Event of Default under the Mortgage Loan, such reasonable
and customary costs and expenses of sale or other disposition (including
attorneys’ fees and brokerage commissions), (vi) in the case of a foreclosure
sale, such costs and expenses incurred by Mortgage Lender under the Mortgage
Loan Documents as Mortgage Lender shall be entitled to receive reimbursement
for under the terms of the Mortgage Loan Documents, (vii) in the case of a
refinancing of the Mortgage Loan, such costs and expenses (including attorneys’
fees) of such refinancing, and (viii) the amount of any prepayments required
pursuant to the Mortgage Loan Documents in connection with any such Liquidation
Event.


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 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.



 10
 









Owner’s Title Insurance Policy:  that certain ALTA extended coverage owner’s
policy of title insurance issued in connection with the closing of the Mortgage
Loan insuring the Mortgage Borrower as the owner of the Property.


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 Mortgage 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,
and (v) such other title and survey exceptions as Lender approves in
writing in Lender’s discretion.


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 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 



 11
 









of Borrower and its member(s) or partners, as
applicable, after such Transfer, shall satisfy Lender’s then current applicable
underwriting criteria and requirements; or


(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.


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.


Pledge Agreement: 
that certain Pledge and Security Agreement, dated as of the date hereof,
executed and delivered by Borrower to Lender, as security for the Loan, as the
same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.


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, 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 



 12
 









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 Mortgage Debt Service which would
be due and payable for such period.


Property: 
the parcel of real property and Improvements thereon owned or leased by
Mortgage Borrower and encumbered by the Mortgage; together with all rights
pertaining to such real property and Improvements, and all other collateral for
the Mortgage 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.


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 



 13
 









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 or Mortgage Securities created in a Secondary
Market Transaction of the Loan or the Mortgage Loan.


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 Mortgage 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 Mortgage 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.


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



 14
 









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
Mortgage 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
Mortgage Loan Agreement) would result in an In Place Debt Service
Coverage Ratio on the then outstanding principal balances of the Loan and
the Mortgage Loan of 1.00:1.00 (assuming that the aggregate amount of
Adjusted Debt Service and Adjusted Mortgage 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 Mortgage 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.


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



 15















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 Mortgage 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 Collateral or
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.


UCC Title Insurance Policy:  a UCC title insurance policy in the form
acceptable to Lender issued with respect to the Collateral and insuring the
lien of the Pledge Agreement encumbering such Collateral.


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” - Mortgage Loan Agreement


“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” –
Mortgage Loan Agreement


“Building 800 Work Expenditures” – Mortgage Loan
Agreement



 16
 









“Cash Management Accounts” - 3.9


“Casualty” – Mortgage Loan Agreement


“Casualty/Condemnation Prepayment” - 2.3.2


“Casualty/Condemnation Subaccount” - Mortgage Loan
Agreement


“Citigroup” – 9.2(b)


“Citigroup Group” – 9.2(b)


“Clearing Account” – Mortgage Loan Agreement


“Clearing Account Agreement” - Mortgage Loan
Agreement


“Clearing Bank” - Mortgage Loan Agreement


“Condemnation” – Mortgage Loan Agreement


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


“Deposit Account” - Mortgage Loan Agreement


“Deposit Account Agreement” - Mortgage Loan
Agreement


“Disclosure Document” - 9.2(a)


“Distributions” – 5.40


“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” - Mortgage Loan Agreement


“Insured Casualty” - Mortgage Loan Agreement


“Intercreditor Agreement” – 9.4


“Interest Reserve Fund” – 3.4


“Interest Reserve Subaccount” – 3.4


“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


“Liquidation Event” – 2.3.2


“Loan” - 2.1



 17
 









“Maximum Additional Advance Amount” – 2.1.2


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


“Mortgage” – Mortgage Loan Agreement


“New Payment Date” – 2.2.6


“Notice” - 6.1


“OFAC” – 5.33


“Offering Document Date” – 6.3.6


“Out-Parcel Release” – 2.4.1


“Permitted Indebtedness” - 5.22


“Permitted Investments” - Deposit Account Agreement


“Policies” - Mortgage Loan Agreement


“Prepayment Date” – 2.3.4


“Prepayment Notice” - 2.3.4


“Proceeds” - Mortgage Loan Agreement


“Proposed Lease” - 5.10.2


“Provided Information” - 9.1


“Qualified Carrier” - Mortgage Loan Agreement


“Registration Statement” – 9.2(b)


“Remaining Parcel” – 2.4.1(g)


“Remedial Work” - 5.8.2(c)


“Rent Roll” - 4.16


“Replacement Reserve Subaccount” – Mortgage Loan
Agreement


“Required Repairs” – Mortgage Loan Agreement


“Restoration” - Mortgage Loan Agreement


“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” - Mortgage Loan
Agreement


“Significant Casualty” - Mortgage Loan Agreement


“Single Member Bankruptcy Remote LLC” – Schedule 5


“SNDA” – 5.10.4


“Sole Member” – Schedule 5


“Special Member” – Schedule 5


“Special Purpose Bankruptcy Remote Entity” - 5.13


“Springing Recourse Event” - 10.1(b)


“Standard Statements” – 6.3.6


“Subaccounts” - Mortgage Loan Agreement


“Tax and Insurance Subaccount” - Mortgage Loan
Agreement


“Tenant Improvement Funds” – Mortgage Loan
Agreement


“Tenant Improvement Reserve Subaccount” – Mortgage
Loan Agreement


“Third Party Report” – 9.2(f)


“TI Leases” – Mortgage Loan Agreement


“Toxic Mold” - 4.21


“Underwriter Group” – 9.2(b)



 18
 









1.3          Principles
of Construction. 
Unless otherwise specified, (i) all references to sections and
schedules are to those in this Agreement, (ii) the words “hereof,” “herein”
and “hereunder” and words of similar import refer to this Agreement as a whole
and not to any particular provision, (iii) all definitions are equally
applicable to the singular and plural forms of the terms defined, (iv) the
word “including” means “including but not limited to,” and (v) accounting
terms not specifically defined herein shall be construed in accordance with
GAAP.  With respect to terms defined by
cross-reference to the Mortgage Loan Documents, such defined terms shall have
the definitions set forth in the Mortgage Loan Documents as of the date hereof,
and no modifications to the Mortgage Loan Documents shall have the effect of
changing such definitions for the purpose of this Agreement unless Lender
expressly agrees that such definitions as used in this Agreement have been
revised or Lender consents to the modification documents.  With respect to any provisions incorporated
by reference herein from the Mortgage Loan Agreement, such provisions shall be
deemed a part of this Agreement notwithstanding the fact that the Mortgage Loan
shall no longer be effective for any reason.


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
Advance.


Subject to and upon the terms and conditions herein set forth, Lender
agrees in accordance with Section 2.1.4 hereof to make the Additional Advance
to Borrower in the amount of $3,000,000.00 (the “Maximum
Additional Advance Amount”). 
Any amount borrowed and repaid hereunder in respect of the Loan (or any
portion thereof comprising the Additional Advance) may not be reborrowed.


2.1.3       Limitation
on Additional Advance.


The Additional Advance shall be used solely to fund the Additional
Interest Reserve Deposit.


2.1.4       Request for Additional Advance;
Conditions Precedent.


(a)         Subject
to and upon the terms and conditions herein set forth, Lender agrees to make
the Additional Advance to Borrower in the amount of $3,000,000.00 for the
purpose of funding the Additional Interest Reserve Deposit.  The Additional Advance shall be considered
added to the unpaid principal balance of the Loan as of the day the 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 Pledge Agreement and other collateral
given for the Loan.



 19
 









(b)        Provided
that no Event of Default shall have occurred and be continuing, Lender shall
make the Additional Advance to Borrower to fund the Additional Interest Reserve
Deposit in an amount equal to $3,000,000.00 on the date required for such
Additional Interest Reserve Deposit under Section 3.4 hereof.  Borrower shall, or Lender on behalf of
Borrower shall, deposit such Additional Advance in the Interest Reserve
Subaccount, which shall be disbursed in accordance with Section 3.4.


(c)         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 (c) 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.


(d)        If the insured amount under the UCC
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 UCC 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 on the Collateral in the amount of
the then-outstanding principal balance of the Loan (after giving effect to the
funding of the Additional Advance).


(e)         Upon the satisfaction of each of the
conditions precedent to the Additional Advance, Lender shall disburse the
Additional Advance, in accordance with this Section 2.1.4.


(f)         [Intentionally Omitted].


(g)        [Intentionally Omitted].


(h)        Lender shall have no obligation to
advance the Additional Advance at any time during which an Event of Default
exists.  The making of the 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 the
Additional Advance) may not be reborrowed.


Lender’s obligations to perform in accordance with this Section 2.1.4 and
to make the 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 



 20
 









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       Intentionally
Omitted.


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 the Additional Advance shall
automatically terminate, and upon such termination, Borrower shall have no
right to reinstate Lender’s obligation to make the Additional Advance.


2.1.7       Intentionally
Omitted.


2.1.8       The
Note, Pledge Agreement and Loan Documents.


The Loan shall be evidenced by the Note and secured by the Pledge
Agreement and the other Loan Documents.


2.1.9       Use
of Proceeds.


Borrower shall use the proceeds of the Initial Advance solely to
contribute such funds to Mortgage Borrower as may be needed to refinance any
existing loan relating to the Property and for the purposes set forth in any
disbursement letter or settlement statement entered into in connection
herewith.  Borrower shall use the
proceeds of the Additional Advance in accordance with Section 2.1.4
hereof.  All of the proceeds of the
Mortgage Loan advanced to Mortgage Borrower have been and shall be used solely
in accordance with the Mortgage Loan Agreement.


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).



 21
 









(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;


(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)           Borrower shall
deposit into the Interest Reserve Subaccount an amount reasonably estimated by
Lender, consistent with its then current underwriting standards, sufficient to
make all Debt Service and Mortgage Debt Service payments as they become due and
payable during the applicable Extension Period; and


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



 22
 









(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 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.



 23
 









(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


(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 



 24
 









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 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 



 25
 









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
and Section 2.4 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 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 Collateral (whether through foreclosure,
assignment-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       Liquidation
Events.


(a)         In the event of (i) any Casualty to all
or any portion of the Property, (ii) any Condemnation of all or any portion of
the Property, (iii) a Transfer of the Property in connection with realization
thereon by Mortgage Lender following an Event of Default under the Mortgage
Loan, including, without limitation, a foreclosure sale, or (iv) any
refinancing of the Property or the Mortgage Loan (each, a “Liquidation Event”), Borrower
shall cause the related Net Liquidation Proceeds After Debt Service to be
deposited directly into an account designated by Lender.  On each date on which Lender actually
receives a distribution of Net Liquidation Proceeds After Debt Service, such
distribution shall be applied in the same manner as repayments under Section
2.3.1, and such prepayment 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 clauses (i) and (ii) above
shall be without the payment of the Spread Maintenance Premium.  Notwithstanding anything to the contrary
contained herein, each prepayment under this Section 2.3.2 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.


(b)        Borrower
shall promptly notify Lender of any Liquidation Event once Borrower has
knowledge of such event.  Borrower shall
be deemed to have knowledge of (i) a sale (other than a foreclosure sale) of
the Property on the date on which a contract of sale for such sale is entered
into, and a foreclosure sale, on the date notice of such foreclosure sale is 



 26
 









given, and
(ii) a refinancing of the Property, on the date on which a commitment for such
refinancing is entered into.  The
provisions of this Section 2.3.2 shall not be construed to contravene in any
manner the restrictions and other provisions regarding refinancing of the
Mortgage Loan or Transfer of the Property set forth in this Agreement and the
other Loan Documents.


(c)         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 in connection with a
simultaneous prepayment of the Mortgage Loan (i) required by Mortgage Lender
under Section 5 or 6 of the Mortgage or (ii) at the election of Mortgage
Borrower pursuant to Section 7.4.2 of the Mortgage Loan Agreement.


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


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


(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; and


(e)         Such prepayment shall not be prohibited
pursuant to the Mortgage Loan Documents.



 27
 









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 cause Mortgage Borrower 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 Mortgage Loan, such
that the aggregate principal balance of the Loan and the Mortgage 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 institutional 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 Owner’s Title Insurance Policy insuring that the Out-Parcel
Release shall not adversely affect or impair the title insurance provided in
the Owner’s Title Insurance Policy and insuring the easements referenced in
Section 2.4.1(k) hereof;


(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 cause Mortgage Borrower to 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)        [Intentionally Omitted];



 28
 









(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 shall have caused Mortgage
Borrower to comply 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 Mortgage Borrower or in a material increase in Mortgage
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; and


(n)        All of the provisions of Section 2.4.1
of the Mortgage 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 Borrower.


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.



 29















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).


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 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 this Agreement. 
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 



 30
 









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.


(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 



 31
 









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).


3.                                      CASH
MANAGEMENT AND RESERVES


3.1          Cash
Management Arrangements.


(a)         Borrower shall cause Mortgage Borrower
to comply with all of the terms and conditions set forth in Section 3.1 of the
Mortgage Loan Agreement.


(b)        In the event (i) Mortgage Lender waives
the requirement of Mortgage Borrower to maintain the Clearing Account and/or
the Deposit Account pursuant to the terms of Section 3.1 of the Mortgage Loan
Agreement or (ii) the Mortgage Loan has been repaid in full, Lender shall have
the right to require Borrower to establish and maintain accounts that would
operate in the same way as the Clearing Account and/or the Deposit Account in
Section 3.1 of the Mortgage Loan Agreement, provided that Lender has obtained
written consent from Mortgage Lender in the event the Mortgage Loan is still
outstanding.


3.2          Required
Repairs; Completion of Required Repairs.  Borrower
shall cause Mortgage Borrower to comply with all of the terms and conditions
set forth in Section 3.2 of the Mortgage Loan Agreement.


3.3          Tax
and Insurance Subaccount.


(a)         Borrower shall cause Mortgage Borrower
to comply with all of the terms and conditions set forth in Section 3.3 of the
Mortgage Loan Agreement.


(b)        In the event (i) Mortgage Lender waives
the requirement of Mortgage Borrower to maintain the Tax and Insurance
Subaccount pursuant to the terms of Section 3.3 of the Mortgage Loan Agreement
or (ii) the Mortgage Loan has been repaid in full, Lender shall have the right
to require Borrower to establish and maintain an escrow that would operate in
the 



 32
 









same way as
the Tax and Insurance Subaccount in Section 3.3 of the Mortgage Loan Agreement.


3.4          Interest
Reserve Subaccount.


(a)           On the date hereof,
Borrower shall deposit with Lender a sum equal to $3,000,000.00 (the “Initial Interest Reserve Deposit”),
which shall be deposited into a Subaccount (the “Interest
Reserve Subaccount”) with and held and disbursed by Lender
pursuant to the terms hereof.  On the
Payment Date occurring in June, 2008, Lender shall advance, pursuant to Section
2.1.4(b), an amount equal to $3,000,000.00 (the “Additional
Interest Reserve Deposit”), which shall be deposited in the
Interest Reserve Subaccount.  On the
Payment Date occurring in June, 2009 and on the first Business Day of each
Extension Period, Borrower shall deposit in the Interest Reserve Subaccount, an
amount reasonably estimated by Lender to be equal, when added to the amounts
then on deposit in the Interest Reserve Subaccount, to the Debt Service and
Mortgage Debt Service payments for the succeeding twelve (12) Interest Periods
(which such amount of Debt Service and Mortgage Debt Service payments shall
include a credit for any amounts anticipated by Lender to be received during
such Interest Periods pursuant to the Interest Rate Cap Agreement and the
Mortgage Interest Rate Cap Agreement). 
Amounts so deposited shall hereinafter be referred to as the “Interest Reserve Fund.”


(b)           Commencing on the
Payment Date occurring in July, 2007, and each Payment Date thereafter until
such time as the balance in the Interest Reserve Fund has been reduced to
$0.00, Lender shall withdraw from the Interest Reserve Subaccount an amount
(the “Monthly Interest Reserve Amount”)
equal to the amount necessary to cause the sums in the Deposit Account on such
Payment Date plus any payments made under the Interest Rate Cap Agreement
pursuant to Section 2.6 hereof and the Mortgage Interest Rate Cap Agreement
pursuant to Section 2.6 of the Mortgage Loan Agreement to be sufficient to make
the payments required pursuant to Section 3.10(a)(i) through (iv) of the
Mortgage Loan Agreement on such Payment Date. 
The Monthly Interest Reserve Amount shall be deposited into the Deposit
Account and shall be held and disbursed pursuant to the terms of Article 3 of
the Mortgage Loan Agreement.


3.5          Intentionally
Omitted.


3.6          Casualty/Condemnation
Subaccount.


(a)         Borrower shall cause Mortgage Borrower
to comply with all of the terms and conditions set forth in Section 3.6 of the
Mortgage Loan Agreement.


(b)        In the event (i) Mortgage Lender waives
the requirement of Mortgage Borrower to maintain the Casualty/Condemnation
Subaccount pursuant to the terms of Section 3.6 of the Mortgage Loan Agreement
or (ii) the Mortgage Loan has been repaid in full, Lender shall have the right
to require Borrower to establish and maintain an escrow that would operate in
the same way as the Casualty/Condemnation Subaccount in Section 3.6 of the
Mortgage Loan Agreement.



 33
 









3.7          Security
Deposit Subaccount.


(a)         Borrower shall cause Mortgage Borrower
to comply with all of the terms and conditions set forth in Section 3.7 of the
Mortgage Loan Agreement.


(b)        In the event (i) Mortgage Lender waives
the requirement of Mortgage Borrower to maintain the Security Deposit
Subaccount pursuant to the terms of Section 3.7 of the Mortgage Loan Agreement
or (ii) the Mortgage Loan has been repaid in full, Lender shall have the right
to require Borrower to establish and maintain an escrow that would operate in
the same way as the Security Deposit Subaccount in Section 3.7 of the Mortgage
Loan Agreement.


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, subject to the Mortgage Loan Documents, all
Borrower’s right, title and interest in and to all payments to or monies held
in (i) to the extent of any interest of Borrower therein, the Clearing Account
and the Deposit Account created pursuant to Section 3.1(b) of this Agreement,
and (ii) all Subaccounts created pursuant to this Agreement (collectively, the “Cash Management Accounts”).  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 on the Collateral
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)         Borrower shall cause Mortgage Borrower
to comply with all of the terms and conditions set forth in Section 3.10 of the
Mortgage Loan Agreement.


(b)        All transfers of funds from the Deposit
Account or other sources to or for the benefit of Lender or Borrower pursuant
to this Agreement, the Mortgage Loan Documents or any of the other Loan
Documents in which Mortgage Borrower has an interest in, are intended by
Borrower and Mortgage Borrower to constitute and shall constitute distributions
from Mortgage Borrower to Borrower of such funds.



 34
 









3.11        Intentionally
Omitted.


3.12        Tenant
Improvement Reserve Subaccount.


(a)         Borrower shall cause Mortgage Borrower
to comply with all of the terms and conditions set forth in Section 3.12 of the
Mortgage Loan Agreement.


(b)        In the event (i) Mortgage Lender waives
the requirement of Mortgage Borrower to maintain the Tenant Improvement Reserve
Subaccount pursuant to the terms of Section 3.12 of the Mortgage Loan Agreement
or (ii) the Mortgage Loan has been repaid in full, Lender shall have the right
to require Borrower to establish and maintain an escrow that would operate in
the same way as the Tenant Improvement Reserve Subaccount in Section 3.12 of
the Mortgage Loan Agreement.


3.13        Replacement
Reserve Subaccount.


(a)         Borrower shall cause Mortgage Borrower
to comply with all of the terms and conditions set forth in Section 3.13 of the
Mortgage Loan Agreement.


(b)        In the event (i) Mortgage Lender waives
the requirement of Mortgage Borrower to maintain the Replacement Reserve
Subaccount pursuant to the terms of Section 3.13 of the Mortgage Loan Agreement
or (ii) the Mortgage Loan has been repaid in full, Lender shall have the right
to require Borrower to establish and maintain an escrow that would operate in
the same way as the Replacement Reserve Subaccount in Section 3.13 of the
Mortgage Loan Agreement.


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.


(a)         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
assets and to transact the business in which it is now engaged.  Borrower is duly qualified to do business and
is in good standing in each jurisdiction where it is required to be so
qualified in connection with its properties, business and operations.  Borrower is a Special Purpose Bankruptcy
Remote Entity.


(b)        Borrower has the power and authority and
the requisite ownership interests to control the actions of Mortgage Borrower,
and upon the realization of the Collateral under the Pledge Agreement, Lender
or any other party succeeding to the Borrower’s interest in the Collateral
described in the Pledge Agreement would have such control.  Without limiting the foregoing, Borrower has
sufficient control over Mortgage Borrower to cause Mortgage Borrower to (i)
take any action on Mortgage Borrower’s part required by the Loan Documents and
(ii) refrain from taking any action prohibited by the Loan Documents.



 35
 









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, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the
property of Borrower pursuant to the terms of, any agreement or instrument to
which Borrower is a party or by which its property is subject, nor will such
action result in any violation of the provisions of any statute or any order,
rule or regulation of any Governmental Authority having jurisdiction over
Borrower or any of Borrower’s property or other assets.  Borrower’s rights under any license or other
approval required to own and manage its property, will not be adversely
affected by the execution and delivery of the Loan Documents or Borrower’s
performance thereunder.  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, Mortgage Borrower, the
Collateral, the Manager or the Property, which, if adversely determined, might
materially adversely affect the condition (financial or otherwise) or business
of Borrower, Mortgage Borrower, or Manager or the condition or ownership of the
Collateral or 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,
Mortgage Borrower, the Collateral or the Property, or Borrower’s or Mortgage
Borrower’s business, properties, operations or condition, financial or
otherwise.  Neither Borrower nor Mortgage
Borrower is 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 or Mortgage Borrower is a party or by which Borrower, Mortgage
Borrower, the Collateral or the Property is bound.



 36
 









4.6          Title.


(a)         Borrower is the record and beneficial
owner of the Collateral, free and clear of all Liens whatsoever.  The Pledge Agreement, together with the UCC
Financing Statements relating to the Collateral, when properly filed in the
appropriate records, will create a valid, perfected first priority security
interests in and to the Collateral, all in accordance with the terms thereof
for which a Lien can be perfected by filing a UCC Financing Statement.  For so long as the Lien of the Pledge
Agreement is outstanding, Borrower shall forever warrant, defend and preserve
such title and the validity and priority of the Lien of the Pledge Agreement
and shall forever warrant and defend such title, validity and priority to
Lender against the claims of all persons whomsoever.


(b)        Mortgage 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 Mortgage Borrower have been
paid.  The Permitted Encumbrances do not
materially adversely affect the value, operation or use of the Property, or
Borrower’s ability to repay the Loan.  No
Condemnation or other proceeding has been commenced or, to Borrower’s best
knowledge, is contemplated with respect to all or part of the Property or for
the relocation of roadways providing access to the Property.  There are no claims for payment for work,
labor or materials affecting the Property which are or may become a Lien prior
to, or of equal priority with, the Liens created by the Mortgage 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 Owner’s 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.


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 Collateral, the Property or 



 37
 









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 Mortgage Borrower and, to
Borrower’s knowledge, the Collateral and the Property (i) are true,
complete and correct in all material respects, (ii) accurately represent
the financial condition of Borrower, Mortgage Borrower, the Collateral and the
Property, as applicable, 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, Mortgage
Borrower, the Collateral or the Property from that set forth in said financial
statements.


4.9          Tax
Filings.  To
the extent required, Borrower has filed and has caused Mortgage Borrower to
file (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 or Mortgage Borrower, as applicable.  Borrower believes that Borrower and Mortgage
Borrower’s tax returns (if any) properly reflect the income and taxes of
Borrower and Mortgage Borrower, as applicable, 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) no Loan Party is or
will 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 any Loan Party
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) no Loan Party is
or will be a “governmental plan” within the meaning of Section 3(32) of ERISA,
and (iv) transactions by or with any Loan Party 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 Mortgage 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.  Borrower and Mortgage 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).  Neither Borrower nor
Mortgage Borrower is 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 or Mortgage Borrower, as applicable.  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 same use without violating any zoning or other
ordinances applicable thereto and without the necessity of 



 38
 









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 Mortgage 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. 
Neither Borrower nor Mortgage Borrower is (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 Owner’s 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 



 39
 









Property, whether latent or otherwise. 
Neither Borrower nor Mortgage Borrower has 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 of the
Mortgage Loan Agreement; (viii) Mortgage 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 Mortgage Borrower and the applicable
tenant thereunder; and (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.  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 Mortgage
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).



 40
 









4.18        Ownership
of Borrower. 
Borrower is the sole limited partner of Mortgage Borrower and the sole
member of Mortgage Borrower GP.  The only
member of Borrower 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 Mortgage
Borrower, the membership interest in Mortgage Borrower GP, the membership
interest in Borrower, 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 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, Mortgage 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 Mortgage Lender
with respect to the Mortgage Loan and the Property.  Additionally, subject to the provisions of
Section 3.1 of the Mortgage Loan Agreement 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
Substances”); (iii) to the best of Borrower’s knowledge,
after due inquiry, no Hazardous 



 41
 









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 and
Mortgage Borrower does not use and Borrower will not cause Mortgage Borrower to
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 Collateral, the Property or any excess
cash flow or any residual interest therein, whether secured or unsecured, other
than Permitted Encumbrances and Permitted Indebtedness.


4.24        Deposit
Accounts.


(a)         The Clearing Account is and shall be
maintained as a “deposit account” (as such term is defined in Section
9-102(a)(29) of the UCC), and each of the other Cash Management Accounts other
than the Clearing Account is and shall be maintained as a “securities account”
(as such term is defined in Section 8-501(a) of the UCC);


(b)        Mortgage Borrower owns the Clearing
Account and the Deposit Account free and clear of any Lien or claim of any
Person other than Mortgage Lender;


(c)         Borrower has delivered, or caused to be
delivered, to Lender copies of fully executed agreements pursuant to which the
banks maintaining the Clearing Account and the Deposit Account have agreed to
comply with all instructions originated by Mortgage Lender directing
disposition of the funds in such accounts without further consent by Mortgage
Borrower; and


(d)        The Clearing Account and the Deposit
Account are not in the name of any Person other than Mortgage Borrower or
Mortgage Lender.  Mortgage Borrower has
not consented to the banks maintaining the Clearing Account and the Deposit
Account to comply with instructions of any Person other than Mortgage Lender.


4.25        Affiliates.  Borrower does not own any equity interests in
any other Person other than the equity interests that comprise the Collateral.


4.26        Mortgage
Borrower Representations.  Borrower has reviewed the representations and
warranties made by, and covenants of, Mortgage Borrower to and for the 



 42
 









benefit of Mortgage Lender contained in the Mortgage Loan Documents and
such representations and warranties are true, correct and complete.


4.27        List
of Mortgage Loan Documents.  To Borrower’s knowledge, there are no
Mortgage Loan Documents other than those set forth on Schedule 9 attached
hereto.  Borrower has or has caused to be
delivered to Lender true, complete and correct copies of all Mortgage Loan
Documents, and none of the Mortgage Loan Documents has been amended or modified
as of the date thereof.


4.28        Mortgage
Event of Default. 
No Mortgage Event of Default or an event or circumstance has occurred
which with the giving of notice or the passage of time, or both, would
constitute a Mortgage Event of Default exists as of the date hereof.


5.                                      COVENANTS


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


5.1          Existence.  Borrower shall, and shall cause Mortgage
Borrower to, (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 Collateral and Property, as applicable.


5.2          Taxes and Other Charges.  Borrower shall pay, or shall cause Mortgage
Borrower to pay, all Taxes and Other Charges prior to delinquency, and deliver,
or cause to be delivered, 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, or cause Mortgage Borrower to pay, such Taxes nor furnish such receipts
for payment of Taxes paid by Lender or Mortgage Lender pursuant to Section 3.3
hereof or of the Mortgage Loan Agreement, as applicable) and that the Other
Charges have been so paid prior to delinquency. 
Borrower shall not suffer and shall not permit Mortgage Borrower to
suffer and shall promptly cause Mortgage Borrower to pay and discharge any Lien
against the Property, and shall promptly pay, or cause Mortgage Borrower to
pay, for all utility services provided to the Property.  After prior notice to Lender, Borrower, at
their own expense, may, or cause Mortgage Borrower to, 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 or Mortgage Borrower is subject and shall not constitute a default
thereunder, (iv) no part of or interest in the Collateral or the Property will
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



 43














Subaccount to pay such Taxes so contested), and (vi) Borrower
shall, or shall cause Mortgage Borrower to, promptly upon final determination
thereof pay the amount of such Taxes or Other Charges, together with all costs,
interest and penalties.  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 and Borrower shall be permitted to use such security to make
such payment.  Notwithstanding the
foregoing, Borrower shall be relieved of its obligation to deposit the security
described above provided Mortgage Borrower is required to and does deliver such
security to Mortgage Lender in accordance with the Mortgage Loan Documents and
Lender receives evidence reasonably acceptable to Lender of the delivery of
such security.  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, or shall cause Mortgage Borrower to, 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, or shall cause Mortgage
Borrower to, (i) at all times maintain, preserve and protect all franchises and
trade names, and Borrower shall, or shall cause Mortgage Borrower to, cause the
Property to be maintained in a good and safe condition and repair and (ii) not
remove, demolish or alter the Improvements or Equipment (except for alterations
performed in accordance with Section 5.4.2 or the Mortgage Loan Agreement 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, or shall cause Mortgage Borrower to, promptly comply
with all Legal Requirements and immediately cure properly any violation of a
Legal Requirement.  Borrower shall, or
shall cause Mortgage Borrower to, notify Lender in writing within three
Business Days after Borrower or Mortgage Borrower, as applicable, first
receives notice of any such non-compliance. 
Borrower shall, or shall cause Mortgage Borrower to, 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, or may cause Mortgage Borrower
to, 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 or Mortgage Borrower’s financial condition or
the value or Net Operating Income of the Property and (iii) are in the
ordinary course of Borrower’s or Mortgage Borrower’s business, as
applicable.  Neither Borrower nor
Mortgage Borrower shall 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 



 44
 








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 of the Mortgage Loan Agreement as though a
request for disbursement were made thereunder. 
Upon substantial completion of the Material Alteration, Borrower shall,
or shall cause Mortgage Borrower to, 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, or shall cause
Mortgage Borrower to, 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. 
Notwithstanding the foregoing, Borrower shall be relieved of its
obligation to deposit the security for certain alterations described above
provided Mortgage Borrower is required to and does deliver such security to
Mortgage Lender in accordance with the Mortgage Loan Documents and Lender
receives evidence reasonably acceptable to Lender of the delivery of such
security.  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, and shall cause Mortgage
Borrower to, observe and perform each and every term to be observed or
performed by Borrower or Mortgage Borrower, as applicable, pursuant to the terms
of any agreement or instrument to which Borrower or Mortgage Borrower is a
party which affects or pertains to the Collateral or the Property, including
the Loan Documents and the Mortgage Loan Documents, as applicable.


5.6          Cooperate
in Legal Proceedings.  Borrower shall cooperate, and shall cause
each Loan Party to 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, and shall cause each Loan Party to, 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 



 45
 








litigation searches with respect to Borrower or Mortgage 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 Mortgage Borrower or Borrower owns or is in possession of the
Property, Borrower shall, or shall cause Mortgage Borrower to, (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 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, or shall cause Mortgage
Borrower to, 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, Mortgage 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, or shall cause Mortgage Borrower to (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, or shall cause Mortgage
Borrower to, 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, or shall cause Mortgage Borrower to, 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, or shall cause Mortgage Borrower to, provide
an inspection or audit of the Property prepared by a licensed hydrogeologist,
licensed environmental engineer or qualified environmental 



 46
 








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 or Mortgage Borrower.  Such inspections and audit may include soil
borings and ground water monitoring.  If
Borrower fails to provide, or fails to cause Mortgage Borrower 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 Mortgage Borrower, or presently exists or is reasonably suspected of
existing, Borrower shall, or shall cause Mortgage Borrower to, 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, or
shall cause Mortgage Borrower to, take all action necessary to clean and
disinfect any portions of the Improvements affected by Toxic Mold in or about the
Improvements, including providing any necessary moisture control systems at the
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, or shall cause Mortgage Borrower to, 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 or Mortgage 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, or fails to cause Mortgage Borrower to, 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 or Mortgage 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 or Mortgage Borrower are
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 or
Mortgage Borrower fails to promptly perform the Remedial Work being contested,
and if Borrower or Mortgage Borrower fails to prevail in contest Borrower or
Mortgage 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 



 47
 








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, or caused Mortgage Borrower to 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 or Mortgage 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 or Mortgage Borrower’s failure to
prevail in such contest, which amount shall periodically be disbursed to
Borrower or Mortgage Borrower, as applicable, during the course of such
Remedial Work, within ten (10) days after the delivery by Borrower or Mortgage
Borrower, as applicable, 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 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 or Mortgage Borrower, as
applicable.  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.  Notwithstanding the foregoing, Borrower shall
be relieved of its obligation to deposit the security described above provided
Mortgage Borrower is required to and does deliver such security to Mortgage
Lender in accordance with the Mortgage Loan Documents and Lender receives
evidence reasonably acceptable to Lender of the delivery of such security.


(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 Collateral, and the
validity and priority of all Liens granted or otherwise given to Lender under
the Loan Documents against the claims of all Persons.  Borrower shall cause Mortgage Borrower to
warrant and defend the title to the Property against the claims of all Persons
(other than Mortgage Lender and holders of Permitted Encumbrances).



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5.10        Leases.


5.10.1     Generally.  Upon request, Borrower shall, or shall cause
Mortgage Borrower to, 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 permit Mortgage Borrower
to 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, or shall cause Mortgage Borrower to, 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 Mortgage 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 or Mortgage 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 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 permit Mortgage Borrower 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 



 49
 








(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 Mortgage Borrower of amounts for tenant improvements and/or the
performance by Mortgage Borrower of such tenant improvements, Borrower shall,
or shall cause Mortgage Borrower to, 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 shall cause Mortgage Borrower to
(i)  observe and perform the material obligations imposed upon the lessor
under the Leases, and not do or permit anything to impair the value of the
Leases as security for the Debt; (ii) promptly send copies to Lender of
all notices of default that Mortgage Borrower shall send or receive under any
Lease; (iii)  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) not collect any of the Rents more than one month
in advance (other than security deposits); (v) not execute any other
assignment of lessor’s interest in the Leases or the Rents (except as
contemplated by the Loan Documents); (vi) not modify any Lease in a manner
inconsistent with the Loan Documents; (vii) 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) not consent to any assignment of
or subletting 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) 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.


5.11        Estoppel
Statement. 
After request by Lender, Borrower shall furnish Lender within ten days 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.



 50
 








5.12        Property
Management.


5.12.1     Management
Agreement. 
Borrower shall cause Mortgage Borrower to (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 Mortgage 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 permit Mortgage Borrower to
(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 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, cause Mortgage
Borrower to 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 cause Mortgage Borrower 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 cause Mortgage Borrower to, 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, cause 



 51
 








Mortgage
Borrower to terminate the Sub-Management Agreement and, at Mortgage 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 cause Mortgage Borrower 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 cause Mortgage Borrower to, 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 Mortgage 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, and shall cause Mortgage
Borrower GP and Mortgage Borrower to, at all times be a Special Purpose
Bankruptcy Remote Entity. Borrower shall not, and shall not permit Mortgage
Borrower or Mortgage Borrower GP to, directly or indirectly make any change,
amendment or modification to its organizational documents, or otherwise take
any action which could result in Borrower not being a Special Purpose
Bankruptcy Remote Entity.  A “Special Purpose Bankruptcy Remote
Entity” shall have the meaning set forth on Schedule 5 hereto
(in the case of Borrower) or as set forth on Schedule 5 to the Mortgage Loan
Agreement (in the case of Mortgage Borrower and Mortgage Borrower GP).


5.14        Assumption
in Non-Consolidation Opinion.  Borrower shall, and shall cause Mortgage
Borrower to, 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 Ownership of the Collateral.  Borrower shall not purchase or own any assets
other than the Collateral and assets incidental to its ownership of the
Collateral and shall not enter into any line of business other than the
ownership of the Collateral, 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 own the Collateral.  Borrower
shall not permit Mortgage Borrower to purchase or own any real property other
than the Property and shall not permit Mortgage Borrower to 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).



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


5.17        Affiliate
Transactions. 
Borrower shall not and other than the Management Agreement, Borrower
shall permit Mortgage Borrower to enter into, or be a party to, any transaction
with an Affiliate of Borrower, Mortgage 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, Mortgage
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, and shall not permit
Mortgage Borrower to, 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, and shall not permit Mortgage Borrower to, 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, and shall not permit Mortgage Borrower to, 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, and shall not permit
Mortgage Borrower to, change its name, identity (including its trade name or
names) or organizational structure without notifying Lender of such change in
writing at least thirty (30) days prior to the effective date of such change
and, in the case of a change in Borrower’s 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 Mortgage Borrower intends to operate the Property, and
representing and warranting that Borrower or Mortgage Borrower, as applicable,
does business under no other trade name with respect to the Property.



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5.22        Indebtedness.  Borrower shall not incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation), other
than the Debt, except for liabilities incurred in the ordinary course of
business relating to the ownership of the Collateral and the routine
administration of Borrower, in amounts not to exceed $10,000 which liabilities
are not more than sixty (60) days past due and are not evidenced by a note (“Permitted Indebtedness”).  Borrower shall not permit Mortgage Borrower
to directly or indirectly create, incur or assume any indebtedness in violation
of the terms and provisions of Section 5.22 of the Mortgage Loan Agreement.  Notwithstanding the foregoing, with respect
to the 60-day period set forth in Section 5.22 of the Mortgage Loan Agreement
relating to the Mortgage Permitted Indebtedness, Borrower may, or may cause
Mortgage Borrower, 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 Mortgage Permitted
Indebtedness (during which time such 60-day period shall be tolled), provided
that if Borrower or Mortgage Borrower desires to withhold payment of such
Mortgage 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 or Collateral 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 Mortgage
Permitted Indebtedness being contested, and (iv) Borrower shall promptly
upon final determination thereof pay the amount of such Mortgage Permitted
Indebtedness, together with all costs, interest and penalties and Borrower
shall be permitted to use such security to make such payment.  Notwithstanding the foregoing, Borrower shall
be relieved of its obligation to deposit the security described above provided
Mortgage Borrower is required to and does deliver such security to Mortgage
Lender in accordance with the Mortgage Loan Documents and Lender receives
evidence reasonably acceptable to Lender of the delivery of such security.  Provided no Default or Event of Default shall
have occurred and is continuing, upon delivery of evidence reasonably
satisfactory to Lender that such Mortgage Permitted Indebtedness has 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 5.22 shall promptly be
released to Borrower.


5.23        Licenses.  Borrower shall not, and shall not permit
Mortgage Borrower to, 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, and shall not permit
Mortgage Borrower to, 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     No
Loan Party shall 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




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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.


5.25.2     No
Loan Party shall maintain, sponsor, contribute to or become obligated to
contribute to, or suffer or permit any ERISA Affiliate of such Loan Party to,
maintain, sponsor, contribute to or become obligated to contribute to, any Plan
or any Welfare Plan or permit the assets of such Loan Party 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) no
Loan Party is or maintains 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) no Loan Party is
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 such Loan Party
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 such Loan Party are held by “benefit
plan investors” within the meaning of 29 C.F.R. §2510.3-101(f)(2); or


(3)           Such Loan Party 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, and shall not permit
Mortgage Borrower to, 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,
Mortgage Borrower or Mortgage Borrower GP shall be permitted except in accordance
with this Agreement.


5.26.2     Intentionally
Omitted.


5.26.3     Intentionally
Omitted.


5.27        Liens.  Without Lender’s prior written consent,
Borrower shall not, and shall not permit Mortgage Borrower to, create, incur,
assume, permit or suffer to exist any Lien on all or any portion of the
Property or Collateral or any direct or indirect legal or beneficial ownership
interest in Mortgage Borrower or Borrower, except Liens in favor of Lender and
Permitted Encumbrances, unless such Lien is bonded or discharged within 30 days
after Borrower or Mortgage 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 or Mortgage Borrower
under the provisions of this Agreement or the Mortgage Loan Agreement, as
applicable, and Borrower or Mortgage Borrower is in fact contesting such Lien
in accordance with the express provisions and conditions set forth in this 



 55
 








Agreement or the Mortgage Loan Agreement, as applicable).  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.


5.28        Dissolution.  Borrower shall not, and shall not permit
Mortgage Borrower to (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 (x) with
respect to Borrower, the Collateral and (y) with respect to Mortgage Borrower,
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 or Mortgage 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, or shall cause Mortgage Borrower to, 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, UCC insurance,
surveys, inspections and appraisals; (vi) the creation, perfection or
protection of Lender’s Liens in the Collateral 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, Mortgage
Borrower, the Loan Documents, the Collateral, 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 Collateral.


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, 



 56
 








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 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
Collateral or any interest therein; (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 Collateral.


5.31        Intentionally
Omitted.


5.32        Intentionally
Omitted.


5.33        Patriot
Act Compliance.  (a) Borrower will
use, and shall cause Mortgage Borrower to 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, Mortgage Borrower, the Collateral and the Property,
including those relating to money laundering and terrorism.  Lender shall have the right to audit Borrower’s
and 



 57
 








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


(b)        Neither Borrower, Mortgage 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”.


5.34        Mortgage
Reserve Funds.  Borrower
shall cause Mortgage Borrower to deposit and maintain each of the escrows and
reserves established under the Mortgage Loan as more particularly set forth in
Article 3 of the Mortgage Loan Agreement and to perform and comply with all the
terms and provisions relating thereto.


5.35        Notices.  Borrower shall give notice, or cause notice
to be given, to Lender promptly upon the occurrence of any Mortgage Event of
Default.



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5.36        Special
Distributions. 
On each date on which amounts are required to be disbursed to Lender
pursuant to Article 3 of the Mortgage Loan Agreement, Borrower shall exercise
its rights under the organizational documents of Mortgage Borrower to cause
Mortgage Borrower to make to Borrower a distribution in an aggregate amount
such that Lender shall receive the amount required to be disbursed pursuant to
Article 3 of the Mortgage Loan Agreement.


5.37        Mortgage
Borrower Covenants.  Borrower shall cause Mortgage Borrower to
comply with all obligations with which Mortgage Borrower has covenanted to
comply under the Mortgage Loan Agreement and all other Mortgage Loan Documents
(including, without limitation, those certain affirmative and negative
covenants set forth in the Mortgage Loan Agreement) whether the Mortgage Loan
has been repaid or the related Mortgage Loan Document has been otherwise
terminated, unless otherwise consented to in writing by Lender.  Borrower shall cause Mortgage Borrower to
promptly notify Lender of all notices received by Mortgage Borrower under or in
connection with the Mortgage Loan, including, without limitation, any notice by
the Mortgage Lender to Mortgage Borrower of any default by Mortgage Borrower in
the performance or observance of any of the terms, covenants or conditions of
the Mortgage Loan Documents on the part of Mortgage Borrower to be performed or
observed, and deliver to Lender a true copy of each such notice, together with
any other consents, notices, requests or other written correspondence between
Mortgage Borrower and Mortgage Lender.


5.38        Mortgage
Loan Estoppels. 
Borrower shall, or shall cause Mortgage Borrower to, use commercially
reasonable efforts from time to time, to obtain from the Mortgage Lender such
certificates of estoppel with respect to compliance by Mortgage Borrower with
the terms of the Mortgage Loan Documents as may be reasonably requested by
Lender.  In the event or to the extent
that Mortgage Lender is not legally obligated to deliver such certificates of
estoppel and is unwilling to deliver the same, or is legally obligated to
deliver such certificates of estoppel but breaches such obligation, then
Borrower shall not be in breach of this provision so long as Borrower furnishes
to Lender an estoppel executed by Borrower and Mortgage Borrower and expressly
representing to Lender, to the best of their knowledge, the information
requested by Lender regarding compliance by Mortgage Borrower with the terms of
the Mortgage Loan Documents.  Borrower
hereby indemnifies Lender from and against all out-of-pocket liabilities,
obligations, losses, damages, penalties, assessments, actions, or causes of
action, judgments, suits, claims, demands, costs, expenses (including, without
limitation, reasonable attorneys’ and other professional fees, whether or not
suit is brought and settlement costs) and disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against Lender
based in whole or in part upon any fact, event, condition, or circumstances
relating to the Mortgage Loan which was misrepresented in, or which warrants
disclosure and was knowingly omitted from such estoppel executed by Borrower
and Mortgage Borrower.


5.39        Limitation
on Securities Issuances.  Borrower shall not issue, and shall not
permit Mortgage Borrower to issue, any limited liability company membership  interests or other
securities other than those that have been issued as of the date hereof.



 59
 









5.40        Distributions.


(a)         Any and all dividends, including
capital dividends, stock or liquidating dividends, distributions of property,
redemptions or other distributions made by Mortgage Borrower on or in respect
of any interests in Mortgage Borrower, and any and all cash and other property
received in payment of the principal of or in redemption of or in exchange for
any such interests (collectively, the “Distributions”),
shall become part of the Collateral. 
Notwithstanding the foregoing, Lender expressly agrees that Borrower
shall be permitted to distribute to its member any Distributions that Borrower receives only
upon the express condition that no Event of Default has occurred and is
continuing under the Loan.


(b)        If any Distributions shall be received
by Borrower or any Affiliate of Borrower after the occurrence and during the
continuance of an Event of Default, Borrower shall hold, or shall cause the
same to be held, in trust for the benefit of Lender.  Any and all revenue derived from the Property
paid directly by tenants, subtenants or occupants of the Property shall be held
and applied in accordance with the terms and provisions of the Mortgage Loan
Agreement.


5.41        Refinancing
or Prepayment of the Mortgage Loan.  Borrower shall not be required to obtain the
consent of Lender to permit Mortgage Borrower to refinance the Mortgage Loan,
provided that the Loan shall have (or shall simultaneously be) been paid in
full in accordance with the terms of this Agreement (including any prepayment
premiums and other amounts due and payable to Lender under the Loan Documents).  Borrower shall obtain the prior written
consent of Lender prior to permitting Mortgage Borrower to enter into any other
refinancing of the Mortgage Loan.


5.42        Acquisition of the
Mortgage Loan.


(a)         No Loan Party, or any Affiliate of any
of them or any Person acting at any such Person’s request or direction, shall
acquire or agree to acquire the lender’s interest in the Mortgage Loan, or any
portion thereof or any interest therein, or any direct or indirect ownership
interest in the holder of the Mortgage Loan, via purchase, transfer, exchange
or otherwise, and any breach or attempted breach of this provision shall
constitute an Event of Default hereunder. 
If, solely by operation of applicable subrogation law, Borrower shall
have failed to comply with the foregoing, then Borrower: (i) shall promptly
notify Lender of such failure; (ii) shall cause any and all such prohibited
parties acquiring any interest in the Mortgage Loan Documents: (A) not to
enforce the Mortgage Loan Documents; and (B) upon the request of Lender, to the
extent any of such prohibited parties has or have the power or authority to do
so, to promptly: (1) cancel the promissory note evidencing the Mortgage Loan,
(2) reconvey and release the Lien securing the Mortgage Loan and any other
collateral under the Mortgage Loan Documents, and (3) discontinue and terminate
any enforcement proceeding(s) under the Mortgage Loan Documents.


(b)        Lender shall have the right at any time
to acquire all or any portion of the Mortgage Loan or any interest in any holder
of, or participant in, the Mortgage Loan without notice or consent of Borrower
or any other Loan Party, in which event Lender shall have and may exercise all
rights of Mortgage Lender thereunder (to the extent of its interest), including
the right (i) to declare that the Mortgage Loan is in default and (ii) to
accelerate the Mortgage Loan indebtedness, in accordance with the terms thereof
and (iii) to pursue all remedies against



 60
 









any obligor
under the Mortgage Loan Documents.  In
addition, Borrower hereby expressly agree that any claims, counterclaims,
defenses, offsets, deductions or reductions of any kind which Mortgage Borrower
or any other Person may have against Mortgage Lender relating to or arising out
of the Mortgage Loan shall be the personal obligation of Mortgage Lender, and
in no event shall Mortgage Borrower be entitled to bring, pursue or raise any
such claims, counterclaims, defenses, offsets, deductions or reductions against
Lender or any Affiliate of Lender or any other Person as the successor holder
of the Mortgage Loan or any interest therein, provided that Mortgage Borrower
may seek specific performance of its contractual rights under the Mortgage Loan
Documents.


5.43        Material
Agreements.


(a)         Borrower shall not, and shall not
permit any Loan Party to, enter into any Material Agreement without the consent
of Lender not to be unreasonably withheld or delayed.  Lender may condition its consent upon
Mortgage Borrower also obtaining the consent of the Mortgage Lender, if
applicable.  Upon the request of Lender
with respect to Material Agreements, Borrower shall use its commercially
reasonable efforts to, or shall cause the applicable Loan Party to use its
commercially reasonable efforts to, deliver to Lender a recognition agreement
from such service or material provider, among other things, providing for such
Person’s continued performance should Lender become the owner of the
Collateral.  Each such Material Agreement
and each recognition agreement relating thereto, shall be in form and substance
reasonably acceptable to Lender in all respects, including the amount of the
costs and fees thereunder.


(b)        Except as specifically set forth herein,
Borrower will not, and will not permit or cause any Loan Party to, amend,
modify, supplement, rescind or terminate any Material Agreement, without Lender’s
approval, not to be unreasonably withheld or delayed, including the identity of
the party to perform services under such agreement.  If a material or service provider under a
Material Agreement is in default in its obligations thereunder to the extent
entitling the applicable Loan Party to rescind or terminate that agreement,
then if Lender so reasonably requires (but not otherwise), Borrower will, or
will cause the applicable Loan Party to, promptly use all reasonable efforts to
terminate that agreement and appoint a new party in its place, with such
identity and terms of appointment approved by Lender, not to be unreasonably
withheld or delayed.


(c)         Borrower shall and shall cause each
Loan Party, as applicable, to observe and perform, in all material respects,
each and every term to be observed or performed by such Loan Party under the
Material Agreements.


5.44        Mortgage
Loan Document Amendments.  Borrower shall not permit Mortgage Borrower
to amend, waive, supplement, terminate, extend, renew, replace or otherwise
modify any Mortgage Loan Document without the prior written consent of Lender,
which consent shall not be unreasonably withheld or delayed.



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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; 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, the Collateral 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 cause Mortgage Borrower 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 provided in connection with the ownership of the
Collateral, whether such income or expense is realized by Borrower or any
Affiliate of Borrower.  Borrower shall
cause Mortgage Borrower to keep on a calendar year basis, in accordance with
GAAP (or federal income tax basis of accounting, consistently applied), proper



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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
Collateral or the Property at the office of Borrower, Mortgage Borrower or
other Person maintaining them, and to make such copies or extracts thereof as
Lender shall desire.  After an Event of
Default, Borrower shall pay any costs incurred by Lender to examine such books,
records and accounts, as Lender shall determine to be necessary or appropriate
in the protection of Lender’s interest.


6.3.2       Annual
Reports.  Borrower will furnish, and cause to be
furnished, to Lender annually, within 120 days after each calendar year, a
complete copy of Borrower’s annual financial statements accompanied by an
Officer’s Certificate (audited, if an Event of Default then exists and Lender
requires for such statements for any year by notice delivered no later than
October 31 of the calendar year in question), each in accordance with GAAP (or
federal income tax basis of accounting, consistently applied), covering the
Collateral owned by Borrower and containing balance sheets and statements of
profit and loss for Borrower and the Collateral in such detail as Lender may
request.


6.3.3       Mortgage
Loan Financial Information.  Borrower will furnish, or cause Mortgage
Borrower to furnish, to Lender a copy of the financial statements and all other
materials Mortgage Borrower is required to provide Mortgage Lender under
Section 6.3 of the Mortgage Loan Agreement within the time periods required
under such Section.


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 Collateral or the Property and
the financial affairs of Borrower, Mortgage Borrower or Manager as may be
reasonably requested by Lender or any applicable Rating Agency.


6.3.5       Annual
Budget. 
Borrower shall cause Mortgage Borrower to 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 Mortgage Borrower’s
anticipated operating income and operating expenses (on a cash and accrual
basis), including amounts required to establish, maintain and/or increase any
monthly payments required hereunder. 
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.



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6.3.6       Additional
Reporting.


(a)         If requested by Lender, Borrower shall
provide or cause Mortgage Borrower to provide to 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 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)



 64
 









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 or cause Mortgage Borrower to provide to 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 or caused to be 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 or cause Mortgage Borrower to provide to 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 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



 65
 









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 or cause Mortgage
Borrower to promptly provide to Lender, 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 or cause Mortgage Borrower to provide to 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 or cause Mortgage Borrower to provide to 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 Mortgage 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 Mortgage
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 Mortgage 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 Collateral alone or the Collateral and other assets
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.


(a)         Borrower shall cause Mortgage Borrower
to maintain at all times during the term of the Loan the insurance required
under Section 7.1 of the Mortgage Loan Agreement, including, without
limitation, meeting all insurer requirements thereunder.  In addition, Borrower shall cause Lender to
be named as a named insured together with Mortgage Lender or as an additional
named insured under each of the insurance policies described in Section 7.1 of
the Mortgage Loan Agreement as requested by Lender.  Borrower shall also cause all insurance
policies required under such Section 7.1 to provide for at least thirty (30)



 66
 









days prior
notice to Lender in the event of modification, reduction or cancellation of any
of the Policies.  Borrower shall deliver,
or cause to be delivered to Lender, simultaneously with delivery by Mortgage
Borrower to Mortgage Lender of the same, certified copies of the Policies
marked “premium paid” or accompanied by evidence satisfactory to Lender of
payment of the premiums due thereunder shall be delivered by Borrower to
Lender.


(b)        If at any time Lender is not in receipt
of written evidence that all insurance required hereunder is in full force and
effect, Lender shall have the right, without notice to Borrower, to take such
action as Lender deems necessary to protect its interest in the Collateral,
including, without limitation, the obtaining of such insurance coverage as
Lender in its sole discretion deems appropriate and all expenses incurred by
Lender in connection with such action or in obtaining such insurance and
keeping it in effect shall be paid by Borrower to Lender upon demand and until
paid shall be secured by the Pledge Agreement and shall bear interest at the Default
Rate.


(c)         For purposes of this Agreement, Lender
shall have the same approval rights over the insurance referred to in the
Mortgage Loan Agreement (including, without limitation, the insurers,
deductibles and coverages thereunder, as well as the right to require other
reasonable insurance pursuant to the terms of the Mortgage Loan Agreement) as
are provided in favor of Mortgage Lender in the Mortgage Loan Agreement.  All liability insurance provided for in the Mortgage
Loan Agreement shall provide insurance with respect to the liabilities of both
the Mortgage Borrower and Borrower.  The
Policies delivered pursuant to the Mortgage Loan Agreement shall include
endorsements of the type described in Section 7.1.2 thereof, but pursuant to
which Lender shall have the same rights as the Mortgage Lender as referred to
in such Section 7.1.2.


(d)        In the event that the Mortgage Loan has
been paid in full, Lender shall have the same right to participate in and
reasonably approve any settlement for insurance or condemnation claims with
respect to the Proceeds or Award for the Property as is provided in favor of
Mortgage Lender in the Mortgage Loan Agreement. 
If an Event of Default shall have occurred and be continuing, Borrower
hereby irrevocably empowers Lender, in the name of Borrower as its true and
lawful attorney-in-fact to cause Mortgage Borrower to file and prosecute such
claim and to collect and to make receipt for any such payment.


7.2          Casualty.  If the Property is damaged or destroyed, in
whole or in part, by a Casualty, Borrower shall cause Mortgage Borrower to give
prompt notice thereof to Lender. 
Following the occurrence of a Casualty, Borrower shall cause Mortgage
Borrower, regardless of whether Proceeds are available (unless Mortgage Lender
has breached its obligation (if any) to make such Proceeds available pursuant
to Section 7.4.1 of the Mortgage Loan Agreement), to 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.


7.3          Condemnation.  Borrower shall cause
Mortgage Borrower to promptly give Lender notice of the actual or threatened
commencement of any Condemnation and shall cause Mortgage Borrower to deliver
to Lender copies of any and all papers served in connection with such
Condemnation.  Following the occurrence
of a Condemnation, Borrower shall cause



 67
 









Mortgage Borrower, regardless of whether an Award is available (unless
Mortgage Lender has breached its obligation (if any) to make such Award
available pursuant to Section 7.4.1 of the Mortgage Loan Agreement), to
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.


7.4          Application
of Proceeds or Award.


(a)         Borrower shall, or shall cause Mortgage
Borrower to, deliver to Lender all reports, plans, specifications, documents
and other materials that are delivered to Mortgage Lender under Section 7.4 of
the Mortgage Loan Agreement in connection with a Restoration of the Property
after a Casualty or Condemnation.  If any
Proceeds or Award are to be disbursed by Mortgage Lender for Restoration,
Borrower shall deliver or cause to be delivered to Lender copies of all written
correspondence of a material nature delivered to and received from Mortgage
Lender that relates to the Restoration and release of the Proceeds or Award.


(b)        Notwithstanding any provision in this
Agreement to the contrary, all Proceeds and Award will be made available to
Mortgage Borrower in accordance with the Mortgage Loan Agreement.  In the event the Mortgage Loan has been paid
in full and Lender receives any Proceeds or Award, Lender shall either apply
such proceeds to the Debt or for the Restoration of the Property in accordance
with the same terms and conditions contained in Section 7.4 of the Mortgage
Loan Agreement.


7.5          Rights
of Lender. 
For purposes of this Article 7, Borrower shall obtain the approval of
Lender for each matter requiring the approval of Mortgage Lender under the
provisions of Sections 7.4 of the Mortgage Loan Agreement, with each reference
in any such provisions to the “Loan” to include the Mortgage Loan and the Loan,
and the reference in any such provisions to the “Stated Maturity Date” to mean
the Stated Maturity Date, as defined herein. 
If the Mortgage Lender does not require the deposit by the Mortgage
Borrower of any deficiency in proceeds to complete any Restoration pursuant to
Section 7.4 of the Mortgage Loan Agreement, Lender shall have the right to
demand that Borrower make a deposit of such amounts in accordance with the
terms of such Section (as if each reference therein to “Borrower” and “Lender”
referred to Borrower and Lender, respectively).


8.                                      DEFAULTS


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


(a)         any portion of the Debt is not paid
when due or 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);



 68
 









(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, Mortgage 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, Mortgage 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, Mortgage Borrower or Guarantor; or Borrower,
Mortgage 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, Mortgage Borrower or
Guarantor, as the case may be; or any proceeding for the dissolution or
liquidation of Borrower, Mortgage Borrower or Guarantor shall be instituted;
provided however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by Borrower, Mortgage 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, 5.28, 5.39,
5.40, 5.41, 5.42 or 5.43;


(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;


(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;



 69
 









(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];


(o)        the Liens created pursuant to any Loan
Document shall cease to be a fully enforceable first priority security
interest;


(p)        a Mortgage Event of Default shall occur,
and shall not have been waived or settled by Mortgage Lender or cured by
Mortgage Borrower, or if Mortgage Borrower enters into or otherwise suffers or
permits any amendment, waiver (by Mortgage Borrower), supplement, termination,
extension, renewal, replacement or other modification of any Mortgage Loan
Document in violation of Section 5.44 hereof; or


(q)        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 any or all of the Collateral and may exercise all the rights and
remedies of a secured party under the Uniform Commercial Code against Borrower
and the Collateral; 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.



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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 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 Collateral, the security interest granted under the Pledge
Agreement has been foreclosed, the Collateral 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 portion of the Collateral 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 Collateral 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, pledge agreements
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 security interest granted under the Pledge Agreement to the extent
necessary to foreclose on all or any portion of the Collateral or any other
collateral.



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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 applicable laws, secured by the Pledge Agreement 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 Pledge Agreement 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) or the Collateral reasonably
necessary to protect the Property, the Collateral or any other security given
for the Loan or to preserve any of Lender’s rights or remedies under the Loan
Documents.


8.3          Right
to Cure Defaults. 
Upon the occurrence and during the continuance of any Event of Default,
Lender may, but without any obligation to do so and without notice to or demand
on Borrower and without releasing Borrower from any obligation hereunder, make
any payment or do any act required of Borrower hereunder in such manner and to
such extent as Lender may deem necessary to protect the security hereof.  Subject to the rights of tenants under their
respective Leases, Lender is authorized to enter upon the Property for such
purposes, or appear in, defend, or bring any action or proceeding to protect
its interest in the Property for such purposes, and the cost and expense
thereof (including reasonable attorneys’ fees to the extent permitted by law),
with interest as provided in this Section 8.3, shall constitute a portion of
the Debt and shall be due and payable to Lender upon demand.  All such costs and expenses incurred by
Lender in remedying such Event of Default or such failed payment or act or in
appearing in, defending, or bringing any action or proceeding shall bear
interest at the Default Rate, for the period after notice from Lender that such
cost or expense was incurred to the date of payment to Lender.  All such costs and expenses incurred by
Lender together with interest thereon calculated at the Default Rate shall be
deemed to constitute a portion of the Debt and be secured by the liens, claims
and security interests provided to Lender under the Loan Documents and shall be
immediately due and payable upon demand by Lender therefor.


8.4          Power
of Attorney. 
For the purpose of carrying out the provisions and exercising the
rights, powers and privileges granted in this Article 8, Borrower hereby
irrevocably appoints Lender as its true and lawful attorney-in-fact to execute,
acknowledge and deliver any instruments and do and perform any acts such as are
referred to in this Article in the name and on behalf of Borrower.  This power of attorney is a power coupled
with an interest and cannot be revoked.



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9.                                      SPECIAL
PROVISIONS


9.1          Sale
of Notes and Securitization.  


Lender may, at any time, sell, transfer, pledge or assign the Note,
this Agreement, the Pledge Agreement 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 Collateral, the Property, Borrower, Mortgage
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 hereof), which counsel, opinions and
organizational documents shall be satisfactory to Lender and the Rating
Agencies;


(c)         if required by the Rating Agencies,
cause Mortgage Borrower to use its 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.



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(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 Mortgage 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 Mortgage Loan after
such modification shall not exceed the weighted average of the interest rate
spreads for the Loan and the Mortgage 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 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 Collateral,
the Property, Borrower, Mortgage 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



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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 Mortgage Loan,
Borrower, any Loan Party, Guarantor, Manager, the Property, the Collateral 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 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 related to the Loan, the Mortgage Loan, Borrower, any Loan
Party, Guarantor, Manager, the Property, the Collateral 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 or necessary in order to make the statements in such sections (as they
relate to such matters) or in 



 75
 









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 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



 76
 









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.


(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 Mortgage 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 Mortgage Loan immediately following such reallocation shall equal the
outstanding principal balance of the Loan and the Mortgage Loan immediately
prior to such reallocation, and (ii) the weighted average of the interest rate
spreads for the Loan and the Mortgage Loan after such reallocation shall not
exceed the weighted average of the interest rate spreads for the Loan and the
Mortgage Loan immediately prior to such reallocation (without giving effect to
any deviation attributable



 77
 









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
Mortgage 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 Mortgage 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          Mortgage
Loan Defaults.


(a)         Without limiting the generality of the
other provisions of this Agreement, and without waiving or releasing Borrower
from any of its obligations hereunder, if there shall occur any Mortgage Event
of Default, Borrower hereby expressly agrees that Lender shall have the
immediate right (to the extent necessary to remediate or cure such Mortgage
Event of Default), without notice to or demand on Borrower or Mortgage
Borrower, but shall be under no obligation: (i) to pay all or any part of the
Mortgage Loan, and any other sums, that are then due and payable and to perform
any act or take any action on behalf of Mortgage Borrower, as may be
appropriate, to cause all of the terms, covenants and conditions of the
Mortgage Loan Documents on the part of Mortgage Borrower to be performed or
observed thereunder to be promptly performed or observed; and (ii) to pay any
other amounts and take any other action as Lender, in its sole and absolute
discretion, shall deem advisable to protect or preserve the rights and
interests of Lender in the Loan and/or the Collateral.  Lender shall have no obligation to complete
any cure or attempted cure undertaken or commenced by Lender.  All sums so paid and the costs and expenses
incurred by Lender in exercising rights under this Section (including, without
limitation, reasonable attorneys’ and other professional fees), with interest
at the Default Rate, for the period from the date of demand by Lender to
Borrower for such payments to the date of payment to Lender, shall constitute a
portion of the Debt, shall be secured by the Pledge Agreement and shall be due
and payable to Lender within two (2) Business Days following demand therefor.


(b)        Subject to the rights of tenants,
Borrower hereby grants, and shall cause Mortgage Borrower to grant, Lender and
any Person designated by Lender the right to enter upon the Property at any
time for the purpose of carrying out the rights granted to Lender under this
Section 9.4.



 78
 









(c)         Borrower hereby indemnifies Lender from
and against all out-of-pocket liabilities, obligations, losses, damages,
penalties, assessments, actions, or causes of action, judgments, suits, claims,
demands, costs, expenses (including, without limitation, reasonable attorneys’
and other professional fees, whether or not suit is brought, and settlement
costs), and disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against Lender as a result of the foregoing actions
described in Section 9.4(a), except to the extent arising out of the fraud,
illegal acts, gross negligence or willful misconduct of Lender.  Lender shall have no obligation to Borrower,
Mortgage Borrower or any other party to make any such payment or performance.  Borrower shall not impede, interfere with,
hinder or delay, and shall cause Mortgage Borrower to not impede, interfere
with, hinder or delay, any effort or action on the part of Lender to cure any
default or asserted default under the Mortgage Loan, or to otherwise protect or
preserve Lender’s interests in the Loan and the Collateral following a default
or asserted default under the Mortgage Loan.


(d)        If Lender shall receive a copy of any
notice of default under the Mortgage Loan Documents sent by Mortgage Lender to
Mortgage Borrower, such notice shall constitute full protection to Lender for
any action taken or omitted to be taken by Lender, in good faith, in reliance
thereon.  As a material inducement to
Lender’s making the Loan, Borrower hereby absolutely and unconditionally
release and waive all claims against Lender arising out of Lender’s exercise of
its rights and remedies provided in this Section other than claims arising out
of the fraud, illegal acts, gross negligence or willful misconduct of Lender.


(e)         In the event that Lender makes any
payment in respect of the Mortgage Loan, Lender shall be subrogated to all of
the rights of Mortgage Lender under the Mortgage Loan Documents against the
Property and Mortgage Borrower in addition to all other rights Lender may have
under the Loan Documents or applicable law.


9.5          Intercreditor
Agreement.


(a)         Lender and Mortgage Lender are or will
be parties to a certain intercreditor agreement (the “Intercreditor Agreement”) memorializing their relative
rights and obligations with respect to the Mortgage Loan, the Loan, Mortgage
Borrower, 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 Mortgage Lender and (ii) Borrower and Mortgage 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 Mortgage 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.


(b)        In the event the Lender is required
pursuant to the terms of the Intercreditor Agreement to pay over any payment or
distribution of assets, whether in cash, property or securities which is
applied to the Debt, including, without limitation, any proceeds of the
Property previously received by Lender on account of the Loan to the Mortgage
Lender, then Borrower agrees that any amounts so paid shall be deemed to
continue to be owing pursuant to the Loan Documents as part of the Debt
notwithstanding the prior receipt of such payment by Lender.



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9.6          Discussions
with Mortgage Lender.  In connection with the exercise of its rights
set forth in the Loan Documents, Lender shall have the right at any time to
discuss the Property, the Mortgage Loan, the Loan or any other matter directly
with Mortgage Lender or Mortgage Lender’s consultants, agents or
representatives without notice to or permission from Borrower or any other Loan
Party, nor shall Lender have any obligation to disclose such discussions or the
contents thereof with Borrower or any other Loan Party.


9.7          Independent
Approval Rights. 
If any action, proposed action or other decision is consented to or
approved by Mortgage Lender, such consent or approval shall not be binding or
controlling on Lender.  Borrower hereby
acknowledges and agrees that (i) the risks of Mortgage Lender in making the
Mortgage Loan are different from the risks of Lender in making the Loan, (ii)
in determining whether to grant, deny, withhold or condition any requested
consent or approval Mortgage Lender and Lender may reasonably reach different
conclusions, and (iii) Lender has an absolute independent right to grant, deny,
withhold or condition any requested consent or approval based on its own point
of view.  Further, the denial by Lender
of a requested consent or approval in accordance with the Loan Documents shall
not create any liability or other obligation of Lender if the denial of such
consent or approval results directly or indirectly in a default under the
Mortgage Loan, and Borrower hereby waives any claim of liability against Lender
arising from any such denial.


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 Collateral 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 Collateral 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 Pledge Agreement; (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) [intentionally omitted]; (v) [intentionally omitted];
(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 Pledge Agreement or to exercise its remedies against the
Collateral; 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



 80
 









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 and Mortgage 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 or Mortgage Borrower after an Event of Default and not applied to
payment of Principal and interest due under the Note or the Mortgage Note
pursuant to the terms of the Loan Documents or the Mortgage Loan Documents, 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 and Mortgage Borrower is legally prevented from
directing the disbursement of such sums); (e) misappropriation (including
failure to turn over to Lender or Mortgage Lender, as applicable, on demand
following an Event of Default) of tenant security deposits and rents collected
in advance, or of funds held by Borrower or Mortgage 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, 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 or Mortgage Lender, as applicable,
failed to pay same or has elected not to pay the same pursuant to Section 3.3
hereof or Section 3.3 of the Mortgage Loan Agreement, as applicable 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 Collateral); (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; (k) Borrower’s
or Mortgage 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 hereof or Section 3.13 of the
Mortgage Loan Agreement, as applicable, where such disbursement was made
directly to Borrower or Mortgage 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



 81
 









which shows that such disbursement has been applied to the payment of
sums for which such disbursement was requested); (l) Borrower’s or Mortgage
Borrower’s misappropriation of Net Liquidation Proceeds After Debt Service; or
(m) Borrower’s making a distribution to its equity owners during the existence
of an Event of Default.


(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 of their respective Affiliates brings
or joins in any action or proceeding for the partition of the Property, the
Collateral 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



 82
 









of the Collateral, 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.


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. 
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.



 83
 









(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 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



 84
 









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 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



 85
 









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.


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



 86
 









the use, forbearance or detention of the Loan shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Debt does not exceed the maximum
lawful rate from time to time in effect and applicable to the Debt for so long
as the Debt is outstanding. 
Notwithstanding anything to the contrary contained in any Loan Document,
it is not the intention of Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.


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


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


10.20      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 and Section 2.3.4 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



 87
 









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 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.



 88














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 M, 

  LLC,  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  CITIGROUP
  GLOBAL MARKETS REALTY 

  CORP., a New York corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 











Schedule
1


Intentionally
Omitted











Schedule
2


Intentionally
Omitted
















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
Mortgage Borrower) and Pharmacia Corporation, if any, as Pharmacia may have
under such unrecorded instrument.



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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 the Collateral, (B) owning or leasing the Property
or (C) 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 of the Collateral (B) the
ownership or leasing of the Property, (C) acting as general partner of the
limited partnership that owns or leases the Property or (D) 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 interest in the limited
partnership that owns or leases the Property, or the membership interest in the
limited liability company which has a partnership interest in the limited
partnership 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



 5-1
 









institute insolvency proceedings or otherwise seek any
relief under any laws relating to the relief from debts or the protection of
debtors generally, (B) seek or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator, custodian or any similar official
for such entity or for all or any portion of such entity’s properties,
(C) make any assignment for the benefit of such entity’s creditors or
(D) take any action that might cause such entity to become insolvent;
(x) has remained and 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, or (d) if such entity acts as the managing member of a limited
liability company which acts as the general partnership of the limited
partnership that owns the Property, has and will have no indebtedness (in
addition to such liability as it has by virtue of its status as managing
member) other than unsecured trade payables in the ordinary course of business
relating to acting as managing member of the limited liability company which
acts as general partner of the 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; (xxii) except, if applicable,
by virtue of its status as a managing member of the general partner, has not
and will not assume or guarantee or become obligated for



 5-2
 









the debts of any other Person or hold out its credit
as being available to satisfy the obligations of any other Person except for
the Loan; (xxiii) has not and will not acquire obligations or securities
of its partners, members or shareholders; (xxiv) has allocated and will
allocate fairly and reasonably shared expenses, including shared office space,
and uses separate stationery, invoices and checks; (xxv) except in
connection with the Loan, has not pledged and will not pledge its assets for
the benefit of any other Person; (xxvi) has held itself out and identified
itself and will hold itself out and identify itself as a separate and distinct
entity under its own name and not as a division or part of any other Person;
(xxvii) has maintained and will maintain its assets in such a manner that
it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any other Person; (xxviii) has not made and will
not make loans to any Person; (xxix) has not identified and will not
identify its partners, members or shareholders, or any Affiliate of any of
them, as a division or part of it; (xxx) 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



 5-3
 









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 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 



 5-4
 









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
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



 5-5
 









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.



 5-6















Schedule
8


Rent Roll


(See
Attached)



 8-1















Schedule
9


Mortgage
Loan Documents



 8-1















Exhibit A


Out-Parcel


(See
Attached)



 8-1