Document:

Exhibit 4.1

 

 

THE BANK OF NEW YORK MELLON

NEW YORK’S FIRST BANK-FOUNDED 1784 BY ALEXANDER HAMILTON

 

 

2 HANSON PLACE, 12TH FLOOR, BROOKLYN,
N.Y. 11217

 

 

 

September 24, 2013

 

Hennion & Walsh, Inc.

2001 Route 46, Waterview Plaza

Parsippany, New Jersey 07054

 

Smart Trust, Value Architects Disciplined
Core Portfolio Trust, Series 7

Dear Sirs:

The Bank of New York
Mellon is acting as trustee for Smart Trust, Value Architects Disciplined Core Portfolio Trust, Series 7 set forth above (the “Trust”).
We enclosed a list of the Securities to be deposited in the Trust on the date hereof. The prices indicated therein reflect our
evaluation of such Securities as of close of business on September 24, 2013, in accordance with the valuation method set forth
in the Trust Indenture and Agreement. We consent to the reference to The Bank of New York Mellon as the party performing the evaluations
of the Trust Securities in the Registration Statement (No. 333-190066) filed with the Securities and Exchange Commission with respect
to the registration of the sale of the Trust Units and to the filing of this consent as an exhibit thereto.

 

 

Very truly yours,

 

/s/ GERARDO
CIPRIANO_______________ 

Vice PresidentExhibit 4.3

 

Consent of Independent Registered
Public Accounting Firm

We consent to the
reference made to our firm under the caption “Independent Registered Public Accounting Firm” in Part B of the Prospectus
and to the use of our report dated September 24, 2013, in this Registration Statement (Form S-6 No. 333-190066) of Smart Trust,
Value Architects Disciplined Core Portfolio Trust, Series 7.

 

/s/ Grant
Thornton LLP

Grant
Thornton LLP

Chicago, Illinois

September 24, 2013Exhibit 10.1

	
  

 
	
 Loan Number: 94-0960547

 
	
  

 
	
 LOAN AGREEMENT

 
	
  

 
	
 Dated as of September
 18, 2013

 
	
  

 
	
 Between

 
	
  

 
	
 AmREIT
 Woodlake Square, LP,

 
	
 as Borrower

 
	
  

 
	
 and

 
	
  

 
	
 PNC
 BANK, NATIONAL ASSOCIATION,

 
	
 as Lender

 

TABLE OF
CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 
	
 I.

 	
 DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 	
  

 	
 1

 
	
  

 	
 Section 1.1

 	
  

 	
 Definitions

 	
  

 	
 1

 
	
  

 	
 Section 1.2

 	
  

 	
 Principles of Construction

 	
  

 	
 26

 
	
 II.

 	
 GENERAL TERMS

 	
  

 	
 26

 
	
  

 	
 Section 2.1

 	
  

 	
 The Loan

 	
  

 	
 26

 
	
  

 	
 2.1.1

 	
  

 	
 Agreement to Lend and Borrow

 	
  

 	
 26

 
	
  

 	
 2.1.2

 	
  

 	
 Single Disbursement to Borrower

 	
  

 	
 26

 
	
  

 	
 2.1.3

 	
  

 	
 The Note, Security Instrument and Other Loan
 Documents

 	
  

 	
 26

 
	
  

 	
 2.1.4

 	
  

 	
 Use of Proceeds

 	
  

 	
 26

 
	
  

 	
 Section 2.2

 	
  

 	
 Interest Rate and Payments

 	
  

 	
 26

 
	
  

 	
 2.2.1

 	
  

 	
 Interest Generally; Usury

 	
  

 	
 26

 
	
  

 	
 2.2.2

 	
  

 	
 Interest Calculation

 	
  

 	
 27

 
	
  

 	
 2.2.3

 	
  

 	
 Payments Before Maturity Date; Monthly Debt Service
 Payment Amount

 	
  

 	
 27

 
	
  

 	
 2.2.4

 	
  

 	
 Payment on Maturity Date

 	
  

 	
 28

 
	
  

 	
 2.2.5

 	
  

 	
 Payments After Default

 	
  

 	
 28

 
	
  

 	
 2.2.6

 	
  

 	
 Late Payment Charge

 	
  

 	
 28

 
	
  

 	
 2.2.7

 	
  

 	
 Release on Payment in Full

 	
  

 	
 28

 
	
  

 	
 Section 2.3

 	
  

 	
 Manner of Making Payments

 	
  

 	
 29

 
	
  

 	
 2.3.1

 	
  

 	
 Making of Payments

 	
  

 	
 29

 
	
  

 	
 2.3.2

 	
  

 	
 Credit for Payment Receipt

 	
  

 	
 29

 
	
  

 	
 2.3.3

 	
  

 	
 Invalidated Payments

 	
  

 	
 29

 
	
  

 	
 2.3.4

 	
  

 	
 No Deductions, etc

 	
  

 	
 29

 
	
  

 	
 2.3.5

 	
  

 	
 Application of Payments

 	
  

 	
 29

 
	
  

 	
 2.3.6

 	
  

 	
 Increased Costs

 	
  

 	
 29

 
	
  

 	
 2.3.7

 	
  

 	
 Taxes

 	
  

 	
 30

 
	
  

 	
 Section 2.4

 	
  

 	
 Prepayments

 	
  

 	
 32

 
	
  

 	
 2.4.1

 	
  

 	
 Voluntary Prepayments

 	
  

 	
 32

 
	
  

 	
 2.4.2

 	
  

 	
 Prepayment Consideration

 	
  

 	
 32

 
	
  

 	
 2.4.3

 	
  

 	
 Mandatory Prepayments

 	
  

 	
 33

 
	
  

 	
 2.4.4

 	
  

 	
 Prepayments After Event of Default

 	
  

 	
 33

 
	
 III.

 	
 [INTENTIONALLY OMITTED]:

 	
  

 	
 34

 
	
 IV.

 	
 REPRESENTATIONS AND WARRANTIES

 	
  

 	
 34

 

TABLE OF CONTENTS
(continued) 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 4.1

 	
  

 	
 Borrower Representations

 	
  

 	
 34

 
	
  

 	
 4.1.1  

 	
  

 	
 Organization

 	
  

 	
 34

 
	
  

 	
 4.1.2  

 	
  

 	
 Proceedings

 	
  

 	
 34

 
	
  

 	
 4.1.3  

 	
  

 	
 No Conflicts

 	
  

 	
 34

 
	
  

 	
 4.1.4  

 	
  

 	
 Litigation

 	
  

 	
 34

 
	
  

 	
 4.1.5  

 	
  

 	
 Agreements

 	
  

 	
 35

 
	
  

 	
 4.1.6  

 	
  

 	
 Title

 	
  

 	
 35

 
	
  

 	
 4.1.7  

 	
  

 	
 Solvency; No Bankruptcy Filing

 	
  

 	
 35

 
	
  

 	
 4.1.8  

 	
  

 	
 Financial Information

 	
  

 	
 36

 
	
  

 	
 4.1.9  

 	
  

 	
 Full and Accurate Disclosure

 	
  

 	
 36

 
	
  

 	
 4.1.10

 	
  

 	
 No Plan Assets

 	
  

 	
 36

 
	
  

 	
 4.1.11

 	
  

 	
 Compliance

 	
  

 	
 37

 
	
  

 	
 4.1.12

 	
  

 	
 Anti-Money Laundering/International Trade Law
 Compliance

 	
  

 	
 37

 
	
  

 	
 4.1.13

 	
  

 	
 Reliance

 	
  

 	
 37

 
	
  

 	
 4.1.14

 	
  

 	
 No Contingent Liabilities

 	
  

 	
 37

 
	
  

 	
 4.1.15

 	
  

 	
 Condemnation

 	
  

 	
 38

 
	
  

 	
 4.1.16

 	
  

 	
 Federal Reserve Regulations

 	
  

 	
 38

 
	
  

 	
 4.1.17

 	
  

 	
 Access; Utilities

 	
  

 	
 38

 
	
  

 	
 4.1.18

 	
  

 	
 Not a Foreign Person

 	
  

 	
 38

 
	
  

 	
 4.1.19

 	
  

 	
 Separate Lots

 	
  

 	
 38

 
	
  

 	
 4.1.20

 	
  

 	
 Assessments

 	
  

 	
 38

 
	
  

 	
 4.1.21

 	
  

 	
 Enforceability

 	
  

 	
 38

 
	
  

 	
 4.1.22

 	
  

 	
 No Prior Assignment

 	
  

 	
 39

 
	
  

 	
 4.1.23

 	
  

 	
 Insurance

 	
  

 	
 39

 
	
  

 	
 4.1.24

 	
  

 	
 Use of Property

 	
  

 	
 39

 
	
  

 	
 4.1.25

 	
  

 	
 Certificate of Occupancy; Licenses

 	
  

 	
 39

 
	
  

 	
 4.1.26

 	
  

 	
 Flood Zone

 	
  

 	
 39

 
	
  

 	
 4.1.27

 	
  

 	
 Physical Condition

 	
  

 	
 39

 
	
  

 	
 4.1.28

 	
  

 	
 Boundaries

 	
  

 	
 40

 
	
  

 	
 4.1.29

 	
  

 	
 Leases

 	
  

 	
 40

 
	
  

 	
 4.1.30

 	
  

 	
 Survey

 	
  

 	
 40

 
	
  

 	
 4.1.31

 	
  

 	
 No Mezzanine Loan

 	
  

 	
 41

 
	
  

 	
 4.1.32

 	
  

 	
 Filing and Recording Taxes

 	
  

 	
 41

 
	
  

 	
 4.1.33

 	
  

 	
 Management Agreement

 	
  

 	
 41

 

 ii

TABLE OF CONTENTS
(continued) 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.1.34

 	
  

 	
 Illegal Activity

 	
  

 	
 41

 
	
  

 	
 4.1.35

 	
  

 	
 Investment Company Act

 	
  

 	
 41

 
	
  

 	
 4.1.36

 	
  

 	
 Bank Holding Company

 	
  

 	
 41

 
	
  

 	
 4.1.37

 	
  

 	
 Principal Place of Business; State of Organization

 	
  

 	
 41

 
	
  

 	
 4.1.38

 	
  

 	
 Taxpayer Identification Number

 	
  

 	
 42

 
	
  

 	
 4.1.39

 	
  

 	
 Business Purposes

 	
  

 	
 42

 
	
  

 	
 4.1.40

 	
  

 	
 Taxes

 	
  

 	
 42

 
	
  

 	
 4.1.41

 	
  

 	
 Forfeiture

 	
  

 	
 42

 
	
  

 	
 4.1.42

 	
  

 	
 Accounts

 	
  

 	
 42

 
	
  

 	
 4.1.43

 	
  

 	
 [Intentionally Omitted]

 	
  

 	
 42

 
	
  

 	
 4.1.44

 	
  

 	
 Property Document Representations

 	
  

 	
 43

 
	
  

 	
 4.1.45

 	
  

 	
 Material Agreements

 	
  

 	
 43

 
	
  

 	
 Section 4.2

 	
  

 	
 Survival of Representations

 	
  

 	
 43

 
	
 V.

 	
 BORROWER COVENANTS

 	
 43

 
	
  

 	
 Section 5.1

 	
  

 	
 Existence; Compliance with Legal Requirements;
 Insurance

 	
  

 	
 43

 
	
  

 	
 Section 5.2

 	
  

 	
 Property Taxes and Other Charges

 	
  

 	
 44

 
	
  

 	
 Section 5.3

 	
  

 	
 Litigation

 	
  

 	
 45

 
	
  

 	
 Section 5.4

 	
  

 	
 Access to Property

 	
  

 	
 45

 
	
  

 	
 Section 5.5

 	
  

 	
 Notice of Default

 	
  

 	
 45

 
	
  

 	
 Section 5.6

 	
  

 	
 Cooperate in Legal Proceedings

 	
  

 	
 45

 
	
  

 	
 Section 5.7

 	
  

 	
 Performance Under Loan Documents

 	
  

 	
 45

 
	
  

 	
 Section 5.8

 	
  

 	
 Awards and Insurance Proceeds

 	
  

 	
 45

 
	
  

 	
 Section 5.9

 	
  

 	
 Further Assurances

 	
  

 	
 45

 
	
  

 	
 Section 5.10

 	
  

 	
 Financial Reporting

 	
  

 	
 46

 
	
  

 	
 Section 5.11

 	
  

 	
 Business and Operations

 	
  

 	
 48

 
	
  

 	
 Section 5.12

 	
  

 	
 Title to the Property

 	
  

 	
 48

 
	
  

 	
 Section 5.13

 	
  

 	
 Costs of Enforcement

 	
  

 	
 49

 
	
  

 	
 Section 5.14

 	
  

 	
 Estoppel Statements

 	
  

 	
 49

 
	
  

 	
 Section 5.15

 	
  

 	
 Loan Proceeds

 	
  

 	
 49

 
	
  

 	
 Section 5.16

 	
  

 	
 No Joint Assessment

 	
  

 	
 49

 
	
  

 	
 Section 5.17

 	
  

 	
 Leasing Matters

 	
  

 	
 50

 
	
  

 	
 Section 5.18

 	
  

 	
 Alterations

 	
  

 	
 51

 
	
  

 	
 Section 5.19

 	
  

 	
 Access Laws

 	
  

 	
 52

 
	
  

 	
 Section 5.20

 	
  

 	
 Property Management

 	
  

 	
 52

 

 iii

TABLE OF CONTENTS
(continued) 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 5.21

 	
  

 	
 Compliance with Anti-Terrorism Laws

 	
  

 	
 54

 
	
  

 	
 Section 5.22

 	
  

 	
 Liens

 	
  

 	
 54

 
	
  

 	
 Section 5.23

 	
  

 	
 Dissolution

 	
  

 	
 55

 
	
  

 	
 Section 5.24

 	
  

 	
 Change In Business

 	
  

 	
 55

 
	
  

 	
 Section 5.25

 	
  

 	
 Debt Cancellation

 	
  

 	
 55

 
	
  

 	
 Section 5.26

 	
  

 	
 Property Document Covenants

 	
  

 	
 55

 
	
  

 	
 Section 5.27

 	
  

 	
 Zoning

 	
  

 	
 55

 
	
  

 	
 Section 5.28

 	
  

 	
 Name, Identity, Structure, or Principal Place of
 Business

 	
  

 	
 56

 
	
  

 	
 Section 5.29

 	
  

 	
 ERISA

 	
  

 	
 56

 
	
 VI.

 	
 TRANSFERS

 	
  

 	
 56

 
	
  

 	
 Section 6.1

 	
  

 	
 Borrower Acknowledgement

 	
  

 	
 56

 
	
  

 	
 Section 6.2

 	
  

 	
 Prohibition on Transfers

 	
  

 	
 57

 
	
  

 	
 Section 6.3

 	
  

 	
 Sanctioned Persons

 	
  

 	
 59

 
	
  

 	
 Section 6.4

 	
  

 	
 Transfer Documentation

 	
  

 	
 59

 
	
  

 	
 Section 6.5

 	
  

 	
 No Impairment

 	
  

 	
 59

 
	
  

 	
 Section 6.6

 	
  

 	
 Death or Incapacity of Individual Guarantor

 	
  

 	
 59

 
	
  

 	
 Section 6.7

 	
  

 	
 Lender’s Rights

 	
  

 	
 59

 
	
 VII.

 	
 INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

 	
  

 	
 60

 
	
  

 	
 Section 7.1

 	
  

 	
 Insurance

 	
  

 	
 60

 
	
  

 	
 Section 7.2

 	
  

 	
 Casualty

 	
  

 	
 65

 
	
  

 	
 Section 7.3

 	
  

 	
 Condemnation

 	
  

 	
 65

 
	
  

 	
 Section 7.4

 	
  

 	
 Restoration

 	
  

 	
 66

 
	
 VIII.

 	
 SINGLE PURPOSE ENTITY/SEPARATENESS PROVISIONS

 	
  

 	
 70

 
	
  

 	
 Section 8.1

 	
  

 	
 Single Purpose Entity/Separateness

 	
  

 	
 70

 
	
  

 	
 Section 8.2

 	
  

 	
 [Intentionally Omitted]

 	
  

 	
 74

 
	
  

 	
 Section 8.3

 	
  

 	
 Single Purpose Entity/Separateness

 	
  

 	
 74

 
	
 IX.

 	
 RESERVE FUNDS –

 	
  

 	
 74

 
	
  

 	
 Section 9.1

 	
  

 	
 Reserve Funds and Reserve Accounts Generally

 	
  

 	
 74

 
	
  

 	
 Section 9.2

 	
  

 	
 Property Tax and Insurance Escrow Fund

 	
  

 	
 75

 
	
  

 	
 9.2.1

 	
  

 	
 Deposits

 	
  

 	
 75

 
	
  

 	
 9.2.2

 	
  

 	
 Disbursements

 	
  

 	
 76

 
	
  

 	
 9.2.3

 	
  

 	
 Insufficiency

 	
  

 	
 76

 
	
  

 	
 9.2.4

 	
  

 	
 Conditional Monthly Property Tax Deposit Waiver

 	
  

 	
 76

 
	
  

 	
 9.2.5

 	
  

 	
 Conditional Monthly Insurance Deposit Waiver

 	
  

 	
 76

 

iv

TABLE OF CONTENTS
(continued) 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 9.3

 	
  

 	
 Business Interruption Insurance Account

 	
  

 	
 76

 
	
  

 	
 9.3.1

 	
  

 	
 Deposits

 	
  

 	
 76

 
	
  

 	
 9.3.2

 	
  

 	
 Disbursements

 	
  

 	
 77

 
	
  

 	
 9.3.3

 	
  

 	
 Insufficiency

 	
  

 	
 77

 
	
  

 	
 Section 9.4

 	
  

 	
 Required Repair Fund

 	
  

 	
 78

 
	
  

 	
 9.4.1

 	
  

 	
 Deposits

 	
  

 	
 78

 
	
  

 	
 9.4.2

 	
  

 	
 Disbursements

 	
  

 	
 78

 
	
  

 	
 9.4.3

 	
  

 	
 Performance of Required Repairs

 	
  

 	
 79

 
	
  

 	
 9.4.4

 	
  

 	
 Failure to Make Required Repairs

 	
  

 	
 80

 
	
  

 	
 Section 9.5

 	
  

 	
 Replacement Reserve Fund

 	
  

 	
 81

 
	
  

 	
 9.5.1

 	
  

 	
 Deposits

 	
  

 	
 81

 
	
  

 	
 9.5.2

 	
  

 	
 Disbursements

 	
  

 	
 81

 
	
  

 	
 9.5.3

 	
  

 	
 Performance of Replacements

 	
  

 	
 82

 
	
  

 	
 9.5.4

 	
  

 	
 Failure to Make Replacements

 	
  

 	
 84

 
	
  

 	
 Section 9.6

 	
  

 	
 TILC Reserve

 	
  

 	
 84

 
	
  

 	
 9.6.1

 	
  

 	
 Deposits

 	
  

 	
 84

 
	
  

 	
 9.6.2

 	
  

 	
 Disbursements

 	
  

 	
 84

 
	
  

 	
 Section 9.7

 	
  

 	
 Early Lease Termination Reserve

 	
  

 	
 86

 
	
  

 	
 9.7.1

 	
  

 	
 Deposits

 	
  

 	
 86

 
	
  

 	
 9.7.2

 	
  

 	
 Disbursements for Qualified Replacement Lease for
 Entire Vacated Space

 	
  

 	
 86

 
	
  

 	
 9.7.3

 	
  

 	
 Disbursements for Qualified Replacement Lease for
 Less Than Entire Vacated Space

 	
  

 	
 86

 
	
 X.

 	
 DEFAULTS

 	
  

 	
 87

 
	
  

 	
 Section 10.1

 	
  

 	
 Event of Default

 	
  

 	
 87

 
	
  

 	
 Section 10.2

 	
  

 	
 Remedies

 	
  

 	
 91

 
	
  

 	
 Section 10.3

 	
  

 	
 Remedies Cumulative; Waivers

 	
  

 	
 92

 
	
 XI.

 	
 SPECIAL PROVISIONS

 	
  

 	
 92

 
	
  

 	
 Section 11.1

 	
  

 	
 Sale of Notes and Securitization

 	
  

 	
 92

 
	
  

 	
 Section 11.2

 	
  

 	
 Securitization Cooperation and Indemnification

 	
  

 	
 95

 
	
  

 	
 Section 11.3

 	
  

 	
 Exculpation

 	
  

 	
 96

 
	
  

 	
 Section 11.4

 	
  

 	
 Servicer

 	
  

 	
 99

 
	
  

 	
 Section 11.5

 	
  

 	
 Conversion to Registered Form

 	
  

 	
 99

 
	
  

 	
 Section 11.6

 	
  

 	
 Mezzanine Financing

 	
  

 	
 100

 

v

TABLE OF CONTENTS
(continued) 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 XII.

 	
 ACCOUNTS AND ACCOUNT COLLATERAL

 	
  

 	
 101

 
	
  

 	
 Section 12.1

 	
  

 	
 Permitted Investments

 	
  

 	
 101

 
	
  

 	
 Section 12.2

 	
  

 	
 Income From Permitted Investments

 	
  

 	
 101

 
	
  

 	
 Section 12.3

 	
  

 	
 Sole Dominion and Control

 	
  

 	
 101

 
	
  

 	
 Section 12.4

 	
  

 	
 Grant of Security Interest

 	
  

 	
 101

 
	
  

 	
 Section 12.5

 	
  

 	
 No Other Security Interest

 	
  

 	
 101

 
	
  

 	
 Section 12.6

 	
  

 	
 Change of Account Names

 	
  

 	
 102

 
	
  

 	
 Section 12.7

 	
  

 	
 Rights on Default

 	
  

 	
 102

 
	
  

 	
 Section 12.8

 	
  

 	
 Limitations on Liability of Lender

 	
  

 	
 102

 
	
  

 	
 Section 12.9

 	
  

 	
 Indemnity

 	
  

 	
 103

 
	
  

 	
 Section 12.10

 	
  

 	
 Disbursement of Disputed Funds

 	
  

 	
 104

 
	
  

 	
 Section 12.11

 	
  

 	
 Disbursement Upon Payment in Full

 	
  

 	
 104

 
	
 XIII.

 	
 MISCELLANEOUS

 	
  

 	
 104

 
	
  

 	
 Section 13.1

 	
  

 	
 Survival

 	
  

 	
 104

 
	
  

 	
 Section 13.2

 	
  

 	
 Lender’s Discretion

 	
  

 	
 104

 
	
  

 	
 Section 13.3

 	
  

 	
 Governing Law

 	
  

 	
 105

 
	
  

 	
 Section 13.4

 	
  

 	
 Modification, Waiver in Writing

 	
  

 	
 105

 
	
  

 	
 Section 13.5

 	
  

 	
 Nonwaiver

 	
  

 	
 105

 
	
  

 	
 Section 13.6

 	
  

 	
 Notices

 	
  

 	
 105

 
	
  

 	
 Section 13.7

 	
  

 	
 Financing Statements

 	
  

 	
 106

 
	
  

 	
 Section 13.8

 	
  

 	
 Waiver of Trial by Jury

 	
  

 	
 107

 
	
  

 	
 Section 13.9

 	
  

 	
 Headings

 	
  

 	
 107

 
	
  

 	
 Section 13.10

 	
  

 	
 Severability

 	
  

 	
 107

 
	
  

 	
 Section 13.11

 	
  

 	
 Preferences

 	
  

 	
 107

 
	
  

 	
 Section 13.12

 	
  

 	
 Waiver of Automatic or Supplemental Stay

 	
  

 	
 107

 
	
  

 	
 Section 13.13

 	
  

 	
 Bankruptcy Acknowledgment

 	
  

 	
 108

 
	
  

 	
 Section 13.14

 	
  

 	
 Waiver of Notice

 	
  

 	
 108

 
	
  

 	
 Section 13.15

 	
  

 	
 Remedies of Borrower

 	
  

 	
 108

 
	
  

 	
 Section 13.16

 	
  

 	
 Expenses; Indemnity

 	
  

 	
 108

 
	
  

 	
 Section 13.17

 	
  

 	
 Exhibits Incorporated

 	
  

 	
 110

 
	
  

 	
 Section 13.18

 	
  

 	
 Offsets, Counterclaims and Defenses

 	
  

 	
 110

 
	
  

 	
 Section 13.19

 	
  

 	
 No Joint Venture or Partnership; No Third Party
 Beneficiaries

 	
  

 	
 110

 
	
  

 	
 Section 13.20

 	
  

 	
 Publicity

 	
  

 	
 110

 
	
  

 	
 Section 13.21

 	
  

 	
 Waiver of Marshalling of Assets

 	
  

 	
 111

 

vi

TABLE OF CONTENTS
(continued) 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Section 13.22

 	
  

 	
 Waiver of Counterclaim

 	
  

 	
 111

 
	
  

 	
 Section 13.23

 	
  

 	
 Conflict; Construction of Documents; Reliance

 	
  

 	
 111

 
	
  

 	
 Section 13.24

 	
  

 	
 Brokers and Financial Advisors

 	
  

 	
 111

 
	
  

 	
 Section 13.25

 	
  

 	
 Prior Agreements

 	
  

 	
 112

 
	
  

 	
 Section 13.26

 	
  

 	
 Assignments

 	
  

 	
 112

 
	
  

 	
 Section 13.27

 	
  

 	
 Duplicate Originals; Counterparts

 	
  

 	
 112

 
	
 XIV.

 	
 STATE-SPECIFIC PROVISIONS

 	
  

 	
 112

 
	
  

 	
 Section 14.1

 	
  

 	
 Maximum Rate

 	
  

 	
 112

 
	
  

 	
 Section 14.2

 	
  

 	
 SPECIFIC NOTICE REGARDING INDEMNITIES

 	
  

 	
 113

 

vii

LOAN AGREEMENT

          THIS
LOAN AGREEMENT, dated as of September 18, 2013, (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this (“Agreement”), is made
between PNC BANK, NATIONAL ASSOCIATION,
a national banking association (together with its successors and assigns, (“Lender”) and AmREIT WOODLAKE SQUARE, LP, a Texas limited
partnership having its principal place of business at 8 Greenway Plaza, Suite
1000, Houston, TX 77046 (“Borrower”).

RECITALS:

          A.          Borrower
desires to obtain the Loan from Lender; 

          B.          Lender
is willing to make the Loan to Borrower, subject to and in accordance with the
terms of this Agreement and the other Loan Documents; and

          C.          Borrower
acknowledges that while Lender has originated this Loan for its own account,
the provisions contained herein regarding Lender’s right to sell, participate
or Securitize the Loan are an important inducement to Lender making the Loan.

          NOW,
THEREFORE, in consideration of the making of the Loan by
Lender and the covenants, agreements, representations and warranties set forth
in this Agreement, and intending to be legally bound, the parties hereto hereby
covenant, agree, represent and warrant as follows:

	
  

 	
  

 
	
 I.

 	
 DEFINITIONS; PRINCIPLES OF CONSTRUCTION 

 

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

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

          “Access Laws” shall
mean the Americans with Disabilities Act of 1990, the Fair Housing Amendments
Act of 1988, all similar state and local Laws and ordinances related to access
and all rules, regulations, and orders issued pursuant thereto including,
without limitation, the Americans with Disabilities Act Accessibility
Guidelines for Buildings and Facilities.

          “Account Collateral”
shall mean: (a) the Accounts, the Reserve Funds, and any and all other amounts
from time to time deposited or held in any of the Accounts; (b) any and all
amounts invested in Permitted Investments; (c) all interest, dividends, Cash,
checks, drafts, certificates, securities, investment property, financial
assets, instruments and other property from time to time held in the Accounts,
or received, receivable or otherwise payable in respect of, or in exchange for,
any or all of the foregoing; and (d) to the extent not covered by clauses (a) -
(c) above, all “proceeds” (as defined under the UCC), products, distributions,
dividends or substitutions on or of any or all of the foregoing.

          “Accounts” shall mean,
collectively, the Reserve Accounts, and any sub-accounts established under any
of the foregoing, and any other escrow accounts or reserve accounts established
by the Loan Documents.

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

          “Additional Collateral”
shall have the meaning set forth in Section 1 of the Assignment of Agreements.

          “Additional Insolvency Opinion”
shall mean any non-consolidation opinion acceptable to Lender and any
applicable Rating Agencies required to be delivered in connection with the Loan
Documents after the Closing Date.

          “Affiliate” shall
mean, as to any Person, any other Person that, (a) 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 or
(b) directly or indirectly, beneficially owns or holds five percent (5%) or
more of any class of ownership interest in such Person.

          “Affiliated Manager”
shall mean any Manager which is an Affiliate of Borrower, SPE Component Entity
or any Guarantor, or in which Borrower, SPE Component Entity, or any Guarantor
has, directly or indirectly, any legal, beneficial or economic interest.

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

          “Alteration Threshold”
shall mean an amount equal to five percent (5.0%) of the outstanding principal
amount of the Loan.

          “Annual Budget” shall
mean the operating budget, including all planned Capital Expenditures, for the
Property prepared by Borrower for the applicable Fiscal Year or other period.

          “Anti-Terrorism Laws”
shall mean any Laws relating to terrorism, trade sanctions programs and
embargoes, import/export licensing, money laundering or bribery, and any
regulation, order, or directive promulgated, issued or enforced pursuant to
such Laws, all as amended, supplemented or replaced from time to time.

          “Applicable Interest Rate”
shall mean a rate of 4.30% per annum.

          
“Approved Accountant”
shall mean KPMG, or an accounting firm or other independent certified public
accountant acceptable to Lender.

          “Approved Lease Form”
shall mean a standard form of Lease for the Property approved in writing by
Lender.

          “Assignment of Agreements”
shall mean that certain first priority Assignment of Agreements Affecting Real
Estate, dated as of the date hereof, from Borrower, as assignor, to Lender, as
assignee, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

2

          “Assignment of Leases”
shall mean that certain first priority Assignment of Leases and Rents, dated as
of the date hereof, from Borrower, as assignor, to Lender, as assignee, as the
same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

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

          “Award” shall mean any
award, payment or other compensation paid by any Governmental Authority in
connection with a Condemnation in respect of the Property, including interest
thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including
but not limited to any transfer made in lieu of or in anticipation of the
exercise of the right), or for a change of grade, or for any other injury to or
decrease in the value of the Property.

          
“Bankruptcy Action”
shall mean with respect to any Person (a) such Person filing a voluntary
petition under the Bankruptcy Code or other Creditors Rights Laws; (b) the
filing of an involuntary petition against such Person under the Bankruptcy Code
or other Creditors Rights Laws, or such Person soliciting or causing to be
solicited petitioning creditors for any involuntary petition against such
Person; (c) such Person filing an answer consenting to or otherwise acquiescing
in or joining in any involuntary petition filed against it by any other Person
under the Bankruptcy Code or other Creditors Rights Laws, or such Person
soliciting or causing to be solicited petitioning creditors for any involuntary
petition from any Person; (d) such Person consenting to or acquiescing in or
joining in an application for the appointment of a custodian, receiver,
trustee, or examiner for such Person or the Property; or (e) such Person making
an assignment for the benefit of creditors, or admitting, in writing or in any
legal proceeding, its insolvency or inability to pay its debts as they become
due.

          “Bankruptcy Code”
shall mean Title 11 U.S.C. § 101 et seq., and the regulations adopted and
promulgated pursuant thereto (as the same may be amended from time to time).

          “Basel III” shall mean
the global regulatory standards issued on January 13, 2011 by members of the
Basel Committee on Banking Supervision.

          “Basic Carrying Costs”
shall mean the sum of the following costs associated with the Property for the
relevant Fiscal Year or payment period: (a) Property Taxes, (b) Other Charges,
and (c) Insurance Premiums.

          “Borrower” shall have
the meaning set forth in the introductory paragraph of this Agreement.

          “Borrower Party” shall
mean Borrower, any SPE Component Entity, Sponsor and Guarantor.

3

          “Business Day” shall
mean any day other than a Saturday, Sunday or any other day on which national
banks in New York, New York, Pittsburgh, Pennsylvania or Overland Park, Kansas
are authorized or required to be closed.

          “Business Interruption Insurance
Account” shall have the meaning set forth in Section 9.3.1 hereof.

          “Business Interruption Insurance
Funds” shall mean all funds in the Business Interruption
Insurance Account.

          “Business Interruption Insurance
Proceeds” shall have the meaning set forth in Section 7.1(a)(iii)
hereof.

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

          “Cash” shall mean coin
or currency of the United States of America or immediately available federal
funds, including such funds delivered by wire transfer.

          
“Casualty”
shall have the meaning specified in Section 7.2 hereof.

          “Casualty Consultant”
shall have the meaning set forth in Section 7.4(b)(iii) hereof.

          “Casualty Retainage”
shall have the meaning set forth in Section 7.4(b)(iv) hereof.

          “Change in Law” shall
mean the occurrence, after the date of this Agreement, of any of the following:
(a) the adoption or taking effect of any Law, (b) any change in any Law or in
the administration, interpretation, implementation or application thereof by
any Official Body or (c) the making or issuance of any request, rule, guideline
or directive (whether or not having the force of Law) by any Official Body;
provided however, that notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, regulations, guidelines, interpretations or directives thereunder or
issued in connection therewith (whether or not having the force of Law) (“Dodd-Frank”) and (y)
all requests, rules, regulations, guidelines, interpretations or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision Practices (or any successor or similar authority) or the
United States or foreign regulatory authorities (whether or not having the
force of Law), in each case pursuant to Basel III, shall in each case be deemed
to be a Change in Law regardless of the date enacted, adopted, issued,
promulgated or implemented.

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

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

4

          “Collateral” shall
mean the Property, the Accounts, the Account Collateral, the Guaranty, the
Personal Property, the Additional Collateral, the Management Agreement, and all
other real or personal property that is at any time pledged, mortgaged or
otherwise given as security to Lender for the payment of the Debt or the
performance of the Other Obligations.

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

          “Condemnation Proceeds”
shall have the meaning set forth in Section 7.4(b) hereof.

          “Control” shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise, including the power
to elect a majority of the directors or trustees of a corporation or trust, as
the case may be. “Controlled” and “Controlling” shall have correlative
meanings.

          “Covered Entity” shall
mean (a) each Borrower, all Guarantors and all pledgors of Collateral and (b)
each Person that, directly or indirectly, is in control of a Person described
in clause (a) above. For purposes of this definition, control of a Person shall
mean the direct or indirect (x) ownership of, or power to vote, 25% or more of
the issued and outstanding equity interests having ordinary voting power for
the election of directors of such Person or other Persons performing similar
functions for such Person, or (y) power to direct or cause the direction of the
management and policies of such Person whether by ownership of equity interests,
contract or otherwise.

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

          “Debt” shall mean the
outstanding principal amount of the Loan set forth in, and evidenced by, this
Agreement, the Note and the other Loan Documents, together with all interest
accrued and unpaid thereon and all other sums (including, without limitation,
the Prepayment Consideration) due to Lender in respect of the Loan under the
Note, this Agreement, the Security Instrument or any other Loan Document.

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

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

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

5

          “Disbursement Fee”
shall mean a nonrefundable fee equal to $200.00 payable as a condition to
disbursement from certain of the Reserve Accounts, as set forth in Article IX hereof, as
compensation for Lender’s review, analysis and processing of such disbursement.

          “Disclosure Document”
shall have the meaning set forth in Section 11.2(a) hereof.

          “Early Lease Termination Reserve
Account” shall have the meaning set forth in Section 9.7 hereof.

          “Early Lease Termination Reserve
Funds” shall have the meaning set forth in Section 9.7 hereof.

          “Eligible Account”
shall mean either (a) an account or accounts maintained with a federal or state-chartered
depository institution or trust company which complies with the definition of
Eligible Institution or (b) a segregated trust account or accounts maintained
with a federal or state-chartered depository institution or trust company
acting in its fiduciary capacity which, in the case of a state-chartered
depository institution or trust company, is subject to regulations
substantially similar to 12 C.F.R. § 9.10(b), having in either case a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authorities. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other instrument. The
Reserve Funds shall be Eligible Accounts but shall not constitute trust funds
and, at Lender’s option, may be (1) commingled with other monies held by
Lender, or (2) established as one or more separate accounts (which may include
one or more book-entry sub-accounts as deemed necessary by Lender). 

          “Eligible Institution”
shall mean a depository institution or trust company, insured by the Federal
Deposit Insurance Corporation, (a) 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 (b) the long term unsecured debt obligations of which are
rated at least “AA-” by S&P, “Aa3” by Moody’s and “AA-” by Fitch in the
case of accounts in which funds are held for more than thirty (30) days,
provided that PNC Bank shall be deemed to be an Eligible Institution for so
long as it maintains (i) a short term unsecured debt obligations or commercial
paper rating of 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
and (ii) a long term unsecured debt obligations rating of at least “A-” by
S&P, “A-1” by Moody’s and “A” by Fitch in the case of accounts in which
funds are held for more than thirty (30) days.

          “Environmental Indemnity”
shall mean that certain Environmental Indemnification Agreement, dated as of
the date hereof, executed by Borrower and each Guarantor on a joint and several
basis for the benefit of Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

          “Environmental Law”
shall have the meaning set forth in Section 2(b) of the Environmental Indemnity.

6

          “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as the same may be amended or
supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.

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

          “Exchange Act” shall
have the meaning set forth in Section 11.2(a) hereof.

          “Exchange Act Filing”
shall have the meaning set forth in Section 11.2 hereof.

          “Excluded Taxes” shall
mean any of the following Taxes imposed on or with respect to Lender or
required to be withheld or deducted from a payment to Lender: (a) Taxes imposed
on or measured by net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, (i) imposed as a result of Lender being organized
under the laws of, or having its principal office or its applicable lending
office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal
withholding Taxes imposed on amounts payable to or for the account of Lender
with respect to its interest in the Loan pursuant to a Law in effect on the
date on which (i) Lender acquires such interest in the Loan, or (ii) Lender
changes its lending office, (c) Taxes attributable to Lender’s failure to
comply with Section
2.3.7(e) hereof, and (d) any U.S. federal withholding Taxes
imposed under FATCA.

          “FATCA” shall mean
Sections 1471 through 1474 of the Code as of the date of this Agreement (as may
be amended or replaced from time to time), and any requests, rules,
regulations, guidelines, interpretations or directions promulgated by any
Official Body in connection therewith. 

          “Fiscal Year” shall
mean each twelve (12) month period commencing on January 1 and ending on
December 31 during each year of the term of the Loan.

          “Fitch” shall mean
Fitch, Inc.

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

          “Flood Insurance Policies”
shall have the meaning set forth in Section 7.1(a)(vii) hereof.

          “GAAP” shall mean
generally accepted accounting principles in the United States of America as are
in effect from time to time, and applied on a consistent basis both as to
classification of items and amounts.

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

          “Governmental Plan”
shall have the meaning set forth in Section 4.1.10(b) hereof.

7

          “Gross Income From Operations”
shall mean, during any period, all cash income derived from the ownership and
operation of the Property from whatever source, during such period, including,
but not limited to, Rents, utility charges, escalations, forfeited security
deposits, interest on credit accounts, service fees or charges, license fees,
parking fees, rent concessions or credits, and other required pass-throughs but
excluding (i) sales, use and occupancy or other taxes on receipts required to
be accounted for by Borrower to any Governmental Authority, (ii) refunds and
uncollectible accounts, (iii) proceeds from sales of furniture, fixtures and
equipment, (iv) Insurance Proceeds (other than business interruption or other
loss of income insurance), (v) Awards, (vi) unforfeited security deposits,
(vii) utility and other similar deposits, (viii) any disbursements to Borrower
from the Reserve Funds, and (ix) any payments from any other events not related
to the ordinary course of operation of the Property.

          “Guarantor” shall mean
AmREIT, Inc., a Maryland corporation, and any other Person guaranteeing any
payment or performance obligation of Borrower in respect of the Loan following
the date hereof, and any other Person providing any indemnity in respect of the
Loan following the date hereof.

          “Guaranty” shall mean
that certain Guaranty of Recourse Obligations of Borrower, dated as of the date
hereof, from Guarantor to Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

          “Hazardous Materials”
shall have the meaning set forth in Section 2(e) of the Environmental Indemnity.

          “Improvements” shall
have the meaning set forth in the Granting Clause of the Security Instrument.

          “Indebtedness” shall
mean, as to any Person at any time the sum of all indebtedness, obligations or
liabilities (whether matured or unmatured, liquidated or unliquidated, direct
or indirect, absolute or contingent, or joint or several) of such Person,
including, without limitation, any indebtedness, obligations or liabilities
for, or in respect of: (i) borrowed money, (ii) amounts raised under or
liabilities in respect of any note purchase or acceptance credit facility,
(iii) reimbursement obligations (contingent or otherwise) under any letter of
credit, currency swap agreement, interest rate swap, cap, collar or floor
agreement or other interest rate management device, (iv) any other transaction
(including, without limitation forward sale or purchase agreements, capitalized
leases and conditional sales agreements) having the commercial effect of a
borrowing of money entered into by such Person to finance its operations or
capital requirements, or (v) any guaranty.

          “Indemnified Parties”
shall mean Lender (including Lender as holder of the Security Instrument, as
mortgagee in possession, or as successor in interest to the owner of the
Property by virtue of a foreclosure or acceptance of a deed in lieu of
foreclosure), each Person, if any, who Controls, or is Controlled by, or is
under common Control with Lender, each Servicer, any Person who may hold or
acquire or will have held (either during the term of the Loan or as a part of
or following a foreclosure or acceptance of a deed in lieu of foreclosure) a
full or partial interest in the Loan (including, but not limited to, custodians,
trustees and other fiduciaries who 

8

hold or have held a full
or partial interest in the Loan for the benefit of other Persons), any Person
who was involved in the origination or modification of the Loan, any Person in
whose name the Lien of the Security Instrument is or will be recorded, each of
their respective successors and assigns, and each of their respective
directors, officers, shareholders, partners, employees, agents, servants,
representatives, contractors, and subcontractors.

          “Indemnified Taxes”
shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to
any payment made by or on account of any obligation of Borrower or Guarantor
under any Loan Document, and (ii) Other Taxes.

          “Independent Leasing Agent”
shall have the meaning set forth in Section 9.6.1 hereof.

          “Insolvency Opinion”
shall mean the substantive non-consolidation opinion required to be delivered
by counsel to Borrower pursuant to Section 11.1(b)(i) hereof, reasonably
satisfactory to Lender and the Rating Agencies, providing that in the event
that any of the Specified Parties were to become a debtor in a case under the
Bankruptcy Code, in a properly presented and argued case, the bankruptcy court
or other court of competent jurisdiction properly applying the Law and properly
analyzing the facts set forth therein would not order the substantive
consolidation of the assets and liabilities of Borrower with those of any of
the Specified Parties in such bankruptcy proceeding. For purposes of the
Insolvency Opinion, the “Specified Parties” shall mean any party owning,
directly or indirectly, more than forty-nine percent (49%) of the equity
interests in Borrower and any Affiliated Manager. If Borrower is a recycled
entity, the Insolvency Opinion shall address that issue in a manner
satisfactory to Lender and the Rating Agencies.

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

          “Insurance Proceeds”
shall have the meaning set forth in Section 7.4(b) hereof.

          “Interest Accrual Period”
shall mean, with respect to any Payment Date, the period beginning on and
including the first (1st) day of the calendar month preceding each Payment Date
through and including the last day of the calendar month preceding each Payment
Date.

          “Investor” shall mean
any purchaser, transferee, assignee, Servicer, participant or investor in all
or any portion of the Loan or any Securities.

          “Land” shall have the
meaning set forth in the Granting Clause of the Security Instrument.

          “Law” shall mean any
law(s) (including common law), constitution, statute, treaty, regulation, rule,
ordinance, opinion, issued guidance, release, ruling, order, executive order,
injunction, writ, decree, bond, judgment, authorization or approval, lien or
award of or any settlement arrangement, by agreement, consent or otherwise,
with any Governmental Authority,
foreign or domestic.

          “Lease” shall mean any
lease, sublease or subsublease, letting, license, concession, occupancy
agreement, or other agreement (whether written or oral and whether now or
hereafter 

9

in effect) pursuant to
which any Person is granted a possessory interest in, or right to use or occupy
all or any portion of the Land or any space in the Improvements, and (a) every
extension, renewal, replacement, modification, amendment, restatement or other
agreement relating thereto (whether before or after the filing by or against
Borrower of any petition for relief under any Creditors Rights Laws), and (b)
all right title and interest of Borrower, its successors and assigns therein
and thereunder, including, without limitation, any guaranty, letter of credit
or other credit support given by any tenant or other Person to guarantee or
secure the performance and observance of covenants to be performed by any other
party thereto. 

          “Lease Modification”
shall have the meaning set forth in Section 5.17(c) hereof.

          “Lease Termination Payments”
shall mean all rents, additional rents and other payments made to Borrower in
connection with any termination, rejection, cancellation, surrender, sale or
other disposition of any Lease (including in any Bankruptcy Action), together
with any reimbursement of the value of unamortized tenant improvements or
leasing commissions, lease buy-out or surrender payments, and any similar
proceeds, and any settlement of claims of Borrower against third parties in
connection with any Lease.

          “Leasing Requirements”
shall mean, with respect to any Lease that is not a Major Lease, that such
Lease (i) is written on the Approved Lease Form; (ii) provides for rental rates
comparable to existing local market rates for similar properties; (iii) is an
arm’s-length transaction with an unrelated third party tenant (unless otherwise
agreed by Lender); (iv) provides that such Lease is subordinate to the Security
Instrument and that the lessee will attorn to Lender and any purchaser at a
foreclosure sale; and (v) does not contain any option to purchase the Property or
any other terms which would have a Material Adverse Effect.

          “Legal Requirements”
shall mean all federal, state, county, municipal and other governmental
statutes, Laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities affecting the Property, or the
construction, use, alteration or operation thereof, whether now or hereafter
enacted and in force, and all Licenses and regulations relating thereto, and
all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, at any time in force
affecting the Property, including, without limitation, any which may (a)
require repairs, modifications or alterations in or to the Property, or (b) in
any way limit the use and enjoyment thereof.

          “Lender” shall have
the meaning set forth in the introductory paragraph of this Agreement.

          “Liabilities” shall
mean any and all claims, demands, actions, proceedings, suits, judgments, awards,
liabilities (including, without limitation, strict liabilities), losses,
damages, fines, penalties, charges, fees, obligations, debts, disbursements,
costs and expenses of any kind or nature whatsoever including, without
limitation, amounts paid in settlement, punitive damages, foreseeable damages
of whatever kind or nature, including litigation costs and reasonable attorneys’
fees and expenses, and reasonable attorneys’ fees and expenses imposed upon,
incurred by, or asserted against any Indemnified Party or by the Underwriter
Group, as applicable, in connection with any investigative, administrative or
judicial proceeding 

10

commenced or threatened,
whether or not any such Indemnified Party or any member of the Underwriter
Group, as applicable, shall be designated a party thereto.

          “Licenses” shall have
the meaning set forth in Section
4.1.25 hereof.

          “Lien” shall mean any
mortgage, deed of trust, lien, pledge, hypothecation, assignment, security
interest, or any other encumbrance, charge or transfer of, on or affecting
Borrower, the Property, any portion thereof or any interest therein, whether
voluntarily or involuntarily given, including, without limitation, any
conditional sale or other title retention agreement, any financing lease,
assignment or deposit arrangement 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 (whether or not a lien
or other encumbrance is created or exists at the time of filing).

          “LLC Agreement” shall
have the meaning set forth in Section 8.1(c) hereof.

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

          “Loan Documents” shall
mean, collectively, this Agreement, the Note, the Security Instrument, the
Assignment of Leases, Assignment of Agreements, the Guaranty, the Environmental
Indemnity, the Assignment of Management Agreement, and all other documents
executed and/or delivered in connection with the Loan as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

          “Lockout Period” shall
have the meaning set forth in Section 2.4.2 hereof.

          “Major Lease” shall
mean (a) any Lease which together with all other Leases to the same tenant and
to any Affiliates of such tenant, (i) provides for gross annual rental income
representing ten percent (10%) or more of the total annual rental income for
the Property, or (ii) covers ten percent (10%) or more of the total rentable
space at the Property, in the aggregate, or (iii) is with an Affiliate of
Borrower and (b) any instrument guaranteeing or providing credit support for
any of the foregoing.

          “Management Agreement”
shall mean that certain management agreement, dated September 18, 2013 entered into by and
between Borrower and Manager, pursuant to which the Manager is to provide
management and other services with respect to the Property, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with the terms and conditions of this Agreement.

          “Manager” shall mean
AmREIT Realty Investment Corporation, a Texas corporation.

          “Material Adverse Effect”
shall mean a material adverse effect on (i) the Property, (ii) the business,
profits, prospects, management, operations or condition (financial or
otherwise) of Borrower, Guarantor, Sponsor or the Property, (iii) the
enforceability, validity, perfection or priority of the lien of the Security
Instrument or the other Loan Documents, or (iv) the ability of Borrower and/or
Guarantor to perform its obligations under the Security Instrument or the other
Loan Documents.

11

          “Material Agreements”
shall mean, collectively, any contract or agreement of any kind (other than the
Leases and the Management Agreement) relating to the ownership, development,
leasing, management, use, operation, maintenance, repair, improvement or
Restoration of the Property, or otherwise imposing obligations on Borrower,
whether written or oral, which (i) is with an Affiliate of Borrower, (ii)
contains an obligation of Borrower to pay $150,000.00 or more per annum or (iii) is not
cancelable on sixty (60) days’ or less notice without the payment of any
termination fee or payment of any kind.

          “Maturity Date” shall
mean the Scheduled Maturity Date or such other date on which the final payment
of principal of the Note becomes due and payable as therein or herein provided,
whether at such stated maturity date, by declaration of acceleration, or
otherwise.

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

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

          “Mezzanine Borrower(s)”
shall have the meaning set forth in Section 11.6 hereof.

          “Mezzanine Lender”
shall mean PNC Bank, and any subsequent owner and holder of the Mezzanine Loan.

          “Mezzanine Loan(s)”
shall have the meaning set forth in Section 11.6 hereof.

          “Monthly Debt Service Payment Amount”
shall have the meaning set forth in Section 2.2.3 hereof.

          “Monthly Insurance Premium Deposit”
shall have the meaning set forth in Section 9.2.1 hereof.

          “Monthly Reserve Fund Deposits”
shall mean all deposits required to be made by Borrower to the Reserve Funds on
a monthly basis pursuant to Article IX hereof.

          “Monthly Property Tax Deposit”
shall have the meaning set forth in Section 9.2.1 hereof.

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

          “Mortgage Loan” shall
have the meaning set forth in Section 11.6 hereof.

          “Net Cash Flow” shall
mean for any period the amount obtained by subtracting Operating Expenses and
Capital Expenditures for such period from Gross Income From Operations for such
period.

12

          “Net Operating Income”
shall mean for any period the amount obtained by subtracting Operating Expenses
from Gross Income From Operations.

          “Net Proceeds” shall
have the meaning set forth in Section 7.4(b) hereof.

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

          “Non-U.S. Entity”
shall have the meaning set forth in Section 2.3.7(e) hereof.

          “Note” shall mean that
certain Promissory Note dated as of the date hereof in the principal amount of TWENTY-THREE MILLION and No/100 Dollars ($23,000,000.00), made by Borrower in favor
of Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

          “Officers’ Certificate”
shall mean a certificate delivered to Lender by Borrower or any Guarantor, as
applicable, which is signed by a Responsible Officer of Borrower or any
Guarantor, as applicable.

          “Official Body” shall
mean the government of the United States of America or any other nation, or of
any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank) and any group or body charged with setting financial accounting or
regulatory capital rules or standards (including, without limitation, the
Financial Accounting Standards Board, the Bank for International Settlements or
the Basel Committee on Banking Supervision or any successor or similar
authority to any of the foregoing).

          “Operating Account”
shall mean an operating account established, maintained by and under the
exclusive dominion and control of Borrower.

          “Operating Expenses”
shall mean the total of all cash expenditures of whatever kind relating to the
operation, maintenance and management of the Property that are incurred on a
regular monthly or other periodic basis, including without limitation,
utilities, ordinary repairs and maintenance, insurance, License fees, Property
Taxes and assessments, advertising expenses, management fees, payroll and
related taxes, computer processing charges, operational equipment or other
lease payments as approved by Lender, and other similar costs, but excluding
depreciation, Debt Service, Capital Expenditures, and Monthly Reserve Fund
Deposits.

          “Other Charges” shall
mean all maintenance charges, impositions other than Property Taxes, and any
other charges, including, without limitation, 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.

          “Other Connection Taxes”
shall mean, with respect to Lender, Taxes imposed as a result of a present or
former connection between Lender and the jurisdiction imposing such Tax,
excluding connections arising from Lender having executed, delivered, become a
party to, 

13

performed its obligations
under, received payments under, received or perfected a security interest
under, engaged in any other transaction pursuant to or enforced any Loan
Document, or sold or assigned an interest in the Loan or the Loan Documents.

          “Other Obligations”
shall have the meaning set forth in Section 2.02 of the Security Instrument.

          “Other Taxes” shall
mean all present or future stamp, court or documentary, intangible, recording,
filing or similar Taxes that arise from any payment made (i) pursuant to any
Loan Document; (ii) from the execution, delivery, performance, enforcement or
registration of, any Loan Document; or (iii) from the receipt or perfection of
a security interest or otherwise with respect to any Loan Document.

          “Payment Date” shall
mean the first (1st) day of each calendar month during the term of the Loan, or
if such day is not a Business Day, the immediately following Business Day.

          “Permitted Encumbrances”
shall mean collectively, (a) the Liens and security interests created by the
Loan Documents, (b) all Liens and other matters disclosed in the Title
Insurance Policy and any other utility or drainage easement entered into by
Borrower that benefits the Property, (c) Liens, if any, for Property Taxes
imposed by any Governmental Authority not yet due or delinquent, (d) Permitted Equipment Leases, (e) all
Leases permitted pursuant to Section 5.17 hereof and (f) such other title and survey
exceptions as Lender has approved or may approve in writing.

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

          “Permitted Investments”
shall mean any one or more of the following obligations or securities acquired
at a purchase price of not greater than par, including those issued by
Servicer, the trustee under any Securitization or any of their respective
Affiliates, payable on demand or having a maturity date not later than the
Business Day immediately prior to the first Payment Date following the date of
acquiring such investment and meeting one of the appropriate standards set
forth below:

                    (a)          obligations
of, or obligations fully guaranteed as to payment of principal and interest by,
the United States or any agency or instrumentality thereof provided such
obligations are backed by the full faith and credit of the United States of
America including, without limitation, obligations of: the U.S. Treasury (all
direct or fully guaranteed obligations), the Farmers Home Administration
(certificates of beneficial ownership), the General Services Administration
(participation certificates), the U.S. Maritime Administration (guaranteed
Title XI financing), the Small Business Administration (guaranteed
participation certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local 

14

authority bonds)
and the Washington Metropolitan Area Transit Authority (guaranteed transit
bonds); provided, however, that the investments described in this clause must
(i) have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (ii) if rated by S&P, not have an “r” highlighter affixed
to their rating, (iii) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a fixed
spread (if any) and must move proportionately with that index and (iv) not be
subject to liquidation prior to their maturity;

                    (b)          Federal
Housing Administration debentures;

                    (c)          obligations
of the following United States government sponsored agencies: Federal Home Loan
Mortgage Corp. (debt obligations), the Farm Credit System (consolidated
systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt
obligations), the Federal National Mortgage Association (debt obligations), the
Student Loan Marketing Association (debt obligations), the Financing Corp.
(debt obligations), and the Resolution Funding Corp. (debt obligations); provided,
however, that the investments described in this clause must (i) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (ii) if rated by S&P, not have an “r” highlighter affixed to their
rating, (iii) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index and (iv) not be subject
to liquidation prior to their maturity;

                    (d)          federal
funds, unsecured certificates of deposit, time deposits, bankers’ acceptances
and repurchase agreements with maturities of not more than 365 days of any
bank, the short term obligations of which at all times are rated in the highest
short term rating category by each Rating Agency (or, if not rated by all
Rating Agencies, rated by at least one Rating Agency in the highest short term
rating category and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities); provided, however, that the
investments described in this clause must (i) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (ii) if rated by
S&P, not have an “r” highlighter affixed to their rating, (iii) if such
investments have a variable rate of interest, such interest rate must be tied
to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index and (iv) not be subject to liquidation prior to
their maturity;

                    (e)          fully
Federal Deposit Insurance Corporation insured demand and time deposits in, or
certificates of deposit of, or bankers’ acceptances issued by, any bank or
trust company, savings and loan association or savings bank, the short term
obligations of which at all times are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated
by at least one Rating Agency in the highest short term rating category and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities); provided, however, that the investments described
in this clause must (i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by S&P, not have an “r”
highlighter affixed to their rating, (iii) if such investments have a variable
rate of interest, such interest rate 

15

must be tied to a
single interest rate index plus a fixed spread (if any) and must move
proportionately with that index and (iv) not be subject to liquidation prior to
their maturity;

                    (f)          debt
obligations with maturities of not more than 365 days and at all times rated by
each Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities) in its highest long term unsecured
rating category; provided, however, that the investments described in this
clause must (i) have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (ii) if rated by S&P, not have an “r”
highlighter affixed to their rating, (iii) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index and (iv) not be subject to liquidation prior to their maturity;

                    (g)          commercial
paper (including both non-interest bearing discount obligations and interest
bearing obligations payable on demand or on a specified date not more than one
year after the date of issuance thereof) with maturities of not more than 365
days and that at all times is rated by each Rating Agency (or, if not rated by
all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities) in its highest short term unsecured debt rating; provided, however,
that the investments described in this clause must (i) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (ii) if
rated by S&P, not have an “r” highlighter affixed to their rating, (iii) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index and (iv) not be subject to liquidation prior to
their maturity;

                    (h)          units
of taxable money market funds or mutual funds, which funds are regulated
investment companies, seek to maintain a constant net asset value per share,
which funds have the highest rating available from each Rating Agency (or, if
not rated by all Rating Agencies, rated by at least one Rating Agency and
otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) for money market funds or mutual funds; and

                    (i)          any
other security, obligation or investment which has been approved as a Permitted
Investment in writing by Lender and, in the event that the Loan or any interest
therein is included in a Securitization, by Rating Agency Confirmation;
provided, however, that no obligation or security shall be a Permitted
Investment if (i) such obligation or security evidences a right to receive only
interest payments or (ii) the right to receive principal and interest payments
on such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment.

          “Permitted Transfer”
shall mean each of the following:

16

                    (a)          the
following Transfers (excluding pledges) provided that (i) no Event of Default
shall then exist; (ii) no such Transfer shall result in the change of Control
of any Restricted Party; (iii) Borrower shall give Lender evidence satisfactory
to Lender that (after giving effect to any such Transfer) the representations
and warranties set forth in Section 4.1.12 hereof shall continue to be true,
correct and complete; and (iv) Borrower shall give Lender notice of such
Transfer not less than ten (10) Business Days prior to the contemplated
effective date of such Transfer:

                                   (i)          one
or a series of Transfers (excluding pledges), of up to forty-nine percent (49%)
(in the aggregate) of the stock, the limited partnership interests or
non-managing membership interests (as the case may be) in a Restricted Party, 

                                   (ii)         any
involuntary Transfer caused by the death or legal incapacity of a holder of
direct or indirect ownership interests in a Restricted Party so long as (x)
Borrower is reconstituted, if required, following any such death or legal
incapacity and (y) either (i) those persons responsible for the management of
the Borrower and the Property remain unchanged as a result of such death or legal
incapacity or (ii) the person(s) to become responsible for management of the
Borrower and the Property are approved by Lender and (z) upon the death or
legal incapacity of any Guarantor the conditions set forth in Section 6.6 hereof
have been satisfied within sixty (60) days after the death or legal incapacity
of any such Guarantor, and 

                                   (iii)        with
respect to Guarantor, (1) the sale, transfer or issuance of stock or
convertible debt in Guarantor provided such stock is listed on the New York
Stock Exchange or such other nationally recognized publicly-traded stock
exchange or (2) a merger with or acquisition of another entity by Guarantor,
provided that (A) Guarantor is the surviving entity after such merger or
acquisition, and (B) such merger or acquisition does not result in an Event of
Default;

                    (b)          Permitted
Encumbrances;

                    (c)          All
Transfers of worn out or obsolete furnishings, fixtures or equipment that are
promptly replaced with property of equivalent value and functionality;

                    (d)          All
Leases permitted pursuant to Section 5.17 hereof; and

                    (e)          A
Transfer of the Property and assumption of the Loan pursuant to Section
6.2 hereof.

          Notwithstanding
the foregoing or any other provision contained herein to the contrary, for so
long as the Loan is outstanding, Guarantor must continue to own, directly or
indirectly, at least a 51% interest in, and exclusively Control, Borrower, SPE
Component Entity, and any Affiliated Manager.

          Notwithstanding
the foregoing, if the Loan or any interest therein has been included in a
Securitization, no transfer of any direct or indirect ownership interests in
Borrower may be made such that the transferee owns, in the aggregate with the
ownership interests in Borrower or transferee’s Affiliates, more than a
forty-nine percent (49%) interest in Borrower unless such transfer is
conditioned upon the delivery of an Additional Insolvency Opinion acceptable to
the Lender and any applicable Rating Agency.

17

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

          “Personal Property”
shall have the meaning set forth in the Granting Clause of the Security
Instrument.

          “Plan” shall have the
meaning set forth in Section
4.1.10(a) hereof.

          “Plan Assets” shall
have the meaning set forth in Section 4.1.10(a) hereof.

          “PNC Bank” shall mean
PNC Bank, National Association, a national banking association.

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

          “Prepayment Consideration”
shall have the meaning set forth in Section 2.4.2 hereof.

          “Prepayment Date”
shall have the meaning set forth in Section 2.4.1 hereof.

          “Prohibited Governmental Transactions”
shall have the meaning set forth in Section 4.1.10(b) hereof.

          “Prohibited Transaction”
shall have the meaning set forth in Section 4.1.10(a) hereof.

          “Prohibited Transfer”
shall have the meaning set forth in Section 6.7 hereof.

          “Property” shall mean
the parcel of real property, the Improvements thereon and all Personal Property
owned by Borrower and encumbered by the Security Instrument, and any part or
portion thereof, together with all rights pertaining to such property and
Improvements, as more particularly described in the Granting Clauses of the
Security Instrument and referred to therein as the “Property”.

          “Property Condition Report”
shall mean that certain Property Condition Report issued by Partner Engineering
and Science, Inc. dated August 26, 2013, or any new or updated report prepared
by a company satisfactory to Lender regarding the physical condition of the
Property, satisfactory in form and substance to Lender in its sole discretion.

          “Property Document”
shall mean, individually or collectively (as the context may require), the
following: (i) any REA, (ii) [intentionally omitted] and (iii) [intentionally
omitted].

          “Property Document Event”
shall mean any event which would, directly or indirectly, cause a default
termination right, right of first refusal, right of first offer, purchase
option, or any other similar right, cause any termination fees to be due or
would cause a Material Adverse Effect to occur under any Property Document (in
each case, beyond any applicable notice and cure periods under the applicable
Property Document); provided, however, any of the foregoing 

18

shall not be deemed a
Property Document Event to the extent Lender’s prior written consent is
obtained with respect to the same.

          “Property Taxes” shall
mean all real estate and personal property taxes, assessments, water rates or
sewer rents, now or hereafter levied or assessed or imposed against the
Property.

          “Property Tax and Insurance Escrow
Account” shall have the meaning set forth in Section 9.2.1 hereof.

          “Property Tax and Insurance Escrow
Fund” shall have the meaning set forth in Section 9.2.1 hereof.

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

          “Qualified Insurer”
shall mean an insurance company that satisfies the requirements of Section 7.1(b)
hereof.

          “Qualified Replacement Lease”
shall mean a renewal of or a replacement for a then existing Lease for space in
the Property or a Lease which is for vacant space in the Property, provided
each such Lease must (i) be with a tenant approved by Lender if such Lease
covers more than 15,000 square feet of rentable space at the Property and (ii)
comply with Section 5.17
hereof.

          “Rating Agencies”
shall mean (i) prior to the inclusion of the Loan or any interest therein in a
Securitization, each of Moody’s and Fitch, and any other nationally-recognized
statistical rating organization (as identified by the Securities and Exchange
Commission) which has been designated by Lender, and (ii) if the Loan or any
interest therein is included or is anticipated to be included in a
Securitization, each of S&P, Moody’s, and Fitch, and any other
nationally-recognized statistical rating organization (as identified by the
Securities and Exchange Commission) to the extent any of the foregoing have
been engaged by Lender or its designee in connection with, or in anticipation
of, any Securitization.

          “Rating Agency Condition”
shall be deemed to exist if (i) any Rating Agency fails to respond to any
request for a Rating Agency Confirmation with respect to any applicable matter
or otherwise elects (orally or in writing) not to consider any applicable
matter or (ii) Lender (or its Servicer) is not required to and/or elects not to
obtain (or cause to be obtained) a Rating Agency Confirmation with respect to
any applicable matter, in each case, pursuant to and in compliance with any
applicable pooling and servicing agreement(s) relating to the Loan.

          “Rating Agency Confirmation”
shall mean (i) prior to a Securitization or if the Rating Agency Condition
exists, that Lender has (in consultation with the Rating Agencies (if required
by Lender)) approved the matter in question in writing based upon Lender’s good
faith determination of applicable Rating Agency standards and criteria and/or
the servicing standard under any applicable pooling and servicing agreement(s)
relating to the Loan, and (ii) from and after a Securitization (to the extent
the Rating Agency Condition does not exist), a written affirmation from each of
the Rating Agencies (obtained at Borrower’s sole cost and expense) that the
credit rating of the Securities by such Rating Agency immediately prior to the
occurrence of 

19

the event with respect to
which such Rating Agency Confirmation is sought will not be qualified,
downgraded or withdrawn as a result of the occurrence of such event, which
affirmation may be granted or withheld in such Rating Agency’s sole and
absolute discretion.

          “REA” shall mean any
reciprocal easement agreement or similar agreement now or hereafter benefiting
or burdening the Property.

          “Real Property Value to Loan Ratio”
shall mean the ratio (expressed as a percentage), in which (A) the numerator is
the fair market value of the interests in real property which secure the Loan,
and (B) the denominator is the adjusted issue price of the Loan. For purposes
of this definition, (i) “interests in real property” and “real property” shall
have the meanings assigned to such terms by 26 C.F.R. §§ 1.856-3(c) and (d),
and (ii) “adjusted issue price” shall have the meaning assigned to such term by
26 C.F.R. § 1.1275-1(b). For purposes of this definition, the fair market value
of the interests in real property which secure the Loan shall be determined by
Lender, in Lender’s sole discretion, by any commercially reasonable method
permitted to a REMIC Trust under the Code and, to the extent permitted to a
REMIC Trust under the Code, the fair market value of the interests in real
property for purposes of Section
7.4(d) hereof may take into account any planned Restoration.

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

          “Regulation AB” shall
mean Regulation AB under the Securities Act and the Exchange Act, as such Regulation
may be amended, modified or replaced.

          “Release” shall have
the meaning set forth in Section
2(f) of the Environmental Indemnity.

          “REMIC Opinion” shall
mean an opinion of counsel in form and substance satisfactory to Lender and to
the Rating Agencies, stating that the transaction which requires such opinion
to be delivered will not (1) cause any REMIC Trust formed pursuant to a
Securitization to fail to maintain its status as a REMIC Trust, or (2)
constitute a “significant modification” of the Loan within the meaning of
Treasury Regulation Section 1.1001-3(b), or (3) cause the Loan to fail to be a “qualified
mortgage” within the meaning of Section 860G(a)(3) of the Code.

          “REMIC Trust” shall
mean a “real estate mortgage investment conduit” within the meaning of Section
860D of the Code that holds all or any portion of the Note.

          “Rent Roll” shall mean
a written statement from Borrower, in form and substance satisfactory to
Lender, detailing the names of all tenants of the Property, the portion of
Property occupied by each tenant, the base rent and any other charges payable
under each Lease, the term of each Lease, the beginning date and expiration
date of each Lease, whether any tenant is in default under its Lease (and
detailing the nature of such default), and any other information as is required
by Lender.

          “Rents” shall mean all
rents (including, without limitation percentage rents), ground rents,
additional rents, rent equivalents, moneys payable as damages or in lieu of
rent or rent equivalents (including, without limitation, damages and other
claims arising from any rejection 

20

by a tenant of its Lease
under any Creditors Rights Law), revenues, issues, royalties and profits from
the Land (including, without limitation, all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, deposits (including,
without limitation, cash or securities deposited under any Lease to secure the
performance by the lessee of its obligations thereunder, utility deposits and
other deposits), accounts, cash, charges for services rendered, charges for
electricity, oil, gas, water, steam, heat, ventilation, air-conditioning and
any other energy, telecommunication, telephone, utility or similar items or
time use charges, HVAC equipment charges, sprinkler charges, escalation
charges, license fees, maintenance fees, charges for Property Taxes and
insurance, operating expenses or other reimbursables to Borrower (or to Manager
for the account of Borrower), under any Lease, all Lease Termination Payments,
all other consideration of whatever form or nature received by or paid to or
for the account of or benefit of Borrower or its agents or employees from any
and all sources arising from or attributable to the Land or the Improvements,
all proceeds, if any, from business interruption or other loss of income
insurance relating to the use, enjoyment or occupancy of the Land and/or the
Improvements (whether paid or accruing before or after the filing by or against
Borrower of any petition for relief under any Creditors Rights Laws), and all
proceeds or streams of payment from the sale or other disposition of any Lease
or any Rents.

          “Replacement Reserve Account”
shall have the meaning set forth in Section 9.5.1 hereof.

          “Replacement Reserve Fund”
shall have the meaning set forth in Section 9.5.1 hereof.

          “Replacement Reserve Monthly Deposit”
shall have the meaning set forth in Section 9.5.1 hereof.

          “Replacements” shall
have the meaning set forth in Section 9.5.1 hereof.

          “Reportable Compliance Event”
shall mean that any Covered Entity becomes a Sanctioned Person, or is charged
by indictment, criminal complaint or similar charging instrument, arraigned, or
custodially detained in connection with any Anti-Terrorism Law or any predicate
crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to
the effect that it is reasonably likely that any aspect of its operations is in
actual or probable violation of any Anti-Terrorism Law.

          “Required Repair Account”
shall have the meaning set forth in Section 9.4.1 hereof.

          “Required Repair Fund”
shall have the meaning set forth in Section 9.4.1 hereof.

          “Required Repairs”
shall have the meaning set forth in Section 9.4.1 hereof.

          “Reserve Accounts”
shall mean the Property Tax and Insurance Escrow Account, the Business
Interruption Insurance Account, the Required Repair Account, the Replacement
Reserve Account, the TILC Reserve Account, the Early Lease Termination Reserve
Account, or any other escrow or reserve Account established pursuant to Article IX hereof.

21

          “Reserve Funds” shall
mean the Property Tax and Insurance Escrow Fund, the Business Interruption
Insurance Funds, the Required Repair Fund, the Replacement Reserve Fund, the
TILC Reserve Fund, the Early Lease Termination Reserve Fund, or any other
escrow or reserve fund established pursuant to Article IX hereof.

          “Reserve Waiver Conditions”
shall mean: (a) with respect to Taxes, each of the following: (i) no Event of
Default has occurred and is continuing, (ii) Taxes have been paid to an
Official Body prior to delinquency in accordance with Section 2.3.7 hereof,
and (iii) Lender has received the original or a certified copy of a receipt
issued by such Official Body evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to Lender; and (b) with respect to Insurance Premiums, each of the
following: (i) no Event of Default has occurred and is continuing, (ii) the
Property is covered by a blanket or umbrella insurance policy that is in
compliance with Section 7.1(d)
hereof, (iii) all such Insurance Premiums have been paid at
least thirty (30) days prior to the expiration of the Policy or Policies, and
(iv) Lender has received evidence of such payment reasonably satisfactory to
Lender.

          “Residential Leases”
shall mean Leases for residential purposes, for congregate care services or for
mini-warehouse storage rentals where each such storage rental is less than ten
percent (10%) of the rentable square footage of such self-storage facility. 

          “Responsible Officer”
shall mean with respect to a Person, the chairman of the board, president,
chief operating officer, chief financial officer, treasurer, vice
president-finance, vice president or such other authorized representative of
such Person.

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

          “Restoration Threshold”
shall mean $1,000,000.00.

          “Restoration Period”
shall have the meaning set forth in Section 9.3.2 hereof.

          “Restricted Party”
shall mean collectively, (a) Borrower, SPE Component Entity, any Guarantor, and
any Affiliated Manager and (b) any shareholder, partner, member, non-member
manager, or any other direct or indirect legal or beneficial owner of Borrower,
SPE Component Entity, any Guarantor or any Affiliated Manager. Restricted Party
shall not mean any shareholder of AmREIT, Inc.

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

          “Sale or Pledge” shall
mean a voluntary or involuntary (including, but not limited to, any levy,
seizure or attachment) sale, conveyance, assignment, alienation, mortgage,
hypothecation, encumbrance, grant of a Lien on, a security interest or option
in, pledge, repurchase, reverse repurchase or other transfer or disposal of a
legal or beneficial interest (directly or indirectly, whether by operation of
Law or otherwise, and whether or not for consideration or of record).

          “Sanctioned Country”
shall mean a country subject to a sanctions program maintained under any
Anti-Terrorism Law. 

22

          “Sanctioned Person”
shall mean any individual person, group, regime, entity or thing listed or
otherwise recognized as a specially designated, prohibited, sanctioned or
debarred person, group, regime, entity or thing, or subject to any limitations
or prohibitions (including but not limited to the blocking of property or
rejection of transactions), under any Anti-Terrorism Law.

          “Scheduled Maturity Date”
shall have the meaning set forth in Section 2.4.2 hereof.

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

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

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

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

          “Security Instrument”
shall mean that certain first priority Mortgage (or Deed of Trust or Deed to
Secure Debt), Assignment of Leases and Rents, Security Agreement and Fixture
Filing, dated as of the date hereof, executed and delivered by Borrower in
favor of Lender as security for the payment of the Debt and the performance of
the Other Obligations and encumbering the Property, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

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

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

          “Severed Loan Documents”
shall have the meaning set forth in Section 10.2(c) hereof.

          “Special Member” shall
have the meaning set forth in Section 8.1(c) hereof.

          “SPE Component Entity”
shall have the meaning set forth in Section 8.1(b) hereof.

          “Sponsor” shall mean
AmREIT, Inc., a Maryland corporation.

          “State” shall mean the
State or Commonwealth in which the Land is located.

          “Survey” shall mean a
survey of the Property prepared by a surveyor licensed in the State and
satisfactory to Lender and the company or companies issuing the Title Insurance
Policy, and containing a certification of such surveyor satisfactory to Lender.

          “Taxes” shall mean all
present or future taxes, levies, imposts, duties, deductions, withholdings
(including backup withholding), assessments, fees or other charges imposed by
any Official Body, including any interest, additions to tax or penalties
applicable thereto.

          “Terminating Tenant”
shall have the meaning set forth in Section 9.7 hereof.

23

          “TILC Costs” shall
have the meaning set forth in Section 9.6.1 hereof.

          “TILC Reserve Account”
shall have the meaning set forth in Section 9.6.1 hereof.

          “TILC Reserve Fund”
shall have the meaning set forth in Section 9.6.1 hereof.

          “TILC Reserve Monthly Deposit”
shall have the meaning set forth in Section 9.6.1 hereof.

          “Title Insurance Policy”
shall mean any ALTA mortgagee title insurance policy in form and substance
satisfactory to Lender (or, if the State does not permit the issuance of such
ALTA policy, such form as shall be permitted in the State and satisfactory to
Lender) issued on or after the date hereof by a title insurance company
satisfactory to Lender with respect to the Property and insuring the Lien of
the Security Instrument, with endorsements thereto as to such matters as Lender
may designate.

          “Transfer” shall mean
any Sale or Pledge of the Property or of any legal or beneficial interest
therein, any Sale or Pledge of an interest in any Restricted Party, or the
removal or the resignation of the Manager (including, without limitation, an
Affiliated Manager) other than in accordance with Section 5.20 hereof. Without limiting
the generality of the foregoing, a Transfer is deemed to include: (a) an
installment sales agreement wherein Borrower agrees to sell the Property for a
price to be paid in installments; (b) an agreement by Borrower leasing all or a
substantial part of the Property for other than actual occupancy by a space
tenant thereunder; (c) a sale, assignment or other transfer of, or the grant of
a security interest in, Borrower’s right, title and interest in and to any
Leases or any Rents or any Property Document; (d) if a Restricted Party is a
corporation, any merger, consolidation or Sale or Pledge of such corporation’s
stock or the creation or issuance of new stock; (e) if a Restricted Party is a
limited or general partnership or joint venture, any merger or consolidation or
the change, removal, resignation or addition of a general partner or the Sale
or Pledge of the partnership interest of any general partner or any profits or
proceeds relating to such partnership interest, or the Sale or Pledge of
limited partnership interests or any profits or proceeds relating to such
limited partnership interest or the creation or issuance of new limited
partnership interests; (f) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the Sale or Pledge of the membership interest of a managing
member (or if no managing member, any member) or any profits or proceeds
relating to such membership interest, or the Sale or Pledge of non-managing
membership interests or the creation or issuance of new non-managing membership
interests; (g) if a Restricted Party is a trust or nominee trust, any merger,
consolidation or the Sale or Pledge of the legal or beneficial interest in a
Restricted Party or the creation or issuance of new legal or beneficial
interests; and (h) any action for partition of the Property or any similar
action instituted or prosecuted by Borrower or by any other Person, pursuant to
any contractual agreement or other instrument or under applicable Law
(including, without limitation, common law) and/or any other action instituted
by (or at the behest of) Borrower or its Affiliates or consented to or
acquiesced in by Borrower or its Affiliates which results in a Property
Document Event.

          “Transferee” shall
have the meaning set forth in Section 6.2(e) hereof.

24

          “Treasury Rate” shall
mean the yield calculated by the linear interpolation of the yields, as
reported in Federal Reserve Statistical Release H.15-Selected Interest Rates
under the heading U.S. Government Securities/Treasury Constant Maturities for
the week ending prior to the Prepayment Date, of U.S. Treasury constant
maturities with maturity dates (one longer and one shorter) most nearly
approximating the Maturity Date. (In the event Release H.15 is no longer
published, Lender shall select a comparable publication to determine the
Treasury Rate.) Lender shall notify Borrower of the amount and the basis of
determination of the required Prepayment Consideration.

          “True Up Payment”
shall mean a payment into the applicable Reserve Account of a sum which,
together with any applicable monthly deposits into the applicable Reserve
Account, will be sufficient to discharge the obligations and liabilities for
which such Reserve Account was established as and when reasonably appropriate. The
amount of the True Up Payment shall be determined by Lender in its reasonable
discretion and shall be final and binding absent manifest error.

          “UCC” or “Uniform Commercial Code”
shall mean the Uniform Commercial Code as in effect in the state of Texas
(provided, however, with respect to the Account Collateral, “UCC” or “Uniform
Commercial Code” shall mean the Uniform Commercial Code as in effect in the
Commonwealth of Pennsylvania).

          “Underwriter Group” shall
mean any and all of the following Persons: (i) Lender (and for purposes of this
definition, Lender shall include its officers and directors), (ii) the
Affiliate of PNC Bank that has filed any registration statement relating to any
Securitization, if applicable, each of its directors, each of its officers who
have signed any such 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, (iii) PNC Capital Markets LLC, a Pennsylvania limited
liability company, each of its directors and each Person who controls PNC Bank
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act and (iv) PNC Bank, each of its directors and each Person who
controls PNC Bank within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act.

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

          “Vacated Space” shall
have the meaning set forth in Section 9.7.1 hereof.

          “Yield Maintenance Premium”
shall mean an amount determined by Lender equal to (a) the present value, as of
the Prepayment Date, of the remaining scheduled payments of principal and
interest from the Prepayment Date through the Maturity Date (including any
balloon payment) determined by discounting such payments at a rate which, when
compounded monthly, is equivalent to the Treasury Rate when compounded
semi-annually, less (b) the principal portion of the Loan prepaid. 

          “Zoning Regulations”
shall have the meaning set forth in Section 4.1.11 hereof.

25

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

	
  

 	
  

 
	
 II.

 	
 GENERAL TERMS

 

          Section
2.1     The Loan.

                    2.1.1     Agreement
to Lend and Borrow.
Subject to and upon the terms and conditions set forth in this Agreement,
Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on
the Closing Date.

                    2.1.2     Single
Disbursement to Borrower. Borrower may request and receive only one borrowing hereunder in
respect of the Loan and no amount borrowed and repaid hereunder in respect of
the Loan may be re-borrowed.

                    2.1.3     The
Note, Security Instrument and Other Loan Documents. The Loan shall be evidenced by the Note
and the other Loan Documents, and secured by the Security Instrument, and the
Assignment of Leases.

                    2.1.4     Use
of Proceeds. Borrower
shall use the proceeds of the Loan to (a) acquire the Property or to repay and
discharge any existing loans relating to the Property, (b) pay all past due
Basic Carrying Costs, if any, in respect of the Property, (c) make deposits
into the Reserve Funds on the Closing Date in the amounts provided herein, (d)
pay costs and expenses incurred in connection with the acquisition of the
Property or the closing of the Loan, as approved by Lender, (e) fund any
working capital requirements of the Property, as approved by Lender and (f)
retain the balance, if any.

          Section
2.2     Interest Rate and Payments.

                    2.2.1     Interest
Generally; Usury.

                    (a)          Except
as herein provided with respect to interest accruing at the Default Rate,
interest on the outstanding principal balance of the Loan shall accrue from the
Closing Date at the Applicable Interest Rate until repaid in accordance with
the terms and conditions hereof.

                    (b)          This
Agreement and the Note are subject to the express condition that at no time
shall Borrower be obligated or required to pay interest on the principal
balance of the Loan at a rate which could subject Lender to either civil or
criminal liability as a result of being in excess of the Maximum Legal Rate. If,
by the terms of this Agreement or the other Loan Documents, Borrower is at any
time required or obligated to pay interest on the principal balance 

26

due hereunder at a rate
in excess of the Maximum Legal Rate, the Applicable Interest Rate or the
Default Rate, as the case may be, shall be deemed to be immediately reduced to
the Maximum Legal Rate and all previous payments in excess of the Maximum Legal
Rate shall be deemed to have been payments in reduction of principal and not on
account of the interest due hereunder. All sums paid or agreed to be paid to
Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable Law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.

                    (c)          To
the extent that Lender is relying on Chapter 303, as amended, of the Texas
Finance Code to determine the maximum amount of Interest permitted by
applicable law on the principal of this Note, Lender will utilize the weekly
rate ceiling from time to time in effect as provided in such Chapter 303, as amended.
To the extent United States federal law permits a greater amount of interest
than is permitted under Texas law, Lender will rely on United States federal
law instead of such Chapter 303, as amended, for the purpose of determining the
maximum amount permitted by applicable law. Additionally, to the extent
permitted by applicable law now or hereafter in effect, Lender may, at its
option and from time to time, implement any other method of computing the
maximum lawful rate under such Chapter 303, as amended, or under other
applicable law by giving notice, if required, to Borrower as provided by
applicable law now or hereafter in effect. In no event shall the provisions of
Chapter 346 of the Texas Finance Code (which regulates certain revolving credit
loan accounts and revolving triparty accounts) apply to the indebtedness
evidenced hereby.

                    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 based on the Applicable Interest
Rate and a three hundred sixty (360) day year by (c) the outstanding
principal balance of the Loan. The accrual period for calculating interest due
on each Payment Date shall be the Interest Accrual Period immediately prior to
such Payment Date. Borrower understands and acknowledges that such interest
accrual requirement results in more interest accruing on the Loan than if
either (i) a thirty (30) day month and a three hundred sixty (360) day year or
(ii) the actual number of days in a month and a three hundred and sixty five
(365) day year were used to compute the accrual of interest on the Loan.

                    2.2.3     Payments
Before Maturity Date; Monthly Debt Service Payment Amount. Borrower
shall pay to Lender (a) unless the Closing Date occurs on the first (1st) day
of a calendar month, on the Closing Date, an amount equal to interest only at the
Applicable Interest Rate on the outstanding principal balance of the Loan from
the Closing Date up to and including September 30, 2013, calculated by
multiplying (i) the actual number of days elapsed during such period by (ii) a
daily rate based on the Applicable Interest Rate and a three hundred sixty
(360) day year by (iii) the outstanding principal balance of the Loan on the
Closing Date and (b) on the Payment Date occurring in November, 2013 and on
each Payment Date thereafter up to but not including November 1, 2021, interest
only at the Applicable Interest Rate, calculated by multiplying (i) the actual
number of days elapsed in each Interest Accrual Period by (ii) a daily rate
based on the Applicable Interest Rate and a three 

27

hundred sixty (360) day year
by (iii) the outstanding principal balance of the Loan during each Interest
Accrual Period and (c) on the Payment Date occurring in November, 2021 and on
each Payment Date thereafter up to but not including the Maturity Date, an
amount equal to $113,820.43, which amount consists of principal and interest at
the Applicable Interest Rate on the outstanding principal balance during each
Interest Accrual Period, based upon a thirty (30) year amortization schedule
computed on the basis of a 360-day year consisting of twelve (12) thirty (30)
day months (the amounts required by subsections (b) and (c) being the “Monthly
Debt Service Payment Amount” for each applicable Interest Accrual Period).

                    2.2.4     Payment
on Maturity Date.
Borrower shall pay to Lender on the Maturity Date the Debt, including but not
limited to, the outstanding principal balance of the Loan, all accrued and
unpaid interest thereon through the end of the Interest Accrual Period
immediately prior to the Maturity Date and all other amounts due hereunder and
under the Note, the Security Instrument and the other Loan Documents.

                    2.2.5     Payments
After Default. Upon
the occurrence and during the continuance of an Event of Default (including,
without limitation, failure to repay the Debt on the Maturity Date), interest
on the outstanding principal balance of the Loan and, to the extent permitted
by Law, overdue interest and other amounts due in respect of the Loan shall
accrue at the Default Rate, calculated from the date such payment was due
without regard to any grace or cure periods contained herein. Interest at the
Default Rate shall be computed from the occurrence of the Event of Default
until the actual receipt and collection of the Debt in full or until such Event
of Default has been waived by Lender. To the extent permitted by applicable
Law, interest at the Default Rate shall be added to the Debt, shall itself
accrue interest at the same rate as the Loan and shall be secured by the
Security Instrument. This paragraph shall not be construed as an agreement or
privilege to extend the date of the payment of the Debt, nor as a waiver of any
other right or remedy accruing to Lender by reason of the occurrence of any
Event of Default. Anything herein to the contrary notwithstanding, all interest
accrued at the Default Rate shall be immediately due and payable upon demand by
Lender.

                    2.2.6     Late
Payment Charge. If
any principal, interest or any other sum due under the Loan Documents (other
than the balloon payment due on the Maturity Date) is not paid by Borrower on
or before the fifth (5th) day after the date the same is due and payable,
Borrower shall pay to Lender upon demand an amount equal to the lesser of five
percent (5%) of such unpaid sum or the maximum amount permitted by applicable
Law in order to defray the expense incurred by Lender in handling and
processing such delinquent payment and to compensate Lender for the loss of the
use of such delinquent payment. Any such amount shall be secured by the Security
Instrument and the other Loan Documents to the extent permitted by applicable
Law.

                    2.2.7     Release
on Payment in Full.
Lender shall at the sole cost and expense of Borrower, after payment in full of
the Debt and the performance of the Other Obligations in accordance with the
terms and provisions of the Security Instrument and the other Loan Documents,
release the Lien of the Security Instrument and the other Loan Documents on the
Property.

28

          Section
2.3     Manner of Making Payments. 

                    2.3.1     Making
of Payments. Each payment by Borrower hereunder or under the
Note or any of the other Loan Documents shall be made in funds immediately
available to Lender by 4:00 p.m., central time, on the date such payment is
due, to Lender at PNC Bank, National Association, c/o Midland Loan Services,
c/o Bank of Oklahoma, Lockbox #2585, 6242 East 41st Street, Tulsa, OK 74135. Whenever
any payment hereunder or under the Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the first Business
Day following such scheduled due date.

                    2.3.2     Credit
for Payment Receipt.
No payment due under the Note, this Agreement or any of the other Loan
Documents shall be deemed paid to Lender until received by Lender at its
designated office on a Business Day prior to 4:00 p.m., central time. Any
payment received after the time established by the preceding sentence shall be
deemed to have been paid on the immediately succeeding Business Day. Each
payment that is paid to Lender within ten (10) days prior to the date on which
such payment is due, and prior to its scheduled Payment Date, shall not be
deemed a prepayment and shall be deemed to have been received on the Payment
Date solely for the purpose of calculating interest due.

                    2.3.3     Invalidated
Payments. If any
payment received by Lender is deemed by a court of competent jurisdiction to be
a voidable preference or fraudulent conveyance under any Creditors Rights Laws,
and is required to be returned by Lender, then the obligation to make such
payment shall be reinstated, notwithstanding that the Note may have been marked
satisfied and returned to Borrower or otherwise canceled, and such payment shall
be immediately due and payable upon demand.

                    2.3.4     No
Deductions, etc. All
payments made by Borrower hereunder or under the Note or the other Loan
Documents shall be made irrespective of, and without any deduction for, any
setoff, defense, claim or counterclaims.

                    2.3.5     Application
of Payments. Provided
no Event of Default has occurred and is continuing, payments of principal and
interest due from Borrower shall be applied (a) first, to the payment or
reimbursement of any expenses (including but not limited to late charges),
costs or obligations (other than the principal and interest) for which Borrower
shall be obligated or Lender entitled pursuant to the provisions of the Loan
Documents, (b) second, to the payment of accrued but unpaid interest, (c)
third, to the payment of unpaid Reserve Funds required pursuant to the
provisions of the Loan Documents, and (d) fourth, to the payment of principal
then outstanding. If at any time Lender receives less than the full amount due
and payable on a Payment Date or upon the occurrence of an Event of Default,
Lender may apply all payments received to amounts then due and payable in any
manner and in any order determined by Lender, in its sole discretion. Lender’s
acceptance of a payment from Borrower in an amount that is less than the full
amount then due and Lender’s application of such payments to amounts then due
from Borrower shall not constitute or be deemed to constitute a waiver of the
unpaid amounts or an accord and satisfaction.

                    2.3.6     Increased
Costs. If, as a
result of any Change in Law, any reserve, special deposit, condition, expense,
tax (other than taxes the indemnification of which is already 

29

excluded or provided for
pursuant to the terms hereof), allocation of capital or similar requirement
relating to any extensions of credit, commitments or other assets of, or any
deposits with, Lender or its holding company is imposed, modified or deemed
applicable and the result is to increase the cost to Lender or its holding
company of making or holding the Loan, or to reduce the amount receivable by
Lender or its holding company hereunder in respect of any portion of the Loan,
then from time to time Borrower will pay to Lender or its holding company upon
request such additional amount or amounts as will compensate Lender and/or its
holding company for such increases in cost and/or reductions in amounts
receivable. If Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on
Lender’s capital or on the capital of Lender’s holding company, as a
consequence of this Agreement or the Loan, to a level below that which Lender
or Lender’s holding company could have achieved but for such Change in Law
(taking into consideration Lender’s policies and the policies of Lender’s
holding company with respect to capital adequacy), then from time to time
Borrower will pay to Lender or its holding company upon request such additional
amount or amounts as will compensate Lender and/or its holding company for any
such reduction suffered.

                    2.3.7     Taxes. 

                    (a)          Payments
Free of Taxes. Any and all payments by or on account of any obligation of Borrower
or Guarantor under any Loan Document must be made free and clear of and without
deduction or withholding for any Taxes, except as required by applicable Law. If
any applicable Law (as determined by Borrower or Guarantor) requires the
deduction or withholding of any Tax from any such payment by Borrower or
Guarantor, then Borrower or Guarantor shall be entitled to make such deduction
or withholding and will timely pay the full amount deducted or withheld to the
relevant Official Body in accordance with applicable Law and, if such Tax is an
Indemnified Tax, then the sum payable by Borrower or Guarantor is increased as
necessary so that after such deduction or withholding has been made (including
such deductions and withholdings applicable to additional sums payable under
this Section 2.3.7)
Lender receives an amount equal to the sum it could have received had no such
deduction or withholding been made.

                    (b)          Payment
of Other Taxes by Borrower. Borrower shall timely pay any Other Taxes to
the relevant Official Body in accordance with applicable Law, or at Lender’s
option, timely reimburse Lender for the payment of any such Other Taxes.

                    (c)          Indemnification.
BORROWER SHALL INDEMNIFY LENDER WITHIN 10 DAYS
AFTER DEMAND THEREFOR, FOR THE FULL AMOUNT OF ANY INDEMNIFIED TAXES, INCLUDING
INDEMNIFIED TAXES IMPOSED OR ASSERTED ON OR ATTRIBUTABLE TO AMOUNTS PAYABLE
UNDER THIS SECTION 2.3.7, PAYABLE
OR PAID BY LENDER OR REQUIRED TO BE WITHHELD OR DEDUCTED FROM A PAYMENT TO
LENDER AND ANY REASONABLE RELATED EXPENSES, WHETHER OR NOT SUCH INDEMNIFIED
TAXES WERE CORRECTLY OR LEGALLY IMPOSED OR ASSERTED BY THE RELEVANT OFFICIAL
BODY. A certificate as to the amount of such payment or liability
delivered to Borrower by Lender is conclusive absent manifest error. 

30

                    (d)          Evidence
of Payments. As soon as practicable after any payment of Taxes by Borrower
or Guarantor to an Official Body pursuant to this Section 2.3.7, Borrower or Guarantor must
deliver to Lender the original or a certified copy of a receipt issued by such
Official Body evidencing such payment, a copy of the return reporting such
payment or other evidence of such payment reasonably satisfactory to Lender.

                    (e)          Status
of Lender. In the event that any successor and/or assign of Lender is not
incorporated under the Laws of the United States of America or a state thereof
(a “Non-U.S. Entity”)
Lender agrees that, prior to the first date on which any payment is due such
entity hereunder, it will deliver to Borrower two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI or successor
applicable form, as the case may be, certifying in each case that such entity
is entitled to receive payments under the Note, without deduction or
withholding of any United States federal income taxes. Each entity required to
deliver to Borrower a Form W-8BEN or W-8ECI pursuant to the preceding sentence
further undertakes to deliver to Borrower two further copies of such forms, or
successor applicable forms, or other manner of certification, as the case may
be, on or before the date that any such form expires (which, in the case of the
Form W-8ECI, is the last day of each U.S. taxable year of the Non-U.S. Entity)
or becomes obsolete or after the occurrence of any event requiring a change in
the most recent form previously delivered by it to Borrower, and such other
extensions or renewals thereof as may reasonably be requested by Borrower,
certifying in the case of a Form W-8BEN or W-8ECI that such entity is entitled
to receive payments under the Note without deduction or withholding of any
United States federal income taxes, unless in any such case an event
(including, without limitation, any change in treaty, Law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
entity from duly completing and delivering any such form with respect to it and
such entity advises Borrower that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.

                    (f)          Treatment
of Certain Refunds. If any party determines that it has received a refund
of any Taxes to which it has been indemnified pursuant to this Section 2.3.7, such
party must pay to the indemnifying party an amount equal to such refund
(including any interest paid by an Official Body) in an amount not to exceed
the extent of any indemnity payments made under this Section 2.3.7 with
respect to such Taxes, net of all out-of-pocket expenses of such indemnified
party (including Taxes) and without interest; and in the event the indemnified
party is thereafter required to return such refund to the Official Body, then
upon the request of the indemnified party the indemnifying party must repay to
the indemnified party the amount paid over pursuant to this Section 2.3.7, plus
any penalties, interest or other charges imposed by the relevant Official Body.
Notwithstanding anything to the contrary in this Section 2.3.7, in no event will
Lender be required to pay any amount to an indemnifying party pursuant to this Section 2.3.7(f), if
such payment could place Lender in a less favorable net after-Tax position than
Lender would have been in if the indemnification payments or additional amounts
giving rise to such refund had never been paid. This Section 2.3.7 will
not be construed to require any indemnified party to make available its Tax
returns (or any other information relating to its Taxes that it deems
confidential) to the indemnifying party or any other Person.

                    (g)          Survival.
Each party’s obligations under this Section 2.3.7 survive the repayment, satisfaction
or discharge of the Debt.

31

          Section
2.4     Prepayments.

                    2.4.1     Voluntary
Prepayments. Except as set forth in this Section 2.4, Borrower
shall not have the right to prepay all or any portion of the Debt. After the
Lockout Period, Borrower may prepay the Debt in whole, but not in part, on any
Payment Date, provided the following conditions are satisfied: (a) no Default
or Event of Default shall be occurring on either the date the required
prepayment notice is received by Lender or the Prepayment Date; (b) Borrower
shall give written notice to Lender specifying the Payment Date on which a
prepayment is to be made (the date of any prepayment hereunder, whether
pursuant to such notice or not, and whether voluntary or involuntary, being
herein referred to as the “Prepayment
Date”) not more than sixty (60) days and not less than ten (10)
days prior to the Prepayment Date if such Prepayment Date occurs prior to a
Securitization and thirty (30) days prior to the Prepayment Date if such
Prepayment Date occurs following a Securitization; and (c) the applicable
Prepayment Consideration, if any, is paid by Borrower to Lender with such
prepayment of the entire Debt in full. Additionally, any such prepayment not
actually received by Lender before 4:00 p.m., central time, on the fifth (5th)
day of the month must also include the interest which would have accrued on the
amount of such prepayment during the entire Interest Accrual Period in which
the prepayment is made. A prepayment notice may be revoked by Borrower in a
writing delivered to Lender at any time on or prior to the fifth (5th) Business
Day preceding the proposed Prepayment Date; provided that, in the event of any
revocation of a prepayment notice, Borrower shall be obligated to reimburse
Lender for all of its costs and expenses (including reasonable legal fees and
costs) incurred by Lender in connection with the anticipated prepayment within
ten (10) days of Lender’s request.

                    2.4.2     Prepayment
Consideration. Lender
shall not be obligated to accept any prepayment of the Debt unless it is
accompanied by the applicable Prepayment Consideration. The “Prepayment
Consideration” shall be calculated by Lender as follows:

	
  

 	
  

 	
  

 
	
 From the Closing date
 through September 30, 2016 (the “Lockout Period”):

 	
  

 	
 Not applicable; No
 prepayment permitted.

 
	
  

 
	
 October 1, 2016 through
 October 31, 2021 (the “1% Prepayment Period”): 

 	
  

 	
 The greater of (i) one
 percent (1%) of the outstanding principal balance of the Loan on a Prepayment
 Date; or (ii) the Yield Maintenance Premium.

 
	
  

 
	
 November 1, 2021
 through March 31, 2023 (the “0.50%
 Prepayment Period”):

 	
  

 	
 The greater of (i) one
 half of one percent (0.50%) of the outstanding principal balance of the Loan
 on a Prepayment Date; or (ii) the Yield Maintenance Premium.

 
	
  

 	
  

 	
  

 
	
 April 1, 2023 through
 October 1, 2023 (the “Scheduled
 Maturity Date”):

 	
  

 	
 No Prepayment
 Consideration (i.e., $0.00).

 

32

	
  

 	
  

 	
  

 
	
 Prepayment After an Event of Default:

 	
  

 	
 The Prepayment
 Consideration set forth in Section 2.4.4 hereof.

 

          Borrower
acknowledges that the Prepayment Consideration is a bargained for consideration
and is not a penalty. Borrower recognizes that Lender would incur substantial
additional costs and expenses in the event of a prepayment of the Debt and that
the Prepayment Consideration compensates Lender for such costs and expenses
(including without limitation, the loss of Lender’s investment opportunity
during the period from the Prepayment Date until the Maturity Date). Borrower
agrees that Lender shall not, as a condition to receiving the Prepayment
Consideration, be obligated to actually reinvest the amount prepaid in any
treasury obligation or in any other manner whatsoever.

                    2.4.3     Mandatory
Prepayments. If
Borrower receives any Net Proceeds and if Lender is not obligated to make, and
does not make, such Net Proceeds available to Borrower for the Restoration of
the Property pursuant to the terms of this Agreement, then Borrower shall
prepay the outstanding principal balance of the Loan in an amount equal to one
hundred percent (100%) of such Net Proceeds. No Prepayment Consideration shall
be due in connection with any prepayment made pursuant to this Section
2.4.3. Any
partial prepayment under this Section 2.4.3 shall be applied to the last payments of
principal due under the Loan; provided, however, if an Event of Default has
occurred and is then continuing, Lender may apply such Net Proceeds to the Debt
in any order or priority in its sole discretion. Any prepayment received by Lender
pursuant to this Section 2.4.3 on a date other than a Payment Date
shall be held by Lender as Collateral for the Debt in an interest bearing
Eligible Account at an Eligible Institution, with such interest accruing for
the benefit of Borrower, and shall be applied by Lender on the next Payment
Date, with any interest on such funds paid to Borrower on such Payment Date
provided no Event of Default then exists.

                    2.4.4     Prepayments
After Event of Default. If, following the occurrence of and during continuance of any Event
of Default, Borrower shall tender payment of an amount sufficient to satisfy
the Debt, such tendered prepayment by Borrower shall be deemed to be a
voluntary prepayment in the amount tendered and in such case Borrower shall
also pay to Lender, with respect to the amount tendered, Prepayment
Consideration equal to the Prepayment Consideration payable by Borrower under Section 2.4.2 above;
provided, however, if such tendered prepayment by Borrower is made during the
Lockout Period, then the Prepayment Consideration payable hereunder shall be
equal to the greater of (a) four percent (4%) of the outstanding principal
balance of the Loan on the date of such tendered prepayment and (b) the Yield
Maintenance Premium (provided that all references to the “Prepayment Date”
contained in the definition of Yield Maintenance Premium shall mean the date of
said tendered prepayment) which Prepayment Consideration shall be immediately
due and payable. Lender shall not be obligated to accept any such tender unless
it is accompanied by all Prepayment Consideration due in connection therewith.

33 

	
  

 	
  

 
	
 III.

 	
  [INTENTIONALLY OMITTED]: 

 
	
  

 	
  

 
	
 IV.

 	
 REPRESENTATIONS AND WARRANTIES

 

          Section
4.1     Borrower Representations. 

          Borrower
represents and warrants as of the Closing Date that:

                    4.1.1     Organization. Borrower has been duly organized and is
validly existing and in good standing in the jurisdiction in which it is
organized with requisite power and authority to own its properties and to
transact the businesses 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, businesses and
operations. Borrower possesses all rights, Licenses and authorizations,
governmental or otherwise, necessary to entitle it to own its properties and to
transact the businesses in which it is now engaged, and the sole business of
Borrower is the ownership, management and operation of the Property and the
other Collateral. Attached hereto as Exhibit A is a true and correct copy of the
organizational structure chart of Borrower, which accurately shows all
ownership interests, direct and indirect, in Borrower. Neither Guarantor, nor
any managing member, general partner or similar controlling Person of Borrower,
nor any Person that holds a ten percent (10%) or greater direct ownership
interest in Borrower (a) is the subject of a Bankruptcy Action, (b) has a prior
record of having been the subject of a Bankruptcy Action, or (c) has been
convicted of a felony.

                    4.1.2     Proceedings. Borrower has taken all necessary action
to authorize the execution, delivery and performance of this Agreement and the
other Loan Documents. This Agreement and such other Loan Documents have been
duly executed and delivered by or on behalf of Borrower and constitute legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, except as such enforcement may be
limited by applicable Creditors Rights Laws and similar Laws affecting rights
of creditors generally, and general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

                    4.1.3     No
Conflicts. The
execution, delivery and performance of this Agreement and the other Loan
Documents by Borrower 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 or assets of Borrower pursuant
to the terms of any indenture, mortgage, deed of trust, loan agreement,
partnership agreement, management agreement, or other agreement or instrument
to which Borrower is a party or by which any of Borrower’s property or assets
is subject, nor will such action result in any violation of the provisions of
any Law, and any consent, approval, authorization, order, registration or
qualification of or with any court or any such regulatory authority or other
governmental agency or body required for the execution, delivery and
performance by Borrower of this Agreement or any other Loan Documents has been
obtained and is in full force and effect.

                    4.1.4     Litigation. There is no pending, filed or to the
best of Borrower’s knowledge threatened action, suit or proceeding, arbitration
or governmental investigation, at 

34

law or in equity or by or
before any Governmental Authority or other agency, involving Borrower,
Guarantor, or the Collateral, an adverse outcome of which would reasonably be
expected to materially and adversely affect (a) title to the Property or any of
the other Collateral, (b) the validity or enforceability of the Security
Instrument, (c) Borrower’s ability to perform under the Loan or the Loan
Documents, (d) Guarantor’s ability to perform under the Guaranty, (e) the use,
operation or value of the Property, (f) the principal benefit of the security
intended to be provided by the Loan Documents, (g) the current ability of the
Property to generate net cash flow sufficient to service the Loan, or (h) the
current principal use of the Property.

                    4.1.5     Agreements. Borrower is not a party to any
agreement or instrument or subject to any restriction which might materially
and adversely affect Borrower, the use, value or operation of the Property, or
Borrower’s business, properties or assets, operations or condition, financial
or otherwise. Borrower is not in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party or
by which Borrower or the Property is bound. Borrower has no financial
obligation under any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which Borrower is a party or by which
Borrower, the Property or other Collateral are otherwise bound, other than (a)
obligations incurred in the ordinary course of the operation of the Property or
other Collateral as permitted pursuant to Section 8.1(a)(vii)
hereof and
(b) obligations under the Loan Documents.

                    4.1.6     Title. Borrower has good, indefeasible and
insurable fee simple title to the real property comprising part of the Property
and good title to the balance of the Property, free and clear of all Liens
whatsoever except the Permitted Encumbrances. To Borrower’s knowledge, the
Security Instrument, when properly recorded in the appropriate records,
together with any Uniform Commercial Code financing statements required to be
filed in connection therewith, will create (a) a valid, perfected first
priority Lien on the Property, subject only to Permitted Encumbrances and (b)
perfected first priority security interests in and to, and perfected collateral
assignments of, all personalty (including the Leases), all in accordance with
the terms thereof, in each case subject only to any applicable Permitted
Encumbrances. There are no claims for payment for work, labor or materials
affecting the Property which are or may become a Lien prior to, or of equal
priority with, the Liens created by the Loan Documents. The Assignment of
Leases, when properly recorded in the appropriate records will create perfected
first priority security interests in and to, and perfected collateral
assignments of, all applicable Leases and Rents, all in accordance with the
terms thereof, in each case subject only to any applicable Permitted
Encumbrances.

                    4.1.7     Solvency;
No Bankruptcy Filing.
Borrower (a) has not entered into the transaction contemplated hereby or
executed the Note, this Agreement or any other Loan Documents with the actual
intent to hinder, delay or defraud any creditor and (b) has received reasonably
equivalent value in exchange for its obligations under the Loan Documents. After
giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds
and will, immediately following the making of the Loan, exceed Borrower’s total
liabilities, including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities. The fair saleable value of Borrower’s
assets is and will, immediately following the making of the Loan, be greater
than Borrower’s probable liabilities, including the maximum amount of its
contingent liabilities on its debts as such debts become absolute and matured. To
Borrower’s knowledge, 

35

Borrower’s assets do not
and, immediately following the making of the Loan will not, constitute
unreasonably small capital to carry out its business as conducted or as
proposed to be conducted. Borrower does not intend to incur debt and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debt and liabilities as they mature (taking into account
the timing and amounts of cash to be received by Borrower and the amounts to be
payable on or in respect of obligations of Borrower). The Property is not the
subject of any Bankruptcy Action. No Bankruptcy Action has been filed by or
against any Borrower Party in the last seven (7) years, and no Borrower Party
in the last seven (7) years has ever made an assignment for the benefit of
creditors or taken advantage of any Creditors Rights Laws. No Borrower Party is
contemplating either the filing of any Bankruptcy Action by it or the
liquidation of all or a major portion of Borrower’s or any such Borrower Party’s
assets or property, and Borrower has no knowledge of any Person contemplating
the filing of any Bankruptcy Action against any Borrower Party.

                    4.1.8     Financial
Information. All
financial information submitted by Borrower to Lender including but not limited
to all financial statements, statements of cash flow and income and operating
statements, Rent Rolls, reports, certificates and other documents submitted in
connection with the Loan (including the application therefor) or in satisfaction
of the terms thereof and all statements of fact made by Borrower in this
Agreement or in any other Loan Document, (a) are true, complete and correct,
(b) accurately represent the financial condition of the Property as of the date
of such reports, and (c) to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with GAAP
throughout the periods covered, except as expressly disclosed therein.

                    4.1.9     Full
and Accurate Disclosure. To Borrower’s knowledge, no statement of fact made by Borrower in
this Agreement or in any of the other Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading. There is no
material fact presently known to Borrower which has not been disclosed to
Lender which adversely affects, nor as far as Borrower can foresee, might
adversely affect, the use, value or operation of the Property or the business,
operations or condition (financial or otherwise) of Borrower. To Borrower’s
knowledge, there has been no material adverse change in any condition, fact,
circumstance or event that would make any such information inaccurate,
incomplete or otherwise misleading in any material respect or that otherwise
materially and adversely affects or might materially and adversely affect the
Property or the business operations or the financial condition of Borrower. To
Borrower’s knowledge, Borrower has disclosed to Lender all material facts and
has not failed to disclose any material fact that could cause any
representation or warranty made herein to be materially misleading.

                    4.1.10   No
Plan Assets.

                    (a)        (i)
Borrower is not an “employee benefit plan,” as defined in Section 3(3) of
ERISA, subject to Title I of ERISA (a “Plan”), (ii) none of the assets of Borrower
constitutes or will constitute “plan assets” of one or more such plans within
the meaning of 29 C.F.R. § 2510.3-101 (“Plan Assets”) and (iii) Borrower is not
engaging in any transaction which would cause any obligation, or action taken
or to be taken, hereunder (or the exercise by Lender of any of its rights under
the Note, this Agreement, the Security Instrument or the other Loan 

36

Documents) to be a
non-exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA (a “Prohibited Transaction”).

                    (b)           (i)
Borrower is not a “governmental plan” within the meaning of Section 3(32) of
ERISA (“Governmental
Plan”) and (ii) transactions by or with Borrower are not subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of
ERISA or Section 4975 of the Code currently in effect (“Prohibited Governmental Transactions”),
which prohibit or otherwise restrict the transactions contemplated by this
Agreement.

                    4.1.11     Compliance. Borrower and the Property and the use
thereof comply with all applicable Legal Requirements, including, without
limitation, all Environmental Laws. The Improvements are in compliance in all
material respects with all applicable Laws, building and zoning ordinances,
codes, rules, covenants, and restrictions governing the occupancy, use and
operation of the Property (“Zoning Regulations”). Any non-conformity with Zoning
Regulations constitutes a legal non-conforming use or structure which does not
materially and adversely affect the use, operation or value of the Property. In
the event of Casualty or destruction, (a) the Property may be restored or
repaired to the full extent necessary to maintain the use of the Improvements
immediately prior to such Casualty or destruction, or (b) “Ordinance or Law
Coverage” has been obtained for the Property in accordance with Section
7.1(a)(i)
hereof, in amounts approved by Lender, that provides coverage for additional
costs to rebuild and/or repair the Improvements to current Zoning Regulations,
or (c) the inability to restore the Improvements to the full extent of the use
or structure immediately prior to the Casualty or destruction would not
materially and adversely affect the use, operation or value of the Property. Borrower
is not in default or violation of any order, writ, injunction, decree or demand
of any Governmental Authority. 

                    4.1.12     Anti-Money
Laundering/International Trade Law Compliance. No Covered
Entity is a Sanctioned Person. No Covered Entity, either in its own right or
through any third party, (a) has any of its assets in a Sanctioned Country or
in the possession, custody or control of a Sanctioned Person in violation of
any Anti-Terrorism Law; (b) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law; or (c) engages in any dealings
or transactions prohibited by any Anti-Terrorism Law.

                    4.1.13     Reliance. The Property is not relied upon by, and
does not rely upon, any building or improvement not part of the Property to
fulfill any zoning, building code or other governmental or municipal
requirement for structural support or the furnishing of any essential building
systems or utilities, except to the extent of any valid and existing
irrevocable, permanent easement agreements shown in the Title Insurance Policy.

                    4.1.14     No
Contingent Liabilities. Borrower does not have any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments that are known to Borrower and
reasonably likely to have a materially adverse effect on the Property or the
current or contemplated use, value or operation thereof, except as expressly
referred to or reflected in said financial statements.

37

                    4.1.15     Condemnation. There is no Condemnation or other
proceeding pending, threatened in writing or planned, for the total or partial
condemnation of the Property, the relocation of roadways providing access to
the Property, or any permanent easements through which essential building
systems or utilities are provided.

                    4.1.16     Federal
Reserve Regulations.
Borrower executed and delivered the Loan Documents and received and applied the
proceeds of the Loan for its own account and not as an agent, nominee or
trustee for any other party or entity. No part of the proceeds of the Loan will
be used for the purpose of purchasing or acquiring any “margin stock” within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of
this Agreement or the other Loan Documents.

                    4.1.17     Access;
Utilities. The
Property (a) is located on or adjacent to a public road and has direct legal
access to such road, or has access via an irrevocable easement or irrevocable
right of way permitting ingress and egress to/from a public road, (b) is served
by or has uninhibited access rights to public or private water and sanitary
sewer (or well and septic), storm drainage facilities, and all required
utilities, all of which are appropriate for the current use of the Property. All
public utilities necessary or convenient for the full use and enjoyment of the
Property are located either in the public right of way abutting the Property
(which are connected as to serve the Property without passing over other
property) or in irrevocable recorded easements servicing the Property and such
easements are set forth in and insured by the Title Insurance Policy. All roads
and public utilities necessary for the use of the Property for its current
purposes have been completed and dedicated to public use and accepted by all
Governmental Authorities.

                    4.1.18     Not
a Foreign Person.
Neither Borrower nor any person or entity owning a beneficial interest in
Borrower is a “foreign person”, “foreign corporation”, “foreign partnership”, “foreign
trust”, or “foreign estate” under the provisions of Section 1445 of the Code. Notwithstanding
the foregoing, the provisions of this Section 4.1.18 shall not apply to the
shareholders of AmREIT, Inc. and any violation of this Section 4.1.18 by any
shareholder of AmREIT, Inc. shall not be a default hereunder.

                    4.1.19     Separate
Lots. The
Property is comprised of one (1) or more separate tax parcels which do not
include any property which is not part of the Property. If required by Law, the
Property constitutes one or more lawfully subdivided tracts of land, and all
conditions related to any such subdivision have been satisfied.

                    4.1.20     Assessments. There are no pending or proposed
special or other assessments in writing for public improvements or otherwise
affecting the Property, nor are there any contemplated improvements to the
Property that may result in such special or other assessments.

                    4.1.21     Enforceability. The Loan Documents are not subject to
any right of rescission, set off, counterclaim or defense by Borrower,
including the defense of usury, nor would the operation of any of the terms of
the Loan Documents, or the exercise of any right 

38

thereunder, render the
Loan Documents unenforceable, and Borrower has not asserted any right of
rescission, set off, counterclaim or defense with respect thereto.

                    4.1.22     No
Prior Assignment.
There are no prior assignments of the Leases or any portion of the Rents due
and payable or to become due and payable which are presently outstanding.

                    4.1.23     Insurance. Borrower has obtained and has delivered
to Lender certified copies of all Policies (or other evidence acceptable to
Lender) reflecting the insurance coverages, amounts and other requirements set
forth in this Agreement. No claims have been made under any such Policy, and no
Person, including Borrower, has done, by act or omission, anything which would
impair the coverage of any such Policy.

                    4.1.24     Use
of Property. The
Property is used exclusively for purposes and other appurtenant and related
uses disclosed to Lender on or prior to the Closing Date.

                    4.1.25     Certificate
of Occupancy; Licenses. All certifications, permits, licenses, franchises, consents and other
approvals, including without limitation, certificates of completion,
certificates of occupancy and occupancy permits necessary for the legal use,
occupancy and operation of the Property for its intended purpose(s)
(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.

                    4.1.26     Flood
Zone. None of the
Improvements on the Property are located in an area as identified by the
Federal Emergency Management Agency as an area having special flood hazards or,
if any portion of the Improvements on the Property is located in such an area,
the Flood Insurance Policies required by Section 7.1(a)(vii) hereof are in full force and effect.

                    4.1.27     Physical
Condition. 

                    (a)           The
Property, including, without limitation, all buildings, building systems for
the Improvements, Improvements, parking facilities, sidewalks, storm drainage
systems, roofs, plumbing systems, HVAC systems, fire protection systems,
mechanical and electrical systems, equipment, elevators, exterior sidings and
doors, landscaping, irrigation systems and all structural components, are in
good working order. The Property is (i) free of any material damage, (ii) in
good repair and condition, and (iii) free of structural defects, or any other
material defects or damages (whether latent or otherwise) except as follows: (A)
any damage or deficiencies that would not materially and adversely affect the
use, operation or value of the Property or the security intended to be provided
by the Security Instrument or repairs with respect to such damage or
deficiencies estimated to cost less than $50,000 in the aggregate; or (B) repairs
that have been completed. Borrower has not received notice from any insurance
company or bonding company of any structural or other defects or inadequacies
in the Property which would adversely affect the insurability of the same or
cause the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any policy of insurance or bond.

39

                    (b)          All
Improvements have been fully completed and all costs and expenses of
construction have been fully paid. Complete and final payment has been made for
all construction, repairs or new Improvements made to the Property within the
applicable period for filing Lien claims in the State.

                    4.1.28     Boundaries. Except as disclosed on the Survey, all
of the Improvements which were included in determining the appraised value of
the Property lie wholly within the boundaries and building restriction lines of
the Property. Except as disclosed on the Survey, no improvements on adjoining
properties encroach upon the Property, no Improvements encroach upon any
easements, and no easements or other encumbrances upon the Property encroach
upon any of the Improvements, so as to affect the value, current use or
marketability of the Property except those which are insured against by the
Title Insurance Policy.

                    4.1.29     Leases. The Property is not subject to any
Leases other than the Leases described in the Rent Roll attached hereto as Exhibit
B, which Rent
Roll is accurate and complete in all material respects as of the date hereof. Borrower
is the sole owner of the entire lessor’s interest in the Leases. No Person has
any possessory interest in the Property or right to occupy the same except
under and pursuant to the provisions of the Leases and Permitted Encumbrances.
To the best of Borrower’s knowledge, the Leases are valid and enforceable and
have not been altered, modified or amended in any manner since copies of same
were last delivered to Lender. None of the Rents (other than security deposits)
have been collected for more than one (1) month in advance. Except as
previously disclosed to Lender in writing, all work to be performed by Borrower
under each Lease has been performed as required and has been accepted by the
applicable tenant, and any payments, free rent, partial rent, rebate of rent or
other payments, credits, allowances or abatements required to be given by
Borrower to any tenant have already been received by such tenant. To the best
of Borrower’s knowledge, the current Leases are in full force and effect and
there are no defaults thereunder by either party and there are no conditions
that, with the passage of time or the giving of notice, or both, would
constitute defaults thereunder. There has been no prior Transfer of any Lease
or of the Rents received therein. Except as set forth on Exhibit B, no tenant
listed on Exhibit B has assigned its Lease or sublet all or
any portion of the premises demised thereby, no such tenant holds its leased
premises under assignment or sublease, nor does anyone except such tenant and
its employees occupy such leased premises. No tenant under any Lease has a
right or option pursuant to such Lease or otherwise to purchase all or any part
of the leased premises or the building of which the leased premises are a part.
Except as expressly provided under any Lease delivered to Lender prior to the
Closing Date, no tenant under any Lease has any right or option for additional
space in the Improvements. Except as set forth in the Environmental Report (as
defined in the Environmental Indemnity), no Hazardous Materials have been
stored, treated or Released by any tenant under any Lease on or about the
leased premises nor does Borrower have any knowledge of any tenant’s intention
to use its leased premises for any activity which, directly or indirectly,
involves the use, generation, treatment, storage, transportation or Release of
any Hazardous Materials. Other than Residential Leases, true and correct copies
of all Leases in existence as of the Closing Date were delivered to Lender
prior to the execution of this Agreement.

                    4.1.30     Survey. The Survey delivered to Lender in
connection with this Agreement has been certified to the title company and
Lender and their successors and assigns, 

40

and has been prepared by
a professional and properly licensed land surveyor in accordance with the
Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys as
adopted by American Land Title Association, American Congress on Surveying
& Mapping and National Society of Professional Surveyors effective February
23, 2011. The Survey reflects the same legal description contained in the Title
Insurance Policy. The Survey does not fail to reflect any material matter
affecting the Property or the title thereto.

                    4.1.31     No
Mezzanine Loan. As
of the Closing Date, no direct or indirect equity interest in Borrower is
pledged to secure any Indebtedness.

                    4.1.32     Filing
and Recording Taxes.
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 currently in effect in connection with the transfer of the
Property to Borrower have been paid or are being paid simultaneously herewith. All
mortgage, mortgage recording, stamp, intangible or other similar tax required
to be paid by any Person under applicable Legal Requirements currently in
effect in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Security Instrument, have been paid, and, to
Borrower’s knowledge, under current Legal Requirements, the Security Instrument
is enforceable in accordance with its terms by Lender (or any subsequent holder
thereof).

                    4.1.33     Management
Agreement. The
Management Agreement is in full force and effect and there is no default
thereunder by any party thereto and no event has occurred that, with the
passage of time and/or the giving of notice would constitute a default
thereunder. The Management Agreement was entered into on commercially
reasonable terms.

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

                    4.1.35     Investment
Company Act. Borrower
is not (a) an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended;
or (b) subject to any other federal or state Law or regulation which purports
to restrict or regulate its ability to borrow money.

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

                    4.1.37     Principal
Place of Business; State of Organization. Borrower’s principal place of business as of the
date hereof is the address set forth in the introductory paragraph of this
Agreement. Borrower is organized under the Laws of the state of Texas and its
organizational identification number is 801845957.

41

                    4.1.38     Taxpayer
Identification Number. Borrower’s United States taxpayer identification number is 46-3401743.

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

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

                    4.1.41     Forfeiture. Neither Borrower nor any other Person
in occupancy of or involved with the operation or use of the Property has
committed any act or omission affording the federal government or any state or
local government the right of forfeiture as against the Property or any monies
paid in performance of Borrower’s obligations under the Note, this Agreement or
the other Loan Documents. 

                    4.1.42     Accounts.

                    (a)          This
Agreement creates valid and continuing security interests (as defined in the
UCC) in each Reserve Account, and any sub-accounts established under any of the
foregoing, in favor of Lender, which security interests are prior to all other
Liens, other than Permitted Encumbrances, and are enforceable as such against
creditors of and purchasers from Borrower, and other than in connection with
the Loan Documents and except for Permitted Encumbrances, Borrower has not sold
or otherwise conveyed the Accounts; 

                    (b)          Borrower
acknowledges that Lender intends to maintain each Account as follows: (i) as a “securities
account” (as such term is defined in Section 8-501(a) of the UCC), (ii) in such
a manner that Lender shall have control (within the meaning of Section
8-106(d)(2) of the UCC) over such Account, (iii) such that neither Borrower nor
Manager shall have any right of withdrawal from such Account and, except as
provided herein, no Account Collateral shall be released to Borrower or Manager
from such Account, (iv) in such a manner that the applicable Eligible
Institution shall agree to treat all property credited to such Account as “financial
assets” and (v) such that all securities or other property underlying any
financial assets credited to such Accounts shall be registered in the name of
the applicable Eligible Institution, indorsed to the applicable Eligible
Institution or in blank or credited to another securities account maintained in
the name of the applicable Eligible Institution and in no case will any
financial asset credited to such Account be registered in the name of Borrower,
payable to the order of Borrower or specially indorsed to Borrower; and

                    (c)          Other
than the security interests granted to Lender pursuant to this Agreement, Borrower
has not pledged, assigned, or sold, granted a security interest in, or
otherwise conveyed, any Account Collateral.

                    4.1.43    
[Intentionally Omitted]. 

42

                    4.1.44     Property
Document Representations. With respect to each Property Document, Borrower hereby represents
that (a) each Property Document is in full force and effect and has not been
amended, restated, replaced or otherwise modified (except, in each case, as
expressly set forth herein), (b) there are no defaults under any Property
Document by any party thereto and, to Borrower’s knowledge, no event has
occurred which, but for the passage of time, the giving of notice, or both,
would constitute a default under any Property Document, (c) all rents, additional
rents and other sums due and payable under each Property Document have been
paid in full, (d) no party to any Property Document has commenced any action or
given or received any notice for the purpose of terminating any Property
Document, (e) the representations made in any estoppel or similar document
delivered with respect to any Property Document in connection with the Loan are
true, complete and correct and are hereby incorporated by reference as if fully
set forth herein.

                    4.1.45     Material
Agreements. With
respect to each Material Agreement, Borrower hereby represents that (a) each
Material Agreement is in full force and effect and has not been amended,
restated, replaced or otherwise modified (except, in each case, as expressly
set forth herein), (b) there are no defaults under any Material Agreement by
any party thereto and, to Borrower’s knowledge, no event has occurred which,
but for the passage of time, the giving of notice, or both, would constitute a
default under any Material Agreement, (c) all payments and other sums due and
payable under any Material Agreement have been paid in full, (d) no party to
any Material Agreement has commenced any action or given or received any notice
for the purpose of terminating any Material Agreement, and (e) the
representations made in any estoppels or similar document delivered with
respect to any Material Agreement in connection with the Loan are true,
complete and correct and are hereby incorporated by reference as if fully set
forth herein.

          Section
4.2     Survival of Representations.
Borrower agrees that all of the representations and warranties of Borrower set
forth in Section 4.1
hereof and elsewhere in this Agreement and in the other Loan Documents shall
survive for so long as any amount remains owing to Lender under this Agreement
or any of the other Loan Documents by Borrower. All representations,
warranties, covenants and agreements made in this Agreement or in the other
Loan Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.

	
  

 	
  

 
	
 V.

 	
 BORROWER COVENANTS

 

          From
the date hereof and until payment and performance in full of all obligations of
Borrower under the Loan Documents in accordance with the terms of this
Agreement and the other Loan Documents, Borrower hereby covenants and agrees
with Lender that:

          Section
5.1     Existence; Compliance with Legal Requirements;
Insurance. Borrower shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its existence,
rights, Licenses and comply with all Legal Requirements applicable to it and
the Property. There shall never be committed by Borrower or any other Person in
occupancy of or involved with the operation or use of the Property any act or
omission affording the federal government or any state or local government the
right of forfeiture as against the Property or any monies paid in performance
of Borrower’s obligations under any of 

43

the Loan Documents. Borrower hereby covenants and agrees not to commit,
permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall at all times maintain, preserve and protect all
franchises and trade names and preserve all the remainder of its property used
or useful in the conduct of its business and shall keep the Property in good
working order and repair, and from time to time make, or cause to be made, all
reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto to allow the Property to remain consistently competitive
in its market. Borrower shall keep the Property insured at all times in
accordance with the terms and conditions of Article VII hereof.

          Section
5.2     Property Taxes and Other Charges.
To the extent not paid by Lender pursuant to the terms of Section 9.2 hereof,
Borrower shall pay all Property Taxes and Other Charges now or hereafter levied
or assessed or imposed against the Property as the same become due and payable.
Except with regard to Property Taxes and Other Charges paid by Lender in
accordance with Section 9.2 hereof, Borrower will deliver to Lender receipts
for payment or other evidence satisfactory to Lender that the Property Taxes
and Other Charges have been so paid or are not then delinquent no later than
ten (10) days prior to the date on which the Property Taxes and/or Other
Charges would otherwise be delinquent if not paid. Borrower shall not suffer
and shall promptly cause to be paid and discharged any Lien or charge
whatsoever which may be or become a Lien or charge against the Property, and
shall promptly pay for all utility services provided to the Property. After
prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith
and with due diligence, the amount or validity or application in whole or in
part of any Property Taxes or Other Charges, provided that the following conditions
are satisfied: (a) no Default or Event of Default has occurred and remains
uncured; (b) Borrower is permitted to contest under the provisions of any
document or agreement affecting the Property; (c) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Borrower is subject and shall not constitute a default
thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, Laws and ordinances; (d) neither the Property nor any
interest therein will be in danger of being sold, forfeited, terminated,
cancelled or lost; (e) Borrower shall promptly upon final determination thereof
pay the amount of any such Property Taxes or Other Charges, together with all costs,
interest and penalties which may be payable in connection therewith; (f) such
proceeding shall suspend the collection of such contested Property Taxes or
Other Charges from the Property; (g) Borrower shall furnish such security as
may be required in the proceeding, or as may be requested by Lender, to insure
the payment of any such Property Taxes or Other Charges, together with all
interest and penalties thereon. Lender may 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 or the
Property (or interest therein) shall be in danger of being sold, forfeited,
terminated, cancelled or lost or there shall be any danger of the Lien of the
Security Instrument or the other Loan Documents being primed by any related
Lien; and (h) to the extent any of such Other Charges are mechanic’s and
materialmen’s liens, Borrower shall deliver to Lender a bond in accordance with
Chapter 53 of the Texas Property Code, as amended from time to time, sufficient
to discharge the mechanics’ and materialmen’s lien from the Property so that it
attaches only to such bond. 

44

          Section
5.3     Litigation.
Borrower shall give prompt written notice to Lender of any litigation or
governmental proceedings pending or threatened in writing against Borrower or
the Property which might materially adversely affect Borrower’s condition
(financial or otherwise) or business or the use, value or operation of the
Property. 

          Section
5.4     Access to Property. Subject
to the terms of the applicable Leases, Borrower shall permit agents,
representatives and employees of Lender to conduct physical inspections of the
Property to ensure Borrower is appropriately maintaining the Property at
reasonable hours upon reasonable advanced notice. Following any such
inspection, should Lender determine that the Property has not been maintained
as required herein, Lender shall have the right to demand that Borrower
complete or begin to complete and diligently continue corrective measures
satisfactory to Lender within a thirty (30) day period of time. 

          Section
5.5     Notice of Default. Borrower
shall promptly advise Lender of 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. 

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

          Section
5.7     Performance Under Loan Documents.
Borrower shall observe, perform and satisfy all the terms, provisions, covenants
and conditions of, and shall pay when due all costs, fees and expenses to the
extent required under the Loan Documents executed and delivered by, or
applicable to, Borrower, and shall not enter into or otherwise suffer or permit
any amendment, waiver, supplement, termination or other modification of any
Loan Document executed and delivered by, or applicable to, Borrower without the
prior written consent of Lender. 

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

          Section
5.9     Further Assurances. Borrower
shall, at Borrower’s sole cost and expense: 

                    (a)         furnish
to Lender all instruments, documents, boundary surveys, footing or foundation
surveys, certificates, plans and specifications, appraisals, title and other
insurance reports and agreements, and each and every other document,
certificate, agreement and instrument required to be furnished by Borrower
pursuant to the terms of the Loan Documents or reasonably requested by Lender
in connection therewith; 

45

                    (b)          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 obligations of Borrower under the Loan Documents, as Lender may reasonably
require including, without limitation, the execution and delivery of all such
writings necessary to transfer any Licenses, as required by Lender, into the
name of Lender or its designee after the occurrence of any Event of Default;
and 

                    (c)          do
and execute all and such further lawful and reasonable acts, conveyances and
assurances for the better and more effective carrying out of the intents and purposes
of this Agreement and the other Loan Documents, as Lender shall reasonably
require from time to time and Borrower hereby expressly authorizes and appoints
Lender its attorney-in-fact to execute such documents and instruments in the
name of and upon behalf of Borrower, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest. 

          Section
5.10    Financial
Reporting. 

                    (a)          Borrower
will keep and maintain or will cause to be kept and maintained on a Fiscal Year
basis, in accordance with GAAP (or such other accounting basis acceptable to
Lender), proper and accurate books, records and accounts reflecting all of the
financial affairs of Borrower and all items of income and expense in connection
with the operation of the Property. Lender shall have the right from time to
time at all times during normal business hours upon reasonable notice to
examine such books, records and accounts at the office of Borrower or other
Person maintaining such books, records and accounts and to make such copies or
extracts thereof as Lender shall desire. After the occurrence of an Event of
Default, Borrower shall pay on demand any costs and expenses incurred by Lender
to examine Borrower’s accounting records with respect to the Property, as
Lender shall determine to be necessary or appropriate in the protection of
Lender’s interest. 

                    (b)          Borrower
will furnish to Lender annually, within one-hundred twenty (120) days following
the end of each Fiscal Year of Borrower, a complete copy of Borrower’s annual
financial statements covering the Property for such Fiscal Year and containing
statements of profit and loss for Borrower and the Property and a balance sheet
for Borrower. Such statements shall set forth the financial condition and the
results of operations for the Property for such Fiscal Year, and shall include,
but not be limited to, amounts representing annual Net Cash Flow, Net Operating
Income, Gross Income From Operations and Operating Expenses. Borrower’s annual
financial statements shall be accompanied by (i) a comparison of the budgeted
income and expenses and the actual income and expenses for the prior Fiscal
Year, (ii) a certificate executed by a Responsible Officer of Borrower or SPE
Component Entity, as applicable, stating that each such annual financial
statement presents fairly the financial condition and the results of operations
of Borrower and the Property being reported upon and has been prepared in
accordance with GAAP (or such other accounting basis acceptable to Lender). To
the extent that Borrower consists of more than one Person, such annual
financial statements shall include an annual combined balance sheet of the
Persons constituting Borrower (and no other Persons), together with the related
combined statements of operations, member’s capital and cash flows, including a
combining balance sheet and statement of income for the Property on a combined
basis. Together with Borrower’s annual financial statements, Borrower shall
furnish 

46

to Lender an Officer’s
Certificate certifying as of the date thereof whether there exists a Default or
Event of Default under the Loan Documents executed and delivered by, or
applicable to, Borrower, and if such Default or Event of Default exists, the
nature thereof, the period of time it has existed and the action then being
taken to remedy the same. 

                    (c)          Borrower
will furnish, or cause to be furnished, to Lender on or before forty-five (45)
days after the end of each calendar quarter the following items, accompanied by
an Officer’s Certificate of Borrower or SPE Component Entity, as applicable,
stating that the following items are true, correct, accurate, and complete and
fairly present the financial condition and results of the operations of
Borrower and the Property (subject to normal year-end adjustments): (i) a Rent
Roll for the subject quarter; and (ii) quarterly and year-to-date operating
statements (including Capital Expenditures) prepared for each calendar quarter,
noting Net Cash Flow, Net Operating Income, Gross Income From Operations, and
Operating Expenses, and other information necessary and sufficient to fairly
represent the financial position and results of operation of the Property during
such calendar quarter. In addition, such Officer’s Certificate shall certify
that the representations and warranties of Borrower, and SPE Component Entity
if applicable, set forth in Section 8.1(a)(vii) are true and correct as of the date
of such Officer’s Certificate and that there are no trade payables outstanding
for more than sixty (60) days. 

                    (d)          On
the Closing Date, Borrower shall submit to Lender an Annual Budget for the
partial year period commencing on the Closing Date in form and substance
reasonably satisfactory to Lender. Borrower shall submit to Lender an Annual
Budget not later than thirty (30) days prior the commencement of each Fiscal
Year in form and substance reasonably satisfactory to Lender. 

                    (e)          Borrower
will furnish or cause to be furnished to Lender annually, within one-hundred
twenty (120) days following the end of each Fiscal Year of each Guarantor, a
complete copy of each Guarantor’s annual financial statements containing statements
of profit and loss and a balance sheet for each Guarantor. Each Guarantor’s
annual financial statements shall be accompanied by a certificate executed by
such Guarantor (if Guarantor is a natural person) or by the chief financial
officer or other officer of such Guarantor (if such Guarantor is not a natural
person) stating that each such annual financial statement presents fairly the
financial condition and the results of operations of such Guarantor being
reported upon, and has been prepared in accordance with GAAP. Together with
each Guarantor’s annual financial statements, Borrower will furnish or cause
such Guarantor to furnish to Lender an Officer’s Certificate certifying as of
the date thereof whether there exists a Default or Event of Default under the
Loan Documents executed and delivered by, or applicable to, such Guarantor, and
if such Default or Event of Default exists, the nature thereof, the period of
time it has existed and the action then being taken to remedy the same. 

                    (f)          In
addition to the other requirements of this Section 5.10, after written notice from
Lender, Borrower shall deliver, or cause to be delivered to Lender, within
thirty (30) days after the close of each calendar month after receipt of such
written notice from Lender and until the Securitization of the entire Loan, the
following items, accompanied by an Officer’s Certificate of Borrower or SPE
Component Entity, as applicable, stating that such items are true, correct,
accurate, and complete and fairly present the financial condition and results
of the operations of Borrower and the Property (subject to normal year-end
adjustments): (i) a Rent 

47

Roll for the subject month; and (ii) monthly and
year-to-date operating statements (including Capital Expenditures) prepared for
each calendar month, noting Net Cash Flow, Net Operating Income, Gross Income
From Operations, and Operating Expenses, and other information necessary and
sufficient to fairly represent the financial position and results of operation
of the Property during such calendar month. In addition, such Officer’s
Certificate shall certify that the representations and warranties of Borrower,
and SPE Component Entity if applicable, set forth in Section 8.1(a)(vii)
are true and correct as of the date of such Officer’s Certificate and that
there are no trade payables outstanding for more than sixty (60) days. 

                    (g)          Within
sixty (60) days after filing, Borrower shall deliver, or cause to be delivered,
to Lender a certified copy of each of Borrower’s and each Guarantor’s federal,
state and local income tax returns. 

                    (h)          Borrower
shall furnish to Lender, within ten (10) Business Days after request, such
further detailed information with respect to the operation of the Property and
the financial affairs of Borrower or any Guarantor as may be reasonably
requested by Lender. 

                    (i)          Any
reports, statements or other information required to be delivered under this Agreement
shall be delivered (i) in paper form, and/or (ii) via electronic mail, FTP
upload, website submission or any future commonly available technology
acceptable to Lender in its sole discretion, and prepared using Microsoft Word
or Excel, Adobe PDF, an XML file or any future industry standard or commonly
available technology acceptable to Lender in its sole discretion. 

                    (j)          Borrower
agrees that Lender may forward to each Investor or any nationally recognized
statistical rating organization identified as such by the Securities and
Exchange Commission, and each prospective Investor, all documents and
information which Lender now has or may hereafter acquire relating to the Debt
and to Borrower, any Guarantor, and the Property, whether furnished by
Borrower, any Guarantor, or otherwise, as Lender reasonably determines
necessary. Borrower irrevocably waives any and all rights it may have under any
applicable Laws to prohibit such disclosure, including, but not limited, to any
right of privacy. 

          Section
5.11    Business and
Operations. Borrower shall continue to engage in the businesses presently
conducted by it as and to the extent the same are necessary for the ownership,
maintenance, management and operation of the Property, and shall continue to
operate the Property for such purposes. Borrower will qualify to do business
and will remain in good standing under the Laws of the jurisdiction as and to
the extent the same are required for the ownership, maintenance, management and
operation of the Property. 

          Section
5.12    Title to the
Property. Borrower will warrant and defend (a) the title to the Property,
subject only to Permitted Encumbrances and (b) the validity and priority of the
Lien of the Security Instrument, the Assignment of Leases and the other Loan
Documents on the Property, subject only to Permitted Encumbrances, in each case
against the claims of all Persons whomsoever. Borrower shall reimburse Lender
on demand for any losses, costs, damages or expenses (including reasonable
attorneys’ fees and court costs) incurred by Lender if an interest in the
Property is claimed by another Person. 

48

          Section
5.13    Costs of
Enforcement. In the event (a) that the Security Instrument is foreclosed in
whole or in part or the Security Instrument or any other Loan Document is put
into the hands of an attorney for collection, suit, action or foreclosure, (b)
of the foreclosure of any mortgage prior to or subsequent to the Security
Instrument in which proceeding Lender is made a party or (c) of any Bankruptcy
Action in respect of Borrower or any Restricted Party, Borrower, its successors
or assigns, shall pay (and reimburse Lender accordingly) all costs of
collection and defense, including attorneys’ fees and costs, incurred by Lender
or Borrower in connection therewith and in connection with any appellate
proceeding or post judgment action involved therein, together with all required
service or use taxes. 

          Section
5.14     Estoppel
Statements. 

                    (a)          After
request by Lender, Borrower shall within ten (10) Business Days furnish Lender
with a statement, duly acknowledged and certified, setting forth (i) the amount
of the original principal amount of the Note, (ii) the unpaid principal amount
of the Note, (iii) the Applicable Interest Rate of the Note, (iv) the date
installments of interest and/or principal were last paid, (v) that no Default
or Event of Default has occurred and is continuing, (vi) any offsets or
defenses to the payment of the Debt, if any and (vii) that the Note, this
Agreement, the Security Instrument and the other Loan Documents are valid,
legal and binding obligations and have not been modified or if modified, giving
particulars of such modification. 

                    (b)          After
request by Lender, Borrower shall within thirty (30) Business Days (if such
request is made prior to a Securitization) and fifteen (15) Business Days (if
such request is made following a Securitization) furnish Lender with estoppel
certificates, in form and content satisfactory to Lender, from all tenants
specified by Lender (other than tenants under Residential Leases). If any
tenant fails to provide such estoppel certificate, Borrower shall provide a
landlord estoppel certificate to Lender with respect to the tenancy of such
tenant, in form and substance satisfactory to Lender provided that Borrower
shall not be required to deliver such certificates more frequently than two (2)
times in any calendar year so long as no Event of Default has occurred and is
continuing. 

                    (c)          After
request by Lender, Borrower shall within thirty (30) Business Days (if such
request is made prior to a Securitization) and fifteen (15) Business Days (if
such request is made following a Securitization) deliver estoppel certificates
from each party under any Property Document in form and substance reasonably
acceptable to Lender. If any party under any Property Document (other than
Borrower) fails to provide such estoppel certificate, Borrower shall provide an
estoppel certificate to Lender with respect to such Property Document, in form
and substance satisfactory to Lender, provided that Borrower shall not be
required to deliver such certificates more frequently than two (2) times in any
calendar year so long as no Event of Default has occurred and is continuing. 

          Section
5.15     Loan Proceeds. Borrower
shall use the proceeds of the Loan received by it on the Closing Date only for
the purposes set forth in Section
2.1.4 hereof. 

          Section
5.16     No Joint Assessment.
Borrower shall not suffer, permit or initiate the joint assessment of the
Property (a) with any other real property constituting a tax lot separate from
the Property and (b) which constitutes real property with any portion of the
Property which 

49

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 such
real property portion of the Property. 

          Section
5.17     Leasing Matters. 

                    (a)          With
respect to all Leases, Borrower shall: (i) observe and perform all the
obligations imposed upon Borrower as landlord; (ii) not do or permit to be done
anything to materially impair the value of any of the Leases as security for
the Debt (including, without limitation, relocating or moving any tenant under
any Lease to any other property owned by any Guarantor or any Affiliate of
Borrower, SPE Component Entity or any Guarantor); (iii) other than for
Residential Leases, promptly send to Lender copies of all notices of default
which Borrower shall send or receive thereunder; (iv) enforce in a commercially
reasonable manner all of the terms, covenants and conditions which are to be
performed by any tenant, short of termination thereof; (v) not collect any of
the Rents more than one (1) month in advance; (vi) not execute any other
assignment of Borrower’s interest in any of the Leases or the Rents; and (vii)
execute and deliver at the request of Lender all such further assurances,
confirmations and assignments in connection with the Property as Lender shall
from time to time require. 

                    (b)          Without
obtaining Lender’s prior written approval (which shall not be unreasonably
withheld), Borrower shall not: 

                                   (i)            extend
any Lease or enter into any new or renewal Lease affecting the Property;
provided, however, so long as there exists no Event of Default, no such
approval of Lender shall be required if: (A) such Lease is not a Major Lease,
(B) such Lease complies with the Leasing Requirements; and (C) other than
Residential Leases (unless requested by Lender), an executed copy of such Lease
shall be furnished to Lender within ten (10) Business Days after its execution;

                                   (ii)           other
than Residential Leases, consent to any assignment of or subletting by any
tenant under any Lease that covers more than 15,000 square feet of rentable
space at the Property (except in accordance with the terms of such tenant’s
Lease); 

                                   (iii)          alter,
modify, change, cancel or terminate any guaranty of any of the Leases; 

                                   (iv)          other
than Residential Leases, alter, modify, change the terms of, cancel, terminate
or accept a surrender of any Lease that covers more than 15,000 square feet of
rentable space at the Property; or 

                                   (v)           transfer
or permit a transfer of the Property or of any interest therein, even if such a
transfer is permitted under the Security Instrument, if such transfer would
effect a merger of the estates and rights of, or a termination or diminution of
the obligations of, tenants under any of the Leases. 

                    (c)           Notwithstanding
anything to the contrary in this Section 5.17, provided no Default or Event of
Default exists hereunder, Borrower may, without the prior written consent of 

50

Lender (except if
required pursuant to Section
5.17(d) hereof), amend, modify or waive the provisions of any
Lease that is not a Major Lease or terminate, reduce rents under, accept a
surrender of space under, or shorten the term of, any Lease that is not a Major
Lease (any of the foregoing, a “Lease Modification”), provided that (i) such Lease
Modification (taking into account, in the case of a termination, reduction in
rent, surrender of space or shortening of term, the planned alternative use of
the affected space) does not have a Material Adverse Effect, (ii) such Lease
Modification is in the normal course of business and is consistent with sound
and customary leasing and management practices for similar properties in the community
in which the Property is located, and (iii) such Lease, as amended, modified or
waived, is otherwise in compliance with the requirements of this Agreement and
any subordination agreement binding upon Lender with respect to such Lease. A
termination of a Lease with a tenant who is in default beyond applicable notice
and grace periods shall not be considered an action which has a Material
Adverse Effect on the value of the Property taken as a whole. Any Lease
Modification which does not satisfy the requirements set forth in this Section 5.17(c) shall
be subject to the prior approval of Lender, at Borrower’s expense (and, in
conjunction therewith, Borrower shall provide Lender with such information as
Lender shall reasonably request with respect to such proposed Lease
Modification and the tenant under the Lease affected thereby). Promptly upon
entering into any Lease Modification without Lender’s approval pursuant to this
Section 5.17(c),
Borrower shall deliver to Lender a copy of such instrument, together with
Borrower’s certification that such instrument satisfies all of the conditions
of this Section 5.17.

                    (d)          Notwithstanding
anything to the contrary in this Section 5.17, (i) Borrower shall not modify,
amend, supplement or replace the Approved Lease Form without Lender’s prior
written approval, which approval shall not be unreasonably withheld; and (ii)
Borrower shall not enter into, alter, modify, change the terms of, cancel,
terminate or accept a surrender of, or extend or renew a Major Lease, without
Lender’s prior written approval, which approval may be granted or withheld in
Lender’s sole but in good faith discretion. 

                    (e)          To
the extent Lender’s approval is required under this Section 5.17, and the
Lease in question is not a Major Lease, Borrower shall submit a request to
Lender (containing all information reasonably necessary for Lender to make an
informed decision, i.e. financial statements, proposed lease, modification,
sublease, assignment or other document for which approval is sought), with the
following language prominently displayed at the top and on the cover of any
such request in allcaps, boldface, 14 point type or larger: “IMMEDIATE RESPONSE REQUIRED, CONSENT DEEMED GIVEN IF
NO RESPONSE WITHIN 10 BUSINESS DAYS.” If no response has been
received within 10 Business Days of Lender’s receipt of such request, Borrower
shall submit a second request to Lender with the following language prominently
displayed at the top and on the cover of any such request in allcaps, boldface,
14 point type or larger: “IMMEDIATE RESPONSE
REQUIRED, CONSENT DEEMED GIVEN IF NO RESPONSE WITHIN 5 BUSINESS DAYS.”
If no response has been received within five (5) Business Days of Lender’s
receipt of such second request, Lender’s approval shall be deemed to be given. 

          Section
5.18     Alterations. Lender’s prior
approval shall be required in connection with any alterations to any
Improvements (a) that may have a Material Adverse Effect, (b) the cost of which
(including any related alteration, improvement or replacement) is reasonably
anticipated to exceed the Alteration Threshold, or (c) that are structural in
nature, which approval may be 

51

granted or withheld in
Lender’s sole discretion. If the total unpaid amounts incurred and to be
incurred with respect to any alterations to the Improvements shall at any time
exceed the Alteration Threshold, Borrower shall promptly deliver to Lender as
security for the payment of such amounts and as additional security for
Borrower’s obligations under the Loan Documents any of the following: (i) cash,
(ii) U.S. Obligations, (iii) other securities acceptable to Lender (provided
that Lender shall have received a Rating Agency Confirmation as to the form and
issuer of same), or (iv) a completion bond (provided that Lender shall have
received a Rating Agency Confirmation as to the form and issuer of same). Such
security shall be in an amount equal to the excess of the total unpaid amounts
incurred and to be incurred with respect to such alterations to the
Improvements over the Alteration Threshold. 

          Section
5.19    Access Laws. 

                    (a)          Borrower
agrees that the Property shall at all times comply with the requirements of the
Access Laws. 

                    (b)          Notwithstanding
any provisions set forth herein or in any other document regarding Lender’s
approval of alterations of the Property, Borrower shall not alter the Property
in any manner which would increase Borrower’s responsibilities for compliance
with the applicable Access Laws without the prior written approval of Lender.
The foregoing shall apply to tenant improvements constructed by Borrower or by
any of its tenants. Lender may condition any such approval upon receipt of a
certificate of an architect, engineer or other person acceptable to Lender
regarding compliance with applicable Access Laws. 

                    (c)          Borrower
covenants and agrees to give prompt notice to Lender of the receipt by Borrower
of any complaints related to any violations of any Access Laws and of the
commencement of any proceedings or investigations which relate to compliance
with applicable Access Laws. 

          Section
5.20    Property Management. 

                    (a)          Borrower
shall cause the Manager to manage the Property in a first class manner.
Borrower shall (i) pay all sums required to be paid by Borrower under the
Management Agreement, (ii) diligently perform, observe and enforce all of the
terms, covenants and conditions of the Management Agreement on the part of
Borrower to be performed, observed and enforced and (iii) promptly notify
Lender of the giving of any notice to Borrower of any default by Borrower in
the performance or observance of any of the terms, covenants or conditions of
the Management Agreement on the part of Borrower to be performed and observed
and deliver to Lender a true copy of each such notice. Borrower shall comply
with all obligations of Borrower under the Assignment of Management Agreement. 

                    (b)          Borrower
shall not remove or replace the Manager (which, with respect to an Affiliated
Manager, shall be deemed to occur upon a change of Control of the Manager) or
terminate, cancel, modify, change, supplement, alter or amend the Management
Agreement in any material respect (including, without limitation, any increase
in the fees paid to Manager) (collectively, a “Management Change”) without (i) Lender’s
prior written consent and, (ii) in the event that the Loan or any interest
therein is included in a Securitization (A) Rating Agency 

52

Confirmation if required
by Lender, and (B) a REMIC Opinion if required by Lender. As conditions
precedent to any replacement of the Manager, Borrower shall (i) deliver to
Lender, for Lender’s review and approval, a copy of the new Management
Agreement, (ii) execute and cause the new manager of the Property to execute an
Assignment of Management Agreement in form and substance acceptable to Lender,
(iii) cause the new manager to assume each and every other obligation of
Manager under the Loan Documents, (iv) deliver to Lender evidence satisfactory
to Lender of the payment by Borrower or the prior Manager of all leasing
commissions and brokerage fees under the prior Management Agreement, and
Borrower hereby agrees to indemnify Lender with respect to the unpaid amount of
any such leasing commissions and brokerage fees, (v) pay all of Lender’s costs
and expenses, and, in the event that the Loan or any interest therein is
included in a Securitization, any Rating Agency costs and expenses, incurred in
connection with such replacement (including, without limitation, all reasonable
attorney’s fees) and (vi) if the Loan or any interest therein has been included
in a Securitization, deliver an Additional Insolvency Opinion to Lender if such
new Manager is an Affiliated Manager. If required by Lender, Borrower shall
also deliver to Lender (a) a fidelity bond with respect to the actions of the
Manager, its officers, directors, employees and agents, in form and amount
acceptable to Lender, and (b) certified financial statements of the Manager
prepared in accordance with GAAP, and (c) such other information related to
Manager’s qualifications and experience as Lender may reasonably request. 

                    (c)          Borrower
hereby assigns to Lender as further security for the payment of the Debt and
for the performance and observance of the terms, covenants and conditions of
this Agreement, all the rights, privileges and prerogatives of Borrower under
the Management Agreement or to terminate, cancel, modify, change, supplement,
alter or amend the Management Agreement in any respect. Any surrender,
termination, cancellation, modification, change, supplement, alteration or
amendment of the Management Agreement without the prior consent of Lender shall
be void and of no force and effect. If Borrower shall default in the
performance or observance of any term, covenant or condition of the Management
Agreement, then, without limiting the generality of the other provisions of
this Agreement, and without waiving or releasing Borrower from any of its
obligations hereunder, Lender shall have the right, but shall be under no
obligation, to pay any sums and to perform any act or take any action as may be
appropriate to cause all the terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed or observed to be promptly
performed or observed on behalf of Borrower, to the end that the rights of
Borrower in, to and under the Management Agreement shall be kept unimpaired and
free from default. Lender and any Person designated by Lender shall have, and
are hereby granted, the right to enter upon the Property at any time and from
time to time for the purpose of taking any such action. If Manager shall
deliver to Lender a copy of any notice sent to Borrower of default under the
Management Agreement, such notice shall constitute full protection to Lender
for any action taken or omitted to be taken by Lender in good faith, in reliance
thereon. Borrower shall, from time to time, cause Manager to deliver such
certificates of estoppel with respect to compliance by Borrower with the terms
of the Management Agreement as may be requested by Lender. Borrower shall
exercise each individual option, if any, to extend or renew the term of the
Management Agreement upon demand by Lender made at any time within one (1) year
of the last day upon which any such option may be exercised, and Borrower
hereby expressly authorizes and appoints Lender as its attorney-in-fact to
exercise any such option in the name of and upon behalf of Borrower, which 

53

power of attorney shall be irrevocable and shall be
deemed to be coupled with an interest. Any sums expended by Lender pursuant to
this paragraph shall bear interest at the Default Rate from the date such cost
is incurred to the date of payment to Lender, shall be deemed to constitute a
portion of the Debt, shall be secured by the Lien of the Security Instrument
and the other Loan Documents, and shall be immediately due and payable upon
demand by Lender therefor. 

                    (d)          Borrower
covenants and agrees, that, if (i) an Event of Default exists, or (ii) a
default or event of default exists under the Management Agreement beyond any applicable
notice or cure period, or (iii) Manager becomes subject to any Bankruptcy
Action, Borrower shall, at the request of Lender, terminate the Management
Agreement, and require Manager to transfer its responsibility for the
management of the Property to a management company selected by, or otherwise
acceptable to, Lender, and otherwise meeting the requirements of Section 5.20(b)
hereof. 

          Section
5.21    Compliance with
Anti-Terrorism Laws. 

                    (a)          No
Covered Entity will become a Sanctioned Person. No Covered Entity, either in
its own right or through any third party, will (a) have any of its assets in a
Sanctioned Country or in the possession, custody or control of a Sanctioned
Person in violation of any Anti-Terrorism Law; (b) do business in or with, or
derive any of its income from investments in or transactions with, any
Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law;
(c) engage in any dealings or transactions prohibited by any Anti-Terrorism Law
or (d) use the Loan proceeds to fund any operations in, finance any investments
or activities in, or, make any payments to, a Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law. The funds used to repay the
Obligations will not be derived from any unlawful activity. Each Covered Entity
shall comply with all Anti-Terrorism Laws. 

                    (b)          Borrower
covenants and agrees that it shall immediately notify Lender in writing upon
the occurrence of a Reportable Compliance Event. 

                    (c)          Borrower
shall perform reasonable due diligence to ensure that at all times throughout
the term of the Loan, including after giving effect to any Permitted Transfers,
that the representations and warranties set forth in Section 4.1.12 hereof
remain true, correct and complete. 

                    (d)          To
help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify
and record information that identifies each Borrower that opens an account.
What this means: when Borrower opens an account, Lender will ask for the
business name, business address, taxpayer identifying number and other
information that will allow Lender to identify Borrower, such as organizational
documents. For some businesses and organizations, Lender may also need to ask
for identifying information and documentation relating to certain individuals
associated with the business or organization. 

          Section
5.22    Liens. Borrower shall not,
without the prior written consent of Lender, create, incur, assume or suffer to
exist any Lien on the Property or permit any such action to be taken, except
for the Permitted Encumbrances. 

54

          Section
5.23     Dissolution. Borrower shall
not (a) engage in any dissolution, liquidation or consolidation or merger with
or into any other business entity, (b) engage in any business activity not
related to the ownership and operation of the Property, (c) transfer, lease or
sell, in one transaction or any combination of transactions, the assets or all
or substantially all of the properties or assets of Borrower except to the
extent expressly permitted by the Loan Documents, (d) modify, amend, waive or
terminate its organizational documents or its qualification and good standing
in any jurisdiction or (e) cause the SPE Component Entity to (i) dissolve, wind
up or liquidate or take any action, or omit to take an action, as a result of
which the SPE Component Entity would be dissolved, wound up or liquidated in
whole or in part, or (ii) amend, modify, waive or terminate the certificate of
incorporation or bylaws of the SPE Component Entity, if it is a corporation, or
its certificate of formation or limited liability company agreement, if it is a
limited liability company, in each case, without the prior written consent of
Lender. 

          Section
5.24     Change In Business.
Borrower shall not enter into any line of business other than the ownership and
operation of the Property, or make any 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. 

          Section
5.25     Debt Cancellation. Borrower
shall not cancel or otherwise forgive or release any claim or debt (other than
termination of Leases in accordance herewith) owed to Borrower by any Person,
except for adequate consideration and in the ordinary course of Borrower’s
business and to the extent such debt or claim is greater than $25,000 on terms
which are fully disclosed to Lender in writing and in advance. 

          Section
5.26     Property Document Covenants.
Borrower shall (i) promptly perform and/or observe, in all material respects,
all of the covenants and agreements required to be performed and observed by it
under the Property Documents and do all things necessary to preserve and to
keep unimpaired its material rights thereunder; (ii) promptly notify Lender of
any material default under the Property Documents of which it is aware; (iii)
promptly deliver to Lender a copy of each financial statement, business plan,
capital expenditures plan, notice, report and estimate received by it under the
Property Documents; (iv) enforce the performance and observance of all of the
covenants and agreements required to be performed and/or observed under the
Property Documents in a commercially reasonable manner; (v) use commercially
reasonable efforts to cause the Property to be operated, in all material
respects, in accordance with the Property Documents; and (vi) not, without the
prior written consent of Lender, (A) enter into any new Property Document or
execute modifications to any existing Property Documents, (B) surrender,
terminate or cancel the Property Documents, (C) reduce or consent to the
reduction of the term of the Property Documents, (D) increase or consent to the
increase of the amount of any charges under the Property Documents, (E)
otherwise modify, change, supplement, alter or amend, or waive or release any
of its rights and remedies under, the Property Documents in any material
respect or (F) following the occurrence and during the continuance of an Event
of Default, exercise any rights, make any decisions, grant any approvals or
otherwise take any action under the Property Documents. 

          Section
5.27     Zoning. Without the prior
written consent of Lender, Borrower shall not initiate or consent to (a) any
change, modification or alteration of the existing access to the 

55

Property; or (b) any change in any private restrictive
covenant, replat, easement, zoning status or Law or other public or private
restriction, limiting or defining the uses which may be made of the Property.
If under applicable zoning provisions the use of the Property is or shall
become a nonconforming use, Borrower will not cause or permit such
nonconforming use to be discontinued or abandoned without the prior written
consent of Lender. 

          Section
5.28    Name, Identity, Structure, or Principal Place
of Business. Borrower shall not change its name, identity
(including its trade name or names), or principal place of business set forth
in the introductory paragraph of this Agreement, without, in each case, first
giving Lender thirty (30) days prior written notice. Borrower shall not change
its corporate, partnership or other structure, or the place of its
organization, without, in each case, the prior written consent of Lender. Upon
Lender’s request, Borrower shall execute and deliver additional financing
statements, security agreements and other instruments which may be necessary to
effectively evidence or perfect Lender’s security interest in the Property as a
result of such change of principal place of business or place of organization. 

          Section
5.29    ERISA. 

                    (a)          Borrower
shall not engage in any Prohibited Transaction or Prohibited Governmental
Transactions subjecting Lender to liability for a violation of ERISA, the Code,
a state statute or other similar Law. 

                    (b)          Borrower
further covenants and agrees to deliver to Lender such certifications or other
evidence from time to time throughout the term of the Loan, as requested by
Lender, that (i) Borrower is not and does not maintain a Plan or a Governmental
Plan, (ii) Borrower is not engaging in a Prohibited Transaction or any
Prohibited Governmental Transactions; and (iii) one or more of the following
circumstances is true: 

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

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

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

VI.     TRANSFERS

          Section
6.1     Borrower Acknowledgement.
Borrower acknowledges that Lender has examined and relied on the
creditworthiness and experience of Borrower and its stockholders, general
partners, members and principals in owning and operating properties such as the
Property in agreeing to make the Loan, and will continue to rely on Borrower’s
ownership of the Property as a means of maintaining the value of the Property
as security for repayment of the Debt. Borrower acknowledges that Lender has a
valid interest in maintaining the value of the 

56

Property so as to ensure that, should Borrower default
in the repayment of the Debt, Lender can recover the Debt by a sale of the
Property. 

          Section
6.2     Prohibition on Transfers.
Without Lender’s prior written consent which may be withheld in Lender’s sole
discretion, Borrower shall not directly or indirectly permit or allow any
Transfer to be undertaken or cause any Transfer to occur, other than a Permitted
Transfer. Notwithstanding the foregoing, Lender shall not unreasonably withhold
its consent to a Transfer of the Property in its entirety to any Transferee,
and an assumption of the Loan by any Transferee, provided that each of the
following terms and conditions are satisfied: 

                    (a)          Lender
shall receive Borrower’s written request for a Transfer at least sixty (60)
days prior to the proposed date of closing of such Transfer; 

                    (b)          The
date of closing of such Transfer is on a date other than during the period that
is sixty (60) days prior to the anticipated closing date of a Securitization
and the period that is sixty (60) days after the actual closing date of a
Securitization; 

                    (c)          No
Default or Event of Default has occurred and is continuing under this
Agreement, the Security Instrument, the Note or the other Loan Documents; 

                    (d)          Borrower
or Transferee shall pay any and all reasonable out-of-pocket costs incurred in
connection with the transfer (including, without limitation, Lender’s
reasonable attorneys’ fees and disbursements, third party report fees, all fees
and expenses of the Rating Agencies and their counsel, and all recording fees,
transfer taxes, title insurance premiums and mortgage and intangible taxes),
regardless of whether the transfer is consummated; 

                    (e)          The
identity, experience (including, without limitation, demonstrated expertise in
owning and operating properties similar in location, size, class and operation
to the Property), financial condition, creditworthiness (including, without
limitation, no history of any Bankruptcy Action within the preceding 10 years,
no pending regulatory action or litigation and no existing defaults under any
other permitted indebtedness), single purpose nature and bankruptcy remoteness
of the transferee (“Transferee”)
shall be satisfactory to Lender; 

                    (f)          The
identity, experience (including, without limitation, demonstrated expertise in
owning and operating properties similar in location, size, class and operation
to the Property), financial condition and creditworthiness (including, without
limitation, no history of any Bankruptcy Action within the preceding 10 years)
of the sponsor(s) or principals(s) of Transferee and of any party proposed to
become a substitute Guarantor, as evidenced by financial statements and other
information requested by Lender, shall be satisfactory to Lender; 

                    (g)          Transferee,
the sponsor(s) or principal(s) of Transferee, and any party approved by Lender
as set forth above to become a substitute Guarantor shall comply with the
provisions of Section
5.21 hereof; 

                    (h)          The
organizational documents of the Transferee and its sponsor(s) or principal(s)
shall be in form and substance satisfactory to Lender; 

57

                    (i)          Transferee
shall assume all of the obligations of Borrower under the Loan Documents, and
any party approved by Lender as set forth in subsection (f) above to become a
substitute Guarantor shall assume all of the obligations of each Guarantor
under the Guaranty and the Environmental Indemnity, in each case pursuant to
documentation required by Lender and by the Rating Agencies, including, without
limitation, an assumption agreement in form and substance satisfactory to
Lender and the Rating Agencies; 

                    (j)          The
Property shall be managed by a property manager with sufficient experience in
the management of properties similar to the Property and otherwise satisfactory
to Lender in all respects following such transfer, and such manager shall enter
into an assignment of management agreement and subordination of management fees
satisfactory to Lender; 

                    (k)          If
required by Lender, receipt of Rating Agency Confirmation and evidence that the
proposed Transfer will not result in a Property Document Event; 

                    (l)          Transferee
shall deliver, at Lender’s election, either a new title insurance policy or one
or more endorsements, acceptable to Lender, to the existing Title Insurance
Policy insuring the Security Instrument as modified by the assumption
agreement, as a valid first Lien on the Property and naming Transferee as owner
of the Property, which endorsement shall insure that as of the recording of the
assumption agreement the Property is not subject to any additional exceptions
or Liens other than Permitted Encumbrances, and otherwise in form and substance
satisfactory to Lender; 

                    (m)          Borrower
shall pay to Lender a non-refundable application fee of $10,000.00, together
with an assumption fee equal to one percent (1.0%) of the outstanding principal
balance of the Loan; 

                    (n)          Transferee
shall deliver to Lender each of the following opinions: (i) if the Loan or any
interest therein is included in a Securitization and if required by Lender, a
REMIC Opinion; and (ii) if requested by the Rating Agencies, an opinion of
counsel in form and substance and delivered by counsel satisfactory to Lender
and the Rating Agencies that the Transfer will not constitute a fraudulent
conveyance; (iii) if the Loan or any interest therein has been included in a
Securitization, an Additional Insolvency Opinion; and (iv) any other applicable opinions required by Lender
and the Rating Agencies, in form and substance and delivered by counsel
satisfactory to Lender and the Rating Agencies; and 

                    (o)          Borrower’s
obligations under the contract of sale pursuant to which the Transfer is
proposed to occur shall expressly be subject to the satisfaction of the terms
and conditions of this Section
6.2. Upon satisfaction of the foregoing conditions, Lender shall
release Borrower and Guarantor from all liability and obligations under the
Loan Documents arising from and after the closing of the Transfer and
assumption of the Loan, including, but not limited to, repayment of the Loan,
but excepting, without limitation (i) any environmental or other damage to the
Property occurring prior to the closing of the Transfer, (ii) any obligations
arising from the purchase and sale agreement relating to the Transfer, (iii)
any liability related to or arising from Borrower’s acts or omissions occurring
prior to the closing of the Transfer, and (iv) any liability related to or
arising from fraudulent or tortious conduct, including intentional
misrepresentation of financial data presented to Lender. In all cases,
Transferee, Borrower, 

58

Guarantor and any replacement Guarantor, rather than
Lender, shall bear the burden of proof on the issue of the time at which an act
or event first occurred or an obligation first arose, which is the subject of
claimed liability under any of the Loan Documents. 

          Any
Transfer made in violation of this Agreement shall be null and void ab initio. If Borrower complies with the
foregoing conditions to sale, assignment, or other transfer of the Property,
the number of such transfers made in accordance with this Section 6.2 shall be
unlimited. A consent by Lender with respect to a transfer of the Property in
its entirety to, and the related assumption of the Loan by, a Transferee
pursuant to this Section
6.2 shall not be construed to be a waiver of the right of Lender
to consent to any subsequent transfer of the Property. 

          Section
6.3     Sanctioned Persons.
Notwithstanding anything to the contrary contained in this Article VI, no
transfer of the Property, or of any interest therein, and no transfer of any
interest in a Restricted Party (whether or not such transfer shall constitute a
Transfer) shall be made to any Sanctioned Person. 

          Section
6.4     Transfer Documentation. Upon
the effective date of any Transfer, Borrower shall deliver to Lender copies of
all documents evidencing any such transfer and shall provide Lender an updated
organizational structure chart, certified pursuant to an Officer’s Certificate
as true, complete and correct. 

          Section
6.5     No Impairment. Lender shall
not be required to demonstrate any actual impairment of its security or any
increased risk of default hereunder in order to declare the Debt immediately
due and payable upon any Transfer, which is not a Permitted Transfer,
consummated without Lender’s prior written consent or upon any Permitted
Transfer not consummated in accordance with the terms and conditions of this
Agreement. This Section
6.5 shall apply to every Transfer regardless of whether
voluntary or not, or whether or not Lender has consented to any previous
Transfer. 

          Section
6.6     Death or Incapacity of Individual Guarantor.
Within sixty (60) days after the death, incarceration, indictment or legal
incapacity of any Guarantor who is an individual, Borrower shall cause a
substitute Guarantor approved by Lender to deliver to Lender a substitute
Guaranty and Environmental Indemnity in form and substance identical to the
Guaranty and Environmental Indemnity delivered on the Closing Date, a legal
opinion with respect to the enforceability of such Guaranty and Environmental
Indemnity in form and substance similar to the enforceability opinion delivered
on the Closing Date and otherwise satisfactory to Lender and such other certificates,
opinions, documents or instruments as Lender may require, including but not
limited to, if the Loan or any interest therein has been included in a
Securitization, an Additional Insolvency Opinion. Lender’s approval of any
proposed substitute Guarantor shall be made in Lender’s sole and absolute
discretion, and can be based on any number of factors, including, without
limitation, Rating Agency Confirmation if required by Lender, receipt of a
credit report and credit check and other due diligence with respect to the
substitute Guarantor satisfactory to Lender. 

          Section
6.7     Lender’s Rights. Lender
reserves the right to condition the consent to any Transfer requested hereunder
that is not a Permitted Transfer (a “Prohibited Transfer”) 

59

upon (a) a modification of the terms hereof and on
assumption of this Agreement and the other Loan Documents as so modified by the
proposed Prohibited Transfer; (b) payment of a transfer fee of 1% of
outstanding principal balance of the Loan and all of Lender’s expenses incurred
in connection with such Prohibited Transfer; (c) receipt of a Rating Agency
Confirmation with respect to the Prohibited Transfer; (d) the proposed
transferee’s continued compliance with the covenants set forth in this Agreement,
including, without limitation, the covenants in Article VIII; (e) receipt of a
substantive non-consolidation opinion with respect to the Prohibited Transfer;
and/or (f) such other conditions and/or legal opinions as Lender shall
determine in its sole discretion to be in the interest of Lender. All expenses
incurred by Lender shall be payable by Borrower whether or not Lender consents
to the Prohibited Transfer. 

VII.   INSURANCE;
CASUALTY; CONDEMNATION; RESTORATION 

          Section
7.1     Insurance. 

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

                                  (i)          insurance
with respect to the Improvements and the Personal Property insuring against any
peril now or hereafter included within the classification “Risk of Direct
Physical Loss” or “Special Cause of Loss” (including, without limitation, fire,
lighting, windstorm, hail, and terrorism), in each case, (A) in an amount equal
to 100% of the “Full Replacement Cost,” which for purposes of this Agreement
shall mean actual replacement value (exclusive of costs of excavations,
foundations, underground utilities and footings) on a replacement cost value
basis; (B) containing an agreed amount endorsement with respect to the
Improvements and Personal Property waiving all co-insurance provisions; (C)
providing for no deductible in excess of 5% of the net cash flow of the
Property up to a maximum deductible of $50,000 (except when a separate
wind-loss deductible applies, then the amount must not exceed 5% of the
replacement cost value of the Property); (D) if any of the Improvements or the
use of the Property shall at any time constitute legal non-conforming
structures or uses, the policy of insurance must include ordinance and law
protection including replacement of undamaged building value, increased cost of
repairs or reconstruction, or additional demolition and removal costs, in amounts
determined by Lender. The Full Replacement Cost shall be redetermined from time
to time at the request of Lender (but no more often than one time in any
calendar year) by an appraiser or contractor designated and paid by Borrower
and approved by Lender, or by an engineer or appraiser in the regular employ of
the insurer. After the first appraisal, additional appraisals may be based on
construction cost indices customarily employed in the trade. No omission on the
part of Lender to request any such ascertainment shall relieve Borrower of any
of its obligations under this Section 7.1(a)(i); 

                                  (ii)         commercial
general liability insurance against claims for personal injury, bodily injury,
death or property damage occurring upon, in or about the Property, such
insurance (A) to be on the so-called “occurrence” form with a combined single
limit of not less than $1,000,000 per occurrence and $2,000,000 in the
aggregate, per location; (B) to continue at not less than the aforesaid limit
until required to be changed by Lender in writing by reason of changed economic
conditions making such protection inadequate; and (C) to cover at least the
following hazards: (1) premises and operations; (2) products and completed 

60

operations on an “if any” basis; (3) independent
contractors; (4) blanket contractual liability for all written and oral
contracts; (5) contractual liability covering the indemnities contained in
Article 10 of the Security Instrument to the extent the same is available; (6)
acts of terrorism and similar acts of sabotage. If Borrower is the holder of a
liquor license with respect to the Property, commercial general liability
insurance shall include “Dram Shop” or other liquor liability coverage in
amounts equal to or greater than the general liability requirements set forth
above. If a party other than Borrower is the holder of a liquor license with
respect to all or any portion of the Property, Borrower shall require the
holder of such liquor license to maintain the foregoing Policy and to name
Borrower and Lender as an additional insured thereunder; 

                                  
(iii)          business
interruption and/or loss of rents insurance (A) with loss payable to Lender;
(B) covering all risks required to be covered by the insurance provided for in Section 7.1(a)(i);
(C) in an amount equal to 100% of the projected gross income from the Property
(on an actual loss sustained basis, as reduced to reflect expenses not incurred
during a Restoration Period) for a period continuing until the Restoration of
the Property is completed; the amount of such business interruption and/or loss
of rents insurance shall be determined prior to the Closing Date and at least
once each year thereafter based on Lender’s determination of the projected
gross income from the Property (on an actual loss sustained basis, as reduced
to reflect expenses not incurred during a Restoration Period) for an eighteen
(18) month period (and Lender reserves the right to require twenty-four (24) months);
and (D) containing an extended period of indemnity endorsement which provides
that after the physical loss to the Improvements and the Personal Property has
been repaired, the continued loss of income will be insured until such income
either returns to the same level it was at prior to the loss, or the expiration
of twelve (12) months from the date that the Property is repaired or replaced
and operations are resumed, whichever first occurs, and notwithstanding that
the policy may expire prior to the end of such period. All insurance proceeds
payable to Lender, as Lender Loss Payee, pursuant to this Section 7.1(a)(iii)
(“Business Interruption
Insurance Proceeds”) shall be deposited by Lender into the
Business Interruption Insurance Account to be held by Lender and disbursed in
accordance with Section
9.3 hereof; 

                                  (iv)         at
all times during which structural construction, repairs or alterations are
being made with respect to the Improvements (A) owner’s contingent or
protective liability insurance covering claims not covered by or under the
terms or provisions of the insurance provided for in Section 7.1(a)(ii);
(B) workmen’s compensation insurance, builder’s risk, and public liability
insurance and other insurance to the extent required under applicable Law in
connection with any Required Repair; and (C) the insurance provided for in Section 7.1(a)(i)
shall be written in a so-called builder’s risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against pursuant to Section 7.1(a)(i),
(3) shall include permission to occupy the Property, and (4) shall contain an
agreed amount endorsement waiving co-insurance provisions; 

                                  (v)          workers’
compensation, subject to the statutory limits of the State, and employer’s
liability insurance with a limit of at least $500,000 per accident and per
disease per employee, and $500,000 for disease aggregate in respect of any work
or operations on or about the Property, or in connection with the Property or
its operation (if applicable); 

61

                                  (vi)          comprehensive
boiler and machinery / mechanical breakdown insurance, if applicable, in
amounts as shall be required by Lender on terms consistent with the commercial
property insurance policy required under Section 7.1(a)(i) hereof; 

                                  (vii)        if
any portion of the Improvements is at any time located in an area identified by
the Secretary of Housing and Urban Development or any successor thereto as an
area having special flood hazards pursuant to the National Flood Insurance Act
of 1968, the Flood Disaster Protection Act of 1973 or the National Flood
Insurance Reform Act of 1994, as each may be amended, or any successor Law (the
“Flood Insurance Acts”),
flood hazard insurance of the following types and in the following amounts: (A)
coverage under Policies issued pursuant to the Flood Insurance Acts (the “Flood Insurance Policies”)
in an amount equal to the maximum limit of coverage available for the Property
under the Flood Insurance Acts, subject only to customary deductibles under
such Policies and (B) coverage under supplemental private Policies in an
amount, which when added to the coverage provided under the Flood Insurance
Policies, is not less than the Loan amount; 

                                  (viii)       if
the Property is located in seismic zones 3 or 4, earthquake insurance in
amounts not less than 150% of the scenario expected loss of the Property as
determined by an architectural or engineering consultant selected by Lender,
provided that the insurance pursuant to this Section 7.1(a)(viii) shall be on terms
consistent with the insurance required under Section 7.1(a)(i) hereof; 

                                  (ix)        motor
vehicle liability coverage for all owned (if any) and non-owned vehicles,
including rented and leased vehicles utilized by Borrower in the service or
support of the Property containing minimum limits per occurrence, including
umbrella coverage, of $1,000,000; 

                                  (x)         Umbrella
or Excess Liability insurance in an amount no less than $35,000,000 each
occurrence and in the aggregated written in excess of the insurance required in
(ii), (v) and (ix) in terms consistent with those subsections; and 

                                  (xi)        such
other insurance and in such amounts required by any Property Document, as
Lender from time to time may request against such other insurable hazards which
may be required to protect Lender’s interests. 

                    (b)          All
insurance provided for in Section
7.1(a) hereof shall be obtained under valid and enforceable
policies (the “Policies”
or in the singular, the “Policy”),
in such forms and, from time to time after the date hereof, in such amounts as
may be satisfactory to Lender, issued by financially sound and responsible
insurance companies authorized to do business in the State and approved by
Lender, and companies providing coverage shall comply with the following
requirements: 

                                  (i)          Companies
providing coverage must be covered by an insurance company having a claims
paying ability/financial strength rating A-, Class VIII or better by Best’s Key
Rating Guide, as well as a rating of A- or higher from Standard & Poor’s or
the equivalent rating from Fitch or Moody’s. Companies providing coverage for
loans of $20,000,000 or more must be covered by an insurance company having a
claims paying 

62

ability/financial strength rating of A, Class VIII by
Best’s Key Rating Guide as well as a rating of A or higher from Standard &
Poor’s, or the equivalent rating, from either Fitch or Moody’s. Earthquake (if
required) must be covered by an insurance company having a rating of A, Class
VIII by Best’s Key Rating Guide or a rating of A3 (or equivalent) from Moody’s
or A- by Standard & Poor’s. Borrower shall provide to Lender copies or
other evidence satisfactory to Lender of all insurance required to be
maintained pursuant to Section
7.1(a) hereof. 

                                  (ii)          Notwithstanding
the foregoing, if Borrower elects to have its insurance coverage provided by a
syndicate of insurers or provided pursuant to a layered insurance program,
then, if such syndicate or layered insurance program consists of five (5) or
more insurers, (A) at least sixty percent (60%) of the insurance coverage (or
seventy-five percent (75%) if such syndicate or layered insurance program consists
of four (4) or fewer members) and one hundred (100%) of the first layer of such
insurance coverage shall be provided by Qualified Insurers and (B) the
remaining forty percent (40%) of the insurance coverage (or the remaining
twenty-five percent (25%) if such syndicate consists of four (4) or fewer
members) shall be provided by insurance companies having a rating of “BBB” or
better by S&P and “Baa2” or better by Moody’s, if Moody’s is rating the
Securities and rates the insurance companies or, if not rated by S&P or by
Moody’s, then by insurance companies having a rating of A-, Class VIII by
Best’s Key Rating Guide. 

                    (c)          Not
less than ten (10) days prior to the expiration dates of the Policies
theretofore furnished to Lender, Borrower shall deliver evidence satisfactory
to Lender of the renewal of all of the Policies and evidence satisfactory to
Lender of payment of the premiums or assessments due thereunder (the “Insurance Premiums”).

                    (d)          Borrower
shall not obtain (i) any umbrella or blanket liability or casualty Policy
unless, in each case, such Policy is approved in advance in writing by Lender
and Lender’s interest is included therein as provided in this Agreement and
such Policy is issued by a Qualified Insurer or (ii) separate insurance
concurrent in form or contributing in the event of loss with that required in Section 7.1(a) hereof
to be furnished by, or which may be required to be furnished by, Borrower. In
the event Borrower obtains separate insurance or an umbrella or a blanket
policy, Borrower shall notify Lender of the same and shall cause certified
copies of each Policy to be delivered as required in Section 7.1(a)
hereof. Any blanket insurance Policy shall specifically allocate to the Property
a value that is at least equal to the amount of coverage from time to time
required hereunder and shall otherwise provide the same protection as would a
separate Policy insuring only the Property in compliance with the provisions of
Section 7.1(a) hereof.
Notwithstanding Lender’s approval of any umbrella or blanket liability or
casualty Policy hereunder, Lender reserves the right, in its reasonable good
faith business judgment, to require Borrower to obtain a separate Policy or
equivalent risk transfer alternative in compliance with this Section 7.1. 

                    (e)          All
Policies provided for or contemplated by Section 7.1(a) hereof shall name Borrower as
the Named Insured and, except for the Policy referenced in Section 7.1(a)(v) hereof,
shall name Lender as an additional insured on a form acceptable to Lender, and
in the case of property damage, boiler and machinery, earthquake and flood
insurance, shall contain a non-contributing standard mortgagee clause
acceptable to Lender, in favor of Lender, providing that the loss thereunder
shall be payable to Lender. 

63

                    (f)          All
Policies provided for in Section
7.1(a) hereof shall contain clauses or endorsements to the
effect that: 

                                  (i)          no
act or negligence of Borrower, or anyone acting for Borrower, or any tenant
under any Lease or other occupant, or failure to comply with the provisions of
any Policy which might otherwise result in a forfeiture of the insurance or any
part thereof, shall in any way affect the validity or enforceability of the
insurance insofar as Lender is concerned; and 

                                  (ii)        the
Policy shall not be materially changed (other than to increase the coverage
provided thereby) or cancelled (whether voluntarily, involuntarily, or as a
result of non-renewal) without at least thirty (30) days’ written notice to
Lender and any other party named therein as an insured. Notwithstanding the
foregoing, if liability insurance is provided by a separate Policy, then the
foregoing endorsement shall not be required and in such event Borrower (and not
the insurer) shall give Lender the notice required by this subsection. 

                    (g)          Upon
five (5) Business Days written request by Lender, Borrower shall provide
certified copies of all Policies required hereunder. 

                    (h)          If
at any time Lender is not in receipt of written evidence, in the form of a
Policy or Acord Certificate and supporting documentation acceptable to Lender,
that all insurance required hereunder is in full force and effect, Lender shall
have the right, but not the obligation, without notice to Borrower to take such
action as Lender deems necessary to protect its interest in the Property,
including, without limitation, the obtaining of such insurance coverage as
Lender in its sole discretion deems appropriate, and all expenses (including
reasonable attorneys’ fees) incurred by Lender in connection with such action
or in obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and until paid shall be secured by the Security
Instrument and shall bear interest at the Default Rate. 

                    (i)          In
the event of a foreclosure of the Security Instrument, or other transfer of
title to the Property in extinguishment in whole or in part of the Debt, all
right, title and interest of Borrower in and to the Policies that are not
blanket Policies then in force and all proceeds payable thereunder shall
thereupon vest in the purchaser at such foreclosure or Lender or other
transferee in the event of such other transfer of title. 

                    (j)          If
insurance for earthquake or special hazards is obtained by Borrower in its sole
discretion and without requirement of Lender, then Borrower, when obtaining
such insurance coverage, shall meet the insurance requirements hereof except as
to matters requiring Lender’s further approval, and such insurance coverage:
(A) shall be within the meaning of a “Policy” or “Policies”; and (B) shall be
for the benefit of Lender and all proceeds thereof constitute additional
security for the Debt, and Lender shall have all rights with respect to and be
entitled to receive all proceeds in the same manner it would receive any
Insurance Proceeds in the event the Property is damaged or destroyed by a
Casualty or by any risk or loss insured against. 

64

                    (k)          Any
failure by Lender to insist on full compliance with all of the above insurance
requirements at closing does not constitute a waiver of Lender’s right to
subsequently require full compliance with these requirements. 

          TEXAS
FINANCE CODE SECTION 307.052 COLLATERAL PROTECTION INSURANCE NOTICE: (A)
BORROWER IS REQUIRED TO (i) KEEP THE PROPERTY INSURED AGAINST DAMAGE IN THE
AMOUNT SPECIFIED HEREIN; (ii) PURCHASE THE INSURANCE FROM AN INSURER THAT IS
AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES
INSURER OR OTHERWISE AS PROVIDED HEREIN; AND (iii) NAME LENDER AS THE PERSON TO
BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS AS PROVIDED HEREIN; (B) SUBJECT
TO THE PROVISIONS HEREOF, BORROWER MUST, IF REQUIRED BY LENDER, DELIVER TO
LENDER A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS; AND (C)
SUBJECT TO THE PROVISIONS HEREOF, IF BORROWER FAILS TO MEET ANY REQUIREMENT
LISTED IN THE FOREGOING SUBPARTS (A) OR (B), LENDER MAY OBTAIN COLLATERAL
PROTECTION INSURANCE ON BEHALF OF BORROWER AT BORROWER’S EXPENSE. 

          Section
7.2     Casualty. If the Property shall
be damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower
shall give prompt notice of such damage to Lender and shall promptly commence
and diligently prosecute the completion of the repair and restoration of the
Property as nearly as possible to the condition the Property was in immediately
prior to such Casualty, with such alterations as may be approved by Lender (a “Restoration”) and
otherwise in accordance with Section 7.4 hereof. Borrower shall pay all costs of such
Restoration whether or not such costs are covered by insurance. Lender may, but
shall not be obligated to, make proof of loss if not made promptly by Borrower.
Lender shall have the right, at its option, to participate in any settlement
discussions with respect to any claims under any Policy in which the Net
Proceeds or the costs of completing Restoration are equal to or greater than
One Hundred Fifty Thousand and No/100 Dollars ($150,000.00) and Borrower shall
promptly deliver to Lender all instruments required by Lender to permit such
participation. Lender shall have the right, at its option, to approve the final
settlement with respect to any Casualty in which Net Proceeds or the costs to
complete the Restoration are equal to or greater than the Restoration
Threshold. If a Default or an Event of Default exists, Lender shall have the
exclusive right, at its option, to settle or adjust any claims made under the
Policies in the event of a Casualty. 

          Section
7.3     Condemnation. Borrower shall
promptly give Lender notice of the actual or threatened commencement of any
proceeding for the Condemnation of all or any part of the Property and shall
deliver to Lender copies of any and all papers served in connection with such
proceedings. Lender may participate in any such proceedings, and Borrower shall
promptly deliver to Lender all instruments requested by it to permit such
participation. Lender shall have the right, at its option, to approve the final
settlement with respect to any Condemnation in which Net Proceeds or the costs
to complete the Restoration are equal to or greater than the Restoration
Threshold. If a Default or an Event of Default exists, Lender shall have the
exclusive right, at its option, to settle any Award in the event of a
Condemnation. Borrower shall, at its expense, 

65

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

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

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

                    (b)
          Subject to Section 7.4(d)
hereof, if the Net Proceeds are equal to or greater than the Restoration
Threshold or the cost of completing the Restoration is equal to or greater than
the Restoration Threshold, then Lender shall make the Net Proceeds available
for the Restoration in accordance with the provisions of this Section 7.4. The term
“Net Proceeds” shall mean: (1) the net amount of all insurance proceeds payable
to or for the benefit of Borrower as a result of a Casualty to the Property,
after deduction of Lender’s costs and expenses (including, but not limited to,
reasonable attorneys’ fees), if any, in collecting such insurance proceeds (“Insurance Proceeds”),
or (2) the net amount of the Award, after deduction of Lender’s costs and
expenses (including, but not limited to, attorneys’ fees and expenses), if any,
in collecting such Award (“Condemnation
Proceeds”), whichever the case may be. 

                                    (i)
           subject to Section 7.4(d)
hereof, the Net Proceeds shall be made available to Borrower for Restoration
provided that each of the following conditions are met: 

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

                                    (B)
          (1) in the event
the Net Proceeds are Insurance Proceeds, less than thirty percent (30%) of each
of the (i) fair market value of the Property as reasonably determined by Lender
and (ii) rentable area of the Improvements has been damaged, destroyed or
rendered 

66

unusable as a result of
such Casualty or (2) in the event the Net Proceeds are Condemnation Proceeds,
less than fifteen percent (15%) of each of the (i) fair market value of the
Property as reasonably determined by Lender and (ii) rentable area of the
Property is taken, and such land is located along the perimeter or periphery of
the Property, and no portion of the Improvements is located on such land; 

                              (C)
          except for
Residential Leases, Leases demising in the aggregate a percentage amount equal
to or greater than eighty percent (80%) of the total rentable space in the
Property which has been demised under executed and delivered Leases in effect
as of the date of the occurrence of such Casualty or Condemnation, whichever
the case may be, shall remain in full force and effect during and after the
completion of the Restoration, notwithstanding the occurrence of any such
Casualty or Condemnation, whichever the case may be, and Borrower furnishes to
Lender evidence satisfactory to Lender that all tenants under Leases shall
continue to operate their respective space at the Property after the completion
of the Restoration without rent abatement; 

                              (D)
          Borrower shall
commence the Restoration as soon as reasonably practicable (but in no event
later than sixty (60) days after such Casualty or Condemnation, whichever the
case may be, occurs) and shall diligently pursue the same to satisfactory
completion in compliance with all applicable Laws, including, without
limitation, all applicable Environmental Laws, and all Property Documents; 

                              (E)
          Lender shall be
satisfied that any operating deficits, including all scheduled payments of principal
and interest under the Note, which will be incurred with respect to the
Property as a result of the occurrence of any such Casualty or Condemnation,
whichever the case may be, will be covered out of (1) the Net Proceeds, (2) the
insurance coverage referred to in Section 7.1(a)(iii) or (3) by other funds of
Borrower; 

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

                              (G)
          Lender shall be
satisfied that the Restoration will be completed on or before the earliest to
occur of (1) six (6) months prior to the Maturity Date, (2) twelve (12) months
after the occurrence of such Casualty or Condemnation, or (3) the earliest date
required for such completion under the terms of any Property Document and all
Leases which are required in accordance with the provisions of this Section 7.4(b) to
remain in effect subsequent to the occurrence of such Casualty or Condemnation
and the completion of the Restoration, or (4) such time as may be required
under Applicable Law, in order to repair and restore the Property to the
condition it was in immediately prior to such Casualty or Condemnation, or (5)
the expiration of the insurance coverage referred to in Section 7.1(a)(iii); 

                              (H)
          Borrower and each
Guarantor shall execute and deliver to Lender a completion guaranty in form and
substance satisfactory to Lender pursuant to the provisions of which Borrower
and each Guarantor shall jointly and severally guaranty to Lender the Lien-free

67

completion by Borrower of
the Restoration in accordance with the provisions of this Section 7.4(b); 

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

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

                              (K)         
such Casualty or Condemnation, as applicable, does not result in the total loss
of access to the Property or the Improvements; 

                              (L)          
Borrower shall deliver, or cause to be delivered, to Lender a signed detailed
budget approved in writing by Borrower’s architect or engineer stating the
entire cost of completing the Restoration, which budget shall be acceptable to
Lender; 

                              (M)
          the Net Proceeds
together with any Cash or Cash equivalent deposited by Borrower with Lender are
sufficient in Lender’s discretion to cover the cost of the Restoration; and 

                              (N)          
the Management Agreement in effect as of the date of the occurrence of such
Casualty or Condemnation, whichever the case may be, shall (1) remain in full
force and effect during the Restoration and shall not otherwise terminate as a
result of the Casualty or Condemnation or the Restoration or (2) if terminated,
shall have been replaced with a manager acceptable to Lender, prior to the
opening or reopening of the Property for business with the public. 

                              (ii)
          The Net Proceeds
shall be held by Lender and, until disbursed in accordance with the provisions
of this Section 7.4(b),
shall constitute additional security for the payment of the Debt and the
performance of the Other Obligations. Subject to Section 7.4(d) hereof, the Net Proceeds
(except for Insurance Proceeds from the insurance coverage referred to in Section 7.1(a)(iii))
shall be disbursed by Lender to, or as directed by, Borrower from time to time
during the course of the Restoration, upon receipt of evidence satisfactory to
Lender that (A) all materials installed and work and labor performed (except to
the extent that they are to be paid for out of the requested disbursement) in
connection with the Restoration have been paid for in full, and (B) there exist
no notices of pendency, stop orders, mechanic’s or materialmen’s Liens or
notices of intention to file same, or any other Liens or encumbrances of any
nature whatsoever on the Property which have not either been fully bonded to
the satisfaction of Lender and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company issuing the Title
Insurance Policy. 

                              (iii)          
All plans and specifications required in connection with the Restoration shall
be subject to prior review and acceptance in all respects by Lender and by an
independent consulting engineer selected by Lender (the “Casualty Consultant”).
Lender shall have the use of the plans and specifications and all Licenses
required or obtained in connection with the Restoration. The identity of the
contractors, subcontractors and materialmen engaged 

68

in the Restoration as
well as the contracts under which they have been engaged, shall be subject to
prior review and acceptance by Lender and the Casualty Consultant. All costs
and expenses incurred by Lender in connection with making the Net Proceeds
available for the Restoration including, without limitation, attorneys’ fees
and disbursements and the Casualty Consultant’s fees, shall be paid by
Borrower. 

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

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

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

69

                              (vii)
          Subject to Section 7.4(d)
hereof, the excess, if any, of the Net Proceeds and the remaining balance, if
any, of the Net Proceeds Deficiency deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 7.4(b), and the receipt by Lender of
evidence satisfactory to Lender that all costs incurred in connection with the
Restoration have been paid in full, and provided no Default shall have occurred
and shall be continuing under the Note, this Agreement or any of the other Loan
Documents shall be remitted by Lender to Borrower. 

                    (c)
          All Net Proceeds
not required (i) to be made available for the Restoration or (ii) to be
returned to Borrower as excess Net Proceeds pursuant to Section 7.4(b)(vii)
may be retained and applied by Lender toward the payment of the Debt whether or
not then due and payable in such order, priority and proportions as Lender in
its sole discretion shall deem proper, or, at the discretion of Lender, the
same may be paid, either in whole or in part, to Borrower for such purposes as
Lender shall approve, in its discretion. If Lender shall receive and retain Net
Proceeds, the Lien of the Security Instrument and the other Loan Documents
shall be reduced only by the amount thereof received and retained by Lender and
actually applied by Lender in reduction of the Debt. 

                    
(d)           Notwithstanding
anything to the contrary contained in Section 7.4 hereof, in the event that the
Loan or any interest therein is included in a Securitization, and if
immediately following the release of the Property from the Lien of the Security
Instrument as a result of any Condemnation, the Real Property Value to Loan
Ratio is not at least eighty percent (80%), then all of the Net Proceeds
realized by Borrower for purposes of computing gain or loss under Section 1001
of the Code as a result of such Condemnation shall be applied to the principal
amount of the Debt if and to the extent necessary for the Loan to remain a
“qualified mortgage” in accordance with the requirements of Section
860(G)(a)(3) of the Code, and any then applicable U.S. Department of Treasury
regulations or revenue procedures issued pursuant thereto, including, without
limitation, to the extent then applicable to any REMIC Trust, Revenue Procedure
2010-30. In Lender’s discretion, Lender may require a REMIC Opinion in
connection with any such Condemnation. 

VIII.
SINGLE PURPOSE ENTITY/SEPARATENESS PROVISIONS 

          Section
8.1     Single Purpose Entity/Separateness.

                    (a)
          Borrower represents
and warrants, and covenants until the Debt has been paid and satisfied in full,
that Borrower: 

                                   (i)
          has not engaged and
will not engage in any business or activity other than the ownership, operation
and maintenance of the Property, and activities incidental thereto; 

                                   (ii)
          has not acquired or
owned and will not acquire or own any assets other than (A) the Property, and
(B) such incidental Personal Property as may be necessary for the ownership,
leasing, maintenance and operation of the Property; 

70

                              (iii)
          has not and will
not merge into or consolidate with any Person, or dissolve, terminate,
liquidate in whole or in part, transfer or otherwise dispose of all or
substantially all of its assets or change its legal structure; 

                              (iv)
          has not and will
not fail to observe all organizational formalities, or fail to preserve its
existence as an entity duly organized, validly existing and in good standing
(if applicable) under the applicable Legal Requirements of the jurisdiction of
its organization or formation, or without Lender’s prior written consent which
Lender may withhold in its sole and absolute discretion, amend, modify,
terminate or fail to comply with the provisions of its organizational
documents; 

                              (v)
           has not owned and
will not own any subsidiary, or make any investment in, any Person (other than,
with respect to any SPE Component Entity, in Borrower); 

                              (vi)
          has not and will
not commingle its funds or assets with the funds or assets of any other Person;

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

                              (viii)
        has not failed and will not fail to maintain all of its books, records,
financial statements and bank accounts separate from those of any other Person
(including, without limitation, any Affiliates); has not failed and will not
fail to maintain its books, records, resolutions and agreements as official
records. Borrower’s assets have not and will not be listed as assets on the
financial statement of any other Person unless (i) appropriate notation has
been and shall be made on such consolidated financial statements to indicate
the separateness of Borrower and such Affiliates and to indicate that
Borrower’s assets and credit are not available to satisfy the debts and other
obligations of such Affiliates or any other Person and (ii) such assets have
been and shall be listed on Borrower’s own separate balance sheet; 

                              (ix)
          has not entered
into and will not enter into any contract or agreement with any general
partner, member, shareholder, principal or Affiliate, except upon terms and
conditions that are intrinsically fair and substantially similar to those that
would be available on an arm’s-length basis with unaffiliated third parties; 

                              (x)
           has not maintained
and will not maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person; 

71

                              (xi)
            has not assumed or
guaranteed, and will not assume or guaranty the debts of any other Person, hold
itself out to be responsible for the debts of any other Person; has not
otherwise pledged and will not otherwise pledge its assets for the benefit of
any other Person or hold out its credit as being available to satisfy the
obligations of any other Person; 

                              (xii)
           has not made and
will not make any loans or advances to any Person; 

                              (xiii)
          has not failed and
will not fail to file its own tax returns (unless prohibited by applicable
Legal Requirements from doing so); 

                              (xiv)
          has not failed and
will not fail to (A) hold itself out to the public and identify itself, in each
case, as a legal entity separate and distinct from any other Person and not as
a division or part of any other Person, (B) conduct its business solely in its
own name, (C) hold its assets in its own name or (D) correct any known
misunderstanding regarding its separate identity; 

                              (xv)
          has not failed and
will not fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations (to the extent there exists sufficient
cash flow from the Property to do so); 

                              (xvi)
          without the prior
unanimous written consent of all of its partners or members, as applicable (a)
has not filed or consented to, and will not file or consent to, the filing of
any petition, either voluntary or involuntary, to take advantage of any
Creditors Rights Laws, (b) has not sought or consented to, and will not seek or
consent to, the appointment of a receiver, liquidator or any similar official,
(c) has not taken, and will not take, any non-commercially reasonable action
that might cause such entity to become insolvent, or (d) has not made and will
not make an assignment for the benefit of creditors; 

                              (xvii)
         has not failed and
will not fail to (a) allocate shared expenses (including, without limitation,
shared office space) or (b) use separate stationery, invoices and checks; 

                              (xviii)
       has not failed and
will not fail to (a) pay its own liabilities (including, without limitation,
salaries of its own employees) from its own funds or (b) maintain a sufficient
number of employees in light of its contemplated business operations (in each
case to the extent there exists sufficient cash flow from the Property to do
so); 

                              (xix)
         has not acquired
and will not acquire obligations or securities of its partners, members, shareholders
or other Affiliates, as applicable; 

                              (xx)
           has not identified
and will not identify its partners, members, shareholders or other Affiliates,
as applicable, as a division or part of it; or 

                              (xxi)
          has not violated
and will not violate or cause to be violated the assumptions made with respect
to Borrower and its principals in any Insolvency Opinion if required under this
Agreement or Additional Insolvency Opinion. 

72

                    (b)
          If Borrower is a
partnership or limited liability company (other than an Acceptable LLC), each
general partner (in the case of a partnership) and the sole managing member (in
the case of a limited liability company) of Borrower, as applicable, shall be a
corporation or an Acceptable LLC (each an “SPE Component Entity”) whose sole asset is
its interest in Borrower. Each SPE Component Entity (i) will at all times
comply with each of the covenants, terms and provisions contained in Sections 8.1(a)(iii)–(vi)
(inclusive) and Sections
(viii)–(xxi) (inclusive) and, if such SPE Component Entity is an
Acceptable LLC, Sections
8.1(c) and (d) hereof, as if such representation, warranty or
covenant was made directly by such SPE Component Entity; (ii) will not engage
in any business or activity other than owning an interest in Borrower; (iii)
will not acquire or own any assets other than its partnership, membership, or
other equity interest in Borrower; (iv) will at all times continue to own no
less than a 0.5% direct equity ownership interest in Borrower; (v) will not
incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation); and (vi) will cause Borrower to comply with the
provisions of this Section
8.1. 

                    (c)
          In the event
Borrower or the SPE Component Entity is an Acceptable LLC, the limited
liability company agreement of Borrower or the SPE Component Entity (as
applicable) (the “LLC
Agreement”) shall provide that (i) upon the occurrence of any
event that causes the last remaining member of Borrower or the SPE Component
Entity (as applicable) (“Member”)
to cease to be the member of Borrower or the SPE Component Entity (as
applicable) (other than (A) upon an assignment by Member of all of its limited
liability company interest in Borrower or the SPE Component Entity (as
applicable) and the admission of the transferee in accordance with the Loan
Documents and the LLC Agreement, or (B) the resignation of Member and the admission
of an additional member of Borrower or the SPE Component Entity (as applicable)
in accordance with the terms of the Loan Documents and the LLC Agreement), any
natural person duly designated under the applicable organizational documents
shall, without any action of any other Person and simultaneously with the
Member ceasing to be the member of Borrower or the SPE Component Entity (as
applicable) automatically be admitted to Borrower or the SPE Component Entity
(as applicable) as a member with a 0% economic interest (“Special Member”) and
shall continue Borrower or the SPE Component Entity (as applicable) without
dissolution, (ii) Special Member may not resign from Borrower or the SPE
Component Entity (as applicable) or transfer its rights as Special Member
unless a successor Special Member has been admitted to Borrower or the SPE
Component Entity (as applicable) as a Special Member in accordance with
requirements of Delaware law, (iii) Special Member shall automatically cease to
be a member of Borrower or the SPE Component Entity (as applicable) upon the
admission to Borrower or the SPE Component Entity (as applicable) of the first
substitute member, (iv) Special Member shall be a member of Borrower or the SPE
Component Entity (as applicable) that has no interest in the profits, losses
and capital of Borrower or the SPE Component Entity (as applicable) and has no
right to receive any distributions of the assets of Borrower or the SPE
Component Entity (as applicable), (v) pursuant to the applicable provisions of
the limited liability company act of the State of Delaware (the “Act”), Special Member
shall not be required to make any capital contributions to Borrower or the SPE
Component Entity (as applicable) and shall not receive a limited liability
company interest in Borrower or the SPE Component Entity (as applicable), (vi)
Special Member, in its capacity as Special Member, may not bind Borrower or the
SPE Component Entity (as applicable), and (vii) except as required by any
mandatory provision of the Act, 

73

Special Member, in its
capacity as Special Member, shall have no right to vote on, approve or
otherwise consent to any action by, or matter relating to, Borrower or the SPE
Component Entity (as applicable) including, without limitation, the merger, consolidation
or conversion of Borrower or the SPE Component Entity (as applicable). In order
to implement the admission to Borrower or the SPE Component Entity (as
applicable) of Special Member, Special Member shall execute a counterpart to
the LLC Agreement. Prior to its admission to Borrower or the SPE Component
Entity (as applicable) as Special Member, Special Member shall not be a member
of Borrower or the SPE Component Entity (as applicable). 

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

          Section
8.2     [Intentionally Omitted]. 

          Section
8.3     Single Purpose Entity/Separateness

                    (a)
          Borrower covenants
and agrees that within ten (10) Business Days after written request from
Lender, Borrower shall deliver to Lender an Officer’s Certificate confirming
Borrower’s and SPE Component Entity’s continued compliance with the terms of Article VIII hereof
as of the date of such Officer’s Certificate and stating that the
representations and warranties of Borrower and SPE Component Entity, as
applicable, set forth in Section
8.1 hereof are true and correct as of the date of such Officer’s
Certificate. In addition, Borrower shall provide Lender with such other
evidence of Borrower’s compliance with Article VIII hereof as Lender may reasonably
request from time to time. 

IX.
          RESERVE FUNDS – 

          Section
9.1     Reserve Funds and Reserve Accounts Generally.

74

                    (a)
          On the Closing
Date, each of the Reserve Accounts shall be established by Lender in an
Eligible Account at an Eligible Institution. 

                    (b)
          Borrower shall pay
Lender the Disbursement Fee as a condition to each disbursement from the
Reserve Accounts (other than the Property Tax and Insurance Escrow Account), as
compensation for Lender’s review, analysis and processing of such disbursement.

                    (c)
          Borrower shall
assign to Lender all rights and claims Borrower may have against all persons or
entities supplying labor or materials in connection with the Replacements or
the Required Repairs; provided, however, that Lender may not pursue any such
right or claim unless an Event of Default has occurred and is continuing. 

                    (d)
         Notwithstanding
anything to the contrary herein, upon the written request of Borrower, Lender
shall make disbursements from any Reserve Account (other than the Property Tax
and Insurance Premium Escrow Account) jointly payable to Borrower and the
person or entity being paid; provided, however, Lender reserves the right to
charge a fee of $50.00 for each joint check issued by Lender. In the event of
such a joint disbursement, Borrower shall not be required to have paid for such
work prior to requesting the reimbursement, but Borrower shall be required to
have satisfied all the other conditions of this Agreement for such
disbursement. 

                    (e)
          The insufficiency
of any balance in any Reserve Account shall not relieve Borrower from its
obligation to pay the Debt (except to the extent such amounts are actually paid
out of any Reserve Account), to fulfill any preservation or maintenance
covenants in the Loan Documents, or to perform the Other Obligations. 

                    (f)
          Notwithstanding any
other provision of this Agreement or of the other Loan Documents, during the
continuance of an Event of Default, Lender reserves the right, exercisable at
its sole option, to apply the Reserve Funds to the payment of the Debt, in such
order, manner, amounts, times and priority as Lender in its sole discretion
determines (including to the payment of the items for which the Reserve Funds
were established, if Lender so elects in its sole discretion), and such
reserved rights shall be in addition to all other rights and remedies provided
to Lender under this Agreement and the other Loan Documents. 

                    (g)
          Each Reserve Fund
and each Reserve Account shall be subject to the additional terms and
conditions set forth in Article
XII hereof. 

          Section
9.2       Property Tax and Insurance Escrow Fund.

                    9.2.1
      Deposits. In addition to the
initial deposits with respect to Property Taxes and, if applicable Insurance
Premiums made by Borrower to Lender on the Closing Date, Borrower shall pay to
Lender on each Payment Date (a) a percentage of the Property Taxes (the “Monthly Property Tax Deposit”)
that Lender estimates will be payable during the next ensuing twelve (12)
months in order to ratably accumulate with Lender sufficient funds to pay all
such Property Taxes at least thirty (30) days prior to their respective due
dates and (b) a percentage of the Insurance Premiums (the “Monthly Insurance Premium Deposit”)
that Lender estimates will be payable for the renewal of the coverage afforded
by the Policies upon the expiration thereof in 

75

order to ratably accumulate
with Lender sufficient funds to pay all such Insurance Premiums at least thirty
(30) days prior to the expiration of the Policies (said amounts in (a) and (b)
above hereinafter called the “Property Tax and Insurance Escrow Fund”), which Property
Tax and Insurance Escrow Fund shall be deposited by Lender into an Account
established to hold such fund (the “Property Tax and Insurance Escrow Account”). 

                    9.2.2
     Disbursements. Lender will
apply the Property Tax and Insurance Escrow Fund to payments of Property Taxes
and Insurance Premiums required to be made by Borrower pursuant to Sections 5.2 and 7.1(b)
hereof. In making any payment relating to the Property Tax and Insurance Escrow
Fund, Lender may do so according to any bill, statement or estimate procured
from the appropriate public office (with respect to Property Taxes) or insurer
or agent (with respect to Insurance Premiums), without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax Lien or title or claim thereof. If the amount
of the Property Tax and Insurance Escrow Fund shall exceed the amounts due for
Property Taxes and Insurance Premiums pursuant to Sections 5.2 and 7.1(b) hereof,
respectively, Lender shall credit such excess against future payments to be
made to the Property Tax and Insurance Escrow Fund. In allocating such excess,
Lender may communicate with the Person shown on the records of Lender to be the
owner of the Property. Any amount remaining in the Property Tax and Insurance
Escrow Fund after the Debt has been paid in full shall be returned to Borrower.

                    9.2.3
      Insufficiency. If at any time
Lender reasonably determines that the Property Tax and Insurance Escrow Fund is
not or will not be sufficient to pay Property Taxes and Insurance Premiums by
the dates set forth above, Lender shall notify Borrower of such determination
and Borrower shall increase its monthly payments to Lender by the amount that
Lender estimates is sufficient to make up the deficiency at least thirty (30)
days prior to delinquency of the Property Taxes and/or thirty (30) days prior
to expiration of the Policies, as the case may be. 

                    9.2.4
     Conditional Monthly Property Tax Deposit Waiver.
Notwithstanding the foregoing, Lender agrees to waive the requirement for
Monthly Property Tax Deposits so long as the Reserve Waiver Conditions are
satisfied. If at any time during the term of the Loan Borrower fails to satisfy
the Reserve Waiver Conditions with respect to the Monthly Property Tax Deposit,
Borrower shall make a True Up Payment with respect to the same into the
Property Tax and Insurance Escrow Account. 

                    9.2.5
     Conditional Monthly Insurance Deposit Waiver.
Notwithstanding the foregoing, Lender agrees to waive the requirement for the
Monthly Insurance Premium Deposit so long as the Reserve Waiver Conditions are
satisfied. If at any time during the term of the Loan Borrower fails to satisfy
the Reserve Waiver Conditions with respect to the Monthly Insurance Premium
Deposit, Borrower shall make a True Up Payment with respect to the same into
the Property Tax and Insurance Escrow Account. 

          Section
9.3      Business Interruption Insurance Account.

                    9.3.1
     Deposits. Lender shall deposit
all Business Interruption Insurance Proceeds received by Lender into an Account
established to hold such funds (the “Business 

76

Interruption Insurance Account”). If
Borrower receives any Business Interruption Insurance Proceeds directly,
Borrower shall deposit such funds into the Business Interruption Insurance Account. 

                    9.3.2
      Disbursements. So long as no
Default has occurred and is continuing, and so long as Lender has not otherwise
elected to apply Net Proceeds to the Debt pursuant to Section 7.4(c) or Section 7.4(d)
hereof, during the period of any Restoration and during the extended period of
indemnity described in Section
7.1(a)(iii) hereof (collectively, the “Restoration Period”),
upon the written request of Borrower, which request shall be made no more often
than one time in any calendar month, Lender will disburse funds in the Business
Interruption Insurance Account to Borrower, as and when the lost rental income
covered by such insurance would have been payable, to pay the following items
in the following order of priority to the extent that Rents collected by
Borrower are insufficient to pay the following items: 

                    (a)
          First,
to Lender, funds sufficient to pay the Monthly Property Tax Deposit; 

                    (b)
          Next, to Lender,
funds sufficient to pay the Monthly Insurance Premium Deposit; 

                    (c)
          Next, to Lender,
funds sufficient to pay the Monthly Debt Service Payment Amount; 

                    (d)
          Next, to Lender,
funds sufficient to pay late payment charges and any other amounts then due
under the Loan Documents including, without limitation, any unpaid reimbursable
costs and expenses incurred by Lender on Borrower’s behalf or in the
enforcement of Lender’s rights under the Loan Documents, if any; 

                    (e)
          Next, to Lender,
funds sufficient to pay the Replacement Reserve Monthly Deposit; 

                    (f)
          Next, to Lender,
funds sufficient to pay the TILC Reserve Monthly Deposit; 

                    (g)
          Next, to Borrower,
funds sufficient to pay all Operating Expenses due pursuant to an Annual Budget
for such calendar month, to the extent such Operating Expenses are fixed
expenses that are incurred during any Restoration Period; 

                    (h)
          Next, to Servicer,
for the payment of the Servicing Fee; and 

                    (i)
          So long as no Default
has occurred or is continuing, any amount remaining in the Business
Interruption Insurance Account after the Restoration Period, net of any
reasonable costs and expenses incurred by Lender in connection with the
Restoration or the disbursements from the Business Interruption Insurance
Account, shall be returned to Borrower. 

                    9.3.3
     Insufficiency. Notwithstanding
the foregoing, if Lender determines, in its good faith business judgment, that
the Business Interruption Insurance Funds will not be sufficient to pay the
items set forth in Section
9.3.2(a) through Section 9.3.2(i) hereof during the 

77

remainder of the
Restoration Period, Lender shall so inform Borrower in writing, and Borrower
shall not thereafter be entitled to any disbursement to pay Operating Expenses
pursuant to Section 9.3.2(i) hereof. 

          Section
9.4     Required Repair Fund. 

                    9.4.1
     Deposits. On the Closing Date,
Borrower shall deposit with Lender the amount for the Property set forth on Exhibit C hereto to
perform the Required Repairs (as hereinafter defined). Amounts so deposited
shall hereinafter be referred to as the “Required Repair Fund”, which Required Repair
Fund shall be deposited by Lender into an Account established to hold such fund
(the “Required Repair
Account”). 

                    9.4.2
    Disbursements. Lender shall
disburse to Borrower all or portions of the Required Repair Fund from time to
time upon satisfaction by Borrower of each of the following conditions: 

                    (a)
        Borrower has
delivered to Lender an Officer’s Certificate, in a form satisfactory to Lender,
specifying the amount of the requested disbursement and the Required Repairs
completed and certifying that all such Required Repairs have been completed and
all costs in connection therewith have been paid. Simultaneously with
submitting such Officer’s Certificate Borrower shall also submit copies of Lien
waivers from the general contractor, any subcontractors and all materialmen and
suppliers and such other evidence, as may be required by Lender, showing that
they have been paid for all work and that no Liens are claimed, or
alternatively, Lender may make payment directly to the contractor,
subcontractors or suppliers. 

                    (b)
        Borrower has
delivered to Lender, at Borrower’s sole cost and expense: (i) copies of all
contracts and invoices for all Required Repairs; (ii) copies of building
permits, any certificate of occupancy or any other certificates required and
issued by Governmental Authorities in connection with any Required Repairs
performed for which reimbursement is being sought under this Section 9.4; and
(iii) if required by Lender, an endorsement to the Title Insurance Policy,
insuring Lender against any mechanic’s Liens in connection with such Required
Repairs. 

                    (c)
        Borrower has paid
to Lender the Disbursement Fee and has delivered to Lender (i) an Officer’s
Certificate certifying that all requirements set forth in this Section 9.4 have been
satisfied and (ii) such other documents as Lender shall reasonably require to
confirm the satisfaction of the conditions contained herein and the completion
of the work required to be done under this Section 9.4. 

                    (d)
        All disbursements
requested by Borrower shall be at least $5,000 and no requests for
disbursements shall be made more often than once during any calendar month. 

                    (e)
        No Default exists
as of the date of Borrower’s request for a disbursement or the actual date of
disbursement. 

                    (f)
         Lender shall have
the right, but not the obligation, at Borrower’s sole cost and expense, to
inspect the Property and/or to have the documentation regarding the Required 

78

Repairs reviewed to
verify that the Required Repairs for which reimbursement is being sought have
been completed in a good and workmanlike manner and are otherwise acceptable to
Lender. 

                    (g)
          Within fifteen (15)
Business Days after Borrower submits to Lender a request for a disbursement,
the related supporting documentation and the required Disbursement Fee, Lender
shall either (i) advise Borrower of any additional or corrective information
needed to satisfy the requirements hereof for the requested disbursement; or
(ii) shall disburse the requested disbursement amount to Borrower. Lender shall
have no obligation to disburse Required Repair Funds to Borrower until all
disbursement requirements herein have been satisfied. 

                    9.4.3
       Performance of Required Repairs.

                    (a)
          Borrower shall
perform the repairs at the Property, as more particularly set forth on Exhibit C hereto
(such repairs hereinafter referred to as “Required Repairs”) on or before the required
deadline set forth on Exhibit
C. 

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

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

                    (d)
          In order to
facilitate Lender’s completion or making of the Required Repairs pursuant to Section 9.4.3(c)
hereof, Borrower grants Lender the right to enter onto the Property and perform
any and all work and labor necessary to complete or make the Required Repairs
and/or employ watchmen to protect the Property from damage. All sums so expended
by Lender, to the extent not from the Required Repair Fund, shall be deemed to
have been advanced under the Loan to Borrower and secured by the Security
Instrument. For this purpose Borrower constitutes and appoints Lender its true
and lawful attorney in fact with full power of substitution to complete or
undertake the Required Repair in the name of Borrower. Such power of attorney
shall be deemed to be a power coupled with an interest and cannot be revoked.
Borrower empowers said attorney in fact as follows: (i) to use the Required
Repair Fund for the purpose of making or completing the Required Repairs; (ii)
to make such additions, changes and corrections to the Required Repairs as
shall be necessary or desirable to complete the Required Repairs; (iii) to
employ such contractors, subcontractors, agents, architects and inspectors as
shall be required for such purposes; (iv) to pay, settle or compromise all
existing bills and claims which are or may become Liens against the Property,
or as may be necessary or desirable for the 

79

completion of the
Required Repairs, or for clearance of title; (v) to execute all applications
and certificates in the name of Borrower which may be required by any of the
contract documents; (vi) to prosecute and defend all actions or proceedings in
connection with the Property or the rehabilitation and repair of the Property;
and (vii) to do any and every act which Borrower might do in its own behalf to
fulfill the terms of this Agreement. 

                    (e)          Nothing
in this Section 9.4.3
shall: (i) make Lender responsible for making or completing the Required
Repairs; (ii) require Lender to expend funds in addition to the Required Repair
Fund to make or complete any Required Repair; or (iii) obligate Lender to
demand from Borrower additional sums to make or complete any Required Repair. 

                    (f)          Borrower
shall permit Lender and Lender’s agents and representatives (including, without
limitation, Lender’s engineer, architect, or inspector) or third parties making
Required Repairs pursuant to this Section 9.4.3 to enter onto the Property
during normal business hours (subject to the rights of tenants under Leases) to
inspect the progress of any Required Repairs and all materials being used in
connection therewith, to examine all plans and shop drawings relating to such
Required Repairs which are or may be kept at the Property, and to complete any
Required Repairs made pursuant to this Section 9.4.3. Borrower shall cause all
contractors and subcontractors to cooperate with Lender or Lender’s
representatives or such other persons described above in connection with
inspections described in this Section 9.4.3(f) or the completion of Required Repairs
pursuant to this Section
9.4.3. 

                    (g)          Lender
may require an inspection of the Property at Borrower’s sole cost and expense
prior to making any disbursement from the Required Repair Account in order to
verify completion of the Required Repairs for which reimbursement is sought.
Lender may require that such inspection be conducted by an appropriate
independent qualified professional selected by Lender and/or may require a copy
of a certificate of completion by an independent qualified professional
acceptable to Lender prior to the disbursement of any amounts from the Required
Repair Account. 

                    (h)          The
Required Repairs and all materials, equipment, fixtures, or any other item
comprising a part of any Required Repair shall be constructed, installed or
completed, as applicable, free and clear of all mechanic’s, materialmen’s or
other Liens (except for those Liens existing on the date of this Agreement
which have been approved in writing by Lender). 

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

                    9.4.4    
Failure to Make Required Repairs. It shall be an Event of
Default under this Agreement if Borrower fails to comply with any provision of
this Section 9.4
and such failure is not cured within thirty (30) days after notice from Lender.
Upon the occurrence of such an Event of Default, Lender may use the Required
Repair Fund (or any portion thereof) for any purpose, including but not limited
to completion of the Required Repairs as provided in Section 9.4.3, or for
any other repair or replacement to the Property or toward payment of the Debt
in such order, proportion and priority as Lender may determine in its sole
discretion. 

80

Lender’s right to withdraw and apply the Required
Repair Fund shall be in addition to all other rights and remedies provided to
Lender under this Agreement and the other Loan Documents. 

          Section 9.5     Replacement Reserve Fund. 

                    9.5.1     Deposits.
Borrower shall pay to Lender on the Closing Date and on each Payment Date
thereafter an amount equal to $0 (the “Replacement Reserve Monthly Deposit”) for
major repairs, replacements and improvements which are normally capitalized
under GAAP required to be made to the Property during the calendar year
(collectively, the “Replacements”)
including, without limitation, the performance of work to the roofs, chimneys,
gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches,
patios, exterior walls, exterior doors and doorways, windows, elevators,
appliances, carpeting, exterior painting, vinyl flooring, plumbing fixtures,
countertops, cabinets, water heaters, electrical fixtures, clubhouse repairs,
landscaping, fences, gates and mechanical and HVAC equipment. Amounts so
deposited shall hereinafter be referred to as the “Replacement Reserve Fund”,
which Replacement Reserve Fund shall be deposited by Lender into an Account
established to hold such fund (the “Replacement Reserve Account”). 

                    9.5.2     Disbursements.
Lender shall make disbursements from the Replacement Reserve Account to pay
Borrower only for the costs of the Replacements. Lender shall not be obligated
to make disbursements from the Replacement Reserve Account to reimburse
Borrower for the costs of routine maintenance to the Property or for costs
which are to be reimbursed from the Required Repair Fund. Lender shall disburse
the Replacement Reserve Fund from the Replacement Reserve Account from time to
time upon satisfaction by Borrower of each of the following conditions: 

                    (a)         Borrower
has delivered to Lender an Officer’s Certificate, in form satisfactory to
Lender, specifying the amount of the requested disbursement and the
Replacements completed and certifying that all such Replacements have been completed
and all costs in connection therewith have been paid. Simultaneously with
submitting such Officer’s Certificate Borrower shall also submit copies of Lien
waivers from the general contractor, any subcontractors and all materialmen and
suppliers and such other evidence, as may be required by Lender, showing that
they have been paid for all work and that no Liens are claimed, or
alternatively, Lender may make payment directly to the contractor,
subcontractors or suppliers; 

                    (b)         Borrower
has delivered to Lender, at Borrower’s sole cost and expense: (i) copies of all
contracts and invoices for all Replacements; (ii) copies of building permits,
any certificate of occupancy or any other certificates required and issued by
Governmental Authorities in connection with any Replacements performed for
which reimbursement is being sought under this Agreement; and (iii) if required
by Lender, an endorsement to the Title Insurance Policy, insuring Lender
against any mechanic’s Liens in connection with such Replacements; 

                    (c)         Borrower
has paid the Disbursement Fee and has delivered to Lender (i) an Officer’s
Certificate certifying that all requirements set forth in this Section 9.5 have been
satisfied and (ii) such other documents as Lender shall reasonably require to
confirm the 

81

satisfaction of the
conditions contained herein and the completion of the work required to be done
under this Section 9.5;

                    (d)          All
disbursements requested by Borrower shall be at least $5,000 and no requests
for disbursements shall be made more often than once during any calendar month;

                    (e)          No
Default exists as of the date of Borrower’s request for a disbursement or the
actual date of disbursement; 

                    (f)          Lender
shall have the right, but not the obligation, at Borrower’s sole cost and
expense, to inspect the Property and/or to have the documentation regarding the
Replacements reviewed to verify that the Replacements for which reimbursement
is being sought have been completed in a good and workmanlike manner and are
otherwise acceptable to Lender; and 

                    (g)          Within
fifteen (15) Business Days after Borrower submits to Lender a request for a
disbursement, the related supporting documentation and the required
Disbursement Fee, Lender shall either (i) advise Borrower of any additional or
corrective information needed to satisfy the requirements hereof for the
requested disbursement; or (ii) shall disburse the requested disbursement
amount to Borrower. Lender shall have no obligation to disburse the Replacement
Reserve Funds to Borrower until all disbursement requirements herein have been
satisfied. 

                    9.5.3      Performance
of Replacements. 

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

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

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

82

                    (d)          In
order to facilitate Lender’s completion or making of the Replacements pursuant
to Section 9.5.3(c)
hereof, Borrower grants Lender the right to enter onto the Property and perform
any and all work and labor necessary to complete or make the Replacements
and/or employ watchmen to protect the Property from damage. All sums so
expended by Lender, to the extent not from the Replacement Reserve Fund, shall
be deemed to have been advanced under the Loan to Borrower and secured by the
Security Instrument. For this purpose Borrower constitutes and appoints Lender
its true and lawful attorney in fact with full power of substitution to
complete or undertake the Replacements in the name of Borrower. Such power of
attorney shall be deemed to be a power coupled with an interest and cannot be
revoked. Borrower empowers said attorney in fact as follows: (i) to use any
funds in the Replacement Reserve Account for the purpose of making or completing
the Replacements; (ii) to make such additions, changes and corrections to the
Replacements as shall be necessary or desirable to complete the Replacements;
(iii) to employ such contractors, subcontractors, agents, architects and
inspectors as shall be required for such purposes; (iv) to pay, settle or
compromise all existing bills and claims which are or may become Liens against
the Property, or as may be necessary or desirable for the completion of the
Replacements, or for clearance of title; (v) to execute all applications and
certificates in the name of Borrower which may be required by any of the
contract documents; (vi) to prosecute and defend all actions or proceedings in
connection with the Property or the rehabilitation and repair of the Property; and
(vii) to do any and every act which Borrower might do in its own behalf to
fulfill the terms of this Agreement. 

                    (e)          Nothing
in this Section 9.5.3
shall: (i) make Lender responsible for making or completing the Replacements; (ii)
require Lender to expend funds in addition to the Replacement Reserve Fund to
make or complete any Replacement; or (iii) obligate Lender to demand from
Borrower additional sums to make or complete any Replacement. 

                    (f)          Borrower
shall permit Lender and Lender’s agents and representatives (including, without
limitation, Lender’s engineer, architect, or inspector) or third parties making
Replacements pursuant to this Section 9.5.3 to enter onto the Property during normal
business hours (subject to the rights of tenants under Leases) to inspect the
progress of any Replacements and all materials being used in connection
therewith, to examine all plans and shop drawings relating to such Replacements
which are or may be kept at the Property, and to complete any Replacements made
pursuant to this Section
9.5.3. Borrower shall cause all contractors and subcontractors
to cooperate with Lender or Lender’s representatives or such other persons
described above in connection with inspections described in this Section 9.5.3(f) or
the completion of Replacements pursuant to this Section 9.5.3. 

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

                    (h)          The
Replacements and all materials, equipment, fixtures, or any other item
comprising a part of any Replacement shall be constructed, installed or
completed, as applicable, 

83

free and clear of all
mechanic’s, materialmen’s or other Liens (except for those Liens existing on
the date of this Agreement which have been approved in writing by Lender). 

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

                    9.5.4     Failure
to Make Replacements. It shall be an Event of Default under
this Agreement if Borrower fails to comply with any provision of this Section 9.5 and such
failure is not cured within thirty (30) days after notice from Lender. Upon the
occurrence of such an Event of Default, Lender may use the Replacement Reserve
Fund (or any portion thereof) for any purpose, including but not limited to
completion of the Replacements as provided in Section 9.5.3, or for any other repair
or replacement to the Property or toward payment of the Debt in such order,
proportion and priority as Lender may determine in its sole discretion.
Lender’s right to withdraw and apply the Replacement Reserve Funds shall be in
addition to all other rights and remedies provided to Lender under this
Agreement and the other Loan Documents. 

          Section
9.6     TILC Reserve. 

                    9.6.1     Deposits.
Borrower shall pay to Lender on the Closing Date an amount equal to $0 and
Borrower shall pay to Lender on each Payment Date the sum of $0 (the “TILC Reserve Monthly Deposit”).
All such amounts shall be deposited with and held by Lender for payment of
future (a) customary and reasonable third party tenant improvement costs and
expenses actually incurred by Borrower and (b) customary and reasonable leasing
commissions paid to any management or brokerage company or other entity not
owned or Controlled, directly or indirectly, by any Restricted Party (such
entity, an “Independent
Leasing Agent”), in connection with any Qualified Replacement
Lease (such costs identified in clauses (a) and (b) hereof, collectively, “TILC Costs”). Amounts
so deposited shall hereinafter be referred to as the “TILC Reserve Fund”,
which TILC Reserve Fund shall be deposited by Lender into an Account
established to hold such fund (the “TILC Reserve Account”). 

                    9.6.2     Disbursements.
Lender shall make disbursements from the TILC Reserve Account for TILC Costs
from time to time upon satisfaction by Borrower of each of the following
conditions: 

                    (a)         Borrower
has delivered to Lender an Officer’s Certificate, in form satisfactory to
Lender, specifying the amount of the requested disbursement, and: 

                                (i)          With
respect to a requested disbursement for tenant improvements related to a Qualified
Replacement Lease (A) an Officer’s Certificate certifying that all such tenant
improvements have been completed and that all costs in connection therewith
have been paid, and that Borrower has reimbursed the related tenant for any
amounts paid by such tenant for such improvements; (B) Lien waivers from the
general contractor, any subcontractors and all materialmen and suppliers and
such other evidence, as may be required by Lender, showing that they have been
paid for all work and that no Liens are claimed, or 

84

alternatively, Lender may
make payment directly to the contractor, subcontractors or suppliers; (C) a
written confirmation from the related tenant that it has accepted the space and
the improvements made and has been paid all amounts, including any credits
against rent, owed it by reason of such improvements; (D) a certified copy of
the fully executed Qualified Replacement Lease; and (E) an estoppel certificate
and, if required by Lender, a subordination, non-disturbance and attornment
agreement from the related tenant each in form and substance acceptable to
Lender. 

                                (ii)          With
respect to a requested disbursement for any leasing commissions related to a
Qualified Replacement Lease, (A) an Officer’s Certificate certifying that
Borrower has entered into an arms-length Qualified Replacement Lease which
satisfies the requirements set forth herein and that in connection with such
Qualified Replacement Lease, Borrower has paid a leasing commission to an
Independent Leasing Agent; and (B) a certified copy of the fully executed
Qualified Replacement Lease and written verification from the related
Independent Leasing Agent that the applicable leasing commission has been paid.

                    (b)          Borrower
has delivered to Lender, at Borrower’s sole cost and expense: (i) copies of all
contracts and invoices for all tenant improvements; (ii) copies of building
permits, any certificate of occupancy or any other certificates required and
issued by Governmental Authorities in connection with any work performed for
which reimbursement is being sought under this Section 9.6; and (iii) if required by
Lender, an endorsement to the Title Insurance Policy, insuring Lender against
any mechanic’s Liens in connection with such work. 

                    (c)          Borrower
has paid the Disbursement Fee and, has delivered to Lender (i) an Officer’s
Certificate certifying that all requirements set forth in this Section 9.6 have been
satisfied and (ii) such other documents as Lender shall reasonably require to
confirm the satisfaction of the conditions contained herein and the completion
of the work required to be done under this Section 9.6. 

                    (d)          All
disbursements requested by Borrower shall be at least $5,000 and no requests
for disbursements shall be made more often than once during any calendar month.

                    (e)          No
Default exists as of the date of Borrower’s request for a disbursement or the
actual date of such a disbursement. 

                    (f)          Lender
shall have the right, but not the obligation, at Borrower’s sole cost and
expense not to exceed $1,000, to inspect the Property and/or to have the
documentation regarding the TILC Costs reviewed to verify that the TILC Costs
for which reimbursement is being sought have been completed in a good and
workmanlike manner and are otherwise acceptable to Lender. 

                    (g)          Within
fifteen (15) Business Days after Borrower submits to Lender a request for a
disbursement, the related supporting documentation and the required
Disbursement Fee, Lender shall either (i) advise Borrower of any additional or
corrective information needed to satisfy the requirements hereof for the
requested disbursement; or (ii) shall disburse the requested disbursement
amount to Borrower. Lender shall have no obligation to disburse TILC Reserve
Funds to Borrower until all disbursement requirements herein have been
satisfied. 

85

          Section
9.7     Early Lease Termination Reserve.

                    9.7.1     Deposits.
If any tenant (a “Terminating
Tenant”) gives notice to Borrower that it is exercising an early
termination option set forth in its Lease with Borrower, or if Borrower agrees
to allow any tenant to reduce or terminate its obligations under its Lease
(subject, in each case, to the restrictions of Section 5.17 hereof), Borrower shall
direct such tenant that any Lease Termination Payment in connection therewith
is to be remitted to Lender, for application as set forth below. If such tenant
remits the Lease Termination Payment directly to Borrower, Borrower shall remit
the Lease Termination Payment to Lender, for application as set forth below.
Amounts so deposited shall hereinafter be referred to as the “Early Lease Termination Reserve Fund”,
which Early Lease Termination Reserve Fund shall be deposited by Lender either
(a) in a segregated sub-account of the TILC Reserve Account, if a TILC Reserve
Account exists, or (b) in an Account established by Lender to hold such funds
(in either case, the “Early
Lease Termination Reserve Account”). A separate Early Lease
Termination Reserve Account shall be maintained with respect to each Lease so
terminated. 

                    9.7.2     Disbursements
for Qualified Replacement Lease for Entire Vacated Space. If
Borrower enters into a Qualified Replacement Lease for the entire premises
previously demised under the Lease so terminated (the “Vacated Space”), and
the tenant under such Lease accepts such demised premises, takes occupancy
thereof and commences the payment of base rent under its Lease, then all funds
in the applicable Early Lease Termination Reserve Account shall be used first
to pay TILC Costs with respect to such Qualified Replacement Lease upon satisfaction
of the conditions set forth in Section 5.17 hereof; any funds remaining in the
applicable Early Lease Termination Reserve Account after payment of all TILC
Costs with respect thereto shall be disbursed as follows: (i) first, to the
extent that any disbursements were made from the TILC Reserve Account with
respect to such Vacated Space, an amount equal to the sum of all such
disbursements will be transferred to the TILC Reserve Account (notwithstanding
the limit, if any, to the required deposits thereto); (ii) next, any funds
remaining in the Early Lease Termination Reserve shall be disbursed to Borrower
as follows: (x) if the monthly net rent payable under the Qualified Replacement
Lease is greater than or equal to the monthly rent payable by the Terminating
Tenant under its Lease as of the date of such termination, and the term of such
Qualified Replacement Lease extends to or beyond the scheduled expiration date
of the Lease with the Terminating Tenant, then provided no Default or Event of
Default is then continuing, such funds remaining in the Early Lease Termination
Reserve shall be disbursed to Borrower; and (y) if the conditions of clause (x)
are not satisfied, then, provided no Default or Event of Default is then
continuing, all funds remaining in the Early Lease Termination Reserve Account
shall be disbursed to Borrower in equal monthly installments over the remaining
term of the Qualified Replacement Lease. 

                    9.7.3     Disbursements
for Qualified Replacement Lease for Less Than Entire Vacated Space.
If Borrower enters into one or more Qualified Replacement Leases each for less
than the entire Vacated Space, no disbursements shall be permitted from the
Early Lease Termination Reserve except as follows: 

                    (a)          Until
such time as the entire Vacated Space has been re-leased pursuant to one or
more Qualified Replacement Leases, and the tenant under each such Qualified
Replacement Lease accepts such demised premises, takes occupancy thereof, is
open for 

86

business and commences
the payment of base rent under its Lease, Lender shall from time to time make
disbursements on account of TILC Costs with respect to the Vacated Space, upon
satisfaction of the conditions set forth in Section 5.17 hereof, provided, however,
that the disbursements with respect to any portion of the Vacated Space on a
per-square foot basis shall not exceed the amount of the Early Lease
Termination Payment on a per-square-foot basis; and 

                    (b)          At
such time as the entire Vacated Space has been re-leased pursuant to one or
more Qualified Replacement Leases and the tenant under each such Qualified
Replacement Lease accepts such demised premises, takes occupancy thereof, opens
for business and commences the payment of base rent under its Lease, then after
payment of all TILC Costs with respect to the re-leasing of such Vacated Space,
the funds remaining in the Early Lease Termination Reserve shall be disbursed
as follows: (i) first, to the extent that any disbursements were made from the
TILC Reserve Account with respect to such Vacated Space, an amount equal to the
sum of all such disbursements will be transferred to the TILC Reserve Account
(notwithstanding the limit, if any, to the required deposits thereto); (ii)
next, any funds remaining in the Early Lease Termination Reserve shall be
disbursed to Borrower as follows: (x) if the monthly aggregate net rents
payable under all such Qualified Replacement Leases is greater than or equal to
the monthly rent payable by the Terminating Tenant under its Lease as of its
date of termination, and the term of all such Qualified Replacement Leases
extends to or beyond the scheduled expiration date of the Lease with the
Terminating Tenant, then provided no Default or Event of Default is then
continuing such funds remaining in the Early Lease Termination Reserve Account
shall be disbursed to Borrower; and (y) if the conditions of clause (x) are not
satisfied, then provided no Default or Event of Default is then continuing, all
funds remaining in the Early Lease Termination Reserve Account shall be
disbursed to Borrower in equal monthly installments over the period that would
have remained in the term of the Lease with the Terminating Tenant. 

                    (c)          TILC
Costs with respect to any Qualified Replacement Lease shall be disbursed first
out of the related Early Lease Termination Reserve Account, if applicable,
prior to using any funds in the TILC Reserve Account, if any, with respect
thereto. 

X.          DEFAULTS

          Section
10.1    Event of Default. 

                    (a)          Each
of the following events shall constitute an event of default hereunder (an “Event of Default”): 

                                 (i)         if
any portion of the Debt is not paid on or before the fifth (5th) day after the
date the same is due and payable; 

                                 (ii)         if
any of the Basic Carrying Costs are not paid on or before the date when the
same are due and payable; 

                                 (iii)        if
the Policies are not kept in full force and effect or if certified copies of
the Policies are not delivered to Lender within thirty (30) days after written
request therefore; 

87

                              (iv)          if
Borrower attempts to assign its rights under this Agreement or any of the other
Loan Documents or any interest herein or therein in contravention of the Loan
Documents; 

                              (v)           if
any representation made by Borrower in Section 4.1.12 hereof is or becomes false or
misleading at any time, or if any other representation or warranty made by
Borrower, SPE Component Entity, or any Guarantor herein or in any other Loan
Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading as of the date the representation or warranty was made; 

                              (vi)          if
Borrower or SPE Component Entity shall make an assignment for the benefit of
creditors; 

                              (vii)         if
a receiver, liquidator or trustee shall be appointed for Borrower, or SPE
Component Entity, or if Borrower or SPE Component Entity shall be adjudicated a
bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to the Bankruptcy Code, or any similar federal or state
Law, shall be filed by or against, consented to, or acquiesced in by, Borrower
or SPE Component Entity, or if any proceeding for the dissolution or
liquidation of Borrower or SPE Component Entity shall be instituted; provided,
however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by Borrower or SPE Component Entity, upon the same
not being discharged, stayed or dismissed within sixty (60) days; 

                              (viii)        only
upon the declaration by Lender that the same constitutes an Event of Default
(which declaration may be made by Lender in its sole discretion), if (A) any
Guarantor shall make an assignment for the benefit of creditors, or (B) a
receiver, liquidator or trustee shall be appointed for any Guarantor, or if any
Guarantor shall be adjudicated a bankrupt or insolvent, or (C) any petition for
bankruptcy, reorganization or arrangement pursuant to the Bankruptcy Code, or
any similar federal or state Law, shall be filed by or against, consented to,
or acquiesced in by, any Guarantor, or (D) any proceeding for the dissolution
or liquidation of any Guarantor shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by any Guarantor, upon the same not being discharged, stayed or
dismissed within sixty (60) days; 

                              (ix)          if
Borrower fails to comply with the terms and provisions of 

Article VI hereof; 

                              (x)           if
Borrower fails to comply with the terms and provisions of Article VII hereof
within ten (10) Business Days after written request by Lender; 

                              (xi)          if
Borrower or SPE Component Entity fails to comply with the terms and provisions
of Article VIII
hereof; 

                              (xii)         if
Borrower fails to comply with the terms and provisions of Article XII hereof
within ten (10) Business Days after written request by Lender; 

88

                              (xiii)          if
Borrower fails to comply with the terms and provisions of Section 5.10, Section 5.17, Section 5.21, Section 5.23,
Section 5.24, Section 5.25, Section 5.26, Section 5.27, Section 5.28,
or Section 5.29(a)
hereof; 

                              (xiv)          if
Borrower fails to comply with the terms and provisions of Section 5.9 hereof
within ten (10) Business Days after written request by Lender; 

                              (xv)           if
Borrower fails to deliver to Lender, within ten (10) Business Days after
written request by Lender, the estoppel statements required pursuant to the
terms of Section 5.14
hereof, or the written certification and evidence required pursuant to the
terms of Section 5.29(b)
hereof; 

                              (xvi)          if
Borrower fails to comply with the terms and provisions of Section 5.22 hereof,
and any Lien shall remain undischarged of record (by payment, bonding or
otherwise) for a period of thirty (30) days; 

                              (xvii)        if
any federal tax Lien or state or local income tax Lien is filed against Borrower,
SPE Component Entity, any Guarantor or the Property and same is not discharged
of record within thirty (30) days after same is filed; 

                              (xviii)        if
Borrower fails to comply with the terms and provisions of Section 11.2 hereof
within ten (10) Business Days after written request by Lender; 

                              (xix)          if
Borrower fails to comply with the terms and provisions of Section 11.1 or Section 11.6 hereof
within ten (10) Business Days after written request by Lender; 

                              (xx)           if
Borrower is a Plan or a Governmental Plan, or if its assets constitute Plan
Assets; 

                              (xxi)          if
a final judgment is entered against Borrower, SPE Component Entity or any
Guarantor and such party fails to discharge such judgment within thirty (30)
Business Days of the date of such judgment; 

                              (xxii)         if
the Security Instrument or any of the other Loan Documents fail to have a first
priority Lien on the Property, subject only to the Permitted Encumbrances; 

                              (xxiii)        if
foreclosure or attachment proceedings are instituted against the Property upon
any other Lien or claim, whether alleged to be superior or junior to the Lien
of the Security Instrument or the other Loan Documents; 

                              (xxiv)        if
an uninsured material loss, theft, damage, or destruction to Property occurs; 

                              (xxv)         if
Borrower, SPE Component Entity, any Guarantor, any Affiliate of Borrower, SPE
Component Entity or any Guarantor, or any of their respective agents or
representatives shall commit any intentional act of physical waste or arson to
the Property; 

89

                              (xxvi)     if
Borrower, SPE Component Entity, any Guarantor, any Affiliate of Borrower, SPE
Component Entity or any Guarantor, or any of their respective agents or
representatives shall commit any criminal act which results in the seizure,
forfeiture or loss of the Property; 

                              (xxvii)    if
Borrower misappropriates or misapplies any (A) Insurance Proceeds, (B) Awards
or other amounts received in connection with the Condemnation of all or a
portion of any Property, (C) Rents (including, but not limited to security
deposits, advance deposits or any other deposits and Lease Termination
Payments) or (D) funds disbursed by Lender from any of the Reserve Funds; 

                              (xxviii)   if
Borrower fails to permit on-site inspections of the Property in accordance with
Section 5.4 hereof; 

                              (xxix)     if
Borrower fails to appoint a new Manager within fifteen (15) Business Days after
written request by Lender as required under this Agreement; 

                              (xxx)      with
respect to any term, covenant or provision set forth herein which specifically
contains a notice requirement or grace period, if Borrower shall be in default
under such term, covenant or condition after the giving of such notice or the
expiration of such grace period; 

                              (xxxi)     if
there shall be a default under the Security Instrument, any of the other Loan
Documents or any guaranty or indemnity executed in connection herewith
(including, without limitation, the Guaranty and the Environmental Indemnity)
and such default continues beyond any applicable notice and cure periods
contained in such documents; 

                              (xxxii)    if
a default under the Management Agreement has occurred and continues beyond any
applicable cure period thereunder if such default permits the Manager
thereunder to terminate or cancel the Management Agreement; 

                              (xxxiii)   if
a default under any REA has occurred and continues beyond any applicable cure
period thereunder if such default causes any party thereto to terminate or
cancel such REA; 

                              (xxxiv)   if
any Guarantor revokes or attempts to revoke any Guaranty; 

                              (xxxv)    if
(A) Borrower shall fail (beyond any applicable notice or grace period) to pay
any rent, additional rent or other charges payable under any Property Document
as and when payable thereunder, (B) Borrower defaults under the Property
Documents beyond the expiration of applicable notice and grace periods, if any,
thereunder, (C) any of the Property Documents are amended, supplemented,
replaced, restated or otherwise modified without Lender’s prior written consent
or if Borrower consents to a transfer of any party’s interest thereunder
without Lender’s prior written consent, (D) any Property Document and/or the
estate created thereunder is canceled, rejected, terminated, surrendered or
expires pursuant to its terms, unless in such case Borrower enters into a
replacement thereof in accordance with the applicable terms and provisions
hereof or (E) a Property Document Event occurs; 

90

                                 (xxxvi)     if
Borrower shall continue to be in Default under any of the other terms,
covenants or conditions of this Agreement not specified in subsections (i) to xxxv
above, for ten (10) days after written notice to Borrower from Lender, in the
case of any Default which can be cured by the payment of a sum of money, or for
thirty (30) days after notice from Lender in the case of any other Default;
provided, however, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such thirty (30) day period and provided
further that Borrower shall have commenced to cure such Default within such
thirty (30) day period and thereafter diligently and expeditiously proceeds to
cure the same, such thirty (30) day period shall be extended for such time as
is reasonably necessary for Borrower in the exercise of due diligence to cure
such Default, such additional period not to exceed ninety (90) days. 

                    (b)          Upon
the occurrence of an Event of Default (other than an Event of Default described
in clauses (vi), (vii) or (viii) above) and at any time thereafter, in addition
to any other rights or remedies available to it pursuant to this Agreement and
the other Loan Documents or at law or in equity, Lender may take such action,
without notice or demand, that Lender deems advisable to protect and enforce
its rights against Borrower and in and to the Property, including, without
limitation, declaring the Debt to be immediately due and payable, and Lender
may enforce or avail itself of any or all rights or remedies provided in the
Loan Documents against Borrower and the Property, including, without
limitation, all rights or remedies available at law or in equity; and upon any
Event of Default described in clauses (vi), (vii) or (viii) above, the Debt
shall immediately and automatically become due and payable, without notice or
demand, and Borrower hereby expressly waives any such notice or demand,
anything contained herein or in any other Loan Document to the contrary
notwithstanding. 

          Section
10.2    Remedies. 

                    (a)          Upon
the occurrence of an Event of Default, all or any one or more of the rights,
powers, privileges and other remedies available to Lender against Borrower
under this Agreement or any of the other Loan Documents executed and delivered
by, or applicable to, Borrower or at law or in equity may be exercised by
Lender at any time and from time to time, whether or not all or any of the Debt
shall be declared due and payable, and whether or not Lender shall have
commenced any foreclosure proceeding or other action for the enforcement of its
rights and remedies under any of the Loan Documents with respect to the
Property or any other Collateral. 

                    (b)          With
respect to Borrower and the Property, nothing contained herein or in any other
Loan Document shall be construed as requiring Lender to resort to the Property
or any other Collateral for the satisfaction of any of the Debt in preference
or priority to the Property or any other Collateral, and Lender may seek
satisfaction out of the Property or all of the other Collateral or any part
thereof, in its discretion in respect of the Debt. In addition, Lender shall
have the right from time to time to partially foreclose the Security Instrument
in any manner and for any amounts secured by the Security Instrument then due
and payable as determined by Lender in its sole discretion including, without
limitation, the following circumstances: (i) in the event Borrower defaults
beyond any applicable grace period in the payment of one or more scheduled
payments of principal and interest, Lender may foreclose the Security
Instrument to recover such delinquent payments or (ii) in the event Lender
elects to accelerate less than the 

91

entire outstanding
principal balance of the Loan, Lender may foreclose the Security Instrument to
recover so much of the principal balance of the Loan as Lender may accelerate
and such other sums secured by the Security Instrument as Lender may elect. Notwithstanding
one or more partial foreclosures, the Property shall remain subject to the
Security Instrument to secure payment of sums secured by the Security
Instrument and not previously recovered. 

                    (c)
          Lender shall have
the right from time to time to sever the Note and the other Loan Documents into
one or more separate notes, mortgages and other security documents (the “Severed Loan Documents”)
in such denominations as Lender shall determine in its sole discretion for
purposes of evidencing and enforcing its rights and remedies provided
hereunder. Borrower shall execute and deliver to Lender from time to time,
promptly after the request of Lender, a severance agreement and such other
documents as Lender shall request in order to effect the severance described in
the preceding sentence, all in form and substance reasonably satisfactory to
Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make
and execute all documents necessary or desirable to effect the aforesaid
severance, Borrower ratifying all that its said attorney shall do by virtue
thereof; provided, however, Lender shall not make or execute any such documents
under such power until five (5) days after written notice has been given to
Borrower by Lender of Lender’s intent to exercise its rights under such power.
Following an Event of Default, Borrower shall be obligated to pay any costs or
expenses incurred in connection with the preparation, execution, recording or
filing of the Severed Loan Documents. 

          Section
10.3     Remedies Cumulative; Waivers.
The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender’s rights,
powers and remedies may be pursued singly, concurrently or otherwise, at such time
and in such order as Lender may determine in its sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon. Without limiting the generality of
the foregoing, Borrower agrees that if a Default is continuing (i) Lender is
not subject to any “one action” or “election of remedies” Law or rule and (ii)
all Liens and other rights, remedies or privileges provided to Lender shall
remain in full force and effect until Lender has exhausted all of its remedies
against the Property and the other Collateral and the Security Instrument has
been foreclosed, sold and/or otherwise realized upon in satisfaction of the
Debt or the Debt has been paid in full. 

XI.
     SPECIAL PROVISIONS 

          Section
11.1     Sale of Notes and Securitization.
Lender shall have the right to: (i) sell, pledge, assign or otherwise transfer
the Loan or any portion thereof as a whole loan or any or all servicing rights
with respect thereto, (ii) sell participation interests in the Loan or to
syndicate the Loan, (iii) securitize the Loan or any portion thereof in a
single asset securitization or a pooled loan securitization or (iv) further
divide the Loan into two or more separate notes or components. 

92

(The transactions
referred to in clauses (i), (ii), (iii) and (iv) shall hereinafter be referred
to collectively as “Secondary
Market Transactions” and the transactions referred to in clause
(iii) shall hereinafter be referred to as a “Securitization”. Any certificates, notes
or other securities issued in connection with a Securitization are hereinafter
referred to as “Securities”).
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 and each
Guarantor at their respective sole cost and expense, 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 Secondary Market Transaction, including, without limitation: 

                    (a)
          (i) providing such
updated financial and other information with respect to the Property, Borrower,
each Guarantor, Manager and the business operations at the Property, (ii)
providing updated budgets relating to the Property and (iii) performing or
permitting or causing to be performed or permitted such site inspection (at
reasonable hours upon reasonable advanced notice and subject to the terms of
the applicable Leases), 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 a Secondary Market Transaction (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 satisfactory to Lender and the Rating Agencies; 

                    (b)
          delivering (i) an
Insolvency Opinion if and only if requested or required by Lender or the Rating
Agencies in connection with a Securitization, (ii) additional or revised
opinions of counsel as to due execution and enforceability with respect to the
Property, Borrower and each Guarantor and their respective Affiliates and the
Loan Documents or a so called “10b-5” opinion, (iii) revised organizational
documents for Borrower and SPE Component Entity (including, without limitation,
such revisions as are necessary to comply with the provisions of Article VIII hereof
or, at Lender’s option, to provide for a non-economic “golden member”) and
(iv) good standing and qualification certificates issued by the relevant
Governmental Authorities for each of Borrower, SPE Component Entity, Manager
and each Guarantor as of the date of the Secondary Market Transaction, which
opinions, organizational documents and certificates shall be satisfactory to
Lender and the Rating Agencies; 

                    (c)
          delivering
Officer’s Certificates containing updated representations and warranties as of
the closing date of the Secondary Market Transaction with respect to the
Property, Borrower, each Guarantor and the Loan Documents as are customarily provided
in the Secondary Market Transaction and as may be reasonably requested by the
holder of the Note, any Investor 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 (in the event Borrower or any Guarantor fails to comply with this subsection (c),
Borrower and each Guarantor hereby acknowledges and agrees that each of the
representations and warranties made by Borrower and each Guarantor contained in
the Loan Documents shall be deemed to have been re-made as the closing date of
the Secondary Market Transaction); 

93

                    (d)
          Within fifteen (15)
Business Days after request by Lender, use commercially reasonable efforts
(including but not limited to enforcing all landlord’s rights and remedies
under each applicable lease) 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, Property Documents or other agreements shall be satisfactory to
Lender and the Rating Agencies; 

                    (e)
          executing 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 Secondary Market Transaction, including, without limitation, to
modify all operative dates (including, but not limited to payment dates,
interest period start dates and end dates, etc.) under the Loan Documents, by
up to ten (10) days; 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 11.1(f)
hereof) (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; 

                    (f)
          if Lender elects,
in its sole discretion, prior to or upon a Secondary Market Transaction, 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, payment priorities and maturities (which election
Borrower agrees Lender may make), Borrower and each Guarantor agree 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 initial
weighted average of such interest rates does not exceed the Applicable Interest
Rate; 

                    (g)
          supplying to
Lender, or pay the cost incurred by Lender to obtain, updated reports from each
applicable Governmental Authority or a third party report provider confirming,
as close as possible to the closing date of the Secondary Market Transaction,
that the representations made by Borrower in Article IV are true and correct
including, without limitation, reports from Governmental Authorities or third
party reports providers confirming that the representations made by Borrower in
Section 4.1.1
(Organization), Section
4.1.4 (Litigation), Section 4.1.7 (No Bankruptcy Filing), Section 4.1.11
(Zoning Compliance), Section
4.1.12 (Anti Money Laundering/International Trade Law
Compliance), Section
4.1.15 (Condemnation), Section 4.1.25 (Certificates of Occupancy;
Licenses), Section
4.1.27 (Physical Condition), are true and correct; 

                    
(h)         supplying to
Lender, or pay the cost incurred by Lender to obtain, an endorsement to the
Title Insurance Policy insuring the Security Instrument is not subject to any
exceptions or Liens other than Permitted Encumbrances, and otherwise in form
and substance satisfactory to Lender; 

                    (i)
          delivering an
Officer’s Certificate certifying that there exists no Default or Event of
Default under the Loan and that Borrower or any Guarantor, as applicable, is in
compliance with the terms and conditions of the Loan Documents to which it is a
party and any other matters reasonably required by Lender, any Investor or the
Rating Agencies; and 

94

                    (j)
          upon request,
furnishing to Lender from time to time such financial, statistical and
operating data and financial statements (including, to the extent applicable,
financial statements prepared in accordance with GAAP and audited by an
Approved Accountant), in each case, as Lender reasonably determines to be
required in order to comply with any applicable Legal Requirements (including
those applicable to Lender or any Servicer (including, without limitation and
to the extent applicable, Regulation AB, including, without limitation, Item
1111(h) and Schedule L)), within the time frames necessary in order to comply
with such Legal Requirements. 

          All
reasonable third party costs and expenses incurred by Lender, Borrower or any
Guarantor in connection with Borrower or such Guarantor complying with requests
made under this Section
11.1 shall be paid by Lender (provided, however, Borrower and
Guarantor shall pay attorneys’ fees and the fees and expenses of Borrower or
Guarantor. 

          Section
11.2     Securitization Cooperation and Indemnification.
Lender shall be permitted to share all Provided Information with any actual or
potential purchaser, transferee, assignee, Servicer, participant or Investor in
a Secondary Market Transaction, Rating Agencies, investment banking firms,
accounting firms, law firms and other third-party advisory firms involved with
the Loan Documents or the applicable Secondary Market Transaction. It is
understood that the Provided Information may ultimately be incorporated into
any offering document (“Disclosure
Document”) for the Secondary Market Transaction, and also may 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”), and
thus any actual or potential purchaser, transferee, assignee, Servicer,
participant or Investor in a Secondary Market Transaction may also see some or
all of the Provided Information. Each of Borrower and Guarantor irrevocably
waive any and all rights it may have under any applicable Laws (including,
without limitation, any right of privacy) to prohibit such disclosure. Lender
and all of the aforesaid third-party advisors and professional firms shall be
entitled to rely on the information supplied by, or on behalf of, Borrower and
Guarantor. EACH OF BORROWER AND GUARANTOR
HEREBY INDEMNIFY THE UNDERWRITER GROUP AS TO ANY LOSSES, CLAIMS, DAMAGES OR
LIABILITIES THAT ARISE OUT OF OR ARE BASED UPON ANY UNTRUE STATEMENT OR ALLEGED
UNTRUE STATEMENT OF ANY MATERIAL FACT CONTAINED IN THAT PORTION OF PROVIDED
INFORMATION WHICH IS SIGNED BY BORROWER OR GUARANTOR, CERTIFIED BY BORROWER OR
GUARANTOR OR PROVIDED TO LENDER BY BORROWER OR GUARANTOR (THE “BG PROVIDED
INFORMATION”) OR IN THE BG PROVIDED INFORMATION DELIVERED TO ANY RATING AGENCY,
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 BG PROVIDED INFORMATION,
OR NECESSARY IN ORDER TO MAKE THE STATEMENTS IN SUCH BG PROVIDED INFORMATION,
OR IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING. Lender
may publicize the existence of the Debt in connection with its marketing for a
Secondary Market Transaction or otherwise as part of its business development. 

95

          Section
11.3     Exculpation. 

                    
(a)           Subject to the
qualifications below, Lender shall not enforce the liability and obligation of
Borrower to perform and observe the obligations contained in the Note, this
Agreement, the Security Instrument or the other Loan Documents by any action or
proceeding wherein a money judgment 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 under the Note, this Agreement, the Security
Instrument and the other Loan Documents, or in the Property, the Rents, or any
other Collateral given to Lender pursuant to the Loan Documents; provided,
however, that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent
of Borrower’s interest in the Property, in the Rents and in any other
Collateral given to Lender, and Lender, by accepting the Note, this Agreement,
the Security Instrument and the other Loan Documents, agrees that it 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 the
Note, this Agreement, the Security Instrument or the other Loan Documents. The
provisions of this Section
11.3 shall not, however, (i) constitute a waiver, release or
impairment of any obligation evidenced or secured by any of the Loan Documents;
(ii) impair the right of Lender to name Borrower as a party defendant in any
action or suit for foreclosure and sale under the Security Instrument; (iii)
affect the validity or enforceability of any of the Loan Documents or any
guaranty or indemnity (including, without limitation, the Guaranty and the
Environmental Indemnity) or similar instrument made in connection with the Loan
or any of the rights and remedies of Lender thereunder; (iv) impair the right
of Lender to obtain the appointment of a receiver; (v) impair the enforcement
of the Assignment of Leases; (vi) impair the right of Lender to enforce the
Environmental Indemnity; (vii) constitute a prohibition against Lender to seek
a deficiency judgment against Borrower in order to fully realize the Collateral
granted by any of the Loan Documents, including, without limitation, by the
Security Instrument, or by the Assignment of Leases, or by this Agreement
(including with respect to the Accounts Collateral) or to commence any other
appropriate action or proceeding in order for Lender to exercise its remedies
against the Collateral; or (viii) 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) arising out of or in connection with the following: 

                                   (i)
          Borrower, SPE
Component Entity, any Guarantor, or any Affiliate of any of the foregoing, or
any of their respective agents or representatives, misappropriates or
misapplies any (A) Rents, or (B) funds disbursed from the Reserve Funds, or (C)
Insurance Proceeds, or (D) Awards or other amounts received in connection with
the Condemnation of all or a portion of any Property; 

                                   (ii)
         To the extent not paid by
Lender pursuant to the terms of Section 9.2 hereof, Borrower’s failure to pay
Property Taxes or Other Charges when the same become due and payable, in
accordance with the terms of this Agreement; 

                                   (iii)
         Borrower’s failure to (A)
obtain and maintain the Policies in accordance with Section 7.1 hereof,
(B) pay Insurance Premiums when the same become due 

96

and payable, in
accordance with the terms of this Agreement or (C) pay the deductible amount of
any Policy; 

                                   (iv)
         Borrower’s failure to pay
charges for labor or materials or other charges that can create Liens on the
Property, in accordance with the terms of this Agreement; 

                                   (v)
          the removal or
disposal of any portion of the Personal Property by Borrower, SPE Component
Entity, any Guarantor, or any Affiliate of any of the foregoing, without
replacing such Personal Property with Personal Property of the same utility and
of the same or greater value; 

                                   (vi)
         any intentional act of
physical waste by Borrower, SPE Component Entity, any Guarantor, any Affiliate
of any of the foregoing or any of their respective agents or representatives; 

                                   (vii)
        any fees or commissions being
paid by Borrower to SPE Component Entity, any Guarantor or any Affiliate of any
of the foregoing in violation of the terms of this Agreement, the Note, the
Security Instrument or the other Loan Documents; 

                                   (viii)
        the breach of any
representation, warranty, covenant or indemnification provision in the
Environmental Indemnity or in the Loan Documents concerning Environmental Laws
and Hazardous Substances and any indemnification of Lender with respect thereto
in any Loan Document; 

                                   (ix)
         Borrower’s, SPE Component
Entity’s or any Guarantor’s failure to comply with the terms and provisions of Section 5.9, Section 11.1, Section 11.2, Section 11.5 or Section 11.6 hereof; 

                                   (x)
          Borrower’s failure
to pay any cost or expense of Lender in connection with the enforcement of its
rights and remedies hereunder or under any other Loan Document (including,
without limitation, all transfer and recording taxes due to any Governmental
Authority in the event of a foreclosure of the Property, deed in lieu of
foreclosure or other transfer of the Property to Lender or to Lender’s
designee); 

                                   (xi)
          Borrower or SPE
Component Entity violates or breaches any of the material terms and conditions
of Article VIII
hereof; or 

                                   (xii)
         Borrower fails to make
any True Up Payment; or 

                                   (xiii)
        in connection with the Loan or
the Property, Borrower, SPE Component Entity, any Guarantor, any Affiliate of
any of the foregoing, or any of their respective agents or representatives,
engages in any action constituting fraud, intentional misrepresentation or willful
misconduct; or 

                                   (xiv)
        Any violation or breach of Section 4.1.44
Property Document Representations, Section 5.26 Property Document Covenants
hereof, or any Property Document Event; or 

97

                                   (xv)
         Borrower’s failure to
resolve the issues described in paragraph 7 of that certain estoppel letter
dated September 9, 2013 prepared by Walgreen Co for the benefit of Borrower and
Lender; provided, however, at such time as Borrower delivers to Lender a clean
estoppel certificate executed by Walgreen Co for Store #6484 @ 9600 Westheimer
Rd. Houston Texas, that provides the improvements and work required under the
terms of the lease to be done by Borrower have been completed to Walgreen Co’s
satisfaction, Borrower’s liability under this subsection (xv) shall cease and
be of no further effect. 

                    (b)
          Notwithstanding the
foregoing or anything to the contrary in this Agreement or any of the other
Loan Documents, (A) nothing herein shall be deemed to be a waiver of any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provision of the Bankruptcy Code to file a claim for the full amount of the
Debt or to require that all Collateral shall continue to secure all of the Debt
owing to Lender in accordance with this Agreement, the Note, the Security
Instrument and the other Loan Documents and (B) the agreement of Lender not to
pursue recourse liability 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 Borrower, in the event that: 

                                   (i)
          Borrower violates
or breaches any of the terms and conditions of Article VI hereof; 

                                   (ii)
         (A) Borrower or SPE
Component Entity files a voluntary petition under the Bankruptcy Code or any
other Creditors Rights Laws, (B) an Affiliate, officer, director, or
representative which controls Borrower or SPE Component Entity directly or
indirectly, files, or joins in the filing of, an involuntary petition against
Borrower or SPE Component Entity under the Bankruptcy Code or any other
Creditors Rights Laws, or solicits or causes to be solicited, or otherwise
colludes with, petitioning creditors for any involuntary petition against
Borrower or SPE Component Entity from any Person, (C) Borrower or SPE Component
Entity files an answer consenting to, or otherwise acquiescing in, or joining
in, any involuntary petition filed against it, by any other Person under the
Bankruptcy Code or any other Creditors Rights Laws, or solicits or causes to be
solicited, or otherwise colludes with, petitioning creditors for any
involuntary petition from any Person, (D) any Affiliate, officer, director, or
representative which controls Borrower or SPE Component Entity consents to, or
acquiesces in, or joins in, an application for the appointment of a custodian,
receiver, trustee, or examiner for Borrower or SPE Component Entity or the
Property, (E) Borrower or SPE Component Entity makes an assignment for the
benefit of creditors, or admits, in writing or in any legal proceeding, its
insolvency or inability to pay its debts as they become due, (F) there is a
substantive consolidation of any Restricted Party with any other entity in
connection with any proceeding under the Bankruptcy Code or any other Creditors
Rights Laws, (G) any Restricted Party contests or opposes any motion made by
Lender to obtain relief from the automatic stay or seeking to reinstate the
automatic stay in the event of any proceeding under the Bankruptcy Code or any
other Creditors Rights Laws involving Borrower, and (H) Lender receives less
than the full value of its claim in any proceeding under the Bankruptcy Code or
any other Creditors Rights Laws, any Guarantor or any of its Affiliates
receives an equity interest or other financial benefit of any kind as a result
of a “new value” plan or equity contribution; 

98

                                   (iii)
          Borrower, SPE
Component Entity, any Guarantor, or any Affiliate of any of the foregoing
contests, delays, interferes with or frustrates, or fails to cooperate with,
Lender’s exercise of remedies provided under the Loan Documents after the
occurrence of an Event of Default (except to the extent that a court of
competent jurisdiction makes a final determination that Borrower, SPE Component
Entity, any Guarantor or any Affiliate of any of the foregoing had a valid
legal basis for any such action). 

          Section
11.4     Servicer. 

                    (a)
          At the option of
Lender, the Loan may be serviced by a master servicer, primary servicer,
special servicer or trustee (any such master servicer, primary servicer,
special servicer or trustee, together with their respective agents, nominees or
designees, are collectively referred to as “Servicer”) selected by Lender and Lender
may delegate all or any portion of its rights and responsibilities under this
Agreement and the other Loan Documents to the Servicer. Upon the appointment of
a Servicer, to the extent of the delegation to such Servicer, the term “Lender”
shall be deemed to include the “Servicer”. Borrower shall pay (i) all consent,
review and processing fees of Servicer and any related third party costs, (ii)
any liquidation fees that may be due Servicer in connection with the exercise
of any or all remedies permitted under the Loan Documents, (iii) any workout
fees and special servicing fees that may be due to Servicer, which fees may be
due on a periodic or continuing basis and (iv) the costs of all property
inspections (other than routine annual inspections) and/or appraisals of the
Property (or any updates to any existing inspection, other than routine annual
inspections, or appraisal) (the “Servicing Fee”). Borrower shall not be
responsible for any set-up fees, or any other initial costs relating to the
appointment of any Servicer, or for payment of the monthly servicing fee due to
Servicer. 

                    (b)
          Borrower
acknowledges that, as part of a Securitization, the parties to a Securitization
may, in their sole discretion, elect to impose certain requirements as
conditions precedent to certain actions by one or more of the Servicers
(including, without limitation, that such Servicer obtain either or both of the
approval of one or more Investors (or representatives of one or more Investors)
as to certain proposed actions, and/or Rating Agency Confirmation). No
requirement or condition imposed upon such Servicer pursuant to any
Securitization as a condition precedent to the granting or denying of any
consent or approval, or the taking of or refusal to take any action, pursuant
to this Agreement (except only for any action required of Lender hereunder)
shall give rise to any claim or cause of action by Borrower against Lender, or
give Borrower any defense for failure to perform its obligations under the Loan
Documents. 

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

99

Borrower or Lender or any
other lender in respect of transfers of the Note and other Loan Documents. 

          Section
11.6     Mezzanine Financing. In connection
with any Secondary Market Transaction, Lender shall have the right at any time
to divide the Loan into two or more parts: a mortgage loan (the “Mortgage Loan”) and
one or more mezzanine loans (the “Mezzanine Loan(s)”). The principal amount of
the Mortgage Loan plus the principal amount of the Mezzanine Loan(s) shall
equal the outstanding principal balance of the Loan immediately prior to the
creation of the Mortgage Loan and the Mezzanine Loan(s). In effectuating the
foregoing, Mezzanine Lender will make a loan to borrower(s) (the “Mezzanine Borrower(s)”)
and Mezzanine Borrower(s) will contribute the amount of the Mezzanine Loan(s)
to Borrower and Borrower will apply the contribution to pay down the Mortgage
Loan. The Mortgage Loan and the Mezzanine Loan(s) will be on the same terms and
subject to the same conditions set forth in this Agreement, the Note, the
Security Instrument and the other Loan Documents except as follows: 

                    (a)
          Lender shall have
the right to establish different interest rates and debt service payments for
the Mortgage Loan and the Mezzanine Loan(s) and to require the payment of the
Mortgage Loan and the Mezzanine Loan(s) in such order of priority as may be
designated by Lender; provided, that (i) the total loan amounts for the
Mortgage Loan and the Mezzanine Loan(s) shall equal the amount of the Loan
immediately prior to the creation of the Mortgage Loan and the Mezzanine
Loan(s); and (ii) the initial weighted average interest rate of the Mortgage
Loan and the Mezzanine Loan(s) shall initially on the date created equal the
interest rate which was applicable to the Loan immediately prior to creation of
the Mortgage Loan and the Mezzanine Loan(s). The Mezzanine Loan(s) will be made
pursuant to Lender’s standard mezzanine loan documents. The Mezzanine Loan(s)
will be subordinate to the Mortgage Loan and will be governed by the terms of
an intercreditor agreement between the holders of the Mortgage Loan and the
Mezzanine Loan(s). 

                    (b)
          Mezzanine
Borrower(s) shall (i) be a special purpose, bankruptcy remote entity which
conforms to applicable Rating Agency criteria and is otherwise acceptable to
Lender and (ii) own directly or indirectly one hundred percent (100%) of
Borrower. The security for the Mezzanine Loan shall be a pledge of one hundred
percent (100%) of the direct and indirect ownership interests in Borrower. 

                    (c)
          Mezzanine
Borrower(s) and Borrower shall cooperate with all requests of Lender in order
to divide the Loan into a Mortgage Loan and one or more Mezzanine Loan(s) and
shall execute and deliver such documents as shall be required by Lender and any
Rating Agency in connection therewith, including, without limitation, (i) the
delivery of non-consolidation opinions, (ii) the modification of organizational
documents and Loan Documents (including, without limitation, opting into
Article 8 of the UCC) and the certification of any collateral securing the
Mezzanine Loan(s), and/or instruments relating to the Property Documents, (iii)
authorize Lender to file any UCC financing statements required by Lender to
perfect its security interest in the collateral pledged as security for the
Mezzanine Loan(s), (iv) execute such other documents reasonably required by
Lender in connection with the creation of the Mezzanine Loan(s), including,
without limitation, a guaranty substantially similar in form and substance to
the Guaranty delivered on the date hereof in connection with the Loan, an 

100

environmental indemnity
substantially similar in form and substance to the Environmental Indemnity
delivered on the date hereof in connection with the Loan and a conditional
assignment of management agreement substantially similar in form and substance
to the Assignment of Management Agreement delivered on the date hereof in
connection with the Loan, (v) deliver appropriate authorization, execution and
enforceability opinions with respect to the Mezzanine Loan(s) and amendments to
the Mortgage Loan, and (vi) deliver an “Eagle 9” or equivalent UCC title
insurance policy, satisfactory to Lender, insuring the perfection and priority
of the Lien on the collateral pledged as security for the Mezzanine Loan(s). 

                    (d)
          All third party
costs and expenses incurred by Lender, Borrower or any Guarantor in connection
with Borrower’s or each Guarantor’s complying with requests made under this Section 11.6,
including, without limitation, UCC insurance premiums, shall be paid by
Borrower and each Guarantor. 

XII.
    ACCOUNTS AND ACCOUNT COLLATERAL 

          Section
12.1     Permitted Investments. Sums on
deposit in any Account may be invested by or at the direction of Lender in
Permitted Investments provided (a) such investments are then regularly offered
by the applicable Eligible Institution for accounts of this size, category and
type, (b) such investments are permitted by applicable Law, (c) the maturity
date of the Permitted Investment is not later than the date on which sums in
the applicable Account are anticipated by Lender to be required for payment of
an obligation for which such Account was created, and (d) no Default shall have
occurred and be continuing. No other investments of the sums on deposit in the
Accounts shall be permitted except as set forth in this Section 12.1. Lender
shall not be liable for any loss sustained on any such investment of any funds
constituting Account Collateral. 

          Section
12.2     Income From Permitted Investments.
Interest accrued on any Account shall not be required to be remitted either to
Borrower or to any Account and may instead be retained by Lender. 

          Section
12.3     Sole Dominion and Control.
Borrower acknowledges and agrees that the Accounts are subject to the sole
dominion, control and discretion of Lender, its authorized agents or designees,
subject to the terms hereof, and Borrower shall have no right of withdrawal
with respect to any Account. 

          Section
12.4     Grant of Security Interest.
Borrower hereby grants to Lender a first-priority perfected security interest
in each of the Accounts and the Account Collateral, as additional security for
the payment of the Debt and the performance of the Other Obligations. Until
expended or applied in accordance herewith, the Accounts shall constitute
additional security for the payment of the Debt and the performance of the
Other Obligations. 

          Section
12.5     No Other Security Interest.
Borrower shall not, without obtaining the prior written consent of Lender,
further pledge, assign or grant any security interest in any Account Collateral
or permit any Lien or encumbrance to attach thereto, or any levy to be made
thereon, or any UCC Financing Statement, except those naming Lender as the
secured party, to be filed with respect thereto. 

101

          Section
12.6     Change of Account Names. In the
event Lender transfers or assigns the Loan, Borrower acknowledges that each
applicable Eligible Institution at which any Account has been established, at
Lender’s request, shall change the name of such Account to the name of the
transferee, beneficiary or assignee, as applicable. In the event Lender retains
a Servicer to service the Loan, Borrower acknowledges that each such Eligible
Institution, at Lender’s request, shall change the name of each Account to the
name of the Servicer, as agent for Lender. 

          Section
12.7     Rights on Default.
Notwithstanding anything to the contrary contained in this Agreement or the
other Loan Documents, upon the occurrence of an Event of Default, Lender shall
promptly notify each Eligible Institution at which any Account has been
established, in writing of such Event of Default and, without notice from
Lender or any such Eligible Institution to Borrower, (a) Borrower shall have no
rights in respect of (including, without limitation, the right to instruct any
such Eligible Institution to transfer from) the Accounts, (b) Lender may direct
any such Eligible Institution to liquidate and transfer any amounts then
invested in Permitted Investments to the Accounts or reinvest such amounts in
other Permitted Investments as Lender may determine is necessary to perfect or
protect any security interest granted or purported to be granted hereby or
pursuant to the other Loan Documents, or to such Eligible Institution, as agent
for Lender, or Lender, to exercise and enforce Lender’s rights and remedies
hereunder or under any other Loan Document with respect to any Account or any
Account Collateral, (c) Lender shall have all rights and remedies with respect
to Account Collateral as described in this Agreement and in the Security
Instrument, in addition to all of the rights and remedies available to a
secured party under the UCC and (d) Lender may apply the Account Collateral to
the payment of the Debt, in such order, manner, amounts, times and priority as
Lender in its sole discretion determines (including to the payment of the items
for which the Reserve Funds were established, if Lender so elects in its sole
discretion), and such reserved rights shall be in addition to all other rights
and remedies provided to Lender under this Agreement and the other Loan
Documents. 

          Section
12.8     Limitations on Liability of Lender.

                    (a)
          Beyond the exercise
of reasonable care in the custody thereof or as otherwise expressly provided
herein, Lender shall have no duty with respect to any Account Collateral in its
possession or control, or any income thereon or the preservation of rights
against any Person or otherwise with respect thereto. Lender shall be deemed to
have exercised reasonable care in the custody and preservation of any such
Account Collateral if such Account Collateral is accorded treatment
substantially equal to that which Lender accords its own property, it being
understood and agreed that Lender shall not be liable or responsible for any
loss or damage to any Account Collateral, or for any diminution in value
thereof, by reason of any act or omission of Lender, its Affiliates, agents,
employees or bailees, except to the extent such loss or damage results from
Lender’s gross negligence or willful misconduct, provided that nothing in this Section 12.8(a) shall
be deemed to relieve Lender from the duties and standard of care which, as a
commercial bank, it generally owes to depositors. Without limiting the
generality of the foregoing, Lender shall have no liability to any Person based
upon its errors in judgment, its performance of its duties with respect to any
of the Account Collateral under this Agreement, any claimed failure to perform
such duties, any action taken or omitted in good faith or any mistake of fact
or Law; provided that Lender shall be liable for damages arising out of its
gross negligence or willful misconduct. 

102

                    (b)
          The duties of Lender
in its capacity as the holder of any Account Collateral in its possession or
control pursuant to this Agreement are purely ministerial. In such capacity,
Lender is acting as a stakeholder for the accommodation of Borrower and is not
responsible or liable in any manner whatsoever related to any signature,
notice, resolution, request, waiver, consent, receipt, order, certificate,
report, opinion, bond or other paper or document pursuant to which Lender may
act with respect to any such Account Collateral, including, without limitation,
terms and conditions, sufficiency, correctness, genuineness, validity, form of
execution, or the identity, authority or right of any person executing or
depositing the same. Without limiting the generality of the foregoing, Lender
shall be protected in acting upon any signature, notice, resolution, request,
waiver, consent, receipt, order, certificate, report, opinion, bond or other
paper or document believed by it to be genuine, and Lender may assume that any
Person purporting to act on behalf of Borrower giving any of the foregoing in
connection with any Account Collateral in Lender’s possession or control has
been duly authorized to do so. Lender may consult with counsel, and the opinion
of such counsel shall be full and complete authorization and protection in
respect of any such action taken or suffered by Lender in good faith in
accordance herewith. 

                    (c)
          Lender shall not be
responsible for the validity or sufficiency of any cash, instruments, wire
transfer or any other property delivered to it hereunder, for the value or
collectability of any check or other instrument so delivered or for any
representation made or obligations assumed by Borrower or any other party to
the Loan Documents. Nothing herein contained shall be deemed to obligate Lender
to deliver any cash or any other funds or property referred to herein, unless
the same shall have first been received by Lender pursuant to this Agreement. 

          Section
12.9     Indemnity. BORROWER HEREBY INDEMNIFIES AND HOLDS THE INDEMNIFIED
PARTIES HARMLESS AGAINST ANY LIABILITIES WHICH ANY INDEMNIFIED PARTY MAY INCUR
ARISING FROM OR RELATED IN ANY WAY TO: 

                    (a)
          ANY AND ALL ACTIONS TAKEN BY LENDER WITH RESPECT TO
ANY ACCOUNT COLLATERAL IN ITS POSSESSION OR CONTROL, AND ANY CLAIMS OR DEMANDS
ASSERTED AGAINST LENDER ARISING OUT OF ANY SUCH ACCOUNT COLLATERAL, EXCEPTING
ONLY ANY SUCH CLAIMS OR DEMANDS ARISING OUT OF LENDER’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. 

                    (b)
          THE PERFORMANCE OF THE REPLACEMENTS; 

                    (c)
          THE PERFORMANCE OF THE REQUIRED REPAIRS. 

          The
amount of any such Liabilities shall bear interest at the Default Rate from the
date any such Liabilities are incurred to the date of payment to the
Indemnified Party, shall be deemed to constitute a portion of the Debt, shall
be secured by the Lien of the Security Instrument and the other Loan Documents,
and shall be immediately due and payable upon demand therefor. 

103

          Section
12.10     Disbursement of Disputed Funds.
In the event any adverse claims are made upon the funds in any Account
Collateral in the possession or control of Lender, then, at Lender’s option:
(a) Lender shall not deliver such Account Collateral to any Person, shall
refuse to comply with any claims on it and shall continue to hold such Account
Collateral until (i) Lender, Borrower and any other Person who may have
asserted a claim upon any such Account Collateral shall agree in writing to a
delivery of such Account Collateral, in which event Lender shall then deliver
such Account Collateral in accordance with such written agreement, or (ii)
Lender receives a certified copy of a final and non-appealable judgment or
order of a court of competent jurisdiction directing the delivery of such
Account Collateral, in which event Lender shall then deliver such Account
Collateral in accordance with such judgment or order; or (b) if Lender shall receive
a written notice advising that litigation over any Account Collateral has been
commenced, Lender may deposit such Account Collateral with the Clerk of the
Court in which such litigation is pending; or (c) Lender may take affirmative
steps to (i) substitute for itself an impartial party reasonably satisfactory
to Lender and Borrower, (ii) deposit such Account Collateral with a court of
competent jurisdiction, or (iii) commence an action for interpleader, the costs
thereof to be borne by Borrower. The provisions of this Section 12.10 shall
not apply to any dispute between Borrower and Lender. 

          Section
12.11     Disbursement Upon Payment in Full.
Upon payment in full of the Debt, and the performance of the Other Obligations,
any funds remaining in the Accounts shall be disbursed to Borrower pursuant to
the written instructions of Borrower. 

XIII.  MISCELLANEOUS 

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

          Section
13.2       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 any arrangement or
term is to be satisfactory to Lender, the decision of Lender to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole and absolute discretion of Lender and shall be final and conclusive.
Prior to a Securitization, whenever pursuant to this Agreement or any other
Loan Document the Rating Agencies are given any right to approve or disapprove,
or any arrangement or term is to be satisfactory to the Rating Agencies, the
decision of Lender to approve or disapprove or to decide whether arrangements
or terms are satisfactory or not satisfactory, based upon Lender’s
determination of Rating Agency criteria, shall be substituted therefor. 

104

           Section
13.3     Governing Law. 

                   (a)           This
Agreement, the Note and the other Loan Documents will be governed by and
construed in accordance with the Laws of the State where the Land is located
without regard to principles of conflicts of laws, provided that to the extent
any of such Laws may now or hereafter be preempted by Federal Law, in which
case such Federal Law shall so govern and be controlling. 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, THE NOTE OR ANY OF THE OTHER
LOAN DOCUMENTS. 

                   (b)           NOTWITHSTANDING THE FOREGOING, THE UCC IN EFFECT IN
THE STATE OF TEXAS SHALL GOVERN THE CREATION, PERFECTION, PRIORITY AND
ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED IN THE ACCOUNT
COLLATERAL. 

          Section
13.4     Modification, Waiver in Writing.
No modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, the Note, or 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. 

          Section
13.5     Nonwaiver. 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 the Note or 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 this Agreement, the Note or any other 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 this Agreement, the Note or the other Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount. 

          Section
13.6      Notices. All notices,
consents, approvals and requests required or permitted hereunder or under any
other Loan Document shall be given in writing and shall be effective for all
purposes if hand delivered or sent by (a) certified or registered United States
mail, postage prepaid, return receipt requested or (b) expedited prepaid
delivery service, either commercial or United States Postal Service, with proof
of attempted delivery, and by telecopier (with answer back acknowledged),
addressed as follows (or at such other address and Person as shall be
designated from time to time by any party hereto, as the case may be, in a
written notice to the other parties hereto in the manner provided for in this Section 13.6): 

	
  

 	
  

 
	
 If to Lender:

 	
 PNC Bank, National Association

 
	
  

 	
 10851 Mastin

 

105

	
  

 	
  

 
	
  

 	
  

 
	
  

 	
 Overland Park, KS 66210

 
	
  

 	
 Attention:      Jeannette    I.      Butler,      Senior      Vice

 
	
  

 	
 President

 
	
  

 	
 Facsimile No.: 913-253-9718

 
	
  

 	
  

 
	
 If to Borrower:

 	
 AmREIT Woodlake Square, LP

 
	
  

 	
 8 Greenway Plaza, Suite 1000

 
	
  

 	
 Houston, TX 77046

 
	
  

 	
 Attention: Chad Braun

 
	
  

 	
 Facsimile No.: (713) 850-0498

 
	
  

 	
  

 
	
 With a copy to

 	
 T. Gaillard Uhlhorn, V, Esq.

 
	
  

 	
 Bass, Berry & Sims PLC

 
	
  

 	
 The Tower at Peabody Place

 
	
  

 	
 100 Peabody Place, Suite 900

 
	
  

 	
 Memphis, Tennessee 38103

 
	
  

 	
 Facsimile No.: (866) 393-1959

 

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 expedited prepaid delivery and telecopy, upon the first attempted
delivery on a Business Day. 

          Section
13.7     Financing Statements.
Borrower hereby authorizes Lender to file an initial financing statement or
statements under the UCC with respect to any portion of the Collateral which is
or may be subject to any security interest within the meaning of the UCC in the
form required to properly perfect Lender’s security interest therein. At any
time and from time to time, at the expense of Borrower, Borrower shall promptly
execute and deliver all further instruments and documents, and take all further
action that may be necessary or that Lender may reasonably request (including,
without limitation, all initial financing statements, and any restatements,
extensions, continuations, renewals or amendments thereof), in order to
perfect, or continue the perfection of, and to protect any security interest
granted or purported to be granted hereby or by the other Loan Documents
(including, without limitation, any security interest in and to any Permitted
Investments), or to enable Lender, or any agent of Lender, to exercise and
enforce its rights and remedies hereunder or under any of the other Loan
Documents with respect to any portion of the Collateral which is or may be
subject to any security interest within the meaning of the UCC. Borrower hereby
expressly authorizes and appoints Lender as its attorney-in-fact to execute
such further instruments and documents in the name of and upon behalf of
Borrower, which power of attorney shall be irrevocable and shall be deemed to
be coupled with an interest. With respect to any of the Collateral in which a
security interest is not perfected by the filing of a financing statement, Borrower
consents and agrees to undertake, and to cooperate fully with Lender, to
perfect the security interest granted to Lender in such Collateral. Without
limiting the foregoing, if and to the extent any of the Collateral is held by a
bailee for the benefit of Borrower, Borrower shall promptly notify Lender
thereof and, if required by Lender, promptly obtain an acknowledgment from such
bailee that is satisfactory to Lender and confirms that such 

106

bailee holds such Collateral for the benefit of Lender as secured party
and shall only act upon instructions from Lender with respect to such
Collateral. 

          Section
13.8     Waiver of Trial by Jury. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF
ANY ISSUE TRIABLE OF RIGHT BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM OF ANY NATURE, WHETHER IN CONTRACT OR TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN, THE APPLICATION FOR THE LOAN, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY ACTS OR OMISSIONS OF
LENDER, OR ANY OF ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH RESPECT TO ANY OF THE FOREGOING. THIS WAIVER OF RIGHT TO TRIAL
BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A
COPY OF THIS PARAGRAPH IN ANY SUCH ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER. 

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

          Section
13.10    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. 

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

          Section
13.12     Waiver of Automatic or Supplemental Stay.
In the event of the filing of any voluntary or involuntary petition under the
Bankruptcy Code by or against Borrower (other than an involuntary petition
filed by or joined by Lender), Borrower shall not assert, or request any other
party to assert, that the automatic stay under Section 362 of the Bankruptcy
Code shall operate or be interpreted to stay, interdict, condition, reduce or
inhibit the ability of the Lender to enforce any rights it has by virtue of
this Agreement, or any other rights that Lender has, whether now or hereafter
acquired, against any Guarantor. Further, Borrower shall not seek a 

107

supplemental stay or any other relief, whether injunctive or otherwise,
pursuant to Section 105 of the Bankruptcy Code or any other provision therein
to stay, interdict, condition, reduce or inhibit the ability of Lender to
enforce any rights it has by virtue of this Agreement against any Guarantor.
The waivers contained in this paragraph are a material endorsement to Lender’s
willingness to make the Loan, and Borrower acknowledges and agrees that no
grounds exist for equitable relief which would bar, delay or impede the
exercise by Lender of its rights and remedies against Borrower or any
Guarantor. 

          Section
13.13     Bankruptcy Acknowledgment.
In the event the Property or any interest therein becomes property of any
bankruptcy estate or subject to any state or federal insolvency proceeding,
then Lender shall immediately become entitled, in addition to all other relief
to which Lender may be entitled under this Agreement or the other Loan
Documents, to obtain: (a) an order from the Bankruptcy Court or other
appropriate court granting immediate relief from any automatic stay laws
(including Section 362 of the Bankruptcy Code) so to permit Lender to pursue
its rights and remedies against Borrower as provided under this Agreement and
all other rights and remedies of Lender at law and in equity under applicable
state law; and (b) an order from the Bankruptcy Court prohibiting Borrower’s
use of all “cash collateral” as defined under Section 363 of the Bankruptcy
Code. In connection with any such orders, Borrower shall not contend or allege
in any pleading or petition that Lender does not have sufficient grounds for
relief from the automatic stay. Any bankruptcy petition or other action taken
by Borrower to stay, condition, or inhibit Lender from exercising its remedies
are hereby admitted by Borrower to be in bad faith and Borrower further admits
that Lender would have just cause for relief from the automatic stay in order
to take such actions authorized by state Law. 

          Section
13.14     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 the other Loan
Documents specifically and expressly provide for 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 this Agreement or the other Loan Documents
do not specifically and expressly provide for the giving of notice by Lender to
Borrower. 

          Section
13.15     Remedies of Borrower. In
the event that a claim or adjudication is made that Lender or its agents have
acted unreasonably or unreasonably delayed acting in any case where by law or
under this Agreement or the other Loan Documents, Lender or such agent, as the
case may be, has an obligation to act reasonably or promptly, Borrower agrees
that neither Lender nor its agents shall be liable for any monetary damages,
and Borrower’s sole remedies shall be limited to commencing an action seeking
injunctive relief or declaratory judgment. The parties hereto agree that any
action or proceeding to determine whether Lender has acted reasonably shall be
determined by an action seeking declaratory judgment. 

          Section
13.16     Expenses; Indemnity. 

                    (a)             Borrower covenants and agrees to pay or, if Borrower
fails to pay, to reimburse, Lender upon receipt of written notice from Lender
for all reasonable costs and expenses (including reasonable attorneys’ fees and
disbursements) incurred by Lender or 

108

Servicer in connection with (i) the preparation, negotiation, execution
and delivery of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby; (ii)
Borrower’s ongoing performance of and compliance with Borrower’s respective
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date,
including, without limitation, confirming compliance with environmental and
insurance requirements; (iii) Lender’s ongoing performance and compliance with
all agreements and conditions contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date;
(iv) the negotiation, preparation, execution, delivery and administration of
any consents, amendments, waivers or other modifications to this Agreement and
the other Loan Documents and any other documents or matters requested by
Lender; (v) securing Borrower’s compliance with any requests made pursuant to
the provisions of this Agreement; (vi) the filing and recording fees and
expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Lien in favor of Lender pursuant to
this Agreement and the other Loan Documents and any amendment thereof; (vii)
enforcing or preserving any rights, in response to third party claims or the
prosecuting or defending of any action or proceeding or other litigation, in
each case against, under or affecting Borrower, this Agreement, the other Loan
Documents, the Property, or any other security given for the Loan; and (viii)
enforcing any obligations of or collecting any payments due from Borrower under
this Agreement, the other Loan Documents or with respect to the Property or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a “work out” or of any
insolvency or bankruptcy proceedings; provided, however, that Borrower shall
not be liable for the payment of any such costs and expenses to the extent the
same arise by reason of the gross negligence or willful misconduct of Lender. 

                    (b)           BORROWER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS THE
INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL LIABILITIES THAT MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY INDEMNIFIED PARTY IN ANY
MANNER RELATING TO OR ARISING OUT OF (I) ANY BREACH BY BORROWER OF ITS
OBLIGATIONS UNDER, OR ANY MATERIAL MISREPRESENTATION BY BORROWER CONTAINED IN,
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR (II) THE USE OR INTENDED USE OF
THE PROCEEDS OF THE LOAN; PROVIDED, HOWEVER, THAT BORROWER SHALL NOT HAVE ANY
OBLIGATION TO LENDER HEREUNDER TO THE EXTENT THAT SUCH LIABILITIES ARISE FROM
THE GROSS NEGLIGENCE, FRAUD, ILLEGAL ACTS OR WILLFUL MISCONDUCT OF LENDER. TO
THE EXTENT THAT THE UNDERTAKING TO INDEMNIFY, DEFEND AND HOLD HARMLESS SET
FORTH IN THE PRECEDING SENTENCE MAY BE UNENFORCEABLE BECAUSE IT VIOLATES ANY
LAW OR PUBLIC POLICY, BORROWER SHALL PAY THE MAXIMUM PORTION THAT IT IS
PERMITTED TO PAY AND SATISFY UNDER APPLICABLE LAW TO THE PAYMENT AND
SATISFACTION OF ALL LIABILITIES INCURRED BY THE INDEMNIFIED PARTIES. 

109

                    (c)             Wherever
pursuant to this Agreement or any other Loan Document it is provided that
Borrower pay any costs and expenses, such costs and expenses shall include, but
not be limited to, reasonable legal fees and disbursements of Lender, whether
with respect to retained firms, the reimbursement for the expenses of in-house
staff or otherwise. 

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

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

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

                    (a)            Borrower
and Lender intend that the relationships created hereunder and under the other
Loan Documents between Borrower and Lender be solely that of debtor and
creditor, and that Lender shall have no fiduciary or other special relationship
with Borrower. Nothing herein or therein is intended to, nor shall anything
contained herein or therein be construed to, constitute Lender as a joint
venturer, partner, tenant in common, joint tenant or agent of Borrower, nor to
grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender, nor to render Lender liable for any debts, obligations,
acts, omissions, representations or contracts of Borrower. 

                    (b)            This
Agreement and the other Loan Documents are solely for the benefit of Lender and
Borrower and nothing contained in this Agreement or the other Loan Documents
shall be deemed to confer upon anyone other than Lender and Borrower any right
to insist upon or to enforce the performance or observance of any of the
obligations contained herein or therein. All conditions to the obligations of
Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled
to assume that Lender will refuse to make the Loan in the absence of strict
compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if Lender deems it
advisable or desirable to do so. 

          Section
13.20     Publicity. Except as
required by law, all news releases, publicity or advertising, other than
securities filings made in accordance with the rules and regulations
promulgated by the United States Securities and Exchange Commission, by
Borrower or its Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the
Loan Documents, to Lender, PNC Bank, or any of their Affiliates shall be
subject to the prior written approval of Lender. Lender may, at any time 

110

and without further consent from Borrower, publicize the Closing Date,
the amount of the Loan and the name of the Property in tombstone
advertisements. 

          Section
13.21     Waiver of Marshalling of Assets.
To the fullest extent permitted by Law, Borrower, for itself and its successors
and assigns, waives all rights to a marshalling of the assets of Borrower,
Borrower’s partners and others with interests in Borrower, and of the Property,
and agrees not to assert any right under any Laws pertaining to the marshalling
of assets, the sale in inverse order of alienation, homestead exemption, the
administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Lender under the Loan Documents to a sale
of the Property for the collection of the Debt without any prior or different
resort for collection or of the right of Lender to the payment of the Debt out
of the net proceeds of the Property in preference to every other claimant
whatsoever. 

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

          Section
13.23     Conflict; Construction of Documents;
Reliance. 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 they were
represented by competent counsel in connection with the negotiation, drafting
and execution of the Loan Documents and that such Loan Documents shall not be
subject to the principle of construing their meaning against the party which
drafted same. Borrower acknowledges that, with respect to the Loan, Borrower
shall rely solely on its own judgment and advisors in entering into the Loan
without relying in any manner on any statements, representations or
recommendations of Lender or any parent, subsidiary or Affiliate of Lender.
Lender shall not be subject to any limitation whatsoever in the exercise of any
rights or remedies available to it under any of the Loan Documents or any other
agreements or instruments which govern the Loan by virtue of the ownership by
it or any parent, subsidiary or Affiliate of Lender of any equity interest any
of them may acquire in Borrower, and Borrower hereby irrevocably waives the
right to raise any defense or take any action on the basis of the foregoing
with respect to Lender’s exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse
to or competitive with the business of Borrower or its Affiliates. 

          Section
13.24     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 transactions contemplated by this Agreement other than Jones Lang LaSalle
Americas, Inc. BORROWER HEREBY AGREES TO
INDEMNIFY, DEFEND AND HOLD LENDER HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS,
LIABILITIES, COSTS AND EXPENSES OF ANY KIND (INCLUDING LENDER’S ATTORNEYS’ FEES
AND EXPENSES) IN ANY WAY RELATING TO OR ARISING FROM A CLAIM BY ANY PERSON THAT
SUCH PERSON ACTED ON BEHALF OF BORROWER OR LENDER IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREIN. The provisions of this Section 13.24 shall
survive the expiration and termination of this Agreement and the payment of the
Debt. 

111

          Section
13.25     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 among or between such parties, whether
oral or written are superseded by the terms of this Agreement and the other
Loan Documents. 

          Section
13.26     Assignments. None of the
Borrower, SPE Component Entity or any Guarantor may Transfer this Agreement or
any other Loan Document or any of their respective rights or obligations
hereunder or thereunder, except as expressly permitted pursuant to the terms
and provisions of Section
6.2 hereof. If Borrower is a partnership, the agreements
contained herein and in the other Loan Documents shall remain in force and be
applicable, notwithstanding any changes in the individuals or entities
comprising the partnership, and the term “Borrower” as used herein, shall
include any alternate or successor partnership, but any predecessor partnership
and their partners shall not thereby be released from any liability. If
Borrower is a corporation, the agreements contained herein and in the other
Loan Documents shall remain in full force and be applicable notwithstanding any
changes in the shareholders comprising, or the officers and directors relating
to, the corporation, and the term “Borrower” as used herein, shall include any
alternate or successor corporation, but any predecessor corporation shall not
be relieved of liability hereunder. If Borrower is a limited liability company,
the agreements contained herein and in the other Loan Documents shall remain in
force and be applicable, notwithstanding any changes in the members comprising
the limited liability company, and the term “Borrower” as used herein, shall
include any alternate or successor limited liability company, but any
predecessor limited liability company and their members shall not thereby be
released from any liability. (Nothing in the foregoing sentences shall be
construed as a consent to, or a waiver of, any prohibition or restriction on
transfers of interests in such partnership, corporation or limited liability
company which may be set forth in the Loan Agreement, the Security Instrument
or any other Loan Document.) 

          Section
13.27     Duplicate Originals; Counterparts.
This Agreement and each of the other Loan Documents may be executed in any
number of duplicate originals, and each duplicate original shall be deemed to
be an original. This Agreement and each of the other Loan Documents (and each
duplicate original) also may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together constitute a fully
executed agreement even though all signatures do not appear on the same page.
The failure of any party hereto to execute this Agreement, or any counterpart
hereof, shall not relieve the other signatories from their obligations
hereunder. 

XIV.  STATE-SPECIFIC
PROVISIONS. 

The following provisions shall govern and control in the event of a
conflict with any other provision of this Agreement: 

          Section
14.1     Maximum Rate. The proceeds
of the Note are to be used for business, commercial, investment or other
similar purposes and no portion thereof will be used for personal, family or
household use. It is expressly stipulated and agreed to be the intent of
Borrower and Lender at all times to comply with the applicable Texas law
governing the maximum rate or amount of interest payable on the Note or by the
other Loan Documents (or 

112

applicable United States federal law to the extent that it permits
Lender to contract for, take, reserve or receive a greater amount of interest
than under Texas law) (the “Maximum Rate”). If (i) the applicable law is ever
judicially interpreted so as to render usurious any amount called for under
this Agreement, the Note, the Security Instrument, or under any of the other
Loan Documents, or contracted for, charged, taken, reserved or received with
respect to the indebtedness evidenced by this Agreement, the Note, the Security
Instrument, or the other Loan Documents, or (ii) Lender’s exercise of the
option herein contained to accelerate the maturity of the Note 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 (a) all excess amounts theretofore collected by Lender be
credited on the principal balance of the Note (or, if the Note has been or
would thereby be paid in full, refunded to Borrower), and (b) the provisions of
this Agreement, the Note, the Security Instrument, and the other Loan Documents
immediately be deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of any new
document so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder and thereunder.
All sums contracted for, charged, taken, reserved, paid or agreed to be paid to
Lender for the use, forebearance and detention of the indebtedness evidenced by
this Agreement and by the Note and the Security Instrument, and the other Loan Documents
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such indebtedness until
payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the usury ceiling from time to time in effect and
applicable to such indebtedness for so long as the Note is outstanding. To the
extent that Lender is relying on Chapter 303, as amended, of the Texas Finance
Code to determine the maximum amount of interest permitted by applicable law on
the principal of the Note, Lender will utilize the weekly rate ceiling from
time to time in effect as provided in such Chapter 303, as amended. To the
extent United States federal law permits a greater amount of interest than is
permitted under Texas law, Lender will rely on United States federal law
instead of such Chapter 303, as amended, for the purpose of determining the
maximum amount permitted by applicable law. Additionally, to the extent
permitted by applicable law now or hereafter in effect, Lender may, at its
option and from time to time, implement any other method of computing the
maximum lawful rate under such Chapter 303, as amended, or under other
applicable law by giving notice, if required, to Borrower as provided by
applicable law now or hereafter in effect. In no event shall the provisions of
Chapter 346 of the Texas Finance Code (which regulates certain revolving credit
loan accounts and revolving triparty accounts) apply to the indebtedness
evidenced hereby. Notwithstanding anything to the contrary contained herein, or
in the Note or the Security Instrument, or in any of the other Loan Documents,
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. This Section 13.28.1 will control
all agreements between Borrower and Lender. 

          Section
14.2     SPECIFIC NOTICE REGARDING INDEMNITIES.
IT IS EXPRESSLY AGREED AND UNDERSTOOD THAT THIS AGREEMENT INCLUDES
INDEMNIFICATION PROVISIONS (INCLUDING, WITHOUT LIMITATION, THE INDEMNIFICATION
PROVISIONS CONTAINED IN SECTIONS 2.3.7, 11.2, 12.9, 13.16 and 13.24) WHICH, IN
CERTAIN CIRCUMSTANCES, COULD INCLUDE AN 

113

INDEMNIFICATION BY BORROWER OF LENDER FROM CLAIMS OR LOSSES ARISING AS
A RESULT OF LENDER’S OWN NEGLIGENCE. 

 [Remainder
of page left intentionally blank]

114

          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. 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 AmREIT Woodlake Square, LP,

 
	
  

 	
 a Texas limited partnership

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
       AmREIT Woodlake Square
 GP, Inc,

 
	
  

 	
  

 	
  

 	
       a Texas corporation

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
          /s/ Brett Treadwell

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
                 Brett
 Treadwell

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
        Vice President

 

(Signature - Loan
Agreement)

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WITH RESPECT TO SECTIONS 4.1.12

 
	
  

 	
 AND 5.21 ONLY:

 
	
  

 	
  

 
	
  

 	
 GUARANTOR:

 
	
  

 	
  

 
	
  

 	
 AmREIT, Inc., a
 Maryland corporation

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
          /s/ Brett Treadwell

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
                 Brett
 Treadwell

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
        Vice President

 

(Signature - Loan
Agreement)

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 LENDER:

 
	
  

 	
  

 
	
  

 	
 PNC BANK, NATIONAL ASSOCIATION

 
	
  

 	
  

 
	
  

 	
  

 
	
  

 	
 By: 

 	
   /s/ Harry J. Funk

 
	
  

 	
  

 	
   Name:

 	
 Harry J. Funk

 
	
  

 	
  

 	
   Title:

 	
 Executive Vice President

 

(Signature - Loan
Agreement)

EXHIBIT
A

ORGANIZATIONAL
CHART

	
  

 
	
 Woodlake
 Square
Ownership
 Structure

 

EXHIBIT
B

RENT ROLLS

EXHIBIT
C

REQUIRED
REPAIRS - DEADLINES FOR COMPLETION

NONE

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