Document:

Exhibit 10.1

 

LOAN AGREEMENT

 

Dated as of April 1, 2008

 

between

 

THE BORROWERS NAMED HEREIN

 

collectively, as Borrower

 

and

 

THE LENDERS NAMED HEREIN

 

collectively, as Lender

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  ARTICLE I

  
	
  GENERAL TERMS

  
	
   

  	
   

  
	
  Section 1.1.

  	
  The Loan

  	
  27

  
	
  Section 1.2.

  	
  The Term

  	
  27

  
	
  Section 1.3.

  	
  Interest and
  Principal

  	
  27

  
	
  Section 1.4.

  	
  Interest
  Rate Cap Agreements

  	
  28

  
	
  Section 1.5.

  	
  Method and
  Place of Payment

  	
  29

  
	
  Section 1.6.

  	
  Regulatory
  Change

  	
  29

  
	
  Section 1.7.

  	
  Taxes

  	
  30

  
	
  Section 1.8.

  	
  Release

  	
  31

  
	
   

  	
   

  
	
  ARTICLE II

  
	
  VOLUNTARY PREPAYMENT

  
	
   

  	
   

  
	
  Section 2.1.

  	
  Voluntary
  Prepayment

  	
  31

  
	
  Section 2.2.

  	
  Property
  Releases

  	
  32

  
	
  Section 2.3.

  	
  Release of
  Vacant Land

  	
  33

  
	
   

  	
   

  
	
  ARTICLE III

  
	
  ACCOUNTS

  
	
   

  	
   

  
	
  Section 3.1.

  	
  Cash
  Management Account

  	
  35

  
	
  Section 3.2.

  	
  Distributions
  from Cash Management Account

  	
  36

  
	
  Section 3.3.

  	
  Loss
  Proceeds Account

  	
  37

  
	
  Section 3.4.

  	
  Environmental
  Escrow Account

  	
  37

  
	
  Section 3.5.

  	
  Account
  Collateral

  	
  38

  
	
  Section 3.6.

  	
  Bankruptcy

  	
  39

  
	
   

  	
   

  
	
  ARTICLE IV

  
	
  REPRESENTATIONS

  
	
   

  	
   

  
	
  Section 4.1.

  	
  Organization

  	
  39

  
	
  Section 4.2.

  	
  Authorization

  	
  39

  
	
  Section 4.3.

  	
  No Conflicts

  	
  39

  
	
  Section 4.4.

  	
  Consents

  	
  40

  
	
  Section 4.5.

  	
  Enforceable
  Obligations

  	
  40

  
	
  Section 4.6.

  	
  No Default

  	
  40

  
	
  Section 4.7.

  	
  Payment of
  Taxes

  	
  40

  
	
  Section 4.8.

  	
  Compliance
  with Law

  	
  40

  
	
  Section 4.9.

  	
  ERISA

  	
  41

  
	
  Section 4.10.

  	
  Investment
  Company Act

  	
  41

  
						

 

i

 

	
  Section 4.11.

  	
  No
  Bankruptcy Filing

  	
  41

  
	
  Section 4.12.

  	
  Other Debt

  	
  41

  
	
  Section 4.13.

  	
  Litigation

  	
  41

  
	
  Section 4.14.

  	
  Leases;
  Material Agreements

  	
  41

  
	
  Section 4.15.

  	
  Full and
  Accurate Disclosure

  	
  42

  
	
  Section 4.16.

  	
  Financial
  Condition

  	
  42

  
	
  Section 4.17.

  	
  Single-Purpose
  Requirements

  	
  42

  
	
  Section 4.18.

  	
  [Intentionally
  Omitted]

  	
  43

  
	
  Section 4.19.

  	
  Not Foreign
  Person

  	
  43

  
	
  Section 4.20.

  	
  Labor
  Matters

  	
  43

  
	
  Section 4.21.

  	
  Title

  	
  43

  
	
  Section 4.22.

  	
  No Encroachments

  	
  43

  
	
  Section 4.23.

  	
  Physical
  Condition

  	
  44

  
	
  Section 4.24.

  	
  Fraudulent
  Conveyance

  	
  44

  
	
  Section 4.25.

  	
  Management

  	
  44

  
	
  Section 4.26.

  	
  Condemnation

  	
  44

  
	
  Section 4.27.

  	
  Utilities
  and Public Access

  	
  45

  
	
  Section 4.28.

  	
  Environmental
  Matters

  	
  45

  
	
  Section 4.29.

  	
  Assessments

  	
  46

  
	
  Section 4.30.

  	
  No Joint
  Assessment

  	
  46

  
	
  Section 4.31.

  	
  Separate
  Lots

  	
  46

  
	
  Section 4.32.

  	
  Permits;
  Certificate of Occupancy

  	
  46

  
	
  Section 4.33.

  	
  Flood Zone

  	
  46

  
	
  Section 4.34.

  	
  Security
  Deposits

  	
  46

  
	
  Section 4.35.

  	
  Acquisition
  Documents

  	
  46

  
	
  Section 4.36.

  	
  Insurance

  	
  47

  
	
  Section 4.37.

  	
  Ground
  Leased Parcels

  	
  47

  
	
  Section 4.38.

  	
  Intentionally
  Omitted

  	
  48

  
	
  Section 4.39.

  	
  Estoppel
  Certificates

  	
  48

  
	
  Section 4.40.

  	
  Embargoed
  Person

  	
  48

  
	
  Section 4.41.

  	
  Compliance
  with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws

  	
  49

  
	
  Section 4.42.

  	
  Tax Basis

  	
  49

  
	
  Section 4.43.

  	
  Survival

  	
  49

  
	
   

  	
   

  
	
  ARTICLE V

  
	
  AFFIRMATIVE COVENANTS

  
	
  Section 5.1.

  	
  Existence

  	
  50

  
	
  Section 5.2.

  	
  Maintenance
  of Property

  	
  50

  
	
  Section 5.3.

  	
  Compliance
  with Legal Requirements

  	
  50

  
	
  Section 5.4.

  	
  Impositions
  and Other Claims

  	
  50

  
	
  Section 5.5.

  	
  Access to
  Property

  	
  51

  
	
  Section 5.6.

  	
  Cooperate in
  Legal Proceedings

  	
  51

  
	
  Section 5.7.

  	
  Leases

  	
  51

  
	
  Section 5.8.

  	
  Plan Assets,
  etc.

  	
  53

  
					

 

ii

 

	
  Section 5.9.

  	
  Further
  Assurances

  	
  53

  
	
  Section 5.10.

  	
  Management
  of Properties

  	
  54

  
	
  Section 5.11.

  	
  Notice of
  Material Change

  	
  55

  
	
  Section 5.12.

  	
  Annual
  Financial Statements

  	
  55

  
	
  Section 5.13.

  	
  Quarterly
  Financial Statements

  	
  55

  
	
  Section 5.14.

  	
  Monthly
  Financial Statements

  	
  56

  
	
  Section 5.15.

  	
  Insurance

  	
  58

  
	
  Section 5.16.

  	
  Casualty and
  Condemnation

  	
  62

  
	
  Section 5.17.

  	
  Annual
  Budget

  	
  64

  
	
  Section 5.18.

  	
  General
  Indemnity

  	
  64

  
	
  Section 5.19.

  	
  Nonbinding
  Consultation

  	
  65

  
	
  Section 5.20.

  	
  Compliance
  with Encumbrances

  	
  65

  
	
   

  	
   

  
	
  ARTICLE VI

  
	
  NEGATIVE COVENANTS

  
	
  Section 6.1.

  	
  Liens on the
  Properties

  	
  66

  
	
  Section 6.2.

  	
  Ownership

  	
  66

  
	
  Section 6.3.

  	
  Transfer

  	
  66

  
	
  Section 6.4.

  	
  Debt

  	
  66

  
	
  Section 6.5.

  	
  Dissolution;
  Merger or Consolidation

  	
  66

  
	
  Section 6.6.

  	
  Change In
  Business

  	
  66

  
	
  Section 6.7.

  	
  Debt
  Cancellation

  	
  67

  
	
  Section 6.8.

  	
  Affiliate
  Transactions

  	
  67

  
	
  Section 6.9.

  	
  Misapplication
  of Funds

  	
  67

  
	
  Section 6.10.

  	
  Jurisdiction
  of Formation

  	
  67

  
	
  Section 6.11.

  	
  Modifications
  and Waivers

  	
  67

  
	
  Section 6.12.

  	
  ERISA

  	
  67

  
	
  Section 6.13.

  	
  Alterations
  and Expansions

  	
  68

  
	
  Section 6.14.

  	
  Advances and
  Investments

  	
  68

  
	
  Section 6.15.

  	
  Single-Purpose
  Entity

  	
  68

  
	
  Section 6.16.

  	
  Zoning and
  Uses

  	
  68

  
	
  Section 6.17.

  	
  Waste

  	
  69

  
	
   

  	
   

  
	
  ARTICLE VII

  
	
  DEFAULTS

  
	
  Section 7.1.

  	
  Event of
  Default

  	
  69

  
	
  Section 7.2.

  	
  Remedies

  	
  72

  
	
  Section 7.3.

  	
  No Waiver

  	
  73

  
	
  Section 7.4.

  	
  Application
  of Payments after an Event of Default

  	
  73

  
	
   

  	
   

  
	
  ARTICLE VIII

  
	
  CONDITIONS PRECEDENT

  
	
  Section 8.1.

  	
  Conditions
  Precedent to Closing

  	
  73

  
					

 

iii

 

	
  ARTICLE IX

  
	
  MISCELLANEOUS

  
	
  Section 9.1.

  	
  Successors

  	
  76

  
	
  Section 9.2.

  	
  GOVERNING
  LAW

  	
  77

  
	
  Section 9.3.

  	
  Modification,
  Waiver in Writing

  	
  77

  
	
  Section 9.4.

  	
  Notices

  	
  77

  
	
  Section 9.5.

  	
  TRIAL BY
  JURY

  	
  79

  
	
  Section 9.6.

  	
  Headings

  	
  79

  
	
  Section 9.7.

  	
  Assignment
  and Participation

  	
  79

  
	
  Section 9.8.

  	
  Severability

  	
  81

  
	
  Section 9.9.

  	
  Preferences

  	
  81

  
	
  Section 9.10.

  	
  Remedies of
  Borrower

  	
  81

  
	
  Section 9.11.

  	
  Offsets,
  Counterclaims and Defenses

  	
  81

  
	
  Section 9.12.

  	
  No Joint
  Venture

  	
  81

  
	
  Section 9.13.

  	
  Conflict;
  Construction of Documents

  	
  82

  
	
  Section 9.14.

  	
  Brokers and
  Financial Advisors

  	
  82

  
	
  Section 9.15.

  	
  Counterparts

  	
  82

  
	
  Section 9.16.

  	
  Estoppel
  Certificates

  	
  82

  
	
  Section 9.17.

  	
  Payment of
  Expenses; Mortgage Recording Taxes

  	
  82

  
	
  Section 9.18.

  	
  No
  Third-Party Beneficiaries

  	
  83

  
	
  Section 9.19.

  	
  Recourse

  	
  83

  
	
  Section 9.20.

  	
  Right of
  Set-Off

  	
  84

  
	
  Section 9.21.

  	
  Exculpation
  of Lender

  	
  85

  
	
  Section 9.22.

  	
  Servicer

  	
  85

  
	
  Section 9.23.

  	
  Prior Agreements

  	
  85

  

 

iv

 

	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  A

  	
   

  	
  Organizational
  Chart

  	
   

  
	
  B

  	
   

  	
  Form of
  Interest Rate Cap Opinion

  	
   

  
	
  C

  	
   

  	
  Form of
  Interest Rate Cap Confirmation

  	
   

  
	
  D

  	
   

  	
  Form of
  Tenant Notice

  	
   

  
	
  E

  	
   

  	
  Insurance
  Program

  	
   

  
	
  F

  	
   

  	
  Form of
  Intercreditor Agreement

  	
   

  
	
  G

  	
   

  	
  Form of
  SNDA

  	
   

  
	
  H

  	
   

  	
  Form of
  TRS Contribution Agreement

  	
   

  
	
  I

  	
   

  	
  Release
  Definitions

  	
   

  
	
   

  	
   

  
	
  Schedules

  	
   

  
	
   

  	
   

  
	
  A-1

  	
   

  	
  Mortgaged
  Properties

  	
   

  
	
  A-2

  	
   

  	
  Unencumbered
  Properties

  	
   

  
	
  B

  	
   

  	
  Exception
  Report

  	
   

  
	
  C

  	
   

  	
  Rent
  Roll

  	
   

  
	
  D

  	
   

  	
  Material
  Agreements

  	
   

  
	
  E

  	
   

  	
  Aggregate
  Allocated Loan Amounts

  	
   

  
	
  F

  	
   

  	
  Lease
  Termination Options

  	
   

  
	
  G

  	
   

  	
  Net
  Leases

  	
   

  
	
  H

  	
   

  	
  Lease
  Obligations

  	
   

  
	
  I

  	
   

  	
  Property
  Management Agreements

  	
   

  
	
  J

  	
   

  	
  Ground
  Leases

  	
   

  
	
  K

  	
   

  	
  Flow
  of Funds

  	
   

  
	
  L

  	
   

  	
  Environmental
  Conditions

  	
   

  

 

v

 

LOAN AGREEMENT

 

This Loan Agreement (this “Agreement”) is dated
April 1, 2008 and is between GOLDMAN SACHS COMMERCIAL MORTGAGE CAPITAL,
L.P., a Delaware limited partnership (“GSCMC”), CITICORP NORTH AMERICA,
INC., a New York corporation (“Citigroup”), and SL GREEN REALTY CORP., a
Maryland corporation (“SL Green”, and together with GSCMC, Citigroup and
their respective successors and assigns, including any lawful holder of any
portion of the Indebtedness (as hereinafter defined) collectively, “Lender”),
as lender, and each of the entities listed as a “Borrower” on the signature pages hereto,
collectively, jointly and severally, together with their respective permitted
successors and assigns, “Borrower”), as borrower.

 

RECITALS

 

Borrower desires to obtain from Lender the Loan (as
hereinafter defined).

 

Lender is willing to make the Loan on the terms and
conditions set forth in this Agreement if Borrower joins in the execution and
delivery of this Agreement, issues the Note and executes and delivers the other
Loan Documents.

 

Lender and Borrower therefore agree as follows:

 

DEFINITIONS

 

(a)           When
used in this Agreement, the following capitalized terms have the following
meanings:

 

“Acceptable Counterparty” means any
counterparty to an Interest Rate Cap Agreement that has and maintains (a) either
(i) a long-term unsecured debt rating or counterparty rating of A+ or
higher from S&P, or (ii) a short-term unsecured debt rating of A-1 or
higher from S&P, and (b) a long-term unsecured debt rating of Aa3 or
higher from Moody’s.

 

“Account Collateral” means, collectively, the
Collateral Accounts and all sums 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.

 

“Affiliate” means, with respect to any Person,
any other Person controlling, controlled by or under common control with such
Person (and “unaffiliated” means not an Affiliate).

 

“Affiliated Release Price” shall have the
meaning set forth on Exhibit I.

 

“AFRT Owner” means GKK Stars Acquisition LLC.

 

1

 

“Aggregate Allocated Loan Amount” means, with
respect to each Property, the amount set forth in Schedule E.

 

“Agreement” means this Loan Agreement, as the
same may from time to time hereafter be modified or replaced.

 

“Allocated Loan Amount” means, with respect to
each Property, the Aggregate Allocated Loan Amount times the Mortgage Loan
Percentage.

 

“ALTA” means the American Land Title
Association, or any successor thereto.

 

“Alteration” means any demolition, alteration,
installation, improvement  or expansion
of or to any of the Properties or any portion thereof other than (i) Tenant
Improvements required under Leases, (ii) any demolition, alteration,
installation, improvement or expansion performed in connection with the
restoration of any of the Properties as a result of a Casualty or Condemnation,
(iii) routine maintenance and repair worked performed at any of the
Properties in the ordinary course of business, and (iv) any demolition,
alteration, installation, improvement or expansion performed by any Tenant
where such Tenant is entitled to do the same without obtaining the consent or
approval of Borrower pursuant to the applicable lease.

 

“Annual Budget” means a capital and operating
expenditure budget for the Properties prepared by Borrower and specifying
amounts sufficient to operate and maintain the Properties at a standard at
least equal to that maintained on the Closing Date.

 

“Appraisal” means an as-is appraisal that is
prepared by a member of the Appraisal Institute selected by Lender, meets the
minimum appraisal standards for national banks promulgated by the Comptroller
of the Currency pursuant to Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, as amended (FIRREA) and complies with
the Uniform Standards of Professional Appraisal Practice (USPAP).

 

“Approved Accounting Firm” means (i) PricewaterhouseCoopers,
(ii) Deloitte & Touche, (iii) KPMG, (iv) The Schonbraun
McCann Group, (v) Ernst & Young, (vi) Berdon LLP or any
other independent accounting firm reasonably approved by Lender in writing..

 

“Approved Annual Budget” has the meaning set forth in Section 5.17.

 

“Approved
Management Agreement” means, collectively or individually as the context
may require, those certain Property Management Agreements listed on Schedule
I, dated as of the Closing Date, between Borrower and the initial Approved
Property Manager, as the same may be modified or replaced in accordance
herewith with the reasonable consent of Lender, and any other management
agreement that is approved by Lender, which approval shall not be unreasonably
withheld, conditioned or delayed, and with respect to which Lender receives
Rating Confirmation.

 

“Approved Property Manager” means (i) Sponsor, SL Green
Realty Corp. and their respective Affiliates, (ii) First States Management
Corp, L.P., (iii) First States Services Management LLC, (iv) GKK
Manager LLC, so long as it is an Affiliate of Sponsor, or (v) any

 

2

 

other management company that is approved by Lender, which approval
shall not be unreasonably withheld, conditioned or delayed, and with respect to
which Lender receives Rating Confirmation, in each case unless and until Lender
requests the termination of that management company pursuant to Section 5.10(d).

 

“Assignment” has the meaning set forth in Section 9.7(b).

 

“Assignment of Interest Rate Cap Agreement” means each
collateral assignment of an interest rate cap agreement executed by Borrower
and an Acceptable Counterparty in accordance herewith, each of which must be in
the form executed by Borrower and the initial Acceptable Counterparty on the
Closing Date, as the same may from time to time be modified or replaced in
accordance therewith and herewith.

 

“Bankruptcy Code” has the meaning set forth in Section 7.1(d).

 

“Blocked Account” has the meaning set forth in Section 3.1(b).

 

“Blocked Account Agreement” has the meaning set
forth in Section 3.1(b).

 

“Borrower” has the meaning set forth in the first paragraph of
this agreement.

 

“Borrower’s knowledge,” “the knowledge of Borrower” and
similar phrases shall (and shall be limited to) the actual (as distinguished
from imputed or construction knowledge) of Edward J. Matey, Jr., Sonya A.
Huffman, David Schonbraun, Andrew Levine and, with respect to leasing matters,
Neil Kessner (and Borrower hereby represents that such individuals are charged
with having knowledge regarding the Borrower and the Properties relevant to the
representations made herein); provided, however, with respect to any use of
this defined term as of a date after the Closing Date, “Borrower’s knowledge”
and “the knowledge of Borrower” shall be deemed to include such knowledge of
any Person who shall assume any actual or contemplated function of the
foregoing persons in the context in which this defined term is being used as of
the date with respect to which such knowledge is determined.  Lender acknowledges that the foregoing
individuals are identified solely for the purpose of defining the scope of
Borrower’s knowledge and not for the purpose of imposing personal liability or
creating any duties running from any such individual to Lender.

 

“Business Day” means any day other than (i) a Saturday and
a Sunday and (ii) a day on which federally insured depository institutions
in the State of New York or the state in which the offices of Lender, its
trustee, its Servicer or its Servicer’s collection account are located are
authorized or obligated by law, governmental decree or executive order to be
closed. When used with respect to an Interest Determination Date, “Business
Day” shall mean a day on which banks are open for dealing in foreign
currency and exchange in London.

 

“Capital Expenditure” means hard and soft costs incurred by
Borrower or its Affiliates with respect to replacements and capital repairs
made to the Properties (including repairs to, and replacements of, structural
components, roofs, building systems, parking garages, parking lots and
expenditures for building improvements or major repairs), Leasing

 

3

 

Commissions and Tenant Improvements, in each case to the extent
capitalized in accordance with GAAP.

 

“Cash Management Bank” means a depository institution selected
by Lender in which Eligible Accounts may be maintained.  The initial Cash Management Bank shall be
LaSalle Bank, N.A.

 

“Casualty” means a fire, explosion, flood, collapse, earthquake
or other casualty affecting all or any portion of any Property.

 

“Certificates” means, collectively, any senior and/or
subordinate notes, debentures or pass-through certificates, or other evidence
of indebtedness, or debt or equity securities, or any combination of the
foregoing, representing a direct or beneficial interest, in whole or in part,
in the Loan.

 

“Change of Control” means the occurrence of
either or both of the following: (i) except as a result of a Permitted
Joint Venture, the failure of any individual Borrower to be directly or
indirectly 100% owned and controlled by Sponsor or a Mezzanine Lender that
acquires a direct or indirect equity interest in Borrower through foreclosure
or a transfer in lieu of foreclosure, in each case in accordance with the
intercreditor agreement between Lender and Mezzanine Lender, or (ii) except
as a result of a Permitted Joint Venture, the failure of any Single-Purpose
Equityholder (if any) to be directly or indirectly 100% owned and controlled by
Sponsor or a Mezzanine Lender that acquires a direct or indirect equity
interest in Borrower through foreclosure or a transfer in lieu of foreclosure,
in each case in accordance with the intercreditor agreement between Lender and
Mezzanine Lender.

 

“Closing Date” means the date of this
Agreement.

 

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

 

“Collateral” means all assets owned from time to time by
Borrower including the Properties, the Revenues and all other tangible and
intangible property in respect of which Lender is granted a Lien under the Loan
Documents, and all proceeds thereof.

 

“Collateral Accounts” means, collectively, the Cash Management
Account, any Blocked Account, the Loss Proceeds Account, the Environmental
Escrow Account and any other Eligible Account established hereunder.

 

“Component Balance” has the meaning set forth in Section 1.3(c).

 

“Component Spread” has the meaning set forth in Section 1.3(c).

 

“Componentization Notice” has the meaning set forth in Section 1.3(c).

 

4

 

“Condemnation” means a taking or voluntary
conveyance of all or part of any of the Properties or any interest in or right
accruing to or use of any of the Properties, as the result of, or in settlement
of, any condemnation or other eminent domain proceeding by any Governmental
Authority.

 

“Consumer Price Index” means the
Consumer Price Index for All Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of Labor, New York Metropolitan Statistical
Area, All Items (1982-84=100), or any successor index thereto, approximately
adjusted, and in the event that the Consumer Price Index is converted to a
different standard reference base or otherwise revised, the determination of
adjustments provided for herein shall be made with the use of such conversion
factor, formula or table for converting the Consumer Price Index as may be
published by the Bureau of Labor Statistics or, if said Bureau shall not
publish the same, then with the use of such conversion factor, formula or table
as may be published by Prentice-Hall, Inc., or any other nationally
recognized publisher of similar statistical information; and if the Consumer
Price Index ceases to be published, and there is no successor thereto, such other
index as Lender and Borrower, each acting reasonably, shall agree upon in
writing.

 

“Contingent Obligation” means, with respect to any Person, any
obligation of such Person directly or indirectly guaranteeing any Debt of any
other Person in any manner and any contingent obligation to purchase, to
provide funds for payment, to supply funds to invest in any other Person or
otherwise to assure a creditor against loss.

 

“Cooperation Agreement” means that certain Mortgage Loan
Cooperation Agreement, dated as of the Closing Date, among Borrower, Lender and
Sponsor, as the same may from time to time be modified or replaced in
accordance herewith.

 

“Damages” to a party means any and all liabilities, obligations,
losses, damages, penalties, assessments, actions, judgments, suits, claims,
costs, expenses (including reasonable attorneys’ fees whether or not suit is
brought), settlement costs and disbursements imposed on, incurred by or
asserted against such party; provided, however, Damages shall exclude
consequential damages incurred by Lender or Indemnified Parties, as the case
may be.

 

“Debt” means, with respect to any Person,
without duplication:

 

(i)            all indebtedness of
such Person to any other party (regardless of whether such indebtedness is
evidenced by a written instrument such as a note, bond or debenture), including
indebtedness for borrowed money or for the deferred purchase price of property
or services;

 

(ii)           all letters of
credit issued for the account of such Person and all unreimbursed amounts drawn
thereunder;

 

(iii)          all indebtedness
secured by a Lien on any property owned by such Person (whether or not such
indebtedness has been assumed) except obligations for impositions which are not
yet due and payable;

 

5

 

(iv)          all Contingent
Obligations of such Person;

 

(v)           all payment
obligations of such Person under any interest rate protection agreement
(including any interest rate swaps, floors, collars or similar agreements) and
similar agreements;

 

(vi)          all contractual
indemnity obligations of such Person, other than those made in the ordinary
course of business in connection with the provision of goods and services to
one or more of the Properties; and

 

(vii)         any material actual or contingent liability to any Person or
Governmental Authority with respect to any employee benefit plan (within the
meaning of Section 3(3) of ERISA) subject to Title IV of ERISA, Section 302
of ERISA or Section 412 of the Code.

 

“Debt Service” means, with respect to
any Test Period, the product of (x) the Principal Indebtedness as of the
last day of such Test Period, times (y), the sum of the LIBOR Strike
Rate plus the Spread, times (z) a fraction, the numerator of
which is 365 and the denominator of which is 360.

 

“Default” means the occurrence and uncured continuance of any
event which, but for the giving of notice or the passage of time, or both,
would be an Event of Default.

 

“Default Rate” means, with respect to any Note or Note
Component, the greater of (x) 4% per annum in excess of the interest rate
otherwise applicable to such Note or Note Component hereunder and (y) 1%
per annum in excess of the Prime Rate from time to time.

 

“Deferred Maintenance Conditions” means the immediate repair and
similar maintenance items set forth in the Engineering Reports applicable to
the Properties and delivered to Borrower on or prior to the Closing Date.

 

“DSCR” means, with respect to any Test
Period, the quotient of:

 

(i)            Net Operating
Income for such period, less,  for
purposes of calculating the LIBOR Strike Rate for the Extension Term, projected
Tenant Improvements and Leasing Commissions reasonably approved by Lender and
Normalized Capital Expenditures; divided by

 

(ii)           the Debt Service
for such period.

 

“Eligible Account” means (i) a segregated account
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution, or (ii) a
segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state-chartered depository
institution which has an investment-grade rating and is subject to regulations
regarding fiduciary funds on deposit under, or similar to, Title 12 of the Code
of Federal Regulations Section 9.10(b) which, in either case, has
corporate trust powers, acting in its fiduciary capacity.

 

6

 

“Eligible Institution” means an institution (i) whose
commercial paper, short-term debt obligations or other short-term deposits are
rated at least A–1, Prime-1 or F-1, as applicable, by each of the Rating
Agencies and whose long-term senior unsecured debt obligations are rated
at least A or A2, as applicable, by each of the Rating Agencies, and whose
deposits are insured by the FDIC or (ii) with respect to which Lender
shall have received Rating Confirmation.

 

“Embargoed Person” has the meaning set forth in Section 4.40.

 

“Encumbered Property” means each Property that is not an
Unencumbered Property.

 

“Engineering Report” means a structural and seismic engineering
report or reports with respect to each of the Properties prepared by an
independent engineer reasonably approved by Lender and delivered to Lender in
connection with the Loan, and any amendments or supplements thereto delivered
to Lender.

 

“Environmental Claim” means any written notice, claim,
proceeding, investigation or demand by any Person or Governmental Authority
alleging or asserting liability with respect to Borrower or any of the
Properties arising out of, based on or resulting from (i) the alleged
presence, Use or Release of any Hazardous Substance, (ii) any alleged
violation of any Environmental Law, or (iii) any alleged injury or threat
of injury to property, health or safety or to the environment caused by
Hazardous Substances.

 

“Environmental Escrow Amount” means $700,000.

 

“Environmental Conditions” means those items described in Schedule
L.

 

“Environmental Indemnity” means, with respect to each Property,
that certain environmental indemnity agreement executed by Borrower and the
Sponsor as of the Closing Date, as the same may from time to time be modified
or replaced in accordance herewith.

 

“Environmental Laws” means any and all present and future
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, any judicial or administrative orders, decrees or
judgments thereunder, and any permits, approvals, licenses, registrations,
filings and authorizations, in each case as now or hereafter in effect, relating
to the pollution, protection or cleanup of the environment, relating to the
impact of Hazardous Substances on property, health or safety, or the Use or
Release of Hazardous Substances, or relating to the liability for or costs of
other actual or threatened danger to health or the environment.  The term “Environmental Law” includes,
but is not limited to, the following statutes, as amended, any successors
thereto, and any regulations promulgated pursuant thereto, and any state or
local statutes, ordinances, rules, regulations and the like addressing similar
issues:  the Comprehensive Environmental
Response, Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Materials Transportation Act; the Resource
Conservation and Recovery Act (including Subtitle I relating to underground
storage tanks); the Clean Water Act; the Clean Air Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health
Act; the Federal

 

7

 

Water Pollution Control Act; the Federal Insecticide, Fungicide and
Rodenticide Act; the Endangered Species Act; the National Environmental Policy
Act; and the River and Harbors Appropriation Act.  The term “Environmental Law” also
includes, but is not limited to, any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, conditioning transfer of property upon a negative declaration or
other approval of a Governmental Authority of the environmental condition of a
property; or requiring notification or disclosure of Releases of Hazardous
Substances or other environmental conditions of a property to any Governmental
Authority or other Person, whether or not in connection with transfer of title
to or interest in property.

 

“Environmental Reports” means “Phase I Environmental Site
Assessments” as referred to in the ASTM Standards on Environmental Site
Assessments for Commercial Real Estate, E 1527-05 (and, if necessary, “Phase
II Environmental Site Assessments”), prepared by an independent environmental
auditor reasonably approved by Lender and delivered to Lender and any
amendments or supplements thereto delivered to Lender, and shall also include
any other environmental reports delivered to Lender pursuant to this Agreement
and the Environmental Indemnities.

 

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

 

“ERISA Affiliate,” at any time, means each trade or business
(whether or not incorporated) that would, at the time, be treated together with
Borrower as a single employer under Title IV or Section 302 of ERISA or Section 412
of the Code.

 

“ERISA Event” means (i) the occurrence of a “reportable
event” described in Section 4043 of ERISA (other than a “reportable event”
not subject to the provisions for 30-day notice to the PBGC) or (ii) the
provision or filing of a notice of intent to terminate a Plan other than in a
standard termination within the meaning of Section 4041 of ERISA or the
treatment of a Plan amendment as a distress termination under Section 4041
of ERISA, or (iii) the institution of proceedings to terminate a Plan by
the PBGC, or (iv) the existence of any “accumulated funding deficiency” or
“liquidity shortfall” (within the meaning of Section 302 of ERISA or Section 412
of the Code), whether or not waived, or (v) the occurrence or existence of
any other event or condition which might reasonably be expected to constitute
grounds for the termination of, or the appointment of a trustee to administer,
any Plan other than in a standard termination within the meaning of Section 4041
of ERISA or the imposition of any lien on the assets of Borrower under ERISA,
including as a result of the operation of Section 4069 of ERISA.

 

“Event of Default” has the meaning set forth in
Section 7.1.

 

“Exception Report” means the report prepared by Borrower and
attached to this Agreement as Schedule B, setting forth any exceptions
to the representations set forth in Article IV.

 

“Extension Interest Rate Cap Agreement” means an interest rate
cap confirmation between an Acceptable Counterparty and Borrower, relating to
the Extension Term, which is, at

 

8

 

all times, in substantially the form of Exhibit C (together
with an interest rate cap agreement and schedules relating thereto, which are
consistent in form and substance with the terms set forth in such
confirmation).

 

“Extension Term” has the meaning set forth in Section 1.2(b).

 

“Fiscal Quarter” means the three-month period ending on March 31,
June 30, September 30 and December 31 of each year, or such
other fiscal quarter of Borrower as Borrower may select from time to time with
the prior consent of Lender, such consent not to be unreasonably withheld.

 

“Fiscal Year” means the 12-month period ending on December 31
of each year, or such other fiscal year of Borrower as Borrower may select from
time to time with the prior consent of Lender, not to be unreasonably withheld.

 

“Fitch” means Fitch, Inc. and its successors.

 

“Force Majeure”  means
a delay due to acts of God, governmental restrictions, stays, judgments,
orders, decrees, enemy actions, civil commotion, fire, casualty, strikes, work
stoppage, shortages of labor or materials or similar causes beyond the
reasonable control of Borrower; provided that, with respect to any of such
circumstances, for the purposes of this Agreement, (1) any period of Force
Majeure shall apply only to performance of the obligations necessarily affected
by such circumstance and shall continue only so long as Borrower is
continuously and diligently using all reasonable efforts to minimize the effect
and duration thereof; and (2) Force Majeure shall not include the
unavailability or insufficiency of funds.

 

“Form W-8BEN” means Form W-8BEN (Certificate of
Foreign Status of Beneficial Owner for United States Tax Withholding) of the
Department of Treasury of the United States of America, and any successor form.

 

“Form W-8ECI” means Form W-8ECI (Certificate of
Foreign Person’s Claim for Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of America, and
any successor form.

 

“GAAP” means generally accepted accounting principles in the
United States of America, consistently applied, or such other method of
accounting used by Borrower for books and records which is reasonably acceptable
to Lender.

 

“Governmental Authority” means any federal, state, county,
regional, local or municipal government, any bureau, department, agency or
political subdivision thereof and any Person with jurisdiction exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government (including any court).

 

“Ground Lease” means, with respect to each Property, any ground
lease (but not a space lease) encumbering such Property or otherwise creating
the interest of Borrower or its

 

9

 

applicable Affiliate therein, which ground leases are more fully
described on Schedule J, as such ground lease may be modified or
replaced from time to time in accordance herewith.

 

“Ground Leased Parcel” means, with respect to each Property, any
portion of such Property with respect to which Borrower or its applicable
Affiliate is the lessee under a Ground Lease.

 

“Ground Rent” means rent payable pursuant to a Ground Lease, if
any.

 

“Guaranty” means that certain guaranty, dated as of the Closing
Date, executed by Sponsor for the benefit of Lender.

 

“Hazardous Substances” means any and all substances (whether
solid, liquid or gas) defined, listed, or otherwise classified as pollutants,
hazardous wastes, hazardous substances, hazardous materials, extremely
hazardous wastes, toxic substances, toxic pollutants, contaminants, pollutants
or words of similar meaning or regulatory effect under any present or future
Environmental Laws or that may have a negative impact on human health or the
environment or the presence of which on, in or under any of the Properties is
prohibited under Environmental Law, including petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, lead and
radon, and compounds containing them (including gasoline, diesel fuel, oil and
lead-based paint), and radioactive materials, flammables and explosives and
compounds containing them, but excluding substances of kinds and in amounts which
may ordinarily and customarily be used or stored in bank branch or office
properties (as the case may be) of the same quality as the Property as of the
date hereof for the purposes of cleaning or other maintenance or operations or
otherwise ordinarily found in bank branch or office properties (as the case may
be) of the same quality as the Property as of the date hereof and otherwise in
compliance in all material respects with all Environmental Laws.

 

“Increased
Costs” has the meaning set forth in Section 1.6.

 

“Indebtedness” means the Principal Indebtedness, together with
interest and all other obligations and liabilities of Borrower under the Loan
Documents, including all transaction costs and other amounts due or to become
due to Lender pursuant to this Agreement, under the Notes or in accordance with
any of the other Loan Documents, and all other amounts, sums and expenses
reimbursable by Borrower to Lender hereunder or pursuant to the Notes or any of
the other Loan Documents.

 

“Indemnified Liabilities” has the meaning set forth in Section 9.19(b).

 

“Indemnified Parties” has the meaning set forth in Section 5.18.

 

“Independent Director” of any corporation or limited liability
company means an individual who is duly admitted as an independent member of Borrower
or appointed as a member of the board of directors, board of managers or other
governing body of such corporation or limited liability company or, in the case
of a limited liability company, is a member of such limited liability company
and who is not, and has never been, and will not while serving as Independent
Director, be any of the following:

 

10

 

(i)            a partner, equityholder, manager,
director, officer or employee of Borrower, any Single-Purpose Equityholder or
any of their respective equityholders or Affiliates (other than as an
independent member, director or manager of an Affiliate of Borrower or any
Single-Purpose Equityholder that is not in the direct chain of ownership of
Borrower and that is required by a creditor to be a single purpose bankruptcy
remote entity, provided that such independent director or manager is employed
by a company that routinely provides professional independent directors or
managers);

 

(ii)           a creditor, supplier or service
provider (including provider of professional services) to Borrower, any
Single-Purpose Equityholder or any of their respective equityholders or
Affiliates (other than a company that routinely provides professional
independent managers or directors and which also provides lien search and other
similar services to Borrower, any Single-Purpose Equityholder or any of their
respective equityholders or Affiliates in the ordinary course of business);

 

(iii)          a family member of any such member,
partner, equityholder, manager, director, officer, employee, creditor, supplier
or service provider; or

 

(iv)          a Person that controls (whether
directly, indirectly or otherwise) any of (i), (ii) or (iii) above.

 

“Initial Interest Rate Cap Agreement” means an interest rate cap
confirmation between an Acceptable Counterparty and Borrower, relating to the
initial term of the Loan, which is, at all times, in substantially the form of Exhibit C
(together with an interest rate cap agreement and schedules relating thereto,
which are consistent in form and substance with the terms set forth in such
confirmation).

 

“Insurance Requirements” means, collectively, (i) all
material terms of any insurance policy required pursuant to this Agreement and (ii) all
material regulations and then-current standards applicable to or affecting any
of the Properties or any portion thereof or any use or condition thereof, which
may, at any time, be recommended by the board of fire underwriters, if any,
having jurisdiction over any of the Properties, or any other body exercising
similar functions.

 

“Interest Accrual
Period” means, with respect to any
specified Payment Date, the period from and including the 15th day of the
calendar month preceding such specified Payment Date to but excluding the 15th
day of the calendar month containing such specified Payment Date; provided
that, prior to a Securitization, Lender shall have the right, in connection
with a change in the Payment Date in accordance with the definition thereof, to
make a corresponding change to the Interest Accrual Period provided same has no
adverse effect on Borrower in more than a de minimis extent.  Notwithstanding the foregoing, the first
Interest Accrual Period shall commence on and include the Closing Date.

 

“Interest Determination Date” means, in connection with the
calculation of interest accrued for any Interest Accrual Period, the second
Business Day preceding the first day of such Interest Accrual Period.

 

11

 

“Interest Rate Cap Agreements” means collectively, the Initial
Interest Rate Cap Agreement and any Extension Interest Rate Cap Agreements.

 

“Lease” means any lease, license, letting, concession, occupancy
agreement, sublease to which Borrower is a party or has a consent right, or other
agreement (whether written or oral and whether now or hereafter in effect)
under which Borrower is a lessor, existing as of the Closing Date or hereafter
entered into by Borrower, in each case 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 any of the Properties, and every modification or amendment thereof,
and every guarantee of the performance and observance of the covenants,
conditions and agreements to be performed and observed by the other party
thereto.

 

“Lease Term Sheet”
has the meaning set forth in Section 5.7(b).

 

“Leasing Commissions” means leasing commissions required to be
paid by Borrower or its Affiliates in connection with the leasing of space to
Tenants at any of the Properties pursuant to Leases either in effect on the
date hereof or entered into by Borrower or its Affiliates in accordance
herewith and payable in accordance with third-party/arm’s-length brokerage
agreements, provided that the commissions payable pursuant thereto are
commercially reasonable based upon the then current brokerage market for
property of a similar type and quality to such Property in the geographic
market in which such Property is located.

 

“Legal Requirements” means all governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities (including Environmental Laws)
affecting either Borrower or any of the Properties or any portion of or the
construction, ownership, use, alteration or operation of, or any portion of any
Property (whether now or hereafter enacted and in force), and all permits,
licenses and authorizations and regulations relating thereto.

 

“Lender” has the meaning set forth in the first paragraph of
this Agreement and in Section 9.7.

 

“Letter of
Credit” shall mean an irrevocable, unconditional, freely transferable,
clean sight draft evergreen letter of credit in favor of Lender, with respect
to which Borrower has no reimbursement obligation, 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.

 

“LIBOR”
means the rate per annum calculated as set forth below:

 

(i)            On each Interest Determination Date,
LIBOR for the applicable period will be the rate for deposits in United States
dollars for a one-month period which appears as the London interbank offered
rate on the display designated as “LIBOR01” on the Reuters Screen (or such other page as may replace that page on
that service, or such page or replacement therefor on any successor
service) as the London interbank offered rate as of 11:00 a.m.,
London time, on such date.

 

12

 

(ii)           With respect to an Interest
Determination Date on which no such rate appears as the London interbank
offered rate on “LIBOR01” on the Reuters Screen (or such other page as may replace that page on that service,
or such page or replacement therefor on any successor service) as
described above, LIBOR for the applicable period will be determined on the
basis of the rates at which deposits in United States dollars are offered by
the Reference Banks at approximately 11:00 a.m., London time, on such date
to prime banks in the London interbank market for a one-month period (each a “Reference
Bank Rate”).  Lender shall request
the principal London office of each of the Reference Banks to provide a
quotation of its Reference Bank Rate.  If
at least two such quotations are provided, LIBOR for such period will be the
arithmetic mean of such quotations.  If
fewer than two quotations are provided, LIBOR for such period will be the
arithmetic mean of the rates quoted by major banks in New York City, selected
by Lender, at approximately 11:00 a.m., New York City time, on such date
for loans in United States dollars to leading European banks for a one-month
period.

 

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

 

All
percentages resulting from any calculations or determinations referred to in
this definition will be rounded upwards to the nearest multiple of 1/100 of 1%
and all U.S. dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent or more being rounded upwards).

 

“LIBOR Strike Rate” means (1) with respect to the Initial
Interest Rate Cap Agreement, 5.25%; and (2) with respect to any Extension
Interest Rate Cap Agreement, the lesser of (x) 6% and (y) the
interest rate that would result in a DSCR of 1.0x as of the first day of the
Extension Term.

 

“Lien” means any mortgage, lien (statutory or other), pledge,
hypothecation, assignment, preference, priority, security interest, or any
other encumbrance or charge on or affecting any Collateral or any portion
thereof or any interest therein (including any conditional sale or other title retention
agreement, any sale-leaseback, any financing lease or similar transaction
having substantially the same economic effect as any of the foregoing, the
filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any other jurisdiction, domestic or
foreign, and mechanics’, materialmen’s and other similar liens and
encumbrances, as well as any option to purchase, right of first refusal, right
of first offer or similar right).

 

“Loan” has the meaning set forth in Section 1.1.

 

“Loan Amount” means $250,000,000.

 

“Loan Documents” means this Agreement, each of the Notes, each
of the Mortgages (and related financing statements), the Assignment of Interest
Rate Cap Agreement,

 

13

 

each of the Environmental Indemnities, each of the Subordination of
Property Management Agreements, the Cash Management Agreement, any Blocked
Account Agreement, the Cooperation Agreement, the Guaranty, any Letter of
Credit and all other agreements, instruments, certificates and documents
necessary to effectuate the granting to Lender of first-priority Liens on the
Collateral or otherwise in satisfaction of the requirements of this Agreement
or the other documents listed above, as all of the aforesaid may be modified or
replaced from time to time in accordance herewith.

 

“Loss
Proceeds” means amounts, awards or payments payable to Borrower or its
Affiliates or Lender in respect of all or any portion of any of the Properties
in connection with a Casualty or Condemnation thereof (after the deduction
therefrom and payment to Borrower, its Affiliates and Lender, respectively, of
any and all reasonable expenses incurred by Borrower or its Affiliates and
Lender in the recovery thereof, including all attorneys’ fees and
disbursements, the fees of insurance experts and adjusters and the costs
incurred in any litigation or arbitration with respect to such Casualty or
Condemnation).

 

“Loss Proceeds Account” has the meaning set
forth in Section 3.3(a).

 

“Major Lease” means any Lease which (i) when aggregated
with all other Leases at the applicable Property with the same Tenant (or
affiliated Tenants), and assuming the exercise of all expansion rights and all
preferential rights to lease additional space contained in each such Lease, is
expected to contribute more than 15% of Net Operating Income during any
12-month period (after adjustment to eliminate the effect of free rent
periods), (ii) is with an Affiliate of Borrower as Tenant, or (iii) is
entered into during the continuance of an Event of Default.

 

“Material Adverse Effect” means a material adverse effect upon (i) the
ability of Borrower to perform, or of Lender to enforce, any material provision
of any Loan Document, (ii) the enforceability of any material provision of
any Loan Document, or (iii) the value, Net Operating Income, use or
enjoyment of any of the Properties or the operation thereof.

 

“Material Agreements” means each contract and agreement (other
than the Leases, the Ground Leases, the Approved Management Agreement,
brokerage agreements negotiated at arm’s length and the Loan Documents)
relating to a Property, or otherwise imposing obligations on Borrower, under
which Borrower would have the obligation to pay more than $1,000,000 per annum,
or which cannot be terminated by Borrower without cause upon 90 days’ notice or
less without payment of a termination fee or, in any case, with respect to any
covenant contained herein (but not with respect to any representation) imposing
obligations on Borrower under which it would have the obligation to pay more
than $5,000,000 per annum, regardless of Borrower’s right to terminate same, or
which is with an Affiliate of Borrower, and (y) to the extent the
existence, breach or termination of same might have a Portfolio Material
Adverse Effect, any reciprocal easement agreement, declaration of covenants,
material parking agreement, condominium documents, or other material Permitted
Encumbrance.

 

“Material Alteration” means any Alteration to be performed by or
on behalf of Borrower at any of the Properties which (a) is reasonably
likely to have a Material Adverse

 

14

 

Effect with respect to the applicable Property, (b) when
aggregated with all contemporaneous Alterations at the Properties is reasonably
expected to cost in excess of $10,000,000, or (c) is reasonably expected
to permit (or is reasonably likely to induce) any Tenant under a material Lease
to terminate its Lease or abate rent.

 

“Maturity Date” means the maturity date of the Loan as set forth
in Section 1.2.

 

“Merger” means the transactions contemplated by the Merger
Agreement.

 

“Merger Agreement” means that certain Agreement and Plan of
Merger, dated as of November 2, 2007, among Sponsor, GKK Capital LP, AFRT
Owner, and the other parties thereto, with only such modifications thereto as
have been agreed in writing by Lender.

 

“Mezzanine Borrower” means the “Borrower” as described in the
Mezzanine Loan Agreement.

 

“Mezzanine Lender” means, collectively, Goldman Sachs Commercial
Mortgage Capital, L.P., a Delaware limited partnership, Citicorp North America, Inc.,
a New York corporation (“Citigroup”), and SL Green Realty Corp., a
Maryland corporation, or their respective successors and/or assigns identified
to Lender in writing.

 

“Mezzanine Loan” means that certain mezzanine loan made on the
date hereof by Mezzanine Lender to Mezzanine Borrower.

 

“Mezzanine Loan Event of Default” means the occurrence of any
one or more events which constitute an “Event of Default” under and as defined
in the Mezzanine Loan Documents, with respect to which Lender shall have
received written notice from Borrower or the applicable Mezzanine Lender.

 

“Mezzanine Loan Agreement” means that certain Mezzanine Loan
Agreement, dated as of the date hereof, by and between Mezzanine Lender and
Mezzanine Borrower pursuant to which the Mezzanine Loan is made.

 

“Mezzanine Loan Cash Management Account” means the “Cash
Management Account” as defined in the Mezzanine Loan Agreement.

 

“Mezzanine Loan Documents” means the “Loan Documents” as defined
in the Mezzanine Loan Agreement.

 

“Mezzanine Loan Principal Indebtedness” means the principal
balance of the Mezzanine Loan outstanding from time to time.

 

“Moody’s” means Moody’s Investors Service, Inc.
and its successors.

 

“Mortgage” means, with respect to each Property, that certain
mortgage, deed of trust or deed to secure debt, as the case may be, encumbering
such Property, executed by Borrower as of the Closing Date, as the same may
from time to time be modified or replaced in

 

15

 

accordance herewith.  Each
Mortgage shall secure the entire Indebtedness, provided that in the event that
the jurisdiction in which the Property is located imposes a mortgage recording,
intangibles or similar Tax and does not permit the allocation of indebtedness
for the purpose of determining the amount of such Tax payable, the principal
amount secured by such Mortgage shall be equal to 125% of such Property’s
Allocated Loan Amount.

 

“Mortgage Loan Percentage” means 86.2%.

 

“Mortgage Property Equity Collateral” means, with respect to any
Property, the direct and indirect equity interests in the Borrower that owns
such Property, which equity interests are pledged to Mezzanine Lender as
security for the Mezzanine Loan.

 

“Net Lease” means each of the Leases listed on Schedule G.

 

“Net Operating Income” means, with
respect to any Test Period, the excess of (i) Operating Income for such
Test Period, minus (ii) Operating Expenses for such Test Period.

 

“Net Proceeds” means, in connection with the sale or disposition
to an unaffiliated third party in an arms’-length transaction, 100% of the
proceeds of such sale or disposition, net of ordinary and customary closing
costs payable to unaffiliated third parties.

 

“New Borrower Entity” means a Single Purpose Entity 100% of the
equity interests in which are directly or indirectly owned by Sponsor, which
Single Purpose Entity: (i) shall have executed and delivered to Lender an
assumption agreement, in form and substance reasonably acceptable to Lender,
evidencing its agreement to abide and be bound by the terms of the Loan
Documents and containing representations substantially equivalent to those
contained in Article IV, and such other representations (and evidence of
the accuracy of such representations) as the Lender shall reasonably request; (ii) shall
have delivered such Uniform Commercial Code financing statements as may be
reasonably requested by Lender; (iii) if requested by Lender, shall have
delivered to Lender legal opinions of counsel reasonably acceptable to Lender
which are equivalent to the opinions delivered to Lender on the Closing Date,
including new enforceability, authorization and nonconsolidation opinions which
are reasonably satisfactory to Lender and satisfactory to each of the Rating
Agencies; and (iv) shall have delivered to Lender all documents reasonably
requested by it relating to the existence of such New Borrower Entity and the
due authorization of such New Borrower Entity to assume the Loan and to execute
and deliver any related documents, each in form and substance reasonably
satisfactory to Lender.

 

“Nonconsolidation Opinion” means the opinion letter, dated the
Closing Date, delivered by Borrower’s counsel to Lender and addressing issues
relating to substantive consolidation in bankruptcy.

 

“Normalized Capital Expenditures” means anticipated annual
Capital Expenditures at the Properties, as reasonably determined by Lender,
based on historical Capital Expenditures at the Properties during the initial
term of the Loan (taking into account any amounts actually reimbursed in
respect of Capital Expenditures under Leases).

 

16

 

“Note” means that certain promissory note, dated as of the
Closing Date, made by Borrower to the order of Lender to evidence the Loan, as
such note may be replaced by multiple Notes or divided into multiple Note
Components in accordance with Section 1.3(c) and as otherwise
modified, assigned (in whole or in part) and/or replaced from time to time in
accordance herewith.

 

“Note Component” has the meaning set forth in Section 1.3(c).

 

“OFAC List” means the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and any other similar
list maintained by the U.S. Treasury Department, Office of Foreign Assets
Control pursuant to any applicable governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities, including, without limitation, trade embargo, economic sanctions,
or other prohibitions imposed by Executive Order of the President of the United
States.  The OFAC List currently is
accessible through the internet website at www.treas.gov/ofac/t11sdn.pdf.

 

“Officer’s Certificate” means a certificate delivered to Lender
which is signed by an authorized officer of Borrower and certifies the
information therein to such officer’s knowledge.

 

“Operating Expenses” means, for any period, all operating,
renting, administrative, management, legal and other ordinary expenses of
Borrower during such period (other than those whose Release Price is zero),
determined in accordance with GAAP; provided, however, that such
expenses shall not include (i) depreciation, amortization or other noncash
items (other than expenses that are due and payable but not yet paid), (ii) interest,
principal or any other sums due and owing with respect to the Loan, (iii) income
taxes or other taxes in the nature of income taxes, (iv) Capital
Expenditures, or (v) equity distributions.

 

“Operating Income” means, for any period, all operating income
of Borrower from each of the Properties (other than those whose Release Price
is zero) during such period, determined in accordance with GAAP (but without
straight-lining of rents), other than (i) Loss Proceeds (but Operating
Income will include rental loss insurance proceeds to the extent allocable to
such period), (ii) any revenue attributable to a Lease to the extent it is
paid more than 30 days prior to the due date, (iii) any interest income
from any source, (iv) any repayments received from any third party of
principal loaned or advanced to such third party by Borrower, (v) any
proceeds resulting from the Transfer of all or any portion of such Property, (vi) sales,
use and occupancy or other taxes on receipts required to be accounted for by
Borrower to any government or governmental agency, (vii) termination fees,
and (viii) any other extraordinary or non-recurring items.

 

“Par Prepayment Date” means the first Payment
Date following the 6-month anniversary of the Closing Date.

 

“Parcel Release Price” shall have the meaning
set forth on Exhibit I.

 

17

 

“Participation” has the meaning set forth in Section 9.7(b).

 

“Payment Date” means the 9th day of each month (or,
if such 9th day is not a Business Day, the first preceding Business
Day); provided, that, prior to a Securitization, Lender shall have the
right to change the Payment Date so long as a corresponding change to the
Interest Accrual Period is also made and same has no adverse effect on Borrower
in more than a de minimis extent. 
Notwithstanding the foregoing, the Maturity Date shall be the second to
last Business Day of the Interest Accrual Period in which the Maturity Date
falls.

 

“Permits” means all licenses, permits, variances and
certificates used in connection with the ownership, operation, use or occupancy
of each of the Properties (including certificates of occupancy, business
licenses, state health department licenses, licenses to conduct business and
all such other permits, licenses and rights, obtained from any Governmental
Authority or private Person concerning ownership, operation, use or occupancy
of such Property).

 

“Permitted Affiliate Sale” means the sale of a Property to an
Affiliate that is expressly permitted under the Mezzanine Loan Agreement.

 

“Permitted Debt” means:

 

(i)            the Indebtedness; and

 

(ii)           Trade Payables not represented by a
note, customarily paid by Borrower within 60 days of incurrence and in fact not
more than 60 days outstanding, which are incurred in the ordinary course of
Borrower’s ownership and operation of the Properties, in amounts reasonable and
customary for similar Properties and not exceeding 2.0% of the Loan Amount in
the aggregate.

 

“Permitted Encumbrances” means:

 

(i)            the Liens created by the Loan
Documents;

 

(ii)           all Liens and other matters
specifically disclosed on Schedule B of the Qualified Title Insurance Policy;

 

(iii)          Liens, if any, for Taxes not yet
delinquent;

 

(iv)          mechanics’,
materialmen’s or similar Liens, if any, and Liens for delinquent taxes or
impositions, in each case only if being contested in good faith and by
appropriate proceedings, provided that no such Lien is in imminent
danger of foreclosure and provided  further that either (a) each
such Lien is released or discharged of record or fully insured over by the
title insurance company issuing the Qualified Title Insurance Policy within 60
days of its creation, or (b) Borrower deposits with Lender, by the
expiration of such 60-day period, an amount equal to 115% of the dollar amount
of such Lien or a bond in the aforementioned amount from such surety, and upon
such terms and conditions, as is reasonably satisfactory to Lender, as security
for the payment or release 

18

 

of such Lien (such
60-day period shall be extended to 90 days with respect to any such Lien that
is caused by a Tenant, provided Borrower exercises commercially reasonable
efforts during such 90-day period to cause such Tenant to remove such Lien or
provide the bond described above);

 

(v)           rights
of existing Tenants under Leases heretofore disclosed to Lender, and the rights
of future Tenants and subtenants as tenants only pursuant to written Leases
entered into in conformity with the provisions of this Agreement; and

 

(vi)          easements
and other customary encumbrances customarily encumbering like properties and
entered into in the ordinary course of business, to the extent such easements
or encumbrances do not result in a Material Adverse Effect.

 

“Permitted Investments” means the following, subject to the
qualifications hereinafter set forth:

 

(i)            obligations of, or
obligations guaranteed as to principal and interest by, the U.S. government or
any agency or instrumentality thereof, when such obligations are backed by the
full faith and credit of the United States of America;

 

(ii)           federal funds,
unsecured certificates of deposit, time deposits, banker’s acceptances, and
repurchase agreements having maturities of not more than 365 days of any bank,
the short-term debt obligations of which are rated A-1+ (or the equivalent) by
each of the Rating Agencies and, if it has a term in excess of three months,
the long-term debt obligations of which are rated AAA (or the equivalent) by
each of the Rating Agencies;

 

(iii)          deposits that are
fully insured by the Federal Deposit Insurance Corp. (FDIC);

 

(iv)          debt obligations
that are rated AAA or higher (or the equivalent) by each of the Rating
Agencies;

 

(v)           commercial paper
rated A–1+ (or the equivalent) by each of the Rating Agencies;

 

(vi)          investment in money
market funds rated AAAm or AAAm–G (or the equivalent) by each of the Rating
Agencies; and

 

(vii)         such other
investments as to which Lender shall have received Rating Confirmation.

 

Notwithstanding
the foregoing, “Permitted Investments” (i) shall exclude any security with
the Standard & Poor’s “r” symbol (or any other Rating Agency’s
corresponding symbol) attached to the rating (indicating high volatility or
dramatic fluctuations in their expected returns because of market risk), as
well as any mortgage-backed securities and any security of the type commonly
known as “strips”; (ii) shall not have maturities in excess of one year; (iii) shall
be limited to

 

19

 

those instruments
that have a predetermined fixed dollar of principal due at maturity that cannot
vary or change; and (iv) shall exclude any investment where the right to
receive principal and interest derived from the underlying investment provides
a yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.  Interest may
either be fixed or variable, and any variable interest must be tied to a single
interest rate index plus a single fixed spread (if any), and move
proportionately with that index.  No
investment shall be made which requires a payment above par for an obligation
if the obligation may be prepaid at the option of the issuer thereof prior to
its maturity.  All investments shall
mature or be redeemable upon the option of the holder thereof on or prior to
the earlier of (x) three months from the date of their purchase or (y) the
Business Day preceding the day before the date such amounts are required to be
applied hereunder.

 

“Permitted Joint Venture” means any joint venture permitted
under the Mezzanine Loan Agreement as in effect as of the date hereof, provided
that Sponsor directly or indirectly controls such joint venture and owns at
least 51% of the direct or indirect equity interest therein.

 

“Permitted TRS Contribution Agreement” means a contribution
agreement substantially in the form of the contribution agreement attached as Exhibit H.

 

“Permitted TRS Entity” means New Borrower Entity that becomes a
Borrower under the Loan and is formed solely for the purpose of entering into
one or more Permitted TRS Contribution Agreements and matters directly relating
thereto.

 

“Person” means any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated association
or Governmental Authority and any fiduciary acting in such capacity on behalf
of any of the foregoing.

 

“Plan” means any employee benefit plan (as defined in Section 3(3) of
ERISA) subject to Title IV or Section 302 of ERISA or Section 412 of
the Code.

 

“Plan Assets” means assets of any (i) employee benefit plan
(as defined in Section 3(3) of ERISA) subject to Title I of
ERISA or (ii) plan (as defined in Section 4975(e)(1) of the
Code) subject to Section 4975 of the Code.

 

“Policies” has the meaning set forth in Section 5.15(b).

 

“Portfolio Material Adverse Effect” means a
material adverse effect upon (i) the ability of Borrower to perform, or of
Lender to enforce, any material provision of any Loan Document, (ii) the
enforceability of any material provision of any Loan Document, or (iii) the
value, Net Operating Income, use or enjoyment of the Properties or the
operation thereof, in each case, taken as a whole.

 

“Prepayment
Fee” shall mean, with respect to any prepayment received
by Lender prior to the Par Prepayment Date (other than with respect to any
release in connection with a Casualty or Condemnation pursuant to Section 5.16(d)),
an amount equal to 1.0% of the principal amount prepaid.

 

20

 

“Prime Rate” means the “prime rate” published in the “Money
Rates” section of The Wall Street Journal.  If The Wall Street Journal ceases to
publish the “prime rate,” then Lender shall select an equivalent publication
that publishes such “prime rate,” and if such “prime rate” is no longer
generally published or is limited, regulated or administered by a governmental
or quasi-governmental body, then Lender shall reasonably select a comparable
interest rate index.

 

“Principal Indebtedness” means the principal balance of the Loan
outstanding from time to time.

 

“Properties” means the Lender’s fee and leasehold interests, as
applicable, in the real property described on Schedule A, together
with all buildings and other improvements thereon.  As used herein, “Property” means any of the
individual Properties.  Any reference
herein to a Transfer of a Property shall mean a Transfer of such Property or of
the direct or indirect equity interests therein (other than a Transfer of a
direct or indirect equity interest in Sponsor).

 

“Qualified Survey” means, with respect to each of the Properties,
current title surveys of such Property, certified to Borrower, the title
company issuing the Qualified Title Insurance Policy and Lender and their
respective successors and assigns, in form and substance reasonably
satisfactory to Lender.

 

“Qualified Title Insurance Policy” means with respect to each of
the Properties,  an ALTA extended
coverage mortgagee’s title insurance policy in form and substance reasonably
satisfactory to Lender, together with such endorsements as Lender shall
reasonably request.

 

“Rating Agency”
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 and continue to rate any
of the Certificates.

 

“Rating Confirmation” means, with respect to any proposed
action, confirmation in writing from each of the Rating Agencies that such
action shall not result, in and of itself, in a downgrade, withdrawal or
qualification of any rating then assigned to any outstanding Certificates;
except that if any portion of the Loan shall not have been securitized pursuant
to a Securitization rated by the Rating Agencies, then “Rating Confirmation”
shall instead mean that the matter in question is subject to the prior written
approval of both (x) the applicable Rating Agencies (if and to the extent
that any portion of the Loan has been securitized pursuant to a Securitization
or series of Securitizations rated by such Rating Agencies), and (y) Lender
in its reasonable discretion (and Borrower agrees that it shall be reasonable
for Lender to withhold such approval, if such proposed action does not satisfy
Rating Agency criteria.)  No Rating
Confirmation shall be regarded as having been received unless and until any
conditions imposed on its effectiveness by any Rating Agency shall have been
satisfied.

 

21

 

“Reference Banks”  means
four major banks in the London interbank market selected by Lender.

 

“Regulatory Change” means any change after the Closing Date in
federal, state or foreign laws or regulations or the adoption or the making,
after such date, of any interpretations, directives or requests applying to a
class of banks or companies controlling banks, including Lender, of or under
any federal, state or foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof.

 

“Release” with respect to any Hazardous Substance means any
release, deposit, discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Substances into the indoor or outdoor
environment (including the movement of Hazardous Substances through ambient
air, soil, surface water, ground water, wetlands, land or subsurface strata) in
violation of Environmental Law.

 

“Release Parcel” has the meaning set forth Section 2.3.

 

“Release Price” shall have the meaning set forth on Exhibit I.

 

“Rent Roll” has the meaning set forth in Section 4.14(a).

 

“Revenues” means (i) to the extent attributable to any
Property, all rents, rent equivalents, moneys payable as damages pursuant to a
Lease or in lieu of rent or rent equivalents, royalties (including all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including 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 from any and all sources including any obligations now existing or
hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or
rendering of services by Borrower and proceeds, if any, from business interruption
or other loss of income insurance.  “Revenues”
shall not include Loss Proceeds applied in accordance with Section 5.16
(other than the proceeds of rental interruption insurance), interest income
(other than interest on amounts contained in the Collateral Accounts), equity
contributions or other amounts to be funded by a member pursuant to Borrower’s
operating agreement and amounts which are received from the Collateral Accounts
in accordance herewith or are otherwise free of the Liens of the Loan Documents
pursuant to the terms hereof.

 

“S&P”
means Standard & Poor’s Ratings Services, a division of the
McGraw-Hill Companies, Inc., and its successors.

 

“Securitization” means a transaction in which all or any portion
of the Loan is

 

“Service” means the Internal Revenue Service or any successor
agency thereto.

 

22

 

“Servicer” means the entity or entities appointed by Lender from
time to time to serve as servicer and/or special servicer of the Loan.  If at any time no entity is so appointed, the
term “Servicer” shall be deemed to refer to Lender.

 

“Single Member LLC” means a limited liability company which
either (x) has only one member, or (y) has multiple members, none of
which is a Single-Purpose Equityholder.

 

“Single-Purpose Entity”
means a Person which (a) was formed solely for the purpose of acquiring
and holding (i) in the case of a Borrower, an ownership interest in its
Property or (ii) in the case of a Single-Purpose Equityholder, an
ownership interest in the Borrower, (b) does not engage in any business
unrelated to (i) in the case of a Borrower, such Property or (ii) in
the case of a Single-Purpose Equityholder, its ownership interest in the
Borrower, (c) does not have any assets other than those related to (i) in
the case of a Borrower, such Property or (ii) in the case of a
Single-Purpose Equityholder, its ownership interest in the Borrower, (d) does
not have any Debt other than, in the case of Borrower, Permitted Debt, (e) maintains
books, accounts, records, financial statements, stationery, invoices and checks
which are separate and apart from those of any other Person (except that such
Person’s financial position, assets, results of operations and cash flows may
be included in the consolidated financial statements of an Affiliate of such
Person in accordance with GAAP, provided that any such consolidated
financial statements shall contain a note indicating that such Person and its
Affiliates are separate legal entities and maintain records, books of account
separate and apart from any other Person), (f) is subject to and complies
with all of the limitations on powers and separateness requirements set forth
in the organizational documentation of such Person as of the Closing Date, (g) 
holds itself out as being a Person separate and apart from each other Person
and not as a division or part of another Person, (h) conducts its business
in its own name (except for services rendered under a management agreement with
an Affiliate, so long as the manager, or equivalent thereof, under such
management agreement holds itself out as an agent of such Person), (i) exercises
reasonable efforts to correct any known misunderstanding actually known to it
regarding its separate identity, and maintains an arm’s-length relationship
with its Affiliates, (j) pays its own liabilities out of its own funds
(including the salaries of its own employees, if any) and reasonably allocates
any overhead that is shared with an Affiliate, including paying for shared
office space and services performed by any officer or employee of an Affiliate,
(k) maintains a sufficient number of employees in light of its
contemplated business operations, (l) conducts its business so that the
assumptions made with respect to it which are contained in the Nonconsolidation
Opinion shall at all times be true and correct in all material respects, (m) except as contemplated by the Loan
Documents, maintains its assets in such a manner that it will not be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person, (n) observes all applicable corporate
entity-level formalities in all material respects, (o) except as contemplated by the Loan Documents,
does not commingle its assets with those of any other Person and holds
such assets in its own name, (p) except
as contemplated by the Loan Documents, does not assume, guarantee or
become obligated for the debts of any other Person, and does not hold out its
credit as being available to satisfy the obligations or securities of others, (q) does
not acquire obligations or securities of its shareholders, members or partners,
(r) except as contemplated by the
Loan Documents, does not pledge its assets for the benefit of any other
Person and does not make any loans or advances to any Person, (s) intends
to maintain adequate capital in light of its contemplated business operations, (t) has
two Independent Directors, or, in

 

23

 

the case of a limited partnership, has a Single-Purpose Equityholder
with two Independent Directors, (u) has by-laws or an operating agreement,
or, in the case of a limited partnership, has a Single-Purpose Equityholder
with by-laws or an operating agreement, which provides that, for so long as the
Loan is outstanding, such Person shall not take or consent to any of the
following actions except to the extent expressly permitted in this Agreement
and the other Loan Documents:

 

(i)            to the fullest
extent permitted by law, the dissolution, liquidation, consolidation, merger or
sale of all or substantially all of its assets (and, in the case of a
Single-Purpose Equityholder, the assets of the Borrower);

 

(ii)           the engagement by
such Person (and, in the case of a Single-Purpose Equityholder, the engagement
by the Borrower) in, (x) in the case of any Borrower, any business other
than the acquisition, development, management, leasing, ownership, maintenance
and operation of its Property, and activities incidental thereto and (y) in
the case of a Single-Purpose Equityholder, activities incidental to the
acquisition and ownership of its interest in the Borrower;

 

(iii)          the filing, or
consent to the filing, of a bankruptcy or insolvency petition, any general
assignment for the benefit of creditors or the institution of any other
insolvency proceeding, or the seeking or consenting to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar
official in respect of such Person without the affirmative vote of all of its
Independent Directors (and, in the case of a Single-Purpose Equityholder, in
respect of the Borrower without the affirmative vote of both of such
Single-Purpose Equityholder’s Independent Directors); and

 

(iv)          any amendment or
modification of any provision of its (and, in the case of a Single-Purpose
Equityholder, the Borrower’s) organizational documents relating to
qualification as a “Single-Purpose Entity”,

 

and (v) if such entity is a Single Member LLC
that does not have an independent non-equity member, has organizational
documents which provide that upon the occurrence of any event (other than a
permitted equity transfer) that causes its sole member to cease to be a member
while the Loan is outstanding, at least one of its Independent Directors shall
automatically be admitted as the sole member of the Single Member LLC and shall
preserve and continue the existence of the Single Member LLC without
dissolution.

 

“Single-Purpose Equityholder” means a Single-Purpose Entity that
(x) is a limited liability company or corporation formed under the laws of
the State of Delaware, (y) owns at least a 0.5% direct equity interest in
Borrower, and (z) serves as the general partner or managing member of
Borrower.

 

“SNDA” has the meaning set forth in Section 5.7(f).

 

“Sponsor” means Gramercy Capital Corp., or any successors and
assigns thereof by merger, consolidation, amalgamation, reorganization,
acquisition of all or substantially all of

 

24

 

the shares or other ownership interests in Sponsor, by transfer of all
or substantially all of Sponsor’s assets in a single transaction, or through a
similar transaction.

 

“Spread” means:

 

(i)            initially, 4.35%; and

 

(ii)           following the bifurcation of the Note
into multiple Note Components pursuant to Section 1.3(c), the
weighted average of the Component Spreads at the time of determination,
weighted on the basis of the corresponding Component Balances.

 

“Subordination of Property Management Agreement” means that
certain consent and agreement of manager and subordination of management
agreement executed by Borrower and the Approved Property Manager as of the
Closing Date, as the same may from time to time be modified or replaced in
accordance herewith.

 

“Taxes” means all real estate and personal property taxes,
assessments, fees, taxes on rents or rentals, water rates or sewer rents,
facilities and other governmental, municipal and utility district charges or
other similar taxes or assessments now or hereafter levied or assessed or
imposed against the Properties or Borrower with respect to the Properties or
rents therefrom or which may become Liens upon any of the Properties, without
deduction for any amounts reimbursable to Borrower by third parties.

 

“Tenant” means any Person liable by contract or otherwise to pay
monies (including a percentage of gross income, revenue or profits) pursuant to
a Lease.

 

“Tenant Improvements” means, collectively, (i) tenant
improvements to be undertaken for any Tenant which are required to be completed
by or on behalf of Borrower pursuant to the terms of such Tenant’s Lease, (ii) tenant
improvements paid or reimbursed through 
allowances to a Tenant pursuant to such Tenant’s Lease, and (iii) other
similar tenant inducements.

 

“Tenant Notice” has the meaning set forth in Section 3.1(b).

 

“Test Period” means each 12-month period ending on the last day
of a Fiscal Quarter; provided, however, “Test Period” shall mean
the most recently completed calendar quarter, annualized, for calculation of
the “LIBOR Strike Rate”.

 

“Trade Payables” means unsecured amounts payable by or on behalf
of Borrower for or in respect of the operation of the Properties in the
ordinary course and which would under GAAP be regarded as ordinary expenses,
including amounts payable to suppliers, vendors, contractors, mechanics,
materialmen or other Persons providing property or services to the Properties
or Borrower and the capitalized amount of any ordinary-course financing leases.

 

“Transaction” means, collectively, the Merger
and other transactions contemplated and/or financed by the Loan Documents.

 

25

 

“Transfer” means the pledge, sale or other whole or partial
conveyance of all or any portion of any of the Properties or any direct or
indirect interest therein, or any direct or indirect equity interest in the
owner thereof, including granting of any purchase options, rights of first
refusal, rights of first offer or similar rights in respect of any portion of
such Property or the subjecting of any portion of such Property to restrictions
on transfer; except that the conveyance of a space lease at such Property in
accordance herewith shall not constitute a Transfer.

 

“Unaffiliated Release Price” shall have the meaning set forth on
Exhibit I.

 

“Underfunding” means with respect to any Plan, the excess, if
any, of the “projected benefit obligations” (within the meaning of Statement of
Financial Accounting Standards 87) under such Plan (determined using the
actuarial assumption used for financial statement disclosure in the most recent
financial statements of the Plan sponsor) over the fair market value of the
assets held under the Plan.

 

“Unencumbered Properties” means, collectively, the Properties
described on Schedule A-2.

 

“Use” means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation of such
Hazardous Substance.

 

“U.S. Person” means a United States person within the meaning of
Section 7701(a)(30) of the Code.

 

“U.S. Tax” means any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America or any
taxing authority thereof.

 

“Waste” means any material abuse or destructive use (whether by
action or inaction) of the Properties.

 

“Zoning Report” means a zoning report or reports with respect to
each of the Properties approved by Lender and delivered to Lender in connection
with the Loan, and any amendments or supplements thereto delivered to Lender.

 

(b)           Rules of
Construction.  All references to
sections, schedules and exhibits are to sections, schedules and exhibits in or
to this Agreement unless otherwise specified. 
Unless otherwise specified: (i) all meanings attributed to defined
terms in this Agreement shall be equally applicable to both the singular and
plural forms of the terms so defined, (ii) “including” means “including,
but not limited to”, (iii) references to Payment Dates that fall in
specified months ignore the preceding Business Day convention, and (iv) “mortgage”
means a mortgage, deed of trust, deed to secure debt or similar instrument, as
applicable, and “mortgagee” means the secured party under a mortgage, deed of
trust, deed to secure debt or similar instrument.  All accounting terms not specifically defined
in this Agreement shall be construed in accordance with GAAP, as same may be
modified in this Agreement.

 

26

 

ARTICLE I

 

GENERAL TERMS

 

1.1.          The Loan.  On the Closing Date, subject to the terms and
conditions of this Agreement, Lender shall make a loan to Borrower (the “Loan”)
in an amount equal to the Loan Amount. 
The Loan shall initially be represented by a single Note which shall
bear interest as described in this Agreement at a per annum rate as provided in
Section 1.3(a).  The Loan
shall be secured by the Collateral.

 

1.2.          The Term.

 

(a)           The
Maturity Date of the Loan shall initially be the Payment Date in March 2010,
or such earlier date as may result from acceleration.

 

(b)           Borrower
shall have a single option to extend the scheduled Maturity Date of the Loan to
the Payment Date in the month containing the one-year anniversary of the
Maturity Date (the period of such extension, the “Extension Term”), provided
that (i) Borrower shall deliver to Lender written notice of such extension
at least 30 and not more than 60 days prior to the Maturity Date; (ii) no
monetary or other material Default or Mezzanine Loan Event of Default shall be
continuing on either the date of such notice or the Maturity Date as
theretofore in effect; (iii) Borrower shall have obtained an Extension
Interest Rate Cap Agreement for the Extension Term and collaterally assigned
such Extension Interest Rate Cap Agreement to Lender pursuant to an Assignment
of Interest Rate Cap Agreement; (iv) the Mezzanine Loan shall have been
contemporaneously extended such that it shall have a maturity date that is the
same as the Maturity Date and (v) Borrower shall have paid to Lender an
extension fee in an amount equal to 0.75% of the Principal Indebtedness and all
reasonable out-of-pocket expenses incurred by Lender in connection with such
extension. If Borrower fails to exercise the extension option in accordance
with the provisions of this Agreement, the extension option, and any subsequent
extension option hereunder, will automatically cease and terminate.

 

1.3.          Interest and Principal.

 

(a)           On each Payment
Date, Borrower shall pay interest on the Principal Indebtedness for the
Interest Accrual Period in which such Payment Date falls at a rate per annum
equal to the sum of LIBOR, determined as of the Interest Determination Date
immediately preceding such Interest Accrual Period, plus the Spread
(except that interest shall be payable on the Indebtedness, including due but
unpaid interest, at the Default Rate with respect to any portion of such
Interest Accrual Period falling during the continuance of an Event of
Default).  Interest accruing for the
first Interest Accrual Period shall be prepaid on the Closing Date from the
Loan proceeds otherwise to be disbursed to Borrower at Closing.  Interest payable hereunder shall be computed
on the basis of a 360-day year and the actual number of days elapsed.

 

(b)           No prepayments of
the Loan shall be permitted except as provided in Sections 2.1 and 5.16(d).  The entire outstanding Principal
Indebtedness, together with all

 

27

 

interest thereon through the end of the Interest Accrual Period in
which the Maturity Date falls (calculated as if such Principal Indebtedness
were outstanding for the entire Interest Accrual Period) and all other amounts
then due under the Loan Documents shall be due and payable by Borrower to Lender
on the Maturity Date, as such date may be extended pursuant to Section 1.2(b).

 

(c)           Upon written notice from Lender to
Borrower (the “Componentization Notice”), the Note will be deemed to
have been subdivided (retroactively as of the Closing) into multiple components
(“Note Components”).  Each Note
Component shall have such notional balance (a “Component Balance”) as
Lender shall specify in the Componentization Notice and an interest rate equal
to the sum of LIBOR plus such amount as Lender shall specify in the
Componentization Notice (each such amount, a “Component Spread”); provided
that (i) the sum of the Component Balances of all Note Components shall
equal the then-applicable Principal Indebtedness, and (ii) except
following a prepayment as the result of an Event of Default or as a result of
the application of Loss Proceeds in connection with a Casualty or Condemnation,
the weighted average of the Component Spreads, weighted on the basis of their
respective Component Balances, shall equal the percentage set forth in clause (i) of
the definition of “Spread”.  If requested
by Lender, each Note Component shall be represented by a separate physical
Note.  Borrower shall execute and return
to Lender each such Note within a reasonable period of time, but in any event
not in excess of four Business Days after Borrower’s receipt of an execution
copy thereof.

 

(d)           Any
payments of interest and principal not paid when due hereunder shall bear
interest at the applicable Default Rate and, when paid, shall be accompanied by
a late fee in an amount equal to 4% times the amount of such late payment 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.  Borrowers shall have
no obligation hereunder to pay Default Rate interest or a late charge if such
failure to timely make a payment is due to Lender not complying with its
obligations under Article 3 hereof and the Cash Management
Agreement and no Default or Event of Default shall result under the Loan
Documents by reason thereof.

 

1.4.          Interest Rate Cap Agreements.

 

(a)           On or prior to the Closing Date,
Borrower shall obtain, and thereafter maintain in effect, an Initial Interest
Rate Cap Agreement, which shall be coterminous with the initial term of the
Loan and have a notional amount equal to the Loan Amount.   Any Initial Interest Rate Cap Agreement
shall have a LIBOR strike rate equal to or less than the LIBOR Strike Rate.

 

(b)           If Borrower exercises its option to
extend the term of the Loan pursuant to Section 1.2(b), then on or
prior to the commencement of the Extension Term Borrower shall obtain, and
thereafter maintain in effect, an Extension Interest Rate Cap Agreement having (x) a
term coterminous with the Extension Term, (y) a notional amount at least
equal to the Principal Indebtedness as of the first day of the Extension Term,
and (z) a LIBOR strike rate equal to or less than the LIBOR Strike Rate.

 

28

 

(c)           Borrower shall collaterally assign to
Lender pursuant to an Assignment of Interest Rate Cap Agreement all of its
right, title and interest in any and all payments under each Interest Rate Cap
Agreement and shall deliver to Lender an executed counterpart of such Interest
Rate Cap Agreement and obtain the consent of the Acceptable Counterparty to
such collateral assignment (as evidenced by the Acceptable Counterparty’s
execution of such Collateral Assignment of Interest Rate Cap Agreement).

 

(d)           Borrower shall comply with all of its
obligations under the terms and provisions of each Interest Rate Cap
Agreement.  All amounts paid under an
Interest Rate Cap Agreement shall be deposited directly into the Cash Management
Account.  Borrower shall take all actions
reasonably requested by Lender to enforce Lender’s rights under the Interest
Rate Cap Agreement in the event of a default by the counterparty thereunder and
shall not waive, amend or otherwise modify any of its rights thereunder.

 

(e)           If, at any time during the term of
the Loan, the counterparty to the Interest Rate Cap Agreement then in effect
ceases to be an Acceptable Counterparty and thereafter fails to abide by the
requirements set forth in such Interest Rate Cap Agreement with respect to ratings
downgrades, then Borrower shall promptly obtain a replacement Interest Rate Cap
Agreement satisfying the requirements set forth in paragraph (a) or (b) above,
as applicable, with a counterparty that is an Acceptable Counterparty.

 

(f)            At Closing and at any time that
Borrower obtains a replacement Interest Rate Cap Agreement pursuant to this Section 1.4,
Borrower shall deliver to Lender a legal opinion or opinions from counsel to
the applicable Acceptable Counterparty (which counsel may be internal counsel)
in substantially the form of Exhibit B.

 

1.5.          Method and Place of Payment.  Except as otherwise specifically provided in
this Agreement, all payments and prepayments under this Agreement and the Notes
(including any deposit into the Cash Management Account pursuant to Section 3.2(c))
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 by wire transfer in federal or other immediately available funds to the
account specified from time to time by Lender. 
Any funds received by Lender after such time shall be deemed to have
been paid on the next succeeding Business Day. 
Lender shall notify Borrower in writing of any changes in the account to
which payments are to be made.  If the
amount received from Borrower (or from the Cash Management Account pursuant to Section 3.2(b))
is less than the sum of all amounts then due and payable hereunder, such amount
shall be applied, at Lender’s sole discretion, either toward the components of
the Indebtedness (e.g., interest, principal and other amounts payable
hereunder) and the Note Components in such sequence as Lender shall elect in
its sole discretion, or toward the payment of Property expenses.

 

1.6.          Regulatory Change.  If, as a result of any Regulatory Change, any
reserve, special deposit or similar requirements relating to any extensions of
credit or other assets of, or any deposits with, any Lender is imposed,
modified or deemed applicable and the result is to increase the cost to such
Lender of making LIBOR-based loans, or to reduce the amount receivable by
Lender hereunder in respect of any portion of the Loan with respect to
LIBOR-based

 

29

 

loans by an amount deemed by such Lender to be material (such increases
in cost and reductions in amounts receivable, “Increased Costs”), then
Borrower agrees that it will pay to Lender upon Lender’s request such
additional amount or amounts (based upon a reasonable allocation thereof by
such Lender to the LIBOR-based loans made by such Lender) as will compensate
such Lender for such Increased Costs to the extent that such Increased Costs
are reasonably allocable to the Loan. 
Lender will notify Borrower in writing of any event occurring after the
Closing Date which will entitle Lender to compensation pursuant to this Section 1.6
as promptly as practicable after it obtains knowledge thereof and determines to
request such compensation and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.  If such
Lender shall fail to notify Borrower of any such event within 90 days following
the end of the month during which such event occurred, then Borrower’s
liability for any amounts described in this Section incurred by such
Lender as a result of such event shall be limited to those attributable to the
period occurring subsequent to the 90th day prior to the date upon which such
Lender actually notified Borrower of the occurrence of such event.  Notwithstanding the foregoing, in no event
shall Borrower be required to compensate any Lender for any portion of the income
or franchise taxes of Lender, whether or not attributable to payments made by
Borrower.  If a Lender requests
compensation under this Section 1.6, Borrower may, by notice to
Lender, require that such Lender furnish to Borrower a statement setting forth
in reasonable detail the basis for requesting such compensation and the method
for determining the amount thereof.

 

1.7.          Taxes.

 

(a)           Borrower
agrees to indemnify Lender against any present or future stamp, documentary or
other similar or related taxes or other similar or related charges now or
hereafter imposed, levied, collected, withheld or assessed by any United States
Governmental Authority by reason of the execution and delivery of the Loan
Documents and any consents, waivers, amendments and enforcement of rights under
the Loan Documents.

 

(b)           If Borrower is
required by law to withhold or deduct any amount from any payment hereunder in
respect of any U.S. Tax, Borrower shall withhold or deduct the appropriate
amount, remit such amount to the appropriate Governmental Authority and pay to
each Person to whom there has been an Assignment or Participation of a Loan and
who is not a U.S. Person such additional amounts as are necessary in order that
the net payment of any amount due to such non-U.S. Person hereunder after
deduction for or withholding in respect of any U.S. Tax imposed with respect to
such payment (or in lieu thereof, payment of such U.S. Tax by such non-U.S.
Person), will not be less than the amount stated in this Agreement to be then
due and payable; except that the foregoing obligation to pay such additional
amounts shall not apply (i) to any assignee that has not complied with the
obligations contained in Section 9.7(c), (ii) to any U.S.
Taxes withheld or deducted from, or imposed on, any payment hereunder or under
the Note or any Note Components by reason of any present or former connection
between any non-U.S. Person and the United States of America (other than solely
on account of the execution and performance of, the enforcement of any right
under or the receipt of any payment under, this Agreement or a Note), (iii) to
any U.S. Taxes withheld or deducted from, or imposed on, any payment hereunder
or under the Note or any Note Components at the time of any Assignment or

 

30

 

Participation of a Loan or the Note or any Note Components to any
non-U.S. Person, (iv) to any U.S. Taxes imposed solely by reason of the
failure by such Person (or, if such Person is not the beneficial owner of the
relevant Loan, such beneficial owner) to comply with applicable certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connections with the United States of
America of such Person (or beneficial owner, as the case may be) if such
compliance is required by statute or regulation of the United States of America
as a precondition to relief or exemption from such U.S. Taxes; or (v) with
respect to any Person who is a fiduciary or partnership or other than the sole
beneficial owner of such payment, to any U.S. Tax imposed with respect to
payments made under any Note to a fiduciary or partnership to the extent that
the beneficial owner or member of the partnership would not have been entitled
to the additional amounts if such beneficial owner or member of the partnership
had been the holder of the Note.

 

(c)           Within 30 days after
paying any amount from which it is required by law to make any deduction or
withholding, and within 30 days after it is required by law to remit such
deduction or withholding to any relevant taxing or other authority, Borrower
shall deliver to such non-U.S. Person satisfactory evidence of such deduction,
withholding or payment (as the case may be).

 

1.8.          Release.  Upon payment of the Indebtedness in full when
permitted or required hereunder, Lender shall execute instruments prepared by
Borrower and reasonably satisfactory to Lender, which, at Borrower’s election: (a) release
and discharge all Liens on all Collateral securing payment of the Indebtedness
(subject to Borrower’s obligation to pay any associated fees and expenses),
including all balances in the Collateral Accounts, terminate the Loan Documents
(other than those provisions thereof that expressly survive repayment of the Indebtedness
in full) and provide notice to third parties, including the Cash Management
Bank and Tenants; or (b) assign such Liens (and the applicable Loan
Documents) to a new lender designated by Borrower.

 

ARTICLE II

 

PREPAYMENT

 

2.1.          Voluntary
and Mandatory Prepayment.

 

(a)           Borrower shall have
the right, at its option, upon ten Business Days’ prior written notice to
Lender (which notice may be revocable at any time by Borrower, provided that
Borrower shall reimburse Lender for all of its reasonable out-of-pocket costs
and expenses incurred as a result of any such revocation), to prepay the Loan
in whole or in part at any time, provided that if such prepayment is made prior
to the Par Prepayment Date then Borrower shall pay to Lender simultaneously
with such prepayment the applicable Prepayment Fee; provided, however,
that no Prepayment Fee shall be payable with respect to any prepayment of the
Loan pursuant to Section 5.16(d). 
Each such prepayment shall be accompanied by the amount of interest
theretofore accrued but unpaid in respect of the principal amount so prepaid,
plus the amount of interest that would have accrued on the principal amount so
prepaid had it remained outstanding through the end of the Interest Accrual
Period in which such prepayment is made

 

31

 

and, if such prepayment is made during the last two Business Days in
any Interest Accrual Period, the amount of additional interest that would have
accrued on the principal amount so prepaid had it remained outstanding through
the end of the following Interest Accrual Period.  Following any such prepayment, Borrower may
release or transfer, free and clear of the Lien of the Loan Documents, a
portion of the notional amount of the Interest Rate Cap Agreement equal to the
amount of such prepayment.  Any partial
prepayment shall be applied to the last payments of principal due under the
Loan.

 

(b)           Borrower shall not
be permitted to make a voluntary prepayment of the Principal Indebtedness
(except for the application of Loss Proceeds to repayment of the Loan pursuant
to the terms hereof) not associated with the release of a Property unless
simultaneously therewith a prepayment of the Mezzanine Loan shall also be made
in the amount necessary so that the Principal Indebtedness and the Mezzanine
Loan Principal Indebtedness immediately after such prepayment are in the same
proportion as they were immediately prior to such prepayments.  In connection with a prepayment under the
Mezzanine Loan that is not associated with the release of collateral
thereunder, Borrower shall contemporaneously prepay the Loan in the amount
necessary to cause the Principal Indebtedness and the Mezzanine Loan Principal
Indebtedness immediately after such prepayment to be in the same proportion as
they were immediately prior to any such prepayment.  In addition, if Mezzanine Borrower shall make
a prepayment of the Mezzanine Loan that results in the release of any Mortgage
Property Equity Collateral, then Borrower shall contemporaneously prepay the
Loan in the amount required to release the related Property from the Lien of
the Loan Documents (and otherwise comply with the requirements of Section 2.2
with respect to the release of such Property). 
If the Note has been bifurcated into multiple Note Components pursuant
to Section 1.3(c), all prepayments of the Loan, except those made
during the continuance of an Event of Default or pursuant to Section 5.16,
shall be applied to the Note Components on a pro rata basis.  All prepayments of the Loan made during the
continuance of an Event of Default or pursuant to Section 5.16
shall be applied to the Note Components in ascending order of interest rate (i.e.,
first to the Note Component with the lowest Component Spread until its
outstanding principal balance has been reduced to zero, then to the Note
Component with the second lowest Component Spread until its outstanding
principal balance has been reduced to zero, and so on) or in such other order
as Lender shall determine.

 

2.2.          Property Releases.

 

(a)           So long as no Event
of Default is then continuing and all amounts then due and owing to Lender have
been paid in full, Borrower may from time to time obtain the release of one or
more of the Properties from the Liens of the Loan Documents in connection with
a sale to an unaffiliated third-party in an arms’-length transaction or a
Permitted Affiliate Sale, provided that (1) at the time of such
release, Borrower shall prepay the Loan, in accordance with Section 2.1,
in an amount equal to the applicable Release Price, which prepayment shall be
accompanied by the other amounts specified in Section 2.1,
including the applicable Prepayment Fee if such prepayment is made prior to the
Par Prepayment Date, (2) DSCR for the Test Period most recently ended,
recalculated to include only income and expense attributable to Borrower’s
interest in the Properties remaining after the contemplated release and to
exclude the interest expense and principal payments on the aggregate amount to
be prepaid, shall be equal to or

 

32

 

greater than DSCR immediately prior to such release (as reasonably
determined by Lender) and (3) Borrower
shall reimburse Lender for any actual reasonable out-of-pocket costs and
expenses incurred by Lender in connection with this Section 2.2
(including the reasonable fees and expenses of legal counsel and the Servicer).

 

(b)           Upon satisfaction of
the requirements set forth in Sections 2.1 and 2.2, Lender will
execute and deliver to Borrower such instruments, prepared by Borrower and
approved by Lender, as shall be necessary to release the applicable Property or
Properties from the Liens of the Loan Documents or to assign the applicable
portion of such Liens to a third party to the extent necessary to avoid the
incurrence of mortgage recording taxes.

 

2.3  Release of Vacant Land.  So long as no Event of Default is then
continuing,  Borrower may obtain the
release of one or more vacant non-income producing parcels of land (each such
parcel, a “Release Parcel”) from the restrictions and Liens of the Loan
Documents in connection with the Transfer of such Release Parcel to an
unaffiliated third party in a bona fide arms-length transaction upon
satisfaction of the following conditions:

 

(i)            Borrower shall deliver to Lender
notice of its intent to release one or more Release Parcels, which notice must
be given at least 10 Business Days and not more than 60 days prior to the
Business Day upon which the release is to be made and shall specify the Release
Parcel(s) that Borrower intends to release.  Borrower shall promptly reimburse Lender for
any actual out-of-pocket costs and expenses (including the reasonable fees and
expenses of legal counsel and the Servicer) incurred by Lender in connection
with a release pursuant to this Section 2.3.

 

(ii)           At the time of such release, Borrower
shall prepay a portion of the Loan, in accordance with Section 2.1,
in an amount equal to the applicable Parcel Release Price.

 

(iii)          Borrower shall have delivered to
Lender satisfactory evidence that (1) the applicable Release Parcel has
been legally subdivided from the remaining Property, a separate tax
identification number shall have been issued for such Release Parcel and all
necessary variances, if any, shall have been obtained (with the result that,
upon the transfer and release of such Release Parcel, no part of the remaining
Property shall be part of a tax lot which includes any portion of such Release
Parcel); (2) after giving effect to such transfer, each of the Release
Parcel and the remaining Property conforms to and is in compliance in all
material respects with applicable Legal Requirements (including, without
limitation, all zoning and subdivision laws, setback requirements, sideline
requirements, parking ratio requirements, use requirements, building and fire
code requirements, environmental requirements and wetlands requirements) and
constitutes a separate tax lot, (3) the Release Parcel is not necessary
for the remaining Property to comply with any zoning, building, land use or
parking or other Legal Requirements applicable to it or for the then current
use of the remaining Property, including without limitation for access,
driveways, parking, utilities or drainage or, to the extent that the Release
Parcel is necessary for any such purpose, a reciprocal easement agreement or
other agreement has been executed and recorded that would allow the owner of
the remaining Property to continue to use the release Parcel (at no cost or
expense to

 

33

 

Borrower) to the extent
necessary for such purpose, and (4) the lots have been demised to Lender’s
satisfaction in its reasonable discretion;

 

(iv)          Borrower shall deliver to Mortgage
Lender an endorsement to the Qualified Title Insurance Policy insuring the
applicable Mortgage (1) extending the effective date of the policy to the
effective date of the release; (2) confirming no change in the priority of
the Mortgage on the remaining Property (exclusive of the Release Parcel) or in
the amount of the insurance or the coverage of the Property (exclusive of the
Release Parcel) under the policy; and (3) insuring the rights and benefits
under any new or amended reciprocal easement agreement or such other agreement
required pursuant to clause (iv)(3) of this Section that has been
executed and recorded, if any;

 

(vi)          Borrower shall have complied with any
requirements applicable to the release in the Leases, reciprocal easement
agreements, operating agreements, parking agreements or other similar
agreements affecting the remaining Property and the release does not violate
any of the provisions of such documents in any respect that would result in a
termination (or give any other party thereto the right to terminate),
extinguishment or other loss of material rights of Borrower or in a material
increase in Borrower’s obligations under such documents and, to the extent
necessary to comply with such documents, the transferee of the Release Parcel
has assumed Borrower’s obligations, if any, relating to the Release Parcel
under such documents;

 

(vii)         ingress to and egress from all portions
of the remaining Property shall be over (i) physically open and fully
dedicated public roads or (ii) vehicle and pedestrian easements which (1) provide
vehicular and pedestrian access to a physically open and fully dedicated public
road, (2) are recorded in the chain of title to both the property which is
encumbered thereby and the remaining Property, (3) are irrevocable and
non-terminable without the consent of the owner of the remaining Property; and
provided further that, if lawfully obtainable, Borrower delivers to Lender an
endorsement to the Qualified Title Insurance Policy, which endorsement shall
insure that (A) the benefit of each such easement inures and runs to the
benefit of the owner of the remaining Property, (B) the Lien of the
Mortgage is a first Lien on Borrower’s beneficial interest in such easement,
subject to no exceptions other than Permitted Encumbrances and those approved
by Lender in its reasonable discretion and (C) no then-existing mortgages,
Liens, security interests or other encumbrances (other than Permitted
Encumbrances) on the Release Parcel burdened by such easement are superior to,
or under any circumstances could terminate, impair or limit the terms of such
easement;

 

(viii)        Borrower shall have delivered an Officer’s
Certificate to the effect that the conditions in this Section 2.3
have occurred or shall occur concurrently with the transfer and release of the
applicable Release Parcel; and

 

(ix)           Borrower shall execute such documents
and instruments and obtain such opinions of counsel as are typical for similar
transactions.

 

34

 

ARTICLE III

 

ACCOUNTS

 

3.1.          Cash Management Account.

 

(a)           On
or prior to the Closing Date, Borrower shall establish and thereafter maintain
with the Cash Management Bank a cash management account into which income from
the Properties will be deposited (the “Cash Management Account”),
subject to and in accordance with the terms hereof.  As a condition precedent to the closing of
the Loan, Borrower shall cause the Cash Management Bank to execute and deliver
an agreement (as modified or replaced in accordance herewith, a “Cash
Management Agreement”) which provides, inter  alia, that no
party other than Lender and Servicer shall have the right to withdraw funds
from the Cash Management Account.  The
fees and expenses of the Cash Management Bank shall be paid by Borrower.

 

(b)           Within
five Business Days following the Closing Date, Borrower shall deliver to each
Tenant in the Properties a written notice (a “Tenant Notice”) in the
form of Exhibit D instructing that (i) all payments under the
Leases shall thereafter be transmitted by them directly to, and deposited
directly into, the Cash Management Account or a Blocked Account and (ii) such
instruction may not be rescinded unless and until such Tenant receives from
Borrower or Lender a copy of Lender’s written consent to such rescission or
Lender’s written notice that the Loan has been repaid in full.  Borrower shall send a copy of each such
written notice to Lender and shall redeliver such notices to each Tenant until
such time as such Tenant complies therewith. 
Borrower shall cause all cash Revenues relating to the Properties and
all other money received by Borrower or the Approved Property Manager with
respect to the Properties (other than tenant security deposits required to be
held in escrow accounts) to be deposited in the Cash Management Account or a
Blocked Account by the end of the first Business Day following Borrower’s or
the Approved Property Manager’s receipt thereof.  “Blocked Account” means an Eligible
Account maintained with a financial institution reasonably satisfactory to
Lender that enters into a blocked account agreement or similar irrevocable
direction instruction (as modified or replaced in accordance herewith, the “Blocked
Account Agreement”) reasonably satisfactory to Lender pursuant to which such
financial institution will remit, at the end of each Business Day, all amounts
contained therein to an account specified by Lender (Lender hereby agreeing to
specify the Cash Management Account so long as no Event of Default has occurred
and is then continuing).

 

(c)           Lender
shall have the right at any time, upon not less than 30 days’ prior written
notice to Borrower, to replace the Cash Management Bank with any Eligible
Institution at which Eligible Accounts may be maintained that will promptly
execute and deliver to Lender a Cash Management Agreement substantially
identical to the Cash Management Agreement executed at Closing.  In addition, during the continuance of an
Event of Default or if the Blocked Account Bank fails to comply with the
Blocked Account Agreement or ceases to be an Eligible Institution, Lender shall
have the right at any time, upon not less than 30 days’ prior written notice to
Borrower, to replace the Blocked Account Bank with any Eligible Institution at
which

 

35

 

Eligible
Accounts may be maintained that will promptly execute and deliver to Lender a
Blocked Account Agreement satisfactory to Lender

 

(d)                                  Borrower
and Lender agree that the flow of funds with respect to the Cash Management
Account and the Blocked Account as depicted in the diagrams attached hereto as Schedule
K is in compliance with this Section 3.1.

 

3.2.                               Distributions
from Cash Management Account.

 

(a)           The
Cash Management Agreement shall provide that the Cash Management Bank shall
remit to an account specified by Mezzanine Lender, at the end of each Business
Day (or, at Borrower’s election, on a less frequent basis), the amount, if any,
by which amounts then contained in the Cash Management Account exceed the
aggregate amount required to be paid to or reserved with Lender, or prepaid
pursuant to Section 2.1(b), on the next Payment Date pursuant to Section 3.2(b) (the
“Minimum Balance”); provided, however, that Lender shall
terminate such remittances during the continuance of an Event of Default upon
notice to the Cash Management Bank. 
Lender may notify the Cash Management Bank at any time of any change in
the Minimum Balance.  Lender shall deliver
a copy of any notice of a change in the Minimum Balance to Borrower, for information
only (but any failure by Lender to do so shall not in any way limit Borrower’s
obligations or liabilities hereunder). 
Any payment received by any Borrower pursuant to this Section 3.2
shall be received free of the Lien of the Loan Documents.

 

(b)           On
each Payment Date, provided no Event of Default has occurred and is continuing,
Lender shall transfer amounts from the Cash Management Account, to the extent
available therein, to make the following payments in the following order of
priority:

 

(i)            to Lender, the amount of all
scheduled or delinquent interest on the Loan and all other amounts then due and
payable under the Loan Documents; and

 

(ii)           all remaining amounts to such account
as shall be designated by Mezzanine Lender from time to time.

 

(c)           If
on any Payment Date the amount in the Cash Management Account shall be
insufficient to make the transfer described in Section 3.2(b)(i),
Borrower shall deposit into the Cash Management Account on such Payment Date
the amount of such deficiency.  If Borrower
shall fail to make such deposit, the same shall constitute an Event of Default
and, in addition to all other rights and remedies provided for under the Loan
Documents, Lender may disburse and apply the amounts in the Collateral Accounts
in accordance with Section 3.5(c).

 

(d)           Lender
may conclusively rely upon any notice received from Mezzanine Lender with
respect to the occurrence, continuance or termination of any Mezzanine Loan
Event of Default.  Lender shall be under
no duty to inquire into or investigate the validity, accuracy or content of any
such notice.

 

(e)           Notwithstanding
anything to the contrary contained in this Agreement, the Loan Documents,
and/or the Mezzanine Loan Documents, the parties hereto acknowledge and

 

36

 

agree that, as to
any clause or provision contained in this Agreement, the other Loan Documents,
and/or the Mezzanine Loan Documents to the effect that payments, distributions,
or other similar effect are to be made by Borrower to Mezzanine Lender or
applied to the Mezzanine Loan or to any account specified by Mezzanine Lender,
such clause or provision shall be deemed to mean, and shall be construed as
meaning, that Lender shall pay to Borrower, and Borrower shall then immediately
distribute to Mezzanine Borrower, pursuant to and in accordance with the
organizational documents of Borrower and applicable law, which distribution
shall be immediately payable to Mezzanine Lender, and any such clause or
provision shall not be construed as meaning that Borrower and/or Mezzanine
Borrower is acting on behalf of, holding out its credit for, or paying the
obligations of, Mezzanine Borrower, as applicable, directly or in any other
manner that would violate any of the single purpose entity covenants contained
in this Agreement or other similar covenants contained in Borrower’s
organizational documents or Mezzanine Borrower’s organizational documents,
respectively.

 

3.3.          Loss
Proceeds Account.

 

(a)           On or prior to the
Closing Date, Borrower shall establish and thereafter maintain with the Cash
Management Bank an account for the purpose of depositing any Loss Proceeds (the
“Loss Proceeds Account”).

 

(b)           Provided no Event of
Default is continuing, funds in the Loss Proceeds account shall be applied in accordance
with Section 5.16.

 

3.4.          Environmental
Escrow Account.

 

(a)           On or prior to the
Closing Date, Borrower shall establish and thereafter maintain with the Cash
Management Bank an account for the purpose of reserving amounts anticipated to
be required to correct Environmental Conditions (the “Environmental Escrow
Account”).

 

(b)           On the Closing Date,
Borrower shall deposit into the Environmental Escrow Account, from the proceeds
of the Loan, an amount equal to the Environmental Escrow Amount.

 

(c)           Upon the request of
Borrower at any time that no Event of Default is continuing (but not more often
than once per calendar month), Lender shall cause disbursements to Borrower
from the Environmental Escrow Account to reimburse Borrower for reasonable
costs and expenses incurred in order to correct Environmental Conditions, provided
that

 

(i)            Borrower shall deliver to Lender
invoices evidencing that the costs for which such disbursements are requested
are due and payable;

 

(ii)           Borrower shall deliver to Lender an
Officer’s Certificate confirming that all such costs have been previously paid
by Borrower or will be paid from the proceeds of the requested disbursement;
and

 

37

 

(iii)          Lender may condition the making of a
requested disbursement on (1) reasonable evidence establishing that
Borrower has applied any amounts previously received by it in accordance with
this Section for the expenses to which specific draws made hereunder
relate, (2) reasonably satisfactory site inspections, and (3) receipt
of lien releases and waivers from any contractors, subcontractors and others
with respect to such amounts.

 

(d)           Upon substantial
resolution (as reasonably determined by Lender) of the portion of the
Environmental Conditions identified on any line on Schedule L, and
provided no Event of Default is then continuing, the remainder of the portion
of the Environmental Escrow Account held for such line item (as shown adjacent
to such line item on Schedule L) shall promptly be remitted to
Borrower.  Upon the correcting of all
Environmental Conditions or other resolution reasonably satisfactory to Lender
with respect thereto, provided no Event of Default is then continuing, any
amounts then remaining in the Environmental Escrow Account shall promptly be
remitted to Borrower and the Environmental Escrow Account will no longer be
maintained.

 

3.5.          Account
Collateral.

 

(a)           Borrower hereby
grants a perfected first-priority security interest in favor of Lender in and
to the Account Collateral as security for the Indebtedness, together with all
rights of a secured party with respect thereto. 
Each Collateral Account shall be an Eligible Account under the sole
dominion and control of Lender and shall be in the name of Borrower, as
pledgor, and Lender, as pledgee. 
Borrower shall have no right to make withdrawals from any of the
Collateral Accounts.  Funds in the
Collateral Accounts shall not be commingled with any other monies at any
time.  Borrower shall execute any
additional documents that Lender in its reasonable discretion may require and
shall provide all other evidence reasonably requested by Lender to evidence or
perfect its first-priority security interest in the Account Collateral.  Funds in the Collateral Account shall be
invested in Permitted Investments selected by Lender.  Unless otherwise required by applicable law,
provided no Event of Default is continuing, all income and gains from the
investment of funds in the Collateral Accounts shall be for the account of
Borrower and shall be paid to Borrower upon written request therefor (but in
any event, not more often than monthly). After the Loan and all other
Indebtedness have been paid in full, the Collateral Accounts shall be closed
and the balances therein, if any, shall be paid to Borrower.

 

(b)           The insufficiency of
amounts contained in the Collateral Accounts shall not relieve Borrower from
its obligation to fulfill all covenants contained in the Loan Documents.

 

(c)           During the
continuance of an Event of Default, Lender may, in its sole discretion, apply
funds in the Collateral Accounts, and funds resulting from the liquidation of
Permitted Investments contained in the Collateral Accounts, either toward the
components of the Indebtedness (e.g., interest, principal and other
amounts payable hereunder), the Loan and the Note Components in such sequence
as Lender shall elect in its sole discretion, and/or toward the payment of
Property expenses.

 

38

 

3.6.          Bankruptcy.  Borrower and Lender acknowledge and agree
that upon the filing of a bankruptcy petition by or against Borrower under the
Bankruptcy Code, the Account Collateral and the Revenues (whether then already
in the Collateral Accounts, or then due or becoming due thereafter) shall be deemed
not to be property of Borrower’s bankruptcy estate within the meaning of Section 541
of the Bankruptcy Code.  If, however, a
court of competent jurisdiction determines that, notwithstanding the foregoing
characterization of the Account Collateral and the Revenues by Borrower and
Lender, the Account Collateral and/or the Revenues do constitute property of
Borrower’s bankruptcy estate, then Borrower and Lender further acknowledge and
agree that all such Revenues, whether due and payable before or after the
filing of the petition, are and shall be cash collateral of Lender.  Borrower acknowledges that Lender does not
consent to Borrower’s use of such cash collateral and that, in the event Lender
elects (in its sole discretion) to give such consent, such consent shall only
be effective if given in writing signed by Lender.  Except as provided in the immediately
preceding sentence, Borrower shall not have the right to use or apply or
require the use or application of such cash collateral (i) unless Borrower
shall have received a court order authorizing the use of the same, and (ii) Borrower
shall have provided such adequate protection to Lender as shall be required by
the bankruptcy court in accordance with the Bankruptcy Code.

 

ARTICLE
IV

 

REPRESENTATIONS

 

Borrower represents to Lender that, as of the Closing Date, except as
set forth in the Exception Report:

 

4.1.         Organization.

 

(a)           Each
Borrower is duly formed, validly existing and in good standing under the laws
of the state of its formation, and is in good standing in each other
jurisdiction where ownership of its properties or the conduct of its business
requires it to be so, and each Borrower has all power and authority under such
laws and its organizational documents and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.

 

(b)           No
Borrower has any subsidiaries and no Borrower owns any equity interest in any
other Person.

 

4.2.          Authorization.  Each Borrower has the power and authority to
enter into this Agreement and the other Loan Documents, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated by the Loan Documents and has by proper action duly authorized the
execution and delivery of the Loan Documents.

 

4.3.          No Conflicts.  Neither the execution and delivery of the
Loan Documents, nor the consummation of the transactions contemplated therein,
nor performance of and compliance with the terms and provisions thereof will (i) violate
or conflict with any provision of its formation and governance documents, (ii) violate
any law, regulation (including Regulation

 

39

 

U, Regulation X or Regulation T), order, writ, judgment, injunction,
decree or permit applicable to it, (iii) violate or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage or contract to which any Borrower or Sponsor is a
party or by which Borrower or Sponsor may be bound which violation, conflict or
event of default is reasonably likely to result in a Portfolio Material Adverse
Effect, or (iv) result in or require the creation of any Lien or other
charge or encumbrance upon or with respect to the Collateral in favor of any
party other than Lender.

 

4.4.          Consents.  No consent, approval, authorization or order
of, or qualification with, any court or Governmental Authority is required in
connection with the execution, delivery or performance by any Borrower of this
Agreement or the other Loan Documents, the failure to obtain which is
reasonably likely to result in a Portfolio Material Adverse Effect, except for
any of the foregoing which have already been obtained.

 

4.5.          Enforceable
Obligations.  This Agreement and the
other Loan Documents have been duly executed and delivered by Borrower and
constitute each Borrower’s legal, valid and binding obligations, enforceable in
accordance with their respective terms, subject to bankruptcy, insolvency and
similar laws of general applicability relating to or affecting creditors’
rights and to general equity principles. 
The Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense by any Borrower, including the defense of usury.

 

4.6.          No Default.  No Default or Event of Default will exist
immediately following the making of the Loan.

 

4.7.          Payment of Taxes.  Each Borrower has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
and paid all amounts of taxes due (including interest and penalties) except for
taxes which are not yet delinquent and has paid all or made provision with the
title company for the payment of all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangible taxes) owing by it necessary to preserve the Liens in
favor of Lender.

 

4.8.          Compliance with
Law.  Except as disclosed in the
Zoning Reports, each Borrower, each Property and the uses thereof comply with all
applicable Insurance Requirements and Legal Requirements, including building
and zoning ordinances and codes, except to the extent that failure to comply
therewith would not result in a Portfolio Material Adverse Effect.  Except as disclosed in the Zoning Reports,
each Encumbered Property, and to Borrower’s knowledge, each Unencumbered
Property conforms in all material respects 
to current zoning requirements (including requirements relating to
parking) and is not an illegal nonconforming use.  No Borrower is in default or violation of any
order, writ, injunction, decree or demand of any Governmental Authority the
violation of which is reasonably likely to result in a Material Adverse
Effect.  There has not been committed by
or on behalf of any Borrower or to Borrower’s knowledge any other person in
occupancy of or involved with the operation or use of any Encumbered Property,
or to Borrower’s knowledge, any other person in occupancy of or involved with
the operation or use of any Unencumbered Property, any act or omission
affording any federal Governmental Authority or any state or local Governmental
Authority the right of forfeiture as against any Property or any portion
thereof or any monies paid in performance of its

 

40

 

obligations under any of the Loan Documents.  Neither Borrower nor Sponsor has purchased
any portion of the Properties with proceeds of any illegal activity.

 

4.9.          ERISA.  Neither Borrower nor any ERISA Affiliate of
Borrower has incurred or could be subjected to any liability under Title IV or Section 302
of ERISA or Section 412 of the Code or maintains or contributes to, or is
required to maintain or contribute to, any Plan.  The consummation of the transactions
contemplated by this Agreement will not constitute or result in any non-exempt
prohibited transaction under Section 406 of ERISA, Section 4975 of
the Code or substantially similar provisions under federal, state or local
laws, rules or regulations; provided that the foregoing representation is
subject to the assets used by the Lender not being or being treated under ERISA
as Plan Assets.

 

4.10.        Investment Company
Act.  No Borrower is an “investment
company”, or a company “controlled” by an “investment company”, registered or
required to be registered under the Investment Company Act of 1940, as amended.

 

4.11.        No Bankruptcy
Filing.  No Borrower is contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets or
property.  No Borrower has any knowledge
of any Person contemplating the filing of any such petition against it.

 

4.12.        Other Debt.  Borrower does not have outstanding any Debt
other than Permitted Debt.

 

4.13.        Litigation.  There are no actions, suits, proceedings,
arbitrations or governmental investigations by or before any Governmental
Authority or other court or agency now pending, and to Borrower’s knowledge
there are no such actions, suits, proceedings, arbitrations or governmental
investigations threatened, against or affecting any Borrower or any Property,
which individually or collectively would have a Portfolio Material Adverse
Effect if determined against Borrower.

 

4.14.        Leases; Material
Agreements.

 

(a)           Borrower has
delivered to Lender true and complete copies of all Leases requested by
Lender.  No person has any possessory
interest in any of the Properties or right to occupy the same except under and
pursuant to the provisions of the Leases. 
The certified rent roll delivered to Lender as of the Closing Date (the “Rent
Roll”) is true and correct in all material respects as of February 29,
2008, and since such date, there have been no changes to the Rent Roll that
would have a Portfolio Material Adverse Effect, no new Major Leases have been
entered into and no Major Lease has been terminated.  Borrower is holding approximately $150,000 in
respect of Tenant security deposits and is holding no security deposits with
respect to Major Leases, no fixed rent has been paid more than 30 days in
advance of its due date and no payments of rent are more than 30 days
delinquent.  Except as set forth on Schedule
H, no Tenant under any of the Leases referenced in Schedule H has
any remaining termination or contraction options.  Except as set forth in the Leases, no Tenant
has any extension or renewal options. 
Except as set forth in the Qualified Title Policies, with respect to the
Encumbered

 

41

 

Properties, or the Leases, with respect to the Unencumbered Properties,
no Tenant or other party has any option, right of first refusal or similar
preferential right to purchase or lease all or any portion of any Property.

 

(b)           Except as set forth
on the Exception Report, to Borrower’s knowledge (x) all material work to
be performed by the landlord under Major Leases has been substantially
performed, all material contributions to be made by the landlord to the Tenants
thereunder have been made and all other material conditions to each Tenant’s obligations
thereunder have been satisfied, in each case, in all material respects, and (y) no
Tenant under a Major Lease has the right to require any Borrower to perform or
finance any material Tenant Improvements or Material Alterations and no
material Leasing Commissions are owed or would be owed upon the exercise of any
such Tenant’s existing renewal or expansion options.

 

(c)           To Borrower’s
knowledge, there are no Material Agreements except as described in Schedule
D.  To Borrower’s knowledge, Borrower
has made available to Lender true and complete copies of all Material
Agreements.  To Borrower’s knowledge,
each Material Agreement has been entered into at arm’s length in the ordinary
course of business by or on behalf of Borrower.

 

(d)           The Leases and the
Material Agreements are in full force and effect and, except as set forth on
the Rent Roll, there are no defaults thereunder by any Borrower or any other
party thereto which is reasonably likely to result in a Portfolio Material
Adverse Effect.  No Borrower is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Permitted Encumbrance or
any other agreement or instrument to which it is a party or by which it or any
of the Properties are bound which default is reasonably likely to result in a
Portfolio Material Adverse Effect.

 

4.15.        Full and Accurate
Disclosure.  To Borrower’s knowledge,
no statement of fact heretofore delivered by Sponsor or Borrower to Lender in
writing in respect of the Properties or any Borrower contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained therein not misleading unless subsequently
corrected.  There is no fact presently
actually known to Borrower which has not been disclosed to Lender which is
reasonably likely to result in a Portfolio Material Adverse Effect.

 

4.16.        Financial
Condition.  To Borrower’s knowledge,
except as otherwise disclosed in writing to Lender, all financial data concerning
Borrower and the Properties heretofore provided to Lender fairly presents in
accordance with GAAP the financial position of Borrower in all material
respects, as of the date on which it was made, and does not omit to state any
material fact necessary to make statements contained herein or therein not
misleading.  Since the delivery of such
data, except as otherwise disclosed in writing to Lender there have occurred no
changes or circumstances which have had or are reasonably likely to result in a
Portfolio Material Adverse Effect.

 

4.17.        Single-Purpose Requirements.  Each Borrower and its respective
Single-Purpose Equityholder, except as disclosed on Exhibit A, is
now a Single-Purpose Entity and has always been a Single-Purpose Entity, to the
extent relevant to the Nonconsolidation Opinion.  All

 

42

 

statements of fact contained in the Nonconsolidation Opinion and in the
certificates referenced therein and attached thereto are true and correct in
all material respects.

 

4.18.        [Intentionally
Omitted].

 

4.19.        Not Foreign Person.  No Borrower is a “foreign person” within the
meaning of Section 1445(f)(3) of the Code.

 

4.20.        Labor Matters.  Except as listed on the Exception Report, no
Borrower is a party to any collective bargaining agreements.

 

4.21.        Title.  Each Borrower owns good, marketable and
insurable title to its respective Property or 
Properties and good and marketable title to the related personal
property, to the Collateral Accounts and to any other Collateral, in each case
free and clear of all Liens whatsoever except the Permitted Encumbrances.  The Mortgages, 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) valid,
perfected first priority Liens on the Encumbered Properties and the rents
therefrom, enforceable as such against creditors of and purchasers from
Borrower and subject only to Permitted Encumbrances, and (ii) perfected
Liens (pursuant to the Uniform Commercial Code of the State of Delaware) in and
to all personalty, all in accordance with the terms thereof, in each case
subject only to any applicable Permitted Encumbrances.   The Permitted Encumbrances do not and will not
materially and adversely affect or interfere with the value, or current use or
operation, of the Properties, or the security intended to be provided by the
Mortgages or Borrower’s ability to repay the Indebtedness in accordance with
the terms of the Loan Documents.  Except
as insured over by a Qualified Title Insurance Policy, there are no claims for
payment for work, labor or materials affecting the Encumbered Properties which
are or may become a Lien prior to, or of equal priority with, the Liens created
by the Loan Documents.  No creditor of
any Borrower other than Lender has in its possession any goods that constitute
or evidence the Collateral.

 

4.22.        No Encroachments.  Except as shown on the applicable Qualified
Survey, all of the improvements on each Encumbered Property lie wholly within
the boundaries and building restriction lines of the such Property, and no
improvements on adjoining property encroach upon any Encumbered Property, and
no easements or other encumbrances upon any Encumbered Property encroach upon
any of the improvements, so as, in either case, to adversely affect the value
or marketability of the applicable Property, except those which are insured
against by a Qualified Title Insurance Policy. 
All of the improvements on each of the Unencumbered Properties lie
wholly within the boundaries and building restriction lines of the such
Properties, except to the extent that failure of any improvements to lie wholly
within such boundaries and building restriction lines does not cause a Portfolio
Material Adverse Effect; and no improvements on adjoining property encroach
upon any of the Unencumbered Properties, and no easements or other encumbrances
upon any of the Unencumbered Properties encroach upon any of the improvements,
so as, in either case, to cause a Portfolio Material Adverse Effect.

 

43

 

4.23.        Physical Condition.

 

(a)           Based solely on the
Engineering Reports, each Encumbered Property (including sidewalks, storm
drainage system, roof, plumbing system, HVAC system, fire protection system,
electrical system, equipment, elevators, exterior sidings and doors, irrigation
system and all structural components) is in good condition, order and repair in
all respects material to its use, operation or value.  Each Unencumbered  Property (including sidewalks, storm drainage
system, roof, plumbing system, HVAC system, fire protection system, electrical
system, equipment, elevators, exterior sidings and doors, irrigation system and
all structural components) is in good condition, order and repair in all
respects material to its use, operation or value, except to the extent that the
failure of such Unencumbered Property to be in good condition, order and repair
does not result in a Portfolio Material Adverse Effect.

 

(b)           Based solely on the
Engineering Reports, Borrower is not aware of any material structural or other
material defect or damages in any of the Encumbered Properties, whether latent
or otherwise.  Borrower is not aware of
any material structural or other material defect or damages in any of the
Unencumbered Properties, whether latent or otherwise, that would have a
Portfolio Material Adverse Effect.

 

(c)           No Borrower has
received or is aware of any other party’s receipt of written notice from any
insurance company or bonding company of any defects or inadequacies in any of
the Properties which would, alone or in the aggregate, adversely affect in any
material respect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.

 

4.24.        Fraudulent
Conveyance.  Borrower has not entered
into the Transaction or any of the Loan Documents with the actual intent to
hinder, delay or defraud any creditor. 
Borrower has received reasonably equivalent value in exchange for its
obligations under the Loan Documents. On the Closing Date, the fair salable
value of each Borrower’s aggregate assets is and will, immediately following
the making of the Loan and the use and disbursement of the proceeds thereof, be
greater than such Borrower’s probable aggregate liabilities (including
subordinated, unliquidated, disputed and Contingent Obligations).  Each Borrower’s aggregate assets do not and,
immediately following the making of the Loan and the use and disbursement of
the proceeds thereof will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted.  No Borrower intends to, and does not believe
that it will, incur debts and liabilities (including Contingent Obligations and
other commitments) beyond its ability to pay such debts as they mature (taking
into account the timing and amounts to be payable on or in respect of
obligations of such Borrower).

 

4.25.        Management.  Except for any Approved Management Agreement,
no property management agreements are in effect with respect to the Properties,
other than sub-management agreements entered into in accordance with the terms
of the Approved Management Agreements.

 

4.26.        Condemnation.  Except as listed on the Exception Report, no
Condemnation has been commenced or is contemplated with respect to all or any
material

 

44

 

portion of any of the Encumbered Properties or for the relocation of
roadways providing access to any of the Encumbered Properties or, to Borrower’s
knowledge, is contemplated with respect to all or any material portion of any
of the Unencumbered Properties or for the relocation of roadways providing
access to any of the Unencumbered Properties.

 

4.27.        Utilities and
Public Access.  Each  Property has adequate rights of access to
dedicated public ways (and makes no material use of any means of access or
egress that is not pursuant to such dedicated public ways or recorded,
irrevocable rights-of-way or easements) and is adequately served by all public
utilities necessary to the continued use and enjoyment of such Property as
presently used and enjoyed.

 

4.28.        Environmental
Matters.  Except as disclosed in the
Environmental Reports and except as disclosed on the Exception Report:

 

(i)            To Borrower’s
knowledge, each Property is in compliance in all material respects with all
Environmental Laws applicable to such Property (which compliance includes, but
is not limited to, the possession of, and compliance with, all environmental,
health and safety permits, approvals, licenses, registrations and other
governmental authorizations required in connection with the ownership and
operation of such Property under all Environmental Laws).

 

(ii)           No Environmental
Claim is pending with respect to any of the Properties, nor, to Borrower’s
knowledge, is any threatened, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to any Borrower or any of the Properties.

 

(iii)          Without limiting
the generality of the foregoing, to Borrower’s knowledge, there is not present
at, on, in or under any Property, any Hazardous Substances, PCB-containing
equipment, asbestos or asbestos containing materials, underground storage tanks
or surface impoundments for any Hazardous Substance, lead in drinking water
(except in concentrations that comply with all Environmental Laws), or
lead-based paint, in each case in violation of Environmental Law.

 

(iv)          To Borrower’s
knowledge, there have not been and are no past, present or threatened Releases
of any Hazardous Substance from or at any of the Properties that are reasonably
likely to form the basis of any Environmental Claim, and, to Borrower’s
knowledge, there is no threat of any Release of any Hazardous Substance
migrating to any of the Properties.

 

(v)           Based solely on the
title reports delivered to Lender, no Liens are presently recorded with the
appropriate land records under or pursuant to any Environmental Law with
respect to any of the Encumbered Properties and, to Borrower’s knowledge, no
Governmental Authority has been taking any action to subject any of the
Properties to Liens under any Environmental Law.

 

45

 

(vi)          To Borrower’s
knowledge, there have been no material environmental investigations, studies,
audits, reviews or other analyses conducted by or that are in the possession of
Borrower in relation to any of the Properties which have not been made
available to Lender.

 

4.29.        Assessments.  There are no pending or, to Borrower’s
knowledge, proposed special or other assessments for public improvements or
otherwise affecting any of the Properties, nor are there any contemplated
improvements to any of the Properties that may result in such special or other
assessments.  No extension of time for
assessment or payment by Borrower of any federal, state or local tax is in
effect.

 

4.30.        No Joint
Assessment.  No Borrower has
suffered, permitted or initiated the joint assessment of any of the Properties (i) with
any other real property constituting a separate tax lot, or (ii) with any
personal property, or any other procedure whereby the Lien of any Taxes which
may be levied against such other real property or personal property shall be
assessed or levied or charged to any of the Properties as a single Lien.

 

4.31.        Separate Lots.  No portion of any of the Properties is part
of a tax lot that also includes any real property that is not Collateral.

 

4.32.        Permits;
Certificate of Occupancy.   Borrower
has obtained all material Permits necessary for the present and contemplated
use and operation of each Property and that Borrower is obligated to obtain
under Legal Requirements.  The permitted
uses set forth in the Leases are in conformity in all material respects with
the certificate of occupancy and/or material Permits for such  Property and any other restrictions,
covenants or conditions affecting such Property and, to Borrower’s knowledge,
the actual uses being made of each Property are in conformity in all material
respects with the certificate of occupancy and/or Permits for such Property and
any other restrictions, covenants or conditions affecting such Property, in
each case where non-conformity would not have a Material Adverse Effect.

 

4.33.        Flood Zone.  None of the Improvements on any of the
Properties is located in an area identified by the Federal Emergency Management
Agency or the Federal Insurance Administration as a “100 year flood plain” or
as having special flood hazards (including Zones A, B, C, V and X and Shaded X
areas), or, to the extent that any portion of any of the Properties is located
in such an area, such Property is covered by flood insurance meeting the
requirements set forth in Section 5.15(a)(ii).

 

4.34.        Security Deposits.  Each Borrower is in compliance in all
material respects with all Legal Requirements relating to security deposits.

 

4.35.        Acquisition
Documents.  Borrower has made
available to Lender true and complete copies of all material agreements and
instruments under which Borrower or any of its Affiliates or the seller of any
of the Properties have remaining material rights or material obligations in
respect of Borrower’s acquisition of the Properties.

 

46

 

4.36.        Insurance.  Except with respect to the Properties subject
to a Net Lease, Borrower has obtained insurance policies reflecting the
insurance coverages, amounts and other requirements set forth in this Agreement.  All premiums on such insurance policies
required to be paid as of the Closing Date have been paid for the current
policy period.  Borrower has not done,
and to Borrower’s knowledge, no other Person has done, by act or omission,
anything which would impair the coverage of any such policy.

 

4.37.        Ground Leased
Parcels.  With respect to each Ground
Leased Parcel, each of the following is true with respect to the related Ground
Lease (taking into account the terms of any applicable estoppel letter):

 

(i)            true and complete copies of the
Ground Leases have been delivered to Lender, and except as set forth in the
Exception Report the Ground Leases or memoranda thereof have been duly
recorded;

 

(ii)           to Borrower’s knowledge, the Ground
Leases  are in full force and effect and
no material default beyond applicable grace, cure or notice periods has
occurred thereunder nor, to Borrower’s knowledge, is there any existing
condition which, but for the passage of time or the giving of notice or both,
would result in a material default under the terms of any of the Ground Leases;

 

(iii)          except as set forth in the Exception
Report, the Ground Leases have original terms which extend not less than 30
years beyond the Maturity Date (assuming the exercise of all extension options
hereunder), taking into account any extension options that are freely
exercisable by the lessee under the Ground Lease, and all such extension
options have either been previously exercised or are first exercisable not less
than five years after the Maturity Date;

 

(iv)          except as set forth in the Exception
Report, the Ground Leases do not restrict the use of any portion of the
Properties by the lessee, its successors or its assigns in a manner that would
cause a Material Adverse Effect;

 

(v)           except as set forth in the Exception
Report, the Ground Leases permit the interest of the lessee thereunder to be
encumbered by leasehold mortgages and contains no restrictions on the identity
of a leasehold mortgagee;

 

(vi)          except as set forth in the Exception
Report, the Ground Leases may not be amended, modified, cancelled or terminated
without the prior written consent of a leasehold mortgagee;

 

(vii)         with respect to the Encumbered
Properties, to Borrower’s knowledge, other than Permitted Encumbrances, the
Ground Leases are not subject to any Liens or encumbrances superior to, or of
equal priority with, the Mortgage (other than the ground lessor’s fee
interest);

 

47

 

(viii)         with respect to the
Encumbered Properties, to Borrower’s knowledge, other than Permitted
Encumbrances, there are no Liens encumbering the ground lessor’s fee interests,
and, except as permitted herein, Borrower shall not permit or cause any Lien to
become superior to the Ground Lease upon the related fee interest that may
hereafter be granted;

 

(ix)           except as set forth in the Exception
Report, the Ground Leases are assignable by a holder of a leasehold mortgage
upon a foreclosure of such mortgage without the consent of the lessor
thereunder;

 

(x)            except as set forth in the Exception
Report, the Ground Leases require the lessor thereunder to give notice of any
default by the lessee to a holder of a leasehold mortgage; and the Ground
Leases further provide that no notice given thereunder is effective against
such holder, unless a copy has been given to such holder in the manner
described in such Ground Lease;

 

(xi)           except as set forth in the Exception
Report, a holder of a leasehold mortgage is permitted at least 30 days in
addition to Borrower’s applicable cure period to cure any default under each of
the Ground Leases which is curable after the receipt of notice of any such
default before the lessor thereunder may terminate such Ground Lease (and,
where necessary, is permitted the opportunity to gain possession of the
interest of the lessee under such Ground Lease through legal proceedings or to
take other action so long as such holder is proceeding diligently);

 

(xii)          except as set forth
in the Exception Report, in the case of any default which is not curable by a
holder of a leasehold mortgage, or in the event of the bankruptcy or insolvency
of the lessee under one of the Ground Leases, such holder has the right,
following termination of such existing Ground Lease or rejection thereof by a
bankruptcy trustee or similar party, to enter into a new ground lease with the
lessor on the same terms as such existing Ground Lease, and all rights of the
lessee under such Ground Lease may be exercised by or on behalf of such holder;
and

 

(xiii)         except as set forth in the Exception
Report, the Ground Leases do not impose any restrictions on subletting.

 

4.38.        Intentionally
Omitted.

 

4.39.        Estoppel
Certificates.  Borrower has delivered
to Lender true and complete copies of (a) the form(s) of estoppel
certificate heretofore sent by Borrower or an Affiliate to Tenants and lessors
under Ground Leases, and (b) each estoppel certificate received back from
any such Tenant or lessor prior to the Closing Date.

 

4.40         Embargoed Person.  (a) None of the funds or other assets of any of Borrower, any
Single-Purpose Equityholder or Sponsor constitute property of, or, to Borrower’s
knowledge, are beneficially owned, directly or indirectly, by any person,
entity or government subject to trade restrictions under federal law,
including, without limitation, the International

 

48

 

Emergency Economic Powers Act, 50
U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C.
App. 1 et seq. , and any executive orders or regulations promulgated
thereunder, with the result that (i) the investment in any Borrower, any
Single-Purpose Equityholder or Sponsor, as applicable (whether directly or
indirectly), is prohibited by law or (ii) the Loan is in violation of law
(any such person, entity or government, an “Embargoed Person”); (b) to
Borrower’s knowledge, no Embargoed Person has any interest of any nature
whatsoever in any Borrower, any Single-Purpose Equityholder or Sponsor, as
applicable (whether directly or indirectly), with the result that (i) the
investment in any Borrower, any Single-Purpose Equityholder or Sponsor, as
applicable (whether directly or indirectly) is prohibited by law or (ii) the
Loan is in violation of law and (c) to Borrower’s knowledge, none of the
funds of any Borrower, any Single-Purpose Equityholder or Sponsor, as
applicable, have been derived from any unlawful activity with the result that (i) the
investment in any Borrower, any Single-Purpose Equityholder or Sponsor, as
applicable (whether directly or indirectly) is prohibited by law or (ii) the
Loan is in violation of law. 
Notwithstanding Section 4.42 to the contrary, the
representations and warranties contained in this Section 4.40 shall
survive in perpetuity.

 

4.41         Compliance with
Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws.  Each Borrower, and to Borrower’s knowledge, (a) each
Person owning an interest in any Borrower, any Single-Purpose Equityholder or
Sponsor, (b) each Single-Purpose Equityholder, if any, (c) Sponsor,
and (d) each property manager (including each Approved Property Manager): (i) is
not currently identified on the OFAC List and (ii) is not a Person with
whom a citizen of the United States is prohibited to engage in transactions by
any trade embargo, economic sanction, or other prohibition of any Legal
Requirement.  Borrower has implemented
procedures, and will consistently apply those procedures throughout the term of
the Loan, to ensure the foregoing representations and warranties remain true
and correct during the term of the Loan.

 

4.42.        Tax Basis.  After giving effect to the Transaction and
certain  other actions related thereto,
the U.S. Federal income tax basis of the Properties will be increased in an
aggregate amount equal to the portion of the acquisition cost under the Merger
Agreement allocable to such Properties on a pro rata basis, which allocation
shall be based on the ratio of the fair market value of such Properties to the
fair market value of the total acquisition cost.

 

4.43.        Survival.  Borrower agrees that all of the
representations of Borrower set forth in this Agreement and in the other Loan
Documents shall survive for so long as any portion of the Indebtedness is
outstanding.  All representations,
covenants and agreements made by Borrower in this Agreement or in the other
Loan Documents shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.  On the date of any
Securitization, on not less than five Business Days’ prior written notice,
Borrower shall deliver to Lender a certification (x) confirming that all
of the representations contained in this Agreement are true and correct in all
material respects as of the date of such Securitization, or (y) otherwise
specifying any changes in or qualifications to such representations as of such
date as may be necessary to make such representations consistent in all
material respects with the facts as they exist on such date.  Except as expressly required by this
Agreement and the other Loan Documents, Borrower shall have no further
obligation to update

 

49

 

any representation or warranty nor shall any representation or warranty
be deemed to have been made on any date other than the Closing Date or as of
the date of any Securitization.

 

ARTICLE
V

 

AFFIRMATIVE COVENANTS

 

5.1.          Existence.  Each Borrower and, if applicable, each
Single-Purpose Equityholder shall do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its existence and all
rights, licenses, Permits, franchises and other agreements necessary for the
continued use and operation of its business. 
Each Borrower and, if applicable, each Single-Purpose Equityholder shall
deliver to Lender a copy of each amendment or other modification to any of its
organizational documents promptly after the execution thereof.

 

5.2.          Maintenance
of Properties.

 

(a)           Borrower or its
designee will keep each Property in good working order and repair, reasonable
wear and tear excepted.  Subject to Section 6.13
and the rights and obligations of Tenants under Leases, Borrower shall from
time to time make, or cause to be made, all reasonably necessary and desirable
repairs, renewals, replacements, betterments and improvements thereto.

 

(b)           Subject to the terms
of any applicable Leases, if and to the extent reasonably required by Lender,
Borrower shall remediate the Deferred Maintenance Conditions reasonably
promptly following the Closing Date, subject to Force Majeure, and upon request
from Lender after the expiration of such period shall deliver to Lender an
Officer’s Certificate confirming that such remediation has been substantially
completed and that all associated expenses then due and payable have been paid;
provided that Borrower shall be deemed to have satisfied its obligations
hereunder with respect to any matter that is the obligation of a Tenant under a
Lease if Borrower shall be using commercially reasonable efforts to cause such
Tenant to complete such matter pursuant to the terms of such Lease.

 

5.3.          Compliance with
Legal Requirements.  Borrower shall
comply with, and shall cause each Property to comply with and be operated,
maintained, repaired and improved in compliance in all material respects with,
all Legal Requirements, Insurance Requirements and all material contractual
obligations by which Borrower is legally bound.

 

5.4.          Impositions and Other Claims.  Each Borrower shall pay and discharge, or
cause to be paid and discharged, all taxes, assessments and governmental
charges levied upon it, its income and its assets and the Properties prior to
delinquency, as well as all lawful claims for labor, materials and supplies or
otherwise, subject to any rights to contest contained in the definition of
Permitted Encumbrances.   Each Borrower
shall file or cause to be filed all federal, state and local tax returns and
other reports that it or its subsidiaries are required by law to file.  If any law or regulation applicable to
Lender, any Note, any of the Properties or any of the Mortgages is enacted that
deducts from the value of property for the purpose of taxation any Lien
thereon, or imposes upon Lender the payment of the whole or any portion of the
taxes or

 

50

 

assessments or charges or Liens required by this Agreement to be paid
by Borrower, or changes in any way the laws or regulations relating to the
taxation of mortgages or security agreements or debts secured by mortgages or
security agreements or the interest of the mortgagee or secured party in the
property covered thereby, or the manner of collection of such taxes, so as to
affect any of the Mortgages, the Indebtedness or Lender, then Borrower, upon
demand by Lender, shall pay such taxes, assessments, charges or Liens, or
reimburse Lender for any amounts paid by Lender.  If in the opinion of Lender’s counsel it
might be unlawful to require Borrower to make such payment or the making of
such payment might result in the imposition of interest beyond the maximum
amount permitted by applicable Law, Lender may elect to declare all of the
Indebtedness to be due and payable 90 days from the giving of written notice by
Lender to Borrower.

 

5.5.          Access to
Properties.  Subject to the rights of
Tenants under Leases, Borrower shall permit agents, representatives and
employees of Lender and the Servicer to inspect the Properties or any portion
thereof, and/or the books and records of Borrower, at such reasonable times as
may be requested by Lender upon reasonable advance notice.

 

5.6.          Cooperate in
Legal Proceedings.  Except with
respect to any claim by Borrower against Lender, Borrower shall cooperate fully
with Lender with respect to any proceedings before any Governmental Authority
which may in any way affect the rights of Lender hereunder or under any of the
Loan Documents and, in connection therewith, Lender may, at its election,
participate or designate a representative to participate in any such
proceedings.

 

5.7.          Leases.

 

(a)           Upon Lender’s
request, Borrower shall furnish Lender with executed copies of all Leases,
together with a detailed breakdown of income and cost associated therewith to
the extent the same has been prepared by Borrower.  All new Leases and renewals or amendments of
Leases must be entered into on an arms-length basis with Tenants whose identity
and creditworthiness, in Borrower’s good faith judgment, is appropriate for
tenancy in property of comparable quality, must provide for rental rates and
other economic terms which, in Borrower’s good faith judgment, taken as a
whole, are at least equivalent to then-existing market rates, based on the
applicable market, and must contain terms and conditions that are commercially
reasonable (in each case, unless Lender consents to such Lease in its sole
discretion).  All new Leases must provide
that they are subject and subordinate to any current or future mortgage
financing on the applicable Property and that the Tenant agrees to attorn to
any foreclosing mortgagee at such mortgagee’s request, provided such mortgagee
agrees to not disturb such Tenant’s tenancy except in accordance with its
Lease.

 

(b)           All new Leases which
are Major Leases, and all terminations, renewals and material amendments of
Major Leases, and any surrender of rights under any Major Lease, shall be
subject to the prior written consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed. 
To facilitate Borrower’s leasing process, Borrower shall have the right
to present prospective leasing transactions to Lender for its approval prior to
the negotiation of a final Lease.  Such
presentation shall include a summary term sheet of all

 

51

 

material terms of the proposed Lease or a draft of the proposed Lease
together with any additional information concerning such proposed Lease and the
proposed Tenant thereunder as may be reasonably requested by Lender (the “Lease Term Sheet”).  Each request for approval of a Lease or a
Lease Term Sheet shall be submitted to Lender in an envelope marked “URGENT –
LENDER’S ATTENTION REQUIRED WITHIN 7 BUSINESS DAYS”, together with (i) a
copy of the proposed Lease or the Lease Term Sheet, (ii) a summary of the
economic terms thereof and any termination options contained therein together
with a detailed breakdown of income and costs associated with the proposed
Lease, and (iii) copies of all written materials obtained by the
applicable Borrower in connection with its evaluation of the creditworthiness
of the proposed Tenant, and shall be deemed approved if Lender shall not have
notified Borrower in writing of its disapproval thereof and the reasons for
such disapproval within three Business Days after Borrower shall have given
Lender written notice confirming that at least seven Business Days have elapsed
since such submission, which written notice shall be submitted to Lender in an
envelope marked “URGENT – SECOND AND FINAL NOTICE – LENDER’S ATTENTION REQUIRED
BY [DATE]”.  If Lender approves or is
deemed to have approved the Lease Term Sheet, Lender’s approval of the final
Lease shall be limited to Lender’s reasonable confirmation that the final Lease
does not (i) deviate in any material adverse respect from the terms set
forth on the Lease Term Sheet or contain any material adverse terms not set
forth in the Lease Term Sheet, or (ii) deviate in any material respect
from the approved Lease form (and otherwise such final Lease shall be subject
to Lender’s reasonable written approval). 
Borrower shall deliver to Lender a copy of any Lease executed pursuant
to a Lease Term Sheet together with an Officer’s Certificate indicating any
material deviations from such Lease Term Sheet.

 

(c)           Borrower shall (i) observe
and perform all the material obligations imposed upon the lessor under the
Leases; (ii) enforce, to the extent commercially reasonable,  all of the material terms, covenants and
conditions contained in the Leases on the part of the lessee thereunder to be
observed or performed, short of termination thereof, except that Borrower may
terminate any Lease following a material default thereunder by the respective
Tenant; (iii) not collect any of the rents thereunder more than one month
in advance; (iv) not execute any assignment of lessor’s interest in the
Leases or associated rents other than the assignments of rents and leases under
the Mortgages; and (v) not cancel or terminate any guarantee of any of the
Major Leases without the prior written consent of Lender.  Borrower shall deliver to each new Tenant a
Tenant Notice upon execution of such Tenant’s Lease or include same in such
Tenant’s Lease or invoices, and promptly thereafter deliver to Lender a copy
thereof and evidence of such Tenant’s receipt thereof.

 

(d)           To the extent
required by applicable law, security deposits of Tenants under all Leases,
whether held in cash or any other form, shall not be commingled with any other
funds of Borrower and, if cash shall be deposited by Borrower in an Eligible
Account or such other  account at such
commercial or savings bank as may be reasonably satisfactory to Lender, which
account (if any) is hereby pledged to Lender. 
Borrower shall, upon Lender’s request, provide Lender with evidence
reasonably satisfactory to Lender of Borrower’s compliance with the
foregoing.  During the continuance of any
Event of Default, Borrower shall, upon Lender’s request, deposit with Lender in
an Eligible Account pledged to Lender an amount equal to the aggregate security
deposits of the Tenants (and any interest theretofore earned on such security

 

52

 

deposits and actually received by Borrower) which Borrower had not
returned to the applicable Tenants or applied in accordance with the terms of
the applicable Lease.

 

(e)           Whenever a Lease is
terminated, whether by buy-out, cancellation, default or otherwise, and
Borrower is entitled to any payment, fee or penalty in respect of such
termination (a “Termination Fee”), Borrower shall promptly cause such
Termination Fee to be deposited into an Eligible Account pledged to
Lender.  Provided no Event of Default has
occurred and is continuing, (i) Lender shall disburse such Termination Fee
to Borrower at the written request of Borrower in respect of Leasing
Commissions and Tenant Improvement costs incurred by Borrower in connection
with replacement Leases at any Properties, other than any Property with an
Aggregate Allocated Loan Amount of zero, in each case provided such Lease is
entered into in accordance with the terms of this Agreement.

 

(f)            Within ten Business
Days after receipt of written request therefor, provided Lender has received a
copy of the executed corresponding Lease, Lender shall execute and deliver to
Borrower a subordination, non-disturbance and attornment agreement (an “SNDA”).  If the form of the SNDA shall be prescribed
by the Lease in question, and Lender shall have approved (or been deemed, in
accordance with Section 5.7(b) hereof,
to have approved) such Lease (and the form of SNDA was attached to the draft
Lease that was delivered to Lender as part of Borrower’s request for approval),
Lender shall execute and deliver the SNDA in the form prescribed by such
approved Lease.  Notwithstanding the
foregoing, in the case of any Lease as to which Lender’s approval is not
required pursuant to this Section 5.7
where such tenant thereunder requests an SNDA, the SNDA to be executed and
delivered by Lender shall be in substantially the form attached hereto as Exhibit G,
and such form shall also be attached to Borrower’s standard form of Lease as
approved by Lender.  Lender agrees to
reasonably negotiate the terms of the SNDA with any Tenant under any Lease, but
shall not be required to execute an SNDA that differs in any material respect
from the form attached hereto as Exhibit G.  All reasonable out-of-pocket attorneys’ fees
and disbursements incurred by Lender in connection with such SNDA shall be
payable by Borrower within ten Business Days after Lender’s written request
therefor, whether or not the SNDA is ultimately executed and/or recorded.

 

5.8.          Plan Assets, etc.  Each Borrower will do, or cause to be done,
all things necessary to ensure that it will not be deemed to hold Plan Assets
at any time.

 

5.9.          Further
Assurances.  Each Borrower shall, at
such Borrower’s sole cost and expense, from time to time as reasonably
requested by Lender, execute, acknowledge, record, register, file and/or
deliver to Lender such other instruments, agreements, certificates and
documents (including Uniform Commercial Code financing statements and amended
or replacement mortgages) as Lender may reasonably request to evidence,
confirm, perfect and maintain the Liens securing or intended to secure the
obligations of Borrower under the Loan Documents or to facilitate a replacement
of the Cash Management Bank pursuant to Section 3.1(c) or a
bifurcation of the Note pursuant to Sections 1.3(c) and/or 9.7(a),
in each case if requested by Lender, and do and execute all 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 request

 

53

 

from time to time.  Each Borrower
hereby authorizes and appoints Lender as its attorney-in-fact to execute,
acknowledge, record, register and/or file such instruments, agreements,
certificates and documents, and to do and execute such acts, conveyances and
assurances, should such Borrower fail to do so itself in violation of this
Agreement within 5 Business Days following written request from Lender, in each
case without the signature of such Borrower. 
The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term of this
Agreement.  Each Borrower hereby ratifies
all actions that such attorney shall lawfully take or cause to be taken in
accordance with this Section 5.9. 
Lender shall provide Borrower with copies on any instruments executed by
Lender in accordance with this Section 5.9.

 

5.10.        Management
of Properties.

 

(a)           Each Property, other
than a Property that is entirely subject to a Lease under which the Tenant is
responsible for the management of the Property and liable for all related costs
thereunder, shall be managed at all times by an Approved Property Manager pursuant
to an Approved Management Agreement. 
Pursuant to the Subordination of Property Management Agreement or
Agreements, each Approved Property Manager shall agree that its Approved
Management Agreement and all fees thereunder (including any incentive fees) are
subject and subordinate to the Indebtedness. 
Borrower may from time to time appoint an Approved Property Manager to
manage the applicable Property pursuant to an Approved Management Agreement,
and such successor manager shall execute for Lender’s benefit a Subordination
of Property Management Agreement in form and substance reasonably satisfactory
to Lender (and Lender hereby agrees that a Subordination of Property Management
Agreement in substantially the same form as the Subordination of Property
Management Agreement delivered to Lender by Borrower as of the date hereof is
deemed to be reasonably satisfactory to Lender).  The per annum fees of the Approved Property
Manager (including any incentive fees) shall not, at any time, exceed 3.5% of
the gross revenues of the relevant Property for the then most recently
concluded Test Period.

 

(b)           Borrower shall cause
each Approved Property Manager (including any successor Approved Property
Manager) to maintain at all times worker’s compensation insurance as required
by Governmental Authorities.

 

(c)           Borrower shall
notify Lender in writing of any material default of any Borrower or an Approved
Property Manager under any of the Approved Management Agreements, after the
expiration of any applicable cure periods, of which Borrower has actual
knowledge.  Lender shall have the right,
after reasonable notice to Borrower and in accordance with such Subordination
of Management Agreement, to cure defaults of Borrower under such Approved
Management Agreement.  Any reasonable
out-of-pocket expenses incurred by Lender to cure any such default shall
constitute a part of the Indebtedness and shall be due from Borrower upon
demand by Lender.

 

(d)           Upon the occurrence
and during the continuance of an Event of Default, or a material default by an
Approved Property Manager under an Approved Management Agreement after the
expiration of any applicable cure period, which default is reasonably likely

 

54

 

to result in a Material Adverse Effect, or upon the filing of a
bankruptcy petition or the occurrence of a similar event with respect to an
Approved Property Manager, Lender may, in its sole discretion, require Borrower
to terminate the Approved Management Agreement and engage an Approved Property
Manager selected by Lender to serve as replacement Approved Property Manager
pursuant to an Approved Management Agreement.

 

5.11.        Notice of Material
Event.  Borrower shall give Lender
prompt notice (containing reasonable detail) of (i) any material change in
the financial or physical condition of any of the Properties taken as a whole,
as reasonably determined by Borrower, including the termination or cancellation
of any Major Lease, the termination or cancellation of terrorism or other insurance
required by this Agreement, the exercise of shedding, contraction or
termination rights under any Lease which Lease covers in excess of 125,000
rentable square feet or the accrual of such rights by any Tenant under any
Lease which Lease covers in excess of 125,000 rentable square feet, (ii) any
litigation or governmental proceedings pending or threatened in writing against
any Borrower which is reasonably likely to have a Portfolio Material Adverse
Effect and (iii) any correspondence with Tenants under Major Leases with
respect to any alleged defaults by either party thereunder.

 

5.12.        Annual Financial
Statements.  As soon as available,
and in any event within 120 days after the close of each Fiscal Year, beginning
with the 2008 Fiscal Year, Borrower shall furnish to Lender, in an Excel
spreadsheet file in electronic format (which may be via an intralinks site at
Borrower’s sole cost and expense), or, in the case of predominantly text
documents, in Adobe pdf format, a balance sheet of Borrower and (except to the
extent stock in Sponsor is publicly traded on a major stock exchange) Sponsor
as of the end of such year, which statements with respect to Borrower shall be
on both a consolidated basis with respect to the Properties as a whole and an
individual Property basis with respect to the Properties, together with related
statements of income for such Fiscal Year, audited by an Approved Accounting
Firm whose opinion shall be to the effect that such financial statements have
been prepared in accordance with GAAP applied on a consistent basis and shall
not be qualified as to the scope of the audit or as to the status of Borrower
as a going concern.  Together with
Borrower’s annual financial statements, Borrower shall furnish to Lender, in
hard copy and electronic format:

 

(i)            then current rent roll and occupancy
reports of the Properties; and

 

(ii)           such other information as Lender
shall reasonably request, to the extent readily available to Borrower or
Sponsor without material cost or expense.

 

5.13.        Quarterly
Financial Statements.  As soon as
available, and in any event within 60 days after the end of each Fiscal Quarter
(including year-end), Borrower shall furnish to Lender, in an Excel spreadsheet
file in electronic format (which may be via an intralinks site at Borrower’s
sole cost and expense), or, in the case of predominantly text documents, in
Adobe .pdf format, quarterly and year-to-date unaudited financial statements
prepared for such fiscal quarter with respect to Borrower and (except to the
extent stock in Sponsor is publicly traded on a major stock exchange) Sponsor,
which statements with respect to Borrower shall be on both a consolidated basis
with respect to the Properties as a whole and an individual Property basis with
respect to the Properties, including a balance sheet and operating statement as
of the end of such

 

55

 

Fiscal Quarter, together with related statements of
income and cash flows for such Fiscal Quarter and for the portion of the Fiscal
Year ending with such Fiscal Quarter, which statements shall be accompanied by
an Officer’s Certificate certifying that the same are true and correct and were
prepared in accordance with GAAP applied on a consistent basis, subject to
changes resulting from audit and normal year-end audit adjustments.  Each such quarterly report shall be
accompanied by the following, in hard copy and electronic format:

 

(i)            a statement in
reasonable detail which calculates Net Operating Income for each of the Fiscal
Quarters in the Test Period ending in such Fiscal Quarter, in the case of each
such Fiscal Quarter, ending at the end thereof;

 

(ii)           copies of each of
the Major Leases signed during such quarter and each other Lease signed during
such quarter that is requested by Lender, and a summary of each material Lease
(and, to the extent prepared by Borrower or Approved Property Manager in the
ordinary course of business, each other Lease) signed during such quarter,
which shall include the Tenant’s name, lease term, base rent, Tenant
Improvements, leasing commissions paid, free rent and other material tenant
concessions;

 

(iii)          then current rent roll and occupancy
reports;

 

(iv)          a copy of AFRT’s business plan, to the
extent updated after the date hereof; and

 

(v)           such other information as Lender
shall reasonably request, to the extent readily available to Borrower or
Sponsor without material cost or expense.

 

5.14.        Monthly
Financial Statements.  If requested
by Lender or during an Event of Default 
(or, in the case of item (iv) below, at all times), Borrower shall
furnish within 30 days after the end of each calendar month (other than the
calendar month immediately following the final calendar month of any Fiscal
Year or Fiscal Quarter, in which case Borrower shall furnish same within the
respective time period specified in Section 5.12 or 5.13, as
applicable), in an Excel spreadsheet file in electronic format (which may be
via an intralinks site at Borrower’s sole cost and expense) or, in the case of
predominantly text documents, in Adobe .pdf format, monthly and year-to-date
unaudited financial statements prepared for the applicable month with respect
to Borrower, including a balance sheet and operating statement as of the end of
such month, together with related statements of income for such month and for
the portion of the Fiscal Year ending with such month, which statements shall
be accompanied by an Officer’s Certificate certifying that the same are true
and correct and were prepared in accordance with GAAP applied on a consistent
basis, subject to changes resulting from audit and normal year-end audit
adjustments.  Each such monthly report
shall be accompanied by the following:

 

(i)            beginning with the
calendar month ending June 30, 2008, a summary of material Leases (and, to
the extent prepared by Borrower or Approved Property Manager in the ordinary
course of business, each other Lease) signed during such month, which summary
shall include the Tenant’s name, lease term, base rent, escalations, Tenant
Improvements, leasing commissions paid, free rent and other concessions;

 

56

 

(ii)           then current rent roll and occupancy
reports; and

 

(iii)          such other information as Lender shall
reasonably request, to the extent readily available to Borrower or Sponsor
without material cost or expense.

 

57

 

5.15.        Insurance.

 

(a)           Borrower
shall obtain and maintain with respect to the Properties, for the mutual
benefit of Borrower and Lender at all times, the following policies of
insurance:

 

(i)            insurance
against loss or damage by standard perils included within the classification “All
Risks Special Form Cause of Loss” (including coverage for damage caused by
windstorm and hail).  Such insurance
shall (A) be in an aggregate amount equal to the full replacement cost of
the Properties and fixtures (without deduction for physical depreciation); (B) have
deductibles acceptable to Lender (but in any event not in excess of $50,000),
with the exception of flood coverage which may have a deductible no greater
than $500,000 and with the exception of wind and earthquake coverage which may
have a deductible no greater than 5% of the total insurable value of the
applicable Property; (C) be paid annually in advance; (D) contain a “Replacement
Cost Endorsement” and an “Agreed Upon Amount Endorsement” with a waiver of
coinsurance; (E) include an ordinance or law coverage endorsement
containing Coverage A: “Loss to the Undamaged Portion”, Coverage B: “Demolition
Cost” and Coverage C: “Increased Cost of Construction” coverages in such
amounts as Lender may reasonably require but in no event less than a
$50,000,000 blanket sublimit, unless a Property is insured separately, in which
case the sublimit applicable thereto shall not exceed 10% of the replacement
cost of such Property; (F) permit that the improvements and other property
covered by such insurance be rebuilt at another location in the event that such
improvements and other property cannot be rebuilt at the location on which they
are situated as of the date hereof.   If
such insurance excludes mold, then the Borrowers shall implement a mold
prevention program satisfactory to Lender;

 

(ii)           Flood
insurance if the Property is located in a “100 Year Flood Plain” or “special
hazard area” (including Zones A, B, C, V, X and Shaded X Areas) in an amount
equal to the maximum limit of coverage available from FEMA/FIA, plus such
excess limits requested by Lender to the extent available in the conventional
insurance marketplace, with a deductible not in excess of $500,000;

 

 (iii)         commercial general liability insurance,
including broad form coverage of property damage, blanket contractual liability
and personal injury (including death resulting therefrom), containing minimum
limits per occurrence of not less than $1,000,000 with not less than a
$2,000,000 general aggregate “per location” for any policy year.  In addition, at least $100,000,000 excess or
umbrella liability insurance,  unless a
Property is insured separately, in which case the limits applicable thereto
shall not be less than $25,000,000, on terms consistent with the commercial
general liability insurance policy required under this Section 5.15,
shall be obtained and maintained for any and all claims, including all legal
liability imposed upon Borrower and all related court costs and attorneys’ fees
and disbursements, in accordance with the policy form inclusive of contractual
liability;

 

(iv)          rental
loss and/or business interruption insurance covering the 18 month period
commencing on the date of any Casualty or Condemnation, and containing an
extended period of indemnity endorsement covering the 12 month period
commencing on the date on which the applicable Property has been restored, as
reasonably determined by the applicable 

 

58

 

insurer.  The amount of such insurance shall be
increased from time to time as and when the gross revenues from such Property
increase;

 

(v)           insurance
against loss or damage from explosion of steam boilers, air conditioning
equipment, high pressure piping, machinery and equipment, pressure vessels or
similar apparatus now or hereafter installed in any of the Improvements
(without exclusion for explosions) and insurance against loss of occupancy or
use arising from any breakdown, in such amounts as are generally available and
are generally required by institutional lenders for properties comparable to
the Properties;

 

(vi)          if
applicable, worker’s compensation insurance with respect to all employees of
Borrower as and to the extent required by any Governmental Authority or Legal
Requirement and employer’s liability coverage of at least $1,000,000;

 

(vii)         during
any period of repair, alteration or restoration, and only if and to the extent
the property and liability policies acquired by Borrower pursuant hereto do not
contain such coverage, (A) owner’s contingent or protective liability
insurance; and (B) the insurance required pursuant to Section 5.15(i) and
(iv) written on a socalled builder’s risk completed value form, which
coverage shall (1) be on a non-reporting form, (2) cover any
improvements under construction, being renovated or otherwise being altered,
including coverage for 100% of the total hard and reoccurring soft construction
costs following a casualty, (3) include permission to occupy the
applicable Property and  (4) be in
an amount equal to not less than the full insurable value of each of the
Properties against such risks (including fire and extended coverage and
collapse of the Improvements to agreed limits) as Lender may request, all of
which shall be in form and substance acceptable to Lender;

 

(viii)         [Intentionally Deleted]

 

(ix)           if
required by Lender, earthquake insurance (A) with minimum coverage
equivalent to the greater of  1.0x SUL
(scenario upper loss) and 1.5x SEL (scenario expected loss), (B) having a
deductible approved by Lender (but in any event not be in excess of 5% of the
total insurable value of such Property, unless such limit is not commercially
available in the insurance marketplace), and (C) if the Property is
legally nonconforming under applicable zoning ordinances and codes, containing
ordinance of law coverage in amounts reasonably acceptable to Lender;

 

(x)            so
long as the Terrorism Risk Insurance Program Reauthorization Act of 2007 (“TRIPRA”)
or a similar or subsequent statute is in effect, terrorism insurance for Certified
and Non-Certified acts (as such terms are defined in TRIPRA or similar or
subsequent statute) in an amount equal to the full replacement cost of the
Properties (plus twelve months of business interruption coverage).  If TRIPRA or a similar or subsequent statute
is not in effect, then provided that terrorism insurance is commercially
available, Borrower shall be required to carry terrorism insurance throughout
the term of the Loan as required by the preceding sentence, but in such event
Borrower shall not be required to spend on terrorism insurance coverage more
than 150% of the amount of the insurance premium that is payable at such time
in respect of the casualty and business interruption/rental loss insurance
required hereunder (without giving effect 

 

59

 

to the cost of terrorism
and earthquake components of such casualty and business interruption/rental
loss insurance); and

 

(xi)           such
other insurance as may from time to time be reasonably requested by Lender.

 

(b)           All
policies of insurance (the “Policies”) required pursuant to this Section 5.15
shall be issued by one or more primary insurers having a claims-paying ability
of at least “A” or “A2” by each of the Rating Agencies, or by a syndicate of insurers
through which at least 75% of the coverage (if there are 4 or fewer members of
the syndicate) or at least 60% of the coverage (if there are 5 or more members
of the syndicate) is with carriers having such claims-paying ability ratings
(provided that the first layers of coverage are from carriers rated at least “A”
or “A2” and all such carriers shall have claims-paying ability ratings of not
less than “BBB+”  or “Baa1”); provided,
however, that FM Global and Affiliated FM are hereby approved as providers of
the all-risk coverage required hereunder in amounts not exceeding the
respective amounts provided as of the date hereof, to the extent that each
maintains an AM Best and Fitch rating no lower than that in effect as of the
Closing Date.  Notwithstanding anything
to the contrary herein, except in connection with FM Global and Affiliated FM,
for purposes of determining whether the insurer ratings requirements set forth
above have been satisfied, (1) any insurer that is not rated by Fitch will
be regarded as having a Fitch rating that is the equivalent of the rating given
to such insurer by any of Moody’s and S&P that does rate such insurer (or,
if both such rating agencies rate such insurer, the lower of the two ratings),
and (2) any insurer that is not rated by Moody’s will be regarded as
having a Moody’s rating of “Baa1” or better if it is rated “A-” or better by
S&P and will be regarded as having a Moody’s rating of  “A2” or better if it is rated “A+” or better
by S&P.

 

(c)           All
Policies required pursuant to this Section 5.15:

 

(i)            shall be maintained throughout the
term of the Loan without cost to Lender;

 

(ii)           with respect to casualty policies,
shall contain a standard noncontributory mortgagee clause naming Lender and its
successors and assigns as first mortgagee and loss payee;

 

(iii)          with respect to liability policies,
shall name Lender and its successors and assigns as additional insureds;

 

(iv)          with respect to rental or business
interruption insurance policies, shall name Lender and its successors and/or
assigns as loss payee;

 

(v)           shall contain an endorsement
providing that neither Borrower nor Lender nor any other party shall be a
coinsurer under said Policies;

 

(vi)          shall contain an endorsement providing
that Lender shall receive at least 30 days’ prior written notice of any
modification, reduction or cancellation thereof;

 

60

 

(vii)         shall contain an endorsement providing
that no act or negligence of Borrower or of a Tenant or other occupant shall affect
the validity or enforceability of the insurance insofar as a mortgagee is
concerned;

 

(viii)        shall contain a waiver of subrogation
against Lender;

 

(ix)          shall contain an
endorsement providing that Lender shall not be liable for any insurance
premiums thereon or subject to any assessments thereunder;

 

(x)           shall contain
deductibles which, in addition to complying with any other requirements
expressly set forth in Section 5.15(a), are acceptable to Lender
and are no larger than is customary for similar policies covering similar
properties in the geographic market in which the applicable Property is
located;

 

(xi)          may be in the form
of a blanket policy, provided that Borrower shall provide evidence satisfactory
to Lender that the insurance premiums for the Properties are separately
allocated under such Policy to the Properties and that (i) payment of such
allocated amount shall maintain the effectiveness of such Policy as to the
Properties notwithstanding the failure of payment of any other portion of premiums,
and (ii) overall insurance limits will under no circumstance limit the
amount that will be paid in respect of the Properties, and provided further
that any such blanket policy shall contain an amendment setting forth that (A) the
aggregate limit under such policy shall apply separately to each property
covered thereunder, and (B) unless otherwise agreed to by Lender, the
limit of such policy shall be a “true blanket limit” and not limited by a
schedule of values for the Properties covered thereby.

 

(d)           Borrower
shall pay the premiums for all Policies as the same become due and
payable.  Copies of such Policies shall
be delivered to Lender promptly upon request. 
Not later than 30 days prior to the expiration date of each Policy,
Borrower shall deliver to Lender evidence, reasonably satisfactory to Lender,
of its renewal.

 

(e)           Borrower
shall not 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.  If at any time Lender is not in receipt of
written evidence that all Policies are in full force and effect when and as
required hereunder, Lender shall have the right to take such action as Lender deems
necessary to protect its interest in the Properties, including, without
limitation, the obtaining of such insurance coverage as Lender in its sole
discretion deems appropriate (but limited to the coverages and amounts required
hereunder).  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, and shall bear interest at the Default Rate.

 

(f)           Notwithstanding anything to the contrary
contained in this Section 5.15, (i) Lender hereby approves the
insurance program described on Exhibit E hereto and any renewal
thereof upon the same terms (subject to any increases in such coverage required
to reflect increased revenues and values), provided the insurers maintain their
current ratings as in effect 

 

61

 

on the Closing Date or
otherwise satisfy the requirements herein, and (ii) with respect to the
Properties subject to a Net Lease, to the extent Lender has received reasonably
satisfactory evidence of the insurance maintained by a Tenant under a Net
Lease, Borrower shall be deemed to have complied with the requirements of this Section 5.15
with respect to the Property subject to such Net Lease).  Promptly after the date hereof, Borrower
shall request and use commercially reasonable efforts to cause the Tenant under
each Net Lease to add Lender as an additional insured or loss payee (as
applicable) under such insurance, in each case if and to the extent permitted
thereunder.

 

5.16.        Casualty
and Condemnation.

 

(a)           Borrower shall give
prompt notice to Lender of any Casualty or Condemnation in excess of
$250,000.  Lender may (x) jointly
with Borrower settle and adjust any claims, (y) during the continuance of
an Event of Default, settle and adjust any claims without the consent or
cooperation of Borrower, or (z) allow Borrower to settle and adjust any
claims; except that if no Event of Default has occurred and is continuing,
Borrower may settle and adjust any claimnot in excess of $2,500,000 if such
settlement or adjustment is carried out in a competent and timely manner, but
Lender shall be entitled to collect and receive (as set forth below) any and
all Loss Proceeds.  The reasonable expenses
incurred by Lender in the adjustment and collection of Loss Proceeds shall
become part of the Indebtedness and shall be reimbursed by Borrower to Lender
within 10 Business Days of demand therefor.

 

(b)           All Loss Proceeds
shall be immediately deposited into the Loss Proceeds Account (monthly rental
loss/business interruption proceeds to be initially deposited into the Loss
Proceeds Account and subsequently deposited into the Cash Management Account in
installments as and when the lost rental income covered by such proceeds would
have been payable).  Following the
occurrence of a Casualty, Borrower, regardless of whether proceeds are
available, shall in a reasonably prompt manner proceed to restore, repair,
replace or rebuild the applicable Property to be of at least equal value and of
substantially the same character as prior to the Casualty, all in accordance
with the terms hereof applicable to Alterations (unless such Property has been
released in accordance herewith).  If, at
any Property, a Condemnation or Casualty occurs as to which, in the reasonable
judgment of Lender:

 

(i)            in the case of a Casualty, the cost
of restoration would not exceed 25% of the applicable Allocated Loan Amount and
the Casualty does not render untenantable, or result in the cancellation of
Leases covering, more than 25% of the gross rentable area of such Property, or
result in cancellation of Leases covering more than 25% of the base contractual
rental revenue of such Property;

 

(ii)           in the case of a Condemnation, the
Condemnation does not render untenantable, or result in the cancellation of
Leases covering, more than 15% of the gross rentable area of such Property;

 

(iii)          restoration of such Property is
reasonably expected to be completed prior to the expiration of rental interruption
insurance and at least six months prior to the Maturity Date; and

 

62

 

(iv)          after such restoration, the fair
market value of the restored Property is reasonably expected to equal at least
the fair market value of such Property immediately prior to such Condemnation
or Casualty (assuming the affected portion of such Property is relet);

 

or if Lender otherwise elects to allow Borrower to
restore such Property or if restoration of such Property is required under a
Major Lease or a Ground Lease, then, provided no Event of Default shall have
occurred and is continuing, the Loss Proceeds after receipt thereof by Lender
and reimbursement of any reasonable expenses incurred by Lender in connection
therewith shall be applied to the cost of restoring, repairing, replacing or
rebuilding such Property or part thereof subject to the Casualty or
Condemnation, in the manner set forth below (and Borrower shall commence as
promptly and diligently as reasonably practicable to prosecute such restoring,
repairing, replacing or rebuilding of such Properties in a workmanlike fashion
and in accordance with applicable law to a status at least equivalent to the
quality and character of such Properties immediately prior to the Condemnation
or Casualty or such other character and with such other alterations as is
reasonably consented to by Lender). 
Provided that no Event of Default shall have occurred and be then
continuing,  Lender shall disburse such
Loss Proceeds to Borrower upon Lender’s being furnished with (i) evidence
reasonably satisfactory to it of the estimated cost of completion of the
restoration, (ii) funds, or assurances reasonably satisfactory to Lender
that such funds are available and sufficient in addition to any remaining Loss
Proceeds, to complete the proposed restoration, and (iii) such architect’s
certificates, waivers of lien, contractor’s sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of cost, payment
and performance as Lender may reasonably request; and Lender may, in any event,
require that all plans and specifications for restoration reasonably estimated
by Lender to exceed $2,000,000 be submitted to and approved by Lender prior to
commencement of work (which approval shall not be unreasonably withheld).  If Lender reasonably estimates that the cost
to restore will exceed $2,000,000, Lender may retain a local construction
consultant to inspect such work and review Borrower’s request for payments and
Borrower shall, on demand by Lender, reimburse Lender for the reasonable fees
and expenses of such consultant (which fees and expenses shall constitute
Indebtedness).  No payment shall exceed
90% of the value of the work performed from time to time until such time as 50%
of the restoration (calculated based on the anticipated aggregate cost of the
work) has been completed, and amounts retained prior to completion of 50% of
the restoration shall not be paid prior to the final completion of the
restoration.  Funds other than Loss
Proceeds shall be disbursed prior to disbursement of such Loss Proceeds, and at
all times the undisbursed balance of such proceeds remaining in the Loss
Proceeds Account, together with any additional funds irrevocably and
unconditionally deposited therein or irrevocably and unconditionally committed
for that purpose, shall be at least sufficient in the reasonable judgment of
Lender to pay for the cost of completion of the restoration free and clear of
all Liens or claims for Lien.

 

 (c)          Borrower shall cooperate with Lender in obtaining for
Lender the benefits of any Loss Proceeds lawfully or equitably payable to
Lender in connection with the Properties. 
Lender shall be reimbursed for any expenses reasonably incurred in
connection therewith (including reasonable attorneys’ fees and disbursements,
and, if reasonably necessary to collect such proceeds, the expense of an
Appraisal on behalf of Lender) out of such Loss Proceeds or, if insufficient
for such purpose, by Borrower.

 

63

 

(d)           If Borrower is not
entitled to apply Loss Proceeds toward the restoration of a Property pursuant
to Section 5.16(b) and Lender elects not to permit such Loss
Proceeds to be so applied, such Loss Proceeds shall be applied on the first
Payment Date following such election to the prepayment of the Loan (without the
payment of any Prepayment Fee) and shall be accompanied by interest through the
end of the applicable Interest Accrual Period (calculated as if the amount
prepaid were outstanding for the entire Interest Accrual Period).  If the Note has been bifurcated into multiple
Note Components pursuant to Section 1.3(c), all prepayments of the
Loan made by Borrower in accordance with this Section 5.16(d) shall
be applied to the Note Components in ascending order of interest rate (i.e.,
first to the Note Component with the lowest Component Spread until its
outstanding principal balance has been reduced to zero, then to the Note
Component with the second lowest Component Spread until its outstanding
principal balance has been reduced to zero, and so on) or in such other order
as Lender shall determine.   The Release
Price for any Property for which Loss Proceeds are applied to repayment of the
Loan pursuant to this Section 5.16(d) shall be reduced by the amount
of such repayment.  If Loss Proceeds are
not made available to restore any Property and are applied to the prepayment of
the Loan, Borrower shall be entitled to obtain the release of the applicable
Property pursuant to Section 2.2, provided that (i) Borrower
shall not be obligated to satisfy the requirements of clauses (2) of Section 2.2(a) in
connection with such release, and (ii) the appropriate Release Price shall
be the Unaffiliated Release Price with respect thereto.

 

                                5.17.        Annual Budget.  At least 30 days prior to the commencement of
each Fiscal Year during the term of the Loan beginning with the 2008 Fiscal
Year, and at least 30 days after the commencement of any Event of Default,
Borrower shall deliver to Lender an Annual Budget for the Properties for the
ensuing Fiscal Year and, promptly after preparation thereof, any subsequent
revisions to the Annual Budget.  During
the continuance of any Event of Default, such Annual Budget and any such
revisions shall be subject to Lender’s approval (the Annual Budget, as so
approved, or if no Event of Default exists, the Annual Budget, the “Approved
Annual Budget”); provided, however, that Borrower shall not
amend any Annual Budget more than once in any 60-day period.  If Borrower submits an Annual Budget for
approval in good faith and such Annual Budget is not approved within 30 days,
then the prior year’s Approved Annual Budget will remain in effect, subject to
increases for non-discretionary items such as insurance premiums and Taxes and
increases in the Consumer Price Index for the applicable calendar year over the
previous calendar year for discretionary items.

 

5.18.        General
Indemnity.  (a)  Borrower shall indemnify, reimburse, defend and hold harmless Lender and
its officers, directors, employees and agents (collectively, the “Indemnified
Parties”) for, from and against any and all Damages of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Indemnified Parties, in any way relating to or arising out of the making or
holding or enforcement of the Loan by Lender or the administration of the
Transaction to the extent resulting, directly or indirectly, from any claim
(including any Environmental Claim) made (whether or not in connection with any
legal action, suit, or proceeding) by or on behalf of any Person; provided,
however, that no Indemnified Party shall have the right to be
indemnified hereunder for its own fraud, bad faith, gross negligence or willful
misconduct.  The provisions of and undertakings
and indemnification set forth in this Section 5.18 shall survive
the satisfaction and payment in full of the Indebtedness and termination of
this Agreement.

 

64

 

(b)           The
applicable Indemnified Party shall promptly notify Borrower in writing of any
action, judgment, suit, claim or demand with respect to which such Indemnified
Party seeks the benefit of Section 5.18(a) and provide
Borrower the opportunity to defend same, and if such Indemnified Party fails to
do so it shall lose the benefit of Section 5.18(a) if and to
the extent Borrower is prejudiced thereby. 
So long as Borrower is resisting and defending in a prudent and
commercially reasonable manner any action, judgment, suit, claim or demand that
gives rise to Damages (or same is being defended by Borrower’s insurer and
insurance is adequate for the reimbursement of such Damages), the Indemnified
Parties shall not be entitled to defend or settle same and claim the benefit of
Section 5.18(a) with respect thereto without the consent of
Borrower.  Notwithstanding the foregoing,
if the conditions set forth in the preceding sentence are not being satisfied
and Lender has provided Borrower with 30 days’ prior written notice, or shorter
period if mandated by the requirements of applicable law, and opportunity to
correct such determination, Lender may in good faith settle such action, suit
or proceeding and claim the benefit of this Section 5.18 with
respect thereto.

 

5.19.        Nonbinding
Consultation.  Lender shall have the right to consult
with and advise Borrower regarding significant business activities and business
and financial developments of Borrower, provided that any such advice or
consultation or the result thereof shall be completely nonbinding on Borrower.

 

5.20         Compliance with Encumbrances.  Each Borrower covenants and agrees as
follows:

 

(i)            Borrower shall comply with all
material terms, conditions and covenants of each material Permitted
Encumbrance, including any material reciprocal easement agreement, any
declaration of covenants, conditions and restrictions, and any condominium
arrangements.

 

(ii)           Borrower shall promptly deliver to
Lender a true and complete copy of each and every notice of default received by
Borrower with respect to any obligation of such Borrower under the provisions
of any such Permitted Encumbrance, in each case if the same would reasonably be
expected to have a Material Adverse Effect.

 

(iii)          Borrower shall deliver to Lender
copies of any written notices of event of default relating to any such
Permitted Encumbrance served by such Borrower, if the same would reasonably be
expected to have a Material Adverse Effect.

 

(iv)          After the occurrence of an Event of
Default, so long as the Loan is outstanding, Borrower shall not grant or
withhold any material consent, approval or waiver under any such Permitted
Encumbrance without the prior written consent of Lender.

 

(v)           Borrower shall deliver to each other
party to any such Permitted Encumbrance notice of the identity of Lender and
each assignee of Lender of which such Borrower has been notified in writing if
such notice is required in order to protect Lender’s interest thereunder.

 

65

 

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

6.1.          Liens on the
Properties.  No Borrower and, if
applicable, no Single-Purpose Equityholder shall permit or suffer the existence
of any Lien on any of its assets, other than Permitted Encumbrances.

 

6.2.          Ownership.  No Borrower shall own any assets other than
its Properties and related personal property and fixtures located therein or
used in connection therewith. 
Notwithstanding anything to the contrary contained herein, Borrower shall
be permitted to form one or more Permitted TRS Entities, at its sole cost and
expense, provided that the nature, extent and value of Lender’s collateral is
not thereby impaired and (1) after giving effect to any related Permitted
TRS Contribution Agreement, no Change of Control shall have occurred, (2) Lender
shall have received ten days’ advance written notice of the creation of a
Permitted TRS Entity and the execution of any Permitted TRS Contribution
Agreement together with a revised organizational chart showing the new
Permitted TRS Entity, (3) Lender shall be granted a security interest in
the assets of such Permitted TRS Entities pursuant to documents in form and
substance reasonably acceptable to Lender, (4) if reasonably requested by
Lender, Borrower shall deliver to Lender an updated nonconsolidation opinion
satisfactory to Lender and such other updated legal opinions, certifications
and evidence of compliance with this Agreement as Lender shall reasonably
require, (5) the establishment of such Permitted TRS Entities shall have
no adverse effect on Lender, (6) with respect to each Permitted TRS
Contribution Agreement, to the extent not already covered by the Loan
Documents, Borrower shall have caused the rights of both parties under such
agreement to be pledged to Lender as additional collateral for the Loan in a
manner reasonably satisfactory to Lender and (7) Borrower shall pay all
reasonable costs and expenses of Lender in connection with the foregoing.

 

6.3.          Transfer.  No Borrower shall Transfer any Collateral,
other than in compliance with Article II and other than the replacement or
other disposition of obsolete or non-useful personal property and fixtures in
the ordinary course of business, and Borrower shall not hereafter file a
declaration of condominium with respect to any of the Properties.

 

6.4.          Debt.  Borrower shall not have any Debt, other than
Permitted Debt.  equityholder of
Borrower, other than Sponsor and any direct or indirect equityholder of
Sponsor, shall have any debt, other than Permitted Debt.

 

6.5.          Dissolution; Merger
or Consolidation.  No Borrower nor,
if applicable, any Single-Purpose Equityholder shall dissolve, terminate,
liquidate, merge with or consolidate into another Person.

 

6.6.          Change in
Business.  No Borrower shall make any
material change in the scope or nature of its business objectives, purposes or
operations or undertake or participate in activities other than the continuance
of its present business.

 

66

 

6.7.          Debt Cancellation.  No Borrower shall cancel or otherwise forgive
or release any material claim or Debt owed to it by any Person, except for
adequate consideration or in the ordinary course of its business.

 

6.8.          Affiliate
Transactions.  No Borrower shall
enter into, or be a party to, any transaction with any Affiliate of Borrower,
except on terms which are no less favorable to such Borrower than would be
obtained in a comparable arm’s length transaction with an unrelated third
party.

 

6.9.          Misapplication of
Funds.  No Borrower shall (a) distribute
any Revenue or Loss Proceeds in violation of the provisions of this Agreement
(and shall promptly cause the reversal of any such distributions made in error
of which Borrower becomes aware), (b) fail to remit or cause to be
remitted amounts to the Cash Management Account as required by Section 3.1,
or (c) misappropriate any security deposit or portion thereof.

 

6.10.        Jurisdiction of
Formation.  No Borrower shall change
its jurisdiction of formation without receiving Lender’s prior written consent
and promptly providing Lender such information and replacement Uniform
Commercial Code financing statements and legal opinions as Lender may
reasonably request in connection therewith.

 

6.11.        Modifications and
Waivers.  Unless otherwise consented
to in writing by Lender:

 

(i)            No Borrower shall amend, modify,
terminate, renew, or surrender any rights or remedies under any Major Lease, or
enter into any Major Lease, except in compliance with Section 5.7;

 

(ii)           Except for changing
its registered agent and principal place of business (in each case, upon
advance written notice to Lender), no Borrower nor, if applicable, any
Single-Purpose Equityholder shall terminate, amend or modify its organizational
documents (including, without limitation, any operating agreement, limited
partnership agreement, by-laws, certificate of formation, certificate of
limited partnership or certificate of incorporation) in a manner which (x) could
reasonably be expected to affect its qualification as a Single-Purpose Entity
or (y) could reasonably be expected to result in a Material Adverse Effect; and

 

(iii)          No Borrower shall
terminate, materially amend or materially modify the Approved Management
Agreement without the consent of Lender not to be unreasonably withheld,
conditioned or delayed.

 

6.12.        ERISA.

 

(a)           No Borrower shall
maintain or contribute to, or agree to maintain or contribute to, or permit any
ERISA Affiliate of Borrower (except for Sponsor and any ERISA Affiliate that is
an equityholder in Sponor) to maintain or contribute to or agree to maintain or
contribute to, any employee benefit plan (as defined in Section 3(3) of
ERISA) subject to Title IV or Section 302 of ERISA or Section 412 of
the Code.

 

67

 

(b)           No Borrower shall
engage in a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975
of the Code, or substantially similar provisions under federal, state or local
laws, rules or regulations or in any transaction that would cause any
obligation or action taken or to be taken hereunder (or the exercise by Lender
of any of its rights under the Notes, this Agreement, the Mortgages or any
other Loan Document) to be a non-exempt prohibited transaction under such
provisions.

 

6.13.        Alterations
and Expansions.  During the
continuance of any Event of Default, no Borrower shall perform or contract to
perform any Capital Expenditures that are not consistent with the Approved
Annual Budget.  No Borrower shall perform
or contract to perform any Material Alteration without the prior written
consent of Lender, which consent (in the absence of an Event of Default) shall
not be unreasonably withheld, conditioned or delayed.  If Lender’s consent is requested hereunder
with respect to a Material Alteration, Lender may retain a construction
consultant to review such request and, if such request is granted, Lender may
retain a construction consultant to inspect the work from time to time.  Borrower shall, within 30 days of demand by
Lender, reimburse Lender for the reasonable fees and disbursements of such
consultant.

 

6.14.        Advances and
Investments.  No Borrower shall lend
money or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, any Person, except for
Permitted Investments, or issue any additional equity interests.   No Borrower shall make any capital
contribution to any Person that is not a Borrower.

 

6.15.        Single-Purpose
Entity.  No Borrower shall cease to
be a Single-Purpose Entity.

 

6.16.        Zoning and Uses.
  No Borrower shall do any of the
following with respect to any of the Properties without the prior written
consent of Lender (such consent not to be unreasonably withheld, delayed or
conditioned), except, as to clause (ii) below, to the extent the
same is commercially reasonable and not reasonably expected to have a Material
Adverse Effect:

 

(i)            initiate or support
any limiting change in the permitted uses of any of the Properties (or to the
extent applicable, zoning reclassification of any of the Properties) or any
portion thereof, seek any material variance under existing land use
restrictions, laws, rules or regulations (or, to the extent applicable,
zoning ordinances) applicable to a Property, or use or permit the use of a
Property in a manner that would result in the use of such Property becoming a
nonconforming use (other than a legal nonconforming use) in any material
respect under applicable land-use restrictions or zoning ordinances or that
would violate the terms of any Lease, Material Agreement or Legal Requirement
in any material respect;

 

(ii)           consent to any
modification, amendment or supplement to any of the terms of, or materially
default in its obligations under, any Permitted Encumbrance, to the extent the
same would result in a Material Adverse Effect;

 

68

 

(iii)          impose or consent
to the imposition of any restrictive covenants, easements or encumbrances upon
a Property in any manner that adversely affects in any material respect its
value, utility or transferability;

 

(iv)          execute or file any
subdivision plat affecting any of the Properties, or institute, or permit the
institution of, proceedings to alter any tax lot comprising any of the
Properties;

 

(v)           amend, modify,
surrender, terminate or waive any material rights or remedies under, or enter
into, or default (beyond applicable grace, cure or notice periods) in its
material obligations under, any Material Agreement in any manner that might
diminish (x) the value of the applicable Property or Properties or (y) the
rights of any Borrower or Lender thereunder;

 

(vi)          amend, modify,
surrender, terminate (or allow to terminate, including by failure to exercise
an extension option) or waive any material rights or remedies under, or enter
into, or default (beyond applicable grace, cure or notice periods) in its
material obligations under, any Ground Lease in any manner that might diminish (x) the
value of the applicable Property or Properties or (y) the rights of any
Borrower or Property Owner or Lender thereunder; or

 

(vii)         permit or consent to
any of  the Properties being used by the
public or any Person in such manner as might make possible a claim of adverse
usage or possession or of any implied dedication or easement.

 

6.17.        Waste.  No Borrower shall commit or permit any Waste
on any of the Properties, nor take any actions that might invalidate any
insurance carried on any of the Properties (and Borrower shall promptly correct
any such actions of which Borrower becomes aware).

 

ARTICLE
VII

 

DEFAULTS

 

7.1.          Event of Default.  The occurrence of any one or more of the
following events shall be, and shall constitute the commencement of, an “Event
of Default” hereunder:

 

(a)           Payment.

 

(i)            Borrower shall default in the
payment when due of any principal or interest owing hereunder or under the
Notes (including any mandatory prepayment required hereunder); or

 

(ii)           Borrower shall default, and such
default shall continue for at least five Business Days after written notice to
Borrower that such amounts are owing, in the payment when due of fees, expenses
or other amounts owing hereunder, under the Notes or under any of the other
Loan Documents (other than principal and interest owing hereunder or under the
Note).

 

69

 

(b)           Representations.  Any representation made by Borrower or
Sponsor in any of the Loan Documents, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Lender shall
have been false or misleading in any material respect (or, with respect to any
representation which itself contains a materiality qualifier, in any respect)
as of the date such representation was made, which failure, if capable of being
cured or remedied, has not been cured or remedied within 15 days after written
notice to Borrower of such failure.

 

(c)           Other Loan
Documents.  Any Loan Document shall
fail to be in full force and effect or to convey the material Liens, rights,
powers and privileges purported to be created thereby; or a default shall occur
under any of the other Loan Documents or any of the Ground Leases (to the
extent such default would entitle the lessor thereunder to terminate the Ground
Lease), in each case beyond the expiration of any applicable cure period
(provided that if a default occurs under a Loan Document and no cure period is
provided therein, and such Loan Document does not characterize such default as
an “Event of Default”, then clause (k) hereof shall apply).

 

(d)           Bankruptcy,
etc.

 

(i)            Any Borrower or, if applicable, any
Single-Purpose Equityholder shall commence a voluntary case concerning itself
under Title 11 of the United States Code (as amended, modified, succeeded or
replaced, from time to time, the “Bankruptcy Code”);

 

(ii)           Any Borrower or, if applicable, any Single-Purpose
Equityholder shall commence any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of creditors, dissolution, insolvency
or similar law of any jurisdiction whether now or hereafter in effect relating
to such Borrower or Single-Purpose Equityholder, or shall dissolve or otherwise
cease to exist;

 

(iii)          there is commenced against any
Borrower or, if applicable, any Single-Purpose Equityholder an involuntary case
under the Bankruptcy Code, or any such other proceeding, which remains
undismissed for a period of 60 days after commencement;

 

(iv)          Any Borrower or, if applicable, any
Single-Purpose Equityholder is adjudicated insolvent or bankrupt;

 

(v)           Any Borrower or, if applicable, any
Single-Purpose Equityholder suffers appointment of any custodian or the like
for it or for any substantial portion of its property and such appointment
continues unchanged or unstayed for a period of 60 days after commencement of
such appointment;

 

(vi)          Any Borrower or, if applicable, any
Single-Purpose Equityholder makes a general assignment for the benefit of
creditors; or

 

(vii)         any action is taken by any  Borrower or, if applicable, any
Single-Purpose Equityholder for the purpose of effecting any of the foregoing.

 

70

 

(e)           Change
of Control.

 

(i)            A
Change of Control shall occur; or

 

(ii)           any party shall
acquire more than 49% of the direct or indirect equity interest in Borrower or
a Single-Purpose Equityholder (even if not constituting a Change of Control),
other than a direct or indirect equity interest in Sponsor, and Borrower shall
fail to deliver to Lender with respect to such new equityholder a new
non-consolidation opinion satisfactory to (A) prior to the occurrence of
any Securitization of the Loan, Lender in its reasonable discretion, and (B) at
any time following any Securitization or series of Securitizations of the Loan,
each of the Rating Agencies rating such Securitization or Securitizations.

 

(f)            Equity Pledge;
Preferred Equity.  Any direct or
indirect equity interest in or right to distributions from any Borrower shall
be subject to a Lien in favor of any Person, or any such party or any holder of
a direct or indirect interest in any such party shall issue preferred equity (or
debt granting the holder thereof rights substantially similar to those
generally associated with preferred equity);
except that the following shall be permitted:

 

(i)            any pledge of direct and indirect equity
interests in and rights to distributions from Sponsor;

 

(ii)           the issuance of
preferred equity interests in Sponsor;

 

(iii)          the pledges in
favor of Lender created by the Loan Documents; and

 

(iv)          the pledges of
direct and indirect equity interests in Borrower securing the Mezzanine Loan.

 

 (g)          Insurance. 
Borrower shall fail to maintain in full force and effect or cause to be
maintained in full force and effect all Policies required hereunder.

 

(h)           ERISA; Negative
Covenants.  A default shall occur in
the due performance or observance by any Borrower of any term, covenant or
agreement contained in Section 5.8 or in Article VI;
provided that if such default is susceptible of being cured, such default shall
not constitute an Event of Default unless and until it shall remain uncured for
10 days after Borrower receives written notice thereof, for a default which can
be cured by the payment of money, or for 30 days after Borrower receives
written notice thereof, for a default which cannot be cured by the payment of
money; or any ERISA Event with respect to a Plan shall have occurred and the
same shall have a Material Adverse Effect.

 

(i)            Cross Default.  A Mezzanine Loan Event of Default shall have
occurred.

 

(j)            Other Covenants.  A default shall occur in the due performance
or observance by any Borrower of any term, covenant or agreement (other than
those referred to in subsections (a) through (i), inclusive,
of this Section 7.1) contained in this Agreement or in any of the
other Loan Documents, except that if such default referred to in this subsection
(j) is 

 

71

 

susceptible of being cured, such default shall not
constitute an Event of Default unless and until it shall remain uncured for 10
days after Borrower receives written notice thereof, for a default which can be
cured by the payment of money, or for 30 days after Borrower receives written
notice thereof, for a default which cannot be cured by the payment of money;
and if a default cannot be cured by the payment of money but is susceptible of
being cured and cannot reasonably be cured within such 30-day period, and
Borrower commences to cure such default within such 30-day period and
thereafter diligently and expeditiously proceeds to cure the same, Borrower
shall have such additional time as is reasonably necessary to effect such cure,
but in no event in excess of 120 days from the original notice.

 

7.2.          Remedies.

 

(a)           During
the continuance of an Event of Default, Lender may by written notice to
Borrower, in addition to any other rights or remedies available pursuant to
this Agreement, the Notes, the Mortgages and the other Loan Documents, at law
or in equity, declare by written notice to Borrower all or any portion of the
Indebtedness to be immediately due and payable, whereupon all or such portion
of the Indebtedness shall so become 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 Properties (including all rights or remedies available
at law or in equity); provided, however, that, notwithstanding
the foregoing, if an Event of Default specified in paragraph 7.1(d) shall
occur, then the Indebtedness shall immediately become due and payable without
the giving of any notice or other action by Lender.  Any 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 in this Agreement
or in the other Loan Documents.

 

(b)           If Lender forecloses
on any of the Properties, Lender shall apply all net proceeds of such
foreclosure to repay the Indebtedness, the Indebtedness shall be reduced to the
extent of such net proceeds and the remaining portion of the Indebtedness shall
remain outstanding and secured by the Properties and the other Loan Documents,
it being understood and agreed by Borrower that Borrower is liable for the
repayment of all the Indebtedness; provided, however, that at the
election of Lender, the Notes shall be deemed to have been accelerated only to
the extent of the net proceeds actually received by Lender with respect to the
Properties and applied in reduction of the Indebtedness.

 

(c)           During the
continuance of any Event of Default (including an Event of Default resulting
from a failure to satisfy the insurance requirements specified herein), 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, take any
action to cure such Event of Default. 
Lender may enter upon any or all of the Properties upon reasonable
notice to Borrower for such purposes or appear in, defend, or bring any action
or proceeding to protect its interest in the Properties or to foreclose the
Mortgages or collect the Indebtedness. 
The costs and expenses incurred by Lender in exercising rights under
this paragraph (including reasonable attorneys’ fees), with interest at the
Default Rate for the period after notice from Lender that such costs or

 

72

 

expenses were incurred to the date of payment to
Lender, shall constitute a portion of the Indebtedness, shall be secured by the
Mortgages and other Loan Documents and shall be due and payable to Lender upon
demand therefor.

 

(d)           Interest shall
accrue on any judgment obtained by Lender in connection with its enforcement of
the Loan at a rate of interest equal to the Default Rate.

 

7.3.          No Waiver.  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
by Lender to be expedient.  A waiver of
any Default or Event of Default shall not be construed to be a waiver of any
subsequent Default or Event of Default or to impair any remedy, right or power
consequent thereon.

 

7.4.          Application of
Payments after an Event of Default. Notwithstanding anything to the
contrary contained herein, during the continuance of an Event of Default, all
amounts received by Lender in respect of the Loan shall be applied at Lender’s
sole discretion either toward the components of the Indebtedness (e.g.,
Lender’s expenses in enforcing the Loan, interest, principal and other amounts
payable hereunder), and the Note Components in such sequence as Lender shall
elect in its sole discretion, or toward the payment of Property expenses.

 

ARTICLE
VIII

 

CONDITIONS PRECEDENT

 

8.1.          Conditions
Precedent to Closing.  This Agreement
shall become effective on the date that all of the following conditions shall
have been satisfied (or waived by Lender), it being agreed that Lender’s
funding of the Loan shall constitute Lender’s agreement that such conditions
have been satisfied or waived unless the parties shall otherwise have agreed in
writing:

 

(a)           Loan
Documents.  Lender shall have
received a duly executed copy of each Loan Document.  Each Loan Document which is to be recorded in
the public records shall be in form suitable for recording.

 

(b)           Collateral
Accounts.  Each of the Collateral
Accounts shall have been established with the Cash Management Bank and funded
to the extent required under Article III.

 

(c)           Opinions
of Counsel. Lender shall have received legal opinions reasonably
satisfactory to Lender.

 

(d)           Organizational
Documents.  Lender shall have
received all documents reasonably requested by Lender relating to the existence
of each Borrower, the validity of the Loan Documents and other matters relating
thereto, in form and substance satisfactory to Lender, including:

 

73

 

 

(i)            Authorizing
Resolutions.  A certified copy of the
resolutions approving and adopting the Loan Documents to be executed by
Borrower and authorizing the execution and delivery thereof.

 

(ii)           Organizational
Documents.  Certified copies of the
organizational documents of each Borrower and, if applicable, any
Single-Purpose Equityholder (including any certificate of formation,
certificate of limited partnership, certificate of incorporation, operating
agreement, limited partnership agreement or by-laws), in each case together
with all amendments thereto.

 

(iii)          Certificates of
Good Standing or Existence. 
Certificates of good standing or existence for each Borrower and, if
applicable, any Single-Purpose Equityholder issued as of a recent date by its
state of organization and by each state in which one of the Properties is
located.

 

(e)           Lease; Material Agreements.  Lender shall have received, with respect to
each Property (i) true and complete copies of all Material Agreements,
Leases, Ground Leases, recorded reciprocal easement agreements (and similar
documents) and (ii) all rent rolls and material contracts to the extent
available to Borrower without material cost or expense.

 

(f)            Lien
Search Reports.  Lender shall have
received satisfactory reports of Uniform Commercial Code, tax lien, bankruptcy
and judgment searches conducted by a search firm acceptable to Lender with
respect to the Properties and each Borrower (including each Borrower’s
immediate predecessor, if any, and to the extent reasonably required, subsidiaries
of each Borrower), such searches to be conducted in such locations as Lender
shall have requested.

 

(g)           Material
Litigation.  Lender shall have
received a schedule of all material outstanding litigation that is not fully
covered by insurance.

 

(h)           No
Default or Event of Default.  No
Default or Event of Default shall have occurred and be continuing on such date
either before or after the execution and delivery of this Agreement.

 

(i)            No
Injunction.  No Legal Requirement
shall exist, and no litigation shall be pending or threatened, which in the
good faith judgment of Lender would enjoin, prohibit or restrain, or impose or
result in the imposition of any material adverse condition upon, the making or
repayment of the Loan or the consummation of the Transaction.

 

(j)            Representations.  The representations in this Agreement and in
the other Loan Documents shall be true and correct in all respects on and as of
the Closing Date with the same effect as if made on such date.

 

(k)           Estoppel
Letters.  To the extent obtained by
Borrower through the exercise of reasonably diligent efforts, Borrower shall
have delivered to Lender estoppel certificates from each Tenant under a Lease
and each lessor under a Ground Lease, in each case, which has been identified by
Lender prior to the date hereof, each of which shall specify that Lender and
its 

 

74

 

successors and assigns
may rely thereon and otherwise be  in
such form and substance as shall be satisfactory to Lender.

 

(l)            Merger
Agreement.  Lender shall have
received a complete copy of the executed Merger Agreement (including all
exhibits thereto) and each amendment thereto and all other related agreements.

 

(m)          No
Material Adverse Effect.  No event or
series of events shall have occurred which Lender reasonably believes has had
or is reasonably likely to have a Portfolio Material Adverse Effect.

 

(n)           Transaction
Costs.  Borrower shall have paid all
transaction costs (or provided for the direct payment of such transaction costs
by Lender from the proceeds of the Loan).

 

(o)           Insurance.  Lender shall have received certificates of
insurance on ACORD Form 28, demonstrating insurance coverage in respect of
the Properties of types, in amounts, with insurers and otherwise in compliance
with the terms, provisions and conditions set forth in this Agreement.  Such certificates shall indicate that Lender
and its successors and assigns are named as additional insured on each
liability policy, and that each casualty policy and rental interruption policy
contains a loss payee and mortgagee endorsement in favor of Lender, its
successors and assigns.

 

(p)           Title.  Lender shall have received a marked, signed
commitment to issue, or a pro-forma version of, a Qualified Title Insurance Policy
in respect of each Encumbered Property, listing only usual and customary
permitted exceptions and such other exceptions reasonably approved by Lender.

 

(q)           Zoning.  Lender shall have received zoning reports
with respect to (x) each Encumbered Property, and (y) each other
Property that Lender reasonably determines necessary in order to syndicate the
Loan, satisfy regulatory requirements, resolve any material issues arising from
Lender’s due diligence, and/or pledge the Loan in connection with a repurchase
or similar facility.

 

(r)            Permits;
Certificate of Occupancy.  Lender
shall have received a copy of all Permits necessary for the use and operation
of each Property and the certificate(s) of occupancy, if required, for
each Property, all of which shall be in form and substance reasonably
satisfactory to Lender.

 

(s)           Engineering
Report, Environmental Report and Appraisals.  Lender shall have received existing
appraisals, Environmental Reports and engineering/seismic reports for each of
the Properties, and shall have received updates thereof with respect to (x) each
Encumbered Property, and (y) each other Property that Lender reasonably
determines necessary in order to syndicate the Loan, satisfy regulatory
requirements, resolve any material issues arising from Lender’s due diligence,
and/or pledge the Loan in connection with a repurchase or 

 

75

 

similar facility. 
Providers of such reports shall be reasonably approved by Lender.  Each new appraisal shall conform to USPAP and
FIRREA guidelines.

 

(t)            Qualified
Survey.  Lender shall have received a
Qualified Survey with respect to (x) each Encumbered Property, and (y) each
other Property that Lender reasonably determines necessary in order to
syndicate the Loan, satisfy regulatory requirements, resolve any material
issues arising from Lender’s due diligence, and/or pledge the Loan in
connection with a repurchase or similar facility, which includes, without
limitation, all such items as may be reasonably required by Lender, together
with a certification from a surveyor and legal description for each Property
reasonably acceptable to Lender.

 

(u)           Consents,
Licenses, Approvals, etc.  Lender
shall have received copies of all consents, licenses and approvals, if any,
required in connection with the execution, delivery and performance by
Borrower, and the validity and enforceability, of the Loan Documents, and such
consents, licenses and approvals shall be in full force and effect.

 

(v)           Financial
Information.  Lender shall have
received (i) financial information relating to the Sponsor, Borrower and
the Properties which is satisfactory to Lender, including current operating
statements and historical operating statements for the past three years, to the
extent available to Borrower without material cost or expense and (ii) a
certified closing date balance sheet for Borrower and Sponsor.

 

(w)          Annual
Budget.  Lender shall have received
the 2008 Annual Budget with respect to the Properties.

 

(x)           Closing
Statement.  Lender shall have
received a reasonably detailed closing statement indicating all sources and
uses of funds.

 

(y)           Additional
Matters.  Lender shall have received
such other certificates, opinions, documents and instruments relating to the
Loan as may have been reasonably requested by Lender.  All corporate and other proceedings, all
other documents (including all documents referred to in this Agreement and not
appearing as exhibits to this Agreement) and all legal matters in connection
with the Loan shall be reasonably satisfactory in form and substance to Lender.

 

ARTICLE
IX

 

MISCELLANEOUS

 

9.1.          Successors.  Except as otherwise provided in this
Agreement, whenever in this Agreement any of the parties to this Agreement is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party.  All
covenants, promises and agreements in this Agreement contained, by or on behalf
of Borrower, shall inure to the benefit of Lender and its successors and assigns.

 

76

 

9.2.          GOVERNING
LAW.

 

(A)          THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

 (B)          ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER,
BORROWER OR THE SPONSOR ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS (OTHER THAN ANY ACTION IN RESPECT OF THE CREATION,
PERFECTION OR ENFORCEMENT OF A LIEN OR SECURITY INTEREST CREATED PURSUANT TO
ANY LOAN DOCUMENTS NOT GOVERNED BY THE LAWS OF THE STATE OF NEW YORK) MAY BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK.  LENDER, BORROWER AND THE SPONSOR HEREBY (i) IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH
THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (ii) IRREVOCABLY
SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING, AND (iii) IRREVOCABLY CONSENT 
TO SERVICE OF PROCESS BY MAIL, PERSONAL SERVICE OR IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW, AT THE ADDRESS SPECIFIED IN SECTION 9.4.

 

9.3.          Modification,
Waiver in Writing.  Neither this
Agreement nor any other Loan Document may be amended, changed, waived,
discharged or terminated, nor shall any consent or approval of Lender be
granted hereunder, unless such amendment, change, waiver, discharge,
termination, consent or approval is in writing signed by Lender.

 

9.4.          Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing by expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of delivery or attempted delivery, addressed
as follows (or at such other address and person as shall be designated from
time to time by any party to this Agreement, as the case may be, in a written
notice to the other parties to this Agreement in the manner provided for in
this Section).  ANY NOTICE OF DEFAULT
UNDER ARTICLE VII OR ANY SIMILAR PROVISION OF ANY OF THE OTHER LOAN DOCUMENTS
MUST PROVIDE, IN ORDER TO BE EFFECTIVE AS A NOTICE THEREUNDER, THAT IT IS BEING
GIVEN AS A NOTICE OF DEFAULT WHICH IF NOT CURED WITHIN THE GRACE PERIOD
CONTAINED IN THE LOAN DOCUMENTS WILL RESULT IN AN EVENT OF DEFAULT.  A notice shall be deemed to have been given
when delivered or upon refusal to accept delivery.

 

77

 

	
  If to Lender:

  	
   

  
	
   

  	
   

  
	
  Goldman
  Sachs Commercial Mortgage Capital, L.P.

  	
   

  
	
  6011
  Connection Drive,
  Suite 550

  	
   

  
	
  Irving,
  Texas 75039

  	
   

  
	
  Attention:
   Michael Forbes

  	
   

  
	
   

  	
   

  
	
  with copy to:

  	
   

  
	
   

  	
   

  
	
  Goldman Sachs Mortgage
  Company

  	
   

  
	
  85 Broad Street, 11th
  Floor

  	
   

  
	
  New York, New York
  10004

  	
   

  
	
  Attention:  Daniel Ottensoser and Leo Huang

  	
   

  
	
   

  	
   

  
	
  with copy to

  	
   

  
	
   

  	
   

  
	
  Cleary Gottlieb
  Steen & Hamilton LLP

  	
   

  
	
  One Liberty Plaza

  	
   

  
	
  New York, New York
  10006

  	
   

  
	
  Attention: Michael
  Weinberger, Esq.

  	
   

  
	
   

  	
   

  
	
  and

  	
   

  
	
   

  	
   

  
	
  Citicorp
  North America, Inc.

  	
   

  
	
  388
  Greenwich Street

  	
   

  
	
  New
  York, New York 10013

  	
   

  
	
  Attention:    Mr. David Bouton

  	
   

  
	
   

  	
   

  
	
  with
  copy to

  	
   

  
	
   

  	
   

  
	
  Weil,
  Gotshal & Manges LLP

  	
   

  
	
  767
  Fifth Avenue

  	
   

  
	
  New
  York, New York 10153

  	
   

  
	
  Attention:
   Samuel M. Zylberberg, Esq. (EG)

  	
   

  
	
   

  	
   

  
	
  If to Borrower:

  	
   

  
	
   

  	
   

  
	
  c/o
  American Financial Realty Trust

  	
   

  
	
  c/o
  Gramercy Capital Corp.

  	
   

  
	
  420
  Lexington Avenue, 19th Floor

  	
   

  
	
  New
  York, New York 10170

  	
   

  
	
  Attention:
   Marc Holliday

  	
   

  
	
   

  	
   

  
	
  with
  copies to:

  	
   

  
	
   

  	
   

  
	
  c/o
  American Financial Realty Trust

  	
   

  
	
  c/o
  Gramercy Capital Corp.

  	
   

  

 

78

 

	
  420
  Lexington Avenue, 19th Floor

  	
   

  
	
  New
  York, New York 10170

  	
   

  
	
  Attention:
   Office of the General Counsel

  	
   

  
	
   

  	
   

  
	
  Fried, Frank, Harris,
  Shriver & Jacobson LLP

  	
   

  
	
  One New York Plaza

  	
   

  
	
  New York, NY 10004-1980

  	
   

  
	
  Attention:  Jonathan L. Mechanic, Esq.

  	
   

  

 

9.5.          TRIAL BY JURY.  LENDER, BORROWER AND THE SPONSOR, TO THE
FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY AGREE NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. 
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY
BY LENDER, BORROWER AND THE SPONSOR 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 OF LENDER,
BORROWER AND SPONSOR IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN
ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY LENDER, BORROWER AND
THE SPONSOR, AS THE CASE MAY BE.

 

9.6.          Headings.  The Article and Section headings in
this Agreement are included in this Agreement for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.

 

9.7.          Assignment and
Participation.

 

(a)           Except as explicitly
set forth in Sections 2.1 and 2.2, Borrower may not sell, assign
or transfer any interest in the Loan Documents or any portion thereof (including
Borrower’s rights, title, interests, remedies, powers and duties hereunder and
thereunder).

 

(b)           Lender and each
assignee of all or a portion of the Loan shall have the right from time to time
in its discretion to sell one or more of the Notes or any interest therein (an “Assignment”)
and/or sell a participation interest in one or more of the Notes (a “Participation”).  Borrower agrees reasonably to cooperate with
Lender, at Lender’s request, in order to effectuate any such Assignment or
Participation.  In the case of an
Assignment, (i) each assignee shall have, to the extent of such
Assignment, the rights, benefits and obligations of the assigning Lender as a “Lender”
hereunder and under the other Loan Documents, (ii) the assigning Lender
shall, to the extent that rights and obligations hereunder have been assigned
by it pursuant to an Assignment, relinquish its rights and be released from its
obligations under this Agreement, and (iii) one Lender shall at all times
serve as agent for all Lenders and shall be the sole Lender to whom notices,
requests and other communications shall be addressed and the sole party
authorized to grant or withhold consents hereunder on behalf of the Lenders
(subject, in each 

 

79

 

case, to appointment of a Servicer, pursuant to Section 9.22,
to receive such notices, requests and other communications and/or to grant or
withhold consents or waivers or give notices, as the case may be) and to be the
sole Lender to designate the account to which payments shall be made by
Borrower to the Lenders hereunder (and Borrower may fully rely thereon,
notwithstanding any contrary notice from any other Lender), and (iv) any
assigning Lender that no longer holds any portion of the Loan shall deliver any
Collateral held by it as Lender to the other Lenders or their custodian and, if
reasonably requested by Borrower, shall deliver notices (prepared by Borrower
and reasonably satisfactory to such assigning Lender) to Tenants and/or the
Cash Management Bank confirming such assignment.  Goldman
Sachs Mortgage Company or, upon the appointment of a Servicer, such Servicer,
shall maintain, or cause to be maintained, as agent for Borrower, a register on
which it shall enter the name or names of the registered owner or owners from
time to time of the Notes.  Borrower
agrees that upon effectiveness of any Assignment of any Note in part, Borrower
will promptly provide to the assignor and the assignee separate promissory
notes in the amount of their respective interests (but, if applicable, with a
notation thereon that it is given in substitution for and replacement of an
original Note or any replacement thereof), and otherwise in the form of such
Note (and with such other changes as may be reasonably required to reflect that
such Note evidences only a portion of the Loan and the provisions of clause (iii) above),
upon return of the Note then being replaced. The assigning Lender shall notify
in writing each of the other Lenders of any Assignment.  Each potential or actual assignee,
participant or investor in a Securitization, and each Rating Agency, shall be
entitled to receive all information received by Lender under this
Agreement.  After the effectiveness of
any Assignment, the party conveying the Assignment shall provide notice to
Borrower and each Lender of the identity and address of the assignee and the
amount so assigned.  Notwithstanding
anything in this Agreement to the contrary, after an Assignment, the assigning
Lender (in addition to the assignee) shall continue to have the benefits of any
indemnifications contained in this Agreement which such assigning Lender had
prior to such assignment with respect to matters occurring prior to the date of
such assignment.

 

(c)           If, pursuant to this
Section 9.7, any interest in this Agreement or any Note is
transferred to any transferee that is not a U.S. Person, the transferor Lender
shall cause such transferee, concurrently with the effectiveness of such
transfer, (i) to furnish to the transferor Lender either Form W-8BEN
or Form W-8ECI or any other form in order to establish an exemption from,
or reduction in the rate of, U.S. withholding tax on all interest payments
hereunder, and (ii) to agree (for the benefit of Lender and Borrower) to
provide the transferor Lender a new Form W-8BEN or Form W-8ECI or any
forms reasonably requested in order to establish an exemption from, or
reduction in the rate of, U.S. withholding tax upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.

 

(d)           Borrower shall bear
its own costs and expenses incurred in connection with their compliance with
any request by Lender under this Section 9.7.

 

80

 

(e)           Each Lender
hereunder shall be individually and severally (and not jointly) liable for the
satisfaction of its obligations hereunder and under the other Loan Documents.

 

9.8.          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.

 

9.9.          Preferences.  Lender shall have no obligation to marshal
any assets in favor of Borrower or any other party or against or in payment of
any or all of the obligations of Borrower pursuant to this Agreement, the Notes
or any other Loan Document.  During the
continuance of an Event of Default, Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by
Borrower to any portion of the obligations of Borrower hereunder and under the
Loan Documents.  To the extent Borrower
makes a payment or payments to Lender, which payment or proceeds or any portion
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 portion 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.

 

9.10.        Remedies of
Borrower.  If a claim or adjudication
is made that Lender or its agents have unreasonably delayed acting or acted
unreasonably in any case where by law or under this Agreement, the Notes, the
Mortgages or the other Loan Documents, any of such Persons has an obligation to
act promptly or reasonably, Borrower agrees that no such Person shall be liable
for any monetary damages, and Borrower’s sole remedy shall be limited to
commencing an action seeking specific performance, injunctive relief and/or
declaratory judgment, except in any instance in which it has been finally
determined by a court of competent jurisdiction that Lender’s action, delay or
inaction has constituted gross negligence, willful misconduct or an illegal
act.

 

9.11.        Offsets,
Counterclaims and Defenses.  All
payments made by Borrower hereunder or under the other Loan Documents shall be
made irrespective of, and without any deduction for, any setoffs or
counterclaims.  Borrower waives the right
to assert a counterclaim, other than a mandatory or compulsory counterclaim, in
any action or proceeding brought against it by Lender arising out of or in any
way connected with the Notes, this Agreement, the other Loan Documents or the
Indebtedness.  Any assignee of Lender’s
interest in the Loan shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to the Loan.

 

9.12.        No Joint Venture.  Nothing in this Agreement 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
any Property other than that of mortgagee or lender.

 

81

 

 

9.13.        Conflict;
Construction of Documents.  In the
event of any conflict between the provisions of this Agreement and the
provisions of the Notes, the Mortgages or any of the other Loan Documents, the
provisions of this Agreement shall prevail.

 

9.14.        Brokers and
Financial Advisors.  Borrower
represents that neither Borrower nor Sponsor have dealt with any financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement.  Borrower agrees to indemnify and hold Lender
harmless from and against any and all claims, liabilities, costs and expenses
of any kind in any way relating to or arising from a claim by any Person that
such Person acted on behalf of Borrower in connection with the transactions
contemplated in this Agreement.  The
provisions of this Section 9.14 shall survive the expiration and
termination of this Agreement and the repayment of the Indebtedness.

 

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

 

9.16.        Estoppel
Certificates.  Borrower and Lender
each agrees at any time and from time to time, to execute, acknowledge and
deliver to the other, within five Business Days after receipt of Lender’s or
Borrower’s, as the case may be, written request therefor, a statement in
writing setting forth (A) the Principal Indebtedness, (B) the date on
which installments of interest and/or principal were last paid, (C) in the
case of Borrower’s estoppel, any offsets or defenses to the payment of the
Indebtedness, (D) in the case of Borrower’s estoppel, that the Notes, this
Agreement, the Mortgages and the other Loan Documents are valid, legal and
binding obligations, (E) that the Loan Documents have not been modified or
if modified, giving particulars of such modification, (F) in the case of
Borrower’s estoppel, that  to Borrower’s
knowledge, Borrower is not in default under the Loan Documents (or specifying
any such default), and in the case of Lender’s estoppel, that Lender has not
delivered a written notice of default (or describing any such notice), and (G) such
other matters as Lender or Borrower may reasonably request.  Any prospective purchaser of any interest in
a Loan or any actual or prospective purchaser or holder of any direct or
indirect interest in the Borrowers (to the extent permitted hereunder) shall be
permitted to rely on such certificate.

 

9.17.        Payment of
Expenses; Mortgage Recording Taxes. 
Borrower shall reimburse Lender upon receipt of written notice from
Lender for (i) all reasonable out-of-pocket costs and expenses incurred by
Lender (or any of its Affiliates) in connection with the origination and any
post-closing restructuring of the Loan, including legal fees and disbursements,
accounting fees, and the costs of the Appraisal, the Engineering Report, the
Qualified Title Insurance Policy, the Qualified Survey, the Environmental
Report and any other third-party diligence materials; (ii) all reasonable
out-of-pocket costs and expenses incurred by Lender (or any of its Affiliates)
in connection with (A) monitoring 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 confirming compliance with environmental and
insurance requirements, in each case if and to the extent Lender has reasonable
cause to suspect noncompliance, (B) the negotiation, preparation,
execution, delivery and administration of any consents, amendments,

 

82

 

waivers or other modifications to this Agreement and the other Loan
Documents and any other documents or matters requested by Borrower or by
Lender, (C) filing and recording fees and expenses and other similar
expenses incurred in creating and perfecting the Liens in favor of Lender
pursuant to this Agreement and the other Loan Documents, (D) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case
against, under or affecting Borrower, this Agreement, the other Loan Documents
or any Collateral, and (E) obtaining any Rating Confirmation required or
requested by Borrower hereunder; and (iii) all actual out-of-pocket costs
and expenses (including, if the Loan has been securitized and an Event of
Default has occurred, customary special servicing fees resulting therefrom)
incurred by Lender (or any of its Affiliates) in connection with the
enforcement of any obligations of Borrower, or a Default by Borrower, under the
Loan Documents, including any actual or attempted foreclosure, deed-in-lieu of
foreclosure, refinancing, restructuring or workout and any insolvency or
bankruptcy proceedings (including any applicable transfer taxes).

 

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

 

9.19.        Recourse.

 

(a)           The
Loan shall be fully recourse to Borrower. 
No recourse shall be had for the Loan against any other Person,
including any Affiliate of Borrower or any officer, director, partner or
equityholder of Borrower or any such Affiliate, except for (i) claims
against Sponsor under the Guaranty and (ii) claims against Borrower and
Sponsor under the Environmental Indemnity.

 

(b)           Borrower
shall indemnify Lender and hold Lender harmless from and against any and all
Damages to Lender (plus the legal and other expenses of enforcing the
obligations of Borrower under this Section 9.19) resulting from or
arising out of any of the following (the “Indemnified Liabilities”),
which Indemnified Liabilities shall be guaranteed by Sponsor, jointly and
severally, pursuant to the Guaranty:

 

(i)            any intentional
material physical Waste with respect to any Property committed or permitted by
any Borrower, the Sponsor or any of their respective Affiliates;

 

83

 

(ii)           any fraud, willful
misconduct or intentional material misrepresentation committed by any Borrower,
the Sponsor or any of their respective Affiliates;

 

(iii)          the
misappropriation by any Borrower, the Sponsor or any of their respective
Affiliates of any funds in violation of the Loan Documents (including
misappropriation of Revenues, security deposits and/or Loss Proceeds and the
violation of the last sentence of Section 5.7(d));

 

(iv)          any breach by any
Borrower or the Sponsor of any material representation or covenant regarding
environmental matters contained in this Agreement or in the Environmental
Indemnity;

 

(v)           the failure of any
Borrower, at any time, to comply with Single-Purpose Entity requirements
hereunder, in any material respect;

 

(vi)          any failure to pay
income tax liabilities of non pass-through entities comprising any Borrower or
its Affiliates;

 

(vii)         the failure of any
Borrower to fully discharge prior to the Closing Date any liabilities,
contingent or otherwise, associated with assets that were owned by Borrower or
any of its Affiliates prior to the Closing Date (including all employee
liabilities), other than the Properties and direct or indirect equity interests
therein;

 

(viii)        failure
to structure and consummate the Merger in a manner that does not give rise to a
shareholder lawsuit; and

 

(ix)          any
failure of the representation made in Section 9.14 to be true and
correct.

 

In addition to the foregoing, the Loan shall be fully
recourse to Borrower and Sponsor, jointly and severally, upon (i)  any
Transfer of Collateral or any Property, voluntary or collusive Lien on
Collateral or any Property, or Change
of Control which is prohibited hereunder or (ii) the occurrence of
any filing by any Borrower under the Bankruptcy Code or any joining or
colluding by any Borrower or any of their respective Affiliates (including
Sponsor) in the filing of an involuntary case in respect of any Borrower under
the Bankruptcy Code.

 

9.20.  Right of Set-Off.  In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender may from time to time, without presentment, demand,
protest or other notice of any kind (all of such rights being hereby expressly
waived), set-off and appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by any Lender
(including branches, agencies or Affiliates of Lender wherever located) to or
for the credit or the account of Borrower against the obligations and liabilities
of Borrower to any Lender hereunder, under the Notes, the other Loan Documents
or otherwise, irrespective of whether such Lender shall have made any demand
hereunder and although such obligations, liabilities or claims, or any of them,
may be contingent or unmatured, and any such set-off shall be deemed to have
been made immediately upon the 

 

84

 

occurrence of an Event of Default even though such charge is made or
entered on the books of Lender subsequent thereto.

 

9.21.  Exculpation of Lender.  Lender neither undertakes nor assumes any
responsibility or duty to Borrower or any other party to select, review,
inspect, examine, supervise, pass judgment upon or inform Borrower or any third
party of (a) the existence, quality, adequacy or suitability of Appraisals
of the Properties or other Collateral, (b) any environmental report, or (c) any
other matters or items, including engineering, soils and seismic reports which
are contemplated in the Loan Documents.  Any
such selection, review, inspection, examination and the like, and any other due
diligence conducted by Lender, is solely for the purpose of protecting Lender’s
rights under the Loan Documents, and shall not render Lender liable to Borrower
or any third party for the existence, sufficiency, accuracy, completeness or
legality thereof.

 

9.22.  Servicer.  Lender may delegate any and all rights and
obligations of Lender hereunder and under the other Loan Documents to the
Servicer upon notice by Lender to Borrower, whereupon any notice or consent
from the Servicer to Borrower, and any action by Servicer on Lender’s behalf,
shall have the same force and effect as if Servicer were Lender.  Lender shall bear the cost of all servicing
fees, costs and expenses other than those to which Lender is expressly entitled
to reimbursement hereunder and under the other Loan Documents, including
without limitation, the Cooperation Agreement.

 

9.23  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 ANY TERM
SHEETS, CONFIDENTIALITY AGREEMENTS AND COMMITMENT LETTERS, ARE SUPERSEDED BY
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT THAT ANY
ORIGINATION FEE SPECIFIED IN ANY TERM SHEET, COMMITMENT LETTER OR FEE LETTER
SHALL BE AN OBLIGATION OF BORROWER AND SHALL BE PAID AT CLOSING, AND ANY
INDEMNIFICATIONS,  FLEX PROVISION, EXIT
FEES AND THE LIKE PROVIDED FOR THEREIN SHALL SURVIVE THE CLOSING).

 

85

 

Lender and Borrower are executing this Agreement as of the date first
above written.

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  GOLDMAN SACHS COMMERCIAL MORTGAGE

  
	
   

  	
  CAPITAL, L.P., a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John Boerner

  
	
   

  	
   

  	
  Name: 

  	
  John Boerner

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  CITICORP NORTH AMERICA, INC., a New York 

  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Bouton

  
	
   

  	
   

  	
  Name:

  	
  David Bouton

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  SL GREEN REALTY CORP.,
  a Maryland Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory F. Hughes

  
	
   

  	
   

  	
  Name:

  	
  Gregory F. Hughes

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Operating Officer

  

 

[Signatures continue on
following page]

 

 

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  The entities listed on Schedule A to this

  
	
   

  	
  signature page

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew S. Levine

  
	
   

  	
   

  	
  Name:

  	
  Andrew S. Levine

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

 

 

 

SCHEDULE A

 

Dresher Court Realty, L.P.

First States Investors 105, LLC (PA)

First States Investors 107, LLC (AR)

First States Investors 117, LLC (FL)

First States Investors 118, LLC (FL)

First States Investors 147, LLC (IA)

First States Investors 154, LLC (NJ)

First States Investors 157, LLC (NJ)

First States Investors 2017, LLC

First States Investors 2100, L.P. (NC)

First States Investors 2102, L.P. (NC)

First States Investors 2103, L.P. (NC)

First States Investors 2104, L.P. (NC)

First States Investors 2105, L.P. (NC)

First States Investors 2106, L.P. (NC)

First States Investors 2107, L.P. (NC)

First States Investors 2108, L.P. (NC)

First States Investors 2110, LLC (VA)

First States Investors 2208, LLC (DE)

First States Investors 230, L.P. (NC)

First States Investors 2550A, LLC (DE)

First States Investors 3004, Limited Partnership (FL)

First States Investors 3014, LLC (GA)

First States Investors 3022, L.P. (NC)

First States Investors 3024, L.P. (NC)

First States Investors 3028, L.P. (NC)

First States Investors 3033, L.P. (NC)

First States Investors 3034, LLC (SC)

First States Investors 3035, LLC (SC)

First States Investors 3043, LLC (SC)

First States Investors 3048, LLC (VA)

First States Investors 3061, LLC (NJ)

First States Investors 3067, LLC (VA)

First States Investors 3076, LLC (GA)

First States Investors 3077, LLC (GA)

First States Investors 3081, Limited Partnership

First States Investors 3086, LLC (PA)

First States Investors 3087, LLC (VA)

First States Investors 3089, LLC (VA)

First States Investors 3090, LLC (FL)

First States Investors 3091, LLC (GA)

First States Investors 3093, LLC (VA)

First States Investors 3098, LLC (VA)

First States Investors 3099, LLC (VA)

First States Investors 3103, LLC (GA)

First States Investors 3108, LLC (NJ)

First States Investors 3114, LLC (TN)

First States Investors 3151, LLC (FL)

 

 

 

 

First States Investors 3179, Limited Partnership (DE)

 

First States Investors 3187, Limited Partnership (DE)

 

First States Investors 3195, L.P. (TX)

First States Investors 3300, LLC

First States Investors 3601, LLC (FL)

First States Investors 3632, LLC (FL)

First States Investors 3642, LLC (NJ)

First States Investors 3647, L.P. (PA)

First States Investors 40, LLC (MO)

First States Investors 4000C, LLC (DE)

First States Investors 4029, LLC (DE)

First States Investors 4043, LLC (GA)

First States Investors 4044, LLC (DE)

First States Investors 4048, LLC (DE)

First States Investors 4055, LLC (DE)

First States Investors 4062, LLC (DE)

First States Investors 4067, LLC (DE)

First States Investors 4081, LLC (DE)

First States Investors 4085, LLC (DE)

First States Investors 4100B, L.P. (DE)

First States Investors 4150, LLC (DE)

First States Investors 4413, LLC (DE)

First States Investors 4499, LLC (DE)

First States Investors 4500, LLC (DE)

First States Investors 5000B, LLC (DE)

First States Investors 77, Limited Partnership (FL)

First States Investors 922, LLC (IL)

First States Investors 923, L.P. (DE)

First States Investors 926 L.P.

First States Investors 927, LLC (DE)

First States Investors Branch One, L.P. (DE)

First States Investors GS Pool A, L.P. (DE)

First States Investors GS Pool B, L.P. (DE)

First States Investors GS Pool C, L.P.

First States Investors Realty, LLC (DE)

 

First States Partners No. 201, L.P.

First States Partners No. 203, LLC (NJ)

First States Partners No. 213, LLC (NJ)

First States Partners No. 216, L.P. (PA)

First States Partners No. 236 L.P. (PA)

First States Properties No. 12, LLC (PA)

First States Properties No. 15, LLC (PA)

First States Properties No. 19, LLC (PA)

First States Properties No. 34, LLC (PA)

First States Properties No. 35, LLC (PA)

First States Properties No. 37, LLC (PA)

First States Properties No. 41, LLC (PA)

 

 

 

 

 

First States Properties No. 43, LLC (PA)

First States Properties No. 49, LLC (PA)

First States Properties No. 51, LLC (PA)

First States Properties No. 52, LLC (PA)

First States Properties No. 56, LLC (PA)

First States Properties No. 59, LLC (PA)

First States Properties No. 62, LLC (PA)

First States Properties No. 67, LLC (PA)

First States Properties No. 71, LLC (PA)

First States Properties No. 73, LLC (PA)

First States Properties No. 75, LLC (PA)

First States Properties No. 9, LLC (PA)

First States Realty Corp., LLCExhibit 10.2

 

LOAN AGREEMENT

 

Dated as of April 1, 2008

 

between

 

THE BORROWERS NAMED HEREIN

 

collectively, as Borrower

and

 

THE LENDERS NAMED HEREIN

 

collectively, as Lender

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  GENERAL TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  The Loan

  	
  33

  
	
  Section 1.2.

  	
  The Term

  	
  33

  
	
  Section 1.3.

  	
  Interest and Principal

  	
  33

  
	
  Section 1.4.

  	
  Interest Rate Cap Agreements

  	
  34

  
	
  Section 1.5.

  	
  Method and Place of Payment

  	
  35

  
	
  Section 1.6.

  	
  Regulatory Change

  	
  35

  
	
  Section 1.7.

  	
  Taxes

  	
  36

  
	
  Section 1.8.

  	
  Release

  	
  37

  
	
   

  	
   

  
	
  ARTICLE II

  VOLUNTARY PREPAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  Voluntary Prepayment

  	
  37

  
	
  Section 2.2.

  	
  Property Releases

  	
  39

  
	
  Section 2.3.

  	
  Value Add Pool Equity Releases

  	
  40

  
	
  Section 2.4.

  	
  Release of Vacant Land

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  ACCOUNTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
  Cash Management Account

  	
  43

  
	
  Section 3.2.

  	
  Distributions from Cash Management Account

  	
  45

  
	
  Section 3.3.

  	
  Loss Proceeds Account

  	
  45

  
	
  Section 3.4. 

  	
  Environmental Escrow Account

  	
  46

  
	
  Section 3.5.

  	
  Indenture Reserve Account

  	
  46

  
	
  Section 3.6.

  	
  Account Collateral

  	
  47

  
	
  Section 3.7.

  	
  Bankruptcy

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  REPRESENTATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Organization

  	
  48

  
	
  Section 4.2.

  	
  Authorization

  	
  49

  
	
  Section 4.3.

  	
  No Conflicts

  	
  49

  
	
  Section 4.4.

  	
  Consents

  	
  49

  
	
  Section 4.5.

  	
  Enforceable Obligations

  	
  49

  
	
  Section 4.6.

  	
  No Default

  	
  49

  
	
  Section 4.7.

  	
  Payment of Taxes

  	
  49

  
	
  Section 4.8.

  	
  Compliance with Law

  	
  49

  
						

 

i

 

	
  Section 4.9.

  	
  ERISA

  	
  50

  
	
  Section 4.10.

  	
  Investment Company Act

  	
  50

  
	
  Section 4.11.

  	
  No Bankruptcy Filing

  	
  50

  
	
  Section 4.12.

  	
  Other Debt

  	
  50

  
	
  Section 4.13.

  	
  Litigation

  	
  50

  
	
  Section 4.14.

  	
  Leases; Material Agreements

  	
  50

  
	
  Section 4.15.

  	
  Full and Accurate Disclosure

  	
  51

  
	
  Section 4.16.

  	
  Financial Condition

  	
  52

  
	
  Section 4.17.

  	
  Single-Purpose Requirements

  	
  52

  
	
  Section 4.18.

  	
  [Intentionally Omitted]

  	
  52

  
	
  Section 4.19.

  	
  Not Foreign Person

  	
  52

  
	
  Section 4.20.

  	
  Labor Matters

  	
  52

  
	
  Section 4.21.

  	
  Title

  	
  52

  
	
  Section 4.22.

  	
  No Encroachments

  	
  53

  
	
  Section 4.23.

  	
  Physical Condition

  	
  53

  
	
  Section 4.24.

  	
  Fraudulent Conveyance

  	
  54

  
	
  Section 4.25.

  	
  Management

  	
  54

  
	
  Section 4.26.

  	
  Condemnation

  	
  54

  
	
  Section 4.27.

  	
  Utilities and Public Access

  	
  54

  
	
  Section 4.28.

  	
  Environmental Matters

  	
  54

  
	
  Section 4.29.

  	
  Assessments

  	
  55

  
	
  Section 4.30.

  	
  No Joint Assessment

  	
  55

  
	
  Section 4.31.

  	
  Separate Lots

  	
  55

  
	
  Section 4.32.

  	
  Permits; Certificate of Occupancy

  	
  56

  
	
  Section 4.33.

  	
  Flood Zone

  	
  56

  
	
  Section 4.34.

  	
  Security Deposits

  	
  56

  
	
  Section 4.35.

  	
  Acquisition Documents

  	
  56

  
	
  Section 4.36.

  	
  Insurance

  	
  56

  
	
  Section 4.37.

  	
  Ground Leased Parcels

  	
  56

  
	
  Section 4.38.

  	
  Intentionally Omitted

  	
  58

  
	
  Section 4.39.

  	
  Estoppel Certificates

  	
  58

  
	
  Section 4.40.

  	
  Embargoed Person

  	
  58

  
	
  Section 4.41.

  	
  Compliance with Anti-Terrorism, Embargo,
  Sanctions and Anti-Money Laundering Laws

  	
  58

  
	
  Section 4.42.

  	
  Tax Basis

  	
  59

  
	
  Section 4.43.

  	
  Survival

  	
  59

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Existence

  	
  59

  
	
  Section 5.2.

  	
  Maintenance of Property

  	
  60

  
	
  Section 5.3.

  	
  Compliance with Legal Requirements

  	
  60

  
	
  Section 5.4.

  	
  Impositions and Other Claims

  	
  60

  
	
  Section 5.5.

  	
  Access to Property

  	
  60

  
	
  Section 5.6.

  	
  Cooperate in Legal Proceedings

  	
  61

  

 

ii

 

	
  Section 5.7.

  	
  Leases

  	
  61

  
	
  Section 5.8.

  	
  Plan
  Assets, etc.

  	
  63

  
	
  Section 5.9.

  	
  Further Assurances

  	
  63

  
	
  Section 5.10.

  	
  Management of Properties

  	
  64

  
	
  Section 5.11.

  	
  Notice of Material Change

  	
  65

  
	
  Section 5.12.

  	
  Annual Financial Statements

  	
  65

  
	
  Section 5.13.

  	
  Quarterly Financial Statements

  	
  65

  
	
  Section 5.14.

  	
  Monthly Financial Statements

  	
  66

  
	
  Section 5.15.

  	
  Insurance

  	
  67

  
	
  Section 5.16.

  	
  Casualty and Condemnation

  	
  71

  
	
  Section 5.17.

  	
  Annual Budget

  	
  74

  
	
  Section 5.18.

  	
  General Indemnity

  	
  74

  
	
  Section 5.19.

  	
  Nonbinding Consultation

  	
  75

  
	
  Section 5.20.

  	
  Compliance with Encumbrances

  	
  75

  
	
  Section 5.21.

  	
  Encumbered Property Indebtedness

  	
  75

  
	
  Section 5.22.

  	
  Disposition Assets

  	
  76

  
	
  Section 5.23.

  	
  Distributions

  	
  76

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Liens on the Properties

  	
  77

  
	
  Section 6.2.

  	
  Ownership

  	
  77

  
	
  Section 6.3. 

  	
  Transfer

  	
  77

  
	
  Section 6.4.

  	
  Debt

  	
  79

  
	
  Section 6.5.

  	
  Dissolution; Merger or Consolidation

  	
  79

  
	
  Section 6.6.

  	
  Change In Business

  	
  79

  
	
  Section 6.7.

  	
  Debt Cancellation

  	
  79

  
	
  Section 6.8.

  	
  Affiliate Transactions

  	
  79

  
	
  Section 6.9.

  	
  Misapplication of Funds

  	
  79

  
	
  Section 6.10.

  	
  Jurisdiction of Formation

  	
  79

  
	
  Section 6.11.

  	
  Modifications and Waivers

  	
  79

  
	
  Section 6.12.

  	
  ERISA

  	
  80

  
	
  Section 6.13.

  	
  Alterations and Expansions

  	
  80

  
	
  Section 6.14.

  	
  Advances and Investments

  	
  80

  
	
  Section 6.15.

  	
  Single-Purpose Entity

  	
  81

  
	
  Section 6.16.

  	
  Zoning and Uses

  	
  81

  
	
  Section 6.17.

  	
  Waste

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Event of Default

  	
  82

  
	
  Section 7.2.

  	
  Remedies

  	
  85

  
	
  Section 7.3.

  	
  No Waiver

  	
  86

  
	
  Section 7.4.

  	
  Application of Payments after an Event of
  Default

  	
  86

  

 

iii

 

	
  ARTICLE VIII

  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Conditions Precedent to Closing

  	
  86

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Successors

  	
  90

  
	
  Section 9.2.

  	
  GOVERNING LAW

  	
  90

  
	
  Section 9.3.

  	
  Modification, Waiver in Writing

  	
  90

  
	
  Section 9.4.

  	
  Notices

  	
  90

  
	
  Section 9.5.

  	
  TRIAL BY JURY

  	
  92

  
	
  Section 9.6.

  	
  Headings

  	
  92

  
	
  Section 9.7.

  	
  Assignment and Participation

  	
  92

  
	
  Section 9.8.

  	
  Severability

  	
  94

  
	
  Section 9.9.

  	
  Preferences

  	
  94

  
	
  Section 9.10.

  	
  Remedies of Borrower

  	
  94

  
	
  Section 9.11.

  	
  Offsets, Counterclaims and Defenses

  	
  94

  
	
  Section 9.12.

  	
  No Joint Venture

  	
  95

  
	
  Section 9.13.

  	
  Conflict; Construction of Documents

  	
  95

  
	
  Section 9.14.

  	
  Brokers and Financial Advisors

  	
  95

  
	
  Section 9.15.

  	
  Counterparts

  	
  95

  
	
  Section 9.16.

  	
  Estoppel Certificates

  	
  95

  
	
  Section 9.17.

  	
  Payment of Expenses; Mortgage Recording
  Taxes

  	
  95

  
	
  Section 9.18.

  	
  No Third-Party Beneficiaries

  	
  96

  
	
  Section 9.19.

  	
  Recourse

  	
  96

  
	
  Section 9.20.

  	
  Right of Set-Off

  	
  98

  
	
  Section 9.21.

  	
  Exculpation of Lender

  	
  98

  
	
  Section 9.22.

  	
  Servicer

  	
  99

  
	
  Section 9.23.

  	
  Prior Agreements

  	
  99

  

 

iv

 

Exhibits

 

	
  A

  	
   

  	
  Organizational Chart

  
	
  B

  	
   

  	
  Form of Interest
  Rate Cap Opinion

  
	
  C

  	
   

  	
  Form of Interest
  Rate Cap Confirmation

  
	
  D

  	
   

  	
  Form of Tenant
  Notice

  
	
  E

  	
   

  	
  Insurance Program

  
	
  F

  	
   

  	
  Form of
  Intercreditor Agreement

  
	
  G

  	
   

  	
  Form of SNDA

  
	
  H

  	
   

  	
  Form of Permitted
  TRS Contribution Agreement

  
	
  I

  	
   

  	
  Release Price
  Definitions

  

 

Schedules

 

	
  A-1

  	
   

  	
  Mortgage Loan
  Collateral Properties

  
	
  A-2

  	
   

  	
  Encumbered Property

  
	
  B

  	
   

  	
  Exception Report

  
	
  C

  	
   

  	
  Flow of Funds

  
	
  D

  	
   

  	
  Material Agreements

  
	
  E

  	
   

  	
  Aggregate Allocated Loan Amounts

  
	
  F

  	
   

  	
  Environmental Conditions

  
	
  G

  	
   

  	
  Deferred Maintenance Conditions

  
	
  H

  	
   

  	
  Encumbered Property Pledgors

  
	
  I

  	
   

  	
  Mortgage Loan Property
  Owners

  
	
  J

  	
   

  	
  Value Add Pool
  Properties

  
	
  K

  	
   

  	
  Joint Venture
  Agreements

  
	
  L

  	
   

  	
  [Intentionally Omitted]

  
	
  M

  	
   

  	
  Other Ground Lease
  Collateral

  
	
  N

  	
   

  	
  Net Leases

  
	
  O

  	
   

  	
  Encumbered Property
  Debt

  
	
  P

  	
   

  	
  Joint Venture Properties

  
	
  Q

  	
   

  	
  Dana Portfolio

  
	
  R

  	
   

  	
  [Intentionally Omitted]

  
	
  S

  	
   

  	
  Lease Obligations

  
	
  T

  	
   

  	
  Property Management
  Agreements

  
	
  U

  	
   

  	
  Encumbered Property
  Debt Documents

  
	
  V

  	
   

  	
  Ground Leases

  

 

v

 

LOAN AGREEMENT

 

This Loan Agreement (this “Agreement”) is dated April 1,
2008 and is between GOLDMAN SACHS COMMERCIAL MORTGAGE CAPITAL, L.P., a Delaware
limited partnership (“GSCMC”), CITICORP NORTH AMERICA, INC., a New York
corporation (“Citigroup”), and SL GREEN REALTY CORP., a Maryland
corporation (“SL Green”, and together with GSCMC, Citigroup and their
respective successors and assigns, including any lawful holder of any portion
of the Indebtedness (as hereinafter defined) collectively, “Lender”), as
lender, and each REQUIRED EQUITY PLEDGOR (as hereinafter defined), AMERICAN
FINANCIAL REALTY TRUST, a Maryland real estate investment trust (“AFRT”),
GKK STARS ACQUISITION LLC, a Delaware limited liability company (“AFRT Owner”),
FIRST STATES GROUP, L.P., a Delaware limited partnership (“Operating
Partnership”), FIRST STATES GROUP, LLC, a Delaware limited liability
company (“Operating Partnership GP” and together with Operating
Partnership, Required Equity Pledgor, AFRT, AFRT Owner and Operating
Partnership, collectively, jointly and severally, together with their
respective permitted successors and assigns, “Borrower”), as borrower.

 

RECITALS

 

Borrower desires to obtain from Lender the Loan (as hereinafter
defined).

 

Lender is willing to make the Loan on the terms and conditions set
forth in this Agreement if Borrower joins in the execution and delivery of this
Agreement, issues the Note and executes and delivers the other Loan Documents.

 

Lender and Borrower therefore agree as follows:

 

DEFINITIONS

 

(a)           When used in this
Agreement, the following capitalized terms have the following meanings:

 

“Acceptable Counterparty” means any counterparty to an Interest
Rate Cap Agreement that has and maintains (a) either (i) a long-term
unsecured debt rating or counterparty rating of A+ or higher from S&P, or (ii) a
short-term unsecured debt rating of A-1 or higher from S&P, and (b) a
long-term unsecured debt rating of Aa3 or higher from Moody’s.

 

 “Account Collateral”
means, collectively, the Collateral Accounts and all sums 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.

 

“Affiliate” means, with respect to any Person,
any other Person controlling, controlled by or under common control with such
Person (and “unaffiliated” means not an Affiliate).

 

1

 

“Affiliated Release Price” has the meaning set forth in Exhibit I.

 

“AFRT Equity” means 100% of the real estate investment trust
equity interests in AFRT.

 

“Aggregate Allocated Loan Amount” means, with respect to each
Property listed in Schedule E, the amount set forth in Schedule E
(which reflects the portion of the sum of (x) the Loan Amount and (y) the
initial Encumbered Property Debt allocated to such Property hereunder), subject
to reduction to the extent necessary to reflect Borrower’s then direct or
indirect interest therein with respect to any Joint Venture Property permitted
hereunder.  The Aggregate Allocated Loan
Amount of each Property not listed on Schedule E shall be zero.

 

“Agreement” means this Loan Agreement, as the same may from time
to time hereafter be modified or replaced.

 

“Allocated Loan Amount” means, with respect to
each Property, (x) the Aggregate Allocated Loan Amount minus (y) the
portion of the applicable Encumbered Property Debt allocated to such Property
pursuant to the applicable Encumbered Property Debt Documents (but in no event
shall the Allocated Loan Amount of any Property be less than zero).

 

“ALTA” means the American Land Title Association, or any
successor thereto.

 

“Alteration” means any demolition, alteration, installation,
improvement  or expansion of or to any of
the Properties or any portion thereof other than (i) Tenant Improvements
required under Leases, (ii) any demolition, alteration, installation,
improvement or expansion performed in connection with the restoration of any of
the Properties as a result of a Casualty or Condemnation, (iii) routine
maintenance and repair worked performed at any of the Properties in the
ordinary course of business, and (iv) any demolition, alteration,
installation, improvement or expansion performed by any Tenant where such
Tenant is entitled to do the same without obtaining the consent or approval of
the relevant Property Owner pursuant to the applicable lease.

 

“Annual Budget” means a capital and operating expenditure budget
for the Properties prepared by Borrower and specifying amounts sufficient to
operate and maintain the Properties at a standard at least equal to that
maintained on the Closing Date.

 

“Appraisal” means an as-is appraisal that is prepared by a
member of the Appraisal Institute selected by Lender, meets the minimum
appraisal standards for national banks promulgated by the Comptroller of the
Currency pursuant to Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, as amended (FIRREA) and complies with the Uniform
Standards of Professional Appraisal Practice (USPAP).

 

“Approved Accounting Firm” means (i) PricewaterhouseCoopers,
(ii) Deloitte & Touche, (iii) KPMG, (iv) The Schonbraun
McCann Group, (v) Ernst & Young, (vi) Berdon LLP or any
other independent accounting firm reasonably approved by Lender in writing.

 

“Approved Annual Budget” has the meaning set forth in Section 5.17.

 

2

 

“Approved
Management Agreement” means, collectively or individually as the context
may require, those certain Property Management Agreements listed on Schedule
T, dated as of the Closing Date, between Borrower or a Property Owner and
the initial Approved Property Manager, as the same may be modified or replaced
in accordance herewith with the reasonable consent of Lender, and any other
management agreement that is approved by Lender, which approval shall not be
unreasonably withheld, conditioned or delayed, and with respect to which Lender
receives Rating Confirmation.

 

“Approved Property Manager” means (i) Sponsor, SL Green
Realty Corp. and their respective Affiliates, (ii) First States Management
Corp, L.P., (iii) First States Services Management LLC, (iv) GKK
Manager LLC, so long as it is an Affiliate of Sponsor, or (v) any other
management company that is approved by Lender, which approval shall not be
unreasonably withheld, conditioned or delayed, and with respect to which Lender
receives Rating Confirmation, in each case unless and until Lender requests the
termination of that management company pursuant to Section 5.10(d).

 

“Assignment” has the meaning set forth in Section 9.7(b).

 

“Assignment of Interest Rate Cap Agreement” means each
collateral assignment of an interest rate cap agreement executed by Borrower
and an Acceptable Counterparty in accordance herewith, each of which must be in
the form executed by Borrower and the initial Acceptable Counterparty on the
Closing Date, as the same may from time to time be modified or replaced in
accordance therewith and herewith.

 

“Bankruptcy Code” has the meaning set forth in Section 7.1(d).

 

“Blocked Account” has the meaning set forth in Section 3.1(b).

 

“Blocked Account Agreement” has the meaning set
forth in Section 3.1(b).

 

“Borrower” has the meaning set forth in the first paragraph of
this agreement.

 

“Borrower’s knowledge,” “the knowledge of Borrower” and
similar phrases shall (and shall be limited to) the actual (as distinguished
from imputed or construction knowledge) of Edward J. Matey, Jr., Sonya A.
Huffman, David Schonbraun, Andrew Levine and, with respect to leasing matters, Neil Kessner (and
Borrower hereby represents that such individuals are charged with having
knowledge regarding the Borrower and the Properties relevant to the
representations made herein); provided, however, with respect to any use of
this defined term as of a date after the Closing Date, “Borrower’s knowledge”
and “the knowledge of Borrower” shall be deemed to include such knowledge of
any Person who shall assume any actual or contemplated function of the
foregoing persons in the context in which this defined term is being used as of
the date with respect to which such knowledge is determined.  Lender acknowledges that the foregoing
individuals are identified solely for the purpose of defining the scope of
Borrower’s knowledge and not for the purpose of imposing personal liability or
creating any duties running from any such individual to Lender.

 

3

 

“Business Day” means any day other than (i) a Saturday and
a Sunday and (ii) a day on which federally insured depository institutions
in the State of New York or the state in which the offices of Lender, its
trustee, its Servicer or its Servicer’s collection account are located are
authorized or obligated by law, governmental decree or executive order to be
closed. When used with respect to an Interest Determination Date, “Business
Day” shall mean a day on which banks are open for dealing in foreign
currency and exchange in London.

 

“Capital Expenditure” means hard and soft costs incurred by
Borrower or its Affiliates with respect to replacements and capital repairs
made to the Properties (including repairs to, and replacements of, structural
components, roofs, building systems, parking garages, parking lots, and
expenditures for building improvements or major repairs), Leasing Commissions
and Tenant Improvements, in each case to the extent capitalized in accordance
with GAAP.

 

“Cash Management Bank” means a depository institution selected
by Lender in which Eligible Accounts may be maintained.  The initial Cash Management Bank shall be
LaSalle Bank, N.A.

 

“Casualty” means a fire, explosion, flood, collapse, earthquake
or other casualty affecting all or any portion of any Property.

 

“Certificates” means, collectively, any senior and/or
subordinate notes, debentures or pass-through certificates, or other evidence
of indebtedness, or debt or equity securities, or any combination of the
foregoing, representing a direct or beneficial interest, in whole or in part,
in the Loan or the Mortgage Loan, as the case may be.

 

“Change of Control” means the occurrence of
either or both of the following excluding any Transfer permitted in connection
with joint ventures pursuant to Section 6.3(b) or Section 2.3:
(i) the failure of any individual Borrower and/or Property Owner (other
than a Joint Venture Owner or any subsidiary thereof) to be directly or
indirectly 100% owned and controlled by Sponsor, or (ii) the failure of
any Single-Purpose Equityholder (if any) to be directly or indirectly 100%
owned and controlled by Sponsor.

 

“Closing Date” means the date of this
Agreement.

 

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

 

“Collateral” means all assets owned from time to time by
Borrower including (i) the AFRT Equity, (ii) the Encumbered Property
Collateral, (iii) the Value Add Pool Equity, (iv) the Mortgage Loan
Property Owner Equity, (v) the Other Ground Lease Collateral, (vi) the
Revenues, (vii) all Distributions and (viii) all other tangible and
intangible property in respect of which Lender is granted a Lien under the Loan
Documents, and all proceeds thereof.

 

4

 

“Collateral Accounts” means, collectively, the Cash Management
Account, any Blocked Account, the Loss Proceeds Account, the Indenture Reserve
Account, the Environmental Escrow Account and any other Eligible Account
established hereunder.

 

“Component Balance” has the meaning set forth in Section 1.3(c).

 

“Component Spread” has the meaning set forth in Section 1.3(c).

 

“Componentization Notice” has the meaning set forth in Section 1.3(c).

 

“Condemnation” means a taking or voluntary
conveyance of all or part of any of the Properties or any interest in or right
accruing to or use of any of the Properties, as the result of, or in settlement
of, any condemnation or other eminent domain proceeding by any Governmental
Authority.

 

“Consumer Price Index” means the Consumer
Price Index for All Urban Consumers published by the Bureau of Labor Statistics
of the United States Department of Labor, New York Metropolitan Statistical
Area, All Items (1982-84=100), or any successor index thereto, approximately
adjusted, and in the event that the Consumer Price Index is converted to a
different standard reference base or otherwise revised, the determination of
adjustments provided for herein shall be made with the use of such conversion
factor, formula or table for converting the Consumer Price Index as may be
published by the Bureau of Labor Statistics or, if said Bureau shall not
publish the same, then with the use of such conversion factor, formula or table
as may be published by Prentice-Hall, Inc., or any other nationally recognized
publisher of similar statistical information; and if the Consumer Price Index
ceases to be published, and there is no successor thereto, such other index as
Lender and Borrower, each acting reasonably, shall agree upon in writing.

 

“Contingent Obligation” means, with respect to any Person, any
obligation of such Person directly or indirectly guaranteeing any Debt of any
other Person in any manner and any contingent obligation to purchase, to
provide funds for payment, to supply funds to invest in any other Person or
otherwise to assure a creditor against loss.

 

“Cooperation Agreement” means that certain Mortgage Loan
Cooperation Agreement, dated as of the Closing Date, among Borrower, Lender and
Sponsor, as the same may from time to time be modified or replaced in
accordance herewith.

 

“Damages” to a party means any and all liabilities, obligations,
losses, damages, penalties, assessments, actions, judgments, suits, claims,
costs, expenses (including reasonable attorneys’ fees whether or not suit is brought),
settlement costs and disbursements imposed on, incurred by or asserted against
such party; provided, however, Damages shall exclude consequential damages
incurred by Lender or Indemnified Parties, as the case may be.

 

“Dana Portfolio” means those certain Properties specified in Schedule
Q, as modified from time to time to reflect any Transfer permitted pursuant
hereto.

 

5

 

“Dana Excess Cash Flow” means, for so long as the Dana
Portfolio, or any interest therein, shall be subject to the Liens of the Loan,
all Distributions deposited into the Cash Management Account that are
attributable to the Dana Portfolio.

 

“Dana Release Price” has the meaning set forth in Exhibit I.

 

“Debt” means, with respect to any Person,
without duplication:

 

(i)            all indebtedness of
such Person to any other party (regardless of whether such indebtedness is
evidenced by a written instrument such as a note, bond or debenture), including
indebtedness for borrowed money or for the deferred purchase price of property
or services;

 

(ii)           all letters of
credit issued for the account of such Person and all unreimbursed amounts drawn
thereunder;

 

(iii)          all indebtedness
secured by a Lien on any property owned by such Person (whether or not such
indebtedness has been assumed) except obligations for impositions which are not
yet due and payable;

 

(iv)          all Contingent
Obligations of such Person;

 

(v)           all payment
obligations of such Person under any interest rate protection agreement
(including any interest rate swaps, floors, collars or similar agreements) and
similar agreements;

 

(vi)          all contractual
indemnity obligations of such Person, other than those made in the ordinary
course of business in connection with the provision of goods and services to
one or more of the Properties; and

 

(vii)         any
material actual or contingent liability to any Person or Governmental Authority
with respect to any employee benefit plan (within the meaning of Section 3(3) of
ERISA) subject to Title IV of ERISA, Section 302 of ERISA or Section 412
of the Code.

 

“Debt Service” means, with respect to
any Test Period, the product of (x) the Principal Indebtedness as of the
last day of such Test Period, times (y) the sum of the LIBOR Strike
Rate plus the Spread, times (z) a fraction, the numerator of
which is 365 and the denominator of which is 360.

 

“Default” means the occurrence and uncured continuance of any
event which, but for the giving of notice or the passage of time, or both,
would be an Event of Default.

 

“Default Rate” means, with respect to any Note or Note
Component, the greater of (x) 4% per annum in excess of the interest rate
otherwise applicable to such Note or Note Component hereunder and (y) 1%
per annum in excess of the Prime Rate from time to time.

 

6

 

“Deferred
Maintenance Conditions” means the immediate repair and similar maintenance
items set forth in the Engineering Reports applicable to the Properties and
delivered to Borrower on or prior to the Closing Date.

 

“Disposition Assets” means the real property listed on Schedule
R.

 

“Distributions” means all (i) payments and distributions
and (ii) proceeds (as defined in Article 9 of the UCC) in respect of
the income, profits, payments, returns of capital, dividends and other
distributions (whether in the form of cash or otherwise), in each case,
actually distributed by the owner of an Encumbered Property, the TRS Owner or
any Joint Venture Owner to any Borrower.

 

“DSCR” means, with respect to any Test
Period, the quotient of:

 

(i)                                     Net Operating
Income for such period, less actual aggregate principal, interest and
required reserve payments (in each case, due and payable, or then required to
be reserved) in respect of Encumbered Property Debt for such Test Period
(adjusted to reflect Encumbered Properties that have been theretofore released
from the Liens of the Loan Documents), calculated, in the case of floating rate
Encumbered Property Debt, as if LIBOR were at all times equal to the LIBOR
strike rate on the interest rate cap purchased in accordance with the
corresponding Encumbered Property Debt Documents (or, if no interest rate cap
was required under such Encumbered Property Debt Documents, LIBOR plus 3%), less,
for purposes of calculating the LIBOR Strike Rate for the Extension Term,
projected Tenant Improvements and Leasing Commissions reasonably approved by
Lender and Normalized Capital Expenditures; divided by

 

(ii)                                  the Debt
Service for such period.

 

Notwithstanding the foregoing, (a) rental income under the Lease
with Bank of America in respect of the Dana Portfolio for purposes of
calculating DSCR during the Extension Term or for purposes of calculating the
LIBOR Strike Rate for the Extension Term shall be deemed to be equal to the
annual rental payment that is contractually required to be paid by Bank of
America in respect of such Lease in January 2011 (i.e., rental payments
received under such Lease that are in excess of such January 2011 rental
amount shall be ignored for purposes of calculating DSCR) and (b) for
purposes of calculating DSCR at the time of the exercise of the extension
option described in Section 1.2(b), the LIBOR strike price for the
interest rate cap applicable to the Mortgage Loan shall be the LIBOR strike
price applicable to the extension term as described in clause (2) of the
definition of “LIBOR Strike Rate” in the Mortgage Loan Agreement.

 

“Eligible Account” means (i) a segregated account
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution, or (ii) a
segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state-chartered depository
institution which has an investment-grade rating and is subject to regulations
regarding fiduciary funds on deposit

 

7

 

under, or similar to, Title 12 of the Code of Federal Regulations Section 9.10(b) which,
in either case, has corporate trust powers, acting in its fiduciary capacity.

 

“Eligible Institution” means an institution (i) whose
commercial paper, short-term debt obligations or other short-term deposits are
rated at least A–1, Prime-1 or F-1, as applicable, by each of the Rating
Agencies and whose long-term senior unsecured debt obligations are rated
at least A or A2, as applicable, by each of the Rating Agencies, and whose
deposits are insured by the FDIC or (ii) with respect to which Lender
shall have received Rating Confirmation.

 

“Embargoed Person” has the meaning set forth in Section 4.40.

 

“Encumbered Property” means, individually or collectively, as
the context may require, each of the properties listed on Schedule A-2,
including each of the Properties securing the Mortgage Loan or otherwise owned
by the Mortgage Loan Property Owner, as modified from time to time to
reflect  any Transfer permitted pursuant
to Section 2.2.

 

“Encumbered Property Collateral” means the applicable percentage
of the direct and indirect equity interests in each Person that owns Encumbered
Property, as set forth on Schedule H hereto, as modified from time to
time to reflect any Transfer permitted pursuant to Section 6.3(b) or
Section 2.2.

 

“Encumbered Property Debt” or “Encumbered Property Loan”
means the Mortgage Loan and all indebtedness secured by Liens on Encumbered
Property pursuant to Encumbered Property Debt Documents.

 

“Encumbered Property Debt Documents” means, collectively or
individually, as the context may require, all loan documents in favor of any Encumbered
Property Lender with respect to each Encumbered Property as and to the extent
listed on Schedule U, as the same may be amended, replaced (including,
without limitation, in connection with any refinancing thereof permitted
hereunder) or otherwise modified from time to time with the prior reasonable
consent of Lender (Borrower acknowledging it shall be reasonable for Lender to
withhold such consent in connection with any amendment, replacement or
modification that would result in (i) an increase in the principal amount,
interest rate or the amortization of principal, (ii) limitations on
prepayments or the imposition of a fee in connection therewith, (iii) a
reduction on cash available for distribution or (iv) a Material Adverse
Effect).  Lender hereby consents to each
of the intended modifications to be made to the Encumbered Property Debt
Documents relating to the Dana Portfolio as contemplated by that certain
approval letter dated March 28, 2008 from the lender thereunder, a copy of
which was provided to Lender prior to the date hereof.

 

“Encumbered Property Lender” means, individually or
collectively, as the context may require, each holder of Encumbered Property
Debt.

 

“Encumbered Property Owner” means each owner of an Encumbered
Property.

 

“Encumbered Property Pledgor” means, individually or
collectively, as the context may require, each Person listed on Schedule H
hereto, as modified from time to time to reflect any Transfer permitted
pursuant to Section 6.3(b) or Section 2.2.

 

8

 

“Engineering Report” means a structural and seismic engineering
report or reports with respect to each of the Properties prepared by an
independent engineer reasonably approved by Lender and delivered to Lender in
connection with the Loan, and any amendments or supplements thereto delivered
to Lender.

 

“Environmental Claim” means any written notice, claim,
proceeding, investigation or demand by any Person or Governmental Authority
alleging or asserting liability with respect to Borrower, any Property Owner or
any of the Properties arising out of, based on or resulting from (i) the
alleged presence, Use or Release of any Hazardous Substance, (ii) any
alleged violation of any Environmental Law, or (iii) any alleged injury or
threat of injury to property, health or safety or to the environment caused by
Hazardous Substances.

 

“Environmental Escrow Amount” means $850,000.

 

“Environmental Conditions” means those items described in Schedule
F.

 

“Environmental Escrow Account” has the meaning set forth in Section 3.4(a).

 

“Environmental Indemnity” means, with respect to each Property,
that certain environmental indemnity agreement executed by Borrower and the
Sponsor as of the Closing Date, as the same may from time to time be modified or
replaced in accordance herewith.

 

“Environmental Laws” means any and all present and future
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, any judicial or administrative orders, decrees or
judgments thereunder, and any permits, approvals, licenses, registrations,
filings and authorizations, in each case as now or hereafter in effect,
relating to the pollution, protection or cleanup of the environment, relating
to the impact of Hazardous Substances on property, health or safety, or the Use
or Release of Hazardous Substances, or relating to the liability for or costs
of other actual or threatened danger to health or the environment.  The term “Environmental Law” includes,
but is not limited to, the following statutes, as amended, any successors
thereto, and any regulations promulgated pursuant thereto, and any state or
local statutes, ordinances, rules, regulations and the like addressing similar
issues:  the Comprehensive Environmental
Response, Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Materials Transportation Act; the Resource
Conservation and Recovery Act (including Subtitle I relating to underground
storage tanks); the Clean Water Act; the Clean Air Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health
Act; the Federal Water Pollution Control Act; the Federal Insecticide,
Fungicide and Rodenticide Act; the Endangered Species Act; the National
Environmental Policy Act; and the River and Harbors Appropriation Act.  The term “Environmental Law” also
includes, but is not limited to, any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, conditioning transfer of property upon a negative declaration or
other approval of a Governmental Authority of the environmental condition of a
property; or requiring notification or disclosure of Releases of Hazardous
Substances or other environmental conditions of a property to any Governmental
Authority or other Person, whether or not in connection with transfer of title
to or interest in property.

 

9

 

“Environmental Reports” means “Phase I Environmental Site
Assessments” as referred to in the ASTM Standards on Environmental Site
Assessments for Commercial Real Estate, E 1527-05 (and, if necessary, “Phase
II Environmental Site Assessments”), prepared by an independent environmental
auditor reasonably approved by Lender and delivered to Lender and any
amendments or supplements thereto delivered to Lender or Mortgage Lender, and
shall also include any other environmental reports delivered to Lender pursuant
to this Agreement, the Mortgage Loan Documents and the Environmental
Indemnities.

 

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

 

“ERISA Affiliate,” at any time, means each trade or business
(whether or not incorporated) that would, at the time, be treated together with
Borrower or any Property Owner as a single employer under Title IV or Section 302
of ERISA or Section 412 of the Code.

 

“ERISA Event” means (i) the occurrence of a “reportable
event” described in Section 4043 of ERISA (other than a “reportable event”
not subject to the provisions for 30-day notice to the PBGC) or (ii) the
provision or filing of a notice of intent to terminate a Plan other than in a
standard termination within the meaning of Section 4041 of ERISA or the
treatment of a Plan amendment as a distress termination under Section 4041
of ERISA, or (iii) the institution of proceedings to terminate a Plan by
the PBGC, or (iv) the existence of any “accumulated funding deficiency” or
“liquidity shortfall” (within the meaning of Section 302 of ERISA or Section 412
of the Code), whether or not waived, or (v) the occurrence or existence of
any other event or condition which might reasonably be expected to constitute
grounds for the termination of, or the appointment of a trustee to administer,
any Plan other than in a standard termination within the meaning of Section 4041
of ERISA or the imposition of any lien on the assets of Borrower under ERISA,
including as a result of the operation of Section 4069 of ERISA.

 

“Event of Default” has the meaning set forth in
Section 7.1.

 

“Exception Report” means the report prepared by Borrower and
attached to this Agreement as Schedule B, setting forth any exceptions
to the representations set forth in Article IV.

 

“Excess Transfer Proceeds” means Net Proceeds arising from the
Transfer of a Property to the extent such Net Proceeds exceed the applicable
Release Price.

 

“Extension Interest Rate Cap Agreement” means an interest rate
cap confirmation between an Acceptable Counterparty and Borrower, relating to
the Extension Term, which is, at all times, in substantially the form of Exhibit C
(together with an interest rate cap agreement and schedules relating thereto,
which are consistent in form and substance with the terms set forth in such
confirmation).

 

“Extension Term” has the meaning set forth in Section 1.2(b).

 

“Fiscal Quarter” means the three-month period ending on March 31,
June 30, September 30 and December 31 of each year, or such
other fiscal quarter of Borrower as

 

10

 

Borrower may select from time to time with the prior consent of Lender,
such consent not to be unreasonably withheld.

 

“Fiscal Year” means the 12-month period ending on December 31
of each year, or such other fiscal year of Borrower as Borrower may select from
time to time with the prior consent of Lender, not to be unreasonably withheld.

 

“Fitch” means Fitch, Inc. and its successors.

 

“Force Majeure” means a delay due to acts of God, governmental
restrictions, stays, judgments, orders, decrees, enemy actions, civil
commotion, fire, casualty, strikes, work stoppage, shortages of labor or
materials or similar causes beyond the reasonable control of Borrower; provided
that, with respect to any of such circumstances, for the purposes of this
Agreement, (1) any period of Force Majeure shall apply only to performance
of the obligations necessarily affected by such circumstance and shall continue
only so long as Borrower is continuously and diligently using all reasonable
efforts to minimize the effect and duration thereof; and (2) Force Majeure
shall not include the unavailability or insufficiency of funds.

 

“Form W-8BEN” means Form W-8BEN (Certificate of
Foreign Status of Beneficial Owner for United States Tax Withholding) of the
Department of Treasury of the United States of America, and any successor form.

 

“Form W-8ECI” means Form W-8ECI (Certificate of
Foreign Person’s Claim for Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of America, and
any successor form.

 

“GAAP” means generally accepted accounting principles in the
United States of America, consistently applied, or such other method of
accounting used by Borrower for books and records which is reasonably
acceptable to Lender.

 

“Governmental Authority” means any federal, state, county,
regional, local or municipal government, any bureau, department, agency or
political subdivision thereof and any Person with jurisdiction exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government (including any court).

 

“Ground Lease” means, with respect to each Property, any ground
lease (but not a space lease) encumbering such Property or otherwise creating
the interest of Borrower or its applicable Affiliate therein, which ground
leases are more fully described on Schedule V, as such ground lease may
be modified or replaced from time to time in accordance herewith.

 

“Ground Leased Parcel” means, with respect to each Property, any
portion of such Property with respect to which Borrower or its applicable
Affiliate is the lessee under a Ground Lease.

 

“Ground Rent” means rent payable pursuant to a Ground Lease, if
any.

 

11

 

“Guaranty” means that certain guaranty, dated as of the Closing
Date, executed by Sponsor for the benefit of Lender.

 

“Hazardous Substances” means any and all substances (whether
solid, liquid or gas) defined, listed, or otherwise classified as pollutants,
hazardous wastes, hazardous substances, hazardous materials, extremely
hazardous wastes, toxic substances, toxic pollutants, contaminants, pollutants
or words of similar meaning or regulatory effect under any present or future
Environmental Laws or that may have a negative impact on human health or the
environment or the presence of which on, in or under any of the Properties is
prohibited under Environmental Law, including petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, lead and
radon, and compounds containing them (including gasoline, diesel fuel, oil and
lead-based paint), and radioactive materials, flammables and explosives and
compounds containing them, but excluding substances of kinds and in amounts
which may ordinarily and customarily be used or stored in bank branch or office
properties (as the case may be) of the same quality as the Property as of the
date hereof for the purposes of cleaning or other maintenance or operations or
otherwise ordinarily found in bank branch or office properties (as the case may
be) of the same quality as the Property as of the date hereof and otherwise in compliance
in all material respects with all Environmental Laws.

 

“Increased
Costs” has the meaning set forth in Section 1.6.

 

“Indebtedness” means the Principal Indebtedness, together with
interest and all other obligations and liabilities of Borrower under the Loan
Documents, including all transaction costs and other amounts due or to become
due to Lender pursuant to this Agreement, under the Notes or in accordance with
any of the other Loan Documents, and all other amounts, sums and expenses
reimbursable by Borrower to Lender hereunder or pursuant to the Notes or any of
the other Loan Documents.

 

“Indemnified Liabilities” has the meaning set forth in Section 9.19(b).

 

“Indemnified Parties” has the meaning set forth in Section 5.18.

 

“Indenture” means that certain Indenture, dated as of July 9,
2004, by and between AFRT, as issuer, and Deutsche Bank Trust Company Americas,
as trustee, as supplemented by that certain First Supplemental Indenture, dated
as of October 1, 2004, that certain Second Supplemental Indenture, dated
as of December 29, 2004, and that certain Third Supplemental Indenture,
dated as of April 1, 2008, as amended or otherwise modified from time to
time with the prior reasonable consent of Lender.

 

“Indenture Reserve Account” has the meaning set forth in Section 3.5.

 

“Indenture Reserve Amount” means $456,912,500.

 

“Independent Director” of any corporation or limited liability
company means an individual who is duly admitted as an independent member of
Borrower or appointed as a member of the board of directors, board of managers
or other governing body of such corporation or limited liability company or, in
the case of a limited liability company, is a

 

12

 

member of such limited liability company and who is not, and has never
been, and will not while serving as Independent Director, be any of the
following:

 

(i)                                     a partner, equityholder, manager,
director, officer or employee of Borrower, any Single-Purpose Equityholder, any
Property Owner or any of their respective equityholders or Affiliates (other
than as an independent member, director or manager of an Affiliate of Borrower,
any Property Owner or any Single-Purpose Equityholder that is not in the direct
chain of ownership of Borrower and that is required by a creditor to be a
single purpose bankruptcy remote entity, provided that such independent
director or manager is employed by a company that routinely provides
professional independent directors or managers);

 

 (ii)                               a creditor, supplier or service provider
(including provider of professional services) to Borrower, any Property Owner,
any Single-Purpose Equityholder or any of their respective equityholders or
Affiliates (other than a company that routinely provides professional
independent managers or directors and which also provides lien search and other
similar services to Borrower, any Property Owner  any Single-Purpose Equityholder or any of
their respective equityholders or Affiliates in the ordinary course of
business);

 

(iii)                               a family member of any such member,
partner, equityholder, manager, director, officer, employee, creditor, supplier
or service provider; or

 

(iv)                              a Person that controls (whether directly,
indirectly or otherwise) any of (i), (ii) or (iii) above.

 

“Initial Interest Rate Cap Agreement” means an interest rate cap
confirmation between an Acceptable Counterparty and Borrower, relating to the
initial term of the Loan, which is, at all times, in substantially the form of Exhibit C
(together with an interest rate cap agreement and schedules relating thereto,
which are consistent in form and substance with the terms set forth in such
confirmation).

 

“Insurance Requirements” means, collectively, (i) all
material terms of any insurance policy required pursuant to this Agreement and (ii) all
material regulations and then-current standards applicable to or affecting any
of the Properties or any portion thereof or any use or condition thereof, which
may, at any time, be recommended by the board of fire underwriters, if any,
having jurisdiction over any of the Properties, or any other body exercising
similar functions.

 

“Interest Accrual
Period” means, with respect to any
specified Payment Date, the period from and including the 15th day of the
calendar month preceding such specified Payment Date to but excluding the 15th
day of the calendar month containing such specified Payment Date; provided
that, prior to a Securitization, Lender shall have the right, in connection
with a change in the Payment Date in accordance with the definition thereof, to
make a corresponding change to the Interest Accrual Period provided same has no
adverse effect on Borrower in more

 

13

 

than a de minimis extent. 
Notwithstanding the foregoing, the first Interest Accrual Period shall
commence on and include the Closing Date.

 

“Interest Determination Date” means, in connection with the
calculation of interest accrued for any Interest Accrual Period, the second
Business Day preceding the first day of such Interest Accrual Period.

 

“Interest Rate Cap Agreements” means collectively, the Initial
Interest Rate Cap Agreement and any Extension Interest Rate Cap Agreements.

 

“Joint Venture Cash Flow” has the meaning set forth in Section 3.5(b).

 

“Joint Venture Owner” means each joint venture that directly or
indirectly owns a Joint Venture Property.

 

“Joint Venture Property” means, individually or collectively, as
the context may require, each Property subject, directly or indirectly, to
a  Qualified Joint Venture Agreement as
listed on Schedule P, as modified from time to time to reflect any
Transfer permitted pursuant to Section 6.3(b) or Section 2.2
and any additional joint venture permitted hereunder (including pursuant to Section 2.3).

 

“Lease” means any lease, license, letting, concession, occupancy
agreement, sublease to which Borrower is a party or has a consent right, or
other agreement (whether written or oral and whether now or hereafter in
effect) under which Borrower or a Property Owner is a lessor, existing as of
the Closing Date or hereafter entered into by Borrower or Property Owner, in
each case 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 any of the
Properties, and every modification or amendment thereof, and every guarantee of
the performance and observance of the covenants, conditions and agreements to
be performed and observed by the other party thereto.

 

“Lease Term Sheet”
has the meaning set forth in Section 5.7(b).

 

“Leasing Commissions” means leasing commissions required to be
paid by Borrower or its Affiliates in connection with the leasing of space to
Tenants at any of the Properties pursuant to Leases either in effect on the
date hereof or entered into by Borrower or its Affiliates in accordance
herewith and payable in accordance with third-party/arm’s-length brokerage
agreements, provided that the commissions payable pursuant thereto are
commercially reasonable based upon the then current brokerage market for
property of a similar type and quality to such Property in the geographic
market in which such Property is located.

 

“Legal Requirements” means all governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities (including Environmental Laws)
affecting Borrower, any Property Owner, the Collateral or any of the Properties
or any portion of or the construction, ownership, use, alteration or operation
of, or any portion of any Property (whether now or hereafter enacted and in
force), and all permits, licenses and authorizations and regulations relating
thereto.

 

14

 

“Lender” has the meaning set forth in the first paragraph of
this Agreement and in Section 9.7.

 

“Letter of
Credit” shall mean an irrevocable, unconditional, freely transferable,
clean sight draft evergreen letter of credit in favor of Lender, with respect
to which Borrower has no reimbursement obligation, 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.

 

“LIBOR”
means the rate per annum calculated as set forth below:

 

(i)            On each Interest Determination Date,
LIBOR for the applicable period will be the rate for deposits in United States
dollars for a one-month period which appears as the London interbank offered
rate on the display designated as “LIBOR01” on the Reuters Screen (or such other page as may replace that page on
that service, or such page or replacement therefor on any successor service) as the London
interbank offered rate as of 11:00 a.m., London time, on such date.

 

(ii)           With respect to an Interest
Determination Date on which no such rate appears as the London interbank
offered rate on “LIBOR01” on the Reuters Screen (or such other page as may replace that page on that service,
or such page or replacement therefor on any successor service) as
described above, LIBOR for the applicable period will be determined on the
basis of the rates at which deposits in United States dollars are offered by
the Reference Banks at approximately 11:00 a.m., London time, on such date
to prime banks in the London interbank market for a one-month period (each a “Reference
Bank Rate”).  Lender shall request
the principal London office of each of the Reference Banks to provide a
quotation of its Reference Bank Rate.  If
at least two such quotations are provided, LIBOR for such period will be the
arithmetic mean of such quotations.  If
fewer than two quotations are provided, LIBOR for such period will be the
arithmetic mean of the rates quoted by major banks in New York City, selected
by Lender, at approximately 11:00 a.m., New York City time, on such date
for loans in United States dollars to leading European banks for a one-month
period.

 

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

 

All
percentages resulting from any calculations or determinations referred to in
this definition will be rounded upwards to the nearest multiple of 1/100 of 1%
and all U.S. dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent or more being rounded upwards).

 

“LIBOR Strike Rate” means (1) with respect
to the Initial Interest Rate Cap Agreement, 5.25%; and (2) with respect to
any Extension Interest Rate Cap Agreement, the lesser of (x) 6% and (y) the
interest rate that would result in a DSCR of 1.0x as of the first day of the
Extension Term.

 

15

 

“Lien” means any mortgage, lien (statutory or other), pledge,
hypothecation, assignment, preference, priority, security interest, or any
other encumbrance or charge on or affecting any Collateral or any portion
thereof, or any Encumbered Property, or any interest therein (including any
conditional sale or other title retention agreement, any sale-leaseback, any
financing lease or similar transaction having substantially the same economic
effect as any of the foregoing, the filing of any financing statement or
similar instrument under the Uniform Commercial Code or comparable law of any
other jurisdiction, domestic or foreign, and mechanics’, materialmen’s and
other similar liens and encumbrances, as well as any option to purchase, right
of first refusal, right of first offer or similar right).

 

“Loan” has the meaning set forth in Section 1.1.

 

“Loan Amount” means $600,000,000.

 

“Loan Documents” means this Agreement, each of the Notes, the
Assignment of Interest Rate Cap Agreement, each of the Environmental
Indemnities, each of the Subordination of Property Management Agreements, the
Cash Management Agreement, the Pledge Agreement, the Upper Tier Pledge, any
Blocked Account Agreement, the Cooperation Agreement, the Guaranty, any Letter
of Credit and all other agreements, instruments, certificates and documents
necessary to effectuate the granting to Lender of first-priority Liens on the
Collateral or otherwise in satisfaction of the requirements of this Agreement
or the other documents listed above, as all of the aforesaid may be modified or
replaced from time to time in accordance herewith.

 

“Loss
Proceeds” means amounts, awards or payments payable to Borrower or its
Affiliates, any Property Owner, Mortgage Lender or Lender in respect of all or
any portion of any of the Properties in connection with a Casualty or
Condemnation thereof (after the deduction therefrom and payment to Borrower or
its Affiliates, any Property Owner, Mortgage Lender and Lender, respectively,
of any and all reasonable expenses incurred by Borrower or its Affiliates and
Lender in the recovery thereof, including all attorneys’ fees and
disbursements, the fees of insurance experts and adjusters and the costs
incurred in any litigation or arbitration with respect to such Casualty or
Condemnation).

 

“Loss Proceeds Account” has the meaning set
forth in Section 3.3(a).

 

“Major Lease” means the Lease covering the Dana Portfolio on the
date hereof, as amended or modified in accordance herewith, and any Lease which
(i) when aggregated with all other Leases at the applicable Property with
the same Tenant (or affiliated Tenants), and assuming the exercise of all
expansion rights and all preferential rights to lease additional space
contained in each such Lease, is expected to contribute more than 7.5% of Net
Operating Income during any 12-month period (after adjustment to eliminate the
effect of free rent periods), (ii) is with an Affiliate of Borrower or a
Property Owner as Tenant, or (iii) is entered into during the continuance
of an Event of Default.

 

“Material Adverse Effect” means a material adverse effect upon (i) the
ability of Borrower or any Property Owner to perform, or of Lender or Mortgage
Lender to enforce, any

 

16

 

material provision of any Loan Document or any Encumbered Debt
Document, as the case may be, (ii) the enforceability of any material
provision of any Loan Document, or (iii) the value, Net Operating Income,
use or enjoyment of any of the Properties or the operation thereof.

 

“Material Agreements” means (x) the Indenture and each
contract and agreement (other than the Leases, the Ground Leases, the Approved
Management Agreement, the Encumbered Property Debt Documents, brokerage and
leasing agreements negotiated at arm’s length and the Loan Documents) relating
to a Property, or otherwise imposing obligations on Borrower or any Property
Owner, under which Borrower or any Property Owner would have the obligation to
pay more than $1,000,000 per annum and which cannot be terminated by Borrower
or any Property Owner without cause upon 90 days’ notice or less without
payment of a termination fee or, in any case, with respect to any covenant
contained herein (but not with respect to any representation), imposing obligations
on Borrower or any Property Owner under which it would have the obligation to
pay more than $5,000,000 per annum, regardless of Borrower’s or any Property
Owner’s right to terminate same, or which is with an Affiliate of Borrower or
any Property Owner, and (y) to the extent the existence, breach or
termination of same might have a Portfolio Material Adverse Effect, any
reciprocal easement agreement, declaration of covenants, material parking
agreement, condominium documents, or other material Permitted Encumbrance.

 

“Material Alteration” means any Alteration to be performed by or
on behalf of Borrower or any Property Owner at any of the Properties which (a) is
reasonably likely to have a Material Adverse Effect with respect to the
applicable Property, (b) when aggregated with all contemporaneous
Alterations at the Properties is reasonably expected to cost in excess of
$20,000,000, or (c) is reasonably expected to permit (or is reasonably
likely to induce) any Tenant under a material Lease to terminate its Lease or
abate rent.

 

“Maturity Date” means the maturity date of the Loan as set forth
in Section 1.2.

 

“Merger” means the transactions contemplated by the Merger
Agreement.

 

“Merger Agreement” means that certain Agreement and Plan of
Merger, dated as of November 2, 2007, among Sponsor, GKK Capital LP, AFRT
Owner, and the other parties thereto, with only such modifications thereto as
have been agreed in writing by Lender.

 

“Minimum Balance” has the meaning set forth in Section 3.2(a).

 

“Moody’s” means Moody’s Investors Service, Inc.
and its successors.

 

“Mortgage” means, with respect to each Mortgage Loan Collateral
Property, that certain mortgage, deed of trust or deed to secure debt, as the
case may be, encumbering such Mortgage Loan Property, executed by Mortgage Loan
Property Owner as of the Closing Date, as the same may from time to time be
modified or replaced in accordance herewith.

 

“Mortgage Lender” means Goldman Sachs Commercial Mortgage
Capital, L.P, Citigroup Global Markets Realty Corp. and SL Green Realty Corp,
and their respective successors and assigns.

 

17

 

“Mortgage Loan” means that certain Loan in the original
principal amount of $250,000,000 from Mortgage Lender to Mortgage Loan Property
Owner.

 

“Mortgage Loan Agreement” means that certain Loan Agreement,
dated as of the date hereof, between Mortgage Lender and the Mortgage Loan
Property Owners, as same may be amended or modified from time to time with the
consent of Lender.

 

“Mortgage Loan Cash Management Account” means the “Cash
Management Account” under and as defined in the Mortgage Loan Agreement.

 

“Mortgage Loan Principal Indebtedness” means, from time to time,
the outstanding principal balance of the Mortgage Loan.

 

“Mortgage Loan Collateral Properties” means the real property
described on Schedule A-1, together with all buildings and other
improvements thereon, as modified from time to time to reflect any Transfer
permitted pursuant to Section 2.2.

 

“Mortgage Loan Property Owner” means each borrower under the
Mortgage Loan.

 

“Mortgage Loan Property Owner Equity” means 100% of the direct
equity interests in each Mortgage Loan Property Owner as set forth in the
Pledge Agreement, as modified from time to time to reflect any Transfer permitted
pursuant hereto.

 

“Mortgage Loan Property Owner Pledgor” means, individually or
collectively, as the context may require, each owner of Mortgage Loan Property
Owner Equity, as set forth on Schedule I, as modified from time to time
to reflect any Transfer permitted pursuant hereto.

 

“Net Lease” means each of the Leases listed on Schedule N.

 

“Net Operating Income” means, with
respect to any Test Period, the excess of (i) Operating Income for such
Test Period, minus (ii) Operating Expenses for such Test Period.

 

“Net Proceeds” means, in connection with the sale or disposition
to an unaffiliated third party in an arms’-length transaction, 100% of the
proceeds of such sale or disposition, net of any repayment of any Encumbered
Property Debt (including any prepayment or release premiums) that is required
to be and actually is repaid in connection therewith, and ordinary and
customary closing costs payable to unaffiliated third parties, limited in the
case of Joint Venture Properties and any joint venture entered into in
connection with the Transfer of any portion of the Value Add Pool Equity
pursuant to Section 2.3 to the portion of such net proceeds payable
to Borrower or its Affiliates pursuant to the applicable Qualified Joint
Venture Agreement in effect on the date hereof or as hereafter amended with
Lender’s reasonable consent (Borrower agreeing that it shall be reasonable for
Lender to withhold its consent in connection with any amendment that would
result in a reduction of Borrower’s percentage interest in (except in
connection with a Transfer permitted hereunder), or control rights over, any
Joint Venture Property or otherwise result in a Material Adverse Effect).

 

18

 

“New Borrower Entity” means a Single Purpose Entity 100% of the
equity interests in which are directly or indirectly owned by Sponsor and 100%
of the direct equity interests in which are pledged to Lender in a manner
reasonably satisfactory to Lender (including the delivery, at Borrower’s expense,
of UCC insurance with respect to such pledge), which Single Purpose Entity: (i) shall
have executed and delivered to Lender an assumption agreement, in form and
substance reasonably acceptable to Lender, evidencing its agreement to abide
and be bound by the terms of the Loan Documents and containing representations
substantially equivalent to those contained in Article IV, and such
other representations (and evidence of the accuracy of such representations) as
the Lender shall reasonably request; (ii) shall have delivered such
Uniform Commercial Code financing statements as may be reasonably requested by
Lender; (iii) if requested by Lender, shall have delivered to Lender legal
opinions of counsel reasonably acceptable to Lender which are equivalent to the
opinions delivered to Lender on the Closing Date, including new enforceability,
authorization and nonconsolidation opinions which are reasonably satisfactory
to Lender and satisfactory to each of the Rating Agencies; and (iv) shall
have delivered to Lender all documents reasonably requested by it relating to
the existence of such New Borrower Entity and the due authorization of such New
Borrower Entity to assume the Loan and to execute and deliver any related
documents, each in form and substance reasonably satisfactory to Lender.

 

“Nonconsolidation Opinion” means the opinion letter, dated the
Closing Date, delivered by Borrower’s counsel to Lender and addressing issues
relating to substantive consolidation in bankruptcy.

 

“Normalized Capital Expenditures” means anticipated annual
Capital Expenditures at the Properties, as reasonably determined by Lender,
based on historical Capital Expenditures at the Properties during the initial
term of the Loan (taking into account any amounts actually reimbursed in
respect of Capital Expenditures under Leases).

 

“Note” means that certain promissory note, dated as of the
Closing Date, made by Borrower to the order of Lender to evidence the Loan, as
such note may be replaced by multiple Notes or divided into multiple Note
Components in accordance with Section 1.3(c) and as otherwise
modified, assigned (in whole or in part) and/or replaced from time to time in
accordance herewith.

 

“Note Component” has the meaning set forth in Section 1.3(c).

 

“OFAC List” means the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and any other similar
list maintained by the U.S. Treasury Department, Office of Foreign Assets
Control pursuant to any applicable governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities, including, without limitation, trade embargo, economic sanctions,
or other prohibitions imposed by Executive Order of the President of the United
States.  The OFAC List currently is
accessible through the internet website at www.treas.gov/ofac/t11sdn.pdf.

 

19

 

“Officer’s Certificate” means a certificate delivered to Lender
which is signed by an authorized officer of Borrower and certifies the
information therein to such officer’s knowledge.

 

“Operating Expenses” means, for any period, all
operating, renting, administrative, management, legal and other ordinary
expenses of Borrower and, without duplication, Property Owners, during such
period (other than those relating to the Disposition Assets and each other
Property whose Release Price is zero), determined in accordance with GAAP; provided,
however, that such expenses shall not include (i) depreciation,
amortization or other noncash items (other than expenses that are due and
payable but not yet paid), (ii) interest, principal or any other sums due
and owing with respect to the Loan, (iii) income taxes or other taxes in
the nature of income taxes, (iv) Capital Expenditures, or (v) equity
distributions.

 

“Operating Income” means, for any period, all operating income
of Borrower and, without duplication, Property Owners, from each of the
Properties (other than the Disposition Assets and each other Property whose
Release Price or Aggregate Allocated Loan Amount is zero) during such period,
determined in accordance with GAAP (but without straight-lining of rents),
other than (i) Loss Proceeds (but Operating Income will include rental
loss insurance proceeds to the extent allocable to such period), (ii) any
revenue attributable to a Lease to the extent it is paid more than 30 days
prior to the due date, (iii) any interest income from any source, (iv) any
repayments received from any third party of principal loaned or advanced to
such third party by Borrower, (v) any proceeds resulting from the Transfer
of all or any portion of such Property, (vi) sales, use and occupancy or
other taxes on receipts required to be accounted for by Borrower to any
government or governmental agency, (vii) termination fees, and (viii) any
other extraordinary or non-recurring items.

 

“Other Ground Lease Collateral” means the equity interests in
the Persons listed on Schedule M in the percentages set forth thereon,
as modified from time to time to reflect any Transfer permitted hereunder.

 

“Other Equity Pledgor” means, individually or collectively, as
the context may require, each owner of Other Ground Lease Collateral as set
forth on Schedule M.

 

“Other Properties” means, collectively, each
Property that is not a Mortgage Loan Collateral Property.

 

“Par
Prepayment Date” means the first Payment Date following the 6-month
anniversary of the Closing Date.

 

“Parcel
Release Price” has the meaning
set forth in Exhibit I.

 

“Participation” has the meaning set forth in Section 9.7(b).

 

“Payment Date” means the 9th day of each month (or,
if such 9th day is not a Business Day, the first preceding Business
Day); provided, that, prior to a Securitization, Lender shall have the
right to change the Payment Date so long as a corresponding change to the
Interest

 

20

 

Accrual Period is also made and same has no adverse effect on Borrower
in more than a de minimis extent. 
Notwithstanding the foregoing, the Maturity Date shall be the second to
last Business Day of the Interest Accrual Period in which the Maturity Date
falls.

 

“Permits” means all licenses, permits, variances and
certificates used in connection with the ownership, operation, use or occupancy
of each of the Properties (including certificates of occupancy, business
licenses, state health department licenses, licenses to conduct business and
all such other permits, licenses and rights, obtained from any Governmental
Authority or private Person concerning ownership, operation, use or occupancy
of such Property).

 

“Permitted Affiliate Sale” means the sale of a Property to an
Affiliate of Borrower that is not itself a Borrower, which Affiliate’s immediate
intention is to materially redevelop such Property as evidenced by an Officer’s
Certificate submitted to Lender describing such redevelopment in reasonable
detail; provided, however, no such sale shall be a “Permitted
Affiliate Sale” if, after giving effect thereto, the sum of the Allocated Loan
Amounts of all Properties subject to Permitted Affiliate Sales from and after
the Closing Date would exceed $25,000,000.

 

“Permitted Debt” means:

 

(i)            the Indebtedness;

 

(ii)           Trade Payables not represented by a
note, customarily paid by Borrower within 60 days of incurrence and in fact not
more than 60 days outstanding, which are incurred in the ordinary course of
Borrower’s ownership and operation of the Properties, in amounts reasonable and
customary for similar Properties and not exceeding 2.0% of the Loan Amount in
the aggregate;

 

(iii)          the Encumbered Property Debt, to the
extent that there is no increase in the principal amount thereof from the
principal balance as of the date hereof (after giving effect to any prepayments
made on the date hereof) or any material amendment to any Encumbered Property
Debt Document without Lender’s prior written consent;

 

(iv)          refinancings of Encumbered Property
Debt on terms not materially more onerous (including as to interest rate,
transfer restrictions, amortization, prepayment provisions and cash trap
provisions) as the Encumbered Property Debt being refinanced, provided
that, in the case of each such refinancing, (x) the applicable Encumbered
Property Lender enter into an intercreditor agreement with Lender in form and
substance reasonably satisfactory to Lender (the Form of Intercreditor
Agreement attached hereto as Exhibit F is hereby deemed to be
reasonably satisfactory to Lender), (y) Lender is granted a perfected
first-priority pledge of 100% of the equity interests in the entity owning the
Encumbered Property securing the Encumbered Property Debt being so refinanced,
and (z) if any such refinancing is in a principal amount greater than the
Encumbered Property Debt being refinanced, then 100% of the increase (without

 

21

 

reduction for transaction, prepayment, defeasance or
other expenses) is applied toward prepayment of the Loan in accordance with Section 2.1
hereof;

 

(v)           the Mortgage Loan; and.

 

(vi)          until July 20,
2009, and subject to Section 3.5, 
obligations under the Indenture.

 

“Permitted Encumbrances” means:

 

(i)            the Liens created by the Loan
Documents and the Encumbered Property Debt Documents;

 

(ii)           all Liens and other matters
specifically disclosed on Schedule B of the Qualified Title Insurance Policy;

 

(iii)          Liens, if any, for Taxes not yet
delinquent;

 

(iv)          mechanics’,
materialmen’s or similar Liens, if any, and Liens for delinquent taxes or
impositions, in each case only if being contested in good faith and by
appropriate proceedings, provided that no such Lien is in imminent
danger of foreclosure and provided  further that either (a) each
such Lien is released or discharged of record or fully insured over by the
title insurance company issuing the Qualified Title Insurance Policy within 60
days of its creation, or (b) Borrower deposits with Lender, by the
expiration of such 60-day period, an amount equal to 115% of the dollar amount
of such Lien or a bond in the aforementioned amount from such surety, and upon
such terms and conditions, as is reasonably satisfactory to Lender, as security
for the payment or release of such Lien (such 60-day period shall be extended
to 90 days with respect to any such Lien that is caused by a Tenant, provided
Borrower exercises commercially reasonable efforts during such 90-day period to
cause such Tenant to remove such Lien or provide the bond described above);

 

(v)           rights of existing Tenants under
Leases heretofore disclosed to Lender, and the rights of future Tenants and
subtenants as tenants only pursuant to written Leases entered into in
conformity with the provisions of this Agreement; and

 

(vi)          easements and other customary
encumbrances customarily encumbering like properties and entered into in the
ordinary course of business, to the extent such easements or encumbrances do
not result in a Material Adverse Effect.

 

“Permitted Investments” means the following, subject to the
qualifications hereinafter set forth:

 

(i)            obligations of, or
obligations guaranteed as to principal and interest by, the U.S. government or
any agency or instrumentality thereof, when such obligations are backed by the
full faith and credit of the United States of America;

 

22

 

(ii)           federal funds,
unsecured certificates of deposit, time deposits, banker’s acceptances, and
repurchase agreements having maturities of not more than 365 days of any bank,
the short-term debt obligations of which are rated A-1+ (or the equivalent) by
each of the Rating Agencies and, if it has a term in excess of three months,
the long-term debt obligations of which are rated AAA (or the equivalent) by
each of the Rating Agencies;

 

 (iii)         deposits that are fully insured by the Federal Deposit
Insurance Corp. (FDIC);

 

(iv)          debt obligations
that are rated AAA or higher (or the equivalent) by each of the Rating
Agencies;

 

(v)           commercial paper
rated A–1+ (or the equivalent) by each of the Rating Agencies;

 

(vi)          investment in money
market funds rated AAAm or AAAm–G (or the equivalent) by each of the Rating
Agencies; and

 

(vii)         such other
investments as to which Lender shall have received Rating Confirmation.

 

Notwithstanding
the foregoing, “Permitted Investments” (i) shall exclude any security with
the Standard & Poor’s “r” symbol (or any other Rating Agency’s
corresponding symbol) attached to the rating (indicating high volatility or
dramatic fluctuations in their expected returns because of market risk), as
well as any mortgage-backed securities and any security of the type commonly
known as “strips”; (ii) shall not have maturities in excess of one year; (iii) shall
be limited to those instruments that have a predetermined fixed dollar of
principal due at maturity that cannot vary or change; and (iv) shall
exclude any investment where the right to receive principal and interest
derived from the underlying investment provides a yield to maturity in excess
of 120% of the yield to maturity at par of such underlying investment.  Interest may either be fixed or variable, and
any variable interest must be tied to a single interest rate index plus a
single fixed spread (if any), and move proportionately with that index.  No investment shall be made which requires a
payment above par for an obligation if the obligation may be prepaid at the
option of the issuer thereof prior to its maturity.  All investments shall mature or be redeemable
upon the option of the holder thereof on or prior to the earlier of (x) three
months from the date of their purchase or (y) the Business Day preceding
the day before the date such amounts are required to be applied hereunder.

 

“Permitted TRS Contribution Agreement” means a
contribution agreement substantially in the form of the contribution agreement
attached as Exhibit H.

 

“Permitted TRS Entity” means a Person that
becomes a Mortgage Borrower under the Mortgage Loan , fulfills the requirements
of a “New Borrower Entity” under and as defined in the Mortgage Loan Agreement
and is formed solely for the purpose of entering into one or more Permitted TRS
Contribution Agreements and matters directly relating thereto.

 

23

 

“Person” means any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated association
or Governmental Authority and any fiduciary acting in such capacity on behalf
of any of the foregoing.

 

“Plan” means any employee benefit plan (as defined in Section 3(3) of
ERISA) subject to Title IV or Section 302 of ERISA or Section 412 of
the Code.

 

“Plan Assets” means assets of any (i) employee benefit plan
(as defined in Section 3(3) of ERISA) subject to Title I of
ERISA or (ii) plan (as defined in Section 4975(e)(1) of the
Code) subject to Section 4975 of the Code.

 

“Pledge Agreement” means that certain Pledge and Security
Agreement, dated as of the date hereof, by the owners of the Required Equity
Pledgors for the benefit of Lender.

 

“Policies” has the meaning set forth in Section 5.15(b).

 

“Portfolio Material Adverse Effect” means a
material adverse effect upon (i) the ability of Borrower to perform, or of
Lender to enforce, any material provision of any Loan Document, (ii) the
enforceability of any material provision of any Loan Document, or (iii) the
value, Net Operating Income, use or enjoyment of the Properties or the
operation thereof, in each case, taken as a whole.

 

“Prepayment
Fee” shall mean, with respect to any prepayment received
by Lender prior to the Par Prepayment Date (other than with respect to a
prepayment pursuant to Section 2.1(c)(i), (ii) and (iii)),
any prepayment associated with the release of a Disposition Asset or any
release in connection with a Casualty or Condemnation pursuant to Section 5.16(d)),
an amount equal to 1.0% of the principal amount prepaid.

 

“Prime Rate” means the “prime rate” published in the “Money
Rates” section of The Wall Street Journal.  If The Wall Street Journal ceases to
publish the “prime rate,” then Lender shall select an equivalent publication
that publishes such “prime rate,” and if such “prime rate” is no longer
generally published or is limited, regulated or administered by a governmental
or quasi-governmental body, then Lender shall reasonably select a comparable
interest rate index.

 

“Principal Indebtedness” means the principal balance of the Loan
outstanding from time to time.

 

“Properties” means, collectively, all real property from time to
time owned or leased directly or indirectly by AFRT, including without
limitation the Encumbered Properties and the Mortgage Loan Collateral
Properties, together with all buildings and improvements thereon.  As used herein, “Property” means any of the
individual Properties.  Any reference
herein to a Transfer of a Property shall mean a Transfer of such Property or of
the direct or indirect equity interests therein (other than a Transfer of a
direct or indirect equity interest in Sponsor).

 

24

 

“Property Owner” means, individually or collectively, as the
context may require, each owner from time to time of a Property.  The current Property Owners are listed on Schedule
I.

 

“Qualified Joint Venture Agreement” means a (x) joint
venture agreement entered into prior to the date hereof and described in Schedule
K, (y) any joint venture agreement relating to a Value Add Pool
Property entered into pursuant to Section 2.3, and (z) a joint
venture agreement hereafter entered into pursuant to Section 6.3(b) that
(i) provides Lender with the right to force a sale or similar liquidation
of the assets of the joint venture following a foreclosure or transfer-in-lieu
of foreclosure on the equity interests pledged to Lender subject to customary
rights of first offer or appraisal sale or other similar rights reasonably
acceptable to Lender, (ii) provides to Borrower or its Affiliate (and,
after a foreclosure or transfer-in-lieu of foreclosure on the equity interests
pledged to Lender subject to customary rights of first offer, appraisal sale or
other similar rights reasonably acceptable to Lender, provides to Lender) the
right to control the joint venture, subject to customary major decisions, (iii) provides
that distributions of operating revenues, capital proceeds and all other income
of the applicable Properties, to the extent available for distribution, shall
be made to the equityholders in proportion to their respective equity
interests, and (iv) is otherwise acceptable to Lender in its reasonable
discretion.

 

“Qualified Survey” means, with respect to each of the Mortgage
Loan Properties, current title surveys of such Mortgage Loan Property,
certified to Borrower, the title company issuing the Qualified Title Insurance
Policy and Lender and their respective successors and assigns, in form and
substance reasonably satisfactory to Lender.

 

 “Qualified Title Insurance
Policy” means (i) with respect to each of the Properties, (x) if
applicable, an ALTA extended coverage mortgagee’s title insurance policy in
form and substance reasonably satisfactory to Lender, together with such
endorsements as Lender shall reasonably request, and (y) an owner’s title
insurance policy in favor of the applicable Mortgage Loan Property Owner
(except that Borrower shall not be required to purchase new or updated owners’
policies) with a “Mezzanine Lender’s Financing Endorsement,” naming Lender as
an additional insured, in form and substance reasonably acceptable to Lender
(or in the alternative, a letter executed by the title company providing
substantially the same benefit to Lender), and (ii) with respect to the
equity pledged to Lender pursuant to the Loan Documents, a UCC insurance policy
insuring Lender’s first-priority security interest in 100% of the  equity pledged to Lender pursuant to the Loan
Documents, and otherwise in form and substance reasonably acceptable to Lender.

 

“Rating Agency”
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 and continue to rate any
of the Certificates.

 

“Rating Confirmation” means, with respect to any proposed
action, confirmation in writing from each of the Rating Agencies that such
action shall not result, in and of itself, in a downgrade, withdrawal or
qualification of any rating then assigned to any outstanding Certificates;
except that if any portion of the Loan shall not have been securitized pursuant
to a

 

25

 

Securitization rated by the Rating Agencies, then “Rating Confirmation”
shall instead mean that the matter in question is subject to the prior written
approval of both (x) the applicable Rating Agencies (if and to the extent
that any portion of the Loan has been securitized pursuant to a Securitization
or series of Securitizations rated by such Rating Agencies), and (y) Lender
in its reasonable discretion (and Borrower agrees that it shall be reasonable
for Lender to withhold such approval, if such proposed action does not satisfy
Rating Agency criteria).  No Rating
Confirmation shall be regarded as having been received unless and until any
conditions imposed on its effectiveness by any Rating Agency shall have been
satisfied.

 

“Reference Banks”  means
four major banks in the London interbank market selected by Lender.

 

“Regulatory Change” means any change after the Closing Date in
federal, state or foreign laws or regulations or the adoption or the making,
after such date, of any interpretations, directives or requests applying to a
class of banks or companies controlling banks, including Lender, of or under
any federal, state or foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof.

 

“Release” with respect to any Hazardous Substance means any
release, deposit, discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Substances into the indoor or outdoor
environment (including the movement of Hazardous Substances through ambient air,
soil, surface water, ground water, wetlands, land or subsurface strata) in
violation of Environmental Law.

 

“Release Parcel” has the meaning set forth Section 2.4.

 

“Release Price” has the meaning set forth in Exhibit I.

 

“Release Price Deficit” means has the meaning specified in Section 2.2(c).

 

“Rent Roll” has the meaning set forth in Section 4.14(a).

 

“Required Equity” means the equity pledged to Lender by Required
Equity Pledgors (or, in the case of First States Group, L.P. and its general
partner, the equity that is subject to the negative covenants contained herein)
pursuant to the Loan Documents.

 

“Required Equity Pledgor” means, individually or collectively,
as the context may require, AFRT Owner, each Value Add Pool Pledgor, each
Encumbered Property Pledgor, each Other Equity Pledgor and each Mortgage Loan
Property Owner Pledgor.

 

“Restricted Cash” means amounts released from collateral
accounts maintained pursuant and subject to Encumbered Debt Documents, except
for reserves for monthly expenses such as tax, insurance, capital expenditure
reserves funded monthly, but including reserves in the nature of deferred
maintenance, interest reserves, reserves for the purpose of credit enhancement
and excess cash reserves; provided that the foregoing shall not be required to
be remitted to

 

26

 

Lender pursuant to the terms hereof at the time of a refinancing of
Encumbered Property Debt if, in connection with such refinancing, the same
shall be required to be maintained in a collateral account pursuant to the
amended or replacement Encumbered Debt Documents entered into in accordance
with the terms hereof.

 

“Revenues” means (i) to the extent attributable to any
Property, all rents, rent equivalents, moneys payable as damages pursuant to a
Lease or in lieu of rent or rent equivalents, royalties (including all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including 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 from any and all sources including any obligations now existing or
hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or
rendering of services by Borrower and proceeds, if any, from business
interruption or other loss of income insurance; provided, however,
that with respect to any Encumbered Property, the foregoing shall not
constitute “Revenues” to the extent that it is subject to the Lien of an
Encumbered Property Loan or is required to be applied to an Encumbered Property
pursuant to Encumbered Property Debt Documents, and (ii) all amounts
released from collateral accounts held by or on behalf of any Encumbered
Property Lender in connection with Encumbered Property Debt, to the extent such
amounts are not required to be applied to an Encumbered Property pursuant to
Encumbered Property Debt Documents.  “Revenues”
shall not include Loss Proceeds applied in accordance with Section 5.16
(other than the proceeds of rental interruption insurance), interest income
(other than interest on amounts contained in the Collateral Accounts), equity
contributions or other amounts to be funded by a member pursuant to Borrower’s
operating agreement and amounts which are received from the Collateral Accounts
in accordance herewith or are otherwise free of the Liens of the Loan Documents
pursuant to the terms hereof.

 

“S&P”
means Standard & Poor’s Ratings Services, a division of the
McGraw-Hill Companies, Inc., and its successors.

 

“Securitization” means a transaction in which all or any portion
of the Loan is deposited into one or more trusts which issue Certificates to
investors, or a similar transaction.

 

“Senior Collateral” means all Collateral secured by a Mortgage
or a first-priority perfected pledge of equity that, in either case, would not
be subordinate (structurally or otherwise) to the Lien of a hypothetical
secured lender (such as a DIP lender) in a hypothetical bankruptcy of AFRT,
Operating Partnership or their respective subsidiaries, other than the Lien of
the Encumbered Property Debt as listed on Schedule O.

 

“Service” means the Internal Revenue Service or any successor
agency thereto.

 

“Servicer” means the entity or entities appointed by Lender from
time to time to serve as servicer and/or special servicer of the Loan.  If at any time no entity is so appointed, the
term “Servicer” shall be deemed to refer to Lender.

 

27

 

“Single Member LLC” means a limited liability company which
either (x) has only one member, or (y) has multiple members, none of
which is a Single-Purpose Equityholder.

 

“Single-Purpose Entity”
means a Person which (a) was formed solely for the purpose of acquiring
and holding (i) in the case of a Property Owner, an ownership interest in
its Property, (ii) in the case of a Required Equity Pledgor, an ownership
interest in its Required Equity or (iii) in the case of a Single-Purpose
Equityholder, an ownership interest in the Borrower, (b) does not engage
in any business unrelated to (i) in the case of a Property Owner, such
Property, (ii) in the case of a Required Equity Pledgor, such Required
Equity or (iii) in the case of a Single-Purpose Equityholder, its
ownership interest in the Borrower, (c) does not have any assets other
than those related to (i) in the case of a Property Owner, such Property, (ii) in
the case of a Required Equity Pledgor, such Required Equity or (iii) in
the case of a Single-Purpose Equityholder, its ownership interest in the
Borrower, (d) does not have any Debt other than, in the case of Borrower,
Permitted Debt, (e) maintains books, accounts, records, financial
statements, stationery, invoices and checks which are separate and apart from
those of any other Person (except that such Person’s financial position,
assets, results of operations and cash flows may be included in the
consolidated financial statements of an Affiliate of such Person in accordance
with GAAP, provided that any such consolidated financial statements
shall contain a note indicating that such Person and its Affiliates are
separate legal entities and maintain records, books of account separate and
apart from any other Person), (f) is subject to and complies with all of
the limitations on powers and separateness requirements set forth in the
organizational documentation of such Person as of the Closing Date, (g) 
holds itself out as being a Person separate and apart from each other Person
and not as a division or part of another Person, (h) conducts its business
in its own name (except for services rendered under a management agreement with
an Affiliate, so long as the manager, or equivalent thereof, under such
management agreement holds itself out as an agent of such Person), (i) exercises
reasonable efforts to correct any known misunderstanding actually known to it
regarding its separate identity, and maintains an arm’s-length relationship
with its Affiliates, (j) pays its own liabilities out of its own funds
(including the salaries of its own employees, if any) and reasonably allocates
any overhead that is shared with an Affiliate, including paying for shared
office space and services performed by any officer or employee of an Affiliate,
(k) maintains a sufficient number of employees in light of its
contemplated business operations, (l) conducts its business so that the
assumptions made with respect to it which are contained in the Nonconsolidation
Opinion shall at all times be true and correct in all material respects, (m) except
as contemplated by the Loan Documents, maintains its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any other Person, (n) observes all applicable corporate
entity-level formalities in all material respects, (o) except as
contemplated by the Loan Documents, does not commingle its assets with those of any other
Person and holds such assets in its own name, (p) except as
contemplated by the Loan Documents, except as set forth in the Encumbered Property Debt
Documents and the Loan Documents, does not assume, guarantee or become
obligated for the debts of any other Person, and does not hold out its credit
as being available to satisfy the obligations or securities of others, (q) does
not acquire obligations or securities of its shareholders, members or partners,
(r) except as contemplated by the Loan Documents, except in connection with the Loan, does
not pledge its assets for the benefit of any other Person and does not make any
loans or advances to any Person, (s) intends to maintain adequate capital
in light of its contemplated business operations,

 

28

 

(t) has two Independent Directors, or, in the case of a limited
partnership, has a Single-Purpose Equityholder with two Independent Directors, (u) has
by-laws or an operating agreement, or, in the case of a limited partnership,
has a Single-Purpose Equityholder with by-laws or an operating agreement, which
provides that, for so long as the Loan is outstanding, such Person shall not
take or consent to any of the following actions except to the extent expressly
permitted in this Agreement and the other Loan Documents:

 

(i)            to the fullest
extent permitted by law, the dissolution, liquidation, consolidation, merger or
sale of all or substantially all of its assets (and, in the case of a
Single-Purpose Equityholder, the assets of the Borrower);

 

(ii)           the engagement by
such Person (and, in the case of a Single-Purpose Equityholder, the engagement
by the Borrower) in, (x) in the case of any Property Owner, any business
other than the acquisition, development, management, leasing, ownership,
maintenance and operation of its Property, and activities incidental thereto, (y) in
the case of any Required Equity Pledgor, any business other than the
acquisition and ownership of its Required Equity, and (iii) in the case of
a Single-Purpose Equityholder, activities incidental to the acquisition and
ownership of its interest in the Borrower;

 

(iii)          the filing, or
consent to the filing, of a bankruptcy or insolvency petition, any general
assignment for the benefit of creditors or the institution of any other
insolvency proceeding, or the seeking or consenting to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar
official in respect of such Person without the affirmative vote of all of its
Independent Directors (and, in the case of a Single-Purpose Equityholder, in
respect of the Borrower without the affirmative vote of both of such
Single-Purpose Equityholder’s Independent Directors); and

 

(iv)          any amendment or
modification of any provision of its (and, in the case of a Single-Purpose
Equityholder, the Borrower’s) organizational documents relating to
qualification as a “Single-Purpose Entity”,

 

and (v) if such entity is a Single Member LLC
that does not have an independent non-equity member, has organizational
documents which provide that upon the occurrence of any event (other than a
permitted equity transfer) that causes its sole member to cease to be a member
while the Loan is outstanding, at least one of its Independent Directors shall
automatically be admitted as the sole member of the Single Member LLC and shall
preserve and continue the existence of the Single Member LLC without
dissolution.

 

“Single-Purpose Equityholder” means a Single-Purpose Entity that
(x) is a limited liability company or corporation formed under the laws of
the State of Delaware, (y) owns at least a 0.5% direct equity interest in
Borrower, and (z) serves as the general partner or managing member of
Borrower.

 

“SNDA” has the meaning set forth in Section 5.7(f).

 

29

 

“Sponsor” means Gramercy Capital Corp., or any successors and
assigns thereof by merger, consolidation, amalgamation, reorganization,
acquisition of all or substantially all of the shares or other ownership
interests in Sponsor, by transfer of all or substantially all of Sponsor’s
assets in a single transaction, or through a similar transaction.

 

“Spread” means:

 

(i)            initially, 4.35%; and

 

(ii)           following the bifurcation of the Note
into multiple Note Components pursuant to Section 1.3(c), the
weighted average of the Component Spreads at the time of determination,
weighted on the basis of the corresponding Component Balances.

 

“Subordination of Property Management Agreement” means that
certain consent and agreement of manager and subordination of management
agreement executed by Borrower and the Approved Property Manager as of the
Closing Date, as the same may from time to time be modified or replaced in
accordance herewith.

 

“Taxes” means all real estate and personal property taxes,
assessments, fees, taxes on rents or rentals, water rates or sewer rents,
facilities and other governmental, municipal and utility district charges or
other similar taxes or assessments now or hereafter levied or assessed or
imposed against the Properties or Borrower with respect to the Properties or
rents therefrom or which may become Liens upon any of the Properties, without
deduction for any amounts reimbursable to Borrower by third parties.

 

“Tenant” means any Person liable by contract or otherwise to pay
monies (including a percentage of gross income, revenue or profits) pursuant to
a Lease.

 

“Tenant Improvements” means, collectively, (i) tenant
improvements to be undertaken for any Tenant which are required to be completed
by or on behalf of Borrower or any Property Owner pursuant to the terms of such
Tenant’s Lease, (ii) tenant improvements paid or reimbursed through  allowances to a Tenant pursuant to such
Tenant’s Lease, and (iii) other similar tenant inducements.

 

“Tenant Notice” has the meaning set forth in Section 3.1(b).

 

“Test Period” means each 12-month period ending on the last day
of a Fiscal Quarter; provided, however, “Test Period” shall mean
the most recently completed calendar quarter, annualized, for calculation of
the “LIBOR Strike Rate”.

 

“Trade Payables” means unsecured amounts payable by or on behalf
of Borrower for or in respect of the operation of the Properties in the
ordinary course and which would under GAAP be regarded as ordinary expenses,
including amounts payable to suppliers, vendors, contractors, mechanics,
materialmen or other Persons providing property or services to the Properties
or Borrower and the capitalized amount of any ordinary-course financing leases.

 

30

 

“Transaction” means, collectively, the Merger
and other transactions contemplated and/or financed by the Loan Documents.

 

“Transfer” means (i) with respect to a Property, the
pledge, sale or other whole or partial conveyance of all or any portion of any
of the Properties or any direct or indirect interest therein, or any direct or
indirect equity interest in the owner thereof, including granting of any
purchase options, rights of first refusal, rights of first offer or similar
rights in respect of any portion of such Property or the subjecting of any
portion of such Property to restrictions on transfer; except that the
conveyance of a space lease at such Property in accordance herewith shall not
constitute a Transfer and (ii) with respect to the Required Equity, unless
expressly permitted hereunder, the pledge, sale or other whole or partial
conveyance of all or any portion thereof or any direct or indirect equity
interest therein.

 

“TRS Owner” means American Financial TRS, Inc.

 

“TRS Property” means any Property directly or indirectly owned
by TRS Owner.

 

“Unaffiliated
Release Price” has the meaning set forth in Exhibit I.

 

“Underfunding” means with respect to any Plan, the excess, if
any, of the “projected benefit obligations” (within the meaning of Statement of
Financial Accounting Standards 87) under such Plan (determined using the
actuarial assumption used for financial statement disclosure in the most recent
financial statements of the Plan sponsor) over the fair market value of the
assets held under the Plan.

 

“Upper Tier Pledge” means that certain Pledge and Security
Agreement (Upper Tier) by GKK Stars Acquisition LLC and First States Group,
L.P. for the benefit of Lender.

 

“Use” means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation of such
Hazardous Substance.

 

“U.S. Person” means a United States person within the meaning of
Section 7701(a)(30) of the Code.

 

“U.S. Tax” means any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America or any
taxing authority thereof.

 

“Value
Add Pool Equity” means, collectively, 100% of the direct equity interests
in the owner of each Value Add Pool Owner.

 

“Value Add Pool Equity Release Price” has the meaning set forth
in Exhibit I.

 

“Value
Add Pool Owner” means, collectively or individually, as the context may
require, each  Person that owns a Value
Add Pool Property as listed on Schedule J.

 

31

 

“Value
Add Pool Pledgor” means each owner of a Value Add Pool Owner, as set forth
on Schedule J.

 

“Value Add Pool Property” means, collectively or individually,
as the context may require, each of the Properties listed on Schedule J.

 

“Waste” means any material abuse or destructive use (whether by
action or inaction) of the Properties.

 

“Zoning Report” means a zoning report or reports with respect to
each of the Properties approved by Lender and delivered to Lender in connection
with the Loan, and any amendments or supplements thereto delivered to Lender.

 

 (b)          Rules of Construction.  All references to sections, schedules and
exhibits are to sections, schedules and exhibits in or to this Agreement unless
otherwise specified.  Unless otherwise
specified: (i) all meanings attributed to defined terms in this Agreement
shall be equally applicable to both the singular and plural forms of the terms
so defined, (ii) “including” means “including, but not limited to”, (iii) references
to Payment Dates that fall in specified months ignore the preceding Business
Day convention, and (iv) “mortgage” means a mortgage, deed of trust, deed
to secure debt or similar instrument, as applicable, and “mortgagee” means the
secured party under a mortgage, deed of trust, deed to secure debt or similar
instrument.  All accounting terms not
specifically defined in this Agreement shall be construed in accordance with
GAAP, as same may be modified in this Agreement.  Notwithstanding anything to the contrary set
forth herein or in the other Loan Documents, wherever the Loan Documents
provide that a Property Owner or Joint Venture Owner shall take or refrain from
taking an action, and all references to Borrower taking an action with respect
to a Property (e.g., requirements that Borrower maintain the Property,
perform obligations under Leases, etc.), such provision shall be construed to
mean that Borrower shall cause the applicable Property Owner or Joint Venture
Owner (to the fullest extent permitted under the applicable Qualified Joint
Venture Agreements with respect to the Joint Venture Properties) to take or
refrain from taking such action, as applicable; and all references to the
creation or release of a Lien of Lender on an Encumbered Property shall mean
the creation or release of Lender’s Lien on the Collateral specifically related
to such Property.

 

32

 

ARTICLE
I

 

GENERAL TERMS

 

1.1.                              The Loan.  On the
Closing Date, subject to the terms and conditions of this Agreement, Lender
shall make a loan to Borrower (the “Loan”) in an amount equal to the
Loan Amount.  The Loan shall initially be
represented by a single Note which shall bear interest as described in this
Agreement at a per annum rate as provided in Section 1.3(a).  The Loan shall be secured by the Collateral.

 

1.2.                              The Term.

 

(a)                                  The Maturity Date of the Loan shall
initially be the Payment Date in March 2010, or such earlier date as may result
from acceleration.

 

(b)                                 Borrower shall have a single option to
extend the scheduled Maturity Date of the Loan to the Payment Date in the month
containing the one-year anniversary of the Maturity Date (the period of such
extension, the “Extension Term”), provided that (i) Borrower
shall deliver to Lender written notice of such extension at least 30 and not
more than 60 days prior to the Maturity Date; (ii) no monetary or other
material Default shall be continuing on either the date of such notice or the
Maturity Date as theretofore in effect; (iii) Borrower shall have obtained
an Extension Interest Rate Cap Agreement for the Extension Term and
collaterally assigned such Extension Interest Rate Cap Agreement to Lender
pursuant to an Assignment of Interest Rate Cap Agreement; and (iv) Borrower
shall have paid to Lender an extension fee in an amount equal to 0.75% of the
Principal Indebtedness and all reasonable out-of-pocket expenses incurred by
Lender in connection with such extension. If Borrower fails to exercise the
extension option in accordance with the provisions of this Agreement, the
extension option, and any subsequent extension option hereunder, will
automatically cease and terminate.

 

1.3.                              Interest and Principal.

 

(a)                                  On each Payment Date, Borrower shall pay
interest on the Principal Indebtedness for the Interest Accrual Period in which
such Payment Date falls at a rate per annum equal to the sum of LIBOR,
determined as of the Interest Determination Date immediately preceding such
Interest Accrual Period, plus the Spread (except that interest
shall be payable on the Indebtedness, including due but unpaid interest, at the
Default Rate with respect to any portion of such Interest Accrual Period
falling during the continuance of an Event of Default).  Interest accruing for the first Interest
Accrual Period shall be prepaid on the Closing Date from the Loan proceeds
otherwise to be disbursed to Borrower at Closing.  Interest payable hereunder shall be computed
on the basis of a 360-day year and the actual number of days elapsed.

 

(b)                                 No prepayments of the Loan shall be
permitted except as provided in Sections 2.1 and 5.16(d).  The entire outstanding Principal
Indebtedness, together with all interest thereon through the end of the
Interest Accrual Period in which the Maturity Date falls (calculated as if such
Principal Indebtedness were outstanding for the entire Interest Accrual 

33

 

Period) and all other amounts then due under the Loan
Documents shall be due and payable by Borrower to Lender on the Maturity Date,
as such date may be extended pursuant to Section 1.2(b).

 

(c)           Upon written notice from Lender to
Borrower (the “Componentization Notice”), the Note will be deemed to
have been subdivided (retroactively as of the Closing) into multiple components
(“Note Components”).  Each Note
Component shall have such notional balance (a “Component Balance”) as
Lender shall specify in the Componentization Notice and an interest rate equal
to the sum of LIBOR plus such amount as Lender shall specify in the
Componentization Notice (each such amount, a “Component Spread”); provided
that (i) the sum of the Component Balances of all Note Components shall
equal the then-applicable Principal Indebtedness, and (ii) except
following a prepayment as the result of an Event of Default or as a result of
the application of Loss Proceeds in connection with a Casualty or Condemnation,
the weighted average of the Component Spreads, weighted on the basis of their
respective Component Balances, shall equal the percentage set forth in clause (i) of
the definition of “Spread”.  If requested
by Lender, each Note Component shall be represented by a separate physical
Note.  Borrower shall execute and return
to Lender each such Note within a reasonable period of time, but in any event
not in excess of four Business Days after Borrower’s receipt of an execution
copy thereof.

 

(d)           Any
payments of interest and principal not paid when due hereunder shall bear
interest at the applicable Default Rate and, when paid, shall be accompanied by
a late fee in an amount equal to 4% times the amount of such late payment 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.  Borrowers shall have
no obligation hereunder to pay Default Rate interest or a late charge if such
failure to timely make a payment is due to Lender not complying with its obligations
under Article 3 hereof and the Cash Management Agreement and no
Default or Event of Default shall result under the Loan Documents by reason
thereof.

 

1.4.          Interest Rate Cap Agreements.

 

(a)           On or prior to the Closing Date,
Borrower shall obtain, and thereafter maintain in effect, an Initial Interest
Rate Cap Agreement, which shall be coterminous with the initial term of the
Loan and have a notional amount equal to the Loan Amount.   Any Initial Interest Rate Cap Agreement
shall have a LIBOR strike rate equal to or less than the LIBOR Strike Rate.

 

(b)           If Borrower exercises its option to
extend the term of the Loan pursuant to Section 1.2(b), then on or
prior to the commencement of the Extension Term Borrower shall obtain, and
thereafter maintain in effect, an Extension Interest Rate Cap Agreement having (x) a
term coterminous with the Extension Term, (y) a notional amount at least
equal to the Principal Indebtedness as of the first day of the Extension Term,
and (z) a LIBOR strike rate equal to or less than the LIBOR Strike Rate.

 

34

 

(c)           Borrower shall collaterally assign to
Lender pursuant to an Assignment of Interest Rate Cap Agreement all of its
right, title and interest in any and all payments under each Interest Rate Cap
Agreement and shall deliver to Lender an executed counterpart of such Interest
Rate Cap Agreement and obtain the consent of the Acceptable Counterparty to
such collateral assignment (as evidenced by the Acceptable Counterparty’s
execution of such Collateral Assignment of Interest Rate Cap Agreement).

 

(d)           Borrower shall comply with all of its
obligations under the terms and provisions of each Interest Rate Cap
Agreement.  All amounts paid under an
Interest Rate Cap Agreement shall be deposited directly into the Cash Management
Account.  Borrower shall take all actions
reasonably requested by Lender to enforce Lender’s rights under the Interest
Rate Cap Agreement in the event of a default by the counterparty thereunder and
shall not waive, amend or otherwise modify any of its rights thereunder.

 

(e)           If, at any time during the term of
the Loan, the counterparty to the Interest Rate Cap Agreement then in effect
ceases to be an Acceptable Counterparty and thereafter fails to abide by the
requirements set forth in such Interest Rate Cap Agreement with respect to
ratings downgrades, then Borrower shall promptly obtain a replacement Interest
Rate Cap Agreement satisfying the requirements set forth in paragraph (a) or
(b) above, as applicable, with a counterparty that is an Acceptable
Counterparty.

 

(f)            At Closing and at any time that
Borrower obtains a replacement Interest Rate Cap Agreement pursuant to this Section 1.4,
Borrower shall deliver to Lender a legal opinion or opinions from counsel to
the applicable Acceptable Counterparty (which counsel may be internal counsel)
in substantially the form of Exhibit B.

 

1.5.          Method and Place of Payment.  Except as otherwise specifically provided in
this Agreement, all payments and prepayments under this Agreement and the Notes
(including any deposit into the Cash Management Account pursuant to Section 3.2(c))
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 by wire transfer in federal or other immediately available funds to the
account specified from time to time by Lender. 
Any funds received by Lender after such time shall be deemed to have
been paid on the next succeeding Business Day. 
Lender shall notify Borrower in writing of any changes in the account to
which payments are to be made.  If the
amount received from Borrower (or from the Cash Management Account pursuant to Section 3.2(b))
is less than the sum of all amounts then due and payable hereunder, such amount
shall be applied, at Lender’s sole discretion, either toward the components of
the Indebtedness (e.g., interest, principal and other amounts payable
hereunder) and the Note Components in such sequence as Lender shall elect in
its sole discretion, or toward the payment of Property expenses.

 

1.6.          Regulatory Change.  If, as a result of any Regulatory Change, any
reserve, special deposit or similar requirements relating to any extensions of
credit or other assets of, or any deposits with, any Lender is imposed,
modified or deemed applicable and the result is to increase the cost to such
Lender of making LIBOR-based loans, or to reduce the amount receivable by
Lender hereunder in respect of any portion of the Loan with respect to LIBOR-based

 

35

 

loans by an amount deemed by such Lender to be material (such increases
in cost and reductions in amounts receivable, “Increased Costs”), then
Borrower agrees that it will pay to Lender upon Lender’s request such
additional amount or amounts (based upon a reasonable allocation thereof by
such Lender to the LIBOR-based loans made by such Lender) as will compensate
such Lender for such Increased Costs to the extent that such Increased Costs
are reasonably allocable to the Loan. 
Lender will notify Borrower in writing of any event occurring after the
Closing Date which will entitle Lender to compensation pursuant to this Section 1.6
as promptly as practicable after it obtains knowledge thereof and determines to
request such compensation and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.  If such
Lender shall fail to notify Borrower of any such event within 90 days following
the end of the month during which such event occurred, then Borrower’s
liability for any amounts described in this Section incurred by such
Lender as a result of such event shall be limited to those attributable to the
period occurring subsequent to the 90th day prior to the date upon which such
Lender actually notified Borrower of the occurrence of such event.  Notwithstanding the foregoing, in no event
shall Borrower be required to compensate any Lender for any portion of the
income or franchise taxes of Lender, whether or not attributable to payments
made by Borrower.  If a Lender requests
compensation under this Section 1.6, Borrower may, by notice to
Lender, require that such Lender furnish to Borrower a statement setting forth
in reasonable detail the basis for requesting such compensation and the method
for determining the amount thereof.

 

1.7.          Taxes.

 

(a)           Borrower
agrees to indemnify Lender against any present or future stamp, documentary or
other similar or related taxes or other similar or related charges now or
hereafter imposed, levied, collected, withheld or assessed by any United States
Governmental Authority by reason of the execution and delivery of the Loan
Documents and any consents, waivers, amendments and enforcement of rights under
the Loan Documents.

 

(b)           If Borrower is
required by law to withhold or deduct any amount from any payment hereunder in
respect of any U.S. Tax, Borrower shall withhold or deduct the appropriate
amount, remit such amount to the appropriate Governmental Authority and pay to
each Person to whom there has been an Assignment or Participation of a Loan and
who is not a U.S. Person such additional amounts as are necessary in order that
the net payment of any amount due to such non-U.S. Person hereunder after
deduction for or withholding in respect of any U.S. Tax imposed with respect to
such payment (or in lieu thereof, payment of such U.S. Tax by such non-U.S.
Person), will not be less than the amount stated in this Agreement to be then
due and payable; except that the foregoing obligation to pay such additional
amounts shall not apply (i) to any assignee that has not complied with the
obligations contained in Section 9.7(c), (ii) to any U.S.
Taxes withheld or deducted from, or imposed on, any payment hereunder or under
the Note or any Note Components by reason of any present or former connection
between any non-U.S. Person and the United States of America (other than solely
on account of the execution and performance of, the enforcement of any right
under or the receipt of any payment under, this Agreement or a Note), (iii) to
any U.S. Taxes withheld or deducted from, or imposed on, any payment hereunder
or under the Note or any Note Components at the time of any Assignment or

 

36

 

Participation of a Loan or the Note or any Note Components to any
non-U.S. Person, (iv) to any U.S. Taxes imposed solely by reason of the
failure by such Person (or, if such Person is not the beneficial owner of the
relevant Loan, such beneficial owner) to comply with applicable certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connections with the United States of
America of such Person (or beneficial owner, as the case may be) if such
compliance is required by statute or regulation of the United States of America
as a precondition to relief or exemption from such U.S. Taxes; or (v) with
respect to any Person who is a fiduciary or partnership or other than the sole
beneficial owner of such payment, to any U.S. Tax imposed with respect to
payments made under any Note to a fiduciary or partnership to the extent that
the beneficial owner or member of the partnership would not have been entitled
to the additional amounts if such beneficial owner or member of the partnership
had been the holder of the Note.

 

(c)           Within 30 days after
paying any amount from which it is required by law to make any deduction or
withholding, and within 30 days after it is required by law to remit such
deduction or withholding to any relevant taxing or other authority, Borrower
shall deliver to such non-U.S. Person satisfactory evidence of such deduction,
withholding or payment (as the case may be).

 

1.8.          Release.  Upon payment of the Indebtedness in full when
permitted or required hereunder, Lender shall execute instruments prepared by
Borrower and reasonably satisfactory to Lender, which, at Borrower’s election: (a) release
and discharge all Liens on all Collateral securing payment of the Indebtedness
(subject to Borrower’s obligation to pay any associated fees and expenses),
including all balances in the Collateral Accounts, terminate the Loan Documents
(other than those provisions thereof that expressly survive repayment of the
Indebtedness in full) and provide notice to third parties, including the Cash
Management Bank and Tenants; or (b) assign such Liens (and the applicable
Loan Documents) to a new lender designated by Borrower.

 

ARTICLE II

 

PREPAYMENT

 

2.1.          Voluntary
and Mandatory Prepayment.

 

(a)           Borrower shall have
the right, at its option, upon ten Business Days’ prior written notice to
Lender (which notice may be revocable at any time by Borrower, provided that
Borrower shall reimburse Lender for all of its reasonable out-of-pocket costs
and expenses incurred as a result of any such revocation), to prepay the Loan
in whole or in part at any time, provided that if such prepayment is made prior
to the Par Prepayment Date then Borrower shall pay to Lender simultaneously
with such prepayment the applicable Prepayment Fee; provided, however,
that no Prepayment Fee shall be payable with respect to (i) a prepayment
of the Loan in connection with the release of one or more Value Add Pool
Properties or the release of one or more of the Properties within the Dana
Portfolio, except, in each case, to the extent that aggregate prepayments of
the Loan shall exceed 30% of the Loan Amount, (ii) a prepayment of the
Loan in connection with the sale of a Disposition Asset or (iii) any
prepayment of the Loan

 

37

 

pursuant to Section 5.16(d).  Each such prepayment shall be accompanied by
the amount of interest theretofore accrued but unpaid in respect of the
principal amount so prepaid, plus the amount of interest that would have
accrued on the principal amount so prepaid had it remained outstanding through
the end of the Interest Accrual Period in which such prepayment is made and, if
such prepayment is made during the last two Business Days in any Interest
Accrual Period, the amount of additional interest that would have accrued on
the principal amount so prepaid had it remained outstanding through the end of
the following Interest Accrual Period. 
Following any such prepayment, Borrower may release or transfer, free
and clear of the Lien of the Loan Documents, a portion of the notional amount
of the Interest Rate Cap Agreement equal to the amount of such prepayment.  Any partial prepayment shall be applied to
the last payments of principal due under the Loan.

 

(b)           Borrower shall not
be permitted to make a voluntary prepayment of the Principal Indebtedness
(excluding any payment of any Affiliated Release Price, Unaffiliated Release
Price or Dana Release Price or any application of Loss Proceeds) unless simultaneously
therewith a prepayment of the Mortgage Loan shall also be made in the amount
necessary so that the Principal Indebtedness and the Mezzanine Loan Principal
Indebtedness immediately after such prepayment are in the same proportion as
they were immediately prior to such prepayments (but Borrower shall be
permitted, and is required, to make the mandatory prepayments set forth in Section 2.1(c)).  If the Note has been bifurcated into multiple
Note Components pursuant to Section 1.3(c), all prepayments of the
Loan, except those made during the continuance of an Event of Default or
pursuant to Section 5.16, shall be applied to the Note Components
on a pro rata basis.  All prepayments of
the Loan made during the continuance of an Event of Default or pursuant to Section 5.16
shall be applied to the Note Components in ascending order of interest rate (i.e.,
first to the Note Component with the lowest Component Spread until its
outstanding principal balance has been reduced to zero, then to the Note
Component with the second lowest Component Spread until its outstanding
principal balance has been reduced to zero, and so on) or in such other order
as Lender shall determine.

 

(c)           Borrower shall make
the following mandatory prepayments of the Loan:

 

(i)            on the first Payment Date following
the date on which any Restricted Cash is no longer required to be maintained as
collateral for the benefit of the applicable Encumbered Property Lender
pursuant to the applicable Encumbered Property Debt Documents, Borrower shall
prepay the Loan in accordance with Section 2.1 in the amount of any
such Restricted Cash, provided that Borrower shall not be required to pay any
Prepayment Fee or other similar amount in connection therewith;

 

(ii)           on any Payment Date on which Dana Excess
Cash Flow is contained in the Cash Management Account, Borrower shall prepay
the Loan in the amount of such Dana Excess Cash Flow, provided that (i) Borrower
shall not be required to pay any Prepayment Fee or other similar amount in
connection therewith and (ii) the aggregate amount of prepayments of the
Loan made pursuant to this Section 2.1(c)(ii) shall not be
required to exceed $10,000,000 in the aggregate in any calendar year (which
amount shall be reduced on a proportionate basis to reflect any reduction in
Borrower’s interest in the Dana Portfolio in the event Borrower enters into a
Qualified Joint Venture Agreement

 

38

 

with respect to the Dana Portfolio in accordance
herewith, and any release of a Property in the Dana Portfolio in accordance
herewith, in each case provided the Release Price required to be paid in
accordance therewith has been paid);

 

(iii)          simultaneously with, and as a
condition to, any sale and/or financing of any Disposition Asset (including
subsequent sales and/or financings to the extent any initial sale or financing
is with or to an Affiliate of Borrower) that shall cause the aggregate gross
proceeds theretofore realized from the sale and/or financing of Disposition
Assets to exceed $184,000,000 (which gross proceeds shall include the
assumption of Debt without reduction for repayment of Debt, but shall be net of
customary transaction costs, including legal fees, actually paid to third
parties, in each case with respect to any such sale or financing of a
Disposition Asset), Borrower shall prepay the Loan in accordance with Section 2.1
in the amount of any such excess, provided that Borrower shall not be required
to pay any Prepayment Fee or other similar amount in connection therewith (by
way of example only: if the Disposition Assets are encumbered by $100,000,000
and are purchased for $100,000,000 subject to existing Debt, or are purchased
for $200,000,000 and existing Debt is repaid, then in either case the Loan
shall be reduced or repaid, as applicable, in the amount of $16,000,000 (net of
customary third party transaction costs paid to unaffiliated third parties);
and

 

(iv)          simultaneously with any voluntary
prepayment of all or any portion of the Mortgage Loan Principal Indebtedness,
Borrower shall make a prepayment hereunder in the amount necessary so that the
Principal Indebtedness and the Mortgage Loan Principal Indebtedness immediately
after such prepayments are in the same proportion as they were immediately
prior to such prepayments.

 

2.2.          Property Releases.

 

(a)           So long as no Event
of Default is then continuing and all amounts then due and owing to Lender have
been paid in full, Borrower may from time to time obtain the release of one or
more of the Properties or direct or indirect equity interests therein from the
Liens of the Loan Documents in connection with a sale to an unaffiliated
third-party in an arms’-length transaction or a Permitted Affiliate Sale, provided
that: (1) at the time of such release (but provided that no Event of
Default has occurred and is continuing, not in connection with the transfer of
any Disposition Asset), Borrower shall prepay the Loan in accordance with Section 2.1
in an amount equal to the applicable Release Price, plus any additional amount required
to be prepaid in accordance with Section 2.2(c) in order to
reduce the Release Price Deficit, which aggregate prepayment shall be
accompanied by the other amounts specified in Section 2.1,
including the applicable Prepayment Fee if such prepayment is made prior to the
Par Prepayment Date, (2) except with respect to the sale of the Dana
Portfolio to an unaffiliated third party, DSCR for the Test Period most
recently ended, recalculated to include only income and expense attributable to
Borrower’s interest in the Properties remaining after the contemplated release
and to exclude the interest expense and principal payments on the aggregate
amount to be prepaid, shall be equal to or greater than DSCR immediately prior
to such release (as reasonably determined by Lender) (for these purposes, in
the case of the sale of a Mortgage Loan Collateral Property, DSCR shall be
adjusted to ignore the effect of so-called “rate creep” resulting from the

 

39

 

fact that the prepayment of the Loan and the Mortgage Loan will not
result in a pro-rata reduction of their respective principal amounts), (3) after
giving effect to such release, the sum of all Allocated Loan Amounts of each
Property directly or indirectly subject to the Lien of the Loan Documents that
constitutes Senior Collateral (without duplication) shall not be less than 120%
of the Principal Indebtedness and (4) Borrower shall reimburse Lender for any actual reasonable out-of-pocket costs
and expenses incurred by Lender in connection with this Section 2.2
(including the reasonable fees and expenses of legal counsel and the
Servicer).  Notwithstanding anything to
the contrary in this Section 2.2(a) (x) the release price
for a Disposition Asset shall be zero, subject to the requirement specified in Section 2.1(c)(iii),
and the foregoing requirements set forth in clauses (1) through (4) inclusive
shall not apply, (y) with respect to the release of any Joint Venture
Property, the Release Price applicable to such Property shall be adjusted to
reflect the Joint Venture Owner’s percentage interest in the Joint Venture
Property as of the date of any such release and (z) the release price for
any asset acquired by a Borrower from and after the date hereof (to the extent
Borrower is permitted to acquire any such asset pursuant this Agreement) shall
be zero, and the foregoing requirements set forth in clauses (1) through (4) inclusive
shall not apply.

 

(b)           Upon satisfaction of
the requirements set forth in Sections 2.1 and 2.2, Lender will
execute and deliver to Borrower such instruments, prepared by Borrower and
approved by Lender, as shall be necessary to release the applicable Property or
Properties from the Liens of the Loan Documents or to assign the applicable
portion of such Liens to a third party to the extent necessary to avoid the
incurrence of mortgage recording taxes.

 

(c)           Notwithstanding
anything herein to the contrary, in the case of a sale of a Property to an
unaffiliated third party in an arms’-length transaction, if the Net Proceeds
are less than the amount specified in clause (B)(x) of the definition of “Unaffiliated
Release Price”, then the amount of principal payable by Borrower under Section 2.2(a)(1) in
connection with the release of such Property shall be 100% of such Net
Proceeds, subject to the following:

 

(i)            the Release Price Deficit (as
defined below) may not at any time exceed $30,000,000; and

 

(ii)           if and to the extent the Release
Price Deficit is greater than zero, all Excess Transfer Proceeds shall be
applied toward prepayment of the Loan in accordance with Section 2.1
(and shall be accompanied by any applicable Prepayment Fee) until the Release
Price Deficit is reduced to zero.

 

“Release Price Deficit” means, from time to time, the excess, if
any, of (x) the sum of all Release Prices of all Properties theretofore
released, minus (y) the sum of all amounts theretofore applied
toward the prepayment of the Loan in connection with Transfers of Properties
pursuant to Section 2.2(a)(1).

 

2.3.          Value Add Pool
Equity Releases.  So long as no Event
of Default is then continuing and all amounts then due and owing to Lender have
been paid in full, Borrower may obtain the release of up to and including 80%
of the Value Add Pool Equity in the aggregate from the Liens of the Loan
Documents in connection with the sale of such equity interests to an

 

40

 

unaffiliated third party, provided that (1) at the time of
each such release, Borrower shall prepay the Loan, in accordance with Section 2.1,
in an amount equal to the applicable Value Add Pool Equity Release Price, which
prepayment shall be accompanied by the other amounts specified in Section 2.1,
(2) DSCR for the Test Period most recently ended, recalculated to include
only Borrower’s share of income and expense attributable to the Properties
remaining after the contemplated sale and to exclude the interest expense and
principal payments on the aggregate amount to be prepaid, shall be equal to or
greater than DSCR immediately prior to such sale (as reasonably determined by
Lender), (3) after giving effect to such release, the aggregate Allocated
Loan Amounts for each Property subject to the Lien of the Loan Documents that
constitutes Senior Collateral shall not be less than 120% of the Principal
Indebtedness (as reasonably determined by Lender), (4) Borrower shall reimburse Lender for any actual reasonable
out-of-pocket costs and expenses incurred by Lender in connection with this Section 2.2
(including the reasonable fees and expenses of legal counsel and the Servicer),
(5) Lender shall retain a first-priority perfected pledge of the
remaining Value Pool Property Equity, which shall not be less than 20% of the
initial Value Add Pool Equity, (6) Lender shall have reasonably approved
the joint venture or other applicable agreement between Borrower and the
purchaser(s) of Value Add Pool Equity and any subsequent amendments and
modifications thereof, and such joint venture or other applicable agreement
shall provide that (x) if Lender forecloses on the Value Add Pool Equity
pledged to Lender under the Loan Documents, then unless 80% of the Value Add
Pool Equity has been released in accordance with this Section 2.3
(which 80% threshold may be reduced to 66.67% in Lender’s reasonable
discretion), Lender shall have the right to require that the Value Add Pool
Properties be liquidated, subject to customary rights of first offer or
appraisal sale or other similar rights reasonably acceptable to Lender, and (y) distributions
of operating revenues, capital proceeds and all other income of the Value Add
Pool Properties, to the extent available for distribution, shall be made to the
equityholders in proportion to their respective equity interests and (7) in
the event that 80% of the Value Add Pool Equity has been released in accordance
with the provisions of this Section 2.3, any subsequent sale of a
Value Add Pool Property or of Borrower’s entire remaining 20% equity interest
referenced in the preceding clause (5) shall be subject to the requirements
of foregoing clauses (1) through (6), provided, however,
that the applicable Unaffiliated Release Price shall be paid in lieu of the
Value Add Pool Equity Release Price, except that, for purposes of this
subsection (7) only, the Release Price payable in connection therewith
shall be the Unaffiliated Release Price (taking into account 100% of the
Aggregate Allocated Loan Amounts of the respective Properties, without
reduction for prior equity sales) reduced by multiplying the amount specified in
clause (x) of the definition of Unaffiliated Release Price by 20%, and the
percentage specified in clause (y) of the definition of Unaffiliated
Release Price shall be replaced with “100%”.

 

2.4  Release of Vacant Land.  So long as no Event of Default is then
continuing, Borrower may obtain the release of one or more vacant non-income
producing parcels of land (each such parcel, a “Release Parcel”) from
the restrictions and Liens of the Loan Documents in connection with the
Transfer of such Release Parcel to an unaffiliated third party in a bona fide
arms-length transaction upon satisfaction of the following conditions:

 

(i)            Borrower shall deliver to Lender
notice of its intent to release one or more Release Parcels, which notice must
be given at least 10 Business Days and not more than 60 days prior to the
Business Day upon which the release is to be made and shall specify

 

41

 

the Release Parcel(s) that
Borrower intends to release.  Borrower shall promptly reimburse Lender for any actual
out-of-pocket costs and expenses (including the reasonable fees and expenses of
legal counsel and the Servicer) incurred by Lender in connection with a release
pursuant to this Section 2.4.

 

(ii)           At the time of such release, Borrower
shall prepay a portion of the Loan, in accordance with Section 2.1,
in an amount equal to the applicable Parcel Release Price.

 

(iii)          Lender shall have received evidence
reasonably satisfactory to it that the Mortgage Borrower shall have satisfied all
of the conditions to the proposed release set forth in the applicable
Encumbered Debt Documents.

 

(iv)          Borrower shall have delivered to
Lender satisfactory evidence that (1) the applicable Release Parcel has
been legally subdivided from the remaining Property, a separate tax
identification number shall have been issued for such Release Parcel and all
necessary variances, if any, shall have been obtained (with the result that,
upon the transfer and release of such Release Parcel, no part of the remaining Property
shall be part of a tax lot which includes any portion of such Release Parcel); (2) after
giving effect to such transfer, each of the Release Parcel and the remaining
Property conforms to and is in compliance in all material respects with
applicable Legal Requirements (including, without limitation, all zoning and
subdivision laws, setback requirements, sideline requirements, parking ratio
requirements, use requirements, building and fire code requirements,
environmental requirements and wetlands requirements) and constitutes a
separate tax lot, (3) the Release Parcel is not necessary for the
remaining Property to comply with any zoning, building, land use or parking or
other Legal Requirements applicable to it or for the then current use of the
remaining Property, including without limitation for access, driveways,
parking, utilities or drainage or, to the extent that the Release Parcel is
necessary for any such purpose, a reciprocal easement agreement or other
agreement has been executed and recorded that would allow the owner of the
remaining Property to continue to use the release Parcel (at no cost or expense
to Borrower) to the extent necessary for such purpose, and (4) the lots
have been demised to Lender’s satisfaction in its reasonable discretion;

 

(v)           In the case of a Mortgage Loan
Collateral Property, Borrower shall deliver to Mortgage Lender an endorsement
to the Qualified Title Insurance Policy insuring the applicable Mortgage (1) extending
the effective date of the policy to the effective date of the release; (2) confirming
no change in the priority of the Mortgage on the remaining Property (exclusive
of the Release Parcel) or in the amount of the insurance or the coverage of the
Property (exclusive of the Release Parcel) under the policy; and (3) insuring
the rights and benefits under any new or amended reciprocal easement agreement
or such other agreement required pursuant to clause (v)(3) of this Section that
has been executed and recorded, if any;

 

(vi)          Borrower shall have complied with any
requirements applicable to the release in the Leases, reciprocal easement
agreements, operating agreements, parking agreements or other similar
agreements affecting the remaining Property and the release

 

42

 

does not violate any of
the provisions of such documents in any respect that would result in a
termination (or give any other party thereto the right to terminate),
extinguishment or other loss of material rights of Borrower or in a material
increase in Borrower’s obligations under such documents and, to the extent
necessary to comply with such documents, the transferee of the Release Parcel
has assumed Borrower’s obligations, if any, relating to the Release Parcel
under such documents;

 

(vii)                           ingress to and egress from all portions
of the remaining Property shall be over (i) physically open and fully
dedicated public roads or (ii) vehicle and pedestrian easements which (1) provide
vehicular and pedestrian access to a physically open and fully dedicated public
road, (2) are recorded in the chain of title to both the property which is
encumbered thereby and the remaining Property, (3) are irrevocable and
non-terminable without the consent of the owner of the remaining Property; and
provided further that, if lawfully obtainable, in the case of a Mortgage Loan
Collateral Property, Borrower delivers to Mortgage Lender an endorsement to the
Qualified Title Insurance Policy, which endorsement shall insure that (A) the
benefit of each such easement inures and runs to the benefit of the owner of
the remaining Property, (B) the Lien of the Mortgage is a first Lien on
Mortgage Borrower’s beneficial interest in such easement, subject to no
exceptions other than Permitted Encumbrances and those approved by Lender in its
reasonable discretion and (C) no then-existing mortgages, Liens, security
interests or other encumbrances (other than Permitted Encumbrances) on the
Release Parcel burdened by such easement are superior to, or under any
circumstances could terminate, impair or limit the terms of such easement;

 

(viii)                        Borrower shall have delivered an Officer’s
Certificate to the effect that the conditions in this Section 2.4
have occurred or shall occur concurrently with the transfer and release of the
applicable Release Parcel; and

 

(ix)                                Borrower shall execute such documents and
instruments and obtain such opinions of counsel as are typical for similar
transactions.

 

ARTICLE III

 

ACCOUNTS

 

3.1.                              Cash Management Account.

 

(a)                                  On or prior to the Closing Date, Borrower
shall establish and thereafter maintain with the Cash Management Bank a cash
management account into which income from the Properties will be deposited (the
“Cash Management Account”), subject to and in accordance with the terms
hereof.  As a condition precedent to the
closing of the Loan, Borrower shall cause the Cash Management Bank to execute
and deliver an agreement (as modified or replaced in accordance herewith, a “Cash
Management Agreement”) which provides, inter  alia, that no
party other than Lender and Servicer shall have the right to withdraw funds
from the Cash Management Account.  The
fees and expenses of the Cash Management Bank shall be paid by Borrower.

 

43

 

(b)           Subject
to the requirements of the Encumbered Property Debt Documents, within five
Business Days following the Closing Date, Borrower shall deliver to each Tenant
in the Properties (except for Tenants at Other Properties) a written notice (a “Tenant
Notice”) in the form of Exhibit D instructing that (i) all
payments under the Leases shall thereafter be transmitted by them directly to,
and deposited directly into, the Cash Management Account or a Blocked Account
and (ii) such instruction may not be rescinded unless and until such
Tenant receives from Borrower or Lender a copy of Lender’s written consent to
such rescission or Lender’s written notice that the Loan has been repaid in
full.  Borrower shall send a copy of each
such written notice to Lender and shall redeliver such notices to each Tenant
until such time as such Tenant complies therewith.  Subject to the Encumbered Property Debt
Documents and any Qualified Joint Venture Agreement, Borrower shall cause (i) all
cash Revenues relating to the Properties (other than the Encumbered Properties
and the TRS Properties) and all other money received by Borrower or the
Approved Property Manager (other than tenant security deposits required to be
held in escrow accounts) with respect to the Properties (other than the
Encumbered Properties and the TRS Properties) to be deposited in the Cash
Management Account or a Blocked Account by the end of the first Business Day
following Borrower’s or the Approved Property Manager’s receipt thereof and (ii) all
Distributions to be deposited in the Cash Management Account or a Blocked
Account by the end of the second Business Day following Borrower’s receipt
thereof.  “Blocked Account” means
an Eligible Account maintained with a financial institution reasonably
satisfactory to Lender that enters into a blocked account agreement or similar
irrevocable direction instruction (as modified or replaced in accordance
herewith, the “Blocked Account Agreement”) reasonably satisfactory to
Lender pursuant to which such financial institution will remit, at the end of
each Business Day, all amounts contained therein to an account specified by
Lender (Lender hereby agreeing to specify the Cash Management Account so long
as no Event of Default has occurred and is then continuing).  For the avoidance of doubt, notwithstanding
anything to the contrary in this Agreement, no amounts shall be deposited into
the Cash Management Account with respect to any Encumbered Property or TRS
Property, except for Distributions pursuant to Section 5.23.

 

(c)           Lender
shall have the right at any time, upon not less than 30 days’ prior written
notice to Borrower, to replace the Cash Management Bank with any Eligible
Institution at which Eligible Accounts may be maintained that will promptly
execute and deliver to Lender a Cash Management Agreement substantially
identical to the Cash Management Agreement executed at Closing.  In addition, subject to the provisions of the
Encumbered Property Debt Documents, during the continuance of an Event of
Default or if the Blocked Account Bank fails to comply with the Blocked Account
Agreement or ceases to be an Eligible Institution, Lender shall have the right
at any time, upon not less than 30 days’ prior written notice to Borrower, to
replace the Blocked Account Bank with any Eligible Institution at which
Eligible Accounts may be maintained that will promptly execute and deliver to
Lender a Blocked Account Agreement satisfactory to Lender.

 

(d)           Borrower
and Lender agree that the flow of funds with respect to the Cash Management
Account and the Blocked Account as depicted in the diagrams attached hereto as Schedule
C is in compliance with this Section 3.1.

 

44

 

3.2.          Distributions from Cash Management
Account.

 

(a)           The
Cash Management Agreement shall provide that the Cash Management Bank shall
remit to an account specified by Borrower, at the end of each Business Day (or,
at Borrower’s election, on a less frequent basis), the amount, if any, by which
amounts then contained in the Cash Management Account (other than Dana Excess
Cash Flow and Restricted Cash) exceed the aggregate amount required to be paid
to or reserved with Lender, or prepaid pursuant to Section 2.1(c)(i),
on the next Payment Date pursuant to Section 3.2(b) (the “Minimum
Balance”); provided, however, that Lender shall terminate
such remittances during the continuance of an Event of Default upon notice to
the Cash Management Bank.  Lender may
notify the Cash Management Bank at any time of any change in the Minimum
Balance.  Lender shall deliver a copy of
any notice of a change in the Minimum Balance to Borrower, for information only
(but any failure by Lender to do so shall not in any way limit Borrower’s
obligations or liabilities hereunder). 
Any payment received by any Borrower pursuant to this Section 3.2
shall be received free of the Lien of the Loan Documents.

 

(b)           On
each Payment Date, provided no Event of Default has occurred and is continuing,
Lender shall transfer amounts from the Cash Management Account, to the extent
available therein, to make the following payments in the following order of
priority:

 

(i)            to Lender, the amount of all
scheduled or delinquent interest on the Loan and all other amounts then due and
payable under the Loan Documents;

 

(ii)           to Lender, any Restricted Cash
required to be used to prepay the Loan pursuant to Section 2.1(c)(iii);
and

 

(iii)          to Lender, all Dana Excess Cash Flow
pursuant to Section 2.1(c)(ii);

 

(iv)          any remaining amounts to an account
designated from time to time by Borrower.

 

(c)           If
on any Payment Date the amount in the Cash Management Account shall be
insufficient to make the transfer described in Section 3.2(b)(i),
Borrower shall deposit into the Cash Management Account on such Payment Date
the amount of such deficiency.  If
Borrower shall fail to make such deposit, the same shall constitute an Event of
Default and, in addition to all other rights and remedies provided for under
the Loan Documents, Lender may disburse and apply the amounts in the Collateral
Accounts in accordance with Section 3.5(c).

 

3.3.          Loss
Proceeds Account.

 

(a)           On or prior to the
Closing Date, Borrower shall establish and thereafter maintain with the Cash
Management Bank an account for the purpose of depositing any Loss Proceeds (the
“Loss Proceeds Account”).

 

(b)           Provided no Event of
Default is continuing, funds in the Loss Proceeds account shall be applied in
accordance with Section 5.16.

 

45

 

3.4.          Environmental
Escrow Account.

 

(a)           On or prior to the
Closing Date, Borrower shall establish and thereafter maintain with the Cash
Management Bank an account for the purpose of reserving amounts anticipated to
be required to correct Environmental Conditions (the “Environmental Escrow
Account”).

 

(b)           On the Closing Date,
Borrower shall deposit into the Environmental Escrow Account, from the proceeds
of the Loan, an amount equal to the Environmental Escrow Amount.

 

(c)           Upon the request of
Borrower at any time that no Event of Default is continuing (but not more often
than once per calendar month), Lender shall cause disbursements to Borrower
from the Environmental Escrow Account to reimburse Borrower for reasonable
costs and expenses incurred in order to correct Environmental Conditions, provided
that

 

(i)            Borrower shall deliver to Lender
invoices evidencing that the costs for which such disbursements are requested
are due and payable;

 

(ii)           Borrower shall deliver to Lender an
Officer’s Certificate confirming that all such costs have been previously paid
by Borrower or will be paid from the proceeds of the requested disbursement;
and

 

(iii)          Lender may condition the making of a
requested disbursement on (1) reasonable evidence establishing that
Borrower has applied any amounts previously received by it in accordance with
this Section for the expenses to which specific draws made hereunder
relate, (2) reasonably satisfactory site inspections, and (3) receipt
of lien releases and waivers from any contractors, subcontractors and others
with respect to such amounts.

 

(d)           Upon substantial
resolution (as reasonably determined by Lender) of the portion of the
Environmental Conditions identified on any line on Schedule F, and
provided no Event of Default is then continuing, the remainder of the portion
of the Environmental Escrow Account held for such line item (as shown adjacent
to such line item on Schedule F) shall promptly be remitted to
Borrower.  Upon the correcting of all
Environmental Conditions or other resolution reasonably satisfactory to Lender
with respect thereto, provided no Event of Default is then continuing, any
amounts then remaining in the Environmental Escrow Account shall promptly be
remitted to Borrower and the Environmental Escrow Account will no longer be
maintained.

 

3.5.          Indenture Reserve
Account.

 

(a)           On or prior to the
Closing Date, Borrower shall establish and thereafter maintain with the Cash
Management Bank an account for the purpose of reserving amounts payable under
the Indenture (the “Indenture Reserve Account”).

 

46

 

(b)           On the Closing Date,
Borrower shall deposit into the Indenture Reserve Account, from the proceeds of
the Loan, an amount equal to the Indenture Reserve Amount.

 

(c)           Borrower shall cause
the bonds (the “Bonds”) issued pursuant to the Indenture to be redeemed
at par as soon as permitted under the Indenture, but in any event no later than
July 20, 2009.  From time to time,
upon Lender’s receipt of notice from the trustee under the Indenture that Bonds
have been tendered for redemption at par in accordance with the terms of the
Indenture or interest is required to be paid thereon, Lender shall release to
the trustee under the Indenture the amounts necessary to redeem such Bonds at
par and pay accrued interest thereon.

 

(d)           Upon redemption of
all of the Bonds at par, provided no Event of Default is then continuing, any
amounts then remaining in the Indenture Reserve Account shall promptly be
remitted to Borrower and the Indenture Reserve Account will no longer be
maintained.  Provided that no Event of
Default is continuing, Borrower shall be entitled to receive the interest that
shall have accrued in the Indenture Reserve Account on a monthly basis.

 

3.6.          Account Collateral.

 

(a)           Borrower hereby
grants a perfected first-priority security interest in favor of Lender in and
to the Account Collateral as security for the Indebtedness, together with all
rights of a secured party with respect thereto. 
Each Collateral Account shall be an Eligible Account under the sole
dominion and control of Lender and shall be in the name of Borrower, as
pledgor, and Lender, as pledgee. 
Borrower shall have no right to make withdrawals from any of the
Collateral Accounts.  Funds in the Collateral
Accounts shall not be commingled with any other monies at any time.  Borrower shall execute any additional
documents that Lender in its reasonable discretion may require and shall
provide all other evidence reasonably requested by Lender to evidence or
perfect its first-priority security interest in the Account Collateral.  Funds in the Collateral Account shall be
invested in Permitted Investments selected by Lender.  Unless otherwise required by applicable law,
provided no Event of Default is continuing, all income and gains from the
investment of funds in the Collateral Accounts shall be for the account of
Borrower and shall be paid to Borrower upon written request therefor (but in
any event, not more often than monthly). After the Loan and all other
Indebtedness have been paid in full, the Collateral Accounts shall be closed
and the balances therein, if any, shall be paid to Borrower.

 

(b)           The insufficiency of
amounts contained in the Collateral Accounts shall not relieve Borrower from
its obligation to fulfill all covenants contained in the Loan Documents.

 

(c)           During the
continuance of an Event of Default, Lender may, in its sole discretion, apply
funds in the Collateral Accounts, and funds resulting from the liquidation of
Permitted Investments contained in the Collateral Accounts, either toward the
components of the Indebtedness (e.g., interest, principal and other
amounts payable hereunder), the Loan and the Note Components in such sequence
as Lender shall elect in its sole discretion, and/or toward the payment of
Property expenses.

 

47

 

3.7.          Bankruptcy.  Borrower and Lender acknowledge and agree
that upon the filing of a bankruptcy petition by or against Borrower under the
Bankruptcy Code, the Account Collateral and the Revenues (whether then already
in the Collateral Accounts, or then due or becoming due thereafter) shall be
deemed not to be property of Borrower’s bankruptcy estate within the meaning of
Section 541 of the Bankruptcy Code. 
If, however, a court of competent jurisdiction determines that,
notwithstanding the foregoing characterization of the Account Collateral and
the Revenues by Borrower and Lender, the Account Collateral and/or the Revenues
do constitute property of Borrower’s bankruptcy estate, then Borrower and
Lender further acknowledge and agree that all such Revenues, whether due and
payable before or after the filing of the petition, are and shall be cash
collateral of Lender.  Borrower acknowledges
that Lender does not consent to Borrower’s use of such cash collateral and
that, in the event Lender elects (in its sole discretion) to give such consent,
such consent shall only be effective if given in writing signed by Lender.  Except as provided in the immediately
preceding sentence, Borrower shall not have the right to use or apply or
require the use or application of such cash collateral (i) unless Borrower
shall have received a court order authorizing the use of the same, and (ii) Borrower
shall have provided such adequate protection to Lender as shall be required by
the bankruptcy court in accordance with the Bankruptcy Code.

 

ARTICLE IV

 

REPRESENTATIONS

 

Borrower represents to Lender that, as of the Closing Date, except as
set forth in the Exception Report:

 

4.1.                              Organization.

 

(a)                                  Each Borrower is duly formed, validly
existing and in good standing under the laws of the state of its formation, and
is in good standing in each other jurisdiction where ownership of its
properties or the conduct of its business requires it to be so, and each
Borrower has all power and authority under such laws and its organizational
documents and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.

 

(b)                                 Each Property Owner is duly formed,
validly existing and in good standing under the laws of the state of its
formation, and is in good standing in each other jurisdiction where ownership
of its properties or the conduct of its business requires it to be so, and each
Property Owner has all power and authority under such laws and its
organizational documents and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.

 

(c)                                  No Borrower has any subsidiaries and no Borrower
owns any equity interest in any other Person except as shown on the
organizational chart contained in Exhibit A, which organizational
chart is true and correct as of the date hereof.

 

48

 

4.2.          Authorization.  Each Borrower has the power and authority to
enter into this Agreement and the other Loan Documents, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated by the Loan Documents and has by proper action duly authorized the
execution and delivery of the Loan Documents.

 

4.3.          No Conflicts.  Neither the execution and delivery of the
Loan Documents, nor the consummation of the transactions contemplated therein,
nor performance of and compliance with the terms and provisions thereof will (i) violate
or conflict with any provision of its formation and governance documents, (ii) violate
any law, regulation (including Regulation U, Regulation X or Regulation T),
order, writ, judgment, injunction, decree or permit applicable to it, (iii) violate
or conflict with contractual provisions of, or cause an event of default under,
any indenture, loan agreement, mortgage or contract to which any Borrower, any
Property Owner or Sponsor is a party or by which Borrower, any Property Owner
or Sponsor may be bound which violation, conflict or event of default is
reasonably likely to result in a Portfolio Material Adverse Effect, or (iv) result
in or require the creation of any Lien or other charge or encumbrance upon or
with respect to the Collateral in favor of any party other than Lender.

 

4.4.          Consents.  No consent, approval, authorization or order
of, or qualification with, any court or Governmental Authority is required in
connection with the execution, delivery or performance by any Borrower of this
Agreement or the other Loan Documents, or by any Required Equity Pledgor of the
Loan Documents to which it is a party, the failure to obtain which is
reasonably likely to result in a Portfolio Material Adverse Effect, except for
any of the foregoing which have already been obtained.

 

4.5.          Enforceable
Obligations.  This Agreement and the
other Loan Documents have been duly executed and delivered by Borrower and
constitute each Borrower’s legal, valid and binding obligations, enforceable in
accordance with their respective terms, subject to bankruptcy, insolvency and
similar laws of general applicability relating to or affecting creditors’
rights and to general equity principles. 
The Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense by any Borrower, including the defense of usury.

 

4.6.          No Default.  No Default or Event of Default will exist
immediately following the making of the Loan.

 

4.7.          Payment of Taxes.  Each Borrower and each Property Owner has
filed, or caused to be filed, all tax returns (federal, state, local and
foreign) required to be filed and paid all amounts of taxes due (including
interest and penalties) except for taxes which are not yet delinquent and has
paid all or made provision with the title company for the payment of all other
taxes, fees, assessments and other governmental charges (including mortgage
recording taxes, documentary stamp taxes and intangible taxes) owing by it
necessary to preserve the Liens in favor of Lender (or in the case of an
Encumbered Property, to preserve the Liens under the Encumbered Property Debt
Documents).

 

4.8.          Compliance with
Law.  Except as disclosed in the
Zoning Reports, each Borrower, each Property and the uses thereof comply with
all applicable Insurance Requirements and Legal Requirements, including
building and zoning ordinances and codes, except to the

 

49

 

extent that failure to comply therewith would not result in a Portfolio
Material Adverse Effect.  Except as
disclosed in the Zoning Reports, each Mortgage Loan Collateral Property, and to
Borrower’s knowledge, each Other Property conforms in all material respects to
current zoning requirements (including requirements relating to parking) and is
not an illegal nonconforming use.  No
Borrower is in default or violation of any order, writ, injunction, decree or
demand of any Governmental Authority the violation of which is reasonably
likely to result in a Material Adverse Effect. 
There has not been committed by or on behalf of any Borrower or to
Borrower’s knowledge any other person in occupancy of or involved with the
operation or use of any Mortgage Loan Collateral Property, or  to Borrower’s knowledge, any other person in
occupancy of or involved with the operation or use of any Other Property, any
act or omission affording any federal Governmental Authority or any state or
local Governmental Authority the right of forfeiture as against any Property or
any portion thereof or any monies paid in performance of its obligations under
any of the Loan Documents.  No Borrower,
Property Owner nor Sponsor has purchased any portion of the Properties with
proceeds of any illegal activity.

 

4.9.          ERISA.  Neither Borrower nor any ERISA Affiliate of
Borrower has incurred or could be subjected to any liability under Title IV or Section 302
of ERISA or Section 412 of the Code or maintains or contributes to, or is
required to maintain or contribute to, any Plan.  The consummation of the transactions contemplated
by this Agreement will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA, Section 4975 of the Code or
substantially similar provisions under federal, state or local laws, rules or
regulations; provided that the foregoing representation is subject to the
assets used by the Lender not being or being treated under ERISA as Plan
Assets.

 

4.10.        Investment Company
Act.  No Borrower is an “investment
company”, or a company “controlled” by an “investment company”, registered or
required to be registered under the Investment Company Act of 1940, as amended.

 

4.11.        No Bankruptcy
Filing.  No Borrower is contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets or
property.  No Borrower has any knowledge
of any Person contemplating the filing of any such petition against it.

 

4.12.        Other Debt.  Borrower does not have outstanding any Debt
other than Permitted Debt.  Borrower has
no obligations under the Encumbered Property Debt Documents except, in the case
of AFRT and the Operating Partnership, certain customary non-recourse
carveouts.

 

4.13.        Litigation.  There are no actions, suits, proceedings,
arbitrations or governmental investigations by or before any Governmental
Authority or other court or agency now pending, and there are no such actions,
suits, proceedings, arbitrations or governmental investigations threatened,
against or affecting any Borrower, any Property Owner or any Property, which
individually or collectively would have a Portfolio Material Adverse Effect if
determined against Borrower.

 

50

 

4.14.        Leases;
Material Agreements.

 

(a)           Borrower has
delivered to Lender true and complete copies of all Leases requested by
Lender.  No person has any possessory
interest in any of the Properties or right to occupy the same except under and
pursuant to the provisions of the Leases. 
The certified rent roll delivered to Lender as of the Closing Date (the “Rent
Roll”) is true and correct in all material respects as of February 29,
2008, and since such date, there have been no changes to the Rent Roll that
would have a Portfolio Material Adverse Effect, no new Major Leases have been
entered into and no Major Lease has been terminated.  Borrower is holding approximately $2,150,000
in respect of Tenant security deposits and is holding no security deposits with
respect to Major Leases, no fixed rent has been paid more than 30 days in
advance of its due date and no payments of rent are more than 30 days
delinquent.  Except as set forth on Schedule
S, no Tenant under any of the Leases referenced in Schedule S has
any remaining termination or contraction options.  Except as set forth in the Leases, no Tenant
has any extension or renewal options. 
Except as set forth in the Qualified Title Policies, with respect to the
Mortgage Loan Collateral Properties, or the Leases, with respect to the Other
Properties, no Tenant or other party has any option, right of first refusal or
similar preferential right to purchase or lease all or any portion of any
Property.

 

(b)           Except as set forth
on the Exception Report, to Borrower’s knowledge (x) all material work to
be performed by the landlord under Major Leases has been substantially
performed, all material contributions to be made by the landlord to the Tenants
thereunder have been made and all other material conditions to each Tenant’s
obligations thereunder have been satisfied, in each case, in all material
respects, and (y) no Tenant under a Major Lease has the right to require
any Borrower to perform or finance any material Tenant Improvements or Material
Alterations and no material Leasing Commissions are owed or would be owed upon
the exercise of any such Tenant’s existing renewal or expansion options.  Without limiting the foregoing, Wachovia is
required to pay for 100% of the cost of the “Demising Work” referenced in the
Wachovia estoppel letter delivered at Closing.

 

(c)           To Borrower’s knowledge,
there are no Material Agreements except as described in Schedule D and
no Encumbered Property Debt Documents except as described in Schedule U.  To Borrower’s knowledge, Borrower has made
available to Lender true and complete copies of all Material Agreements and all
Encumbered Property Debt Documents.  To
Borrower’s knowledge, each Material Agreement has been entered into at arm’s
length in the ordinary course of business by or on behalf of Borrower.

 

(d)           The Leases and the
Material Agreements are in full force and effect and, except as set forth on
the Rent Roll, there are no defaults thereunder by any Borrower or any other
party thereto which is reasonably likely to result in a Portfolio Material
Adverse Effect.  No Borrower is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Permitted Encumbrance or
any other agreement or instrument to which it is a party or by which it or any
of the Properties are bound which default is reasonably likely to result in a
Portfolio Material Adverse Effect.

 

4.15.        Full and Accurate
Disclosure.  To Borrower’s knowledge,
no statement of fact heretofore delivered by Sponsor or Borrower to Lender in
writing in respect of the Properties or any Borrower contains any untrue
statement of a material fact or omits to state any

 

51

 

material fact necessary to make statements contained therein not
misleading unless subsequently corrected. 
There is no fact presently actually known to Borrower which has not been
disclosed to Lender which is reasonably likely to result in a Portfolio
Material Adverse Effect.

 

4.16.        Financial
Condition.  To Borrower’s knowledge,
except as otherwise disclosed in writing to Lender, all financial data
concerning Borrower and the Properties heretofore provided to Lender fairly
presents in accordance with GAAP the financial position of Borrower in all
material respects, as of the date on which it was made, and does not omit to
state any material fact necessary to make statements contained herein or
therein not misleading.  Since the
delivery of such data, except as otherwise disclosed in writing to Lender there
have occurred no changes or circumstances which have had or are reasonably
likely to result in a Portfolio Material Adverse Effect.

 

4.17.        Single-Purpose Requirements.  Each Borrower, each Property Owner and their
respective Single-Purpose Equityholder, except as disclosed on Exhibit A,
is now a Single-Purpose Entity, and has always been a Single-Purpose Entity to
the extent relevant to the Nonconsolidation Opinion.  All statements of fact contained in the
Nonconsolidation Opinion and in the certificates referenced therein and
attached thereto are true and correct in all material respects.

 

4.18.        [Intentionally
Omitted].

 

4.19.        Not Foreign Person.  No Borrower is a “foreign person” within the
meaning of Section 1445(f)(3) of the Code.

 

4.20.        Labor Matters.  Except as listed on the Exception Report, no
Borrower is a party to any collective bargaining agreements.

 

4.21.        Title.  Mortgage Loan Property Owners own good,
marketable and insurable title to the Mortgage Loan Collateral Properties and
good and marketable title to the related personal property, to the Collateral
Accounts and to any other Collateral, in each case free and clear of all Liens
whatsoever except the Permitted Encumbrances. 
Owners of Other Properties own good, marketable and insurable title to
the Other Properties and good and marketable title to the related personal
property free and clear of all Liens whatsoever except the Encumbered Property
Debt and the encumbrances permitted under, or created by, the Encumbered
Property Loan Documents.  Each Required
Equity Pledgor has good title to its required Equity, in each case free and
clear of all Liens except the Permitted Encumbrances.  The Mortgages, 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) valid,
perfected first priority Liens on the Mortgage Loan Collateral Properties and
the rents therefrom, enforceable as such against creditors of and purchasers
from Borrower and subject only to Permitted Encumbrances, and (ii) perfected
Liens (pursuant to the Uniform Commercial Code of the State of Delaware) in and
to all personalty, all in accordance with the terms thereof, in each case
subject only to any applicable Permitted Encumbrances.  The Loan Documents creating a security
interest in the Required Equity, upon the filing of a UCC financing statement
in the appropriate jurisdiction and/or delivery of the certificates evidencing
the securities

 

52

 

included in the Collateral, create and constitute a valid and perfected
first priority Lien on the Required Equity, free and clear of all Liens other
than the Loan Permitted Encumbrances. The Permitted Encumbrances do not and
will not materially and adversely affect or interfere with the value, or current
use or operation, of the Mortgage Loan Collateral Properties, or the security
intended to be provided by the Mortgages and the Loan Documents creating a
security interest in the Required Equity or Borrower’s ability to repay the
Indebtedness in accordance with the terms of the Loan Documents.  Except as insured over by a Qualified Title
Insurance Policy, there are no claims for payment for work, labor or materials
affecting the Mortgage Loan Collateral Properties which are or may become a
Lien prior to, or of equal priority with, the Liens created by the Loan
Documents.  No creditor of any Borrower
other than Lender has in its possession any goods that constitute or evidence
the Collateral.

 

4.22.        No Encroachments.  Except as shown on the applicable Qualified
Survey, all of the improvements on each Mortgage Loan Collateral Property lie
wholly within the boundaries and building restriction lines of the such
Mortgage Loan Collateral Property, and no improvements on adjoining property
encroach upon any Mortgage Loan Collateral Property, and no easements or other
encumbrances upon any Mortgage Loan Collateral Property encroach upon any of
the improvements, so as, in either case, to adversely affect the value or
marketability of the applicable Mortgage Loan Collateral Property, except those
which are insured against by a Qualified Title Insurance Policy.  All of the improvements on each of the Other
Properties lie wholly within the boundaries and building restriction lines of
the such Other Properties, except to the extent that failure of any
improvements to lie wholly within such boundaries and building restriction
lines does not cause a Portfolio Material Adverse Effect; and no improvements
on adjoining property encroach upon any of the Other Properties, and no easements
or other encumbrances upon any of the Other Properties encroach upon any of the
improvements, so as, in either case, to cause a Portfolio Material Adverse
Effect.

 

4.23.        Physical Condition.

 

(a)           Based solely on the
Engineering Reports, each Mortgage Loan Collateral Property (including
sidewalks, storm drainage system, roof, plumbing system, HVAC system, fire
protection system, electrical system, equipment, elevators, exterior sidings
and doors, irrigation system and all structural components) is in good
condition, order and repair in all respects material to its use, operation or
value.  Each Other  Property (including sidewalks, storm drainage
system, roof, plumbing system, HVAC system, fire protection system, electrical
system, equipment, elevators, exterior sidings and doors, irrigation system and
all structural components) is in good condition, order and repair in all
respects material to its use, operation or value, except to the extent that the
failure of such Other Property to be in good condition, order and repair does
not result in a Portfolio Material Adverse Effect.

 

(b)           Based solely on the
Engineering Reports, Borrower is not aware of any material structural or other
material defect or damages in any of the Mortgage Loan Collateral Properties,
whether latent or otherwise.  Borrower is
not aware of any material structural or other material defect or damages in any
of the Other Properties, whether latent or otherwise, that would have a
Portfolio Material Adverse Effect.

 

53

 

(c)                                 No Borrower has received or is aware of
any other party’s receipt of written notice from any insurance company or
bonding company of any defects or inadequacies in any of the Properties which
would, alone or in the aggregate, adversely affect in any material respect the
insurability of the same or cause the imposition of extraordinary premiums or
charges thereon or of any termination or threatened termination of any policy
of insurance or bond.

 

4.24.                       Fraudulent Conveyance.  Borrower has
not entered into the Transaction or any of the Loan Documents with the actual
intent to hinder, delay or defraud any creditor.  Borrower has received reasonably equivalent
value in exchange for its obligations under the Loan Documents. On the Closing
Date, the fair salable value of each Borrower’s aggregate assets is and will,
immediately following the making of the Loan and the use and disbursement of
the proceeds thereof, be greater than such Borrower’s probable aggregate
liabilities (including subordinated, unliquidated, disputed and Contingent
Obligations).  Each Borrower’s aggregate
assets do not and, immediately following the making of the Loan and the use and
disbursement of the proceeds thereof will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be
conducted.  No Borrower intends to, and
does not believe that it will, incur debts and liabilities (including
Contingent Obligations and other commitments) beyond its ability to pay such
debts as they mature (taking into account the timing and amounts to be payable
on or in respect of obligations of such Borrower).

 

4.25.                       Management.  Except for
any Approved Management Agreement, no property management agreements are in
effect with respect to the Properties, other than sub-management agreements
entered into in accordance with the terms of the Approved Management
Agreements.

 

4.26.                       Condemnation.  Except as
listed on the Exception Report, no Condemnation has been commenced or is
contemplated with respect to all or any material portion of any of the Mortgage
Loan Collateral Properties or for the relocation of roadways providing access
to any of the Mortgage Loan Collateral Properties or, to Borrower’s knowledge,
is contemplated with respect to all or any material portion of any of the Other
Properties or for the relocation of roadways providing access to any of the
Other Properties.

 

4.27.                       Utilities and Public Access. 
Each  Property has adequate rights
of access to dedicated public ways (and makes no material use of any means of
access or egress that is not pursuant to such dedicated public ways or
recorded, irrevocable rights-of-way or easements) and is adequately served by
all public utilities necessary to the continued use and enjoyment of such
Property as presently used and enjoyed.

 

4.28.                       Environmental Matters. 
Except as disclosed in the Environmental Reports and except as disclosed
on the Exception Report:

 

(i)                                    To Borrower’s knowledge, each Property is
in compliance in all material respects with all Environmental Laws applicable
to such Property (which compliance includes, but is not limited to, the
possession of, and compliance with, all environmental, health and safety
permits, approvals, licenses, registrations and other governmental

 

54

 

authorizations required in connection with the ownership and operation
of such Property under all Environmental Laws).

 

(ii)                                 No Environmental Claim is pending with
respect to any of the Properties, nor, to Borrower’s knowledge, is any
threatened, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to any
Borrower or any of the Properties.

 

(iii)                              Without limiting the generality of the foregoing, to
Borrower’s knowledge, there is not present at, on, in or under any Property,
any Hazardous Substances, PCB-containing equipment, asbestos or asbestos
containing materials, underground storage tanks or surface impoundments for any
Hazardous Substance, lead in drinking water (except in concentrations that
comply with all Environmental Laws), or lead-based paint, in each case in
violation of Environmental Law.

 

(iv)                             To Borrower’s knowledge, there have not
been and are no past, present or threatened Releases of any Hazardous Substance
from or at any of the Properties that are reasonably likely to form the basis
of any Environmental Claim, and, to Borrower’s knowledge, there is no threat of
any Release of any Hazardous Substance migrating to any of the Properties.

 

(v)                                To Borrower’s knowledge, no Liens are
presently recorded with the appropriate land records under or pursuant to any
Environmental Law with respect to any of the Properties and, to Borrower’s
knowledge, no Governmental Authority has been taking any action to subject any
of the Properties to Liens under any Environmental Law.

 

(vi)                             To Borrower’s knowledge, there  have been no material environmental
investigations, studies, audits, reviews or other analyses conducted by or that
are in the possession of Borrower in relation to any of the Properties which
have not been made available to Lender.

 

4.29.                       Assessments.  There are no
pending or, to Borrower’s knowledge, proposed special or other assessments for
public improvements or otherwise affecting any of the Properties, nor are there
any contemplated improvements to any of the Properties that may result in such
special or other assessments.  No extension
of time for assessment or payment by Borrower of any federal, state or local
tax is in effect.

 

4.30.                       No Joint Assessment.  No Borrower
has suffered, permitted or initiated the joint assessment of any of the
Properties (i) with any other real property constituting a separate tax
lot, or (ii) with any personal property, or any other procedure whereby
the Lien of any Taxes which may be levied against such other real property or
personal property shall be assessed or levied or charged to any of the
Properties as a single Lien.

 

4.31.                       Separate Lots.  No portion of
any of the Properties is part of a tax lot that also includes any real property
that is not Collateral.

 

55

 

4.32.                       Permits; Certificate of Occupancy. 
Borrower has obtained all material Permits necessary for the present and
contemplated use and operation of each Property and that Borrower is obligated
to obtain under Legal Requirements.  The
permitted uses set forth in the Leases are in conformity in all material
respects with the certificate of occupancy and/or material Permits for such
Property and any other restrictions, covenants or conditions affecting such
Property and, to Borrower’s knowledge, the actual uses being made of each
Property are in conformity in all material respects with the certificate of
occupancy and/or Permits for such Property and any other restrictions,
covenants or conditions affecting such Property, in each case where
non-conformity would not have a Material Adverse Effect.

 

4.33.                       Flood Zone.  None of the
Improvements on any of the Properties is located in an area identified by the
Federal Emergency Management Agency or the Federal Insurance Administration as
a “100 year flood plain” or as having special flood hazards (including Zones A,
B, C, V and X and Shaded X areas), or, to the extent that any portion of any of
the Properties is located in such an area, such Property is covered by flood
insurance meeting the requirements set forth in Section 5.15(a)(ii).

 

4.34.                       Security Deposits.  Each Borrower
is in compliance in all material respects with all Legal Requirements relating
to security deposits.

 

4.35.                       Acquisition Documents.  Borrower has
made available to Lender true and complete copies of all material agreements
and instruments under which Borrower or any of its Affiliates or the seller of
any of the Properties have remaining material rights or material obligations in
respect of Borrower’s acquisition of the Properties.

 

4.36.                       Insurance.  Except with
respect to the Properties subject to a Net Lease, Borrower has obtained
insurance policies reflecting the insurance coverages, amounts and other
requirements set forth in this Agreement. 
All premiums on such insurance policies required to be paid as of the
Closing Date have been paid for the current policy period.  Borrower has not done, and to Borrower’s
knowledge, no other Person has done, by act or omission, anything which would
impair the coverage of any such policy.

 

4.37.                       Ground Leased Parcels.  With respect
to each Ground Leased Parcel, each of the following is true with respect to the
related Ground Lease (taking into account the terms of any applicable estoppel
letter):

 

(i)                                    true and complete copies of the Ground
Leases have been delivered to Lender, and except as set forth in the Exception
Report the Ground Leases or memoranda thereof have been duly recorded;

 

(ii)                                 to Borrower’s knowledge, the Ground
Leases are in full force and effect and no material default beyond applicable
grace, cure or notice periods has occurred thereunder nor, to Borrower’s
knowledge, is there any existing condition which, but for the passage of time
or the giving of notice or both, would result in a material default under the
terms of any of the Ground Leases;

 

56

 

(iii)                              except as set forth in the Exception
Report, the Ground Leases have original terms which extend not less than 30
years beyond the Maturity Date (assuming the exercise of all extension options
hereunder), taking into account any extension options that are freely
exercisable by the lessee under the Ground Lease, and all such extension
options have either been previously exercised or are first exercisable not less
than five years after the Maturity Date;

 

(iv)                             except as set forth in the Exception
Report, the Ground Leases do not restrict the use of any portion of the
Properties by the lessee, its successors or its assigns in a manner that would
cause a Material Adverse Effect;

 

(v)                                except as set forth in the Exception
Report, the Ground Leases permit the interest of the lessee thereunder to be
encumbered by leasehold mortgages and contains no restrictions on the identity
of a leasehold mortgagee;

 

(vi)                             except as set forth in the Exception
Report, the Ground Leases may not be amended, modified, cancelled or terminated
without the prior written consent of a leasehold mortgagee;

 

(vii)                          with respect to the Mortgage Loan
Collateral Properties, to Borrower’s knowledge, other than Permitted
Encumbrances, the Ground Leases are not subject to any Liens or encumbrances
superior to, or of equal priority with, the Mortgage (other than the ground
lessor’s fee interest);

 

(viii)                       with respect to the Mortgage Loan
Collateral Properties, to Borrower’s knowledge, other than Permitted
Encumbrances, there are no Liens encumbering the ground lessor’s fee interests,
and, except as permitted herein, Borrower shall not permit or cause any Lien to
become superior to the Ground Lease upon the related fee interest that may
hereafter be granted;

 

(ix)                               except as set forth in the Exception
Report, the Ground Leases are assignable by a holder of a leasehold mortgage
upon a foreclosure of such mortgage without the consent of the lessor
thereunder;

 

(x)                                  except as set forth in the Exception
Report, the Ground Leases require the lessor thereunder to give notice of any
default by the lessee to a holder of a leasehold mortgage; and the Ground
Leases further provide that no notice given thereunder is effective against
such holder, unless a copy has been given to such holder in the manner
described in such Ground Lease;

 

(xi)                               except as set forth in the Exception
Report, a holder of a leasehold mortgage is permitted at least 30 days in
addition to Borrower’s applicable cure period to cure any default under each of
the Ground Leases which is curable after the receipt of notice of any such
default before the lessor thereunder may terminate such Ground Lease (and,
where necessary, is permitted the opportunity to gain possession of the
interest of

 

57

 

the lessee under such
Ground Lease through legal proceedings or to take other action so long as such
holder is proceeding diligently);

 

(xii)                            except as set forth in the Exception
Report, in the case of any default which is not curable by a holder of a
leasehold mortgage, or in the event of the bankruptcy or insolvency of the
lessee under one of the Ground Leases, such holder has the right, following
termination of such existing Ground Lease or rejection thereof by a bankruptcy
trustee or similar party, to enter into a new ground lease with the lessor on
the same terms as such existing Ground Lease, and all rights of the lessee
under such Ground Lease may be exercised by or on behalf of such holder; and

 

(xiii)                         except as set forth in the Exception
Report, the Ground Leases do not impose any restrictions on subletting.

 

4.38.                       Intentionally Omitted.

 

4.39.                       Estoppel Certificates.  Borrower has
delivered to Lender true and complete copies of (a) the form(s) of
estoppel certificate heretofore sent by Borrower or an Affiliate to Tenants and
lessors under Ground Leases, and (b) each estoppel certificate received
back from any such Tenant or lessor prior to the Closing Date.

 

4.40                          Embargoed Person.  (a) None of the funds or other assets of
any of Borrower, any Single-Purpose Equityholder or Sponsor constitute property
of, or, to Borrower’s knowledge, are beneficially owned, directly or
indirectly, by any person, entity or government subject to trade restrictions
under federal law, including, without limitation, the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with
the Enemy Act, 50 U.S.C. App. 1 et seq. , and any executive orders or
regulations promulgated thereunder, with the result that (i) the
investment in any Borrower, any Single-Purpose Equityholder or Sponsor, as
applicable (whether directly or indirectly), is prohibited by law or (ii) the
Loan is in violation of law (any such person, entity or government, an “Embargoed
Person”); (b) to Borrower’s knowledge, no Embargoed Person has any
interest of any nature whatsoever in any Borrower, any Single-Purpose
Equityholder or Sponsor, as applicable (whether directly or indirectly), with
the result that (i) the investment in any Borrower, any Single-Purpose
Equityholder or Sponsor, as applicable (whether directly or indirectly) is
prohibited by law or (ii) the Loan is in violation of law and (c) to
Borrower’s knowledge, none of the funds of any Borrower, any Single-Purpose
Equityholder or Sponsor, as applicable, have been derived from any unlawful
activity with the result that (i) the investment in any Borrower, any
Single-Purpose Equityholder or Sponsor, as applicable (whether directly or
indirectly) is prohibited by law or (ii) the Loan is in violation of
law.  Notwithstanding Section 4.42
to the contrary, the representations and warranties contained in this Section 4.40
shall survive in perpetuity.

 

4.41                          Compliance with Anti-Terrorism, Embargo,
Sanctions and Anti-Money Laundering Laws.  Each
Borrower, and to Borrower’s knowledge, (a) each Person owning an interest
in any Borrower, any Single-Purpose Equityholder or Sponsor, (b) each
Single-Purpose Equityholder, if any, (c) Sponsor, and (d) each
property manager (including each Approved Property Manager): (i) is not
currently identified on the OFAC List and (ii) is not a Person with

 

58

 

whom a citizen of the United States is prohibited to engage in
transactions by any trade embargo, economic sanction, or other prohibition of
any Legal Requirement.  Borrower has
implemented procedures, and will consistently apply those procedures throughout
the term of the Loan, to ensure the foregoing representations and warranties
remain true and correct during the term of the Loan.

 

4.42.                       Tax Basis.  After giving
effect to the Transaction and certain other actions related thereto that will
be completed on or prior to the Closing Date, the U.S. Federal Income tax basis
of the Stepped-Up Properties (as defined below) will be increased in an
aggregate amount equal to the portion of the acquisition cost under the Merger
Agreement allocable to such Stepped-Up Properties on a pro rata basis,
which allocation shall be based on the ratio of the fair market value of such
Stepped-Up Properties to the fair market value of the total acquisition cost.  For purposes of this Section 4.42,
the term “Stepped-Up Properties” means properties other than those held
through partnerships or other similar joint ventures with third parties not
related to AFRT.

 

4.43.                       Survival.  Borrower
agrees that all of the representations of Borrower set forth in this Agreement
and in the other Loan Documents shall survive for so long as any portion of the
Indebtedness is outstanding.  All
representations, covenants and agreements made by Borrower in this Agreement or
in the other Loan Documents shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.  On the date of any
Securitization, on not less than 10 Business Days’ prior written notice, Borrower
shall deliver to Lender a certification (x) confirming that all of the
representations contained in this Agreement are true and correct in all
material respects as of the date of such Securitization, or (y) otherwise
specifying any changes in or qualifications to such representations as of such
date as may be necessary to make such representations consistent in all
material respects with the facts as they exist on such date.  Except as expressly required by this
Agreement and the other Loan Documents, Borrower shall have no further
obligation to update any representation or warranty nor shall any
representation or warranty be deemed to have been made on any date other than
the Closing Date or as of the date of any Securitization.

 

ARTICLE V

 

AFFIRMATIVE
COVENANTS

 

5.1.                             Existence.  Each
Borrower, each Property Owner and, if applicable, each Single-Purpose
Equityholder shall do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its existence and all rights, licenses,
Permits, franchises and other agreements necessary for the continued use and
operation of its business.  Each Borrower
and, if applicable, each Single-Purpose Equityholder shall deliver to Lender a
copy of each amendment or other modification to any of its organizational
documents promptly after the execution thereof.

 

59

 

5.2.                             Maintenance of Properties.

 

(a)                                 Borrower or its designee will keep or
cause each Property to be kept in good working order and repair, reasonable
wear and tear excepted.  Subject to Section 6.13,
the rights and obligations of Tenants under Leases and with respect to any
Encumbered Property, the provisions of any Encumbered Property Debt Documents,
Borrower shall from time to time make, or cause to be made, all reasonably
necessary and desirable repairs, renewals, replacements, betterments and
improvements thereto.

 

(b)                                Subject to the terms of any applicable
Leases, if and to the extent reasonably required by Lender, Borrower shall remediate
the Deferred Maintenance Conditions reasonably promptly following the Closing
Date, subject to Force Majeure, and upon request from Lender after the
expiration of such period shall deliver to Lender an Officer’s Certificate
confirming that such remediation has been substantially completed and that all
associated expenses then due and payable have been paid; provided that Borrower
shall be deemed to have satisfied its obligations hereunder with respect to any
matter that is the obligation of a Tenant under a Lease if Borrower shall be
using commercially reasonable efforts to cause such Tenant to complete such
matter pursuant to the terms of such Lease.

 

5.3.                             Compliance with Legal Requirements. 
Borrower shall comply with, and shall cause each Property to comply with
and be operated, maintained, repaired and improved in compliance in all
material respects with, all Legal Requirements, Insurance Requirements and all
material contractual obligations by which Borrower is legally bound.

 

5.4.                             Impositions and Other Claims. 
Each Borrower shall pay and discharge, or cause to be paid and
discharged, all taxes, assessments and governmental charges levied upon it, its
income and its assets and the Properties prior to delinquency, as well as all
lawful claims for labor, materials and supplies or otherwise, subject to any
rights to contest contained in the definition of Permitted Encumbrances.  Each Borrower shall file or cause to be filed
all federal, state and local tax returns and other reports that it or its subsidiaries
are required by law to file.  If any law
or regulation applicable to Lender, any Note, any of the Mortgage Loan
Collateral Properties or any of the Mortgages is enacted that deducts from the
value of property for the purpose of taxation any Lien thereon, or imposes upon
Lender the payment of the whole or any portion of the taxes or assessments or
charges or Liens required by this Agreement to be paid by Borrower, or changes
in any way the laws or regulations relating to the taxation of mortgages or
security agreements or debts secured by mortgages or security agreements or the
interest of the mortgagee or secured party in the property covered thereby, or
the manner of collection of such taxes, so as to affect any of the Mortgages,
the Indebtedness or Lender, then Borrower, upon demand by Lender, shall pay
such taxes, assessments, charges or Liens, or reimburse Lender for any amounts
paid by Lender.  If in the opinion of
Lender’s counsel it might be unlawful to require Borrower to make such payment
or the making of such payment might result in the imposition of interest beyond
the maximum amount permitted by applicable Law, Lender may elect to declare all
of the Indebtedness to be due and payable 90 days from the giving of written
notice by Lender to Borrower.

 

5.5.                             Access to Properties. 
Subject to the rights of Tenants under Leases, Borrower shall permit
agents, representatives and employees of Lender and the Servicer to

 

60

 

inspect the Properties or any portion thereof, and/or the books and
records of Borrower, at such reasonable times as may be requested by Lender
upon reasonable advance notice.

 

5.6.                             Cooperate in Legal Proceedings. 
Except with respect to any claim by Borrower against Lender, Borrower
shall cooperate fully with Lender with respect to any proceedings before any
Governmental Authority which may in any way affect the rights of Lender
hereunder or under any of the Loan Documents and, in connection therewith,
Lender may, at its election, participate or designate a representative to
participate in any such proceedings.

 

5.7.                             Leases.

 

(a)                                 Upon Lender’s request, Borrower shall
furnish Lender with executed copies of all Leases, together with a detailed
breakdown of income and cost associated therewith to the extent the same has
been prepared by Borrower.  All new
Leases and renewals or amendments of Leases must be entered into on an
arms-length basis with Tenants whose identity and creditworthiness, in Borrower’s
good faith judgment, is appropriate for tenancy in property of comparable
quality, must provide for rental rates and other economic terms which, in
Borrower’s good faith judgment, taken as a whole, are at least equivalent to
then-existing market rates, based on the applicable market, and must contain
terms and conditions that are commercially reasonable (in each case, unless
Lender consents to such Lease in its sole discretion).  Subject to the terms of the Encumbered
Property Debt Documents, all new Leases must provide that they are subject and
subordinate to any current or future mortgage financing on the applicable
Property and that the Tenant agrees to attorn to any foreclosing mortgagee at
such mortgagee’s request, provided such mortgagee agrees to not disturb such
Tenant’s tenancy except in accordance with its Lease.

 

(b)                                All new Leases which are Major Leases,
and all terminations, renewals and material amendments of Major Leases, and any
surrender of rights under any Major Lease, shall be subject to the prior
written consent of Lender, which consent shall not be unreasonably withheld,
conditioned or delayed.  To facilitate
Borrower’s leasing process, Borrower shall have the right to present
prospective leasing transactions to Lender for its approval prior to the
negotiation of a final Lease.  Such
presentation shall include a summary term sheet of all material terms of the
proposed Lease or a draft of the proposed Lease together with any additional
information concerning such proposed Lease and the proposed Tenant thereunder
as may be reasonably requested by Lender (the “Lease Term Sheet”).  Each request for approval of a Lease or a
Lease Term Sheet shall be submitted to Lender in an envelope marked “URGENT –
LENDER’S ATTENTION REQUIRED WITHIN 7 BUSINESS DAYS”, together with (i) a
copy of the proposed Lease or the Lease Term Sheet, (ii) a summary of the
economic terms thereof and any termination options contained therein together
with a detailed breakdown of income and costs associated with the proposed
Lease, and (iii) copies of all written materials obtained by the
applicable Borrower in connection with its evaluation of the creditworthiness
of the proposed Tenant, and shall be deemed approved if Lender shall not have
notified Borrower in writing of its disapproval thereof and the reasons for
such disapproval within three Business Days after Borrower shall have given
Lender written notice confirming that at least seven Business Days have elapsed
since such submission, which written notice shall be submitted to Lender in an

 

61

 

envelope marked “URGENT – SECOND AND FINAL NOTICE – LENDER’S ATTENTION
REQUIRED BY [DATE]”.  If Lender approves
or is deemed to have approved the Lease Term Sheet, Lender’s approval of the
final Lease shall be limited to Lender’s reasonable confirmation that the final
Lease does not (i) deviate in any material adverse respect from the terms
set forth on the Lease Term Sheet or contain any material adverse terms not set
forth in the Lease Term Sheet, or (ii) deviate in any material respect
from the approved Lease form (and otherwise such final Lease shall be subject
to Lender’s reasonable written approval). 
Borrower shall deliver to Lender a copy of any Lease executed pursuant
to a Lease Term Sheet together with an Officer’s Certificate indicating any
material deviations from such Lease Term Sheet.

 

(c)                                 Borrower shall (i) observe and
perform all the material obligations imposed upon the lessor under the Leases; (ii) enforce,
to the extent commercially reasonable, 
all of the material terms, covenants and conditions contained in the
Leases on the part of the lessee thereunder to be observed or performed, short
of termination thereof, except that Borrower may terminate any Lease following
a material default thereunder by the respective Tenant; (iii) not collect
any of the rents thereunder more than one month in advance; (iv) not
execute any assignment of lessor’s interest in the Leases or associated rents
other than the assignments of rents and leases under the Mortgages and the
Encumbered Debt Documents; and (v) not cancel or terminate any guarantee
of any of the Major Leases without the prior written consent of Lender.  Borrower shall deliver to each new Tenant at
a Mortgage Loan Collateral Property a Tenant Notice upon execution of such
Tenant’s Lease or include same in such Tenant’s Lease or invoices, and promptly
thereafter deliver to Lender a copy thereof and evidence of such Tenant’s
receipt thereof.

 

(d)                                To the extent required by applicable law,
security deposits of Tenants under all Leases, whether held in cash or any
other form, shall not be commingled with any other funds of Borrower and, if
cash, shall be deposited by Borrower in an Eligible Account or such other
account at such commercial or savings bank as may be reasonably satisfactory to
Lender, which account (if any) is hereby pledged to Lender.  Borrower shall, upon Lender’s request,
provide Lender with evidence reasonably satisfactory to Lender of Borrower’s
compliance with the foregoing.  During
the continuance of any Event of Default, Subject to the Encumbered Property
Debt Documents, Borrower shall, upon Lender’s request, deposit with Lender in
an Eligible Account pledged to Lender an amount equal to the aggregate security
deposits of the Tenants (and any interest theretofore earned on such security
deposits and actually received by Borrower) which Borrower had not returned to
the applicable Tenants or applied in accordance with the terms of the
applicable Lease.

 

(e)                                 Whenever a Lease at a Mortgage Loan Collateral
Property is terminated, whether by buy-out, cancellation, default or otherwise,
and Borrower is entitled to any payment, fee or penalty in respect of such
termination, Borrower shall promptly cause such payment, fee or penalty to be
deposited into an Eligible Account pledged to Mortgage Lender in accordance
with the Mortgage Loan Agreement. 
Subject to the terms of the Encumbered Property Debt Documents, whenever
a Lease at an Other Property is terminated, whether by buy-out, cancellation,
default or otherwise, and Borrower or a Property Owner is entitled to any
payment, fee or penalty in respect of such termination (a “Termination Fee”),
Borrower shall promptly cause such Termination Fee to be deposited into an
Eligible Account pledged to Lender.

 

62

 

Provided no Event of Default has occurred and is continuing, (i) Lender
shall disburse such Termination Fee to Borrower at the written request of
Borrower in respect of Leasing Commissions and Tenant Improvement costs
incurred by Borrower in connection with replacement Leases at any Properties
other than Value Add Pool Properties, Disposition Asset Properties or any
Property with an Aggregate Allocated Loan Amount of zero, in each case provided
such Lease is entered into in accordance with the terms of this Agreement.

 

(f)                                   Within ten Business Days after receipt of
written request therefor, provided Lender has received a copy of the executed
corresponding Lease, Lender shall execute and deliver to Borrower a subordination,
non-disturbance and attornment agreement (an “SNDA”).  If the form of the SNDA shall be prescribed
by the Lease in question, and Lender shall have approved (or been deemed, in
accordance with Section 5.7(b) hereof,
to have approved) such Lease (and the form of SNDA was attached to the draft
Lease that was delivered to Lender as part of Borrower’s request for approval),
Lender shall execute and deliver the SNDA in the form prescribed by such
approved Lease.  Notwithstanding the
foregoing, in the case of any Lease as to which Lender’s approval is not
required pursuant to this Section 5.7
where such tenant thereunder requests an SNDA, the SNDA to be executed and
delivered by Lender shall be in substantially the form attached hereto as Exhibit G,
and such form shall also be attached to Borrower’s standard form of Lease as
approved by Lender.  Lender agrees to
reasonably negotiate the terms of the SNDA with any Tenant under any Lease, but
shall not be required to execute an SNDA that differs in any material respect
from the form attached hereto as Exhibit G.  All reasonable out-of-pocket attorneys’ fees
and disbursements incurred by Lender in connection with such SNDA shall be
payable by Borrower within ten Business Days after Lender’s written request
therefor, whether or not the SNDA is ultimately executed and/or recorded.

 

5.8.                             Plan
Assets, etc.  Each Borrower will do, or cause to be
done, all things  necessary to ensure
that it will not be deemed to hold Plan Assets at any time.

 

5.9.                             Further Assurances. 
Each Borrower shall, at such Borrower’s sole cost and expense, from time
to time as reasonably requested by Lender, execute, acknowledge, record,
register, file and/or deliver to Lender such other instruments, agreements,
certificates and documents (including Uniform Commercial Code financing
statements and amended or replacement mortgages) as Lender may reasonably
request to evidence, confirm, perfect and maintain the Liens securing or
intended to secure the obligations of Borrower under the Loan Documents or to
facilitate a replacement of the Cash Management Bank pursuant to Section 3.1(c) or
a bifurcation of the Note pursuant to Sections 1.3(c) and/or 9.7(a),
in each case if requested by Lender, and do and execute all 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 request from time to time.  Each Borrower hereby authorizes and appoints
Lender as its attorney-in-fact to execute, acknowledge, record, register and/or
file such instruments, agreements, certificates and documents, and to do and
execute such acts, conveyances and assurances, should such Borrower fail to do
so itself in violation of this Agreement within 5 Business Days following
written request from Lender, in each case without the signature of such
Borrower.  The foregoing grant of
authority is a power of attorney coupled with an interest and such appointment
shall be

 

63

 

irrevocable for the term of this Agreement.  Each Borrower hereby ratifies all actions
that such attorney shall lawfully take or cause to be taken in accordance with
this Section 5.9.  Lender
shall provide Borrower with copies on any instruments executed by Lender in
accordance with this Section 5.9.

 

5.10.                       Management of Properties.

 

(a)                                 Subject to the terms of the Encumbered
Property Debt Documents, each Property, other than a Property that is entirely
subject to a Lease under which the Tenant is responsible for the management of
the Property and liable for all related costs thereunder, shall be managed at
all times by an Approved Property Manager pursuant to an Approved Management
Agreement.  Pursuant to the Subordination
of Property Management Agreement or Agreements, each Approved Property Manager
shall agree that its Approved Management Agreement and all fees thereunder
(including any incentive fees) are subject and subordinate to the Indebtedness.  Borrower may from time to time appoint an
Approved Property Manager to manage the applicable Property pursuant to an
Approved Management Agreement, and such successor manager shall execute for
Lender’s benefit a Subordination of Property Management Agreement in form and
substance reasonably satisfactory to Lender (and Lender hereby agrees that a
Subordination of Property Management Agreement in substantially the same form
as the Subordination of Property Management Agreement delivered to Lender by
Borrower as of the date hereof is deemed to be reasonably satisfactory to
Lender).  The per annum fees of the
Approved Property Manager (including any incentive fees) shall not, at any
time, exceed 3.5% of the gross revenues of the relevant Property for the then
most recently concluded Test Period.

 

(b)                                Borrower shall cause each Approved
Property Manager (including any successor Approved Property Manager) to
maintain at all times worker’s compensation insurance as required by
Governmental Authorities.

 

(c)                                 Borrower shall notify Lender in writing
of any material default of any Borrower or an Approved Property Manager under
any of the Approved Management Agreements, after the expiration of any
applicable cure periods, of which Borrower has actual knowledge.  Lender shall have the right, after reasonable
notice to Borrower and in accordance with such Subordination of Management
Agreement, to cure defaults of Borrower under such Approved Management
Agreement.  Any reasonable out-of-pocket
expenses incurred by Lender to cure any such default shall constitute a part of
the Indebtedness and shall be due from Borrower upon demand by Lender.

 

(d)                                Subject in the case of Encumbered
Properties to the Encumbered Property Debt Documents, and in the case of the
Joint Venture Properties to their respective Qualified Joint Venture
Agreements, upon the occurrence and during the continuance of an Event of
Default, or a material default by an Approved Property Manager under an
Approved Management Agreement after the expiration of any applicable cure
period, which default is reasonably likely to result in a Material Adverse
Effect, or upon the filing of a bankruptcy petition or the occurrence of a
similar event with respect to an Approved Property Manager, Lender may, in its
sole discretion, require Borrower to terminate the Approved Management

 

64

 

Agreement and engage an Approved Property Manager selected by Lender to
serve as replacement Approved Property Manager pursuant to an Approved
Management Agreement.

 

5.11.                       Notice of Material Event. 
Borrower shall give Lender prompt notice (containing reasonable detail)
of (i) any material change in the financial or physical condition of any
of the Properties taken as a whole, as reasonably determined by Borrower,
including the termination or cancellation of any Major Lease, the termination
or cancellation of terrorism or other insurance required by this Agreement, the
exercise of shedding, contraction or termination rights under any Lease which
Lease covers in excess of 125,000 rentable square feet or the accrual of such
rights by any Tenant under any Lease which Lease covers in excess of 125,000
rentable square feet, (ii) any litigation or governmental proceedings
pending or threatened in writing against any Borrower which is reasonably
likely to have a Portfolio Material Adverse Effect, (iii) any notice by a
lender asserting an event of default by an Encumbered Property Owner or any of
its Affiliates under any Encumbered Property Debt Documents, and (iv) any
correspondence with Tenants under Major Leases with respect to any alleged
defaults by either party thereunder.

 

5.12.                       Annual Financial Statements. 
As soon as available, and in any event within 120 days after the close
of each Fiscal Year, beginning with the 2008 Fiscal Year Borrower shall furnish
to Lender, in an Excel spreadsheet file in electronic format (which may be via
an intralinks site at Borrower’s sole cost and expense), or, in the case of
predominantly text documents, in Adobe .pdf format, a balance sheet of Borrower
and (except to the extent stock in Sponsor is publicly traded on a major stock
exchange) Sponsor as of the end of such year, which statements with respect to
Borrower shall be on both a consolidated basis with respect to the Properties
as a whole and an individual Property basis with respect to the Mortgage Loan
Collateral Properties, together with related statements of income for such
Fiscal Year, audited by an Approved Accounting Firm whose opinion shall be to
the effect that such financial statements have been prepared in accordance with
GAAP applied on a consistent basis and shall not be qualified as to the scope
of the audit or as to the status of Borrower as a going concern.  Together with Borrower’s annual financial
statements, Borrower shall furnish to Lender in hard copy and electronic
format:

 

(i)                                    then current rent roll and occupancy
reports of the Properties;

 

(ii)                                 to the extent not otherwise described in
this Section 5.12, copies of all financial statements and similar
reports delivered to Encumbered Property Lenders; and

 

(iii)                              such other information as Lender shall
reasonably request, to the extent readily available to Borrower or Sponsor
without material cost or expense.

 

5.13.                       Quarterly Financial Statements. 
As soon as available, and in any event within 60 days after the end of
each Fiscal Quarter (including year-end), Borrower shall furnish to Lender, in
an Excel spreadsheet file in electronic format (which may be via an intralinks
site at Borrower’s sole cost and expense), or, in the case of predominantly
text documents, in Adobe .pdf format, quarterly and year-to-date unaudited
financial statements prepared for such fiscal quarter with respect to Borrower
and (except to the extent stock in Sponsor is publicly traded on

 

65

 

a major stock exchange) Sponsor, which statements with
respect to Borrower shall be on both a consolidated basis with respect to the
Properties as a whole and an individual Property basis with respect to the
Mortgage Loan Collateral Properties, including a balance sheet and operating
statement as of the end of such Fiscal Quarter, together with related
statements of income, for such Fiscal Quarter and for the portion of the Fiscal
Year ending with such Fiscal Quarter, which statements shall be accompanied by
an Officer’s Certificate certifying that the same are true and correct and were
prepared in accordance with GAAP applied on a consistent basis, subject to
changes resulting from audit and normal year-end audit adjustments.  Each such quarterly report shall be
accompanied by the following, in hard copy and electronic format:

 

(i)                                    a statement in reasonable detail which
calculates Net Operating Income for each of the Fiscal Quarters in the Test
Period ending in such Fiscal Quarter, in the case of each such Fiscal Quarter,
ending at the end thereof;

 

(ii)                                 copies of each of the Major Leases signed
during such quarter and each other Lease signed during such quarter that is
requested by Lender, and a summary of each material Lease (and, to the extent
prepared by Borrower or Approved Property Manager in the ordinary course of
business, each other Lease) signed during such quarter, which shall include the
Tenant’s name, lease term, base rent, Tenant Improvements, leasing commissions
paid, free rent and other material tenant concessions;

 

(iii)                              then current rent roll and occupancy
reports;

 

(iv)                             to the extent not otherwise described in
this Section 5.13, copies of all financial statements and similar
reports delivered to Encumbered Property Lenders;

 

(v)                                a copy of AFRT’s business plan, to the
extent updated after the date hereof; and

 

(vi)                             such other information as Lender shall
reasonably request, to the extent readily available to Borrower or Sponsor
without material cost or expense.

 

5.14.                       Monthly Financial Statements. 
If requested by Lender or during an Event of Default (or, in the case of
item (iv) below, at all times), Borrower shall furnish within 30 days
after the end of each calendar month (other than the calendar month immediately
following the final calendar month of any Fiscal Year or Fiscal Quarter, in
which case Borrower shall furnish same within the respective time period
specified in Section 5.12 or 5.13, as applicable), in an
Excel spreadsheet file in electronic format (which may be via an intralinks
site at Borrower’s sole cost and expense) or, in the case of predominantly text
documents, in Adobe .pdf format, monthly and year-to-date unaudited financial
statements prepared for the applicable month with respect to Borrower,
including a balance sheet and operating statement as of the end of such month,
together with related statements of income, for such month and for the portion
of the Fiscal Year ending with such month, which statements shall be accompanied
by an Officer’s Certificate certifying that the same are true and correct and
were prepared in accordance with GAAP applied on a consistent basis, subject to
changes resulting from audit and normal year-end audit adjustments.  Each such monthly report shall be accompanied
by the following:

 

66

 

(i)            beginning with the
calendar month ending June 30, 2008, a summary of material Leases (and, to
the extent prepared by Borrower or Approved Property Manager in the ordinary
course of business, each other Lease) signed during such month, which summary
shall include the Tenant’s name, lease term, base rent, escalations, Tenant
Improvements, leasing commissions paid, free rent and other concessions;

 

(ii)           then current rent roll and occupancy
reports;

 

(iii)          to the extent not otherwise described
in this Section 5.14, copies of all financial statements and
similar reports delivered to Encumbered Property Lenders; and

 

(iv)          such other information as Lender shall
reasonably request, to the extent readily available to Borrower or Sponsor
without material cost or expense.

 

5.15.        Insurance.

 

(a)           Borrower shall obtain and maintain
with respect to the Properties, for the mutual benefit of Borrower and Lender
at all times, the following policies of insurance:

 

(i)            insurance against
loss or damage by standard perils included within the classification “All Risks
Special Form Cause of Loss” (including coverage for damage caused by
windstorm and hail).  Such insurance
shall (A) be in an aggregate amount equal to the full replacement cost of
the Properties and fixtures (without deduction for physical depreciation); (B) have
deductibles acceptable to Lender (but in any event not in excess of $50,000), with the exception of flood coverage which may have a
deductible no greater than $500,000 and with the exception of wind and earthquake
coverage which may have a deductible no greater than 5% of the total insurable
value of the applicable Property; (C) be paid annually in advance; (D) contain
a “Replacement Cost Endorsement” and an “Agreed Upon Amount Endorsement” with a
waiver of coinsurance; (E) include an ordinance or law coverage
endorsement containing Coverage A: “Loss to the Undamaged Portion”, Coverage B: “Demolition Cost” and Coverage C: “Increased
Cost of Construction” coverages  in such
amounts as Lender may reasonably require but in no event less than a
$50,000,000 blanket sublimit, unless a Property is insured separately, in which
case the sublimit applicable thereto shall not exceed 10% of the replacement
cost of such Property; (F) permit that the improvements and other property
covered by such insurance be rebuilt at another location in the event that such
improvements and other property cannot be rebuilt at the location on which they
are situated as of the date hereof.   If
such insurance excludes mold, then the Borrowers shall implement a mold
prevention program satisfactory to Lender;

 

(ii)           Flood insurance if
the Property is located in a “100 Year Flood Plain” or “special hazard area”
(including Zones A, B, C, V, X and Shaded X Areas) in an amount equal to the
maximum limit of coverage available from FEMA/FIA, plus such excess limits
requested by Lender  to the extent available in the conventional
insurance marketplace, with a deductible not in excess of $500,000;

 

67

 

(iii)          commercial general
liability insurance, including broad form coverage of property damage, blanket
contractual liability and personal injury (including death resulting
therefrom), containing minimum limits per occurrence of not less than
$1,000,000 with not less than a $2,000,000 general aggregate “per location” for any policy year.  In addition, at least $100,000,000 excess or
umbrella liability insurance,  unless a
Property is insured separately, in which case the limits applicable thereto
shall not be less than $25,000,000, on terms consistent with the commercial
general liability insurance policy required under this Section 5.15,
shall be obtained and maintained for any and all claims, including all legal
liability imposed upon Borrower and all related court costs and attorneys’ fees
and disbursements, in accordance with the policy form inclusive of contractual
liability;

 

(iv)          rental loss and/or
business interruption insurance covering the 18 month period commencing on the
date of any Casualty or Condemnation, and containing an extended period of
indemnity endorsement covering the 12 month period commencing on the date on
which the applicable Property has been restored, as reasonably determined by
the applicable insurer.  The amount of
such insurance shall be increased from time to time as and when the gross
revenues from such Property increase;

 

(v)           insurance against
loss or damage from explosion of steam boilers, air conditioning equipment,
high pressure piping, machinery and equipment, pressure vessels or similar
apparatus now or hereafter installed in any of the Improvements (without
exclusion for explosions) and insurance against loss of occupancy or use
arising from any breakdown, in such amounts as are generally available and are
generally required by institutional lenders for properties comparable to the
Properties;

 

(vi)          if applicable, worker’s compensation
insurance with respect to all employees of Borrower as and to the extent
required by any Governmental Authority or Legal Requirement and employer’s
liability coverage of at least $1,000,000;

 

(vii)         during any period of
repair, alteration or restoration, and only if and to the extent the property
and liability policies acquired by Borrower pursuant hereto do not contain such
coverage, (A) owner’s contingent or protective liability insurance; and (B) the
insurance required pursuant to Section 5.15(i) and (iv) written
on a so-called builder’s risk completed value form, which coverage shall (1) be
on a non-reporting form, (2) cover any improvements under construction,
being renovated or otherwise being altered, including coverage for 100% of the
total hard and reoccurring soft construction costs following a casualty, (3) include
permission to occupy the applicable Property and  (4) be in an amount equal to not less
than the full insurable value of each of the Properties against such risks
(including fire and extended coverage and collapse of the Improvements to
agreed limits) as Lender may request, all of which shall be in form and
substance acceptable to Lender;

 

(viii)        [Intentionally
Deleted]

 

68

 

(ix)           if required by
Lender, earthquake insurance (A) with minimum coverage equivalent to the
greater of  1.0x SUL (scenario upper
loss) and 1.5x SEL (scenario expected loss), (B) having a deductible
approved by Lender (but in any event not be in excess of 5% of the total
insurable value of such Property, unless such limit is not commercially
available in the insurance marketplace), and (C) if the Property is legally
nonconforming under applicable zoning ordinances and codes, containing
ordinance of law coverage in amounts reasonably acceptable to Lender;

 

(x)            so long as the
Terrorism Risk Insurance Program Reauthorization Act of 2007 (“TRIPRA”)
or a similar or subsequent statute is in effect, terrorism insurance for
Certified and Non-Certified acts (as such terms are defined in TRIPRA or
similar or subsequent statute) in an amount equal to the full replacement cost
of the Properties (plus twelve months of business interruption coverage).  If TRIPRA or a similar or subsequent statute
is not in effect, then provided that terrorism insurance is commercially
available, Borrower shall be required to carry terrorism insurance throughout
the term of the Loan as required by the preceding sentence, but in such event
Borrower shall not be required to spend on terrorism insurance coverage more
than 150% of the amount of the insurance premium that is payable at such time
in respect of the casualty and business interruption/rental loss insurance
required hereunder (without giving effect to the cost of terrorism and
earthquake components of such casualty and business interruption/rental loss
insurance); and

 

(xi)           such other
insurance as may from time to time be reasonably requested by Lender.

 

(b)           All
policies of insurance (the “Policies”) required pursuant to this Section 5.15
shall be issued by one or more primary insurers having a claims-paying ability
of at least “A” or “A2” by each of the Rating Agencies, or by a syndicate of
insurers through which at least 75% of the coverage (if there are 4 or fewer
members of the syndicate) or at least 60% of the coverage (if there are 5 or
more members of the syndicate) is with carriers having such claims-paying
ability ratings (provided that the first layers of coverage are from carriers
rated at least “A” or “A2” and all such carriers shall have claims-paying
ability ratings of not less than “BBB+” 
or “Baa1”); provided, however, that FM Global and
Affiliated FM are hereby approved as providers of the all-risk coverage
required hereunder in amounts not exceeding the respective amounts provided as
of the date hereof, to the extent that each maintains an AM Best and Fitch
rating no lower than that in effect as of the Closing Date.  Notwithstanding anything to the contrary
herein, except in connection with FM Global and Affiliated FM, for purposes of
determining whether the insurer ratings requirements set forth above have been
satisfied, (1) any insurer that is not rated by Fitch will be regarded as
having a Fitch rating that is the equivalent of the rating given to such
insurer by any of Moody’s and S&P that does rate such insurer (or, if both
such rating agencies rate such insurer, the lower of the two ratings), and (2) any
insurer that is not rated by Moody’s will be regarded as having a Moody’s
rating of “Baa1” or better if it is rated “A-” or better by S&P and will be
regarded as having a Moody’s rating of  “A2”
or better if it is rated “A+” or better by S&P.

 

69

 

(c)           All Policies required pursuant to
this Section 5.15:

 

(i)            shall
be maintained throughout the term of the Loan without cost to Lender;

 

(ii)           with
respect to casualty policies, shall contain a standard noncontributory
mortgagee clause naming Lender and its successors and assigns as first
mortgagee and loss payee;

 

(iii)          with
respect to liability policies, shall name Lender and its successors and assigns
as additional insureds;

 

(iv)          with
respect to rental or business interruption insurance policies, shall name
Lender and its successors and/or assigns as loss payee;

 

(v)           shall
contain an endorsement providing that neither Borrower nor Lender nor any other
party shall be a coinsurer under said Policies;

 

(vi)          shall
contain an endorsement providing that Lender shall receive at least 30 days’
prior written notice of any modification, reduction or cancellation thereof;

 

(vii)         shall
contain an endorsement providing that no act or negligence of Borrower or of a
Tenant or other occupant shall affect the validity or enforceability of the
insurance insofar as a mortgagee is concerned;

 

(viii)        shall
contain a waiver of subrogation against Lender;

 

(ix)           shall
contain an endorsement providing that Lender shall not be liable for any
insurance premiums thereon or subject to any assessments thereunder;

 

(x)            shall contain deductibles which, in
addition to complying with any other requirements expressly set forth in Section 5.15(a),
are acceptable to Lender and are no larger than is customary for similar
policies covering similar properties in the geographic market in which the
applicable Property is located;

 

(xi)           may be in the form of a blanket
policy, provided that Borrower shall provide evidence satisfactory to Lender
that the insurance premiums for the Properties are separately allocated under
such Policy to the Properties and that (i) payment of such allocated
amount shall maintain the effectiveness of such Policy as to the Properties
notwithstanding the failure of payment of any other portion of premiums, and (ii) overall
insurance limits will under no circumstance limit the amount that will be paid
in respect of the Properties, and provided further that any such blanket policy
shall contain an amendment setting forth that (A) the aggregate limit under
such policy shall apply separately to each property covered thereunder, and (B) unless
otherwise agreed to by Lender, the limit of such policy shall be a “true
blanket limit” and not limited by a schedule of values for the Properties
covered thereby.

 

70

 

(d)           Borrower
shall pay the premiums for all Policies as the same become due and
payable.  Copies of such Policies shall
be delivered to Lender promptly upon request. 
Not later than 30 days prior to the expiration date of each Policy,
Borrower shall deliver to Lender evidence, reasonably satisfactory to Lender,
of its renewal.

 

(e)           Borrower
shall not 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.  If at any time Lender is not in receipt of
written evidence that all Policies are in full force and effect when and as
required hereunder, Lender shall have the right to take such action as Lender
deems necessary to protect its interest in the Properties, including, without
limitation, the obtaining of such insurance coverage as Lender in its sole
discretion deems appropriate (but limited to the coverages and amounts required
hereunder).  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, and shall bear interest at the Default Rate.

 

(f)            Notwithstanding
anything to the contrary contained in this Section 5.15, (i) Lender
hereby approves the insurance program described on Exhibit E hereto
and any renewal thereof upon the same terms (subject to any increases in such
coverage required to reflect increased revenues and values), provided
the insurers maintain their current ratings as in effect on the Closing Date or
otherwise satisfy the requirements herein, (ii) with respect to the Encumbered Properties, the provisions of
this Section 5.15 shall be subject to the applicable provisions of
the Encumbered Debt Documents and (iii) with respect to the Properties
subject to a Net Lease, to the extent Lender has received reasonably
satisfactory evidence of the insurance maintained by a Tenant under a Net
Lease, Borrower shall be deemed to have complied with the requirements of this Section 5.15
with respect to the Property subject to such Net Lease).  Promptly after the date hereof, Borrower
shall request and use commercially reasonable efforts to cause the Tenant under
each Net Lease to add Lender as an additional insured or loss payee (as
applicable) under such insurance, in each case if and to the extent permitted
thereunder.

 

5.16.        Casualty
and Condemnation.

 

(a)           Borrower
shall give prompt notice to Lender of any Casualty or Condemnation in excess of
$250,000.  Subject to the Encumbered
Property Debt Documents, Leases and each Qualified Joint Venture Agreement,
Lender may (x) jointly with Borrower settle and adjust any claims, (y) during
the continuance of an Event of Default, settle and adjust any claims without
the consent or cooperation of Borrower, or (z) allow Borrower to settle
and adjust any claims; except that if no Event of Default has occurred and is
continuing, Borrower may settle and adjust any claim not in excess of
$2,500,000 if such settlement or adjustment is carried out in a competent and
timely manner, but Lender shall be entitled to collect and receive (as set
forth below) any and all Loss Proceeds. 
The reasonable expenses incurred by Lender in the adjustment and
collection of Loss Proceeds shall become part of the Indebtedness and shall be
reimbursed by Borrower to Lender within 10 Business Days of demand therefor.

 

(b)           Subject,
where applicable, to the Encumbered Property Debt Documents, Qualified Joint
Venture Agreements, and any Leases, all Loss Proceeds shall be immediately

 

71

 

deposited into the Loss Proceeds Account (monthly rental loss/business
interruption proceeds to be initially deposited into the Loss Proceeds Account
and subsequently deposited into the Cash Management Account in installments as
and when the lost rental income covered by such proceeds would have been
payable).  Following the occurrence of a
Casualty, Borrower, regardless of whether proceeds are available, shall in a
reasonably prompt manner proceed to restore, repair, replace or rebuild the
applicable Property to be of at least equal value and of substantially the same
character as prior to the Casualty, all in accordance with the terms hereof
applicable to Alterations (unless such Property has been released in accordance
herewith).  If, at any Property, a
Condemnation or Casualty occurs as to which, in the reasonable judgment of
Lender:

 

(i)            in the case of a Casualty, the cost
of restoration would not exceed 25% of the applicable Allocated Loan Amount and
the Casualty does not render untenantable, or result in the cancellation of
Leases covering, more than 25% of the gross rentable area of such Property, or
result in cancellation of Leases covering more than 25% of the base contractual
rental revenue of such Property;

 

(ii)           in the case of a Condemnation, the
Condemnation does not render untenantable, or result in the cancellation of
Leases covering, more than 15% of the gross rentable area of such Property;

 

(iii)          restoration of such Property is
reasonably expected to be completed prior to the expiration of rental
interruption insurance and at least six months prior to the Maturity Date; and

 

(iv)          after such restoration, the fair
market value of the restored Property is reasonably expected to equal at least
the fair market value of such Property immediately prior to such Condemnation
or Casualty (assuming the affected portion of such Property is relet);

 

or if Lender otherwise elects to allow Borrower to restore such
Property or if restoration of such Property is required under a Major Lease or
a Ground Lease, then, provided no Event of Default shall have occurred and is
continuing, the Loss Proceeds after receipt thereof by Lender and reimbursement
of any reasonable expenses incurred by Lender in connection therewith shall be
applied to the cost of restoring, repairing, replacing or rebuilding such
Property or part thereof subject to the Casualty or Condemnation, in the manner
set forth below (and Borrower shall commence as promptly and diligently as
reasonably practicable to prosecute such restoring, repairing, replacing or
rebuilding of such Properties in a workmanlike fashion and in accordance with
applicable law to a status at least equivalent to the quality and character of
such Properties immediately prior to the Condemnation or Casualty or such other
character and with such other alterations as is reasonably consented to by
Lender).  Provided that no Event of
Default shall have occurred and be then continuing,  Lender shall disburse such Loss Proceeds to
Borrower upon Lender’s being furnished with (i) evidence reasonably
satisfactory to it of the estimated cost of completion of the restoration, (ii) funds,
or assurances reasonably satisfactory to Lender that such funds are available
and sufficient in addition to any remaining Loss Proceeds, to complete the
proposed restoration, and (iii) such architect’s certificates, waivers of
lien,

 

72

 

contractor’s sworn statements, title insurance endorsements, bonds,
plats of survey and such other evidences of cost, payment and performance as
Lender may reasonably request; and Lender may, in any event, require that all
plans and specifications for restoration reasonably estimated by Lender to
exceed $2,000,000 be submitted to and approved by Lender prior to commencement
of work (which approval shall not be unreasonably withheld).  If Lender reasonably estimates that the cost
to restore will exceed $2,000,000, Lender may retain a local construction
consultant to inspect such work and review Borrower’s request for payments and
Borrower shall, on demand by Lender, reimburse Lender for the reasonable fees
and expenses of such consultant (which fees and expenses shall constitute
Indebtedness).  No payment shall exceed
90% of the value of the work performed from time to time until such time as 50%
of the restoration (calculated based on the anticipated aggregate cost of the
work) has been completed, and amounts retained prior to completion of 50% of
the restoration shall not be paid prior to the final completion of the
restoration.  Funds other than Loss
Proceeds shall be disbursed prior to disbursement of such Loss Proceeds, and at
all times the undisbursed balance of such proceeds remaining in the Loss
Proceeds Account, together with any additional funds irrevocably and
unconditionally deposited therein or irrevocably and unconditionally committed
for that purpose, shall be at least sufficient in the reasonable judgment of
Lender to pay for the cost of completion of the restoration free and clear of
all Liens or claims for Lien.

 

(c)           Borrower
shall cooperate with Lender in obtaining for Lender the benefits of any Loss
Proceeds lawfully or equitably payable to Lender in connection with the
Properties.  Lender shall be reimbursed
for any expenses reasonably incurred in connection therewith (including
reasonable attorneys’ fees and disbursements, and, if reasonably necessary to
collect such proceeds, the expense of an Appraisal on behalf of Lender) out of
such Loss Proceeds or, if insufficient for such purpose, by Borrower.

 

(d)           If
Borrower is not entitled to apply Loss Proceeds toward the restoration of a
Property pursuant to Section 5.16(b) and Lender elects not to
permit such Loss Proceeds to be so applied, such Loss Proceeds shall be applied
on the first Payment Date following such election to the prepayment of the Loan
(without the payment of any Prepayment Fee) and shall be accompanied by
interest through the end of the applicable Interest Accrual Period (calculated
as if the amount prepaid were outstanding for the entire Interest Accrual
Period).  If the Note has been bifurcated
into multiple Note Components pursuant to Section 1.3(c), all
prepayments of the Loan made by Borrower in accordance with this Section 5.16(d) shall
be applied to the Note Components in ascending order of interest rate (i.e.,
first to the Note Component with the lowest Component Spread until its
outstanding principal balance has been reduced to zero, then to the Note
Component with the second lowest Component Spread until its outstanding
principal balance has been reduced to zero, and so on) or in such other order
as Lender shall determine.  The Release
Price for any Property for which Loss Proceeds are applied to repayment of the
Loan pursuant to this Section 5.16(d) shall be reduced by the
amount of such repayment.  If Loss
Proceeds are not made available to restore any Property and are applied to the
prepayment of any Encumbered Property Debt or the Loan, Borrower shall be
entitled to obtain the release of the applicable Property pursuant to Section 2.2,
provided that (i) Borrower shall not be obligated to satisfy the
requirements of clauses (2) or (3) of Section 2.2(a) in
connection with such release, and (ii) the appropriate Release Price shall
be the Unaffiliated Release Price with respect thereto.

 

73

 

(e)           Notwithstanding
anything in this Section 5.16 to the contrary, with respect to
Encumbered Properties, Loss Proceeds shall be applied in accordance with the
Encumbered Property Debt Documents, and after such application, any excess Loss
Proceeds shall be applied in accordance with this Section 5.16.

 

5.17.        Annual
Budget.  At least 30 days prior to
the commencement of each Fiscal Year during the term of the Loan beginning with
the 2008 Fiscal Year, and at least 30 days after the commencement of any Event
of Default, Borrower shall deliver to Lender an Annual Budget for the
Properties for the ensuing Fiscal Year and, promptly after preparation thereof,
any subsequent revisions to the Annual Budget. 
During the continuance of any Event of Default, such Annual Budget and
any such revisions shall be subject to Lender’s approval (the Annual Budget, as
so approved, or if no Event of Default exists, the Annual Budget, the “Approved
Annual Budget”); provided, however, that Borrower shall not
amend any Annual Budget more than once in any 60-day period.  If Borrower submits an Annual Budget for
approval in good faith and such Annual Budget is not approved within 30 days,
then the prior year’s Approved Annual Budget will remain in effect, subject to
increases for non-discretionary items such as insurance premiums and Taxes and
increases in the Consumer Price Index for the applicable calendar year over the
previous calendar year for discretionary items.

 

5.18.        General Indemnity. 
(a)  Borrower shall
indemnify, reimburse, defend and hold harmless Lender and its officers,
directors, employees and agents (collectively, the “Indemnified Parties”)
for, from and against any and all Damages of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Indemnified
Parties, in any way relating to or arising out of the making or holding or
enforcement of the Loan by Lender or the administration of the Transaction to
the extent resulting, directly or indirectly, from any claim (including any
Environmental Claim) made (whether or not in connection with any legal action,
suit, or proceeding) by or on behalf of any Person; provided, however,
that no Indemnified Party shall have the right to be indemnified hereunder for
its own fraud, bad faith, gross negligence or willful misconduct.  The provisions of and undertakings and
indemnification set forth in this Section 5.18 shall survive the
satisfaction and payment in full of the Indebtedness and termination of this
Agreement.

 

(b)           The applicable Indemnified Party shall promptly notify
Borrower in writing of any action, judgment, suit, claim or demand with respect
to which such Indemnified Party seeks the benefit of Section 5.18(a) and
provide Borrower the opportunity to defend same, and if such Indemnified Party
fails to do so it shall lose the benefit of Section 5.18(a) if
and to the extent Borrower is prejudiced thereby.  So long as Borrower is resisting and
defending in a prudent and commercially reasonable manner any action, judgment,
suit, claim or demand that gives rise to Damages (or same is being defended by
Borrower’s insurer and insurance is adequate for the reimbursement of such
Damages), the Indemnified Parties shall not be entitled to defend or settle
same and claim the benefit of Section 5.18(a) with respect
thereto without the consent of Borrower. 
Notwithstanding the foregoing, if the conditions set forth in the
preceding sentence are not being satisfied and Lender has provided Borrower
with 30 days’ prior written notice, or shorter period if mandated by the
requirements of applicable law, and opportunity to correct such determination,
Lender may in good faith settle such action, suit or proceeding and claim the
benefit of this Section 5.18 with respect thereto.

 

74

 

5.19.        Nonbinding
Consultation.  Lender shall
have the right to consult with and advise Borrower regarding significant
business activities and business and financial developments of Borrower,
provided that any such advice or consultation or the result thereof shall be
completely nonbinding on Borrower.

 

5.20         Compliance with Encumbrances.  Each Borrower covenants and agrees as
follows:

 

(i)            Borrower shall comply with all
material terms, conditions and covenants of each material Permitted
Encumbrance, including any material reciprocal easement agreement, any
declaration of covenants, conditions and restrictions, and any condominium
arrangements.

 

(ii)           Borrower shall promptly deliver to
Lender a true and complete copy of each and every notice of default received by
Borrower with respect to any obligation of such Borrower under the provisions
of any such Permitted Encumbrance, in each case if the same would reasonably be
expected to have a Material Adverse Effect.

 

(iii)          Borrower shall deliver to Lender
copies of any written notices of event of default relating to any such
Permitted Encumbrance served by such Borrower, if the same would reasonably be
expected to have a Material Adverse Effect.

 

(iv)          After the occurrence of an Event of
Default, so long as the Loan is outstanding, Borrower shall not grant or
withhold any material consent, approval or waiver under any such Permitted
Encumbrance without the prior written consent of Lender.

 

(v)           Borrower shall deliver to each other
party to any such Permitted Encumbrance notice of the identity of Lender and
each assignee of Lender of which such Borrower has been notified in writing if
such notice is required in order to protect Lender’s interest thereunder.

 

5.21         Encumbered Property Indebtedness.  Borrower
shall cause each Encumbered Property Owner to comply in all material respects
with all of their respective obligations and liabilities under the Encumbered
Property Debt Documents to which each is a party, in each case except to the
extent that any failure to so comply would not have a Material Adverse Effect
on the value of any of the Encumbered Properties or the Collateral.  Borrower shall cause each Encumbered Property
Owner, promptly upon receipt of any notice of breach or default under any
Encumbered Property Debt Documents, to deliver a copy of the same to Lender and
to grant access to, and otherwise cooperate with, Lender to permit Lender,
subject to the Encumbered Property Debt Documents, to cure such default to the
same extent as the right granted to Lender under Section 7.2(c) to
cure an Event of Default with respect to any Mortgage Loan Collateral
Property.  The actual costs and
expenses incurred by Lender in exercising rights under this paragraph
(including reasonable attorneys’ fees), with interest at the Default Rate for
the period after notice from Lender that such costs or expenses were incurred
to the date of payment to Lender, shall constitute a portion of the
Indebtedness, shall be secured by the Loan

 

75

 

Documents and shall be due and payable to Lender within 5 Business Days
of demand therefor.  Within 30 days of
the Closing Date, Borrower shall take all steps necessary to cause Lender to be
a notice party under the Encumbered Property Debt Documents.

 

5.22         Disposition Assets.  Upon the
sale or other transfer or disposition of any Disposition Asset, Borrower shall
promptly deliver to Lender written notice thereof in the form of an Officer’s
Certificate identifying the relevant Disposition Asset, the price for which it
was sold and the transferee thereof and certifying that the transferee thereof
is unaffiliated with any Borrower.

 

5.23         Distributions.  Borrower shall cause each
Property Owner and each Joint Venture Owner to promptly make Distributions of all
available cash flow, after payment of Operating Expenses at the applicable
Property and other sums then required to be paid to the Encumbered Property
Lenders or otherwise required to be paid, in each case, to the extent expressly
set forth in the Encumbered Party Debt Documents or the Joint Venture
Documents, directly into the Cash Management Account or the Blocked Account on
the earliest date practicable in the maximum amount not prohibited by the
Encumbered Property Documents or the Qualified Joint Venture Agreements.  Borrower shall cause TRS Owner to promptly
make Distributions of all available cash flow, after payment of Operating
Expenses at the applicable TRS Property and other sums then required or
otherwise advisable to be paid by TRS Owner in order to ensure that TRS Owner
maintains its status as a taxable REIT subsidiary under applicable Legal
Requirements, directly into the Cash Management Account or the Blocked Account
on the earliest date practicable in the maximum amount then permissible

 

5.24         Encumbered
Property Defaults.  Upon the
occurrence of an event of default under any one or more Encumbered Property
Loans due to a claim that the Transaction was prohibited thereunder, (x) AFRT
shall repay or defease, or cause to be repaid or defeased, such Encumbered
Property Loan, as applicable, prior to the earlier of (1) the date that is
10 days after the declaration of the event of default under the applicable
Encumbered Property Debt Documents and (2) the acceleration of such
Encumbered Property Loan; or (y) AFRT shall cause the release of the
Encumbered Property or Encumbered Properties securing such Encumbered Property
Loan from the Lien of the Loan Documents in accordance with Section 2.2(a) prior
to the earlier of (1) the date that is 10 days after the declaration of
the event of default under the applicable Encumbered Property Loan and (2) the
acceleration of such Encumbered Property Loan; provided, however,
that (i) in connection with any such release, notwithstanding anything to
the contrary contained in this Agreement, such Encumbered Property may be
Transferred to an Affiliate and (ii) if the Transfer related to the
release of such Encumbered Property would result in a further default under the
applicable Encumbered Property Debt Documents, then Borrower shall be required
to pay the applicable Release Price for such Encumbered Property, but shall not
be required to Transfer such Property to actually effectuate such release.  The foregoing 10-day period may be extended
to up to 60 days, provided (x) prior to the expiration of such 10-day
period, AFRT shall deliver to Lender a Letter of Credit in the amount, if any,
by which the aggregate cost to repay or defease such Encumbered Property Loan
(e.g., transaction costs, defeasance costs and prepayment fees) exceeds the
outstanding principal balance thereof, (y) the aggregate outstanding
principal amount of Encumbered Property Loans for which an event of default
thereunder is continuing does not exceed $350,000,000 at such time, and (z)

 

76

 

AFRT shall deliver to Lender an Officer’s Certificate of Sponsor
certifying that such event of default under such Encumbered Property Loan does
not trigger an event of default under any other Debt of Sponsor, any Permitted
Debt of Borrower or any Debt of any of their respective Affiliates.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

6.1.          Liens on the
Properties.  No Borrower, no Property
Owner, and, if applicable, no Single-Purpose Equityholder shall permit or
suffer the existence of any Lien on any of its assets, other than Permitted
Encumbrances.

 

6.2.          Ownership.  No Borrower shall own any assets other than
its Properties and related personal property and fixtures located therein or
used in connection therewith or its Required Equity, as applicable.  Except to the extent required under the
Encumbered Property Debt Documents, no Property Owner shall own any assets
other than its Encumbered Property and related personal property and fixtures
located therein or used in connection therewith.  Except as otherwise shown on Exhibit A,
neither AFRT nor AFRT Owner has any direct or indirect subsidiary that is not a
Borrower or a Property Owner, and no new direct or indirect subsidiary shall be
formed, unless such subsidiary shall be a New Borrower Entity that becomes a “Borrower”
or “Property Owner” hereunder or a Permitted TRS Entity (unless Lender shall
otherwise consent thereto) and, if it is a Borrower, pledge all of its assets
to Lender, in each case pursuant to documentation reasonably acceptable to
Lender.

 

6.3.          Transfer.

 

(a)           No
Borrower shall Transfer any Collateral, and no Property Owner shall Transfer
any Property, other than in compliance with Article II and other than the
replacement or other disposition of obsolete or non-useful personal property
and fixtures in the ordinary course of business, and Borrower shall not
hereafter file a declaration of condominium with respect to any of the
Properties.

 

(b)           Notwithstanding
the foregoing:

 

(i)            one or more Borrowers, may, at their
sole cost and expense, Transfer all or a portion of the Required Equity to
another Borrower or a New Borrower Entity and/or enter into a Permitted TRS
Contribution Agreement, provided that the nature, extent and value of Lender’s
collateral is not thereby impaired and (1) after giving effect to any such
Transfer or Permitted TRS Contribution Agreement, no Change of Control shall
have occurred, (2) Lender shall have received ten days’ advance written
notice of any such Transfer or Permitted TRS Contribution Agreement together
with a revised organizational chart reflecting such Transfer, (3) such
Required Equity shall remain or become (as the case may be) subject to a first
priority perfected Lien in favor of Lender, as evidenced by a legal opinion and
updated UCC title insurance policy, in each case reasonably satisfactory to
Lender and consistent with Rating Agency requirements, (4) if

 

77

 

reasonably
requested by Lender, Borrower shall deliver to Lender an updated
nonconsolidation opinion satisfactory to Lender and such other updated legal
opinions, certifications and evidence of compliance with this Agreement as
Lender shall reasonably require, (5) such Transfer shall have no adverse
effect on Lender, (6) with respect to a Permitted TRS Contribution
Agreement, to the extent not already covered by the Loan Documents, Borrower
shall have caused the rights of both parties under such agreement to be pledged
to Lender as additional collateral for the Loan in a manner reasonably
satisfactory to Lender and (7) Borrower shall pay all reasonable costs and
expenses of Lender in connection with the foregoing;

 

(ii)           so long as no Event of Default is
then continuing, Borrower may obtain the release of up to and including 80% of
the indirect equity interests in any Property Owner in the aggregate from the
Liens of the Loan Documents in connection with the sale of such equity
interests to an unaffiliated third party that enters into a Qualified Joint
Venture Agreement with Borrower, provided that (1) at the time of
each such release, Borrower shall prepay the Loan, in accordance with Section 2.1,
in an amount equal to the applicable Unaffiliated Release Price for such Joint
Venture Property, provided that, solely for these purposes, (i) the amount
specified in clause (x) of the definition of “Unaffiliated Release Price”
shall be multiplied by the percentage of the joint venture interest being
Transferred, and (ii) the percentage specified in clause (y) of the
definition of Unaffiliated Release Price shall be replaced with “100%”, which
prepayment shall be accompanied by the other amounts specified in Section 2.1,
(2) DSCR for the Test Period most recently ended, recalculated to include
only Borrower’s share of income and expense attributable to the Properties
remaining after the contemplated sale and to exclude the interest expense and
principal payments on the aggregate amount to be prepaid, shall be equal to or
greater than DSCR immediately prior to such sale (as reasonably determined by
Lender), (3) after giving effect to such release, the aggregate Allocated
Loan Amounts for each Property subject to the Lien of the Loan Documents that
constitutes Senior Collateral shall not be less than 120% of the Principal
Indebtedness (as reasonably determined by Lender), (4) Borrower shall reimburse Lender for any actual reasonable
out-of-pocket costs and expenses incurred by Lender in connection with this Section (including
the reasonable fees and expenses of legal counsel and the Servicer), (5) Lender
shall retain a first-priority perfected pledge of the remaining equity
interests in such Property Owner, which shall not be less than 20% of the
equity therein; and (6) any subsequent sale of a Joint Venture Property
shall be subject to the requirements of  Section 2.2,
except that, for purposes of this subsection (6) only, the Release Price
payable in connection therewith shall be the Unaffiliated Release Price (taking
into account 100% of the Aggregate Allocated Loan Amounts of the respective Properties,
without reduction for prior equity sales) reduced by multiplying the amount
specified in clause (x) of the definition of Unaffiliated Release Price by
the percentage of the applicable joint venture not theretofore released;

 

(iii)          one or more Encumbered Property Owners
may transfer one or more Encumbered Properties to one or more newly formed
Single-Purpose Entities Controlled

 

78

 

by Sponsor, in
connection with the incurrence of Permitted Debt pursuant to clause (iv) of
the definition of “Permitted Debt”; and

 

(iv)          Borrower shall be permitted to
Transfer Value Add Pool Equity pursuant to Section 2.3.

 

6.4.          Debt.  Neither Borrower nor any Property Owner shall
have any Debt, other than Permitted Debt.  No direct or indirect equityholder of Borrower
or any Property Owner, other than Sponsor and any direct or indirect
equityholder of Sponsor, shall have any debt, other than Permitted Debt.

 

6.5.          Dissolution;
Merger or Consolidation.  No
Borrower, Property Owner that owns any assets nor, if applicable, any
Single-Purpose Equityholder shall dissolve, terminate, liquidate, merge with or
consolidate into another Person.

 

6.6.          Change in
Business.  No Borrower nor any
Property Owner shall make any material change in the scope or nature of its
business objectives, purposes or operations or undertake or participate in
activities other than the continuance of its present business.

 

6.7.          Debt Cancellation.  No Borrower nor any Property Owner shall
cancel or otherwise forgive or release any material claim or Debt owed to it by
any Person, except for adequate consideration or in the ordinary course of its
business.

 

6.8.          Affiliate
Transactions.  No Borrower nor any
Property Owner shall enter into, or be a party to, any transaction with any
Affiliate of Borrower, except on terms which are no less favorable to such
Borrower or Property Owner than would be obtained in a comparable arm’s length
transaction with an unrelated third party.

 

6.9.          Misapplication of
Funds.  No Borrower shall (a) distribute
any Revenue or Loss Proceeds in violation of the provisions of this Agreement
(and shall promptly cause the reversal of any such distributions made in error
of which Borrower becomes aware), (b) fail to remit or cause to be remitted
amounts to the Cash Management Account as required by Section 3.1
(including, without limitation, all Distributions), or (c) misappropriate
any security deposit or portion thereof.

 

6.10.        Jurisdiction of
Formation.  No Borrower or Property
Owner shall change its jurisdiction of formation without receiving Lender’s
prior written consent and promptly providing Lender such information and
replacement Uniform Commercial Code financing statements and legal opinions as
Lender may reasonably request in connection therewith.

 

6.11.        Modifications and
Waivers.  Unless otherwise consented
to in writing by Lender:

 

(i)            No Borrower or Property Owner shall
amend, modify, terminate, renew, or surrender any rights or remedies under any
Major Lease, or enter into any Major Lease, except in compliance with Section 5.7;

 

79

 

(ii)           Except for changing
its registered agent and principal place of business (in each case, upon
advance written notice to Lender), no Borrower or Property Owner nor, if
applicable, any Single-Purpose Equityholder shall terminate, amend or modify
its organizational documents (including, without limitation, any operating
agreement, limited partnership agreement, by-laws, certificate of formation,
certificate of limited partnership or certificate of incorporation) in a manner
which (x) could reasonably be expected to affect its qualification as a
Single-Purpose Entity, with respect to entities required to be Single-Purpose
entities hereunder or (y) could reasonably be expected to result in a
Material Adverse Effect; and

 

(iii)          No Borrower or
Property Owner shall terminate, materially amend or materially modify the
Approved Management Agreement without the consent of Lender not to be
unreasonably withheld, conditioned or delayed.

 

6.12.        ERISA.

 

(a)           No Borrower shall
maintain or contribute to, or agree to maintain or contribute to, or permit any
ERISA Affiliate of Borrower (except for Sponsor and any ERISA Affiliate that is
an equityholder in Sponor) to maintain or contribute to or agree to maintain or
contribute to, any employee benefit plan (as defined in Section 3(3) of
ERISA) subject to Title IV or Section 302 of ERISA or Section 412 of
the Code.

 

(b)           No Borrower shall
engage in a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975
of the Code, or substantially similar provisions under federal, state or local
laws, rules or regulations or in any transaction that would cause any
obligation or action taken or to be taken hereunder (or the exercise by Lender
of any of its rights under the Notes, this Agreement, the Mortgages or any
other Loan Document) to be a non-exempt prohibited transaction under such
provisions.

 

6.13.        Alterations
and Expansions.  During the
continuance of any Event of Default, no Borrower or Property Owner shall
perform or contract to perform any Capital Expenditures that are not consistent
with the Approved Annual Budget.  No
Borrower or Property Owner shall perform or contract to perform any Material
Alteration without the prior written consent of Lender, which consent (in the
absence of an Event of Default) shall not be unreasonably withheld, conditioned
or delayed.  If Lender’s consent is
requested hereunder with respect to a Material Alteration, Lender may retain a
construction consultant to review such request and, if such request is granted,
Lender may retain a construction consultant to inspect the work from time to
time.  Borrower shall, within 30 days of
demand by Lender, reimburse Lender for the reasonable fees and disbursements of
such consultant.

 

6.14.        Advances and
Investments.  No Borrower or Property
Owner shall lend money or make advances to any Person, or purchase or acquire
any stock, obligations or securities of, or any other interest in, any Person,
except for Permitted Investments, or issue any additional equity
interests.   No Borrower or Property
Owner shall make any capital contribution to any Person that is not a Borrower
or a Property Owner .

 

80

 

6.15.        Single-Purpose
Entity.  No Borrower shall cease to
be a Single-Purpose Entity.

 

6.16.        Zoning and Uses.  No
Borrower or Property Owner shall do any of the following with respect to any of
the Properties without the prior written consent of Lender (such consent not to
be unreasonably withheld, delayed or conditioned), except, as to clause (ii) below,
to the extent the same is commercially reasonable and not reasonably expected
to have a Material Adverse Effect:

 

(i)            initiate or support
any limiting change in the permitted uses of any of the Properties (or to the
extent applicable, zoning reclassification of any of the Properties) or any
portion thereof, seek any material variance under existing land use
restrictions, laws, rules or regulations (or, to the extent applicable,
zoning ordinances) applicable to a Property, or use or permit the use of a
Property in a manner that would result in the use of such Property becoming a
nonconforming use (other than a legal nonconforming use) in any material
respect under applicable land-use restrictions or zoning ordinances or that
would violate the terms of any Lease, Material Agreement or Legal Requirement
in any material respect;

 

(ii)           consent to any
modification, amendment or supplement to any of the terms of, or materially
default in its obligations under, any Permitted Encumbrance, to the extent the
same would result in a Material Adverse Effect;

 

(iii)          impose or consent
to the imposition of any restrictive covenants, easements or encumbrances upon
a Property in any manner that adversely affects in any material respect its
value, utility or transferability;

 

(iv)          execute or file any
subdivision plat affecting any of the Properties, or institute, or permit the
institution of, proceedings to alter any tax lot comprising any of the
Properties;

 

(v)           amend, modify,
surrender, terminate or waive any material rights or remedies under, or enter
into, or default (beyond applicable grace, cure or notice periods) in its
material obligations under, any Material Agreement in any manner that might
diminish (x) the value of the applicable Property or Properties or (y) the
rights of any Borrower or Property Owner or Lender thereunder;

 

(vi)          amend, modify,
surrender, terminate or waive any material rights or remedies under, or enter
into, or default (beyond applicable grace, cure or notice periods) in its
material obligations under, any Ground Lease in any manner that might diminish (x) the
value of the applicable Property or Properties or (y) the rights of any
Borrower or Property Owner or Lender thereunder; or

 

(vii)         permit or consent to
any of  the Properties being used by the
public or any Person in such manner as might make possible a claim of adverse
usage or possession or of any implied dedication or easement.

 

81

 

6.17.        Waste.  No Borrower or Property Owner shall commit or
permit any Waste on any of the Properties, nor take any actions that might
invalidate any insurance carried on any of the Properties (and Borrower or
Property Owner shall promptly correct any such actions of which Borrower or
Property Owner becomes aware).

 

ARTICLE VII

 

DEFAULTS

 

7.1.          Event of Default.  The occurrence of any one or more of the
following events shall be, and shall constitute the commencement of, an “Event
of Default” hereunder:

 

(a)           Payment.

 

(i)            Borrower shall default in the
payment when due of any principal or interest owing hereunder or under the
Notes (including any mandatory prepayment required hereunder); or

 

(ii)           Borrower shall default, and such
default shall continue for at least five Business Days after written notice to
Borrower that such amounts are owing, in the payment when due of fees, expenses
or other amounts owing hereunder, under the Notes or under any of the other
Loan Documents (other than principal and interest owing hereunder or under the
Note).

 

(b)           Representations.  Any representation made by Borrower or
Sponsor in any of the Loan Documents, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Lender shall
have been false or misleading in any material respect (or, with respect to any
representation which itself contains a materiality qualifier, in any respect)
as of the date such representation was made, which failure, if capable of being
cured or remedied, has not been cured or remedied within 15 days after written
notice to Borrower of such failure.

 

(c)           Other Loan
Documents.  Any Loan Document shall
fail to be in full force and effect or to convey the material Liens, rights, powers
and privileges purported to be created thereby; or a default shall occur under
any of the other Loan Documents, any of the Ground Leases (to the extent such
default would entitle the lessor thereunder to terminate the Ground Lease) or
under any Qualified Joint Venture Agreement, in each case beyond the expiration
of any applicable cure period (provided that if a default occurs under a Loan
Document and no cure period is provided therein, and such Loan Document does
not characterize such default as an “Event of Default”, then clause (k) hereof
shall apply).

 

(d)           Bankruptcy, etc.

 

(i)            Any Borrower, any Property Owner,
any Joint Venture Owner or, if applicable, any Single-Purpose Equityholder
shall commence a voluntary case concerning itself under Title 11 of the United
States Code (as amended, modified, succeeded or replaced, from time to time,
the “Bankruptcy Code”);

 

82

 

(ii)           Any Borrower, any Property Owner, any
Joint Venture Owner or, if applicable, any Single-Purpose Equityholder shall
commence any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of creditors, dissolution, insolvency or similar law of any
jurisdiction whether now or hereafter in effect relating to such Borrower,
Property Owner, Joint Venture Owner or Single-Purpose Equityholder, or shall
dissolve or otherwise cease to exist;

 

(iii)          there is commenced against any
Borrower, any Property Owner, any Joint Venture Owner or, if applicable, any
Single-Purpose Equityholder an involuntary case under the Bankruptcy Code, or
any such other proceeding, which remains undismissed for a period of 60 days
after commencement;

 

(iv)          Any Borrower, any Property Owner, any
Joint Venture Owner or, if applicable, any Single-Purpose Equityholder is
adjudicated insolvent or bankrupt;

 

(v)           Any Borrower, any Property Owner, any
Joint Venture Owner or, if applicable, any Single-Purpose Equityholder suffers
appointment of any custodian or the like for it or for any substantial portion of
its property and such appointment continues unchanged or unstayed for a period
of 60 days after commencement of such appointment;

 

(vi)          Any Borrower, any Property Owner, any
Joint Venture Owner or, if applicable, any Single-Purpose Equityholder makes a general
assignment for the benefit of creditors; or

 

(vii)         any action is taken by any  Borrower, Property Owner, Joint Venture Owner
or, if applicable, any Single-Purpose Equityholder for the purpose of effecting
any of the foregoing.

 

(e)           Change of Control.

 

(i)            A Change of Control
shall occur; or

 

(ii)           except as expressly
permitted hereunder, any party shall acquire any direct or indirect equity
interest in any Borrower, Property Owner or Single-Purpose Equityholder (even
if not constituting a Change of Control), other than a direct or indirect
equity interest in Sponsor; or

 

(iii)          any party shall
acquire more than 49% of the direct or indirect equity interest in Borrower or
a Single-Purpose Equityholder (even if not constituting a Change of Control),
other than a direct or indirect equity interest in Sponsor, and Borrower shall
fail to deliver to Lender with respect to such new equityholder a new
non-consolidation opinion satisfactory to (A) prior to the occurrence of
any Securitization of the Loan, Lender in its reasonable discretion, and (B) at
any time following any Securitization or series of Securitizations of the Loan,
each of the Rating Agencies rating such Securitization or Securitizations.

 

83

 

(f)            Equity Pledge;
Preferred Equity.  Any direct or
indirect equity interest in or right to distributions from any Borrower,
Property Owner or Joint Venture Owner shall be subject to a Lien in favor of
any Person, or any such party or any holder of a direct or indirect interest in
any such party shall issue preferred equity (or debt granting the holder
thereof rights substantially similar to those generally associated with
preferred equity); except that the
following shall be permitted:

 

(i)            any pledge of direct
and indirect equity interests in and rights to distributions from Sponsor;

 

(ii)           the issuance of
preferred equity interests in Sponsor; and

 

(iii)          the pledges in
favor of Lender created by the Loan Documents.

 

(g)           Insurance.  Borrower shall fail to maintain in full force
and effect or cause to be maintained in full force and effect all Policies
required hereunder.

 

(h)           ERISA; Negative
Covenants.  A default shall occur in
the due performance or observance by any Borrower of any term, covenant or
agreement contained in Section 5.8 or in Article VI;
provided that if such default is susceptible of being cured, such default shall
not constitute an Event of Default unless and until it shall remain uncured for
10 days after Borrower receives written notice thereof, for a default which can
be cured by the payment of money, or for 30 days after Borrower receives
written notice thereof, for a default which cannot be cured by the payment of
money; or any ERISA Event with respect to a Plan shall have occurred and the
same shall have a Material Adverse Effect.

 

(i)            Cross-Default.  An event of default shall occur and be
continuing under any one or more Encumbered Property Loans, provided that (a) such
event of default shall not constitute an Event of Default unless the aggregate
outstanding principal amount of the applicable Encumbered Property Loans
exceeds $30 million at the time such event of default is declared and such
default is a monetary or material non-monetary event of default; and (b) if
an event of default is declared under any Encumbered Property Loan solely due
to a claim that the Transaction was prohibited thereunder, then same shall not
constitute an Event of Default if Borrower complies with Section 5.24
within the time periods specified therein.

 

(j)            Certificates of
Required Equity.  If any additional
direct or indirect equity interests in any Property Owner or Borrower shall be
issued and not pledged to Lender in a manner reasonably satisfactory to Lender.

 

(k)           Other Covenants.  A default shall occur in the due performance
or observance by any Borrower of any term, covenant or agreement (other than
those referred to in subsections (a) through (j), inclusive,
of this Section 7.1) contained in this Agreement or in any of the
other Loan Documents, except that if such default referred to in this subsection
(k) is susceptible of being cured, such default shall not constitute
an Event of Default unless and until it shall remain uncured for 10 days after
Borrower receives written

 

84

 

notice thereof, for a default which can be cured by the payment of
money, or for 30 days after Borrower receives written notice thereof, for a
default which cannot be cured by the payment of money; and if a default cannot
be cured by the payment of money but is susceptible of being cured and cannot
reasonably be cured within such 30-day period, and Borrower commences to cure
such default within such 30-day period and thereafter diligently and
expeditiously proceeds to cure the same, Borrower shall have such additional
time as is reasonably necessary to effect such cure, but in no event in excess
of 120 days from the original notice.

 

7.2.          Remedies.

 

(a)           During
the continuance of an Event of Default, Lender may by written notice to Borrower,
in addition to any other rights or remedies available pursuant to this
Agreement, the Notes, and the other Loan Documents, at law or in equity,
declare by written notice to Borrower all or any portion of the Indebtedness to
be immediately due and payable, whereupon all or such portion of the
Indebtedness shall so become 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 Collateral (including all rights or remedies available at law
or in equity); provided, however, that, notwithstanding the
foregoing, if an Event of Default specified in paragraph 7.1(d) shall
occur, then the Indebtedness shall immediately become due and payable without
the giving of any notice or other action by Lender.  Any 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 in this Agreement
or in the other Loan Documents.

 

(b)           If Lender forecloses
on any of the Collateral, Lender shall apply all net proceeds of such
foreclosure to repay the Indebtedness, the Indebtedness shall be reduced to the
extent of such net proceeds and the remaining portion of the Indebtedness shall
remain outstanding and secured by the Collateral and the other Loan Documents,
it being understood and agreed by Borrower that Borrower is liable for the
repayment of all the Indebtedness; provided, however, that at the
election of Lender, the Notes shall be deemed to have been accelerated only to
the extent of the net proceeds actually received by Lender with respect to the
Collateral and applied in reduction of the Indebtedness.

 

(c)           During the
continuance of any Event of Default (including an Event of Default resulting
from a failure to satisfy the insurance requirements specified herein), Lender
may, subject to the terms of the Encumbered Property Debt Documents, but
without any obligation to do so and without notice to or demand on Borrower and
without releasing Borrower from any obligation hereunder, take any action to
cure such Event of Default.  Subject to
the Encumbered Property Debt Documents, Lender may enter upon any or all of the
Properties upon reasonable notice to Borrower for such purposes or appear in,
defend, or bring any action or proceeding to protect its interest in the
Collateral or to foreclose on the Collateral or collect the Indebtedness.  The costs and expenses incurred by Lender in
exercising rights under this paragraph (including reasonable attorneys’ fees),
with interest at the Default Rate for the period after notice from Lender that
such costs or expenses were incurred to the date of payment to

 

85

 

Lender, shall constitute a portion of the Indebtedness, shall be secured
by the Loan Documents and shall be due and payable to Lender upon demand
therefor.

 

(d)           Interest shall
accrue on any judgment obtained by Lender in connection with its enforcement of
the Loan at a rate of interest equal to the Default Rate.

 

7.3.          No Waiver.  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
by Lender to be expedient.  A waiver of
any Default or Event of Default shall not be construed to be a waiver of any
subsequent Default or Event of Default or to impair any remedy, right or power
consequent thereon.

 

7.4.          Application of
Payments after an Event of Default. Notwithstanding anything to the
contrary contained herein, during the continuance of an Event of Default, all
amounts received by Lender in respect of the Loan shall be applied at Lender’s
sole discretion either toward the components of the Indebtedness (e.g.,
Lender’s expenses in enforcing the Loan, interest, principal and other amounts
payable hereunder), and the Note Components in such sequence as Lender shall
elect in its sole discretion, or toward the payment of Property expenses.

 

ARTICLE VIII

 

CONDITIONS PRECEDENT

 

8.1.          Conditions
Precedent to Closing.  This Agreement
shall become effective on the date that all of the following conditions shall
have been satisfied (or waived by Lender), it being agreed that Lender’s
funding of the Loan shall constitute Lender’s agreement that such conditions
have been satisfied or waived unless the parties shall otherwise have agreed in
writing:

 

(a)           Loan
Documents.  Lender shall have
received a duly executed copy of each Loan Document.  Each Loan Document which is to be recorded in
the public records shall be in form suitable for recording.

 

(b)           Collateral
Accounts.  Each of the Collateral
Accounts shall have been established with the Cash Management Bank and funded
to the extent required under Article III.

 

(c)           Opinions
of Counsel. Lender shall have received legal opinions reasonably
satisfactory to Lender.

 

(d)           Organizational
Documents.  Lender shall have
received all documents reasonably requested by Lender relating to the existence
of each Borrower, the validity of the Loan Documents and other matters relating
thereto, in form and substance satisfactory to Lender, including:

 

86

 

(i)            Authorizing
Resolutions.  A certified copy of the
resolutions approving and adopting the Loan Documents to be executed by
Borrower and authorizing the execution and delivery thereof.

 

(ii)           Organizational
Documents.  Certified copies of the
organizational documents of each Borrower and, if applicable, any
Single-Purpose Equityholder (including any certificate of formation,
certificate of limited partnership, certificate of incorporation, operating
agreement, limited partnership agreement or by-laws), in each case together
with all amendments thereto.

 

(iii)          Certificates of
Good Standing or Existence. 
Certificates of good standing or existence for each Borrower and, if
applicable, any Single-Purpose Equityholder issued as of a recent date by its
state of organization and by each state in which one of the Properties is
located.

 

(iv)          Certificates.  Original limited liability company or
partnership interest certificates, as the case may be, executed in blank for
AFRT and American Financial TRS, Inc.

 

(e)           Lease; Material Agreements.  Lender shall have received, with respect to
each Property (i) true and complete copies of all Material Agreements,
Leases, Ground Leases, recorded reciprocal easement agreements (and similar
documents) and (ii) all rent rolls and material contracts to the extent
available to Borrower without material cost or expense.

 

(f)            Lien
Search Reports.  Lender shall have
received satisfactory reports of Uniform Commercial Code, tax lien, bankruptcy
and judgment searches conducted by a search firm acceptable to Lender with
respect to the Properties and each Borrower (including each Borrower’s
immediate predecessor, if any, and to the extent reasonably required,
subsidiaries of each Borrower), such searches to be conducted in such locations
as Lender shall have requested.

 

(g)           Material
Litigation.  Lender shall have
received a schedule of all material outstanding litigation that is not fully
covered by insurance.

 

(h)           No
Default or Event of Default.  No
Default or Event of Default shall have occurred and be continuing on such date
either before or after the execution and delivery of this Agreement.

 

(i)            No
Injunction.  No Legal Requirement
shall exist, and no litigation shall be pending or threatened, which in the
good faith judgment of Lender would enjoin, prohibit or restrain, or impose or
result in the imposition of any material adverse condition upon, the making or
repayment of the Loan or the consummation of the Transaction.

 

(j)            Representations.  The representations in this Agreement and in
the other Loan Documents shall be true and correct in all respects on and as of
the Closing Date with the same effect as if made on such date.

 

87

 

(k)           Estoppel
Letters.  To the extent obtained by
Borrower through the exercise of reasonably diligent efforts, Borrower shall
have delivered to Lender estoppel certificates from each Tenant under a Lease
and each lessor under a Ground Lease, in each case, which has been identified
by Lender prior to the date hereof, each of which shall specify that Lender and
its successors and assigns may rely thereon and otherwise be  in such form and substance as shall be
satisfactory to Lender.

 

(l)            Merger
Agreement.  Lender shall have
received a complete copy of the executed Merger Agreement (including all
exhibits thereto) and each amendment thereto and all other related agreements.

 

(m)          No
Material Adverse Effect.  No event or
series of events shall have occurred which Lender reasonably believes has had
or is reasonably likely to have a Portfolio Material Adverse Effect.

 

(n)           Transaction
Costs.  Borrower shall have paid all
transaction costs (or provided for the direct payment of such transaction costs
by Lender from the proceeds of the Loan).

 

(o)           Insurance.  Lender shall have received certificates of
insurance on ACORD Form 28, demonstrating insurance coverage in respect of
the Properties of types, in amounts, with insurers and otherwise in compliance
with the terms, provisions and conditions set forth in this Agreement.  Such certificates shall indicate that Lender
and its successors and assigns are named as additional insured on each
liability policy, and that each casualty policy and rental interruption policy
contains a loss payee and mortgagee endorsement in favor of Lender, its
successors and assigns.

 

(p)           Title.  Lender shall have received a marked, signed
commitment to issue, or a pro-forma version of, a Qualified Title Insurance
Policy in respect of each Mortgage Loan Property, listing only usual and
customary permitted exceptions and such other exceptions reasonably approved by
Lender.

 

(q)           UCC
Insurance.  Lender shall have
received one or more UCC “Eagle-9” title insurance policies insuring the equity
pledges of the Loan Documents, subject only to usual and customary permitted
exceptions and other exceptions reasonably approved by Lender, and a copy of
the owner’s title insurance policy for each non-mortgaged Property, with a
mezzanine endorsement or the equivalent in favor of Lender if available (except
that Borrower shall not be required to purchase new or updated owners’
policies).

 

(r)            Zoning.  Lender shall have received zoning reports
with respect to (x) each Mortgage Loan Property, and (y) each other
Property that Lender reasonably determines necessary in order to syndicate the
Loan, satisfy regulatory requirements, resolve any material issues arising from
Lender’s due diligence, and/or pledge the Loan in connection with a repurchase
or similar facility.

 

88

 

(s)           Permits;
Certificate of Occupancy.  Lender shall
have received a copy of all Permits necessary for the use and operation of each
Property and the certificate(s) of occupancy, if required, for each
Property, all of which shall be in form and substance reasonably satisfactory
to Lender.

 

(t)            Engineering
Report, Environmental Report and Appraisals.  Lender shall have received existing
appraisals, Environmental Reports and engineering/seismic reports for each of
the Properties, and shall have received updates thereof with respect to (x) each
Mortgage Loan Property, and (y) each other Property that Lender reasonably
determines necessary in order to syndicate the Loan, satisfy regulatory
requirements, resolve any material issues arising from Lender’s due diligence,
and/or pledge the Loan in connection with a repurchase or similar
facility.  Providers of such reports
shall be reasonably approved by Lender. 
Each new appraisal shall conform to USPAP and FIRREA guidelines.

 

(u)           Qualified
Survey.  Lender shall have received a
Qualified Survey with respect to (x) each Mortgage Loan Property, and (y) each
other Property that Lender reasonably determines necessary in order to
syndicate the Loan, satisfy regulatory requirements, resolve any material
issues arising from Lender’s due diligence, and/or pledge the Loan in
connection with a repurchase or similar facility, which includes, without
limitation, all such items as may be reasonably required by Lender, together
with a certification from a surveyor and legal description for each Property
reasonably acceptable to Lender.

 

(v)           Consents, Licenses, Approvals, etc. 
Lender shall have received copies of all consents, licenses and
approvals, if any, required in connection with the execution, delivery and
performance by Borrower, and the validity and enforceability, of the Loan
Documents, and such consents, licenses and approvals shall be in full force and
effect.

 

(w)          Financial
Information.  Lender shall have
received (i) financial information relating to the Sponsor, Borrower and
the Properties which is satisfactory to Lender, including current operating
statements and historical operating statements for the past three years, to the
extent available to Borrower without material cost or expense and (ii) a
certified closing date balance sheet for Borrower and Sponsor.

 

(x)           Annual
Budget.  Lender shall have received
the 2008 Annual Budget with respect to the Properties.

 

(y)           Closing
Statement.  Lender shall have
received a reasonably detailed closing statement indicating all sources and
uses of funds.

 

(z)           Additional
Matters.  Lender shall have received
such other certificates, opinions, documents and instruments relating to the
Loan as may have been reasonably requested by Lender.  All corporate and other proceedings, all
other documents (including all documents referred to in this Agreement and not
appearing as exhibits to this Agreement) and all legal matters in connection
with the Loan shall be reasonably satisfactory in form and substance to Lender.

 

89

 

ARTICLE
IX

 

MISCELLANEOUS

 

9.1.          Successors.  Except as otherwise provided in this
Agreement, whenever in this Agreement any of the parties to this Agreement is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party.  All
covenants, promises and agreements in this Agreement contained, by or on behalf
of Borrower, shall inure to the benefit of Lender and its successors and
assigns.

 

9.2.          GOVERNING
LAW.

 

(A)          THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

(B)           ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST LENDER, BORROWER OR THE SPONSOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (OTHER THAN ANY
ACTION IN RESPECT OF THE CREATION, PERFECTION OR ENFORCEMENT OF A LIEN OR
SECURITY INTEREST CREATED PURSUANT TO ANY LOAN DOCUMENTS NOT GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK) MAY BE INSTITUTED IN ANY FEDERAL OR STATE
COURT IN NEW YORK, NEW YORK.  LENDER,
BORROWER AND THE SPONSOR HEREBY (i) IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (ii) IRREVOCABLY SUBMIT
TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING,
AND (iii) IRREVOCABLY CONSENT  TO
SERVICE OF PROCESS BY MAIL, PERSONAL SERVICE OR IN ANY OTHER MANNER PERMITTED
BY APPLICABLE LAW, AT THE ADDRESS SPECIFIED IN SECTION 9.4.

 

9.3.          Modification,
Waiver in Writing.  Neither this
Agreement nor any other Loan Document may be amended, changed, waived,
discharged or terminated, nor shall any consent or approval of Lender be
granted hereunder, unless such amendment, change, waiver, discharge,
termination, consent or approval is in writing signed by Lender.

 

9.4.          Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing by expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of delivery or attempted delivery, addressed
as follows (or at such other address and person as shall be designated from
time to time by any party to this Agreement, as the case may be, in a written
notice to the other parties to this Agreement in the manner provided for in
this Section).  ANY NOTICE OF DEFAULT
UNDER ARTICLE VII OR ANY SIMILAR PROVISION OF ANY OF THE OTHER LOAN DOCUMENTS
MUST PROVIDE, IN ORDER TO BE EFFECTIVE

 

90

 

AS A
NOTICE THEREUNDER, THAT IT IS BEING GIVEN AS A NOTICE OF DEFAULT WHICH IF NOT
CURED WITHIN THE GRACE PERIOD CONTAINED IN THE LOAN DOCUMENTS WILL RESULT IN AN
EVENT OF DEFAULT.  A notice shall be
deemed to have been given when delivered or upon refusal to accept delivery.

 

If to
Lender:

 

Goldman
Sachs Commercial Mortgage Capital, L.P.

6011 Connection Drive, Suite 550

Irving, Texas 75039

Attention:  Michael Forbes

 

with copy to:

 

Goldman Sachs Mortgage
Company

85 Broad Street, 11th Floor

New York, New York 10004

Attention:  Daniel Ottensoser and Leo
Huang

 

with copy to

 

Cleary Gottlieb Steen &
Hamilton LLP

One Liberty Plaza

New York, New York 10006

Attention: Michael Weinberger, Esq.

 

and

 

Citicorp
North America, Inc.

388 Greenwich Street

New York, New York 10013

Attention:  Mr. David Bouton

 

with
copy to

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York  10153

Attention:  Samuel M. Zylberberg, Esq.
(EG)

 

91

 

If to Borrower:

 

c/o
American Financial Realty Trust

c/o Gramercy Capital Corp.

420 Lexington Avenue, 19th Floor

New York, New York 10170

Attention:  Marc Holliday

 

with copies to:

 

c/o American
Financial Realty Trust

c/o Gramercy Capital Corp.

420 Lexington Avenue, 19th Floor

New York, New York  10170

Attention:  Office of the General Counsel

 

Fried, Frank, Harris,
Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004-1980

Attention:  Jonathan L. Mechanic, Esq.

 

9.5.          TRIAL BY JURY.  LENDER, BORROWER AND THE SPONSOR, TO THE
FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY AGREE NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. 
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY
BY LENDER, BORROWER AND THE SPONSOR 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 OF LENDER,
BORROWER AND SPONSOR IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN
ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY LENDER, BORROWER AND
THE SPONSOR, AS THE CASE MAY BE.

 

9.6.          Headings.  The Article and Section headings in
this Agreement are included in this Agreement for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.

 

9.7.          Assignment and
Participation.

 

(a)           Except as explicitly
set forth in Sections 2.1 and 2.2, Borrower may not sell, assign
or transfer any interest in the Loan Documents or any portion thereof
(including Borrower’s rights, title, interests, remedies, powers and duties
hereunder and thereunder).

 

92

 

(b)           Lender and each
assignee of all or a portion of the Loan shall have the right from time to time
in its discretion to sell one or more of the Notes or any interest therein (an “Assignment”)
and/or sell a participation interest in one or more of the Notes (a “Participation”).  Borrower agrees reasonably to cooperate with
Lender, at Lender’s request, in order to effectuate any such Assignment or
Participation.  In the case of an
Assignment, (i) each assignee shall have, to the extent of such
Assignment, the rights, benefits and obligations of the assigning Lender as a “Lender”
hereunder and under the other Loan Documents, (ii) the assigning Lender
shall, to the extent that rights and obligations hereunder have been assigned
by it pursuant to an Assignment, relinquish its rights and be released from its
obligations under this Agreement, and (iii) one Lender shall at all times
serve as agent for all Lenders and shall be the sole Lender to whom notices,
requests and other communications shall be addressed and the sole party
authorized to grant or withhold consents hereunder on behalf of the Lenders
(subject, in each case, to appointment of a Servicer, pursuant to Section 9.22,
to receive such notices, requests and other communications and/or to grant or
withhold consents or waivers or give notices, as the case may be) and to be the
sole Lender to designate the account to which payments shall be made by
Borrower to the Lenders hereunder (and Borrower may fully rely thereon,
notwithstanding any contrary notice from any other Lender), and (iv) any
assigning Lender that no longer holds any portion of the Loan shall deliver any
Collateral held by it as Lender to the other Lenders or their custodian and, if
reasonably requested by Borrower, shall deliver notices (prepared by Borrower
and reasonably satisfactory to such assigning Lender) to Tenants and/or the
Cash Management Bank confirming such assignment.  Goldman
Sachs Mortgage Company or, upon the appointment of a Servicer, such Servicer,
shall maintain, or cause to be maintained, as agent for Borrower, a register on
which it shall enter the name or names of the registered owner or owners from
time to time of the Notes.  Borrower
agrees that upon effectiveness of any Assignment of any Note in part, Borrower
will promptly provide to the assignor and the assignee separate promissory
notes in the amount of their respective interests (but, if applicable, with a
notation thereon that it is given in substitution for and replacement of an
original Note or any replacement thereof), and otherwise in the form of such
Note (and with such other changes as may be reasonably required to reflect that
such Note evidences only a portion of the Loan and the provisions of clause (iii) above),
upon return of the Note then being replaced. The assigning Lender shall notify
in writing each of the other Lenders of any Assignment.  Each potential or actual assignee,
participant or investor in a Securitization, and each Rating Agency, shall be
entitled to receive all information received by Lender under this
Agreement.  After the effectiveness of
any Assignment, the party conveying the Assignment shall provide notice to
Borrower and each Lender of the identity and address of the assignee and the
amount so assigned.  Notwithstanding
anything in this Agreement to the contrary, after an Assignment, the assigning
Lender (in addition to the assignee) shall continue to have the benefits of any
indemnifications contained in this Agreement which such assigning Lender had
prior to such assignment with respect to matters occurring prior to the date of
such assignment.

 

(c)           If, pursuant to this
Section 9.7, any interest in this Agreement or any Note is
transferred to any transferee that is not a U.S. Person, the transferor Lender
shall cause such transferee, concurrently with the effectiveness of such
transfer, (i) to furnish to the transferor Lender either Form W-8BEN
or Form W-8ECI or any other form in order to establish an exemption from,
or reduction in the rate of, U.S. withholding tax on all interest payments
hereunder, and (ii) to agree (for the benefit of Lender and Borrower) to
provide the transferor

 

93

 

Lender a new Form W-8BEN or Form W-8ECI or any forms
reasonably requested in order to establish an exemption from, or reduction in
the rate of, U.S. withholding tax upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and completed
by such transferee, and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax exemption.

 

(d)           Borrower shall bear
its own costs and expenses incurred in connection with their compliance with
any request by Lender under this Section 9.7.

 

(e)           Each Lender
hereunder shall be individually and severally (and not jointly) liable for the
satisfaction of its obligations hereunder and under the other Loan Documents.

 

9.8.          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.

 

9.9.          Preferences.  Lender shall have no obligation to marshal
any assets in favor of Borrower or any other party or against or in payment of
any or all of the obligations of Borrower pursuant to this Agreement, the Notes
or any other Loan Document.  During the
continuance of an Event of Default, Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by
Borrower to any portion of the obligations of Borrower hereunder and under the
Loan Documents.  To the extent Borrower
makes a payment or payments to Lender, which payment or proceeds or any portion
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 portion 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.

 

9.10.        Remedies of
Borrower.  If a claim or adjudication
is made that Lender or its agents have unreasonably delayed acting or acted
unreasonably in any case where by law or under this Agreement, the Notes, or
the other Loan Documents, any of such Persons has an obligation to act promptly
or reasonably, Borrower agrees that no such Person shall be liable for any
monetary damages, and Borrower’s sole remedy shall be limited to commencing an
action seeking specific performance, injunctive relief and/or declaratory
judgment, except in any instance in which it has been finally determined by a
court of competent jurisdiction that Lender’s action, delay or inaction has
constituted gross negligence, willful misconduct or an illegal act.

 

9.11.        Offsets,
Counterclaims and Defenses.  All
payments made by Borrower hereunder or under the other Loan Documents shall be
made irrespective of, and without any deduction for, any setoffs or
counterclaims.  Borrower waives the right
to assert a counterclaim,

 

94

 

other than a mandatory or compulsory counterclaim, in any action or
proceeding brought against it by Lender arising out of or in any way connected
with the Notes, this Agreement, the other Loan Documents or the
Indebtedness.  Any assignee of Lender’s
interest in the Loan shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to the Loan.

 

9.12.        No Joint Venture.  Nothing in this Agreement 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 any Mortgage
Loan Property other than that of mortgagee or lender.

 

9.13.        Conflict;
Construction of Documents.  In the
event of any conflict between the provisions of this Agreement and the
provisions of the Notes, the Mortgages or any of the other Loan Documents, the
provisions of this Agreement shall prevail.

 

9.14.        Brokers and
Financial Advisors.  Borrower
represents that neither Borrower nor Sponsor have dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement.  Borrower agrees to indemnify and hold Lender
harmless from and against any and all claims, liabilities, costs and expenses
of any kind in any way relating to or arising from a claim by any Person that
such Person acted on behalf of Borrower in connection with the transactions
contemplated in this Agreement.  The
provisions of this Section 9.14 shall survive the expiration and
termination of this Agreement and the repayment of the Indebtedness.

 

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

 

9.16.        Estoppel
Certificates.  Borrower and Lender
each agrees at any time and from time to time, to execute, acknowledge and
deliver to the other, within five Business Days after receipt of Lender’s or
Borrower’s, as the case may be, written request therefor, a statement in
writing setting forth (A) the Principal Indebtedness, (B) the date on
which installments of interest and/or principal were last paid, (C) in the
case of Borrower’s estoppel, any offsets or defenses to the payment of the
Indebtedness, (D) in the case of Borrower’s estoppel, that the Notes, this
Agreement, and the other Loan Documents are valid, legal and binding
obligations, (E) that the Loan Documents have not been modified or if
modified, giving particulars of such modification, (F) in the case of
Borrower’s estoppel, that to Borrower’s knowledge, Borrower is not in default
under the Loan Documents (or specifying any such default), and in the case of
Lender’s estoppel, that Lender has not delivered a written notice of default
(or describing any such notice), and (G) such other matters as Lender or
Borrower may reasonably request.  Any
prospective purchaser of any interest in a Loan or any actual or prospective
purchaser or holder of any direct or indirect interest in the Borrowers (to the
extent permitted hereunder) shall be permitted to rely on such certificate.

 

9.17.        Payment of
Expenses.  Borrower shall reimburse
Lender upon receipt of written notice from Lender for (i) all reasonable
out-of-pocket costs and expenses incurred by Lender (or any of its Affiliates)
in connection with the origination and any post-closing

 

95

 

restructuring of the Loan, including legal fees and disbursements,
accounting fees, and the costs of the Appraisal, the Engineering Report, the
Qualified Title Insurance Policy, the Qualified Survey, the Environmental
Report and any other third-party diligence materials; (ii) all reasonable
out-of-pocket costs and expenses incurred by Lender (or any of its Affiliates)
in connection with (A) monitoring 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 confirming compliance with environmental and
insurance requirements, in each case if and to the extent Lender has reasonable
cause to suspect noncompliance, (B) 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 or by Lender, (C) filing
and recording fees and expenses and other similar expenses incurred in creating
and perfecting the Liens in favor of Lender pursuant to this Agreement and the
other Loan Documents, (D) enforcing or preserving any rights, in response
to third party claims or the prosecuting or defending of any action or proceeding
or other litigation, in each case against, under or affecting Borrower, this
Agreement, the other Loan Documents or any Collateral, and (E) obtaining
any Rating Confirmation required or requested by Borrower hereunder; and (iii) all
actual out-of-pocket costs and expenses (including, if the Loan has been
securitized and an Event of Default has occurred, customary special servicing
fees resulting therefrom) incurred by Lender (or any of its Affiliates) in
connection with the enforcement of any obligations of Borrower, or a Default by
Borrower, under the Loan Documents, including any actual or attempted
foreclosure, deed-in-lieu of foreclosure, refinancing, restructuring or workout
and any insolvency or bankruptcy proceedings (including any applicable transfer
taxes).

 

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

 

9.19.        Recourse.

 

(a)           The
Loan shall be fully recourse to Borrower. 
No recourse shall be had for the Loan against any other Person,
including any Affiliate of Borrower or any officer, director, partner or
equityholder of Borrower or any such Affiliate, except for (i) claims
against Sponsor under the Guaranty and (ii) claims against Borrower and
Sponsor under the Environmental Indemnity.

 

96

 

(b)           Borrower
shall indemnify Lender and hold Lender harmless from and against any and all
Damages to Lender (plus the legal and other expenses of enforcing the
obligations of Borrower under this Section 9.19) resulting from or
arising out of any of the following (the “Indemnified Liabilities”),
which Indemnified Liabilities shall be guaranteed by Sponsor, jointly and
severally, pursuant to the Guaranty:

 

(i)            any intentional
material physical Waste with respect to any Property committed or permitted by
any Borrower, the Sponsor or any of their respective Affiliates;

 

(ii)           any fraud, willful
misconduct or intentional material misrepresentation committed by any Borrower,
the Sponsor or any of their respective Affiliates;

 

(iii)          the
misappropriation by any Borrower, the Sponsor or any of their respective
Affiliates of any funds in violation of the Loan Documents (including
misappropriation of Revenues, Distributions, security deposits and/or Loss
Proceeds and the violation of the last sentence of Section 5.7(d));

 

(iv)          any breach by any
Borrower or the Sponsor of any material representation or covenant regarding
environmental matters contained in this Agreement or in the Environmental
Indemnity;

 

(v)           the failure of any
Borrower, at any time, to comply with Single-Purpose Entity requirements
hereunder, in any material respect;

 

(vi)          any failure to pay
income tax liabilities of non pass-through entities comprising any Borrower or
its Affiliates;

 

(vii)         the failure of any
Borrower to fully discharge prior to the Closing Date any liabilities,
contingent or otherwise, associated with assets that were owned by Borrower or
any of its Affiliates prior to the Closing Date (including all employee
liabilities), other than the Properties and direct or indirect equity interests
therein;

 

(viii)        failure to structure
and consummate the Merger in a manner that does not give rise to a shareholder
lawsuit;

 

(ix)           any liability of
AFRT or its subsidiaries under any recourse carveout under any Encumbered
Property Debt, guaranty or similar obligations, in each case in respect of
Borrower, AFRT, Operating Partnership or any holding company;

 

(x)            any failure by Borrower to cause each holder of Encumbered
Property Debt to add Lender as a party to whom all notices of default must be
given under the Encumbered Debt Documents; and any failure by Borrower to
instruct each holder of Encumbered Property Debt to accept any payment from or
action taken by Lender during the continuance of a default thereunder as if it
were received from or performed by the applicable Property Owner; and any
failure by Borrower to remit to any holder of

 

97

 

Encumbered Property Debt any
amount proffered by Lender in order to cure a default thereunder pursuant to Section 5.21;

 

(xi)           any assumption fee,
foreclosure fee or similar amount (and related expense reimbursements) owed by
Lender to any holder of Encumbered Property Debt or related loan servicer as a
result of, or in order to permit, a foreclosure or transfer in lieu of
foreclosure of Collateral; and

 

(xii)          any failure of the
representation made in Section 9.14 to be true and correct.

 

In addition to the foregoing (x) the Loan shall
be fully recourse to Borrower and Sponsor, jointly and severally, upon (i) 
any Transfer of Collateral or any Property, voluntary or collusive Lien on
Collateral or any Property, or Change
of Control which is prohibited hereunder or (ii) the occurrence of
any filing by any Borrower or Property Owner under the Bankruptcy Code or any
joining or colluding by any Borrower or any of their respective Affiliates
(including Sponsor) in the filing of an involuntary case in respect of any
Borrower or Property Owner under the Bankruptcy Code; and (y) in the event
AFRT shall fail to comply with Section 5.24, the Loan shall be
recourse to AFRT and Sponsor, jointly and severally, in an amount equal to the
Release Price of the applicable Property, plus all related enforcement costs
and any Damages resulting from a failure to release such Property pursuant
hereto.

 

9.20.  Right of Set-Off.  In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender may from time to time, without presentment, demand,
protest or other notice of any kind (all of such rights being hereby expressly
waived), set-off and appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by any Lender
(including branches, agencies or Affiliates of Lender wherever located) to or
for the credit or the account of Borrower against the obligations and
liabilities of Borrower to any Lender hereunder, under the Notes, the other
Loan Documents or otherwise, irrespective of whether such Lender shall have
made any demand hereunder and although such obligations, liabilities or claims,
or any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of Lender subsequent
thereto.

 

9.21.  Exculpation of Lender.  Lender neither undertakes nor assumes any
responsibility or duty to Borrower or any other party to select, review,
inspect, examine, supervise, pass judgment upon or inform Borrower or any third
party of (a) the existence, quality, adequacy or suitability of Appraisals
of the Properties or other Collateral, (b) any environmental report, or (c) any
other matters or items, including engineering, soils and seismic reports which
are contemplated in the Loan Documents. 
Any such selection, review, inspection, examination and the like, and
any other due diligence conducted by Lender, is solely for the purpose of protecting
Lender’s rights under the Loan Documents, and shall not render Lender liable to
Borrower or any third party for the existence, sufficiency, accuracy,
completeness or legality thereof.

 

98

 

9.22.        Servicer.  Lender may delegate any and all rights and
obligations of Lender hereunder and under the other Loan Documents to the
Servicer upon notice by Lender to Borrower, whereupon any notice or consent
from the Servicer to Borrower, and any action by Servicer on Lender’s behalf,
shall have the same force and effect as if Servicer were Lender.  Lender shall bear the cost of all servicing
fees, costs and expenses other than those to which Lender is expressly entitled
to reimbursement hereunder and under the other Loan Documents, including
without limitation, the Cooperation Agreement.

 

9.23  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 ANY TERM SHEETS,
CONFIDENTIALITY AGREEMENTS AND COMMITMENT LETTERS, ARE SUPERSEDED BY THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT THAT ANY ORIGINATION FEE
SPECIFIED IN ANY TERM SHEET, COMMITMENT LETTER OR FEE LETTER SHALL BE AN
OBLIGATION OF BORROWER AND SHALL BE PAID AT CLOSING, AND ANY
INDEMNIFICATIONS,  FLEX PROVISION, EXIT
FEES AND THE LIKE PROVIDED FOR THEREIN SHALL SURVIVE THE CLOSING).

 

99

 

Lender and Borrower are executing this Agreement as of the date first
above written.

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  GOLDMAN SACHS
  COMMERCIAL MORTGAGE

  
	
   

  	
  CAPITAL, L.P., a
  Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Boerner

  
	
   

  	
   

  	
  Name:

  	
  John Boerner

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  CITICORP NORTH AMERICA,
  INC., a New York

  
	
   

  	
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David Bouton

  
	
   

  	
   

  	
  Name:

  	
  David Bouton

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  SL GREEN REALTY CORP.,
  a Maryland Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregory F. Hughes

  
	
   

  	
   

  	
  Name:

  	
  Gregory F. Hughes

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Operating Officer

  

 

[Signatures continue on
following page]

 

 

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  GKK STARS ACQUISITION LLC, a

  
	
   

  	
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew S. Levine

  
	
   

  	
   

  	
  Name:

  	
  Andrew S. Levine

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  AMERICAN FINANCIAL REALTY TRUST, a

  
	
   

  	
  Maryland real estate investment trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew S. Levine 

  
	
   

  	
   

  	
  Name:

  	
  Andrew S. Levine

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  FIRST STATES GROUP, L.P., a

  
	
   

  	
  Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew S. Levine

  
	
   

  	
   

  	
  Name:

  	
  Andrew S. Levine

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

 

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  The entities listed on Schedule A to this

  
	
   

  	
  signature page

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew S. Levine

  
	
   

  	
   

  	
  Name:

  	
  Andrew S. Levine

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

 

 

 

 

Schedule A

 

American Financial TRS, Inc.(DE)

First States Investors 104 Holdings, L.P. (DE)

First States Investors 240 Holdings, LLC (DE)

First States Investors 241 Holdings, LLC (DE)

First States Investors 3300 Holdings, LLC (DE)

First States Investors 4000A, L.P. (DE)

First States Investors 4100, LLC (DE)

First States Investors 4600 Holdings, LLC (DE)

First States Investors 5000, LLC (DE)

First States Investors 6000, Holdings, LLC

First States Investors 801 Holdings, L.P. (PA)

First States Investors 923 Holdings, L.P.

First States Investors 927 Holdings, LLC

First States Investors Asset Group A, L.P.

First States Investors GS Pool A Holdings, LLC (DE)

First States Investors GS Pool B Holdings, LLC (DE)

First States Investors, L.P. (DE)

First States Partners III, L.P. (DE)

First States Partners, L.P.

First States Properties, L.P. (PA)

First States Wilmington JV, L.P.

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