Document:

Exhibit
10.3

 

EXECUTION
COPY

 

 

LOAN AGREEMENT

 

Dated as of April 1, 2008

 

among

 

FIRST
STATES INVESTORS 3300 B, L.P.,

 

as Borrower,

 

PB
CAPITAL CORPORATION,

 

together with its successors and assigns,

 

as Lenders,

 

and

 

PB
CAPITAL CORPORATION,

 

as Agent for Lenders

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I
  DEFINITIONS

  	
  1

  
	
  SECTION 1.1.

  	
   

  	
  Definitions

  	
  1

  
	
  SECTION 1.2.

  	
   

  	
  Other
  Definitional Provisions

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II THE LOAN

  	
   

  	
   

  	
  30

  
	
  SECTION 2.1.

  	
   

  	
  The
  Loan; Use of Funds

  	
  30

  
	
  SECTION 2.2.

  	
   

  	
  Interest

  	
  30

  
	
  SECTION 2.3.

  	
   

  	
  Determination
  of Applicable Interest Rate

  	
  31

  
	
  SECTION 2.4.

  	
   

  	
  Principal
  Payments

  	
  33

  
	
  SECTION 2.5.

  	
   

  	
  Payment; Default Rate; Application of Certain Monies; Priority of
  Payments; Set-offs

  	
  34

  
	
  SECTION 2.6.

  	
   

  	
  [Intentionally Deleted]

  	
  36

  
	
  SECTION 2.7.

  	
   

  	
  Interest
  Rate Protection Agreement

  	
  36

  
	
  SECTION 2.8.

  	
   

  	
  [Intentionally Deleted]

  	
  39

  
	
  SECTION 2.9.

  	
   

  	
  Additional
  Interest

  	
  39

  
	
  SECTION 2.10.

  	
   

  	
  No
  Withholdings

  	
  39

  
	
  SECTION 2.11.

  	
   

  	
  Unavailability
  of LIBOR; Illegality

  	
  40

  
	
  SECTION 2.12.

  	
   

  	
  Increased
  Costs and Capital Adequacy

  	
  41

  
	
  SECTION 2.13.

  	
   

  	
  Usury

  	
  42

  
	
  SECTION 2.14.

  	
   

  	
  Closing

  	
  43

  
	
  SECTION 2.15.

  	
   

  	
  Fees

  	
  43

  
	
  SECTION 2.16.

  	
   

  	
  Lockbox Account, Cash Flow Collection Account and Operating Account

  	
  43

  
	
  SECTION 2.17.

  	
   

  	
  Releases

  	
  44

  
	
  SECTION 2.18.

  	
   

  	
  Tenant
  Security Account and Security Letters of Credit

  	
  46

  
	
  SECTION 2.19.

  	
   

  	
  Intentionally
  Deleted

  	
  48

  
	
  SECTION 2.20.

  	
   

  	
  Accounts

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III
  DISBURSEMENTS FROM SUBACCOUNTS AND RESERVES

  	
  49

  
	
  SECTION 3.1.

  	
   

  	
  Disbursements
  Generally; Timing

  	
  49

  
	
  SECTION 3.2.

  	
   

  	
  General
  Conditions Precedent to Disbursements

  	
  49

  
	
  SECTION 3.3.

  	
   

  	
  Disbursements
  for Approved Leasing Costs

  	
  50

  
	
  SECTION 3.4.

  	
   

  	
  [Intentionally Deleted]

  	
  51

  
	
  SECTION 3.5.

  	
   

  	
  Optional
  Disbursements

  	
  51

  
	
  SECTION 3.6.

  	
   

  	
  Use
  of Disbursements

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS LOAN
  AGREEMENT

  	
  52

  
	
  SECTION 4.1.

  	
   

  	
  Representations and
  Warranties

  	
  52

  
	
  SECTION 4.2.

  	
   

  	
  Closing
  Documents, Etc.

  	
  52

  
	
  SECTION 4.3.

  	
   

  	
  Receipt
  of Items and Documents by Agent

  	
  52

  
	
  SECTION 4.4.

  	
   

  	
  Payment
  of Fees and Expenses

  	
  54

  
	
  SECTION 4.5.

  	
   

  	
  No
  Default or Event of Default

  	
  54

  
	
  SECTION 4.6.

  	
   

  	
  No
  Casualty or Taking

  	
  55

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 4.7.

  	
   

  	
  Financial Statements

  	
  55

  
	
  SECTION 4.8.

  	
   

  	
  Loan-to-Value Ratio

  	
  55

  
	
  SECTION 4.9.

  	
   

  	
  Compliance with Other Conditions

  	
  55

  
	
  SECTION 4.10.

  	
   

  	
  [Intentionally Deleted]

  	
  55

  
	
  SECTION 4.11.

  	
   

  	
  Adverse Conditions; Internal Approval

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V INTENTIONALLY DELETED

  	
  55

  
	
   

  	
   

  
	
  ARTICLE VI REPRESENTATIONS AND WARRANTIES

  	
  55

  
	
  SECTION 6.1.

  	
   

  	
  Due
  Organization

  	
  56

  
	
  SECTION 6.2.

  	
   

  	
  Due
  Execution

  	
  56

  
	
  SECTION 6.3.

  	
   

  	
  Enforceability

  	
  56

  
	
  SECTION 6.4.

  	
   

  	
  No Violation

  	
  56

  
	
  SECTION 6.5.

  	
   

  	
  No
  Litigation

  	
  56

  
	
  SECTION 6.6.

  	
   

  	
  No Default
  or Event of Default

  	
  57

  
	
  SECTION 6.7.

  	
   

  	
  Offsets, Defenses, Etc.

  	
  57

  
	
  SECTION 6.8.

  	
   

  	
  Consents

  	
  57

  
	
  SECTION 6.9.

  	
   

  	
  Guarantor Representations

  	
  57

  
	
  SECTION 6.10.

  	
   

  	
  Financial
  Statements and Other Information

  	
  57

  
	
  SECTION 6.11.

  	
   

  	
  Full Disclosure

  	
  57

  
	
  SECTION 6.12.

  	
   

  	
  Accounts

  	
  58

  
	
  SECTION 6.13.

  	
   

  	
  Indebtedness

  	
  58

  
	
  SECTION 6.14.

  	
   

  	
  Insurance Policies

  	
  58

  
	
  SECTION 6.15.

  	
   

  	
  Availability
  of Utilities and Access

  	
  58

  
	
  SECTION 6.16.

  	
   

  	
  No Liens

  	
  58

  
	
  SECTION 6.17.

  	
   

  	
  Compliance
  with Legal Requirements

  	
  58

  
	
  SECTION 6.18.

  	
   

  	
  Certain
  Agreements

  	
  59

  
	
  SECTION 6.19.

  	
   

  	
  Security
  Documents

  	
  59

  
	
  SECTION 6.20.

  	
   

  	
  Condition of
  Premises

  	
  60

  
	
  SECTION 6.21.

  	
   

  	
  Brokerage

  	
  60

  
	
  SECTION 6.22.

  	
   

  	
  Encroachments

  	
  60

  
	
  SECTION 6.23.

  	
   

  	
  Foreign
  Person

  	
  60

  
	
  SECTION 6.24.

  	
   

  	
  Control Person

  	
  60

  
	
  SECTION 6.25.

  	
   

  	
  Margin Stock

  	
  60

  
	
  SECTION 6.26.

  	
   

  	
  Government Regulation

  	
  60

  
	
  SECTION 6.27.

  	
   

  	
  ERISA

  	
  61

  
	
  SECTION 6.28.

  	
   

  	
  Labor Relations

  	
  61

  
	
  SECTION 6.29.

  	
   

  	
  [Intentionally
  Deleted]

  	
  61

  
	
  SECTION 6.30.

  	
   

  	
  Intellectual
  Property

  	
  61

  
	
  SECTION 6.31.

  	
   

  	
  Flood Zone

  	
  61

  
	
  SECTION 6.32.

  	
   

  	
  Taxes

  	
  62

  
	
  SECTION 6.33.

  	
   

  	
  Adverse
  Contracts

  	
  62

  
	
  SECTION 6.34.

  	
   

  	
  Adverse
  Claims

  	
  62

  
	
  SECTION 6.35.

  	
   

  	
  Creditworthiness

  	
  62

  
	
  SECTION 6.36.

  	
   

  	
  Patriot Act

  	
  62

  
	
  SECTION 6.37.

  	
   

  	
  Leases

  	
  63

  
	
  SECTION 6.38.

  	
   

  	
  Special
  Purpose Entity

  	
  64

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII INTENTIONALLY DELETED

  	
  64

  
	
   

  	
   

  
	
  ARTICLE VIII GENERAL AND OPERATIONAL COVENANTS

  	
  64

  
	
  SECTION 8.1.

  	
   

  	
  Financial Statements, Reports and Documents of Borrower

  	
  64

  
	
  SECTION 8.2.

  	
   

  	
  Marketing, Management, Maintenance and Repairs

  	
  69

  
	
  SECTION 8.3.

  	
   

  	
  Inspection of the Properties and Books and Records

  	
  71

  
	
  SECTION 8.4.

  	
   

  	
  Compliance
  with Legal, Insurance and Contractual Requirements

  	
  72

  
	
  SECTION 8.5.

  	
   

  	
  Appraisals

  	
  73

  
	
  SECTION 8.6.

  	
   

  	
  Payment of Impositions

  	
  74

  
	
  SECTION 8.7.

  	
   

  	
  Liens and
  Encumbrances; Ownership of Collateral

  	
  74

  
	
  SECTION 8.8.

  	
   

  	
  Permitted Contests

  	
  74

  
	
  SECTION 8.9.

  	
   

  	
  Alterations

  	
  75

  
	
  SECTION 8.10.

  	
   

  	
  Leases

  	
  76

  
	
  SECTION 8.11.

  	
   

  	
  Required Insurance

  	
  80

  
	
  SECTION 8.12.

  	
   

  	
  Damage or Destruction

  	
  82

  
	
  SECTION 8.13.

  	
   

  	
  Taking of the Mortgaged Property

  	
  86

  
	
  SECTION 8.14.

  	
   

  	
  Application of Proceeds of Casualty or Taking to Loan; Loan Repayment

  	
  87

  
	
  SECTION 8.15.

  	
   

  	
  Costs and Expenses

  	
  87

  
	
  SECTION 8.16.

  	
   

  	
  Transfers

  	
  88

  
	
  SECTION 8.17.

  	
   

  	
  Defense of
  Title

  	
  89

  
	
  SECTION 8.18.

  	
   

  	
  Recordation
  and Certain Taxes

  	
  90

  
	
  SECTION 8.19.

  	
   

  	
  Name, Loan
  Year and Accounting Method

  	
  90

  
	
  SECTION 8.20.

  	
   

  	
  Consolidation,
  Merger, Conveyance, Transfer or Lease

  	
  90

  
	
  SECTION 8.21.

  	
   

  	
  Organization
  Restrictions

  	
  90

  
	
  SECTION 8.22.

  	
   

  	
  Changes in
  Zoning

  	
  91

  
	
  SECTION 8.23.

  	
   

  	
  Name;
  Principal Place of Business

  	
  91

  
	
  SECTION 8.24.

  	
   

  	
  Limitation
  on Indebtedness

  	
  91

  
	
  SECTION 8.25.

  	
   

  	
  Distributions,
  Dividends and Affiliate Payments

  	
  91

  
	
  SECTION 8.26.

  	
   

  	
  ERISA

  	
  92

  
	
  SECTION 8.27.

  	
   

  	
  Maintenance
  of Existence

  	
  92

  
	
  SECTION 8.28.

  	
   

  	
  Subsidiaries
  and Joint Ventures

  	
  92

  
	
  SECTION 8.29.

  	
   

  	
  Loans to
  Members, Etc.

  	
  92

  
	
  SECTION 8.30.

  	
   

  	
  Transactions
  with Affiliates

  	
  92

  
	
  SECTION 8.31.

  	
   

  	
  Adverse
  Contracts

  	
  92

  
	
  SECTION 8.32.

  	
   

  	
  Utilities

  	
  92

  
	
  SECTION 8.33.

  	
   

  	
  Margin Stock

  	
  93

  
	
  SECTION 8.34.

  	
   

  	
  Patriot Act Compliance

  	
  93

  
	
  SECTION 8.35.

  	
   

  	
  Mezzanine Loan Documents

  	
  93

  
	
  SECTION 8.36.

  	
   

  	
  Post-Closing Obligations

  	
  93

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX EVENTS OF DEFAULT

  	
  94

  
	
  SECTION 9.1.

  	
   

  	
  Events of
  Default

  	
  94

  
	
  SECTION 9.2.

  	
   

  	
  Acceleration of Loan

  	
  96

  
	
  SECTION 9.3.

  	
   

  	
  [Intentionally Deleted.]

  	
  97

  
	
  SECTION 9.4.

  	
   

  	
  Agent’s Right to Complete; Sums Advanced

  	
  97

  
							

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.5.

  	
   

  	
  Assignment
  of Funds

  	
  98

  
	
  SECTION 9.6.

  	
   

  	
  Accounts

  	
  98

  
	
  SECTION 9.7.

  	
   

  	
  No Liability
  of Agent or Lenders

  	
  99

  
	
  SECTION 9.8.

  	
   

  	
  Asset
  Management Agreement

  	
  99

  
	
  SECTION 9.9.

  	
   

  	
  Right of
  Offset

  	
  99

  
	
  SECTION 9.10.

  	
   

  	
  Termination
  of Loan Agreement

  	
  100

  
	
  SECTION 9.11.

  	
   

  	
  Protective Advances

  	
  100

  
	
  SECTION 9.12.

  	
   

  	
  Interest Rate Protection Agreement

  	
  100

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X ASSIGNMENTS AND PARTICIPATIONS

  	
  100

  
	
  SECTION 10.1.

  	
   

  	
  Assignment
  and Participations

  	
  100

  
	
  SECTION 10.2.

  	
   

  	
  Participation

  	
  101

  
	
  SECTION 10.3.

  	
   

  	
  Availability
  of Records

  	
  101

  
	
  SECTION 10.4.

  	
   

  	
  Borrower’s
  Facilitation of Transfer

  	
  101

  
	
  SECTION 10.5.

  	
   

  	
  Notice;
  Registration Requirement

  	
  102

  
	
  SECTION 10.6.

  	
   

  	
  Registry

  	
  103

  
	
  SECTION 10.7.

  	
   

  	
  Lender Interest Rate Protection Agreements

  	
  103

  
	
  SECTION 10.8.

  	
   

  	
  Disclosure by Agent or Lender

  	
  103

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI AGENT AND LENDERS

  	
  104

  
	
  SECTION 11.1.

  	
   

  	
  Scope of Article XI

  	
  104

  
	
  SECTION 11.2.

  	
   

  	
  Agent

  	
  104

  
	
  SECTION 11.3.

  	
   

  	
  Distributions

  	
  105

  
	
  SECTION 11.4.

  	
   

  	
  Authority, No Reliance; Binding Effect

  	
  105

  
	
  SECTION 11.5.

  	
   

  	
  Loan

  	
  106

  
	
  SECTION 11.6.

  	
   

  	
  Equitable Adjustments

  	
  107

  
	
  SECTION 11.7.

  	
   

  	
  Other Transactions

  	
  108

  
	
  SECTION 11.8.

  	
   

  	
  Obligations Absolute

  	
  108

  
	
  SECTION 11.9.

  	
   

  	
  Indemnification

  	
  108

  
	
  SECTION 11.10.

  	
   

  	
  Taxes

  	
  109

  
	
  SECTION 11.11.

  	
   

  	
  Return of Payments

  	
  109

  
	
  SECTION 11.12.

  	
   

  	
  No Partnership

  	
  110

  
	
  SECTION 11.13.

  	
   

  	
  Resignation and Removal of Agent; Successor Agent

  	
  110

  
	
  SECTION 11.14.

  	
   

  	
  Defaults by any Lender

  	
  110

  
	
  SECTION 11.15.

  	
   

  	
  Purchase Price; Payment for Defaulting Lender’s Pro Rata Share

  	
  112

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII GENERAL CONDITIONS

  	
  112

  
	
  SECTION 12.1.

  	
   

  	
  Indemnity

  	
  112

  
	
  SECTION 12.2.

  	
   

  	
  No Waivers

  	
  114

  
	
  SECTION 12.3.

  	
   

  	
  Agent’s
  Review

  	
  115

  
	
  SECTION 12.4.

  	
   

  	
  Submission
  of Evidence

  	
  115

  
	
  SECTION 12.5.

  	
   

  	
  Agent and
  Lenders Sole Beneficiaries

  	
  115

  
	
  SECTION 12.6.

  	
   

  	
  Contractors

  	
  115

  
	
  SECTION 12.7.

  	
   

  	
  Entire
  Agreement

  	
  115

  
	
  SECTION 12.8.

  	
   

  	
  Assignment

  	
  115

  
	
  SECTION 12.9.

  	
   

  	
  Further
  Assurances; Filing of Financing Statements

  	
  115

  
	
  SECTION 12.10.

  	
   

  	
  Cumulative
  Remedies

  	
  116

  
							

 

iv

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.11.

  	
   

  	
  Amendments, Consents, Waivers, Approvals, Etc.

  	
  116

  
	
  SECTION 12.12.

  	
   

  	
  Notices

  	
  117

  
	
  SECTION 12.13.

  	
   

  	
  Limitation
  on Liability

  	
  118

  
	
  SECTION 12.14.

  	
   

  	
  Binding
  Effect

  	
  119

  
	
  SECTION 12.15.

  	
   

  	
  Severability
  of Provisions

  	
  119

  
	
  SECTION 12.16.

  	
   

  	
  Governing
  Law and Consent to Jurisdiction

  	
  119

  
	
  SECTION 12.17.

  	
   

  	
  Waiver of
  Jury Trial

  	
  120

  
	
  SECTION 12.18.

  	
   

  	
  No Joint
  Venture

  	
  120

  
	
  SECTION 12.19.

  	
   

  	
  Determinations
  and Consents of Agent

  	
  120

  
	
  SECTION 12.20.

  	
   

  	
  Reliance by Agent on Action on Behalf of Borrower

  	
  120

  
	
  SECTION 12.21.

  	
   

  	
  Headings,
  Etc.

  	
  120

  
	
  SECTION 12.22.

  	
   

  	
  Incorporation
  by Reference

  	
  120

  
	
  SECTION 12.23.

  	
   

  	
  Counterparts

  	
  121

  
	
  SECTION 12.24.

  	
   

  	
  Attorneys’ Fees

  	
  121

  
	
  SECTION 12.25.

  	
   

  	
  Employer
  Identification Number Etc.

  	
  121

  
						

 

v

 

	
  Exhibits
  and Schedules

  
	
   

  	
   

  
	
  Exhibit A:

  	
   

  	
  Properties

  
	
  Exhibit B-1:

  	
   

  	
  Form of
  Account Agreement (With Notice)

  
	
  Exhibit B-2:

  	
   

  	
  Form of
  Account Agreement (Without Notice)

  
	
  Exhibit C:

  	
   

  	
  Environmental
  Reports

  
	
  Exhibit D:

  	
   

  	
  Form of
  Request for Disbursement

  
	
  Exhibit E:

  	
   

  	
  Definition of
  Special Purpose Bankruptcy Remote Entity

  
	
  Exhibit F:

  	
   

  	
  Intentionally
  Deleted

  
	
  Exhibit G:

  	
   

  	
  Wachovia Leases

  
	
  Exhibit H:

  	
   

  	
  Form of
  Asset Manager Subordination Agreement

  
	
  Exhibit I:

  	
   

  	
  Form of
  Property Sub-Manager Subordination Agreement

  
	
  Exhibit J:

  	
   

  	
  Excluded REITS

  
	
   

  	
   

  	
   

  
	
  Schedule 2.7(a):

  	
   

  	
  Interest Rate
  Protection Agreement Consent

  
	
  Schedule 2.17(A)

  	
   

  	
  Allocated Loan
  Amount for Each Property

  
	
  Schedule 2.17(B)

  	
   

  	
  Form of
  Release Certificate

  
	
  Schedule 3.1

  	
   

  	
  Major Properties

  
	
  Schedule 4.3(a):

  	
   

  	
  Rent Rolls

  
	
  Schedule 4.3(b):

  	
   

  	
  Title Policies

  
	
  Schedule 4.6:

  	
   

  	
  Disclosure
  Schedule

  
	
  Schedule 6.1:

  	
   

  	
  Organizational
  Chart

  
	
  Schedule 6.12:

  	
   

  	
  Accounts

  
	
  Schedule 6.17(A):

  	
   

  	
  Property
  Condition Reports

  
	
  Schedule 6.17(B):

  	
   

  	
  Zoning Reports

  
	
  Schedule 6.18:

  	
   

  	
  Material Operating
  Agreements

  
	
  Schedule 6.22:

  	
   

  	
  Surveys

  
	
  Schedule 8.10

  	
   

  	
  Form of
  SNDA

  
	
  Schedule 8.11:

  	
   

  	
  Insurance
  Policies

  
	
  Schedule 10.1

  	
   

  	
  Eligible
  Assignees

  
	
  Schedule 10.5:

  	
   

  	
  Assignment and
  Acceptance

  

 

vi

 

LOAN
AGREEMENT

 

This LOAN AGREEMENT
(this “Loan Agreement”) dated as of April 1, 2008, by and among FIRST STATES INVESTORS 3300 B, L.P.,   a Delaware limited partnership, having an
office at c/o Gramercy Capital Corp., 420 Lexington Avenue, New York, New
York 10170 (together with its permitted successors and assigns, “Borrower”),
PB CAPITAL CORPORATION,   a
Delaware corporation, having an office at 230 Park Avenue, 19th Floor,
New York, New York 10169 (together with its successors and permitted assigns in
such capacity as a lender, including any permitted Assignees (as hereinafter
defined) hereunder, each a “Lender” and collectively “Lenders”),
and PB CAPITAL CORPORATION, a
Delaware corporation, having an office at 230 Park Avenue, 19th Floor,
New York, New York 10169, in its capacity as agent for Lenders (together with
its successors and assigns in such capacity as agent for Lenders, “Agent”).

 

W I T N E
S S E T H:

 

WHEREAS, Borrower is the owner of forty-eight (48) parcels of real
property, which are located at the respective addresses set forth on Exhibit A
attached hereto (each a “Property” and collectively, “Properties”),
together with the improvements now or hereafter located thereon; and

 

WHEREAS, Borrower wishes to borrow $240,000,000 from Lenders in
connection with acquisition, ownership, leasing and operation of the Properties
upon the terms and conditions contained herein.

 

NOW, THEREFORE, in consideration of the premises and
of the mutual covenants contained herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1.      Definitions.  For purposes of this Loan Agreement, the
following terms shall have the respective meanings set forth in this Article I:

 

“Account Agreement” means an agreement
substantially in the form attached hereto as Exhibit B-2 (Without
Notice), in the case of the Loan Accounts and any other Account specified
herein as being controlled by Agent, and Exhibit B-1 (With Notice),
in the case of the other Accounts, or such other form of agreement similar in
substance and acceptable to Agent, to be executed and delivered by Borrower,
Agent and the bank at which the Account that is the subject of such agreement
is held.

 

“Accounts” means, collectively, all accounts of
Borrower and all accounts of any Person held on behalf of or for the benefit of
Borrower, including the Loan Accounts, the Operating Account and the Tenant
Security Account.

 

 

“Additional Interest” means (a) all sums
payable pursuant to Sections 2.9, 2.10 and 2.12
hereof and (b) all sums payable to Agent or its Affiliate or any Lender or
its Affiliate pursuant to and in accordance with any Lender Interest Rate
Protection Agreement.

 

“Affiliate” means, with respect to any Person,
any other Person:

 

(a)           which
directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common control with, such Person; or

 

(b)           which,
directly or indirectly, beneficially owns or holds ten percent (10%) or more of
any class of stock or any other ownership interest in such Person; or

 

(c)           ten
percent (10%) or more of the direct or indirect ownership of which is
beneficially owned or held by such Person; or

 

(d)           which
is a member of the family (as defined in Section 267(c)(4) of the
IRC) of such Person or which is a trust or estate, the beneficial owners of
which are members of the family (as defined in Section 267(c)(4) of the IRC) of
such Person; or

 

(e)           which
directly or indirectly is a general partner, Controlling shareholder, managing
member of, or acts in a similar capacity with respect to such Person.

 

For purposes of this definition, Borrower, any
Borrower Partner and Guarantor shall be deemed to be Affiliates of Borrower and
each other.

 

“Agent” has the meaning set forth in the first
paragraph of this Loan Agreement.

 

“Agent’s Counsel” means such counsel as Agent
from time to time may engage on behalf of itself and/or Lenders.

 

“Agent’s Counsel Fees” means the reasonable
fees and disbursements of Agent’s Counsel which is “outside” counsel for
services heretofore or hereafter rendered to Agent on behalf of itself and/or
Lenders in connection with the Loan, including the preparation, negotiation,
administration and modification of the Loan Documents, and the enforcement of
Agent’s and Lenders’ rights and remedies under the Loan Documents.

 

“Allocated Loan Amount” means the Allocated
Loan Amount attributable to the applicable Property as set forth on Schedule 2.17(A) attached
hereto.

 

“Applicable Interest Rate” has the meaning set
forth in Section 2.2(a) hereof.

 

“Appraisal” means a written appraisal report of
a Property as the term “appraisal” is defined in the Code of Professional
Ethics of the Appraisal Institute, meeting the minimum appraisal standards for
national banks promulgated by the Comptroller of the Currency pursuant to
Title XI of the Federal Institutions Reform, Recovery and Enforcement Act
of 1989, prepared 

 

2

 

by a member of the Appraisal Institute retained by
Agent at Borrower’s reasonable cost and expense, addressed to Agent and
satisfactory to Agent as to scope, methodology and assumptions and which
complies with the Uniform Standards of Professional Appraisal Practice, setting
forth such appraiser’s determination of the Appraised Value.

 

“Appraisal Update” means any written supplement
or “update” to an Appraisal, prepared by a member of the Appraisal Institute
retained by Agent at Borrower’s reasonable cost and expense, addressed to Agent
and satisfactory to Agent as to scope, methodology and assumptions and which
complies with the Uniform Standards of Professional Appraisal Practice, setting
forth such appraiser’s determination of the Appraised Value.

 

“Appraised Value” means the fair market value
of any Property, which would be obtained in an arm’s length transaction between
an informed and willing buyer and an informed and willing seller, under no
compulsion, respectively, to buy or sell, on the appraisal date of the
Appraisals or any Appraisal Update, as applicable.

 

“Approved Leasing Costs” means actual
out-of-pocket expenses incurred by Borrower pursuant to or in connection with a
Qualified Lease at (a) any Major Property which is the subject of a
Wachovia Termination Event or (b) any other Property or Properties (not to
exceed Thirty Dollars ($30) per net rentable square foot for each such other
Property), including brokerage fees, costs for demising walls, free rent and
Tenant Improvement Allowances, which expenses are (i) if in excess of the Project
Cost Threshold, included in a Project Budget or otherwise approved by Agent in
connection with Agent’s consent to the applicable Lease pursuant to Section 8.10(a) hereof,
or (ii) incurred in the ordinary course of Borrower’s business and on
market terms and conditions in connection with the applicable Lease if such
Lease did not require Agent’s consent pursuant to Section 8.10(b), (c) or
(d) hereof or the amount of which was below the Project Cost
Threshold.  To the extent that any Major
Property which is the subject of a Wachovia Termination Event is thereafter
either (x) the subject of a Release in accordance with Section 2.17
hereof, in which event, amounts on deposit in Wachovia Termination Payment
Reserve Subaccount attributable to such Major Property shall be released to
Borrower and at the direction of Borrower, applied to the applicable Release
Price, or (y) the space at such Major Property that was the subject of the
Wachovia Termination Event thereafter has been leased pursuant to one or more
Qualified Leases, then any portion of the Wachovia Termination Payment
applicable to such Property may be applied to Approved Leasing Costs at any
other Property.

 

“Approved Parent Loan Intercreditor Agreement”
means an intercreditor agreement among Agent, Lenders and Parent Loan lender in
substantially the form of the customary “Standard and Poors” form of
intercreditor agreement, with such modifications as may be required by Agent to
reflect the particulars of the transaction (including restrictions on the sale,
assignment or transfer of a Parent Loan to any Persons that do not satisfy the
customary Standard and Poors “qualified transferee” requirements and who are
not Affiliates of Gramercy Capital Corp. without Agent’s prior consent; provided
that for the purposes of the foregoing, an Affiliate of Gramercy Capital Corp.
shall also include a CDO having as its trustee an Affiliate of Gramercy Capital
Corp. that is a Qualified Trustee), or such other form acceptable to Agent in
all respects.

 

3

 

“Assessment Period” means (a) in
connection with any determination of the Debt Service Coverage Ratio on an
Assessment Period Determination Date referred to in clause (a) of
the definition of Assessment Period Determination Date or ending on the
following dates: (i) with respect to the period from the Closing Date
through the end of the second (2nd) Loan Year, March 31, 2009
and March 31, 2010; and (ii) with respect to the period commencing on
the first (1st) day of the third (3rd) Loan Year and
ending on the Maturity Date, each September 30 and March 31, (b) in
connection with any determination of the Debt Service Coverage Ratio on an
Assessment Period Determination Date referred to in clause (b) of
the definition of Assessment Period Determination Date with respect to a
Wachovia Termination Event, a twelve (12) calendar month period ending on the
last day of the calendar month that ends on or if not on, last prior to the
date that is at least thirty (30) days prior to the applicable Wachovia
Termination Event Determination Date and which is the subject of a compliance
certificate delivered pursuant to clause (ii) of Section 8.1(d) hereof,
and (c) in connection with any determination of the Debt Service Coverage
Ratio during the continued existence of a Cash Sweep Condition referred to in clause
(c) of the definition of Assessment Period Determination Date, a
twelve (12) calendar month period which is the subject of a compliance
certificate delivered pursuant to clause (iii) of Section 8.1(d) hereof.

 

“Assessment Period Determination Date” means (a) in
connection with the determination of the Debt Service Coverage Ratio, the date
which is fifty-five (55) days after the end of each Assessment Period, (b) in
connection with the determination of the Debt Service Coverage Ratio with
respect to a Wachovia Termination Event, the last day of the calendar month
ending on or if not on, last prior to the date that is at least thirty (30)
days before Wachovia Termination Event Determination Date, and (c) in
connection with any determination made as to the continued existence of a Cash
Sweep Condition during any period in which a Cash Sweep Condition exists, the
last day of any calendar month.

 

“Asset Management Agreement” means that certain
Property Management Agreement dated as of the Closing Date between Borrower and
First States Management Corp., L.P. or any other agreement entered into as a
replacement therefore with the prior approval of Agent as required pursuant to Section 8.2(a) hereof.

 

“Asset Manager” means First States Management
Corp., L.P., a Delaware limited partnership, any entity Controlling, Controlled
by or under common Control with First States Management Corp., L.P., or any
other management company retained with the prior approval of Agent which
consent shall not be unreasonably withheld.

 

“Asset Manager Subordination Agreement” has the
meaning set forth in Section 8.2(a) hereof.

 

“Assignee” has the meaning set forth in Section 10.1
hereof.

 

“Assignment and Acceptance” has the meaning set
forth in Section 10.5 hereof.

 

“Assignment of Agreements” means that certain
Assignment of Agreements dated as of the Closing Date made by Borrower in favor
of Agent.

 

4

 

“Assignments of Leases and Rents” (each an “Assignment
of Leases and Rents”) means collectively those certain Assignments of
Leases and Rents dated as of the Closing Date made by Borrower in favor of
Agent for the benefit of Lenders with respect to each Property.

 

“Authorized Agent Representative” means any
person designated as such by Agent from time to time for purposes of Section 2.3(c) hereof
by delivery of a notice to Borrower.

 

“Authorized Borrower Representative” means
Bryan Evoy, Shawn Townsend and any other persons designated as such by Borrower
from time to time for purposes of Section 2.3(c) hereof by
delivery of a notice to Agent.

 

“Bankruptcy Lease” means any Qualified Lease
with respect to which (a) a decree or order has been issued determining
the Lessee thereunder or any Person who owns all or substantially all of the
equity interests in such Lessee to be insolvent or providing for the
appointment of a conservator, receiver, liquidator, custodian, trustee or any
similar Person appointed in connection with any insolvency, readjustment of
debt, marshalling of assets and liabilities, bankruptcy, reorganization or
similar proceedings of or relating to it or of or relating to all, or
substantially all, of its property, or for the winding-up or liquidation of its
affairs has been entered or (b) proceedings under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors have been
instituted against such Lessee or any Person who owns all or substantially all
of the equity interests in such Lessee.

 

“Base Rate” means, as of any date of
determination, a per annum interest rate determined by Agent (which
determination shall be conclusive absent manifest error) to be equal to (a) the
higher of (i) either (w) the rate per annum listed in the “Money
Rates” section of The Wall Street Journal
(or any successor publication) as the “Prime Rate”, or (x) if The Wall Street Journal (or any successor
publication) ceases publication of such rate, then the so-called “prime rate”
or “base rate” as announced by Citibank N.A., or its successor from time to
time, or, (y) if the foregoing rate in clause (w) or (y) is
not published or available, then the so-called “prime rate” or “base rate”
announced by J.P. Morgan Chase & Co. or its bank subsidiary, or (z) if
none of the foregoing rates are available, then, a rate selected by Agent in
its reasonable judgment as most nearly approximating the foregoing rates, or (ii) the
Federal Funds Rate plus one-half of one percent (0.50%) per annum, plus (b) the
Base Rate Margin.  Changes in the
foregoing rates shall be effective simultaneously with publication,
announcement or selection of such rates.

 

“Base Rate Margin” means one and sixty-five one
hundredths of one percent (1.65%) per annum.

 

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

 

“Borrower GP” means First States Investors 3300
B GP, LLC, a Delaware limited liability company, and any other Person that
becomes a general partner of Borrower after the Closing Date.

 

5

 

“Borrower LP” means, individually and
collectively, First States Group, L.P., a Delaware limited liability
partnership, and any other Person that becomes a limited partner of Borrower
after the Closing Date.

 

“Borrower
Partner” means, individually and collectively, Borrower LP or Borrower GP.

 

“Borrower Partnership Agreement” means that
certain Limited Partnership Agreement of Borrower dated as of April 1,
2008.

 

“Borrower Party” means, collectively, Borrower,
Borrower LP, Borrower GP and Guarantor.

 

“Borrower’s Certificate” means that certain
Borrower’s Certificate given by Borrower to Agent for the benefit of Lenders
dated as of the Closing Date.

 

“Borrower’s Knowledge,” “the knowledge of
Borrower” and similar phrases shall (and shall be limited to) the actual
(as distinguished from imputed or construction knowledge) of Andrew S.
Levine, David Schonbraun, Edward J. Matey, Jr. or (as to Environmental
Matters) Sonya A. Huffman, without such individual being required to make any
inquiry in the particular context in which this defined term is being used; provided,
however, with respect to any use of this defined term as of a date after
the Closing Date, “Borrower’s Knowledge” and “the knowledge of Borrower” shall
be deemed to include such knowledge of any Person who shall assume any actual
or contemplated function of Andrew S. Levine, David Schonbraun or Edward J.
Matey, Jr. in the context in which this defined term is being used as of
the date with respect to which such knowledge is determined.  Agent and Lenders acknowledge that the
foregoing individuals are identified solely for the purpose of defining the
scope of Borrower’s Knowledge and not for the purpose of imposing personal
liability or creating any duties running from any such individual to Agent or
Lender.

 

“Broker” has the meaning set forth in Section 6.21
hereof.

 

“Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks in New York,
New York are authorized or required by law or executive order to close.

 

“Calendar Half” means each of the periods of January 1
through the immediately succeeding June 30, and July 1 through the
immediately succeeding December 31.

 

“Calendar Quarter” means each of the periods of
January 1 through the immediately succeeding March 31, April 1
through the immediately succeeding June 30, July 1 through the
immediately succeeding September 30, and October 1 through the
immediately succeeding December 31.

 

“Capital Expenditures” means expenditures for
repairs, replacements or improvements of or to the Properties the cost of which
would be capitalized under GAAP.

 

6

 

“Cash Flow Collection Account” means the
account specified as the Cash Flow Collection Account on Schedule 6.12
attached hereto which shall be either an account at Agent or, at Agent’s
election, Depositary, into which sums are required to be deposited pursuant to Section 2.16
hereof.

 

“Cash Flow Payment Subaccount” has the meaning
set forth in the Cash Management Agreement.

 

“Cash Management Agreement” means that certain
Cash Management Agreement dated as of the Closing Date among Borrower, Agent
and the Depositary.

 

“Cash Sweep Condition” shall exist if (a) as
of an Assessment Period Determination Date, a DSCR Coverage Event is determined
to exist with respect to the applicable Assessment Period, or (b) Borrower
fails to deliver by the date that is ten (10) days prior to the Assessment
Period Determination Date, the financial statements and compliance certificates
required to be delivered with respect to any Calendar Quarter immediately
preceding the Calendar Quarter during which the applicable Assessment Period
Determination Date occurs pursuant to Sections 8.1(b) and (d) hereof.  If a Cash Sweep Condition exists due to
Borrower’s failure to deliver the financial statements and compliance
certificates required to be delivered in accordance with clause (b) above,
then it shall be deemed to continue to exist only until such time, if any, that
Borrower delivers to Agent the financial statements and compliance certificates
referred to in clause (b) above and it is determined based
upon such financial statements and certificates that no Cash Sweep Condition
exists pursuant to clause (a) above (such determination to be
made within ten (10) Business Days of receipt of such financial statements
and compliance certificates by Agent). 
If determined to exist, a “Cash Sweep Condition” shall continue
until such time as Agent has determined as of an Assessment Period
Determination Date, after receipt of the financial statements and certificates
required to be delivered pursuant to Sections 8.1(b) and (d) hereof
(such determination to be made within ten (10) Business Days of receipt of
the such financial statements and compliance certificates by Agent), that no Cash
Sweep Condition exists for the Assessment Period which is the subject of such
financial statements and compliance certificates.

 

“Casualty” means damage or destruction to all
or any part of any Mortgaged Property by fire or other casualty.

 

“Casualty Proceeds Disbursement Threshold” has
the meaning set forth in Section 8.12(b) hereof.

 

“CDO” means a securitization of collateralized
debt obligations.

 

“Central Bank Pledge” has the meaning set forth
in Section 10.1 hereof.

 

“Change in Law” has the meaning set forth in Section 2.12
hereof.

 

“Closing” means the execution and delivery of
this Loan Agreement by Borrower, Agent and Lenders.

 

“Closing Date” means the date upon which the
Closing occurs.

 

7

 

“Collateral” means the Mortgaged Properties and
all other property, real or personal, tangible or intangible, and all rights
thereto, now or hereafter pledged, mortgaged, assigned or delivered pursuant or
with respect to the Loan Documents or otherwise by Borrower or any other Person
to Agent and/or Lenders as security for the Obligations.

 

“Commitment” means, (a) as to any Lender,
the commitment of such Lender to make its Pro Rata Share of the Loan in an
amount as of the Closing Date with respect to PB Capital, in its capacity as
Lender, equal to the Loan Amount, and hereafter, as such commitment shall be
set forth on the signature page of any Assignment and Acceptance by which
such Lender becomes a Lender or by which such Lender assigns all or any portion
of its rights and/or obligations in and to the Loan and the other Loan
Documents to an Assignee, and (b) as to all Lenders, the aggregate
commitment of all Lenders to make the Loan, which aggregate commitment shall be
the Loan Amount on the Closing Date, as the amounts set forth in clauses (a) and
(b) may be adjusted in accordance with this Loan Agreement.

 

“Comparable Building Standards” means with
respect to each Property, the standards of management, operation and
maintenance of office buildings in the locality of such Property, which are
comparable to such Property in location, size, tenant composition, quality and
nature; provided,  that, in any event, as to any portion of any
Property which is the subject of a Wachovia Lease, the standards required by
the applicable Wachovia Lease shall be deemed to be  “Comparable Building Standards” for the
applicable Property or portion of such Property.

 

“Control” and its correlative terms means, with
respect to any 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 the ownership of stock, by contract or otherwise.

 

“Debt Service Constant Percentage” means the
greater of:

 

(a)           the
Applicable Interest Rate as of the last day of the applicable Assessment Period
(and taking into account the effect of any Interest Rate Protection Agreement
then in effect); and

 

(b)           seven
percent (7%).

 

“Debt Service Coverage Ratio” means with
respect to any Assessment Period, the ratio of (a) the Net Operating
Income for such Assessment Period to (b) Implied Debt Service, in each
case calculated as of the last day of such Assessment Period.

 

“Default” means any event which, with the
giving of notice or the passage of time, or both, would constitute an Event of
Default.

 

“Default Rate” means, as to any date, the
actual Applicable Interest Rate for that date (determined on a weighted average
basis to the extent more than one Applicable Interest Rate is then in effect),
plus five percent (5%) per annum.

 

“Defaulting Lender” has the meaning set forth
in Section 11.14(a) hereof.

 

8

 

“Depositary” means Bank of America, N.A. or
another financial institution designated by Borrower and reasonably acceptable to
Agent.

 

“Disbursement” has the meaning set forth in Section 3.2
hereof.

 

“Disclosure Schedule” means the schedule set
forth on Schedule 6.4 attached hereto.

 

“Dollars” or the sign “$” means dollars
in the lawful currency of the United States of America.

 

“DSCR Coverage Event” shall exist at any time
that as of any Assessment Period Determination Date, the Debt Service Coverage
Ratio with respect to the applicable Assessment Period is less than 1.15:1.00.

 

“Eligible Assignee” means (a) Agent (as
Eligible Assignee of other Lenders), (b) Lenders originally party hereto, (c) any
Lender set forth on Schedule 10.1 attached hereto, (d) a
commercial bank organized under the laws of the United States or any state
thereof having consolidated gross assets of at least $400,000,000, (d) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof having consolidated gross assets of at least
$400,000,000, (e) a commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development or which has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements to borrow,
or a political subdivision of such country, including any landesbank or
hypothenkenbank, having consolidated gross assets of at least $400,000,000, (f) a
real estate investment trust which is not an Excluded REIT, investment bank,
insurance company, trust company, commercial credit corporation, pension plan,
pension fund or pension advisory firm, in each case organized under the laws of
the United States or any state thereof and having consolidated gross assets of
at least $400,000,000, or (g) any Affiliate of the foregoing.

 

“Environmental Indemnity” means that certain
Environmental Indemnity dated as of the Closing Date made by Borrower and
Guarantor in favor of Agent and Lenders.

 

“Environmental Reports” means, collectively,
those certain reports and assessments for each Property more particularly
described on Exhibit C attached hereto.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder by any Governmental Authority, as from time to time in
effect.

 

“ERISA Affiliate” means any organization, trade
or business, or other arrangement (whether or not incorporated) which is a
member of a group of which Borrower is also a member and which is treated as a
single employer within the meaning of IRC, Section 414(b), (c), (m) or
(o) or Section 4001 of ERISA.

 

“ERISA Event” means (a) any “reportable
event”, as defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Pension Plan (other than an event 

 

9

 

for which the 30-day notice
period is waived); (b) the withdrawal of Borrower or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA, (c) the complete or partial withdrawal of Borrower or any ERISA
Affiliate from any Multiemployer Plan, (d) notice of reorganization or
insolvency of a Multiemployer Plan, (e) the filing of a notice of intent
to terminate a Pension Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA, (f) the failure to make any
required contribution to a Pension Plan or Multiemployer Plan, (g) the
imposition of a lien under IRC Section 412 or Section 302 of ERISA on
Borrower or any ERISA Affiliate, (h) the existence with respect to any
Pension Plan of an “accumulated funding deficiency” (as defined in IRC Section 412
or Section 302 of ERISA), whether or not waived, or (i) any event or
condition that might reasonably be expected to constitute grounds for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan or the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007
of ERISA.

 

“Event of Default” has the meaning set forth in
Section 9.1 hereof.

 

“Excluded REIT” means (a) any real estate
investment trust whose holdings are primarily equity ownership interests in
office and/or net leased properties, and (b) each of the real estate
investment trusts and other entities set forth in Exhibit J
attached hereto.

 

“Excluded Leases” means (a) that certain
Lease Agreement dated May 9, 2003 between Wachovia Bank National
Association, as Lessor and Joseph Kunznicki, as Lessee, (b) that certain
Lease Agreement dated October 1, 2002 between Wachovia Bank National
Association, as Lessor and Kratman & Swindell, as Lessee; as amended
by Letter dated August 21, 2003 addressed to Wachovia Bank National
Association executed by Thomas L. DeBusk indicating above mentioned Lease
Agreement was taken over by Thomas L. DeBusk and (c) that certain Lease
Agreement dated October 30, 1995 between First Union National Bank, as
Lessor and Buddy Wallen P.C,. as Lessee, as such leases have been amended
and/or assigned on or before the Closing Date or in accordance with the Loan
Agreement.

 

“Excluded Taxes” means (a) Taxes imposed
on or measured by a Person’s overall net income (however denominated and
whether in whole or a portion thereof) and franchise Taxes imposed on it (in
lieu of net income Taxes), (b) any branch profits taxes imposed by the
United States, and (c) any taxes imposed, deducted or withheld with
respect to amounts payable at the time a Person becomes a party hereto or a
Participant, or attributable to such Person’s failure (when legally permitted)
to deliver a duly executed and validly completed (including attachments) copy
of United States Internal Revenue Service Form W-8 or Form W-9 (or
any successor form or any required renewal thereof) as provided under Section 2.10
hereof except that, with respect to Taxes described in clause (c), “Excluded
Taxes” shall not include Taxes with respect to an Assignee of or a
Participant in any interest in the Loan to the extent that the amount of such
Taxes exceeds the amount of Taxes in respect of the assigned interest on the
Loan that otherwise would have been imposed on the holder of such interest as
of the Closing Date.

 

“Exit Fee” has the meaning set forth in the
Loan Fee Letter.

 

10

 

“Federal Funds Rate” means, for any period, a
fluctuating interest rate per annum (based on a 360-day year) equal, for each
day of such period, to the rate of interest quoted at 11:00 a.m. New York
time by the Federal Reserve Bank of New York charged on overnight federal funds
transactions with member banks of the Federal Reserve System.

 

“First Section 8.10 Request
Notice” has the meaning set forth in clause (y) of Section 8.10(f) hereof.

 

“First Tier Default” means any Default with
respect to the obligations in clauses (b), (m) and (p) of
Section 9.1 hereof.

 

“Full Recourse Event” means any of those events
or circumstances described in clause (h) of the definition of “Recourse
Liability Events” in this Section 1.1.

 

“GAAP” means those generally accepted
accounting principles and practices which are recognized as such by the
American Institute of Certified Public Accountants or by the Financial
Accounting Standards Board or through appropriate boards or committees of that
Board after the Closing Date, and which are consistently applied for all
periods.

 

“GKK OP” means GKK Capital, L.P., a Delaware
limited partnership.

 

“Glen Allen Properties” means each of the
Properties located at 10700 N. Park Drive and 10750 Wheat First Drive, Glen
Allen, Virginia.

 

“Government Lists” has the meaning set forth in Section 6.36
hereof.

 

“Governmental Authority” means any federal,
state, county, municipal, parish, provincial or other government, or any
department, commission, board, court, agency, committee, or quasi-governmental
unit whether of the United States of America or any other country, or any
instrumentality of any of them, or any other political subdivision thereof.

 

“Gross Revenues” means, as of any date of
determination and for any period of determination, the sum (without
duplication) of the following, in each case determined on a cash basis (other
than the proviso in clause (a) below):

 

(a)           sums
received by Borrower on account of base rent and other sums received by
Borrower from Lessees as reimbursement for expenses incurred by Borrower
pursuant to Leases during such period of determination; provided, however,
Operating Revenues from any Qualified Lease with any Lessee which is in
occupancy and commenced paying rent as of the last day of an Assessment Period,
but which has not been in occupancy during the entire Assessment Period, shall
be adjusted by Agent to reflect occupancy and payment of base rent and such
other sums by such Lessee during the entire Assessment Period (and any other
base rents or such other sums derived from the space the subject of such
Qualified Lease during the Assessment Period shall be disregarded); and

 

(b)           the
aggregate amount of other Operating Revenues by Borrower during such period of
determination;

 

11

 

provided, however,
notwithstanding the foregoing, in no event shall Gross Revenues include the
following:

 

(i)            Operating
Revenues from any Lease that is not a Qualified Lease as of the date of
determination;

 

(ii)           Operating
Revenues from any Qualified Lease the term of which has not commenced at the
time of determination;

 

(iii)          Operating
Revenues from any Lease with respect to which the Lessee thereunder has
defaulted under or breached any of its payment or other material obligations
(in either instance beyond any notice and cure period) thereunder as of the
last day of the Assessment Period (provided that with respect to Non-Wachovia
Leases, a payment default for a period of less than thirty (30) days shall not
be deemed material);

 

(iv)          Operating
Revenues from any Bankruptcy Lease;

 

(v)           Operating
Revenues in connection with any termination, cancellation or surrender of any
Qualified Lease, whether occurring as a result of a default by a Lessee under
the applicable Qualified Lease, by agreement of Borrower and such Lessee, by
the terms of the applicable Qualified Lease or in connection with any
proceeding for bankruptcy, insolvency, reorganization or relief of debtors of
relating to such Lessee;

 

(vi)          Security
Deposits, including the proceeds of any Lease Letters of Credit;

 

(vii)         any
gain arising from any write-up of assets;

 

(viii)        any
loan proceeds or contribution of capital to Borrower from any Borrower Partner;

 

(ix)           any
income derived from the sale or financing of any of the Collateral;

 

(x)            insurance
proceeds (other than business interruption or rental insurance proceeds);

 

(xi)           condemnation
proceeds or sales proceeds in lieu of and/or under threat of any Taking;

 

(xii)          any
income or gain arising from operations other than the operation of the
Properties, including any net payments received by or for the account of
Borrower from the counterparty to any Interest Rate Protection Agreement
pursuant to the terms thereof; and

 

(xiii)         any
other extraordinary, non-contractual or non-recurring items.

 

12

 

“Guarantor” means Gramercy Capital Corp., a
Maryland corporation.

 

“Implied Debt Service” means with respect to
any Assessment Period, an amount equal to the Interest that would have accrued
on the Loan if the Applicable Interest Rate were equal to the Debt Service
Constant Percentage, assuming, that the outstanding principal balance of the
Loan for the entire Assessment Period was equal to the outstanding principal
balance of the Loan as of the Assessment Period Determination Date (as adjusted
for any repayments of principal made on such date), less any amount
allocated to or contributed by Borrower to the Wachovia Termination Payment
Reserve Subaccount and on deposit therein on the corresponding Assessment
Period Determination Date.

 

“Impositions” means and includes all taxes,
assessments for public improvements or benefits and any payments in lieu
thereof, whether or not commenced or completed prior to the Closing Date or
while any of the Obligations are outstanding, water rates and sewer rents,
charges, license fees, permit fees, inspection fees and other governmental
levies or payments, of every kind and nature whatsoever, general and special,
foreseen or unforeseen, ordinary and extraordinary, in each case which now or
at any time hereafter may be assessed, levied, confirmed, imposed or which may
become a lien upon any Mortgaged Property or any portion thereof, or which are
payable with respect thereto, or upon the rents, issues, revenue, income,
proceeds or profits thereof, or on the occupancy, operation, use, possession or
activities thereof, whether any or all of the same be levied directly or
indirectly or as excise or income or franchise taxes in lieu of taxes which are
otherwise imposed upon property of the same type as such Mortgaged Property,
together with any penalties or other charges with respect to the late payment
or non-payment thereof.

 

“Improvements” has the meaning set forth in
each Mortgage.

 

“Indebtedness”
means:

 

(a)           all
indebtedness for borrowed money or for the deferred purchase price of property
or services (including all obligations, contingent or otherwise in connection
with letter of credit facilities, acceptance facilities or other similar
facilities);

 

(b)           all
obligations evidenced by bonds, notes, debentures or other similar instruments;

 

(c)           all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property);

 

(d)           all
capital lease obligations;

 

(e)           all
obligations, contingent or otherwise, in connection with indemnities, hold
harmless agreements and similar arrangements and in connection with interest
rate exchange agreements and similar instruments; and

 

13

 

(f)            all indebtedness of
the nature referred to in clauses (a) through (e) above
of another Person guaranteed directly or indirectly or secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any lien, security interest or other charge or encumbrance
upon or in property (including accounts and contract rights) owned by the
Person with respect to whom Indebtedness is being determined, even though such
Person has not assumed or become liable for the payment of such Indebtedness.

 

“Indemnified Party”
has the meaning set forth in Section 12.1 hereof.

 

“Insurance Policies”
means the policies of insurance required to be maintained pursuant to Section 8.11
hereof.

 

“Insurance
Requirements” means and includes all provisions of any Insurance Policy,
all requirements of the issuer of any such Insurance Policy, and all orders,
rules, regulations and other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to or
affecting the Properties.

 

“Interest”
means interest payable on the Loan at the Applicable Interest Rate or the
Default Rate, as applicable.

 

“Interest Period”
means the period commencing on each Payment Date and ending on the day immediately
preceding the next succeeding Payment Date, with the first Interest Period
commencing on the Closing Date.

 

“Interest Rate
Protection Agreement” means an agreement with respect to an interest rate
swap, cap, or collar or another derivative arrangement reasonably acceptable to
Agent, in each case, which conforms to the requirements set forth in Section 2.7
hereof.

 

“Interest Rate
Protection Agreement Consent” has the meaning set forth in Section 2.7(a) hereof.

 

“Interest Rate
Protection Guaranty” means that certain Interest Rate Protection Guaranty
dated as of the Closing Date made by Guarantor for the benefit of Agent.

 

“IRC” means the
Internal Revenue Code of 1986, as amended.

 

“Land” means
individually and collectively, the real property more particularly described in
Exhibit A attached to each Mortgage.

 

“Lease” has the
meaning set forth in each Mortgage, noting, however, for purposes of the
elimination of any ambiguity, that as provided in Section 8.10(a) hereof,
Borrower shall not enter into any Lease of any Property or any portion thereof
without Agent’s prior consent except as provided in Section 8.10(b),
(c) or (d) hereof.

 

“Lease Letter of
Credit” means any letter of credit provided to Borrower by any Lessee under
or guarantor of any Lease as security or otherwise.

 

14

 

“Legal Requirements”
means, collectively, (a) all current and future laws, statutes,
regulations, ordinances, codes, rules, rulings, orders, judgments, decrees,
injunctions and other requirements of any Governmental Authority (including
those regarding fire, health, handicapped access, sanitation, ecological,
historic, zoning, environmental protection, wetlands and building laws and the
Americans with Disabilities Act of 1990, Pub. L. No. 89-670, 104
Stat. 327 (1990), as amended, and all regulations promulgated pursuant
thereto) in any way directly or indirectly applicable to Borrower or to the
acquisition, construction, development, sale, use, occupancy, possession,
operation, management, maintenance or ownership of the Properties, or any part
thereof; and (b) all requirements of each Operating Permit.

 

“Lender” and “Lenders”
have the meaning set forth in the first paragraph of this Loan Agreement.

 

“Lender Interest Rate
Protection Agreement” means any Interest Rate Protection Agreement to which
Borrower and Agent, a Lender or any Affiliate of Agent or any Lender are
parties in the event that Borrower and Agent, a Lender or an Lender’s Affiliate
of Agent or any Lender elect to enter into an Interest Rate Protection
Agreement.  Borrower’s performance of its
obligations pursuant to any Lender Interest Rate Protection Agreement is
secured by the Collateral.

 

“Lessee” means a
lessee, sublessee, tenant, subtenant, licensee, concession holder or other
Person having the right to use or occupy all or any portion of any Property
pursuant to a Lease.

 

“LIBOR” means (a) the
London Interbank Offered rate for Dollar deposits in an amount comparable to
the Loan Portion with respect to which the applicable LIBOR Rate is being
determined as appearing on Reuters Screen LIBOR 01 Page (formerly known as
Telerate display page 3750) (or such other page as may replace
Reuters Screen LIBOR 01 Page on that service or such other service as may
be nominated by the British Bankers’ Association as the information vendor for
the purpose of displaying British Bankers’ Association Interest Settlement
Rates for Dollar deposits) at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) on the date that is two (2) LIBOR Banking
Days prior to the first day of the applicable LIBOR Rate Period and with
respect to which LIBOR is being determined for a time period equal to, or if no
equal time period is so appearing on Reuters Screen LIBOR 01 Page (formerly
known as Telerate display page 3750) (or substitute thereof as aforesaid),
the time period so appearing which is most approximately equal to such LIBOR
Rate Period.  If such method for
determining LIBOR shall not be available, LIBOR will be determined at a rate
per annum (rounded upwards, if necessary, to the nearest 1/100th of 1% ) by
Agent in good faith on a customary commercial basis on the basis of the offered
rates for deposits in Dollars for an amount comparable to the applicable Loan
Portion for the same period of time as such LIBOR Rate Period that are offered
by four (4) major banks in the London interbank market at approximately
11:00 a.m. (London time) on the date of determination.  Agent will request that the principal London
office of each of four (4) major banks provide a quotation of its Dollar
deposit offered rate.  If at least two (2) such
quotations are provided, LIBOR will be the arithmetic mean of the
quotations.  If fewer than two (2) quotations
are provided as requested, LIBOR will be determined by Agent in good faith on a
customary commercial basis on the basis of the rates quoted for loans in
Dollars to leading European banks for amounts comparable to the 

 

15

 

Loan for the same period of
time as such LIBOR Rate Period offered by major banks in New York City at
approximately 11:00 a.m. (New York time) on the date that is two (2) LIBOR
Banking Days prior to the first day of the proposed LIBOR Rate Period.

 

“LIBOR Banking Day”
means any Business Day on which dealings in deposits in Dollars are transacted
in the London interbank market and banks are also open for business in London,
England.

 

“LIBOR Rate”
means, with respect to any period during which an Applicable Interest Rate
shall be a LIBOR Rate, an interest rate per annum equal to the sum of (a) the
applicable LIBOR, plus (b) the LIBOR Rate Margin.

 

“LIBOR Rate Margin”
means one and sixty-five one hundredths of one percent (1.65%) per annum.

 

“LIBOR Rate Period”
means for any Loan Portion, each period for the computation of Interest on a
Loan Portion at a LIBOR Rate.  Subject to
Sections 2.3(a)(iv) and 2.3(f) hereof, each LIBOR
Rate Period shall have a duration of one (1), two (2), three (3) or six (6) months,
or one (1) year (in each case, subject to general availability), as
selected by Borrower in accordance with Section 2.3(c) hereof,
except as limited by Sections 2.3(a)(iv) and 2.3(f) hereof,
or such other period as Borrower and Agent shall agree.  Notwithstanding the foregoing, in the case of
a LIBOR Rate Period which would otherwise end after the date which is the
Maturity Date, such LIBOR Rate Period shall have a duration equal to the period
commencing on the effective date of such LIBOR Rate Period and ending on and
including the Maturity Date.  Each LIBOR
Rate Period with respect to any Loan Portion bearing Interest at a LIBOR Rate
shall commence on the Closing Date and thereafter, on any date selected by
Borrower in accordance with Section 2.3 hereof; provided, however,
that notwithstanding anything in this definition of LIBOR Rate Period to the
contrary, (i) if any LIBOR Rate Period would otherwise end on a day which
is not a LIBOR Banking Day, such LIBOR Rate Period shall be extended to the
next succeeding LIBOR Banking Day, unless the result of such extension would be
to carry such LIBOR Rate Period over into another calendar month, in which
event such LIBOR Rate Period shall end on the immediately preceding LIBOR
Banking Day and (ii) any LIBOR Rate Period that begins on the last LIBOR
Banking Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Rate Period)
shall end on the last LIBOR Banking Day of the calendar month in which such
LIBOR Rate Period otherwise would end.

 

“Lien” means any
deed of trust, mortgage, pledge, any assignment of leases and rents, security
interest, encumbrance, lien or charge of any kind including any conditional
sale or other title retention agreement, any lease in the nature thereof, or
the filing of, or any agreement to give, any financing statement under the
Uniform Commercial Code of any jurisdiction.

 

“Loan” has the
meaning set forth in Section 2.1 hereof.

 

“Loan Accounts”
means the Cash Flow Collection Account and the Lockbox Account.

 

16

 

“Loan Agreement”
has the meaning set forth in the first paragraph of this Loan Agreement.

 

“Loan Amount”
means Two Hundred Forty Million and 00/100 Dollars ($240,000,000.00).

 

“Loan Documents”
means, collectively, this Loan Agreement, the Note, the Mortgages, the
Assignments of Leases and Rents, the Assignment of Agreements, the Cash
Management Agreement, the Lockbox Account Agreement, the Interest Rate
Protection Guaranty, the Environmental Indemnity, the Recourse Liability
Agreement, the Loan Fee Letter, Borrower’s Certificate, the UCC Financing
Statements, any Asset Manager Subordination Agreement, any Lender Interest Rate
Protection Agreement, any Account Agreement and all other agreements,
certificates or other documents now or hereafter evidencing or securing or
executed in connection with the Loan.

 

“Loan Fee Letter”
means that certain letter dated as of the Closing Date between Agent and
Borrower pertaining to fees payable with respect to the Loan.

 

“Loan Portion”
means any principal of the Loan with respect to which an Applicable Interest
Rate has been established (and, in the case of any LIBOR Rate, whether or not
such Applicable Interest Rate has become effective); provided, however,
that the amount of any Loan Portion with respect to which a LIBOR Rate is
established shall be at least equal to $1,000,000 (unless the outstanding
principal balance of the Loan is less than $1,000,000 in which case a Loan
Portion in an amount equal to the outstanding principal balance of the Loan
will be permitted hereunder with respect to such Loan Portion).

 

“Loan-to-Value Ratio”
means the ratio of the outstanding principal amount of the Loan as of the date
of such determination to the Appraised Value of all the Properties based on the
then-most current Appraisals or Appraisal Updates, with such adjustments
thereto as determined by Agent.

 

“Loan Year” means
a period of twelve (12) full calendar months commencing, in the case of the
first Loan Year, on April 1, 2008 and, in the case of subsequent Loan
Years, on the anniversary date of the first day of the first Loan Year.

 

“Lockbox Account”
means the account specified as the Lockbox Account on Schedule 6.12
attached hereto which shall be either an account at the Lockbox Bank, into
which sums are required to be deposited pursuant to Section 2.16
hereof.

 

“Lockbox Account
Agreement” means that certain Lockbox Account Agreement dated as of the
Closing Date by and among Borrower, Agent and Depositary.

 

“Lockbox Bank”
means Bank of America, N.A. or another financial institution designated by
Borrower and reasonably acceptable to Agent.

 

“Major Property”
means each Property set forth on Schedule 3.1 attached hereto.

 

17

 

“Management Agreement”
means, individually and collectively, the Asset Management Agreement and any
Property Sub-Management Agreement.

 

“Manager” shall
mean, individually, and collectively, the Asset Manager and any Property
Sub-Manager.

 

“Material Adverse
Effect” means a material adverse effect upon (i) the ability of any
Borrower Party to perform, or of Agent or any Lender to enforce, any material
provision of any Loan Document or (ii) the value, use, enjoyment or
operation of any Property, or as may be expressly indicated herein, all of the
Properties, considered in their entirety.

 

“Material Operating
Agreement” means the Operating Agreements listed on Schedule 6.18
hereto and any additional Operating Agreements entered into by Borrower after
the Closing Date that (a) have non-cancelable terms of ninety (90) days or
longer or are not terminable at any time without cause by Borrower upon no more
than ninety (90) days notice without any penalty or other fee and (b) either
(i) require payments by Borrower in excess of $1,000,000 per calendar
year, or (ii) are “blanket” agreements affecting Properties containing
twenty-five percent (25%) or more of the aggregate net rentable square feet of
the Properties.

 

“Material Taking”
means a Taking (a) of any portion of any Property unless the portion so
taken constitutes less than ten percent (10%) of the Land, such land is located
along the perimeter or periphery of the Land and no portion of the Improvements
is located on such land, or (b) of such portion of any Property or such
other property which when so taken would, in Agent’s determination, leave
remaining a balance of such Property (and, if applicable, such other property)
which, due to the amount and/or nature of the area so taken and/or the location
of the area taken in relation to the area not so taken, (i) would not,
under economic conditions, applicable zoning laws, building regulations and the
requirements of this Loan Agreement, the Permitted Encumbrances permit the
construction of such Property in compliance with this Loan Agreement (including
the costs thereof) or the Restoration of such Property or (ii) would
materially interfere with the leasing of such Property.  Notwithstanding the foregoing, in the event
that Wachovia or Borrower is not entitled to terminate the Wachovia Lease at
such Property and Borrower is obligated to undertake the restoration of such
Property pursuant to the Wachovia Lease as the result of such Taking, such
Taking shall not be a “Material Taking”.

 

“Maturity Date”
means April 1, 2013, or such earlier date as the entire principal amount
of the Loan shall become due and payable by acceleration or otherwise.

 

“Mezzanine
Intercreditor Agreement” means that certain Intercreditor Agreement dated
as of the Closing Date among Agent, Lenders and Mezzanine Lenders.

 

“Mezzanine Lender”
means Goldman Sachs Commercial Mortgage Capital, L.P., a Delaware limited
partnership, Citigroup North America, Inc., a Delaware corporation and SL
Green Realty Corp., a Maryland corporation, together with their successors and
assigns in such capacities as lenders, each a “Mezzanine Lender” and
collectively, “Mezzanine Lenders”.

 

“Mezzanine Loan”
means a loan made by Mezzanine Lender to Borrower GP and Borrower LP, and
certain Affiliates of Borrower Partners and Guarantor by Mezzanine Lender 

 

18

 

pursuant to the Mezzanine Loan
Agreement in the amount of  up to
$850,000,000 pursuant to the Mezzanine Loan Agreement.

 

“Mezzanine Loan Agreement” means that certain Loan
Agreement dated as of the Closing Date by and among First States Investors B
GP, First States Group, L.P. and other borrowers named therein and Mezzanine
Lender.

 

“Mezzanine Loan Documents” means collectively, the
Mezzanine Loan Agreement and all agreements, certificates or other documents
evidencing or securing or executed in connection with the Mezzanine Loan.

 

“Monitoring Rate”
has the meaning set forth in Section 2.7(a) hereof.

 

“Mortgaged Properties”
has the meaning set forth in the Mortgages.

 

“Mortgages” means
collectively, those certain mortgages, deeds of trust and deeds to secure debt
dated as of the Closing Date made by Borrower in favor of Agent for the benefit
of  Lender with respect to each Property,
noting, for purposes of clarification, that the two (2) Glen Allen
Properties are encumbered by one  rather
than two (2) deeds of trust.

 

“Multiemployer Plan”
means a multiemployer plan as defined in Section 4001(a)(3) of ERISA
to which Borrower or any ERISA Affiliate has any obligation or liability,
contingent or otherwise.

 

“Net Operating Income”
means the amount, calculated as of the last day of any Assessment Period, by
which Gross Revenues for such Assessment Period exceed Operating Expenses for
such Assessment Period.

 

“Net Proceeds”
means the amount of all insurance proceeds paid pursuant to any Insurance
Policy as the result of a Casualty, after deduction of the costs and expenses
(including fees of any insurance consultant or adjuster and reasonable
attorneys’ fees and disbursements), if any, incurred in collecting the same.

 

“Net Restoration Award”
means the amount of all awards and payments received on account of a Taking,
after deduction of the costs and expenses (including reasonable attorneys’ fees
and disbursements), if any, incurred in collecting the same.

 

“Non-Availability
Notice” has the meaning set forth in Section 2.11(a) hereof.

 

“Non-Wachovia Lease”
means any Lease which is not a “Wachovia Lease”.

 

“Note” means that
certain Promissory Note dated as of the Closing Date in an amount equal to the
Loan Amount made by Borrower in favor of Agent on behalf of Lenders, together
with any replacements or substitutes for the foregoing.

 

“Obligations”
means, collectively, all present and future indebtedness, obligations, duties
and liabilities of Borrower to Agent and Lenders arising pursuant to this Loan
Agreement, any Lender Interest Rate Protection Agreement and the other Loan
Documents or 

 

19

 

evidenced by the Note, and all
interest accruing thereon, together with reasonable attorneys’ fees and
disbursements incurred in the drafting, negotiation, enforcement or collection
thereof and of the other Loan Documents, regardless of whether such
indebtedness, obligations, duties or liabilities are direct, indirect, fixed,
contingent, joint, several or joint and several.

 

“Operating Account”
means the account specified as the Operating Account on Schedule 6.12
attached hereto.

 

“Operating Agreement”
means any agreement entered into by Borrower, other than the Property
Documents, the Wachovia Master Agreement, Leases and any Management Agreement,
which relates to the ownership, operation or maintenance of, or the use,
licensing or leasing of any personal property or equipment in connection with
the operation and maintenance of, any Properties.  “Operating Agreements” shall also include any
lease brokerage agreements and leasing commission agreements.

 

“Operating Budget”
means the annual operating budget delivered in accordance with Section 8.1(f) hereof,
together with any amendments thereunder delivered to Agent in accordance with
the Loan Agreement.

 

“Operating Expenses”
means, as of any date of determination and for any period of determination, the
sum (without duplication) of Impositions, insurance premiums, and other
reasonable and customary operating costs and expenses and all capital
expenditures actually incurred by Borrower in the ordinary course of Borrower’s
business during such period of determination in connection with the ownership,
use, occupancy, management, repair, maintenance, leasing and operation of the
Properties, in each case determined on an accrual basis in accordance with
GAAP, assuming, however, that (a) all management fees payable for
such period shall be deemed to be equal to the greater of (i) actual
management fees payable or (ii) two percent (2.00%) of Operating Revenues
(making appropriate adjustments to revenue to reflect reimbursements under the
Wachovia Leases and reimbursable expenses under Non-Wachovia Leases for such
period), (b) capital expenditures for such period shall be deemed to be
equal to ten cents ($0.10) per net rentable square foot of the Properties and (c) any
expenses related to a Qualified Lease referred to in the proviso in clause (a) of
the definition of “Gross Revenues” shall be adjusted by Agent to include any
expenses that would have been incurred had such Qualified Lease been in effect
during the entire Assessment Period, and excluding (w) Interest,
Additional Interest and payments principal payable hereunder, (x) federal
and state income taxes, franchise taxes or other taxes based on income or gross
receipts due and owing from Borrower and (y) depreciation, amortization
and any other non-cash items.

 

“Operating Permits”
means, collectively, all authorizations, consents and approvals given by and
licenses and permits issued by Governmental Authorities which are required for
the ownership, use and occupancy of any Property in accordance with this Loan
Agreement, the Loan Documents, all Legal Requirements, the Permitted
Encumbrances and the Asset Management Agreement, and for the performance and
observance of all Legal Requirements and all agreements, provisions and
conditions of Borrower contained herein and therein otherwise pertaining to the
ownership, use and occupancy of any Property.

 

20

 

“Operating Revenues”
means all cash receipts of Borrower from or related to the ownership and
operation of, or otherwise derived from, the Properties, including (without
duplication) all Rents, concession fees and charges and other miscellaneous
operating revenues and sums payable to Borrower from users of parking spaces
and other facilities or amenities located on the Properties, proceeds from
rental or business interruption insurance, withdrawals from cash reserves, but
excluding security deposits under any Lease unless and until they are forfeited
by the depositor.

 

“Parent Loan”
means (a) a loan made to Borrower (which shall be subject to a standstill
agreement in a form and substance satisfactory to Agent in all respects), or (b) a
mezzanine loan made to any Borrower Partner (which shall be subject to entering
into either an Approved Parent Loan Intercreditor Agreement, in each case by
Guarantor or an Affiliate of Guarantor, for the purpose of (x) making a
prepayment of the Loan to reduce the outstanding principal balance so the Debt
Service Coverage Ratio is at least 1.15:1.00 or (y) making payments to the
Cash Flow Collection Account in accordance with Section 2.16(f) hereof.

 

“Participant” has the meaning
set forth in Section 10.2 hereof.

 

“Patriot Act”
means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as
the same may be amended from time to time, and corresponding provisions of
future laws.

 

“Patriot Act Offense”
has the meaning set forth in Section 6.36 hereof.

 

“Payment Date”
means each of (a) the first (1st) Business Day of each calendar month
during the Term and (b) the Maturity Date. 
“Payment Date” shall also include such earlier date, if any, on which
the unpaid principal balance of the Loan is paid in full.

 

“PB Capital” means
PB Capital Corporation.

 

“PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.

 

“Pension Plan”
means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA, IRC Section 412 or Section 302
of ERISA, and in respect of which a Borrower or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to
be) an “employer” as defined in Section 3(5) of ERISA.

 

“Permitted
Encumbrances” means, collectively, (a) (i) with respect to the
Collateral, the matters set forth in Schedule B of the Title Policy for
each Property, (ii) the Liens created by the Loan Documents, (iii) Liens,
if any, for Impositions not yet due or being contested in accordance with Section 8.8
hereof, (iv) mechanics’, materialmen’s or similar Liens, if any, and Liens
for delinquent Impositions, in each case only if being contested in accordance
with Section 8.8 hereof, (v) rights of any Lessees under any
Qualified Leases and (vi) such matters expressly consented to by Agent,
and (b) with respect to direct or indirect ownership interests in

 

21

 

Borrower, such pledges and
other encumbrances permitted pursuant to the definition of “Permitted Transfer”
set forth in this Section 1.1 or as otherwise consented to by Agent.

 

“Permitted Guarantor
Transfer” means any of the following:

 

(a)           any direct or indirect,
voluntary or involuntary, sale, conveyance, pledge, assignment, encumbrance,
disposition or other transfer, either in one or a series of transactions, of
any direct or indirect legal or beneficial interest in Guarantor or GKK
Capital, L.P. (“GKK OP”) and/or any rights, distributions, profits or
proceeds relating thereto, including by way of any merger, consolidation,
amalgamation, sale, or other transfer of any kind of any stock, limited or
general partnership interests,  limited
liability company interests, trust certificates or other similar evidences of
ownership of legal or beneficial interests, as the case may be, Guarantor or
GKK OP or any legal or beneficial interest therein;

 

(b)           any sale of all or
substantially all of the assets of Guarantor or GKK OP to any Person who
assumes all of the obligations of Guarantor or GKK OP, as applicable, under the
Loan Documents; provided, however, that if after giving effect to
any of the foregoing, more than forty-nine percent (49%) in the aggregate of
the direct or indirect interests in Borrower are owned by a Person and its
Affiliates that owned less than forty-nine percent (49%) of the direct or
indirect interests in  Borrower as of the
Closing Date of the last Insolvency Opinion delivered at the Closing of the
loan or under the Loan Documents, Borrower shall deliver to Lender a
replacement, in form and content and from a law firm, in each case reasonably
acceptable to Agent,  for the
non-consolidation opinion delivered to Agent on the Closing Date; or

 

(c)           any current or
additional borrowing or financing by or other indebtedness of any nature of
Guarantor or GKK OP and/or any direct or indirect holder of a legal or
beneficial interest therein and, for the purposes of this sentence, “indebtedness”
of a Person in the form of (i) any indebtedness or liability of such
Person (including amounts for borrowed money and indebtedness in the form of
mezzanine debt and preferred equity); (ii) obligations evidenced by bonds,
debentures, notes, or other similar instruments; (iii) obligations for the
deferred purchase price of property or services (including trade obligations); (iv) obligations
under letters of credit; (v) obligations under acceptance facilities; (vi) all
guaranties, endorsements and other contingent obligations to purchase, to
provide funds for payment, to supply funds, to invest in any Person or entity,
or otherwise to assure a creditor against loss; and (vii) obligations
secured by any liens, whether or not the obligations have been assumed.

 

“Permitted
Indebtedness” means any Indebtedness of Borrower under (a) the Loan
Documents, (b) incidental indemnity and hold harmless agreements under
Leases and other agreements entered into by Borrower in accordance with this
Loan Agreement, (c) unsecured trade payables incurred on by, or on behalf
of, Borrower for or in respect of the ownership or operator of any of the
Collateral in the ordinary course of owning and operating any Property and its
business which (i) do not exceed, at any time, in the aggregate amounts
comparable to those amounts that would be incurred by the owner of other
properties located in each locality where a Property is located which are
comparable to such Property in location, quality, size and nature and
determined in the context of the obligations and responsibilities of Borrower
pertaining to such Property, giving effect to any Leases then in effect, and (ii) are
paid within sixty (60) days 

 

22

 

of the date due, and (d) any
Interest Rate Protection Agreement entered into in accordance with Section 2.7(a) hereof.

 

“Permitted
Transfer” means any of the following Transfers:

 

(a)           the transfer of any Property in connection
with the release of such Property from a Mortgage pursuant to Section 2.17
hereof;

 

(b)           any Permitted Guarantor Transfer;

 

(c)           any conveyance, transfer, assignment or sale by
any Borrower Partner (or the holder of any direct or indirect interest in any
Borrower Partner) of up to forty-nine percent (49%) in aggregate (taking into
account all prior assignments or sales but excluding Permitted Guarantor
Transfers) of the direct or indirect beneficial ownership interests in
Borrower, so long as Borrower shall at all times be directly or indirectly
Controlled by Gramercy Capital Corp. or a successor to Gramercy Capital Corp.
pursuant to a Permitted Guarantor Transfer;

 

(d)           the pledge of the partnership interests in Borrower to Mezzanine Lender
pursuant to the Mezzanine Loan Documents as security for the Mezzanine Loan
entered into in accordance with the terms hereof and the Mezzanine
Intercreditor Agreement; provided, however, that any realization
on the pledge of the partnership interests in any Borrower to Mezzanine Lender
or other remedy exercised by Mezzanine Lender under the Mezzanine Loan
Documents, including any transfer pursuant thereto, and any transfer by
Mezzanine Lender of its interests in the Mezzanine Loan or such pledge,
shall not be permitted unless expressly undertaken in accordance with, and
subject to the conditions of, the Mezzanine Intercreditor Agreement; and

 

(e)           any pledge of the
partnership interests in Borrower or a Borrower Partner to an Affiliate which
is direct or indirect parent of Borrower to secure a Parent Loan.

 

“Post-Default Plan”
has the meaning set forth in Section 11.5(d) hereof.

 

“Project Budget”
shall mean a budget prepared by Borrower and approved by Agent setting forth,
in reasonable detail, each line item of anticipated Approved Leasing Costs.

 

“Project Cost
Threshold” means as pertaining to (a) the amount of the Approved
Leasing Costs pertaining to any Lease, or (b) the cost of any proposed alterations
(as opposed to repairs and maintenance in the ordinary course of business)
applicable to any Property in a twelve (12) month period, an amount equal to
the greater of (x) twenty percent (20%) of the Allocated Loan Amount for
the applicable Property or (y) $2,400,000.

 

“Properties” or “Property”
have the meanings set forth in the recitals hereof.

 

“Property Condition
Reports” collectively, those certain reports and assessments for each
Property set forth on Schedule 6.17(A) attached hereto.

 

“Property Documents”
has collectively and individually, the meanings set forth in the Mortgages.

 

23

 

“Pro Rata Share”
means with respect to all matters relating to any Lender, the percentage
obtained by dividing (a) the Commitment of such Lender by (b) the
aggregate Commitment of all Lenders, in each case as of the date of
determination.

 

“Property Sub-Management
Agreement” means collectively, those certain management agreements dated as
of the Closing between Asset Manager and each of Jones Lang LaSalle Americas, Inc.,
CB Richard Ellis, Inc. (as successor to Trammell Crow Services, Inc.)
and Wachovia Bank, National Association, and any other management company
retained with the prior approval of Agent as required pursuant to Section 8.2(b) hereof.

 

“Property Sub-Manager”
means collectively, Jones Lang LaSalle Americas, Inc., CB Richard Ellis, Inc.
(as successor to Trammell Crow Services, Inc.), Wachovia Bank, National
Association, and any other management company retained with the prior approval
of Agent which consent shall not be unreasonably withheld.

 

“Property Sub-Manager
Subordination Agreement” has the meaning set forth in Section 8.2(b) hereof.

 

“Qualified
Counterparty” means a financial institution (other than a Lender) whose
senior long term debt is rated A or better by Standard & Poor’s
Ratings Group, A2 or better by Moody’s Investors Service, Inc., or
equivalent rating by Fitch Inc. or other nationally recognized rating agency,
and which is otherwise confirmed in writing by Agent as being reasonably
acceptable to Agent.

 

“Qualified Lease”
means (a) every Lease certified as true, correct and complete in Borrower’s
Certificate as of the Closing Date by Borrower including any renewals,
extensions, modifications or amendments thereof entered into in accordance with
the terms of Section 8.10 hereof, and (b) any Lease (including
any renewal, amendment, extension or modification thereof) (i) consented
to by Agent pursuant to Section 8.10(a) hereof, or (ii) entered
into by Borrower without the consent of Agent pursuant to and in accordance
with Section 8.10(b), (c) or (d) hereof.

 

“Qualified Trustee”
means (i) a corporation, national bank, national banking association or a
trust company, organized and doing business under the laws of the United States
of America or any state therein, 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 in either of the then in effect top
two rating categories of each of the Rating Agencies.

 

“Post-Default Plan”
has the meaning set forth in Section 11.5(b) hereof.

 

“Rating Agencies”
shall mean each of Fitch, Inc., Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc. or Moody’s
Investors Service, Inc.

 

“Recourse Liability
Agreement” means that certain Recourse Liability Agreement dated the
Closing Date made by Borrower and Guarantor for the benefit of Agent.

 

24

 

“Recourse Liability
Events” means, collectively, any or all of the following:

 

(a)           fraud or willful
misconduct on the part of Borrower, Borrower GP or Guarantor;

 

(b)           an intentional material
misrepresentation or intentional breach of a warranty set forth in this Loan
Agreement or any other Loan Document on the part of Borrower, any Borrower
Partner or Guarantor;

 

(c)           misappropriation or
misapplication by Borrower or Asset Manager of Loan proceeds, Operating
Revenues, insurance proceeds, condemnation awards, Security Deposits, sums
payable pursuant to any Interest Rate Protection Agreement, funds from any
Account, reserve funds or proceeds of the disposition of all or any portion of
the Collateral in contravention of this Loan Agreement or any other Loan
Document, including a breach by Borrower or Manager of Sections 2.16,
2.18, 2.19 and 2.20 hereof;

 

(d)           distributions,
dividends or payments made in contravention of Section 8.25 hereof;

 

(e)           intentional physical
waste by Borrower or Asset Manager of any Mortgaged Property or any part
thereof;

 

(f)            any Transfer made in
contravention of this Loan Agreement or any other Loan Document;

 

(g)           the incurrence of any
Indebtedness, whether secured or unsecured, in contravention of this Loan
Agreement or any other Loan Document;

 

(h)           the occurrence of an
Event of Default pursuant to clause (l) of Section 9.1
hereof or the occurrence of a Default or an Event of Default pursuant to clause (m) of
Section 9.1 hereof as a result of or involving any collusion of
Borrower, any Borrower Partner and Guarantor or any Affiliate thereof
Controlled by Guarantor with each other or another Person; and

 

(i)            the failure of
Borrower to return (or credit) to any Lessee any Tenant Security Deposit in
accordance with the terms of the applicable Lease, or to pay to Agent for
deposit in the Tenant Security Account within five (5) Business Days after
demand by Agent, which demand may only be made any time after the occurrence of
an Event of Default, the amount of any Tenant Security Deposits not then on
deposit in the Tenant Security Account.

 

“Register” has the
meaning set forth in Section 10.6 hereof.

 

“Release” has the
meaning set forth in Section 2.17(a) hereof.

 

“Release Conditions”
has the meaning set forth in Section 8.12(d)(i) hereof.

 

25

 

“Release Payment”
means the sum of (a) the Release Price and (b) the amount, if any,
required to reduce the outstanding principal balance of the Loan such that
after giving effect to such payment and the prepayment in the amount of the
Release Price required in connection with such Release, assuming that the
Property being released was not included in the definition of “Property” under
the Loan Agreement during the period with respect to which any such
determination is being made, and assuming with respect to the calculations in clauses
(x) and (y) below, that (i) the Debt Service Constant
Percentage employed in the calculation of Implied Debt Service is eight percent
(8%) and (ii) the Debt Service Coverage Ratio with respect to the
applicable Assessment Period is 1.00:1.00, (x) no Cash Sweep Condition
would have existed with respect to the Assessment Period which is the subject
of the recent most calculation pursuant to clause (a) of the
definition of “Cash Sweep Condition”, or (y) if the applicable
Release occurs prior to the first Assessment Period Determination Date, no Cash
Sweep Condition would have existed on the Closing Date based on Agent’s
computations made in connection with the Closing.

 

“Release Price”
means the lesser of (i) the outstanding principal balance of the Loan and (ii) an
amount equal to one hundred twenty percent (120%) of the amount of the
Allocated Loan Amount attributable to the applicable Property.

 

“Rent Roll” has
the meaning set forth in Section 6.37 hereof.

 

“Rents” has the
meaning set forth in each Mortgage.

 

“Request for
Disbursement” means the package of certificates, reports and other
documents in the forms attached hereto as Exhibit D hereto.

 

“Requisite Lenders”
means, at any time, non-Defaulting Lenders having Commitments representing at
least sixty-six and two-thirds percent (66 2/3%) of the total Commitments
of all non-Defaulting Lenders at such time.

 

“Restoration”
means in case of a Casualty or a Taking, the restoration, replacement or
rebuilding of the portion of any Property affected by the Casualty or Taking
such that when such restoration, replacement or rebuilding is completed, such
Property, including the Property, shall have been restored, in the case of any
Casualty, substantially to the same character and condition as prior to such
Casualty, and in the case of any Taking, to an integral unit as substantially
similar as possible, taking into account the extent of the Taking, to the
character and condition of such Property prior to such Taking, in accordance
with this Loan Agreement, all Legal Requirements, the Permitted Encumbrances,
and to the extent any alterations or additions were made in compliance with
this Loan Agreement, with any such alterations or additions. In any case,
Restoration shall (i) provide substantially the same (but in no case less
than what is required by Legal Requirements and the Permitted Encumbrances)
amount and type of, and rights with respect to, utilities and parking spaces
applicable to such Property as existed prior to such Casualty or Taking, and (ii) provide
sufficient (in Agent’s reasonable determination) access across and over such
Property to the public roads and highways.

 

26

 

“Second Section 8.10
Request Notice” has the meaning set forth in clause (z) of Section 8.10(f) hereof.

 

“Security Deposit”
means any cash security or other deposit given by or on behalf of a Lessee to
the landlord under a Lease.

 

“Security Documents”
means, collectively, this Loan Agreement, the Mortgages, the Assignment of
Agreements, the Assignments of Leases and Rents, any Account Agreement, the UCC
Financing Statements and any other Loan Document entered into to secure the
Obligations.

 

“Special Purpose
Bankruptcy Remote Entity” has the meaning set forth on Exhibit E
attached hereto.

 

“Spread Maintenance
Payment” means, to the extent provided in Section 2.4 hereof
with respect to any payment or prepayment of the Loan on or before the second
(2nd) anniversary of the Closing Date which when aggregated with any other
payments or prepayments made pursuant to Sections 2.4(a),  (b),
(c) or (e) hereof on or prior to such second (2nd)
anniversary, is in excess of $60,000,000, an amount equal to Interest that
would have accrued on the principal amount of the Loan prepaid from the date of
prepayment through the second (2nd) anniversary of the Closing Date calculated
in accordance with Section 2.2(c) hereon at a rate per annum
equal to the LIBOR Rate Margin.

 

“Strike Rate” has
the meaning set forth in Section 2.7(a) hereof.

 

“Surveys” means
collectively, surveys for each Property more particularly described in Schedule 6.22
attached hereto.

 

“Subaccounts”
shall have the meaning set forth in Section 2.16(a) hereof.

 

“Taking” (and its
correlative meanings) means any temporary or permanent taking by any
Governmental Authority of any portion of any Mortgaged Property or any portion
thereof through eminent domain, condemnation or other proceedings or by any
settlement or compromise of such proceedings, or any voluntary conveyance of
such property or any portion thereof during the pendency of any such
proceedings.

 

“Taxes” has the
meaning set forth in Section 2.10 hereof.

 

“Tenant Improvement
Allowances” means, in connection with the leasing of space at any Property,
construction allowances pursuant to Qualified Leases for Lessees’ initial
build-out (or in connection with a renewal) of their leased premises, to the
extent required to be paid for or reimbursed by Borrower (or credited against
base rent) to Lessees and that are specifically set forth in the Qualified
Leases that exist on the Closing Date or Qualified Leases entered into after
the Closing Date.

 

“Tenant Improvements”
means any improvements to leased premises at any Property made by Borrower
pursuant to Qualified Leases or related work letter agreements.

 

27

 

“Tenant Security
Account” has the meaning set forth in Section 2.18 hereof.

 

“Term” means the
period commencing on the Closing Date and ending on the then Maturity Date.

 

“Term Sheet” means
that certain Term Sheet dated as of February, 2008 of PB Capital
pertaining to the Loan.

 

“Title Company”
means collectively, Fidelity National Title Insurance Company.

 

“Title Policies”
means collectively, the lender’s title insurance policies for each Property in
favor of Agent issued on the Closing Date, including all endorsements thereto
more particularly described in Schedule 4.3(b) attached
hereto.

 

“Title Update”
means an updated title report indicating that, since the immediately preceding
Title Update delivered to Agent pursuant to the Loan Documents, there has been
no change in the state of title to the subject Property and no Liens or survey
exceptions (other than Permitted Encumbrances) not theretofore approved by
Agent as provided herein, which title report shall be in form and substance
acceptable to Agent.

 

“Transfer” means (a) the
conveyance, transfer, assignment, pledge, mortgage, encumbrance, hypothecation
or sale, by operation of law or otherwise, of (i) the Collateral, or any
part thereof or interest therein, or (ii) a direct or indirect equity or
beneficial interest as a partner, shareholder, member or otherwise in Borrower
or any Borrower Partner or in any Person having a direct or indirect equity or
beneficial interest in Borrower or any Borrower Partner respectively, (b) the
leasing of all or substantially all of any Property (excluding Qualified
Leases), or (c) any change in Borrower’s composition or form of business
association or any modification of the Borrower Partnership Agreement or any of
the other organizational documents of Borrower or any Borrower Partner which
would result in a change in the ownership or Control of Borrower or any
Borrower Partner, as the case may be, or the rights of any Borrower Partner
with respect thereto.

 

“UCC Financing
Statements” means such UCC financing statements as Agent shall deem
necessary or desirable to perfect Agent’s security interest in the Collateral
(or any portion thereof).

 

“Upfront Fee” has
the meaning set forth in the Loan Fee Letter.

 

“Wachovia” means
Wachovia Bank, National Association, a national banking association.

 

“Wachovia Estoppel”
means those certain estoppel certificate(s) dated March 25, 2008 and March 28,
2008 executed and delivered by Wachovia pursuant to the Wachovia Leases and the
Wachovia Master Agreement respectively.

 

“Wachovia Leases”
means collectively, the Leases set forth on Exhibit G attached
hereto.

 

28

 

“Wachovia Master
Agreement” means collectively, that certain Master Agreement Regarding
Leases dated as of September 22, 2004 by and between Wachovia Bank,
National Association and First States Investors 3300, LLC, as amended by that
certain First Amendment to Master Agreement dated as of June     ,
2005 and as further amended by that certain Second Amendment to Master
Agreement dated as of April 1, 2008.

 

“Wachovia Termination
Event” means the exercise by Wachovia of its termination rights under a
Wachovia Lease and/or the Wachovia Master Agreement with respect to any space
in any Property.

 

“Wachovia Termination
Event Determination Date” means the date which is fifteen (15) days after
the day on which Wachovia surrenders the space in any Property which is the
subject of a Wachovia Termination Notice and is no longer obligated to pay Rent
with respect to such space as a result of such Wachovia Termination Event.

 

“Wachovia Termination
Notice” means a written notice by Wachovia to Borrower of the exercise by
Wachovia of its termination rights under a Wachovia Lease and/or the Wachovia
Master Agreement with respect to any Property or any portion thereof.

 

“Wachovia Termination
Payment” means, if a Cash Sweep Condition is determined to exist on a
Wachovia Termination Event Determination Date as a result of such Wachovia
Termination Event determined
in accordance with Section 8.1(d)(ii) hereof, a payment
equal to thirty dollars ($30) per net rentable square foot of space which is
the subject of such Wachovia Termination Event, less any amounts deposited with
respect thereto in the Wachovia Termination Reserve Subaccount pursuant to Section 2.16(e) hereof.

 

“Wachovia Termination Payment
Reserve Subaccount” has the meaning set forth in the Cash Management
Agreement.

 

“Withdrawal Liability”
means at any time the aggregate liability incurred (whether or not assessed)
with respect to all Multiemployer Plans pursuant to Section 4201 of ERISA
or for increases in contributions required to be made pursuant to Section 4243
of ERISA.

 

“Zoning Reports”
collectively, those certain zoning reports for each Property set forth on Schedule 6.17(B) attached
hereto.

 

SECTION 1.2.      Other Definitional Provisions.

 

(a)           All terms defined in
this Loan Agreement shall have the above-defined meanings when used in the Note
or any of the other Loan Documents, or in any other certificate, report or
other document made or delivered pursuant to this Loan Agreement, unless the
context therein shall otherwise require.

 

(b)           Whenever appropriate
herein or required by the context or circumstances, the masculine shall be
construed as the feminine and/or the neuter, the singular as the plural, and
vice versa.

 

29

 

(c)           The words “hereof”, “herein”,
“hereunder” and similar terms when used in this Loan Agreement shall refer to
this Loan Agreement as a whole and not to any particular provision of this Loan
Agreement.

 

(d)           The words “include” and
“including” wherever used in this Loan Agreement or any other Loan Document
shall be deemed to be followed by the words “without limitation”.

 

(e)           Any reference to any
Loan Document or any other document, instrument or agreement in this Loan
Agreement or in any other Loan Document shall be deemed to mean such Loan
Document or other document, instrument or agreement, as applicable, as it may
from time to time be amended, supplemented, restated, consolidated, severed,
split, extended, substituted for, partially released, replaced, increased,
waived, cross-collateralized, renewed or otherwise modified in accordance with
the terms of the Loan Documents.

 

ARTICLE II

 

THE LOAN

 

SECTION 2.1.      The Loan; Use of Funds.    Subject
to the conditions and upon the terms herein provided, Lenders agree to lend to
Borrower and Borrower agrees to borrow from Lenders on the Closing Date an
aggregate amount equal to the Loan Amount (the “Loan”). The Loan shall
be made by Lenders ratably in proportion to their respective Commitments. The
Loan shall be evidenced by the Note. Interest and Additional Interest, if any,
shall be payable in accordance with the Note and this Loan Agreement. The Loan
shall be repaid with Interest, Additional Interest, costs, fees and charges as
more particularly set forth in this Loan Agreement, the Note, the Mortgages and
the other Loan Documents. Principal amounts of the Loan which are repaid for
any reason may not be reborrowed.

 

SECTION 2.2.      Interest.

 

(a)           Interest at the Applicable Interest Rate. Until
paid in full, and subject to Sections 2.5(c) and 2.11
hereof, each Loan Portion shall bear interest at an interest rate which shall
be a LIBOR Rate or Base Rate (an “Applicable Interest Rate”) as
designated (and as applicable, converted) by Borrower from time to time
pursuant to Section 2.3 hereof or as otherwise provided in Section 2.3
hereof.

 

(b)           Interest Payments.    Borrower
shall pay Interest as provided in this Loan Agreement on each Loan Portion on
each Payment Date, in arrears, for the Interest Period then ending. Borrower
shall pay Additional Interest as and when provided herein, and in the event any
Lender Interest Rate Protection Agreement is in effect, in such Lender Interest
Rate Protection Agreement by Borrower as the counterparty thereunder.

 

(c)           Calculation of Interest.

 

(i)            Interest accruing at
the Applicable Interest Rate shall be calculated on the basis of the actual
number of days elapsed and a year of 360 days.

 

30

 

(ii)           Any change in the Base
Rate shall be automatically effective as of the day on which such change in
rate occurs.

 

(iii)          Each determination of an
interest rate by Agent pursuant to any provision of this Loan Agreement shall
be conclusive and binding on Borrower in the absence of manifest error.

 

SECTION 2.3.      Determination of Applicable
Interest Rate.

 

(a)           Applicable Interest Rate.

 

(i)            The Applicable
Interest Rate at the Closing shall be either the Base Rate or the LIBOR Rate
selected by Borrower in writing and delivered to Agent on the Closing Date.

 

(ii)           The Applicable Interest
Rate (and any related LIBOR Rate Period) from time to time applicable to each
Loan Portion upon and after the expiration of any LIBOR Rate Period shall be
determined in the manner set forth in Section 2.3(c), (d) and
(e) hereof.

 

(iii)          After a conversion
election, each Loan Portion shall bear interest during each applicable Interest
Period at the Applicable Interest Rate as shall have been designated pursuant
to Section 2.3(c) or (e) hereof, or as otherwise
provided in Section 2.3(d) hereof. In connection with the
selection or conversion of the Applicable Interest Rate pursuant to Section 2.3(c) or
(e) hereof, Borrower shall specify the principal amount of the Loan
Portion for which such selection or conversion is being made.

 

(iv)          At all times, the sum of
all Loan Portions shall equal the outstanding principal amount of the Loan.

 

(v)           Notwithstanding
anything to the contrary in this Agreement, if the Loan has not been syndicated
at or prior to Closing, then for a period commencing on the Closing and
continuing until earlier of Agent’s deemed completion of syndication and the
four (4) month anniversary of the Closing Date, any LIBOR Rate shall be
based on a LIBOR Rate Period of one (1) month.

 

(b)           [Intentionally Deleted]

 

(c)           LIBOR Rate Conversion Options.    Subject
to Sections 2.5(c) and 2.3(f) hereof, Borrower may
elect to convert the Applicable Interest Rate for any Loan Portion (i) from
the Base Rate to a LIBOR Rate effective on any LIBOR Banking Day, or (ii) from
such LIBOR Rate to another LIBOR Rate effective upon the expiration of the then
current LIBOR Rate Period; provided, however, that (x) there
shall not have occurred and be continuing any First Tier Default or Event of
Default,  (y) the circumstances
referred to in Section 2.11 hereof shall not have occurred and be
continuing, and (z) after giving effect to such conversion, the number of
LIBOR Rates in effect shall not exceed, in the aggregate, five(5). If Borrower
wishes to convert the Applicable Interest Rate on any Loan Portion as permitted
by the preceding sentence, an Authorized Borrower Representative shall give
Agent notice thereof (which shall be irrevocable) to Agent to the attention of
an Authorized Agent Representative prior to 12:00 p.m. (New York  

 

31

 

City time) on the
day that is not less than three (3) LIBOR Banking Days prior to the
proposed conversion date specifying (A) the principal amount of the Loan
with respect to which such conversion shall occur, (B) the proposed
conversion date, which shall be determined in accordance with the preceding
sentence and (C) the applicable LIBOR Rate Period.

 

(d)           Reversion to Base Rate or One-Month LIBOR Rate.    
If an Authorized Borrower Representative fails timely to notify
Agent in accordance with Section 2.3(a)(i), (c) or 2.3(e) hereof
of Borrower’s election of a LIBOR Rate or Base Rate or fails to provide all of
the information required by Section 2.3(c) or (e) hereof
for the election of a LIBOR Rate or a Base Rate, as applicable, the Applicable
Interest Rate on such Loan Portion shall automatically upon the expiration of
such LIBOR Rate Period convert to a LIBOR Rate having a LIBOR Rate Period of
one (1) month or, if such one-month LIBOR Rate Period would end after the
Maturity Date, a LIBOR Rate Period commencing upon the expiration of such
expiring LIBOR Rate Period and ending on and including the Maturity Date,
subject to the proviso in the definition of “LIBOR Rate Period” herein. If
Borrower is not permitted to elect a LIBOR Rate pursuant to clause (x) of
Section 2.3(c) hereof, or the events described in clause (y) of
Section 2.3(c) shall have occurred, the Applicable Interest
Rate on such Loan Portion shall automatically upon the expiration of such LIBOR
Rate Period convert to a Base Rate.

 

(e)           Base Rate.     Subject
to Sections 2.5(c) and 2.3(f) hereof, Borrower may
elect to convert the Applicable Interest Rate from a LIBOR Rate to a Base Rate
effective upon the expiration of the then current LIBOR Rate Period; provided,
however, that there shall not have occurred and be continuing any Event
of Default. If Borrower wishes to convert the Applicable Interest Rate on any
Loan Portion as permitted by the preceding sentence, an Authorized Borrower
Representative shall give Agent notice thereof (which shall be irrevocable) to
Agent to the attention of an Authorized Agent Representative prior to 3:00 p.m.
(New York City time) on the day that is not less than three (3) LIBOR
Banking Days prior to the proposed conversion date specifying (A) the
principal amount of the Loan Portion with respect to which such conversion
shall occur, and (B) the proposed conversion date, which shall be
determined in accordance with the preceding sentence.

 

(f)            Interest
Rate Corresponding to Interest Rate Protection Agreements.     Notwithstanding
anything to the contrary set forth in this Section 2.3, at all
times that Borrower is required to cause one or more Interest Rate Protection
Agreements to be in effect as required pursuant to Section 2.7(a) hereof,
Borrower shall cause the Loan to have an Applicable Interest Rate which is a
LIBOR Rate having a LIBOR Rate Period of one (1) month. In clarification
of the foregoing, in the event and to the extent that as provided in Section 2.7(a) hereof,
Borrower is permitted to defer the effect of any interest rate swap or other
hedging arrangement for a notional amount corresponding to a Loan Portion which
is the subject of any then-existing LIBOR Rate being less than or equal to the
interest rate referred to in clause (i) thereof, Borrower shall not
be required to have an Applicable Interest Rate which is a LIBOR Rate having a
LIBOR Rate Period of one (1) month apply to such Loan Portion until the
expiration of such then-existing LIBOR Rate Period .

 

(g)           Notice of Applicable Interest Rate Conversion.     Agent
shall promptly notify each Lender upon its receipt of notice from Borrower
pursuant to Section 2.3(c) or (e) hereof electing
to convert to an Applicable Interest Rate.

 

32

 

SECTION 2.4.      Principal Payments.

 

(a)           Principal Payment at Maturity.    Borrower
shall pay the unpaid principal balance of the Loan in a single installment on
the Maturity Date, together with all accrued Interest and all other sums due
under the Loan Documents.

 

(b)           Prepayment on Account of Releases.    Concurrently
with and as a condition to a Release pursuant to Section 2.17
hereof, Borrower shall make a prepayment of the Loan in the amount of the
Release Payment. Concurrently with any such prepayment of principal, Borrower
shall pay all sums required to be paid pursuant to and shall otherwise comply
with Section 2.4(f) hereof.

 

(c)           Optional Prepayments.    In
addition to prepayments pursuant to Section 2.4(b), (d) and
(e) hereof, Borrower may, upon not less than ten (10) Business
Days prior notice to Agent, prepay the Loan, in whole or in part (in amounts
equal to at least $1,000,000), on any date in accordance with this Section 2.4(c).
Any such prepayment notice shall be revocable up to five (5) Business Days
prior to such prepayment and shall specify the date and amount of the
prepayment and the Loan Portion with respect to which such prepayment is
requested to be applied. If the Loan Portion with respect to which such
prepayment is requested to be applied is not specified, the prepayments shall
be applied in accordance with Section 2.5(e) hereof. Concurrently
with any such prepayment, Borrower shall pay to Agent all sums required to be
paid pursuant to, and shall otherwise comply with, Section 2.4(f) hereof.

 

(d)           Mandatory Prepayment.    Borrower
shall be required to prepay the Loan at any time and from time to time upon the
occurrence of any of the circumstances requiring prepayment described in this
Loan Agreement or any Mortgage by paying the principal amount so required to be
prepaid. Concurrently with any such prepayment, Borrower shall pay to Agent all
sums required to be paid pursuant to, and shall otherwise comply with, Section 2.4(f) hereof;
noting for the purposes of clarification, provided, however,
that, no Exit Fee or Spread Maintenance Payment shall be required to be paid
pursuant to Section 2.4(f) hereof with respect to any such
prepayment required to be made in connection with a Casualty or a Taking.

 

(e)           Prepayment Upon a DSCR Coverage Event.    In
connection with any DSCR Coverage Event, Borrower may, upon not less than ten (10) Business
Days prior notice to Agent, prepay the Loan, in whole or in part, on any date
in order to reduce the outstanding principal balance of the Loan so that the Debt
Service Coverage Ratio for the applicable Assessment Period (calculated as if
such payment were made on the first day of such Assessment Period) would not be
less than 1.15:1.00. Concurrently with any such prepayment, Borrower shall pay
to Agent all sums required to be paid pursuant to, and shall otherwise comply
with, Section 2.4(f) hereof.

 

(f)            Reduction of Interest Rate Protection Arrangement and
Payment of Other Sums.    Concurrently with any
prepayment of principal pursuant to this Section 2.4, Borrower
shall, as a further condition of such prepayment, (v) (1) in the case
of any Lender Interest Rate Protection Agreement other than an interest rate
cap with respect to which Borrower has no further payment obligations, cause a
reduction of the notional amount of such interest rate protection arrangement
so as to cause such notional amount to correspond to the 

 

33

 

outstanding
principal amount of the Loan, after giving effect to such prepayment, (2) pay
all sums, if any, payable by Borrower pursuant to any Interest Rate Protection
Agreement with respect to such reduction and (3) provide evidence to Agent
of Borrower’s compliance with clauses (1) and (2) above,
(w) pay all accrued and unpaid Interest to and including the date of such
prepayment on the amount being prepaid, (x) pay all Additional Interest,
the Exit Fee, if any, fees and any other amounts due and payable hereunder, and
under the Note, the Mortgage and the other Loan Documents, (y) in case of
any prepayment made pursuant to Sections 2.4(a), (b), (c) or
(e) hereof prior to the second (2nd) anniversary of the Closing
Date, pay the Spread Maintenance Payment on the amount being prepaid, and (z) pay
all reasonable out-of-pocket fees and expenses incurred by Agent in connection
with the Loan and/or with the prepayment of the Loan.

 

(g)           Other Sums.    Borrower
shall pay to Agent all other sums owed to Agent and/or Lenders pursuant to the
Loan Documents when such sums are due and payable as provided in the applicable
Loan Document, or if not provided therein, within ten (10) days after the
due date thereof or if expressly required, within ten (10) days after
written demand by Agent. To the extent any other such sums are determined on a
per diem or similar basis, such sums shall be calculated on the basis of a
360-day year and the actual number of days elapsed.

 

SECTION 2.5.      Payment; Default Rate;
Application of Certain Monies; Priority of Payments; Set-offs.

 

(a)           Manner of Payment.    All
sums payable by Borrower under this Loan Agreement or any other Loan Document
shall be made in Dollars and in immediately available funds not later than (i) 10:00 a.m.
(New York City time) on the date when such payment is due with respect to all
payments other than Release Payments and (ii) with respect to any Release
Payment, 2:00 p.m. (New York City time) on the date when such Release
Payment is due. Such sums shall be payable by wire transfer to the credit of
Agent, at Bank of New York, ABA #021-000-018, in favor of PB Capital Corp.,
Account #890-0388-935, Reference:  WBBD
Portfolio, or to such other account or address as Agent may from time to time
designate in writing to Borrower. In the event that any sums are received by
Agent from or on behalf of Borrower after the applicable time limit set forth
in this Section 2.5(a), such sums shall be treated as being
received by Agent on the immediately succeeding Business Day for all purposes
and Borrower shall be responsible for any costs determined to actually have
been incurred by Agent and Lenders as a result thereof, including any
Additional Interest and overdraft charges.

 

(b)           Payment on a Non-Business Day.    Whenever
any payment to be made under the Loan Documents shall be stated to be due, or
if the Maturity Date would otherwise occur, on a day which is not a Business
Day, such payment shall be made, and the Maturity Date shall occur, as
applicable, on the immediately succeeding Business Day. Any such extension of
time shall be included in the computation of payment of Interest (including
interest at the Default Rate), fees, and Additional Interest.

 

(c)           Default Rate.

 

(i)            Notwithstanding
anything to the contrary contained herein or in another Loan Document, if an
Event of Default shall have occurred and be continuing, each

 

34

 

Loan Portion shall
bear Interest from and including the date of the occurrence of such Event of
Default (after as well as before judgment) at a fluctuating rate of interest
per annum equal to the Default Rate, with respect to each Loan Portion, which
interest at the Default Rate shall be payable upon demand of Agent.

 

(ii)           If Borrower shall fail
to make a payment within five (5) days after the due date therefor (i.e.,
the scheduled due date or within the required number of days following written
demand therefor to the extent provided under the Loan Documents) of any sum
under the Loan Documents (whether principal (other than principal which is
accruing interest at the Default Rate pursuant to Section 2.5(c)(i) above),
Interest, Additional Interest or other amounts), such sum shall bear Interest
from and including the date such payment is due (as distinguished from the
fifth (5th) day after such due date) to but excluding the date such
payment is made (after as well as before judgment) at a fluctuating rate of
interest per annum equal to the Default Rate with respect to such sum.

 

(iii)          Agent’s failure to
collect interest at the Default Rate at any time shall not constitute a waiver
of Agent’s right thereafter, at any time and from time to time (including upon
acceleration of the Maturity Date or upon payment in full of the Loan), to
collect such previously uncollected interest at the Default Rate or to collect
subsequently accruing interest at the Default Rate.

 

(d)           Late Payment Fee.    Borrower
shall pay to Agent for the account of the Lenders a late payment premium in the
amount of five percent (5.00%) of any principal payment (other than with
respect to the principal payment to be made on the Maturity Date pursuant to Section 2.4(a) hereof),
Interest, Additional Interest, fee or other amount payable under any Note, this
Loan Agreement or the other Loan Documents made more than five (5) days
after the due date thereof, which late payment premium shall be due with any
such late payment. The acceptance of a late payment premium shall not
constitute a waiver of any Default or Event of Default then existing or
thereafter arising. Agent’s failure to collect a late payment premium at any
time shall not constitute a waiver of Agent’s right thereafter, at any time and
from time to time (including upon acceleration of the Maturity Date or upon
payment in full of the Loan), to collect such previously uncollected late
payment premiums or to collect subsequently accruing late payment premiums.

 

(e)           Priority of Payments.    Provided
that no Event of Default shall have occurred and be continuing, all payments
received by Agent with respect to the Loan shall be applied on account of sums
due and owing pursuant to the Note, this Loan Agreement, the Mortgages or the
other Loan Documents in the following order of priority:

 

(i)            first, to the
payment of all amounts due and then owing pursuant to the Note, the Loan
Agreement or the other Loan Documents which do not constitute either principal
or Interest;

 

(ii)           second, to the
payment of all Interest due and then owing in such order and manner as Agent
shall determine in its sole discretion; and

 

35

 

(iii)          third, to the
unpaid principal balance of the Loan; provided, however, so long
as no Event of Default has occurred and is continuing, Lenders shall endeavor
to apply such payments sequentially, if applicable, on account of the Loan
Portions bearing interest at the Base Rate, if any, and then Loan Portions
bearing interest at the LIBOR Rate having a LIBOR Rate Period ending closest to
the day on which such payment is made.

 

(f)            Priority if Event of Default.    Upon
the occurrence and during the continuance of an Event of Default, all payments
received by Agent with respect to the Loan, including sums received by Agent in
connection with Agent’s exercise of any remedies pursuant to the Loan Documents
or otherwise at law or in equity, and all sums paid to Borrower as a result of
the sale of any Property or any portion thereof or any refinancing of the Loan,
shall be applied in such order and manner as Agent shall determine in its sole
discretion.

 

(g)           No Set-offs.    All
sums payable by Borrower under the Note, this Loan Agreement and the other Loan
Documents shall be paid in full and without set-offs, counterclaims, deductions
or withholdings of any kind other than in the case of Taxes, to the extent
provided in Section 2.10 hereof.

 

SECTION 2.6.      [Intentionally Deleted]

 

SECTION 2.7.      Interest Rate Protection
Agreement.

 

(a)           Interest Rate Protection Agreement.    Within
five (5) Business Days after the tenth (10th) consecutive LIBOR Banking
Day on which LIBOR (as distinguished from the LIBOR Rate) applicable to a LIBOR
Rate Period of one (1) month (the “Monitoring Rate”), if determined
on such LIBOR Banking Day, would exceed six percent (6.00%) per annum (the “Strike
Rate”), or at such earlier time as Borrower may elect in Borrower’s
discretion, Borrower shall enter into and satisfy all conditions precedent to
the effectiveness of an Interest Rate Protection Agreement that shall satisfy
all of the following conditions and shall thereafter maintain such Interest
Rate Protection Agreement in full force and effect during the Term:

 

(i)            The effect of the
Interest Rate Protection Agreement shall protect Borrower against upward
fluctuations of an Applicable Interest Rate which is LIBOR (as distinguished
from the LIBOR Rate) applicable to a LIBOR Rate Period of one (1) month in
excess of six and one-quarter of one percent (6.25%) per annum during the then
remaining portion of the Term and in the notional amount equal to the
then-outstanding principal balance of the Loan; provided, however,
in the event and to the extent that any LIBOR Rates in effect at the time such
Interest Rate Protection Agreement is required to be put in effect are less
than six and one-quarter of one percent (6.25%), then with respect to the
corresponding Loan Portions, the protection afforded by such Interest Rate
Protection Agreement need not take effect until the last day of the
corresponding LIBOR Rate Periods and if such LIBOR Rate Period ends on the
Maturity Date, shall not be required;

 

36

 

(ii)           The Interest Rate
Protection Agreement shall be entered into between Borrower and Agent (or an
Affiliate of Agent), if Agent (or an Affiliate of Agent) and Borrower shall
agree to enter into an Interest Rate Protection Agreement, or if Agent (or an
Affiliate of Agent) and Borrower do not agree to enter into such Interest Rate
Protection Agreement, either a Lender (if permitted by Agent and if such Lender
and Borrower shall agree to enter into an Interest Rate Protection Agreement)
or a Qualified Counterparty;

 

(iii)          In the case of an
Interest Rate Protection Agreement which is an interest rate cap agreement or
other arrangement requiring “up-front” payment, all sums payable by Borrower on
account of the purchase price for the Interest Rate Protection Agreement during
the term of the Interest Rate Protection Agreement shall have been paid in full
on or prior to the effective date thereof;

 

(iv)          Borrower’s interest in
such Interest Rate Protection Agreement, including all rights of Borrower to
payment thereunder and any residual value thereof, shall have been collaterally
assigned to Agent pursuant to the Mortgages and the Assignment of Agreements;;

 

(v)           The financial
institution which is party to such Interest Rate Protection Agreement shall
have executed and delivered to Agent a consent to the collateral assignment of
Borrower’s interest in such Interest Rate Protection Agreement referred to in clause (iv) above
pursuant to a consent in the form attached hereto as Schedule 2.7(a) or
otherwise in form and content reasonably acceptable to Agent (the “Interest
Rate Protection Agreement Consent”); and

 

(vi)          Such Interest Rate
Protection Agreement shall be reasonably satisfactory to Agent in form and
content.

 

(b)           [Intentionally Deleted]

 

(c)           Institution of Interest Rate Protection Agreement.    Borrower
shall, within five (5) Business Days after the tenth (10th)
consecutive LIBOR Banking Day on which the Monitoring Rate exceeds the Strike
Rate, deliver to Agent evidence satisfactory to Agent that Borrower has entered
into and satisfied all requirements to the effectiveness of an Interest Rate
Protection Agreement that shall satisfy all of the requirements set forth
herein.

 

(d)           Failure to Provide Interest Rate Protection.    In
the event that Borrower breaches its obligation to enter into and maintain an
Interest Rate Protection Agreement in full force and effect as set forth in Section 2.7(a) hereof,
in addition to Agent’s rights and remedies hereunder or under the other Loan
Documents, Agent may, but shall have no obligation to, at Borrower’s sole cost
and expense and on Borrower’s behalf, enter into an Interest Rate Protection
Agreement as may be required pursuant to Section 2.7(a) hereof.
In the event that Agent shall elect to enter into an Interest Rate Protection
Agreement on Borrower’s behalf, such Interest Rate Protection Agreement, at
Agent’s election, may be a Lender Interest Rate Protection Agreement. Agent is
hereby irrevocably appointed the true and lawful attorney of Borrower (coupled
with an interest), in its name and stead, to execute such an Interest Rate

 

37

 

Protection
Agreement and all necessary documents ancillary thereto, and for that purpose
Agent may execute all necessary agreements and instruments, and may substitute
one or more persons with like power, Borrower hereby ratifying and confirming
all that its said attorney or such substitute or substitutes shall lawfully do
by virtue hereof. All sums paid and liabilities incurred by Agent pursuant to
this Section 2.7 shall be paid by Borrower (and not from the
proceeds of the Loan) within ten (10) days after Agent’s demand with
interest at the Default Rate to the date of payment to Agent and such sums and
liabilities, including such interest, shall be deemed and shall constitute advances
under this Loan Agreement and be evidenced by the Note and be secured by the
Security Documents.

 

(e)           Obligation of Borrower Unaffected by Interest Rate
Protection Agreement.    No
Interest Rate Protection Agreement shall alter, impair, restrict, limit or
modify in any respect the obligation of Borrower to pay Interest or Additional
Interest on the Loan, as and when the same becomes due and payable in
accordance with the provisions of the Loan Documents.

 

(f)            Termination, etc. of Interest Rate Protection
Agreement.    Borrower shall not terminate, modify,
cancel or surrender, or permit the termination, modification, cancellation or
surrender of, any Interest Rate Protection Agreement without the prior consent
of Agent, which consent shall not be unreasonably withheld or delayed with
respect to any modification thereof so long as after giving effect to such
modification the Interest Rate Protection Agreement otherwise complies with Section 2.7(a) hereof.
Within five (5) Business Days after Borrower obtains knowledge of or
receipt of notice (which may be given by Agent or a Lender) of a default by the
financial institution that is a party to any Interest Rate Protection
Agreement, Borrower shall substitute for such defaulted Interest Rate
Protection Agreement another Interest Rate Protection Agreement (to which the
Person that defaulted under the defaulted Interest Rate Protection Agreement is
not a party) so that, after giving effect to such substitution, Borrower is in
compliance with the requirements of Section 2.7(a) hereof.

 

(g)           Receipts from Interest Rate Protection Agreements.
   All payments due to Borrower pursuant to any Interest Rate
Protection Agreement, including upon any termination thereof, shall be payable
to and held by Agent; provided, however, that all periodic “net payments” due
to Borrower so received by Agent in connection with a payment made by a
counterparty to an Interest Rate Protection Agreement shall be applied by Agent
on account of Interest then due and payable on the Loan. If an Event of Default
occurs, Agent may, in its sole discretion, for so long as such Event of Default
is continuing and in addition to any other rights and remedies hereunder, apply
the amounts so held by Agent to the Loan or other amounts due under the Loan Documents
at Agent’s election. Until such time as all Obligations have been paid in full,
Borrower shall have no right to withdraw or otherwise apply any funds received
by Agent on account of any Interest Rate Protection Agreement. Such funds shall
constitute additional security for the Obligations, a security interest therein
being granted hereby. In the event Borrower receives any sums pursuant to or in
connection with any Interest Rate Protection Agreement, it shall immediately
pay such sums to Agent.

 

(h)           Security.    No
Interest Rate Protection Agreement shall be secured by all or any portion of
the Collateral unless it is a Lender Interest Rate Protection Agreement, in
which case such Lender Interest Rate Protection Agreement shall be secured pari passu with the 

 

38

 

other sums secured
by the Mortgages and other Security Documents. In amplification of the
foregoing, in the event that any payment received by Borrower hereunder is
insufficient to pay all amounts due and owing on the date of such payment, such
payment shall be applied pari passu
together with any application thereof to the outstanding principal of the Loan.

 

SECTION 2.8.      [Intentionally
Deleted]

 

SECTION 2.9.      Additional Interest.    Borrower
shall pay to Agent the following losses, costs and expenses of Agent or any
Lender incurred or estimated to be incurred by Agent or such Lender, as
applicable:

 

(a)           all
losses, costs and expenses incurred by reason of obtaining, liquidating or
redeploying deposits or other funds acquired by Agent or such Lender to fund or
maintain the Loan at a LIBOR Rate, as a result of a prepayment of the Loan, the
failure to make a prepayment of all or any portion of the Loan when required
hereunder or following the giving of a notice revoking Borrower’s election to
prepay all or any portion of the Loan, or a delay in converting or a failure to
convert the Applicable Interest Rate to a LIBOR Rate (and which in event shall
be determined without regard to the LIBOR Rate Margin component of a LIBOR Rate
set forth in clause (b) of the definition thereof); and

 

(b)           any
sums becoming payable by Borrower pursuant to any Lender Interest Rate
Protection Agreement, including any termination thereof.

 

In any of the foregoing
events, Borrower shall pay to Agent, concurrently with any principal payment
with respect to clause (a) of this Section 2.9 and
within ten (10) days after written demand in all other cases, or in the
case of any Lender Interest Rate Protection Agreement, such shorter period as
shall be specified therein, such amount as shall equal the amount of the
Additional Interest certified by Agent (or the applicable Lender) to Borrower
by reason of such event. A certificate as to the amount of such Additional
Interest submitted by Agent to Borrower setting forth Agent’s (or the
applicable Lender’s) basis for the determination of Additional Interest shall
be conclusive evidence of the amount thereof, absent manifest error. Failure on
the part of Agent to demand payment from Borrower for any Additional Interest
attributable to any particular period shall not constitute a waiver of Agent’s
(or the applicable Lender’s) right to demand payment of such amount for any
subsequent or prior period; provided, however, that no demand for
any payment hereunder may be made more than one hundred eighty (180) days after
the same has accrued.

 

SECTION 2.10.    No Withholdings.     All
sums payable by Borrower under the Note, this Loan Agreement and the other Loan
Documents, shall be paid in full and without set-off or counterclaims and free
of any deductions or withholdings for any and all taxes, levies, imposts,
deductions, duties, filing and other fees or charges (collectively, “Taxes”)
(other than Excluded Taxes). In the event that Borrower is prohibited from
making any such payment free of such deductions or withholdings with respect to
Taxes (other than Excluded Taxes), then Borrower shall pay such additional
amount to Agent as may be necessary in order that the actual amount received by
Lenders after such deduction or withholding (and after payment of any
additional Taxes (other than Excluded Taxes) due as a consequence of the
payment of such additional amount) shall equal the amount that would have been
received if such deduction or

 

39

 

withholding were not required; provided, however, that
Borrower shall not be obligated to pay such additional amount on account of a
specific Lender if at the time such Lender became a “Lender” hereunder,
Borrower is required to deduct or withhold any sums solely because such Lender
was legally permitted to deliver, but failed to deliver, to Borrower
(a) two (2) duly executed and validly completed (including
attachments) copies of United States Internal Revenue Service Form W-8 or
any successor form or any required renewal thereof, as the case may be,
certifying in each case that such Lender is entitled to receive payments
hereunder or under the other Loan Documents without deduction or withholding
(or at a reduced rate) of any United States federal income taxes or (b) two
(2) duly executed (and validly completed (including any attachments))
copies of United States Internal Revenue Service Form W-8 or W-9 or any
successor form or any required renewal thereof as the case may be, establishing
that a full exemption exists from United States backup withholding tax, and as
result of such failure, Borrower was prohibited by the IRC from making any such
payment free (or at a reduced rate) of such deductions or withholding. Notwithstanding
anything contained in this Section 2.10, in no event will any
Lender’s failure to deliver any such forms, or any renewal or extension
thereof, affect, postpone or relieve Borrower from any obligation to pay
Interest, principal, Additional Interest and other amounts due under the Loan
Documents (other than amounts due under this Section 2.10 as a
result of a Lender’s failure to deliver such forms). Such additional amount
shall be due concurrently with the payment with respect to which such additional
amount is owed in the amount of Taxes (other than Excluded Taxes) certified by
Agent (or the applicable Lender). Failure on the part of Agent to demand
payment from Borrower for any Taxes (other than Excluded Taxes) attributable to
any particular period shall not constitute a waiver of Agent’s (or the
applicable Lender’s) right to demand payment of such amount for any subsequent
or prior period; provided, however, that no demand for any
payment hereunder may be made more than one hundred eighty (180) days after the
same has accrued. If Borrower is obligated to pay any material additional
amounts described in this Section 2.10 to a Lender or Agent, then,
at Borrower’s sole reasonable cost and expense, such Lender or Agent, as the
case may be, shall make reasonable efforts to designate another lending branch
or agency of such Lender or Agent to maintain its share of the Loan if such
designation would avoid the need for, or materially reduce the amount of, such
additional amounts and would not, in the good faith opinion of such Lender or
Agent, result in any adverse economic, tax, legal or regulatory consequences
for, or otherwise be disadvantageous to, such Lender or Agent or such lending
branch or agency.

 

SECTION 2.11.    Unavailability of LIBOR; Illegality.

 

(a)           Unavailability of LIBOR.    If
on any date on which Borrower seeks to establish a LIBOR Rate as the Applicable
Interest Rate pursuant to Section 2.3 hereof or if Section 2.3(d) hereof
applies, Agent determines (which determination shall be conclusive and binding
upon Borrower) that (i) Dollar deposits in an amount approximately equal
to the then outstanding principal balance of the Loan bearing interest at a
LIBOR Rate are not generally available to any Lender at such time in the London
interbank Eurodollar market for deposits in Eurodollars, (ii) reasonable
means do not exist for ascertaining LIBOR, or (iii) the Applicable
Interest Rate would be in excess of the maximum interest rate which Borrower
may by law pay, Agent shall promptly give notice (the “Non-Availability
Notice”) of such fact to Borrower and the option to convert to or to
continue the Applicable Interest Rate on such Loan Portion as a LIBOR Rate
shall be suspended until such time as such condition no longer exists. In the
event 

 

40

 

that the option to
elect, to convert to or to continue an Applicable Interest Rate as a LIBOR Rate
shall be suspended as provided in this Section 2.11(a), effective
upon the giving of the Non-Availability Notice, and if applicable, effective as
of the first date that the one (1) month LIBOR Rate Period would otherwise
be in effect pursuant to Section 2.3(d) hereof, interest on
the Loan Portion(s) for which a LIBOR Rate was to be determined shall be
payable at the Base Rate, from and including the date of the giving of the
Non-Availability Notice (or the date that the one (1) month LIBOR Rate
Period would otherwise be in effect pursuant to Section 2.3(d) hereof,
if applicable) until the Maturity Date or until any earlier date on which a
LIBOR Rate shall become effective for such Loan Portion(s) pursuant to Section 2.3
hereof following the giving of notice by Agent to Borrower that the conditions
referred to in this Section 2.11(a) no longer exist; provided,
however, that Agent’s failure to so notify Borrower of such cessation
shall not be deemed a breach by Agent of any term of this Loan Agreement or
otherwise limit the obligations of Borrower or any other Person under this Loan
Agreement or any other Loan Document.

 

(b)           Illegality.    In the event
that at any time while any Loan Portion bears interest at a LIBOR Rate, any
Lender determines in good faith (which determination shall be conclusive and
binding on Borrower) that it shall become illegal for such Lender to maintain
the Loan or a portion thereof on the basis of one or more LIBOR Rates, Agent
shall promptly after receiving notice thereof from such Lender give notice of
such fact to Borrower, and the option to elect, to convert to or to continue
the Applicable Interest Rate on any Loan Portion as a LIBOR Rate shall be
suspended until such time as such condition shall no longer exist. In the case
of any existing Loan Portion(s) affected by the circumstances described in
the immediately preceding sentence, the Applicable Interest Rate on such Loan
Portion(s) shall be converted automatically to the Base Rate (unless such
Lender determines that such conversion is not required with respect to any such
Loan Portion(s)) and shall be payable at the Base Rate in the same manner as
provided in Section 2.11(a) hereof. Notwithstanding the
foregoing, such Lender shall, as promptly as practicable, at Borrower’s sole
reasonable cost and expense, make reasonable efforts to designate another
lending branch or agency of such Lender to maintain its share of the Loan if
such designation would enable it to lawfully honor its obligation to make or
maintain its share of the Loan and would not, in the good faith opinion of such
Lender or Agent, result in any adverse economic, tax, legal or regulatory
consequences for, or otherwise be disadvantageous to, such Lender or Agent or
such lending branch or agency.

 

SECTION 2.12.    Increased Costs and Capital Adequacy.

 

(a)           Borrower agrees to pay
Agent additional amounts as Agent shall determine in good faith will be
sufficient to compensate Lenders for increased costs incurred in maintaining
the Loan or any portion thereof outstanding or for the reduction of any amounts
received or receivable arising as a result of any change in any applicable law,
regulation or treaty, or in the interpretation or administration thereof after
the Closing Date by any domestic or foreign governmental authority charged with
the interpretation or administration thereof (whether or not having the force
of law), or by any domestic or foreign court (collectively, a “Change in Law”)
(i) changing the basis of taxation of payments to any Lender (other than
with respect to Excluded Taxes), (ii) imposing, modifying or applying any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, credit extended by, or any other acquisition of
funds for loans by any Lender (whether directly, indirectly or on a 

 

41

 

portfolio wide
basis) or (iii) imposing any other condition affecting transactions in the
nature of the Loan.

 

(b)           If any Lender shall
determine that (i) any change in the application of any law, rule,
regulation or guideline adopted or arising out of the June 2006 report of
the Basel Committee on Banking Regulations and Supervisory Practices entitled “Basel II:  International Convergence of Capital
Measurement and Capital Standards:  a
Revised Framework -Comprehensive Version”, or any change in the
interpretation or administration thereof by any domestic or foreign
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, (ii) any change in or adoption
of any other law, rule, regulation or guideline regarding capital adequacy, or (iii) compliance
by any Lender, or any lending office of any Lender, or the holding company of
any Lender, with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency based on any such change or adoption, has or would have the
effect of reducing the rate of return on any Lender’s capital to a level below
that which such Lender would have achieved but for such adoption, change or
compliance (taking into consideration the policies of such Lender with respect
to capital adequacy), then from time to time Borrower shall pay to Agent such
additional amounts as will be sufficient to compensate Lenders for such actual
reduction with respect to any portion of the Loan outstanding. If Borrower
becomes obligated to pay any material additional amounts described in this Section 2.12,
such Lender shall, as promptly as practicable, at Borrower’s sole reasonable
cost and expense, make reasonable efforts to designate another lending branch
or agency of such Lender to maintain its share of the Loan if such designation
would enable it to lawfully honor its obligation to make or maintain its share
of the Loan and would not, in the good faith opinion of such Lender or Agent,
result in any adverse economic, tax, legal or regulatory consequences for, or
otherwise be disadvantageous to, such Lender or Agent or such lending branch or
agency.

 

(c)           Any amount payable by
Borrower pursuant to Section 2.12(a) or (b) hereof
shall be paid to Agent within thirty (30) days of receipt by Borrower of a
certificate of Agent setting forth the amount due and Agent’s basis for the
determination of such amount, which statement shall be conclusive and binding
upon Borrower absent manifest error. Failure on the part of Agent to demand
payment from Borrower for any such amount attributable to any particular period
shall not constitute a waiver of Agent’s right to demand payment of such amount
for any subsequent or prior period; provided, however, that no
demand for any payment hereunder may be made more than one hundred eighty (180)
days after the same has accrued.

 

SECTION 2.13.    Usury.    Notwithstanding anything to the contrary set forth herein or
in any of the other Loan Documents, the Note, this Loan Agreement, the
Mortgages, and the other Loan Documents are subject to the express condition
that at no time shall Borrower be obligated or required to pay interest
(including at the Default Rate) on the Obligations at a rate which could
subject any Lender 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 for or to agree to pay.
If by the terms of the Note, this Loan Agreement, the Mortgages or any other
Loan Document, Borrower is at any time required or obligated to pay interest at
a rate in excess of such maximum rate, the rate of interest shall be deemed to
be immediately reduced to such maximum rate and the interest payments in excess
of such maximum rate shall be applied and shall be deemed to have been payments
in reduction of principal.

 

42

 

SECTION 2.14.    Closing.  The Closing shall be held at the offices of
Kaye Scholer LLP or such other place as Agent may designate in New York City
or, at Agent’s election, pursuant to an escrow with the Title Company.

 

SECTION 2.15.    Fees.  Borrower shall
pay to Agent the Upfront Fee and the Exit Fee in accordance with the terms of
this Loan Agreement and the Loan Fee Letter.

 

SECTION 2.16.    Lockbox Account, Cash Flow Collection
Account and Operating Account.

 

(a)           Borrower shall cause all rents payable by
all Lessees under the Leases and all other Operating Revenues (other than
Security Deposits which shall be deposited into the Tenant Security Account and
insurance proceeds (other than business interruption proceeds) and condemnation
awards, which shall be delivered to and held by Agent except to the extent
otherwise permitted pursuant to Sections 8.12, 8.13 and 8.14
hereof) to be transmitted directly into the Lockbox Account.  Without limiting the foregoing, all Operating
Revenues received by Borrower or Manager shall be deposited into the Lockbox
Account within one (1) Business Day of receipt.  So long as no Event of Default has occurred
and is continuing and at any time that a Cash Sweep Condition does not exist,
funds deposited into the Lockbox Account shall be swept by the Lockbox Bank on
a daily basis into the Operating Account.

 

(b)           The Operating Account shall be under the
sole dominion and control of Agent, but so long as no Event of Default or a
Cash Sweep Condition exists or as otherwise permitted pursuant to the Cash
Management Agreement, Borrower and Manager may (and Agent shall not) make
withdrawals from the Operating Account, subject, however, to the
other, terms, conditions, limitations and restrictions set forth in this Loan
Agreement and the other Loan Documents. 
Borrower shall not make and shall not permit any withdrawals from the
Operating Account for any payment or purpose prohibited by this Loan Agreement
and the other Loan Documents.  Borrower
shall pay all taxes due on any interest that accrues on the Operating Account.

 

(c)           The Lockbox Account or the Cash Flow
Collection Account, including all subaccounts thereof, shall be under the sole
dominion and control of Agent, and Borrower shall have no right to make
withdrawals therefrom.  Borrower shall
pay for all expenses of opening and maintaining the Lockbox Account and the
Cash Flow Collection Account, including all subaccounts thereof.  Borrower shall pay all taxes due on any
interest that accrues on the Lockbox Account or the Cash Flow Collection
Account, including all subaccounts thereof. 
The funds on deposit in the Cash Flow Collection Account shall be
disbursed as provided herein and in the Cash Management Agreement.  Following the occurrence and during the
continuation of an Event of Default, Agent shall have the rights and remedies
with respect to the Lockbox Account and the Cash Flow Collection Account
specified in this Loan Agreement or in any other Loan Document.

 

(d)           If held at Agent, sums on deposit in the
Lockbox Account and the Cash Flow Collection Account may be commingled with the
general funds of Agent.  If held at
Depositary, Borrower shall deliver to Agent Account Agreements with respect to
the Lockbox Account and the Cash Flow Collection Account.

 

43

 

(e)           On or after any Assessment Period
Determination Date that a Cash Sweep Condition exists and remains in effect,
Agent may send a notice to the Lockbox Bank directing that funds deposited in
the Lockbox Account be swept on a daily basis into the Cash Flow Collection
Account and allocated to the Cash Flow Payment Subaccount or the Wachovia
Termination Payment Reserve Subaccount if such Cash Sweep Condition is due to a
Wachovia Termination Event and the required Wachovia Termination Payment has
not been deposited on or prior to the date due, and otherwise in accordance
with the Cash Management Agreement. 
Funds shall continue to be swept into the Cash Flow Collection Account
so long as a Cash Sweep Condition exists. 
At such time as a Cash Sweep Condition no longer exists, Agent shall
revoke the Lockbox Notice and direct the financial institution holding the Cash
Flow Collection Account to disburse any sums on deposit in the Cash Flow
Payment Subaccount to the Operating Account (but not sums contained in the
Wachovia Termination Payment Reserve Subaccount which shall be held in
accordance with Section 2.16(f) hereof).

 

(f)            In the event that a Wachovia Lease
Termination Event occurs which results in a Cash Sweep Condition, then, on or
prior to the date of the applicable Wachovia Lease Termination Event
Determination Date, Borrower shall deposit the Wachovia Termination Payment in
the Cash Flow Collection Account and Agent shall direct the financial
institution holding the Cash Flow Collection Account to allocate the Wachovia
Termination Payment to the Wachovia Termination Payment Reserve
Subaccount.  Agent shall direct the
Depositary holding Cash Flow Collection Account to make Disbursements from the
Wachovia Termination Payment Reserve Subaccount to Borrower from time to time
for Approved Leasing Costs in accordance with the procedures established in Sections 3.2
and 3.3 hereof or as set forth in the definition of “Approved Leasing
Costs” set forth in Section 1.1 hereof .  Upon repayment in full of the outstanding
principal amount of the Loan, together with all interest and other indebtedness
due and payable in connection therewith, and all other outstanding Obligations
and sums payable under the Loan Documents, Agent shall direct the Depositary
holding the Cash Flow Collection Account to disburse any funds remaining on
deposit therein, including any funds then remaining in the Wachovia Termination
Payment Reserve Subaccount to Borrower.

 

(g)           Following the occurrence and during the
continuation of an Event of Default, (i) Borrower and Manager shall have
no right to, and Borrower covenants that it shall not and shall not permit
Manager, to withdraw any amounts from the Operating Account, except as may be
approved by Agent, (ii) Agent may direct that all sums on deposit in the
Operating Account be transferred to the Cash Flow Collection Account and (iii) Agent
shall have the rights and remedies with respect to the Operating Account
specified in this Loan Agreement or in any other Loan Document.  If held at Agent, sums on deposit in the
Operating Account may be commingled with the general funds of Agent.

 

SECTION 2.17.    Releases.

 

(a)           Generally.             Borrower may obtain a release (a “Release”) of
the Lien of a Mortgage and Agent’s and Lenders’ other Liens (or at Borrowers’
sole cost and expense, an assignment of such Mortgage by Agent, without
recourse, representation or warranty) with respect to any Property upon at
least twenty (20) days’ prior written notice to Agent (which notice shall
specify the Property or Properties being released and the amount of the Release
Price or Release Prices, as applicable, being prepaid and subject to Borrower’s
payment of any

 

44

 

Additional Interest and Agent’s reasonable out-of-pocket costs arising
as a result of the revocation of such notice, may be revoked or extended at any
time up on or prior to the date specified in such notice) subject to all of the
following conditions:

 

(i)            no First Tier Default or Event of Default
shall have occurred and be continuing as of the date of a Release (the “Release
Date”) or shall arise as a result of such Release unless, after giving
effect to such Release, no First Tier Default or Event of Default shall exist;

 

(ii)           Borrower shall make a prepayment of the
Loan pursuant to Section 2.4(b) hereof in an amount equal to the
Release Payment;

 

(iii)          Borrower
shall have delivered to Agent such documents amending the Loan Documents to
reflect such Release and such other documents, agreements and instruments to
reflect such release as Agent or counsel to Agent shall reasonably request, in
each case in form and substance reasonably satisfactory to Agent;

 

(iv)          Borrower shall no longer hold any
interest in such Property and Borrower shall have made no representations or
warranties, or undertaken any obligations with respect to the transferee of
such Property for which Borrower would be liable after the Release Date except
for customary representations, warranties or undertakings as may be set forth
in an arms-length purchase and sale agreement or customary conveyance documents
for which Borrower has established reserves, if any, reasonably deemed
necessary by Borrower;

 

(v)           In the event that an Interest Rate
Protection Agreement, other than an interest rate cap with respect to which
Borrower has no further payment obligations, shall be in effect on the Release
Date as to any Loan Portion(s) being repaid from the proceeds of any
Release Payment, Borrower shall have terminated the Interest Rate Protection
Agreement to the extent of the excess of the notional amount thereof over the
principal amount of the Loan Portions, after giving effect to such prepayment
as contemplated in Section 2.4(f) hereof;

 

(vi)          Borrower shall have paid Agent any Exit
Fee or Spread Maintenance Payment, if any, and any other amounts due and
payable pursuant to this Loan Agreement and any out-of-pocket expenses incurred
by Agent in connection with such Release;

 

(vii)         Borrower
shall have delivered to Agent a certificate in form of Schedule 2.17(B)
attached hereto, signed by Borrower certifying that the conditions set forth in
this Section 2.17(a) and in the case of a Release of one Glen Allen
Property (but not both Glen Allen Properties at once), Section 2.17(b)
hereof with respect to such Release shall have been satisfied; and

 

(viii)        In
the case of a Release of either of the Glen Allen Properties, satisfaction of
the conditions set forth in Section 2.17(b) hereof.

 

(b)           Release of Glen Allen Properties.   In addition to the conditions set forth in Section 2.17(a) hereof,
the first Release of either Glen Allen Property (but not both Glen Allen
Properties at once) shall be subject to the following conditions:

 

45

 

(i)            Borrower shall have delivered to Agent evidence
acceptable to Agent that such subdivision shall result in the Glen Allen
Properties being subdivided into two (2) separate, legally subdivided
parcels of land and separate tax lots;

 

(ii)           Borrower shall have delivered to Agent evidence
reasonably acceptable to Agent such subdivision shall have been consummated in
compliance with the Property Documents, Permitted Encumbrances and all Legal
Requirements and the remaining Glen Allen Property may be used, operated,
occupied and transferred without any impairments arising by reason of such
subdivision;

 

(iii)          Agent shall have received an endorsement to the Title
Policy affecting the remaining Glen Allen Property reflecting such subdivision
and such other matters as Agent reasonably shall require;

 

(iv)          Borrower shall have delivered to Agent an opinion of
counsel reasonably acceptable to Agent containing such updates to the opinions
delivered on the Closing Date and confirming such zoning and land use matters
in connection with such subdivision as may be requested by Agent; and

 

(v)           Borrower shall have delivered to Agent such other
documents, agreements and instruments to reflect such release as Agent or
counsel to Agent shall reasonably request, in each case in form and substance
reasonably satisfactory to Agent.

 

SECTION 2.18.    Tenant Security Account and Security
Letters of Credit.

 

(a)           Borrower shall comply in all material
respects with all Legal Requirements and the applicable Lease applicable to any
security given under any Lease.  Subject
to the foregoing, after the date hereof, upon receipt of any Security Deposit
when aggregated with all other Security Deposits not then on deposit in the
Tenant Security Account is equal to or greater than $250,000 by Borrower,
Borrower shall promptly notify Agent, and at Agent’s election, Borrower shall
deposit or cause to be deposited such Security Deposit into an account with
Agent or, at Agent’s election, a Depositary (the “Tenant Security Account”)
within two (2) Business Days after receipt.  Borrower hereby grants to Agent for the
benefit of Lenders a security interest in all rights of Borrower in and to the
Tenant Security Account and all sums on deposit therein as additional security
for the Obligations.

 

(b)           Borrower shall not withdraw any sums from
the Tenant Security Account or apply any Security Deposits if an Event of
Default has occurred and is continuing. 
Borrower may make withdrawals from the Tenant Security Account at such
time as no Event of Default has occurred and is continuing provided the
proceeds are (i) applied in the ordinary course of Borrower’s business to
sums due under the applicable Lease when the terms of such Lease or applicable
Legal Requirements permit the application thereof or (ii) returned to the
applicable Lessee pursuant to Legal Requirements or the terms of the applicable
Lease which require Borrower to return such other Security Deposit.  After the occurrence and during the
continuation of an Event of Default, neither Borrower nor any other Person
shall have any right to, and Borrower covenants that it shall not, withdraw any
amounts from the Tenant Security Account or apply any Security Deposits, except
as may be approved by Agent.  In the
event an

 

46

 

Event of Default exists but Borrower is required pursuant to the terms
of the applicable Lease or applicable Legal Requirements to return any Security
Deposit to the applicable Lessee, Borrower shall deliver a notice to Agent
certifying same and stating the reason therefor.  Agent shall, at Agent’s option and at
Borrower’s sole cost and expense, either permit Borrower to return the Security
Deposit to the applicable Lessee or, if Agent elects, cause such Security
Deposit to be returned directly to the applicable Lessee.  Following the occurrence and during the
continuation of an Event of Default, Agent shall have the rights and remedies
with respect to the Tenant Security Account specified in this Loan Agreement or
in any other Loan Document, subject to applicable Legal Requirements and the
rights of the Lessees under the Leases.

 

(c)           Borrower shall pay for all expenses of
opening and maintaining the Tenant Security Account.  If held at Agent, sums on deposit in the
Tenant Security Account may be commingled with the general funds of Agent.  If held at Depositary, Borrower shall deliver
to Agent an Account Agreement with respect to the Tenant Security Account prior
to depositing any Security Deposit therein. 
Neither Agent nor Lenders shall be liable for any loss of interest on or
any penalty or charge assessed against the funds in, payable on, or credited to
the Tenant Security Account as a result of the exercise by Agent of any of its
rights, remedies or obligations hereunder or under any other Loan Document.

 

(d)           Borrower shall at the request of Agent
transfer to the name of Agent and deliver to Agent all original Lease Letters
of Credit obtained by Borrower promptly after receipt of same, together with
evidence that all fees payable to the issuer on account of such assignment and
transfer have been paid.  All Lease
Letters of Credit shall be transferable by their terms.  Borrower hereby grants to Agent and Lenders a
security interest in all rights of Borrower in and to all Lease Letters of
Credit, including all proceeds thereof, as additional security for the
Obligations.  In addition to all other
rights and remedies of Agent and Lenders, Agent may, and to the extent
necessary in order to do so, Borrower hereby grants to Agent an irrevocable
power of attorney, coupled with an interest, and Agent shall be entitled to act
pursuant to such power following an Event of Default that shall have occurred
and be continuing by reason of a failure to comply with the terms of this Section 2.18(d),
solely to draw upon or otherwise realize on each such Lease Letters of Credit
in accordance with its terms and those of the applicable Lease and applicable
legal requirements.

 

(e)           If (i) Borrower is entitled to make
a drawing on any Lease Letter of Credit which has been transferred to Agent pursuant
to Section 2.18(d) hereof under the terms of any Lease, Lease
Letter of Credit or applicable Legal Requirements and (ii) no Event of
Default shall have occurred and be continuing, Agent shall, at Borrower’s sole
cost and expense, re-transfer such Lease Letter of Credit to Borrower in trust
for the benefit of Agent and subject to Agent’s security interest, provided
that Borrower delivers to Agent a written request certifying compliance with
the conditions set forth in the foregoing clauses (i) and (ii),
and indicating the applicable Lease and Letter of Credit, the amount of the
draw and the reasons for such draw. 
Borrower shall hold any such Lease Letter of Credit solely for the
purpose of drawing or realizing thereon in accordance with the provisions of
the applicable Lease or Lease Letter of Credit and Legal Requirements and shall
apply the proceeds thereof in the ordinary course of Borrower’s business to
sums due under the applicable Lease in conformance with the requirements of the
terms thereof and applicable Legal Requirements.  If such draw is to be made because the issuer
has elected to cancel or not renew any Lease Letter of Credit, a copy of 

 

47

 

such notice of election to cancel or not renew shall also be delivered
to Agent together with Borrower’s request. 
If any proceeds of such Lease Letter of Credit are paid to Agent instead
of Borrower, Agent shall transfer same to Borrower provided no Event of Default
shall have occurred and be continuing for application as provided in this Section 2.18.  The original of any Lease Letters of Credit
(to the extent not fully drawn) shall be promptly re-assigned, transferred and
re-delivered to Agent.  Borrower shall
promptly remit the proceeds of any such drawing to Agent and Agent shall apply
the same in reduction of the Obligations in such order as Agent shall elect,
unless the drawing is being made to liquidate any Lease Letter of Credit
because the issuer thereof has elected to cancel or not to renew same or for
any other reason not arising from a default by the Lessee, in which case
Borrower shall deposit such proceeds in the Tenant Security Account.  If Borrower is required by the terms of the
applicable Leases or applicable Legal Requirements to return any Lease Letter
of Credit to the Lessee, Agent shall, at Borrower’s sole cost and expense,
re-assign and transfer and deliver possession of such original Lease Letter of
Credit to Borrower provided Borrower delivers to Agent a written request for
same, certifying the foregoing and indicating the applicable Lease and Letter
of Credit and the reasons for such return. 
Borrower shall promptly return the same to the applicable Lessee.  At Agent’s election and at Borrower’s sole
cost and expense, instead of delivering such Lease Letter of Credit to
Borrower, Agent shall return same to the applicable Lessee.  If a Lease permits a Lessee to re-post a new
Lease Letter of Credit, or to amend an existing Lease Letter of Credit, Agent
will permit same and cooperate with Borrower to effect same, at Borrower’s sole
cost and expense.

 

SECTION 2.19.    [Intentionally Deleted].

 

SECTION 2.20.    Accounts. 
Borrower hereby grants to Agent and Lenders a security interest in all
rights of Borrower in and to the Accounts (including all subaccounts thereof)
and all sums on deposit therein as additional security for the
Obligations.  Borrower shall cause all
banks or financial institutions other than Agent which are holding any Account
to execute and deliver to Agent an Account Agreement with respect to such
Account.  Subject to the rights of
Borrower expressly set forth herein to make withdrawals from, and otherwise
give instructions with respect to, the Accounts, Borrower hereby acknowledges
and agrees that Agent shall have sole dominion and control of the
Accounts.  Borrower shall not close any
Account without obtaining the prior consent of Agent.  Borrower shall not open any Account other
than the Accounts open as of the Closing Date (whether in substitution of
another Account or otherwise) (a) without delivering to Agent at least ten
(10) Business Days prior notice of Borrower’s intention to open a new
Account and (b) unless, (i) the bank or other financial institution
at which such Account is to be opened is reasonably acceptable to Agent and (ii) prior
to the opening of such Account, Borrower shall have delivered to Agent an
Account Agreement with respect to such Account. 
Borrower shall maintain the Accounts and shall pay all fees and charges
with respect thereto when due, and shall keep in full force and effect the
Account Agreement with respect thereto. 
So long as no Event of Default has occurred and is continuing, with the
exception of interest allocated to the “Tax and Insurance Premium Reserve
Sub-Account” (as defined such term is defined in the Cash Management Agreement)
all interest earned on amounts deposited in any Accounts (other than the
Operating Account) shall be allocated to the Operating Account on a monthly
basis.  No funds in any Account may be
commingled with any other funds of Borrower, Manager, any Affiliate of Borrower
or Manager or with any other Person or with any funds contained in any other
Account.  All sums held in the

 

48

 

Accounts shall constitute additional security for the
Obligations.  At any time following the
occurrence and during the continuance of an Event of Default, Agent may apply
any funds on deposit in the Accounts as set forth in Section 9.6
hereof subject to the rights of Lessees in and to any Security Deposits and
otherwise have the rights and remedies with respect to the Accounts set forth
in the Loan Documents, at law or equity. 
Neither Agent nor Lenders shall be liable for any loss of interest on or
any penalty or charge assessed against the funds in, payable on, or credited to
any Account as a result of the exercise by Agent of any of its rights, remedies
or obligations under any Loan Document, at law or equity.

 

ARTICLE III

 

DISBURSEMENTS FROM SUBACCOUNTS AND RESERVES

 

SECTION 3.1.      Disbursements Generally; Timing. 
With respect to Disbursements for Approved Leasing Costs allocated from
the Wachovia Termination Payment Reserve Subaccount, a Request for Disbursement
shall be submitted to Agent by Borrower at least ten (10) Business Days
prior to the date proposed for such Disbursement in the Request for
Disbursement.

 

SECTION 3.2.      General Conditions Precedent to
Disbursements.  To the extent funds are available from
the Wachovia Termination Payment Reserve Subaccount, Agent shall make disbursements
(“Disbursements”) from time to time (but not more often than once per
calendar month) after the Closing Date, provided the following
conditions precedent are satisfied with respect to each Disbursement:

 

(a)           The representations and warranties made
by Borrower in this Loan Agreement and in the other Loan Documents shall be
true and correct in all material respects on and as of the date of the making
of such Disbursement with the same force and effect as if made on and as of
such date (except for the representations and warranties made by Borrower
pursuant to Sections 6.36 and 6.38 hereof, which must be true and
complete in all respects on and as of the date of the requested Disbursement)
with the same effect as if made on such date except for any representations or
warranties made by Borrower herein (except for the representations and
warranties made by Borrower under Sections 6.36 and 6.38 hereof,
which must be true and complete in all respects on and as of the date of the
requested Disbursement) or by Borrower and/or Guarantor in the other Loan
Documents which are no longer true and correct in all material respects solely
as a result of the occurrence of an event after the date on which such
representations and warranties were then most recently made, which event (i) does
not constitute, or arise out of, a Default or Event of Default and (ii) does
not result in a Material Adverse Effect and as pertaining to the Properties, as
to all of Properties, considered in their entirety, and which such representations
and warranties shall be updated to reflect the changes since the date on which
such representations and warranties were then most recently made, and remade as
so updated as of the date of the requested Disbursement.

 

(b)           All fees and expenses payable to Agent,
including the fees and expenses referred to in Section 8.15, to the
extent then due and payable in accordance with the terms hereof, shall have
been (or contemporaneously are being) paid in full.

 

49

 

SECTION 3.3.                                          Disbursements
for Approved Leasing Costs.  With
respect to Disbursements for Approved Leasing Costs, Agent shall make
Disbursements, within ten (10) Business Days after Borrower’s request
therefor, provided the following conditions precedent in addition to the
requirements set forth in Section 3.2 hereof are satisfied with
respect to such Disbursement:

 

(a)           Both
immediately prior to the making of such Disbursement and also after giving
effect thereto, no First Tier Default or Event of Default shall have occurred
and be continuing;

 

(b)           To
the extent that the aggregate Approved Leasing Costs exceed the Project Cost
Threshold and are incurred in connection with Capital Expenditures for any
Tenant Improvements, Borrower shall have delivered to Agent at least twenty
(20) days prior to the date the Disbursement is to be made, all plans and
specifications, construction budgets and schedules, engineering and other
professionals’ reports, any general construction agreement, the architect’s
and/or engineer’s agreement(s) and all other material agreements relating
to the Approved Leasing Cost that are the subject of such Disbursement as Agent
shall have requested and Agent shall have approved (which approval shall not be
unreasonably withheld) or declined to exercise its rights to approve, as
applicable,  the materials so requested;

 

(c)           Agent
shall have received invoices identifying the Approved Leasing Costs to which
the Disbursement relates;

 

(d)           With
respect to Approved Leasing Costs which exceed the Project Cost Threshold and
are incurred in connection with Capital Expenditures for any Tenant
Improvements, Borrower shall have delivered to Agent at least twenty (20) days
prior to the date the Disbursement is to be made (i) a copy of the Project
Budget for such Qualified Lease, which shall be subject to Agent’s approval
(which shall not be unreasonably withheld) showing (x) the amount of
Approved Leasing Costs incurred through and including the requested
Disbursement and the corresponding line items relating thereto, (y) the
remaining budgeted Approved Leasing Costs and the corresponding line items
relating thereto, and (z) evidence that Borrower has the necessary funds
on hand to complete the Tenant Improvements and to pay any other Tenant
Improvement Allowances in excess of any Approved Leasing Costs to be funded by
Agent from the Wachovia Termination Payment Reserve Subaccount and (ii) such
other documents relating to such Disbursement as Agent may reasonably request
at least ten (10) Business Days before the date the Disbursement is to be
made;

 

(e)           [Intentionally
deleted];

 

(f)            Such
Disbursement will be used solely to pay Approved Leasing Costs for Qualified
Leases;

 

(g)           Agent
shall have received satisfactory evidence that all permits, licenses and approvals
required for the subject work have been obtained and are in full force and
effect, and Agent shall have received copies of any such permits, licenses
and/or approvals as Agent shall request;

 

50

 

(h)           To
the extent that the aggregate Approved Leasing Costs exceeds the Project Cost
Threshold and are incurred in connection with Capital Expenditures for Tenant
Improvements, Borrower shall have delivered to Agent at least twenty (20) days
prior to the date the Disbursement is to be made such affidavits and
certificates as to such matters as Agent may reasonably request, that (i) all
of the work completed has been done in compliance with the approved plans and
specifications and applicable Legal Requirements, (ii) the Disbursement is
required to reimburse payments of Approved Leasing Costs to contractors,
subcontractors, materialmen, laborers, engineers, architects or other persons
rendering services or materials or paying for such work, and (iii) the
balance of such Reserve after such Disbursement together with funds being
advanced by Borrower will be sufficient on completion of such construction to
pay for the unpaid hard and soft costs required to complete the work (as
estimated by the certifying party);

 

(i)            With
respect to Capital Expenditures for Approved Leasing Costs which exceed the
Project Cost Threshold, at Agent’s option, Agent or its consultant shall have
inspected the work in accordance with and subject to Section 8.3
hereof and approved the same which consent shall not be unreasonably withheld;

 

(j)            With
respect to Capital Expenditures for any Tenant Improvements, Agent shall have
received contractors’ waivers or releases of Lien for work completed (which may
be conditioned on payment therefor), in form and substance reasonably
satisfactory to it; and

 

(k)           When
the work has been completed, Agent shall have received a copy of any
certificate or certificates required by law to render occupancy of the Tenant
Improvements legal together with an architect’s certificate certifying that the
Tenant Improvements were completed substantially in accordance with the plans
and specifications approved by Agent.

 

SECTION 3.4.              [Intentionally
Deleted]

 

SECTION 3.5.              Optional Disbursements.

 

(a)           Waiver of Conditions.  If any or all conditions precedent to making a
Disbursement have not been satisfied on the date such Disbursement was
requested to be made, Agent may, at its option (i) waive so many of such
conditions precedent as it may elect, and/or (ii) disburse only that
portion of the requested Disbursement for which all of the conditions precedent
have been satisfied.  To the extent Agent
makes a Disbursement for which any of the conditions precedent have not been
satisfied, the making of such Disbursement shall constitute a waiver of such
unsatisfied conditions for such Disbursement (but not for any other
Disbursement), unless otherwise set forth in a written notice from Agent to
Borrower.

 

(b)           Disbursements to Third Parties.  During the existence of an Event of Default,
Agent shall have the right (but no obligation) to make any or all Disbursements
directly to contractors or any other Person to whom payment is due with respect
to such Approved Leasing Costs.  The
execution of this Agreement by Borrower shall, and hereby does, constitute an
irrevocable direction and authorization to so disburse such Disbursements.  Following an Event of Default and during its
continuance, no further direction or authorization from Borrower shall be
necessary or required for such direct disbursements and all such disbursements
shall 

 

51

 

satisfy pro tanto
the obligations of Agent hereunder and shall be secured by the applicable Loan
Documents as fully as if made directly to Borrower, regardless of the
disposition thereof by the payee.

 

SECTION 3.6.                                          Use
of Disbursements.  Disbursements
shall be received, held and used by Borrower to pay for Approved Leasing Costs.

 

ARTICLE IV

 

CONDITIONS PRECEDENT TO
THE

EFFECTIVENESS OF THIS LOAN AGREEMENT

 

This Loan Agreement shall not be effective until the
following conditions shall have been satisfied, except to the extent that Agent
may elect (which election may be made without written or express notice of such
waiver) to waive any such conditions:

 

SECTION 4.1.                                          Representations
and Warranties.  The representations
and warranties made by Borrower and Guarantor in the Loan Documents and in any certificate, document, or financial or
other statement furnished by Borrower or Guarantor pursuant to or in connection
therewith, shall be true and correct on and as of the Closing Date.

 

SECTION 4.2.                                          Closing
Documents, Etc.  Agent shall have
received fully executed and, where appropriate, acknowledged counterparts of
this Loan Agreement, the Note and each of the other Loan Documents, including,
without limitation, the Recourse Liability Agreement, the Interest Rate
Protection Guaranty and the Environmental Indemnity, each of which shall be
dated as of the Closing Date, unless otherwise expressly stated (all of which shall
be in such form, substance and content satisfactory to Agent and Borrower).

 

SECTION 4.3.                                          Receipt
of Items and Documents by Agent. 
Agent shall have received and approved the following items and
documents, duly executed and in recordable form where applicable, in each case
in form and substance satisfactory to Agent and Lenders:

 

(a)          copies
of all Leases and the Rent Rolls (certified as true and correct by Borrower)
and Agent shall have received estoppels from Wachovia with respect to Wachovia
Leases; and

 

(b)         paid
Title Policies (or a commitment to issue such Title Policies), in the amount of
the Loan (or allocated portions thereof as Agent may agree), insuring Agent
that each Mortgage is a valid first lien on the applicable Mortgaged Property,
containing no exceptions to coverage other than Permitted Encumbrances and
which Title Policies shall contain:

 

(i)                                     no
exception for mechanics’ or materialmen’s liens;

 

(ii)                                  no
survey exceptions other than those approved by Agent;

 

(iii)                               such affirmative insurance
and endorsements as Agent shall reasonably require;

 

52

 

(c)          original
ALTA surveys of each Property (each a “Survey”, collectively, the “Surveys”)
prepared by licensed surveyors acceptable to Agent each in form and content
acceptable to Agent; provided, however, except as set forth
below, Borrower may satisfy the foregoing survey requirements with respect to a
Property if (x) Borrower provides an existing Survey which is dated on or
after January 1, 2004 and an affidavit from the existing owner of the
applicable Property to the Title Company as to any changes which otherwise
would be reflected on an updated survey, and (y) the Title Company issues
the related Title Policy without the generic exceptions with respect to such
Survey and with corresponding affirmative coverage with respect thereto.  Borrower will be required to provide updated
Surveys with respect to the Properties located at 3579-3583 Atlanta, Atlanta
Georgia, 1100 Corporate Center, Raleigh, North Carolina, 809 West
4 1⁄2 Street, Winston Salem, North Carolina, 21 South Street,
Morristown, New Jersey, 101 Independence St., Philadelphia, Pa.,
16 Broad St., Charleston, South Carolina and 7711 Plantation Rd.,
Roanoke, Virginia;

 

(d)   UCC,
judgment, bankruptcy and other searches with respect to Borrower, Guarantor and
such other Persons as Agent shall specify;

 

(e)   unless
such information is indicated on the applicable Surveys, a certificate from a
licensed surveyor or an insurance broker that no Property located in a flood
hazard plain as indicated on the maps of the Federal Emergency Management
Agency;

 

(f)    the
Wachovia Estoppels;

 

(g)   the
Environmental Reports (and, if such reports are not addressed to Agent, a
reliance letter for same addressed to Agent), or such other environmental
reports or assessments as are reasonably satisfactory to Agent;

 

(h)   the
Property Condition Reports (and, if such reports are not addressed to Agent, a
reliance letter for same addressed to Agent);

 

(i)    the
tax identification number, organizational identification number, and social
security number (as applicable) for each of Borrower, Borrower LP, Borrower GP
and Guarantor;

 

(j)    copies
of organizational and authorizing documents of Borrower, Borrower GP and
Guarantor; and evidence of the good standing of all such entities in all
relevant jurisdictions;

 

(k)   opinion(s) of
counsel for Borrower, Borrower LP, Borrower GP and Guarantor, including,
without limitation, an enforceability opinion and a bankruptcy
non-consolidation opinion to the extent required by Agent, each in form and
substance reasonably satisfactory to Agent and Agent’s Counsel;

 

(l)    copies
of all licenses, easements, plats, permits or other agreements or instruments
pertaining to the Properties and all other documents listed as exceptions to
title in the Title Policies;

 

53

 

(m)       the
Insurance Policies and certified copies, certificates of insurance or other
evidence of the Insurance Policies are satisfactory to Agent, together with
evidence that:

 

(i)                                     all
such Insurance Policies then have an unexpired term reasonably acceptable to
Agent;

 

(ii)                                  the
premiums then due have been paid in full; and

 

(iii)                               such Insurance Policies
are in full force and effect;

 

(n)         a
letter or report of Agent’s insurance consultant concerning Borrower’s
compliance with the requirements of this Loan Agreement as to the Insurance
Policies and such other matters pertaining to insurance as Agent may reasonably
request;

 

(o)         evidence
satisfactory to Agent that all real estate taxes on, assessments of, and
payments in lieu of taxes with respect to, the Properties which are due and
payable and, if delinquent, all penalties and interest thereon have been paid;

 

(p)         evidence
satisfactory to Agent that the Properties comply with all Legal Requirements
(including those related to zoning and land use), and that, to the extent
required by Legal Requirements to be in effect, all Operating Permits that are
in full force and effect;

 

(q)         an
Appraisal with respect to each Property;

 

(r)            payment
of Agent’s Counsel Fees, the reasonable fees of Agent’s insurance,
environmental and engineering consultants and all other reasonable
out-of-pocket expenses of Agent relating to the Loan to the extent the
foregoing are then due and payable, which amounts may be disbursed by Agent
from the Loan at the Closing;

 

(s)          a
property condition report with respect to each Property;

 

(t)            a
duly executed assignment of mortgage and originals of any notes and mortgages
Agent is taking by assignment;

 

(u)         a
notice to Wachovia that Lenders are the Designated Portfolio Lender (as such
term is defined in the Wachovia Master Agreement); and

 

(v)         such
other documents, instruments, opinions and approvals as Agent or Agent’s
Counsel shall reasonably request.

 

SECTION 4.4.                  Payment of Fees
and Expenses.  Payment of all fees
and expenses required to be paid pursuant to the Loan Fee Letter, this Loan
Agreement or the other Loan Documents, including Section 8.15
hereof.

 

SECTION 4.5.                  No Default or
Event of Default.  No Default or Event of Default shall have
occurred and be continuing.  Without
limiting the foregoing, Borrower shall

 

54

 

not be in default under the Wachovia Master Agreement
or any Wachovia Lease which has had or would reasonably be expected to have a
Material Adverse Effect.

 

SECTION 4.6.                  No Casualty or
Taking.  No Casualty shall have
occurred to any portion of any Property which has had or would reasonably be
expected to have a Material Adverse Effect. 
Except as set forth in the Disclosure Schedule, no Taking of any portion
of any Property or any modification, realignment or relocation of any streets
or roadways abutting any Property or denial of access to any Property, from any
point of access (public or private), shall have occurred, be pending or to
Borrower’s Knowledge, threatened, which has had or would reasonably be expected
to have a Material Adverse Effect.

 

SECTION 4.7.                  Financial
Statements.  Borrower shall have
delivered to Agent such balance sheets and other financial statements of
Borrower as Agent may request.

 

SECTION 4.8.                  Loan-to-Value Ratio.  The Loan-to-Value Ratio based on
the Appraisals shall be no greater than eighty percent (80%) of the stabilized
value of the Properties with respect to the entire Loan Amount.

 

SECTION 4.9.                  Compliance with
Other Conditions.  Borrower shall
have delivered to Agent evidence that Borrower and Guarantor have complied
fully with all other conditions to funding set forth in the Term Sheet.

 

SECTION 4.10.           [Intentionally Deleted]

 

SECTION 4.11.           Adverse Conditions;
Internal Approval.  Agent shall be satisfied that (i) there
is no material adverse condition relating to, and there has been no material
adverse change in or affecting, the business, operations, property, condition
(financial or otherwise) or prospects of Borrower, any Borrower Partner or
Guarantor, (b) there exists no information or other matter affecting the
Borrower, any Borrower Partner or Guarantor which is inconsistent in a material
and adverse manner with any such information or other matter disclosed to Agent
prior to the Closing Date, (c) there has been no material disruption or
material adverse change in financial, banking or capital market conditions that
could materially impair the sale or syndication of the Loan and (d) there
has been no outbreak or escalation of hostilities involving the United States
or the declaration by the United States of a national emergency or war, and
shall have received all internal underwriting approvals to make the Loan and
otherwise pertaining to Borrower and all other relevant parties.

 

ARTICLE V

 

INTENTIONALLY DELETED

 

ARTICLE VI

 

REPRESENTATIONS AND
WARRANTIES

 

To induce Lenders to make the Loan and to induce
Lenders and Agent to enter into this Loan Agreement and to perform Lenders’ and
Agent’s obligations hereunder, Borrower hereby represents and warrants to Agent
and Lenders as follows as of the Closing Date (which

 

55

 

representations and
warranties shall survive the execution and delivery of this Loan Agreement and
the other Loan Documents, regardless of any investigation made by Agent or
Lenders or on its or their behalf).

 

SECTION 6.1.                  Due
Organization.  Borrower is a limited
partnership and Borrower GP is a limited liability company, each duly organized
and validly existing under the laws of the state of its formation and Borrower
is duly qualified to do business in each State in which a Property is
located.  Each of Borrower and Borrower
GP has all necessary power and authority to own its properties or interests in
Borrower, as applicable, and to conduct its business as presently conducted or
proposed to be conducted and to enter into and perform its obligations under
this Loan Agreement and the other Loan Documents to which it is a party, and
all other agreements and instruments to be executed by Borrower, Borrower GP or
Borrower LP, in connection herewith and therewith.  Attached
to Borrower’s Certificate is a true and correct organizational chart of
Borrower as of the Closing Date.  Other
than with respect to the shareholders of Guarantor, there are no direct
or indirect owners of any legal or beneficial interest of Borrower that are not
set forth on such organizational chart.

 

SECTION 6.2.                  Due Execution.  This Loan Agreement and the other Loan
Documents to which Borrower is a party have been duly executed and delivered,
and all necessary actions have been taken to authorize Borrower to perform its
obligations hereunder and thereunder.

 

SECTION 6.3.                  Enforceability.  This Loan Agreement and the other Loan
Documents to which each of Borrower and Guarantor is a party constitute legal,
valid and binding obligations of Borrower and Guarantor, respectively,
enforceable against them in accordance with their terms, subject to applicable
bankruptcy, insolvency, or similar laws generally affecting the enforcement of
creditors’ rights.

 

SECTION 6.4.                  No Violation.  The consummation of the transactions herein
contemplated, the execution and delivery of this Loan Agreement, the other Loan
Documents to which Borrower is a party, and all other agreements and
instruments to be executed by Borrower in connection herewith and therewith,
and the performance by Borrower of its obligations hereunder and thereunder, do
not and will not (a) violate any Legal Requirement, (b) result in a
breach of any of the terms, conditions or provisions of, or constitute a
default under any mortgage, deed of trust, indenture, agreement, permit,
franchise, license, note or instrument to which Borrower or any Borrower
Partner is a party or by which it or any of its properties is bound, (c) result
in the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the assets of Borrower or any Borrower Partner (except
as contemplated by this Loan Agreement and by the other Loan Documents), or (d) violate
any provision of the Borrower Partnership Agreement or other organizational
documents of Borrower, Borrower LP or Borrower GP.  Neither Borrower nor any Borrower Partner is
in default with respect to any Legal Requirement relating to its formation or
organization.

 

SECTION 6.5.                  No Litigation.  Except as set forth in the Disclosure
Schedule, there are no actions, suits or proceedings at law or in equity or
before or instituted by any Governmental Authority (a) pending or, to
Borrower’s Knowledge, threatened against or affecting Borrower, any Borrower
Partner, Guarantor, any Property or any other Collateral or 

 

56

 

any part thereof (including any condemnation or
eminent domain proceeding against any Property, or any part thereof), or (b) pending
or, to Borrower’s Knowledge, threatened, which, in either case, affect or might
affect the validity or enforceability of any Security Document (or the priority
of the Lien thereof), or any of the Loan Documents which, if determined
adversely, has had or would reasonably be expected to have a Material Adverse
Effect.

 

SECTION 6.6.                  No Default or
Event of Default.  No Event of Default
or, to Borrower’s Knowledge, Default has occurred and is continuing.

 

SECTION 6.7.                  Offsets,
Defenses, Etc.  Borrower has no
offsets, defenses or counterclaims against its obligations under the Loan
Documents, any and all such offsets, defenses and counterclaims, if any, being
waived by Borrower.

 

SECTION 6.8.                  Consents.  All consents,
approvals, orders or authorizations of, or registrations, declarations or
filings with, or other actions with respect to or by, any Governmental
Authorities or any other Person, whether pursuant to the Leases (including the
Wachovia Leases), Permitted Encumbrances or otherwise, that are required in
connection with the valid execution, delivery and performance by Borrower of
this Loan Agreement, the other Loan Documents and all other agreements and
instruments to be executed by Borrower in connection herewith or therewith have
been obtained and are in full force and effect.

 

SECTION 6.9.                  Guarantor
Representations.  To Borrower’s Knowledge, the representations,
warranties and certifications of Guarantor set forth in the Loan Documents to
which Guarantor is a party are true and correct.

 

SECTION 6.10.           Financial Statements
and Other Information.  To Borrower’s
Knowledge, all statements of financial condition and related schedules of
Borrower, Borrower GP and Guarantor heretofore delivered by Borrower to Agent
are true, correct and complete in all material respects, fairly present the
financial conditions of the subjects thereof as of the respective dates thereof
and have been prepared in accordance with GAAP except as may otherwise be
disclosed.  No material adverse change
has occurred in the financial conditions reflected in the most recent of the
aforesaid statements of financial condition and related schedules since the
respective dates thereof, and without limiting the foregoing, to Borrower’s
Knowledge, the aforesaid statements of financial condition and related
schedules reflect all direct and contingent liabilities of Borrower, each
Borrower Partner and Guarantor as of the Closing Date.  To Borrower’s Knowledge, neither the
aforesaid statements of financial condition and related schedules nor any
certificate, statement, document or information furnished to Agent, Agent’s
Counsel or to any other Person at the request of Agent by or on behalf of
Borrower, each Borrower Partner or Guarantor or any Affiliate of Borrower, each
Borrower Partner or Guarantor in connection with or related to the transactions
contemplated hereby, nor any representation nor warranty in this Loan Agreement
or any other Loan Document, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.

 

SECTION 6.11.           Full Disclosure.  To Borrower’s Knowledge, as of the Closing
Date, there is no material fact pertaining to Borrower, any Borrower Partner,
Guarantor, any Property or any other Collateral that Borrower has not disclosed
to Agent that would reasonably

 

57

 

be expected to have a Material Adverse Effect and as
pertaining to the Properties, as to all of Properties, considered in their
entirety.

 

SECTION 6.12.           Accounts.  All
accounts of Borrower or of any other Person, including Agent, held on behalf of
or for the benefit of Borrower which are required to be established pursuant to
this Loan Agreement or any other Loan Document and which are not held at Agent,
including the account number of each Account and the name and address of the
financial institution at which each Account is held, are as set forth on Schedule 6.12
attached hereto.  Borrower has no other accounts except those
held at Agent and those set forth on said schedule.

 

SECTION 6.13.           Indebtedness.  Borrower is not currently indebted or in
contract for any Indebtedness, and is not otherwise liable in respect of any
Indebtedness, other than Permitted Indebtedness and is not holding out its
credit as being available to satisfy the obligations of any other Person.  Borrower GP is not currently indebted or in
contract for any Indebtedness or is otherwise liable in respect of any
Indebtedness, other than the Permitted Indebtedness and unsecured trade
payables in the ordinary course of Borrower’s business relating to acting as
the general partner of Borrower which are paid within thirty (30) days of the
date incurred, and no Borrower Partner holding out its credit as being
available to satisfy the obligations of any other Person, other than Borrower.

 

SECTION 6.14.           Insurance Policies.  The Insurance Policies required to be
maintained pursuant to this Loan Agreement are in full force and effect.

 

SECTION 6.15.           Availability of
Utilities and Access.  All utility
services and facilities necessary for the current operation, use and occupancy
of the Properties are available at the boundaries of the Properties, including
water supply, storm and sanitary sewer facilities, gas and electric and
telephone facilities.  The Properties
have direct physical access to and from at least one public road except as may
be otherwise shown on the Surveys or Title Policies.

 

SECTION 6.16.           No Liens.  Except for the Loan Documents, Operating
Agreements, Permitted Encumbrances and Disclosure Schedule, Borrower has not
made, assumed or been assigned any contract or arrangement of any kind, the
performance of which by the other party thereto would give rise to a Lien
against all or any portion of the Collateral. 
There exists no Lien on any direct or indirect equity or beneficial
interest in any Borrower (other than Liens created pursuant to the Mezzanine
Loan Documents to secure the Mezzanine Loan in accordance with this Loan
Agreement and the Mezzanine Intercreditor Agreement).

 

SECTION 6.17.           Compliance with Legal
Requirements.  To Borrower’s
Knowledge, except as may be set forth in the Property Condition Reports,
Environmental Reports and the Zoning Reports, the Legal Requirements, including
zoning ordinances and regulations, permit (a) the current operation, use
and occupancy of all of the Properties in accordance with the Permitted Encumbrances,
the Property Documents and the Leases and (b) the Properties to be
restored and such uses to be continued following a Casualty, without need of
any variance, special use permit or similar exception.  To Borrower’s Knowledge, except as may be set
forth in the Property Conditions Reports, all Operating Permits for the
existing use and operation of the Properties, and, to the extent required to
have been obtained on or prior to 

 

58

 

the Closing Date, all Operating Permits for the
ownership and operation of the Properties, have been obtained and are in full
force and effect and all conditions to the continued effectiveness of such
permits have been fully satisfied.  To
Borrower’s Knowledge, there are no pending or threatened actions, suits or
proceedings to revoke, attach, invalidate, rescind or modify the ordinances and
regulations currently in effect and to which any Property are subject or any of
the Operating Permits, as currently existing, and Borrower, except as set forth
in the Property Condition Reports, the Properties and the existing uses thereof
comply in all material respects with all Legal Requirements, including all
applicable zoning ordinances and regulations and building codes.

 

SECTION 6.18.           Certain Agreements.  Borrower has delivered to Agent true, correct
and complete copies of any Permitted Encumbrances, the Asset Management
Agreement, if any, the Property Documents and any Material Operating
Agreements.  No default or failure of performance
in any material respect by Borrower exists under any Asset Management
Agreement, any Material Operating Agreement, any Property Document or Permitted
Encumbrance, and, to Borrower’s Knowledge, each of said documents is in full
force and effect.  To Borrower’s
Knowledge, there are no offsets, claims or defenses to the enforcement by
Borrower of the Asset Management Agreement, if any, the Property Documents, any
Material Operating Agreement or Permitted Encumbrance presently outstanding and
Borrower has not received a notice of default under the Asset Management
Agreement, the Property Documents, any Material Operating Agreement or any
Permitted Encumbrance.  No Material
Operating Agreement, Property Document or Permitted Encumbrance contains any
option to purchase or right of first refusal to purchase any of the Mortgaged
Properties or any part thereof except as expressly set forth in the Wachovia
Leases.  The Asset Management Agreement,
if any, is in full force and effect and is valid and enforceable.  Neither the Property Documents nor the Asset
Management Agreement, if any, has been amended, modified, terminated, assigned
or otherwise changed, or the provisions thereof waived, except as permitted
hereunder.  To Borrower’s Knowledge, no
default exists, and no grounds for termination, by Borrower or any other party
to the Property Documents or the Asset Management Agreement, exist and no event
exists which, with the giving of notice or passage of any cure period, or both,
would constitute a default thereunder the default or violation of which could
be reasonably expected to have a Material Adverse Effect or give rise to any
right of any party thereto to terminate same. 
The Asset Management Agreement, if any, represents the entire agreement
between Borrower and Asset Manager with respect to the management of the
Properties, and there are no other agreements or representations, written or
oral, between Borrower and Asset Manager with respect thereto.  Borrower has obtained all consents necessary
to collaterally assign the Asset Management Agreement, if any, to Agent
pursuant to the Loan Documents.  The
Asset Management Agreement, if any, does not contain any option to purchase or
right of first refusal to purchase the Mortgaged Property or any part thereof.

 

SECTION 6.19.           Security Documents.  The provisions of each Security Document are
effective to create, in favor of Agent for the benefit of itself and Lenders, a
legal, valid and enforceable Lien on or security interest in all of the
collateral described therein, subject to Permitted Encumbrances, and when the
appropriate recordings and filings have been effected in public offices, each
of the Security Documents will constitute a perfected Lien on and security
interest in all right, title, estate and interest in the collateral described
therein, prior and superior to all other Liens, except as permitted under the
Loan Documents.

 

59

 

SECTION 6.20.           Condition of Premises.  Except as disclosed in the Environmental
Reports, Property Condition Reports and Disclosure Schedule or otherwise
disclosed by Borrower to Agent in writing prior to the Closing Date, to
Borrower’s Knowledge, the Properties are in good condition and repair with no
material deferred maintenance and there are no patent or latent structural or
other defects or deficiencies in any Property. 
To Borrower’s Knowledge, no Casualty has occurred with respect to any
portion of any Property which has not been fully restored.  To Borrower’s Knowledge, no Casualty has
occurred to any portion of any Property and no Taking of any portion of the any
Property, or modification, realignment or relocation of any streets or roadways
abutting any Property or denial of access to such Property from any point of
access (public or private), has occurred or is threatened or pending.

 

SECTION 6.21.           Brokerage.  Borrower has not dealt with any brokers or “finders”
in connection with the Loan other than Cushman & Wakefield
Sonnenblick-Goldman, LLC (“Broker”), and no brokerage or “finders” fees
or commissions are payable by or to any Person other than Broker, in connection
with the Loan.  Borrower has paid in full
all fees, commissions and any and all other compensation due to Broker in
connection with the transaction on or prior to the Closing Date.

 

SECTION 6.22.           Encroachments.  Other than as disclosed on the Surveys, no
Property encroaches upon any building line, setback line, side yard line, any
Permitted Encumbrance or any other recorded easement or any visible easement or
other easement of which Borrower has knowledge, except immaterial encroachments
which are permitted pursuant to the Permitted Encumbrances currently in effect
or shown as exceptions to the Title Policy.

 

SECTION 6.23.           Foreign Person.  Borrower is not a “foreign person” within the
meaning of Section 1445 or 7701 of the IRC.

 

SECTION 6.24.           Control Person.  Borrower is not, and no Person having “control”
(as that term is defined in 12 U.S.C. § 375b or in regulations promulgated
pursuant thereto) of Borrower is, an “executive officer,” “director,” or “person
who directly or indirectly or in concert with one or more persons, owns,
controls, or has the power to vote more than ten percent (10%) of any class of
voting securities” (as those terms are defined in 12 U.S.C. § 375b or in
regulations promulgated pursuant thereto) of any Lender, of a bank holding
company of which any Lender is a subsidiary, or of any other subsidiary of a
bank holding company of which any Lender is a subsidiary.

 

SECTION 6.25.           Margin Stock.  None
of the proceeds of the Loan will be used for the purpose of purchasing or
carrying “margin stock” within the meaning of Regulation T, U or X issued
by the Board of Governors of the Federal Reserve System, as at any time
amended, and Borrower agrees to execute all instruments necessary to comply
with all the requirements of Regulation U of the Federal Reserve System,
as at any time amended.

 

SECTION 6.26.           Government Regulation.  Borrower is not an “investment company” or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940.  Borrower
is not engaged principally, or as one of its important activities, in the
business of extending, or arranging for the extension of, credit for the
purpose of “purchasing or carrying any margin stock,” within the meaning of
Regulation U of 

 

60

 

the Board of Governors.  No portion of the assets of Borrower consists
of any such margin stock, and no part of the proceeds of the Loan shall be used
to purchase or carry any such margin stock within the meaning of said
regulation or to extend credit to others for such purpose.

 

SECTION 6.27.           ERISA.  None of the assets of Borrower constitute or will constitute “plan assets” of one or more such plans
within the meaning of 29 C.F.R. § 2510.3-101; and Borrower is
not nor will it be a “governmental plan” within the meaning of § 3(3) of
ERISA.  Borrower has no obligation,
contingent or otherwise, with respect to any Pension Plan, Multiemployer Plan
or other employee benefit plan within the meaning of § 3(3) of
ERISA.  Each employee benefit plan of
Borrower that is intended to qualify under § 401 of the IRC does so
qualify, and any trust created thereunder is exempt from tax under the
provisions of § 401 of the IRC. 
Each Pension Plan is in compliance in all material respects with all
applicable provisions of ERISA, the IRC and other requirements of applicable
law.  There has been no, nor is there
reasonably expected to occur any, ERISA Event. 
No Pension Plan has any unfunded pension liability that has had or would
reasonably be expected to have a Material Adverse Effect and as pertaining to
the Properties, as to all of Properties, considered in their entirety.  Neither Borrower nor any ERISA Affiliate
would have any Withdrawal Liability as a result of a complete withdrawal as of
the Closing Date from any Multiemployer Plan that has had or would reasonably
be expected to have a Material Adverse Effect and as pertaining to the
Properties, as to all of Properties, considered in their entirety.

 

SECTION 6.28.           Labor Relations.  Borrower is not a party to any collective
bargaining agreement.  To Borrower’s
Knowledge, there are no material grievances, disputes or controversies with any
union or any other organization of employees at any Property, including
employees of Borrower, or threats of strikes, work stoppages or any
asserted pending demands for collective bargaining by any union or
organization.

 

SECTION 6.29.           [Intentionally Deleted]

 

SECTION 6.30.           Intellectual Property.  As of the Closing Date, to Borrower’s
Knowledge, the name for any Property used by Borrower in its marketing material
is not a registered trademark.  Borrower
shall notify Agent of any trademark used in connection with any Property.  Agent may make any filing, at Borrower’s sole
cost and expense, with the United States Patent and Trademark Office or
otherwise in order to obtain and perfect a security interest in such
trademarks.  To Borrower’s Knowledge,
there exists no claim by any Person that contests or questions Borrower’s right
to use all applicable patents, trademarks, copyrights, technology, know-how and
processes necessary for the conduct of the business and the operation of any
Property substantially in the manner as contemplated to be conducted and
operated.  To Borrower’s Knowledge, there
are no claims, and to Borrower’s Knowledge, there is no infringement of the
rights of any Person, arising from the use of such patents, trademarks,
copyrights, technology, know-how and processes by Borrower.  To Borrower’s Knowledge, there is no
infringement by any third party on any rights of Borrower in any of its
intellectual property.

 

SECTION 6.31.           Flood Zone.  Other than as disclosed on the Surveys or in
any flood hazard certificate delivered to Agent, neither the Properties nor any
portion thereof is located within an area that has been designated or
identified as an area having special flood 

 

61

 

hazards by the Secretary of Housing and Urban
Development or by such other official as shall from time to time be authorized
by federal or state law to make such designation pursuant to the National Flood
Insurance Act of 1968, as such act may from time to time be amended, or
pursuant to any other national, state, county or city program of flood control.

 

SECTION 6.32.           Taxes.  All tax returns required to be filed by
Borrower in any jurisdiction have been filed and all taxes, assessments, fees,
and other governmental charges upon Borrower or upon any of its properties,
income or franchises have been paid that are required to be paid prior to the
time that the non-payment of such taxes could give rise to a lien on any asset
of Borrower, unless such tax, assessment, fee or charge is being contested in
accordance with Section 8.8 hereof or by any Lessee in accordance
with its Lease.  To Borrower’s Knowledge,
there is no material proposed tax assessment against any Property or any basis
for such assessment which is material and not being contested in good faith by
Borrower through appropriate proceedings after the establishment of appropriate
reserves by Borrower therefor with Agent’s reasonable approval.  Each parcel of Land included in each Property
is separately assessed from all other adjacent land for purposes of real estate
taxes, and for all purposes may be dealt with as an independent parcel.

 

SECTION 6.33.           Adverse Contracts.  Except for the Leases, Wachovia Master
Agreement, Property Agreements, and Loan Documents, to Borrower’s Knowledge,
Borrower is not a party to any contract or agreement, or subject to any charter
or other restriction, which has had or would reasonably be expected to have a
Material Adverse Effect.

 

SECTION 6.34.           Adverse Claims.  To Borrower’s Knowledge, there are no adverse
claims to the title of Borrower in and to the Mortgaged Properties, the other
Collateral, the Properties or any rights appurtenant thereto, other than
Permitted Encumbrances or matters affirmatively insured over by the Title
Company.

 

SECTION 6.35.           Creditworthiness.  Both before and immediately after entering
into each of the Loan Documents to which they are a party, each of Borrower and
each Borrower Partner is able to pay its debts and other obligations when due
and has a positive net worth.

 

SECTION 6.36.           Patriot Act.  None of Borrower, any Borrower Partner,
Guarantor, any shareholder, member or partner of any Borrower Partner nor any
owner of a direct or indirect interest in Borrower or Guarantor (and as to any
shareholders of Guarantor and their direct and indirect owners thereof, to
Borrower’s Knowledge) (a) is listed on any Government Lists (as defined
below), (b) is a Person who has been determined by competent authority to
be subject to the prohibitions contained in Presidential Executive Order No. 13224
(Sept. 23, 2001) or any other similar prohibitions contained in the rules and
regulations of OFAC (as defined below) or in any enabling legislation or other
Presidential Executive Orders in respect thereof, (c) has been previously
indicted for or convicted of any felony involving a crime or crimes of moral
turpitude or for any Patriot Act Offense (as defined below), or (d) is
currently under investigation by any governmental authority for alleged
criminal activity.  For purposes hereof,
the term “Patriot Act Offense” means any violation of the criminal laws
of the United States of America or of any of the several states, or that would
be a criminal violation if committed within the jurisdiction of the United
States of America or any of the several states, relating to terrorism or the
laundering of monetary instruments, including any offense under

 

62

 

(i) the criminal laws against terrorism; (ii) the
criminal laws against money laundering, (iii) the Bank Secrecy Act, as
amended, (iv) the Money Laundering Control Act of 1986, as amended, or (v) the
Patriot Act.  “Patriot Act Offense”
also includes the crimes of conspiracy to commit, or aiding and abetting
another to commit, a Patriot Act Offense. 
For purposes hereof, the term “Government Lists” means (A) the
Specially Designated Nationals and Blocked Persons Lists maintained by the
Office of Foreign Assets Control (“OFAC”), (B) any other list of
terrorists, terrorist organizations or narcotics traffickers maintained
pursuant to any of the Rules and Regulations of OFAC that Agent notified
Borrower in writing is now included in “Government Lists”, or (C) any
similar lists maintained by the United States Department of State, the United
States Department of Commerce or any other government authority or pursuant to
any Executive Order of the President of the United States of America that Agent
notified Borrower in writing is now included in “Government Lists”.

 

SECTION 6.37.           Leases.  Borrower has delivered to Agent a true,
correct and complete rent roll for each Property as more particularly described
in Schedule 6.37 attached hereto (each a “Rent Roll”,
collectively, “Rent Rolls”).  There
has been no material change in the leasing status of the Properties since the
date of the applicable Rent Roll except, as of any date after the Closing Date,
as shown on any updated Rent Roll with respect to such Property delivered to
Agent.  Borrower has delivered to Agent
true, correct and complete copies of all Leases in effect as of the Closing
Date.  Borrower has delivered to Agent a
true, correct and complete copy of each lease brokerage and other leasing commission
agreement in effect as of the Closing. 
Additionally, to Borrower’s Knowledge except as may be set forth in the
Disclosure Schedule or any estoppel certificate delivered to Agent pursuant to Section 4.2
hereof, (a) each Lease is a Qualified Lease and is in full force and
effect; (b) there are no offsets, claims or defenses to the enforcement of
any Lessee’s obligations under the Leases presently outstanding; (c) no
portion of any Rent has been paid for any period more than thirty (30) days in
advance; (d) the Rent payable under each Lease is the amount of Rent set
forth in the applicable Rent Roll, and there is no claim or basis for a claim
by the Lessee thereunder for an adjustment to the Rent thereunder; (e) no
Lessee has made any claim in writing against Borrower or Manager which remains
outstanding that Borrower or Manager is in default under its applicable Lease; (f) no
default has occurred by Borrower or, to Borrower’s Knowledge, any Lessee under
any Lease, and no event which, with the giving of notice or passage of time, or
both, would constitute a default by Borrower or, to Borrower’s Knowledge, any
Lessee, has occurred under any Lease; (g) each Lease is the valid, binding
and enforceable obligation of Borrower and, to Borrower’s Knowledge, the
applicable Lessee thereunder; (h) with
the exception of the Excluded Leases, each Lease is subordinate to the
Mortgage on the Property or portion thereof leased; (i) all Security
Deposits under the Leases are as set forth on the Rent Rolls and are held
pursuant to Section 2.18 hereof; (j) except as set forth in
the Rent Rolls described in Schedule 6.37 hereof attached hereto,
there are no rent abatements or concessions, tenant allowances or other
abatements with respect to any Lease; (k) all real estate brokerage
commissions relating to the Leases have been paid in full and there are no
other real estate brokerage commissions other than as set forth on the Rent
Roll; (l) other than the Wachovia Leases, no Lease contains any option to
purchase or right of first refusal to purchase any Property or any portion
thereof or any part thereof; (m) Borrower (and, if applicable, Asset
Manager) are in compliance with all Legal Requirements with respect to all
Security Deposits; (n) the Rent Rolls set forth the scheduled expiration
date of each Lease; (o) no use restriction contained in any Lease,
Permitted Encumbrance or Property Document is violated by any use permitted
under any other Lease, any

 

63

 

Permitted Encumbrance or any Property Document; (p) no
Wachovia Lease has been assigned or sublet by any Lessee to any Person, except
as permitted in such Wachovia Lease (to the extent that any recognition
agreement was entered into in connection with any sublease or assignment by the
Borrower or its predecessor in interest, a copy of such recognition agreement
has been delivered to Agent); (q) except as reflected in the Rent Rolls or
provided to Agent in accordance with Section 12.12 hereof, Borrower
has not received any Wachovia Termination Notice with respect to any Wachovia
Lease; and (r) to Borrower’s Knowledge, no Lessee has (i) consented
to the appointment of a conservator, receiver, trustee, custodian or liquidator
in any insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to it or of or relating to all, or
substantially all, of its property, or for the winding-up or liquidation of its
affairs, (ii) admitted in writing its inability to pay its debts generally
as they become due, (iii) filed a petition, or otherwise instituted, or
consented to the institution against it of, proceedings to take advantage of
any law relating to bankruptcy, insolvency or reorganization or the relief of
debtors, (iv) made an assignment for the benefit of its creditors or (v) suspended
payment of its obligations.

 

SECTION 6.38.           Special Purpose Entity.  Each of Borrower and Borrower GP is a Special
Purpose Bankruptcy Remote Entity.

 

ARTICLE VII

 

INTENTIONALLY DELETED

 

ARTICLE VIII

 

GENERAL AND OPERATIONAL
COVENANTS

 

SECTION 8.1.                  Financial
Statements, Reports and Documents of Borrower.  Borrower shall deliver to Agent each of the
following:

 

(a)                                  Annual Financial Statements.

 

(i)                                     Within
one hundred and twenty (120) days after the close of each fiscal year of
Borrower, unaudited financial statements of Borrower for such period, which
shall include a detailed balance sheet, statement of operations (income and
expenses), statement of cash flow, statement of changes in members’ or partners’
capital or shareholder’s equity, as applicable, contingent liability schedule
and any other financial information with respect to Borrower as shall
reasonably be required by Agent, in form reasonably acceptable to Agent,
prepared in accordance with GAAP.  Such
financial statements shall be certified by the chief executive, operating or
financial officer of Borrower as being, to such Person’s knowledge, true,
correct and complete in all material respects and fairly presenting the
financial position of Borrower in all material respects.

 

(ii)                                  Within
one hundred and twenty (120) days after the close of each fiscal year of
Guarantor, audited financial statements of Guarantor for such period (which
shall include Borrower on a consolidated basis), which shall include a 

 

64

 

detailed balance
sheet, statement of operations (income and expenses), statement of cash flow,
statement of changes in members’ or partners’ capital or shareholder’s equity,
as applicable, and contingent liability schedule, in form reasonably acceptable
to Agent, prepared in accordance with GAAP consistently applied for all
periods, and audited by and accompanied by an opinion thereon by either (i) a
so-called “Big Four” public accounting firm (or Schonbraun & McCann),
or (ii) an independent certified public accounting firm selected by
Guarantor and reasonably acceptable to Agent, which audit shall be unqualified
as to the scope of audit and state that such financial statements were prepared
in accordance with GAAP, and that the examination of such accounting firm in
connection with such financial statements has been made in accordance with
generally accepted auditing standards. 
Such financial statements shall also be certified by the chief
executive, operating or financial officer of Guarantor as being, to such Person’s
knowledge, true, correct and complete in all material respects and fairly
presenting the financial position of Guarantor in all material respects.

 

(b)                                 Quarterly Financial Statements.

 

(i)                                     Within
forty-five (45) days after the end of each Calendar Quarter, (i) unaudited
financial statements of Borrower for such period, which shall include a
detailed balance sheet, statement of operations (income and expenses) which
shall show actual quarterly and year-to-date Operating Revenues, expenses,
capital expenditures, statement of cash flows, statement of changes in members’
or partners’ capital or shareholders’ equity, as applicable, contingent
liability schedule and any other financial information with respect to Borrower
as shall reasonably be required by Agent, in form reasonably acceptable to
Agent, prepared in accordance with GAAP and certified by the chief executive,
operating or financial officer of Borrower as being true, correct and complete
and fairly presenting the financial position of Borrower, and (ii) a
certificate from the chief executive, operating or financial officer of
Borrower in form reasonably acceptable to Agent setting forth the Net Operating
Income, Gross Revenues and Operating Expenses (including all deductions and
exclusions referred to in the definitions thereof herein) for such Calendar
Quarter on a year-to-date basis, certified by such officer as being, to such
Person’s knowledge, true, correct and complete in all material respects and
fairly presenting the financial position of Borrower in all material respects.

 

(ii)                                  Within
forty-five (45) days after the end of each Calendar Quarter, (i) unaudited
financial statements of Guarantor for such period, which shall include a
detailed balance sheet, statement of operations (income and expenses) which
shall show actual quarterly and year-to-date Operating Revenues, expenses,
capital expenditures, statement of cash flows, statement of changes in members’
or partners’ capital or shareholders’ equity, as applicable, and contingent
liability schedule in form reasonably acceptable to Agent, prepared in
accordance with GAAP and certified by the chief executive, operating or
financial officer of Guarantor as being true, correct and complete and fairly
presenting the financial

 

65

 

position of
Guarantor, and (ii) a certificate from the chief executive, operating or
financial officer of Guarantor in form reasonably acceptable to Agent setting
forth the Net Operating Income, Gross Revenues and Operating Expenses
(including all deductions and exclusions referred to in the definitions thereof
herein) for such Calendar Quarter on a year-to-date basis, certified by such
officer as being, to such Person’s knowledge, true, correct and complete in all
material respects.

 

(c)                                  Quarterly Reports. 
As soon as practical, but in any event no later than
forty-five (45) days after the end of each Calendar Quarter, a rent
roll/occupancy summary for each Property and leasing status report (including,
aging schedules, tenant receivables and tenant defaults, in each case, if any),
in each case for such Calendar Quarter, and in form reasonably acceptable to
Agent.  Such reports shall be certified
by the chief executive, operating or financial officer of Borrower as being, to
such Person’s knowledge, true, correct and complete in all material respects.

 

(d)                                 Compliance Certificates.

 

(i)                                     Within forty-five (45) days after the end of
each Calendar Quarter, a certificate executed by the chief executive, operating
or financial officer of Borrower (in his or her capacity as such), stating that
(i) a review of the activities of Borrower and the Properties during the
period that is the subject of such certificate has been made under his or her
supervision, (ii) to his or her knowledge based upon the foregoing review
and other information of which he or she is aware, Borrower is in compliance
with all financial covenants under the Loan Agreement, and there exists no
Default or Event of Default as of the date of such certificate or, if any such
event shall have occurred, specifying the nature and status thereof and (iii) if
such Calendar Quarter is the last Calendar Quarter of any Assessment Period,
the Debt Service Coverage Ratio for such Assessment Period together with
supporting calculations;

 

(ii)                                  At least five (5) days before
each Wachovia Termination Event Determination Date, a certificate executed by
the chief executive, operating or financial officer of Borrower (in his or her
capacity as such), accompanied by supporting calculations showing Debt Service
Coverage Ratio as of the end of the most recent Assessment Period assuming that
the Property or portion thereof which is the subject of such Wachovia
Termination Event was not included in the definition of “Property” under the
Loan Agreement during such Assessment Period (except to the extent such
Property or portion thereof is subject to a new Qualified Lease), stating that (i) a
review of the activities of Borrower and the Properties during the period that
is the subject of such certificate has been made under his or her supervision
and (ii) to his or her knowledge based upon the foregoing review and other
information of which he or she is aware, Borrower and is in compliance with all
financial covenants under the Loan Agreement, and there exists no Default or
Event of Default as of the date of such certificate or, if any such event shall
have occurred, specifying the nature and status thereof;

 

66

 

(iii)                               If
a Cash Sweep Condition exists, then on or before each Assessment Period
Determination Date that Borrower shall elect, a certificate executed by the
chief executive, operating or financial officer of Borrower (in his or her
capacity as such), showing the Debt Service Coverage Ratio for the applicable
Assessment Period together with supporting calculations; and

 

(iv)                              Within forty-five (45) days after the
last day of each Calendar Half, a certificate executed by the chief executive,
operating or financial officer of Guarantor setting forth (i) the Tangible Net Worth of
Guarantor and (ii) the Liquidity of Guarantor, in each case, as of the end
of such Calendar Half, certified by such officer as being, to such
Person’s knowledge, true, correct and complete in all material respects.

 

(e)                                  Notices by Governmental Authorities.  Promptly upon receipt of same, true and
complete copies of any official notice, claim or complaint by any Governmental
Authority pertaining to Borrower, any Borrower Partner, Manager or Guarantor,
any Property, the Collateral, Borrower’s rights or obligations under any Lease
or Permitted Encumbrance, or any license, permit or approval obtained by
Borrower, in each case which would reasonably be expected to have a Material
Adverse Effect, including any notice from a public authority concerning any tax
or special assessment, or any notice of any alleged violation of any zoning
ordinance, restrictive covenant, fire ordinance, building code provision, or
other Legal Requirement and any notice of any Taking or other eminent domain
action or proceeding affecting or threatened against any portion of the
Properties.

 

(f)                                    Annual Budgets.  As soon as available and in any event within
fifteen (15) days prior to the end of each calendar year, a copy of the
proposed operating budget and capital budget for each Property, for the
following calendar year, including any amendments to the proposed operating
budget within ten (10) days after the preparation thereof.

 

(g)                                 Income Tax Returns.  Within thirty (30) days after the filing
thereof, true and correct copies of the federal income tax returns of Borrower
and Guarantor, including all schedules, exhibits and attachments thereto or
other documents filed together with such returns.

 

(h)                                 Management. 
Within five (5) Business Days of Borrower’s receipt or giving of
same, a copy of all statements and reports, if any, provided to or by Borrower
pursuant to the Asset Management Agreement and any material notice given under,
pursuant to or in connection with any Management Agreement.

 

(i)                                     Notification by Borrower.  The following notifications:

 

(i)                                     promptly
upon Borrower’s obtaining knowledge thereof, any litigation or proceeding
before any Governmental Authority or any mediation or arbitration with respect
to Borrower, any Borrower Partner, Guarantor, any Property, the Collateral,
Borrower’s rights or obligations under any Lease or Permitted Encumbrance, or
any license, permit or approval obtained by Borrower or the Liens securing the
Obligations, including any challenge to or appeal of any Operating Permit or
zoning applicable to such Property, specifying the nature and

 

67

 

status thereof,
and any material determinations in all such litigation, proceedings, mediations
and arbitrations, in each case with respect to the foregoing which are
applicable to a Guarantor, if determined adversely, to the extent same would
reasonably be expected to have a Material Adverse Effect;

 

(ii)                                  promptly
upon the occurrence thereof, any material change in any material fact or
circumstance represented or warranted in this Loan Agreement or any of the
other Loan Documents, or occurrence of any event or circumstance, in each case
which would reasonably be expected to have a Material Adverse Effect;

 

(iii)                               within
three (3) Business Days after the occurrence thereof, of any acceleration
of any Indebtedness of Borrower;

 

(iv)                              within
five (5) Business Days after the occurrence thereof, of any name change or
change in fiscal year for Borrower;

 

(v)                                 within
five (5) Business Days after the occurrence thereof, a copy of any
amendment to the Borrower Partnership Agreement or any other organizational
document, of Borrower or Borrower GP, and promptly following Agent’s request,
an updated organizational chart of the Borrower in the form attached to the
Borrower’s Certificate;

 

(vi)                              promptly
upon Borrower’s obtaining knowledge thereof, any breach, default or failure of
performance by any party under, or any notice that a party has challenged or
denied the validity or enforceability of the Permitted Encumbrances, any
Material Operating Agreement, the Asset Management Agreement or any other
material agreement, contract, or other instrument to which Borrower is a party
or by which any of its properties are bound, in each case that has or would
reasonably be expected to have a Material Adverse Effect;

 

(vii)                           promptly
after receipt of notice of the same from any Person, any claim which would
reasonably be expected to have a Material Adverse Effect against or affecting
Borrower, Borrower GP, Guarantor, any Property, the Collateral, Borrower’s
rights under any Permitted Encumbrance or any license, permit or approval
obtained by Borrower or the Liens securing the Obligations;

 

(viii)                        [Intentionally
Deleted];

 

(ix)                                (i) within ten (10) days
after Borrower or any ERISA Affiliate knows or has reason to know that any
ERISA Event has occurred, that alone or in combination with any other ERISA
Event that has occurred and is continuing, has or would reasonably be expected
to have a Material Adverse Effect and as pertaining to the Properties, as to
all of Properties, considered in their entirety, written notice describing such
event; (ii) within ten (10) days after Borrower or any ERISA
Affiliate knows or has reason to know that a request for a minimum funding
waiver under IRC Section 412 has been filed with respect to any Pension
Plan or Multiemployer Plan, a written statement of Borrower describing such
ERISA Event or waiver request and the action, if any, Borrower and ERISA 

 

68

 

Affiliates propose
to take with respect thereto and a copy of any notice filed with the PBGC or
the IRS pertaining thereto; (iii) within thirty (30) days after Borrower
or any ERISA Affiliate knows or has reason to know that there has been a
material increase in the unfunded pension liability of any Pension Plan, notice
of such occurrence; (iv) simultaneously with the date that Borrower or any
ERISA Affiliate files a notice of intent to terminate any Pension Plan, if such
termination would require material additional contributions in order to be
considered a standard termination within the meaning of Section 4041(b) of
ERISA, a copy of each notice; and (v) within ten (10) days after
Borrower or any ERISA Affiliate adopts a new Pension Plan or becomes obligated
to contribute to a Multiemployer Plan, written notice describing same; and

 

(x)                                   within
five (5) Business Days after the occurrence thereof, a copy of any notice
received under the Wachovia Leases and the Wachovia Master Agreement,
including, any Wachovia Termination Notices.

 

(j)                                     Notice Regarding Contracts.  Promptly following the occurrence thereof,
notification of any material changes in any Material Operating Agreement.

 

(k)                                  [Intentionally
Deleted]

 

(l)                                     Estoppel Certificates.  Within ten (10) Business Days after
request therefor from Agent, Borrower will deliver to Agent a certificate
executed by Borrower, stating the amount due under the Note and this Loan
Agreement and to the effect that as of the date of such certificate, that, to
Borrower’s Knowledge, no Default or Event of Default has occurred and is
continuing or, if any such Default or Event of Default has occurred and is
continuing, describing in reasonable detail each such Default or Event of
Default and the action, if any, taken or being taken to cure the same, and such
other information regarding the Loan, any Property and Borrower as Agent
reasonably requests.

 

(m)                               Account Statements.  Promptly following Borrower’s receipt of the
same, monthly statements with respect to each Account from the bank or other
depositary institution where such Account is held showing all deposits therein
and checks or withdrawals therefrom; and from time to time, such other
information regarding the Accounts as Agent may request; provided, however,
if pursuant to any Account Agreement, including the Cash Management Agreement,
the bank or other depositary institution thereunder is obligated to provide the
foregoing statement, then Borrower shall only be obligated to provide such statement
promptly following the request of Agent therefor.

 

(n)                                 Other Information.  Promptly upon Agent’s request and at Borrower’s
sole cost and expense, such other information concerning the business,
properties, or financial condition of Borrower and Guarantor, including the
performance of their obligations under the Loan Documents, as Agent shall
reasonably request.

 

SECTION 8.2.                  Marketing,
Management, Maintenance and Repairs.

 

(a)                                  With
the exception of the Asset Management Agreement in effect on the Closing Date,
Borrower shall not enter into an Asset Management Agreement without the prior 

 

69

 

consent of Agent. 
Without limiting the foregoing, if Borrower shall enter into an Asset
Management Agreement, Borrower shall, concurrently with the execution thereof,
deliver to Agent an agreement with respect to same (a “Asset Manager
Subordination Agreement”) substantially in the form of Exhibit H
attached hereto executed by Asset Manager pursuant to which Asset Manager
shall, among other things, subordinate its rights thereunder to the Loan
Documents, in form and content reasonably acceptable to Agent.  Borrower shall keep the Asset Management
Agreement, if any, in full force and effect and shall not, without the prior
consent of Agent, surrender, terminate or cancel the Asset Management
Agreement.  Borrower shall not modify,
amend or supplement any term or provision of the Asset Management Agreement,
enter into any agreement in substitution for the Asset Management Agreement, or
consent to the assignment of the Asset Management Agreement without, in each
instance, Agent’s prior consent. 
Borrower shall comply in all material respects with all terms of the
Asset Management Agreement.  After the
occurrence of an Event of Default or a default by Asset Manager under the Asset
Management Agreement beyond the expiration of any applicable notice and grace
periods thereunder, Agent shall have the right (i) to terminate or require
that Borrower terminate, the Asset Management Agreement and (ii) require
Borrower upon such termination to engage a replacement manager acceptable to
Agent pursuant to a replacement asset management agreement acceptable to Agent.

 

(b)                                 With
the exception of the current Property Sub-Management Agreement, Borrower shall
not enter into a Property Sub-Management Agreement without the prior consent of
Agent which approval shall not be unreasonably withheld.  Without limiting the foregoing, if Borrower
shall enter into a new Property Sub-Management Agreement, Borrower shall,
concurrently with the execution thereof, deliver to Agent an agreement with
respect to same (a “Property Sub-Manager Subordination Agreement”)
substantially in the form of Exhibit I attached hereto executed by
Property Sub-Manager pursuant to which Property Sub-Manager shall, among other
things, subordinate its rights thereunder to the Loan Documents, in form and
content reasonably acceptable to Agent, provided that Property Sub-Manager
Subordination Agreements shall not be required for Property Sub-Management
Agreements existing as of the Closing Date. 
Borrower shall keep the Property Sub-Management Agreement, if any, in
full force and effect and shall not, without the prior consent of Agent, surrender,
terminate or cancel the Property Sub-Management Agreement.  Borrower shall not modify, amend or
supplement any term or provision of the Asset Management Agreement, enter into
any agreement in substitution for the Property Sub-Management Agreement, or
consent to the assignment of the Property Sub-Management Agreement without, in
each instance, Agent’s prior consent which shall not be unreasonably
withheld.  Borrower shall comply in all
material respects with all terms of the Property Sub-Management Agreement.  After the occurrence of an Event of Default
or a default by Property Sub-Manager under the Property Sub-Management
Agreement beyond the expiration of any applicable notice and grace periods
thereunder, Agent shall have the right (i) to terminate or require that
Borrower terminate, the Property Sub-Management Agreement and (ii) require
Borrower upon such termination to engage a replacement manager acceptable to
Agent pursuant to a replacement management agreement acceptable to Agent.

 

(c)                                  Subject
to the rights of any Lessee under any Qualified Lease, Borrower shall, and
shall cause the Asset Manager to, cause the Properties to be operated as office
buildings with ancillary retail or branch bank uses and operated, maintained
and managed at all times and in the manner and in accordance with Comparable
Building Standards and ordinary

 

70

 

wear and tear excepted, provided that, if a Lessee is
required under a Qualified Lease to perform any of the covenants herein,
Borrower shall be in compliance with its covenants in this Section 8.2(c) for
so long as Borrower is enforcing such Lease in a commercially reasonable
manner, including, if commercially reasonable and permitted by applicable law
and pursuant to the terms of the Lease, exercises self-help.

 

(d)                                 Borrower
shall not commit or permit any physical waste or deterioration (other than
ordinary wear and tear of or to any Property or the improvements and structures
and equipment thereon.  Subject to the
rights of any Lessee under a Qualified Lease, Borrower shall promptly,
diligently and continuously restore, replace or rebuild or cause to be
restored, replaced or rebuilt any part of the improvements, structures and
equipment on any Property damaged or destroyed by any Casualty (including any
Casualty for which insurance was not obtained or obtainable) or which may be
affected by any Taking, in accordance with the Loan Documents and the Permitted
Encumbrances, provided that, if a Lessee is required under a Qualified Lease to
perform any of the covenants herein, Borrower shall be in compliance with its
covenants in this Section 8.2(d) for so long as Borrower is
enforcing such Lease in a commercially reasonable manner including, if
commercially reasonable and permitted by applicable law and pursuant to the
terms of the Lease, exercises self-help. 
Borrower shall promptly replace, or caused to be replaced, any part of
any of the Property taken by theft to the extent necessary to comply with the
provisions of this Section 8.2(d).

 

SECTION 8.3.                  Inspection of
the Properties and Books and Records.

 

(a)                                  Subject
to the rights of Lessees under Qualified Leases, Borrower will permit Agent,
any Lender and any construction consultant retained by Agent or designated
representatives of any of them, to enter upon and inspect any Property, or any
part of the foregoing, in an emergency and at all other times during normal
business hours and upon reasonable notice, with free access to inspect or
examine any Property, including the construction of the Tenant Improvements.  At Borrower’s expense, Borrower will permit
Agent and its consultants to review, inspect and examine the following:

 

(i)                                     all
materials and shop drawings pertaining to the construction of the Tenant
Improvements, to the extent in Borrower’s possession or accessible through the
Asset Manager;

 

(ii)                                  any
contracts, bills of sale, statements, receipts, books, vouchers and records,
pertaining to the construction of the Tenant Improvements, to the extent in
Borrower’s possession or accessible through the Asset Manager;

 

(iii)                               all
work done, labor performed or materials furnished in and about any Property or
stored or otherwise located off-site in connection with the construction of the
Tenant Improvements, to the extent in Borrower’s control, or accessible through
the Asset Manager; and

 

(iv)                              any
other documents which are related to the construction of the Tenant
Improvements, to the extent in Borrower’s possession or accessible through the
Asset Manager.

 

71

 

To the extent not located on such Property, Borrower
shall make the materials referred to in clauses (i), (ii) and
(iv) available to Agent at the offices of the Asset Manager or the
applicable Property Sub-Manager or otherwise in New York, New York.

 

(b)                                 Borrower,
at its expense, promptly will provide Agent and its consultants with copies of
any of the drawings and other materials referred to in clauses (i),
(ii) and (iv) of Section 8.3(a) hereof
as Agent and such consultants may from time to time reasonably request.  Borrower will make its representatives
available to meet with Agent or such consultants or any designated
representative of either upon reasonable notice at the applicable Property or
in New York, New York, to discuss Borrower’s affairs, finances and accounts
relating to the construction of the Tenant Improvements, and Borrower, will
reasonably cooperate, and take all reasonable steps to cause all of Borrower’s
contractors to cooperate with Agent or any designated representative of either
with respect to the foregoing.

 

(c)                                  Agent
shall have no duty to make any inspection nor shall Agent incur any liability
or obligation for not making any such inspection or, once having undertaken any
such inspection, for making the inspection, not making the same carefully or
properly, or for not completing the same; nor shall the fact that such
inspection may not have been made by Agent relieve Borrower of any obligations
that it may otherwise have under the Loan Documents.  Agent shall not hinder and shall take
reasonable steps not to interfere and to advise its agents and representatives
not to interfere with ongoing operations and/or construction activity at any
Property.

 

(d)                                 Borrower
shall at all times keep or cause to be kept reasonably complete and accurate
books, records and accounts of its material transactions.  At Borrower’s expense, Borrower shall permit
any representative of Agent, at all reasonable times during normal business
hours upon reasonable notice, to examine and copy the books and records of
Borrower, and all contracts, statements, invoices, bills, and claims for labor,
materials, and services supplied to Borrower, or otherwise in Borrower’s
possession or access them through the Asset Manager for the construction,
reconstruction, maintenance, operation and repair of any Property.

 

SECTION 8.4.                  Compliance with
Legal, Insurance and Contractual Requirements.

 

(a)                                  Subject
to Borrower’s right to contest as set forth in Section 8.8 hereof,
Borrower, at its sole cost and expense, shall comply in all material respects
and cause compliance of the Properties in all material respects and the
construction, use, occupancy, possession, operation, management, maintenance
and ownership thereof, with all Legal Requirements and all Insurance
Requirements, whether or not compliance therewith shall require changes in, or
interfere with the use and enjoyment of, the Properties or any part
thereof.  Borrower shall preserve and
maintain all of its rights, privileges and Operating Permits necessary to fully
operate the Properties in accordance with Section 8.2 hereof.  Agent shall not have any obligation or
responsibility whatsoever for any matter incident to any Property, the
construction of any part of the Properties or the maintenance and operation of
the Properties.  Borrower agrees that all
consents, approvals, orders or authorizations of, or registrations,
declarations or filings with, or other actions with respect to or by, any
Governmental Authorities required for the construction of the Properties, the
operation and maintenance of the Properties and otherwise in

 

72

 

connection with the carrying out or performance of any
of the transactions required or contemplated hereby or thereby (other than
routine construction and occupancy permits which are not appropriate or
necessary for the stages of construction in question) will be obtained when
required.  Notwithstanding the foregoing,
Borrower shall be compliance with the foregoing covenants to the extent that
any Lessee is obligated to perform such covenants pursuant to a Qualified Lease
and Borrower is enforcing such Lease is a commercially reasonable manner,
including, if commercially reasonable and permitted by applicable law and
pursuant to the terms of the Lease, exercises self-help.

 

(b)                                 Borrower,
at its sole cost and expense, shall comply in all material respects with all of
its covenants, obligations, agreements and undertakings under the material
Property Documents, the Permitted Encumbrances and the Material Operating Agreements,
and make all commercially reasonable efforts to secure the performance of the
obligations of the other parties thereto and to enforce its rights thereunder,
including, if commercially reasonable and permitted by applicable law and
pursuant to the terms of the Lease, exercises self-help.  Borrower shall keep in full force and effect
and not terminate, cancel, surrender, modify, amend or enter into any agreement
in substitution for any brokerage or other leasing commission agreement, any
Permitted Encumbrance, any Property Document or any Material Operating
Agreement, in each case without the prior consent of Agent.

 

(c)                                  Borrower,
at its sole cost and expense, shall comply and cause compliance with all rights
of way or use, declarations or transfers of air rights, other declarations,
zoning lot development agreements, privileges, franchises, licenses, Leases,
servitudes, easements and other encumbrances affecting or forming a part of any
of the Mortgaged Properties or any portion thereof, and all instruments
creating or evidencing the same, in each case, to the extent compliance
therewith is required of Borrower under the terms thereof.  Borrower shall not take any action which
results in a forfeiture or termination of the rights afforded to Borrower under
any such instruments.  Borrower shall
make all reasonable efforts to secure the performance of the obligations of the
grantors or other parties thereto and to enforce Borrower’s rights
thereunder.  Borrower shall not, without
the prior consent of Agent, modify, amend or enter into any agreement in
substitution for any such instruments.

 

SECTION 8.5.                  Appraisals.  Agent shall have the right to cause an
Appraisal or Appraisal Update of any Property to be performed at Borrower’s
sole cost and expense (a) at any time that Agent reasonably determines
that an Appraisal or Appraisal Update is required by any law or regulation, (b) at
any time that a Default or an Event of Default has occurred and is continuing, (c) with
respect to any affected Major Property, at any time a Wachovia Termination
Event has occurred with respect to more than fifty percent (50%) of the net
leaseable space at the applicable Property (and then, only the cost of an
Appraisal Update), or (d) at any time that the credit rating of Wachovia
has been downgraded by any Rating Agency by at least two (2) grades and
thereafter by one (1) grade (and then, only the cost of an Appraisal
Update); provided, however, (i) in no event shall Borrower
be obligated to pay the cost and expense of more than an aggregate of three (3) Appraisals
and Appraisal Updates for each Property during the Term and (ii) any other
Appraisals or Appraisal Updates shall be at Lenders’ cost and expense.  Borrower shall reasonably cooperate with
Agent and any such appraiser and their agents and employees in connection with
Appraisals and Appraisal Updates.

 

73

 

SECTION 8.6.                  Payment of
Impositions.  Subject to Borrower’s
right to contest in accordance as set forth in Section 8.8 hereof,
Borrower shall pay or cause to be paid all Impositions on or before the
delinquency thereof and in any event before any fine, penalty, interest or cost
may be added for non-payment (provided that Borrower shall not be in breach of
the foregoing obligation if any Lessee is required to make such payment under a
Qualified Lease and Borrower is enforcing such obligation in a commercially
reasonable manner, or if consistent with management standards, exercises
self-help).  Borrower promptly shall
deliver to Agent after payment of any Imposition and at other times, upon
request, copies of official receipts or other evidence satisfactory to Agent
evidencing the payment of the Impositions. 
Borrower shall not claim or demand or be entitled to any credit or
credits on account of the Obligations for any Imposition or any part thereof
and no deduction shall otherwise be made or claimed from the taxable value of
any Mortgaged Property, the Collateral or any part thereof, by reason of any
Mortgage or the Obligations.

 

SECTION 8.7.                  Liens and
Encumbrances; Ownership of Collateral. 
Liens and Encumbrances; Ownership of
Collateral.  Subject to Section 2.17
hereof, Borrower shall at all times be the absolute and sole owner of, and have
good, legal and beneficial title to, the Properties in fee simple
absolute.  Borrower shall at all times be
the sole and absolute owner of and have legal and beneficial title to the other
Collateral, free and clear of any Lien except the Permitted Encumbrances and
the Loan Documents.  In furtherance of
the foregoing, (a) Borrower shall not make, grant, modify or terminate any
rights of way or use, declarations, transfers of air rights, other
declarations, zoning lot development agreements, privileges, franchises,
licenses, servitudes, easements and other encumbrances over, under or on any
Land or Improvements or any portion thereof, without the prior consent of Agent
and (b) Borrower shall not directly or indirectly create or permit or
suffer to be created any Lien on Borrower’s interest in any Collateral or any
part thereof, other than the Permitted Encumbrances, the Loan Documents.  Borrower shall not directly or indirectly
suffer or permit, and shall promptly discharge or cause to be discharged, any
Lien on any portion of the Collateral or any other Property owned by Borrower.

 

SECTION 8.8.                  Permitted
Contests.  With respect to any
Property, after prior written notice to Agent and provided no First Tier
Default or Event of Default shall then exist, Borrower, at its sole cost and
expense, may contest, or cause to be contested, by appropriate legal
proceedings conducted in good faith and with due diligence, the amount or validity
or application, in whole or in part, of any Imposition, Legal Requirement or
Insurance Requirement and defer the payment thereof or compliance therewith, subject,
however, to the following conditions:

 

(a)          such
proceedings shall suspend the collection of such Imposition from Borrower,
Agent, Lenders and such Mortgaged Property and other Collateral;

 

(b)         neither
such Mortgaged Property, the other Collateral, any Rents nor any part thereof
or interest therein, in the judgment of Agent, would be in any danger of being
sold, forfeited, terminated, canceled or lost in any material respect as a
result of such non-payment;

 

74

 

(c)          such
contest shall operate to prevent the enforcement of such Legal Requirement,
Borrower would not be in danger of criminal liability for failure to comply
therewith and neither Agent nor any Lender would be in danger of any civil or
criminal liability for failure to comply therewith;

 

(d)         Borrower
shall have furnished such security, if any, as may be required in the
proceedings or as may be requested by Agent to ensure the payment of any
Imposition or the compliance with any Legal Requirement or Insurance
Requirement, as the case may be, together with any interest or penalties which
may become due in connection therewith;

 

(e)          the
payment of any sums required to be paid under this Loan Agreement and the other
Loan Documents (other than any unpaid Imposition at the time being contested in
accordance with this Section 8.8) shall not be interfered with or
otherwise affected;

 

(f)            in
the case of any Insurance Requirement, the failure of Borrower to comply
therewith shall not affect the validity or effectiveness of any insurance
required to be maintained by Borrower under Section 8.11 hereof;
and

 

(g)         Borrower
complies with any and all conditions or requirements set forth in any Lease or
other agreement to which Borrower is a party or pursuant to which such Property
is bound with respect to such contest;

 

provided, that, the conditions set forth in clauses (a),
(c), (d), (e) and (g) shall not be
conditions to a permitted contest pursuant to this Section 8.8 if
Borrower pays and otherwise complies with such Imposition, Legal Requirement or
Insurance Requirement.  If any of the
foregoing conditions are not or become unsatisfied or any contest is
discontinued, Borrower shall comply with such contested Legal Requirement and
pay such contested Imposition. 
Notwithstanding anything to the contrary herein or in any other Loan
Documents, the foregoing shall not limit the rights of any Lessee under any
Qualified Lease to contest any Legal Requirement or Imposition to the permitted
pursuant to such Lease (and the obligation of Borrower to cooperate with
respect thereto) provided that such Lessee complies with the terms and
conditions of such Qualified Lease in all material respects and provided
further that Borrower shall comply or cause compliance with such Legal
Requirement if Borrower, Agent or any Lender would be in danger of criminal or
civil liability or forfeiture for failure to comply therewith and a Material
Adverse Effect could reasonably be expected to arise from such noncompliance.

 

SECTION 8.9.                  Alterations.  Without
the prior consent of Agent, Borrower shall not alter or add to any Property (except
for maintenance and repairs in the ordinary course of Borrower’s business) if
the cost of such alterations and additions (excluding maintenance and repairs
in the ordinary course of Borrower’s business), considered on an aggregate
basis with all related alterations additions to such Property during the
immediately preceding twelve (12) month period, is in excess of the Project
Cost Threshold; provided, however, such consent shall not be
required in connection with any alterations, addition or repairs required by
law or pursuant to any Qualified Lease or any maintenance or repair in the
ordinary course of Borrower’s business. 
Any alterations to any Property by Borrower shall be prosecuted with
diligence and continuity in a first class workmanlike manner in accordance with
the terms of this Loan

 

75

 

Agreement. 
Agent’s approval shall not be required with respect to any alterations
by Wachovia as a Lessee, if Wachovia is permitted to do so without Lessor’s
prior approval pursuant to any Wachovia Lease and/or the Wachovia Master
Agreement; provided, however, at the request of Agent, Borrower
shall provide copies of all documentation required to be supplied by Wachovia
to Lessor under such Wachovia Lease.

 

SECTION 8.10.           Leases.

 

(a)                                  With
respect to each Property, except as set forth in Sections 8.10(c) and
(d) hereof, Borrower shall not enter into, amend, modify,
terminate, consent to the assignment or surrender of, or grant a waiver of any
material provision or right of Borrower under, or otherwise supplement any
Non-Wachovia Lease without Agent’s prior consent.

 

(b)                                 Without
limiting Section 8.10(a) hereof, with respect to each
Property, Borrower shall not do the following:

 

(i)                                     enter
into, amend, modify, terminate, consent to the assignment or surrender of, or
grant a waiver of any material provision or right of Borrower under, or
otherwise supplement any Wachovia Lease without Agent’s prior consent;

 

(ii)                                  take
any action which would limit or reduce the rights of Agent as Designated
Portfolio Lender; and

 

(iii)                               unless
in connection with a Release in accordance with Section 2.17
hereof, cause or permit any Wachovia Lease to be re-classified as a “Non-Integrated
Lease” (as such term is defined in the Wachovia Master Agreement).

 

(c)                                  With
respect to each Property, Borrower may, without the prior consent of Agent,
enter into, amend, modify, or otherwise supplement a Non-Wachovia Lease which
demises (when taken together with other Leases of any Property or portion thereof
entered into by such Lessee or Affiliates thereof) less than the greater of (i) an
aggregate amount of 10,000 net rentable square feet of space or (ii) twenty
percent (20%) or more of the net rentable square feet of space in such
Property; provided, that all of the following conditions are
satisfied:

 

(i)                                     no
First Tier Default or Event of Default shall have occurred and be continuing
when such Lease, amendment or supplement is entered into;

 

(ii)                                  the
proposed Lease is entered into in an arm’s-length transaction in the ordinary
course of business with a Lessee that is not an Affiliate of and/or Controlled
by Borrower, any Borrower Partner or Guarantor;

 

(iii)                               the
proposed Lessee is creditworthy in the context of its obligations under the
proposed Lease;

 

(iv)                              the
monthly base rent and other financial terms of the proposed Lease shall not be
less than the prevailing market rates in the location of the

 

76

 

Property for
leases of similar amounts of space, length of term and use of space and located
in buildings consistent in character, quality and location with the Property
and the other terms of proposed Lease are otherwise commercially reasonable;

 

(v)                                 the
proposed Lease does not contain any purchase options or right to purchase any
part of such Property or the Collateral;

 

(vi)                              the
proposed Lease does not violate any other Leases;

 

(vii)                           the
execution of the proposed Lease does not violate the terms, provisions or
covenants of any of the Permitted Encumbrances; and

 

(viii)                        the
proposed Lease complies with Section 8.10(k) hereof.

 

(d)                                 With
respect to each Property, and without limiting Section 8.10(c) hereof,
Borrower may, without the prior consent of Agent, enter into, amend, modify, or
otherwise supplement a Non-Wachovia Lease which demises (when taken together
with other Leases of any Property or portion thereof entered into by such
Lessee or Affiliates thereof) less than the greater of (i) an aggregate
amount of 35,000 net rentable square feet of space or (ii) forty percent
(40%) or more of the net rentable square feet of such Property; provided,
that all of the following conditions are satisfied:

 

(i)                                     no
First Tier Default or Event of Default shall have occurred and be continuing
when such Lease, amendment or supplement is entered into;

 

(ii)                                  the
proposed Lease is entered into in an arm’s-length transaction in the ordinary
course of business with a Lessee that is not an Affiliate of and/or Controlled
byBorrower, any Borrower Partner or Guarantor;

 

(iii)                               the
proposed Lessee is creditworthy in the context of its obligations under the
proposed Lease;

 

(iv)                              the
monthly base rent and other financial terms of the proposed Lease shall not be
less than the prevailing market rates in the location of the Property for leases
of similar amounts of space, length of term and use of space and located in
buildings consistent in character, quality and location with the Property and
the other terms of proposed Lease are otherwise commercially reasonable;

 

(v)                                 the
proposed Lease has a minimum initial term of five (5) years (with no early
termination clause that would reduce the term to less than five (5) years);

 

(vi)                              the
proposed Lease does not contain any purchase options or right to purchase any
part of such Property or the Collateral;

 

(vii)                           the
proposed Lease does not violate any other Leases;

 

77

 

(viii)                        the
execution of the proposed Lease does not violate the terms, provisions or
covenants of any of the Permitted Encumbrances; and

 

(ix)                                the
proposed Lease complies with Section 8.10(k) hereof.

 

(e)                                  Without
limiting Section 8.10(a) hereof, Borrower shall deliver to
Agent a copy of any Lease, and any amendment, modification or supplement
thereof within five (5) Business Days after the execution and delivery
thereof.

 

(f)                                    In
the event that Borrower requests Agent’s consent under Section 8.10(a) through
(d) hereof in accordance with the following requirements, such
consent shall be deemed given if Agent has not provided Borrower with notice of
whether Agent is giving or denying the requested consent, or requesting
additional information which Agent determines is necessary to analyze and
evaluate such request (in such case, Borrower shall promptly furnish such
additional information and shall be required to once again comply with the
provisions of this Section 8.10(f), including the sending of a
First Section 8.10 Request Notice and a Second Section 8.10 Request
Notice within the applicable time periods set forth in this Section 8.10),
within seven (7) Business Days after Borrower’s submission to Agent of a
Second Section 8.10 Request Notice:

 

(y)                                 Borrower
shall send a notice (a “First Section 8.10 Request Notice”) to
Agent requesting such consent, comply with the following requirements:

 

(A)                              Such
request shall contain in boldface conspicuous type at the beginning of such
notice the following text:

 

“THIS IS A FIRST SECTION 8.10 REQUEST NOTICE
BEING DELIVERED PURSUANT TO SECTION 8.10 OF THE LOAN AGREEMENT BETWEEN
FIRST STATES INVESTORS 3300 B, L.P., AS BORROWER AND PB CAPITAL CORPORATION, AS
AGENT, AND THE LENDERS PARTY THERETO. 
FAILURE TO RESPOND WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS
NOTICE SHALL TRIGGER A SECOND NOTICE IN ACCORDANCE WITH CLAUSE (z) OF SECTION 8.10(f) OF
SUCH  LOAN AGREEMENT.  FAILURE TO RESPOND TO SUCH SECOND REQUEST
SHALL BE DEEMED TO BE A CONSENT TO THE SUBJECT OF THE REQUEST SET FORTH HEREIN”;

 

(B)                                Borrower
shall in good faith contact (telephonically or by e-mail) the asset manager at
Agent known to Borrower as having primary responsibility for the Loan and/or
the relationship with Borrower and advise such Person that such request is
being made and the consequence of Agent’s failure to respond to such request;
and

 

(C)                                Such
request shall be accompanied by a term sheet describing the proposed Lease,
amendment, supplement or other action for which consent has been
requested,  and all other items
reasonably necessary for Agent to determine whether such consent should be given
or withheld,

 

78

 

(z)                                   Borrower
shall send a second notice (a “Second Section 8.10 Request Notice”)
to Agent no earlier than ten (10) Business Days, but not later than twenty
five (25) Business Days, after the date that the applicable First Section 8.10
Request Notice was delivered to Agent, which notice shall comply with the
following requirements:

 

(A)                              Such
request shall contain in boldface conspicuous type at the beginning of such
notice the following text:

 

“THIS IS A SECOND SECTION 8.10 REQUEST NOTICE
BEING DELIVERED PURSUANT TO CLAUSE (z) OF SECTION 8.10(f) OF THE
LOAN AGREEMENT BETWEEN FIRST STATES INVESTORS 3300 B, L.P., AS BORROWER AND PB
CAPITAL CORPORATION, AS AGENT, AND THE LENDERS PARTY THERETO, AND THE LENDERS
PARTY THERETO.  FAILURE TO RESPOND WITHIN
SEVEN (7) BUSINESS DAYS OF RECEIPT OF THIS NOTICE SHALL BE DEEMED TO BE A
CONSENT TO THE SUBJECT OF THE REQUEST SET FORTH HEREIN”;

 

(B)                                Such
request shall attach the applicable First Section 8.10(a) Request
Notice;

 

(C)                                Borrower
shall in good faith contact (telephonically or by e-mail)  the asset manager at Agent known to Borrower
as having primary responsibility for the Loan and/or the relationship with
Borrower and advise such Person that such request is being made and the
consequence of Agent’s failure to respond to such request; and

 

(D)                               Such
request shall be accompanied by a term sheet describing the proposed Lease,
renewal, modification, renewal or other action for which consent has been
requested to which such consent is being requested and all other items
reasonably necessary for Agent to determine whether such consent should be
given or withheld.

 

Notwithstanding the
foregoing, the sending of a First Section 8.10 Request Notice or a Second Section 8.10
Request Notice shall not limit Borrower’s obligations to promptly deliver any
additional information which Agent determines is necessary to analyze and
evaluate the request made by Borrower in such notices.

 

(g)                                 Borrower
shall faithfully keep and perform its obligations under the Leases in all
material respects and shall not permit any Lessee to prepay Rents pursuant to
the terms of any Lease other than the usual prepayment of Rent as would result
from the acceptance on the first day of each month of the Rent for the ensuing
month, according to the terms of any Leases. 
Borrower shall promptly (i) notify Agent, in writing, of any
material defaults (beyond any applicable notice and cure periods) by any Lessee
or Lease guarantor after Borrower becomes aware of the same and (ii) deliver
to Agent a copy of all termination notices, default notices, notices claiming
any offset rights and all other material notices from any Lessee or Lease
guarantor to Borrower or from Borrower to any Lessee or Lease guarantor.

 

(h)                                 Borrower
shall appear in and defend any action or proceeding arising under, occurring
out of, or in any manner connected with, any Leases and Lease guaranties or the

 

79

 

obligations, duties, or liabilities of Borrower or any Lessee or any
Lease guarantor thereunder.  Borrower
shall pay all costs and expenses of Agent, including reasonable attorneys’
fees, in any action or proceeding in which Agent may appear.

 

(i)                                     Borrower
shall use commercially reasonable efforts to enforce or secure the performance
of the obligations of the Lessees and Lease guarantor.  Without Agent’s prior consent, which shall
not be unreasonably withheld where (x) the amount of such obligations does
not exceed $250,000 or (y) the aggregate amount of net rentable square
feet does not exceed 10,000 net rentable square feet and is otherwise
undertaken in the ordinary course of Borrower’s business, Borrower shall not
waive, discount, set-off, compromise, or in any manner release or discharge any
Lessee or Lease guarantor of and from any obligations, covenants, conditions,
and agreements by said Lessee and Lease guarantor to be kept, observed, and
performed, in the manner and at the place and time specified in the applicable
Lease and Lease guaranty.

 

(j)                                     Borrower
shall not, and shall not allow any Person on behalf of Borrower, to enter into
any agreement with any Person to pay leasing commissions with regard to any
Lease which agreement is not expressly made subordinate to Agent’s rights,
interests and claims under the Loan Documents.

 

(k)                                  All
Leases entered into by Borrower shall be made expressly subject and subordinate
to the applicable Mortgage and the terms and provisions thereof and shall
contain provisions obligating the Lessees thereunder to attorn to Agent or any purchaser
therefrom upon its written demand in the event Agent or such purchaser succeeds
to the interest of Borrower under such Leases. 
Each Lease guaranty shall provide that it shall remain in full force and
effect, and that guarantor thereunder shall perform for the benefit of Agent or
such purchaser, upon attornment by the Lessee. 
Upon request of Borrower, Agent will enter into subordination,
non-disturbance and attornment agreements with respect to Qualified Leases
entered into after the Closing Date which require Agent’s consent hereunder in
substantially the form attached hereto as Schedule 8.10 hereof.

 

(l)                                     Borrower
shall pay all expenses of Agent, including Agent’s Counsel Fees, incurred in
connection with the review of any proposed Lease, amendment, modification,
waiver, supplement, termination or surrender under this Section 8.10.

 

SECTION 8.11.           Required Insurance.

 

(a)                                  Required Coverage. 
In addition to any insurance required to be maintained by
Borrower pursuant to the Asset Management Agreement, the Property Documents or
the Leases, Borrower, at its sole cost and expense, shall maintain, or, as
specifically set forth below, cause to be maintained, the Insurance Policies
set forth on Schedule 8.11 attached hereto.

 

(b)                                 General Requirements of Insurance Policies.  All Insurance Policies shall be issued by an
insurer or insurers with an A.M. Best rating of A:X or better, provided
however that insurers with “A-” ratings will be permitted if their trend rating
as indicated by A.M. Best is stable or trending positive and if their
potential liability for loss does not exceed five percent (5%) of their
policy-holder surplus; such insurers with a negative trend shall not be
permitted”.  Agent may (but has no
obligation to), at its sole discretion, accept insurers that do

 

80

 

not meet the minimum requirements stated herein.  The property and boiler and machinery
Insurance Policies as required in Schedule 8.11 shall also name Agent
and each Lender under a non-contributing New York Standard Mortgagee or
Lender Loss Payee clause and, with respect to rental income, as Lender Loss
Payee, on forms reasonably acceptable to Agent, or equivalent endorsements
reasonably satisfactory to Agent and shall be otherwise reasonably satisfactory
to Agent in form and content.  All
property Insurance Policies also shall include a replacement cost and
co-insurance waiver and/or an agreed amount endorsements and other endorsements
as are provided in Schedule 8.11 attached hereto.  The amount of any deductible under any
Insurance Policy must be reasonably acceptable to Agent.  No Insurance Policy shall contain any
exclusion for earthquake or terrorism as defined in the Terrorism Risk
Insurance Program Reauthorization Act of 2007 (“TRIPRA”) or its
replacement or be subject to any sublimit for TRIPRA or its replacement.
Earthquake insurance may be sub-limited on a reasonable basis considering
earthquake location risk and annual aggregate sub-limits with the reasonably
prior approval of Agent.  Without Agent’s
prior consent, Borrower shall not name any Person other than Agent as loss
payee or mortgagee under any property Insurance Policies nor shall Borrower
carry separate or additional insurance coverage covering all of the Properties
and such improvements and betterments which Borrower is required to insure
pursuant to any agreement concurrent in form or contributing in the event of
loss with that required by this Loan Agreement or the Loan Agreement; provided,
that, if blanket policies are obtained, this sentence shall not apply to
property covered by such blanket policies, other than the Properties and such
improvements and betterments.  Borrower
shall pay the premiums for the Insurance Policies as the same become due and
payable.  Borrower shall deliver to Agent
copies of the Insurance Policies, when available, required to be maintained
pursuant to Section 8.11(a) hereof, provided, however,
Agent shall not be deemed by reason of the custody of such Insurance Policies
to have knowledge of the contents thereof. 
Borrower also shall deliver to Agent, within three (3) days of
Agent’s request, a certificate of Borrower or Borrower’s insurance agent
evidencing the coverages set forth herein together with evidence that all
premiums due thereon have been paid and that the same are in full force and
effect.  Not later than three (3) days
prior to the expiration date of each of the Insurance Policies, Borrower shall
deliver to Agent a certificate of insurance evidencing renewal of coverage as
required herein or, at Agent’s request, a copy of a renewal policy or policies,
when available, in each case together with evidence satisfactory to Agent that
all premiums therefor have been paid and that the policies are in full force
and effect.

 

(c)                                  As to Agent and the Lenders.  Each
Insurance Policy shall contain a provision whereby the insurer (1) agrees
that such policy shall not be canceled or fail to be renewed, without at least
thirty (30) days’ prior written notice to Agent, (2) waives any right to
claim any premiums and commissions against Agent and the Lenders, provided,
that the policy need not waive the requirement that the premium be paid in
order for a claim to be paid to the insured and (3) provides that Agent is
permitted to make payments to effect the continuation of such policy upon
written notice of cancellation due to nonpayment of premiums and permitting
Borrower five (5) days to cure the nonpayment, provided that cancellation
or termination shall not otherwise occur during this 5-day period.  Borrower shall notify Agent in the event that
(x) such policy shall be canceled or terminated, (y) the coverage,
deductible and limits of such policy shall be significantly modified, or (z) other
provisions of such policy shall be modified if such policy, after giving effect
to such modification, and all modifications in the aggregate, would not satisfy
the requirements of this Loan Agreement. 
Notwithstanding anything to the contrary in the preceding sentence, Borrower
shall be required to maintain such Insurance

 

81

 

Policies in accordance with the requirements of this Loan
Agreement.  In the event any Insurance
Policy (except for general public and other liability and workers’ compensation
insurance) shall contain breach of warranty provisions, such policy shall
provide that with respect to the interest of Agent, such Insurance Policy shall
not be invalidated by and shall insure Agent regardless of (A) any act,
failure to act or negligence of or violation of warranties, declarations or
conditions contained in such policy by any named insured, without knowledge of
Agent, (B) the occupancy or use of any Property for purposes more
hazardous than permitted by the terms thereof, or (C) any foreclosure or
other action or proceeding taken by Agent pursuant to any provision of this
Loan Agreement.

 

(d)                                 Blanket Policies.  Any insurance maintained pursuant to this Section 8.11
may be evidenced by blanket insurance policies covering the Properties (or any
portion thereof) and other properties or assets of Borrower or its Affiliates; provided,
that any such policy shall in all other respects comply with the requirements
of this Section 8.11.

 

(e)                                  Agent’s Right to
Procure Insurance. 
Notwithstanding anything to the contrary contained herein, if at any
time Agent is not in receipt of written evidence that all insurance required
hereunder is maintained in full force and effect, Agent shall have the right
(but not the obligation) to take such action as Agent deems necessary to
protect its interests in the Properties, including the obtaining of such
insurance coverages as are required hereunder, and all expenses incurred by
Agent in connection with such action or in obtaining such insurance and keeping
it in effect shall be paid by Borrower promptly after demand and shall be
secured by the Loan Documents. Notwithstanding the above, none of the above
shall be taken by Agent without notice in writing to the Borrower, permitting
Borrower to cure any default regarding insurance within ten (10) days of
Agent’s notification to Borrower, provided that cancellation or termination
shall not have otherwise occurred prior to or during this 10-day period.

 

SECTION 8.12.           Damage or Destruction.

 

(a)                                  Promptly,
and in any case within three (3) Business Days after the occurrence
thereof, Borrower shall notify Agent of any fire or other Casualty with respect
to any portion of any Property if Borrower’s reasonably foresees that of the
cost of Restoration will exceed the lesser of (i) $1,000,000 or (ii) five
percent (5%) of the Allocated Loan Amount for the applicable Property.  Such notice also shall generally describe the
nature and extent of such Casualty and set forth Borrower’s best estimate of
the cost of Restoration.

 

(b)                                 Agent
shall be entitled to receive all insurance proceeds payable with respect to any
Property on account of a Casualty. 
Borrower hereby irrevocably assigns, transfers and sets over to Agent
all rights of Borrower to any such insurance proceeds, award or payment.  Borrower hereby irrevocably authorizes and
empowers Agent, in the name of Borrower or otherwise, to file for and prosecute
in its own name what would otherwise be Borrower’s claim for any such insurance
proceeds.  Notwithstanding the foregoing,
so long as no Default or Event of Default shall have occurred and shall then be
continuing and provided Borrower promptly files all claims and diligently
prosecutes same, Borrower shall have the right to file, adjust, settle and
prosecute any claim for such insurance proceeds; provided, however,
that Borrower shall not agree to any adjustment or settlement of any such claim
payable with respect to a Casualty the insurance proceeds with respect to which
are greater than $1,500,000 (the “Casualty Proceeds 

 

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Disbursement Threshold”) without
Agent’s prior consent.  Borrower shall
promptly after demand pay to Agent all reasonable costs and expenses (including
the fee of any insurance consultant or adjuster and reasonable attorneys’ fees
and disbursements) incurred by Agent in connection with a Casualty and seeking
and obtaining any insurance proceeds, award or payment with respect
thereto.  Net Proceeds held by Agent,
together with any interest earned thereon, shall constitute additional security
for the payment of the Obligations (a security interest therein being granted
hereby), until disbursed in accordance with this Section 8.12 or Section 8.14
hereof, as the case may be. 
Notwithstanding the foregoing, or anything else herein, to the contrary,
all proceeds of business interruption/rent loss insurance may be collected by
and shall be paid to Agent and applied in accordance with Section 8.12(g) hereof.

 

(c)                                  Borrower
shall, at its sole cost and expense, promptly commence and diligently and
continuously perform to completion the Restoration in a good and workmanlike
manner and in compliance with all Legal Requirements and the requirements of
the Permitted Encumbrances, whether or not Borrower shall have satisfied the
requirements of Section 8.12(d) hereof in order to cause the
Net Proceeds to be made available for such Restoration and whether or not such
insurance proceeds on account of the Casualty shall be sufficient for such
purpose.

 

(d)                                 With
respect to any Property, in the case of any Casualty with respect to which the
insurance proceeds payable are equal to or greater than the Casualty Proceeds
Disbursement Threshold, the Net Proceeds shall be held by Agent, if Agent so
elects, as a part of the Collateral and shall be applied or dealt with by Agent
as follows:

 

(i)                                     The
Net Proceeds shall be disbursed in accordance with the requirements of Article III
of this Loan Agreement such that the Net Proceeds shall be advanced in the same
manner as the disbursement of the proceeds of the Cash Flow Collection Account
if the following conditions are satisfied (each a “Release Condition”
and collectively, the “Release Conditions”):

 

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

 

(B)                                Borrower
shall have delivered to Agent within sixty (60) days after the occurrence of
the Casualty, a notice of Borrower’s desire to undertake the Restoration;

 

(C)                                Borrower
shall have demonstrated to the satisfaction of Agent that the Restoration can
be completed at least three (3) months prior to the then-current Maturity
Date, or such earlier time as may be required by applicable Legal Requirements;

 

(D)                               Borrower
shall have demonstrated to the satisfaction of Agent that sufficient funds are
available to Borrower through rent and/or business interruption insurance
maintained pursuant to Section 8.11 hereof, cash and/or a

 

83

 

letter of credit or other similar cash-equivalent
security reasonably satisfactory to Agent as to form, content and issuer, and
which shall be for the benefit of Agent, to pay all debt service with respect
to the Loan and all operating expenses with respect to such Property during the
period reasonably estimated by Borrower as necessary for the completion of the
Restoration;

 

(E)                                 Borrower
shall have provided Agent with a guaranty of completion reasonably satisfactory
to Agent in form and content and as to guarantor which guarantees the timely
and lien-free completion of the Restoration; and

 

(F)                                 to
the extent, in Agent’s reasonable judgment, the Net Proceeds are insufficient
to pay the costs of the Restoration, Borrower shall have provided Agent with a
letter of credit, cash deposit or similar equivalent security in the amount of
such deficiency in form, content and issuer reasonably satisfactory to Agent or
other evidence reasonably satisfactory to Agent that Borrower has sufficient
funds to pay the costs of the Restoration; and

 

(G)                                Agent
shall have received written confirmation satisfactory to Agent that Qualified
Leases shall remain in full force and effect through Restoration and upon and
after completion of the Restoration, and with the exception of a Restoration
required by Wachovia pursuant to a Wachovia Lease, the Lessees thereunder shall
be obligated upon completion of the Restoration to pay rent in an aggregate
amount of not less than the aggregate amount of rent necessary, in Agent’s sole
determination, for the Loan-to-Value Ratio for the Property based on the
Allocated Loan Amount of such Property (on the basis of an Appraisal at
Borrower’s expense obtained by Agent in connection with the Restoration) to be
no greater than the lesser of (A) the Loan-to-Value Ratio for the Property
immediately prior to such Casualty based on Allocated Loan Amount and (B) the
Loan-to-Value Ratio for the Property as of the Closing Date based on the
Allocated Loan Amount of such Property, and the Net Operating Income for such
Property with respect to the twelve (12) calendar month period immediately
following completion of Restoration and based on Agent’s estimate of Gross
Revenues for such Property to be received and Operating Expenses for such
Property to be incurred during such twelve (12) calendar month period
calculated, as projected by Agent, as of the date of Restoration is completed be
no less than Net

 

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Operating Income for such Property with respect to the
twelve (12) calendar month period immediately prior to the occurrence of the
Casualty calculated as of the date the Casualty occurs.

 

(ii)                                  Notwithstanding
Section 8.12(d)(i) hereof, if Agent does not elect to hold the
Net Proceeds, Borrower shall not disburse any Net Proceeds other than in
accordance with the conditions of this Section 8.12(d) and Sections 8.12(e) and
8.12(f) hereof.

 

(iii)                               Notwithstanding anything
to the contrary herein, upon the Release of any Property pursuant to Section 2.17
hereof, Agent shall release any Net Proceeds applicable to such Property to
Borrower or Borrower may elect to reduce the Release Payment by the amount of
such Net Proceeds, which Net Proceeds shall then constitute a portion of the
Release Payment and be applied pursuant to Section 2.4(b) hereof.

 

(e)                                  If
one or more of the Release Conditions are not satisfied, all Net Proceeds shall
be applied in accordance with Section 8.14 hereof, provided,
that, if each of the Release Conditions shall have been satisfied except the
Release Condition set forth in Section 8.12(d)(i)(A) hereof as
a result of the occurrence of a Default (as opposed to the occurrence of an
Event of Default), Agent shall not so apply the Net Proceeds until such time,
if any, as an Event of Default shall have occurred.

 

(f)                                    All
reasonable costs and expenses incurred by Agent in connection with making the
Net Proceeds available for the Restoration (including reasonable attorneys’
fees and disbursements and reasonable fees and actual out-of-pocket expenses of
Agent’s construction consultants and inspectors) shall be paid by
Borrower.  Any Net Proceeds remaining
after the Restoration and the payment in full of all costs incurred in
connection with the Restoration, at Agent’s option, either will be distributed
by Agent to Borrower or applied as a mandatory prepayment of the Loan.

 

(g)                                 Business
interruption/rent loss insurance proceeds of Borrower shall be deposited into
either (i) an account or subaccount of Agent or (ii) an account at a
bank or other financial institution approved by Agent.  Provided no Default or Event of Default shall
have occurred and be continuing, such proceeds shall be applied to the payment
of Interest, principal due and payable under Section 2.4(d) hereof
and other sums that become due and payable under the Loan Documents as and when
due and then to operating expenses for such Property approved by Agent and in
such manner and upon such conditions as Agent shall determine.  Borrower hereby grants to Agent a security
interest in all rights of Borrower in and to such account and all sums on
deposit therein as additional security for the Obligations.  Upon the occurrence and during the
continuation of an Event of Default, Agent shall have the rights and remedies
with respect to such account specified in this Loan Agreement and in any other
Loan Document.  If held by Agent, the
credit balance in such account or subaccount may be commingled with the general
funds of Agent.  If not held by Agent,
Borrower shall cause the bank or financial institution at which such account is
held to execute and deliver to Agent an Account Agreement 

 

85

 

with respect to such account, Borrower shall pay all fees and costs
with respect thereto and Borrower shall not close such account without
obtaining the prior consent of Agent. 
Neither Agent nor Lenders shall be liable for any loss of interest on or
any penalty or charge assessed against the funds in, payable on, or credited to
such account as a result of the exercise by Agent of any of its rights,
remedies or obligations hereunder or under any other Loan Document.  Any interest earned on the balance of such
account shall be deposited into such account and be applied with the balance of
such account in accordance with this Section 8.12(g).  Agent shall have sole control over such
account.  Any business interruption/rent
loss insurance proceeds remaining after completion of the Restoration shall be
distributed to Borrower or, if an Event of Default has occurred and is
continuing, at Agent’s election, deposited in the Lockbox Account.

 

SECTION 8.13.           Taking of the Mortgaged
Property.

 

(a)                                  Promptly,
and in any case within one (1) Business Day after the occurrence thereof,
Borrower shall notify Agent of any Taking of any portion of any Mortgaged
Property or the commencement of any proceedings or negotiations which might
result in such a Taking.  Such notice
shall generally describe the nature and extent of such Taking or the nature of
such proceedings or negotiations and the nature and extent of the Taking which
might result therefrom.  Agent shall be
entitled hereunder to all awards or compensation payable on account of a
Taking.  Borrower hereby irrevocably
assigns, transfers and sets over to Agent all rights of Borrower to any such
awards or compensation and irrevocably authorizes and empowers Agent, in the
name of Borrower or otherwise, to collect and receipt for any such award or
compensation and delegate to Agent the right to file and prosecute any and all
claims for any such awards or compensation and to participate in any and all
hearings, trials and appeals in connection with a Taking on behalf of
Borrower.  Agent may participate in such
proceedings or negotiations and Borrower will deliver or cause to be delivered
to Agent all instruments requested by Agent to permit such participation; provided,
however, that Agent shall be under no obligation to question the amount
of the award or compensation.  Although
it is hereby expressly agreed that the same shall not be necessary, and in any
event, Borrower shall, upon demand of Agent, make, execute and deliver any and
all assignments and other instruments sufficient for the purpose of assigning
any such award or compensation to Agent, free and clear of any encumbrances of
any kind or nature whatsoever.  Agent may
be represented by counsel satisfactory to it at the expense of Borrower.  Borrower will pay promptly after demand all
costs and expenses (including attorneys’ fees and disbursements and any
appraiser or other consultant) incurred by Agent in connection with any Taking
and seeking and obtaining any award or payment on account thereof.

 

(b)                                 Borrower
shall, at its sole cost and expense, promptly commence and diligently and
continuously perform to completion the Restoration in a good and workmanlike
manner and in compliance with all Legal Requirements and the requirements of
the Permitted Encumbrances, whether or not Borrower shall have satisfied the
Release Conditions in order to cause the Net Restoration Award to be made
available for such Restoration and whether or not such awards or compensation,
if any, on account of the Taking shall be sufficient for such purpose.

 

(c)                                  All
Net Restoration Awards shall be held by Agent at its election.  All Net Restoration Awards shall be applied
as follows:

 

86

 

(i)            If the Release Conditions are
satisfied, and the Taking is not a Material Taking, all Net Restoration Awards
shall be applied to pay the cost of Restoration, such application to be
effected in the same manner as provided in Section 8.12(d) hereof
with respect to Net Proceeds and the balance, if any, of such Net Restoration
Awards shall, at the option of Agent, be applied as a prepayment of the
principal amount of the Loan or be paid over or assigned to Borrower following
completion of the Restoration.

 

(ii)           If the Taking is a Material Taking,
or one or more of the Release Conditions are not satisfied, all Net Restoration
Awards shall be applied in accordance with Section 8.14 hereof.

 

(iii)          In the case of a Taking for temporary
use, any Net Restoration Awards shall be deposited by Agent into the Cash Flow
Collection Account; and

 

(iv)          Notwithstanding anything to the
contrary in this Section 8.13, in the event that Borrower elects to
have a Property released and Agent is holding Net Proceeds in connection with
the Taking of such Property, Agent shall release such Net Proceeds to Borrower
upon payment of the Release Payment or Borrower may elect to reduce the Release
Payment by the amount of such Net Proceeds, which Net Proceeds shall then
constitute a portion of the Release Payment and be applied pursuant to Section 2.4(b) hereof.

 

SECTION 8.14.    Application of Proceeds of Casualty or
Taking to Loan; Loan Repayment.  Upon a
Casualty, if the disposition of the Net Proceeds is governed by Section 8.12(e) hereof
or upon a Taking, if the disposition of the Net Restoration Awards is governed
by Section 8.13(c)(ii) hereof, Agent shall have the option to (a) make
available the Net Proceeds or the Net Restoration Awards, as the case may be,
to Borrower for Restoration in the manner provided in Section 8.12(d) hereof
or (b) apply the Net Proceeds and/or the Net Restoration Awards to the
Obligations, in such order and manner as Agent determines, as the case may be.

 

SECTION 8.15.    Costs and Expenses. 
Without limiting any other provision of this Loan Agreement or of any
other Loan Document, Borrower shall pay within ten (10) days after demand
by Agent, to or for the account of Agent as the case may be, Agent’s Counsel
Fees and all other reasonable costs and expenses incurred by or on behalf of
Agent and/or Lenders in connection with the closing of the Loan, including any
out-of-pocket costs associated with the syndication of the Loan, any
prepayments of the Loan, Agent’s responses to requests for consents, approvals
and waivers under the Loan Documents, including the review and approval of all
proposed Leases, all Disbursements, all payments from any accounts, any
modification, amendment or restructuring of the Loan or the Loan Documents
(regardless if such modification, amendment or restructuring closes), any
agreement or document requested by Borrower from Agent or the Lenders,
including any subordination, non-disturbance and attornment agreements for
Leases, and the enforcement of Agent’s and Lenders’ rights and remedies under
the Loan Documents, intercreditor agreements and other agreements relating to
the Loan, Borrower or the Collateral or otherwise at law or equity, or with
respect to any and all other aspects of the transactions contemplated herein or
in any other Loan Document, including the following, whether currently
outstanding or which may arise at any time during the term of the Loan:

 

87

 

(a)   all taxes
and recording expenses, including all filing fees and mortgage recording and
deed transfer taxes, with respect to the Security Documents, and any other
documents modifying, extending or consolidating the Security Documents;

 

(b)   in the
event any Mortgaged Property or other Collateral, or any part thereof, shall be
advertised for foreclosure sale and not sold, all out-of-pocket costs in
connection therewith, including attorneys’ fees and disbursements, advertising
costs and trustees’ commissions;

 

(c)   all
reasonable, out-of-pocket fees of any construction consultant and other
construction monitoring expenses;

 

(d)   all title
insurance charges and premiums;

 

(e)   all survey,
investigation, insurance and, subject to the provisions hereof, appraisal,
reasonable fees and expenses and all costs of preparing environmental, engineering
and insurance reports concerning any Property if after closing; and

 

(f)    all
reasonable fees and out-of-pocket expenses incurred by Agent and the Lender as
of the Closing Date in connection with the syndication of the Loan.

 

SECTION 8.16.    Transfers.

 

(a)           No Transfer shall be made without
Agent’s prior consent, except for Permitted Transfers provided that:

 

(i)            other than in the case of any
Permitted Guarantor Transfer, no Event of Default shall have occurred and be
continuing as of the date of such Permitted Transfer;

 

(ii)           with respect to Transfers of direct
and indirect interests in Borrower and Borrower GP, other than in the case of
any Permitted Guarantor Transfer, Borrower shall have given Agent notice within
ten (10) Business Days following the Transfer, which notice shall (y) identify
the transferee(s) and the percentage interest transferred and (z) include
the following items:

 

(A)          a revised organizational chart of
Borrower which shall show the effect of such proposed Transfer, which organizational
chart shall be in the same form, detail and scope as the Borrower’s
organization chart delivered on the Closing Date;

 

(B)           in the event the transferee(s) is
an entity, a good standing certificate;

 

(C)           a copy of all consents, notices,
instruments of transfer and other documents required to be executed or
delivered under the organizational documents of the entity whose ownership
interests are being transferred, along with (but without limiting Section 8.21
hereof) any amendment to the organizational documents of the entity whose
ownership interests are being

 

88

 

transferred, any consent of the members, partners,
shareholders, as applicable, of the entity whose ownership interests are being
transferred, and any other instrument of transfer which is entered into or
delivered in connection with any such transfer; and

 

(D)          such information as may be reasonably
requested by Agent in order to evidence Borrower’s compliance with Sections 8.21
and 8.34 hereof; and

 

(iii)          the proposed Transfer shall not result
in Borrower, the transferor or the proposed transferee being in default under
any Loan Document or under any other agreement, instrument, document or
understanding of which any of the foregoing Persons is a party;

 

(iv)          all taxes (other than income taxes),
including, stamp taxes, mortgage recording taxes, transfer taxes, recordation
taxes, intangible taxes and other taxes, charges and fees incurred in
connection with such Transfer shall have been paid by the transferor or the
proposed transferee at the time of such proposed transfer, and if such amounts
shall become due as a result of the proposed transferor’s or transferee’s
direct or indirect ownership interest in the Borrower or any Property, evidence
of such payment shall have been delivered to Agent within ten (10) days
after such transfer; and

 

(v)           Agent shall have been reimbursed for
any and all out-of-pocket expenses incurred by Agent, if any, in connection
with such proposed transfer, including attorneys’ fees and disbursements.

 

(b)           Without
limiting Section 8.16(a) hereof and except for a Release
pursuant to Section 2.17 hereof, Borrower shall not assign, sell,
pledge, encumber, transfer, hypothecate or otherwise dispose of its interest or
rights in the Loan, the Loan Documents or the Collateral, or attempt to do any
of the foregoing or suffer any of the foregoing, nor shall any party owning a
direct or indirect interest in Borrower assign, sell, pledge, encumber,
transfer, hypothecate or otherwise dispose of any of its rights or interest
(direct or indirect) in Borrower, attempt to do any of the foregoing or suffer
any of the foregoing, if such action would cause the Loan, or the exercise of
any of Agent’s, or Lenders’ rights in connection therewith, to constitute a
prohibited transaction under ERISA or the IRC (unless Borrower furnishes to
Agent a legal opinion reasonably satisfactory to Agent that the transaction is
exempt from the prohibited transaction provisions of ERISA and the IRC) or
otherwise result in Agent or any Lender being deemed in violation of any
applicable provision of ERISA.  Borrower
agrees to indemnify and hold Agent and Lenders free and harmless from and
against all losses, costs (including reasonable attorneys’ fees and expenses),
taxes, damages (including consequential damages) and expenses Agent or any
Lender may suffer by reason of the investigation, defense and settlement of
claims and in obtaining any prohibited transaction exemption under ERISA
necessary or desirable in Agent’s sole judgment or by reason of a breach of the
foregoing prohibitions.

 

SECTION 8.17.    Defense of Title. 
Borrower will do all things necessary or proper to defend title to the
Mortgaged Properties and the other Collateral, subject to the Permitted Encumbrances,
but Agent shall have the right, at any time, to intervene in any suit

 

89

 

affecting such title and to employ independent counsel in connection
with any such suit to which it may be a party by intervention or otherwise; and
upon demand, Borrower agrees to pay Agent all reasonable expenses paid or
incurred by Agent in respect of any such suit affecting title to any such
property or affecting Agent’s lien or rights hereunder, including Agent’s
Counsel Fees.  Borrower will indemnify
and hold harmless Agent from and against any and all costs and expenses,
including any and all cost, loss, damage or liability which Agent may suffer or
incur by reason of the failure of the title to all or any part of the Mortgaged
Properties or security interest in the Collateral or by reason of the failure
or liability of Borrower, for any reason, to convey or grant a security
interest in the rights, titles and interests which the Mortgages or other
Security Documents purport to mortgage, assign, pledge or grant a security
interest in, and all amounts at any time so payable by Borrower shall be
secured by the Security Documents.

 

SECTION 8.18.    Recordation and Certain Taxes.  Borrower, at its sole cost and expense, shall at all
times cause the Mortgages, Financing Statements and any other Security Document
to be recorded, registered or filed in the public records, and any amendments
or supplements hereto and thereto, and, if requested by Agent, any instruments
of assignment hereof or thereof, to be recorded, registered and filed, as
applicable, and to be kept recorded, registered and filed, in such manner and
in such places, shall pay all recording, registration and filing fees and taxes
and other charges, including any recording, transfer or intangible personal
property tax or similar imposition, with respect thereto, and shall comply with
all Legal Requirements in order fully and effectively to establish, preserve,
perfect and protect the lien of the Security Documents subject only to
Permitted Encumbrances.  Borrower hereby
authorizes Agent to file financing and continuation statements with respect to
the Collateral.

 

SECTION 8.19.    Name, Loan Year and Accounting Method. 
Borrower shall not change its fiscal year, its method of accounting, its
name, or its principal place of business or chief executive office in each case
without providing at least five (5) days notice to Agent prior
thereto.  Borrower shall not use to use
any trade name or do business under any name other than its actual name set
forth herein or in such notice to Agent.

 

SECTION 8.20.    Consolidation, Merger, Conveyance, Transfer
or Lease.  Without the prior consent of Agent, Borrower
shall not consolidate with or merge into any other Person or convey, transfer
or lease its properties or assets substantially as an entirety to any Person.

 

SECTION 8.21.    Organization Restrictions. 
Each of Borrower and Borrower GP shall at all times be a Special Purpose
Bankruptcy Remote Entity.  Without
limiting the foregoing, Borrower shall not engage in any business other than
that related to the acquisition, ownership, construction, management,
development, financing, leasing, sale, maintenance, marketing and operation of
the Premises in accordance with the terms of the Loan Documents.  Borrower shall not directly or indirectly
make or permit any change, amendment or modification to the Borrower
Partnership Agreement or other organizational document of Borrower or any
Borrower GP, and such documents shall not be terminated or cancelled, without
the prior consent of Agent.  Borrower
shall not directly or indirectly take or permit any action which could result
in Borrower or Borrower GP not being a Special Purpose Bankruptcy Remote
Entity.

 

90

 

SECTION 8.22.    Changes in Zoning. 
Borrower shall not request or seek to obtain any change to, or consent
to any request for or change in, any Legal Requirement, restrictive covenant or
other restriction applicable to any Property, or any other law, ordinance,
rule, regulation, restrictive covenant or restriction affecting the zoning,
development or use of any Property, or any variance or special exception
therefrom, without the prior consent of Agent; provided, however, that in the
event that a Lessee is permitted pursuant to the terms of a Qualified Lease to
do any of the foregoing, and such Qualified Lease requires Borrower to
cooperate with such Lessee to effect the foregoing, such cooperation of
Borrower without Agent’s consent shall not violate this Section 8.22
so long as Borrower gives prompt notice thereof to Agent.

 

SECTION 8.23.    Name; Principal Place of Business.  Borrower does not use nor will Borrower use
any trade name and has not done nor will it do business under any name other
than Borrower’s actual name set forth herein. 
The principal place of business and chief executive office of Borrower
is and will remain as stated in the first paragraph of this Loan Agreement.

 

SECTION 8.24.    Limitation on Indebtedness. 
Borrower shall not incur, create, contract for, waive, assume, have
outstanding, guarantee or otherwise become liable with respect to Indebtedness
other than Permitted Indebtedness.

 

SECTION 8.25.    Distributions, Dividends and Affiliate
Payments.

 

(a)           Borrower
shall not directly or indirectly make or allow to be made any dividends,
payments or distributions to any direct or indirect owner of any interest in
Borrower or any Affiliate of Borrower (i) at any time that a Cash Sweep
Condition shall have occurred and be continuing, (ii) at any time that a
First Tier Default or an Event of Default shall have occurred and be
continuing, (iii) with respect to amounts paid to any Affiliate of
Borrower pursuant to Operating Agreements, unless (x) the relationship of
the Affiliate to Borrower has been disclosed in writing to Agent, (y) the
terms of all agreements and arrangements are in writing, and (z) Agent
shall have consented to same, which consent shall not be unreasonably withheld
so long as such agreement or arrangement is for the provision of goods and
services in the ordinary course of Borrower’s business, is on fair and
reasonable terms and is no more onerous to Borrower than Borrower would obtain
in a comparable arm’s length transaction with a Person not its Affiliate, or (iv) dividends,
payments or distributions are otherwise prohibited pursuant to Section 8.30
hereof.  Notwithstanding clause (ii) above,
(y) so long as no Cash Sweep Condition (and without regard as to whether a
First Tier Event of Default or Event of Default) shall have occurred and be
continuing, Borrower may make distributions to Borrower Partners for
distribution, in turn, to Guarantor (or to the Affiliates of Guarantor owned by
Guarantor) in the event that, a failure of Borrower to make such distribution
would result in the failure of Guarantor (or any Affiliate thereof) to make any
distribution required to made to such Guarantor’s (or Affiliate’s) shareholders
in order for Guarantor and any intermediate holding companies of Guarantor
between Guarantor and Borrower to maintain its tax status as a “real estate
investment trust” under applicable Legal Requirements, and (z)  so long as
no First Tier Default or Event of Default has occurred and is continuing,
Borrower may make payments to Asset Manager and other Affiliates of Borrower
pursuant to Operating Agreements shall be permitted, subject to the Cash
Management Agreement.

 

91

 

SECTION 8.26.    ERISA.  Borrower shall
not at any time have any employees or engage in any transaction which would
cause any obligation or action taken or to be taken hereunder by Borrower to be
a non-exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA.  Borrower (i) shall,
and shall cause all ERISA Affiliates to make all required contributions to any
Pension Plan or Multiemployer Plan, and (ii) shall not, nor shall it
permit any ERISA Affiliate to, cause or permit to occur an event that could
result in the imposition of a Lien under IRC Section 412 or Section 302
or 4068 of ERISA, or any ERISA Event that could reasonably be expected to,
alone or in the aggregate with all other ERISA Events, result in a material
liability.

 

SECTION 8.27.    Maintenance of Existence. 
Each of Borrower and any Borrower Partner (if not an individual) shall (a) qualify
to do business in and remain in good standing under the laws of its
jurisdiction of organization and Borrower shall qualify to do business in the
States where the Properties are located and, to the extent required for the ownership,
management and operation of its assets, any other jurisdiction, (b) preserve,
renew and keep in full force and effect its existence as an entity organized
and existing pursuant to the laws of its jurisdiction of organization and
qualified to do business in the States where the Properties are located, (c) take
all action to maintain all rights, privileges and franchises necessary or
desirable for the conduct of its business in its jurisdiction of organization
and the States where the Properties are located, and, to the extent required
for the ownership, management and operation of its assets, any other
jurisdiction, and (d) comply with all Legal Requirements with respect to
the foregoing.

 

SECTION 8.28.    Subsidiaries and Joint Ventures. 
Borrower shall not acquire any stock or assets of, or form a
partnership, joint venture or other similar arrangement with, any Person,
without Agent’s prior consent.

 

SECTION 8.29.    Loans to Members, Etc. 
Borrower shall not make any loan or advance to any Borrower Partner or
to any employee or Affiliate of Borrower, except for business travel,
out-of-pocket incidental personal business expenses and similar advances in the
ordinary course of business.

 

SECTION 8.30.    Transactions with Affiliates. 
Borrower shall not enter into, or be a party to, any transaction with
any Affiliates of Borrower except contracts for the providing of goods and
services in the ordinary course of Borrower’s business and upon fair and
reasonable terms which are fully disclosed to Agent and are no more onerous to
it than it would obtain in a comparable arm’s length transaction with a Person
not its Affiliate.

 

SECTION 8.31.    Adverse Contracts.  Borrower shall not enter into any contract or
agreement which has had or would reasonably be expected to have a Material
Adverse Effect and as pertaining to the Properties, as to all of Properties,
considered in their entirety.

 

SECTION 8.32.    Utilities.  Except to the
extent the obligation of a Lessee under any Qualified Lease, Borrower shall
pay, or cause to be paid, all charges for all utility services at any time
rendered to, or the payment of which is the obligation of, Borrower in
connection with, the Properties, and will do all other things required for the
maintenance and continuance of utility services necessary for the operation,
use and occupancy of the Properties, for their

 

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intended purposes in accordance with this Loan
Agreement, and ensure that they are available at the boundaries of the Properties.

 

SECTION 8.33.    Margin Stock.  Borrower shall
use the proceeds of the Loan solely for the purposes set forth in Section 2.1
hereof.  Without limiting the foregoing,
Borrower shall not use any of the proceeds of the Loan for the purpose of
purchasing or carrying “margin stock” within the meaning of Regulation T,
U or X issued by the Board of Governors of the Federal Reserve System, as at
any time amended, and Borrower agrees to execute all instruments necessary to
comply with all the requirements of Regulation U of the Federal Reserve
System, as at any time amended.

 

SECTION 8.34.    Patriot Act Compliance. 
Borrower shall comply with the Patriot Act and all applicable
requirements of governmental authorities having jurisdiction over Borrower and
any Property, relating to money laundering and terrorism.  Agent shall have the right to audit Borrower’s
compliance with the Patriot Act and all applicable requirements of governmental
authorities having jurisdiction over Borrower and any Property, including those
relating to money laundering and terrorism. 
In the event that Borrower fails to comply with the Patriot Act or any
such requirements of governmental authorities, then Agent may, at its option,
cause Borrower to comply therewith and any and all costs and expenses incurred
by Agent in connection therewith shall be secured by the Loan Documents and
shall be payable on demand and shall accrue interest at the Default Rate from
the date paid or incurred by Agent until paid to Agent.

 

SECTION 8.35.    Mezzanine Loan Documents. 
Without the consent of Agent, Borrower shall not permit the amendment,
modification, supplement, waiver, termination, cancellation or surrender of the
Mezzanine Loan Documents or any documents entered into in connection with a
Parent Loan, or the rights of any Borrower Partner thereunder to the extent
that any such amendment, modification, supplement, waiver, termination,
cancellation is reasonably anticipated to cause a Material Adverse Effect and
to the extent Agent advises Borrower that such amendment, modification,
supplement, waiver, termination or cancellation could reasonably contravene the
Mezzanine Loan Intercreditor Agreement or any other agreements between Agent
and/or Lenders and Mezzanine Lender.

 

SECTION 8.36.    Post-Closing Obligations.  Within thirty
(30) days of the Closing Date, each of the following:

 

(a)           an acknowledgment from Wachovia that
Agent and Lenders are the Designated Portfolio Lender and to the extent same
can be procured through the use of diligent efforts; and

 

(b)           a subordination,
nondisturbance and attornment agreement, in each case reasonably acceptable to
Agent with respect each of the Excluded Leases and to the extent same can be
procured through the use of  commercially
reasonable efforts.

 

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ARTICLE IX

 

EVENTS OF DEFAULT

 

SECTION 9.1.      Events of Default. 
The following shall each constitute an “Event of Default”
hereunder:

 

(a)   the failure
of Borrower to pay when due (i) the principal of and accrued, unpaid
interest on the Note, whether upon the Maturity Date or any earlier date when
due, (ii) any payment or deposit required pursuant to Sections 2.4,
2.7, 2.16, 2.18 and 3.6 hereof or (iii) any
Interest or Additional Interest.

 

(b)   the failure
of Borrower (i) to pay within five (5) days after same is due any
payment on account of any fees when due under the Loan Fee Letter, or (ii) to
pay when due any other monetary Obligations, excluding those referred to in clause (a) of
this Section 9.1 on or before the due date therefor and such
failure described in this subclause (ii) continues for five (5) days
after notice from Agent of the non-payment thereof;

 

(c)   Borrower
shall fail in the due performance or observance of any covenant, agreement or
term binding upon Borrower contained in this Loan Agreement, other than those
covenants, agreements or terms which Borrower’s failure to perform would
constitute another Event of Default referred to in this Section 9.1,
and such failure shall continue unremedied for more than thirty (30) days after
notice thereof shall have been given to Borrower by Agent; provided, however,
that if such failure is of a nature such that it cannot be cured by the payment
of money and if such failure requires work to be performed, acts to be done or
conditions to be removed which cannot by their nature, with due diligence, be
performed, done or removed, as the case may be, within such thirty (30) day
period and Borrower shall have commenced to cure such failure within such
thirty (30) day period, such period shall be deemed extended for so long as
shall be required by Borrower in the exercise of due diligence to cure such
failure, but in no event shall such thirty (30) day period be so extended to be
a period in excess of one hundred and five (105) days;

 

(d)   any “Event
of Default” or any other default shall occur, and shall continue beyond the
applicable grace period, if any, provided for therein, under any of the Loan
Documents (other than this Loan Agreement, such a default being the subject of
other provisions of this Section 9.1), including an “Event of
Default” under any Mortgage;

 

(e)   any
material warranty, representation or certification made by or on behalf of
Borrower or Guarantor in or pursuant to this Loan Agreement or any other Loan
Document or any document, instrument or certificate heretofore or hereafter
executed or delivered in connection herewith or therewith shall prove to have
been incorrect or misleading in any material respect when made or deemed to
have been made; provided, however, that as to any such false or misleading
representation, warranty, acknowledgement or statement which was
unintentionally submitted to Lender and which can be made true and correct by
action of Borrower, Borrower shall have a period of 

 

94

 

thirty (30) days following written notice thereof to Borrower to
undertake and complete all action necessary to make such representation,
warranty, acknowledgement or statement true and correct in all material
respects;

 

(f)    [Intentionally
Deleted];

 

(g)   [Intentionally
Deleted];

 

(h)   [Intentionally
Deleted];

 

(i)    any
material default by Borrower shall occur and shall continue, beyond any
applicable grace period provided for therein, under any Property Document or
any Management Agreement to the extent same has or would reasonably be expected
to have a Material Adverse Effect;

 

(j)    any
Property Document or any Asset Management Agreement is amended, modified or
terminated without the prior consent or prior approval of Agent, to the extent
such consent or approval is required pursuant to this Loan Agreement;

 

(k)   any default
by Borrower shall occur and shall continue, beyond any applicable grace period
provided for therein, under any Interest Rate Protection Agreement;

 

(l)    Borrower,
any Borrower Partner or Guarantor shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution
of, or fail to contest in a timely and appropriate manner, any such proceeding
or petition, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for Borrower,
any Borrower Partner or Guarantor or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

 

(m)  an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect
of Borrower, any Borrower Partner or Guarantor or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Borrower, any Borrower Partner or Guarantor or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for ninety (90) days or an order or decree
approving or ordering any of the foregoing shall be entered;

 

(n)   Borrower
shall fail in the due performance and observance of any of its covenants
contained in Sections 2.7, 2.16, 2.18, 2.19, 2.20,
3.6, 8.1 through 8.4, 8.6, 8.7, 8.9
through 8.13, and 8.16 through 8.36 hereof;

 

95

 

(o)   there shall
have been rendered (i) against Borrower a final, non-appealable judgment(s) for
the payment of money in excess of $2,000,000 in the aggregate or (ii) against
Borrower a final, non-appealable judgment for the payment of money in excess of
$2,000,000, and in each case any such judgment(s) shall have continued
unsatisfied for a period of thirty (30) days after the entry of such
judgment(s);

 

(p)   there shall
have been rendered against Guarantor, a final, non-appealable judgment(s) for
the payment of money in excess of $10,000,000 in the aggregate, and in each
case any such judgment(s) shall have continued unsatisfied for a period of
thirty (30) days after the entry of such judgment(s);

 

(q)   Borrower or
Guarantor shall have incurred any liability, or an event or action shall have
occurred that could reasonably be expected to cause Borrower or Guarantor to
incur any liability, (x) with respect to any Pension Plan, including any
liability under Section 412 of the IRC or Title IV of ERISA, or (y) on
account of a partial or complete withdrawal (as such terms are defined in Section 4203
and 4205 of ERISA, respectively) from, unpaid contributions to, or the
reorganization, termination or insolvency of, any Multiemployer Plan, or (ii) Borrower
or Guarantor shall have engaged in any transaction in connection with which
Borrower or Guarantor could be subject to either a material civil penalty
assessed pursuant to the provisions of Section 502 of ERISA or a material
tax imposed under the provisions of Section 4975 of the IRC, and in each
case in subclauses (i) and (ii) of this clause (r),
such event or condition, together with all other such events or conditions
under this clause (r), if any, could reasonably be expected to have
a material adverse effect upon the Collateral or the business, operations,
properties, assets, condition (financial or otherwise), prospects or
performance of Borrower or Guarantor that would materially and adversely affect
the Collateral or Borrower’s or Guarantor’s ability to perform its respective
obligations hereunder or under any other Loan Document or which would
materially and adversely impair the ability of Agent to enforce or collect any
of the Obligations.

 

SECTION 9.2.      Acceleration of Loan.  In addition to any other rights and remedies which
Agent and Lenders may have under this Loan Agreement and the other Loan
Documents or pursuant to law or equity, and without limitation thereof, upon
and at any time during the occurrence of any Event of Default, Agent may, by
notice to Borrower, declare the indebtedness evidenced by the Note, together
with all other sums payable thereunder and under the other Loan Documents,
immediately due and payable (except with respect to any event of the nature
described in Section 9.1(l) or (m) hereof, with
respect to which such indebtedness and other sums shall automatically become
due and payable upon the occurrence of any such event) and may exercise Agent’s
rights and remedies pursuant to any one or more of the Security Documents, the
other Loan Documents or as may be available at law or equity.  Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing, (i) to
the extent permitted by applicable law, Agent and Lenders shall not be subject
to any “one action” or “election of remedies” law or rule, and (ii) unless
released as provided herein, all Liens and other rights, remedies or privileges
provided to Agent and Lenders shall remain in full force and effect until Agent
has exhausted all of its remedies against the Properties, the Mortgages have
been foreclosed, the Properties have been sold and/or otherwise realized upon
in satisfaction of the Obligations or the Obligations have been paid in full.  To the extent permitted 

 

96

 

by applicable law, nothing contained in any Loan Document shall be
construed as requiring Agent or Lenders to resort to any particular Property or
any portion of any Property for the satisfaction of any of the Obligations in
preference or priority to any other portion, and Agent and Lenders may seek
satisfaction out of all or less than all of the Properties or any part of any
Property, in their discretion.

 

SECTION 9.3.              [Intentionally Deleted]

 

SECTION 9.4.              Agent’s Right to Complete; Sums
Advanced.

 

(a)           Agent’s Right to Complete.  At any time upon the occurrence
and during the continuance of any Event of Default, Agent shall have the right,
in addition to any other rights or remedies of Agent hereunder or under the
Mortgages or the other Loan Documents, but not the obligation, in its own name
or in the name of Borrower, to enter into possession of all or any portion of
any Property, to perform all work necessary to complete the construction,
reconstruction, maintenance or renovation of or to operate all or any portion
of such Property and to employ watchmen and other safeguards to protect the
Collateral.  Borrower hereby appoints
Agent as the attorney-in-fact of Borrower (coupled with a interest), with full
power of substitution, and in the name of Borrower, if Agent elects to do so,
at any time upon the occurrence and during the continuance of any Event of
Default, (i) to use such sums as are necessary including all or any portion
of the funds in the Accounts to make such alterations, repairs, replacements
and renovations to all or any portion of any Property and to employ such
architects, engineers and contractors as may be required for the purpose of
completing any construction, reconstruction, maintenance or renovation of all
or any portion of any Property as Agent may determine or to operate such
Property or any portion thereof, (ii) to execute all applications and
certificates which may be required for the alteration, repair or renovation of
or the completion of construction, reconstruction, maintenance or renovation of
all or any portion of the Tenant Improvements, such Property or for the
operation of such Property or any portion thereof, (iii) to endorse the
name of Borrower on any checks or drafts representing proceeds of the Insurance
Policies or condemnation awards, or other checks or instruments payable to
Borrower with respect to such Property, (iv) to do every act with respect
to the alteration, repair or renovation of or the construction, repair,
maintenance and operation of such Property or any portion thereof which
Borrower otherwise may do, (v) to prosecute or defend any action or
proceeding incident to such Property, (vi) to enforce or exercise any of
Borrower’s rights or benefits under the Leases, (vii) to terminate any
contract pertaining to such Property to which Borrower is party, (viii) to
negotiate and execute, on behalf of Borrower, any Lease, Asset Management
Agreement, Operating Agreement or Property Documents, or amendment,
modification, extension or supplement to any such agreements, and (ix) complete
construction of the Tenant Improvement and Tenant Improvement Allowances, or to
discontinue any such work or the payment of allowances.  The power-of-attorney granted hereby is a
power coupled with an interest and is irrevocable.  Agent shall have no obligation to undertake
any of the foregoing actions, and if Agent should do so, it shall have no
liability to Borrower for the sufficiency or adequacy of any such actions taken
by Agent, except with respect to liability arising from Agent’s gross
negligence or willful misconduct.

 

Notwithstanding the foregoing, it is expressly
understood that Agent assumes no liability or responsibility for (x) performance
of any duties of Borrower hereunder or under any 

 

97

 

of the Loan Documents, (y) compliance with any
applicable Legal Requirements, Property Document, any Permitted Encumbrance,
any Lease or the Asset Management Agreement, or (z) any other matters
pertaining to control over the management and affairs of Borrower, nor by any
such action shall Agent or Lenders be deemed to create a partnership or joint
venture with Borrower.

 

(b)           Sums Advanced. 
Borrower shall be liable to Agent for all sums paid or incurred in
connection with the construction of any Property whether the same shall be paid
or incurred pursuant to the provisions of this Section 9.4 or
otherwise, and all other payments made or liabilities incurred by Agent under
this Loan Agreement of any kind whatsoever, all of which shall be paid by
Borrower to Agent upon demand with interest at the Default Rate from the time
incurred by Agent to the date of payment to Agent, and all of the foregoing
sums, including such interest at the Default Rate, shall be deemed and shall
constitute disbursements of Loan proceeds under this Loan Agreement and be
evidenced by the Note and secured by the Security Documents.

 

SECTION 9.5.      Assignment of Funds. 
Upon the occurrence and during the continuance of any Event of Default,
the rights, powers and privileges provided in Sections 11.3 and 11.4
hereof and all other remedies available to Agent under this Loan Agreement or
the other Loan Documents or by statute or by rule of law or equity may be
exercised by Agent at any time and from time to time whether or not the
Obligations shall be due and payable, and whether or not Agent shall have
instituted any foreclosure or other action for the enforcement of any of the
Security Documents, the Note or the other Loan Documents.  Borrower hereby assigns and quitclaims to
Agent all right, title and interest of Borrower to all sums held in the
Accounts and to the extent not held in an account, all sums held by Agent for
the account of Borrower and any other security delivered by Borrower as
additional security (a security interest in all of the foregoing being granted
hereby to Agent) for the Loan and the performance by Borrower of its
obligations under the Loan Documents, all of which security may be utilized by
Agent for the purposes set forth in Sections 11.3 and 11.4
hereof or the other Loan Documents or applied against the Obligations in such
order and manner as Agent shall determine.

 

SECTION 9.6.      Accounts. 
Notwithstanding anything to the contrary contained herein, after the
occurrence and during the continuance of an Event of Default, the rights of
Borrower and each and every other Person (excluding Agent) with respect to
Accounts, upon notice to Borrower, shall immediately terminate, and no such
Person except Agent shall make any further withdrawal therefrom.  Thereafter, Agent may from time to time
designate such signatories with respect to the Accounts as Agent may desire,
and may make or authorize withdrawals from the Accounts to pay the Obligations
in whole or in part and/or pay operating expenses and capital expenditures with
respect to the Properties, including the sale, leasing and marketing thereof,
and/or any other expenses, all as Agent may deem necessary or appropriate and
in such order as Agent may elect.  Agent
may notify the financial institutions in which any Account is held that
Borrower no longer has a right to instruct such financial institution with
respect to matters relating to the withdrawal, operation or administration of,
or investment or application of funds on deposit in such Account.  Without limiting the foregoing Agent shall
have the right to cause the withdrawal of all funds on deposit in any Account
and the deposit of such funds in an account established with Agent at any time
following receipt by the financial institution in which such Account is held of
a notice from Agent pursuant to the Account 

 

98

 

Agreement with respect to such Account, and Borrower hereby authorizes
and directs such financial institutions to make payment directly to Agent of
the funds in or credited to such accounts, or such part thereof as Agent may
request.  Such financial institution
shall have the absolute right to rely upon such notice without inquiring as to
the accuracy of the matters referred to in such notice and the depositories
shall be fully protected by Borrower in relying upon such written notice from
Agent.  In the event that Agent delivers
such a notice, Agent shall thereafter have the exclusive right to so instruct
such financial institution.  Nothing in
this Section 9.6 shall be construed so as to limit or impair Agent’s
absolute right to have a receiver appointed following an Event of Default.

 

SECTION 9.7.      No Liability of Agent or Lenders. 
Whether or not Agent elects to employ any or all of the remedies
pursuant to the Loan Documents or otherwise available to it at law or equity
upon the occurrence of a Default or an Event of Default, neither Agent nor
Lenders shall be liable for or with respect to any rights or obligations of
Borrower or its Affiliates, including the rights and obligations of Borrower
in, to or under any Permitted Encumbrance, any Lease, the Asset Management
Agreement or to protect such Property or the Collateral, or for payment of any
expense incurred in connection with the exercise of any remedy available to
Agent or for the performance or non-performance of any other obligation of
Borrower.  It is expressly understood
that Agent and Lenders assume no liability or responsibility for (a) performance
of any obligations or duties of Borrower hereunder or under any of the other
Loan Documents, any Leases, any Permitted Encumbrance, the Asset Management
Agreement or, (b) compliance with any Legal Requirements, or (c) any
other matters pertaining to control over the management and affairs of Borrower
or the use, operation, management or ownership of such Property or the
Collateral, nor by any such action shall Agent or any Lender be deemed to
create a partnership or joint venture with Borrower.

 

SECTION 9.8.      Asset Management Agreement. 
Upon the occurrence and during the continuance of any First Tier Default
or an Event of Default, in addition to any other rights or remedies of Agent
hereunder or under the other Loan Documents, Agent may terminate the Asset
Management Agreement entered into with any Affiliate of Borrower and/or may
require that Borrower terminate the Asset Management Agreement.

 

SECTION 9.9.      Right of Offset. 
Borrower hereby grants to Agent and Lenders a right of offset, to secure
the repayment of the Obligations, upon any and all monies, securities or other
property of Borrower, and the proceeds therefrom, now or hereafter held or
received by or in transit to Agent and any Lender, from or for the account of
Borrower, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, and also upon any and all deposits (general or special) and credits
of Borrower (including each Account), and any and all claims of Borrower
against Agent or any Lender at any time existing.  At any time during the continuance of an
Event of Default or following the maturity (whether by acceleration or
otherwise) of the Loan, Agent and each Lender is hereby authorized from time to
time, without notice to Borrower, to offset, appropriate, apply and enforce
said liens against any and all sums hereinabove referred to against the Loan
and the remaining Obligations and other sums due to Agent and Lenders under the
Loan Documents.  Agent and Lenders shall
not be liable for any loss of interest on or any penalty or charge assessed
against funds in, payable on, or credited to any Account as a result of the
exercise by Agent of any of its rights, remedies or obligations under any of
the Loan Documents.

 

99

 

SECTION 9.10.    Termination of Loan Agreement. 
The obligations of the parties hereunder, excluding those which
expressly survive the termination hereof or repayment of the Loan, shall
terminate only upon indefeasible repayment in full of the outstanding principal
amount of the Loan, together with all interest and other indebtedness due and
payable in connection therewith, and all other outstanding Obligations and sums
payable under the Loan Documents.  If the
Obligations and such other sums have been repaid and thereafter such all or any
portion of such payment is rescinded or must otherwise be returned or paid over
by Agent or any Lender, whether required pursuant to any bankruptcy or
insolvency law or otherwise, the Obligations and such sums and the obligations
of each party under the Loan Documents, shall continue.

 

SECTION 9.11.    Protective Advances.  If Borrower
has failed to keep or perform any covenant or obligation whatsoever contained
in any Loan Document, following any required notice to Borrower and the
expiration of any applicable cure period, in addition to any other rights or
remedies of Agent hereunder or under the other Loan Documents, Agent may, but
shall not be obligated to any Person to, perform or attempt to perform said
covenant or obligation, and any payment made or expense incurred in the
performance or attempted performance of any such covenant or obligation shall
be a part of the Obligations, and Borrower shall pay to Agent, upon demand, all
sums so advanced or paid by Agent, together with interest at the Default Rate
from the date when paid by Agent.  No
such payment by Agent shall constitute a waiver of any Event of Default.  In addition to the Liens created pursuant to
the Loan Documents, Agent shall be subrogated to all rights, titles and Liens
securing the payment of any debt, claim, tax or assessment for the payment of
which Agent may make an advance or which Agent may pay.

 

SECTION 9.12.    Interest Rate Protection Agreement.  Upon the
occurrence and during the continuance of any Event of Default, in addition to
any other rights or remedies of Agent hereunder or under the other Loan
Documents, Agent may exercise all rights and remedies of Agent as a secured
party with respect to the security interest of Agent or Lenders in any Interest
Rate Protection Agreement or which otherwise arise pursuant to the Loan
Documents.  Without limiting the
foregoing, Agent may cause any Lender Interest Rate Protection Agreement to be
terminated or otherwise direct Borrower’s counterparty under any Interest Rate
Protection Agreement to take such actions or omit to take such actions as Agent
shall determine.  Borrower covenants and
agrees to reimburse and indemnify Agent and Lenders for any termination or
breakage costs Agent or Lenders may incur as a result of any such termination.

 

ARTICLE X

 

ASSIGNMENTS AND PARTICIPATIONS

 

SECTION 10.1.    Assignment and Participations. 
Agent and Lenders shall have the right, subject to this Section 10.1,
to assign, sell, negotiate, pledge or hypothecate all or any portion of their
rights and obligations hereunder.  No
Lender shall assign, sell, negotiate, pledge, hypothecate or otherwise transfer
all or any portion of its rights in and to the Loan to any other Person (an “Assignee”)
(a) without (x) Agent’s prior consent and (y) Borrower’s prior
consent (which consent shall not be unreasonably withheld) unless such
assignment is to an Eligible Assignee or occurs during the existence of an
Event of Default, in which case 

 

100

 

Borrower’s consent shall not be required, (b) other than in
compliance with Section 10.5 hereof, (c) unless the aggregate
principal amount of the Loan to be held by the Assignee after such transaction
is Ten Million Dollars ($10,000,000) or more (or such lesser amount approved by
Agent) and (d) unless, after giving effect to such transaction, such
Lender’s aggregate unassigned interest in the Loan shall be in a principal
amount of at least Ten Million Dollars ($10,000,000) (or such lesser amount
approved by Agent) unless such transaction encompasses all of such Lender’s
rights in and to the Loan, in which case such Lender shall have assigned all of
its rights in and to the Loan; provided, however, any Lender
shall have the right at any time without the consent of or notice to Agent, any
other Lender or other Person to grant a security interest in all or any portion
of such Lender’s interest in the Note or the Loan to any Federal Reserve Bank
or the central reserve bank or similar authority of any other country to secure
any obligation of such Lender to such bank or similar authority (a “Central
Bank Pledge”).  Effective on any such
assignment and assumption by the assignee and on compliance with Section 10.5
hereof, the assigning Lender shall have no further liability hereunder with
respect to the interest of such Lender that was the subject of such transfer
and such Assignee shall be a Lender with respect to such interest.  Except for a Central Bank Pledge, a Lender
making any such assignment shall notify Borrower of same, specifying the
Assignee thereof and the amount of the assignment.

 

SECTION 10.2.    Participation. 
No Lender shall assign, sell or otherwise transfer a participation in
and to all or any portion of its rights and obligations in and to the Loan,
this Loan Agreement or the other Loan Documents to any other Person (a “Participant”)
without the prior consent of Agent.  No
such participation shall (i) require the consent of any Lender, Borrower
or any other Person or (ii) release a Lender from any of its obligations
hereunder.  Each Lender agrees to provide
Agent prompt notice of all participations sold by such Lender together with a
copy of the documentation governing such participations.

 

SECTION 10.3.    Availability of Records. 
Borrower acknowledges and agrees that Agent and each Lender may provide
to any actual or proposed Assignee or Participant originals or copies of this
Loan Agreement, any other Loan Documents and any other documents, instruments,
certificates, opinions, insurance policies, financial statements and other
information, letters of credit, reports, requisitions and other materials and
information at any time submitted by or on behalf of Borrower, any
Borrower GP, Guarantor or other Persons and/or received by Agent or any
Lender in connection with the Loan.

 

SECTION 10.4.    Borrower’s Facilitation of Transfer.

 

(a)           In
order to facilitate permitted assignments and other transfers to Assignees and
sales to Participants, Borrower shall execute and deliver to Agent and shall
cause each Borrower Partner and Guarantor to execute and deliver to Agent such
further documents, instruments or agreements as Agent or any Lender may
reasonably require, including one or more substitute promissory notes
evidencing the Commitment of each Lender, provided that such documents,
instruments or agreements do not (a) increase the obligations or
liabilities of any such Person hereunder or under the other Loan Documents in
excess of the obligations or liabilities intended to be provided herein or in
the other Loan Documents or (b) decrease such Person’s rights hereunder or
under the other Loan Documents to less than what they were prior to the
execution of such documents, instruments or agreements.  In addition, Borrower agrees to 

 

101

 

reasonably
cooperate with Agent and Lenders, including providing such information and
documentation regarding Borrower, any Borrower Partner, Guarantor and any other
Person as Agent or any Lender or any potential Assignee or Participant may
reasonably request and to meet with potential Assignees and Participants upon
reasonable notice.

 

(b)           Agent
shall have the right, at any time (whether prior to, in connection with, or
after any permitted assignment, participation and other transfers to Assignees
and sales to Participants), with respect to all or any portion of the Loan, to
modify, split and/or sever all or any portion of the Loan as hereinafter
provided, and Borrower shall cooperate and cause each other Borrower Party to
cooperate (in each case at Borrower’s reasonable expense), with Agent in
connection therewith.  Without limiting
the foregoing, Agent may (i) cause the Note, the Mortgages and the other
Loan Documents to be split into multiple mortgage loans, (ii) create one
more senior and subordinate notes (e.g., an A/B or A/B/C structure), (iii) create
multiple components of the Note or Notes (and allocate or reallocate the
principal balance of the Loan among such components and/or assign different
interest rates and/or LIBOR spreads to each Note), which components may be
represented by separate Notes or (iv) otherwise sever the Loan into two or
more loans secured by mortgages and by a pledge of partnership or membership
interests (directly or indirectly) in Borrower (i.e., a senior loan/mezzanine
loan structure), in each such case, in whatever proportion and whatever
priority Agent determines; provided, however, in each such
instance the outstanding principal balance of all the Notes evidencing the Loan
(or components of such Notes) immediately after the effective date of such
modification equals the outstanding principal balance of the Loan immediately
prior to such modification and the weighted average of the interest rates for
all such Notes (or components of such Notes) immediately after the effective
date of such modification equals the overall weighted average LIBOR Rate
immediately prior to such modification; provided, further, however,
so long as no Event of Default has occurred and is continuing, partial
prepayments or repayments shall be applied to such tranches in a manner which
shall not increase the weighted average interest rate of the Loan.  None of the foregoing shall increase the
obligations or liabilities of Borrower, Guarantor or any Borrower Partner under
the Loan Agreement or the other Loan Documents in excess of the obligations or
liabilities intended to be provided herein or in the other Loan Documents or
decrease Borrower’s rights under the Loan Agreement or the other Loan Documents
to less than what they were prior to the execution of such documents,
instruments or agreements.  Subject to
the foregoing restrictions, if requested by Agent, Borrower shall, and use
commercially reasonable efforts to cause each applicable Borrower Party to,
execute and deliver such documentation as Agent may reasonably request to
evidence and/or effectuate any such modification or severance.

 

SECTION 10.5.    Notice; Registration Requirement. 
No assignment, sale, negotiation, pledge, hypothecation or other transfer
of any part of any Lender’s interest in and to the Loan shall be effective or
permitted under this Article X until (a) an assignment and
acceptance agreement in the form attached hereto as Schedule 10.5
(an “Assignment and Acceptance”) with such changes thereto as are
reasonably acceptable to Agent with respect to such assignment, sale,
negotiation, pledge, hypothecation or other transfer shall have been delivered
to Agent, (b) Agent shall have registered such Assignee’s name and address
in the Register which Agent maintains for the recordation of the names,
addresses and interests of Lenders, and (c) the parties to such transfer,
assignment or purchase shall have paid to Agent a 

 

102

 

processing and registration fee determined by Agent.  The entries in the Register shall be
conclusive, absent manifest error.  This Section 10.5
shall not apply to any Central Bank Pledge.

 

SECTION 10.6.    Registry.  Borrower
hereby designates Agent to serve as Borrower’s agent, solely for purposes of
this Section 10.6, to maintain a register (the “Register”)
on which Agent will record the Commitments from time to time of each Lender and
each repayment with respect to the principal amount of the Loan of each
Lender.  Failure to make any such
recordation, or any error in such recordation shall not affect Borrower’s
obligations in respect of the Loan.  With
respect to any Lender, the transfer of the Commitments of such Lender and the
rights to the principal of, and interest on, the Loan made pursuant to such
Commitments shall not be effective until such transfer is recorded on the
Register maintained by Agent with respect to ownership of such Commitments and
prior to such recordation all amounts owing to the transferor with respect to
such Commitments shall remain owing to the transferor.  The registration of a transfer of all or part
of any Commitment shall be recorded by Agent on the Register only upon the
acceptance by Agent of a properly executed and delivered Assignment and Acceptance
by the assignor and assignee.  At the
assigning Lender’s option, concurrently with the delivery of an Assignment and
Acceptance pursuant to which an interest of such Lender in the Loan was
assigned to such Assignee, the assigning Lender shall surrender its Note
evidencing the portion of the Loan corresponding to the interest so transferred
and Borrower shall deliver to Agent one or more new promissory notes in the
same aggregate principal amount issued to the assigning Lender and/or the
Assignee.  It is intended that this Section 10.6
constitute a “book entry system” within the meaning of U.S. Treasury Regulation
Section 1.871 14(c)(1)(i)(B) and shall be interpreted consistently
therewith.

 

SECTION 10.7.    Lender Interest Rate Protection Agreements.  Each Lender
that is a party to any Interest Rate Protection Agreement acknowledges that the
interest of Borrower in and to such Interest Rate Protection Agreement will be
pledged and collaterally assigned to Agent pursuant to the Loan Documents, and
hereby consents without any restrictions to such pledge and collateral
assignment.  All payments, if any, due
under such Interest Rate Protection Agreement shall be paid directly to Agent
and all other rights of Borrower shall, upon the occurrence and during the
continuance of an Event of Default, be exercisable by Agent.  Each Lender that is a party to any Interest
Rate Protection Agreement shall execute and deliver to Agent, and cause any
Affiliate of such Lender that is a party to any Interest Rate Protection
Agreement to execute and deliver to Agent, upon entering into such agreement
the Interest Rate Protection Agreement Consent in order to confirm the
foregoing.

 

SECTION 10.8.    Disclosure by Agent or Lender.  Without
limiting Section 10.3 hereof, Borrower consents to the issuance by
Agent and Lenders of advertisements and other promotional materials (but not
press releases which shall require the prior approval of Borrower, which
approval shall not be unreasonably withheld) in connection with the marketing activities
of Agent and Lenders, including the disclosure that PB Capital is the Agent for
the Loan, the amount of the Loan and the name, location and use of the
Properties.

 

103

 

ARTICLE XI

 

AGENT AND LENDERS

 

SECTION 11.1.    Scope of Article XI.  This Article XI shall be binding
on Agent and Lenders, but shall not be binding on or enforceable by Borrower
unless otherwise expressly provided herein. 
As among Agent and
Lenders, the provisions of this Article XI may be amended,
waived or otherwise modified by Agent
and Lenders without Borrower’s consent and without the need for Borrower
to be party to any of the same.  Without
limiting the foregoing, nothing contained in this Article XI or any
amendments, waivers or modifications thereof by Agent and Lenders, shall limit or modify
the rights and obligations of, and restrictions applicable to, Borrower, Agent or Lenders set forth in
any other provision of this Loan Agreement or in the other Loan Documents,
except as among Agent and
Lenders.

 

SECTION 11.2.    Agent.

 

(a)           Appointment.  Each Lender hereby irrevocably designates and
appoints Agent as the agent of such Lender with respect to the Loan and to act
as “Agent” under the Loan Documents. 
Each Lender hereby irrevocably authorizes Agent, as its agent, to take
such action and to exercise such powers on such Lender’s behalf as may be taken
by Agent under any Loan Document, including as a payee, mortgagee, assignee or
beneficiary or otherwise, together with such other powers as are reasonably
incidental thereto.  Nothing contained in
this Loan Agreement, any Assignment and Acceptance or in any other Loan
Document is intended to create or shall be construed as imposing on Agent any
obligations except as expressly set forth in this Loan Agreement or in any
other Loan Document.  Agent shall not
have any fiduciary or trustee relationship with Lenders.

 

(b)           Duties of Agent.  Agent shall not have any duties or
responsibilities except those expressly set forth in this Loan Agreement and in
the other Loan Documents; no implied covenants, functions, responsibilities,
duties, obligations or liabilities of Agent shall be construed to exist under
this Loan Agreement or any other Loan Document. 
Agent shall perform its duties hereunder in accordance with the same
standard of care as that customarily exercised by Agent with respect to the
administration of a loan similar to the Loan held entirely for its own
account.  Agent shall not have any duty
to ascertain or inquire into or verify the performance or observance of any
covenants or agreements in any Loan Documents by Borrower or any other Person
or the satisfaction of any condition or to inspect any Property.  Agent shall not be liable for any undertaking
of Borrower or any other Person or for any error of judgment, or for any action
taken or omitted to be taken by Agent other than willful misconduct or gross
negligence of Agent.

 

(c)           Reliance by Agent.  Agent is entitled to rely upon (and shall be
protected in relying upon) any written or oral statement and notices or any
other certification or documents believed by Agent to be genuine and correct
and to have been signed or made by the proper Person and, with respect to all
of its duties under the Loan Documents, upon advice of counsel (including
counsel for Borrower and Guarantor), independent public accountants, engineers,
architects and other experts selected by Agent and shall not be liable for any
action taken or 

 

104

 

omitted to be taken by Agent in good faith in
accordance with the advice of such counsel, independent public accountants,
engineers, architects and other experts.

 

(d)           Delegation of Duties.  Agent may execute any of its duties under
this Loan Agreement and any duties as Agent or as a party, payee, mortgagee,
assignee or beneficiary under any Loan Document, by or through agents,
affiliates or attorneys-in-fact.  Agent
shall not be responsible for the negligence or misconduct of any agents,
affiliates or attorneys-in-fact selected by Agent with reasonable care and
prudence.

 

(e)           Agent in Its Capacity as a Lender.  With respect to PB Capital’s ownership
interest in the Loan as a Lender, PB Capital in its capacity as Lender shall
have the rights and powers of a Lender under this Loan Agreement and the other
Loan Documents as set forth herein and therein and may exercise or refrain from
exercising the same as though it were not Agent, and the term “Lender” and “Lenders”
shall include PB Capital in its individual capacity for so long as PB Capital
shall hold any interest in the Loan.

 

(f)            Relationship with Borrower.  Each Lender acknowledges that, with respect
to the Loan and the Loan Documents, Agent shall have the sole and exclusive
authority to deal and communicate with Borrower and any other Person on behalf
of Lenders and each Lender acknowledges that any notices or demands from such
Lender to Borrower or such Person must be promptly forwarded to Agent for
delivery.  Each Lender agrees that it
will not take any legal action, nor institute any actions or proceedings,
against Borrower or any other Person with respect to any of the Obligations,
without the prior consent of Agent, which consent may be withheld by Agent in
its discretion.

 

SECTION 11.3.    Distributions.  Each Lender shall be entitled to receive, and
Agent shall transfer to each Lender, each Lender’s Pro Rata Share of all
payments received by Agent pursuant to the Loan Documents on account of
principal, interest and other sums, or operating income or sale proceeds
arising from the operation or disposition of any Property under a Post-Default
Plan, excluding, however, (a) any sums payable to Agent or any Lender in a
manner other than in proportion to each Lender’s Pro Rata Share in connection
with any Interest Rate Protection Agreement or pursuant to Section 2.9
or 2.15 hereof, without regard as to whether such sums constitute
Additional Interest, (b) any sums payable pursuant to the Loan Fee Letter
and (c) any sums payable to Agent in its capacity as Agent, including any
sums payable on account of expenses incurred by Agent which Borrower is
obligated to reimburse Agent pursuant to the Loan Documents and any sums or
advances paid or made by Agent after acquisition of any Property under any
Post-Default Plan or otherwise to the extent that Lenders have not made a
payment on account thereof pursuant to Section 11.9 hereof (the
sums referred to in clauses (a) through (c) are
hereinafter referred to as, “Excluded Sums”).

 

SECTION 11.4.    Authority, No Reliance; Binding Effect.  Each Lender (a) represents and warrants
that it is legally authorized to enter into this Loan Agreement, (b) agrees
that neither Agent nor any Lender shall be responsible to one another for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
collectibility of any of the Loan Documents or any other instrument or document
furnished pursuant thereto or in connection with the Obligations, (c) confirms
and agrees that neither Agent nor any Lender has made or will be deemed to have
made any warranty or representation to another or shall be

 

105

 

responsible to another for any statements, warranties
or representations (written or otherwise) made in or in connection with the
Loan or the Loan Documents or for the financial condition of Borrower or any
other Person or for the title or the value of any portion of the Mortgaged
Property or other Collateral and (d) agrees that it will be bound by the
provisions of this Loan Agreement and will perform in accordance with its terms
all the obligations which by the terms of this Loan Agreement are required to
be performed by it as a Lender.  Each
Lender acknowledges that it has, independently and without reliance upon Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Loan Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Loan Agreement.

 

SECTION 11.5.    Loan.

 

(a)           Amendments and
Modifications; Exercise of Rights and Remedies.  Subject to Section 11.5(b) hereof,
Agent reserves the right, in its discretion, in each instance without prior
notice to Lenders, (i) to exercise or refrain from exercising any powers
or rights which Agent or Lenders may have under or with respect to the Note,
this Loan Agreement or any other Loan Document, (ii) to enforce or forbear
from enforcing the Loan Documents, (iii) to grant or withhold consents,
approvals or waivers and to make any other determinations in connection with
the Loan and the Loan Documents, (iv) to amend or modify the Loan
Documents, (v) to acquire additional security or release any security
given with respect to the Loan, (vi) to collect all sums due under the
Loan Documents, (vii) to declare the Loan due and payable when permitted
to do so pursuant to the terms of the Loan Documents, (viii) to enforce
the Loan Documents, (ix) to take possession of, foreclose or accept a deed
and/or assignment of the Collateral or any portion thereof in lieu of
foreclosure, (x) to sell, dispose of or otherwise deal with the ownership
and operation of the Collateral, (xi) to bid at foreclosure of the
Mortgage such amount as Agent shall determine in its discretion, and
(xii) to exercise or determine not to exercise all powers which are
incidental to any of the foregoing.

 

(b)           Restrictions of Power of Agent.  Notwithstanding anything to the contrary
contained in Section 11.5(a) hereof or elsewhere in this Loan
Agreement, Agent shall not without the prior consent of all Lenders, agree to
any amendment to or waiver of any of the terms or conditions of the Note, this
Loan Agreement or any other Loan Document which would (v) extend the time
for any payments of interest or principal, including the Maturity Date, (w) reduce
the rate of interest payable pursuant to this Loan Agreement, (x) increase
the principal amount of the Loan, (y) release any material portion of the
Collateral granted under the Loan Documents except as required hereunder or
thereunder, or (z) release Borrower, Guarantor or any other guarantor of
the Loan from any of their material obligations with respect to the Loan.  In the event that Agent requests a Lender’s
consent pursuant to this Section 11.5(b) and Agent does not
receive the Lender’s written response within ten (10) Business Days of the
request therefor, such Lender shall be deemed to have consented to the action
proposed in such request. Borrower may rely on any instrument executed by Agent
on behalf of Lenders as binding Lenders without being required to make further
inquiry.

 

106

 

(c)           Instructions from Lenders.  Agent may at any time request instructions
from Lenders with respect to any actions, consents, waivers or approvals which,
by the terms of any of the Loan Documents, Agent is permitted or required to
take or to grant, and Agent shall be absolutely entitled to refrain from taking
any action or to withhold any approval, consent or waiver and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval, consent or waiver under any of the Loan Documents
until Agent shall have received such instructions.

 

(d)           Post-Default Plan.  In the event that all or any portion of the
Properties are acquired by Agent as the result of the exercise of any remedies
under the Loan Documents, or is retained in satisfaction of all or any part of
Borrower’s obligations thereunder, at Agent’s election, title to same shall be
held in the name of one or more of Agent or a nominee or subsidiary of Agent,
as agent, for the ratable benefit of Agent and Lenders (plus, with respect to
each of Agent and any applicable Lender, any Excluded Sum due and payable to
Agent or such Lenders).  Agent shall
prepare a recommended course of action for the operation and disposition of the
Properties (the “Post-Default Plan”), which shall be subject to the
approval of the Requisite Lenders, which approval shall not be unreasonably
withheld.  Agent shall administer, operate
and dispose of the Properties substantially in accordance with the Post-Default
Plan, and upon demand therefor from time to time, each Lender will contribute
its share (based on its Pro Rata Share) of all costs and expenses incurred by
Agent pursuant to the Post-Default Plan, including any operating losses,
emergency expenses and all necessary reserves. 
To the extent there is net operating income from the operation of the
Properties, Agent shall, in accordance with the Post-Default Plan, determine
the amount and timing of distributions to Agent and Lenders.  All such distributions shall be made to
Lenders in accordance with the terms of Section 11.3 hereof.

 

(e)           Deemed Consent.  In the event that Agent requests a Lender’s
consent pursuant to Section 11.5(b) or Section 12.11
hereof and Agent does not receive the Lender’s written response within ten (10) Business
Days of the request therefor, or such shorter period that Agent in the exercise
of its reasonable business judgment determines is necessary under the
circumstances, such Lender shall be deemed to have consented to the action or
determination proposed in such request. 
All such requests for consent from Agent to Lenders shall (i) be
given in the form of a written notice to each Lender, (ii) be accompanied
by a description of the matter or item as to which such consent is requested,
or shall advise each Lender where such matter or item may be inspected, or
shall otherwise describe the matter or issue to be resolved, and (iii) shall
include Agent’s proposal in respect thereof.

 

(f)            Instructions from Lenders.  Agent may at any time request instructions
from Lenders with respect to any actions, consents, waivers or approvals which,
by the terms of any of the Loan Documents, Agent is permitted or required to
take or to grant, and Agent shall be absolutely entitled to refrain from taking
any action or to withhold any approval, consent or waiver and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval, consent or waiver under any of the Loan Documents
until Agent shall have received such instructions.

 

SECTION 11.6.    Equitable Adjustments.  If a Lender shall obtain any payment (whether
voluntary, involuntary or otherwise) on account of such Lender’s interest in
the Loan in 

 

107

 

excess of such Lender’s Pro Rata Share to which such
Lender is entitled (other than payments on account of Excluded Sums payable to
such Lender) or payment on account of Excluded Sums payable to another Person,
such Lender shall forthwith pay over to Agent an amount sufficient to enable
Agent to cause such excess payment to be shared ratably with the other Lenders
or, in the case of Excluded Sums payable to another Person, such Excluded Sums.

 

SECTION 11.7.    Other Transactions.  Agent and each Lender and their respective
Affiliates and subsidiaries may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
Borrower, any Affiliate of Borrower, any subsidiaries of Borrower or its
Affiliates and any Person who may do business with or own interests in or
securities of Borrower or any such Affiliate or subsidiary without any duty to
account therefor to each other.  In the
event that Agent or a Lender shall enter into an Interest Rate Protection
Agreement, Agent or such Lender, as the case may be, shall be free to exercise
its rights and remedies pursuant to the terms of the applicable Interest Rate
Protection Agreement as if Agent or Lender, as the case may be, was not Agent
or a Lender hereunder.

 

SECTION 11.8.    Obligations Absolute.  Each Lender acknowledges and agrees that its
obligations hereunder are absolute and unconditional and shall not be affected
by any circumstance whatsoever, including any breach by Agent or a Lender of
their obligations under this Loan Agreement or any other Loan Document, any
lack of validity or enforceability of the Note, this Loan Agreement or any
other Loan Document, the occurrence and continuance of any Default or Event of
Default or the failure to satisfy any term or condition of the Note, this Loan
Agreement or any other Loan Document. 
Without limiting the generality of the immediately preceding sentence,
each Lender agrees that any payment required to be made by it shall be made
without any offset, abatement, withholding or reduction whatsoever and a breach
by Agent or any Lender of any of their obligations pursuant to this Loan
Agreement or any other Loan Document shall not limit or otherwise affect a
Lender’s obligations pursuant to this Loan Agreement.

 

SECTION 11.9.    Indemnification.

 

(a)           Generally. 
Lenders hereby agree to indemnify Agent (to the extent Agent is not
otherwise reimbursed hereunder or under the Loan Documents by Borrower), on
demand, in proportion to their Pro Rata Shares, for and against any and all
claims, demands, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (including reasonable fees
and disbursements of counsel) of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against Agent in any way relating to or
arising hereunder or out of any of the Loan Documents, any action taken or
omitted by Agent under any of the Loan Documents or any Post-Default Plan, any
Property, or the Collateral, including any matter required be indemnified by
Borrower pursuant to Section 12.1 hereof and including the
construction, use, occupancy, ownership and operation thereof whether pursuant
to any Post-Default or otherwise; provided, however, that Lenders
shall not be liable for (i) any of such claims, demands, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from Agent’s willful
misconduct or gross negligence, or (ii) any of such claims, demands,
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements which arise pursuant to any Lender
Interest Rate Protection Agreement to which Agent or its Affiliate 

 

108

 

is party.  A
certificate of Agent as to the amount for which Lenders are required to
reimburse Agent pursuant to this Section 11.9 shall be prima facie
evidence as to such amount.  Lenders’
obligations under this Section 11.9 shall survive the termination
of this Loan Agreement and the Loan Documents.

 

(b)           Indemnification Regarding Certain Actions.  Unless indemnified to Agent’s satisfaction
against any claims, demands, liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
(including reasonable fees and disbursements of counsel), Agent may not be
compelled to do any act under this Loan Agreement or any other Loan Document or
to take any action toward the execution or enforcement of the powers hereby or
thereby created or to prosecute or defend any suit with respect to this Loan
Agreement or any other Loan Document.  In
no event, however, shall Agent be required to take any action, pursuant to this
Article XI, any Post-Default Plan or otherwise, that Agent
determines would be in violation of any applicable regulatory requirements, or
could incur for Agent criminal or onerous civil liability.

 

SECTION 11.10. Taxes.  All taxes due and payable on any payments to
be made to any Lender with respect to the Obligations or under the Loan
Documents shall be such Lender’s sole responsibility.  All payments payable by Agent to any Lender
hereunder or otherwise with respect to the Obligations shall be made without
deduction for any taxes, charges, levies or withholdings, except to the extent,
if any, that such amounts are required to be withheld by Agent under applicable
law or the terms of the Loan Documents or this Loan Agreement.  If any Lender is organized or is existing
under the laws of a jurisdiction outside the United States, such Lender shall
provide to Agent upon the execution of this Loan Agreement, or execution of any
Assignment and Acceptance pursuant to which it becomes a Lender hereunder, and
from time to time thereafter, at least two (2) duplicate completed and
signed copies of any form(s) that may be required by the United States
Internal Revenue Service in order to certify such Lender’s exemption from
United States withholding taxes with respect to payments to be made to such
Lender with respect to the Obligations or under the Loan Documents or such
other documents as are necessary to indicate that all such payments are exempt
from or subject to such taxes at a rate reduced by an applicable tax
treaty.  Each such Lender shall also
deliver to Agent two (2) additional copies of such form(s) on or
before the date that such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by Agent.

 

SECTION 11.11. Return of Payments.  If Agent has received or applied any payment
with respect to the Loan and has paid to any Lender any portion of such
payment, and thereafter such payment or application is rescinded or must
otherwise be returned or paid over by Agent, whether required pursuant to any
bankruptcy or insolvency law, the Loan Documents, or otherwise, such Lender
shall, at Agent’s request, promptly return its share of such payment or
application to Agent.  In addition, such
Lender shall simultaneously remit its Pro Rata Share of any interest or other
amounts required to be paid by Agent with respect to such payment or
application.  If any Lender fails to
remit such payment to Agent prior to 10:00 a.m. (New York City time) on
the second (2nd) Business Day following Agent’s request for such funds, the
payment owed to Agent shall earn interest at the Base Rate for each day from
the date of Agent’s request until its payment to Agent.

 

109

 

SECTION 11.12. No Partnership.  This Loan Agreement, the Assignment and
Acceptances and the other Loan Documents do not create a partnership or joint
venture among Agent and/or Lenders.

 

SECTION 11.13. Resignation and Removal of Agent; Successor
Agent.

 

(a)           Resignation.  Agent may resign, without the consent of
Borrower or any Lender, from the performance of all its functions and duties
hereunder at any time by giving at least fifteen (15) Business Days’ prior
written notice to Borrower and Lenders, unless applicable law requires a
shorter notice period or that there be no notice period, in which instance such
applicable law shall control.  Such
resignation shall take effect upon the acceptance by a successor Agent of
appointment pursuant to Section 11.13(c) or, if applicable,
the appointment by Agent of a successor Agent pursuant to Section 11.13(d) hereof.

 

(b)           Removal of Agent.  (i) In the event of the occurrence of
any material gross negligence or willful misconduct of Agent, if all of the
Lenders (other than a Lender that is then acting as Agent) agree, or (ii) if
Agent is a Defaulting Lender and the Requisite Lenders agree, then Agent may be
removed as the agent; provided, however, that no such removal of
Agent shall in any way affect the rights of Agent in its individual capacity as
a Lender.

 

(c)           Appointment of Successor Agent by Requisite Lenders.  Upon any resignation or removal of Agent, the
Requisite Lenders (including in the determination of the Requisite Lenders, the
Pro Rata Shares of such Lender that is also the resigning or removed Agent)
shall appoint a successor Agent (who shall also be a Lender).

 

(d)           Appointment by Resigning Agent.  If, upon the resignation of Agent, a
successor Agent shall not have been appointed within the fifteen (15) Business
Days or shorter period provided in Section 11.13(a) hereof,
the resigning Agent shall then appoint a successor Agent (who also shall be a
Lender), which successor shall serve as Agent until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above.

 

(e)           Rights of the Successor and Retiring Agent.  Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, or, if applicable, the appointment of a
successor Agent by Agent pursuant to Section 11.13(d) hereof,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent arising from and
after the date of such acceptance and appointment, and the retiring Agent shall
be discharged from the duties and obligations of Agent arising from and after
such date.  After the resignation or
removal of Agent as provided herein, the provisions of this Loan Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Loan Agreement.

 

SECTION 11.14. Defaults by any Lender.

 

(a)           Consequences of Default.  If for any reason any Lender shall be in
default of any of its obligations pursuant to this Loan Agreement or any other
Loan Document (a “Defaulting Lender”), then, in addition to the rights
and remedies that may be available to Agent and any other Lender under this
Loan Agreement, at law and in equity, such Defaulting Lender’s right to
participate as a Lender in decisions under this Loan Agreement, including any
rights to 

 

110

 

approve or direct any determination, action or
inaction of Agent where the approval or direction of Lenders is required or
permitted hereby, and such Defaulting Lender’s right to assign, transfer, sell
all or any portion of its rights in and to the Loan or a participation therein
pursuant to Article X hereof, shall be suspended during the
pendency of such failure or refusal.

 

(b)           Remedies. 
If for any reason the Defaulting Lender fails to make timely payment of
any amount required to be paid by such Defaulting Lender to or for the benefit
of Agent or any other Lender hereunder, then, in addition to other rights and
remedies which Agent or such other Lender may have hereunder or otherwise,
Agent or any Lender shall be entitled, but not obligated (i) to advance
funds on behalf of any Defaulting Lender, (ii) to the extent not paid by
Borrower, to collect interest from the Defaulting Lender at the Base Rate until
the date on which the payment is made, (iii) to withhold or set off or in
the case of a Lender, to cause Agent to withhold or setoff, and to apply to the
payment of the defaulted amount and any related interest, any amounts to be
paid to the Defaulting Lender under this Loan Agreement, (iv) to bring an
action or suit against the Defaulting Lender in a court of competent jurisdiction
to recover the defaulted amount and any related interest and (v) to
purchase the Defaulting Lender’s interest in the Loan in the manner set forth
in this Section 11.14.  Upon
the Defaulting Lender’s failure to make payments as set forth herein and so
long as such failure remains uncured (and it is agreed an advance of funds by
any other Lender pursuant to clause (i) above shall not be
considered a cure of the Defaulting Lender’s default), the Defaulting Lender
shall not be entitled to receive its share of any payments made by Borrower (or
amounts owed by Borrower) after such date pursuant to the Loan Documents.  If Agent receives any payment with respect to
the Obligations from Borrower as to which a Defaulting Lender would otherwise
have been entitled, then such Defaulting Lender’s share of such payment shall
be credited toward the amount owed hereunder by such Defaulting Lender on a
dollar for dollar basis.

 

(c)           Purchase of Defaulting Lender’s Interest After
Default.  In the event of a
default by a Lender as referred to in Section 11.14(a) hereof,
each Lender which is not a Defaulting Lender shall have the right, but not the
obligation, in its sole discretion, to acquire such Defaulting Lender’s
interest in the Loan.  If more than one
Lender exercises such right, each such Lender which is not a Defaulting Lender
shall have the right to acquire (in accordance with such acquiring Lender’s Pro
Rata Share or upon agreement of the Lenders that desire to so purchase the
Defaulting Lender’s interest, any other proportion) the Defaulting Lender’s
interest in the Loan.  Such right to
purchase shall be exercised by written notice from the applicable Lender(s) electing
to exercise such right to the Defaulting Lender (an “Exercise Notice”),
copies of which shall also be sent concurrently to each other Lender.  The Exercise Notice shall specify (i) the
purchase price for the interest of the Defaulting Lender, determined in
accordance with Section 11.14(d) hereof and (ii) the date
on which such purchase is to occur, which shall be any Business Day which is
not less than fifteen (15) days after the date on which the Exercise Notice is
given, provided that if such Defaulting Lender shall have cured its default in
full (including with the payment of any interest and other amounts due in
connection therewith) to the satisfaction of Agent within said fifteen (15) day
period, then the Exercise Notice shall be of no further effect and the
non-defaulting Lender(s) shall no longer have a right to purchase such
Defaulting Lender’s interest.  Upon any
such purchase of a Defaulting Lender’s interest and as of the date of such
purchase (the “Purchase Date”), the Defaulting Lender’s interest in the
Loan, and its rights hereunder as a Lender arising from and after the Purchase
Date (but not its rights and liabilities with respect thereto or under this
Loan Agreement or the other Loan Documents 

 

111

 

for obligations, indemnities and other matters arising
or matters occurring before the Purchase Date) shall terminate on the Purchase
Date, and the Defaulting Lender shall promptly execute all documents reasonably
requested to surrender and transfer such interest.  Without in any manner limiting the remedies
of Agent or any other Lender, the obligation of a Defaulting Lender to sell and
assign its interest in the Loan under this Section 11.14 shall be
specifically enforceable by Agent and/or any other Lender by an action brought
in any court of competent jurisdiction for such purpose, it being acknowledged
and agreed that, in light of the disruption in the administration of the Loan
and the other terms of the Loan Documents that a Defaulting Lender may cause,
damages and other remedies at law are not adequate.

 

SECTION 11.15. Purchase Price; Payment for Defaulting Lender’s
Pro Rata Share.  The
purchase price for the interest of a Defaulting Lender in the Loan (the “Purchase
Price”) shall be equal to the sum of all of the Defaulting Lender’s
advances under the Loan Documents outstanding as of the Purchase Date, less the
costs and expenses incurred by Agent and any non-defaulting Lender directly as
a result of the Defaulting Lender’s default hereunder, including interest
accrued on such unpaid amounts (at the Base Rate), court costs and including
reasonable attorneys’ fees and disbursements, and fees for accountants and
other similar advisors (provided that such costs and expenses are paid by the
Lenders acquiring the interest of such Defaulting Lender to Agent and the
Lenders incurring same).

 

ARTICLE XII

 

GENERAL CONDITIONS

 

SECTION 12.1.    Indemnity.

 

(a)           Borrower
hereby indemnifies and agrees to defend, protect and hold harmless Agent and
Lenders and their respective affiliates, participants, directors, officers,
agents and employees (each, an “Indemnified Party”) from and against any
and all losses, liabilities, obligations, charges, claims, damages, penalties,
causes of action, costs and expenses (including attorneys’ fees and
disbursements) of any kind or nature (except to the extent of any claim arising
solely from the gross negligence or willful misconduct of such Indemnified
Party) incurred by an Indemnified Party in connection with this Loan Agreement,
any of the other Loan Documents, the consummation of the transactions
contemplated herein or therein, and the use, operation, leasing or occupancy of
any of the Properties or any Mortgaged Property, including or asserted against
an Indemnified Party, in each case relating to or arising out of any Default,
Event of Default or any of the following:

 

(i)                                    any
accident, injury to or death of Persons or loss of or damage to property
occurring on or about any Property or any part thereof, or the adjoining
sidewalks, curbs, vaults and vault space, if any, and streets and ways;

 

(ii)                                 any
design, construction, operation, use, nonuse or condition of any Property or
any part thereof, or the adjoining sidewalks, curbs, vaults and vault space, if
any, and streets and ways, including claims or penalties arising from violation
of any Legal 

 

112

 

Requirement, or Insurance Requirement, as well as any claim based on
any patent or latent defect, whether or not discoverable by Agent or any
Lender, any claim as to which the insurance is inadequate;

 

(iii)                              any performance of or
failure to perform any labor or services or furnishing of or failure to furnish
any materials or other property in respect of any Property or any part thereof;

 

(iv)                             any
negligence or tortious act or omission on the part of Borrower or any of its
agents, contractors, servants, employees, tenants, lessees, sublessees,
licensees, guests or invitees;

 

(v)                                any
claim or liability arising pursuant to the Leases, Operating Agreements, Asset
Management Agreement, Permitted Encumbrances, Property Documents, or any other
agreement to which Borrower is a party or by which any Property is bound;

 

(vi)                             any
other relationship that has arisen or may arise between or among Agent,
Lenders, Borrower, any Borrower Partner, Guarantor, any third party with
respect to any Property or any Mortgaged Property or any of the foregoing, as a
result of the execution and delivery of the Note, this Loan Agreement or the
other Loan Documents, or any other action contemplated hereby, thereby or by
any other document executed in connection with the Loan;

 

(vii)                          any claim, action or other
proceeding brought by or on behalf of any Person against Agent or any Lender as
the holder of, or by reason of its interest in, any sum deposited or paid
hereunder or in connection herewith, any insurance proceeds, any condemnation
awards or other amounts applied to the Obligations of Borrower; and

 

(viii)                       any circumstance resulting in
the impairment of the Liens of the Mortgages and/or the other Security
Documents, including as a result of non-compliance with any applicable lien
law.

 

(b)           If
any action or proceeding shall be commenced or taken (including an action to
foreclose any Mortgage, collect the Obligations or enforce Agent’s rights under
this Loan Agreement, the Note or the other Loan Documents) by Agent or any
other Person, in which action or proceeding Agent or any Lender is involved or
is made a party by reason of the execution and/or delivery of the Note, this
Loan Agreement, or any other Loan Documents or in which it becomes necessary to
enforce, defend or uphold the lien on any Mortgaged Property pursuant to such
Mortgage, this Loan Agreement or the other Loan Documents or the Agent’s and
Lenders’ rights under the Note or any other Loan Documents, all sums paid by
Agent for the expense of any such action or litigation shall be paid by
Borrower to Agent ten (10) days after 

 

113

 

demand.  In the
event any Mortgaged Property, or any part thereof, shall be advertised for
foreclosure sale and not sold, Borrower shall pay all costs in connection
therewith, including reasonable attorneys’ fees and disbursements and
advertising costs.

 

(c)           Borrower
hereby indemnifies and agrees to defend and hold harmless the Indemnified
Parties from and against any and all liabilities, claims, charges, losses and
expenses (including attorneys’ fees and disbursements) or damages of any kind
or nature which may arise as a result of any claim by any broker, “finder” or
advisor with which Borrower or any Affiliate of Borrower has dealt or is
alleged to have dealt, including Broker.

 

(d)           Borrower
will hold Agent and each Lender harmless against any and all liability with
respect to any mortgage/deed recording, transfer or intangible personal
property tax or similar imposition now or hereafter in effect, to the extent
that the same may be payable by Agent or any Lender with respect to this Loan
Agreement, any Note or any other Loan Document.

 

(e)           Within
five (5) Business Days of demand by any Indemnified Party, Borrower shall
commence to defend, and shall thereafter diligently pursue defense of, any
investigation, action or proceeding in connection with any claim or liability,
or alleged claim or liability, that would, if determined adversely to such
Indemnified Party, be covered by the indemnification provisions contained in
this Section, such defense to be at the sole cost and expense of Borrower and
by counsel selected by Borrower and reasonably approved by such Indemnified
Party, which counsel may, without limiting the rights of an Indemnified Party
pursuant to the next succeeding sentence, also represent Borrower in such
investigation, action or proceeding.  In
the alternative, an Indemnified Party may elect to conduct its own defense
through counsel of its own choosing and at the expense of Borrower.

 

(f)            The
provisions of this Section 12.1 shall survive the repayment of the
Loan.

 

SECTION 12.2.    No Waivers.  No failure or delay on the part of Agent or
Lenders in exercising any right, power or remedy hereunder or under or in
connection with this Loan Agreement or the other Loan Documents or to insist
upon the strict performance of any term of this Loan Agreement or any other
Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under or in connection with this Loan Agreement or any other Loan
Document.  Without limiting the foregoing,
(a) the making of any Disbursement shall not constitute an approval or
acceptance by Agent of the work theretofore done in connection with the
construction at any Property or a waiver of any of the conditions precedent to
Agent’s obligation to make further Disbursements, and (b) any Disbursement
made in the absence of strict compliance with any of the conditions precedent
to Agent’s or Lenders’ obligation to make such Disbursement or in conjunction
with a waiver by Agent of Borrower’s compliance with any of such conditions
precedent shall be deemed to have been made pursuant to this Loan Agreement and
not in modification of the terms hereof.

 

114

 

SECTION 12.3.         Agent’s Review.  Observation, inspection and approvals by
Agent of any plans, the construction at any Property and the workmanship and
materials used therein shall impose no responsibility or liability of any
nature whatsoever on Agent, Lenders and no Person shall, under any
circumstances, be entitled to rely upon such observations, inspections and
approvals by Agent for any reason.

 

SECTION 12.4.         Submission of Evidence.  Any condition of this Loan Agreement which
requires the submission of evidence of the existence or non-existence of a
specified fact or facts implies as a condition the existence or non-existence,
as the case may be, of such fact or facts and Agent shall, at all times, be
free to independently establish to its satisfaction such existence or
non-existence.

 

SECTION 12.5.         Agent and Lenders Sole
Beneficiaries.  All terms,
provisions, covenants and other conditions of the obligations of Agent and
Lenders to make the Loan are imposed and all funds held in the Accounts and
other Collateral held by Agent are held solely and exclusively for the benefit
of Borrower, Agent and Lenders.  No
Person other than Borrower, Agent and Lenders shall have standing to require
satisfaction of any terms, provisions, covenants and other conditions in accordance
with their terms or be entitled to require any particular application of such
funds or Collateral.  No Person other
than Borrower, Agent and Lenders shall be deemed to be beneficiary of the
terms, provisions, covenants and other conditions of this Loan Agreement and
the other Loan Documents, any or all of which may be freely waived, in whole or
in part, by Agent at any time if Agent deems it advisable or desirable to do
so.

 

SECTION 12.6.         Contractors.  No contactors or any other Person dealing with
Borrower shall be, nor shall any of them be deemed to be, third party
beneficiaries of this Loan Agreement.

 

SECTION 12.7.         Entire Agreement.  This Loan Agreement and the other Loan
Documents embody the entire agreement and understanding between Borrower, Agent
and/or Lenders with respect to the Loan and supersede and cancel all prior loan
applications, expressions of interest, commitments, agreements and
understandings, whether oral or written, relating to the subject matter hereof,
except as specifically agreed in writing to the contrary.

 

SECTION 12.8.         Assignment.  Borrower may not assign, transfer or
otherwise convey this Loan Agreement or any other Loan Document, in whole or in
part, nor all or any portion of the Loan nor any interest therein.

 

SECTION 12.9.         Further Assurances;
Filing of Financing Statements. 
Borrower promptly shall make, execute or endorse, and acknowledge and
deliver or file or cause the same to be done, all such vouchers, invoices,
notices, certifications, instruments, additional agreements, undertakings,
conveyances, deeds of trust, mortgages, transfers, assignments, financing
statements or other assurances, and take all such other action, as Agent may,
from time to time, reasonably determine to be necessary or proper in connection
with this Loan Agreement or any of the other Loan Documents, the obligations of
Borrower hereunder or thereunder, or for better assuring and confirming unto
Agent and Lenders the full benefits and rights granted or purported to be
granted by this Loan Agreement or the other Loan Documents; provided that none
of the foregoing shall increase the obligations or liabilities of Borrower,
Guarantor or any 

 

115

 

of their respective Affiliates hereunder or under the
other Loan Documents in excess of the obligations or liabilities intended to be
provided herein or in the other Loan Documents or decrease such Person’s rights
hereunder or under the other Loan Documents to less than what they were prior
to the execution of such documents, instruments or agreements.  Borrower hereby agrees that, without notice
to or the consent of Borrower, Agent may file with the appropriate public
officials such financing statements or similar documents as are or may become
necessary to perfect and continue the perfection of the security interest
granted by any Security Document.

 

SECTION 12.10.  Cumulative Remedies.  The remedies in this Loan Agreement and the
other Loan Documents herein are cumulative and not exclusive of any remedies
available at law or equity or in any other agreement, document or instrument.

 

SECTION 12.11.  Amendments, Consents, Waivers,
Approvals, Etc. Except as set forth in Section 11.1
hereof, no amendment, modification, termination or waiver of any provision of
this Loan Agreement or the other Loan Documents shall be effective unless in
writing and signed by Borrower and Agent. 
With respect to any matter for which Agent’s consent or approval is
required hereunder or under the other Loan Documents, no such consent or
approval by Agent hereunder shall in any event be effective unless the same
shall be in writing and signed by Agent and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.  Notwithstanding the
foregoing, (a) no such amendment, modification, termination, waiver,
consent or approval by Agent shall, unless by an instrument signed by all
Lenders (other than Lenders that are Defaulting Lenders at such time) or by
Agent acting with the consent of all Lenders (other than Lenders that are
Defaulting Lenders at such time), (i) subject to Borrower’s right, if any,
to extend the Maturity Date, extend the time for any payments of interest or
principal, including the Maturity Date, (ii) reduce the amount of any
payment of principal, (iii) reduce the rate of interest payable pursuant
to this Loan Agreement, (iv) alter the rights or obligations of Borrower
to prepay the Loan, (v) alter the manner in which payments or prepayments
of principal, interest or other amounts hereunder shall be applied as among
Agent and Lenders, (vi) alter the relative priorities as among Agent and
Lenders of the Obligations entitled to the benefits of the Liens created under
the Security Documents, (vii) increase the maximum principal amount of the
Loan in excess of the Loan Amount, (viii) release any material portion of
the Collateral granted under the Loan Documents except as required pursuant to
the terms of the Loan Documents, by law or upon repayment of the Obligations in
full, (ix) release Borrower or any guarantor of the Loan from any of their
material obligations with respect to the Loan except as required pursuant to
the terms of the Loan Documents, by law or upon repayment of the Obligations in
full, (x) add additional obligations being secured by the Collateral
except for such indebtedness and other Obligations provided in the Loan
Documents, including Lender Interest Rate Protection Agreements, advances
pursuant to Section 9.4 hereof, protective advances and other
advances made by Agent with respect to any Property, the other Collateral, the
Loan Documents and the liens and rights of Agent and Lenders thereunder,
(xi) alter the definition of “Requisite Lenders” provided herein or
otherwise modify the number or percentage of the Lenders required to make any
determination or give any consent hereunder, or (xii) amend this Section 12.11
or Article XI hereof, (b) no increase in the amount of any
Lender’s Commitment shall be effective without the prior consent of such Lender
and (c) subject to the preceding clauses (a) and (b),
no other amendment or modification by Agent shall be effective unless it is
signed by the Requisite Lenders or by Agent 

 

116

 

acting with the consent of the Requisite Lenders,
except such amendments, modifications, terminations and releases that are
required pursuant to the Loan Documents or by law or that are ministerial in
nature, including the preparation and execution of UCC financing statements,
continuations and modifications, Assignments and Acceptances, third party
will-serve or similar agreements, estoppels, subordination, non-disturbance and
attornment agreements, partial releases in accordance with this Loan Agreement,
and terminations and releases delivered upon repayment of the Obligations in
full.  Any request by Agent to any Lender
for consent pursuant to this Section 12.11 shall be subject to Section 11.5(c) hereof.  Borrower may rely upon each amendment,
modification, termination, waiver, consent and approval signed by Agent as
having been consented to by all Lenders or the Requisite Lenders, as may be
required for such amendment, modification, termination, waiver, consent or
approval, without any further inquiry. 
No notice to or demand on Borrower in any case shall entitle Borrower to
any other or further notice or demand in similar or other circumstances.  No failure or delay of Agent in exercising
any power or right hereunder or to demand payment for any sums due pursuant to
this Loan Agreement or any other Loan Document, shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other further exercise thereof or the exercise of any other right
or power.

 

SECTION 12.12.  Notices.  Except as may be otherwise expressly provided
herein, all notices, certificates, demands, requests, approvals, consents,
waivers and other communications provided for herein shall be in writing and (a) mailed
(registered or certified mail, return receipt requested, and postage prepaid), (b) hand-delivered,
with signed receipt, or (c) sent by nationally-recognized overnight
courier as follows:

 

If to
Borrower, to its address at:

 

First
States Investors 3300 B, L.P.

c/o
American Financial Realty Trust

c/o Gramercy Capital Corp.

420
Lexington Avenue

New
York, NY  10170

Attention:  Office of the General Counsel

 

and

 

c/o
American Financial Realty Trust

c/o Gramercy Capital Corp.

420
Lexington Avenue, 19th Floor

New
York, New York 10170

Attention:  Marc Holliday

 

with a
copy similarly delivered to:

 

c/o
American Financial Realty Trust

c/o Gramercy Capital Corp.

420
Lexington Avenue, 19th Floor

 

117

 

New
York, New York 10170

Attention:  Office of the General Counsel

 

with a
copy similarly delivered to:

 

Greenberg
Traurig, LLP

200 Park Avenue

New York, NY  10116

Attention:  Robert J. Ivanhoe, Esq.

 

If to
Agent, to:

 

PB
Capital Corporation

230 Park Avenue, 19th Floor

New York, New York  10169

Attention:  Real Estate Portfolio
Management

 

with a
copy similarly delivered to:

 

Kaye
Scholer LLP

425 Park Avenue

New York, New York  10022

Attention:  Warren J. Bernstein, Esq.

 

If to
PB Capital, as a Lender, to:

 

PB
Capital Corporation

230 Park Avenue, 19th Floor

New York, New York  10169

Attention:  Real Estate Portfolio
Management

 

with a
copy similarly delivered to:

 

Kaye
Scholer LLP

425 Park Avenue

New York, New York  10022

Attention:  Warren J. Bernstein, Esq.

 

or to such other address with respect to any, as such
party shall notify the other parties in writing.  All such notices, certificates, demands,
requests, approvals, waivers and other communications given pursuant to this Section 12.12
shall be effective when received (or delivery is refused) at the address
specified as aforesaid.

 

SECTION 12.13.  Limitation on Liability.  All Obligations shall be recourse to
Borrower.  Notwithstanding anything to
the contrary contained in this Loan Agreement, in the Note, the Mortgages or in
the other Loan Documents, no recourse shall be had for the payment of the
principal, Interest, Additional Interest or other amounts owed hereunder or
under the Note 

 

118

 

or the other Loan Documents, or for any claim based on
this Loan Agreement, the Note or any other Loan Document, against any Borrower
Partner or any of its assets (other than from the interest of any Borrower
Partner in Borrower), or against any principal, partner, member, shareholder,
officer, director, agent or employee of Borrower or any Borrower Partner (other
than from the indirect interest of any such Person in Borrower), it being
expressly understood that the sole remedies of Agent and Lenders with respect
to such amounts and claims shall be against Borrower and the assets of
Borrower, including the Mortgaged Property, and other Collateral; provided,
however, that:

 

(a)          nothing
contained in this Loan Agreement (including the provisions of this Section 12.13),
the Note or the other Loan Documents shall constitute a waiver of any of
Borrower’s obligations herein, under the Note or the other Loan Documents, or
of any of any obligations of Guarantor (including, to the extent a direct or
indirect member of Borrower) under the Loan Documents to which it is a party;

 

(b)         nothing
contained in this Loan Agreement (including the provisions of this Section 12.13),
the Note or the other Loan Documents shall constitute a limitation of liability
of Borrower or any of its assets; and

 

(c)          nothing
contained in this Loan Agreement (including the provisions of this Section 12.13),
the Note or the other Loan Documents shall constitute a limitation of liability
of Guarantor or any of its respective assets with respect to the Recourse
Liability Agreement, the Interest Rate Protection Guaranty, the Environmental
Indemnity or any other guaranty or indemnity agreement given by it in
connection with the Loan, as applicable.

 

SECTION 12.14.  Binding Effect.  This Loan Agreement shall be binding upon and
inure to the benefit of Agent and Lenders and their respective permitted
successors and assigns, including any replacement “Agent” hereunder, and
Borrower and its permitted successors and assigns.

 

SECTION 12.15.  Severability of Provisions.  Any provision of this Loan Agreement which is
prohibited or unenforceable in the State of New York or in any other
jurisdiction in the United States shall be, as to the State of New York or such
other jurisdiction in the United States, ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such provisions in any
other jurisdiction.

 

SECTION 12.16.  Governing Law and Consent to
Jurisdiction.  This Loan Agreement
shall be governed by, and construed in accordance with, the substantive laws of
the State of New York.  Borrower, Agent
and Lenders irrevocably (a) agree that any suit, action or other legal
proceeding arising out of or relating to this Loan Agreement, the Note or the
other Loan Documents may be brought in the Courts of the United States of
America located in the Southern District of New York or in a state court of
record in New York County, New York, (b) consent to the jurisdiction of
each such court in any such suit, action or proceeding and (c) waive any
objection which it may have to the laying of venue of any such suit, action or
proceeding in any of such courts and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum.  Borrower irrevocably consents to the service
of any and all 

 

119

 

process in any such suit, action or proceeding by
service of copies of such process to Borrower at its address provided in Section 12.12
hereof.  Nothing in this Section 12.16,
however, shall affect the right of Agent to serve legal process in any other
manner permitted by law or affect the right of Agent to bring any suit, action
or proceeding against Borrower or its property in the courts of any other
jurisdictions.

 

SECTION 12.17.  Waiver of Jury Trial.  Borrower, Agent and Lenders each hereby
expressly and unconditionally waives any and every right either party may have
to a trial by jury, in any suit, action or proceeding brought under or with
respect to this Loan Agreement, the Note or the other Loan Documents.

 

SECTION 12.18.  No Joint Venture.  Borrower is not and shall not be deemed to be
a joint venturer, partner, tenant in common or joint tenant with, or an agent
of, Agent or Lenders for any purpose. 
Neither Agent nor Lenders shall be deemed to be in privity of contract
with any Person providing services with respect to the construction at any
Property or the operation, leasing, management, maintenance, repair, marketing
or sale of any Property unless and until and except to the extent that Agent
shall affirmatively act to establish any such privity pursuant to Article IX
hereof, or in the exercise of Agent’s and Lenders’ remedies pursuant to any
Mortgage, the Assignment of Agreements or any other Loan Document.

 

SECTION 12.19.  Determinations and Consents of
Agent.  Unless expressly provided to
the contrary in any particular instance, any determination, election or
judgment made or any consent or waiver given by Agent pursuant to this Loan
Agreement or any other Loan Document shall be made or given, as the case may
be, in Agent’s sole and absolute discretion, whether or not the applicable
provision of this Loan Agreement or such other Loan Document expressly so
provides.  In making any such
determination, election or judgment or in providing or deciding not to provide
any such consent or waiver, Agent shall be entitled to rely, to the extent
Agent so elects, in whole or in part on the advice of counsel (including
counsel for Borrower or Guarantor), independent public accountants, engineers,
architects, and other experts selected by Agent.

 

SECTION 12.20.  Reliance by Agent on Action on
Behalf of Borrower.  Agent shall be
entitled to rely on any notice, communication or other action taken by any
Person purporting to sign as the officer, general partner or other authorized
agent, signatory, representative or agent of Borrower or any Borrower Partner
purporting to be taken on Borrower’s or any Borrower Partner’s behalf (or on
any Borrower Partner’s behalf on behalf of Borrower) as being conclusive
evidence of Borrower’s or any Borrower Partner’s right to take such action and,
in doing so, bind Borrower or any Borrower Partner, as applicable, to the
action taken.

 

SECTION 12.21.  Headings, Etc.  The headings and captions of various sections
of this Loan Agreement have been inserted for convenience only and are not to
be construed as defining, modifying, limiting or amplifying, in any way, the
scope or intent of the provisions hereof.

 

SECTION 12.22.  Incorporation by Reference.  Borrower agrees that the Note and the other
Loan Documents shall be made subject to all the terms, covenants, conditions, 

 

120

 

obligations, stipulations and agreements contained in
this Loan Agreement to the same extent and effect as if fully set forth in and
made a part of the Note and the other Loan Documents.  In the event of a conflict between any of the
Loan Documents and the provisions of this Loan Agreement, this Loan Agreement
shall control.

 

SECTION 12.23.  Counterparts.  This Loan Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Loan Agreement
to produce or account for more than one such counterpart.

 

SECTION 12.24.  Attorneys’ Fees.  Any provisions of this Loan Agreement or any
other Loan Document that require payment to Agent or Lenders of legal fees or
expenses incurred by any of them shall be construed as including any and all
such fees and expenses incurred in connection with litigation, mediation,
arbitration, other alternative dispute processes, administration proceedings
and bankruptcy proceedings, and any appeals from any of the foregoing.

 

SECTION 12.25.  Employer Identification Number
Etc.  Borrower acknowledges that in
order for Lenders to comply with the requirements under the Patriot Act,
Borrower must provide to Agent certain information or supporting documentation
(collectively “Documentation”) at the time of execution of this Loan
Agreement.  Lenders may be required by
the Patriot Act to verify and record any Documentation provided by Borrower to
validate Borrower’s identity. 
Documentation that may be requested from Borrower may include, but is
not limited to, a Federal Employer Identification Number (FEIN), a Certificate
of Good Standing to validate Borrower’s corporate, partnership or limited
liability company existence, a Certificate of Incumbency to authenticate the
management of Borrower, and other government issued certified documents to
validate Borrower’s authorization to conduct business.

 

[The remainder of this page is intentionally left
blank.]

 

121

 

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

 

	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRST STATES INVESTORS 3300 B,
  L.P.,

  
	
   

  	
  a Delaware limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Andrew S. Levine

  
	
   

  	
   

  	
  Name:

  	
  Andrew S. Levine

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
					

 

[Signatures continued on next page.]

 

 

	
   

  	
  AGENT:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PB CAPITAL CORPORATION,
  a Delaware 

  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel
  T. Cerull

  
	
   

  	
   

  	
  Name:

  	
  Daniel T. Cerull

  
	
   

  	
   

  	
  Title:

  	
  Senior Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  Oh

  
	
   

  	
   

  	
  Name:

  	
  Jonathan Oh

  
	
   

  	
   

  	
  Title:

  	
  Senior Director

  
					

 

 

	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PB CAPITAL CORPORATION,
  a Delaware 

  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel
  T. Cerull

  
	
   

  	
   

  	
  Name:

  	
  Daniel T. Cerull

  
	
   

  	
   

  	
  Title:

  	
  Senior Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan
  Oh

  
	
   

  	
   

  	
  Name:

  	
  Jonathan Oh

  
	
   

  	
   

  	
  Title:

  	
  Senior DirectorExhibit 10.4

 

AMENDED AND
RESTATED

LOAN
AGREEMENT

 

Dated as of April 1,
2008

 

by and among

 

FIRST STATES INVESTORS DB I,
L.P., and

FIRST STATES INVESTORS DB I B,
L.P.,

as Holding Company Borrowers,

FIRST STATES INVESTORS 4200, LLC,

FIRST STATES INVESTORS DB I SP,
L.P., and

FIRST STATES INVESTORS DB I TRS,
L.P.,

as Current
Property-Owning Borrowers, and

any Future
Property-Owning Borrower that joins the Loan Agreement from time to time,

collectively as Borrower,

 

DEUTSCHE BANK AG, CAYMAN ISLANDS
BRANCH

as Agent,

 

LASALLE BANK NATIONAL ASSOCIATION

as Collateral Agent

 

and

 

Each Lender
Signatory hereto

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I.

  	
  CERTAIN DEFINITIONS

  	
  2

  
	
  Section 1.1.

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
  CONDITIONS PRECEDENT

  	
  30

  
	
  Section 2.1.

  	
  Conditions Precedent to Closing

  	
  30

  
	
  Section 2.2.

  	
  Execution and Delivery of Agreement

  	
  32

  
	
  Section 2.3.

  	
  Advance Procedure.

  	
  32

  
	
  Section 2.4.

  	
  Initial and Subsequent Advances

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
  GENERAL TERMS

  	
  38

  
	
  Section 3.1.

  	
  The Loan

  	
  38

  
	
  Section 3.2.

  	
  Use of Proceeds

  	
  39

  
	
  Section 3.3.

  	
  Security for the Loan

  	
  39

  
	
  Section 3.4.

  	
  Borrower’s Note

  	
  39

  
	
  Section 3.5.

  	
  Repayment of Advances; Interest

  	
  39

  
	
  Section 3.6.

  	
  Voluntary Prepayment

  	
  40

  
	
  Section 3.7.

  	
  Mandatory Prepayment; Capital Events; Certain Transfers

  	
  40

  
	
  Section 3.8.

  	
  Application of Payments After Event of Default

  	
  41

  
	
  Section 3.9.

  	
  Method and Place of Payment From the Collection Account to Agent

  	
  42

  
	
  Section 3.10.

  	
  Taxes

  	
  42

  
	
  Section 3.11.

  	
  Release of Collateral

  	
  42

  
	
  Section 3.12.

  	
  Central Cash Management

  	
  43

  
	
  Section 3.13.

  	
  Reserve Account

  	
  47

  
	
  Section 3.14.

  	
  Additional Provisions Relating to the Collection Account and the Reserve
  Account

  	
  51

  
	
  Section 3.15.

  	
  Security Agreement

  	
  52

  
	
  Section 3.16.

  	
  Real Estate Security Documents; Mortgage Recording Taxes

  	
  54

  
	
  Section 3.17.

  	
  Taxes

  	
  55

  
	
  Section 3.18.

  	
  General Collateral Agent Provisions

  	
  56

  
	
  Section 3.19.

  	
  Indemnity

  	
  59

  
	
  Section 3.20.

  	
  Inability to Determine Interest Rate; Illegality

  	
  59

  
	
  Section 3.21.

  	
  Requirements of Law

  	
  60

  
	
  Section 3.22.

  	
  Extension Option

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
  61

  
	
  Section 4.1.

  	
  Representations and Warranties as to Borrower

  	
  61

  
	
  Section 4.2.

  	
  Representations and Warranties as to Each Property

  	
  67

  
	
  Section 4.3.

  	
  Survival of Representations

  	
  74

  
	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
  AFFIRMATIVE COVENANTS

  	
  74

  
	
  Section 5.1.

  	
  Affirmative Covenants

  	
  74

  

 

i

 

	
  ARTICLE VI.

  	
  NEGATIVE COVENANTS

  	
  100

  
	
  Section 6.1.

  	
  Negative Covenants

  	
  100

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
  EVENT OF DEFAULT

  	
  103

  
	
  Section 7.1.

  	
  Event of Default

  	
  103

  
	
  Section 7.2.

  	
  Remedies

  	
  105

  
	
  Section 7.3.

  	
  Remedies Cumulative

  	
  106

  
	
  Section 7.4.

  	
  Curative Advances

  	
  106

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  	
  MISCELLANEOUS

  	
  106

  
	
  Section 8.1.

  	
  Survival

  	
  106

  
	
  Section 8.2.

  	
  Agent’s Discretion

  	
  107

  
	
  Section 8.3.

  	
  Governing Law

  	
  107

  
	
  Section 8.4.

  	
  Modification, Waiver in Writing

  	
  107

  
	
  Section 8.5.

  	
  Delay Not a Waiver

  	
  108

  
	
  Section 8.6.

  	
  Notices

  	
  108

  
	
  Section 8.7.

  	
  TRIAL BY JURY

  	
  108

  
	
  Section 8.8.

  	
  Headings

  	
  108

  
	
  Section 8.9.

  	
  Assignment.

  	
  109

  
	
  Section 8.10.

  	
  Severability

  	
  109

  
	
  Section 8.11.

  	
  Preferences

  	
  109

  
	
  Section 8.12.

  	
  Waiver of Notice

  	
  110

  
	
  Section 8.13.

  	
  Failure to Consent

  	
  110

  
	
  Section 8.14.

  	
  Schedules Incorporated

  	
  110

  
	
  Section 8.15.

  	
  Offsets, Counterclaims and Defenses

  	
  110

  
	
  Section 8.16.

  	
  No Joint Venture or Partnership

  	
  110

  
	
  Section 8.17.

  	
  Waiver of Marshalling of Assets Defense

  	
  111

  
	
  Section 8.18.

  	
  Waiver of Counterclaim

  	
  111

  
	
  Section 8.19.

  	
  Conflict; Construction of Documents

  	
  111

  
	
  Section 8.20.

  	
  Brokers and Financial Advisors

  	
  111

  
	
  Section 8.21.

  	
  Counterparts

  	
  111

  
	
  Section 8.22.

  	
  Estoppel Certificates

  	
  111

  
	
  Section 8.23.

  	
  Payment of Expenses

  	
  112

  
	
  Section 8.24.

  	
  Non-Recourse

  	
  112

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX.

  	
  THE AGENT

  	
  113

  
	
  Section 9.1.

  	
  Appointment, Powers and Immunities

  	
  113

  
	
  Section 9.2.

  	
  Reliance by Agent

  	
  113

  
	
  Section 9.3.

  	
  Defaults

  	
  114

  
	
  Section 9.4.

  	
  Rights as a Lender

  	
  114

  
	
  Section 9.5.

  	
  Indemnification

  	
  114

  
	
  Section 9.6.

  	
  Non-Reliance on Agent and Other Lenders

  	
  114

  
	
  Section 9.7.

  	
  Failure to Act

  	
  115

  
	
  Section 9.8.

  	
  Resignation of Agent

  	
  115

  
	
  Section 9.9.

  	
  Agency Fee

  	
  115

  
	
  Section 9.10.

  	
  Consents under Loan Documents

  	
  115

  
	
  Section 9.11.

  	
  Notices, Reports and Other Communications

  	
  116

  

 

ii

 

SCHEDULES

 

Schedule
I             –              List of Current Property-Owning Borrowers

 

Schedule
II            –              List of Property as of the Closing Date

 

Schedule
III           –              List of Loan Documents as of the Closing Date

 

Schedule
IV           –              List of Regions Properties

 

Schedule
V            –              List of Borrowers’ Organizational Identification

 

Schedule
VI           –              Exceptions to Representations and Warranties

 

iii

 

AMENDED AND RESTATED LOAN
AGREEMENT

 

THIS AMENDED AND RESTATED LOAN AGREEMENT,
made as of April 1, 2008, is by and among: (i) FIRST STATES
INVESTORS DB I, L.P., a Delaware limited partnership and FIRST STATES INVESTORS DB I B, L.P., a Delaware limited
partnership, as the parent entities of each applicable Current Property-Owning
Borrower and each applicable Future Property-Owning Borrower (each as
hereinafter defined) (individually or collectively, as applicable, the “Holding
Company Borrower”), FIRST STATES INVESTORS
4200, LLC, a Delaware limited liability company, FIRST STATES INVESTORS DB I SP, L.P., a Delaware limited
partnership, and FIRST STATES INVESTORS DB I TRS, L.P.,
a Delaware limited partnership (individually or collectively, as applicable, a “Current
Property-Owning Borrower”), and each wholly-owned subsidiary entity of the
applicable Holding Company Borrower that owns a Property and from time to time
joins this Agreement as an additional Borrower after the date hereof
(individually or collectively, as applicable, a “Future Property-Owning
Borrower”), each having an address at c/o American Financial Realty Trust,
c/o Gramercy Capital Corp., 420 Lexington Avenue, New York,  New York 
10170 (the Holding Company Borrower, each Current Property-Owning
Borrower and each Future Property-Owning Borrower collectively, the “Borrower”);
each of the financial institutions signatory hereto that is identified as a “Lender”
on the signature pages hereto or that, pursuant to Section 8.9
hereof, shall become a “Lender” hereunder (individually, a “Lender”, and
collectively, the “Lenders”); (ii) DEUTSCHE BANK
AG, CAYMAN ISLANDS BRANCH, a branch of a foreign banking
institution, having an address at 60 Wall Street, 10th Floor, New York, New
York as agent for the Lenders (in such capacity together with its successors in
such capacity, the “Agent”); and (iii) LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, having an
address at 135 South LaSalle Street, Suite 1625, Chicago, Illinois 60603,
as a “bank” (as defined in Section 9-102(a)(8) of the UCC), as a “securities
intermediary” (as defined in Section 8-102(a)(14) of the UCC) and as
collateral agent for the Lenders (as used herein, “Collateral Agent”
shall refer to LaSalle Bank National Association in each such capacity as the
context requires together with any successor thereto).

 

RECITALS

 

WHEREAS, pursuant to that certain Loan
Agreement dated as of July 18, 2003 (the “Original Closing Date”),
as amended by that certain First Amendment to Loan Agreement, dated August 9,
2004, that certain Second Amendment to Loan Agreement, dated September 30,
2004, and that certain Third Amendment to Loan Agreement, dated September 30,
2005 (together, the “Original Loan Agreement”), by and among First
States Investors DB I, LLC (the “Original Holding Company Borrower”),
various wholly-owned subsidiary entities of the Original Holding Company
Borrower that owned Property and joined the Original Loan Agreement (the “Original
Property-Owning Borrowers”), the Agent on behalf of the Lenders and the
Collateral Agent, the Original Holding Company Borrower and various of the
Original Property-Owning Borrowers obtained a series of loan advances from
Agent (the “Original Loan”) to provide financing for portions of the
acquisition cost of CTL Property and Conduit CMBS Property that the Original
Holding Company Borrower and various of the Original Property-Owning Borrowers
acquired and to pay certain other fees and expenses;

 

 

WHEREAS, Gramercy Capital Corp., a Maryland
corporation, has entered into a definitive merger agreement to acquire American
Financial Realty Trust, which would result in the loan under the Original Loan
Agreement being due and payable;

 

WHEREAS, Gramercy Capital Corp., a Maryland
corporation, has requested that the Agent amend and restate the Original Loan
Agreement and those certain other loan documents that evidenced the Original
Loan as set forth herein and in the Loan Documents;

 

WHEREAS, the Agent is unwilling to amend and
restate the Original Loan Agreement unless the Borrower joins in the execution
and delivery of this Agreement, the Note and the other Loan Documents (each as
hereinafter defined) which shall establish the terms and conditions of the Loan
as amended and restated;

 

WHEREAS, Borrower desires to obtain a series
of loan advances (as have been advanced prior to the date hereof pursuant to
the Original Loan Agreement and as may be advanced in the future in accordance
herewith, each, an “Advance” and collectively, the “Loan”) to
provide financing for portions of the acquisition cost of CTL Property and
Conduit CMBS Property that the Holding Company Borrowers, Current
Property-Owning Borrowers and Future Property-Owning Borrowers acquire and to
pay certain other fees and expenses;

 

WHEREAS, the aggregate amount of Advances
from Agent at any time shall not exceed $100,000,000 (the “Loan Amount”);

 

WHEREAS, as of the date hereof the
outstanding Principal Indebtedness equals $95,000,000 (the “Closing Date
Loan Amount”) and the Property that indirectly secures the Loan is set
forth on Schedule II attached hereto;

 

WHEREAS, Borrower has agreed to establish
certain accounts and to grant to the Agent on behalf of, and for the benefit
of, the Lenders, a security interest therein upon the terms and conditions of
the security agreement set forth in Section 3.15; and

 

WHEREAS, LaSalle Bank National Association,
in its capacity as collateral agent, bank and securities intermediary is
willing to join in this Agreement in such capacities.

 

NOW, THEREFORE, in consideration of the
making of the Loan by the Lenders and for other good and valuable consideration,
the mutual receipt and legal sufficiency of which are hereby acknowledged, the
parties hereby covenant, agree, represent and warrant as follows:

 

ARTICLE I.

CERTAIN DEFINITIONS

 

Section 1.1.            Definitions. 
For all purposes of this Agreement: 
(1) the capitalized terms defined in this Article I
have the meanings assigned to them in this Article I and include
the plural as well as the singular; (2) all accounting terms have the
meanings assigned to them in accordance with GAAP (as hereinafter defined); (3) the
words “herein”, “hereof’, and “hereunder” and other words of similar import
refer to this Agreement as a whole 

 

2

 

and not to any particular Article, Section, or other subdivision; and (4) the
following terms have the following meanings:

 

“4200 Holdings” means First States
Investors 4200 Holdings, LLC, a Delaware limited liability company.

 

“Accepted Practices” means such
customary practices as commercial mortgage collateral agents or banks would
follow in the normal course of their business in performing administrative and
custodial duties with respect to collateral which is generally similar to the
Account Collateral; provided, however, that “Accepted
Practices” shall not be deemed to include any custodial practices now
followed by Collateral Agent for any such collateral held for its own account
to the extent that such practices are more stringent than the practices
followed by commercial mortgage collateral agents or banks generally.

 

“Account Collateral” has the meaning
set forth in Section 3.15(a) hereof.

 

“Accounts” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under all “accounts” as defined in the UCC.

 

“Acquisition Cost” means, with respect
to each acquisition of Property, the related purchase price plus related
reasonable out-of-pocket costs and expenses approved by the Agent.

 

“Advance” has the meaning set forth in
the Recitals hereto.

 

“Advance Closing Date” means each date
on which an Advance is made hereunder to provide Property-Owning Borrower with
funds to acquire Property pursuant to Sections 2.3 and 2.4.

 

“Advance Percentage” means 80%.

 

“Advance Rate” means, with respect to
each Advance for Property, the product of the Advance Percentage and the lesser
of (x) the related Capital Markets Execution and (y) the related
Acquisition Cost.

 

“Advisory Fee” has the meaning
ascribed to such term in the Advisory Fee Letter.

 

“Advisory Fee Letter” means that
certain letter agreement by and between Gramercy Capital Corp., and Deutsche
Bank Securities Inc., dated as of April 1, 2008.

 

“Affiliate” of any specified Person
means any other Person controlling or controlled by or under common control
with such specified Person. For the purposes of this definition, “control” when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities or other beneficial interests, by contract
or otherwise; and the terms “controlling” and “controlled” have the meanings
correlative to the foregoing.

 

“Agent” has the meaning provided in
the first paragraph of this Agreement.

 

3

 

“Agreement” means this Loan Agreement,
together with the Schedules and Exhibits hereto, as the same may from time to
time hereafter be modified, supplemented or amended.

 

“Alternative Rate” shall have the
meaning assigned to such term in Section 3.20(a).

 

“Alternative Rate Transaction” shall
mean, with respect to any Interest Accrual Period, any Advance with respect to
which the interest rate for such Interest Period is determined with reference
to the Alternative Rate.

 

“Applicable Margin”
means three hundred basis points (3.00%).

 

 “Appraisal”
means an appraisal with respect to the Property prepared by an Appraiser in
accordance with the Uniform Standards of Professional Appraisal Practice of the
Appraisal Foundation, in compliance with the requirements of Title 11 of the
Financial Institution Reform, Recovery and Enforcement Act and utilizing
customary valuation methods such as the income, sales/market or cost
approaches.

 

“Appraiser” means a nationally
recognized MAI appraiser selected by Borrower and reasonably approved by the
Agent.

 

“Assignment of Leases and Rents”
means, with respect to each Property, an Assignment of Rents and Leases, dated
as of the applicable Advance Closing Date, granted by the applicable
Property-Owning Borrower to Agent for the benefit of the Lenders with respect
to the related Leases, as same may thereafter from time to time be
supplemented, amended, modified or extended by one or more agreements
supplemental thereto.

 

“Basic Carrying Costs” means the
following costs with respect to the Property: 
(i) Impositions and (ii) insurance premiums for policies of
insurance required to be maintained by Property-Owning Borrower pursuant to
this Agreement or the other Loan Documents.

 

“Borrower” has the meaning provided in
the first paragraph of this Agreement. All references in this Agreement to
Borrower shall be deemed to include and be equally applicable to the Holding
Company Borrowers and any Property-Owning Borrower.

 

“Business Day” means any day other
than a Saturday, a Sunday or a day on which commercial banks in the State of
New York or Illinois are authorized or obligated by law, governmental decree or
executive order to be closed. When used with respect to an Interest
Determination Date, “Business Day” shall mean any day other than a Saturday,
a Sunday or a day on which banks in London, England are closed for interbank or
foreign exchange transactions.

 

“Capital Event” means any transfer,
sale, assignment, conveyance, liquidation, or disposition (other than a Taking)
of a Property and “Capital Events” shall have a meaning correlative to
the foregoing.

 

4

 

“Capital Event Proceeds” means any
cash proceeds of a Capital Event received by the Borrower net of any cash
prorations, adjustments and credits with respect to such Capital Event and net
of reasonable third-party expenses paid in connection with such Capital Event.

 

“Capital Improvement Costs” means
costs incurred or to be incurred in connection with replacements and capital
repairs made to the Property (including without limitation, TI Costs and
Leasing Commissions).

 

“Capital Markets Execution” means,
with respect to each Property and the related Advance, the maximum amount of
debt financing that can be issued with respect to such Property as determined
by the Agent in its good faith business judgment; provided, that,
notwithstanding the foregoing, such amount of debt financing shall be subject
to a cap equal to seventy percent (70%) of the value of the related Property as
determined by the Agent in its good faith business judgment.

 

“Chattel Paper” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under all “chattel paper” as defined in the UCC
(whether tangible chattel paper or electronic chattel paper).

 

“Closing Date” means the date of the
execution of this Agreement.

 

“Closing Date Loan Amount” has the
meaning set forth in the Recitals hereto.

 

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

 

“Collateral” means, (x) so long
as an Event of Default under the Loan has not occurred and is not continuing,
the entire legal and beneficial ownership interests in each Property-Owning
Borrower pledged pursuant to the applicable Pledge Agreement (Property-Owning
Borrower) and (y) after the occurrence and during the continuance of an
Event of Default, collectively, the Land, Improvements, Leases, Rents,
Personalty, and all Proceeds, and (to the full extent assignable) Permits,
which is or hereafter may become subject to a Lien in favor of the Agent on
behalf of the Lenders as security for the Loan (whether pursuant to the
Mortgages, any other Loan Document or otherwise), all whether now owned or
hereafter acquired and all other property which is or hereafter may become
subject to a Lien in favor of the Agent on behalf of the Lenders as security
for the Loan and including all property of any kind described as part of the
Property under the Mortgages.

 

“Collateral Agent” has the meaning
specified in the introductory paragraph of this Agreement.

 

“Collateral Assignment of the Master License
Agreement” has the meaning provided in Section 2.1(o).

 

5

 

“Collateral Information” means with
respect to any asset acquisition proposed to be financed with the proceeds of
an Advance, all information relating to such asset as may be reasonably
requested by Agent.

 

“Collateral Security Instrument” means
any right, document or instrument, other than the Mortgages, given as security
for the Loan, including, without limitation, the Pledge Agreements.

 

“Collection Account” has the meaning
set forth in Section 3.12(a) hereof.

 

“Collection Period” means, with
respect to any Payment Date, the period commencing on and including the
eleventh (11th) day in the month preceding the month in which such Payment Date
occurs through and including the tenth (l0th) day in the immediately succeeding
month in which such Payment Date occurs; provided, however, that
in the case of the first Payment Date, the “Collection Period” shall
commence on the initial Advance Closing Date.

 

 “Condemnation
Proceeds” means, in the event of a Taking with respect to the Property, the
proceeds in respect of such Taking less any reasonable third party
out-of-pocket expenses incurred in collecting such proceeds.

 

“Conduit CMBS Property” means a multi-tenant
property or a commercial property (including a retail, office, warehouse
property, but excluding raw land) suitable for inclusion in a conduit
commercial mortgage-backed securities offering.

 

“Consumer Price Index” means the
Consumer Price Index for All Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of Labor, in the area where the
Property is located; All Items (1982-84 = 100), or any successor index thereto,
appropriately adjusted and if the Consumer Price Index ceases to be published
and there is no successor thereto, such other index as Agent and Borrower shall
mutually agree upon.

 

“Contingent Obligation” means, as used
in the definition of Other Borrowings, without duplication, any obligation of Borrower
guaranteeing any indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly. Without limiting the generality of the
foregoing, the term “Contingent Obligation” shall include any obligation
of Borrower:

 

(i)            to
purchase any such primary obligation or any property constituting direct or
indirect security therefor;

 

(ii)           to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the
primary obligor;

 

(iii)          to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation; or

 

6

 

 

(iv)          otherwise
to assure or hold harmless the holder of such primary obligation against loss
in respect thereof.

 

The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming Borrower is required to perform thereunder) as
determined by Agent in good faith.

 

“Contract Assignment” means, with
respect to each Property, the Assignment of Contracts, Licenses, Permits,
Agreements, Warranties and Approvals, dated as of the applicable Advance
Closing Date and granted by the applicable Property-Owning Borrower to Agent
for the benefit of the Lenders with respect to the related Contracts, as same
may thereafter from time to time be supplemented, amended, modified or extended
by one or more agreements supplemental thereto.

 

“Contracts” means the Management
Agreement and all other agreements to which the applicable Property-Owning
Borrower is a party or which are assigned to the applicable Property-Owning
Borrower by the applicable Manager in the applicable Management Agreement and
which are executed in connection with the construction, operation and
management of the Property (including, without limitation, agreements for the
sale, lease or exchange of goods or other property and/or the performance of
services by it, in each case whether now in existence or hereafter arising or acquired)
as any such agreements have been or may be from time to time amended,
supplemented or otherwise modified.

 

“Credit Lease” means a Triple Net
Lease, a Double Net Lease or a bond-type lease to a tenant acceptable to the
Agent that occupies and/or is master lessor to subtenants that occupy the
related Property.

 

“CTL Property” means a commercial
property that is subject to a Credit Lease.

 

“Current Property-Owning Borrower” has
the meaning set forth in the Recitals hereto.

 

“Deed of Trust Trustee” means the
trustee under the Mortgage that constitutes a “deed of trust” under applicable
law.

 

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

 

“Default Rate” means the per annum
interest rate equal to the lesser of (a) 4.0% per annum in excess of the
rate otherwise applicable hereunder and (b) the maximum rate allowable by
applicable law.

 

“Deferred Maintenance Escrow Account”
has the meaning set forth in Section 3.13(a).

 

“Deficient Amount” has the meaning set
forth in Section 5.1(x)(iv)(B).

 

7

 

“Deposit Account” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under all “deposit accounts” as defined in the
UCC.

 

“Diligence Materials” means,
collectively, the Preliminary Due Diligence Package and the Supplemental Due
Diligence List.

 

“Documents” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under all “documents” as defined in the UCC
(whether negotiable or non-negotiable) or other receipts covering, evidencing
or representing goods.

 

“Double Net Lease” shall mean a lease
under which the tenant pays for all or substantially all of any two of the
following for the Property:  (i) real
estate property taxes; (ii) property insurance; and (iii) operating
expenses.

 

“Eligible Account” means a separate
and identifiable account from all other funds held by the holding institution
that is:  (i) an account maintained
with a federal or state chartered depository institution or trust company whose
(1) commercial paper, short-term debt obligations or other short-term
deposits are rated by the Rating Agencies not less than “A-l”(or the
equivalent), if the deposits are to be held in the account for thirty (30) days
or less or (2) long-term unsecured debt obligations are rated at least “AA”
(or the equivalent), if the deposits are to be held in the account more than
thirty (30) days or (ii) a segregated trust account maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company subject to regulations regarding fiduciary funds
on deposit similar to Title 12 of the Code of Federal Regulations Section 9.10(b) which,
in either case, has corporate trust powers, acting in its fiduciary capacity.
An Eligible Account shall not be evidenced by a certificate of deposit,
passbook, other instrument or any other physical indicia of ownership.
Following a downgrade, withdrawal, qualification or suspension of such
institution’s rating, each account must promptly (and in any case within not
more than thirty (30) calendar days) be moved to a qualifying institution or to
one or more segregated trust accounts in the trust department of such
institution, if permitted.

 

“Embargoed Person” has the meaning set
forth in Section 4.1(w).

 

“Engineer” means an Independent
Engineer selected by Borrower and reasonably approved by Agent.

 

“Engineering Report” means the
structural engineering reports with respect to the Property prepared by an
Engineer and delivered to Agent in connection with each Advance and any
amendments or supplements thereto delivered to Agent.

 

“Environmental Auditor” means an
Independent environmental auditor selected by Borrower and reasonably approved
by Agent.

 

“Environmental Claim” means any
notice, notification, request for information, claim, administrative,
regulatory or judicial action, suit, judgment, demand or other written 

 

8

 

communication (whether
written or oral) by any Person or Governmental Authority alleging or asserting
liability with respect to Borrower or the Property (whether for damages,
contribution, indemnification, cost recovery, compensation, injunctive relief,
investigatory, response, remedial or cleanup costs, damages to natural
resources, personal injuries, fines or penalties) arising out of, based on or
resulting from (i) the presence, Use or Release into the environment of
any Hazardous Substance at any location (whether or not owned, managed or
operated by Borrower) that affects the Property, (ii) any fact,
circumstance, condition or occurrence forming the basis of any violation, or
alleged violation, of any Environmental Law with respect to the Property or (iii) any
alleged injury or threat of injury to human health, safety or the environment
with respect to the Property.

 

“Environmental Indemnity Agreement”
means that certain Amended and Restated Environmental Indemnity Agreement,
dated as of the date hereof, from the Borrower and Gramercy Capital Corp., as
indemnitors, to the Lenders, Agent and Collateral Agent, as indemnitees.

 

“Environmental Laws” means any and all
present and future federal, state or local laws, statutes, ordinances, rules or
regulations, or any judicial interpretation thereof, any judicial or
administrative orders, decrees or judgments thereunder issued by a Governmental
Authority, and any permits, approvals, licenses, registrations, filings and
authorizations, in each case as now or hereafter in effect, relating to the
environment, human health or safety, or the Release or threatened Release of
Hazardous Substances or otherwise relating to the Use of Hazardous Substances.

 

“Environmental Reports” means a “Phase
I Environmental Site Assessment” (and, if such Phase I Environmental Site
Assessment identifies any recognized environmental conditions requiring further
investigation, a “Phase II Environment Site Assessment” with respect to such
recognized environmental conditions) as referred to in the ASTM Standards on
Environmental Site Assessments for Commercial Real Estate, E 1527-00 and an
asbestos survey (if available), with respect to the Property, prepared by an
Environmental Auditor and delivered to Agent in connection with each Advance
and any amendments or supplements thereto delivered to Agent.

 

“EO13224” has the meaning set forth in
Section 4.1(v).

 

“Equipment” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under (i) all “equipment” as defined in the
UCC, and (ii) all of the following (regardless of how classified under the
UCC):  all building materials,
construction materials, personal property constituting furniture, fittings,
appliances, apparatus, leasehold improvements, machinery, devices, interior
improvements, appurtenances, equipment, plant, furnishings, fixtures,
computers, electronic data processing equipment, telecommunications equipment
and other fixed assets now owned or hereafter acquired by Property-Owning
Borrower, and all Proceeds of (i) and (ii) and as well as all
additions to, substitutions for, replacements of or accessions to any of the
items recited as aforesaid and all attachments, components, parts (including
spare parts) and accessories, whether installed thereon or affixed thereto, all
regardless of whether the same are located on such Property or are located
elsewhere (including, without limitation, in warehouses or other storage
facilities or in the 

 

9

 

possession of or on the
premises of a bailee, vendor or manufacturer) for purposes of manufacture,
storage, fabrication or transportation and all extensions and replacements to,
and proceeds of, any of the foregoing.

 

“ERISA” means 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 Agreement and, as of the relevant date, any
subsequent provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.

 

“ERISA Affiliate” means any
corporation or trade or business that is a member of any group of organizations
(i) described in Section 414(b) or (c) of the Code of which
Borrower is a member and (ii) 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) of ERISA and Section 412(n) of
the Code, described in Section 414(m) or (o) of the Code of
which Borrower is a member.

 

“Escrow Agreement” means, with respect
to the Real Estate Security Documents, the Escrow Agreement, to be entered into
by and among the Holding Company Borrowers on behalf of itself and each
Property-Owning Borrower, the Agent, the Collateral Agent, and the Title Agent,
as same may thereafter from time to time be supplemented, amended, modified or
extended by one or more agreements supplemental thereto.

 

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

 

“Extended
Maturity Date” has the meaning set forth in
Section 3.22(a).

 

“Extension Conditions” has the meaning
set forth in Section 3.22(a).

 

“Extension Fee” has the meaning set
forth in Section 3.22(a)(iv).

 

“Extension Notice” has the meaning set
forth in Section 3.22(a)(i).

 

“Extension Option” has the meaning set
forth in Section 3.22(a).

 

“Fee Letter” means the letter dated
the date hereof entered into between Borrower and the Collateral Agent, with
respect to the fees of the Collateral Agent under this Agreement.

 

“Fiscal Year” means the 12-month
period ending on December 31st of each year (or, in the case of the first
fiscal year, such shorter period from the Closing Date through such date) or
such other fiscal year of Borrower as Borrower may select from time to time
with the prior consent of Agent.

 

 “Fund”
has the meaning set forth in the definition of “Permitted Investments”.

 

 “Future
Property-Owning Borrower” has the meaning set forth in the Recitals hereto.

 

10

 

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

 

“General Intangibles” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under (i) all “general intangibles” as
defined in the relevant UCC, now owned or hereafter acquired by Property-Owning
Borrower and (ii) all of the following (regardless of how
characterized):  all agreements,
covenants, restrictions or encumbrances affecting the Property or any part
thereof.

 

“General Partner” means, individually
or collectively, as applicable, (i) First States Investors DB I GP, LLC, a
Delaware limited liability company, as general partner of First States
Investors DB I, L.P., and (ii) First States Investors DB I B GP, LLC, a
Delaware limited liability company, as general partner of First States
Investors DB I B, L.P.

 

“Governmental Authority” means any
national or federal government, any state, regional, local or other political
subdivision thereof with jurisdiction and any Person with jurisdiction
exercising executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government.

 

“Gross Revenue” means, for any period,
the total dollar amount of all income and receipts received by, or for the
account of, Property-Owning Borrower in the ordinary course of business with
respect to the Property, but excluding Loss Proceeds (other than the proceeds
of business interruption insurance or the proceeds of a temporary Taking in
lieu of Rents).

 

“Ground Lease” means any Property
owned by a Property-Owning Borrower which is a leasehold estate.

 

“Ground Lease Impairment” means with
respect to the Ground Lease:  (i) any
termination, cancellation or surrender (in each case in whole or in part and
whether or not pursuant to an express right contained in the Ground Lease); (ii) any
modification, amendment, supplementation, or other change affecting the Ground
Lease; (iii) any subordination, or consent to the subordination of the
Ground Lease to any mortgage or other Lien encumbering (or that may in the
future encumber) the estate of the lessor under the Ground Lease in any premise(s) demised
to Borrower under the Ground Lease; or (iv) Borrower’s delivery of any
notice to the lessor under the Ground Lease that impairs or may impair, or
purports to limit the exercise of Agent’s rights and remedies under the Mortgage
or the Ground Lease, whether caused by Borrower or suffered or permitted to
occur by Borrower.

 

“Ground Rent” means any and all
payments required of Borrower under the Ground Lease, including base rent,
fixed rent, additional rent, and any other payments, sums or charges payable or
required to be paid, whether to the ground lessor or to a third party, under
the Ground Lease.

 

“Guarantor” means Gramercy Capital
Corp., a Maryland corporation.

 

“Guaranty” means, with respect to the
Loan, that certain Guaranty from the Guarantor to the Agent for the benefit of
the Lenders.

 

11

 

“Hazardous Substance” means,
collectively, (i) any petroleum or petroleum products or waste oils,
explosives, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls (“PCBs”), lead-based paint and radon, (ii) any
chemicals or other materials or substances which are now or hereafter become
defined as or included in the definitions of “hazardous substances”, “hazardous
wastes”, “hazardous materials”, “extremely hazardous wastes”, “restricted
hazardous wastes”, “toxic substances”, “toxic pollutants”, “contaminants”, “pollutants”
or words of similar import under any Environmental Law and (iii) any other
chemical or any other hazardous material or substance, exposure to which is now
or hereafter prohibited, limited or regulated under any Environmental Law.

 

“Holding Company Borrower” has the
meaning provided in the first paragraph of this Agreement.

 

“Impositions” means 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, privilege or license or similar taxes),
assessments (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed within the term
of the Loan), ground rents, water, sewer or other rents and charges, excises,
levies, governmental 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,
foreseen or unforeseen, in respect of the Property (including all interest and
penalties thereon), accruing during or in respect of the term hereof and which
may be assessed against or imposed on or in respect of or be a Lien upon (1) Borrower
(including, without limitation, all income, 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 Agent in connection with the Loan, is located), or (2) the
Property, or any other collateral delivered or pledged to Lenders in connection
with the Loan, or any part thereof or any Rents therefrom or any estate, right,
title or interest therein, or (3) any occupancy, operation, use or
possession of, or sales from, or activity conducted on, or in connection with
the Property or the leasing or use of the Property or any part thereof, or the
acquisition or financing of the acquisition of the Property by Borrower.

 

“Improvements” means all buildings,
structures, fixtures and improvements now or hereafter owned by Property-Owning
Borrower of every nature whatsoever situated on any Land constituting part of
the Property (including, without limitation, all gas and electric fixtures,
radiators, heaters, engines and machinery, boilers, ranges, elevators and
motors, plumbing and heating fixtures, carpeting and other floor coverings,
water heaters, awnings and storm sashes, and cleaning apparatus which are or
shall be affixed to the Land or said buildings, structures or improvements and
including any additions, enlargements, extensions, modifications, repairs or
replacements thereto).

 

“Indebtedness” means the Principal
Indebtedness, together with all other obligations and liabilities due or to
become due to the Lenders pursuant hereto, under the Note or in accordance with
any of the other Loan Documents, and all other amounts, sums and expenses paid
by or payable to the Lenders hereunder or pursuant to the Note or any of the
other Loan Documents.

 

12

 

“Indemnification Agreement” means
with respect to any Property, the related indemnification agreement, if any,
delivered by Gramercy Capital Corp., a Maryland corporation, to the Agent for
the benefit of the Lenders pursuant to which Gramercy Capital Corp., a Maryland
corporation, agrees to indemnify the Agent and Lenders for any losses incurred
on the related Advance due to or as a result of conditions existing at (or
circumstances surrounding) such Property relating to matters that would be
reasonably expected to be revealed by due diligence deliveries referenced in Article II
of this Agreement that were not made in connection with such Advance.

 

“Indemnified Parties” has the meaning
set forth in Section 5.1(i).

 

“Independent” means, when used with
respect to any Person, a Person that (i) does not have any direct
financial interest or any material indirect financial interest in Borrower or
in any Affiliate of Borrower, and (ii) is not connected with Borrower or
any Affiliate of Borrower as an officer, employee, trustee, partner, director
or person performing similar functions.

 

“Index Maturity” has the meaning set
forth in the definition of LIBOR.

 

“Instruments” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under all “instruments” as defined in the UCC.

 

“Insurance Escrow Account” has the
meaning set forth in Section 3.13(b).

 

“Insurance Premiums” has the meaning
set forth in Section 5.1(x)(iii).

 

“Insurance Proceeds” means, in the
event of a casualty with respect to the Property, the proceeds received under
any insurance policy applicable thereto.

 

“Insurance Requirements” means all
material terms of any insurance policy required pursuant to this Agreement and
all material regulations, rules and other requirements of the National
Board of Fire Underwriters or such other body exercising similar functions
applicable to or affecting the Property or any part thereof or any use or
condition thereof.

 

“Insured Casualty” has the meaning set
forth in Section 5.1(x)(iv)(B).

 

“Intellectual Property” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under the trademark licenses, trademarks, rights
in intellectual property, trade names, service marks and copyrights, copyright
licenses, patents, patent licenses or the license to use intellectual property
such as computer software owned or licensed by Property-Owning Borrower or
other proprietary business information relating to Property-Owning Borrower’s
policies, procedures, manuals and trade secrets.

 

“Interest Accrual Period” means, in
connection with the calculation of interest accrued with respect to any Payment
Date, the period commencing on and including the eleventh (11th) day in the
month preceding the month in which such Payment Date occurs through and 

 

13

 

including the tenth (10th)
day in the month in which such Payment Date occurs; provided, however,
that the first Interest Accrual Period for the Loan shall commence on the
initial Advance Closing Date.

 

“Interest Determination Date” means,
in connection with the calculation of interest to accrue for any Interest
Accrual Period, the second Business Day preceding the eleventh (11th) day of
the month in which such Interest Accrual Period commences; provided, however,
that the first Interest Determination Date for the Loan shall be the second
Business Day preceding the Closing Date.

 

“Inventory” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under all “inventory” as defined in the UCC and
shall include all Documents representing the same.

 

“Investment Property” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under all “investment property” as defined in
the UCC.

 

“Joinder” means, with respect to each
Advance, the Joinder, dated as of the applicable Advance Closing Date, executed
by the related Property-Owning Borrower pursuant to which such Property-Owning
Borrower joins in and assumes the obligations of the Borrower under the Loan on
a joint and several basis, to the Agent for the benefit of the Lenders, as same
may thereafter from time to time be supplemented, amended, modified or extended
by one or more agreements supplemental thereto.

 

“Land” has the meaning provided in the
Mortgage.

 

“Leases” means all leases, subleases,
lettings, occupancy agreements, tenancies and licenses by Property-Owning Borrower
as landlord of the Property or any part thereof now or hereafter entered into,
and all amendments, extensions, renewals and guarantees thereof, and all
security therefor.

 

“Lease Guarantor”, “Lease Guaranty”
and “Lease Insurance Policy” have the meanings set forth in Section 2.3(xi)(4).

 

“Leasing Commissions” means leasing
commissions incurred by Property-Owning Borrower in connection with leasing the
Property or any portion thereof (including renewals of existing Leases).

 

“Leasing Costs/TI Costs Account” has
the meaning set forth in Section 3.13(a).

 

“Leasing Costs/TI Costs Amount” means
one-twelfth (1/12th) of the annual per square foot or per unit amount which, in
connection with an Advance applied to acquire Property, the Agent may require
be deposited on subsequent Payment Dates into the Leasing Costs/TI Costs
Account on a monthly basis to be applied to Leasing Commissions and TI Costs
(taking into account, in connection with CTL Properties only, any deposits to
reserves or payments expressly required to be made by tenants under Credit
Leases).

 

14

 

“Legal Requirements” means all
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities (including, without
limitation, Environmental Laws) 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), and all permits,
licenses and authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instruments, 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” has the meaning provided in
the first paragraph of this Agreement.

 

“Letter of Credit Rights” means all of
Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under all “letter of credit rights” as defined
in the UCC.

 

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

 

(i)            On
each Interest Determination Date, LIBOR will be determined on the basis of the
offered rate for deposits of not less than U.S. $1,000,000 for a period of one
month (the “Index Maturity”), commencing on such Interest Determination
Date, which appears on Reuters Screen LIBOR01 (or the successor thereto) as of
11:00 a.m., London time, on the related Interest Determination Date.  If no such offered rate appears, LIBOR with
respect to the relevant Interest Accrual Period will be determined as described
in (ii) below.

 

(ii)           If
on any Interest Determination Date, such rate does not appear on Reuters Screen
LIBOR01 as of 11:00 a.m., London time, on such Interest Determination
Date, Agent shall request the principal London office of any four major
reference banks in the London interbank market selected by Agent to provide
such bank’s offered quotation (expressed as a percentage per annum) to prime
banks in the London interbank market for deposits in U.S. dollars for a
one-month period as of 11:00 a.m., London time, on such Interest
Determination Date.  If at least two such
offered quotations are so provided, LIBOR shall be the arithmetic mean of such
quotations.  If fewer than two such quotations
are so provided, Agent shall request any three major banks in New York City
selected by Agent to provide such bank’s rate (expressed as a percentage per
annum) for loans in U.S. dollars to leading European banks for a one-month
period as of approximately 11:00 a.m., New York City time on the
applicable Interest Determination Date. 
If at least two such rates are so provided, LIBOR shall be the
arithmetic mean of such rates.  LIBOR
shall be determined by Agent or its agent, which determination shall be
conclusive absent manifest error.

 

All percentages resulting from any calculations of
LIBOR referred to in this Agreement will be carried out to five decimal places
and all U.S. dollar amounts used in or resulting from such calculations will be
rounded upwards to the nearest cent.

 

15

 

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

 

“Loan” and “Loan Amount” have
the meanings set forth in the Recitals hereto.

 

“Loan Documents” means this Agreement,
the Note, the Pledge Agreements, the Environmental Indemnity Agreement, the
Guaranty, the Master License Agreement, the Collateral Assignment of Master
License Agreement, the Memoranda of Negative Pledge, the Real Estate Security
Documents, the Contract Assignments, the Manager’s Subordinations, the
Joinders, any Indemnification Agreement and all other agreements, instruments,
certificates and documents delivered by or on behalf of Borrower or an
Affiliate of Borrower to evidence or secure the Loan as same may be amended or
modified from time to time.  Schedule
III attached hereto sets forth a list of the Loan Documents as of the date
hereof.

 

“Loss Proceeds” means Condemnation
Proceeds and/or Insurance Proceeds.

 

“Losses” has the meaning set forth in Section 5.1(j).

 

“Management Agreement” means with
respect to each Property, the related property management agreement entered
into between the related Property-Owning Borrower and the related property
Manager, or in such other form as may be reasonably approved by the Agent, as
such agreement may be amended, modified or supplemented and in effect from time
to time.

 

“Manager” means with respect to each Property,
the property manager for such Property pursuant to a property management
agreement.

 

“Manager’s Subordination” means, with
respect to each Property, the related Manager’s Consent and Subordination of
Management Agreement, executed by the related property Manager, the related
Property-Owning Borrower and the Agent, dated as of the applicable Advance
Closing Date.

 

“Mandatory Initial Term Amortization
Amount” shall mean $6,500,000.

 

“Material Adverse Effect” means a
material adverse effect upon (i) the business operations, properties,
assets or condition (financial or otherwise) of Borrower, (ii) the ability
of Borrower to perform, or of Agent to enforce, any of the Loan Documents or (iii) the
aggregate value of the Property.

 

“Maturity Date” means the earlier of (a) the
Original Maturity Date or if Borrower exercises the Extension Option pursuant
to Section 3.22, the Extended Maturity Date, or (b) such
earlier date on which the entire Loan is required to be paid in full, by
acceleration or otherwise under this Agreement or any of the other Loan
Documents.

 

16

 

“Memoranda of Negative
Pledge” means each such Memorandum of Negative Pledge, collectively.

 

“Memorandum of Negative
Pledge” means, with respect to each Property located in any state that does
not impose mortgage recording taxes, the related Memorandum of Negative Pledge,
dated as of the applicable Advance Closing Date, granted by the applicable
Property-Owning Borrower to the Agent for the benefit of the Lenders with
respect to such Property, as same may thereafter from time to time be
supplemented, amended, modified or extended by one or more agreements
supplemental thereto.

 

“Mezzanine Lender” means
Goldman Sachs Commercial Mortgage Capital, L.P., a Delaware limited
partnership, Citicorp North America, Inc., a New York corporation and SL
Green Realty Corp., a Maryland corporation, together with their successors and
assigns in such capacities as lenders, each a “Mezzanine Lender” and
collectively, “Mezzanine Lenders”.

 

“Mezzanine Loan” means a
loan made by Mezzanine Lender to American Financial Reality Trust, GKK Stars
Acquisition LLC, First States Group, L.P. and First States Group, LLC, and
other borrowers named therein by Mezzanine Lender pursuant to the Mezzanine
Loan Agreement.

 

“Mezzanine Loan Agreement”
that certain loan agreement dated as of the Closing Date by and among American
Financial Reality Trust, GKK Stars Acquisition LLC, First States Group, L.P.
and First States Group, LLC and other borrowers named therein and Mezzanine
Lender.

 

“Mezzanine
Loan Documents” means collectively, the Mezzanine Loan Agreement and all
agreements, certificates or other documents evidencing or securing or executed
in connection with the Mezzanine Loan.

 

“Money” means all of
Borrower’s right, title and interest, whether now owned or hereafter acquired,
in, to and under (i) all “money” as defined in the UCC and (ii) all
moneys, cash, or other items of legal tender generated from the use or
operation of the Property.

 

“Monthly Statement” has
the meaning set forth in Section 3.12(d).

 

“Mortgage” means, with
respect to each Property, the related first priority Mortgage or Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as
of the applicable Advance Closing Date, granted by the applicable
Property-Owning Borrower to or for the benefit of either Agent or Deed of Trust
Trustee for the benefit of Agent with respect to the such Property as security
for the Loan, as same may thereafter from time to time be supplemented,
amended, modified or extended by one or more agreements supplemental thereto.

 

“Mortgage Recording Tax
Escrow Account” has the meaning set forth in Section 3.13(c).

 

17

 

“Multiemployer Plan”
means a multiemployer plan defined as such in Section 3(37) of ERISA and
which is covered by Title IV of ERISA (i) to which contributions have
been, or were required to have been made by Borrower or any ERISA Affiliate or (ii) with
respect to which Borrower could reasonably be expected to incur liability.

 

“Net Proceeds” means
either (x) the purchase price (at foreclosure or otherwise) actually
received by Agent from a third party purchaser with respect to the Collateral,
as a result of the exercise by Agent of its rights, powers, privileges and
other remedies after the occurrence of an Event of Default or (y) in the
event that Agent (or its nominee) or a Lender is the purchaser at foreclosure
of the Collateral, the higher of (i) the amount of Agent’s or such Lender’s
credit bid or (ii) such amount as shall be determined in accordance with
applicable law, and in either case minus all reasonable third party, out of
pocket costs and expenses (including, without limitation, all attorneys’ fees
and disbursements and any brokerage fees, if applicable) incurred by Agent (and
its nominee, if applicable) or such Lender in connection with the exercise of
such remedies; provided, however, that such costs and expenses
shall not be deducted to the extent such amounts previously have been added to
the Indebtedness in accordance with the terms of the Loan Documents or
applicable law.

 

“New Ground Lease”
means, after the termination or expiration of the Ground Lease, any new,
replacement or substitute Ground Lease issued to or obtained by Agent or its
designee with respect to or in place of the terminated Ground Lease, whether
pursuant to any provision of the terminated Ground Lease or otherwise.

 

“Note” means the Amended
and Restated Promissory Note made by Borrower to initial Lender pursuant to
this Agreement, dated as of the date hereof, as such note may be modified,
amended, supplemented or extended.

 

“OFAC” has the meaning
set forth in Section 4.1(v).

 

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

 

 “Operating Budget” means, with respect
to any Fiscal Year, the operating budget for the Property reflecting Borrower’s
projections of Gross Revenues and Property Expenses for the Property for such
Fiscal Year and on an annual and monthly basis and submitted by Borrower to
Agent in accordance with the provisions of Section 5.1(r)(vi).

 

“Organizational Agreements”
means, individually or collectively, as applicable (i) the agreement of
limited partnerships of the Holding Company Borrowers, and (ii) the
comparable organizational or constituent documentation for each Property-Owning
Borrower, each as amended or restated from time to time.

 

“Original Closing Date”,
“Original Holding Company Borrower”, “Original Loan” and “Original
Property-Owning Borrowers” have the respective meanings set forth in the
Recitals hereto.

 

 “Original Maturity Date” has the
meaning set forth in Section 3.22(a).

 

18

 

“Other Borrowings”
means, with respect to Borrower, without duplication (but not including the Indebtedness)
(i) all indebtedness of Borrower for borrowed money or for the deferred
purchase price of property or services, (ii) all indebtedness of Borrower
evidenced by a note, bond, debenture or similar instrument, (iii) the face
amount of all letters of credit issued for the account of Borrower and, without
duplication, all unreimbursed amounts drawn thereunder, and obligations
evidenced by bankers’ acceptances, (iv) all indebtedness of Borrower
secured by a Lien on any property owned by Borrower (whether or not such
indebtedness has been assumed), (v) all Contingent Obligations of
Borrower, (vi) liabilities and obligations for the payment of money
relating to a capitalized lease obligation or sale/leaseback obligation, (vii) liabilities
and obligations representing the balance deferred and unpaid of the purchase
price of any property or services, except those incurred in the ordinary course
of Borrower’s business that would constitute ordinarily a trade payable to
trade creditors, and (viii) all payment obligations of Borrower under any
interest rate protection agreement (including, without limitation, any interest
rate swaps, caps, floors, collars or similar agreements) and similar
agreements.

 

“Payment Date” has the
meaning provided in Section 3.5(a).

 

“Payment Date Statement”
has the meaning provided in Section 3.12(a).

 

“Payment Intangibles”
means all of Property-Owning Borrower’s right, title and interest, whether now
owned or hereafter acquired, in, to and under all “payment intangibles” as
defined in the UCC.

 

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

 

“Permits” means all
licenses, permits, variances and certificates required by Legal Requirements to
be obtained by Property-Owning Borrower and used in connection with the
ownership, operation, use or occupancy of the Property (including, without
limitation, business licenses, state health department licenses, licenses to
conduct business and all such other permits, licenses and rights, obtained from
any Governmental Authority or private Person concerning ownership, operation,
use or occupancy of the Property).

 

“Permitted
Encumbrances” means, with respect to the Property, collectively,

 

(i)            the Lien created by the Mortgages, or any other Loan
Documents of record,

 

(ii)           all Liens, easements, restrictions, covenants and other
matters disclosed on the Title Insurance Policy concerning the Property,

 

(iii)          Liens, if any, for Impositions imposed by any Governmental
Authority not yet delinquent or being contested in good faith and by
appropriate proceedings in accordance with the Mortgages,

 

19

 

(iv)          mechanic’s or materialmen’s Liens, if any, being contested
in good faith and by appropriate proceedings in accordance with the Mortgages, provided
that no foreclosure has been commenced by the lien claimant,

 

(v)           rights of existing and future tenants and residents as
tenants only pursuant to Leases, and

 

(vi)          Liens for public utilities,

 

which Liens and encumbrances referred to in clauses (i)-(vi) above
do not materially and adversely affect (1) the ability of Borrower to pay
in full the Principal Indebtedness and interest thereon in a timely manner or (2) the
use of the Property for the use currently being made thereof, the operation of
the Property as currently being operated or the value of the Property.

 

“Permitted
Guarantor Transfer” means any direct or indirect, voluntary or involuntary,
sale, conveyance, pledge, assignment, encumbrance, disposition or other
transfer, either in one or a series of transactions, of any direct or indirect
legal or beneficial interest in Guarantor and/or any rights, distributions,
profits or proceeds relating thereto.

 

“Permitted
Investments” means any one or more of the following obligations or
securities acquired at a purchase price of not greater than par:

 

(i)            obligations of, or
obligations fully guaranteed as to payment of principal and interest by, the
United States or any agency or instrumentality thereof provided such
obligations are backed by the full faith and credit of the United States of
America;

 

(ii)           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 Financing Corp. (debt
obligations), and the Resolution Funding Corp. (debt obligations);

 

(iii)          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 are rated in the highest short-term rating category
by the Rating Agencies;

 

(iv)          unsecured
certificates of deposit, time deposits, federal funds or banker’s acceptances
issued by any depository institution or trust company incorporated under the
laws of the United States or of any state thereof and subject to supervision
and examination by federal and/or state banking authorities, which investments
are fully insured by the Federal Deposit Insurance Corp.;

 

(v)           debt obligations
with maturities of not more than 365 days and rated by the Rating Agencies in
its highest long-term unsecured rating category;

 

20

 

(vi)          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 270 days
and that is rated by the Rating Agencies in their highest short-term unsecured
debt rating;

 

(vii)         the Federated Prime
Obligation Money Market Fund (the “Fund”) so long as the Fund is rated “AAAm”
or “AAAm-G” (or the equivalent) by the Rating Agencies;

 

(viii)        any other demand,
money market or time deposit, demand obligation or any other obligation,
security or investment, which the Agent shall have approved in writing;

 

provided, however,
that (A) the investments described in clauses (i) through
(viii) above must have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) 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 (C) such investments must not be subject to liquidation prior
to their maturity or have an “r” highlighter affixed to its rating; and provided,
further, that, in the judgment of Agent, such instrument continues to
qualify as a “cash flow investment” pursuant to Code Section 860G(a)(6) earning
a passive return in the nature of interest and that no instrument or security
shall be a Permitted Investment if such instrument or security evidences (x) a
right to receive only interest payments or (y) the right to receive
principal and interest payments derived from an underlying investment at a
yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.

 

“Permitted Transfers” means any of the following transfers:

 

(i)            any Permitted
Guarantor Transfer; or

 

(ii)           the pledge, of the
partnership interests, or, as the case may be, limited liability company
interests in Holding Company Borrower (collectively, the “Mezzanine Equity
Interests”) to Mezzanine Lender pursuant to the Mezzanine Loan Documents as
security for the Mezzanine Loan and any transfer of such Mezzanine Equity
Interests to the Mezzanine Lender in connection with the exercise of remedies
under the Mezzanine Loan Documents; provided, however, that such
transfer shall be conditioned on a replacement guarantor, satisfactory to the
Agent in its sole discretion, executing and delivering to Agent a replacement
Guaranty and one or more replacement Indemnification Agreements, in each case,
in a form substantially similar to the Guaranty and Indemnification Agreements
executed by the Guarantor prior to the date of such transfer, pursuant to which
such replacement guarantor shall undertake the obligations set forth therein;
and, provided further, that, notwithstanding anything in this Agreement to the
contrary, subsequent to any transfer of a Mezzanine Equity Interest in
connection with the exercise of remedies under the Mezzanine Loan Documents in
accordance with this clause (ii) of the definition of Permitted Transfer,
no Transfer of a direct or indirect ownership interest or voting right in
Borrower shall be permitted without Agent’s consent; or

 

21

 

(iii)          any conveyance,
assignment or sale or other disposition (and not a mortgaging, encumbrance,
pledging, hypothecation, or granting of a security interest)(directly or
indirectly) of the voting and beneficial ownership interests in American
Financial Realty Trust following which 
Gramercy Capital Corp., (1) owns (directly or indirectly) 51% or
more of such voting and beneficial ownership interests in American Financial
Realty Trust and (2) through ownership of American Financial Realty Trust,
controls the operations and management of Borrower.

 

 “Person” means 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.

 

“Personalty” means all
right, title and interest of Property-Owning Borrower in and to all Equipment,
Inventory, Accounts, General Intangibles, Instruments, Investment Property,
Receivables, Pledged Accounts, Deposit Accounts, Contracts and Intellectual
Property and all other personal property as defined in the relevant UCC, now
owned or hereafter acquired by Property-Owning Borrower and now or hereafter
affixed to, placed upon, used in connection with, arising from or otherwise
related to the Property or which may be used in or relating to the planning,
development, financing or operation of such Property, including, without
limitation, furniture, furnishings, equipment, machinery, money, insurance
proceeds, accounts, contract rights, trademarks, goodwill, chattel paper,
documents, trade names, licenses and/or franchise agreements, rights of
Property-Owning Borrower under leases of fixtures or other personal property or
equipment, inventory, all refundable, returnable or reimbursable fees, deposits
or other funds or evidences of credit or indebtedness deposited by or on behalf
of Property-Owning Borrower with any governmental authorities, boards,
corporations, providers of utility services, public or private, including
specifically, but without limitation, all refundable, returnable or
reimbursable tap fees, utility deposits, commitment fees and development costs.

 

“Plan” means an employee
benefit or other plan, other than a Multiemployer Plan, that is covered by
Title N of ERISA or Section 302 of ERISA or Section 412 of the Code,
and (i) was established or maintained by Borrower or any ERISA Affiliate
during the five year period ended prior to the date of this Agreement or to
which Borrower or any ERISA Affiliate makes, is obligated to make or has,
within the five year period ended prior to the date of this Agreement, been
required to make contributions or (ii) with respect to which Borrower
could reasonably be expected to incur liability.

 

 “Pledge Agreement (Property-Owning
Borrower)” means (i) with respect to each Property-Owning Borrower,
the Pledge Agreement from the applicable Holding Company Borrower, to Agent for
the benefit of the Lenders, dated as of date hereof, or dated as of the
respective Advance Closing Date, as applicable, as same may thereafter from
time to time be supplemented, amended, modified or extended by one or more agreements
supplemental thereto and (ii) with respect to 4200 Holdings, the Pledge
Agreement from 4200 Holdings, to Agent for the benefit of the Lenders, dated as
of date hereof, as same may thereafter from time to time be supplemented,
amended, modified or extended by one or more agreements supplemental thereto.

 

22

 

“Pledge Agreements”
means each Pledge Agreement (Property-Owning Borrower), collectively.

 

“Pledged Accounts” means
the Collection Account and the Reserve Account and any successor accounts
thereto.

 

“Policies” has the
meaning provided in Section 5.1(x)(iii).

 

“Preliminary
Due Diligence Package” means, with respect to any asset acquisition
proposed to be financed with the proceeds of an Advance, a summary memorandum
outlining the proposed transaction, including potential transaction benefits
and all material underwriting risks, all Underwriting Issues and all other
characteristics of the proposed transaction that a reasonable lender would
consider material, together with the following due diligence information
relating to such assets to be provided by Holding Company Borrowers to Agent
pursuant to this Agreement:

 

(i)            the
Collateral Information;

 

(ii)           current
rent roll, if applicable;

 

(iii)          cash flow pro-forma,
plus historical information, if available;

 

(iv)          description of the
Property;

 

(v)           indicative debt
service coverage ratios;

 

(vi)          indicative
loan-to-value ratio;

 

(vii)         term sheet outlining
the transaction generally;

 

(viii)        the submission to
the Borrower’s and the Guarantor’s credit committee; and

 

(ix)           any exceptions to
the representations and warranties set forth in Article IV to this
Agreement.

 

“Principal Indebtedness”
means the aggregate principal amount of the Advances outstanding as adjusted by
each increase (including for advances made by Lenders to protect the
Collateral), or decrease in such principal amount of the Loan outstanding,
whether as a result of prepayment or otherwise, from time to time.

 

“Proceeds” shall have
the meaning given in the UCC and, in any event, shall include, without
limitation, all of Property-Owning Borrower’s right, title and interest in and
to proceeds, product, offspring, rents, profits or receipts, in whatever form,
arising from the Collateral.

 

“Prohibited Person” has
the meaning set forth in Section 4.1(v).

 

23

 

“Property” means the CTL
Property or the Conduit CMBS Property acquired with the proceeds of each
Advance.

 

“Property
Expenses” means, with respect to the Property, the following costs and
expenses but only, in the case of costs and expenses in respect of goods and
services, to the extent that they (x) are paid to Persons who are
generally in the business of providing such goods and services, (y) are
customary for the types of goods or services provided in the geographical area
in which such goods or services are provided and (z) do not constitute
Capital Improvement Costs:

 

(i)            Impositions;

 

(ii)           insurance premiums
for policies of insurance required to be maintained by Borrower with respect to
the Property pursuant to this Agreement or the other Loan Documents;

 

(iii)          the cost of all
electricity, oil, gas, water, steam, heat, ventilation, air conditioning and
any other energy, utility or similar item and overtime services with respect to
the Property;

 

(iv)          payments required
under service contracts (including, without limitation, service contracts for
heating, ventilation and air conditioning systems, elevators, landscape
maintenance, pest extermination, security, furniture, trash removal, answering
service and credit checks);

 

(v)           wages, benefits,
payroll taxes, uniforms, the cost of cleaning supplies, insurance costs and all
related expenses for maintenance personnel for the Property (including, without
limitation, housekeeping employees, porters and general repair, maintenance and
security employees), whether hired by Borrower, Manager, Collateral Agent or
any other Person;

 

(vi)          costs required in
connection with the enforcement of any Lease (including, without limitation,
reasonable attorneys’ fees, charges for lock changes and storage and moving
expenses for furniture, fixtures and equipment and expenses to relet the
premises);

 

(vii)         advertising and
rent-up expenses (including, without limitation, leasing services, tenant rent
concessions, promotions for existing and prospective tenants, banners, signs
and brokerage commissions);

 

(viii)        out-of-pocket
cleaning, maintenance and repair expenses;

 

(ix)           any expense the
total cost of which is passed through to tenants pursuant to executed Leases;

 

(x)            legal, accounting,
auditing and other professional fees and expenses incurred in connection with
the ownership, leasing and operation of the Property (including, without
limitation, collection costs and expenses);

 

24

 

(xi)           permits, licenses
and registration fees and costs;

 

(xii)          any expense
necessary in order to prevent a breach under a Lease;

 

(xiii)         any expense
necessary in order to prevent or cure a violation of any Legal Requirement
(including Environmental Law), regulation, code or ordinance;

 

(xiv)        costs and expenses of
any appraisals, valuations, surveys, inspections, environmental assessments or
market studies:

 

(xv)         costs and expenses of
security and security systems provided to and/or installed and maintained with
respect to the Property;

 

(xvi)        costs of title, UCC,
litigation and other searches and costs of maintaining the Lien of the Mortgage
thereon and the security interest in any related Collateral;

 

(xvii)       fees and expenses of
property managers contracted with by Borrower to perform management,
administrative, payroll or other services in connection with the operation of
the Property (including, without limitation, the fees and expenses owed to
Manager under the Management Agreement);

 

(xviii)      any other costs and
expenses contemplated by the Operating Budget and customarily incurred in
connection with operating properties similar in type and character to the
Property (including rent for any management office);

 

(xix)         any cost or expense
to comply with the requirements of any Leases, whether expended by the
Borrower, the Manager, the Collateral Agent or any other Person.

 

(xx)          any other category
of property expense that is customary for a property of the type and size as
the Property and is reasonably approved by Agent on behalf of the Lenders.

 

“Property-Owning Borrower”
means each Current Property-Owning Borrower and each Future Property-Owning
Borrower. “Property-Owning Borrowers” means the Current Property-Owning
Borrowers and Future Property-Owning Borrowers.

 

“Property Sub-Account”
has the meaning provided in Section 3.12(a)(ii).

 

“Property Sub-Accounts”
has the meaning provided in Section 3.12(a)(ii).

 

“Quarterly Statement”
has the meaning provided in Section 5.1(r)(vii).

 

“Real Estate Closing”
means, with respect to any Property, the closing that shall be deemed to have
occurred when (1) the Real Estate Security Documents applicable to such
Property shall have been filed of record in the appropriate filing office in
the jurisdiction in which such Property is located or irrevocably delivered to
the Title Agent for such recordation and all mortgage recording taxes incurred
or to be incurred in connection therewith shall have 

 

25

 

been paid by
the Borrower and (2) the Title Insurance Policy shall have been purchased
by the Lender and paid for by the Borrower, as evidenced by the delivery of a
marked-up Title Insurance Policy.

 

“Real Estate Security
Documents” means, with respect to each Advance for the acquisition of
Property, the related Mortgage(s) and the related Assignment(s) of
Rents and Leases.

 

“Real Estate Taxes Escrow
Account” has the meaning provided in Section 3.13(b).

 

“Receivables” means all
of Property-Owning Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, to and under (i) any Accounts, Chattel Paper,
Instruments, Payment Intangibles, Letter of Credit Rights, Documents, insurance
policies, drafts, bills of exchange, trade acceptances, notes or other
indebtedness owing to Property-Owning Borrower from whatever source arising, (ii) to
the extent not otherwise included above, (a) all income, Rents, issues,
profits, revenues, deposits and other benefits from the Property and (b) all
receivables and other obligations now existing or hereafter arising, or created
out of the sale, lease, sublease, license, concession or other grant of the
right of the use and occupancy of property or rendering of services by
Property-Owning Borrower or any operator or manager of the Property or other
commercial space located at the Property or acquired from others (including,
without limiting the generality of the foregoing, from rental of space, halls,
stores, and offices, and deposits securing reservations of such space, exhibit
or sales space of every kind, license, lease, sublease and concession fees and
rentals, health club membership fees, food and beverage wholesale and retail
sales of merchandise, service charges, vending machine sales and proceeds, if
any, from business interruption or other loss of income insurance, (iii) all
of the books and records (whether in tangible, electronic or other form) now or
hereafter maintained by or on behalf of Mortgagor in connection with the operation
of the Property or in connection with any of the foregoing and (iv) all
Supporting Obligations and all liens and security interests securing any of the
foregoing and all other rights, privileges and remedies relating to any of the
foregoing.

 

 “Regions Master License” has the
meaning provided in Section 2.1(o).

 

 “Regions Properties” means those
certain properties listed on Schedule IV attached hereto.

 

“Release” means any
active or passive release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment (including, without limitation, the movement of
Hazardous Substances through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata).

 

“Release Condition”
means, with respect to any proposed Capital Event of a Property, the condition
that shall be satisfied if the Agent determines in its sole discretion that
such proposed Capital Event shall not have a Material Adverse Effect and that following
such Capital Event no mandatory principal payments are due and payable pursuant
to Section 3.7(c).

 

26

 

“Remedial Work” has the
meaning set forth in Section 5.1(d)(i).

 

“Rents” means all
income, rents, issues, profits, revenues (including all oil and gas or other
mineral royalties and bonuses), deposits (other than utility and security
deposits) and other benefits from the Property.

 

“Replacement Reserve Account”
has the meaning set forth in Section 3.13(a).

 

“Replacement Reserve Amount”
means one-twelfth (1/12th) of the annual per square foot or per unit amount
which, in connection with an Advance applied to acquire Property, the Agent,
may require be deposited on subsequent Payment Dates into the Replacement
Reserve Account on a monthly basis to be applied to replacement reserve items
(taking into account, in connection with CTL Properties only, any deposits to
reserves or payments expressly required to be made by tenants under Credit
Leases).

 

“Reserve Account” means
the Deferred Maintenance Escrow Account, the Replacement Reserve Account, the
Leasing Costs/TI Costs Account, the Real Estate Taxes Escrow Account, the
Insurance Escrow Account, and the Mortgage Recording Tax Escrow Account,
collectively, and any successor accounts to any of the foregoing.

 

“Single-Purpose Entity”
means a Person, other than an individual, which (i) is formed or organized
under the laws of a state of the United States or the District of Columbia
solely for the purpose of acquiring and directly (or in the case of the Holding
Company Borrowers, indirectly) holding an ownership interest in the Property, (ii) does
not engage in any business unrelated to the Property, (iii) does not have
any assets other than those related to its interest in the Property (or in the
case of the Holding Company Borrowers, their interest in the Property-Owing
Borrowers) or any indebtedness other than as permitted by this Agreement, the
Mortgages or the other Loan Documents, (iv) 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, (v) is subject
to all of the limitations on powers set forth in the Organizational Agreement
as of the Closing Date, (vi) holds itself out as being a Person separate
and apart from any other Person and (vii) has, or is controlled, directly
or indirectly, by a Person that has, at least one independent director that is
not an employee, officer, director, or paid consultant of any Affiliate of such
Person or of any principal or officer of such Person.

 

“SNDA” has the meaning
set forth in Section 2.3(b)(x)(7).

 

“Supplemental Due Diligence
List” shall mean, with respect to any assets proposed to be acquired with
the proceeds of an Advance, information or deliveries concerning the assets
that Agent shall reasonably request in addition to the Preliminary Due
Diligence Package.

 

“Supporting Obligations”
means all of Property-Owning Borrower’s right, title and interest, whether now
owned or hereafter acquired, in, to and under (i) all “supporting
obligations” as defined in the UCC and (ii) any other guarantee, letter of
credit, secondary obligation, right or privilege that supports or pertains to
any of the Property.

 

27

 

“Survey” means an
ALTA/ACSM survey of the Property prepared by a registered Independent surveyor,
in form and content satisfactory to the Agent and the Borrower.

 

“Taking” means a taking
or voluntary conveyance during the term hereof of all or part of the Property,
or any interest therein or right accruing thereto or use thereof, as the result
of, or in settlement of, any condemnation or other eminent domain proceeding by
any Governmental Authority affecting the Property or any portion thereof
whether or not the same shall have actually been commenced.

 

“TI Costs” means tenant
improvement costs and allowances incurred by Borrower in connection with
renewing existing Leases or executing new Leases for space located in the
Property.

 

“Title Agent” means a
title company proposed by Borrower and reasonably acceptable to the Agent.

 

“Title Insurance Policy”
means a mortgagee’s title insurance policy or policies (i) issued by
Chicago Title Insurance Company or one or more title companies reasonably
satisfactory to Agent which policy or policies shall be in form ALTA 1992 (with
waiver of arbitration provisions as provided for by the applicable and
respective state’s title policy endorsement) (with reinsurance as Agent may
require reasonably satisfactory to Agent and at amounts reasonably acceptable
to the primary insurer), naming Agent as the insured party for benefit of the
Lenders, (ii) insuring the Mortgage as being a first and prior lien upon
the Property, (iii) showing no encumbrances against the Property (whether
junior or superior to the Mortgage) which are not acceptable to Agent other
than Permitted Encumbrances, (iv) in an amount acceptable to Agent (but
not more than the Loan Amount), and (v) otherwise in form and content
reasonably acceptable to Agent. Such Title Insurance Policy shall include the
following endorsements or affirmative coverages in form and substance
reasonably acceptable to Agent, to the extent legally permitted and available
in the jurisdiction in which the Land is located:  variable rate endorsement; survey
endorsement; comprehensive endorsement; first loss, last dollar and tie-in
endorsement; access coverage; separate tax parcel coverage; contiguity (if
applicable) coverage; and such other endorsements as Agent shall reasonably
require in order to provide insurance against specific risks identified by
Agent in connection with the Property.

 

“Transaction” means the
transactions contemplated by the Loan Documents.

 

“Transaction Costs”
means all costs and expenses paid or payable by Borrower relating to the
Transaction (including, without limitation, reasonable transfer, mortgage and
recording fees and costs, appraisal fees, legal fees and accounting fees and
the costs and expenses described in Section 8.23).

 

“Transfer” means the
conveyance, assignment, sale, mortgaging, encumbrance (other than a Permitted
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; or (b) in
the stock, partnership interests, membership interests or other ownership 

 

28

 

interests in
Borrower 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; 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; and any instrument
subjecting the Property to a condominium regime or transferring ownership to a
cooperative corporation.

 

“Triple Net Lease” shall
mean a lease under which the tenant pays for all or substantially all real
estate property taxes, property insurance, and operating expenses of the
Property.

 

“UCC” means with respect
to any Collateral, the Uniform Commercial Code as in effect from time to time
in the State of New York; provided, 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 of New York, “UCC” shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection or
priority. Wherever this agreement refers to terms as defined in the UCC, if
such term is defined in more than one Article of the UCC, the definition
in Article 9 of the UCC shall control.

 

“Underwriting Issues”
shall mean, with respect to any assets as to which Holding Company Borrowers
intends to request an Advance, all material information that has come to
Holding Company Borrowers’ attention that, based on the making of reasonable
inquiries and the exercise of reasonable care and diligence under the
circumstances, would be considered a materially “negative” factor (either
separately or in the aggregate with other information), or a material defect in
documentation or closing deliveries, to a reasonable institutional mortgage
lender in determining whether to finance the assets in question.

 

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

 

“Welfare Plan” means an
employee welfare benefit plan as defined in Section 3(1) of ERISA
established or maintained by Borrower or any ERISA Affiliate or with respect to
which Borrower or any ERISA Affiliate has an obligation to make contributions
and covers any current or former employee of Borrower or any ERISA Affiliate.

 

29

 

ARTICLE II.

CONDITIONS PRECEDENT

 

Section 2.1.                                   Conditions
Precedent to Closing.  The obligation
of the Agent to make the Loan is subject to the satisfaction by Borrower (and
Guarantor and 4200 Holdings, where applicable) of the following conditions no
later than the Closing Date:

 

(a)                                  Loan
Agreement.  Holding Company
Borrowers, Current Property-Owning Borrowers, Collateral Agent, and Agent shall
have executed and delivered this Agreement.

 

(b)                                 Note.  Holding Company Borrowers and Current
Property-Owning Borrowers shall have executed and delivered to Agent the Note.

 

(c)                                  Environmental
Indemnity Agreement; Guaranty; Pledge Agreements and Financing Statements.  Holding Company Borrowers, Current
Property-Owning Borrowers and Guarantor shall have executed and delivered the
Environmental Indemnity Agreement to the Agent for benefit of the Lenders.  Guarantor shall have executed and delivered
the Guaranty and the Indemnification Agreement related to the Properties owned
by the Current Property-Owning Borrowers. 
Each Holding Company Borrower and 4200 Holdings shall have executed and
delivered a Pledge Agreement (Property-Owning Borrower) to the Agent for
benefit of the Lenders.  Borrower shall
have cooperated with the Agent with respect to all financing statements
required to be filed in order to perfect Agent’s security interest in the
Collateral. Title Agent, Holding Company Borrowers and the Agent shall have
executed and delivered the Escrow Agreement.

 

(d)                                 Opinions
of Counsel.  The initial Lender and
Collateral Agent shall have received from counsel to Borrower and Guarantor,
legal opinions in form and substance acceptable to Agent, with respect to
corporate matters. Such legal opinions shall be addressed to Agent and its
successors and assigns, dated the Closing Date, and in form and substance reasonably
satisfactory to Agent and its counsel.

 

(e)                                  Organizational
Documents.  The initial Lender shall
have received with respect to each of Holding Company Borrower and the
Guarantor its certificate of formation or certificate of incorporation, as
applicable, as amended, modified or supplemented to the Closing Date, as filed
with the Secretary of State in the jurisdiction of organization and in effect
on the Closing Date and certified to be true, correct and complete by the
appropriate Secretary of State as of a date not more than twenty (20) days
prior to the Closing Date, together with, if available, a good standing
certificate from such Secretary of State and, for Holding Company Borrowers
only, a good standing certificate from the Secretaries of State (or the
equivalent thereof) of each other State in which each Holding Company Borrower
is required to be qualified to transact business.

 

(f)                                    Certified
Resolutions, etc.  The initial Lender
shall have received a certificate of each of the Holding Company Borrowers and
the Guarantor dated the Closing Date, certifying (i) the names and true
signatures of its incumbent officers authorized to sign the Loan Documents to
which each Holding Company Borrower or the Guarantor is a party, (ii) the 

 

30

 

Organizational Agreement of each Holding
Company Borrower as in effect on the Closing Date, (iii) the resolutions
of each of the Holding Company Borrowers and the Guarantor, approving and
authorizing the execution, delivery and performance of the Loan Documents to
which it is a party, and (iv) that there have been no changes in any
Organizational Agreement since the date of execution or preparation thereof.

 

(g)                                 Additional
Matters.  The Agent shall have
received such other certificates, opinions, documents and instruments relating
to the Loan as may have been reasonably requested by Agent. All corporate and
other organizational proceedings, all other documents (including, without
limitation, all documents referred to herein and not appearing as exhibits
hereto) and all legal matters in connection with the Loan shall be reasonably
satisfactory in form and substance to Agent.

 

(h)                                 Advisory
Fee; Transaction Costs.  Borrower
shall have paid the Advisory Fee and all Transaction Costs for which bills have
been submitted in accordance with the provisions of Section 8.23 in
excess of the $100,000 legal due diligence deposit.

 

(i)                                     No
Default or Event of Default.  No
Default or Event of Default shall have occurred and be continuing on the
Closing Date.

 

(j)                                     No
Injunction.  No law or regulation
shall have been adopted, no order, judgment or decree of any Governmental
Authority shall have been issued, and no litigation shall be pending or
threatened, which in the good faith judgment of the initial Lender would
enjoin, prohibit or restrain, or impose or result in the imposition of any
material adverse condition upon, the making or repayment of the Loan or the
consummation of the Transaction.

 

(k)                                  Representations
and Warranties.  The representations
and warranties herein and in the other Loan Documents shall be true and correct
in all material respects on the Closing Date.

 

(l)                                     Filings,
Registrations, Recording.  Any
documents (including, without limitation, financing statements) required to be filed,
registered or recorded in order to create, in favor of the Agent, a perfected,
first-priority security interest in the Collateral, subject to no Liens other
than Permitted Encumbrances, shall have been properly prepared and executed for
filing, registration or recording in each office in each jurisdiction in which
such filings, registrations and recordations are required to perfect such
first-priority security interest.

 

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

 

(n)                                 Collection
Account and Reserve Account.  The
Collection Account and Reserve Account shall have been established with the
Collateral Agent, and the terms of all documentation relating to such accounts
shall be in accordance with the requirements of the Loan Documents and shall be
satisfactory to the Agent in form and substance and the Holding 

 

31

 

Company Borrowers shall provide evidence of
same, including any agreements with respect thereto.

 

(o)                                 Regions
Master License.  Borrower shall have
provided a Master License Agreement, dated as of the date hereof, executed by
each Holding Company Borrower and Guarantor, in form and substance acceptable
to Agent, which shall cover the reduction in rental income caused by scheduled
rent step downs with respect to the Regions Properties (the “Regions Master
License”).  Borrower shall have also
provided a Collateral Assignment of the Master License Agreement, dated as of
the date hereof, executed by each Holding Company Borrower and Guarantor, in
form and substance acceptable to Agent (the “Collateral Assignment of the
Master License Agreement”).

 

(p)                                 Other
Documents.  The Agent shall have
received such other documents as the Agent or its counsel may reasonably
request.

 

Section 2.2.                                   Execution
and Delivery of Agreement.  The
execution and delivery of this Agreement by each party to this Agreement shall
be deemed to constitute the satisfaction or waiver of the conditions set forth
in Section 2.1.

 

Section 2.3.                                   Advance
Procedure.

 

(a)                                  Preliminary
Approval.  Holding Company Borrowers
shall give Agent three (3) Business Days prior written notice of each
proposed Advance and Agent shall inform Holding Company Borrowers of its
determination with respect to any assets proposed to be acquired by Borrower
solely in accordance with the procedure set forth below. Agent shall have the
right to review all assets proposed to be financed by Agent with the proceeds
of an Advance and to conduct its own due diligence investigation of such assets
as Agent reasonably determines. Agent shall be entitled to make a
determination, in the exercise of its good faith business judgment, that it
shall or shall not finance any or all of the assets proposed to be financed by
Agent with the proceeds of an Advance.

 

(i)                                     Holding
Company Borrowers may, from time to time, submit to Agent a Preliminary Due
Diligence Package for Agent’s review and approval in order to make an Advance
with respect to any Property that the Holding Company Borrowers proposes to
cause a Property-Owning Borrower to acquire and finance under this Agreement.

 

(ii)                                  Upon
Agent’s receipt of a complete Preliminary Due Diligence Package, Agent, within
five (5) Business Days, shall have the right to request, in Agent’s good
faith business judgment, additional diligence materials and deliveries that
Agent shall specify on a Supplemental Due Diligence List. Upon Agent’s receipt
of all of the Diligence Materials or Agent’s waiver thereof, Agent, within
seven (7) Business Days shall either (i) notify Holding Company
Borrowers (x) that it has obtained internal credit approval; (y) of
the Advance Rate, and (z) of the Capital Markets Execution for the assets
or (ii) deny, in Agent’s sole and absolute discretion, the request for an
Advance. Agent’s failure to respond to Holding Company Borrowers within seven (7) Business
Days shall 

 

32

 

be deemed to
be a denial of Holding Company Borrowers’ request for an Advance, unless Agent
and Holding Company Borrowers have agreed otherwise in writing.

 

(b)                                 Final
Approval.  Upon Agent’s notification
to Holding Company Borrowers of the Advance Rate and the Capital Markets
Execution for any assets, Holding Company Borrowers shall, if Holding Company
Borrowers desire to obtain an Advance with respect to such assets, satisfy the
conditions set forth below (in addition to satisfying the conditions precedent
to obtaining each Advance, as set forth in Section 2.4 of this
Agreement) as a condition precedent to Agent’s approval of such assets as
Property, all in a manner reasonably satisfactory to Agent and pursuant to
documentation reasonably satisfactory to Agent:

 

(i)                                     Survey;
Appraisal. Agent shall have received the Survey and the Appraisal with
respect to the Property, which shall be in form and substance reasonably
satisfactory to Agent.

 

(ii)                                  Engineering
Report. Agent shall have received the Engineering Report with respect to
the Property prepared by the Engineer, which Engineering Report shall be
reasonably acceptable to Agent.

 

(iii)                               Environmental
Matters. An Environmental Report prepared by an Environmental Auditor with
respect to the Property shall have been made available to the Agent, which
Environmental Report shall be reasonably acceptable to Agent.

 

(iv)                              Property Information.
Agent shall have received reasonably acceptable information relating to the
Property, which shall include the following, to the extent reasonably
available:

 

(1)                                  operating
statements for the current year (including actual to date information, an
annual budget and trailing twelve month data in hard copy and on diskette) and
for the immediately preceding year (including tenant improvements costs,
leasing commissions, capital reserves, major repairs, replacement items and
occupancy rates in hard copy and on diskette);

 

(2)                                  copies
of Leases with respect to the tenants of the Property, a copy of the standard
lease form, if any, and tenant lease abstracts;

 

(3)                                  current
property rent roll data on a tenant by tenant basis in hard copy; and

 

(4)                                  current
real estate tax bills (or a certification of current tax amounts evidenced in
the owner’s title insurance policy).

 

(v)                                 Pro-Forma
Financial Statement; Operating Budget. 
Agent shall have received (i) the initial pro forma financial
statement and Operating Budget for the Property for the following twelve months
(including on an annual and monthly basis a break-down of projected Gross
Revenues, Property Expenses, Capital Improvement Costs (including Leasing
Commissions and TI Costs), replacement reserve costs and 

 

33

 

average
occupancy level (expressed as a percentage)), (ii) a financial statement
that forecasts projected revenues and operating expenses for not less than
three years (including the assumptions used in such forecast), and (iii) any
local market study and/or research and demographics report prepared for
Borrower.

 

(vi)                              Site
Inspection.  Borrower shall have
provided to Agent the opportunity to perform, or cause to be performed on its
behalf, an on-site due diligence review of the Property which inspection is
satisfactory to Agent in its sole discretion.

 

(vii)                           Insurance.  Agent shall have received certificates of
insurance demonstrating insurance coverage in respect of the Property of types,
in amounts, with insurers and otherwise in compliance with the terms,
provisions and conditions set forth in this Agreement. Such certificates shall
indicate that Agent is a named additional insured and shall contain a loss payee
endorsement in favor of Agent with respect to the property policies required to
be maintained under this Agreement.

 

(viii)                        Lien
Search Reports.  To the extent not
covered by the materials delivered by the title insurance company in connection
with the title commitment, Agent shall have received satisfactory reports of
tax lien and judgment searches and title updates conducted by the title
companies or search firms acceptable to the Agent with respect to the Property,
such searches to be conducted in each of the locations required by Agent.

 

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

 

(x)                                   Certificates
of Occupancy, Zoning Reports.  Agent
shall have received copies of certificates of occupancy issued by the
appropriate Governmental Authority of the jurisdiction in which the Property is
located reflecting, and consistent with, the use of the Property as of the
Advance Closing Date and evidence that the Property is in compliance with all
applicable zoning laws, rules and regulations (which items may be
satisfied through the delivery of a report from The Planning and Zoning
Resource Corporation with respect to the Property).

 

(xi)                                Additional Real
Estate Matters.  Agent shall have
received such other real estate related certificates and documentation relating
to the Property as Agent may have reasonably requested. Such documentation
shall include the following as requested by Agent and to the extent reasonably
available:

 

(1)                                  a
certified copy of the purchase and sale agreement (with exhibits) for the
Property;

 

34

 

(2)                                  estoppel
certificates in form and substance reasonably acceptable to Agent in respect of
such percentage of the rentable square footage rented to commercial tenants as
shall be reasonably acceptable to Agent;

 

(3)                                  graphics
(including interior and exterior photographs, rental brochures and a
competitive properties map) as required by Agent;

 

(4)                                  with respect to each
CTL Property:

 

(A)                              at
least one signed copy of the Credit Lease,

 

(B)                                at
least one signed copy of each amendment, modification, assignment, and
assumption of the Credit Lease,

 

(C)                                at
least one signed copy of the guaranty of a Credit Lease (a “Lease Guaranty”),
if any,

 

(D)                               a
copy of the opinion of counsel for the Credit Lease and the Lease Guaranty, if
any,

 

(E)                                 a
copy of evidence of formation and authority for the tenant and any Lease
Guarantor, if any,

 

(F)                                 a
copy of the “Lease Enhancement Policy” or “Extended Amortization Policy” or “residual
value insurance policy” (the “Lease Insurance Policy”), if any,

 

(G)                                an
estoppel certificate dated no earlier than 90 days before the date of delivery,
addressed to Holding Company Borrowers and Holding Company Borrowers’
successors and assigns, executed by the tenant and the guarantor under any
Lease Guaranty (the “Lease Guarantor”),

 

(H)                               a
subordination, nondisturbance, and attornment agreement between the tenant and
Property-Owning Borrower confirming the continuation of the Credit Lease after
any foreclosure under the Loan (the “SNDA”),

 

(I)                                    an
original assignment of the SNDA from Property-Owning Borrower in blank, in
recordable form if the SNDA was in recordable form, and

 

(J)                                   a
UCC-1 financing statement relating to the assignment to Agent of the Lease
Guaranty, the SNDA, and any claims under the Lease Insurance Policy; and

 

(5)                                  with
respect to each Ground Lease:

 

35

 

(A)                              (a) original
ground lessor’s estoppel certificate; (b) original fully executed
counterpart or a certified copy of the Ground Lease and all amendments referred
to in “a”; (c) copy of memorandum of lease, with recording information; (d) original
of any separate agreement, if any, between the ground lessor and
Property-Owning Borrower; (e) copy of an opinion of counsel for ground
lessor, if any such opinion was obtained; and (f) copy of recorded
subordination agreement from any fee mortgagee of record at the time item “c”
was recorded.

 

(xii)                             Title
Commitment.  Agent shall have received
the title commitment for the Property, which shall be reasonably acceptable to
the Agent.

 

Within five (5) Business Days of Holding
Company Borrowers’ satisfaction of all of the conditions enumerated in clauses (i) through
(xii) above, Agent shall either (i) if the asset proposed to be
acquired with the proceeds of the Advance are not reasonably satisfactory in
form and substance to Agent, notify Holding Company Borrowers that Agent has
not approved the asset as Property or (ii) notify Holding Company
Borrowers in writing that Agent has approved the asset as Property (including
in such notification (x) the related deposit required to be made to the
Deferred Maintenance Escrow Account and the Mortgage Recording Tax Escrow
Account out of the proceeds of the Advance, if any, (y) the Replacement
Reserve Amount, if any, and (z) the Leasing Costs/TI Costs Amount, if
any). Agent’s failure to respond to Holding Company Borrowers within five (5) Business
Days shall be deemed to be a denial of Holding Company Borrowers’ request that
Agent approve the asset, unless Agent and Holding Company Borrowers have agreed
otherwise in writing.

 

(xiii)                          Officer’s
Certificate.  Borrower shall have
delivered to Agent an Officer’s Certificate setting forth:

 

(1)                                  no
Event of Default has occurred or is continuing;

 

(2)                                  all
representations and warranties made by Borrower in the Loan Agreement with
respect to the Properties securing both the current Advance and all prior
Advances remain true and correct as of the date of such proposed Advance; and

 

(3)                                  except
as provided in Section 3.11, no Property that has previously been
encumbered under the Loan has been released from the Lien.

 

Section 2.4.                                   Initial
and Subsequent Advances.  The making
of each Advance to Borrower on any Business Day is subject to the following
further conditions precedent, both immediately prior to the making of such
Advance and also after giving effect thereto and to the intended use thereof:

 

(a)                                  the
Escrow Agreement, together with any amendments or modifications thereto
reasonably required in Agent’s discretion, shall be in full force and effect;

 

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

 

36

 

(c)                                  the
representations and warranties made by Borrower in Article IV
hereof, and in each of the other Loan Documents, shall be true and correct on
and as of the date of the making of such Advance with the same force and effect
as if made on and as of such date (or, if any such representation or warranty
is expressly stated to have been made as of a specific date, as of such
specific date);

 

(d)                                 the
aggregate outstanding principal amount of the Advances shall not exceed the
maximum amount permitted at such time under Section 3.7 hereof;

 

(e)                                  the
Agent shall have completed its due diligence review of the Property being
acquired with the proceeds of such Advance and such other documents, records,
agreements, instruments or information relating to the Property as the Lender
in its reasonable discretion deems appropriate to review and such review shall
be satisfactory to the Lender in its reasonable discretion;

 

(f)                                    the
Lender shall have received the following Property-related Loan documents:

 

(i)                                     Real
Estate Security Documents; Memorandum of Negative Pledge.  Property-Owning Borrower shall have executed
and delivered to Title Agent the Real Estate Security Documents and the
Memorandum of Negative Pledge with respect to the Property with a direction
letter to record the Memorandum of Negative Pledge;

 

(ii)                                  Financing
Statements.  Borrower shall have
cooperated with Agent in the preparation of all financing statements required
by Agent pursuant hereto and such financing statements shall have been
irrevocably delivered to the Title Agent;

 

(iii)                               Management
Agreement and Manager’s Subordination. 
With respect to the Property, Agent shall have received the executed
Management Agreement and the Manager and Property-Owning Borrower shall have
executed and delivered the Manager’s Subordination to Agent;

 

(iv)                              Contract
Assignment.  With respect to the
Property, Property-Owning Borrower shall have executed and delivered to Agent a
Contract Assignment;

 

(v)                                 Organizational
Agreement; Joinder.  The Holding
Company Borrowers shall have delivered to the Agent the Organizational
Agreement for the Property-Owning Borrower that will own such Property, which
shall be in form and substance acceptable to the Agent and such Property-Owning
Borrower shall have executed and delivered to Agent a Joinder;

 

(vi)                              Pledge
Agreement.  The Holding Company
Borrowers shall have executed and delivered to the Agent a supplement to each
of the Pledge Agreement (Property-Owning Borrower) and the UCC insurance policy
confirming that the Agent has a perfected first priority security interest in
the related ownership interests pledged as part of the Collateral;

 

37

 

(vii)                           UCC
Insurance Policy.  As to any Advance
(or series of Advances being made on any single Advance Closing Date) in an
aggregate amount of not less than $25,000,000, the Borrower shall have
cooperated with the Agent to cause the issuance by a title company acceptable
to the Agent of a UCC insurance policy with respect to the ownership interests
pledged to the Agent under and pursuant to the Pledge Agreements in an amount
not less than the aggregate amount of such Advance or Advances and the Borrower
shall have paid all costs and expenses incurred in connection therewith;

 

(viii)                        Opinions
of Counsel.  Agent shall have
received from counsel to any new Property-Owning Borrower joining this
Agreement on such Advance Closing Date its legal opinion in form and substance
satisfactory to Agent, as to corporate matters. The legal opinions will be
addressed to Agent and Lenders and their successors and assigns, dated the
Advance Closing Date, and in form and substance reasonably satisfactory to
Agent and its counsel;

 

(ix)                                Closing
Statement.  The Agent and Borrower
shall have agreed upon a detailed closing statement from Borrower in a form
reasonably acceptable to the Agent, which includes a complete description of
Borrower’s sources and uses of funds on the Closing Date; and

 

(x)                                   Indemnification
Agreement.  To the extent the
Borrower has not delivered any of the third party due diligence items set forth
in Section 2.3(b)(i)-(iii), (v)-(x), and (xii) above
with respect to a proposed asset and the Agent has nonetheless approved the
asset as a Property on the condition that Gramercy Capital Corp., delivers an Indemnification
Agreement, the Agent shall have received from Gramercy Capital Corp., an
Indemnification Agreement, in a form reasonably acceptable to the Agent.

 

(g)                                 Borrower
shall have paid all Transaction Costs for which bills have been submitted and
have not been previously paid.

 

ARTICLE III.

GENERAL TERMS

 

Section 3.1.                                   The
Loan.

 

(a)                                  Subject
to the terms and conditions of this Agreement, the Lenders shall make Advances
to Borrower from the initial Advance Closing Date to but excluding the Maturity
Date in an aggregate principal amount at any one time outstanding up to the
Loan Amount. The proceeds of the Loan shall be used solely for the purposes
identified in Section 3.2 hereof. On each Advance Closing Date,
upon the satisfaction of the conditions set forth in Section 3.3,
and 3.4, the Lenders shall initiate a wire or other transfer of
immediately available funds to an account designated by Borrower in an amount
equal to (x) the related Advance Rate, less (y) the sum of (i) the
reasonable out-of-pocket expenses incurred by Agent in connection with the
origination and funding of the Advance, (ii) the reasonable fees and
expenses of Agent’s counsel and (iii) the amount, if any, reasonably
required by the Agent in writing to be deposited in the Deferred Maintenance
Escrow Account, the Real Estate Taxes Escrow Account or the Insurance Escrow
Account pursuant to Section 3.13. Advances shall only be available
when Property is 

 

38

 

added to the facility and shall only be
available with respect to the Property being added to the facility on the
applicable Advance Closing Date. 
Borrower shall not be permitted to reborrow with respect to any Advance
that has been prepaid in accordance with the terms of this Agreement.  The foregoing shall not affect Borrower’s
right to make prepayments and consummate Capital Events in accordance with the
terms of this Agreement.  In no event
shall an Advance be made when any Default has occurred and is continuing.
Borrower may not receive, without Agent’s written consent (i) more than
two Advances during any calendar month, or (ii) an Advance in an amount
less than $3,000,000.

 

(b)                                 The
Loan shall constitute one general obligation of Borrower to Lenders and shall
be secured by the security interest in and Liens granted upon all of the
Collateral, and by all other security interests and Liens at any time or times
hereafter granted by Borrower to Agent or to Collateral Agent on behalf of
Lenders as security for the Loan.

 

Section 3.2.                                   Use
of Proceeds.  Proceeds of the Loan
shall be used only for the following purposes: 
(a) to finance a portion of the acquisition cost of or refinance
the Property, (b) to make the required deposits to the Deferred
Maintenance Escrow Account, the Real Estate Taxes Escrow Account, and the
Insurance Escrow Account, (c) to pay Transaction Costs (including the
reasonable out of pocket expenses incurred by Lenders in connection with the
origination and funding of the Loan) and (d) to pay to counsel to each of
Collateral Agent, the Agent and Borrower its respective reasonable fees,
expenses and disbursements.

 

Section 3.3.                                   Security
for the Loan.  The Note and Borrower’s
obligations hereunder and under all other Loan Documents shall be secured by (a) so
long as an Event of Default has not occurred and is not continuing, the Pledge
Agreements and (b) if an Event of Default has occurred and is continuing,
Liens upon the Property pursuant to the Mortgages, the Contract Assignments,
the Manager’s Subordinations, the Assignments of Leases and Rents.

 

Section 3.4.                                   Borrower’s
Note.  Borrower’s obligation to pay
the principal of and interest on the Loan and all other amounts due under the
Loan Documents shall be evidenced initially by the Note, duly executed and
delivered by Borrower on the Closing Date. The Note shall be payable as to
principal, interest and all other amounts due under the Loan Documents, as
specified in this Agreement, with a final maturity on the Maturity Date. The
initial Lender shall have the right to have the Note subdivided, by exchange
for promissory notes of lesser denominations in the form of the initial Note,
upon written request to Borrower and, in such event, Borrower shall promptly
execute additional or replacement Notes. At no time shall the aggregate
principal amount of the Note (or of such replacement Notes) exceed the Loan
Amount.

 

Section 3.5.                                   Repayment
of Advances; Interest.

 

(a)                                  Borrower
shall pay to Agent interest on the Principal Indebtedness of the Loan from the
initial Advance Closing Date to but excluding the date the Loan shall be paid
in full at the interest rate provided in Section 3.5(b) below.
Interest on the Loan shall accrue on the Principal Indebtedness commencing on
the Closing Date and shall be payable in arrears on the eleventh (11th) day of
the month following the month in which the initial Advance Closing Date occurs
and on the eleventh (11th) day of each and every month thereafter through the
month in which the Maturity Date occurs, unless, in any such case, such day is
not a Business Day, in 

 

39

 

which event such interest shall be payable on
the first Business Day following such date (such date for any particular month,
the “Payment Date”). The Agent and the Collateral Agent shall calculate
LIBOR on each Interest Determination Date for the related Interest Accrual
Period and promptly communicate to Borrower such rate for such period. The
entire outstanding Principal Indebtedness of the Loan and the Note, together
with all accrued but unpaid interest thereon and all other amounts due under
the Loan Documents, shall be due and payable by Borrower to the Lenders on the
Maturity Date. Interest shall be computed on the basis of a 360 day year and
the actual number of days elapsed.

 

(b)                                 Each
Advance shall bear interest during each Interest Accrual Period from and
including its respective Advance Closing Date at a rate per annum equal to the
sum of (x) the greater of (i) 3.50% and (ii) LIBOR determined as
of the Interest Determination Date immediately preceding such Interest Accrual
Period plus (y) the Applicable Margin.

 

(c)                                  [Reserved].

 

(d)                                 While
an Event of Default has occurred and is continuing, Borrower shall pay to Agent
interest at the Default Rate on any amount owing to the Lenders not paid when
due until such amount is paid in full.

 

Section 3.6.                                   Voluntary
Prepayment.

 

(a)                                  Borrower
may voluntarily prepay the Loan in whole or in part on any Payment Date; provided,
however, that, any such prepayment shall be accompanied by an amount
representing all accrued interest on the portion of the Loan being prepaid and
other amounts then due under the Loan Documents.

 

(b)                                 In
the event of any such voluntary prepayment, Borrower shall give Agent written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay, which notice shall be given at least ten (10) days’ prior to the
date upon which prepayment is to be made and shall specify the Payment Date on
which such prepayment is to be made and the amount of such prepayment (which
shall not be less than $1,000,000). If any such notice is given, the amount
specified in such notice shall be due and payable on the Payment Date specified
therein (unless such notice is revoked by Borrower prior to the date specified
therein in which event Borrower shall immediately reimburse Agent for any
out-of-pocket costs incurred in connection with the giving of such notice and
its revocation).

 

Section 3.7.                                   Mandatory
Prepayment; Capital Events; Certain Transfers.

 

(a)                                  So
long as no Event of Default has occurred and is continuing, Borrower may enter
into a Capital Event with respect to one or more Properties, which were
acquired with the proceeds of an Advance; provided, however, that
(i) Borrower shall have given Agent at least fifteen (15) Business Days’
prior written notice of the Capital Event and (ii) by not later than ten (10) Business
Days following the receipt of such notice, the Agent shall have notified the
Borrower that the Release Condition has been satisfied.

 

40

 

(b)                                 Except
as otherwise provided in Section 3.12(e) in the event Loss
Proceeds are required to be made available for restoration pursuant to Section 5.1(x) of
this Agreement and excluding Loss Proceeds which Borrower is obligated to turn
over to tenants or other third persons pursuant to applicable law, in the event
of a casualty or a Taking of the Property, in whole or in part, Borrower shall
cause all such Loss Proceeds otherwise payable with respect to the Property to
be deposited directly into the Collection Account in accordance with Section 3.12(a)(iii) and
shall on the Payment Date occurring immediately following the receipt of such
Loss Proceeds, apply such portion of Loss Proceeds solely to make the payments
required pursuant to item (iii) of clause
first of Section 3.12(b) of this Agreement.

 

(c)                                  If
the Lender determines with respect to any Advance that the outstanding
principal amount of such Advance is greater than 80% of the then current
related Capital Markets Execution and so notifies Borrower on any Business Day,
then the Borrower shall by no later than forty-eight (48) hours after receipt
of such notice prepay the related Advance in part (or if requested by the
Borrower and acceptable to the Agent in its sole discretion, pledge additional
collateral to the Agent for the benefit of the Lenders) such that after giving
effect to such prepayment or pledge (or both), the outstanding principal amount
of such Advance does not exceed 80% of the then current related Capital Markets
Execution.  The Agent may determine the
Capital Markets Execution each Business Day during the term of the Loan and
shall provide to the Borrower written notice of any such Capital Markets
Execution which gives rise to the Borrower’s obligation to make a mandatory
prepayment pursuant to this Section 3.7(c).

 

(d)                                 Upon
payment or prepayment of the Loan in full, Borrower shall pay to the Lenders,
in addition to the amounts specified in Section 3.6, Section 3.7
and Section 3.12, as applicable, all other amounts then due and
payable to the Lenders pursuant to the Loan Documents.

 

(e)                                  Notwithstanding
anything in this Agreement to the contrary, until such time as the individual
Property known as Wachovia Center Tower has been released in accordance with this
Agreement, no Capital Event shall be permitted under Section 3.7(a) unless,
in addition to satisfaction of the Release Condition, Borrower has made a
$1,200,000 prepayment of the Loan.

 

Section 3.8.                                   Application
of Payments After Event of Default. 
All proceeds relating to any repayments of the Loan after the Collateral
Agent shall have received written notice of the occurrence of an Event of
Default shall be applied by Agent, in Agent’s sole discretion, to amounts then
outstanding under this Agreement (including, without limitation, any unpaid
fees of the Collateral Agent payable pursuant to the Fee Letter and any
reasonable out-of-pocket costs and expenses of Collateral Agent and the
Lenders, in that order, reimbursable pursuant to the terms of this Agreement
arising as a result of such repayment; any accrued and unpaid interest then
payable with respect to the Loan or the portion thereof being repaid; the
Principal Indebtedness or the portion thereof being repaid; and any other sums
then due and payable to or for the benefit of Agent pursuant to this Agreement
or any other Loan Document(s)).

 

41

 

Section 3.9.                                   Method
and Place of Payment From the Collection Account to Agent.

 

(a)                                  Except
as otherwise specifically provided herein, all payments and prepayments under
this Agreement and the Note shall be made to Agent not later than 2:00 p.m.,
New York City time, on the date when due and shall be made in lawful money of
the United States of America by wire transfer in federal or other immediately
available funds to the Collection 
Account at LaSalle Bank National Association, ABA No. 071-000-505,
Account No. 720534.1, Attention Brian Graney (312) 904-2047 and Agent
shall disburse such payments to the Person entitled thereto on the Business Day
of receipt of such payments (or the next Business Day if the payments are
received after 2:00 p.m., New York City time on such Business Day) to the
account designated by such Person in writing to Agent from time to time. Any funds
received by Agent after such time shall, for all purposes hereof, be deemed to
have been paid on the next succeeding Business Day. Agent shall notify Borrower
in writing of any changes in the account to which payments are to be made. All
payments made by Borrower hereunder, or by Borrower under the other Loan
Documents, shall be made irrespective of, and without any deduction for, any
set-offs or counterclaims.

 

(b)                                 Except
to the extent otherwise provided herein, (i) each payment or prepayment of
principal of the Loan by Borrower shall be made to Agent for the account of the
Lenders pro rata in accordance with the respective unpaid portion of the Loan
held by such Lenders and (ii) each payment of interest on the Loan by
Borrower shall be made to Agent for the account of the Lenders pro rata in
accordance with the amounts of interest on the portion of the Loan held by such
Lenders then due and payable to the respective Lenders.

 

Section 3.10.                             Taxes.  All payments made by Borrower under the Note
and this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (other than taxes imposed on the income of the Lenders).

 

Section 3.11.                             Release
of Collateral.

 

(a)                                  Notwithstanding
any other provision of this Agreement or any other Loan Document, upon the occurrence
of a Capital Event with respect to any Property as described in Section 3.7(a) hereof
or a mandatory prepayment of an Advance with respect to any Property required
under Section 3.7(c) hereof, Agent, on behalf of the Lenders,
shall, simultaneously with such Capital Event, release of record either (x) the
related Memorandum of Negative Pledge, if the related Mortgage and Assignment
of Rents and Leases have not been previously recorded or (y) the Lien of
the related Mortgage and UCC-1 financing statements and any other Liens in
favor of the Lenders relating to the Property or the portion thereof affected
by such Capital Event, and in either such event, if the Property-Owning
Borrower shall thereupon have no further Property included in the Collateral, shall
release the Property-Owning Borrower from all obligations hereunder and release
the interests in such Property-Owning Borrower from the Pledge Agreement
(Property-Owning Borrower); provided, however, that the Agent
shall not be 

 

42

 

required to release its Lien unless any
Proceeds of such Capital Event are paid to Agent in full or partial
satisfaction of the Indebtedness as and to the extent required by Section 3.7(c).

 

(b)                                 In
the event Borrower satisfies the outstanding Indebtedness in full, Agent and,
at the written direction of Agent, Collateral Agent shall withdraw and hold
uninvested for Borrower in an Eligible Account at LaSalle Bank National
Association from the Business Day immediately preceding the date upon which the
release of funds is to be made to Borrower and release on the date on which the
outstanding Indebtedness is repaid in full any and all amounts then on deposit
in the Reserve Account and/or the Collection Account to Borrower. Upon repayment
of the Loan and all other amounts due hereunder and under the Loan Documents in
full in accordance with the terms hereof and thereof, the Lenders shall,
promptly after such payment, release or cause to be released all Liens with
respect to all Collateral or, to the extent necessary to facilitate future
savings of mortgage tax in states that impose mortgage taxes, assign such Liens
to Borrower’s new lender(s), provided that any such assignments shall be
without recourse, representation, or warranty of any kind, except that Agent
and each Lender shall represent and warrant (1) the then outstanding
amount of the Principal Indebtedness and (2) that such Liens have not been
previously assigned by Agent or any Lender.

 

Section 3.12.                             Central
Cash Management.

 

(a)                                  Collection
Account; Deposits to and Withdrawals from the Collection Account.

 

(i)                                     On
or before the Closing Date, Borrower shall establish and maintain with the
Collateral Agent a collection account (the “Collection Account”), which
shall be an Eligible Account with a separate and unique identification number
and entitled “Deutsche Bank AG, Cayman Islands Branch as Agent, as secured
party from First States Investors DB I, L.P., First States Investors DB I
B, L.P., First States Investors 4200, LLC, First States Investors DB I SP,
L.P., and First States Investors DB I TRS, L.P., pursuant to a Amended and
Restated Loan Agreement dated as of April 1, 2008 among First States
Investors DB I, L.P., First States Investors DB I B, L.P., First States
Investors 4200, LLC, First States Investors DB I SP, L.P., and First States
Investors DB I TRS, L.P., Deutsche Bank AG, Cayman Islands Branch as Agent and
LaSalle Bank National Association as Collateral Agent.” With respect to each
Advance and the related Property, not later than the related Advance Closing
Date, Borrower shall deliver to each tenant under a Lease an irrevocable
direction letter in a form approved by Agent requiring the tenant to pay all
Rents and Money received from Accounts or under Leases and derived from the
Property and Proceeds thereof owed to Borrower directly to the Collection
Account. Within four (4) weeks following the related Advance Closing Date,
Borrower shall deliver to Agent, Collateral Agent and Agent’s counsel a copy of
the irrevocable direction letter sent to the tenant.  In addition, Borrower shall deliver an
irrevocable direction letter in such form to each tenant under a new Lease
entered into after the date thereof prior to the commencement of such Lease. If
a tenant under a Lease forwards such Rents, Money or Proceeds to Borrower
rather than directly to the Collection Account, Borrower shall (i) deliver
an additional irrevocable direction letter to the tenant and make other
commercially reasonable efforts to cause the tenant to forward such Rents,
Money or Proceeds directly to the Collateral Account and (ii) immediately 

 

43

 

deposit or
cause the Manager to deposit in the Collection Account such Rents, Money or
Proceeds. Borrower shall not have any right to withdraw Money from the
Collection Account, which shall be under the sole dominion and control, and the
“control” within the meaning of Sections 9-104 and 9-106 of the UCC, of the
Agent. Any such Rents, Money or Proceeds held by Borrower or the Manager prior
to deposit into the Collection Account shall be held in trust for the benefit
of the Agent and the Lenders.

 

(ii)                                  With respect to each
Advance, Collateral Agent shall establish and maintain individual sub-accounts
of the Collection Account, each of which shall be an Eligible Account, to
receive all Rents and Money received under Leases and derived from the Property
under each individual portfolio of Property which is the subject of an Advance
(each a “Property Sub-Account” and collectively, the “Property
Sub-Accounts”).  As of the close of
business on the Business Day immediately preceding each Payment Date,
Collateral Agent shall sweep all amounts on deposit in each of the Property
Sub-Accounts into the Collection Account to be distributed in accordance with
the provisions of Section 3.12(b) hereof.

 

(iii)                               In the event that Agent
has notified the Collateral Agent and Borrower that an Event of Default has
occurred and is continuing,

 

(A)                              all
Rents and Money received from Accounts or under Leases and derived from the
Property and all Proceeds thereof shall be payable to Agent for the account of
Lenders or as otherwise directed by Agent on behalf of Lenders (provided
that such direction shall not result in the nonpayment of any outstanding fees
payable to the Collateral Agent pursuant to the Fee Letter),

 

(B)                                Agent
on behalf of the Lenders shall make deposits, or cause deposits to be made, of
such Rents, Money and Proceeds directly to the Collection Account, and Borrower
shall cooperate (and shall cause the Manager to cooperate) with Agent on behalf
of the Lenders in the making of such deposits or causing such deposits to be
made,

 

(C)                                Borrower
shall not have any right to make or direct any withdrawals from the Collection
Account or the Reserve Account without the prior written consent of Agent on
behalf of the Lenders, and

 

(D)                               proceeds
on deposit in the Collection Account and the Reserve Account may be applied by
Collateral Agent on behalf of the Lenders for the payment of the Indebtedness
pursuant to Section 3.8 of this Agreement.

 

(iv)                              So
long as no Event of Default shall have occurred and be continuing, Borrower
shall deposit in the Collection Account: 
(a) as and when required by Section 3.7(b), Loss
Proceeds received by Borrower and (b) simultaneously with the consummation
of any Capital Event and if required by the Agent, the Capital Event Proceeds
resulting from such Capital Event (and any contributions from Borrower’s
principals) required in connection with such Capital Event in order to comply
with the Release Condition.

 

44

 

(b)                                 Distribution
of Cash.  So long as the Collateral
Agent shall not have received written notice from Agent on behalf of the
Lenders that an Event of Default has occurred and is continuing, the Collateral
Agent shall hold uninvested for Borrower or the Lenders in an Eligible Account
at LaSalle Bank National Association, the funds on deposit in the Collection
Account as of the close of business on the Business Day immediately preceding
each Payment Date to such Payment Date and shall apply such funds on such
Payment Date, in each case to the extent of the amounts set forth in the
related Payment Date Statement delivered by the Collateral Agent, as follows:

 

first,
to the payment to the Agent of (i) the interest then due and payable on
the Note with respect to the related Interest Accrual Period and (ii) the
Principal Indebtedness in an amount equal to any additional amount to which the
Agent is then entitled pursuant to Section 3.7 of this Agreement;

 

second,
to the payment to the Collateral Agent of its fees then due and payable
pursuant to the Fee Letter;

 

third,
to the Real Estate Taxes Escrow Account and the Insurance Escrow Account, in
that order, in the respective amounts required to be deposited therein as
described in Section 3.13(b);

 

fourth,
to the Replacement Reserve Account in the amount required to be deposited
therein as described in Section 3.13(a);

 

fifth,
to the Leasing Costs/TI Costs Account in the amount required to be deposited
therein as described in Section 3.13(a);

 

sixth,
Intentionally Omitted;

 

seventh,
to the payment of any outstanding indemnification payment to which an
Indemnified Party is then entitled pursuant to Sections 5.1(i) and 5.1(j);
and

 

eighth,
to the payment of the outstanding Principal Indebtedness until the outstanding Principal
Indebtedness has been reduced by an amount equal to the Mandatory Initial Term
Amortization Amount; and

 

ninth,
to Borrower in an amount equal to remaining available funds, if any.

 

(c)                                  Permitted
Investments.  Borrower shall, or
shall direct Collateral Agent in writing to, invest and reinvest any balance in
the Collection Account, from time to time in Permitted Investments; provided,
however, that

 

(i)                                     the
maturity of the Permitted Investments on deposit therein shall be at the
discretion of Borrower, but in any event no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
therefrom pursuant to Section 3.12(a) or 3.12(b) of
this Agreement,

 

45

 

(ii)                                  after
Collateral Agent has received written notice from Agent that an Event of
Default has occurred and is continuing Borrower shall not have any right to
direct investment of the balance in the Collection Account,

 

(iii)                               all
such Permitted Investments shall be held in the name of Collateral Agent and
shall be credited to the Collection Account, and

 

(iv)                              if
no written investment direction is provided to Collateral Agent by Borrower,
Collateral Agent shall invest any balance in the Collection Account in an
investment of the type described in clause (vii) of the
definition of Permitted Investments.

 

Agent, the Lenders and Collateral Agent shall
have no liability for any loss in investments of funds in the Collection
Account that are invested in Permitted Investments (unless, in the case of
Collateral Agent, invested contrary to Borrower’s or Agent’s written direction)
and no such loss shall affect Borrower’s obligation to fund, or liability for
funding, the Collection Account. All interest paid or other earnings on the
Permitted Investments of funds deposited into the Collection Account made
hereunder shall be deposited into the Collection Account. Borrower shall
include all earnings on the Collection Account as income of Borrower for
federal and applicable state tax purposes.

 

(d)                                 Monthly
and Payment Date Statements.  With
respect to each Collection Period, Collateral Agent shall prepare and deliver,
or shall cause to be prepared and delivered, to Agent a statement no later than
ten (10) Business Days after the end of such Collection Period setting
forth the aggregate deposits to and withdrawals from the Collection Account and
each account of the Reserve Account and the opening and closing balances in
such accounts (collectively, the “Monthly Statement”). With respect to
each Payment Date and the related Collection Period and Interest Accrual
Period, Collateral Agent shall prepare and deliver, or shall cause to be
prepared and delivered to Borrower and Agent, a statement (each, a “Payment
Date Statement”) no later than the Business Day prior to such Payment Date
with respect to each of the items below, setting forth the following:

 

(i)                                     the
aggregate deposits to the Collection Account during the related Collection
Period for each type of deposit under this Agreement and the opening and
closing balances in the Collection Account;

 

(ii)                                  the
amount of interest then due and payable on the Note with respect to the
Interest Accrual Period (including the applicable number of days and interest
rate which were applied in determining such amount);

 

(iii)                               the
amount of the fees of the Collateral Agent and any expenses payable to the
Collateral Agent and any outstanding indemnification payment to which an
Indemnified Party is then entitled under this Agreement;

 

(iv)                              the
following information with respect to the Principal Indebtedness in a format
reasonably acceptable to Agent:  (1) the
Principal Indebtedness as of the preceding Payment Date, (2) any principal
payable to the Lenders pursuant to 

 

46

 

Sections 3.6,
3.7 or 3.12 on such Payment Date, and (3) the Principal
Indebtedness on the current Payment Date (taking into account such payments);
and

 

(v)                                 the
amount withdrawn from or remitted to each account of the Reserve Account in
accordance with Sections 3.12 and 3.13 and the amount
remitted to the Borrower.

 

(e)                                  Loss
Proceeds.  In the event of a casualty
or Taking with respect to the Property, unless pursuant to Section 5.1(x) of
this Agreement or applicable law, the Loss Proceeds are to be made available to
Borrower for restoration or to the tenants, all of Borrower’s interest in Loss
Proceeds shall be paid directly to the Collection Account to satisfy the
requirements of Section 3.7(b). If the Loss Proceeds are to be made
available for restoration pursuant to this Agreement or to the tenants pursuant
to applicable law, such Loss Proceeds shall be held by the Collateral Agent in
a segregated interest-bearing Eligible Account in the name of the Collateral
Agent on behalf of the Lenders to be opened by the Collateral Agent within
three (3) Business Days after the Collateral Agent receives written notice
of the necessity therefor from the Agent, to be withdrawn by the Collateral
Agent and held uninvested in a LaSalle Bank National Association account from
the Business Day immediately preceding the date upon which payment to Borrower
or to the tenants is to be made to such payment date for delivery to Borrower
or to the tenants from time to time to pay restoration costs pursuant to a
schedule reasonably acceptable to Agent and Borrower. Funds on deposit in any
such account opened by the Collateral Agent shall be invested in Permitted
Investments in the same manner and subject to the same restrictions as set
forth in Section 3.12(c) with respect to the Collection
Account (except that the maturity shall be not later than as necessary to
satisfy the schedule referred to in the preceding sentence). If any Loss
Proceeds are received by Borrower, such Loss Proceeds shall be received in trust
for the Lenders, shall be segregated from other funds of Borrower, and shall be
forthwith paid to Collateral Agent to the extent necessary to comply with this
Agreement.

 

(f)                                    Collateral
Agent’s Reliance.  Collateral Agent
may rely and shall be protected in acting or refraining from acting upon any
written notice, instruction or request furnished to it hereunder and reasonably
believed by it to be genuine and to have been signed or presented by the proper
party or parties. Collateral Agent may rely on written notice from Agent as to
the occurrence and continuance of an Event of Default, without further written
notice by the Lenders to the contrary.

 

Section 3.13.                             Reserve
Account.

 

(a)                                  Deferred
Maintenance Escrow Account, Replacement Reserve Account and Leasing Costs/TI
Costs Account.

 

(i)                                     On
or before the Closing Date, Borrower shall establish and maintain with the
Collateral Agent three separate accounts for Capital Improvement Costs,
replacement reserves, Leasing Commissions and TI Costs, each of which shall be
an Eligible Account and shall have the same title as the Collection Account,
for the benefit of the Lenders until the Loan is paid in full. The three
accounts shall be designated the Deferred Maintenance Escrow Account (the “Deferred
Maintenance 

 

47

 

Escrow Account”),
the Replacement Reserve Account (the “Replacement Reserve Account”), and
the Leasing Costs/TI Costs Account (the “Leasing Costs/TI Costs Account”).
If required by Agent, on any Advance Closing Date, Agent shall deposit out of
the proceeds of an Advance in the Deferred Maintenance Escrow Account for the
Borrower an amount for required Capital Improvement Costs to be incurred with
respect to the related Property being acquired, based upon the Engineering
Reports delivered to Agent and the reasonable determination of the Agent of any
additional necessary amounts. On each Payment Date, if required in writing by
the Agent, Borrower shall instruct the Collateral Agent in the Payment Date
Statement to deposit from the Collection Account (or if the funds for such
deposit are not available pursuant to Section 3.12(b), shall make a
deposit of Borrower’s funds) in the Replacement Reserve Account, equal to the
Replacement Reserve Amount and in the Leasing Costs/TI Costs Account, equal to
the Leasing Costs/TI Costs Amount.

 

(ii)                                  Any
and all Moneys remitted to the Deferred Maintenance Escrow Account, together
with any Permitted Investments in which such Moneys are or will be invested or
reinvested during the term of this Agreement, shall be held in the Deferred
Maintenance Escrow Account (i) to be withdrawn by Collateral Agent upon
written request of Borrower made not more than once each month in an amount not
less than $5,000 and held uninvested for Borrower or the Lenders in an Eligible
Account at LaSalle Bank National Association from the close of business on the
Business Day immediately preceding the date upon which payment is to be made to
Borrower to such date, and applied to pay directly or reimburse Borrower for
immediate repairs constituting Capital Improvement Costs referenced in the
Engineering Reports for the related Property, or (ii) for purposes
otherwise requested by Borrower and reasonably approved by the Agent in
writing.

 

(iii)                               Any
and all Moneys remitted to the Replacement Reserve Account, together with any
Permitted Investments in which such Moneys are or will be invested or
reinvested during the term of this Agreement, shall be held in the Replacement
Reserve Account (i) to be withdrawn by Collateral Agent upon written
request by Borrower made not more than once each month in an amount not less
than $5,000 and held uninvested for Borrower or the Lenders in an Eligible
Account at LaSalle Bank National Association from the close of business on the
Business Day immediately preceding the date upon which payment is to be made to
Borrower to such date, and applied to pay directly or reimburse Borrower for
replacement reserve costs reasonably determined by Borrower for the Property
for which such funds were so reserved or (ii) for purposes otherwise
requested by Borrower and reasonably approved by the Agent in writing.

 

(iv)                              Any
and all Moneys remitted to the Leasing Costs/TI Costs Account, together with
any Permitted Investments in which such Moneys are or will be invested or
reinvested during the term of this Agreement, shall be held in the Leasing
Costs/TI Costs Account (i) to be withdrawn by Collateral Agent upon
written request by Borrower made not more than once each month in an amount not
less than $5,000 and held uninvested for Borrower or the Lenders in an Eligible
Account at LaSalle Bank National Association from the close of business on the
Business Day immediately 

 

48

 

preceding the
date upon which payment is to be made to Borrower to such date, and applied to
pay directly or reimburse Borrower for Leasing Commissions and TI Costs
incurred in connection with leasing activities for the Property for which such
funds were so reserved after the related Advance Closing Date specified by
Borrower in a written request delivered to Collateral Agent and the Agent or (ii) for
purposes otherwise requested by Borrower and reasonably approved by the Agent
in writing.

 

(v)                                 Not
less than three (3) Business Days prior to Borrower’s delivery of a
request to Collateral Agent to withdraw the funds on deposit in the Deferred
Maintenance Escrow Account, Replacement Reserve Account or Leasing Costs/TI
Costs Account, in whole or in part, Borrower shall provide the Agent with
written notice (with a copy to Collateral Agent) of such request (including
therein a statement of the purpose for the withdrawal and in the case of a
reimbursement of the Borrower, evidence that the related costs have been paid).
In the event Borrower completes the repairs for which funds were reserved in
the Deferred Maintenance Escrow Account to the reasonable satisfaction of the
Agent, Agent and, at the written direction of Agent, Collateral Agent shall
withdraw and hold uninvested for Borrower in an Eligible Account at LaSalle
Bank National Association from the Business Day immediately preceding the date
upon which the release of funds is to be made to Borrower and release on the
date of release any and all amounts then on deposit in the Deferred Maintenance
Escrow Account to the Collection Account.

 

(b)                                 Real
Estate Taxes Escrow Account, Insurance Escrow Account.  On or before the Closing Date, Borrower shall
establish and maintain with the Collateral Agent two separate accounts for
Basic Carrying Costs, each of which shall be an Eligible Account and shall have
the same title as the Collection Account for the benefit of the Lenders until
the Loan is paid in full. The two accounts shall be designated the Real Estate
Taxes Escrow Account (the “Real Estate Taxes Escrow Account”) and the
Insurance Escrow Account (the “Insurance Escrow Account”). On each
Advance Closing Date, the Agent may deposit out of the Loan proceeds in the
Real Estate Taxes Escrow Account and in the Insurance Escrow Account amounts
which the Agent deems necessary based upon Basic Carrying Costs which are to
become due and payable with respect to the Property being acquired with the
proceeds of the related Advance. On each Payment Date, Borrower shall instruct
the Collateral Agent in the Payment Date Statement to deposit from the
Collection Account (or, if the funds for such deposit are not available
pursuant to Section 3.12(b), shall make a deposit of Borrower’s
funds),

 

(1)                                  an
amount equal to the Impositions portion of Monthly Property Expenses in the
Real Estate Taxes Escrow Account (except that such deposit shall not be
required to be made, if, in connection with CTL Properties only, the Borrower
demonstrates to the Agent’s reasonable satisfaction that a tenant under the
related Credit Lease is expressly required to make a similar deposit to a
reserve or to pay such Imposition), and

 

(2)                                  an
amount equal to the portion of Monthly Property Expenses equal to insurance
premiums for policies of insurance required to be maintained by Borrower with
respect to the Property pursuant to this Agreement or the other Loan Documents
in the Insurance Escrow Account (except that such deposit shall not be 

 

49

 

required to be
made, if, in connection with CTL Properties only, the Borrower demonstrates to
the Agent’s reasonable satisfaction that a tenant under the related Credit
Lease is expressly required to make a similar deposit to a reserve or to pay
such Imposition).

 

Any and all Moneys remitted to the Real
Estate Taxes Escrow Account or Insurance Escrow Account together with any
Permitted Investments in which such Moneys are or will be invested or
reinvested during the terms of this Agreement, shall be held in the Real Estate
Taxes Escrow Account or Insurance Escrow Account to be withdrawn from the Real
Estate Taxes Escrow Account or Insurance Escrow Account, as applicable, by the
Collateral Agent upon written request of Borrower delivered to Agent and
Collateral Agent together with documentation and other evidence (including
invoices and in the case of a reimbursement of the Borrower, evidence that the
related costs have been paid) with respect to the respective Basic Carrying
Costs towards which such funds are to be applied and held uninvested for Borrower
or the Lenders in an Eligible Account at LaSalle Bank National Association from
the close of business on the Business Day immediately preceding the date upon
which direct payment or reimbursement to Borrower is to be made to such date,
and applied to pay directly (or reimburse Borrower) for (i) (x) any
Impositions (in the case of the Real Estate Taxes Escrow Account) or (y) any
insurance premiums for policies of insurance required to be maintained by
Borrower with respect to the Property pursuant to this Agreement or the other
Loan Documents (in the case of the Insurance Escrow Account) shown on the
Operating Budget, in each case currently due to be paid and not previously paid
or reimbursed and (ii) any Property Expenses not shown on the Operating Budget
but reasonably approved by the Agent in writing for payment or reimbursement.
The Borrower shall deliver to the Agent tax certificates or other evidence of
tax paid promptly following payment of same in order to enable the Agent to
verify the payment of taxes.

 

(c)                                  Mortgage
Recording Tax Escrow Account.  On or
before the Closing Date, Borrower shall establish and maintain with the
Collateral Agent an account for Mortgage recording taxes, if any, that would be
payable in connection with a Real Estate Closing on the Property which is
acquired with the proceeds of each Advance, which shall be an Eligible Account
and shall have the same title as the Collection Account, for the benefit of the
Lenders until the Loan is paid in full. The account shall be designated the
Mortgage Recording Tax Escrow Account (the “Mortgage Recording Tax Escrow
Account”). If required by Agent, on any Advance Closing Date, Agent shall
deposit out of the proceeds of an Advance in the Mortgage Recording Tax Escrow
Account for the Borrower an amount for required Mortgage recording taxes
calculated by the Title Agent that satisfy the requirements of Section 3.16
of this Agreement sufficient to create first Liens.  Any and all Moneys remitted to the Mortgage
Recording Tax Escrow Account, together with any Permitted Investments in which
such Moneys are or will be invested or reinvested during the term of this
Agreement, shall be held in the Mortgage Recording Tax Escrow Account (i) to
be withdrawn by Collateral Agent upon written request of Agent following the
occurrence and during the continuance of an Event of Default and held
uninvested for Borrower or the Lenders in an Eligible Account at LaSalle Bank
National Association from the close of business on the Business Day immediately
preceding the date upon which payment is to be made to Agent to such date, and
applied to pay directly or reimburse Agent for Mortgage recording taxes imposed
upon recordation of the Mortgages.

 

50

 

(d)                                 Investment
of Funds.  All or a portion of any
Moneys in the Reserve Account shall be invested and reinvested, so long as
Collateral Agent has not received written notice from Agent that an Event of
Default has occurred and is continuing, by Collateral Agent in accordance with
written instructions delivered by Borrower, or after Collateral Agent has
received written notice from Agent that an Event of Default has occurred and is
continuing, by Agent, in one or more Permitted Investments. If no written
investment direction is provided to Collateral Agent by Borrower, Collateral
Agent shall invest such Moneys in an investment of the type described in clause (vii) of
the definition of Permitted Investments. Agent, the Lenders and Collateral
Agent shall have no liability for any loss in investments of funds in the
Reserve Account that are invested in Permitted Investments (unless, in the case
of Collateral Agent, invested contrary to Borrower’s or Agent’s written
direction) and no such loss shall affect Borrower’s obligation to fund, or
liability for funding, the Reserve Account. Unless and until title to the funds
therein shall have vested in any Person other than Borrower, Borrower shall
include all such income or gain on any account of the Reserve Account as income
of Borrower for federal and applicable state tax purposes.  So long as an Event of Default has not
occurred and is not continuing, all such Permitted Investments shall be made in
the name of the Collateral Agent on behalf of the Lenders or as otherwise
directed by Agent.  Agent shall cause all
income or other gain from investments of Money held in the Reserve Account to
be deposited in such respective account of the Reserve Account immediately upon
receipt and any loss resulting from such investments shall be charged to such
respective account of the Reserve Account.

 

(e)                                  Event
of Default.  After Collateral Agent
has received written notice from Agent that an Event of Default has occurred
and is continuing, Borrower shall not be permitted to make any withdrawal(s) from
the Reserve Account and Collateral Agent at the written direction of Agent may
liquidate any Permitted Investments of the amount on deposit in such account,
withdraw and hold the proceeds of such liquidation uninvested for Lenders in a
LaSalle Bank National Association account from the Business Day immediately
preceding the date such funds are to be used and use such amount on deposit in
the Reserve Account on the succeeding Business Day to make payments on account
of the Loan in accordance with the priorities set forth in Section 3.8.

 

Section 3.14.                             Additional
Provisions Relating to the Collection Account and the Reserve Account.

 

(a)                                  The
Collateral Agent covenants and agrees that: (i) all securities or other
property underlying any financial assets credited to any Pledged Account shall
be registered in the name of the Collateral Agent, indorsed to the Collateral
Agent or indorsed in blank or credited to another securities account maintained
in the name of the Collateral Agent and in no case will any financial asset
credited to any Pledged Account be registered in the name of the Borrower,
payable to the order of the Borrower or specially indorsed to the Borrower
except to the extent the foregoing have been specially indorsed to the
Collateral Agent or in blank; and (ii) all Permitted Investments and all
other property delivered to the Collateral Agent pursuant to this Agreement
will be promptly credited to one of the Pledged Accounts.

 

(b)                                 The
Collateral Agent hereby agrees that each item of property (whether investment
property, financial asset, security, instrument, cash or otherwise) credited to
any 

 

51

 

Pledged Account shall be treated as a “financial
asset” within the meaning of Section 8-102(a)(9) of the UCC.

 

(c)                                  If
at any time the Collateral Agent shall receive from the Agent an entitlement
order (i.e., an order directing transfer or
redemption of any financial asset relating to a Pledged Account) or any
instruction (within the meaning of Section 9-104 of the UCC) originated by
the Agent (i.e., an instruction directing the
disposition of funds in a Pledged Account), the Collateral Agent shall comply
with such entitlement order or instruction without further consent by the
Borrower or any other Person.

 

(d)                                 Regardless
of any provision in any other agreement, for purposes of the UCC, with respect
to each Pledged Account, New York shall be deemed to be the bank’s jurisdiction
(within the meaning of Section 9-304 of the UCC) and the securities
intermediary’s jurisdiction (within the meaning of Section 8-110 of the
UCC). The Pledged Accounts shall be governed by the laws of the State of New
York.

 

(e)                                  Except
for the claims and interest of the Agent and of the Borrower in the Pledged
Accounts, the Collateral Agent represents and warrants that it does not know of
any Lien on or claim to, or interest in, any Pledged Account or in any “financial
asset” (as defined in Section 8-102(a) of the UCC) credited thereto.
If any Person asserts any Lien, encumbrance or adverse claim (including any
writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Pledged Accounts or in any financial asset carried
therein, the Collateral Agent will promptly notify the Agent and the Borrower
thereof.

 

Section 3.15.                             Security
Agreement.

 

(a)                                  Pledge
of Account.  To secure the full and
punctual payment and performance of all of the Indebtedness, Borrower hereby
assigns, conveys, pledges and transfers to the Agent on behalf of the Lenders
as secured party, and grants Agent on behalf of the Lenders a first and
continuing security interest in and to, the following property, whether now
owned or existing or hereafter acquired or arising and regardless of where
located (collectively, the “Account Collateral”):

 

(i)                                     all
of Borrower’s right, title and interest in the Pledged Accounts and all Money
and Permitted Investments, if any, from time to time deposited or held in the
Pledged Accounts or purchased with funds or assets on deposit in the fledged
Accounts;

 

(ii)                                  all
of Borrower’s right, title and interest in interest, dividends, Money,
Instruments and other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any of the foregoing until
such time as such items are disbursed from the Pledged Accounts; and

 

(iii)                               to
the extent not covered by clause (i) or (ii) above,
all Borrower’s right, title and interest in Proceeds of any or all of the
foregoing until such time as such items are disbursed from the Pledged Accounts.

 

52

 

(b)                                 Covenants.  So long as any portion of the Indebtedness is
outstanding, Borrower shall not open (or permit Collateral Agent to open) any
account other than the Collection Account for the deposit of Rents or Money
received from Accounts or under Leases and derived from the Property and all
Proceeds to pay amounts owing hereunder, other than any account for amounts
required by law to be segregated by Borrower. Borrower shall not have any right
to withdraw Money from the Reserve Account, which shall be under the sole
dominion and control, and the “control” within the meaning of Sections 9-104
and 9-106 of the UCC, of the Agent. The Account Collateral shall be subject to
such applicable laws, and such applicable regulations of the Board of Governors
of the Federal Reserve System and of any other banking authority or
Governmental Authority, as may now or hereafter be in effect, and to the rules,
regulations and procedures of Collateral Agent relating to demand deposit
accounts generally from time to time in effect.

 

(c)                                  Financing
Statements; Further Assurances.  The
Borrower hereby authorizes the filing of any financing statements or
continuation statements, and amendments to financing statements, in any
jurisdictions and with any filing offices as the Agent may determine, in its
sole discretion, are necessary or advisable to perfect the security interest
granted to the Agent in connection herewith. Such financing statements may
describe the collateral in the same manner as described in any security
agreement or pledge agreement entered into by the parties in connection
herewith or may contain an indication or description of collateral that
describes such property in any other manner as the Agent may determine, in its
sole discretion, is necessary, advisable or prudent to ensure the perfection of
the security interest in the collateral granted to the Agent in connection
herewith, including, without limitation, describing such property as “all
assets” or “all personal property” whether now owned or hereafter acquired.
From time to time, at the expense of Borrower, Borrower shall promptly execute
and deliver all further instruments, and take all further action, that Agent
may reasonably request, in order to continue the perfection and protection of
the pledge and security interest granted or purported to be granted hereby.

 

(d)                                 Transfers
and Other Liens.  Borrower shall not
sell or otherwise dispose of any of the Account Collateral other than pursuant
to the terms of this Agreement and the other Loan Documents, or create or
permit to exist any Lien upon or with respect to all or any of the Account
Collateral, except for the Lien granted to Agent, Permitted Encumbrances and
the rights of the institution acting as Agent, under or as contemplated by this
Agreement.

 

(e)                                  No
Waiver.  Every right and remedy
granted to Agent under this Agreement or by law may be exercised by Agent at
any time and from time to time, and as often as Agent may deem it expedient.
Any and all of Agent’s rights with respect to the pledge of and security
interest in the Account Collateral granted hereunder shall continue unimpaired,
and to the extent permitted by law, Borrower shall be and remain obligated in
accordance with the terms hereof, notwithstanding (i) any proceeding of
Borrower under the United States Bankruptcy Code or any bankruptcy, insolvency
or reorganization laws or statutes of any state, (ii) the release or
substitution of Account Collateral at any time, or of any rights or interests
therein or (iii) any delay, extension of time, renewal, compromise or
other indulgence granted by Agent in the event of any Default with respect to
the Account Collateral or otherwise hereunder. No delay or extension of time by
Agent in exercising any power of sale, option or other right or remedy
hereunder, and no notice or demand which may be given to or made upon Borrower
by Agent, shall constitute a waiver thereof, or limit, impair or prejudice
Agent’s right, without 

 

53

 

notice or demand, to take any action against
Borrower or to exercise any other power of sale, option or any other right or
remedy.

 

(f)                                    Agent
Appointed Attorney-In-Fact.  Borrower
hereby irrevocably constitutes and appoints Agent as Borrower’s true and lawful
attorney-in-fact, with full power of substitution, at any time after the
occurrence and during the continuation of an Event of Default, to execute,
acknowledge and deliver any instruments and to exercise and enforce every right,
power, remedy, option and privilege of Borrower with respect to the Account
Collateral, and do in the name, place and stead of Borrower, all such acts,
things and deeds for and on behalf of and in the name of Borrower with respect
to the Account Collateral, which Borrower could or might do or which Agent may
deem necessary or desirable to more fully vest in Agent the rights and remedies
provided for herein with respect to the Account Collateral and to accomplish
the purposes of this Agreement. The foregoing powers of attorney are
irrevocable and coupled with an interest and shall terminate upon repayment of
the Indebtedness in full.

 

(g)                                 Continuing
Security Interest; Termination.  This
Section 3.15 shall create a continuing pledge of and security
interest in the Account Collateral and shall remain in full force and effect
until payment in full by Borrower of the Indebtedness. Upon payment in full by
Borrower of the Indebtedness, Agent shall return to Borrower such of the
Account Collateral as shall not have been applied pursuant to the terms hereof,
and shall execute such instruments and documents as may be reasonably requested
by Borrower to evidence such termination and the release of the pledge and lien
hereof.

 

(h)                                 Right
of Set-off.  Collateral Agent waives
any and all rights it may have at law or otherwise to set off or make any claim
against the Account Collateral, except, with respect to any checks returned for
insufficient funds, and the payment of Collateral Agent’s fees and expenses due
under this Agreement (including reasonable attorney fees and disbursements) for
the maintenance of the Account Collateral.

 

Section 3.16.                             Real
Estate Security Documents; Mortgage Recording Taxes.

 

(a)                                  If
an Event of Default has occurred and is continuing, then the Agent may in its
sole and absolute discretion cause the Real Estate Closing to occur in whole or
in part. Any out-of-pocket costs and expenses incurred by the Agent in
connection therewith (including, but not limited to, the costs to purchase the
Title Insurance Policy and all state, county and municipal recording and all
other taxes imposed upon the execution and recordation of the Mortgages, if
any), to the extent not paid by the Borrower, shall be added to the Principal
Indebtedness and treated as an advance by the Agent to protect its interest in
the Collateral.

 

(b)                                 Except
as set forth in the following sentence, the Liens to be created by the
Mortgages are intended to encumber each legal parcel of the Property either (x) with
respect to each jurisdiction that does not impose mortgage recording taxes, to
the full extent of the Loan Amount or (y) with respect to jurisdictions
that impose mortgage recording taxes, 125% of the related Advance for such
Property. By not later than five (5) Business Days after the Agent shall
have notified the Borrower that an Event of Default shall have occurred,
Borrower shall have paid all state, county and municipal recording and all
other taxes imposed upon the execution and recordation of the Mortgages.

 

54

 

Section 3.17.          Taxes.

 

(a)           All payments made by Borrower under the Note and this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority (other than taxes imposed on (or measured by) the income of any
Lender as a result of a present or former connection between Lender and the
jurisdiction imposing such taxes excluding such connection arising solely from
transactions or payments contemplated by this Agreement). If any such tax is
required to be deducted or withheld from any payment under the Note or this
Agreement, Borrower shall increase the payment to the extent necessary so as to
yield the amount (after all deductions or withholdings required) that would
have been payable if there were no such deduction or withholding. If any such
tax is payable by Borrower, then, as promptly as possible thereafter, Borrower
shall send to such Lender a copy of an original receipt received by the
Borrower showing payment thereof. If Borrower fails to pay any such tax when
due or fails to remit to such Lender the required receipt, Borrower shall
indemnify such Lender for any incremental taxes, interest or penalties that may
become payable by the Lender as a result of any such failure.

 

(b)           If a Lender is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code), then such Lender shall
provide, on or before such Lender becomes a party to this Agreement and as
requested by Borrower thereafter, an IRS Form W-8ECI or W-8BEN (plus a
non-bank certificate in the case of a Lender relying on the so-called “portfolio
interest” exemption) claiming complete exemption from, or a reduced rate of,
United States withholding tax on payments under the Note or this Agreement. No
Lender shall be required to provide a form that such Lender is not legally able
to deliver. In addition, such Lender agrees that from time to time, when a
lapse in time or change in circumstances renders the previous certification
invalid or inaccurate in any material respect, it will promptly deliver to
Borrower two new accurate and complete original signed copies of Internal
Revenue Service Form W-8ECI or W-8BEN (or successor forms) and such other
forms as may be required in order to confirm or establish the entitlement of
such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under the Note or this Agreement, or
it shall immediately notify Borrower of its inability to deliver any such form,
in which case such Lender shall not be required to deliver any such form
pursuant to this Section 3.17(b). Notwithstanding anything to the
contrary contained herein, (x) Borrower shall be entitled, to the extent
required to do so by law, to deduct or withhold income or similar taxes imposed
by a Governmental Authority from interest, fees or other amounts payable
hereunder for the account of any such Lender to the extent that such Lender has
not provided to the Borrower properly completed and executed documentation that
establishes a complete exemption from such deduction or withholding (which, with
respect to the United States and political subdivisions thereof, shall be
Internal Revenue Service Forms described in this Section 3.17(b),
and, with respect to any other Governmental Authority, shall be requested in
writing by Borrower), (y) Borrower shall not be obligated to gross-up
payments to be made to such Lender in respect of taxes imposed by a
Governmental Authority if such Lender has not provided to the Borrower properly
completed and executed documentation reasonably requested by Borrower, as would
permit Borrower to make payments without withholding or at a reduced rate, provided 

 

55

 

that the foregoing shall not apply if such
Lender is not legally able to or entitled to deliver such documentation, and (z) Borrower
shall not be obligated to gross-up payments under Section 3.17(a) to
be made to such Lender in respect of any tax that is in effect and would apply
to amounts payable to such Lender at the time such Lender becomes a party to
this Agreement, except to the extent the assignor with respect to such Lender
would have been entitled at the time of assignment to receive additional
amounts from Borrower with respect to any tax pursuant to this Section 3.17.
Other than as set forth in this Section 3.17(b), Borrower agrees to
pay additional amounts as provided in Section 3.17(a) and to
indemnify each Lender and its assignees and transferees in respect of any taxes
deducted or withheld by it as a result of any changes that are effective after
the Closing Date in any applicable law, treaty, governmental rule, regulation,
guideline or other, or in the interpretation thereof, relating to the deducting
or withholding of such taxes.

 

(c)           If the Lender receives a refund in respect of taxes paid
by Borrower which refund in the judgment of the Lender is allocable to a
payment made by Borrower pursuant to Section 3.13(a), the Lender
shall promptly pay such refund, but not out-of-pocket costs of the Lender, to
Borrower if all of the payments due to the Lender under this Section 3.13
have been paid in full.

 

Section 3.18.          General Collateral Agent Provisions.

 

(a)           Appointment. 
The Lenders hereby designate and appoint LaSalle Bank National
Association as Collateral Agent on behalf of the Lenders under this Agreement,
and authorize LaSalle Bank National Association, as Collateral Agent for the
Lenders, to take such actions on their behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as are expressly
delegated to Collateral Agent by the terms of this Agreement, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, Collateral Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with the Lenders, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against Collateral Agent.

 

(b)           Collateral Agent’s Right to Perform.  If an Event of Default shall have occurred
and be continuing, then Collateral Agent may, but shall have no obligation to,
itself perform, or cause performance of, such covenant or obligation giving
rise to such Event of Default. The reasonable fees and expenses of Collateral
Agent incurred in connection therewith shall be payable by Borrower to
Collateral Agent upon demand, which obligation shall be secured by all
Collateral.

 

(c)           Standard of Care. 
Beyond the observance of Accepted Practices and the exercise of
reasonable care in the custody or disbursements thereof, Collateral Agent shall
not have any duty as to any Account Collateral or any income thereon in its
possession or control or in the possession or control of any agents for, or of
Collateral Agent, or the preservation of rights against any Person or otherwise
with respect thereto. Collateral Agent shall be deemed to have exercised
reasonable care in the custody of the Account Collateral in its possession if
the Account Collateral is accorded treatment in accordance with the Accepted
Practices.

 

56

 

(d)           Exculpatory Provisions.  Neither Collateral Agent nor any of its
officers, directors, employees, agents, attorneys, attorneys-in-fact or
Affiliates shall be responsible in any manner to the Lenders for any recitals,
statements, representations or warranties made by Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for
in, or received by Collateral Agent under or in connection with, this Agreement
or any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, the Note or any other Loan
Document or for any failure of Borrower to perform its obligations hereunder or
thereunder. Collateral Agent shall not be under any obligation to the Lenders
to ascertain or to inquire as to the agreements contained in, or conditions of,
this Loan Agreement or any other Loan Document, or to inspect the properties,
books or records of Borrower. Collateral Agent shall not be required to take
any discretionary actions hereunder except at the written direction of Borrower
or Agent, it being understood and agreed that Collateral Agent’s duties
hereunder shall be wholly ministerial in nature and that Collateral Agent shall
not be responsible for calculating any financial ratios or generating any
reports (other than the Monthly Statement) for the Lenders or Borrower. In
connection with any discretionary action which Borrower is permitted hereunder
to direct Collateral Agent to take, if Collateral Agent shall follow Agent’s
directions and not Borrower’s directions, it shall have no liability to
Borrower (or to any other Person) for following any such directions of Agent
and for not following such directions of Borrower (if expressly permitted
herein). Collateral Agent shall not be under any obligation or duty to perform
any act which, in Collateral Agent’s sole reasonable judgment, could involve it
in expense or liability or to institute or defend any suit in respect hereof,
or to advance any of its own monies, unless Agent or Borrower, as the case may
be, shall have offered to Collateral Agent reasonable security or indemnity
against such expense, liability, suit or advance.

 

(e)           Indemnification. 
Borrower shall indemnify and hold Collateral Agent, and its agents,
attorneys, employees and officers harmless from and against any loss, cost or
damage (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Collateral Agent in connection with the transactions
contemplated hereby, excluding any such loss, cost or damage arising as a
result of Collateral Agent’s failure to adopt and follow Accepted Practices,
gross negligence, bad faith, willful misconduct or violation of applicable law.
The indemnification set forth in this paragraph shall survive the satisfaction
and payment of the Indebtedness and the termination of this Agreement.

 

(f)            Collateral Agent’s Reliance.  Collateral Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, fax, electronic
mail message, telex or teletype message, statement, order or other document
reasonably believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel and other experts selected in good faith by Collateral Agent.
Collateral Agent may deem and treat the payee of the Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with Collateral Agent. Collateral Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of Agent as it deems appropriate or it shall first be indemnified
to its satisfaction by Agent against any and all 

 

57

 

liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. Provided
that Collateral Agent acts in accordance with Accepted Practices, Collateral
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of Agent, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
Agent and all future holders of the Note. All requests to Collateral Agent for
wire transfers of funds, for transfers between accounts established pursuant to
this Agreement or any other transfer not specifically described in this
Agreement shall be in writing.

 

(g)           Notice of Default. 
Collateral Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless Collateral Agent
has received written notice from Agent referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of
default”. Collateral Agent shall take such action with respect to such Default
or Event of Default as shall be directed by Agent, including any action under
this Agreement.

 

(h)           Non-Reliance on Collateral Agent.  Neither Collateral Agent nor any of its
officers, directors, employees, agents, attorneys, attorneys-in-fact or
Affiliates has made any representations or warranties to the Lenders and no act
by Collateral Agent hereinafter taken (including any review of the affairs of
Borrower) shall be deemed to constitute any representation or warranty by
Collateral Agent to the Lenders. Except for notices, reports and other
documents expressly required to be furnished to Agent by Collateral Agent
hereunder, Collateral Agent shall not have any duty or responsibility to
provide the Lenders with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of Borrower which may come into the possession of Collateral
Agent or any of its officers, directors, employees, agents, attorneys,
attorneys-in-fact or Affiliates.

 

(i)            Removal and Resignation.  Collateral Agent shall have the right to
resign as collateral agent hereunder and Agent shall have the right to remove
Collateral Agent as collateral agent hereunder, in each case upon thirty (30)
days’ written notice to the other parties to this Agreement. In the event of
such resignation or removal, Agent shall appoint a successor Collateral Agent,
or at Agent’s option in Agent’s sole and absolute discretion Agent may assume
and perform the rights and obligations of Collateral Agent. No such removal of
or resignation by Collateral Agent shall become effective until a successor
Collateral Agent shall have accepted such appointment (or Agent shall have
determined to designate itself as Collateral Agent) and executed an instrument
by which it shall have assumed all of the rights and obligations of Collateral
Agent hereunder. If no such successor Collateral Agent is appointed within
sixty (60) days (or, if fees payable under the Fee Letter have not been paid,
thirty (30) days) after receipt of the resigning Collateral Agent’s notice of
resignation or removal, the resigning Collateral Agent may petition a court for
the appointment of a successor Collateral Agent unless Agent elects, in its
sole and absolute discretion, to assume the rights and obligations of
Collateral Agent itself. In connection with any removal of or resignation by
Collateral Agent, (A) the removed or resigning Collateral Agent shall (1) duly
assign, transfer and deliver to the successor Collateral Agent this Agreement
and all Money and Permitted Investments held by it hereunder, (2) execute
such financing statements and other instruments as may be necessary to assign
to the successor Collateral Agent the security interest existing in favor of
the retiring Collateral Agent hereunder, 

 

58

 

and to otherwise give effect to such
succession and (3) take such other actions as may be reasonably required
by Borrower, Agent or the successor Collateral Agent in connection with the
foregoing and (B) the successor’ Collateral Agent shall establish in its
name, as agent for the Lenders, as secured party, the Collection Account and
Reserve Account as Borrower is required to maintain pursuant to the terms of
this Agreement.

 

(j)            Individual Capacity.  Collateral Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind of business
with Borrower or any Affiliate, as though Collateral Agent were not Collateral
Agent hereunder, or under the other Loan Documents.

 

Section 3.19.          Indemnity.  If Borrower makes a prepayment of the
Advances on any day which is not a Payment Date or defaults in making a
prepayment after having given a notice in accordance with Section 2.6
of prepayment of Advances, the Borrower shall indemnify the Lenders and hold
the Lenders harmless from any actual loss or expense (excluding any lost profit
or opportunity cost) which the Lenders may sustain or incur arising from (a) the
re-employment of funds obtained by the Lenders to maintain the Advances
hereunder or (b) fees payable to terminate the deposits from which such
funds were obtained, in either case, which actual loss or expense shall be
equal to an amount equal to the excess, as reasonably determined by the Lender,
of (i) its cost of obtaining funds for such Advances for the period from
the date of such payment through the following Payment Date over (ii) the
amount of interest likely to be realized by such Lender in redeploying the
funds not utilized by reason of such payment for such period. This Section 3.19
shall survive termination of this Loan Agreement and payment of the Note.

 

Section 3.20.          Inability to Determine Interest Rate; Illegality.

 

(a)           If prior to the first day of any Interest Accrual Period, (i) Lender
shall have determined (which determination shall be conclusive and binding upon
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining LIBOR for such
Interest Accrual Period, or (ii) LIBOR determined or to be determined for
such Interest Accrual Period will not adequately and fairly reflect the cost to
such Lender (as determined and certified by such Lender) of making or
maintaining Advances during such Interest Accrual Period, such Lender shall
give telecopy or telephonic notice thereof to Borrower as soon as practicable
thereafter. If such notice is given, the interest rate with respect to such
Advances for such Interest Accrual Period, and for any subsequent Interest
Accrual Periods until such notice has been withdrawn by such Lender, shall be a
per annum rate (the “Alternative Rate”) equal to a rate determined based
on an index approximating the behavior of LIBOR as reasonably determined by
such Lender.

 

(b)           Notwithstanding any other provision herein, if the
adoption of or any change in any Legal Requirement or in the interpretation or
application thereof shall make it unlawful for a Lender to effect Advances as
contemplated by the Loan Documents, (a) the commitment of such Lender
hereunder to make new Advances and to continue Advances as such shall forthwith
be canceled, and (b) the Advances then outstanding shall be converted
automatically to Alternative Rate Advances on the last day of the then current
Interest Accrual Period or within such earlier period as may be required by
law. If any such conversion of an 

 

59

 

Advance occurs on a day which is not the last
day of the then current Interest Accrual Period with respect to such Advance, Borrower
shall pay to such Lender such amounts, if any, as may be required pursuant to Section 3.19.

 

Section 3.21.          Requirements
of Law.

 

(a)           If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof by any Governmental
Authority or compliance by a Lender with any directive from any central bank or
other Governmental Authority having jurisdiction over such Lender made
subsequent to the date hereof:

 

(i)            shall subject such
Lender to any tax of any kind whatsoever with respect to the Loan Documents or
any Transaction, or change the basis of taxation of payments to such Lender in
respect thereof (except for changes in the rate of tax on such Lender’s overall
net income);

 

(ii)           shall impose,
modify or hold applicable any reserve, special deposit, compulsory loan or
similar requirement against assets held by, deposits or other liabilities in or
for the account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not otherwise
included in the determination of LIBOR hereunder; or

 

(iii)          shall impose on
such Lender any other condition;

 

and the result of any of the foregoing is to
increase the cost to such Lender, by an amount which such Lender deems to be
material, of making, continuing or maintaining Advances or to reduce any amount
receivable under the Loan Documents in respect thereof; then, in any such case,
Borrower shall promptly pay such Lender, upon its demand, any additional
amounts necessary to compensate such Lender for such increased cost or reduced
amount receivable. If such Lender becomes entitled to claim any additional
amounts pursuant to this Section 3.21(a), it shall promptly notify
Borrower of the event by reason of which it has become so entitled. As a
condition to Borrower’s liability under this paragraph, such Lender shall
promptly deliver to Borrower a certificate as to the calculation of any
additional amounts payable pursuant to this subsection and including any
available supporting documentation, which certificate shall be conclusive and
binding upon Borrower in the absence of manifest error. This covenant shall
survive the termination of the Agreement and payment of the Note.

 

(b)           If a Lender shall have determined that the adoption of or
any change in any Legal Requirement regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any directive regarding capital
adequacy from any Governmental Authority made subsequent to the date hereof
does or shall have the effect of reducing the rate of return on such Lender’s
or such corporation’s capital as a consequence of its obligations hereunder to
a level below that which such Lender or such corporation could have achieved
but for such adoption, change or compliance by an amount which is deemed by
such Lender to be material, then from time to time, after submission by such
Lender to Borrower of a written request therefore, Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for
such 

 

60

 

reduction. As a condition to Borrower’s
liability under this paragraph, such Lender shall promptly deliver to Borrower
a certificate as to the calculation of any additional amounts payable pursuant
to this subsection and including any available supporting documentation, which
certificate shall be conclusive and binding upon Borrower in the absence of
manifest error. This covenant shall survive the termination of the Agreement
and payment of the Note.

 

Section 3.22.          Extension
Option.

 

(a)                                  Borrower
shall have the option (an “Extension Option”), to extend the Maturity
Date of the Note from March 31, 2009 (the “Original Maturity Date”),
to September 30, 2009 (the “Extended Maturity Date”), upon
satisfaction of each of the following conditions (the “Extension Conditions”):

 

(i)            Borrower shall have
given written notice (an “Extension Notice”) to Agent and Collateral
Agent not less than thirty (30) days prior to the Original Maturity Date of its
election to exercise the Extension Option;

 

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

 

(iii)          the outstanding
Principal Indebtedness shall have been amortized during the initial term of the
Loan by the Mandatory Initial Term Amortization Amount; and

 

(iv)          Borrower shall have paid
to Agent a fee (an “Extension Fee”) equal to $250,000 (the product of
0.25% and the Loan Amount).

 

(b)           Borrower may revoke any Extension
Notice by written notice (or telephonic notice promptly confirmed in writing)
to Agent and to the Collateral Agent on or prior to the tenth (10th) Business
Day prior to the Original Maturity Date; provided, however, that
Borrower shall pay the reasonable out-of-pocket costs incurred by Agent and
Collateral Agent in connection with the giving of any Extension Notice and its
revocation.  If the term of the Loan is
extended pursuant to the provisions of this Section 3.22, then all
the other terms and conditions of the Loan Documents shall remain in full force
and effect and unmodified.

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

 

Section 4.1.            Representations and Warranties as
to Borrower.  Borrower represents and
warrants that, as of the Closing Date and as of each Advance Closing Date:

 

(a)           Organization. 
Each Borrower, General Partner and 4200 Holdings (i) is a duly and
solely organized and validly existing limited liability company, or as the case
may be, a limited partnership, in good standing under the laws of the State of
Delaware, (ii) has the requisite power and authority to own its properties
(including, without limitation, the Property) and to carry on its business as
now being conducted and is qualified to do business in the 

 

61

 

jurisdiction in which the Property is
located, and (iii) has the requisite power to execute and deliver, and
perform its obligations under, this Agreement, the Note and all of the other
Loan Documents to which it is a party.

 

(b)           Authorization; No Conflict; Consents and Approvals.  The execution and delivery by Borrower of
this Agreement, the Note and each of the other Loan Documents, Borrower’s
performance of its obligations hereunder and thereunder and the creation of the
security interests and liens provided for in this Agreement and the other Loan
Documents to which it is a party (i) have been duly authorized by all
requisite action on the part of Borrower, General Partner and 4200 Holdings, as
applicable, (ii) will not violate any provision of any Legal Requirements,
any order of any court or other Governmental Authority, the Organizational
Agreement or any indenture or agreement or other instrument to which Borrower,
General Partner or 4200 Holdings is a party or by which Borrower, General
Partner or 4200 Holdings is bound, and (iii) will not be in conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under, or result in the creation or imposition of any Lien of any nature
whatsoever upon the Property pursuant to, any such indenture or agreement or
material instrument other than the Loan Documents. Other than those obtained or
filed on or prior to the Closing Date, neither Borrower, General Partner nor
4200 Holdings are required to obtain any consent, approval or authorization
from, or to file declaration or statement with, any Governmental Authority or
other agency in connection with or as a condition to the execution, delivery or
performance of this Agreement, the Note or the other Loan Documents executed
and delivered by Borrower or 4200 Holdings.

 

(c)           Enforceability. 
This Agreement, the Note and each other Loan Document executed by
Borrower or 4200 Holdings in connection with the Loan (including, without
limitation, any Collateral Security Instrument), is the legal, valid and
binding obligation of Borrower, General Partner and 4200 Holdings, as
applicable, enforceable against Borrower, General Partner and 4200 Holdings, as
the case may be, in accordance with its terms, subject to bankruptcy,
insolvency, and other limitations on creditors’ rights generally and to
equitable principles. This Agreement, the Note and such other Loan Documents
are not subject to any right of rescission, set-off, counterclaim or defense by
Borrower, General Partner or 4200 Holdings (including the defense of usury),
and none of Borrower, General Partner or 4200 Holdings have asserted any right
of rescission, set-off, counterclaim or defense with respect thereto.

 

(d)           Litigation. 
There are no actions, suits or proceedings at law or in equity by or
before any Governmental Authority or other agency now pending and served or, to
the best knowledge of Borrower and General Partner, threatened in writing
against Borrower, General Partner, 4200 Holdings or any Collateral, which
actions, suits or proceedings, if determined against Borrower, General Partner,
4200 Holdings or such Collateral, are reasonably likely to result in a Material
Adverse Effect.

 

(e)           Agreements. 
Borrower is not in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement
or instrument to which it is a party or by which Borrower or any Collateral is
bound which is reasonably likely to have a Material Adverse Effect. Borrower is
not a party to any agreement or instrument or subject to any restriction that
is reasonably likely to have a Material Adverse Effect.

 

62

 

(f)            No Bankruptcy Filing.  Neither Borrower, General Partner nor 4200
Holdings are contemplating either the filing of a petition by it under any
state or federal bankruptcy or insolvency laws or the liquidation of all or a
major portion of its assets or property. Neither Borrower, General Partner nor
4200 Holdings have received written notice that any Person is contemplating the
filing of any such petition against it.

 

(g)           Solvency. 
Giving effect to the transactions contemplated hereby, 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 debts and liabilities (including, without limitation, contingent
liabilities and other commitments) beyond its ability to pay such debts as they
mature (taking into account the timing and amounts to be payable on or in
respect of obligations of Borrower).

 

(h)           Other Debt. 
Borrower has not borrowed or received other debt financing whether
unsecured or secured by the Property or any part thereof.

 

(i)            Full and Accurate Disclosure.  No statement of fact made by or on behalf of
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of material fact or omits to state any material fact necessary
to make statements contained herein or therein not misleading. To the best
knowledge of Borrower, there is no fact that has not been disclosed to Agent
that is likely to result in a Material Adverse Effect.

 

(j)            Financial Information.  All financial statements and other data
concerning Borrower and the Property that has been delivered by or on behalf of
Borrower to Agent is true, complete and correct in all material respects and
has been prepared in accordance with GAAP. Since the delivery of such data,
except as otherwise disclosed in writing to Agent, there has been no change in
the financial position of Borrower or the Property, or in the results of
operations of Borrower, which change results or is reasonably likely to result
in a Material Adverse Effect. Borrower has not incurred any obligation or
liability, contingent or otherwise, not reflected in such financial data, which
is likely to have a Material Adverse Effect upon its business operations or the
Property.

 

(k)           Investment Company Act.  Borrower is not (i) an “investment
company” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended or (ii) subject
to any other federal or state law or regulation which purports to restrict or
regulate its ability to borrow money in accordance with this Agreement.

 

(l)            Compliance. 
Borrower is in compliance with all applicable Legal Requirements, except
for noncompliance that is not reasonably likely to have a Material Adverse
Effect. Borrower is not in default or violation of any order, writ, injunction,
decree or demand of 

 

63

 

any Governmental Authority except for
defaults or violations which are not reasonably likely to have a Material
Adverse Effect.

 

(m)          Use of Proceeds; Margin Regulations.  Borrower will use the proceeds of the Loan
for the purposes described in Section 2.2. 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.

 

(n)           Single-Purpose
Entity.

 

(i)            Borrower at all
times since its formation has been a duly formed and existing limited liability
company, or, as the case may be, limited partnership under the laws of the
State of its formation and a Single-Purpose Entity.

 

(ii)           Borrower at all
times since its formation has complied with the provisions of its
Organizational Agreement since such agreement was executed and delivered and
the laws of the State of Delaware relating to limited liability companies or,
as the case may be, limited partnerships.

 

(iii)          All customary
formalities regarding the limited liability company, or, as the case may be,
limited partnership existence of Borrower have been observed at all times since
the Organizational Agreement was executed and delivered.

 

(iv)          Borrower has at all
times since it began maintaining such items accurately maintained its financial
statements, accounting records and other limited liability company, or as the
case may be, a limited partnership documents separate from those of its
members, Affiliates of its members and any other Person. Borrower has not at
any time since its formation commingled its assets with those of its members,
any Affiliates of its members, or any other Person. Borrower has at all times
since establishing its own bank accounts accurately maintained its own bank
accounts and separate books of account.

 

(v)           Borrower has at all
times since receiving funds paid its own liabilities from its own separate
assets.

 

(vi)          Borrower has at all
times since its formation identified itself in all dealings with the public,
under its own name and as a separate and distinct entity. Borrower has not at
any time since its formation identified itself as being a division or a part of
any other entity. Borrower has not at any time since its formation identified
its members or any Affiliates of its members as being a division or part of
Borrower.

 

(vii)         Borrower is as of
the date hereof adequately capitalized in light of the nature of its business.

 

64

 

(viii)        Borrower has not at
any time since its formation assumed or guaranteed the liabilities of its
members (or any predecessor corporation, partnership or limited liability
company), any Affiliates of its members, or any other Persons, except for
liabilities relating to the Collateral. Borrower has not at any time since its
formation acquired obligations or securities of its members (or any predecessor
corporation, partnership or limited liability company), or any Affiliates of
its members or any other Person. Borrower has not at any time since its
formation pledged its assets for the benefit of any other entity (other than
the Agent) or made loans or advances to its members (or any predecessor
corporation, partnership or limited liability company), or any Affiliates of
its members or any other Person.

 

(ix)           Borrower has not at
any time since its formation entered into and was not a party to any
transaction with its members (or any predecessor corporation, partnership or
limited liability company) or any Affiliates of its members, except for 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 (other than in connection with the execution by
Borrower and Manager of the Management Agreement).

 

(o)           No Defaults. 
No Default or Event of Default exists under or with respect to any Loan
Document.

 

(p)           Plans and Welfare Plans.  The assets of Borrower are not treated as “plan
assets” under regulations currently promulgated under ERISA. Each Plan, and, to
the best 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 federal or state law, 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 Section 5.1(v)(i). 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. No event has occurred, and there exists no condition or set of
circumstances, in connection with any Plan or Welfare Plan under which Borrower
or, to the best knowledge of Borrower, any ERISA Affiliate, directly or
indirectly (through an indemnification agreement or otherwise), is reasonably
likely to 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, or, to the best knowledge of Borrower, any ERISA
Affiliate beyond his or her retirement or other termination of service other
than (i) coverage mandated by applicable law, (ii) death or
disability benefits that have been fully provided for by fully paid up
insurance or (iii) severance benefits.

 

(q)           Additional Borrower UCC Information.  Borrowers’ organizational identification
numbers are as identified in Schedule V attached hereto and the full
legal name of Borrower is as set forth on the signature pages hereof and,
except as otherwise disclosed on Schedule VI attached hereto, Borrower
has not done in the last five (5) years, and does not do, business under
any other name (including any trade-name or fictitious business name).

 

65

 

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

 

(s)           Labor Matters. 
Borrower is not a party to any collective bargaining agreements.

 

(t)            Pre-Closing Date Activities.  Borrower has not conducted any business or
other activity on or prior to the Closing Date, other than in connection with
the acquisition, management and ownership of the Property.

 

(u)           No Bankruptcies or Criminal Proceedings Involving
Borrower or Related Parties.  No
bankruptcy, insolvency, reorganization or comparable proceedings have ever been
instituted by or against Borrower, any Affiliate of Borrower, any Guarantor or
any individual or entity owning, with his, her or its family members, 20% or
more of the direct, or indirect beneficial ownership interests in Borrower
(each such Guarantor, individual, or entity being herein referred to as a “Principal”),
and no such proceeding is now pending or contemplated. None of Borrower, any
Principal, or to Borrower’s knowledge, any other individual or entity directly
or indirectly owning or controlling, or the family members of which own or
control, any direct or indirect beneficial ownership interest in Borrower or in
the Manager or asset manager for the Property, have been charged, indicted or
convicted, or are currently under the threat of charge, indictment or
conviction, for any felony or crime punishable by imprisonment.

 

(v)           No Prohibited Persons.  Neither Borrower or Guarantor nor any of
their respective officers, directors, shareholders, partners, members or
Affiliates, if applicable (including, without limitation, the indirect holders
of equity interests in Borrower) is or will be an entity or person:  (i) that is listed in the Annex to, or
is otherwise subject to the provisions of Executive Order 13224 issued on September 24,
2001 (“EO13224”); (ii) whose name appears on the United States
Treasury Department’s Office of Foreign Assets Control (“OFAC”) most
current list of “Specifically Designated National and Blocked Persons” (which
list may be published from time to time in various mediums including, but not
limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); (iii) who
commits, threatens to commit or supports “terrorism”, as that term is defined
in EO13224; or (iv) who is otherwise affiliated with any entity or person
listed above (any and all parties or persons described in clauses (i) through
(iv) above are herein referred to as a “Prohibited Person”).  Borrower, Guarantor and their respective
Affiliates are in full compliance with all applicable orders, rules,
regulations and recommendations of The Office of Foreign Assets Control of the
U.S. Department of the Treasury.

 

(w)          Embargoed Person.  As of the date hereof and at all times
throughout the term of the Loan, including after giving effect to any Transfers
permitted pursuant to the Loan Agreement, (a) none of the funds or other
assets of Borrower and Guarantor constitute property of, or are beneficially
owned, directly or indirectly, by any person, entity or government subject to
trade restrictions under U.S. law, including but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders
or regulations promulgated thereunder with the result that the investment in
Borrower or Guarantor, as applicable (whether directly or indirectly), is
prohibited by law or the Loan made by Agent is in violation of law (“Embargoed
Person”); 

 

66

 

(b) no Embargoed Person has any interest of
any nature whatsoever in Borrower or Guarantor, as applicable, with the result
that the investment in Borrower or Guarantor, as applicable (whether directly
or indirectly), is prohibited by law or the Loan is in violation of law; and (c) none
of the funds of Borrower or Guarantor, as applicable, have been derived from
any unlawful activity with the result that the investment in Borrower or
Guarantor, as applicable (whether directly or indirectly), is prohibited by law
or the Loan is in violation of law.

 

Section 4.2.            Representations and Warranties as
to Each Property.  Borrower hereby
represents and warrants to the Agent that, as to all Property, as of each
Advance Closing Date, except as otherwise disclosed to Agent on Schedule VI
hereto:

 

(a)           Title to the Property.  Borrower owns good, marketable and insurable
fee simple title to the applicable Land, free and clear of all Liens, other
than the Permitted Encumbrances applicable to the Land. Borrower owns the other
Property free and clear of any and all Liens, other than Permitted
Encumbrances. There are no outstanding options to purchase or rights of first
refusal or restrictions on transferability affecting such Property.

 

(b)           Utilities and Public Access.  To the best of Borrower’s knowledge, the
Property has adequate rights of access to public ways and is served by water,
electric, sewer, sanitary sewer and storm drain facilities. 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
premises, and all such utilities are connected so as to serve the Property
without passing over other property except for land or easement areas of or
available to the utility company providing such utility service. 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.

 

(c)           Condemnation. 
No Taking has been commenced nor has Borrower received written notice of
a Taking, with respect to all or any portion of the Property or for the
relocation of roadways providing access to the Property.

 

(d)           Compliance. 
The Property is in compliance with all applicable Legal Requirements
(including, without limitation, building and zoning ordinances and codes) and
all applicable Insurance Requirements, except for noncompliance which is not
reasonably likely to have a Material Adverse Effect.

 

(e)           Environmental Compliance.  Except for matters set forth in the
Environmental Reports delivered to Agent in connection with the Loan (true,
correct and complete copies of which have been provided to Agent by Borrower):

 

(i)            Borrower is in full
compliance with all applicable Environmental Laws with respect to the Property
(which compliance includes, but is not limited to, the possession by Borrower
or the Manager of all environmental, health and safety permits, licenses and
other governmental authorizations required in connection with the ownership and
operation of the Property under all Environmental Laws), except for
noncompliance which is not reasonably likely to have a Material Adverse Effect.

 

67

 

(ii)           There is no
Environmental Claim pending or, to the actual knowledge of Borrower,
threatened, and no penalties arising under Environmental Laws have been
assessed, against Borrower or the Manager with respect to the Property or, to
the actual knowledge of Borrower, against any Person with respect to the
Property whose liability for any Environmental Claim Borrower or the Manager
has or may have retained or assumed either contractually or by operation of
law, and no investigation or review is pending or, to the actual knowledge of
Borrower, threatened by any Governmental Authority, citizens group, employee or
other Person with respect to any alleged failure by Borrower or the Manager or
the Property to have any environmental, health or safety permit, license or
other authorization required under, or to otherwise comply with, any
Environmental Law or with respect to any alleged liability of Borrower or the
Manager for any Use or Release of any Hazardous Substances.

 

(iii)          There are no
present and, to the actual knowledge of the Borrower, there have been no past
Releases of any Hazardous Substance at, on, in, under or from the Property that
are reasonably likely to form the basis of any Environmental Claim against
Borrower, the Manager or against any Person whose liability for any
Environmental Claim Borrower or the Manager has or may have retained or assumed
either contractually or by operation of law.

 

(iv)          Without limiting the
generality of the foregoing, there is not present at, on, in or under the
Property, PCB-containing equipment, asbestos or asbestos containing materials,
underground storage tanks or surface impoundments for Hazardous Substances,
lead in drinking water (except in concentrations that comply with all
Environmental Laws), or lead based paint, the presence of which is reasonably
likely to result in a Material Adverse Effect.

 

(v)           No liens are
presently recorded with the appropriate land records under or pursuant to any
Environmental Law with respect to the Property and no Governmental Authority
has been taking or, to the actual knowledge of Borrower, is in the process of
taking any action that could subject the Property to Liens under any
Environmental Law.

 

(vi)          There have been no
environmental investigations, studies, audits, reviews or other analyses
conducted by or that are in the possession of Borrower in relation to the
Property which have not been made available to the Agent.

 

(f)            Mortgage and Other Liens.  Upon filing, each Mortgage creates a valid
and enforceable first priority Lien on the Property described therein, as
security for the repayment of the Indebtedness, subject only to the Permitted
Encumbrances applicable to the Property. This Agreement creates a valid and
enforceable first priority Lien on all Account Collateral. Each Collateral
Security Instrument establishes and creates a valid, subsisting and enforceable
Lien on and a security interest in, or claim to, the rights and property
described therein. All property covered by any Collateral Security Instrument
in which a security interest can be perfected by the filing of a financing statement
is subject to a UCC financing statement filed and/or recorded, as appropriate
(or irrevocably delivered to an agent for such recordation or filing) in all
places necessary to perfect a valid first priority Lien with respect to the
rights and 

 

68

 

property that are the subject of such
Collateral Security Instrument to the extent governed by the UCC.

 

(g)           Assessments. 
There are no pending or, to the actual knowledge of Borrower, 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.

 

(h)           No Joint Assessment; Separate Lots.  Borrower has not suffered, permitted or
initiated the joint assessment of the Property (i) with any other real
property constituting a separate tax lot, 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 as a
single lien. The Property is comprised of one or more parcels, each of which
constitutes a separate tax lot and none of which constitutes a portion of any
other tax lot.

 

(i)            No Prior Assignment.  The Agent is the collateral assignee of
Borrower’s interest under the Leases. There are no prior assignments of the
Leases or any portion of the Rent due and payable or to become due and payable
which are presently outstanding.

 

(j)            Permits; Certificate of Occupancy.  Borrower has obtained all Permits necessary
to the use and operation of the Property except where the failure to obtain
such Permits is not reasonably likely to have a Material Adverse Effect. The
use being made of the Property is in conformity with the certificate of
occupancy and/or such Permits for the Property and any other restrictions,
covenants or conditions affecting the Property, except for non-conformity which
is not reasonably likely to result in a Material Adverse Effect.

 

(k)           Flood Zone. 
Except as shown on the Survey, the Property described therein is not
located in a flood hazard area as defined by the Federal Insurance
Administration.

 

(l)            Physical Condition.  Except as set forth in the Engineering
Report, to the best knowledge of Borrower, the Property is free of structural
defects and all building systems contained therein are in good working order
subject to ordinary wear and tear.

 

(m)          Security Deposits. 
Borrower and the Manager are in compliance with all Legal Requirements
relating to all security deposits with respect to the Property, except where
the failure to comply is not reasonably likely to result in a Material Adverse
Effect.

 

(n)           Intellectual Property.  All material Intellectual Property that
Borrower owns or has pending, or under which it is licensed, are in good
standing and uncontested. There is no right under any Intellectual Property
necessary to the business of Borrower as presently conducted or as Borrower
contemplates conducting its business. Borrower has not infringed, is not
infringing, and has not received notice of infringement with respect to
asserted Trademarks of others. There is no infringement by others of material
Intellectual Property of Borrower.

 

(o)           No Encroachments. 
Except as shown on the Survey, to the best knowledge of Borrower, (i) all
of the Improvements which were included in determining the 

 

69

 

appraised value of the Property lie wholly
within the boundaries and building restriction lines of the Property, (ii) no
improvements on adjoining properties encroach upon the Property, (iii) no
easements or other encumbrances upon the Property encroach upon any of the
Improvements, so as to materially and adversely affect the value or
marketability of the Property and (iv) all of the Improvements comply with
all material requirements of any applicable zoning and subdivision laws and
ordinances.

 

(p)           Management Agreement.  The Management Agreement is in full force and
effect. There is no default, breach or violation existing thereunder by
Borrower or, to the best knowledge of Borrower, any other party thereto and no
event (other than payments due but not yet delinquent) which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a default, breach or violation by Borrower or, to the best knowledge
of Borrower, any other party thereunder or entitle Borrower or, to the best
knowledge of Borrower, any other party thereto to terminate any such agreement.

 

(q)           Leases.  The
Property is not subject to any Leases other than the Leases described in the
rent roll or the Engineering Report delivered to Agent in connection with the
making of the Loan. No person has any possessory interest in the Property or
right to occupy the same except under and pursuant to the provisions of the
Leases. The current Leases are in full force and effect and there are no
defaults thereunder by either party and no conditions which with the passage of
time and/or notice would constitute defaults thereunder, except for such
defaults as are not reasonably likely to result in a Material Adverse Effect.

 

(r)            Credit Lease.  With respect to each CTL Property only:

 

(1)           Such CTL Property is
subject to a Credit Lease; such Credit Lease is in full force and effect, and
is a legal, valid, binding and enforceable agreement of the related tenant,
except as such enforcement may be limited by bankruptcy, insolvency or other
laws affecting the rights of creditors generally, and general principles of
equity; no uncured default by the Property-Owning Borrower or the tenant has
occurred under such Credit Lease and there is no existing condition which, but
for the passage of time or the giving of notice, or both, would result in a
default under the terms of such Credit Lease.

 

(2)           Other than with
respect to each CTL Property owned by a Property-Owning Borrower on the Closing
Date, each Credit Lease is subordinate to the related Mortgage, either pursuant
to the terms and conditions of such Credit Lease or pursuant to the terms and
conditions of a subordination, non-disturbance and attornment agreement between
the Agent and the applicable tenant; any subleases entered into by such tenant
will be subject and subordinate to the Credit Lease and will not relieve the
tenant of its obligations under the Credit Lease; in the event that the Agent
acquires title to a CTL Property by foreclosure or otherwise, the lessor’s
interest under the related Credit Lease is freely assignable by the Agent and
its successors and assigns to any person without the consent of the tenant,
and, in the event the lessor’s interest is so assigned, the tenant will be
obligated to recognize the assignee as lessor under such Credit Lease.

 

70

 

(3)           Each Credit Lease
has an original term ending on or after the date the Property-Owning Borrower
is required to deposit its final payment on the related Advance with the
Lenders unless covered by extended amortization or residual value insurance.

 

(4)           The monthly payment
for the related Advance is less than or equal to the basic rent due under the
related Credit Lease (unless an “Extended Amortization Policy” or a residual
value insurance policy or cash reserves or other form of credit enhancement has
been obtained which has been in each case disclosed to Agent).

 

(5)           There is no
assignment of any Credit Lease by any tenant pending.

 

(6)           Each tenant has
agreed to notify the related mortgagee of any default under the related Credit
Lease and to provide such mortgagee with additional time and opportunity to
cure.

 

(7)           Except as otherwise
disclosed to Agent with respect to tenants which are master lessor to
subtenants, each CTL Property is not subject to any lease other than the
related Credit Lease, no person has any possessory interest in, or right to
occupy, the related CTL Property except under and pursuant to such Credit Lease
and the tenant under the related Credit Lease is in occupancy of the entire
Property.

 

(8)           No tenant under a
Credit Lease (nor Lease Guarantor, if applicable) has been released, in whole
or in part, from its obligations under the Credit Lease (or Lease Guaranty, as
applicable).

 

(9)           Under the terms of
the Credit Lease, the tenant is not permitted to assign or sublet its interest
or obligations under the Credit Lease unless such tenant remains fully liable
thereunder.

 

(10)         Each tenant under a
Credit Lease is required (or has been irrevocably directed) to make all rental
payments directly to the Collection Account or a lockbox established by the
Property-Owning Borrower which provides for automatic sweep of deposits to the
Collection Account.

 

(11)         With respect to any
Credit Lease guaranteed by the parent or affiliate of a tenant, each existing
Lease Guaranty is in full force and effect, and no default exists thereunder.

 

(12)         With respect to any
Credit Lease that is not a Triple Net Lease or Double Net Lease, such Credit
Lease is a bondable lease with no termination or rent abatement rights by the
tenant, except in connection with the exercise of a purchase option; the
obligations of any tenant under such lease (including, but not limited to, the
obligation of the tenant to pay fixed and additional rent), are not affected by
reason of any damage to or destruction of any portion of the CTL Property, any
taking of the CTL Property or any part thereof by condemnation or otherwise, or
any prohibition, limitation, 

 

71

 

interruption,
restriction, or interference of the tenant’s use, occupancy or enjoyment of the
CTL Property.

 

(13)         Each Credit Lease
contains no monetary obligations or obligations associated with managing,
owning, developing and operating the CTL Property (including, but not limited
to, the costs associated with utilities, taxes, insurance, capital and
structural improvements and maintenance and repairs), on the part of the
Property-Owning Borrower unless such obligations are fully reimbursable or have
been paid by the tenant.

 

(14)         Each Credit Lease
contains customary and enforceable provisions which render the rights and
remedies of the lessor thereunder adequate for the enforcement and satisfaction
of the lessor’s rights thereunder.

 

(15)         Any anticipated
maintenance, repair, or replacement obligations imposed by any easement or
reciprocal easement agreement either is a direct obligation of the tenant or an
adjacent property owner or is an obligation or liability of the Property-Owning
Borrower, reimbursable by the tenant, or has been reserved for under the Loan
Documents.

 

(16)         The Credit Lease
cannot be modified without the consent of the mortgagee thereunder.

 

(17)         Except for (a) a
termination due to a default by the Property-Owning Borrower under the Credit
Lease or (b) a termination due to casualty or condemnation, no tenant can
terminate a Credit Lease for any reason prior to the payment in full of or the
payment of funds sufficient to pay in full (1) the principal balance of
the related Advance, (2) all accrued and unpaid interest on the related
Advance and (3) any other sums due and payable under the related Advance,
as of the termination date.

 

(18)         No right or claim of
rescission, offset, abatement, diminution, defense or counterclaim to a Credit
Lease has been asserted with respect thereto, nor is there any existing
condition which, but for the passage of time or giving of notice, would result
in a right or claim of rescission, offset, abatement, diminution, defense or
counterclaim under the terms of any Credit Lease (other than for nonmaterial
punch list items).

 

(19)         The obligations of
the tenant under any Credit Lease (including, but not limited to, the
obligations of the tenant to pay fixed and additional rent), are not affected
by reason of any damage to or destruction of any portion of the leased property
or any taking of the leased property or any part thereof by condemnation or
otherwise, except for CTL Properties subject to casualty and condemnation lease
enhancement policies or which permit termination of rent only pursuant to
exercise of a funding option sufficient to pay the Advance in full.

 

(20)         In the case of a
Credit Lease with a “lease enhancement policy” and/or an “extended amortization
policy” and/or residual value insurance policy, the 

 

72

 

entire premium
has been paid in full for each such policy (or is required to be paid within
thirty days after the related closing date), such policies are each in full
force and effect, and the legal, valid and binding obligation of the insurer
thereunder, enforceable in accordance with their respective terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law).

 

(s)           Ground Lease.  Other than the Ground Lease, the Property
does not consist of a leasehold estate in whole or in part. With respect to the
Ground Lease:

 

(i)            The Ground Lease or
a memorandum thereof, including all amendments and modifications thereto, or a
separate agreement signed by the applicable lessor has been duly recorded and
by its terms permits the interest of the Borrower thereunder to be encumbered
by the applicable Mortgage and there has been no change in the terms of the
Ground Lease since its recordation.

 

(ii)           The Ground Lease is
not subject to any Liens or encumbrances other than the Mortgage, subject to
the Permitted Encumbrances, and the Ground Lease is prior to all Liens, charges
and encumbrances on the fee interest of the lessor thereunder.

 

(iii)          The Ground Lease is
valid and subsisting and is in full force and effect in accordance with its
terms and no uncured default has occurred under the Ground Lease.

 

(iv)          The Mortgage
encumbering the Ground Lease conforms and complies with the Ground Lease, does
not constitute a violation or default under the Ground Lease, and is and shall
at all times constitute a valid Lien (subject only to Permitted Encumbrances)
on the Borrower’s entire estate under the Ground Lease.

 

(v)           All Ground Rent due
and payable through and including the Advance Closing Date therefor has been
paid.

 

(vi)          All terms, conditions,
and agreements contained in the Ground Lease have been performed to the extent
they apply to periods through and including the Advance Closing Date therefor.

 

(vii)         The Ground Lease
grants any leasehold mortgagee standard protections necessary to protect the
security of a leasehold mortgagee (including the right of the leasehold
mortgagee to receive notice of lessee’s default under the Ground Lease, the
right of the leasehold mortgagee, with adequate time, to cure such default and,
in the case of incurable defaults of lessee, the right of the leasehold
mortgagee to enter into a new Ground Lease with lessor on the same terms as the
existing Ground Lease).

 

(viii)        The Ground Lease has
a term (inclusive of any exercised renewal or extension periods) which extends
not less than twenty (20) years beyond the Maturity Date.

 

73

 

(ix)           The Ground Lease requires the lessor
to enter into a New Ground Lease upon the termination of the Ground Lease for
any reason, including the rejection of a Ground Lease in bankruptcy.

 

Section 4.3.            Survival of Representations.  Borrower agrees that (i) all of the
representations and warranties of Borrower set forth in Section 4.1
and 4.2 and in the other Loan Documents delivered on the Closing Date
are made as of the Closing Date, and (ii) all representations and
warranties made by Borrower shall survive the delivery of the Note and making
of the Loan and continue for so long as any amount remains owing to the Lenders
under this Agreement, the Note or any of the other Loan Documents; provided,
however, that the representations set forth in Section 4.2(e) shall
survive in perpetuity. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents shall be
deemed to have been relied upon by the Lenders and Collateral Agent
notwithstanding any investigation heretofore or hereafter made by the Lenders
and Collateral Agent or on their behalf.

 

ARTICLE V.

AFFIRMATIVE COVENANTS

 

Section 5.1.            Affirmative Covenants.  Borrower covenants and agrees that, from the
date hereof and until payment in full of the Indebtedness:

 

(a)           Existence;
Compliance with Legal Requirements; Insurance.  Borrower shall do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
existence as a limited liability company, or as the case may be, limited
partnership, rights, licenses, Permits and franchises necessary for the conduct
of its business and comply with all Legal Requirements and Insurance
Requirements applicable to it and the Property, except for such non-compliance
which is not reasonably likely to result in a Material Adverse Effect. Borrower
shall at all times maintain, preserve and protect all franchises and trade
names and preserve all the remainder of its property necessary for the
continued conduct of its business and keep the Property in good repair, working
order and condition, except for reasonable wear and use (and except for
casualty losses as to which other provisions hereof shall govern), and from
time to time make, or cause to be made, all reasonably necessary repairs,
renewals, replacements, betterments and improvements thereto. Borrower shall or
shall cause its tenants to keep the Property insured at all times, by
financially sound and reputable insurers, to such extent and against such
risks, and maintain liability and such other insurance, as more fully provided
in this Agreement, and otherwise perform and comply with all obligations of
Borrower under the Mortgages.

 

(b)           Basic
Carrying Costs and Other Claims. 
Borrower shall pay and discharge all Impositions, as well as all lawful
claims for labor, materials and supplies or otherwise when due and payable all
as more fully provided in, and subject to any rights to contest contained in,
the Mortgage. Borrower shall pay all Basic Carrying Costs with respect to
Borrower and the Property in accordance with the provisions of the Mortgage and
this Agreement, subject, however, to Borrower’s rights to contest payment of
Impositions in accordance with the Mortgage. Borrower’s obligation to pay Basic
Carrying Costs pursuant to this Agreement shall include, to the extent
permitted by applicable law, Impositions resulting from future changes in 

 

74

 

law
which impose upon a Lender an obligation to pay any property taxes on the
Property or other Impositions. Borrower shall (x) pay its trade payables
within forty-five (45) days from the date such trade payables are incurred and (y) not
permit its trade payables to exceed 2% of the Principal Indebtedness.

 

(c)           Litigation.  Borrower shall give prompt written notice to
Agent of any litigation or governmental proceedings pending or threatened (in
writing) against Borrower, or the Property which is reasonably likely to have a
Material Adverse Effect.

 

(d)           Environmental
Remediation.

 

(i)           If any investigation, site
monitoring, cleanup, removal, restoration or other remedial work of any kind or
nature is required pursuant to an order or directive of any Governmental
Authority or under any applicable Environmental Law, because of or in
connection with the current or future presence, suspected presence, Release or
suspected Release of a Hazardous Substance on, under or from the Property or
any portion thereof (collectively, the “Remedial Work”), Borrower shall
promptly commence and diligently prosecute to completion all such Remedial
Work, and shall conduct such Remedial Work in accordance with applicable
Environmental Laws. In all events, such Remedial Work shall be commenced within
such period of time as required under any applicable Environmental Law; provided,
however, that Borrower shall not be required to commence such Remedial
Work within the above specified time periods: 
(x) if prevented from doing so by any Governmental Authority, (y) if
commencing such Remedial Work within such time periods would result in Borrower
or such Remedial Work violating any Environmental Law or (z) if Borrower,
at its expense and after prior notice to Agent, is contesting by appropriate
legal, administrative or other proceedings conducted in good faith and with due
diligence the need to perform Remedial Work, as long as (1) Borrower is
permitted by the applicable Environmental Laws to delay performance of the
Remedial Work pending such proceedings, (2) neither the Property nor any
part thereof or interest therein shall be sold, forfeited or lost if Borrower
does not perform the Remedial Work being contested, and Borrower would have the
opportunity to do so, in the event of Borrower’s failure to prevail in the
contest, (3) the Lenders would not, by virtue of such permitted contest,
be exposed to any risk of any civil liability for which Borrower has not
furnished additional security as provided in clause (4) below,
or to any risk of criminal liability, and neither the Property nor any interest
therein would be subject to the imposition of any lien for which Borrower has
not furnished additional security as provided in clause (4) below,
as a result of the failure to perform such Remedial Work and (4) Borrower
shall have furnished to the Agent additional security in respect of the Remedial
Work being contested and the loss or damage that may result from Borrower’s
failure to prevail in such contest in such amount as may be reasonably
requested by the Agent.

 

(ii)          If requested by the Agent, all
Remedial Work under clause (A) above shall be performed by
contractors, and under the supervision of a consulting Engineer, each approved
in advance by the Agent which approval shall not be unreasonably withheld or
delayed. Borrower shall pay all costs and expenses reasonably incurred in connection
with such Remedial Work. If Borrower does not timely commence 

 

75

 

and diligently prosecute to
completion the Remedial Work, the Agent may (but shall not be obligated to),
upon 30 days prior written notice to Borrower of its intention to do so, cause
such Remedial Work to be performed. Borrower shall pay or reimburse the Agent
on demand for all expenses (including reasonable attorneys’ fees and
disbursements, but excluding internal overhead, administrative and similar
costs of the Lenders) reasonably relating to or incurred by the Agent in
connection with monitoring, reviewing or performing any Remedial Work in
accordance herewith.

 

(iii)         Borrower shall not commence any
Remedial Work under clause (A) above, nor enter into any
settlement agreement, consent decree or other compromise relating to any
Hazardous Substances or Environmental Laws without providing notice to the
Agent as provided in Section 5.1(f). Notwithstanding the foregoing,
if the presence or threatened presence of Hazardous Substances on, under, about
or emanating from the Property poses an immediate threat to the health, safety
or welfare of any Person or the environment, or is of such a nature that an
immediate response is necessary or required under applicable Environmental Law,
Borrower may complete all necessary Remedial Work. In such events, Borrower
shall notify Agent as soon as practicable and, in any event, within three
Business Days, of any action taken.

 

(e)           Environmental
Matters; Inspection.

 

(i)           Borrower shall not permit a Hazardous
Substance to be present on, under or to emanate from the Property, or migrate
from adjoining property controlled by Borrower onto or into the Property,
except under conditions permitted by applicable Environmental Laws and, in the
event that such Hazardous Substances are present on, under or emanate from the
Property, or migrate onto or into the Property, Borrower shall cause the
removal or remediation of such Hazardous Substances, in accordance with this
Agreement and Environmental Laws, either on its own behalf or by causing a
tenant or other party primarily at fault to perform such removal and
remediation. Borrower shall use commercially reasonable efforts to prevent, and
to seek the remediation of, any migration of Hazardous Substances onto or into
the Property from any adjoining property.

 

(ii)          Upon reasonable prior written notice,
the Agent shall have the right, except as otherwise provided under Leases, at
all reasonable times during normal business hours to enter upon and inspect all
or any portion of the Property, provided that such inspections shall not
unreasonably interfere with the operation or the tenants, residents or
occupants of the Property. If the Agent has reasonable grounds to suspect that
Remedial Work may be required, the Agent shall notify Borrower and, thereafter,
may select a consulting Engineer to conduct and prepare reports of such
inspections (with notice to Borrower prior to the commencement of such
inspection). Borrower shall be given a reasonable opportunity to review any
reports, data and other documents or materials reviewed or prepared by the
Engineer, and to submit comments and suggested revisions or rebuttals to same.
The inspection rights granted to the Agent in this Section 5.1(e) shall
be in addition to, and not in limitation of, any other inspection rights
granted to the Agent in this Agreement, and shall expressly include the right
(if the Agent reasonably suspects that Remedial Work may be required) to
conduct soil borings, 

 

76

 

establish ground water
monitoring wells and conduct other customary environmental tests, assessments
and audits.

 

(iii)         Borrower agrees to bear and shall pay
or reimburse the Lenders on demand for all sums advanced and reasonable
expenses incurred (including reasonable attorneys’ fees and disbursements, but
excluding internal overhead, administrative and similar costs of the Lenders)
reasonably relating to, or incurred by Lenders in connection with, the
inspections and reports described in this Section 5.1(e) (to
the extent such inspections and reports relate to the Property) in the
following situations:

 

(x)          If the Agent has reasonable grounds to
believe, at the time any such inspection is ordered, that there exists an
occurrence or condition that could lead to an Environmental Claim;

 

(y)          If any such inspection reveals an
occurrence or condition that is reasonably likely to lead to an Environmental
Claim; or

 

(z)          If an Event of Default with respect to
the Property exists at the time any such inspection is ordered, and such Event
of Default relates to any representation, covenant or other obligation
pertaining to Hazardous Substances, Environmental Laws or any other
environmental matter.

 

(f)            Environmental Notices.  Borrower shall promptly provide notice to
Agent of:

 

(i)           any Environmental Claim asserted by
any Governmental Authority with respect to any Hazardous Substance on, in,
under or emanating from the Property, which might involve remediation cost or
liability greater than $25,000;

 

(ii)          any proceeding, investigation or
inquiry commenced or threatened in writing by any Governmental Authority,
against Borrower, with respect to the presence, suspected presence, Release or
threatened Release of Hazardous Substances from or onto, in or under any
property not owned by Borrower (including, without limitation, proceedings
under the Comprehensive Environmental Response, Compensation, and Liability
Act, as amended, 42 U.S.C. §9601, et seq.),
which might involve remediation cost or liability greater than $25,000;

 

(iii)         all Environmental Claims asserted or
threatened against Borrower with respect to the Property, against any other
party occupying the Property or any portion thereof which become known to Borrower
or against the Property, which might involve remediation cost or liability
greater than $25,000;

 

(iv)         the discovery by Borrower of any
occurrence or condition on the Property which could involve remediation cost or
liability greater than $25,000;

 

(v)          the commencement or completion of any
Remedial Work, which might involve remediation cost or liability greater than
$25,000; and

 

77

 

(vi)         any of the foregoing clauses (i)-(v) that
a tenant notifies to Borrower under a Lease with respect to such tenant.

 

(g)           Copies
of Notices.  Borrower shall transmit
to the Agent copies of any citations, orders, notices or other written
communications received from any Person and any notices, reports or other
written communications submitted to any Governmental Authority with respect to
the matters described in Section 5.1(f).

 

(h)           Environmental
Claims.  The Agent may join and
participate in, as a party if the Agent so determines, any legal or
administrative proceeding or action concerning the Property or any portion
thereof under any Environmental Law, if, in the Agent’s reasonable judgment,
the interests of the Lenders shall not be adequately protected by Borrower; provided,
however, that the Lenders shall not participate in day-to-day decision
making with respect to environmental compliance. Borrower shall pay or
reimburse the Lenders on demand for all reasonable sums advanced and reasonable
expenses incurred (including reasonable attorneys’ fees and disbursements, but
excluding internal overhead, administrative and similar costs of the Lenders)
by the Lenders in connection with any such action or proceeding.

 

(i)            Environmental Indemnification.  Borrower shall indemnify, reimburse, defend,
and hold harmless the Agent, each Lender, the Collateral Agent and each of its
respective parents, subsidiaries, Affiliates, shareholders, directors,
officers, employees, representatives, agents, successors, assigns and attorneys
(collectively, the “Indemnified Parties”) for, from, and against all
demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses (including, without limitation, interest,
penalties, reasonable attorneys’ fees, disbursements and expenses, and
reasonable consultants’ fees, disbursements and expenses (but excluding
internal overhead, administrative, lost opportunity and similar costs of the
Lenders and the Collateral Agent)), asserted against, resulting to, imposed on,
or incurred by any Indemnified Party, directly or indirectly, in connection
with any of the following (except to the extent same are directly and solely
caused by the gross negligence or willful misconduct of any Indemnified Party
and except that any Indemnified Party shall not be indemnified against claims
resulting from actions taken or events occurring with respect to the Property
after the Agent forecloses its Lien or security interest upon the Property or
accepts a deed in lieu of foreclosure or is a so-called “mortgagee-in-possession”
unless and to the extent such indemnification relates to any of the following
which occurred while Borrower owned the Property):

 

(a)           events,
circumstances, or conditions which form the reasonable basis for an
Environmental Claim;

 

(b)           any
pollution or threat to human health or the environment that is related in any
way to Borrower’s or any previous owner’s or operator’s management, use,
control, ownership or operation of the Property (including, without limitation,
all on-site and off-site activities involving Hazardous Substances), and
whether occurring, existing or arising prior to or from and after the date
hereof, and whether or not the pollution or threat to human health or the
environment is described in the Environmental Reports;

 

78

 

(c)           any
Environmental Claim against any Person whose liability for such Environmental
Claim Borrower has or may have assumed or retained either contractually or by
operation of law; or

 

(d)           the
breach of any representation, warranty or covenant set forth in Section 4.2(e) and
Sections 5.1(d) through 5.1(i), inclusive.

 

The provisions of and undertakings and
indemnification set forth in this Section 5.1(i) shall survive
the satisfaction and payment of the Indebtedness and termination of this Agreement.

 

(j)            General
Indemnity.

 

(i)           Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties for, from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), administrative and
judicial actions and proceedings, obligations, debts, damages, losses, costs,
expenses, fines, penalties, charges, fees, expenses, judgments, awards, amounts
paid in settlement, and litigation costs, of whatever kind or nature and
whether or not incurred in connection with any judicial or administrative
proceedings (including, but not limited to, reasonable attorneys’ fees and
other reasonable costs of defense) (the “Losses”) imposed upon or
incurred by or asserted against any Indemnified Parties (except to the extent
same are directly and solely caused by the gross negligence or willful
misconduct of any Indemnified Party) and directly or indirectly arising out of
or in any way relating to any one or more of the following:

 

(A)         ownership of the Note,
any of the other Loan Documents or the Property or any interest therein or
receipt of any Rents or Accounts;

 

(B)         any untrue statement
of any material fact contained in any information provided by Borrower, the
Property or the Loan or the omission to state therein a material fact required
to be stated in such information or necessary in order to make the statements
in such information or in light of the circumstances under which they were made
not misleading;

 

(C)         any and all lawful
action that may be taken and is taken by the Lender in connection with the
enforcement of the provisions of this Agreement, the Note or any of the other
Loan Documents, whether or not suit is filed in connection with same, or in
connection with Borrower or any Affiliate of Borrower becoming a party to a
voluntary or involuntary federal or state bankruptcy, insolvency or similar
proceeding;

 

(D)         any accident, injury
to or death of persons or loss of or damage to property occurring in, on or
about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways;

 

79

 

(E)          any use, nonuse or
condition in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;

 

(F)          any failure on the
part of Borrower to perform or be in compliance with any of the terms of this
Agreement or any of the other Loan Documents;

 

(G)         performance of any
labor or services or the furnishing of any materials or other property in
respect of the Property or any part thereof pursuant to provisions of this
Agreement;

 

(H)         the failure of
Borrower 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 this Agreement;

 

(I)           any failure of the
Property to be in compliance with any Legal Requirement;

 

(J)          the enforcement by
any Indemnified Party of the provisions of this Section 5.1(j); and

 

(K)         any and all claims and
demands whatsoever which may be asserted against the Lenders by reason of any
alleged obligations or undertakings on its part to perform or discharge any of
the terms, covenants, or agreements contained in any Lease.

 

Any amounts payable to an Indemnified Party by
reason of the application of this Section 5.1(j)(i) shall
become due and payable ten (10) days after written demand and shall bear
interest at the Default Rate from the tenth (10th) day after demand until paid.

 

(ii)           Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses imposed upon or incurred by or
asserted against any of the Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording
of this Agreement, the Note or any of the other Loan Documents.

 

(iii)          Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses (including, without limitation,
reasonable attorneys’ fees and costs incurred in the investigation, defense,
and settlement of Losses incurred in correcting any prohibited transaction or
in the sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in the Lender’s
reasonable discretion) that the Indemnified Parties may incur, directly or
indirectly, as a result of a default under Borrower’s covenants with respect to
ERISA and employee benefits plans contained herein.

 

80

 

(iv)          Promptly after
receipt by an Indemnified Party under this Section 5.1(j) of
notice of the making of any claim or the commencement of any action, such
Indemnified Party shall, if a claim in respect thereof is to be made by such
Indemnified Party against Borrower under this Section 5.1(j),
notify Borrower in writing, but the omission so to notify Borrower will not
relieve Borrower from any liability which it may have to any Indemnified Party
under this Section 5.16) or otherwise unless and to the extent that
Borrower did not otherwise possess knowledge of such claim or action and such
failure resulted in the forfeiture by Borrower of substantial rights and
defenses. In case any such claim is made or action is brought against any
Indemnified Party and such Indemnified Party seeks or intends to seek indemnity
from Borrower, Borrower will be entitled to participate in, and, to the extent
that it may wish, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party; and, upon receipt of notice from
Borrower to such Indemnified Party of its election so to assume the defense of
such claim or action and only upon approval by the Indemnified Party of such
counsel (such approval not to be unreasonably withheld or delayed), Borrower
will not be liable to such Indemnified Party under this Section 5.1(j) for
any legal or other expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof. Notwithstanding the preceding sentence,
each Indemnified Party will be entitled to employ counsel separate from such
counsel for Borrower and from any other party in such action if such
Indemnified Party reasonably determines that a conflict of interest exists
which makes representation by counsel chosen by Borrower not advisable. In such
event, Borrower shall pay the reasonable fees and disbursements of such
separate counsel, subject to reimbursement of such costs if the Indemnified
Party requiring such separate counsel is found not to be entitled to the
indemnity protection of this Section 5.1(j). Borrower shall not,
without the prior written consent of an Indemnified Party, settle or compromise
or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Indemnified Party
is an actual or potential party to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each
Indemnified Party from all liability arising out of such claim, action, suit or
proceeding. Each Indemnified Party shall not enter into a settlement of or
consent to the entry of any judgment with respect to any action, claim, suit or
proceeding as to which an Indemnified Party would be entitled to
indemnification hereunder without the prior written consent of Borrower.

 

The provisions of and undertakings and
indemnification set forth in this Section 5.1(j) shall survive
the satisfaction and payment of the Indebtedness and termination of this
Agreement.

 

(k)           Access to Property. 
Borrower shall permit agents, representatives and employees of the Agent
to inspect the Property or any part thereof at such reasonable times as may be
requested by Agent upon reasonable advance written notice, subject, however, to
the rights of Borrower and of the tenants of the Property.

 

(l)            Notice of Default. 
Borrower shall promptly advise Agent in writing of any change in
Borrower’s condition, financial or otherwise, that is reasonably likely to have
a Material Adverse Effect, or of the occurrence of any Default or Event of
Default.

 

81

 

(m)          Cooperate in Legal Proceedings.  Except with respect to any claim by Borrower
or the Guarantor against the Agent or any Lender, Borrower shall reasonably
cooperate with Agent with respect to any proceedings before any Governmental
Authority that are reasonably likely to in any way materially affect the rights
of the Lenders hereunder or any rights obtained by the Lenders under any of the
Loan Documents and, in connection therewith, shall not prohibit Agent, at its
election, from participating in any such proceedings.

 

(n)           Perform
Loan Documents.  Borrower shall
observe, perform and satisfy all the terms, provisions, covenants and
conditions required to be observed, performed or satisfied by it, and shall pay
when due all costs, fees and expenses required to be paid by it, under the Loan
Documents.

 

(o)           Insurance
Benefits.  Borrower shall reasonably
cooperate with Agent in obtaining for the Lenders the benefits of any Insurance
Proceeds lawfully or equitably payable to Borrower or Lenders in connection
with the Property. Agent shall be reimbursed for any expenses reasonably
incurred in connection therewith (including reasonable attorneys’ fees and
disbursements, but excluding internal overhead, administrative and similar
costs of Agent) out of such Insurance Proceeds, all as more specifically
provided in this Agreement.

 

(p)           Further Assurances. 
Borrower shall, at Borrower’s sole cost and expense:

 

(i)           upon Agent’s reasonable request
therefor given from time to time, pay for (a) reports of UCC, tax lien,
judgment and litigation searches with respect to Borrower, and (b) searches
of title to the Property, each such search to be conducted by search firms
designated by Agent in each of the locations designated by Agent;

 

(ii)          furnish to Agent all instruments,
documents, certificates, title and other insurance reports and agreements, and
each and every other document, certificate, agreement and instrument required
to be furnished pursuant to the terms of the Loan Documents;

 

(iii)         execute and deliver to Agent such
documents, instruments, certificates, assignments and other writings, and do
such other acts necessary, to evidence, preserve and/or protect the Collateral
at any time securing or intended to secure the Note, as Agent may reasonably
require (including, without limitation, tenant estoppel certificates, an
amended or replacement Mortgage, UCC financing statements or Collateral Security
Instruments); and

 

(iv)         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 Agent shall reasonably require from time to time.

 

(q)           Management
of Property.

 

(i)           The Property shall be managed at all
times by the Manager or another manager reasonably satisfactory to Agent,
pursuant to a Management Agreement. 

 

82

 

Any such manager may be an
Affiliate of Borrower, provided that: 
(a) the terms and conditions of such manager’s engagement are at
arm’s length, reasonable, competitive and customary in the applicable
marketplace; and (b) Agent has approved such manager and such terms, which
approval shall not be unreasonably withheld or delayed. Borrower shall cause
the manager of the Property to agree that such manager’s management agreement
is subject and subordinate in all respects to the Lien of the Mortgage. A
Management Agreement may be terminated (1) by Borrower at any time in
accordance with the provisions of such Management Agreement so long as a
successor manager as specified below shall have been appointed and such
successor manager has (i) entered into a Management Agreement, subject to
any modifications approved by Agent, which approval shall not be unreasonably
denied, conditioned or delayed, and (ii) has executed and delivered the
Manager’s Subordination to Agent, and (2) by Agent upon thirty (30) days’
prior written notice to Borrower and the Manager (a) upon the occurrence
and continuation of an Event of Default or (b) if the Manager commits any
act which would permit termination under the Management Agreement (subject to
any applicable notice, grace and cure periods provided in the Management
Agreement). Borrower may from time to time appoint a successor manager to
manage the Property with Agent’s prior written consent, such consent not to be
unreasonably withheld. Notwithstanding the foregoing, any successor manager
selected hereunder by Agent or Borrower to manage the Property shall be a
reputable management company having substantial experience in the management of
real property of a similar type, size and quality in the state in which the
Property is located. Borrower further covenants and agrees that any manager of
Property shall at all times while any Indebtedness is outstanding maintain
worker’s compensation insurance as required by Governmental Authorities.

 

(ii)          Borrower further covenants and agrees
that the Property shall be operated pursuant to the Management Agreement and
that Borrower shall:  (w) promptly
perform and/or observe all of the material covenants and agreements required to
be performed and observed by it under the Management Agreement and do all
things reasonably necessary to preserve and to keep unimpaired its material
rights thereunder; (x) promptly notify the Agent of any material default
under the Management Agreement of which it is aware; (y) promptly deliver
to the Agent a copy of each financial statement, business plan, capital
expenditures plan, notice and report received by it under the Management
Agreement, including, but not limited to, financial statements; and (z) promptly
enforce the performance and observance of the covenants and agreements required
to be performed and/or observed by the Manager under the Management Agreement.

 

(r)            Financial
Reporting.

 

(i)            Borrower shall keep and maintain or
shall cause to be kept and maintained on a Fiscal Year basis in accordance with
GAAP consistently applied, books, records and accounts reflecting in reasonable
detail all of the financial affairs of Borrower and all items of income and
expense in connection with the operation of the Property and ownership of the
Property and in connection with any services, equipment or furnishings provided
in connection with the operation of the Property, whether such income or
expense may be realized by Borrower or by any other Person whatsoever. 

 

83

 

Agent shall have the right
from time to time at all times during normal business hours upon reasonable
prior written notice to Borrower to examine such books, records and accounts at
the office of Borrower or other Person maintaining such books, records and
accounts and to make such copies or extracts thereof as Agent shall desire.
During the continuation of an Event of Default (including, without limitation,
an Event of Default resulting from the failure of the Borrower to deliver any
of the financial information required to be delivered pursuant to this Section 5.1(r)),
Borrower shall pay any reasonable costs and expenses incurred by Agent to
examine Borrowers’ accounting records, as Agent shall reasonably determine to
be necessary or appropriate in the protection of the Lenders’ interest.

 

(ii)           Borrower shall furnish to Agent
annually, within one hundred twenty (120) days following the end of each Fiscal
Year, a complete copy of Borrower’s unaudited financial statement in accordance
with GAAP consistently applied (which may be prepared internally) covering
Borrower’s financial position and results of operations, for such Fiscal Year
and containing a statement of revenues and expenses, a statement of assets and
liabilities and a statement of Borrower’s equity, all of which shall be in form
and substance reasonably acceptable to Agent. Agent shall have the right from
time to time to review and consult with respect to the accounting procedures
used in the preparation of such annual financial statements. Together with
Borrower’s annual financial statements, Borrower shall furnish to Agent an
Officer’s Certificate certifying as of the date thereof (x) that the
annual financial statements present fairly in all material respects the results
of operations and financial condition of Borrower all in accordance with GAAP
consistently applied, and (y) whether there exists an Event of Default or
Default, and if such Event of Default or Default exists, the nature thereof,
the period of time it has existed and the action then being taken to remedy
same.

 

(iii)          Borrower shall furnish to Agent,
within sixty (60) days following the end of each Fiscal Year quarter a true,
complete and correct quarterly unaudited financial statement prepared in
accordance with GAAP with respect to Borrower for the portion of the Fiscal
Year then ended.

 

(iv)          Borrower shall furnish to Agent,
within thirty (30) Business Days after request, such further information with
respect to the operation of the Property and the financial affairs of Borrower
as may be reasonably requested by Agent, including all business plans prepared
for Borrower.

 

(v)           Borrower shall furnish to Agent,
within thirty (30) Business Days after request, such further information
regarding any Plan or Multiemployer Plan and any reports or other information
required to be filed under ERISA as may be reasonably requested by Agent in
writing.

 

(vi)          At least thirty (30) days prior to the
end of each of Borrower’s Fiscal Years, Borrower shall submit or cause to be
submitted to Agent for its approval, such approval not to be unreasonably
withheld or delayed, an Operating Budget for Property Expenses, Capital
Improvement Costs, Leasing Commissions, TI Costs and replacement reserve costs
for the next Fiscal Year for the Property. Until so approved by 

 

84

 

Agent for the subsequent
Fiscal Year, the Operating Budget approved by Agent for the preceding Fiscal
Year shall remain in effect for purposes of Section 3.12; provided,
that for so long as such prior Operating Budget remains in effect, amounts set
forth in the prior Operating Budget with respect to Property Expenses, TI Costs
and Leasing Commissions shall be deemed increased on a percentage basis by an
amount equal to the greater of (x) actual increases then known to Borrower
and (y) the increase in the Consumer Price Index (expressed as a
percentage) as measured over the calendar year that the prior Operating Budget
was in effect.

 

(vii)         No
later than thirty (30) days following the end of each calendar quarter,
beginning with the first calendar quarter end after the related Advance Closing
Date, Borrower shall prepare and deliver to the Agent and the Collateral Agent
a statement (each a “Quarterly Statement”) in hard copy and on diskette
and/or a copy through electronic mail, in form and substance reasonably
satisfactory to Agent, setting forth with respect to the related Property,

 

(A)         a rent roll dated as
of the last day of such quarter in a form acceptable to the Agent, identifying
each of the Leases and containing any information reasonably required by Agent;
and

 

(B)         monthly and
year-to-date operating statements prepared for each calendar month during each
such quarter, each of which shall include an itemization of actual (not pro
forma) capital expenditures during the applicable period.

 

(s)           Operation of Property.  Borrower shall cause the operation of the
Property to be conducted at all times in a manner consistent with at least the
level of operation of the Property as of the Closing Date, including, without
limitation, the following:

 

(i)            to maintain or cause to be
maintained the standard of the Property at all times at a level not lower than
that maintained by prudent managers of similar facilities or land in the region
where the Property is located; and

 

(ii)           to operate or cause to be operated
the Property in a prudent manner in compliance in all material respects with
applicable Legal Requirements and Insurance Requirements relating thereto and
maintain or cause to be maintained all licenses, Permits and any other
agreements necessary for the continued use and operation of the Property.

 

(t)            Single-Purpose
Entity.

 

(i)           Borrower at all times will continue
to be a duly formed and validly existing limited liability company, or as the
case may be, a limited partnership under the laws of the State of its formation
and a Single-Purpose Entity.

 

85

 

(ii)           Borrower shall at all times
comply with the provisions of its Organizational Agreement and the laws of the
State of its formation relating to limited liability companies or, as the case
may be, limited partnerships.

 

(iii)          Borrower shall observe all customary
formalities regarding its existence.

 

(iv)         Borrower shall accurately
maintain its financial statements, accounting records and other corporate
documents separate from those of its members, Affiliates of its members and any
other Person. Borrower shall not commingle its assets with those of its
members, any Affiliates of its members, or any other Person. Borrower shall
continue to accurately maintain its own bank accounts and separate books of
account.

 

(v)          Borrower shall continue to
pay its own liabilities from its own separate assets.

 

(vi)         Borrower shall continue to
identify itself in all dealings with the public, under its own name or trade
names and as a separate and distinct entity. Borrower will not identify itself
as being a division or a part of any other entity. Borrower will not identify
its members or any Affiliates of its members as being a division or part of
Borrower.

 

(vii)        Borrower shall continue to
be adequately capitalized in light of the nature of its business.

 

(viii)       Borrower shall not assume or
guarantee the liabilities of its members, any Affiliates of its members or any
other Persons, except for liabilities relating to the Property. Borrower shall
not acquire obligations or securities of its members, or any Affiliates of its
members or any other Persons. Except for the Liens granted pursuant to the Loan
Documents, Borrower shall not pledge its assets for the benefit of any other
Person (other than the Agent) or make loans or advances to its members (or any
predecessor corporation), or any Affiliates of its members or any other
Persons.

 

(ix)          Borrower shall not enter
into or be a party to any transaction with its members or any Affiliates of its
members, except for in the ordinary course of business 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 (other than in connection with the
execution by Borrower and the Manager of the Management Agreement).

 

(u)           ERISA.  Borrower shall deliver to Agent as soon as
possible, and in any event within ten days after Borrower knows or has reason
to believe that any of the events or conditions specified below with respect to
any 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 

 

86

 

copy
of any report or notice required to be filed with or given to PBGC by Borrower
or an ERISA Affiliate with respect to such event or condition):

 

(i)            any reportable event, as
defined in Section 4043(b) 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 or 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 or 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;

 

(ii)           the distribution under Section 4041(c) 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;

 

(iii)          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 Borrower of a notice from a Multiemployer Plan that such
action has been taken by PBGC with respect to such Multiemployer Plan;

 

(iv)         the complete or partial
withdrawal from a Multiemployer Plan by Borrower or any ERISA Affiliate of
Borrower that results in material 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
Borrower 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;

 

(v)          the institution of a
proceeding by a fiduciary of any Multiemployer Plan against Borrower or any
ERISA Affiliate of Borrower to enforce Section 515 of ERISA, which
proceeding is not dismissed within thirty (30) days;

 

(vi)         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 Affiliate of Borrower fails to
timely provide security to the Plan in accordance with the provisions of said
Sections; and

 

(vii)        the imposition of a lien or
a security interest in connection with a Plan.

 

(v)           Reserved.

 

87

 

(w)          Reserved.

 

(x)            Insurance.

 

(i)           Borrower, at its sole cost
and expense, shall keep the Improvements and Equipment insured (including, but
not limited to, any period of renovation, alteration and/or construction)
during the term of the Loan with the coverage and in the amounts required under
this Agreement (and with deductibles acceptable to Agent) for the mutual
benefit of Borrower and Agent against loss or damage by fire, lightning, wind
and such other perils as are customarily included in a standard “all-risk” or “special
cause of loss” form and against loss or damage by other risks and hazards
covered by a standard extended coverage insurance policy (including, without
limitation, riot and civil commotion, vandalism, malicious mischief, burglary,
collapse, theft and such other coverages as may be reasonably required by Agent
on the special form (formerly known as an all-risk form)). Such insurance shall
be in an amount (i) equal to at least the full replacement cost of the
Improvements and Equipment (exclusive of the cost of foundations and footings),
without deduction for physical depreciation, (ii) such that the insurer
would not deem Borrower a co-insurer under said policies and (iii) with
respect to loss or damage by wind, shall be subject to a deductible no greater
than 5% of total insured value. The policies of insurance carried in accordance
with this Section 5.1(x) shall be paid not less than ten (10) days
in advance of the due date thereof and shall contain the “Replacement Cost
Endorsement” with a waiver of depreciation. If terrorism coverage is excluded
on an “all-risk” basis, then the Borrower shall obtain coverage for terrorism
and similar acts in the standalone terrorism market. Notwithstanding the
foregoing, Agent shall not unreasonably withhold its consent to reductions in
the stated amounts and types of coverage required to be maintained by Borrower
hereunder if such levels of coverage or types of insurance, as determined by
Agent in its sole reasonable discretion, (A) are not available at
commercially reasonable rates, (B) are not at the time commonly maintained
for properties similar to the Property and located in or around the region in
which the Property is located and (C) Borrower shall not be required to
spend in excess of $150,000 for terrorism coverage.

 

(ii)          Borrower, at its sole cost
and expense, for the mutual benefit of Borrower and Agent, shall also (or shall
cause the tenant under the terms of an applicable Lease to) obtain and maintain
or cause to be obtained and maintained during the entire term of the Loan the
following policies of insurance:

 

(A)         flood
insurance, if any part of the Property is located in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards and
in which flood insurance has been made 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 (and any amendment or successor act
thereto) in an amount at least equal to the maximum limit of coverage available
with respect to the Improvements and Equipment under said Act and with
deductibles not to exceed the maximum deductibles available under said Act and
excess flood coverage in an amount of $5,000,000, including 

 

88

 

property
damage and business income, which excess flood coverage shall be subject to a
deductible in an amount not greater that 5% of total insured value;

 

(B)          Commercial
General Liability insurance, including coverage for broad form property damage,
contractual damages, personal injury, bodily injuries (including death
resulting therefrom) and a liquor liability endorsement if liquor is sold on
the Property, containing minimum limits of liability of $1 million for both
injury to or death of a person and for property damage per occurrence and $2
million in the aggregate for the Property, and such other liability insurance reasonably
requested by Agent; in addition, at least $10 million (and, with respect to the
individual Property known as Wachovia Center Tower, $50 million) excess and/or
umbrella liability insurance shall be obtained and maintained for any and all
claims, including all legal liability imposed upon Borrower and all court costs
and attorneys’ fees incurred in connection with the ownership, operation and
maintenance of the Property in accordance with the Standard ISO General
Liability Policy form inclusive of Contractual Liability;

 

(C)          business
interruption insurance (including rental value) in an annual aggregate amount
equal to the estimated gross revenues from the Leases of the Property
(including, without limitation, the loss of all Rents and additional Rents
payable by all of the lessees under the Leases (whether or not such Leases are
terminable in the event of a fire or casualty)), such insurance to cover losses
for the period from the time of loss until all repairs are fully completed
with reasonable diligence and dispatch, plus an extended period of indemnity
commencing at the time repairs are completed for a period of not less than 90
days and to be increased or decreased, as reasonably required by Agent;
provided, however, that, with respect to the individual Properties commonly
know as Wachovia Center Tower and Wachovia NBOC Op Center, such insurance shall
cover losses for at least a period of 18 months after the date of the fire or
casualty in question, plus an extended period of indemnity commencing at the
time repairs are completed for a period of not less than 180 days.  From time to time during the term of the Loan
if, and when, the gross revenues from the Leases of the Property materially
increase or decrease, upon annual renewal of the insurance policy (including,
without limitation, increases from new Leases and renewal Leases entered into
in accordance with the terms of this Agreement), to reflect all increased Rent
and increased additional Rent payable by all of the lessees under such renewal Leases
and all Rent and additional Rent payable by all of the lessees wider such new
Leases;

 

(D)          insurance
against loss or damage from explosion of steam boilers, air conditioning
equipment, high pressure piping, machinery and equipment, pressure vessels or
similar apparatus now or hereafter installed in the Improvements (without
exclusion for explosions), covering all boilers or other pressure vessels,
machinery and equipment located in, on, or about the Improvements; coverage is
required in such amount as is generally available and commonly maintained for
properties similar to the Property and shall extend to 

 

89

 

electrical
equipment, sprinkler systems, heating and air conditioning equipment,
refrigeration equipment and piping;

 

(E)          worker’s
compensation insurance coverage for all persons employed by Borrower or its
tenants at the Property and in compliance with all other requirements of
applicable local, state and federal law and “Employers Liability” insurance in
amounts not less than $500,000;

 

(F)          during any
period of repair or restoration, builder’s “all-risk” insurance or its
equivalent in an amount equal to not less than the full insurable value of the
construction costs against such risks (including, without limitation, fire and
extended coverage and collapse of the Improvements to agreed limits) as Agent
may request, in form and substance acceptable to Agent;

 

(G)         ordinance or
law coverage to compensate for the cost of demolition, increased cost of construction
(in amounts acceptable to Agent), and loss to any undamaged portions of the
Improvements, if the current use of the Property or the Improvements themselves
are or become “nonconforming” pursuant to the applicable zoning regulations, or
full rebuildability following casualty is otherwise not permitted under such
zoning regulations;

 

(H)         if required by
Agent as a result of the Property being located in an area with a high degree
of seismic activity, earthquake damage insurance in a reasonable amount and
form acceptable to Agent and commercially available; and

 

(I)           such other
insurance as may from time to time be reasonably required by Agent in order to
protect its interests with respect to the Loan and the Property. and is
commonly maintained for properties similar to the Property.

 

(iii)          All policies of insurance
(the “Policies”) required pursuant to this Section 5.1(x):

 

(A)         shall be issued
by an insurer approved by Agent which has a claims paying ability rating of not
less than “A-” (or the equivalent) by Rating Agencies satisfactory to Agent
(one of which shall be Standard & Poor’s Ratings Group) or A:X or
better as to claims paying ability by AM Best; provided, that,
notwithstanding the foregoing, no more than 25% of the amounts of insurance may
be provided by carriers with an AM Best rating of not less than A-/VIII); provided,
however, if the insurance provided hereunder is procured by a
syndication of more than five insurers then the foregoing requirements shall
not be violated if at least sixty percent of the coverage is with carriers
having a claims paying ability rating of “A-” or better by Standard &
Poor’s,

 

(B)         shall name
Agent as an additional insured and contain a standard noncontributory mortgagee
clause and an Agent’s Loss Payable 

 

90

 

Endorsement,
or their equivalents, naming Agent (and/or such other party as may be
designated by Agent) as the party to which all payments made by such insurance
company shall be paid; provided, with respect to CTL Properties only,
Borrower shall endeavor to comply with this paragraph if the insurance obtained
by the tenant (and not the Borrower) satisfies the requirement,

 

(C)           shall be
maintained throughout the term of the Loan without cost to Agent,

 

(D)          shall contain
such provisions as Agent deems reasonably necessary or desirable to protect its
interest and is commonly maintained for properties similar to the Property
(including, without limitation, endorsements providing that neither Borrower,
Agent nor any other party shall be a co-insurer under said Policies and that
Agent shall receive at least thirty (30) days prior written notice of any
modification, non-renewal or cancellation),

 

(E)           shall contain a
waiver of subrogation against Agent,

 

(F)           shall be for a
term of not less than one year,

 

(G)           shall be issued
by an insurer licensed in the state in which the Property is located,

 

(H)          shall provide
that Agent may, but shall not be obligated to, make premium payments to prevent
any cancellation, endorsement, alteration or reissuance, and such payments
shall be accepted by the insurer to prevent same; provided, with respect
to CTL Properties only, Borrower shall endeavor to comply with this paragraph
if the insurance obtained by the tenant (and not the Borrower) satisfies the
requirement, and

 

(I)            shall be
reasonably satisfactory in form and substance to Agent and reasonably approved
by Agent as to amounts, form, risk coverage, deductibles, loss payees and
insureds to the extent not otherwise specified in this Section 5.1(x) and
is commonly maintained by properties similar to the Property.

 

Insurance certificates evidencing such coverages
shall be delivered to Agent; provided, however, upon demand by a
Rating Agency, copies of said Policies, shall be delivered to Agent. Prior to
the expiration date of each of the Policies, Borrower shall deliver to Agent
satisfactory evidence of the renewal of each Policy. The insurance coverage
required under this Section 5.1(x) may be effected under a
blanket policy or policies covering the Property and other property and assets
not constituting a part of the Collateral; provided that any such
blanket policy shall provide at least the same amount and form of protection as
would a separate policy insuring the Property individually, which amount shall
not be less than the amount required pursuant to this Section 5.1(x) and
which shall in any case comply in all other respects with the requirements of
this Section 5.1(x). Upon demand therefor and after fifteen days
notice of default, Borrower shall reimburse Agent for all of Agent’s or its
designee’s reasonable costs and expenses 

 

91

 

incurred in obtaining any or all of the Policies or
otherwise causing the compliance with the terms and provisions of this Section 5.1(x),
including (without limitation) obtaining updated flood hazard certificates and
replacement of any so-called “forced placed” insurance coverages to the extent
Borrower was required to obtain and maintain any such Policy or Policies
hereunder and failed to do so. Borrower shall pay the premiums for such
Policies (the “Insurance Premiums”) as the same become due and payable
and shall furnish to Agent evidence of the renewal of each of the Policies with
receipts for the payment of the Insurance Premiums or other evidence of such
payment reasonably satisfactory to Agent (provided, however, that
Borrower is not required to furnish such evidence of payment to Agent in the
event that such Insurance Premiums have been paid by Agent or the Collateral
Agent). If Borrower does not furnish such evidence and receipts prior to the
expiration of any expiring Policy, then Agent may procure, but shall not be
obligated to procure, such insurance and pay the Insurance Premiums therefor,
and Borrower agrees to reimburse Agent for the cost of such Insurance Premiums
promptly on demand. Within thirty (30) days after request by Agent, Borrower
shall obtain such increases in the amounts of coverage required hereunder as
may be reasonably requested by Agent, based on then industry-standard amounts
of coverage then being obtained by prudent owners of properties similar to the
Property in the same applicable market region as the Property. Borrower shall
give Agent prompt written notice if Borrower receives from any insurer any
written notification or threat of any actions or proceedings regarding the
non-compliance or non-conformity of the Property with any insurance
requirements.

 

(iv)          If the Property
shall be damaged or destroyed, in whole or in part, by fire or other casualty,
Borrower shall give prompt notice thereof to Agent.

 

(A)         In case of loss
covered by Policies, Agent may either (a) jointly with a Borrower settle
and adjust any claim and agree with the insurance company or companies on the
amount to be paid on the loss or (b) allow Borrower to agree with the
insurance company or companies on the amount to be paid upon the loss; provided,
that Borrower may settle and adjust losses per occurrence level not in excess
of $100,000, agree with the insurance company or companies on the amount to be
paid upon the loss and collect and receipt for any such Insurance Proceeds; provided,
further, that if (x) at the time of the settlement of such claim an
Event of Default has occurred and is continuing or (y) the Agent and the
Borrower are unable to agree upon a joint settlement or (z) the Agent
disapproves of the Borrower’s proposed settlement with the insurance company,
then Agent shall settle and adjust such claim without the consent of Borrower.
In any such case Agent shall and is hereby authorized to collect and receipt
for any such Insurance Proceeds subject to and to the extent provided for in
this Agreement. The reasonable out-of-pocket expenses incurred by Agent in the
adjustment and collection of Insurance Proceeds shall become part of the
Indebtedness and be secured by the Mortgage and shall be reimbursed by Borrower
to Agent upon demand therefor.

 

(B)         In the event of
any insured damage to or destruction of the Property or any part thereof
(herein called an “Insured Casualty”) where the 

 

92

 

aggregate
amount of the loss, as reasonably determined by an Independent insurance
adjuster, is less than ten percent (10%) of the related Advance, and if, in the
reasonable judgment of Agent, the Property can be restored by not later than
the first to occur of (a) twelve (12) months of settlement of the claim
and (b) the expiration of the business interruption insurance and, in any
case, not later than six (6) months prior to the Maturity Date to an
economic unit not less materially valuable (including an assessment of the
impact of the termination of any Leases due to such Insured Casualty) and not
less useful than the same was prior to the Insured Casualty, or if Agent
otherwise elects to allow a Borrower to restore the Property, then, if no Event
of Default shall have occurred and be continuing, the Insurance Proceeds (after
reimbursement of any reasonable out-of-pocket expenses incurred by Agent in
connection with the collection of any applicable Insurance Proceeds) shall be
made available to reimburse Borrower for the cost of restoring, repairing,
replacing or rebuilding the Property or part thereof subject to the Insured
Casualty, as provided for below. Borrower hereby covenants and agrees to
commence and diligently to prosecute such restoring, repairing, replacing or
rebuilding. Borrower shall pay all out-of-pocket costs (and if required by
Agent, Borrower shall deposit the total thereof with Agent in advance) of such
restoring, repairing, replacing or rebuilding in excess of the Insurance
Proceeds made available pursuant to the terms hereof (the “Deficient Amount”).

 

(C)           Except as
provided above, the Insurance Proceeds collected upon any Insured Casualty
shall, at the option of Agent in its sole discretion, be applied to the payment
of the Indebtedness as provided in Section 2.7(b) of this
Agreement or applied to the cost of restoring, repairing, replacing or
rebuilding the affected Property or part thereof subject to the Insured
Casualty, in the manner set forth below.

 

(D)          In the event
that Insurance Proceeds (after reimbursement of any reasonable expenses
incurred by Agent in connection with the collection of any applicable Insurance
Proceeds), if any, shall be made available to Borrower for the restoring,
repairing, replacing or rebuilding of any portion of the affected Property,
Borrower covenants to restore, repair, replace or rebuild the same to be of at
least comparable value as prior to such damage or destruction, all to be
effected in accordance with Legal Requirements and plans and specifications
approved in advance by Agent, such approval not to be unreasonably withheld or
delayed.

 

(E)           In the event
Borrower is entitled to reimbursement out of Insurance Proceeds, such proceeds
shall be held in an Eligible Account as provided in Section 2.12(f) and
disbursed from time to time as the restoration progresses upon Agent being
furnished with (1) evidence reasonably satisfactory to it (which evidence
may include inspection(s) of the work performed) that the restoration,
repair, replacement and rebuilding covered by the disbursement has been
completed in accordance with plans and specifications approved by Agent, (2) evidence
reasonably satisfactory to it of the estimated cost of completion of the
restoration, repair, replacement and rebuilding, (3) funds, or, at Agent’s

 

93

 

option,
assurances reasonably satisfactory to Agent that such funds are available and
sufficient in addition to the Insurance Proceeds to complete the proposed
restoration, repair, replacement and rebuilding, and (4) such architect’s
certificates, waivers of lien, contractor’s sworn statements, title insurance
endorsements, bonds and other evidences of cost, payment and performance of the
foregoing repair, restoration, replacement or rebuilding as Agent may
reasonably require and approve. Agent may, in any event, require that all plans
and specifications for such restoration, repair, replacement and rebuilding be
submitted to and reasonably approved by Agent prior to commencement of work.
Agent may retain a construction consultant to inspect such work and review
Borrower’s request for payments and Borrower shall, on demand by Agent,
reimburse Agent for the reasonable fees and disbursements of such consultant.
No payment made prior to the final completion of the restoration, repair,
replacement and rebuilding shall exceed ninety percent (90%) of the hard
construction costs value of the work performed from time to time (except for
restoration work on a trade by trade basis or on an hourly basis for
professional services in which event, payment may be made in full upon the
completion of such work); funds other than Insurance Proceeds shall be
disbursed prior to disbursement of such proceeds; and, at all times, the
undisbursed balance of such proceeds remaining in the accounts of Agent,
together with funds deposited for that purpose or irrevocably committed to the
repayment of Agent by or on behalf of Borrower for that purpose, shall be at
least sufficient in the reasonable judgment of Agent to pay for the cost of
completion of the restoration, repair, replacement or rebuilding, free and
clear of all liens or claims for lien, except for Permitted Encumbrances. Any
surplus which may remain out of Insurance Proceeds held by Agent after payment
of such costs of restoration, repair, replacement or rebuilding shall be paid
to Borrower so long as no Event of Default has occurred and is continuing.

 

(v)          Borrower shall not carry
separate insurance, concurrent in kind or form or contributing in the event of
loss, with any insurance required under this Agreement that would be considered
“co-insurance” or adversely affect the ability to collect under a policy of
insurance required hereunder.

 

(y)           Condemnation.

 

(i)           Borrower shall promptly give
Agent written notice of the actual or threatened commencement of any proceeding
for a Taking and shall deliver to Agent copies of any and all papers served in
connection with such proceedings. Agent is hereby irrevocably appointed as
Borrower’s attorney-in-fact, coupled with an interest, with exclusive power to
collect, receive and retain any Condemnation Proceeds for said Taking. With
respect to any compromise or settlement in connection with such proceeding,
Agent shall jointly with Borrower compromise and reach settlement unless at the
time of such Taking an Event of Default has occurred and is continuing and the
Indebtedness has been accelerated, in which event Agent shall compromise and
reach settlement without the consent of Borrower. Notwithstanding the foregoing
provisions of this Section 5.1(y), Borrower is authorized to
negotiate, compromise and settle, without participation by Agent, Condemnation
Proceeds of up to $50,000 in connection with any 

 

94

 

Taking. Notwithstanding any
Taking, Borrower shall continue to pay the Indebtedness at the time and in the
manner provided for in this Agreement and the other Loan Documents and the
Indebtedness shall not be reduced except in accordance therewith.

 

(ii)           Borrower shall cause the
Condemnation Proceeds to be paid directly to the Collection Account as provided
in Section 3.7(b) of this Agreement. Agent may, in its sole
discretion, apply any such Condemnation Proceeds to the reduction or discharge
of the Indebtedness (whether or not then due and payable).

 

(iii)          With respect to a Taking in part, which shall mean
any Taking which does not render the affected Property physically or economically
unsuitable in the reasonable judgment of Agent for the use to which it was
devoted prior to the Taking, Borrower shall cause the Condemnation Proceeds to
be paid to Agent as described above or deposited into the applicable account
pursuant to the provisions of this Agreement, to be applied to the cost of
repairing, replacing, restoring or rebuilding the affected Property as follows:

 

(A)         Provided that
Condemnation Proceeds shall be made available to Borrower for the restoring,
repairing, replacing or rebuilding of the affected Property, Borrower hereby
covenants to restore, repair, replace or rebuild the same to be of at least
comparable value and, to the extent commercially practicable, of substantially
the same character as prior to the Taking, all to be effected in accordance
with applicable law and plans and specifications reasonably approved in advance
by Agent. Borrower shall pay all costs (and if required by Agent, Borrower
shall deposit the total thereof with Agent in advance) of such restoring, repairing,
replacing or rebuilding in excess of the Condemnation Proceeds made available
pursuant to the terms hereof.

 

(B)         The
Condemnation Proceeds held by Agent shall be held in an Eligible Account as
provided in Section 3.12(f) and disbursed from time to time as
the restoration progresses upon Agent being furnished with (1) evidence
reasonably satisfactory to it (which evidence may include inspection(s) of
the work performed) that the restoration, repair, replacement and rebuilding
covered by the disbursement has been completed in accordance with plans and
specifications approved by Agent, (2) evidence reasonably satisfactory to
it of the estimated cost of completion of the restoration, repair, replacement
and rebuilding, (3) funds, or, at Agent’s option, assurances satisfactory
to Agent that such funds are available and sufficient in addition to the
Condemnation Proceeds to complete the proposed restoration, repair, replacement
and rebuilding, and (4) such architect’s certificates, waivers of lien,
contractor’s sworn statements, title insurance endorsements, bonds and other
evidences of cost, payment and performance of the foregoing repair,
restoration, replacement or rebuilding as Agent may reasonably require and
approve. Agent may, in any event, require that all plans and specifications for
such restoration, repair, replacement and rebuilding be submitted to and
reasonably approved by Agent prior to commencement of work. Agent may retain a
construction consultant to inspect such work and review any request by Borrower
for payments and Borrower shall, 

 

95

 

on demand by Agent,
reimburse Agent for the reasonable fees and disbursements of such consultant.
No payment made prior to the final completion of the restoration, repair,
replacement and rebuilding shall exceed ninety percent (90%) of the hard
construction costs value of the construction work performed from time to time
(except for restoration work on a trade by trade basis or on an hourly basis
for professional services in which event, payment may be made in full upon the
completion of such work); funds other than Condemnation Proceeds shall be
disbursed prior to disbursement of such proceeds; and at all times, the
undisbursed balance of such proceeds remaining in the hands of Agent, together
with funds deposited for that purpose or irrevocably committed to the repayment
of Agent by or on behalf of Borrower for that purpose, shall be at least
sufficient in the reasonable judgment of Agent to pay for the cost of
completion of the restoration, repair, replacement or rebuilding, free and
clear of all liens or claims for lien. Any surplus which may remain out of
Condemnation Proceeds held by Agent after payment of such costs of restoration,
repair, replacement or rebuilding shall be paid to Borrower so long as no Event
of Default has occurred and is continuing.

 

(C)           If the affected
Property is sold, through foreclosure or otherwise, prior to the receipt by
Agent of any such Condemnation Proceeds to which it is entitled hereunder,
Agent shall have the right, whether or not a deficiency judgment on the Note
shall have been sought, recovered or denied, to have reserved in any
foreclosure decree a right to receive said award or payment, or a portion
thereof sufficient to pay the Indebtedness. In no case shall any such
application reduce or postpone any payments otherwise required pursuant to this
Agreement, other than the final payment on the Note.

 

(z)            Leases and
Rents.

 

(i)           Borrower absolutely and
unconditionally assigns to Agent, Borrower’s right, title and interest in all
current and future Leases and Rents as collateral for the Loan, it being
intended by Borrower that this assignment constitutes a present, absolute
assignment and not an assignment for additional security only. Such assignment
to Agent shall not be construed to bind Agent to the performance of any of the
covenants, conditions or provisions contained in any such Lease or otherwise
impose any obligation upon Agent. Borrower shall execute and deliver to Agent
such additional installments, in form and substance reasonably satisfactory to
Agent, as may hereafter be reasonably requested in writing by Agent to further
evidence and confirm such assignment. Nevertheless, subject to the terms of
this Section 5.1(z), Agent grants to Borrower a license to lease,
own, maintain, operate and manage the Property and to collect, use and apply
the Rent, which license is revocable only upon the occurrence and during the
continuance of an Event of Default under this Agreement. Any portion of the
Rents held by Borrower shall be held in trust for the benefit of Agent for use
in the payment of the Indebtedness. Upon the occurrence of an Event of Default
and during the continuance thereof, the license granted to Borrower herein
shall automatically be revoked, and Agent shall immediately be entitled to
possession of all Rents, whether or not Agent enters upon or takes control of
the Property. Agent is hereby granted and assigned by Borrower the 

 

96

 

right, at its option, upon
revocation of the license granted herein, to enter upon the Property in person,
by agent or by court-appointed receiver to collect the Rents. Any Rents
collected after the revocation of the license shall be applied toward payment
of the Indebtedness as set forth in Section 3.8 hereof.

 

(ii)           All Leases entered into by Borrower shall provide
for rental rates comparable to then-existing local market rates and terms and
conditions commercially reasonable and consistent with then-prevailing local
market terms and conditions and otherwise in form and substance as is customary
for similar type properties. With respect to any Lease for more than the
greater of (x) 20% of the rentable square footage of the Property or (y) 20,000
square feet, Borrower shall not enter into such Lease, without the prior
written consent of Agent, such consent not to be unreasonably withheld or
delayed. Borrower shall furnish Agent with (1) detailed term sheets in
advance in the case of any Leases, modifications, amendments or renewals for
which Agent’s consent is required and (2) in the case of any other Leases,
modifications, amendments or renewals executed copies of such Leases upon
written request. All renewals or amendments or modifications of Leases that do
not satisfy the requirements of the first sentence of this Section 5.1(z)(ii) shall
be subject to the prior approval of Agent. All Leases executed after the date
hereof shall provide that they are subordinate to the Mortgage, and that the
lessee agrees to attorn to Agent. Borrower,

 

(A)          shall observe
and perform all of the material obligations imposed upon the lessor under the
Leases and shall not do or permit to be done anything to materially impair the
value of the Leases as security for the Indebtedness;

 

(B)           shall promptly
send copies to Agent of all written notices of default which Borrower shall
send or receive thereunder;

 

(C)           shall enforce
all of the material terms, covenants and conditions contained in the Leases
upon the part of the lessee thereunder to be observed or performed and shall
effect a termination or diminution of the obligations of tenants under leases,
only in a manner that a prudent owner of a similar property to the Property
would enforce such terms covenants and conditions or effect such termination or
diminution in the ordinary course of business;

 

(D)          shall not
collect any of the Rents more than one (1) month in advance;

 

(E)           shall not
execute any other assignment of lessor’s interest in the Leases or Rents; and

 

(F)           shall not
convey or transfer or suffer or permit a conveyance or transfer of the Property
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.

 

97

 

(iii)         Borrower shall deposit
security deposits of lessees which are turned over to or for the benefit of
Borrower or otherwise collected by or on behalf of Borrower, into an Eligible
Account with the same name as the Collection Account and shall not commingle
such funds with any other funds of Borrower. Any bond or other instrument which
Borrower is permitted to hold in lieu of cash security deposits under any
applicable Legal Requirements shall be maintained in full force and effect
unless replaced by cash deposits as hereinabove described, shall, if permitted
pursuant to Legal Requirements, name Agent as payee or mortgagee thereunder (or
at Agent’s option, be fully assignable to Agent) and shall, in all respects,
comply with any applicable Legal Requirements and otherwise be reasonably
satisfactory to Agent. Borrower shall, upon request, provide Agent with
evidence reasonably satisfactory to Agent of Borrower’s compliance with the
foregoing. Upon the occurrence and during the continuance of any Event of Default,
Borrower shall, upon Agent’s request, if permitted by any applicable Legal
Requirements, turn over to Agent the security deposits (and any interest
theretofore earned thereon) with respect to all or any portion of the Property,
to be held by Agent subject to the terms of the Leases.

 

(aa)         Maintenance of Property.  Borrower shall cause the Property to be
maintained in a good and safe condition and repair, subject to wear and tear
and damage caused by casualty or condemnation. The Improvements and the Equipment
shall not be removed, demolished or altered (except for normal replacement of
the Equipment, Improvements contemplated in an approved Operating Budget or
pursuant to Leases in effect from time to time or for removals, demolition or
alterations that cost up to $50,000) without the consent of the Agent which
consent shall not be unreasonably withheld. Except with respect to an Insured
Casualty which shall be governed by the terms and conditions provided herein,
Borrower shall, or shall cause any tenants obligated under their respective
Leases to, promptly repair, replace or rebuild any part of the Property that
becomes damaged, worn or dilapidated except where the failure to do so is not
reasonably likely to have a Material Adverse Effect. Borrower shall complete
and pay for any structure at any time in the process of construction or repair
on the Land. Borrower shall not initiate, join in, or consent to any change in
any private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses which may be made of the Property or
any part thereof which can be reasonably likely to result in a Material Adverse
Effect without consent of the Agent. If under applicable zoning provisions the
use of all or any portion of the Property is or shall become a nonconforming
use, Borrower will not cause or permit such nonconforming use to be
discontinued or abandoned if such discontinuance of abandonment would cause
such nonconforming use to no longer be permitted without the express written
consent of the Agent. Borrower shall not (i) change the use of the Land in
any material respect, (ii) permit or suffer to occur any waste on or to
the Property or to any portion thereof or (iii) take any steps whatsoever
to convert the Property, or any portion thereof, to a condominium or
cooperative form of management.

 

(bb)         Taxes on Security.  Borrower shall pay all taxes, charges,
filing, registration and recording fees, excises and levies payable with
respect to the Note or the Lien created or secured by the Loan Documents, other
than income, franchise and doing business taxes imposed on Agent, any Lender or
Collateral Agent. If there shall be enacted any law (1) deducting the Loan
from the value of the Collateral for the purpose of taxation, (2) affecting

 

98

 

Agent’s Lien on the Collateral or (3) changing existing laws of
taxation of mortgages, deeds of trust, security deeds, or debts secured by
realty, or changing the manner of collecting any such taxes, Borrower shall
promptly pay to Agent, on demand, all taxes, costs and charges for which Agent
is or may be liable as a result thereof; provided, however, if
such payment would be prohibited by law or would render the Loan usurious, then
instead of collecting such payment, Agent may declare all amounts owing under
the Loan Documents to be immediately due and payable.

 

(cc)         Ground Lease.

 

(i)           The Borrower shall pay,
promptly when due and payable, all Ground Rent. Upon notice from Agent, simultaneously
with the making of each and every payment of Ground Rent payable after the
delivery of such notice, the Borrower shall simultaneously deliver to Agent a
copy of the check in the amount of such payment delivered to the payee.

 

(ii)          The Borrower shall perform
and observe all terms, covenants, and conditions that Borrower is required to
perform and observe under the Ground Lease and do everything necessary to
preserve and to keep unimpaired and in full force and effect the Ground Lease.
The Borrower shall not permit the Ground Lease to go into default (whether or
not any cure period in the Ground Lease has expired).

 

(iii)         The Borrower shall enforce
the obligations of the applicable lessor under the Ground Lease so that the
Borrower may at all times enjoy all its rights, benefits and privileges under
the applicable Ground Lease.

 

(iv)         The Borrower shall not,
without Agent’s consent, cause, agree to, permit, or suffer to occur any Ground
Lease Impairment. Any Ground Lease Impairment made without Agent’s consent
shall be null, void, and of no force of effect. Any party entering into or
purportedly obtaining the benefit of such a purported Ground Lease Impairment
is hereby placed on notice that Borrower has no power or authority to cause,
consent, or agree to such Ground Lease Impairment without Agent’s consent.

 

(v)          The Borrower shall not,
without Agent’s consent, refuse to consent or consent to any action that any
lessor under a Ground Lease or any third party takes or desires to take under
or with respect to the Ground Lease.

 

(vi)         The Borrower shall promptly
deliver to Agent a copy of any notice of default or termination, or demands for
performance (other than routine bills for current Ground Rent) that it receives
from the lessor under the Ground Lease. The Borrower shall furnish to Agent all
information that Agent may request from time to time concerning the Ground
Lease and Borrower’s compliance with the Ground Lease. Borrower, immediately
upon learning that the lessor under the Ground Lease has failed to perform the
terms and provisions under the Ground Lease (including by reason of a rejection
or disaffirmance or purported rejection or disaffirmance of the Ground Lease
pursuant to any state or federal bankruptcy law), shall notify Agent thereof.
Promptly after the Advance Closing Date therefor, and again promptly after
execution of any 

 

99

 

amendment to the related
Mortgage, Borrower shall notify the applicable ground lessor of the execution
and delivery of the related leasehold Mortgage or such amendment. Such notice
shall set forth, verbatim, in a form satisfactory to Agent, all provisions of
the related leasehold Mortgage relating to Ground Lease Impairments. Agent
shall have the right, but not the obligation, to give any lessor under a Ground
Lease at any time any notice described in this paragraph or otherwise relating
to the related leasehold Mortgage or the Loan.

 

(vii)        The Borrower shall promptly
notify Agent of any request that any party to the Ground Lease makes for
arbitration or other dispute resolution procedure pursuant to the Ground Lease
and of the institution of any such arbitration or dispute resolution. The
Borrower hereby authorizes Agent to participate in any such arbitration or dispute
resolution. Such participation may, at Agent’s option, be to the exclusion of,
and in place of, the Borrower. The Borrower shall promptly deliver to Agent a
copy of the determination of each such arbitration or dispute resolution
mechanism.

 

(viii)       If Agent or its designee
shall acquire or obtain a New Ground Lease, then Borrower shall have no right,
title or interest whatsoever in or to such New Ground Lease, or any proceeds or
income arising from the estate arising under any such New Ground Lease, including
from any sale or other disposition thereof. Agent or its designee shall hold
such New Ground Lease free and clear of any right or claim of Borrower.

 

(ix)         Borrower shall not amend,
modify or cancel the Ground Lease.

 

(dd)         Monthly
Statements.  Borrower
shall furnish to Agent, not later than ten (10) days after the end of each
calendar month, a statement detailing the assets that have been financed by
Agent with the proceeds of an Advance and remain encumbered under the Loan, as
of the last day of the applicable calendar month.

 

(ee)         OFAC.  At all times throughout the term of the Loan,
Borrower and Guarantor and their respective Affiliates shall be in full
compliance with all applicable orders, rules, regulations and recommendations
of The Office of Foreign Assets Control of the U.S. Department of the Treasury.

 

ARTICLE
VI.

NEGATIVE COVENANTS

 

Section 6.1.            Negative Covenants.  Borrower covenants and agrees that, until
payment in full of the Indebtedness, it will not do, directly or indirectly,
any of the following unless Agent consents thereto in writing:

 

(a)           Liens on the Property.  Incur, create, assume, become or be liable in
any manner with respect to, or permit to exist, except as permitted by the
Mortgage, any Lien with respect to the Property, except:  (i) Liens in favor of the Lenders and (ii) the
Permitted Encumbrances.

 

100

 

(b)           Ownership and Transfer.  Except as expressly permitted by or pursuant
to this Agreement or the other Loan Documents, own any property of any kind
other than the Property, or Transfer the Property or any portion thereof.

 

(c)           Other Borrowings.  Incur, create, assume, become or be liable in
any manner with respect to Other Borrowings.

 

(d)           Dissolution; Merger or Consolidation.  Dissolve, terminate, liquidate, merge with or
consolidate into another Person.

 

(e)           Change In Business.  Cease to be a Single-Purpose Entity, or make
any material change in the scope or nature of its business objectives, purposes
or operations, or undertake or participate in activities other than the
continuance of its present business.

 

(f)            Debt Cancellation.  Cancel or otherwise forgive or release any
material claim or debt owed to Borrower by any Person, except for adequate
consideration or in the ordinary course of Borrower’s business.

 

(g)           Affiliate Transactions.  Enter into, or be a party to, any transaction
with an Affiliate of Borrower, except in the ordinary course of business and on
terms which are fully disclosed to Agent in advance and on terms which 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 (other than
the Management Agreement).

 

(h)           Creation of Easements.  Except as expressly permitted by or pursuant
to the Mortgage or this Agreement, create, or permit the Property or any part
thereof to become subject to, any easement, license or restrictive covenant,
other than a Permitted Encumbrance, provided, that the consent of Agent
shall not be unreasonably withheld or delayed to the extent that any such
easement, license or restrictive covenant is reasonably necessary for the
continued use, enjoyment, access to or operation of the applicable Property.

 

(i)            Misapplication of Funds.  Distribute any Rents or Moneys received from
Accounts in violation of the provisions of Section 3.12, or fail to
pledge any security deposit to Agent, or misappropriate any security deposit or
portion thereof.

 

(j)            Certain Restrictions.  Enter into any agreement that expressly restricts
the ability of Borrower to enter into amendments, modifications or waivers of
any of the Loan Documents.

 

(k)           Assignment of Licenses and Permits.  Assign or transfer any of its interest in any
Permits pertaining to the Property, or assign, transfer or remove or permit any
other Person to assign, transfer or remove any records pertaining to the
Property.

 

(l)            Place of Organization.  Change its jurisdiction of organization,
creation or formation, as applicable, without giving Agent at least fifteen (15)
days’ prior written notice thereof and promptly providing Agent such
information as Agent may reasonably request in connection therewith.

 

101

 

(m)          Leases.  Enter into, amend or cancel Leases, except as
permitted by or pursuant to or would not result in a violation of this
Agreement.

 

(n)           Management Agreement.  Except in accordance with this Agreement, (i) terminate
or cancel the Management Agreement, (ii) consent to either the reduction
of the term of or the assignment of the Management Agreement, (iii) increase
or consent to the increase of the amount of any charges under the Management
Agreement, or (iv) otherwise modify, change, supplement, alter or amend,
or waive or release any of its rights and remedies under, the Management
Agreement in any material respect.

 

(o)           Plans and Welfare Plans.  Knowingly engage in or permit any transaction
in connection with which Borrower or any ERISA Affiliate could be subject to
either a material civil penalty or tax assessed pursuant to Section 502(i) or
502(1) 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 beyond
his or her retirement or other termination of service other than (i) coverage
mandated by applicable law, (ii) death or disability benefits that have
been fully provided for by paid up insurance or otherwise or (iii) severance
benefits (unless such coverage is provided after notification of and with the
reasonable approval of Agent), permit the assets of Borrower 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 Plan or Welfare
Plan, 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 or any ERISA Affiliate.

 

(p)           Transfer of Ownership Interests.  Permit any Transfer of a direct or indirect
ownership interest or voting right in Borrower, other than (i) as
contemplated in Section 3.11 above, or (ii) a Permitted
Transfer.

 

(q)           Equipment and Inventory.  Except pursuant to the Management Agreement,
permit any Equipment owned by Borrower to be removed at any time from the
Property unless the removed item is consumed or sold in the usual and customary
course of business, removed temporarily for maintenance and repair or, if
removed permanently, replaced by an article of equivalent suitability and not
materially less value, owned by Borrower free and clear of any Lien.

 

(r)            Management Fees.  Pay Borrower or any Affiliate of Borrower any
management fees with respect to the Property except as contemplated by the
Management Agreement.

 

(s)           Prohibited Persons.  With respect to Borrower and Guarantor and
any of their respective officers, directors, shareholders, partners, members or
Affiliates, if applicable (including, without limitation, the indirect holders
of equity interests in Borrower and Guarantor): 
(i) conduct any business, nor engage in any transaction or dealing,
with any Prohibited Person, including, but not limited to, the making or
receiving of any contribution of 

 

102

 

funds, goods, or services, to or for the benefit of
a Prohibited Person; or (ii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in EO13224.

 

ARTICLE
VII.

EVENT OF DEFAULT

 

Section 7.1.            Event of Default.  The occurrence of one or more of the
following events shall be an “Event of Default” hereunder:

 

(a)           if on any Payment Date Borrower fails to pay any
accrued and unpaid interest on the Loan then due and payable or any principal
payment amount then due and payable in accordance with the provisions of Section 3.7
hereof;

 

(b)           if Borrower fails (a) to pay (1) the
outstanding Indebtedness on the Maturity Date or (2) the fees then due and
payable to Collateral Agent pursuant to the Fee Letter on any Payment Date; or (b) to
deposit into the Collection Account, the amount required pursuant to Section 3.7(b),
respectively;

 

(c)           if Borrower fails to make any required deposit to a
Reserve Account or to pay any other amount payable pursuant to this Agreement
or any other Loan Document when due and payable in accordance with the
provisions hereof or thereof, as the case may be, and such failure continues
for ten (10) days after Agent delivers written notice thereof to Borrower;

 

(d)           if any representation or warranty made herein or in
any other Loan Document, or in any report, certificate, financial statement or
other Instrument, agreement or document furnished by Borrower, General Partner,
4200 Holdings or Guarantor in connection with this Agreement, the Note, the
Guaranty or any other Loan Document executed and delivered by any Borrower,
General Partner, 4200 Holdings or Guarantor shall be false in any material
respect as of the date such representation or warranty was made (or if such
representation or warranty relates to an earlier date, then as of such earlier
date);

 

(e)           if Borrower, General Partner, 4200 Holdings or the
Guarantor makes an assignment for the benefit of creditors;

 

(f)            if a receiver, liquidator or trustee shall be
appointed for Borrower or the Guarantor or if Borrower or the 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 or the Guarantor, or if any proceeding for the
dissolution or liquidation of Borrower or the Guarantor shall be instituted; provided,
however, that if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Borrower or the Guarantor, upon the
same not being discharged, stayed or dismissed within ninety (90) days, or if
Borrower or the Guarantor shall generally not be paying its debts as they
become due;

 

(g)           if Borrower, General Partner, 4200 Holdings or
Guarantor attempts to delegate its obligations or assign its rights under this
Agreement, the Guaranty, any of the other 

 

103

 

Loan Documents or any interest herein or therein, or if any Transfer
occurs other than in accordance with or as permitted under this Agreement;

 

(h)           if any provision of the Organizational Agreement
affecting the purpose for which the Borrower, 4200 Holdings or General Partner
is formed is amended or modified in any material respect which is reasonably
likely to adversely affect the Lenders, Agent or Collateral Agent, or if
Borrower, 4200 Holdings or General Partner fails to perform or enforce the
provisions of the Organizational Agreement and such failure has a Material
Adverse Effect or attempts to dissolve Borrower without Agent’s consent;

 

(i)            if an Event of Default as defined or described in
the Note or any other Loan Document occurs, whether as to Borrower or the
Property or any portion thereof;

 

(j)            if Borrower fails to maintain any insurance required
to be maintained pursuant to Section 5.1(x) hereof;

 

(k)           if Guarantor shall fail to observe any of the
financial covenants set forth in Paragraph 2 of the Guaranty, shall fail to pay
the amount specified in Paragraph 1(ii) of the Guaranty when and if due
thereunder or the Guaranty shall have been terminated or rendered invalid for
any reason;

 

(l)            if any governmental, regulatory, or self-regulatory
authority shall have removed, restricted, suspended or terminated the rights,
privileges, or operations of Borrower or Guarantor which has a Material Adverse
Effect on the financial condition or business operations of either of them;

 

(m)          if an unappealable final judgment by any competent
court in the United States of America for the payment of money in an amount
greater than $250,000 shall have been rendered against Borrower or, an
unappealable final judgment by any competent court in the United States of
America for the payment of money in an amount greater than $5 million shall
have been rendered against the Guarantor and, in each case, remained
undischarged or unpaid for a period of sixty (60) days, during which period execution
of such judgment is not effectively stayed by bonding over or other means
acceptable to Agent;

 

(n)           if Guarantor shall have defaulted or failed to
perform under any note, indenture, loan agreement, guaranty, swap agreement or
any other contract, agreement or transaction to which it is a party, which
default (A) involves the failure to pay a monetary obligation in an amount
greater than $5 million, or (B) results in the acceleration of the
maturity of obligations by any other party to or beneficiary of such note,
indenture, loan agreement, guaranty, swap agreement or other contract agreement
or transaction; provided, however, that any such default, failure to
perform or breach shall not constitute an Event of Default if Guarantor cures
such default, failure to perform or breach, as the case may be, within the
greater of thirty (30) days or the grace period, if any, provided under the
applicable agreement; and

 

(o)           if Borrower or Guarantor shall fail to perform any
of the terms, covenants or conditions of this Agreement, the Note, the
Mortgage, the Guaranty or the other Loan Documents, other than as specifically
otherwise referred to above in this definition of “Event of 

 

104

 

Default,” for ten (10) days after notice to Borrower or Guarantor,
as applicable, from Agent or its successors or assigns, in the case of any
Default which can be cured by the payment of a sum of money (other than Events
of Default pursuant to Sections 7.1(a) and 7.1(b) above as
to which the grace period, if any, set forth therein is applicable), or for
thirty (30) days after notice from Agent or its successors or assigns, in the
case of any other Default (unless a longer notice period is otherwise provided
herein or in such other Loan Document); provided, however, that
if such non-monetary Default is susceptible of cure but cannot reasonably be
cured within such thirty (30) day period and such Borrower or Guarantor, as
applicable, shall have commenced to cure such Default within such thirty (30)
day period and thereafter diligently and expeditiously proceeds to cure the
same, such thirty (30) day period shall be extended for an additional thirty
(30) days;

 

then, upon the occurrence of any such Event of
Default and at any time thereafter, Agent or Collateral Agent or its successors
or assigns, may, in addition to any other rights or remedies available to it
pursuant to this Agreement, the Guaranty and the other Loan Documents, or at
law or in equity, take such action, without further notice or demand, as Agent
on behalf of the Lenders or its successors or assigns, deems advisable to
protect and enforce its rights against Borrower or Guarantor, as applicable,
and in and to all or any portion of the Collateral (including, without limitation,
declaring the entire Indebtedness to be immediately due and payable) and may
enforce or avail itself of any or all rights or remedies provided in the Loan
Documents against Borrower, Guarantor and/or the Collateral (including, without
limitation, all rights or remedies available at law or in equity).

 

Section 7.2.            Remedies.

 

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

 

(b)           In the event of the foreclosure or other action by
Agent or Collateral Agent to enforce Agent’s remedies in connection with all or
any portion of the Collateral, Agent shall apply all Net Proceeds received to
repay the Indebtedness in accordance with Section 3.8, the
Indebtedness shall be reduced to the extent of such Net Proceeds and the
remaining portion of the Indebtedness shall remain outstanding and secured by
the Loan Documents, it being understood and agreed by Borrower that Borrower is
liable for the repayment of all the Indebtedness; provided, however,
that the Note shall be deemed to have been accelerated only to the extent of
the Net Proceeds actually received by Agent with respect to the Collateral and 

 

105

 

applied in reduction of the Indebtedness evidenced by the Note in
accordance with the provisions of this Agreement, after payment by Borrower of
all Transaction Costs and costs of enforcement.

 

(c)          Upon and during the continuation of an Event of
Default, the Agent shall have the right, but not the obligation, with respect
to any and all bankruptcy proceedings that are now or hereafter commenced in
connection with the Property, to (i) vote to accept or reject any plans of
reorganization, (ii) vote in any election of a trustee, (iii) elect
the treatment of secured claims as specified in Section 1111(b) of
the Bankruptcy Code, and (iv) make any other decisions requested of
holders of claims or interests that the Borrower would have had the right to do
in such bankruptcy proceedings in the absence of an Event of Default.

 

Section 7.3.            Remedies Cumulative.  The rights, powers and remedies of Agent,
Collateral Agent, or any Lender under this Agreement shall be cumulative and
not exclusive of any other right, power or remedy which Agent, Collateral Agent
or any Lender may have against Borrower pursuant to this Agreement or the other
Loan Documents executed by or with respect to Borrower, or existing at law or
in equity or otherwise. Agent or any Lender’s rights, powers and remedies may
be pursued singly, concurrently or otherwise, at such time and in such order as
Agent may determine in Agent’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 any Default or Event of
Default shall not be construed to be a waiver of any subsequent Default or Event
of Default or to impair any remedy, right or power consequent thereon.
Notwithstanding any other provision of this Agreement, Agent for the benefit of
the Lenders reserves the right to seek a deficiency judgment or preserve a
deficiency claim, in connection with the foreclosure of the Mortgage on the
Property, to the extent necessary to foreclose on other parts of the
Collateral.

 

Section 7.4.            Curative Advances.  If any Event of Default occurs and is not
cured by Borrower after notice from the Agent, then Agent or Collateral Agent
may expend such sums as either shall reasonably deem appropriate to cure or
attempt to cure such Event of Default. Borrower shall immediately repay all
such sums so advanced, which sums shall immediately become part of the Indebtedness,
bear interest at the Default Rate from the date advanced until the date repaid,
and be secured by all Collateral.

 

ARTICLE
VIII.

MISCELLANEOUS

 

Section 8.1.            Survival.  This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the execution and delivery of this Agreement, the
making by the initial Lender of the Loan hereunder and the execution and
delivery by Borrower to the initial Lender of the Loan Documents, and shall
continue in full force and effect so long as any portion of the Indebtedness is
outstanding and unpaid. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and assigns
of such party. All covenants, promises and agreements in this Agreement
contained, by or on behalf of Borrower, shall inure to the benefit of the
respective successors and assigns of Agent and each Lender. Nothing in this
Agreement or in any other Loan Document, express or implied, shall give to any 

 

106

 

Person other than the parties and the holder of the Note and the other
Loan Documents, and their legal representatives, successors and assigns, any
benefit or any legal or equitable right, remedy or claim hereunder.

 

Section 8.2.            Agent’s Discretion.  Whenever pursuant to this Agreement, Agent
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Agent, the decision of Agent 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 Agent and shall be final and conclusive.

 

Section 8.3.            Governing Law.

 

(a)           This Agreement was negotiated in New York and made
by the initial Lender and accepted by Borrower in the State of New York, and
the proceeds of the Note delivered pursuant hereto were disbursed from 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 limitation, matters of construction, validity, performance,
and maximum permissible rates of interest), 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 and any applicable law of the United States of America.

 

(b)           Any legal suit, action or proceeding against the
Lenders or Borrower arising out of or relating to this Agreement may be
instituted in any federal or state court in New York, New York. Borrower hereby
(i) irrevocably waives, to the fullest extent permitted by applicable law,
any objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum, and (ii) irrevocably submits to the jurisdiction of any such court
in any such suit, action or proceeding. Borrower does hereby designate and
appoint National Registered Agents Inc. 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
(or at such other office in New York, New York as may be designated by Borrower
from time to time in accordance with the terms hereof) with a copy to Borrower
at its principal executive offices, and written notice of said service of
Borrower 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 Agent of any change in 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 office
shall be designated as the address for service of process), and (iii) shall
promptly designate such a substitute if its authorized agent ceases to have an
office in New York, New York or is dissolved without leaving a successor.

 

Section 8.4.            Modification, Waiver in Writing.  No modification, amendment, extension,
discharge, termination or waiver of any provision of this Agreement or any
other Loan Document, or consent or waiver referred to in any Loan Document or
consent to any departure 

 

107

 

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 8.5.            Delay Not a Waiver.  Neither any failure nor any delay on the part
of Agent or any 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, or any other instrument
given as security therefor, shall operate as or constitute a waiver thereof,
nor shall a single or partial exercise thereof preclude any other future
exercise, or the exercise of any other right, power, remedy or privilege. In
particular, and not by way of limitation, by accepting payment after the due
date of any amount payable under this Agreement, the Note or any other Loan
Document, Agent and each Lender shall not be deemed to have waived any right
either to require prompt payment when due of all other amounts due under this
Agreement, the Note or the other Loan Documents, or to declare a default for
failure to effect prompt payment of any such other amount.

 

Section 8.6.            Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, or (b) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, and by facsimile transmission, addressed if
to Lender at its address set forth on the first page hereof,
Attention:  Chris Tognola/Tom Traynor, if
to Collateral Agent at its address set forth on the first page hereof,
Attention:  Rachel Kahsen, and if to
Borrower at its addresses set forth on the first page hereof,
Attention:  President and Office of the
General Counsel, with a copy to Clifford Chance US LLP, 31 West 52nd Street,
New York, New York 10019, Attn: Tony Lopez, Esq., or at such other address
and Person as shall be designated from time to time by any party hereto, as the
case may be, in a written notice to the other parties hereto in the manner
provided for in this Section 8.6. A notice shall be deemed to have
been given:  in the case of hand
delivery, at the time of delivery; in the case of registered or certified mail,
when delivered or three Business Days after mailing; or in the case of
expedited prepaid delivery and facsimile transmission, on the Business Day
after the same was sent. A party receiving a notice which does not comply with
the technical requirements for notice under this Section 8.6 may
elect to waive any deficiencies and treat the notice as having been properly
given.

 

Section 8.7.            TRIAL BY JURY.  BORROWER, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY
DO SO, WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS
AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS.

 

Section 8.8.            Headings.  The Article and Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.

 

108

 

Section 8.9.            Assignment.

 

(a)           Borrower may not sell,
assign or transfer any interest in the Loan Documents, or any portion of the
foregoing (including, without limitation, Borrower’s rights, title, interests,
remedies, powers and duties hereunder and thereunder) without Agent’s prior
written consent.  Each Lender shall have
the right to assign or participate this Agreement and/or its interest in any of
the other Loan Documents and the obligations hereunder to any Person. In the
event of an assignment by any Lender, (a) the assignee shall have, to the
extent of such assignment, the same rights, benefits and obligations as it
would have if it were an original “Lender” hereunder; (b) the assignee
shall be deemed for all purposes to be a “Lender” hereunder; and (c) upon
any such substitution of Lender, a replacement or addition “Lender signature
page” shall be executed by the new Lender and attached to this Agreement and
thereupon become a part of this Agreement. After the effectiveness of any
assignment, the new Lender shall provide notice to Borrower of the identity,
address and other pertinent information pertaining to the new Lender.
Notwithstanding anything in this Agreement to the contrary, after an assignment
by any Lender, the “Lender” (prior to such assignment) shall continue to have
the benefits of any rights or indemnifications and shall continue to have the
obligations contained herein which such Lender had during the period such party
was a “Lender” hereunder. Borrower shall not be obligated to interact directly
with any participant in the Loan or to pay or reimburse the Agent or any Lender
for any Transaction Costs that would not have been incurred by the Agent or
such Lender had no such participation in the Loan been issued.

 

(b)           The Agent may from time
to time elect to enter into a servicing agreement with a servicer, pursuant to
which the servicer shall be appointed to service and administer the Loan and
the Account Collateral in accordance with the terms hereof and to exercise any
and all other rights of the Lenders with respect to the Loan as set forth in
such servicing agreement. The Agent shall promptly notify the Borrower if the
Agent shall elect to appoint or change the servicer, and all notices and other
communications from the Borrower to the Agent shall be delivered to the
servicer with a copy concurrently delivered to the Agent, and any notice,
direction or other communication from the servicer to the Borrower shall have
the same force and effect as a notice, direction or communication from the
Agent. The servicer shall be entitled to be reimbursed for any cost, expense or
liability which is incurred by the servicer pursuant to such servicing and
administrative duties and which would otherwise be reimbursable to the Lenders
under this Agreement or any other Loan Document in the same manner and to the
same extent as if the Lenders incurred such cost, expense or liability in the
first place. The parties hereto acknowledge and agree that the servicer shall
be a third party beneficiary to this Agreement and the other Loan Documents.

 

Section 8.10.          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 8.11.          Preferences.  Agent and the Lenders shall have no
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the obligations of Borrower pursuant to
this Agreement, the Note or any other Loan 

 

109

 

Document. The Lenders shall have the continuing and exclusive right to
apply or reverse and reapply any and all payments by Borrower to any portion of
the obligations of Borrower hereunder, provided that such application or
reapplication is performed by the Lenders in accordance with the terms of this
Agreement or any other applicable Loan Document. To the extent Borrower makes a
payment or payments to Agent or any Lender for Borrower’s benefit, 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 Agent or such Lender.

 

Section 8.12.          Waiver of Notice.  Borrower shall not be entitled to any notices
of any nature whatsoever from Agent, any Lender or Collateral Agent except with
respect to matters for which this Agreement or another Loan Document
specifically and expressly provides for the giving of notice by Agent, such
Lender and/or Collateral Agent to Borrower and except with respect to matters
for which Borrower is not, pursuant to applicable Legal Requirements, permitted
to waive the giving of notice. Borrower hereby expressly waives the right to
receive any notice from Agent, any Lender and Collateral Agent with respect to
any matter for which this Agreement or the other Loan Documents does not
specifically and expressly provide for the giving of notice by Agent or such
Lender or Collateral Agent to Borrower.

 

Section 8.13.          Failure to Consent.  If Borrower shall seek the approval by or
consent of Agent or the Lenders hereunder or under the Note, or any of the
other Loan Documents, and Agent or the Lenders shall fail or refuse to give
such consent or approval, then Borrower shall not be entitled to any damages
for any withholding or delay of such approval or consent by Agent or the
Lenders, it being intended that Borrower’s sole remedy shall be to bring an
action for an injunction or specific performance.

 

Section 8.14.          Schedules
Incorporated.  The information set
forth on the cover, heading and recitals hereof, and the Schedules attached
hereto, are hereby incorporated herein as a part of this Agreement with the
same effect as if set forth in the body hereof.

 

Section 8.15.          Offsets,
Counterclaims and Defenses.  Any
assignee of any 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 this Agreement and the other Loan Documents
which Borrower may otherwise have against any assignor or this Agreement and
the other Loan Documents. 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 Agreement or upon any other Loan Document. 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 8.16.          No Joint Venture or
Partnership.  Borrower, Agent and
each Lender intend that the relationship created hereunder be solely that of
borrower and lender. Nothing herein is intended to create a joint venture,
partnership, tenancy-in-common, or joint 

 

110

 

tenancy relationship between Borrower and any Lender nor to grant any
Lender any interest in the Collateral other than that of secured party,
mortgagee or lender.

 

Section 8.17.          Waiver of Marshalling
of Assets Defense.  To the fullest
extent Borrower may legally do so, Borrower waives all rights to a marshalling
of the assets of Borrower, and others with interests in Borrower, and of the
Collateral, or to a sale in inverse order of alienation in the event of
foreclosure of the interests hereby created, and agrees not to assert any right
under any laws pertaining to the marshalling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the
right of any Lender under the Loan Documents to a sale of any Collateral for
the collection of the Indebtedness without any prior or different resort for
collection, or the right of any Lender to the payment of the Indebtedness out
of the Net Proceeds of the Collateral in preference to every other claimant
whatsoever.

 

Section 8.18.          Waiver of
Counterclaim.  To the extent
permitted by applicable law, Borrower hereby waives the right to assert a
counterclaim, other than compulsory counterclaim, in any action or proceeding
brought against it by Agent or its agents.

 

Section 8.19.          Conflict;
Construction of Documents.  In the
event of any conflict between the provisions of this Agreement and the
provisions of any of the other Loan Documents, the provisions of this Agreement
shall prevail. The parties hereto acknowledge that they were represented by
counsel in connection with the negotiation and drafting of the Loan Documents
and that the Loan Documents shall not be subject to the principle of construing
their meaning against the party that drafted same.

 

Section 8.20.          Brokers and Financial
Advisors.  Borrower and the initial
Lender hereby represent that they have dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement. Borrower and initial Lender
hereby agree to indemnify and hold the other and Collateral Agent harmless from
and against any and all claims, liabilities, costs and expenses of any kind in
any way relating to or arising from a claim by any Person that such Person
acted on behalf of the indemnifying party in connection with the transactions
contemplated herein. The provisions of this Section 8.20 shall
survive the expiration and termination of this Agreement and the repayment of
the Indebtedness.

 

Section 8.21.          Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

 

Section 8.22.          Estoppel Certificates.  Agent, Borrower and each Lender hereby agree
at any time and from time to time upon not less than fifteen (15) days prior
written notice by Borrower or such Lender to execute, acknowledge and deliver
to the party specified in such notice, a statement, in writing, certifying that
this Agreement is unmodified and in full force and effect (or if there have
been modifications, that the same, as modified, is in full force and effect and
stating the modifications hereto), and stating whether or not, to the knowledge
of such certifying party, any Default or Event of Default has occurred and is
then continuing, and, if so, specifying each such Default or Event of Default; provided,
however, that it shall be a condition 

 

111

 

precedent to any Lender’s obligation to deliver the statement pursuant
to this Section 8.22, that such Lender shall have received,
together with Borrower’s request for such statement, an Officer’s Certificate
stating that, to the knowledge of Borrower, no Default or Event of Default
exists as of the date of such certificate (or specifying such Default or Event
of Default).

 

Section 8.23.          Payment of Expenses.  Borrower shall pay all Transaction Costs,
which shall include, without limitation, (a) reasonable out-of-pocket
costs and expenses of Agent in connection with (i) the negotiation,
preparation, execution and delivery of the Loan Documents and the documents and
instruments referred to therein; (ii) the creation, perfection or
protection of Lenders’ Liens in the Collateral (including, without limitation,
fees and expenses for title and lien searches or amended or replacement
Mortgages, UCC financing statements or Collateral Security Instruments, title
insurance premiums and filing and recording fees, third party due diligence
expenses for the Property plus travel expenses, accounting firm fees, costs of
the Appraisals, Environmental Reports (and an environmental consultant), and
the Engineering Reports and costs and fees incurred in connection with
arranging, setting up, servicing and maintaining the Account Collateral); (iii) the
negotiation, preparation, execution and delivery of any amendment, waiver,
restructuring or consent relating to any of the Loan Documents, and (iv) the
preservation of rights under and enforcement of the Loan Documents and the
documents and instruments referred to therein, including any communications or
discussions relating to any action that Borrower shall from time to time
request Agent to take, as well as any restructuring or rescheduling of the
Indebtedness, (b) the reasonable fees, expenses and other charges of
counsel to Agent in connection with all of the foregoing, (c) all
reasonable fees and expenses of each of the servicer appointed pursuant to Section 8.9(b) and
Collateral Agent and its respective counsel and (d) Agent’s (or, where
reasonably deemed necessary by Agent, any other Lender’s) reasonable
out-of-pocket travel expenses in connection with site visits to the Property.

 

Section 8.24.          Non-Recourse.  Anything contained herein, in the Note or in
any other Loan Document to the contrary notwithstanding, no recourse shall be had
for the payment of the principal or interest on the Loan or for any other
Indebtedness, obligation or liability hereunder or under any other Loan
Document or for any claim based hereon or thereon or otherwise in respect
hereof or thereof against (i) any agent, contractor, director, officer,
member, consultant, manager, stockholder, subscriber to capital stock,
incorporator, beneficiary, participant, trustee or advisor of Borrower, or any
partner or member therein; (ii) any legal representative, heir, estate,
successor or assign of any thereof; (iii) any corporation (or any officer,
director, employee or shareholder thereof), limited liability company (or
member thereof), partnership (or any partner thereof), individual or entity to
which any ownership interest in Borrower shall have been directly or indirectly
transferred; (iv) any purchaser of any asset of Borrower; or (v) any
other Person (except Borrower and Guarantor), for any deficiency or other sum
owing with respect to the Note or any other Indebtedness, obligation or
liability or arising under this Agreement or any Loan Document. It is
understood that neither the Note nor any other Indebtedness, obligation or
liability under or with respect to this Agreement and any other Loan Document
may be enforced against any Person described in clauses (i) through
(v) above; provided, however, that the foregoing
provisions of this paragraph shall not:

 

(A)          prevent recourse to Borrower and Guarantor,
the assets of Borrower and Guarantor, the Property or any other instrument or
document which 

 

112

 

is pledged by Borrower to the Lenders pursuant to the Loan Documents,
including all Collateral;

 

(B)           have any applicability whatsoever to the
collateral pledged pursuant to the Pledge Agreement or limit the liability of
the parties under the Guaranty or the liability of the parties thereunder; or

 

(C)           constitute a waiver, release or discharge of
any indebtedness or obligation evidenced by the Note or secured by the Loan Documents,
and the same shall continue until paid or discharged in full.

 

ARTICLE IX.

THE AGENT

 

Section 9.1.            Appointment, Powers
and Immunities.  Each Lender hereby
irrevocably appoints and authorizes Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated
to Agent by the terms of this Agreement and of the other Loan Documents,
together with such other powers as are reasonably incidental thereto. Agent
(which term as used in this sentence and in Section 9.5 and the
first sentence of Section 9.6 hereof shall include reference to its
Affiliates and its own and its Affiliates’ officers, directors, employees and
agents):  (a) shall have no duties
or responsibilities to the Lenders except those expressly set forth in this
Agreement and in the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Lender; (b) shall
not be responsible to the Lenders for any recitals, statements, representations
or warranties contained in this Agreement or in any other Loan Document, or in
any certificate or other document referred to or provided for in, or received
by any of them under, this Agreement or any other Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or any other document referred to or
provided for herein or therein or for any failure by Borrower, or any other
Person to perform any of their obligations hereunder or thereunder; (c) shall
not be required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Loan Document; and (d) shall not be
responsible to the Lenders for any action taken or omitted to be taken by it
hereunder or under any other Loan Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or willful
misconduct. Agent may employ agents and attorneys-in-fact and shall not be
responsible to the Lenders for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it in good faith.

 

Section 9.2.            Reliance by Agent.  Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation,
any thereof by telephone, facsimile transmission, telex, electronic mail, or
cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by Agent
in good faith. As to any matters not expressly provided for by this Agreement
or any other Loan Document, Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder or thereunder in accordance
with the instructions given by all of the Lenders, 

 

113

 

and such instructions of such Lenders and any action taken or failure
to act pursuant thereto shall be binding on all of the Lenders.

 

Section 9.3.            Defaults.  Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default or Event of Default unless Agent has
received written notice from a Lender or Borrower specifying such Default and
stating that such notice is a “Notice of Default”. In the event that Agent
receives such a notice of the occurrence of a Default or Event of Default,
Agent shall give prompt notice thereof to the Lenders. Agent shall (subject to Section 9.7
hereof) take such action with respect to such Default or Event of Default as
shall be directed by all Lenders, provided that, unless and until Agent
shall have received such directions, Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interest of
the Lenders except to the extent that this Agreement expressly requires that
such action be taken, or not be taken, only with the consent or upon the
authorization of all of the Lenders.

 

Section 9.4.            Rights as a Lender.  With respect to the Loan made by it, Agent in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and my exercise the same as though it were not
acting as Agent, and the term “Lender” or “Lenders” shall, unless
the context otherwise indicates, include Agent in its individual capacity.
Agent and its affiliates may (without having to account therefor to any Lender)
lend money to, make investments in and generally engage in any kind of business
with Borrower or any of their Affiliates as if it were not acting as Agent, and
Agent and its Affiliates may accept fees and other consideration from Borrower
or such Affiliate for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders.

 

Section 9.5.            Indemnification.  The Lenders agree to indemnify Agent (to the
extent not reimbursed by Borrower, but without limiting the obligations of
Borrower under the Loan Documents) ratably in accordance with their respective
interests in the Loan, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against Agent (including by any Lender) arising out of or by reason of
any investigation in or in any way relating to or arising out of this Agreement
or any other Loan Document or any other documents contemplated by or referred
to herein or therein or the Transaction (including, without limitation, the
costs and expenses that Borrower is obligated to pay under the Loan Documents,
but excluding, unless a Default or Event of Default has occurred and is
continuing, normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the party to be indemnified.

 

Section 9.6.            Non-Reliance on
Agent and Other Lenders.  Each Lender
agrees and acknowledges that it has, independently and without reliance on
Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of Borrower and its own
decision to enter into this Agreement and that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or under any other 

 

114

 

Loan Document. Agent shall not be required to keep itself informed as
to the performance or observance by Borrower of this Agreement or any of the
other Loan Documents or to inspect the properties or books of Borrower or any
of their Affiliates. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by Agent
hereunder, Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the affairs, financial
condition or business of Borrower or any of their Affiliates that may come into
the possession of Agent or any of its Affiliates.

 

Section 9.7.            Failure to Act.  Except for action expressly required of Agent
hereunder and under the other Loan Documents, Agent shall in all cases be fully
justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from the Lenders of their
indemnification obligations under Section 9.5 hereof against any
and all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.

 

Section 9.8.            Resignation of
Agent.  Subject to the appointment
and acceptance of a successor Agent as provided below, Agent may resign upon
giving notice thereof to the Lenders; provided, however, that
such resignation shall not be effective until such time as the successor Agent
is in place and shall deliver written notice of such appointment to Borrower.
Upon any such resignation, the Lenders shall have the right to appoint a
successor Agent, subject to, if an Event of Default has not occurred and is not
continuing, the consent of the Borrower, such consent not to be unreasonably
withheld, delayed or conditioned. If no successor Agent shall have been so
appointed by the Lenders and shall have accepted such appointment within 30
days after the retiring Agent’s giving of notice of resignation, then the
retiring Agent may, on behalf of the Lenders appoint a successor Agent, that
shall be a sophisticated financial institution. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent’s
resignation hereunder as Agent, the provisions of this Article IX
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.

 

Section 9.9.            Agency Fee.  Each Lender will pay to Agent an agency fee
as may be agreed upon between such Lender and Agent. Borrower shall not be
liable for the payment of such fee.

 

Section 9.10.          Consents under Loan
Documents.  Agent may consent to any
modification, supplement or waiver under any of the Loan Documents, provided
that, without the prior consent of each Lender, Agent shall not release any
Collateral or otherwise terminate any Lien under any Loan Document providing
for collateral security, or agree to additional obligations being secured by
such collateral security (unless the Lien for such additional obligations shall
be junior to the Lien in favor of the Obligations), except that no such consent
shall be required, and Agent is hereby authorized, to release any Lien covering
Collateral that is the subject of a disposition permitted hereunder.

 

115

 

Section 9.11.          Notices, Reports and
Other Communications.  Agent shall
provide, at its expense, copies of each notice, report, document,
correspondence or other written communication delivered to Agent by Borrower or
any Affiliate of Borrower pursuant to any Loan Document, to each Lender
identified in such notice, report, document, correspondence or other written
communication or reasonably determined by Agent to be entitled thereto or
affected thereby, as soon as practicable after Agent’s receipt thereof.

 

116

 

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

 

	
   

  	
  AGENT AND INITIAL LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG, CAYMAN ISLANDS 

  BRANCH, a Cayman Islands Branch of a Foreign 

  Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher
  E. Tognola

  
	
   

  	
   

  	
  Name:  Christopher E. Tognola

  
	
   

  	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary
  Brundage

  
	
   

  	
   

  	
  Name:  Mary Brundage

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOLDING COMPANY BORROWERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST STATES INVESTORS DB I, L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Levine

  
	
   

  	
  Name: 

  	
  Andrew Levine

  
	
   

  	
  Title: 

  	
  Corporate Secretary and Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRST STATES INVESTORS DB I B, L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Levine

  
	
   

  	
  Name: 

  	
  Andrew Levine

  
	
   

  	
  Title: 

  	
  Corporate Secretary and Vice President

  
							

 

 

	
   

  	
  CURRENT PROPERTY OWNING BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRST STATES INVESTORS DB I TRS, L.P.,

  a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Levine

  
	
   

  	
  Name:   Andrew Levine

  
	
   

  	
  Title:    Corporate Secretary and Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST STATES INVESTORS DB I SP, L.P.,

  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Levine

  
	
   

  	
  Name:   Andrew Levine

  
	
   

  	
  Title:    Corporate Secretary and Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST STATES INVESTORS 4200, LLC,

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Levine

  
	
   

  	
  Name:   Andrew Levine

  
	
   

  	
  Title:    Corporate Secretary and Vice President

  
				

 

2

 

	
   

  	
  COLLATERAL AGENT:

  
	
   

  	
   

  
	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION, a 

  
	
   

  	
  national banking association (as Collateral Agent for 

  
	
   

  	
  the Lenders only)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rachel
  M. Kahsen

  
	
   

  	
   

  	
  Name:  Rachel M. Kahsen

  
	
   

  	
   

  	
  Title:  Assistant Vice President

  

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]