Document:

Exhibit 10.1(b)

 

AMENDMENT TO

STOCK PURCHASE AND SALE AGREEMENT

 

THIS AMENDMENT TO
STOCK PURCHASE AND SALE AGREEMENT is made as of this 30th day of October, 2007
(this “Amendment”) by and between BCSP IV U.S. Investments, L.P., a
Delaware limited partnership (“Seller”) and (i) Behringer Harvard One
Financial Plaza Chicago, LLC, a Delaware limited liability company, (ii)
Behringer Harvard 10/120 South Riverside Plaza, LLC, a Delaware limited
liability company and (iii) Behringer Harvard 200 South Wacker Drive, LLC, a
Delaware limited liability company (collectively, “Purchaser”, and together
with Seller, the “Parties”), and amends that certain Stock Purchase and Sale
Agreement between Seller and Behringer Harvard Operating Partnership I LP (“Assignor”),
which subsequently assigned its interest to Purchaser, dated as of August 15,
2007 (the “Agreement”). Unless otherwise defined herein, capitalized
terms used in this Amendment shall have the meanings ascribed to them in the
Agreement.

 

RECITALS

 

A.            Seller and Purchaser desire to amend
certain terms of the Agreement as hereinafter set forth.

 

NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Purchaser hereby agree as follows:

 

1.             Closing Date. The Closing
Date shall be November 1, 2007. It is the intention of the Parties that this
provision shall supersede those provisions of that certain letter agreement of
Seller and Assignor dated September 15, 2007 related to the setting of the
Closing Date.

 

2.             Prorations. If any of the
items subject to proration under the provisions of the Agreement cannot be
prorated at the Closing because of the unavailability of the information
reasonably necessary to estimate such proration, or if any errors in the
computations of any such prorations are discovered subsequent thereto, then
such items shall be prorated and such errors corrected as soon as practicable
and the proper party reimbursed; provided, however, that any such prorations
will be made within forty-five (45) days after the Closing Date or not at all.
The provisions of this paragraph shall survive the Closing.

 

3.             Reaffirmation of Representations
made by 10/120 Ground Lessor and 10/120 Ground Lessee. Reference is hereby
made to that certain Consent Agreement (the “Consent Agreement”) to be
entered into at Closing by and between 10/120 Ground Lessor and 10/120 Ground
Lessee (herein referred to collectively as the “10/120 Borrower”) and
the Lender with respect to the 10/120 South Riverside Property (the “10/120
Lender”) and, in particular, to the 10/120 Borrower’s reaffirmation of
representations and warranties set forth in the first sentence of Section 1.25
of the Consent Agreement (the “Reaffirmation”). In addition to the other
indemnification obligations of Seller contained in the Agreement, Seller hereby
agrees to indemnify and hold harmless the 10/120 Borrower for any loss it
incurs as a result of a claim made by the 10/120 Lender that the 10/120
Borrower breached the Reaffirmation in respect of any one or more of the
following Sections of the Loan Agreement (as defined in the Consent Agreement):
3.1.2, 3.1.3, 3.1.4, 3.1.5, 3.1.6, 3.1.8, 3.1.10 (first sentence only), 3.1.15,
3.1.17 (second sentence only), 3.1.18, 3.1.23, 3.1.24, 3.1.27, 3.1.29, 3.1.31,
3.1.34, 3.1.37, 3.1.39,

 

1

 

3.1.41 and 3.1.42. The indemnification obligation set
forth in the preceding sentence shall only apply if, as and to the extent that
the breach of the Reaffirmation related to the state of facts (including the
constitution of the 10/120 Borrower) immediately prior to the Closing and shall
otherwise be subject to the provisions of Sections 5.5.3 and 5.5.4 of the
Agreement (including, without limitation, that a claim for indemnification
hereunder must in all events be made prior to the date which is twelve (12)
months after the Closing), all as if such indemnification obligation were
included as a part of Section 5.5.2 of the Agreement.

 

4.             Miscellaneous. Except as
otherwise expressly modified in this Amendment, the terms and conditions of the
Agreement are and shall remain in full force and effect. The Agreement, as
modified hereby, is affirmed. In the event of any conflict or inconsistency
between the terms and provisions of the Agreement and the terms and provisions
of the Amendment, the terms and provisions of this Amendment shall govern and
control. The term “Agreement” as used herein and in the Agreement shall mean
the Agreement as modified by this Amendment and as same may be further modified
or amended. This Amendment may be executed in any number of counterparts, all
of which together shall be deemed to constitute one instrument, and each of
which shall be deemed an original. In addition, the parties acknowledge and
agree that facsimile signatures shall be deemed valid and binding, and
thereafter, upon request of either party, each party agrees to deliver original
signed copies of this Amendment to the other party.

 

[END OF TEXT]

 

2

 

IN WITNESS
WHEREOF, the parties hereto have executed this Amendment as of the date first
set forth above.

 

	
   

  	
  SELLER

  
	
   

  	
   

  
	
   

  	
  BCSP IV U.S. INVESTMENTS, L.P., a Delaware
  limited

  partnership

  
	
   

  	
   

  
	
   

  	
   

  	
  By: BCSP REIT IV, Inc., a Maryland
  corporation,

  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  William A. Bonn

  
	
   

  	
   

  	
   

  	
  Senior Managing Director, General Counsel

  and Assistant Secretary

  
	
   

  	
   

  

 

[Signature pages continue]

 

3

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD 200 SOUTH WACKER

  DRIVE, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD 10/120 SOUTH RIVERSIDE

  PLAZA, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD ONE FINANCIAL PLAZA

  CHICAGO, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

4Exhibit 10.2

 

 

 

LOAN
AGREEMENT

 

 

Dated as of
January 30, 2006

 

 

By and Between

 

 

200 SOUTH
WACKER PROPERTY LLC,

as Borrower

 

 

and

 

 

LEHMAN
BROTHERS BANK FSB,

as Lender

 

 

 

 

TABLE
OF CONTENTS

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  I.

  	
  DEFINITIONS; PRINCIPLES OF
  CONSTRUCTION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2

  	
   

  	
  Principles of Construction

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  THE LOAN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  The Loan

  	
   

  	
  18

  
	
  2.1.1

  	
   

  	
  Agreement to Lend and Borrow

  	
   

  	
  18

  
	
  2.1.2

  	
   

  	
  Single Disbursement to Borrower

  	
   

  	
  18

  
	
  2.1.3

  	
   

  	
  The Note

  	
   

  	
  18

  
	
  2.1.4

  	
   

  	
  Use of Proceeds

  	
   

  	
  18

  
	
  2.1.5

  	
   

  	
  Components

  	
   

  	
  18

  
	
  Section 2.2

  	
   

  	
  Interest Rate

  	
   

  	
  19

  
	
  2.2.1

  	
   

  	
  Interest Rate

  	
   

  	
  19

  
	
  2.2.2

  	
   

  	
  Intentionally Omitted

  	
   

  	
  19

  
	
  2.2.3

  	
   

  	
  Default Rate

  	
   

  	
  19

  
	
  2.2.4

  	
   

  	
  Interest Calculation

  	
   

  	
  19

  
	
  2.2.5

  	
   

  	
  Usury Savings

  	
   

  	
  19

  
	
  Section 2.3

  	
   

  	
  Loan Payments

  	
   

  	
  19

  
	
  2.3.1

  	
   

  	
  Payment Before Maturity Date

  	
   

  	
  19

  
	
  2.3.2

  	
   

  	
  Intentionally Omitted

  	
   

  	
  19

  
	
  2.3.3

  	
   

  	
  Payment on Maturity Date

  	
   

  	
  20

  
	
  2.3.4

  	
   

  	
  Late Payment Charge

  	
   

  	
  20

  
	
  2.3.5

  	
   

  	
  Method and Place of Payment

  	
   

  	
  20

  
	
  2.3.6

  	
   

  	
  Payments After Event of Default

  	
   

  	
  20

  
	
  Section 2.4

  	
   

  	
  Prepayments

  	
   

  	
  20

  
	
  2.4.1

  	
   

  	
  Voluntary Prepayments

  	
   

  	
  20

  
	
  2.4.2

  	
   

  	
  Mandatory Prepayments

  	
   

  	
  21

  
	
  2.4.3

  	
   

  	
  Prepayments After Default

  	
   

  	
  21

  
	
  Section 2.5

  	
   

  	
  Release

  	
   

  	
  22

  
	
  2.5.1

  	
   

  	
  Release of Property

  	
   

  	
  22

  
	
  Section 2.6

  	
   

  	
  Permitted Mezzanine Loan

  	
   

  	
  22

  
	
  2.6.1

  	
   

  	
  Mezzanine Loan

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Borrower Representations

  	
   

  	
  24

  
	
  3.1.1

  	
   

  	
  Organization

  	
   

  	
  24

  
	
  3.1.2

  	
   

  	
  Proceedings

  	
   

  	
  24

  
	
  3.1.3

  	
   

  	
  No Conflicts

  	
   

  	
  24

  
						

 

 

	
  3.1.4

  	
   

  	
  Litigation

  	
   

  	
  25

  
	
  3.1.5

  	
   

  	
  Agreements

  	
   

  	
  25

  
	
  3.1.6

  	
   

  	
  Consents

  	
   

  	
  25

  
	
  3.1.7

  	
   

  	
  Title

  	
   

  	
  25

  
	
  3.1.8

  	
   

  	
  No Plan Assets

  	
   

  	
  25

  
	
  3.1.9

  	
   

  	
  Compliance

  	
   

  	
  26

  
	
  3.1.10

  	
   

  	
  Financial Information

  	
   

  	
  26

  
	
  3.1.11

  	
   

  	
  Condemnation

  	
   

  	
  26

  
	
  3.1.12

  	
   

  	
  Utilities and Public Access

  	
   

  	
  26

  
	
  3.1.13

  	
   

  	
  Separate Lots

  	
   

  	
  26

  
	
  3.1.14

  	
   

  	
  Assessments

  	
   

  	
  26

  
	
  3.1.15

  	
   

  	
  Enforceability

  	
   

  	
  26

  
	
  3.1.16

  	
   

  	
  Assignment of Leases

  	
   

  	
  27

  
	
  3.1.17

  	
   

  	
  Insurance

  	
   

  	
  27

  
	
  3.1.18

  	
   

  	
  Licenses

  	
   

  	
  27

  
	
  3.1.19

  	
   

  	
  Flood Zone

  	
   

  	
  27

  
	
  3.1.20

  	
   

  	
  Physical Condition

  	
   

  	
  27

  
	
  3.1.21

  	
   

  	
  Boundaries

  	
   

  	
  27

  
	
  3.1.22

  	
   

  	
  Leases

  	
   

  	
  28

  
	
  3.1.23

  	
   

  	
  Filing and Recording Taxes

  	
   

  	
  28

  
	
  3.1.24

  	
   

  	
  Single Purpose

  	
   

  	
  28

  
	
  3.1.25

  	
   

  	
  Tax Filings

  	
   

  	
  32

  
	
  3.1.26

  	
   

  	
  Solvency

  	
   

  	
  32

  
	
  3.1.27

  	
   

  	
  Federal Reserve Regulations

  	
   

  	
  33

  
	
  3.1.28

  	
   

  	
  Organizational Chart

  	
   

  	
  33

  
	
  3.1.29

  	
   

  	
  Bank Holding Company

  	
   

  	
  33

  
	
  3.1.30

  	
   

  	
  No Other Debt

  	
   

  	
  33

  
	
  3.1.31

  	
   

  	
  Investment Company Act

  	
   

  	
  33

  
	
  3.1.32

  	
   

  	
  Access/Utilities

  	
   

  	
  33

  
	
  3.1.33

  	
   

  	
  No Bankruptcy Filing

  	
   

  	
  34

  
	
  3.1.34

  	
   

  	
  Full and Accurate Disclosure

  	
   

  	
  34

  
	
  3.1.35

  	
   

  	
  Foreign Person

  	
   

  	
  34

  
	
  3.1.36

  	
   

  	
  Fraudulent Transfer

  	
   

  	
  34

  
	
  3.1.37

  	
   

  	
  No Change in Facts or Circumstances; Disclosure

  	
   

  	
  34

  
	
  3.1.38

  	
   

  	
  Management Agreement

  	
   

  	
  34

  
	
  3.1.39

  	
   

  	
  Perfection of Accounts

  	
   

  	
  34

  
	
  Section 3.2

  	
   

  	
  Survival of Representations

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  BORROWER COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Borrower Affirmative Covenants

  	
   

  	
  35

  
	
  4.1.1

  	
   

  	
  Existence; Compliance with Legal Requirements

  	
   

  	
  35

  
	
  4.1.2

  	
   

  	
  Taxes and Other Charges

  	
   

  	
  36

  
	
  4.1.3

  	
   

  	
  Litigation

  	
   

  	
  36

  
	
  4.1.4

  	
   

  	
  Access to Property

  	
   

  	
  36

  
	
  4.1.5

  	
   

  	
  Further Assurances; Supplemental Mortgage Affidavits

  	
   

  	
  36

  
						

 

ii

 

	
  4.1.6

  	
   

  	
  Financial Reporting

  	
   

  	
  37

  
	
  4.1.7

  	
   

  	
  Title to the Property

  	
   

  	
  38

  
	
  4.1.8

  	
   

  	
  Estoppel Statement

  	
   

  	
  38

  
	
  4.1.9

  	
   

  	
  Leases

  	
   

  	
  39

  
	
  4.1.10

  	
   

  	
  Alterations

  	
   

  	
  41

  
	
  4.1.11

  	
   

  	
  Intentionally Omitted

  	
   

  	
  41

  
	
  4.1.12

  	
   

  	
  Material Agreements

  	
   

  	
  41

  
	
  4.1.13

  	
   

  	
  Performance by Borrower

  	
   

  	
  41

  
	
  4.1.14

  	
   

  	
  Costs of Enforcement/Remedying Defaults

  	
   

  	
  42

  
	
  4.1.15

  	
   

  	
  Business and Operations

  	
   

  	
  42

  
	
  4.1.16

  	
   

  	
  Loan Fees

  	
   

  	
  42

  
	
  4.1.17

  	
   

  	
  O&M Program

  	
   

  	
  42

  
	
  4.1.18

  	
   

  	
  Intentionally Omitted

  	
   

  	
  42

  
	
  Unfunded Tenant Allowances

  	
   

  	
  42

  
	
  Section 4.2

  	
   

  	
  Borrower Negative Covenants

  	
   

  	
  42

  
	
  4.2.1

  	
   

  	
  Due on Sale and Encumbrance; Transfers of Interests

  	
   

  	
  42

  
	
  4.2.2

  	
   

  	
  Liens

  	
   

  	
  43

  
	
  4.2.3

  	
   

  	
  Dissolution

  	
   

  	
  43

  
	
  4.2.4

  	
   

  	
  Change in Business

  	
   

  	
  43

  
	
  4.2.5

  	
   

  	
  Debt Cancellation

  	
   

  	
  43

  
	
  4.2.6

  	
   

  	
  Affiliate Transactions

  	
   

  	
  43

  
	
  4.2.7

  	
   

  	
  Zoning

  	
   

  	
  43

  
	
  4.2.8

  	
   

  	
  Assets

  	
   

  	
  44

  
	
  4.2.9

  	
   

  	
  No Joint Assessment

  	
   

  	
  44

  
	
  4.2.10

  	
   

  	
  Principal Place of Business

  	
   

  	
  44

  
	
  4.2.11

  	
   

  	
  ERISA

  	
   

  	
  44

  
	
  4.2.12

  	
   

  	
  Material Agreements

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  INSURANCE, CASUALTY AND
  CONDEMNATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  Insurance

  	
   

  	
  45

  
	
  5.1.1

  	
   

  	
  Insurance Policies

  	
   

  	
  45

  
	
  5.1.2

  	
   

  	
  Insurance Company

  	
   

  	
  49

  
	
  Section 5.2

  	
   

  	
  Casualty and Condemnation

  	
   

  	
  49

  
	
  5.2.1

  	
   

  	
  Casualty

  	
   

  	
  49

  
	
  5.2.2

  	
   

  	
  Condemnation

  	
   

  	
  50

  
	
  5.2.3

  	
   

  	
  Casualty Proceeds

  	
   

  	
  50

  
	
  Section 5.3

  	
   

  	
  Delivery of Net Proceeds

  	
   

  	
  51

  
	
  5.3.1

  	
   

  	
  Minor Casualty or Condemnation

  	
   

  	
  51

  
	
  5.3.2

  	
   

  	
  Major Casualty or Condemnation

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  RESERVE FUNDS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
   

  	
  Intentionally Omitted

  	
   

  	
  54

  
	
  Section 6.2

  	
   

  	
  Tax Funds

  	
   

  	
  54

  
	
  6.2.1

  	
   

  	
  Deposits of Tax Funds

  	
   

  	
  54

  

 

iii

 

	
  6.2.2

  	
   

  	
  Release of Tax Funds

  	
   

  	
  55

  
	
  Section 6.3

  	
   

  	
  Insurance Funds

  	
   

  	
  55

  
	
  6.3.1

  	
   

  	
  Deposits of Insurance Funds

  	
   

  	
  55

  
	
  6.3.2

  	
   

  	
  Release of Insurance Funds

  	
   

  	
  55

  
	
  6.3.3

  	
   

  	
  Waiver of Insurance Funds

  	
   

  	
  55

  
	
  Section 6.4

  	
   

  	
  Capital Expenditure Funds

  	
   

  	
  56

  
	
  6.4.1

  	
   

  	
  Deposits of Capital Expenditure Funds

  	
   

  	
  56

  
	
  6.4.2

  	
   

  	
  Release of Capital Expenditure Funds

  	
   

  	
  56

  
	
  Section 6.5

  	
   

  	
  Intentionally Omitted

  	
   

  	
  57

  
	
  Section 6.6

  	
   

  	
  Lease Termination Rollover Funds

  	
   

  	
  57

  
	
  6.6.1

  	
   

  	
  Deposits of Lease Termination Rollover Funds

  	
   

  	
  57

  
	
  6.6.2

  	
   

  	
  Release of Lease Termination Rollover Funds

  	
   

  	
  58

  
	
  Section 6.7

  	
   

  	
  Unfunded Tenant Allowances Fund

  	
   

  	
  59

  
	
  Section 6.8

  	
   

  	
  Intentionally Omitted

  	
   

  	
  60

  
	
  Section 6.9

  	
   

  	
  Application of Reserve Funds

  	
   

  	
  60

  
	
  Section 6.10

  	
   

  	
  Security Interest in Reserve Funds

  	
   

  	
  60

  
	
  6.10.1

  	
   

  	
  Grant of Security Interest

  	
   

  	
  60

  
	
  6.10.2

  	
   

  	
  Income Taxes

  	
   

  	
  60

  
	
  6.10.3

  	
   

  	
  Prohibition Against Further Encumbrance

  	
   

  	
  60

  
	
  Section 6.11

  	
   

  	
  Letters of Credit

  	
   

  	
  60

  
	
  6.11.1

  	
   

  	
  Delivery of Letters of Credit

  	
   

  	
  60

  
	
  Section 6.12

  	
   

  	
  Provisions Regarding Letters of Credit

  	
   

  	
  61

  
	
  6.12.1

  	
   

  	
  Security for Debt

  	
   

  	
  61

  
	
  6.12.2

  	
   

  	
  Additional Rights of Lender

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  PROPERTY MANAGEMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
   

  	
  The Management Agreement

  	
   

  	
  62

  
	
  Section 7.2

  	
   

  	
  Prohibition Against Termination or Modification

  	
   

  	
  62

  
	
  Section 7.3

  	
   

  	
  Replacement of Manager

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  PERMITTED TRANSFERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
   

  	
  Permitted Transfer of the Property

  	
   

  	
  63

  
	
  Section 8.2

  	
   

  	
  Permitted Transfers of Interest in Borrower

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  SALE AND SECURITIZATION OF
  MORTGAGE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1

  	
   

  	
  Sale of Mortgage and Securitization

  	
   

  	
  65

  
	
  Section 9.2

  	
   

  	
  Securitization Indemnification

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  DEFAULTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1

  	
   

  	
  Event of Default

  	
   

  	
  70

  
	
  Section 10.2

  	
   

  	
  Remedies

  	
   

  	
  72

  
	
  Section 10.3

  	
   

  	
  Right to Cure Defaults

  	
   

  	
  73

  

 

iv

 

	
  Section 10.4

  	
   

  	
  Remedies Cumulative

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1

  	
   

  	
  Successors and Assigns

  	
   

  	
  74

  
	
  Section 11.2

  	
   

  	
  Lender’s Discretion

  	
   

  	
  74

  
	
  Section 11.3

  	
   

  	
  Governing Law

  	
   

  	
  74

  
	
  Section 11.4

  	
   

  	
  Modification, Waiver in Writing

  	
   

  	
  76

  
	
  Section 11.5

  	
   

  	
  Delay Not a Waiver

  	
   

  	
  76

  
	
  Section 11.6

  	
   

  	
  Notices

  	
   

  	
  76

  
	
  Section 11.7

  	
   

  	
  Trial by Jury

  	
   

  	
  77

  
	
  Section 11.8

  	
   

  	
  Headings

  	
   

  	
  77

  
	
  Section 11.9

  	
   

  	
  Severability

  	
   

  	
  78

  
	
  Section 11.10

  	
   

  	
  Preferences

  	
   

  	
  78

  
	
  Section 11.11

  	
   

  	
  Waiver of Notice

  	
   

  	
  78

  
	
  Section 11.12

  	
   

  	
  Remedies of Borrower

  	
   

  	
  78

  
	
  Section 11.13

  	
   

  	
  Expenses; Indemnity

  	
   

  	
  78

  
	
  Section 11.14

  	
   

  	
  Schedules Incorporated

  	
   

  	
  79

  
	
  Section 11.15

  	
   

  	
  Offsets, Counterclaims and Defenses

  	
   

  	
  79

  
	
  Section 11.16

  	
   

  	
  No Joint Venture or Partnership; No Third Party
  Beneficiaries

  	
   

  	
  80

  
	
  Section 11.17

  	
   

  	
  Publicity

  	
   

  	
  80

  
	
  Section 11.18

  	
   

  	
  Waiver of Marshalling of Assets

  	
   

  	
  80

  
	
  Section 11.19

  	
   

  	
  Waiver of Offsets/Defenses/Counterclaims

  	
   

  	
  80

  
	
  Section 11.20

  	
   

  	
  Conflict; Construction of Documents; Reliance

  	
   

  	
  80

  
	
  Section 11.21

  	
   

  	
  Brokers and Financial Advisors

  	
   

  	
  81

  
	
  Section 11.22

  	
   

  	
  Exculpation

  	
   

  	
  81

  
	
  Section 11.23

  	
   

  	
  Prior Agreements

  	
   

  	
  83

  
	
  Section 11.24

  	
   

  	
  Servicer

  	
   

  	
  83

  
	
  Section 11.25

  	
   

  	
  Joint and Several Liability

  	
   

  	
  84

  
	
  Section 11.26

  	
   

  	
  Creation of Security Interest

  	
   

  	
  84

  
	
  Section 11.27

  	
   

  	
  Assignments and Participations

  	
   

  	
  84

  
	
  Section 11.28

  	
   

  	
  Security Interest in Parking Lease

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule I

  	
  –

  	
  Rent Roll

  	
   

  	
   

  
	
  Schedule II

  	
  –

  	
  Intentionally Omitted

  	
   

  	
   

  
	
  Schedule III

  	
  –

  	
  Organizational Chart

  	
   

  	
   

  
	
  Schedule IV

  	
  –

  	
  Form of Subordination, Non-Disturbance and Attornment
  Agreement

  	
   

  	
   

  
	
  Schedule V

  	
  –

  	
  Intentionally Omitted

  	
   

  	
   

  
	
  Schedule VI

  	
  –

  	
  Unfunded Tenant Allowances

  	
   

  	
   

  
	
  Schedule VII

  	
  –

  	
  Physical Condition Report

  	
   

  	
   

  
								

 

v

 

LOAN
AGREEMENT

 

THIS
LOAN AGREEMENT, dated as of January 30, 2006 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”), by and between LEHMAN
BROTHERS BANK FSB, a federal stock savings bank, having an address at 399 Park
Avenue, 8th Floor, New York, New York 10022 (“Lender”),
and 200 SOUTH WACKER PROPERTY LLC, a Delaware limited liability company, having
an address c/o Beacon Capital Partners, LLC at One Federal Street, 26th
Floor, Boston, Massachusetts 02110 (“Borrower”).

 

All
capitalized terms used herein shall have the respective meanings set forth in
Article I hereof.

 

W
I  T  N  E  S  S  E  T  H
:

 

WHEREAS,
Borrower desires to obtain the Loan from Lender; and

 

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

 

NOW,
THEREFORE, in consideration of the covenants set forth in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby 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 provided:

 

“Accounts” shall have the meaning
ascribed thereto in the Cash Management Agreement.

 

“Affiliate” shall mean, as to any
Person, any other Person that, directly or indirectly, (i) owns more than forty
percent (40%) of such Person or (ii) is in control of, is controlled by or is
under common ownership or control with such Person. As used in this definition,
the term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management, policies or activities of a Person, whether through ownership of
voting securities, by contract or otherwise.

 

“Agent” shall mean the agent under
the Cash Management Agreement and any successor Eligible Institution thereto.

 

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

 

“Alteration Security” shall have the
meaning set forth in Section 4.1.10.

 

 

“Alteration Threshold” shall mean
three percent (3%) of the outstanding principal amount of the Loan.

 

“Annual Budget” shall mean the
operating and capital budget for the Property setting forth Borrower’s good faith
estimate of Gross Revenue, Operating Expenses, and Capital Expenditures for the
applicable Fiscal Year.

 

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

 

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

 

“Bankruptcy Code” shall mean Title
11 of the United States Code entitled “Bankruptcy,” as amended from time to
time, and any successor statute or statutes and all rules and regulations from
time to time promulgated thereunder, and, to the extent applicable, any
comparable foreign laws relating to bankruptcy, insolvency or creditors’
rights.

 

“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.

 

“Beacon Entity” shall mean Beacon
Capital Strategic Partners IV, L.P., a Delaware limited partnership.

 

“Borrower” shall have the meaning
set forth in the preamble to this Agreement, together with its permitted successors
and assigns.

 

“Business Day” shall mean any day
other than a Saturday, a Sunday or a legal holiday on which national banks are
not open for general business in (i) the State of New York, (ii) the state
where the corporate trust office of the Trustee is located, or (iii) the state
where the servicing offices of the Servicer are located.

 

“Capital Expenditures” for any
period shall mean amounts expended for or in connection with replacements and
alterations to the Property and required to be capitalized according to GAAP.

 

“Capital Expenditure Funds” shall
have the meaning set forth in Section 6.4.1.

 

“Capital Expenditures Work” shall
mean any labor performed or materials installed in connection with any Capital
Expenditure.

 

“Cash Management Agreement” shall
mean that certain Cash Management Agreement dated as of the date hereof among
Lender, Borrower, Manager and Agent.

 

2

 

“Casualty” shall mean the occurrence
of any casualty, damage or injury, by fire or otherwise, to the Property or any
part thereof.

 

“Casualty Consultant” shall have the
meaning set forth in Section 5.3.2(c).

 

“Casualty Retainage” shall have the
meaning set forth in Section 5.3.2(d).

 

“Clearing Account” shall have the
meaning set forth in the Cash Management Agreement.

 

“Clearing Account Agreement” shall
mean that certain Deposit Account Control Agreement dated as of the date hereof
among Lender, Borrower and Clearing Bank.

 

“Clearing Bank” shall mean Bank of
America, N.A. and any successor Eligible Institution thereto.

 

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

 

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

 

“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.

 

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

 

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

 

“Debt Service Coverage Ratio” shall
mean the ratio of (i) Net Operating Income for the twelve (12) calendar month
period immediately preceding the date of calculation to (ii) the projected Debt
Service that would be due for the twelve (12) calendar month period immediately
following such calculation; provided, that the “Debt Service
Coverage Ratio” (x) with respect to the quarter ending March 31, 2006, shall be
calculated by annualizing Net Operating Income for the three (3) calendar month
period immediately preceding the date of calculation, (y) with respect to the
quarter ending June 30, 2006, shall be calculated by annualizing Net Operating
Income for the six (6) calendar month period immediately preceding the date of
calculation and (z) with respect to the quarter ending September 30, 2006,
shall be calculated by annualizing Net Operating Income for the nine (9)
calendar month period immediately preceding the date of calculation.

 

3

 

“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 a rate per
annum equal to the lesser of (i) the maximum rate permitted by applicable law,
or (ii) three percent (3%) above the Interest Rate.

 

“Deposit Account” shall have the
meaning set forth in the Cash Management Agreement.

 

“Disclosure Document” shall have the
meaning set forth in Section 9.2(a).

 

“DSCR Trigger Event” shall mean that
the Debt Service Coverage Ratio has dropped below 1.10:1.00.

 

“Elevator Renovation Program” shall
mean the elevator modernization program for the elevators at the Property,
which may include, among other things, replacement or upgrades of elevator cabs
and controls.

 

“Eligible Account” shall mean an
identifiable account which is separate from all other funds held by the holding
institution that is either (a) an account or accounts (or subaccounts thereof)
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 (or subaccounts thereof) maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, in the
case of a state chartered depository institution or trust company is subject to
regulations substantially similar to 12 C.F.R. §9.10(b), having in either case
a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal and state authority. An Eligible Account
will not be evidenced by a certificate of deposit, passbook or other
instrument.

 

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

 

“Environmental Indemnity” shall mean
that certain Environmental Indemnity Agreement dated as of the date hereof,
executed by Borrower and Guarantor 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.

 

“Environmental Report” shall mean
that certain Report on ASTM Phase I Environmental Site Assessment, Drinking
Water Sampling, Asbestos Survey and IAQ Assessment, 200 South Wacker Drive,
Chicago, Illinois, prepared by Haley & Aldrich, Inc., File No. 32879-000,
dated December 13, 2005.

 

4

 

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

 

“ERISA” shall have the meaning set
forth in Section 4.2.11.

 

“Escrow Reserve Period” means any period
commencing on the first Business Day after the occurrence of the Escrow Reserve
Trigger Event through (i) if the Escrow Reserve Trigger Event was the
occurrence of an Event of Default, the first Business Day after Lender’s
determination, in its reasonable judgment, that such Event of Default no longer
exists, and/or (ii) if the Escrow Reserve Trigger Event was a DSCR Trigger
Event, the first Business Day after the Debt Service Coverage Ratio becomes
equal to or greater than 1.10:1.00.

 

“Escrow Reserve Trigger Event” shall mean the
occurrence and continuance of any one or more of the following events: (i) an
Event of Default or (ii) a DSCR Trigger Event.

 

“Event of Default” shall have the
meaning set forth in Section 10.1.

 

“Exchange Act” shall have the
meaning set forth in Section 9.2(a).

 

“Exchange Act Filing” shall have the
meaning set forth in Section 9.1(c).

 

“Excusable Delay” shall mean a delay
due to acts of God, governmental restrictions, stays, judgments, orders,
decrees, enemy actions, civil commotion, fire, casualty, strikes, work
stoppages, shortages of labor or materials or other causes beyond the
reasonable control of Borrower, but lack of funds in and of itself shall not be
deemed a cause beyond the control of Borrower.

 

“Extraordinary Expense” shall mean
an extraordinary operating expense or extraordinary capital expenditure
incurred by Borrower which is not set forth in the Annual Budget.

 

“Fiscal Year” shall mean each twelve
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 set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the accounting profession), or in such other statements by
such entity as may be in general use by significant segments of the U.S.
accounting profession.

 

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

 

5

 

“Gross Revenue” shall mean, as
calculated in accordance with GAAP, all revenue, derived from the ownership and
operation of the Property from whatever source, including, but not limited to,
Rents (excluding Rents from Tenants more than ninety (90) days in arrears under
their respective Leases), but excluding sales, use and occupancy or other taxes
on receipts required to be accounted for by Borrower to any Governmental
Authority, non-recurring revenues as determined by Lender, proceeds from the
sale or refinancing of the Property, security deposits (except to the extent
reasonably determined by Lender to be properly utilized to offset a loss of
Rent), refunds and uncollectible accounts, proceeds of casualty insurance and
Awards (other than business interruption or other loss of income insurance
related to business interruption or loss of income for the period in question),
and any disbursements to Borrower from the Reserve Funds or any other reserve
fund established by the Loan Documents.

 

“Guarantor” shall mean Beacon Entity
in its capacity as guarantor under the Guaranty and as the indemnitor under the
Environmental Indemnity, or any other Person approved by Lender (or, if a
Securitization has occurred, approved by the Rating Agencies and reasonably
approved by Lender).

 

“Guaranty” shall mean, collectively,
the Guaranty of Recourse Obligations and the Limited Guaranty.

 

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

 

“Health Club Documents” shall have
the meaning set forth in Section 3.1.24(c).

 

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

 

“Indebtedness”
shall mean, for any Person, without duplication: (i) all indebtedness of such
Person for borrowed money, for amounts drawn under a letter of credit, or for
the deferred purchase price of property for which such Person or its assets is
liable, (ii) all unfunded amounts under a loan agreement, letter of credit, or
other credit facility for which such Person would be liable if such amounts
were advanced thereunder, (iii) all amounts required to be paid by such Person
as a guaranteed payment to partners, including any mandatory redemption of
shares or interests but excluding any preferred return or special dividend paid
solely from, and to the extent of, excess cash flow after the payment of
operating expenses, capital improvements and debt service on all indebtedness,
(iv) all indebtedness guaranteed by such Person, directly or indirectly, (v)
all obligations under leases that constitute capital leases for which such
Person is liable, and (vi) all obligations of such Person under interest rate
swaps, caps, floors, collars and other interest hedge agreements, in each case
whether such Person is liable contingently or otherwise, as obligor, guarantor
or otherwise, or in respect of which obligations such Person otherwise assures
a creditor against loss.

 

“Indemnified Liabilities” shall have
the meaning set forth in Section 11.13(b).

 

“Independent Director” shall have
the meaning set forth in Section 3.1.24(p).

 

6

 

“Insolvency Opinion” shall mean that
certain bankruptcy non-consolidation opinion letter dated the date hereof and
delivered by Goulston & Storrs, P.C., in connection with the Loan.

 

“Insurance Funds” shall have the
meaning set forth in Section 6.3.1.

 

“Insurance Premiums” shall have the
meaning set forth in Section 5.1.1(b).

 

“Interest Rate” shall mean a rate
per annum equal to 5.525%.

 

“Investment Grade Rating” shall mean
a long-term unsecured debt rating of at least “BBB-” by Fitch and S&P and “Baa3”
by Moody’s.

 

“Late Payment Charge” shall have the
meaning set forth in Section 2.3.4.

 

“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 Real 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, other than (i) subleases or sub-subleases
in which Borrower has no interest and (ii) easements, reciprocal easement
agreements and similar agreements.

 

“Lease Termination Fee” shall have
the meaning set forth in Section 6.6.1.

 

“Lease Termination Rollover Funds”
shall have the meaning set forth in Section 6.6.1.

 

“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 Borrower or 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, including, without limitation,
the Americans with Disabilities Act of 1990, 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 as being intended to be of record, at any time in force
affecting the Property or any part thereof, including, without limitation, any
which may (i) require repairs, modifications or alterations in or to the
Property or any part thereof, or (ii) in any way limit the use and enjoyment
thereof.

 

“Lehman Brothers” shall have the
meaning set forth in Section 9.2(b).

 

“Lehman Brothers Group” shall have
the meaning set forth in Section 9.2(b).

 

“Lender” shall mean Lehman Brothers
Bank FSB, together with its successors and assigns.

 

7

 

“Lender Indemnitees” shall have the
meaning set forth in Section 11.13(b).

 

“Letter of Credit” shall mean an
irrevocable, unconditional, transferable, clean sight draft letter of credit
acceptable to Lender (either an evergreen letter of credit or one which does
not expire until at least thirty (30) Business Days after the Maturity Date) in
favor of Lender and entitling Lender to draw thereon in New York, New York,
issued by a domestic Eligible Institution or the U.S. agency or branch of a
foreign Eligible Institution. If at any time the bank issuing any such Letter
of Credit shall cease to be an Eligible Institution, Lender shall provide
notice thereof to Borrower and if Borrower shall fail to provide Lender a
replacement Letter of Credit from an Eligible Institution within ten (10) days
from receipt of such written notice from Lender, Lender shall have the right
immediately to draw down the same in full and hold the proceeds of such draw in
accordance with the applicable provisions hereof.

 

“Liabilities” shall have the meaning
set forth in Section 9.2(b).

 

“Lien” shall mean any mortgage, deed
of trust, lien, pledge, hypothecation, assignment, security interest, or any
other encumbrance, charge of, on or affecting the Property or any portion
thereof, or any interest therein or Borrower 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.

 

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

 

“Loan” shall mean the loan in the
original principal amount of Ninety-Five Million Five Hundred Thousand and
No/100 Dollars ($95,500,000.00) made by Lender to Borrower pursuant to this
Agreement.

 

“Loan Amount” shall mean
$95,500,000.00.

 

“Loan Documents” shall mean,
collectively, this Agreement, the Note, the Mortgage, the Assignment of Leases,
the Cash Management Agreement, the Clearing Account Agreement, the
Environmental Indemnity, the Guaranty, the Subordination of Management
Agreement and any other documents now or hereafter executed and/or delivered by
Borrower or its Affiliates in connection with the Loan, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

“Major Lease” shall mean any Lease
(i) covering more than 30,000 square feet at the Property or (ii) made with a
Tenant that is a Tenant under another Lease at the Property or that is an
Affiliate of any other Tenant under a Lease at the Property, if the Leases
together cover more than 30,000 square feet.

 

“Management Agreement” shall mean
that certain Management Agreement dated as of January 18, 2006, by and between
Borrower and Manager, pursuant to which Manager is to provide management and
other services with respect to the Property.

 

8

 

“Manager” shall mean BCSP IV
Illinois Property Manager LLC, a Delaware limited liability company, or a
wholly owned subsidiary thereof or any other manager approved in accordance
with the terms and conditions of Section 7.3 hereof.

 

“Material Adverse Effect” shall mean
any event or condition that has a material adverse effect on (i) the business,
prospects, profits, operations or financial condition of Borrower, (ii) the
ability of Borrower to perform its obligations under each Loan Document and to
repay the principal and interest of the Debt as it becomes due and/or (iii) the
enforceability or validity of any Loan Document or the perfection or priority
of any Lien created under any of the Loan Documents.

 

“Material Agreements” means each
contract and agreement relating to the ownership, management, development, use,
operation, leasing, maintenance, repair or improvement of the Property other
than (i) the Management Agreement, (ii) the Leases, (iii) contracts or
agreements for tenant improvements at the Property, provided such contracts or
agreements are on commercially reasonable terms, (iv) service contracts, and
(v) contracts and agreements (x) which are terminable on thirty (30) days’ or
less notice without payment of any material termination fee or penalty, (y)
under which Borrower is not obligated to pay more than $500,000 per annum or
(z) under which Lender or its designee would not be directly or indirectly
bound in the event that Lender or its designee succeeded to the ownership of
the Property as the result of a foreclosure or a deed in lieu thereof.

 

“Maturity Date” shall mean February
11, 2011 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.

 

“Mezzanine Borrower” shall mean the
borrower under the Mezzanine Loan.

 

“Mezzanine Collection Account” shall
have the meaning set forth in the Cash Management Agreement.

 

“Mezzanine Lender” shall mean the
lender or lenders which may hereafter make the Mezzanine Loan to Mezzanine
Borrower. The Mezzanine Lender shall at all times be a Qualified Mezzanine
Lender.

 

“Mezzanine Loan” shall mean the
mezzanine loan, if any, made by Mezzanine Lender to Mezzanine Borrower pursuant
to the terms of Section 2.6 hereof, which Mezzanine Loan shall only be
permitted in accordance with the terms of Section 2.6 hereof.

 

“Mezzanine Loan Agreement” shall
mean the mezzanine loan agreement which evidences and governs the Mezzanine
Loan between Mezzanine Lender and Mezzanine

 

9

 

Borrower, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

“Minimum Disbursement Amount” shall
mean Twenty Five Thousand and No/100 Dollars ($25,000).

 

“Monthly Capital Expenditures Deposit”
shall have the meaning set forth in Section 6.4.1.

 

“Monthly Debt Service Payment Amount”
shall have the meaning set forth in Section 2.3.1.

 

“Monthly Payment Date” shall mean
the eleventh (11th) day of every calendar month occurring during the
term of the Loan.

 

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

 

“Mortgage” shall mean that certain
first priority Mortgage, Assignment of Leases and Rents and Security Agreement,
dated as of the date hereof, executed and delivered by Borrower 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 Operating Income” shall mean
Gross Revenues less Operating Expenses.

 

“Net Proceeds” shall mean: (i) the
net amount of all insurance proceeds payable as a result of a Casualty to the
Property, after deduction of reasonable costs and expenses (including, but not
limited to, reasonable attorneys’ fees), if any, in collecting such insurance
proceeds, or (ii) the net amount of the Award, after deduction of reasonable
costs and expenses (including, but not limited to, reasonable attorneys’ fees),
if any, in collecting such Award.

 

“Net Proceeds Deficiency” shall have
the meaning set forth in Section 5.3.2(f).

 

“Non-Reporting Event” shall mean the
entire principal balance of the Loan has been placed into one or more
Securitizations, and the issuers of all such Securitizations are no longer
required to file periodic reports under the Exchange Act.

 

“Note”
shall have the meaning set forth in Section 2.1.3.

 

“Notice” shall have the meaning set
forth in Section 11.6.

 

“Officer’s Certificate” shall mean a
certificate delivered to Lender by Borrower which is signed by an authorized
officer of Borrower.

 

“Operating Agreements” shall mean
any covenants, restrictions or agreements of record relating to the
construction, operation or use of the Property.

 

“Operating Expenses” shall mean, as
calculated in accordance with GAAP, all costs and expenses relating to the
operation, maintenance and management of the Property,

 

10

 

including, without limitation, utilities, repairs and
maintenance, insurance, property taxes and assessments, advertising expenses,
payroll and related taxes, equipment lease payments and the annual management
fee, but excluding actual Capital Expenditures, leasing costs, depreciation,
amortization, Extraordinary Expenses, deposits required to be made to the Reserve
Funds and Debt Service; provided, however, such costs and expenses shall be
subject to adjustment by Lender to normalize such costs and expenses.

 

“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.

 

“Parking Lease” shall mean that
certain Lease dated as of May 28, 1981, as amended by that certain First
Amendment to Lease dated as of June 6, 1991, between Borrower and Mercantile
Financial Center, LLC, an Illinois limited liability company (successor in
interest to LaSalle National Bank, not personally, but as Trustee under Trust
Agreement dated May 15, 1981 and known as Trust No. 103973 and LaSalle National
Bank, not personally, but as Trustee under Trust Agreement dated May 10, 1981
and known as Trust No. 104020), relating to a certain garage space located at
250 South Wacker Drive, Chicago, Illinois.

 

“Otherwise Rated Insurer” shall have
the meaning set forth in Section 5.1.2.

 

“Permitted Encumbrances” shall mean,
collectively, (i) the Liens and security interests created by the Loan
Documents, (ii) all Liens, encumbrances and other matters disclosed in the
Title Insurance Policy, (iii) Liens, if any, for Taxes or Other Charges imposed
by any Governmental Authority not yet due or delinquent, (iv) Leases and
equipment leases (or equipment lease financings) existing as of the date
hereof, (v) Leases and equipment leases (or equipment lease financings) entered
into after the date hereof in accordance with the terms of the Loan Documents,
and (vi) such other title and survey exceptions as Lender has approved or may
approve in writing in Lender’s reasonable discretion.

 

“Permitted Investments” shall have
the meaning set forth in the Cash Management Agreement.

 

“Permitted Transferee” shall mean
any of the following entities (for purposes of this definition, “control” means the ability to control the day to day and
general management decisions regarding the Property):

 

(i)            a
pension fund, pension trust or pension account that immediately prior to such
transfer (a) owns, directly or indirectly, total real estate assets of at least
$800,000,000 and (b) is managed by a Person who controls at least $800,000,000
of real estate assets;

 

(ii)           a
pension fund advisor who (a) immediately prior to such transfer, controls,
directly or indirectly, at least $800,000,000 of real estate assets and (b) is
acting on behalf of one or more pension funds that, in the aggregate, satisfy
the requirements of clause (i) of this definition;

 

11

 

(iii)          an insurance company which is subject to
supervision by the insurance commissioner, or a similar official or agency, of
a state or territory of the United States (including the District of Columbia)
(a) with a net worth, determined as of a date no more than six (6) months prior
to the date of the transfer of at least $400,000,000 and (b) who, immediately
prior to such transfer, controls, directly or indirectly, real estate assets of
at least $800,000,000;

 

(iv)          a
corporation organized under the banking laws of the United States or any state
or territory of the United States (including the District of Columbia) (a) with
a combined capital and surplus of at least $400,000,000 and (b) who,
immediately prior to such transfer, controls, directly or indirectly, real
estate assets of at least $800,000,000;

 

(v)           any Person (a) with an Investment Grade Rating
from each of the Rating Agencies, (b) who has a net worth, determined as of a
date no more than six (6) months prior to the date of such transfer, of at
least $400,000,000 and (c) who,
immediately prior to such transfer, controls, directly or indirectly, real
estate assets of at least $800,000,000; or

 

(vi)          any
Person in which fifty one percent (51%) of the ownership interests are owned
directly or indirectly by any of the entities listed in subsections (i) through
(v) of this definition of “Permitted Transferee”,
or any combination of more than one such entity, and which is controlled
directly or indirectly by such entity or entities.

 

“Person” shall mean any individual,
corporation, partnership, limited liability company, joint venture, estate,
trust, unincorporated association, any other entity, 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 Condition Report” shall
mean that certain physical condition report set forth on Schedule VII
hereto.

 

“Policies” shall have the meaning
specified in Section 5.1.1(b).

 

“Prepayment Date” shall mean the
date on which the Loan is fully or partially prepaid in accordance with the
terms hereof.

 

“Prescribed Laws” shall mean, collectively,
(a) the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)
(The USA PATRIOT Act), (b) Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism,
(c) the International Emergency Economic Power Act, 50 U.S.C. §1701 et seq. and
(d) all other Legal Requirements relating to money laundering or terrorism.

 

“Property” shall mean the parcel of
real property located at 200 S. Wacker Drive in Chicago, Illinois, the
Improvements thereon and all personal property owned by Borrower,

 

12

 

and encumbered by the Mortgage, together with all
rights pertaining to such property and Improvements, all as more particularly
described on the Granting Clause of the Mortgage.

 

“Purchase Agreement” shall mean that
certain Purchase and Sale Agreement, dated as of November 23, 2005, between 200
South Wacker Drive, L.L.C., as seller, and Borrower, as purchaser, as amended
by four (4) amendments dated as of December 13, 2005, December 21, 2005,
January 9, 2006, and January 17, 2006.

 

“Qualified Manager” shall mean a
property manager which manages at least 6,000,000 square feet of Class A office
space in major metropolitan areas, at least 1,500,000 square feet of which
shall be located in the Chicago Metropolitan area (excluding the Property).

 

“Qualified Mezzanine Lender” shall
mean one or more of the following: (i) a real estate investment trust, bank,
saving and loan association, investment bank, insurance company, trust company,
commercial credit corporation, pension plan, pension fund or pension advisory
firm, mutual fund, government entity or plan, (ii) investment company, money
management firm or “qualified institutional buyer” within the meaning of Rule
144A under the Securities Act of 1933, as amended, or an institutional “accredited
investor” within the meaning of Regulation D under the Securities Act of 1933,
as amended, which is regularly engaged in the business of making or owning
loans of similar types to the Mezzanine Loan or the Loan, (iii) a Qualified
Trustee in connection with a securitization of, or the creation of collateralized
debt obligations (“CDO”)
secured by or financing through an “owner trust” of, the Mezzanine Loan, so
long as (A) the special servicer or manager of such securitization, CDO or
trust has the Required Special Servicer Rating, (B) the “controlling class” of
such securitization vehicle is held by a Qualified Mezzanine Lender and (C) the
operative documents of the related securitization vehicle, CDO or financing
must require that (1) the “controlling class” or “equity interest” in such
securitization vehicle or CDO are owned by a Qualified Transferee or a
Permitted Investment Fund and (2) if any of the relevant trustee, special
servicer, manager or controlling class fails to meet the requirements of such
clause, such entity must be replaced by a qualifying entity within 30 days,
(iv) an investment fund, limited liability company, limited partnership or
general partnership (a “Permitted Investment Fund”)
where a Qualified Mezzanine Lender or a Permitted Fund Manager acts as the
general partner, managing member or fund manager and at least 50% of the equity
interests in such Permitted Investment Fund are owned, directly or indirectly,
by one or more of the following: a Qualified Mezzanine Lender, an institutional
“accredited investor”, within the meaning of Regulation D promulgated under the
Securities Act of 1933, as amended, and/or a “qualified institutional buyer” or
both within the meaning of Rule 144A promulgated under the Securities Exchange
Act of 1934 (provided each institutional “accredited investor” or “qualified
institutional buyer” meets the test set forth in clause (vi) (A) below), as
amended, (v) any other lender or entity (including any opportunity funds)
regularly engaged in the business of making mezzanine loans which has been
approved as a Qualified Mezzanine Lender hereunder by the Rating Agencies, or
(vi) an institution substantially similar to any of the foregoing entities
described in clauses (i) or (ii) of this definition, and as to each of the
entities described in clauses (i), (ii) and (vi) provided such entity (A) has
total assets (in name or under management) in excess of $1,000,000,000 and
(except with respect to a pension advisory firm or similar fiduciary)
capital/statutory surplus or shareholder’s equity of $500,000,000; and (B) is
regularly engaged in the business of making or owning commercial real estate
loans or commercial loans secured by a pledge of interests in a

 

13

 

mortgage borrower or owning and operating commercial
real property or (vii) any entity controlled (as defined below) by any one or
more of the entities described in clause (i) through (vi) of this definition. For
purposes of this definition only, “control” means the ownership, directly or
indirectly, in the aggregate of more than fifty percent (50%) of the beneficial
ownership interest of an entity and the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of an
entity, whether through the ability to exercise voting power, by contract or
otherwise. A “Qualified Trustee” means (i) a
corporation, national bank, national banking association or a trust company,
organized and doing business under the laws of any state or the United States
of America, authorized under such laws to exercise corporate trust powers and
to accept the trust conferred, having a combined capital and surplus of at
least $100,000,000 and subject to supervision or examination by federal or
state authority, (ii) an institution insured by the Federal Deposit Insurance
Corporation or (iii) an institution whose long-term senior unsecured debt is
rated either of the then in effect top two rating categories of S&P and
either Fitch or Moody’s (provided, however, if the Loan has been securitized,
the rating requirement of any agency not a Rating Agency will be disregarded). “Required Special Servicer Rating”  means a special servicer rating of “CSS1” in the case of
Fitch, a servicer on its approved list of special servicers in the case of
S&P and, in the case of Moody’s, a special servicer that is acting as
special servicer in a commercial mortgage loan securitization that was rated by
Moody’s within the six month period prior to the date of determination and
Moody’s has not downgraded or withdrawn the then-current rating on any class of
commercial mortgage securities or placed any class of commercial mortgage
securities on watch citing the continuation of such special servicer as special
servicer of such commercial mortgage securities (provided, however, the
requirement of any agency not a Rating Agency shall be disregarded). “Permitted Fund Manager” means any
entity which is not subject to a bankruptcy proceeding and (a) as determined by
Lender has been approved from time to time by the Rating Agencies as the
general partner, managing member or fund manager of a Permitted Investment
Fund, or (b) is a nationally - recognized manager of investment funds investing
in debt or equity interests relating to commercial real estate which is
investing through a fund which has committed capital of at least $500,000,000.

 

“Rating Agencies” shall mean, prior
to the final Securitization of the Loan, each of S&P, Moody’s and Fitch, or
any other nationally recognized statistical rating agency which has been
designated by Lender and, after the final Securitization of the Loan, shall
mean any of the foregoing that have rated any of the Securities.

 

“Rating Agency Confirmation” shall
mean a written affirmation from each of the Rating Agencies that the credit
rating of the Securities by such Rating Agency immediately prior to the
occurrence of the event with respect to which such Rating Agency Confirmation
is sought will not be qualified, downgraded or withdrawn as a result of the
occurrence of such event.

 

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

 

“Registration Statement” shall have
the meaning set forth in Section 9.2(b).

 

14

 

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

 

“Related Loan” means a loan made to
an Affiliate of Borrower or secured by a Related Property, that is included in
a Securitization with the Loan.

 

“Related Property” means a parcel 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 one or more Properties.

 

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

 

“Rent Deficiency” shall have the
meaning set forth in Section 6.6.2.

 

“Rents” shall mean all rents, moneys
payable as damages or in lieu of rent, revenues, deposits (including, without
limitation, security, utility and other deposits), accounts, cash, issues,
profits, charges for services rendered, and other consideration of whatever
form or nature received by or paid to or for the account of or benefit of
Borrower or Manager from any and all sources arising from or attributable to
the Property.

 

“Replacement Lease” shall have the
meaning set forth in Section 6.6.2.

 

“Reserve Funds” shall mean,
collectively, Capital Expenditure Funds, the Insurance Funds, the Tax Funds,
the Lease Termination Rollover Funds and Unfunded Tenant Allowance Funds.

 

“Restoration” shall have the meaning
set forth in Section 5.2.1.

 

“Restoration Threshold” shall mean
three percent (3%) of the outstanding principal amount of the Loan.

 

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

 

“Secondary Market Transaction” shall
have the meaning set forth in Section 9.1(a).

 

“Securities” shall have the meaning
set forth in Section 9.1(a).

 

“Securities Act” shall have the
meaning set forth in Section 9.2(a).

 

“Securitization” shall have the
meaning set forth in Section 9.1(a).

 

“Servicer” shall have the meaning
set forth in Section 11.24.

 

“Servicing Agreement” shall have the
meaning set forth in Section 11.24.

 

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

 

15

 

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

 

“Specified Sections” shall have the
meaning set forth in Section 9.2(b).

 

“SPC Party” shall have the meaning
set forth in Section 3.1.24(o).

 

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

 

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

 

“Survey” shall mean the 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 Funds” shall have the meaning
set forth in Section 6.2.1.

 

“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, together
with all interest and penalties thereon.

 

“Tenant” shall mean any Person
obligated by contract or otherwise to pay monies (including a percentage of
gross income, revenue or profits) under any Lease now or hereafter affecting
all or any part of the Property.

 

“Termination Space” shall have the
meaning set forth in Section 6.6.1.

 

“Terrorism Coverage Amount” shall
have the meaning set forth in Section 5.1.1(a)(xi).

 

“Title Insurance Policy” shall mean
an ALTA mortgagee title insurance policy in the form acceptable to Lender
issued with respect to the Property and insuring the lien of the Mortgage.

 

“Transfer” shall have the meaning
set forth in the Mortgage.

 

“Trustee”
shall mean any trustee holding the Loan in a Securitization.

 

“UCC” or “Uniform
Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State.

 

“Underwriter Group” shall have the
meaning set forth in Section 9.2(b).

 

16

 

“Unfunded Tenant Allowances”
shall mean the amounts specifically set forth in any Lease as a payment to or
on behalf of, or a reimbursement due to, a tenant from Borrower, and
specifically set forth on Schedule VI.

 

“Unfunded Tenant Allowance
Account” shall have the meaning set forth in Section 6.7
hereof.

 

“Unfunded Tenant Allowance Reserve Funds”
shall have the meaning set forth in Section 6.7 hereof.

 

“Updated Information” shall have the
meaning set forth in Section 9.1(b)(i).

 

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

 

“UTA Leases” shall have the meaning
set forth in Section 6.7.

 

“Yield Maintenance Premium” shall
mean an amount equal to the present value as of the Prepayment Date of the
Calculated Payments from the Prepayment Date through November 11, 2010
determined by discounting such payments at the Discount Rate. As used in this
definition, the term “Calculated Payments”
shall mean the monthly payments of interest only which would be due based on
the principal amount of the Loan being prepaid on the Prepayment Date and
assuming an interest rate per annum equal to the difference (if such difference
is greater than zero) between (y) the Interest Rate and (z) the Yield
Maintenance Treasury Rate. As used in this definition, the term “Discount Rate” shall mean the rate
which, when compounded monthly, is equivalent to the Yield Maintenance Treasury
Rate, when compounded semi-annually. As used in this definition, the term “Yield Maintenance Treasury Rate”
shall mean the yield calculated by Lender by the linear interpolation of the
yields, as reported in the Federal Reserve Statistical Release H.15-Selected
Interest Rates under the heading U.S. Government Securities/Treasury Constant
Maturities for the week ending prior to the Prepayment Date, of U.S. Treasury
Constant Maturities with maturity dates (one longer or one shorter) most nearly
approximating November 11, 2010. In the event Release H.15 is no longer
published, Lender shall select a comparable publication to determine the Yield
Maintenance Treasury Rate. In no event, however, shall Lender be required to
reinvest any prepayment proceeds in U.S. Treasury obligations or otherwise.

 

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. 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.

 

17

 

II.                                     THE
LOAN

 

Section 2.1            The Loan.

 

2.1.1       Agreement to Lend and
Borrow.  Subject to and upon the
terms and conditions set forth herein, Lender has made the Loan to Borrower and
Borrower has accepted the Loan from Lender.

 

2.1.2       Single Disbursement to
Borrower.  Borrower shall receive
no further borrowings 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.  The Loan shall be evidenced by that certain
Promissory Note of even date herewith, in the stated principal amount of
Ninety-Five Million Five Hundred Thousand and No/100 Dollars ($95,500,000.00)
executed by Borrower and payable to the order of Lender in evidence of the Loan
(as the same may hereafter be amended, supplemented, restated, increased,
extended or consolidated from time to time, the “Note”)
and shall be repaid in accordance with the terms of this Agreement and the
Note.

 

2.1.4       Use of Proceeds.  Borrower shall use proceeds of the Loan to
(i) acquire the Property, including, without limitation, acquisition
transaction costs, (ii) pay and discharge any existing loans relating to the
Property, (iii) pay all past-due Basic Carrying Costs, if any, in respect of
the Property, (iv) deposit the Reserve Funds, to the extent applicable, (v) pay
costs and expenses incurred in connection with the closing of the Loan incurred
by Lender, (vi) fund any working capital requirements of the Property, as
approved by Lender and (vii) retain the balance, if any.

 

2.1.5       Components.  Lender shall have the right from time to time
prior to a Securitization to modify the Loan in order to create components of
the Note and/or component notes, to reduce the number of components and/or
component notes, to reallocate the principal balances of the components and/or
the component notes or to eliminate any component structure of the Loan
provided that (a) the total principal balance of the Loan immediately after the
effective date of such modification equals the outstanding principal balance of
the Loan immediately prior to such modification, (b) the weighted average of
the interest rates for all components of the Loan at all times after the
effective date of such modification equals the weighted average of the interest
rates for all components immediately prior to such modification (except
following the application of Net Proceeds as provided in Section 2.4.2
below), and (c) there are no other changes to the economic terms of the Loan
Documents, or any increase in Borrower’s obligations or decrease in Borrower’s
rights under the Loan Documents. Lender shall have the right to modify the Note
and the components in accordance with this Section 2.1.5 upon prior
notice to Borrower (in which event such modification shall then be deemed
effective). Lender shall provide certified copies of any modification of the
Note and the components to Borrower. If requested by Lender, Borrower shall
promptly execute an amendment to this Agreement and the Note to evidence such
modification.

 

18

 

Section 2.2            Interest Rate.

 

2.2.1       Interest Rate.  Interest on the outstanding principal balance
of the Loan shall accrue from the date hereof up to but excluding the Maturity
Date at the Interest Rate.

 

2.2.2       Intentionally Omitted.

 

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, overdue
interest in respect of the Loan, 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       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 (that is, the Interest Rate
or the Default Rate, as then applicable, expressed as an annual rate divided by
360) by (c) the outstanding principal balance. The accrual period for
calculating interest due on each Monthly Payment Date shall be the period from
the eleventh (11th) day of the calendar month immediately prior to
such Monthly Payment Date through and including the tenth (10th) day
of the calendar month in which such Monthly Payment Date occurs.

 

2.2.5       Usury Savings.  This Agreement and the other Loan Documents
are subject to the express condition that at no time shall Borrower be 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 not exceed the Maximum
Legal Rate from time to time in effect and applicable to the Loan for so long
as the Loan is outstanding.

 

Section 2.3            Loan Payments.

 

2.3.1       Payment Before Maturity
Date.  Commencing on the Monthly
Payment Date occurring in March 2006 and on each Monthly Payment Date
thereafter to and including the Maturity Date, Borrower shall make a payment
(the “Monthly Debt Service Payment Amount”)
to Lender of interest only in arrears at the Interest Rate based on the
outstanding amount of the Loan. Provided no Event of Default shall have
occurred and be continuing, each payment shall be applied to the accrued and
unpaid interest on the Loan.

 

2.3.2       Intentionally Omitted.

 

19

 

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 sum
due Lender under the Loan Documents, other than the payment of principal due on
the Maturity Date, is not paid by Borrower on the date on which it is due,
Borrower shall pay to Lender upon demand an amount equal to the lesser of three
percent (3%) of such unpaid sum or the maximum amount permitted by applicable
law (a “Late Payment Charge”) in order
to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Mortgage and the
other Loan Documents.

 

2.3.5       Method and Place of
Payment.  (a)  Except as otherwise specifically provided
herein, all payments and prepayments under this Agreement and the Note shall be
made to Lender not later than 1:00 p.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, 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. Solely for purposes of determining
whether an Event of Default has occurred or a Late Payment Charge is payable,
payments from the Accounts shall be deemed to be made, provided sufficient
funds are on deposit in the Accounts for the purposes intended on the date such
payments are due and Borrower has not attempted to prevent or delay any
disbursement by Agent of any such amounts from the Accounts.

 

(b)           Whenever
any payment to be made hereunder or under any other Loan Document shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be the Business Day immediately preceding such day.

 

(c)           All
payments required to be made by Borrower hereunder or under the Note or the
other Loan Documents shall be made irrespective of, and without deduction for,
any setoff, claim or counterclaim and shall be made irrespective of any defense
thereto.

 

2.3.6       Payments After Event of
Default.  Any amounts received by
Lender following the occurrence and continuance of an Event of Default shall be
applied by Lender toward the payment of interest and/or principal of Loan
and/or any other amounts due under the Loan Documents in such order, priority
and proportions as Lender in its sole discretion shall deem proper.

 

Section 2.4            Prepayments.

 

2.4.1       Voluntary Prepayments.  Except as otherwise provided herein, Borrower
shall not have the right to prepay the Loan in whole or in part. Borrower may,
at its option, prepay the Debt in whole (but not in part), provided the
following conditions are satisfied: (a) no Event of Default has occurred and is
continuing; (b) Borrower provides Lender with not less than fifteen (15) days
prior notice of the date of such prepayment (or such shorter period of time as

 

20

 

may be permitted by Lender in its sole discretion);
(c) such prepayment is made on a Monthly Payment Date; (d) if such prepayment
is made prior to the Monthly Payment Date in November 2010, Borrower shall also
pay to Lender the Yield Maintenance Premium; provided, however, if such
prepayment is made on or after the Monthly Payment Date in November 2010, no
Yield Maintenance Premium shall be payable by Borrower to Lender; and (e) if
any prepayment is received by Lender on a date other than a Monthly Payment
Date, such prepayment shall include interest which would have accrued thereon
to the next Monthly Payment Date and such amounts (i.e., principal and interest
prepaid by Borrower) shall be held by Lender as collateral security for the
Loan in an interest bearing account at an Eligible Institution, with interest
accruing on such amounts to the benefit of Borrower, and such amounts prepaid
shall be applied to the Loan on the next Monthly Payment Date, with any
interest on such funds paid to Borrower on such date provided no Event of
Default then exists.

 

2.4.2       Mandatory Prepayments.  On each date on which Lender actually
receives a distribution of Net Proceeds, and if Lender is not required to make
such Net Proceeds available to Borrower for a Restoration in accordance with Section 5.3
hereof, Borrower shall, at Lender’s option, prepay the outstanding principal
balance of the Loan in an amount equal to one hundred percent (100%) of such
Net Proceeds together with interest that would have accrued on such amounts
through the next Monthly Payment Date and shall have the option to prepay the
remaining outstanding principal balance of the Loan together with accrued
interest thereon within 180 days of Lender’s determination to apply Net
Proceeds to the Loan. The full amount of any such prepayment shall be applied
to the Loan and any amount of such prepayment in excess of that required to pay
the Debt in full shall be distributed in the following order of priority: (i)
if any portion of the Mezzanine Loan, if any, is outstanding, to the Mezzanine
Lender to be applied in accordance with the Mezzanine Loan Agreement, and (ii)
if no portion of any Mezzanine Loan is outstanding, to Borrower. No Yield
Maintenance Premium shall be due in connection with any prepayment made
pursuant to this Section 2.4.2. Any prepayment received by Lender
pursuant to this Section 2.4.2 on a date other than a Monthly
Payment Date shall be held by Lender as collateral security for the Loan in an
interest bearing account, with such interest accruing to the benefit of
Borrower, and shall be applied by Lender on the next Monthly Payment Date.

 

2.4.3       Prepayments After
Default.  If after the occurrence
and during the continuance of an Event of Default, payment of all or any part
of the principal of the Loan is tendered by Borrower, a purchaser at
foreclosure or any other Person, such tender shall be deemed an attempt to
circumvent the prohibition against prepayment set forth in Section 2.4.1
and Borrower, such purchaser at foreclosure or other Person shall pay to Lender
the outstanding principal balance of the Loan, all accrued and unpaid interest
thereon, all other amounts payable under the Loan Documents, plus, if any such
prepayment is made prior to November 11, 2010, a payment equal to the greater
of (a) one percent (1%) of the outstanding principal amount being prepaid or
(b) the Yield Maintenance Premium. The full amount of any such prepayment shall
be applied by Lender toward the payment of interest and/or principal of the
Loan and/or any other amounts due under the Loan Documents in such order,
priority and proportions as Lender in its sole discretion shall deem proper.

 

21

 

Section 2.5            Release.

 

2.5.1       Release of Property.  Except as set forth in this Section 2.5,
no repayment or prepayment of all or any portion of the Note shall cause, give
rise to a right to require, or otherwise result in, the release of any Lien of
the Mortgage on the Property. Lender shall, upon the written request and at the
expense of Borrower, upon payment in full of all principal and interest on the
Loan and all other amounts due and payable under the Loan Documents in
accordance with the terms and provisions of the Note, this Agreement and the
other Loan Documents, release or assign (without recourse, representation or
warranty) the Liens of the Mortgage and other Loan Documents on the Property.

 

Section 2.6            Permitted Mezzanine
Loan.

 

2.6.1       Mezzanine Loan.  Notwithstanding anything to the contrary
contained herein or in any other Loan Document, on or after February 11, 2008,
Mezzanine Borrower shall be permitted to incur the Mezzanine Loan provided the
following conditions are satisfied:

 

(i)            Lender receives
written notice from Borrower that Mezzanine Borrower intends to incur the
Mezzanine Loan at least thirty (30) days prior to the closing of such Mezzanine
Loan.

 

(ii)           No Event of Default has
occurred and is continuing on the date Lender receives notice of such Mezzanine
Loan and on the date that Mezzanine Lender makes the Mezzanine Loan to
Mezzanine Borrower.

 

(iii)          The principal amount of
the Mezzanine Loan shall not exceed Ten Million Dollars ($10,000,000), and the
full amount of the proceeds from the Mezzanine Loan shall be used solely to
improve the Property.

 

(iv)          The Mezzanine Lender
that makes the Mezzanine Loan shall be a Qualified Mezzanine Lender.

 

(v)           The Debt Service
Coverage Ratio, calculated as of the last day of the month immediately
preceding the date of the closing of the Mezzanine Loan, will not be less than
1.25:1.00 (which calculation shall include the prospective debt service on the
Mezzanine Loan).

 

(vi)          The loan-to-value ratio,
the numerator of which is the sum of (A) the outstanding principal amount of
the Loan and (B) the principal amount of the Mezzanine Loan, and the
denominator of which is equal to the then current appraised value of the
Property (based on updated appraisal obtained by Borrower at Borrower’s sole
cost and expense and reasonably acceptable to Lender), shall be no greater than
eighty percent (80%).

 

(vii)         The Mezzanine Loan shall
be subject to the approval of the Lender, not to be unreasonably withheld, and,
if all or any portion of the Loan has been included in a Securitization,
Borrower shall have delivered to Lender a Rating Agency Confirmation with
respect to the Mezzanine Loan.

 

22

 

(viii)        The collateral for the
Mezzanine Loan shall include only pledges of the equity interests in Borrower,
any accounts established under a separate mezzanine cash management arrangement
(which shall not include the Accounts, and shall not include any portion of the
Property or any other collateral securing the Loan), and one or more guaranties
(other than from Borrower).

 

(ix)           The Mezzanine Loan
shall be subordinate in all respects to the Loan.

 

(x)            The Mezzanine Loan
shall not be cross-defaulted or cross-collateralized with any other properties
or loans (other than the Loan).

 

(xi)           Mezzanine Lender shall
enter into an intercreditor agreement with Lender in form and substance
reasonably acceptable to Lender and meeting then current Rating Agency
criteria.

 

(xii)          The Mezzanine Loan shall
be coterminous with the Loan.

 

(xiii)         If the Mezzanine Loan
bears interest at a variable rate, the Mezzanine Borrower shall have obtained
and shall maintain during the term of the Loan an interest rate cap from a
counterparty reasonably acceptable to Lender and the Rating Agencies with a
fixed strike price and an interest rate spread such that the blended, weighted
average interest rate of (A) the aggregate of such strike price and such spread
and (B) the Interest Rate is no greater than eight and a quarter percent
(8.25%) per annum.

 

(xiv)        If the Mezzanine Loan
bears interest at a fixed rate, the blended, weighted average interest rate of
(A) such fixed rate and (B) the Interest Rate shall be no greater than eight
and a quarter percent (8.25%) per annum.

 

(xv)         Interest shall be due and
payable monthly in the same manner as the Loan and, if the Mezzanine Loan is a
variable rate loan, such spread shall not be subject to adjustment, or, if the
Mezzanine Loan is a fixed rate loan, such interest rate shall not be subject to
adjustment.

 

(xvi)        Mezzanine Borrower
satisfies such other conditions as are customary in connection with mezzanine
loans and delivers such other documents, agreements, certificates and legal
opinions (including but not limited to a revised Insolvency Opinion which shall
be in form, scope and substance reasonably acceptable in all respects to Lender
and the Rating Agencies) as Lender shall reasonably request;

 

(xvii)       Borrower shall execute any
amendments to the Loan Documents that Lender shall reasonably require in order
to evidence the Mezzanine Loan and any opinions that Lender shall reasonably require
in connection with such amendments, including, without limitation, applicable
due execution and enforceability opinions.

 

(xviii)      the Mezzanine Borrower and
any other pledgors, if any, of interests in Borrower, shall be structured into
the organizational structure of Borrower in a manner such as not to adversely
affect the bankruptcy remote nature of Borrower and shall comply with Rating

 

23

 

Agency criteria,
and all organizational documents of Borrower shall be revised to the reasonable
satisfaction of Lender.

 

(xix)         All reasonable costs and
expenses (including reasonable attorneys’ fees and any fees charged by the
Rating Agencies and any servicers) incurred by Lender in connection with this Section
2.6 shall be paid by Borrower.

 

III.                                 REPRESENTATIONS
AND WARRANTIES

 

Section 3.1            Borrower
Representations.  Borrower represents
and warrants that:

 

3.1.1       Organization.  (a) Borrower is duly organized, validly
existing and in good standing with full power and authority to own its assets
and conduct its business, and is duly qualified in all jurisdictions in which
the ownership or lease of its property or the conduct of its business requires
such qualification, except where the failure to be so qualified would not have
a material adverse effect on its ability to perform its obligations hereunder,
and Borrower has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the other Loan Documents by it,
and has the power and authority to execute, deliver and perform under this
Agreement, the other Loan Documents and all the transactions contemplated
hereby.

 

(b)           Borrower’s
exact legal name is correctly set forth in the first paragraph of this
Agreement. Borrower is an organization of the type specified in the first
paragraph of this Agreement. Borrower is incorporated or organized under the
laws of the state specified in the first paragraph of this Agreement. 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 of recording, including software, writings,
plans, specifications and schematics, has been for the preceding four (4) months
(or, if less than four (4) months, the entire period of the existence of
Borrower) and will continue to be the address of Borrower set forth in the
first 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 its
incorporation or organization is 4073309. Borrower’s federal tax identification
number is 57-1227334. Borrower is not subject to back-up withholding taxes.

 

3.1.2       Proceedings.  This Agreement and the other Loan Documents
to which Borrower or any of its Affiliates is a party have been duly
authorized, executed and delivered by Borrower and/or any such Affiliates and
constitute a legal, valid and binding obligation of Borrower and/or any such
Affiliates, enforceable against Borrower and/or any such Affiliates in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally, and by general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

 

3.1.3       No Conflicts.  The execution and delivery of this Agreement
and the other Loan Documents by Borrower and the performance of its obligations
hereunder and thereunder

 

24

 

will not conflict with any provision of any law or regulation to which
Borrower is subject, or conflict with, result in a breach of, or constitute a
default under, any of the terms, conditions or provisions of any of Borrower’s
organizational documents or any agreement or instrument to which Borrower is a
party or by which it is bound, or any order or decree applicable to Borrower,
or result in the creation or imposition of any lien on any of Borrower’s assets
or property (other than pursuant to the Loan Documents).

 

3.1.4       Litigation.  There is no action, suit, proceeding or investigation
pending or, to Borrower’s knowledge, threatened against Borrower in any court
or by or before any other Governmental Authority which would materially and
adversely affect the ability of Borrower to carry out the transactions
contemplated by this Agreement.

 

3.1.5       Agreements.  To the best of Borrower’s knowledge, Borrower
is not in default with respect to any order or decree of any court or any
order, regulation or demand of any Governmental Authority, which default might
have consequences that would materially and adversely affect the condition
(financial or other) or operations of Borrower or its properties or might have
consequences that would materially adversely affect its performance hereunder.

 

3.1.6       Consents.  No consent, approval, authorization or order
of any court or Governmental Authority is required for the execution, delivery
and performance by Borrower of, or compliance by Borrower with, this Agreement
or the consummation of the transactions contemplated hereby, other than those
which have been obtained by Borrower or those, the failure to obtain, would not
have a Material Adverse Effect.

 

3.1.7       Title.  Borrower has good, marketable and insurable
fee simple title to the real property comprising part of the Property and good
title to the balance of the Property owned by it, free and clear of all Liens
whatsoever except the Permitted Encumbrances. The Mortgage and Assignment of
Leases, when properly recorded in the appropriate records, together with any
Uniform Commercial Code financing statements required to be filed in connection
therewith, will create (i) a valid, first priority, perfected lien on the Real
Property, subject only to Permitted Encumbrances and (ii) perfected security
interests in and to, and perfected collateral assignments of, all Leases and,
to the extent such security interests may be perfected by the filing of
financing statements, all personalty, all in accordance with the terms thereof,
in each case subject only to any Permitted Encumbrances. There are no mechanics’,
materialman’s or other similar liens or claims which have been filed for work,
labor or materials affecting the Property which are or may be liens prior to,
or equal or coordinate with, the lien of the Mortgage. None of the Permitted
Encumbrances, individually or in the aggregate, materially interfere with the
benefits of the security intended to be provided by the Mortgage and this Loan
Agreement, materially and adversely affect the value of the Property,
materially impair the use or operations of the Property or impair Borrower’s
ability to pay its obligations in a timely manner.

 

3.1.8       No Plan Assets.  As of the date hereof and throughout the term
of the Loan (a) Borrower is not and will not be an “employee benefit plan,” as
defined in Section 3(3) of ERISA, subject to Title I of ERISA, (b) 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, (c)
Borrower is not and will not be a “governmental plan” within the meaning of
Section 3(32) of ERISA, and (d) transactions by or with Borrower are not
and will

 

25

 

not be subject to any state statute regulating investments of, or
fiduciary obligations with respect to, governmental plans.

 

3.1.9       Compliance.  To the best of 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 and Prescribed Laws. Borrower is not in default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority, the violation of which might materially adversely affect the
condition (financial or otherwise) or business of Borrower. Borrower has not
committed any act which may give any Governmental Authority the right to cause
Borrower to forfeit the Property or any part thereof or any monies paid in
performance of Borrower’s obligations under any of the Loan Documents.

 

3.1.10     Financial Information.  To the best of 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 its
capacity as “lender” hereunder, by Borrower in respect of the Property are
true, complete and correct in all material respects. 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, except as
referred to or reflected in said financial statements. Since the date of the
financial statements, there has been no material adverse change in the
financial condition, operations or business of Borrower or the Property from
that set forth in said financial statements.

 

3.1.11     Condemnation.  To the best of Borrower’s knowledge, 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.

 

3.1.12     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 reasonably adequate to service the Property for its
intended uses.

 

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

 

3.1.14     Assessments.  To the best of Borrower’s knowledge, there
are no pending or proposed special or other assessments for public improvements
or otherwise affecting the Property, nor are there any contemplated
improvements to the Property that may result in such special or other
assessments.

 

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

 

26

 

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

 

3.1.16     Assignment of Leases.  The Assignment of Leases creates a valid
assignment of, or a valid security interest in, certain rights under the
Leases, subject only to Permitted Encumbrances and a license granted to
Borrower to exercise certain rights and to perform certain obligations of the
lessor under the Leases, including, without limitation, the right to operate
the Property. No Person other than Borrower and Lender has any interest in or
assignment of the Leases or any portion of the Rents due and payable or to
become due and payable thereunder.

 

3.1.17     Insurance.  Borrower has obtained and has delivered to
Lender certificates of insurance, with all premiums paid thereunder, reflecting
the insurance coverages, amounts and other requirements set forth in this
Agreement. No claims have been made under any of the Policies with respect to
the Property or Borrower, and none of Borrower, its Affiliates or, to the best
of Borrower’s knowledge, any other Person, has done, by act or omission,
anything which would impair the coverage of any of the Policies.

 

3.1.18     Licenses.  To the best of Borrower’s knowledge, all
material permits and approvals, including without limitation, certificates of
occupancy (if applicable) required by any Governmental Authority for the use,
occupancy and operation of the Property in the manner in which the Property is
currently being used, occupied and operated have been obtained and are in full
force and effect.

 

3.1.19     Flood Zone.  None of the Improvements on the Property is
located in an area identified by the Federal Emergency Management Agency as a
special flood hazard area.

 

3.1.20     Physical Condition.  Except as may otherwise be disclosed in the
Physical Condition Report and the Environmental Report delivered to Lender in
connection with the underwriting of the Loan, to the best of Borrower’s
knowledge, the Property, including, without limitation, all buildings, improvements,
parking facilities, sidewalks, storm 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, whether latent or otherwise, and Borrower has not received
written 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.

 

3.1.21     Boundaries.  Except as may otherwise be shown on the
Survey, all of the Improvements which were included in determining the
appraised value of the Property lie wholly within the boundaries and building
restriction lines of the Property, and no improvements on adjoining properties
encroach upon the Property, and no easements or other encumbrances affecting
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
title insurance.

 

27

 

3.1.22     Leases.  Borrower represents and warrants to Lender
with respect to the Leases (except as may otherwise be disclosed in any Tenant or
seller estoppel certificate delivered to Lender on or prior to the date hereof)
that: (a) the rent roll with respect to the Property attached hereto as Schedule
I is true, complete and correct and the Property is not subject to any
Leases other than the Leases described in Schedule I, (b) the Leases
identified on Schedule I are in full force and effect and, to the best
of Borrower’s knowledge and except as set forth on Schedule I, there are
no material defaults thereunder by either party, (c) the copies of the Leases
delivered to Lender are true and complete, (d) except as set forth on Schedule
I, no Rent (including security deposits) has been paid more than one (1)
month in advance of its due date, (e) all work to be performed by Borrower
under each Lease has been performed as required (other than work which is not
required to be completed as of the Closing Date) and, to the best of Borrower’s
knowledge, has been accepted by the applicable Tenant, (f) except as set forth
on Schedule I, 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, and (g) all
security deposits are being held in accordance with Legal Requirements.

 

3.1.23     Filing and Recording Taxes.  All transfer taxes, deed stamps, intangible
taxes or other amounts in the nature of transfer taxes required to be paid
under applicable Legal Requirements in connection with the transfer of the
Property to Borrower have been paid or are being paid simultaneously herewith. All
mortgage, mortgage recording, stamp, intangible or other similar tax required
to be paid under applicable Legal Requirements 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 or are being paid simultaneously herewith. All taxes
and governmental assessments due and owing in respect of the Property have been
paid, or an escrow of funds in an amount sufficient to cover such payments has
been established hereunder or are insured against by the title insurance policy
to be issued in connection with the Mortgage.

 

3.1.24     Single Purpose.  Borrower hereby represents and warrants to,
and covenants with, Lender that as of the date hereof and until such time as
the Debt shall be paid in full:

 

(a)           Borrower
does not own and will not own any asset or property other than (i) the
Property, (ii) incidental personal property necessary for the ownership or
operation of the Property and (iii) Permitted Investments, cash and cash
equivalents.

 

(b)           Borrower
will not engage in any business other than the ownership, management and
operation of the Property and Borrower will conduct and operate its business as
presently conducted and operated.

 

(c)           Borrower
will not enter into any contract or agreement with any Affiliate of Borrower,
any constituent party of Borrower or any Affiliate of any such constituent
party, except upon terms and conditions that are commercially reasonable and
substantially similar to those that would be available on an arms-length basis
with third parties other than any such party, and Borrower represents and
warrants that the terms and conditions of the Lease and Master Supervisory
Agreement entered into between Borrower and one or more of its Affiliates

 

28

 

relating to the
health club facilities at the Property (collectively, the “Health Club
Documents”) meet the requirements of this clause (c) in light of the
economics of the health club facilities at the Property and the REIT rules
affecting (directly or indirectly) Borrower.

 

(d)           Borrower
has not incurred and will not incur any Indebtedness other than (i) the Debt,
(ii) unsecured trade payables and operational debt not evidenced by a note and
(iii) Indebtedness incurred in the financing of equipment and other personal
property used on the Property; provided that any Indebtedness incurred pursuant
to subclauses (ii) and (iii) shall be (x) not more than sixty (60) days past
due, (y) incurred in the ordinary course of business and (z) not more than
three percent (3%) of the outstanding principal amount of the Loan at any one
time. No Indebtedness other than the Debt may be secured (subordinate or pari
passu) by the Property, except that any permitted equipment financing or
equipment lease may be secured by such equipment.

 

(e)           Borrower
has not made and will not make any loans or advances to any other Person (including
any Affiliate or constituent party), and shall not acquire obligations or
securities of its Affiliates or owners.

 

(f)            Borrower
is and will remain solvent and Borrower will pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) from its
assets as the same shall become due.

 

(g)           Borrower
has done or caused to be done and will do all things necessary to observe all
applicable organizational formalities and preserve its existence, and Borrower
will not, nor will Borrower permit any constituent party to amend, modify or
otherwise change the partnership certificate, partnership agreement, articles
of incorporation and bylaws, operating agreement, trust or other organizational
documents of Borrower without the prior consent of Lender in any manner that
(i) violates or is inconsistent with any of the single purpose covenants set
forth in this Section 3.1.24, or (ii) amends, modifies or otherwise
changes any provision thereof that by its terms cannot be modified at any time
when the Loan is outstanding or by its terms cannot be modified without Lender’s
consent.

 

(h)           Borrower
will maintain all of its books, records, financial statements and bank accounts
separate from those of its Affiliates and any other Person. Borrower’s assets
will not be listed as assets on the financial statement of any other Person,
provided, however, Borrower’s assets may be included in a consolidated
financial statement of any Affiliate provided that (i) inclusion on such
consolidated financial statement is in accordance with the requirements of GAAP
(or such other accounting method reasonably acceptable to Lender), (ii) such
consolidated financial statement shall contain a footnote to the effect that
Borrower’s assets are owned by Borrower and (iii) such assets are listed on
Borrower’s own separate balance sheet. Borrower will file its own tax returns
unless Borrower is a tax-disregarded entity not required to file tax returns
under applicable law and if Borrower is a corporation will not file a consolidated
federal income tax return with any other Person. Borrower shall maintain its
books, records, resolutions and agreements as official records.

 

(i)            Borrower
will be, and at all times will hold itself out to the public as, a legal entity
separate and distinct from any other entity (including any Affiliate of
Borrower or

 

29

 

any constituent
party of Borrower), shall correct any known misunderstanding regarding its
status as a separate entity, shall conduct business in its own name, shall not
identify itself or any of its Affiliates as a division or part of the other and
shall maintain and utilize separate stationery, invoices and checks bearing its
own name.

 

(j)            Borrower
will 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.

 

(k)           Neither
Borrower nor any constituent party will seek or effect the liquidation,
dissolution, winding up, consolidation or merger, in whole or in part, of
Borrower.

 

(l)            Borrower
will not commingle the funds and other assets of Borrower with those of any
Affiliate or constituent party or any other Person, and will hold all of its
assets in its own name.

 

(m)          Borrower
has and will maintain its assets in such a manner that it will not be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any Affiliate or constituent party or any other Person.

 

(n)           Borrower
will not guarantee or become obligated for the debts of any other Person and
does not and will not hold itself out to be responsible for or have its credit
available to satisfy the debts or obligations of any other Person.

 

(o)           (i)
If Borrower is a limited partnership or a limited liability company (other than
a single member limited liability company), each general partner or managing
member (each, an “SPC Party”)
shall be a corporation whose sole asset is its interest in Borrower and each
such SPC Party will at all times comply, and will cause Borrower to comply,
with each of the representations, warranties, and covenants contained in this Section 3.1.24
as if such representation, warranty or covenant was made directly by such SPC
Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower,
Borrower shall immediately appoint a new SPC Party whose articles of
incorporation are substantially similar to those of such SPC Party and deliver
a new non-consolidation opinion to the Rating Agency or Rating Agencies, as
applicable, with respect to the new SPC Party and its equity owners.

 

(ii)           If
Borrower is a single member Delaware limited liability company, Borrower shall
at all times have either a Delaware corporation or two (2) Independent
Directors as Borrower’s springing member(s) which, upon the dissolution of the
sole member of Borrower or the withdrawal or the disassociation of the sole
member from Borrower, shall immediately become the sole member(s) of Borrower.

 

(p)           Borrower
shall at all times cause there to be at least two duly appointed members of the
board of directors of each SPC Party (if any) or, if Borrower is a single
member Delaware limited liability company, at least two duly appointed managers
of Borrower who in each case are provided by a nationally recognized company
that provides professional independent directors (each, an “Independent Director”) who shall
not have been at the time of such individual’s appointment or at any time while
serving as a director of such SPC Party or manager of such Borrower, and may
not have been at any time during the preceding five years

 

30

 

(i) a stockholder,
director (other than as an Independent Director of such SPC party), officer,
manager (other than as Independent Director of Borrower, if Borrower is a
single member limited liability company), employee, partner, member, attorney
or counsel of such SPC Party, Borrower or any Affiliate of any of them, (ii) a
creditor, customer, supplier or other Person who derives any of its purchases
or revenues from its activities with such SPC Party, Borrower or any Affiliate
of either of them (other than a Person provided to serve as Independent
Director by a company that provides professional independent directors or other
general corporate services to Borrower, such SPC Party or any Affiliate of
either of them), (iii) a Person or other entity controlling or under common
control with any such stockholder, partner, customer, supplier or other Person,
or (iv) a member of the immediate family of any such stockholder, director,
officer, employee, partner, customer, supplier or other Person. As used in this
definition, the term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management, policies or
activities of a Person, whether through ownership of voting securities, by
contract or otherwise. A natural person who satisfies the foregoing definition
except for being the independent director or manager of an Affiliate of Borrower
and/or of a SPC Party shall not be disqualified from serving as an Independent
Director of Borrower or SPC Party, as applicable, if such Affiliate is a
special purpose entity that does not own a direct or indirect equity interest
in Borrower or any co-borrower with Borrower, if any, and if such individual is
an independent director provided by a nationally-recognized company that
provides professional independent directors. For purposes of this paragraph, a “special
purpose entity” is an entity, whose organizational documents contain
restrictions on its activities substantially similar to those set forth in this
Section 3.1.24.

 

(q)           Borrower
shall not cause or permit the board of directors of any SPC Party or Borrower
to take any action which, under the terms of any certificate of incorporation,
by-laws or any voting trust agreement with respect to any common stock or under
any organizational document of Borrower or SPC Party, requires a unanimous vote
of the board of directors of SPC Party and/or Borrower unless at the time of
such action there shall be at least two members who are each an Independent
Director.

 

(r)            Borrower
shall conduct its business so that the assumptions made with respect to
Borrower in the Insolvency Opinion shall be true and correct in all material
respects. In connection with the foregoing, Borrower hereby covenants and
agrees that it will comply with or cause the compliance with, (i) all of the
facts and assumptions (whether regarding Borrower or any other Person) set
forth in the Insolvency Opinion, (ii) all the representations, warranties and
covenants in this Section 3.1.24, and (iii) all the organizational
documents of Borrower and any SPC Party.

 

(s)           Borrower
will not permit any Affiliate or constituent party independent access to its
bank accounts, other than Manager (including its authorized employees) in
accordance with the Management Agreement.

 

(t)            Borrower
shall pay the salaries of its own employees (if any) from its own funds and
maintain a sufficient number of employees (if any) in light of its contemplated
business operations.

 

31

 

(u)           Borrower
shall compensate each of its consultants and agents from its funds for services
provided to it and pay from its own assets all obligations of any kind
incurred.

 

(v)           Borrower
shall allocate fairly and reasonably any overhead expenses that are shared with
any Affiliate, including for shared office space and for services performed by
any employee of an Affiliate.

 

(w)          Borrower
shall not pledge its assets for the benefit of any other Person (other than (x)
to Lender with respect to the Loan and (y) equipment secured by permitted
equipment financings or equipment leases) and Borrower shall not engage in any
sale or transfer of its assets outside the ordinary course of its business or
in violation of this Agreement and the other Loan Documents.

 

(x)            Borrower
shall not buy or hold evidence of indebtedness issued by any other Person
(other than cash and investment-grade securities).

 

(y)           Borrower
shall not form, acquire or hold any subsidiary or own any equity interest in
any other entity.

 

(z)            Neither
Borrower nor SPC Party shall, without the affirmative vote of the managing
member and the board of directors of Borrower or of such SPC Party, as
applicable, including both Independent Directors of Borrower or of SPC Party,
as applicable:

 

(i)            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, on behalf of Borrower or of SPC Party;

 

(ii)           Seek
or consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for SPC Party or Borrower or a
substantial portion of either of their properties;

 

(iii)          Make any assignment for the benefit of the
creditors of SPC Party or Borrower; or

 

(iv)          Take
any action in furtherance of any of the foregoing.

 

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

 

3.1.26     Solvency.  Borrower (a) has not entered into this
transaction or any Loan Document with the actual intent to hinder, delay, or
defraud any creditor and (b) received reasonably equivalent value in exchange
for its obligations under the Loan Documents. Giving effect to the Loan, the
fair saleable value of Borrower’s assets exceeds and will, immediately

 

32

 

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 Indebtedness and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such Indebtedness
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).

 

3.1.27     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.

 

3.1.28     Organizational Chart.  The organizational chart attached as Schedule
III hereto, relating to Borrower and certain Affiliates and other parties,
is true, complete and correct on and as of the date hereof.

 

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

 

3.1.30     No Other Debt.  Borrower has not borrowed or received debt financing
(other than permitted pursuant to this Agreement) that has not been heretofore
repaid in full.

 

3.1.31     Investment Company Act.  Borrower is not (1) an “investment company”
or a company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended; (2) 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 (3) subject to any other federal or state
law or regulation which purports to restrict or regulate its ability to borrow
money.

 

3.1.32     Access/Utilities.  All public utilities necessary to the
continued use and enjoyment of the Property as presently used and enjoyed are
located in the public right-of-way abutting the Property or are the subject of
recorded access easements for the benefit of the Property. All roads necessary
for the full utilization of the Property for its current purpose have been
completed and dedicated to public use and accepted by all governmental
authorities or are the subject of access easements for the benefit of the
Property.

 

33

 

3.1.33     No Bankruptcy Filing.  Borrower is not contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of its assets or property, and Borrower does not have
any knowledge of any Person contemplating the filing of any such petition
against it.

 

3.1.34     Full and Accurate
Disclosure.  To the best of
Borrower’s knowledge, no information contained in this Agreement, the other
Loan Documents, or any written statement furnished by or on behalf of Borrower
pursuant to the terms of this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made. There is no fact or circumstance
presently known to Borrower which has not been disclosed to Lender and which
materially adversely affects, or is reasonably likely to materially adversely
affect, the Property, Borrower or its business, operations or condition
(financial or otherwise).

 

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

 

3.1.36     Fraudulent Transfer.  Borrower (a) has not entered into the Loan or
any Loan Document with the actual intent to hinder, delay, or defraud any
creditor and (b) has received reasonably equivalent value in exchange for its
obligations under the Loan Documents. The assets of Borrower do not and,
immediately following the execution and delivery of the Loan Documents will
not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. Borrower does not intend to, and does
not believe that it will, incur debts and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such debts as they
mature (taking into account the timing and amounts reasonably expected to be
payable on or in respect of its obligations).

 

3.1.37     No Change in Facts or
Circumstances; Disclosure.  To
the best of Borrower’s knowledge, there has been no material adverse change in
any condition, fact, circumstance or event that would make the financial
statements, rent rolls, reports, certificates or other documents submitted in
connection with the Loan inaccurate, incomplete or otherwise misleading in any
material respect or that otherwise materially and adversely affects the
business operations or the financial condition of Borrower or the Property.

 

3.1.38     Management Agreement.  All of the representations and warranties
with respect to the Management Agreement set forth in Article VII of this
Agreement are true and correct in all respects.

 

3.1.39     Perfection of Accounts.  Borrower hereby represents and warrants to
Lender that upon the execution and delivery of the Cash Management Agreement by
all parties thereto:

 

(a)           This
Agreement, together with the other Loan Documents, create a valid and
continuing security interest (as defined in the Uniform Commercial Code) in the
Accounts (as defined in the Cash Management Agreement) in favor of Lender,
which security interest is prior to all other Liens, other than Permitted
Encumbrances, and is enforceable as such against

 

34

 

creditors of and
purchasers (other than as expressly provided in Section 9-320 of the UCC) from
Borrower. Other than in connection with the Loan Documents and except for
Permitted Encumbrances, Borrower has not sold or otherwise conveyed the
Accounts;

 

(b)           The
Accounts constitute “deposit accounts” or “securities accounts” within the
meaning of the Uniform Commercial Code, as set forth in the Cash Management
Agreement;

 

(c)           Pursuant
and subject to the terms of the Cash Management Agreement, Agent has agreed to
comply with all instructions originated by Lender, without further consent by
Borrower, directing disposition of the Accounts and all cash, securities,
instruments or other financial assets at any time held, deposited or invested
therein, together with any interest or other earnings thereon, and all proceeds
thereof (including proceeds of sales and other dispositions), whether accounts,
general intangibles, chattel paper, deposit accounts, instruments, documents or
securities; and

 

(d)           The
Accounts are not in the name of any Person other than Borrower, as pledgor, or
Lender, as pledgee. Borrower has not consented to Agent’s complying with
instructions with respect to the Accounts from any Person other than Lender.

 

Section 3.2            Survival of
Representations.

 

The
representations and warranties set forth in Section 3.1 shall
survive, and any covenants contained in Section 3.1 shall continue,
for so long as any amount remains payable to Lender under this Agreement or any
of the other Loan Documents.

 

IV.                                BORROWER
COVENANTS

 

Section 4.1            Borrower Affirmative
Covenants.  Borrower hereby covenants
and agrees with Lender from and after the date hereof and until the full
payment and performance of all obligations under the Loan Documents, that:

 

4.1.1       Existence; Compliance
with Legal Requirements.  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 in all material respects with all Legal Requirements
applicable to it and the Property, including, without limitation, Prescribed
Laws. Notwithstanding the foregoing, after prior notice to Lender, Borrower, at
its own expense, may suspend such compliance and contest by appropriate legal
proceeding, conducted in good faith and with due diligence, the validity or
applicability of any Legal Requirements to Borrower and/or the Property,
provided that (i) no Event of Default has occurred and remains uncured;
(ii) such proceeding shall be permitted under and be conducted in accordance
with all applicable statutes, laws and ordinances; (iii) Borrower shall
establish to Lender’s reasonable satisfaction that neither the Property nor any
part thereof or interest therein will be in imminent danger of being sold,
forfeited, terminated, canceled or lost; (iv) Borrower shall promptly upon
final determination thereof comply with such resulting Legal Requirements, and
shall pay all costs, interest and penalties which may be payable in connection
therewith; and (v) Borrower shall deposit with Lender cash, or other security
as may be approved by Lender, in an amount equal to 100% of the amount of all
damages, costs, interest and penalties that may be assessed against

 

35

 

Borrower as a result of such non-compliance, as reasonably determined
by Lender, less any amount that Borrower has paid to any Governmental Authority
in connection with such contest as security for the payment of such damages,
costs, interest and penalties.

 

4.1.2       Taxes and Other Charges.  Borrower shall pay all Taxes and Other
Charges now or hereafter levied or assessed or imposed against the Property or
any part thereof as the same become due and payable; provided, however,
Borrower’s obligation to directly pay Taxes shall be suspended for so long as
Borrower complies with the terms and provisions of Section 6.2
hereof. Borrower shall furnish to Lender receipts for the payment of the Taxes
and the Other Charges prior to the date the same shall become delinquent;
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 6.2 hereof. Borrower shall not permit or suffer and
shall promptly discharge any lien or charge against the Property other than
Permitted Encumbrances. After prior notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, conducted in good faith
and with due diligence, the amount or validity of any Taxes or Other Charges,
provided that (i) no Event of Default has occurred and remains uncured; (ii)
such proceeding shall be permitted under and 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 danger of being sold,
forfeited, terminated, canceled 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 Taxes
or Other Charges from the Property; and (vi) to the extent that Borrower has
not paid to the applicable taxing authority the full amount of the contested
Taxes or Other Charges or if Borrower is paying Taxes to Lender pursuant to Section
6.2 hereof and has requested Lender to not pay the contested amount of the
Taxes during the continuance of the legal proceeding (in which event Lender
shall not pay such amount of the Taxes during the continuance of such
proceeding), Borrower shall deposit with Lender cash, or other security as may
be approved by Lender, in an amount equal to one hundred twenty-five percent
(125%) of the unpaid contested amount, to insure the payment of any such Taxes
or Other Charges, together with all interest and penalties thereon, but no such
security shall be required if Borrower is paying Taxes to Lender pursuant to Section
6.2 hereof. Lender may pay over any such cash or other security held by
Lender to the claimant entitled thereto at any time when, in the judgment of
Lender, the entitlement of such claimant is established.

 

4.1.3       Litigation.  Borrower shall give prompt notice to Lender
of any litigation or governmental proceedings pending or threatened in writing
against Borrower which might materially adversely affect the Property or
Borrower’s ability to perform its obligations hereunder or under the other Loan
Documents.

 

4.1.4       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 applicable Leases.

 

4.1.5       Further Assurances;
Supplemental Mortgage Affidavits. 
Borrower shall, at Borrower’s sole cost and expense:

 

36

 

(a)           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

 

(b)           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.

 

4.1.6       Financial Reporting.  (a) 
Borrower shall keep and maintain or will cause to be kept and maintained
proper and accurate books and records, in accordance with GAAP (or such
accounting method reasonably acceptable to Lender), reflecting the financial
affairs of Borrower. Lender shall have the right from time to time during
normal business hours upon reasonable notice to Borrower to examine such books
and records at the office of Borrower or other Person maintaining such books
and records and to make such copies or extracts thereof as Lender shall desire.

 

(b)           Borrower
shall furnish Lender annually, within ninety (90) days following the end of
each Fiscal Year, a complete copy of either (i) Borrower’s annual financial
statements audited by a “big four” accounting firm or other independent
certified public accountant reasonably acceptable to Lender and prepared in
accordance with GAAP (or such accounting method reasonably acceptable to
Lender) or (ii) if a Mezzanine Loan is outstanding, a consolidated and
annotated annual financial statement of Borrower and Mezzanine Borrower audited
by a “big four” accounting firm or other independent certified public
accountant reasonably acceptable to Lender and prepared in accordance with GAAP
(or such accounting method reasonably acceptable to Lender), provided such
consolidated financial statement complies with Section 3.1.24(h) and is
required or permitted by GAAP (or such accounting method reasonably acceptable
to Lender). In addition, if a Mezzanine Loan is outstanding, Borrower shall
furnish Lender annually, within ninety (90) days following the end of each
Fiscal Year, unaudited statements of income and expense and cash flow for the
Property, which unaudited statements shall account for the Loan separately from
the Mezzanine Loan, if any, and, if Borrower furnished Lender consolidated
statements pursuant to subsection (ii) of the previous sentence, an unaudited
separate balance sheet for Borrower, which balance sheet shall account for the
Loan separately from the Mezzanine Loan, if any. Borrower’s annual financial
statements shall be accompanied by a certificate executed by an authorized
officer of Borrower stating that such annual financial statement presents
fairly the financial condition and the results of operations of Borrower and
the Property. Together with Borrower’s annual financial statements, Borrower
shall furnish to Lender an Officer’s Certificate certifying as of the date
thereof whether to the best of Borrower’s knowledge there exists an event or
circumstance which constitutes a Default or Event of Default by Borrower under
the Loan Documents 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 Lender on or before the forty-fifth (45th) day after the end of
each fiscal quarter (based on Borrower’s Fiscal Year), the following items,
accompanied by certificate from an authorized officer of Borrower, certifying
that such items are

 

37

 

true, correct,
accurate and complete and fairly present the financial condition and results of
the operations of Borrower and the Property in accordance with GAAP (or such
accounting method reasonably acceptable to Lender) as applicable:

 

(i)        quarterly
and year-to-date statements of income and expense and cash flow prepared for
such quarter with respect to the Property, with a balance sheet for such
quarter for Borrower;

 

(ii)       a
calculation reflecting the Debt Service Coverage Ratio as of the last day of
such quarter, for such quarter and the last four quarters;

 

(iii)      a current rent roll for the Property;

 

(iv)     a
comparison of the budgeted income and expenses and the actual income and
expenses for such quarter and year to date for the Property, together with a
detailed explanation of any variances of more than five percent (5%) between
budgeted and actual amounts year to date; and

 

(v)     any
written notice received from a Tenant threatening non-payment of Rent or other
default, alleging or acknowledging a default by landlord, requesting a
termination of a Lease or a material modification of any Lease or notifying
Borrower of the exercise or non-exercise of any option provided for in such
Tenant’s Lease, or any other similar material correspondence received by
Borrower from Tenants during the subject quarter.

 

(d)           Intentionally
Omitted.

 

(e)           Borrower
shall submit the Annual Budget to Lender not later than thirty (30) days prior
to the commencement of each Fiscal Year.

 

(f)            Borrower
shall furnish to Lender, within ten (10) days after request (or as soon
thereafter as may be reasonably possible), such further detailed information
with respect to the operation of the Property and the financial affairs of
Borrower as may be reasonably requested by Lender, including, without limitation,
a comparison of the budgeted income and expenses and the actual income and
expenses year to date for the Property, together with a detailed explanation of
any variances of more than the greater of five percent (5%) or $100,000 between
budgeted and actual amounts for such year to date.

 

4.1.7       Title to the Property.  Borrower will warrant and defend the validity
and priority of the Liens of the Mortgage and the Assignment of Leases on the
Property against the claims of all Persons whomsoever, subject only to
Permitted Encumbrances.

 

4.1.8       Estoppel Statement.  (a) 
After request by Lender, Borrower shall within five (5) Business Days
furnish Lender with a statement, duly acknowledged and certified, stating (i)
the unpaid principal amount of the Note, (ii) the Interest Rate of the Note,
(iii) the date installments of interest were last paid, (iv) any offsets or
defenses to the payment of the Debt, if any, and (v) that this Agreement and
the other Loan Documents have not been modified or if modified, giving
particulars of such modification.

 

38

 

(b)           After
request by Borrower, Lender shall within ten (10) Business Days furnish
Borrower with a statement, duly acknowledged and certified, stating (i) the
unpaid principal amount of the Note, (ii) the Interest Rate of the Note, (iii)
the date installments of interest were last paid and (iv) whether or not Lender
has sent any notice of default under the Loan Documents which remains uncured
in the opinion of Lender.

 

(c)           Borrower
shall deliver to Lender, upon request, an estoppel certificate from each Tenant
under any Lease (provided that Borrower shall only be required to use
commercially reasonable efforts to obtain an estoppel certificate from any
Tenant not required to provide an estoppel certificate under its Lease);
provided that such certificate may be in the form required under such Lease;
provided further that Borrower shall not be required to deliver such
certificates more frequently than two (2) times in any calendar year.

 

4.1.9       Leases.  (a) 
All Leases and all renewals of Leases (other than renewals exercised
pursuant to Leases which existed (including the renewal terms) on the Closing
Date and (A) for which Borrower has no discretion as to the terms of such renewal
and (B) which renewal terms have not been modified since the Closing Date)
executed after the date hereof shall (i) be the product of an arm’s-length
transaction (other than the Health Club Documents), (ii) be on commercially
reasonable terms, (iii) provide that such Lease is subordinate to the Mortgage
and that the lessee will attorn to Lender and any purchaser at a foreclosure
sale and (iv) not contain any terms which would materially adversely affect
Lender’s rights under the Loan Documents or the Property. All Major Leases and
all renewals (other than renewals exercised pursuant to Major Leases which
existed (including the renewal terms) on the Closing Date and (A) for which
Borrower has no discretion as to the terms of such renewal and (B) which renewal
terms have not been modified since the Closing Date), amendments and
modifications thereof executed after the date hereof shall be subject to Lender’s
prior approval, which approval shall not be unreasonably withheld or delayed. Lender
shall execute and deliver a Subordination Non-Disturbance and Attornment
Agreement in the form annexed as Schedule IV to Tenants under future
Major Leases approved or deemed approved by Lender promptly upon request (and,
if requested by any Tenants under Leases other than Major Leases, Lender shall
use reasonable efforts to execute and deliver such Subordination
Non-Disturbance and Attornment Agreements to such Tenants) with such
commercially reasonable changes as may be requested by Tenants, from time to
time, and which are reasonably acceptable to Lender.

 

(b)     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 lessee
thereunder to be observed or performed in a commercially reasonable manner,
provided, however, Borrower shall not terminate (other than due to a monetary
default by the tenant under a Major Lease) or accept a surrender of a Major
Lease without Lender’s prior approval, which approval shall not be unreasonably
withheld or delayed; (iii) shall not collect any of the Rents more than one (1)
month in advance (other than security deposits), except as approved by Lender
or as provided in Leases that exist as of the date hereof and, if the amount of
any such prepaid Rent shall equal or exceed $250,000 for any Lease, then as a
condition to any approval by Lender for Borrower to collect such Rents more
than one (1) month in advance, Lender may require that Borrower deposit all
such prepaid Rents with Lender to be held in an interest-bearing account and
applied to the Debt as it comes due and payable pursuant to the Loan Documents
during the period

 

39

 

represented by the
prepaid Rent; (iv) shall not execute any assignment of lessor’s interest in the
Leases or the Rents (except as contemplated by the Loan Documents); and (v)
shall hold all security deposits under all Leases in accordance with Legal
Requirements. Upon request, Borrower shall furnish Lender with executed copies
of all Leases.

 

(c)           Notwithstanding
anything to the contrary contained in this Section 4.1.9:

 

(i)            whenever
Lender’s approval or consent is required pursuant to the provisions of this Section 4.1.9,
Borrower shall have the right to submit a term sheet of such transaction to
Lender for Lender’s approval, such approval not to be unreasonably withheld or
delayed. Any such term sheet submitted to Lender shall set forth all material
terms of the proposed transaction including, without limitation, identity of
tenant, square footage, term, rent, rent credits, abatements, work allowances
and tenant improvements to be constructed by Borrower. Lender shall use good
faith efforts to respond within eight (8) Business Days after Lender’s receipt
of Borrower’s written request for approval or consent of such term sheet. If
Lender fails to respond to such request within eight (8) Business Days, and
Borrower sends a second request containing a legend in bold letters stating
that Lender’s failure to respond within five (5) Business Days shall be deemed
consent or approval, Lender shall be deemed to have approved or consented to
such term sheet if Lender fails to respond to such second written request
before the expiration of such five (5) Business Day period;

 

(ii)           whenever
Lender’s approval or consent is required pursuant to the provisions of this Section 4.1.9
for any matter that Lender has not previously approved (or deemed approved) a
term sheet pursuant to Section 4.1.9(c)(i) above, Lender shall use
good faith efforts to respond within eight (8) Business Days after Lender’s
receipt of Borrower’s written request for such approval or consent. If Lender
fails to respond to such request within eight (8) Business Days, and Borrower
sends a second request containing a legend in bold letters stating that Lender’s
failure to respond within five (5) Business Days shall be deemed consent or
approval, Lender shall be deemed to have approved or consented to the matter
for which Lender’s consent or approval was sought if Lender fails to respond to
such second written request before the expiration of such five (5) Business Day
period;

 

(iii)          whenever Lender’s approval or consent is
required pursuant to the provisions of this Section 4.1.9 for any
matter that Lender has previously approved (or deemed approved) a term sheet
pursuant to Section 4.1.9(c)(i) above, Lender shall use good faith
efforts to respond within five (5) Business Days after Lender’s receipt of
Borrower’s written request for such approval or consent. If Lender fails to
respond to such request within five (5) Business Days, and Borrower sends a
second request containing a legend in bold letters stating that Lender’s
failure to respond within five (5) Business Days shall be deemed consent or
approval, Lender shall be deemed to have approved or consented to the matter
for which Lender’s consent or approval was sought if Lender fails to respond to
such second written request before the expiration of such five (5) Business Day
period, provided that there have been no material deviations from the term
sheet and that the aggregate economics of the transaction are not materially
less favorable to Borrower than as set forth in the term sheet;

 

(iv)          in
the event that Lender shall have approved (or be deemed to have approved) a
term sheet submitted by Borrower with respect to a certain Lease, Lender shall
not

 

40

 

withhold its
approval or consent with respect to such Lease on the basis of any provisions
of such Lease dealing with the items contained in the approved term sheet; and

 

(v)           Borrower
shall have the right, without the consent or approval of Lender in any
instance, to terminate or accept a surrender of any Lease that is not a Major
Lease.

 

4.1.10     Alterations.  Except for the Elevator Renovation Program,
the Lender’s prior approval shall be required in connection with any
alterations to any Improvements (except tenant improvements under any Lease
approved or deemed approved by Lender or under any Lease for which approval was
not required by Lender under this Agreement) (a) that may have a material
adverse effect on Borrower’s financial condition, the value of the Property or
the ongoing revenues and expenses of the Property or (b) the cost of which
(including any related alteration, improvement or replacement) is reasonably
anticipated to exceed the Alteration Threshold, which approval may be granted
or withheld in Lender’s reasonable discretion. If the total unpaid amounts
incurred and to be incurred with respect to such alterations to the
Improvements shall at any time exceed the Alteration Threshold (except for the
Elevator Renovation Program), Borrower shall promptly deliver to Lender as
security for the payment of such amounts and as additional security for
Borrower’s obligations under the Loan Documents any of the following (such
security, “Alteration Security”): (i)
cash, (ii) Letters of Credit (iii) U.S. Obligations, (iv) other securities
acceptable to Lender, provided that Lender shall have received a Rating Agency
Confirmation as to the form and issuer of same, or (v) a completion bond,
provided that Lender shall have received a Rating Agency Confirmation as to the
form and issuer of same. Such security shall be in an amount equal to the
excess of the total unpaid amounts incurred and to be incurred with respect to
such alterations to the Improvements (other than such amounts to be paid or
reimbursed by Tenants under the Leases) over the Alteration Threshold. Provided
that no Event of Default shall have occurred and be continuing, any Alteration
Security held by Lender in accordance with this Section 4.1.10
shall be returned to Borrower in the event that Borrower provides Lender with
reasonably satisfactory evidence that (x) the aggregate unpaid amount with
respect to the alteration to which such Alteration Security relates is less
than the Alteration Threshold and (y) after the release of such Alteration
Security, adequate Alteration Security shall remain on deposit with Lender with
respect any other alterations then undertaken by Borrower in accordance with
this Section 4.1.10.

 

4.1.11     Intentionally Omitted.

 

4.1.12     Material Agreements.  Borrower shall (a) promptly perform and/or
observe all of the material covenants and agreements required to be performed
and observed by it under each Material Agreement to which it is a party, and do
all things necessary to preserve and to keep unimpaired its rights thereunder,
(b) promptly notify Lender in writing of the giving of any notice of any
default by any party under any Material Agreement of which it is aware and (c)
promptly enforce the performance and observance of all of the material
covenants and agreements required to be performed and/or observed by the other
party under each Material Agreement to which it is a party in a commercially
reasonable manner.

 

4.1.13     Performance by Borrower.  Borrower shall in a timely manner observe,
perform and fulfill each and every covenant, term and provision of each Loan Document
executed and delivered by Borrower, and shall not enter into or otherwise
suffer or permit any

 

41

 

amendment, waiver, supplement, termination or other modification of any
Loan Document executed and delivered by Borrower without the prior consent of
Lender.

 

4.1.14     Costs of
Enforcement/Remedying Defaults.  In
the event (a) that the Mortgage is foreclosed in whole or in part or the Note
or any other Loan Document is put into the hands of an attorney for collection,
suit, action or foreclosure, (b) of the foreclosure of any Lien or mortgage
prior to or subsequent to the Mortgage in which proceeding Lender is made a
party, (c) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Borrower or Guarantor or an assignment by Borrower or
Guarantor for the benefit of its creditors, or (d) Lender shall remedy or
attempt to remedy any Event of Default hereunder, Borrower shall be chargeable
with and agrees to pay all costs incurred by Lender as a result thereof,
including costs of collection and defense (including reasonable attorneys’,
experts’, consultants’ and witnesses’ fees and disbursements) in connection
therewith and in connection with any appellate proceeding or post-judgment
action involved therein, which shall be due and payable on demand, together
with interest thereon from the date incurred by Lender at the Default Rate, and
together with all required service or use taxes.

 

4.1.15     Business and Operations.  Borrower will continue to engage in the
businesses currently conducted by it as and to the extent the same are
necessary for the ownership and leasing of the Property. Borrower will qualify
to do business and will remain in good standing under the laws of each
jurisdiction as and to the extent the same are required for the ownership and
leasing of the related Property. Borrower shall at all times cause the Property
to be maintained as an office building.

 

4.1.16     Loan Fees.  Borrower shall pay all fees and costs
(including, without limitation, all origination and commitment fees) required
of Borrower pursuant to the terms of that certain term sheet between Borrower
and Lender dated January 6, 2006.

 

4.1.17     O&M Program.  Borrower will comply with all existing (if
any) and future operations and maintenance programs related to asbestos and
asbestos containing materials and will maintain such programs as are reasonably
necessary at the Property.

 

4.1.18     Intentionally Omitted.

 

Unfunded Tenant Allowances.  There are no Unfunded Tenant Allowances
except as set forth on Schedule VI.

 

Section 4.2            Borrower Negative
Covenants.  Borrower covenants and
agrees with Lender that:

 

4.2.1       Due on Sale and
Encumbrance; Transfers of Interests. 
Without the prior written consent of Lender and except as otherwise
specifically provided in Article VIII hereof, neither Borrower nor
any other Person having a direct or indirect ownership or beneficial interest
in Borrower shall sell, convey, mortgage, grant, bargain, encumber, pledge,
assign or transfer any interest, direct or indirect, in Borrower, the Property
or any part thereof, whether voluntarily or involuntarily, in violation of the
covenants and conditions set forth in the Mortgage and this Agreement. Notwithstanding
the foregoing, provided the Mezzanine Loan is

 

42

 

outstanding, Mezzanine Borrower shall be permitted to pledge its direct
or indirect equity interests in Borrower to Mezzanine Lender.

 

4.2.2       Liens.  Subject to Section 3.6(b) of the Mortgage,
Borrower shall not create, incur, assume or suffer to exist any Lien on any
portion of the Property except for Permitted Encumbrances, unless such Lien is
discharged or otherwise removed as a Lien from the Property within thirty (30)
days after Borrower first has knowledge of such Lien; provided, however,
that the existence of liens resulting from mechanics or materialmen hired by a
Tenant shall not constitute a Default or an Event of Default hereunder provided
such lien is subordinate to the Mortgage and so long as Borrower is diligently
taking all commercially reasonable action to enforce the obligation of such
Tenant to cause such lien to be removed.

 

4.2.3       Dissolution.  Borrower shall not (i) engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity, (ii) engage in any business activity not related to the
ownership, operation and refinancing of the Property, (iii) transfer, lease or
sell, in one transaction or any combination of transactions, all or substantially
all of the property or assets of Borrower except to the extent expressly
permitted by the Loan Documents, or (iv) cause, permit or suffer any SPC Party
to (A) dissolve, wind up or liquidate or take any action, or omit to take an
action, as a result of which such SPC Party would be dissolved, wound up or
liquidated in whole or in part, or (B) amend, modify, waive or terminate the
certificate of incorporation or bylaws of such SPC Party, in each case without
obtaining the prior consent of Lender.

 

4.2.4       Change in Business.  Borrower shall not enter into any line of
business other than the ownership and operation of the Property.

 

4.2.5       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.

 

4.2.6       Affiliate Transactions.  Borrower shall not enter into, or be a party
to, any transaction with an Affiliate of Borrower or any of the partners of
Borrower except in the ordinary course of business and on terms which are fully
disclosed to Lender in advance and are no less favorable to Borrower or such
Affiliate than would be obtained in a comparable arm’s-length transaction with
an unrelated third party.

 

4.2.7       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; provided, however,
that the foregoing shall not prohibit the continued use of the Property in its
then current manner if such use becomes a permitted non-conforming use by
virtue of a change in zoning or other land use laws which was not initiated by
Borrower.

 

43

 

4.2.8       Assets.  Borrower shall not purchase or own any
property other than the Property and any property necessary or incidental for
the operation of the Property.

 

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

 

4.2.10     Principal Place of
Business.  Borrower shall not
change its principal place of business from the address set forth on the first
page of this Agreement without first giving Lender thirty (30) days prior
notice.

 

4.2.11     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 the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”).

 

(b)           Borrower
shall 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 (A) Borrower is not an “employee benefit plan” as defined in Section 3(3)
of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within
the meaning of Section 3(32) of ERISA; (B) Borrower is not subject to any
state statute regulating investments of, or fiduciary obligations with respect
to, governmental plans; and (C) one or more of the following circumstances is
true:

 

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

 

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

 

(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); or

 

(iv)          The
assets of Borrower are not otherwise “plan assets” of one or more “employee
benefit plans” (as defined in Section 3(3) of ERISA) subject to Title I of
ERISA, within the meaning of 29 C.F.R. §2510.3-101.

 

4.2.12     Material Agreements.  Borrower shall not, without Lender’s prior
written consent, which consent will not be unreasonably withheld:  (a) enter into, surrender or terminate any
Material Agreement to which it is a party (unless the other party thereto is in
material default and the termination of such agreement would be commercially
reasonable), (b) increase or consent to the increase of the amount of any
charges under any Material Agreement to which it is a party, except as provided
therein or on an arms’-length basis and commercially reasonable terms; or (c)
otherwise modify, change, supplement, alter or amend, or waive or release any
of its

 

44

 

rights and remedies under any Material Agreement to which it is a party
in any material respect, except on an arms’-length basis and commercially
reasonable terms.

 

V.                                    INSURANCE,
CASUALTY AND CONDEMNATION

 

Section 5.1            Insurance.

 

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

 

(i)            so
called “all risk” or special perils property insurance on the Improvements and
the personal property at the 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, but the amount shall in no event be less than the aggregate
outstanding principal balance of the Loan; (B) containing an agreed amount
endorsement with respect to the Improvements and personal property at the
Property waiving all co-insurance provisions; (C) providing for no deductible
in excess of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) for
all such insurance coverage; and (D) including contingent liability from the
Operation of Building Laws or Demolition Costs and Increased Cost of
Construction Endorsements (in either case, “D&ICC
Endorsement”), in the case of coverage parts B and C of the
D&ICC Endorsement, with a sublimit of not less than Twenty Five Million and
No/100 Dollars ($25,000,000.00). In addition, Borrower shall obtain: (y) if any
portion of the Improvements is currently or at any time in the future located
in a federally designated “special flood hazard area,” flood hazard insurance
in an amount equal to the lesser of (1) the aggregate outstanding principal
balance of the Loan or (2) the maximum amount of such insurance available under
the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994, as each may be amended
or such greater amount as Lender shall require; 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 degree of seismic activity, 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) and shall be commercially available at a reasonable cost;

 

(ii)           commercial
general liability insurance against claims for personal injury, bodily injury,
death or property damage occurring upon, in or about the Property, such
insurance (A) to be on the so-called “occurrence” form with a combined limit,
excluding umbrella coverage, of not less than One Million and No/100 Dollars
($1,000,000.00) per occurrence and Two Million and No/100 Dollars ($2,000,000.00)
in the aggregate; (B) to continue at not less than the aforesaid limit until
required to be changed by Lender 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 legal contracts; and (5) contractual liability covering the
indemnities contained in Article 9 of the Mortgage to the extent the same
is available;

 

45

 

(iii)          business or rental income insurance with a
limit of insurance adequate to cover a loss of business or rental income for a
period of eighteen (18) months inclusive of the extended period of indemnity
required below (A) with loss payable to Lender under a Lender Loss Payable or
Standard Mortgagee endorsement satisfactory to Lender; (B) covering all risks
required to be covered by the insurance provided for in subsection (i) above
and subsections (vi) and (xi) below for a period commencing at the time of loss
for such length of time (not exceeding twelve (12) months) as it takes to
repair or replace with the exercise of due diligence and dispatch; (C) 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 six (6) 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. Subject to the provisions of Section 5.2
and Section 5.3 of this Agreement, 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 the Note
and the other Loan Documents except to the extent such amounts are actually
paid out of the proceeds of such business income insurance;

 

(iv)          at
all times during which structural construction, repairs or alterations are
being made with respect to the Improvements, and only if the property and
liability coverage forms do not otherwise apply, (A) owner’s contingent or
protective liability insurance 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;

 

(v)           workers’
compensation, subject to the statutory limits of the state in which the
Property is located, and employer’s liability insurance with a limit of at
least Five Hundred Thousand and No/100 Dollars ($500,000.00) per accident and
per disease per employee, and Five Hundred Thousand and No/100 Dollars
($500,000.00) for disease aggregate in respect of any work or operations on or
about the Property, or in connection with the Property or its operation (if
applicable);

 

(vi)          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;

 

(vii)         umbrella liability insurance in addition to
primary coverage in an amount not less than One Hundred Million and No/100
Dollars ($100,000,000.00) per occurrence on terms consistent with the
commercial general liability insurance policy required under subsection (ii)
above and (viii) below (such limit may be achieved by any combination of
primary and excess limits);

 

46

 

(viii)        motor vehicle liability coverage for all owned
and non-owned vehicles, including rented and leased vehicles containing minimum
limits per occurrence, including umbrella coverage, of One Million and No/100
Dollars ($1,000,000.00);

 

(ix)           so-called
“dramshop” insurance or other liability insurance required in connection with
the sale of alcoholic beverages, if any;

 

(x)            insurance
against employee dishonesty in an amount not less than One Million and No/100
Dollars ($1,000,000.00) and with a deductible not greater than Twenty Five
Thousand and No/100 Dollars ($25,000.00);

 

(xi)           if
at any time during the term of the Loan the commercial property and business
income insurance policies required under subsections (i) and (iii) above do not
cover perils of terrorism or acts of terrorism, or other similar acts or events,
Borrower shall obtain an endorsement to such policy, or a separate policy from
an insurance provider which maintains at least an Investment Grade Rating,
insuring against all loss resulting from perils and acts of terrorism and “fire
following”, to the extent such policy or endorsement is available, in an amount
determined by Lender in its sole discretion (but in no event more than an
amount equal to the sum of one hundred percent (100%) of the construction costs
associated with the reconstruction of the Improvements and a minimum of
eighteen (18) months of business or rental interruption insurance (inclusive of
six (6) months extended period of indemnity) (the “Terrorism
Coverage Amount”)); provided, however, the total
annual premium payable by Borrower for such terrorism coverage shall not exceed
Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) for such coverage. The
endorsement or policy shall be in form and substance reasonably satisfactory to
Lender and shall meet Rating Agency criteria for securitized loans; and

 

(xii)          upon sixty (60) days’ 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 5.1.1(a) shall be obtained under
valid and enforceable policies (collectively, the “Policies”
or, in the singular, the “Policy”)
and, to the extent not specified above, shall be subject to the approval of
Lender as to deductibles, loss payees and insureds. Not less than ten (10) days
prior to the expiration dates of the Policies theretofore furnished to Lender,
or as soon as available, but in no event later than seven (7) days following
such date of expiration, certificates of insurance evidencing the Policies
accompanied by evidence satisfactory to Lender of payment of the premiums then
due thereunder (the “Insurance Premiums”),
shall be delivered by Borrower to Lender; provided, however, that
Borrower is not required to furnish receipts for payment of Insurance Premiums
in the event that such Insurance Premiums are payable by Lender pursuant to Section 6.3
hereof and sufficient funds have been deposited with Lender for the payment
thereof in the manner required by Section 6.3.

 

(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

 

47

 

protection as
would a separate Policy insuring only the Property in compliance with the
provisions of Section 5.1.1(a).

 

(d)           All
Policies of insurance provided for or contemplated by Section 5.1.1(a)
shall be primary coverage and, except for the Policy referenced in Sections 5.1.1(a)(v),
(viii) and (x), shall name Borrower as the insured and Lender and its
successors and/or assigns as the additional insured, as its interests may
appear, and in the case of property damage, boiler and machinery, flood,
earthquake and terrorism insurance and resulting loss of business income or
rental income, shall contain a so-called New York standard non-contributing
Mortgagee or Lender Loss Payee clause or endorsement in favor of Lender
providing that the loss thereunder shall be payable to Lender subject to the
provisions of Section 5.2 and Section 5.3 hereof. Borrower
shall not procure or permit any of its constituent entities to procure any
other insurance coverage which would be on the same level of payment as the
Policies or would adversely impact in any way the ability of Lender or Borrower
to collect any proceeds under any of the Policies.

 

(e)           All
Policies of insurance provided for in Section 5.1.1(a), except for
the Policies referenced in Section 5.1.1(a)(v) and (a)(viii)
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 canceled without at least thirty (30) days’ (or ten (10)
days’ for non-payment of any premium) written notice to Lender and any other
party named therein as an additional insured and, if obtainable by Borrower
using commercially reasonable efforts, shall not be materially changed (other
than to increase the coverage provided thereby) without such a thirty (30) day
notice; and

 

(iii)          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,
with notice to Borrower, to take such action as Lender deems necessary to
protect its interest in the Property, including, without limitation, the
obtaining of such insurance coverage as Lender in its sole discretion deems
appropriate and all 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.

 

(g)           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

 

48

 

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.

 

(h)           Notwithstanding
anything in Section 5.1.1(a)(i) to the contrary, Borrower shall be
required to obtain and maintain Policies which do not contain exclusions for “fire
following” to the extent that insurance coverage is available without such
exclusions.

 

5.1.2       Insurance Company.  The Policies shall be issued by financially
sound and responsible insurance companies authorized to do business in the
state in which the Property is located and having a claims paying ability
rating of “A” or better by S&P and, to the extent rated by Moody’s and or
Fitch, the equivalent rating from each of Moody’s and/or Fitch, as applicable
(provided, however, that the Policies for general liability insurance set forth
in subsections (a)(ii), (a)(v), (a)(vii) and (a)(viii) above shall be issued by
insurance companies having a claims paying ability rating of “A-” or better by
S&P and, to the extent rated by Moody’s and or Fitch, the equivalent rating
from each of Moody’s and/or Fitch, as applicable). If a Securitization occurs,
(i) the foregoing required insurance company rating by a Rating Agency not
rating any Securities shall be disregarded and (ii) if the insurance company
complies with the aforesaid S&P required rating (and S&P is rating the
Securities) and the other Rating Agencies rating the Securities do not rate the
insurance company, such insurance company shall be deemed acceptable with
respect to such Rating Agency not rating such insurance company. Notwithstanding
the foregoing, Borrower shall be permitted to maintain the Policies with
insurance companies which do not meet the foregoing requirements (an “Otherwise Rated Insurer”), provided
Borrower obtains a “cut-through” endorsement (that is, an endorsement which
permits recovery against the provider of such endorsement) with respect to any
Otherwise Rated Insurer from an insurance company which meets the claims paying
ability ratings required above. Moreover, if Borrower desires to maintain
insurance required hereunder from an insurance company which does not meet the
claims paying ability ratings set forth herein but the parent of such insurance
company, which owns at least fifty-one percent (51%) of such insurance company,
maintains such ratings, Borrower may use such insurance companies if approved
by the Rating Agencies (such approval may be conditioned on items required by
the Rating Agencies including a requirement that the parent guarantee the
obligations of such insurance company).

 

Section 5.2            Casualty and
Condemnation.

 

5.2.1       Casualty.  If the Property shall sustain a Casualty,
Borrower shall give prompt notice of such Casualty to Lender and shall, subject
to Legal Requirements of any Governmental Authorities, promptly commence and
diligently prosecute to completion the repair and restoration of the Property
as nearly as possible to the condition the Property was in immediately prior to
such Casualty (a “Restoration”)
and otherwise in accordance with Section 5.3, it being understood,
however, that Borrower shall not be obligated to restore the Property to the
precise condition of the Property prior to such Casualty provided the Property
is restored, to the extent practicable, to be of at least equal value and of
substantially the same character as prior to the Casualty. Borrower shall pay
all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to, make proof of loss if not
made promptly by Borrower. In the event of a Casualty where the loss does not
exceed Restoration Threshold, Borrower may settle and adjust such claim;
provided that (a) no

 

49

 

Event of Default has occurred and is continuing and (b) such adjustment
is carried out in a commercially reasonable and timely manner. In the event of
a Casualty where the loss exceeds the Restoration Threshold or if an Event of
Default then exists, Borrower may settle and adjust such claim only with the
consent of Lender (which consent shall not be unreasonably withheld or delayed)
and Lender shall have the opportunity to participate, at Borrower’s cost, in
any such adjustments. Notwithstanding any Casualty, 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.

 

5.2.2       Condemnation.  Borrower shall give Lender prompt notice of
any actual or threatened Condemnation by any Governmental Authority of all or any
part of the Property and shall deliver to Lender a copy of any and all papers
served in connection with such proceedings. Provided no Event of Default has
occurred and is continuing, in the event of a Condemnation where the amount of
the taking does not exceed the Restoration Threshold, Borrower may settle and
compromise such Condemnation; provided that the same is effected in a
commercially reasonable and timely manner. In the event of a Condemnation where
the amount of the taking exceeds the Restoration Threshold or if an Event of
Default then exists, Borrower may settle and compromise the Condemnation only
with the consent of Lender (which consent shall not be unreasonably withheld or
delayed) and Lender shall have the opportunity to participate, at Borrower’s
cost, in any litigation and settlement discussions in respect thereof and
Borrower shall from time to time deliver to Lender all instruments requested by
Lender 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 Condemnation, 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. Lender shall not be limited to the interest paid on the
Award by any Governmental Authority but shall be entitled to receive out of the
Award interest at the rate or rates provided herein or in the Note. If the
Property or any portion thereof is taken by any Governmental Authority,
Borrower shall, subject to Legal Requirements of any Governmental Authorities,
promptly commence and diligently prosecute the Restoration of the Property and
otherwise comply with the provisions of Section 5.3. 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 outstanding Debt.

 

5.2.3       Casualty Proceeds.  Notwithstanding the last sentence of Section 5.1.1(a)(iii)
and provided no Event of Default exists hereunder, proceeds received by Lender
on account of the business interruption insurance specified in Subsection 5.1.1(a)(iii)
above with respect to any Casualty shall be deposited by Lender directly into
the Deposit Account (as defined in the Cash Management Agreement) to be used to
pay the Monthly Debt Service Payment Amount as it becomes due under the Loan
Documents. Provided no Event of Default exists and Lender reasonably determines
that sufficient other funds will remain available for the payment of all other
amounts due under the Loan Documents, all business interruption insurance
proceeds remaining after the payment of the Monthly Debt Service Payment Amount
shall be released to Mezzanine Lender, if a Mezzanine Loan is outstanding, or
to Borrower, if no Mezzanine Loan is outstanding. Notwithstanding the
foregoing, if such business interruption insurance proceeds are paid to Lender
in a lump sum, then, provided no Event of Default exists, Lender shall disburse
on a monthly basis (i) if a Mezzanine Loan is outstanding, to Mezzanine

 

50

 

Lender, or (ii) if no Mezzanine Loan is outstanding, to Borrower, a
portion of such proceeds in an amount equal to the amount of such proceeds
which represent the Rents for such month less the Monthly Debt Service Payment
Amount due on the Monthly Payment Date in such month. All other such proceeds
shall be held by Lender and disbursed in accordance with Section 5.3 hereof.

 

Section 5.3            Delivery of Net
Proceeds.

 

5.3.1       Minor Casualty or
Condemnation.  If a Casualty or
Condemnation has occurred to the Property and the Net Proceeds (less any
business interruption proceeds) shall be less than the Restoration Threshold
and the costs of completing the Restoration shall be less than the Restoration
Threshold, and provided no Event of Default shall have occurred and remain
uncured, the Net Proceeds will be disbursed by Lender to Borrower. Promptly
after receipt of the Net Proceeds, subject to Legal Requirements of any
Governmental Authorities, Borrower shall commence and satisfactorily complete
with due diligence the Restoration in accordance with the terms of this Article V.
If any Net Proceeds (other than business interruption insurance proceeds
released to Borrower pursuant to Section 5.2.3) are received by Borrower
and may be retained by Borrower pursuant to the terms hereof, such Net Proceeds
shall, until completion of the Restoration, be held in trust for Lender and
shall be segregated from other funds of Borrower to be used to pay for the cost
of Restoration in accordance with the terms hereof.

 

5.3.2       Major Casualty or
Condemnation.  (a)  If a Casualty or Condemnation has occurred to
the Property and the Net Proceeds (less any business interruption proceeds) are
equal to or greater than the Restoration Threshold or the costs of completing
the Restoration is equal to or greater than the Restoration Threshold, Lender
shall make the Net Proceeds available for the Restoration, provided that each
of the following conditions are met:

 

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

 

(ii)           (A)
in the event the Net Proceeds are insurance proceeds, less than thirty percent
(30%) of the total floor area of the Improvements at the Property has been
damaged, destroyed or rendered unusable as a result of such Casualty or (B) in
the event the Net Proceeds are an Award, 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
the subject of the Condemnation;

 

(iii)          Leases (other than Leases expiring on their
own terms at the end of their then-current term) requiring payment of annual
rent equal to seventy percent (70%) of the Gross Revenue received by Borrower
during the twelve (12) month period immediately preceding the Casualty or
Condemnation shall remain in full force and effect during and after completion
of the Restoration without abatement of rent beyond the time required for
Restoration, notwithstanding the occurrence of such Casualty or Condemnation;

 

(iv)          Borrower
shall commence the initial proceedings to commence Restoration (commencement
for purposes hereof shall be deemed to include the filing for a building permit
or other initial permits with respect to such Restoration) as soon as
reasonably practicable (but in no event later than sixty (60) days after such
Casualty or Condemnation,

 

51

 

whichever the case
may be, occurs) and shall diligently pursue the same to satisfactory completion;

 

(v)           Lender
shall be satisfied in its good faith opinion that the Property shall produce
sufficient cash flow to pay all Operating Expenses and all payments of
principal and interest under the Note will be paid during the period required
for Restoration from (A) the Net Proceeds, or (B) other funds of Borrower;

 

(vi)          Lender
shall be satisfied that the Restoration will be completed on or before the
earliest to occur of (A) the date six (6) months prior to the Maturity Date,
(B) the earliest date required for such completion under the terms of any Major
Lease, (C) such time as may be required under 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 (D) the expiration of
the insurance coverage referred to in Section 5.1.1(a)(iii), unless
Borrower deposits sufficient additional funds with Lender as determined by
Lender in good faith;

 

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

 

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

 

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

 

(b)           The
Net Proceeds shall be paid directly to Lender and held by Lender in an
interest-bearing account and, until disbursed in accordance with the provisions
of this Section 5.3.2, shall constitute additional security for the
Debt. 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 requirements set forth in Section 5.3.2(a)
have been satisfied in all material respects, (B) 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 (subject to applicable retainage amounts), and (C) 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 arising out of the Restoration 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.

 

(c)           All
plans and specifications required in connection with the Restoration shall be
subject to prior reasonable approval of Lender and an independent architect
selected by Lender (the “Casualty Consultant”).
The plans and specifications shall require that the Restoration be completed in
a first-class workmanlike manner at least equivalent to the quality and
character of the original work in the Improvements (provided, however, that in
the case of a partial Condemnation, the Restoration shall be done to the extent
reasonably practicable after

 

52

 

taking into
account the consequences of such partial Condemnation), so that upon completion
thereof, the Property shall be at least equal in value and general utility to
the Property prior to the damage or destruction; it being understood, however,
that Borrower shall not be obligated to restore the Property to the precise
condition of the Property prior to such Casualty provided the Property is
restored, to the extent practicable, to be of at least equal value and of
substantially the same character as prior to the Casualty. Borrower shall
restore all Improvements such that when they are fully restored and/or
repaired, such Improvements and their contemplated use fully comply with all
applicable material Legal Requirements. 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 reasonable
approval of Lender and the Casualty Consultant. All reasonable, out-of-pocket
costs and expenses incurred by Lender in connection with recovering, holding
and advancing the Net Proceeds for the Restoration including, without
limitation, reasonable attorneys’ fees and disbursements and the Casualty
Consultant’s fees and disbursements, shall be paid by Borrower.

 

(d)           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, less the Casualty Retainage. The term “Casualty
Retainage” shall mean, as to each contractor, subcontractor or
materialman engaged in the Restoration, 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 5.3.2(d), 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 5.3.2(d)
and that all approvals necessary for the re-occupancy and use of the Property
have been obtained from all appropriate Governmental Authorities, and Lender
receives evidence satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty Retainage;
provided, however, that 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.

 

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

 

53

 

(f)            If
at any time the Net Proceeds or the undisbursed balance thereof shall not, in
the good faith 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 in an interest-bearing account 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 5.3.2 shall constitute
additional security for the Debt.

 

(g)           The
excess, 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 5.3.2, 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 under any of the Loan Documents.

 

(h)           All
Net Proceeds not required to be made available for the Restoration may be
retained and applied by Lender toward the payment of the Debt (and Borrower
shall not be required to pay any Yield Maintenance Premium in connection with
such payment), whether or not then due and payable, first to accrued and unpaid
interest and then to the outstanding principal amount of the Loan. Upon payment
in full of the Debt and in the event a Mezzanine Loan is outstanding, any
remaining Net Proceeds shall be paid to Mezzanine Lender for application in
accordance with the Mezzanine Loan Agreement.

 

VI.                                RESERVE
FUNDS

 

Section 6.1            Intentionally Omitted.

 

Section 6.2            Tax Funds.

 

6.2.1       Deposits of Tax Funds.  Pursuant to the Cash Management Agreement,
upon the occurrence of an Escrow Reserve Trigger Event and during the
continuance of an Escrow Reserve Period, there shall be deposited with Agent on
each Monthly Payment Date an amount equal to one-twelfth of the Taxes that
Lender estimates will be payable during the next ensuing twelve (12) months in
order to accumulate sufficient funds to pay all such Taxes at least ten (10)
days prior to their respective due dates. Amounts deposited pursuant to this Section 6.2.1,
together with interest earned thereon, are referred to herein as the “Tax Funds”. If at any time Lender
reasonably determines that the Tax Funds will not be sufficient to pay the
Taxes, Lender shall notify Borrower of such determination and the monthly
deposits for Taxes shall be increased by the amount that Lender estimates is
sufficient to make up the deficiency at least ten (10) days prior to the
respective due dates for the Taxes; provided that if Borrower receives notice of
any deficiency after the date that is ten (10) days prior to the date that
Taxes are due, Borrower will deposit such amount within one (1) Business Day
after its receipt of such notice. Provided no Escrow Reserve Period exists, all
Tax Funds on deposit shall be promptly returned to Borrower on or before the
following Monthly Payment Date. The Tax Funds shall be held in an
interest-bearing account.

 

54

 

6.2.2       Release of Tax Funds.  During an Escrow Reserve Period, provided no
Event of Default exists, Lender shall apply the Tax Funds to the payment of
Taxes. In making any payment relating to Taxes, Lender shall do so according to
the bill, statement or estimate procured from the appropriate public office (with
respect to Taxes) without inquiry into the accuracy of such bill, statement or
estimate or into the validity of any tax, assessment, sale, forfeiture, tax
lien or title or claim thereof. If the amount of the Tax Funds shall exceed the
amounts due for Taxes, Lender shall, in its sole discretion, return any excess
to Borrower or credit such excess against future payments to be made to the Tax
Funds. Any Tax Funds remaining after the Debt has been paid in full shall be
promptly returned to Borrower.

 

Section 6.3            Insurance Funds.

 

6.3.1       Deposits of Insurance
Funds.  Pursuant to the Cash
Management Agreement, upon the occurrence of an Escrow Reserve Trigger Event
and during the continuance of an Escrow Reserve Period, there shall be
deposited with Agent on each Monthly Payment Date an amount equal to
one-twelfth of the Insurance Premiums that Lender estimates will be payable for
the renewal of the coverage afforded by the Policies upon the expiration
thereof in order to accumulate sufficient funds to pay all such Insurance
Premiums at least thirty (30) days prior to the expiration of the Policies. Amounts
deposited pursuant to this Section 6.3.1, together with interest
earned thereon, are referred to herein as the “Insurance
Funds”. If at any time Lender reasonably determines that the
Insurance Funds will not be sufficient to pay the Insurance Premiums, Lender
shall notify Borrower of such determination and the monthly deposits for
Insurance Premiums shall be increased by the amount that Lender estimates is sufficient
to make up the deficiency at least thirty (30) days prior to expiration of the
Policies. Provided no Escrow Reserve Period exists, all Insurance Funds on
deposit shall be promptly returned to Borrower on or before the following
Monthly Payment Date. The Insurance Funds shall be held in an interest-bearing
account.

 

6.3.2       Release of Insurance
Funds.  During an Escrow Reserve
Period, provided no Event of Default exists, Lender shall apply the Insurance
Funds to the payment of Insurance Premiums. In making any payment relating to
Insurance Premiums, Lender shall do so according to the bill, statement or
estimate procured from the insurer or its agent, without inquiry into the
accuracy of such bill, statement or estimate. If the amount of the Insurance Funds
shall exceed the amounts due for 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 Insurance Funds. Any Insurance Funds remaining after
the Debt has been paid in full shall be promptly returned to Borrower.

 

6.3.3       Waiver of Insurance
Funds.  Notwithstanding anything
to the contrary set forth in this Section 6.3, Borrower shall not be
required to make deposits described in Section 6.3.1 above,
provided Borrower delivers, throughout the term of the Loan, evidence
reasonably satisfactory to Lender that all Insurance Premiums required to be
made by Borrower hereunder shall have been paid under the Beacon Entity’s or
its Affiliate’s blanket insurance policy covering the Property.

 

55

 

Section 6.4            Capital Expenditure
Funds.

 

6.4.1       Deposits of Capital
Expenditure Funds.  Pursuant to
the Cash Management Agreement, upon the occurrence of an Escrow Reserve Trigger
Event and during the continuance of an Escrow Reserve Period, Borrower shall
deposit with Agent on each Monthly Payment Date an amount equal to $12,693 (the
“Monthly Capital Expenditures Deposit”)
for annual Capital Expenditures reasonably approved by Lender. Amounts
deposited pursuant to this Section 6.4.1, together with interest
earned thereon, are referred to herein as the “Capital
Expenditure Funds.” 
Provided no Escrow Reserve Period exists, all Capital Expenditure Funds
on deposit shall be promptly returned to Borrower on or before the following
Monthly Payment Date. The Capital Expenditure Funds shall be held in an
interest-bearing account.

 

6.4.2       Release of Capital
Expenditure Funds.  (a)  Intentionally omitted.

 

(b)           During
an Escrow Reserve Period, provided no Event of Default exists, Lender shall
direct Agent to disburse to Borrower the Capital Expenditure Funds in order to
pay or reimburse Borrower for Capital Expenditures reasonably approved by
Lender. Lender may require that Borrower satisfy the following conditions prior
to directing Agent to make such disbursements: (i) at least ten (10) days prior
to the disbursement, Borrower shall submit to Lender a request for payment,
which request shall specify the Capital Expenditures to be paid, (ii) Lender
shall receive a certificate from Borrower (A) stating that the items to be
funded by the requested disbursement are Capital Expenditures, (B) stating that
all Capital Expenditures (or part thereof) at the Property to be funded by the
requested disbursement have been completed in a good and workmanlike manner and
in accordance with all applicable Legal Requirements, such certificate to be
accompanied by a copy of any license, permit or other approval required by any
Governmental Authority in connection with the Capital Expenditures, (C)
identifying each Person that supplied materials or labor in connection with the
Capital Expenditures to be funded by the requested disbursement, and (D)
stating that each such Person has been paid in full or will be paid in full
(for all work performed to date, exclusive of any applicable retainage) upon
such disbursement, such certificate to be accompanied by lien waivers or other
evidence of payment reasonably satisfactory to Lender (which may be conditional
as to the requested disbursement), (iv) at Lender’s option, if the disbursement
is in excess of $100,000, Lender shall receive a title search for the Property
indicating that the Property is free from all Liens, claims and other
encumbrances not previously approved by Lender other than Permitted
Encumbrances, and (v) Lender shall receive such other evidence as Lender
shall reasonably request that the Capital Expenditures at the Property to be
funded by the requested disbursement have been completed and are paid for or
will be paid (other than retainage, if applicable) upon such disbursement to
Borrower.

 

(c)           Nothing
in this Section 6.4.2 shall (i) make Lender responsible for making
or completing the Capital Expenditures Work; (ii) require Lender to expend
funds in addition to the Capital Expenditure Funds to complete any Capital
Expenditures Work; (iii) obligate Lender to proceed with the Capital
Expenditures Work; (iv) obligate Lender to demand from Borrower additional sums
to complete any Capital Expenditures Work; or (v) if an Event of Default
exists, obligate Lender in any way to disburse any Capital Expenditure Funds.

 

56

 

(d)           Borrower
shall permit Lender and Lender’s agents and representatives (including, without
limitation, Lender’s engineer, architect, or inspector) or third parties to
enter onto the Property upon reasonable advance notice during normal business
hours (subject to the rights of Tenants under their Leases) to inspect the
progress of any Capital Expenditures Work and all materials being used in
connection therewith and to examine all plans and shop drawings relating to
such Capital Expenditures Work. Borrower shall use reasonable efforts to 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 6.4.2(d).

 

(e)           During
an Escrow Reserve Period, if Borrower requests that Capital Expenditure Funds
in excess of $500,000 be paid or reimbursed to Borrower for a Capital
Expenditure reasonably approved by Lender, Lender may, upon completion of such
Capital Expenditure and at its reasonable discretion, require an inspection of
the Property at Borrower’s expense prior to making the final disbursement of
Capital Expenditure Funds for such Capital Expenditure in order to verify
completion of the Capital Expenditures Work for which reimbursement is sought. Lender
may require that such inspection be conducted by an appropriate independent
qualified professional selected by Lender and may require a certificate of
completion by an independent qualified professional architect acceptable to
Lender prior to the disbursement of such Capital Expenditure Funds. Borrower
shall pay the reasonable, out-of-pocket expense of the inspection as required
hereunder, whether such inspection is conducted by Lender or by an independent
qualified professional architect.

 

(f)            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 Capital Expenditures Work. All such
policies shall be in form and amount reasonably satisfactory to Lender.

 

(g)           Any
Capital Expenditure Funds remaining after the Debt has been paid in full shall
be promptly returned to Borrower.

 

Section 6.5            Intentionally Omitted.

 

Section 6.6            Lease Termination
Rollover Funds.

 

6.6.1       Deposits of Lease
Termination Rollover Funds.  In
the event that Borrower receives any fees, payments or other compensation from
any Tenant relating to or in exchange for the termination of such Tenant’s
Lease, which fees, payments and compensation in the aggregate with respect to
such Lease exceed $350,000 (a “Lease Termination Fee”),
Borrower shall immediately deposit such Lease Termination Fee with Lender,
which amounts shall be held in an interest-bearing account, to be utilized for
tenant improvements, leasing commissions and other leasing costs that may be
incurred with respect to the space relating to such Lease Termination Fee (a “Termination Space”) and, in the
event that there is a Rent Deficiency (as hereinafter defined) for the
Termination Space from and after the date that the Lease for the Termination
Space was terminated, in replacement of Rent. Amounts deposited pursuant to
this Section 6.6.1, and any interest earned thereon, are referred
to herein as the “Lease Termination Rollover
Funds”.

 

57

 

6.6.2       Release of Lease
Termination Rollover Funds.  (a)  Lender shall direct Agent to disburse to
Borrower the Lease Termination Rollover Funds upon satisfaction by Borrower of
each of the following conditions: (i) Borrower shall submit a request for
payment to Lender at least ten (10) days prior to the date on which Borrower
requests such payment be made and (A) specifies the tenant improvement costs,
leasing commissions and other leasing costs to be paid for the Termination
Space or (B) specifies the amount by which the rent expected to be obtained by
Borrower for the Termination Space during the next succeeding calendar month
pursuant to the Lease or Leases (if any) for such Termination Space (a “Replacement Lease”) is less than
the amount of monthly rent received from the previous Tenant in the Termination
Space pursuant to its Lease prior to such termination (the “Rent Deficiency”), (ii) 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, (iii) Lender shall have
approved, to the extent required by Section 4.1.9 hereof, the
Replacement Lease (or such Replacement Lease shall have been deemed approved in
accordance with Section 4.1.9 hereof), in respect of which Borrower
is obligated to pay or reimburse certain tenant improvement costs and leasing
commissions, (iv) with respect to any Lease Termination Rollover Funds to be
released by Lender for tenant improvements or leasing commissions pursuant to a
Replacement Lease, Lender shall have received a budget for tenant improvement
costs and a schedule of leasing commissions payments and the requested
disbursement will be used to pay all or a portion of such costs and payments,
(v) with respect to any Lease Termination Rollover Funds to be released by
Lender for tenant improvements or leasing commissions pursuant to a Replacement
Lease, Lender shall have received a certificate from Borrower (A) stating that
all tenant improvements at the Property 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 certificate to be accompanied by a copy of any license,
permit or other approval by any Governmental Authority required in connection
with the tenant improvements, (B) identifying each Person that supplied
materials or labor in connection with the tenant improvements to be funded by
the requested disbursement, and (C) stating that each such Person has been paid
in full or will be paid in full upon such disbursement for work performed to
date subject to applicable retainage (if any), such certificate to be
accompanied by lien waivers or other evidence of payment reasonably
satisfactory to Lender (which may be conditional as to the requested
disbursement), (vi) with respect to any Lease Termination Rollover Funds to be
released by Lender for tenant improvements or leasing commissions pursuant to a
Replacement Lease, at Lender’s option, if the disbursement is in excess of
$100,000, a title search for the Property indicating that the Property is free
from all Liens, claims and other encumbrances not previously approved by Lender
other than Permitted Encumbrances and (vii) with respect to any Lease
Termination Rollover Funds to be released by Lender for tenant improvements
pursuant to a Replacement Lease, Lender shall have received such other evidence
as Lender shall reasonably request that the tenant improvements at the Property
to be funded by the requested disbursement have been completed and are paid for
or will be paid upon such disbursement to Borrower (subject to retainage
amounts, if applicable). Lender shall not be required to disburse Lease
Termination Rollover Funds more frequently than once each calendar month,
unless such requested disbursement is in an amount greater than the Minimum
Disbursement Amount (or a lesser amount if the total amount of Lease
Termination Rollover Funds is less than the Minimum Disbursement Amount, in
which case only one disbursement of the amount remaining in the account shall
be made). All Rent Deficiency disbursements made by Lender shall be deposited

 

58

 

into the Clearing Account as if such sums were received by Borrower as
Rent during the calendar month after such request is made by Borrower.

 

(b)           Notwithstanding
the foregoing, upon receipt by Lender of evidence that, with respect to any new
Replacement Lease with a term of at least five (5) years, all tenant
improvements required to be completed by Borrower pursuant to the Replacement
Lease, if any, have been completed and all leasing commissions required to be
paid by Borrower with respect to the Replacement Lease, if any, have been paid,
and provided no Event of Default then exists, Lender shall direct Agent to
disburse to Borrower the Lease Termination Rollover Funds on deposit with
respect to such Termination Space. Any Lease Termination Rollover Funds
remaining after the Debt has been paid in full shall be promptly returned to
Borrower.

 

Section 6.7            Unfunded Tenant
Allowances Fund.  On the Closing
Date, Borrower has deposited with Lender the sum of $578,508.44 to be held by
Lender in an interest-bearing account, which amount shall be disbursed to
Borrower pursuant to this Section 6.7 for Unfunded Tenant Allowances associated
with the Leases set forth on Schedule VI attached hereto, and the amount
of such disbursements shall not exceed the amount of Unfunded Tenant Allowances
set forth on Schedule VI. Amounts so deposited with Lender and all
interest earned thereon shall hereinafter be referred to as the “Unfunded Tenant Allowance Reserve Funds”
and the account to which such amounts are held shall hereinafter be referred to
as the “Unfunded Tenant Allowance Reserve Account”.
Lender shall disburse to Borrower Unfunded Tenant Allowance Reserve Funds for
tenant improvements or any other cost represented by the relevant Unfunded
Tenant Allowance provided (i) Borrower submits to Lender a request for payment
on Lender’s standard form of draw request or other form reasonably acceptable
to Lender at least five (5) Business Days prior to the date on which Borrower
requests such payment be made, (ii) on the date such payment is to be made, no Event
of Default shall exist and remain uncured, (iii) Lender shall have received a
certificate from Borrower certifying that any conditions to the disbursement of
funds set forth in the applicable Lease have been satisfied, (iv) if
applicable, such certificate is accompanied by paid invoices (or unpaid
invoices if such disbursement is being made to pay such invoices) for the
amounts requested, and (v) the aggregate amount of any such disbursements for
any Lease shall not exceed the amount of Unfunded Tenant Allowance designated
for each Lease on Schedule VI attached hereto. Lender shall not be
required to disburse funds more frequently than once each calendar month, and
all disbursements shall be in an amount greater than the Minimum Disbursement
Amount (provided, however, that the last disbursement of funds with respect to
any applicable Lease from the Unfunded Tenant Allowance Reserve Account may be
less than the Minimum Disbursement Amount). Provided no Event of Default
exists, all funds remaining in the Unfunded Tenant Allowance Reserve Account
after all disbursements of the Unfunded Tenant Allowance Reserve Funds have
been made in accordance with this Section 6.7 shall be released to
Borrower, along with any interest earned thereon; provided, however, if
Borrower can demonstrate to Lender’s reasonable satisfaction that the full
amount of all Unfunded Tenant Allowances owed to a tenant under a particular
Lease have been funded by Lender to Borrower pursuant to the terms set forth in
this Section 6.7, then, provided no Event of Default exists, any excess
Unfunded Tenant Allowance Reserve Funds remaining in the Unfunded Tenant
Allowance Reserve Account and allocated to such Lease shall be disbursed to
Borrower.

 

59

 

The
funds deposited by Borrower into the Unfunded Tenant Allowance Reserve Account
represent Unfunded Tenant Allowances with respect to Leases for the following
tenant (collectively, the “UTA Leases”):
 The University of Illinois (in the
amount of $578,508.44). Lender and Borrower acknowledge and agree that Borrower
is not required to deposit (and has not deposited with Lender) any funds with
respect to Unfunded Tenant Allowances applicable to any Lease other than the
UTA Leases, and no Unfunded Tenant Allowance Reserve Funds shall be disbursed
by Lender with respect to any Unfunded Tenant Allowances for any Leases other
than the UTA Leases.

 

Section 6.8            Intentionally Omitted.

 

Section 6.9            Application of
Reserve Funds.  Upon the
occurrence and during the continuance of an Event of Default, Lender, at its
option, may withdraw the Reserve Funds and apply the Reserve Funds to the items
for which the Reserve Funds were established or to 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 Reserve Funds shall be in addition to all other
rights and remedies provided to Lender under the Loan Documents.

 

Section 6.10         Security Interest in
Reserve Funds.

 

6.10.1     Grant of Security Interest.  Borrower shall be the owner of the Reserve
Funds. Borrower hereby pledges, assigns and grants a security interest to
Lender, as security for payment of the Debt and the performance of all other
terms, conditions and covenants of the Loan Documents on Borrower’s part to be
paid and performed, in all of Borrower’s right, title and interest in and to
the Reserve Funds. The Reserve Funds shall be under the sole dominion and
control of Lender.

 

6.10.2     Income Taxes.  Borrower shall report on its federal, state
and local income tax returns all interest or income accrued on the Reserve
Funds.

 

6.10.3     Prohibition Against
Further Encumbrance.  Borrower
shall not, without the prior consent of Lender, further pledge, assign or grant
any security interest in the Reserve Funds 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.

 

Section 6.11         Letters of Credit.

 

6.11.1     Delivery of Letters of
Credit.  (a)  In lieu of making the payments to any of the
Reserve Funds, Borrower may deliver to Lender a Letter of Credit in accordance
with the provisions of this Section 6.11. Additionally, Borrower
may deliver to Lender a Letter of Credit in accordance with the provisions of
this Section 6.11 in lieu of deposits previously made to the
Reserve Funds. The aggregate amount of any Letter of Credit and cash on deposit
with respect to the Capital Expenditure Funds, the Lease Termination Rollover
Funds and/or the Unfunded Tenant Allowance Reserve Funds shall at all times be
at least equal to the aggregate amount which Borrower is required to have on
deposit in such Reserve Fund pursuant to this Agreement. The aggregate amount
of any Letter of Credit and cash on deposit with respect to the Tax Funds shall
at all times be at least equal to the aggregate which Borrower would be
required to deposit

 

60

 

in such Reserve Fund over the next twelve (12) month period. The
aggregate amount of any Letter of Credit and cash on deposit with respect to
the Insurance Funds shall at all times be at least equal to the aggregate which
Borrower would be required to deposit in such Reserve Fund over the next twelve
(12) month period. In the event that a Letter of Credit is delivered in lieu of
any portion of the Tax Funds or the Insurance Funds, Borrower shall be
responsible for the payment of Taxes or Insurance Premiums, as applicable, and
Lender shall not be responsible therefor.

 

(b)           Borrower
shall give Lender no less than thirty (30) days notice of Borrower’s election
to deliver a Letter of Credit and Borrower shall pay to Lender all of Lender’s
reasonable out-of-pocket costs and expenses in connection therewith. Borrower
shall not be entitled to draw from any such Letter of Credit. Upon thirty (30)
days notice to Lender, Borrower may replace a Letter of Credit with a cash
deposit to the applicable Reserve Fund if a Letter of Credit has been outstanding
for more than six (6) months. Prior to the return of a Letter of Credit,
Borrower shall deposit an amount equal to the amount that would have
accumulated in the applicable Reserve Fund and not been disbursed in accordance
with this Agreement if such Letter of Credit had not been delivered.

 

(c)           Borrower
shall provide Lender with notice of any increases in the annual payments for
Taxes and Insurance Premiums thirty (30) days prior to the effective date of
any such increase and any applicable Letter of Credit shall be increased by
such increased amount at least ten (10) days prior to the effective date of
such increase.

 

Section 6.12         Provisions Regarding
Letters of Credit.

 

6.12.1     Security for Debt.  Each Letter of Credit delivered under this
Agreement shall be additional security for the payment of the Debt. Upon the
occurrence of an Event of Default, Lender shall have the right, at its option,
to draw on any Letter of Credit and to apply all or any part thereof to the
payment of the items for which such Letter of Credit was established or to
apply each such Letter of Credit to payment of the Debt in such order,
proportion or priority as Lender may determine. Any such application to the
Debt shall be subject to the Yield Maintenance Premium. On the Maturity Date,
any such Letter of Credit may be applied to reduce the Debt.

 

6.12.2     Additional Rights of
Lender.  In addition to any other
right Lender may have to draw upon a Letter of Credit pursuant to the terms and
conditions of this Agreement, Lender shall have the additional rights to draw
in full any Letter of Credit:  (a) with
respect to any evergreen Letter of Credit, if Lender has received a notice from
the issuing bank that the Letter of Credit will not be renewed and a substitute
Letter of Credit is not provided at least thirty (30) days prior to the date on
which the outstanding Letter of Credit is scheduled to expire; (b) with respect
to any Letter of Credit with a stated expiration date, if Lender has not
received a notice from the issuing bank that it has renewed the Letter of
Credit at least thirty (30) days prior to the date on which such Letter of
Credit is scheduled to expire and a substitute Letter of Credit is not provided
at least thirty (30) days prior to the date on which the outstanding Letter of
Credit is scheduled to expire; (c) upon receipt of notice from the issuing bank
that the Letter of Credit will be terminated (except if the termination of such
Letter of Credit is permitted pursuant to the terms and conditions of this
Agreement or a substitute Letter of Credit is provided); or (d) if

 

61

 

Lender has received notice that the bank issuing the Letter of Credit
shall cease to be an Eligible Institution. Notwithstanding anything to the contrary
contained in the above, Lender is not obligated to draw any Letter of Credit
upon the happening of an event specified in (a), (b), (c) or (d) above and
shall not be liable for any losses sustained by Borrower due to the insolvency
of the bank issuing the Letter of Credit if Lender has not drawn the Letter of
Credit.

 

VII.                            PROPERTY
MANAGEMENT

 

Section 7.1            The Management
Agreement.  Borrower shall cause
Manager to manage the Property in accordance with the Management Agreement and
Lender acknowledges that the Management Agreement has been approved by Lender. Borrower
shall (i) diligently perform and observe all of the terms, covenants and
conditions of the Management Agreement on the part of Borrower to be performed
and observed and (ii) promptly notify Lender of any notice to Borrower of any
default by Borrower in the performance or observance of any of the terms,
covenants or conditions of the Management Agreement on the part of Borrower to
be performed and observed. If Borrower shall default, beyond the expiration of
any applicable notice and cure period, in the performance or observance of any
material term, covenant or condition of the Management Agreement on the part of
Borrower to be performed or observed, then, without limiting Lender’s other
rights or remedies under this Agreement or the other Loan Documents, and
without waiving or releasing Borrower from any of its obligations hereunder or
under the Management Agreement, Lender shall have the right, but shall be under
no obligation, to pay any sums and to perform any act as may be appropriate to
cause all the material terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed or observed.

 

Section 7.2            Prohibition Against
Termination or Modification.  Borrower
shall not surrender, terminate, cancel or materially modify the Management
Agreement, or enter into any other agreement relating to the management or
operation of the Property with Manager or any other Person, or consent to the
assignment by the Manager of its interest under the Management Agreement, in
each case without the express consent of Lender, which consent shall not be
unreasonably withheld; provided, however, the Borrower shall have
the right at any time upon at least thirty (30) days notice to Lender to
replace the Manager with a new property manager provided (i) no Event of
Default exists or shall occur as a result of such replacement, (ii) either (A)
such replacement property manager is a Qualified Manager or (B) if such
replacement property manager is not a Qualified Manager and a Securitization
has occurred, Borrower delivers to Lender a Rating Agency Confirmation as to
such new property manager and property management agreement, and (iii) the
property management agreement entered into between the Borrower and such
replacement property manager shall be subject to Lender’s approval, which
approval shall not be unreasonably withheld. If any new property manager is an
Affiliate of Borrower, then, as a further condition to the replacement of the Manager,
Borrower shall be required to deliver to Lender a non-consolidation opinion
acceptable to Lender (or, in the event that a Securitization shall have
occurred, acceptable to the Rating Agencies). Any such new property manager and
Borrower shall, as a further condition to the replacement of the Manager,
execute a subordination of management agreement in the form delivered in
connection with the Loan.

 

62

 

Section 7.3            Replacement of
Manager.  Lender shall have the right
to require Borrower to replace the Manager with a Person which is not an
Affiliate of, but is chosen by, Borrower and approved by Lender (which approval
shall not be unreasonably withheld or delayed) upon the occurrence of any one
or more of the following events: (i) at any time following the occurrence and
during the continuance of an Event of Default, (ii) the Maturity Date occurs
and the Loan has not been paid and satisfied in full, and/or (iii) if Manager
shall be in material default under the Management Agreement beyond any
applicable notice and cure period or if at any time the Manager has engaged in
gross negligence, fraud or willful misconduct.

 

VIII.                        PERMITTED
TRANSFERS

 

Section 8.1            Permitted Transfer of
the Property.  Lender shall not
withhold its consent to a conveyance of the Property in its entirety to any
transferee provided that (a) Lender has received an agreement, acceptable to it
in its reasonable discretion, pursuant to which such transferee assumes all of
Borrower’s obligations under the Loan Documents, (b) Lender receives a transfer
fee equal to Seventy-Five Thousand and No/100 Dollars ($75,000.00) if such
transfer is to an entity other than Beacon Entity or any entity at least fifty
one percent (51%) owned directly or indirectly by Beacon Entity, (c) Lender
shall have received such documents, certificates and legal opinions as it may
reasonably request, (d) no Event of Default shall have occurred and be
continuing hereunder, and, if a Mezzanine Loan is outstanding, no “Event of
Default” has occurred and is continuing under the Mezzanine Loan Agreement, (e)
Borrower shall pay all reasonable, out-of-pocket costs and expenses of Lender
in connection with such transfer, (f) either (i) such transferee is a Permitted
Transferee or (ii) if such transferee is not a Permitted Transferee, Lender
shall have approved such transferee (such approval not to be unreasonably
withheld, conditioned or delayed) and, if any Securities are outstanding,
Lender has received a Rating Agency Confirmation as to the conveyance of the
Property, (g) the transferee qualifies as a single purpose, bankruptcy remote
entity under criteria established by the Rating Agencies, and (h) there is
delivered to Lender a non-consolidation opinion acceptable to the Rating
Agencies (or if no Securities are outstanding at the time, acceptable to Lender
in its reasonable discretion). If a Mezzanine Loan is outstanding, Borrower
shall not be permitted to transfer the Property unless Borrower obtains the
prior written consent of Mezzanine Lender to the extent required by the
Mezzanine Loan Agreement. In the event that such conveyance is a transfer of
the Property in its entirety to a Person that is not an Affiliate of Borrower
or Guarantor, the current Guarantor shall be released from and relieved of any
of its obligations under (x) the Guaranty arising or occurring after the date
of such conveyance or transfer (other than for any acts or events which were
caused by or arise out of any acts, events or omissions of Guarantor, Borrower
or its Affiliates occurring prior to such conveyance) and (y) the Environmental
Indemnity (other than for any claims against such Guarantor existing on the
date of such conveyance or transfer) provided  that, and as a
condition to such release, (1) Borrower delivers to Lender a Rating Agency
Confirmation with respect to such replacement Guarantor, (2) an Affiliate of
the transferee of the Property approved by the Lender (in its reasonable
discretion) assumes the obligations of the current Guarantor under the Guaranty
(as to any acts or events which occur after the conveyance or transfer) and the
Environmental Indemnity (as to any liability thereunder other than for any
claims against the previous Guarantor existing on the date of such conveyance
or transfer) and (3) if applicable but subject to the provisions in subsection

 

63

 

(2) above, such new Guarantor executes, without any cost or expense to
Lender, a substitution agreement or a new Guaranty or a new Environmental
Indemnity in substantially the same form as the Guaranty and Environmental
Indemnity executed as of the date hereof.

 

Section 8.2            Permitted Transfers of
Interest in Borrower.

 

(a)           Notwithstanding
anything to the contrary contained in the Loan Documents, the restrictions on
transfers and other conveyances (excluding pledges) of direct or indirect
ownership interests in Borrower (including, without limitation, direct or
indirect interests in Beacon Entity) set forth herein, in the Mortgage or in any
other Loan Document shall not apply to the transfer (excluding pledges) of
direct or indirect interests in Borrower (including, without limitation, direct
or indirect interests in Beacon Entity) provided that (i) no Event of Default
shall have occurred and be continuing, (ii) Borrower shall pay all reasonable
out-of-pocket costs and expenses of Lender in connection with such transfer,
(iii) Lender shall have received such documents, certificates and legal
opinions as it may reasonably request, (iv) after such transfer Borrower shall
maintain its status as a single purpose, bankruptcy remote entity under
criteria established herein, (v) if after giving effect to such transfer and
all prior transfers, more than forty nine percent (49%) in the aggregate of direct
or indirect interests in Borrower are owned by any Person and its Affiliates
that owned less than a forty nine percent (49%) direct or indirect interest in
Borrower as of the Closing Date, Lender shall receive a non-consolidation
opinion reasonably acceptable to Lender and acceptable to the Rating Agencies
and (vi) following such transfer (x) Beacon Entity owns directly or indirectly
twenty five percent (25%) or more of the interests in Borrower and directly or
indirectly controls Borrower or (y) Permitted Transferees own in the aggregate
directly or indirectly fifty-one percent (51%) or more of the interests in
Borrower and directly or indirectly controls Borrower, provided Mezzanine
Lender, if any, approves such Permitted Transferee in accordance with and to
the extent required by the Mezzanine Loan Agreement, or (z) another Person (A)
which Lender has approved (such approval not to be unreasonably withheld,
conditioned or delayed), and if any Securities are outstanding, with respect to
which Lender has received a Rating Agency Confirmation; and which Mezzanine
Lender, if any, has approved in accordance with and to the extent required by
the Mezzanine Loan Agreement, and (B) owns in the aggregate directly or
indirectly fifty-one percent (51%) or more of the interests in Borrower and
directly or indirectly controls Borrower. For purposes of this Section 8.2,
“control” shall mean the ability to control the day to day and general
management decisions regarding the Property. In the event that any such conveyance
or transfer of any direct or indirect interests in Borrower results in the then
current Guarantor and its Affiliates owning directly or indirectly no legal or
beneficial interests in Borrower, then the current Guarantor shall be released
from and relieved of any of its obligations under the (x) the Guaranty arising
or occurring after the date of such conveyance or transfer (other than for any
acts or events which were caused by or arise out of any acts, events or
omissions of Guarantor, Borrower or its Affiliates occurring prior to such
conveyance) and (y) the Environmental Indemnity (other than for any claims
against such Guarantor existing on the date of such conveyance or transfer) provided
that, and as a condition to such release, (1) Borrower delivers to
Lender a Rating Agency Confirmation with respect to such replacement Guarantor,
(2) an Affiliate of the transferee of the Property approved by the Lender (in
its reasonable discretion) assumes the obligations of the current Guarantor
under the Guaranty (as to any acts or events which occur after the conveyance
or transfer) and the Environmental Indemnity (as to any liability thereunder
other than for any claims against the previous Guarantor existing on the date

 

64

 

of such conveyance
or transfer) and (3) if applicable but subject to the provisions in subsection
(2) above, such new Guarantor executes, without any cost or expense to Lender,
a substitution agreement or a new Guaranty or a new Environmental Indemnity in
substantially the same form as the Guaranty and Environmental Indemnity
executed as of the date hereof.

 

(b)           Notwithstanding
anything in this Agreement or the other Loan Documents to the contrary, there
shall be no limit on the ability of the direct or indirect owners of Borrower
(including, without limitation, the direct and indirect owners of Beacon
Entity) to Transfer (including, without limitation, pledge) their direct or
indirect interests in Borrower (including, without limitation, direct or
indirect interests in Beacon Entity) without the consent of or notice to
Lender, the Rating Agencies or any other Person provided that if, after
giving effect to such pledge or transfer and all prior pledges or transfers,
more than forty nine percent (49%) in the aggregate of direct or indirect
interests in Borrower are owned by any Person and its Affiliates that owned
less than a forty nine percent (49%) direct or indirect interest in Borrower as
of the Closing Date, Lender shall receive a non-consolidation opinion
acceptable to the Rating Agencies (or if no Securities are outstanding at the
time, acceptable to Lender in its reasonable discretion); provided, further,
however, that the following entities may not pledge their direct or indirect
interests in Borrower except in connection with a Mezzanine Loan: BCSP IV
Illinois Properties Business Trust, BCSP IV U.S. Investments, L.P., BCSP REIT
IV, Inc., and Beacon Entity.

 

IX.                                SALE
AND SECURITIZATION OF MORTGAGE

 

Section 9.1            Sale of Mortgage and
Securitization.

 

(a)           Lender
shall have the right (i) to sell or otherwise transfer the Loan or any portion
thereof as a whole loan, (ii) to sell participation interests in the Loan or
(iii) to securitize the Loan or any portion thereof in a single asset securitization
or a pooled loan securitization (the transactions referred to in clauses (i),
(ii) and (iii) shall hereinafter be referred to collectively as “Secondary Market Transactions” and
the transactions referred to in clause (iii) shall hereinafter be referred to
as a “Securitization.”  Any certificates, notes or other securities
issued in connection with a Securitization are hereinafter referred to as “Securities”).

 

(b)           If
requested by Lender, for so long as the Loan is outstanding, Borrower shall in
connection with any Secondary Market Transaction:

 

(i)            (A)
provide updated financial and other information with respect to the Property,
the business operated at the Property, Borrower and the Manager, (B) provide
updated budgets relating to the Property and (C) provide updated appraisals,
market studies, environmental reviews (Phase I’s and, if appropriate, Phase II’s),
property condition reports and other due diligence investigations of the
Property (the “Updated Information”),
together, if customary, with appropriate verification of the Updated
Information through letters of auditors or opinions of counsel acceptable to
Lender and the Rating Agencies;

 

(ii)           provide
opinions of counsel, which may be relied upon by Lender and the Rating
Agencies, as to non-consolidation, fraudulent conveyance, and true sale or any
other opinion customary in Secondary Market Transactions or required by the
Rating Agencies with

 

65

 

respect to the
Property and Borrower and Affiliates, which counsel and opinions shall be
reasonably satisfactory to Lender and satisfactory to the Rating Agencies;

 

(iii)          provide updated, as of the closing date of
the Secondary Market Transaction, representations and warranties made in the
Loan Documents and such additional representations and warranties as the Rating
Agencies may require and consistent with the facts covered by the
representations and warranties contained in this Agreement; and

 

(iv)          execute
amendments to the Loan Documents and Borrower’s organizational documents
reasonably requested by Lender; provided, however, that Borrower shall not be
required to modify or amend any Loan Document if such modification or amendment
would (A) change the interest rate, the stated maturity or the amortization of
principal as set forth herein or in the Note, (B) modify or amend any other
material economic term of the Loan or (C) otherwise materially increase the
obligations or decrease the rights of Borrower under the Loan Documents.

 

Notwithstanding
the foregoing, Lender shall (unless Borrower shall otherwise be required to
deliver any of the foregoing under another provision of this Agreement at its
cost and expense) (x) pay the costs and expenses incurred by Lender with
respect to the issuance of any Securities and any other costs and expenses
incurred by Lender in connection with a Securitization and (y) reimburse
Borrower for all reasonable third party fees (including the reasonable fees and
disbursements of Borrower’s attorneys) actually incurred by Borrower in
connection with Borrower’s cooperation with Lender pursuant to this Section 9.1(b).

 

(c)           If
requested by Lender, Borrower shall provide Lender with the following financial
statements:

 

(i)            If,
at the time a Disclosure Document is being prepared for a Securitization,
Lender expects that Borrower alone or Borrower and one or more Affiliates of
Borrower collectively, or the Property alone or the Property and Related
Property collectively, will be a Significant Obligor, Borrower shall furnish to
Lender upon request (x) the selected financial data relating to Borrower or the
Property or, if applicable, Net Operating Income, required under Item
1112(b)(1) of Regulation AB, 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 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 (y) the financial statements relating to
Borrower or the Property required under Item 1112(b)(2) of Regulation AB, 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 does, equal or exceed twenty percent (20%) of the aggregate
principal amount of all mortgage loans included or expected to be included, as
applicable, in the Securitization. Such financial data or financial statements
shall be furnished to Lender (A) within ten (10) Business Days after
notice from Lender in connection with the preparation of Disclosure Documents
for the Securitization, (B) not later than forty (40) days after the end
of each fiscal quarter of Borrower and (C) not later than eighty-five (85) days
after the end of each

 

66

 

Fiscal Year of
Borrower; provided, however, that Borrower shall not be obligated
to furnish financial data or financial statements pursuant to clauses (B) or
(C) of this sentence with respect to any period for which a filing pursuant to
the Exchange Act in connection with or relating to the Securitization (an “Exchange Act Filing”) is not required. If
requested by Lender, Borrower shall use commercially reasonable efforts to
obtain and deliver to Lender financial data and/or financial statements for any
tenant of the Property if, in connection with a Securitization, Lender expects
there to be, with respect to such tenant or group of Affiliated tenants, a
concentration within all of the mortgage loans included or expected to be
included, as applicable, in the Securitization such that such tenant or group
of affiliated tenants would constitute a Significant Obligor.

 

(ii)           All
financial data and financial statements provided by Borrower hereunder pursuant
to this Section 9.1(c) shall meet the requirements of Regulation AB and
other applicable legal requirements. All financial statements referred to in Section 9.1(c)(i)(y)
above shall be audited by independent accountants of Borrower reasonably acceptable
to Lender in accordance with Regulation AB and all other applicable legal
requirements, shall be accompanied by the manually executed report of the
independent accountants thereon, which report shall meet the requirements of
Regulation AB and all other applicable legal requirements, and shall be further
accompanied by a manually executed written consent of the independent
accountants, in form and substance reasonably acceptable to Lender, to the
inclusion of such financial statements in any Disclosure Document and any
Exchange Act Filing and, if available to Borrower on a commercially reasonable
basis, to the use of the name of such independent accountants and the reference
to such independent accountants as “experts” in any Disclosure Document and Exchange
Act Filing, all of which shall be provided at the same time as the related
financial statements are required to be provided. All other financial data and
financial statements (i.e., unaudited)
provided by Borrower pursuant to this Section 9.1(c) shall be
accompanied by an Officer’s Certificate stating the financial information
attached thereto is true, accurate and complete in all material respects, but
with no obligation to certify as to compliance with Regulation AB.

 

(iii)          If requested by Lender in connection with a
securitization, Borrower shall provide Lender, promptly upon request, with any
other or additional financial statements, or financial, statistical or
operating information, as Lender shall determine in good faith to be required
pursuant to Regulation AB or any amendment, modification or replacement
thereto or other legal requirements in connection with any Disclosure Document
or any Exchange Act Filing or as shall otherwise be reasonably requested by
Lender to meet disclosure or rating agency requirements.

 

(iv)          In
the event Lender determines in good faith, in connection with a Securitization,
that the financial statements required in order to comply with
Regulation AB or any amendment, modification or replacement thereto or
other legal requirements are other than as provided herein, then
notwithstanding the provisions of Section 9.1(c)(ii) hereof, Lender
may request, and Borrower shall promptly provide, such other financial data and
financial statements as Lender determines in good faith to be necessary or
appropriate for such compliance.

 

(v)           Any
reports, statements or other information required to be delivered pursuant to
this Section 9.1(c) shall be delivered (i) in paper form,
(ii) on a diskette, and (iii) if

 

67

 

requested by
Lender and within the capabilities of Borrower’s data systems without change or
modification thereto, in electronic form and prepared using a 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 9.1(c)(v) in connection
with the Securitization to such parties requesting such information in
connection with such Securitization.

 

Lender
shall (unless Borrower shall otherwise be required to deliver any of the
foregoing under another provision of this Agreement at its cost and expense)
reimburse Borrower for all reasonable third party fees (including the
reasonable fees and disbursements of Borrower’s attorneys) actually incurred by
Borrower in connection with Borrower’s delivery of financial statements and
other materials requested by Lender pursuant to this Section 9.1(c).

 

Section 9.2            Securitization
Indemnification.

 

(a)           Borrower
understands that information provided to Lender by Borrower and its agents,
counsel and representatives may be included in disclosure documents in
connection with the Securitization, including, without limitation, an offering
circular, a prospectus, prospectus supplement, private placement memorandum or
other offering document (each, an “Disclosure Document”)
and may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the “Securities
Act”), or the Securities and Exchange Act of 1934, as amended
(the “Exchange Act”), and may be made
available to investors or prospective investors in the Securities, the Rating
Agencies, and service providers relating to the Securitization.

 

(b)           Borrower
shall provide in connection with each of (i) a preliminary and a final private
placement memorandum or (ii) a preliminary and final prospectus or prospectus
supplement, as applicable, an agreement (A) certifying that Borrower has
examined the sections of the Disclosure Documents delivered by Lender to
Borrower relating solely to Borrower, Borrower Affiliates, the Property, and
the Manager (the “Specified Sections”),
and that such Specified Sections do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading or specifying such untrue statement (it being agreed that
Borrower shall not be required to review any other sections of the Disclosure
Document other than the Specified Sections), (B) indemnifying Lender (and for
purposes of this Section 9.2, Lender hereunder shall include its
officers and directors), the Affiliate of Lehman Brothers Inc. (“Lehman Brothers”) that has filed
the registration statement relating to the Securitization (the “Registration Statement”), each of
its directors, each of its officers who have signed the Registration Statement
and each Person that controls the Affiliate within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively, the “Lehman Brothers Group”),
Lehman Brothers, any other placement agent or underwriter with respect to the
Securitization, each of their respective directors and each Person who controls
Lehman Brothers or any other placement agent or underwriter within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange
Act (collectively, the “Underwriter Group”)
for any losses, claims, damages or liabilities (collectively, the “Liabilities”) to which Lender, the
Lehman Brothers Group or the Underwriter Group may become subject insofar as

 

68

 

the Liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such Specified Sections or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated in such sections or necessary in order to make the
statements in such Specified Sections, in light of the circumstances under
which they were made, not misleading (it being agreed that Borrower shall not
be responsible for any losses which would not have been suffered if Lender had
corrected any statements contained in the Specified Sections identified by
Borrower in writing to have been untrue or misleading) and (C) agreeing to
reimburse Lender, the Lehman Brothers Group and/or the Underwriter Group for
any legal or other expenses reasonably incurred by Lender, the Lehman Brothers
Group and the Underwriter Group in connection with investigating or defending
the Liabilities; provided, however, that Borrower will be liable in any such
case under clauses (B) or (C) above only to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender in its capacity as “lender” hereunder by or on
behalf of Borrower in connection with the preparation of the Disclosure
Document or in connection with the underwriting or closing of the Loan,
including, without limitation, financial statements of Borrower, operating
statements and rent rolls with respect to the Property and provided further,
however, that with respect to statements made in such Specified Sections that
are based upon information provided by third parties, Borrower will be liable
only if Borrower knew that such information was false or omitted to state a
material fact known to Borrower and necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading.
This indemnity agreement will be in addition to any liability which Borrower
may otherwise have.

 

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

 

(d)           Promptly
after receipt by an indemnified party under this Section 9.2 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 9.2, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein
and, to the extent that it (or they) may elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying
party to such indemnified party under this Section 9.2, such

 

69

 

indemnified party
shall pay for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there are any legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party at the cost of the indemnifying
party. The indemnifying party shall not be liable for the expenses of more than
one separate counsel unless an indemnified party shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to another indemnified party.

 

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

 

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

 

X.                                    DEFAULTS

 

Section 10.1         Event of Default.

 

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

 

(i)            if
(A) any monthly installment of interest due under the Note or the payment due
on the Maturity Date is not paid when due or (B) any other portion of the Debt
is not paid when due and such non-payment continues for five (5) days following
notice to Borrower that the same is due and payable;

 

(ii)           if
any of the Taxes or Other Charges are not paid when due (other than Taxes and
Other Charges for which funds have been deposited with Lender pursuant to Article VI
and the release of which Borrower is not contesting);

 

70

 

(iii)          if the Policies are not kept in full
force and effect (other than as a result of failure to pay the Insurance
Premiums for which funds have been deposited with Lender pursuant to Article VI);

 

(iv)                              subject to Section 4.2.2, if Borrower
breaches or permits or suffers a breach of Article 6 of the Mortgage;

 

(v)                                 if any 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 by or on behalf of Borrower shall have been false or misleading in any
material respect as of the date the representation or warranty was made;

 

(vi)                              if Borrower, any SPC Party or Guarantor shall
make an assignment for the benefit of creditors;

 

(vii)                           if a receiver, liquidator or trustee shall be
appointed for Borrower, any SPC Party or Guarantor or if Borrower, any SPC
Party 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, any SPC Party or
Guarantor, or if any proceeding for the dissolution or liquidation of Borrower,
any SPC Party or Guarantor shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower, and SPC Party or Guarantor, upon the same not being
discharged, stayed or dismissed within ninety (90) 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 any of the assumptions contained in the
Insolvency Opinion, or in any other non-consolidation opinion delivered to
Lender in connection with the Loan, or in any other non-consolidation opinion
delivered subsequent to the closing of the Loan, is or shall become untrue in
any material respect;

 

(x)                                   if Borrower breaches any representation,
warranty or covenant contained in Section 3.1.24 hereof in any
material respect;

 

(xi)                                if Borrower fails to comply with the
covenants as to Prescribed Laws set forth in Section 4.1.1;

 

(xii)                             if there shall be default under any of the
Loan Documents beyond any applicable cure periods contained in such Loan
Documents, whether as to Borrower or the Property;  

 

(xiii)                          Intentionally Omitted.

 

(xiv)                         if Borrower or any Affiliate shall continue
to be in Default under any of the other terms, covenants or conditions of this
Agreement or any other Loan Document not

 

71

 

specified in subsections (i)
to (xii) above, 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 30-day period and provided further that
Borrower shall have commenced to cure such Default within such 30-day period
and thereafter diligently and expeditiously proceeds to cure the same, such
30-day period shall be extended for such time as is reasonably necessary for
Borrower in the exercise of due diligence to cure such Default, such additional
period not to exceed ninety (90) days plus time permitted for Excusable Delays;
or

 

(xv)                            if any other such event shall occur or
condition shall exist, if the effect of such event or condition under any Loan
Document 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 clause (vi), (vii) or (viii)
above) and at any time thereafter during the continuance of an Event of Default
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,
take such action, without notice or demand, that Lender deems advisable to
protect and enforce its rights against Borrower and in and to the Property,
including, without limitation, declaring the Debt to be immediately due and
payable, and Lender may enforce or avail itself of any or all rights or
remedies provided in the Loan Documents against Borrower and the Property,
including, without limitation, all rights or remedies available at law or in
equity; and upon any Event of Default described in clause (vi), (vii) or (viii)
above, the Debt and all other obligations of Borrower hereunder and under the
other Loan Documents shall immediately and automatically become due and
payable, without notice or demand, and Borrower hereby expressly waives any
such notice or demand, anything contained herein or in any other Loan Document
to the contrary notwithstanding.

 

Section 10.2                            Remedies.

 

(a)                                  Upon the occurrence and during the existence
of an Event of Default, all or any one or more of the rights, powers,
privileges and other remedies available to Lender against Borrower under this
Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender at
any time and from time to time, whether or not all or any of the Debt shall be
declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to the Property. Any such
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its 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, if an Event of Default is continuing (i) Lender is not subject
to any “one action” or “election of remedies” law or rule, and (ii) all liens
and other rights, remedies or privileges provided to Lender shall remain in
full force and effect until Lender has exhausted all of its remedies against
the Property and the Mortgage has been

 

72

 

foreclosed, sold and/or
otherwise realized upon in satisfaction of the Debt or the Debt has been paid
in full.

 

(b)                                 During the continuance of an Event of
Default, 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)                                  During the continuance of an Event of
Default, Lender shall have the right from time to time to sever the Note and
the other Loan Documents into one or more separate notes, mortgages and other
security documents (the “Severed Loan
Documents”) in such denominations as Lender shall determine in
its sole discretion for purposes of evidencing and enforcing its rights and
remedies provided hereunder. Borrower shall execute and deliver to Lender from
time to time, promptly after the request of Lender, a severance agreement and
such other documents as Lender shall request in order to effect the severance
described in the preceding sentence, all in form and substance reasonably
satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints Lender
as its true and lawful attorney, coupled with an interest, in its name and
stead to make and execute all documents necessary or desirable to effect the
aforesaid severance, Borrower ratifying all that its said attorney shall do by
virtue thereof; provided, however, Lender shall not make or execute any such
documents under such power until three (3) days after notice has been given to
Borrower by Lender of Lender’s intent to exercise its rights under such power.
Except as may be required in connection with a Securitization pursuant to Section 9.1
hereof, (i) Borrower shall not be obligated to pay any costs or expenses
incurred in connection with the preparation, execution, recording or filing of
the Severed Loan Documents, and (ii) 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.

 

(d)                                 Any amounts recovered from the Property or
any other collateral for the Loan after an Event of Default may be applied by
Lender toward the payment of any interest and/or principal of the Debt and/or
any other amounts due under the Loan Documents in such order, priority and
proportions as Lender in its sole discretion shall determine.

 

Section 10.3                            Right
to Cure Defaults. Upon the occurrence and during the continuance of an
Event of Default, Lender may, but without any obligation to do so and without
notice to or demand on Borrower and without releasing Borrower from any
obligation hereunder or being deemed to have cured any Event of Default
hereunder, make, do or perform any obligation of Borrower hereunder in such
manner and to such extent as Lender may deem necessary. Lender is authorized to
enter upon the Property for such purposes, or appear in,

 

73

 

defend, or
bring any action or proceeding to protect its interest in the Property for such
purposes, and the cost and expense thereof (including reasonable attorneys’
fees to the extent permitted by law), with interest as provided in this Section 10.3,
shall constitute a portion of the Debt and shall be due and payable to Lender
upon demand. All such costs and expenses incurred by Lender in remedying such
Event of Default or such failed payment or act or in appearing in, defending,
or bringing any such action or proceeding shall bear interest at the Default
Rate, for the period after such cost or expense was incurred to the date of
payment to Lender. All such costs and expenses incurred by Lender together with
interest thereon calculated at the Default Rate shall be deemed to constitute a
portion of the Debt and be secured by the liens, claims and security interests
provided to Lender under the Loan Documents and shall be immediately due and
payable upon demand by Lender therefore.

 

Section 10.4                            Remedies
Cumulative. The rights, powers and remedies of Lender under this Agreement
shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender’s rights,
powers and remedies may be pursued singly, concurrently or otherwise, at such
time and in such order as Lender may determine in 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.

 

XI.                                MISCELLANEOUS

 

Section 11.1                            Successors
and Assigns. 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 11.2                            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. Prior to a Securitization,
whenever pursuant to this Agreement the Rating Agencies are given any right to
approve or disapprove, or any arrangement or term is to be satisfactory to the
Rating Agencies, the decision of Lender to approve or disapprove or to decide
whether arrangements or terms are satisfactory or not satisfactory, based upon
Lender’s determination of Rating Agency criteria, shall be substituted
therefore.

 

Section 11.3                            Governing Law.

 

(A)                               THIS AGREEMENT WAS
NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY LENDER AND ACCEPTED BY
BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED
PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK,

 

74

 

WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP
TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL
RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE
LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS
FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST
CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED
BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE
CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE
OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY
LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT
THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND
THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW.

 

(B)                               ANY LEGAL SUIT, ACTION OR
PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN
THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY
NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH
SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT:

 

GOULSTON & STORRS, PC

750 THIRD AVENUE, 22ND FLOOR

NEW YORK, NEW YORK 10017

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS
BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND
AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN
NOTICE OF SAID SERVICE MAILED

 

75

 

OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL
BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY
SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL
GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS
AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR.

 

Section 11.4                            Modification,
Waiver in Writing. No modification, amendment, extension, discharge,
termination or waiver of any provision of this Agreement or of any other Loan
Document, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in a writing signed by the party
against whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to, or demand on
Borrower, shall entitle Borrower to any other or future notice or demand in the
same, similar or other circumstances.

 

Section 11.5                            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 any other Loan Document, shall operate as or constitute a waiver thereof,
nor shall a single or partial exercise thereof preclude any other future
exercise, or the exercise of any other right, power, remedy or privilege. In
particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under this Agreement 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 or the other
Loan Documents, or to declare a default for failure to effect prompt payment of
any such other amount. Lender shall have the right to waive or reduce any time
periods that Lender is entitled to under the Loan Documents in its sole and
absolute discretion.

 

Section 11.6                            Notices.
All notices, demands, requests, consents, approvals or other communications
(any of the foregoing, a “Notice”)
required, permitted, or desired to be given hereunder shall be in writing sent
by telefax (with answer back acknowledged) or by registered or certified mail,
postage prepaid, return receipt requested, or delivered by hand or reputable
overnight courier addressed to the party to be so notified at its address
hereinafter set forth, or to such other address as such party may hereafter
specify in accordance with the provisions of this Section 11.6. Any
Notice shall be deemed to have been received: (a) three (3) days after the date
such Notice is mailed, (b) on the date of sending by telefax if sent during
business hours on a Business Day (otherwise on the next Business Day), (c) on
the date of delivery by hand if delivered during business hours on a Business
Day (otherwise on the next Business Day), and (d) on the next Business Day if
sent by an overnight commercial courier, in each case addressed to the parties
as follows:

 

76

 

	
  If to Lehman:

  	
   

  	
  Lehman
  Brothers Bank FSB

  
	
   

  	
   

  	
  1000
  West Street, Suite 200

  
	
   

  	
   

  	
  Wilmington,
  Delaware 19801

  
	
   

  	
   

  	
  Attention:
  Charles Manna

  
	
   

  	
   

  	
  Facsimile
  No. (646) 758-4071

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Lehman
  Brothers Holdings Inc.

  
	
   

  	
   

  	
  399
  Park Avenue, 8th Floor

  
	
   

  	
   

  	
  Commercial
  Mortgage Surveillance Group

  
	
   

  	
   

  	
  New
  York, New York 10022

  
	
   

  	
   

  	
  Attention:
  Charles Manna

  
	
   

  	
   

  	
  Facsimile
  No. (646) 758-4071

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Cadwalader,
  Wickersham & Taft LLP

  
	
   

  	
   

  	
  One
  World Financial Center

  
	
   

  	
   

  	
  New
  York, New York 10281

  
	
   

  	
   

  	
  Attention:
  Fredric L. Altschuler, Esq.

  
	
   

  	
   

  	
  Facsimile
  No. (212) 504-6666

  
	
   

  	
   

  	
   

  
	
  If to Borrower:

  	
   

  	
  c/o
  Beacon Capital Partners, LLC

  
	
   

  	
   

  	
  One
  Federal Street, 26th Floor

  
	
   

  	
   

  	
  Boston,
  Massachusetts 02110

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Facsimile
  No. (617) 457-0499

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Goulston
  & Storrs

  
	
   

  	
   

  	
  400
  Atlantic Avenue

  
	
   

  	
   

  	
  Boston,
  Massachusetts 02110-3333

  
	
   

  	
   

  	
  Attention:
  Robert J. Mack, Esq.

  
	
   

  	
   

  	
  Facsimile
  No. (617) 574-6595

  

 

Section 11.7                            Trial
by Jury. BORROWER AND LENDER EACH HEREBY AGREES 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. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.

 

Section 11.8                            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.

 

77

 

Section 11.9                            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 11.10                     Preferences. 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 11.11                     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 11.12                     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, neither Lender nor its agents shall be liable for any monetary
damages, and Borrower’s sole remedy shall be limited to commencing an action
seeking injunctive relief or declaratory judgment. Any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action
seeking declaratory judgment.

 

Section 11.13                     Expenses; Indemnity.

 

(a)                                  Borrower shall pay or, if Borrower fails to
pay, reimburse Lender upon receipt of notice from Lender, for all reasonable
costs and expenses (including reasonable attorneys’ fees and disbursements)
incurred by Lender in connection with (i) Borrower’s ongoing performance of and
compliance with Borrower’s 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; (ii) Lender’s ongoing performance of
and compliance with all 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 but not for periodic normal site visits and only for
out-of-pocket costs; (iii) the negotiation, preparation, execution, delivery
and administration of any consents, amendments, waivers or other modifications
to this Agreement and the other Loan Documents and any other documents or
matters requested by Borrower; (iv) the filing and recording fees and expenses,
title insurance and reasonable fees and expenses of

 

78

 

counsel for providing to
Lender all required legal opinions, and other similar expenses incurred, in
creating and perfecting the Liens in favor of Lender pursuant to this Agreement
and the other Loan Documents; (v) enforcing or preserving any rights, in
response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation or otherwise, 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 (vi) enforcing any obligations of or
collecting any payments due from Borrower under this Agreement, the other Loan
Documents or with respect to the Property or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement in
the nature of a “work-out” or of any insolvency or bankruptcy proceedings;
provided, however, that Borrower shall not be liable for the payment of any
such costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender. Any costs due
and payable to Lender may be paid to Lender pursuant to the Cash Management
Agreement.

 

(b)                                 Borrower shall indemnify, defend and hold
harmless Lender and its officers, directors, agents, employees (and the
successors and assigns of the foregoing) (the “Lender Indemnitees”) from and against any and all
liabilities, obligations, losses, damages (excluding consequential 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 the Lender Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not the Lender Indemnitees shall be designated a party
thereto), that may be imposed on, incurred by, or asserted against the Lender
Indemnitees 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 the Lender Indemnitees
hereunder to the extent that such Indemnified Liabilities arise from the gross
negligence, illegal acts, fraud or willful misconduct of the Lender
Indemnitees. 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 the Lender Indemnitees.

 

Section 11.14                     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 11.15                     Offsets,
Counterclaims and Defenses. Any assignee of Lender’s interest in and to
this Agreement and the other Loan Documents shall take the same free and clear
of all offsets, counterclaims or defenses which are unrelated to such documents
which Borrower may otherwise have against any assignor of such documents, and
no such unrelated counterclaim or defense shall be interposed or asserted by
Borrower in any action or proceeding brought by any such assignee upon such
documents and any such right to interpose or assert any such unrelated offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Borrower.

 

79

 

Section 11.16                     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 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 Borrower 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 11.17                     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
their Affiliates shall be subject to the prior approval of Lender.

 

Section 11.18                     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, and shall not 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 11.19                     Waiver of
Offsets/Defenses/Counterclaims. 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 or otherwise to offset
any obligations to make the payments required by the Loan Documents. No failure
by Lender to perform any of its obligations hereunder shall be a valid defense
to, or result in any offset against, any payments which Borrower is obligated
to make under any of the Loan Documents.

 

Section 11.20                     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

 

80

 

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 11.21                     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. Borrower
shall indemnify, defend and hold Lender harmless from and against any and all
claims, liabilities, costs and expenses of any kind (including Lender’s
attorneys’ fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Borrower or Lender in connection
with the transactions contemplated herein. The provisions of this Section 11.21
shall survive the expiration and termination of this Agreement and the payment
of the Debt.

 

Section 11.22                     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, or any other collateral
given to Lender pursuant to the Loan Documents; provided, however, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower only to the extent of Borrower’s interest
in the Property, in the Rents and in any other collateral given to Lender, and
Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan
Documents, 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 any guaranty made in connection
with the Loan or 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; (f) constitute a prohibition
against Lender to commence any appropriate action or proceeding in order to
fully realize on any security given by Borrower in connection with the Loan or
to commence any other appropriate action or proceeding in order for Lender to

 

81

 

exercise its
remedies against such security; or (g) constitute a waiver of the right of
Lender to enforce the liability and obligation of Borrower, by money judgment
or otherwise, to the extent of any loss, damage (excluding consequential
damages), 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:

 

(a)                                  fraud or intentional misrepresentation by
Borrower or any guarantor in connection with the Loan;

 

(b)                                 the willful misconduct of Borrower;

 

(c)                                  the breach of any representation, warranty,
covenant or indemnification provision in the Environmental Indemnity or in the
Mortgage concerning environmental laws, hazardous substances and asbestos and
any indemnification of Lender with respect thereto in either document;

 

(d)                                 the removal or disposal of any portion of the
Property after an Event of Default;

 

(e)                                  the misapplication or conversion by Borrower
of (A) any insurance proceeds paid by reason of any loss, damage or destruction
to the Property, (B) any Awards or other amounts received in connection with
the Condemnation of all or a portion of the Property, or (C) any Rents during
the existence of an Event of Default;

 

(f)                                    failure to pay charges for labor or materials
or other charges that can create Liens on any portion of the Property;

 

(g)                                 any security deposits, advance deposits or
any other deposits collected with respect to the Property which are not
delivered to Lender upon a foreclosure of the Property or action in lieu
thereof, except to the extent any such deposits were applied in accordance with
the terms and conditions of any of the Leases prior to the occurrence of the
Event of Default that gave rise to such foreclosure or action in lieu thereof;

 

(h)                                 Borrower’s indemnification of Lender set
forth in Section 9.2 hereof;

 

(i)                                     the Borrower filing a voluntary petition
under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law;

 

(j)                                     an Affiliate, officer, director, or
representative which controls, directly or indirectly, Borrower filing, or
joining in the filing of, an involuntary petition against Borrower under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or
the soliciting, or causing to be solicited, petitioning creditors for any
involuntary petition against Borrower from any Person;

 

(k)                                  Borrower 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;

 

82

 

(l)                                     any Affiliate of Borrower consenting to or
acquiescing in or joining in an application for the appointment of a custodian,
receiver, trustee, or examiner for Borrower or any portion of the Property;

 

(m)                               Borrower 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;

 

(n)                                 failure to obtain Lender’s prior consent to
any subordinate financing or other voluntary Lien encumbering the Property,
except to the extent expressly permitted herein; and

 

(o)                                 failure to obtain Lender’s prior consent to
any assignment, transfer, or conveyance of the Property or any interest therein
as required by the Mortgage or this Agreement.

 

Notwithstanding
anything to the contrary in this Agreement, the Note or any of the Loan
Documents, 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 or to require
that all collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Loan Documents.

 

Section 11.23                     Prior
Agreements. This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written, including, without limitation, the term sheet
dated January 6, 2006 between Borrower and Lender, are superseded by the terms
of this Agreement and the other Loan Documents.

 

Section 11.24                     Servicer.

 

(a)                                  At the option of Lender, the Loan may be
serviced by a servicer (the “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to the
Servicer pursuant to a servicing agreement (the “Servicing Agreement”) between Lender and Servicer.
Borrower shall not be responsible for any reasonable set-up fees or any other
initial costs relating to or arising under the Servicing Agreement nor for
payment of the monthly servicing fee due to the Servicer under the Servicing
Agreement. Servicer shall, however, be entitled to reimbursement of costs and
expenses as and to the same extent (but without duplication) as Lender is
entitled thereto under the applicable provisions of this Agreement and the
other Loan Documents.

 

(b)                                 Upon notice thereof from Lender, Servicer
shall have the right to exercise all rights of Lender and enforce all
obligations of Borrower pursuant to the provisions of this Agreement, the Note
and the other Loan Documents.

 

(c)                                  Provided Borrower shall have been given notice
of Servicer’s address by Lender, Borrower shall deliver to Servicer duplicate
originals of all notices and other instruments which Borrower may or shall be
required to deliver to Lender pursuant to this Agreement, the

 

83

 

Note and the other Loan
Documents (and no delivery of such notices or other instruments by Borrower
shall be of any force or effect unless delivered to Lender and Servicer as
provided above).

 

Section 11.25                     Joint and
Several Liability. If more than one Person has executed this Agreement as “Borrower,”
the representations, covenants, warranties and obligations of all such Persons
hereunder shall be joint and several.

 

Section 11.26                     Creation of
Security Interest. Notwithstanding any other provision set forth in this
Agreement, the Note, the Mortgage or any of the other Loan Documents, Lender
may at any time create a security interest in all or any portion of its rights
under this Agreement, the Note, the Mortgage and any other Loan Document (including,
without limitation, the advances owing to it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.

 

Section 11.27                     Assignments and
Participations.

 

(a)                                  The Lender may assign to one or more Persons
all or a portion of its rights and obligations under this Loan Agreement.

 

(b)                                 Upon such execution and delivery, from and
after the effective date specified in such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and have the rights and obligations
of Lender hereunder.

 

(c)                                  Lender may sell participations to one or more
Persons in or to all or a portion of its rights and obligations under this Loan
Agreement; provided, however, that (i) Lender’s obligations under this Loan
Agreement shall remain unchanged, (ii) Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations, (iii)
Lender shall remain the holder of any Note for all purposes of this Loan
Agreement and (iv) Borrower shall continue to deal solely and directly with
Lender in connection with Lender’s rights and obligations under and in respect
of this Loan Agreement and the other Loan Documents.

 

(d)                                 Lender may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this Section 11.27,
disclose to the assignee or participant or proposed assignee or participant, as
the case may be, any information relating to Borrower or any of its Affiliates
or to any aspect of the Loan that has been furnished to the Lender by or on
behalf of Borrower or any of its Affiliates.

 

Section 11.28                     Security
Interest in Parking Lease. If and to the extent permitted under the Parking
Lease, Borrower hereby grants to Lender, to secure its obligations under the
Loan Documents, a security interest in the Parking Lease. In the event that it
is determined that the foregoing grant of security interest is not permitted by
the Parking Lease, then the foregoing grant shall be null and void ab initio
and of no force or effect whatsoever, all as if the same was never granted. The
representations and warranties set forth in Sections 3.1.3 and 3.1.7
hereof exclude the Parking Lease.

 

[NO FURTHER TEXT ON THIS PAGE]

 

84

 

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

 

 

	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  200
  South Wacker Property LLC,

  	
   

  
	
   

  	
  a
  Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BCSP
  IV Illinois Manager LLC

  
	
   

  	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  	
  its
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BCSP
  IV U.S. Investments, L.P., a Delaware limited

  partnership, its sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  BCSP
  REIT IV, Inc., a Maryland corporation, its

  General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Nancy
  J. Broderick

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LEHMAN
  BROTHERS BANK FSB,

  	
   

  
	
   

  	
  a
  federal stock saving bank

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
										

 

 

SCHEDULE I

 

RENT ROLL

 

 

SCHEDULE II

 

[RESERVED]

 

 

SCHEDULE III

 

ORGANIZATIONAL
CHART

 

 

SCHEDULE IV

 

	
   

  	
   

  	
   

  
	
   

  	
  (Lender)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  - and -

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Tenant)

  	
   

  

 

 

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

 

	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Location:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Section:

  	
   

  
	
   

  	
  Block:

  	
   

  
	
   

  	
  Lot:

  	
   

  
	
   

  	
  County:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PREPARED BY AND UPON

  	
   

  
	
   

  	
  RECORDATION RETURN TO:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Messrs. Cadwalader, Wickersham & Taft LLP

  	
   

  
	
   

  	
  One World Financial Center

  	
   

  
	
   

  	
  New York, New York 10281

  	
   

  
	
   

  	
  Attention: Frederic L. Altschuler, Esq.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  File No.:

  	
   

  
	
   

  	
  Title No.:

  	
   

  

 

 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT

 

THIS
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”) is made as of the         
day of                       ,
20   by and between [LENDER], having an address at [LENDER’S ADDRESS]
(“Lender”), and                                                                 ,
having an address at                                                                             (“Tenant”).

 

RECITALS:

 

A.                                   Lender
has made a loan in the approximate amount of $           
to Landlord (defined below), which Loan is given pursuant to the terms and
conditions of that certain Loan Agreement dated                             ,
20  , between Lender and Landlord (the “Loan
Agreement”). The Loan is evidenced by a certain Promissory Note
dated                       ,
20  , given by Landlord to Lender (the “Note”)
and secured by a certain [Mortgage][Deed of Trust] and Security Agreement dated
                      ,
20  , given by Landlord to Lender (the “Mortgage”),
which encumbers the fee estate of Landlord in certain premises described in Exhibit
A attached hereto (the “Property”);

 

B.                                     Tenant
occupies a portion of the Property under and pursuant to the provisions of a
certain lease dated                                       ,
       between                                   ,
as landlord (“Landlord”) and Tenant, as
tenant (the “Lease”); and

 

C.                                     Tenant
has agreed to subordinate the Lease to the Mortgage and to the lien thereof and
Lender has agreed to grant non-disturbance to Tenant under the Lease on the
terms and conditions hereinafter set forth.

 

AGREEMENT:

 

For
good and valuable consideration, Tenant and Lender agree as follows:

 

1.                                       Subordination.
Tenant agrees that the Lease and all of the terms, covenants and provisions
thereof and all rights, remedies and options of Tenant thereunder are and shall
at all times continue to be subject and subordinate in all respects to the
Mortgage and to the lien thereof and all terms, covenants and conditions set
forth in the Mortgage and the Loan Agreement including without limitation all
renewals, increases, modifications, spreaders, consolidations, replacements and
extensions thereof and to all sums secured thereby with the same force and effect
as if the Mortgage and Loan Agreement had been executed, delivered and (in the
case of the Mortgage) recorded prior to the execution and delivery of the
Lease.

 

2.                                       Non-Disturbance.
Lender agrees that if any action or proceeding is commenced by Lender for the
foreclosure of the Mortgage or the sale of the Property, Tenant shall not be
named as a party therein unless such joinder shall be required by law,
provided, however, such joinder shall not result in the termination of the
Lease or disturb the Tenant’s possession or use of the premises demised
thereunder, and the sale of the Property in any such action or proceeding and
the exercise by Lender of any of its other rights under the Note, the Mortgage
and the Loan Agreement shall be made subject to all rights of Tenant under the
Lease,

 

1

 

provided that at the time of the commencement of any
such action or proceeding or at the time of any such sale or exercise of any
such other rights the Lease shall be in full force and effect and Tenant shall
not be in default under any of the terms, covenants or conditions of the Lease
or of this Agreement on Tenant’s part to be observed or performed beyond the
expiration of any applicable notice or grace periods.

 

3.                                       Attornment.
Lender and Tenant agree that upon the conveyance of the Property by reason of
the foreclosure of the Mortgage or the acceptance of a deed or assignment in
lieu of foreclosure or otherwise, the Lease shall not be terminated or affected
thereby (at the option of the transferee of the Property (the “Transferee”) if the conditions set
forth in Section 2 above have not been met at the time of such
transfer) but shall continue in full force and effect as a direct lease between
the Transferee and Tenant upon all of the terms, covenants and conditions set
forth in the Lease and in that event, Tenant agrees to attorn to the Transferee
and the Transferee shall accept such attornment, provided, however, that the
provisions of the Mortgage and the Loan Agreement shall govern with respect to
the disposition of any casualty insurance proceeds or condemnation awards and
the Transferee shall not be (a) obligated to complete any construction work
required to be done by Landlord pursuant to the provisions of the Lease or to
reimburse Tenant for any construction work done by Tenant, (b) liable (i) for
Landlord’s failure to perform any of its obligations under the Lease which have
accrued prior to the date on which the Transferee shall become the owner of the
Property, or (ii) for any act or omission of Landlord, whether prior to or
after such foreclosure or sale, (c) required to make any repairs to the
Property or to the premises demised under the Lease required as a result of
fire, or other casualty or by reason of condemnation unless the Transferee
shall be obligated under the Lease to make such repairs and shall have received
sufficient casualty insurance proceeds or condemnation awards to finance the
completion of such repairs, (d) required to make any capital improvements to
the Property or to the premises demised under the Lease which Landlord may have
agreed to make, but had not completed, or to perform or provide any services
not related to possession or quiet enjoyment of the premises demised under the
Lease, (e) subject to any offsets, defenses, abatements or counterclaims which
shall have accrued to Tenant against Landlord prior to the date upon which the
Transferee shall become the owner of the Property, (f) liable for the return of
rental security deposits, if any, paid by Tenant to Landlord in accordance with
the Lease unless such sums are actually received by the Transferee, (g) bound
by any payment of rents, additional rents or other sums which Tenant may have
paid more than one (1) month in advance to any prior Landlord unless (i) such
sums are actually received by the Transferee or (ii) such prepayment shall have
been expressly approved of by the Transferee, (h) bound to make any payment to
Tenant which was required under the Lease, or otherwise, to be made prior to
the time the Transferee succeeded to Landlord’s interest, [(i) bound by any
agreement amending, modifying or terminating the Lease made without the Lender’s
prior written consent prior to the time the Transferee succeeded to Landlord’s
interest — INSERT THIS PROVISION ONLY IF THE CONSENT OF LENDER IS REQUIRED
UNDER THE LOAN DOCUMENTS] or (j) bound by any assignment of the Lease or
sublease of the Property, or any portion thereof, made prior to the time the
Transferee succeeded to Landlord’s interest other than if pursuant to the
provisions of the Lease.

 

4.                                       Notice
to Tenant. After notice is given to Tenant by Lender that the Landlord is
in default beyond any applicable notice and cure period under the Note and the
Mortgage and that the rentals under the Lease should be paid to Lender pursuant
to the terms of

 

2

 

the assignment of leases and rents executed and
delivered by Landlord to Lender in connection therewith, Tenant shall
thereafter pay to Lender or as directed by the Lender, all rentals and all
other monies due or to become due to Landlord under the Lease and Landlord
hereby expressly authorizes Tenant to make such payments to Lender and hereby
releases and discharges Tenant from any liability to Landlord on account of any
such payments.

 

5.                                       Lender’s
Consent. Tenant shall not, without obtaining the prior written consent of
Lender, [(a) enter into any agreement amending, modifying or terminating the
Lease INSERT THIS PROVISION ONLY IF THE CONSENT OF LENDER IS REQUIRED UNDER THE
LOAN DOCUMENTS], (b) prepay any of the rents, additional rents or other sums
due under the Lease for more than one (1) month in advance of the due dates
thereof, [(c) voluntarily surrender the premises demised under the Lease or terminate
the Lease without cause or shorten the term thereof - INSERT THIS PROVISION
ONLY IF THE CONSENT OF LENDER IS REQUIRED UNDER THE LOAN DOCUMENTS], or (d)
assign the Lease or sublet the premises demised under the Lease or any part
thereof other than pursuant to the provisions of the Lease; and any such
amendment, modification, termination, prepayment, voluntary surrender,
assignment or subletting, without Lender’s prior consent, shall not be binding
upon Lender.

 

6.                                       Lender
to Receive Notices. Tenant shall provide Lender with copies of all written
notices sent to Landlord pursuant to the Lease simultaneously with the
transmission of such notices to the Landlord. Tenant shall notify Lender of any
default by Landlord under the Lease which would entitle Tenant to cancel the
Lease or to an abatement of the rents, additional rents or other sums payable
thereunder, and agrees that, notwithstanding any provisions of the Lease to the
contrary, no notice of cancellation thereof or of such an abatement shall be effective
unless Lender shall have received notice of default giving rise to such
cancellation or abatement and shall have failed within sixty (60) days after
receipt of such notice to cure such default, or if such default cannot be cured
within sixty (60) days, shall have failed within sixty (60) days after receipt
of such notice to commence and thereafter diligently pursue any action
necessary to cure such default.

 

7.                                       Notices.
All notices or other written communications hereunder shall be deemed to have
been properly given (i) upon delivery, if delivered in person or by facsimile
transmission with receipt acknowledged by the recipient thereof and confirmed
by telephone by sender, (ii) one (1) Business Day (hereinafter defined) after
having been deposited for overnight delivery with any reputable overnight
courier service, or (iii) three (3) Business Days after having been deposited
in any post office or mail depository regularly maintained by the U.S. Postal
Service and sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

 

	
  If to Tenant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Facsimile No.

  	
   

  	
   

  
	
   

  	
   

  
	
  If to Lender:

  	
  [Lender’s Notice]

  
							

 

3

 

	
  With a copy to:

  	
  Cadwalader, Wickersham & Taft LLP

  
	
   

  	
  One World Financial Center

  
	
   

  	
  New York, New York 10281

  
	
   

  	
  Attention: Frederic L. Altschuler, Esq.

  
	
   

  	
  Facsimile No. (212) 504-6666

  

 

or
addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this Section, the term “Business Day” shall
mean a day on which commercial banks are not authorized or required by law to
close in New York, New York.

 

Either
party by notice to the other may designate additional or different addresses
for subsequent notices or communications.

 

8.                                       Joint
and Several Liability. If Tenant consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. This Agreement shall be binding upon and inure to the benefit of
Lender and Tenant and their respective successors and assigns.

 

9.                                       Definitions.
The term “Lender” as used herein shall include the successors and assigns of
Lender and any person, party or entity which shall become the owner of the
Property by reason of a foreclosure of the Mortgage or the acceptance of a deed
or assignment in lieu of foreclosure or otherwise. The term “Landlord” as used
herein shall mean and include the present landlord under the Lease and such
landlord’s predecessors and successors in interest under the Lease, but shall
not mean or include Lender. The term “Property” as used herein shall mean the
Property, the improvements now or hereafter located thereon and the estates
therein encumbered by the Mortgage.

 

10.                                 No
Oral Modifications. This Agreement may not be modified in any manner or
terminated except by an instrument in writing executed by the parties hereto.

 

11.                                 Governing
Law. This Agreement shall be deemed to be a contract entered into pursuant
to the laws of the State where the Property is located and shall in all
respects be governed, construed, applied and enforced in accordance with the
laws of the State where the Property is located.

 

12.                                 Inapplicable
Provisions. If any term, covenant or condition of this Agreement is held to
be invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.

 

13.                                 Duplicate
Originals; Counterparts. This Agreement may be executed in any number of
duplicate originals and each duplicate original shall be deemed to be an
original. This Agreement may be executed in several counterparts, each of which
counterparts shall be deemed an original instrument and all of which together
shall constitute a single Agreement. The failure of any party hereto to execute
this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.

 

4

 

14.                                 Number
and Gender. Whenever the context may require, any pronouns used herein
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural and vice versa.

 

15.                                 Transfer
of Loan. Lender may sell, transfer and deliver the Note and assign the
Mortgage, this Agreement and the other documents executed in connection
therewith to one or more investors in the secondary mortgage market (“Investors”). In connection with
such sale, Lender may retain or assign responsibility for servicing the loan,
including the Note, the Mortgage, this Agreement and the other documents
executed in connection therewith, or may delegate some or all of such
responsibility and/or obligations to a servicer including, but not limited to,
any subservicer or master servicer, on behalf of the Investors. All references
to Lender herein shall refer to and include any such servicer to the extent
applicable.

 

16.                                 Further
Acts. Tenant will, at the cost of Tenant, and without expense to Lender,
do, execute, acknowledge and deliver all and every such further acts and assurances
as Lender shall, from time to time, reasonably require, for the better assuring
and confirming unto Lender the property and rights hereby intended now or
hereafter so to be, or for carrying out the intention or facilitating the
performance of the terms of this Agreement or for filing, registering or
recording this Agreement, or for complying with all applicable laws.

 

17.                                 Limitations
on Lender’s Liability. Tenant acknowledges that Lender is obligated only to
Landlord to make the Loan upon the terms and subject to the conditions set
forth in the Loan Agreement. In no event shall Lender or any purchaser of the
Property at foreclosure sale or any grantee of the Property named in a
deed-in-lieu of foreclosure, nor any heir, legal representative, successor, or
assignee of Lender or any such purchaser or grantee (collectively the Lender,
such purchaser, grantee, heir, legal representative, successor or assignee, the
“Subsequent Landlord”) have any
personal liability for the obligations of Landlord under the Lease and should
the Subsequent Landlord succeed to the interests of the Landlord under the
Lease, Tenant shall look only to the estate and property of any such Subsequent
Landlord in the Property for the satisfaction of Tenant’s remedies for the
collection of a judgment (or other judicial process) requiring the payment of
money in the event of any default by any Subsequent Landlord as landlord under
the Lease, and no other property or assets of any Subsequent Landlord shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Tenant’s remedies under or with respect to the Lease; provided, however,
that the Tenant may exercise any other right or remedy provided thereby or by
law in the event of any failure by Subsequent Landlord to perform any such
material obligation.

 

5

 

IN
WITNESS WHEREOF, Lender and Tenant have duly executed this Agreement as of the
date first above written.

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  a

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  The undersigned
  accepts and agrees to

  	
   

  
	
  the provisions
  of Section 4 hereof:

  	
   

  
	
   

  	
   

  
	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
   

  	
  , a

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
												

 

 

ACKNOWLEDGMENTS

 

[INSERT
STATE SPECIFIC ACKNOWLEDGMENT]

 

 

EXHIBIT A

 

LEGAL
DESCRIPTION

 

 

SCHEDULE V

 

[RESERVED]

 

 

SCHEDULE VI

 

UNFUNDED
TENANT ALLOWANCES

	
  Tenant

  	
   

  	
  Leased Premises

  (Sq.Ft.)

  	
   

  	
  Type of

  Expenditure

  	
   

  	
  Unfunded Tenant

  Allowance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The University
  of Illinois

  	
   

  	
  22,048

  	
   

  	
  HVAC Allowance

  	
   

  	
  $

  	
  224,889.60 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  (10.20/sq.ft.

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The University
  of Illinois

  	
   

  	
  19,282

  	
   

  	
  Tenant Improvements

  	
   

  	
  $

  	
  166,210.84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  (8.62/sq.ft.

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The University
  of Illinois

  	
   

  	
  22,048

  	
   

  	
  Tenant Improvements

  	
   

  	
  $

  	
  187,408.00 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  (8.50/sq.ft.

  	
  )

  

 

 

SCHEDULE VII

 

PHYSICAL
CONDITION REPORT

 

	
  SUBJECT OF REPORT

  	
   

  	
  NAME OF PROVIDER

  	
   

  	
  DATE OF REPORT

  
	
  200 S. Wacker Drive
  Chicago, Illinois

  	
   

  	
  EBI Consulting

  	
   

  	
  January 25, 2006

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}]]