Document:

Exhibit 10.3

 

 

 

LOAN AGREEMENT

 

 

Dated as of October 3, 2006

 

 

By and Between

 

10/120
SOUTH RIVERSIDE FEE LLC

 

and

 

10/120
SOUTH RIVERSIDE PROPERTY LLC,

collectively,
Borrower

 

 

and

 

 

MERRILL LYNCH MORTGAGE LENDING, INC.,

as Lender

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  I.

  	
  DEFINITIONS; PRINCIPLES OF
  CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
   

  	
  Principles of Construction

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  THE LOAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  The Loan

  	
  21

  
	
  2.1.1

  	
   

  	
  Agreement to Lend and Borrow

  	
  21

  
	
  2.1.2

  	
   

  	
  Single Disbursement to Borrower

  	
  21

  
	
  2.1.3

  	
   

  	
  The Note

  	
  21

  
	
  2.1.4

  	
   

  	
  Use of Proceeds

  	
  21

  
	
  2.1.5

  	
   

  	
  Components

  	
  21

  
	
  Section 2.2

  	
   

  	
  Interest Rate

  	
  22

  
	
  2.2.1

  	
   

  	
  Interest Rate

  	
  22

  
	
  2.2.2

  	
   

  	
  Intentionally Omitted

  	
  22

  
	
  2.2.3

  	
   

  	
  Default Rate

  	
  22

  
	
  2.2.4

  	
   

  	
  Interest Calculation

  	
  22

  
	
  2.2.5

  	
   

  	
  Usury Savings

  	
  22

  
	
  Section 2.3

  	
   

  	
  Loan Payments

  	
  22

  
	
  2.3.1

  	
   

  	
  Payment Before Maturity Date

  	
  22

  
	
  2.3.2

  	
   

  	
  Intentionally Omitted

  	
  23

  
	
  2.3.3

  	
   

  	
  Payment on Maturity Date

  	
  23

  
	
  2.3.4

  	
   

  	
  Late Payment Charge

  	
  23

  
	
  2.3.5

  	
   

  	
  Method and Place of Payment

  	
  23

  
	
  2.3.6

  	
   

  	
  Payments After Event of Default

  	
  23

  
	
  Section 2.4

  	
   

  	
  Prepayments

  	
  24

  
	
  2.4.1

  	
   

  	
  Voluntary Prepayments

  	
  24

  
	
  2.4.2

  	
   

  	
  Mandatory Prepayments

  	
  24

  
	
  2.4.3

  	
   

  	
  Prepayments After Default

  	
  24

  
	
  Section 2.5

  	
   

  	
  Release

  	
  25

  
	
  2.5.1

  	
   

  	
  Release of Property

  	
  25

  
	
  Section 2.6

  	
   

  	
  Permitted Mezzanine Loan

  	
  25

  
	
  2.6.1

  	
   

  	
  Mezzanine Loan

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Borrower Representations

  	
  27

  
	
  3.1.1

  	
   

  	
  Organization

  	
  27

  
	
  3.1.2

  	
   

  	
  Proceedings

  	
  28

  
	
  3.1.3

  	
   

  	
  No Conflicts

  	
  28

  
						

 

i

 

	
  3.1.4

  	
   

  	
  Litigation

  	
  28

  
	
  3.1.5

  	
   

  	
  Agreements

  	
  28

  
	
  3.1.6

  	
   

  	
  Consents

  	
  28

  
	
  3.1.7

  	
   

  	
  Title

  	
  28

  
	
  3.1.8

  	
   

  	
  No Plan Assets

  	
  29

  
	
  3.1.9

  	
   

  	
  Compliance

  	
  29

  
	
  3.1.10

  	
   

  	
  Financial Information

  	
  29

  
	
  3.1.11

  	
   

  	
  Condemnation

  	
  29

  
	
  3.1.12

  	
   

  	
  Utilities and Public Access

  	
  30

  
	
  3.1.13

  	
   

  	
  Separate Lots

  	
  30

  
	
  3.1.14

  	
   

  	
  Assessments

  	
  30

  
	
  3.1.15

  	
   

  	
  Enforceability

  	
  30

  
	
  3.1.16

  	
   

  	
  Assignment of Leases

  	
  30

  
	
  3.1.17

  	
   

  	
  Insurance

  	
  30

  
	
  3.1.18

  	
   

  	
  Licenses

  	
  30

  
	
  3.1.19

  	
   

  	
  Flood Zone

  	
  31

  
	
  3.1.20

  	
   

  	
  Physical Condition

  	
  31

  
	
  3.1.21

  	
   

  	
  Boundaries

  	
  31

  
	
  3.1.22

  	
   

  	
  Leases

  	
  31

  
	
  3.1.23

  	
   

  	
  Filing and Recording Taxes

  	
  32

  
	
  3.1.24

  	
   

  	
  Single Purpose

  	
  32

  
	
  3.1.25

  	
   

  	
  Tax Filings

  	
  36

  
	
  3.1.26

  	
   

  	
  Solvency

  	
  36

  
	
  3.1.27

  	
   

  	
  Federal Reserve Regulations

  	
  37

  
	
  3.1.28

  	
   

  	
  Organizational Chart

  	
  37

  
	
  3.1.29

  	
   

  	
  Bank Holding Company

  	
  37

  
	
  3.1.30

  	
   

  	
  No Other Debt

  	
  37

  
	
  3.1.31

  	
   

  	
  Investment Company Act

  	
  37

  
	
  3.1.32

  	
   

  	
  Intentionally Omitted

  	
  37

  
	
  3.1.33

  	
   

  	
  No Bankruptcy Filing

  	
  37

  
	
  3.1.34

  	
   

  	
  Full and Accurate Disclosure

  	
  38

  
	
  3.1.35

  	
   

  	
  Foreign Person

  	
  38

  
	
  3.1.36

  	
   

  	
  Intentionally Omitted

  	
  38

  
	
  3.1.37

  	
   

  	
  No Change in Facts or
  Circumstances; Disclosure

  	
  38

  
	
  3.1.38

  	
   

  	
  Management Agreement

  	
  38

  
	
  3.1.39

  	
   

  	
  Perfection of Accounts

  	
  38

  
	
  3.1.40

  	
   

  	
  Unfunded Tenant Allowances

  	
  39

  
	
  3.1.41

  	
   

  	
  Air Rights Lease

  	
  39

  
	
  3.1.42

  	
   

  	
  REOA

  	
  39

  
	
  Section 3.2

  	
   

  	
  Survival of Representations

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  BORROWER COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Borrower Affirmative Covenants

  	
  40

  
	
  4.1.1

  	
   

  	
  Existence; Compliance with Legal
  Requirements

  	
  40

  
	
  4.1.2

  	
   

  	
  Taxes and Other Charges

  	
  41

  
					

 

ii

 

	
  4.1.3

  	
   

  	
  Litigation

  	
  41

  
	
  4.1.4

  	
   

  	
  Access to Property

  	
  41

  
	
  4.1.5

  	
   

  	
  Further Assurances; Supplemental
  Mortgage Affidavits

  	
  42

  
	
  4.1.6

  	
   

  	
  Financial Reporting

  	
  42

  
	
  4.1.7

  	
   

  	
  Title to the Property

  	
  43

  
	
  4.1.8

  	
   

  	
  Estoppel Statement

  	
  44

  
	
  4.1.9

  	
   

  	
  Leases

  	
  44

  
	
  4.1.10

  	
   

  	
  Alterations

  	
  46

  
	
  4.1.11

  	
   

  	
  Intentionally Omitted

  	
  46

  
	
  4.1.12

  	
   

  	
  Material Agreements

  	
  46

  
	
  4.1.13

  	
   

  	
  Performance by Borrower

  	
  47

  
	
  4.1.14

  	
   

  	
  Costs of Enforcement/Remedying
  Defaults

  	
  47

  
	
  4.1.15

  	
   

  	
  Business and Operations

  	
  47

  
	
  4.1.16

  	
   

  	
  Loan Fees

  	
  47

  
	
  4.1.17

  	
   

  	
  O&M Program

  	
  47

  
	
  4.1.18

  	
   

  	
  Intentionally Omitted

  	
  47

  
	
  4.1.19

  	
   

  	
  Air Rights Lease

  	
  47

  
	
  4.1.20

  	
   

  	
  REOA

  	
  48

  
	
  Section 4.2

  	
   

  	
  Borrower Negative Covenants

  	
  49

  
	
  4.2.1

  	
   

  	
  Due on Sale and Encumbrance;
  Transfers of Interests

  	
  49

  
	
  4.2.2

  	
   

  	
  Liens

  	
  49

  
	
  4.2.3

  	
   

  	
  Dissolution

  	
  49

  
	
  4.2.4

  	
   

  	
  Change in Business

  	
  50

  
	
  4.2.5

  	
   

  	
  Debt Cancellation

  	
  50

  
	
  4.2.6

  	
   

  	
  Affiliate Transactions

  	
  50

  
	
  4.2.7

  	
   

  	
  Zoning

  	
  50

  
	
  4.2.8

  	
   

  	
  Assets

  	
  50

  
	
  4.2.9

  	
   

  	
  No Joint Assessment

  	
  50

  
	
  4.2.10

  	
   

  	
  Principal Place of Business

  	
  50

  
	
  4.2.11

  	
   

  	
  ERISA

  	
  50

  
	
  4.2.12

  	
   

  	
  Material Agreements

  	
  51

  
	
  4.2.13

  	
   

  	
  Air Rights Lease

  	
  51

  
	
  4.2.14

  	
   

  	
  REOA

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  INSURANCE, CASUALTY AND
  CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  Insurance

  	
  52

  
	
  5.1.1

  	
   

  	
  Insurance Policies

  	
  52

  
	
  5.1.2

  	
   

  	
  Insurance Company

  	
  56

  
	
  Section 5.2

  	
   

  	
  Casualty and Condemnation

  	
  57

  
	
  5.2.1

  	
   

  	
  Casualty

  	
  57

  
	
  5.2.2

  	
   

  	
  Condemnation

  	
  57

  
	
  5.2.3

  	
   

  	
  Casualty Proceeds

  	
  58

  
	
  Section 5.3

  	
   

  	
  Delivery of Net Proceeds

  	
  58

  
	
  5.3.1

  	
   

  	
  Minor Casualty or Condemnation

  	
  58

  
	
  5.3.2

  	
   

  	
  Major Casualty or Condemnation

  	
  59

  
					

 

iii

 

	
  VI.

  	
  RESERVE FUNDS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
   

  	
  Intentionally Omitted

  	
  62

  
	
  Section 6.2

  	
   

  	
  Tax Funds

  	
  62

  
	
  6.2.1

  	
   

  	
  Deposits of Tax Funds

  	
  62

  
	
  6.2.2

  	
   

  	
  Release of Tax Funds

  	
  62

  
	
  Section 6.3

  	
   

  	
  Insurance Funds

  	
  63

  
	
  6.3.1

  	
   

  	
  Deposits of Insurance Funds

  	
  63

  
	
  6.3.2

  	
   

  	
  Release of Insurance Funds

  	
  63

  
	
  6.3.3

  	
   

  	
  Waiver of Insurance Funds

  	
  63

  
	
  Section 6.4

  	
   

  	
  Capital Expenditure Funds

  	
  63

  
	
  6.4.1

  	
   

  	
  Deposits of Capital Expenditure
  Funds

  	
  63

  
	
  6.4.2

  	
   

  	
  Release of Capital Expenditure
  Funds

  	
  64

  
	
  Section 6.5

  	
   

  	
  Rollover Funds

  	
  65

  
	
  6.5.1

  	
   

  	
  Deposits of Rollover Funds

  	
  65

  
	
  6.5.2

  	
   

  	
  Release of Rollover Funds

  	
  65

  
	
  Section 6.6

  	
   

  	
  Lease Termination Rollover Funds

  	
  67

  
	
  6.6.1

  	
   

  	
  Deposits of Lease Termination
  Rollover Funds

  	
  67

  
	
  6.6.2

  	
   

  	
  Release of Lease Termination
  Rollover Funds

  	
  67

  
	
  Section 6.7

  	
   

  	
  Unfunded Tenant Allowance Reserve
  Funds

  	
  69

  
	
  Section 6.8

  	
   

  	
  Intentionally Omitted

  	
  70

  
	
  Section 6.9

  	
   

  	
  Application of Reserve Funds

  	
  70

  
	
  Section 6.10

  	
   

  	
  Security Interest in Reserve Funds

  	
  70

  
	
  6.10.1

  	
   

  	
  Grant of Security Interest

  	
  70

  
	
  6.10.2

  	
   

  	
  Income Taxes

  	
  70

  
	
  6.10.3

  	
   

  	
  Prohibition Against Further
  Encumbrance

  	
  70

  
	
  Section 6.11

  	
   

  	
  Letters of Credit

  	
  71

  
	
  6.11.1

  	
   

  	
  Delivery of Letters of Credit

  	
  71

  
	
  Section 6.12

  	
   

  	
  Provisions Regarding Letters of
  Credit

  	
  71

  
	
  6.12.1

  	
   

  	
  Security for Debt

  	
  71

  
	
  6.12.2

  	
   

  	
  Additional Rights of Lender

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  PROPERTY MANAGEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
   

  	
  The Management Agreement

  	
  72

  
	
  Section 7.2

  	
   

  	
  Prohibition Against Termination or
  Modification

  	
  73

  
	
  Section 7.3

  	
   

  	
  Replacement of Manager

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  PERMITTED TRANSFERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
   

  	
  Permitted Transfer of the Property

  	
  73

  
	
  Section 8.2

  	
   

  	
  Permitted Transfers of Interest in
  Borrower

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  SALE AND SECURITIZATION OF
  MORTGAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1

  	
   

  	
  Sale of Mortgage and Securitization

  	
  75

  
					

 

iv

 

	
  Section 9.2

  	
   

  	
  Securitization Indemnification

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1

  	
   

  	
  Event of Default

  	
  81

  
	
  Section 10.2

  	
   

  	
  Remedies

  	
  83

  
	
  Section 10.3

  	
   

  	
  Right to Cure Defaults

  	
  84

  
	
  Section 10.4

  	
   

  	
  Remedies Cumulative

  	
  84

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1

  	
   

  	
  Successors and Assigns

  	
  85

  
	
  Section 11.2

  	
   

  	
  Lender’s Discretion

  	
  85

  
	
  Section 11.3

  	
   

  	
  Governing Law

  	
  85

  
	
  Section 11.4

  	
   

  	
  Modification, Waiver in Writing

  	
  87

  
	
  Section 11.5

  	
   

  	
  Delay Not a Waiver

  	
  87

  
	
  Section 11.6

  	
   

  	
  Notices

  	
  87

  
	
  Section 11.7

  	
   

  	
  Trial by Jury

  	
  88

  
	
  Section 11.8

  	
   

  	
  Headings

  	
  88

  
	
  Section 11.9

  	
   

  	
  Severability

  	
  88

  
	
  Section 11.10

  	
   

  	
  Preferences

  	
  88

  
	
  Section 11.11

  	
   

  	
  Waiver of Notice

  	
  88

  
	
  Section 11.12

  	
   

  	
  Remedies of Borrower

  	
  89

  
	
  Section 11.13

  	
   

  	
  Expenses; Indemnity

  	
  89

  
	
  Section 11.14

  	
   

  	
  Schedules Incorporated

  	
  90

  
	
  Section 11.15

  	
   

  	
  Offsets, Counterclaims and Defenses

  	
  90

  
	
  Section 11.16

  	
   

  	
  No Joint Venture or Partnership; No
  Third Party Beneficiaries

  	
  90

  
	
  Section 11.17

  	
   

  	
  Publicity

  	
  91

  
	
  Section 11.18

  	
   

  	
  Waiver of Marshalling of Assets

  	
  91

  
	
  Section 11.19

  	
   

  	
  Waiver of
  Offsets/Defenses/Counterclaims

  	
  91

  
	
  Section 11.20

  	
   

  	
  Conflict; Construction of
  Documents; Reliance

  	
  91

  
	
  Section 11.21

  	
   

  	
  Brokers and Financial Advisors

  	
  91

  
	
  Section 11.22

  	
   

  	
  Exculpation

  	
  92

  
	
  Section 11.23

  	
   

  	
  Prior Agreements

  	
  94

  
	
  Section 11.24

  	
   

  	
  Servicer

  	
  94

  
	
  Section 11.25

  	
   

  	
  Joint and Several Liability

  	
  95

  
	
  Section 11.26

  	
   

  	
  Creation of Security Interest

  	
  95

  
	
  Section 11.27

  	
   

  	
  Assignments and Participations

  	
  95

  
					

 

v

 

SCHEDULES

 

	
  Schedule
  I

  	
  –

  	
   

  	
  Rent
  Roll

  
	
  Schedule
  II

  	
  –

  	
   

  	
  Required
  Repairs

  
	
  Schedule
  III

  	
  –

  	
   

  	
  Organizational
  Chart

  
	
  Schedule
  IV

  	
  –

  	
   

  	
  Form
  of Subordination, Non-Disturbance and Attornment Agreement

  
	
  Schedule
  V

  	
  –

  	
   

  	
  Intentionally
  Omitted

  
	
  Schedule
  VI

  	
  –

  	
   

  	
  Unfunded
  Tenant Allowances

  
	
  Schedule
  VII

  	
  –

  	
   

  	
  Physical
  Condition Report

  

 

vi

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT, dated as of October 3, 2006 (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, this “Agreement”), by and between
MERRILL LYNCH MORTGAGE LENDING, INC., a Delaware corporation having an address
at 4 World Financial Center, New York, New York 10080 (“Lender”),
and 10/120 SOUTH RIVERSIDE FEE LLC (“Fee Borrower”)
and 10/120 SOUTH RIVERSIDE PROPERTY LLC (“Leasehold Borrower”;
together with Fee Borrower, “Borrower”), each a Delaware
limited liability company,
having an address c/o Beacon Capital Partners, LLC at One Federal Street, 26th
Floor, Boston, Massachusetts 02110 (“Borrower”).

 

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

 

W  I  T  N  E  S  S  E  T
H :

 

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

 

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

 

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

 

I.              DEFINITIONS; PRINCIPLES
OF CONSTRUCTION

 

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

 

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

 

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

 

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

 

“Air Rights Lease”
shall mean, collectively, (a)(i) Lease dated September 13, 1963 by and
among CUSCO, The Pennsylvania Railroad Company and Pittsburgh, Fort Wayne

 

 

and Chicago Railway Company, collectively as Lessor,
and Tishman-Gateway, Inc., and LaSalle National Bank as Trustee under Trust
Agreement dated September 5, 1963 and known as Trust Number 31511, jointly as
Lessee, as recorded with the Cook County Recorder on September 18, 1963 as
Document No. 18917214,
(ii) Supplement to Lease dated June 21, 1966 by and among CUSCO, The
Pennsylvania Railroad Company and Pittsburgh, Fort Wayne and Chicago Railway
Company, collectively as Lessor, and Tishman-Gateway, Inc., and LaSalle National
Bank as Trustee under Trust Agreement dated September 5, 1963 and known as
Trust Number 31511, jointly as Lessee, as recorded with the Cook County
Recorder on July 12, 1966 as Document No. 19881999, (iii) Second Supplement to
Lease dated November 29, 1977 by and among CUSCO, Penn Central Transportation
Company and Pittsburgh, Fort Wayne and Chicago Railway Company, collectively as
Lessor, and The Equitable Life Assurance Society of the United States, as
Lessee, as recorded with the Cook County Recorder on November 30, 1977 as
Document Nos. 24217073, 24217074 and 24217075, (iv) Third Supplement to Lease
dated March 21, 1989 by and among CUSCO and The Penn Central Corporation,
collectively as Lessor, and LaSalle National Bank as Trustee under Trust Agreement
dated December 1, 1983 and known as Trust Number 107361, as Lessee, as recorded
with the Cook County Recorder as Document No. 89173332, (v) Assignment &
Assumption of Ground Lease from H, B-H Associates to TrizecHahn Regional
Pooling LLC dated May 17, 2001 and recorded June 5, 2001 as Document No.
0010481879, (vi) Assignment and Assumption of Lease by PCC 38 Corp., as
assignor, to TrizecHahn 10/120 Fee LLC, dated May 31, 2002 and recorded June 6,
2002 as Document No. 0020634439, (vii) Side Letter dated March 21, 1989, (viii)
Letter dated July 1, 1977 by American Premier Underwriters, Inc. to CUSCO
regarding assignment to PCC 38 Corp., (ix) Master Lease dated April 19, 1989 by
and among CUSCO, as Lessor, and LaSalle National Bank as Trustee under Trust
Agreement dated December 1, 1983 and known as Trust No. 107361, as Lessee, as
recorded with the Cook County Recorder as Document No. 89173338, together with
Side Letter from CUSCO, dated April 19, 1989 (regarding Gross Income
calculation), Clarification Letter from CUSCO dated April 19, 1989
(clarification regarding the Base Year for Gross Income calculation) and Lessor’s
Estoppel Certificate dated May 16, 2001, (x) Assignment and Assumption of Master Leases by Chicago Union Station
Company, as assignor, to TrizecHahn 10/120 Fee LLC, as assignee, dated November
8, 2001 and recorded November 16, 2001 as Document No. 0011080262, (xi)
Assignment and Assumption of Ground Lease between H, B-H Associates to
TrizecHahn Regional Pooling LLC dated May 17, 2001 and recorded June 5, 2001 as
Document No. 00110481878, (xii) Amendment to Lease between TrizecHahn
10/120 Fee LLC as Lessor and TrizecHahn Regional Pooling LLC as Lessee, dated
as of May 31, 2002 and recorded June 6, 2002 with the Cook County Recorder as
Document No. 0020634441, (xiii) Assignment and Assumption of Ground Lease, 10
South Riverside, Chicago, Illinois (Lessor’s Interest) by and between
TrizecHahn 10/120 Fee LLC and 10/120 South Riverside Fee LLC dated and recorded
on or about the date hereof, and (xiv) Assignment and Assumption of Ground
Lease, 10 South Riverside, Chicago, Illinois (Lessee’s Interest) by and between
TrizecHahn Regional Pooling LLC and 10/120 South Riverside Property LLC dated
and recorded on or about the date hereof and (b)(i) Lease dated July 1, 1965 by
and among CUSCO, The Pennsylvania Railroad Company and Pittsburgh, Fort Wayne
and Chicago Railway Company, collectively as Lessor, and Tishman-Monroe, Inc.,
and LaSalle National Bank as Trustee under Trust Agreement dated June 3, 1965
and known as Trust Number 33724, jointly as Lessee, as recorded with the Cook
County Recorder on October 14, 1965 as Document No. 19618053, (ii) Supplement
to Lease dated November 21, 1967 by and among CUSCO, The

 

2

 

Pennsylvania Railroad Company and Pittsburgh, Fort
Wayne and Chicago Railway Company, collectively as Lessor, and Tishman-Monroe,
Inc., and LaSalle National Bank as Trustee under Trust Agreement dated June 3,
1965 and known as Trust Number 33724, jointly as Lessee, as recorded with the
Cook County Recorder on January 3, 1968 as Document No. 20370303, (iii) Second
Supplement to Lease dated November 29, 1977 by and among CUSCO, Penn Central
Transportation Company and Pittsburgh, Fort Wayne and Chicago Railway Company,
collectively as Lessor, and The Equitable Life Assurance Society of the United
States, as Lessee, as recorded with the Cook County Recorder on November 30,
1977 as Document Nos. 24217076, 24217077 and 24217078, (iv) Third Supplement to
Lease dated March 21, 1989 by and among CUSCO and The Penn Central Corporation,
collectively as Lessor, and LaSalle National Bank as Trustee under Trust
Agreement dated December 1, 1983 and known as Trust Number 107362, as Lessee,
as recorded with the Cook County Recorder as Document No. 89173333, (v)
Assignment and Assumption of Ground Lease from Solano Associates to TrizecHahn
Regional Pooling LLC dated May 17, 2001 and recorded on June 5, 2001 as
Document No. 0010481862, (vi) Assignment and Assumption of Lease by AFC Coal
Properties, Inc., as assignor, to TrizecHahn 10/120 Fee LLC, as assignee, dated
May 31, 2002 and recorded June 6, 2002 as Document No. 0020634434, (vii) Side
Letter dated March 21, 1989, (viii) Letter dated July 1, 1977 by American Premier
Underwriters, Inc. to CUSCO regarding assignment to AFC Coal Properties, Inc.,
(ix) Master Lease dated April 19, 1989 by and among CUSCO, as Lessor, and
LaSalle National Bank as Trustee under Trust Agreement dated December 1, 1983
and known as Trust No. 107362, as Lessee, as recorded with the Cook County
Recorder as Document No. 89173339, together with Side Letter from CUSCO, dated
April 19, 1989 (regarding Gross Income calculation), Clarification Letter from
CUSCO dated April 19, 1989 (clarification regarding the Base Year for Gross
Income calculation) and Lessor’s Estoppel Certificate dated May 16, 2001, (x) Assignment and Assumption of Lease by The
Equitable Life Assurance Society of the United States to Solano Associates
pursuant to Assignment and Assumption of Lease dated December 9, 1998 and
recorded March 17, 1999 as Document No. 9928508, (xi) Assignment and Assumption
of Ground Lease (CUSCO) by Solano Associates to TrizecHahn Regional Pooling LLC
dated May 17, 2001 and recorded June 5, 2001 as Document No. 0010481861, (xii)
Assignment and Assumption of Master Leases by CUSCO to TrizecHahn 10/120 Fee
LLC dated November 8, 2001 and recorded November 16, 2001 as Document
0011080262, (xiii) Amendment to Lease between TrizecHahn 10/120 Fee LLC
as Lessor and TrizecHahn Regional Pooling LLC as Lessee, dated as of May 31,
2002 and recorded June 6, 2002 with the Cook County Recorder as Document No.
0020634436, (xiv) Assignment and Assumption of Ground Lease, 120 South
Riverside, Chicago, Illinois (Lessor’s Interest) by and between TrizecHahn
10/120 Fee LLC and 10/120 South Riverside Fee LLC dated and recorded on or
about the date hereof, and (xv) Assignment and Assumption of Ground Lease, 120
South Riverside, Chicago, Illinois (Lessee’s Interest) by and between
TrizecHahn Regional Pooling LLC and 10/120 South Riverside Property LLC dated
and recorded on or about the date hereof.

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

“Beacon Entity”
shall mean BCSP IV U.S. Investments, L.P., a Delaware limited partnership.

 

“Borrower”
shall have the meaning set forth in the preamble to this Agreement, together
with their respective permitted successors and assigns. The term “Borrower”, as
used herein, shall mean each entity constituting Borrower, collectively, or any
Borrower or each Borrower, as the context shall require.

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“CUSCO” shall mean Chicago Union
Station Company.

 

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

 

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

 

“Debt Service Coverage
Ratio” shall mean the ratio of (i) the projected Net Cash Flow
(as hereinafter defined) for the twelve (12) calendar month period immediately
following the date of calculation to (ii) the projected Debt Service that would
be due for the twelve (12) calendar month period immediately following such
calculation. For purposes of calculating the Debt Service Coverage Ratio, the “projected
Net Cash Flow” shall be deemed to be equal to the projected Gross Revenues for
the twelve (12) calendar month period immediately following the date of
calculation (based on, subject to the last sentence of this definition, Leases
in place, whether or not the applicable Tenants have commenced paying rents
thereunder so long as such Tenants are obligated to commence rent payments
during the six (6) calendar month period immediately following the date of
calculation) less (a) the actual Operating Expenses during the twelve (12)
calendar month period immediately preceding the date of calculation (provided
that (x) with respect to the quarter ending December 31, 2006, such
Operating Expenses shall be calculated by annualizing Operating Expenses for
the three (3) calendar month period

 

5

 

immediately preceding the
date of calculation, (y) with respect to the quarter ending March 31, 2007,
such Operating Expenses shall be calculated by annualizing Operating Expenses
for the six (6) calendar month period immediately preceding the date of
calculation and (z) with respect to the quarter ending June 30, 2007, such
Operating Expenses shall be calculated by annualizing Operating Expenses for
the nine (9) calendar month period immediately preceding the date of
calculation), (b) an amount equal to $350,000 in respect of projected Capital
Expenditures for the twelve (12) calendar month period immediately following
the date of calculation and (c) an amount equal to $1,350,000 in respect of
projected tenant improvements, leasing commissions and other leasing costs for
the twelve (12) calendar month period immediately following the date of
calculation. In connection with each calculation of Debt Service Coverage
Ratio, Borrower shall provide back-up documentation reasonably acceptable to
Lender. Notwithstanding anything to the contrary contained herein or in any
other Loan Document, for purposes of calculating the Debt Service Coverage
Ratio, the projected Gross Revenues attributable to any Lease which may be
terminated without cause by the tenant thereunder upon less than six (6) months’
notice (including, without limitation, the Trizec Lease) shall be excluded.

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

“Environmental Report”
shall mean, collectively, (i) that certain Report on ASTM Phase I Environmental
Site Assessment, Drinking Water Sampling, Asbestos Survey and IAQ Assessment,
10 South Riverside, Chicago, Illinois, prepared by Haley & Aldrich, Inc.,
File No. 33523-000, dated September 21, 2006, and the reports and the other
documents attached thereto and/or referred to therein, and (ii) that certain
Report on ASTM Phase I Environmental Site Assessment, Drinking Water Sampling,
Asbestos Survey and IAQ Assessment, 120 South Riverside, Chicago, Illinois,
prepared by Haley & Aldrich, Inc., File No. 33523-000, dated September 21,
2006, and the reports and the other documents attached thereto and/or referred
to therein.

 

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

 

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

 

“Escrow Reserve Period”
means any period commencing on the first Business Day after the occurrence of
the Escrow Reserve Trigger Event through the first Business Day after Lender’s
determination, in its reasonable judgment, that (i) the applicable Event of
Default giving rise to such Escrow Reserve Trigger Event no longer exists and
(ii) no other Event of Default has occurred and is then continuing.

 

“Escrow Reserve
Trigger Event” shall mean the occurrence
and continuance of an Event of Default.

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

“Fitch”
shall mean Fitch, Inc.

 

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

 

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

 

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

 

“Guarantor” shall mean Beacon
Capital Strategic Partners IV,
L.P., a Delaware limited partnership., in its capacity as guarantor
under the Guaranty, or any other Person reasonably approved by Lender (or, if a
Securitization has occurred, approved by the Rating Agencies).

 

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

 

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

 

“Indebtedness” shall mean, for any
Person, without duplication: (i) all indebtedness of such Person for borrowed
money, for amounts drawn under a letter of credit, or for the deferred purchase
price of property for which such Person or its assets is liable, (ii) all
unfunded amounts under a loan agreement, letter of credit, or other credit
facility for which such Person would be liable if such amounts were advanced
thereunder, (iii) all amounts required to be paid by such Person as a
guaranteed payment to partners, including any mandatory redemption of shares or
interests but excluding any preferred return or special dividend paid solely
from, and to the extent of, excess cash flow after the payment of operating
expenses,

 

8

 

capital
improvements and debt service on all indebtedness, (iv) all indebtedness
guaranteed by such Person, directly or indirectly, (v) all obligations under
leases that constitute capital leases for which such Person is liable, and (vi)
all obligations of such Person under interest rate swaps, caps, floors, collars
and other interest hedge agreements, in each case whether such Person is liable
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss.

 

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

 

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

 

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

 

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

 

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

 

“Interest
Rate” means, as to Note A, the Note A Rate and as to Note
B, the Note B Rate.

 

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

 

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

 

“Lease”
shall mean any lease, sublease or subsublease, letting, license, concession or
other agreement (whether written or oral and whether now or hereafter in
effect) pursuant to which any Person is granted a possessory interest in, or
right to use or occupy all or any portion of any space in the Real Property,
and every modification, amendment or other agreement relating to such lease,
sublease, subsublease, or other agreement entered into in connection with such
lease, sublease, subsublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto, other than (i) subleases or
sub-subleases in which Borrower has no interest, (ii) the Air Rights Lease, and
(iii) the REOA or any other easements, reciprocal easement agreements and
similar agreements.

 

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

 

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

 

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

 

“Legal Requirements”
shall mean all federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and

 

9

 

injunctions of Governmental
Authorities affecting Borrower or the Property or any part thereof or the
construction, use, alteration or operation thereof, or any part thereof,
whether now or hereafter enacted and in force, including, without limitation,
the Americans with Disabilities Act of 1990, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record or
known to Borrower as being intended to be of record, at any time in force
affecting the Property or any part thereof, including, without limitation, any
which may (i) require repairs, modifications or alterations in or to the
Property or any part thereof, or (ii) in any way limit the use and enjoyment
thereof.

 

“Lender”
shall mean Merrill Lynch Mortgage Lending, Inc., together with its successors
and assigns.

 

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

 

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

 

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

 

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

 

“Loan” shall
mean the loan in the original principal amount of Two Hundred Twenty-Five
Million and No/100 Dollars ($225,000,000.00) made by Lender to Borrower
pursuant to this Agreement.

 

“Loan Amount”
shall mean $225,000,000.00.

 

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

 

10

 

“Major Lease”
shall mean any Lease (i) covering more than 37,000 square feet at the Property
or (ii) made with a Tenant that is a Tenant under another Lease at the Property
or that is an Affiliate of any other Tenant under a Lease at the Property, if
the Leases together cover more than 37,000 square feet.

 

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

 

“Manager”
shall mean 10/120 South Riverside Illinois Property Manager LLC, a Delaware
limited liability company, or another Affiliate of Beacon Entity or any other
manager approved in accordance with the terms and conditions of Section 7.3
hereof.

 

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

 

“Material Agreements”
means each contract and agreement relating to the ownership, management,
development, use, operation, leasing, maintenance, repair or improvement of the
Property other than (i) the Air Rights Lease, (ii) the REOA, (iii) the
Management Agreement and union contracts related to the provision of
services to the Property, (iv)
the Leases, (v) contracts or agreements for tenant improvements at the
Property, provided such contracts or agreements are on commercially reasonable
terms, (vi) service contracts or contracts for the provision of utility
services, and (vii) contracts and agreements (x) which are terminable on thirty
(30) days’ or less notice without payment of any material termination fee or
penalty, (y) under which Borrower is not obligated to pay more than $750,000
per annum or (z) under which Lender or its designee would not be directly or
indirectly bound in the event that Lender or its designee succeeded to the
ownership of the Property as the result of a foreclosure or a deed in lieu
thereof.

 

“Maturity Date”
shall mean November 1, 2011 or such other date on which the final payment of
principal of the Note becomes due and payable as therein or herein provided,
whether at such stated maturity date, by declaration of acceleration, or
otherwise.

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

“Mezzanine Loan Agreement” shall
mean the mezzanine loan agreement which evidences and governs the Mezzanine
Loan between Mezzanine Lender and Mezzanine Borrower, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

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

 

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

 

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

 

“Monthly Payment Date”
shall mean the first (1st) day of every calendar month occurring
during the term of the Loan commencing with November 2006.

 

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

 

“Mortgage”
shall mean that certain first priority Fee and Leasehold Mortgage, Assignment
of Leases and Rents and Security Agreement, dated as of the date hereof,
executed and delivered by Borrower as security for the Loan and encumbering the
Property, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

“Net Operating Income”
shall mean Gross Revenues less Operating Expenses.

 

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

 

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

 

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

 

12

 

“Note” means, collectively, the Note A and the
Note B.

 

“Note
A” means that certain Promissory Note A, dated the
date hereof, made by Borrower to the order of Lender in the original principal
amount of $200,000,000.00, as the same may hereafter be amended, supplemented, restated, increased,
extended or consolidated from time to time.

 

“Note
A Rate” means a rate per annum equal to 6.05%.

 

“Note
B” means that certain Promissory Note B, dated the
date hereof, made by Borrower to the order of Lender in the original principal
amount of $25,000,000.00, as the same may hereafter be amended, supplemented, restated, increased,
extended or consolidated from time to time.

 

“Note
B Rate” means a rate per annum equal to 6.05%.

 

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

 

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

 

“Operating Expenses”
shall mean, as calculated in accordance with GAAP, all costs and expenses
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, equipment lease payments and the annual management fee, but excluding
actual Capital Expenditures, tenant improvements, leasing commissions and other
leasing costs, depreciation, amortization, Extraordinary Expenses, deposits
required to be made to the Reserve Funds, Debt Service and debt service on the
Mezzanine Loan, if any; provided, however, such costs and expenses shall be
subject to adjustment by Lender to normalize such costs and expenses.

 

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

 

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

 

“Permitted Encumbrances”
shall mean, collectively, (i) the Liens and security interests created by the
Loan Documents, (ii) all Liens, encumbrances and other matters (including,
without limitation, the Air Rights Lease and the REOA) disclosed in the Title
Insurance Policy, (iii) Liens, if any, for Taxes or Other Charges imposed by
any Governmental Authority not yet due or delinquent, (iv) Leases and equipment
leases (or equipment lease financings) existing as of the date hereof, (v) Leases
and equipment leases (or equipment lease financings) entered into after the
date hereof in accordance with the terms of the Loan Documents, and (vi) such
other title and survey exceptions as Lender has approved or may approve in
writing in Lender’s reasonable discretion.

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Physical Condition Report”
shall mean that certain physical condition report set forth on Schedule VII
hereto.

 

14

 

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

 

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

 

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

 

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

 

“Property”
shall mean each parcel of real property, the Improvements thereon, and all
personal property owned by Borrower (or leased pursuant to the Air Rights Lease
by Borrower), and encumbered by the Mortgage, together with all rights
pertaining to such property and Improvements, all as more particularly
described in the Granting Clauses of the Mortgage.

 

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

 

“Qualified Mezzanine Lender” shall
mean one or more of the following: (i) a real estate investment trust, bank,
saving and loan association, investment bank, insurance company, trust company,
commercial credit corporation, pension plan, pension fund or pension advisory
firm, mutual fund, government entity or plan, (ii) investment company, money
management firm or “qualified institutional buyer” within the meaning of Rule
144A under the Securities Act of 1933, as amended, or an institutional “accredited
investor” within the meaning of Regulation D under the Securities Act of 1933,
as amended, which is regularly engaged in the business of making or owning
loans of similar types to the Mezzanine Loan or the Loan, (iii) a Qualified
Trustee in connection with a securitization of, or the creation of
collateralized debt obligations (“CDO”)
secured by or financing through an “owner trust” of, the Mezzanine Loan, so
long as (A) the special servicer or manager of such securitization, CDO or
trust has the Required Special Servicer Rating, (B) the “controlling class” of
such securitization vehicle is held by a Qualified Mezzanine Lender and (C) the
operative documents of the related securitization vehicle, CDO or financing
must require that (1) the “controlling class” or “equity interest” in such
securitization vehicle or CDO are owned by a Permitted Transferee or a
Permitted Investment Fund and (2) if any of the relevant trustee, special
servicer, manager or controlling class fails to meet the requirements of such
clause, such entity must be replaced by a qualifying entity within 30 days, (iv)
an investment fund, limited liability company, limited partnership or general
partnership (a “Permitted Investment Fund”)
where a Qualified Mezzanine Lender or a Permitted Fund Manager acts as the
general partner, managing member or fund manager and at least 50% of the equity
interests in such Permitted Investment Fund are owned, directly or indirectly,
by one or more of the following: a Qualified Mezzanine Lender, an

 

15

 

institutional “accredited investor”, within the
meaning of Regulation D promulgated under the Securities Act of 1933, as
amended, and/or a “qualified institutional buyer” or both within the meaning of
Rule 144A promulgated under the Securities Exchange Act of 1934 (provided each
institutional “accredited investor” or “qualified institutional buyer” meets
the test set forth in clause (vi) (A) below), as amended, (v) any other lender
or entity (including any opportunity funds) regularly engaged in the business
of making mezzanine loans which has been approved as a Qualified Mezzanine
Lender hereunder by the Rating Agencies, (vi) an institution substantially
similar to any of the foregoing entities described in clauses (i) or (ii) of
this definition, and as to each of the entities described in clauses (i), (ii)
and (vi) provided such entity (A) has total assets (in name or under
management) in excess of $1,000,000,000 and (except with respect to a pension
advisory firm or similar fiduciary) capital/statutory surplus or shareholder’s
equity of $500,000,000; and (B) is regularly engaged in the business of making
or owning commercial real estate loans or commercial loans secured by a pledge
of interests in a mortgage borrower or owning and operating commercial real
property or (vii) any entity controlled (as defined below) by any one or more
of the entities described in clause (i) through (vi) of this definition. For
purposes of this definition only, “control” means the ownership, directly or
indirectly, in the aggregate of more than fifty percent (50%) of the beneficial
ownership interest of an entity and the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of an
entity, whether through the ability to exercise voting power, by contract or
otherwise. A “Qualified Trustee” means (i) a
corporation, national bank, national banking association or a trust company,
organized and doing business under the laws of any state or the United States
of America, authorized under such laws to exercise corporate trust powers and
to accept the trust conferred, having a combined capital and surplus of at
least $100,000,000 and subject to supervision or examination by federal or
state authority, (ii) an institution insured by the Federal Deposit Insurance Corporation
or (iii) an institution whose long-term senior unsecured debt is rated either
of the then in effect top two rating categories of S&P and either Fitch or
Moody’s (provided, however, if the Loan has been securitized, the rating
requirement of any agency not a Rating Agency will be disregarded). “Required Special Servicer Rating”  means a special servicer rating of “CSS1” in the case of
Fitch, a servicer on its approved list of special servicers in the case of
S&P and, in the case of Moody’s, a special servicer that is acting as
special servicer in a commercial mortgage loan securitization that was rated by
Moody’s within the six month period prior to the date of determination and
Moody’s has not downgraded or withdrawn the then-current rating on any class of
commercial mortgage securities or placed any class of commercial mortgage
securities on watch citing the continuation of such special servicer as special
servicer of such commercial mortgage securities (provided, however, the
requirement of any agency not a Rating Agency shall be disregarded). “Permitted Fund Manager” means any
entity which is not subject to a bankruptcy proceeding and (a) as determined by
Lender has been approved from time to time by the Rating Agencies as the
general partner, managing member or fund manager of a Permitted Investment
Fund, or (b) is a nationally - recognized manager of investment funds investing
in debt or equity interests relating to commercial real estate which is
investing through a fund which has committed capital of at least $500,000,000.

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

“Related Property”
means a parcel of real property, together with improvements thereon and
personal property related thereto, that is “related”, within the meaning of the
definition of Significant Obligor, to all or part of the Property.

 

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

 

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

 

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

 

“REOA” shall
mean, collectively, (i) that certain Easement and Operating Agreement
made by CUSCO and TrizecHahn 10/120 Fee LLC, dated as of November 8, 2001 and
recorded November 16, 2001 in the Office of the Recorder of Deeds of Cook
County, Illinois, as document 0011080264, as amended by that certain Amendment
to Easement and Operating Agreement dated as of May 31, 2002 recorded June 6,
2002 in the Office of the Recorder of Deeds of Cook County, Illinois, as
document 0020634435, and (ii) that certain Easement and Operating Agreement
made by CUSCO and TrizecHahn 10/120 Fee LLC, dated as of November 8, 2001 and
recorded November 16, 2001 in the Office of the Recorder of Deeds of Cook
County, Illinois, as document 0011080263, as amended by that certain Amendment
to Easement and Operating Agreement dated as of May 31, 2002 and recorded June
6, 2002 in the Office of the Recorder of Deeds of Cook County, Illinois, as
document 0020634440.

 

“REOA Estoppel”
shall mean, collectively, (i) the REOA Estoppel Certificate executed by CUSCO
with respect to 10 South Riverside, Chicago, Illinois and dated September 22,
2006 and (ii) the REOA Estoppel Certificate executed by CUSCO with respect to
120 South Riverside, Chicago, Illinois and dated September 22, 2006.

 

17

 

“Replacement Lease”
shall have the meaning set forth in Section 6.5.1.

 

“Required Repairs”
shall have the meaning set forth in Section 4.21.

 

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

 

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

 

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

 

“Rollover Funds”
shall have the meaning set forth in Section 6.5.1.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“TRIA” shall mean
the Terrorism Risk Insurance Act of 2002, as amended, or similar Federal
statute.

 

“Trizec Lease”
shall mean, collectively, (i) that certain Lease dated January 18, 2005 between
Leasehold Borrower’s predecessor-in-interest, as landlord, and Trizec Holdings,
LLC, as tenant, for approximately 57,048 square feet at 10 South Riverside,
Chicago, Illinois, (ii) that certain Lease dated November 29, 2004 between
Leasehold Borrower’s predecessor-in-interest, as landlord, and Trizec Holdings,
LLC, as tenant, for approximately 8,427 square feet at 10 South Riverside,
Chicago, Illinois, and (iii) the lease or occupancy agreement between Leasehold
Borrower’s predecessor-in-interest, as landlord, and Trizec Office Properties,
as tenant, for approximately 2,994 square feet at 120 South Riverside, Chicago,
Illinois, each as amended or otherwise modified on or prior to the date hereof
and each as may hereafter be amended or otherwise modified from time to time in
accordance with the terms set forth in this Agreement.

 

“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 applicable jurisdiction.

 

19

 

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

 

“Unfunded Tenant Allowances”
shall mean, collectively, (i) the amounts specifically set forth in any UTA
Lease as a payment to or on behalf of, or a reimbursement due to, a tenant from
Borrower and (ii) the leasing commissions payable by Borrower in connection
with any UTA Lease, in each case as specifically set forth on Schedule VI.

 

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

 

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

 

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

 

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

 

“UTA Leases” shall
mean the Leases set forth on Schedule VI attached hereto, with respect
to which Leases there are Unfunded Tenant Allowances.

 

“Yield Maintenance Premium”
shall mean an amount equal to the greater of (a) one percent (1%) of the
outstanding principal balance of the Loan to be prepaid and (b) the present
value as of the Prepayment Date of the Calculated Payments from the Prepayment
Date through August 1, 2011 determined by discounting such payments at the
Discount Rate. As used in this definition, the term “Calculated Payments” shall mean the
monthly payments of interest only which would be due based on the principal
amount of the Loan being prepaid on the Prepayment Date and assuming an
interest rate per annum equal to the difference (if such difference is greater
than zero) between (y) the Interest Rate and (z) the Yield Maintenance Treasury
Rate. As used in this definition, the term “Discount Rate” shall mean the rate equal to the sum of (i)
the rate which, when compounded monthly, is equivalent to the Yield Maintenance
Treasury Rate, when compounded semi-annually and (ii) 0.25%. 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 August 1, 2011. In the
event Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Yield Maintenance Treasury Rate. In no event,
however, shall Lender be required to reinvest any prepayment proceeds in U.S.
Treasury obligations or otherwise.

 

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

 

20

 

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 has made the Loan to Borrower and
Borrower has accepted the Loan from Lender.

 

2.1.2       Single Disbursement to
Borrower.  Borrower shall receive
no further borrowings hereunder in respect of the Loan and any amount borrowed
and repaid hereunder in respect of the Loan may not be reborrowed.

 

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

 

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

 

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

 

21

 

Section 2.2            Interest Rate.

 

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

 

2.2.2       Intentionally Omitted.

 

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

 

2.2.4       Interest Calculation.  Interest on the outstanding principal balance
of the Loan shall be calculated by multiplying (a) the actual number of days
elapsed in the period for which the calculation is being made by (b) a daily
rate based on a three hundred sixty (360) day year (that is, the Interest Rate
or the Default Rate, as then applicable, expressed as an annual rate divided by
360) by (c) the outstanding principal balance. The accrual period for
calculating interest due on the Monthly Payment Date occurring in November 2006
shall be the period from the date hereof through and including October 31, 2006
and the accrual period for calculating interest due on each Monthly Payment
Date thereafter shall be the period from the first (1st) day through
and including the last day of the calendar month immediately prior to such
Monthly Payment Date.

 

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

 

Section 2.3            Loan Payments.

 

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

 

22

 

continuing,
each payment shall be applied to the accrued and unpaid interest on the Loan. Upon
the occurrence and during the continuance of an Event of Default, all payments
shall, at Lender’s election, be applied (i) first, to accrued and unpaid
interest under the Note A; (ii) second, to the outstanding principal
balance of the Note A until the Note A is paid in full; (iii) third,
to accrued and unpaid interest under the Note B, and (iv) lastly, to the
outstanding principal balance of the Note B. Any Net Proceeds applied to the
Debt by Lender in accordance with this Agreement shall, at Lender’s election,
be applied in accordance with the order of priority set forth in the
immediately preceding sentence.

 

2.3.2       Intentionally Omitted.

 

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

 

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

 

2.3.5       Method and Place of
Payment.  (a)  Except as otherwise specifically provided
herein, all payments and prepayments under this Agreement and the Note shall be
made to Lender not later than 1:00 p.m., New York City time, on the date when
due and shall be made in lawful money of the United States of America in
immediately available funds at Lender’s office, and any funds received by
Lender after such time shall, for all purposes hereof, be deemed to have been
paid on the next succeeding Business Day. Solely for purposes of determining
whether an Event of Default has occurred or a Late Payment Charge is payable,
payments from the Accounts shall be deemed to be made, provided sufficient
funds are on deposit in the Accounts for the purposes intended on the date such
payments are due and Borrower has not attempted to prevent or delay any
disbursement by Agent of any such amounts from the Accounts.

 

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

 

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

 

2.3.6       Payments After Event of
Default.  Any amounts received by
Lender following the occurrence and continuance of an Event of Default shall be
applied by Lender

 

23

 

toward the
payment of interest and/or principal of Loan and/or any other amounts due under
the Loan Documents in such order, priority and proportions as Lender in its
sole discretion shall deem proper.

 

Section 2.4            Prepayments.

 

2.4.1       Voluntary Prepayments.  Except as otherwise provided herein, Borrower
shall not have the right to prepay the Loan in whole or in part. Borrower may,
at its option, prepay the Debt in whole (but not in part), provided the
following conditions are satisfied: (a) no Event of Default has occurred and is
continuing; (b) Borrower provides Lender with not less than fifteen (15) days
prior notice of the date of such prepayment (or such shorter period of time as
may be permitted by Lender in its sole discretion); (c) if such prepayment
is made prior to August 1, 2011, Borrower shall also pay to Lender the Yield
Maintenance Premium; provided, however, if such prepayment is made on or after
August 1, 2011, no Yield Maintenance Premium shall be payable by Borrower to
Lender; and (d) if any prepayment is received by Lender on a date other than a
Monthly Payment Date, such prepayment shall include interest which would have
accrued thereon to (but not including) the next Monthly Payment Date and such
amounts (i.e., principal and interest prepaid by Borrower) shall be held by
Lender as collateral security for the Loan in an interest bearing account at an
Eligible Institution, with interest accruing on such amounts to the benefit of
Borrower, and such amounts prepaid shall be applied to the Loan on the next
Monthly Payment Date, with any interest on such funds paid to Borrower on such
date provided no Event of Default then exists.

 

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

 

2.4.3       Prepayments After
Default.  If after the occurrence
and during the continuance of an Event of Default, payment of all or any part
of the principal of the Loan is tendered by Borrower, a purchaser at
foreclosure or any other Person, such tender shall be deemed an attempt to
circumvent the prohibition against prepayment set forth in Section 2.4.1
and Borrower, such purchaser at foreclosure or other Person shall pay to Lender
the outstanding

 

24

 

principal
balance of the Loan, all accrued and unpaid interest thereon, all other amounts
payable under the Loan Documents, plus, if any such prepayment is made prior to
August 1, 2011, a payment equal to the Yield Maintenance Premium. The full
amount of any such prepayment shall be applied by Lender toward the payment of
interest and/or principal of the Loan and/or any other amounts due under the
Loan Documents in such order, priority and proportions as Lender in its sole
discretion shall deem proper.

 

Section 2.5            Release.

 

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

 

Section 2.6            Permitted Mezzanine
Loan.

 

2.6.1       Mezzanine Loan.  Notwithstanding anything to the contrary
contained herein or in any other Loan Document, on or after January 1, 2007,
Mezzanine Borrower shall be permitted to incur the Mezzanine Loan provided the
following conditions are satisfied:

 

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

 

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

 

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

 

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

 

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

 

(vi)          The
loan-to-value ratio, the numerator of which is the sum of (A) the outstanding
principal amount of the Loan and (B) the principal amount of the Mezzanine
Loan, and the denominator of which is equal to the then current appraised value
of the Property (based

 

25

 

on an updated
appraisal obtained by Borrower at Borrower’s sole cost and expense and
reasonably acceptable to Lender), shall be no greater than eighty percent
(80%).

 

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

 

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

 

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

 

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

 

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

 

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

 

(xiii)         If
the Mezzanine Loan bears interest at a variable rate, the Mezzanine Borrower
shall have obtained and shall maintain during the term of the Loan an interest
rate cap from a counterparty reasonably acceptable to Lender and the Rating
Agencies with a fixed strike price and an interest rate spread such that the
blended, weighted average interest rate of (A) the aggregate of such strike
price and such spread and (B) the Interest Rate is no greater than eight and a
half percent (8.50%) per annum.

 

(xiv)        If
the Mezzanine Loan bears interest at a fixed rate, the blended, weighted average
interest rate of (A) such fixed rate and (B) the Interest Rate shall be no
greater than eight and a half percent (8.50%) per annum.

 

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

 

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

 

26

 

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

 

(xviii)      Mezzanine
Borrower and any other pledgors, if any, of interests in Borrower, shall be
structured into the organizational structure of Borrower in a manner such as
not to adversely affect the bankruptcy remote nature of Borrower and shall
comply with Rating Agency criteria, and all organizational documents of
Borrower shall be revised to the reasonable satisfaction of Lender.

 

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

 

III.           REPRESENTATIONS AND
WARRANTIES

 

Section 3.1            Borrower
Representations.  Borrower represents
and warrants that:

 

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

 

(b)           Borrower’s
exact legal name is correctly set forth in the first paragraph of this
Agreement. Borrower is an organization of the type specified in the first
paragraph of this Agreement. Borrower is incorporated or organized under the
laws of the state specified in the first paragraph of this Agreement. Borrower’s
principal place of business and chief executive office, and the place where
Borrower keeps its books and records, including recorded data of any kind or
nature, regardless of the medium of recording, including software, writings,
plans, specifications and schematics, has been for the preceding four (4)
months (or, if less than four (4) months, the entire period of the existence of
Borrower) and will continue to be the address of Borrower set forth in the
first paragraph of this Agreement (unless Borrower notifies Lender in writing
at least thirty (30) days prior to the date of such change). Fee Borrower’s
organizational identification number, if any, assigned by the state of its
incorporation or organization is 4220587. Fee Borrower’s federal tax
identification number is 33-1144217. Fee Borrower is not subject to back-up
withholding taxes. Leasehold Borrower’s organizational identification number,
if any, assigned by the state of its incorporation or organization is 4220588. Leasehold
Borrower’s federal tax identification number is 33-1144217. Leasehold Borrower
is not subject to back-up withholding taxes.

 

27

 

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

 

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

 

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

 

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

 

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

 

3.1.7       Title.  Fee Borrower has good, marketable and
insurable fee simple title to the portion of the Property owned in fee and
Leasehold Borrower has good, marketable and insurable leasehold title to the
portion of the Property which constitutes the leasehold interest created by the
Air Rights Lease and Borrower has good title to the balance of the Property
owned by it, free and clear of all Liens whatsoever except the Permitted
Encumbrances. To the best of Borrower’s knowledge, 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 (to the
extent that the liens and security interests created thereby may be perfected
by recording or filing) create (i) a valid, first priority, perfected lien on
the Real Property, subject only to Permitted Encumbrances and (ii) perfected
security interests in and to, and perfected collateral assignments of, all
Leases and, to the extent such security interests may be perfected by the
filing of financing statements, all personalty, all in accordance with the
terms

 

28

 

thereof, in
each case subject only to any Permitted Encumbrances. To the best of Borrower’s
knowledge, except for the mechanics’ lien filed by Walsh Construction Company
of Illinois and the litigation resulting therefrom, there are no mechanics’,
materialman’s or other similar liens or claims which have been filed for work,
labor or materials affecting the Property which are or may be liens prior to,
or equal or coordinate with, the lien of the Mortgage. None of the Permitted
Encumbrances, individually or in the aggregate, materially interfere with the
benefits of the security intended to be provided by the Mortgage and this Loan
Agreement, materially and adversely affect the value of the Property,
materially impair the use or operations of the Property or impair Borrower’s
ability to pay its obligations in a timely manner.

 

3.1.8       No Plan Assets.  As of the date hereof and throughout the term
of the Loan (a) Borrower is not and will not be an “employee benefit plan,” as
defined in Section 3(3) of ERISA, subject to Title I of ERISA, (b) none of
the assets of Borrower constitutes or will constitute “plan assets” of one or
more such plans within the meaning of 29 C.F.R. Section 2510.3-101, (c)
Borrower is not and will not be a “governmental plan” within the meaning of
Section 3(32) of ERISA, and (d) transactions by or with Borrower are not
and will not be subject to any state statute regulating investments of, or
fiduciary obligations with respect to, governmental plans.

 

3.1.9       Compliance.  To the best of Borrower’s knowledge, Borrower
and the Property and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes and Prescribed Laws. Borrower is not in default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority, the violation of which might materially adversely affect the
condition (financial or otherwise) or business of Borrower. Borrower has not committed
any act which may give any Governmental Authority the right to cause Borrower
to forfeit the Property or any part thereof or any monies paid in performance
of Borrower’s obligations under any of the Loan Documents.

 

3.1.10     Financial Information.  To the best of Borrower’s knowledge, all
financial data, including, without limitation, the statements of cash flow and
income and operating expense, that have been delivered to Lender, in its
capacity as “lender” hereunder, by Borrower in respect of the Property are
true, complete and correct in all material respects. Borrower does not have any
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments that are known to Borrower and reasonably likely to have a
materially adverse effect on the Property or the operation thereof, except as
referred to or reflected in said financial statements. Since the date of the
financial statements, there has been no material adverse change in the
financial condition, operations or business of Borrower or the Property from
that set forth in said financial statements.

 

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

 

29

 

3.1.12     Utilities and Public Access.  The Property is served by water, sewer,
sanitary sewer and storm drain facilities reasonably adequate to service the
Property for its intended uses. All public utilities necessary to the continued
use and enjoyment of the Property as presently used and enjoyed are located in
the public right-of-way abutting the Property or are the subject of recorded
access easements for the benefit of the Property. The Property has rights of
access to public ways, and, to the best of Borrower’s knowledge, all roads
necessary for the full utilization of the Property for its current purpose have
been completed and dedicated to public use and accepted by all governmental
authorities or are the subject of access easements for the benefit of the
Property.

 

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

 

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

 

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

 

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

 

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

 

3.1.18     Licenses.  To the best of Borrower’s knowledge, all
material permits and approvals, including without limitation, certificates of
occupancy (if applicable), required by any Governmental Authority for the use,
occupancy and operation of the Property in the manner in

 

30

 

which the
Property is currently being used, occupied and operated have been obtained and
are in full force and effect.

 

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

 

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

 

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

 

3.1.22     Leases.  Borrower represents and warrants to Lender
with respect to the Leases (except as may otherwise be disclosed in any Tenant
or seller estoppel certificate delivered to Lender on or prior to the date
hereof) that: (a) to the best of Borrower’s knowledge, the rent roll with
respect to the Property attached hereto as Schedule I is true, complete
and correct in all material respects and the Property is not subject to any
Leases other than the Leases described in Schedule I, (b) the Leases
identified on Schedule I are in full force and effect and, to the best
of Borrower’s knowledge and except as set forth on Schedule I, there are
no material defaults thereunder by either party, (c) the copies of the Leases
delivered to Lender are true and complete, (d) except for payments made (on a
quarterly or annual basis) by the providers of telecommunications and drop box
services or as otherwise set forth on Schedule I, no Rent (including security
deposits) has been paid more than one (1) month in advance of its due date, (e)
all work to be performed by Borrower under each Lease (other than work which is
not required to be completed as of the Closing Date) has been performed as
required and, to the best of Borrower’s knowledge, has been accepted by the
applicable Tenant, (f) to the best of Borrower’s knowledge, except for the
Unfunded Tenant Allowances or as otherwise set forth on Schedule I, any
payments, free rent, partial rent, rebate of rent or other payments, credits,
allowances or abatements required to be given by Borrower to any Tenant has
already been

 

31

 

received by
such Tenant, and (g) all security deposits are being held in accordance with
Legal Requirements.

 

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

 

3.1.24     Single Purpose.  Borrower hereby represents and warrants to,
and covenants with, Lender that as of the date hereof and until such time as
the Debt shall be paid in full (unless otherwise hereafter consented to by
Lender or, if the Loan has been included in a Securitization, unless a Rating
Agency Confirmation is received):

 

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

 

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

 

(c)           Except
for capital contributions or distributions permitted under the terms and
conditions of Borrower’s operating agreements and properly reflected on the
books and records of Borrower, Borrower will not enter into any contract or
agreement with any Affiliate of Borrower, any constituent party of Borrower or
any Affiliate of any such constituent party, except upon terms and conditions
that are commercially reasonable and substantially similar to those that would
be available on an arms-length basis with third parties other than any such
party.

 

(d)           Borrower
has not incurred and will not incur any Indebtedness other than (i) the Debt,
(ii) unsecured trade payables and operational debt not evidenced by a note and
(iii) Indebtedness incurred in the financing of equipment and other personal
property used on the Property; provided that any Indebtedness incurred pursuant
to subclauses (ii) and (iii) shall be (x) not more than sixty (60) days past
due, (y) incurred in the ordinary course of business and (z) not more than five
percent (5%) of the outstanding principal amount of the Loan at any one time. No
Indebtedness other than the Debt may be secured (subordinate or pari  passu)
by the Property, except that any permitted equipment financing or equipment
lease may be secured by such equipment.

 

32

 

(e)           Borrower
has not made and will not make any loans or advances in the nature of loans to
any other Person (including any Affiliate or constituent party), and shall not
acquire obligations or securities of its Affiliates or owners or any other
Person (except for securities that are Permitted Investments).

 

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

 

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

 

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

 

(i)            Borrower
will be, and at all times will hold itself out to the public as, a legal entity
separate and distinct from any other entity (including any Affiliate of
Borrower or any constituent party of Borrower), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, shall not identify itself or any of its Affiliates as
a division or part of the other and shall maintain and utilize separate
stationery, invoices and checks bearing its own name.

 

(j)            Subject
to there being sufficient revenues from the Property, 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)           To
the fullest extent permitted by law, 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.

 

33

 

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

 

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

 

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

 

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

 

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

 

(p)           Borrower
shall at all times cause there to be at least two duly appointed members of the
board of directors of each SPC Party (if any) or, if Borrower is a single
member Delaware limited liability company, at least two duly appointed managers
of Borrower who in each case are provided by a nationally recognized company
that provides professional independent directors or managers (each, an “Independent Director”) who shall not
have been at the time of such individual’s appointment or at any time while
serving as a director of such SPC Party or manager of such Borrower, and may
not have been at any time during the preceding five years, (i) a
stockholder, director (other than as an Independent Director of such SPC
party), officer, manager (other than as Independent Director of Borrower, if
Borrower is a single member limited liability company), employee, partner,
member, attorney or counsel of such SPC Party, Borrower or any Affiliate of any
of them, (ii) a creditor, customer, supplier or other Person who derives any of
its purchases or revenues from its activities with such SPC Party, Borrower or
any Affiliate of either of them (other than a Person provided to serve as
Independent Director by a company that provides professional independent
directors or managers or other general corporate services to Borrower, such SPC
Party or any Affiliate of either of them), (iii) a Person or other entity
controlling or under common control with any such stockholder, partner,
customer, supplier or other Person, or (iv) a member of the immediate family of
any such stockholder, director, officer, employee, partner, customer, supplier
or other

 

34

 

Person. As
used in this definition, the term “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management, policies or activities of a Person, whether
through ownership of voting securities, by contract or otherwise. A natural
person who satisfies the foregoing definition other than clause (ii) shall not
be disqualified from serving as an Independent Director of the Borrower or the
SPC Party if such individual is an Independent Director provided by a
nationally-recognized company that provides professional independent directors
and/or managers (a “Professional
Independent Director”) and other corporate services in the
ordinary course of its business. A natural person who otherwise satisfies the
foregoing definition other than clause (i) by reason of being the independent
director or manager of a “special purpose entity” affiliated with the Borrower
or the SPC Party shall not be disqualified from serving as an Independent
Director of the Borrower or SPC Party if such individual is either (A) a
Professional Independent Director or (B) the fees that such individual earns
from serving as independent director or manager of affiliates of the Borrower
or SPC Party in any given year constitute in the aggregate less than five
percent (5%) of such individual’s annual income for that year. Notwithstanding
the immediately preceding sentence, an Independent Director may not
simultaneously serve as Independent Director of the Borrower or SPC Party and
independent director or manager of a special purpose entity that owns a direct
or indirect equity interest in the Borrower or SPC Party or a direct or
indirect interest in any co-borrower with the Borrower or SPC Party. For
purposes of this paragraph, a “special purpose entity” is an entity, whose
organizational documents contain restrictions on its activities substantially
similar to those set forth in this Section 3.1.24.

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

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

 

(i)            File
or consent to the filing of any bankruptcy, insolvency or reorganization case
or proceeding; institute any proceedings under any applicable insolvency law or
otherwise seek relief under any laws relating to the relief from debts or the
protection of debtors generally, on behalf of Borrower or of SPC Party;

 

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

 

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

 

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

 

Notwithstanding anything to the contrary contained in this Agreement or
any of the other Loan Documents, each Borrower shall comply with all of the
provisions of this Section 3.1.24 with respect to all Persons other than
its co-borrower as contemplated by the Loan Documents.

 

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

 

3.1.26     Solvency.  Borrower (a) has not entered into this
transaction or any Loan Document with the actual intent to hinder, delay, or
defraud any creditor and (b) received

 

36

 

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

 

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

 

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

 

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

 

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

 

3.1.31     Investment Company Act.  Borrower is not (1) an “investment company”
or a company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended; (2) a “holding company” or a “subsidiary
company” of a “holding company” or an “affiliate” of either a “holding company”
or a “subsidiary company” within the meaning of the Public Utility Holding Company
Act of 1935, as amended; or (3) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money.

 

3.1.32     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.

 

37

 

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

 

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

 

3.1.36     Intentionally Omitted.

 

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

 

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

 

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

 

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

 

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

 

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

 

38

 

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

 

3.1.41     Air Rights Lease.  Borrower hereby represents and warrants to
Lender the following with respect to the Air Rights Lease:

 

(a)           Fee
Borrower is the lessor and Leasehold Borrower is the lessee under the Air
Rights Lease.

 

(b)           The
Air Rights Lease has a term which extends not less than twenty (20) years
beyond the Maturity Date.

 

(c)           As
of the date hereof, to the best of Borrower’s knowledge, the Air Rights Lease
is in full force and effect and no default has occurred under the Air Rights
Lease and there is no existing condition which, but for the passage of time or
the giving of notice, could result in a default under the terms of the Air
Rights Lease.

 

3.1.42     REOA.  Borrower hereby represents and warrants to
Lender that, except as may otherwise be set forth in the REOA Estoppel:

 

(a)           Fee
Borrower is a party to the REOA and, to the best of Borrower’s knowledge, the
REOA is in full force and effect and has not been amended or modified and Fee
Borrower’s interest therein has not been assigned pursuant to any assignment
which survives the Closing Date except the assignment to Lender pursuant to the
Loan Documents;

 

(b)           to
the best of Borrower’s knowledge, the REOA is in full compliance with all
applicable local, state and federal laws, rules and regulations,

 

(c)           to
the best of Borrower’s knowledge, Fee Borrower is not in default under the REOA
and no other party to the REOA is in default thereunder and there are no
grounds for default thereunder after the giving of the requisite notice thereunder;

 

(d)           Borrower
has no knowledge of any notice of termination or default given with respect to
the REOA;

 

(e)           to
the best of Borrower’s knowledge, and after giving effect to notices of Fee
Borrower’s address given to CUSCO on or about the date hereof, the current
addresses to which notices are sent to Fee Borrower or any other party to the
REOA are correctly set forth in the REOA;

 

39

 

(f)            to
the best of Borrower’s knowledge, there are no set-offs, claims, counterclaims
or defenses being asserted or capable of being asserted after giving the
requisite notice, if any, required under the REOA for the enforcement of the
obligations under the REOA;

 

(g)           to
the best of Borrower’s knowledge, there are no liens capable of being asserted
for amounts due under the provisions of the REOA which, if unpaid, would become
a lien prior to the lien of the Mortgage;

 

(h)           to
the best of Borrower’s knowledge, neither Fee Borrower nor any other party to
the REOA has requested that a matter be submitted to arbitration under the
REOA;

 

(i)            to
the best of Borrower’s knowledge, Fee Borrower enjoys the quiet and peaceful
possession of all easements relating to or appurtenant to the Property granted
by the REOA;

 

(j)            to
the best of Borrower’s knowledge, there are no charges due and payable under
the REOA to Fee Borrower or any other party to the REOA (except in the ordinary
course of business); and

 

(k)           Lender
is a “Mortgagee” for purposes of the REOA and is entitled to all rights of a “Mortgagee”
or holder of a “Mortgage” as defined in the REOA.

 

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

 

IV.                                BORROWER
COVENANTS

 

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

 

4.1.1       Existence; Compliance
with Legal Requirements.  Borrower
shall do or cause to be done all things necessary to preserve, renew and keep
in full force and effect its existence, rights, licenses, permits and
franchises and comply in all material respects with all Legal Requirements
applicable to it and the Property, including, without limitation, Prescribed
Laws. Notwithstanding the foregoing, after prior notice to Lender, Borrower, at
its own expense, may suspend such compliance and contest by appropriate legal
proceeding, conducted in good faith and with due diligence, the validity or
applicability of any Legal Requirements to Borrower and/or the Property,
provided that (i) no Event of Default has occurred and remains uncured;
(ii) such proceeding shall be permitted under and be conducted in
accordance with all applicable statutes, laws and ordinances; (iii) Borrower
shall establish to Lender’s reasonable satisfaction that neither the Property
nor any part thereof or interest therein will be in imminent danger of being
sold, forfeited, terminated, canceled or lost; (iv) Borrower shall promptly
upon final determination thereof comply with such resulting Legal Requirements,
and shall pay all costs, interest and penalties which may be payable in
connection therewith; and (v) if required by

 

40

 

Lender,
Borrower shall deposit with Lender cash, or other security as may be approved
by Lender, in an amount equal to 100% of the amount of all damages, costs,
interest and penalties that may be assessed against Borrower as a result of
such non-compliance, as reasonably determined by Lender, less any amount that
Borrower has paid to any Governmental Authority in connection with such contest
as security for the payment of such damages, costs, interest and penalties.

 

4.1.2       Taxes and Other Charges.  Borrower shall pay all Taxes and Other
Charges now or hereafter levied or assessed or imposed against the Property or
any part thereof as the same become due and payable; provided, however,
Borrower’s obligation to directly pay Taxes shall be suspended for so long as
Borrower complies with the terms and provisions of Section 6.2
hereof. Borrower shall furnish to Lender receipts for the payment of the Taxes
and the Other Charges prior to the date the same shall become delinquent;
provided, however, that Borrower is not required to furnish such receipts for
payment of Taxes in the event that such Taxes have been paid by Lender pursuant
to Section 6.2 hereof. Subject to Borrower’s right to contest set
forth in Section 3.6(b) of the Mortgage, 
Borrower shall not permit or suffer and shall promptly discharge any
lien or charge against the Property other than Permitted Encumbrances. After
prior notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, conducted in good faith and with due diligence,
the amount or validity of any Taxes or Other Charges, provided that (i) no
Event of Default has occurred and remains uncured; (ii) such proceeding shall
be permitted under and be conducted in accordance with all applicable statutes,
laws and ordinances; (iii) neither the Property nor any part thereof or
interest therein will be in danger of being sold, forfeited, terminated,
canceled or lost; (iv) Borrower shall promptly upon final determination thereof
pay the amount of any such Taxes or Other Charges, together with all costs,
interest and penalties which may be payable in connection therewith;
(v) unless Taxes or Other Charges have been previously paid, such
proceeding shall suspend the collection of Taxes or Other Charges from the
Property; and (vi) to the extent that Borrower has not paid to or deposited
with the applicable taxing authority the full amount of the contested Taxes or
Other Charges or if Borrower is paying Taxes to Lender pursuant to Section
6.2 hereof and has requested Lender to not pay the contested amount of the
Taxes during the continuance of the legal proceeding (in which event Lender
shall not pay such amount of the Taxes during the continuance of such
proceeding), Borrower shall deposit with Lender cash, or other security as may
be approved by Lender, in an amount equal to one hundred twenty-five percent (125%)
of the unpaid contested amount, to insure the payment of any such Taxes or
Other Charges, together with all interest and penalties thereon, but no such
security shall be required if Borrower is paying Taxes to Lender pursuant to Section
6.2 hereof. Lender may pay over any such cash or other security held by
Lender to the claimant entitled thereto at any time when, in the judgment of
Lender, the entitlement of such claimant is established.

 

4.1.3       Litigation.  Borrower shall give prompt notice to Lender
of any litigation or governmental proceedings pending or threatened in writing
against Borrower which is reasonably likely 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 to inspect the Property or any part thereof at
reasonable hours upon reasonable advance notice, subject to the rights of
Tenants under their applicable Leases.

 

41

 

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 (or such other
accounting method reasonably acceptable to Lender), reflecting the financial
affairs of Borrower. Lender shall have the right from time to time during
normal business hours upon reasonable notice to Borrower to examine such books
and records at the office of Borrower or other Person maintaining such books
and records and to make such copies or extracts thereof as Lender shall desire.

 

(b)           Borrower
shall furnish Lender annually, within one hundred twenty (120) days following
the end of each Fiscal Year, a complete copy of either (i) Borrower’s annual
financial statements audited by a “big four” accounting firm or other
independent certified public accountant reasonably acceptable to Lender and
prepared in accordance with GAAP (or such other accounting method reasonably
acceptable to Lender) or (ii) if a Mezzanine Loan is outstanding, a
consolidated and annotated annual financial statement of Borrower and Mezzanine
Borrower audited by a “big four” accounting firm or other independent certified
public accountant reasonably acceptable to Lender and prepared in accordance
with GAAP (or such other accounting method reasonably acceptable to Lender),
provided such consolidated financial statement complies with Section
3.1.24(h) and is required or permitted by GAAP (or such other accounting
method reasonably acceptable to Lender). In addition, if a Mezzanine Loan is
outstanding, Borrower shall furnish Lender annually, within one hundred twenty
(120) days following the end of each Fiscal Year, unaudited statements of
income and expense and cash flow for the Property, which unaudited statements
shall account for the Loan separately from the Mezzanine Loan, if any, and, if
Borrower furnished Lender consolidated statements pursuant to subsection (ii)
of the previous sentence, an unaudited separate balance sheet for Borrower,
which balance sheet shall account for the Loan separately from the Mezzanine
Loan, if any. Borrower’s annual financial statements shall be accompanied by a
certificate executed by an authorized officer of Borrower stating that such
annual financial statement presents fairly the financial condition and the
results of operations of Borrower and the Property. Together with Borrower’s
annual financial statements, Borrower shall furnish to Lender an Officer’s
Certificate certifying as of the date thereof whether to the best of Borrower’s
knowledge there exists an event or circumstance which constitutes a Default or
Event of Default by Borrower under the Loan Documents and if such Default or
Event of Default exists, the nature thereof, the period of time it has existed
and the action then being taken to remedy the same.

 

42

 

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

 

(i)            for
each quarter from and after the quarter ending December 31, 2006, quarterly and
year-to-date statements of income and expense and cash flow prepared for such
quarter with respect to the Property, with a balance sheet for such quarter for
Borrower;

 

(ii)           for
each quarter from and after the quarter ending December 31, 2006, a calculation
reflecting the Debt Service Coverage Ratio as of the last day of such quarter,
for such quarter, together with back-up documentation reasonably acceptable to
Lender;

 

(iii)          for
each quarter from and after the quarter ending December 31, 2006, a current
rent roll for the Property;

 

(iv)          intentionally
omitted; and

 

(v)           for
each quarter from and after the quarter ending December 31, 2006, any written
notice received from a Tenant under a Major Lease threatening non-payment of
Rent or other default, alleging or acknowledging a default by landlord,
requesting a termination of a Major Lease or a material modification of any
Major Lease or notifying Borrower of the exercise or non-exercise of any option
provided for in such Tenant’s Major Lease, or any other similar material
correspondence received by Borrower from Tenants under Major Leases during the
subject quarter.

 

(d)           Intentionally
Omitted.

 

(e)           Borrower
shall submit the Annual Budget for the 2007 Fiscal Year to Lender not later
than December 28, 2006. With respect to each Fiscal Year commencing with the
2008 Fiscal Year, Borrower shall submit the Annual Budget to Lender not later
than thirty (30) days prior to the commencement of such Fiscal Year.

 

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

 

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

 

43

 

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

 

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

 

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

 

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

 

(b)           Borrower
(i) shall observe and perform the obligations imposed upon the lessor under the
Leases in a commercially reasonable manner; (ii) shall enforce the terms,
covenants and conditions contained in the Leases upon the part of the lessee
thereunder to be observed or performed in a commercially reasonable manner,
provided, however, Borrower shall not terminate (other than due to a monetary
or material non-monetary default by the tenant under a Major Lease) or accept a
surrender of a Major Lease (other than pursuant to a right or option of a
Tenant contained therein) without Lender’s prior approval, which approval shall
not be unreasonably withheld or delayed; (iii) shall not collect any of the
Rents more than one (1) month in advance (other than security deposits), except
as approved by Lender or as provided in

 

44

 

Leases that
exist as of the date hereof or that are entered into after the date hereof in
accordance with the terms and provisions of this Section 4.1.9 and, if
the amount of any such prepaid Rent shall equal or exceed $250,000 for any
Lease, then as a condition to any approval by Lender for Borrower to collect
such Rents more than one (1) month in advance, Lender may require that Borrower
deposit all such prepaid Rents with Lender to be held in an interest-bearing
account and applied to the Debt as it comes due and payable pursuant to the
Loan Documents during the period represented by the prepaid Rent; (iv) shall
not execute any assignment of lessor’s interest in the Leases or the Rents
(except as contemplated by the Loan Documents); and (v) shall hold all security
deposits under all Leases in accordance with Legal Requirements. Upon request,
Borrower shall furnish Lender with executed copies of all Leases.

 

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

 

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

 

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

 

(iii)          whenever
Lender’s approval or consent is required pursuant to the provisions of this Section 4.1.9
for any matter that Lender has previously approved (or deemed approved) a term
sheet pursuant to Section 4.1.9(c)(i) above, Lender shall use good
faith efforts to respond within five (5) Business Days after Lender’s receipt
of Borrower’s written request for such approval or consent. If Lender fails to
respond to such request within five (5) Business Days, and Borrower sends a
second request containing a legend in bold letters stating that Lender’s failure
to respond within five (5) Business Days shall be deemed consent or approval,
Lender shall be deemed to have approved or consented to the matter for which
Lender’s consent or approval was sought if Lender fails to respond to such
second written request before the

 

45

 

expiration of
such five (5) Business Day period, provided that there have been no material
deviations from the term sheet and that the aggregate economics of the
transaction are not materially less favorable to Borrower than as set forth in
the term sheet;

 

(iv)          in
the event that Lender shall have approved (or be deemed to have approved) a
term sheet submitted by Borrower with respect to a certain Lease, renewal,
amendment, modification or termination, Lender shall not withhold its approval
or consent with respect thereto on the basis of any provisions of such Lease,
renewal, amendment, modification or termination dealing with the items
contained in the approved term sheet; and

 

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

 

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

 

4.1.11     Intentionally Omitted.

 

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

 

46

 

(c) promptly
enforce the performance and observance of all of the material covenants and
agreements required to be performed and/or observed by the other party under
each Material Agreement to which it is a party in a commercially reasonable
manner.

 

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

 

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

 

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

 

4.1.16     Loan Fees.  Borrower shall pay all fees and costs
required of Borrower pursuant to the terms of that certain term sheet between
Beacon Capital Strategic Partners IV Acquisition, LLC and Lender dated July 26,
2006.

 

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

 

4.1.18     Intentionally Omitted.

 

4.1.19     Air Rights Lease. The
Borrower hereby covenants and agrees with Lender with respect to the Air Rights
Lease as follows:

 

(a)           Fee
Borrower shall, at its sole cost and expense, promptly and timely perform and
observe all material terms, covenants and conditions required to be performed
and observed by Fee Borrower in its capacity as the lessor under the Air Rights
Lease.

 

47

 

(b)           Leasehold
Borrower shall, at its sole cost and expense, promptly and timely perform and
observe all material terms, covenants and conditions required to be performed
and observed by Leasehold Borrower in its capacity as the lessee under the Air
Rights Lease.

 

4.1.20     REOA. The Borrower
hereby covenants and agrees with Lender with respect to the REOA as follows:

 

(a)           Fee
Borrower shall pay all charges and other sums to be paid by Fee Borrower
pursuant to the terms of the REOA as the same shall become due and payable and
prior to the expiration of any applicable grace period therein provided. After
prior written notice to Lender, Fee Borrower, at its sole cost and expense, may
contest by appropriate legal proceeding, conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any
charges or other sums required to be paid by Fee Borrower pursuant to the REOA,
provided that (i) no Event of Default has occurred and is then continuing;
(ii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of the REOA and any other instrument to which
Fee Borrower is subject or by which the Property is bound and shall not
constitute a default thereunder and such proceeding shall be conducted in accordance
with all applicable statutes, laws and ordinances; (iii) the Property and
no part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (iv) the REOA will not be in danger of
being terminated; (v) Fee Borrower shall promptly upon final determination
thereof pay the amount of any such charges, together with all costs, interest
and penalties which may be payable in connection therewith; (vi)  unless
the charges or other sums have been previously paid, such proceeding shall
suspend the collection of such charges from Fee Borrower and the Property; and
(vii) Fee Borrower shall furnish such security as may be required in the
proceeding to insure the payment of any such charges, together with all interest
and penalties thereon;

 

(b)           Fee
Borrower shall comply, in all material respects, with all of the terms,
covenants and conditions on the Fee Borrower’s part to be complied with
pursuant to terms of the REOA;

 

(c)           Fee
Borrower shall take all actions as may be necessary from time to time to
preserve and maintain the REOA in accordance with applicable laws, rules and
regulations;

 

(d)           Fee
Borrower shall enforce, in a commercially reasonably manner, the obligations to
be performed by the parties to the REOA (other than Fee Borrower);

 

(e)           Fee
Borrower shall promptly furnish to Lender any notice of default or other
communication delivered in connection with the REOA by any party to the REOA or
any third-party other than routine correspondence and invoices; and

 

(f)            If
Lender, its nominee, designee, successor, or assignee acquires title and/or
rights of Fee Borrower under the REOA by reason of foreclosure of the Mortgage,
deed-in-lieu of foreclosure or otherwise, such party shall (x) succeed to
all of the rights of and benefits accruing to Fee Borrower under the REOA, and
(y) be entitled to exercise all of the rights and benefits accruing to Fee
Borrower under the REOA. At such time as Lender shall

 

48

 

request, Fee
Borrower agrees to execute and deliver to Lender such documents as Lender and
its counsel may reasonably require in order to insure that the provisions of
this section will be validly and legally enforceable and effective against Fee
Borrower and all parties claiming by, through, under or against Fee Borrower.

 

4.1.21     Required Repairs. Borrower
shall perform the repairs at the Property described on Schedule II
hereto (such repairs hereinafter referred to as “Required Repairs”). Borrower shall complete the Required
Repairs within the applicable time frames set forth in Schedule II.

 

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

 

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

 

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

 

4.2.3       Dissolution.  Borrower shall not, without Lender’s prior
consent, (i) engage in any dissolution, liquidation or consolidation or
merger with or into any other business entity, (ii) engage in any business
activity not related to the ownership, operation and refinancing of the
Property, (iii) transfer, lease or sell, in one transaction or any combination
of transactions, all or substantially all of the property or assets of Borrower
except to the extent expressly permitted by the Loan Documents, or (iv) cause,
permit or suffer any SPC Party to (A) dissolve, wind up or liquidate or
take any action, or omit to take an action, as a result of which such SPC Party
would be dissolved, wound up or liquidated in whole or in part, or
(B) amend, modify, waive or terminate the certificate of incorporation or
bylaws of such SPC Party in any manner that (1) violates the single
purpose covenants set forth in Section 3.1.24, or (2) 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. Upon payment of the Debt and the
satisfaction of all other obligations of Borrower under the Loan Documents,
Lender will execute and deliver to Borrower, at Borrower’s request and sole
cost and expense (including Lender’s reasonable out-of-pocket costs

 

49

 

and expenses),
a certificate in a form reasonably acceptable to Lender and required by the
Delaware Secretary of State and/or as reasonably required by Borrower to
evidence repayment of the Debt and the ability of the SPC Party to thereafter
amend its certificate of incorporation and by-laws or other organizational
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 in
accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower’s business.

 

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

 

4.2.7       Zoning.  Borrower shall not initiate or consent to any
zoning reclassification of any portion of the Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
the Property in any manner that could result in such use becoming a non-conforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation, without the prior consent of Lender; provided, however,
that the foregoing shall not prohibit the continued use of the Property in its
then current manner if such use becomes a permitted non-conforming use by
virtue of a change in zoning or other land use laws which was not initiated by
Borrower.

 

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

 

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

 

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

 

4.2.11     ERISA.  (a)            Borrower
shall not engage in any transaction which would cause any obligation, or action
taken or to be taken, hereunder (or the exercise by Lender of any of its rights
under the Note, this Agreement or the other Loan Documents) to be a non-exempt
(under a statutory or administrative class exemption) prohibited transaction
under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

 

50

 

(b)           Borrower
shall deliver to Lender such certifications or other evidence from time to time
throughout the term of the Loan, as requested by Lender in its sole discretion,
that (A) Borrower is not an “employee benefit plan” as defined in
Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental
plan” within the meaning of Section 3(32) of ERISA; (B) Borrower is not
subject to any state statute regulating investments of, or fiduciary
obligations with respect to, governmental plans; and (C) one or more of the
following circumstances is true:

 

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

 

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

 

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

 

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

 

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

 

4.2.13     Air Rights Lease.  The Borrower hereby covenants and agrees with
Lender with respect to the Air Rights Lease as follows:

 

(a)           Borrower
shall not, without Lender’s prior written consent, materially amend, modify or
supplement the Air Rights Lease except that Lender shall not unreasonably
withhold or delay its consent to any amendment or modification which will not
be deemed to have a Material Adverse Effect;

 

(b)           Borrower
shall not, without the prior written consent of Lender, take (and hereby
assigns to Lender any right it may have to take) any action to terminate the
Air Rights Lease; and

 

(c)           Borrower
shall not, without the prior written consent of Lender, permit or suffer the
merger of the fee estate and the leasehold estate under the Air Rights Lease.

 

51

 

Notwithstanding the foregoing, Lender agrees that Borrower may terminate
the Air Rights Lease at such time, if any, as all Tenants under then existing
Leases agree (or have previously agreed) to attorn to Fee Borrower upon a
termination of the Air Rights Lease and Borrower has delivered to Lender
evidence reasonably satisfactory to Lender of such agreement by all such
Tenants. In connection with such termination of the Air Rights Lease, Fee
Borrower shall execute and deliver assumption agreements or replacements of the
Loan Documents to which Leasehold Borrower (but not Fee Borrower) is a party,
in each case in form and substance reasonably acceptable to Lender (it being
agreed that replacements of Loan Documents that are substantially similar to
the corresponding Loan Documents executed and delivered prior to such termination
of the Air Rights Lease shall be reasonably acceptable to Lender).

 

4.2.14     REOA.  The Borrower hereby covenants and agrees with
Lender with respect to the REOA as follows:

 

(a)           Fee
Borrower shall not, without Lender’s prior written consent, materially amend,
modify or supplement, or consent to or suffer the material amendment,
modification or supplementation of, the REOA except that Lender shall not
unreasonably withhold or delay its consent to any amendment or modification
which is not reasonably likely to have a Material Adverse Effect;

 

(b)           Fee
Borrower shall not, without the prior written consent of Lender, as determined
in its sole discretion, take (and hereby assigns to Lender any right it may
have to take) any action to terminate, surrender, or accept any termination or
surrender of, the REOA; and

 

(c)           Fee
Borrower shall not assign (other than to Lender) or encumber its rights under
the REOA.

 

V.                                    INSURANCE,
CASUALTY AND CONDEMNATION

 

Section 5.1            Insurance.

 

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

 

(i)            so
called “all risk” or special perils property insurance on the Improvements and
the personal property at the Property (A) in an amount equal to one hundred
percent (100%) of the “Full Replacement Cost,” which for purposes of this
Agreement shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with a waiver of
depreciation; (B) containing an agreed amount endorsement with respect to the
Improvements and personal property at the Property waiving all co-insurance
provisions; (C) providing for no deductible in excess of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00) for all such insurance coverage; and
(D) including contingent liability from the Operation of Building Laws or
Demolition Costs and Increased Cost of Construction Endorsements (in either
case, “D&ICC Endorsement”),
in the case of coverage parts B and C of the D&ICC Endorsement, with a
sublimit of not less than Twenty Five Million

 

52

 

and No/100
Dollars ($25,000,000.00). In addition, Borrower shall obtain: (y) if any
portion of the Improvements is currently or at any time in the future located
in a federally designated “special flood hazard area,” flood hazard insurance
in an amount equal to the lesser of (1) the aggregate outstanding principal
balance of the Loan or (2) the maximum amount of such insurance available under
the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994, as each may be amended
or such greater amount as Lender shall require; and (z) earthquake insurance in
amounts and in form and substance satisfactory to Lender in the event the
Property is located in an area with a high degree of seismic activity, provided
that the insurance pursuant to clauses (y) and (z) hereof shall be on terms
consistent with the comprehensive all risk insurance policy required under this
subsection (i) and shall be commercially available at a reasonable cost;

 

(ii)           commercial
general liability insurance against claims for personal injury, bodily injury,
death or property damage occurring upon, in or about the Property, such
insurance (A) to be on the so-called “occurrence” form with a combined limit,
excluding umbrella coverage, of not less than One Million and No/100 Dollars
($1,000,000.00) per occurrence and Two Million and No/100 Dollars
($2,000,000.00) in the aggregate; (B) to continue at not less than the
aforesaid limit until required to be changed by Lender by reason of changed
economic conditions making such protection inadequate; and (C) to cover at
least the following hazards: (1) premises and operations; (2) products and
completed operations on an “if any” basis; (3) independent contractors; (4)
blanket contractual liability for all legal contracts; and (5) contractual
liability covering the indemnities contained in Article 9 of the Mortgage
to the extent the same is available;

 

(iii)          business
or rental income insurance with a limit of insurance adequate to cover a loss
of business or rental income for a period of eighteen (18) months inclusive of
the extended period of indemnity required below (A) with loss payable to Lender
under a Lender Loss Payable or Standard Mortgagee endorsement satisfactory to
Lender; (B) covering all risks required to be covered by the insurance provided
for in subsection (i) above and subsections (vi) and (xi) below for a period
commencing at the time of loss for such length of time (not exceeding twelve
(12) months) as it takes to repair or replace with the exercise of due
diligence and dispatch; (C) containing an extended period of indemnity
endorsement which provides that after the physical loss to the Improvements and
Personal Property has been repaired, the continued loss of income will be
insured until such income either returns to the same level it was at prior to
the loss, or the expiration of six (6) months from the date that the Property
is repaired or replaced and operations are resumed, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such period. Subject
to the provisions of Section 5.2 and Section 5.3 of
this Agreement, all proceeds payable to Lender pursuant to this subsection
shall be held by Lender and shall be applied to the obligations secured by the
Loan Documents from time to time due and payable hereunder and under the Note; provided,
however, that nothing herein contained shall be deemed to relieve Borrower of
its obligations to pay the obligations secured by the Loan Documents on the
respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;

 

(iv)          at
all times during which structural construction, repairs or alterations are
being made with respect to the Improvements, and only if the property and liability
coverage

 

53

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(xi)           if
at any time during the term of the Loan the commercial property and business
income insurance policies required under subsections (i) and (iii) above do not
cover perils of terrorism or acts of terrorism, or other similar acts or
events, Borrower shall obtain an endorsement to such policy, or a separate
policy from an insurance provider which maintains at least an Investment Grade
Rating, insuring against all loss resulting from perils and acts of terrorism
and “fire following”, to the extent such policy or endorsement is available, in
an amount determined by Lender in its sole discretion (but in no event more
than an amount equal to the sum of one hundred percent (100%) of the
construction costs associated with the reconstruction of the Improvements and a
minimum of eighteen (18) months of business or rental interruption insurance
(inclusive of six (6) months extended period of indemnity) (the “Terrorism Coverage Amount”)); provided,
however, if TRIA is no longer in effect, the total

 

54

 

annual premium
payable by Borrower for such terrorism coverage shall not exceed an amount
equal to one hundred seventy-five percent (175%) of the result of (x) the
annual premium for “all-risk” or special perils property insurance coverage as
of the date hereof minus (y) the portion of such annual premium
attributable to terrorism coverage. The endorsement or policy shall be in form
and substance reasonably satisfactory to Lender and shall meet Rating Agency
criteria for securitized loans; and

 

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

 

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

 

(c)           Any
blanket insurance Policy shall specifically allocate to the Property the amount
of coverage from time to time required hereunder and shall otherwise provide
the same protection as would a separate Policy insuring only the Property in
compliance with the provisions of Section 5.1.1(a).

 

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

 

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

 

55

 

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

 

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

 

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

 

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

 

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

 

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

 

5.1.2       Insurance Company.  The Policies shall be issued by financially
sound and responsible insurance companies authorized to do business in the
state in which the Property is located and having a claims paying ability
rating of “A” or better by S&P and, to the extent rated by Moody’s and/or
Fitch, the equivalent rating from each of Moody’s and/or Fitch, as applicable
(provided, however, that the Policies for general liability insurance set forth
in subsections (a)(ii), (a)(v), (a)(vii) and (a)(viii) above shall be issued by
insurance companies having a claims paying ability rating of “A-” or better by
S&P and, to the extent rated by Moody’s and/or Fitch, the equivalent rating
from each of Moody’s and/or Fitch, as applicable). If a Securitization occurs,
(i) the foregoing required insurance company rating by a Rating Agency not
rating any Securities shall be disregarded and (ii) if the insurance company
complies with the aforesaid S&P required rating (and S&P is rating the
Securities) and the other Rating Agencies rating the Securities do not rate the
insurance company, such insurance company shall be deemed acceptable with
respect to such Rating Agency not rating such insurance company. Notwithstanding
the foregoing, Borrower shall be permitted to maintain the Policies with

 

56

 

insurance
companies which do not meet the foregoing requirements (an “Otherwise Rated Insurer”), provided
Borrower obtains a “cut-through” endorsement (that is, an endorsement which
permits recovery against the provider of such endorsement) with respect to any
Otherwise Rated Insurer from an insurance company which meets the claims paying
ability ratings required above. Moreover, if Borrower desires to maintain
insurance required hereunder from an insurance company which does not meet the
claims paying ability ratings set forth herein but the parent of such insurance
company, which owns at least fifty-one percent (51%) of such insurance company,
maintains such ratings, Borrower may use such insurance companies if approved
by the Rating Agencies (such approval may be conditioned on items required by
the Rating Agencies including a requirement that the parent guarantee the
obligations of such insurance company).

 

Section 5.2            Casualty and
Condemnation.

 

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

 

5.2.2       Condemnation.  Borrower shall give Lender prompt notice of
any actual or threatened Condemnation by any Governmental Authority of all or
any part of the Property and shall deliver to Lender a copy of any and all
papers served in connection with such proceedings. Provided no Event of Default
has occurred and is continuing, in the event of a Condemnation where the amount
of the taking does not exceed the Restoration Threshold, Borrower may settle and
compromise such Condemnation; provided that the same is effected in a
commercially reasonable and timely manner. In the event of a Condemnation where
the amount of the taking exceeds the Restoration Threshold or if an Event of
Default then exists, Borrower may settle and compromise the Condemnation only
with the consent of Lender (which consent shall not be unreasonably withheld or
delayed) and Lender shall have the opportunity to participate, at Borrower’s
cost, in any litigation and settlement discussions in respect thereof and
Borrower shall from time to time deliver to Lender all instruments requested by
Lender to permit such participation. Borrower shall, at its expense, diligently
prosecute any such proceedings, and

 

57

 

shall consult
with Lender, its attorneys and experts, and cooperate with them in the carrying
on or defense of any such proceedings. Notwithstanding any Condemnation,
Borrower shall continue to pay the Debt at the time and in the manner provided
for its payment in the Note and in this Agreement. Lender shall not be limited
to the interest paid on the Award by any Governmental Authority but shall be
entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is taken by any
Governmental Authority, Borrower shall, subject to Legal Requirements of any
Governmental Authorities, promptly commence and diligently prosecute the
Restoration of the Property and otherwise comply with the provisions of Section 5.3.
If the Property is sold, through foreclosure or otherwise, prior to the receipt
by Lender of the Award, Lender shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the outstanding Debt.

 

5.2.3       Casualty Proceeds.  Notwithstanding the last sentence of Section 5.1.1(a)(iii)
and provided no Event of Default exists hereunder, proceeds received by Lender
on account of the business interruption insurance specified in Subsection 5.1.1(a)(iii)
above with respect to any Casualty shall be deposited by Lender directly into
the Deposit Account (as defined in the Cash Management Agreement) to be used to
pay the Monthly Debt Service Payment Amount as it becomes due under the Loan
Documents. Provided no Event of Default exists and Lender reasonably determines
that sufficient other funds will remain available for the payment of all other
amounts due under the Loan Documents, all business interruption insurance
proceeds remaining after the payment of the Monthly Debt Service Payment Amount
shall be released to Mezzanine Lender, if a Mezzanine Loan is outstanding, or
to Borrower, if no Mezzanine Loan is outstanding. Notwithstanding the
foregoing, if such business interruption insurance proceeds are paid to Lender
in a lump sum, then, provided no Event of Default exists, Lender shall disburse
on a monthly basis (i) if a Mezzanine Loan is outstanding, to Mezzanine Lender,
or (ii) if no Mezzanine Loan is outstanding, to Borrower, a portion of such
proceeds in an amount equal to the amount of such proceeds which represent the
Rents for such month less the Monthly Debt Service Payment Amount due on the
Monthly Payment Date in such month. All other such proceeds shall be held by
Lender and disbursed in accordance with Section 5.3 hereof.

 

Section 5.3            Delivery of Net
Proceeds.

 

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

 

58

 

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

 

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

 

(ii)           (A)
in the event the Net Proceeds are insurance proceeds, less than thirty percent
(30%) of the total floor area of the Improvements at the Property has been
damaged, destroyed or rendered unusable as a result of such Casualty or (B) in
the event the Net Proceeds are an Award, (1) (x) less than ten percent (10%) of
the air rights constituting a portion of the Property is taken, and (y) less
than ten percent (10%) of the land constituting a portion of the Property is
taken and such land is located along the perimeter or periphery of the
Property, and (2) no portion of the Improvements is the subject of the
Condemnation (other than immaterial portions thereof which do not affect
(x) the use or operation of the Property, (y) the Net Operating
Income or value of the Property in any material respect and (z) the
compliance of the Property with applicable Legal Requirements);

 

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

 

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

 

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

 

(vi)          Lender
shall be satisfied that the Restoration will be completed on or before the
earliest to occur of (A) the date three (3) months prior to the Maturity Date,
(B) such time as may be required under applicable Legal Requirements in
order to repair and restore the Property to the condition it was in immediately
prior to such Casualty or to as nearly as possible the condition it was in
immediately prior to such Condemnation, as applicable or (C) the
expiration of the insurance coverage referred to in Section 5.1.1(a)(iii),
unless Borrower deposits sufficient additional funds with Lender as determined
by Lender in good faith;

 

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

 

59

 

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

 

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

 

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

 

(c)           All
plans and specifications required in connection with the Restoration shall be
subject to prior reasonable approval of Lender and an independent architect
selected by Lender (the “Casualty
Consultant”). The plans and specifications shall require that
the Restoration be completed in a first-class workmanlike manner at least
equivalent to the quality and character of the original work in the
Improvements (provided, however, that in the case of a partial Condemnation,
the Restoration shall be done to the extent reasonably practicable after taking
into account the consequences of such partial Condemnation), so that upon
completion thereof, the Property shall be at least equal in value and general
utility to the Property prior to the damage or destruction; it being
understood, however, that Borrower shall not be obligated to restore the
Property to the precise condition of the Property prior to such Casualty
provided the Property is restored, to the extent practicable, to be of at least
equal value and of substantially the same character as prior to the Casualty. Borrower
shall restore all Improvements such that when they are fully restored and/or
repaired, such Improvements and their contemplated use fully comply with all
applicable material Legal Requirements. The identity of the contractors,
subcontractors and materialmen engaged in the Restoration, as well as the
contracts under which they have been engaged, shall be subject to reasonable
approval of Lender and the Casualty Consultant. All reasonable, out-of-pocket
costs and expenses incurred by Lender in connection with recovering, holding
and advancing the Net Proceeds for the Restoration including, without
limitation, reasonable attorneys’ fees and disbursements and the Casualty
Consultant’s fees and disbursements, shall be paid by Borrower.

 

(d)           In
no event shall Lender be obligated to make disbursements of the Net Proceeds in
excess of an amount equal to the costs actually incurred from time to time for
work

 

60

 

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

 

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

 

(f)            If
at any time the Net Proceeds or the undisbursed balance thereof shall not, in
the good faith opinion of Lender in consultation with the Casualty Consultant,
be sufficient to pay in full the balance of the costs which are estimated by
the Casualty Consultant to be incurred in connection with the completion of the
Restoration, Borrower shall deposit the deficiency (the “Net Proceeds Deficiency”) with Lender
before any further disbursement of the Net Proceeds shall be made. The Net
Proceeds Deficiency deposited with Lender shall be held by Lender in an
interest-bearing account and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the disbursement
of the Net Proceeds, and until so disbursed pursuant to this Section 5.3.2
shall constitute additional security for the Debt. The Net Proceeds Deficiency
shall be invested in Permitted Investments from time to time selected by
Borrower subject to the same terms and conditions applicable to the investment
of Reserve Funds in Permitted Investments set forth in the Cash Management
Agreement.

 

(g)           The
excess, if any, of the Net Proceeds Deficiency deposited with Lender after the
Casualty Consultant certifies to Lender that the Restoration has been completed
in accordance with the provisions of this Section 5.3.2, and the
receipt by Lender of evidence satisfactory to Lender that all costs incurred in
connection with the Restoration have been paid in

 

61

 

full, shall be
remitted by Lender to Borrower, provided no Event of Default shall have
occurred and shall be continuing under any of the Loan Documents.

 

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

 

VI.           RESERVE FUNDS

 

Section 6.1            Intentionally Omitted.

 

Section 6.2            Tax Funds.

 

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

 

6.2.2       Release of Tax Funds.  During an Escrow Reserve Period, provided
that Lender has not accelerated the Loan, Lender shall apply the Tax Funds to
the payment of Taxes. In making any payment relating to Taxes, Lender shall do
so according to the bill, statement or estimate procured from the appropriate
public office (with respect to Taxes) without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof. If the amount of the Tax Funds
shall exceed the amounts due for Taxes, Lender shall, in its sole discretion,
return any excess to Borrower or credit such excess against future payments to
be made to the Tax Funds. Any Tax Funds remaining after the Debt has been paid
in full shall be promptly returned to Borrower.

 

62

 

Section 6.3            Insurance Funds.

 

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

 

6.3.2       Release of Insurance Funds.  During an Escrow Reserve Period, provided
that Lender has not accelerated the Loan, Lender shall apply the Insurance
Funds to the payment of Insurance Premiums. In making any payment relating to
Insurance Premiums, Lender shall do so according to the bill, statement or
estimate procured from the insurer or its agent, without inquiry into the
accuracy of such bill, statement or estimate. If the amount of the Insurance
Funds shall exceed the amounts due for Insurance Premiums, Lender shall, in its
sole discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Insurance Funds. Any Insurance Funds
remaining after the Debt has been paid in full shall be promptly returned to
Borrower.

 

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

 

Section 6.4            Capital Expenditure
Funds.

 

6.4.1       Deposits of Capital
Expenditure Funds.  Pursuant to
the Cash Management Agreement, upon the occurrence of an Escrow Reserve Trigger
Event and during the continuance of an Escrow Reserve Period, Borrower shall
deposit with Agent on each Monthly Payment Date an amount equal to $29,166.67
(the “Monthly Capital Expenditures Deposit”)
for annual Capital Expenditures reasonably approved by Lender. Amounts
deposited pursuant to this Section 6.4.1, together with interest
earned thereon, are referred to herein as the “Capital Expenditure Funds.”  Once any Escrow Reserve Period has ended and
no other Escrow Reserve Period then exists, all Capital Expenditure Funds on
deposit shall be promptly returned to Borrower on or before the following
Monthly Payment Date. The Capital

 

63

 

Expenditure
Funds shall be held in an interest-bearing account and invested in Permitted
Investments in accordance with the terms of the Cash Management Agreement.

 

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

 

(b)           During
an Escrow Reserve Period, provided that Lender has not accelerated the Loan,
Lender shall direct Agent to disburse to Borrower the Capital Expenditure Funds
in order to pay or reimburse Borrower for Capital Expenditures reasonably
approved by Lender. Lender may require that Borrower satisfy the following
conditions prior to directing Agent to make such disbursements: (i) at least
ten (10) days prior to the disbursement, Borrower shall submit to Lender a
request for payment, which request shall specify the Capital Expenditures to be
paid, (ii) Lender shall receive a certificate from Borrower (A) stating that
the items to be funded by the requested disbursement are Capital Expenditures,
(B) stating that all Capital Expenditures (or part thereof) at the Property to
be funded by the requested disbursement have been completed in a good and
workmanlike manner and in accordance with all applicable Legal Requirements,
such certificate to be accompanied by a copy of any license, permit or other
approval required by any Governmental Authority in connection with the Capital
Expenditures, (C) identifying each Person that supplied materials or labor in
connection with the Capital Expenditures to be funded by the requested
disbursement, and (D) stating that each such Person has been paid in full or
will be paid in full (for all work performed to date, exclusive of any
applicable retainage) upon such disbursement, such certificate to be
accompanied by lien waivers or other evidence of payment reasonably
satisfactory to Lender (which may be conditional as to the requested
disbursement), (iv) at Lender’s option, if the disbursement is in excess of
$100,000, Lender shall receive a title search for the Property indicating that
the Property is free from all Liens, claims and other encumbrances not
previously approved by Lender other than Permitted Encumbrances, and
(v) Lender shall receive such other evidence as Lender shall reasonably
request that the Capital Expenditures at the Property to be funded by the
requested disbursement have been completed and are paid for or will be paid
(other than retainage, if applicable) upon such disbursement to Borrower.

 

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

 

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

 

64

 

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

 

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

 

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

 

Section 6.5            Rollover Funds.

 

6.5.1       Deposits of Rollover
Funds.  On the Closing Date,
Borrower has deposited with Agent the sum of Four Million and No/100 Dollars
($4,000,000.00) to be held by Agent in an interest-bearing account and invested
in Permitted Investments in accordance with the terms of the Cash Management
Agreement, which amount shall be disbursed to Borrower pursuant to this Section
6.5 for tenant improvements, leasing commissions and other leasing costs
(including free rent to the extent Borrower provides the applicable Tenant with
free rent in lieu of a tenant improvement allowance) incurred by Borrower in
connection with any Leases or renewals of Leases (a) executed after the date
hereof and (b) relating to (i) space demised under the Trizec Lease as of the
date hereof or (ii) space which is vacant as of the date hereof (each, a “Replacement
Lease”). Amounts deposited pursuant to this Section 6.5.1, and
any interest earned thereon, are referred to herein as the “Rollover Funds”.

 

6.5.2       Release of Rollover Funds.  (a) Subject to the provisions set forth
in Section 6.6.2(c), Lender shall direct Agent to disburse to Borrower
the Rollover Funds upon satisfaction by Borrower of each of the following
conditions: (i) Borrower shall submit a request for payment to Lender at least
ten (10) days prior to the date on which Borrower requests such payment be made
and specifies the tenant improvement costs, leasing commissions and/or other
leasing costs 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 approved, to the extent required by Section 4.1.9
hereof, the applicable Replacement Lease (or such Replacement Lease shall have
been deemed approved in accordance with Section 4.1.9 hereof), in
respect of which Borrower is obligated to pay or reimburse the tenant
improvement costs, leasing commissions and/or other leasing costs specified in
its request for payment (or, in

 

65

 

the case of
free rent, in respect of which Borrower is obligated to provide free rent
specified in its request for payment), (iv) with respect to any Rollover Funds
to be released by Lender for tenant improvements required to be performed by
Borrower, leasing commissions or other leasing costs pursuant to any
Replacement Lease, Lender shall have received a budget for such tenant
improvement costs and a reasonably detailed schedule of leasing commissions
payments and other leasing costs (including free rent, if any) and the
requested disbursement will be used to pay all or a portion of such costs and
payments, (v) with respect to any Rollover Funds to be released by Lender for
tenant improvements required to be performed by Borrower pursuant to or in
connection with a Replacement Lease, Lender shall have received a certificate
from Borrower (A) stating that all such tenant improvements at the Property to
be funded by the requested disbursement have been completed in good and workmanlike
manner and in accordance with all applicable federal, state and local laws,
rules and regulations, such certificate to be accompanied by a copy of any
license, permit or other approval by any Governmental Authority required in
connection with such tenant improvements, (B) identifying each Person that
supplied materials or labor in connection with the tenant improvements to be
funded by the requested disbursement, and (C) stating that each such Person has
been paid in full or will be paid in full upon such disbursement for work
performed to date subject to applicable retainage (if any), such certificate to
be accompanied by lien waivers or other evidence of payment reasonably
satisfactory to Lender (which may be conditional as to the requested disbursement),
(vi) with respect to any Rollover Funds to be released by Lender for tenant
improvements required to be performed by Borrower pursuant to or in connection
with a Replacement Lease, at Lender’s option, if the disbursement is in excess
of $250,000, a title search for the Property indicating that the Property is
free from all Liens, claims and other encumbrances not previously approved by
Lender other than Permitted Encumbrances and (vii) with respect to any Rollover
Funds to be released by Lender for tenant improvements required to be performed
by Borrower pursuant to a Replacement Lease, Lender shall have received such
other evidence as Lender shall reasonably request that the tenant improvements
at the Property to be funded by the requested disbursement have been completed
and are paid for or will be paid upon such disbursement to Borrower (subject to
retainage amounts, if applicable). Lender shall not be required to disburse
Rollover Funds more frequently than once each calendar month, unless such requested
disbursement is in an amount greater than the Minimum Disbursement Amount (or a
lesser amount if the total amount of Rollover Funds is less than the Minimum
Disbursement Amount, in which case only one disbursement of the amount
remaining in the account shall be made). All disbursements of Rollover Funds
made by Lender in respect of any free rent shall be deposited into the Clearing
Account as if such sums were received by Borrower as Rent during the calendar
month after such request is made by Borrower.

 

(b)           Notwithstanding
the foregoing provisions of this Section 6.5, provided no Event of
Default exists, (i) if Borrower achieves a Debt Service Coverage Ratio of at
least 1.30 to 1.0 for two (2) consecutive calendar quarters, then any remaining
Rollover Funds shall be promptly returned to Borrower, and (ii) if Borrower
enters into Leases or renewals of Leases after the date hereof for all of the
space at the Property for which Rollover Funds may be used hereunder, then any
remaining Rollover Funds shall be promptly returned to Borrower; provided
that, with respect to clause (ii), (A) such Leases may not be terminated
without cause by the tenants thereunder upon less than six (6) months’ notice
and (B) there are no outstanding tenant improvements, leasing commissions or
other leasing costs under or with respect to such Leases or renewals of Leases
that have not been paid for or otherwise satisfied. In addition, any

 

66

 

Rollover Funds
remaining after the Debt has been paid in full shall be promptly returned to
Borrower.

 

(c)           For
purposes of clarification, it is understood and agreed that no portion of
Rollover Funds disbursed by Lender in accordance with this Section 6.5
may be used to pay for any tenant improvements, leasing commissions and other
leasing costs that a Tenant is obligated to pay for under such Tenant’s Lease
unless Borrower is obligated to reimburse such Tenant for such items pursuant
to such Tenant’s Lease.

 

Section 6.6            Lease Termination
Rollover Funds.

 

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

 

6.6.2       Release of Lease
Termination Rollover Funds.  (a) Lender
shall direct Agent to disburse to Borrower the Lease Termination Rollover Funds
upon satisfaction by Borrower of each of the following conditions: (i) Borrower
shall submit a request for payment to Lender at least ten (10) days prior to
the date on which Borrower requests such payment be made and (A) specifies the
tenant improvement costs, leasing commissions and/or other leasing costs to be
paid for the Termination Space or (B) specifies the amount by which the rent
expected to be obtained by Borrower for the Termination Space during the next
succeeding calendar month pursuant to the Lease or Leases (if any) for such
Termination Space (a “Termination Space
Replacement Lease”) is less than the amount of monthly rent received
from the previous Tenant in the Termination Space pursuant to its Lease prior
to such termination (the “Rent Deficiency”),
(ii) on the date such request is received by Lender and on the date such
payment is to be made, no Event of Default shall exist and remain uncured,
(iii) Lender shall have approved, to the extent required by Section 4.1.9
hereof, the Termination Space Replacement Lease (or such Termination Space
Replacement Lease shall have been deemed approved in accordance with Section 4.1.9
hereof), in respect of which Borrower is obligated to pay or reimburse certain
tenant improvement costs, leasing commissions and/or other leasing costs
specified in its request for payment (or, in the case of free rent, in respect
of which Borrower is obligated to provide free rent specified in its request
for payment), (iv) with respect to any Lease Termination Rollover Funds to be
released by Lender for tenant improvements required to be performed by
Borrower, leasing commissions or other leasing costs pursuant to a Termination
Space Replacement Lease, Lender shall have received a budget for such tenant
improvement costs and a reasonably detailed

 

67

 

schedule of
leasing commissions payments and other leasing costs (including free rent, if
any) and the requested disbursement will be used to pay all or a portion of
such costs and payments, (v) with respect to any Lease Termination Rollover
Funds to be released by Lender for tenant improvements required to be performed
by Borrower pursuant to a Termination Space Replacement Lease, Lender shall
have received a certificate from Borrower (A) stating that all such tenant
improvements at the Property to be funded by the requested disbursement have
been completed in good and workmanlike manner and in accordance with all
applicable federal, state and local laws, rules and regulations, such
certificate to be accompanied by a copy of any license, permit or other
approval by any Governmental Authority required in connection with such tenant
improvements, (B) identifying each Person that supplied materials or labor in
connection with the tenant improvements to be funded by the requested
disbursement, and (C) stating that each such Person has been paid in full or
will be paid in full upon such disbursement for work performed to date subject
to applicable retainage (if any), such certificate to be accompanied by lien
waivers or other evidence of payment reasonably satisfactory to Lender (which
may be conditional as to the requested disbursement), (vi) with respect to any
Lease Termination Rollover Funds to be released by Lender for tenant
improvements required to be performed by Borrower pursuant to a Termination
Space Replacement Lease, at Lender’s option, if the disbursement is in excess
of $250,000, a title search for the Property indicating that the Property is
free from all Liens, claims and other encumbrances not previously approved by
Lender other than Permitted Encumbrances and (vii) with respect to any Lease
Termination Rollover Funds to be released by Lender for tenant improvements
required to be performed by Borrower pursuant to a Termination Space
Replacement Lease, Lender shall have received such other evidence as Lender
shall reasonably request that the tenant improvements at the Property to be
funded by the requested disbursement have been completed and are paid for or
will be paid upon such disbursement to Borrower (subject to retainage amounts,
if applicable). Lender shall not be required to disburse Lease Termination
Rollover Funds more frequently than once each calendar month, unless such
requested disbursement is in an amount greater than the Minimum Disbursement
Amount (or a lesser amount if the total amount of Lease Termination Rollover
Funds is less than the Minimum Disbursement Amount, in which case only one
disbursement of the amount remaining in the account shall be made). All Rent
Deficiency disbursements made by Lender shall be deposited into the Clearing
Account as if such sums were received by Borrower as Rent during the calendar
month after such request is made by Borrower. All disbursements of Lease
Termination Rollover Funds made by Lender in respect of any free rent shall be
deposited into the Clearing Account as if such sums were received by Borrower as
Rent during the calendar month after such request is made by Borrower.

 

(b)           Notwithstanding
the foregoing provisions of this Section 6.6.2, upon receipt by Lender
of evidence that, with respect to any new Termination Space Replacement Lease
with a term of at least five (5) years, all tenant improvements required to be
completed by Borrower pursuant to the Termination Space Replacement Lease, if
any, have been completed and all leasing commissions required to be paid by
Borrower with respect to the Termination Space Replacement Lease, if any, have
been paid, and provided no Event of Default then exists, Lender shall direct
Agent to disburse to Borrower the Lease Termination Rollover Funds on deposit
with respect to such Termination Space. Any Lease Termination Rollover Funds
remaining after the Debt has been paid in full shall be promptly returned to
Borrower.

 

68

 

(c)           In
connection with any tenant improvements, leasing commissions and other leasing
costs incurred by Borrower with respect to any Termination Space, if the
conditions to the disbursement of Rollover Funds set forth in Section 6.5
and the conditions to the disbursement of Lease Termination Rollover Funds set
forth in Section 6.6 are both satisfied, Lease Termination Rollover
Funds shall be disbursed to Borrower to pay for such tenant improvements,
leasing commissions and other leasing costs, but Lender shall not disburse any
Rollover Funds to Borrower to pay for such tenant improvements, leasing commissions
and other leasing costs; provided, that, if then remaining Lease
Termination Rollover Funds shall not be sufficient to pay for such tenant
improvements, leasing commissions and other leasing costs, Lender shall
disburse to Borrower Rollover Funds in an amount equal to such deficiency.

 

(d)           For
purposes of clarification, it is understood and agreed that no portion of Lease
Termination Rollover Funds disbursed by Lender in accordance with this Section
6.6 may be used to pay for any tenant improvements, leasing commissions and
other leasing costs that a Tenant is obligated to pay for under such Tenant’s
Lease unless Borrower is obligated to reimburse such Tenant for such items
pursuant to such Tenant’s Lease.

 

Section 6.7            Unfunded Tenant
Allowance Reserve Funds.  On the
Closing Date, Borrower has deposited with Agent the sum of $16,690,498 to be
held by Agent in an interest-bearing account and invested in Permitted
Investments in accordance with the terms of the Cash Management Agreement,
which amount shall be disbursed to Borrower pursuant to this Section 6.7
for Unfunded Tenant Allowances associated with the Leases set forth on Schedule
VI attached hereto, and the amount of such disbursements shall not exceed
the applicable amount of Unfunded Tenant Allowances set forth on Schedule VI.
Amounts so deposited with Agent and all interest earned thereon shall
hereinafter be referred to as the “Unfunded
Tenant Allowance Reserve Funds” and the account to which such
amounts are held shall hereinafter be referred to as the “Unfunded Tenant Allowance Reserve Account”.
Lender shall direct Agent to disburse to Borrower Unfunded Tenant Allowance
Reserve Funds for tenant improvements or any other cost represented by the
relevant Unfunded Tenant Allowance provided (i) Borrower submits to Lender a
request for payment on Lender’s standard form of draw request or other form
reasonably acceptable to Lender at least five (5) Business Days prior to the
date on which Borrower requests such payment be made, (ii) on the date such
payment is to be made, no Event of Default shall exist and remain uncured,
(iii) Lender shall have received a certificate from Borrower certifying that
any conditions to the disbursement of funds set forth in the applicable Lease
have been satisfied, (iv) if applicable, such certificate is accompanied by
paid invoices (or unpaid invoices if such disbursement is being made to pay
such invoices) for the amounts requested, and (v) the aggregate amount of any
such disbursements for any Lease shall not exceed the amount of Unfunded Tenant
Allowance designated for such Lease on Schedule VI attached hereto. Provided
no Event of Default exists, all funds remaining in the Unfunded Tenant
Allowance Reserve Account after all disbursements of the Unfunded Tenant Allowance
Reserve Funds have been made in accordance with this Section 6.7 shall
be released to Borrower, along with any interest earned thereon; provided,
however, if Borrower can demonstrate to Lender’s reasonable satisfaction that
the full amount of all Unfunded Tenant Allowances owed to a Tenant under a
particular Lease have been funded by Lender to Borrower pursuant to the terms
set forth in this Section 6.7, then, provided no Event of Default
exists, any excess Unfunded Tenant Allowance Reserve Funds remaining in the
Unfunded Tenant Allowance Reserve Account and allocated to such Lease shall be
disbursed to Borrower.

 

69

 

The funds deposited by Borrower into the Unfunded Tenant Allowance
Reserve Account represent Unfunded Tenant Allowances with respect to the UTA
Leases. Lender and Borrower acknowledge and agree that Borrower is not required
to deposit (and has not deposited with Lender) any funds with respect to
Unfunded Tenant Allowances applicable to any Lease other than the UTA Leases,
and no Unfunded Tenant Allowance Reserve Funds shall be disbursed by Lender
with respect to any Unfunded Tenant Allowances for any Leases other than the
UTA Leases. Any Unfunded Tenant Allowance Reserve Funds remaining after the
Debt has been paid in full shall be promptly returned to Borrower.

 

Section 6.8            Intentionally Omitted.

 

Section 6.9            Application of Reserve
Funds.  (a)  In the event Lender accelerates the Loan
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.

 

(b)           Without
limiting the generality of the provisions set forth in Section 6.9(a),
upon the occurrence and during the continuance of an Event of Default, Lender,
at its option, may withdraw the Rollover Funds, the Lease Termination Rollover
Funds and/or the Unfunded Tenant Allowance Reserve Funds and apply the same to
the items for which such 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 Rollover Funds, the Lease
Termination Rollover Funds and the Unfunded Tenant Allowance Reserve Funds
shall be in addition to all other rights and remedies provided to Lender under
the Loan Documents.

 

Section 6.10         Security Interest in
Reserve Funds.

 

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

 

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

 

6.10.3     Prohibition Against
Further Encumbrance.  Borrower
shall not, without the prior consent of Lender, further pledge, assign or grant
any security interest in the Reserve Funds or permit any lien or encumbrance to
attach thereto, or any levy to be made thereon, or any UCC-1 Financing
Statements, except those naming Lender as the secured party, to be filed with
respect thereto.

 

70

 

Section 6.11         Letters of Credit.

 

6.11.1     Delivery of Letters of
Credit.  (a)  In lieu of making the payments to any of the
Reserve Funds, Borrower may deliver to Lender a Letter of Credit in accordance
with the provisions of this Section 6.11. Additionally, Borrower
may deliver to Lender a Letter of Credit in accordance with the provisions of
this Section 6.11 in lieu of deposits previously made to the
Reserve Funds. The aggregate amount of any Letter of Credit and cash on deposit
with respect to the Capital Expenditure Funds, the Rollover Funds, the Lease
Termination Rollover Funds and/or the Unfunded Tenant Allowance Reserve Funds
shall at all times be at least equal to the aggregate amount which Borrower is
required to have on deposit in such Reserve Fund pursuant to this Agreement. The
aggregate amount of any Letter of Credit and cash on deposit with respect to
the Tax Funds shall at all times be at least equal to the aggregate which
Borrower would be required to deposit in such Reserve Fund over the next twelve
(12) month period. The aggregate amount of any Letter of Credit and cash on
deposit with respect to the Insurance Funds shall at all times be at least
equal to the aggregate which Borrower would be required to deposit in such
Reserve Fund over the next twelve (12) month period. In the event that a Letter
of Credit is delivered in lieu of any portion of the Tax Funds or the Insurance
Funds, Borrower shall be responsible for the payment of Taxes or Insurance
Premiums, as applicable, and Lender shall not be responsible therefor. Any
Letter of Credit delivered by Borrower to Lender with respect to the Rollover
Funds, the Lease Termination Rollover Funds and/or the Unfunded Tenant
Allowance Reserve Funds may provide that the amount thereof reduces (or that
Borrower may amend such Letter of Credit to reduce the amount thereof) to
reflect the payment of the applicable tenant improvement costs, leasing
commissions and other leasing costs in accordance with the terms of this
Agreement.

 

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

 

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

 

Section 6.12         Provisions Regarding
Letters of Credit.

 

6.12.1     Security for Debt.  (a) 
Each Letter of Credit delivered under this Agreement shall be additional
security for the payment of the Debt.

 

(b)           In
the event Lender accelerates the Loan 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

 

71

 

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 2.4.3. On the Maturity Date, any such Letter of Credit
may be applied to reduce the Debt.

 

(c)           Without
limiting the generality of the provisions set forth in Section 6.12.1(b),
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 with
respect to the Rollover Funds, the Lease Termination Rollover Funds and/or the
Unfunded Tenant Allowance Reserve Funds 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 2.4.3.

 

6.12.2     Additional Rights of
Lender.  In addition to any other
right Lender may have to draw upon a Letter of Credit pursuant to the terms and
conditions of this Agreement, Lender shall have the additional rights to draw
in full any Letter of Credit:  (a) with
respect to any evergreen Letter of Credit, if Lender has received a notice from
the issuing bank that the Letter of Credit will not be renewed and a substitute
Letter of Credit is not provided at least thirty (30) days prior to the date on
which the outstanding Letter of Credit is scheduled to expire; (b) with respect
to any Letter of Credit with a stated expiration date, if Lender has not
received a notice from the issuing bank that it has renewed the Letter of
Credit at least thirty (30) days prior to the date on which such Letter of
Credit is scheduled to expire and a substitute Letter of Credit is not provided
at least thirty (30) days prior to the date on which the outstanding Letter of
Credit is scheduled to expire; (c) upon receipt of notice from the issuing bank
that the Letter of Credit will be terminated (except if the termination of such
Letter of Credit is permitted pursuant to the terms and conditions of this
Agreement or a substitute Letter of Credit is provided); or (d) if Lender has
received notice that the bank issuing the Letter of Credit shall cease to be an
Eligible Institution. Notwithstanding anything to the contrary contained in the
above, Lender is not obligated to draw any Letter of Credit upon the happening
of an event specified in (a), (b), (c) or (d) above and shall not be liable for
any losses sustained by Borrower due to the insolvency of the bank issuing the
Letter of Credit if Lender has not drawn the Letter of Credit.

 

VII.         PROPERTY MANAGEMENT

 

Section 7.1            The Management
Agreement.  Borrower shall cause
Manager to manage the Property in accordance with the Management Agreement and
Lender acknowledges that the Management Agreement has been approved by Lender. Borrower
shall (i) diligently perform and observe all of the terms, covenants and conditions
of the Management Agreement on the part of Borrower to be performed and
observed and (ii) promptly notify Lender of any notice to Borrower of any
default by Borrower in the performance or observance of any of the terms,
covenants or conditions of the Management Agreement on the part of Borrower to
be performed and observed. If Borrower shall default, beyond the expiration of
any applicable notice and cure period, in the performance or observance of any
material term, covenant or condition of the Management Agreement on the part of
Borrower to be performed or observed, then, without limiting Lender’s other
rights or remedies under this Agreement or the other Loan

 

72

 

Documents, and
without waiving or releasing Borrower from any of its obligations hereunder or
under the Management Agreement, Lender shall have the right, but shall be under
no obligation, to pay any sums and to perform any act as may be appropriate to
cause all the material terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed or observed.

 

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

 

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

 

VIII.        PERMITTED TRANSFERS

 

Section 8.1            Permitted Transfer of
the Property.  Lender shall not
withhold its consent to a conveyance of the Property in its entirety to any
transferee provided that (a) Lender has received an agreement, acceptable to it
in its reasonable discretion, pursuant to which such transferee assumes all of
Borrower’s obligations under the Loan Documents, (b) Lender receives a transfer
fee equal to (i) Ten Thousand and No/100 Dollars ($10,000.00) if such transfer
is to Beacon Entity or any entity at least fifty percent (50%) directly or
indirectly owned by Beacon Entity and directly or indirectly controlled by
Beacon Entity or (ii) Seventy-Five Thousand and No/100 Dollars ($75,000.00) if such
transfer is to any other entity, (c) Lender

 

73

 

shall have
received such documents, certificates and legal opinions as it may reasonably
request, (d) no Event of Default shall have occurred and be continuing
hereunder, and, if a Mezzanine Loan is outstanding, no “Event of Default” has
occurred and is continuing under the Mezzanine Loan Agreement, (e) Borrower
shall pay all reasonable, out-of-pocket costs and expenses of Lender in
connection with such transfer, (f) either (i) such transferee is a Permitted
Transferee or (ii) if such transferee is not a Permitted Transferee, Lender
shall have approved such transferee (such approval not to be unreasonably
withheld, conditioned or delayed) or, if any Securities are outstanding, Lender
has received a Rating Agency Confirmation as to the conveyance of the Property,
(g) the transferee qualifies as a single purpose, bankruptcy remote entity
under criteria established by the Rating Agencies, and (h) there is delivered
to Lender a non-consolidation opinion acceptable to the Rating Agencies (or if
no Securities are outstanding at the time, acceptable to Lender in its
reasonable discretion). If a Mezzanine Loan is outstanding, Borrower shall not
be permitted to transfer the Property unless Borrower obtains the prior written
consent of Mezzanine Lender to the extent required by the Mezzanine Loan
Agreement. In the event that such conveyance is a transfer of the Property in
its entirety to a Person that is not an Affiliate of Borrower or Guarantor, the
current Guarantor shall be released from and relieved of any of its obligations
under the Guaranty arising or occurring after the date of such conveyance or
transfer (other than for any acts or events which were caused by or arise out
of any acts, events or omissions of Guarantor, Borrower or its Affiliates
occurring prior to such conveyance) provided  that, and as a
condition to such release, (1) there is delivered to Lender a Rating
Agency Confirmation with respect to the replacement Guarantor, if the Loan has
been included in a Securitization, (2) an Affiliate of the transferee of the
Property approved by the Lender (in its reasonable discretion) assumes the
obligations of the current Guarantor under the Guaranty (as to any acts or
events which occur after the conveyance or transfer) and (3) if applicable but
subject to the provisions in subsection (2) above, such new Guarantor executes,
without any cost or expense to Lender, a substitution agreement or a new
Guaranty in substantially the same form as the Guaranty executed as of the date
hereof.

 

Section 8.2            Permitted Transfers of
Interest in Borrower.

 

Notwithstanding anything to the contrary contained in the Loan
Documents, the restrictions on Transfers of direct or indirect ownership
interests in Borrower (including, without limitation, direct or indirect
interests in Beacon Entity) set forth herein, in the Mortgage or in any other
Loan Document shall not apply to the Transfer of direct or indirect interests
in Borrower (including, without limitation, direct or indirect interests in
Beacon Entity) provided that (i) no Event of Default shall have occurred and be
continuing, (ii) Borrower shall pay all reasonable out-of-pocket costs and
expenses of Lender in connection with such Transfer, (iii) Lender shall have
received such documents, certificates and legal opinions as it may reasonably
request, (iv) after such Transfer Borrower shall maintain its status as a
single purpose, bankruptcy remote entity under criteria established herein, (v)
if after giving effect to such Transfer and all prior Transfers, more than
forty nine percent (49%) in the aggregate of direct or indirect interests in
Borrower are owned by any Person and its Affiliates that owned less than a
forty nine percent (49%) direct or indirect interest in Borrower as of the
Closing Date, Lender shall receive a non-consolidation opinion reasonably
acceptable to Lender and acceptable to the Rating Agencies and (vi) following
such Transfer (x) Beacon Entity owns directly or indirectly fifty

 

74

 

percent (50%) or more of the interests in Borrower on an unencumbered
basis and directly or indirectly controls Borrower, or (y) Permitted
Transferees own in the aggregate directly or indirectly fifty percent (50%) or
more of the interests in Borrower on an unencumbered basis and directly or
indirectly control Borrower, provided Mezzanine Lender, if any, approves such
Permitted Transferee in accordance with and to the extent required by the
Mezzanine Loan Agreement, or (z) another Person (A) which Lender has
approved (such approval not to be unreasonably withheld, conditioned or
delayed) or, if any Securities are outstanding, with respect to which Lender
has received a Rating Agency Confirmation, and which Mezzanine Lender, if any,
has approved in accordance with and to the extent required by the Mezzanine
Loan Agreement; and (B) owns in the aggregate directly or indirectly fifty
percent (50%) or more of the interests in Borrower on an unencumbered basis and
directly or indirectly controls Borrower. For purposes of this Section 8.2,
“control” shall mean the ability to control the day to day and general
management decisions regarding the Property. In the event that any such
conveyance or transfer of any direct or indirect interests in Borrower results
in the then current Guarantor and its Affiliates owning directly or indirectly
no legal or beneficial interests in Borrower, then the current Guarantor shall
be released from and relieved of any of its obligations under the Guaranty
arising or occurring after the date of such conveyance or transfer (other than
for any acts or events which were caused by or arise out of any acts, events or
omissions of Guarantor, Borrower or its Affiliates occurring prior to such
conveyance) provided  that, and as a condition to such release,
(1) there is delivered to Lender a Rating Agency Confirmation with respect
to the replacement Guarantor, if the Loan has been included in a
Securitization, (2) an Affiliate of the transferee of the Property approved by
the Lender (in its reasonable discretion) assumes the obligations of the
current Guarantor under the Guaranty (as to any acts or events which occur
after the conveyance or transfer) and (3) if applicable but subject to the
provisions in subsection (2) above, such new Guarantor executes, without any
cost or expense to Lender, a substitution agreement or a new Guaranty in
substantially the same form as the Guaranty executed as of the date hereof.

 

IX.           SALE AND SECURITIZATION
OF MORTGAGE

 

Section 9.1            Sale of Mortgage and
Securitization.

 

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

 

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

 

(i)            (A)
provide updated financial and other information with respect to the Property,
the business operated at the Property, Borrower and the Manager (if an
Affiliate of Borrower and, if not an Affiliate of Borrower, only such
information as is reasonably requested by Lender and within Borrower’s
possession), (B) provide updated budgets relating to the Property and (C)
provide updated appraisals, market studies, environmental reviews (Phase I’s
and, if recommended by Phase I’s, Phase II’s), property condition reports
and other due diligence

 

75

 

investigations
of the Property (the “Updated Information”),
together, if customary, with appropriate verification of the Updated
Information through letters of auditors or opinions of counsel acceptable to
Lender and the Rating Agencies;

 

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

 

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

 

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

 

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

 

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

 

(i)            If,
at the time a Disclosure Document is being prepared for a Securitization,
Lender expects that Borrower alone or Borrower and one or more Affiliates of
Borrower collectively, or the Property alone or the Property and Related
Property collectively, will be a Significant Obligor, Borrower shall furnish to
Lender upon request (x) the selected financial data relating to Borrower or the
Property or, if applicable, Net Operating Income, required under Item
1112(b)(1) of Regulation AB, if Lender expects that the principal amount of the
Loan together with any Related Loans as of the cut-off date for such
Securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such Securitization does, equal or
exceed ten percent (10%) (but less than twenty percent (20%)) of the aggregate
principal amount of all mortgage loans included or expected to be included, as
applicable, in the Securitization or (y) the financial statements relating to
Borrower or the Property required under Item 1112(b)(2) of Regulation AB, if
Lender expects that the principal

 

76

 

amount of the
Loan together with any Related Loans as of the cut-off date for such
Securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such Securitization does, equal or
exceed twenty percent (20%) of the aggregate principal amount of all mortgage
loans included or expected to be included, as applicable, in the Securitization.
Such financial data or financial statements shall be furnished to Lender
(A) within ten (10) Business Days (or, if an audit is required, thirty
(30) Business Days) after notice from Lender in connection with the preparation
of Disclosure Documents for the Securitization, (B) not later than forty
(40) days after the end of each fiscal quarter of Borrower and (C) not later
than eighty-five (85) days after the end of each Fiscal Year of Borrower; provided,
however, that Borrower shall not be obligated to furnish financial data
or financial statements pursuant to clauses (B) or (C) of this sentence with
respect to any period for which a filing pursuant to the Exchange Act in
connection with or relating to the Securitization (an “Exchange Act Filing”) is not required. If
requested by Lender, Borrower shall use commercially reasonable efforts to
obtain and deliver to Lender financial data and/or financial statements for any
tenant of the Property if, in connection with a Securitization, Lender expects
there to be, with respect to such tenant or group of affiliated tenants, a
concentration within all of the mortgage loans included or expected to be
included, as applicable, in the Securitization such that such tenant or group
of affiliated tenants would constitute a Significant Obligor.

 

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

 

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

 

77

 

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

 

(v)           Any
reports, statements or other information required to be delivered pursuant to
this Section 9.1(c) shall be delivered (i) in paper form,
(ii) on a diskette, and (iii) if requested by Lender and within the
capabilities of Borrower’s data systems without change or modification thereto,
in electronic form and prepared using a Microsoft Word for Windows or
WordPerfect for Windows files (which files may be prepared using a spreadsheet
program and saved as word processing files). 
Borrower agrees that Lender may disclose information regarding the
Property and Borrower that is provided to Lender pursuant to this Section 9.1(c)(v)
in connection with the Securitization to such parties requesting such
information in connection with such Securitization.

 

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

 

Section 9.2            Securitization
Indemnification.

 

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

 

(b)           Borrower
shall provide in connection with each of (i) a preliminary and a final private
placement memorandum or (ii) a preliminary and final prospectus or prospectus
supplement, as applicable, an agreement (A) certifying that Borrower has
examined the sections of the Disclosure Documents delivered by Lender to
Borrower relating solely to Borrower, Borrower Affiliates, the Property, and
the Manager (the “Specified Sections”),
and that such Specified Sections do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading or specifying such untrue statement (it being agreed that
Borrower shall not be required to review any other sections of the Disclosure
Document other than the Specified Sections), (B) indemnifying Lender (and for
purposes of this Section 9.2, Lender hereunder shall include its
officers and directors), the Affiliate of Merrill

 

78

 

Lynch &
Co., Inc. (“Merrill”) that
has filed the registration statement relating to the Securitization (the “Registration Statement”), each of its
directors, each of its officers who have signed the Registration Statement and
each Person that controls the Affiliate within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act (collectively, the
“Merrill Group”), Merrill,
any other placement agent or underwriter with respect to the Securitization,
each of their respective directors and each Person who controls Merrill or any
other placement agent or underwriter within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any losses,
claims, damages or liabilities (collectively, the “Liabilities”) to which Lender, the
Merrill Group or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such Specified Sections or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated in such sections or necessary in
order to make the statements in such Specified Sections, in light of the
circumstances under which they were made, not misleading (it being agreed that
Borrower shall not be responsible for any losses which would not have been
suffered if Lender had corrected any statements contained in the Specified
Sections identified by Borrower in writing to have been untrue or misleading)
and (C) agreeing to reimburse Lender, the Merrill Group and/or the Underwriter
Group for any legal or other expenses reasonably incurred by Lender, the
Merrill Group and the Underwriter Group in connection with investigating or
defending the Liabilities; provided, however, that Borrower will be liable in
any such case under clauses (B) or (C) above only to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender in its capacity as “lender” hereunder by or on
behalf of Borrower in connection with the preparation of the Disclosure
Document or in connection with the underwriting or closing of the Loan,
including, without limitation, financial statements of Borrower, operating
statements and rent rolls with respect to the Property and provided further,
however, that with respect to statements made in such Specified Sections that
are based upon information provided by third parties, Borrower will be liable
only if Borrower knew that such information was false or omitted to state a
material fact known to Borrower and necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading.
This indemnity agreement will be in addition to any liability which Borrower
may otherwise have.

 

(c)           In
connection with Exchange Act Filings, Borrower shall (i) indemnify Lender, the
Merrill Group and the Underwriter Group for Liabilities to which Lender, the
Merrill Group or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon the omission or alleged omission to
state in the Specified Sections a material fact required to be stated in the
Specified Sections in order to make the statements in the Specified Sections,
in light of the circumstances under which they were made, not misleading and
(ii) reimburse Lender, the Merrill Group or the Underwriter Group for any
legal or other expenses reasonably incurred by Lender, the Merrill Group or the
Underwriter Group in connection with defending or investigating the Liabilities.
Borrower will be liable in any such case under this Section 9.2(c) only to
the extent that any such liability arises out of or is based upon any such
untrue statement or omission made in the Specified Sections 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 Documents or in
connection with the underwriting of the Loan, including, without limitation,
financial statements of Borrower, operating statements and

 

79

 

rent rolls
with respect to the Property, provided, however, that with
respect to statements made in the Specified Sections that are based upon
information provided by third parties, Borrower will be liable only if Borrower
knew that such information was false or omitted to state a material fact known
to Borrower and necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.

 

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

 

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

 

80

 

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

 

X.            DEFAULTS

 

Section 10.1         Event of Default.

 

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

 

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

 

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

 

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

 

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

 

(v)           if
any representation or warranty made by Borrower herein or in any other Loan
Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender by or on behalf of
Borrower shall have been false or misleading in any material respect as of the
date the representation or warranty was made; provided that Borrower shall have
twenty (20) days after notice from Lender to cure in a manner satisfactory to
Lender any such breach of a representation or warranty that is susceptible to
cure, except that Borrower shall have no opportunity to cure any breach of a
representation or warranty (A) made to the best of Borrower’s knowledge
(i.e., which Borrower knew was false when made), (B) that was otherwise intentionally
misrepresented, or (C) made pursuant to Section 3.1.8 or 3.1.24
hereof;

 

(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;

 

81

 

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 the Insolvency Opinion, or in any other
non-consolidation opinion delivered to Lender in connection with the Loan, or
in any other non-consolidation opinion delivered subsequent to the closing of
the Loan, is or shall become untrue in any material respect;

 

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

 

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

 

(xii)          if
there shall be an “Event of Default” under (and as defined in) any of the other
Loan Documents;  

 

(xiii)         if
(A) there occurs any event or condition that gives any party to the REOA
(other than Fee Borrower) the right to terminate or cancel the REOA and such
event or condition is not cured within any applicable cure period under the
REOA, or (B) the REOA is terminated or cancelled without Lender’s prior
consent or (C) any of the terms, covenants or conditions of the REOA shall
be materially modified, supplemented, or amended without the prior written
consent of Lender; or

 

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

 

(b)           Upon
the occurrence of an Event of Default (other than an Event of Default described
in clause (vi), (vii) or (viii) above) and at any time thereafter during the
continuance of an Event of Default Lender may, in addition to any other rights
or remedies available to it pursuant to this Agreement and the other Loan
Documents or at law or in equity, take such action, without notice or demand,
that Lender deems advisable to protect and enforce its rights against Borrower
and in and to the Property, including, without limitation, declaring the Debt
to be immediately due and payable, and Lender may enforce or avail itself of
any or all

 

82

 

rights or
remedies provided in the Loan Documents against Borrower and the Property, including,
without limitation, all rights or remedies available at law or in equity; and
upon any Event of Default described in clause (vi), (vii) or (viii) above, the
Debt and all other obligations of Borrower hereunder and under the other Loan
Documents shall immediately and automatically become due and payable, without
notice or demand, and Borrower hereby expressly waives any such notice or
demand, anything contained herein or in any other Loan Document to the contrary
notwithstanding.

 

Section 10.2         Remedies.

 

(a)           Upon
the occurrence and during the existence of an Event of Default, all or any one
or more of the rights, powers, privileges and other remedies available to
Lender against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity
may be exercised by Lender at any time and from time to time, whether or not
all or any of the Debt shall be declared due and payable, and whether or not
Lender shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to the Property. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singly, successively, together
or otherwise, at such time and in such order as Lender may determine in its
sole discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law, equity
or contract or as set forth herein or in the other Loan Documents. Without
limiting the generality of the foregoing, if an Event of Default is continuing
(i) Lender is not subject to any “one action” or “election of remedies” law or
rule, and (ii) all liens and other rights, remedies or privileges provided to
Lender shall remain in full force and effect until Lender has exhausted all of
its remedies against the Property and the Mortgage has been foreclosed, sold
and/or otherwise realized upon in satisfaction of the Debt or the Debt has been
paid in full.

 

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

 

(c)           During
the continuance of an Event of Default, Lender shall have the right from time
to time to sever the Note and the other Loan Documents into one or more
separate notes, mortgages and other security documents (the “Severed Loan Documents”) in such
denominations as Lender shall determine in its sole discretion for purposes of
evidencing and enforcing its rights and remedies provided hereunder. Borrower
shall execute and deliver to Lender from time to time, promptly after the
request of Lender, a severance agreement and such

 

83

 

other
documents as Lender shall request in order to effect the severance described in
the preceding sentence, all in form and substance reasonably satisfactory to
Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make
and execute all documents necessary or desirable to effect the aforesaid severance,
Borrower ratifying all that its said attorney shall do by virtue thereof;
provided, however, Lender shall not make or execute any such documents under
such power until three (3) days after notice has been given to Borrower by
Lender of Lender’s intent to exercise its rights under such power. Except as
may be required in connection with a Securitization pursuant to Section 9.1
hereof, (i) Borrower shall not be obligated to pay any costs or expenses
incurred in connection with the preparation, execution, recording or filing of
the Severed Loan Documents, and (ii) the Severed Loan Documents shall not
contain any representations, warranties or covenants not contained in the Loan
Documents and any such representations and warranties contained in the Severed
Loan Documents will be given by Borrower only as of the Closing Date.

 

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

 

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

 

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

 

84

 

Default with
respect to Borrower shall not be construed to be a waiver of any subsequent
Default or Event of Default by Borrower or to impair any remedy, right or power
consequent thereon.

 

XI.           MISCELLANEOUS

 

Section 11.1         Successors and Assigns.  All covenants, promises and agreements in
this Agreement, by or on behalf of Borrower, shall inure to the benefit of the
legal representatives, successors and assigns of Lender.

 

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

 

Section 11.3         Governing Law.

 

(A)          THIS AGREEMENT WAS
NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY LENDER AND ACCEPTED BY
BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED
PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD
TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS WITH RESPECT TO THE PROPERTY (OTHER THAN
WITH RESPECT TO LIENS AND SECURITY INTERESTS IN PROPERTY WHOSE PERFECTION AND
PRIORITY IS COVERED BY ARTICLE 9 OF THE UCC (INCLUDING, WITHOUT LIMITATION, THE
CLEARING ACCOUNT AND 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,

 

85

 

TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION,
VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS
ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW,
BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS
AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW, EXCEPT AS OTHERWISE PROVIDED ABOVE.

 

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

 

GOULSTON & STORRS, PC

750 THIRD AVENUE, 22ND FLOOR

NEW YORK, NEW YORK 10017

ATTN:  MARC B. HELLER

 

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.

 

86

 

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

 

Section 11.5         Delay Not a Waiver.  Neither any failure nor any delay on the
part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under any other Loan Document, shall operate as or constitute a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of limitation, by accepting payment
after the due date of any amount payable under this Agreement or any other Loan
Document, Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement or the
other Loan Documents, or to declare a default for failure to effect prompt
payment of any such other amount. Lender shall have the right to waive or
reduce any time periods that Lender is entitled to under the Loan Documents in
its sole and absolute discretion.

 

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

 

	
  If to Lender:

  	
   

  	
  c/o Merrill Lynch & Co., Inc.

  
	
   

  	
   

  	
  4 World Financial Center

  
	
   

  	
   

  	
  New York, New York 10080

  
	
   

  	
   

  	
  Attn: Robert J. Spinna, Jr.

  
	
   

  	
   

  	
  Facsimile No. (212) 449-7684

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Cadwalader, Wickersham & Taft LLP

  
	
   

  	
   

  	
  One World Financial Center

  
	
   

  	
   

  	
  New York, New York 10281

  
	
   

  	
   

  	
  Attention: Alan Lawrence, Esq.

  
	
   

  	
   

  	
  Facsimile No. (212) 504-6666

  

 

87

 

	
  If to Borrower:

  	
   

  	
  c/o Beacon Capital Partners, LLC

  
	
   

  	
   

  	
  One Federal Street, 26th Floor

  
	
   

  	
   

  	
  Boston, Massachusetts 02110

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Facsimile No. (617) 457-0499

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Goulston & Storrs, PC

  
	
   

  	
   

  	
  400 Atlantic Avenue

  
	
   

  	
   

  	
  Boston, Massachusetts 02110-3333

  
	
   

  	
   

  	
  Attention: Robert J. Mack, Esq.

  
	
   

  	
   

  	
  Facsimile No. (617) 574-7613

  

 

Section 11.7         Trial by Jury.  BORROWER AND LENDER EACH HEREBY AGREES
NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES
ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM
OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL
BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER.

 

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

 

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

 

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

 

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

 

88

 

the right to
receive any notice from Lender with respect to any matter for which this
Agreement or the other Loan Documents do not specifically and expressly provide
for the giving of notice by Lender to Borrower.

 

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

 

Section 11.13       Expenses; Indemnity.

 

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

 

(b)           Borrower
shall indemnify, defend and hold harmless Lender and its officers, directors,
agents, employees (and the successors and assigns of the foregoing) (the “Lender Indemnitees”) from and against
any and all liabilities, obligations, losses, damages (excluding consequential
damages), penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the

 

89

 

reasonable
fees and disbursements of counsel for the Lender Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Lender Indemnitees shall be designated a party thereto),
that may be imposed on, incurred by, or asserted against the Lender Indemnitees
in any manner relating to or arising out of (i) any breach by Borrower of its
obligations under, or any material misrepresentation by Borrower contained in,
this Agreement or the other Loan Documents, or (ii) the use or intended use of
the proceeds of the Loan (collectively, the “Indemnified Liabilities”); provided, however, that
Borrower shall not have any obligation to the Lender Indemnitees hereunder to
the extent that such Indemnified Liabilities arise from the gross negligence,
illegal acts, fraud or willful misconduct of the Lender Indemnitees. To the
extent that the undertaking to indemnify, defend and hold harmless set forth in
the preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Lender Indemnitees.

 

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

 

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

 

Section 11.16       No Joint Venture or
Partnership; No Third Party Beneficiaries.

 

(a)           Borrower
and Lender intend that the relationships created hereunder and under the other
Loan Documents be solely that of borrower and lender. Nothing herein or therein
is intended to create a joint venture, partnership, tenancy-in-common, or joint
tenancy relationship between Borrower and Lender nor to grant Lender any
interest in the Property other than that of mortgagee, beneficiary or lender.

 

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

 

90

 

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.  Unless required by law, all news
releases, publicity or advertising by Borrower or its Affiliates through any
media intended to reach the general public which refers to the Loan Documents
or the financing evidenced by the Loan Documents, to Lender or any of their
Affiliates shall be subject to the prior approval of Lender, not to be
unreasonably withheld or delayed.

 

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 hereby represents
that it has dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the transactions contemplated by
this Agreement other than Eastdil

 

91

 

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

 

Section 11.22       Exculpation.  Subject to the qualifications below,
Lender shall not enforce the liability and obligation of Borrower to perform
and observe the obligations contained in the Note, this Agreement, the Mortgage
or the other Loan Documents by any action or proceeding wherein a money
judgment shall be sought against Borrower, except that Lender may bring a
foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Lender to enforce and realize upon its interest
under the Note, this Agreement, the Mortgage and the other Loan Documents, or
in the Property, the Rents, or any other collateral given to Lender pursuant to
the Loan Documents; provided, however, that, except as specifically provided
herein, any judgment in any such action or proceeding shall be enforceable
against Borrower only to the extent of Borrower’s interest in the Property, in
the Rents and in any other collateral given to Lender, and Lender, by accepting
the Note, this Agreement, the Mortgage and the other Loan Documents, shall not
sue for, seek or demand any deficiency judgment against Borrower in any such
action or proceeding under or by reason of or under or in connection with the
Note, this Agreement, the Mortgage or the other Loan Documents. The provisions
of this Section shall not, however, (a) constitute a waiver, release or
impairment of any obligation evidenced or secured by any of the Loan Documents;
(b) impair the right of Lender to name Borrower as a party defendant in any
action or suit for foreclosure and sale under the Mortgage; (c) affect the validity
or enforceability of any guaranty made in connection with the Loan or any of
the rights and remedies of Lender thereunder; (d) impair the right of Lender to
obtain the appointment of a receiver; (e) impair the enforcement of the
Assignment of Leases; (f) constitute a prohibition against Lender to commence
any appropriate action or proceeding in order to fully realize on any security
given by Borrower in connection with the Loan or to commence any other
appropriate action or proceeding in order for Lender to exercise its remedies
against such security; or (g) constitute a waiver of the right of Lender to
enforce the liability and obligation of Borrower, by money judgment or
otherwise, to the extent of any loss, damage (excluding consequential damages),
cost, expense, liability, claim or other obligation incurred by Lender
(including attorneys’ fees and costs reasonably incurred) arising out of or in
connection with the following: 

 

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

 

(b)           actual
physical waste or damage to the Property resulting from the willful misconduct
of Borrower;

 

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

 

92

 

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

 

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

 

(f)            if
the Property generates sufficient cash flow from operation after payment of
Taxes and Other Charges, failure to pay charges for labor or materials or other
charges that can create Liens on any portion of the Property other than those
being contested in accordance with the terms of this Agreement;

 

(g)           if
the Property generates sufficient cash flow from operation to pay for Taxes and
Other Charges, failure to pay such Taxes and Other Charges (subject to the
Borrower’s right to contest the same in accordance with the terms set forth in
this Agreement);

 

(h)           the
mechanics’ lien filed by Walsh Construction Company of Illinois and the
litigation resulting therefrom;

 

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

 

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

 

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

 

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

 

(m)          Borrower
filing an answer consenting to or otherwise acquiescing in or joining in any
involuntary petition filed against it by any other Person under the Bankruptcy
Code or any other Federal or state bankruptcy or insolvency law, or soliciting,
or causing to be solicited, petitioning creditors for any involuntary petition
against Borrower from any Person;

 

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

 

93

 

(o)           Borrower
making an assignment for the benefit of creditors, or admitting in writing or
in any legal proceeding its insolvency or inability to pay its debts as they
become due;

 

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

 

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

 

Notwithstanding anything to the contrary in this Agreement, the Note or
any of the Loan Documents, Lender shall not be deemed to have waived any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Debt or to require that all collateral shall continue to secure all of the Debt
owing to Lender in accordance with the Loan Documents.

 

Section 11.23       Prior Agreements.  This Agreement and the other Loan
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements among or between such parties, whether oral or written, including,
without limitation, the term sheet dated July 26, 2006 between Beacon Capital
Strategic Partners IV Acquisition, LLC and Lender, are superseded by the
terms of this Agreement and the other Loan Documents.

 

Section 11.24       Servicer.

 

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

 

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

 

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

 

94

 

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

 

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

 

Section 11.27       Assignments and
Participations.

 

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

 

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

 

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

 

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

 

[NO FURTHER TEXT ON THIS PAGE]

 

95

 

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

 

	
  BORROWER:

  
	
   

  
	
  10/120 SOUTH RIVERSIDE FEE LLC,

  
	
  a Delaware limited liability company

  
	
   

  
	
  By:

  	
  BCSP IV Illinois Manager LLC, a Delaware

  	
   

  
	
   

  	
  limited liability company, its manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

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

  
	
   

  	
   

  	
  partnership, its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BCSP REIT IV, Inc., a Maryland corporation,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Nancy J. Broderick

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
  10/120 SOUTH RIVERSIDE PROPERTY LLC,

  
	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
  By:

  	
  BCSP IV Illinois Manager LLC, a Delaware

  	
   

  
	
   

  	
  limited liability company, its manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

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

  
	
   

  	
   

  	
  partnership, its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BCSP REIT IV, Inc., a Maryland corporation,

  	
   

  
	
   

  	
   

  	
   

  	
  its general partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Nancy J. Broderick

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Managing Director

  	
   

  	
   

  
												

 

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH MORTGAGE LENDING, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

SCHEDULE I

 

RENT ROLL

 

 

SCHEDULE II

 

REQUIRED REPAIRS

 

Replace damaged and
displaced granite pavers in certain affected areas (both 10 South Riverside and
120 South Riverside) within ninety (90) days after the date hereof

 

ADA Elevators – provide
audible signals for floor changes & lobby arrival (both 10 South Riverside
and 120 South Riverside) within two (2) years after the date hereof

 

ADA Restrooms – provide ADA
accessibility for bathrooms on all floors (both 10 South Riverside and 120
South Riverside) within one (1) year after the date hereof

 

ADA Site Ramp – provide ADA
ramp at Madison Street steps (10 South Riverside only) within two (2) years
after the date hereof

 

 

SCHEDULE III

 

ORGANIZATIONAL CHART

 

 

SCHEDULE IV

 

	
   

  	
   

  	
   

  
	
   

  	
  (Lender)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  -
  and -

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Tenant)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBORDINATION, NON-DISTURBANCE

  	
   

  
	
   

  	
  AND ATTORNMENT AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Location:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Section:

  	
   

  
	
   

  	
  Block:

  	
   

  
	
   

  	
  Lot:

  	
   

  
	
   

  	
  County:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PREPARED BY AND UPON

  	
   

  
	
   

  	
  RECORDATION RETURN TO:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Messrs. Cadwalader, Wickersham & Taft LLP

  	
   

  
	
   

  	
  One World Financial Center

  	
   

  
	
   

  	
  New York, New York 10281

  	
   

  
	
   

  	
  Attention: Alan Lawrence, Esq.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  File No.:

  	
   

  
	
   

  	
  Title No.:

  	
   

  
					

 

1

 

SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT

 

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

 

RECITALS:

 

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

 

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

 

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

 

AGREEMENT:

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

	
  If to Tenant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Facsimile No.

  	
   

  	
   

  
	
   

  	
   

  
	
  If to Lender:

  	
  [Lender’s Notice]

  
							

 

4

 

	
  With a copy to:

  	
  Cadwalader, Wickersham
  & Taft LLP

  
	
   

  	
  One World Financial Center

  
	
   

  	
  New York, New York 10281

  
	
   

  	
  Attention: Alan Lawrence,
  Esq.

  
	
   

  	
  Facsimile No. (212)
  504-6666

  

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

6

 

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

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  a

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  The undersigned accepts and agrees to

  	
   

  
	
  the provisions of Section 4 hereof:

  	
   

  
	
   

  	
   

  
	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
   

  	
  , a

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
												

 

7

 

ACKNOWLEDGMENTS

 

[INSERT STATE SPECIFIC ACKNOWLEDGMENT]

 

8

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

9

 

SCHEDULE V

 

[RESERVED]

 

 

SCHEDULE VI

 

UNFUNDED TENANT ALLOWANCES

 

	
  Tenant

  	
   

  	
  Leased Premises

  (Sq. Ft.)

  	
   

  	
  Type of

  Expenditure

  	
   

  	
  Unfunded Tenant

  Allowance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE VII

 

PHYSICAL CONDITION REPORT

 

	
  SUBJECT OF REPORT

  	
   

  	
  NAME OF PROVIDER

  	
   

  	
  DATE OF REPORT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10
  South Riverside, Chicago, Illinois

  	
   

  	
  EMG

  	
   

  	
  September 28, 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  120
  South Riverside, Chicago, Illinois

  	
   

  	
  EMG

  	
   

  	
  September 28, 2006Exhibit 10.4

 

One Financial Place

440 South LaSalle Street

Chicago, Illinois 60605

 

 

ONE FINANCIAL PLACE PROPERTY
LLC,

as Borrower

 

to

 

WACHOVIA BANK, NATIONAL
ASSOCIATION,

as Lender

 

MORTGAGE, SECURITY AGREEMENT, 

ASSIGNMENT OF RENTS AND FIXTURE FILING

 

 

Dated:  July 13, 2006

 

PREPARED BY
AND UPON RECORDATION RETURN TO:

 

Proskauer Rose
LLP

1585 Broadway

New York, New
York  10036

 

Attention:  David J. Weinberger, Esq.

 

 

THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT
OF RENTS AND FIXTURE FILING (this “Security Instrument”) is made as of
the 13th day of July, 2006, by ONE FINANCIAL PLACE PROPERTY LLC, a Delaware
limited liability company (“Borrower”), having its chief executive
office c/o Beacon Capital Partners, LLC, One Federal Street, 26th
Floor, Boston, Massachusetts 02110, Attention: General Counsel, to WACHOVIA
BANK, NATIONAL ASSOCIATION, having an address at Wachovia Bank, National
Association, Commercial Real Estate Services, 8739 Research Drive URP 4, NC
1075, Charlotte, North Carolina  28262 (hereinafter referred to as “Lender”).

 

W I T N E S S E T H:

 

WHEREAS, Lender has authorized a loan
(hereinafter referred to as the “Loan”) to Borrower in the maximum
principal sum of ONE HUNDRED EIGHTY-EIGHT MILLION SIX HUNDRED THOUSAND AND
NO/100 DOLLARS ($188,600,000.00) (hereinafter referred to as the “Loan
Amount”), which Loan is evidenced by that certain promissory note, dated
the date hereof given by Borrower, as maker, to Lender, as payee (together with
any supplements, amendments, modifications or extensions thereof, hereinafter
referred to as the “Note”);

 

WHEREAS, in consideration of the Loan,
Borrower has agreed to make payments in amounts sufficient to pay and redeem,
and provide for the payment and redemption of the principal of, premium, if
any, and interest on the Note when due;

 

WHEREAS, Borrower desires by this Security
Instrument to provide for, among other things, the creation of a security
interest in favor of, Lender, as security for Borrower’s obligations to Lender
from time to time pursuant to the Note and the other Loan Documents;

 

WHEREAS, Borrower and Lender intend these
recitals to be a material part of this Security Instrument; and

 

WHEREAS, all things necessary to make this
Security Instrument the valid and legally binding obligation of Borrower in
accordance with its terms, for the uses and purposes herein set forth, have
been done and performed.

 

NOW THEREFORE, to secure the payment of the
principal of, prepayment premium (if any) and interest on the Note and all
other obligations, liabilities or sums due or to become due under this Security
Instrument, the Note or any other Loan Document, including, without limitation,
interest on said obligations, liabilities or sums (said principal, premium,
interest and other sums being hereinafter referred to as the “Debt”),
and the performance of all other covenants, obligations and liabilities of
Borrower pursuant to the Loan Documents, Borrower has executed and delivered
this Security Instrument; and Borrower has irrevocably granted, and by these
presents and by the execution and delivery hereof does hereby irrevocably
grant, bargain, sell, alien, demise, release, convey, assign, transfer, deed,
hypothecate, pledge, set over, warrant, mortgage and confirm to Lender, all
right, title and interest of Borrower in and to all of the following property,
rights, interests and estates:

 

1

 

(a)           the
plot(s), piece(s) or parcel(s) of real property described in Exhibit A attached hereto and made a part
hereof (individually and collectively, hereinafter referred to as the “Premises”);

 

(b)           (i)
all buildings, foundations, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements of every kind
or nature now or hereafter located on the Premises (hereinafter collectively
referred to as the “Improvements”); and (ii) to the extent
permitted by law, the name or names, if any, as may now or hereafter be used
for any of the Improvements, and the goodwill associated therewith;

 

(c)           all
easements, servitudes, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
ditches, ditch rights, reservoirs and reservoir rights, air rights and
development rights, lateral support, drainage, gas, oil and mineral rights,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
belonging, relating or pertaining to the Premises or the Improvements and the
reversion and reversions, remainder and remainders, whether existing or
hereafter acquired, and all land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Premises to the center
line thereof and any and all sidewalks, drives, curbs, passageways, streets,
spaces and alleys adjacent to or used in connection with the Premises and/or
Improvements and all the estates, rights, titles, interests, property,
possession, claim and demand whatsoever, both in law and in equity, of Borrower
of, in and to the Premises and Improvements and every part and parcel thereof,
with the appurtenances thereto;

 

(d)           all
machinery, equipment, systems, fittings, apparatus, appliances, furniture,
furnishings, tools, fixtures, Inventory (as hereinafter defined) and articles
of personal property and accessions thereof and renewals, replacements thereof
and substitutions therefor (including, but not limited to, all plumbing,
lighting and elevator fixtures, office furniture, beds, bureaus, chiffonniers,
chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting,
drapes, draperies, curtains, shades, venetian blinds, wall coverings, screens,
paintings, hangings, pictures, divans, couches, luggage carts, luggage racks,
stools, sofas, chinaware, flatware, linens, pillows, blankets, glassware,
foodcarts, cookware, dry cleaning facilities, dining room wagons, keys or other
entry systems, bars, bar fixtures, liquor and other drink dispensers,
icemakers, radios, television sets, intercom and paging equipment, electric and
electronic equipment, dictating equipment, telephone systems, computerized
accounting systems, engineering equipment, vehicles, medical equipment, potted
plants, heating, lighting and plumbing fixtures, fire prevention and
extinguishing apparatus, theft prevention equipment, cooling and
air-conditioning systems, elevators, escalators, fittings, plants, apparatus,
stoves, ranges, refrigerators, laundry machines, tools, machinery, engines,
dynamos, motors, boilers, incinerators, switchboards, conduits, compressors,
vacuum cleaning systems, floor cleaning, waxing and polishing equipment, call
systems, brackets, signs, bulbs, bells, ash and fuel, conveyors, cabinets,
lockers, shelving, spotlighting equipment, dishwashers, garbage disposals,
washers and dryers), other customary hotel equipment, inventory and other
property of every kind and nature whatsoever owned by Borrower, or

 

2

 

in which Borrower has or shall have an interest, now or hereafter
located upon, or in, or used in connection with the Premises or the
Improvements, or appurtenant thereto, and all building equipment, materials and
supplies of any nature whatsoever owned by Borrower, or in which Borrower has
or shall have an interest, now or hereafter located upon, or in, or used in
connection with the Premises or the Improvements or appurtenant thereto,
(hereinafter, all of the foregoing items described in this paragraph (d) are
collectively called the “Equipment”), all of which, and any replacements,
modifications, alterations and additions thereto, to the extent permitted by
applicable law, shall be deemed to constitute fixtures (the “Fixtures”),
and are part of the real estate and security for the payment of the Debt and
the performance of Borrower’s obligations. To the extent any portion of the
Equipment is not real property or fixtures under applicable law, it shall be
deemed to be personal property, and this Security Instrument shall constitute a
security agreement creating a security interest therein in favor of Lender
under the UCC;

 

(e)           all
awards or payments, including interest thereon, which may hereafter be made
with respect to the Premises, the Improvements, the Fixtures, or the Equipment,
whether from the exercise of the right of eminent domain (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
said right), or for a change of grade, or for any other injury to or decrease
in the value of the Premises, the Improvements or the Equipment or refunds with
respect to the payment of property taxes and assessments, and all other
proceeds of the conversion, voluntary or involuntary, of the Premises,
Improvements, Equipment, Fixtures or any other Property or part thereof into
cash or liquidated claims;

 

(f)            all
leases, tenancies, licenses and other agreements affecting the use, enjoyment
or occupancy of the Premises, the Improvements, the Fixtures, or the Equipment
or any portion thereof now or hereafter entered into, whether before or after
the filing by or against Borrower of any petition for relief under the
Bankruptcy Code, including, without limitation the existing Operating Lease
(hereinafter collectively referred to as the “Leases”), together with
all cash or security deposits, lease termination payments, advance rentals and
payments of similar nature and guarantees or other security held by, or issued
in favor of, Borrower in connection therewith to the extent of Borrower’s right
or interest therein and all remainders, reversions and other rights and estates
appurtenant thereto, and all base, fixed, percentage or additional rents, and
other rents, oil and gas or other mineral royalties, and bonuses, issues,
profits and rebates and refunds or other payments made by any Governmental
Authority from or relating to the Premises, the Improvements, the Fixtures or
the Equipment plus all rents, common area charges and other payments now
existing or hereafter arising, whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under the Bankruptcy
Code (the “Rents”) and all proceeds from the sale or other disposition
of the Leases and the right to receive and apply the Rents to the payment of
the Debt;

 

(g)           all
proceeds of and any unearned premiums on any insurance policies covering the
Premises, the Improvements, the Fixtures, the Rents or the Equipment,
including, without limitation, the right, subject to the terms and provisions
hereof, to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu

 

3

 

thereof, for damage to the Premises, the Improvements, the Fixtures or
the Equipment and all refunds or rebates of Impositions, and interest paid or
payable with respect thereto;

 

(h)           all
deposit accounts, securities accounts, funds or other accounts maintained or
deposited with or for the benefit of Lender, or its assigns, in connection
herewith, including, without limitation, the Escrow Accounts, the Central
Account, the Rent Account, and the Sub-Accounts and all monies and investments
deposited or to be deposited in such accounts;

 

(i)            all
accounts receivable, contract rights, franchises, interests, estate or other
claims, both at law and in equity, now existing or hereafter arising, and
relating to the Premises, the Improvements, the Fixtures or the Equipment, not
included in Rents;

 

(j)            all
now existing or hereafter arising claims against any Person with respect to any
damage to the Premises, the Improvements, the Fixtures or the Equipment, including,
without limitation, damage arising from any defect in or with respect to the
design or construction of the Improvements, the Fixtures or the Equipment and
any damage resulting therefrom;

 

(k)           all
deposits or other security or advance payments, including rental payments now
or hereafter made by or on behalf of Borrower to others, with respect to (i)
insurance policies, (ii) utility services, (iii) cleaning, maintenance, repair
or similar services, (iv) refuse removal or sewer service, (v) parking or similar
services or rights and (vi) rental of Equipment, if any, relating to or
otherwise used in the operation of the Premises, the Improvements, the Fixtures
or the Equipment;

 

(l)            all
intangible property now or hereafter relating to the Premises, the Improvements,
the Fixtures or the Equipment or its operation, including, without limitation,
software, letter of credit rights, trade names, trademarks (including, without
limitation, any licenses of or agreements to license trade names or trademarks
now or hereafter entered into by Borrower), logos, building names and goodwill;

 

(m)          all
now existing or hereafter arising advertising material, guaranties, warranties,
building permits, other permits, licenses, plans and specifications, shop and
working drawings, soil tests, appraisals and other documents, materials and/or
personal property of any kind now or hereafter existing in or relating to the
Premises, the Improvements, the Fixtures, and the Equipment;

 

(n)           all
now existing or hereafter arising drawings, designs, plans and specifications
prepared by architects, engineers, interior designers, landscape designers and
any other consultants or professionals for the design, development,
construction, repair and/or improvement of the Premises, the Improvements, the Fixtures
or the Equipment, as amended from time to time;

 

(o)           the
right, in the name of and on behalf of Borrower, to appear in and defend any
now existing or hereafter arising action or proceeding brought with respect to

 

4

 

the Premises, the Improvements, the Fixtures or the Equipment and to
commence any action or proceeding to protect the interest of Lender in the
Premises, the Improvements, the Fixtures or the Equipment; and

 

(p)           all
proceeds, products, substitutions and accessions (including claims and demands
therefor) of each of the foregoing.

 

All of the foregoing items (a) through (p),
together with all of the right, title and interest of Borrower therein, are
collectively referred to as the “Property”.

 

TO HAVE AND TO HOLD the above granted and
described Property unto Lender, and the successors and assigns of Lender in fee
simple, forever.

 

PROVIDED, ALWAYS, and these presents are upon
this express condition, if Borrower shall well and truly pay and discharge the
Debt and perform and observe the terms, covenants and conditions set forth in
the Loan Documents, then these presents and the estate hereby granted shall
cease and be void.

 

AND Borrower covenants with and warrants to
Lender that:

 

ARTICLE I: 
DEFINITIONS

 

Section 1.01.          Certain
Definitions.

 

For all purposes of this Security Instrument,
except as otherwise expressly provided or unless the context clearly indicates
a contrary intent:

 

(i)            the
capitalized terms defined in this Section have the meanings assigned to them in
this Section, and include the plural as well as the singular;

 

(ii)           all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with GAAP; and

 

(iii)          the
words “herein”, “hereof”, and “hereunder” and other words of similar import
refer to this Security Instrument as a whole and not to any particular Section
or other subdivision.

 

“Adjusted Net Cash Flow” shall mean Pro-Forma Net Operating Income
projected for the twelve (12)-month period subsequent to the date of
calculation less (a) $1,000,000, and (b) extraordinary capital improvements
projected by Lender, in its reasonable discretion, for the subsequent twelve
(12) month period for which sums were not deposited into the Recurring
Replacement Reserve Escrow Account.

 

“Affiliate” of any specified Person
shall mean any other Person directly or indirectly Controlling or Controlled
by, or under direct or indirect common Control with, such specified Person.

 

5

 

“Annual Budget” shall mean an annual
budget submitted by Borrower to Lender in accordance with the terms of Section
2.09 hereof.

 

“Appraisal” shall mean the appraisal
of the Property and all supplemental reports or updates thereto previously delivered
to Lender in connection with the Loan.

 

“Appraiser” shall mean the Person who
prepared the Appraisal.

 

“Approved Manager Standard” shall mean
the standard of business operations, practices and procedures customarily
employed by experienced property managers or owners for properties similar in
size and type to the Property, acting in a commercially reasonable manner.

 

“Architect” shall have the meaning set
forth in Section 3.04(b)(i) hereof.

 

“Assignment” shall mean the Assignment
of Leases and Rents and Security Deposits of even date herewith relating to the
Property given by Borrower to Lender, as the same may be modified, amended or
supplemented from time to time.

 

“Bank” shall mean the bank, trust
company, savings and loan association or savings bank designated by Lender, in
its sole and absolute discretion, in which the Central Account shall be
located.

 

“Bankruptcy Code” shall mean 11 U.S.C.
§101 et seq., as amended from time to time.

 

“Basic Carrying Costs” shall mean the
sum of the following costs associated with the Property: (a) Real Estate Taxes
and (b) insurance premiums.

 

“Basic Carrying Costs Escrow Account”
shall mean the Escrow Account maintained pursuant to Section 5.06 hereof.

 

“Basic Carrying Costs Monthly Installment”
shall mean Lender’s good faith estimate of one-twelfth (1/12th) of the annual
amount for Basic Carrying Costs. “Basic Carrying Costs Monthly Installment”
shall also include, if required by Lender, a sum of money which, together with
such monthly installments, will be sufficient to make the payment of each such
Basic Carrying Cost at least thirty (30) days prior to the date initially due.
Should such Basic Carrying Costs not be ascertainable at the time any monthly
deposit is required to be made, the Basic Carrying Costs Monthly Installment
shall be determined by Lender in its reasonable discretion on the basis of the
aggregate Basic Carrying Costs for the prior Fiscal Year or month or the prior
payment period for such cost. As soon as the Basic Carrying Costs are fixed for
the then current Fiscal Year, month or period, the next ensuing Basic Carrying
Costs Monthly Installment shall be adjusted to reflect any deficiency or
surplus in prior monthly payments. If at any time during the term of the Loan
Lender determines that there will be insufficient funds in the Basic Carrying
Costs Escrow Account to make payments when they become due and payable, Lender
shall have the right to adjust the Basic Carrying Costs Monthly Installment
such that there will be sufficient funds to make such payments. Notwithstanding
the foregoing, provided that (a) no Event of Default exists and (b) Borrower
delivers proof reasonably satisfactory to Lender that 100% of the annual
insurance premiums has been paid for the subsequent year not less than five (5)
days prior

 

6

 

to the
expiration date of each insurance policy required hereunder and that all Real
Estate Taxes have been paid not less than five (5) days prior to the date due
and payable, the Basic Carrying Costs Monthly Installment shall be $0.

 

“Basic Carrying Costs Sub-Account”
shall mean the Sub-Account of the Central Account established pursuant to
Section 5.02 into which the Basic Carrying Costs Monthly Installments shall be
deposited.

 

“Borrower” shall mean Borrower named
herein and any successor to the obligations of Borrower.

 

“Borrower Account” shall mean an
Eligible Account maintained in the name of Borrower.

 

“Business Day” shall mean any day
other than (a) a Saturday or Sunday, or (b) a day on which banking and savings
and loan institutions in the State of New York or the State of North Carolina
are authorized or obligated by law or executive order to be closed, or at any
time during which the Loan is an asset of a Securitization, the cities, states
and/or commonwealths used in the comparable definition of “Business Day” in the
Securitization documents.

 

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

 

“Central Account” shall mean an
Eligible Account, maintained at the Bank, in the name of Lender or its
successors or assigns (as secured party) as may be designated by Lender.

 

“Closing Date” shall mean the date of
the Note.

 

“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.

 

“Condemnation Proceeds” shall mean all
of the proceeds in respect of any Taking or purchase in lieu thereof.

 

“Contractual Obligation” shall mean,
as to any Person, any provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a party or by
which it or any of the property owned by it is bound.

 

“Control” means, when used with
respect to any specific Person, the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person whether through ownership of voting securities, beneficial interests, by
contract or otherwise. The definition is to be construed to apply equally to
variations of the word “Control” including “Controlled,” “Controlling” or “Controlled
by.”

 

“Debt” shall have the meaning set
forth in the Recitals hereto.

 

7

 

“Debt Service” shall mean the amount
of interest and/or principal payments due and payable in accordance with the
Note during an applicable period.

 

“Debt Service Coverage” shall mean the
quotient obtained by dividing Adjusted Net Cash Flow by the sum of the (a)
aggregate regularly scheduled payments of interest and principal due for such
specified period under the Note (determined as of the date the calculation of
Debt Service Coverage is required or requested hereunder) and (b) aggregate
regularly scheduled payments of interest and principal due for such specified
period pursuant to the terms of subordinate or mezzanine financing, if any,
then affecting or related to the Property, or then proposed, if Debt Service
Coverage is being calculated in connection with a request for consent to any
subordinate or mezzanine financing.

 

“Debt Service Payment Sub-Account”
shall mean the Sub-Account of the Central Account established pursuant to
Section 5.02 hereof into which the Required Debt Service Payment shall be
deposited.

 

“Default” shall mean any Event of
Default or event which would constitute an Event of Default if all requirements
in connection therewith for the giving of notice, the lapse of time, and the
happening of any further condition, event or act, had been satisfied.

 

“Default Rate” shall mean the lesser
of (a) the highest rate allowable at law and (b) five percent (5%) above the
interest rate set forth in the Note.

 

“Default Rate Interest” shall mean, to
the extent the Default Rate becomes applicable, interest in excess of the
interest which would have accrued on (a) the Principal Amount and (b) any
accrued but unpaid interest, if the Default Rate was not applicable.

 

“Designated Lease” shall mean each of
the existing Space Leases set forth on Exhibit
G attached hereto and made a part hereof.

 

“Designated Lease Reserve Escrow Account”
shall mean the Escrow Account maintained pursuant to Section 5.15 hereof.

 

“Development Laws” shall mean all
applicable subdivision, zoning, environmental protection, wetlands protection,
or land use laws or ordinances, and any and all applicable rules and
regulations of any Governmental Authority promulgated thereunder or related
thereto.

 

“Disclosure Document” shall mean a
prospectus, prospectus supplement, private placement memorandum, or similar
offering memorandum or offering circular, in each case in preliminary or final
form, used to offer securities in connection with a Securitization.

 

“Dollar” and the sign “$” shall mean
lawful money of the United States of America.

 

“Eligible Account” shall mean a
segregated account which is either (a) an account or accounts maintained with a
federal or state chartered depository institution or trust company the long
term unsecured debt obligations of which are rated by each of the Rating
Agencies (or, if not rated by Fitch, Inc. (“Fitch”), otherwise acceptable
to Fitch, as confirmed in writing that such

 

8

 

account would
not, in and of itself, result in a downgrade, qualification or withdrawal of
the then current ratings assigned to any certificates issued in connection with
a Securitization) in its highest rating category at all times (or, in the case
of the Basic Carrying Costs Escrow Account, the long term unsecured debt
obligations of which are rated at least “AA” (or its equivalent)) by each of
the Rating Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch,
as confirmed in writing that such account would not, in and of itself, result
in a downgrade, qualification or withdrawal of the then current ratings
assigned to any certificates issued in connection with a Securitization) or, if
the funds in such account are to be held in such account for less than thirty
(30) days, the short term obligations of which are rated by each of the Rating
Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch, as
confirmed in writing that such account would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization) in its highest rating
category at all times or (b) a segregated trust account or accounts maintained
with a federal or state chartered depository institution or trust company
acting in its fiduciary capacity which, in the case of a state chartered
depository institution 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 $100,000,000 and subject to supervision or examination by federal and
state authority, or otherwise acceptable (as evidenced by a written
confirmation from each Rating Agency that such account would not, in and of
itself, cause a downgrade, qualification or withdrawal of the then current
ratings assigned to any certificates issued in connection with a
Securitization) to each Rating Agency, which may be an account maintained by
Lender or its agents. The title of each Eligible Account shall indicate that
the funds held therein are held in trust for the uses and purposes set forth
herein.

 

“Engineer” shall have the meaning set forth
in Section 3.04(b)(i) hereof.

 

“Engineering Escrow Account” shall, if
there is an Initial Engineering Deposit, mean an Escrow Account established and
maintained pursuant to Section 5.12 hereof relating to payments for any
Required Engineering Work.

 

“Environmental Problem” shall mean any
of the following:

 

(a)           the
presence of any Hazardous Material on, in, under, or above all or any portion
of the Property other than heating oil, cleaning fluids, pesticides and other
substances customarily used in the operation of properties that are being used
for the same purposes as the Property is presently being used, provided such
use and/or storage for use is in compliance with the requirements hereof and
the other Loan Documents and does not give rise to liability under applicable
Legal Requirements or Environmental Statutes or be the basis for a lien against
the Property or any part thereof;

 

(b)           the
release of any Hazardous Material from or onto the Property;

 

(c)           the
violation of any Environmental Statute with respect to the Property; or

 

(d)           the
failure to obtain or to abide by the terms or conditions of any permit or
approval required under any Environmental Statute with respect to the Property.

 

9

 

A condition
described above shall be an Environmental Problem regardless of whether or not
any Governmental Authority has taken any action in connection with the
condition and regardless of whether that condition was in existence on or
before the date hereof.

 

“Environmental Report” shall mean that
certain report entitled “Report on ASTM Phase I Environmental Site Assessment,
Drinking Water Sampling, Asbestos Survey, and IAQ Assessment, 440 South LaSalle
Street, Chicago, Illinois” dated May 26, 2006 with respect to the Premises and
prepared by Haley & Aldrich, Inc., the reports attached thereto and/or
referred to therein and any supplements or updates thereto, previously
delivered to Lender in connection with the Loan.

 

“Environmental Statute” shall mean any
federal, state or local statute, ordinance, rule or regulation, any judicial or
administrative order (whether or not on consent) or judgment applicable to
Borrower or the Property, including, without limitation, any judgment or
settlement based on common law theories, and any provisions or condition of any
permit, license or other authorization binding on Borrower, relating to (a) the
protection of the environment, the safety and health of persons (including
employees) or the public welfare from actual or potential exposure (or effects
of exposure) to any actual or potential release, discharge, disposal or
emission (whether past or present) of any Hazardous Materials or (b) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of any Hazardous Materials, including, but not limited
to, the Comprehensive Environmental Response, Compensation and Liability Act of
1980 (“CERCLA”), as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §9601 et  seq., the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C.
§6901 et  seq., the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1977, 33 U.S.C. §1251 et  seq.,
the Toxic Substances Control Act of 1976, 15 U.S.C. §2601 et  seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §1101
et  seq., the Clean Air Act of 1966, as amended, 42 U.S.C. §7401 et
seq., the National Environmental Policy Act of 1975, 42 U.S.C. §4321,
and the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §300(f) et
seq., and all rules, regulations and guidance documents promulgated or
published thereunder.

 

“Equipment” shall have the meaning set
forth in granting clause (d) of this Security Instrument.

 

“ERISA” shall mean the Employee
Retirement Income Security Act of 1974, as amended from time to time, and the
regulations promulgated thereunder. Section references to ERISA are to ERISA,
as in effect at the date of this Security Instrument and, as of the relevant
date, any subsequent provisions of ERISA, amendatory thereof, supplemental
thereto or substituted therefor.

 

“ERISA Affiliate” shall mean any
corporation or trade or business that is a member of any group of organizations
(a) described in Section 414(b) or (c) of the Code of which Borrower or
Guarantor is a member and (b) solely for purposes of potential liability under
Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien
created under Section 302(f)

 

10

 

of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which Borrower or Guarantor is a member.

 

“Escrow Account” shall mean each of
the Engineering Escrow Account, Basic Carrying Costs Escrow Account, the
Recurring Replacement Reserve Escrow Account, the Reletting Reserve Escrow
Account, the Designated Lease Reserve Escrow Account and the Underwritten Rent
Escrow Account, each of which shall be an Eligible Account or book entry
sub-account of an Eligible Account.

 

“Event of Default” shall have the
meaning set forth in Section 13.01 hereof.

 

“First Payment Date” shall mean, if
the Closing Date is prior to the Payment Date of the month in which the Closing
Date occurs, the Payment Date in the month in which the Closing Date occurs,
or, if the Closing Date is on or subsequent to the Payment Date in the month in
which the Closing Date occurs, the Payment Date in the month following the
month in which the Loan is initially funded.

 

“Fiscal Year” shall mean the twelve
(12) month period commencing on January 1 and ending on December 31 during each
year of the term of this Security Instrument, or such other fiscal year of
Borrower as Borrower may select from time to time with the prior written
consent of Lender.

 

“Fixtures” shall have the meaning set
forth in granting clause (d) of this Security Instrument.

 

“Force Majeure” shall mean strikes,
lockouts, labor disputes, acts of God, governmental restrictions, regulations
or controls, enemy or hostile governmental actions, terrorist acts, civil
commotion, insurrection, revolution, sabotage or fire or other casualty or
other events beyond the reasonable control of Borrower and/or its Affiliates,
but Borrower’s and/or its Affiliates’ lack of funds in and of itself shall not
be deemed a cause beyond the control of Borrower and/or its Affiliates.

 

“Franchise Agreement” shall mean any
franchise or license agreement relating to the branding or operation of the
hotel portion of the Premises or any other agreement pursuant to which a
franchise system, reservation system or brand affiliation is made available to
the hotel operator of the Premises, together with all renewals and replacements
thereof. Lender acknowledges that certain management agreements dated July 1,
2004, for the hotel portion of the Premises between Operating Tenant as
successor in interest to One Financial Place, L.P., and Kemper Sports
Management, Inc. are not Franchise Agreements.

 

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

 

“General Partner” shall mean, if
Borrower is a partnership, each general partner of Borrower and, if Borrower is
a limited liability company, each managing member of Borrower and in each case,
if applicable, each general partner or managing member of such general partner

 

11

 

or managing member.
In the event that Borrower or any General Partner is a single member limited
liability company, the term “General Partner” shall include such single member.

 

“Governmental Authority” shall mean,
with respect to any Person, any federal or State government or other political
subdivision thereof and any entity, including any regulatory or administrative
authority or court, exercising executive, legislative, judicial, regulatory or
administrative or quasi-administrative functions of or pertaining to government,
and any arbitration board or tribunal, in each case having jurisdiction over
such applicable Person or such Person’s property and any stock exchange on
which shares of capital stock of such Person are listed or admitted for
trading.

 

“Government Tenants” shall mean
tenants under those certain Space Leases, the obligations of which are backed
by the full faith and credit of the United States of America.

 

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

 

“Hazardous Material” shall mean any
flammable, explosive or radioactive materials, hazardous materials or wastes,
hazardous or toxic substances, pollutants or related materials, asbestos or any
material containing asbestos, which may pose a risk to human health or the
environment or any other substance or material as defined in or regulated by
any Environmental Statutes.

 

“Impositions” shall mean all taxes
(including, without limitation, all real estate, ad valorem, sales (including
those imposed on lease rentals), use, single business, gross receipts, value
added, intangible, transaction, privilege or license or similar taxes),
assessments (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not commenced or completed within the term of this
Security Instrument), ground rents, water, sewer or other rents and charges,
excises, levies, fees (including, without limitation, license, permit,
inspection, authorization and similar fees), and all other governmental
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Property and/or
any Rent (including all interest and penalties thereon), which at any time
prior to, during or in respect of the term hereof may be assessed or imposed on
or in respect of or be a lien upon (a) Borrower (including, without limitation,
all franchise, single business or other taxes imposed on Borrower for the
privilege of doing business in the jurisdiction in which the Property or any
other collateral delivered or pledged to Lender in connection with the Loan is
located) or Lender (other than Lender’s income or franchise taxes or taxes of a
similar nature), (b) the Property or any part thereof or any Rents therefrom or
any estate, right, title or interest therein, or (c) any occupancy, operation,
use or possession of, or sales from, or activity conducted on, or in connection
with the Property, or any part thereof, or the leasing or use of the Property,
or any part thereof, or the acquisition or financing of the acquisition of the
Property, or any part thereof, by Borrower, other than taxes which are solely
the obligation of tenants under Space Leases.

 

12

 

“Improvements” shall have the meaning
set forth in granting clause (b) of this Security Instrument.

 

“Indemnified Parties” shall have the
meaning set forth in Section 12.01 hereof.

 

“Independent” shall mean, when used
with respect to any Person, a Person who (a) is in fact independent, (b) does
not have any direct financial interest or any material indirect financial
interest in Borrower, or in any Affiliate of Borrower or any constituent
partner, shareholder, member or beneficiary of Borrower, (c) is not connected
with Borrower or any Affiliate of Borrower or any constituent partner,
shareholder, member or beneficiary of Borrower as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions and (d) is not a member of the immediate family of a Person defined
in (b) or (c) above.

 

“Initial Engineering Deposit” shall
equal the amount, if any, set forth on Exhibit
B attached hereto and made a part hereof.

 

“Institutional Lender” shall mean any
of the following Persons: (a) any bank, savings and loan association,
savings institution, trust company or national banking association, acting for
its own account or in a fiduciary capacity, (b) any charitable foundation,
(c) any insurance company or pension and/or annuity company, (d) any
fraternal benefit society, (e) any pension, retirement or profit sharing
trust or fund within the meaning of Title I of ERISA or for which any
bank, trust company, national banking association or investment adviser
registered under the Investment Advisers Act of 1940, as amended, is acting as
trustee or agent, (f) any investment company or business development
company, as defined in the Investment Company Act of 1940, as amended, (g) any
small business investment company licensed under the Small Business Investment
Act of 1958, as amended, (h) any broker or dealer registered under the
Securities Exchange Act of 1934, as amended, or any investment adviser
registered under the Investment Adviser Act of 1940, as amended, (i) any
government, any public employees’ pension or retirement system, or any other
government agency supervising the investment of public funds, or (j) any
other entity all of the equity owners of which are Institutional Lenders;
provided that each of said Persons shall have net assets in excess of
$1,000,000,000 and a net worth in excess of $500,000,000, be in the business of
making commercial mortgage loans, secured by properties of like type, size and
value as the Property and have a long term credit rating which is not less than
“BBB-” (or its equivalent) from each Rating Agency.

 

“Insurance Proceeds” shall mean all of
the proceeds received under the insurance policies required to be maintained by
Borrower pursuant to Article III hereof.

 

“Insurance Requirements” shall mean
all terms of any insurance policy required by this Security Instrument, all
requirements of the issuer of any such policy, and all regulations and then
current standards applicable to or affecting the Property or any use or
condition thereof which may, at any time, be required by the Board of Fire
Underwriters, if any, having jurisdiction over the Property, or such other
Person exercising similar functions.

 

13

 

“Interest Accrual Period” shall mean
the period commencing on the Closing Date through and including the tenth
(10th) day of August, 2006 and, thereafter, each one (1) month period, which
shall commence on the eleventh (11th) day of each calendar month and end on and
include the tenth (10th) day of the next occurring calendar month.

 

“Interest Rate” shall have the meaning
set forth in the Note.

 

“Interest Shortfall” shall mean any
shortfall in the amount of interest required to be paid with respect to the
Principal Amount on any Payment Date.

 

“Inventory” shall have the meaning as
such term is defined in the Uniform Commercial Code applicable in the State in
which the Property is located, including, without limitation, provisions in
storerooms, refrigerators, pantries and kitchens, beverages in wine cellars and
bars, other merchandise for sale, fuel, mechanical supplies, stationery and
other expenses, supplies and similar items.

 

“Late Charge” shall have the meaning
set forth in Section 13.09 hereof.

 

“Leases” shall have the meaning set
forth in granting clause (f) of this Security Instrument.

 

“Legal Requirement” shall mean as to
any Person, any law, statute, order, ordinance, judgment, decree, injunction,
treaty, rule or regulation (including, without limitation, Environmental
Statutes, Development Laws and Use Requirements) or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.

 

“Lender” shall mean the Lender named
herein and its successors or assigns.

 

“Lender Exposure” shall mean any one or more of the following:
(a) the Loan is in violation of applicable law, or (b) the Property or any other
collateral for the Loan or any portion thereof is subject to forfeiture or to
being frozen, seized, sequestered or otherwise impaired by a Government
Authority, or (c) the Loan or any payments made or to be made in respect
thereof (including principal and interest) is subject to forfeiture or to being
frozen, seized, sequestered or otherwise impaired by a Governmental Authority,
or (d) Lender may be subject to criminal or civil liability or penalty.

 

“Loan” shall have the meaning set forth in the Recitals hereto.

 

“Loan Amount” shall have the meaning set forth in the Recitals
hereto.

 

“Loan Documents” shall mean this
Security Instrument, the Note, the Assignment, and any and all other
agreements, instruments, certificates or documents executed and delivered by
Borrower or any Affiliate of Borrower in connection with the Loan, together
with any supplements, amendments, modifications or extensions thereof.

 

14

 

“Loan Year” shall mean each 365 day
period (or 366 day period if the month of February in a leap year is included)
commencing on the first day of the month following the Closing Date (provided,
however, that the first Loan Year shall also include the period from the
Closing Date to the end of the month in which the Closing Date occurs).

 

“Loss Proceeds” shall mean,
collectively, all Insurance Proceeds and all Condemnation Proceeds.

 

“Major Space Lease” shall mean (a) any
Operating Lease and (b) any Space Lease of a tenant or Affiliate of such tenant
where such tenant or such Affiliate leases, in the aggregate, 30,000 rentable
square feet or more of the Property.

 

“Management Agreement” shall have the
meaning set forth in Section 7.02 hereof.

 

“Manager” shall mean the Person, other
than Borrower, which manages the Property on behalf of Borrower pursuant to an
agreement with Borrower.

 

“Material Adverse Effect” shall mean
any event or condition that has a material adverse effect on (a) the Property,
(b) the business, prospects, profits, management, operations or condition
(financial or otherwise) of Borrower, (c) the enforceability, validity,
perfection or priority of the lien of any Loan Document or (d) the ability of
Borrower to perform any obligations under any Loan Document.

 

“Maturity”, when used with respect to
the Note, shall mean the Maturity Date set forth in the Note or such other date
pursuant to the Note on which the final payment of principal, and premium, if
any, on the Note becomes due and payable as therein or herein provided, whether
at Stated Maturity or by declaration of acceleration, or otherwise.

 

“Maturity Date” shall mean the
Maturity Date set forth in the Note.

 

“Merrill Tenant” shall mean the tenant
(and its successors and assigns) under the first Space Lease described on Exhibit G attached hereto.

 

“Mez Loan” shall mean one or more
certain mezzanine loan(s) in a maximum aggregate principal amount which would,
together with the Loan, provide an aggregate Debt Service Coverage of 1.20:1.0
or greater and a ratio of the unpaid principal amount of the Debt plus the
proposed principal balance of the proposed mezzanine loan(s) to the value of
the Property, as determined by Lender in its reasonable discretion utilizing
its then current underwriting standards of 80% or lower, which is evidenced or
to be evidenced by one or more certain promissory note(s), each of which shall
be secured by, among other things, a pledge of the direct or indirect ownership
and/or management interest in Borrower and which matures no earlier than the
Maturity Date. In the event that a Mez Loan does not close as of the Closing
Date, any such loan must be consented to in writing by Lender, which consent
shall not be unreasonably withheld, conditioned or delayed and may be
conditioned upon, among other things, receipt by Lender of an executed
intercreditor agreement, in form and substance reasonably acceptable to Lender
between the holder of the proposed Mez Loan and Lender and, if a Securitization
has occurred, receipt of written confirmation from each Rating Agency that any
rating issued by the

 

15

 

Rating Agency
in connection with a Securitization will not, as a result of the proposed Mez
Loan be downgraded from the then current ratings thereof, qualified or
withdrawn.

 

“Multiemployer Plan” shall mean a
multiemployer plan defined as such in Section 3(37) of ERISA to which
contributions have been, or were required to have been, made by Borrower,
Guarantor or any ERISA Affiliate and which is covered by Title IV of ERISA.

 

“Net Proceeds” shall mean the excess
of (a)(i) the purchase price (at foreclosure or otherwise) actually received by
Lender with respect to the Property as a result of the exercise by Lender of
its rights, powers, privileges and other remedies after the occurrence of an
Event of Default, or (ii) in the event that Lender (or Lender’s nominee) is the
purchaser at foreclosure by credit bid, then the amount of such credit bid, in
either case, over (b) all costs and expenses, including, without limitation,
all reasonable attorneys’ fees and disbursements and any brokerage fees, if
applicable, incurred by Lender in connection with the exercise of such
remedies, including the sale of such Property after a foreclosure against the
Property.

 

“Note” shall have the meaning set
forth in the Recitals hereto.

 

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

 

“Officer’s Certificate” shall mean a
certificate delivered to Lender by Borrower which is signed on behalf of
Borrower by an authorized representative of Borrower which states that the
items set forth in such certificate are true, accurate and complete in all
material respects and which may be to the “actual” or “best” knowledge if
permitted hereunder.

 

“Operating Expenses” shall mean, in
each Fiscal Year or portion thereof during the term hereof, all expenses
directly attributable to the operation, repair and/or maintenance of the
Property including, without limitation, (a) Impositions, (b) insurance
premiums, (c) management fees, whether or not actually paid, equal to the
greater of the actual management fees and three percent (3%) of annual “base”
or “fixed” Rent due under the Leases and (d) costs attributable to the
operation, repair and maintenance of the systems for heating, ventilating and
air conditioning the Improvements. Operating Expenses shall not include
interest, principal and premium, if any, due under the Note or otherwise in
connection with the Debt, income taxes, extraordinary non-recurring costs,
Capital Expenditures, any non-cash charge or expense such as depreciation or
amortization, or any item of expense otherwise includable in Operating Expenses
which is paid directly by any tenant except real estate taxes paid directly to
any taxing authority by any tenant.

 

“Operating Income” shall mean, in each
Fiscal Year or portion thereof during the term hereof, all revenue derived by
Borrower arising from the Property including, without limitation, room
revenues, vending machines revenues, beverage revenues, food revenues, and
packaging revenues, rental revenues (whether denominated as basic rent,
additional rent, escalation payments, electrical payments or otherwise) and
other fees and charges payable pursuant to Leases or otherwise in connection
with the Property, and business interruption, rent or other

 

16

 

similar
insurance proceeds. Operating Income shall not include (a) Insurance
Proceeds (other than proceeds of rent, business interruption or other similar
insurance allocable to the applicable period) and Condemnation Proceeds (other
than Condemnation Proceeds arising from a temporary taking or the use and
occupancy of all or part of the Property allocable to the applicable period),
or interest accrued on such Condemnation Proceeds, (b) proceeds of any
financing, (c) proceeds of any sale, exchange or transfer of the Property or
any part thereof or interest therein, (d) capital contributions or loans to
Borrower or an Affiliate of Borrower, (e) any item of income otherwise
includable in Operating Income but paid directly by any tenant to a Person
other than Borrower except for real estate taxes paid directly to any taxing
authority by any tenant, (f) any other extraordinary, non-recurring revenues,
(g) Rent paid by or on behalf of any lessee under an Operating Lease or Space
Lease which is the subject of any proceeding or action relating to its
bankruptcy, reorganization or other arrangement pursuant to the Bankruptcy Code
or any similar federal or state law or which has been adjudicated a bankrupt or
insolvent unless such Operating Lease or Space Lease, as applicable, has been
affirmed by the trustee in such proceeding or action, (h) Rent paid by or on
behalf of any lessee under a Lease in whole or partial consideration for the
termination of any Space Lease, or (i) sales tax rebates from any Governmental
Authority.

 

“Operating Lease” shall mean any Lease
of the Property to Operating Tenant, as the same may be amended from time to
time.

 

“Operating Tenant” shall mean any
Affiliate of Borrower.

 

“Payment Date” shall mean, with
respect to each month, the eleventh (11th) calendar day in such month, or if
such day is not a Business Day, the next following Business Day.

 

“PBGC” shall mean the Pension Benefit
Guaranty Corporation established under ERISA, or any successor thereto.

 

“Permitted Encumbrances” shall have
the meaning set forth in Section 2.05(a) hereof.

 

“Permitted Investments” shall mean any
one or more of the following obligations or securities acquired at a purchase
price of not greater than par, including, without limitation, those issued by
Lender, the trustee or servicer under any Securitization or any of their
respective Affiliates, payable on demand or having a scheduled maturity on or
before the Business Day preceding the date upon which funds are required to be
drawn, and having at all times the required ratings, if any, provided for in
this definition:

 

(a)           obligations
of, or obligations fully guaranteed as to payment of principal and interest by,
the United States of America or any agency or instrumentality thereof provided
such obligations are backed by the full faith and credit of the United States
of America including, without limitation, obligations of: the U.S. Treasury
(all direct or fully guaranteed obligations), the General Services
Administration (participation certificates) and the Small Business
Administration (guaranteed participation certificates and guaranteed pool
certificates); provided, however, that the investments described
in this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by Standard & Poor’s,

 

17

 

must not have
an “r” highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

 

(b)           Federal
Housing Administration debentures;

 

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

 

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

 

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

 

18

 

spread (if
any) and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity;

 

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

 

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

 

(h)           units
of taxable money market funds, which funds are regulated investment companies,
seek to maintain a constant net asset value per share and invest solely in
obligations backed by the full faith and credit of the United States, which
funds have the highest rating available from each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to any certificates issued in
connection with a Securitization) for money market funds;

 

(i)            money
market funds so long as the money market funds are rated “AAA” (or its
equivalent) by each Rating Agency (or, if not rated by all of the Rating
Agencies, rated by at least one Rating Agency in one of the foregoing rating
categories and otherwise acceptable to each other Rating Agency, as confirmed
in writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization); and

 

19

 

(j)            any other security, obligation or
investment which has been approved as a Permitted Investment in writing by (a)
Lender prior to Securitization and (b) after Securitization, each Rating
Agency, as evidenced by a written confirmation that the designation of such
security, obligation or investment as a Permitted Investment will not, in and
of itself, result in a downgrade, qualification or withdrawal of the then
current ratings assigned to any certificates issued in connection with a
Securitization by such Rating Agency, provided, further, that Borrower has
determined in writing that such security obligation or investment qualifies as
a good so-called seventy-five percent (75%) asset as described in Code Section
856(c)(4)(A);

 

provided,
however, that, in the reasonable judgment of Lender, such instrument
continues to qualify as a “cash flow investment” pursuant to Section 860G(a)(6)
of the Code earning a passive return in the nature of interest and that no
obligation or security shall be a Permitted Investment if (i) such
obligation or security evidences a right to receive only interest payments, or
(ii) the right to receive principal and interest payments on such obligation or
security are derived from an underlying investment that provides a yield to
maturity in excess of 120% of the yield to maturity at par of such underlying
investment.

 

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

 

“Plan” shall mean an employee benefit
or other plan established or maintained by Borrower, Guarantor or any ERISA
Affiliate during the five-year period ended prior to the date of this Security
Instrument or to which Borrower, Guarantor or any ERISA Affiliate makes, is
obligated to make or has, within the five year period ended prior to the date
of this Security Instrument, been required to make contributions (whether or
not covered by Title IV of ERISA or Section 302 of ERISA or Section 401(a) or
412 of the Code), other than a Multiemployer Plan.

 

“Premises” shall have the meaning set
forth in granting clause (a) of this Security Instrument.

 

“Principal Amount” shall mean the Loan
Amount as such amount may be reduced from time to time pursuant to the terms of
this Security Instrument, the Note or the other Loan Documents.

 

“Principal Payments” shall mean all payments
of principal made pursuant to the terms of the Note.

 

“Pro-Forma Net Operating Income” shall
mean Pro-Forma Operating Income less Pro-Forma Operating Expenses.

 

“Pro-Forma Operating Expenses” shall
mean projected annualized Operating
Expenses based on a trailing twelve (12)-month period as reasonably
adjusted by Lender to take into account, among other things, reasonably
anticipated increases or decreases in Operating Expenses.

 

20

 

“Pro-Forma Operating Income” shall mean projected annualized
Operating Income (which for the purposes hereof shall include Rent due under
Space Leases having a term of five (5) years or greater with respect to which
the rent commencement date will occur within six (6) months of the date as of
which the calculation of Pro Forma Operating Income is made) based on the most
recent rent roll and such other information as is required to be delivered by
Borrower pursuant to Section 2.09 hereof, as reasonably adjusted by Lender to
take into account a vacancy factor equal to the greater of (a) anticipated
vacancies over the course of the subsequent twelve (12) month period for which
such calculation is made or (b) five percent (5%), and excluding rental income
of tenants under Space Leases (other than Government Tenants which are not
contesting “base” or “fixed” rent and which have not sent any notice of default
or notice regarding termination of such Space Lease to Borrower) whose base
rent is more than ninety (90) days overdue.

 

“Prohibited Person” shall mean any
Person identified on the OFAC List or any other Person or foreign country or
agency thereof with whom a U.S. Person may not conduct business or transactions
by prohibition of Federal law or Executive Order of the President of the United
States of America.

 

“Property” shall have the meaning set
forth in the granting clauses of this Security Instrument.

 

“Property Agreements” shall mean all
grants of easements and/or rights-of-way, reciprocal easement agreements,
permits, declarations of covenants, conditions and restrictions, disposition
and development agreements, planned unit development agreements, parking
agreements, party wall agreements or other material instruments affecting the
Property, but not including any brokerage agreements, management agreements,
service contracts, Space Leases or the Loan Documents.

 

“Rating Agency” shall mean each of
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Company,
Inc. (“Standard & Poor’s”), Fitch and Moody’s Investors Service,
Inc. (“Moody’s”), and any successor to any of them; provided, however,
that at any time after a Securitization, “Rating Agency” shall mean those of
the foregoing rating agencies that from time to time rate the securities issued
in connection with such Securitization.

 

“Real Estate Taxes” shall mean all
real estate taxes and assessments (including, without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Security Instrument), in each case whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Property (including all interest and penalties thereon),
which at any time prior to, during or in respect of the term hereof may be
assessed or imposed on or in respect of or be a lien upon the Property or any
part thereof or any estate, right, title or interest therein.

 

“Realty” shall have the meaning set
forth in Section 2.05(b) hereof.

 

21

 

“Recurring Replacement Expenditures”
shall mean expenditures related to capital repairs, replacements and
improvements performed at the Property from time to time.

 

“Recurring Replacement Reserve Monthly
Installment” shall mean the amount per month set forth on Exhibit B attached hereto and made a part
hereof; provided, however, so long as no Event of Default has occurred and is
continuing, the Recurring Replacement Reserve Monthly Installment shall be $0.

 

“Recurring Replacement Reserve Escrow
Account” shall mean the Escrow Account maintained pursuant to Section 5.08
hereof relating to the payment of Recurring Replacement Expenditures.

 

“Recurring Replacement Reserve Sub-Account”
shall mean the Sub-Account of the Central Account established pursuant to
Section 5.02 hereof into which the Recurring Replacement Reserve Monthly
Installment shall be deposited.

 

“Regulation AB” shall mean Regulation
AB under the Securities Act and the Securities Exchange Act of 1934 (as
amended).

 

“Reletting Expenditures” shall mean
the actual out-of-pocket expenditures payable by Borrower to tenants or other
bona-fide third parties relating to the reletting of space at the Property
(including, without limitation, Special Reletting Expenditures).

 

“Reletting Reserve Escrow Account”
shall mean the Escrow Account maintained pursuant to Section 5.07 hereof
relating to the payment of Reletting Expenditures.

 

“Rent Account” shall mean one or more
Eligible Accounts maintained at a bank reasonably acceptable to Lender in the
name of Lender or its successors or assigns (as secured party) as may be
designated by Lender, and Borrower.

 

“Rents” shall have the meaning set
forth in granting clause (f) of this Security Instrument.

 

“Rent Roll” shall have the meaning set
forth in Section 2.05(o) hereof.

 

“Required Debt Service Coverage” shall
mean a Debt Service Coverage of not less than the lesser of (a) 1.2:1.0 and (b)
the Debt Service Coverage immediately prior to the casualty or Taking, as
applicable.

 

“Required Debt Service Payment” shall
mean, as of any Payment Date, the amount of interest and principal then due and
payable pursuant to the Note, together with any other sums due thereunder,
including, without limitation, any prepayments required to be made or for which
notice has been given under this Security Instrument, Default Rate Interest and
premium, if any, paid in accordance therewith.

 

“Required Engineering Work” shall mean
the immediate engineering and/or environmental remediation work set forth on Exhibit D attached hereto and made a part
hereof.

 

22

 

“Retention Amount” shall have the
meaning set forth in Section 3.04(b)(vii) hereof.

 

“Securities Act” shall mean the
Securities Act of 1933, as the same shall be amended from time to time.

 

“Securitization” shall mean a public
or private offering of securities by Lender or any of its Affiliates or their
respective successors and assigns which are collateralized, in whole or in
part, by this Security Instrument.

 

“Security Instrument” shall mean this
Security Instrument as originally executed or as it may hereafter from time to
time be supplemented, amended, modified or extended by one or more indentures
supplemental hereto.

 

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

 

“Single Purpose Entity” shall mean a
corporation, partnership, joint venture, limited liability company, trust or
unincorporated association, which is formed or organized solely for the purpose
of holding, directly, an ownership interest in the Property or, with respect to
General Partner, holding an ownership interest in and managing a Person which
holds an ownership interest in the Property, does not engage in any business
unrelated to, with respect to Borrower, the Property and, with respect to
General Partner, its interest in Borrower, does not have any assets other than
those related to, with respect to Borrower, its interest in the Property and, with
respect to General Partner, its interest in Borrower, or any indebtedness other
than as permitted by this Security Instrument or the other Loan Documents, has
its own separate books and records and has its own accounts, in each case which
are separate and apart from the books and records and accounts of any other
Person, holds itself out as being a Person separate and apart from any other
Person and which otherwise satisfies the criteria of the Rating Agency, as in
effect on the Closing Date, for a special-purpose bankruptcy-remote entity.

 

“Solvent” shall mean, as to any
Person, that (a) the sum of the assets of such Person, at a fair valuation,
exceeds its liabilities, including contingent liabilities, (b) such Person has
sufficient capital with which to conduct its business as presently conducted
and as proposed to be conducted and (c) such Person has not incurred debts, and
does not intend to incur debts, beyond its ability to pay such debts as they
mature. For purposes of this definition, “debt” means any liability on a
claim, and “claim” means (a) a right to payment, whether or not such
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, or (b) a right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured. With respect to any such contingent
liabilities, such liabilities shall be computed in accordance with GAAP at the
amount which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.

 

23

 

“Space Leases” shall mean any Lease
(including, without limitation, any Major Space Lease) or any other agreement
providing for the use and occupancy of a portion of the Property, as the same
may be amended, renewed or supplemented.

 

“Special Reletting Expenditures” shall
mean allowances provided by Borrower to tenants or other bona-fide third
parties in connection with the reletting of space at the Property that,
pursuant to the terms of a particular new Space Lease or amendment, renewal or
extension of an existing Space Lease entered into in accordance herewith, are
applied by the tenant under such new Space Lease or amendment, extension or
renewal as a rent credit. Any Special Reletting Expenditures shall be deemed
incurred on a monthly basis as the credit is actually applied by the applicable
tenant to Rent due under the related Space Lease or amendment, extension or
renewal thereof; provided, however, that in each case, the rent allowance under
such new Space Lease is comparable to then existing local market rates.

 

“State” shall mean any of the states
which are members of the United States of America.

 

“Stated Maturity”, when used with
respect to the Note or any installment of interest and/or principal payment
thereunder, shall mean the date specified in the Note as the fixed date on
which a payment of all or any portion of principal and/or interest is due and
payable.

 

“Sub-Accounts” shall have the meaning
set forth in Section 5.02 hereof.

 

“Substantial Casualty” shall have the
meaning set forth in Section 3.04 hereof.

 

“Taking” shall mean a condemnation or
taking pursuant to the lawful exercise of the power of eminent domain.

 

“Transfer” shall mean the conveyance,
assignment, sale, mortgaging, encumbrance, pledging, hypothecation, granting of
a security interest in, granting of options with respect to, or other
disposition of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) all or any portion of any legal or beneficial interest (a) in all or
any portion of the Property; (b) if Borrower or, if Borrower is a partnership,
any General Partner, is a corporation, in the stock of Borrower or any General
Partner; (c) in Borrower (or any trust of which Borrower is a trustee); or (d)
if Borrower is a limited or general partnership, joint venture, limited
liability company, trust, nominee trust, tenancy in common or other
unincorporated form of business association or form of ownership interest, in
any Person having a legal or beneficial ownership in Borrower, excluding any
legal or beneficial interest in any constituent limited partner, if Borrower is
a limited partnership, or in any non-managing member, if Borrower is a limited
liability company, unless such interest would, or together with all other
direct or indirect interests in Borrower which were previously transferred,
aggregate 49% or more of the partnership or membership, as applicable, interest
in Borrower or would result in any Person who, as of the Closing Date, did not
own, directly or indirectly, 49% or more of the partnership or membership, as
applicable, interest in Borrower, owning, directly or indirectly, 49% or more
of the partnership or membership, as applicable, interest in Borrower and
excluding any legal or beneficial interest in any General Partner unless such
interest would, or together with all other direct or indirect interest in the
General Partner

 

24

 

which were
previously transferred, aggregate 49% or more of the partnership or membership,
as applicable, interest in the General Partner (or result in a change in
control of the management of the General Partner from the individuals
exercising such control immediately prior to the conveyance or other
disposition of such legal or beneficial interest) and shall also include,
without limitation to the foregoing, the following:  an installment sales agreement wherein
Borrower agrees to sell the Property or any part thereof or any interest
therein for a price to be paid in installments; an agreement by Borrower
leasing all or substantially all of the Property to one or more Persons
pursuant to a single or related transactions for other than actual use or
occupancy, or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s right, title and interest in and to any Leases
or any Rent; any instrument subjecting the Property to a condominium regime or
transferring ownership to a cooperative corporation; and the dissolution or
termination of Borrower or the merger or consolidation of Borrower with any
other Person. Notwithstanding the foregoing or anything to the contrary
contained elsewhere herein or in any other Loan Document, “Transfer” shall not
include any sale, transfer, conveyance or assignment of any direct or indirect
legal or beneficial ownership interest in Borrower or any non-member manager of
Borrower (including, without limitation, creation of direct or indirect owners
of Borrower or any non-member manager of Borrower), or any mortgaging,
encumbrance, pledging, hypothecation or granting of a security interest in any
indirect ownership interest in Borrower or any non-member manager of Borrower
(but not of Beacon Capital Strategic Partners IV, L.P.), provided, in each case, that Beacon
Capital Strategic Partners IV, L.P. continues to own directly or indirectly not
less than thirty-five percent (35%) of the ownership interests in and directly
or indirectly Control Borrower, and provided that, in the event that any Person
(a “Principal Transferee”) who does not, as of the Closing Date, own or
Control, directly or indirectly, 49% or more of the stock, partnership interest
or membership interest, as applicable, in Borrower acquires, directly or
indirectly, 49% or more of the stock, partnership interest or membership
interest, as applicable, in Borrower as a result of such transfer, conveyance,
assignment, sale, mortgaging, encumbrance, pledging, hypothecation or granting
of a security interest, Lender shall be furnished an opinion, in form and
substance and from counsel reasonably satisfactory to Lender, substantially
similar to the Insolvency Opinion which discusses the substantive
non-consolidation of Borrower with the Principal Transferee in the event of a
bankruptcy, insolvency or similar proceeding relating to the Principal
Transferee.

 

“Treasury Constant Maturity Yield Index”
shall mean the average yield for “This Week” as reported by the Federal Reserve
Board in Federal Reserve Statistical Release H.15 (519).

 

“UCC” shall mean the Uniform
Commercial Code as in effect on the date hereof in the State in which the
Realty is located; provided, however, that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-perfection or
priority of the security interest in any item or portion of the collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State in which the Realty is located (“Other UCC State”), “UCC”
means the Uniform Commercial Code as in effect in such Other UCC State for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection or priority.

 

“Underwritten Rent Escrow Account”
shall mean an Escrow Account maintained pursuant to Section 5.14 hereof.

 

25

 

“Unscheduled Payments” shall mean (a)
all Loss Proceeds that Borrower has elected or is required to apply to the
repayment of the Debt pursuant to this Security Instrument, the Note or any
other Loan Documents, (b) any funds representing a voluntary or involuntary
principal prepayment and (c) any Net Proceeds.

 

“Use Requirements” shall mean any and
all building codes, permits, certificates of occupancy or compliance, laws,
regulations, or ordinances (including, without limitation, health, pollution,
fire protection, medical and day-care facilities, waste product and sewage
disposal regulations), restrictions of record, easements, reciprocal easements,
declarations or other agreements of record affecting the use of the Property or
any part thereof.

 

“Welfare Plan” shall mean an employee
welfare benefit plan as defined in Section 3(1) of ERISA established or
maintained by Borrower, Guarantor or any ERISA Affiliate or that covers any
current or former employee of Borrower, Guarantor or any ERISA Affiliate.

 

“Work” shall have the meaning set
forth in Section 3.04(a)(i) hereof.

 

“Yield Maintenance Premium” shall mean
a premium equal to the greater of (a) one percent (1%) of the principal amount
of the Note being prepaid and (b) the product of (i) a fraction, the numerator
of which is the positive excess, if any, of (A) the present value of all future
payments of principal and interest on the Note, including the principal amount
due at Maturity, to be made on the Note as of the prepayment date in question
and through and including the Payment Date that is six (6) months prior to the
Maturity Date, discounted at an interest rate per annum equal to the sum of (x)
the Treasury Constant Maturity Yield Index published during the second full
week preceding the date on which such premium is payable for instruments having
a maturity coterminous with the remaining term of the Note and (y) twenty-five
(25) basis points, over (B) the principal amount of the Note immediately before
such prepayment, and the denominator of which is the principal amount of the
Note immediately prior to the prepayment, and (ii) the principal amount being
prepaid; provided, however, that if there is no Treasury Constant Maturity
Yield Index for instruments having a maturity coterminous with the remaining
term of the Note, then the index referred to in (A) above shall be equal to the
weighted average yield to maturity of the Treasury Constant Maturity Yield
Indices with maturities next longer and shorter than such remaining average
life to maturity, calculated by interpolating the yields of the relevant
Treasury Constant Maturity Yield Indices (rounded, if necessary, to the nearest
1/100 of 1%).

 

ARTICLE II:  REPRESENTATIONS,
WARRANTIES 

AND COVENANTS OF BORROWER

 

Section 2.01. Payment of Debt. Borrower
will pay the Debt at the time and in the manner provided in the Note and the
other Loan Documents, all in lawful money of the United States of America in
immediately available funds.

 

Section 2.02. Representations, Warranties
and Covenants of Borrower. Borrower represents and warrants to and
covenants with Lender:

 

26

 

(a)           Organization and Authority. Borrower
(i) is a limited liability company, general partnership, limited partnership or
corporation, as the case may be, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation, (ii) has all
requisite power and authority and all necessary licenses and permits to own and
operate the Property and to carry on its business as now conducted and as
presently proposed to be conducted and (iii) is duly qualified, authorized to
do business and in good standing in the jurisdiction where the Property is
located and in each other jurisdiction where the conduct of its business or the
nature of its activities makes such qualification necessary. If Borrower is a
limited liability company, limited partnership or general partnership, each
general partner or managing member, as applicable, of Borrower which is a
corporation is duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation.

 

(b)           Power. Borrower and, if applicable,
each General Partner has full power and authority to execute, deliver and
perform, as applicable, the Loan Documents to which it is a party, to make the
borrowings thereunder, to execute and deliver the Note and to grant to Lender a
first, prior, perfected and continuing lien on and security interest in the
Property, subject only to the Permitted Encumbrances.

 

(c)           Authorization of Borrowing. The
execution, delivery and performance of the Loan Documents to which Borrower is
a party, the making of the borrowings thereunder, the execution and delivery of
the Note, the grant of the liens on the Property pursuant to the Loan Documents
to which Borrower is a party and the consummation of the Loan are within the
powers of Borrower and have been duly authorized by Borrower and, if
applicable, each General Partner by all requisite action (and Borrower hereby
represents that no approval or action of any member, limited partner or
shareholder, as applicable, of Borrower not already obtained is required to
authorize any of the Loan Documents to which Borrower is a party) and will
constitute the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with their terms, except as enforcement may be
stayed or limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity
(whether considered in proceedings at law or in equity) and will not (i)
violate any provision of its partnership agreement or partnership certificate
or certificate of incorporation or by-laws, or operating agreement, certificate
of formation or articles of organization, as applicable, or, to its knowledge,
any law, judgment, order, rule or regulation of any court, arbitration panel or
other Governmental Authority, domestic or foreign, or other Person affecting or
binding upon Borrower or the Property, or (ii) violate any provision of any
indenture, agreement, mortgage, deed of trust, contract or other instrument to
which Borrower or, if applicable, any General Partner is a party or by which
any of their respective property, assets or revenues are bound, or be in
conflict with, or result in an acceleration of any obligation or a breach of or
constitute (with notice or lapse of time or both) a default or require any
payment or prepayment under, any such indenture, agreement, mortgage, deed of
trust, contract or other instrument, or (iii) result in the creation or
imposition of any lien, except those in favor of Lender as provided in the Loan
Documents to which it is a party.

 

(d)           Consent. Neither Borrower nor, if
applicable, any General Partner, is required to obtain any consent, approval or
authorization from, or to file any declaration or statement with, any
Governmental Authority or other agency in connection with or as a condition

 

27

 

to the execution, delivery or performance of
this Security Instrument, the Note or the other Loan Documents which has not
been so obtained or filed.

 

(e)           Interest Rate. The rate of interest
paid under the Note and the method and manner of the calculation thereof do not
violate any usury or other law or applicable Legal Requirement.

 

(f)            Other Agreements. Borrower is not a
party to nor is otherwise bound by any agreements or instruments the terms and
provisions of which, individually or in the aggregate, are reasonably likely to
have a Material Adverse Effect. Neither Borrower nor, if applicable, any
General Partner, is in violation of its organizational documents or other
restriction or any agreement or instrument by which it is bound, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
Governmental Authority, or any Legal Requirement, in each case, applicable to Borrower
or the Property, except for such violations that would not, individually or in
the aggregate, have a Material Adverse Effect.

 

(g)           Maintenance of Existence. (i)  Borrower and, if applicable, each General
Partner at all times since their formation have been duly formed and existing
and shall preserve and keep in full force and effect their existence as a
Single Purpose Entity.

 

(ii)           Borrower and, if applicable, each General
Partner, at all times since their organization have complied, and will continue
to comply, with the provisions of its certificate and agreement of partnership
or certificate of incorporation and by-laws or articles of organization,
certificate of formation and operating agreement, as applicable, and the laws
of its jurisdiction of organization relating to partnerships, corporations or
limited liability companies, as applicable.

 

(iii)          Borrower and, if applicable, each General Partner
have done or caused to be done and will do all things necessary to observe
organizational formalities and preserve their existence and Borrower and, if
applicable, each General Partner will not, without the prior written consent of
Lender, amend, modify or otherwise change the certificate and agreement of
partnership or certificate of incorporation and by-laws or articles of
organization, certificate of formation and operating agreement, as applicable,
or other organizational documents of Borrower and, if applicable, each General
Partner, in any manner that (x) violates the single purpose covenants set forth
in this Section 2.02(g), (y) amends or modifies any provision of such documents
that by its terms cannot be modified at any time when the Loan is outstanding,
or (z) is reasonably likely to have a Material Adverse Effect.

 

(iv)          Borrower and, if applicable, each General
Partner, have at all times accurately maintained, and will continue to
accurately maintain, their respective financial statements, accounting records
and other partnership, company or corporate documents separate from those of
any other Person; provided, however, that Borrower’s or, if applicable, General
Partner’s assets may be included in a consolidated financial statement of its
Affiliates if (x) inclusion in such a consolidated financial statement is
required to comply with the requirements of GAAP, (y) such consolidated
financial statements

 

28

 

contain a footnote to the effect that
Borrower’s assets are owned by Borrower or, if applicable, General Partner’s
assets are owned by General Partner, and (z) its assets and liabilities are
listed on Borrower’s or, if applicable, General Partner’s own balance sheet;
and, except as permitted above, Borrower or, if applicable, General Partner
shall not permit its assets to be listed as assets on the financial statements
of any other Person, provided, however, that such restriction shall not
preclude any Person from listing its ownership interest in Borrower or, if
applicable, General Partner as an asset on its financial statements. Borrower
will file its own tax returns unless Borrower is a disregarded entity for
income tax reporting purposes, in which event the income and deductions of
Borrower will be included on the income tax returns of its first owner that
files income tax returns. Borrower and, if applicable, each General Partner
have not at any time since their formation commingled, and will not commingle,
their respective assets with those of any other Person and will maintain their
assets in such a manner such that it will not be costly or difficult to
segregate, ascertain or identify their individual assets from those of any
other Person. Borrower and, if applicable, each General Partner will not permit
any Affiliate independent access to their bank accounts. Borrower and, if
applicable, each General Partner have at all times since their formation
accurately maintained and utilized, and will continue to accurately maintain
and utilize, their own separate bank accounts, payroll and separate books of
account, stationery, invoices and checks.

 

(v)           Borrower and, if applicable, each General
Partner, have at all times paid, and will continue to pay, their own
liabilities from their own separate assets and shall each allocate and charge
fairly and reasonably any overhead which Borrower and, if applicable, any
General Partner, shares with any other Person, including, without limitation,
for office space and services performed by any employee of another Person.

 

(vi)          Borrower and, if applicable, each General
Partner, have at all times identified themselves, and will continue to identify
themselves, in all dealings with the public, under their own names and as
separate and distinct entities and shall correct any known misunderstanding
regarding their status as separate and distinct entities. Borrower and, if
applicable, each General Partner, have not at any time identified themselves,
and will not identify themselves, as being a division of any other Person.

 

(vii)         Borrower and, if applicable, each General
Partner, have been at all times, and will continue to be, adequately
capitalized in light of the nature of their respective businesses.

 

(viii)        Borrower and, if applicable, each General
Partner, (A) have not owned, do not own and will not own any assets or property
other than, with respect to Borrower, the Property and any incidental personal
property necessary for the ownership, management or operation of the Property
and, with respect to General Partner, if applicable, its interest in Borrower,
(B) have not engaged and will not engage in any business other than the
ownership, management and operation of the Property or, with respect to General
Partner, if applicable, its interest in Borrower, (C) have not incurred and
will not incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any

 

29

 

obligation), other than (X) the Loan and (Y)
unsecured trade and operational debt and equipment leases which (1) is not
evidenced by a note, (2) is incurred in the ordinary course of the operation of
the Property, (3) does not exceed in the aggregate (I) two percent (2%) of the
Loan Amount plus (II) any Reletting Expenditures incurred pursuant to Space
Leases entered into in accordance with the terms of this Security Instrument,
and (4) is, unless being contested in accordance with the terms of this
Security Instrument, paid prior to the earlier to occur of the forty-fifth
(45th) day after the date incurred and the date when due,  (D) have not pledged and will not pledge
their assets for the benefit of any other Person, and (E) have not made and
will not make any loans or advances to any Person (including any Affiliate).

 

(ix)           Neither Borrower nor, if applicable, any General
Partner will change its name or principal place of business without giving Lender
at least thirty (30) days prior written notice thereof.

 

(x)            Neither Borrower nor, if applicable, any General
Partner has, and neither of such Persons will have, any subsidiaries (other
than, with respect to General Partner, Borrower).

 

(xi)           Borrower will preserve and maintain its existence
as a Delaware limited liability company and all material rights, privileges,
tradenames and franchises.

 

(xii)          Neither Borrower, nor, if applicable, any General
Partner, will merge or consolidate with, or liquidate, wind up or dissolve
itself (or suffer any liquidation, winding up or dissolution) or, except as set
forth in Section 9.04 hereof, sell all or substantially all of its respective
assets to any Person. Neither Borrower, nor, if applicable, any General Partner
will acquire any business or assets from, or capital stock or other ownership
interest of, or be a party to any acquisition of, any Person.

 

(xiii)         Borrower and, if applicable, each General
Partner, have not at any time since their formation assumed, guaranteed or held
themselves out to be responsible for, and will not assume, guarantee or hold
themselves out to be responsible for the liabilities or the decisions or
actions respecting the daily business affairs of their partners, shareholders
or members or any predecessor company, corporation or partnership, each as
applicable, any Affiliates, or any other Persons. Borrower and, if applicable,
each General Partner have not at any time since their formation acquired, and
will not acquire, obligations or securities of its partners or shareholders,
members or any predecessor company, corporation or partnership, each as
applicable, or any Affiliates. Borrower and, if applicable, each General
Partner, have not at any time since their formation made, and will not make,
loans to its partners, members or shareholders or any predecessor company,
corporation or partnership, each as applicable, or any Affiliates of any of
such Persons. Borrower and, if applicable, each General Partner, have no known
contingent liabilities nor do they have any material outstanding financial
liabilities under any indenture, mortgage, deed of trust, loan agreement or
other similar agreement or instrument to which such Person is a party or by
which it is otherwise bound other than under the Loan Documents.

 

30

 

(xiv)        Borrower and, if applicable, each General
Partner, have not at any time since their formation entered into and was not a
party to, and, will not enter into or be a party to, any transaction with its
Affiliates, members, partners or shareholders, as applicable, or any Affiliates
thereof except in the ordinary course of business of Borrower on terms which
are no less favorable to Borrower than would be obtained in a comparable arm’s
length transaction with an unrelated third party.

 

(xv)         If Borrower is a limited partnership or a limited
liability company, the General Partner shall be a corporation or limited
liability company whose sole asset is its interest in Borrower and the General
Partner will at all times comply, and will cause Borrower to comply, with each
of the representations, warranties, and covenants contained in this Section
2.02(g) as if such representation, warranty or covenant was made directly by
such General Partner.

 

(xvi)        Borrower shall at all times cause there to be at
least two duly appointed members or managers of Borrower or of the board of
directors or board of managers or other governing board or body, as applicable
(each, an “Independent Director”), of, if Borrower is a corporation,
Borrower, and, if Borrower is a limited partnership or limited liability
company, of the General Partner, reasonably satisfactory to Lender who shall
not have been at the time of such individual’s appointment, and may not be or
have been at any time (A) a shareholder, officer, director, attorney, counsel,
partner, member or employee of Borrower or any of the foregoing Persons or
Affiliates thereof, (B) a customer or creditor of, or supplier or service
provider to, Borrower or any of its shareholders, partners, members or their
Affiliates, (C) a member of the immediate family of any Person referred to in
(A) or (B) above or (D) a Person Controlling, Controlled by or under common
Control with any Person referred to in (A) through (C) above. A natural person
who otherwise satisfies the foregoing definition except for being the
Independent Director of a Single Purpose Entity Affiliated with Borrower or
General Partner shall not be disqualified from serving as an Independent
Director if such individual is at the time of initial appointment, or at any
time while serving as the Independent Director, an Independent Director of a
Single Purpose Entity Affiliated with Borrower or General Partner if such
individual is an independent director provided by a nationally-recognized
company that provides professional independent directors.

 

(xvii)       Borrower and, if applicable, each General
Partner, shall not take any action which, under the terms of its certificate of
incorporation, by-laws or articles of organization, requires the consent of the
Independent Directors of Borrower, or, if applicable, the General Partner,
unless the consent of such Independent Directors is obtained.

 

(xviii)      Borrower and, if applicable, each General Partner
has paid and shall pay the salaries of their own employees and has maintained
and shall maintain a sufficient number of employees in light of their
contemplated business operations.

 

(xix)         Borrower shall, and shall cause its Affiliates
to, conduct its business so that the assumptions made with respect to Borrower
and, if applicable, each General

 

31

 

Partner, in that certain opinion letter
relating to substantive non-consolidation dated the date hereof (the “Insolvency
Opinion”) delivered in connection with the Loan shall be true and correct
in all material respects.

 

Notwithstanding
anything to the contrary contained in this Section 2.02(g), provided Borrower
is a Delaware single member limited liability company with two (2) Independent
Directors which satisfies the single purpose bankruptcy remote entity
requirements of each Rating Agency as of the Closing Date for a single member
limited liability company, the foregoing provisions of this Section 2.02(g)
shall not apply to the General Partner. Lender acknowledges that Borrower
satisfies such criteria as of the Closing Date.

 

(h)           No Defaults. No Default or Event of
Default has occurred and is continuing or would occur as a result of the
consummation of the transactions contemplated by the Loan Documents. Borrower
is not in material default in the payment or performance of any of its
Contractual Obligations in any respect.

 

(i)            Consents and Approvals. Borrower
and, if applicable, each General Partner, have obtained or made all necessary
(i) consents, approvals and authorizations from, and registrations and filings
of or with, all Governmental Authorities and (ii) consents, approvals,
waivers and notifications of partners, stockholders, members, creditors,
lessors and other nongovernmental Persons, in each case, which are required to
be obtained or made by Borrower or, if applicable, the General Partner, in
connection with the execution and delivery of, and the performance by Borrower
of its obligations under, the Loan Documents.

 

(j)            Investment Company Act Status, etc. Borrower
is not (i) an “investment company,” or a company “controlled” by an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as
amended, (ii) a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.

 

(k)           Compliance with Law. Borrower is in
compliance in all material respects with all Legal Requirements to which it or
the Property is subject, including, without limitation, all Environmental
Statutes, the Occupational Safety and Health Act of 1970, the Americans with
Disabilities Act and ERISA. No portion of the Property has been or will be
purchased, improved, fixtured, equipped or furnished with proceeds of any
illegal activity and, to the best of Borrower’s knowledge, no illegal
activities are being conducted at or from the Property.

 

(l)            Financial Information. All financial
data that has been delivered by Borrower to Lender (i) is true, complete and
correct in all material respects, (ii) accurately represents in all material
respects the financial condition and results of operations of the Persons
covered thereby as of the date of such data, and (iii) with respect to audited
financial statements, has been prepared in accordance with GAAP (or such other
accounting basis as is reasonably acceptable to Lender) throughout the periods
covered thereby; provided, however, that the foregoing representations (i) –
(iii) are to the best knowledge of Borrower with respect to any financial data

 

32

 

prepared by or
on behalf of a prior owner of the Property. As of the date hereof, neither
Borrower nor, if applicable, any General Partner, has any material contingent
liability, liability for taxes or other unusual or forward commitment not
reflected in such financial statements delivered to Lender. Since the date of
the last financial statements delivered by Borrower to Lender, except as
otherwise disclosed in such financial statements or notes thereto, there has
been no change in the assets, liabilities or financial position of Borrower
nor, if applicable, any General Partner, or in the results of operations of
Borrower which would have a Material Adverse Effect. Neither Borrower nor, if
applicable, any General Partner, has incurred any obligation or liability,
contingent or otherwise, not reflected in such financial statements which would
have a Material Adverse Effect.

 

(m)          Transaction Brokerage Fees. Other than
Holliday Fenoglio Fowler, L.P., Borrower has not dealt with any financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Security Instrument. All
brokerage fees, commissions and other expenses payable in connection with the
transactions contemplated by the Loan Documents have been paid in full by
Borrower contemporaneously with the execution of the Loan Documents and the
funding of the Loan. Borrower hereby agrees to indemnify and hold Lender
harmless for, from and against any and all claims, liabilities, costs and
expenses of any kind in any way relating to or arising from (i) a claim by any
Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein or (ii) any breach of the foregoing
representation. The provisions of this subsection (m) shall survive the
repayment of the Debt.

 

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

 

(o)           Pending Litigation. There are no
actions, suits or proceedings pending or, to the best knowledge of Borrower,
threatened against or affecting Borrower or the Property in any court or before
any Governmental Authority which if adversely determined either individually or
collectively has or is reasonably likely to have a Material Adverse Effect.

 

(p)           Solvency; No Bankruptcy. Each of
Borrower and, if applicable, the General Partner, (i) is and has at all times
been Solvent and will remain Solvent immediately upon the consummation of the
transactions contemplated by the Loan Documents and (ii) is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment
for the benefit of creditors and is not contemplating the filing of a petition
under any state or federal bankruptcy or insolvency laws or the liquidation of
all or a major portion of such Person’s assets or property and Borrower has no
knowledge of any Person contemplating the filing of any such petition against
it or, if applicable, the General Partner. None of the transactions
contemplated hereby will be or have been made with an intent to hinder, delay
or defraud any present or future creditors of Borrower and Borrower has
received reasonably equivalent value in exchange for its obligations under the
Loan Documents. Borrower’s assets do not, and immediately upon

 

33

 

consummation
of the transaction contemplated in the Loan Documents will not, constitute
unreasonably small capital to carry out its business as presently conducted or
as proposed to be conducted. Borrower does not intend to, nor believe that it
will, incur debts and liabilities beyond its ability to pay such debts as they
may mature.

 

(q)           Use of Proceeds. The proceeds of the
Loan shall be applied by Borrower to, inter  alia, (i) acquire the
Property and (ii) pay certain transaction costs incurred by Borrower in
connection with the Loan. No portion of the proceeds of the Loan will be used
for family, personal, agricultural or household use.

 

(r)            Tax Filings. Borrower and, if
applicable, each General Partner, have filed all federal, state and local tax
returns required to be filed and have paid or made adequate provision for the
payment of all federal, state and local taxes, charges and assessments payable
by Borrower and, if applicable, each General Partner. Borrower and, if
applicable, each General Partner, believe that their respective tax returns
properly reflect the income and taxes of Borrower and said General Partner, if
any, for the periods covered thereby, subject only to reasonable adjustments
required by the Internal Revenue Service or other applicable tax authority upon
audit.

 

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

 

(t)            ERISA. (i) The
assets of Borrower and Guarantor are not and will not become treated as “plan
assets”, whether by operation of law or under regulations promulgated under
ERISA. If any Person is a direct owner of a legal or beneficial interest in
Borrower and in such capacity is using (or is deemed under ERISA to be using) “plan
assets”, Borrower, at all times that the Loan is outstanding, will either qualify
as a “real estate operating company” within the meaning of 29 C.F.R.
§2510.3-101(e) or there is applicable a prohibited transaction exemption under
ERISA such that the assets of Borrower will not be treated as “plan assets.”  Each Plan and Welfare Plan, and, to the
knowledge of Borrower, each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material respects in
compliance with, its terms and the applicable provisions of ERISA, the Code and
any other applicable Legal Requirement, and no event or condition has occurred
and is continuing as to which Borrower would be under an obligation to furnish
a report to Lender under clause (ii)(A) of this Section. Other than an
application for a favorable determination letter with respect to a Plan, there
are no pending issues or claims before the Internal Revenue Service, the United
States Department of Labor or any court of competent jurisdiction related to
any Plan or Welfare Plan under which Borrower, Guarantor or any ERISA
Affiliate, directly or indirectly (through an indemnification agreement or
otherwise), could be subject to any material risk of liability under Section
409 or 502(i) of ERISA or Section 4975 of the Code. No Welfare Plan provides or
will provide benefits, including, without limitation, death or medical benefits
(whether or not insured) with respect to any current or former employee of
Borrower, Guarantor or any ERISA Affiliate beyond his or her retirement or
other termination of service other than (A) coverage mandated by applicable
law, (B) death or disability benefits that have been fully provided for by
fully paid up insurance or (C) severance benefits.

 

34

 

(ii)           Borrower will furnish to Lender as soon as
possible, and in any event within ten (10) days after Borrower knows or has
reason to believe that any of the events or conditions specified below with
respect to any Plan, Welfare Plan or Multiemployer Plan has occurred or exists,
an Officer’s Certificate setting forth details respecting such event or
condition and the action, if any, that Borrower or its ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or notice required to be
filed with or given to PBGC (or any other relevant Governmental Authority) by
Borrower or an ERISA Affiliate with respect to such event or condition, if such
report or notice is required to be filed with the PBGC or any other relevant
Governmental Authority):

 

(A)          any reportable event, as
defined in Section 4043 of ERISA and the regulations issued thereunder, with
respect to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within thirty (30)
days of the occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA, including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code and of Section
302(e) of ERISA, shall be a reportable event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code), and any request for a
waiver under Section 412(d) of the Code for any Plan;

 

(B)           the distribution under
Section 4041 of ERISA of a notice of intent to terminate any Plan or any action
taken by Borrower or an ERISA Affiliate to terminate any Plan;

 

(C)           the institution by PBGC
of proceedings under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the receipt by Borrower or
any ERISA Affiliate of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;

 

(D)          the complete or partial
withdrawal from a Multiemployer Plan by Borrower or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA (including the
obligation to satisfy secondary liability as a result of a purchaser default)
or the receipt by Borrower or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA;

 

(E)           the institution of a
proceeding by a fiduciary of any Multiemployer Plan against Borrower or any
ERISA Affiliate to enforce Section 515 of ERISA, which proceeding is not
dismissed within thirty (30) days;

 

(F)           the adoption of an
amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section
307 of ERISA, would result in the loss of tax-exempt status of the trust of
which such Plan is a part if Borrower or an ERISA

 

35

 

Affiliate
fails to timely provide security to the Plan in accordance with the provisions
of said Sections; or

 

(G)           the imposition of a
lien or a security interest in connection with a Plan.

 

(iii)          Borrower shall not knowingly engage in or
permit any transaction in connection with which Borrower, Guarantor or any
ERISA Affiliate could be subject to either a civil penalty or tax assessed
pursuant to Section 502(i) or 502(l) of ERISA or Section 4975 of the Code,
permit any Welfare Plan to provide benefits, including without limitation,
medical benefits (whether or not insured), with respect to any current or
former employee of Borrower, Guarantor or any ERISA Affiliate beyond his or her
retirement or other termination of service other than (A) coverage
mandated by applicable law, (B) death or disability benefits that have been
fully provided for by paid up insurance or otherwise or (C) severance benefits,
permit the assets of Borrower or Guarantor to become “plan assets”, whether by
operation of law or under regulations promulgated under ERISA, or adopt, amend
(except as may be required by applicable law) or increase the amount of any
benefit or amount payable under, or permit any ERISA Affiliate to adopt, amend
(except as may be required by applicable law) or increase the amount of any
benefit or amount payable under, any employee benefit plan (including, without
limitation, any employee welfare benefit plan) or other plan, policy or
arrangement, except for normal increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not result in a material
increase in benefits expense to Borrower, Guarantor or any ERISA Affiliate.

 

(u)           Labor Matters. No organized work
stoppage or labor strike is pending or, to Borrower’s knowledge, threatened by
employees or other laborers at the Property and neither Borrower nor Manager
(i) is involved in or, to Borrower’s knowledge, threatened with any labor
dispute, grievance or litigation relating to labor matters involving any
employees and other laborers at the Property, including, without limitation,
violation of any federal, state or local labor, safety or employment laws
(domestic or foreign) and/or charges of unfair labor practices or
discrimination complaints; (ii) has engaged in any unfair labor practices
within the meaning of the National Labor Relations Act or the Railway Labor
Act; or (iii) except as previously disclosed to Lender in writing, is a party
to, or bound by, any collective bargaining agreement or union contract with
respect to employees and other laborers at the Property and no such agreement or
contract is currently being negotiated by Borrower, Manager or any of their
Affiliates.

 

(v)           Borrower’s Legal Status. Borrower’s
exact legal name that is indicated on the signature page hereto, organizational
identification number and place of business or, if more than one, its chief
executive office, as well as Borrower’s mailing address, if different, which
were identified by Borrower to Lender and contained in this Security
Instrument, are true, accurate and complete. Borrower (i) will not change its
name, its place of business or, if more than one place of business, its chief
executive office, or its mailing address or organizational identification
number if it has one without giving Lender at least thirty (30) days prior
written notice of such change, (ii) if Borrower does not have an organizational
identification number and later obtains

 

36

 

one, Borrower
shall promptly notify Lender of such organizational identification number and
(iii) Borrower will not change its type of organization, jurisdiction of
organization or other legal structure.

 

(w)          Compliance with Anti-Terrorism, Embargo
and Anti-Money Laundering Laws. (i) None of Borrower, General Partner,
Guarantor, or any Person who owns any equity interest in or Controls Borrower,
General Partner or Guarantor currently is identified on the OFAC List or
otherwise qualifies as a Prohibited Person, and Borrower has implemented
procedures, approved by General Partner, to ensure that no Person who now or hereafter
owns an equity interest in Borrower or General Partner is a Prohibited Person
or Controlled by a Prohibited Person, (ii) no proceeds of the Loan will be used
to fund any operations in, finance any investments or activities in or make any
payments to, Prohibited Persons, and (iii) none of Borrower, General Partner,
or Guarantor is in violation of any Legal Requirements relating to anti-money
laundering or anti-terrorism, including, without limitation, Legal Requirements
related to transacting business with Prohibited Persons or the requirements of
the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and
the related regulations issued thereunder, including temporary regulations, all
as amended from time to time. No tenant at the Property currently is identified
on the OFAC List or otherwise qualifies as a Prohibited Person, and, to the
best of Borrower’s knowledge, no tenant at the Property is owned or Controlled
by a Prohibited Person. Borrower has determined that Manager has implemented
procedures, approved by Borrower, to determine whether a tenant at the Property
is a Prohibited Person or owned or Controlled by a Prohibited Person. Notwithstanding
the foregoing, no representation is made hereunder with respect to owners of
stock or other interests in publicly traded companies or members of any pension
plans unless the failure to so apply such representations to such Persons could
create any Lender Exposure.

 

Section 2.03. Further Acts, etc. Borrower
will, at the cost of Borrower, and without expense to Lender, do, execute,
acknowledge and deliver all and every such further acts, deeds, conveyances,
mortgages or deeds of trust, as applicable, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
reasonably require for the better assuring, conveying, assigning, transferring,
and confirming unto Lender the property and rights hereby mortgaged, given,
granted, bargained, sold, alienated, enfeoffed, conveyed, confirmed, pledged,
assigned and hypothecated, or which Borrower may be or may hereafter become
bound to convey or assign to Lender, or for carrying out or facilitating the
performance of the terms of this Security Instrument or for filing, registering
or recording this Security Instrument and, on demand, will execute and deliver
and hereby authorizes Lender to execute in the name of Borrower or without the
signature of Borrower to the extent Lender may lawfully do so, one or more
financing statements, chattel mortgages or comparable security instruments to
evidence more effectively the lien hereof upon the Property. Borrower grants to
Lender an irrevocable power of attorney coupled with an interest for the
purpose of protecting, perfecting, preserving and realizing upon the interests
granted pursuant to this Security Instrument and to effect the intent hereof,
all as fully and effectually as Borrower might or could do; and Borrower hereby
ratifies all that Lender shall lawfully do or cause to be done by virtue hereof.
Upon (a) receipt of an affidavit of an officer of Lender as to the loss, theft,
destruction or mutilation of the Note or any other Loan Document which is not
of public record, (b) receipt of an indemnity from Lender related to losses
resulting solely from the issuance of a replacement note or other applicable

 

37

 

Loan Document and (c) in the case of any such
mutilation, upon surrender and cancellation of such Note or other applicable
Loan Document, Borrower will issue, in lieu thereof, a replacement Note or
other applicable Loan Document, dated the date of such lost, stolen, destroyed
or mutilated Note or other Loan Document in the same principal amount thereof
and otherwise of like tenor.

 

Section 2.04. Recording of Security
Instrument, etc. Borrower forthwith upon the execution and delivery of this
Security Instrument and thereafter, from time to time, will cause this Security
Instrument, and any security instrument creating a lien or security interest or
evidencing the lien hereof upon the Property and each instrument of further
assurance to be filed, registered or recorded in such manner and in such places
as may be required by any present or future law in order to publish notice of
and fully protect the lien or security interest hereof upon, and the interest
of Lender in, the Property. Borrower will pay all filing, registration or
recording fees, and all reasonable expenses incident to the preparation, execution
and acknowledgment of this Security Instrument, any mortgage or deed of trust,
as applicable, supplemental hereto, any security instrument with respect to the
Property and any instrument of further assurance, and all federal, state,
county and municipal, taxes, duties, imposts, assessments and charges arising
out of or in connection with the execution and delivery of this Security
Instrument, any mortgage or deed of trust, as applicable, supplemental hereto,
any security instrument with respect to the Property or any instrument of
further assurance, except where prohibited by law to do so, in which event
Lender, upon at least ninety (90) days prior written notice to Borrower, may
declare the Debt to be immediately due and payable without any prepayment fee
or charge of any kind. Borrower shall hold harmless and indemnify Lender and
its successors and assigns, against any liability incurred as a result of the
imposition of any tax on the making and recording of this Security Instrument.

 

Section 2.05. Representations, Warranties
and Covenants Relating to the Property. Borrower represents and warrants to
and covenants with Lender with respect to the Property as follows:

 

(a)           Lien Priority. This Security
Instrument is a valid and enforceable first lien on the Property, free and
clear of all encumbrances and liens having priority over the lien of this
Security Instrument, except for the items set forth as exceptions to or
subordinate matters in the title insurance policy insuring the lien of this
Security Instrument, none of which, individually or in the aggregate,
materially interfere with the benefits of the security intended to be provided
by this Security Instrument, materially affect the value or marketability of
the Property, impair the use or operation of the Property for the use currently
being made thereof or impair Borrower’s ability to pay its obligations in a
timely manner (such items being the “Permitted Encumbrances”).

 

(b)           Title. Borrower has, subject only to
the Permitted Encumbrances, good, insurable and marketable fee simple title to
the Premises, Improvements and Fixtures (collectively, the “Realty”) and
to all easements and rights benefiting the Realty and has the right, power and
authority to mortgage, encumber, give, grant, bargain, sell, alien, enfeoff,
convey, confirm, pledge, assign, and hypothecate the Property. Borrower will
preserve its interest in and title to the Property and will forever warrant and
defend the same to Lender against any and all claims

 

38

 

made by,
through or under Borrower and will forever warrant and defend the validity and
priority of the lien and security interest created herein against the claims of
all Persons whomsoever claiming by, through or under Borrower. The foregoing
warranty of title shall survive the foreclosure of this Security Instrument and
shall inure to the benefit of and be enforceable by Lender in the event Lender
acquires title to the Property pursuant to any foreclosure. In addition, there
are no outstanding options or, except as set forth on the title insurance
policy delivered to Lender in connection with the origination of the Loan,
rights of first refusal to purchase the Property or Borrower’s ownership
thereof.

 

(c)           Taxes and Impositions. All taxes and
other Impositions and governmental assessments due and owing in respect of, and
affecting, the Property have been paid. Borrower has paid all Impositions which
constitute special governmental assessments in full, except for those
assessments which are permitted by applicable Legal Requirements to be paid in
installments, in which case all installments which are due and payable have
been paid in full. There are no pending, or to Borrower’s best knowledge,
proposed special or other assessments for public improvements or otherwise
affecting the Property, nor are there any contemplated improvements to the
Property that may result in such special or other assessments.

 

(d)           Casualty; Flood Zone. Except as
disclosed in the engineering report for the Property previously delivered to
Lender in connection with the origination of the Loan, the Realty is in good
repair and free and clear of any damage, destruction or casualty (whether or
not covered by insurance) which remains unrepaired that would materially and
adversely affect the value of the Realty or the use for which the Realty was
intended, there exists no structural or other material defects or damages in or
to the Property and Borrower has not received any written notice from any
insurance company or bonding company of any material defect or inadequacies in
the Property, or any part thereof, in either case which would materially and
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. No portion of the Premises is
located in an “area of special flood hazard,” as that term is defined in the
regulations of the Federal Insurance Administration, Department of Housing and
Urban Development, under the National Flood Insurance Act of 1968, as amended
(24 CFR § 1909.1) or Borrower has obtained the flood insurance required by
Section 3.01(a)(vi) hereof. The Premises either does not lie in a 100 year
flood plain that has been identified by the Secretary of Housing and Urban
Development or any other Governmental Authority or, if it does, Borrower has
obtained the flood insurance required by Section 3.01(a)(vi) hereof.

 

(e)           Completion; Encroachment. All
Improvements necessary for the efficient use and operation of the Premises have
been completed and, except as set forth in the title insurance policy insuring
the lien of this Security Instrument, none of said Improvements lie outside the
boundaries and building restriction lines of the Premises. Except as set forth
in the title insurance policy insuring the lien of this Security Instrument, no
improvements on adjoining properties encroach upon the Premises.

 

(f)            Separate Lot. The Premises are taxed
separately without regard to any other real estate and constitute a legally
subdivided lot under all applicable Legal Requirements (or, if not subdivided,
no subdivision or platting of the Premises is required under applicable Legal

 

39

 

Requirements),
and for all purposes may be mortgaged, encumbered, conveyed or otherwise dealt
with as an independent parcel. The Property does not benefit from any tax
abatement or exemption, provided, however, the foregoing shall not preclude
Borrower from bringing any tax certiorari proceeding.

 

(g)           Use. The existence of all
Improvements, the present use and operation thereof and the access of the
Premises and the Improvements to all of the utilities and other items referred
to in paragraph (k) below are in compliance in all material respects with all
Leases affecting the Property and all applicable Legal Requirements, including,
without limitation, Environmental Statutes, Development Laws and Use
Requirements. Borrower has not received any notice from any Governmental
Authority alleging any uncured violation relating to the Property of any
applicable Legal Requirements.

 

(h)           Licenses and Permits. Except as
previously disclosed to Lender in writing, Borrower currently holds and will
continue to hold all certificates of occupancy, licenses, registrations,
permits, consents, franchises and approvals of any Governmental Authority or
any other Person which are material for the lawful occupancy and operation of
the Realty or which are material to the ownership or operation of the Property
or the conduct of Borrower’s business. All such certificates of occupancy,
licenses, registrations, permits, consents, franchises and approvals are
current and in full force and effect.

 

(i)            Environmental
Matters. Borrower has received and reviewed the Environmental Report and
has no reason to believe that the Environmental Report contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements contained therein or herein, in light of the circumstances
under which such statements were made, not misleading.

 

(j)            Property Proceedings. There are no
actions, suits or proceedings pending or, to Borrower’s knowledge, threatened
in any court or before any Governmental Authority or arbitration board or
tribunal (i) relating to (A) the zoning of the Premises or any part
thereof, (B) any certificates of occupancy, licenses, registrations,
permits, consents or approvals issued with respect to the Property or any part
thereof, (C) the condemnation of the Property or any part thereof, or
(D) the condemnation or relocation of any roadways abutting the Premises
required for access or the denial or limitation of access to the Premises or
any part thereof from any point of access to the Premises, (ii) asserting
that (A) any such zoning, certificates of occupancy, licenses,
registrations, permits, consents and/or approvals do not permit the operation
of any material portion of the Realty as presently being conducted,
(B) any material improvements located on the Property or any part thereof
cannot be located thereon or operated for their intended use or (C) the
operation of the Property or any part thereof is in violation in any material
respect of any Environmental Statutes, Development Laws or other Legal
Requirements or any of the Space Leases or Property Agreements or (iii) which
might (A) affect the validity or priority of any Loan Document or (B) if
adversely determined, would have a Material Adverse Effect. Borrower is not
aware of any facts or circumstances which may give rise to any actions, suits
or proceedings described in the preceding sentence.

 

40

 

(k)           Utilities. The Premises have all
necessary legal access to water, gas and electrical supply, storm and sanitary
sewerage facilities, other required public utilities (with respect to each of
the aforementioned items, by means of either a direct connection to the source
of such utilities or through connections available on publicly dedicated
roadways directly abutting the Premises or through permanent insurable
easements benefiting the Premises), parking, and means of direct access from
the Premises to public roadways over recognized curb cuts (or such access is
through private roadways which may be used for ingress and egress pursuant to
permanent insurable easements).

 

(l)            Mechanics’ Liens. The Property is
free and clear of any mechanics’ liens or liens in the nature thereof, and no
rights are outstanding that under law could give rise to any such liens, any of
which liens are or may be prior to, or equal with, the lien of this Security
Instrument, except those which are insured against by the title insurance
policy insuring the lien of this Security Instrument.

 

(m)          Intentionally Omitted.

 

(n)           Insurance. The Property is insured in
accordance with the requirements set forth in Article III hereof.

 

(o)           Space Leases.

 

(i)            Borrower has delivered
a true, correct and complete schedule of all Space Leases as of the date
hereof, which accurately and completely sets forth in all material respects,
for each such Space Lease, the following (collectively, the “Rent Roll”):  the name of the tenant; the lease expiration
date, the base rent and percentage rent, if any, payable; all escalation and
pass-through obligations; and the security deposit, if any, held thereunder.

 

(ii)           Each Space Lease constitutes the legal,
valid and binding obligation of Borrower and, to the knowledge of Borrower, is
enforceable against the tenant thereof. Except as previously disclosed to
Lender in any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, no material
default exists, or with the passing of time or the giving of notice would
exist, (A) under any Major Space Lease or (B) under any other Space Leases
which would, in the aggregate, have a Material Adverse Effect.

 

(iii)          Except as previously disclosed to Lender in
any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, no
tenant under any Space Lease has, as of the date hereof, paid Rent more than
thirty (30) days in advance, and the Rents under such Space Leases have not
been waived, released, or otherwise discharged or compromised.

 

(iv)          Except as previously disclosed to Lender in
any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, all
work to be performed by Borrower under the Space Leases as of the date hereof
has been substantially performed, all contributions required

 

41

 

to be made by Borrower to the tenants thereunder as of the date hereof
have been made except for any held-back amounts, and, to Borrower’s knowledge,
all other conditions precedent to each such tenant’s obligations thereunder
have been satisfied.

 

(v)           Except as set forth in
any Space Lease, there are no options to terminate any Space Lease.

 

(vi)          Except as previously disclosed to Lender in
any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, each
tenant under a Major Space Lease has entered into occupancy of the demised
premises to the extent required under the terms of its Major Space Lease, and
each such tenant is open and conducting business in the demised premises. Except
as previously disclosed to Lender in any tenant estoppel letter delivered to
Lender in connection with the origination of the Loan or as previously
disclosed to Lender in writing, to the best knowledge of Borrower, each tenant
under a Lease other than a Major Space Lease has entered into occupancy of its
demised premises under its Lease to the extent required under the terms of its
Lease and each such tenant is open and conducting business in the demised
premises.

 

(vii)         Borrower has delivered to Lender true, correct
and complete copies of all Space Leases described in the Rent Roll.

 

(viii)        Each Space Lease is in full force and effect
and (except as disclosed on the Rent Roll) has not been assigned, modified,
supplemented or amended in any way, except as otherwise disclosed in writing to
Lender (which disclosure may be by delivery of any such assignment,
modification, supplement or amendment to Lender).

 

(ix)           Except as previously disclosed to Lender in
any tenant estoppel letter delivered to Lender in connection with the
origination of the Loan or as previously disclosed to Lender in writing, to
Borrower’s knowledge, each tenant under each Space Lease is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment
for the benefit of creditors.

 

(x)            No Space Lease
provides any party with the right to obtain a lien or encumbrance (other than
rights of tenants as tenants only) upon the Property superior to the lien of
this Security Instrument.

 

(p)           Property Agreements.

 

(i)            Borrower has delivered
to Lender true, correct and complete copies of all material Property
Agreements.

 

(ii)           Except as set forth in the title insurance
policy insuring the lien of this Security Instrument, no Property Agreement
provides any party with the right to obtain a lien or encumbrance upon the
Property superior to the lien of this Security Instrument.

 

42

 

(iii)          No default exists or with the passing of time
or the giving of notice or both would exist under any Property Agreement which
would, individually or in the aggregate, have a Material Adverse Effect.

 

(iv)          Borrower has not received or given any
written communication which alleges that a default exists or, with the giving
of notice or the lapse of time, or both, would exist under the provisions of
any Property Agreement.

 

(v)           No condition exists
whereby Borrower or any future owner of the Property may be required to
purchase any other parcel of land which is subject to any Property Agreement or
which gives any Person a right to purchase, or right of first refusal with
respect to, the Property.

 

(vi)          To the best knowledge of Borrower, no offset
or any right of offset exists respecting continued contributions to be made by
any party to any Property Agreement except as expressly set forth therein.
Except as previously disclosed to Lender in writing, no material exclusions or
restrictions on the utilization, leasing or improvement of the Property
(including non-compete agreements) exists in any Property Agreement.

 

(vii)         All work, if any, to be performed by Borrower
under each of the Property Agreements as of the date hereof has been
substantially performed, all contributions to be made by Borrower to any party
to such Property Agreements as of the date hereof have been made, and all other
conditions to such party’s obligations thereunder have been satisfied.

 

(q)           Personal Property. Borrower has
delivered to Lender a true, correct and complete schedule of all personal
property, if any, owned by Borrower and located upon the Property or used in
connection with the use or operation of the Realty having a replacement value
in excess of Five Thousand Dollars ($5,000) and Borrower represents that it has
good and marketable title to all such personal property, free and clear of any
liens, except for liens created under the Loan Documents, liens which describe
the equipment and other personal property owned by tenants and equipment
financings.

 

(r)            Leasing Brokerage and Management Fees.
Except as previously disclosed to Lender in writing, there are no brokerage
fees or commissions due and payable by Borrower with respect to the leasing of
space at the Property and there are no management fees due and payable by
Borrower with respect to the management of the Property.

 

(s)           Security Deposits. Borrower is in
material compliance with all Legal Requirements relating to security deposits
under Space Leases as to which failure to comply would, individually or in the
aggregate, have a Material Adverse Effect.

 

(t)            Intentionally Omitted.

 

(u)           Representations Generally. The
representations and warranties contained in this Security Instrument, and the
review and inquiry made on behalf of Borrower therefor, have all been made by
Persons having the requisite expertise and knowledge to provide such

 

43

 

representations
and warranties. No representation, warranty or statement of fact made by or on
behalf of Borrower in this Security Instrument, or in any certificate, document
or schedule furnished to Lender pursuant hereto, contains any untrue statement
of a material fact or omits to state any material fact necessary to make
statements contained therein or herein not misleading (which may be to Borrower’s
best knowledge where so provided herein). There are no facts presently known to
Borrower which have not been disclosed to Lender which would, individually or
in the aggregate, have a Material Adverse Effect nor as far as Borrower can
foresee is reasonably likely to, individually or in the aggregate, have a
Material Adverse Effect.

 

(v)               Liquor License.
All licenses, permits, approvals and consents which Borrower or any Affiliate
is required to have obtained for the sale and service of alcoholic beverages on
the Premises have been obtained from the applicable Governmental Authorities,
and to Borrower’s knowledge, all licenses, permits, approvals and consents
which are required by other Persons for the sale and service of alcoholic
beverages on the Premises have been obtained from the applicable Governmental
Authorities.

 

Section 2.06. Removal of Lien. (a)
Borrower shall, at its expense, maintain this Security Instrument as a first
lien on the Property and shall keep the Property free and clear of all liens
and encumbrances of any kind and nature other than the Permitted Encumbrances
or other encumbrances hereafter approved by Lender in writing. Borrower shall,
within ten (10) days following the filing thereof, promptly discharge of
record, by bond or otherwise, any such liens and, promptly upon request by
Lender, shall deliver to Lender evidence reasonably satisfactory to Lender of
the discharge thereof.

 

(b)           Without limitation to the provisions of
Section 2.06(a) hereof, Borrower shall (i) subject to Section 2.06(c) below,
pay, from time to time when the same shall become due, all claims and demands
of mechanics, materialmen, laborers, and others which, if unpaid, might result
in, or permit the creation of, a lien on the Property or any part thereof, (ii)
cause to be removed of record (by payment or posting of bond or settlement or
otherwise) any mechanics’, materialmens’, laborers’ or other lien (other than
Permitted Encumbrances) on the Property, or any part thereof, or on the
revenues, rents, issues, income or profit arising therefrom, and (iii) in
general, do or cause to be done, without expense to Lender, everything
reasonably necessary to preserve in full the lien of this Security Instrument. If
Borrower fails to comply with the requirements of this Section 2.06(b), then,
upon ten (10) Business Days’ prior notice to Borrower, Lender may, but shall
not be obligated to, pay any such lien, and Borrower shall, within ten (10)
Business Days after Lender’s demand therefor, reimburse Lender for all sums so
expended, together with interest thereon at the Default Rate from the date
advanced until paid, all of which shall be deemed part of the Debt. Nothing
contained herein shall be deemed a consent or request of Lender, express or
implied, by inference or otherwise, to the performance of any alteration, repair
or other work by any contractor, subcontractor or laborer or the furnishing of
any materials by any materialmen in connection therewith.

 

(c)           Notwithstanding the foregoing, Borrower may
contest any lien (other than a lien relating to non-payment of Impositions, the
contest of which shall be governed by Section 4.04 hereof) of the type set
forth in subparagraph (b)(ii) of this Section 2.06 provided that, following
prior notice to Lender, (i) Borrower is contesting the validity of such lien
with due diligence and

 

44

 

in good faith
and by appropriate proceedings, without cost or expense to Lender or any of its
agents, employees, officers, or directors, (ii) Borrower shall preclude the
collection of, or other realization upon, any contested amount from the
Property or any revenues from or interest in the Property, (iii) neither the
Property nor any part thereof nor interest therein shall be in any imminent
danger of being sold, forfeited or lost by reason of such contest by Borrower,
(iv) such contest by Borrower shall not affect the ownership, use or occupancy
of the Property, (v) such contest by Borrower shall not subject Lender or
Borrower to the risk of civil or criminal liability (other than the civil liability
of Borrower for the amount of the lien in question), (vi) such lien is
subordinate to the lien of this Security Instrument, (vii) Borrower has not
consented to such lien, (viii) Borrower has given Lender prompt notice of the
filing of such lien and, upon request by Lender from time to time, notice of
the status of such contest by Borrower and/or confirmation of the continuing
satisfaction of the conditions set forth in this Section 2.06(c), (ix) Borrower
shall promptly pay the obligation secured by such lien upon a final
determination of Borrower’s liability therefor, and (x) unless Borrower has
paid the contested amount, if reasonably requested by Lender, Borrower shall
deliver to Lender cash, a bond or other security acceptable to Lender equal to
125% of the contested amount pursuant to collateral arrangements reasonably
satisfactory to Lender.

 

Section 2.07. Cost of Defending and
Upholding this Security Instrument Lien. If any action or proceeding is
commenced to which Lender is made a party relating to the Loan Documents and/or
the Property or Lender’s interest therein or in which it becomes necessary to
defend or uphold the lien of this Security Instrument or any other Loan
Document, Borrower shall, on demand, reimburse Lender for all reasonable expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
incurred by Lender in connection therewith, and such sum, together with
interest thereon at the Default Rate from and after such demand until fully
paid, shall constitute a part of the Debt.

 

Section 2.08. Use of the Property. Borrower
will use, or cause to be used, the Property for such use as is permitted
pursuant to applicable Legal Requirements including, without limitation, under
any certificate of occupancy applicable to the Property. Borrower shall not
suffer or permit the Property or any portion thereof to be used by the public,
any tenant, or any Person not subject to a Lease, in a manner that is
reasonably likely to impair Borrower’s title to the Property, or in such manner
as may give rise to a claim or claims of adverse usage or adverse possession by
the public, or of implied dedication of the Property or any part thereof.

 

Section 2.09. Financial Reports. (a)  Borrower will
keep and maintain or will cause to be kept and maintained on a Fiscal Year
basis, in accordance with GAAP (or such other accounting basis reasonably
acceptable to Lender) consistently applied, proper and accurate books, tax
returns, records and accounts reflecting (i) all of the financial affairs
of Borrower and (ii) all items of income and expense in connection with the
operation of the Property or in connection with any services, equipment or
furnishings provided in connection with the operation thereof, whether such
income or expense may be realized by Borrower or by any other Person
whatsoever, excepting lessees unrelated to and unaffiliated with Borrower who
have leased from Borrower portions of the Property for the purpose of occupying
the same. Lender shall have the right from time to time at all times during
normal business hours upon reasonable notice to examine such books, tax
returns, records and accounts at the office of Borrower or other Person

 

45

 

maintaining such books, tax returns, records
and accounts and to make such copies or extracts thereof as Lender shall desire.
While an Event of Default exists, Borrower shall pay any costs and expenses
incurred by Lender to examine Borrower’s accounting records with respect to the
Property, as Lender shall determine to be necessary or appropriate in the
protection of Lender’s interest.

 

(b)           Borrower will furnish Lender (i) annually,
within one hundred twenty (120) days following the end of each Fiscal Year of
Borrower and (ii) on a quarterly basis, within forty-five (45) days following
the end of each fiscal quarter of Borrower, with a complete copy of Borrower’s
financial statement consistently applied covering (x) all of the financial
affairs of Borrower and (y) the operation of the Property for such fiscal
quarter and containing a statement of revenues and expenses, a balance sheet
and a statement of Borrower’s equity. Together with the quarterly financial
statements required to be furnished pursuant to this Section 2.09(b), Borrower
shall furnish to Lender an Officer’s Certificate certifying as of the date
thereof (1) that the financial statements accurately represent the results of
operations and financial condition of Borrower and the Property all in
accordance with GAAP (or such other accounting basis reasonably acceptable to
Lender) consistently applied, and (2) whether, to Borrower’s best
knowledge, there exists a Default under the Note or any other Loan Document
executed and delivered by Borrower, and if such event or circumstance exists,
the nature thereof, the period of time it has existed and the action then being
taken to remedy such event or circumstance.

 

(c)           Intentionally omitted.

 

(d)           Intentionally omitted.

 

(e)           Borrower will furnish Lender annually,
within twenty (20) days following the end of each year and within twenty (20)
days following receipt of such request therefor, with a true, complete and
correct rent roll for the Property, including a list of which tenants are in
material default under their respective Leases, dated as of the date of the
Officer’s Certificate referred to below, identifying each tenant, the monthly
rent and additional rent, if any, payable by such tenant, the expiration date
of such tenant’s Lease, the security deposit, if any, held by Borrower under
the Lease, the space covered by the Lease, each tenant that has filed a
bankruptcy, insolvency, or reorganization proceeding since delivery of the last
such rent roll  and the arrearages
for such tenant, if any, and such rent roll shall be accompanied by an Officer’s
Certificate, dated as of the date of the delivery of such rent roll, certifying
that such rent roll is true, correct and complete in all material respects as
of its date.

 

(f)            Borrower shall furnish to Lender, within
thirty (30) days after Lender’s request therefor, with such further detailed
information with respect to the operation of the Property and the financial
affairs of Borrower as may be reasonably requested by Lender.

 

(g)           Borrower shall cause Manager to furnish to
Lender, within twenty (20) days following the request of Lender and, during the
continuance of an Event of Default, within twenty (20) days of the end of each
month, a schedule of tenant security deposits, together with a certification of
Borrower or Manager that such tenant security deposits are being held in
accordance with all Legal Requirements.

 

46

 

(h)           Intentionally omitted.

 

(i)            If Borrower is not a disregarded entity for
tax purposes, Borrower shall furnish to Lender annually, within thirty (30)
days of filing its tax return, a copy of such tax return.

 

(j)            Borrower shall submit to Lender an Annual
Budget not later than thirty (30) days prior to the commencement of each Fiscal
Year (and October 31, 2006 with respect to the Annual Budget for the Fiscal
Year ending December 31, 2006) in form satisfactory to Lender setting forth in
reasonable detail budgeted monthly operating income and monthly operating,
capital and other expenses for the Property. Each Annual Budget shall contain,
among other things, management fees, third party service fees, and other
expenses as Borrower may reasonably determine.

 

Section 2.10. Litigation. Borrower
will give prompt written notice to Lender of any litigation or governmental
proceedings pending or threatened (in writing) against Borrower which, if
adversely determined, would have a Material Adverse Effect.

 

Section 2.11. Updates of Representations.
Borrower shall deliver to Lender within fifteen (15) Business Days of the
request of Lender an Officer’s Certificate updating all of the representations
and warranties contained in this Security Instrument and the other Loan
Documents and certifying that all of the representations and warranties
contained in this Security Instrument and the other Loan Documents, as updated
pursuant to such Officer’s Certificate, are true, accurate and complete as of
the date of such Officer’s Certificate or shall set forth the exceptions to
representations and/or warranties in reasonable detail, as applicable, and,
upon Lender’s request for further information with respect to such exceptions,
shall provide Lender such additional information as Lender may reasonably
request. Notwithstanding the foregoing, provided that no Event of Default has
occurred and is continuing, Borrower shall not be required to deliver the
foregoing Officer’s Certificate more than two (2) times during the term of the
Loan.

 

ARTICLE III:  INSURANCE AND
CASUALTY RESTORATION

 

Section 3.01. Insurance Coverage. Borrower
shall, at its expense, maintain the following insurance coverages with respect
to the Property during the term of this Security Instrument:

 

(a)           (i)            Insurance against loss
or damage by fire, casualty and other hazards included in an “all-risk”
coverage endorsement or its equivalent (which, in the case of insurance during
the time of any construction work being financed with the proceeds of the Loan
(“Construction”) shall be in “builder’s risk completed value
non-reporting form” together with rents, earnings and extra expense insurance
covering loss due to delay in completion of the Improvements), with such
endorsements as Lender may from time to time reasonably require and which are
customarily required by Institutional Lenders of similar properties similarly
situated, including, without limitation, if the Property constitutes a legal
non-conforming use, an ordinance of law coverage endorsement which contains “Demolition
Cost”, “Loss Due to Operation of Law” and “Increased Cost of Construction”
coverages, covering the Property in an amount not less

 

47

 

than the greater of (A) 100% of the insurable replacement value of the
Property (exclusive of the Premises and footings and foundations) and (B) such
other amount as is necessary to prevent any reduction in such policy by reason
of Lender or any other insured thereunder being deemed to be a co-insurer. Not
less frequently than once every three (3) years, Borrower, at its option, shall
either (A) have the Appraisal updated or obtain a new appraisal of the
Property, (B) have a valuation of the Property made by or for its insurance
carrier conducted by an appraiser experienced in valuing properties of similar
type to that of the Property which are in the geographical area in which the
Property is located or (C) provide such other evidence as will, in Lender’s
reasonable judgment, enable Lender to determine whether there shall have been
an increase in the insurable value of the Property, and Borrower shall deliver
such updated Appraisal, new appraisal, insurance valuation or other evidence
acceptable to Lender, as the case may be, and, if such updated Appraisal, new
appraisal, insurance valuation, or other evidence acceptable to Lender reflects
an increase in the insurable value of the Property, the amount of insurance
required hereunder shall be increased accordingly and Borrower shall deliver
evidence satisfactory to Lender that such policy has been so increased.

 

(ii)           Commercial general liability insurance
against claims for personal and bodily injury and/or death to one or more
persons or property damage, occurring on, in or about the Property (including
the adjoining streets, sidewalks and passageways therein) in such amounts as
Lender may from time to time reasonably require (but in no event shall Lender’s
requirements be increased more frequently than once during each twelve (12)
month period) and which are customarily required by Institutional Lenders for
similar properties similarly situated, but not less than $1,000,000 per
occurrence and $2,000,000 general aggregate on a per location basis and, in
addition thereto, not less than $75,000,000 excess and/or umbrella liability
insurance shall be maintained for any and all claims.

 

(iii)          Business interruption, rent loss or other
similar insurance on an actual loss sustained basis (A) with loss payable to
Lender, (B) covering all risks required to be covered by the insurance provided
for in Section 3.01(a)(i) hereof and (C) in an amount not less than 100% of the
projected fixed or base rent plus percentage rent for the succeeding twelve
(12) month period based on an occupancy rate of 100%. Such insurance coverage
shall provide a six (6) month extended period of indemnification. The amount of
such insurance shall be determined upon the execution of this Security
Instrument, and not more frequently than once each calendar year thereafter
based on Borrower’s reasonable estimate of projected fixed or base rent plus
percentage rent, from the Property for the next succeeding twelve (12) months. In
the event the Property shall be damaged or destroyed, Borrower shall and hereby
does assign to Lender all payment of claims under the policies of such
insurance, and all amounts payable thereunder, and all net amounts, shall be
collected by Lender under such policies and shall be applied in accordance with
this Security Instrument; provided, however, that nothing herein contained
shall be deemed to relieve Borrower of its obligations to timely pay all
amounts due under the Loan Documents.

 

48

 

(iv)          War risk insurance when such insurance is
obtainable from the United States of America or any agency or instrumentality
thereof at reasonable rates (for the maximum amount of insurance obtainable)
and if requested by Lender, and such insurance is then customarily required by
Institutional Lenders of similar properties similarly situated.

 

(v)           Insurance against loss
or damages from (A) leakage of sprinkler systems and (B) explosion of steam
boilers, air conditioning equipment, pressure vessels or similar apparatus now
or hereafter installed at the Property, in such amounts as Lender may from time
to time reasonably require and which are then customarily required by
Institutional Lenders of similar properties similarly situated.

 

(vi)          Flood insurance in an amount equal to the
full insurable value of the Property or the maximum amount available, whichever
is less, if the Improvements are located in an area designated by the Secretary
of Housing and Urban Development as being “an area of special flood hazard”
under the National Flood Insurance Program (i.e., having a one percent
or greater chance of flooding), and if flood insurance is available under the
National Flood Insurance Act.

 

(vii)         Worker’s compensation insurance or other
similar insurance which may be required by Governmental Authorities or Legal
Requirements.

 

(viii)        Insurance against loss resulting from mold,
spores or fungus on or about the Premises, to the extent available at a
commercially reasonable cost.

 

(ix)           At all times during Construction, contractor’s
liability insurance to a limit of not less than $25,000,000 on a per occurrence
basis covering each contractor’s construction operation at the Premises.

 

(x)            (A)          During
any period of the term of the Loan that the Terrorism Risk Insurance Act of
2002 (“TRIA”) is in effect, if “acts of terrorism” or other similar acts
or events are hereafter excluded from Borrower’s comprehensive all risk
insurance policy (including business interruption insurance coverage), Borrower
shall obtain an endorsement to such policy, or a separate policy, insuring
against all “certified acts of terrorism” as defined by TRIA and “fire
following”, each in an amount equal to one hundred percent (100%) of the “Full
Replacement Cost,” which for purposes of this Security Instrument shall mean
actual replacement value (exclusive of the Premises, footings and foundations)
with a waiver of depreciation; and

 

(B)           during
any period of the term of the Loan that TRIA is not in effect, if “acts of
terrorism” or other similar acts or events or “fire following” are hereafter
excluded from Borrower’s comprehensive all risk insurance policy or business
interruption insurance coverage, Borrower shall obtain an endorsement to such
policy, or a separate policy, 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

 

49

 

total insurable
value plus required business interruption coverage, and in no event shall
Borrower be required to furnish insurance for losses resulting from “acts of
terrorism” and “fire following” for a cost in excess of 125% of the prior year’s
premium for the insurance required pursuant to Section 3.01(a)(i) and Section
3.01(a)(iii) less the component cost thereof which related to “acts of
terrorism”); provided, however, Borrower shall not be required to carry
insurance of the type set forth in this clause (x)(B) if Institutional Lenders
are not then customarily requiring such insurance for loans similar in size to
the Loan with respect to similar properties similarly situated which are
collateral for loans which are included in commercial mortgage securitizations,
as determined by Lender in its reasonable discretion.

 

(xi)           Such other insurance as may from time to
time be required by Lender and which is then customarily required by
Institutional Lenders for similar properties similarly situated, against other
insurable hazards, including, but not limited to, malicious mischief,
vandalism, sinkhole and mine subsidence, windstorm and/or earthquake, due
regard to be given to the size and type of the Premises, Improvements, Fixtures
and Equipment and their location, construction and use.

 

(xii)          If Borrower, any of its Affiliates or Manager
holds a liquor license for the Premises, liquor liability insurance in the
amount of no less than $10,000,000.

 

(xiii)         Automobile liability insurance covering owned,
hired and not owned vehicles in an amount of not less than $1,000,000 per
accident.

 

(b)           Borrower shall cause any Manager of the
Property to maintain fidelity insurance in an amount equal to or greater than
$1,000,000 or such lesser amount as Lender shall approve.

 

Section 3.02. Policy Terms. (a) All insurance required by this Article III shall be in
the form (other than with respect to Sections 3.01(a)(vi) and (vii) above when
insurance in those two sub-sections is placed with a governmental agency or
instrumentality on such agency’s forms) and amount and with deductibles as,
from time to time, shall be reasonably acceptable to Lender, under valid and
enforceable policies issued by financially responsible insurers authorized to
do business in the State where the Property is located, with a general
policyholder’s service rating of not less than A- and a financial rating of not
less than VIII as rated in the most currently available Best’s Insurance
Reports (or the equivalent, if such rating system shall hereafter be altered or
replaced) and shall have a claims paying ability rating and/or financial
strength rating, as applicable, of not less than “A” (or its equivalent), or
such lower claims paying ability rating and/or financial strength rating, as
applicable, as Lender shall, in its sole and absolute discretion, consent to,
from a Rating Agency (one of which, after a Securitization in which Standard
& Poor’s rates any securities issued in connection with such
Securitization, shall be Standard & Poor’s), but as to such rating from a
Rating Agency for any earthquake or flood coverage, such rating may be less
than “A” (or its equivalent) provided that such rating is reasonably acceptable
to Lender. Originals or certified copies of all insurance policies shall be
delivered to and held by Lender. All such policies (except policies for worker’s
compensation) shall name Lender, its successors and/or assigns as an additional
named insured, shall provide for loss payable to

 

50

 

Lender (other than liability policies), its
successors and/or assigns and shall contain (or have attached):  (i) standard “non-contributory mortgagee”
endorsement or its equivalent relating, inter  alia, to recovery
by Lender notwithstanding the negligent or willful acts or omissions of
Borrower; (ii) a waiver of subrogation endorsement as to Lender; (iii) an
endorsement indicating that neither Lender nor Borrower shall be or be deemed
to be a co-insurer with respect to any casualty risk insured by such policies
and shall provide for a deductible per loss of an amount not more than the
lesser of (x) $100,000 and (y) five percent (5%) of the Adjusted Net Cash Flow
(other than for earthquake coverage, which may be up to 5% of the insured
value), and (iv) a provision that such policies shall not be canceled,
terminated, denied renewal or amended to materially reduce the scope or limits
of coverage, without at least thirty (30) days’ prior written notice to Lender
in each instance. Not less than ten (10) days prior to the expiration dates of
the insurance policies obtained pursuant to this Security Instrument, or as
soon as available, but in no event later than such date of expiration,
originals or certified copies of renewals of such policies (or certificates
evidencing such renewals) bearing notations evidencing the payment of premiums
or accompanied by other reasonable evidence of such payment (which premiums
shall not be paid by Borrower through or by any financing arrangement which
would entitle an insurer to terminate a policy) shall be delivered by Borrower
to Lender. Borrower shall not carry separate insurance, concurrent in kind or
form or contributing in the event of loss, with any insurance required under
this Article III.

 

(b)           If Borrower fails to maintain and deliver to
Lender the original policies or certificates of insurance required by this
Security Instrument, Lender may, at its option, procure such insurance, and
Borrower shall pay or, as the case may be, reimburse Lender for, all premiums
thereon promptly, upon demand by Lender, with interest thereon at the Default
Rate from the date paid by Lender to the date of repayment and such sum shall
constitute a part of the Debt.

 

(c)           Borrower shall notify Lender of the renewal
premium of each insurance policy and, if an Event of Default exists, Lender
shall be entitled to pay such amount on behalf of Borrower from the Basic
Carrying Costs Escrow Account.

 

(d)           The insurance required by this Security
Instrument may, at the option of Borrower, be effected by blanket and/or
umbrella policies issued to Borrower covering the Property provided that, in
each case, the policies otherwise comply with the provisions of this Security
Instrument and allocate to the Property, from time to time (but in no event
less than once a year), the coverage specified by this Security Instrument,
without possibility of reduction or coinsurance by reason of, or damage to, any
other property (real or personal) named therein. If the insurance required by
this Security Instrument shall be effected by any such blanket or umbrella
policies, Borrower shall furnish to Lender original policies or certified
copies thereof, or an original certificate of insurance together with
reasonable access to the original of such policy to review such policy’s
coverage of the Property, with schedules attached thereto showing the amount of
the insurance provided under such policies applicable to the Property.

 

Section 3.03. Assignment of Policies. (a)  Borrower hereby
assigns to Lender the proceeds of all insurance (other than worker’s
compensation and liability insurance) obtained pursuant to this Security
Instrument, all of which proceeds shall be payable to Lender as

 

51

 

collateral and further security for the
payment of the Debt and the performance of Borrower’s obligations hereunder and
under the other Loan Documents, and Borrower hereby authorizes and directs the
issuer of any such insurance to make payment of such proceeds directly to
Lender. Except as otherwise expressly provided in Section 3.04 or elsewhere in
this Article III, Lender shall have the option, in its discretion, and without
regard to the adequacy of its security, to apply all or any part of the
proceeds it may receive pursuant to this Article in such manner as Lender may
elect to any one or more of the following: 
(i) the payment of the Debt, whether or not then due, in any proportion
or priority as Lender, in its discretion, may elect, (ii) the repair or
restoration of the Property, (iii) the cure of any Event of Default or (iv) the
reimbursement of the costs and expenses of Lender incurred pursuant to the
terms hereof in connection with the recovery of the Insurance Proceeds. Nothing
herein contained shall be deemed to excuse Borrower from repairing or maintaining
the Property as provided in this Security Instrument or restoring all damage or
destruction to the Property, regardless of the sufficiency of the Insurance
Proceeds, and the application or release by Lender of any Insurance Proceeds
shall not cure or waive any Default or notice of Default.

 

(b)           In the event of the foreclosure of this
Security Instrument or any other transfer of title or assignment of all or any
part of the Property in extinguishment, in whole or in part, of the Debt, all
right, title and interest of Borrower in and to all policies of insurance
required by this Security Instrument shall inure to the benefit of the
successor in interest to Borrower or the purchaser of the Property. If, prior
to the receipt by Lender of any proceeds, the Property or any portion thereof
shall have been sold on foreclosure of this Security Instrument or by deed in
lieu thereof or otherwise as a result of the exercise of Lender’s remedies
hereunder, or any claim under such insurance policy arising during the term of
this Security Instrument is not paid until after the extinguishment of the
Debt, and Lender shall not have received the entire amount of the Debt
outstanding at the time of such extinguishment, whether or not a deficiency
judgment on this Security Instrument shall have been sought or recovered or
denied, then the proceeds of any such insurance, to the extent of the amount of
the Debt not so received, shall be paid to and be the property of Lender,
together with interest thereon at the Default Rate until received, and the
reasonable attorney’s fees, costs and disbursements incurred by Lender in
connection with the collection of the proceeds shall be paid to Lender and
Borrower hereby assigns, transfers and sets over to Lender all of Borrower’s right,
title and interest in and to such proceeds. Notwithstanding any provisions of
this Security Instrument to the contrary, Lender shall not be deemed to be a
trustee or other fiduciary with respect to its receipt of any such proceeds,
which may be commingled with any other monies of Lender; provided, however,
that Lender shall use such proceeds for the purposes and in the manner
permitted by this Security Instrument. Any proceeds deposited with Lender shall
be held by Lender in an interest-bearing account, but Lender makes no
representation or warranty as to the rate or amount of interest, if any, which
may accrue on such deposit and shall have no liability in connection therewith.
Interest accrued, if any, on the proceeds shall be deemed to constitute a part
of the proceeds for purposes of this Security Instrument. The provisions of
this Section 3.03(b) shall survive the termination of this Security Instrument
by foreclosure, deed in lieu thereof or otherwise as a consequence of the
exercise of the rights and remedies of Lender hereunder after an Event of
Default.

 

Section 3.04. Casualty Restoration. (a)   (i)  In the event of any damage to or destruction
of the Property, Borrower shall give prompt written notice to Lender (which
notice

 

52

 

shall set forth Borrower’s good faith
estimate of the cost of repairing or restoring such damage or destruction, or
if Borrower cannot reasonably estimate the anticipated cost of restoration,
Borrower shall nonetheless give Lender prompt notice of the occurrence of such
damage or destruction, and will diligently proceed to obtain estimates to
enable Borrower to quantify the anticipated cost and time required for such
restoration, whereupon Borrower shall promptly notify Lender of such good faith
estimate) and, provided that restoration does not violate any Legal
Requirements, Borrower shall promptly commence and diligently prosecute to
completion the repair, restoration or rebuilding of the Property so damaged or
destroyed to a condition such that the Property shall be at least equal in
value to that immediately prior to the damage to the extent practicable, in
compliance with all Legal Requirements and the provisions of all Leases, and in
accordance with Section 3.04(b) below. Such repair, restoration or rebuilding
of the Property is sometimes hereinafter collectively referred to as the “Work”.

 

(ii)           Borrower shall not adjust, compromise or
settle any claim for Insurance Proceeds without the prior written consent of
Lender, which shall not be unreasonably withheld or delayed, and Lender shall
have the right, at Borrower’s sole cost and expense, to participate in any
settlement or adjustment of Insurance Proceeds; provided, however, that, except
during the continuance of an Event of Default, Lender’s consent shall not be
required with respect to the adjustment, compromising or settlement of any
claim for Insurance Proceeds in an amount less than $1,000,000.

 

(iii)          Notwithstanding anything contained herein,
subject to Section 3.04(a)(iv), Lender shall apply any Insurance Proceeds which
it may receive towards the Work in accordance with Section 3.04(b) and the
other applicable sections of this Article III.

 

(iv)          If (A) an Event of Default exists, (B) Lender
is not reasonably satisfied that the Debt Service Coverage, after substantial
completion of the Work, will be at least equal to the Required Debt Service
Coverage, (C) more than thirty percent (30%) of the reasonably estimated fair
market value of the Property is damaged or destroyed, (D) Lender is not
reasonably satisfied that the Work can be completed six (6) months prior to
Maturity or (E) Lender is not reasonably satisfied that the Work can be
completed prior to the expiration of the insurance required pursuant to Section
3.01(a)(iii) (each, a “Substantial Casualty”), Lender shall have the
option, in its sole discretion, to apply any Insurance Proceeds it may receive
pursuant to this Security Instrument (less any cost to Lender of recovering and
paying out such proceeds incurred pursuant to the terms hereof and not
otherwise reimbursed to Lender, including, without limitation, reasonable
attorneys’ fees and expenses) to the payment of the Debt, without any
prepayment fee or charge of any kind, or to allow such proceeds to be used for
the Work pursuant to the terms and subject to the conditions of Section 3.04(b)
hereof and the other applicable sections of this Article III. If Lender elects
to apply any Insurance Proceeds it may receive pursuant to this Security
Instrument to the payment of the Debt, Borrower may prepay the balance of the
Debt without any prepayment fee or charge of any kind.

 

(v)           In the event that
Lender elects or is obligated hereunder to allow Insurance Proceeds to be used
for the Work, any excess proceeds remaining after completion of

 

53

 

such Work shall be applied to the payment of the Debt without any
prepayment fee or charge of any kind.

 

(b)           If any Condemnation Proceeds in accordance
with Section 6.01(a), or any Insurance Proceeds in accordance with Section
3.04(a), are to be applied to the repair, restoration or rebuilding of the
Property, then such proceeds shall be deposited into a segregated
interest-bearing bank account at the Bank, which shall be an Eligible Account,
held by Lender and shall be paid out from time to time to Borrower as the Work
progresses (less any cost to Lender of recovering and paying out such proceeds,
including, without limitation, reasonable attorneys’ fees and costs allocable
to inspecting the Work and the plans and specifications therefor), subject to
Section 5.13 hereof and to all of the following conditions:

 

(i)            An Independent
architect or engineer selected by Borrower and reasonably acceptable to Lender
(an “Architect” or “Engineer”) or a Person otherwise reasonably
acceptable to Lender, shall have delivered to Lender a certificate estimating
the cost of completing the Work, and, if the amount set forth therein is more
than the sum of the amount of Insurance Proceeds then being held by Lender in
connection with a casualty and amounts agreed to be paid as part of a final
settlement under the insurance policy upon or before completion of the Work,
Borrower shall have delivered to Lender (A) cash collateral in an amount equal
to such excess, (B) an unconditional, irrevocable, clean sight draft letter of
credit, in form, substance and issued by a bank reasonably acceptable to
Lender, in the amount of such excess and draws on such letter of credit shall
be made by Lender to make payments pursuant to this Article III following
exhaustion of the Insurance Proceeds therefor or (C) a completion bond in form,
substance and issued by a surety company reasonably acceptable to Lender.

 

(ii)           If the cost of the Work is reasonably
estimated by an Architect or Engineer in a certification reasonably acceptable
to Lender to be equal to or exceed five percent (5%) of the Loan Amount, such
Work shall be performed under the supervision of an Architect or Engineer, it
being understood that the plans and specifications with respect thereto shall
provide for Work so that, upon completion thereof, the Property shall be at
least equal in replacement value and general utility to the Property prior to
the damage or destruction.

 

(iii)          Each request for payment shall be made on not
less than ten (10) days’ prior notice to Lender and shall be accompanied by a
certificate of an Architect or Engineer, or, if the Work is not required to be
supervised by an Architect or Engineer, by an Officer’s Certificate stating (A)
that payment is for Work completed in compliance with the plans and
specifications, if required under clause (ii) above, (B) that the sum requested
is required to reimburse Borrower for payments by Borrower to date, or is due
to the contractors, subcontractors, materialmen, laborers, engineers,
architects or other Persons rendering services or materials for the Work
(giving a brief description of such services and materials), and that when
added to all sums previously paid out by Lender does not exceed the value of
the Work done to the date of such certificate, (C) if the sum requested is to
cover payment relating to repair and restoration of personal property required
or relating to the Property, that title to the personal property items covered
by

 

54

 

the request for payment is vested in Borrower (unless Borrower is
lessee of such personal property), and (D) that the Insurance Proceeds and
other amounts deposited by Borrower and held by Lender after such payment is
more than the estimated remaining cost to complete such Work; provided,
however, that if such certificate is given by an Architect or Engineer, such
Architect or Engineer shall certify as to clause (A) above, and such Officer’s
Certificate shall certify as to the remaining clauses above, and provided,
further, that Lender shall not be obligated to disburse such funds if Lender
determines, in Lender’s reasonable discretion, that Borrower shall not be in
compliance with this Section 3.04(b). Additionally, each request for payment
shall contain a statement signed by Borrower stating that the requested payment
is for Work satisfactorily done to date, except as otherwise set forth in such
statement.

 

(iv)          Each request for payment shall be accompanied
by waivers of lien, in customary form and substance, covering that part of the
Work for which payment or reimbursement is being requested and, if required by
Lender, a search prepared by a title company or licensed abstractor, or by
other evidence reasonably satisfactory to Lender that there has not been filed
with respect to the Property any mechanic’s or other lien or instrument for
retention of title relating to any part of the Work not discharged of record. Additionally,
as to any personal property covered by the request for payment, Lender shall be
furnished with evidence of Borrower having incurred a payment obligation
therefor and such further evidence reasonably satisfactory to assure Lender
that UCC filings therefor provide a valid first lien on the personal property
in favor of Lender.

 

(v)           Lender shall have the
right to inspect the Work at all reasonable times upon reasonable prior notice
and may condition any disbursement of Insurance Proceeds upon satisfactory
compliance by Borrower with the provisions hereof. Neither the approval by
Lender of any required plans and specifications for the Work nor the inspection
by Lender of the Work shall make Lender responsible for the preparation of such
plans and specifications, or the compliance of such plans and specifications of
the Work, with any applicable law, regulation, ordinance, covenant or
agreement.

 

(vi)          Insurance Proceeds shall not be disbursed
more frequently than once every thirty (30) days, unless otherwise agreed to by
Lender.

 

(vii)         Until such time as the Work has been
substantially completed, Lender shall not be obligated to disburse to Borrower
an amount (the “Retention Amount”) up to (A) until fifty percent (50%)
of the Work has been completed (as reasonably determined by Lender), ten
percent (10%) of the cost of the Work and (B) after fifty percent (50%) of the
Work has been completed (as reasonably determined by Lender), five percent (5%)
of the cost of the Work. Upon substantial completion of the Work, Borrower
shall send notice thereof to Lender and, subject to the conditions of Section
3.04(b)(i)-(iv), Lender shall disburse one-half of the Retention Amount to
Borrower; provided, however, that the remaining one-half of the Retention
Amount shall be disbursed to Borrower when Lender shall have received copies of
any and all final certificates of occupancy or other certificates, licenses and
permits required for the ownership, occupancy and operation of

 

55

 

the Property in accordance with all Legal Requirements. Borrower hereby
covenants to diligently seek to obtain any such certificates, licenses and
permits.

 

(viii)        Upon failure on the part of Borrower promptly
to commence the Work or to proceed diligently and continuously to completion of
the Work, subject to Force Majeure, not to exceed sixty (60) days, which
failure shall continue after notice for thirty (30) days, Lender may apply any
Insurance Proceeds or Condemnation Proceeds it then or thereafter holds to the
payment of the Debt in accordance with the provisions of the Note; provided,
however, that Lender shall be entitled to apply at any time all or any portion
of the Insurance Proceeds or Condemnation Proceeds it then holds to the extent
necessary to cure any Event of Default.

 

(c)           If Borrower (i) within ninety (90) days
after the occurrence of any damage to the Property or any portion thereof (or
such shorter period as may be required under any Major Space Lease) shall fail
to submit to Lender for approval plans and specifications (if required pursuant
to Section 3.04(b)(ii) hereof) for the Work (approved by the Architect and (if
applicable) by all Governmental Authorities whose approval is required), (ii)
after any such plans and specifications are approved by all Governmental
Authorities, the Architect and Lender, shall fail to promptly commence such
Work, subject to Force Majeure not to exceed sixty (60) days, or (iii) shall
fail to diligently prosecute such Work to completion, subject to Force Majeure
not to exceed sixty (60) days, then, in addition to all other rights available
hereunder, at law or in equity, Lender, or any receiver of the Property or any
portion thereof, upon ten (10) Business Days’ prior notice to Borrower (except
in the event of emergency in which case no notice shall be required), may (but
shall have no obligation to) perform or cause to be performed such Work, and
may take such other steps as it reasonably deems advisable. Borrower hereby
waives, for Borrower, any claim, other than for gross negligence or willful
misconduct, against Lender and any receiver arising out of any act or omission
of Lender or such receiver pursuant hereto, and Lender may apply all or any
portion of the Insurance Proceeds (without the need to fulfill any other
requirements of this Section 3.04) to reimburse Lender and such receiver for
all costs not reimbursed to Lender or such receiver within ten (10) Business
Days of demand, together with interest thereon at the Default Rate from the
date such amounts are advanced until the same are paid to Lender or the
receiver.

 

(d)           Borrower hereby irrevocably appoints Lender
as its attorney-in-fact, coupled with an interest, to collect and receive any
Insurance Proceeds paid with respect to any portion of the Property or the
insurance policies required to be maintained hereunder, and to endorse any
checks, drafts or other instruments representing any Insurance Proceeds whether
payable by reason of loss thereunder or otherwise.

 

(e)           Notwithstanding the foregoing provisions of
this Section 3.04, upon the occurrence of any damage to or destruction of the
Property, provided that such damage or destruction is not a Substantial
Casualty, if in Lender’s reasonable judgment the cost of repair of or
restoration to the Property required as a result of any damage or destruction
is less than $250,000 in the aggregate and the Work can be completed in less
than six (6) months (but in no event beyond the date which is six (6) months
prior to the Maturity Date), then Lender, upon request by Borrower, shall
permit Borrower to apply for and receive the Insurance Proceeds

 

56

 

directly from
the insurer (and Lender shall advise the insurer to pay over such Insurance
Proceeds directly to Borrower), to the extent required to pay for any such
Work, with any excess thereof to be promptly paid by Borrower to Lender to be
applied against the Debt, without any prepayment fee or charge of any kind.

 

Section 3.05. Compliance with Insurance
Requirements. Borrower promptly shall comply in all material respects with,
and shall cause the Property to comply in all material respects with, all
Insurance Requirements, even if such compliance requires structural changes or
improvements or would result in interference with the use or enjoyment of the Property
or any portion thereof, provided Borrower shall have a right to contest in good
faith and with diligence such Insurance Requirements provided (a) no Event of
Default shall exist during such contest and such contest shall not subject the
Property or any portion thereof to any lien or affect the priority of the lien
of this Security Instrument, (b) failure to comply with such Insurance
Requirements will not subject Lender or any of its agents, employees, officers
or directors to any civil or criminal liability, (c) such contest will not
cause any reduction in insurance coverage, (d) such contest shall not affect
the ownership, use or occupancy of the Property, (e) the Property or any part
thereof or any interest therein shall not be in any imminent danger of being
sold, forfeited or lost by reason of such contest by Borrower, (f) Borrower has
given Lender prompt notice of such contest and, upon request by Lender from
time to time, notice of the status of such contest by Borrower and/or
information of the continuing satisfaction of the conditions set forth in
clauses (a) through (e) of this Section 3.05, (g) upon a final determination of
such contest, Borrower shall promptly comply with the requirements thereof, and
(h) prior to and during such contest, if reasonably required by Lender,
Borrower shall furnish to Lender security satisfactory to Lender, in its
reasonable discretion, against loss or injury by reason of such contest or the
non-compliance with such Insurance Requirement (and if such security is cash,
Lender shall deposit the same in an interest-bearing account and interest
accrued thereon, if any, shall be deemed to constitute a part of such security
for purposes of this Security Instrument, but Lender (i) makes no
representation or warranty as to the rate or amount of interest, if any, which
may accrue thereon and shall have no liability in connection therewith and (ii)
shall not be deemed to be a trustee or fiduciary with respect to its receipt of
any such security and any such security may be commingled with other monies of
Lender). If Borrower shall use the Property or any portion thereof in any
manner which could permit the insurer to cancel any insurance required to be
provided hereunder, Borrower immediately shall obtain a substitute policy which
shall satisfy the requirements of this Security Instrument and which shall be
effective on or prior to the date on which any such other insurance policy
shall be canceled. Borrower shall not by any action or omission invalidate any
insurance policy required to be carried hereunder unless such policy is
replaced as aforesaid, or materially increase the premiums on any such policy
above the normal premium charged for such policy. Borrower shall cooperate with
Lender in obtaining for Lender the benefits of any Insurance Proceeds lawfully
or equitably payable to Lender in connection with the transaction contemplated
hereby.

 

Section 3.06. Event of Default During
Restoration. Notwithstanding anything to the contrary contained in this
Security Instrument including, without limitation, the provisions of this
Article III, if, at any time during any Work, or at any time that Lender is
holding or is entitled to receive any Insurance Proceeds pursuant to this
Security Instrument, a Default exists and is continuing (whether or not it
constitutes an Event of Default), Lender shall then have no

 

57

 

obligation to disburse such proceeds for Work
and Lender shall have the right and option, to be exercised in its sole and absolute
discretion and election, with respect to the Insurance Proceeds, either to
retain and apply such proceeds in reimbursement for the actual costs, fees and
expenses incurred by Lender in accordance with the terms hereof in connection
with the adjustment of the loss and, if such Default becomes an Event of
Default, any balance toward payment of the Debt (without any prepayment fee or
charge of any kind) in such priority and proportions as Lender, in its sole
discretion, shall deem proper, or towards the Work, upon such terms and
conditions as Lender shall determine, or to cure such Default, or to any one or
more of the foregoing as Lender, in its sole and absolute discretion, may
determine. If Lender shall receive and retain such Insurance Proceeds, the lien
of this Security Instrument shall be reduced only by the amount thereof
received, after reimbursement to Lender of expenses of collection, and actually
applied by Lender in reduction of the principal sum payable under the Note in
accordance with the Note.

 

Section 3.07. Application of Proceeds to
Debt Reduction. (a) No damage to the Property,
or any part thereof, by fire or other casualty whatsoever, whether such damage
be partial or total, shall relieve Borrower from its liability to pay in full
the Debt and to perform its obligations under this Security Instrument and the
other Loan Documents.

 

(b)           If any Insurance Proceeds are applied to
reduce the Debt, Lender shall apply the same in accordance with the provisions
of the Note.

 

Section 3.08. Investment of Loss Proceeds. Notwithstanding
anything contained in this Security Instrument, including, without limitation,
this Article III, Section 5.03 or Article VI, in the event that Loss Proceeds
are to be deposited into an interest-bearing account pursuant to the terms
hereof, Lender shall, but only after receiving a written request therefor from
Borrower, which request must be given after the casualty or Taking with respect
to which the Loss Proceeds relate, invest, and reinvest Loss Proceeds from time
to time in Permitted Investments as instructed by Borrower (which instruction
may be made no more than one time per month), provided that (a) if
Borrower fails to so instruct Lender, Lender may (but shall not be obliged to)
invest or direct the Bank to invest and reinvest such balance in Permitted
Investments as Lender shall determine in its sole discretion and Borrower shall
not be entitled to any earnings thereon in excess of that which would be earned
if such sums were deposited into an interest-bearing account, (b) the
maturities of the Permitted Investments on Loss Proceeds shall, to the extent
such dates are ascertainable, be selected and coordinated to become due not
later than the day before any disbursements thereof must be made, (c) all such
Permitted Investments shall be held in the name and be under the sole dominion
and control of Lender, as secured party, and (d) no Permitted Investment shall
be made unless Lender shall retain a perfected first priority lien in such
Permitted Investment securing the Debt and all filings and other actions
necessary to ensure the validity, perfection, and priority of such lien have
been taken. All Loss Proceeds that are invested in a Permitted Investment are
deemed to be held in the Central Account for all purposes of this Security
Instrument and the other Loan Documents. Lender shall not have any liability
for any loss in investments of funds that are invested in Permitted Investments
whether Borrower or Lender selected such Permitted Investment in accordance
herewith and no such loss shall affect Borrower’s obligation to fund, or
liability for funding, any sums required to be invested hereunder. Borrower
agrees that Borrower shall include all such earnings on Loss Proceeds as income
of Borrower (and, if Borrower is a partnership, limited liability company or
other pass-through

 

58

 

entity, the partners, members or
beneficiaries of Borrower, as the case may be) for federal and applicable state
and local tax purposes.

 

ARTICLE IV:  IMPOSITIONS

 

Section 4.01. Payment of Impositions,
Utilities and Taxes, etc. (a)  Borrower shall pay or cause to be paid
all Impositions at least five (5) days prior to the date upon which any fine,
penalty, interest or cost for nonpayment is imposed, and furnish to Lender,
upon request, receipted bills of the appropriate taxing authority or other
documentation reasonably satisfactory to Lender evidencing the payment thereof.
If Borrower shall fail to pay any Imposition in accordance with this Section
and is not contesting or causing a contesting of such Imposition in accordance
with Section 4.04 hereof, or if there are insufficient funds in the Basic
Carrying Costs Escrow Account to pay any Imposition, Lender shall have the
right, but shall not be obligated, to pay that Imposition, and Borrower shall
repay to Lender, on demand, any amount paid by Lender, with interest thereon at
the Default Rate from the date of the advance thereof to the date of repayment,
and such amount shall constitute a portion of the Debt secured by this Security
Instrument.

 

(b)           Borrower shall, prior to the date upon which
any fine, penalty, interest or cost for the nonpayment is imposed, pay or cause
to be paid all charges for electricity, power, gas, water and other services
and utilities in connection with the Property which are not solely the
obligations of tenants under Space Leases, and shall, upon request, deliver to
Lender receipts or other documentation reasonably satisfactory to Lender
evidencing payment thereof. If Borrower shall fail to pay any amount required
to be paid by Borrower pursuant to this Section 4.01 and is not contesting such
charges in accordance with Section 4.04 hereof, Lender shall have the right,
but shall not be obligated, to pay that amount, and Borrower will repay to
Lender, on demand, any amount paid by Lender with interest thereon at the
Default Rate from the date of the advance thereof to the date of repayment, and
such amount shall constitute a portion of the Debt secured by this Security Instrument.

 

(c)           Borrower shall pay all taxes, charges,
filing, registration and recording fees, excises and levies imposed upon Lender
by reason of or in connection with its ownership of any Loan Document or any
other instrument related thereto, or resulting from the execution, delivery and
recording of, or the lien created by, or the obligation evidenced by, any of
them, other than income, franchise and other similar taxes imposed on Lender
and shall pay all corporate stamp taxes, if any, and other taxes required to be
paid on the Loan Documents. If Borrower shall fail to make any such payment
within ten (10) Business Days after written notice thereof from Lender, Lender
shall have the right, but shall not be obligated, to pay the amount due, and
Borrower shall reimburse Lender therefor, on demand, with interest thereon at
the Default Rate from the date of the advance thereof to the date of repayment,
and such amount shall constitute a portion of the Debt secured by this Security
Instrument.

 

Section 4.02. Deduction from Value. In
the event of the passage after the date of this Security Instrument of any
Legal Requirement deducting from the value of the Property for the purpose of
taxation any lien thereon or changing in any way the Legal Requirements now in

 

59

 

force for the taxation of this Security
Instrument and/or the Debt for federal, state or local purposes, or the manner
of the operation of any such taxes so as to adversely affect the interest of
Lender, or imposing any tax or other charge on any Loan Document, then Borrower
will pay such tax, with interest and penalties thereon, if any, within the
statutory period. In the event the payment of such tax or interest and
penalties by Borrower would be unlawful, or taxable to Lender or unenforceable
or provide the basis for a defense of usury, then in any such event, Lender
shall have the option, by written notice of not less than ninety (90) days, to
declare the Debt immediately due and payable, with no prepayment fee or charge
of any kind.

 

Section 4.03. No Joint Assessment. Borrower
shall not consent to or initiate the joint assessment of the Premises or the
Improvements (a) with any other real property constituting a separate tax lot
and Borrower represents and covenants that the Premises and the Improvements
are and shall remain a separate tax lot or (b) with any portion of the Property
which may be deemed to constitute personal property, or any other procedure
whereby the lien of any taxes which may be levied against such personal
property shall be assessed or levied or charged to the Property as a single
lien.

 

Section 4.04. Right to Contest. Borrower
shall have the right, after prior notice to Lender, at its sole expense, to
contest by appropriate legal proceedings diligently conducted in good faith,
without cost or expense to Lender or any of its agents, employees, officers or
directors, the validity, amount or application of any Imposition or any charge
described in Section 4.01(b), provided that (a) no Event of Default shall exist
during such proceedings and such contest shall not (unless Borrower shall
comply with clause (d) of this Section 4.04) subject the Property or any
portion thereof to any lien or affect the priority of the lien of this Security
Instrument, (b) failure to pay such Imposition or charge will not subject
Lender  or any of its agents,
employees, officers or directors to any civil or criminal liability, (c) the
contest suspends enforcement of the Imposition or charge (unless Borrower first
pays the Imposition or charge), (d) unless Borrower first pays the Imposition
or charge or the Basic Carrying Costs Escrow Account has or will have funds
sufficient to pay the same, plus any interest and penalties as may accrue in
connection therewith, if requested by Lender, Borrower shall, prior to and
during such contest, furnish to Lender security satisfactory to Lender, in its
reasonable discretion, against loss or injury by reason of such contest or the
non-payment of such Imposition or charge (and if such security is cash, Lender
shall deposit the same in an interest-bearing account and interest accrued
thereon, if any, shall be deemed to constitute a part of such security for
purposes of this Security Instrument, but Lender (i) makes no representation or
warranty as to the rate or amount of interest, if any, which may accrue thereon
and shall have no liability in connection therewith and (ii) shall not be
deemed to be a trustee or fiduciary with respect to its receipt of any such
security and any such security may be commingled with other monies of Lender),
(e) such contest shall not affect the ownership, use or occupancy of the
Property, (f) the Property or any part thereof or any interest therein shall
not be in any imminent danger of being sold, forfeited or lost by reason of
such contest by Borrower, (g) Borrower has given Lender notice of the
commencement of such contest and upon request by Lender, from time to time,
notice of the status of such contest by Borrower and/or confirmation of the continuing
satisfaction of clauses (a) through (f) of this Section 4.04, and (h) upon a
final determination of such contest, Borrower shall promptly comply with the
requirements thereof. Upon completion of any contest, Borrower shall
immediately pay the amount due, if any, and deliver to Lender proof of the
completion of the

 

60

 

contest and payment of the amount due, if
any, following which Lender shall return the security, if any, deposited with
Lender pursuant to clause (d) of this Section 4.04. Borrower shall not pay any
Imposition in installments unless permitted by applicable Legal Requirements,
and shall, upon the request of Lender, deliver copies of all notices and bills
relating to any Imposition or other charge covered by this Article IV to
Lender.

 

Section 4.05. No Credits on Account of the
Debt. Borrower will not claim or demand or be entitled to any credit or
credits on account of the Debt for any part of the Impositions assessed against
the Property or any part thereof and no deduction shall otherwise be made or
claimed from the taxable value of the Property, or any part thereof, by reason
of this Security Instrument or the Debt. In the event such claim, credit or
deduction shall be required by Legal Requirements, Lender shall have the
option, by written notice of not less than ninety (90) days, to declare the
Debt immediately due and payable, and Borrower hereby agrees to pay such
amounts not later than ninety (90) days after such notice, without any prepayment
fee or charge of any kind.

 

Section 4.06. Documentary Stamps. If,
at any time, the United States of America, any State or Commonwealth thereof or
any subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, this Security Instrument or any other Loan Document, or
impose any other tax or charges on the same, Borrower will pay the same, with
interest and penalties thereon, if any.

 

ARTICLE V:  CENTRAL CASH
MANAGEMENT

 

Section 5.01. Cash Flow. Borrower
hereby acknowledges and agrees that the Rents (which for the purposes of this
Section 5.01 shall not include security deposits from tenants under Leases held
by Borrower and not applied towards Rent) derived from the Property and (to the
extent required by Section 5.13) Loss Proceeds shall be utilized to fund the
Sub-Accounts to the extent required pursuant to the terms hereof. Borrower
shall cause Manager to collect all security deposits from tenants under valid
Space Leases, which shall be held by Manager, as agent for Borrower, or by
Borrower, in accordance with applicable law and the Space Leases. Borrower
shall cause all Rent which is due and payable to Borrower pursuant to the terms
of the Space Leases to be paid through automated clearing house funds (“ACH”)
or by Federal wire or by a check directly to the Rent Account. Borrower shall
give each tenant under a Lease an irrevocable direction in the form of Exhibit E attached hereto and made a part
hereof to deliver all rent payments made by tenants and other payments
constituting Rent directly to the Rent Account and shall deliver copies of such
letters to Lender within two (2) Business Days of the Closing Date. Notwithstanding
the foregoing, if any Rent is received by Borrower or Manager, then (a) such
amounts shall be held in trust for the benefit, and as the property, of Lender,
(b) such amounts shall not be commingled with any other funds or property of
Borrower or Manager and (c) Borrower or Manager shall deposit such amounts in
the Rent Account within two (2) Business Days of receipt or, provided no Event
of Default has occurred and is continuing, with respect to any Rents received
by Borrower or Manager in cash which relate to daily transient parking receipts
and which do not relate to parking receipts for Persons with month-to-month or
longer parking Leases, within ten (10) Business Days of receipt. Upon execution
of any Space Lease after the Closing Date, Borrower shall deliver to Lender a
copy of the irrevocable direction

 

61

 

letter referred to above, the receipt of
which has been acknowledged by the tenant under such Space Lease, or shall
include the direction in such Space Lease. Pursuant to the Rent Account
Agreement of even date herewith, the bank in which the Rent Account is located
has been instructed that (a) prior to receipt of notice from Lender (a “Sweep
Notice”) that an Event of Default has occurred, or after revocation by
Lender of a Sweep Notice and prior to the issuance of a subsequent Sweep
Notice, all funds deposited in the Rent Account shall be transferred to the
Borrower Account not less often than one time per week, and (b) from and after
the receipt of a Sweep Notice from Lender, all funds deposited in the Rent
Account shall be automatically transferred through ACH or by Federal wire to
the Central Account prior to 1:00 p.m. (New York City time) on each Business
Day until receipt by such bank of notice from Lender revoking the Sweep Notice.
Lender may elect, after consultation with Borrower, to change the financial
institution in which the Central Account shall be maintained; however,
Lender shall give Borrower and the bank in which the Rent Account is located
not fewer than ten (10) Business Days’ prior notice of such change. All fees
and charges of the bank(s) in which the Rent Account or the Central Account is
located shall be paid by Borrower.

 

Section 5.02. Establishment of Accounts.
Lender has established the Escrow Accounts and the Central Account in the name
of Lender as secured party and Borrower has established the Rent Account in the
joint names of Lender, as secured party, and Borrower. The Escrow Accounts, the
Rent Account and the Central Account shall be under the sole dominion and
control of Lender and funds held therein shall not constitute trust funds. Borrower
hereby irrevocably directs and authorizes Lender to withdraw funds from the
Central Account, the Rent Account and the Escrow Accounts, all in accordance
with the terms and conditions of this Security Instrument. Borrower shall have
no right of withdrawal in respect of the Central Account, the Rent Account or
the Escrow Accounts. Each transfer of funds to be made hereunder shall be made
only to the extent that funds are on deposit in the Central Account or the
affected Sub-Account or Escrow Account, and Lender shall have no responsibility
to make additional funds available in the event that funds on deposit are
insufficient. The Central Account shall contain the Basic Carrying Costs
Sub-Account, the Debt Service Payment Sub-Account and the Recurring Replacement
Reserve Sub-Account, each of which accounts shall be Eligible Accounts or
book-entry sub-accounts of an Eligible Account (each a “Sub-Account” and
collectively, the “Sub-Accounts”) to which certain funds shall be
allocated and from which disbursements shall be made pursuant to the terms of
this Security Instrument. Sums held in the Escrow Accounts may be commingled
with other monies held by Lender.

 

Section 5.03. Permitted Investments. Upon
the written request of Borrower, Lender shall direct the Bank to invest and
reinvest any balance in the Central Account and the Escrow Accounts from time
to time in Permitted Investments as instructed by Borrower (which instruction
may be made no more than one time per month), provided that (a) if
Borrower fails to so instruct Lender, Lender shall, or if an Event of Default
exists, may invest or direct the Bank to invest and reinvest such balance in
Permitted Investments as Lender shall determine in its sole discretion except
that if this clause (a) is applicable because Borrower has failed to so
instruct the Lender then the Permitted Investments into which such funds shall
be invested shall be limited to the Permitted Investments listed in
subparagraph (a) of the definition of “Permitted Investments”, (b) the
maturities of the Permitted Investments on deposit in the Central Account
shall, to the extent such dates are ascertainable, be selected and coordinated
to become due not

 

62

 

later than the day before any disbursements
from the applicable Sub-Accounts must be made, (c) all such Permitted
Investments shall be held in the name and be under the sole dominion and
control of Lender, as secured party, and (d) no Permitted Investment shall be
made unless Lender shall retain a perfected first priority lien in such
Permitted Investment securing the Debt and all filings and other actions
necessary to ensure the validity, perfection, and priority of such lien have
been taken. It is the intention of the parties hereto that the entire amounts
deposited in the Central Account and the Escrow Accounts (or as much thereof as
Lender may reasonably arrange to invest) shall at all times be invested in
Permitted Investments, and that the Central Account shall be a so-called “zero
balance” account. All funds in the Central Account that are invested in a
Permitted Investment are deemed to be held in the Central Account for all
purposes of this Security Instrument and the other Loan Documents. Lender shall
not have any liability for any loss in investments of funds in the Central
Account that are invested in Permitted Investments whether Borrower or Lender
selected such Permitted Investment in accordance herewith and no such loss
shall affect Borrower’s obligation to fund, or liability for funding, the
Central Account and each Sub-Account, as the case may be. Borrower agrees that
Borrower shall include all such earnings on the Central Account as income of
Borrower (and, if Borrower is a partnership, limited liability company or other
pass-through entity, the partners, members or beneficiaries of Borrower, as the
case may be) for federal and applicable state and local tax purposes.

 

Section 5.04. Servicing Fees. At the
option of Lender, the Loan may be serviced by a servicer (the “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Security Instrument to the Servicer. Borrower shall
pay all reasonable servicing fees of Servicer, if any, charged in connection
with any disbursement of funds from the Escrow Accounts pursuant to the
Servicer’s then standard conditions and rates.

 

Section 5.05. Monthly Funding of
Sub-Accounts and Escrow Accounts. (a) On or before each Payment Date during
the term of the Loan, commencing on the first (1st) Payment Date occurring
after the month in which the Loan is initially funded, Borrower shall pay, or
cause to be paid, to the Central Account all sums required to be deposited in
the Sub-Accounts pursuant to this Section 5.05(a) and all funds transferred or
deposited into the Central Account shall be allocated among the Sub-Accounts as
follows and in the following priority:

 

(i)            first,
to the Basic Carrying Costs Sub-Account, until an amount equal to the Basic
Carrying Costs Monthly Installment for the applicable Interest Accrual Period
has been allocated to the Basic Carrying Costs Sub-Account;

 

(ii)           second,
to the Debt Service Payment Sub-Account, until an amount equal to the Required
Debt Service Payment for the Payment Date occurring in such Interest Accrual
Period has been allocated to the Debt Service Payment Sub-Account; and

 

(iii)          third,
to the Recurring Replacement Reserve Sub-Account, until an amount equal to the
Recurring Replacement Reserve Monthly Installment for such Interest Accrual
Period has been allocated to the Recurring Replacement Reserve Sub-Account.

 

63

 

Provided that no Event of Default has
occurred and is continuing Lender agrees that in each Interest Accrual Period
any amounts deposited into or remaining in the Central Account after the
Sub-Accounts have been funded as set forth in this Section 5.05(a) with respect
to such Interest Accrual Period and any periods prior thereto, shall be
disbursed by Lender to Borrower on the Payment Date and on the third (3rd) day
(or, if such day is not a Business Day, the next succeeding Business Day) of
each month. The balance of the funds distributed to Borrower after payment of
all Operating Expenses by or on behalf of Borrower may be retained by Borrower.
After the occurrence, and during the continuance, of an Event of Default, no
funds held in the Central Account shall be distributed to, or withdrawn by,
Borrower, and Lender shall have the right to apply all or any portion of the
funds held in the Central Account or any Sub-Account or any Escrow Account to
the Debt in Lender’s sole discretion.

 

(b)           On
each Payment Date, Lender will direct the Bank in accordance with the
following:  (i) sums held in the Basic
Carrying Costs Sub-Account shall be transferred to the Basic Carrying Costs
Escrow Account, (ii) sums held in the Debt Service Payment Sub-Account,
together with any amounts deposited into the Central Account that are either
(x) Loss Proceeds that Lender has elected to apply to reduce the Debt in
accordance with the terms of Article III hereof or (y) excess Loss Proceeds
remaining after the completion of any restoration required hereunder, shall be
transferred to Lender to be applied towards the Required Debt Service Payment,
(iii) sums (if any) held in the Recurring Replacement Reserve Sub-Account shall
be transferred to the Recurring Replacement Reserve Escrow Account and (iv) the
excess, if any, to the Borrower Account.

 

Section 5.06. Payment of Basic Carrying
Costs. Borrower hereby agrees to pay all Basic Carrying Costs (without
regard to the amount of money in the Basic Carrying Costs Sub-Account or the
Basic Carrying Costs Escrow Account). At least ten (10) Business Days prior to
the due date of any Basic Carrying Costs, and not more frequently than once
each month with respect to Real Estate Taxes and once each month with respect
to insurance premiums, Borrower may notify Lender in writing and request that
Lender pay such Basic Carrying Costs on behalf of Borrower on or prior to the
due date thereof, and, provided that no Event of Default then exists and that
there are sufficient funds available in the Basic Carrying Costs Escrow
Account, Lender shall make such payments out of the Basic Carrying Costs Escrow
Account before same shall be delinquent. Together with each such request,
Borrower shall furnish Lender with bills and all other documents necessary, as
reasonably determined by Lender, for the payment of the Basic Carrying Costs
which are the subject of such request. Borrower’s obligation to pay (or cause
Lender to pay) Basic Carrying Costs pursuant to this Security Instrument shall
include, to the extent permitted by applicable law, Real Estate Taxes resulting
from future changes in law which impose upon Lender an obligation to pay any
such Real Estate Taxes or which otherwise adversely affect Lender’s interests.

 

Provided that no Event of Default exists, all
funds deposited into the Basic Carrying Costs Escrow Account shall be held by
Lender pursuant to the provisions of this Security Instrument and shall be
applied in payment of Basic Carrying Costs in accordance with the terms hereof.
Should an Event of Default exist, the sums on deposit in the Basic Carrying
Costs Sub-Account and the Basic Carrying Costs Escrow Account may be applied by
Lender in payment of any Basic Carrying Costs or may be applied to the payment
of the Debt or any other charges

 

64

 

affecting all
or any portion of the Property as Lender in its sole discretion may determine; provided,
however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.

 

Section 5.07. Reletting Reserve Escrow
Account.

 

(a)           Borrower hereby agrees
to pay all Reletting Expenditures (without regard to the amount of money then
available in the Reletting Reserve Escrow Account). Provided that no Event of
Default has occurred and is continuing and that Lender has received a written
request from Borrower for payment or reimbursement of any costs incurred in
connection with any Reletting Expenditures (other than those expenses related to
Designated Leases, provided, however, in the event the term of a Designated
Lease is extended, renewed or the space demised thereunder is increased in
accordance with the terms of this Security Interest, Borrower may withdraw sums
in the Reletting Reserve Escrow Account for Reletting Expenditures related to
such extension, renewal or increase in space demised), including, without
limitation Special Reletting Expenditures, together with (1) unconditional lien
waivers (to the extent permitted by law and with respect to payments received
to date, if applicable), (2) if requested by Lender, and if the work is being
performed by Borrower, a statement from an Architect or Engineer or an Officer’s
Certificate, indicating that the Reletting Expenditures for which payment or
reimbursement is sought have been substantially completed in material
compliance with all Legal Requirements, (3) unless Borrower requests
disbursement by means of check payable jointly to Borrower and the applicable
vendor, copies of bills for such Reletting Expenditures for the portion due and
for which payment or reimbursement is sought, (4) unless the tenant has
undertaken the work which is the subject of the Reletting Expenditures, upon
final completion of such work, a tenant estoppel certificate from the tenant
leasing space in the Premises for whom the Reletting Expenditures were made (or
if (i) after using commercially reasonable efforts, Borrower is not able to
obtain the tenant estoppel certificate or (ii) such tenant is a Government Tenant,
a landlord estoppel certificate) which indicates, among other things, that the
tenant under such Space Lease is in occupancy, has accepted the demised
premises under such Space Lease and has paid all rents then due under the Space
Lease without abatement, suspension, deferment, diminution, reduction or other
allowances, except as provided in such Space Lease (and as to Government
Tenants the foregoing requirement shall apply only to “base” or “fixed” rent
other than “base” or “fixed” rent not paid due to incomplete paperwork), and
(5) such other documentation as may be reasonably requested by Lender to
establish that the Reletting Expenditures or portion thereof which are the
subject of such request have been substantially completed, all of which are reasonably
acceptable in form and substance to Lender, then Lender shall within five (5)
Business Days thereafter disburse to Borrower, to the extent of funds remaining
in the Reletting Reserve Escrow Account, any actual expenses incurred in
connection with such Reletting Expenditures provided that Borrower may make a
request for disbursement of sums from the Reletting Reserve Escrow Account no
more than once during any month and any request (other than the final request
for the applicable Reletting Expenditure) shall be in a minimum amount of
$25,000. With respect to any Reletting Expenditures (other than those related
to Designated Leases, provided, however, in the event the term of a Designated
Lease is extended, renewed or the space demised thereunder is increased in
accordance with the terms of this Security Interest, Borrower may withdraw sums
in the Reletting Reserve Escrow Account for Reletting Expenditures related to
such extension, renewal or increase in space demised)

 

65

 

which relate to brokerage commissions, upon
the receipt of (unless Borrower requests disbursement by means of check payable
jointly to Borrower and the applicable broker) copies of bills for such
Reletting Expenditures for the portion due and for which payment or
reimbursement is sought, Lender shall disburse to Borrower any actual expenses
incurred in connection with such Reletting Expenditures out of the Reletting
Reserve Escrow Account. Notwithstanding anything to the contrary contained
herein, any disbursements made by Lender out of the Reletting Reserve Escrow
Account for Special Reletting Expenditures shall, if requested in writing by
Borrower, which request shall be accompanied by such written documentation
relating thereto as may reasonably be required by Lender, be deposited into the
Rent Account as if such sums were received by Borrower as Rent during the
calendar month after such request for disbursement is made by Borrower. Lender
shall not be required to make any disbursements out of the Reletting Reserve
Escrow Account if an Event of Default shall have occurred and is continuing, if
more than one such request is made in any month or if sufficient funds are not
available in the Reletting Reserve Escrow Account. Notwithstanding anything
contained in this Security Instrument, no sums on deposit in the Reletting
Reserve Escrow Account may be used in connection with Reletting Expenditures
incurred with respect to Designated Leases, provided, however, in the event the
term of a Designated Lease is extended, renewed or the space demised thereunder
is increased in accordance with the terms of this Security Interest, Borrower
may withdraw sums in the Reletting Reserve Escrow Account for Reletting
Expenditures related to such extension, renewal or increase in space demised.

 

(b)           All
funds deposited into the Reletting Reserve Escrow Account shall be held by
Lender pursuant to the provisions of this Security Instrument and, provided
that no Event of Default shall have occurred and be continuing, shall be
applied in payment of Reletting Expenditures. Should an Event of Default occur
and be continuing, the sums on deposit in the Reletting Reserve Escrow Account
may be applied by Lender in payment of any Reletting Expenditures or may be
applied to the payment of the Debt or any other charges affecting all or any
portion of the Property, as Lender, in its sole discretion, may determine; provided,
however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.

 

(c)           In
the event that Borrower holds any letters of credit as security for obligations
under Space Leases, within thirty (30) days (or if any letters of credit may
expire within such thirty (30) day period, prior to the expiration of such
letter of credit) of the occurrence of a monetary event of default or a
material non-monetary event of default under the related Space Lease, which
default is not cured within the applicable cure period thereunder, Borrower
shall present for draw and use all commercially reasonable efforts to draw the
full amount which it is entitled to draw under such letter of credit; provided,
however, Borrower shall not be obliged to draw on such letter of credit if (i)
Borrower has submitted to Lender a plan of action to resolve any event of
default which gave rise to Borrower’s right to draw on the applicable letter of
credit and Lender shall, in its reasonable discretion, have consented to such
plan or Borrower is precluded from making a draw on the applicable letter of
credit by applicable law, and (ii) the term of such letter of credit will not
expire prior to the implementation of such submitted plan. Borrower shall
deliver to Lender, within five (5) Business Days of receipt thereof, (x) all
security deposits which Borrower has the right to retain under a Space Lease
(including, without limitation, all sums drawn on letters of credit held as
security for obligations of tenants under

 

66

 

Space Leases)
if the tenant thereunder is in default in the payment of base rent for at least
ninety (90) days and (y) all Rent paid by or on behalf of any lessee under a
Space Lease in whole or partial consideration for the termination, cancellation
or surrender of any Space Lease (including, without limitation, surrender or
cancellation fees, buy-out fees or reimbursements for tenant improvements or
leasing commissions), and in each such case ((x) or (y)) all such sums shall be
held in the Reletting Reserve Escrow Account and shall be disbursed therefrom
as set forth above. Notwithstanding the foregoing, security deposits and sums
drawn under a letter of credit in respect of Rent that was due and owing under
a Space Lease or amounts paid pursuant to clause (y) above if the relevant
space or part thereof has not been re-leased shall be transferred from the
Reletting Reserve Escrow Account to the Rent Account (unless an Event of
Default exists, in which event to the Central Account) and processed as Rent in
the month in which such Rent was due and owing (i.e., with respect to security
deposits delivered to Lender and any draw under a letter of credit pursuant to
this Section 5.07(c), no more than one month of pro-rated monthly rent with
respect to any Space Lease shall be so transferred to the Rent Account or
Central Account (as the case may be) each month unless otherwise consented to
in writing by Lender).

 

Section 5.08. Recurring Replacement
Reserve Escrow Account. Borrower hereby agrees to pay all Recurring
Replacement Expenditures with respect to the Property (without regard to the
amount of money then available in the Recurring Replacement Reserve Sub-Account
or the Recurring Replacement Reserve Escrow Account). Provided that Lender has
received written notice from Borrower at least five (5) Business Days prior to
the due date of any payment relating to Recurring Replacement Expenditures and
not more frequently than once each month, and further provided that no Event of
Default exists, that there are sufficient funds available in the Recurring
Replacement Reserve Escrow Account and Borrower shall have theretofore
furnished Lender with lien waivers (to the extent permitted by law and with
respect to payments received to date, if applicable), copies of bills, invoices
and other reasonable documentation as may be required by Lender to establish
that the Recurring Replacement Expenditures which are the subject of such
request represent amounts due for completed or partially completed capital work
and improvements performed at the Property, Lender shall make such payments out
of the Recurring Replacement Reserve Escrow Account.

 

Provided that no Event of Default exists, all
funds deposited into the Recurring Replacement Reserve Escrow Account shall be
held by Lender pursuant to the provisions of this Security Instrument and shall
be applied in payment of Recurring Replacement Expenditures. Should an Event of
Default exist, the sums on deposit in the Recurring Replacement Reserve
Sub-Account and the Recurring Replacement Reserve Escrow Account may be applied
by Lender in payment of any Recurring Replacement Expenditures or may be
applied to the payment of the Debt or any other charges affecting all or any
portion of the Property, as Lender in its sole discretion may determine; provided,
however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.

 

Section 5.09. Intentionally Omitted.

 

Section 5.10. Intentionally Omitted.

 

67

 

Section 5.11. Intentionally Omitted.

 

Section 5.12. Performance of Engineering
Work. (a) Borrower shall promptly commence and
diligently thereafter pursue to completion (without regard to the amount of
money then available in the Engineering Escrow Account) the Required
Engineering Work prior to the three (3) month anniversary of the Closing Date,
subject to extension of the date for commencement and completion of the
Required Engineering Work as may be permitted by the applicable Governmental
Authority, in all cases subject to Force Majeure, but in no event shall
completion of the Required Engineering Work occur later than December 31, 2007.
After Borrower completes an item of Required Engineering Work or any portion
thereof, Borrower may submit to Lender an invoice therefor with (a) lien
waivers (to the extent permitted by law and with respect to payments received
to date, if applicable), (b) a statement from an Architect or Engineer,
reasonably acceptable to Lender, indicating that the portion of the Required
Engineering Work for which payment or reimbursement is sought has been
substantially completed in material compliance with all Legal Requirements and
(c) an Officer’s Certificate, reasonably acceptable to Lender, indicating that
the portion of the Required Engineering Work for which payment or reimbursement
is sought has been substantially completed in material compliance with all
Legal Requirements and Borrower has paid or will with the requested disbursement
pay all sums due in connection therewith. Notwithstanding the foregoing, in the
event Borrower does not obtain the item set forth in clause (b) above, Borrower
shall not be required to deliver such items to Lender. Lender shall, within
fifteen (15) days after Lender receives such item(s), although in no event more
frequently than once each month, reimburse such amount to Borrower from the
Engineering Escrow Account; provided, however, that Borrower
shall not be reimbursed more than the amount set forth on Exhibit D hereto as the amount allocated to
the portion of the Required Engineering Work for which reimbursement is sought.

 

(b)           All
funds deposited into the Engineering Escrow Account shall be held by Lender
pursuant to the provisions of this Security Instrument and, provided no Event
of Default shall have occurred and be continuing, shall be applied in payment
of costs incurred by Borrower in connection with the Required Engineering Work.
From and after the date all of the Required Engineering Work is completed,
Borrower may submit a written request, which request shall be delivered
together with (a) final lien waivers, (b) a statement from an Architect or
Engineer, as the case may be, reasonably acceptable to Lender, indicating that
all of the Required Engineering Work has been substantially completed in
material compliance with all Legal Requirements, and (c) an Officer’s
Certificate, reasonably acceptable to Lender, indicating that all of the
Required Engineering Work has been substantially completed in material
compliance with all Legal Requirements and Borrower has paid or will with the
requested disbursement pay all sums due in connection therewith. Notwithstanding
the foregoing, in the event Borrower does not obtain the item set forth in
clause (b) above, Borrower shall not be required to deliver such items to
Lender. Lender shall, within fifteen (15) days after Lender receives such
item(s), disburse any balance of the Engineering Escrow Account to Borrower. Should
an Event of Default exist, the sums on deposit in the Engineering Escrow
Account may be applied by Lender in payment of any Required Engineering Work or
may be applied to the payment of the Debt or any other charges affecting all or
any portion of the Property, as Lender in its sole discretion may determine; 

 

68

 

provided,
however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.

 

Section 5.13. Loss Proceeds. In the
event of a casualty to the Property, unless Lender elects, or is required
pursuant to Article III hereof, to make all of the Insurance Proceeds available
to Borrower for restoration, Lender and Borrower shall cause all such Insurance
Proceeds to be paid by the insurer directly to the Central Account, whereupon
Lender shall, after deducting Lender’s costs of recovering and paying out such
Insurance Proceeds, including without limitation, reasonable attorneys’ fees,
apply the same to reduce the Debt in accordance with the terms of the Note; provided,
however, that if Lender elects, or is required, to make the Insurance
Proceeds available for restoration, all Insurance Proceeds in respect of rent
loss, business interruption or similar coverage shall be maintained in the
Central Account, to be applied by Lender in the same manner as Rent received
with respect to the operation of the Property; provided, further,
however, that in the event that the Insurance Proceeds with respect to
such rent loss, business interruption or similar insurance policy are paid in a
lump sum in advance, Lender shall hold such Insurance Proceeds in a segregated
interest-bearing escrow account, which shall be an Eligible Account, shall
estimate, in Lender’s reasonable discretion, the number of months required for
Borrower to restore the damage caused by the casualty, shall divide the
aggregate rent loss, business interruption or similar Insurance Proceeds by
such number of months, and shall disburse from such bank account into the Rent
Account each month during the performance of such restoration such monthly
installment of said Insurance Proceeds. In the event that Insurance Proceeds
are to be applied toward restoration, Lender shall hold such funds in a
segregated interest-bearing bank account at the Bank, which shall be an
Eligible Account, and shall disburse same in accordance with the provisions of
Section 3.04 hereof. Unless Lender elects, or is required pursuant to Section
6.01 hereof, to make all of the Condemnation Proceeds available to Borrower for
restoration, Lender and Borrower shall cause all such Condemnation Proceeds to
be paid to the Central Account, whereupon Lender shall, after deducting Lender’s
costs of recovering and paying out such Condemnation Proceeds, including
without limitation, reasonable attorneys’ fees, apply same to reduce the Debt
in accordance with the terms of the Note; provided, however, that
any Condemnation Proceeds received in connection with a temporary Taking shall
be maintained in the Central Account, to be applied by Lender in the same
manner as Rent received with respect to the operation of the Property; provided,
further, however, that in the event that the Condemnation
Proceeds of any such temporary Taking are paid in a lump sum in advance, Lender
shall hold such Condemnation Proceeds in a segregated interest-bearing bank
account, which shall be an Eligible Account, shall estimate, in Lender’s
reasonable discretion, the number of months that the Property shall be affected
by such temporary Taking, shall divide the aggregate Condemnation Proceeds in
connection with such temporary Taking by such number of months, and shall
disburse from such bank account into the Rent Account each month during the
pendency of such temporary Taking such monthly installment of said Condemnation
Proceeds. In the event that Condemnation Proceeds are to be applied toward
restoration, Lender shall hold such funds in a segregated interest-bearing bank
account at the Bank, which shall be an Eligible Account, and shall disburse
same in accordance with the provisions of Section 3.04 hereof. If any Loss
Proceeds are received by Borrower, such Loss Proceeds shall be received in
trust for Lender, shall be segregated from other funds of Borrower, and shall
be forthwith paid into the Central Account, or paid to Lender to hold in a
segregated interest-bearing bank account at the Bank, in each case

 

69

 

to be applied or disbursed in accordance with
the foregoing. Any Loss Proceeds made available to Borrower for restoration in
accordance herewith, to the extent not used by Borrower in connection with, or
to the extent they exceed the cost of, such restoration, shall be deposited
into the Central Account, whereupon Lender shall apply the same to reduce the
Debt in accordance with the terms of the Note.

 

Section 5.14. Underwritten Rent Escrow
Account. Provided that no Event of Default has occurred and is continuing,
on each Payment Date set forth on Exhibit F,
attached hereto and made a part hereof, Lender shall transfer a sum equal to
the amount specified on Exhibit F
to the Rent Account from the Underwritten Rent Escrow Account. Should an Event
of Default occur and be continuing, sums on deposit in the Underwritten Rent
Escrow Account may be applied by Lender to the payment of the Debt or any other
charges affecting all or any portion of the Property, as Lender in its sole
discretion may determine; provided, however, that no such
application shall be deemed to have been made by operation of law or otherwise
until actually made by Lender as herein provided.

 

Section 5.15. Designated Lease Reserve
Escrow Account.

 

(a)           Borrower hereby agrees
to pay all expenses and other items for which funds have been placed in the
Designated Lease Reserve Escrow Account (collectively, the “Designated Lease
Expenses”) with respect to the Designated Leases (without regard to the
amount of money then available in the Designated Lease Reserve Escrow Account).
Provided that no Event of Default has occurred and is continuing and that
Lender has received a written request from Borrower for payment or
reimbursement of any costs incurred in connection with any Designated Lease
Expenses, together with (1) unconditional lien waivers (to the extent permitted
by law and with respect to payments received to date, if applicable), (2) if
requested by Lender, and if the work is being performed by Borrower, a
statement from an Architect or Engineer or an Officer’s Certificate, indicating
that the Designated Lease Expenses for which payment or reimbursement is sought
have been substantially completed in material compliance with all Legal
Requirements, (3) unless Borrower requests disbursement by means of check
payable jointly to Borrower and the applicable vendor, copies of bills for such
Designated Lease Expenses for the portion due and for which payment or
reimbursement is sought, (4) unless the tenant has undertaken the work which is
the subject of the Designated Lease Expenses, upon final completion of such
work, a tenant estoppel certificate from the tenant leasing space in the
Premises for whom the Designated Lease Expenses were made (or if after using
commercially reasonable efforts, Borrower is not able to obtain the tenant
estoppel certificate, a landlord estoppel certificate) which indicates, among
other things, that the tenant under such Space Lease is in occupancy, has
accepted the demised premises under such Space Lease and has paid all rents
then due under the Space Lease without abatement, suspension, deferment, diminution,
reduction or other allowances, except as provided in such Space Lease, and (5)
such other documentation as may be reasonably requested by Lender to establish
that the Designated Lease Expenses or portion thereof which are the subject of
such request have been substantially completed, all of which are reasonably
acceptable in form and substance to Lender, then Lender shall within five (5)
Business Days thereafter disburse to Borrower, to the extent of funds remaining
in the Designated Lease Reserve Escrow Account, any actual expenses incurred in
connection with such Designated Lease Expenses provided that Borrower may make
a request

 

70

 

for disbursement of sums from the Designated
Lease Reserve Escrow Account no more than once during any month and any request
(other than the final request for the applicable Designated Lease Expenses and
the final disbursement for all Designated Lease Expenses shall also include
interest earned on the funds held in the Designated Lease Reserve Escrow
Account ) shall be in a minimum amount of $25,000. Notwithstanding anything to
the contrary herein, any disbursements made by Lender out of the Designated
Lease Reserve Escrow Account for rent credits due to the tenants (other than
the Merrill Tenant) under Designated Leases shall, if requested in writing by
Borrower, which request shall be accompanied by such written documentation
relating thereto as may reasonably be required by Lender, be deposited into the
Rent Account as if such sums were received by Borrower as Rent during the
calendar month after such request for disbursement is made by Borrower. Lender
shall not be required to make any disbursements out of the Designated Lease
Reserve Escrow Account if an Event of Default shall have occurred and is
continuing, if more than one such request is made in any month or if sufficient
funds are not available in the Designated Lease Reserve Escrow Account.

 

(b)           All
funds deposited into the Designated Lease Reserve Escrow Account shall be held
by Lender pursuant to the provisions of this Security Instrument and, provided
that no Event of Default shall have occurred and be continuing, shall be
applied in payment of Designated Lease Expenses. Should an Event of Default
occur and be continuing, the sums on deposit in the Designated Lease Reserve
Escrow Account may be applied by Lender in payment of any Reletting
Expenditures or may be applied to the payment of the Debt or any other charges
affecting all or any portion of the Property, as Lender, in its sole
discretion, may determine; provided, however, that no such
application shall be deemed to have been made by operation of law or otherwise
until actually made by Lender as herein provided.

 

ARTICLE VI:  CONDEMNATION

 

Section 6.01. Condemnation.
(a)  Borrower shall notify Lender
promptly of the commencement or threat of any Taking of the Property or any
portion thereof. Lender is hereby irrevocably appointed as Borrower’s
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain the proceeds of any such Taking and to make any compromise
or settlement in connection with such proceedings (subject to Borrower’s
reasonable approval, except during the existence of an Event of Default, in
which event Borrower’s approval shall not be required), subject to the
provisions of this Security Instrument; provided, however, that Borrower may
participate in any such proceedings and shall be authorized and entitled to
compromise or settle any such proceeding with respect to Condemnation Proceeds
in an amount less than five percent (5%) of the Loan Amount. Borrower shall
execute and deliver to Lender any and all instruments reasonably required in
connection with any such proceeding promptly after request therefor by Lender. Except
as set forth above, Borrower shall not adjust, compromise, settle or enter into
any agreement with respect to such proceedings without the prior consent of
Lender, which consent shall not be unreasonably withheld or delayed. All
Condemnation Proceeds are hereby assigned to and shall be paid to Lender to be
applied in accordance with the terms hereof. With respect to Condemnation
Proceeds in an amount in excess of five percent (5%) of the Loan Amount,
Borrower hereby authorizes Lender to compromise, settle, collect and receive
such Condemnation Proceeds, and to give proper receipts and acquittance
therefor, subject to,

 

71

 

provided that no Event of Default has
occurred and is continuing, Borrower’s reasonable approval as set forth above.
Subject to the provisions of this Article VI, Lender may apply such
Condemnation Proceeds (less any cost to Lender of recovering and paying out
such proceeds, including, without limitation, reasonable attorneys’ fees and
disbursements and costs allocable to inspecting any repair, restoration or
rebuilding work and the plans and specifications therefor) toward the payment
of the Debt or to allow such proceeds to be used for the Work.

 

(b)           ‘Substantial Taking’
shall mean (i) a Taking of such  portion
of the Property that would, in Lender’s reasonable discretion, leave remaining
a balance of the Property which would not under then current economic
conditions, applicable Development Laws and other applicable Legal Requirements,
permit the restoration of the Property so as to constitute a complete, rentable
facility of the same sort as existed prior to the Taking, having adequate
ingress and egress to the Property, capable of producing a projected Debt
Service Coverage of not less than the Required Debt Service Coverage upon
substantial completion of the restoration of the Property, (ii) a Taking which
Lender is not reasonably satisfied could be restored within twelve (12) months
and at least six (6) months prior to the Maturity Date or (iii) a Taking of
more than fifteen percent (15%) of the reasonably estimated fair market value
of the Property.

 

(c)           In the case of a
Substantial Taking, Condemnation Proceeds shall be payable to Lender in
reduction of the Debt but without any prepayment fee or charge of any kind and,
if Lender elects to apply any Condemnation Proceeds it may receive pursuant to
this Security Instrument to the payment of the Debt, Borrower may prepay the
balance of the Debt without any prepayment fee or charge of any kind.

 

(d)           In the event of a
Taking which is not a Substantial Taking, Borrower at its sole cost and expense
(whether or not the award shall have been received or shall be sufficient for
restoration) shall proceed diligently to restore, or cause the restoration of,
the remaining Improvements not so taken, to maintain a complete, rentable,
self-contained fully operational facility of the same sort as existed prior to
the Taking in as good a condition as is reasonably possible. In the event of
such a Taking, Lender shall receive the Condemnation Proceeds and shall pay
over the same:

 

(i)            first, provided no Default shall
exist, to Borrower to the extent of any portion of the award as may be
necessary to pay the reasonable cost of restoration of the Improvements
remaining, and

 

(ii)           second, to Lender, in reduction of
the Debt without any prepayment premium or charge of any kind.

 

If one or more
Takings in the aggregate create a Substantial Taking, then, in such event, the
sections of this Article VI above applicable to Substantial Takings shall
apply.

 

(e)           In
the event Lender is obligated to or elects to make Condemnation Proceeds
available for the restoration or rebuilding of the Property, such proceeds
shall be disbursed in the manner and subject to the conditions set forth in
Section 3.04(b) hereof. If, in accordance with this Article VI, any
Condemnation Proceeds are used to reduce the Debt, they shall be applied in

 

72

 

accordance
with the provisions of the Note. Borrower shall promptly execute and deliver
all instruments reasonably requested by Lender for the purpose of confirming
the assignment of the Condemnation Proceeds to Lender. Application of all or
any part of the Condemnation Proceeds to the Debt shall be made in accordance
with the provisions of Sections 3.06 and 3.07 hereof. No application of the
Condemnation Proceeds to the reduction of the Debt shall have the effect of
releasing the lien of this Security Instrument until the remainder of the Debt
has been paid in full. In the case of any Taking, Lender, to the extent that
Lender has not been reimbursed by Borrower, shall be entitled, as a first
priority out of any Condemnation Proceeds, to reimbursement for all costs, fees
and expenses reasonably incurred in the determination and collection of any
Condemnation Proceeds. All Condemnation Proceeds deposited with Lender pursuant
to this Section, until expended or applied as provided herein, shall be held in
accordance with Section 3.04(b) hereof and shall constitute additional security
for the payment of the Debt and the payment and performance of Borrower’s
obligations, but Lender shall not be deemed a trustee or other fiduciary with
respect to its receipt of such Condemnation Proceeds or any part thereof. All
awards so deposited with Lender shall be held by Lender in an Eligible Account,
but Lender makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue on any such deposit and shall have no
liability in connection therewith. For purposes hereof, any reference to the
award shall be deemed to include interest, if any, which has accrued thereon.

 

ARTICLE VII:  LEASES AND RENTS

 

Section 7.01. Assignment. (a)   Borrower does
hereby bargain, sell, assign and set over unto Lender, all of Borrower’s
interest in the Leases and Rents. The assignment of Leases and Rents in this
Section 7.01 is an absolute, unconditional and present assignment from Borrower
to Lender and not an assignment for security and the existence or exercise of
Borrower’s revocable license to collect Rent shall not operate to subordinate
this assignment to any subsequent assignment. The exercise by Lender of any of
its rights or remedies pursuant to this Section 7.01 shall not be deemed to
make Lender a mortgagee-in-possession. In addition to the provisions of this
Article VII, Borrower shall comply with all terms, provisions and conditions of
the Assignment.

 

(b)           So
long as there shall exist and be continuing no Event of Default, Borrower shall
have a revocable license to take all actions with respect to all Leases and
Rents, present and future, including the right to collect and use the Rents,
subject to the terms of this Security Instrument and the Assignment.

 

(c)           In
a separate instrument, Borrower shall, as requested from time to time by
Lender, assign to Lender or its nominee by specific or general assignment, any
and all Leases, such assignments to be in form and content reasonably
acceptable to Lender, but subject to the provisions of Section 7.01(b) hereof. Unless
previously delivered to Lender, Borrower agrees to deliver to Lender, within
thirty (30) days after Lender’s request, a true and complete copy of every
Lease and, within fifteen (15) days after Lender’s request, a complete list of
the Leases, certified by Borrower to be true, accurate and complete and stating
the demised premises, the

 

73

 

names of the
lessees, the Rent payable under the Leases and the date to which such Rents
have been paid.

 

(d)           The
rights of Lender contained in this Article VII, the Assignment or any other
assignment of any Lease shall not result in any obligation or liability of
Lender to Borrower or any lessee under a Lease or any party claiming through
any such lessee.

 

(e)           At
any time an Event of Default exists, the license granted hereinabove may be
revoked by Lender, and Lender or a receiver appointed in accordance with this
Security Instrument may enter upon the Property, and collect, retain and apply
the Rents toward payment of the Debt in such priority and proportions as Lender
in its sole discretion shall deem proper.

 

(f)            In
addition to the rights which Lender may have herein, during the existence of
any Event of Default, Lender, at its option, may require Borrower to pay
monthly in advance to Lender, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupation of such part of
the Property as may be used and occupied by Borrower and may require Borrower
to vacate and surrender possession of the Property to Lender or to such
receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise.

 

Section 7.02. Management of Property.

 

(a)           Borrower
shall manage the Property or cause the Property to be managed in a manner which
is consistent with the Approved Manager Standard. All Space Leases entered into
after the date hereof shall provide for rental rates comparable to then
existing local market rates and terms and conditions which constitute good and
prudent business practice and are consistent with prevailing market terms and
conditions, and shall be arm’s length transactions or, with respect to
Operating Leases, on terms which would be obtained in an arms-length
transaction. All Space Leases entered into after the date hereof shall be on a
form previously approved by Lender with such commercially reasonable changes as
are consistent with the standards of other similarly situated owners when
compared with terms and conditions of leases in similarly situated office
buildings in similar context at the time in question, taking into account, inter
alia, the type, creditworthiness and bargaining power of the prospective
tenant and the location and size of the space covered by the proposed Lease,
and shall provide that they are subordinate to this Security Instrument and
that the lessees thereunder attorn to Lender. Borrower shall deliver copies of
all Leases entered into after the Closing Date and amendments, modifications
and renewals of any Lease to Lender. All proposed Leases for the Property shall
be subject to the prior written approval of Lender, not to be unreasonably
withheld or delayed, provided, however that Borrower may enter into new leases
with unrelated third parties without obtaining the prior consent of Lender
provided that:  (i) the proposed leases
conform with the requirements of this Section 7.02; (ii) the space to be leased
pursuant to such proposed lease together with any space leased to a related
tenant under an existing Lease does not exceed 30,000 square feet; and (iii)
the term of the proposed lease, inclusive of all extensions and renewals, does
not exceed ten (10) years. Lender’s consent to any Lease, amendment,
modification, renewal or termination, if required pursuant to the terms of this
Security Instrument, shall be deemed given if the first correspondence from
Borrower to Lender requesting such approval is in an envelope marked “PRIORITY”
and contains a bold-faced, conspicuous legend at the top of the first page thereof

 

74

 

stating that “IF
YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN
WRITING WITHIN SEVEN (7) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and
is accompanied by the information and documents required above and any other
information reasonably requested by Lender in writing prior to the expiration
of such seven (7) Business Day period and, if Lender fails to respond or to
expressly deny such request for approval in writing within the seven (7)
Business Day period, a second notice 
requesting approval is delivered to Lender from Borrower in an envelope
marked “PRIORITY” containing a bold-faced, conspicuous legend at the top of the
first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY
THIS REQUEST FOR APPROVAL IN WRITING WITHIN THREE (3) BUSINESS DAYS, YOUR
APPROVAL SHALL BE DEEMED GIVEN” and Lender fails to respond or to expressly
deny such request for approval within the three (3) Business Day period.

 

(b)           Borrower
(i) shall observe and perform all of its material obligations under the Leases
pursuant to applicable Legal Requirements and shall not do or permit to be done
anything to impair the value of the Leases as security for the Debt; (ii) shall
promptly send copies to Lender of all notices of default which Borrower shall
receive under the Space Leases; (iii) shall, consistent with the Approved
Manager Standard, enforce all of the terms, covenants and conditions contained
in the Leases to be observed or performed; (iv) shall not collect any of the
Rents under the Leases more than one (1) month in advance (except that Borrower
may collect in advance such security deposits as are permitted pursuant to
applicable Legal Requirements and are commercially reasonable in the prevailing
market); (v) shall not execute any other assignment of lessor’s interest in the
Leases or the Rents except as otherwise expressly permitted pursuant to this
Security Instrument; (vi) shall not cancel or terminate any of the Leases or
accept a surrender thereof in any manner inconsistent with the Approved Manager
Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or
transfer of all or any part of the Premises or the Improvements or of any
interest therein so as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, lessees thereunder;
(viii) shall not, without Lender’s consent, which shall not be
unreasonably withheld, delayed or conditioned, alter, modify or change the
terms of any guaranty of any Major Space Lease or cancel or terminate any such
guaranty; (ix) shall, in accordance with the Approved Manager Standard, make
all reasonable efforts to seek lessees for space as it becomes vacant and enter
into Leases in accordance with the terms hereof; (x) shall not materially
modify, alter or amend any Major Space Lease without Lender’s consent, which
consent will not be unreasonably withheld, delayed or conditioned, except that
no consent shall be required for modifications or amendments entered into in
implementation of a right or option of the tenant under such Major Space Lease;
(xi) shall not modify, alter or amend any Property Agreement without Lender’s
consent, if such modification, alteration or amendment is reasonably likely to
have a Material Adverse Effect; and (xii) shall, without limitation to any
other provision hereof, execute and deliver at the request of Lender all such
further assurances, confirmations and assignments in connection with the
Property as are required herein and as Lender shall from time to time
reasonably require.

 

(c)           All
security deposits of lessees, whether held in cash or any other form, shall be
held in accordance with the Space Leases and applicable Legal Requirements. Following
the occurrence and during the continuance of any Event of Default, Borrower
shall, upon Lender’s

 

75

 

request, if
permitted by applicable Legal Requirements, turn over the security deposits
(and any interest thereon) to Lender to be held by Lender in accordance with
the terms of the Leases and all Legal Requirements.

 

(d)           Lender
shall, upon request of Borrower and at Borrower’s sole cost and expense, enter
into a subordination, nondisturbance and attornment agreement (“SNDA”)
with any tenant under a Space Lease entered into in compliance with the
requirements of this Security Instrument. Any SNDA executed by Lender shall be
in Lender’s then standard form (with such reasonable and customary changes
thereto as may be acceptable to Lender, acting reasonably and in good faith)
which shall provide, among other things, that in the event Lender or any
purchaser at foreclosure shall succeed to Borrower’s interest in the Property,
the Space Lease with such tenant will remain in full force and effect and be
binding upon Lender or such purchaser and such tenant as though each were
original parties thereto.

 

(e)           If
requested by Lender, Borrower shall furnish, or shall cause the applicable
lessee to furnish, at Lender’s sole cost and expense, to Lender financial data
and/or financial statements in accordance with Regulation AB for any lessee of
the Property if, in connection with a Securitization, Lender expects there to
be, with respect to such lessee or any group of affiliated lessees, a
concentration within all of the mortgage loans included or expected to be
included, as applicable, in such Securitization such that such lessee or group
of affiliated lessees would constitute a Significant Obligor; provided,
however, that in the event the related Space Lease does not require the related
lessee to provide the foregoing information or the relevant lessee defaults in
its obligation to provide the same under its Space Lease, Borrower shall use
commercially reasonable efforts to cause the applicable lessee to furnish such
information.

 

(f)            Borrower
covenants and agrees with Lender that (i) the Property will be managed at all
times by Manager pursuant to the management agreement approved by Lender (the “Management
Agreement”), (ii) after Borrower has knowledge of a fifty percent (50%) or
more change in control of the ownership of Manager, Borrower will promptly give
Lender notice thereof (a “Manager Control Notice”) and (iii) the
Management Agreement may be terminated by Lender at any time for cause
(including, but not limited to, Manager’s gross negligence, misappropriation of
funds, willful misconduct or fraud) or at any time following (A) the occurrence
and during the continuance of an Event of Default, or (B) the receipt of a
Manager Control Notice, and a substitute managing agent shall be appointed by
Borrower, subject to Lender’s prior written approval, which shall not be
unreasonably withheld, conditioned or delayed and which may be conditioned
after a Securitization on, inter alia, a letter from each Rating Agency
confirming that any rating issued by the Rating Agency in connection with a
Securitization will not, as a result of the proposed change of Manager, be
downgraded from the then current ratings thereof, qualified or withdrawn. Borrower
may from time to time appoint a successor manager to manage the Property with
Lender’s prior written consent which consent shall not be unreasonably
withheld, conditioned or delayed, provided that any such successor manager
shall be a reputable management company and, if a Securitization shall have
occurred, each Rating Agency shall have confirmed in writing that any rating
issued by the Rating Agency in connection with a Securitization will not, as a
result of the proposed change of Manager, be downgraded from the then current
ratings thereof, qualified or withdrawn. Borrower further covenants and agrees
that Borrower shall require Manager (or any successor managers) to

 

76

 

maintain at
all times during the term of the Loan worker’s compensation insurance as
required by Governmental Authorities.

 

(g)          Borrower
represents and warrants that no Franchise Agreement exists with respect to the
Property and covenants that Borrower will not enter into any Franchise
Agreement with respect to the Property without Lender’s prior consent.

 

ARTICLE VIII:  MAINTENANCE AND
REPAIR

 

Section 8.01. Maintenance and Repair of
the Property; Alterations; Replacement of Equipment. Borrower hereby
covenants and agrees:

 

(a)           Borrower
shall not (i) desert or abandon the Property, (ii) change the use of the
Property or cause or permit the use or occupancy of any part of the Property to
be discontinued if such discontinuance or use change would violate any zoning
or other law, ordinance or regulation; (iii) consent to or seek any lowering of
the zoning classification, or greater zoning restriction affecting the
Property; or (iv) convert the Property, or any portion thereof, to a
condominium or cooperative form of ownership.

 

(b)           Borrower
shall, at its expense, (i) take good care of the Property including grounds
generally, and utility systems and sidewalks, roads, alleys, and curbs therein,
and shall keep the same in good, safe and insurable condition and in compliance
with all applicable Legal Requirements, (ii) promptly make all required repairs
to the Property, above grade and below grade, interior and exterior, structural
and nonstructural, ordinary and extraordinary, unforeseen and foreseen, and
maintain the Property in a manner appropriate for the Property and (iii) not
commit or suffer to be committed any waste of the Property or do or suffer to
be done anything which will increase the risk of fire or other hazard to the
Property or impair the value thereof. Borrower shall keep the sidewalks,
vaults, gutters and curbs comprising, or adjacent to, the Property, reasonably
clean and free from dirt, snow, ice, rubbish and obstructions. All repairs made
by Borrower shall be made with first-class materials, in a good and workmanlike
manner, shall be equal or better in quality and class to the original work and
shall comply with all applicable Legal Requirements and Insurance Requirements.
To the extent any of the above obligations are obligations of tenants under
Space Leases or other Persons under Property Agreements, Borrower may fulfill
its obligations hereunder by causing such tenants or other Persons, as the case
may be, to perform their obligations thereunder. As used herein, the terms “repair”
and “repairs” shall be deemed to include all necessary replacements.

 

(c)           Borrower
shall not demolish, remove, construct, or, except as otherwise expressly
provided herein, restore, or alter the Property or any portion thereof or
permit any such demolition, removal, construction, restoration, addition or
alteration if the same would, upon completion of the work, diminish the value
of the Property without Lender’s prior written consent in each instance, which
consent shall not be unreasonably withheld or delayed.

 

(d)           Borrower
represents and warrants to Lender that (i) there are no fixtures, machinery,
apparatus, tools, equipment or articles of personal property attached or
appurtenant to, or located on, or used in connection with the management,
operation or maintenance by

 

77

 

Borrower of
the Property, except for the Equipment and equipment leased by Borrower for the
management, operation or maintenance of the Property in accordance with the
Loan Documents; (ii) the Equipment and the leased equipment constitute all of
the fixtures, machinery, apparatus, tools, equipment and articles of personal
property necessary to the proper operation and maintenance by Borrower of the
Property; and (iii) all of the Equipment is free and clear of all liens, except
for the lien of this Security Instrument and the Permitted Encumbrances and the
rights of lessors under equipment leases entered into in accordance with the
terms of this Security Instrument. All right, title and interest of Borrower in
and to all extensions, improvements, betterments, renewals and appurtenances to
the Property hereafter acquired by, or released to, Borrower or constructed,
assembled or placed by Borrower in the Property, and all changes and
substitutions of the security constituted thereby, shall be and, in each such
case, without any further mortgage, encumbrance, conveyance, assignment or
other act by Lender or Borrower, shall become subject to the lien and security
interest of this Security Instrument as fully and completely, and with the same
effect, as though now owned by Borrower and specifically described in this
Security Instrument, but at any and all times Borrower shall execute and
deliver to Lender any documents Lender may reasonably deem necessary or
appropriate for the purpose of specifically subjecting the same to the lien and
security interest of this Security Instrument.

 

(e)           Notwithstanding
the provisions of this Security Instrument to the contrary, Borrower shall have
the right, at any time and from time to time, to remove and dispose of
Equipment which may have become obsolete or unfit for use or which is no longer
useful in the management, operation or maintenance of the Property. Borrower
shall promptly replace any such Equipment so disposed of or removed with other
Equipment of equal value and utility, free of any security interest or superior
title, liens or claims; except that, if by reason of technological or other
developments, replacement of the Equipment so removed or disposed of is not
necessary or desirable for the proper management, operation or maintenance of
the Property, Borrower shall not be required to replace the same. All such
replacements or additional equipment shall be deemed to constitute “Equipment”
and shall be covered by the security interest herein granted.

 

ARTICLE IX:  TRANSFER OR
ENCUMBRANCE OF THE PROPERTY

 

Section 9.01. Other Encumbrances. Except
for Permitted Encumbrances or other encumbrances approved by Lender, Borrower
shall not further encumber or permit the further encumbrance in any manner
(whether by grant of a pledge, security interest or otherwise) of the Property
or any part thereof or interest therein, including, without limitation, of the
Rents therefrom. In addition, Borrower shall not further encumber and shall not
permit the further encumbrance in any manner (whether by grant of a pledge,
security interest or otherwise) of Borrower or any direct or indirect interest
in Borrower except (a) the Mez Loan and the documents and agreements executed
and delivered in connection therewith, (b) as approved by Lender or (c) as
expressly permitted pursuant to this Security Instrument.

 

Section 9.02. No Transfer. Borrower
acknowledges that Lender has examined and relied on the expertise of Borrower
and, if applicable, each General Partner, in owning and operating properties
such as the Property in agreeing to make the Loan and will continue to rely on

 

78

 

Borrower’s ownership of the Property as a
means of maintaining the value of the Property as security for repayment of the
Debt and Borrower acknowledges that Lender has a valid interest in  maintaining the value of the Property. Except
with respect to the Mez Loan, Borrower shall not Transfer, nor permit any
Transfer, without the prior written consent of Lender, which consent Lender may
withhold in its sole and absolute discretion. Lender shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
a Transfer without Lender’s consent. This provision shall apply to every
Transfer regardless of whether voluntary or not, or whether or not Lender has
consented to any previous Transfer excluding any Mez Loan.

 

Section 9.03. Due on Sale. Lender may
declare the Debt immediately due and payable upon any Transfer in violation of
this Security Instrument (it being acknowledged that an involuntary Transfer
which is a lien and which is being contested in accordance with the terms of
this Security Instrument shall not constitute a Transfer or an Event of
Default) without regard to whether any impairment of its security or any
increased risk of default hereunder can be demonstrated. This provision shall
apply to every Transfer or further encumbrance of the Property or any part
thereof or interest in the Property or in Borrower regardless of whether
voluntary or not, or whether or not Lender has consented to any previous
Transfer or further encumbrance of the Property or interest in Borrower.

 

Section 9.04. Permitted Transfer. Notwithstanding
the foregoing provisions of this Article IX, a sale, conveyance or transfer of
the Property in its entirety (whether directly or indirectly) (hereinafter, “Sale”)
shall be permitted hereunder provided that each of the following terms and
conditions are satisfied:

 

(a)           no
Default is then continuing hereunder or under any of the other Loan Documents;

 

(b)           Lender
shall have, in its reasonable discretion, consented to the Sale, and, if the
proposed Sale is to occur at any time after a Securitization, each Rating
Agency shall have delivered written confirmation that any rating issued by such
Rating Agency in connection with the Securitization will not, as a result of
the proposed Sale, be downgraded from the then current ratings thereof,
qualified or withdrawn; provided, however, that no request for consent to the
Sale will be entertained by Lender if the proposed Sale is to occur within
sixty (60) days prior to any contemplated sale of the Loan by Lender in
connection with a Securitization;

 

(c)           Borrower
gives Lender written notice of the terms of the proposed Sale not less than
thirty (30) days before the date on which such Sale is scheduled to close and,
concurrently therewith, gives Lender (i) all such information concerning the
proposed transferee of the Property (hereinafter, “Buyer”) as Lender
would require in evaluating an initial extension of credit to a borrower and
(ii) a non-refundable application fee equal to $7,500;

 

(d)           Borrower
pays Lender, concurrently with the closing of such Sale, a non-refundable
assumption fee in an amount equal to $350,000 with respect to the first Sale or
one-half of one percent (0.5%) of the then outstanding principal balance of the
Loan for each subsequent Sale, in each case, together with all reasonable out-of-pocket
costs and expenses,

 

79

 

including,
without limitation, reasonable attorneys’ fees, incurred by Lender in
connection with the Sale;

 

(e)           Buyer
assumes all of the obligations of Borrower under the Loan Documents and, prior
to or concurrently with the closing of such Sale, Buyer executes, without any
cost or expense to Lender, such documents and agreements as Lender shall
reasonably require to evidence and effectuate said assumption and delivers such
legal opinions as Lender may reasonably require;

 

(f)            Buyer
executes, without any cost or expense to Lender, new financing statements or
financing statement amendments and any additional documents reasonably
requested by Lender;

 

(g)           Borrower
or Buyer delivers to Lender, without any cost or expense to Lender, an
endorsement or endorsements to Lender’s title insurance policy insuring the
lien of this Security Instrument, extending the effective date of such policy
to the date of execution and delivery (or, if later, of recording) of the
assumption agreement referenced above in subparagraph (e) of this Section, with
no additional exceptions added to such policy (unless otherwise agreed to by
Lender), or a new title policy with no exceptions other than Permitted
Encumbrances and otherwise in form and substance reasonably acceptable to
Lender, insuring that fee simple title to the Property is vested in Buyer;

 

(h)           Borrower
executes and delivers to Lender, without any cost or expense to Lender, a
release of Lender, its officers, directors, employees and agents, from all
claims and liability relating to the transactions evidenced by the Loan
Documents, through and including the date of the closing of the Sale, which
agreement shall be in form and substance reasonably satisfactory to Lender and
shall be binding upon Buyer;

 

(i)            subject to the provisions of Section
18.32 hereof, such Sale is not construed so as to relieve Borrower of any
personal liability under the Note or any of the other Loan Documents for any
acts or events occurring or obligations arising prior to or simultaneously with
the closing of such Sale, and Borrower executes, without any cost or expense to
Lender, such documents and agreements as Lender shall reasonably require to
evidence and effectuate the ratification of said personal liability; provided
that, upon the closing of such Sale, if Borrower and Buyer have satisfied each
of the terms of this Section 9.04, as reasonably determined by Lender, Lender
shall release Borrower from all obligations arising after the closing of such
Sale;

 

(j)            such
Sale is not construed so as to relieve Guarantor of its obligations under any
guaranty or indemnity agreement executed in connection with the Loan and
Guarantor executes, without any cost or expense to Lender, such documents and
agreements as Lender shall reasonably require to evidence and effectuate the
ratification of each such guaranty agreement, provided that if Buyer or a party
associated with Buyer approved by Lender in its sole discretion assumes the
obligations of the current Guarantor under its guaranty arising after the
closing of such Sale and Buyer or such party associated with Buyer, as
applicable, executes, without any cost or expense to Lender, a new guaranty in
similar form and substance to the existing guaranty or an assumption of the
existing guaranty as required by Lender and otherwise reasonably

 

80

 

satisfactory
to Lender, then Lender shall release the current Guarantor from all obligations
arising under its guaranty after the closing of such Sale; and

 

(k)           Buyer
is a Single Purpose Entity and Lender receives a non-consolidation opinion
relating to Buyer from Buyer’s counsel, which opinion is in form and substance
reasonably acceptable to Lender.

 

ARTICLE X:  CERTIFICATES

 

Section 10.01. Estoppel Certificates. (a) After request by Lender, Borrower, within fifteen (15)
days and at its expense, will furnish Lender with a statement, duly
acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, and the unpaid principal amount of the Note, (ii)
the rate of interest of the Note, (iii) the date payments of interest and/or
principal were last paid, (iv) any offsets or defenses to the payment of the
Debt, and if any are alleged, the nature thereof, (v) that the Note and this
Security Instrument have not been modified or if modified, giving particulars
of such modification and (vi) to Borrower’s knowledge, that there has occurred
and is then continuing no Default or if Borrower knows that a Default exists,
the nature thereof, the period of time it has existed, and the action being
taken to remedy such Default.

 

(b)           Within
fifteen (15) days after written request by Borrower but not more than two times
in any Loan Year, Lender shall furnish to Borrower a written statement
confirming the amount of the Debt, the maturity date of the Note, the date to
which interest has been paid, the interest rate with respect to the Note, the
amount on deposit in each Escrow Account and, but solely in connection with a
Sale pursuant to Section 9.04 hereof, a Mez Loan or other Transfer with respect
to which Lender’s consent is required to be obtained, whether to Lender’s
actual knowledge a Default exists under the Loan Documents.

 

(c)           Borrower
shall use all reasonable efforts to obtain estoppel certificates from tenants
in form and substance reasonably acceptable to Lender, but, provided no Event
of Default has occurred and is continuing, in no event shall Borrower be
required to use reasonable efforts to deliver estoppel certificates more than
once during any Loan Year and only if Lender has a good faith reason for such
request.

 

ARTICLE XI:  NOTICES

 

Section 11.01. Notices. Any notice,
demand, statement, request or consent made hereunder shall be in writing and
delivered personally or sent to the party to whom the notice, demand or request
is being made by Federal Express or other nationally recognized overnight
delivery service, as follows and shall be deemed given when delivered
personally or one (1) Business Day after being deposited with Federal Express
or such other nationally recognized delivery service:

 

	
  If to Lender:

  	
   

  	
  Wachovia
  Bank, National Association

  
	
   

  	
   

  	
  Commercial
  Real Estate Services

  

 

81

 

	
   

  	
   

  	
  8739
  Research Drive URP 4

  
	
   

  	
   

  	
  NC 1075

  
	
   

  	
   

  	
  Charlotte,
  North Carolina  28262

  
	
   

  	
   

  	
  Loan Number:
  502855645

  
	
   

  	
   

  	
  Attention:
  Portfolio Management

  
	
   

  	
   

  	
   

  
	
  with a copy
  to:

  	
   

  	
  Proskauer Rose LLP

  
	
   

  	
   

  	
  1585 Broadway

  
	
   

  	
   

  	
  New York, New York 10036

  
	
   

  	
   

  	
  Attn: David J. Weinberger, Esq.

  
	
   

  	
   

  	
   

  
	
  If to Borrower:

  	
   

  	
  To Borrower,
  at the address first written above,

  
	
   

  	
   

  	
   

  
	
  with a copy
  to:

  	
   

  	
  Goulston & Storrs, P.C.

  
	
   

  	
   

  	
  400 Atlantic Avenue

  
	
   

  	
   

  	
  Boston, Massachusetts 02110

  
	
   

  	
   

  	
  Attn: Robert J. Mack, Esq.

  

 

or such other
address as either Borrower or Lender shall hereafter specify by not less than
ten (10) days prior written notice as provided herein; provided, however, that
notwithstanding any provision of this Article to the contrary, such notice of
change of address shall be deemed given only upon actual receipt thereof. Rejection
or other refusal to accept or the inability to deliver because of changed
addresses of which no notice was given as herein required shall be deemed to be
receipt of the notice, demand, statement, request or consent.

 

ARTICLE XII:  INDEMNIFICATION

 

Section 12.01. Indemnification Covering
Property. In addition, and without limitation, to any other provision of
this Security Instrument or any other Loan Document, Borrower shall protect,
indemnify and save harmless Lender and its successors and assigns, and each of
their agents, employees, officers, directors, stockholders, partners and
members (collectively, “Indemnified Parties”) for, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent or otherwise,
whether incurred or imposed within or outside the judicial process, including,
without limitation, reasonable attorneys’ fees and disbursements, imposed upon
or incurred by or asserted against any of the Indemnified Parties by reason of
(a) ownership of this Security Instrument, the Assignment, the Property or any
part thereof or any interest therein or receipt of any Rents; (b) any accident,
injury to or death of any person or loss of or damage to property occurring in,
on or about the Property or any part thereof or on the adjoining sidewalks,
curbs, parking areas, streets or ways; (c) any use, nonuse or condition in, on
or about, or possession, alteration, repair, operation, maintenance or
management of, the Property or any part thereof or on the adjoining sidewalks,
curbs, parking areas, streets or ways; (d) any failure on the part of Borrower
to perform or comply with any of the terms of this Security Instrument or the
Assignment; (e) performance of any labor or services or the furnishing of any
materials or other

 

82

 

property in respect of the Property or any
part thereof; (f) any claim by brokers, finders or similar Persons claiming to
be entitled to a commission in connection with any Lease or other transaction
involving the Property or any part thereof; (g) any Imposition including,
without limitation, any Imposition attributable to the execution, delivery,
filing, or recording of any Loan Document, Lease or memorandum thereof; (h) any
lien or claim arising on or against the Property or any part thereof under any
Legal Requirement or any liability asserted against any of the Indemnified Parties
with respect thereto; (i) any claim arising out of or in any way relating to
any tax or other imposition on the making and/or recording of this Security
Instrument, the Note or any of the other Loan Documents; (j) a Default under
Sections 2.02(f), 2.02(g), 2.02(k), 2.02(t) or 2.02(w) hereof, (k) the failure
of any Person to file timely with the Internal Revenue Service an accurate Form
1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and
Barter Exchange Transactions, which may be required in connection with the
Loan, or to supply a copy thereof in a timely fashion to the recipient of the
proceeds of the Loan; or (l) the claims of any lessee or any Person acting
through or under any lessee or otherwise arising under or as a consequence of
any Lease. Notwithstanding the foregoing provisions of this Section 12.01 to
the contrary, Borrower shall have no obligation to indemnify the Indemnified
Parties pursuant to this Section 12.01 for liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses relative to the
foregoing which result from Lender’s or any other Indemnified Party’s willful
misconduct or gross negligence. Any amounts payable to Lender by reason of the
application of this Section 12.01 shall constitute a part of the Debt secured
by this Security Instrument and the other Loan Documents and shall become due
and payable five (5) Business Days after receipt by Borrower of Lender’s
written demand therefor and shall bear interest at the Default Rate from the
date the liability, obligation, claim, cost or expense is sustained by Lender,
as applicable, until paid. The provisions of this Section 12.01 shall survive
the termination of this Security Instrument whether by repayment of the Debt,
foreclosure or delivery of a deed in lieu thereof, assignment or otherwise. In
case any action, suit or proceeding is brought against any of the Indemnified
Parties by reason of any occurrence of the type set forth in (a) through (l)
above, Borrower shall, at Borrower’s expense, resist and defend such action,
suit or proceeding or will cause the same to be resisted and defended by
counsel at Borrower’s expense for the insurer of the liability or by counsel
designated by Borrower (unless reasonably disapproved by Lender promptly after
Lender has been notified of such counsel); provided, however,
that nothing herein shall compromise the right of Lender (or any other
Indemnified Party) to appoint its own counsel at Borrower’s expense for its
defense with respect to any action which, in the reasonable opinion of Lender
or such other Indemnified Party, as applicable, presents a conflict or
potential conflict between Lender or such other Indemnified Party that would
make such separate representation advisable. Any Indemnified Party will give
Borrower prompt notice after such Indemnified Party obtains actual knowledge of
any potential claim by such Indemnified Party for indemnification hereunder. The
Indemnified Parties shall not settle or compromise any action, proceeding or
claim as to which it is indemnified hereunder without notice to Borrower. Notwithstanding
the foregoing, so long as no Event of Default has occurred and is continuing
and Borrower is resisting and defending such action, suit or proceeding as
provided above in a prudent and commercially reasonable manner, Lender and the
Indemnified Parties shall not be entitled to settle such action, suit or
proceeding, or claim the benefit of this Section 12.01 with respect to such
action, suit or proceeding, without the consent of Borrower not to be
unreasonably withheld, delayed or conditioned; provided,

 

83

 

however, that (x) if
Borrower is not diligently defending such action, suit or proceeding in a
prudent and commercially reasonable manner as provided above, and Lender has
provided Borrower with thirty (30) days’ prior written notice, or shorter
period if mandated by the requirements of the applicable law, and opportunity
to correct such determination and Borrower fails to so correct to Lender’s
reasonable satisfaction within such thirty (30) day period, or (y) if failure
to settle could, in Lender’s reasonable judgment, expose Lender to criminal
liability, Lender may settle such action, suit or proceeding and claim the
benefit of this Section 12.01 with respect to the settlement of such action,
suit or proceeding.

 

ARTICLE XIII:  DEFAULTS

 

Section 13.01. Events of Default. The
Debt shall become immediately due at the option of Lender upon any one or more
of the following events (“Event of Default”):

 

(a)           if
the final payment or prepayment premium, if any, due under the Note shall not
be paid on Maturity unless such failure is caused solely as a result of Lender
failing to transfer sums on deposit in the Central Account to or from the
applicable Sub-Account or Escrow Account;

 

(b)           if
any monthly payment of interest and/or principal due under the Note (other than
the sums described in (a) above) shall not be fully paid on the date upon which
the same is due and payable thereunder unless such failure is caused solely as
a result of Lender failing to transfer sums on deposit in the Central Account
to or from the applicable Sub-Account or Escrow Account;

 

(c)           if
payment of any sum (other than the sums described in (a) above or (b) above)
required to be paid pursuant to the Note, this Security Instrument or any other
Loan Document shall not be paid when due and such failure continues for five
(5) days after Lender delivers written notice to Borrower that same is due and
payable thereunder or hereunder, unless such failure is caused solely as a
result of Lender failing to transfer sums on deposit in the Central Account to
or from the applicable Sub-Account or Escrow Account;

 

(d)           if
Borrower, Guarantor or, if Borrower or Guarantor is a partnership, any general
partner of Borrower or Guarantor, or, if Borrower or Guarantor is a limited
liability company, any member of Borrower or Guarantor, shall institute or
cause to be instituted any proceeding for the termination or dissolution of
Borrower, Guarantor or any such general partner or member;

 

(e)           if
(i) the original insurance policies or certificates are not delivered to Lender
as herein provided (provided, however, that if the insurance policies required
by this Security Instrument are maintained in full force and effect and Lender
receives either a certificate or original policies required by this Security
Instrument for each such insurance policy within the time periods specified in
this Security Instrument, then Borrower shall have five (5) days after notice
from Lender of Borrower’s failure to deliver the original policies or
certificates (whichever has not been delivered as required) to deliver same to
Lender before such failure becomes an Event of Default) or (ii) if the
insurance policies required hereunder are not kept in full force and effect as
herein provided unless such failure is caused solely as a result of Lender

 

84

 

failing to
transfer sums on deposit in the Central Account to or from the applicable
Sub-Account or Escrow Account (no notice or cure period applies to this item
(ii));

 

(f)            if
Borrower or Guarantor attempts to assign its rights under this Security
Instrument or any other Loan Document or any interest herein or therein, or if
any Transfer occurs, other than in accordance with the provisions hereof;

 

(g)           if
any material representation or warranty of Borrower or Guarantor made herein or
in any other Loan Document or in any certificate, report, financial statement
or other instrument or agreement furnished to Lender shall prove to have been
false or misleading in any material respect as of the date made;

 

(h)           if
Borrower, Guarantor or any general partner of Borrower or Guarantor shall make
an assignment for the benefit of creditors or shall admit in writing its
inability to pay its debts generally as they become due;

 

(i)            if a receiver, liquidator or trustee
of Borrower, Guarantor or any general partner of Borrower or Guarantor shall be
appointed or if Borrower, Guarantor or their respective general partners 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, Guarantor or their respective general partners or
if any proceeding for the dissolution or liquidation of Borrower, Guarantor or
their respective general partners shall be instituted; however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower, Guarantor or their respective general partners, as
applicable, upon the same not being discharged, stayed or dismissed within
ninety (90) days or if Borrower, Guarantor or their respective general partners
shall generally not be paying its debts as they become due;

 

(j)            if
Borrower shall be in default beyond any notice or grace period, if any, under
any other mortgage or deed of trust or security agreement covering any part of
the Property without regard to its priority relative to this Security
Instrument; provided, however, this provision shall not be deemed a waiver of
the provisions of Article IX prohibiting further encumbrances affecting the
Property or any other provision of this Security Instrument;

 

(k)           except
for Permitted Encumbrances, if the Property becomes subject (i) to any lien
which is superior to the lien of this Security Instrument, other than a lien
for real estate taxes and assessments not due and payable, or (ii) to any
mechanic’s, materialman’s or other lien which is or is asserted to be superior
to the lien of this Security Instrument, and such lien shall remain
undischarged (by payment, bonding, or otherwise) for thirty (30) days after
Borrower is notified of the filing thereof, unless contested in accordance with
the terms hereof;

 

(l)            if
Borrower discontinues the operation of the Property for reasons other than
repair or restoration arising from a casualty or condemnation for ten (10) days
or more;

 

(m)          any
material alteration, demolition or removal of any of the Improvements shall
occur in violation of this Security Instrument;

 

85

 

(n)           if
Borrower consummates a transaction which would cause this Security Instrument
or Lender’s rights under this Security Instrument, the Note or any other Loan
Document to constitute a non-exempt prohibited transaction under ERISA or
result in a violation of a state statute regulating government plans subjecting
Lender to liability for a violation of ERISA or a state statute; or

 

(o)           if
a default shall occur under any of the other terms, covenants or conditions of
the Note, this Security Instrument or any other Loan Document, other than as
set forth in (a) through (n) above, for ten (10) days after notice 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 or an additional ninety (90) days if Borrower is diligently and
continuously effectuating a cure of a curable non-monetary default, other than
as set forth in (a) through (n)  above.

 

Section 13.02. Remedies. (a) Upon the
occurrence and during the continuance of any Event of Default, Lender may, in
addition to any other rights or remedies available to it hereunder or under any
other Loan Document, at law or in equity, take such action, without notice or
demand, as it reasonably deems advisable to protect and enforce its rights
against Borrower and in and to the Property including, but not limited to, the
following actions, each of which may be pursued singly, concurrently or
otherwise, at such time and in such order as Lender may determine, in its sole
discretion, without impairing or otherwise affecting any other rights and
remedies of Lender hereunder, at law or in equity:  (i) declare all or any portion of the unpaid
Debt to be immediately due and payable; provided, however, that upon the
occurrence of any of the events specified in Section 13.01(i), the entire Debt
will be immediately due and payable without notice or demand or any other
declaration of the amounts due and payable; or (ii) bring an action to
foreclose this Security Instrument and without applying for a receiver for the
Rents, but subject to the rights of the tenants under the Leases, enter into or
upon the Property or any part thereof, either personally or by its agents,
nominees or attorneys, and dispossess Borrower and its agents and servants
therefrom, and thereupon Lender may (A) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of the
Property and conduct the business thereat, (B) make alterations, additions,
renewals, replacements and improvements to or on the Property or any part
thereof, (C) exercise all rights and powers of Borrower with respect to the
Property or any part thereof, whether in the name of Borrower or otherwise,
including, without limitation, the right to make, cancel, enforce or modify
Leases, obtain and evict tenants, and demand, sue for, collect and receive all
earnings, revenues, rents, issues, profits and other income of the Property and
every part thereof, and (D) apply the receipts from the Property or any part
thereof to the payment of the Debt, after deducting therefrom all expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
reasonably incurred in connection with the aforesaid operations and all amounts
necessary to pay the Impositions, insurance and other charges in connection
with the Property or any part thereof, as well as just and reasonable
compensation for the services of Lender’s third-party agents; or (iii) have an
appraisal or other valuation of the Property or any part thereof performed by
an Appraiser (and Borrower covenants and agrees it shall cooperate in causing
any such valuation or appraisal to be performed) and any cost or expense
incurred by Lender in connection therewith shall constitute a portion of the
Debt and be secured by this Security Instrument and shall be immediately due
and payable to Lender with interest, at the Default Rate,

 

86

 

until the date of receipt by Lender; or (iv)
sell the Property or institute proceedings for the complete foreclosure of this
Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument in which case the Property or any part thereof may be sold for cash
or credit in one or more parcels; or (v) with or without entry, and to the
extent permitted and pursuant to the procedures provided by applicable Legal
Requirements, institute proceedings for the partial foreclosure of this
Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument for the portion of the Debt then due and payable, subject to the
lien of this Security Instrument continuing unimpaired and without loss of
priority so as to secure the balance of the Debt not then due; or (vi) sell the
Property or any part thereof and any or all estate, claim, demand, right, title
and interest of Borrower therein and rights of redemption thereof, pursuant to
power of sale or otherwise, at one or more sales, in whole or in parcels, in
any order or manner, at such time and place, upon such terms and after such
notice thereof as may be required or permitted by law, at the discretion of
Lender, and in the event of a sale, by foreclosure or otherwise, of less than
all of the Property, this Security Instrument shall continue as a lien on the
remaining portion of the Property; or (vii) institute an action, suit or
proceeding in equity for the specific performance of any covenant, condition or
agreement contained in the Loan Documents, or any of them; or (viii) recover
judgment on the Note or any guaranty either before, during or after (or in lieu
of) any proceedings for the enforcement of this Security Instrument; or (ix)
apply, ex  parte, for the appointment of a custodian, trustee,
receiver, keeper, liquidator or conservator of the Property or any part
thereof, irrespective of the adequacy of the security for the Debt and without
regard to the solvency of Borrower or of any Person liable for the payment of
the Debt, to which appointment Borrower does hereby consent and such receiver
or other official shall have all rights and powers permitted by applicable law
and such other rights and powers as the court making such appointment may
confer, but the appointment of such receiver or other official shall not impair
or in any manner prejudice the rights of Lender to receive the Rent with
respect to any of the Property pursuant to this Security Instrument or the
Assignment; or (x) require, at Lender’s option, Borrower to pay monthly in
advance to Lender, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of any portion of the
Property occupied by Borrower and may require Borrower to vacate and surrender
possession to Lender of the Property or to such receiver and Borrower may be
evicted by summary proceedings or otherwise; or (xi) without notice to Borrower
(A) apply all or any portion of the cash collateral in any Sub-Account and
Escrow Account, including any interest and/or earnings therein, to carry out
the obligations of Borrower under this Security Instrument and the other Loan
Documents, to protect and preserve the Property and for any other purpose
permitted under this Security Instrument and the other Loan Documents and/or
(B) have all or any portion of such cash collateral immediately paid to Lender
to be applied against the Debt in the order and priority set forth in the Note;
or (xii) pursue any or all such other rights or remedies as Lender may have
under applicable law or in equity; provided, however, that the provisions of
this Section 13.02(a) shall not be construed to extend or modify any of the
notice requirements or grace periods provided for hereunder or under any of the
other Loan Documents. Borrower hereby waives, to the fullest extent permitted
by Legal Requirements, any defense Borrower might otherwise raise or have by
the failure to make any tenants parties defendant to a foreclosure proceeding
and to foreclose their rights in any proceeding instituted by Lender.

 

87

 

(b)           Any
time that an Event of Default exists, Lender shall have the power to sell the
Property or any part thereof at public auction, in such manner, at such time
and place, upon such terms and conditions, and upon such public notice as
Lender may deem best for the interest of Lender, or as may be required or
permitted by applicable law, consisting of advertisement in a newspaper of
general circulation in the jurisdiction and for such period as applicable law
may require and at such other times and by such other methods, if any, as may
be required by law to convey the Property in fee simple by Lender’s deed with
special warranty of title to and at the cost of the purchaser, who shall not be
liable to see to the application of the purchase money. The proceeds or avails
of any sale made under or by virtue of this Section 13.02, together with any
other sums which then may be held by Lender under this Security Instrument,
whether under the provisions of this Section 13.02 or otherwise, shall be
applied as follows:

 

First: 
To the payment of the third-party costs and expenses reasonably incurred
in connection with any such sale and to advances, fees and expenses, including,
without limitation, reasonable fees and expenses of Lender’s legal counsel as
applicable, and of any judicial proceedings wherein the same may be made, and
of all expenses, liabilities and advances reasonably made or incurred by Lender
under this Security Instrument, together with interest as provided herein on
all such advances made by Lender, and all Impositions, except any Impositions
or other charges subject to which the Property shall have been sold;

 

Second: 
To the payment of the whole amount then due, owing and unpaid under the
Note for principal and interest thereon, with interest on such unpaid principal
at the Default Rate from the date of the occurrence of the earliest Event of
Default that formed a basis for such sale until the same is paid;

 

Third: 
To the payment of any other portion of the Debt required to be paid by
Borrower pursuant to any provision of this Security Instrument, the Note, or
any of the other Loan Documents; and

 

Fourth: 
The surplus, if any, to Borrower unless otherwise required by Legal
Requirements.

 

Lender and any
receiver or custodian of the Property or any part thereof shall be liable to
account for only those rents, issues, proceeds and profits actually received by
it.

 

(c)           Lender
may adjourn from time to time any sale by it to be made under or by virtue of
this Security Instrument by announcement at the time and place appointed for
such sale or for such adjourned sale or sales and, except as otherwise provided
by any applicable provision of Legal Requirements, Lender, without further
notice or publication, may make such sale at the time and place to which the
same shall be so adjourned.

 

(d)           Upon
the completion of any sale or sales made by Lender under or by virtue of this
Section 13.02, Lender or any officer of any court empowered to do so, shall
execute and deliver to the accepted purchaser or purchasers a good and
sufficient instrument, or good and sufficient instruments, granting, conveying,
assigning and transferring all estate, right, title and

 

88

 

interest in
and to the property and rights sold. Lender is hereby irrevocably appointed the
true and lawful attorney-in-fact of Borrower (coupled with an interest), in its
name and stead, to make all necessary conveyances, assignments, transfers and
deliveries of the property and rights so sold and for that purpose Lender may
execute all necessary instruments of conveyance, assignment, transfer and
delivery, and may substitute one or more Persons with like power, Borrower
hereby ratifying and confirming all that its said attorney-in-fact or such
substitute or substitutes shall lawfully do by virtue hereof. Nevertheless,
Borrower, if so requested by Lender, shall ratify and confirm any such sale or
sales by executing and delivering to Lender, or to such purchaser or purchasers
all such instruments as may be advisable, in the sole judgment of Lender, for
such purpose, and as may be designated in such request. Any such sale or sales
made under or by virtue of this Section 13.02, whether made under the power of
sale herein granted or under or by virtue of judicial proceedings or a judgment
or decree of foreclosure and sale, shall operate to divest all the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Borrower in and to the property and rights so sold, and shall, to
the fullest extent permitted under Legal Requirements, be a perpetual bar, both
at law and in equity against Borrower and against any and all Persons claiming
or who may claim the same, or any part thereof, from, through or under
Borrower.

 

(e)           In
the event of any sale made under or by virtue of this Section 13.02 (whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or a judgment or decree of foreclosure and sale), the entire Debt
immediately thereupon shall, anything in the Loan Documents to the contrary
notwithstanding, become due and payable.

 

(f)            Upon
any sale made under or by virtue of this Section 13.02 (whether made under the
power of sale herein granted or under or by virtue of judicial proceedings or a
judgment or decree of foreclosure and sale), Lender may bid for and acquire the
Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting upon the Debt the net sales
price after deducting therefrom the expenses of the sale and the costs of the
action.

 

(g)           No
recovery of any judgment by Lender and no levy of an execution under any
judgment upon the Property or any part thereof or upon any other property of
Borrower shall release the lien of this Security Instrument upon the Property
or any part thereof, or any liens, rights, powers or remedies of Lender
hereunder, but such liens, rights, powers and remedies of Lender shall continue
unimpaired until all amounts due under the Note, this Security Instrument and
the other Loan Documents are paid in full.

 

(h)           Upon
the exercise by Lender of any power, right, privilege, or remedy pursuant to
this Security Instrument which requires any consent, approval, registration,
qualification, or authorization of any Governmental Authority, Borrower agrees
to execute and deliver, or will cause the execution and delivery of, all
applications, certificates, instruments, assignments and other documents and
papers that Lender or any purchaser of the Property may be required to obtain
for such governmental consent, approval, registration, qualification, or
authorization and Lender is hereby irrevocably appointed the true and lawful
attorney-in-fact of Borrower (coupled with an interest), in its name and stead,
to execute all such applications, certificates, instruments,

 

89

 

assignments
and other documents and papers if Borrower fails to do so within five (5)
Business Days of request therefor.

 

Section 13.03. Payment of Debt After
Default. If, during the continuance of any Event of Default, Borrower shall
tender payment of an amount sufficient to satisfy the Debt in whole or in part
at any time prior to a foreclosure sale of the Property, and if at the time of
such tender prepayment of the principal balance of the Note is not permitted by
the Note or this Security Instrument, Borrower shall, in addition to the entire
Debt, also pay to Lender a sum equal to (a) all accrued interest on the
Note and all other fees, charges and sums due and payable hereunder,
(b) all costs and expenses in connection with the enforcement of Lender’s
rights hereunder, and (c) a prepayment charge (the “Prepayment Charge”)
equal to the greater of (i) 1% of the Principal Amount which is prepaid
and (ii) the present value of a series of payments each equal to the
Payment Differential (as hereinafter defined) and payable on each Payment Date
over the remaining original term of the Note until the Payment Date occurring
six (6) months prior to the Maturity Date, discounted at the Reinvestment Yield
(as hereinafter defined) for the number of months remaining as of the date of
such prepayment to each such Payment Date and the Payment Date occurring six
(6) months prior to the Maturity Date. The term “Payment Differential” shall
mean an amount equal to (i) the Interest Rate less the Reinvestment Yield,
divided by (ii) twelve (12) and multiplied by (iii) the Principal Amount after
application of the constant monthly payment due under the Note on the date of
such prepayment, provided that the Payment Differential shall in no event be
less than zero. The term “Reinvestment Yield” shall mean an amount equal to the
lesser of (i) the yield on the U.S. Treasury issue (primary issue) with a
maturity date closest to the Payment Date occurring six (6) months prior to the
Maturity Date, or (ii) the yield on the U.S. Treasury issue (primary issue)
with a term equal to the remaining average life of the indebtedness evidenced
by the Note, with each such yield being based on the bid price for such issue
as published in the Wall Street Journal on the date that is fourteen (14) days
prior to the date of such prepayment set forth in the notice of prepayment (or,
if such bid price is not published on that date, the next preceding date on
which such bid price is so published) and converted to a monthly compounded
nominal yield. Failure of Lender to require any of these payments shall not
constitute a waiver of the right to require the same in the event of any
subsequent default or to exercise any other remedy available to Lender
hereunder, under any other Loan Document or at law or in equity. In the event
that any prepayment charge is due hereunder, Lender shall deliver to Borrower a
statement setting forth the amount and determination of the prepayment fee,
and, provided that Lender shall have in good faith applied the formula
described above, Borrower shall not have the right to challenge the calculation
or the method of calculation set forth in any such statement in the absence of
manifest error, which calculation may be made by Lender on any day during the
fifteen (15) day period preceding the date of such prepayment. Lender shall not
be obligated or required to have actually reinvested the prepaid principal
balance at the Reinvestment Yield or otherwise as a condition to receiving the
prepayment charge. If at the time of such tender, prepayment of the principal
balance of the Note is permitted, such tender by Borrower shall be deemed to be
a voluntary prepayment of the principal balance of the Note, and Borrower
shall, in addition to the entire Debt, also pay to Lender the applicable
prepayment consideration specified in the Note and this Security Instrument.

 

90

 

Section 13.04. Possession of the Property.
Upon and during the continuance of any Event of Default and the acceleration of
the Debt or any portion thereof, Borrower, if an occupant of the Property or
any part thereof, upon demand of Lender, shall immediately surrender possession
of the Property (or the portion thereof so occupied) to Lender, and if Borrower
is permitted to remain in possession, the possession shall be as a month-to-month
tenant of Lender and, on demand, Borrower shall pay to Lender monthly, in
advance, a reasonable rental for the space so occupied and in default thereof
Borrower may be dispossessed. The covenants herein contained may be enforced by
a receiver of the Property or any part thereof. Nothing in this Section 13.04
shall be deemed to be a waiver of the provisions of this Security Instrument
making the Transfer of the Property or any part thereof without Lender’s prior
written consent an Event of Default.

 

Section 13.05. Interest After Default.
If any amount due under the Note, this Security Instrument or any of the other
Loan Documents is not paid within any applicable notice and grace period after
same is due, whether such date is the stated due date, any accelerated due date
or any other date or at any other time specified under any of the terms hereof
or thereof, then, in  such event,
Borrower shall pay interest on the amount not so paid from and after the date
on which such amount first becomes due at the Default Rate; and such interest
shall be due and payable at such rate until the earlier of the cure of all
Events of Default or the payment of the entire amount due to Lender, whether or
not any action shall have been taken or proceeding commenced to recover the
same or to foreclose this Security Instrument. All unpaid and accrued interest
shall be secured by this Security Instrument as part of the Debt. Nothing in
this Section 13.05 or in any other provision of this Security Instrument shall
constitute an extension of the time for payment of the Debt.

 

Section 13.06. Borrower’s Actions After
Default. During the existence of any Event of Default and immediately upon
the commencement of any action, suit or other legal proceedings by Lender to
obtain judgment for the Debt, or of any other nature in aid of the enforcement
of the Loan Documents, Borrower will (a) after receipt of notice of the
institution of any such action, waive the issuance and service of process and
enter its voluntary appearance in such action, suit or proceeding, and (b) if
required by Lender, consent to the appointment of a receiver or receivers of
the Property or any part thereof and of all the earnings, revenues, rents, issues,
profits and income thereof.

 

Section 13.07. Control by Lender After
Default. Notwithstanding the appointment of any custodian, receiver,
liquidator or trustee of Borrower, or of any of its property, or of the
Property or any part thereof, to the extent permitted by Legal Requirements,
Lender shall be entitled to obtain possession and control of all property now
and hereafter covered by this Security Instrument and the Assignment in
accordance with the terms hereof.

 

Section 13.08. Right to Cure Defaults.
(a) During the continuance of any Event of Default,
Lender or its agents may, but without any obligation to do so and without
notice to or demand on Borrower and without releasing Borrower from any
obligation hereunder, make or do the same in such manner and to such extent as
Lender may deem necessary to protect the security hereof. Lender and its agents
are authorized to enter upon the Property or any part thereof for such
purposes, or appear in, defend, or bring any action or proceedings to protect

 

91

 

Lender’s interest in the Property or any part
thereof or to foreclose this Security Instrument or collect the Debt, and the
cost and expense thereof (including reasonable attorneys’ fees to the extent
permitted by law), with interest as provided in this Section 13.08, shall
constitute a portion of the Debt and shall be immediately due and payable to
Lender upon demand. All such costs and expenses incurred by Lender or its
agents in remedying such Event of Default or in appearing in, defending, or
bringing any such action or proceeding shall bear interest at the Default Rate,
for the period from the date so demanded to the date of payment to Lender. All
such costs and expenses incurred by Lender or its agents together with interest
thereon calculated at the above rate shall be deemed to constitute a portion of
the Debt and be secured by this Security Instrument.

 

(b)           If
Lender makes any payment or advance that Lender is authorized by this Security
Instrument to make in the place and stead of Borrower (i) relating to the
Impositions or tax liens asserted against the Property, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of the bill, statement or
estimate or into the validity of any of the Impositions or the tax liens or
claims thereof; (ii) relating to any apparent or threatened adverse title,
lien, claim of lien, encumbrance, claim or charge, Lender will be the sole judge
of the legality or validity of same; or (iii) relating to any other purpose
authorized by this Security Instrument but not enumerated in this Section
13.08, Lender may do so whenever, in its judgment and discretion, the payment
or advance seems necessary or desirable to protect the Property and the full
security interest intended to be created by this Security Instrument. In
connection with any payment or advance made pursuant to this Section 13.08,
Lender has the option and is authorized, but in no event shall be obligated, to
obtain a continuation report of title prepared by a title insurance company. The
payments and the advances made by Lender pursuant to this Section 13.08 and the
cost and expenses of said title report will be due and payable by Borrower on
demand, together with interest at the Default Rate, and will be secured by this
Security Instrument.

 

Section 13.09. Late Payment Charge. If
any portion of the Debt is not paid in full on or before the date on which it
is due and payable hereunder (other than the principal portion of the Debt due
on the Maturity Date), Borrower shall pay to Lender an amount equal to five
percent (5%) of such unpaid portion of the Debt (“Late Charge”) to
defray the expense incurred by Lender in handling and processing such
delinquent payment, and such amount shall constitute a part of the Debt.

 

Section 13.10. Recovery of Sums Required
to Be Paid. Lender shall have the right from time to time to take action to
recover any sum or sums which constitute a part of the Debt as the same become
due and payable hereunder (after the expiration of any grace period or the
giving of any notice herein provided, if any), without regard to whether or not
the balance of the Debt shall be due, and without prejudice to the right of Lender
thereafter to bring an action of foreclosure, or any other action, for a
default or defaults by Borrower existing at the time such earlier action was
commenced.

 

Section 13.11. Marshalling and Other
Matters. Borrower hereby waives, to the fullest extent permitted by law,
the benefit of all appraisement, valuation, stay, extension, reinstatement,
redemption (both equitable and statutory) and homestead laws now or hereafter
in force and all

 

92

 

rights of marshalling in the event of any
sale hereunder of the Property or any part thereof or any interest therein. Further,
Borrower hereby expressly waives, to the extent permitted by law, any and all
rights of redemption from sale under any order or decree of foreclosure of this
Security Instrument on behalf of Borrower, whether equitable or statutory and
on behalf of each and every Person acquiring any interest in or title to the
Property or any part thereof subsequent to the date of this Security Instrument
and on behalf of all Persons to the fullest extent permitted by applicable law.

 

Section 13.12. Tax Reduction Proceedings.
If an Event of Default exists, Borrower shall be deemed to have appointed
Lender as its attorney-in-fact to seek a reduction or reductions in the
assessed valuation of the Property for real property tax purposes or for any
other purpose and to prosecute any action or proceeding in connection therewith.
This power, being coupled with an interest, shall be irrevocable for so long as
any part of the Debt remains unpaid and any Event of Default shall be
continuing.

 

Section 13.13. General Provisions
Regarding Remedies.

 

(a)           Right
to Terminate Proceedings. Lender may terminate or rescind any proceeding or
other action brought in connection with its exercise of the remedies provided
in Section 13.02 at any time before the conclusion thereof, as determined in
Lender’s sole discretion and without prejudice to Lender.

 

(b)           No
Waiver or Release. The failure of Lender to exercise any right, remedy or
option provided in the Loan Documents shall not be deemed a waiver of such
right, remedy or option or of any covenant or obligation contained in the Loan
Documents. No acceptance by Lender of any payment while an Event of Default
exists and no payment by Lender of any payment or obligation for which Borrower
is liable hereunder shall be deemed to waive or cure such Event of Default. No
sale of all or any portion of the Property, no forbearance on the part of
Lender, and no extension of time for the payment of the whole or any portion of
the Debt or any other indulgence given by Lender to Borrower or any other
Person, shall operate to release or in any manner affect the interest of Lender
in the Property or the liability of Borrower to pay the Debt. No waiver by
Lender shall be effective unless it is in writing and then only to the extent
specifically stated.

 

(c)           No
Impairment; No Releases. The interests and rights of Lender under the Loan
Documents shall not be impaired by any indulgence, including (i) any renewal,
extension or modification which Lender may grant with respect to any of the
Debt; (ii) any surrender, compromise, release, renewal, extension, exchange or
substitution which Lender may grant with respect to the Property or any portion
thereof; or (iii) any release or indulgence granted to any maker, endorser,
guarantor or surety of any of the Debt.

 

ARTICLE XIV:  COMPLIANCE WITH
REQUIREMENTS

 

Section 14.01. Compliance with Legal
Requirements. (a) Borrower shall promptly comply
with all present and future Legal Requirements, foreseen and unforeseen,
ordinary and extraordinary, whether requiring structural or nonstructural
repairs or alterations including,

 

93

 

without limitation, all zoning, subdivision,
building, safety and environmental protection, land use and development Legal
Requirements, all Legal Requirements which may be applicable to the curbs
adjoining the Property or to the use or manner of use thereof, and all rent
control, rent stabilization and all other similar Legal Requirements relating
to rents charged and/or collected in connection with the Leases. Borrower
represents and warrants that (i) except as previously disclosed to Lender in
writing, the Property is in compliance in all material respects with all Legal
Requirements as of the date hereof, no notices of violations of any Legal
Requirements have been entered or received by Borrower and there is no basis
for the entering of such notices and (ii) any violations of Legal Requirements
with respect to the Property will not result in a Material Adverse Effect, be a
threat to the health and safety of any Person or impair Borrower’s ability to
collect any Rent.

 

(b)           Notwithstanding
anything to the contrary contained herein or in any of the other Loan
Documents, Borrower shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender, the validity or application of any Legal Requirement and to suspend
compliance therewith if permitted under applicable Legal Requirements, provided
(i) failure to comply therewith may not subject Lender to any civil or criminal
liability, (ii) prior to and during such contest, if reasonably required by
Lender, Borrower shall furnish to Lender security reasonably satisfactory to
Lender, in its discretion, against loss or injury by reason of such contest or
non-compliance with such Legal Requirement, (iii) no Event of Default shall
exist during such proceedings and such contest shall not otherwise violate any
of the provisions of any of the Loan Documents, (iv) such contest shall not
(unless Borrower shall comply with the provisions of clause (ii) of this
Section 14.01(b)) subject the Property to any lien or encumbrance the
enforcement of which is not suspended or otherwise affect the priority of the
lien of this Security Instrument; (v) such contest shall not affect the
ownership, use or occupancy of the Property; (vi) the Property or any part
thereof or any interest therein shall not be in any imminent danger of being
sold, forfeited or lost by reason of such contest by Borrower; (vii) Borrower
shall give Lender prompt notice of the commencement of such proceedings and,
upon request by Lender, notice of the status of such proceedings and/or confirmation
of the continuing satisfaction of the conditions set forth in clauses (i) -
(vi) of this Section 14.01(b); and (viii) upon a final determination of such
proceeding, Borrower shall take all steps necessary to comply with any
requirements arising therefrom.

 

(c)           Borrower
shall at all times comply with all applicable Legal Requirements with respect
to the construction, use and maintenance of any vaults adjacent to the Property.
If by reason of the failure to pay taxes, assessments, charges, permit fees, franchise
taxes or levies of any kind or nature, the continued use of the vaults adjacent
to Property or any part thereof is discontinued, Borrower nevertheless shall,
with respect to any vaults which may be necessary for the continued use of the
Property, take such steps (including the making of any payment) to ensure the
continued use of vaults or replacements.

 

Section 14.02. Compliance with Recorded
Documents; No Future Grants. Borrower shall promptly perform and observe,
or cause to be performed and observed, all of the terms, covenants and
conditions of all Property Agreements and all things necessary to preserve
intact and unimpaired any and all appurtenances or other interests or rights
affecting the Property.

 

94

 

ARTICLE XV:  PREPAYMENT

 

Section 15.01. Prepayment. (a)  Except as set forth in this Section 15.01 or
as otherwise specifically provided in the Loan Documents, no prepayment of the
Debt may be made in whole or in part.

 

(b)           Borrower may prepay
the Loan in whole or in part at any time on or after the Payment Date occurring
in August, 2008 in accordance with the following provisions:

 

(i)            Lender
shall have received from Borrower, not less than thirty (30) days’, nor more
than ninety (90) days’, prior written notice specifying the date proposed for
such prepayment and the amount which is to be prepaid.

 

(ii)           Borrower
shall also pay to Lender all interest due on the principal amount prepaid
through and including the last day of the Interest Accrual Period in which such
prepayment is being made, together with any and all other amounts due and owing
pursuant to the terms of the Note, this Security Instrument or the other Loan
Documents.

 

(iii)          Any
partial prepayment shall be in a minimum amount not less than $25,000 and shall
be in whole multiples of $1,000 in excess thereof.

 

(iv)          Intentionally omitted.

 

(v)           Any
partial prepayment of the Principal Amount, including, without limitation,
Unscheduled Payments, shall be applied to the installments of principal last
due hereunder and shall not release or relieve Borrower from the obligation to
pay the regularly scheduled installments of principal and interest becoming due
under the Note.

 

(vi)          Unless
the prepayment is the result of Lender applying Loss Proceeds to the Debt (in
which event, any such prepayment irrespective of when made shall be at par and
without any prepayment premium), in the event that the Loan is prepaid on or
subsequent to the Payment Date occurring in August, 2008 but prior to the
Payment Date in February, 2011, Borrower shall pay to Lender, together with
such prepayment and all other amounts due in connection therewith, a
non-refundable amount which shall be deemed earned by Lender upon the funding
of the Loan and shall not count to or be credited to payment of the Principal
Amount, any interest thereon or any other amounts payable under the Note, the
Security Instrument or any of the Loan Documents, equal to the Yield
Maintenance Premium.

 

ARTICLE XVI:  ENVIRONMENTAL
COMPLIANCE

 

Section 16.01. Covenants, Representations
and Warranties. (a) Borrower has not, at any
time, and, to Borrower’s best knowledge, except as set forth in the
Environmental Report, no other Person has at any time, handled, buried, stored,
retained, refined, transported, processed, manufactured, generated, produced,
spilled, allowed to seep, leak, escape or leach, or pumped, poured, emitted,
emptied, discharged, injected, dumped, transferred or otherwise disposed of or
dealt with Hazardous Materials on, to or from the Premises or any other real
property owned

 

95

 

and/or occupied by Borrower, and Borrower
does not intend to and shall not use the Property or any part thereof or any
such other real property for the purpose of handling, burying, storing,
retaining, refining, transporting, processing, manufacturing, generating,
producing, spilling, seeping, leaking, escaping, leaching, pumping, pouring,
emitting, emptying, discharging, injecting, dumping, transferring or otherwise
disposing of or dealing with Hazardous Materials, except for use and storage
for use of heating oil, cleaning fluids, pesticides and other substances
customarily used in the operation of properties that are being used for the
same purposes as the Property is presently being used, provided such use and/or
storage for use is in compliance with the requirements hereof and the other
Loan Documents and does not give rise to liability under applicable Legal
Requirements or Environmental Statutes or be the basis for a lien against the
Property or any part thereof. In addition, without limitation to the foregoing
provisions, Borrower represents and warrants that, to the best of its
knowledge, except as set forth in the Environmental Report, there is no
asbestos in, on, over, or under all or any portion of the fire-proofing or any
other portion of the Property.

 

(b)           Borrower
knows of no seepage, leak, escape, leach, discharge, injection, release,
emission, spill, pumping, pouring, emptying or dumping of Hazardous Materials
into waters on, under or adjacent to the Property or any part thereof or any
other real property owned and/or occupied by Borrower, or onto lands from which
such Hazardous Materials might seep, flow or drain into such waters, except as
disclosed in the Environmental Report.

 

(c)           Borrower
shall not permit any Hazardous Materials to be handled, buried, stored,
retained, refined, transported, processed, manufactured, generated, produced,
spilled, allowed to seep, leak, escape or leach, or to be pumped, poured,
emitted, emptied, discharged, injected, dumped, transferred or otherwise
disposed of or dealt with on, under, to or from the Property or any portion
thereof at any time, except for use and storage for use of heating oil,
ordinary cleaning fluids, pesticides and other substances customarily used in
the operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is
in compliance with the requirements hereof and the other Loan Documents and
does not give rise to liability under applicable Legal Requirements or be the
basis for a lien against the Property or any part thereof.

 

(d)           Borrower
represents and warrants that, except as set forth in the Environmental Report, no
actions, suits, or proceedings have been commenced, or are pending, or, to the
best knowledge of Borrower, are threatened with respect to any Legal
Requirement governing the use, manufacture, storage, treatment, transportation,
or processing of Hazardous Materials with respect to the Property or any part
thereof. Borrower has received no notice of, and, except as disclosed in the
Environmental Report, has no knowledge of, any fact, condition, occurrence or
circumstance which with notice or passage of time or both would give rise to a
claim under or pursuant to any Environmental Statute pertaining to Hazardous
Materials on, in, under or originating from the Property or any part thereof or
any other real property owned or occupied by Borrower or arising out of the
conduct of Borrower, including, without limitation, pursuant to any
Environmental Statute.

 

(e)           Other
than pursuant to the purchase and sale agreement pursuant to which Borrower
acquired the Property, a true, accurate and complete copy of which has been
delivered

 

96

 

to Lender by
Borrower, Borrower has not waived any Person’s liability with regard to
Hazardous Materials in, on, under or around the Property, nor has Borrower
retained or assumed, contractually or by operation of law, any other Person’s
liability relative to Hazardous Materials or any claim, action or proceeding
relating thereto.

 

(f)            Subject
to Borrower’s right to contest in accordance with the terms hereof, in the
event that there shall be filed a lien against the Property or any part thereof
pursuant to any Environmental Statute pertaining to Hazardous Materials,
Borrower shall, within sixty (60) days or, in the event that the applicable
Governmental Authority has commenced steps to cause the Premises or any part
thereof to be sold pursuant to the lien, within fifteen (15) days, from the
date that Borrower receives notice of such lien, either (i) pay the claim and
remove the lien from the Property, or (ii) furnish a bond or other security
satisfactory to Lender in the amount of the claim out of which the lien arises.

 

(g)           Borrower
represents and warrants that (i) except as disclosed in the Environmental
Report, Borrower has no knowledge of any violation of any Environmental Statute
or any Environmental Problem in connection with the Property,  nor has Borrower been requested or required
by any Governmental Authority to perform any remedial activity or other
responsive action in connection with any Environmental Problem and
(ii) neither the Property nor any other property owned by Borrower is
included or, to Borrower’s best knowledge, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA by the United States
Environmental Protection Agency (the “EPA”) or on the inventory of other
potential “Problem” sites issued by the EPA and has not otherwise been
identified by the EPA as a potential CERCLA site or included or, to Borrower’s
knowledge, proposed for inclusion on any list or inventory issued pursuant to
any other Environmental Statute, if any, or issued by any other Governmental
Authority. Borrower covenants that Borrower will comply in all material
respects with all Environmental Statutes affecting or imposed upon Borrower or
the Property.

 

(h)           Borrower
covenants that it shall promptly notify Lender of the presence and/or release
of any Hazardous Materials on the Property which requires reporting under any
Legal Requirements and of any request for information or any inspection of the
Property or any part thereof by any Governmental Authority with respect to any
Hazardous Materials on the Property and provide Lender with copies of such
request and any response to any such request or inspection. Borrower covenants
that it shall, in compliance with applicable Legal Requirements, conduct and
complete all investigations, studies, sampling and testing (and promptly shall
provide Lender with copies of any such studies and the results of any such
test) and all remedial, removal and other actions necessary to clean up and remove
all Hazardous Materials in, on, over, under, from or affecting the Property or
any part thereof in accordance with all such Legal Requirements applicable to
the Property or any part thereof to the reasonable satisfaction of Lender.

 

(i)            While an Event of Default exists
hereunder, and without regard to whether Lender shall have taken possession of
the Property or a receiver has been requested or appointed or any other right
or remedy of Lender has or may be exercised hereunder or under any other Loan
Document, Lender shall have the right (but no obligation) to conduct such
investigations, studies, sampling and/or testing of the Property or any part
thereof as Lender may, in its discretion,

 

97

 

determine to
conduct, relative to Hazardous Materials. All costs and expenses incurred in
connection therewith including, without limitation, consultants’ fees and
disbursements and laboratory fees, shall constitute a part of the Debt and
shall, upon demand by Lender, be immediately due and payable and shall bear
interest at the Default Rate from the date so demanded by Lender until
reimbursed. Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all such investigations, studies, samplings and/or
testings including, without limitation, providing all relevant information and
making knowledgeable people available for interviews.

 

(j)            Borrower
represents and warrants that, to the best of its knowledge, except as disclosed
in the Environmental Report, all paint and painted surfaces existing within the
interior or on the exterior of the Improvements are not flaking, peeling,
cracking, blistering, or chipping, and do not contain lead or are maintained in
a condition that prevents exposure of young children to lead-based paint, and
that the current inspections, operation, and maintenance program at the
Property with respect to lead-based paint is consistent with FNMA guidelines
and sufficient to ensure that all painted surfaces within the Property shall be
maintained in a condition that prevents exposure of tenants to lead-based paint.
To Borrower’s knowledge, except as disclosed in the Environmental Report, there
have been no claims for adverse health effects from exposure on the Property to
lead-based paint or requests for the investigation, assessment or removal of
lead-based paint at the Property.

 

(k)           Borrower
represents and warrants that, to its best knowledge and except in accordance
with all applicable Environmental Statutes and as disclosed in the
Environmental Report, (i) no underground treatment or storage tanks or pumps or
water, gas, or oil wells are or have been located about the Property,
(ii) no PCBs or transformers, capacitors, ballasts or other equipment that
contain dielectric fluid containing PCBs are located about the Property,
(iii) no insulating material containing urea formaldehyde is located about
the Property and (iv) no asbestos-containing material is located about the
Property.

 

Section 16.02. Environmental
Indemnification. Borrower shall defend, indemnify and hold harmless the
Indemnified Parties for, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind
or nature, known or unknown, contingent or otherwise, whether incurred or
imposed within or outside the judicial process, including, without limitation,
reasonable attorneys’ and consultants’ fees and disbursements and
investigations and laboratory fees, arising out of, or in any way related to
any Environmental Problem, including without limitation:

 

(a)           the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threat of release of any Hazardous Materials in, on, over, under,
from or affecting the Property or any part thereof whether or not disclosed by
the Environmental Report;

 

(b)           any
personal injury (including wrongful death, disease or other health condition
related to or caused by, in whole or in part, any Hazardous Materials) or
property damage (real or personal) arising out of or related to any Hazardous
Materials in, on, over, under, from or affecting the Property or any part
thereof, whether or not disclosed by the Environmental Report;

 

98

 

(c)           any
action, suit or proceeding brought or threatened, settlement reached, or order
of any Governmental Authority relating to such Hazardous Material, whether or
not disclosed by the Environmental Report; and/or

 

(d)           any
violation of the provisions, covenants, representations or warranties of
Section 16.01 hereof or of any Legal Requirement which is based on or in any
way related to any Hazardous Materials in, on, over, under, from or affecting
the Property or any part thereof, including, without limitation, the cost of
any work performed and materials furnished in order to comply therewith,
whether or not disclosed by the Environmental Report.

 

Notwithstanding the foregoing provisions of
this Section 16.02 to the contrary, Borrower shall have no obligation to
indemnify Lender or any other Indemnified Party for liabilities, claims,
damages, penalties, causes of action, costs and expenses relative to the
foregoing to the extent resulting from (A) any Indemnified Party’s willful
misconduct or gross negligence or (B) any Hazardous Materials initially placed
in, on or under the Property or any other condition relating to Hazardous
Materials created after foreclosure, delivery of a deed in lieu or other taking
of title to the Property by Lender or its successors and assigns. Any amounts
payable to Lender by reason of the application of this Section 16.02 shall be
secured by this Security Instrument and shall, upon demand by Lender, become
immediately due and payable and shall bear interest at the Default Rate from
the date so demanded by Lender until paid.

 

This indemnification shall survive the
termination of this Security Instrument whether by repayment of the Debt,
foreclosure or deed in lieu thereof, assignment, or otherwise; provided,
however, that this indemnification shall only run to the Indemnified Parties
and the first purchaser of the Property which is not an Affiliate of Lender. The
indemnity provided for in this Section 16.02 shall not be included in any
exculpation of Borrower or its principals from personal liability provided for
in this Security Instrument or in any of the other Loan Documents. Nothing in
this Section 16.02 shall be deemed to deprive Lender of any rights or remedies
otherwise available to Lender, including, without limitation, those rights and
remedies provided elsewhere in this Security Instrument or the other Loan
Documents.

 

ARTICLE XVII:  ASSIGNMENTS

 

Section 17.01. Participations and
Assignments. Lender shall have the right to assign this Security Instrument
and/or any of the Loan Documents, and to transfer, assign or sell
participations and subparticipations (including blind or undisclosed
participations and subparticipations) in the Loan Documents and the obligations
hereunder to any Person; provided, however, that no such participation shall
increase, decrease or otherwise affect either Borrower’s or Lender’s
obligations under this Security Instrument or the other Loan Documents.

 

ARTICLE XVIII:  MISCELLANEOUS

 

Section 18.01. Right of Entry. Lender
and its agents shall have the right to enter and inspect the Property or any
part thereof at all reasonable times, and, except in the event of an emergency,
upon reasonable notice and to inspect Borrower’s books and records and to make
abstracts and reproductions thereof.

 

99

 

Section 18.02. Cumulative Rights. The
rights of Lender under this Security Instrument shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No
act of Lender shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision. Lender shall not be
limited exclusively to the rights and remedies herein stated but shall be
entitled, subject to the terms of this Security Instrument, to every right and
remedy now or hereafter afforded by law.

 

Section 18.03. Liability. If Borrower
consists of more than one Person, the obligations and liabilities of each such
Person hereunder shall be joint and several.

 

Section 18.04. Exhibits Incorporated. The
information set forth on the cover hereof, and the Exhibits annexed hereto, are
hereby incorporated herein as a part of this Security Instrument with the same
effect as if set forth in the body hereof.

 

Section 18.05. Severable Provisions. If
any term, covenant or condition of the Loan Documents including, without
limitation, the Note or this Security Instrument, is held to be invalid,
illegal or unenforceable in any respect, such Loan Document shall be construed
without such provision.

 

Section 18.06. Duplicate Originals. This
Security Instrument may be executed in any number of duplicate originals and
each such duplicate original shall be deemed to constitute but one and the same
instrument.

 

Section 18.07. No Oral Change. The
terms of this Security Instrument, together with the terms of the Note and the
other Loan Documents constitute the entire understanding and agreement of the
parties hereto and supersede all prior agreements, understandings and
negotiations between Borrower and Lender with respect to the Loan. This
Security Instrument, and any provisions hereof, may not be modified, amended,
waived, extended, changed, discharged or terminated orally or by any act on the
part of Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.

 

Section 18.08. Intentionally Omitted.

 

Section 18.09. Headings; Construction of
Documents; etc. The table of contents, headings and captions of various
paragraphs of this Security Instrument are for convenience of reference only
and are not to be construed as defining or limiting, in any way, the scope or
intent of the provisions hereof. Borrower acknowledges that it was represented
by competent counsel in connection with the negotiation and drafting of this
Security Instrument and the other Loan Documents and that neither this Security
Instrument nor the other Loan Documents shall be subject to the principle of
construing the meaning against the Person who drafted same.

 

Section 18.10. Sole Discretion of Lender.
Whenever 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 that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Lender and
shall be final and conclusive, except as may be otherwise specifically provided
herein.

 

100

 

Section 18.11. Waiver of Notice and Jury
Trial. Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Security
Instrument or any of the other Loan Documents specifically and expressly
provides 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 AND LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY
HERETO.

 

Section 18.12. Covenants Run with the Land.
All of the grants, covenants, terms, provisions and conditions herein shall run
with the Premises, shall be binding upon Borrower and shall inure to the benefit
of Lender, subsequent holders of this Security Instrument and their successors
and assigns. Without limitation to any provision hereof, the term “Borrower”
shall include and refer to the borrower named herein, any subsequent owner of
the Property, and its respective heirs, executors, legal representatives,
successors and assigns. The representations, warranties and agreements
contained in this Security Instrument and the other Loan Documents are intended
solely for the benefit of the parties hereto, shall confer no rights hereunder,
whether legal or equitable, in any other Person and no other Person shall be
entitled to rely thereon.

 

Section 18.13. Applicable Law. THIS
SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS APPLICABLE
TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE
UNITED STATES OF AMERICA.

 

Section 18.14. Security Agreement. (a)   (i)  This Security Instrument is both a real
property mortgage or deed of trust, as applicable, and a “security agreement”
within the meaning of the UCC. The Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Borrower in the Property. This Security Instrument is filed as a
fixture filing and covers goods which are or are to become fixtures on the
Property. Borrower by executing and delivering this Security Instrument has
granted to Lender, as security for the Debt, 
a security interest in the Property to the full extent that the Property
may be subject to the UCC (said portion of the Property so subject to the UCC
being called in this Section 18.14 the “Collateral”). If an Event of
Default shall exist, Lender, in addition to any other rights and remedies which
it may have, shall have and may exercise immediately and without demand, any
and all rights and remedies granted to a secured party upon default under the
UCC, including, without limiting the generality of the foregoing, the right to
take possession of the Collateral or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and preservation
of the Collateral. Upon request or demand of Lender while an Event of Default
exists, Borrower shall, at its expense, assemble the Collateral and make it
available to Lender at a convenient place acceptable to Lender. Borrower shall
pay to Lender on demand any and all expenses, including reasonable legal
expenses and attorneys’ fees, incurred or paid by Lender in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect
to the Collateral. Any disposition pursuant to the UCC of so much of the
Collateral as may constitute personal property shall be considered commercially
reasonable if made pursuant to a public sale which is advertised at least twice
in a newspaper in which sheriff’s sales are advertised in the county where the
Premises is located. Any notice of

 

101

 

sale, disposition or other intended action by
Lender with respect to the Collateral given to Borrower in accordance with the
provisions hereof at least ten (10) days prior to such action, shall constitute
reasonable notice to Borrower. The proceeds of any disposition of the
Collateral, or any part thereof, may be applied by Lender to the payment of the
Debt in such priority and proportions as Lender in its discretion shall deem
proper. It is not necessary that the Collateral be present at any disposition
thereof. Lender shall have no obligation to clean-up or otherwise prepare the
Collateral for disposition.

 

(ii)           The mention in a financing statement
filed in the records normally pertaining to personal property of any portion of
the Property shall not derogate from or impair in any manner the intention of
this Security Instrument. Lender hereby declares that all items of Collateral
are part of the real property encumbered hereby to the fullest extent permitted
by law, regardless of whether any such item is physically attached to the
Improvements or whether serial numbers are used for the better identification
of certain items. Specifically, the mention in any such financing statement of
any items included in the Property shall not be construed to alter, impair or
impugn any rights of Lender as determined by this Security Instrument or the
priority of Lender’s lien upon and security interest in the Property in the
event that notice of Lender’s priority of interest as to any portion of the Property
is required to be filed in accordance with the UCC to be effective against or
take priority over the interest of any particular class of persons, including
the federal government or any subdivision or instrumentality thereof. No
portion of the Collateral constitutes or is the proceeds of “Farm Products”, as
defined in the UCC.

 

(iii)          If Borrower is at any time a
beneficiary under a letter of credit now or hereafter issued in favor of
Borrower and an Event of Default exists hereunder, Borrower shall promptly
notify Lender thereof and, at the request and option of Lender, Borrower shall,
pursuant to an agreement in form and substance satisfactory to Lender, either
(A) arrange for the issuer and any confirmer of such letter of credit to
consent to an assignment to Lender of the proceeds of any drawing under the
letter of credit or (B) arrange for Lender to become the transferee beneficiary
of the letter of credit, with Lender agreeing, in each case, that the proceeds
of any drawing under the letter to credit are to be applied as provided in this
Security Instrument.

 

(iv)          Borrower and Lender acknowledge that
for the purposes of Article 9 of the UCC, the law of the State of Illinois
shall be the law of the jurisdiction of the bank in which the Central Account
is located.

 

(v)           Lender may comply with any applicable
Legal Requirements in connection with the disposition of the Collateral, and
Lender’s compliance therewith will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.

 

(vi)          Lender may sell the Collateral without
giving any warranties as to the Collateral. Lender may specifically disclaim
any warranties of title, possession, quiet enjoyment or the like. This
procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

 

(vii)         If Lender sells any of the Collateral
upon credit, Borrower will be credited only with payments actually made by the
purchaser, received by Lender and applied to the

 

102

 

indebtedness
of Borrower. In the event the purchaser of the Collateral fails to fully pay
for the Collateral, Lender may resell the Collateral and Borrower will be
credited with the proceeds of such sale.

 

(b)           Borrower
hereby irrevocably appoints Lender as its attorney-in-fact, coupled with an
interest, to file with the appropriate public office on its behalf any
financing or other statements signed only by Lender, as secured party, or, to
the extent permitted under the UCC, unsigned, in connection with the Collateral
covered by this Security Instrument.

 

Section 18.15. Actions and Proceedings.
Lender has the right to appear in and defend any action or proceeding brought
with respect to the Property in its own name or, if required by Legal
Requirements, or, if in Lender’s reasonable judgment, it is necessary, in the
name and on behalf of Borrower, which Lender believes will adversely affect the
Property or this Security Instrument and to bring any action or proceedings, in
its name or in the name and on behalf of Borrower, which Lender, in its
discretion, decides should be brought to protect its interest in the Property.

 

Section 18.16. Usury Laws. This
Security Instrument and the Note are subject to the express condition, and it
is the expressed intent of the parties, that at no time shall Borrower be
obligated or required to pay interest on the principal balance due under the
Note at a rate which could subject the holder of the Note to either civil or
criminal liability as a result of being in excess of the maximum interest rate
which Borrower is permitted by law to contract or agree to pay. If by the terms
of this Security Instrument or the Note, Borrower is at any time required or
obligated to pay interest on the principal balance due under the Note at a rate
in excess of such maximum rate, such rate of interest shall be deemed to be
immediately reduced to such  maximum rate
and the interest payable shall be computed at such maximum rate and all prior
interest payments in excess of such maximum rate shall be applied and shall be
deemed to have been payments in reduction of the principal balance of the Note.
No application to the principal balance of the Note pursuant to this Section
18.16 shall give rise to any requirement to pay any prepayment fee or charge of
any kind due hereunder, if any.

 

Section 18.17. Remedies of Borrower. In
the event that a claim or adjudication is made that Lender has acted
unreasonably or unreasonably delayed acting in any case where by law or under the
Note, this Security Instrument or the Loan Documents, it has an obligation to
act reasonably or promptly, Lender shall not be liable for any monetary
damages, and Borrower’s remedies shall be limited to injunctive relief or
declaratory judgment.

 

Section 18.18. Offsets, Counterclaims and
Defenses. Any assignee of this Security Instrument, the Assignment and the
Note shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to the Note, the Assignment or this Security
Instrument which Borrower may otherwise have against any assignor of this
Security Instrument, the Assignment and the Note 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 this Security
Instrument, the Assignment or the Note 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.

 

103

 

Section 18.19. No Merger. If Borrower’s
and Lender’s estates become the same including, without limitation, upon the
delivery of a deed by Borrower in lieu of a foreclosure sale, or upon a
purchase of the Property by Lender in a foreclosure sale, this Security
Instrument and the lien created hereby shall not be destroyed or terminated by
the application of the doctrine of merger, and in such event Lender shall
continue to have and enjoy all of the rights and privileges of Lender as to the
separate estates; and, as a consequence thereof, upon the foreclosure of the
lien created by this Security Instrument, any Leases or subleases then existing
and created by Borrower shall not be destroyed or terminated by application of
the law of merger or as a result of such foreclosure unless Lender or any
purchaser at any such foreclosure sale shall so elect. No act by or on behalf
of Lender or any such purchaser shall constitute a termination of any Lease or
sublease unless Lender or such purchaser shall give written notice thereof to
such lessee or sublessee.

 

Section 18.20. Restoration of Rights. In
case Lender shall have proceeded to enforce any right under this Security
Instrument by foreclosure sale, entry or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason or shall have been
determined adversely, then, in every such case, Borrower  and Lender shall be restored to their former
positions and rights hereunder with respect to the Property subject to the lien
hereof.

 

Section 18.21. Waiver of Statute of
Limitations. The pleadings of any statute of limitations as a defense to
any and all obligations secured by this Security Instrument are hereby waived
to the full extent permitted by Legal Requirements.

 

Section 18.22. Advances. This Security
Instrument shall cover any and all advances made pursuant to the Loan
Documents, rearrangements and renewals of the Debt and all extensions in the
time of payment thereof, even though such advances, extensions or renewals be
evidenced by new promissory notes or other instruments hereafter executed and
irrespective of whether filed or recorded. Likewise, the execution of this
Security Instrument shall not impair or affect any other security which may be
given to secure the payment of the Debt, and all such additional security shall
be considered as cumulative. The taking of additional security, execution of
partial releases of the security, or any extension of time of payment of the
Debt shall not diminish the force, effect or lien of this Security Instrument
and shall not affect or impair the liability of Borrower and shall not affect
or impair the liability of any maker, surety, or endorser for the payment of
the Debt.

 

Section 18.23. Application of Default Rate
Not a Waiver. Application of the Default Rate shall not be deemed to
constitute a waiver of any Default or Event of Default or any rights or
remedies of Lender under this Security Instrument, any other Loan Document or
applicable Legal Requirements, or a consent to any extension of time for the
payment or performance of any obligation with respect to which the Default Rate
may be invoked.

 

Section 18.24. Intervening Lien. To
the fullest extent permitted by law, any agreement hereafter made pursuant to
this Security Instrument shall be superior to the rights of the holder of any
intervening lien.

 

104

 

Section 18.25. No Joint Venture or
Partnership. Borrower and Lender intend that the relationship created
hereunder be solely that of mortgagor and mortgagee or grantor and beneficiary
or borrower and lender, as the case may be. Nothing herein 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.

 

Section 18.26. Time of the Essence. Time
shall be of the essence in the performance of all obligations of Borrower
hereunder.

 

Section 18.27. Borrower’s Obligations
Absolute. Borrower acknowledges that Lender and/or certain Affiliates of
Lender are engaged in the business of financing, owning, operating, leasing,
managing, and brokering real estate and in other business ventures which may be
viewed as adverse to or competitive with the business, prospect, profits,
operations or condition (financial or otherwise) of Borrower. Except as set
forth to the contrary in the Loan Documents, all sums payable by Borrower
hereunder shall be paid without notice or demand, counterclaim, set-off,
deduction or defense and without abatement, suspension, deferment, diminution
or reduction, and the obligations and liabilities of Borrower hereunder shall
in no way be released, discharged, or otherwise affected (except as expressly
provided herein) by reason of:  (a) any
damage to or destruction of or any Taking of the Property or any portion
thereof; (b) any restriction or prevention of or interference with any use of
the Property or any portion thereof; (c) any title defect or encumbrance or any
eviction from the Premises or any portion thereof by title paramount or
otherwise; (d) any bankruptcy proceeding relating to Borrower, any General
Partner, or any guarantor or indemnitor, or any action taken with respect to
this Security Instrument or any other Loan Document by any trustee or receiver
of Borrower or any such General Partner, guarantor or indemnitor, or by any
court, in any such proceeding; (e) any claim which Borrower has or might have
against Lender; (f) any default or failure on the part of Lender to perform or
comply with any of the terms hereof or of any other agreement with Borrower; or
(g) any other occurrence whatsoever, whether similar or dissimilar to the
foregoing, whether or not Borrower shall have notice or knowledge of any of the
foregoing.

 

Section 18.28. Publicity. All
promotional news releases, publicity or advertising by Manager, Borrower or
their respective Affiliates through any media intended to reach the general
public shall not refer to the Loan Documents or the financing evidenced by the
Loan Documents, or to Lender or to any of its Affiliates without the prior
written approval of Lender or such Affiliate, as applicable, in each instance,
such approval not to be unreasonably withheld or delayed. Lender shall be
authorized to provide information relating to the Property, the Loan and
matters relating thereto to rating agencies, underwriters, potential securities
investors, auditors, regulatory authorities and to any Persons which may be
entitled to such information by operation of law and may use basic transaction
information (including, without limitation, the name of Borrower, the name and
address of the Property and the Loan Amount) in press releases or other
marketing materials.

 

Section 18.29. Securitization Opinions.
In the event the Loan is included as an asset of a Securitization by Lender or
any of its Affiliates, Borrower shall, within fifteen (15) Business Days after
Lender’s written request therefor, at Lender’s sole but reasonable cost and
expense,

 

105

 

deliver opinions in form and substance and
delivered by counsel reasonably acceptable to Lender and each Rating Agency, as
may be reasonably required by Lender and/or the Rating Agency in connection
with such Securitization. Borrower’s failure to deliver the opinions required
hereby within such fifteen (15) Business Day period shall constitute an “Event
of Default” hereunder.

 

Section 18.30. Cooperation with Rating
Agencies. Borrower covenants and agrees that in the event the Loan is to be
included as an asset of a Securitization, Borrower shall, at the sole cost and
expense of Lender, provided that Lender shall only be obligated to reimburse
Borrower for reasonable and actual out-of-pocket third party costs incurred by
Borrower, (a) gather any information reasonably required by each Rating Agency
in connection with such a Securitization, (b) at Lender’s request, meet with
representatives of each Rating Agency to discuss the business and operations of
the Property, and (c) cooperate with the reasonable requests of each Rating
Agency and Lender in connection with all of the foregoing as well as in
connection with all other matters and the preparation of any offering documents
with respect thereto, including, without limitation, entering into any
amendments or modifications to this Security Instrument or to any other Loan
Document which may be requested by Lender to conform to Rating Agency or market
standards for a Securitization provided that no such modification shall modify (a)
the interest rate payable under the Note, (b) the stated maturity of the Note,
(c) the amortization of principal under the Note, (d) Section 18.32 hereof, (e)
any other economic term of the Loan or (f) any provision, the effect of which
would increase Borrower’s obligations or decrease Borrower’s rights under the
Loan Documents. Borrower acknowledges that the information provided by Borrower
to Lender may be incorporated into the offering documents for a Securitization
and, to the fullest extent permitted, Borrower irrevocably waives all rights,
if any, to prohibit such disclosures including, without limitation, any right
of privacy. Lender and each Rating Agency shall be entitled to rely on the
information supplied by, or on behalf of, Borrower and Borrower indemnifies and
holds harmless the Indemnified Parties, their Affiliates and each Person who
controls such Persons within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as same may be amended from
time to time, for, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation,
reasonable attorneys’ fees and disbursements, that arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in such information or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated in such
information or necessary in order to make the statements in such information,
in light of the circumstances under which they were made, not misleading (collectively,
“Securities Liabilities”); provided, however, that Borrower will be
liable under the foregoing indemnity only to the extent that such Securities
Liabilities arise out of, or are 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 or its Affiliates in connection
with the preparation of the disclosure documents or in connection with the
underwriting of the Loan; and provided further, however, that with respect to
information provided by third parties and with respect to statements made in
the disclosure documents that are based upon information provided by third
parties, Borrower will be liable only if Borrower or its Affiliates knew that such
information was false or omitted to state a material fact known to

 

106

 

Borrower and necessary to make the statements
made, in light of the circumstances under which they were made, not misleading.

 

Section 18.31. Securitization Financials.
Borrower covenants and agrees that, upon Lender’s written request therefor in
connection with a Securitization, Borrower shall, at Lender’s sole cost and
expense, (a) promptly deliver audited financial statements and related
documentation prepared by an Independent certified public accountant that
satisfy securities laws and requirements for use in a public registration
statement (which may include up to three (3) years of historical audited (if
available) financial statements) and (b) if, at the time one or more Disclosure
Documents are being prepared in connection with a Securitization, Lender
expects that Borrower alone or Borrower and one or more of its Affiliates
collectively, or the Property alone or the Property and any other parcel(s) of
real property, together with improvements thereon and personal property related
thereto, that is “related”, within the meaning of the definition of Significant
Obligor, to the Property (a “Related Property”) collectively, will be a
Significant Obligor, Borrower shall furnish to Lender upon request (i) the
selected financial data relating to Borrower or the Property or, if applicable,
net operating income of the Property, required under Item 1112(b)(1) of
Regulation AB and meeting the requirements thereof, if Lender expects that the
principal amount of the Loan, together with any loans made to an Affiliate of
Borrower or secured by a Related Property that is included in a Securitization
with the Loan (a “Related Loan”), as of the cut-off date for such
Securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such Securitization 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 relating to
Borrower or the Property required under Item 1112(b)(2) of Regulation AB and
meeting the requirements thereof, if Lender expects that the principal amount
of the Loan together with any Related Loans as of the cut-off date for such
Securitization may, or if the principal amount of the Loan together with any
Related Loans as of the cut-off date for such Securitization 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 required by clause (b) hereof shall
be furnished to Lender within ten (10) Business Days after notice from Lender
in connection with the preparation of Disclosure Documents for the
Securitization and, with respect to the data or financial statements required
pursuant to clause (b) hereof, (A) not later than forty-five (45) days after
the end of each fiscal quarter of Borrower and (B) not later than eighty-five
(85) days after the end of each Fiscal Year; provided, however, that Borrower
shall not be obligated to furnish financial data or financial statements
pursuant to clauses (A) or (B) of this sentence with respect to any period for
which a filing pursuant to the Securities Exchange Act of 1934 in connection
with or relating to the Securitization is not required.

 

Section 18.32. Exculpation. Notwithstanding
anything herein or in any other Loan Document to the contrary, except as
otherwise set forth in this Section 18.32 to the contrary, Lender shall not
enforce the liability and obligation of Borrower or (a) if Borrower is a
partnership, its constituent partners or any of their respective partners, (b)
if Borrower is a trust, its beneficiaries or any of their respective Partners
(as hereinafter defined), (c) if Borrower is a corporation, any of its
shareholders, directors, principals, officers or employees, or (d) if Borrower
is a limited liability company, any of its members (the Persons described in
the

 

107

 

foregoing clauses (a) - (d), as the case may
be, are hereinafter referred to as the “Partners”) to perform and
observe the obligations contained in this Security Instrument or any of the
other Loan Documents by any action or proceeding wherein a money judgment shall
be sought against Borrower or the Partners, except that Lender may bring a
foreclosure action, action for specific performance, or other appropriate
action or proceeding (including, without limitation, an action to obtain a
deficiency judgment) solely for the purpose of enabling Lender to realize upon
(i) Borrower’s interest in the Property, (ii) the Rent to the extent received
by Borrower after (and during the existence of) an Event of Default and not
applied to Property-related expenses or sums due Lender under the Loan
Documents (all Rent covered by this clause (ii) being hereinafter referred to
as the “Recourse Distributions”) and (iii) any other collateral given to
Lender under the Loan Documents (the collateral described in the foregoing
clauses (i) - (iii) is hereinafter referred to as the “Default Collateral”);
provided, however, that any judgment in any such action or
proceeding shall be enforceable against Borrower and the Partners only to the
extent of any such Default Collateral. The provisions of this Section shall
not, however, (a) impair the validity of the Debt evidenced by the Note or in
any way affect or impair the lien of this Security Instrument or any of the
other Loan Documents or the right of Lender to foreclose this Security
Instrument following the occurrence of an Event of Default; (b) impair the right
of Lender to name Borrower as a party defendant in any action or suit for
judicial foreclosure and sale under this Security Instrument; (c) affect the
validity or enforceability of the Note, this Security Instrument, or any of the
other Loan Documents, or impair the right of Lender to seek a personal judgment
against Guarantor; (d) impair the right of Lender to obtain the appointment of
a receiver; (e) impair the enforcement of the Assignment; (f) impair the right
of Lender to bring suit for a monetary judgment with respect to losses incurred
by Lender by reason of fraud or intentional misrepresentation by Borrower in
connection with this Security Instrument, the Note or the other Loan Documents,
and the foregoing provisions shall not modify, diminish or discharge the
liability of Borrower with respect to same; (g) impair the right of Lender to
bring suit for a monetary judgment to obtain the Recourse Distributions
received by Borrower, and the foregoing provisions shall not modify, diminish
or discharge the liability of Borrower with respect to same; (h) impair the
right of Lender to bring suit for a monetary judgment with respect to losses
incurred by Lender by reason of Borrower’s misappropriation of tenant security
deposits, and the foregoing provisions shall not modify, diminish or discharge
the liability of Borrower with respect to same; (i) impair the right of Lender
to obtain Loss Proceeds due to Lender pursuant to this Security Instrument; (j)
impair the right of Lender to enforce the provisions of Sections 2.02(g),
12.01, 16.01 or 16.02, inclusive of this Security Instrument, even after
repayment in full by Borrower of the Debt, or to bring suit for a monetary
judgment against Borrower with respect to any obligation set forth in said
Sections; (k) prevent or in any way hinder Lender from exercising, or
constitute a defense, or counterclaim, or other basis for relief in respect of
the exercise of, any other remedy against any or all of the collateral securing
the Note as provided in the Loan Documents; (l) impair the right of Lender to
bring suit for a monetary judgment with respect to any losses incurred by
Lender by reason of misapplication or conversion by Borrower or any Affiliate
of Borrower of Loss Proceeds, and the foregoing provisions shall not modify,
diminish or discharge the liability of Borrower with respect to same; (m)
impair the right of Lender to sue for, seek or demand a deficiency judgment
against Borrower solely for the purpose of foreclosing the Property or any part
thereof, or realizing upon the Default Collateral; provided, however,
that any such deficiency judgment referred to in this

 

108

 

clause (m) shall be enforceable against
Borrower only to the extent of any of the Default Collateral; (n) impair the
ability of Lender to bring suit for a monetary judgment with respect to losses
incurred by Lender by reason of physical damage, arson or physical waste to or
of the Property or, to the extent that there is sufficient cash flow, and unless
Borrower is contesting the same in accordance with Section 4.04, failure to pay
any Real Estate Taxes, or in lieu thereof, deposit a sum equal to any Real
Estate Taxes into the Basic Carrying Costs Sub-Account; (o) impair the right of
Lender to bring a suit for a monetary judgment with respect to losses incurred
by Lender by reason of the exercise of any right or remedy under any federal,
state or local forfeiture laws resulting in the loss of the lien of this
Security Instrument, or the priority thereof, against the Property as a result
of the criminal acts or omissions of Borrower or Guarantor or any Affiliates
thereof; (p) be deemed a waiver of any right which Lender may have under
Sections 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code
to file a claim for the full amount of the Debt or to require that all
collateral shall continue to secure all of the Debt; (q) impair the right of
Lender to bring suit for monetary judgment with respect to any losses resulting
from any claims, actions or proceedings initiated by Borrower (or any Affiliate
of Borrower) alleging that the relationship of Borrower and Lender under the
Loan Documents is that of joint venturers, partners, tenants in common, joint
tenants or any relationship other than that of debtor and creditor; or (r)
impair the right of Lender to bring suit for a monetary judgment with respect
to losses incurred by Lender by reason of a voluntary Transfer in violation of
the provisions of Article IX hereof. The provisions of this Section 18.32 shall
be inapplicable to Borrower if (a) any proceeding, action, petition or filing
under the Bankruptcy Code, or any similar state or federal law now or hereafter
in effect relating to bankruptcy, reorganization or insolvency, or the arrangement
or adjustment of debts affecting Borrower, shall be filed by Borrower, or (b)
Borrower or Guarantor or any Affiliate of either of them shall collude to have
any such proceeding, action, petition or filing instituted against Borrower or
shall otherwise institute any proceeding for Borrower’s dissolution or
liquidation.

 

Section 18.33. Component Notes. Lender,
without in any way limiting Lender’s other rights hereunder, in its sole and
absolute discretion, shall have the right at any time to require Borrower to
execute and deliver “component” notes (including senior and junior notes) in
substitution for the Note, which notes may be paid in such order of priority as
may be designated by Lender, provided that (a) the aggregate principal amount
of such “component” notes shall equal the outstanding principal balance of the
Loan immediately prior to the creation of such “component” notes, (b) the
weighted average interest rate of all such “component” notes shall on the date
created equal the interest rate which was applicable to the Loan immediately
prior to the creation of such “component” notes, (c) the debt service payments
on all such “component” notes shall on the date created equal the debt service
payment which was due under the Note immediately prior to the creation of such “component”
notes, and (d) the other terms and provisions of each of the “component” notes
shall be identical in substance and substantially similar in form to the Loan
Documents. Borrower shall cooperate with all reasonable requests of Lender in
order to establish the “component” notes and shall execute and deliver such
documents as shall reasonably be required by Lender in connection therewith,
all in form and substance reasonably satisfactory to Lender, including, without
limitation, the severance of security documents if requested. Lender shall pay
Borrower’s reasonable expenses in connection with the execution and delivery of
such “component” notes. It shall be an Event of Default if 

 

109

 

Borrower fails to comply with any of the
terms, covenants or conditions of this Section 18.33 after the expiration of
fifteen (15) Business Days after notice thereof.

 

Section 18.34. Certain Matters Relating to
Property located in the State of Illinois. With respect to the Property
which is located in the State of Illinois, notwithstanding anything contained
herein to the contrary:

 

(a)           COMPLIANCE WITH
ILLINOIS MORTGAGE FORECLOSURE LAW.

 

If any provision in this Security Instrument
is determined to be inconsistent with any provision of the Illinois Mortgage
Foreclosure Law (735 ILCS 5/15-1101 et seq., as amended) (the “IMFL”),
the provisions of the IMFL shall take precedence over the provisions of this
Security Instrument, but shall not invalidate or render unenforceable any other
provisions of this Security Instrument that can be construed in a manner
consistent with the IMFL.

 

If any provision of this Security Instrument
shall grant to Lender any rights or remedies upon an Event of Default which are
more limited than the rights that would otherwise be vested in Lender under the
IMFL in the absence of such provision, Lender shall be vested with the rights
granted in the IMFL to the full extent permitted by law.

 

Without limiting the generality of the foregoing,
all expenses incurred by Lender to the extent reimbursable under Sections
15-1510 and 15-1512 of the IMFL, whether incurred before or after any decree or
judgment of foreclosure, and whether enumerated in this Security Instrument,
shall be added to the Debt secured by this Security Instrument or by the
judgment of foreclosure.

 

Without limiting the generality of the
foregoing, this Security Instrument also secures all future advances including “Protective
Advances” (as defined in the IMFL) made pursuant to the terms of this Security
Instrument or the other Loan Documents made after this Security Instrument is
recorded, including but not limited to all monies so advanced by Lender in
accordance with the terms of this Security Instrument to (A) preserve or
restore the Property, (B) preserve the lien of this Security Instrument or the
priority thereof or (C) enforce this Security Instrument, and, to the full
extent permitted by Subsection (b)(5) of Section 15-1302 of the IMFL or other
law, shall be a lien from the time this Security Instrument is recorded.

 

(b)           WAIVER OF STATUTORY RIGHTS. BORROWER
ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS SECURITY INSTRUMENT IS A PART
IS A TRANSACTION WHICH DOES NOT INCLUDE EITHER AGRICULTURAL REAL ESTATE (AS
DEFINED IN SECTION 15-1201 OF THE IMFL), OR RESIDENTIAL REAL ESTATE (AS DEFINED
IN SECTION 15-1219 OF THE IMFL), AND TO THE FULL EXTENT PERMITTED BY LAW,
VOLUNTARILY AND KNOWINGLY WAIVES BORROWER’S RIGHTS AND THE RIGHTS OF EACH AND
EVERY PERSON ACQUIRING AN INTEREST IN OR TITLE TO THE PROPERTY OF ANY NATURE
WHATSOEVER SUBSEQUENT TO THE DATE OF THIS SECURITY INTEREST TO REINSTATEMENT
AND REDEMPTION AS ALLOWED UNDER SECTION 15-1601(B) OF THE IMFL, AND TO THE FULL
EXTENT PERMITTED BY

 

110

 

LAW, THE BENEFITS OF ALL PRESENT AND FUTURE
VALUATION, APPRAISEMENT, HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM
LAWS UNDER ANY STATE OR FEDERAL LAW.

 

(c)           FIXTURE FILING. THIS
INSTRUMENT IS EFFECTIVE AND SHALL BE EFFECTIVE AS A FINANCING STATEMENT FILED
AS A FIXTURE FILING WITH RESPECT TO ALL GOODS WHICH ARE OR ARE TO BECOME
FIXTURES INCLUDED WITHIN THE PROPERTY AND IS TO BE FILED FOR RECORD OR
REGISTERED IN THE REAL ESTATE RECORDS OF THE COUNTY IN WHICH THE PREMISES IS
LOCATED. THE ADDRESS OF LENDER [SECURED PARTY] AND THE MAILING ADDRESS OF
BORROWER [DEBTOR] ARE SET FORTH WITHIN. A PHOTOGRAPHIC OR OTHER REPRODUCTION OF
THIS INSTRUMENT OR ANY FINANCING STATEMENT RELATING TO THIS INSTRUMENT SHALL BE
SUFFICIENT AS A FINANCING STATEMENT.

 

(d)           MAXIMUM AMOUNT
SECURED. Borrower and Lender intend that this Security Instrument shall
secure not only sums advanced as of the date hereof but also all advances
provided for in the Loan Documents; provided however that the maximum amount
secured by this Security Instrument shall in no event exceed $260,000,000.00.

 

(e)           BUSINESS LOAN. Borrower
represents and agrees that the obligations secured hereby constitute a business
loan within the purview of paragraph 1(c) of Section 4 of the Illinois Interest
Act, 815 ILCS 205/1 et seq., as amended, transacted solely for the purpose of
carrying on or acquiring the business of Borrower, and also constitutes a loan
secured by a mortgage which comes within the purview of subparagraph 1(l) of
said Section.

 

(f)            MATURITY DATE. The
maturity date of the Loan is the Payment Date occurring in August, 2011.

 

(g)           MORTGAGEE-IN-POSSESSION.
In addition to any provision of this Security Instrument authorizing Lender to
take or be placed in possession of the Premises, or for the appointment of a
receiver, Lender shall have the right, in accordance with Sections 5/15-1701
and 5/15-1702 of the IMFL, to be placed in possession of the Premises or at its
request to have a receiver appointed, and such receiver, or Lender, if and when
placed in possession, shall have, in addition to any other powers provided in
this Security Instrument, all powers, immunities and duties as provided for in
Sections 2/15-1701 and 5/15-1702 of the IMFL.

 

(h)           INSURANCE. Notwithstanding
the provisions of Article III hereof, if Borrower fails to provide Lender
evidence of the insurance coverages required pursuant to the provisions of this
Security Instrument, Lender may purchase such insurance at Borrower’s expense
to cover Lender’s interest in the Premises. The insurance may, but need not,
protect Borrower’s interest. The coverages that Lender purchases may not pay
any claim that Borrower makes or any claim that is made against Borrower in
connection with the Premises. Borrower may later cancel any insurance purchased
by Lender but only after providing Lender with evidence that Borrower has
obtained such insurance as required pursuant to Article III of this Security
Instrument. If Lender purchased insurance for the Premises, Borrower will be
responsible for the costs of such

 

111

 

insurance, including, without limitation,
interest and any other charges which Lender may impose in connection with the
placement of the insurance, until the effective date of the cancellation and
the expiration of the insurance. The cost of the insurance may be added to the
Debt. The cost of the insurance may be more than the cost of the insurance
Borrower may be able to obtain on its own.

 

*  
*   *   *   *

 

112

 

IN WITNESS
WHEREOF, Borrower has duly executed this Security Instrument the day and year
first above written.

 

 

	
  Borrower’s

  	
  BORROWER:

  
	
  Organizational

  	
   

  
	
  Identification
  Number:

  	
  ONE
  FINANCIAL PLACE PROPERTY LLC,

  
	
  4136784

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BCSP IV
  Illinois Manager LLC,

  
	
   

  	
   

  	
  a Delaware
  limited liability company,

  
	
   

  	
   

  	
  its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BCSP IV U.S.
  Investments, L.P.,

  
	
   

  	
   

  	
   

  	
  a Delaware
  limited partnership,

  
	
   

  	
   

  	
   

  	
  its sole
  member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  BCSP REIT
  IV, Inc.,

  
	
   

  	
   

  	
   

  	
   

  	
  a Maryland
  corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: Nancy
  J. Broderick

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:
  Managing Director

  

 

 

ACKNOWLEDGEMENT

 

	
  COMMONWEALTH
  OF MASSACHUSETTS

  	
  )

  
	
   

  	
  )
  ss

  
	
  COUNTY
  OF SUFFOLK

  	
  )

  

 

Then
personally appeared before me, on the    day of         ,
2006, the above named Nancy J. Broderick, the Managing Director of BCSP REIT
IV, Inc., the general partner of BCSP IV U.S. Investments, L.P., the sole
member of BCSP IV Illinois Manager LLC, the manager of One Financial Place
Property LLC, personally known to me to be (or who provided to me a
Massachusetts driver’s license evidencing that she is) the person whose name is
signed on the preceding document, and acknowledged the foregoing instrument to
be her free act and deed in her capacity as aforesaid and the free act and deed
of each of said entities.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
  My
  Commission Expires:

  

 

 

EXHIBIT A

 

Legal Description of Premises

 

 

Legal Description:

 

PARCEL 1:

 

THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL
SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39
NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN DESCRIBED AS FOLLOWS:

 

COMMENCING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID SUBDIVISION OF BLOCK 114) A DISTANCE OF 232.32 FEET TO THE
POINT OF BEGINNING OF THE TRACT HEREIN DESCRIBED; THENCE SOUTH 0 DEGREES 00
MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 15, 16, 21 AND 22 IN SAID
SUBDIVISION OF BLOCK 114) A DISTANCE OF 133.22 FEET TO A POINT ON THE EAST LINE
OF LOT 22 WHICH IS 31.98 FEET NORTHERLY OF THE SOUTHEAST CORNER OF SAID LOT;
THENCE SOUTH 89 DEGREES 55 MINUTES 58 SECONDS WEST, A DISTANCE OF 215.15 FEET
TO A POINT ON THE WEST LINE OF LOT 24 IN PETER TEMPLE’S SUBDIVISION OF BLOCK 99
WHICH IS 31.18 FEET NORTHERLY OF THE SOUTHEAST CORNER OF SAID LOT; THENCE NORTH
0 DEGREES 01 MINUTES 21 SECONDS WEST (ALONG THE WEST LINE OF LOTS 24, 19, 18
AND 13 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF
134.17 FEET TO A POINT ON THE WEST LINE OF LOT 13 WHICH IS 232.32 FEET
SOUTHERLY OF THE NORTHWEST CORNER OF LOT 1 IN THE AFORESAID PETER TEMPLE’S
SUBDIVISION; THENCE SOUTH 89 DEGREES 48 MINUTES 43 SECONDS EAST (ALONG A LINE
DRAWN PARALLEL WITH THE NORTH LINE OF LOT 3 IN SAID SUBDIVISION OF BLOCK 114
AND ALSO PARALLEL WITH THE NORTH LINE OF LOT 1 IN THE AFORESAID PETER TEMPLE’S
SUBDIVISION OF BLOCK 99) A DISTANCE OF 215.19 FEET TO THE HEREINABOVE DESCRIBED
POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.

 

PARCEL 2:

 

THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, THAT PART OF THE SUBDIVISION OF BLOCK
114, AND THAT PART OF GEORGE MERRILL’S SUBDIVISION OF BLOCK 100, AND THAT PART
OF T. G. WRIGHT’S SUBDIVISION OF BLOCK 113 (TAKEN AS A TRACT, INCLUDING VACATED
ALLEYS) ALL IN THE SCHOOL SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF
SECTION 16, TOWNSHIP 39 NORTH, RANGE 14 EAST OF

 

 

THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:

 

BEGINNING AT A
POINT ON THE EAST LINE OF LOT 22 IN THE SUBDIVISION OF BLOCK 114 WHICH IS 31.98
FEET NORTHERLY OF THE SOUTHEAST CORNER THEREOF; THENCE SOUTH 0 DEGREES 00
MINUTES 23 SECONDS EAST, 31.98 FEET TO THE SOUTHEAST CORNER OF SAID LOT 22;
THENCE SOUTH 89 DEGREES 51 MINUTES 16 SECONDS EAST, ALONG THE NORTH LINE OF LOT
1 IN T. G. WRIGHTS SUBDIVISION OF BLOCK 113, A DISTANCE OF 0.14 FEET TO THE
NORTHEAST CORNER OF SAID LOT; THENCE SOUTH 0 DEGREES 05 MINUTES 33 SECONDS
WEST, ALONG THE EAST LINE OF LOTS 1 AND 6 IN THE AFORESAID T. G. WRIGHT’S
SUBDIVISION OF BLOCK 113, A DISTANCE OF 94.83 FEET; THENCE SOUTH 89 DEGREES 55
MINUTES 40 SECONDS WEST, A DISTANCE OF 210.30 FEET TO A POINT ON THE WEST LINE
OF LOT 23 IN GEORGE MERRILL’S SUBDIVISION OF BLOCK 100 WHICH IS 95.63 SOUTHERLY
OF THE NORTHWEST CORNER OF LOT 24 IN SAID SUBDIVISION; THENCE NORTH 0 DEGREES
02 MINUTES 20 SECONDS WEST, ALONG THE WEST LINES OF THE AFORESAID LOTS 23 AND
24, A DISTANCE OF 95.63 FEET TO THE NORTHWEST CORNER OF SAID LOT 24 IN GEORGE
MERRILL’S SUBDIVISION OF BLOCK 100; THENCE NORTH 89 DEGREES 51 MINUTES 16
SECONDS WEST, ALONG THE SOUTH LINE OF LOT 24 IN PETER TEMPLE’S SUBDIVISION OF
BLOCK 99, A DISTANCE OF 4.77 FEET TO THE SOUTHWEST CORNER OF SAID LOT; THENCE
NORTH 0 DEGREES 01 MINUTES 21 SECONDS WEST, ALONG THE WEST LINE OF THE
AFORESAID LOT 24, A DISTANCE OF 31.18 FEET; THENCE NORTH 89 DEGREES 55 MINUTES
58 SECONDS EAST, A DISTANCE OF 215.15 FEET TO THE HEREINABOVE DESCRIBED POINT
OF BEGINNING, IN COOK COUNTY, ILLINOIS.

 

PARCEL 3:
 PARCEL 3 IS LISTED HERE IN SCHEDULE A FOR REFERENCE PURPOSES ONLY AND IS
NOT PART OF THE LAND INSURED HEREIN.

 

THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL SECTION
ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39 NORTH,
RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:

 

BEGINNING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID SUBDIVISION OF BLOCK 114) A DISTANCE OF 232.32 FEET;
THENCE NORTH 89 DEGREES 48 MINUTES 43 SECONDS WEST (ALONG A LINE DRAWN PARALLEL
WITH THE NORTH LINE OF LOT 3 IN SAID SUBDIVISION OF BLOCK 114 AND

 

 

ALSO PARALLEL
WITH THE NORTH LINE OF LOT 1 THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK
99) A DISTANCE OF 215.19 FEET TO THE WEST LINE OF LOT 13 IN SAID PETER TEMPLE’S
SUBDIVISION; THENCE NORTH 0 DEGREES 01 MINUTES 21 SECONDS WEST (ALONG THE WEST
LINE OF LOTS 13, 12, 7, 6 AND 1 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF
BLOCK 99) A DISTANCE OF 232.32 FEET TO THE NORTHWEST CORNER OF LOT 1; THENCE
SOUTH 89 DEGREES 48 MINUTES 43 SECONDS EAST, 215.25 FEET TO THE HEREINABOVE
DESIGNATED POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.

 

PARCEL 3A:

 

EASEMENTS FOR
THE BENEFIT OF PARCEL 1, AFORESAID, AS SHOWN ON THE SURVEY OF LAND PREPARED BY
JOSEPH A. LIMA, REGISTERED PROFESSIONAL SURVEYOR FOR THE STATE OF ILLINOIS,
LICENSE NUMBER 3080, OF NATIONAL SURVEY SERVICE, INC. (SURVEYOR), SURVEY NUMBER
N-123180, LAST UPDATED ON MARCH 16, 2000, AS SET FORTH IN PARAGRAPH 1 B OF THE
GRANT OF EASEMENTS EXECUTED BY THE PENN CENTRAL CORPORATION, ET AL, DATED APRIL
3, 1981 AND RECORDED AS DOCUMENT NO. 26017406, AND AS AMENDED BY DOCUMENT
26382162 FOR THE PURPOSE OF PEDESTRIAN INGRESS AND EGRESS ON, OVER AND THROUGH
AN ENCLOSED CORRIDOR, AT LEAST 20 FEET WIDE, ALONG THE GEOGRAPHIC CENTER (PLUS
OR MINUS 5 FEET) ON A STRAIGHT LINE FROM THE NORTH BOUNDARY LINE TO THE SOUTH
BOUNDARY LINE OF THE FOLLOWING DESCRIBED REAL ESTATE LOCATED NORTH OF AND
ADJOINING THE LAND, SAID CORRIDOR TO BE IN THE “CHICAGO BOARD OF OPTIONS
EXCHANGE (CBOE) BUILDING” AND ANY IMPROVEMENTS CONSTRUCTED ON SAID ADJOINING
LAND FROM TIME TO TIME:

 

THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL
SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39 NORTH,
RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:

 

BEGINNING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID SUBDIVISION OF BLOCK 114) A DISTANCE OF 232.32 FEET;
THENCE NORTH 89 DEGREES 48 MINUTES 43 SECONDS WEST (ALONG A LINE DRAWN PARALLEL
WITH THE NORTH LINE OF LOT 3 IN SAID SUBDIVISION OF BLOCK 114 AND ALSO PARALLEL
WITH THE NORTH LINE OF LOT 1 IN THE AFORESAID PETER

 

 

TEMPLE’S
SUBDIVISION OF BLOCK 99) A DISTANCE OF 215.19 FEET TO THE WEST LINE OF LOT 13
IN SAID PETER TEMPLE’S SUBDIVISION; THENCE NORTH 0 DEGREES 01 MINUTES 21
SECONDS WEST (ALONG THE WEST LINE OF LOTS 13, 12, 7, 6 AND 1 IN THE AFORESAID
PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF 232.32 FEET TO THE
NORTHWEST CORNER OF LOT 1; THENCE SOUTH 89 DEGREES 48 MINUTES 43 SECONDS EAST,
215.25 FEET TO THE HEREINABOVE DESIGNATED POINT OF BEGINNING, IN COOK COUNTY,
ILLINOIS.

 

PARCEL 3B:

 

EASEMENT FOR
THE BENEFIT OF PARCEL 1, AFORESAID, AS SHOWN ON THE SURVEY OF LAND PREPARED BY
SURVEYOR, SURVEY NUMBER N-123180, LAST UPDATED ON MARCH 16, 2000 AS SET FORTH
IN THE RECIPROCAL UNDERGROUND CAISSON EASEMENT AGREEMENT RECORDED JULY 15, 1982
AS DOCUMENT 26290689 BETWEEN AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO AS TRUSTEE UNDER TRUST AGREEMENT DATED FEBRUARY 26, 1982 KNOWN AS TRUST
NUMBER 54793 AND EXCHANGE NATIONAL BANK OF CHICAGO AS TRUSTEE UNDER TRUST
AGREEMENT DATED APRIL 20, 1982 KNOWN AS TRUST NUMBER 39787 GRANTING THE RIGHT,
AUTHORITY AND EASEMENT TO CONSTRUCT AND MAINTAIN, IN CONNECTION WITH THE
CONSTRUCTION OF THE BUILDING LOCATED ON PARCEL 1, UNDERGROUND CAISSONS WHICH
ENCROACH UPON A PORTION OF THE UNDERGROUND WHICH UNDERLIES PARCEL 3, NOT TO
EXTEND NORTH OF A LINE WHICH LIES THREE FEET NORTH OF AND PARALLEL TO THE SOUTH
BOUNDARY OF PARCEL 3 NOR BE CONSTRUCTED ABOVE A HORIZONTAL PLANE WHOSE
UNDERGROUND DEPTH LEVEL IS THE LOWER OF THIRTY FIVE FEET BELOW CHICAGO CITY
DATUM, OR TEN FEET BELOW THE BOTTOM OF ANY PORTION OF THE FOUNDATION OF THE
CBOE BUILDING WHICH LIES ON PARCEL 3 AT OR SOUTH OF A LINE LYING THREE FEET
NORTH OF AND PARALLEL TO THE SOUTH BOUNDARY OF PARCEL 3, FALLING WITHIN THE
FOLLOWING DESCRIBED REAL ESTATE:

 

THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL
SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39
NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:

 

BEGINNING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID SUBDIVISION OF BLOCK 114) A DISTANCE OF 232.32 FEET;
THENCE NORTH 89

 

 

DEGREES 48
MINUTES 43 SECONDS WEST (ALONG A LINE DRAWN PARALLEL WITH THE NORTH LINE OF LOT
3 IN SAID SUBDIVISION OF BLOCK 114 AND ALSO PARALLEL WITH THE NORTH LINE OF LOT
1 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF 215.19
FEET TO THE WEST LINE OF LOT 13 IN SAID PETER TEMPLE’S SUBDIVISION; THENCE
NORTH 0 DEGREES 01 MINUTES 21 SECONDS WEST (ALONG THE WEST LINE OF LOTS 13, 12,
7, 6 AND 1 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE
OF 232.32 FEET TO THE NORTHWEST CORNER OF LOT 1; THENCE SOUTH 89 DEGREES 48
MINUTES 43 SECONDS EAST, 215.25 FEET TO THE HEREINABOVE DESIGNATED POINT OF
BEGINNING, IN COOK COUNTY, ILLINOIS.

 

PARCEL 3C:

 

OPTIONS FOR
EASEMENTS FOR THE BENEFIT OF PARCEL 2, AFORESAID, AS SHOWN ON THE SURVEY OF
LAND PREPARED BY SURVEYOR, SURVEY NUMBER N-123180, LAST UPDATED ON MARCH 16,
2000, AS SET FORTH IN GRANT OF EASEMENTS, OPTIONS FOR EASEMENTS, OPTION TO
LEASE AND DECLARATION OF COVENANTS AND RESTRICTIONS CONTAINED IN INSTRUMENT
RECORDED APRIL 1, 1981 AS DOCUMENT 25824625 AND FIRST AMENDMENT RECORDED AS
DOCUMENT 26363994 MADE BY AND BETWEEN THE PENN CENTRAL CORPORATION, WILLIAM M.
GIBBONS, TRUSTEE OF THE PROPERTY OF CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD
COMPANY AND THE REGIONAL TRANSPORTATION AUTHORITY FOR:

 

(A) AN
INTERIOR PEDESTRIAN EASEMENT ON, OVER AND THROUGH A STRIP OF PROPERTY TWENTY
FEET WIDE, ALONG THE GEOGRAPHIC CENTER OF PARCEL 3 (PLUS OR MINUS FIVE FEET OF
THE GEOGRAPHIC CENTER THEREOF) ON A STRAIGHT LINE FROM THE NORTH BOUNDARY OF
PARCEL 3 TO THE SOUTHERN BOUNDARY OF PARCEL 3 AND;

 

(B) A STREET
GRADE PEDESTRIAN EXTERIOR EASEMENT ALONG THE EAST OR WEST LINES OF PARCEL 3,
FALLING WITHIN THE FOLLOWING DESCRIBED REAL ESTATE:

 

THAT PART OF
PETER TEMPLE’S SUBDIVISION OF BLOCK 99, AND THAT PART OF THE SUBDIVISION OF
BLOCK 114 (TAKEN AS A TRACT, INCLUDING VACATED ALLEYS) ALL IN THE SCHOOL
SECTION ADDITION TO CHICAGO, IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP 39
NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:

 

BEGINNING AT
THE NORTHEAST CORNER OF LOT 3 IN THE AFORESAID SUBDIVISION OF BLOCK 114; THENCE
SOUTH 0 DEGREES 00 MINUTES 23 SECONDS EAST (ALONG THE EAST LINE OF LOTS 3, 4,
9, 10 AND 15 IN SAID

 

 

SUBDIVISION OF
BLOCK 114) A DISTANCE OF 232.32 FEET; THENCE NORTH 89 DEGREES 48 MINUTES 43
SECONDS WEST (ALONG A LINE DRAWN PARALLEL WITH THE NORTH LINE OF LOT 3 IN SAID
SUBDIVISION OF BLOCK 114 AND ALSO PARALLEL WITH THE NORTH LINE OF LOT 1 IN THE
AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF 215.19 FEET TO
THE WEST LINE OF LOT 13 IN SAID PETER TEMPLE’S SUBDIVISION; THENCE NORTH 0
DEGREES 01 MINUTES 21 SECONDS WEST (ALONG THE WEST LINE OF LOTS 13, 12, 7, 6
AND 1 IN THE AFORESAID PETER TEMPLE’S SUBDIVISION OF BLOCK 99) A DISTANCE OF
232.32 FEET TO THE NORTHWEST CORNER OF LOT 1; THENCE SOUTH 89 DEGREES 48
MINUTES 43 SECONDS EAST, 215.25 FEET TO THE HEREINABOVE DESIGNATED POINT OF
BEGINNING, IN COOK COUNTY, ILLINOIS.

 

PARCEL 4:

 

EASEMENTS FOR THE
BENEFIT OF PARCELS 1 AND 2, AFORESAID, AS SHOWN ON THE SURVEY OF LAND PREPARED
BY SURVEYOR, SURVEY NUMBER N-123180, LAST UPDATED ON MARCH 16, 2000 AS SET
FORTH IN PARAGRAPH 1(B) (III) OF THE DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS FOR THE ESTABLISHMENT OF EXCHANGE CENTER PLAZA AND GRANT OF
EASEMENT FOR UNDERGROUND PARKING GARAGE EXECUTED BY THE CITY OF CHICAGO, ET AL,
DATED APRIL 11, 1983 RECORDED APRIL 14, 1983 AS DOCUMENT 26569966, AS
SUPPLEMENTED BY SUPPLEMENT DATED AUGUST 2, 1984 RECORDED AUGUST 7, 1984 AS
DOCUMENT 27204188 FOR THE PURPOSE OF THE CONSTRUCTION, OPERATION AND
MAINTENANCE OF AN UNDERGROUND PARKING GARAGE, ACCESS RAMPS AND UTILITY LINES ON
THE FOLLOWING DESCRIBED PARCEL:

 

THAT PART OF
BLOCK 99 IN SCHOOL SECTION ADDITION TO CHICAGO IN THE NORTHEAST 1/4 OF SECTION
16, TOWNSHIP 39 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, BEING A
TRACT LYING BELOW PLUS 22.0 FEET, CHICAGO CITY DATUM, SAID TRACT BEING
DESCRIBED AS FOLLOWS:

 

BEGINNING AT
THE NORTHWEST CORNER OF LOT 1 IN PETER TEMPLE’S SUBDIVISION OF THE AFORESAID
BLOCK 99; THENCE NORTH 89 DEGREES 48 MINUTES 43 SECONDS WEST, 40.00 FEET TO THE
NORTHEAST CORNER OF LOT 1 IN COLE’S SUBDIVISION OF PART OF SAID BLOCK 99;
THENCE CONTINUING NORTH 89 DEGREES 48 MINUTES 43 SECONDS WEST, 85.83 FEET ALONG
THE NORTH LINE OF SAID LOT 1 IN COLE’S SUBDIVISION AND ALONG THE NORTH LINE OF
LOTS 1 AND 2 IN THE ASSESSOR’S DIVISION OF PART OF SAID BLOCK 99 AND ALONG THE
NORTH LINE OF MICAJAH GLASCOCK’S SUBDIVISION OF PART OF SAID BLOCK 99 TO A
POINT; THENCE SOUTH 0

 

 

DEGREES 02
MINUTES 07 SECONDS EAST, 367.05 FEET TO THE POINT OF INTERSECTION WITH THE
WESTERLY EXTENSION OF A LINE DRAWN FROM A POINT ON THE EAST LINE OF LOT 22, IN
THE SUBDIVISION OF BLOCK 114 IN THE AFORESAID SCHOOL SECTION ADDITION TO
CHICAGO, SAID POINT BEING 31.98 FEET NORTH OF THE SOUTHEAST CORNER OF SAID LOT
22 TO A POINT ON THE WEST LINE OF LOT 24, IN THE AFORESAID PETER TEMPLE’S
SUBDIVISION, SAID POINT BEING 31.18 FEET NORTH OF THE SOUTHWEST CORNER OF SAID
LOT 24; THENCE NORTH 89 DEGREES 55 MINUTES 58 SECONDS EAST ALONG SAID WESTERLY
EXTENSION, 125.75 FEET TO THE WEST LINE OF SAID LOT 24; THENCE NORTH 0 DEGREES
01 MINUTES 21 SECONDS WEST, 366.49 FEET ALONG THE WEST LINE OF LOTS 24, 19, 18,
13, 12, 7, 6 AND 1 IN SAID PETER TEMPLE’S SUBDIVISION TO THE HEREINABOVE
DESCRIBED POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.

 

PARCEL 5:

 

LOTS 1, 2 AND
3 IN COLE’S SUBDIVISION OF PART OF BLOCK 99 AND THAT PART OF LOTS 1 AND 2 IN
ASSESSOR’S DIVISION OF PART OF BLOCK 99 LYING NORTH OF A STRAIGHT LINE DRAWN
FROM THE NORTHWEST CORNER OF LOT 4 IN COLE’S SUBDIVISION AS AFORESAID TO A
POINT IN THE WEST LINE OF SAID LOT 2 IN SAID ASSESSOR’S DIVISION WHICH POINT IS
125.53 FEET SOUTH OF THE NORTHWEST CORNER OF SAID LOT 2 ALL IN BLOCK 99 IN
SCHOOL SECTION ADDITION TO CHICAGO IN THE NORTHEAST 1/4 OF SECTION 16, TOWNSHIP
39 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY,
ILLINOIS.

 

PIN#:
17-16-241-025

PIN#: 17-16-241-049

PIN#: 17-16-242-018

PIN#: 17-16-242-019

PIN#: 17-16-242-020

PIN#: 17-16-242-022

PIN#: 17-16-242-023

PIN#: 17-16-242-024

 

440 South
LaSalle Street, Chicago, IL

 

 

EXHIBIT B

 

SUMMARY OF RESERVES

 

	
  Reserve Items

  	
   

  	
  Initial Deposit Amount

  	
   

  	
  Monthly Installment

  Amount

  	
   

  
	
  Basic Carrying Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  Taxes

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  TBD

  	
   

  
	
  •  Insurance Premiums

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  TBD

  	
   

  
	
  Initial Engineering Deposits

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •  Immediate Repairs

  	
   

  	
  $

  	
  0

  	
   

  	
  Not Applicable

  	
   

  
	
  •  Environmental Remediation

  	
   

  	
  $

  	
  0

  	
   

  	
   

  	
   

  
	
  Recurring Replacement Reserve Monthly
  Installment

  	
   

  	
  $

  	
  4,000,000.00

  	
   

  	
  $

  	
  16,988.75

  	
   

  
	
  Reletting Reserve

  	
   

  	
  $

  	
  7,000,000.00

  	
   

  	
  Not Applicable

  	
   

  
	
  Underwritten Rent

  	
   

  	
  $

  	
  2,878,715.00

  	
   

  	
  Not Applicable

  	
   

  
	
  Designated Lease Escrow

  	
   

  	
  $

  	
  1,627,794.00

  	
   

  	
  Not Applicable

  	
   

  

 

 

EXHIBIT C

 

Intentionally Omitted

 

 

EXHIBIT D

 

Required Engineering Work

 

None.

 

 

EXHIBIT E

 

Form of Direction Letter

 

One Financial Place Property LLC

c/o Beacon Capital Partners, LLC

One Federal Street, 26th Floor

Boston, Massachusetts 02110

 

July    , 2006

 

To:                              All Tenants

 

Re:                               Your lease (the “Lease”) at that certain property located at
One Financial Place, Chicago, Illinois (the “Property”)

 

Ladies and Gentlemen:

 

This letter shall constitute notice to you that One Financial Place
Property LLC, a Delaware limited liability company and the landlord under your
Lease (“Landlord”) has granted a
security interest in the Lease and all rents, additional rent and all other
monetary obligations to the landlord thereunder (collectively, “Rent”) in favor of its lender, Wachovia
Bank, National Association (“Lender”)
to secure certain of Landlord’s obligations to Lender. Landlord hereby
instructs and authorizes you to disregard any and all previous notices sent to
you in connection with Rent and hereafter to pay all Rent payable pursuant to
the Lease to ONE FINANCIAL PLACE PROPERTY LLC
at the following address:

 

Standard Mail:

One Financial
Place Property LLC

3083 Collections Center Drive

Chicago, IL  60693

 

Overnight Mail:

Bank of
America Lockbox Services

3083 Collections Center Drive

Chicago, IL  60693

 

Or, if you prefer to pay by wire transfer, please direct the wire for
Rent to:

 

Bank of America

ABA # 026-009-593

 

 

Acct. Name: One Financial Place Property LLC-Rent

Acct. # 00-460-693-0729

Please be sure to reference Tenant’s Name in all wires

 

Landlord
hereby instructs and authorizes you to disregard any and all previous notices
sent to you in connection with all parking charges, if any, payable pursuant to
the Lease (the “Parking Rent”) and
hereafter to pay all Parking Rent to ONE
FINANCIAL PLACE PROPERTY LLC at the following address:

 

Standard Mail:

One Financial
Place Property LLC

3163 Collections Center Drive

Chicago, IL  60693

 

Overnight Mail:

Bank of America Lockbox Services

3163 Collections Center Drive

Chicago, IL  60693

 

Or, if you prefer to pay by wire transfer, please direct the wire for
Parking Rent to:

 

Bank of America

ABA # 026-009-593

Acct. Name: One Financial Place Property LLC-Parking

Acct. # 00-460-693-0732

Please be sure to reference Tenant’s Name in all wires

 

Please take particular care in making your checks payable to One
Financial Place Property LLC because only checks made payable to One Financial
Place Property LLC will be credited against sums due by you to Landlord. Until
otherwise advised in writing by Landlord and Lender (or its successor), you
should continue to make your payments for rent and other sums as directed by
the terms of this letter.

 

[Remainder of page intentionally left blank]

 

ii

 

Thank you in advance for your cooperation.

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ONE FINANCIAL
  PLACE PROPERTY LLC,

  	
   

  
	
   

  	
  a Delaware
  limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BCSP IV
  Illinois Manager LLC,

  
	
   

  	
   

  	
  a Delaware
  limited liability company,

  
	
   

  	
   

  	
  its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  BCSP IV U.S.
  Investments, L.P.,

  	
   

  
	
   

  	
   

  	
   

  	
  a Delaware
  limited partnership,

  	
   

  
	
   

  	
   

  	
   

  	
  its sole member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  BCSP REIT
  IV, Inc.,

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  a Maryland
  corporation,

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  its general
  partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: Nancy
  J. Broderick

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:
  Managing Director

  	
   

  
								

 

iii

 

EXHIBIT F

 

Underwritten Rent

 

	
  Month

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December, 2006

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January, 2007

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February, 2007

  	
   

  	
  $

  	
  359,839.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March, 2007

  	
   

  	
  $

  	
  359,839.37

  	
   

  

 

 

EXHIBIT G

 

Designated Leases

 

	
  Tenant

  	
   

  	
  Document

  	
   

  	
  Date

  	
   

  
	
  1.

  	
   

  	
  Merrill
  Lynch, Pierce, Fenner and Smith, Inc.

  	
   

  	
  7th
  Amendment to Lease

  	
   

  	
  3/31/2006

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  6th
  Amendment to Lease

  	
   

  	
  12/1/2004

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  5th
  Amendment to Lease

  	
   

  	
  1/16/2004

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  4th
  Amendment to Lease

  	
   

  	
  12/24/1998

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  3rd
  Amendment to Lease

  	
   

  	
  1/19/1995

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  2nd
  Amendment to Lease

  	
   

  	
  12/1/1989

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  4/15/1986

  	
   

  
	
   

  	
   

  	
  Merrill Lynch, Pierce, Fenner and Smith,
  Inc.

  	
   

  	
  Lease

  	
   

  	
  12/30/1983

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Bullwinkle
  & Associates

  	
   

  	
  2nd
  Amendment to Lease

  	
   

  	
  8/31/2004

  	
   

  
	
   

  	
   

  	
  Bullwinkle & Associates

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  8/31/1999

  	
   

  
	
   

  	
   

  	
  Bullwinkle & Associates

  	
   

  	
  Lease

  	
   

  	
  5/1/1996

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Essex Radez,
  L.L.C.

  	
   

  	
  Storage
  Space Lease

  	
   

  	
  5/1/2006

  	
   

  
	
   

  	
   

  	
  Essex Radez,
  L.L.C.

  	
   

  	
  Lease

  	
   

  	
  12/01/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  G Bar L.P.

  	
   

  	
  Lease

  	
   

  	
  9/15/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Group One
  Trading, L.P.

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  12/27/2004

  	
   

  
	
   

  	
   

  	
  Group One Trading, L.P.

  	
   

  	
  Lease

  	
   

  	
  2/22/2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Kforce, Inc.
  (f/k/a Hall, Kinion & Associates, Inc.)

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  11/29/2001

  	
   

  
	
   

  	
   

  	
  Kforce, Inc. (f/k/a Hall, Kinion &
  Associates, Inc.)

  	
   

  	
  Lease

  	
   

  	
  7/31/1997

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Midwest
  Generation EME, LLC.

  	
   

  	
  2nd
  Amendment to Lease

  	
   

  	
  6/1/2004

  	
   

  

 

 

	
   

  	
   

  	
  Midwest Generation EME, LLC.

  	
   

  	
  Antenna
  License Agreement

  	
   

  	
  4/1/2003

  	
   

  
	
   

  	
   

  	
  Midwest Generation EME, LLC.

  	
   

  	
  1st
  Amendment to Lease

  	
   

  	
  12/12/2001

  	
   

  
	
   

  	
   

  	
  Midwest Generation EME, LLC.

  	
   

  	
  Lease

  	
   

  	
  8/18/1999

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Spot
  Trading, LLC.

  	
   

  	
  Amended and
  Restated Lease

  	
   

  	
  1/31/2006

  	
   

  
	
   

  	
   

  	
  Spot Trading, LLC.

  	
   

  	
  Lease

  	
   

  	
  9/15/2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Sunset
  Securities, LLC.

  	
   

  	
  Lease

  	
   

  	
  2/10/2006

  	
   

  

 

ii

 

INDEX

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I:
  DEFINITIONS

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 1.01. Certain Definitions

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II:
  REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 2.01. Payment of Debt

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 2.02. Representations, Warranties and Covenants of
  Borrower

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 2.03. Further Acts, etc

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 2.04. Recording of Security Instrument, etc

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 2.05. Representations, Warranties and Covenants Relating
  to the Property

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 2.06. Removal of Lien

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 2.07. Cost of Defending and Upholding this Security
  Instrument Lien

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 2.08. Use of the Property

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 2.09. Financial Reports

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 2.10. Litigation

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 2.11. Updates of Representations

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE III:
  INSURANCE AND CASUALTY RESTORATION

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 3.01. Insurance Coverage

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 3.02. Policy Terms

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 3.03. Assignment of Policies

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 3.04. Casualty Restoration

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 3.05. Compliance with Insurance Requirements

  	
   

  	
  57

  
	
   

  	
   

  	
   

  
	
  Section 3.06. Event of Default During Restoration

  	
   

  	
  57

  

 

 

	
  Section 3.07. Application of Proceeds to Debt Reduction

  	
   

  	
  58

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV:
  IMPOSITIONS

  	
   

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section 4.01. Payment of Impositions, Utilities and Taxes, etc

  	
   

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section 4.02. Deduction from Value

  	
   

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section 4.03. No Joint Assessment

  	
   

  	
  60

  
	
   

  	
   

  	
   

  
	
  Section 4.04. Right to Contest

  	
   

  	
  60

  
	
   

  	
   

  	
   

  
	
  Section 4.05. No Credits on Account of the Debt

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section 4.06. Documentary Stamps

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE V:
  CENTRAL CASH MANAGEMENT

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section 5.01. Cash Flow

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section 5.02. Establishment of Accounts

  	
   

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section 5.03. Permitted Investments

  	
   

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section 5.04. Servicing Fees

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
  Section 5.05. Monthly Funding of Sub-Accounts and Escrow Accounts

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
  Section 5.06. Payment of Basic Carrying Costs

  	
   

  	
  64

  
	
   

  	
   

  	
   

  
	
  Section 5.07. Reletting Reserve Escrow Account

  	
   

  	
  65

  
	
   

  	
   

  	
   

  
	
  Section 5.08. Recurring Replacement Reserve Escrow Account

  	
   

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 5.09. Intentionally Omitted

  	
   

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 5.10. Intentionally Omitted

  	
   

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 5.11. Intentionally Omitted

  	
   

  	
  68

  
	
   

  	
   

  	
   

  
	
  Section 5.12. Performance of Engineering Work

  	
   

  	
  68

  
	
   

  	
   

  	
   

  
	
  Section 5.13. Loss Proceeds

  	
   

  	
  69

  

 

ii

 

	
  ARTICLE VI:
  CONDEMNATION

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  Section 6.01. Condemnation

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII:
  LEASES AND RENTS

  	
   

  	
  73

  
	
   

  	
   

  	
   

  
	
  Section 7.01. Assignment

  	
   

  	
  73

  
	
   

  	
   

  	
   

  
	
  Section 7.02. Management of Property

  	
   

  	
  74

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII:
  MAINTENANCE AND REPAIR

  	
   

  	
  77

  
	
   

  	
   

  	
   

  
	
  Section 8.01. Maintenance and Repair of the Property; Alterations;
  Replacement of Equipment

  	
   

  	
  77

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX:
  TRANSFER OR ENCUMBRANCE OF THE PROPERTY

  	
   

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section 9.01. Other Encumbrances

  	
   

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section 9.02. No Transfer

  	
   

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section 9.03. Due on Sale

  	
   

  	
  79

  
	
   

  	
   

  	
   

  
	
  Section 9.04. Permitted Transfer

  	
   

  	
  79

  
	
   

  	
   

  	
   

  
	
  ARTICLE X:
  CERTIFICATES

  	
   

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section 10.01. Estoppel Certificates

  	
   

  	
  81

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI:
  NOTICES

  	
   

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section 11.01. Notices

  	
   

  	
  81

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII:
  INDEMNIFICATION

  	
   

  	
  82

  
	
   

  	
   

  	
   

  
	
  Section 12.01. Indemnification Covering Property

  	
   

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII:
  DEFAULTS

  	
   

  	
  84

  
	
   

  	
   

  	
   

  
	
  Section 13.01. Events of Default

  	
   

  	
  84

  

 

iii

 

	
  Section 13.02. Remedies

  	
   

  	
  86

  
	
   

  	
   

  	
   

  
	
  Section 13.03. Payment of Debt After Default

  	
   

  	
  90

  
	
   

  	
   

  	
   

  
	
  Section 13.04. Possession of the Property

  	
   

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section 13.05. Interest After Default

  	
   

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section 13.06. Borrower’s Actions After Default

  	
   

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section 13.07. Control by Lender After Default

  	
   

  	
  91

  
	
   

  	
   

  	
   

  
	
  Section 13.08. Right to Cure Defaults

  	
   

  	
  92

  
	
   

  	
   

  	
   

  
	
  Section 13.09. Late Payment Charge

  	
   

  	
  92

  
	
   

  	
   

  	
   

  
	
  Section 13.10. Recovery of Sums Required to Be Paid

  	
   

  	
  92

  
	
   

  	
   

  	
   

  
	
  Section 13.11. Marshalling and Other Matters

  	
   

  	
  93

  
	
   

  	
   

  	
   

  
	
  Section 13.12. Tax Reduction Proceedings

  	
   

  	
  93

  
	
   

  	
   

  	
   

  
	
  Section 13.13. General Provisions Regarding Remedies.

  	
   

  	
  93

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV:
  COMPLIANCE WITH REQUIREMENTS

  	
   

  	
  93

  
	
   

  	
   

  	
   

  
	
  Section 14.01. Compliance with Legal Requirements

  	
   

  	
  94

  
	
   

  	
   

  	
   

  
	
  Section 14.02. Compliance with Recorded Documents; No Future
  Grants

  	
   

  	
  95

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV:
  PREPAYMENT

  	
   

  	
  95

  
	
   

  	
   

  	
   

  
	
  Section 15.01. Prepayment

  	
   

  	
  95

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI:
  ENVIRONMENTAL COMPLIANCE

  	
   

  	
  95

  
	
   

  	
   

  	
   

  
	
  Section 16.01. Covenants, Representations and Warranties

  	
   

  	
  98

  
	
   

  	
   

  	
   

  
	
  Section 16.02. Environmental Indemnification

  	
   

  	
  99

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII:
  ASSIGNMENTS

  	
   

  	
  99

  

 

iv

 

	
  Section 17.01. Participations and Assignments

  	
   

  	
  99

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVIII:
  MISCELLANEOUS

  	
   

  	
  99

  
	
   

  	
   

  	
   

  
	
  Section 18.01. Right of Entry

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.02. Cumulative Rights

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.03. Liability

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.04. Exhibits Incorporated

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.05. Severable Provisions

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.06. Duplicate Originals

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.07. No Oral Change

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.08. Intentionally Omitted.

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.09. Headings; Construction of Documents; etc

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.10. Sole Discretion of Lender

  	
   

  	
  100

  
	
   

  	
   

  	
   

  
	
  Section 18.11. Waiver of Notice and Jury Trial

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  Section 18.12. Covenants Run with the Land

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  Section 18.13. Applicable Law

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  Section 18.14. Security Agreement

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  Section 18.15. Actions and Proceedings

  	
   

  	
  103

  
	
   

  	
   

  	
   

  
	
  Section 18.16. Usury Laws

  	
   

  	
  103

  
	
   

  	
   

  	
   

  
	
  Section 18.17. Remedies of Borrower

  	
   

  	
  103

  
	
   

  	
   

  	
   

  
	
  Section 18.18. Offsets, Counterclaims and Defenses

  	
   

  	
  103

  
	
   

  	
   

  	
   

  
	
  Section 18.19. No Merger

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.20. Restoration of Rights

  	
   

  	
  104

  

 

v

 

	
  Section 18.21. Waiver of Statute of Limitations

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.22. Advances

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.23. Application of Default Rate Not a Waiver

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.24. Intervening Lien

  	
   

  	
  104

  
	
   

  	
   

  	
   

  
	
  Section 18.25. No Joint Venture or Partnership

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.26. Time of the Essence

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.27. Borrower’s Obligations Absolute

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.28. Publicity

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.29. Securitization Opinions

  	
   

  	
  105

  
	
   

  	
   

  	
   

  
	
  Section 18.30. Cooperation with Rating Agencies

  	
   

  	
  106

  
	
   

  	
   

  	
   

  
	
  Section 18.31. Securitization Financials

  	
   

  	
  107

  
	
   

  	
   

  	
   

  
	
  Section 18.32. Exculpation

  	
   

  	
  107

  
	
   

  	
   

  	
   

  
	
  Section 18.33. Component Notes

  	
   

  	
  109

  
	
   

  	
   

  	
   

  
	
  Section 18.34. Certain Matters Relating to Property located in the
  State of Illinois

  	
   

  	
  110

  

 

vi

 

EXHIBITS

 

	
  EXHIBIT A

  	
   

  	
  Legal Description of Premises

  
	
  EXHIBIT B

  	
   

  	
  Summary Of Reserves

  
	
  EXHIBIT C

  	
   

  	
  Intentionally Omitted

  
	
  EXHIBIT D

  	
   

  	
  Required Engineering Work

  
	
  EXHIBIT E

  	
   

  	
  Form of Direction Letter

  
	
  EXHIBIT F

  	
   

  	
  Underwritten Rent

  
	
  EXHIBIT G

  	
   

  	
  Designated Leases

  

 

 

vii

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