Document:

Exhibit 10.6

 

	
   

  
	
   

  
	
  LOAN AGREEMENT

  
	
   

  
	
  Dated as of December 8, 2006

  
	
   

  
	
  Between

  
	
   

  
	
  ART MORTGAGE BORROWER PROPCO 2006-2 L.P.

  
	
  and

  
	
  ART MORTGAGE BORROWER OPCO 2006-2 L.P.,

  
	
  collectively, as Borrower

  
	
   

  
	
  and

  
	
   

  
	
  GERMAN AMERICAN CAPITAL CORPORATION

  
	
   

  
	
  and

  
	
   

  
	
  JPMORGAN CHASE BANK, N.A.,

  
	
  collectively, as Lender

  
	
   

  
	
   

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  I.

  	
  DEFINITIONS;
  PRINCIPLES OF CONSTRUCTION

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
   

  	
  Principles
  of Construction

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  THE
  LOAN

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  The
  Loan

  	
  23

  
	
  2.1.1

  	
   

  	
  Agreement
  to Lend and Borrow

  	
  23

  
	
  2.1.2

  	
   

  	
  Single
  Disbursement to Borrower

  	
  23

  
	
  2.1.3

  	
   

  	
  The
  Note

  	
  23

  
	
  2.1.4

  	
   

  	
  Use
  of Proceeds

  	
  23

  
	
  Section 2.2

  	
   

  	
  Interest
  Rate

  	
  23

  
	
  2.2.1

  	
   

  	
  Applicable
  Interest Rate

  	
  23

  
	
  2.2.2

  	
   

  	
  Interest
  Calculation

  	
  23

  
	
  2.2.3

  	
   

  	
  Intentionally
  Omitted

  	
  24

  
	
  2.2.4

  	
   

  	
  Usury
  Savings

  	
  24

  
	
  Section 2.3

  	
   

  	
  Loan
  Payments

  	
  24

  
	
  2.3.1

  	
   

  	
  Payment
  Before Maturity Date

  	
  24

  
	
  2.3.2

  	
   

  	
  Payment
  on Maturity Date

  	
  24

  
	
  2.3.3

  	
   

  	
  Interest
  Rate and Payment after Default

  	
  24

  
	
  2.3.4

  	
   

  	
  Late
  Payment Charge

  	
  25

  
	
  2.3.5

  	
   

  	
  Method
  and Place of Payment

  	
  25

  
	
  Section 2.4

  	
   

  	
  Prepayments

  	
  25

  
	
  2.4.1

  	
   

  	
  Voluntary
  Prepayments

  	
  25

  
	
  2.4.2

  	
   

  	
  Mandatory
  Prepayments

  	
  29

  
	
  2.4.3

  	
   

  	
  Prepayments
  After Default

  	
  30

  
	
  Section 2.5

  	
   

  	
  Defeasance

  	
  30

  
	
  2.5.1

  	
   

  	
  Total
  Defeasance

  	
  30

  
	
  2.5.2

  	
   

  	
  Partial
  Defeasance

  	
  32

  
	
  2.5.3

  	
   

  	
  Defeasance
  Collateral Account

  	
  35

  
	
  2.5.4

  	
   

  	
  Successor
  Borrower

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Borrower
  Representations

  	
  36

  
	
  3.1.1

  	
   

  	
  Organization

  	
  36

  
	
  3.1.2

  	
   

  	
  Proceedings

  	
  37

  
	
  3.1.3

  	
   

  	
  No
  Conflicts

  	
  37

  
	
  3.1.4

  	
   

  	
  Litigation

  	
  37

  
	
  3.1.5

  	
   

  	
  Orders
  and Decrees

  	
  37

  
	
  3.1.6

  	
   

  	
  Consents

  	
  37

  
	
  3.1.7

  	
   

  	
  Title

  	
  38

  

 

i

 

	
  3.1.8

  	
  No
  Plan Assets

  	
  38

  
	
  3.1.9

  	
  Compliance

  	
  38

  
	
  3.1.10

  	
  Financial
  Information

  	
  39

  
	
  3.1.11

  	
  Condemnation

  	
  39

  
	
  3.1.12

  	
  Utilities
  and Public Access

  	
  39

  
	
  3.1.13

  	
  Separate
  Lots

  	
  39

  
	
  3.1.14

  	
  Assessments

  	
  39

  
	
  3.1.15

  	
  Enforceability

  	
  39

  
	
  3.1.16

  	
  Assignment
  of Leases

  	
  39

  
	
  3.1.17

  	
  Insurance

  	
  40

  
	
  3.1.18

  	
  Licenses

  	
  40

  
	
  3.1.19

  	
  Flood
  Zone

  	
  40

  
	
  3.1.20

  	
  Physical
  Condition

  	
  40

  
	
  3.1.21

  	
  Boundaries

  	
  40

  
	
  3.1.22

  	
  Leases

  	
  40

  
	
  3.1.23

  	
  Filing
  and Recording Taxes

  	
  41

  
	
  3.1.24

  	
  Single
  Purpose

  	
  41

  
	
  3.1.25

  	
  Tax
  Filings

  	
  46

  
	
  3.1.26

  	
  Solvency

  	
  46

  
	
  3.1.27

  	
  Federal
  Reserve Regulations

  	
  47

  
	
  3.1.28

  	
  Organizational
  Chart

  	
  47

  
	
  3.1.29

  	
  Bank
  Holding Company

  	
  47

  
	
  3.1.30

  	
  No
  Other Debt

  	
  47

  
	
  3.1.31

  	
  Investment
  Company Act

  	
  47

  
	
  3.1.32

  	
  Intentionally
  Omitted

  	
  47

  
	
  3.1.33

  	
  No
  Bankruptcy Filing

  	
  47

  
	
  3.1.34

  	
  Full
  and Accurate Disclosure

  	
  47

  
	
  3.1.35

  	
  Foreign
  Person

  	
  48

  
	
  3.1.36

  	
  Intentionally
  Omitted

  	
  48

  
	
  3.1.37

  	
  No
  Change in Facts or Circumstances; Disclosure

  	
  48

  
	
  3.1.38

  	
  Property
  Management

  	
  48

  
	
  3.1.39

  	
  Perfection
  of Accounts

  	
  48

  
	
  3.1.40

  	
  Agreements

  	
  48

  
	
  3.1.41

  	
  Intentionally
  Omitted

  	
  49

  
	
  3.1.42

  	
  SPE
  Separateness Covenants

  	
  49

  
	
  Section 3.2

  	
  Survival
  of Representations

  	
  49

  
	
   

  	
   

  	
   

  
	
  IV.

  	
  BORROWER
  COVENANTS

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Borrower
  Affirmative Covenants

  	
  49

  
	
  4.1.1

  	
  Existence;
  Compliance with Legal Requirements

  	
  49

  
	
  4.1.2

  	
  Taxes
  and Other Charges

  	
  49

  
	
  4.1.3

  	
  Litigation

  	
  50

  
	
  4.1.4

  	
  Access
  to Property

  	
  50

  
	
  4.1.5

  	
  Further
  Assurances; Supplemental Mortgage Affidavits

  	
  50

  
	
  4.1.6

  	
  Financial
  Reporting

  	
  50

  
	
  4.1.7

  	
  Title to the Property

  	
  54

  
				

 

ii

 

	
  4.1.8

  	
  Estoppel
  Statement

  	
  54

  
	
  4.1.9

  	
  Leases

  	
  54

  
	
  4.1.10

  	
  Alterations

  	
  56

  
	
  4.1.11

  	
  Intentionally
  Omitted

  	
  57

  
	
  4.1.12

  	
  Material
  Agreements

  	
  57

  
	
  4.1.13

  	
  Performance
  by Borrower

  	
  58

  
	
  4.1.14

  	
  Costs
  of Enforcement/Remedying Defaults

  	
  58

  
	
  4.1.15

  	
  Business
  and Operations

  	
  58

  
	
  4.1.16

  	
  Intentionally
  Omitted

  	
  58

  
	
  4.1.17

  	
  Intentionally
  Omitted

  	
  58

  
	
  4.1.18

  	
  Cash
  Management Agency Agreement

  	
  58

  
	
  Section 4.2

  	
  Borrower
  Negative Covenants

  	
  59

  
	
  4.2.1

  	
  Due
  on Sale and Encumbrance; Transfers of Interests

  	
  59

  
	
  4.2.2

  	
  Liens

  	
  59

  
	
  4.2.3

  	
  Dissolution

  	
  59

  
	
  4.2.4

  	
  Change
  in Business

  	
  59

  
	
  4.2.5

  	
  Debt
  Cancellation

  	
  59

  
	
  4.2.6

  	
  Affiliate
  Transactions

  	
  59

  
	
  4.2.7

  	
  Zoning

  	
  59

  
	
  4.2.8

  	
  Assets

  	
  60

  
	
  4.2.9

  	
  No
  Joint Assessment

  	
  60

  
	
  4.2.10

  	
  Principal
  Place of Business

  	
  60

  
	
  4.2.11

  	
  ERISA

  	
  60

  
	
  4.2.12

  	
  Material
  Agreements

  	
  60

  
	
  4.2.13

  	
  Intentionally
  Omitted

  	
  61

  
	
  4.2.14

  	
  Intentionally
  Omitted

  	
  61

  
	
  4.2.15

  	
  Intentionally
  Omitted

  	
  61

  
	
  4.2.16

  	
  Cash
  Management Agency Agreement

  	
  61

  
	
   

  	
   

  	
   

  
	
  V.

  	
  INSURANCE,
  CASUALTY AND CONDEMNATION

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Insurance

  	
  61

  
	
  5.1.1

  	
  Insurance
  Policies

  	
  61

  
	
  5.1.2

  	
  Insurance
  Company

  	
  66

  
	
  5.1.3

  	
  Current
  Insurance

  	
  66

  
	
  Section 5.2

  	
  Casualty
  and Condemnation

  	
  66

  
	
  5.2.1

  	
  Casualty

  	
  66

  
	
  5.2.2

  	
  Condemnation

  	
  67

  
	
  5.2.3

  	
  Casualty
  Proceeds

  	
  67

  
	
  Section 5.3

  	
  Delivery
  of Net Proceeds

  	
  68

  
	
  5.3.1

  	
  Minor
  Casualty or Condemnation

  	
  68

  
	
  5.3.2

  	
  Major
  Casualty or Condemnation

  	
  68

  
	
   

  	
   

  	
   

  
	
  VI.

  	
  RESERVE
  FUNDS

  	
  71

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Required
  Repair Funds

  	
  71

  
	
  6.1.1

  	
  Deposits of Required Repair Funds

  	
  71

  
				

 

iii

 

	
  6.1.2

  	
  Release
  of Required Repair Funds

  	
  72

  
	
  Section 6.2

  	
  Tax
  Funds

  	
  73

  
	
  6.2.1

  	
  Deposits
  of Tax Funds

  	
  73

  
	
  6.2.2

  	
  Release
  of Tax Funds

  	
  74

  
	
  Section 6.3

  	
  Insurance
  Funds

  	
  74

  
	
  6.3.1

  	
  Deposits
  of Insurance Funds

  	
  74

  
	
  6.3.2

  	
  Release
  of Insurance Funds

  	
  75

  
	
  Section 6.4

  	
  Capital
  Expenditure Funds

  	
  75

  
	
  6.4.1

  	
  Deposits
  of Capital Expenditure Funds

  	
  75

  
	
  6.4.2

  	
  Release
  of Capital Expenditure Funds

  	
  75

  
	
  Section 6.5

  	
  Borrower
  Cash Collateral Funds

  	
  77

  
	
  6.5.1

  	
  Deposits
  of Borrower Cash Collateral Funds

  	
  77

  
	
  6.5.2

  	
  Release
  of Borrower Cash Collateral Funds

  	
  77

  
	
  Section 6.6

  	
  Intentionally
  Omitted

  	
  77

  
	
  Section 6.7

  	
  Intentionally
  Omitted

  	
  77

  
	
  Section 6.8

  	
  Application
  of Reserve Funds

  	
  77

  
	
  Section 6.9

  	
  Security
  Interest in Reserve Funds

  	
  78

  
	
  6.9.1

  	
  Grant
  of Security Interest

  	
  78

  
	
  6.9.2

  	
  Income
  Taxes

  	
  78

  
	
  6.9.3

  	
  Prohibition
  Against Further Encumbrance

  	
  78

  
	
  Section 6.10

  	
  Intentionally
  Omitted

  	
  78

  
	
  Section 6.11

  	
  Provisions
  Regarding Letters of Credit

  	
  78

  
	
  6.11.1

  	
  Security
  for Debt

  	
  78

  
	
  6.11.2

  	
  Additional
  Rights of Lender

  	
  78

  
	
  Section 6.12

  	
  Guaranty
  or Letter of Credit in Lieu of Cash Deposit

  	
  79

  
	
   

  	
   

  	
   

  
	
  VII.

  	
  PROPERTY
  MANAGEMENT

  	
  80

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  The
  Management Agreement

  	
  80

  
	
  Section 7.2

  	
  Prohibition
  Against Termination or Modification

  	
  80

  
	
  Section 7.3

  	
  Replacement
  of Manager

  	
  81

  
	
  Section 7.4

  	
  The
  Cash Management Agency Agreement

  	
  81

  
	
   

  	
   

  	
   

  
	
  VIII.

  	
  PERMITTED
  TRANSFERS

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Permitted
  Transfer of Property

  	
  81

  
	
  Section 8.2

  	
  Permitted
  Transfers of Interest in Borrower

  	
  83

  
	
   

  	
   

  	
   

  
	
  IX.

  	
  SALE
  AND SECURITIZATION OF MORTGAGE

  	
  84

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Sale
  of Mortgage and Securitization; Loan Components; Mezzanine Loans

  	
  84

  
	
  Section 9.2

  	
  Securitization
  Indemnification

  	
  86

  
	
   

  	
   

  	
   

  
	
  X.

  	
  DEFAULTS

  	
  89

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Event
  of Default

  	
  89

  
	
  Section 10.2

  	
  Remedies

  	
  91

  
				

 

iv

 

	
  Section 10.3

  	
  Right
  to Cure Defaults

  	
  93

  
	
  Section 10.4

  	
  Remedies
  Cumulative

  	
  93

  
	
   

  	
   

  	
   

  
	
  XI.

  	
  MISCELLANEOUS

  	
  93

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Successors
  and Assigns

  	
  93

  
	
  Section 11.2

  	
  Lender’s
  Discretion

  	
  93

  
	
  Section 11.3

  	
  Governing
  Law

  	
  94

  
	
  Section 11.4

  	
  Modification,
  Waiver in Writing

  	
  95

  
	
  Section 11.5

  	
  Delay
  Not a Waiver

  	
  95

  
	
  Section 11.6

  	
  Notices

  	
  96

  
	
  Section 11.7

  	
  Trial
  by Jury

  	
  97

  
	
  Section 11.8

  	
  Headings

  	
  98

  
	
  Section 11.9

  	
  Severability

  	
  98

  
	
  Section 11.10

  	
  Preferences

  	
  98

  
	
  Section 11.11

  	
  Waiver
  of Notice

  	
  98

  
	
  Section 11.12

  	
  Remedies
  of Borrower

  	
  98

  
	
  Section 11.13

  	
  Expenses;
  Indemnity

  	
  99

  
	
  Section 11.14

  	
  Schedules
  Incorporated

  	
  100

  
	
  Section 11.15

  	
  Offsets,
  Counterclaims and Defenses

  	
  100

  
	
  Section 11.16

  	
  No
  Joint Venture or Partnership; No Third Party Beneficiaries

  	
  100

  
	
  Section 11.17

  	
  Publicity

  	
  100

  
	
  Section 11.18

  	
  Waiver
  of Marshalling of Assets

  	
  101

  
	
  Section 11.19

  	
  Waiver
  of Offsets/Defenses/Counterclaims

  	
  101

  
	
  Section 11.20

  	
  Conflict;
  Construction of Documents; Reliance

  	
  101

  
	
  Section 11.21

  	
  Brokers
  and Financial Advisors

  	
  101

  
	
  Section 11.22

  	
  Exculpation

  	
  101

  
	
  Section 11.23

  	
  Prior
  Agreements

  	
  103

  
	
  Section 11.24

  	
  Servicer

  	
  103

  
	
  Section 11.25

  	
  Joint
  and Several Liability

  	
  104

  
	
  Section 11.26

  	
  Creation
  of Security Interest

  	
  104

  
	
  Section 11.27

  	
  Assignments
  and Participations

  	
  105

  
	
  Section 11.28

  	
  Intentionally
  Omitted

  	
  106

  
	
  Section 11.29

  	
  Substitution

  	
  106

  
	
  Section 11.30

  	
  Partial
  Release — Expansion

  	
  112

  
	
  Section 11.31

  	
  Co-Lenders

  	
  114

  
				

 

v

 

SCHEDULES

 

	
  Schedule
  I

  	
  -

  	
  Major
  Customer List

  
	
  Schedule
  II

  	
  -

  	
  Required
  Repairs

  
	
  Schedule
  III

  	
  -

  	
  Organizational
  Chart

  
	
  Schedule
  IV

  	
  -

  	
  Form of
  Subordination, Non-Disturbance and Attornment Agreement

  
	
  Schedule
  V

  	
  -

  	
  Reserved

  
	
  Schedule
  VI

  	
  -

  	
  List
  of Properties, Allocated Loan Amounts, Allocated Trigger Amounts, Allocated
  Cash Trap Amounts, Allocated Capital Expenditure Amounts and Title

  
	
  Schedule
  VII

  	
  -

  	
  Proposed
  Annual Budget

  
	
  Schedule
  VIII

  	
  -

  	
  Leases
  with Major Tenants

  
	
  Schedule
  IX

  	
  -

  	
  List
  of Properties with no Certificate of Occupancy

  
	
  Schedule
  X

  	
  -

  	
  Reserved

  
	
  Schedule
  XI

  	
  -

  	
  Excluded
  Lender Transferees

  
	
  Schedule
  XII

  	
  -

  	
  Form of
  Alteration Guaranty

  
	
  Schedule
  3.1

  	
  -

  	
  Disclosure
  Schedule

  

 

i

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT, dated as of December 8,
2006 (as amended, restated, replaced, supplemented or otherwise modified from
time to time, this “Agreement”), between GERMAN
AMERICAN CAPITAL CORPORATION, a Maryland corporation, having an address
at 60 Wall Street, 10th Floor, New York, New York 10005 (“GACC”),
and JPMORGAN CHASE BANK, N.A., a banking
association chartered under the laws of the United States of America, having an
address at 270 Park Avenue, New York, New York 10017-2014 (“JPM”; GACC
and JPM, each a “Co-Lender” and, collectively, “Lender”), and ART MORTGAGE BORROWER PROPCO 2006-2 L.P., a Delaware limited
partnership (“Propco Borrower”), and ART MORTGAGE
BORROWER OPCO 2006-2 L.P., a Delaware limited partnership (“Opco
Borrower”, and together with Propco Borrower, individually or collectively
as the context may require, “Borrower”), each having an address at 10
Glenlake Parkway, Suite 800, Atlanta, Georgia 30328.

 

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

 

W I T N E S S E T H

 

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

 

WHEREAS, Lender is
willing to make the Loan to Borrower, subject to and in accordance with the
terms of this Agreement and the other Loan Documents (as hereinafter defined).

 

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

 

I.              DEFINITIONS;
PRINCIPLES OF CONSTRUCTION

 

Section 1.1            Definitions. 
For all purposes of this Agreement, except as otherwise expressly
provided:

 

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

 

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

 

“Agent” shall mean
U.S. Bank National Association or any successor Eligible Institution thereto
acting as Agent under the Cash Management Agreement.

 

1

 

“Allocated Capital
Expenditure Amount” shall mean the portion of the Capital Expenditure
Maximum Amount allocated to each Individual Property, as set forth on Schedule
VI.

 

“Allocated Loan Amount”
shall mean the portion of the Loan allocated to each Individual Property, as
set forth on Schedule VI as the same may be reduced pursuant to Section 2.4.2.

 

“Allocated Cash Trap
Amount” shall mean, with respect to any Individual Property, the “Allocated
Cash Trap Amount” for such Individual Property, as set forth on Schedule VI.

 

“Allocated Trigger Amount”
shall mean, with respect to any Individual Property, the “Allocated Trigger
Amount” for such Individual Property, as set forth on Schedule VI.

 

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

 

“Alteration” shall
mean any demolition, alteration, installation, improvement or decoration of or
to any Improvements at any Individual Property or any part thereof (it being
agreed that any expansion of the Improvements at any Individual Property shall
not be deemed to be an “Alteration” hereunder so long as such expansion is
undertaken and completed in accordance with Legal Requirements and this
definition shall specifically exclude Required Repairs).

 

“Alteration Collateral”
shall have the meaning set forth in Section 4.1.10(a).

 

“Alteration Guaranty”
shall have the meaning set forth in Section 4.1.10(a).

 

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

 

“Alteration Threshold”
shall mean the lesser of (i) five percent (5%) of the aggregate
outstanding principal amount of the Loan with respect to all Alterations at any
time to all of the Properties or, (ii) with respect to any affected
Individual Property, fifteen percent (15%) of the Allocated Loan Amount for
such Individual Property.

 

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

 

“Applicable Interest Rate”
shall mean 5.396% per annum.

 

“Appraisal” shall
mean an M.A.I. appraisal of the Property in its then “as is” condition,
prepared not more than ninety (90) days (or such longer period as shall be
acceptable to Lender) prior to the date delivered to Lender or Servicer in
connection with the relevant event or approval; which appraisal (i) shall
meet 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 (ii) otherwise

 

2

 

shall
be in both form and substance (including with respect to methods, procedures
and scope of services) reasonably satisfactory to Lender.

 

“Approved Annual Budget”
shall have the meaning set forth in Section 4.1.6(e).

 

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

 

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

 

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

 

“Bankruptcy Action”
shall have the meaning set forth in Section 3.1.24(y).

 

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

 

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

 

“Borrower” shall
mean, individually or collectively as the context may require, Propco Borrower
and/or Opco Borrower.

 

“Borrower Cash Collateral
Funds” shall have the meaning set forth in Section 6.5.1.

 

“Borrower Excess Cash
Flow” shall have the meaning set forth in the Cash Management Agreement.

 

“Borrower GP” shall
have the meaning set forth in Section 3.1.24(z).

 

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

 

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

 

3

 

“Capital Expenditure
Maximum Amount” shall mean, as of any date, an amount equal to Four Million
and No/100 Dollars ($4,000,000.00) less the Allocated Capital Expenditure
Amount of each Individual Property previously released from the lien of the
Mortgage (or, in lieu of such release, which Mortgage is assigned by Lender)
pursuant to Section 2.4 or Section 2.5, and less the
Allocated Capital Expenditure Amount of a Substituted Property pursuant to Section 11.29,
but plus the Allocated Capital Expenditure Amount of a Substitute Property
pursuant to Section 11.29, subject in all cases to a maximum
aggregate of $4,000,000.00.

 

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

 

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

 

“Cash Management Agency
Agreement” shall mean, collectively, (i) that certain Cash Management
Agency Agreement, dated as of the date hereof, between Propco Borrower and
Guarantor, (ii) that certain Cash Management Sub-Agency Agreement dated as
of the date hereof between Guarantor and Logistics and (iii) that certain
Administrative Services and Cost Allocation Agreement dated as of the date
hereof between Opco Borrower and Logistics, in each case as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with the terms of this Agreement.

 

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

 

“Cash Trap Amount”
shall mean, as of any date, an amount equal to the aggregate of the Allocated
Cash Trap Amounts of all Individual Properties less the Allocated Cash Trap
Amount of each Individual Property previously released from the lien of the
Mortgage (or, in lieu of such release, which Mortgage was assigned by Lender)
pursuant to Section 2.4 or Section 2.5.

 

“Cash Trap Event”
shall mean, on the relevant date, the fact that the annual Underwritable Cash
Flow for the Property determined by Lender as of the end of each fiscal quarter
(based on Borrower’s Fiscal Year) on a trailing four (4) quarter basis is
less than the Cash Trap Amount.

 

“Cash Trap Period”
shall mean a period commencing on the first (1st) Business Day after a Cash Trap Event has occurred
to the first (1st) Business Day
after the related Cash Trap Event has not existed for a period of two (2) consecutive
fiscal quarters.

 

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

 

“Casualty Consultant”
shall mean an independent architect selected by Lender.

 

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

 

4

 

“CEI” shall mean
Crescent Real Estate Equities Company, a Texas real estate investment trust,
and its permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of CEI, subject to any terms, covenants and/or
conditions of this Agreement.

 

“Closing Date” shall
mean the date hereof.

 

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

 

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

 

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

 

“Confidential” shall
mean that, prior to the occurrence of an Event of Default or special servicing
of the Loan for any reason whatsoever, such information shall not be
disseminated by Lender to the general public unless such information is already
in the public domain or unless Lender is otherwise required by law, legal
requirement or order, writ, subpoena or other directive of any Governmental
Authority. Notwithstanding the foregoing, Lender shall not be restricted or
prohibited in any manner whatsoever from providing such information to its
consultants, attorneys or accountants, the Servicer, any Rating Agencies or any
potential participants or assignees (other than any Excluded Lender Transferee)
of all or any portion of the Loan or in connection with a Securitization of all
or any portion of the Loan.

 

“CRE” shall mean
Crescent Real Estate Equities Limited Partnership, a Delaware limited
partnership, and its permitted successors by merger, consolidation or transfer
of all or substantially all of the assets of CRE, subject to any terms,
covenants and/or conditions of this Agreement.

 

“Debt” shall mean the
outstanding principal amount of the Loan together with all interest accrued and
unpaid thereon and all other sums (including, without limitation, any Yield
Maintenance Premium) due to Lender in respect of the Loan under the Note, this
Agreement, the Mortgage, the Environmental Indemnity or any other Loan
Document.

 

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

 

“Debt Service Coverage
Ratio” shall mean, as of any date of calculation, the ratio of (i) Underwritable
Cash Flow for the twelve (12) calendar month period immediately preceding such
date to (ii) the projected Debt Service that would be due for the twelve
(12) calendar month period immediately following such date based upon an
assumed loan constant for such period equal to the Applicable Interest Rate.

 

5

 

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

 

“Default Rate” shall
mean, with respect to the Loan, a rate per annum equal to the lesser of (i) the
maximum rate permitted by applicable law, or (ii) three percent (3%) above
the Applicable Interest Rate.

 

“Defeasance Collateral”
shall mean the Total Defeasance Collateral or the Partial Defeasance Collateral
as the context may require.

 

“Defeasance Collateral
Account” shall have the meaning set forth in Section 2.5.3.

 

“Defeasance Date”
shall mean the Total Defeasance Date or the Partial Defeasance Date as the
context may require.

 

“Defeasance Event”
shall the Total Defeasance Event or the Partial Defeasance Event as the context
may require.

 

“Defeasance Security
Agreement” shall mean a security agreement in form and substance that would
be reasonably satisfactory to a reasonably prudent lender originating
commercial loans for securitization similar to the Loan pursuant to which
Borrower grants Lender a perfected, first priority security interest in the
Defeasance Collateral Account and the Defeasance Collateral.

 

“Defeased Note” shall
have the meaning set forth in Section 2.5.2(a)(iv).

 

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

 

“Disqualified Transferee”
shall mean any Person that (i) has (within the past seven (7) years)
defaulted, or is now in default, beyond any applicable cure period, of its
material obligations, under any written agreement with Lender, any affiliate of
Lender, any financial institution or other Person providing or arranging
financing; (ii) has been convicted in a criminal proceeding for a felony
or a crime involving moral turpitude or that is an organized crime figure or is
reputed (as determined by Lender in its sole discretion) to have substantial
business or other affiliations with an organized crime figure; (iii) has
at any time filed a voluntary petition under the Bankruptcy Code or any other
federal or state bankruptcy or insolvency law; (iv) as to which an
involuntary petition has at any time been filed under the Bankruptcy Code or
any other federal or state bankruptcy or insolvency law; (v) has at any
time filed an answer consenting to or acquiescing in any involuntary petition
filed against it by any other person under the Bankruptcy Code or any other
federal or state bankruptcy or insolvency law; (vi) has at any time
consented to or acquiesced in or joined in an application for the appointment
of a custodian, receiver, trustee or examiner for itself or any of its
property; (vii) has at any time made a general assignment for the benefit
of creditors, or has at any time admitted its insolvency or inability to pay
its debts as they become due; or (viii) has been found by a court of
competent jurisdiction or other governmental authority in a comparable
proceeding to have violated any federal or state securities laws or regulations
promulgated thereunder.

 

6

 

“Downgrade Event”
shall have the meaning set forth in Section 10.1(a)(xvi).

 

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

 

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

 

“Environmental Indemnity”
shall mean that certain Environmental Indemnity Agreement dated as of the date
hereof executed by Borrower and Guarantor in connection with the Loan for the
benefit of Lender.

 

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

 

“ERISA” shall have
the meaning set forth in Section 3.1.8.

 

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

 

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

 

“Excess Alteration Amount”
shall have the meaning set forth in Section 4.1.10(a).

 

“Excluded Lender
Transferee” shall mean any Person listed on Schedule XI and its
Affiliates.

 

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

 

“Expansion Date”
shall have the meaning set forth in Section 11.30(a)(i).

 

7

 

“Expansion Parcel”
shall mean an unimproved area or areas of any Individual Property on which
Rents are not payable and Improvements (other than utilities and the like that
are permitted pursuant to a recorded agreement) are not situated, which area or
areas are not necessary for the use and operation of the remainder of such
Individual Property (except to the extent such use or operation is permitted
pursuant to a separate agreement), are designated by Borrower for expansion or
any other reasonable business purpose in order to service any customer or
prospective customer of Borrower or any Affiliate of Borrower, the transfer and
separate development of which would not, in Borrower’s judgment (provided
Borrower has certified the same) materially adversely affect the value of the
remaining portion of such Individual Property or the Underwritable Cash Flow
from the remaining portion of such Individual Property (taking into account, to
the extent applicable, any potential loss of revenue resulting if the transfer
and development of the Expansion Parcel were not to occur).

 

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

 

“Fitch” shall mean
Fitch, Inc.

 

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

 

“GACC” shall have the
meaning set forth in the introductory paragraph hereof.

 

“GACC Note” shall
mean that certain Promissory Note A-1, dated as of the date hereof, made by
Borrower to GACC in the original principal amount of Two Hundred Ten Million
and No/l00 Dollars ($210,000,000.00), as the same may be amended, restated,
replaced, supplemented, increased, extended, consolidated or otherwise modified
from time to time.

 

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

 

“Gross Revenue” shall
mean all revenue, derived from the ownership and operation of the Property from
whatever source, including, but not limited to, Rents, but excluding receipts,
revenues and other income generated from transportation operations conducted or
performed by Borrower or any of its Affiliates from or with respect to any one
or more Individual Properties, sales, use and occupancy or other taxes on
receipts required to be accounted for by the owner or operator of the Property
to any Governmental Authority, non-recurring revenues as reasonably determined
by Lender, proceeds from the sale or refinancing of any Individual Property,
security deposits (except to the extent determined by Lender to be properly
utilized to offset a loss of Rent), refunds and uncollectible accounts,
proceeds of casualty insurance and Awards (other than business interruption or
other loss of income insurance related to business interruption or loss of
income for the period in question), and any 

 

8

 

disbursements
to Borrower or any operator of the Property from the Reserve Funds or any other
fund established by the Loan Documents.

 

“Guarantor” shall
mean Americold Realty Trust, a Maryland real estate investment trust, and its
permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of Americold Realty Trust, subject to any
terms, covenants and/or conditions of this Agreement.

 

“Guaranty” shall mean
that certain Recourse Guaranty dated as of the date hereof executed by the
Guarantor in connection with the Loan for the benefit of Lender.

 

“Improvements” with
respect to each Individual Property, shall have the meaning set forth in the
granting clause of the applicable Mortgage.

 

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

 

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

 

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

 

“Individual Loan-to-Value
Ratio” shall mean, with respect to an Individual Property, as of any date
of determination, a ratio (as reasonably determined by Lender), (x) the
numerator of which is equal to the Allocated Loan Amount for such Individual
Property, and (y) the denominator of which is equal to the “as-is” fair
market value of such Individual Property, determined with respect to the
Closing Date by the Appraisals delivered to Lender on or prior to the date
hereof, and with respect to future dates, on the basis of Lender’s reasonable
determination of the fair market value of such Individual Property, or, if
Borrower disputes Lender’s valuation or otherwise elects to deliver an
Appraisal, on the basis of an Appraisal commissioned by the Lender and at
Borrower’s expense.

 

“Individual Property”
shall mean the parcel of real property located at each address listed on Schedule
VI other than any Release Property or Expansion Parcel released pursuant to
Section 2.4, 2.5 or 11.30, the Improvements thereon
and all personal property owned by Borrower and encumbered by a Mortgage,
together with all of Borrower’s rights pertaining to such property and
Improvements, all as more particularly described in the Granting Clauses of the
applicable Mortgage.

 

9

 

“Insolvency Opinion”
shall mean that certain bankruptcy nonconsolidation opinion letter dated the
date hereof delivered by Arnall Golden Gregory LLP in connection with the Loan.

 

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

 

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

 

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

 

“JPM” shall have the
meaning set forth in the introductory paragraph hereof.

 

“JPM Note” shall mean
that certain Promissory Note A-2, dated as of the date hereof, made by Borrower
to JPM in the original principal amount of One Hundred Forty Million and No/100
Dollars ($140,000,000.00), as the same may be amended, restated, replaced,
supplemented, increased, extended, consolidated or otherwise modified from time
to time.

 

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

 

“Legal Requirements”
shall mean all federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities affecting Borrower, Manager or any
Individual Property or any part thereof or the construction, use, alteration or
operation thereof, or any part thereof, whether now or hereafter enacted and in
force, including, without limitation, the Americans with Disabilities Act of
1990, and all permits, licenses and authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments, either of record or known to Borrower, at any time in force
affecting the Borrower or any Individual Property or any part thereof,
including, without limitation, any which may (i) require repairs,
modifications or alterations in or to any Individual Property or any part
thereof, or (ii) in any way limit the use and enjoyment thereof.

 

“Lender” shall mean
German American Capital Corporation, a Maryland corporation, and JPMorgan Chase
Bank, N.A., a banking association chartered under the laws of the United States
of America, as holders of the GACC Note and JPM Note, respectively, together
with their respective successors, assigns, and, subject to and for the purposes
set forth in Section 11.27, Participants.

 

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

 

10

 

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

 

“Letter of Credit”
shall mean an irrevocable, unconditional, transferable, clean sight draft
letter of credit acceptable to Lender and the Rating Agencies in favor of
Lender and entitling Lender to draw thereon in New York, New York, issued by a
domestic Eligible Institution or the U.S. agency or branch of a foreign
Eligible Institution.  The Letter of
Credit shall have a term of at least one (1) year (or such shorter period
of time necessary for such Letter of Credit to have a term which does not
expire until at least thirty (30) days after the Maturity Date); provided,
however, that any such Letter of Credit which is in effect upon the Maturity
Date shall not expire until at least thirty (30) days after the Maturity
Date.  If Borrower has not provided
Lender with a new Letter of Credit at least ten (10) Business Days prior
to the expiration of any Letter of Credit, then Lender shall have the right to
immediately draw down the same in full and hold the proceeds of such draw as
cash security in accordance with the applicable provisions hereof.  If at any time the bank issuing any such
Letter of Credit shall cease to be an Eligible Institution and Borrower does
not replace such Letter of Credit with a Letter of Credit issued by an
institution that is an Eligible Institution prior to the earlier to occur of (i) five
(5) days after Borrower has knowledge of such event or (ii) five (5) days
after Lender has provided Borrower with notice thereof, then Lender shall have
the right immediately to draw down the same in full and hold the proceeds of
such draw in accordance with the applicable provisions hereof

 

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

 

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

 

“Loan” shall mean the
loan in the original principal amount of Three Hundred Fifty Million and No/100
Dollars ($350,000,000.00) made by Lender to Borrower pursuant to this
Agreement.

 

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

 

“Loan-to-Value Ratio”
shall mean, as of any date of determination, a ratio (as reasonably determined
by Lender), (x) the numerator of which is equal to (i) the
outstanding principal balance of the Loan, and (y) the denominator of
which is equal to the “as-is” fair market value of the Property, determined on
the basis of Lender’s reasonable determination of the fair market value of the
Property, or, if Borrower disputes Lender’s valuation, on the basis of an
Appraisal commissioned by the Lender and at Borrower’s expense.

 

11

 

“Logistics” shall
mean AmeriCold Logistics LLC, a Delaware limited liability company, and its
permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of AmeriCold Logistics LLC, subject to any
terms, covenants and/or conditions of this Agreement.

 

“Major Customer List”
shall mean a list of those customers each of which, pursuant to one or more
Leases or Service Contracts for space at one or more of the Individual
Properties, is required to make aggregate annual payments to the Borrowers of
not less than $5,000,000.  The Major
Customer List as of the date hereof is attached hereto as Schedule I.

 

“Major Lease” shall
mean any Lease covering all or substantially all of the Property.

 

“Major Tenant” shall
mean (i) any Tenant occupying all or substantially all of any Individual
Property pursuant to a Lease (other than any month-to-month Lease) and (ii) any
Tenant under any Lease listed on Schedule VIII.

 

“Management Agreement”
shall mean (a) that certain Management Agreement, dated as of the date
hereof, between Propco Borrower and Manager, as the same may be amended or
otherwise modified from time to time in accordance with the terms of this
Agreement, or (b) if the context requires, a replacement management
agreement entered into by and between Borrower and a Qualified Manager in
accordance with the terms of this Agreement.

 

“Manager” shall mean (a) ART
Manager L.L.C. or (b) if the context requires, any other Qualified Manager
which becomes manager of the Property in accordance with the terms of this
Agreement.

 

“Material Adverse Effect”
shall mean any event or condition that has a material and adverse effect, in
each case, taken as a whole on (a) the business operations, economic
performance, assets, financial condition, equity, contingent liabilities,
prospects, material agreements or results of operations of Borrower, Guarantor
or the Property, (b) the ability of Borrower or Guarantor to perform, in
all material respects, its respective obligations under the Loan Documents, (c) the
enforceability or validity of any Loan Document, the perfection or priority of
any Lien created under any Loan Document or the remedies of Lender under any
Loan Document, (d) the value of, or cash flow (other than cash flow from
transportation operations conducted or performed by Borrower or any of its
Affiliates from or with respect to any one or more Individual Properties) from,
the Property or the operations thereof or (e) the value of the Loan.

 

“Material Agreements”
means each contract and agreement relating to the ownership, management,
development, use, operation, leasing, maintenance, repair or improvement of any
one (1) or more Individual Properties, other than the Management Agreement
and the Leases, under which there is an obligation of Borrower to pay more than
One Million and No/l00 Dollars ($1,000,000.00) per annum.

 

“Maturity Date” shall
mean February 1, 2016 or such other date on which the final payment of
principal of the Note becomes due and payable as therein or herein provided,
whether at such stated maturity date, by declaration of acceleration, or
otherwise.

 

12

 

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

 

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

 

“Monthly Debt Service
Payment Amount” shall mean, with respect to any Monthly Payment Date, the
interest amount determined in accordance with Section 2.2.2 of this
Agreement.

 

“Monthly Payment Date”
shall mean the first (1st) calendar day
of each calendar month during the term of the Loan, and if such day is not a
Business Day, then the Business Day immediately succeeding Business Day,
commencing on February 1, 2007, and continuing to and including the
Maturity Date.

 

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

 

“Mortgage” shall
mean, with respect to each Individual Property, that certain first priority
Mortgage, Deed of Trust or Deed to Secure Debt, dated as of the date hereof,
executed and delivered by Propco Borrower and encumbering the applicable
Individual Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

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

 

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

 

“Note” shall mean,
collectively, the GACC Note, the JPM Note and, if applicable, the Defeased Note
and the Undefeased Note, in each case as the same may be amended, restated,
replaced, supplemented, increased, extended, consolidated or otherwise modified
from time to time.

 

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

 

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

 

“Opco Borrower” shall
mean ART Mortgage Borrower Opco 2006-2 L.P., a Delaware limited partnership,
and its successors by merger, consolidation or transfer of all or 

 

13

 

substantially
all of the assets of such Person (except to the extent that any such merger,
consolidation or transfer may be prohibited hereunder).

 

“Opco Borrower GP”
shall have the meaning set forth in Section 3.1.24(z).

 

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

 

“Operating Expenses”
shall mean all costs and expenses incurred by or on behalf of Borrower relating
to the operation, maintenance and management of the Property, including,
without limitation, utilities, repairs and maintenance, insurance, property
taxes and assessments, advertising expenses, payroll and related taxes, lease
payments (for leases treated as operating leases in accordance with GAAP), the
greater of actual management salaries and other compensation and related taxes
and 2% of Gross Revenues and $0.03 per gross cubic foot of the Improvements per
annum with respect to capital costs, but excluding actual Capital Expenditures,
lease payments (for leases treated as capital leases in accordance with GAAP),
depreciation, amortization, obligations to post security to secure workers’
compensation obligations, deposits required to be made to the Reserve Funds,
sales, use and occupancy or other taxes on receipts required to be accounted
for by the owner or operator of the Property to any Governmental Authority,
interest expense and income tax expense; provided, however such
costs and expenses shall be subject to adjustment by Lender in its reasonable
discretion to normalize such costs and expenses.  Notwithstanding the foregoing, “Operating
Expenses” shall exclude all costs and expenses incurred in connection with
transportation operations conducted or performed by Borrower or any of its
Affiliates from or with respect to any one or more Individual Properties.

 

“Other Charges” shall
mean all ground rents, maintenance charges, impositions other than Taxes, and
any other charges, including, without limitation, vault charges and license
fees for the use of vaults, chutes and similar areas adjoining any Individual
Property, now or hereafter levied or assessed or imposed against any Individual
Property or any part thereof

 

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

 

“Partial Defeasance
Collateral” shall mean U.S. Obligations which provide payments (i) on
or prior to, but as close as possible to, the Business Day immediately
preceding all Monthly Payment Dates, under the Defeased Note after the
Defeasance Date and up to and including the Monthly Payment Date which Borrower
shall specify occurring concurrently with or after the Permitted Prepayment
Date, and (ii) in amounts equal to or greater than the Scheduled
Defeasance Payments relating to such Monthly Payment Dates.

 

“Partial Defeasance Date”
shall have the meaning set forth in Section 2.5.2(a)(i).

 

“Partial Defeasance Event”
shall have the meaning set forth in Section 2.5.2(a).

 

“Participant” shall
mean any Person that has purchased a participation in this Loan Agreement
pursuant to Section 11.27.

 

14

 

“Permitted Encumbrances”
shall mean, collectively, (i) the Liens and security interests created by
the Loan Documents, (ii) all Liens, encumbrances and other matters
disclosed in the Title Insurance Policy, (iii) Liens, if any, for Taxes
imposed by any Governmental Authority not yet due or delinquent, (iv) mechanics’,
materialmen’s or other similar Liens for delinquent Taxes being contested in
good faith if permitted by and in accordance with the terms and provisions of
the Loan Documents and (v) such other title and survey exceptions as
Lender has approved or may approve in writing in Lender’s sole discretion.

 

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

 

“Permitted Prepayment
Date” shall mean the Monthly Payment Date occurring in October 2015.

 

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

 

“Physical Conditions
Report” shall mean, with respect to each Individual Property, a report
prepared by a company satisfactory to Lender regarding the physical condition
of such Individual Property, satisfactory in form and substance to Lender in
its sole discretion, which report shall, among other things, (i) confirm
that the applicable Individual Property and its use comply, in all material
respects, with all applicable Legal Requirements (including, without
limitation, zoning, subdivision and building laws) and (ii) include a copy
of a final certificate of occupancy with respect to all Improvements.

 

“Plan Assets Regulation”
shall have the meaning specified in Section 3.1.8.

 

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

 

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

 

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

 

“primary Servicer”
shall have the meaning set forth in Section 11.24(d).

 

“Propco Borrower”
shall mean ART Mortgage Borrower Propco 2006-2 L.P., a Delaware limited
partnership, and its successors by merger, consolidation or transfer of all or
substantially all of the assets of such Person (except to the extent that any
such merger, consolidation or transfer may be prohibited hereunder).

 

15

 

“Propco Borrower GP”
shall have the meaning set forth in Section 3.1.24(z).

 

“Property” shall
mean, collectively, the Individual Properties.

 

“Public Company”
shall mean a Person whose stock or ownership interests are publicly traded on
the New York Stock Exchange or other nationally recognized stock exchange.

 

“Qualified Appraiser”
means any member of the American Institute of Real Estate Appraisers selected
by Borrower and reasonably acceptable to the Lender.

 

“Qualified Transferee”
shall mean any one of the following Persons:

 

(i)            a corporation, partnership or limited liability company
acceptable to Lender in its sole discretion;

 

(ii)           a pension fund, pension trust or pension account that
immediately prior to such transfer owns, directly or indirectly, total real
estate assets of at least $1,000,000,000;

 

(iii)          a pension fund advisor who (a) immediately prior to
such transfer, controls, directly or indirectly, at least $1,000,000,000 of
real estate assets and (b) is acting on behalf of one or more pension
funds that, in the aggregate, satisfy the requirements of clause (ii) of
this definition;

 

(iv)          an insurance company which is subject to supervision by the
insurance commissioner, or a similar official or agency, of a state or
territory of the United States (including the District of Columbia) (a) with
a net worth, determined under GAAP as of a date no more than six (6) months
prior to the date of the transfer of at least $500,000,000 and (b) who,
immediately prior to such transfer, controls, directly or indirectly, real
estate assets of at least $1,000,000,000;

 

(v)           a corporation organized under the banking laws of the
United States or any state or territory of the United States (including the
District of Columbia) (a) with a combined capital and surplus of at least
$500,000,000 and (b) who, immediately prior to such transfer, controls,
directly or indirectly, real estate assets of at least $1,000,000,000; or

 

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

 

provided, in each case,
that such Person (a) qualifies as a bankruptcy remote entity under
criteria established by the Rating Agencies and (b) has delivered to
Lender a non-consolidation opinion reasonably acceptable to Lender and
acceptable the Rating Agencies in their sole discretion.

 

“Qualified Manager”
shall mean (a) ART Manager L.L.C., (b) any other Affiliate of
Borrower, (c) any other Person as to which Borrower shall have obtained a
Rating Agency Confirmation or (d) any Person designated by Lender,
provided that in the case of (a), (b) and (c) 

 

16

 

Lender
has not required Borrower to replace such Person (or any Affiliate of such
Person) as Manager pursuant to Section 7.3.

 

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

 

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

 

“Register” shall have
the meaning set forth in Section 11.27(e).

 

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

 

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

 

“Regulation D” shall
mean Regulation D of the Board of Governors of the Federal Reserve System from
time to time in effect, including any successor or other Regulation or official
interpretation of said Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.

 

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

 

“Related Persons”
shall have the meaning set forth in Section 8.1.

 

“Related Property”
shall mean a parcel of real property, together with improvements thereon and
personal property related thereto, that is “related”, within the meaning of the
definition of Significant Obligor, to one or more Individual Properties.

 

“Release Amount”
shall mean, in connection with the release of any Individual Property from the
Lien of the Mortgage (or, in lieu of such release, the assignment of the
Mortgage encumbering any Individual Property), (a) one hundred five
percent (105%) of the Allocated Loan Amount of the applicable Individual
Property, which, when taken together with the Allocated Loan Amount of each
Individual Property previously released from the Lien of the Mortgage (or, with
respect to which Individual Property, Lender previously assigned the applicable
Mortgage), is less than or equal to the Tranche I Release Percentage Threshold
Amount, (b) one hundred ten percent (110%) of the Allocated Loan Amount of
the applicable Individual Property, which, when taken together with the
Allocated Loan Amount of each Individual Property previously released from the
Lien of the Mortgage (or, with respect to which Individual Property, Lender
previously assigned the applicable Mortgage), is greater than the Tranche I
Release Percentage Threshold Amount and less than or equal to the Tranche II
Release 

 

17

 

Percentage
Threshold Amount, or (c) one hundred fifteen percent (115%) of the
Allocated Loan Amount of the applicable Individual Property, which, when taken
together with the Allocated Loan Amount of each Individual Property previously
released from the Lien of the Mortgage (or, with respect to which Individual Property,
Lender previously assigned the applicable Mortgage), equals an amount which is
greater than the Tranche II Release Percentage Threshold Amount; provided
that, in each case, the Release Amount shall not be greater than the amount of
the Debt outstanding on the date the applicable Individual Property is released
from the Lien of the Mortgage (or, in lieu of such release, the applicable
Mortgage is assigned) in accordance with the terms of this Agreement and the
other Loan Documents.

 

“Release Date” shall
mean the earlier to occur of (a) the third anniversary of the Closing Date
and (b) the date that is two (2) years from the “startup day” (within
the meaning of Section 860G(a)(9) of the Code) of the REMIC Trust
established in connection with the last Securitization involving any portion of
this Loan.

 

“Release Property”
shall mean any Individual Property (other than a Substituted Property) with
respect to which the Lien of the related Mortgage has been released (or
assigned) by Lender in accordance with the terms of this Agreement.

 

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

 

“Rents” shall mean
all rents, moneys payable as damages or in lieu of rent, revenues, deposits
(including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower, Manager or any of their agents or employees
from any and all sources arising from or attributable to the Property.  Notwithstanding the foregoing, “Rents” shall
exclude all receipts, revenues and other income generated from transportation
operations conducted or performed by Borrower or any of its Affiliates from or
with respect to any one or more Individual Properties.

 

“Required Repair Funds”
shall have the meaning set forth in Section 6.1.1.

 

“Required Repairs”
shall have the meaning set forth in Section 6.1.1.

 

“Reserve Funds” shall
mean, collectively, the Capital Expenditure Funds, the Insurance Funds, the
Required Repair Funds, if any, the Tax Funds and the Borrower Cash Collateral
Funds.

 

“Reserve Guaranty”
shall have the meaning set forth in Section 6.12(a).

 

“Resizing Event”
shall have the meaning set forth in Section 9.1(c).

 

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

 

“Restoration Threshold”
shall mean, with respect to each Individual Property, five percent (5%) of the
Allocated Loan Amount for each such Individual Property.

 

18

 

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

 

“Scheduled Defeasance
Payments” shall mean scheduled payments of interest and principal under the
Note in the case of a Total Defeasance Event and under the Defeased Note in the
case of a Partial Defeasance Event for all Monthly Payment Dates occurring
after the Defeasance Date and up to and including the Monthly Payment Date
referred to in clause (i) of the definition of Partial Defeasance
Collateral or Total Defeasance Collateral, as applicable (including, in the
case of a total defeasance, the outstanding principal balance on the Note as of
such Monthly Payment Date and, in the case of a partial defeasance, the
outstanding principal balance on the Defeased Note as of such Monthly Payment
Date).

 

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

 

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

 

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

 

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

 

“Security Agreement”
shall mean that certain Security Agreement, dated as of the date hereof, made
by Borrower in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

“Service Contract”
shall have the meaning set forth in Section 5.3.2(i).

 

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

 

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

 

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

 

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

 

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

 

“State” shall mean,
with respect to any Individual Property, the State or Commonwealth in which
such Individual Property or any part thereof is located.

 

“Substitute Allocated
Loan Amount” shall have the meaning set forth in Section 11.29.

 

“Substitute Property”
and “Substitute Properties” shall have the respective meanings set forth
in Section 11.29.

 

“Substituted Property”
shall have the meaning set forth in Section 11.29.

 

19

 

“Successor Borrower”
shall have the meaning set forth in Section 2.5.4.

 

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

 

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

 

“Taxes” shall mean
all real estate and personal property taxes, assessments, water rates or sewer
rents, now or hereafter levied or assessed or imposed against any Individual
Property or part thereof, together with all interest and penalties thereon.

 

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

 

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

 

“Total Defeasance
Collateral” shall mean U.S. Obligations, which provide payments (i) on
or prior to, but as close as possible to, the Business Day immediately
preceding all Monthly Payment Dates under the Note after the Defeasance Date
and up to and including the Monthly Payment Date which Borrower shall specify
occurring concurrently with or after the Permitted Prepayment Date, and (ii) in
amounts equal to or greater than the Scheduled Defeasance Payments relating to
such Monthly Payment Dates.

 

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

 

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

 

“Tranche I Release
Percentage Threshold Amount” shall mean the product of the original
principal amount of the Loan and twelve and one-half percent (12.5%).

 

“Tranche II Release Percentage
Threshold Amount” shall mean the product of the original principal amount
of the Loan and twenty-five percent (25%).

 

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

 

“Transferee” shall
mean a Person to whom a Transfer is being effected.

 

“Treasury Rate” shall
mean, as of the Business Day immediately prior to the Prepayment Date, the
yield, calculated by Lender by linear interpolation (rounded to the nearest
one-thousandth of one percent (i.e., 0.001%) of the yields of
non-inflation adjusted noncallable United States Treasury obligations with
terms (one longer and one shorter) most nearly approximating the period from
such date of determination to the Permitted Prepayment Date, as 

 

20

 

determined
by Lender on the basis of Federal Reserve Statistical Release H.15-Selected
Interest Rates under the heading U.S. Governmental Security/Treasury Constant
Maturities, or another recognized source of financial market information
selected by Lender.  Lender’s
determination of the Treasury Rate shall be final absent manifest error.

 

“TRIA” shall mean the
Terrorism Risk Insurance Act of 2002, as heretofore amended and as the same may
be further amended or otherwise modified; provided that it provides
substantially the same benefits to insurance companies and insureds as are
provided by TRIA as in effect on the Closing Date.

 

“Trigger Amount”
shall mean, as of any date, an amount equal to the aggregate of the Allocated
Trigger Amounts of all the Individual Properties less the Allocated Trigger
Amount of each Individual Property previously released from the lien of the
Mortgage (or, in lieu of such release, which Mortgage was assigned by Lender)
pursuant to Section 2.4 or Section 2.5.

 

“Trigger Event” shall
mean, on the relevant date, the fact that the annual Underwritable Cash Flow
for the Property determined by Lender as of the end of each fiscal quarter
(based on Borrower’s Fiscal Year) on a trailing four (4) quarter basis is
less than the Trigger Amount.

 

“Trigger Period”
shall mean a period commencing on the first (1st) Business Day after a Trigger Event has occurred to
the first (1st) Business Day
after the related Trigger Event has not existed for a period of two (2) consecutive
fiscal quarters.

 

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

 

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

 

“Underwritable Cash Flow”
shall mean the excess of Gross Revenue over Operating Expenses.

 

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

 

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

 

“U.S. Obligations”
shall mean (i) direct full faith and credit obligations of the United
States of America and (ii) other “government securities” within the
meaning of section 1.860G-2(a)(8)(i) of the Treasury Regulations that are
acceptable to the Rating Agencies and in each case that are not subject to
prepayment, call or early redemption.

 

“VNO” shall mean
Vornado Realty Trust, a Maryland real estate investment trust, and its
permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of VNO, subject to any terms, covenants and/or
conditions of this Agreement.

 

21

 

“VRLP” shall mean
Vornado Realty L.P., a Delaware limited partnership, and its permitted
successors by merger, consolidation or transfer of all or substantially all of
the assets of VRLP, subject to any terms, covenants and/or conditions of this
Agreement.

 

“Warehouse Agreements”
shall mean warehousing agreements, logistics and services agreements,
distribution agreements, handling agreements and other similar agreements in
connection with the use of one or more Individual Properties as a dry and/or
cold storage warehousing facility and for such other uses as may be necessary
or incidental to such use (including, without limitation, the provision of
distribution services), in each case, to the extent (but only to the extent)
the same are for goods stored or services rendered at an Individual Property
(excluding transportation services), together with any and all amendments and
modifications to such agreements.

 

“YAA” shall mean
Yucaipa American Alliance Fund I, LP, a Delaware limited partnership, and its
permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of YAA, subject to any terms, covenants and/or
conditions of this Agreement.

 

“YAP” shall mean
Yucaipa American Alliance (Parallel) Fund I, LP, a Delaware limited
partnership, and its permitted successors by merger, consolidation or transfer
of all or substantially all of the assets of YAP, subject to any terms,
covenants and/or conditions of this Agreement.

 

“YCI” shall mean
Yucaipa Corporate Initiatives Fund I, LP, a Delaware limited partnership, and
its permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of YCI, subject to any terms, covenants and/or
conditions of this Agreement.

 

“Yield Maintenance
Premium” shall mean an amount equal to the greater of:  (a) one percent (1%) of the principal
amount of the Loan being prepaid or (b) the present value as of the
Prepayment Date of the Calculated Payments from the Prepayment Date through the
Permitted Prepayment Date determined by discounting such payments at the
Discount Rate.  As used in this
definition, the term “Calculated Payments” shall mean the monthly
payments of interest only which would be due based on the principal amount of
the Loan being prepaid on the Prepayment Date and assuming an interest rate per
annum equal to the difference (if such difference is greater than zero) between
(i) the Applicable Interest Rate and (ii) the Yield Maintenance
Treasury Rate.  As used in this
definition, the term “Discount Rate” shall mean the rate which, when
compounded monthly, is equivalent to the Yield Maintenance Treasury Rate, when
compounded semi-annually.  As used in
this definition, the term “Yield Maintenance Treasury Rate” shall mean
the yield calculated by Lender by the linear interpolation of the yields, as
reported in the Federal Reserve Statistical Release H.15-Selected Interest
Rates under the heading U.S. Government Securities/Treasury Constant Maturities
for the week ending prior to the Prepayment Date, of U.S. Treasury Constant
Maturities with maturity dates (one longer or one shorter) most nearly
approximating the Permitted Prepayment Date. 
In the event Release H.15 is no longer published, Lender shall select a
comparable publication to determine the Yield Maintenance Treasury Rate.  In no event, however, shall Lender be
required to reinvest any prepayment proceeds in U.S. Treasury obligations or
otherwise.

 

22

 

Section 1.2            Principles of Construction. 
All references to sections and schedules are to sections and schedules
in or to this Agreement unless otherwise specified.  Unless otherwise specified, the words “hereof,”
“herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  Unless
otherwise specified, all meanings attributed to defined terms herein shall be
equally applicable to both the singular and plural forms of the terms so
defined.

 

II.            THE LOAN

 

Section 2.1            The Loan.

 

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

 

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

 

2.1.3            The Note. 
The Loan shall be evidenced by the Note and shall be repaid in
accordance with the terms of this Agreement and the Note.

 

2.1.4            Use of Proceeds. 
Borrower shall use proceeds of the Loan to (i) pay and discharge
any existing loans relating to the Property, (ii) pay all past due Basic
Carrying Costs, if any, in respect of the Property, (iii) deposit the
Reserve Funds (to the extent required hereunder and not previously deposited), (iv) pay
costs and expenses incurred in connection with the closing of the Loan, (v) fund
any working capital requirements of the Property, (vi) distribute to its
parent entities and (vii) retain and/or distribute the balance, if any.

 

Section 2.2            Interest Rate.

 

2.2.1            Applicable Interest Rate. 
Except as herein provided with respect to interest accruing at the
Default Rate, interest on the principal balance of the Loan outstanding from
time to time shall accrue from the Closing Date up to, but excluding, the
Maturity Date at the Applicable Interest Rate.

 

2.2.2            Interest Calculation. 
Interest on the outstanding principal balance of the Loan shall be
calculated by multiplying (a) the actual number of days elapsed in the
period for which the calculation is being made by (b) a daily rate based
on a three hundred sixty (360) day year (that is, the Applicable Interest Rate
or the Default Rate, as then applicable, expressed as an annual rate divided by
360) by (c) the outstanding principal balance.  The accrual period for calculating interest
due on each Monthly Payment Date shall be the calendar month immediately prior
to such Monthly Payment Date. 
Notwithstanding the foregoing, prior to a Securitization of the Loan,
Lender shall have the right to adjust the interest accrual period; provided
that, after giving effect to such adjustment, Borrower shall not be obligated
hereunder or under any other Loan Document to pay interest on any prepaid or
repaid principal of the Loan for any period from and after the Monthly Payment
Date concurrent with or subsequent to such 

 

23

 

prepayment or
repayment.  If requested by Lender,
Borrower shall promptly execute an amendment to this Agreement and any other
Loan Documents to evidence such change.

 

2.2.3            Intentionally Omitted.

 

2.2.4            Usury Savings. 
This Agreement and the other Loan Documents are subject to the express
condition that at no time shall Borrower be required to pay interest on the
principal balance of the Loan at a rate which could subject Lender to either
civil or criminal liability as a result of being in excess of the Maximum Legal
Rate.  If by the terms of this Agreement
or the other Loan Documents, Borrower is at any time required or obligated to
pay interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Applicable Interest Rate or the Default Rate, as the
case may be, shall be deemed to be immediately reduced to the Maximum Legal
Rate and all previous payments in excess of the Maximum Legal Rate shall be
deemed to have been payments in reduction of principal and not on account of
the interest due hereunder.  All sums
paid or agreed to be paid to Lender for the use, forbearance, or detention of
the sums due under the Loan, shall, to the extent permitted by applicable law,
be amortized, prorated, allocated, and spread throughout the full stated term
of the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the Maximum Legal Rate from time to time in
effect and applicable to the Loan for so long as the Loan is outstanding.

 

Section 2.3            Loan Payments.

 

2.3.1            Payment Before Maturity Date. 
Borrower shall make a payment to Lender of interest only on the Closing
Date for the period from the Closing Date through the last day of the month in
which the Closing Date occurs.  Borrower
shall make a payment to Lender of interest only in the amount of the Monthly
Debt Service Payment Amount on the Monthly Payment Date occurring in February 2007
and on each Monthly Payment Date thereafter to and including the Maturity
Date.  Each payment shall be applied
first to accrued and unpaid interest and the balance to principal.

 

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

 

2.3.3            Interest Rate and Payment after
Default.  In the event that, and for so long as, any
Event of Default shall have occurred and be continuing, the outstanding
principal balance of the Loan shall accrue interest at the Default Rate,
calculated from the date the Event of Default occurred.  If all or any part of the principal amount of
the Loan is prepaid upon acceleration of the Loan following the occurrence of
an Event of Default, Borrower shall be required to pay Lender, in addition to
all other amounts then payable hereunder (including, without limitation, (i) in
the event that such prepayment is received on a Monthly Payment Date, interest
which has accrued on such amount through such Monthly Payment Date, or (ii) in
the event that such prepayment is received on a date other than a Monthly
Payment Date, interest which would have accrued on such amount through the last
day of the month in which such prepayment occurs).

 

24

 

2.3.4            Late Payment Charge. 
If any principal, interest or any other sum due under the Loan
Documents, other than the payment of principal due on the Maturity Date, is not
paid by Borrower on the date on which it is due such that the same would
constitute an Event of Default hereunder, Borrower shall pay to Lender upon
demand an amount equal to the lesser of five percent (5%) of such unpaid sum or
the maximum amount permitted by applicable law in order to defray the expense
incurred by Lender in handling and processing such delinquent payment and to
compensate Lender for the loss of the use of such delinquent payment.  Any such amount shall be secured by the
Mortgage and the other Loan Documents.

 

2.3.5            Method and Place of Payment.  (a) Except
as otherwise specifically provided herein, all payments and prepayments under
this Agreement and the Note shall be made to Lender not later than 1:00 P.M.,
New York City time, on the date when due and shall be made in lawful money of
the United States of America in immediately available funds at Lender’s office,
and any funds received by Lender after such time shall, for all purposes
hereof, be deemed to have been paid on the next succeeding Business Day.  Notwithstanding the foregoing, amounts due
for the payment of Debt Service under the Loan Documents shall be deemed paid
so long as there are sufficient sums on deposit in the Deposit Account (as defined
in the Cash Management Agreement) for payment of such amounts and Lender’s
access to such funds has not been inhibited or prevented in any manner
whatsoever due to circumstances or events which are directly or indirectly
caused by or otherwise relate to any actions or omissions of Borrower or any of
its Affiliates.

 

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

 

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

 

Section 2.4            Prepayments.

 

2.4.1            Voluntary Prepayments.  (a) On
and after the Permitted Prepayment Date, Borrower may, at its option, prepay
the Debt in whole but not in part on any Business Day without payment of any
Yield Maintenance Premium, provided, the following conditions are satisfied:

 

(i)            Borrower
shall provide prior written notice to Lender specifying the date upon which the
prepayment is to be made, which notice shall be delivered to Lender not less
than ten (10) Business Days prior to such Prepayment Date (or such shorter
period of time as may be permitted by Lender in its sole discretion).  Borrower’s notice of prepayment shall create
an obligation of Borrower to prepay the Loan or a portion thereof as set forth
therein, but may be rescinded by a written notice to Lender prior to the
applicable Prepayment Date.  Borrower
agrees to indemnify Lender and to hold Lender harmless from and against any and
all costs and expenses Lender sustains or incurs as a consequence of any such
rescission of a notice of prepayment; and

 

25

 

(ii)           If
such prepayment is made on a day other than a Monthly Payment Date, then in
connection with such prepayment Borrower shall pay to Lender, simultaneously
with such prepayment, all interest on the principal balance of this Note then
being prepaid which would have accrued through the last day of the month in
which such prepayment occurs.  Any
prepayment received by Lender on a date other than a Monthly Payment Date shall
be held by Lender (and the interest shall accrue for the benefit of Borrower)
as collateral security for the Loan and shall be applied to the Debt on the
next Monthly Payment Date.

 

(b)           Upon payment in full of all principal
and interest due on the Loan and all other amounts due and payable under the
Note and the other Loan Documents in accordance with the terms and provisions
of the Loan Documents, upon the written request of Borrower, Lender shall (i) release
the Lien of the Mortgages and all other security interests granted herein and
under the other Loan Documents pursuant to an instrument or other document in
form and substance reasonably satisfactory to Lender or (ii)(A) assign, or
sever into two (2) or more separate loans and assign, the Mortgages and
the other Loan Documents to any Person designated by Borrower, which assignment
and severance documents shall be in recordable form, (B) deliver to or as
directed by Borrower the original executed Note and all originally executed
other notes which may have been consolidated, amended and/or restated in
connection with the execution of the Note or, with respect to any note where
the original has been lost, destroyed or mutilated, a lost note affidavit for
the benefit of the assignee lender and the title insurance company insuring the
Mortgages, as assigned, in form sufficient to permit such title insurance
company to insure the lien of the Mortgages as assigned to and held by the
assignee without exception for any matter relating to the lost, destroyed or
mutilated note; provided that in no event shall Lender be required to deliver
any indemnity with respect thereto, (C) execute and deliver an allonge
with respect to the Note and any other note(s) described in the clause (B) above,
(D) deliver the original recorded copies of the Mortgages in Lender’s
possession or, at Borrower’s sole cost and expense, certified copies of record,
and (E) execute and deliver such other instruments of conveyance,
assignment, termination, severance and release (including appropriate UCC
statements) in recordable form as may reasonably be requested by Borrower to
evidence such assignment and/or severance, provided, in each case, without
covenant, recourse, representation (other than representations that such
assignment has been duly authorized and that Lender has not otherwise assigned
or encumbered the Mortgages or the other Loan Documents except as expressly
contemplated therein) or warranty by Lender and notwithstanding anything to the
contrary contained herein, pursuant to instruments or other documents in form
and substance reasonably satisfactory to Lender.  Concurrently with the payment to Lender of all
principal and interest on, and all other amounts due and payable under the Note
and the other Loan Documents, and whether or not Borrower shall request a
release or an assignment as set forth in this Section 2.4.1(b),
Lender shall deliver to Borrower (1) a payoff letter in customary form, (2) all
original insurance policies relating to the Property held by or on behalf of
Lender, (3) any amounts held in escrow or in any reserve account pursuant
to the Loan Documents or otherwise, (4) any other collateral that may have
been delivered to Lender in connection with the Loan, and (5) a
termination (subject to customary “clawback” provisions) of any guaranties
delivered to Lender in connection with the Loan (except to the extent of any
obligations thereunder that are expressly intended to survive pursuant to the
terms thereof), duly executed by Lender, in each case with respect to clause (1) or
(5), in form and substance reasonably satisfactory to Lender.  In connection with any transaction
contemplated by this Section 2.4.1(b), 

 

26

 

Borrower shall submit to
Lender for its review, not less than ten (10) Business Days prior to the
date of any release or assignment of the Mortgages or the payment in full of
the Debt (or such shorter period of time as may be permitted by Lender in its
sole discretion), all instruments and documents to be executed by Lender (other
than a payoff letter under clause (1) above).  All reasonable out-of-pocket costs and
expenses incurred by Lender pursuant to this Section 2.4.1(b) shall
be paid by Borrower (other than any costs and expenses incurred by Lender in
connection with the preparation and delivery of a lost note affidavit in
accordance with clause (ii)(B) above or a payoff letter as contemplated by
clause (1) above and provided that in no event shall Borrower be required
to pay any fee or premium in connection herewith).

 

(c)           Following either the occurrence and
during the continuance of (x) a Default (other than a monetary Default)
for which Lender has given written notice to Borrower or (y) an Event of
Default which, in either case, cannot be cured despite Borrower’s commercially
reasonable efforts (but which Default or Event of Default would be cured or
eliminated by the release of any Individual Property (or, in lieu of such
release, an assignment of the Mortgage encumbering such Individual Property)),
Borrower shall have the right, prior to the Release Date, to prepay a portion
of the Debt and obtain the release of such Individual Property from the Lien of
the applicable Mortgage (or, in lieu of such release, obtain an assignment of
the Mortgage encumbering such Individual Property), provided the following
conditions are satisfied:

 

(i)            Borrower
shall provide prior written notice to Lender specifying the date upon which the
prepayment is to be made, which notice shall be delivered to Lender not less
than ten (10) Business Days prior to such Prepayment Date (or such shorter
period of time as may be permitted by Lender in its sole discretion).  Borrower’s notice of prepayment shall create
an obligation of Borrower to prepay the Loan or a portion thereof as set forth
therein, but may be rescinded by a written notice to Lender prior to the
applicable Prepayment Date.  Borrower
agrees to indemnify Lender and to hold Lender harmless from and against any and
all costs and expenses Lender sustains or incurs as a consequence of any such
rescission of a notice of prepayment;

 

(ii)           If
such prepayment is made on a day other than a Monthly Payment Date, then in
connection with such prepayment Borrower shall pay to Lender, simultaneously
with such prepayment, all interest on the principal balance of the Note then
being prepaid which would have accrued through the last day of the month in
which such prepayment occurs.  Any
prepayment received by Lender on a date other than a Monthly Payment Date shall
be held by Lender (and the interest shall accrue for the benefit of and shall
be payable to Borrower) as collateral security for the Loan and shall be
applied to the Debt on the next Monthly Payment Date;

 

(iii)          The
portion of the Loan to be prepaid, when taken together with all amounts
previously prepaid under this Section 2.4.1(c), equals an amount
which is less than or equal to $52,500,000;

 

(iv)          In
connection with the release of any Individual Property (or the assignment of
the Mortgage encumbering such Individual Property), Lender shall have received (A) payment
of the applicable Release Amount, (B) payment of the Yield 

 

27

 

Maintenance Premium with respect to the portion of the Loan to be
prepaid and (C) payment of any other amounts then due and owing to Lender
pursuant to this Agreement and the other Loan Documents;

 

(v)           Immediately
after giving effect to such prepayment and the release of the applicable
Individual Property from the Lien of the related Mortgage (or, in lieu of such
release, the assignment of the Mortgage encumbering such Individual Property),
no Default or Event of Default shall have occurred and be continuing (excluding
any Default or Event of Default arising from the released Individual Property);

 

(vi)          In
connection with the release of an Individual Property pursuant to this Section 2.4.1(c),
Borrower shall submit to Lender for its review, not less than ten (10) Business
Days prior to the date of such release (or such shorter period of time as may
be permitted by Lender in its sole discretion), a partial release of the
applicable Mortgage and the related Loan Documents to be executed by Lender.  Such release shall be in a form appropriate
for the jurisdiction in which such Individual Property is located and otherwise
reasonably acceptable to Lender;

 

(vii)         In
lieu of a release of an Individual Property in accordance with clause (vi),
upon Borrower’s written request not less than ten (10) Business Days prior
to the date of the proposed assignment (or such shorter period of time as may
be permitted by Lender in its sole discretion), Lender shall (A) sever the
Note and assign or endorse over a severed note in the amount equal to the
Release Amount for such Individual Property and assign the applicable Mortgage
to any Person designated by Borrower, which assignment and severance documents
shall be in recordable form, (B) deliver to or as directed by Borrower the
original executed severed note, (C) deliver the original recorded copy of
the applicable Mortgage in Lender’s possession or, at Borrower’s sole cost and
expense, a certified copy of record, and (D) execute and deliver such
other instruments of conveyance, assignment, termination, severance and release
(including appropriate UCC statements) in recordable form as may reasonably be
requested by Borrower to evidence such assignment and/or severance, provided,
in each case, without covenant, recourse, representation (other than representations
that such assignment has been duly authorized and that Lender has not otherwise
assigned or encumbered the applicable Mortgage except as expressly contemplated
therein) or warranty by Lender and notwithstanding anything to the contrary
contained herein, pursuant to instruments or other documents in form and
substance reasonably satisfactory to Lender. 
Borrower shall provide all other documentation Lender reasonably
requires to be delivered by Borrower in connection with such severance and assignment
(including, without limitation, a severed note in the amount equal to the
principal balance of the Loan after giving effect to such assignment), together
with an Officer’s Certificate certifying that such severance and assignment
will not impair or otherwise adversely affect the Liens, security interests and
other rights of Lender under the Loan Documents not being assigned (or as to
the parties to the Loan Documents and the Individual Properties subject to the
Loan Documents not being assigned).  In
connection with any transaction contemplated by this Section 2.4.1(c)(vii),
Borrower shall submit to Lender for its review, not less than ten (10) Business
Days prior to the date of any assignment of a Mortgage (or such shorter period
of time as may be 

 

28

 

permitted by Lender in its sole discretion), all instruments and
documents to be executed by Lender;

 

(viii)        Simultaneously
with the release (or assignment), (A) Borrower shall convey its title to
the applicable Individual Property to a Person other than Borrower and (B) Borrower
and Manager shall execute an amendment to the Management Agreement effective as
of such release (or assignment) deleting the applicable Individual Property
from the list of properties managed thereunder;

 

(ix)           Borrower
shall deliver an Officer’s Certificate certifying that the requirements set
forth in this Section 2.4.1(c) have been satisfied; and

 

(x)            All
reasonable out-of-pocket costs and expenses incurred by Lender pursuant to this
Section 2.4.1(c) shall be paid by Borrower.

 

2.4.2            Mandatory Prepayments.  (a) On
each date on which Lender actually receives a distribution of Net Proceeds, and
if Lender exercises its right provided for herein not to make such Net Proceeds
available to Borrower for a Restoration, one hundred percent (100%) of such Net
Proceeds shall be applied to the outstanding principal balance of the Loan,
together with interest accruing on such amount calculated through the next
Monthly Payment Date.  Any prepayment
received by Lender pursuant to this Section 2.4.2 on a date other
than a Monthly Payment Date shall be held by Lender as collateral security for
the Loan in an interest bearing account, with such interest accruing to the
benefit of and payable to Borrower, and shall be applied by Lender on the next
Monthly Payment Date.  The Allocated Loan
Amount of an applicable Individual Property shall be reduced by an amount equal
to such prepayment of principal upon such application of Net Proceeds pursuant
to this Section 2.4.2. 
Notwithstanding the foregoing and anything else herein to the contrary,
if in connection with any Casualty or Condemnation at any Individual Property
Lender exercises its right provided for herein not to make the Net Proceeds
available to Borrower for a Restoration, then at Borrower’s option, Lender
shall release the applicable Individual Property from the lien of the Mortgage
and related Loan Documents (or, in lieu of such release, the assignment of the
related Mortgage by Lender on substantially the same terms as are provided in Section 2.4.1(c)),
provided that (i) Borrower shall pay Lender an amount which, when
added to the amount of Net Proceeds received in connection with such Casualty
or Condemnation, equals the Allocated Loan Amount of the Individual Property
for which the Net Proceeds were obtained together with interest on such amount
calculated for the same periods as Net Proceeds in the first sentence of this Section 2.4.2,
(ii) no Event of Default shall have occurred and be continuing (except for
any Event of Default which would be cured or eliminated by the release or
assignment of the Individual Property, (iii) Borrower shall provide to
Lender a release of the Mortgage as it relates to such Individual Property and
related Loan Documents in a form appropriate for the jurisdiction in which the
applicable Individual Property is located and reasonably satisfactory to Lender
for execution by Lender and (iv) simultaneously with the release, Borrower
shall convey fee simple title to the Release Property to a Person other than
Borrower.

 

(b)           Any prepayment of the Loan pursuant
to this Section 2.4.2 shall be without premium (including Yield
Maintenance Premium) or penalty of any kind.

 

29

 

2.4.3            Prepayments After Default. 
Subject to the terms set forth in Section 2.4.1(c), if,
after an Event of Default, payment of all or any part of the principal of the
Loan is tendered by Borrower, a purchaser at foreclosure or any other Person,
such tender shall be deemed an attempt to circumvent the prohibition against
prepayment set forth in Section 2.4.1 and Borrower, such purchaser
at foreclosure or other Person shall pay, in addition to the outstanding
principal balance, all accrued and unpaid interest and other amounts payable
under the Loan Documents, an amount equal to the applicable Yield Maintenance
Premium, if any.

 

Section 2.5            Defeasance.

 

2.5.1            Total Defeasance.  (a) Provided
no Event of Default shall have occurred and remain uncured, Borrower shall have
the right at any time after the Release Date and prior to the Permitted
Prepayment Date to voluntarily defease the entire Loan and obtain a release of
the lien of the Mortgage by providing Lender with the Total Defeasance
Collateral (hereinafter, a “Total Defeasance Event”), subject to the
satisfaction of the following conditions precedent:

 

(i)            Borrower
shall provide Lender not less than fifteen (15) Business Days’ notice (or such
shorter period of time as may be permitted by Lender in its sole discretion)
specifying a date (the “Total Defeasance Date”) on which the Total
Defeasance Event is to occur.  Borrower’s
notice of defeasance shall create an obligation of Borrower to defease the
entire Loan as set forth therein, but may be rescinded by a written notice to
Lender prior to the applicable Total Defeasance Date.  Borrower agrees to indemnify Lender and to
hold Lender harmless from and against any and all costs and expenses Lender
sustains or incurs as a consequence of any such rescission of a notice of
defeasance;

 

(ii)           Borrower
shall pay to Lender (A) all payments of principal and interest due on the
Loan to and including the Total Defeasance Date and (B) all other sums,
then due under the Note, this Agreement, the Mortgage and the other Loan
Documents;

 

(iii)          Borrower
shall deposit the Total Defeasance Collateral into the Defeasance Collateral
Account and otherwise comply with the provisions of Sections 2.5.3
and 2.5.4 hereof;

 

(iv)          Borrower
shall execute and deliver to Lender a Defeasance Security Agreement in respect
of the Defeasance Collateral Account and the Total Defeasance Collateral;

 

(v)           Borrower
shall deliver to Lender an opinion of counsel for Borrower that is standard in
commercial lending transactions and subject only to customary qualifications,
assumptions and exceptions opining, among other things, (A) that Lender
has a legal and valid perfected first priority security interest in the
Defeasance Collateral Account and the Total Defeasance Collateral, (B) that,
if a Securitization has occurred, the REMIC Trust formed pursuant to such
Securitization will not fail to maintain its status as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code as a
result of a Total Defeasance Event pursuant to this Section 2.5  

 

30

 

(assuming a “startup day” (within the meaning of Section 860G(a)(9) of
the Code) that is the earlier of the actual start-up date and the date
specified in clause (a) of the definition of “Release Date” contained
herein), and (C) a non-consolidation opinion with respect to the Successor
Borrower;

 

(vi)          If
a Securitization has occurred, Borrower shall deliver to Lender a Rating Agency
Confirmation as to the Total Defeasance Event;

 

(vii)         Borrower
shall deliver an Officer’s Certificate certifying that the requirements set
forth in this Section 2.5 have been satisfied;

 

(viii)        Borrower
shall deliver a certificate of a “big four” or other nationally recognized
public accounting firm acceptable to Lender certifying that the Total
Defeasance Collateral will generate monthly amounts equal to or greater than
the Scheduled Defeasance Payments;

 

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

 

(x)            Borrower
shall pay all reasonable out-of-pocket costs and expenses of Lender incurred in
connection with the Total Defeasance Event, including Lender’s reasonable
attorneys’ fees and expenses and Rating Agencies’ fees and expenses.

 

(b)           If Borrower has elected to defease
the entire Note and the requirements of this Section 2.5 have been
satisfied, the Property shall be released from the lien of the Mortgage and the
Total Defeasance Collateral pledged pursuant to the Defeasance Security
Agreement shall be the sole source of collateral securing the Note.  In connection with the release of the Lien,
Borrower shall submit to Lender for its review, not less than fifteen (15) days
prior to the Defeasance Date (or such shorter period of time as may be
permitted by Lender in its sole discretion), a release of Lien (and related
Loan Documents) to be executed by Lender. 
Such release shall be in a form appropriate in the applicable
jurisdiction(s) in which the Property is located and that contains
standard provisions protecting the rights of the releasing lender.  In addition, Borrower shall provide all other
documentation that a reasonably prudent lender originating commercial loans for
securitization similar to the Loan would require to be delivered by Borrower in
connection with such release, together with an Officer’s Certificate certifying
that such documentation (i) is in compliance with all Legal Requirements,
and (ii) will effect such release in accordance with the terms of this
Agreement.  Borrower shall pay all costs,
taxes and expenses associated with the release of the lien of the Mortgage,
including Lender’s reasonable attorneys’ fees. 
Except as set forth in Section 2.4 or this Section 2.5,
no repayment, prepayment or defeasance of all or any portion of the Note shall
cause, give rise to a right to require, or otherwise result in, the release of
the lien of the Mortgage on the Property.

 

(c)           If Borrower has elected to defease
the entire Note and the requirements of this Section 2.5 have been
satisfied, in lieu of the release of the Property in accordance with Section 2.5.1(b),
upon Borrower’s written request not less than fifteen (15) days prior to the
date of the proposed assignment (or such shorter period of time as may be
permitted by Lender in its sole discretion), Lender shall (i) assign, or
sever into two (2) or more separate loans and assign, 

 

31

 

the Mortgages and the
other Loan Documents to any Person designated by Borrower, which assignment and
severance documents shall be in recordable form, (ii) deliver to or as
directed by Borrower the original executed Note and all originally executed
other notes which may have been consolidated, amended and/or restated in
connection with the execution of the Note or, with respect to any note where
the original has been lost, destroyed or mutilated, a lost note affidavit for
the benefit of the assignee lender and the title insurance company insuring the
Mortgages, as assigned, in form sufficient to permit such title insurance
company to insure the lien of the Mortgages as assigned to and held by the
assignee without exception for any matter relating to the lost, destroyed or
mutilated note; provided that in no event shall Lender be required to deliver
any indemnity with respect thereto, (iii) execute and deliver an allonge
with respect to the Note and any other note(s) described in the clause (ii) above,
(iv) deliver the original recorded copies of the Mortgages in Lender’s
possession or, at Borrower’s sole cost and expense, certified copies of record,
and (v) execute and deliver such other instruments of conveyance,
assignment, termination, severance and release (including appropriate UCC
statements) in recordable form as may reasonably be requested by Borrower to
evidence such assignment and/or severance, provided, in each case, without
covenant, recourse, representation (other than representations that such
assignment has been duly authorized and that Lender has not otherwise assigned
or encumbered the Mortgages or the other Loan Documents except as expressly
contemplated therein) or warranty by Lender and notwithstanding anything to the
contrary contained herein, pursuant to instruments or other documents in form
and substance reasonably satisfactory to Lender. Concurrently with the delivery
of the Total Defeasance Collateral to Lender, and whether or not Borrower shall
request a release or an assignment as set forth in this Section 2.5.1,
Lender shall deliver to Borrower (1) a payoff letter in customary form, (2) all
original insurance policies relating to the Property held by or on behalf of
Lender, (3) any amounts held in escrow or in any reserve account pursuant
to the Loan Documents or otherwise, (4) any other collateral that may have
been delivered to Lender in connection with the Loan, and (5) a
termination (subject to customary “clawback” provisions) of any guaranties
delivered to Lender in connection with the Loan (except to the extent of any
obligations thereunder that are expressly intended to survive pursuant to the
terms thereof), duly executed by Lender, in each case with respect to clause (1) or
(5), in form and substance reasonably satisfactory to Lender. In connection
with any transaction contemplated by this Section 2.5.1(c), Borrower
shall submit to Lender for its review, not less than fifteen (15) days prior to
the Defeasance Date (or such shorter period of time as may be permitted by
Lender in its sole discretion), all instruments and documents to be executed by
Lender (other than a payoff letter under clause (1) above).  All reasonable out-of-pocket costs and
expenses incurred by Lender pursuant to this Section 2.5.1(c) shall
be paid by Borrower (other than any costs and expenses incurred by Lender in
connection with the preparation and delivery of a lost note affidavit in
accordance with clause (ii) above or a payoff letter as contemplated by
clause (1) above and provided that in no event shall Borrower be required
to pay any fee or premium to the Lender or the Servicer in connection
herewith).

 

2.5.2            Partial Defeasance.  (a) Provided
no Event of Default shall have occurred and remain uncured, Borrower shall have
the right at any time after the Release Date and prior to Permitted Prepayment
Date to voluntarily defease a portion of the Loan and obtain a release of the
lien of the Mortgage as to any Individual Property by providing Lender with the
Partial Defeasance Collateral (hereinafter, a “Partial Defeasance Event”)
upon satisfaction of the following conditions precedent:

 

32

 

(i)            Borrower
shall provide Lender not less than fifteen (15) Business Days notice (or such
shorter period of time as may be permitted by Lender in its sole discretion)
specifying a date (the “Partial Defeasance Date”) on which the Partial
Defeasance is to occur.  Borrower’s
notice of defeasance shall create an obligation of Borrower to defease a
portion of the Loan as set forth therein, but may be rescinded by a written
notice to Lender prior to the applicable Partial Defeasance Date.  Borrower agrees to indemnify Lender and to
hold Lender harmless from and against any and all costs and expenses Lender
sustains or incurs as a consequence of any such rescission of a notice of
defeasance;

 

(ii)           Borrower
shall pay to Lender (A) all payments of principal and interest due on the
Loan to and including the Partial Defeasance Date and (B) all other sums
then due under the Note, this Agreement, the Mortgage and the other Loan
Documents;

 

(iii)          Borrower
shall deposit the Partial Defeasance Collateral into the Defeasance Collateral
Account and otherwise comply with the provisions of Sections 2.5.3
and 2.5.4 hereof,

 

(iv)          Borrower
shall prepare all necessary documents to modify this Agreement and to amend and
restate the Note and issue four substitute notes, two notes having an aggregate
principal balance equal to Release Amount for the subject Individual Property
(collectively, the “Defeased Note”), and the other two notes having an
aggregate principal balance equal to the excess of (A) the original
principal amount of the Loan, over (B) the amount of the Defeased Note
(collectively, the “Undefeased Note”). 
The Defeased Note and Undefeased Note shall have identical terms as the
Note except for the principal balance. 
The Defeased Note and the Undefeased Note shall not be cross defaulted
or cross collateralized unless the Rating Agencies shall require
otherwise.  A Defeased Note may not be
the subject of any further defeasance (but may be prepaid on the same terms as
the Note);

 

(v)           Borrower
shall execute and deliver to Lender a Defeasance Security Agreement in respect
of the Defeasance Collateral Account and the Partial Defeasance Collateral;

 

(vi)          Borrower
shall deliver to Lender an opinion of counsel for Borrower that is standard in
commercial lending transactions and subject only to customary qualifications,
assumptions and exceptions opining, among other things, (A) that Lender
has a legal and valid perfected first priority security interest in the
Defeasance Collateral Account and the Partial Defeasance Collateral, (B) that,
if a Securitization has occurred, the REMIC Trust formed pursuant to such
Securitization will not fail to maintain its status as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code as a
result of the Partial Defeasance Event pursuant to this Section 2.5.2
(assuming a “startup day” (within the meaning of Section 860G(a)(9) of
the Code) that is the earlier of the actual start-up date and the date
specified in clause (a) of the definition of “Release Date” contained
herein), and (C) a non-consolidation opinion with respect to the Successor
Borrower;

 

33

 

(vii)         Borrower
shall deliver to Lender a Rating Agency Confirmation as to the Partial
Defeasance Event;

 

(viii)        Borrower
shall deliver to Lender a certificate of a “big four” or other nationally
recognized public accounting firm acceptable to Lender certifying that the
Partial Defeasance Collateral will generate monthly amounts equal to or greater
than the Scheduled Defeasance Payments;

 

(ix)           Borrower
shall deliver to Lender an Officer’s Certificate certifying that the
requirements set forth in this Section 2.5.2(a) have been
satisfied;

 

(x)            After
giving effect to the release of any Individual Properties (including the amount
prepaid in Section 2.5.2(a)(ii) above and including any amount
so paid in excess of 100% of the Allocated Loan Amount for any such Release
Properties), the Debt Service Coverage Ratio for the Loan for the Individual
Properties (excluding the Released Property) shall not be less than the greater
of (i) the Debt Service Coverage Ratio as of the Closing Date for the
Property as of the Closing Date and (ii) the Debt Service Coverage Ratio
for the trailing twelve (12) full calendar months as of the date immediately
preceding the release of the Release Properties for the Property as of such
date; provided that, in order to meet the Debt Service Coverage Ratio
Test set forth in this clause (x), Borrower may defease a portion of the Loan
in excess of the Release Amounts of the affected Individual Properties;

 

(xi)           Borrower
shall continue to comply with the terms and provisions of Section 3.1.24;

 

(xii)          Borrower
shall pay all reasonable out-of-pocket costs and expenses of Lender incurred in
connection with the Partial Defeasance Event, including Lender’s reasonable
attorneys’ fees and expenses, the Rating Agencies’ fees and expenses and any
fees assessed by the Servicer in connection with such Partial Defeasance Event.

 

(b)           If 
Borrower has elected to make a partial defeasance and the requirements
of this Section 2.5 have been satisfied, the Individual Property
shall be released from the lien of the Mortgage.  In connection with the release of the Lien,
Borrower shall submit to Lender for its review, not less than fifteen (15) days
prior to the Partial Defeasance Date (or such shorter period of time as may be
permitted by Lender in its sole discretion), a release of Lien (and related
Loan Documents) to be executed by Lender. 
Such release shall be in a form appropriate in the jurisdiction in which
the Property is located and that contains standard provisions protecting the
rights of the releasing lender.  In
addition, Borrower shall provide all other documentation that a reasonably
prudent lender originating commercial loans for securitization similar to the
Loan would reasonably require to be delivered by Borrower in connection with
such release, together with an Officer’s Certificate certifying that such
documentation (i) is in compliance with all Legal Requirements, and (ii) will
effect such release in accordance with the terms of this Agreement.  Borrower shall pay all taxes and all
reasonable costs and expenses associated with the release of the lien of the
Mortgage, including Lender’s reasonable attorneys’ fees.  Borrower shall cause title to the Individual
Property so released from the lien of the Mortgage to be transferred to and
held by a Person other than Borrower. 
Except as set forth in Section 2.4 or 

 

34

 

this Section 2.5,
no repayment, prepayment or defeasance of all or any portion of the Note shall
cause, give rise to a right to require, or otherwise result in, the release of
the lien of the Mortgage from the Property or any part thereof.

 

(c)           If Borrower has elected to make a
partial defeasance and the requirements of this Section 2.5 have
been satisfied, in lieu of the release of the Individual Property in accordance
with Section 2.5.2(b), upon Borrower’s written request not less
than fifteen (15) days prior to the date of the proposed assignment (or such
shorter period of time as may be permitted by Lender in its sole discretion),
Lender shall (i) sever the Note and assign or endorse over a severed note
in the amount equal to the Release Amount for such Individual Property and
assign the applicable Mortgage to any Person designated by Borrower, which
assignment and severance documents shall be in recordable form, (ii) deliver
to or as directed by Borrower the original executed severed note, (iii) deliver
the original recorded copy of the applicable Mortgage in Lender’s possession
or, at Borrower’s sole cost and expense, a certified copy of record, and (iv) execute
and deliver such other instruments of conveyance, assignment, termination,
severance and release (including appropriate UCC statements) in recordable form
as may reasonably be requested by Borrower to evidence such assignment and/or
severance, provided, in each case, without covenant, recourse, representation
(other than representations that such assignment has been duly authorized and
that Lender has not otherwise assigned or encumbered the applicable Mortgage
except as expressly contemplated therein) or warranty by Lender and
notwithstanding anything to the contrary contained herein, pursuant to
instruments or other documents in form and substance reasonably satisfactory to
Lender.  In connection with any
transaction contemplated by this Section 2.5.2(c), Borrower shall
submit to Lender for its review, not less than fifteen (15) days prior to the
date of any assignment of a Mortgage (or such shorter period of time as may be
permitted by Lender in its sole discretion), all instruments and documents to
be executed by Lender.  In addition,
Borrower shall provide all other documentation Lender reasonably requires to be
delivered by Borrower in connection with such severance and assignment
(including, without limitation, a severed note in the amount equal to the
principal balance of the Loan after giving effect to such assignment), together
with an Officer’s Certificate certifying that such severance and assignment
will not impair or otherwise adversely affect the Liens, security interests and
other rights of Lender under the Loan Documents not being assigned (or as to
the parties to the Loan Documents and the Individual Properties subject to the
Loan Documents not being assigned).  All
reasonable out-of-pocket costs and expenses incurred by Lender pursuant to this
Section 2.5.2(c) shall be paid by Borrower; provided
that in no event shall Borrower be required to pay any fee or premium to the
Lender or the Servicer in connection therewith.

 

2.5.3            Defeasance Collateral Account. 
On or before the date on which Borrower delivers the Total Defeasance
Collateral or Partial Defeasance Collateral, Borrower shall open at any
Eligible Institution the defeasance collateral account (the “Defeasance
Collateral Account”) which shall at all times be an Eligible Account.  The Defeasance Collateral Account shall
contain only (a) Total Defeasance Collateral or the applicable Partial
Defeasance Collateral, and (b) cash from interest and principal paid on
the Total Defeasance Collateral or the applicable Partial Defeasance
Collateral.  All cash from interest and
principal payments paid on the Total Defeasance Collateral or Partial
Defeasance Collateral shall be paid over to Lender on each Monthly Payment Date
and applied first to accrued and unpaid interest and then to principal.  Following the payment of all Scheduled
Defeasance Payments, any cash from interest 

 

35

 

and principal paid on the
Total Defeasance Collateral or Partial Defeasance Collateral in excess of the
amounts necessary to pay the Scheduled Defeasance Payments shall be paid to
Borrower or, if there is a Successor Borrower, to Successor Borrower.  Borrower shall cause the Eligible Institution
at which the Total Defeasance Collateral or Partial Defeasance Collateral is
deposited to enter into an agreement with Borrower or Successor Borrower, as
applicable, and Lender, satisfactory to Lender in its reasonable discretion,
pursuant to which such Eligible Institution shall agree to hold and distribute
the Total Defeasance Collateral or Partial Defeasance Collateral in accordance
with this Agreement.  Borrower or
Successor Borrower, as applicable, shall be the owner of the Defeasance
Collateral Account and shall report all income accrued on Total Defeasance
Collateral or Partial Defeasance Collateral for federal, state and local income
tax purposes in its income tax return. 
Borrower shall prepay or cause to be prepaid all costs and expenses
associated with opening and maintaining the Defeasance Collateral Account.  Lender shall not in any way be liable by
reason of any insufficiency in the Defeasance Collateral Account.  At Borrower’s election, different Defeasance
Collateral Accounts may be established for each defeasance consummated pursuant
to Section 2.5.1 or Section 2.5.2.

 

2.5.4            Successor Borrower. 
In connection with a Defeasance Event under this Section 2.5,
Borrower shall, if required by the Rating Agencies or if Borrower elects to do
so, establish or designate a successor entity (the “Successor Borrower”)
which shall be a single purpose bankruptcy remote entity and which shall be
approved by the Rating Agencies.  Any
such Successor Borrower may, at Borrower’s option, be an Affiliate of
Borrower.  Borrower shall transfer and
assign all obligations, rights and duties under and to the Note or the Defeased
Note, as applicable, together with the Total Defeasance Collateral or Partial
Defeasance Collateral, as applicable, to such Successor Borrower.  Such Successor Borrower shall assume the
obligations under the Note or the Defeased Note, as applicable, and the
Defeasance Security Agreement and Borrower shall be relieved of its obligations
under such documents except to the extent of any cross-collateralization
required hereunder.  Borrower shall pay
all reasonable out-of-pocket costs and expenses incurred by Lender, including
Lender’s attorney’s fees and expenses, incurred in connection therewith.

 

III.           REPRESENTATIONS AND
WARRANTIES

 

Section 3.1            Borrower Representations. 
Borrower represents and warrants as of the date hereof, except as
described on Schedule 3.1 attached hereto, that:

 

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

 

(b)           Borrower’s exact legal name is
correctly set forth in the first paragraph of this Agreement.  Borrower is an organization of the type
specified in the first paragraph of this 

 

36

 

Agreement.  Borrower is incorporated or organized under
the laws of the state specified in the first paragraph of this Agreement.  Borrower’s principal place of business and
chief executive office, and the place where Borrower keeps its books and records,
including recorded data of any kind or nature, regardless of the medium of
recording, including software, writings, plans, specifications and schematics,
will be the address of Borrower set forth in the first paragraph of this
Agreement (unless Borrower notifies Lender in writing at least thirty (30) days
prior to the date of such change). 
Propco Borrower’s organizational identification number, if any, assigned
by the state of its incorporation or organization is 4246415.  Propco Borrower’s federal tax identification
number is 20-5881270.  Opco Borrower’s
organizational identification number, if any, assigned by the state of its
incorporation or organization is 4249966. 
Opco Borrower’s federal tax identification number is 20-5881222.  Borrower is not subject to back-up
withholding taxes.

 

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

 

3.1.3            No Conflicts. 
The execution and delivery of this Agreement and the other Loan
Documents by Borrower and the performance of its obligations hereunder and
thereunder will not conflict with any provision of any law or regulation to
which Borrower is subject, or conflict with, result in a breach of, or
constitute a default under, any of the terms, conditions or provisions of any
of Borrower’s organizational documents or any agreement or instrument to which
Borrower is a party or by which it is bound, or any order or decree applicable
to Borrower, or result in the creation or imposition of any lien on any of
Borrower’s assets or property (other than pursuant to the Loan Documents).

 

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

 

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

 

3.1.6            Consents. 
No consent, approval, authorization or order of any court or
Governmental Authority is required for the execution, delivery and performance
by Borrower of, or compliance by Borrower with, this Agreement or the consummation
of the transactions contemplated hereby, other than those which have been
obtained by Borrower.

 

37

 

3.1.7            Title.  (a) Borrower
has good, marketable and insurable fee simple title to the real property
comprising part of each Individual Property and good title to the balance of
each Individual Property owned by it, free and clear of all Liens whatsoever
except the Permitted Encumbrances.  The
Mortgage, when properly recorded in the appropriate records, together with any
Uniform Commercial Code financing statements required to be filed in connection
therewith, will create (i) a valid, first priority, perfected lien on the
Property, subject only to Permitted Encumbrances and (ii) perfected
security interests in and to, and perfected collateral assignments of, all
personalty comprising the Property (including the Leases), all in accordance
with the terms thereof, in each case subject only to any Permitted
Encumbrances.  Except as indicated on the
Title Insurance Policy for each Individual Property if insured over by the
title company issuing the Title Insurance Policy for each Individual Property
or those that are contested in accordance with the terms of this Agreement,
there are no mechanics’, materialman’s or other similar liens or claims which
have been filed for work, labor or materials affecting the Property which are
or may be liens prior to, or equal or coordinate with, the lien of the
Mortgage.  To Borrower’s knowledge, none
of the Permitted Encumbrances, individually or in the aggregate, materially
interfere with the benefits of the security intended to be provided by the
Mortgage and this Loan Agreement, materially and adversely affect the value of
the Property in light of the manner in which the same is currently being used,
impair the use or operations of the Property or impair Borrower’s ability to
pay its obligations in a timely manner.

 

(b)           The Security Agreement, together with
any Uniform Commercial Code financing statements required to be filed in
connection therewith, will create a valid perfected lien and security interest
in, and a perfected collateral assignment of, all personalty of Opco Borrower,
all in accordance with the terms thereof, subject only to any Permitted
Encumbrances.

 

3.1.8            No Plan Assets. 
As of the date hereof and throughout the term of the Loan (a) Borrower
is not and will not be an “employee benefit plan,” as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
whether or not subject to Title I of ERISA, or a “plan” as defined in Section 4975
of the Code, (b) none of the assets of Borrower constitutes or will
constitute “plan assets” of one or more such plans within the meaning of U.S.
Department of Labor Regulation 29 C.F.R. Section 2510.3101 (the “Plan
Assets Regulation”) and (c) transactions by or with Borrower are not
and will not be prohibited transactions under ERISA.

 

3.1.9            Compliance. 
Borrower and each Individual Property and the use thereof comply in all
material respects with all applicable Legal Requirements, including, without
limitation, building and zoning ordinances and codes and Prescribed Laws.  To Borrower’s knowledge, Borrower is not in
default or violation of any order, writ, injunction, decree or demand of any
Governmental Authority, the violation of which would materially adversely
affect the condition (financial or otherwise) or business of Borrower.  To Borrower’s knowledge, Borrower has not
committed any act which may give any Governmental Authority the right to cause
Borrower to forfeit the Property or any part thereof or any monies paid in
performance of Borrower’s obligations under any of the Loan Documents.  With respect to those Individual Properties
listed on Schedule IX, Borrower hereby represents that no certificate of
occupancy is available or required in order for each such Individual Property
to be in compliance with local zoning rules and regulations in the
jurisdiction where each such Individual Property is located.

 

38

 

3.1.10         Financial Information. 
All financial data taken as a whole, including, without limitation, the
statements of cash flow and income and operating expense, that have been
delivered to Lender in respect of the Property (other than financial forecasts)
fairly present in all material respects the financial condition of the Property
as of the date of such reports; the financial forecasts delivered to Lender
were prepared in good faith by Borrower for its own use in the ordinary course
of business.  Borrower does not have any
contingent liabilities other than its liabilities under the Loan Documents,
liabilities for taxes, unusual forward or long-term commitments or unrealized
or anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on the Property or
the operation thereof, except as referred to or reflected in said financial
statements.  Since the date of the
financial statements, there has been no material adverse change in the
financial condition, operations or business of Borrower or the Property from
that set forth in said financial statements.

 

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

 

3.1.12         Utilities and Public Access. 
Each Individual Property has rights of access to public ways and is
served by water, sewer, sanitary sewer and storm drain facilities adequate to
service such Individual Property for its intended uses.  All roads necessary for the current
utilization of the Property for its current purpose have been dedicated to public
use and accepted by all governmental authorities or are the subject of access
easements for the benefit of the Property.

 

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

 

3.1.14         Assessments. 
To Borrower’s knowledge, there are no pending or proposed special or
other assessments for public improvements or otherwise affecting any Individual
Property, nor are there any contemplated improvements to any Individual
Property that may result in such special or other assessments which, in any
such case, would have a material adverse effect on Borrower’s ability to
perform its obligations under the Loan Documents.

 

3.1.15         Enforceability. 
The Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense by Borrower, including the defense of usury, nor would
the operation of any of the terms of the Loan Documents, or the exercise of any
right thereunder, render the Loan Documents unenforceable, and Borrower has not
asserted any right of rescission, set-off, counterclaim or defense with respect
thereto.

 

3.1.16         Assignment of Leases. 
The Assignment of Leases creates a valid assignment of, or a valid
security interest in, certain rights under the Leases, subject only to a
license granted to Borrower to exercise certain rights and to perform certain
obligations of the lessor under the Leases, including the right to operate the
Property.  No Person other than Lender 

 

39

 

or Borrower has any
interest in or assignment of the Leases or any portion of the Rents due and
payable or to become due and payable thereunder.

 

3.1.17         Insurance. 
Borrower has obtained and has delivered to Lender acceptable evidence of
the existence of all of the Policies, with all premiums due and payable prepaid
thereunder, reflecting the insurance coverages, amounts and other requirements
set forth in this Agreement.  No Person,
including Borrower, has done, by act or omission, anything which would impair
the coverage of any of the Policies.

 

3.1.18         Licenses. 
All permits and approvals, including without limitation, certificates of
occupancy required by any Governmental Authority for the use, occupancy and operation
of the Property in the manner in which the Property is currently being used,
occupied and operated have been obtained and are in full force and effect
except for such permits and approvals the absence of which would not result in
a material adverse effect on the financial condition of Borrower or the
Individual Property for which Borrower failed to obtain such permit or
approval.

 

3.1.19         Flood Zone. 
Except as shown on the Survey, none of the Improvements on any
Individual Property are located in an area identified by the Federal Emergency
Management Agency as a special flood hazard area.

 

3.1.20         Physical Condition. 
To Borrower’s knowledge and except as set forth in the applicable
Physical Conditions Report, each Individual Property, including, without
limitation, all buildings, improvements, parking facilities, sidewalks, storm
drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good
condition, order and repair in all material respects; there exists no
structural or other material defects or damages in any Individual Property,
whether latent or otherwise, and Borrower has not received notice from any
insurance company or bonding company of any defects or inadequacies in any
Individual Property, or any part thereof, which would adversely affect the
insurability of the same or cause the imposition of extraordinary premiums or
charges thereon or of any termination or threatened termination of any policy
of insurance or bond.

 

3.1.21         Boundaries. 
Except as shown on the Survey, all of the improvements which were
included in determining the appraised value of the Property lie wholly within the
boundaries and building restriction lines of each Individual Property, and no
improvements on adjoining properties encroach upon any Individual Property, and
no easements or other encumbrances affecting any Individual Property encroach
upon any of the improvements, so as to affect the value or marketability of any
Individual Property except those which are insured against by title insurance.

 

3.1.22         Leases. 
Borrower represents and warrants to Lender with respect to the Leases
that: (a) the “Major Customer List” attached hereto as Schedule I
is true, complete and correct in all material respects, (b) the Leases
identified on Schedule I are in full force and effect and there are no
material defaults thereunder by either party, (c) Borrower has delivered to
Lender copies of all Leases with terms in excess of one (1) year or which
generate revenue in 

 

40

 

excess of Five Hundred
Thousand and No/100 Dollars ($500,000.00) annually, (d) there are no
Leases which contain rights or options of the Tenant thereunder to purchase all
or any part of the Property or require the Borrower to purchase any of the
Improvements other than as set forth on Schedule I, (e) the copies
of the Leases delivered to Lender are true and complete, and there are no oral
agreements with respect thereto, (f) no Rent (including security deposits)
has been paid more than one (1) month in advance of its due date, (g) all
alterations or improvements at each Individual Property to be performed by Borrower
under each Lease has been performed as required and has been accepted by the
applicable Tenant, (h) any payments, free rent, partial rent, rebate of
rent or other payments, credits, allowances or abatements required to be given
by Borrower to any Tenant has already been received by such Tenant and (i) all
security deposits are being held in accordance with Legal Requirements.

 

3.1.23         Filing and Recording Taxes. 
All transfer taxes, deed stamps, intangible taxes or other amounts in
the nature of transfer taxes required to be paid under applicable Legal
Requirements in connection with the transfer of the Property to Borrower have
been paid or are being submitted for payment simultaneously herewith.  All mortgage, mortgage recording, stamp,
intangible or other similar tax required to be paid under applicable Legal
Requirements in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Mortgage, have been paid or are being
submitted for payment simultaneously herewith. 
All taxes and governmental assessments due and owing in respect of the
Property have been paid, or an escrow of funds in an amount sufficient to cover
such payments has been established hereunder or are insured against by the
title insurance policy to be issued in connection with the Mortgage.

 

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

 

(a)           (1) Propco Borrower does not own
and will not own any asset or property other than (i) the Property, and (ii) incidental
personal property necessary for the ownership or operation of the Property and (2) Opco
Borrower does not own and will not own any asset or property other than the
personalty and other assets owned by it necessary for the operation of the
Property.

 

(b)           (1) Propco Borrower will not
engage in any business other than the ownership, management and operation of
the Property and (2) Opco Borrower will not engage in any business other
than the management and operation of the Property, and each Borrower will
conduct and operate its business as presently conducted and operated.

 

(c)           Borrower will not enter into any
contract or agreement with any Affiliate of Borrower, any constituent party of
Borrower or any Affiliate of any constituent party, except upon terms and
conditions that are commercially reasonable (taking into account all facts and
circumstances) and either substantially similar to those that would be
available on an arm’s-length basis with third parties other than any such party
or a capital contribution or distribution.

 

41

 

(d)           Borrower has not incurred and will
not incur any Indebtedness other than (i) the Debt, (ii) unsecured
trade payables and operational debt not evidenced by a note and (iii) Indebtedness
incurred in the financing of equipment and other personal property used on the
Property; provided that any Indebtedness incurred pursuant to subclauses
(ii) and (iii) shall be (x) not in excess of 5% of the
outstanding principal amount of the Loan in the aggregate, (y) paid not
more than sixty (60) days from the date incurred as to the matters in subclause
(ii) above and not more than sixty (60) days from the date due as to the
matters in subclause (iii) above and (z) incurred in the ordinary
course of business.  No Indebtedness
other than the Debt may be secured (subordinate or pari passu)
by the Property other than Indebtedness of the type described in and subject to
the requirements of clause (iii) of this clause (d).

 

(e)           Except as expressly contemplated by
the Loan Documents with respect to the other Borrower, Borrower has not made
and will not make any loans or advances to any third party (including any
Affiliate or constituent party), and shall not acquire obligations or
securities of any of its Affiliates.

 

(f)            Borrower is and will remain solvent
and Borrower will pay all of its debts and liabilities (including, as
applicable, a fairly allocated portion of shared personnel and overhead
expenses) only from its own assets and as the same shall become due.

 

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

 

(h)           Borrower will maintain all of its
books, records, financial statements (it being acknowledged that the agent
under the Cash Management Agency Agreement shall be continuously able to
produce separate balance sheets of the Borrowers) and (except as contemplated
in the Cash Management Agency Agreement) bank accounts separate from those of
its Affiliates and from those of any other Person.  Borrower’s assets will not be listed as
assets on the financial statement of any other Person, provided, however,
that Borrower’s assets maybe, included in a consolidated financial statement of
its Affiliates provided that (i) appropriate notation shall be made
on such consolidated financial statements (and/or in Annual Reports on Form 10-K
filed with U.S. Securities and Exchange Commission in which such financial
statements are contained) to indicate the separateness of Borrower and such
Affiliates and to indicate that Borrower’s assets and credit are not available
to satisfy the debts and other obligations of such Affiliates or any other
Person and (ii) such assets are continuously able to be listed on Borrower’s
own separate balance sheet.  Borrower
will file its own tax returns (to the extent Borrower is required to file tax
returns).  Borrower shall maintain its
books, records, resolutions and agreements as official records.

 

42

 

(i)            Borrower will be, and at all times
will hold itself out to the public as, a legal entity separate and distinct
from any other entity (including any Affiliate of Borrower or any constituent
party of Borrower), shall correct any known misunderstanding regarding its
status as a separate entity, shall conduct business in its own name, shall not
identify itself or any of its Affiliates as a division or part of the other and
shall maintain and utilize separate stationery, invoices and checks bearing its
own name (except with respect to payments or communications made on behalf of
the Borrower by the counterparty to the Cash Management Agency Agreement, in
which event, such counterparty shall nevertheless identify the Borrower as the
party on whose behalf the payment or communication is being made).

 

(j)            Borrower will maintain adequate
capital for the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business operations.

 

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

 

(l)            Except as expressly contemplated by
the Loan Documents and the Cash Management Agency Agreement, Borrower will not
commingle the funds or other assets of Borrower with those of any Affiliate or
constituent party or any other Person, and will hold all of its assets in its
own name.

 

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

 

(n)           Except as expressly contemplated by
the Loan Documents with respect to the other Borrower, Borrower will not
guarantee or become obligated for the debts of any other Person and does not
and will not hold itself out to be responsible for or have its credit available
to satisfy or hold out its credit as being available to satisfy the debts or
obligations of any other Person.

 

(o)           (i) If
Borrower is a limited partnership or a limited liability company, (other than a
single member limited liability company that satisfies all of the requirements
of Section 3.l.24(o)(ii)), each general partner or managing member
(each, an “SPC Party”) of Borrower shall be a corporation or single
member limited liability company that satisfies all of the requirements of Section 3.1.24(o)(ii) whose
sole asset is a direct interest in Borrower of at least 0.5% (or 0.1% if
Borrower is an entity formed under the laws of Delaware) and each such SPC
Party will at all times comply with each of the representations, warranties,
and covenants contained in this Section 3.1.24 as if such
representation, warranty or covenant was made directly by such SPC Party
(substituting the term “SPC Party” for the term “Borrower” throughout) and will
cause Borrower to comply with this Section 3.1.24 (except for subsections
(a), (b), (d), (n) and (x)).  Upon
the withdrawal or the disassociation of an SPC Party from Borrower, Borrower
shall immediately appoint a new SPC Party whose constituent documents are
substantially similar to those of the withdrawing or disassociating SPC Party
and deliver a new non-consolidation opinion to the Rating Agency or Rating
Agencies, as applicable, 

 

43

 

with respect to the new SPC Party and its equity owners.  If Borrower is a limited partnership,
Borrower shall have at least one general partner.  If Borrower is a limited liability company
(other than a single-member limited liability company that satisfies all of the
requirements of Section 3.1.24(o)(ii)), Borrower shall have at
least one (1) managing member.  An
SPC Party shall be organized for the sole purpose of owning a direct interest
in the Borrower, shall own no other interests in any entity, and shall not
incur indebtedness except as it may be liable for the debts of the Borrower in
its capacity as general partner of the Borrower.

 

(ii)           If
Borrower is a single member limited liability company (“single member
limited liability company” meaning a limited liability company having only
one equity member), Borrower shall be a limited liability company organized
under the laws of Delaware and shall have either (A) two (2) non-equity
members or (B) at least two springing members, one of which, upon the
dissolution of such sole member or the withdrawal or the disassociation of the
sole member from Borrower, shall immediately become the sole member of
Borrower, and the other of which shall become the sole member of Borrower if
the first such springing member no longer is available to serve as such sole
member.

 

(p)           Borrower or its SPC Party shall at
all times cause there to be at least two duly appointed Independent Directors,
who are provided by a nationally recognized company that provides professional
independent directors, of each SPC Party and of Borrower if Borrower is a
single member limited liability company. 
As used herein, “Independent Director” shall mean a natural
person serving as a director of a corporation or manager of a limited liability
company who is not at the time of initial appointment, or at any time while
serving, and has not been at any time during the preceding five (5) years:
(a) a stockholder or director (with the exception of serving as the
Independent Director of Borrower or any SPC Party that is an SPC Party or
managing member of Borrower), trustee, officer, employee, partner, member,
attorney or counsel of SPC Party, Borrower or any affiliate of either of them; (b) a
creditor, customer, supplier or other person who derives any of its purchases
or revenues from its activities with SPC Party, Borrower or any affiliate of
either of them; (c) a person or other entity controlling or under common
control with any Person excluded from serving as Independent Director under
subparagraph (a) or (b); or (d) a member of the immediate family of
any Person excluded from serving as Independent Director under subparagraph (a) or
(b).  As used in this definition, the
term “affiliate” means any person controlling, under common control with, or
controlled by the person in question; and the term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of management, policies or activities of a person or entity, whether
through ownership of voting securities, by contract or otherwise.  A natural person who satisfies the foregoing
definition other than subparagraph (b) shall not be disqualified from
serving as an Independent Director if such individual has been provided by a
nationally-recognized company that provides professional independent
directors.  A natural person who otherwise
satisfies the foregoing definition except for being the Independent Director of
a “special purpose entity” affiliated with Borrower or SPC Party shall not be
disqualified from serving as an Independent Director of Borrower or SPC Party
if such “special purpose entity” does not own a direct or indirect equity
interest in Borrower or in any co-borrower of Borrower and if such individual
is an independent director provided by a nationally-recognized company that
provides professional independent directors. 
For purposes of this paragraph, a “special 

 

44

 

purpose entity” is an
entity, whose organizational documents contain restrictions on its activities
substantially similar to those set forth in Section 3.1.24 of this
Agreement.

 

(q)           Borrower shall not cause or permit
the board of directors, trustees or managers of any SPC Party or of Borrower to
take any action which, under the terms of any certificate of incorporation,
bylaws or any voting trust agreement with respect to any common stock or under
any organizational document of Borrower or SPC Party, requires the vote or
consent of such Independent Directors unless at the time of such action there
shall be at least two Independent Directors then serving in such capacity who have
provide the required vote or consent.

 

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

 

(s)           Borrower will not permit any
Affiliate or constituent party independent access to its bank accounts (subject
to the requirements hereof, and except with respect to the agency relationships
contemplated by the Cash Management Agency Agreement and the Cash Management
Agreement).

 

(t)            Borrower will pay the salaries of
its own employees (if any) from its own funds and maintain a sufficient number
of employees in light of its contemplated business operations; provided,
however, that zero employees may be sufficient for such operations given
the services provided to Borrower by other entities and that Borrower may lease
employees on a full or part-time basis pursuant to arms-length terms.

 

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

 

(v)           Borrower will not buy or hold indebtedness
issued by any other Person (other than cash and investment grade securities).

 

(w)          Except as expressly contemplated by
the Loan Documents with respect to the other Borrower, Borrower will not pledge
its assets to secure the obligations of any other Person.

 

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

 

(y)           Borrower will not engage in any
Bankruptcy Action without the written consent of two Independent Directors of
Borrower or SPC Party.  As used herein, “Bankruptcy
Action” shall mean, with respect to any Person, to institute proceedings to
have such Person be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency 

 

45

 

proceedings against such
Person or file a petition seeking, or consent to, reorganization or relief with
respect to such Person under any applicable federal or state law relating to
bankruptcy or insolvency, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of such
Person or a substantial part of its property, or make any assignment for the
benefit of creditors of such Person, or admit in writing such Person’s
inability to pay its debts generally as they become due, or take action in
furtherance of any such action.

 

(z)            Neither (a) ART Mortgage
Borrower Propco GP 2006-2 LLC, a Delaware limited liability company (the “Propco
Borrower GP”), the general partner of Propco Borrower, nor (b) ART
Mortgage Borrower Opco GP 2006-2 LLC, a Delaware limited liability company (the
“Opco Borrower GP”, and together with PropCo Borrower GP, individually
or collectively, as the context may require, “Borrower GP”), the general
partner of Opco Borrower, will own any asset or property other than (A) its
respective general partnership interest in Propco Borrower or Opco Borrower, as
the case may be, and (B) incidental personal property necessary for the
ownership of such interest or operation of Propco Borrower or Opco Borrower, as
applicable.

 

(aa)         Neither Borrower GP will engage in any
business other than being and acting as general partner of Propco Borrower or
Opco Borrower, as the case may be, and will conduct and operate its business as
presently conducted.

 

(bb)         Neither Borrower GP has incurred or
will incur any Indebtedness except as it may be liable for the debts of Propco
Borrower or Opco Borrower, as the case may be, in its capacity as general
partner of the Propco Borrower or Opco Borrower, as the case may be.

 

(cc)         Except as it is liable in its capacity
as general partner of Propco Borrower or Opco Borrower, as the case may be,
neither Borrower GP will guarantee or become obligated for the debts of any
other Person and does not and will not hold itself out to be responsible for or
have its credit available to satisfy or hold its credit as being available to
satisfy the debts or obligations of any other Person.

 

(dd)         Neither Borrower GP will form, acquire
or hold any subsidiary or own any equity interest in any other entity other
than Propco Borrower or Opco Borrower, as the case maybe.

 

3.1.25         Tax Filings. 
To the extent required, Borrower timely has filed (or has obtained
effective extensions for filing) all federal, state and local tax returns
required to be filed and has paid or made adequate provision for the payment of
all federal, state and local taxes, charges and assessments payable by
Borrower.

 

3.1.26         Solvency. 
Borrower (a) has not entered into the transaction or any Loan
Document with the actual intent to hinder, delay, or defraud any creditor and (b) has
received reasonably equivalent value in exchange for its obligations under the
Loan Documents.  Giving effect to the
Loan, the fair saleable value of Borrower’s assets exceeds and will,
immediately following the making of the Loan, exceed Borrower’s total
liabilities, including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities.  The
fair saleable value of Borrower’s assets is and will, immediately following the
making of the Loan, be greater than Borrower’s probable liabilities, including
the maximum amount of its contingent liabilities on its 

 

46

 

debts as such debts
become absolute and matured.  Borrower’s
assets do not and, immediately following the making of the Loan will not,
constitute unreasonably small capital to carry out its business as conducted or
as proposed to be conducted.  Borrower
does not intend to, and does not believe that it will, incur Indebtedness and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such Indebtedness and liabilities as they mature (taking into
account the timing and amounts of cash to be received by Borrower and the amounts
to be payable on or in respect of obligations of Borrower).

 

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

 

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

 

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

 

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

 

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

 

3.1.32         Intentionally Omitted.

 

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

 

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

 

47

 

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

 

3.1.36         Intentionally Omitted.

 

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

 

3.1.38         Property Management.  (a) Each
agreement comprising the Cash Management Agency Agreement is in full force and
effect and there is no default by any party thereto and no event has occurred
that, with the passage of time and/or the giving of notice, would constitute a
default thereunder.

 

(b)           The Management Agreement is in full
force and effect and there is no default by any party thereto and no event has
occurred that, with the passage of time and/or the giving of notice, would
constitute a default thereunder.

 

3.1.39         Perfection of Accounts. 
Borrower hereby represents and warrants to Lender that:

 

(a)           This Agreement, together with the
other Loan Documents, create a valid and continuing security interest (as
defined in the Uniform Commercial Code) in the Accounts in favor of Lender,
which security interest is prior to all other Liens, other than Permitted
Encumbrances, and is enforceable as such against creditors of and purchasers
from Borrower.  Other than in connection
with the Loan Documents and except for Permitted Encumbrances, Borrower has not
sold or otherwise conveyed the Accounts;

 

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

 

(c)           Pursuant and subject to the terms
hereof, Agent has agreed to comply with all instructions originated by Lender,
without further consent by Borrower, directing disposition of the 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; and

 

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

 

3.1.40         Agreements. 
Borrower is not in default in any material respect in the performance,
observance or fulfillment of any of the obligations, covenants or conditions 

 

48

 

contained in any
agreement or instrument to which it is a party or by which Borrower or the
Property is bound which default is reasonably likely to materially and
adversely effect Borrower or its business, properties or assets, operations or
financial condition, financial or otherwise.

 

3.1.41         Intentionally Omitted.

 

3.1.42         SPE Separateness Covenants. 
Borrower hereby represents that it has complied with the separateness
covenants contained in its organizational documents since its formation and in
place from time to time.

 

Section 3.2            Survival of Representations. 
The representations and warranties set forth in Section 3.1
shall survive (but shall be deemed made only as of the date hereof), and any
covenants contained in Section 3.1 shall continue, for so long as
any amount remains payable to Lender under this Agreement or any of the other
Loan Documents.

 

IV.           BORROWER COVENANTS

 

Section 4.1            Borrower Affirmative Covenants. 
Borrower hereby covenants and agrees with Lender that:

 

4.1.1            Existence; Compliance with Legal
Requirements.  Borrower shall do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
existence, rights, licenses, permits and franchises and comply in all material
respects with all Legal Requirements applicable to it and the Property,
including, without limitation, Prescribed Laws.

 

4.1.2            Taxes and Other Charges. 
Borrower shall pay all Taxes and Other Charges now or hereafter levied
or assessed or imposed against the Property or any part thereof as the same
become due and payable; provided, however, Borrower’s obligation
to directly pay Taxes shall, during the continuance of a Trigger Period, be
suspended for so long as Borrower complies with the terms and provisions of Section 6.2
hereof.  Borrower shall furnish to Lender
receipts for the payment of the Taxes and the Other Charges prior to the date
the same shall become delinquent; provided, however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 6.2
hereof.  Borrower shall not permit or
suffer and shall promptly discharge any lien or charge against the Property
(but subject to the foregoing provisions of this Section 4.1.2).  After prior notice to Lender (unless
subclause (v)(y) of this Section 4.1.2 is applicable),
Borrower, at its own expense, may contest by appropriate legal proceeding,
conducted in good faith and with due diligence, the amount or validity of any
Taxes or Other Charges, provided that (i) no Event of Default has
occurred and remains uncured; (ii) such proceeding shall be permitted
under and be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) neither the Property nor any part thereof or interest therein will
be in danger of being sold, forfeited, terminated, canceled or lost during the
pendency of such contest; (iv) unless subclause (v)(y) of this Section 4.1.2
is applicable, Borrower shall promptly upon final determination thereof pay the
amount of any such Taxes or Other Charges, together with all costs, interest
and penalties which may be payable in connection therewith; (v) either (x) such
proceeding shall suspend the collection of Taxes or Other Charges from the
Property or (y) Borrower shall have paid or 

 

49

 

discharged by bond or
otherwise all of the Taxes or Other Charges under protest; and (vi) unless
subclause (v)(y) of this Section 4.1.2 is applicable, Borrower
shall have furnished such security (if any) as may be required in the
proceeding, or as may be reasonably requested by Lender to insure the payment
of any contested Taxes or Other Charges, together with all interest and
penalties thereon.  Lender may pay over
any such cash or other security held by Lender to the claimant entitled thereto
at any time when, in the judgment of Lender, the entitlement of such claimant
is established.

 

4.1.3            Litigation. 
Borrower shall give prompt notice to Lender of any litigation or
governmental proceedings pending or threatened against Borrower which is not
covered by insurance and could reasonably be expected to materially adversely
affect the Property or Borrower’s ability to perform its obligations hereunder
or under the other Loan Documents.

 

4.1.4            Access to Property. 
Borrower shall permit agents, representatives and employees of Lender,
at Lender’s sole cost and expense (unless an Event of Default shall have
occurred and be continuing, in which case such inspection shall be at Borrower’s
sole cost and expense), to inspect the Property or any part thereof at
reasonable hours upon reasonable advance notice subject to the terms of the
Leases, and provided such entry and inspection shall not unreasonably interfere
with the usual operation and conduct of business at the Property or the use and
enjoyment of the Property by Borrower or its tenants, customers and guests.

 

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

 

(a)           execute and deliver to Lender such
documents, instruments, certificates, assignments and other writings, and do
such other acts necessary or desirable, to evidence, preserve and/or protect
the collateral at any time securing or intended to secure the obligations of
Borrower under the Loan Documents, as Lender may reasonably require; and

 

(b)           do and execute all and such further
lawful and reasonable acts, conveyances and assurances for the better and more
effective carrying out of the intents and purposes of this Agreement and the
other Loan Documents, as Lender shall reasonably require from time to time.

 

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

 

(b)           Borrower shall furnish Lender
annually, within one hundred twenty (120) days following the end of each Fiscal
Year, a complete copy of Guarantor’s annual financial statements audited by a “Big
Four” accounting firm or other independent certified public accountant
acceptable to Lender prepared in accordance with GAAP, which audited financial
statements shall include a balance sheet for Guarantor and shall be
supplemented by schedules 

 

50

 

covering the Property
which include statements of income and expense for the Property and the
so-called “key performance indicators” utilized by Borrower (which shall be
prepared in a manner consistent with Borrower’s then-current practices).  Such schedules shall set forth gross revenue
and operating expenses for the Property. 
Guarantor’s annual financial statements (as supplemented pursuant to the
preceding sentence) shall be accompanied by (x) a certificate executed by
the chief financial officer (or its equivalent) of Guarantor stating that such
annual financial statement presents fairly the financial condition and the
results of operations of Guarantor and (y) a certificate executed by the
chief financial officer (or its equivalent) of Borrower stating that the
schedules attached to such annual financial statement presents fairly the
financial operating condition and the results of operations of Borrower and the
Property.  Together with such annual
financial statements, Borrower shall furnish to Lender an Officer’s Certificate
certifying as of the date thereof whether to the best of Borrower’s knowledge
there exists an event or circumstance which constitutes a Default or Event of
Default by Borrower under the Loan Documents and if such Default or Event of
Default exists, the nature thereof, the period of time it has existed and the
action then being taken to remedy the same.

 

(c)           Borrower will furnish Lender on or
before the forty-fifth (45th) day after the end of each fiscal quarter (based
on Borrower’s Fiscal Year), the following items, accompanied by certificate
from the chief financial officer (or its equivalent) of Borrower, certifying
that such items are true, correct, accurate and complete and fairly present the
financial condition and results of the operations of Borrower and the Property
in accordance with GAAP as applicable:

 

(i)            quarterly
and year-to-date statements of income and expense prepared for such quarter
with respect to the Property;

 

(ii)           a
calculation reflecting the Underwritable Cash Flow as of the last day of such
quarter, for such quarter and the last four quarters;

 

(iii)          a “Major
Customer List” for the Property, and such other reasonable information
requested by Lender with respect to such “Major Customers” and listing all
newly-leased space or customers at each Individual Property and such
information as Lender may reasonably request regarding same;

 

(iv)          from
and after the occurrence of an Event of Default or special servicing of the
Loan for any reason whatsoever, a reconciliation of the budgeted income and
expenses and the actual income and expenses for such quarter and year-to-date
for the Property, prepared by Borrower in a manner consistent with its past
practices; and

 

(v)           any
notice received from a Tenant threatening non-payment of an amount of Rent that
is material in light of the Underwritable Cash Flow of the Individual Property
to which such threatened non-payment relates or other default, alleging or
acknowledging a default by landlord, requesting a termination of a Lease or a
material modification of any Lease or notifying Borrower of the exercise or
non-exercise of any material option provided for in such Tenant’s Lease, or any
other similar material correspondence received by Borrower from Tenants during
the subject fiscal quarter, in 

 

51

 

each case only if the same is material in light of the Underwritable
Cash Flow of the Individual Property to which it relates.

 

(d)           Intentionally Omitted.

 

(e)           Borrower shall submit the Annual
Budget to Lender within thirty (30) days following the commencement of
each Fiscal Year (or as soon thereafter as the Board of Trustees of Guarantor
has approved the same).  During the
continuation of a Cash Trap Period or an Event of Default only, discretionary
operating and capital expense items contained in said Annual Budget (and no
other matters contained therein) shall be subject to Lender’s approval (such
approval not to be unreasonably withheld, conditioned or delayed).  Each Annual Budget shall set forth in
reasonable detail budgeted monthly operating income and monthly operating and
capital expenses and other cash expenses for the Property.  If Lender’s approval is required hereunder, (i) in
the event Lender objects to any discretionary operating and capital expense
item contained in a proposed Annual Budget, Lender shall advise Borrower of
such objections in writing within ten (10) Business Days after receipt
thereof (and deliver to Borrower a reasonably detailed description of such
objections), and Borrower shall revise such Annual Budget within five (5) Business
Days after receipt of such notice and resubmit the same to Lender; and (ii) Lender
shall advise Borrower in writing of any reasonable objections to any
discretionary operating and capital expense items contained in such revised
Annual Budget within five (5) Business Days after receipt thereof (and
deliver to Borrower a reasonably detailed description of such objections), and
Borrower shall revise such Annual Budget in accordance with the process
described in this Section until Lender approves all of the discretionary
operating and capital expense items contained in such Annual Budget.  Each Annual Budget which contains
discretionary operating and capital expense items approved or deemed approved
by Lender in accordance with the terms hereof shall be referred to herein as an
“Approved Annual Budget”.  If
Lender’s approval is required hereunder, until such time that Lender approves
all of the discretionary operating and capital expense items contained in such
proposed Annual Budget, with respect to any discretionary operating and capital
expense items contained therein, an increase in an amount equal to the increase
in the Consumer Price Index for All Urban Consumers since the most recently
Approved Annual Budget shall be permitted with respect to such discretionary
operating and capital expense items.  Any
proposed Annual Budget submitted for Lender’s approval of the discretionary
operating and capital expense items contained therein pursuant to this Section 4.1.6(e) which
states at the top of such submittal “THIS ANNUAL BUDGET IS
BEING SUBMITTED FOR APPROVAL OF THE DISCRETIONARY OPERATING AND CAPITAL EXPENSE
ITEMS CONTAINED THEREIN PURSUANT TO SECTION 4.1.6(e) OF THE LOAN
AGREEMENT.  THE OPERATING AND CAPITAL
EXPENSE DISCRETIONARY ITEMS CONTAINED IN THIS ANNUAL BUDGET SHALL BE DEEMED
APPROVED BY LENDER IF LENDER DOES NOT NOTIFY BORROWER IN WRITING OF ITS
DISAPPROVAL, TOGETHER WITH THE GROUNDS FOR SUCH DISAPPROVAL, WITHIN TEN (10) BUSINESS
DAYS,” shall be deemed approved if Lender shall have not notified
Borrower in writing of its disapproval (together with a reasonably detailed
statement of the grounds of such disapproval) within ten (10) Business
Days after Borrower has submitted such Annual Budget in such manner to
Lender.  Any revised proposed Annual
Budget resubmitted for Lender’s approval of the discretionary operating and
capital expense items contained therein pursuant to this Section 4.1.6(e) due
to Lender’s reasonable objections to any discretionary operating and capital
expense items 

 

52

 

contained in an Annual
Budget previously submitted to Lender pursuant to this Section 4.1.6(e) which
states at the top of such submittal “THIS ANNUAL BUDGET IS
BEING RESUBMITTED FOR APPROVAL OF THE DISCRETIONARY OPERATING AND CAPITAL
EXPENSE ITEMS CONTAINED THEREIN PURSUANT TO SECTION 4.1.6(e) OF THE
LOAN AGREEMENT.  THE DISCRETIONARY
OPERATING AND CAPITAL EXPENSE ITEMS CONTAINED IN THIS REVISED ANNUAL BUDGET
SHALL BE DEEMED APPROVED BY LENDER IF LENDER DOES NOT NOTIFY BORROWER IN
WRITING OF ITS DISAPPROVAL, TOGETHER WITH THE GROUNDS FOR SUCH DISAPPROVAL,
WITHIN FIVE (5) BUSINESS DAYS,” shall be deemed approved if
Lender shall have not notified Borrower in writing of its disapproval (together
with a reasonably detailed statement of the grounds of such disapproval) within
five (5) Business Days after Borrower has submitted such revised Annual
Budget in such manner to Lender.

 

(f)            If, at the time one or more
Disclosure Documents are being prepared for a Securitization, Lender expects
that Borrower alone or Borrower and one or more Affiliates of Borrower
collectively, or the Property and Related Property collectively, will be a
Significant Obligor, Lender will so notify Borrower in writing and Borrower
shall furnish to Lender upon written request (i) the selected financial
data or, if applicable, Underwritable Cash Flow, required under Item 1112(b)(1) of
Regulation AB, if Lender expects that the principal amount of the Loan together
with any Related Loans as of the cut-off date for such Securitization may, or
if the principal amount of the Loan together with any Related Loans as of the
cut-off date for such Securitization and at any time during which the Loan and
any Related Loans are included in a Securitization does, equal or exceed ten
percent (10%) (but less than twenty percent (20%)) of the aggregate principal
amount of all mortgage loans included or expected to be included, as
applicable, in the Securitization or (ii) the financial statements
required under Item 1112(b)(2) of Regulation AB, if Lender expects that
the principal amount of the Loan together with any Related Loans as of the
cut-off date for such Securitization may, or if the principal amount of the
Loan together with any Related Loans as of the cut-off date for such
Securitization and at any time during which the Loan and any Related Loans are
included in a Securitization does, equal or exceed twenty percent (20%) of the
aggregate principal amount of all mortgage loans included or expected to be
included, as applicable, in the Securitization. 
Such financial data or financial statements shall be furnished to Lender
(A) within ten (10) Business Days after notice from Lender in
connection with the preparation of Disclosure Documents for the Securitization,
(B) not later than thirty (30) days after the end of each fiscal quarter
of Borrower and (C) not later than seventy-five (75) days after the end of
each fiscal year of Borrower; provided, however, that Borrower shall not be
obligated to furnish financial data or financial statements pursuant to clauses
(B) or (C) of this sentence with respect to any period for which a
filing pursuant to the Exchange Act in connection with or relating to the
Securitization is not required.  If
requested by Lender, Borrower shall furnish to Lender financial data and/or
financial statements for any Tenant of any of the Individual Properties if
available to Borrower and Borrower is not restricted from disclosing the same
to Lender by such Tenant and if, in connection with a Securitization, Lender
expects there to be, with respect to such Tenant or group of affiliated
Tenants, a concentration within all of the mortgage loans included or expected
to be included, as applicable, in the Securitization such that such Tenant or
group of affiliated Tenants would constitute a Significant Obligor.

 

53

 

(g)           If requested by Lender, Borrower
shall provide such financial and other information as shall be required
pursuant to Regulation AB in connection with a Securitization.

 

(h)           All financial data and financial statements
provided by Borrower pursuant to Section 4.1.6(f) or Section 4.1.6(g) shall
meet the requirements of Regulation AB and other applicable legal requirements,
if required by Lender.

 

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

 

4.1.8            Estoppel Statement.  (a) After
request by Lender, Borrower shall within ten (10) Business Days furnish
Lender with a statement, duly acknowledged and certified, stating to the best
of Borrower’s knowledge (i) the unpaid principal amount of the Note, (ii) the
Applicable Interest Rate of the Note, (iii) the date installments of
interest and/or principal were last paid, (iv) any offsets or defenses to
the payment of the Debt, if any, and (v) that this Agreement and the other
Loan Documents have not been modified or if modified, giving particulars of
such modification.

 

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

 

4.1.9            Leases.  (a) All
Leases and all renewals of Leases executed after the date hereof shall (i) be
on commercially reasonable terms, (ii) provide that such Lease is
subordinate to the Mortgage and that the lessee will attorn to Lender and any
purchaser at a foreclosure sale (provided, however, that Borrower
shall be required only to use commercially reasonable efforts to obtain such
subordination and attornment provisions in the Warehouse Agreements) and (iii) not
contain any terms which would materially adversely affect Lender’s rights under
the Loan Documents.  Any Major Leases and
all renewals, amendments and modifications thereof executed after the date
hereof shall be subject to Lender’s prior approval, which approval shall not be
unreasonably withheld or delayed, and subject to delivery by Borrower of a
Rating Agency Confirmation with respect to such Major Lease.  Borrower shall pay all reasonable actual
out-of-pocket costs and expenses (including reasonable attorney’s fees but
excluding internal fees) incurred by Lender or Servicer in connection with its
review of a Major Lease, including, without limitation, the fees and charges of
the Rating Agencies.  Lender shall
execute and deliver a Subordination Non-Disturbance and Attornment Agreement in
the form annexed as Schedule IV to the Tenant under any future Major Lease
approved by Lender or any other Lease entered into, subject to and in
accordance with this Section 4.1.9(a) promptly upon request
with such commercially reasonable changes as may be requested by the Tenant,
from time to time, and which are reasonably acceptable to Lender, provided
that Borrower shall pay all reasonable costs and expenses incurred by Lender in
connection with such Subordination Non-Disturbance and Attornment Agreement.

 

54

 

(b)           Borrower:

 

(i)            shall
observe and perform, or cause to be observed and performed, in a commercially
reasonable manner the material obligations imposed upon the lessor under Leases
in which Borrower is the lessor;

 

(ii)           shall
enforce, or cause to be enforced as against, the lessees, in a commercially
reasonable manner the material terms, covenants and conditions contained in the
Leases under which Borrower is the lessor, provided, however, Borrower shall
not terminate or accept a surrender of a Major Lease without Lender’s prior
approval (which approval may be conditioned upon receipt by Lender of a Rating
Agency Confirmation) and shall not terminate or accept a surrender of any other
Lease without Lender’s approval, unless such termination or surrender, when
taken together with any replacement Lease(s), will not have a material adverse
effect on the applicable Individual Property;

 

(iii)          shall
not collect, or cause or permit to be collected, any of the Rents more than one
(1) month in advance and shall not grant its approval of Manager’s
collection of any of the Rents more than one (1) month in advance (other
than security deposits);

 

(iv)          shall
not grant any assignment of lessor’s interest in the Leases or the Rents
(except as contemplated by the Loan Documents);

 

(v)           intentionally
omitted; and

 

(vi)          in
its capacity as lessor, shall hold all security deposits under all Leases in
accordance with Legal Requirements and upon request, shall furnish Lender with
executed copies of all Leases.

 

(c)           Any proposed Lease, or any amendment,
modification or termination of a Lease, that in each case requires Lender’s
consent pursuant to this Section 4.1.9 which is, in each case,
accompanied by a summary of the material terms of such document(s) (including
any economic terms and any termination options) and which states at the top of
such submittal “THIS IS A REQUEST FOR APPROVAL OF A LEASE
AMENDMENT, MODIFICATION OR TERMINATION OF A LEASE PURSUANT TO SECTION 4.1.9
OF THE LOAN AGREEMENT.  THIS LEASE OR AN
AMENDMENT, MODIFICATION OR TERMINATION THEREOF SHALL BE DEEMED APPROVED BY
LENDER IF LENDER DOES NOT NOTIFY BORROWER IN WRITING OF ITS DISAPPROVAL,
TOGETHER WITH THE GROUNDS FOR SUCH DISAPPROVAL, WITHIN FIFTEEN (15) CALENDAR
DAYS,” shall be deemed approved if Lender shall have not notified
Borrower in writing of its disapproval (together with a statement of the
grounds of such disapproval) within fifteen (15) calendar days after Borrower
has submitted such Lease, or any such amendment, modification or termination of
a Lease in such manner to Lender.

 

(d)           Borrower shall use good faith efforts
to obtain, within sixty (60) days after Lender’s request therefor,
Subordination, Non-Disturbance and Attornment Agreements in the form annexed as
Schedule IV from all Major Tenants then in existence.

 

55

 

4.1.10         Alterations.  (a) Lender’s
prior approval shall be required in connection with any (i) Alterations to
any Improvements (except tenant improvements under any Lease approved by Lender
or Alterations required in order to comply with applicable Legal Requirements)
that would reasonably be expected to have a material adverse effect on Borrower’s
financial condition, the value of the Property or the ongoing cash flow of the
Property or (ii) any Alterations that are structural in nature to any
Improvements (except tenant improvements under any Lease approved by Lender or
Alterations required in order to comply with applicable Legal Requirements),
the aggregate cost of which (including any related structural Alteration) is
reasonably anticipated to exceed the Alteration Threshold, which approval shall
not be unreasonably withheld, conditioned or delayed.  If the total unpaid amounts incurred and to
be incurred with respect to such Alterations set forth in clause (i) and (ii) above
(whether or not Lender’s prior approval is required with respect to such
Alterations), shall at any time exceed the Alteration Threshold, Borrower shall
promptly deliver to Lender, at Borrower’s option, but subject to the next
succeeding sentence, any one or more of the following: (A) as security for
the payment of such amounts and as additional security for Borrower’s
obligations under the Loan Documents any of the following: (1) cash, (2) Letters
of Credit, (3) U.S. Obligations, (4) other securities acceptable to
Lender, provided that Lender shall have received a Rating Agency Confirmation
as to the form and issuer of same, or (5) a completion bond, provided that
Lender shall have received a Rating Agency Confirmation as to the form and
issuer of same (any of the foregoing, “Alteration Security”) and/or (B) a
guaranty in the form attached as Schedule XII from Guarantor or a Person
with an Investment Grade Rating reasonably acceptable to Lender containing the “Guaranteed
Obligations” as defined therein (each, an “Alteration Guaranty”; any
Alteration Security and/or Alteration Guaranty so delivered are collectively,
the “Alteration Collateral”).  The
amount of the Alteration Security together with the amount of the “Guaranteed
Obligations” under any Alteration Guaranty delivered pursuant to this Section 4.1.10
shall be in an amount (the “Excess Alteration Amount”) equal to the
excess of the total unpaid amounts to be incurred with respect to such
Alterations (other than such amounts to be paid or reimbursed by Tenants under
the Leases) over the Alteration Threshold, which required amount (y) shall
be reduced as such Alteration progresses in an amount which is commensurate
with the amount expended in connection with such Alteration and (z) in the
case of any Capital Expenditures, shall be reduced by the amount of any Capital
Expenditure Funds on deposit at the time such Alteration is commenced.  If the Alteration Guaranty delivered in
accordance with this Section 4.1.10 is by Guarantor, and the
aggregate potential liability of Guarantor pursuant to such Alteration Guaranty
and any and all other guarantees and indemnities delivered by Guarantor
pursuant to this Agreement and the other Loan Documents (excluding for these
purposes the Guaranty) exceeds ten percent (10%) of the outstanding principal
amount of the Loan, then Borrower shall have delivered to Lender a new
non-consolidation opinion acceptable to the Rating Agencies which states that
the existence of such Alteration Guaranty does not alter any of the conclusions
contained in any non-consolidation opinion previously delivered to Lender in
connection with the Loan.  If any other
Person other than Guarantor delivers an Alteration Guaranty in accordance with
this Section 4.1.10, Borrower shall have delivered to Lender a new
non-consolidation opinion acceptable to the Rating Agencies which states that
the existence of such Alteration Guaranty does not alter any of the conclusions
contained in any non-consolidation opinion previously delivered to Lender in
connection with the Loan and which includes an additional pairing between
Borrower and such other Person.  Lender
hereby agrees to accept on a several (but not joint) basis the aggregate
Alteration 

 

56

 

Collateral required
pursuant to this Section 4.1.10 in such proportions as Borrower may
specify.  Any and all Alterations shall
be performed in compliance with all Legal Requirements in a manner that does
not significantly disrupt the business otherwise conducted at each Individual
Property.  Upon completion of the
Alterations to which any security delivered by Borrower pursuant to this Section 4.1.10
relates, Lender shall promptly return such excess security to Borrower.

 

(a)           Any proposed Alteration that requires
Lender’s consent pursuant to this Section 4.1.10 which is, in each case,
accompanied by a reasonably detailed description of the Alteration and the
plans and specifications therefor and which states at the top of such submittal
“THIS IS A REQUEST FOR APPROVAL OF AN ALTERATION
PURSUANT TO SECTION 4.1.10 OF THE LOAN AGREEMENT.  THIS ALTERATION SHALL BE DEEMED APPROVED BY
LENDER IF LENDER DOES NOT NOTIFY BORROWER IN WRITING OF ITS DISAPPROVAL,
TOGETHER WITH THE GROUNDS FOR SUCH DISAPPROVAL, WITHIN FIFTEEN (15) BUSINESS
DAYS,” shall be deemed approved if Lender shall have not notified
Borrower in writing of its disapproval (together with a reasonably detailed
statement of the grounds of such disapproval) within fifteen (15) Business Days
after Borrower has submitted such request for approval of a proposed Alteration
in such manner to Lender.

 

4.1.11         Environmental Remediation. 
Borrower shall undertake diligent inquiries and furnish to Lender any
and all available documentation in its possession or otherwise identified by it
concerning the history, status and removal or closure in place of a 2,000
gallon leaded gasoline underground storage tank referenced in a state
regulatory database as having been present on the Individual Property located
in Syracuse, New York as of August, 1988 and as more particularly described in Section 6.4
of the LandAmerica Environmental Site Assessment dated December 5, 2006
(the “Tank”).  In the event any such above-referenced
documentation or Borrower’s further inquiries and investigations identify any
non-compliance with any Environmental Law (as defined in the Environmental
Indemnity) or any release of any Hazardous Substances (as defined in the
Environmental Indemnity) relating to the Tank, Borrower shall, pursuant to its
obligations under the Environmental Indemnity, promptly remediate such
condition to the reasonable satisfaction of Lender and shall, and shall cause
Guarantor to, indemnify Lender for any and all Losses (as defined in the
Environmental Indemnity) arising from the presence of the Tank on the
Individual Property located in Syracuse, New York.

 

4.1.12         Material Agreements. 
Borrower shall, to the extent Borrower’s failure to so act would cause a
material adverse effect upon Borrower’ ability to perform its obligations under
this Agreement or the other Loan Documents, (a) promptly perform and/or
observe all of the material covenants and agreements required to be performed
and observed by it under each Material Agreement to which it is a party, and do
all things necessary to preserve and to keep unimpaired its rights thereunder
unless the other party thereunder is in default of its obligations to Borrower,
(b) promptly notify Lender in writing of the giving of any notice of any
default by any party under any Material Agreement of which it is aware and (c) promptly
enforce the performance and observance of all of the material covenants and
agreements required to be performed and/or observed by the other party under
each Material Agreement to which it is a party in a commercially reasonable
manner.

 

57

 

4.1.13                            Performance by Borrower.  Borrower shall
in a timely manner observe, perform and fulfill each and every covenant, term
and provision of each Loan Document executed and delivered by Borrower, and
shall not enter into or otherwise suffer or permit any amendment, waiver,
supplement, termination or other modification of any Loan Document executed and
delivered by Borrower without the prior consent of Lender.

 

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

 

4.1.15                            Business and Operations.  Borrower will
continue to engage in the businesses currently conducted by it as and to the extent
the same are necessary for the ownership, operation and leasing of the
Property.  Borrower will qualify to do
business and will remain in good standing under the laws of each jurisdiction
as and to the extent the same are required for the ownership, operation and
leasing of the related Property. 
Borrower shall at all times cause the Property to be maintained as cold
and/or dry storage warehouse facilities and uses incidental thereto.

 

4.1.16                            Intentionally Omitted.

 

4.1.17                            Intentionally Omitted.

 

4.1.18                            Cash Management Agency
Agreement.  (a) Borrower shall observe and perform,
and shall cause each party thereto to observe and perform, in a commercially
reasonable manner the material obligations imposed upon Borrower or any other
party thereto under each agreement comprising the Cash Management Agency
Agreement, except where the failure to so observe and perform would not have a
Material Adverse Effect.

 

(b)                                 Borrower shall enforce, as against each
counterparty thereto, its rights under each agreement comprising the Cash
Management Agency Agreement to which it is a party, in a commercially
reasonable manner, except where the failure to enforce such rights under the
Cash Management Agency Agreement would not have a Material Adverse Effect; provided, however,
that, Borrower shall not terminate or accept a surrender of, or cause or permit
the termination or surrender of any agreement comprising the Cash Management
Agency Agreement without Lender’s prior approval, except where the termination
or acceptance of a 

 

58

 

surrender of any such
agreement comprising the Cash Management Agency Agreement would not have a
Material Adverse Effect.

 

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

 

4.2.1                                   Due on Sale and
Encumbrance; Transfers of Interests.  Without the prior written consent of Lender,
neither Borrower nor any other Person having a direct or indirect ownership or
beneficial interest in Borrower shall sell, convey, mortgage, grant, bargain,
encumber, pledge, assign or Transfer any interest, direct or indirect, in the
Borrower, the Property or any part thereof, whether voluntarily or
involuntarily, by operation of law or otherwise, in violation of the covenants
and conditions set forth in the Mortgage and this Agreement.

 

4.2.2                                   Liens.  Subject to
Borrower’s right to contest Taxes or Other Charges pursuant to this Agreement
or any other Loan Documents, Borrower shall not create, incur, assume or suffer
to exist any Lien on any portion of the Property except for Permitted
Encumbrances.

 

4.2.3                                   Dissolution.  Borrower shall
not (i) engage in any dissolution, liquidation or consolidation or merger
with or into any other business entity, (ii) engage in any business
activity not related to the ownership and operation of the Property or (iii) transfer,
lease or sell, in one transaction or any combination of transactions, all or
substantially all of the property or assets of Borrower except to the extent
expressly permitted by the Loan Documents.

 

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

 

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

 

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

 

4.2.7                                   Zoning.  Except as
would not have a material adverse effect on Borrower’s ability to perform its
obligations hereunder, Borrower shall not initiate or consent to any zoning
reclassification of any portion of any Individual Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
any Individual Property in any manner that could result in such use becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior consent of Lender.

 

59

 

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

 

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

 

4.2.10                            Principal Place of
Business.  Borrower shall not change its principal place
of business from the address set forth on the first page of this Agreement
without first giving Lender ten (10) days’ prior notice.

 

4.2.11                            ERISA.  (a) Borrower
shall not engage in any transaction which would cause any obligation, or action
taken or to be taken, hereunder (or the exercise by Lender of any of its rights
under the Note, this Agreement or the other Loan Documents) to be a non-exempt
(under a statutory or administrative class exemption) prohibited transaction
under ERISA or Section 4975 of the Code.

 

(b)                                 Borrower shall deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (A) Borrower is
not an “employee benefit plan” as defined in Section 3(3) of ERISA,
whether or not subject to Title I of ERISA, or a “plan” within the meaning of Section 4975
of the Code; and (B) one or more of the following circumstances is true:

 

(i)                                     Equity interests in Borrower are publicly
offered securities, within the meaning of the Plan Assets Regulation;

 

(ii)                                  Less than twenty-five percent (25%) of
each outstanding class of equity interests in Borrower is held by “benefit plan
investors” within the meaning of the Plan Assets Regulation; or

 

(iii)                               Borrower qualifies as an “operating company” or a “real
estate operating company” within the meaning of the Plan Assets Regulation.

 

4.2.12                            Material Agreements.  Except as
would not have a material adverse effect on Borrower’s ability to perform its
obligations under this Agreement and the other Loan Documents, Borrower shall
not, without Lender’s prior written consent: (a) enter into any Material
Agreement, except on commercially reasonable terms, (b) surrender or
terminate any Material Agreement to which it is a party other than in the
ordinary course of Borrower’s business, including where the same is being
replaced or is no longer necessary (unless the other party thereto is in
material default and the termination of such agreement would be commercially
reasonable), (c) increase or consent to the increase of the amount of any
charges under any Material Agreement to which it is a party, except as provided
therein or on an arms’ length basis and commercially reasonable terms; or (d) otherwise
modify, change, supplement, alter or amend, or waive or release any of its
rights and remedies under any Material Agreement to 

 

60

 

which it is a party in
any material respect other than in the ordinary course of Borrower’s business,
except on an arm’s length basis and commercially reasonable terms.

 

4.2.13                            Intentionally Omitted.

 

4.2.14                            Intentionally Omitted.

 

4.2.15                            Intentionally Omitted.

 

4.2.16                            Cash Management Agency
Agreement.  Borrower shall not, without the prior written
consent of Lender, modify, supplement, restate, amend or waive any provision of
the Cash Management Agency Agreement in any manner whatsoever that (a) reduces
the amount payable by the counterparty thereto to Borrower thereunder, (b) reduces
or otherwise limits Borrower’s right to terminate the Cash Management Agency
Agreement or (c) would cause or result in a Material Adverse Effect.  Nothing contained in this Agreement or any
other Loan Document shall constrain the termination of the Cash Management
Agency Agreement so long as such termination would not have a Material Adverse
Effect.

 

V.                                    INSURANCE, CASUALTY
AND CONDEMNATION

 

Section 5.1                                   Insurance.

 

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

 

(i)                                     all risk insurance on the Improvements
and the personal property at the Property, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to one hundred percent
(100%) of the “Full Replacement Cost” which, for purposes of this Agreement,
shall mean actual replacement value (exclusive of costs of excavations,
foundations, underground utilities and footings) with a waiver of depreciation;
(B) containing an agreed amount endorsement with respect to the
Improvements and personal property at the Property waiving all co-insurance
provisions; (C) providing for no deductible in excess of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000) (except with respect to floods, wind and
earthquakes, each of which shall be limited to 5% of the insurable value per
loss or at prevailing market deductibles, with such increase to be approved by
Lender, such approval not to be unreasonably withheld, delayed or conditioned)
for all such insurance coverage; and (D) containing an “Ordinance or Law
Coverage” (sublimit of $10,000,000 for property damage and $2,000,000 for
business interruption in respect of the Property or such lesser sublimits as
may be commercially available as determined by Lender in its reasonable
discretion) or “Enforcement” endorsement if any of the Improvements or the use
of the Property shall at any time constitute legal non-conforming structures or
uses.  In addition, Borrower shall
obtain: (y) if any portion of the Improvements at any Individual Property
is currently or at any time in the future located in a federally designated “special
flood hazard area,” flood hazard insurance in an amount equal to the lesser of (1) the
Allocated Loan Amount of such Individual Property or (2) the maximum
amount of such insurance 

 

61

 

available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994, as each may be amended, plus excess flood insurance covering building,
contents and business interruption in a minimum amount of $5,000,000; and (z) earthquake
insurance in amounts and in form and substance satisfactory to Lender in the
event any Individual Property is located in an area with a high degree of
seismic activity, provided that the insurance pursuant to clauses (y) and (z) hereof
shall be on terms consistent with the all risk insurance policy required under
this subsection (i).

 

(ii)                                  commercial general liability insurance
against claims for personal injury, bodily injury, death or property damage
occurring upon, in or about the Property, such insurance (A) to be on the
so-called “occurrence” form with a combined limit, including umbrella coverage,
of not less than Twenty Five Million and No/100 Dollars ($25,000,000); (B) to
continue at not less than the aforesaid limit until required to be changed by
Lender by reason of changed economic conditions making such protection inadequate;
and (C) to cover at least the following hazards: (1) premises and
operations; (2) products and completed operations on an “if any” basis; (3) independent
contractors; (4) blanket contractual liability for all legal contracts;
and (5) contractual liability covering the indemnities contained in Article 9
of the Mortgage to the extent the same is available, the terms of excess
coverage to “follow form” over the primary general liability insurance and the
commercial motor vehicle liability coverage required under clause (viii) below;

 

(iii)                               business income insurance (A) with loss payable
to Lender; (B) covering all risks required to be covered by the insurance
provided for in subsection (i) above for a period commencing at the time
of loss for such length of time as it takes to repair or replace with the
exercise of due diligence and dispatch, but in no event in an amount less than
one year; and (C) containing an extended period of indemnity endorsement
which provides that after the physical loss to the Improvements and Personal
Property has been repaired, the continued loss of income will be insured until
such income either returns to the same level it was at prior to the loss, or
the expiration of one hundred twenty (120) days from the date that the affected
Individual Property is repaired or replaced and operations are resumed,
whichever first occurs, and notwithstanding that the policy may expire prior to
the end of such period.  The amount of
coverage required for business income insurance pursuant to this Section 5.1.1(a)(iii) shall
be included in the coverage amounts specified in Section 5.1.1(a)(i) above.  All proceeds payable to Lender pursuant to
this subsection shall be held by Lender and shall be applied to the obligations
secured by the Loan Documents from time to time due and payable hereunder and
under the Note; provided, however, that nothing herein contained shall be
deemed to relieve Borrower of its obligations to pay the obligations secured by
the Loan Documents on the respective dates of payment provided for in the Note
and the other Loan Documents except to the extent such amounts are actually
paid out of the proceeds of such business income insurance;

 

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

 

62

 

covering claims not covered by or under the terms or provisions of the
above mentioned commercial general liability insurance policy; and (B) the
insurance provided for in subsection (i) above written in a so-called
builder’s risk completed value form (1) on a non-reporting basis, (2) against
all risks insured against pursuant to subsection (i) above, (3) including
permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;

 

(v)                                 workers’ compensation, subject to the
statutory limits of the state in which the Property is located, and employer’s
liability insurance with a limit of at least One Million and No/100 Dollars
($1,000,000) per accident and per disease per employee, and One Million and
No/100 Dollars ($1,000,000) for disease aggregate in respect of any work or
operations on or about the Property, or in connection with the Property or its
operation (if applicable);

 

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

 

(vii)                           Intentionally Omitted;

 

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

 

(ix)                                Intentionally Omitted;

 

(x)                                   insurance against employee dishonesty in
an amount not less than Three Million and No/100 Dollars ($3,000,000) and with
a deductible not greater than One Hundred Thousand and No/100 Dollars
($100,000);

 

(xi)                                (A)                              during any period of the term of the Loan that TRIA is
in effect, if “acts of terrorism” or other similar acts or events are hereafter
excluded from Borrower’s all risk insurance policy (including business income),
Borrower shall obtain an endorsement to such policy insuring against all “certified
acts of terrorism” as defined by TRIA in an amount equal to the Release Amount
applicable to the Individual Property with the highest then-outstanding
Allocated Loan Amount.  The endorsement
or policy shall be in form and substance reasonably satisfactory to Lender and
shall meet Rating Agency criteria for securitized loans; or

 

(B)                                during any
period of the term of the Loan that TRIA is not in effect, or the endorsement
or policy referred to in (A) above is not available, if “acts of terrorism”
or other similar acts or events are hereafter excluded from Borrower’s all risk
insurance policy or business income insurance coverage, Borrower shall obtain
an endorsement to such policy, or a separate policy from an insurance provider,
insuring against all such excluded acts or events, to the extent such policy or
endorsement is available, in an amount determined by Lender in its reasonable
discretion (but in no event greater than the Release Amount applicable to the
Individual Property with the highest then-outstanding Allocated Loan Amount,
plus required business income coverage); provided, however, Borrower shall not
be required to pay annual 

 

63

 

premiums
in excess of $250,000.00 for such coverage. 
The endorsement or policy shall be in form and substance reasonably
satisfactory to Lender and shall meet Rating Agency criteria for securitized
loans; and

 

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

 

(b)                                 All insurance provided for in Section 5.1.1(a) shall
be obtained under valid and enforceable policies (collectively, the “Policies”
or in the singular, the “Policy”) and, to the extent not specified
above, shall be subject to the approval of Lender as to deductibles, loss
payees and insureds.  Not less than ten (10) days
prior to the expiration dates of the Policies theretofore furnished to Lender,
certificates of insurance evidencing the Policies accompanied by evidence
satisfactory to Lender of payment of the premiums then due thereunder (the “Insurance
Premiums”), shall be delivered by Borrower to Lender.

 

(c)                                  Borrower shall have the right to effect
the coverages required hereunder under one or more blanket insurance Policies
that cover the Property as well as other properties of Borrower’s Affiliates, provided
that any blanket insurance Policy shall provide substantially the same
protection required hereunder in respect of the Property as would a separate
Policy insuring only the Property in compliance with the provisions of Section 5.1.1(a) taking
into account the geographic diversity of the Property.

 

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

 

(e)                                  All Policies of insurance provided for in
Section 5.1.1(a), except for the Policies referenced in Section 5.1.l(a)(v) and
(a)(x) shall contain clauses or endorsements to the effect that:

 

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

 

64

 

(ii)                                  the Policy shall not be canceled without
at least thirty (30) days’ written notice to Lender and any other party named
therein as an additional insured and, if obtainable by Borrower using
commercially reasonable efforts, shall not be materially changed (other than to
increase the coverage provided thereby) without such a thirty (30) day notice;
and

 

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

 

(f)                                    (i) If at any time Lender is not in
receipt of written evidence that all insurance required hereunder is in full
force and effect, Lender shall have the right, upon ten (10) days prior
written notice to Borrower, to take such action as Lender deems necessary to
protect its interest in the Property, including, without limitation, the
obtaining of such insurance coverage as Lender in its sole discretion deems
appropriate and all premiums incurred by Lender in connection with such action
or in obtaining such insurance and keeping it in effect shall be paid by
Borrower to Lender upon demand and until paid shall be secured by the Mortgage
and shall bear interest at the Default Rate.

 

(ii)                                  The following
language applies solely with respect to the Individual Property located in the
State of Oregon, and shall be in lieu of the language contained in clause (i) of
this Section 5.1(f): UNLESS BORROWER PROVIDES
LENDER WITH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY THE LOAN
DOCUMENTS, THE LENDER MAY PURCHASE SUCH INSURANCE AT BORROWER’S EXPENSE TO
PROTECT LENDER’S INTEREST.  THIS
INSURANCE MAY, BUT NEED NOT, ALSO PROTECT BORROWER’S INTEREST.  IF THE COLLATERAL BECOMES DAMAGED, THE
COVERAGE LENDER PURCHASES MAY NOT PAY ANY CLAIM BORROWER MAKES OR ANY
CLAIM MADE AGAINST BORROWER.  BORROWER MAY LATER
CANCEL THIS COVERAGE BY PROVIDING EVIDENCE THAT BORROWER HAS OBTAINED PROPERTY
COVERAGE ELSEWHERE.

 

BORROWER
IS RESPONSIBLE FOR THE REASONABLE COST OF ANY SUCH INSURANCE PURCHASED BY
LENDER.  THE COST OF THIS INSURANCE MAY BE
ADDED TO THE LOAN BALANCE.  IF THIS COST
IS ADDED TO THE LOAN BALANCE, THE INTEREST RATE PAYABLE UNDER THE UNDERLYING
LOAN WILL APPLY TO THE ADDED AMOUNT.  THE
EFFECTIVE DATE OF THE COVERAGE MAY BE THE DATE BORROWER’S PRIOR COVERAGE
LAPSED OR THE DATE BORROWER FAILED TO PROVIDE PROOF OF COVERAGE.

 

THE COVERAGE LENDER
PURCHASES MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE BORROWER CAN
OBTAIN ON BORROWER’S OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE
COVERAGE OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY
APPLICABLE LAW.

 

(g)                                 In the event of foreclosure of the
Mortgage or other transfer of title to the Property in extinguishment in whole
or in part of the Debt, all right, title and interest of Borrower in and to the
Policies that are not blanket Policies then in force concerning the Property 

 

65

 

and all proceeds payable
thereunder shall thereupon vest in the purchaser at such foreclosure or Lender
or other transferee in the event of such other transfer of title.

 

5.1.2                                   Insurance Company.  The Policies
shall be issued by financially sound and responsible insurance companies
permitted to do business in the State in which each Individual Property is
located.  For so long as five (5) or
more insurance carriers are providing the Policies, at least sixty percent (60%)
of such coverage shall be provided by insurance companies having a claims
paying ability rating of “A-” or better by S&P with the remaining forty
percent (40%) of such coverage being provided by insurance companies having a
claims paying ability rating of “BBB-” or better by S&P; provided, however,
with respect to the first One Hundred Million and No/100 Dollars
($100,000,000.00) of coverage under such Policies, not more than twenty percent
(20%) of such coverage shall be provided by insurance companies with a claims
paying ability rating lower than “A-” by S&P (but in no event lower than “BBB-”
by S&P).  In the event that four (4) or
fewer insurance carriers are providing the Policies, at least seventy-five
percent (75%) of such coverage shall be provided by insurance companies having
a claims paying ability rating of “A-” or better by S&P, with the remaining
twenty-five percent (25%) of such coverage being provided by insurance
companies having a claims paying ability rating of “BBB-” or better by S&P.
 If a Securitization occurs, (i) the
foregoing required insurance company rating by a Rating Agency not rating any
Securities shall be disregarded and (ii) if the insurance company complies
with the aforesaid S&P required rating (and S&P is rating the Securities)
and the other Rating Agencies rating the Securities do not rate the insurance
company, such insurance company shall be deemed acceptable with respect to such
Rating Agency not rating such insurance company.  Notwithstanding the foregoing, Borrower shall
be permitted to maintain the Policies with insurance companies which do not
meet the foregoing requirements (an “Otherwise Rated Insurer”), provided
Borrower obtains a “cut-through” endorsement (that is, an endorsement which
permits recovery against the provider of such endorsement) with respect to any
Otherwise Rated Insurer from an insurance company which meets the claims paying
ability ratings required above. 
Moreover, if Borrower desires to maintain insurance required hereunder
from an insurance company which does not meet the claims paying ability ratings
set forth herein but the parent of such insurance company, which owns at least
fifty-one percent (51%) of such insurance company, maintains such ratings,
Borrower may use such insurance companies if approved by the Rating Agencies
(such approval may be conditioned on items required by the Rating Agencies
including a requirement that the parent guarantee the obligations of such
insurance company).

 

5.1.3                                   Current Insurance.  Lender hereby
acknowledges that the insurance coverages under the certificates of insurance
delivered to Lender in connection with the execution and delivery of this
Agreement are currently acceptable to Lender as of the date hereof for the
periods covered under the policies described in said certificates for purposes
of this Section 5.1.

 

Section 5.2                                   Casualty and Condemnation.

 

5.2.1                                   Casualty.  If any
Individual Property shall sustain a Casualty, Borrower shall give prompt notice
of such Casualty to Lender and shall promptly commence and diligently prosecute
to completion the repair and restoration of such Individual Property as nearly
as possible to the condition such Individual Property was in immediately prior
to such Casualty (a 

 

66

 

“Restoration”) and
otherwise in accordance with Section 5.3, it being understood,
however, that Borrower shall not be obligated to restore such Individual
Property to the precise condition of such Individual Property prior to such
Casualty provided the Individual Property is restored, to the extent
practicable, to be of at least equal value and of substantially the same
character as prior to the Casualty. 
Borrower shall pay all costs of such Restoration whether or not such
costs are covered by insurance.  Lender
may, but shall not be obligated to, make proof of loss if not made promptly by
Borrower.  In the event of a Casualty
where the loss does not exceed the Restoration Threshold, Borrower may settle
and adjust such claim; provided that (a) no Event of Default has occurred
and is continuing and (b) such adjustment is carried out in a commercially
reasonable and timely manner.  In the
event of a Casualty where the loss exceeds the Restoration Threshold or if an
Event of Default then exists, Borrower may settle and adjust such claim only
with the consent of Lender (which consent shall not be unreasonably withheld or
delayed) and Lender shall have the opportunity to participate, at Borrower’s
cost, in any such adjustments. 
Notwithstanding any Casualty, Borrower shall continue to pay the Debt at
the time and in the manner provided for its payment in the Note and in this
Agreement.

 

5.2.2                                   Condemnation.  Borrower shall
give Lender prompt notice of any actual or threatened Condemnation by any
Governmental Authority of all or any part of any Individual Property and shall
deliver to Lender a copy of any and all papers served in connection with such
proceedings.  Provided no Event of
Default has occurred and is continuing, in the event of a Condemnation where the
amount of the taking does not exceed the Restoration Threshold, Borrower may
settle and compromise such Condemnation; provided that the same is effected in
a commercially reasonable and timely manner. 
In the event of a Condemnation where the amount of the taking exceeds
the Restoration Threshold or if an Event of Default then exists, Borrower may
settle and compromise the Condemnation only with the consent of Lender (which
consent shall not be unreasonably withheld or delayed) and Lender shall have the
opportunity to participate, at Borrower’s cost, in any litigation and
settlement discussions in respect thereof and Borrower shall from time to time
deliver to Lender all instruments requested by Lender to permit such
participation.  Borrower shall, at its
expense, diligently prosecute any such proceedings, and shall consult with
Lender, its attorneys and experts, and cooperate with them in the carrying on
or defense of any such proceedings. 
Notwithstanding any Condemnation, Borrower shall continue to pay the
Debt at the time and in the manner provided for its payment in the Note and in
this Agreement.  Lender shall not be
limited to the interest paid on the Award by any Governmental Authority but
shall be entitled to receive out of the Award interest at the rate or rates
provided herein or in the Note.  If any
Individual Property or any portion thereof is taken by any Governmental
Authority, Borrower shall promptly commence and diligently prosecute the
Restoration of the Property and otherwise comply with the provisions of Section 5.3.  If any Individual Property is sold by or on
behalf of Lender subsequent to acceleration, through foreclosure or otherwise,
prior to the receipt by Lender of the Award, Lender shall have the right,
whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Debt.

 

5.2.3                                   Casualty Proceeds. 
Notwithstanding the last sentence of Section 5.1.1(a)(iii) and
provided no Event of Default exists hereunder, proceeds received by Lender on
account of the business interruption insurance specified in Section 5.1.1(a)(iii) above
with respect to any Casualty shall be deposited by Lender directly into the
Deposit Account (as 

 

67

 

defined in the Cash
Management Agreement) but (a) only to the extent it reflects a replacement
for (i) lost Rents that would have been due under Leases or Service
Contracts existing on the date of such Casualty, and/or (ii) lost Rents
under Leases or Service Contracts that had not yet been executed and delivered
at the time of such Casualty which Borrower has proven to the insurance company
would have been due under such Leases (and then only to the extent such
proceeds disbursed by the insurance company reflect a replacement for such past
due Rents) and (b) only to the extent necessary to fully make the
disbursements required by Sections 3.3(a)(i) through (vi) of
the Cash Management Agreement.  All other
such proceeds shall be held by Lender and disbursed in accordance with Section 5.3
hereof.

 

Section 5.3                                   Delivery of Net Proceeds.

 

5.3.1                                   Minor Casualty or
Condemnation.  If a Casualty or Condemnation has occurred to
any Individual Property and the Net Proceeds shall be less than the Restoration
Threshold and the costs of completing the Restoration shall be less than the
Restoration Threshold, and provided no Event of Default shall have occurred and
remain uncured, the Net Proceeds will be disbursed by Lender to Borrower.  Promptly after receipt of the Net Proceeds,
Borrower shall commence and satisfactorily complete with due diligence the
Restoration in accordance with the terms of this Agreement.  If any Net Proceeds are received by Borrower
and may be retained by Borrower pursuant to the terms hereof, such Net Proceeds
shall, until completion of the Restoration, be held in trust for Lender and
shall be segregated from other funds of Borrower to be used to pay for the cost
of Restoration in accordance with the terms hereof.

 

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

 

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

 

(ii)                                  (A) in the event the Net Proceeds are
insurance proceeds, less than forty percent (40%) of the total floor area of
the Improvements at such Individual Property has been damaged, destroyed or
rendered unusable as a result of such Casualty or (B) in the event the Net
Proceeds are an Award, less than fifteen percent (15%) of the land constituting
such Individual Property is taken, and such land is located along the perimeter
or periphery of such Individual Property, and no portion of the Improvements is
the subject of the Condemnation;

 

(iii)                               The projected aggregate Gross Revenue for the Property
after completion of the Restoration (as reasonably determined by Lender) shall
not be reduced as a result of the occurrence of such Casualty or Condemnation
by more than twenty percent (20%) as compared to the Gross Revenue received by
Borrower during the twelve (12) month period immediately preceding such
Casualty or Condemnation.

 

68

 

(iv)                              Borrower shall commence the Restoration
as soon as reasonably practicable and shall diligently pursue the same to
satisfactory completion;

 

(v)                                 Lender shall be satisfied that any
operating deficits and all payments of principal and interest under the Note
will be paid during the period required for Restoration from (A) the Net
Proceeds (including sums received from the proceeds of the coverage required
pursuant to Section 5.1.1(a)(iii)), or (B) other funds of
Borrower;

 

(vi)                              Lender shall be satisfied that the
Restoration will be completed on or before the earliest to occur of (A) the
date six (6) months prior to the Maturity Date, (B) the earliest date
required for such completion under the terms of any Lease covering 25% or more
of the applicable Individual Property or (C) such time as may be required
under applicable Legal Requirements in order to repair and restore the Property
to the condition it was in immediately prior to such Casualty or to as nearly
as possible the condition it was in immediately prior to such Condemnation, as
applicable;

 

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

 

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

 

(ix)                                such Casualty or Condemnation, as
applicable, does not result in the loss of access to such Individual Property
or the related Improvements (except if the same is effectively replaced).

 

(b)                                 The Net Proceeds shall be paid directly
to Lender and held by Lender in an interest-bearing account (with such interest
being credited to such account) and, until disbursed in accordance with the
provisions of this Section 5.3.2, shall constitute additional
security for the Debt.  The Net Proceeds
shall be disbursed by Lender to, or as directed by, Borrower from time to time
during the course of the Restoration, upon receipt of evidence satisfactory to
Lender that (A) all requirements set forth in Section 5.3.2(a) have
been satisfied, (B) all materials installed and work and labor performed
(except to the extent that they are to be paid for out of the requested
disbursement) in connection with the Restoration have been paid for in full,
and (C) there exist no notices of pendency, stop orders, mechanic’s or
materialman’s liens or notices of intention to file same, or any other liens or
encumbrances of any nature whatsoever on the Individual Property arising out of
the Restoration which have not been fully bonded to the reasonable satisfaction
of Lender, discharged of record or fully insured to the reasonable satisfaction
of Lender by the title company issuing the Title Insurance Policy (or another
reputable title company satisfactory to Lender).

 

(c)                                  The Restoration shall be completed in a
first class workmanlike manner at least equivalent to the quality and character
of the original work in the Improvements (provided, however, that in the case
of a partial Condemnation, the Restoration shall be done to the extent
reasonable practicable after taking into account the consequences of such
partial Condemnation), so that upon completion thereof, the Individual Property
shall be at least equal in value and 

 

69

 

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

 

(d)                                 In no event shall Lender be obligated to
make disbursements of the Net Proceeds in excess of an amount equal to the
costs actually incurred from time to time for work in place as part of the
Restoration, as certified by Borrower, less the Casualty Retainage.  The term “Casualty Retainage” shall
mean, as to each contractor, subcontractor or materialman engaged in the
Restoration, an amount equal to ten percent (10%) of the costs actually
incurred for work in place as part of the Restoration, as certified by
Borrower, until the Restoration has been completed.  The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this Section 5.3.2(d),
be less than the amount actually held back by Borrower from contractors,
subcontractors and materialmen engaged in the Restoration.  The Casualty Retainage shall not be released
until Borrower certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 5.3.2(d) and
that all approvals necessary for the re-occupancy and use of the Property have
been obtained from all appropriate Governmental Authorities, and Lender
receives evidence satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty Retainage;
provided, however, that Lender will release the portion of the Casualty
Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which Borrower
certifies to Lender that the contractor, subcontractor or materialman has
substantially completed all work in a satisfactory manner and has supplied all
materials in accordance with the provisions of the contractor’s, subcontractor’s
or materialman’s contract, the contractor, subcontractor or materialman
delivers the lien waivers and evidence of payment in full of all sums due to
the contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company issuing the Title Insurance Policy (or another
reputable title company satisfactory to Lender), and Lender receives an
endorsement to the Title Insurance Policy insuring the continued priority of
the lien of the Mortgage and evidence of payment of any premium payable for
such endorsement.  If required by Lender,
the release of any such portion of the Casualty Retainage shall be approved by
the surety company, if any, which has issued a payment or performance bond with
respect to the contractor, subcontractor or materialman.

 

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

 

(f)                                    If at any time the Net Proceeds or the
undisbursed balance thereof shall not, in the reasonable opinion of Lender be
sufficient to pay in full the balance of the costs which are reasonably
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds 

 

70

 

Deficiency”) with Lender before any further
disbursement of the Net Proceeds shall be made. 
The Net Proceeds Deficiency deposited with Lender shall be held by
Lender and shall be disbursed for costs actually incurred in connection with
the Restoration on the same conditions applicable to the disbursement of the
Net Proceeds, and until so disbursed pursuant to this Section 5.3.2
shall constitute additional security for the Debt.

 

(g)                                 The excess, if any, of the Net Proceeds
and the remaining balance, if any, of the Net Proceeds Deficiency deposited
with Lender after the Casualty Consultant certifies to Lender that the
Restoration has been completed in accordance with the provisions of this Section 5.3.2,
and the receipt by Lender of evidence satisfactory to Lender that all costs
incurred in connection with the Restoration have been paid in full, shall be
remitted by Lender to Borrower, provided no Event of Default shall have
occurred and shall be continuing under any of the Loan Documents.

 

(h)                                 Subject to Borrower’s rights pursuant to Section 2.4.2,
all Net Proceeds not required (i) to be made available for the Restoration
or (ii) to be returned to Borrower as excess Net Proceeds pursuant to Section 5.3.2(g) may
be retained and applied by Lender toward the payment of the Debt, whether or
not then due and payable, in such order, priority and proportions as Lender in
its sole discretion shall deem proper, or, at the discretion of Lender, the
same may be paid, either in whole or in part, to Borrower for such purposes as
Lender shall designate.

 

(i)                                     Notwithstanding anything to the contrary
contained herein, from and after the occurrence of a Casualty or Condemnation,
if (1) any Lease of all or any portion of an Individual Property covering
at least 25% of the total square footage of such Individual Property and/or any
contract for services at an Individual Property (a “Service Contract”)
for which the payments thereunder constitute at least 25% of the Gross Revenue
generated by such Individual Property requires Borrower to restore such
Individual Property after such Casualty or Condemnation, (2) no default
(beyond any applicable notice and/or grace periods) shall have occurred and be
continuing under such Lease or Service Contract and (3) no Event of
Default shall have occurred and be continuing, then Lender shall disburse the
Net Proceeds or Award in accordance with the disbursement provisions specified
in Section 5.3.2(b)-(g) to Borrower (without Borrower having
to satisfy the conditions specified in Section 5.3.2(a)) to facilitate
Borrower’s compliance therewith.

 

VI.                                RESERVE FUNDS

 

Section 6.1                                   Required Repair Funds.

 

6.1.1                                   Deposits of Required
Repair Funds.  Borrower shall perform the repairs and the
remediations at the Property, as more particularly set forth on Schedule II hereto
(such repairs and remediations hereinafter collectively referred to as “Required
Repairs”).  Borrower shall complete
the Required Repairs at each Individual Property by the required deadline for
each repair or remediation as set forth on Schedule II, subject to
Excusable Delays.  On the Closing Date,
Borrower shall deposit with Lender the amount for each Individual Property set
forth on such Schedule II hereto multiplied by one hundred twenty-five
percent 

 

71

 

(125%).  Amounts deposited pursuant to this Section 6.1.1,
together with interest earned thereon, are referred to as the “Required
Repair Funds”.(1)

 

6.1.2                                   Release of Required Repair
Funds.

 

(a)                                  Lender shall direct Agent to disburse
Required Repair Funds only for Required Repairs.

 

(b)                                 Lender shall direct Agent to disburse
Required Repair Funds upon satisfaction by Borrower of each of the following
conditions: (i) Borrower shall submit a request for payment to Lender at
least ten (10) days prior to the date on which Borrower requests such
payment be made and specifies the Required Repairs to be paid, (ii) on the
date such request is received by Lender and on the date such payment is to be
made, no Event of Default shall exist and remain uncured, (iii) Lender
shall have received a certificate from Borrower (A) stating that the items
to be funded by the requested disbursement are Required Repairs, (B) stating
that all Required Repairs at the Property to be funded by the requested
disbursement have been performed to date in a good and workmanlike manner and
in accordance with all applicable Legal Requirements, such certificate to be
accompanied by a copy of any license, permit or other approval required by any
Governmental Authority in connection with the Required Repairs, (C) identifying
each Person that supplied materials or labor in connection with the Required
Repairs to be funded by the requested disbursement, and (D) stating that
each such Person has been paid amounts then due or will be paid such amount
upon such disbursement, such certificate to be accompanied by lien waivers or
other evidence of payment reasonably satisfactory to Lender, (iv) at
Lender’s option, a title search for the Individual Property at which such
Required Repairs are being performed indicating that such Individual Property
is free from all Liens, claims and other encumbrances not previously approved
by Lender, (v) at Lender’s option, if the cost of any individual Required
Repair exceeds $750,000, Lender shall have received a report satisfactory to
Lender in its reasonable discretion from an architect, engineer or consultant
approved (which approval shall not be unreasonably withheld, conditioned or
delayed) by Lender in respect of such architect’s, engineer’s or consultant’s
inspection of the Required Repairs, and (vi) Lender shall have received
such other evidence as Lender shall reasonably request that the portion of the
Required Repairs to be funded by the requested disbursement have been performed
to date and are paid for or will be paid upon such disbursement to
Borrower.  Lender shall not be required
to disburse Required Repair Funds more frequently than once each calendar
month, unless such requested disbursement is in an amount greater than the
Minimum Disbursement Amount (or a lesser amount if the total amount of Required
Repair Funds is less than the Minimum Disbursement Amount, in which case only
one disbursement of the amount remaining in the account shall be made).

 

(c)                                  Nothing in this Section 6.1.2
shall (i) make Lender responsible for performing or completing the
Required Repairs; (ii) require Lender to expend funds in addition to the
Required Repair Funds to complete any Required Repairs; (iii) obligate
Lender to proceed with the Required Repairs; or (iv) obligate Lender to
demand from Borrower additional sums to complete any Required Repairs.

 

(1) Note:  Borrower’s covenant to perform all required
repairs and remediations within 12 months in lieu of cash deposit, LC or
guaranty to be discussed following completion of due diligence.

 

72

 

(d)                                 Borrower shall permit Lender and Lender’s
agents and representatives (including, without limitation, Lender’s engineer,
architect, inspector or consultant) or third parties to enter onto the Property
during normal business hours (subject to the rights of Tenants under their
Leases) to inspect the progress of any Required Repairs and all materials being
used in connection therewith and to examine, if applicable, all plans and shop drawings
relating to such Required Repairs.  Prior
to the occurrence of an Event of Default such entry and inspection shall be
conducted in a manner that minimizes any interference with Borrower’s business
or the use and enjoyment of the Property by Borrower, Borrower’s tenants and
Borrower’s tenants’ customers and guests. 
Borrower shall cause all contractors and subcontractors to cooperate
with Lender or Lender’s representatives or such other Persons described above
in connection with inspections described in this Section 6.1.2(d).

 

(e)                                  If a disbursement for any single Required
Repair at an Individual Property will exceed $750,000, Lender may require an
inspection of the Property at Borrower’s expense prior to making a disbursement
of Required Repair Funds, and in connection therewith, such entry and
inspection shall be conducted in a manner that minimizes any interference with
Borrower’s business or the use and enjoyment of the Property by Borrower,
Borrower’s tenants and Borrower’s tenants’ customers and guests.  Lender may require that such inspection be
conducted by an appropriate independent qualified professional selected by
Lender and may require a certificate of completion by an independent qualified
professional engineer, architect or consultant acceptable to Lender prior to
the disbursement of such Required Repair Funds. 
Borrower shall pay the reasonable out-of-pocket expense of the
inspection as required hereunder, whether such inspection is conducted by Lender
or by an independent qualified professional engineer, architect or consultant

 

(f)                                    In the event Lender releases an
Individual Property (or assigns the Mortgage encumbering such Individual
Property) as a result of the exercise of Borrower’s rights under Section 2.4
or Section 2.5 hereof, Lender shall direct Agent, and Agent shall,
promptly following the release of the Lien of the Mortgage (or the assignment
of the Mortgage) with respect to such Individual Property, deliver, or cause
the delivery, to Borrower from the Required Repair Funds an amount equal to the
undisbursed portion of the Required Repair Funds deposited by Borrower with
respect to the Required Repairs to be performed on such Individual Property.

 

Section 6.2                                   Tax Funds.

 

6.2.1                                   Deposits of Tax Funds.  Pursuant to
the Cash Management Agreement, upon the occurrence of (a) a Trigger Event
and during the continuance of a Trigger Period or (b) an Event of Default
and during the continuance thereof, there shall be deposited with Agent on each
Monthly Payment Date an amount equal to one-twelfth of the Taxes that Lender
reasonably estimates will be payable during the next ensuing twelve (12) months
in order to accumulate sufficient funds to pay all such Taxes at least ten (10) days
prior to their respective due dates. 
Amounts deposited pursuant to this Section 6.2.1, together with
interest earned thereon, are referred to herein as the “Tax Funds”.  If at any time Lender reasonably determines
that the Tax Funds will not be sufficient to pay the Taxes, Lender shall notify
Borrower of such determination and the monthly deposits for Taxes shall be
increased by the amount that Lender estimates is sufficient to make up the
deficiency at least fifteen (15) days prior to the respective due dates for 

 

73

 

the Taxes; provided
that if Borrower receives notice Of any deficiency after the date that is
fifteen (15) days prior to the date that Taxes are due, Borrower will deposit
such amount within three (3) Business Days after its receipt of such
notice.

 

6.2.2                                   Release of Tax Funds.  Lender shall
have the right to apply the Tax Funds to payment of Taxes (and, at Borrower’s
request, which shall be made not later than ten (10) days prior to the
date the applicable payment of Taxes is due, Lender shall apply the Tax Funds
to such payment of Taxes, provided that no Event of Default has occurred and is
continuing).  In making any payment
relating to Taxes, Lender may do so according to any bill, statement or
estimate procured from the appropriate public office (with respect to Taxes)
without inquiry into the accuracy of such bill, statement or estimate or into
the validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof.  If the amount of the Tax
Funds shall exceed the amounts due for Taxes, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Tax Funds. 
Any Tax Funds remaining after the Debt has been paid in full shall be
returned to Borrower.  In the event Lender
releases an Individual Property (or assigns the Mortgage encumbering such
Individual Property) as a result of the exercise of Borrower’s rights under Section 2.4
or Section 2.5 hereof, Lender shall direct Agent, and Agent shall,
promptly following the release of the Lien of the Mortgage (or the assignment
of the Mortgage) with respect to such Individual Property, deliver, or cause
the delivery, to Borrower from the Tax Funds an amount equal to the Tax Funds
deposited by Borrower into the Tax Account with respect to such Individual
Property (to the extent such Tax Funds are in excess of the Tax Funds that will
be required to be reserved in the Tax Account with respect to the Property
(excluding such Individual Property)).

 

Section 6.3                                   Insurance Funds.

 

6.3.1                                   Deposits of Insurance
Funds. 
Pursuant to the Cash Management Agreement, upon the occurrence of (a) a
Trigger Event and during the continuance of a Trigger Period or (b) an
Event of Default and during the continuance thereof, there shall be deposited with
Agent on each Monthly Payment Date an amount equal to one-twelfth of the
Insurance Premiums that Lender reasonably estimates will be payable for the
renewal of the coverage afforded by the Policies upon the expiration thereof in
order to accumulate sufficient funds to pay all such Insurance Premiums at
least thirty (30) days prior to the expiration of the Policies.  Amounts deposited pursuant to this Section 6.3.1
are referred to herein as the “Insurance Funds”.  If at any time Lender reasonably determines
that the Insurance Funds will not be sufficient to pay the Insurance Premiums,
Lender shall notify Borrower of such determination and the monthly deposits for
Insurance Premiums shall be increased by the amount that Lender estimates is
sufficient to make up the deficiency at least thirty (30) days prior to
expiration of the Policies; provided that if Borrower receives notice of any
deficiency after the date that is thirty (30) days prior to the expiration date
of the Policies, Borrower will deposit such amount within three (3) Business
Days after its receipt of such notice. 
Notwithstanding the foregoing provisions of this Section 6.3.1,
if insurance coverages required hereunder are effected under one or more
blanket insurance Policies in accordance with the terms set forth in Section 5.1.1(c),
Borrower shall not be required to make deposits under this Section 6.3.1, provided
that Borrower delivers to Lender certificates of insurance evidencing such
blanket insurance Policies, together with evidence reasonably satisfactory to
Lender that the premiums for such blanket insurance Policies have 

 

74

 

been paid, and if such
Policies are to expire within thirty (30) days, that the premiums with respect
to such blanket Policies for the next succeeding period have been paid.

 

6.3.2                                   Release of Insurance Funds.  Lender shall
have the right to apply the Insurance Funds to payment of Insurance Premiums
(and, at Borrower’s request, which shall be made not later than ten (10) days
prior to the date the applicable payment of Insurance Premiums is due, Lender
shall apply the Insurance Funds to such payment of Insurance Premiums, provided
that no Event of Default has occurred and is continuing).  In making any payment relating to Insurance
Premiums, Lender may do so according to any bill, statement or estimate
procured from the insurer or its agent, without inquiry into the accuracy of
such bill, statement or estimate.  If the
amount of the Insurance Funds shall exceed the amounts due for Insurance
Premiums, Lender shall, in its sole discretion, return any excess to Borrower
or credit such excess against future payments to be made to the Insurance
Funds.  Any Insurance Funds remaining
after the Debt has been paid in full shall be returned to Borrower.  In the event Lender releases an Individual
Property (or assigns the Mortgage encumbering such Individual Property) as a
result of the exercise of Borrower’s rights under Section 2.4 or Section 2.5
hereof, Lender shall direct Agent, and Agent shall, promptly following the
release of the Lien of the Mortgage (or the assignment of the Mortgage) with
respect to such Individual Property, deliver, or cause the delivery, to
Borrower from the Insurance Funds an amount equal to the Insurance Funds
deposited by Borrower into the Insurance Account with respect to such
Individual Property (to the extent such Insurance Funds are in excess of the
Insurance Funds that will be required to be reserved in the Insurance Account
with respect to the Property (excluding such Individual Property)).

 

Section 6.4                                   Capital Expenditure Funds.

 

6.4.1                                   Deposits of Capital
Expenditure Funds.  Pursuant to the Cash Management Agreement,
upon (a) the occurrence of a Trigger Event and during the continuance of a
Trigger Period or (b) the occurrence of an Event of Default and during the
continuance thereof, Borrower shall deposit with Agent on each Monthly Payment
Date an amount equal to the lesser of (a) one-twelfth of the product of
$0.03 and the number of cubic feet of space at the Property (it being agreed
that, as of the date hereof there is 110,557,472 cubic feet of space at the
Property comprised of the number of cubic feet at each Individual Property set
forth on Schedule VI) and (b) the amount necessary to bring the
amount of Capital Expenditure Funds in the Capital Expenditure Account to the
Capital Expenditure Maximum Amount, which amounts shall be for Capital
Expenditures.  Amounts deposited pursuant
to this Section 6.4.1, together with interest earned thereon, are
referred to herein as the “Capital Expenditure Funds”.

 

6.4.2                                   Release of Capital
Expenditure Funds.  (a) Lender shall direct Agent to
disburse Capital Expenditure Funds only for Capital Expenditures Work.

 

(b)                                 Lender shall direct Agent to disburse to
Borrower the Capital Expenditure Funds upon satisfaction by Borrower of each of
the following conditions: (i) Borrower shall submit a request for payment
to Lender at least ten (10) days prior to the date on which Borrower
requests such payment be made and specifies the Capital Expenditures Work to be
paid, (ii) on the date such request is received by Lender and on the date
such payment is to be made, no Event of Default shall exist and remain uncured,
(iii) Lender shall have received a certificate from 

 

75

 

Borrower (A) stating
that the items to be funded by the requested disbursement are Capital
Expenditures Work, (B) stating that all Capital Expenditures Work at the
Property to be funded by the requested disbursement have been performed to date
in a good and workmanlike manner and in accordance with all applicable Legal
Requirements, such certificate to be accompanied by a copy of any license,
permit or other approval required by any Governmental Authority in connection
with the Capital Expenditures Work, (C) identifying each Person that
supplied materials or labor in connection with the Capital Expenditures Work to
be funded by the requested disbursement, and (D) stating that each such
Person has been paid amounts then due or will be paid such amount upon such
disbursement, such certificate to be accompanied by lien waivers or other
evidence of payment reasonably satisfactory to Lender, (iv) at Lender’s
option, a title search for the Individual Property at which such Capital
Expenditures Work are being performed indicating that such Individual Property
is free from all Liens, claims and other encumbrances not previously approved
by Lender, (v) intentionally omitted, and (vi) Lender shall have
received such other evidence as Lender shall reasonably request that the
portion of the Capital Expenditures Work at the Property to be funded by the
requested disbursement have been performed to date and are paid for or will be
paid upon such disbursement to Borrower. 
Lender shall not be required to disburse Capital Expenditure Funds more
frequently than once each calendar month, unless such requested disbursement is
in an amount greater than the Minimum Disbursement Amount (or a lesser amount
if the total amount of Capital Expenditure Funds is less than the Minimum
Disbursement Amount, in which case only one disbursement of the amount
remaining in the account shall be made).

 

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

 

(d)                                 Borrower shall permit Lender and Lender’s
agents and representatives (including, without limitation, Lender’s engineer,
architect, or inspector) or third parties to enter onto the Property during
normal business hours (subject to the rights of Tenants under their Leases) to
inspect the progress of any Capital Expenditures Work and all materials being
used in connection therewith and to examine (if applicable) all plans and shop
drawings relating to such Capital Expenditures Work.  Prior to the occurrence of an Event of
Default, such entry and inspection shall be conducted in a manner that
minimizes any interference with Borrower’s business or the use and enjoyment of
the Property by Borrower, Borrower’s tenants and Borrower’s tenants’ customers
and guests.  Borrower shall cause all
contractors and subcontractors to cooperate with Lender or Lender’s
representatives or such other Persons described above in connection with
inspections described in this Section 6.4.2(d).

 

(e)                                  If a disbursement with respect to any
Individual Property will exceed fifteen percent (15%) of the Allocated Loan
Amount for such Individual Property, Lender may require an inspection of such
Individual Property at Borrower’s expense prior to making a disbursement of
Capital Expenditure Funds in connection therewith.  Such entry and inspection shall be conducted
in a manner that minimizes any interference with Borrower’s business or the use
and enjoyment of the affected Individual Property by Borrower, Borrower’s
tenants and Borrower’s tenants’ customers and guests.  Lender may require that such inspection be 

 

76

 

conducted by an
appropriate independent qualified professional selected by Lender and may
require a certificate of completion by an independent qualified professional
architect, engineer or consultant reasonably acceptable to Lender prior to the
disbursement of such Capital Expenditure Funds. 
Borrower shall pay the reasonable out-of-pocket expense of the
inspection as required hereunder, whether such inspection is conducted by
Lender or by an independent qualified professional architect, engineer or
consultant.

 

(f)                                    In addition to any insurance required
under the Loan Documents, Borrower shall provide or cause to be provided
workmen’s compensation insurance, builder’s risk, and public liability
insurance and other insurance to the extent required under applicable law in
connection with Capital Expenditures Work. 
All such policies shall be in form and amount reasonably satisfactory to
Lender.

 

(g)                                 In the event Lender releases an
Individual Property (or assigns the Mortgage encumbering such Individual
Property) as a result of the exercise of Borrower’s rights under Section 2.4,
Section 2.5 or Section 11.29 hereof, Lender shall
direct Agent, and Agent shall, promptly following the release of the Lien of
the Mortgage (or the assignment of the Mortgage) with respect to such
Individual Property, deliver, or cause the delivery, to Borrower from the
Capital Expenditure Funds an amount equal to the Capital Expenditure Funds on
deposit which are in excess of the Capital Expenditure Maximum Amount (as
reduced due to such release), and the amount required to be deposited pursuant
to Section 6.4.1 shall be reduced proportionately to reflect the
reduced cubic footage of such released Individual Property.

 

Section 6.5                                   Borrower Cash Collateral Funds.

 

6.5.1                                   Deposits of Borrower Cash
Collateral Funds.  From and after the occurrence of a Cash Trap
Event and during the continuance of a Cash Trap Period, Borrower shall deposit
with Agent all of the Borrower Excess Cash Flow (the “Borrower Cash
Collateral Funds”).

 

6.5.2                                   Release of Borrower Cash
Collateral Funds.  All Borrower Cash Collateral Funds on deposit
shall be released by Lender in accordance with the Cash Management Agreement
when Lender determines that a Cash Trap Period no longer exists.

 

Section 6.6                                   Intentionally Omitted.

 

Section 6.7                                   Intentionally Omitted.

 

Section 6.8                                   Application of Reserve Funds. 
Upon the occurrence and during the continuance of an Event of Default,
Lender, at its option, may withdraw the Reserve Funds and apply the Reserve
Funds to the items for which the Reserve Funds were established or to payment
of the Debt in such order, proportion and priority as Lender may determine in
its sole discretion.  Lender’s right to
withdraw and apply the Reserve Funds shall be in addition to all other rights
and remedies provided to Lender under the Loan Documents.

 

77

 

Section 6.9                                   Security Interest in Reserve
Funds.

 

6.9.1                                   Grant of Security Interest.  Borrower shall
be the owner of the funds on deposit in the Accounts.  Borrower hereby pledges, assigns and grants a
security interest to Lender, as security for payment of the Debt and the
performance of all other terms, conditions and covenants of the Loan Documents
on Borrower’s part to be paid and performed, in all of Borrower’s right, title
and interest in and to the funds on deposit in the Accounts.  The Reserve Funds shall be under the sole
dominion and control of Lender, and Lender shall hold the Reserve Funds now or
hereafter deposited in the Accounts subject to the terms of this Agreement and
the Cash Management Agreement.  Notwithstanding
anything to the contrary contained herein or in the Cash Management Agreement
or any other Loan Document, Lender shall have no security interest or Lien in
any funds disbursed to Borrower in accordance with the Cash Management
Agreement following such disbursement.

 

6.9.2                                   Income Taxes.  The Reserve
Funds shall be held in an interest-bearing account and invested in Permitted
Investments in accordance with the terms of the Cash Management Agreement.  Borrower shall report on its federal, state
and local income tax returns all interest or income accrued on the Reserve
Funds.

 

6.9.3                                   Prohibition Against
Further Encumbrance.  Borrower shall not, without the prior consent
of Lender, further pledge, assign or grant any security interest in the Reserve
Funds or permit any lien or encumbrance to attach thereto, or any levy to be
made thereon, or any UCC-l Financing Statements, except those naming Lender as
the secured party, to be filed with respect thereto.

 

Section 6.10                            Intentionally Omitted.

 

Section 6.11                            Provisions Regarding Letters of
Credit.

 

6.11.1                            Security for Debt.  Each Letter of
Credit delivered under this Agreement shall be additional security for the
payment of the Debt.  Upon the occurrence
and during the continuance of an Event of Default, Lender shall have the right,
at its option, to draw on any Letter of Credit and to apply all or any part
thereof to the payment of the items for which such Letter of Credit was
established or to apply each such Letter of Credit to payment of the Debt in
such order, proportion or priority as Lender may determine.  Any such application to the Debt shall be
subject to the terms set forth in Section 2.3.3 and Section 2.4.3.  On the Maturity Date, any such Letter of
Credit may be applied to reduce the Debt.

 

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

 

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of Credit is not provided
at least thirty (30) days prior to the date on which the outstanding Letter of
Credit is scheduled to expire; (c) upon receipt of notice from the issuing
bank that the Letter of Credit will be terminated (except if the termination of
such Letter of Credit is permitted pursuant to the terms and conditions of this
Agreement or a substitute Letter of Credit is provided); or (d) if Lender
has received notice that the bank issuing the Letter of Credit shall cease to
be an Eligible Institution, and Borrower shall have failed to provide a
replacement Letter of Credit within five (5) Business Days thereof.  Notwithstanding anything to the contrary
contained in the above, Lender is not obligated to draw any Letter of Credit
upon the happening of an event specified in (a), (b), (c) or (d) above
and shall not be liable for any losses sustained by Borrower due to the
insolvency of the bank issuing the Letter of Credit if Lender has not drawn the
Letter of Credit.  If any Letter of
Credit proceeds shall be disbursed to Lender hereunder, Borrower shall
thereafter be permitted to deliver to Lender, as a replacement for such cash
proceeds, either a Letter of Credit or Reserve Guaranty in the amount of the
cash proceeds then remaining after application in accordance with the terms
hereof, and Lender shall promptly disburse such remaining cash proceeds to
Borrower upon its receipt of such replacement Letter of Credit or Reserve
Guaranty.

 

Section 6.12                            Guaranty or Letter of Credit in
Lieu of Cash Deposit.

 

(a)                                  In lieu of making cash deposits of
Required Repair Funds, Tax Funds, Insurance Funds and/or Capital Expenditure
Funds, Borrower may deliver to Lender one or more of the following: (i) a
guaranty from Guarantor in form and substance reasonably acceptable to Lender
(a “Reserve Guaranty”) or (ii) a Letter of Credit in accordance
with the provisions of this Section 6.12.  Borrower shall be responsible for the payment
of all reasonable out-of-pocket costs and expenses incurred by the Servicer in
the administration of any Letter of Credit or Reserve Guaranty delivered
pursuant to this Section 6.12.

 

(b)                                 In the event Borrower elects to deliver a
Letter of Credit in lieu of making cash deposits of Required Repair Funds, Tax
Funds, Insurance Funds and/or Capital Expenditure Funds, the aggregate amount
of any Letter of Credit, Reserve Guaranty and/or cash on deposit with respect
to the Required Repair Funds, Tax Funds, Insurance Funds and/or Capital
Expenditure Funds shall at all times be at least equal to the aggregate amount
which Borrower is required to have on deposit in such Reserve Fund(s) pursuant
to this Agreement.  The aggregate amount
of any Letter of Credit, Reserve Guaranty and/or cash on deposit with respect
to the Tax Funds shall at all times be at least equal to the aggregate which
Borrower would be required to deposit in such Reserve Fund over the next twelve
(12) month period.  The aggregate amount
of any Letter of Credit, Reserve Guaranty and/or cash on deposit with respect
to the Insurance Funds shall at all times be at least equal to the aggregate
which Borrower would be required to deposit in such Reserve Fund over the next
twelve (12) month period.  In the event
that a Letter of Credit and/or Reserve Guaranty is delivered in lieu of any
portion of the Tax Funds or the Insurance Funds, Borrower shall be responsible
for the payment of Taxes or Insurance Premiums, as applicable, and Lender shall
not be responsible therefor.

 

(c)                                  Borrower shall give Lender no less than
thirty (30) days notice of Borrower’s election to deliver a Letter of Credit
pursuant to this Section 6.12 and Borrower shall pay to Lender all
of Lender’s reasonable out-of-pocket costs and expenses in connection
therewith.  Borrower shall not be
entitled to draw from any such Letter of Credit.  Upon thirty 

 

79

 

(30) days notice to
Lender, Borrower may replace a Letter of Credit theretofore delivered to Lender
pursuant to this Section 6.12 with a cash deposit to the applicable
Reserve Fund and/or with a Reserve Guaranty. 
Prior to such replacement of a Letter of Credit, to the extent same is
not replaced with a Reserve Guaranty, Borrower shall deposit an amount equal to
the amount that would have accumulated in the applicable Reserve Fund and not
been disbursed in accordance with this Agreement if such Letter of Credit had
not been delivered.

 

(d)                                 Borrower shall provide Lender with notice
of any increases in the annual payments for Taxes and Insurance Premiums thirty
(30) days prior to the effective date of any such increase and any applicable
Letter of Credit under this Section 6.12 shall be increased by such
increased amount at least ten (10) days prior to the effective date of
such increase (unless such increase is covered by cash or a Reserve Guaranty).

 

VII.                            PROPERTY MANAGEMENT

 

Section 7.1                                   The Management Agreement. 
Borrower shall cause any Manager to manage the Property in accordance with
the Management Agreement.  Borrower shall
(i) diligently perform and observe all of the material terms, covenants
and conditions of the Management Agreement on the part of Borrower to be
performed and observed, (ii) promptly notify Lender of any notice to
Borrower of any default by Borrower in the performance or observance of any of
the terms, covenants or conditions of the Management Agreement on the part of
Borrower to be performed and observed, and (iii) if Manager is not an
Affiliate of Borrower, promptly deliver to Lender a copy of each financial
statement, business plan, capital expenditures plan, report and estimate
received by it under the Management Agreement. 
If Borrower shall default in the performance or observance of any
material term, covenant or condition of any Management Agreement on the part of
Borrower to be performed or observed, then, without limiting Lender’s other
rights or remedies under this Agreement or the other Loan Documents, and
without waiving or releasing Borrower from any of its obligations hereunder or
under the Management Agreement, Lender shall have the right, but shall be under
no obligation, to pay any sums and to perform any act as may be appropriate to
cause all the material terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed or observed.

 

Section 7.2                                   Prohibition Against Termination
or Modification.  Borrower shall not (i) surrender,
terminate or cancel any Management Agreement, unless (A) Borrower has
advised Lender of its intention to terminate the Manager, (B) the
replacement manager has delivered to Lender copies of an Assignment of
Management Agreement and a cash management agreement in substantially the form
of the Cash Management Agreement in each case executed by Borrower and
replacement manager and (C) the replacement manager is a Qualified
Manager, (ii) modify any Management Agreement in such a way that would
have a material adverse effect on the use, operation or value of the Property
or the ability of Borrower to pay its obligations in respect of the Loan, (iii) enter
into any other agreement with any Person for such Person to act as the manager
or operator of the Property, except as provided in this Section 7.2,
or (iv) consent to the Transfer by the Manager of its interest under the
Management Agreement except as provided in this Section 7.2, in
each case without the express consent of Lender, which consent shall not be
unreasonably withheld; provided, however, with respect to a
new manager (other than a Qualified Manager), such consent may be conditioned
upon Borrower delivering a Rating 

 

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Agency Confirmation as to
such new manager and management agreement. 
If at any time Lender consents to the appointment of a new manager, or a
new manager is appointed without Lender’s consent being required, (a) such
new manager and Borrower shall, as a condition of Lender’s consent, if
required, execute an Assignment of Management Agreement and a cash management
agreement in substantially the form of the Cash Management Agreement and (b) if
such new manager is an Affiliate of Borrower, Borrower shall deliver a
non-consolidation opinion acceptable to the Rating Agencies.

 

Section 7.3                                   Replacement of Manager. 
Lender shall have the right to require Borrower to replace any Manager
with a Person which is not an Affiliate of, but is chosen by Borrower and
approved by Lender (which approval, in the case of a replacement due to the
circumstances described in subsections (ii) and/or (iii) of this Section 7.3,
shall not be unreasonably withheld, conditioned or delayed) upon the occurrence
of any one or more of the following events: (i) at any time following the
acceleration of the Loan by Lender, (ii) if Manager shall be in material default
under the Management Agreement beyond any applicable notice and cure period
and/or (iii) if at any time the Manager has engaged in gross negligence,
fraud or willful misconduct.

 

Section 7.4                                   The Cash Management Agency
Agreement.  Lender shall have the right to require
Borrower to terminate the Cash Management Agency Agreement upon the occurrence
of any one or more of the following events: (i) at any time following the
acceleration of the Loan by Lender, (ii) if Borrower’s counterparty to the
Cash Management Agency Agreement shall be in material default thereunder beyond
any applicable notice and cure period and/or (iii) if at any time such
counterparty has engaged in gross negligence, fraud or willful misconduct.

 

VIII.                        PERMITTED TRANSFERS

 

Section 8.1                                   Permitted Transfer of Property. 
The Loan may not be assumed in connection with a Transfer of the
Property until the earlier of (i) the date on which one or more Secondary
Market Transactions have been effected resulting in neither German American
Capital Corporation nor JPMorgan Chase Bank, N.A. nor any of their respective
Affiliates holding any of the Loan and (ii) the first anniversary of the
date hereof Thereafter, Lender’s consent to a Transfer of the Property and
assumption of the Loan, or to a Transfer of all of the interests in Borrower,
which Transfer is otherwise prohibited hereunder, shall not be unreasonably
withheld, provided that the following requirements are satisfied:

 

(a)                                  Lender receives sixty (60) days prior
written notice of such Transfer;

 

(b)                                 no Event of Default has occurred and is
continuing and no Default or Event of Default shall occur as a result of such
Transfer;

 

(c)                                  Borrower shall pay Lender a transfer fee
which is payable to the Servicer equal to $25,000 at the time of such Transfer;
provided that no transfer fee shall be payable to the Lender or the
Servicer for the first such Transfer;

 

(d)                                 Borrower shall pay any and all reasonable
out-of-pocket costs incurred in connection with such Transfer (including,
without limitation, Lender’s reasonable counsel fees 

 

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and disbursements and all
recording fees, title insurance premiums and mortgage and intangible taxes and
the fees and expenses of the Rating Agencies pursuant to clause (1) below);

 

(e)                                  Transferee shall be a Qualified
Transferee;

 

(f)                                    Transferee must have demonstrated
expertise in owning and operating properties similar in location, size, class
and operation to the Property, which expertise shall be reasonably determined
by Lender;

 

(g)                                 Intentionally omitted;

 

(h)                                 If the Property is being transferred and
the Loan assumed, Transferee shall assume all of the obligations of Borrower
under the Loan Documents in a manner satisfactory to Lender in all respects,
including, without limitation, by entering into an assumption agreement in form
and substance reasonably satisfactory to Lender;

 

(i)                                     Transferee and the general partner of
Transferee (if Transferee is a limited partnership) or economic member of
Transferee (if Transferee is a limited liability company) must be able to
satisfy all the representations and covenants set forth in Section 3.1.8
(with respect to ERISA), Section 3.1.9 (with respect to Prescribed
Laws), Sections 4.1.1 (with respect to Prescribed Laws) and Section 4.2.11
(with respect to ERISA) of this Agreement;

 

(j)                                     Transferee and the general partner of
Transferee (if Transferee is a limited partnership) or economic member of
Transferee (if Transferee is a limited liability company) shall deliver all
organizational documentation reasonably requested by Lender, which shall be
reasonably satisfactory to Lender;

 

(k)                                  Borrower shall have delivered a Rating
Agency Confirmation with respect to Transferee and the Transfer;

 

(l)                                     Borrower or Transferee, at its sole cost
and expense, shall deliver to Lender a bankruptcy nonconsolidation opinion
letter reflecting such Transfer reasonably satisfactory in form and substance
to Lender and acceptable to the Rating Agencies;

 

(m)                               (i) in the event Guarantor has
executed and delivered any guaranty in connection with the Loan, prior to any
release of Guarantor from its liabilities and obligations thereunder, one (1) or
more substitute guarantors reasonably acceptable to Lender and acceptable to
the Rating Agencies (A) shall have assumed all of the liabilities and
obligations of Guarantor under such guaranties or (B) shall execute and
deliver a replacement guaranty reasonably satisfactory to Lender and acceptable
to the Rating Agencies and (ii) prior to any release of Guarantor from its
liabilities and obligations under the Environmental Indemnity, one (1) or
more substitute indemnitors reasonably acceptable to Lender and acceptable to
the Rating Agencies (A) shall have assumed all of the liabilities and
obligations of Guarantor under the Environmental Indemnity or (B) shall
execute and deliver a replacement environmental indemnity reasonably
satisfactory to Lender and acceptable to the Rating Agencies;

 

(n)                                 Borrower shall deliver, at its sole cost
and expense, an endorsement to the Title Insurance Policies, insuring the
Mortgage, as modified by the assumption agreement, as a 

 

82

 

valid first lien on the
Property and naming the Transferee as owner of the Property, which endorsement
shall insure that, as of the date of the recording of the assumption agreement,
the Property shall not be subject to any additional exceptions or liens other
than those contained in the relevant Title Insurance Policy issued on the date
hereof and the Permitted Encumbrances relating thereto; and

 

(o)                                 each Individual Property shall be managed
by a Qualified Manager pursuant to a replacement management agreement
reasonably satisfactory to Lender.

 

The consent of the Lender to
a Transfer may be conditioned on, among other things, whether or not the
Transferee, the controlling principals of Transferee and all other entities
which may be owned or controlled directly or indirectly by Transferee’s
controlling principals (such principal and other entities, collectively, the “Related
Persons”) are Disqualified Transferees as of the date of the Transfer
(unless, with respect to any entity, the controlling principals of Transferee
did not own or control such entity at the time there occurred with respect to
such entity the event giving rise to it being regarded as a Disqualified
Transferee).

 

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

 

Notwithstanding the
foregoing, nothing contained in this Agreement or the other Loan Documents
shall in any way restrict or prohibit, nor shall any notice to Lender or
consent of Lender be required in connection with, a Transfer effectuated in
compliance with the terms and provisions of clause (A) or clause (B) contained
in the last sentence of Section 8.2.

 

Section 8.2                                   Permitted Transfers of Interest
in Borrower.  A Transfer of (but not a mortgage, pledge,
hypothecation, encumbrance or grant of a security interest in) a direct or
indirect beneficial interest in Borrower or any SPC Party of Borrower shall be
permitted without Lender’s consent if (a) Lender receives thirty (30) days
prior written notice (or such shorter period of time as may be permitted by
Lender in its sole discretion) thereof and, to the extent required to permit
compliance by Borrower’s affiliates with Regulation FD, agrees to regard and
keep the same as Confidential, (b) Transferee and its Related Persons must
not be Disqualified Transferees as of the date of the Transfer; provided, however,
that in the event that the Transferee or any of its Related Persons is a
Disqualified Transferee, Lender shall not unreasonably withhold its consent,
and may consider such fact in making its determination, but such fact shall not
constitute the sole factor or reason for withholding its consent, (c) immediately
prior to such Transfer, no Event of Default shall have occurred and be
continuing (other than an Event of Default which would be cured by such Transfer),
(d) subsequent to such Transfer, Borrower and each SPC Party continue to
satisfy the conditions of Section 3.1.24, (e) subsequent to
such Transfer, Guarantor owns directly or indirectly more than fifty percent
(50%) of Borrower and each SPC Party and controls Borrower and each SPC Party,
and (f) if (i) such Transfer causes Transferee to own, in the
aggregate with the ownership interests of its Affiliates, more than a 49%
interest in Borrower or any SPC Party (and Transferee together with its
Affiliates did not, prior to such Transfer, own more than a 49% interest in 

 

83

 

Borrower or such SPC
Party), or (ii) such Transfer, together with all other Transfers of direct
or indirect interest in Borrower or any SPC Party, whether in a single Transfer
or in a series of Transfers and whether or not effected simultaneously, results
in a transfer of more than 49% of the aggregate ownership interests in Borrower
or any SPC Party, an acceptable non-consolidation opinion is delivered to
Lender and to each of the Rating Agencies concerning, as applicable, Borrower,
each SPC Party, Transferee and/or their respective owners.  Notwithstanding the foregoing, nothing
contained in this Agreement or the other Loan Documents shall in any way
restrict or prohibit, nor shall any notice to Lender or consent of Lender or
Rating Agency Confirmation (except as expressly provided below) be required in
connection with (A) the transfer, mortgage, pledge, hypothecation,
encumbrance or issuance of any ownership interests or securities in VNO, VRLP,
CEI, CRE, YAA, YAP or YCI or any Public Company (or of any Persons owning an
interest in any of the foregoing), (B) the merger or consolidation of VNO,
VRLP, CEI, CRE, YAA, YAP or YCI or any Public Company with or into any other
Person (or of any Persons owning an interest in any of the foregoing), or a
sale or transfer of all or substantially all of the assets of VNO, VRLP, CEI,
CRE, YAA, YAP or YCI or of any Public Company (or of any Persons owning an
interest in any of the foregoing), (C) the transfer, mortgage, pledge,
hypothecation or encumbrance of any ownership interests or securities in
Guarantor between or among VNO, VRLP, CEI, CRE, YAA, YAP and YCI (or one or
more entities owned and controlled by any one or more of the foregoing), (D) the
issuance of any ownership interests or securities in Guarantor so long as
Guarantor (or its permitted successor) or its direct or indirect owner is or,
in connection with such issuance, becomes, a Public Company, and (E) the
merger or consolidation of Guarantor or its direct or indirect owner with or
into any other Person, provided that the surviving entity of such merger
or consolidation or its direct or indirect owner is a Public Company; provided
further that, if, after giving effect to any transaction described under clause
(D) or (E), VNO, VRLP, CEI, CRE, YAA, YAP and/or YCI would own in the
aggregate, directly or indirectly, less than fifty-one percent (51%) interest
of Borrower or any SPC Party or would not control Borrower and each SPC Party,
Borrower shall have obtained a Rating Agency Confirmation.

 

IX.                                SALE AND
SECURITIZATION OF MORTGAGE

 

Section 9.1                                   Sale of Mortgage and
Securitization; Loan Components; Mezzanine Loans.  (a) Subject
to the limitations in Section 11.27, Lender shall have the right (i) to
sell or otherwise transfer the Loan or any portion thereof as a whole loan, (ii) to
sell participation interests in the Loan or (iii) to securitize the Loan
or any portion thereof in a single-asset securitization or a pooled-loan
securitization.  The transactions
referred to in clauses (i), (ii) and (iii) shall hereinafter be
referred to collectively as “Secondary Market Transactions” and the
transactions referred to in clause (iii) shall hereinafter be referred to
as a “Securitization”.  Any
certificates, notes or other securities issued in connection with a
Securitization are hereinafter referred to as “Securities”.

 

(b)                                 If requested by Lender, Borrower shall
use reasonable efforts to assist Lender in satisfying the market standards to
which Lender customarily adheres or which may be reasonably required in the
marketplace or by the Rating Agencies in connection with any Secondary Market
Transactions, including, without limitation, to:

 

84

 

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

 

(ii)                                  provide opinions of counsel, which may be
relied upon by Lender, the Rating Agencies and their respective counsel, agents
and representatives, as to non-consolidation, fraudulent conveyance, and true
sale or any other opinion customary in Secondary Market Transactions or
required by the Rating Agencies with respect to the Property and Borrower and
Affiliates, which counsel and opinions shall be reasonably satisfactory to
Lender and satisfactory to the Rating Agencies;

 

(iii)                               provide updated, as of the closing date of the
Secondary Market Transaction if such closing date is more than six (6) months
after the date hereof, representations and warranties made in the Loan
Documents and such additional representations and warranties as the Rating
Agencies may reasonably require, in each case, with such modifications as are
necessary to make such representations and warranties true in all material
respects; and

 

(iv)                              execute amendments to the Loan Documents
and Borrower’s organizational documents reasonably requested by Lender;
provided, however, that Borrower shall not be required to modify or amend (A) any
Loan Document if such modification or amendment would change the interest rate,
the stated maturity or the amortization of principal as set forth herein or in
the Note, or (B) any Loan Document or organizational document of Borrower
if in the reasonable judgment of Borrower the same would modify or amend any
other material economic term of the Loan, increase Borrower’s obligations or
liabilities thereunder in any material respect, adversely effect any right of
Borrower under the Loan Documents in any material respect or have a material
adverse effect on the manner in which Borrower operates its business.

 

(c)                                  Borrower covenants and agrees that, upon
Lender’s request, Borrower shall deliver one or more new component notes to
replace the original note or modify the original note to reflect multiple
components of the Loan or create one or more new mezzanine loans (including
amending Borrower’s organizational structure to provide for one or more new
mezzanine borrowers) (each a “Resizing Event”).  Lender agrees that such new notes, modified
notes or mezzanine notes shall immediately after the Resizing Event have the
same initial weighted average interest rate as the original note immediately
prior to such Resizing Event.  Such new
notes, modified notes or mezzanine notes may allocate principal and interest
rates of the Loan between or among such new components and/or mezzanine loans
in a manner specified by Lender in its sole discretion; provided that, unless
an Event of Default has occurred and is then continuing, all prepayments with
respect to such new notes or modified note or mezzanine notes shall be applied
on a pro rata basis.  In connection with
any Resizing Event, Borrower covenants and agrees to modify and amend the Cash
Management Agreement, and execute 

 

85

 

amendments to the Loan
Documents and Borrower’s organizational documents reasonably requested by
Lender; provided, however, that Borrower shall not be required to modify or
amend any Loan Document or organizational document of Borrower if in the
reasonable judgment of Borrower the same would increase Borrower’s monetary
obligations, modify or amend any other material economic term of the Loan,
increase Borrower’s other obligations or liabilities thereunder in any material
respect, adversely affect any right of Borrower under the Loan Documents in any
material respect or have a material adverse effect on the manner in which
Borrower operates its business.

 

(d)                                 Notwithstanding anything herein or in any
other Loan Document to the contrary, (i) all reasonable out-of-pocket
costs and expenses actually incurred by Borrower or its Affiliates in
connection with Borrower’s complying with requests made under this Section 9.1
shall be paid by Lender and (ii) Lender shall pay all other costs and
expenses incurred by any other parties in connection with any action
contemplated by this Section 9.1.

 

(e)                                  Nothing contained in this Agreement or in
the other Loan Documents shall restrict Lender from requesting that Borrower
deliver to Lender information regarding tenants or customers at the Property
and the impact such tenants or customers have or may have on the Gross Revenue
of the Property; provided, however, that Borrower shall not be required to
deliver specific information concerning the specific pricing structure
applicable to any tenant or customer.

 

Section 9.2                                   Securitization Indemnification.  (a) Borrower
understands that information provided to Lender by Borrower and its agents,
counsel and representatives may be included in disclosure documents in
connection with the Securitization, including, without limitation, an offering
circular, a prospectus, prospectus supplement, private placement memorandum or
other offering document (each, an “Disclosure Document”) and may also be
included in filings with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the “Securities Act”), or the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”),
and may be made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization.

 

(b)                                 Borrower shall provide in connection with
each of (i) a preliminary and a final private placement memorandum or (ii) a
preliminary and final prospectus or prospectus supplement, as applicable, an
agreement (the entering into of which shall be at no cost to Borrower) (A) certifying
that Borrower has examined those portions of such Disclosure Documents
specified by Lender for Borrower’s review pertaining to Borrower, Borrower’s
Affiliates, Manager or the Loan and that each such Disclosure Document, as it
relates to sections of the Disclosure Documents specified with reasonable
specificity by Lender relating to Borrower, Borrower’s Affiliates, the
Property, Manager and any material aspects of the Loan, does not (except to the
extent specified by Borrower if Borrower does not agree with the statements
therein) contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading, (B) indemnifying
Lender (and for purposes of this Section 9.2, Lender hereunder
shall include its officers and directors), the Affiliate of Lender that has
filed the registration statement relating to the Securitization (the “Registration
Statement”), each of its directors, each of its officers who have signed
the Registration Statement and each Person that 

 

86

 

controls the Affiliate
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act (collectively, the “Lender Group”), and Lender, and
any other placement agent or underwriter with respect to the Securitization,
each of their respective directors and each Person who controls Lender or any
other placement agent or underwriter within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act (collectively, the “Underwriter
Group”) for any losses, claims, damages or liabilities, including
reasonable attorneys’ fees and disbursements, other than those arising out of
the gross negligence, willful misconduct or bad faith of any of the foregoing
proposed indemnitees (collectively, the “Liabilities”) to which Lender,
the Lender Group or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement of any material
fact contained in such sections or arise out of or are based upon the omission
to state therein a material fact required to be stated in such sections or
necessary in order to make the statements in such sections, in light of the
circumstances under which they were made, not misleading (except that (x) Borrower’s
obligation to indemnify in respect of any information contained in such
sections that is derived in part from information provided by Borrower and in
part from information provided by others unrelated to or not employed by
Borrower shall be limited to any untrue statement or omission of material fact
therein known to Borrower that results from an error in any information
provided (or which should have been provided) by Borrower which Borrower has
been given the opportunity to examine and reasonably and promptly approve
(Borrower hereby confirms that it has reviewed and approved each of the
appraisals, engineering, environmental and asbestos reports prepared by third
parties in connection with the Loan) and (y) Borrower shall have no
responsibility for the failure of any member of the Underwriting Group to
accurately transcribe written information supplied by Borrower or the refusal
of any member of the Underwriting Group to include any written information
supplied by Borrower after an explicit direction from Borrower to do so) and (C) agreeing
to reimburse Lender, the Lender Group and/or the Underwriter Group for any
legal or other expenses reasonably incurred by Lender, the Lender Group and the
Underwriter Group in connection with investigating or defending the Liabilities
to the extent that such legal or other expenses are incurred in connection with
matters for which Borrower has agreed to indemnify the Underwriter Group
herein; provided, however, that Borrower will be liable in any such case under
clauses (B) or (C) above only to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender by or on behalf of Borrower in connection with
the preparation of the Disclosure Document or in connection with the
underwriting or closing of the Loan, including, without limitation, financial
statements of Borrower, operating statements and major customer lists with respect
to the Property and not subsequently retracted or modified in whole or in part
so as to eliminate the misstatement or omission in question prior to any
Securitization.  This indemnity agreement
will be in addition to any liability which Borrower may otherwise have.

 

(c)                                  Intentionally Omitted.

 

(d)                                 Promptly after receipt by an indemnified
party under this Section 9.2 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 9.2, notify
the indemnifying party in writing of the commencement thereof, but the omission
to so notify the indemnifying party will not relieve the indemnifying party
from any liability which the 

 

87

 

indemnifying party may
have to any indemnified party hereunder except to the extent that failure to
notify causes prejudice to the indemnifying party.  In the event that any action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled, jointly with any
other indemnifying party, to participate therein and, to the extent that it (or
they) may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified
party.  After notice from the
indemnifying party to such indemnified party under this Section 9.2,
such indemnified party shall pay for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there are any legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
at the cost of the indemnifying party. 
The indemnifying party shall not be liable for the expenses of more than
one separate counsel unless an indemnified party shall have reasonably
concluded that there may be legal defenses available to it that are different from
or additional to those available to another indemnified party.

 

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

 

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

 

88

 

X.                                    DEFAULTS

 

Section 10.1                            Event of Default.  (a) Each
of the following events shall constitute an event of default hereunder (an “Event
of Default”):

 

(i)                                     if (A) the payment due on the
Maturity Date is not paid when due, (B) if any monthly installment of interest
due under the Note (other than the payment of interest and principal due on the
Maturity Date) is not paid on or prior to the fifth (5th) calendar day of the month in which the applicable
Monthly Payment Date occurs (or, if such fifth (5th)
calendar day is not a Business Day, then on or prior to the Business Day
immediately preceding such fifth (5th)
calendar day), provided that it shall not be an Event of Default if a monthly
installment of interest is not paid when due if there are sufficient sums on
deposit in the Debt Service Account (as defined in the Cash Management
Agreement) for payment of such amounts and Lender’s access to such funds has
not been inhibited or prevented in any manner whatsoever due to circumstances
or events which are directly or indirectly caused by or otherwise relate to any
actions or omissions of Borrower or any of its Affiliates, or (C) any
other portion of the Debt is not paid when due and such non-payment continues
for five (5) days following notice to Borrower that the same is due and
payable;

 

(ii)                                  if any of the Taxes or Other Charges are
not paid when due, provided that it shall not be an Event of Default if Taxes
are not paid when due if there are sufficient sums on deposit in the Tax
Account (as defined in the Cash Management Agreement) for payment of such
amounts and Lender’s access to such funds has not been inhibited or prevented
in any manner whatsoever due to circumstances or events which are directly or
indirectly caused by or otherwise relate to any actions or omissions of
Borrower or any of its Affiliates;

 

(iii)                               if the Policies are not kept in full force and effect;

 

(iv)                              if Borrower breaches or permits or
suffers a breach of Section 4.2.1;

 

(v)                                 if any representation or warranty made by
Borrower herein or in any other Loan Document, or in any material report,
certificate, financial statement or other instrument, agreement or document
furnished to Lender shall have been false or misleading in any material respect
as of the date the representation or warranty was made and, with respect to any
such breach which is not the subject of any other subsection of this Section 10.1(a) and
which is capable of being cured, Borrower fails to remedy such condition within
ten (10) days following notice to Borrower from Lender, in the case of any
such breach which can be cured by the payment of a sum of money, or within
thirty (30) days following notice from Lender in the case of any other such
breach; provided, however, that if such non-monetary breach
is susceptible of cure but cannot reasonably be cured within such 30-day period
and provided further that Borrower shall have commenced to cure such breach
within such 30-day period and thereafter diligently and expeditiously proceeds
to cure the same, such 30-day period shall be extended for such time as is
reasonably necessary for Borrower in the exercise of due diligence to cure such

 

89

 

breach, such additional period not to exceed sixty (60) days plus time
permitted for Excusable Delays;

 

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

 

(vii)                           if a receiver, liquidator or trustee shall be
appointed for Borrower, any SPC Party or Guarantor or if Borrower, any SPC
Party or Guarantor shall be adjudicated a bankrupt or insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Borrower, any SPC Party or
Guarantor, or if any proceeding for the dissolution or liquidation of Borrower,
any SPC Party or Guarantor shall be instituted; provided, however,
if such appointment, adjudication, petition or proceeding was involuntary and
not consented to by Borrower, any SPC Party or Guarantor, upon the same not
being discharged, stayed or dismissed within ninety (90) days;

 

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

 

(ix)                                if any of the assumptions contained in (A) the
Insolvency Opinion, (B) any other non-consolidation opinion delivered to
Lender in connection with the Loan or (C) any other non-consolidation opinion
delivered subsequent to the closing of the Loan is or shall become untrue in
any material respect;

 

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

 

(xi)                                if Borrower breaches any of the negative
covenants contained in Section 4.2.12 hereof,

 

(xii)                             intentionally omitted;

 

(xiii)                          intentionally omitted;

 

(xiv)                         if Guarantor breaches in any material respect any
covenant, warranty or representation contained in any guaranty executed and
delivered by Guarantor in connection with the Loan and such breach is not cured
to Lender’s satisfaction within fifteen (15) days of notice to Guarantor from
Lender;

 

(xv)                            intentionally omitted;

 

(xvi)                         if at any time during the term of the Loan an
Alteration Guaranty is delivered pursuant to the terms of this Agreement and
the guarantor thereunder (other than Guarantor) fails to maintain an Investment
Grade Rating (a “Downgrade Event”) and Borrower fails to deliver (A) a
replacement Alteration Guaranty in an amount equal to the amount of the “Guaranteed
Obligations” under such Alteration Guaranty from 

 

90

 

Guarantor or a guarantor with an Investment Grade Rating or (B) Alteration
Security within ten (10) Business Days of the occurrence of the applicable
Downgrade Event;

 

(xvii)                      intentionally omitted;

 

(xviii)                   if Borrower shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement or any other Loan Document not
specified in subsections (i) to (xvii) above, for ten (10) days after
notice to Borrower from Lender, in the case of any Default which can be cured
by the payment of a sum of money, or for thirty (30) days after notice from
Lender in the case of any other Default; provided, however,
that if such non-monetary Default is susceptible of cure but cannot reasonably
be cured within such 30-day period and provided further that Borrower shall
have commenced to cure such Default within such 30-day period and thereafter
diligently and expeditiously proceeds to cure the same, such 30-day period
shall be extended for such time as is reasonably necessary for Borrower in the
exercise of due diligence to cure such Default, such additional period not to
exceed sixty (60) days plus time permitted for Excusable Delays; or

 

(xix)                           if any other such event shall occur or condition shall
exist, if the effect of such event or condition is to accelerate the maturity
of any portion of the Debt or to permit Lender to accelerate the maturity of
all or any portion of the Debt.

 

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

 

Section 10.2                            Remedies.  (a) Upon
the occurrence and during the continuance of an Event of Default, all or any
one or more of the rights, powers, privileges and other remedies available to
Lender against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity
may be exercised by Lender at any time and from time to time, whether or not
all or any of the Debt shall be declared due and payable, and whether or not
Lender shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to the Property.  Any such
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its sole discretion, to the fullest
extent permitted by law, without impairing or otherwise affecting the other
rights and remedies of 

 

91

 

Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.  Without limiting the generality of the
foregoing, if an Event of Default is continuing (i) Lender is not subject
to any “one action” or “election of remedies” law or rule, and (ii) all
liens and other rights, remedies or privileges provided to Lender shall remain
in full force and effect until Lender has exhausted all of its remedies against
the Property and the Mortgage has been foreclosed, sold and/or otherwise realized
upon in satisfaction of the Debt or the Debt has been paid in full.

 

(b)                                 Upon the occurrence and during the
continuance of an Event of Default, Lender shall have the right from time to
time to partially foreclose the Mortgage in any manner and for any amounts
secured by the Mortgage then due and payable as determined by Lender in its
sole discretion including, without limitation, the following circumstances: (i) in
the event Borrower defaults beyond any applicable grace period in the payment
of one or more scheduled payments of principal and interest, Lender may
foreclose the Mortgage to recover such delinquent payments, or (ii) in the
event Lender elects to accelerate less than the entire outstanding principal
balance of the Loan, Lender may foreclose the Mortgage to recover so much of
the principal balance of the Loan as Lender may accelerate and such other sums
secured by the Mortgage as Lender may elect. 
Notwithstanding one or more partial foreclosures, the Property shall
remain subject to the Mortgage to secure payment of sums secured by the
Mortgage and not previously recovered.

 

(c)                                  Lender shall have the right from time to
time to sever the Note and the other Loan Documents into one or more separate
notes, mortgages and other security documents (the “Severed Loan Documents”)
in such denominations as Lender shall determine in its sole discretion for
purposes of evidencing and enforcing its rights and remedies provided
hereunder.  Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order
to effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. 
Borrower hereby absolutely and irrevocably appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make
and execute all documents necessary or desirable to effect the aforesaid
severance, Borrower ratifying all that its said attorney shall do by virtue
thereof; provided, however, Lender shall not make or execute any such documents
under such power until three (3) days after notice has been given to
Borrower by Lender of Lender’s intent to exercise its rights under such
power.  Borrower shall not be obligated
to pay any costs or expenses incurred in connection with the preparation,
execution, recording or filing of the Severed Loan Documents.  The Severed Loan Documents shall contain only
provisions which are substantially similar to those contained in the Loan
Documents (except to reflect reductions in principal) and which do not have any
material adverse effect on Borrower’s rights or obligations thereunder in any
material respect or increase Borrower’s monetary obligations thereunder in any
material respect or the operation of its business and any representations and
warranties contained in the Severed Loan Documents will be given by Borrower
only as of the date hereof.

 

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

 

92

 

however, that Borrower
shall not be liable for the misapplication of any amounts recovered and applied
by Lender in its sole discretion.

 

Section 10.3                            Right to Cure Defaults. 
Upon the occurrence and during the continuance of an Event of Default,
Lender may, but without any obligation to do so and without notice to or demand
on Borrower and without releasing Borrower from any obligation hereunder or
being deemed to have cured any Event of Default hereunder, make, do or perform
any obligation of Borrower hereunder in such manner and to such extent as
Lender may deem necessary in respect of such Event of Default.  Lender is authorized to enter upon the
Property for such purposes, or appear in, defend, or bring any action or
proceeding to protect its interest in the Property for such purposes, and the
cost and expense thereof (including reasonable attorneys’ fees to the extent
permitted by law), with interest as provided in this Section 10.3,
shall constitute a portion of the Debt and shall be due and payable to Lender
upon demand.  All such costs and expenses
incurred by Lender in remedying such Event of Default or such failed payment or
act or in appearing in, defending, or bringing any action or proceeding shall
bear interest at the Default Rate, for the period after such cost or expense
was incurred into the date of payment to Lender.  All such costs and expenses incurred by
Lender together with interest thereon calculated at the Default Rate shall be
deemed to constitute a portion of the Debt and be secured by the liens, claims
and security interests provided to Lender under the Loan Documents and shall be
immediately due and payable upon demand by Lender therefore.

 

Section 10.4                            Remedies Cumulative. 
The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise.  Lender’s rights, powers and remedies may be
pursued singly, concurrently or otherwise, at such time and in such order as
Lender may determine in Lender’s sole discretion.  No delay or omission to exercise any remedy,
right or power accruing upon an Event of Default shall impair any such remedy,
right or power or shall be construed as a waiver thereof, but any such remedy,
right or power may be exercised from time to time and as often as may be deemed
expedient.  A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.

 

XI.                                MISCELLANEOUS

 

Section 11.1                            Successors and Assigns. 
All covenants, promises and agreements in this Agreement shall inure to
the benefit of the legal representatives, successors and assigns of the parties
hereto.

 

Section 11.2                            Lender’s Discretion. 
Whenever pursuant to this Agreement Lender exercises any right given to
it to approve or disapprove, or any arrangement or term is to be satisfactory
to Lender, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory shall (except as is
otherwise specifically herein provided) be in the sole discretion of Lender
(which discretion shall be exercised in good faith) and shall be final and
conclusive.  Prior to a Securitization, whenever
pursuant to this Agreement the Rating Agencies are given any right to approve
or disapprove, or any arrangement or term is to be satisfactory to the Rating
Agencies, the decision of Lender to 

 

93

 

approve or disapprove or
to decide whether arrangements or terms are satisfactory or not satisfactory,
based upon Lender’s determination of Rating Agency criteria, shall be
substituted therefore.

 

Section 11.3                            Governing Law.  (A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE
LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND
THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE
STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP
TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL
RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE
OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES
OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,
PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT
HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS (OTHER THAN WITH RESPECT TO
LIENS AND SECURITY INTERESTS IN PROPERTY WHOSE PERFECTION AND PRIORITY IS
COVERED BY ARTICLE 9 OF THE UCC (EXCLUDING FIXTURES AND INCLUDING, WITHOUT
LIMITATION, THE ACCOUNTS) WHICH SHALL BE GOVERNED BY THE LAW OF THE
JURISDICTION APPLICABLE THERETO IN ACCORDANCE WITH SECTIONS 9-301 THROUGH 9-307
OF THE UCC AS IN EFFECT IN THE STATE OF NEW YORK) SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED,
IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH
STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY
AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER.  TO THE FULLEST
EXTENT PERMITTED BY LAW, BORROWER AND LENDER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION
GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS
AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW EXCEPT AS SPECIFICALLY SET FORTH ABOVE.

 

(B)                               ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT
IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 

 

94

 

OF THE
NEW YORK GENERAL OBLIGATIONS LAW AND LENDER AND BORROWER EACH WAIVES ANY OBJECTIONS
WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON
CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER AND LENDER
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING.  BORROWER DOES
HEREBY DESIGNATE AND APPOINT:

 

CT CORPORATION

111 EIGHTH AVENUE, 13TH FLOOR

NEW YORK, NEW YORK 10011

 

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

 

Section 11.4                            Modification, Waiver in Writing. 
No modification, amendment, extension, discharge, termination or waiver
of any provision of this Agreement or of any other Loan Document, nor consent
to any departure by Borrower therefrom, shall in any event be effective unless
the same shall be in a writing signed by the party against whom enforcement is
sought, and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. 
Except as otherwise expressly provided herein, no notice to, or demand
on Borrower, shall entitle Borrower to any other or future notice or demand in
the same, similar or other circumstances. 
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY
THE PARTIES HERETO CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE
PARTIES HERETO TO BE ENFORCEABLE.

 

Section 11.5                            Delay Not a Waiver. 
Neither any failure nor any delay on the part of Lender in insisting
upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder, or under any other
Loan Document, 

 

95

 

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

 

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

 

If to Lender:                                                                               German American
Capital Corporation

60 Wall Street, 10th Floor

New York, New York 10005

Attention: Jeff Paige and General Counsel

Telecopy No.: (212) 797-4489

Confirmation No.: (212) 250-2500

 

and                                                                                                                            JPMorgan Chase
Bank, N.A.

270 Park Avenue

New York, New York 10017-2014

Attention: Thomas M. Cosenza

Facsimile No.: (212) 834-6592

 

with a copy to:                                                                 JPMorgan Chase
Bank, N.A.

c/o ARCap Servicing, Inc.

5221 N. O’Connor Boulevard, Suite 600

Irving, Texas 75039

Attention: Clyde Greehouse - Director of Administration

Facsimile No.: (972) 868-5493

 

96

 

with a copy to:                                                                 Cadwalader,
Wickersham & Taft LLP

One World Financial Center

New York, New York 10281

Attention: Steven M. Herman, Esq.

Facsimile No.: (212) 504-6666

 

If to Borrower:                                                                   c/o AmeriCold
Logistics, LLC

10 Glenlake Parkway, Suite 800

Atlanta, Georgia 30328

Attention: Chief Financial Officer

Facsimile No: (678) 441-6852

 

with a copy to:                                                                 c/o Crescent
Real Estate Equities

777 Main Street, Suite 2100

Fort Worth, Texas 76102

Attention: David Dean, Executive Vice President — Law

Facsimile No.: (817) 321-2929

 

with a copy to:                                                                 c/o Yucaipa
American Alliance Fund I, LP

9130 West Sunset Boulevard

Los Angeles, California 90069

Attention: Legal Department

Facsimile No.: (310) 789-1791

 

with a copy to:                                                                 c/o Yucaipa
Corporate Initiatives Fund I, LP

9130 West Sunset Boulevard

Los Angeles, California 90069

Attention: Legal Department

Facsimile No.: (310) 789-1791

 

with a copy to:                                                                 c/o Vornado
Realty Trust

888 Seventh Avenue

New York, New York 10019

Attention: Chief Financial Officer

Facsimile No.: (201) 843-2198

 

with a copy to:                                                                 Sullivan &
Cromwell LLP

125 Broad Street

New York, New York 10004

Attention: Arthur S. Adler, Esq.

Facsimile No.: (212) 558-3588

 

Section 11.7                            Trial by Jury.  BORROWER AND LENDER EACH HEREBY AGREES NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM
OR 

 

97

 

OTHER ACTION ARISING IN
CONNECTION THEREWITH.  THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.  EACH PARTY IS HEREBY AUTHORIZED TO FILE A
COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.

 

Section 11.8                            Headings. 
The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.

 

Section 11.9                            Severability. 
Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

Section 11.10                     Preferences. 
Lender shall have the continuing and exclusive right to apply or reverse
and reapply any and all payments by Borrower to any portion of the obligations
of Borrower hereunder.  To the extent
Borrower makes a payment or payments to Lender, which payment or proceeds or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or proceeds received, the
obligations hereunder or part thereof intended to be satisfied shall be revived
and continue in, full force and effect, as if such payment or proceeds had not
been received by Lender.

 

Section 11.11                     Waiver of Notice. 
Borrower shall not be entitled to any notices of any nature whatsoever
from Lender except with respect to matters for which this Agreement or the
other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice.  Borrower hereby
expressly waives the right to receive any notice from Lender with respect to
any matter for which this Agreement or the other Loan Documents do not
specifically and expressly provide for the giving of notice by Lender to
Borrower.

 

Section 11.12                     Remedies of Borrower. 
In the event that a claim or adjudication is made that Lender or its
agents have acted unreasonably or unreasonably delayed acting in any case
where, by law or under this Agreement or the other Loan Documents, Lender or
such agent, as the case may be, has an obligation to act reasonably or
promptly, neither Lender nor its agents shall be liable for any monetary
damages, and Borrower’s sole remedy shall be limited to commencing an action
seeking injunctive relief or declaratory judgment.  Any action or proceeding to determine whether
Lender has acted reasonably shall be determined by an action seeking
declaratory judgment.

 

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Section 11.13                     Expenses; Indemnity.  (a) Borrower
shall pay or, if Borrower fails to pay, reimburse Lender upon receipt of notice
from Lender, for all reasonable and customary out-of-pocket costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred by Lender in
connection with (i) Borrower’s ongoing performance of and compliance with
Borrower’s agreements and covenants contained in this Agreement and the other
Loan Documents on its part to be performed or complied with after the date
hereof, including, without limitation, confirming compliance with environmental
and insurance requirements; (ii) Lender’s ongoing performance of and
compliance with all agreements and covenants contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
date hereof; (iii) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement and the other Loan Documents and any other documents or matters
requested by Borrower; (iv) the filing and recording fees and expenses,
title insurance and reasonable fees and expenses of counsel for providing to
Lender all required legal opinions, and other similar expenses incurred, in
creating and perfecting the Liens in favor of Lender pursuant to this Agreement
and the other Loan Documents; (v) enforcing or preserving any rights, in
response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation or otherwise upon the occurrence and during the
continuance of an Event of Default, in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents, the Property, or any other
security given for the Loan; and (vi) enforcing any obligations of or
collecting any payments due from Borrower under this Agreement, the other Loan
Documents or with respect to the Property or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement in
the nature of a “work-out” or of any insolvency or bankruptcy proceedings;
provided, however, that Borrower shall not be liable for the payment of any
such costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, bad faith, fraud or willful misconduct of
Lender.  Any costs due and payable to
Lender which are not paid by Borrower within ten (10) days after written
demand therefore may be paid to Lender pursuant to the Cash Management
Agreement.

 

(b)                                 Borrower shall indemnify, defend and hold
harmless Lender and its officers, directors, agents, employees (and the
successors and assigns of the foregoing) (the “Lender Indemnitees”) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for the Lender Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Lender Indemnitees shall be designated a party thereto),
that may be imposed on, incurred by, or asserted against the Lender Indemnitees
in any manner relating to or arising out of (i) any breach by Borrower of
its obligations under, or any material misrepresentation by Borrower contained
in, this Agreement or the other Loan Documents, or (ii) the use or
intended use of the proceeds of the Loan (collectively, the “Indemnified
Liabilities”) provided, however, that Borrower shall not have any
obligation to the Lender Indemnitees hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, bad
faith, fraud or willful misconduct of the Lender Indemnitees.  To the extent that the undertaking to
indemnify, defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable 

 

99

 

law to the payment and
satisfaction of all Indemnified Liabilities incurred by any Lender Indemnitees.

 

Section 11.14                     Schedules Incorporated. 
The Schedules annexed hereto are hereby incorporated herein as a part of
this Agreement with the same effect as if set forth in the body hereof.

 

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

 

Section 11.16                     No Joint Venture or Partnership;
No Third Party Beneficiaries.  (a) Borrower
and Lender intend that the relationships created hereunder and under the other
Loan Documents be solely that of borrower and lender.  Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Borrower and Lender nor to grant Lender any interest in
the Property other than that of mortgagee, beneficiary or lender.

 

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

 

Section 11.17                     Publicity. 
All news releases, publicity or advertising (other than any of the
foregoing effectuated in connection with a Securitization of all or any portion
of the Loan by Lender) by each of Lender or Borrower or their Affiliates
through any media intended to reach the general public which refers to the Loan
Documents or the financing evidenced by the Loan Documents, to Lender, Borrower
or any of their Affiliates shall be subject to the prior approval of Lender and
(except in connection with a Securitization of all or any portion of the Loan)
Borrower (except that no Lender approval shall be required for Borrower’s or
its Affiliate’s press release, if any, in connection with the execution and
delivery of this Agreement), which approval, in any case, shall not be
unreasonably withheld, conditioned or delayed.

 

100

 

Section 11.18                     Waiver of Marshalling of Assets. 
To the fullest extent permitted by law, Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower’s partners and others with interests in Borrower, and of the
Property, and shall not assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Property for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Property in preference to
every other claimant whatsoever.

 

Section 11.19                     Waiver of
Offsets/Defenses/Counterclaims.  Borrower
hereby waives the right to assert a counterclaim, other than a compulsory
counterclaim, in any action or proceeding brought against it by Lender or its
agents or otherwise to offset any obligations to make the payments required by
the Loan Documents.  No failure by Lender
to perform any of its obligations hereunder shall be a valid defense to, or
result in any offset against, any payments which Borrower is obligated to make
under any of the Loan Documents.

 

Section 11.20                     Conflict; Construction of
Documents; Reliance.  In the event of any conflict between the
provisions of this Agreement and any of the other Loan Documents, the
provisions of this Agreement shall control. 
The parties hereto acknowledge that they were represented by competent
counsel in connection with the negotiation, drafting and execution of the Loan
Documents and that such Loan Documents shall not be subject to the principle of
construing their meaning against the party which drafted same.  Borrower acknowledges that, with respect to
the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender.  Lender shall not be
subject to any limitation whatsoever in the exercise of any rights or remedies
available to it under any of the Loan Documents or any other agreements or
instruments which govern the Loan by virtue of the ownership by it or any
parent, subsidiary or Affiliate of Lender of any equity interest any of them
may acquire in Borrower, and Borrower hereby irrevocably waives the right to
raise any defense or take any action on the basis of the foregoing with respect
to Lender’s exercise of any such rights or remedies.  Borrower acknowledges that Lender engages in
the business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.

 

Section 11.21                     Brokers and Financial Advisors. 
Borrower and Lender each hereby represent that it has not dealt
independently of the other with any financial advisors, brokers, underwriters,
placement agents, agents or finders in connection with the transactions
contemplated by this Agreement.  Each
party shall indemnify, defend and hold the other party harmless from and
against any and all claims, liabilities, costs and expenses of any kind
(including reasonable attorneys’ fees and expenses) in any way relating to or
arising from a claim by any Person that such Person acted on behalf of such
party in connection with the transactions contemplated herein.  The provisions of this Section 11.21
shall survive the expiration and termination of this Agreement and the payment
of the Debt.

 

Section 11.22                     Exculpation. 
Subject to the qualifications below, Lender shall not enforce the
liability and obligation of Borrower to perform and observe the obligations
contained 

 

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in the Note, this
Agreement, the Mortgage or the other Loan Documents by any action or proceeding
wherein a money judgment shall be sought against Borrower, except that Lender
may bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
its interest under the Note, this Agreement, the Mortgage and the other Loan
Documents, or in the Property, the Rents, or any other collateral given to
Lender pursuant to the Loan Documents; provided, however,
that, except as specifically provided herein, any judgment in any such action
or proceeding shall be enforceable against Borrower only to the extent of
Borrower’s interest in the Property, in the Rents and in any other collateral
given to Lender, and Lender, by accepting the Note, this Agreement, the
Mortgage and the other Loan Documents, shall not sue for, seek or demand any
deficiency judgment against Borrower in any such action or proceeding under or
by reason of or under or in connection with the Note, this Agreement, the
Mortgage or the other Loan Documents. 
The provisions of this Section shall not, however, (a) constitute
a waiver, release or impairment of any obligation evidenced or secured by any
of the Loan Documents; (b) impair the right of Lender to name Borrower as
a party defendant in any action or suit for foreclosure and sale under the
Mortgage; (c) affect the validity or enforceability of any guaranty made
in connection with the Loan or any of the rights and remedies of Lender
thereunder; (d) impair the right of Lender to obtain the appointment of a
receiver; (e) impair the enforcement of the Assignment of Leases; (f) constitute
a prohibition against Lender to seek a deficiency judgment against Borrower in
order to fully realize on any security given by Borrower in connection with the
Loan or to commence any other appropriate action or proceeding in order for
Lender to exercise its remedies against such security which, in any event,
shall only be enforced against such security; or (g) constitute a waiver
of the right of Lender to enforce the liability and obligation of Borrower, by
money judgment or otherwise, to the extent of any loss, damage, cost, expense,
liability, claim or other obligation incurred by Lender (including attorneys’
fees and costs reasonably incurred) arising out of or in connection with any of
the following:

 

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

 

(ii)                                  the gross negligence or willful
misconduct of Borrower;

 

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

 

(iv)                              the removal or disposal of any portion of
the Property after an Event of Default other than in accordance with the terms
of the Loan Documents (including, without limitation, the Cash Management
Agreement);

 

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

 

102

 

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

 

(vii)                           Borrower’s indemnification of Lender set forth in Section 9.2
hereof,

 

(viii)                        intentionally omitted; and

 

(ix)                                intentionally omitted.

 

Notwithstanding anything to
the contrary in this Agreement, the Note or any of the Loan Documents, (A) Lender
shall not be deemed to have waived any right which Lender may have under Section 506(a),
506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a
claim for the full amount of the Debt or to require that all collateral shall
continue to secure all of the Debt owing to Lender in accordance with the Loan
Documents, and (B) the Debt shall be fully recourse to Borrower in the
event that: (i) Borrower fails to obtain Lender’s prior consent to any
subordinate financing or other voluntary Lien encumbering the Property; (ii) Borrower
fails to obtain Lender’s prior consent to any assignment, transfer, or
conveyance of the Property or any interest therein as required by the Mortgage
or this Agreement; (iii) Borrower files a voluntary petition under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (iv) an
Affiliate, officer, director, trustee, or representative which controls,
directly or indirectly, Borrower files, or joins in the filing of, an
involuntary petition against Borrower under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law, or solicits or causes to be
solicited petitioning creditors for any involuntary petition against Borrower
from any Person; (v) intentionally omitted; (vi) Borrower files an
answer consenting to or otherwise acquiescing in or joining in any involuntary
petition filed against it, by any other Person under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law, or solicits or causes to
be solicited petitioning creditors for any involuntary petition from any Person;
(vii) any Affiliate, officer, director, trustee, or representative which
controls Borrower consents to or acquiesces in or joins in an application for
the appointment of a custodian, receiver, trustee, or examiner for Borrower or
any portion of the Property; (viii) Borrower makes an assignment for the
benefit of creditors, or admits, in writing or in any legal proceeding, its
insolvency or inability to pay its debts as they become due or (ix) Borrower,
any SPC Party or any Borrower GP breaches any of the representations,
warranties or covenants applicable to it under Section 3.1.24.

 

Section 11.23                     Prior Agreements. 
This Agreement and the other Loan Documents contain the entire agreement
of the parties hereto and thereto in respect of the transactions contemplated
hereby and thereby, and all prior agreements among or between such parties,
whether oral or written, are superseded by the terms of this Agreement and the
other Loan Documents.

 

Section 11.24                     Servicer.  (a) At
the option of Lender, the Loan may be serviced by a servicer (the “Servicer”)
selected by Lender and Lender may delegate all or any portion of 

 

103

 

its responsibilities
under this Agreement and the other Loan Documents to the Servicer pursuant to a
servicing agreement (the “Servicing Agreement”) between Lender and
Servicer.  Borrower shall not be
responsible for any set-up fees or any other initial costs relating to or
arising under the Servicing Agreement, or for the payment of any monthly
servicing fee due to the Servicer under the Servicing Agreement.  Servicer shall, however, be entitled to
reimbursement of costs and expenses as and to the same extent (but without
duplication) as Lender is entitled thereto under the applicable provisions of
this Agreement and the other Loan Documents. 
In addition, subject to the express provisions contained elsewhere in
this Agreement (including provisions specifying either an amount, or that no
amount, should be payable), Borrower shall be responsible for the payment of
any customary and reasonable servicing fees charged in connection with any
requests made by Borrower during the term of the Loan, including, but not
limited to, approvals, consents, amendments or waivers contemplated by this
Agreement or otherwise.

 

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

 

(c)                                  Provided Borrower shall have been given
notice of Servicer’s address by Lender, Borrower shall deliver to Servicer
duplicate originals of all notices and other instruments which Borrower may or
shall be required to deliver to Lender pursuant to this Agreement, the Note and
the other Loan Documents (and no delivery of such notices or other instruments
by Borrower shall be of any force or effect unless delivered to Lender and
Servicer as provided above).

 

(d)                                 Notwithstanding anything to the contrary
contained herein or in any other Loan Documents, unless the Loan is being
transferred to a “special servicer” or is then being “specially serviced” (in
which case Borrower may be required to deal with one primary Servicer and one “special
servicer”), Borrower shall be required to deal with only one Servicer or
Co-Lender, in each case acting on behalf of all Persons comprising Lender (the “primary
Servicer”), with respect to any consents, approvals or notices required or
permitted from, or to, Servicer or Lender pursuant to the Loan Documents (it
being understood that such primary Servicer or Co-Lender may need to consult
with other Persons that hold a portion of Lender’s rights and obligations under
the Loan or with the Rating Agencies in connection with any such consent,
approval or notice and that a so-called “special servicer” may act as such
primary Servicer).  Lender may replace
such primary Servicer with another primary Servicer at any time in Lender’s
sole discretion.  As of the date hereof,
Bank of America, N.A., in its capacity as servicer under a Servicing Agreement
with Lender, is hereby designated as the primary Servicer and unless and until
Borrower is notified by all Persons comprising Lender of a new primary
Servicer, Borrower shall be permitted to rely conclusively and irrevocably on
such designation.

 

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

 

Section 11.26                     Creation of Security Interest. 
Notwithstanding any other provision set forth in this Agreement, the
Note, the Mortgage or any of the other Loan 

 

104

 

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

 

Section 11.27                     Assignments and Participations.  (a) The
Lender may assign to one or more Persons other than (as long as no Event of
Default has occurred and is continuing) any Excluded Lender Transferee all or a
portion of its rights and obligations under this Loan Agreement (it being
agreed that the foregoing shall not apply to the holder of any Securities
issued in a pooled-loan Securitization).

 

(b)                                 Lender may sell participations to one or
more Persons other than (as long as no Event of Default has occurred and is
continuing) any Excluded Lender Transferee in or to all or a portion of its
rights and obligations under this Loan Agreement (it being agreed that the
foregoing shall not apply to the holder of any Securities issued in a
pooled-loan Securitization); provided, however, that (i) Lender’s
obligations under this Loan Agreement shall remain unchanged, (ii) except
as otherwise provided in Section 2.5, Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) Lender shall remain the holder of any Note for all
purposes of this Loan Agreement and (iv) Borrower shall continue to deal
solely and directly with Lender in connection with Lender’s rights and
obligations under and in respect of this Loan Agreement and the other Loan
Documents.

 

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

 

(d)                                 Subject to acceptance and recording
thereof pursuant to paragraph (e) of this Section 11.27, from
and after the effective date specified in each Assignment and Acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
Lender under this Agreement.  Any
assignment or transfer by Lender of rights or obligations under this Agreement
that does not comply with this Section 11.27 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with clause (b) of this Section 11.27.

 

(e)                                  Lender or an agent of Lender shall
maintain a register (the “Register”) on which it will record the Loans
made hereunder, and each Assignment and Acceptance and participation.  The Register shall include the names and
addresses of Lenders (including all assignees, successors and Participants),
and the commitment of, and principal amount of the Loans owing to each such
Lender.  Failure to make any such
recordation, or any error in such recordation shall not affect the Borrower’s
obligations in respect of such Loans.  If
Lender sells an assignment or participation in any Loan, it shall update the
register to reflect such assignment or participation.

 

105

 

(f)                                    Notwithstanding anything contained herein
to the contrary, as long as no Event of Default shall have occurred and be
continuing, no Lender or Participant shall Transfer all or any portion of the
Loan or any interest therein to an Excluded Lender Transferee or permit or
suffer any Transfer such that any portion of or participation interest in the
Loan will be held directly or indirectly by a Person that is an Excluded Lender
Transferee (it being agreed that the foregoing shall not apply to the holder of
any Securities issued in a pooled loan Securitization).

 

Section 11.28                     Intentionally Omitted.

 

Section 11.29                     Substitution. 
After the Closing Date, but prior to the Permitted Prepayment Date,
Borrower may obtain a release of the Lien of a Mortgage (and the related Loan
Documents) encumbering an Individual Property (a “Substituted Property”)
by substituting therefor another property of like kind and quality acquired by
Borrower (individually, a “Substitute Property” and collectively, the “Substitute
Properties”), provided that the following conditions precedent are
satisfied:

 

(a)                                  Lender shall have received at least
thirty (30) days prior written notice requesting the substitution and
identifying the Substitute Property and the Substituted Property.

 

(b)                                 The Allocated Loan Amount of the
Substituted Property, when taken together with the Allocated Loan Amounts of
all other Substituted Properties substituted pursuant to this Section 11.29,
does not exceed twenty percent (20%) of the original principal balance of the
Loan.

 

(c)                                  After giving effect to the proposed
substitution, no Event of Default shall be continuing.

 

(d)                                 The Substitute Property shall not have
suffered a Casualty or Condemnation which has not been fully restored.

 

(e)                                  If the Loan is part of a Securitization,
Lender shall have received an Appraisal of the Substitute Property, dated no
more than sixty (60) days prior to the substitution date, prepared by a senior
commercial appraiser of the American Appraisal Institute acceptable to the
Rating Agencies.

 

(f)                                    Intentionally omitted.

 

(g)                                 Lender shall have received a current
survey for the Substitute Property, certified to the title insurance company
and Lender and their respective successors and assigns, in substantially the
same form and content as the certification of the survey of the Substituted
Property prepared by a professional land surveyor licensed in the state in
which the Substitute Property is located and acceptable to the Rating Agencies,
in accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM
Land Title Surveys.  Such survey shall
reflect the same legal description contained in the title insurance policy
relating to such Substitute Property and shall include, among other things, a
metes and bounds description of the real property comprising part of such
Substitute Property (unless such real property has been satisfactorily
designated by lot number on a recorded plat). 
The surveyor’s seal shall be affixed 

 

106

 

to such survey and, if
customary, such survey shall certify whether any portion of the surveyed
property or the improvements thereon is located in a “one-hundred-year flood
hazard area.”

 

(h)                                 Lender shall have received a Phase I
environmental report acceptable to a reasonably prudent lender and, if
recommended under the Phase I environmental report, a Phase II environmental
report acceptable to a reasonably prudent lender, which concludes that the
Substitute Property does not contain any Hazardous Substances (as defined in
the Environmental Indemnity) requiring remediation under any Environmental Law
(as defined in the Environmental Indemnity) and is not subject to any known
risk of contamination from any off-site Hazardous Substance.

 

(i)                                     Lender shall have received a Physical
Conditions Report with respect to the Substitute Property stating that the
Substitute Property is in good condition and repair and free of damage or
waste.  If the Physical Conditions Report
recommends that any repairs be made with respect to the Substitute Property,
such Physical Conditions Report shall include an estimate of the cost of such
recommended repairs and, subject to the terms and conditions set forth in Section 6.1.2,
Borrower shall deposit with Lender an amount equal to one hundred twenty-five
percent (125%) of such estimated cost in the event such estimated cost exceeds
$50,000, which deposit shall constitute “Required Repair Funds”, and shall be
released to Borrower in accordance with the provisions of Section 6.1.

 

(j)                                     Lender shall have received evidence
satisfactory to a reasonably prudent lender that the Substitute Property and
its use comply in all material respects with all applicable Legal Requirements
(including, without limitation, zoning, subdivision and building laws) and such
compliance shall be confirmed by delivery to Lender of report from the Planning
and Zoning Resource Corporation or such other similar consultant which in the
ordinary course of its business provides zoning analyses and reports to
institutional lenders.

 

(k)                                  Lender shall have received valid
certificates of insurance indicating that the requirements for the policies of
insurance required for an Individual Property hereunder have been satisfied
with respect to the Substitute Property and evidence of the payment of all
premiums payable for the existing policy period (or if such Substitute Property
is being added to Borrower’s existing policies, that such amounts have been
escrowed with Lender in accordance with the terms and conditions of Section 6.3).

 

(l)                                     Intentionally omitted.

 

(m)                               Intentionally omitted.

 

(n)                                 After giving effect to the substitution,
the Debt Service Coverage Ratio for the Loan for the Property (excluding the
Substituted Property and including the Substitute Property) is not less than
the greater of (i) the Debt Service Coverage Ratio as of the Closing Date
and (ii) the Debt Service Coverage Ratio for the trailing twelve (12) full
calendar months as of the date immediately preceding the substitution; provided
that, Borrower shall be permitted to defease a portion of the Loan in
accordance with Section 2.5.2 in order to satisfy the Debt Service
Coverage Ratio test set forth in this clause (n);

 

107

 

(o)                                 (i) The Individual Loan-to-Value
Ratio of the Substitute Property is not greater than the lesser of the Individual
Loan-to-Value Ratio of the Substituted Property (A) as of the Closing Date
and (B) immediately prior to the substitution, which determination, with
respect to (x) the Substitute Property, if based on an Appraisal pursuant
to the definition of “Individual Loan-to-Value Ratio”, shall be based on the
Appraisal described in clause (e) above and, (y) the Substituted
Property, (I) if the determination is as of the Closing Date and is based
on an Appraisal pursuant to the definition of “Individual Loan-to-Value Ratio”,
shall be based on the Appraisal delivered at closing and, (II) if the
determination is as of immediately prior to date of substitution and is based
on an Appraisal pursuant to the definition of “Individual Loan-to-Value Ratio”,
shall be based on a new Appraisal dated no earlier than ninety (90) days prior
to such substitution, or, (ii) if Borrower is unable to satisfy the
foregoing test, after giving effect to such substitution, the Loan-to-Value
Ratio for the Property (excluding the Substituted Property and including the
Substitute Property) is not greater than the lesser of (A) the
Loan-to-Value Ratio as of the Closing Date, which, if based on Appraisals
pursuant to the definition of “Loan-to-Value Ratio”, shall be based on the
Appraisals delivered at closing, and (B) the Loan-to-Value Ratio as of the
date immediately preceding such substitution, which, if based on Appraisals
pursuant to the definition of “Loan-to-Value Ratio”, shall be based on
Appraisals dated no earlier than ninety (90) days prior to the date of such
substitution.

 

(p)                                 Lender shall have received an Officer’s
Certificate certifying that the representations and warranties of Borrower
contained in this Agreement and the other Loan Documents are true and correct
in all material respects on and as of the date of the substitution with respect
to the Substitute Property and, if the Loan is part of a Securitization,
containing any other representations and warranties with respect to the
Substitute Property as the Rating Agencies may require, such certificate to be
in form and substance satisfactory to the Rating Agencies.

 

(q)                                 Borrower shall (i) have executed,
acknowledged and delivered to Lender (A) a Mortgage, an Assignment of
Leases and two UCC-1 Financing Statements with respect to the Substitute
Property, together with a letter from Borrower countersigned by a title
insurance company acknowledging receipt of such Mortgage, Assignment of Leases
and UCC-1 Financing Statements and agreeing to record or file, as applicable,
such Mortgage, Assignment of Leases and one of the UCC-1 Financing Statements
in the real estate records for the county in which the Substitute Property is
located and to file one of the UCC-1 Financing Statements in the office of the
Secretary of State (or other central filing office) of the state of its
organization, so as to effectively create upon such recording and filing valid
and enforceable Liens upon the Substitute Property, of the requisite priority,
in favor of Lender (or such other trustee as may be desired under local law),
subject only to the Permitted Encumbrances and such other Liens as are
permitted pursuant to the Loan Documents and (B) an Environmental
Indemnity with respect to the Substitute Property and (ii) have caused
Guarantor to acknowledge and confirm its obligations under (A) any
guaranty executed and delivered by Guarantor in connection with the Loan and (B) the
Environmental Indemnity.  The Mortgage,
Assignment of Leases, UCC-1 Financing Statements and Environmental Indemnity
shall be the same in form and substance as the counterparts of such documents
executed and delivered with respect to the Substituted Property subject to
modifications reflecting the Substitute Property as the Individual Property
that is the subject of such documents and such modifications reflecting the
laws of the state in which the Substitute Property is located as shall be
recommended for similar transactions by the 

 

108

 

counsel admitted to
practice in such state and delivering the opinion as to the enforceability of
such documents required pursuant to subsection (u) below.  The Mortgage encumbering the Substitute
Property shall secure all amounts evidenced by the Note, provided that
in the event that the jurisdiction in which the Substitute 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 one hundred twenty-five percent (125%) of the Allocated Loan Amount of the
Substitute Property.  The amount of the
Loan allocated to the Substitute Property (such amount being hereinafter
referred to as the “Substitute Allocated Loan Amount”) shall equal the
Allocated Loan Amount of the Substituted Property immediately prior to the
substitution and the Allocated Trigger Amount and the Allocated Cash Trap
Amount of the Substitute Property shall be equal to the Allocated Trigger
Amount and the Allocated Cash Trap Amount of the Substituted Property
immediately prior to the substitution. 
Further, Lender shall, in its reasonable discretion, provide an
Allocated Capital Expenditure Amount for the Substitute Property, which
Allocated Capital Expenditure Amount shall be equal to $0.03 per cubic foot of
such Substitute Property and which, when aggregated with the Allocated Capital
Expenditure Amounts of each remaining Individual Property, shall not exceed the
Capital Expenditure Maximum Amount.  Schedule
VI will be deemed to be modified to reflect any such changes to the
Allocated Loan Amount, Allocated Trigger Amount, the Allocated Cash Trap Amount
and Allocated Capital Expenditure Amount for each Individual Property
subsequent to a substitution.

 

(r)                                    Lender shall have received (i) unless
Borrower shall have elected to provide title insurance in an amount equal to
one hundred twenty-five percent (125%) of the Substitute Allocated Loan Amount
as set forth in clause (A) of Section 11.29(q), a “tie-in”
or similar endorsement, but only to the extent available in such jurisdiction,
to each title insurance policy insuring the Lien of an existing Mortgage (which
shall be tied in as of the Closing Date) with respect to such existing
Mortgages and as of the date of the substitution with respect to the title
insurance policy insuring the Lien of the Mortgage with respect to the
Substitute Property and (ii) a title insurance policy (or a marked, signed
and redated commitment to issue such title insurance policy) insuring the Lien
of the Mortgage encumbering the Substitute Property, issued by the title
company that issued the title insurance policies insuring the Lien of the
existing Mortgages and dated as of the date of the substitution, with
reinsurance and direct access agreements that replace such agreements issued in
connection with the title insurance policy insuring the Lien of the Mortgage
encumbering the Substituted Property. 
The title insurance policy issued with respect to the Substitute
Property shall (A) at Borrower’s option, provide coverage in the amount of
the Substitute Allocated Loan Amount if the “tie-in” or similar endorsement
described above is available or, in lieu of a tie-in endorsement, in an amount
equal to one hundred twenty-five percent (125%) of the Substitute Allocated
Loan Amount, (B) insure Lender that the relevant Mortgage creates a valid
first lien on the Substitute Property encumbered thereby, free and clear of all
exceptions from coverage other than Permitted Encumbrances and standard
exceptions and exclusions from coverage (as modified by the terms of any
endorsements), (C) contain such endorsements and affirmative coverages
reasonably requested by Lender, but only to the extent the same are available
in the jurisdiction in which the Substitute Property is located, and (D) name
Lender as the insured.  Lender also shall
have received copies of paid receipts or other evidence showing that all
premiums in respect of such endorsements and title insurance policies have been
paid.

 

109

 

(s)                                  Lender shall have received (i) an
endorsement to the title insurance policy insuring the Lien of the Mortgage
encumbering the Substitute Property insuring that the Substitute Property
constitutes a separate tax lot or, if such an endorsement is not available in
the state in which the Substitute Property is located, a letter from the title
insurance company issuing such Title Insurance Policy stating that the
Substitute Policy constitutes a separate tax lot or (ii) a letter from the
appropriate taxing authority stating that the Substitute Property constitutes a
separate tax lot or other evidence satisfactory to a reasonably prudent lender
as to same.

 

(t)                                    Borrower shall deliver or cause to be
delivered to Lender (i) updates certified by Borrower of all organizational
documentation related to Borrower and/or the formation, structure, existence,
good standing and/or qualification to do business delivered to Lender on the
Closing Date; (ii) good standing certificates, certificates of
qualification to do business in the jurisdiction in which the Substitute
Property is located (if required in such jurisdiction); and (iii) resolutions
of Borrower authorizing the substitution and any actions taken in connection
with such substitution.

 

(u)                                 Lender shall have received the following
opinions of Borrower’s counsel: (i) an opinion or opinions of counsel,
admitted to practice under the laws of the state in which the Substitute
Property is located, stating that the Loan Documents governed by such state law
delivered with respect to the Substitute Property are valid and enforceable in
accordance with their terms, subject to the laws applicable to creditors’
rights and equitable principles, and that Borrower is qualified to do business
and in good standing under the laws of the jurisdiction where the Substitute
Property is located or that Borrower is not required by applicable law to
qualify to do business in such jurisdiction; (ii) an opinion of counsel
acceptable to the Rating Agencies, if the Loan is part of a Securitization, or
reasonably acceptable to the Lender, if the Loan is not part of a
Securitization, stating that the Loan Documents delivered with respect to the
Substitute Property pursuant to clause (i) above were duly
authorized, executed and delivered by such Borrower; (iii) an opinion of
counsel acceptable to, the Rating Agencies if the Loan is part of a
Securitization, or the Lender if the Loan is not part of a Securitization,
stating either (x) that subjecting the Substitute Property to the Lien of
the related Mortgage and the execution and delivery of the related Loan
Documents do not and will not affect or impair the ability of Lender to enforce
its remedies under all of the Loan Documents or (y) this Agreement, after
giving effect to the Loan Documents executed in connection with the
substitution, shall be enforceable in accordance with its terms; (iv) an
update of the Insolvency Opinion indicating that the substitution does not
affect the opinions set forth therein; and (v) if the Loan is part of a
Securitization, an opinion of counsel acceptable to the Rating Agencies that
the substitution does not constitute a “significant modification” of the Loan
under Section 1001 of the Code or otherwise cause a tax to be imposed on a
“prohibited transaction” by the REMIC Trust holding the Loan.  Such opinions, to the extent applicable,
shall be substantially in the respective forms approved by Lender in connection
with the origination of the Loan, and shall contain customary assumptions and
qualifications.

 

(v)                                 To the extent such escrows would be
required pursuant to the terms and conditions set forth in Article VI,
Borrower shall have paid, or escrowed with Lender, all Basic Carrying Costs
relating to the Substitute Property, including without limitation, (i) accrued
but unpaid insurance premiums relating to each of the Individual Properties and
the Substitute Property, and (ii) currently due and payable Taxes
(including any in arrears) relating to each of 

 

110

 

the Individual Properties
and the Substitute Property and (iii) currently due and payable
maintenance charges and other impositions relating to each of the Individual
Properties and Substitute Property after taking into account Reserve Funds held
in connection with the Substituted Property and available as Reserve Funds for
the Substitute Property.

 

(w)                               Lender shall have received such other
amendments and modifications to this Agreement and the other Loan Documents as
would be requested by a reasonably prudent lender originating commercial loans
for securitization similar to the Loan in order to reflect and effect the
substitution and to protect and preserve the Liens and security interests of
Lender in the Substitute Property.

 

(x)                                   Lender shall have received such other and
further approvals, opinions, documents and information in connection with the
substitution as requested by the Rating Agencies if the Loan is part of a
Securitization.

 

(y)                                 If the Loan is part of a Securitization,
Borrower shall have delivered to Lender a Rating Agency Confirmation with
respect to the substitution.

 

(z)                                   Borrower shall convey the Substituted
Property to another Person other than an SPC Party.

 

(aa)                            Borrower shall submit to Lender for its
review, not less than fifteen (15) days prior to the date of such substitution,
a release of Lien (and related Loan Documents) for the Substituted Property to
be executed by Lender.  Such release
shall be in a form appropriate for the jurisdiction in which the Substituted
Property is located and that contains standard provisions protecting the rights
of the releasing lender.  In addition,
Borrower shall provide all other documentation that a reasonably prudent lender
originating commercial loans for securitization similar to the Loan would
require to be delivered by Borrower in connection with such release, together
with an Officer’s Certificate certifying that such documentation (i) is in
compliance with all Legal Requirements, and (ii) will effect such release
in accordance with the terms of this Agreement.

 

(bb)                          Borrower shall deliver an Officer’s
Certificate certifying that the requirements set forth in this Section 11.29
have been satisfied.

 

(cc)                            Borrower shall have paid or reimbursed
Lender for all reasonable out-of-pocket costs and expenses incurred by Lender
(including, without limitation, reasonable attorneys fees and disbursements) in
connection with the substitution. 
Borrower shall have paid all recording charges, filing fees, taxes or
other expenses (including, without limitation, mortgage and intangibles taxes
and documentary stamp taxes) payable in connection with the substitution.  If the Loan is part of a Securitization,
Borrower shall have paid all costs and expenses of the Rating Agencies incurred
in connection with the substitution.

 

(dd)                          Upon the satisfaction of the foregoing
conditions precedent, Lender will release its Lien from the Substituted
Property (or assign such Lien, as applicable) and the Substitute Property shall
be deemed to be an Individual Property for purposes of this Agreement and the
Substitute Allocated Loan Amount with respect to such Substitute Property shall
be 

 

111

 

deemed to be the
Allocated Loan Amount with respect to such Substitute Property for all purposes
hereunder.

 

Following the substitution
of a Substituted Property in exchange for a Substitute Property in accordance
with this Section 11.29, Lender shall adjust (if applicable) the
amounts thereafter required to be deposited by Borrower into the Reserve Funds
to reflect amounts required solely for the remaining Individual Properties and
the Substitute Property after giving effect to such substitution.

 

Section 11.30                     Partial Release — Expansion.  (a) Provided
no Event of Default shall have occurred and remain uncured and provided that
the intended use, at the time of the transfer of the Expansion Parcel is not
for purposes incompatible with the use and operation of the applicable
Individual Property as a dry and/or cold storage warehouse facility (it being agreed
that the use of the Expansion Parcel as a dry and/or cold storage warehouse
facility is not incompatible with the use and operation of the remainder of the
applicable Individual Property as a dry and/or cold storage warehouse
facility), Borrower shall have the right at any time and from time to time
prior to the Maturity Date to obtain a release of the lien of the Mortgage (and
related Loan Documents) as to an Expansion Parcel upon satisfaction of the
following conditions precedent:

 

(i)                                     Borrower shall provide Lender not less
than thirty (30) days’ notice (or a shorter period of time if permitted by
Lender in its sole discretion) specifying the date (the “Expansion
Date”) on which the partial release is to occur provided,
however, that Borrower may postpone the Expansion Date from time to time as
long as the extended date is at least ten (10) Business Days after Notice
of such extension;

 

(ii)                                  Lender shall have received an Officer’s
Certificate certifying (A) that the proposed use of the Expansion Parcel
would not be incompatible with a dry and/or cold storage warehouse facility on
the remainder of the applicable Individual Property, (B) that the excess
of Gross Revenue over Operating Expenses for the Individual Property
immediately after the proposed release after taking into account the proposed
use of the Expansion Parcel will not be less than the excess of Gross Revenue
over Operating Expenses for the Individual Property immediately before the
proposed release and (C) that the proposed use of the Expansion Parcel
will not have a material adverse effect on the income and expense at the
Individual Property, together with evidence reasonably acceptable to Lender in
support of such conclusions;

 

(iii)                               Borrower shall deliver to Lender an opinion of counsel
for Borrower that is standard in commercial lending transactions and subject
only to customary qualifications, assumptions and exceptions opining, among
other things, that if a Securitization of any portion of the Loan has occurred,
the REMIC Trust formed pursuant to such Securitization will not fail to
maintain its status as a “real estate mortgage investment conduit” within the
meaning of Section 860D of the Code as a result of the partial release
pursuant to this Section 11.30;

 

(iv)                              Borrower shall have delivered to Lender
evidence that Borrower has complied with all requirements of and obtained all
approvals required under any Leases 

 

112

 

with Major Tenants and the Operating Agreements applicable to the release
of the Expansion Parcel and that the partial release does not violate any of
the provisions of any Leases with Major Tenants and the Operating Agreements
provided, however, that an Officer’s Certificate to that effect shall be
sufficient evidence of such compliance and obtaining of such approvals as to
Leases which are not Major Leases;

 

(v)                                 Borrower shall have delivered to Lender (A) at
Borrower’s option, (x) an endorsement to the Title Insurance Policy, (y) an
opinion of counsel (from counsel reasonably acceptable to Lender) or (z) a
certificate of an architect (from an architect reasonably acceptable to Lender
and licensed to practice in the State), indicating that the Expansion Parcel
has been legally subdivided for zoning lot purposes from the remainder of the
Individual Property pursuant to a zoning lot subdivision in accordance with
applicable law, (B) at Borrower’s option, (x) an endorsement to the
Title Insurance Policy, (y) an opinion of counsel (from counsel reasonably
acceptable to Lender) or (z) a certificate of an architect (from an
architect reasonably acceptable to Lender and licensed to practice in the
State), indicating that the balance of the Individual Property separately
conforms to and is in material compliance with all applicable Legal
Requirements and constitutes one or more separate tax lots, (C) a
certificate from an architect or engineer (licensed to practice in the State
and reasonably acceptable to Lender) to the effect that the Expansion Parcel is
not necessary for the use of the remainder of the Individual Property in the
manner in which it is then being used, including, without limitation, for
support, access, driveways, parking, utilities or drainage flows (after giving
effect to any easements therefor reserved over the Expansion Parcel for the
benefit of the remainder of the Individual Property) and (D) an Officer’s
Certificate with supporting documentation indicating that either (y) sufficient
parking remains on the remainder of the Individual Property to comply with all Leases
of such remainder and with all Operating Agreements and which is adequate for
the proper use and enjoyment of the balance of the Individual Property or (z) reservations
of parking (in favor of such remainder) in the Expansion Parcel are sufficient
(when added to parking otherwise available to the remainder) to comply with all
Leases of such remainder and with all Operating Agreements and which are
adequate for the proper use and enjoyment of the remainder of the Individual
Property;

 

(vi)                              Lender shall have received a Officer’s
Certificate certifying that any improvements proposed to be built on the
Expansion Parcel will not adversely affect the operation of the remainder of
the Individual Property (after giving effect to any easements reserved or granted
for the benefit of such remainder or the Expansion Parcel);

 

(vii)                           Lender shall have received an Appraisal of the
Individual Property (using an income method of valuation (it being agreed that
in conducting such valuation any income that might be derived from the sale or
subsequent use of such Expansion Parcel shall not be included)) dated no more
than ninety (90) days prior to the proposed Expansion Date by an appraiser
(which appraiser shall be reasonably acceptable to Lender), indicating an
appraised value of the Individual Property after the release, both before and
after construction of improvements to be built on the Expansion Parcel, equal
to or greater than the greater of (y) one hundred percent (100%) of the
value of such 

 

113

 

Individual Property immediately prior to the release or (z) one
hundred percent (100%) of the Allocated Loan Amount for such Individual
Property on the Expansion Date;

 

(viii)                        Borrower shall have delivered a metes and bounds
description of the Expansion Parcel and a survey of the Expansion Parcel and
the remainder of the Individual Property which would be standard in commercial
lending transactions;

 

(ix)                                Borrower shall have delivered to Lender
on the date of the release an endorsement to the policy or policies of title
insurance insuring the Mortgage on such Individual Property reflecting the
release and (A) insuring Lender’s interest in any easements created in
connection with the Release and (B) confirming no change in the priority
of the Mortgage on the remainder of the Individual Property or in the amount of
the insurance or the coverage under the policy or policies;

 

(x)                                   Borrower shall deliver to Lender an
Officer’s Certificate certifying that the requirements set forth in this Section 11.30
have been satisfied; and

 

(xi)                                Borrower shall pay all out-of-pocket
costs and expenses of Lender incurred in connection with the partial release,
including Lender’s reasonably attorneys’ fees and expenses.

 

(b)                                 If Borrower shall provide a Letter of
Credit to Lender on the Expansion Date as additional security for the Loan, the
amount of the Loan equal to the amount of the Letter of Credit shall be added
to the appraised value of the remainder of the Property after the release for
the purposes of doing the comparison in Section l1.30(a)(vii).

 

(c)                                  If Borrower has elected to release the
Expansion Parcel and the requirements of this Section 11.30 have
been satisfied, the Expansion Parcel shall be released from the Lien of the
Mortgage (and related Loan Documents) and Lender shall consent and subordinate
the Lien of the Mortgage thereto.  In
connection with the release of the Lien, Borrower shall submit to Lender, not
less than thirty (30) days prior to the Expansion Date (or such shorter time as
is reasonably acceptable to Lender), a release of Lien (and related Loan
Documents) for execution by Lender.  Such
release shall be in a form appropriate in the jurisdiction in which the
Property is located and shall contain standard provisions protecting the rights
of a releasing lender.  In addition,
Borrower shall provide all other documentation Lender reasonably requires to be
delivered by Borrower in connection with such release, together with an Officer’s
Certificate certifying that such documentation (i) is in compliance with
all Legal Requirements, and (ii) will effect such release in accordance
with the terms of this Agreement. 
Borrower shall pay all costs, taxes and expenses associated with the
release of the Lien of the Mortgage, including Lender’s reasonable attorneys’
fees.  Borrower shall cause title to the
Expansion Parcel so released from the Lien of the Mortgage to be transferred to
and held by a Person other than Borrower.

 

Section 11.31                     Co-Lenders.  (a) Following
the date hereof, (i) the liabilities of Lender shall be several and not
joint, (ii) neither Co-Lender shall be responsible for the obligations of
the other Co-Lender, and (iii) each Co-Lender shall be liable to Borrower
only for its Ratable Share of the Loan. 
Notwithstanding anything to the contrary herein, all indemnities 

 

114

 

by Borrower and
obligations for costs, expenses, damages or advances set forth herein shall run
to and benefit each Co-Lender in accordance with its Ratable Share.

 

(b)                                 Each Co-Lender agrees that it has,
independently and without reliance on the other Co-Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of Borrower and its Affiliates and decision to enter into this
Agreement and that it will, independently and without reliance upon the other
Co-Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or under any other Loan
Document.

 

[NO FURTHER TEXT ON THIS PAGE]

 

115

 

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

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  GERMAN AMERICAN CAPITAL 

  CORPORATION, a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey E. Paige

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey
  E. Paige

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Todd O. Sammann

  
	
   

  	
   

  	
  Name:

  	
  Todd
  O. Sammann

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A., a national

  banking association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Micah Goodman

  
	
   

  	
   

  	
  Name:

  	
  Micah
  Goodman

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  

 

 

	
   

  	
  PROPCO:

  
	
   

  	
   

  
	
   

  	
  ART MORTGAGE BORROWER PROPCO 2006-2 L.P.,

  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  ART
  MORTGAGE BORROWER PROPCO GP 

  2006-2 LLC, a Delaware limited liability company,

  its general partner.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  ART
  FIRST MEZZANINE BORROWER

  PROPCO 2006-2 L.P., a Delaware limited

  partnership, its sole equity member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  ART
  FIRST MEZZANINE BORROWER

  PROPCO GP 2006-2 LLC, a Delaware

  limited liability company, its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:
  

  	
  AMERICOLD
  REALTY TRUST, a

  Maryland real estate investment trust its

  sole equity member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:
  

  	
  /s/
  Anthony Cossentino

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  

 

 

 

	
   

  	
  OPCO:

  
	
   

  	
   

  
	
   

  	
  ART MORTGAGE BORROWER OPCO 2006-2 L.P., 

  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  ART
  MORTGAGE BORROWER OPCO GP

  2006-2 LLC, a Delaware limited liability company,

  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  ART
  FIRST MEZZANINE BORROWER

  OPCO 2006-2 L.P., a Delaware limited 

  partnership, its sole equity member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  ART
  FIRST MEZZANINE BORROWER

  OPCO GP 2006-2 LLC, a Delaware

  limited liability company, its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  AMERICOLD
  LOGISTICS, LLC, a

  Delaware limited liability company, its

  sole equity member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Anthony Cossentino

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:Exhibit 10.7

 

FIRST AMENDMENT TO LOAN AGREEMENT

 

 

Dated as of February 28, 2007

 

 

Between

 

ART MORTGAGE BORROWER PROPCO 2006-2 LP.

 

and

ART MORTGAGE BORROWER OPCO 2006-2 L P.,

collectively, as Borrower

 

 

and

 

 

GERMAN AMERICAN CAPITAL CORPORATION

 

and

JPMORGAN CHASE BANK, N.A.,

collectively, as Lender

 

 

FIRST
AMENDMENT TO LOAN AGREEMENT

 

THIS FIRST AMENDMENT TO LOAN
AGREEMENT (this “Amendment”),
dated as of February 28,
2007 (the “Effective Date”), by and
between GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, having an
address at 60 Wall Street; 10th
Floor, New York, New York 10005 (“GACC”),
and JPMORGAN CHASE BANK, NA, a banking
association chartered under the laws
of the United States of America, having an address at 270 Park Avenue, New York, New York 10017-2014 (“JPM”, GACC and JPM, each a “Co-Lender”
and, collectively, “Lender”), ART MORTGAGE BORROWER PROPCO  2006-2 L.F., a Delaware limited
partnership (“Propco Borrower”), and ART MORTGAGE BORROWER OPCO 2006-2 L.P, a Delaware limited partnership (“Opco Borrower”, and together
with Propco Borrower, individually
or collectively as the context
may require, “Borrower”), each having an address
at 10 Glenlake Parkway, Suite 800,
Atlanta, Georgia 30328 and AMERICOLD REALTY TRUST,
a Maryland real estate investment trust (“Guarantor”).

 

W I T N E S
S E T H:

 

WHEREAS, Lender and Borrower entered into a certain Loan
Agreement (the “Loan Agreement”) dated as of December 8, 2006, pursuant to the terms of which, among other things, Lender
agreed to make a loan (the “Loan”) to
Borrower in the original principal amount of Three Hundred Fifty Million and No/100 Dollars ($350,000,000.00), which
Loan is evidenced in part by that certain Promissory Note
A-1, of even date with the Loan
Agreement made by Borrower to GACC in the original stated principal amount of Two Hundred Ten Million and No/100 Dollars ($210,000,000)
(as the same may be amended, restated,
replaced, supplemented, increases,
extended, consolidated or otherwise modified from time to time, the “GACC
Note”) and in part by that
certain Promissory Note A-2, of even date with the Loan Agreement
made by Borrower to JPM m the original stated principal amount
of One Hundred Forty Million and No/100 Dollars ($140,000,000) (as the same may be amended, restated, replaced, supplemented, increases, extended, consolidated or otherwise modified from time to time, the “JPM Note”, and collectively
with the GACC Note, the “Original Note”);

 

WHEREAS, the Original Note, the Loan Agreement and all
other documents evidencing, securing or pertaining to the Loan, as the same may
have been and may be further modified or amended from time to time, are
collectively referred to herein as the “Loan Documents”;

 

WHEREAS, GACC and Borrower desire to split the GACC Note
into two (2) promissory notes designated as Promissory Note A-1A, in the
original stated principal amount of $180,000,000, and Promissory Note A-1B, in the original
stated principal amount of $30,000,000; and in furtherance thereof are entering
into this Amendment as of the date hereof;

 

WHEREAS, JPM and Borrower desire to split the JPM Note into
three (3) promissory notes designated as Promissory Note A-2A, m the
original stated principal amount of $70,000,000, Promissory Note A-2B, in the original
stated principal amount of $35,000,000, and Promissory Note A-2C, in the
original stated principal amount of $35,000,000 and in furtherance thereof are
entering into this Amendment as of the date hereof for such purpose;

 

 

WHEREAS, Promissory Note A-1A and Promissory Note A-1B,
together shall evidence the original GACC Note and Promissory Note A-2A,
Promissory Note A-2B and Promissory Note A-2C together shall evidence the
original JPM Note;

 

WHEREAS, in connection herewith, Borrower, Guarantor and Lender have requested the other to further amend certain terms of the Loan Agreement as more particularly set forth in this Amendment.

 

NOW THEREFORE, in consideration of the foregoing and
of other good and valuable
consideration, the sufficiency and receipt of which is hereby acknowledged,
the parties hereto, intending to be
legally bound, do hereby agree
as follows:

 

I.                                         DEFINITIONS

 

Section 1.1.                                Loan Agreement Definitions, The following definitions set forth in Section 1,1 of the
Loan Agreement are hereby
deleted in their entirety and replaced with the meanings set forth below:

 

“Note” shall
mean, collectively, (a) Promissory Note A-lA, (b) Promissory Note
A-1B, (c) Promissory Note A-2A, (d) Promissory Note A-2B and (e) Promissory
Note A-2C and, if applicable, the Defeased Note and the Undefeased Note, in each case as
the same may be amended, restated, replaced, supplemented, increased, extended,
consolidated or otherwise modified from time to time.

 

“GACC Note”
shall mean, collectively, (a) Promissory Note A-1A and (b) Promissory
Note A-1B.

 

“JPM Note” shall
mean, collectively, (a) Promissory Note A-2A, (b) Promissory Note
A-2B and (c) Promissory Note A-2C.

 

Section 1.2.                                Loan Agreement Definitions. The following definitions are herby
added to Section Ii of the Loan Agreement:

 

“Note A-1A” shall mean, that certain
Promissory Note A-1A of even date
herewith m the original stated principal amount of One Hundred Eighty Million and No/100 Dollars ($180,000,000.00), made
by Borrower in favor of GACC, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time;

 

“Note A-1B”
shall mean, that certain Promissory Note A-1B of even date herewith in the original
stated principal amount of Thirty Million and No/100 Dollars ($30,000,000.00),
made by Borrower m favor of GACC, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time;

 

“Note A-2A”
shall mean, that certain Promissory Note A-2A of even date herewith in the original
stated principal amount of Seventy Million and No/100 Dollars ($70,000,000.00),
made by Borrower in favor of JPM, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

 

“Note A-2B”
shall mean, that certain Promissory Note A-2B of even date herewith in the
original stated principal amount of Thirty Five Million and. No/100 Dollars
($35,000,000.00), made by Borrower in favor of JPM, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

“Note A-2C” shall
mean, that certain Promissory Note A-2C of even date herewith in the original
stated principal amount of Thirty Five Million and No/100 Dollars ($35,000,000.00), made by Borrower in
favor of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.

 

II.                                     REAFFIRMATION
OF GUARANTIES

 

Section 2.1.                                In connection with this Amendment,
Guarantor hereby:

 

(i)                                     Consents to and acknowledges this Amendment and acknowledges and agrees that any and all documents entered into in connection with the Amendment hereto do not and shall not impair, reduce or adversely affect the obligations of Guarantor under the Guaranty of Recourse Obligations (“Guaranty”) and the Environmental Indemnity.

 

(ii)                                  Acknowledges that the Guaranty and the
Environmental Indemnity and the obligations of Guarantor contained in the
Guaranty and the Environmental Indemnity are continuing and in full force and
effect.

 

(iii)                               Acknowledges that this reaffirmation of the Guaranty
and the Environmental Indemnity is for the benefit of Lender.

 

III.                                 MISCELLANEOUS

 

Section 3.1.                                Except as specifically modified and amended herein, all other terms,
conditions and covenants contained in the Loan Agreement shall be and remain in full force
and effect.

 

Section 3.2.                                All references in the Loan Documents to
the Loan Agreement shall mean the Loan Agreement as hereby modified and
amended.

 

Section 3.3.                                Unless otherwise defined in this Amendment,
terms defined in the Loan
Agreement or in any of the other Loan
Documents shall have their defined meanings when used herein.

 

Section 3.4.                                This Amendment may be executed in any number
of counterparts with the same
effect as if all parties hereto had signed the same document. All
such counterparts shall be construed together and shall constitute one instrument, but in making proof hereof it shall only be
necessary to produce one such
counterpart.

 

Section 3.5.                                This Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, legal representatives, successors and assigns.

 

 

Section 3.6                                   This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York (without regard
to principles of conflict of laws) and any applicable 11w of the United States
of America.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  GERMAN
  CAPITAL CORPORATION, a

  
	
   

  	
  Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey E. Paige

  
	
   

  	
   

  	
  Name:
  Jeffrey E. Paige

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Beacham

  
	
   

  	
   

  	
  Name: John Beacham

  
	
   

  	
   

  	
  Title: Vice President

  
				

 

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A.

  
	
   

  	
   

  	
  a
  national banking association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Micah Goodman

  
	
   

  	
   

  	
  Name: Micah Goodman

  
	
   

  	
   

  	
  Title: Vice President

  
				

 

[SIGNATURES
CONTINUED ON THE NEXT PAGE]

 

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ART MORTGAGE BORROWER PROPCO

  
	
   

  	
  2006-2 L.P.,

  
	
   

  	
  a
  Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ART
  MORTGAGE BORROWER

  
	
   

  	
   

  	
  PROPCO
  GP 2006-2 LLC, a

  
	
   

  	
   

  	
  Delaware
  limited liability company,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  ART
  FIRST MEZZANINE

  
	
   

  	
   

  	
   

  	
  BORROWER
  PROPCO

  
	
   

  	
   

  	
   

  	
  2006-2
  L P , a Delaware

  
	
   

  	
   

  	
   

  	
  limited
  partnership, its sole

  
	
   

  	
   

  	
   

  	
  equity
  member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  ART
  FIRST MEZZANINE

  
	
   

  	
   

  	
   

  	
   

  	
  BORROWER
  PROPCO GP

  
	
   

  	
   

  	
   

  	
   

  	
  2006-2
  LLC, a Delaware

  
	
   

  	
   

  	
   

  	
   

  	
  limited
  liability company, its

  
	
   

  	
   

  	
   

  	
   

  	
  general
  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  AMERICOLD

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  REALTY
  TRUST, a

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Maryland
  real estate

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  investment
  trust, its

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  sole
  equity member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Neal Rider

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:
  Neal Rider

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: President

  
							

 

 

	
   

  	
  ART
  MORTGAGE BORROWER OPCO

  
	
   

  	
  2006-2
  L.P.,

  
	
   

  	
  a
  Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ART
  MORTGAGE BORROWER

  
	
   

  	
   

  	
  OPCO
  GP 2006-2 LLC, a

  
	
   

  	
   

  	
  Delaware
  limited liability company,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  ART
  FIRST MEZZANINE

  
	
   

  	
   

  	
   

  	
  BORROWER
  OPCO

  
	
   

  	
   

  	
   

  	
  2006-2
  L P , a Delaware

  
	
   

  	
   

  	
   

  	
  limited
  partnership, its sole

  
	
   

  	
   

  	
   

  	
  equity
  member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  ART
  FIRST MEZZANINE

  
	
   

  	
   

  	
   

  	
   

  	
  BORROWER
  OPCO GP

  
	
   

  	
   

  	
   

  	
   

  	
  2006-2
  LLC, a Delaware

  
	
   

  	
   

  	
   

  	
   

  	
  limited
  liability company, its

  
	
   

  	
   

  	
   

  	
   

  	
  general
  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  AMERICOLD

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  REALTY
  TRUST, a

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Maryland
  real estate

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  investment
  trust, its

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  sole
  equity member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Neal Rider

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:
  Neal Rider

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: President

  
							

 

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICOLD
  REALTY TRUST,

  
	
   

  	
   

  	
  a
  Maryland real estate investment trust

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Neal Rider

  
	
   

  	
   

  	
  Name: Neal Rider

  
	
   

  	
   

  	
  Title: President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}]]