Document:

Exhibit
10.1

PURCHASE
AGREEMENT FOR REAL PROPERTY

AND
ESCROW INSTRUCTIONS

This Purchase Agreement for Real Property and Escrow Instructions (“Agreement”)
is entered into by and between TR ELDRIDGE PLACE CORP.,
a Delaware corporation (“Seller”), and HARVARD PROPERTY TRUST, LLC, a Delaware limited liability company and/or its permitted
assigns (“Buyer”).

1.             PURCHASE OF PROPERTY.  Seller agrees to sell to Buyer and Buyer
agrees to purchase from Seller, the Property (as described in
Paragraph 2.1) in consideration for the payment of the Purchase Price (as
described in Paragraph 2.4), together with the respective promises of the
parties set forth in this Agreement.

2.             BASIC TERMS AND
DEFINITIONS.

2.1           Property.  The term “Property” shall mean:  (i) approximately 6.4385 acres of land
which is legally described on Exhibit A attached to this Agreement and made a
part hereof (the “Land”) together with all improvements, fixtures and equipment
located on the Land, including two (2) office buildings containing a total of approximately
518,746 rentable square feet, commonly referred to as One and Two Eldridge Place located at 777 and 757 North Eldridge, Houston, Texas
(collectively, the “Improvements”), (excluding, however, any fixtures or
equipment owned by tenants of the Improvements or any property manager),
(ii) Seller’s rights as landlord under the leases with the tenants
described on Exhibit B attached to this Agreement and made a part hereof
(“Leases”), (iii) whatever rights Seller has in any easements, rights of
way, development rights, and real property rights appurtenant to the Land, to
the extent they are assignable (collectively, “Real Property Rights”),
(iv) whatever rights Seller has in Contracts (as defined in
Section 13) and in all warranties, guaranties, permits, licenses,
consents, authorizations, variances, waivers, certificates and approvals to the
extent they relate to the Property (“Licenses and Permits”), (v) any
personal property owned by Seller, located on the Land or within the
Improvements (other than the personal property in the space leased by Seller or
its property manager), and used in connection therewith (“Personal Property”),
and (vi) all of Seller’s right, title and interest in all trademarks,
service marks, logos and other marks, trade or business names and other
intangible property used in connection with the operations of the Property,
including any CAD drawings in Seller’s possession (collectively, the
“Trademarks”).

2.2           Buyer’s
Notice Address.  The
notice address of Buyer is Harvard
Property Trust, LLC, 15601 Dallas Parkway, Suite 600, Addison, Texas 75001,
Attention: Jim Fant; Telephone:  (214)
665-1600; Facsimile: Fax No. (214) 655-1610,
and additional copies to: Powell and Coleman, L.L.P, Attention:  Randy Osborne; Telephone:  (214) 890-7116; Facsimile:  (214) 373-8768.

2.3           Seller’s
Notice Address.  The
notice address of the Seller is c/o KBS Realty Advisors, 205 West Wacker, Suite
1000, Chicago, Illinois 60606, Attention: Bill Rogalla, Senior Vice President,
Telephone: (312) 977-1175; Facsimile:  (312) 726-6804

 

and additional copies to James Mayer, Esq.,
Holland & Knight LLP, 131 S. Dearborn Street, 30th Floor, Chicago, Illinois 60603, Telephone:
(312) 715-5841, Facsimile (312) 578-6666.

2.4           Purchase
Price.  The purchase price
for the Property shall be One Hundred One Million and 00/100 Dollars
($101,000,000) (“Purchase Price”).

2.5           Effective
Date.  The effective date
of this Agreement is the date on which this Agreement is fully executed as
indicated by the later date of the Seller’s and Buyer’s signatures as shown on
the signature page of this Agreement (“Effective Date”).

2.6           Due
Diligence Period.  The
period beginning on the Effective Date and ending at 5:00 p.m. on November
15, 2006.

2.7           Closing
Date.  The Closing shall
occur on or before December 13, 2006, subject to the provisions of Section 16
hereof, or on such other date as is mutually agreed upon by the parties (“Closing
Date”).

2.8           Terms of
Purchase.

(a)           The
Deposit.  A wire transfer
or cashier’s or certified check in the amount of One Million Four Hundred
Fifty-Five Thousand Dollars ($1,455,000) (the “Initial Deposit”) shall be
delivered to Escrow Holder by Buyer within two (2) business days of the
Effective Date as a condition to the “Opening of Escrow” as provided in
Paragraph 7.2.  Within two (2)
business days after expiration of the Due Diligence Period, Buyer shall deliver
an additional deposit of One Million Four Hundred Fifty-Five Thousand Dollars
($1,455,000) (the “Additional Deposit”). 
(The term “Deposit” as used herein means the amount held by Escrow
Holder under this Paragraph at the applicable time.)  Escrow Holder shall place the Deposit in an
interest-bearing account and all earned interest shall accrue to the Buyer’s
benefit, unless Seller is entitled to the Deposit as liquidated damages under
Paragraph 6.4, in which event the interest shall accrue to Seller’s
benefit.  For purposes of this Agreement,
any accrued interest shall be deemed part of the “Deposit”.  At Closing the Deposit shall be applied to
the Purchase Price, subject to the terms of this Agreement.

(b)           Buyer’s
Cash at Closing.  The
balance of the Purchase Price less the amount of the Deposit, plus any other
amounts to be paid by Buyer under this Agreement, and subject to the prorations
and adjustments described in this Agreement, shall be delivered to Escrow
Holder by Buyer as provided in Paragraph 5.3.

(c)           Independent Consideration.  In addition to, and not in lieu of the
delivery to Escrow Agent of the Deposit, Buyer shall deliver to Seller,
concurrently with Buyer’s execution and delivery of this

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Agreement, Buyer’s check, payable to the
order of Seller, in the amount of One Hundred and No/100 Dollars
($100.00).  Seller and Buyer hereby
mutually acknowledge and agree said sum represents adequate bargained for
consideration for Seller’s execution and delivery of this Agreement and Buyer’s
right to have inspected the Property pursuant to Article 3 hereof.  Said sum is in addition to and independent of
any other consideration or payment Provided for in this Agreement and is
nonrefundable in all events.

2.9           Escrow.  The escrow account at the Escrow Holder which
shall be opened as provided in Paragraph 7.2.

2.10         Escrow
Holder.  Chicago Title
Company, 16969 Von Karman, Suite 200, Irvine, California 92606; Attention:
George H. Bull, Telephone: (949) 263-0133; Telecopy: (949) 263-0356.

2.11         Title
Policy.  A Texas Owner’s
Policy of Title Insurance issued by Escrow Holder, as agent for Chicago Title
Insurance Company (“Title Company”), for the Property in the aggregate amount
of the Purchase Price, subject to the exceptions to title listed on Exhibit C
attached hereto and incorporated herein, any real estate taxes and assessments
not yet due and payable, exceptions created or resulting from Buyer’s acts and
exceptions to title approved or deemed approved by Buyer pursuant to Paragraph
3.1.1 below (collectively, the “Permitted Exceptions”).

3.             CONDITIONS PRECEDENT TO BUYER’S PERFORMANCE.  Buyer’s obligation to purchase the Property
is subject to the satisfaction or waiver (or deemed waiver) of all the
conditions set forth below (which are for Buyer’s benefit) on or before the
Closing Date.

3.1           Title Condition.

3.1.1        Buyer has obtained from
the Title Company a current title commitment for the Property (the “Commitment”),
together with copies of all documents available to the Title Company referenced
as recorded exceptions in the Commitment. 
Within ten (10) business days after the Effective Date, Buyer may
disapprove the Commitment by delivering written notice to Seller and Escrow
Holder (the “Notice of Defect”) specifying each matter shown in the Commitment
(including, without limitation, any matters listed on Exhibit C), if any, which
is disapproved by Buyer (each a “Disapproved Exception”).  Seller’s failure to receive the Notice of
Defect within such 10 business day period of the Buyer’s receipt of the
Commitment shall be conclusively deemed to constitute Buyer’s approval of the
Commitment and satisfaction of this condition.

3.1.2        Within five (5) business
days after receiving a Notice of Defect, Seller shall deliver to Buyer and
Escrow Holder notice as to whether Seller will use its reasonable efforts to
cure that Disapproved Exception(s). 
Buyer’s failure to receive any notice from Seller within that five (5)
business day period shall be deemed to be notice to Buyer that Seller elected
not to cure the Disapproved

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Exception(s). 
Buyer shall be deemed to have waived its disapproval of the Disapproved
Exception(s) and to have agreed to acquire title to the Property subject to the
Disapproved Exception(s) (in which event the Disapproved Exception(s) shall
thereby become “Permitted Exceptions”), unless Buyer terminates this Agreement
by written notice delivered to Seller and Escrow Holder within three (3)
business days after Seller’s notice (or deemed notice) as provided in this
Paragraph 3.1.2.

3.1.3        If Seller notifies Buyer
in writing, as provided in Paragraph 3.1.2, that it would use its
reasonable efforts to cure a Disapproved Exception, and then fails to cure that
Disapproved Exception by no later than three (3) business days before the
Closing Date, Buyer, as its only remedy for Seller having failed to cure the
Disapproved Exception, may elect by written notice to Seller and Escrow Holder,
to be received no later than two (2) business days before the Closing Date,
either to terminate this Agreement or to close and to acquire the Property,
subject to the Disapproved Exception(s), which Seller shall have no obligation
to cure.  Seller’s failure to receive
notice of Buyer’s election by such time shall be deemed an election by Buyer to
close and to acquire the Property, subject to the Disapproved Exceptions (which
shall thereby become “Permitted Exceptions”). 
Notwithstanding the foregoing, Seller shall take all actions necessary
to remove at Closing all mortgages, deeds of trust, mechanics’ liens caused by,
through or under Seller or similar liens on the Property other than the lien of
taxes not yet due or payable and liens not caused by, through or under Seller (“Liens”).

3.1.4        If Buyer properly elects
to terminate this Agreement as provided in this Paragraph 3.1, this
Agreement shall terminate and the Deposit shall be returned to Buyer as
provided in Paragraph 6.2.

3.1.5        A Disapproved Exception
shall be considered to have been cured if the Title Company agrees to issue the
Title Policy to Buyer without that Disapproved Exception being reflected as an
exception to coverage under the Title Policy or with such Disapproved Exception
reflected but insured over via an endorsement approved by Buyer in its sole
discretion.

3.1.6        For purposes of this
Paragraph 3.1, “reasonable efforts” shall not include any obligation of
Seller to incur any expense whatsoever in connection with correcting any
Disapproved Exception, nor shall Seller’s notice to Buyer regarding any of
those items obligate Seller to incur any expense, except to the extent required
to remove any Lien or to the extent expressly stated otherwise in the
notice.  Nothing in this Paragraph 3.1
shall obligate Buyer to expend any funds to cure a Disapproved Exception(s).

3.1.7        If new title exceptions
(collectively, the “New Exceptions”) encumbering the Property are raised by the
Title Company after the expiration of the Due Diligence Period and prior to the
date of Closing, Seller shall notify Buyer of any New Exceptions upon becoming
aware of same and so long as such New Exceptions are not a result of the
actions of Buyer or its agents, employees

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or contractors, and if the New Exceptions are
not acceptable to Buyer, either: (i) Seller, at its option, will arrange for
the Title Company to remove from or endorse over the New Exceptions in Buyer’s
title policy with an endorsement acceptable to Buyer in its sole discretion; or
(ii) if Seller fails to exercise its option under (i) above, Buyer may elect by
written notice to Seller and Escrow Holder, to be received no later than the
Closing Date, either to terminate this Agreement and, upon such election, Buyer
shall receive a refund of the Deposit or to close and to acquire the Property, subject
to the New Exceptions, which Seller shall have no obligation to cure.  Notwithstanding the foregoing, Seller shall
be obligated to remove, at or before Closing, all New Exceptions caused to
appear of record by Seller.  Seller’s
failure to receive notice of Buyer’s election within such time period shall be
deemed an election by Buyer to close and acquire the Property subject to the
New Exceptions (which shall thereby become “Permitted Exceptions”).

3.2           Survey.  Seller will provide to Buyer a copy of the
most recent survey dated September 21, 2006. 
Buyer may order an updated survey (collectively, the “Survey”) for the
Property.  During the Due Diligence
Period, Buyer has the right to provide written notice to Seller of objections
to the Survey.  Buyer shall deliver a
copy of any updated survey to Seller and Title Company.

3.3           Feasibility Condition.

3.3.1        Buyer shall have until
5:00 p.m. Central Standard Time, on the last day of the Due Diligence
Period to confirm, at Buyer’s sole expense, whether Buyer desires to purchase
the Property.  Prior to or on the last
day of the Due Diligence Period, Buyer shall have the absolute right to
terminate this Agreement as hereinafter set forth.  Buyer shall have the right to review and
investigate, in addition to all other matters regarding the Property,
including, but not limited to, all of the following:

(a)           the physical condition
of the Property;

(b)           title to the Property;

(c)           the availability of all
necessary utilities and gravity sewers and storm drains for the Property;

(d)           leases, service
contracts, tax bills and other written agreements or notices which affect the
Property to the extent available;

(e)           the Survey;

(f)            the environmental
condition of the Land and the Improvements, including the existence of toxic waste
and hazardous substances; and

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(g)           the economic
feasibility of Buyer’s intended use of the Property.

3.3.2        In connection with Buyer’s
due diligence investigation, Seller shall, within five (5) business days of the
Effective Date, furnish or make available to Buyer the documents and other
items (the “Property Information”) listed on Exhibit K attached hereto and made
a part hereof, to the extent any of such documents are in Seller’s possession.

3.3.3        Buyer has advised Seller
that Buyer must cause to be prepared up to three (3) years of audited financial
statements in respect of the Property in compliance with the policies of Buyer
and certain laws and regulations, including, without limitation, Securities and
Exchange Commission Regulation S-X. Seller agrees to use reasonable efforts to
cooperate, at no cost or expense to Seller, with Buyer’s auditors in the
preparation of such audited financial statements (it being understood and
agreed that the foregoing covenant shall survive the Closing). Without limiting
the generality of the preceding sentence: (i) Seller shall, during normal
business hours, allow Buyer’s auditors reasonable access to such books and
records maintained by Seller (and Seller’s manager of the Property) in respect
solely of the Property as necessary to prepare such audited financial
statements; (ii) Seller shall use reasonable efforts to provide to Buyer such
financial information and supporting documentation as are necessary and related
solely to the Property for Buyer’s auditors to prepare audited financial
statements; (iii) Seller will make available at reasonable times for interview
by Buyer and Buyer’s auditors the manager of the Property or other agents or
representatives of Seller responsible for the day-to-day operation of the Property
and the keeping of the books and records in respect of the operation of the
Property; and (iv) if Seller has audited financial statements with respect to
the Property, Seller shall promptly provide Buyer’s auditors with a copy of
such audited financial statements. If after the Closing Date Seller obtains an
audited financial statement in respect of the Property for a fiscal period
prior to the Closing Date that was not completed as of the Closing Date, then
Seller shall promptly provide Buyer with a copy of such audited financial
statement, and the foregoing covenant shall survive Closing.  It shall be a condition precedent to the
obligations of Buyer under this Agreement that Seller shall have complied with
the covenants set forth in this Section 3.3.3 as of the Closing Date.

The Property Information and all other information, other than matters
of public record or matters generally known to the public, furnished to, or
obtained through inspection of the Property by, Buyer, its affiliates, lenders,
employees, attorneys, accountants and other professionals or agents relating to
the Property, will be treated by Buyer, its affiliates, lenders, employees and
agents as confidential.  However,
notwithstanding the foregoing provisions or anything else to the contrary
contained in this Agreement (i) Buyer may disclose such information to its
consultants, attorneys, accountants, prospective investors and lenders, and
others who need to know the information for the purpose of assisting Buyer in
connection with the transaction that is the subject of this Agreement; (ii) the
foregoing covenant of confidentiality shall not be applicable to any
information published by Seller as public knowledge or otherwise

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available in the public domain; (iii) Buyer shall be permitted to
disclose such information as may be recommended by Buyer’s legal counsel in
order to comply with all financial reporting, securities laws and other legal
requirements applicable to Buyer, including any required disclosures to the
Securities and Exchange Commission; and (iv) any duty of confidentiality set
forth in this Agreement shall terminate upon Closing.

3.4           Representations
and Warranties.  All of
Seller’s Representations and Warranties are as of the date hereof and shall be
true in all material respects as of Closing or qualified as provided in
Paragraph 9.1.

3.5           Performance
of Covenants and Buyer’s Right of Termination.  Seller shall have timely performed all of its
covenants under this Agreement, including without limitation, the signing,
acknowledging and timely delivery of all documents and instruments to Escrow
Holder as required by Paragraph 5.2 below.

The Buyer’s conditions
contained in this Section 3 (“Buyer’s Conditions”) are intended solely for the
benefit of Buyer and its permitted assignee. 
Subject to the time limitations set forth in this Section 3, if any of
the Buyer’s Conditions are not satisfied, Buyer shall have the right in its
sole discretion to either waive in writing the Buyer’s Condition and proceed
with the purchase or terminate this Agreement. 
Seller agrees that in the event Buyer determines, in Buyer’s sole
discretion, that the Property is not suitable for its purposes, or that it is
in the interest of Buyer to terminate this Agreement for any other reason, then
Buyer shall have the right to terminate this Agreement by sending to Seller
written notice thereof which is received by Seller by facsimile (with a hard
copy of such notice sent by overnight courier) (hereinafter referred to as the “Notice
of Termination”) prior to the expiration of the Due Diligence Period.  Upon delivery by Buyer of such Notice of
Termination within the Due Diligence Period, this Agreement shall terminate
(except for those obligations which expressly survive termination of this
Agreement) and the Deposit shall be returned to Buyer.  If Buyer fails to send and Seller fails to
timely receive as provided herein a Notice of Termination prior to the
expiration of the Due Diligence Period, Buyer shall no longer have any right to
terminate this Agreement under this Section 3.

4.             CONDITIONS PRECEDENT TO SELLER’S PERFORMANCE.  Seller’s obligation to sell the Property is
subject to the satisfaction (or waiver) of all conditions set forth below
(which are for Seller’s benefit) within the time periods specified.

4.1           Performance of Covenants.  Buyer shall have timely performed all of its
covenants under this Agreement, including without limitation, the signing,
acknowledging and timely delivery of all documents, monies and instruments to
Escrow Holder as required by Paragraph 5.3 below.

4.2           Representations and Warranties.  All of Buyer’s Representations and Warranties
provided in Paragraph 9.2 shall be true as of Closing.

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4.3           Delivery of Documents.  Buyer shall have signed, acknowledged and
timely delivered all documents, monies, and instruments to Escrow Holder as
required by this Agreement.

4.4           Sale of
Adjacent Property.  It
shall be a condition precedent to Seller’s obligations to close under this
Agreement that the closing under that certain Purchase Agreement for Real
Property and Escrow Instructions of even date herewith between Seller and Buyer
for the approximately 3.778 acre parcel located adjacent to the Property (the “Land
Agreement”) shall have occurred concurrently with the Closing under this
Agreement.  If, prior to the consummation
of the Closing under this Agreement, the Land Agreement is terminated for any
reason other than a default of the seller thereunder, Seller shall have the
right to terminate this Agreement within 5 days after the termination of the
Land Agreement, in which event the Earnest Money shall be refunded to Buyer and
this Agreement shall be rendered null and void except for those obligations
which expressly survive termination of this Agreement

5.             CLOSING.

5.1           The
Closing.

(a)           The Closing shall occur
by no later than 3:00 p.m. on the Closing Date.

(b)           The terms “Close of
Escrow” and/or “Closing” are used in this Agreement to mean the time the Escrow
Holder has received the Special Warranty Deed and is prepared to record same
(i.e., having satisfied all escrow requirements for recording same) in the
office of the Harris County recorder.

(c)           The occurrence of the
Closing shall constitute each party’s agreement that all of its conditions
precedent to its obligation to perform have been satisfied or waived.

5.2           Seller’s Closing Obligations.  As of the Closing Date, Seller shall deliver
to Escrow Holder:

(a)           A Special Warranty Deed
in the form attached as Exhibit D (“Special Warranty Deed”), signed by the
Seller and acknowledged, covering the Land and Improvements on the Property;

(b)           An assignment and
assumption of all of the Leases and the Assumed Contracts to Buyer in the form
attached as Exhibit E (“Assignment of Leases and Contracts”) signed by the
Seller;

(c)           A general assignment of
assignable intangible property, licenses, permits and warranties relating to
the Property in the form attached as Exhibit F (“General Assignment”), signed
by the Seller;

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(d)           A certificate of
non-foreign status in the form attached as Exhibit G (“Seller’s Certificate”),
signed by the Seller;

(e)           A bill of sale for the
Personal Property in the form attached as Exhibit H (“Bill of Sale”),
signed by the Seller;

(f)            To the extent not
previously delivered to Buyer, original Estoppel Certificates obtained by
Seller as described in Section 16 below;

(g)           Evidence of the
termination of the management/leasing agreements with the current property
managers/leasing agents of the Property;

(h)           Certified rent roll for
the Property as of a date not earlier than three (3) business days before the
Closing Date;

(i)            Notice to tenants for
the Property from the Seller informing the tenants of a change in the ownership
and management of such Property;

(j)            Keys to the Property;

(k)           A Closing Statement for
the transaction contemplated by this Agreement (“Closing Statement”) signed by
the Seller;

(l)            The Title Company’s
customary seller’s affidavit;

(m)          To the extent any
security deposits under the Leases are held in the form of letters of credit,
such letters of credit in their full amount duly and effectively transferred to
Buyer;

(n)           Originals of the
Leases, Contracts, Licenses and Permits to the extent in Seller’s possession;

(o)           A Utility Escrow
Agreement signed by the Seller; and

(p)           Any additional funds or
instruments (signed by Seller and acknowledged, if appropriate) as may be
necessary to comply with this Agreement.

5.3           Buyer’s Closing Obligations.  As of the Closing Date, Buyer shall deliver
to Escrow Holder;

(a)           Cash equal to that
amount provided for in Paragraph 2.8(b). 
The cash must be by direct deposit or by wire transfer of funds actually
made in Escrow Holder’s depository bank account by 1:00 p.m. on the
Closing Date;

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(b)           The Assignment of
Leases and Contracts (or counterpart), signed by Buyer;

(c)           The General Assignment (or
counterpart), signed by Buyer;

(d)           Documents evidencing
Buyer’s good standing and valid existence in the State of Texas and authority
of Buyer and parties acting on behalf of Buyer to consummate this transaction;

(e)           Closing Statement;

(f)            A Utility Escrow
Agreement signed by the Buyer; and

(g)           Any additional funds
and instruments (signed by Buyer and acknowledged, if appropriate) as may be
necessary to comply with this Agreement.

5.4           Title
Policy.  Seller shall
cause the Title Company to issue the Title Policy in the amount of the Purchase
Price and subject only to the Permitted Exceptions to Buyer.  If Buyer or its lender desires any special
endorsements to the coverage provided by the Title Policy (including, without
limitation, modification of any standard Schedule B exceptions), Buyer
shall obtain and pay for these endorsements and modifications at the
promulgated rate and the lender’s policy at the simultaneous issue rate.  The issuance of any such endorsements or
modified coverage shall not delay the Closing. 
The issuance of the Title Policy shall be in lieu of any express or
implied warranty of Seller concerning title to the Property (other than any
warranties provided by the giving of the Special Warranty Deed), and Buyer
agrees that its only remedy for damages incurred by reason of any defect in the
title shall be against only the Title Company (except with respect to any
violation of any warranties provided by the giving of the Special Warranty Deed
).

6.             TERMINATION
OF THIS AGREEMENT.

6.1           Failure
of a Condition.  Except in
those instances where the escrow established by Escrow Holder (“Escrow”)
automatically terminates under the terms of this Agreement, if any condition is
not satisfied or waived within the time period and in the manner set forth in
this Agreement, then the party for whose benefit the condition exists (as
provided in Sections 3 and 4 of this Agreement) may terminate this
Agreement by delivering written notice to the other party and to Escrow Holder
after the end of the applicable time period.

6.2           Consequences.  If this Agreement terminates (or is properly
terminated by either party) as specifically provided by its terms, then each of
the following shall occur:  Escrow shall
be deemed automatically canceled regardless of whether cancellation
instructions are signed; neither party shall have any further obligation to the
other under this Agreement (except for breach of this Agreement as those
remedies may be limited hereunder; and as provided under Paragraphs 10.1, 10.2, 10.3 and 15.18
which shall survive termination of this Agreement); all rights granted to Buyer
under this Agreement

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and in the Property shall terminate, except
as otherwise provided herein; and, except as provided to the contrary herein or
in Paragraph 6.4 (concerning Seller’s right to retain the Deposit as
liquidated damages), Escrow Holder shall return all funds and documents then
held in Escrow to the party depositing the same.

6.3           Escrow
Cancellation Charges.  If
Escrow fails to close because of either party’s default, the defaulting party
shall be liable for all Escrow cancellation and all reasonable Title Company
charges.  If Escrow fails to close for
any other reason, Buyer and Seller shall each pay one-half of any Escrow cancellation
and Title Company charges.

6.4           Liquidated
Damages.  IN THE EVENT THAT BUYER FAILS TO CONSUMMATE
THIS AGREEMENT FOR ANY REASON, EXCEPT SELLER’S DEFAULT WHICH RESULTS IN A
RETURN OF THE EARNEST MONEY TO BUYER OR THE PERMITTED TERMINATION OF THIS
AGREEMENT BY EITHER SELLER OR BUYER AS HEREIN EXPRESSLY PROVIDED, SELLER SHALL
BE ENTITLED, AS ITS SOLE REMEDY, TO TERMINATE THIS AGREEMENT AND RECEIVE THE
EARNEST MONEY AS LIQUIDATED DAMAGES FOR THE BREACH OF THIS AGREEMENT, IT BEING
AGREED BETWEEN THE PARTIES HERETO THAT THE ACTUAL DAMAGES TO SELLER IN THE
EVENT OF SUCH BREACH ARE IMPRACTICAL TO ASCERTAIN AND THE AMOUNT OF THE EARNEST
MONEY IS A REASONABLE ESTIMATE THEREOF. 
IN THE EVENT THAT BUYER CLOSES UNDER THIS AGREEMENT AND THEN FAILS TO
FULLY AND TIMELY PERFORM ANY OF ITS OTHER OBLIGATIONS UNDER THIS AGREEMENT THAT
SURVIVE OR ARE PERFORMABLE AFTER THE CLOSING, SELLER MAY SEEK ALL REMEDIES
AVAILABLE AT LAW OR IN EQUITY.

	
  SELLER’S INITIALS

  	
   

  	
   

  	
  BUYER’S INITIALS

  	
   

  	
   

  

 

7.             GENERAL
ESCROW PROVISIONS.

7.1           Escrow
Instructions.  This
Agreement when signed by Buyer, Seller and Escrow Holder shall also constitute
Escrow Instructions to Escrow Holder.

7.2           Opening
Escrow.  When both
(i) this Agreement, fully signed or in signed counterparts, and
(ii) the Initial Deposit is delivered to Escrow Holder, Escrow shall be
deemed open and Escrow Holder shall immediately notify Buyer and Seller by
telephone and in writing of the date of Opening of Escrow.

7.3           General
Provisions. 
Notwithstanding anything to the contrary in this Agreement, the general
provisions of any closing escrow instructions, which are later signed by the
parties, are incorporated by reference to the extent they are not inconsistent
with the provisions of this Agreement. 
If there is any inconsistency between the provisions of those general
provisions and any of the provisions of this Agreement, the provisions of this
Agreement shall control.  If any
requirements relating to the duties or obligations of the Escrow Holder are
unacceptable to the Escrow Holder, or if the Escrow Holder requires additional
instructions, the parties agree to make any deletions, substitutions and
additions as counsel for Buyer and Seller shall mutually approve and which do
not materially alter the terms of this Agreement.  Any supplemental instructions

 11
 

 

shall be signed only as an accommodation to
Escrow Holder and shall not be deemed to modify or amend the rights of Buyer
and Seller, as between Buyer and Seller, unless the supplemental instructions
expressly so provide.  Seller and Buyer
shall indemnify escrow holder for any liability, costs and expenses by reason
of Escrow Holder’s good faith compliance with the terms of this Agreement.  In the event of a dispute, Escrow Holder
shall interplead the Deposit into a court of competent jurisdiction in Harris
County, Texas.

7.4           Prorations.  The following prorations shall be made
between Seller and Buyer at the Close of Escrow, based on the actual number of
days in the month in which the Closing occurs and a three hundred sixty-five
(365) day year:

(a)           Real property taxes,
utility fees (pursuant to the Utility Escrow Agreement referred to in Sections
5.2 and 5.3 of this Agreement) and deposits, common area maintenance expenses,
operating expenses for the Property, personal property taxes, if any, with
respect to the Personal Property, assessments, sewer charges, and other costs
and expenses attributable to the Property shall be prorated as of the Close of
Escrow.  To the extent any expenses or
charges for the Property are paid by tenants to the landlord under the Leases
on an estimated basis, for which a future reconciliation of actual to estimates
is to be performed, Seller and Buyer shall make an adjustment at Closing for
the applicable reconciliation period in which the Closing occurs based on a
comparison of the actual expenses for the Property paid by Seller as of the
Closing Date to the estimated expenses for the Property paid by tenants to
Seller.  The adjustment for such
reconciliation period shall be calculated as follows:  To the extent the aggregate amount of the
estimated payments that a tenant has made to Seller as of the Closing Date
exceeds such tenant’s share of the actual expenses for the Property paid by
Seller as of the Closing Date (after deducting such tenant’s applicable base
year amounts), Buyer shall receive a credit for the excess tenant
payments.  To the extent the aggregate
amount of the estimated payments that a tenant has made to Seller as of the
Closing Date is less than such tenant’s share of the actual expenses for the
Property paid by Seller as of the Closing Date (after deducting such tenant’s
applicable base year amounts), Seller shall receive a credit when and to the
extent such payments are collected, to the extent Seller is entitled to receive
from such tenant payments of such shortfall under the terms of such tenant’s
Lease.  Subsequent to Closing, Buyer
shall assume all rights and obligations to collect from or pay to Lease tenants
any reconciliation amounts.  Any
prorations based on an estimated basis shall be subject to reproration upon the
final determination of such amounts.

(b)           All rents, additional
rent, income, and other amounts payable to the owner or landlord of the
Property (collectively, “Property Rent”) shall also be prorated as of Close of
Escrow.  Accrued but unpaid Property Rent
existing as of the Closing shall not be prorated; provided,

 12
 

 

however, that Buyer shall use reasonable
efforts to collect such accrued but unpaid Property Rent (but shall not be
obligated to institute litigation or to incur expenses other than nominal
expenses), from and after the Closing, and Buyer shall remit any Property Rent
received from and after the Closing attributable to the period prior to the
Closing immediately to Seller.  For
purposes of this Agreement, any payments received by Buyer after Closing from a
tenant whose Property Rent was due and unpaid as of the Closing, shall be
applied first toward Property Rent due for the month of Closing; second, toward
Property Rent due for any period after the month of Closing; and then, to the
extent of any excess after such applications, shall be deemed Property Rent
received on account of the period prior to the month of Closing, up to the
amount of the delinquency and, as provided above, shall be remitted immediately
by Buyer to Seller.  Seller hereby
reserves its rights under the Leases to the extent any tenant under any of the
Leases is delinquent in the payment of Property Rent thereunder as of the
Closing Date, and Buyer shall from and after the Closing Date, reasonably
cooperate with Seller to the extent necessary to enable Seller to pursue
recovery of the delinquent Property Rent (except that Buyer shall have no
obligation to involve itself in any manner in any litigation instituted by
Seller).  Notwithstanding anything
contained herein to the contrary, Seller shall have the right to institute
legal proceedings to attempt to recover such delinquent amounts only if Buyer
has failed to collect such delinquency within seventy-five (75) days after the
Closing Date; provided, however, no such proceeding shall include the remedy of
dispossessing such tenant(s) from its leased premises in the Property.

(c)           Advance rents (which
have not been applied pursuant to the terms of the Leases) shall be transferred
or credited to Buyer at Closing.  The
full amount of the security deposits paid under the Leases shall be credited to
Buyer at Closing in the form of a reduction in the Purchase Price.

(d)           Any tenant improvement
or leasing commission costs or referral fees incurred by Seller from the
Effective Date through the Closing Date with respect to new leases or other
rental agreements (and renewals, extensions or expansions under existing leases
or rental agreements) executed from the Effective Date through the Closing Date
shall initially be paid by Seller if such payments are due prior to Closing
but, except for an amount equal to $115,781 in connection with tenant McDermott
which Buyer shall be responsible to pay and for which Seller shall provide a
partial credit to Buyer at Closing in the amount of $19,312, Buyer shall
reimburse Seller for such costs/payments on the Closing Date.  With respect to any lease or other rental
agreement entered into after the Effective Date, Buyer will only be responsible
for such costs or fees if Buyer approves such lease or other rental agreement
in writing, prior to lease execution, such approval not to be unreasonably
withheld, conditioned or delayed.  Buyer
shall provide its written consent or

 13
 

 

rejection of any proposed lease (or
amendment, expansion modification or other rental agreement) within three (3)
business days of receipt of a copy of the proposed lease terms.  Buyer’s failure to provide such written
rejection or consent within such three (3) business day period shall be deemed
approval of the proposed lease and the associated tenant improvement costs and
leasing commission fees.

(e)           Buyer and Seller agree
to prorate real estate taxes and assessments for the period for which such
taxes are assessed, regardless of when payable. 
Any taxes to be paid at or prior to Closing shall be prorated based upon
the amounts actually paid, with Buyer being charged and Seller being credited
at Closing with that portion of such taxes and assessments which relates to the
period on or after the Closing Date.  If
taxes and assessments for the fiscal year in which Closing occurs have been
determined but have not been paid before Closing, Seller shall be charged and
Buyer credited at Closing with an amount equal to that portion of such taxes
and assessments which relates to the period before the Closing Date and Buyer
shall pay the taxes and assessments prior to their becoming delinquent.  If the actual taxes and assessments are not
known at Closing, the proration shall be based upon the most recent assessed
values and tax rates.  To the extent that
the actual taxes and assessments paid differ from the amount apportioned at
Closing, the parties shall make all necessary adjustments by appropriate
payments between themselves within sixty (60) days of the issuance of final tax
bills.

(f)            After Closing, Buyer
shall provide Seller with such information and copies of invoices and other
documents and records as Seller shall reasonably request, evidencing that Buyer
has remitted to Seller all amounts required as a result of any reconciliation
of the expenses of the Property referenced in Paragraph 7.4(a) above to the
estimated payments of such expenses received from the tenants of the Property
(including any post-closing adjustments thereto).

(g)           If any errors or omissions
are made regarding adjustments and prorations, the parties shall make the
appropriate corrections promptly upon the discovery thereof.  If any estimations are made at the Close of
Escrow regarding adjustments or prorations, the parties shall make the appropriate
correction promptly when accurate information becomes available.  Any corrected adjustment or proration shall
be paid in cash to the party entitled to the adjustment.  If real property taxes are based on an
estimate, such real property taxes shall be reprorated, upon written request of
either party, upon receipt of the actual tax bill.  Notwithstanding anything to the contrary
above, the above right to adjustment shall terminate nine (9) months after
Close of Escrow, provided that Buyer has delivered to Seller the final 2006
expense reconciliation for charges to tenants.

 14
 

 

7.5           Payment
of Costs.  Seller shall
pay for (i) the base premium charges for the basic Texas Owner’s Title
Policy (with no endorsements) (“Standard Premium”), (ii) one-half (1⁄2) of
all Escrow costs and fees (not including Buyer’s lender’s escrow costs), and
(iii)  other costs customarily paid by Seller of similar properties in
Harris County, Texas.  Buyer shall pay
(i) the cost to update the Survey; (ii) one-half (1⁄2) of all Escrow costs
and fees (not including money lender’s escrow costs); (iii) any additional
Title Company charges (such charges to be at the promulgated rate for any
endorsements and simultaneous issue rate for any loan policy) in excess of the
Standard Premium (including, without limitation, any endorsements and extended
coverage); (iv) all transfer taxes (v) all costs arising from or relating
to the financing of this transaction, including without limitation, any money
lender’s escrow fees charged by the Escrow Holder; and (vi) other costs
customarily paid by buyers of similar properties in Harris County, Texas.

7.6           Escrow
Holder Authorized to Complete Blanks.  If necessary, Escrow Holder is authorized to
insert in all blanks in the Closing documents, including the date of
recordation of the  Special Warranty
Deed.

7.7           Recordation
and Delivery of Funds and Documents.  When Buyer and Seller have satisfied their
respective Closing obligations under Paragraphs 5.2 and 5.3 and each of
the conditions under Sections 3 and 4 have either been satisfied or
waived, and Escrow Holder is in a position to perform all of the following
actions, Escrow Holder shall promptly undertake all of the following in the
manner indicated.

(a)           Prorate all matters as
described in Paragraph 7.4 and as reflected on the Closing Statement, as
approved by Buyer and Seller.

(b)           Cause the Special
Warranty Deed, and any other documents which the parties hereto may mutually
direct, to be recorded in the Deed Records of Harris County, Texas in the order
set forth in this Agreement.

(c)           Disburse funds
deposited by Buyer with Escrow Holder towards payment of all items chargeable
to the account of Buyer pursuant hereto in payment of such costs including,
without limitation, the payment of the Purchase Price to Seller in accordance
with the Closing Statement.

(d)           Deliver originals and
conformed copies of all documents to Seller and Buyer, as appropriate.

(e)           Issue a Title Policy to
Buyer, provided that Escrow Agent shall only be obligated to deliver a proforma
Title Policy at the Closing.

8.             BROKERAGE COMMISSION.  Upon the Close of Escrow, Seller shall pay a
real estate brokerage commission to Cushman & Wakefield of Texas, Inc. (“Broker”)
in accordance with respect to this transaction in accordance with Seller’s separate
agreement with the Broker.  It is
understood that neither Seller nor Buyer has engaged a broker or finder in
connection with this transaction other than the Broker.  Each party shall indemnify and hold the

 15
 

 

other harmless from and against all claims,
liabilities, costs, damages and expenses (including, without limitation,
attorneys’ fees and costs), resulting from or arising out of any claims for
finder’s fees or commissions arising out of any contract or commitments made by
or through the indemnifying party by any broker or finder other than the
Broker.  Seller shall indemnify and hold
Buyer harmless from and against all claims, liabilities, costs, damages and
expenses (including, without limitation, attorneys’ fees and costs), resulting
from or arising out of any claims for finder’s fees or commissions arising out
of any contract or commitments made by or through Seller by Broker.

9.             REPRESENTATIONS
AND WARRANTIES.

9.1           Seller’s
Representations and Warranties. 
In consideration of Buyer entering into this Agreement and as an
inducement to Buyer to buy the Property from Seller, Seller makes the following
representations and warranties, each of which is material and is being relied
upon by Buyer:

(a)           Formation
and Authority.  Seller is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and duly qualified to do business in Texas.  Seller has the legal right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby, the execution, delivery and performance of this Agreement
and the documents to be delivered by Seller pursuant to Paragraph 5.2 hereof
have been duly authorized and do not, and at the time of Closing will not,
violate any provision of any agreement to which Seller is a party or to which
it is subject or any law, judgment or order applicable to Seller, and no other
action by Seller is requisite to the valid and binding execution, delivery and
performance of this Agreement, except as otherwise expressly set forth herein.

(b)           Employees.  Seller has no employees at the Property.

(c)           Foreign
Person Affidavit.  Seller
is not a foreign person as defined in Section 1445 of the Internal Revenue
Code of 1986, as amended.

(d)           Lawsuits.  Seller has not initiated and has not received
written notice of any suits, proceedings or governmental investigations pending
or threatened in writing before any agency, court or other governmental
authority which relate to the Property.

(e)           Notices
of Violations.  Seller has
not received any written notice of any violation of applicable law, ordinance
or regulation with respect to the Property which has not been remedied or which
has not otherwise been disclosed by Seller to Buyer in the information and
materials previously delivered by Seller to Buyer.

 16

 

(f)            Condemnation.  Seller has not received any written notice
from any governmental authority of any pending or threatened proceedings in
eminent domain which would adversely affect the Property or any portion
thereof.

(g)           Leases.  The list of Leases attached as Exhibit B
is true and correct in all material respects. 
All of the Leases are in full force and effect. Seller has not received
any written notice from any tenant claiming a default by Seller, as landlord,
under any of the Leases, which default remains uncured as of the Effective
Date.  Seller has not delivered any
written notices of default to any of the tenants under the Leases that remain
uncured.

(h)           Right of First Refusal/Option to Purchase.  Seller has no knowledge of any unrecorded
right of first refusal or option to purchase the Property.

(i)            Insolvency Proceedings.  No proceedings under any federal or state
bankruptcy or insolvency laws have been commenced by or against Seller which
have not been terminated; to Seller’s knowledge, without duty of inquiry or
investigation, no general assignment for the benefit of creditors has been made
by Seller; and to Seller’s knowledge, without duty of inquiry or investigation,
no trustee or receiver of Seller’s property has been appointed.

The representations and
warranties made by Seller in this Agreement shall survive the recordation of
the Special Warranty Deed for a period of one hundred eighty (180) days and any
action related to a breach of any representation or warranty must be made and
filed within said one hundred eighty (180) day period.  Notwithstanding the foregoing, no claim for a
breach of any representation or warranty of Seller shall be actionable if the
breach in question results from or is based upon a condition, state of facts or
other matter of which Buyer had actual knowledge prior to Closing.

9.2           Buyer’s
Representations and Warranties. 
In consideration of Seller entering into this Agreement and as an
inducement to Seller to sell the Property to Buyer, Buyer makes the following
representations and warranties, each of which shall be true and accurate as of
the Effective Date and Close of Escrow, and each of which is material and is
being relied upon by Seller:

(a)           Authority.  Buyer is a limited liability company, in good
standing, and qualified to do business in Texas.  Buyer has the legal right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby, and the execution, delivery and performance of this
Agreement and the documents to be delivered by Buyer pursuant to Paragraph 5.3
hereof have been duly authorized and no other action by Buyer is requisite to
the valid and binding execution,

 17
 

 

delivery and performance of this Agreement,
except as otherwise expressly set forth herein.

(b)            “As Is”.  Except for the representations and warranties
expressly provided in Paragraph 9.1 above and those certain covenants of
Seller appearing in Section 17 below and the covenants, representations and
warranties made by Seller pursuant to the documents executed by Seller after
the Effective Date in connection with this Agreement, including, without
limitation, those documents listed in Paragraph 5.2 hereof, Buyer agrees
(i) that it is purchasing the Property on as “As Is” basis and based on
its own investigation of the Property, (ii) that neither Seller nor Seller’s
employees, agents, brokers, representatives, managers, property managers, asset
managers, officers, principals, attorneys or contractors (collectively, “Seller’s
Representatives”) have made any warranty, representation or guarantee, express,
implied or statutory, written or oral, including, without limitation, any
implied warranty of merchantability or fitness for any use or purpose or of
reasonable workmanship, concerning the Property or any of the products or
improvements located thereon or therein (including, without limitation, the
Improvements), and (iii) that neither Seller nor Seller’s Representatives
have made any warranty, representation or guarantee as to any government
limitation or restriction, or absence thereof, pertaining to the Property, or
as to the presence or absence of any latent defect, subsurface soil condition,
environmental condition, hazardous substance, toxic waste or any other matter
pertaining to the physical condition (title, mapping, grading, construction, or
otherwise) of the Property.  During the
Due Diligence Period, Buyer intends to become familiar with the Property and
its suitability for Buyer’s intended use. 
Buyer acknowledges that Buyer will be provided access to the Property,
and will have an adequate opportunity to review any and all aspects of the
Property Buyer deems relevant to its decision to purchase the Property,
including the Documents (as defined below). 
Except for the representations and warranties expressly provided in
Paragraph 9.1 above and those certain covenants of Seller appearing in
Section 17 below and the covenants, representations and warranties made by
Seller after the Effective Date in connection with this Agreement, including,
without limitation, those documents listed in Paragraph 5.2 hereof, all of
Seller’s and Seller’s Representatives’ statements whenever made, are made only
as an accommodation to Buyer and are not intended to be relied or acted upon in
any manner by Buyer.  All documents, records,
agreements, writings, statistical and financial information and all other
information (collectively, “Documents”) which have been given to Buyer by
Seller, or Seller’s Representatives, have been delivered as an accommodation to
Buyer and without any representation or warranty (except as specifically
provided above) as to the sufficiency, accuracy, completeness, validity,
truthfulness, enforceability, or assignability of any of the Documents, all of
which Buyer relies on at its

 18
 

 

own risk. 
Buyer acknowledges that neither Seller nor Seller’s Representatives have
made any representation regarding the availability of, or amount of, any fee,
assessment, or cost relating to the development, construction, mapping, access,
occupancy or ownership of the Property. 
Seller and Buyer acknowledge and agree that the terms of this Paragraph
9.2(b) shall survive the Closing.

(c)           Seller’s
Responsibility.  Buyer
represents and covenants that Seller shall not have any liability, obligation
or responsibility of any kind with respect to the following:

(i)                                  The
content or accuracy of any report, opinion or conclusion of any soils or
environmental experts or other engineer or other person or entity who has
examined the Property;

(ii)                               The
content or accuracy of any information released to Buyer by an engineer or
planned in connection with the development of the Property;

(iii)                            Except
as otherwise contained in a representation or warranty of Seller contained in
Paragraph 9.1, any of the items delivered to Buyer in connection with Buyer’s
review of the condition of the Property; and

(iv)                           The
content or accuracy of any other cost, projection, financial or marketing
analysis or other information given to Buyer by Seller or Seller’s
Representatives or reviewed by Buyer with respect to the Property.

(d)           Truth of
Representations.  The
representations and warranties of Buyer set forth in this Agreement shall be
true on and as of the Close of Escrow as if those representations and
warranties were made on and as of such time.

10.           ENTRY ON
PROPERTY.

10.1         License
to Enter for Investigation. 
Until the Close of Escrow or this Agreement is terminated, Buyer and
Buyer’s employees and agents shall have a limited license to enter upon the
Property, during usual business hours, after receipt by Seller or Seller’s
property manager during normal business hours of twenty-four (24) hours advance
notice of its intention to enter the Property (the “License”) so long as the
activities do not damage the Property or involve any invasive testing and
subject to any rights of tenants under the Leases.  After any entry, Buyer shall promptly restore
the Property to the Property’s condition before Buyer entered on the
Property.  Buyer shall not allow any
dangerous or hazardous condition to be created on or arise from Buyer’s

 19
 

 

entry on the Property.  Buyer shall comply with all applicable laws
and governmental regulations applicable to its entry to the Property.  Buyer shall keep the Property free and clear
of all mechanics’ liens and materialmen’s liens arising out of any of Buyer’s
activities.  Upon the occurrence of a
default by Buyer (after giving effect to any applicable notice or cure period)
under this Agreement, the License may be revoked by Seller upon written notice
to Buyer and shall in any event be deemed revoked upon termination of this
Agreement.  Buyer acknowledges and agrees
that at no time prior to Closing shall it or any of its agents, contractors or
employees have any direct contact with the tenants of the Property without
first receiving prior written approval therefor from Seller, which approval
shall not be unreasonably withheld, conditioned or delayed.  Notwithstanding anything contained in this
Paragraph 10.1 to the contrary, Buyer shall not conduct any invasive and/or
destructive testing, including environmental sampling or testing at the
Property without first obtaining Seller’s prior written consent, which consent
may be withheld in Seller’s sole discretion. 
If Seller grants its consent to any invasive testing, Buyer shall submit
to Seller for Seller’s written approval Buyer’s operational plan for conducting
the tests or investigations.  Seller may
have a representative present during any such approved tests or investigations
and Buyer shall provide Seller with prior notice of any tests or investigations.

10.2         Indemnification
on Entries.  Buyer shall
indemnify, defend (with counsel selected by Seller), and hold harmless Seller
and Seller’s officers, directors, shareholders, employees, agents, managers,
property managers, asset managers, attorneys, representatives, subsidiary and
parent corporations, affiliated entities, and the above parties’ successors and
assigns excluding, however, any person or entity that held title to the
Property or any portion thereof prior to the date the applicable Seller
acquired title thereto (each, a “Predecessor In Title”), and the Property, (all
of the above parties (other than any Predecessor In Title) and the Property are
collectively referred to as “Indemnified Parties and Property”) from and
against all claims, losses, liens, liabilities, damages, expenses and costs
(including, without limitation, attorneys’ fees and costs) arising from or
relating to the entry of Buyer and its representatives, agents and contractors
on the Property (whether occurring before or after the date hereof), provided,
however, that Buyer shall have no such obligations with respect to pre-existing
conditions except to the extent that Buyer exacerbates such pre-existing
conditions.  Buyer’s obligations under
this paragraph shall survive the Closing and the termination of this Agreement
and shall not be limited by any insurance required under Paragraph 10.3).

10.3         Insurance
on Entries.  Buyer shall
maintain or cause to be maintained Commercial General Liability insurance to
cover Buyer’s activities on the Property. 
At least two (2) days before entering on the Property, Buyer shall
deliver to Seller a Certificate of Insurance evidencing compliance with the
terms of this paragraph.  The liability
insurance policy shall have a combined single limit per occurrence liability
limit of at least $2,000,000.00 for premises liability, bodily injury, personal
injury and property damage, shall be primary and noncontributing with any
insurance which may be carried by Seller, and shall name Seller as an additional
insured, and shall be written by companies rated A+XII or better in “Best’s
Insurance Guide” and authorized to do business in Texas.  The insurance policy shall be maintained and
kept in effect by Buyer (or Buyer’s agent), at Buyer’s agent’s) sole expense,
at all times during the term of this

 20
 

 

Agreement. 
The insurance policy shall provide that it may not be canceled or
modified without at least thirty (30) days prior written notice to Seller, or
until this Agreement is terminated.

11.           CONDEMNATION
OR CASUALTY.

11.1         Condemnation.  Seller, upon actually becoming aware of same,
shall promptly notify Buyer, in writing, of any condemnation proceeding
affecting the Property commenced prior to the Close of Escrow or upon receipt
of any written notice of a potential condemnation.  If, by reason of any such proceeding, the use
or operation of the Property is materially impaired in Buyer’s commercially
reasonable determination, Buyer may, at its option, elect either to (i)
terminate this Agreement, in which event, the Deposit shall be refunded, or
(ii) continue the Agreement in effect, in which event, upon the Close of
Escrow, Seller shall assign to Buyer, and Buyer shall be entitled to receive,
any compensation, awards, or other payments or relief resulting from such
condemnation proceeding.

11.2         Casualty.  If, before the Closing, all or any portion of
the Property is damaged by a casualty (a “Casualty”), Seller shall notify Buyer
of this event immediately after actual knowledge of the Casualty and shall use reasonable
efforts to provide Buyer Seller’s good faith estimate of the cost of
restoration.  If the cost to restore the
same will exceed One Million and No/Dollars ($1,000,000.00), Buyer shall have
the option to either (i) terminate this Agreement as of the date of the
Casualty, in which event the Deposit, plus interest accrued thereon net of any
and all escrow and investment costs and expenses, shall be refunded to Buyer or
(ii) continue with this transaction in accordance with the terms of this
Agreement and without any adjustment in the Purchase Price (except a credit in
the amount of the “deductible” applicable to Seller’s insurance), by delivery
of written notice of Buyer’s election to Seller and Escrow Holder within five
(5) days after receipt of Seller’s notice. 
If Seller and Escrow Holder receive Buyer’s election to terminate this
transaction or have not received any notice from Buyer within the 5-day period,
then this transaction shall terminate, and the Deposit shall be returned to
Buyer, as provided in Paragraph 6.2. 
If Buyer elects to continue with this transaction, then the Casualty
proceeds from any insurance obtained by Seller for the Property which are
payable as a result of such Casualty, if any, shall become the property of and
be assigned to Buyer upon Close of Escrow, and Buyer shall receive a credit
against the Purchase Price in the amount of the “deductible” applicable to
Seller’s insurance coverage.  In the
event the damage to the Property shall cost less than $1,000,000 to repair, replace
or restore, the Casualty proceeds from any insurance obtained by Seller for the
Property which are payable as a result of such Casualty, if any, shall become
the property of and be assigned to Buyer upon Close of Escrow, and Buyer shall
receive a credit against the Purchase Price in the amount of the “deductible”
applicable to Seller’s insurance coverage.

12.           WAIVER AND RELEASE BY BUYER.  Buyer hereby waives, releases and
relinquishes any and all rights and remedies Buyer may now or hereafter have
against the Indemnified Parties and Property, whether known or unknown, with
respect to any past, present or future presence, existence or release of any
hazardous or toxic waste, or hazardous substances

 21
 

 

or materials of any kind or nature (“Hazardous
Materials”) on, under or about the Property or surrounding land or with respect
to any past, present or future violations of any federal, state, municipal or
local rules, regulations, laws, orders or the common law, now or hereafter
enacted, regulating or governing the use, handling, storage or disposal of
Hazardous Materials or designed to protect human health or the environment
(collectively, “Environmental Laws”) including, without limitation, any and all
rights Buyer may now or hereafter have to seek contributions from the
Indemnified Parties and Property under Section 113(f)(i) of the
Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”),
as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”)
(42 U.S.C. §9613), as the same may be further amended or replaced by any
similar law, rule or regulation.  Buyer
hereby further releases the Indemnified Parties and Property from any and all
liability whether known or unknown now or hereafter existing with respect to
the Property under Section 107 of CERCLA (42 U.S.C. §9607).

Buyer hereby releases Seller from such claims heretofore and hereafter
arising, whether now known or unknown by Buyer. 
In this connection and to the extent permitted by law, Buyer hereby
agrees, represents and warrants that Buyer realizes and acknowledges that
factual matters now unknown to it may have given or may hereafter give rise to
claims, debts and controversies, which are presently unknown, unanticipated and
unsuspected, and Buyer further agrees, represents and warrants that the waivers
and releases herein have been negotiated and agreed upon in light of that
realization and that Buyer nevertheless hereby intends to release, discharge
and acquit Seller and the other Indemnified Parties from any such unknown
claims, debts and controversies.

Seller makes no representation and warranty regarding whether the
Property is located in a flood zone or whether the Property is subject to flood
risks.  Buyer specifically acknowledges
that the Federal Emergency Management Agency (“FEMA”) in conjunction with
Harris County, is developing new FEMA Flood Insurance Rate Maps and that flood
plain boundaries in Harris County are subject to revisions and change.

Seller has given Buyer material concessions regarding this transaction
in exchange for Buyer agreeing to the provisions of this Section 12.  Seller and Buyer have each initialed this
Section 12 to further indicate their awareness and acceptance of each and every
provision hereof.  The provisions of this
Section 12 shall survive the Closing and shall not be deemed merged into any
instrument or conveyance delivered at the Closing.

	
  Buyer’s
  Initials:

  	
   

  	
   

  	
  Seller’s
  Initials:

  	
   

  	
   

  

 

13.           CONTRACTS.  All service contracts, construction contracts
and management contracts for the Property entered into by Seller with respect
to the Property (the “Contracts”) are listed on Exhibit J to this
Agreement.  Seller shall deliver copies
of all such Contracts to Buyer within five (5) days after the Effective
Date.  Buyer shall notify Seller prior to
the expiration of the Due Diligence Period which Contracts, Buyer desires to
assume at Closing (the “Assumed Contracts”). 
Seller shall assign to Buyer all of Seller’s right, title and interest
under the Assumed Contracts at Close of Escrow and Buyer shall assume
same.  Seller shall send termination
notices, at its sole cost and expense, for all other Contracts that are not
Assumed Contracts on the Closing Date.

 22
 

 

14.           REMEDIES AGAINST SELLER.  IF CLOSE OF ESCROW AND THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT DO NOT OCCUR BY REASON OF ANY
DEFAULT OR BREACH BY SELLER IN ITS OBLIGATION TO TRANSFER THE PROPERTY TO
BUYER, BUYER SHALL BE ENTITLED AS ITS SOLE AND EXCLUSIVE REMEDY TO EITHER (i)
THE RETURN OF THE DEPOSIT AND ANY INTEREST ACTUALLY ACCRUED THEREON PLUS
REIMBURSEMENT BY SELLER FOR THE ACTUAL OUT-OF-POCKET UNRELATED THIRD PARTY
COSTS INCURRED BY BUYER IN CONNECTION WITH THIS AGREEMENT NOT TO EXCEED
SEVENTY-FIVE THOUSAND DOLLARS ($75,000) IN THE AGGREGATE UNDER THIS AGREEMENT
AND THE LAND AGREEMENT; OR (ii) THE REMEDY OF SPECIFIC PERFORMANCE; AS BUYER
MAY ELECT, AS BUYER’S SOLE AND EXCLUSIVE REMEDIES FOR SUCH BREACH OR DEFAULT,
AND BUYER SHALL NOT BE ENTITLED OR HAVE ANY RIGHT TO RECEIVE ANY OTHER DAMAGES
OR OTHER RELIEF, LEGAL OR EQUITABLE; PROVIDED, HOWEVER, IF SELLER’S DEFAULT IS
SUCH THAT SPECIFIC PERFORMANCE CANNOT BE GRANTED AS A JUDICIAL REMEDY AS A
RESULT OF THE SALE OF THE PROPERTY BY SELLER TO A BONA FIDE PURCHASER, THEN
BUYER MAY SEEK ANY AND ALL OTHER REMEDIES AVAILABLE AT LAW OR IN EQUITY.  IN THE EVENT BUYER CLOSES UNDER THIS
AGREEMENT AND THEN SELLER FAILS TO FULLY PERFORM ANY OF ITS OTHER OBLIGATIONS
UNDER THIS AGREEMENT THAT SURVIVE OR ARE PERFORMABLE AFTER CLOSING BUYER MAY
SEEK ALL REMEDIES AVAILABLE AT LAW OR IN EQUITY.

	
  

  	
    Seller’s
  Initials

  	
   

  	
   

  	
    Buyer’s Initials

  

 

15.           GENERAL
PROVISIONS.

15.1         Assignment.

(a)           This Agreement shall be
binding upon and shall inure to the benefit of Buyer and Seller and their
respective successors and permitted assigns.

(b)           Buyer may only assign
this Agreement and any interest or right under this Agreement or under the
Escrow after obtaining Seller’s prior written consent, in Seller’s sole and
absolute discretion; provided that Seller hereby consents with respect to any
assignment by Buyer to any Affiliate. For purposes of this Section 15.1, the
term “Affiliate” shall mean: (a) an entity that controls, is controlled by, or
is under common control with BUYER; (b) any partnership in which BUYER or BUYER’s
controlling member is the general partner; or (c) any fund or entity sponsored
by BUYER.

15.2         Attorneys’
Fees and Costs.  In any
action or proceeding between the parties to enforce or interpret any of the
terms or provisions of this Agreement, the prevailing party in the action or
proceeding shall be entitled to recover from the non-prevailing party, in
addition to damages, injunctive relief or other relief, its reasonable

 23
 

 

costs and expenses, including, without
limitation, costs and reasonable attorneys’ fees, both at trial and on appeal.

15.3         Notices
and Approvals.  Any
notice, approval, disapproval, demand or other communications required or
permitted to be given by any provision of this Agreement (“notice”) which
either party desires to give to the other party or to Escrow Holder shall be
deemed to be sufficiently given or served upon the earlier to occur of the
following:  (i) when actually
received at the office of the party to whom the notice is to be delivered;
(ii) when delivered personally to the office of the party to whom the
notice is to be delivered; (iii) on the date delivery is first attempted
by a nationally-recognized overnight commercial courier; or (iv) when
given by transmittal over electronic transmitting devices, such as Telex or
telecopier machine with a printed confirmation, if the party to whom the notice
is sent has such a device in its office and such transmission is made during regular
business hours, provided a complete copy of any notice so transmitted shall
also be sent by overnight courier in the same manner as required for couriered
notices.  Notice may be served as herein
provided upon the parties or their attorneys, with notice upon either one of
them being sufficient.

15.4         Controlling
Law.  This Agreement shall
be deemed to be entered into within Harris County and shall be construed under
the laws of the State of Texas in effect at the time of the signing of this
Agreement.  The parties consent to the
jurisdiction of the Texas courts with venue in Harris County, Texas.

15.5         Titles
and Caption.  Titles and
captions are for conveniences only and shall not constitute a portion of this
Agreement.  References to section and
paragraph numbers are to sections and paragraphs in this Agreement, unless
expressly stated otherwise.

15.6         Interpretation.  As used in this Agreement, masculine,
feminine or neuter gender and the singular or plural number shall each be
deemed to include the others where and when the context so dictates.  The word “including” shall be construed as if
followed by the words “without limitation.” 
If a dispute over the interpretation or construction of any provision,
term or word contained in this Agreement, this document shall be interpreted
and construed neutrally, and not against either Buyer or Seller.

15.7         No Waiver.  A waiver by either party of a breach of any
of the covenants, conditions or obligations under this Agreement to be
performed by the other party shall not be construed as a waiver of any
succeeding breach of the same or other covenants, conditions or obligations of
this Agreement.

15.8         Modifications.  Any alteration, change or modification of or
to this Agreement, in order to come effective, shall be made in writing and in
each instance signed on behalf of each party.

15.9         Severability.  If any term or provision of this Agreement,
or its application to any party or set of circumstances, shall be held, to any
extent, invalid or unenforceable, the remainder of this Agreement, or the
application of the term or

 24
 

 

provision to persons or circumstances other
than those as to whom on which it is held invalid or unenforceable, shall not
be affected, and each shall be valid and enforceable to the fullest extent
permitted by law.

15.10       Integration
of Prior Agreements and Understandings.  This Agreement contains the entire
understanding between the parties relating to the transactions contemplated by
this Agreement.  All prior or
contemporaneous agreements, understandings, representations, warranties and
statements, whether oral or written, expressed or implied, are superseded in
their entirety by this Agreement, and are of no force or effect, in whole or in
party.

15.11       Not an
Offer.  Seller’s delivery
of unsigned copies of this Agreement is solely for the purposes of review by
Buyer, and neither the delivery nor any prior communications between Buyer and
Seller, whether oral or written, shall in any way be construed as an offer by
Seller, nor in any way imply that Seller is under any obligation to enter the
transaction which is the subject of this Agreement.  The signing of this Agreement by Buyer
constitutes an offer which shall not be deemed accepted by Seller unless and until
Seller has signed this Agreement and delivered a duplicate original to Buyer.

15.12       Time of
Essence.  Time is
expressly made of the essence as to the performance by Seller and Buyer of each
and every obligation and condition of this Agreement.

15.13       Possession
of Property.  Buyer shall
be entitled to possession of the Property only after the Closing and not
before.

15.14       Counterparts.  This Agreement may be signed in multiple
counterparts which shall, when signed by all parties, constitute a binding
agreement.

15.15       Exhibits
Incorporated by Reference. 
All exhibits attached to this Agreement are incorporated in this
Agreement by this reference.

15.16       Computation
of Time.  The time in
which any act is to be done under this Agreement is computed by excluding the
first day (such as the Effective Date), and including the last day, unless the
last day is a holiday or Saturday or Sunday, and then that day is also
excluded.  All references to time shall
be deemed to refer to the time in the Central Time Zone.

15.17       Joint and
Several Liability.  If Buyer
is composed of more than one individual or entity, all obligations and
liabilities of Buyer under this Agreement shall be joint and several as to each
of those individuals or entities who compose Buyer.

15.18       Buyer’s
Work Product Concerning the Property.  If for any reason Buyer fails to purchase the
Property, Buyer shall immediately deliver to Seller, at no cost or expense to
Seller, except for cost of copies, copies of all test results, studies, plans,
reports or other materials or work product prepared by Buyer, or its agents,
employees or contractors, and all documents received from Seller, related to
the Property (“Work

 25
 

 

Product”). 
Notwithstanding any provision to the contrary, Work Product shall not
include any documents subject to attorney-client privilege or other documents
subject to confidentiality provisions that prevent Buyer’s disclosure of such
documents.  Buyer’s obligation hereunder
shall survive termination of the Agreement. 
Following delivery, Seller may use this Work Product for any purpose.

15.19       No
Obligations to Third Parties. 
The execution and delivery of this Agreement shall not be deemed to
confer any rights upon, nor obligate any of the parties to this Agreement to,
and person or entity other than Seller and Buyer.  There are not any third party beneficiaries
to this Agreement.

15.20       Limitation of Liability. No present or future partner, member,
director, officer, shareholder, employee, advisor or agent of or in Buyer or
Seller shall have any personal liability, directly or indirectly, under or in
connection with this Agreement or any agreement made or entered into by Seller
or Buyer under or in connection with the provisions of this Agreement, or any
amendment or amendments to any of the foregoing made at any time or times, heretofore
or hereafter, and Seller and Buyer and their respective successors and assigns
shall look solely to Buyer’s or Seller’s assets, respectively, for the payment
of any claim or for any performance, and Seller and Buyer hereby waive any and
all such personal liability.  The
limitations of liability contained in this paragraph are in addition to, and
not in limitation of, any limitation on liability applicable to Buyer or Seller
provided elsewhere in this Agreement or by law. 
Notwithstanding the foregoing and anything to the contrary
contained in this Agreement, the maximum liability of Seller for any claim,
liability or recourse pursuant to this Agreement and the Land Agreement shall
be One Million Dollars ($1,000,000) in the aggregate), regardless of the value
of Seller’s interest in the Property or the property that is the subject of the
Land Agreement.

15.21       Patriot
Act.  Seller and Buyer
represent and warrant that they are not acting, directly or indirectly, for or
on behalf of any person, group, entity, or nation named by the United States
Treasury Department as a Specially Designated National and Blocked Person, or
for or on behalf of any person, group, entity, or nation designated in
Presidential Executive Order 13224 as a person who commits, threatens to
commit, or supports terrorism; and that they are not engaged in this
transaction directly or indirectly on behalf of, or facilitating this
transaction directly or indirectly on behalf of, any such person, group,
entity, or nation.  Each party hereby agrees
to defend, indemnify, and hold harmless the other party from and against any
and all claims, damages, losses, risks, liabilities, and expenses (including
reasonable attorneys’ fees and costs) arising from or related to any breach of
the foregoing representation and warranty.

15.22       Notice to Buyer.  The property is located in an
Energy Corridor District, a special taxing district in Harris County, Texas,
which currently levies taxes at a rate of $0.10 per $100 of Harris County
assessed value.  Special taxing districts
may be subject to general obligation indebtedness that is paid by revenues
produced from annual tax levies on the taxable property within such
districts.  Property owners in such
districts may be placed at risk for increased mill levies and excessive tax
burdens to support the servicing of such debt where circumstances arise
resulting in the inability of such a

 26
 

 

district to discharge such indebtedness
without such an increase in mill levies. 
Buyer should investigate the debt financing requirements of the
authorized general obligation indebtedness of such districts, existing mill
levies of such district servicing such indebtedness, and the potential for an
increase in such mill levies.

16.           ESTOPPEL CERTIFICATES.  Seller shall use
reasonable, diligent and good faith efforts to obtain from the tenants of the
Property an executed estoppel certificate (“Estoppel Certificate”), dated no
earlier than thirty (30) days prior to and delivered not later than five (5)
days prior to the Closing Date (“Estoppel Return Date), substantially in the
form attached to this Agreement as Exhibit H or in the form required by the
applicable tenant’s lease.  It shall be a
condition to Buyer’s obligation to close under this Agreement that Seller
obtain an Estoppel Certificate reasonably acceptable to Buyer from tenants who
occupy, in the aggregate, at least 80% of the rentable square footage in the
Property and for each lease of more than 10,000 square feet.  At least five (5) days prior to the
expiration of the Due Diligence Period, Seller shall complete and deliver the
form of Estoppel Certificate for each Lease to the Buyer.  Buyer shall notify Seller of any reasonable
changes required to correct such Estoppel Certificate at or prior to the
expiration of the Due Diligence Period. 
Seller shall make such changes prior to submitting the Estoppel
Certificate to the applicable tenant.

In the event that Seller is unable to satisfy the Estoppel
Certificate condition by the Estoppel Return Date, Seller shall not be in default
under this Agreement. However, if the Estoppel Certificate condition is not
fulfilled as of the Estoppel Return Date, then, for three
(3) business days thereafter, Buyer shall have the option either to (i) waive
the condition, (ii) extend the Closing
Date for up to fourteen (14) days to allow Seller more time to obtain
additional estoppel certificates; or (iii) terminate this Agreement, in
which event all of the Deposit shall be returned to Buyer. If Buyer elects to extend the Closing Date
pursuant to clause (ii) of the preceding sentence and the Estoppel Certificate
condition is still not fulfilled on or before the expiration of the fourteen
(14) day extension period, then Buyer may elect one of the options set forth in
clauses (i) and (iii) of the preceding sentence.

17.           SPECIAL COVENANTS OF SELLER.  Between the Effective Date and the Closing
Date (except as otherwise provided herein), Seller covenants and agrees that
Seller shall (a) maintain and manage the Property in the manner that Seller is
currently maintaining and managing the Property, reasonable wear and tear
excepted; (b) not offer the Property for sale publicly or otherwise solicit,
make, pursue, negotiate or accept offers for the sale of the Property to or
from any party; (c) not transfer the Property or any interest or right therein,
(d) after the expiration of the Due Diligence Period, not execute or consent to
the execution of any Lease or other agreement granting third party rights to
occupancy or possession of any portion of the Property, amend or terminate any
Lease or apply security deposits under any Lease without the prior written
consent of Buyer, which consent may be withheld in Buyer’s sole discretion, (e)
deliver to Buyer each and every material notice or communication Seller receives
in writing from any governmental authority pertaining to the ownership of the
Property, promptly following Seller’s actual receipt of the same; and (f) fully
perform the material obligations of the lessor under the Leases (including
payment of all tenant improvement allowances and leasing commissions due prior
to the Closing Date unless otherwise approved by Buyer) and promptly notify
Buyer of any and all defaults of which Seller has actual knowledge of by the
tenants under the Leases.

 27
 

 

 

	
  SELLER:

  	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  
	
  TR ELDRIDGE PLACE CORP., a

  	
   

  	
  HARVARD PROPERTY TRUST, LLC, a

  
	
  Delaware corporation

  	
   

  	
  Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Seller’s signature: October 23, 2006

  	
   

  	
  Date of Buyer’s Signature: October 23, 2006

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ESCROW AGENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CHICAGO TITLE COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
												

 

 28

 

EXHIBIT
A

LEGAL
DESCRIPTION OF LAND

All that certain 6.4385 acres (280,459 square feet) of land being a
portion of that certain called 10.2164 acre tract described in the deed dated
December 5, 2005, from SV Eldridge, L.P. to TR Eldridge Place Corp., filed for
record under Clerk File No. X247398, Film Code No. 579-35-1004, of the Official
Public Records of Real Property of Harris County, Texas and also being out of
Thornwood One, Restricted Reserve “A”, according to the plat thereof recorded
in Volume 313, Page 13, of the Map Records of Harris County, Texas and also
being out of Thornwood One, Restricted Reserve “C”, according to the plat
thereof recorded in Volume 332, Page 148, of the Map Records of Harris County,
Texas, out of the Joel Wheaton Survey, A-80, Houston, Harris County, Texas and
being more particularly described by metes and bounds as follows:

BEGINNING at a found 5/8” iron rod with cap
marking the northeast corner of Thornwood, Section Two, according to the plat
thereof recorded in Volume 143, Page 1, of the Map Records of Harris County,
Texas and the northwest corner of said Thornwood One, Restricted Reserve “A”,
said rod located in the south right-of-way line of Turkey Creek Drive (60’
Wide);

THENCE, N 87° 02’ 33” E - 82.67’, with said
south right-of-way line of Turkey Creek Drive, to a set 5/8” iron rod with cap
marking the Point of Curvature of a curve to the left having a central angle of
41° 27’ 52”, a radius of 330.00’ and chord bearing N 66° 18’ 37” E - 233.64’;

THENCE, continuing with said south
right-of-way line of Turkey Creek Drive and said curve to the left for an arc
distance of 238.82’, to a found 3/4” iron rod for a cutback corner;

THENCE, N 89° 27’ 22” E - 14.21’, with said
cutback line, to a found 3/4” iron rod marking a cutback corner on the
southwest right-of-way line of Memorial Drive (100’ Wide);

THENCE, S 45° 48’ 26” E - 241.34’, with said
southwest right-of-way line of Memorial Drive, to a set 5/8” iron rod with cap
marking the Point of Curvature of a curve to the right having a central angle
of 48° 50’ 02”, a radius of 50.00’ and a chord bearing S 21° 23’25” E-41.34’;

THENCE, with said curve to the right for an
arc distance of 42.62’, to a set 5/8” iron rod with cap marking the Point of
Tangency located in the west right-of-way line of Eldridge Drive (100’Wide);

THENCE, S 03° 01’ 36” W - 61.45’, with said
west right-of-way line of Eldridge Drive, to a found “X” in concrete marking
the Point of Curvature of a curve to the right having a central angle of 13° 55’
48”, a radius of 1,850.00’ and a chord bearing S 09° 59’ 30” W -448.67’;

THENCE, continuing with said west
right-of-way line of Eldridge Drive and said curve to the right for an arc
distance of 449.78’, to a found “X” in concrete for corner;

THENCE, S 88° 04’ 46” W - 157.01’, to a found
5/8” iron rod with cap for corner; THENCE, N 01° 55’ 14” W - 70.00’, to a set
5/8” iron rod with cap for corner;

 A-1
 

 

THENCE, S 88° 04’ 46” W - 240.00’, to a set
5/8” iron rod with cap for corner, said rod located in the east line of the
aforementioned Thornwood, Section Two;

THENCE, N 01° 55’ 14” W - 555.34’, with said
east line of Thornwood, Section Two, to the POINT OF BEGINNING of the herein
described tract and containing 6.4385 acres (280,459 square feet), more or
less.

 A-2

 

EXHIBIT
B

LIST OF
LEASES

	
  Leases: One Eldridge
  Place

  
	
   

  
	
  Bank of America

  
	
  C.A. Richards
  & Associates

  
	
  Canatxx Energy
  Ventures, Inc.

  
	
  Marubeni Oil
  & Gas

  
	
  McDermott
  International

  
	
  Nations
  Petroleum USA , Inc.

  
	
  Pegasus
  International

  
	
  PriceWaterhouseCoopers

  
	
  St. Mary Land
  & Exploration

  
	
  Texas United
  Title

  
	
  UBS

  
	
   

  

 

	
  Leases: Two Eldridge
  Place

  
	
   

  
	
  Cakes &
  Culinary Creations

  
	
  Cypress Energy,
  Inc.

  
	
  J. Ray
  McDermott, Inc.

  
	
  McTubular
  Products

  
	
  NMA Maritime
  & Offshore Contractors, Inc.

  
	
  Nuclear Imaging
  Services

  
	
  Petro Amigos
  Supply Inc.

  
	
  Petroleum
  Experts, Inc.

  
	
  Piazza
  Acquisitions

  
	
  Samsung America

  
	
  Turn-Key
  Specialists

  
	
  VeriCenter, Inc.

  

 

 B-1

 

EXHIBIT C

LIST OF PERMITTED
ENCUMBRANCES

1.               Restrictive covenants of record filed of
record in Volume 313, Page 13 and Volume 332, Page 148 of the Map Records of
Harris County, Texas and those filed for record under Harris County Clerk’s
File Nos. J665605, K223570 and N592848, but omitting any covenant or
restriction based on race, color, religion, sex, handicap, familial status or
national origin unless and only to the extent that said covenant (a) is exempt
under Chapter 42, Section 3607 of the United States Code or (b) relates to
handicap but does not discriminate against handicapped persons.

2.               Any discrepancies,
conflicts, or shortages in area or boundary lines, or any encroachments, or
protrusions, or any overlapping of improvements.

3.               Homestead or community
property or survivorship rights, if any, of any spouse of any insured.

4.               Any titles or rights
asserted by anyone, including but not limited to, persons, the public,
corporations, governments or other entities,

a.              to tidelands, or lands
comprising the shores or beds of navigable or perennial rivers and streams,
lakes, bays, gulfs or oceans, or

b.              to lands beyond the line of
the harbor or bulkhead lines as established or changed by any government, or

c.               to filled-in lands, or
artificial islands, or

d.              to statutory water rights,
including riparian rights, or

e.               to the area extending from
the line of mean low tide to the line of vegetation, or the right of access to
that area or easement along and across that area.

5.               Standby fees, taxes and assessments by any
taxing authority for the year 2006 and subsequent years.

6.               The terms and conditions of
the documents creating your interest in the land.

7.               Rights of parties in possession.

8.               RECORDED PROPERTY LEASES AFFECTING THE
PROPERTY:

a)      Unrecorded Lease by and between Brookdale Investors Three, L.P., successor
in interest to Browning-Ferris Services, Inc. as Landlord and Bank of America,
N.A. successor in interest to NCNB as Tenant, which appears of record through
Subordination, Non-disturbance and Attornment Agreement filed of record under
Harris County Clerk’s File No. U655162.

b)     Unrecorded Lease by and between Brookdale Investors Three, L.P., successor
in interest to Browning-Ferris Services, Inc. as Landlord and BFI Waste Systems
of North America, Inc. as Tenant, which appears of record through
Subordination, Non-disturbance and Attornment Agreement filed of record under
Harris County Clerk’s File No. U655163.

c)      Unrecorded Lease by and between Brookdale Investors Three,
L.P.,successor in interest to Browning-Ferris Services, Inc. as Landlord and

 C-1
 

 

C.A. Richards and
Associates, Inc. as Tenant, which appears of record through Subordination,
Non-disturbance and Attornment Agreement filed of record under Harris County
Clerk’s File No. U655164.

d)     Unrecorded Lease by and between Brookdale Investors Three,
L.P.,successor in interest to Browning-Ferris Services, Inc. as Landlord and Global
Marine Corporation Services, Inc., a California Corporation as

Tenant, which appears of record through Subordination, Non-disturbance and
Attornment Agreement filed of record under Harris County Clerk’s File No.
U655165.

e)      Unrecorded Lease by and between Brookdale Investors Three, L.P., successor
in interest to Browning-Ferris Services, Inc. as Landlord and Kil Nan Kim as
Tenant, which appears of record through Subordination, Non-disturbance and
Attornment Agreement filed of record under Harris County Clerk’s File No.
U655166.

f)      Unrecorded Lease by and between Brookdale Investors Three, L.P., successor
in interest to Browning-Ferris Services, Inc. as Landlord and Nations Energy
Company, Ltd., a Canadian Corporation as Tenant, which appears of record
through Subordination, Non-disturbance and Attornment Agreement filed of record
under Harris County Clerk’s File No. U655167.

g)     Unrecorded Lease by and between Brookdale Investors Three, L.P., successor
in interest to Browning-Ferris Services, Inc. as Landlord and PaineWebber
Incorporated, a Delaware Corporation as Tenant, which appears of record through
Subordination, Non-disturbance and Attornment Agreement filed of record under
Harris County Clerk’s File No. U655168.

h)     Unrecorded Lease by and between Brookdale Investors Three, L.P.,
successor in interest to Browning-Ferris Services, Inc. as Landlord and
Petroleum Experts, Inc. as Tenant, which appears of record through
Subordination, Non-disturbance and Attornment Agreement filed of record under
Harris County Clerk’s File No. U655169.

i)       Unrecorded Lease by and between Brookdale Investors Three, L.P.,
successor in interest to Browning-Ferris Services, Inc. as Landlord and
PricewaterhouseCoopers, L.L.P., a Delaware Limited Liability Partnership as
Tenant, which appears of record through Subordination, Non-disturbance and
Attornment Agreement filed of record under Harris County Clerk’s File No.
U655170.

j)       Unrecorded Lease by and between Brookdale Investors Three, L.P.,
successor in interest to Browning-Ferris Services, Inc. as Landlord and
Stericycle Inc., a Delaware Corporation as Tenant, which appears of record
through Subordination, Non-disturbance and Attornment Agreement filed of record
under Harris County Clerk’s File No. U655171.

k)      Unrecorded Lease by and between Brookdale Investors Three, L.P.,
successor in interest to Browning-Ferris Services, Inc. as Landlord and
Vericenter, Inc., as Tenant, which appears of record through Subordination,
Non-disturbance and Attornment Agreement filed of record under Harris County
Clerk’s File No. U655172 and under UCC Financing Statement recorded under
Harris County Clerk’s File No. W368277.

 C-2
 

 

1)      Unrecorded lease by and between TR Eldridge Place Corp., a Delaware
corporation, as Landlord, and J. Ray McDermott, Inc., a Delaware corporation,
Tennant, which appears of record through Subordination, Non-disturbance and
Attornment Agreement filed of record under Harris County Clerk’s File No.
X482596.

m)     Lease Agreement by and between Bolin Development corp., as lessor
(Landlord) and Global Marine Inc., as lessee (Tenant), of which appears of
record by Memorandum of Lease filed under County Clerk’s File Nos. H455128,
J592827 and L198153 of the Real Property Records of Harris County, Texas.

9.               EASEMENTS AFFECTING THE PROPERTY:

a)      Visible and apparent easements not of record on or across the property herein
described.

b)     United Texas Transmission Company pipeline easement fifty (50) feet in width
along the West property line as set forth in instruments recorded in Volume
4254, Page 535, Volume 8110, Page 449 and Volume 8147, Page 484 of the Deed
Records, and filed for record under Harris County Clerk’s File No. H430303.

c)      Water meter easement ten (10) feet by twenty (20) feet as reflected by the
recorded plat in Volume 313, Page 13 of the Map Records of Harris County,
Texas.

d)     Houston Lighting and Power Company easement ten (10) feet wide with aerial
easement twenty (20) feet wide from a plane twenty (20) feet above the ground
upward as set forth in instrument recorded in Volume 8272, Page 120 of the Deed
Records of Harris County, Texas and under Harris County Clerk’s File No.
D245678.

e)      Water meter easement ten (10) feet by twenty (20) feet as set forth in instrument
filed for record under Harris County Clerk’s File No. J013606.

Encroachment of brick
planter into water meter easement as set forth in instrument recorded under
Harris County Clerk’s File No. J013606.

f)      Houston Lighting and Power Company ground, transformer station and vacuum
breaker station easements as set forth in instrument filed for record under
Harris County Clerk’s File No. J432850.

g)     Houston Lighting and Power Company ground, aerial and transformer station
easements as set forth in instrument filed for record under Harris County Clerk’s
File Nos. K607468 and KS07469.

h)     A five (5) foot wide and Thirty-seven and
nine tenths (37.9) feet long ground easement and a ten (10) foot wide and
twenty (20) foot long aerial easement from a plane sixteen (16) feet above the
ground upward granted to Houston Lighting and Power Company as set forth in
instrument filed for record under Harris County Clerk’s File No. L536999.

i)       A 25 foot Boundary Road easement as set forth
in instruments filed for record under Harris County Clerk’s File Nos. J665605
and K223570.

 C-3
 

 

j)       Terms, conditions and stipulations of that certain Garage use Easement
and Parking Rights Agreement filed for record under Harris County Clerk’s File
No. K223569, as amended under Clerk’s File No. N592849.

k)      Utility, pedestrian and vehicular easements, all as set forth and
defined by instrument filed for record under Harris County Clerk’s File No.
J665605.

1)       A perpetual, exclusive easement in and the free and unlimited access
to for ingress, egress and vehicular parking purposes over a strip that is
basically Thirty-seven (37) feet wide along and adjoining the East property
line (and being the West property line of the tract now known as the Bank of
America, N.A. property) and over the exact area described in the easement
instrument recorded under Harris County Clerk’s File No. J665606 and which is
also depicted by the subdivision plat recorded in Volume 332, Page 148 of the
Map Records of Harris County, Texas.

m)     Storm sewer easement ten (10) feet in width crossing the property near
the extreme Southerly corner thereof and over the exact area described in the
easement instrument granted to Turkey Creek Improvement District recorded in
Volume 6200, Page 3 of the Deed Records of Harris County, Texas and also
depicted on the subdivision plat recorded in Volume 332, Page 148 of the Map
Records of Harris County, Texas.

n)     An easement ten (10) feet wide, the center line of which enters the
interior East property line (being the West property line of the former
Republic Bank tract, now known as Bank of America) at a point Thirty-five and
eighty-three hundredths (35.83) feet Southerly of the Northerly corner of said
interior line and which extends Northwesterly for a distance of eighteen and
Sixty-seven hundredths (18.67) feet together with an unobstructed aerial
easement ten (10) feet wide, beginning at a plane sixteen (16) feet above the
ground and extending upward located on both sides of and adjoining said ten
(10) foot wide easement, and an unobstructed aerial easement thirty (30) feet
wide and sixty-two and twenty-two hundredths (62.22) feet long, beginning at a
point sixteen (16) feet above the ground and continuing upward the center line
of which commences at the termination point of the ten (10) foot ground
easement described above and which contains in the same Northwesterly direction
to the West property line of the subject tract, the center lines being depicted
on the sketch appended to, made a part of and described in the easement
instrument granted to Houston Lighting and Power Company recorded under Harris
County Clerk’s File Number(s) K003250.

o)     An aerial easement five (5) feet in width from a plane twenty (20) feet
above the ground running the entire length of and abutting all dedicated
easements, for the use of public utilities, imposed in the plat and dedication
recorded in Volume 332, Page 148 of the Map Records of Harris County, Texas.

p)     Agreement for the installation, operation and maintenance of and
underground cable television system granted to Warner Cable Communications,
Inc. as set out in instrument(s) recorded under Harris County Clerk’s File
Number(s) N216019.

q)     Building set back lines affecting the property per Plat recorded in
Volume 313, Page 13, and Volume 332, Page 148 of the Map Records of Harris
County, Texas, as shown on Survey:

25
foot building line along northeast and east property line. 10 foot building
line along North property line.

5
foot building line as measured from the easterly edge of the 50’ United Texas
Transmission Company Pipeline Easement along West property line.

 C-4
 

 

r)      An easement fifteen (15) feet in width on each side of the center line
of all bayous, creeks, gullies, ravines, draws, sloughs or other natural
drainage courses, as shown on plat recorded in Volume 332, Page 148 of the Map
Records of Harris County, Texas, and as noted on Survey. (OWNERS POLICY ONLY)

s)      Manholes, electric box, metal water valve box, fire hydrant, four foot
tall water pop-off, concrete boxes with metal grates, Southwestern Bell
pedestal, Southwestern Bell pole and meter box, sanitary sewer line, fiber
optics metal box, stop sign, swale, and traffic flow easements, as mentioned in
Deed recorded under Harris County Clerk’s File No. X247398.

10.         ROYALTY RESERVATIONS AFFECTING THE PROPERTY:

a)      49% of all the oil, gas and other minerals, the royalties, bonuses,
rentals and all other rights in connection with same are excepted herefrom as
the same are set forth in instrument recorded in volume 5779, Page 601 of the
Deed Records of Harris County, Texas. (Surface rights waived therein.)

11.         LIENS AFFECTING THE PROPERTY:

a)      An Annual Maintenance Charge and Special Assessment payable to the
order Eldridge Place Community Association reserved in Restrictive Covenants as
filed of record under County Clerks File Nos. J665605, K223570 and N592848 of
the Real Property Records o Harris County, Texas, said assessment(s) being
subordinated to the lien of any first mortgage as set forth therein.

12.         OTHER MATTERS AFFECTING THE PROPERTY:

a)      The rights and remedies in and to all of the common areas all of which are
described and set forth in instruments recorded under Harris County Clerk’s
File Number(s) J665605 and K223570.

b)     Terms, conditions and stipulations contained in that certain Memorandum
of Telecommunications Agreement by and between TR Eldridge Place Corp. and
Southwestern Bell Telephone, L.P. dated July 1, 2004, recorded under Harris
County Clerk’s File No. X926922 and X926924.

c)      The rights and remedies in and to all of the common areas all of which
are described and set forth in instruments recorded under Harris County Clerk’s
File Number(s) JS65605 and K223570, as shown on Survey.

 C-5

 

EXHIBIT D

SPECIAL WARRANTY DEED

	
  

  	
   

  
	
  RECORDING REQUESTED BY 

  	
   

  
	
  Chicago Title Company 

  	
   

  
	
   

  	
   

  
	
  AND WHEN RECORDED MAIL TO

  	
   

  
	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Street

  	
   

  	
   

  
	
  Address

  	
   

  
	
   

  	
   

  
	
  City, State

  	
   

  
	
  Zip

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
  Order No.

  	
   

  
				

(SPACE ABOVE THIS LINE FOR
RECORDER’S USE)

STATE OF TEXAS

KNOW ALL MEN BY THESE
PRESENTS THAT:

COUNTY OF HARRIS

TR
ELDRIDGE PLACE CORP., a Delaware corporation (“Grantor”), whose address for
purposes here of is c/o KBS Realty Advisors, 205 West Wacker, Suite 1000,
Chicago, Illinois 60606, Attention: Bill Rogalla, Senior Vice President for and
in consideration of the sum of Ten and 00/100 Dollars ($10.00) paid to                                  
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledge, has GRANTED, SOLD, and CONVEYED and does hereby GRANT,
SELL and CONVEY unto                                          ,
a(n)                                            
(“Grantee”), whose address for purposes hereof is                           ,
that certain tract or parcel of real property (herein called the “Land”)
located in Harris County, Texas, as more particularly described on Exhibit A
attached hereto and made a part hereof by this reference, together with all
improvements located thereon, and all rights and appurtenances pertaining
thereto (the Land, the improvements and all rights and appurtenances are herein
collectively referred to as the (“Property”).

TO
HAVE AND TO HOLD the Property unto Grantee and Grantee’s successors and assigns
forever; and Grantor does hereby bind itself and its successors and assigns to
warrant and forever defend the Property unto Grantee and Grantee’s successors
and assigns, against every person whomsoever lawfully claiming or to claim the
same or any part thereof by, through or under Grantor, but not otherwise,
subject only to any and all matters listed or contained in Exhibit B
labeled “Permitted Encumbrances” which is attached hereto, incorporated herein
and made a part hereof for all purposes, to the full extent same are valid and
subsisting and affect the Property.

OTHER
THAN THE WARRANTIES OF TITLE SET FORTH HEREIN, GRANTEE, BY ACCEPTANCE OF THIS
DEED, SPECIFICALLY ACKNOWLEDGES THAT NEITHER GRANTOR NOR ANYONE ON BEHALF OF
GRANTOR HAD MADE OR MAKES ANY WARRANTIES,

 D-1
 

 

NATURE OR KIND OR
VALUE, INCLUDING, WITHOUT LIMITATION, THOSE CONCERNING COVENANTS OR
REPRESENTATIONS TO GRANTEE, EITHER EXPRESS OR IMPLIED, OF ANY ENVIRONMENTAL,
GEOLOGICAL, STRUCTURAL OR OTHER IN RESPECT OF THE CONDITION OF THE PROPERTY,
AND IT IS EXPRESSLY UNDERSTOOD THAT THE PROPERTY IS BEING CONVEYED IN AN “AS IS”
AND “WITH ALL FAULTS” CONDITION.  BY
ACCEPTANCE OF THIS DEED, GRANTEE AFFIRMS THE MATTERS SET FORTH IN THE FOREGOING
SENTENCE.

EXECUTED on the
date set forth in the acknowledgment attached hereto to be effective as of the                 day
of                       ,
2006.

	
  

  	
  “Grantor”:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TR ELDRIDGE PLACE CORP., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  

 

	
  THE
  STATE OF 

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
  COUNTY OF 

  	
   

  	
  )

  

 

THIS INSTRUMENT was
acknowledged before me on                            ,
2006, by                               ,
the President of TR Eldridge Place Corp., a Delaware corporation, as the act
and deed of said corporation.

 

	
  

  	
  

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  My commission expires: 

  
	
   

  	
   

  

 

 D-2
 

 

EXHIBIT A

To Special
Warranty Deed

LEGAL DESCRIPTION OF LAND

All
that certain 6.4385 acres (280,459 square feet) of land being a portion of that
certain called 10.2164 acre tract described in the deed dated December 5, 2005,
from SV Eldridge, L.P. to TR Eldridge Place Corp., filed for record under Clerk
File No. X247398, Film Code No. 579-35-1004, of the Official Public Records of
Real Property of Harris County, Texas and also being out of Thornwood One,
Restricted Reserve “A”, according to the plat thereof recorded in Volume 313,
Page 13, of the Map Records of Harris County, Texas and also being out of
Thornwood One, Restricted Reserve “C”, according to the plat thereof recorded
in Volume 332, Page 148, of the Map Records of Harris County, Texas, out of the
Joel Wheaton Survey, A-80, Houston, Harris County, Texas and being more
particularly described by metes and bounds as follows:

BEGINNING
at a found 5/8” iron rod with cap marking the northeast corner of Thornwood,
Section Two, according to the plat thereof recorded in Volume 143, Page 1, of
the Map Records of Harris County, Texas and the northwest corner of said
Thornwood One, Restricted Reserve “A”, said rod located in the south
right-of-way line of Turkey Creek Drive (60’ Wide);

THENCE,
N 87° 02’ 33” E - 82.67’, with said south right-of-way line of Turkey Creek
Drive, to a set 5/8” iron rod with cap marking the Point of Curvature of a curve
to the left having a central angle of 41° 27’ 52”, a radius of 330.00’ and
chord bearing N 66° 18’ 37” E - 233.64’;

THENCE,
continuing with said south right-of-way line of Turkey Creek Drive and said
curve to the left for an arc distance of 238.82’, to a found 3/4” iron rod for
a cutback corner;

THENCE,
N 89° 27’ 22” E - 14.21’, with said cutback line, to a found 3/4” iron rod
marking a cutback corner on the southwest right-of-way line of Memorial Drive
(100’ Wide);

THENCE,
S 45° 48’ 26” E - 241.34’, with said southwest right-of-way line of Memorial
Drive, to a set 5/8” iron rod with cap marking the Point of Curvature of a
curve to the right having a central angle of 48° 50’ 02”, a radius of 50.00’
and a chord bearing S 21° 23’25” E-41.34’;

 D-3
 

 

THENCE,
with said curve to the right for an arc distance of 42.62’, to a set 5/8” iron
rod with cap marking the Point of Tangency located in the west right-of-way
line of Eldridge Drive (100’Wide);

THENCE,
S 03° 01’ 36” W - 61.45’, with said west right-of-way line of Eldridge Drive,
to a found “X” in concrete marking the Point of Curvature of a curve to the
right having a central angle of 13° 55’ 48”, a radius of 1,850.00’ and a chord
bearing S 09° 59’ 30” W -448.67’;

THENCE,
continuing with said west right-of-way line of Eldridge Drive and said curve to
the right for an arc distance of 449.78’, to a found “X” in concrete for
corner;

THENCE,
S 88° 04’ 46” W - 157.01’, to a found 5/8” iron rod with cap for corner;
THENCE, N 01° 55’ 14” W - 70.00’, to a set 5/8” iron rod with cap for corner;

THENCE,
S 88° 04’ 46” W - 240.00’, to a set 5/8” iron rod with cap for corner, said rod
located in the east line of the aforementioned Thornwood, Section Two;

THENCE, N 01° 55’ 14” W -
555.34’, with said east line of Thornwood, Section Two, to the POINT OF
BEGINNING of the herein described tract and containing 6.4385 acres (280,459
square feet), more or less.

 D-4
 

 

EXHIBIT B

To Special
Warranty Deed

LIST OF PERMITTED ENCUMBRANCES

1.      Restrictive covenants of record filed of record in Volume 313, Page 13
and Volume 332, Page 148 of the Map Records of Harris County, Texas and those
filed for record under Harris County Clerk’s File Nos. J665605, K223570 and
N592848, but omitting any covenant or restriction based on race, color,
religion, sex, handicap, familial status or national origin unless and only to
the extent that said covenant (a) is exempt under Chapter 42, Section 3607 of
the United States Code or (b) relates to handicap but does not discriminate
against handicapped persons.

2.      Any discrepancies,
conflicts, or shortages in area or boundary lines, or any encroachments, or
protrusions, or any overlapping of improvements.

3.      Homestead or community
property or survivorship rights, if any, of any spouse of any insured.

4.      Any titles or rights
asserted by anyone, including but not limited to, persons, the public,
corporations, governments or other entities,

a.              to tidelands, or lands
comprising the shores or beds of navigable or perennial rivers and streams,
lakes, bays, gulfs or oceans, or

b.              to lands beyond the line of
the harbor or bulkhead lines as established or changed by any government, or

c.               to filled-in lands, or
artificial islands, or

d.              to statutory water rights,
including riparian rights, or

e.               to the area extending from the line of mean low tide
to the line of vegetation, or the right of access to that area or easement
along and across that area.

5.      Standby fees, taxes and assessments by any taxing authority for the
year 2006 and subsequent years.

6.      The terms and conditions of the documents creating
your interest in the land.

7.      Rights of parties in possession.

8.      RECORDED PROPERTY LEASES AFFECTING THE PROPERTY:

f)       Unrecorded Lease by and between Brookdale Investors Three,
L.P., successor in interest to Browning-Ferris Services, Inc. as Landlord and Bank
of America, N.A. successor in interest to NCNB as Tenant, which appears of
record through Subordination, Non-disturbance and Attornment Agreement filed of
record under Harris County Clerk’s File No. U655162.

g)      Unrecorded Lease by and between Brookdale Investors Three,
L.P., successor in interest to Browning-Ferris Services, Inc. as Landlord and BFI
Waste Systems of North America, Inc. as Tenant, which appears of record through
Subordination, Non-disturbance and Attornment Agreement filed of record under
Harris County Clerk’s File No. U655163.

 D-5
 

 

h)      Unrecorded
Lease by and between Brookdale Investors Three, L.P., successor in interest to
Browning-Ferris Services, Inc. as Landlord and C.A. Richards and Associates,
Inc. as Tenant, which appears of record through Subordination, Non-disturbance
and Attornment Agreement filed of record under Harris County Clerk’s File No.
U655164.

i)       Unrecorded Lease by and between Brookdale Investors Three,
L.P., successor in interest to Browning-Ferris Services, Inc. as Landlord and Global
Marine Corporation Services, Inc., a California Corporation as Tenant, which
appears of record through Subordination, Non-disturbance and Attornment
Agreement filed of record under Harris County Clerk’s FileNo. U655165.

j)       Unrecorded Lease by and between Brookdale Investors Three,
L.P., successor in interest to Browning-Ferris Services, Inc. as Landlord and Kil
Nan Kim as Tenant, which appears of record through Subordination, Non-disturbance
and Attornment Agreement filed of record under Harris County Clerk’s File No.
U655166.

f)       Unrecorded Lease by and between Brookdale Investors Three,
L.P., successor in interest to Browning-Ferris Services, Inc. as Landlord and Nations
Energy Company, Ltd., a Canadian Corporation as Tenant, which appears of record
through Subordination, Non-disturbance and Attornment Agreement filed of record
under Harris County Clerk’s File No. U655167.

g)      Unrecorded Lease by and between Brookdale Investors Three,
L.P., successor in interest to Browning-Ferris Services, Inc. as Landlord and Paine
Webber Incorporated, a Delaware Corporation as Tenant, which appears of record
through Subordination, Non-disturbance and Attornment Agreement filed of record
under Harris County Clerk’s File No. U655168.

h)      Unrecorded Lease by and between Brookdale Investors Three,
L.P., successor in interest to Browning-Ferris Services, Inc. as Landlord and
Petroleum Experts, Inc. as Tenant, which appears of record through
Subordination, Non-disturbance and Attornment Agreement filed of record under
Harris County Clerk’s File No. U655169.

i)       Unrecorded Lease by and between Brookdale Investors Three,
L.P., successor in interest to Browning-Ferris Services, Inc. as Landlord and
PricewaterhouseCoopers, L.L.P., a Delaware Limited Liability Partnership as
Tenant, which appears of record through Subordination, Non-disturbance and
Attornment Agreement filed of record under Harris County Clerk’s File No.
U655170.

j)       Unrecorded Lease by and between Brookdale Investors Three,
L.P., successor in interest to Browning-Ferris Services, Inc. as Landlord and
Stericycle Inc., a Delaware Corporation as Tenant, which appears of record
through Subordination, Non-disturbance and Attornment Agreement filed of record
under Harris County Clerk’s File No. U655171.

k)      Unrecorded Lease by and between Brookdale
Investors Three, L.P., successor in interest to Browning-Ferris Services, Inc.
as Landlord and Vericenter, Inc., as Tenant, which appears of record through
Subordination, Non-disturbance and Attornment Agreement filed of record under
Harris County Clerk’s File No. U655172 and under UCC Financing Statement
recorded under Harris County Clerk’s File No. W368277.

 D-6
 

 

1)      Unrecorded
lease by and between TR Eldridge Place Corp., a Delaware corporation, as
Landlord, and J. Ray McDermott, Inc., a Delaware corporation, Tennant, which
appears of record through Subordination, Non-disturbance and Attornment
Agreement filed of record under Harris County Clerk’s File No. X482596.

m)     Lease Agreement by and between Bolin Development corp., as
lessor (Landlord) and Global Marine Inc., as lessee (Tenant), of which appears
of record by Memorandum of Lease filed under County Clerk’s File Nos. H455128,
J592827 and L198153 of the Real Property Records of Harris County, Texas.

9.      EASEMENTS AFFECTING THE PROPERTY:

f)    Visible and apparent easements not of record
on or across the property herein described.

g)   United Texas Transmission Company pipeline
easement fifty (50) feet in width along the West property line as set forth in
instruments recorded in Volume 4254, Page 535, Volume 8110, Page 449 and Volume
8147, Page 484 of the Deed Records, and filed for record under Harris County
Clerk’s File No. H430303.

h)   Water meter easement ten (10) feet by twenty
(20) feet as reflected by the recorded plat in Volume 313, Page 13 of the Map
Records of Harris County, Texas.

i)    Houston Lighting and Power Company easement
ten (10) feet wide with aerial easement twenty (20) feet wide from a plane
twenty (20) feet above the ground upward as set forth in instrument recorded in
Volume 8272, Page 120 of the Deed Records of Harris County, Texas and under
Harris County Clerk’s File No. D245678.

j)    Water meter easement ten (10) feet by twenty
(20) feet as set forth in instrument filed for record under Harris County Clerk’s
File No. J013606.

Encroachment of brick
planter into water meter easement as set forth in instrument recorded under
Harris County Clerk’s File No. J013606.

h)   Houston Lighting and Power Company ground,
transformer station and vacuum breaker station easements as set forth in
instrument filed for record under Harris County Clerk’s File No. J432850.

i)    Houston Lighting and Power Company ground,
aerial and transformer station easements as set forth in instrument filed for
record under Harris County Clerk’s File Nos. K607468 and KS07469.

h)   A five (5) foot wide and Thirty-seven and
nine tenths (37.9) feet long ground easement and a ten (10) foot wide and
twenty (20) foot long aerial easement from a plane sixteen (16) feet above the
ground upward granted to Houston Lighting and Power Company as set forth in
instrument filed for record under Harris County Clerk’s File No. L536999.

i)    A 25 foot Boundary Road easement as set
forth in instruments filed for record under Harris County Clerk’s File Nos.
J665605 and K223570.

 D-7
 

 

j)    Terms, conditions and stipulations of that
certain Garage use Easement and Parking Rights Agreement filed for record under
Harris County Clerk’s File No. K223569, as amended under Clerk’s File No.
N592849.

k)   Utility, pedestrian and vehicular easements,
all as set forth and defined by instrument filed for record under Harris County
Clerk’s File No. J665605.

1)   A perpetual, exclusive easement in and the
free and unlimited access to for ingress, egress and vehicular parking purposes
over a strip that is basically Thirty-seven (37) feet wide along and adjoining
the East property line (and being the West property line of the tract now known
as the Bank of America, N.A. property) and over the exact area described in the
easement instrument recorded under Harris County Clerk’s File No. J665606 and
which is also depicted by the subdivision plat recorded in Volume 332, Page 148
of the Map Records of Harris County, Texas.

m)  Storm sewer easement ten (10) feet in width
crossing the property near the extreme Southerly corner thereof and over the
exact area described in the easement instrument granted to Turkey Creek
Improvement District recorded in Volume 6200, Page 3 of the Deed Records of
Harris County, Texas and also depicted on the subdivision plat recorded in
Volume 332, Page 148 of the Map Records of Harris County, Texas.

n)   An easement ten (10) feet wide, the center
line of which enters the interior East property line (being the West property
line of the former Republic Bank tract, now known as Bank of America) at a
point Thirty-five and eighty-three hundredths (35.83) feet Southerly of the
Northerly corner of said interior line and which extends Northwesterly for a
distance of eighteen and Sixty-seven hundredths (18.67) feet together with an
unobstructed aerial easement ten (10) feet wide, beginning at a plane sixteen
(16) feet above the ground and extending upward located on both sides of and
adjoining said ten (10) foot wide easement, and an unobstructed aerial easement
thirty (30) feet wide and sixty-two and twenty-two hundredths (62.22) feet
long, beginning at a point sixteen (16) 
feet above the ground and continuing upward the center line of which
commences at the termination point of the ten (10) foot ground easement
described above and which contains in the same Northwesterly direction to the
West property line of the subject tract, the center lines being depicted on the
sketch appended to, made a part of and described in the easement instrument
granted to Houston Lighting and Power Company recorded under Harris County
Clerk’s File Number(s) K003250.

o)   An aerial easement five (5) feet in width
from a plane twenty (20) feet above the ground running the entire length of and
abutting all dedicated easements, for the use of public utilities, imposed in
the plat and dedication recorded in Volume 332, Page 148 of the Map Records of
Harris County, Texas.

p)   Agreement for the installation, operation and
maintenance of and underground cable television system granted to Warner Cable
Communications, Inc. as set out in instrument(s) recorded under Harris County
Clerk’s File Number(s) N216019.

q)   Building set back lines affecting the
property per Plat recorded in Volume 313, Page 13, and Volume 332, Page 148 of
the Map Records of Harris County, Texas, as shown on Survey:

25 foot building line along
northeast and east property line. 10 foot building line along North property
line.

5 foot building line as
measured from the easterly edge of the 50’ United Texas Transmission Company
Pipeline Easement along West property line.

 D-8
 

 

r)    An easement fifteen (15) feet in width on
each side of the center line of all bayous, creeks, gullies, ravines, draws,
sloughs or other natural drainage courses, as shown on plat recorded in Volume
332, Page 148 of the Map Records of Harris County, Texas, and as noted on
Survey.

s)   Manholes, electric box, metal water valve
box, fire hydrant, four foot tall water pop-off, concrete boxes with metal
grates, Southwestern Bell pedestal, Southwestern Bell pole and meter box,
sanitary sewer line, fiber optics metal box, stop sign, swale, and traffic flow
easements, as mentioned in Deed recorded under Harris County Clerk’s File No.
X247398.

10.
ROYALTY RESERVATIONS AFFECTING THE PROPERTY:

a) 49% of all the oil, gas
and other minerals, the royalties, bonuses, rentals and all other rights in
connection with same are excepted herefrom as the same are set forth in
instrument recorded in volume 5779, Page 601 of the Deed Records of Harris
County, Texas. (Surface rights waived therein.)

11.
LIENS AFFECTING THE PROPERTY:

a) An Annual Maintenance
Charge and Special Assessment payable to the order Eldridge Place Community
Association reserved in Restrictive Covenants as filed of record under County
Clerks File Nos. J665605, K223570 and N592848 of the Real Property Records o
Harris County, Texas, said assessment(s) being subordinated to the lien of any
first mortgage as set forth therein.

12.
OTHER MATTERS AFFECTING THE PROPERTY:

c)      The rights and remedies in and to all of the common areas all
of which are described and set forth in instruments recorded under Harris
County Clerk’s File Number(s) J665605 and K223570.

d)      Terms, conditions and stipulations contained in that certain Memorandum
of Telecommunications Agreement by and between TR Eldridge Place Corp. and
Southwestern Bell Telephone, L.P. dated July 1, 2004, recorded under Harris
County Clerk’s File No. X926922 and X926924.

c)      The rights and remedies in and to all of the common areas all
of which are described and set forth in instruments recorded under Harris
County Clerk’s File Number(s) JS65605 and K223570, as shown on Survey.

 D-9

 

EXHIBIT E

ASSIGNMENT AND ASSUMPTION OF LEASES AND
CONTRACTS

THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND CONTRACTS
(this “Assignment”) is entered into this           
day of                  ,
2006, by and between                                   ,
a                                   
(“Assignor”), and                                                   , a                             
corporation (“Assignee”).

Recitals

A.            Assignor
is the landlord under those certain leases described on Schedule 1
attached hereto (the “Leases”) relating to that certain real property located
at                               
(the “Property”).

B.            Assignor
is a party to those certain contracts described on Schedule 2 attached
hereto (the “Contracts”) relating to the Property.

C.            Assignor
and Assignee are parties to that certain Purchase Agreement for Real Property
and Escrow Instructions dated as of                            ,
2006 (the “Agreement”), pursuant to which Assignor has agreed to sell and
Assignee has agreed to purchase the Property and Assignor has agreed to assign
and Assignee has agreed to assume the Leases and Contracts.

For valuable consideration, receipt of which is
acknowledged, Assignor and Assignee agree as follows:

1.             Assignor
assigns to Assignee all of the right, title and interest of Assignor in the
Leases, subject, however, to the reservation set forth in Section 6 below,
and the Contracts.

2.             Assignor
hereby agrees to indemnify, defend and hold Assignee harmless from any
liability, claim, demand, loss, expense or damage suffered, sustained or
incurred by Assignee including, without limitation, reasonable attorneys’ fees
and expenses, arising out of or attributable to any claims made against
Assignee by any tenants under the Leases (i) for overcharges by Assignor for
rents or any other amounts due under such Leases attributable to the period of
Assignor’s ownership of the Property or for the payment of any amounts required
to be paid by Assignor to the tenants during the period of Assignor’s ownership
of the Property (without double-counting for amounts that are otherwise subject
to proration under the Agreement and specifically excluding any amounts for
which Assignee received a credit from Assignor at the Closing), (ii) relating
to Assignor’s application of security deposits under the Leases, except to the
extent that Assignee has received a credit at Closing (as defined in the
Agreement) in the amount thereof, (iii) arising from injury to persons or
damage to property occurring at the Property during Assignor’s period of
ownership of the Property or (iv) for any other economic loss suffered by
tenants during the period of Assignor’s ownership of the Property as a result
of Assignor’s breach of its obligations under the Leases and with respect to
which tenants are indemnified by Assignor pursuant to the terms of the Leases,
but only to the extent said claim is covered by the insurance maintained by
Assignor with respect to the Property. 
The foregoing indemnity shall not obligate Assignor to make or pay for
any

 E-1
 

 

improvements to the
Property or correct (or compensate Assignee, any tenants or any third parties)
for any costs incurred by them in correcting or otherwise with respect to the
physical or environmental condition of the Property.  Assignee hereby agrees to indemnify, defend
and hold Assignor harmless from any liability, claim, demand, loss, expense or
damage, including, without limitation, reasonable attorneys’ fees and expenses
arising out of or attributable to any claims made against Assignor by the tenants
under the Leases (i) for overcharge by Assignee for rents and any other amounts
due under such Leases attributable to the period of Assignee’s ownership of the
Property or for the payment of any amount required to be paid by Assignee to
the tenants during the period of Assignee’s ownership of the Property (without
double-counting for amounts that are otherwise subject to proration under the
Agreement and specifically excluding any amounts for which Assignor received a
credit from Assignee at the Closing), (ii) relating to Assignee’s application
of security deposits under the Leases, (iii) arising from injury to persons or
damage to property occurring at the Property during Assignee’s period of
ownership of the Property or (iv) for any other economic loss suffered by the
tenants during the period of Assignee’s ownership of the Property as a result
of Assignee’s breach of its obligations under the Leases and with respect to
which tenants are indemnified by Assignee pursuant to the terms of the Leases,
but only to the extent said claim is covered by the insurance maintained by
Assignee with respect to the Property. 
The indemnification obligations of Assignor and Assignee under this
Assignment shall survive the Closing, but only with respect to which claims for
indemnification hereunder that are received within one hundred eighty (180)
days of Closing, and not otherwise.

3.             Assignor
hereby agrees to indemnify, defend and hold Assignee harmless from any
liability, claim, demand, loss, expense or damage suffered, sustained or
incurred by Assignee including, without limitation, reasonable attorneys’ fees
and expenses, arising out of or attributable to any claims made against
Assignee by any party to the Contracts (i) for the payment of any amount
required to be paid by Assignor to any party to the Contracts during the period
of Assignor’s ownership of the Property (without double-counting for amounts
that are otherwise subject to proration under the Agreement and specifically
excluding any amounts for which Assignee received a credit from Assignor at the
Closing), (ii) arising from injury to persons or damage to property occurring
at the Property during Assignor’s period of ownership of the Property, or (iii)
for any other economic loss suffered by any party to the Contracts during the
period of Assignor’s ownership of the Property as a result of Assignor’s breach
of its obligations under the Contracts and with respect to which said party is
indemnified by Assignor pursuant to the terms of the Contracts, but only to the
extent said claim is covered by the insurance maintained by Assignor with
respect to the Property.  The foregoing
indemnity shall not obligate Assignor to make or pay for any improvements to
the Property or correct (or compensate Assignee, any tenants, any other parties
to the Contracts or any other third parties) for any costs incurred by them in
correcting or otherwise with respect to the physical or environmental condition
of the Property.  Assignee hereby agrees
to indemnify, defend and hold Assignor harmless from any liability, claim,
demand, loss, expense or damage including, without limitation, reasonable
attorneys’ fees and expenses, arising out of or attributable to any claims made
against Assignor by any party to the Contracts (i) for the payment of any
amount required to be paid by Assignee to any party to the Contracts during the
period of Assignee’s ownership of the Property (without double-counting for
amounts that are otherwise subject to proration under

 E-2
 

 

the Purchase Agreement
and specifically excluding any amounts for which Assignor received a credit
from Assignee at the Closing), (ii) arising from injury to persons or damage to
property occurring at the Property during Assignee’s period of ownership of the
Property, or (iii) for any other economic loss suffered by any party to the
Contracts during the period of Assignee’s ownership of the Property as a result
of Assignee’s breach of its obligations under the Contracts and with respect to
which said party is indemnified by Assignee pursuant to the terms of the
Contracts, but only to the extent said claim is covered by the insurance
maintained by Assignee with respect to the Property.  The indemnification obligations of Assignor
and Assignee under this Assignment shall survive the Closing, but only with
respect to which claims for indemnification hereunder that are received within
one hundred eighty (180) days of Closing, and not otherwise.

4.             This
Assignment shall be binding on, and inure to the benefit of, the parties
hereto, their successors in interest, and assigns.

5.             This
Assignment is made without representation or warranty of any kind, except as
specifically set forth in the Agreement. 
Seller warrants and defends title to the Leases and Contracts unto
Buyer, its successors and assigns, against any person or entity claiming, or to
claim, the same or any part thereof by, through or under Seller, subject only
to the Permitted Exceptions (as defined in the Agreement), to the extent
applicable.

6.             Subject
to the terms of Paragraph 7.4(b) of the Agreement, Assignor hereby reserves the
right to pursue any remedy against any tenant under any of the Leases for
amounts due and owing Assignor, but which are unpaid, as of the date hereof.

7.             By
accepting this Assignment, Buyer expressly understands and agrees that any
recovery against Seller that Buyer may be entitled to as a result of any claim,
demand or cause of action that Buyer may have against Seller with respect to
this Assignment shall only be recoverable against Seller as provided in Paragraph
15.20 of the Purchase Agreement.

IN WITNESS WHEREOF,
Assignor and Assignee have executed this Assignment as of the day and year
first hereinabove written.

 

	
  SELLER: 

  	
   

  	
  BUYER: 

  	 

	
   

  	
   

  	
   

  	 

	
  TR ELDRIDGE PLACE CORP., a 

  	
   

  	
   

  	
  , a(n)

  	
   

  	 

	
  Delaware corporation 

  	
   

  	
  corporation

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Its:

  	
   

  
													

 

 E-3
 

 

SCHEDULE 1

LEASES

	
  Leases: One Eldridge
  Place

  
	
   

  
	
  Bank of America

  
	
  C.A. Richards
  & Associates

  
	
  Canatxx Energy
  Ventures, Inc.

  
	
  Marubeni Oil
  & Gas

  
	
  McDermott
  International

  
	
  Nations
  Petroleum USA , Inc.

  
	
  Pegasus
  International

  
	
  PriceWaterhouseCoopers

  
	
  St. Mary Land
  & Exploration

  
	
  Texas United
  Title

  
	
  UBS

  
	
   

  
	
  Leases: Two Eldridge Place

  
	
   

  
	
  Cakes &
  Culinary Creations

  
	
  Cypress Energy,
  Inc.

  
	
  J. Ray
  McDermott, Inc.

  
	
  McTubular
  Products

  
	
  NMA Maritime
  & Offshore Contractors, Inc.

  
	
  Nuclear Imaging
  Services

  
	
  Petro Amigos
  Supply Inc.

  
	
  Petroleum
  Experts, Inc.

  
	
  Piazza
  Acquisitions

  
	
  Samsung America

  
	
  Turn-Key
  Specialists

  
	
  VeriCenter, Inc.

  

 

 E-4
 

 

SCHEDULE 2

CONTRACTS

Eldridge I & II Service
Agreements

	
  Vendor

  	
   

  	
  Services Provided

  
	
  Admiral Linen & Uniform Service

  	
   

  	
  Uniform service

  
	
   

  	
   

  	
   

  
	
  Always in Season

  	
   

  	
  Interior plant maintenance

  
	
   

  	
   

  	
   

  
	
  American Commercial Service

  	
   

  	
  Courtesy officer service

  
	
   

  	
   

  	
   

  
	
  BFI Waste Services of Texas

  	
   

  	
  Trash removal

  
	
   

  	
   

  	
   

  
	
  Classic Protection

  	
   

  	
  Fire alarm panel monitoring

  
	
   

  	
   

  	
   

  
	
  Copesan Services dba Holder’s

  	
   

  	
  Pest control

  
	
   

  	
   

  	
   

  
	
  EPM Services

  	
   

  	
  PM on generators and fire pumps

  
	
   

  	
   

  	
   

  
	
  Fikes of Houston

  	
   

  	
  Air fresheners

  
	
   

  	
   

  	
   

  
	
  Martin Landscape Management

  	
   

  	
  Exterior landscape maintenance

  
	
   

  	
   

  	
   

  
	
  Kastle Systems

  	
   

  	
  Access systems

  
	
   

  	
   

  	
   

  
	
  Mueller Water Conditioning

  	
   

  	
  Water conditioning

  
	
   

  	
   

  	
   

  
	
  Nalco

  	
   

  	
  Water treatment

  
	
   

  	
   

  	
   

  
	
  Pritchard Industries Southwest

  	
   

  	
  Janitorial services

  
	
   

  	
   

  	
   

  
	
  ThyssenKrupp Elevator Corp.

  	
   

  	
  Elevator maintenance

  
	
   

  	
   

  	
   

  
	
  Reliant Energy

  	
   

  	
  Electricity

  

 

 E-5

 

EXHIBIT F

GENERAL ASSIGNMENT

FOR VALUABLE CONSIDERATION,
the receipt and sufficiency of which are hereby expressly acknowledged,                                    ,
a                                   
(“Assignor”), hereby quitclaims, assigns, transfers and conveys to                                   ,
a                              
corporation (“Assignee”), all of Assignor’s right, title and interest, in and
to any and all assignable intangible property, licenses, permits and warranties
owned by Assignor and attached or pertaining to, all or any part of the real
property (the “Property”) commonly known as                                                     ,
which conveyance is without representation, warranty or recourse of any kind
except as otherwise expressly provided herein and in the Agreement.  Assignor hereby represents and warrants to
Assignee that it has not previously assigned any of the Property herein
assigned, and that, to Assignor’s knowledge, such Property is free and clear of
all liens and encumbrances other than the Permitted Exceptions (as defined in
that certain Purchase Agreement for Real Property and Escrow Instructions
between Assignor and Assignee with an effective date of                     ,
2006 (“Purchase Agreement”)), to the extent applicable.  Except as otherwise expressly set forth
herein or in the Purchase Agreement, this General Assignment shall not be
construed as a representation or warranty by Assignor as to the existence,
ownership or transferability of the Property, and Assignor shall have no
liability to Assignee in the event that any or all of the Property (i) is
not transferable to Assignee, or (ii) is canceled or terminated by reason of
this General Assignment or any acts of Assignee.

By accepting this General Assignment, Assignee
expressly understands and agrees that any recovery against Assignor that
Assignee may be entitled to as a result of any claim, demand or cause of action
that Assignee may have against Assignor with respect to this General Assignment
shall only be recoverable against Assignor as provided in Paragraph 15.20. of
the Purchase Agreement.  Also, Assignor
hereby reserves all right, title and interest in and to any and all proceeds or
awards granted with regard to any tax appeals filed prior to the date hereof,
insofar as such proceeds and awards are applicable to taxes payable or the
ownership of the Property prior to the date hereof.

 F-1
 

 

IN
WITNESS WHEREOF, Assignor and Assignee have executed this
General Assignment as of                              ,
2006.

 

	
  SELLER: 

  	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  
	
  TR ELDRIDGE PLACE CORP., a

  	
   

  	
  [                             ,
  a(n)                              

  
	
  Delaware corporation 

  	
   

  	
  corporation]

  

 

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Its:

  	
   

  
									

 

 F-2

 

EXHIBIT G

NON-FOREIGN CERTIFICATE

Section 1445 of the Internal Revenue Code provides
that a buyer of a U.S. real property interest must withhold tax if the seller
is a foreign person.  To inform                                     
(“Buyer”) that withholding of tax is not required upon the disposition of a
U.S. real property interest by                              ,
a                              
(“Seller”), the undersigned hereby certifies the following on behalf of Seller:

1.                                       Seller
is not a foreign corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Internal Revenue Code and Income Tax
Regulations);

2.                                       Seller’s
U.S. employer identification number is                              ;
and

3.                                       Seller’s
office address is c/o KBS Realty Advisors, 205 West Wacker, Suite 1000,
Chicago, Illinois 60606, Attention: Bill Rogalla, Senior Vice President

Seller understands that this certification may be
disclosed to the Internal Revenue Service by Buyer and that any false statement
I have made here could be punished by fine, imprisonment, or both.

Under penalty of perjury, I declare that I have
examined this certification and to the best of my knowledge and belief it is
true, correct and complete, and I further declare that I have the authority to
sign this document on behalf of Seller.

	
  SELLER:

  
	
   

  
	
  TR ELDRIDGE PLACE CORP., a

  
	
  Delaware corporation 

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 G-1

 

EXHIBIT H

BILL OF SALE

                                      ,
a                           
(“Grantor”), for good and valuable consideration paid by                                       , a                            
corporation (“Grantee”), the receipt and sufficiency of which is hereby
acknowledged, by these presents does QUITCLAIM, BARGAIN, SELL and DELIVER unto
Grantee its entire right, title and interest in all equipment, furniture,
furnishings, appliances, supplies, tools, machinery and other personal property
of every nature and description owned by Grantor and attached to or located on
all or any part of the real property (the “Property”), comprising or otherwise
forming a part of the buildings commonly known as                                                     
(the foregoing being collectively referred to as the “Personalty”); but
excluding any personal property owned by tenants under leases now or
hereafter demising space in the improvements located on the Property or by any
property manager.

GRANTOR WARRANTS AND DEFENDS TITLE TO THE PERSONALTY
UNTO GRANTEE, ITS SUCCESSORS AND ASSIGNS, AGAINST ANY PERSON OR ENTITY
CLAIMING, OR TO CLAIM, THE SAME OR ANY PART THEREOF BY, THROUGH OR UNDER
GRANTOR, SUBJECT ONLY TO THE PERMITTED EXCEPTIONS (AS DEFINED IN THAT CERTAIN
PURCHASE AGREEMENT FOR REAL PROPERTY AND ESCROW INSTRUCTIONS BETWEEN GRANTOR
AND GRANTEE WITH AN EFFECTIVE DATE OF                 ,
2006 (“PURCHASE AGREEMENT”), TO THE EXTENT APPLICABLE, BUT WHICH DO NOT INCLUDE
ANY LIENS, RIGHTS OR CLAIMS OF OTHERS, INCLUDING ANY LEASES OR FINANCING
AGREEMENTS WITH RESPECT TO THE PERSONALTY. 
EXCEPT AS SET FORTH IN THE PRECEDING SENTENCE, GRANTOR MAKES NO OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE PERSONALTY.  GRANTOR MAKES NO WARRANTY OF MERCHANTABILITY
OR FITNESS FOR ANY PURPOSE WITH RESPECT TO THE PERSONALTY, AND THE SAME IS SOLD
IN AN “AS IS, WHERE IS” CONDITION, WITH ALL FAULTS.  BY ACCEPTANCE OF DELIVERY, GRANTEE AFFIRMS
THAT IT HAS NOT RELIED ON GRANTOR’S SKILL OR JUDGMENT TO SELECT OR FURNISH THE
PERSONALTY FOR ANY PARTICULAR PURPOSE, AND THAT GRANTOR MAKES NO WARRANTY THAT
THE PERSONALTY IS FIT FOR ANY PARTICULAR PURPOSE AND THAT THERE ARE NO
REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, EXCEPT AS SPECIFICALLY SET
FORTH IN THIS BILL OF SALE.

TO HAVE AND TO HOLD
the Personalty unto Grantee, its successors and assigns forever.

By accepting this Bill of Sale, Grantee expressly
understands and agrees that any recovery against Grantor that Grantee may be
entitled to as a result of any claim, demand or cause of action that Grantee
may have against Grantor with respect to this Bill of Sale shall only be
recoverable against Grantor as provided in Section 15.20 of the Purchase
Agreement.  This instrument shall be
governed by and construed in accordance with the laws of the State of Texas.

 H-1
 

 

EXECUTED
as of                       ,
2006.

 

	
  GRANTOR:

  
	
   

  
	
  TR ELDRIDGE PLACE CORP., a

  
	
  Delaware corporation 

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 H-2

 

EXHIBIT I

TENANT
ESTOPPEL CERTIFICATE

Form
of Estoppel Certificate

                               ,
2006

[Address of Buyer]

 

[Address of Lender]

RE:          [Name and Address of
Property]

Gentlemen:

Reference
is made to that certain [Lease Agreement] dated
as of                                
          ,              
between                                         ,
a                                ,
as landlord (“Landlord”), and the undersigned, as tenant (“Tenant”),
demising premises at the captioned address more particularly described in the
Lease (the “Premises”). The lease, together with all amendments thereto
included in Schedule 1 attached hereto, is herein referred to as the “Lease”.
Tenant hereby represents to the Benefited Parties (as herein defined) that the
following statements are true and correct as of the date hereof:

1.             Schedule 1
attached hereto is a list of all amendments to the Lease, and attached hereto
as Exhibit A is a true and correct copy of the Lease and all amendments
to the Lease.  The documents listed in Schedule
1 and attached hereto as Exhibit A represent the entire agreement
between the parties as to the Premises. 
The undersigned is the Tenant under the Lease for space at the Premises
covering                           rentable
square feet.

2.             The Lease is in full
force and effect and has not been amended, modified, supplemented or superseded
except as indicated in Schedule 1. 
There are no understandings, contracts, agreement or commitments of any
kind whatsoever with respect to the Premises, except as expressly provided in
the Lease.

3.             The term of the Lease
commenced on                              ,
and expires on                            ,
subject to any rights of Tenant to extend the term as provided therein.  The base rent presently being charged is $                       .  All rentals, charges, additional rent and
other obligations on the part of the undersigned have been paid to and
including                           ,
200  .  No rental, other than
for the current month, has been paid in advance.  The undersigned has accepted possession and
now occupies the Premises and is currently open for business.  In addition to the fixed minimum Base Rent,
the Tenant pays its pro-rata share of real estate taxes and operating expenses
in excess of a base stop of                           .

 I-1
 

 

4.             Tenant has paid to
Landlord a security deposit in the amount of $                             .  Tenant has no claim against Landlord for any
other security, rental, cleaning access card, key or other deposits or any
prepaid rentals.

5.             Landlord is not in
any respect in default in the performance of the terms and provisions of the
Lease, nor does any state of facts or condition exist which, with the giving of
notice or the passage of time, or both, would result in such a default.  All conditions under the Lease to be
performed by Landlord have been satisfied. 
Without limiting the generality of the foregoing, all improvements to be
constructed in the Premises by Landlord have been completed to the satisfaction
of Tenant and accepted by Tenant and any tenant construction allowances have
been paid in full, and all duties of an inducement nature required of Landlord
in the Lease have been fulfilled to Tenant’s satisfaction. Tenant has no claim
against Landlord by reason of any restriction, encumbrance or defect in title
of the Premises of which Tenant has actual knowledge.

6.             There currently is no
defense, offset, lien, claim or counterclaim by or in favor of Tenant against
Landlord under the Lease or against the obligations of Tenant under the Lease
(including, without limitation, any rentals or other charges due or to become
due under the Lease) and Tenant is not contesting any such obligations, rentals
or charges. To Tenant’s knowledge, all leasing commissions due in respect of
the current term of the Lease have been paid.

7.             Tenant has no
renewal, extension or expansion option, no right of first offer or right of
first refusal and no other similar right to renew or extend the term of the
Lease or expand the property demised thereunder except as may be expressly set
forth in the Lease.  Tenant has no right
to lease or occupy any parking spaces within the Property except as set forth
in the Lease.  Tenant is entitled to no
free rent nor any credit, offsets or deductions in rent, nor other leasing
concessions other than those specified in the Lease.

8.             Tenant is not in any
respect in default in the performance of the terms and provisions of the Lease
nor does any state of facts or condition exist which, with the giving of notice
or the passage of time, or both, would result in such a default.  Without limiting the generality of the
foregoing, Tenant is current in its rental obligation under the Lease.

9.             The undersigned has
not received notice of a prior transfer, assignment, hypothecation or pledge by
Landlord of any of Landlord’s interest in the Lease other than to the holder of
any first mortgage on the captioned property.

10.           Tenant has not assigned
the Lease nor sublet all or any part of the Premises, except as shown on Schedule
1 attached hereto and made a part hereof for all purposes.

The above
certifications are made to the Benefited Parties knowing that the Benefited
Parties will rely thereon in making an investment in the Premises. For purposes
hereof, the term “Benefited Parties” means the addressees of this letter
and all of the following: (a) Harvard Property Trust, LLC, a Delaware limited
liability company and its successors, assigns,

 I-2
 

 

and designees (including,
without limitation, any tenant in common purchasers); and (b) any lender to
which any party described in the foregoing clause (a) grants a deed of trust,
mortgage or other lien upon the Premises.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  a

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
										

 I-3
 

 

JOINDER
OF GUARANTOR

The undersigned
joins in the execution of this Estoppel Certificate for the purpose of
confirming to and for the benefit of the Benefited Parties (a) that the
guaranty of Tenant’s obligations under the Lease executed by the undersigned
remain in full force and effect, and (b) that the undersigned has no defenses
or offsets to its obligations under the guaranty of the Lease executed by the
undersigned. The undersigned understands that the Benefited Parties will rely
upon the foregoing confirmations.

	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  a

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
										

 I-4
 

 

Schedule 1

List of Lease Documents

 I-5
 

 

Exhibit A

See Attached Lease Documents

 I-6

 

EXHIBIT J

LIST OF CONTRACTS

Eldridge I & II Service
Agreements

	
  Vendor

  	
   

  	
  Services Provided

  
	
  Admiral Linen & Uniform Service

  	
   

  	
  Uniform service

  
	
   

  	
   

  	
   

  
	
  Always in Season

  	
   

  	
  Interior plant maintenance

  
	
   

  	
   

  	
   

  
	
  American Commercial Service

  	
   

  	
  Courtesy officer service

  
	
   

  	
   

  	
   

  
	
  BFI Waste Services of Texas

  	
   

  	
  Trash removal

  
	
   

  	
   

  	
   

  
	
  Classic Protection

  	
   

  	
  Fire alarm panel monitoring

  
	
   

  	
   

  	
   

  
	
  Copesan Services dba Holder’s

  	
   

  	
  Pest control

  
	
   

  	
   

  	
   

  
	
  EPM Services

  	
   

  	
  PM on generators and fire pumps

  
	
   

  	
   

  	
   

  
	
  Fikes of Houston

  	
   

  	
  Air fresheners

  
	
   

  	
   

  	
   

  
	
  Martin Landscape Management

  	
   

  	
  Exterior landscape maintenance

  
	
   

  	
   

  	
   

  
	
  Kastle Systems

  	
   

  	
  Access systems

  
	
   

  	
   

  	
   

  
	
  Mueller Water Conditioning

  	
   

  	
  Water conditioning

  
	
   

  	
   

  	
   

  
	
  Nalco

  	
   

  	
  Water treatment

  
	
   

  	
   

  	
   

  
	
  Pritchard Industries Southwest

  	
   

  	
  Janitorial services

  
	
   

  	
   

  	
   

  
	
  ThyssenKrupp Elevator Corp.

  	
   

  	
  Elevator maintenance

  
	
   

  	
   

  	
   

  
	
  Reliant Energy

  	
   

  	
  Electricity

  

 

 J-1

 

EXHIBIT K

PROPERTY INFORMATION

BASE
BUILDING INFO

ADA Compliance,
studies/reports

Appraisal, Existing

Building Measurement
Surveys by Registered Architect

Building Permits

Building Plans,
Specifications,

Paper

CAD Disk

Base Building Certificate
of Occupancy

Covenants, Conditions
& Restriction’s (Owner association, condo, etc)

Easement Information,
existing and pending

Environmental Site
Assessment, Existing

Floor Plans, as leased

Geotechnical Report, if
any

Parking Space
Configuration (Surface and Garage if applicable)

Property Condition
Report, existing

Roof Reports – If recent
re-roof, provide drawings and specifications

Roof Warranty – If recent
re-roof/new roof provide contractor contact info

Seismic Reports

Site Plans

Survey, existing

BUILDING
SYSTEMS/OPERATIONS

Chiller Eddy Current
Testing – Frequency and Results

Emergency/Life Safety
Systems, Operating Manual

Ground Fault Testing –
Frequency and Results

Infra-red Scans of
Electrical System – Frequency and Results

Permits & Licenses –
Alarm (including Frequency and Results of testing)

Permits & Licenses –
Boiler (including inspection results)

Permits & Licenses –
Construction

Permits & License –
Elevator (including one and five year testing reports)

Permits & License –
Engineering

Preventive Maintenance Program

Warranty, Elevator if
applicable

Warranty, HVAC Equipment,
if applicable

Warranty, Mechanical, if
applicable

Warranty, Roof, if
applicable

 K-1
 

 

Work Order Systems &
Operating Manuals

Window Washing –
Frequency and Results

FINANCIAL/BUDGETING
INFO

Average Effective Annual
Rental Rate (psf basis), previous 5 years

Building/Capital
Improvements Projects, Current

Capital Improvements,
historical/projected, 3 years

Balance Sheet, to date

Budget & Narrative,
Current Year

Invoices, as requested,
copies only (typically utility and real estate tax invoices)

Security Deposit Listing,
Current, LOC’s/Guaranty’s to be transferred

Utility Security
Deposits

***  SECTION 3-14 AUDIT  ***

*Additional material/reports
required for the completion of the 3-14 Audit

(Note:  this audit will also include physical site
visits to review original invoices selected from property check
register/disbursement journal as noted below)

Detailed general
ledger report of revenues and expenses for the prior two years, each quarter
for the current year, and to current date for the current year

Detailed income
statements by month for the prior two years and to current date for the current
year

Detail of the cash
receipts and disbursements journal (downloaded in Excel if possible) for the
full prior year and to current date for the current year

Detailed accrued
expense listing for each quarter ended during the current year and the prior
two years

Operating Expense
Reconciliations in detail for the three previous years, current year budget,
and current year preliminary reconciliation

Aging Reports, Current
and past 6 months (month-by-month)

Rent Roll, Current

All leases, amendments
and commencement date letters for current and prior year tenants

Detailed listing of all
tenants with termination options

Detailed rent
straight-line schedule for each quarter ended during the current year and the
prior two years

Stacking Plan

Parking garage
lease/operating agreement for the prior two years and the current year

Service contracts for the
current year and prior year

 K-2
 

 

Property tax and personal
property tax statements for the current year & prior 3 years

Utility agreements/power
supply agreements for the current year and prior year

Utilities, prior year and
current year invoices

Representation
letter (questions asked Seller by Audit Firm)

TENANT
RELATED INFO

Certificates of Occupancy

Insurance Certificate

Lease Commission
Schedule, 3 previous years

Existing Commission
Agreements

Occupancy/Vacancy
History,  5 previous years

Retail tenants, sales
data and percentage rent billings

Tenant Contact
Information

Tenant Financial
Statements, if available

Tenant Improvement
projects, currently under construction (copy of contract(s))

Tenant Improvement
Schedule, 3 previous years

OTHER

Business Licenses

Covenants, Conditions
& Restriction’s (Owner association, condo, etc)

Flooding Info, Historical

Ground Lease, if any

Insurance Certificate -
Seller

Insurance Claims, Pending

Insurance Claims History

Intellectual Property
Documents, if any

Litigation – Pending

Management & Leasing
Agreement – Existing

O & M Reports
(Asbestos, Mold, etc.)

Personal Property
Inventory including Office Equipment to remain on site

Photos of the Building

Security Incident
Reports, for prior 24 months

Seismic Reports

Staffing/Payroll Schedule

Title commitment policy
of Seller, existing

Title Work – Preliminary

Title Work – Final

Website/Domain
Information

Zoning Report, existing
if available

 K-3Exhibit 10.2

Loan No. 502858632

 

LOAN AGREEMENT

 

Dated as of December     , 2006

 

Between

 

BEHRINGER HARVARD ELDRIDGE PLACE LP, 

as Borrower

 

and

 

WACHOVIA 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

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  GENERAL TERMS

  	
  23

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 2.1

  	
  Loan Commitment; Disbursement to Borrower

  	
  23

  
	
   

  	
  Section 2.2

  	
  Interest Rate

  	
  24

  
	
   

  	
  Section 2.3

  	
  Loan Payment

  	
  25

  
	
   

  	
  Section 2.4

  	
  Prepayments

  	
  26

  
	
   

  	
  Section 2.5

  	
  Defeasance

  	
  26

  
	
   

  	
  Section 2.6

  	
  Release of Property

  	
  29

  
	
   

  	
  Section 2.7

  	
  Lockbox Account/Cash Management

  	
  29

  
	
   

  	
  Section 3.1

  	
  Conditions Precedent to Closing

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  31

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 4.1

  	
  Borrower Representations

  	
  31

  
	
   

  	
  Section 4.2

  	
  Survival of Representations

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  BORROWER COVENANTS

  	
  39

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 5.1

  	
  Affirmative Covenants

  	
  39

  
	
   

  	
  Section 5.2

  	
  Negative Covenants

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  INSURANCE; CASUALTY; CONDEMNATION

  	
  57

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 6.1

  	
  Insurance

  	
  57

  
	
   

  	
  Section 6.2

  	
  Casualty

  	
  61

  
	
   

  	
  Section 6.3

  	
  Condemnation

  	
  61

  
	
   

  	
  Section 6.4

  	
  Restoration

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  RESERVE FUNDS

  	
  66

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 7.1

  	
  Required Repairs

  	
  66

  
	
   

  	
  Section 7.2

  	
  Tax and Insurance Escrow Fund

  	
  68

  
	
   

  	
  Section 7.3

  	
  Replacements and Replacement Reserve

  	
  68

  
	
   

  	
  Section 7.4

  	
  Rollover Reserve

  	
  73

  
	
   

  	
  Section 7.5

  	
  [RESERVED]

  	
  74

  
						

 

 

 

	
  

  	
  Section 7.6

  	
  Lease Obligation Fund

  	
  74

  
	
   

  	
  Section 7.7

  	
  Reserve Funds, Generally

  	
  74

  
	
   

  	
  Section 7.8

  	
  Letter of Credit Rights

  	
  75

  
	
   

  	
  Section 7.9

  	
  Application of Letter of Credit Proceeds

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  DEFAULTS

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.1

  	
  Event of Default

  	
  75

  
	
   

  	
  Section 8.2

  	
  Remedies

  	
  78

  
	
   

  	
  Section 8.3

  	
  Remedies Cumulative; Waivers

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  SPECIAL PROVISIONS

  	
  79

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 9.1

  	
  Securitization

  	
  79

  
	
   

  	
  Section 9.2

  	
  Intentionally Omitted

  	
  81

  
	
   

  	
  Section 9.3

  	
  Exculpation

  	
  82

  
	
   

  	
  Section 9.4

  	
  Matters Concerning Manager

  	
  84

  
	
   

  	
  Section 9.5

  	
  Servicer

  	
  84

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  MISCELLANEOUS

  	
  84

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 10.1

  	
  Survival

  	
  84

  
	
   

  	
  Section 10.2

  	
  Lender’s Discretion

  	
  84

  
	
   

  	
  Section 10.3

  	
  Governing Law

  	
  85

  
	
   

  	
  Section 10.4

  	
  Modification, Waiver in Writing

  	
  85

  
	
   

  	
  Section 10.5

  	
  Delay Not a Waiver

  	
  85

  
	
   

  	
  Section 10.6

  	
  Notices

  	
  85

  
	
   

  	
  Section 10.7

  	
  Trial by Jury

  	
  86

  
	
   

  	
  Section 10.8

  	
  Headings

  	
  86

  
	
   

  	
  Section 10.9

  	
  Severability

  	
  86

  
	
   

  	
  Section 10.10

  	
  Preferences

  	
  86

  
	
   

  	
  Section 10.11

  	
  Waiver of Notice

  	
  87

  
	
   

  	
  Section 10.12

  	
  Remedies of Borrower

  	
  87

  
	
   

  	
  Section 10.13

  	
  Expenses; Indemnity

  	
  87

  
	
   

  	
  Section 10.14

  	
  Schedules Incorporated

  	
  88

  
	
   

  	
  Section 10.15

  	
  Offsets, Counterclaims and Defenses

  	
  88

  
	
   

  	
  Section 10.16

  	
  No Joint Venture or Partnership; No Third Party
  Beneficiaries

  	
  89

  
	
   

  	
  Section 10.17

  	
  Publicity

  	
  89

  
	
   

  	
  Section 10.18

  	
  Waiver of Marshalling of Assets

  	
  89

  

 

 ii
 

 

 

	
  

  	
  Section 10.19

  	
  Waiver of Counterclaim

  	
  89

  
	
   

  	
  Section 10.20

  	
  Conflict; Construction of Documents; Reliance

  	
  90

  
	
   

  	
  Section 10.21

  	
  Brokers and Financial Advisors

  	
  90

  
	
   

  	
  Section 10.22

  	
  Prior Agreements

  	
  90

  
	
   

  	
  Section 10.23

  	
  Transfer of Loan

  	
  90

  
	
   

  	
  Section 10.24

  	
  Joint and Several Liability

  	
  90

  

 

 

SCHEDULES

	
  Schedule I

  	
  –

  	
  [Reserved]

  
	
   

  	
   

  	
   

  
	
  Schedule II

  	
  –

  	
  Rent Roll / Expansion Options / Outstanding Leasing
  Commissions / Outstanding Tenant Improvements / Existing Sublease Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule III

  	
  –

  	
  Required Repairs - Deadlines for Completion

  
	
   

  	
   

  	
   

  
	
  Schedule IV

  	
  –

  	
  Organizational Chart of Borrower

  
	
   

  	
   

  	
   

  
	
  Schedule V

  	
  –

  	
  Exceptions to Representations

  
	
   

  	
   

  	
   

  
	
  Schedule VI

  	
  –

  	
  Lease Obligations

  

 

 iii

 

LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of this         
day of December, 2006 (as amended, restated, replaced, supplemented or
otherwise modified from time to time, this “Agreement”), between WACHOVIA
BANK, NATIONAL ASSOCIATION, a banking association chartered under the laws of
the United States of America, having an address at Wachovia Bank, National Association, Commercial Real Estate
Services, 8739 Research Drive URP 4, NC 1075, Charlotte, North
Carolina 28262 (“Lender”)
and BEHRINGER HARVARD ELDRIDGE PLACE LP, a Delaware limited partnership, having
its principal place of business c/o Behringer Harvard Funds, 15601 Dallas
Parkway, Suite 600, Addison, Texas 75001 (“Borrower”).

W I T N E S S E T H:

WHEREAS, Borrower desires to obtain the Loan (as hereinafter
defined) from Lender; and

WHEREAS, 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 (as hereinafter defined).

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

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:

“Additional
Insolvency Opinion” shall have the meaning set forth in Section 4.1.30(c) hereof.

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

“Affiliated
Manager” shall mean any Manager in which Borrower,
Principal, or Guarantor has, directly or indirectly, any legal, beneficial or
economic interest.

“Agreement”
shall mean this Loan Agreement, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

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

“Annual
Budget” shall mean the operating budget, including all
planned Capital Expenditures, for the Property prepared by Borrower in
accordance with Section 5.1.11.(d)
hereof for the applicable Fiscal Year or other period.

 

“Approved
Annual Budget” shall have the meaning set forth in Section 5.1.11(d) hereof.

“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, assigning to Lender all of Borrower’s
interest in and to the Leases and Rents of the Property as security for the
Loan, 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 Closing Date, among Lender, Borrower and Manager, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

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

“Bankruptcy
Action” shall mean with respect to any Person
(a) such Person filing a voluntary petition under the Bankruptcy Code or
any other Federal or state bankruptcy or insolvency law; (b) the filing of
an involuntary petition against such Person under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law, in which such Person
colludes with, or otherwise assists such Person, or cause 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 any other Federal or state bankruptcy or
insolvency law; (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 any portion of the Property; (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 of the United States Code,
11 U.S.C. §101, et seq., as the
same may be amended from time to time, and any successor statute or statutes
and all rules and regulations from time to time promulgated thereunder, and any
comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights
or any other Federal or state bankruptcy or insolvency law.

“Basic
Carrying Costs” shall mean the sum of the following costs
associated with the Property for the relevant Fiscal Year or payment
period:  (i) Taxes and
(ii) Insurance Premiums.

“Behringer Holdings”
shall mean Behringer Harvard Holdings, a Delaware limited liability company.

“Behringer Harvard
Funds” shall mean, individually or collectively, Behringer Holdings,
Behringer Harvard Short-Term Opportunity Fund I LP, a Texas limited
partnership, Behringer Harvard Mid-Term Value Enhancement Fund I LP, a Texas
limited partnership, Behringer Harvard Operating Partnership I LP, a Texas
limited partnership, Behringer Harvard REIT I, Inc., a Maryland corporation, Behringer Harvard Opportunity REIT I, Inc., a
Maryland

 2
 

 

corporation,
and/or Behringer Harvard Strategic Opportunity Fund I LP, a Texas limited
partnership.

“Borrower”
shall mean Behringer Harvard Eldridge Place LP, a Delaware limited partnership,
together with its permitted successors and assigns.

“Borrower’s Knowledge” shall mean the actual
knowledge attributable to those principals, employees and officers of Borrower
who have given substantive attention to the Property, the Loan Documents and
related matters, without any implied duty to conduct any inquiry or
investigation.

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

“Capital
Expenditures” shall mean, for any period, the amount
expended for items capitalized under GAAP or other accounting principles
reasonably acceptable to Lender, consistently applied (including expenditures
for building improvements or major repairs, leasing commissions and tenant
improvements).

“Cash
Management Account” shall have the meaning set forth in Section 2.7.2 hereof.

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

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

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

“Casualty
Consultant” shall have the meaning set forth in Section 6.4(b)(iii) hereof.

“Casualty
Retainage” shall have the meaning set forth in Section 6.4(b)(iv) hereof.

“Casualty/Condemnation
Prepayment” shall have the meaning set forth in Section 6.4(e) hereof.

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

“Code”
shall mean the Internal Revenue Code of 1986, as amended, 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.

 3
 

 

“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 all or any part of the Property, or any
interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting the Property or any part thereof.

“Condemnation
Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

“Consumer
Price Index” or “CPI”
shall mean the Consumer Price Index for All Urban Consumers published by the
Bureau of Labor Statistics of the United States Department of Labor, All Items;
1982-84 = 100.  If the Bureau of Labor
Statistics substantially revises the manner in which the CPI is determined, an
adjustment shall be made by Lender in the revised index which would produce
results equivalent, as nearly as possible, to those which would be obtained if
the CPI had not been so revised.

“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.  “Controlled”, “under common Control
with” and “Controlling” shall have correlative meanings.

“Debt”
shall mean the outstanding principal amount set forth in, and evidenced by,
this Agreement and the Note together with all interest accrued and unpaid
thereon and all other sums (including the Defeasance Payment Amount and any
Yield Maintenance Premium) due to Lender in respect of the Loan under the Note,
this Agreement, the Mortgage or any other Loan Document.

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

“Debt
Service Coverage Ratio” shall mean a ratio for the applicable
period in which:

(a)                                  the
numerator is the Net Operating Income (excluding interest on credit accounts
and using annualized operating expenses for any recurring expenses not paid
monthly (e.g., Taxes and Insurance Premiums)) for such period as set forth in
the statements required hereunder, without deduction for (i) actual
management fees incurred in connection with the operation of the Property, or
(ii) amounts paid to the Reserve Funds, less (A) management fees
equal to the greater of (1) assumed management fees of three percent (3%)
of Gross Income from Operations or (2) the actual management fees
incurred, (B) assumed Replacement Reserve Fund contributions equal to
$0.20 per square foot of gross leasable area at the Property, and (C) assumed
Rollover Reserve Fund contributions equal to $0.70 per square foot of gross
leasable area at the Property (adjusted proportionately for any period other
than one year); and

 4
 

 

(b)                                 the
denominator is the aggregate amount of principal and interest due and payable on
the Loan and any Mezzanine Loan for such applicable period (assuming a
thirty (30) year amortization schedule, unless otherwise provided herein).

“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 Interest Rate.

“Defeasance
Date” shall have the meaning set forth in Section 2.5.1(a)(i) hereof.

“Defeasance
Deposit” shall mean an amount equal to the remaining
principal amount of the Note, the Defeasance Payment Amount, any costs and
expenses incurred or to be incurred in the purchase of U.S. Obligations
necessary to meet the Scheduled Defeasance Payments and any revenue,
documentary stamp or intangible taxes or any other tax or charge due in
connection with the transfer of the Note or otherwise required to
accomplish the agreements of Sections 2.4
and 2.5 hereof (including, without
limitation, any fees and expenses of accountants, attorneys and the Rating
Agencies incurred in connection therewith).

“Defeasance
Event” shall have the meaning set forth in Section 2.5.1(a) hereof.

“Defeasance
Expiration Date” shall mean the date that is two (2)
years from the “startup day” within the meaning of Section 860G(a)(9) of the
Code for the REMIC Trust holding the Note; provided that if Lender exercises
its right to split the Note into two or more notes, the Defeasance Expiration
Date shall mean the date that is two (2) years from the “start-up day” within
the meaning of Section 860(G)(a)(9) of the Code for the REMIC Trust holding the
last such note to be included in a Securitization.

“Defeasance
Payment Amount” shall mean the amount (if any) which,
when added to the remaining principal amount of the Note will be
sufficient to purchase U.S. Obligations providing the required Scheduled
Defeasance Payments.

“Disclosure
Document” shall mean a prospectus, prospectus supplement,
private placement memorandum, offering memorandum, offering circular, term
sheet, road show presentation materials or other offering documents or
marketing materials, in each case in preliminary or final form, used to offer
Securities in connection with a Securitization.

“Eligible
Account” shall mean a separate and identifiable account
from all other funds held by the holding institution that is either (a) an
account or accounts maintained with a federal or state-chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (b) a segregated trust account or accounts maintained with
a federal or state chartered depository institution or trust company acting in
its fiduciary capacity which, in the case of a state chartered depository
institution or trust company, is subject to regulations substantially similar
to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of
at least Fifty Million and 00/100 Dollars ($50,000,000.00) and subject to

 5
 

 

supervision or examination by federal and state
authority.  An Eligible Account will not
be evidenced by a certificate of deposit, passbook or other instrument.

“Eligible
Institution” shall mean a depository institution or trust
company, the short term unsecured debt obligations or commercial paper of which
are rated at least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in
the case of accounts in which funds are held for thirty (30) days or less (or,
in the case of (a) accounts in which funds are held for more than thirty (30)
days, the long-term unsecured debt obligations of which are rated at least “AA”
by Fitch and S&P and “Aa2” by Moody’s or (b) any Letter of Credit, the
long-term unsecured debt obligations of which are rated at least “A” by Fitch
and S&P and “A2” by Moody’s).

“Embargoed
Person” shall have the meaning set forth in Section 4.1.35 hereof.

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

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and the rulings issued
thereunder.

“Event
of Default” shall have the meaning set forth in Section 8.1(a) hereof.

“Extraordinary
Expense” shall have the meaning set forth in Section 5.1.11(e) hereof.

“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.

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

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

“Gross
Income from Operations” shall mean for any period, all
income, computed in accordance with GAAP or other accounting principles
reasonably acceptable to Lender, derived from the ownership and operation of
the Property from whatever source during such period, including, but not
limited to, Rents from tenants in occupancy, open for business (except that
tenants with ratings of “BBB” (or its equivalent) or better from the Rating Agencies
need not be in occupancy or open for business) and paying full contractual rent
without right of offset or credit, utility charges, escalations, forfeited
security deposits, interest on credit accounts, service fees or charges,
license fees, parking fees, rent concessions or credits, business interruption
or other loss of income or rental insurance proceeds or other required
pass-throughs and interest on Reserve Funds, if any, but excluding Rents which
in the aggregate exceed 5% of the total Rents

 6
 

 

that are from month-to-month tenants or tenants that
are included in any Bankruptcy Action (unless such tenant’s Lease has been
affirmed in the related Bankruptcy Action), sales, use and occupancy or other
taxes on receipts required to be accounted for by Borrower to any Governmental
Authority, refunds and uncollectible accounts, sales of furniture, fixtures and
equipment, Insurance Proceeds (other than business interruption or other loss
of income or rental insurance), Awards, unforfeited security deposits, utility
and other similar deposits and any disbursements to Borrower from the Reserve
Funds, if any.  Gross income shall not be
diminished as a result of the Mortgage or the creation of any intervening
estate or interest in the Property or any part thereof.

“Guarantor”
shall mean Behringer Harvard REIT I, Inc., a Maryland corporation.

“Guaranty”
shall mean that certain Guaranty Agreement, dated as of the date hereof,
executed and delivered by Guarantor in connection with the Loan to and for the
benefit of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.

“Improvements”
shall have the meaning set forth in the granting clause of the Mortgage.

“Indebtedness”
of a Person, at a particular date, means the sum (without duplication) at such
date of (a) all indebtedness or liability of such Person (including, without
limitation, amounts for borrowed money; (b) obligations evidenced by bonds,
debentures, notes, or other similar instruments; (c) obligations for the
deferred purchase price of property or services (including trade obligations);
(d) obligations under letters of credit; (e) obligations under acceptance
facilities; (f) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds, to invest in any
Person or entity, or otherwise to assure a creditor against loss; and (g)
obligations secured by any Liens, whether or not the obligations have been
assumed.

“Indemnifying
Person” shall mean each of Borrower, Principal and
Guarantor.

“Independent Director” shall mean a natural
person serving as director of a corporation or manager of a limited liability
company who is not at the time of initial appointment, or at any time while
serving in such capacity, and has not been at any time during the preceding
five (5) years:  (a) a stockholder,
director, member, manager (with the exception of serving as the Independent
Director of Borrower or Principal), trustee, officer, employee, partner,
attorney or counsel of the Borrower or Principal or any Affiliate of either of
them; (b) a creditor, customer, supplier or other Person who derives any of its
purchases or revenues (other than fees for services as an Independent Director
and for providing services incidental thereto) from its activities with the
Borrower or Principal or any Affiliate of either of them; (c) a Person or other
entity Controlling or under common Control with any Person excluded from
serving as Independent Director under subparagraph (a) or (b); or (d) a member
of the immediate family of any Person excluded from serving as Independent
Director under subparagraph (a) or (b).

 7
 

 

“Insolvency
Opinion” shall mean that certain non-consolidation
opinion letter dated the date hereof delivered by Luce, Forward, Hamilton &
Scripps LLP in connection with the Loan.

“Insurance
Premiums” shall have the meaning set forth in Section 6.1(b) hereof.

“Insurance
Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

“Interest
Rate” shall mean a rate of 5.41% per annum.

“Lease”
shall mean any lease, sublease or subsublease, letting, license, concession or
other agreement (whether written or oral and whether now or hereafter in
effect) pursuant to which any Person is granted a possessory interest in, or
right to use or occupy all or any portion of any space in the Property, and
every modification, amendment or other agreement relating to such lease,
sublease, subsublease, or other agreement entered into in connection with such
lease, sublease, subsublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.

“Lease
Obligation Fund” shall have the meaning set forth in Section 7.6 hereof.

“Lease Obligations” shall have the meaning set
forth in Section 7.6 hereof.

“Lease Termination Fee” shall mean any payment,
fee or penalty paid by a Tenant in connection with any modification which
shortens the term of the applicable Lease or reduces the Rent due thereunder,
or the cancellation, surrender or termination of such Tenant’s Lease, whether
by reason of such Tenant’s default or pursuant to the terms of such Lease.

“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 any part thereof, or the construction, use,
alteration or operation thereof, or any part thereof, whether now or hereafter
enacted and in force, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to
Borrower, at any time in force affecting the Property or any part thereof,
including, without limitation, any which may (a) require repairs,
modifications or alterations in or to the Property or any part thereof, or
(b) in any way limit the use and enjoyment thereof.

“Lender”
shall have the meaning set forth in the introductory paragraph hereto, together
with its successors and assigns.

“Letter of Credit” shall mean an irrevocable,
unconditional, transferable, clean sight draft letter of credit with respect to
which Borrower has no reimbursement obligations, as the same may be replaced,
split, substituted, modified, amended, supplemented, assigned or otherwise
restated from time to time (either an evergreen letter of credit or a letter of
credit which does not expire until at least thirty (30) days after the
Maturity Date or such earlier date as such Letter of Credit is no longer
required pursuant to the terms of this Agreement) in favor of

 8
 

 

Lender and entitling Lender to draw thereon based
solely on a statement purportedly executed by an officer of Lender stating that
it has the right to draw thereon, and issued by a domestic Eligible Institution
or the U.S. agency or branch of a foreign Eligible Institution, or if there are
no domestic Eligible Institutions or U.S. agencies or branches of a foreign
Eligible Institution then issuing letters of credit, then such letter of credit
may be issued by a domestic bank, the long term unsecured debt rating of which
is the highest such rating then given by the Rating Agency or Rating Agencies,
as applicable, to a domestic commercial bank.

“Licenses”
shall have the meaning set forth in Section 4.1.22
hereof.

“Lien”
shall mean any mortgage, deed of trust, deed to secure debt, lien, pledge,
hypothecation, assignment (for security), security interest, or any other
encumbrance, charge or transfer (for security) of, on or affecting Borrower,
the Property, any portion thereof or any interest therein, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic’s, materialmen’s
and other similar liens and encumbrances.

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

“Loan
Documents” shall mean, collectively, this Agreement, the
Note, the Mortgage, the Assignment of Leases, the Environmental Indemnity, the
O&M Agreement, the Assignment of Management Agreement, the Guaranty, the
Cash Management Agreement, the Lockbox Agreement and all other documents
pursuant to which any Person incurs, has incurred or assumes any obligation to
or for the benefit of Lender in connection with the Loan.

“Lockbox
Account” shall have the meaning set forth in Section 2.7.1 hereof.

“Lockbox
Agreement” shall mean that certain Clearing Account
Agreement dated the date hereof among Borrower, Lender and Lockbox Bank, as the
same may be amended, restated, replaced, supplemented or otherwise modified
from time to time, relating to funds deposited in the Lockbox Account.

“Lockbox
Bank” shall mean JPMorgan Chase, N.A., or any successor
or permitted assigns thereof.

“Manager”
shall mean HPT Management Services LP, a Texas limited partnership, or, if the
context requires, a Qualifying Manager who is managing the Property in
accordance with the terms and provisions of this Agreement pursuant to a
Replacement Management Agreement.

“Material Action” means, with respect to any
Person, to file any insolvency or reorganization case or proceeding, to
institute proceedings to have such Person be adjudicated bankrupt or insolvent,
to institute proceedings under any applicable insolvency law, to seek any
relief under any law relating to relief from debts or the protection of
debtors, to consent to the filing or institution of bankruptcy or insolvency
proceedings against such Person, to file a petition seeking, or consent to,
reorganization or relief with respect to such Person under any

 9
 

 

applicable federal or state law relating to bankruptcy
or insolvency, to seek or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, custodian, or any similar official of or for
such Person or a substantial part of its property, to make any assignment for
the benefit of creditors of such Person, to admit in writing such Person’s
inability to pay its debts generally as they become due, or to affirmatively
take action in furtherance of any of the foregoing.

“Maturity
Date” shall mean January 11, 2017, 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 nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the Note
and as provided for herein or the other Loan Documents, under the laws of such
state or states whose laws are held by any court of competent jurisdiction to
govern the interest rate provisions of the Loan.

“Monthly Debt Service Payment Amount” shall
mean (a) an amount equal to interest only on the outstanding principal balance
of the Loan, calculated in accordance with the terms hereof, for each Payment
Date commencing on the Payment Date occurring in February, 2007 through and
including the Payment Date occurring in January, 2012 and (b) a constant
monthly payment of $421,616.38 with respect to each Payment Date thereafter.

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

“Mortgage”
shall mean that certain first priority Mortgage (or Deed of Trust or Deed to
Secure Debt) and Security Agreement, dated the date hereof, executed and
delivered by Borrower to Lender as security for the Loan and encumbering the
Property, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

“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.

“Net
Cash Flow Schedule” shall have the meaning set forth in Section 5.1.11(b) hereof.

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

“Net
Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

“Net
Proceeds Deficiency” shall have the meaning set forth in Section 6.4(b)(vi) hereof.

“Net
Proceeds Prepayment” shall have the meaning set forth in Section 6.4(e) hereof.

 10
 

 

“Note”
shall mean that certain Promissory Note of even date herewith, in the principal
amount of Seventy-Five Million and No/100 Dollars ($75,000,000), made by
Borrower in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

“Officer’s
Certificate” shall mean a certificate delivered to Lender
by Borrower which is signed by an authorized officer of the general partner or
managing member of Borrower.

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

“O&M
Agreement” shall mean that certain Operations and
Maintenance Agreement, dated as of the Closing Date, executed and delivered by
Borrower in connection with the Loan to and for the benefit of Lender, as the
same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

“Operating
Expenses” shall mean the total of all expenditures,
computed in accordance with GAAP or other accounting principles reasonably
acceptable to Lender, 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, and other
similar costs, but excluding depreciation, Debt Service, Capital Expenditures
and contributions to the Reserve Funds.

“Other
Charges” shall mean all ground rents, maintenance
charges, impositions other than 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 or any part thereof, but shall exclude
charges for utilities payable directly by a Tenant.

“Other
Obligations” shall have the meaning as set forth in the
Mortgage.

“Patriot Act” shall mean the USA PATRIOT Act of
2001, 107 Public Law 56 (October 26, 2001) and in other statutes and all
orders, rules and regulations of the United States government and its various
executive departments, agencies and offices related to the subject matter of
the Patriot Act, including Executive Order 13224 effective September 24, 2001.

“Payment
Date” shall mean the eleventh (11th) day of each calendar month
during the term of the Loan or, if such day is not a Business Day, the
immediately preceding Business Day.

“Permitted
Encumbrances” shall mean, with respect to the Property,
collectively, (a) the Liens and security interests created by the Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the
Title Insurance Policy, (c) Liens, if any, for Taxes imposed by

 11
 

 

any Governmental Authority not yet due or delinquent,
and (d) such other title and survey exceptions as Lender has approved or
may approve in writing in Lender’s reasonable discretion, which Permitted
Encumbrances in the aggregate do not materially adversely affect the value or
use of the Property or Borrower’s ability to repay the Loan.

“Permitted
Release Date” shall mean the date that is the third (3rd) anniversary of the first
Payment Date.

“Permitted Use” shall mean office and other
appurtenant and related uses.

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

“Personal
Property” shall have the meaning set forth in the granting
clause of the Mortgage.

“Physical
Conditions Report” shall mean a 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,
which report shall, among other things, (a) confirm that the Property and
its use complies, in all material respects, with all applicable Legal
Requirements (including, without limitation, zoning, subdivision and building
laws) and (b) to the extent available, include a copy of a final
certificate of occupancy with respect to all Improvements on the Property.

“Plan”
shall have the meaning specified in Section 5.2.9(c)
hereof.

“Policies”
shall have the meaning specified in Section 6.1(b)
hereof.

“Policy”
shall have the meaning specified in Section 6.1(b)
hereof.

“Prepayment
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 date the payment or such
proceeds are received, 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).

“Prime Rate” shall mean the prime rate reported
in the Money Rates section of The Wall Street Journal.  In the event that The Wall Street Journal
should cease or temporarily interrupt publication, the term “Prime Rate” shall
mean the daily average prime rate published in another business newspaper, or
business section of a newspaper, of national standing and general circulation
chosen by Lender.  In the event that a
prime rate is no longer generally published or is limited, regulated or
administered by a governmental or quasi-governmental body, then Lender shall
select a comparable interest rate index which is readily available and verifiable
to Borrower but is beyond Lender’s control.

 12
 

 

“Principal” shall mean the Special Purpose
Entity that is the general partner of Borrower, if Borrower is a limited
partnership, or managing member of Borrower, if Borrower is a limited liability
company.

“Prohibited Person” shall mean any Person:

(a)           a
“blocked” person listed in the Annex, or otherwise subject to the provisions
of, the Executive Order Nos. 12947, 13099 and 13224 on Terrorist Financing,
effective September 24, 2001, and all modifications thereto or thereof, and
relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (the “Annex”);

(b)           that is owned or
controlled by, or acting for or on behalf of, any Person that is listed to the
Annex, or is otherwise subject to the provisions of, the Annex;

(c)           with whom Lender is
prohibited from dealing or otherwise engaging in any transaction by any
terrorism or money laundering law, including the Annex;

(d)           who commits, threatens
or conspires to commit or supports “terrorism” as defined in the Annex;

(e)           that is named as a “specially
designated national and blocked person” on the most current list published by
the U.S. Treasury Department Office of Foreign Assets Control at its official website,
http://www.treas.gov.ofac/t11sdn.pdf or at any replacement website or other
replacement official publication of such list or any other list of terrorists
or terrorist organizations maintained pursuant to any of the rules and
regulations of the OFAC issued pursuant to the Patriot Act or on any other list
of terrorists or terrorist organizations maintained pursuant to the Patriot
Act; or

(f)            who is an Affiliate of
a Person listed above.

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

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

“Provided
Information” shall mean any and all financial and other
information provided at any time by, or on behalf of, any Indemnifying Person
with respect to any Property, Borrower, Principal, Guarantor and/or Manager.

“Qualifying
Manager” shall mean either (a) Manager; or
(b) a reputable and experienced management organization reasonably
satisfactory to Lender, which organization or its principals possess at least
ten (10) years experience in managing properties similar in size,

 13
 

 

scope, use and value as the Property, provided,
that Borrower shall have obtained (i) prior written confirmation from the
applicable Rating Agencies that management of the Property by such Person will
not cause a downgrade, withdrawal or qualification of the then current ratings
of the Securities or any class thereof and (ii) if such Person is an
Affiliate of Borrower, an Additional Insolvency Opinion.  Lender acknowledges that, notwithstanding
anything herein to the contrary, HPT Management Services LP, a Texas limited
partnership shall be deemed to be a Qualifying Manager.

“Rating
Agencies” shall mean each of S&P, Moody’s and Fitch,
or any other nationally recognized statistical rating agency which has been
approved by Lender.

“Regulation AB” shall mean Regulation AB under
the Securities Act and the Exchange Act, as such Regulation may be amended from
time to time.

“Related
Entities” shall have the meaning set forth in Section 5.2.10(e) hereof.

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

“Relevant Leasing
Threshold” shall mean any Lease for an amount of leaseable square footage
equal to one (1) full floor.

“Relevant Restoration
Threshold” shall mean Five Hundred Thousand and No/100
dollars ($500,000).

“Rents”
shall mean all rents (including, without limitation, percentage rents), rent
equivalents, moneys payable as damages or in lieu of rent or rent equivalents,
royalties (including, without limitation, all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, revenues, deposits
(including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, all other
amounts payable as rent under any Lease or other agreement relating to the
Property, including, without limitation, 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 Taxes, Operating Expenses or other reimbursables
payable to Borrower (or to the Manager for the account of Borrower) under any
Lease, and 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 (but
excluding amounts paid by Borrower to its agents or employees) from any and all
sources arising from or attributable to the Property, and proceeds, if any,
from business interruption or other loss of income insurance.

“Replacement
Management Agreement” shall mean, collectively,
(a) either (i) a management agreement with a Qualifying Manager
substantially in the same form and substance as the Property Management
Agreement, or (ii) a management agreement with a Qualifying Manager, which
management agreement shall be reasonably acceptable to Lender in form and
substance, provided, with respect to this subclause
(ii), Lender, at its option, may require that Borrower shall have obtained
prior written confirmation from the applicable Rating Agencies that such
management agreement will not cause a downgrade, withdrawal or qualification of
the

 14
 

 

then current rating of the Securities or any class
thereof and (b) an assignment of management agreement and subordination of
management fees substantially in the form then used by Lender (or of such other
form and substance reasonably acceptable to Lender), executed and delivered to
Lender by Borrower and such Qualifying Manager at Borrower’s expense.

“Replacement
Reserve Account” shall have the meaning set forth in Section 7.3.1 hereof.

“Replacement
Reserve Fund” shall have the meaning set forth in Section 7.3.1 hereof.

“Replacement
Reserve Monthly Deposit” shall have the meaning set forth
in Section 7.3.1 hereof.

“Replacements”
shall have the meaning set forth in Section 7.3.1(a)
hereof.

“Required
Amount” shall mean, at any time, an amount equal to not more than
200% of the annual premium paid by Borrower for its comprehensive “all-risk”
insurance required under this Agreement for the immediately prior year,
excluding the cost of any coverage for acts of terrorism previously provided by
insurers (“Terrorism Insurance Cap”).  If
the cost of terrorism insurance exceeds the Terrorism Insurance Cap, the
Borrower shall purchase the maximum amount of terrorism insurance available
with funds equal to the Terrorism Insurance Cap.

“Required
Repairs” shall have the meaning set forth in Section 7.1 hereof.

“Reserve
Funds” shall mean, collectively, the Tax and Insurance
Escrow Fund, the Replacement Reserve Fund, the Rollover Reserve Fund, the Lease
Obligation Fund and any other escrow fund established by the Loan Documents.

“Resizing Event” shall have the meaning set
forth in Section 9.1.2 hereof.

“Restoration”
shall mean the repair and restoration of the Property after a Casualty or
Condemnation as nearly as possible to the condition the Property was in
immediately prior to such Casualty or Condemnation, with such alterations as
may be reasonably approved by Lender.

“Restricted
Party” shall mean collectively, (a) Borrower,
Principal, any Guarantor, and any Affiliated Manager and (b) any
shareholder, partner, member, non-member manager, any direct or indirect legal
or beneficial owner of, Borrower, Principal, any Guarantor, any Affiliated
Manager or any non-member manager.

“Rollover
Reserve Account” shall have the meaning set forth in Section 7.4.1 hereof.

“Rollover
Reserve Fund” shall have the meaning set forth in Section 7.4.1 hereof.

 15

 

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

“Sale or
Pledge” shall mean a voluntary or involuntary sale,
conveyance, assignment, transfer, encumbrance, pledge, grant of option or other
transfer or disposal of a legal or beneficial interest, whether direct or
indirect.

“Scheduled
Defeasance Payments” shall have the meaning set forth in Section 2.5.1(b) hereof.

“Securities”
shall have the meaning set forth in Section 9.1
hereof.

“Securitization”
shall have the meaning set forth in Section 9.1
hereof.

“Security
Agreement” shall have the meaning set forth in Section 2.5.1(a)(vi) hereof.

“Servicer”
shall have the meaning set forth in Section 9.5
hereof.

“Servicing
Agreement” shall have the meaning set forth in Section 9.5 hereof.

“Severed
Loan Documents” shall have the meaning set forth in Section 8.2(c) hereof.

“Significant Obligor” shall have the meaning
set forth in Item 1101(k) of Regulation AB under the Securities Act.

“Special Purpose Entity” shall mean a corporation,
limited partnership or limited liability company that, since the date of its
formation and at all times on and after the date thereof, has complied with and
shall at all times comply with the following requirements unless it has
received either prior written consent to do otherwise from Lender or a
permitted administrative agent thereof, or, while the Loan is securitized,
prior written confirmation from each of the applicable Rating Agencies
requiring such review that such noncompliance would not result in the
requalification, withdrawal, or downgrade of the ratings of any Securities or
any class thereof:

(i)              is and shall be organized solely
for the purpose of (A) in the case of Borrower, acquiring, developing, owning,
holding, selling, leasing, transferring, exchanging, managing and operating the
Property, entering into and performing its obligations under the Loan Documents
with Lender, refinancing the Property in connection with a permitted repayment
of the Loan, and transacting lawful business that is incident, necessary and
appropriate to accomplish the foregoing; or (B) in the case of a Principal,
acting as a general partner of the limited partnership that owns the Property
or as member of the limited liability company that owns the Property and transacting
lawful business that is incident, necessary and appropriate to accomplish the
foregoing;

 16
 

 

(ii)             has not engaged and shall not
engage in any business unrelated to (A) the acquisition, development,
ownership, management, operation or sale of the Property, or (B) in the case of
a Principal, acting as general partner of the limited partnership that owns the
Property or acting as a member of the limited liability company that owns the
Property, as applicable;

(iii)            has not owned and shall not own any
real property other than, in the case of Borrower, the Property;

(iv)           does not have, shall not have and at
no time had any assets other than (A) in the case of Borrower, the Property and
personal property necessary or incidental to its ownership and operation of the
Property or (B) in the case of a Principal, its general partner interest in the
limited partnership or the member interest in the limited liability company
that owns the Property and personal property necessary or incidental to its
ownership of such interests;

(v)            has not engaged in, sought,
consented or permitted to and shall not engage in, seek, consent to or permit
(A) any dissolution, winding up, liquidation, consolidation or merger, (B) any
sale or other transfer of all or substantially all of its assets or any sale of
assets outside the ordinary course of its business, except as permitted by the
Loan Documents, or (C) in the case of a Principal, any transfer of its
partnership or membership interests;

(vi)           shall not cause, consent to or permit
any amendment of its limited partnership agreement, certificate of limited
partnership, articles of incorporation, articles of organization, certificate
of formation, operating agreement or other formation document or organizational
document (as applicable) with respect to the matters set forth in this
definition;

(vii)          if such entity is a limited
partnership, has and shall have at least one general partner and has and shall
have, as its only general partners, Special Purpose Entities each of which (A)
is a corporation or single-member Delaware limited liability company, (B) has
one Independent Director (provided, however, if any Rating Agency requires two
(2) Independent Directors, Borrower shall appoint, or cause the appointment of,
a second Independent Director), and (C) holds a direct interest as general
partner in the limited partnership of not less than 0.5% (or 0.1%, if the
limited partnership is a Delaware entity);

(viii)         if such entity is a corporation, has
and shall have at least one (1) Independent Director (provided, however, if any
Rating Agency requires two (2) Independent Directors, Borrower shall appoint,
or cause the appointment of, a second Independent Director), and shall not
cause or permit the board of directors of such entity to take any Material
Action either with respect to itself or, if the corporation is a Principal,
with respect to Borrower or any action requiring the unanimous affirmative vote
of one hundred percent (100%) of the members of its board of directors unless
each Independent Director shall have participated in such vote and shall have
voted in favor of such action;

 17
 

 

(ix)            if such entity is a limited
liability company (other than a limited liability company meeting all of the
requirements applicable to a single-member limited liability company set forth
in this definition of “Special Purpose Entity”), has and shall have at
least one (1) member that is a Special Purpose Entity, that is a corporation,
that has at least one (1) Independent Director (provided, however, if any Rating
Agency requires two (2) Independent Directors, Borrower shall appoint, or cause
the appointment of, a second Independent Director) and that directly owns at
least one-half-of-one percent (0.5%) of the equity of the limited liability
company (or 0.1% if the limited liability company is a Delaware entity);

(x)             if such entity is a single-member
limited liability company, (A) is and shall be a Delaware limited liability
company, (B) has and shall have at least one (1) Independent Director
(provided, however, if any Rating Agency requires two (2) Independent
Directors, Borrower shall appoint, or cause the appointment of, a second
Independent Director) serving as manager of such company, (C) shall not take
any Material Action and shall not cause or permit the members or managers of
such entity to take any Material Action, either with respect to itself or, if
such company is a Principal, with respect to Borrower, in each case unless the
required number of Independent Directors then serving as managers of the company
shall have participated and consented in writing to such action, and (D) has
and shall have either (1) a member which owns no economic interest in the
company, has signed the company’s limited liability company agreement and has
no obligation to make capital contributions to the company, or (2) a natural
person or entity that is not a member of the company, that has signed its
limited liability company agreement and that, under the terms of such limited
liability company agreement becomes a member of the company immediately prior
to the withdrawal or dissolution of the last remaining member of such company;

(xi)            has not and shall not (and, if such
entity is (a) a limited liability company, has and shall have a limited
liability agreement or an operating agreement, as applicable, (b) a limited
partnership, has a limited partnership agreement, or (c) a corporation, has a
certificate of incorporation or articles that, in each case, provide that such
entity shall not) (1) dissolve, merge, liquidate, consolidate; (2) sell all or
substantially all of its assets; (3) to the extent permitted by applicable law,
amend its organizational documents with respect to the matters set forth in
this definition without the consent of Lender; or (4) without the affirmative
vote of each Independent Director of itself or the consent of the Principal and
each Independent Director of a Principal that is a member or general partner of
it:  (A) file or consent to the filing of
any bankruptcy, insolvency or reorganization case or proceeding, institute any
proceedings under any applicable insolvency law or otherwise seek relief under
any laws relating to the relief from debts or the protection of debtors
generally, file a bankruptcy or insolvency petition or otherwise institute insolvency
proceedings; (B) seek or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, custodian or any similar official for the
entity or a substantial portion of its property; (C) make an assignment for the
benefit of the creditors of the entity; or (D) affirmatively take any action in
furtherance of any of the foregoing;

 18
 

 

(xii)           has at all times been and shall at
all times remain solvent and has paid and shall pay its debts and liabilities
(including, a fairly-allocated portion of any personnel and overhead expenses
that it shares with any Affiliate) from its assets as the same shall become
due, and has maintained and shall 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;

(xiii)          has not failed and shall not fail to
correct any known misunderstanding regarding the separate identity of such
entity;

(xiv)          has maintained and shall maintain its
bank accounts, books of account, books and records separate from those of any
other Person and, to the extent that it is not a disregarded entity for tax
purposes and is required to file tax returns under applicable law, has filed
and shall file its own tax returns, except to the extent that it is required by
law to file consolidated tax returns and, if it is a corporation, has not filed
and shall not file a consolidated federal income tax return with any other
corporation, except to the extent that it is required by law to file
consolidated tax returns;

(xv)           has maintained and shall maintain its
own resolutions and agreements;

(xvi)          has not commingled and shall not
commingle its funds or assets with those of any other Person and has not
participated and shall not participate in any cash management system with any
other Person, except with respect to a custodial account maintained by the
Manager on behalf of Affiliates of Borrower and, with respect to funds in such
custodial account, has separately accounted, and will continue to separately
account for, each item of income and expense applicable to the Property and
Borrower;

(xvii)         has held and shall hold its assets in
its own name;

(xviii)        [intentionally omitted];

(xix)          (A) has maintained and shall maintain
its financial statements, accounting records and other entity documents
separate from those of any other Person; (B) has shown and shall show, in its
financial statements, its asset and liabilities separate and apart from those
of any other Person; and (C) has not permitted and shall not permit its assets
to be listed as assets on the financial statement of any of its Affiliates
except as required by GAAP; provided, however, that any such consolidated
financial statement contains a note indicating that the Special Purpose Entity’s
separate assets and credit are not available to pay the debts of such Affiliate
and that the Special Purpose Entity’s liabilities do not  constitute obligations of the consolidated
entity;

(xx)           has paid and shall pay its own
liabilities and expenses, including the salaries of its own employees, out of
its own funds and assets, and has maintained 

 19
 

 

and shall maintain a sufficient number of employees in
light of its contemplated business operations, which may be none;

(xxi)          has observed and shall observe all
partnership, corporate or limited liability company formalities, as applicable;

(xxii)         [intentionally omitted]

(xxiii)        shall have no Indebtedness other than
(i) the Loan, (ii) liabilities incurred in the ordinary course of business
relating to the ownership and operation of the Property and the routine
administration of Borrower, in amounts not to exceed three percent (3%) of the
original principal amount of the Loan (other than management fees and
commissions and liabilities that are reserved for) and, in the case of a
general partner or managing member of a Person, liabilities arising by reason
of its status as a general partner or managing member, which liabilities are
paid not more than sixty (60) days after the later of the date incurred or invoiced
(unless disputed in good faith with adequate reserves established therefor),
are not evidenced by a note, and which amounts are normal and reasonable under
the circumstances and (iii) such other liabilities that are expressly permitted
pursuant to the Loan Documents;

(xxiv)        has not assumed, guaranteed or become
obligated and shall not assume or guarantee or become obligated for the debts
of any other Person, has not held out and shall not hold out its credit as
being available to satisfy the obligations of any other Person or has not
pledged and shall not pledge its assets for the benefit of any other Person, in
each case except as permitted pursuant to this Agreement;

(xxv)         has not acquired and shall not acquire
obligations or securities of its partners, members or shareholders or any other
owner or Affiliate (other than, in the case of Principal, its equity interest
in Borrower);

(xxvi)        has allocated and shall allocate fairly
and reasonably any overhead expenses that are shared with any of its Affiliates,
constituents, or owners, or any guarantors of any of their respective
obligations, or any Affiliate of any of the foregoing, including, but not
limited to, paying for shared office space and for services performed by any
employee of an Affiliate;

(xxvii)       has maintained and used and shall
maintain and use separate stationery, invoices and checks bearing its name and
not bearing the name of any other entity unless such entity is clearly
designated as being the Special Purpose Entity’s agent, provided, however, that
Manager, on behalf of such Person, may maintain and use invoices and checks
bearing Manager’s name;

(xxviii)      [intentionally omitted];

(xxix)         has held itself out and identified
itself and shall hold itself out and identify itself as a separate and distinct
entity under its own name or in a name 

 20
 

 

franchised or licensed to it by an entity other than
an Affiliate of Borrower and not as a division or part of any other Person,
except for services rendered by Manager under the Property Management Agreement,
so long as Manager holds itself out as an agent of Borrower

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

(xxxi)         has not made and shall not make loans
to any Person and has not held and shall not hold evidence of indebtedness
issued by any other Person or entity (other than cash and investment-grade
securities issued by an entity that is not an Affiliate of or subject to common
ownership with such entity);

(xxxii)        has not identified and shall not
identify its partners, members or shareholders, or any Affiliate of any of
them, as a division or part of it;

(xxxiii)       other than capital contributions and distributions
permitted under the terms of its organizational documents, has not entered into
or been a party to, and shall not enter into or be a party to, any transaction
with any of its partners, members, shareholders or Affiliates except in the
ordinary course of its business and on terms which are commercially reasonable
terms comparable to those of an arm’s-length transaction with an unrelated
third party;

(xxxiv)      has not had and shall not have any
obligation to, and has not indemnified and shall not indemnify its partners,
officers, directors or members, as the case may be, in each case unless such an
obligation or indemnification is fully subordinated to the Debt and shall not
constitute a claim against it in the event that its cash flow is insufficient
to pay the Debt;

(xxxv)       if such entity is a corporation, to the
extent permitted under applicable corporate law, has considered and shall
consider the interests of its creditors in connection with all corporate
actions that could reasonably be expected to affect such creditors;

(xxxvi)      has not had and shall not have any of its
obligations guaranteed by any Affiliate except as otherwise required in the
Loan Documents;

(xxxvii)     has not formed, acquired or held and shall
not form, acquire or hold any subsidiary, except that a Principal may acquire
and hold its interest in Borrower;

(xxxviii)    has complied and shall comply with all of
the terms and provisions contained in its organizational documents.

(xxxix)       has conducted and shall conduct its
business so that each of the assumptions made about it and each of the facts
stated about it in the Insolvency Opinion are true;

 21
 

 

(xl)            has not permitted and shall not
permit any Affiliate or constituent party independent access to its bank
accounts;

(xli)           is, has always been and shall
continue to be duly formed, validly existing, and in good standing in the state
of its incorporation or formation and in all other jurisdictions where it is
required to be qualified to do business; and

(xlii)          has no material contingent or actual
obligations not related to the Property.

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

“Successor
Borrower” shall have the meaning set forth in Section 2.5.3 hereof.

“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.

“Tax and
Insurance Escrow Fund” shall have the meaning set forth
in Section 7.2 hereof regardless
of whether the funds held therein are held by Lender for the payment of Taxes
or Insurance Premiums or both.

“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 or part thereof.

“Threshold
Amount” shall have the meaning set forth in Section 5.1.21 hereof.

“Tenant” shall
mean any person or entity with a possessory right to all or any part of the
Property pursuant to a Lease or other written agreement.

“Title
Insurance Policy” shall mean an ALTA mortgagee title
insurance policy in the form acceptable to Lender (or, if the Property is in a
State which does not permit the issuance of such ALTA policy, such form as
shall be permitted in such State and acceptable to Lender) issued with respect
to the Property and insuring the lien of the Mortgage.

“Transfer”
shall have the meaning set forth in Section 5.2.10(b)
hereof.

“Transferee”
shall have the meaning set forth in Section 5.2.10(e)(iii)
hereof.

“Transferee’s
Principals” shall mean collectively, (A) Transferee’s
managing members, general partners or principal shareholders and (B) such
other members, partners or shareholders which directly or indirectly shall own
a fifty-one percent (51%) or greater economic and voting interest in
Transferee.

“UCC” or “Uniform Commercial Code”
shall mean the Uniform Commercial Code as in effect in the State in which the
Property is located; provided, however, that if by 

 22
 

 

reason of mandatory provisions of law, the perfection
or the effect of perfection or non-perfection or priority of the security
interest in any item or portion of the collateral granted as security under the
Loan is governed by the Uniform Commercial Code as in effect in a jurisdiction
other than the State in which the Property is located (“Other UCC State”),
the term “Uniform Commercial Code” or “UCC” shall mean the
Uniform Commercial Code as in effect in such Other UCC State for purposes of
the provisions hereof relating to such perfection or effect of perfection or
non-perfection or priority of such collateral.

“U.S.
Obligations” shall mean non-redeemable securities
evidencing an obligation to timely pay principal and/or interest in a full and
timely manner that are (a) direct obligations of the United States of
America for the payment of which its full faith and credit is pledged, or
(b) to the extent acceptable to the Rating Agencies, other “government
securities” within the meaning of Section 2(a)(16) of the Investment
Company Act of 1940, as amended; provided that up to twenty-five percent (25%)
of the U.S. obligations may be securities issued by quasi-governmental agencies
rated at least AAA by the Rating Agencies provided that such securities are
acceptable to the Rating Agencies.

“Yield
Maintenance Premium” shall mean an amount equal to the
greater of (a) one percent (1%) of the outstanding principal of the Loan to be
prepaid or satisfied and (b) the excess, if any, of (i) the sum of the
present values of all then-scheduled payments of principal and interest under
the Note assuming that all outstanding principal and interest on the Loan is
paid on the Maturity Date (with each such payment and assumed payment
discounted to its present value at the date of prepayment at the rate which,
when compounded monthly, is equivalent to the Prepayment Rate when compounded
semi-annually and deducting from the sum of such present values any short-term
interest paid from the date of prepayment to the next succeeding Payment Date
in the event such payment is not made on a Payment Date), over (ii) the principal
amount being prepaid.

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

II.                                     GENERAL
TERMS

Section 2.1             Loan Commitment; Disbursement to
Borrower.

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

 23
 

 

2.1.2        Single Disbursement to Borrower. Borrower may request
and receive only one (1) borrowing hereunder in respect of the Loan and any
amount borrowed and repaid hereunder in respect of the Loan may not be
reborrowed.

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

2.1.4        Use of Proceeds. Borrower shall use the proceeds of
the Loan to (a) acquire the Property and/or repay and discharge any existing
loans relating to the Property, (b) pay all past-due Basic Carrying Costs,
if any, with respect to 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 closing of the Loan, as approved
by Lender, (e) fund any working capital requirements of the Property and
(f) distribute the balance, if any, to Borrower.

Section 2.2             Interest Rate.

2.2.1        Interest Rate. Interest on the outstanding principal
balance of the Loan shall accrue from (and include) the Closing Date to but
excluding the Maturity Date at the Interest Rate (unless the Default Rate shall
be in effect).

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 a three hundred sixty (360) day year
by (c) the outstanding principal balance.

2.2.3        Default Rate. In the event that, and for so long as,
any Event of Default shall have occurred and be continuing, the outstanding
principal balance of the Loan and, to the extent permitted by law, all accrued
and unpaid interest in respect of the Loan and any other amounts due pursuant
to the Loan Documents, shall accrue interest at the Default Rate, calculated
from the date such payment was due without regard to any grace or cure periods
contained herein.

2.2.4        Usury
Savings. This Agreement, the Note and the other Loan Documents 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 due hereunder
at a rate in excess of the Maximum Legal Rate, the Interest Rate or the Default
Rate, as the case may be, shall be deemed to be immediately reduced to the
Maximum Legal Rate and all previous payments in excess of the Maximum Legal
Rate shall be deemed to have been payments in reduction of principal and not on
account of the interest due hereunder. 
All sums paid or agreed to be paid to Lender for the use, 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 

 24
 

 

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.

Section 2.3             Loan Payment.

2.3.1        Monthly Debt Service Payments.  Borrower shall pay to Lender (a) on the
Closing Date, an amount equal to interest only on the outstanding principal
balance of the Loan from the Closing Date through and including the tenth (10th) day of the month following
the month in which the Closing Date occurs (unless the Closing Date is the
eleventh (11th) day of the month, in which case no such interest only payment
shall be due), and (b) on each Payment Date thereafter up to and including
the Maturity Date, Borrower shall make a payment to Lender in an amount equal
to the Monthly Debt Service Payment Amount, which payments shall be applied to
accrued and unpaid interest.

2.3.2        Payments Generally. 
The first (1st) interest accrual period hereunder shall commence on
and include the Closing Date and shall end on and include January 10,
2007.  Each interest accrual period
thereafter shall commence on the eleventh (11th) day of each calendar month during the
term of this Agreement and shall end on and include the tenth (10th) day of the following calendar
month.  For purposes of making payments
hereunder, but not for purposes of calculating interest accrual periods, if the
day on which such payment is due is not a Business Day, then amounts due on
such date shall be due on the immediately preceding Business Day and with
respect to payments of principal due on the Maturity Date, interest shall be
payable at the Interest Rate or the Default Rate, as the case may be, through
and including the day immediately preceding such Maturity Date.  All amounts due under this Agreement and the
other Loan Documents shall be payable without setoff, counterclaim, defense or
any other deduction whatsoever.

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

2.3.4        Late Payment Charge. 
If any principal, interest or any other sums due under the Loan
Documents (excluding principal due on the Maturity Date) are not paid by
Borrower on or prior to the date on which it is due, Borrower shall pay to
Lender upon demand an amount equal to the lesser of five percent (5%) of such
unpaid sum or the Maximum Legal Rate 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
Mortgage and the other Loan Documents to the extent permitted by applicable
law.

2.3.5        Method
and Place of Payment.  Except as
otherwise specifically provided herein, all payments and prepayments under this
Agreement and the Note shall be made to Lender not later than 11:00 A.M., New
York City time, on the date when due and shall be made in lawful money of the
United States of America in immediately available funds at Lender’s office or
as otherwise directed by Lender, and any funds received by Lender after such
time shall, for all purposes hereof, be deemed to have been paid on the next
succeeding Business Day.

 25
 

 

Section 2.4             Prepayments.

2.4.1        Voluntary Prepayments. 
Except as otherwise provided in Section 2.4.2,
unless the Loan is prepaid in full and such prepayment is accompanied by a
payment equal to the Yield Maintenance Premium, Borrower shall not have the
right to prepay the Loan in whole or in part prior to the Maturity Date (the “Lockout
Expiration Date”); provided that on the Payment Date three (3) months
prior to the Maturity Date, or on any Payment Date thereafter (or on any date
thereafter provided that interest is paid through the next Payment Date),
Borrower may, at its option and upon thirty (30) days prior written notice
to Lender prepay the Debt in whole without payment of the Yield Maintenance
Premium.  If for any reason Borrower
prepays the Loan on a date other than a Payment Date, Borrower shall pay Lender,
in addition to the Debt, all interest which would have accrued on the amount of
the Loan through and including the Payment Date next occurring following the
date of such prepayment.

2.4.2        Mandatory Prepayments. 
On the next occurring Payment Date following the date on which Lender
actually receives any Net Proceeds, if Lender is not obligated or does not
elect to make such Net Proceeds available to Borrower for the Restoration of
the Property or otherwise remit such Net Proceeds to Borrower pursuant to Section
6.4 hereof, Borrower shall prepay or authorize Lender to apply such Net
Proceeds as a prepayment of all or a portion of the outstanding principal
balance of the Loan together with accrued interest and any other sums due
hereunder in an amount equal to one hundred percent (100%) of such Net
Proceeds; provided,
however,
if an Event of Default has occurred and is continuing, Lender may apply such
Net Proceeds to the Debt (until paid in full) in any order or priority in its
sole discretion.  Other than during the
continuance of an Event of Default, no Yield Maintenance Premium shall be due
in connection with any prepayment made pursuant to this Section 2.4.2.

2.4.3        Prepayments After Default.  If during the continuance of an Event of
Default, payment of all or any part of the Debt is tendered by Borrower or
otherwise recovered by Lender, such tender or recovery shall be (a) made
on the next occurring Payment Date together with the Monthly Debt Service
Payment and (b) deemed a voluntary prepayment by Borrower in violation of
the prohibition against prepayment set forth in Section 2.4.1
hereof and Borrower shall pay, in addition to the Debt, an amount equal to the
Yield Maintenance Premium.

Section 2.5             Defeasance.

2.5.1        Voluntary Defeasance. 
(a)  Provided no Event of Default
shall then exist, Borrower shall have the right at any time after the earlier
to occur of the Defeasance Expiration Date and the Permitted Release Date to
voluntarily defease the Loan in full by and upon satisfaction of the following
conditions (such event being a “Defeasance Event”):

(i)            Borrower shall
provide not less than thirty (30) days prior written notice to Lender
specifying the Payment Date (the “Defeasance Date”) on which the
Defeasance Event is to occur;

(ii)           [Intentionally
Omitted];

 26
 

 

(iii)          Borrower shall pay
to Lender all other sums, not including scheduled interest or principal
payments, then due under the Note, this Agreement, the Mortgage and the other
Loan Documents;

(iv)          Borrower shall pay
to Lender the required Defeasance Deposit for the Defeasance Event;

(v)           [Intentionally
Omitted];

(vi)          Borrower shall
execute and deliver a pledge and security agreement, in form and substance that
would be reasonably satisfactory to a prudent lender creating a first priority
lien on the Defeasance Deposit and the U.S. Obligations purchased with the
Defeasance Deposit in accordance with the provisions of this Section 2.5
(the “Security Agreement”);

(vii)         Borrower shall
deliver an opinion of counsel for Borrower that is standard in commercial lending
transactions and subject only to customary qualifications, assumptions and
exceptions opining, among other things, that Borrower has legally and validly
transferred and assigned the U.S. Obligations and all obligations, rights and
duties under and to the Note to the Successor Borrower, that Lender has a
perfected first priority security interest in the Defeasance Deposit and the
U.S. Obligations delivered by Borrower and that any REMIC Trust formed pursuant
to a Securitization will not fail to maintain its status as a “real estate
mortgage investment conduit” within the meaning of Section 860D of the Code as
a result of such Defeasance Event;

(viii)        If required pursuant
to the applicable pooling and servicing agreement or by the Rating Agencies,
Borrower shall deliver confirmation in writing from each of the applicable
Rating Agencies to the effect that such release will not result in a downgrade,
withdrawal or qualification of the respective ratings in effect immediately
prior to such Defeasance Event for the Securities issued in connection with the
Securitization which are then outstanding. 
If required by the applicable Rating Agencies, Borrower shall also
deliver or cause to be delivered an Additional Insolvency Opinion with respect
to the Successor Borrower in form and substance satisfactory to Lender and the
applicable Rating Agencies;

(ix)           Borrower shall
deliver an Officer’s Certificate certifying that the requirements set forth in
this Section 2.5.1(a) have been satisfied;

(x)            Borrower shall deliver
a certificate of Borrower’s independent certified public accountant certifying
that the U.S. Obligations purchased with the Defeasance Deposit generate
monthly amounts equal to or greater than the Scheduled Defeasance Payments;

(xi)           Borrower shall deliver
such other certificates, documents or instruments as Lender may reasonably
request; and

 27
 

 

(xii)          Borrower shall pay
all costs and expenses of Lender incurred in connection with the Defeasance
Event, including (A) any costs and expenses associated with a release of the
Lien of the Mortgage as provided in Section 2.6 hereof, (B) reasonable
attorneys’ fees and expenses incurred in connection with the Defeasance Event,
(C) the costs and expenses of the Rating Agencies, (D) any revenue, documentary
stamp or intangible taxes or any other tax or charge due in connection with the
transfer of the Note, or otherwise required to accomplish the defeasance and
(E) the costs and expenses of Servicer and any trustee, including reasonable
attorneys’ fees.

(b)           In
connection with the Defeasance Event, Borrower shall use the Defeasance Deposit
to purchase U.S. Obligations which provide payments on or prior to, but as
close as possible to, all successive scheduled Payment Dates after the
Defeasance Date upon which interest and principal payments are required under
this Agreement and the Note, and in amounts equal to the scheduled payments due
on such Payment Dates under this Agreement and the Note (including, without
limitation, scheduled payments of principal, interest, servicing fees (if any),
and any other amounts due under the Loan Documents on such dates) and assuming
the Note is paid in full on the Maturity Date (the “Scheduled Defeasance
Payments”).  Any portion of the
Defeasance Deposit in excess of the amount necessary to purchase the U.S.
Obligations required by this Section 2.5 and satisfy Borrower’s other
obligations under this Section 2.5 and Section 2.6 shall be
remitted to Borrower.

2.5.2        Collateral. 
Each of the U.S. Obligations that are part of the defeasance collateral
shall be duly endorsed by the holder thereof as directed by Lender or
accompanied by a written instrument of transfer in form and substance that
would be satisfactory to a prudent lender (including, without limitation, such
instruments as may be required by the depository institution holding such
securities or by the issuer thereof, as the case may be, to effectuate book
entry transfers and pledges through the book entry facilities of such
institution) in order to perfect upon the delivery of the defeasance collateral
a first priority security interest therein in favor of Lender in conformity
with all applicable state and federal laws governing the granting of such
security interests.

2.5.3        Successor
Borrower.  In connection with any
Defeasance Event, Borrower may at its option, or if so required by the
applicable Rating Agencies shall, establish or designate a successor entity
(the “Successor Borrower”)
acceptable to Lender, which shall be a Special Purpose Entity, and Borrower
shall transfer and assign all obligations, rights and duties under and to the
Note together with the pledged U.S. Obligations to such Successor
Borrower.  Such Successor Borrower shall
assume the obligations under the Note and the Security Agreement and Borrower
shall be relieved of its obligations under such documents.  Borrower shall pay One Thousand and 00/100
Dollars ($1,000) to any such Successor Borrower as consideration for assuming
the obligations under the Note and the Security Agreement.  Notwithstanding anything in this Agreement to
the contrary, no other assumption fee shall be payable upon a transfer of the
Note in accordance with this Section 2.5.3,
but Borrower shall pay all costs and expenses incurred by Lender, including
Lender’s attorneys’ fees and expenses and any fees and expenses of any Rating
Agencies, incurred in connection therewith.

 28
 

 

Section 2.6             Release of Property. Except
as set forth in this Section 2.6 or a prepayment of the entire Loan
pursuant to Section 2.4, no repayment, prepayment or defeasance of all
or any portion of the Loan shall cause, give rise to a right to require, or
otherwise result in, the release of the Lien of the Mortgage on the
Property.  If the entire Loan has been
prepaid pursuant to Section 2.4, or after the requirements of Section
2.6.1 have been satisfied, the Property shall be released from the lien of
the Mortgage.

2.6.1        Release of Property

(a)           If
Borrower has elected to defease the entire Loan and the requirements of Section 2.5 and this Section 2.6 have been satisfied, the
Property shall be released from the Lien of the Mortgage.

(b)           In
connection with the release of the Mortgage, Borrower shall submit to Lender,
not less than thirty (30) days prior to the Defeasance Date, a release of
Lien (and related Loan Documents) for the Property for execution by
Lender.  Such release shall be in a form
appropriate in the jurisdiction in which the Property is located and that would
be satisfactory to a prudent lender and contains standard provisions, if any,
protecting the rights of the releasing lender. 
In addition, Borrower shall provide all other documentation Lender
reasonably requires to be delivered by Borrower in connection with such
release, together with an Officer’s Certificate certifying that such
documentation (i) is in compliance with all Legal Requirements, and
(ii) will effect such releases in accordance with the terms of this
Agreement.

2.6.2        Release on Payment in Full.  Lender shall, upon payment in full of all
principal and interest due on the Loan and all other amounts due and payable
under the Loan Documents in accordance with the terms and provisions of the
Note and this Agreement, release the Lien of the Mortgage on the Property.  Borrower shall pay to Lender all reasonable
administrative and legal costs incurred in connection with such release.

Section 2.7             Lockbox Account/Cash Management.

2.7.1        Lockbox Account.

(a)           During the term of
the Loan, Borrower shall establish and maintain an account (the “Lockbox
Account”) with Lockbox Bank in trust for the benefit of Lender, which
Lockbox Account shall be under the sole dominion and control of Lender.  The Lockbox Account shall be entitled “Behringer
Harvard Eldridge Place LP, as Borrower, and Wachovia Bank, National
Association, as Lender, pursuant to Loan Agreement dated as of December    ,
2006 – Lockbox Account”.  Borrower hereby
grants to Lender a first-priority security interest in the Lockbox Account and
all deposits at any time contained therein and the proceeds thereof and will
take all actions necessary to maintain in favor of Lender a perfected first
priority security interest in the Lockbox Account, including, without
limitation, executing and filing UCC-1 Financing Statements and continuations
thereof.  Lender and Servicer shall have
the sole right to make withdrawals from the Lockbox Account and all costs and
expenses for establishing and maintaining the Lockbox Account shall be paid by
Borrower.  All monies now or hereafter
deposited into the Lockbox Account shall be deemed additional security for the
Debt.

 29
 

 

(b)           Borrower
shall, or shall cause Manager to, deliver irrevocable written instructions to
all tenants under Leases to deliver all Rents payable thereunder directly to
the Lockbox Account.  Borrower shall, and
shall cause Manager to, deposit all amounts received by Borrower or Manager
constituting Rents into the Lockbox Account within one (1) Business Day
after receipt thereof.

(c)           Borrower
shall obtain from Lockbox Bank its agreement to transfer to the Cash Management
Account in immediately available funds by federal wire transfer all amounts on
deposit in the Lockbox Account once every Business Day during the continuance
of a Cash Sweep Period.

(d)           Upon
the occurrence of an Event of Default, Lender may, in addition to any and all
other rights and remedies available to Lender, apply any sums then present in
the Lockbox Account to the payment of the Debt in any order in its sole
discretion.

(e)           The
Lockbox Account shall be an Eligible Account and shall not be commingled with
other monies held by Borrower or Lockbox Bank.

(f)            Borrower
shall not further pledge, assign or grant any security interest in the Lockbox
Account or the monies deposited therein or permit any lien or encumbrance to
attach thereto, or any levy to be made thereon, or any UCC-1 Financing
Statements, except those naming Lender as the secured party, to be filed with
respect thereto, and except for the rights of the Lockbox Bank under the
Lockbox Agreement.

(g)           Borrower
shall indemnify Lender and hold Lender harmless from and against any and all
actions, suits, claims, demands, liabilities, losses, damages, obligations and
costs and expenses (including litigation costs and reasonable attorneys fees
and expenses) arising from or in any way connected with the Lockbox Account
and/or the Lockbox Agreement (unless arising from the gross negligence or
willful misconduct of Lender) or the performance of the obligations for which
the Lockbox Account was established.

2.7.2        Cash Management Account.

(a)           Pursuant
to the Cash Management Agreement, Lender has established an account (the “Cash
Management Account”) with a financial institution chosen by Lender in its
discretion, which Cash Management Account shall be under the sole dominion and
control of Lender.  Borrower hereby
grants to Lender a first priority security interest in the Cash Management
Account and all deposits at any time contained therein and the proceeds thereof
and will take all actions necessary to maintain in favor of Lender a perfected
first priority security interest in the Cash Management Account, including,
without limitation, executing and filing UCC-1 Financing Statements and
continuations thereof.  Lender and
Servicer shall have the sole right to make withdrawals from the Cash Management
Account and all costs and expenses for establishing and maintaining the Cash
Management Account shall be paid by Borrower.

(b)           The insufficiency of
funds on deposit in the Cash Management Account shall not relieve Borrower from
the obligation to make any payments, as and when due pursuant to this Agreement
and the other Loan Documents, and such obligations shall be separate and
independent, and not conditioned on any event or circumstance whatsoever.

 30

 

(c)           All
funds on deposit in the Cash Management Account following the occurrence of an
Event of Default may be applied by Lender in such order and priority as Lender
shall determine.

(d)           Borrower
hereby agrees that Lender may modify the Cash Management Agreement for the
purpose of establishing additional sub-accounts in connection with any payments
otherwise required under this Agreement and the other Loan Documents and Lender
shall provide notice thereof to Borrower.

2.7.3        Payments Received Under the Cash Management Agreement.  Notwithstanding anything to the contrary
contained in this Agreement or the other Loan Documents, and provided no Event
of Default has occurred and is continuing, Borrower’s obligations with respect
to the payment of the Monthly Debt Service Payment Amount and amounts required
to be deposited into the Reserve Funds, if any, shall be deemed satisfied to
the extent sufficient amounts are deposited in the Cash Management Account to
satisfy such obligations pursuant to the Cash Management Agreement on the dates
each such payment is required, regardless of whether any of such amounts are so
applied by Lender.

III.                                 INTENTIONALLY
OMITTED

IV.                                 REPRESENTATIONS
AND WARRANTIES

Section 4.1             Borrower Representations.  Borrower represents and warrants as of the
date hereof and as of the Closing Date that, except as set forth on Schedule
V:

4.1.1        Organization. 
Borrower has been duly organized and is validly existing and in good
standing with requisite power and authority to own the Property 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
the Property, businesses and operations. 
Borrower possesses all rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own the Property and to
transact the businesses in which it is now engaged, and the sole business of
Borrower is the ownership, management, operation and sale of the Property.

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, subject only to applicable
bankruptcy, insolvency and similar laws affecting rights of creditors
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

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,

 31
 

 

loan agreement, partnership 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 to Borrower’s Knowledge will such
action result in any violation of the provisions of any statute or any order,
rule or regulation of any Governmental Authority having jurisdiction over
Borrower or any of Borrower’s properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such Governmental Authority 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 are no actions, suits or proceedings at law or in equity by or
before any Governmental Authority or other agency now pending or, to Borrower’s
Knowledge, threatened against or affecting Borrower, Guarantor, or Principal
or, to Borrower’s Knowledge (based on a litigation search with respect to the
Property), affecting title to the Property, which actions, suits or
proceedings, if determined against Borrower, Guarantor, Principal or the
Property, might materially adversely affect the condition (financial or
otherwise) or business of Borrower, Guarantor, Principal or the condition or
ownership of the Property.

4.1.5        Agreements. 
Except such instruments and agreements set forth as Permitted
Encumbrances in the Title Insurance Policy, Borrower is not a party to any
agreement or instrument or subject to any restriction which might materially
and adversely affect Borrower or the Property, or Borrower’s business,
properties or assets, operations or condition, financial or otherwise.  Borrower is not in default in any 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, which would individually or in
the aggregate have a material adverse effect on (a) the Property, (b) the
business, prospects, profits, management, operations or condition (financial or
otherwise) of Borrower, (c) the enforceability, validity, perfection or
priority of the lien of any Loan Document or (d) the ability of Borrower to
perform any obligations under any Loan Document.  Borrower has no material 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 or the Property
is otherwise bound, other than (a) obligations incurred in the ordinary
course of the operation of the Property as permitted pursuant to
clause (xxiii) of the definition of “Special Purpose Entity” set forth in Section 1.1 hereof and
(b) obligations under the Loan Documents.

4.1.6        Title.  Borrower
has good and indefeasible 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, such other Liens as
are permitted pursuant to the Loan Documents and the Liens created by the Loan
Documents.  The Permitted Encumbrances in
the aggregate do not materially and adversely affect the value, operation or
use of the Property (as currently used) or Borrower’s ability to repay the
Loan.  There are no claims for payment
for work, labor or materials affecting the Property which are due and unpaid
under the contracts pursuant to which work or labor was performed or materials
provided which are or may become a Lien prior to, or of equal priority with,
the Liens created by the Loan Documents.

4.1.7        Solvency;
No Bankruptcy Filing.  Borrower
(a) has not entered into the transaction or executed the Note, this
Agreement or any other Loan Documents with the actual 

 32
 

 

intent to hinder, delay or defraud any
creditor and (b) received reasonably equivalent value in exchange for its obligations
under such Loan Documents.  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.  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, and does not believe that it will, 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).  Except as expressly disclosed to Lender in
writing, no petition in bankruptcy has been filed against Borrower, or to
Borrower’s Knowledge, or any constituent Person in the last seven (7)
years, and neither Borrower nor, to Borrower’s Knowledge, any constituent
Person in the last seven (7) years has ever made an assignment for the
benefit of creditors or taken advantage of any insolvency act for the benefit
of debtors.  Neither Borrower nor any of
its constituent Persons are contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation of
all or a major portion of Borrower’s assets or property, and Borrower has no
knowledge of any Person contemplating the filing of any such petition against
it or such constituent Persons.

4.1.8        Full and Accurate Disclosure.  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, to Borrower’s Knowledge, 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 the Property or the business, operations or condition
(financial or otherwise) of Borrower.

4.1.9        No Plan Assets. 
Borrower does not sponsor, is not obligated to contribute to, and is not
itself an “employee benefit plan,” as defined in Section 3(3) of ERISA,
subject to Title I of ERISA or Section 4975 of the Code, and none of the
assets of Borrower constitutes or will constitute “plan assets” of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101.  In addition, (a) Borrower is not a “governmental
plan” within the meaning of Section 3(32) of ERISA and
(b) transactions by or with Borrower are not subject to any state or other
statute, regulation or other restriction regulating investments of, or
fiduciary obligations with respect to, governmental plans within the meaning of
Section 3(32) of ERISA which is similar to the provisions of Section 406
of ERISA or Section 4975 of the Code and which prohibit or otherwise restrict
the transactions contemplated by this Agreement, including, but not limited to
the exercise by Lender of any of its rights under the Loan Documents.

4.1.10      Compliance.  To Borrower’s Knowledge, Borrower and the
Property and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes.  Borrower is
not in default or violation of any order, writ, injunction, decree or demand of
any Governmental Authority.  There has
not been committed by Borrower or, to Borrower’s Knowledge, any other Person in

 33
 

 

occupancy of or involved with the operation
or use of the Property any act or omission affording the federal government or
any other Governmental Authority the right of forfeiture as against the
Property or any part thereof or any monies paid in performance of Borrower’s
obligations under any of the Loan Documents.

4.1.11      Financial Information. 
To Borrower’s Knowledge, all financial data, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered to Lender in respect of the Property (i) are true,
complete and correct in all material respects, (ii) accurately represent
the financial condition of Borrower and the Property, as applicable, as of the
date of such reports, and (iii) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with accounting principles reasonably acceptable to Lender, consistently
applied throughout the periods covered, except as disclosed therein.  Borrower does not have any contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments 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 operation thereof for the Permitted Use, except as referred
to or reflected in said financial statements. 
Since the date of such financial statements, there has been no
materially adverse change in the financial condition, operations or business of
Borrower from that set forth in said financial statements.

4.1.12      Condemnation.  No
Condemnation or other proceeding has been commenced or, to Borrower’s
Knowledge, is contemplated with respect to all or any portion of the Property
or for the relocation of roadways providing access to the Property.

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

4.1.14      Utilities and Public Access.  The Property has rights of access to public
ways and is served by water, sewer, sanitary sewer and storm drain facilities
adequate to service the Property for its intended uses.  All public utilities necessary or, to
Borrower’s Knowledge, convenient to the full use and enjoyment of the Property
are located either in the public right-of-way abutting the Property (which are
connected so as to serve the Property without passing over other property) or
in recorded easements serving the Property and such easements are set forth in
and insured by the Title Insurance Policy. 
All roads 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.

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

4.1.16      Separate
Lots.  The Property is comprised of
one (1) or more parcels which constitute a separate tax lot or lots and
does not constitute a portion of any other tax lot not a part of the Property.

 34
 

 

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

4.1.18      Enforceability. 
The Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense by Borrower or Guarantor, including the defense of
usury, nor would the operation of any of the terms of the Loan Documents, or
the exercise of any right thereunder exercised by Lender in accordance with
applicable law, render the Loan Documents unenforceable, and neither Borrower
nor Guarantor has asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.

4.1.19      No Prior Assignment. 
There is no prior assignment of the Leases or any portion of the Rents
by Borrower or any of its predecessors in interest, given as collateral
security which will be outstanding upon application of the proceeds of the
Loan.

4.1.20      Insurance. 
Borrower has obtained and has delivered to Lender (a) certified copies
of the Policies reflecting the insurance coverages, amounts and other
requirements set forth in this Agreement or (b) other evidence of such matters
acceptable to Lender.  No claims have
been made or are currently pending, outstanding or otherwise remain unsatisfied
under any such Policy, and neither Borrower nor, to Borrower’s Knowledge, any
other Person, has done, by act or omission, anything which would impair the
coverage of any such Policy.

4.1.21      Use of Property. 
The Property is used exclusively for the Permitted Use.

4.1.22      Certificate of Occupancy; Licenses.  All certifications, permits, licenses and
approvals, including without limitation, certificates of completion and
occupancy permits required to be obtained by Borrower for the legal use,
occupancy and operation of the Property for the Permitted Use have been
obtained and are in full force and effect, and to Borrower’s Knowledge, all
certifications, permits, licenses and approvals, including without limitation,
certificates of completion and occupancy permits required to be obtained by any
Person other than Borrower for the legal use, occupancy and operation of the
Property the Permitted Use, have been obtained and are in full force and effect
(all of the foregoing certifications, permits, licenses and approvals are
collectively referred to as the “Licenses”).  Borrower shall and shall cause all other
Persons to, keep and maintain all licenses necessary for the operation of the
Property for the Permitted Use. To Borrower’s Knowledge, the use being made of
the Property is in conformity with all certificates of occupancy issued for the
Property.

4.1.23      Flood Zone.  No
Improvements on the Property are located in an area identified by the Federal
Emergency Management Agency as an area having special flood hazards or, if so
located, the flood insurance required pursuant to Section 6.1(a)(i)
is in full force and effect with respect to the Property.

4.1.24      Physical
Condition.  Except as disclosed in
the Physical Conditions Report delivered to Lender in connection with this
Loan, to Borrower’s Knowledge, the Property, including, without limitation, all
buildings, improvements, parking facilities, sidewalks, storm 

 35
 

 

drainage systems, roofs, plumbing systems,
HVAC systems, fire protection systems, electrical systems, equipment,
elevators, exterior sidings and doors, landscaping, irrigation systems and all
structural components, are in good condition, order and repair in all material
respects; there exists no structural or other material defects or damages in
the Property and Borrower has not received notice from any insurance company or
bonding company of any defects or inadequacies in the Property, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination
or threatened termination of any policy of insurance or bond.

4.1.25      Boundaries.  To
Borrower’s Knowledge, 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, and no improvements
on adjoining properties encroach upon the Property, and no easements or other
encumbrances upon the Property encroach upon any of the Improvements, so as to
affect the value or marketability of the Property except those which are
insured against by the Title Insurance Policy.

4.1.26      Leases.  The Property is not subject to any leases
other than the Leases described in the Rent Roll attached as Schedule II
hereto and made a part hereof.  Borrower
is the owner and lessor of landlord’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.  The current
Leases are in full force and effect and, to Borrower’s Knowledge, 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.  No Rent (including security
deposits) has been paid more than one (1) month in advance of its due
date.  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 has already been received by such tenant.  There has been no prior sale, transfer or
assignment, hypothecation or pledge of any Lease or of the Rents received
therein which is outstanding.  To
Borrower’s Knowledge, except as set forth on Schedule II, no tenant
listed on Schedule II 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 set forth in Schedule II, no
tenant under any Lease has any right or option for additional space in the Improvements.  To Borrower’s knowledge based on the
Environmental Report delivered to Lender in connection herewith, no hazardous
wastes or toxic substances, as defined by applicable federal, state or local
statutes, rules and regulations, have been disposed, stored or treated 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, disposal or transportation of any petroleum product or any toxic or
hazardous chemical, material, substance or waste, except in either event, in
compliance with applicable federal, state or local statues, rules and
regulations.

 36
 

 

4.1.27      Survey.  To
Borrower’s Knowledge, no Survey for the Property delivered to Lender in
connection with this Agreement fails to reflect any material matter affecting
the Property or the title thereto.

4.1.28      Inventory. 
Borrower is the owner of all of the Equipment, Fixtures and Personal
Property (as such terms are defined in the Mortgage) located on or at the
Property and shall not lease any Equipment, Fixtures or Personal Property other
than as permitted hereunder.  All of the
Equipment, Fixtures and Personal Property are sufficient to operate the
Property in the manner required hereunder and in the manner in which it is
currently operated.

4.1.29      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 acquisition of the Property to Borrower have been paid or
are paid on the Closing Date.  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 Mortgage, have been paid, and, under current Legal
Requirements, the Mortgage is enforceable in accordance with its terms by
Lender (or any subsequent holder thereof).

4.1.30      Special Purpose Entity/Separateness.

(a)           Until
the Debt has been paid in full, Borrower hereby represents, warrants and
covenants that (i) Borrower has at all times since its formation been, shall be
and shall continue to be a Special Purpose Entity and (ii) Principal has at all
times since its formation been, shall be and shall continue to be a Special
Purpose Entity (Lender acknowledges that the single purpose provisions
contained in the organizational documents of Borrower and Principal satisfy the
requirements of a Special Purpose Entity).

(b)           The
representations, warranties and covenants set forth in Section 4.1.30(a)
shall survive for so long as any amount remains payable to Lender under this
Agreement or any other Loan Document.

(c)           All
of the facts stated and all of the assumptions made in the Insolvency Opinion,
including, but not limited to, in any exhibits attached thereto, are true and
correct in all respects.  Borrower has
complied and will comply with, and Principal has complied and Borrower will
cause Principal to comply with, all of the assumptions made with respect to
Borrower and Principal in the Insolvency Opinion.  Borrower will comply with all of the
assumptions made with respect to Borrower and Principal in any subsequent
non-consolidation opinion required to be delivered in connection with the Loan
Documents (an “Additional Insolvency Opinion”).  Each Affiliate of Borrower and Principal with
respect to which an assumption shall be made in any Additional Insolvency
Opinion will comply with all of the assumptions made with respect to it in any
Additional Insolvency Opinion.

4.1.31      Property
Management Agreement.  The Property
Management Agreement is in full force and effect and, to Borrower’s Knowledge,
there are no defaults thereunder by any 

 37
 

 

party thereto and no event has occurred that,
with the passage of time and/or the giving of notice would constitute a default
thereunder.

4.1.32      Illegal Activity. 
No portion of the Property has been or will be purchased with proceeds
of any illegal activity.

4.1.33      No Change in Facts or Circumstances; Disclosure.  All information submitted by Borrower to
Lender and in all financial statements, rent rolls (including the rent roll
attached hereto as Schedule II), reports, certificates and other
documents submitted in connection with the Loan or in satisfaction of the terms
thereof and all statements of fact made by Borrower in this Agreement or in any
other Loan Document, are accurate, complete and correct in all material
respects, provided, however, that if such information was provided to Borrower
by non-affiliated third parties, Borrower represents that such information is,
to Borrower’s Knowledge, accurate, complete and correct in all material
respects.  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 Provided Information or representation or
warranty made herein to be materially misleading.

4.1.34      Investment Company Act. 
Borrower is not (a) an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended; (b) a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended; or (c) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.

4.1.35      Embargoed
Person.  As of the Closing Date, to
Borrower’s Knowledge, (a) none of the funds or other assets of Borrower
constitute property of, or are beneficially owned, directly or indirectly, by
any person, entity or government named on the OFAC List, subject to trade
restrictions under U.S. law, including, but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et  seq.,
The Trading with the Enemy Act, 50 U.S.C. App. 1 et  seq.,
the Uniting and Strengthening America by Providing Appropriate Tools required
to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56 and any
Executive Orders or regulations promulgated thereunder with the result that the
investment in Borrower, Principal or Guarantor, as applicable (whether directly
or indirectly), is prohibited by law or the Loan made by the Lender is in
violation of law (“Embargoed Person”); (b) no Embargoed Person has any
interest of any nature whatsoever in Borrower with the result that the
investment in Borrower (whether directly or indirectly), is prohibited by law
or the Loan is in violation of law; (c) none of the funds of Borrower have been
derived from any unlawful activity with the result that the investment in
Borrower (whether directly or indirectly), is prohibited by law or the Loan is
in violation of law; and (d) Borrower, Principal and Guarantor are in full
compliance with all applicable orders, rules, regulations and recommendations
of The Office of Foreign Asset Control of the U.S. Department of Treasury.

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4.1.36      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.  The Borrower is organized
under the laws of the State of Delaware.

4.1.37      Loan to Value. 
The maximum principal amount of the Loan does not exceed one hundred
twenty-five percent (125%) of the fair market value of the Property as set forth
on the appraisal of the Property.

4.1.38      Mortgage Taxes. 
As of the date hereof, Borrower represents that it has paid or has
deposited with the title company issuing the Title Insurance Policy funds
sufficient to pay all state, county and municipal recording and all other taxes
imposed upon the execution and recordation of the Mortgage.

Section 4.2             Survival of Representations.  Borrower agrees that all of the
representations and warranties of Borrower set forth in Section 4.1 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

Section 5.1             Affirmative Covenants.  From the Closing Date and until payment and
performance in full of all obligations of Borrower under the Loan Documents or
the earlier release of the Lien of the Mortgage encumbering the Property (and
all related obligations) in accordance with the terms of this Agreement and the
other Loan Documents, Borrower hereby covenants and agrees with Lender that:

5.1.1        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, permits and franchises and comply with all Legal
Requirements applicable to it and the Property. 
Borrower shall not commit, nor shall Borrower permit any other Person in
occupancy of or involved with the operation or use of the Property to commit
any act or omission affording the federal government or any state or local
government the right of forfeiture as against the Property or any part thereof
or any monies paid in performance of Borrower’s obligations under any of 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 its
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, all as more fully provided in the Mortgage.  Borrower shall keep the Property insured at
all times by financially sound and reputable insurers, to such extent and
against such risks, and maintain liability and such other insurance, as is more
fully provided in this Agreement. 
Borrower shall operate the Property in accordance with the terms and
provisions of the O&M Agreement in all material respects.  After prior written notice to Lender,

 39
 

 

Borrower, at its own expense, may contest by
appropriate legal proceeding promptly initiated and conducted in good faith and
with due diligence, the validity of any Legal Requirement, the applicability of
any Legal Requirement to Borrower or the Property or any alleged violation of
any Legal Requirement, provided that (i) no Default or Event of Default
has occurred and remains uncured; (ii) intentionally omitted;
(iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any instrument to which Borrower is subject
and shall not constitute a default thereunder and such proceeding shall be
conducted in accordance with all applicable statutes, laws and ordinances;
(iv) neither the Property nor any part thereof or interest therein will be
in immediate danger of being sold, forfeited, terminated, cancelled or lost;
(v) Borrower shall promptly upon final determination thereof comply with
any such Legal Requirement determined to be valid or applicable or cure any
violation of any Legal Requirement; (vi) such proceeding shall suspend the
enforcement of the contested Legal Requirement against Borrower or the
Property; and (vii) Borrower shall furnish such security as may be
required in the proceeding, or as may be requested by Lender, to insure
compliance with such Legal Requirement, together with all interest and
penalties payable in connection therewith. 
Lender may apply any such security, as necessary to cause compliance
with such Legal Requirement at any time when, in the reasonable judgment of
Lender, the validity, applicability or violation of such Legal Requirement is
finally established or the Property (or any part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or lost.  Provided no Event of Default then exists, any
security deposited with Lender pursuant to this Section 5.1.1 may be
used to satisfy compliance with the related Legal Requirement with any excess
after the satisfaction of same to be returned to Borrower.

5.1.2        Taxes
and Other Charges. Borrower shall pay or cause to be paid all Taxes and
Other Charges now or hereafter levied or assessed or imposed against the
Property or any part thereof prior to the same becoming delinquent or the
imposition of penalties and interest due thereon; provided, however, Borrower’s
obligation to directly pay to the appropriate taxing authority Taxes shall be
suspended if Borrower has deposited amounts for the payment of such Taxes into
the Tax and Insurance Escrow Fund pursuant to of Section 7.2
hereof.  Borrower will deliver to Lender
receipts for payment or other evidence satisfactory to Lender that the 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 Taxes and/or Other Charges would
otherwise be delinquent if not paid (provided, however, that Borrower is not
required to furnish such receipts for payment of Taxes in the event that such
Taxes have been paid by Lender pursuant to Section 7.2
hereof).  If Borrower pays or causes to
be paid all Taxes and Other Charges and provides a copy of the receipt
evidencing the payment thereof to Lender, then Lender shall reimburse Borrower,
provided that there are then sufficient proceeds in the Tax and Insurance
Escrow Fund and provided that the Taxes are being paid pursuant to Section
7.2.  Upon written request of
Borrower, if Lender has paid such Taxes pursuant to Section 7.2 hereof,
Lender shall provide Borrower with evidence that such Taxes have been
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 Taxes or Other
Charges, provided that (i)  Borrower is permitted to do so under the
provisions of any mortgage or deed of trust superior in lien to the Mortgage;
(ii) such proceeding shall be permitted 

 40
 

 

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;
(iii) neither the Property nor any part thereof or interest therein will
be in immediate danger of being sold, forfeited, terminated, cancelled or lost;
(iv) Borrower shall promptly upon final determination thereof pay the
amount of any such Taxes or Other Charges, together with all costs, interest
and penalties which may be payable in connection therewith; (v) such
proceeding shall suspend the collection of such contested Taxes or Other
Charges from the Property; and (vi) Borrower shall furnish such security
as may be required in the proceeding, or as may be reasonably requested by
Lender, to insure the payment of any such Taxes or Other Charges, together with
all interest and penalties thereon. 
Lender may pay over any such cash deposit or part thereof held by Lender
to the claimant entitled thereto at any time when, in the reasonable judgment
of Lender, the entitlement of such claimant is established or the Property (or
part thereof or interest therein) shall be in imminent danger of being sold,
forfeited, terminated, cancelled or lost or there shall be any danger of the
Lien of the Mortgage being primed by any related Lien other than a Lien in
respect of Taxes being contested in accordance with the provisions of this Section
5.1.2.  Provided no Event of Default
then exists, any security deposited with Lender pursuant to this Section
5.1.2 may be used to satisfy the related Taxes or Other Charges with any
excess after the satisfaction of same to be returned to Borrower.

5.1.3        Litigation. 
Borrower shall give prompt written notice to Lender upon obtaining
information of any litigation or governmental proceedings pending or threatened
against Borrower and/or Guarantor which might materially adversely affect
Borrower’s or Guarantor’s condition (financial or otherwise) or business or the
Property.

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

5.1.5        Notice of Default. 
Borrower shall promptly advise Lender of the occurrence of any Default
or Event of Default of which Borrower has knowledge.

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

5.1.7        Perform 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.

5.1.8        Award
and Insurance Benefits.  Borrower
shall cooperate with Lender in obtaining for Lender the benefits of any Awards
or Insurance Proceeds lawfully or equitably payable in connection with the
Property, and Lender shall be reimbursed for any expenses incurred in
connection therewith (including reasonable attorneys’ fees and disbursements,
and

 41
 

 

the payment by Borrower of the expense of an
appraisal on behalf of Lender in case of Casualty or Condemnation affecting the
Property or any part thereof) out of such Insurance Proceeds.

5.1.9        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;

(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; 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.

5.1.10      Principal
Place of Business, State of Organization. 
Borrower will not cause or permit any change to be made in its name,
identity (including its trade name or names), place of organization or
formation (as set forth in Section 4.1.36 hereof) or Borrower’s
corporate, partnership or other structure unless Borrower shall have first
notified Lender in writing of such change at least thirty (30) days prior to
the effective date of such change, and shall have first taken all action
required by Lender for the purpose of perfecting or protecting the lien and
security interests of Lender pursuant to this Agreement and the other Loan
Documents and, in the case of a change in Borrower’s structure, without first
obtaining the prior 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.  Borrower’s principal place
of business and chief executive office, and the place where Borrower keeps its
books and records, including recorded data of any kind or nature, regardless of
the medium or recording, including software, writings, plans, specifications
and schematics, has been for the preceding four months (or, if less, the entire
period of the existence of Borrower) and will continue to be the address of
Borrower set forth at the introductory paragraph of this Agreement (unless
Borrower notifies Lender in writing at least thirty (30) days prior to the
date of such change).  Borrower’s
organizational identification number, if any, assigned by the state of
incorporation or organization is correctly set forth in the introductory
paragraph of this Agreement.  Borrower
shall promptly notify Lender of any change in its organizational identification
number.  If Borrower does not now have an
organizational identification number and later obtains one, Borrower promptly
shall notify Lender of such organizational identification number.

 42
 

 

5.1.11      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 reasonably
acceptable to Lender), 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 and during the
continuance of an Event of Default, Borrower shall pay any costs and expenses
incurred by Lender to examine Borrower’s accounting records with respect to the
Property, as Lender shall reasonably 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, certified annual financial statements
prepared in accordance with GAAP (or such other accounting basis reasonably
acceptable to Lender) 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.  Such
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) an Officer’s Certificate 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 reasonably
acceptable to Lender), (iii) a list of tenants, if any, occupying more than
twenty percent (20%) of the total floor area of the Improvements, (iv) a
breakdown showing the year in which each Lease then in effect expires and the
percentage of total floor area of the Improvements and the percentage of base
rent with respect to which Leases shall expire in each such year, each such
percentage to be expressed on both a per year and cumulative basis, and (v) a
schedule reconciling Net Operating Income to Net Cash Flow (the “Net Cash
Flow Schedule”), which shall itemize all material adjustments made to Net
Operating Income to arrive at Net Cash Flow. 
Together with Borrower’s annual financial statements, Borrower shall
furnish to Lender an Officer’s Certificate certifying to its knowledge as of
the date thereof whether there exists an event or circumstance which
constitutes 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 twenty (20) days
after the end of each calendar quarter the following items, accompanied by an
Officer’s Certificate 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) as
applicable:  (i)  quarterly and year-to-date operating
statements (including Capital Expenditures) prepared for each calendar quarter,
noting Net Operating Income, Gross Income from Operations, and Operating
Expenses (not including any contributions to the Replacement Reserve Fund), and
other information necessary and sufficient

 43
 

 

to fairly represent the financial position and results of operation of
the Property during such calendar quarter, and containing a comparison of
budgeted income and expenses and the actual income and expenses together with a
detailed explanation of any variances of five percent (5%) or more between
budgeted and actual amounts for such periods, all in form satisfactory to
Lender; (ii) a calculation reflecting the annual Debt Service Coverage Ratio
for the immediately preceding twelve (12) month period as of the last day of
such quarter accompanied by an Officer’s Certificate with respect thereto; and
(iii) a Net Cash Flow Schedule.  Prior to
a Securitization, Borrower shall provide the items required pursuant to this Section
5.1.11(c) on a monthly basis.

(d)           For
the partial year period commencing on the Closing Date, and for each Fiscal
Year thereafter, Borrower shall submit to Lender an Annual Budget not later
than thirty (30) days after the commencement of such period or Fiscal Year in
form reasonably satisfactory to Lender. 
The Annual Budget shall be subject to Lender’s written approval if a
Cash Sweep Period exists (each such Annual Budget, an “Approved Annual
Budget”).  In the event that Lender
objects to a proposed Annual Budget submitted by Borrower during a Cash Sweep
Period, Lender shall advise Borrower of such objections within fifteen (15)
days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections) and Borrower shall promptly revise such Annual
Budget and resubmit the same to Lender. 
Lender shall advise Borrower of any objections to such revised Annual Budget
within ten (10) days after receipt thereof (and deliver to Borrower a
reasonably detailed description of such objections) and Borrower shall promptly
revise the same in accordance with the process described in this subsection
until Lender approves the Annual Budget. 
Until such time that Lender approves a proposed Annual Budget, the most
recently Approved Annual Budget shall apply; provided that, such Approved
Annual Budget shall be adjusted to reflect actual increases in Taxes, Insurance
Premiums and Other Charges.

(e)           In
the event that a Cash Sweep Period Exists and Borrower must incur an
extraordinary operating expense or capital expense not set forth in the
Approved Annual Budget (each an “Extraordinary Expense”), then Borrower
shall promptly deliver to Lender a reasonably detailed explanation of such
proposed Extraordinary Expense for Lender’s approval.

(f)            Any
reports, statements or other information required to be delivered under this
Agreement shall be delivered (i) in paper form, (ii) on a diskette, and (iii)
if requested by Lender and within the capabilities of Borrower’s data systems
without change or modification thereto, in electronic form and prepared using
Microsoft Word for Windows or WordPerfect for Windows files (which files may be
prepared using a spreadsheet program and saved as word processing files).  Borrower agrees that Lender may disclose
information regarding the Property and Borrower that is provided to Lender
pursuant to this Section 5.1.11(f) in connection with the Securitization
to such parties requesting such information in connection with such
Securitization.

5.1.12      Business
and Operations.  Borrower will
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.  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.  Borrower shall at all times during the term
of the Loan, continue to own all of the 

 44
 

 

Equipment, Fixtures and Personal Property
which are necessary to operate the Property in the manner required hereunder
and in the manner in which it is currently operated.

5.1.13      Title to the Property. 
Borrower will warrant and defend (a) the title to the Property and
every part thereof, subject only to Liens permitted hereunder (including
Permitted Encumbrances) and (b) the validity and priority of the Lien of
the Mortgage and the Assignment of Leases, subject only to Liens permitted
hereunder (including Permitted Encumbrances), in each case against the claims
of all Persons whomsoever.  Borrower
shall reimburse Lender for any losses, costs, damages or expenses (including
reasonable attorneys’ fees and court costs) incurred by Lender if an interest
in the Property, other than as permitted hereunder, is claimed by another
Person.

5.1.14      Costs of Enforcement. 
In the event (a) that the Mortgage is foreclosed in whole or in
part or that the Mortgage 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 Mortgage in which proceeding Lender is made a party, or
(c) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Borrower or any of its constituent Persons or an
assignment by Borrower or any of its constituent Persons for the benefit of its
creditors, Borrower, its successors or assigns, shall be chargeable with and
agrees to pay all costs of collection and defense, including reasonable
attorneys’ fees and costs, incurred by Lender or Borrower in connection
therewith and in connection with any appellate proceeding or post-judgment
action involved therein, together with all required service or use taxes.

5.1.15      Estoppel Statement.

(a)           After
request by Lender, Borrower shall furnish to Lender within ten (10) days 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 Interest Rate
of the Note, (iv) the date installments of interest and/or principal were last
paid, (v) any known offsets or defenses to the payment of the Debt, if any, and
(vi) that the Note, this Agreement, the Mortgage 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)           Borrower
shall use commercially reasonable efforts to deliver to Lender upon request,
tenant estoppel certificates from each commercial tenant leasing space at the
Property in form and substance reasonably satisfactory to Lender provided that
Borrower shall not be required to deliver such certificates more frequently
than one (1) time in any calendar year.

(c)           Within
thirty (30) days of request by Borrower, Lender shall deliver to Borrower a
statement setting forth the items described at (a)(i), (ii), (iii) and (iv) of
this Section 5.1.15.

5.1.16      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.

5.1.17      Performance
by Borrower.  Borrower shall in a
timely manner observe, perform and fulfill each and every covenant, term and
provision of each Loan Document 

 45
 

 

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.

5.1.18      Confirmation of Representations.  Borrower shall deliver, in connection with
any Securitization, (a) one (1) or more Officer’s Certificates certifying
as to the accuracy (or disclosing any inaccuracies, as applicable) of all
representations made by Borrower in the Loan Documents as of the date of the
closing of such Securitization, and (b) certificates of the relevant
Governmental Authorities in all relevant jurisdictions indicating the good
standing and qualification of Borrower, Principal and Guarantor as of the date
of the Securitization.

5.1.19      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 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.

5.1.20      Leasing
Matters. Any Leases with respect to the Property written after the Closing
Date, for more than the Relevant Leasing Threshold square footage shall be
subject to the prior written approval of Lender, which approval may be given or
withheld in the sole discretion of Lender. 
Lender shall approve or disapprove any such Lease within ten (10)
Business Days of Lender’s receipt of a final execution draft of such Lease
(including all exhibits, schedules, supplements, addenda or other agreements
relating thereto) and a written notice from Borrower requesting Lender’s
approval to such Lease, and such Lease shall be deemed approved, if Lender does
not disapprove such Lease within said ten (10) Business Day period provided
such written notice conspicuously states, in large bold type, that “PURSUANT TO
SECTION 5.1.20 OF THE LOAN AGREEMENT, THE LEASE SHALL BE DEEMED APPROVED
IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN TEN (10) BUSINESS DAYS OF
LENDER’S RECEIPT OF SUCH LEASE AND WRITTEN NOTICE”, provided that in no event
shall Lender’s consent be deemed given with respect to any Lease for 21,000 or
more rentable square feet.  Borrower
shall furnish Lender with executed copies of all Leases.  All renewals of Leases and all proposed
Leases shall provide for rental rates comparable to existing local market rates
(unless such rental rates are otherwise set forth in the Leases executed prior
to the Closing Date).  All proposed
Leases shall be on commercially reasonable terms and shall not contain any
terms which would materially impair Lender’s rights under the Loan
Documents.  All Leases executed after the
Closing Date shall provide that they are subordinate to the Mortgage
encumbering the Property and that the tenant thereunder agrees to attorn to
Lender or any purchaser at a sale by foreclosure or power of sale.  Borrower (i) shall observe and perform
the obligations imposed upon the lessor under the Leases in a commercially
reasonable manner; (ii) shall enforce the terms, covenants and conditions
contained in the Leases upon the part of the tenant thereunder to be observed
or performed in a commercially reasonable manner and in a manner not to impair
the value of the Property involved except that no termination by Borrower or
acceptance of surrender by a tenant of any Lease shall be permitted unless by
reason of a tenant default and then only in a commercially reasonable manner to
preserve and protect the Property; provided, however, that no such termination
or surrender of 

 46
 

 

any Lease covering more than the Relevant
Leasing Threshold will be permitted without the written consent of Lender which
consent may be withheld in the reasonable discretion of Lender; (iii) shall not
collect any of the rents more than one (1) month in advance (other than
security deposits); (iv) shall not execute any other assignment of lessor’s
interest in the Leases or the Rents (except as contemplated by the Loan
Documents); (v) shall not alter, modify or change the terms of the Leases
in a manner inconsistent with the provisions of the Loan Documents without the
prior written consent of Lender, which consent may be withheld in the sole
discretion of Lender; and (vi) shall execute and deliver at the request of
Lender all such further assurances, confirmations and assignments in connection
with the Leases as Lender shall from time to time reasonably require.  Notwithstanding anything to the contrary
contained herein, Borrower shall not enter into a lease of all or substantially
all of the Property without Lender’s prior written consent.  Notwithstanding the foregoing, Borrower may,
without the prior written consent of Lender, terminate any Lease which demises
less than the Relevant Leasing Threshold under any of the following
circumstances: (i) the tenant under said Lease is in default beyond any
applicable grace and cure period, and Borrower has the right to terminate such
Lease; (ii) such termination is permitted by the terms of the Lease in question
and Borrower has secured an obligation from a third party to lease the space
under the Lease to be terminated at a rental equal to or higher than the rental
due under the Lease to be terminated; and (iii) if the tenant under the Lease
to be terminated, has executed a right under said Lease to terminate its lease
upon payment of a termination fee to Borrower, and has in fact terminated its
lease and paid said fee, Borrower may accept said termination.  Lender shall, upon request of Borrower, enter
into a subordination, nondisturbance and attornment agreement (“SNDA”)
with respect to each proposed tenant entering into a Lease in compliance with
the requirements of this Agreement; provided, that such Lease is (i) for
at least 10,000 square feet of space of the Improvements, (ii) with a tenant
reasonably approved by Lender in writing prior to Borrower’s execution of any
such Lease and (iii) on the standard form of Lease previously approved in
writing by Lender.  Any SNDA executed by
Lender shall be in the form attached hereto as Exhibit A and made a part
hereof with such commercially reasonable changes thereto as Lender shall agree
to in its reasonable discretion.

5.1.21      Alterations.
Subject to the rights of tenants to make alterations pursuant to the terms of
their respective leases, Borrower shall obtain Lender’s prior written consent
to any alterations to any Improvements, which consent shall not be unreasonably
withheld or delayed except with respect to alterations that may have a material
adverse effect on Borrower’s financial condition, the value of the Property or
the Net Operating Income. 
Notwithstanding the foregoing, Lender’s consent shall not be required in
connection with any alterations that will not have a material adverse effect on
Borrower’s financial condition, the value of the Property or the Net Operating
Income, provided that such alterations are made in connection with
(a) tenant improvement work performed pursuant to the terms of any Lease
executed on or before the Closing Date, (b) tenant improvement work
performed pursuant to the terms and provisions of a Lease and not adversely
affecting any structural component of any Improvements, any utility or HVAC
system contained in any Improvements or the exterior of any building
constituting a part of any Improvements, (c) alterations performed in
connection with the Restoration of the Property after the occurrence of a
Casualty or Condemnation in accordance with the terms and provisions of this
Agreement or (d) any structural alteration which costs less than $150,000.00 in
the aggregate for all components thereof which constitute such alteration or
any non-structural alteration which costs less than $300,000.00 in the
aggregate for all components thereof which

 47
 

 

constitute such alteration.  If the total unpaid amounts due and payable
with respect to alterations to the Improvements at the Property (other than
such amounts to be paid or reimbursed by tenants under the Leases) shall at any
time equal or exceed $300,000.00 (and such amount is not being paid from any
Reserve Funds) (the “Threshold
Amount”), Borrower, upon Lender’s request, 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:  (A) cash, (B) U.S.
Obligations, (C) other securities having a rating acceptable to Lender and
that the applicable Rating Agencies have confirmed in writing will not, in and
of itself, result in a downgrade, withdrawal or qualification of the then
current ratings assigned to any Securities or any class thereof in connection
with any Securitization or (D) a completion and performance bond or an
irrevocable letter of credit (payable on sight draft only) issued by a
financial institution having a rating by S&P of not less than “A-1+” if the
term of such bond or letter of credit is no longer than three (3) months
or, if such term is in excess of three (3) months, issued by a financial institution
having a rating that is acceptable to Lender and that the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the then current ratings assigned to
any Securities or class thereof in connection with any Securitization.  Such security shall be in an amount equal to
the excess of the total unpaid amounts with respect to alterations to the
Improvements on the Property (other than such amounts to be paid or reimbursed
by tenants under the Leases) over the Threshold Amount and, if cash, U.S.
Obligations or other securities, may be applied from time to time, at the
option of Borrower or, during the continuance of an Event of Default, at the
option of Lender, to pay for such alterations. 
At the option of Lender, following the occurrence and during the
continuance of an Event of Default, Lender may terminate any of the alterations
and use the deposit to restore the Property to the extent necessary to prevent
any material adverse effect on the value of the Property.

5.1.22      Operation of Property.

(a)           Borrower shall cause the Property to be operated,
in all material respects, in accordance with the Property Management Agreement
(or Replacement Management Agreement) as applicable.  In the event that the Property Management
Agreement expires or is terminated (without limiting any obligation of Borrower
to obtain Lender’s consent to any termination or modification of the Property
Management Agreement in accordance with the terms and provisions of this
Agreement), Borrower shall promptly enter into a Replacement Management
Agreement with Manager or another Qualifying Manager, as applicable.

(b)           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
Management Agreement 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 Management Agreement of which it is aware;
and (iii) enforce the performance and observance of all of the covenants and
agreements required to be performed and/or observed by Manager under the
Property Management Agreement, in a commercially reasonable manner.

5.1.23      Supplemental
Mortgage Affidavits. As of the
date hereof, Borrower represents that it has paid or has deposited with the
title company issuing the Title Insurance 

 48
 

 

Policy funds sufficient to pay
all state, county and municipal recording and all other taxes imposed upon the
execution and recordation of the Mortgage. 
If at any time Lender determines, based on applicable law, that Lender
is not being afforded the maximum amount of security available from the
Property as a direct or indirect result of applicable taxes not having been
paid with respect to the Property, Borrower agrees that Borrower will execute,
acknowledge and deliver to Lender, within fifteen (15) days of Lender’s
request, supplemental affidavits increasing the amount of the Debt attributable
to the Property for which all applicable taxes have been paid to an amount
determined by Lender to be equal to the lesser of (a) the greater of the fair
market value of the Property (i) as of the date hereof and (ii) as of the date
such supplemental affidavits are to be delivered to Lender, and (b) the amount
of the Debt attributable to the Property, and Borrower shall, on demand, pay
any additional taxes.

5.1.24      Embargoed Person. 
Borrower covenants and aggress (a) that it has performed and shall
perform reasonable due diligence to ensure that  at all times throughout the term of the Loan,
including after giving effect to any Transfers by Borrower to any Affiliates of
Borrower permitted pursuant to the Loan Documents, (i) none of the funds
or other assets of Borrower constitute property of, or are beneficially owned,
directly or indirectly, by any person, entity or government named on the OFAC
List, subject to trade restrictions under U.S. law, including, but not limited
to, the International Emergency Economic Powers Act, 50 U.S.C.
§§ 1701 et  seq., The Trading with the Enemy Act,
50 U.S.C. App. 1 et  seq., the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, U.S. Public Law 107-56 and any Executive Orders or
regulations promulgated thereunder with the result that the investment in
Borrower, Principal or Guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Loan made by the Lender is in
violation of law (“Embargoed Person”), (ii) no Embargoed Person has any
interest of any nature whatsoever in Borrower with the result that the
investment in Borrower (whether directly or indirectly), is prohibited by law
or the Loan is in violation of law, (iii) none of the funds of Borrower have
been derived from any unlawful activity with the result that the investment in
Borrower (whether directly or indirectly), is prohibited by law or the Loan is
in violation of law, (iv) Borrower, Principal and guarantor are in full
compliance with all applicable orders, rules, regulations and recommendations
of The Office of Foreign Asset Control of the U.S. Department of Treasury (“OFAC”),
and (v) no proceeds of the Loan will be used to fund any operations in, finance
any investments or activities in or make any payments to, Embargoed
Person;  (b)  that in the
event Borrower receives any notice that Borrower, Principal or Guarantor (or
any of their respective beneficial owners, affiliates or participants) become
listed on the OFAC List, Annex or any other list promulgated under the Patriot
Act or is indicted, arraigned, or custodially detained on charges involving
money laundering or predicate crimes to money laundering, Borrower shall
immediately notify Lender.  It shall be
an Event of Default hereunder if Borrower, Guarantor, any Principal or any
Affiliate of Borrower that is a party to any Loan Document becomes listed on
any list promulgated under the Patriot Act or is indicted, arraigned or
custodially detained on charges involving money laundering or predicate crimes
to money laundering.

Section 5.2             Negative
Covenants.  From the Closing Date
until payment and performance in full of all obligations of Borrower under the
Loan Documents or the earlier release of the Lien of the Mortgage in accordance
with the terms of this Agreement and the other 

 49
 

 

Loan Documents, Borrower covenants and agrees
with Lender that it will not do, directly or indirectly, any of the following:

5.2.1        Operation of Property. 
Borrower shall not, without Lender’s prior written consent (which
consent shall not be unreasonably withheld): (i) surrender, terminate or
cancel the Property Management Agreement; provided, that Borrower may, without
Lender’s consent, replace the Manager so long as the replacement manager is a
Qualifying Manager pursuant to a Replacement Management Agreement;
(ii) reduce or consent to the reduction of the term of the Property
Management Agreement; (iii) increase or consent to the increase of the
amount of any charges under the Property Management Agreement; or
(iv) otherwise modify, change, supplement, alter or amend, or waive or
release any of its rights and remedies under, the Property Management Agreement
in any material respect.  Lender agrees
that its consent pursuant to this Section 5.2.1(a) will not be
unreasonably withheld, delayed or conditioned provided that in connection with
any replacement of the Manager the Person chosen by Borrower as the replacement
Manager is a Qualifying Manager, and further agrees that any such written
request for consent that includes evidence that the replacement Manager is a
Qualifying Manager, shall be approved or disapproved within ten (10) Business
Days of Lender’s receipt, provided such written request from Borrower shall conspicuously
state, in large bold type, that “PURSUANT
TO SECTION 5.2.1 OF THE LOAN AGREEMENT, A RESPONSE IS REQUIRED WITHIN TEN (10)
BUSINESS DAYS OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”.  If Lender fails to disapprove any such matter
within such period, Borrower shall provide a second written notice requesting
approval, which written notice shall conspicuously state, in large bold type,
that “PURSUANT TO SECTION 5.2.1 OF THE
LOAN AGREEMENT, THE MATTER DESCRIBED HEREIN SHALL BE DEEMED APPROVED IF LENDER
DOES NOT RESPOND TO THE CONTRARY WITHIN FIVE (5) BUSINESS DAYS OF LENDER’S
RECEIPT OF THIS WRITTEN NOTICE”.  Thereafter, if Lender does not disapprove
such matter within said five (5) Business Day period such matter shall be
deemed approved.

5.2.2        Liens.  Borrower
shall not, without the prior written consent of Lender, create, incur, assume
or suffer to exist any Lien on any portion of the Property or permit any such
action to be taken, except:

(i)          Permitted
Encumbrances;

(ii)         Liens
created by or permitted pursuant to the Loan Documents; and

(iii)        Liens
for Taxes or Other Charges not yet delinquent (or that Borrower is contesting
in accordance with the terms of Section 5.1.2 hereof).

5.2.3        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 permitted by the Loan Documents,
(d) modify, amend, waive or terminate its organizational documents or its
qualification and good standing in any jurisdiction in which it is organized or
the Property is located or (e) cause the 

 50
 

 

Principal to (i) dissolve, wind up or
liquidate or take any action, or omit to take an action, as a result of which
the Principal would be dissolved, wound up or liquidated in whole or in part,
or (ii) amend, modify, waive or terminate the certificate of formation or
operating agreement of the Principal, in each case, without obtaining the prior
written consent of Lender or Lender’s designee.

5.2.4        Change in Business. 
Borrower shall not enter into any line of business other than the
ownership and operation of the Property, or make any material change in the
scope or nature of its business objectives, purposes or operations, or
undertake or participate in activities other than the continuance of its
present business.  Nothing contained in
this Section 5.2.4 is intended
to expand the rights of Borrower contained in Section 5.2.10(d)
hereof.

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

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

5.2.7        Intentionally Omitted.

5.2.8        Intentionally Omitted.

5.2.9        ERISA.

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

(b)           During
the term of the Loan or any obligation or right hereunder, Borrower  shall not be a Plan and none of the assets of
Borrower shall constitute of a Plan within the meaning of Section 29C.F.R.
§2510.3-101, as modified by Section 3(42) of ERISA.  Borrower further covenants and agrees to
deliver to Lender such certifications or other evidence from time to time
throughout the term of the Loan, as requested by Lender in its sole discretion,
that (i) Borrower is not a Plan, or a “governmental plan” within the meaning of
Section 3(32) of ERISA; (ii) Borrower is not subject to any state statute
regulating investments of, or fiduciary obligations with respect to,
governmental plans; 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);

 51

 

(ii)                           None of the assets of the
Borrower are, with the application of 29 C.F.R. §2510.3 101, as modified by
Section 3(42) of ERISA, regarded as assets of any Plan; 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).

(c)                                  “Plan” shall mean an
employee benefit plan (as defined in Section 3(3) of ERISA) subject to Title I
of ERISA or a plan or another arrangement (within the meaning of Section 4975
of the Internal Revenue Code of 1986, as amended, and the related Treasury
Department regulations, including temporary regulations), subject to Section
4975 of the Code.

5.2.10                  Transfers.

(a)                                  Borrower acknowledges
that Lender has examined and relied on the experience of Borrower and its
stockholders, general partners, members, principals and (if Borrower is a
trust) beneficial owners 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 and the performance of the Other
Obligations.  Borrower acknowledges that
Lender has a valid interest in maintaining the value of the Property so as to
ensure that, should Borrower default in the repayment of the Debt or the
performance of the Other Obligations, Lender can recover the Debt by a sale of
the Property.

(b)                                 Without the prior
written consent of Lender, and except to the extent otherwise set forth in this
Section 5.2.10, Borrower shall
not, and shall not permit any Restricted Party do any of the following
(collectively, a “Transfer”):
(i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign,
grant options with respect to, or otherwise transfer or dispose of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) the Property or any part thereof
or any legal or beneficial interest therein or (ii) permit a Sale or
Pledge of an interest in any Restricted Party, other than pursuant to Leases of
space in the Improvements to tenants in accordance with the provisions of Section 5.1.20.

(c)                                  A Transfer shall
include, but not be limited to, (i) an installment sales agreement wherein
Borrower agrees to sell the Property or any part thereof for a price to be paid
in installments; (ii) an agreement by Borrower leasing all or a
substantial part of the Property for other than actual occupancy by a space
tenant thereunder or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s right, title and interest in and to any Leases
or any Rents; (iii) 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; (iv) 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; (v) if a Restricted Party is a limited liability company, any
merger or consolidation or the change,

 52
 

 

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; (vi) if a Restricted Party is a trust
or nominee trust, any merger, consolidation or the Sale or Pledge of the legal
or beneficial interest in a Restricted Party or the creation or issuance of new
legal or beneficial interests; or (vii) the removal or the resignation of
the managing agent (including, without limitation, an Affiliated Manager) other
than in accordance with Section 5.1.22
hereof.

(d)                                 Notwithstanding the
provisions of this Section 5.2.10,
Lender’s consent shall not be required in connection with (i) one or a series
of Transfers, of up to forty-nine percent (49%) of the stock in a Restricted
Party, the limited partnership interests or non-managing membership interests
(as the case may be) in a Restricted Party (ii) any transfer to Behringer
Harvard Funds or an Affiliate of Behringer Harvard Funds (iii) any
transfer of an equity interest in Behringer Harvard Funds or any Affiliate
thereof or the issuance of additional equity interests in Behringer Holdings or
any Affiliate thereof or (iv) any transfer of a direct or indirect equity
interest in Borrower to a newly formed entity formed to be the Mezzanine
Borrower pursuant to Section 5.2.10(h) below; provided, however, no such
Transfer shall result in the change of Control in Borrower, Guarantor or
Manager.  If after giving effect to any
such Transfer, more than forty-nine percent (49%) in the aggregate of direct or
indirect interests in a Restricted Party are owned by any Person and its Affiliates
that owned less than forty-nine percent (49%) direct or indirect interest in
such Restricted Party as of the Closing Date, Borrower shall, no less than
thirty (30) days prior to the effective date of any such Transfer, deliver to
Lender an Additional Insolvency Opinion acceptable to Lender and the Rating
Agencies.  In addition, as a condition to
any Transfer pursuant to this Section 5.2.10(d), at all times, Guarantor
must continue to Control Borrower and own, directly or indirectly, at least a
51% legal and beneficial interest in Borrower.

(e)                                  No consent to any
assumption of the Loan shall occur on or before the first (1st) anniversary of the first (1st) Payment Date. Thereafter,
Lender’s consent to Transfers of the Property shall not be unreasonably
withheld provided that Lender receives sixty (60) days prior written notice of
such Transfer and no Event of Default has occurred and is continuing, and
further provided that the following additional requirements are satisfied:

(i)                              Borrower shall pay Lender
a transfer fee equal to one-quarter of one percent (0.25%) of the outstanding
principal balance of the Loan at the time of the first such transfer and a
transfer fee equal to one-half of one percent (0.5%) of the outstanding
principal balance of the Loan at the time of each subsequent transfer (provided
that no transfer fee shall be payable in connection with any transfer to
Behringer Harvard Funds or an Affiliate of Behringer Harvard Funds);

(ii)                           Borrower shall pay any and
all reasonable out-of-pocket costs incurred in connection with such Transfer
(including, without limitation, Lender’s counsel fees and disbursements and all
recording fees, title insurance premiums and mortgage and intangible taxes and
the fees and expenses of the Rating Agencies pursuant to clause (x) below);

 53
 

 

(iii)                        The proposed transferee (the “Transferee”)
or Transferee’s Principals must have demonstrated expertise in owning and
operating properties similar in location, size, class and operation to the
Property, which expertise shall be reasonably determined by Lender;

(iv)                       Transferee and Transferee’s
Principals shall, as of the date of such transfer, have an aggregate net worth
and liquidity reasonably acceptable to Lender;

(v)                          Transferee, Transferee’s
Principals and all other entities which may be owned or Controlled directly or
indirectly by Transferee’s Principals (“Related Entities”) must not
have been party to any bankruptcy proceedings, voluntary or involuntary, made
an assignment for the benefit of creditors or taken advantage of any insolvency
act, or any act for the benefit of debtors within seven (7) years prior to
the date of the proposed Transfer;

(vi)                       Transferee shall assume all of
the obligations of Borrower under the Loan Documents in a manner satisfactory
to Lender in all respects, including, without limitation, by entering into an
assumption agreement in form and substance satisfactory to Lender;

(vii)                    There shall be no material
litigation or regulatory action pending or threatened against Transferee,
Transferee’s Principals or Related Entities which is not reasonably acceptable
to Lender;

(viii)                 Transferee, Transferee’s Principals
and Related Entities shall not have defaulted under its or their obligations
with respect to any other Indebtedness in a manner which is not reasonably
acceptable to Lender;

(ix)                         Transferee and Transferee’s
Principals must be able to satisfy all the representations and covenants set
forth in Sections 4.1.30 and 5.2.9 of this Agreement, no Default or
Event of Default shall otherwise occur as a result of such Transfer, and
Transferee and Transferee’s Principals shall deliver (A) all
organizational documentation reasonably requested by Lender, which shall be
reasonably satisfactory to Lender and (B) all certificates, agreements and
covenants reasonably required by Lender;

(x)                            Transferee shall be
approved by the Rating Agencies selected by Lender, which approval, if required
by Lender, shall take the form of a confirmation in writing from such Rating
Agencies to the effect that such Transfer will not result in a requalification,
reduction, downgrade or withdrawal of the ratings in effect immediately prior
to such assumption or transfer for the Securities or any class thereof issued
in connection with a Securitization which are then outstanding;

(xi)                         Borrower or Transferee, at its
sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion
reflecting such Transfer satisfactory in form and substance to Lender;

 54
 

 

(xii)                      Prior to any release of
Guarantor, one (1) or more substitute guarantors reasonably acceptable to
Lender shall have assumed all of the liabilities and obligations of Guarantor
under the Guaranty and Environmental Indemnity executed by Guarantor or execute
a replacement guaranty, environmental indemnity reasonably satisfactory to
Lender;

(xiii)                   Borrower or Transferee shall
deliver, at its sole cost and expense, an endorsement to the Title Insurance
Policy, as modified by the assumption agreement, as a valid first lien on the
Property and naming the Transferee as owner of the Property, which endorsement
shall insure that, as of the date of the recording of the assumption agreement,
the Property shall not be subject to any additional exceptions or liens other
than those contained in the Title Policy issued on the date hereof and other
Permitted Encumbrances; and

(xiv)                  The Property shall be managed by a
Qualifying Manager pursuant to a Replacement Management Agreement.

Immediately upon a Transfer to such Transferee and the satisfaction of
all of the above requirements, the named Borrower and Guarantor herein shall be
released from all liability under this Agreement, the Note, the Mortgage and
the other Loan Documents accruing after such Transfer.  The foregoing release shall be effective upon
the date of such Transfer, but Lender agrees to provide written evidence
thereof reasonably requested by Borrower.

(f)                                    Borrower,
without the consent of Lender, may grant easements, restrictions, covenants,
reservations and rights of way in the ordinary course of business for water and
sewer lines, telephone and telegraph lines, electric lines and other utilities
or for other similar purposes, provided that no transfer, conveyance or
encumbrance shall materially impair the utility and operation of the Property
or materially adversely affect the value of the Property or the Net Operating
Income of the Property.  If Borrower
shall receive any consideration in connection with any of said described
transfers or conveyances, Borrower shall have the right to use any such
proceeds in connection with any alterations performed in connection therewith,
or required thereby.  In connection with
any transfer, conveyance or encumbrance permitted above, the Lender shall
execute and deliver any instrument reasonably necessary or appropriate to
evidence its consent to said action or to subordinate the Lien of the related
Mortgage to such easements, restrictions, covenants, reservations and rights of
way or other similar grants upon receipt by the Lender of: (A) a copy of the
instrument of transfer; and (B) an Officer’s Certificate stating with respect
to any transfer described above, that such transfer does not materially impair
the utility and operation of the Property or materially reduce the value of the
Property or the Net Operating Income of the Property.

(g)                                 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 Borrower’s Transfer without Lender’s consent.  This provision shall apply to every Transfer
regardless of whether voluntary or not, or whether or not Lender has consented
to any previous Transfer.

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(h)                                 Notwithstanding the
provisions of this Section 5.2.10,
Lender’s consent shall not be required in connection with Transfers in the
nature of a pledge by a Mezzanine Borrower (as defined below) of its direct
and/or indirect equity interest in Borrower (but not of any direct interest in
the Property) to a Permitted Mezzanine Lender (defined below) as security for a
loan to such Mezzanine Borrower (a “Mezzanine Loan”) provided that the
following terms and conditions are satisfied:

(i)                              no Event of Default shall
then exist;

(ii)                           Lender shall have received
at least thirty (30) and no more than sixty (60) days’ prior written notice of the
proposed Mezzanine Loan;

(iii)                        the aggregate amount of the
Loan and the Mezzanine Loan (as of the effective date of the Mezzanine Loan)
shall not exceed eighty-five percent (85%) of the fair market value of the
Property as determined by an independent MAI appraisal dated not more than
ninety (90) days prior to the effective date of the Mezzanine Loan and
otherwise acceptable to Lender;

(iv)                       the aggregate Debt Service
Coverage Ratio of the Loan and such Mezzanine Loan is at least 1.20 to 1.0;

(v)                          Borrower shall not be
obligated to repay the Mezzanine Loan nor incur any obligation or liability to
the Permitted Mezzanine Lender or any other Person with respect to the
Mezzanine Loan, and the terms and conditions of the Mezzanine Loan, the
collateral pledged as security therefor, and the documents evidencing the
Mezzanine Loan, shall be satisfactory to Lender;

(vi)                       a new Single Purpose Entity
shall have been formed that will directly or indirectly own 100% of the Equity
Interests in Borrower and Principal (the “Mezzanine Borrower”), the
organizational documents of Borrower, such Mezzanine Borrower, and their
respective constituent owners shall be satisfactory to Lender, and Borrower and
such Mezzanine Borrower shall otherwise satisfy all applicable Rating Agency
criteria for single-purpose entities, bankruptcy remoteness, and mezzanine
borrowers;

(vii)                    the Permitted Mezzanine Lender
shall have executed and delivered to Lender an intercreditor agreement
acceptable to Lender in its sole and absolute discretion, provided that Lender’s
approval of such intercreditor agreement shall not be unreasonably withheld,
conditioned or delayed so long as it is substantially similar to the form of
intercreditor agreement attached as Appendix VI to the Standard & Poor’s
U.S. CMBS Legal and Structural Finance Criteria published May 1, 2003 or any
other form subsequently approved by Standard & Poor’s in writing;

(viii)                 Borrower, Principal and Guarantor
shall have executed such additional Loan Documents and such amendments to and
reaffirmations of the existing Loan Documents as Lender may require, including
entering into a cash management arrangement with Lender (or modifying any
existing cash

 56
 

 

management requirement) to provide for, among other things, the payment
of Lender-approved operating expenses and capital expenses prior to the payment
of debt service on the Mezzanine Loan;

(ix)                         the lender under the Mezzanine
Loan shall be either (A) any person or entity satisfying the definition of “Qualified
Transferee” under clause (ii) of the definition of “Qualified Transferee” set
forth in the form Intercreditor Agreement attached as Appendix VI to the
Standard & Poor’s U.S. CMBS Legal and Structural Finance Criteria published
May 1, 2003, based on the default values for minimum total assets and
capital/statutory surplus or shareholders’ equity included in the definition of
“Eligibility Requirements” in such publication or (B) a third-party
institutional lender, that in any such case is acceptable to Lender (either of
the foregoing, a “Permitted Mezzanine Lender”), provided that in no
event shall the lender under the Mezzanine Loan be an Affiliate of Borrower;
and

(x)                            Borrower shall have paid or
reimbursed Lender for all of its costs and expenses (including reasonable
attorneys’ fees and disbursements) incurred in connection with the foregoing.

VI.                                 INSURANCE;
CASUALTY; CONDEMNATION

Section 6.1                                      Insurance.

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

(i)                              comprehensive all risk
insurance (“Special Form”) including, but not limited to, loss caused by
any type of windstorm or hail on the Improvements and the Personal Property,
(A) in an amount equal to one hundred percent (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) with a waiver of depreciation; (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 One
Hundred Thousand and No/100 Dollars ($100,000) for all such insurance coverage
excluding windstorm and earthquake and (D) 
containing an “Ordinance or Law Coverage” or “Enforcement” endorsement
if any of the Improvements or the use of the Property shall at any time
constitute legal non-conforming structures or uses.  In addition, Borrower shall obtain:  (y) if any portion of the Improvements is
currently or at any time in the future located in a “special flood hazard area,”
as designated by the Federal Emergency Management Agency or such other
applicable federal agency, flood hazard insurance in an amount equal to the
maximum amount available under the national flood insurance program and in
addition to the maximum available under the national flood program, any excess
limits as determined by Lender in its sole and absolute discretion; and (z)
earthquake insurance in amounts and in form and substance satisfactory to
Lender in the event the Property is located in an area with a high

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degree of seismic activity, with a probable maximum loss exceeding
twenty percent (20%), provided that the insurance pursuant to clauses (y) and (z)
hereof shall be on terms consistent with the comprehensive all risk insurance
policy required under this subsection (i).

(ii)                           business income insurance
(A) with loss payable to Lender; (B) covering all risks required to be covered
by the insurance provided for in subsection (i) above; (C) in an amount
equal to one hundred percent (100%) of the projected gross revenues from the
operation of the Property (as reduced to reflect expenses not incurred during a
period of Restoration) for a period of at least eighteen (18) months after the
date of the Casualty; and (D) containing an extended period of indemnity
endorsement which provides that after the physical loss to the Improvements and
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 eighteen (18) 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.  The amount of such business
income insurance shall be determined prior to the Closing Date and at least
once each year thereafter based on Borrower’s reasonable estimate of the gross
income from the Property for the succeeding eighteen (18) month period.  All proceeds payable to Lender pursuant to
this subsection shall be held by Lender and shall be applied to the obligations
secured by the Loan Documents from time to time due and payable hereunder and
under the Note; provided, however, that nothing herein contained
shall be deemed to relieve Borrower of its obligations to pay the obligations
secured by the Loan Documents on the respective dates of payment provided for
in this Agreement and the other Loan Documents except to the extent such
amounts are actually paid out of the proceeds of such business income
insurance;

(iii)                        at all times during which
structural construction, repairs or alterations are being made with respect to
the Improvements, and only if the Property coverage form does not otherwise
apply, (A) owner’s contingent or protective liability insurance, otherwise
known as Owner Contractor’s Protective Liability, covering claims not covered
by or under the terms or provisions of the above mentioned commercial general
liability insurance policy; and (B) the insurance provided for in subsection
(i) above 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 subsection
(i) above, (3) including permission to occupy the Property, and (4) with an
agreed amount endorsement waiving co-insurance provisions;

(iv)                       comprehensive boiler and
machinery insurance, if applicable, in amounts as shall be reasonably required
by Lender on terms consistent with the commercial property insurance policy
required under subsection (i) above;

(v)                          commercial general liability
insurance against claims for personal injury, bodily injury, death or property
damage occurring upon, in or about the

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Property, such insurance (A) to be on the so-called “occurrence” form
with a combined limit of not less than Two Million and 00/100 Dollars
($2,000,000.00) in the aggregate and One Million and 00/100 Dollars
($1,000,000.00) per occurrence; (B) to continue at not less than the aforesaid
limit until required to be changed by Lender in writing by reason of changed
economic conditions making such protection inadequate and (C) to cover at least
the following hazards:  (1) premises and
operations; (2) products and completed operations on an “if any” basis; (3)
independent contractors; (4) blanket contractual liability for all written
contracts and (5) contractual liability covering the indemnities contained in
Article 9 of the Mortgage to the extent the same is available;

(vi)                       automobile liability coverage
for all owned and non-owned vehicles, including rented and leased vehicles
containing minimum limits per occurrence of One Million Dollars and 00/100
Dollars ($1,000,000.00);

(vii)                    worker’s compensation and employee’s
liability subject to the worker’s compensation laws of the applicable state;

(viii)                 umbrella and excess liability
insurance in an amount not less than Fifty Million and 00/100 Dollars
($50,000,000.00) per occurrence on terms consistent with the commercial general
liability insurance policy required under subsection (v) above,
including, but not limited to, supplemental coverage for employer liability and
automobile liability, which umbrella liability coverage shall apply in excess
of the automobile liability coverage in clause (vi) above;

(ix)                         the insurance required under Section
6.1(a)(i) and (ii) above shall cover perils of terrorism and acts of
terrorism and Borrower shall maintain insurance for loss resulting from perils
and acts of terrorism on terms (including amounts) consistent with those
required under Section 6.1(a)(i) and (ii) above at all times
during the term of the Loan; provided, however, Borrower shall not be required
to pay annual premiums in excess of the Required Amount for the coverage
required under this Section 6.1.1(a)(ix).  If full coverage for acts of terrorism
satisfying such requirements is not available for an amount equal to or less
than the Required Amount (but coverage for acts of terrorism not fully
satisfying such requirements is available), Borrower shall be required to spend
an amount equal to the Required Amount for coverage for acts of terrorism, and
the scope, form, deductible and carrier with respect to such coverage shall be
acceptable to Lender in its sole discretion; and

(x)                            upon sixty (60) days
written notice, such other reasonable insurance and in such reasonable amounts
as Lender from time to time may reasonably request against such other insurable
hazards which at the time are commonly insured against for property similar to
the Property located in or around the region in which the Property is located.

(b)                                 All insurance provided
for in Section 6.1(a) shall be obtained under valid and enforceable
policies (collectively, the “Policies” or in the singular, the “Policy”),
and shall

 59
 

 

be subject to the approval of Lender as to insurance companies,
amounts, deductibles, loss payees and insureds. 
The Policies shall be issued by financially sound and responsible
insurance companies authorized to do business in the State and having a claims
paying ability rating of “A” or better (and the equivalent thereof) by at least
two (2) of the Rating Agencies rating the Securities (one (1) of which shall be
S&P if they are rating the Securities and one (1) of which will be Moody’s
if they are rating the Securities), or if only one (1) Rating Agency is rating
the Securities, then only by such Rating Agency.  The Policies described in Section 6.1
(other than those strictly limited to liability protection) shall designate Lender
as loss payee.  Not less than thirty (30)
days prior to the expiration dates of the Policies theretofore furnished to
Lender, certificates of insurance evidencing the Policies accompanied by
evidence satisfactory to Lender of payment of the premiums due thereunder (the “Insurance
Premiums”), shall be delivered by Borrower to Lender.

(c)                                  Any blanket insurance
Policy shall specifically allocate to the Property the amount of coverage from
time to time required hereunder and shall otherwise provide the same protection
as would a separate Policy insuring only the Property in compliance with the
provisions of Section 6.1(a).

(d)                                 All Policies of
insurance provided for or contemplated by Section 6.1(a), except for the
Policy referenced in Section 6.1(a)(vii) of this Agreement, shall name
Borrower, or the Tenant, as the insured and Lender as the additional insured,
as its interests may appear, and in the case of property damage, boiler and
machinery, flood and earthquake insurance, shall contain a so-called New York
standard non-contributing mortgagee clause in favor of Lender providing that
the loss thereunder shall be payable to Lender.

(e)                                  All Policies of
insurance provided for in Section 6.1(a) shall contain clauses or
endorsements to the effect that:

(i)                              no act or negligence of
Borrower, or anyone acting for Borrower, or of any Tenant 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;

(ii)                           the Policy shall not be
materially changed (other than to increase the coverage provided thereby) or
canceled without at least thirty (30) days written notice to Lender and any
other party named therein as an additional insured;

(iii)                        the issuers thereof shall give
written notice to Lender if the Policy has not been renewed fifteen (15) days
prior to its expiration; and

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

(f)                                    If at any time
Lender is not in receipt of written evidence that all insurance required
hereunder is in full force and effect, Lender shall have the right, without
notice to Borrower, to take such action as Lender deems necessary to protect
its interest in the Property, including, without limitation, the obtaining of
such insurance coverage as Lender in its

 60
 

 

reasonable discretion deems appropriate after three (3) Business Days
notice to Borrower if prior to the date upon which any such coverage will lapse
or at any time Lender deems necessary (regardless of prior notice to Borrower)
to avoid the lapse of any such coverage. 
All premiums 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 Mortgage and shall
bear interest at the Default Rate.  If
Borrower fails in so insuring the Property or in so assigning and delivering
the Policy, Lender may, at its option, obtain such insurance using such
carriers and agencies as Lender shall elect from year to year and pay the
premiums therefor, and Borrower will reimburse Lender for any premium so paid,
with interest thereon as stated in the Note from the time of payment, on
demand, and the amount so owing to Lender shall be secured by the
Mortgage.  The insurance obtained by
Lender may, but need not, protect Borrower’s interest and the coverage that
Lender purchases may not pay any claim that Borrower makes or any claim that is
made against Borrower in connection with the Property.

Section 6.2                                      Casualty.  If the Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a “Casualty”),
Borrower (a) shall give to Lender prompt notice of such damage reasonably
estimated by Borrower to cost more than Two Hundred Thousand Dollars
($200,000.00) to repair, and (b) shall promptly commence and diligently
prosecute the completion of the Restoration of the Property pursuant to Section
6.4 hereof as nearly as possible to the condition the Property was in
immediately prior to such Casualty, with such alterations as may be reasonably
approved by Lender and otherwise in accordance with Section 6.4
hereof.  Borrower shall pay, or cause to
be paid, 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.  In addition, Lender may participate in any
settlement discussions with any insurance companies (and shall approve the
final settlement, which approval shall not be unreasonably withheld or delayed)
with respect to any Casualty in which the Net Proceeds or the costs of
completing the Restoration are equal to or greater than Two Hundred Thousand
and 00/100 Dollars ($200,000.00) and Borrower shall deliver to Lender all
instruments required by Lender to permit such participation.

Section 6.3                                      Condemnation.  Borrower shall promptly give Lender notice of
the actual or threatened commencement of any proceeding for the Condemnation of
the Property upon obtaining information of such proceeding and shall deliver to
Lender copies of any and all papers served in connection with such proceedings.  Lender may participate in any such
proceedings if an Event of Default exists or if the amount of the Award exceeds
One Million Five Hundred Thousand Dollars and 00/100 ($1,500,000.00), and
Borrower shall from time to time deliver to Lender all instruments requested by
it to permit such participation. 
Borrower shall, at its expense, diligently prosecute any such
proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings.  Notwithstanding any taking by any public or
quasi-public authority through Condemnation or otherwise (including, but not
limited to, any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Agreement and the Debt
shall not be reduced until any Award shall have been actually received and
applied by Lender, after the deduction of expenses of collection, to the
reduction or discharge of the Debt. 
Lender shall not be limited to the interest paid on the Award by the
condemning authority but shall be entitled to receive out of the Award interest
at the rate or rates provided herein or in the Note.  If the

 61
 

 

Property or any portion thereof is taken by a
condemning authority, Borrower shall promptly commence and diligently prosecute
the Restoration of the Property or any portion thereof pursuant to Section 6.4 hereof and otherwise
comply with the provisions of Section 6.4
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 6.4                                      Restoration.  The following provisions shall apply in
connection with the Restoration of the Property:

(a)                                  If the Net Proceeds
shall be less than the Relevant Restoration Threshold and the costs of completing
the Restoration shall be less than the Relevant Restoration Threshold, the Net
Proceeds will be disbursed by Lender to Borrower upon receipt, provided that
all of the conditions set forth in Section 6.4(b)(i)
below are met and Borrower delivers to Lender a written undertaking to
expeditiously commence and to satisfactorily complete with due diligence the
Restoration in accordance with the terms of this Agreement.

(b)                                 If the Net Proceeds
are equal to or greater than the Relevant Restoration Threshold or the costs of
completing the Restoration is equal to or greater than the Relevant Restoration
Threshold, then in either case Lender shall make the Net Proceeds available for
the Restoration in accordance with the provisions of this Section 6.4(b).  The term “Net Proceeds” for purposes of
this Section 6.4 shall
mean:  (x) the net amount of all
insurance proceeds received by Lender pursuant to Section 6.1
(a)(i), (iv), (ix) and (x) as a result of such damage or
destruction, after deduction of its reasonable costs and expenses (including,
but not limited to, reasonable counsel fees), if any, in collecting same (“Insurance Proceeds”),
or (y) the net amount of the Award, after deduction of its reasonable
costs and expenses (including, but not limited to, reasonable counsel fees), if
any, in collecting same (“Condemnation
Proceeds”), whichever the case may be.

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

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

(B)                                (1) in
the event the Net Proceeds are Insurance Proceeds, less than twenty-five
percent (25%) of the total floor area of the Improvements on the Property has
been damaged, destroyed or rendered unusable as a result of such Casualty or
(2) in the event the Net Proceeds are Condemnation Proceeds, less than ten
percent (10%) of the land constituting 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)                                The
Lender is reasonably satisfied that the Debt Service Coverage Ratio, after
substantial completion of the repair, restoration or rebuilding of the Property
will be at least equal to the lesser of (i) 1.3:1.0

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and (ii) the
Debt Service Coverage Ratio for the reporting period immediately prior to the
date of the relevant Casualty or Condemnation;

(D)                               Borrower
shall commence the Restoration as soon as reasonably practicable (but in no
event later than one hundred twenty (120) days after such Casualty or
Condemnation or obtaining building permits, whichever the case may be, occurs)
and shall diligently pursue the same to satisfactory completion;

(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 6.1(a)(ii) hereof, if
applicable, or (3) by other funds of Borrower;

(F)                                 Lender
shall be satisfied that the Restoration will be completed on or before the
earliest to occur of (1) six (6) months prior to the Maturity Date,
(2) the earliest date required for such completion under the terms of any
Leases, (3) such time as may be required under all applicable Legal
Requirements in order to repair and restore the Property to the condition it
was in immediately prior to such Casualty or to as nearly as possible the
condition it was in immediately prior to such Condemnation, as applicable, or
(4) the expiration of the insurance coverage referred to in Section 6.1(a)(ii) hereof;

(G)                                the
Property and the use thereof after the Restoration will be in compliance with
and permitted under all applicable Legal Requirements;

(H)                               the
Restoration shall be done and completed by Borrower in an expeditious and
diligent fashion and in compliance with all applicable Legal Requirements;

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

(J)                                   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 approved by Lender, which
approval shall not be unreasonably withheld; and

(K)                               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.

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(ii)                           The Net Proceeds shall be
held by Lender in an interest-bearing account and, until disbursed in
accordance with the provisions of this Section 6.4(b),
shall constitute additional security for the Debt and Other Obligations under
the Loan Documents.  The Net Proceeds
shall be disbursed by Lender to, or as directed by, Borrower from time to time
during the course of the Restoration, upon receipt of evidence satisfactory to
Lender that (A) all materials installed and work and labor performed
(except to the extent that they are to be paid for out of the requested
disbursement) in connection with the Restoration have been paid for in full or
will be paid in full upon such disbursement, and (B) there exist no
notices of pendency, stop orders, mechanic’s or materialman’s liens or notices
of intention to file same, or any other liens or encumbrances of any nature
whatsoever on the 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, the cost of which exceeds the
Relevant Restoration Threshold, 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”),
such review and acceptance not to be unreasonably withheld or delayed.  Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in
connection with the Restoration.  The
identity of the contractors, subcontractors and materialmen engaged in the
Restoration, 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, such review and acceptance not to be unreasonably withheld or
delayed.  All costs and expenses incurred
by Lender in connection with making the Net Proceeds available for the
Restoration including, without limitation, reasonable counsel fees and
disbursements and the Casualty Consultant’s fees, shall be paid by Borrower.

(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 6.4(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 6.4(b)
and that all approvals necessary for the re-occupancy and use of the Property
have been obtained from all appropriate governmental and quasi-governmental
authorities, and Lender receives evidence satisfactory to

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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 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 reasonably requested by Lender or by the title company issuing the Title
Insurance Policy, and Lender receives an endorsement to the Title Insurance
Policy insuring the continued priority of the lien of the Mortgage 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, 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 6.4(b) shall constitute
additional security for the Debt and Other Obligations under the Loan
Documents.

(vii)                    The excess, if any, of the Net
Proceeds (and the remaining balance, if any, of the Net Proceeds Deficiency)
deposited with Lender after the Casualty Consultant certifies to Lender that
the Restoration has been completed in accordance with the provisions of this Section 6.4(b), and the receipt by
Lender of evidence satisfactory to Lender that all costs incurred in connection
with the Restoration have been paid in full, shall be remitted by Lender to
Borrower, provided no Event of Default shall have occurred and shall be
continuing.

(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 6.4(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 (provided no Event of Default exists, Borrower
shall not be required to pay any prepayment

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consideration in connection with such payment), 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 designate, in its discretion.

(d)                                 In the event of
foreclosure of the Mortgage, 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
concerning the Property 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.

(e)                                  Lender shall with
reasonable promptness following any Casualty or Condemnation notify Borrower
whether or not Net Proceeds are required to be made available to Borrower for
restoration pursuant to this Section 6.4.  All Net Proceeds not required to be made available
for Restoration shall be retained and applied by Lender in accordance with Section 2.4.2
hereof (a “Net Proceeds Prepayment”). 
If such Net Proceeds Prepayment shall be equal to or greater than Five
Million and 00/100 Dollars ($5,000,000.00), Borrower shall have the right to
elect to prepay the outstanding principal balance of the Loan (less the Net
Proceeds Prepayment) for the Property (a “Casualty/Condemnation Prepayment”)
without payment of the Yield Maintenance Premium upon satisfaction of the following
conditions:  (i) within thirty (30) days
following the date of the Net Proceeds Prepayment, Borrower shall provide
Lender with written notice of Borrower’s intention to pay the Note in full
(with a credit for the amount of the Net Proceeds Prepayment), (ii) Borrower
shall prepay the Note in such amount on or before the third (3rd) Payment Date occurring following the
date of the Net Proceeds Prepayment (provided that if any such prepayment is
made on a date other than a Payment Date, Borrower shall pay Lender all
interest which would have accrued on the amount being prepaid through the next
Payment Date), and (iii) no Event of Default shall exist on the date of such
Casualty/Condemnation Prepayment. 
Notwithstanding anything in Section 6.2 or Section 6.3 to
the contrary, Borrower shall have no obligation to commence Restoration of the
Property upon delivery of the written notice set forth in clause (i) of the
preceding sentence (unless Borrower subsequently shall fail to satisfy the
requirement of clause (ii) of the preceding sentence).

VII.                             RESERVE
FUNDS

Section 7.1                                      Required
Repairs.  Borrower shall perform the
repairs at the Property, as more particularly set forth on Schedule III hereto (such repairs
hereinafter referred to as “Required
Repairs”). 
Borrower shall complete the Required Repairs on or before the required
deadline for each repair as set forth on Schedule
III.  It shall be an Event of
Default under this Agreement if Borrower does not complete the Required Repairs
at the Property by the required deadline for each repair as set forth on Schedule III; provided, however, that
Lender in its sole and absolute discretion may agree to extend the time to
complete the Required Repairs if Borrower, despite its good faith efforts, has
failed to complete the Required Repairs within such period.

7.1.1                        Release
of Required Repair Funds.  Lender
shall disburse to Borrower any funds deposited pursuant to Section 7.1 (the “Required
Repair Funds”) from time to time, but not more frequently than once in any
thirty (30) day period, upon satisfaction by Borrower of each of the following
conditions:  (a) Borrower shall
submit a written request for payment to Lender at

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least fifteen (15) days prior to the date on
which Borrower requests such payment be made and specifies the Required Repairs
to be paid, (b) on the date such request is received by Lender and on the
date such payment is to be made, no Event of Default shall exist and remain
uncured, (c) Lender shall have received an Officer’s Certificate
(i) stating that all Required Repairs (or in the case of progress
payments, the portion thereof) to be funded by the requested disbursement have
been completed in good and workmanlike manner and in accordance with all
applicable federal, state and local laws, rules and regulations, such Officer’s
Certificate to be accompanied by a copy of any license, permit or other
approval by any Governmental Authority required to commence and/or complete the
Required Repairs, (ii) identifying each Person that supplied materials or
labor in connection with the Required Repairs to be funded by the requested
disbursement, and (iii) stating that each such Person has been paid in
full or will be paid in full upon application of such disbursement, such
Officer’s Certificate to be accompanied by lien waivers (which may be
conditioned on payment) or other evidence of payment reasonably satisfactory to
Lender, (d) at Lender’s option, a title search indicating that the
Property is free from all liens, claims and other encumbrances not previously
approved by Lender, and (e) Lender shall have received such other evidence
as Lender shall reasonably request that the Required Repairs (or portions
thereof) to be funded by the requested disbursement have been completed and are
paid for or will be paid upon such disbursement to Borrower.  Lender shall not be required to make
disbursements from the Required Repair Fund unless such requested disbursement
is in an amount greater than $5,000 (or a lesser amount if the total amount in
the Required Repair Fund is less than $5,000, in which case only one
disbursement of the amount remaining in the account shall be made) and such
disbursement shall be made only upon satisfaction of each condition contained
in this Section 7.1.1. 
Lender shall disburse to Borrower any amounts remaining in the Required
Repair Fund upon the completion of all Required Repairs, provided, that the
following conditions are satisfied: 
(a) Borrower shall submit a written request to Lender for payment
of any remaining Required Repair Funds, (b) on the date such request is
received by Lender and on the date such payment is to be made, no Event of
Default shall exist and remain uncured, (c) Lender shall have received an
Officer’s Certificate stating that all Required Repairs have been completed in
good and workmanlike manner and in accordance with all applicable federal,
state and local laws, rules and regulations, and (ii) stating that each
Person that supplied materials or labor in connection with the Required Repairs
has been paid in full as of the date of such request, such Officer’s
Certificate to be accompanied by lien waivers or other evidence of payment
reasonably satisfactory to Lender, (d) at Lender’s option, a
title search indicating that the Property is free from all liens, claims
and other encumbrances not previously approved by Lender, and (e) Lender
shall have received such other evidence as Lender shall reasonably request that
the Required Repairs have been completed and are paid in full.

Section 7.2                                      Tax
and Insurance Escrow Fund.  Borrower
shall pay to Lender on each Payment Date (a) one-twelfth (1/12) of the Taxes
that Lender estimates will be payable during the next ensuing twelve (12)
months in order to accumulate with Lender sufficient funds to pay all such
Taxes at least thirty (30) days prior to their respective due dates, and (b)
one-twelfth (1/12) of the Insurance Premiums that Lender estimates will be
payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Lender sufficient funds to pay
all such Insurance Premiums at least thirty (30) days prior to the expiration
of the Policies (said amounts in (a) and (b) above are hereinafter called the “Tax
and Insurance Escrow Fund”).  The Tax
and Insurance Escrow Fund and the Monthly Debt Service

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Payment Amount, shall be added together and
shall be paid as an aggregate sum by Borrower to Lender.  Lender will apply the Tax and Insurance
Escrow Fund to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to this Agreement and under the Mortgage.  In making any payment relating to the 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 Taxes) or
insurer or agent (with respect to Insurance Premiums) or from Borrower 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, provided, however, Lender shall use reasonable efforts to pay such
real property taxes sufficiently early to obtain the benefit of any available
discounts of which it has knowledge.  If
the amount of the Tax and Insurance Escrow Fund shall exceed the amounts due
for Taxes and Insurance Premiums, Lender shall, in its sole discretion, return
any excess to Borrower or credit such excess against future payments to be made
to the Tax and Insurance Escrow Fund. 
Any amount remaining in the Tax and Insurance Escrow Fund after the Debt
has been paid in full shall be returned to Borrower.  In allocating such excess, Lender may deal
with the Person shown on the records of Lender to be the owner of the Property.  If at any time Lender reasonably determines
that the Tax and Insurance Escrow Fund is not or will not be sufficient to pay
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 Taxes or
Insurance Premiums.  Notwithstanding
anything to the contrary contained herein, Borrower shall not be required to
make monthly deposits with respect to the Tax and Insurance Escrow Fund
provided that: (i) no Event of Default has occurred, (ii) Borrower pays all
Taxes prior to delinquency and Insurance Premiums as the same become due and
payable and delivers to Lender evidence of such payment pursuant to Section
5.1.2 hereof, and (iii) with respect to Taxes, Borrower causes Behringer
Harvard REIT I, Inc. to deliver a guaranty in form and substance acceptable to
Lender with respect to the timely payment of Taxes or Borrower has deposited
with Lender an amount equal to one-half of the annual Taxes.

Section 7.3                                      Replacements
and Replacement Reserve.

7.3.1                        Replacement
Reserve Fund.  Borrower shall pay to
Lender on each Payment Date the sum of $8,661.75 (the “Replacement Reserve
Monthly Deposit”) for replacements and repairs required to be made to the
Property during the calendar year (collectively, the “Replacements”).  Amounts so deposited shall hereinafter be
referred to as Borrower’s “Replacement Reserve Fund” and the account in
which such amounts are held shall hereinafter be referred to as Borrower’s “Replacement
Reserve Account”.  Lender may
reassess its estimate of the amount necessary for the Replacement Reserve Fund
from time to time, and may increase the monthly amounts required to be
deposited into the Replacement Reserve Fund upon thirty (30) days notice to
Borrower if Lender determines in its commercially reasonable discretion based
upon updated engineering reports or inspections of the Property that an
increase is necessary to maintain the proper maintenance and operation of the
Property.  Notwithstanding the foregoing,
Borrower’s obligation to make monthly deposits to the Replacement Reserve Fund
shall be suspended provided that no Event of Default occurs.

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7.3.2                        Disbursements
from Replacement Reserve Account.

(a)                                  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,
replacements of inventory or for costs which are to be reimbursed from the
Rollover Reserve Fund.

(b)                                 Lender shall, upon
written request from Borrower and satisfaction of the requirements set forth in
this Section 7.3.2, disburse to
Borrower amounts from the Replacement Reserve Account necessary to pay for the
actual approved costs of Replacements or to reimburse Borrower therefor, upon
completion of such Replacements (or, upon partial completion in the case of
Replacements made pursuant to Section 7.3.2(e))
as determined by Lender.  In no event
shall Lender be obligated to disburse funds from the Replacement Reserve
Account if a Default or an Event of Default exists.

(c)                                  Each request for
disbursement from the Replacement Reserve Account shall be in a form specified
or approved by Lender and shall specify (i) the specific Replacements for
which the disbursement is requested, (ii) the quantity and price of each
item purchased, if the Replacement includes the purchase or replacement of
specific items, (iii) the price of all materials (grouped by type or
category) used in any Replacement other than the purchase or replacement of
specific items, and (iv) the cost of all contracted labor or other services
applicable to each Replacement for which such request for disbursement is
made.  With each request Borrower shall
certify that all Replacements have been made in accordance with all applicable
Legal Requirements and, unless Lender has agreed to issue joint checks as
described below, each request shall include evidence of payment of all such
amounts.  Each request for disbursement
shall include copies of invoices for all items or materials purchased and all
contracted labor or services provided. 
Except as provided in Section 7.3.2(e),
each request for disbursement from the Replacement Reserve Account shall be
made only after completion of the Replacement for which disbursement is
requested.  Borrower shall provide Lender
evidence of completion of the subject Replacement satisfactory to Lender in its
reasonable judgment.

(d)                                 Borrower shall pay all
invoices in connection with the Replacements with respect to which a
disbursement is requested prior to submitting such request for disbursement
from the Replacement Reserve Account or, at the request of Borrower, Lender
will issue joint checks, payable to Borrower and the contractor, supplier,
materialman, mechanic, subcontractor or other party to whom payment is due in
connection with a Replacement.  In the
case of payments made by joint check, Lender may require a waiver of lien from
each Person receiving payment prior to Lender’s disbursement from the
Replacement Reserve Account.  In
addition, as a condition to any disbursement, Lender may require Borrower to
obtain lien waivers from each contractor, supplier, materialman, mechanic or
subcontractor who receives payment in an amount equal to or greater than
$100,000 for completion of its work or delivery of its materials.  Any lien waiver delivered hereunder shall
conform to the requirements of applicable law and shall cover all work
performed and materials supplied (including equipment and fixtures) for the
Property by that contractor, supplier, subcontractor, mechanic or materialman
through the date covered by the current reimbursement request (or, in the event
that payment to such contractor, supplier, subcontractor, mechanic or
materialmen is to be made by a joint check, the release of lien shall be
effective through the date covered by the previous release of funds request).

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(e)                                  If (i) the cost
of a Replacement exceeds $100,000, (ii) the contractor performing such
Replacement requires periodic payments pursuant to terms of a written contract,
and (iii) Lender has approved in writing in advance such periodic payments,
a request for reimbursement from the Replacement Reserve Account may be made
after completion of a portion of the work under such contract, provided
(A) such contract requires payment upon completion of such portion of the
work, (B) the materials for which the request is made are on site at the
Property and are properly secured or have been installed in the Property,
(C) all other conditions in this Agreement for disbursement have been
satisfied, (D) funds remaining in the Replacement Reserve Account are, in
Lender’s judgment, sufficient to complete such Replacement and other
Replacements when required, and (E) if required by Lender, each contractor
or subcontractor receiving payments under such contract shall provide a waiver
of lien with respect to amounts which have been paid to that contractor or
subcontractor.

(f)                                    Borrower shall not
make a request for disbursement from the Replacement Reserve Account more
frequently than once in any calendar month and (except in connection with the
final disbursement) the total cost of all Replacements in any request shall not
be less than $15,000.00.

7.3.3                        Performance
of Replacements.

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

(b)                                 Lender reserves the
right, at its option, to approve all contracts or work orders with materialmen,
mechanics, suppliers, subcontractors, contractors or other parties providing
labor or materials under contracts for an amount in excess of $100,000 in
connection with the Replacements performed by Borrower.  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, and such failure continues to
exist for more than thirty (30) days after notice from Lender to Borrower,
Lender shall have the option, upon ten (10) days notice to Borrower (except in
the case of an emergency), 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, and to
exercise any and all other remedies available to Lender upon an Event of
Default hereunder.

(d)                                 In order to facilitate
Lender’s completion or making of the Replacements pursuant to Section
7.3.3(c) above, Borrower grants Lender the right to enter onto the Property
and perform any and all work and labor necessary to complete or make the
Replacements and/or employ watchmen to protect the Property from damage,
subject to the rights of Tenants.  All

 70
 

 

sums so expended by Lender, to the extent not from the Replacement
Reserve Fund, shall be deemed to have been advanced under the Loan to Borrower
and secured by the Mortgage.  For this
purpose Borrower constitutes and appoints Lender its true and lawful attorney
in fact with full power of substitution to complete or undertake the
Replacements in the name of Borrower. 
Such power of attorney shall be deemed to be a power coupled with an
interest and cannot be revoked but shall only be effective following an Event
of Default.  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
7.3.3 shall:  (i) make Lender
responsible for making or completing the Replacements; (ii) require Lender to
expend funds in addition to the Replacement Reserve Fund to make or complete
any Replacement; (iii) obligate Lender to proceed with the Replacements; or
(iv) obligate Lender to demand from Borrower additional sums to make or
complete any Replacement.

(f)                                    Borrower shall
permit Lender and Lender’s agents and representatives (including, without
limitation, Lender’s engineer, architect, or inspector) or third parties making
Replacements pursuant to this Section 7.3.3 to enter onto the Property
during normal business hours (subject to the rights of tenants under their
Leases) to inspect the progress of any Replacements and all materials being
used in connection therewith, to examine all plans and shop drawings relating
to such Replacements which are or may be kept at the Property, and to complete
any Replacements made pursuant to this Section 7.3.3.  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
7.3.3(f) or the completion of Replacements pursuant to this Section
7.3.3.

(g)                                 Lender may require an
inspection of the Property at Borrower’s expense prior to making a monthly
disbursement in excess of $100,000 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.  Borrower shall pay the expense of the inspection
as required hereunder, whether such inspection is conducted by Lender or by an
independent qualified professional.

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

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

(i)                                     Before each
disbursement in excess of $100,000 from the Replacement Reserve Account, Lender
may require Borrower to provide Lender with a search of title to the Property
effective to the date of the disbursement, which search shows that no mechanic’s
or materialmen’s liens or other liens of any nature have been placed against
the Property since the date of recordation of the related Mortgage and that
title to the Property is free and clear of all Liens (other than the lien of
the related Mortgage and any other Liens previously approved in writing by
Lender, if any).

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

(k)                                  In addition to any
insurance required under the Loan Documents, Borrower shall provide or cause to
be provided workmen’s compensation insurance, builder’s risk, and public
liability insurance and other insurance to the extent required under applicable
law in connection with a particular Replacement.  All such policies shall be in form and amount
reasonably satisfactory to Lender.  All
such policies which can be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed.  Certified copies of such policies shall be
delivered to Lender.

7.3.4                        Failure
to Make Replacements.

(a)                                  It shall be an Event
of Default under this Agreement if Borrower fails to comply with any provision
of this Section 7.3.3 and such failure is not cured within thirty (30)
days after notice from Lender; provided, however, if such failure is not
capable of being cured within said thirty (30) day period, then provided that
Borrower commences action to complete such cure and thereafter diligently
proceeds to complete such cure, 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 failure, but such additional period of time shall not
exceed ninety (90) days.  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 7.3.3, 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 Fund shall be in addition to all other rights
and remedies provided to Lender under this Agreement and the other Loan
Documents.

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

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

7.3.6        Indemnification. 
Borrower shall indemnify Lender and hold Lender harmless from and
against any and all actions, suits, claims, demands, liabilities, losses,
damages, obligations and costs and expenses (including litigation costs and
reasonable attorneys fees and expenses) arising from or in any way connected
with the performance of the Replacements unless the same are solely due to
gross negligence or willful misconduct of Lender.  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; provided, however, that Lender
may not pursue any such right or claim unless an Event of Default has occurred
and remains uncured.

Section 7.4             Rollover Reserve.

7.4.1        Deposits to Rollover Reserve Fund.  Borrower shall pay to Lender on the Closing
Date the sum of $4,519,898.90, which amounts shall be deposited with and held
by Lender for tenant improvement and leasing commission obligations and which
amounts include the outstanding tenant improvements and outstanding leasing
commissions listed in Schedule II; except that up to $1,175,000 may be
used in Borrower’s discretion to fund general capital improvements to the
Property.  Additionally, Borrower shall
deposit with Lender any Lease Termination Fees. 
Amounts so deposited shall hereinafter be referred to as the “Rollover
Reserve Fund”.

7.4.2        Withdrawal of Rollover Reserve Funds.  Lender shall make disbursements from the
Rollover Reserve Fund for tenant improvement, leasing commission obligations,
and subject to the limit set forth in Section 7.4.1 capital improvements
obligations, incurred by Borrower.  All
such expenses shall be approved by Lender in its commercially reasonable discretion,
except that Lender’s approval of such expenses shall not be required (a) if
Lender has separately approved (but was not deemed to have approved) the
related Lease in accordance with the provisions of Section 5.1.20 of
this Agreement or (b) with respect to tenant improvement expenses that are less
than $30.00 per square foot, provided Borrower delivers an Officer’s
Certificate certifying that the applicable lease is consistent with then
current market terms for the market in which the Property is located and for a
term of not less than five (5) years. 
Lender shall make disbursements as requested by Borrower on a monthly
basis in increments of no less than $5,000.00 upon delivery by Borrower of
Lender’s standard form of draw request accompanied by copies of paid invoices
for the amounts requested and, if required by Lender, lien waivers and releases
from all parties furnishing materials and/or services in connection with the
requested payment.  If (i) the cost of
any tenant improvement or capital improvement exceeds $100,000, (ii) the contractor
performing such tenant improvement requires periodic payments pursuant to the
terms of a written contract and (iii) Lender has approved in writing in advance
such periodic payments, a request for reimbursement from the Rollover Reserve
Fund may be made, upon delivery by Borrower of Lender’s standard form of draw
request accompanied by copies of invoices for the amounts requested, after
completion of a portion of the work under such contract, provided (A) such
contract requires payment upon completion of such portion of the work,
(B) the materials for which the request is made are on site at the
Property and are

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properly secured or have been installed in
the Property, (C) all other conditions in this Agreement for disbursement
have been satisfied, (D) funds remaining in the Rollover Reserve Fund are,
in Lender’s judgment, sufficient to cover tenant improvement and leasing
commission obligations, and (E) if required by Lender, each contractor or
subcontractor receiving payments under such contract shall provide a waiver of
lien with respect to amounts which have been paid to that contractor or
subcontractor.  Lender may require an
inspection of the Property at Borrower’s expense prior to making a monthly
disbursement in order to verify completion (or partial completion, in the case
of periodic payments) of improvements for which reimbursement is sought.  Any Lease Termination Fee shall be applied
first to tenant improvement and leasing commission obligations incurred in
connection with the reletting of the space for which such Lease Termination Fee
was paid pursuant to a Lease approved by Lender in accordance with the
provisions of this Agreement, and any remaining portion of such Lease
Termination Fee shall be released to Borrower provided that no Event of Default
exists and Lender shall have received a tenant estoppel certificate in form and
substance reasonably satisfactory to Lender.

Section 7.5             RESERVED

Section 7.6             Lease Obligation Fund.  On the Closing Date, Borrower shall deposit
with Lender the amount of One Hundred Seventy-Nine Thousand Eight Hundred
Sixty-One and 51/100 Dollars ($179,861.51) as a reserve for free rent tenant
allowances set forth on Schedule VI hereto (the “Lease Obligations”).  Amounts so deposited shall hereinafter be
referred to as the “Lease Obligation Fund”.  Lender shall disburse to Borrower the Lease
Obligation Funds as set forth on Schedule VI hereto upon delivery by Borrower
of Lender’s standard form of draw request.

Section 7.7             Reserve Funds, Generally.  Borrower grants to Lender a first-priority
perfected security interest in each of the Reserve Funds and any and all monies
now or hereafter deposited in each Reserve Fund as additional security for
payment of the Debt.  Until expended or
applied in accordance herewith, the Reserve Funds shall constitute additional
security for the Debt.  Upon the
occurrence of an Event of Default, Lender may, in addition to any and all other
rights and remedies available to Lender, apply any sums then present in any or
all of the Reserve Funds to the payment of the Debt in any order in its sole
discretion.  The Reserve Funds shall not
constitute trust funds and may be commingled with other monies held by
Lender.  Amounts deposited in the
Replacement Reserve Fund and the Rollover Reserve Fund shall bear interest at
the thirty day money market rate published by the bank used by Lender to hold
escrow deposits, and shall be held and released by Lender, and used by
Borrower, in accordance with the terms and conditions of this Agreement.  Lender shall be entitled to a servicing fee
in the amount of .25% per annum multiplied by the average daily balance on
deposit in the Replacement Reserve Fund and the Rollover Reserve Fund (but in
no event shall Lender be entitled to a servicing fee in an amount greater than
the amount of interest earned thereon), and Lender is hereby authorized to
deduct such servicing fee from the Replacement Reserve Fund and the Rollover
Reserve Fund on a monthly basis.  All
interest or other income in connection with the deposit or placement of the
Replacement Reserve Fund and the Rollover Reserve Fund, less the servicing fee,
shall be reported under Borrower’s tax identification number, and shall only be
disbursed as set forth in this Agreement. 
All interest on any Reserve Fund other than the Replacement Reserve Fund
or Rollover Reserve Fund shall not be added to or become a part thereof and
shall be the sole property of and shall be paid to Lender.  Borrower

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shall be responsible for payment of any
federal, state or local income or other tax applicable to the interest earned
on the Reserve Funds credited or paid to Borrower.  Borrower shall not, without obtaining the
prior written consent of Lender, further pledge, assign or grant any security
interest in any Reserve Fund or the monies deposited therein or permit any lien
or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1
Financing Statements, except those naming Lender as the secured party, to be
filed with respect thereto.  Lender shall
not be liable for any loss sustained on the investment of any funds
constituting the Reserve Funds.  Borrower
shall indemnify Lender and hold Lender harmless from and against any and all
actions, suits, claims, demands, liabilities, losses, damages, obligations and
costs and expenses (including litigation costs and reasonable attorneys fees
and expenses) arising from or in any way connected with the performance of the
obligations for which the Reserve Funds were established.  Borrower shall assign to Lender all rights
and claims Borrower may have against all persons or entities supplying labor,
materials or other services which are to be paid from or secured by the Reserve
Funds; provided, however, that Lender may not pursue any such right or claim
unless an Event of Default has occurred and remains uncured.

Section 7.8             Letter of Credit Rights.  Any Letter of Credit delivered to Lender
pursuant to this Agreement shall be held by Lender as additional security for
the Loan.  Lender shall have the right to
draw upon any Letter of Credit immediately and without further notice:

(a)           upon
the occurrence and during the continuance of an Event of Default;

(b)           if
Borrower fails to deliver to Lender, no less than thirty (30) days prior to the
expiration of any Letter of Credit (including any renewal or extension
thereof), a renewal or extension of such Letter of Credit or a replacement
Letter of Credit; or

(c)           if
the institution issuing the Letter of Credit ceases to be an Eligible
Institution and Borrower fails to deliver to Lender a replacement Letter of
Credit from an Eligible Institution within thirty (30) days of the date that
Borrower is notified or otherwise becomes aware that such institution ceased to
be an Eligible Institution.

Section 7.9             Application of Letter of Credit
Proceeds.  In the event of a draw
upon a Letter of Credit due to the existence of an Event of Default, Lender may
apply such amounts in such order and in such amounts as Lender shall elect, in
its sole and absolute discretion, to payment of the Debt.  In the event of a draw upon a Letter of
Credit due to the occurrence of an event described in Section 7.8(b) or (c)
above, Lender shall deposit the proceeds of such Letter of Credit into a
reserve account designated by Lender and such proceeds shall be held and released
in the same manner applicable to the release of the Letter of Credit.

VIII.                         defaults.

Section 8.1             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 when due;

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(ii)         if
any of the Taxes or Other Charges are not paid prior to the date when the same
become delinquent, except to the extent that Borrower is contesting same in
accordance with the terms of Section 5.1.2 hereof, or there are sufficient
funds in the Tax and Insurance Escrow Fund to pay such Taxes or Other Charges
and Lender fails to or refuses to release the same from the Tax and Insurance
Escrow Fund;

(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 ten (10) days of request;

(iv)        if
Borrower Transfers or encumbers any portion of the Property without Lender’s
prior written consent (to the extent such consent is required) or otherwise
violates the provisions of this Agreement and Article 6 of the Mortgage;

(v)         if
any material representation or warranty made by Borrower 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 in any material respect as of the date the representation or
warranty was made;

(vi)        if
Borrower, Principal or Guarantor shall make an assignment for the benefit of
creditors;

(vii)       if
a receiver, liquidator or trustee shall be appointed for Borrower, Principal or
Guarantor or if Borrower, Principal or Guarantor shall be adjudicated a
bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Borrower,
Principal or Guarantor, or if any proceeding for the dissolution or liquidation
of Borrower, Principal or Guarantor shall be instituted; provided, however, if
such appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower, Principal or Guarantor, upon the same not being
discharged, stayed or dismissed within one hundred eighty (180) days;

(viii)      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;

(ix)        if
Borrower breaches any of its respective negative covenants contained in Section
5.2 or any covenant contained in Section 4.1.30 hereof;

(x)         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;

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(xi)        if
any of the assumptions contained in the Insolvency Opinion delivered to Lender
in connection with the Loan, or in any Additional Insolvency Opinion delivered
subsequent to the closing of the Loan, is or shall become untrue in any
material respect;

(xii)       intentionally
omitted;

(xiii)      if
Borrower shall continue to be in Default under any of the terms, covenants or
conditions of Section 9.1 hereof (unless Borrower is unable to satisfy
such term, covenants or conditions due to circumstances beyond its control,
such as the unavailability of information requested by Lender), or willfully
fails to cooperate with Lender in connection with a Securitization pursuant to
the provisions of Section 9.1 hereof, for five (5) Business Days after
notice to Borrower from Lender;

(xiv)      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
(xiii) above or subsection (xv) below, for ten (10) days after 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 one hundred eighty  (180)
days; or

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

(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 Lender may,
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 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 any or all of 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 and Other Obligations of Borrower hereunder and under the other Loan
Documents shall immediately and automatically become due and payable, without
notice

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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 8.2             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 all or any
part of the Property.  Any such actions
taken by Lender shall be cumulative and concurrent and may be pursued
independently, singularly, successively, together or otherwise, at such time
and in such order as Lender may determine in its sole discretion, to the
fullest extent permitted by law, without impairing or otherwise affecting the
other rights and remedies of Lender permitted by law, equity or contract or as
set forth herein or in the other Loan Documents.  Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing (i) Lender
is not subject to any “one action” or “election of remedies” law or rule (to
the extent waiveable by Borrower), 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
Mortgage has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Debt or the Debt has been paid in full.

(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
for the satisfaction of any of the Debt in any preference or priority to any
other Property, and Lender may seek satisfaction out of the Property, or any
part thereof, in its absolute discretion in respect of the Debt.  In addition, to the extent permitted by
applicable law, Lender shall have the right from time to time to partially
foreclose the Mortgage in any manner and for any amounts secured by the
Mortgage 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 Mortgage to recover such
delinquent payments or (ii) in the event Lender elects to accelerate less than
the entire outstanding principal balance of the Loan, Lender may foreclose the
Mortgage to recover so much of the principal balance of the Loan as Lender may
accelerate and such other sums secured by the Mortgage as Lender may
elect.  Notwithstanding one or more
partial foreclosures, the Property shall remain subject to the Mortgage to
secure payment of sums secured by the Mortgage 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

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satisfactory to Lender.  Borrower
hereby absolutely and irrevocably appoints Lender following the occurrence of
an Event of Default as its true and lawful attorney, coupled with an interest,
in its name and stead to make and execute all documents necessary or desirable
to effect the aforesaid severance, Borrower ratifying all that its said
attorney shall do by virtue thereof; provided, however, Lender shall not make
or execute any such documents under such power until three (3) days after
notice has been given to Borrower by Lender of Lender’s intent to exercise its
rights under such power.  Borrower shall
be obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents in
connection with an Event of Default and the Severed Loan Documents shall not
contain any representations, warranties or covenants not contained in the Loan
Documents and any such representations and warranties contained in the Severed
Loan Documents will be given by Borrower only as of the Closing Date.

Section 8.3             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 singularly, concurrently or otherwise, at such time and in such order
as Lender may determine in Lender’s sole discretion.  No delay or omission to exercise any remedy,
right or power accruing upon an Event of Default shall impair any such remedy,
right or power or shall be construed as a waiver thereof, but any such remedy,
right or power may be exercised from time to time and as often as may be deemed
expedient.  A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.

IX.                                SPECIAL
PROVISIONS

Section 9.1             Securitization.

9.1.1        Sale of Notes and Securitization.  Borrower acknowledges and agrees that Lender
may sell all or any portion of the Loan and the Loan Documents, or issue one or
more participations therein, or consummate one or more private or public
securitizations of rated single- or multi-class securities (the “Securities”)
secured by or evidencing ownership interests in all or any portion of the Loan
and the Loan Documents or a pool of assets that include the Loan and the Loan
Documents (such sales, participations and/or securitizations, collectively, a “Securitization”).  Borrower irrevocably waives all rights, if
any, to prohibit disclosures required by law or the Rating Agencies or then
current market standards as reasonably determined by Lender in connection with
any Securitization, including, without limitation, any right of privacy.  Lender and each Rating Agency shall be
entitled to rely on the information supplied by, or on behalf of, Borrower and
Borrower indemnifies and holds harmless the Indemnified Parties, their
Affiliates and each Person who controls such Persons within the meaning of
Section 15 of the Securities Act of 1933, as amended from time to time, or
Section 20 of the Securities Exchange Act of 1934, as same may be amended from
time to time, for, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation,
reasonable attorneys’ fees and

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disbursements that arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in such information or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated in such
information or necessary in order to make the statements in such information,
or in light of the circumstances under which they were made, not misleading
(Borrower’s indemnity under this Section 9.1.1, with respect to third party
information and/or reports, shall be limited to the extent of Borrower’s
Knowledge that such information and/or reports to be untrue or inaccurate as of
the time such information and/or reports are delivered to Lender).  At the request of Lender, and to the extent
not already required to be provided by or on behalf of Borrower under this
Agreement, Borrower shall use reasonable efforts to provide information not in
the possession of Lender or which may be reasonably required by Lender or take
other actions reasonably required by Lender, in each case in order to satisfy
the market standards to which Lender customarily adheres or which may be reasonably
required by prospective investors and/or the Rating Agencies in connection with
any such Securitization including, without limitation, to:

(a)           provide
additional and/or updated Provided Information, together with appropriate
verification and/or consents related to the Provided Information through
letters of auditors or opinions of counsel of independent attorneys reasonably
acceptable to Lender, prospective investors and/or the Rating Agencies;

(b)           assist
in preparing descriptive materials for presentations to any or all of the
Rating Agencies, and work with, and if requested, supervise, third-party
service providers engaged by Borrower and approved by Lender, Principal and
their respective affiliates to obtain, collect, and deliver information requested
or required by Lender, prospective investors and/or the Rating Agencies;

(c)           deliver
(i) updated opinions of counsel as to non consolidation, due execution and
enforceability with respect to the Property, Borrower, the Principal and their
respective Affiliates and the Loan Documents and (ii) revised organizational
documents for Borrower, which counsel opinions and organizational documents
shall be reasonably satisfactory to Lender, prospective investors and/or the
Rating Agencies;

(d)           if
required by any prospective investor and/or any Rating Agency, use commercially
reasonable efforts to deliver such additional tenant estoppel letters,
subordination agreements or other agreements from parties to agreements that
affect the Property, which estoppel letters, subordination agreements or other
agreements shall be reasonably satisfactory to Lender, prospective investors
and/or the Rating Agencies;

(e)           make
such representations and warranties as of the closing date of the
Securitization with respect to the Property, Borrower, Principal, Guarantor and
the Loan Documents as may be reasonably requested by Lender, prospective
investors and/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;

(f)            execute
such amendments to the Loan Documents and organizational documents as may be
reasonably requested by the holder of the Note or the Rating Agencies or

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otherwise to effect the Securitization; provided, however, that
Borrower shall not be required to modify or amend any Loan Document if such
modification or amendment would (i) change the initial weighted interest rate,
the stated maturity or the amortization of principal set forth in the Note, or
(ii) modify or amend any other material term of the Loan;

(g)           if
requested by Lender, review any information regarding the Property, Borrower,
Principal, Guarantor, Manager and the Loan which is contained in a preliminary
or final private placement memorandum, prospectus, prospectus supplement
(including any amendment or supplement to either thereof), or other disclosure
document to be used by Lender or any affiliate thereof; and

(h)           supply
to Lender such documentation, financial statements and reports in form and
substance required in order to comply with any applicable securities laws.

9.1.2        Loan Components. 
Borrower covenants and agrees that in connection with any Securitization
of the Loan, upon Lender’s request Borrower shall deliver one or more new
component notes to replace the original note or modify the original note to
reflect multiple components of the Loan or create one or more mezzanine loans
(including amending Borrower’s organizational structure to provide for one or more
mezzanine borrowers and execute additional loan documents with respect to such
mezzanine loans) (each a “Resizing Event”).  Lender agrees that such new notes or modified
note or mezzanine notes shall have the same initial weighted average coupon as
the original note prior to such Resizing Event and shall otherwise comply with
the provisions of Section 9.1.1(f).

9.1.3        Securitization Costs. 
All reasonable third party costs and expenses incurred by Borrower in
connection with Borrower’s complying with requests made under this Section
9.1 (including, without limitation, the fees and expenses of the Rating
Agencies) shall be paid by Lender.

Section 9.2             Regulation A/B.  (a)   Borrower covenants and
agrees that, upon Lender’s written request therefor in connection with a
Securitization, Borrower shall, at Borrower’s sole cost and expense, promptly
deliver (i) audited financial statements of Guarantor and related documentation
prepared by an Independent certified public accountant that satisfy securities
laws and requirements for use in a public registration statement (which may
include up to three (3) years of historical audited financial statements) and
(ii) if, at the time one or more Disclosure Documents are being prepared in
connection with a Securitization, Lender expects that Borrower alone or
Borrower and one or more of its Affiliates collectively, or the Property alone
or the Property and any other parcel(s) of real property, together with
improvements thereon and personal property related thereto, that is “related”,
within the meaning of the definition of Significant Obligor, to the Property (a
“Related Property”) collectively, will be a Significant Obligor,
Borrower shall furnish to Lender upon request (I) the selected financial data
or, if applicable, net operating income, required under Item 1112(b)(1) of
Regulation AB and meeting the requirements thereof, if Lender expects that the
principal amount of the Loan, together with any loans made to an Affiliate of
Borrower or secured by a Related Property that is included in a Securitization
with the Loan (a “Related Loan”), as of the cut-off date for such
Securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such Securitization and at any time during
which the Loan and any Related

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Loans are included in a Securitization does,
equal or exceed ten percent (10%) (but less than twenty percent (20%)) of the
aggregate principal amount of all mortgage loans included or expected to be
included, as applicable, in the Securitization or (II) the financial statements
required under Item 1112(b)(2) of Regulation AB and meeting the requirements
thereof, if Lender expects that the principal amount of the Loan together with
any Related Loans as of the cut-off date for such Securitization may, or if the
principal amount of the Loan together with any Related Loans as of the cut-off
date for such Securitization and at any time during which the Loan and any
Related Loans are included in a Securitization does, equal or exceed twenty
percent (20%) of the aggregate principal amount of all mortgage loans included
or expected to be included, as applicable, in the Securitization.  Such financial data or financial statements
shall be furnished to Lender within ten (10) Business Days after notice from
Lender in connection with the preparation of Disclosure Documents for the
Securitization and, with respect to the data or financial statements required
pursuant to clause (ii) hereof, (A) not later than thirty (30) days after the
end of each fiscal quarter of Borrower and (B) not later than seventy-five (75)
days after the end of each Fiscal Year; provided, however, that Borrower shall
not be obligated to furnish financial data or financial statements pursuant to
clauses (A) or (B) of this sentence with respect to any period for which a
filing pursuant to the Securities Exchange Act of 1934 in connection with or
relating to the Securitization is not required.

(b)           Notwithstanding
any other provisions of this Section 9.2, Borrower’s obligations with respect
to the delivery of information (i) regarding the Property with respect to
periods predating Borrower’s acquisition of the Property, (ii) relating to
tenants of the Property, or (iii) otherwise relating to Persons or property not
owned by Borrower or within the reasonable control (or in the control of one or
more of its Affiliates) shall be limited to using commercially reasonable
efforts, in consultation with Lender, to (A) enforce Borrower’s contractual
rights, if any, to the delivery of such information (e.g. by its seller,
pursuant to the applicable purchase and sale agreement, or by a tenant pursuant
to its lease) or (B) otherwise obtain such information.

Section 9.3             Exculpation.  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 Mortgage 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 Mortgage and the other Loan Documents, or in the
Property, the Rents following an Event of Default, 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 following an Event of Default and in any other
collateral given to Lender, and Lender, by accepting the Note, this Agreement,
the Mortgage 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 Mortgage or the other Loan Documents.  The provisions of this Section shall not,
however, (a) constitute a waiver, release or impairment of any obligation
evidenced or secured by any of the Loan Documents; (b) impair the right of
Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under the Mortgage; (c) affect the validity or
enforceability of or any guaranty made in connection with the Loan or

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any of the rights and remedies of Lender
thereunder; (d) impair the right of Lender to obtain the appointment of a
receiver; (e) impair the enforcement of the Assignment of Leases following an
Event of Default; (f) constitute a prohibition against Lender commencing any
other appropriate action or proceeding in order for Lender to exercise its
remedies against the Property.  In
addition, the foregoing shall not be deemed 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)          the
misapplication or misappropriation of Rents;

(ii)         the
misapplication or misappropriation of Insurance Proceeds or Awards;

(iii)        Borrower’s
failure to return or to reimburse Lender for all Personal Property (other than
Personal Property not material to the operation or value of the Property) taken
from the Property by or on behalf of Borrower and not replaced with Personal
Property of the same utility and of the same or greater value;

(iv)        any
act of actual waste or arson by Borrower, any principal, affiliate, general
partner or member thereof or by Guarantor;

(v)         any
fees or commissions paid by Borrower to any principal, affiliate, general
partner or member of Borrower or any Guarantor in violation of the terms of
this Guaranty, the other Loan Documents;

(vi)        Borrower’s
failure to comply with the provisions of Section 9.4 of the Mortgage; or

(vii)       any
fraud, willful misconduct or intentional material misrepresentation by
Borrower, Principal, Guarantor or any of their respective Affiliates in
connection with the Loan; or

(viii)      any
breach or default of any material provision of Section 4.1.30 of this
Agreement (other than breaches of the requirements set forth in clauses (xii)
or (xxiii) of the definition of Special Purpose Entity).

Notwithstanding anything to the contrary in this
Agreement, the Note or any of the Loan Documents, (A) Lender shall not be
deemed to have waived any right which Lender may have under Section 506(a),
506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim
for the full amount of the Debt secured by the Mortgage or to require that all
collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Loan Documents, and (B) the Debt shall be fully recourse to
Borrower in the event or: (i) a voluntary breach or default under Section
5.2.10 of this Agreement, (ii) Borrower or Principal filing a voluntary
petition under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law; (iii) Borrower or

 83
 

 

Principal 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 any other Federal or state bankruptcy
or insolvency law, or soliciting or causing to be solicited petitioning
creditors for any involuntary petition from any Person; (iv) Borrower or
Principal consenting to or acquiescing in or joining in an application for the
appointment of a custodian, receiver, trustee, or examiner for Borrower,
Principal or any portion of the Property; or (v) Borrower or Principal making
an assignment for the benefit of creditors.

Section 9.4             Matters Concerning Manager.  If (a) an Event of Default has occurred, (b)
Manager shall become bankrupt or insolvent, (c) a change in Control of 50% or
more of the ownership of Manager (notice of which change of Control Borrower
agrees to give to Lender promptly upon receipt of knowledge thereof) or (d) a
default occurs under the Property Management Agreement and continues beyond all
applicable notice and cure periods, Borrower shall, at the request of Lender,
terminate the Property Management Agreement and replace the Manager with a
Qualifying Manager pursuant to a Replacement Management Agreement, it being
understood and agreed that the management fee for such Qualifying Manager shall
not exceed then prevailing market rates.

Section 9.5             Servicer.  At the option of Lender, the Loan may be
serviced by a servicer/trustee (any such servicer/trustee, together with its
agents, nominees or designees, are collectively referred to as “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to the
Servicer pursuant to a servicing agreement (the “Servicing Agreement”) between
Lender and Servicer.  Borrower shall be
responsible for any reasonable set-up fees or any other initial costs relating
to or arising under the Servicing Agreement; provided, however, that Borrower
shall not be responsible for payment of the monthly servicing fee due to
Servicer under the Servicing Agreement.

X.                                    MISCELLANEOUS

Section 10.1           Survival.  This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the
execution and delivery to Lender of the Note, and shall continue in full force
and effect so long as all or any of the Debt is outstanding and unpaid unless a
longer period is expressly set forth herein or in the other Loan
Documents.  Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the legal representatives, successors and assigns of such party.  All covenants, promises and agreements in
this Agreement, by or on behalf of Borrower, shall inure to the benefit of the
legal representatives, successors and assigns of Lender.

Section 10.2           Lender’s Discretion.  Whenever pursuant to this Agreement, 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 discretion of Lender and shall be final and conclusive.

 84
 

 

Section 10.3           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the state in which the Property is
located (without regard to any conflict of laws or principles) and the
applicable laws of the United States of America.

Section 10.4           Modification, Waiver in Writing.  No modification, amendment, extension,
discharge, termination or waiver of any provision of this Agreement, or of the
Note, or of any other Loan Document, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall be in a
writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given.  Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar
or other circumstances.

Section 10.5           Delay Not a Waiver.  Neither any failure nor any delay on the part
of Lender in insisting upon strict performance of any term, condition, covenant
or agreement, or exercising any right, power, remedy or privilege hereunder, or
under the Note or under any other Loan Document, or any other instrument given
as security therefor, shall operate as or constitute a waiver thereof, nor
shall a single or partial exercise thereof preclude any other future exercise,
or the exercise of any other right, power, remedy or privilege.  In particular, and not by way of limitation, by
accepting payment after the due date of any amount payable under this
Agreement, the 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 10.6           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):

	
  If to Lender:

  	
  Wachovia Bank, National Association

  
	
   

  	
  Commercial Real
  Estate Services

  
	
   

  	
  8739 Research
  Drive URP 4

  
	
   

  	
  NC 1075

  
	
   

  	
  Charlotte, North
  Carolina  28262

  
	
   

  	
  Loan Number:
  502858632

  
	
   

  	
  Attention:
  Portfolio Management

  
	
   

  	
  Fax No.: (704) 715-0036

  

 85
 

 

 

	
  With a copy to:

  	
  Proskauer Rose LLP

  
	
   

  	
  1585 Broadway

  
	
   

  	
  New York, New
  York 10036

  
	
   

  	
  Attention: David J. Weinberger, Esq.

  
	
   

  	
   

  
	
  If to Borrower:

  	
  c/o Behringer Harvard Funds

  
	
   

  	
  15601 Dallas
  Parkway, Suite 600

  
	
   

  	
  Addison, Texas
  75001

  
	
   

  	
  Attention: Gerald J. Reihsen, III

  
	
   

  	
   

  
	
  With a copy to:

  	
  Luce, Forward, Hamilton & Scripps LLP

  
	
   

  	
  600 West
  Broadway

  
	
   

  	
  Suite 2600

  
	
   

  	
  San Diego, CA
  92101-3391

  
	
   

  	
  Attention: Darryl Steinhause, Esq.

  

 

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 10.7           Trial
by Jury.

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

Section 10.8           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 10.9           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 10.10         Preferences.  Lender shall have the continuing and exclusive
right to apply or reverse and reapply any and all payments by Borrower during
the existence of an

 86
 

 

Event of Default 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 bankruptcy 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 10.11         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 10.12         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 10.13         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 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 and all the costs of
furnishing all opinions by counsel for Borrower (including without limitation
any opinions requested by Lender as to any legal matters arising under this
Agreement or the other Loan Documents with respect to the Property); (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) except as otherwise provided in this Agreement, 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 reasonably requested by Lender;
(v) securing Borrower’s compliance with any requests made pursuant to the
provisions of this Agreement; (vi) the filing

 87
 

 

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; (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 (including
any fees incurred by Servicer in connection with the transfer of the Loan to a
special servicer prior to a Default or Event of Default) 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, illegal acts, fraud or willful misconduct of Lender.

(b)           Borrower
shall indemnify, defend and hold harmless Lender from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against Lender 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
(collectively, the “Indemnified Liabilities”); provided, however, that
Borrower shall not have any obligation to Lender hereunder to the extent that
such Indemnified Liabilities arise from the gross negligence, illegal acts,
fraud 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 Indemnified Liabilities incurred by Lender.

(c)           Borrower
covenants and agrees to pay for or, if Borrower fails to pay, to reimburse
Lender for, any fees and expenses incurred by any Rating Agency in connection
with any Rating Agency review of the Loan, the Loan Documents or any
transaction contemplated thereby or any consent, approval, waiver or
confirmation obtained from such Rating Agency pursuant to the terms and
conditions of this Agreement or any other Loan Document and Lender shall be
entitled to require payment of such fees and expenses as a condition precedent
to the obtaining of any such consent, approval, waiver or confirmation.

Section 10.14         Schedules Incorporated.  The Schedules annexed hereto are hereby
incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.

Section 10.15         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

 88
 

 

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 10.16         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 be solely that of borrower and lender.  Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Borrower and Lender nor to grant Lender any interest in
the Property other than that of mortgagee, beneficiary or lender.

(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, in Lender’s sole discretion, Lender deems it advisable or
desirable to do so.

Section 10.17         Publicity.  All news releases, publicity or advertising
by Borrower or its Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the
Loan Documents, to Lender or any of its Affiliates shall be subject to the
prior written approval of Lender.

Section 10.18         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, or to a sale in inverse order of
alienation in the event of foreclosure of the Mortgage, 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 10.19         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.

 89
 

 

Section 10.20         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 10.21         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 NorthMarq Capital.  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
reasonable 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 in
connection with the transactions contemplated herein.  The provisions of this Section 10.21 shall survive the
expiration and termination of this Agreement and the payment of the Debt.

Section 10.22         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 or
understandings among or between such parties, whether oral or written, are
superseded by the terms of this Agreement and the other Loan Documents and
unless specifically set forth in a writing contemporaneous herewith the terms,
conditions and provisions of such prior agreement do not survive execution of
this Agreement.

Section 10.23         Transfer of Loan.  In the event that Lender transfers the Loan,
Borrower shall continue to make payments at the place set forth in the Note
(and its obligation to make such payments shall be deemed satisfied upon the
making of such payments) until such time that Borrower is notified in writing
by Lender that payments are to be made at another place.

Section 10.24         Joint and Several Liability.  If Borrower consists of more than
one (1) Person the obligations and liabilities of each Person shall be
joint and several.

(THE BALANCE OF
THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.)

 90

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD ELDRIDGE PLACE

  LP, a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
  Title: Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION,

  a banking association chartered under the laws of the

  United States of America

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

SCHEDULE I

[Reserved]

 I-1

 

SCHEDULE II

Rent Roll / Expansion
Options / Outstanding Leasing Commissions / Outstanding Tenant

Improvements / Existing Sublease Agreements

 

(See Attached)

 II-1

 

SCHEDULE III

(Required
Repairs—Deadlines For Completion)

 

None

 III-1

 

SCHEDULE IV

(Organizational Chart of
Borrower)

 

(See Attached)

 IV-1

 

SCHEDULE V

(Exceptions to
Representations)

 

Section 4.1.4 – Pending
Litigation

Ken Jackson slip and fall
issue – date of incident – December 21, 2005

Section 4.1.22 –
Certificates of Occupancy

No Certificate Occupancy
exists for CA Richards – Suite 280 in Eldridge One

Schedule II disclosures
include the following exceptions:

·                                          Expansion
Options

·                                          Free Rent

·                                          Outstanding
Leasing Commissions

·                                          Outstanding
Tenant Improvements

·                                          Existing
Subleases

See Section II of Loan
Agreement for these detailed schedules

 IV-1

 

SCHEDULE VI

(Lease Obligations)

 

(See Attached)

EXHIBIT A

Form of
SNDA

[Property]

Loan No.                                 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT

This Subordination, Non-Disturbance and Attornment Agreement (the “Agreement”)
is dated as of the                    
day of                           
, 200  , between WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association (“Lender”), and                                            ,
a                                    
(“Tenant”).

RECITALS

A.                                   Tenant
is the tenant under a certain lease (the “Lease”) dated                                          
, with                                 
                                                    ,
a                                                       
(“Landlord”) or its predecessor in interest, of premises described in
the Lease (the “Premises”) located in a certain [shopping center/office
building/warehouse/industrial park/hotel] known as                                                           
     located in                                                                         
and more particularly described in Exhibit A attached hereto and made a part
hereof (such [shopping center/office building/ warehouse/ industrial
park/hotel], including the Premises, is hereinafter referred to as the “Property”).

B.                                     This
Agreement is being entered into in connection with a mortgage loan (the “Loan”)
being made by Lender to Landlord, to be secured by, among other things:  (a) a first priority mortgage, deed of trust
or deed to secure debt on and of the Property (the “Mortgage”) to be
recorded with the registry or clerk of the county in which the Property is
located; and (b) a first priority assignment of leases and rents on the
Property (the “Assignment of Leases and Rents”) to be recorded.  The Mortgage and the Assignment of Leases and
Rents are hereinafter collectively referred to as the “Security Documents”.

C.                                     Tenant
acknowledges that Lender will rely on this Agreement in making the Loan to
Landlord.

AGREEMENT

For mutual consideration, including the mutual covenants and agreements
set forth below, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

1.                                       Tenant
agrees that the Lease is and shall be**[, at the option of the Lender upon
notice to Tenant, at any time and from time to time, either]** subject and
subordinate**[, or superior,]** to the Security Documents and to all present or
future advances under the obligations secured thereby and all renewals,
amendments, modifications, consolidations, replacements and extensions of the
secured obligations and the Security Documents, to the full

 

extent
of all amounts secured by the Security Documents from time to time.  [Such options of the Lender may be exercised
an unlimited number of times.]  [If
subordinated, said] [Said] subordination is to have the same force and effect
as if the Security Documents and such renewals, modifications, consolidations,
replacements and extensions thereof had been executed, acknowledged, delivered
and recorded prior to the Lease, any amendments or modifications thereof and
any notice thereof.

2.                                       Lender
agrees that, if the Lender exercises any of its rights under the Security
Documents, including an entry by Lender pursuant to the Mortgage or a
foreclosure of the Mortgage, Lender shall not disturb Tenant’s right of quiet
possession of the Premises under the terms of the Lease so long as Tenant is
not in default beyond any applicable grace period of any term, covenant or
condition of the Lease.

3.                                       Tenant
agrees that, in the event of a foreclosure of the Mortgage by Lender or the
acceptance of a deed in lieu of foreclosure by Lender or any other succession
of Lender to fee ownership, Tenant will attorn to and recognize Lender as its
landlord under the Lease for the remainder of the term of the Lease (including
all extension periods which have been or are hereafter exercised) upon the same
terms and conditions as are set forth in the Lease, and Tenant hereby agrees to
pay and perform all of the obligations of Tenant pursuant to the Lease.

4.                                       Tenant
agrees that, in the event Lender succeeds to the interest of Landlord under the
Lease, Lender shall not be:

(a)                                  liable
for any act or omission of any prior Landlord (including, without limitation,
the then defaulting Landlord), or

(b)                                 subject
to any defense or offsets which Tenant may have against any prior Landlord
(including, without limitation, the then defaulting Landlord), or

(c)                                  bound
by any payment of rent or additional rent which Tenant might have paid for more
than one month in advance of the due date under the Lease to any prior Landlord
(including, without limitation, the then defaulting Landlord), or

(d)                                 bound
by any obligation to make any payment to Tenant which was required to be made
prior to the time Lender succeeded to any prior Landlord’s interest, or

(e)                                  accountable
for any monies deposited with any prior Landlord (including security deposits),
except to the extent such monies are actually received by Lender, or

(f)                                    bound
by any surrender, termination, amendment or modification of the Lease made
without the consent of Lender.

5.                                       Tenant
agrees that, notwithstanding any provision hereof to the contrary, the terms of
the Mortgage shall continue to govern with respect to the disposition of any
insurance proceeds or eminent domain awards, and any obligations of Landlord to
restore the real estate of which the Premises are a part shall, insofar as they
apply to Lender, be limited to insurance

 4
 

 

proceeds
or eminent domain awards received by Lender after the deduction of all costs
and expenses incurred in obtaining such proceeds or awards.

6.                                       Tenant
hereby agrees to give to Lender copies of all notices of Landlord default(s)
under the Lease in the same manner as, and whenever, Tenant shall give any such
notice of default to Landlord, and no such notice of default shall be deemed
given to Landlord unless and until a copy of such notice shall have been so
delivered to Lender.  Lender shall have
the right to remedy any Landlord default under the Lease, or to cause any default
of Landlord under the Lease to be remedied, and for such purpose Tenant hereby
grants Lender such additional period of time as may be reasonable to enable
Lender to remedy, or cause to be remedied, any such default in addition to the
period given to Landlord for remedying, or causing to be remedied, any such
default.  Tenant shall accept performance
by Lender of any term, covenant, condition or agreement to be performed by
Landlord under the Lease with the same force and effect as though performed by
Landlord.  No Landlord default under the
Lease shall exist or shall be deemed to exist (i) as long as Lender, in good
faith, shall have commenced to cure such default within the above referenced
time period and shall be prosecuting the same to completion with reasonable
diligence, subject to force majeure, or (ii) if possession of the Premises is
required in order to cure such default, or if such default is not susceptible
of being cured by Lender, as long as Lender, in good faith, shall have notified
Tenant that Lender intends to institute proceedings under the Security
Documents, and, thereafter, as long as such proceedings shall have been
instituted and shall be prosecuted with reasonable diligence.  In the event of the termination of the Lease
by reason of any default thereunder by Landlord, upon Lender’s written request,
given within thirty (30) days after any such termination, Tenant, within
fifteen (15) days after receipt of such request, shall execute and deliver to
Lender or its designee or nominee a new lease of the Premises for the remainder
of the term of the Lease upon all of the terms, covenants and conditions of the
Lease. Lender shall have the right, without Tenant’s consent, to foreclose the
Mortgage or to accept a deed in lieu of foreclosure of the Mortgage or to
exercise any other remedies under the Security Documents.

7.                                       Tenant
hereby consents to the Assignment of Leases and Rents from Landlord to Lender
in connection with the Loan.  Tenant
acknowledges that the interest of the Landlord under the Lease is to be
assigned to Lender solely as security for the purposes specified in said
assignments, and Lender shall have no duty, liability or obligation whatsoever
under the Lease or any extension or renewal thereof, either by virtue of said
assignments or by any subsequent receipt or collection of rents thereunder,
unless Lender shall specifically undertake such liability in writing or unless
Lender or its designee or nominee becomes, and then only with respect to
periods in which Lender or its designee or nominee becomes, the fee owner of
the Premises.  Tenant agrees that upon
receipt of a written notice from Lender of a default by Landlord under the
Loan, Tenant will thereafter, if requested by Lender, pay rent to Lender in
accordance with the terms of the Lease.

8.                                       The
Lease shall not be assigned by Tenant, modified, amended or terminated (except
a termination that is permitted in the Lease without Landlord’s consent)
without Lender’s prior written consent in each instance

9.                                       Any
notice, election, communication, request or other document or demand required
or permitted under this Agreement shall be in writing and shall be deemed
delivered on 

 5
 

 

the
earlier to occur of (a) receipt or (b) the date of delivery, refusal or
nondelivery indicated on the return receipt, if deposited in a United States
Postal Service Depository, postage prepaid, sent certified or registered mail,
return receipt requested, or if sent via a recognized commercial courier
service providing for a receipt, addressed to Tenant or Lender, as the case may
be, at the following addresses:

	
  If to Tenant:

  
	
   

  
	
   

  
	
  with a copy to:

  
	
   

  
	
   

  
	
  If to Lender:

  
	
   

  
	
  Wachovia Bank,
  National Association

  
	
  301 South
  College Street—NC0166

  
	
  Charlotte, North
  Carolina 28288-0166

  
	
  Attention: Real
  Estate Capital Markets,

  
	
  Commercial Real
  Estate Finance

  
	
   

  
	
  with a copy to:

  
	
   

  
	
  Proskauer Rose LLP

  
	
  1585 Broadway

  
	
  New York, New
  York 10036

  
	
  Attention: David
  J. Weinberger, Esq.

  

 

10.                                 The
term “Lender” as used herein includes any successor or assign of the named
Lender herein, including without limitation, any co-lender at the time of
making the Loan, any purchaser at a foreclosure sale and any transferee
pursuant to a deed in lieu of foreclosure, and their successors and assigns,
and the terms “Tenant” and “Landlord” as used herein include any successor and
assign of the named Tenant and Landlord herein, respectively; provided,
however, that such reference to Tenant’s or Landlord’s successors and assigns
shall not be construed as Lender’s consent to any assignment or other transfer
by Tenant or Landlord.

11.                                 If
any provision of this Agreement is held to be invalid or unenforceable by a
court of competent jurisdiction, such provision shall be deemed modified to the
extent necessary to be enforceable, or if such modification is not practicable,
such provision shall be deemed

 6
 

 

deleted
from this Agreement, and the other provisions of this Agreement shall remain in
full force and effect, and shall be liberally construed in favor of Lender.

12.                                 Neither
this Agreement nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
executed by the party against which enforcement of the termination, amendment,
supplement, waiver or modification is sought.

13.                                 This
Agreement shall be construed in accordance with the laws of the state of in
which the Property is located.

14.                                 The
person executing this Agreement on behalf of Tenant is authorized by Tenant to
do so and execution hereof is the binding act of Tenant enforceable against
Tenant.

*   *  
*   *   *

 7

 

Witness the execution hereof  as
of the date first above written.

	
  

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
								

 

The undersigned
Landlord hereby consents to the foregoing Agreement and confirms the facts
stated in the foregoing Agreement.

	
  

  	
  LANDLORD:

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

[ADD
APPROPRIATE ACKNOWLEDGMENT]

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