Document:

exv10w2

 

Exhibit 10.2

Tax Map Parcel Number
016-3-01-0040, 015-4-01-0034B and 016-3-01-0032-D

This Instrument is partially exempt from recording tax pursuant to Va. Code
Ann. Subsection 58.1-803D. The purpose of this Instrument is to partially
refinance the terms of an existing debt with the same lender, which partial
debt in the amount of $46,000,000.00 is secured by a deed of trust recorded in
the Clerk’s Office of the Circuit Court of Fairfax County, Virginia, in Deed
Book 18421 at page 661 on which tax imposed by Section 58.1-803 has been paid
in the amount of $79,733.33. Recording tax is due on the additional
indebtedness of $54,000,000.00 in the amount of $133,600.00.

REPUBLIC PARK LLC

(Grantor/Borrower)

to

ROSS C. REEVES, ESQ. AND STEPHEN W. BREWER, ESQ.

(Grantee/Trustee)

in favor of

KEYBANK NATIONAL ASSOCIATION,

a national banking association

(Grantee/Lender)

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT, AND FIXTURE FILING

Dated:
September 29, 2006

			
	Location:	 	13605, 13615, 13625, 13635, 13645, 13655 and 13665 Dulles Technology
Drive and 13461 Sunrise Valley Drive, Herndon, Virginia

RECORD AND RETURN TO:

KEYBANK NATIONAL ASSOCIATION

911 Main Street, Suite 1500

Kansas City, Missouri 64105

Attention: Carol Brownfield

Loan No.: 10032325

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	RECITALS
	 	 	6	 
	DEFINITIONS
	 	 	6	 
	ARTICLE 1 - GRANTS OF SECURITY
	 	 	9	 
	SECTION 1.1 PROPERTY MORTGAGED
	 	 	9	 
	(a) Land
	 	 	9	 
	(b) Additional Land
	 	 	9	 
	(c) Improvements
	 	 	9	 
	(d) Easements and Appurtenances
	 	 	9	 
	(e) Fixtures and Tangible Personal Property
	 	 	9	 
	(f) Leases and Rents
	 	 	10	 
	(g) Condemnation Awards
	 	 	10	 
	(h) Insurance Proceeds
	 	 	10	 
	(i) Tax Certiorari
	 	 	11	 
	(j) Miscellaneous Personal Property
	 	 	11	 
	(k) Personal Property As Defined In Uniform Commercial Code
	 	 	11	 
	(l) Conversion
	 	 	11	 
	(m) Other Rights
	 	 	11	 
	SECTION 1.2 ASSIGNMENT OF LEASES AND RENTS
	 	 	11	 
	SECTION 1.3 SECURITY AGREEMENT
	 	 	12	 
	SECTION 1.4 PLEDGE OF MONIES HELD
	 	 	12	 
	SECTION 1.5 COMMON LAW PLEDGE/ASSIGNMENT
	 	 	12	 
	CONDITIONS TO GRANT
	 	 	13	 
	ARTICLE 2 - DEBT AND OBLIGATIONS SECURED
	 	 	13	 
	SECTION 2.1 DEBT
	 	 	13	 
	ARTICLE 3 - BORROWER COVENANTS
	 	 	14	 
	SECTION 3.1 PAYMENT OF DEBT
	 	 	14	 
	SECTION 3.2 INCORPORATION BY REFERENCE
	 	 	14	 
	SECTION 3.3 INSURANCE
	 	 	14	 
	(a) Insurance
	 	 	14	 
	(i) Property Insurance
	 	 	14	 
	(ii) Business Interruption
	 	 	15	 
	(iii) Boiler and Machinery
	 	 	15	 
	(iv) Builder’s Risk
	 	 	15	 
	(v) Ordinance/Law Coverage
	 	 	16	 
	(vi) Liability Insurance
	 	 	16	 
	(vii) Workers Compensation Insurance
	 	 	16	 
	(viii) Other Insurance
	 	 	16	 
	(b) Insurance Policies
	 	 	16	 
	(c) Terrorism Coverage
	 	 	17	 
	(d) Compliance With Insurance Requirements
	 	 	17	 
	(e) Restoration
	 	 	17	 
	(f) Blanket Insurance Policies
	 	 	17	 
	(g) Absolute Transfer On Foreclosure
	 	 	18	 

2

 

	 	 	 	 	 
	 	 	Page	 
	SECTION 3.4 PAYMENT OF TAXES, ETC.
	 	 	18	 
	SECTION 3.5 TAX AND INSURANCE IMPOUND ACCOUNT
	 	 	19	 
	SECTION 3.6 CONDEMNATION
	 	 	20	 
	SECTION 3.7 LEASES AND RENTS
	 	 	20	 
	SECTION 3.8 MAINTENANCE OF PROPERTY
	 	 	21	 
	SECTION 3.9 WASTE
	 	 	21	 
	SECTION 3.10 COMPLIANCE WITH LAWS
	 	 	21	 
	SECTION 3.11 BOOKS AND RECORDS
	 	 	22	 
	SECTION 3.12 PAYMENT FOR LABOR AND MATERIALS
	 	 	24	 
	SECTION 3.13 PERFORMANCE OF OTHER AGREEMENTS
	 	 	24	 
	SECTION 3.14 CHANGE OF NAME, IDENTITY OR STRUCTURE
	 	 	24	 
	SECTION 3.15 EXISTENCE
	 	 	24	 
	ARTICLE 4 - SPECIAL COVENANTS
	 	 	24	 
	SECTION 4.1 PROPERTY USE
	 	 	24	 
	SECTION 4.2 ERISA
	 	 	25	 
	SECTION 4.3 SINGLE PURPOSE ENTITY
	 	 	25	 
	SECTION 4.4 RESTORATION AFTER CASUALTY/CONDEMNATION
	 	 	30	 
	ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
	 	 	34	 
	SECTION 5.1 WARRANTY OF TITLE
	 	 	34	 
	SECTION 5.2 AUTHORITY
	 	 	34	 
	SECTION 5.3 LEGAL STATUS AND AUTHORITY
	 	 	34	 
	SECTION 5.4 VALIDITY OF DOCUMENTS
	 	 	35	 
	SECTION 5.5 LITIGATION
	 	 	35	 
	SECTION 5.6 STATUS OF PROPERTY
	 	 	35	 
	SECTION 5.7 NO FOREIGN PERSON
	 	 	36	 
	SECTION 5.8 SEPARATE TAX LOT
	 	 	36	 
	SECTION 5.9 ERISA COMPLIANCE
	 	 	36	 
	SECTION 5.10 LEASES
	 	 	37	 
	SECTION 5.11 FINANCIAL CONDITION; NO PRIOR BANKRUPTCY
	 	 	37	 
	SECTION 5.12 TAXES
	 	 	37	 
	SECTION 5.13 MAILING ADDRESS
	 	 	37	 
	SECTION 5.14 NO CHANGE IN FACTS OR CIRCUMSTANCES
	 	 	38	 
	SECTION 5.15 DISCLOSURE
	 	 	38	 
	SECTION 5.16 THIRD PARTY REPRESENTATIONS
	 	 	38	 
	SECTION 5.17 ILLEGAL ACTIVITY
	 	 	38	 
	SECTION 5.18 MANAGEMENT
	 	 	38	 
	SECTION 5.19 NON-CONSOLIDATION
	 	 	38	 
	ARTICLE 6 - DEBTOR/CREDITOR RELATIONSHIP
	 	 	39	 
	SECTION 6.1 RELATIONSHIP OF BORROWER AND LENDER
	 	 	39	 
	SECTION 6.2 NO RELIANCE ON LENDER
	 	 	39	 
	SECTION 6.3 NO LENDER OBLIGATIONS
	 	 	39	 
	SECTION 6.4 RELIANCE OF LENDER ON BORROWER REPRESENTATIONS
	 	 	39	 
	ARTICLE 7 - FURTHER ASSURANCES
	 	 	39	 
	SECTION 7.1 RECORDING OF SECURITY INSTRUMENT, ETC.
	 	 	39	 
	SECTION 7.2 FURTHER ACTS, ETC.
	 	 	40	 

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	 	 	Page	 
	SECTION 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS
	 	 	40	 
	SECTION 7.4 ESTOPPEL CERTIFICATES
	 	 	41	 
	SECTION 7.5 REPLACEMENT DOCUMENTS
	 	 	42	 
	SECTION 7.6 AMENDED FINANCING STATEMENTS
	 	 	42	 
	ARTICLE 8 - DUE ON SALE/ENCUMBRANCE/CHANGE IN BORROWER
	 	 	42	 
	SECTION 8.1 NO SALE/ENCUMBRANCE/CHANGE OF OWNERSHIP WITHOUT CONSENT
	 	 	42	 
	SECTION 8.2 CONDITIONS TO LENDER’S CONSENT
	 	 	44	 
	ARTICLE 9 - PREPAYMENT; DEFEASANCE
	 	 	46	 
	ARTICLE 10 - DEFAULT
	 	 	46	 
	SECTION 10.1 EVENTS OF DEFAULT
	 	 	46	 
	SECTION 10.2 LATE CHARGE
	 	 	48	 
	SECTION 10.3 DEFAULT INTEREST
	 	 	48	 
	ARTICLE 11 - RIGHTS AND REMEDIES
	 	 	48	 
	SECTION 11.1 REMEDIES
	 	 	48	 
	SECTION 11.2 APPLICATION OF PROCEEDS
	 	 	50	 
	SECTION 11.3 LENDER RIGHT TO CURE DEFAULTS
	 	 	51	 
	SECTION 11.4 ACTIONS AND PROCEEDINGS
	 	 	51	 
	SECTION 11.5 RECOVERY OF SUMS REQUIRED TO BE PAID
	 	 	51	 
	SECTION 11.6 EXAMINATION OF BOOKS AND RECORDS
	 	 	51	 
	SECTION 11.7 OTHER RIGHTS, ETC.
	 	 	51	 
	SECTION 11.8 LENDER RIGHT TO RELEASE
	 	 	52	 
	SECTION 11.9 VIOLATION OF LAWS
	 	 	52	 
	SECTION 11.10 RIGHT OF ENTRY
	 	 	52	 
	SECTION 11.11 RIGHTS PERTAINING TO SALES
	 	 	52	 
	SECTION 11.12 RIGHT TO RELEASE INFORMATION
	 	 	54	 
	ARTICLE 12 - ENVIRONMENTAL HAZARDS
	 	 	54	 
	SECTION 12.1 ENVIRONMENTAL DEFINITIONS
	 	 	54	 
	SECTION 12.2 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES
	 	 	56	 
	SECTION 12.3 ENVIRONMENTAL COVENANTS
	 	 	56	 
	SECTION 12.4 LENDER’S RIGHTS
	 	 	57	 
	ARTICLE 13 - INDEMNIFICATION
	 	 	58	 
	SECTION 13.1 GENERAL INDEMNIFICATION
	 	 	58	 
	SECTION 13.2 MORTGAGE AND/OR INTANGIBLE TAX
	 	 	59	 
	SECTION 13.3 ERISA INDEMNIFICATION
	 	 	59	 
	SECTION 13.4 ENVIRONMENTAL INDEMNIFICATION
	 	 	59	 
	SECTION 13.5 DUTY TO DEFEND, ATTORNEYS’ FEES AND OTHER FEES AND EXPENSES
	 	 	61	 
	ARTICLE 14 - WAIVERS
	 	 	61	 
	SECTION 14.1 WAIVER OF COUNTERCLAIM
	 	 	61	 
	SECTION 14.2 MARSHALLING AND OTHER MATTERS
	 	 	61	 
	SECTION 14.3 WAIVER OF NOTICE
	 	 	61	 
	SECTION 14.4 WAIVER OF STATUTE OF LIMITATIONS
	 	 	61	 
	SECTION 14.5 SURVIVAL
	 	 	62	 
	SECTION 14.6 WAIVER OF TRIAL BY JURY
	 	 	62	 

4

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 15 - EXCULPATION
	 	 	62	 
	ARTICLE 16 - NOTICES
	 	 	62	 
	SECTION 16.1 NOTICES
	 	 	62	 
	ARTICLE 17 - APPLICABLE LAW
	 	 	63	 
	SECTION 17.1 CHOICE OF LAW/JURISDICTION AND VENUE
	 	 	63	 
	SECTION 17.2 USURY LAWS
	 	 	63	 
	SECTION 17.3 PROVISIONS SUBJECT TO APPLICABLE LAW
	 	 	63	 
	SECTION 17.4 INAPPLICABLE PROVISION
	 	 	64	 
	ARTICLE 18 - SECONDARY MARKET
	 	 	64	 
	SECTION 18.1 TRANSFER OF LOAN
	 	 	64	 
	SECTION 18.2 SECONDARY MARKET TRANSACTIONS
	 	 	64	 
	SECTION 18.3 COOPERATION; LIMITATIONS
	 	 	65	 
	SECTION 18.4 INFORMATION
	 	 	65	 
	SECTION 18.5 SEVERANCE
	 	 	65	 
	ARTICLE 19 - COSTS
	 	 	66	 
	SECTION 19.1 ORIGINATION, ADMINISTRATION, ENFORCEMENT, AND DEFENSE EXPENSES
	 	 	66	 
	ARTICLE 20 - CERTAIN DEFINITIONS, HEADINGS, RULE OF CONSTRUCTION
	 	 	67	 
	SECTION 20.1 GENERAL DEFINITIONS
	 	 	67	 
	SECTION 20.2 HEADINGS, ETC.
	 	 	67	 
	SECTION 20.3 RULES OF CONSTRUCTION
	 	 	67	 
	ARTICLE 21 - MISCELLANEOUS
	 	 	68	 
	SECTION 21.1 NO ORAL CHANGE
	 	 	68	 
	SECTION 21.2 LIABILITY
	 	 	69	 
	SECTION 21.3 DUPLICATE ORIGINALS; COUNTERPARTS
	 	 	69	 
	SECTION 21.4 SUBROGATION
	 	 	69	 
	SECTION 21.5 ENTIRE AGREEMENT
	 	 	69	 
	SECTION 21.6 LENDER’S RIGHT TO SUBORDINATE
	 	 	69	 
	ARTICLE 22 - TRUSTEE PROVISIONS
	 	 	70	 
	SECTION 22.1 CONCERNING THE TRUSTEE
	 	 	70	 
	SECTION 22.2 TRUSTEE’S FEES
	 	 	70	 
	SECTION 22.3 CERTAIN RIGHTS
	 	 	70	 
	SECTION 22.4 PERFECTION OF APPOINTMENT
	 	 	71	 
	ARTICLE 23 - LOCAL LAW PROVISIONS
	 	 	71	 
	SECTION 23.1 INCONSISTENCIES
	 	 	71	 
	ARTICLE 24 - ADDITIONAL OR SPECIAL PROVISIONS OR MODIFICATIONS
	 	 	73	 
	SECTION 24.1 INCONSISTENCIES
	 	 	73	 

5

 

PREAMBLE

     THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, AND FIXTURE FILING
(“Security Instrument”) is made as of September 29, 2006, by and among, REPUBLIC PARK LLC, a
Delaware limited liability company, having its principal place of business or residing at 1280
Maryland Avenue, SW, Suite 280, Washington, DC 20024, as grantor (“Borrower,” for all purposes of
this Security Instrument, such term shall include any successors or assigns of Borrower and any
future owners of all or any part of the Property), and ROSS C. REEVES, ESQ. AND STEPHEN W. BREWER,
ESQ., having an address at Wilcox & Savage, P.C., 1800 Bank of America Center, One Commercial
Place, Norfolk, Virginia 23510-2199, as trustee and grantee (the “Trustee”; such term includes the
successor and assigns of Trustee, including any parties appointed Trustee by any power of
appointment reserved to Lender), and KEYBANK NATIONAL ASSOCIATION, a national banking association,
having a place of business at 911 Main Street, Suite #1500, Kansas City, Missouri 64105, as
beneficiary and grantee (“Lender,” such term includes all successors and assigns and all subsequent
holders, if any, of the Promissory Note that this Security Instrument secures).

PROPERTY ADDRESS: 13605, 13615, 13625, 13635, 13645, 13655 and 13665 Dulles Technology Drive and
13461 Sunrise Valley Drive, Herndon, Virginia

RECITALS

     Borrower by its promissory note of even date herewith given to Lender is indebted to Lender in
the principal sum of $100,000,000.00 (the “Loan”) in lawful money of the United States of America
(the note together with all extensions, renewals, modifications, consolidations, substitutions,
replacements, restatements and increases thereof shall collectively be referred to as the “Note”),
with interest from the date thereof at the rates set forth in the Note, principal and interest to
be payable in accordance with the terms and conditions provided in the Note.

     Borrower desires to secure the payment of the Debt and the performance of all of its
obligations under the Note and other Loan Documents.

DEFINITIONS

     The terms set forth below are defined in the following Loan Documents or Sections and
Subsections of this Security Instrument and when used in this Security Instrument shall have the
meanings set forth in such Loan Documents (such Loan Documents being incorporated herein by
reference for such purposes), Sections, and Subsections unless the context clearly otherwise
requires. Certain other capitalized words and phrases that are used on a more limited basis are
defined in the Sections in which they are used.

Action: Section 17.1;

Administration and Enforcement Expenses: Section 19.1;

Affiliated Manager: Subsection 8.1(a);

Applicable Law: Subsection 3.10(a);

Availability Threshold: Subsection 4.4(a);

Bankruptcy Code: Subsection 1.1(f);

Borrower: Preamble and Section 20.1;

Business Day: Section 16.1;

6

 

Business Income Insurance: Subsection 3.3(a)(ii);

Business Interruption Period: Subsection 3.3(a)(ii);

Casualty Loss: Section 4.4;

Commercial Property Insurance: Subsection 3.3(a)(i);

Condemnation Action: Section 4.4;

Condemnation Awards: Subsection 1.1(g);

Condemnation Restoration: Section 3.6;

Control: Subsection 8.1(b);

Conversion: Section 18.5;

Debt: Section 2.1;

Decision Power: Subsection 20.3(i);

Default: Section 3.4(b);

Default Rate: Note;

Defeasance: Note;

Encumbrance: Subsection 8.1(a);

Environmental Law: Section 12.1;

Environmental Liens: Section 12.1;

Environmental Reports: Section 12.1;

ERISA: Subsection 4.2(a);

Estimated Rental Income: Subsection 3.3(a)(ii);

Event of Default: Section 10.1;

Financial Statement Reporting Deposit: Note;

Foreclosure Acquisition: Subsection 13.4(a);

Foreclosure Acquisition Date: Subsection 13.4(a);

Full Insurable Value: Subsection 3.3(a)(i);

Governing State: Section 17.1;

Guarantor: Section 5.5;

Hazardous Substances: Section 12.1;

Impound Account: Section 3.5;

Improvements: Subsection 1.1(c);

Indemnified Parties: Section 13.1;

Indemnitor: Section 5.5;

Institutional Control: Section 12.1;

Insurance Premiums: Subsection 3.3(b);

Insurance Restoration: Subsection 3.3(e);

Insured Property: Subsection 3.3(a)(i);

Interested Parties: Section 18.3;

Investor: Section 18.1;

Land: Subsection 1.1(a);

Late Charges: Note;

Leases: Subsection 1.1(f);

Leasing Report: Subsection 3.11(b);

Lender: Preamble and Section 20.1;

Lender’s Underwriting Standards: Subsection 8.2(a);

Liability Insurance: Subsection 3.3(a)(vi);

Loan Application: Section 5.14;

Loan Documents: Subsection 2.1(a);

Loan Sale: Section 18.1;

7

 

Loan Splitting: Section 18.5;

Loan Tranching: Section 18.5;

Loan: Recitals;

Losses: Section 13.1;

Maturity Date: Note;

Monthly Insurance Impound: Section 3.5;

Monthly Payment: Note;

Monthly Tax Impound: Section 3.5;

Net Proceeds: Section 4.4;

New Borrower: Subsection 8.2(a)(iv);

New Guarantor: Subsection 8.2(a)(viii);

Non-consolidation Opinion: Section 5.19;

Note: Recitals and Section 20.1;

O&M Plan: Section 12.1;

Other Charges: Subsection 3.4(a);

Participations: Section 18.1;

Permitted Exceptions: Section 5.1;

Personal Property: Subsection 1.1(e);

Policies/Policy: Subsection 3.3(b);

Prepayment Consideration: Note;

Prohibited Transfer: Section 8.1;

Property: Section 1.1 and Section 20.1;

Qualifying Manager: Section 5.18;

Rating Agency: Section 3.3(b);

Release: Section 12.1;

Remediation: Section 12.1;

REMIC: Section 18.2;

Rents: Subsection 1.1(f);

Restoration: Section 4.4;

Restoration Consultant: Subsection 4.4(b)(iii);

Restoration Retainage: Subsection 4.4(b)(iv);

Restricted Party: Subsection 8.1(a);

Sale: Subsection 8.1(a);

Secondary Market Transaction: Section 18.2;

Securities: Section 18.1;

Securitization: Section 18.1;

Security Instrument: Preamble;

Servicing Rights Transfers: Section 18.1;

Tax Change Acceleration: Subsection 7.3(a);

Taxes: Subsection 3.4(a);

Terrorism Coverage: Subsection 3.3(c);

Trade Payables: Subsection 4.3(a);

Transfer Fee: Subsection 8.2(a)(vi);

Trustee: Preamble;

Uniform Commercial Code: Subsection 1.1(e).

8

 

ARTICLE 1 — GRANTS OF SECURITY

     SECTION 1.1 PROPERTY MORTGAGED. Borrower does hereby irrevocably deed, mortgage, grant,
bargain, sell, alien, enfeoff, hypothecate, remise, release, pledge, assign, warrant, transfer,
confirm, and convey to Trustee for the benefit of Lender a lien on, pledge of, and security
interest in, the following property, rights, interests, and estates now owned or hereafter acquired
by Borrower to the full extent of Borrower’s right, title, and interest therein, including
hereafter acquired rights, interests, and property, and all products and proceeds thereof and
additions and accessions thereto (sometimes collectively referred to herein as the “Property”):

     (a) Land. The real property described in Exhibit A attached hereto and made a part
hereof (the “Land”); TOGETHER with

     (b) Additional Land. All additional lands, estates, and development rights now owned
or hereafter acquired by Borrower for use in connection with the Land and the development of the
Land that may, from time to time, by supplemental mortgage or otherwise, be expressly made subject
to the lien of this Security Instrument;

     (c) Improvements. The buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or hereafter erected or
located on the Land (the “Improvements”);

     (d) Easements and Appurtenances. All easements, rights-of-way or use, rights, strips
and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water
rights and powers, air rights and development rights, riparian rights, and all estates, rights,
titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of
any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land
and the Improvements and the reversion and reversions, remainder and remainders, including any
homestead or other claim at law or in equity and any after-acquired title, franchises, licenses,
and any reversions and remainders thereof, and all land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all
the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy,
property, possession, claim and demand whatsoever, both at law and in equity, of Borrower of, in,
and to the Land and the Improvements and every part and parcel thereof, with the appurtenances
thereto;

     (e) Fixtures and Tangible Personal Property. All inventory, machinery, furniture,
equipment, and fixtures (including all heating, air conditioning, plumbing, lighting,
communications and elevator fixtures) and other property of every kind and nature whatsoever
located upon the Land or the Improvements or appurtenant thereto or used in connection with the
present or future operation or occupancy of the Land or the Improvements, including all materials
intended for construction, reconstruction, refurbishment, renovation, alterations, and repairs to
the Property (whether stored or located on or off the Property) (all of the items described in
Subsections 1.1(e) through 1.1(m) below are herein sometimes collectively called the “Personal
Property”), including the right, title and interest of Borrower in and to any of the Personal
Property that may be subject to any security interests, as defined in the Uniform Commercial Code,
as adopted and enacted by any state or states where any of the Property is located
(the “Uniform Commercial Code”) superior in lien to the lien of this Security Instrument, such
Personal Property to include, for example, the following: (1) all

9

 

furniture and furnishings,
including carpets, rugs and other floor coverings, draperies, drapery rods and brackets, awnings,
window shades, Venetian blinds, curtains, lighting fixtures, desk chairs, stools, pictures, lamps,
ash trays, waste baskets, clocks, radios, and all other furniture and furnishings of every kind and
nature whatsoever; (2) all cash registers, coin machines, computers, word processing equipment,
adding machines, calculators, check protectors, postage meters, desks, chairs, tables, room
dividers, filing cabinets, safes, vaults, time clocks, time card machines, and other office
furniture, equipment and supplies of every kind and nature whatsoever; (3) all right and interest
of the Borrower in and to all equipment leases, personal property leases, conditional sales
contracts and similar agreements in and to the telephone system (including the switching components
thereof), television sets, computer systems, refrigerator/bars, and point of sale computer systems
and/or inventory control systems; (4) all apparatus, machinery, motors, tools, insurance proceeds,
leases, and equipment, including fire sprinklers and alarm systems, air conditioning, heating,
refrigerating, electronic monitoring, window or structural cleaning rigs, maintenance equipment,
equipment for the extermination or exclusion of vermin or insects, equipment for removal of dust,
debris, snow, refuse or garbage, and all other equipment of every kind; (5) elevators, fittings,
radiators, gas ranges, mechanical equipment, and all plumbing, heating, lighting, cooking, laundry,
ventilating, refrigerating, incinerating, air conditioning, central energy and sprinkler equipment
and fixtures and appurtenances thereto; and (6) all renewals or replacements of any of the
foregoing, whether or not the same are or shall be attached to the Improvements;

     (f) Leases and Rents. All leases and other agreements affecting or relating to the
use, enjoyment or occupancy of all or any part of the Land or the Improvements heretofore or
hereafter entered into, whether before or after the filing by or against Borrower of any petition
for relief under 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), as the same may
be amended from time to time (the “Leases”) and all right, title and interest of Borrower, its
successors and assigns therein and thereunder, including cash or securities deposited thereunder to
secure the performance by the lessees of their obligations thereunder and all rents, additional
rents, royalties, licenses, payments (including payments pursuant to the exercise of any purchase
option by any tenant under any Lease), fees (including termination fees), revenues, income,
receipts, charges, accounts, accounts receivable, issues and profits and other benefits (including
all oil and gas or other mineral royalties and bonuses) from the Land or the Improvements whether
paid or accruing before or after the filing by or against Borrower of any petition for relief under
the Bankruptcy Code (collectively, the “Rents”) and all proceeds from the sale or other disposition
of the Leases and the right to receive and apply the Rents to the payment of the Debt;

     (g) Condemnation Awards. All awards or payments, including interest thereon
(collectively “Condemnation Awards”), which may heretofore and hereafter be made with respect to
the Property, whether from the exercise of the right of eminent domain (including any transfer made
in lieu of or in anticipation of the exercise of such right), or for a change of grade, inverse
condemnation or for any other injury to or decrease in the value of the Property whether permanent
or temporary;

     (h) Insurance Proceeds. All proceeds of and any unearned premiums on any insurance
policies covering the Property, including the right to receive and
apply the proceeds of any insurance judgments, or settlements made in lieu thereof, for damage
to the Property;

10

 

     (i) Tax Certiorari. All refunds, rebates or credits in connection with a reduction in
real estate taxes and assessments charged against the Property as a result of tax certiorari or any
applications or proceedings for reduction;

     (j) Miscellaneous Personal Property. All intangible property used in connection with
or generated by, located on or at or pertaining to the Property including all general intangibles,
payment intangibles, software, goodwill, trademarks, trade names, service marks, logos, copyrights,
option rights, purchase contracts, contract rights or leases of personal property and security
deposits received pursuant thereto, utility contracts, service contracts, guaranties, warranties,
telephone exchange numbers, licenses, government permits and applications, approvals and other
government rights relating to the Property or the operation of the business thereon; all books and
records; deposit accounts, letter-of-credit rights, accounts, contract rights, instruments, chattel
paper, investment property, all rights of Borrower for payment of money for property sold, rented
or lent, for services rendered, for money lent, or advances or deposits made; all claims, actions,
and causes of action (including those arising in tort, including commercial tort claims) of
Borrower against others; all agreements, contracts, certificates, instruments (including promissory
notes, guaranties, liens and all writings which evidence a right to the payment of money),
franchises, permits, licenses, plans, specifications and other documents, now or hereafter entered
into, and all rights therein and thereto, respecting or pertaining to the use, occupation,
construction, management or operation of the Property or any part thereof or respecting any
business or activity conducted on the Property or any part thereof and all right, title and
interest of Borrower therein and thereunder, including the right to receive and collect any sums
payable to Borrower thereunder; all extensions, improvements, betterments, replacements, renewals,
or additions and accessions to any of the foregoing; and any other intangible property of Borrower
related to the Property; and

     (k) Personal Property As Defined In Uniform Commercial Code. In addition to any other
property mentioned in this Section 1.1, all property in which a security interest may be created
pursuant to the Uniform Commercial Code (or any similar laws) including all goods, inventory,
equipment, accounts, accounts receivable, contract rights, general intangibles, chattel paper,
documents, documents of title, instruments, deposit accounts, letter-of-credit rights, investment
property, tort claims (including commercial tort claims), and securities located on or generated by
or used in connection with the ownership or operation of the Property;

     (l) Conversion. All proceeds of the conversion, voluntary or involuntary, of any of
the foregoing including proceeds of insurance and Condemnation Awards, into cash or liquidation
claims; and

     (m) Other Rights. Any and all other rights of Borrower in and to the items set forth
in Subsections (a) through (l) above.

     SECTION 1.2 ASSIGNMENT OF LEASES AND RENTS. Borrower hereby absolutely and unconditionally
assigns to Lender Borrower’s right, title and interest in and to all
current and future Leases and Rents, it being acknowledged by Borrower that this assignment
constitutes, and is intended to constitute a present, absolute assignment and not an assignment for
additional security only. Nevertheless, subject to the terms of this Section 1.2 and Section 3.7,
Lender grants to Borrower a revocable license to collect and receive the Rents. Borrower shall
hold a portion of the Rents sufficient to discharge all current sums due on the Debt for use in the
payment of such sums.

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     SECTION 1.3 SECURITY AGREEMENT. This Security Instrument is both a real property mortgage and
a “security agreement” within the meaning of the Uniform Commercial Code. The Property includes
both real and personal property and all other rights and interests, whether tangible or intangible
in nature, of Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Debt, a security interest in any of the
Property that is deemed to be personal property to the full extent that such property may be
subject to the Uniform Commercial Code. This Security Instrument shall be and is intended to serve
as a financing statement under the Uniform Commercial Code with respect to the Personal Property,
and when filed shall serve as a financing statement for all intents and purposes thereunder.
Borrower authorizes Lender to file financing statements describing the Personal Property. Lender
shall be entitled to all rights and remedies of a “secured party” under the Uniform Commercial
Code. Upon its recording in the real property records, this Security Instrument shall be effective
as a financing statement filed as a fixture filing and when filed shall serve as a financing
statement for all intents and purposes thereunder. For purposes of this filing, Borrower is the
record owner of the Property. The name and mailing address of Borrower, as debtor, and the name
and mailing address of Lender, as secured party, from which information concerning this Financing
Statement may be obtained, are set forth in the Preamble of this Security Instrument. The Borrower
shall immediately advise the Lender in writing of any change in the state of Borrower’s
organization, or Borrower’s exact legal name, or the places where the Personal Property, or any
part thereof, or the books and records concerning the Personal Property, or any part thereof, are
kept.

     If any of the Property is deemed to be personal property, this Security Instrument shall also
constitute a security agreement with respect to such personal property executed by Borrower as
debtor in favor of Lender as Secured Party. Upon the occurrence of an Event of Default, Lender
may, in addition to and not in derogation of any other rights and remedies of Lender under the Loan
Documents or applicable law, in accordance with Section 9-604 of the Uniform Commercial Code, as
applicable, or other such provisions of the Uniform Commercial Code, elect (i) to proceed under and
have all the rights and remedies of a secured party under Article 9 of the Uniform Commercial Code
and any other applicable law, or (ii) to proceed as to both the real property and the personal
property in accordance with Lender’s rights and remedies in respect of the real property encumbered
by this Security Instrument, whereupon at any foreclosure sale conducted pursuant to this Security
Instrument the Trustee acting hereunder may offer the real and personal property together as part
of the same sale, with bids to be taken on the whole of the real and personal property rather than
separately.

     Borrower shall promptly notify Lender of the existence of any commercial tort claim now or
hereafter existing for the benefit of Borrower or the Property, and shall execute, acknowledge and
deliver a security agreement or other documentation as Lender shall from time to time require to
acquire and perfect a valid and binding security interest in such commercial tort claim.

     SECTION 1.4 PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender any and all items and
monies now or hereafter held by Lender, including any sums deposited in the Impound Account or any
escrow, as additional security for the Debt until expended or applied as provided in this Security
Instrument.

     SECTION 1.5 COMMON LAW PLEDGE/ASSIGNMENT. To the extent that the Uniform Commercial Code does
not apply to any item of the Personal Property, it is the intention of this
Security Instrument
that Lender have a common law pledge and/or collateral assignment of such item of Personal
Property.

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CONDITIONS TO GRANT

     TO HAVE AND TO HOLD the Property unto and to the use and benefit of Lender, and the successors
and assigns of Lender, forever;

     IN TRUST, WITH POWER OF SALE, to secure payment of the Debt at the time and in the manner
provided in the Loan Documents;

     PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall well
and truly pay to Lender the Debt at the time and in the manner provided in the Loan Documents, and
shall abide by and comply with each and every covenant and condition set forth in the Loan
Documents, these presents and the estate hereby granted shall terminate.

ARTICLE 2 — DEBT AND OBLIGATIONS SECURED

     SECTION 2.1 DEBT. This Security Instrument and the grants, assignments, and transfers made in
Article 1 are given for the purpose of securing the following, in such order of priority as Lender
may determine (the “Debt”):

     (a) the payment of the indebtedness and obligations evidenced by or arising under the
following, which, together with all amendments or modifications thereto and substitutions or
replacements thereof are sometimes herein collectively called the “Loan Documents” or individually
a “Loan Document”: this Security Instrument, the Note and all other documents and instruments
existing now or after the date hereof that evidence, secure or otherwise relate to the Loan,
including any assignments of leases and rents, other assignments, security agreements, financing
statements, guaranties, indemnity agreements (including environmental indemnity agreements),
letters of credit, or escrow/holdback or similar agreements or arrangements.

     (b) the payment of interest, default interest, late charges and other sums, as provided in the
Note, this Security Instrument, or any other Loan Document;

     (c) Prepayment Consideration (as such term is defined in the Note);

     (d) the payment of all other monies agreed or provided to be paid in the Note, this Security
Instrument, or any other Loan Document;

     (e) the payment of all sums advanced pursuant to this Security Instrument or any other Loan
Document to protect and preserve the Property and the lien and the security interest created hereby
or otherwise, it being agreed by Borrower that any future advances made by Lender to or for the
benefit of Borrower from time to time under the Note or the other Loan Documents and whether or not
such advances are obligatory or are made at the option of Lender, or otherwise, made for any
purpose, and all interest accruing thereon, shall be equally secured by this Security Instrument
and shall have the same priority as all amounts, if any, advanced as of the date hereof and shall
be subject to all of the terms and provisions of this Security Instrument;

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     (f) the payment of all loans and advances by Lender, all liabilities, indemnities, damages and
claims of any kind or nature (in contract, tort or otherwise, including damages incurred by Lender
because Borrower has failed to pay the Note strictly in accordance with its terms), and costs and
expenses (including attorneys’ fees) incurred by Lender in connection with the Debt or any part
thereof, or the servicing or administration thereof or the enforcement of Lender’s remedies in the
collection thereof, any renewal, extension, modification, consolidation, change, substitution,
replacement, restatement or increase of the Debt or any part thereof, or the acquisition or
perfection of the security therefor, whether made or incurred at the request of Borrower or Lender
and whether or not evidenced by additional promissory notes or other instruments;

     (g) the performance of all other obligations of Borrower contained herein;

     (h) the performance of each obligation of Borrower contained in the Note in addition to the
payment of the Debt and of Borrower contained in any Loan Document; and

     (i) the performance of each obligation of Borrower contained in any renewal, extension,
modification, consolidation, change, substitution, replacement for, restatement or increase of all
or any part of the Note, this Security Instrument or any other Loan Document.

ARTICLE 3 — BORROWER COVENANTS

     Borrower covenants and agrees that:

     SECTION 3.1 PAYMENT OF DEBT. Borrower shall pay the Debt at the time and in the manner
provided in the Note and in this Security Instrument.

     SECTION 3.2 INCORPORATION BY REFERENCE. All of the covenants, conditions and agreements
contained in the Note and each other Loan Document are hereby made a part of this Security
Instrument to the same extent and with the same force as if fully set forth herein.

     SECTION 3.3 INSURANCE.

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

     (i) Property Insurance. Insurance (“Commercial Property Insurance”)
with respect to the Improvements, including fixtures, machinery, equipment and any
other items of Property (collectively “Insured Property”) owned by Borrower and
typically insured by a commercial property insurance policy, insuring against any
peril now or hereafter included within the classification “Special Cause of Loss”
insuring against risks of direct physical loss, in an amount not less than one
hundred percent (100%) of the “Full Insurable Value” (as hereinafter defined) of the
Improvements and other Insured Property, with an “agreed amount” endorsement waiving
all co-insurance provisions. The term “Full Insurable Value” shall mean the full
replacement cost value of the Improvements and Insured Property (without taking into
account any depreciation, and exclusive of excavations, footings and foundations,
landscaping and paving) determined annually at Borrower’s sole cost and expense by an
insurer, a recognized independent insurance broker or an independent appraiser
selected by

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Borrower and approved by Lender, but in no event less than the coverage
required pursuant to the terms of any Lease. In addition, Borrower shall obtain:
(x) if any portion of the Improvements is currently or at any time in the future
located in a federally designated “special flood hazard area,” flood hazard insurance
in an amount equal to the lesser of (1) the outstanding principal balance of the Note
or (2) the maximum amount of such insurance available under the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National
Flood Insurance Reform Act of 1994, as each may be amended or such greater amount as
Lender shall require; (y) earthquake or earth movement insurance in amounts and in
form and substance satisfactory to Lender in the event that Property is located in an
area with a high degree of seismic activity and the “probable maximum loss” for the
Improvements, as determined by an engineer satisfactory to Lender, is 20% or greater;
and (z) coastal windstorm insurance in amounts and in form and substance satisfactory
to Lender in the event the Property is located in any coastal region, provided that
the insurance pursuant to clauses (x), (y) and (z) hereof shall be on terms
consistent with the “Special Cause of Loss” insurance policy required under this
subsection (i).

     (ii) Business Interruption. Business interruption and/or loss of
“rental income” insurance (“Business Income Insurance”) in an amount sufficient to
avoid any co-insurance penalty and to provide proceeds that will cover the estimated
annual gross income as determined by Lender (the “Estimated Rental Income”) for a
period (the “Business Interruption Period”) of (A) not less than twelve (12) months
from the date of casualty or loss if the amount of the Loan is less than $20,000,000,
or (B) not less than eighteen (18) months from the date of casualty or loss if the
amount of the Loan is $20,000,000 or more. In each such case, such Business Income
Insurance policy shall provide that, after the physical loss to the Improvements and
the other Insurable Property has been repaired, the continued loss of Estimated
Rental Income will be insured during the applicable Business Interruption Period, and
notwithstanding that the policy may expire prior to the end of such period. The term
“rental income” to mean the sum of (A) the total then ascertainable Rents payable
under the Leases and (B) the total ascertainable amount of all other amounts to be
received by Borrower from third parties which are the legal obligation of the
tenants. The amount of Business Income Insurance coverage shall be adjusted annually
by Lender to reflect the projected rents payable during the next succeeding
Business Interruption Period;

     (iii) Boiler and Machinery. If applicable, comprehensive form boiler and
machinery insurance (without exclusion for explosion), on terms consistent with those
set forth for Commercial Property Insurance in Section 3.3(a)(i) above;

     (iv) Builder’s Risk. At all times during which construction, repairs or
alterations are being made with respect to the Improvements that either affect the
structure of the Improvements or will cost in excess of five percent (5%) of the
value of the Property (A) owner’s contingent or protective liability insurance
covering claims not covered by or under the terms or provisions of the commercial
general liability insurance policy described in Subsection 3.3(a)(vi) below; and (B)
the insurance provided for in Subsection 3.3(a)(i) written in a so-called builder’s
risk completed value form (1) on a non-reporting basis, (2) against all risks insured
against pursuant to Subsection 3.3(a)(i), (3) including permission to occupy the
Property, and (4) with an agreed amount endorsement waiving co-insurance provisions;

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     (v) Ordinance/Law Coverage. Ordinance or law coverage and insurance
coverage to compensate for the cost of demolition or rebuilding of the undamaged
portion of the Property along with any reduced value and the increased cost of
construction in amounts as requested by Lender if the Property is or becomes a
legally non-conforming use;

     (vi) Liability Insurance. Commercial general liability insurance
(“Liability Insurance”) on an “occurrence” form, including bodily injury and property
damage liability, and insurance against any and all claims, including all legal
liability imposed upon Lender and all court costs and legal fees and expenses,
arising out of or connected with the possession, use, leasing, operation, maintenance
or condition of the Property. Such insurance shall provide commercial general
liability protection in an amount not less than Three Million Dollars ($3,000,000)
each occurrence and annual aggregate, combined single limit, bodily injury and
property damage. For loans with original principal amounts in excess of $20,000,000,
Liability Insurance shall be in an amount of not less than Ten Million Dollars
($10,000,000) each occurrence and annual aggregate, combined single limit, bodily
injury and property damage;

     (vii) Workers Compensation Insurance. If the Property includes
commercial property, worker’s compensation insurance with respect to any employees of
Borrower, as required by any Governmental Authority or any Applicable Law; and

     (viii) Other Insurance. Such other insurance with respect to the
Property against loss or damage of the kinds from time to time customarily insured
against and generally required by institutional lenders for properties comparable to
the Property.

     (b) Insurance Policies. All insurance provided for in Subsection 3.3(a) hereof
shall be obtained under valid and enforceable policies (the “Policies” or in the singular,
the “Policy”) issued by one or more insurers satisfactory to Lender and having a rating of
A:V or better by Best’s Key Rating Guide, and, if the amount of the Loan is greater than
$20,000,000, an Insurer Financial Strength Rating of AA or better from Standard & Poor’s
Ratings Services, a Division of McGraw-Hill Companies, Inc., and, upon Lender’s request, an
equivalent rating by any other nationally recognized credit rating agency approved by Lender
(each a “Rating Agency”). All insurers providing the insurance required under this Security
Instrument shall be authorized to issue insurance in the state in which the Property is
located. The Policy referred to in Subsection 3.3(a)(vi) above shall name Lender as an
additional insured and the Policies referred to in Subsection 3.3(a)(i), (ii), (iii) and
(iv), and as applicable (viii), above shall provide that all proceeds be payable to Lender
as set forth in Section 4.4 hereof. The Policies referred to in Subsections 3.3(a)(i),
(iii), and (iv) shall also: (1) contain a standard “non-contributory mortgagee” endorsement
or its equivalent relating, inter alia, to recovery by Lender notwithstanding the negligent
or willful acts or omission of Lender; (2) contain a waiver of subrogation endorsement as to
Lender; and (3) be approved by Lender as to amounts, form, risk coverage, deductibles, loss
payees and insureds. All Policies shall contain (i) a provision that such Policies shall
not be cancelled or terminated, nor shall they expire, without

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at least thirty (30) days
prior written notice to Lender in each instance; and (ii) include effective waivers by the
insurer of all claims for Insurance Premiums against any loss payees, additional insureds
and named insureds (other than Borrower). Certificates of insurance with respect to all
renewal and replacement Policies shall be delivered to Lender not less than thirty (30) days
prior to the expiration date of any of the Policies required to be maintained hereunder
which certificates shall bear notations evidencing payment of applicable premiums (the
“Insurance Premiums”). Duplicate originals of such replacement Policies shall be delivered
to Lender promptly after Borrower’s receipt thereof but in any case within thirty (30) days
after the effective date thereof. If Borrower fails to maintain and deliver to Lender the
original Policies or certificates of insurance required by this Security Instrument, upon
ten (10) days prior notice to Borrower, Lender may procure such insurance at Borrower’s sole
cost and expense.

     (c) Terrorism Coverage. The commercial property and business income insurance
required pursuant to Section 3(a) hereof shall be required to cover perils of terrorism and
acts of terrorism (“Terrorism Coverage”) and Borrower shall maintain Commercial Property
Insurance and Business Income Insurance for loss resulting from perils, and acts of
terrorism on terms (including amounts) consistent with those required under Sections
3.3(a)(i) and (iii) above at all times during the term of the Loan so long as (A) Lender
determines that either (I) prudent owners of real estate comparable to the Property are
maintaining same, or (II) prudent institutional lenders are requiring that such owners
maintain such insurance; or (B) if such insurance is obtainable from any insurer or the
United States of America or any agency or instrumentality thereof and the lack of such
insurance in and of itself will result in a qualification, downgrade or withdrawal of the
then current rating assigned, or to be assigned, or prevent ratings from being assigned, to
the Securities or any class thereof in any applicable Securitization. If Lender has waived
the requirement that Borrower obtain Terrorism Coverage, Lender may at any time require that
Borrower obtain such Terrorism Coverage upon thirty (30) days notice.

     (d) Compliance With Insurance Requirements. Borrower shall comply with all
insurance requirements and shall not bring or keep or permit to be brought or kept any
article upon any of the Property or cause or permit any condition to exist thereon which
would be prohibited by an insurance requirement, or would invalidate the insurance coverage
required hereunder to be maintained by Borrower on or with respect to any part of the
Property pursuant to this Section 3.3.

     (e) Restoration. If the Property shall be damaged or destroyed, in whole or in
part, by fire or other casualty, Borrower shall give prompt notice of such damage to Lender
and provided that Borrower shall have received the Net Proceeds, Borrower shall promptly
commence and diligently prosecute the completion of the repair and restoration of the
Property as nearly as possible to the condition the Property was in immediately prior to
such fire or other casualty, with such alterations as may be approved by Lender (the
“Insurance Restoration”) and otherwise in accordance with Section 4.4 of this Security
Instrument.

     (f) Blanket Insurance Policies. The insurance coverage required under Section
3.3(a) may be effected under a blanket policy or policies covering the Property and other
properties and assets not constituting a part of the security hereunder; provided that any
such blanket policy shall specify the portion of the total coverage of such policy that is
allocated to the Property, and any sub-limit in such blanket policy applicable to the
Property, and shall in any case comply in all other respects with the requirements of this
Section 3.3. Lender may make such other requirements with respect to blanket insurance as
Lender may deem appropriate or desirable from time to time.

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     (g) Absolute Transfer On Foreclosure. In the event of a foreclosure of this
Security Instrument or other transfer of title to the Property extinguishing the Debt or the
lien of this Security Instrument, all right, title and interest of Borrower in and to any
insurance policies then in force shall pass to and are hereby assigned by Borrower to the
purchaser or grantee.

     SECTION 3.4 PAYMENT OF TAXES, ETC.

     (a) Borrower shall pay by their due date all taxes, assessments, water rates, sewer
rents, governmental impositions, and other charges, including vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Land, now or hereafter levied
or assessed or imposed against the Property or any part thereof (the “Taxes”), all ground
rents, maintenance charges and similar charges, now or hereafter levied or assessed or
imposed against the Property or any part thereof (the “Other Charges”), and all charges for
utility services provided to the Property as same become due and payable. Borrower shall
deliver to Lender, promptly upon Lender’s request, evidence satisfactory to Lender that the
Taxes, Other Charges, and utility service charges have been so paid or are not then
delinquent. Borrower shall not suffer and shall promptly cause to be paid and discharged
any lien or charge whatsoever that may be or become a lien or charge against the Property.
Except to the extent sums sufficient to pay all Taxes and Other Charges have been deposited
with Lender in accordance with the terms of this Security Instrument, Borrower shall furnish
to Lender paid
receipts for the payment of the Taxes and Other Charges prior to the date the same
shall become delinquent.

     (b) After prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any of the Taxes,
provided that (i) no Event of Default or any event that, with notice or the passage of time
or the modification or termination of the automatic stay of Section 362 of the United States
Bankruptcy Code may become an Event of Default, has occurred under the Note, this Security
Instrument or any of the Loan Documents (a “Default”), (ii) Borrower is permitted to do so
under the provisions of any other mortgage, deed of trust or deed to secure debt affecting
the Property (it not being implied by this clause that any such encumbrance will be
permitted), (iii) such proceeding shall suspend the collection of the Taxes from Borrower
and from the Property or Borrower shall have paid all of the Taxes under protest, (iv) such
proceeding shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower is subject and shall not constitute a default
thereunder, (v) neither the Property nor any part thereof or interest therein will be in
danger of being sold, forfeited, terminated, cancelled or lost, (vi) Borrower shall have set
aside adequate reserves for the payment of the Taxes, together with all interest and
penalties thereon, unless Borrower has paid all of the Taxes under protest, and (vii)
Borrower shall have furnished the security as may be required in the proceeding, or as may
be reasonably requested by Lender to insure the payment of any contested Taxes, together
with all interest and penalties thereon, taking into consideration the amount in the Impound
Account available for payment of Taxes.

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     SECTION 3.5 TAX AND INSURANCE IMPOUND ACCOUNT. Borrower shall establish and maintain at all
times while this Security Instrument continues in effect an impound account (the “Impound Account”)
with Lender for payment of Taxes and Insurance Premiums on the Property and as additional security
for the indebtedness secured hereby. Borrower shall deposit in the Impound Account an amount
determined by Lender to be sufficient (when added to the monthly deposits described herein) to pay
the next due installment of real estate taxes and assessments on the Property at least one (1)
month prior to the due date or the delinquency date thereof (as Lender shall determine) and the
next due annual insurance premiums with respect to the Property at least one (1) month prior to the
due date thereof. Commencing on the first Monthly Payment Date under the Note and continuing
thereafter on each Monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently
with the Monthly Payment due under the Note, deposits in an amount equal to one-twelfth (1/12) of
the amount of the annual Taxes that will next become due and payable on the Property (the “Monthly
Tax Impound”), plus one-twelfth (1/12) of the amount of the annual Insurance Premiums that will
next become due and payable on insurance policies which Borrower is required to maintain hereunder
(the “Monthly Insurance Impound”), each as estimated and determined by Lender. The Monthly Tax
Impound or Monthly Insurance Impound, and the payments of interest or principal or both, payable
pursuant to the Note, shall be added together and shall be paid as an aggregate sum by Borrower to
Lender. If Lender at any time determines that the Monthly Tax Impound or Monthly Insurance Impound
is insufficient, Lender may in its discretion adjust the required monthly payments of such amounts,
and Borrower shall be obligated to pay the increased amounts for the Monthly Tax Impound or Monthly
Insurance Impound commencing with the next monthly payment date under the Note. So long as no
Event of Default or Default has occurred and is continuing, all sums in the Impound
Account shall be held by Lender in the Impound Account and used to pay Taxes and Insurance
Premiums before the same become delinquent. Borrower shall be responsible for ensuring the receipt
by Lender, at least thirty (30) days prior to the respective due date or the delinquency date for
payment thereof (as Lender shall determine), of all bills, invoices and statements for all Taxes
and Insurance Premiums to be paid from the Impound Account, and so long as no Event of Default has
occurred and is continuing, Lender shall pay the governmental authority or other party entitled
thereto directly to the extent funds are available for such purpose in the Impound Account. In
making any payment from the Impound Account, Lender shall be entitled to rely on any bill,
statement or estimate procured from the appropriate public office or insurance company or agent
without any inquiry into the accuracy of such bill, statement or estimate and without any inquiry
into the accuracy, validity, enforceability or contestability of any tax, assessment, valuation,
sale, forfeiture, tax lien or title or claim thereof. Lender shall pay no interest on funds
contained in the Impound Account to Borrower and any interest or other earnings on funds deposited
in the Impound Account shall be solely for the account of Lender. If the total funds in the
Impound Account shall exceed the amount of payments actually applied by Lender for the purposes of
the Impound Account, such excess may be credited by Lender on subsequent payments to be made
hereunder or, at the option of Lender, refunded to Borrower. In allocating such excess, Lender may
deal with the person shown on the records of Lender to be the owner of the Property. If, however,
the Impound Account shall not contain sufficient funds to pay the sums required when the same shall
become due and payable, Borrower shall, within ten (10) days after receipt of written notice
thereof, deposit with Lender the full amount of any such deficiency. The Impound Account shall not
constitute a trust fund and may be commingled with other monies held by Lender.

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     SECTION 3.6 CONDEMNATION. Borrower shall promptly give Lender notice of the actual or
threatened commencement of any condemnation or eminent domain proceeding and shall deliver to
Lender copies of any and all papers served in connection with such proceedings. Lender may
participate in any such proceedings to the extent permitted by law. Borrower shall deliver to
Lender all instruments requested by it to permit such participation. Borrower shall, at its
expense, diligently prosecute any such proceedings, and shall consult with Lender, its attorneys
and experts, and cooperate with them in the carrying on or defense of any such proceedings.
Borrower shall not make any agreement in lieu of condemnation of the Property or any portion
thereof without the prior written consent of Lender in each instance, which consent shall not be
unreasonably withheld or delayed in the case of a taking of an insubstantial portion of the
Property as determined by Lender. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including any transfer made in lieu of or in
anticipation of the exercise of such taking) and whether or not any Condemnation Awards are made
available to Borrower for the completion of the repair and restoration of the Property as nearly as
possible to the condition the Property was in immediately prior to the condemnation or transfer in
lieu of condemnation, with such alterations as may be approved by Lender in accordance with Section
4.4 (a “Condemnation Restoration”), Borrower shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Security Instrument and the Debt shall not
be reduced until any Condemnation Award shall have been actually received and applied by Lender,
after the deduction of expenses of collection, to the reduction or discharge of the Debt. Lender
shall not be limited to the interest paid on the Condemnation Awards by the condemning authority
but shall be entitled to receive out of the Condemnation Awards interest at the rate or rates
provided herein or in the Note. Borrower shall cause Condemnation Awards payable to Borrower in
any condemnation or transfer made in lieu of or in anticipation of the exercise of such taking to
be paid directly to Lender.
Lender shall apply any such Condemnation Awards (after deducting any expenses of collection)
to the reduction or discharge of the Debt (whether or not then due and payable). No Prepayment
Consideration shall be payable solely in connection with such Condemnation Awards; provided,
however, that notwithstanding the foregoing, if an Event of Default or a Default is existing as of
the date of the condemnation, then any Condemnation Awards or proceeds applied to the Debt pursuant
to this Section shall be subject to the Prepayment Consideration computed in accordance with the
terms of the Note. For the purposes of determining whether Prepayment Consideration shall be
payable under this Section 3.6, a civil or criminal action seeking or resulting in a forfeiture of
the Property shall not be deemed a condemnation or eminent domain proceeding and any payment made
pursuant to or in connection with such forfeiture action be subject to the payment of Prepayment
Consideration. If the Property or any portion thereof is taken by the power of eminent domain,
Borrower shall promptly commence and diligently prosecute the Condemnation Restoration in
accordance with Section 4.4 of this Security Instrument. If the Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of the award or payment, Lender shall have
the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or
denied, to receive the Condemnation Awards or a portion thereof sufficient to fully satisfy the
Debt.

     SECTION 3.7 LEASES AND RENTS. Borrower shall comply at all times with that certain Assignment
of Leases and Rents of even date herewith executed by Borrower in favor of Lender, which is
incorporated herein by this reference as though fully set forth herein. All Rents generated by or
derived from the Property shall first be utilized solely for current expenses directly attributable
to the ownership and operation of the Property, including current expenses relating to Borrower’s
liabilities and obligations with respect to the Loan Documents, and none of the Rents generated by
or
derived from the Property shall be diverted by Borrower and utilized for any other purpose
unless all such current expenses attributable to the ownership and operation of the Property have
been fully paid and satisfied.

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     SECTION 3.8 MAINTENANCE OF PROPERTY. Borrower shall cause the Property to be maintained in a
good and safe condition and repair. The Improvements and the Personal Property shall not be
removed, demolished or materially altered (unless such Personal Property is replaced with personal
property of equal or better quality) without the consent of Lender. Borrower shall promptly
repair, replace or rebuild any part of the Property which may be destroyed by any casualty, or
become damaged, worn or dilapidated or which may be affected by any proceeding of the character
referred to in Section 3.6 hereof and 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, acquiesce in,
or consent to any change in any private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses that may be made of the Property or any part thereof.
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 the nonconforming use or Improvement
to be discontinued or abandoned without the express written consent of Lender.

     SECTION 3.9 WASTE. Borrower shall not commit or suffer any waste of the Property (“waste”
meaning the diminution in the Property’s value resulting from Borrower’s negligent or willful
failure to manage, maintain, repair and otherwise operate the Property in a commercially reasonable
manner) or make any change in the use of the Property which will in any way materially increase the
risk of fire or other hazard arising out of the operation of the
Property, or take any action that might invalidate or give cause for cancellation of any
Policy, or do or permit to be done thereon anything that may in any way impair the value of the
Property or the security of this Security Instrument. Borrower shall not, without the prior
written consent of Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land, regardless of the depth
thereof or the method of mining or extraction thereof.

     SECTION 3.10 COMPLIANCE WITH LAWS.

     (a) Borrower shall promptly comply with all existing and future federal, state and
local laws, orders, ordinances, governmental rules and regulations or court orders affecting
the Property and the use thereof (“Applicable Law”).

     (b) Borrower shall maintain all necessary certificates, licenses and other approvals,
governmental and otherwise, necessary for the operation of the Property and the conduct of
its business and all required zoning, building code, land use, environmental and other
similar permits or approvals, in full force and effect and shall not take or omit to take
any action that would subject any of the foregoing to revocation, suspension, forfeiture or
modification.

     (c) Borrower shall from time to time, upon Lender’s request, provide Lender with
evidence reasonably satisfactory to Lender that the Property complies with all Applicable
Laws or is exempt from compliance with Applicable Laws.

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     (d) Notwithstanding any provisions set forth herein or in any document regarding
Lender’s approval of alterations of the Property, Borrower shall not alter the Property in
any manner that would materially increase Borrower’s responsibilities for compliance with
Applicable Laws without the prior written approval of Lender. Lender’s approval of the
plans, specifications, or working drawings for alterations of the Property shall create no
responsibility or liability on behalf of Lender for their completeness, design, sufficiency
or their compliance with Applicable Laws. The foregoing shall apply to tenant improvements
constructed by Borrower or by any of its tenants. Lender may condition any such approval
upon receipt of a certificate of compliance with Applicable Laws from an independent
architect, engineer, or other person acceptable to Lender.

     (e) Borrower shall give prompt notice to Lender of the receipt by Borrower of any
notice related to a violation of any Applicable Laws and of the commencement of any
proceedings or investigations which relate to compliance with Applicable Laws.

     (f) After prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the Applicable Laws affecting the Property, provided that (i) no Event of Default
or Default has occurred; (ii) Borrower is permitted to do so under the provisions of any
other mortgage, deed of trust or deed to secure debt affecting the Property; (iii) such
proceeding shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower is subject and shall not constitute a default
thereunder; (iv) neither the Property nor any part thereof or interest therein nor any of
the tenants or occupants thereof shall
be affected in any material adverse way as a result of such proceeding; and (v)
Borrower shall have furnished to Lender all other items reasonably requested by Lender.

     SECTION 3.11 BOOKS AND RECORDS.

     (a) Borrower shall keep adequate books and records of account in accordance with
methods acceptable to Lender and consistently applied, and shall furnish to Lender:

     (i) Within ninety (90) days after the close of each fiscal year of Borrower,
Borrower shall deliver or cause to be delivered to Lender the following financial
reports, each of which shall be certified by the Borrower’s chief financial officer
or another person acceptable to Lender: (A) an annual rent roll; (B) an annual
operating statement of the Property; and (C) an annual balance sheet and
profit-and-loss statement of Borrower. If the amount of the Loan is $20,000,000 or
more, Lender may require that the annual operating statement, annual balance sheet
and annual profit-and-loss statement be audited or prepared and certified by an
independent certified public accountant acceptable to Lender.

     (ii) For each Guarantor, Borrower shall deliver, or cause to be delivered to
Lender within ninety (90) days after the close of the fiscal year of such Guarantor
(A) an annual balance sheet and profit and loss statement of such Guarantor certified
by such Guarantor’s chief financial officer or another person acceptable to Lender if
such Guarantor is an entity, or (B) a signed personal financial statement in a form
satisfactory to Lender if such Guarantor is an individual.

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     (iii) For the first twelve (12) months after the date of this Security
Instrument, Borrower shall deliver, or cause to be delivered, all of the following
with respect to the previous calendar month within twenty-one (21) days after the
close of each calendar month, in each case to be certified by the Borrower’s chief
financial officer or another person acceptable to Lender: (A) monthly rent roll(s);
(B) monthly operating statement(s) of the Property; and (C) year-to-date operating
statement(s) of the Property.

     (iv) Beginning thirteen (13) months after the date of this Security Instrument,
Borrower shall deliver, or cause to be delivered, all of the following with respect
to the previous fiscal quarter within thirty (30) days after the close of each fiscal
quarter, all to be certified by the Borrower’s chief financial officer or another
person acceptable to Lender: (A) a quarterly rent roll; (B) a quarterly operating
statement of the Property; and (C) a year-to-date operating statement of the
Property.

     (b) Not later than each February 1 during the term of the Note upon Lender’s request,
Borrower shall deliver to Lender, for Lender’s approval, a report (the “Leasing Report”)
setting forth the minimum economic terms that Borrower proposes for use in connection with
the standard lease form for leases of portions of the Property during the twelve month
period beginning upon such anniversary date. The terms set forth in the Leasing Report
shall reflect the prevailing market conditions for like properties in the locality of the
Property.

     (c) Immediately upon Borrower’s receipt of such information, but in no event less
frequently than annually, Borrower shall deliver to Lender upon request, in form
satisfactory to Lender, information regarding the sales and/or receipts of each tenant of
the Property who is required to report such information to Borrower pursuant to such
tenant’s Lease or otherwise.

     (d) Upon request, Borrower and its affiliates shall furnish to Lender:

     (i) a property management report for the Property, showing the number of
inquiries made and/or rental applications received from tenants or prospective
tenants and deposits received from tenants and any other information requested by
Lender, in reasonable detail and certified by Borrower to be true and complete, but
not more frequently than quarterly; and

     (ii) an accounting of all security deposits held in connection with any Lease of
any part of the Property, including the name and identification number of the
accounts in which such security deposits are held, the name and address of the
financial institutions in which such security deposits are held and the name of the
person to contact at such financial institution, along with any authority or release
necessary for Lender to obtain information regarding such accounts directly from such
financial institutions;

     (e) Borrower and its affiliates shall furnish Lender with such other additional
financial or management information as may, from time to time, be required by, and in form
and substance satisfactory to, Lender.

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     SECTION 3.12 PAYMENT FOR LABOR AND MATERIALS. Borrower shall promptly pay when due all bills
and costs for labor, materials, and specifically fabricated materials incurred in connection with
the Property and never permit to exist beyond the due date thereof in respect of the Property or
any part thereof any lien or security interest, even though inferior to the liens and the security
interests hereof, and in any event never permit to be created or exist in respect of the Property
or any part thereof any other or additional lien or security interest other than the liens or
security interests hereof, except for the Permitted Exceptions. Notwithstanding the foregoing,
after prior written notice to Lender, Borrower may, at its own expense, contest any mechanic’s lien
affecting the Property by appropriate legal proceedings, promptly initiated and conducted in good
faith and with due diligence as determined by Lender, provided that all of the following conditions
are satisfied in Lender’s discretion: (a) no Event of Default has occurred and is continuing; (b)
Borrower is permitted to do so under the provisions of any other mortgage, deed of trust or deed to
secure debt affecting the Property; (c) such proceeding shall be permitted under and be conducted
in accordance with the provisions of any other instrument to which Borrower or the Property is
subject and shall not constitute a default thereunder; (d) neither the Property, any part thereof
or interest therein, any of the tenants or occupants thereof, nor Borrower shall be affected in any
material adverse way as a result of such proceeding; (e) Borrower shall have furnished to Lender
additional security in respect of the lien being contested in an amount reasonably requested by
Lender, but in any event not less than 125% of the amount of the lien; (f) Borrower shall have
furnished to Lender all other items reasonably requested by Lender, including title insurance
coverage or bonding over such lien; and (g) Lender shall have determined that Borrower is likely to
prevail in such contest.

     SECTION 3.13 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe and perform each and
every term to be observed or performed by Borrower pursuant to the terms of any agreement or
recorded instrument affecting or pertaining to the Property.

     SECTION 3.14 CHANGE OF NAME, IDENTITY OR STRUCTURE. Except as may be expressly permitted
under Article 8, Borrower shall not change Borrower’s name, identity (including its trade name or
names) or, if not an individual, Borrower’s corporate, partnership or other structure, its state of
organization or its identification number, without notifying the Lender of such change in writing
at least thirty (30) days prior to the effective date of such change and, in the case of a change
in Borrower’s structure, without first obtaining the prior written consent of the Lender.

     SECTION 3.15 EXISTENCE. Borrower shall continuously maintain (a) its existence and shall not
dissolve or permit its dissolution, (b) its rights to do business in the state where the Property
is located and (c) its franchises and trade names.

ARTICLE 4 — SPECIAL COVENANTS

     Borrower covenants and agrees that:

     SECTION 4.1 PROPERTY USE. The Property shall be used only for the use approved by Lender in
connection with the making of the Loan and for no other use without the prior written consent of
Lender.

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     SECTION 4.2 ERISA.

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

     (b) Borrower further covenants and agrees to deliver to Lender such certifications or
other evidence from time to time throughout the term of the Security Instrument, as
requested by Lender, that (i) Borrower is not an “employee benefit plan” as defined in
Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within
the meaning of Section 3(3) of ERISA; (ii) Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental plans; and
(iii) one or more of the following circumstances is true:

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

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

     (iii) Borrower qualifies as an “operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. § 2510.3-101(c) or (e) or an investment
company registered under The Investment Company Act of 1940.

     SECTION 4.3 SINGLE PURPOSE ENTITY.

     (a) Limited Purpose. Borrower by execution of this Security Instrument
represents, warrants and covenants that it (i) has been and shall continue to be organized
solely for the limited purpose of acquiring, owning, developing, leasing, managing,
operating, holding, pledging, liening, encumbering and selling or otherwise disposing of the
Property and doing only those things necessary in connection therewith, (ii) shall not
engage in any other business, (iii) shall have no other purpose, (iv) shall not own or
acquire any real property other than the real estate included in the Property or any
personal (tangible or intangible) property other than personal property included in the
Property or in furtherance of the purposes of Borrower as stated herein, and (v) shall not
incur, create, or assume any indebtedness or liabilities, secured or unsecured, direct or
contingent, other than (A) the Loan and (B) Trade Payables (as hereinafter defined) incurred
in the course of its business of owning, constructing, developing, managing, operating,
leasing, renovating and maintaining the Property, provided that such Trade Payables (A) are
not evidenced by a note, (B) are paid within sixty (60) days of the date incurred, unless
contested in good faith, and (C) do not exceed, in the aggregate, four percent (4%) of the
outstanding principal balance of the Note at any one time. For purposes hereof, “Trade
Payables” shall mean unsecured amounts payable by or on behalf of Borrower for or in respect
of the ownership, construction, development, management, operation, leasing, renovation and
maintenance of the Property in the course of business, including amounts payable to
suppliers, vendors, contractors, subcontractors, mechanics, materialmen or other persons
providing property or services to the Property or Borrower.

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     (b) Prohibited Actions. Borrower by execution of this Security Instrument
represents, warrants, and covenants that it has not taken and shall not take any of the
following actions:

     (i) without the written consent of each Independent Manager (as hereinafter
defined), take any Material Action (as hereinafter defined). For purposes hereof,
“Material Action” shall mean to consolidate or merge Borrower with or into any person
or entity, sell all or substantially all of the assets of Borrower (except as
otherwise permitted under the Loan Documents), or to institute proceedings to have
Borrower be adjudicated bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against Borrower or file a petition seeking, or
consent to, reorganization or relief with respect to Borrower under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of
Borrower or a substantial part of its property, or make any assignment for the
benefit of creditors of Borrower, or admit in writing Borrower’s inability to pay its
debts generally as they become due, or take action in furtherance of any such action,
or, to the fullest extent permitted by law, dissolve or liquidate Borrower.

     (ii) amend or recommend the amendment of any formation or organizational
document of Borrower in any manner which adversely affects Borrower’s existence as a
single purpose entity unless Lender consents to such amendment;

     (iii) fail to preserve and keep in full force and effect its existence, rights
(charter and statutory) and franchises; or

     (iv) engage in any business or activity that is not consistent with the purposes
of Borrower as set forth in Section 4.3(a) above.

     (c) Separateness Covenants. Except as otherwise expressly required by any Loan
Document, Borrower by execution of this Security Instrument represents, warrants, and
covenants that it shall at all times:

     (i) not engage in any business or activity other than (i) the acquisition,
construction, development, ownership, operation, leasing, management, maintenance
and/or sale or other disposition of the Property, (ii) entering into and performing
under the Loan and the Loan Documents, and (iii) all activities necessary, incidental
or appropriate thereto or otherwise required or permitted under Borrower’s Operating
Agreement, the Loan and/or the Loan Documents;

     (ii) not acquire or own any material assets other than (i) the Property, and
(ii) such other assets necessary, incidental or appropriate for or to the
acquisition, construction, development, ownership, operation, leasing, management,
maintenance and/or sale or other disposition of the Property;

26

 

     (iii) to the fullest extent permitted under applicable law, not merge into or
consolidate with any person or entity or dissolve, terminate or liquidate in whole or
in part, transfer or otherwise dispose of all or substantially all of its assets or
change its legal structure, except as permitted pursuant to the Loan Documents;

     (iv) (i) observe its organizational formalities and preserve its existence as an
entity duly organized, validly existing and in good standing under the laws of the
State of Delaware, and qualified to do business in the Commonwealth of Virginia, and
(ii) not, so long as the Loan is outstanding, without the prior written consent of
Lender, amend, modify, terminate or fail to comply with the provisions of the
Operating Agreement or the Certificate of Formation of the Borrower, except as
otherwise permitted under Borrower’s Operating Agreement;

     (v) use its own separate stationery, invoices and checks;

     (vi) not commingle its assets with the assets of any other person or entity;

     (vii) not incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than (i) the Loan and/or obligations otherwise
permitted under the Loan Documents, and (ii) Trade Payables incurred in the course of
its business of owning, constructing, developing, managing, operating, leasing,
renovating and maintaining the Property, provided that such Trade Payables (A) are
not
evidenced by a note, (B) are paid within sixty (60) days of the date incurred,
unless contested in good faith, and (C) do not exceed, in the aggregate, four percent
(4%) of the outstanding principal balance of the Note at any one time.

     (viii) pay its own debts and liabilities from its own assets; provided, however,
the foregoing shall not require the member of Borrower or any other person or entity
to make any additional capital contributions to Borrower;

     (ix) (i) maintain its records (including financial statements), books of account
and bank accounts separate and apart from those of any other person or entity, (ii)
not permit its assets or liabilities to be listed as assets or liabilities on the
financial statement of any other person or entity and (iii) not include the assets or
liabilities of any other person or entity on its financial statements; provided,
however, that the Borrower’s and/or such person’s or entity’s financial position,
assets, liabilities, results of operations and cash flows may be included in the
consolidated financial and/or tax reporting statements and/or returns of Affiliate of
the Borrower or such person or entity, as the case may be;

     (x) not enter into any contract or agreement with the member of Borrower or any
Affiliate of Borrower or any member, general partner, principal or Affiliate thereof,
except upon terms and conditions that are commercially reasonable, intrinsically fair
and substantially similar to those that would be available on an arms length basis
with unrelated third parties;

     (xi) not fail to correct any known misunderstandings regarding the
separate identity of Borrower;

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     (xii) not guarantee or become obligated for the debts of any other person or
entity or hold itself out to be responsible for the debts of another person or
entity, except as otherwise set forth in the Loan Documents;

     (xiii) not make any loans or advances to any other person or entity, and shall
not acquire obligations or securities of any other person or entity, except as
otherwise set forth in the Loan Documents;

     (xiv) file its own tax returns, unless Borrower’s tax reporting is required to
be included on the tax returns of the sole member of Borrower or other Affiliates as
part of a consolidated group;

     (xv) hold itself out to the public as a legal entity separate and distinct from
any other person or entity;

     (xvi) maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its contemplated
business operations; provided, however, the foregoing shall not require the member of
Borrower or any other person or entity to make any additional capital contributions
to Borrower;

     (xvii) not, except for federal and state tax reporting purposes, hold itself out
as or be considered as a department or division of (i) the member of Borrower or any
Affiliate of Borrower, (ii) any Affiliate of the member of Borrower, or (iii) any
other person or entity;

     (xviii) allocate fairly and reasonably any overhead expenses for office space
that is shared with an Affiliate; provided, however, the foregoing shall not require
the member of Borrower or any other person or entity to make any additional capital
contributions to Borrower;

     (xix) not pledge its assets for the benefit of any other person or entity, other
than with respect to the Loan;

     (xx) maintain a sufficient number of employees in light of its contemplated
business operations;

     (xxi) hold its assets in its own name; and

     (xxii) not have any of its obligations guaranteed by an Affiliate, except by the
member of Borrower or its Affiliate in connection with the Loan.

     (d) Organizational Documents. The organizational documents of Borrower shall
provide that:

     (i) the business and affairs of Borrower shall be managed by or under the sole
member of Borrower, provided that at all times there shall be at least two duly
appointed independent managers (each, an “Independent Manager”) of Borrower
reasonably satisfactory to Lender who shall not have been at the time of such
individual’s initial appointment, and shall not have been at anytime during the
proceeding five years, either:

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     (A) A stockholder, partner, member (other than a special member),
director, officer employee, manager, attorney or counsel of Borrower or any
Affiliate of either of them (other than his or her service as an Independent
Manager or similar capacity of Borrower or any of its Affiliates, excluding,
however, any Affiliate owning a direct or indirect interest in Borrower);

     (B) A customer or supplier of Borrower or any of its Affiliates (other
than an Independent Manager provided by a corporate services company that
provides independent managers in the ordinary course of its business) (a
“Business Party”);

     (C) A person controlling or under common control with any such
stockholder, partner, member, director, officer, employee, manager, attorney,
counsel or Business Party; or

     (D) Any member of the immediate family of a person described in (A), (B)
or (C).

     (ii) Borrower shall not take any action which, under the terms of its articles
of organization, operating agreement or other organizational documents, requires the
written consent of each Independent Manager without obtaining the written consent of
each Independent Manager.

     (e) Special Member. As used in this Section, the following terms shall have
the meanings set forth herein: The organizational documents of Borrower shall provide that,
as long as any Debt remains outstanding, upon the occurrence of any event that causes the
sole member of Borrower to cease to be a member of Borrower (other than (i) upon an
assignment by such member of all of its limited liability company interest in Borrower and
the admission of the transferee, if permitted pursuant to the organizational documents of
Borrower and the Loan Documents, or (ii) the resignation of such member and the admission of
an additional member of Borrower, if permitted pursuant to the organizational documents of
Borrower and the Loan Documents), each person acting an Independent Managers of Borrower
shall, without any action of any person or entity and simultaneously with the sole member of
Borrower ceasing to be a member of Borrower, automatically be admitted as a member of
Borrower (the “Special Member”) and shall preserve and continue the existence of Borrower
without dissolution. The organizational documents of Borrower shall further provide that
for so long as any Debt is outstanding, no Special Member may resign or transfer its rights
as Special Member unless (i) a successor Special Member has been admitted to Borrower as a
Special Member, and (ii) such successor Special Member has also accepted its appointment as
an Independent Manager.

     (f) Definitions. As used in this Section, the following terms shall have the
meanings set forth herein:

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     (i) “Affiliate” means a person or entity that directly or indirectly (through
one or more intermediaries) controls, is controlled by, or is under common control of
or with, the person or entity specified; and

     (ii) “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person or entity,
whether through the ownership of voting securities or general partnership or managing
member interests, by contract or otherwise. “Controlling” and “controlled” shall have
correlative meanings. Without limiting the generality of the foregoing, a person or
entity shall be deemed to control any other person or entity in which it owns,
directly or indirectly, a majority of the ownership interests.

     SECTION 4.4 RESTORATION AFTER CASUALTY/CONDEMNATION. For the purposes of this Section 4.4,
the term “Net Proceeds” shall mean, as applicable, (1) the net amount of all insurance proceeds
under the Policies carried pursuant to Subsections 3.3(a)(i) (Property Insurance), (iii) (Boiler
and Machinery), (iv) (Builder’s Risk), (v) (Ordinance/Law Coverage), and (vi) (Personal Property)
of this Security Instrument as a result of such damage or destruction, or (2) the net amount of all
proceeds from insurance or Condemnation Awards relating to the Condemnation Action, in each case
after deduction of Lender’s reasonable costs and expenses (including reasonable counsel fees), if
any, in collecting the same. If the Property is damaged or destroyed, in whole or in
part, by fire or other casualty (a “Casualty Loss”) or if the Property or any portion thereof
is taken, or threatened to be taken, in any condemnation or eminent domain proceeding (whether
instituted or threatened, a “Condemnation Action”), the following provisions shall apply in
connection with any Insurance Restoration or Condemnation Restoration (collectively the
“Restoration”):

     (a) The Net Proceeds shall be disbursed directly to Borrower if each of the following
conditions are satisfied: (i) the Net Proceeds do not exceed the greater of $30,000.00 or 1%
of the initial principal balance of the Loan (“Availability Threshold”), (ii) the cost of
completing the Restoration as reasonably estimated by Borrower is less than or equal to the
Availability Threshold, (iii) no Event of Default or Default has occurred and is continuing,
(iv) the Property and the use thereof after the Restoration will be in compliance with, and
permitted under, all applicable zoning laws, ordinances, rules and regulations (including
all applicable Environmental Laws, and (v) such Casualty Loss or Condemnation Action does
not materially impair access to the Property or the Improvements. Borrower shall be
permitted and is obligated to settle any insurance claims with respect to the Net Proceeds
that are, in the aggregate, less than or equal to the Availability Threshold unless an Event
of Default or Default has occurred and is continuing. Lender shall have the right to
participate in and approve any settlement for insurance claims with respect to the Net
Proceeds that in the aggregate are equal to or greater than the Availability Threshold.
Borrower hereby grants to Lender an irrevocable power of attorney coupled with an interest
for the purpose of filing and prosecuting such claim and collecting and making receipt for
any such payment, which such power may be exercised by Lender after the occurrence of an
Event of Default or Default. If the Net Proceeds are received by Borrower, such Net
Proceeds shall, until the completion of the related work, be held in trust for Lender and
shall be segregated from other funds of Borrower to be used to pay for the cost of the
Restoration in accordance with the terms hereof. Borrower shall commence and diligently
prosecute to completion the Restoration of the Property to as nearly as possible the
condition it was in immediately prior to such Casualty Loss or Condemnation Action.

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     (b) If the Net Proceeds are greater than the Availability Threshold, such Net Proceeds
shall, subject to the provisions of the Leases that are superior to the lien of this
Security Instrument or with respect to which subordination and non-disturbance agreements
binding upon Lender have been entered into concerning the deposits of Net Proceeds, be
forthwith paid to Lender to be held by Lender in a segregated account to be made available
to Borrower for the Restoration in accordance with the provisions of this Subsection 4.4(b).

     (i) The Net Proceeds shall be made available to Borrower for payment of, or
reimbursement of Borrower’s reasonable and customary expenses in connection with, the
Restoration, subject to the following conditions:

     (A) no Event of Default or any Default has occurred and is continuing;

     (B) Lender is furnished, within a reasonable period of time prior to
request for initial disbursement, with (i) an estimate of the costs of the
Restoration, which estimate shall be accompanied by an independent architect’s
certification as to such costs, and (ii) appropriate plans and specifications
for the
Restoration, which plans and specifications shall be subject to Lender’s
approval;

     (C) Lender determines that the Net Proceeds, together with any cash or
cash equivalent deposited by Borrower with Lender, are sufficient to cover the
costs of the Restoration as certified by the independent architect;

     (D) if the Net Proceeds are insurance proceeds, less than fifty percent
(50%) of the total floor area of the Improvements has been damaged or
destroyed or rendered unusable as a result of such Casualty Loss, or, if the
Net Proceeds are Condemnation Awards, less than twenty-five percent (25%) of
the Land constituting the Property is taken and such Land that is taken is
located along the perimeter or periphery of the Property and no portion of the
Improvements is located on such Land;

     (E) the fair market value of the Improvements that has been damaged,
destroyed or rendered unusable is less than (1) thirty percent (30%) in the
event of a Casualty Loss or (2) fifteen percent (15%) in the event of a
Condemnation Action;

     (F) Lender determines that any operating deficits, including all
scheduled payments of principal and interest under the Note that will be
incurred with respect to the Property as a result of the occurrence of any
such Casualty Loss or Condemnation Action, whichever the case may be, will be
covered out of (1) the Net Proceeds, (2) business interruption and/or loss of
“rental income” insurance, or (3) other funds of Borrower;

     (G) Lender determines that, upon the completion of the Restoration and
related lease-up, if applicable, the net cash flow of the Property will be
restored to a level sufficient to cover all carrying costs and operating

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expenses of the Property, including debt service on the Note at a coverage
ratio (after deducting replacement reserve requirements and reserves for
tenant improvements and leasing commissions from net operating income) equal
to or greater than the coverage ratio calculated and assumed by Lender in
connection with the origination of the Loan or, if lower, the coverage ratio
that existed as of the date immediately preceding such Casualty Loss or
Condemnation Action;

     (H) the Restoration can reasonably be completed on or before the earliest
to occur of (1) twelve (12) months from the date of the Casualty Loss or
Condemnation Action, (2) six (6) months prior to the Maturity Date (as defined
in the Note), (3) the earliest date required for such completion under the
terms of any Leases, or (4) such time as may be required under applicable
zoning law, ordinance, rule or regulation in order to repair and restore the
Property to as nearly as possible the condition it was in immediately prior to
such Casualty Loss or Condemnation Action;

     (I) the Property and the use thereof after the Restoration will be in
compliance with, and permitted under, all applicable zoning laws, ordinances,
rules and regulations (including all applicable Environmental Laws); and

     (J) such Casualty Loss or Condemnation Action does not materially impair
post-Restoration access to the Land or the Improvements.

     (ii) The Net Proceeds shall be held by Lender and constitute additional security
for the obligations until disbursed pursuant to this Subsection 4.4(b). The Net
Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time to
time during the course of the Restoration, upon receipt of evidence satisfactory to
Lender that (A) all materials installed and work and labor performed (except to the
extent that they are to be paid for out of the requested disbursement) in connection
with the Restoration have been paid for in full, and (B) there exist no notices of
pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to
file same, or any other liens or encumbrances of any nature whatsoever on the
Property arising out of the Restoration that have not either been fully bonded and
discharged of record or in the alternative fully insured to the satisfaction of
Lender by the title company insuring the lien of this Security Instrument.

     (iii) Lender shall have the use of the plans and specifications and all permits,
licenses and approvals required or obtained in connection with the Restoration. The
identity of the contractors, subcontractors and materialmen engaged in the
Restoration, as well as the contracts under which they have been engaged, shall be
subject to prior review and approval by Lender and an independent consulting
engineer, architect, or other expert selected by Lender (the “Restoration
Consultant”), such approval not to be unreasonably withheld or delayed. Borrower
shall pay all costs and expenses incurred by Lender in connection with making the Net
Proceeds available for the Restoration including the fees and expenses of Lender’s
attorneys and the Restoration Consultant.

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     (iv) In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs actually incurred from time to
time for work in place as part of the Restoration, as certified by the Restoration
Consultant, minus the Restoration Retainage. The term “Restoration Retainage” as
used in this Subsection 4.4(b) shall mean an amount equal to ten percent (10%) of the
costs actually incurred for work in place as part of the Restoration, as certified by
the Restoration Consultant. The Restoration Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this Subsection 4.4(b),
be less than the amount actually held back by Borrower from contractors,
subcontractors and materialmen engaged in the Restoration. The Restoration Retainage
shall not be released until the Restoration Consultant certifies to Lender that the
Restoration has been completed in accordance with the provisions of this Subsection
4.4(b) and that all approvals necessary for the re-occupancy and use of the Property
have been obtained from all appropriate governmental and quasi-governmental
authorities, and Lender receives evidence satisfactory to Lender that the costs of
the Restoration have been paid in full or will be
paid in full out of the Restoration Retainage, provided, however, that Lender
will release the portion of the Restoration Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as of the date
upon which the Restoration Consultant certifies to Lender that the contractor,
subcontractor or materialman has satisfactorily completed all work and has supplied
all materials in accordance with the provisions of the contractor’s, subcontractor’s
or materialman’s contract, and the contractor, subcontractor or materialman delivers
the lien waivers and evidence of payment in full of all sums due to the contractor,
subcontractor or materialman as may be reasonably requested by Lender or by the title
company insuring the lien of this Security Instrument. If required by Lender, the
surety company, if any, that issued a payment or performance bond with respect to the
contractor, subcontractor or materialman shall approve the release of any such
portion of the Restoration Retainage.

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

     (vi) If at any time the Net Proceeds or the undisbursed balance thereof shall
not, in Lender’s determination, be sufficient to pay in full the balance of the costs
that are estimated by the Restoration Consultant to be incurred in connection with
the completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender before any further disbursement of the Net Proceeds
shall be made. The Net Proceeds Deficiency deposited with Lender shall be held by
Lender and shall be disbursed for costs actually incurred in connection with the
Restoration on the same conditions applicable to the disbursement of the Net
Proceeds, and until so disbursed pursuant to this Subsection 4.4(b) shall constitute
additional security for the obligations.

     (vii) The excess, if any, of the Net Proceeds and the remaining balance, if any,
of the Net Proceeds Deficiency deposited with Lender after the Restoration Consultant
certifies to Lender that the Restoration has been completed in accordance with the
provisions of this Subsection 4.4(b), and the receipt by Lender of evidence
satisfactory to Lender that all costs incurred in connection with the Restoration
have been paid in full, shall be remitted by Lender to Borrower, provided no Event of
Default or Default shall have occurred and shall be continuing.

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     (c) All Net Proceeds not required (i) to be made available for the Restoration or (ii)
to be returned to Borrower as excess Net Proceeds pursuant to Subsection 4.4(b)(vii) shall
be retained and applied by Lender toward the payment of the Debt whether or not then due and
payable in such order, priority and proportions as Lender shall deem proper or, at the
discretion of Lender, the same shall be paid, either in whole or in part, to Borrower. If
Lender shall receive and retain Net Proceeds, the lien of this Security Instrument shall be
reduced only by the amount received and retained by Lender and actually applied by Lender in
reduction of the Debt, and no Prepayment Consideration shall be payable solely in connection
with such application; provided, however, that notwithstanding the foregoing, if an Event of
Default or Default exists as of the date of such application, then any Net Proceeds applied
to the Debt
pursuant to this Section shall be subject to the Prepayment Consideration computed in
accordance with the terms of the Note.

ARTICLE 5 — REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants to Lender that:

     SECTION 5.1 WARRANTY OF TITLE. Borrower has good, marketable and indefeasible title to the
Property and has the right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer,
and convey the same and that Borrower possesses an unencumbered fee simple absolute estate in the
Land and the Improvements, and that it owns the Property free and clear of all liens, encumbrances
and charges whatsoever except for those exceptions shown in the title insurance policy insuring the
lien of this Security Instrument (the “Permitted Exceptions”), none of which, individually or in
the aggregate, materially (a) interfere with the benefits of the security intended to be provided
by this Security Instrument, (b) affect the value or marketability of the Property, (c) impair the
use or operation of the Property for the uses currently made thereof, or (d) impair Borrower’s
ability to pay its obligations in a timely manner. Borrower shall forever warrant, defend and
preserve the title and the validity and priority of the lien of this Security Instrument and shall
forever warrant and defend the same to Lender against the claims of all persons whomsoever.

     SECTION 5.2 AUTHORITY. Borrower (and the undersigned representative of Borrower, if any) has
full power, authority and legal right to execute this Security Instrument, and to mortgage, grant,
bargain, sell, pledge, assign, warrant, transfer and convey the Property pursuant to the terms
hereof and to keep and observe all of the terms of this Security Instrument on Borrower’s part to
be performed.

     SECTION 5.3 LEGAL STATUS AND AUTHORITY. Borrower (a) is duly organized, validly existing and
in good standing under the laws of its state of organization or incorporation; (b) is duly
qualified to transact business and is in good standing in the State where the Property is located;
and (c) has all necessary approvals, governmental and otherwise, and full power and authority to
own the Property and carry on its business as now conducted and proposed to be conducted. Borrower
now has and shall continue to have the full right, power and authority to operate and lease the
Property, to encumber the Property as provided herein and to perform all of the other obligations
to be performed by Borrower under the Note, this Security Instrument and the Loan Documents.

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     SECTION 5.4 VALIDITY OF DOCUMENTS. (a) The execution, delivery and performance of the Note,
this Security Instrument and the Loan Documents and the borrowing evidenced by the Note (i) are
within the power and authority of Borrower; (ii) have been authorized by all requisite
organizational action; (iii) have received all necessary approvals and consents, corporate,
governmental or otherwise; (iv) will not violate, conflict with, result in a breach of or
constitute (with notice or lapse of time, or both) a default under any provision of law, any order
or judgment of any court or governmental authority, the articles of incorporation, by-laws,
partnership or operating agreement, or other governing instrument of Borrower, or any indenture,
agreement or other instrument to which Borrower is a party or by which it
or any of its assets or the Property is or may be bound or affected; (v) will not result in
the creation or imposition of any lien, charge or encumbrance whatsoever upon any of its assets,
except the lien and security interest created hereby; and (vi) will not require any authorization
or license from, or any filing with, any governmental or other body (except for the recordation of
this instrument in appropriate land records in the State where the Property is located and except
for Uniform Commercial Code filings relating to the security interest created hereby), and (b) the
Note, this Security Instrument and the Loan Documents constitute the legal, valid and binding
obligations of Borrower.

     SECTION 5.5 LITIGATION. There is no action, suit or proceeding, judicial, administrative or
otherwise (including any condemnation or similar proceeding), pending or, to the best of Borrower’s
knowledge, threatened or contemplated against Borrower, any person guaranteeing the payment of the
Debt or any portion thereof or performance by Borrower of any terms of this Security Instrument (a
“Guarantor”), if any, any person liable under that certain Environmental Indemnity Agreement of
even date herewith or any other indemnity agreement entered into in favor of Lender in connection
with the Loan (“Indemnitor”), if any, or against or affecting the Property that (a) has not been
disclosed to Lender, and has a material, adverse effect on the Property or Borrower’s, any
Guarantor’s or any Indemnitor’s ability to perform its obligations under the Note, this Security
Instrument or the Loan Documents, or (b) is not adequately covered by insurance, each as determined
by Lender.

     SECTION 5.6 STATUS OF PROPERTY.

     (a) No portion of the Improvements is located in an area identified by the Secretary of
Housing and Urban Development or any successor thereto as an area having special flood
hazards pursuant to the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, or the National Flood Insurance Reform Act of 1994, as each may be
amended, or any successor law, or, if any portion of the Improvements is now or at any time
in the future located within any such area, Borrower has obtained and will maintain the
insurance prescribed in Section 3.3 hereof.

     (b) Borrower has obtained all necessary certificates, licenses and other approvals,
governmental and otherwise, necessary for the operation of the Property and the conduct of
its business and all required zoning, building code, land use, environmental and other
similar permits or approvals, all of which are in full force and effect as of the date
hereof and not subject to revocation, suspension, forfeiture or modification.

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     (c) The Property and the present and contemplated use and occupancy thereof are in full
compliance with all applicable zoning ordinances, building codes, land use and Environmental
Laws and other similar laws.

     (d) The Property is served by all utilities required for the current or contemplated
use thereof. All utility service is provided by public utilities and the Property has
accepted or is equipped to accept such utility service.

     (e) All public roads and streets necessary for service of and access to the Property
for the current or contemplated use thereof have been completed, are serviceable and
all-weather and are physically and legally open for use by the public.

     (f) The Property is served by public water and sewer systems.

     (g) The Property is free from damage caused by fire or other casualty.

     (h) All costs and expenses of any and all labor, materials, supplies and equipment used
in the construction of the Improvements have been paid in full.

     (i) Borrower has paid in full for, and is the owner of, all furnishings, fixtures and
equipment (other than tenants’ property) used in connection with the operation of the
Property, free and clear of any and all security interests, liens or encumbrances, except
the lien and security interest created hereby.

     (j) All liquid and solid waste disposal, septic and sewer systems located on the
Property are in a good and safe condition and repair and in compliance with all Applicable
Laws.

     (k) All security deposits relating to the Leases reflected on the certified rent roll
delivered to Lender have been collected by Borrower except as noted on the certified rent
roll.

     (l) Borrower has received no notice of an actual or threatened condemnation or eminent
domain proceeding by any public or quasi-public authority.

     (m) All the Improvements lie within the boundaries of the Property.

     SECTION 5.7 NO FOREIGN PERSON. Borrower is not a “foreign person” within the meaning of
Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended and the related Treasury
Department regulations, including temporary regulations.

     SECTION 5.8 SEPARATE TAX LOT. The Property is assessed for real estate tax purposes as one or
more wholly independent tax lot or lots, separate from any adjoining land or improvements not
constituting a part of such lot or lots, and no other land or improvements is assessed and taxed
together with the Property or any portion thereof.

     SECTION 5.9 ERISA COMPLIANCE.

     (a) As of the date hereof and throughout the term of this Security Instrument, (i)
Borrower is not and will not be an “employee benefit plan” as defined in Section 3(3) of
ERISA, which is subject to Title I of ERISA, and (ii) the assets of Borrower do not and will
not constitute “plan assets” of one or more such plans for purposes of Title I of ERISA; and

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     (b) As of the date hereof and throughout the term of this Security Instrument, (i)
Borrower is not and will not be a “governmental plan” within the meaning of Section 3(3) of
ERISA, and (ii) transactions by or with Borrower are not and will not be subject to state
statutes applicable to Borrower regulating investments of and fiduciary obligations
with respect to governmental plans.

     SECTION 5.10 LEASES. Except as disclosed in the rent roll for the Property delivered to and
approved by Lender, (a) Borrower is the sole owner of the entire lessor’s interest in the Leases;
(b) the Leases are valid and enforceable; (c) the current terms of the Leases including all
effective alterations, modifications and amendments to the Leases are reflected in the certified
rent roll delivered to and approved by Lender; (d) none of the Rents reserved in the Leases have
been assigned or otherwise pledged or hypothecated (except to Lender); (e) none of the Rents have
been collected for more than one (1) month in advance (except a security deposit shall not be
deemed rent collected in advance); (f) the premises demised under the Leases have been completed
and the tenants under the Leases have accepted the same and have taken possession of the same on a
rent-paying basis; (g) there exist no offsets or defenses to the payment of any portion of the
Rents; (h) Borrower has received no notice from any tenant challenging the validity or
enforceability of any Lease; (i) there are no agreements with the tenants under the Leases other
than expressly set forth in each Lease; (j) the Leases are valid and enforceable against Borrower
and the tenants set forth therein; (k) no Lease contains an option to purchase, right of first
refusal to purchase, or any other similar provision; (l) no person or entity has any possessory
interest in, or right to occupy, the Property except under and pursuant to a Lease; (m) each Lease
(other than a Residential Lease, as defined in the Assignment of Leases and Rents of even date
herewith) is subordinate to this Security Instrument, either pursuant to its terms or a recorded
subordination agreement; (n) no Lease has the benefit of a non-disturbance agreement that would be
considered unacceptable to prudent institutional lenders; and (o) no brokerage commissions or
finders fees are due and payable regarding any Lease.

     SECTION 5.11 FINANCIAL CONDITION; NO PRIOR BANKRUPTCY. Borrower is solvent, and no
bankruptcy, reorganization, insolvency or similar proceeding under any state or federal law with
respect to Borrower has been initiated, and it has received reasonably equivalent value for the
granting of this Security Instrument.

     SECTION 5.12 TAXES. Borrower, any Guarantor and any Indemnitor have filed, or timely obtained
extensions for the filing of, all federal, state, county, municipal, and city income and other tax
returns required to have been filed by them and have paid all taxes and related liabilities which
have become due pursuant to such returns or pursuant to any assessments received by them. Neither
Borrower, any Guarantor nor any Indemnitor knows of any basis for any additional assessment in
respect of any such taxes and related liabilities for prior years.

     SECTION 5.13 MAILING ADDRESS. Borrower’s mailing address, as set forth in the opening
paragraph hereof or as changed in accordance with Article 16, is true and correct.

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     SECTION 5.14 NO CHANGE IN FACTS OR CIRCUMSTANCES. All information in the application for the
loan submitted to Lender (the “Loan Application”) and in all financial statements, rent rolls,
reports, certificates and other documents submitted in connection with the Loan Application or in
satisfaction of the terms thereof, are accurate, complete and correct in all respects. There has
been no adverse
change in any condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading.

     SECTION 5.15 DISCLOSURE. Borrower has disclosed to Lender all material facts and has not
failed to disclose any material fact that could cause any representation or warranty made herein to
be materially misleading.

     SECTION 5.16 THIRD PARTY REPRESENTATIONS. Each of the representations and the warranties made
by each Guarantor and Indemnitor herein or in any Loan Document(s) is true and correct in all
material respects.

     SECTION 5.17 ILLEGAL ACTIVITY. No portion of the Property has been or will be purchased,
improved, fixtured, equipped or furnished with proceeds of any criminal or other illegal activity
and to the best of Borrower’s knowledge, there are no illegal activities or activities relating to
controlled substances at the Property.

     SECTION 5.18 MANAGEMENT. The Property shall be managed by either (a) Borrower or, if approved
by Lender, an affiliate of Borrower, for so long as Borrower or said affiliate of Borrower
possesses sufficient experience in managing and operating commercial properties similar in size,
scope, uses and value as the Property, as determined by Lender; or (b) a professional property
management company approved in writing by Lender. Management by an affiliate of Borrower or a
professional property management company shall be pursuant to a written agreement approved by
Lender. In no event shall any manager be removed or replaced, or shall the terms of any management
agreement be modified or amended without the prior written consent of Lender. If (i) an Event of
Default has occurred, (ii) a default has occurred under any management contract then in effect that
is not cured within any applicable grace or cure period, or (iii) any manager of the Property
becomes bankrupt or insolvent, Lender shall have the right to immediately terminate, or to direct
Borrower to immediately terminate, such manager, and to retain, or to direct Borrower to retain, a
new manager approved by Lender. Lender’s approval of a replacement property manager shall not be
unreasonably withheld provided the proposed property manager is a Qualifying Manager (as
hereinafter defined). As used herein, “Qualifying Manager” means a reputable and experienced
management organization reasonably satisfactory to Lender, which organization or its principals
possess at least ten (10) years experience in managing commercial properties similar in size,
scope, use and value of the Property and which, on the date Lender determines whether such
management organization is a Qualifying Manager, (A) manages a quantity of square footage
acceptable to Lender of the same property type as the Property, and (B) upon Lender’s request,
obtains prior written confirmation from each Rating Agency that management of the Property by such
management organization will not cause a downgrading, withdrawal or qualification of the then
current rating of the Securities issued in connection with any Securitization.

     SECTION 5.19 NON-CONSOLIDATION. If Lender has required the delivery of a substantive
non-consolidation opinion by Borrower’s counsel in connection with the closing of the Loan, all of
the assumptions made in such non-consolidation opinion letter and any subsequent non-

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consolidation
opinion delivered in accordance with the terms and conditions of this Security Instrument and/or
the Note, including any certificates or exhibits attached to such opinion (the “Non-Consolidation
Opinion”), are true and
correct in all respects. Borrower has complied and will comply with all of the assumptions
made with respect to it in the Non-Consolidation Opinion. Each entity other than Borrower with
respect to which an assumption is made in the Non-Consolidation Opinion has complied and will
continue to comply with all of the assumptions made with respect to it in the Non-Consolidation
Opinion.

ARTICLE 6 — DEBTOR/CREDITOR RELATIONSHIP

     SECTION 6.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship between Borrower and Lender
is solely that of debtor and creditor, and Lender has no fiduciary or other special relationship
with Borrower, and no term or condition of any of the Note, this Security Instrument or the Loan
Documents shall be construed so as to deem the relationship between Borrower and Lender to be other
than that of debtor and creditor.

     SECTION 6.2 NO RELIANCE ON LENDER The members, partners, principals or shareholders of
Borrower, as applicable, are experienced in the ownership and operation of properties similar to
the Property, and Borrower and Lender are relying solely upon such expertise in connection with the
ownership and operation of the Property. Borrower is not relying on Lender’s expertise, business
acumen or advice in connection with the Property.

     SECTION 6.3 NO LENDER OBLIGATIONS Notwithstanding any provision of the Loan Documents, Lender
is not undertaking the performance of (a) any obligations under the Leases; or (b) any obligations
with respect to such agreements, contracts, certificates, instruments, franchises, permits,
trademarks, licenses and other documents. By accepting or approving anything required to be
observed, performed or fulfilled or to be given to Lender pursuant to the Loan Documents, including
any officer’s certificate, balance sheet, statement of profit and loss or other financial
statement, survey, appraisal, or insurance policy, Lender shall not be deemed to have warranted,
consented to, or affirmed the sufficiency, the legality or the effectiveness of same, and such
acceptance or approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.

     SECTION 6.4 RELIANCE OF LENDER ON BORROWER REPRESENTATIONS. Borrower recognizes and
acknowledges that in accepting the Loan Documents, Lender is expressly and primarily relying on the
truth and accuracy of the warranties and representations set forth herein without any obligation to
investigate the Property and notwithstanding any investigation of the Property by Lender; that such
reliance existed on the part of Lender prior to the date hereof; that the warranties and
representations are a material inducement to Lender in accepting the Loan Documents; and that
Lender would not be willing to make the Loan and accept this Security Instrument in the absence of
the warranties and representations as set forth herein.

ARTICLE 7 — FURTHER ASSURANCES

     SECTION 7.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower
forthwith upon the execution and delivery of this Security Instrument and thereafter, from
time to time, shall cause this Security Instrument and any of the Loan Documents creating a lien or
security interest or evidencing the lien hereof upon the Property and each instrument of further
assurance to be filed,

39

 

registered or recorded in such manner and in such places as may be required
by any present or future law in order to publish notice of and fully to protect and perfect the
lien or security interest hereof upon, and the interest of Lender in, the Property. Borrower shall
pay all taxes, filing, registration or recording fees, and all expenses incident to the
preparation, execution, acknowledgment and/or recording of the Note, this Security Instrument, the
Loan Documents, any note or mortgage supplemental hereto, any security instrument with respect to
the Property and any instrument of further assurance, and any modification or amendment of the
foregoing documents, and all federal, state, county and municipal taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and delivery of this
Security Instrument, any mortgage supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, and any modification or amendment of the foregoing
documents, except where prohibited by law so to do.

     SECTION 7.2 FURTHER ACTS, ETC. Borrower shall, at the cost of Borrower, and without expense
to Lender, do, execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, mortgages, assignments, notices of assignments, transfers and assurances as Lender
shall, from time to time, reasonably require, for the better assuring, conveying, assigning,
transferring, and confirming unto Lender the property and rights hereby mortgaged, granted,
bargained, sold, conveyed, confirmed, pledged, assigned, warranted and transferred or intended now
or hereafter so to be, or which Borrower may be or may hereafter become bound to convey or assign
to Lender, or for carrying out the intention or facilitating the performance of the terms of this
Security Instrument, including promptly notifying Lender of any commercial tort claim in which
Borrower has an interest and executing any documentation required by Lender to create and perfect
any security interest in such commercial tort claim, or for filing, registering or recording this
Security Instrument, or for complying with all Applicable Laws. Borrower, on demand, shall execute
and deliver and hereby authorizes Lender to execute in the name of Borrower, or without the
signature of Borrower to the extent Lender may lawfully do so, one or more financing statements,
chattel mortgages or other instruments, to evidence or perfect more effectively the security
interest of Lender in the Property. Borrower grants to Lender an irrevocable power of attorney
coupled with an interest for the purpose of exercising and perfecting any and all rights and
remedies available to Lender pursuant to this Section 7.2 or Section 7.1.

     SECTION 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.

     (a) If any law is enacted or adopted or amended after the date of this Security
Instrument that deducts the Debt from the value of the Property for the purpose of taxation
or which imposes a tax, either directly or indirectly, on the Debt or Lender’s interest in
the Property, Borrower shall pay the tax, with interest and penalties thereon, if any. If
Lender is advised by its counsel that the payment of tax by Borrower would be unlawful or
taxable to Lender or unenforceable or provide the basis for a defense of usury, then Lender
shall have the option to declare the Debt immediately due and payable (a “Tax Change
Acceleration”) by giving Borrower not less than ninety (90) days’ written notice of such Tax
Change Acceleration. No Prepayment Consideration shall be payable solely in connection with
a Tax
Change Acceleration; provided, however, that notwithstanding the foregoing, if an Event
of Default or Default exists as of the date of such Tax Change Acceleration, then the
Borrower’s payment of the Loan shall be subject to Prepayment Consideration computed in
accordance with the terms of the Note.

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     (b) Borrower shall not claim or demand or be entitled to any credit or credits on
account of the Debt for any part of the Taxes or Other Charges assessed against the
Property, or any part thereof, and no deduction shall otherwise be made or claimed from the
assessed value of the Property, or any part thereof, for real estate tax purposes by reason
of this Security Instrument or the Debt. If such claim, credit or deduction shall be
required by law, Lender shall have the option, by written notice of not less than ninety
(90) days, to declare the Debt immediately due and payable.

     (c) If at any time the United States of America, any State thereof or any subdivision
of any such State or other governmental authorities shall require revenue or other stamps to
be affixed to the Note, this Security Instrument, or any of the Loan Documents or impose any
other tax or charge on the same, Borrower shall pay for the same, with interest and
penalties thereon, if any.

     SECTION 7.4 ESTOPPEL CERTIFICATES.

     (a) Within twenty days after any request by Lender, Borrower shall furnish Lender or
any proposed assignee of the Loan with a statement, duly acknowledged and certified, setting
forth (i) the original principal amount of the Note, (ii) the unpaid principal amount of the
Note, (iii) the rate of interest of the Note, (iv) the terms of payment and Maturity Date,
(v) the date installments of interest and/or principal were last paid, (vi) that, except as
provided in such statement, there are no Defaults or Events of Default under this Security
Instrument or any of the other Loan Documents, (vii) that the Loan Documents are valid,
legal and binding obligations and have not been modified or if modified, giving particulars
of such modification, (viii) whether any offsets or defenses exist against the obligations
secured hereby and, if any are alleged to exist, a detailed description thereof, (ix) that
all Leases are in full force and effect and (provided the Property is not a residential
multifamily property) have not been modified (or if modified, setting forth all
modifications), (x) the date to which the Rents thereunder have been paid pursuant to the
Leases, (xi) whether or not, to the best knowledge of Borrower, any of the lessees under the
Leases are in default under the Leases, and, if any of the lessees are in default, setting
forth the specific nature of all such defaults, (xii) the amount of security deposits held
by Borrower under each Lease and that such amounts are consistent with the amounts required
under each Lease, and (xiii) as to any other matters reasonably requested by Lender and
reasonably related to the Leases, the obligations secured hereby, the Property or this
Security Instrument.

     (b) Within thirty days after any request by Lender, Borrower shall furnish Lender with
duly executed estoppel certificates from any one or more lessees as required by Lender
attesting to such facts regarding any Lease as Lender may require, including attestations
that each Lease covered thereby is in full force and effect with no defaults thereunder on
the part of any party, that none of the Rents have been paid more than one month in advance,
except as
security, and that the lessee claims no defense or offset against the full and timely
performance of its obligations under the Lease. Notwithstanding the foregoing, if the terms
of any Lease do not require the lessee to deliver an estoppel certificate upon request,
Borrower agrees that it shall use its best efforts to deliver to Lender, promptly upon
request, such an estoppel certificate with respect to such Lease.

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     SECTION 7.5 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an officer of Lender as to
the loss, theft, destruction or mutilation of the Note or any Loan Document that is not of public
record, and, in the case of any such mutilation, upon surrender and cancellation of such Note or
Loan Document, Borrower shall issue, in lieu thereof, a replacement Note or Loan Document, dated
the date of such lost, stolen, destroyed or mutilated Note or Loan Document in the same principal
amount thereof and otherwise of like tenor.

     SECTION 7.6 AMENDED FINANCING STATEMENTS. Borrower hereby authorizes Lender to file or cause
to be filed any financing statement or financing statement change that Lender deems necessary or
desirable to establish or maintain the validity, perfection and priority of the security interest
granted herein. At the request of the Lender, Borrower shall execute a certificate in form
satisfactory to the Lender listing the trade names under which Borrower intends to operate the
Property, and representing and warranting that Borrower does business under no other trade name
with respect to the Property.

ARTICLE 8 — DUE ON SALE/ENCUMBRANCE/CHANGE IN BORROWER

     SECTION 8.1 NO SALE/ENCUMBRANCE/CHANGE OF OWNERSHIP WITHOUT CONSENT.

     (a) Except as otherwise expressly provided in this Security Instrument, Borrower shall
not cause or permit any of the following (each a “Prohibited Transfer”) to occur without the
prior written consent of Lender in each instance: the voluntary or involuntary sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, grant of any options
with respect to, or any other transfer or disposition of (directly or indirectly,
voluntarily or involuntarily, by operation of law or otherwise, and whether or not for
consideration or of record) of a legal or beneficial interest (each a “Sale or Encumbrance”)
of the Property or any part thereof, or permit a Sale or Encumbrance of an interest in
Borrower or any shareholder, partner, member or non-member manager, or any direct or
indirect legal or beneficial owner of Borrower or any non-member manager (each a “Restricted
Party”), other than pursuant to Leases of space in the Improvements to tenants in accordance
with the provisions of Section 3.7. A Prohibited Transfer shall include (i) an installment
sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price
to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part
of the Property for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in, Borrower’s right,
title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a
corporation, any merger, consolidation or Sale or Encumbrance of such corporation’s stock or
the creation or issuance of new stock in one or a series of
transactions; (iv) if a Restricted Party is a limited or general partnership or joint
venture, any merger or consolidation or the change, removal, resignation or addition of a
general partner or the Sale or Encumbrance of the partnership interest of any general or
limited partner or any profits or proceeds relating to such partnership interests or the
creation or issuance of new limited partnership interests; (v) if a Restricted Party is a
limited liability company, any merger or consolidation or the change, removal, resignation
or addition of a managing member or non-member manager (or if no managing member, any
member) or the Sale or Encumbrance of the membership interest of a managing member (or if no
managing member, any member) or any profits or proceeds relating to such membership
interest, or the Sale or Encumbrance of non-

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managing membership interests or the creation or
issuance of new non-managing membership interests; (vi) if a Restricted Party is a trust or
nominee trust, any merger, consolidation or the Sale or Encumbrance of the legal or
beneficial interest in a Restricted Party or the creation or issuance of new legal or
beneficial interests; or (vii) the removal or the resignation of any manager (including any
manager in which Borrower has, directly or indirectly, any legal, beneficial or economic
interest (an “Affiliated Manager”)) other than in accordance with Section 5.18.

     (b) Notwithstanding the provisions of Sections 8.1(a), a transfer by devise or descent
or by operation of law upon the death of a member, partner or shareholder of a Restricted
Party shall not be deemed to be a Prohibited Transfer, nor shall the Sale or Encumbrance, in
one or a series of transactions, of not more than twenty-five percent (25%) of the stock,
limited partnership interests or non-managing membership interests (as the case may be) in a
Restricted Party; provided, however, no such transfers shall result in a change in “Control”
in the Restricted Party, and as a condition to each such transfer, Lender shall receive not
less than ten (10) days prior written notice of such proposed transfer. For the purpose of
this Article 8, “Control” shall mean the power to direct the management and policies of a
Restricted Party, directly or indirectly, whether through the ownership of voting securities
or other beneficial interests, by contract or otherwise.

     (c) Notwithstanding any provision in this Section 8.1 to the contrary, limited
partnership or membership interests, as applicable, in Borrower may be transferred without
Lender’s consent and without application of the Transfer Fee (i) among limited partners or
members, as applicable, of Borrower who are limited partners or members, as applicable, of
Borrower as of the date of this Security Instrument (each a “Current Owner”), and (ii) to
immediate family members (which shall be limited to a spouse, parent, child and grandchild
(each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the
benefit of Immediate Family Members of such Current Owner for bona fide estate planning
purposes (each, a “Permitted Transfer”), provided each of the following conditions is
satisfied: (A) no Event of Default has occurred and no event has occurred that with notice
and/or the passage of time, or both, would constitute an Event of Default; (B) Lender has
received Borrower’s notice of the Permitted Transfer no less than 15 days prior to the
commencement of such transfer; (C) no Indemnitor or Guarantor shall be released from any
guaranty or indemnity agreement by virtue of the Permitted Transfer; (D) Borrower shall be
responsible for the costs and expenses of documenting the Permitted Transfer; (E) Borrower
shall reimburse Lender for all actual costs and expenses incurred by Lender in connection
with the Permitted Transfer, whether or not consummated; (F) once the Permitted Transfer is
complete, the persons with Control of Borrower and management of the Property are the same
persons who have such Control and management rights immediately prior to the Permitted
Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in
connection with the Permitted Transfer promptly after execution thereof; (H) Borrower shall
have delivered satisfactory evidence to Lender that, following the Permitted Transfer,
Borrower shall continue to comply with the provisions of Section 4.3 hereof; and (I) upon
Lender’s request, deliver of a non-consolidation opinion acceptable to Lender.

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     SECTION 8.2 CONDITIONS TO LENDER’S CONSENT.

     (a) Without limiting Lender’s discretion to approve or disapprove any request from
Borrower for a waiver of the prohibition against Prohibited Transfers, Lender specifically
reserves the right to condition its consent to any waiver of a Prohibited Transfer upon the
satisfaction of the following minimum conditions:

	 	(i)	 	Lender has received Borrower’s written request for a transfer and
Lender has expressly approved such request in writing;
	 
	 	(ii)	 	no Event of Default or Default has occurred and is continuing;
	 
	 	(iii)	 	Borrower has paid Lender an application fee and a deposit for
legal fees, each in amounts determined by Lender. The legal fee deposit shall
be applied towards the legal fees and expenses incurred by Lender in connection
with such request for a transfer;
	 
	 	(iv)	 	Lender has determined that the proposed new owner/assignee (the
“New Borrower”) meets all of Lender’s Underwriting Standards (as hereinafter
defined);
	 
	 	(v)	 	Lender has determined that the Property meets all of the Lender’s
Underwriting Standards related to its financial condition, cash flow, operating
income, physical condition, management and operation;
	 
	 	(vi)	 	Borrower remits to Lender a fee (the “Transfer Fee”) in the
amount of one percent (1%) of the outstanding principal balance of the Debt as
of the date such transfer is consummated;
	 
	 	(vii)	 	New Borrower has executed and delivered such documentation and
agreements evidencing the transfer and, if applicable, the assumption of the
Loan, as may be required by Lender, including a release of Lender, its officers,
directors, employees and agents, from all claims and liability relating to the
transactions evidenced by the Loan Documents through and including the date of
the closing of the transfer, and an indemnification with respect thereto. All
such documentation shall be in form and substance satisfactory to Lender;
	 
	 	(viii)	 	If New Borrower assumes the Loan and a person or entity associated with New
Borrower approved by Lender in its discretion (a “New Guarantor”) agrees to be
liable for the obligations of the current Guarantor or Indemnitor under its
guaranty or indemnity agreement by executing a new guaranty and environmental
indemnity agreement in substantially similar form to any such existing
agreements, Lender shall release Borrower from its obligations arising under
Loan Documents, and any current Guarantor or Indemnitor from its obligations
under any guaranty or environmental indemnity agreement, as to acts or events or
omissions occurring or obligations arising after the date of the assumption of
the Loan, provided however such release shall not apply to any acts or events or
omissions which occurred prior to the date of the assumption of
the Loan, whether or not the effects of or damages from such acts or events or
omissions are apparent or ascertainable as of the date of such assumption;

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	 	(ix)	 	Lender has determined that New Borrower is in compliance with the
covenants set forth in this Security Instrument, including the covenants in
Section 4.3 hereof, if any;
	 
	 	(x)	 	Borrower has delivered to Lender, without any cost or expense to
Lender, such endorsements to Lender’s title insurance policy, hazard insurance
endorsements or certificates and other similar materials as Lender may deem
necessary, all in form and substance satisfactory to Lender, including an
endorsement or endorsements to the title insurance policy insuring the lien of
this Security Instrument, extending the effective date of such policy to the
date of execution and delivery (or, if later, of recording) of the assumption
agreement, with no additional exceptions added to such policy and insuring that
Borrower’s title to the Property is vested in the New Borrower;
	 
	 	(xi)	 	Borrower and New Borrower have furnished, if a corporation,
partnership or other entity, all documents evidencing each such party’s capacity
and good standing, and the qualification of the signers to execute any
assumption or other agreement, which papers shall include certified copies of
all documents relating to the organization and formation of Borrower, New
Borrower and the entities, if any, which are partners or members, as applicable,
of Borrower or the New Borrower;
	 
	 	(xii)	 	Borrower has reimbursed Lender for all costs and expenses
incurred by Lender in connection with such transfer (including engineering
and/or architect’s fees, environmental studies, title and UCC searches, credit
checks and attorney’s fees), whether or not any requested transfer is approved
or consummated; and
	 
	 	(xiii)	 	Borrower and New Borrower have delivered or caused to be delivered such other
documents and instruments, including legal opinions, as Lender shall determine
to be in the best interests of Lender, including, if required by any pooling and
servicing agreement following a securitization or otherwise deemed necessary or
desirable by Lender, the prior written confirmation by each applicable Rating
Agency of the proposed transfer.

For the purpose of this Section 8.2, “Lender’s Underwriting Standards” shall mean the actual
commercial loan underwriting standards of KeyBank National Association (or the person that is then
servicing the Loan) in effect at the time of the proposed transfer, or, if no such standards exist,
such standards which are then customary for a commercial lender in connection with a mortgage loan
of the size and type of the Borrower’s loan from Lender secured hereby.

     (b) All expenses incurred by Lender shall be payable by Borrower whether or not Lender
consents to the Prohibited Transfer. Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order to declare
the Debt immediately due and payable upon the occurrence of any Prohibited Transfer without
Lender’s consent. This provision shall apply to every Prohibited Transfer under
Section 8.2 or otherwise, whether or not Lender has consented to any previous Prohibited
Transfer.

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ARTICLE 9 – PREPAYMENT; DEFEASANCE

     The Debt may be prepaid or defeased only in accordance with the terms of the Note. If
Borrower has the right to prepay the Loan pursuant to the terms of the Note, Lender shall only be
obligated to release the lien of this Security Instrument if the Loan has been paid in full,
including the payment of any Prepayment Consideration. If Borrower has the right to cause the
Property to be released from the lien of the Security Instrument and the other Loan Documents
pursuant to a Defeasance (as such term may be defined in the Note), Lender shall only be obligated
to release the lien of this Security Instrument if the Defeasance has been consummated in
accordance with the terms of the Note or the Loan has been paid in full as expressly permitted
under the terms of the Note.

ARTICLE 10 — DEFAULT

     SECTION 10.1 EVENTS OF DEFAULT. Borrower acknowledges that Lender has relied upon all of the
terms, covenants or conditions of the Note, this Security Instrument and the other Loan Documents
in making the Loan to Borrower, and that the breach of or default in any such term, covenant and
condition may result in the acceleration of the Debt and the exercise of Lender’s remedies
hereunder and under the other Loan Documents. The occurrence of any one or more of the following
events shall constitute an “Event of Default” under the Note, this Security Instrument and each of
the other Loan Documents:

     (a) Borrower fails to make full and punctual payment of the Monthly Payment (as defined
in the Note) or any other amount due on a monthly basis under the Note, this Security
Instrument, or any other Loan Document within five (5) days after the date on which such
payment is due;

     (b) Borrower fails to make full payment of the Debt when due, whether on the Maturity
Date (as defined in the Note), upon acceleration or prepayment, or otherwise;

     (c) Borrower fails to make full and punctual payment of any Late Charges (as defined in
the Note), costs and expenses due hereunder, or any other sum of money required to be paid
to Lender hereunder or under the Note or any other Loan Document (other than any payment
described in subclauses (a), (b) or (d) of this Article 10.1), which failure is not cured on
or before the fifth (5th) day after Lender’s written notice to Borrower that such payment is
required; or

     (d) Borrower fails to make the full and punctual payment of Taxes or Other Charges as
required hereby;

     (e) Borrower fails to keep the Policies in full force and effect, or fails to promptly
deliver copies thereof to Lender upon request;

     (f) if a Prohibited Transfer occurs in violation of the provisions of Article 8, or
Borrower violates or does not comply with the provisions of Article 12 or 13 of this
Security Instrument;

46

 

     (g) if any representation or warranty of Borrower or any Guarantor or Indemnitor in any
guaranty or in any certificate, report, financial statement or other instrument or document
furnished to Lender shall have been false or misleading in any material respect when made;

     (h) Borrower shall make an assignment for the benefit of creditors or Borrower is not
paying debts as and when the same become due;

     (i) if (i) Borrower or any Guarantor or Indemnitor shall commence any case, proceeding
or other action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of
debtors, seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the Borrower or
any Guarantor or Indemnitor shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Borrower or any Guarantor or Indemnitor
any case, proceeding or other action of a nature referred to in clause (i) above that is not
dismissed within sixty (60) days of filing; or (iii) there shall be commenced against the
Borrower or any Guarantor or Indemnitor any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets; or (iv) the Borrower or any Guarantor or Indemnitor
shall take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the
Borrower or any Guarantor or Indemnitor shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due;

     (j) Borrower shall be in default under any other deed of trust, mortgage or security
agreement covering any part of the Property whether it be superior or junior in priority to
this Security Instrument (it not being implied by this clause that any such encumbrance will
be permitted);

     (k) the Property becomes subject to any mechanic’s, materialman’s or other lien (other
than a lien for local real estate taxes and assessments not then due and payable), and such
lien shall remain undischarged of record (by payment, bonding or otherwise) for a period of
thirty (30) calendar days;

     (l) Borrower fails to promptly and diligently cure any material violations of laws or
ordinances affecting the Property;

     (m) the occurrence of an event of default under any other Loan Document and the
expiration of any applicable grace or cure period thereunder;

     (n) INTENTIONALLY OMITTED;

     (o) if Borrower violates or does not comply with any of the provisions of Section 4.3
or Article 8 of this Security Instrument;

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     (p) if a Non-Consolidation Opinion was required in connection with the Loan, any of the
assumptions contained in the non-consolidation opinion were not true and correct as of the
date of such opinion or thereafter become untrue or incorrect in any respect; or

     (q) any breach or default hereunder by Borrower (including breach of or default under
any covenant herein), other than a default or breach set forth in any of Sections 10.1(a)
through (p), if such breach or default is not cured within thirty (30) days after written
notice from Lender to Borrower (provided that Borrower shall not be entitled to a cure
period hereunder if such breach or default is not capable of being cured as determined by
Lender), provided however that (i) if Lender determines that such breach or default cannot
reasonably be cured within such thirty (30) day period, (ii) Borrower shall have commenced
to cure such default within such thirty (30) day period, and (iii) Borrower is thereafter
diligently and expeditiously proceeding to cure the same, such thirty (30) day period shall
be extended for so long as it shall require Borrower in the exercise of due diligence to
cure such default, it being agreed that no such extension shall be for a period in excess of
one hundred twenty (120) days, unless, only in the case of cures that require construction
or remedial work, such cure cannot with diligence be completed within such one hundred
twenty (120) day period, in which case such period shall be extended for an additional one
hundred twenty (120) days or such longer period as Lender shall determine.

     SECTION 10.2 LATE CHARGE. If any Monthly Payment is not timely paid, Borrower shall pay any
late payment charge required by the Note.

     SECTION 10.3 DEFAULT INTEREST. Borrower shall pay, from the date of an Event of Default
through the earlier of the date on which the Event of Default is waived in writing by Lender or the
date on which the Debt is paid in full, interest on the unpaid principal balance of the Note at the
Default Rate (as defined in the Note).

ARTICLE 11 — RIGHTS AND REMEDIES

     SECTION 11.1 REMEDIES. Upon the occurrence of any Event of Default, Borrower agrees that
Lender may take such action, without notice or demand, as it deems advisable to protect and enforce
its rights against Borrower and in and to the Property, including the following actions, each of
which may be pursued concurrently or otherwise, without notice or demand, at such time and in such
order as Lender may determine, without impairing or otherwise affecting the other rights and
remedies of Lender:

     (a) declare the entire unpaid Debt to be immediately due and payable;

     (b) institute proceedings, judicial or otherwise, for the complete foreclosure of this
Security Instrument under any applicable provision of law in which case the Property or any
interest therein may be sold for cash or upon credit in one or more parcels or in several
interests or portions and in any order or manner;

     (c) with or without entry, to the extent permitted and pursuant to the procedures
provided by applicable law, institute proceedings for the partial foreclosure of this
Security Instrument for the portion of the Debt then due and payable, but such proceeding
shall not
affect the continuing lien and security interest of this Security Instrument for the
balance of the Debt not then due, which shall remain unimpaired and without loss of
priority;

48

 

     (d) sell for cash or upon credit the Property or any part thereof and all estate,
claim, demand, right, title and interest of Borrower therein and rights of redemption
thereof, pursuant to power of sale or otherwise, at one or more sales, as an entity or in
parcels, at such time and place, upon such terms and after such notice thereof as may be
required or permitted by law;

     (e) institute an action, suit or proceeding in equity for the specific performance of
any covenant, condition or agreement contained herein, in the Note or in the Loan Documents;

     (f) recover judgment on the Note either before, during or after any proceedings for the
enforcement of this Security Instrument or the Loan Documents;

     (g) apply for the appointment of a receiver, trustee, liquidator or conservator of the
Property on an ex parte basis (any required notice of such appointment or any proceeding to
appoint the same being hereby expressly waived) and without regard for the adequacy of the
security for the Debt and without regard for the solvency of Borrower, any Guarantor,
Indemnitor or of any person, firm or other entity liable for the payment of the Debt;

     (h) subject to any applicable law, the license granted to Borrower under Section 1.2
shall automatically be revoked and Lender may enter into or upon the Property, either
personally or by its agents, nominees or attorneys and dispossess Borrower and its agents
and servants therefrom, without liability for trespass, damages or otherwise and exclude
Borrower and its agents or servants wholly therefrom, and take possession of all books,
records and accounts relating thereto and Borrower agrees to surrender possession of the
Property and of such books, records and accounts to Lender upon demand, and thereupon Lender
may (i) use, operate, manage, control, insure, maintain, repair, restore and otherwise deal
with all and every part of the Property and conduct the business thereat; (ii) complete any
construction on the Property in such manner and form as Lender deems advisable; (iii) make
alterations, additions, renewals, replacements and improvements to or on the Property; (iv)
exercise all rights and powers of Borrower with respect to the Property, whether in the name
of Borrower or otherwise, including the right to make, cancel, enforce or modify Leases,
obtain and evict tenants, and demand, sue for, collect and receive all Rents of the Property
and every part thereof; (v) require Borrower to pay monthly in advance to Lender, or any
receiver appointed to collect the Rents, the fair and reasonable rental value for the use
and occupation of such part of the Property as may be occupied by Borrower; (vi) require
Borrower to vacate and surrender possession of the Property to Lender or to such receiver
and, in default thereof, Borrower may be evicted by summary proceedings or otherwise; and
(vii) apply the receipts from the Property to the payment of the Debt, in such order,
priority and proportions as Lender shall deem appropriate after deducting therefrom all
expenses (including attorneys’ fees) incurred in connection with the aforesaid operations
and all amounts necessary to pay the Taxes, Other Charges, insurance and other expenses in
connection with the Property, as well as just and reasonable compensation for the services
of Lender, its counsel, agents and employees;

49

 

     (i) exercise any and all rights and remedies granted to a secured party upon default
under the Uniform Commercial Code, including (i) the right to take possession of the
Personal
Property or any part thereof, and to take such other measures as Lender may deem
necessary for the care, protection and preservation of the Personal Property, and (ii)
request Borrower at its expense to assemble the Personal Property and make it available to
Lender at a convenient place acceptable to Lender. Any notice of sale, disposition or other
intended action by Lender with respect to the Personal Property sent to Borrower in
accordance with the provisions hereof at least ten (10) days prior to such action, shall
constitute reasonable notice to Borrower;

     (j) apply any sums then deposited in the Impound Account and any other sums held in
escrow or otherwise by Lender in accordance with the terms of this Security Instrument or
any Loan Document to the payment of the following items in any order that Lender may
determine:

     (i) Taxes and Other Charges;

     (ii) Insurance Premiums;

     (iii) Interest on the unpaid principal balance of the Note;

     (iv) amortization of the unpaid principal balance of the Note; and all other
sums payable pursuant to the Note, this Security Instrument and the Loan Documents,
including advances made by Lender pursuant to the terms of this Security Instrument;

     (k) surrender the Policies maintained pursuant to Article 3 hereof, collect the
unearned Insurance Premiums and apply such sums as a credit on the Debt in such priority and
proportion as Lender shall deem proper, and in connection therewith, Borrower hereby
appoints Lender as agent and attorney-in-fact (which is coupled with an interest and is
therefore irrevocable) for Borrower to collect such Insurance Premiums;

     (l) apply the undisbursed balance of any Net Proceeds or any Net Proceeds Deficiency
deposit, together with interest thereon, to the payment of the Debt in such order, priority
and proportions as Lender shall deem to be appropriate in its discretion;

     (m) prohibit Borrower and anyone claiming for or through Borrower from making use of or
withdrawing any sums from any lockbox, escrow or similar account; or

     (n) pursue such other remedies as Lender may have under any of the Loan Documents or
applicable law.

     In the event of a sale, by foreclosure, power of sale, or otherwise, of less than all of the
Property, this Security Instrument shall continue as a lien and security interest on the remaining
portion of the Property unimpaired and without loss of priority. Notwithstanding the provisions of
this Section 11.1 to the contrary, if any Event of Default as described in Subsection 10.1(i)(i) or
(ii) shall occur, the entire unpaid Debt shall be automatically due and payable, without any
further notice, demand or other action by Lender.

     SECTION 11.2 APPLICATION OF PROCEEDS. The purchase money proceeds and avails of any
disposition of the Property, or any part thereof, or any other sums collected by Lender pursuant
to the Note, this Security Instrument or the Loan Documents, may be applied by Lender to the
payment of the Debt in such priority and proportions as Lender in its discretion shall deem proper.

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     SECTION 11.3 LENDER RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of Default,
Lender may, but without any obligation to do so and without notice to or demand on Borrower and
without releasing Borrower from any obligation hereunder, cure the same in such manner and to such
extent as Lender may deem necessary to protect the security hereof. Lender is authorized to enter
upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to
protect its interest in the Property or to foreclose this Security Instrument or collect the Debt,
and the cost and expense thereof (including attorneys’ fees to the extent permitted by law), with
interest as provided in this Section 11.3, shall constitute a portion of the Debt and shall be due
and payable to Lender upon demand. All such costs and expenses incurred by Lender in remedying
such Event of Default or in appearing in, defending, or bringing any such action or proceeding
shall bear interest at the Default Rate (as defined in the Note), for the period after notice from
Lender that such cost or expense was incurred to the date of payment to Lender. All such costs and
expenses incurred by Lender together with interest thereon calculated at the Default Rate (as
defined in the Note) shall be deemed to constitute a portion of the Debt and be secured by this
Security Instrument and the Loan Documents and shall be immediately due and payable upon demand by
Lender therefor.

     SECTION 11.4 ACTIONS AND PROCEEDINGS. After the occurrence and during the continuance of an
Event of Default, Lender has the right to appear in and defend any action or proceeding brought
with respect to the Property and to bring any action or proceeding, in the name and on behalf of
Borrower, that Lender, in its discretion, decides should be brought to protect its interest in the
Property.

     SECTION 11.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have the right from time to
time to take action to recover any sum or sums that constitute a part of the Debt as the same
become due, without regard to whether or not the balance of the Debt shall be due, and without
prejudice to the right of Lender thereafter to bring an action of foreclosure, or any other action,
for a default or defaults by Borrower existing at the time such earlier action was commenced.

     SECTION 11.6 EXAMINATION OF BOOKS AND RECORDS. Lender, its agents, accountants and attorneys
shall have the right upon prior written notice to examine the records, books, management and other
papers of Borrower and its affiliates or of any Guarantor or Indemnitor which reflect upon their
financial condition, at the Property or at any office regularly maintained by Borrower, its
affiliates or any Guarantor or Indemnitor where the books and records are located. Lender and its
agents shall have the right upon notice to make copies and extracts from the foregoing records and
other papers. In addition, Lender, its agents, accountants and attorneys shall have the right to
examine and audit the books and records of Borrower and its affiliates or of any Guarantor or
Indemnitor pertaining to the income, expenses and operation of the Property during reasonable
business hours at any office of Borrower, its affiliates or any Guarantor or Indemnitor where the
books and records are located.

     SECTION 11.7 OTHER RIGHTS, ETC.

     (a) The failure of Lender to insist upon strict performance of any term hereof shall
not be deemed to be a waiver of any term of this Security Instrument. Borrower shall not be
relieved of Borrower’s obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower, any Guarantor or any Indemnitor to take any action to
foreclose this Security Instrument or otherwise enforce any of the provisions hereof or of
the Note or the Loan Documents, (ii) the release, regardless of consideration, of the whole
or any part of the Property, or of any person liable for the Debt or any portion thereof, or
(iii) any agreement or stipulation by Lender extending the time of payment or otherwise
modifying or supplementing the terms of the Note, this Security Instrument or the Loan
Documents.

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     (b) It is agreed that the risk of loss or damage to the Property is on Borrower, and
Lender shall have no liability whatsoever for decline in value of the Property, for failure
to maintain the Policies, or for failure to determine whether insurance in force is adequate
as to the amount of risks insured. Possession by Lender shall not be deemed an election of
judicial relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender’s possession.

     (c) Lender may resort for the payment of the Debt to any other security held by Lender
in such order and manner as Lender, in its discretion, may elect. Lender may take action to
recover the Debt, or any portion thereof, or to enforce any covenant hereof without
prejudice to the right of Lender thereafter to foreclose this Security Instrument. The
rights of Lender under this Security Instrument shall be separate, distinct and cumulative
and none shall be given effect to the exclusion of the others. No act of Lender shall be
construed as an election to proceed under any one provision herein to the exclusion of any
other provision. Lender shall not be limited exclusively to the rights and remedies herein
stated but shall be entitled to every right and remedy now or hereafter afforded at law or
in equity.

     SECTION 11.8 LENDER RIGHT TO RELEASE. Lender may release any portion of the Property or any
portion of the Debt for such consideration as Lender may require without, as to the remainder of
the Property or the Debt, in any way impairing or affecting the lien or priority of this Security
Instrument, or improving the position of any subordinate lienholder with respect thereto, except to
the extent that the obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by assignment, pledge or
otherwise any other property in place thereof as Lender may require without being accountable for
so doing to any other lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.

     SECTION 11.9 VIOLATION OF LAWS. If the Property is not in compliance with Applicable Laws,
Lender may impose additional requirements upon Borrower in connection herewith including monetary
reserves or financial equivalents.

     SECTION 11.10 RIGHT OF ENTRY. Lender and its agents shall have the right upon prior written
notice to enter and inspect the Property at all reasonable times upon notice to Borrower.

     SECTION 11.11 RIGHTS PERTAINING TO SALES. The following provisions shall, to the extent
permitted by law, apply to any sale or sales of all or any portion of the Property under or by
virtue of this Security Instrument, whether under any power of sale herein granted or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale:

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     (a) Trustee (for purposes of this Subsection 11.11 only, the term “Trustee” shall be
interpreted to include any public officer or other person having the responsibility to
conduct any sale of all or part of the Property pursuant to this Security Instrument) may
conduct any number of sales from time to time. The power of sale shall not be exhausted by
any one or more of such sales as to any part of the Property that has not been sold or by
any sale that is not completed or is defective until the Debt has been paid in full.

     (b) Any sale may be postponed or adjourned by public announcement at the time and place
appointed for such sale or for such postponed or adjourned sale, and such sale may be
completed at the time and place so announced without further notice.

     (c) Lender is hereby appointed the true and lawful attorney-in-fact of Borrower, which
appointment is irrevocable and shall be deemed to be coupled with an interest, in Borrower’s
name and stead, to make all necessary conveyances, assignments, transfers and deliveries of
the Property and rights so sold, and for that purpose Lender may execute all necessary
instruments to accomplish the same, and may substitute one or more persons with like power,
and Borrower hereby ratifies and confirms all that said attorney or such substitute or
substitutes shall lawfully do by virtue thereof. Nevertheless, Borrower, if requested by
Lender, shall ratify and confirm any such sale or sales by executing and delivering to
Lender or such purchaser or purchasers, as applicable, all such instruments as may be
advisable, in Lender’s judgment, for the purposes designated in such request.

     (d) Any and all statements of fact or other recitals made in any of the instruments
referred to in Subsection 11.11(c) given by Lender concerning nonpayment of the Debt,
occurrence of any Event of Default, any declaration by Lender that all or any of the Debt is
due and payable, any request to sell, any representation that notice of time, place and
terms of sale and property or rights to be sold was duly given, or that any other act or
thing was duly done by Lender, shall be taken as prima facie evidence of the truth of the
facts so stated and recited.

     (e) The receipt by Trustee of the purchase money paid at any such sale, or the receipt
of any other person authorized to give the same, shall be sufficient discharge therefor to
any purchaser of any property or rights sold as aforesaid, and no purchaser, or its
representatives, grantees or assigns, after paying such purchase price and receiving such
receipt, shall be bound to see to the application of such purchase price or any part thereof
upon or for any trust or purpose of this Security Instrument or, in any manner whatsoever,
be answerable for any loss, misapplication or non-application of any such purchase money, or
part thereof, or be bound to inquire as to the authorization, necessity, expediency or
regularity of any such sale.

     (f) Any such sale or sales shall operate to divest all of the estate, right, title,
interest, claim and demand whatsoever, whether at law or in equity, of Borrower in and to
the properties and rights so sold, and shall be a perpetual bar both at law and in equity
against Borrower and any and all persons claiming or who may claim the same, or any part
thereof, by, through or under Borrower to the fullest extent permitted by applicable law.

     (g) Upon any such sale or sales, Lender may bid for and acquire the Property and, in
lieu of paying cash therefor, may make settlement for the purchase price by crediting
against
the Debt the amount of the bid made therefor, after deducting therefrom the expenses of
the sale, the cost of any enforcement proceeding hereunder and any other sums that Lender is
authorized to charge to Borrower under the terms of the Note, this Security Instrument, or
any other Loan Document to the extent necessary to satisfy such bid.

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     (h) If Borrower, or any person claiming by, through or under Borrower, shall transfer
or refuse or fail to surrender possession of the Property after any sale thereof, then
Borrower or such person shall be deemed a tenant at sufferance of the purchaser at such
sale, subject to eviction by means of unlawful detainer proceedings or other appropriate
proceedings, and to any other right or remedy available hereunder or under applicable law.

     (i) Upon any such sale, it shall not be necessary for Trustee, Lender or any public
officer acting under execution or order of court to have present or constructively in its
possession any or all of the Property.

     (j) In the event of any sale referred to in this Subsection 11.11, the entire Debt, if
not previously due and payable, immediately thereupon shall, notwithstanding anything to the
contrary in the Note, this Security Instrument or any other Loan Document, become due and
payable.

     (k) This instrument shall be effective as a mortgage. If a sale hereunder shall be
commenced by Trustee, Lender may, at any time before the sale of the Property, direct the
Trustee to abandon the sale, and may institute suit for the collection of the Debt or part
thereof and for the foreclosure of this Security Instrument. If Lender shall institute suit
for the collection of the Debt or part thereof, and for the foreclosure of this Security
Instrument, Lender may at any time before the entry of final judgment in said suit dismiss
the same (or part thereof) and direct the Trustee to sell the Property in accordance with
the provisions of this Security Instrument. Lender may pursue its rights and remedies
against any guarantor or other party liable for any of the obligations in such a suit for
foreclosure or by separate suit, whether or not the Trustee is also pursuing a sale under
the terms hereof.

     SECTION 11.12 RIGHT TO RELEASE INFORMATION. Following the occurrence of any Event of Default,
Lender may forward to any broker, prospective purchaser of the Property or the Loan, or other
person or entity all documents and information which Lender now has or may hereafter acquire
relating to the Debt, Borrower, any Guarantor, any Indemnitor, the Property and any other matter in
connection with the Loan, whether furnished by Borrower, any Guarantor, any Indemnitor or
otherwise, as Lender determines necessary or desirable. Borrower irrevocably waives any and all
rights it may have to limit or prevent such disclosure, including any right of privacy or any
claims arising therefrom.

ARTICLE 12 — ENVIRONMENTAL HAZARDS

     SECTION 12.1 ENVIRONMENTAL DEFINITIONS. The following terms shall have meanings set forth
herein for the purposes of this Article 12 and the other Articles of this Security Instrument:

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     “Environmental Law” shall mean any present, and for the purposes of Sections 12.2, 12.3
and 13.4 only, future, federal, state and local laws, statutes, ordinances, rules,
regulations
and the like, as well as common law, relating to protection of human health or the
environment, relating to Hazardous Substances, relating to liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or relating to liability for
or costs of other actual or threatened danger to human health or the environment.
“Environmental Law” includes the following statutes, as amended, any successor thereto, and
any regulations promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive Environmental
Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know
Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act
(including Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking
Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act;
the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the
National Environmental Policy Act; and the River and Harbors Appropriation Act.
“Environmental Law” also includes any present, and for the purposes of Sections 12.2, 12.3
and 13.4 only, future, federal, state and local laws, statutes, ordinances, rules,
regulations and the like, as well as common law, conditioning transfer of property upon a
negative declaration or other approval of a governmental authority of the environmental
condition of the property; requiring notification or disclosure of Releases of Hazardous
Substances or other environmental condition of the Property to any governmental authority or
other person or entity, whether or not in connection with transfer of title to or interest
in property.

     “Environmental Liens” shall mean all liens and other encumbrances imposed pursuant to
any Environmental Law, whether due to any act or omission of Borrower or any other person or
entity.

     “Environmental Reports” shall mean any Phase I, Phase II or other written reports
resulting from any environmental assessments of the Property.

     “Hazardous Substances” shall mean, but shall not be limited to, any and all substances
(whether solid, liquid or gas) (i) defined, listed, or otherwise classified as pollutants,
hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or
words of similar meaning or regulatory effect under any present, or for the purposes of
Sections 12.2, 12.3 and 13.4 only, future, Environmental Laws or (ii) that may have a
negative impact on human health or the environment, including petroleum and petroleum
products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead,
radon, radioactive materials, flammables, explosives, medical and infectious waste, mold,
fungus and spores present in the air and in and on the physical components of the Property.

     “Institutional Control” shall mean any legal or physical restrictions or limitations on
the use of, or access to, the Property to eliminate or minimize potential exposures to any
Hazardous Substance, to prevent activities that could interfere with the effectiveness of
any Remediation, or to ensure maintenance of a level of risk to human health or the
environment, including physical modifications to the Property such as slurry walls, capping,
hydraulic controls for ground water, or point of use water treatment, restrictive covenants,
environmental protection easements, or property use limitations.

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     “O&M Plan” shall mean any operations and maintenance plan for the Property.

     “Release” of any Hazardous Substance includes any release, deposit, discharge,
emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Substances.

     “Remediation” includes any response, remedial removal, or corrective action, any
activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous
Substance, any enrollment or participation of the Property within any state’s voluntary
cleanup or similar program, any actions to prevent, cure or mitigate any Release of any
Hazardous Substance, any action to comply with any Environmental Laws or with any permits
issued pursuant thereto, any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or evaluation relating to any
Hazardous Substances or to anything referred to in this Article 12.

     SECTION 12.2 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants,
that, to the best of Borrower’s knowledge after due inquiry and investigation: (a) there are no
Hazardous Substances or underground storage tanks in, on, or under the Property, except those that
are both (i) in compliance with Environmental Laws and with permits issued pursuant thereto, if
any, and (ii) fully disclosed to Lender in writing pursuant to the Environmental Reports delivered
to Lender; (b) there are no past or present Releases of Hazardous Substances in violation of any
Environmental Law or which would require Remediation by a Governmental Authority in, on, under or
from the Property except as described in the Environmental Report; (c) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with
the Property except as described in the Environmental Report; (d) Borrower does not know of, and
has not received, any written or oral notice or other communication from any person or entity
(including a governmental entity) relating to Hazardous Substances or Remediation thereof, of
possible liability of any person or entity pursuant to any Environmental Law, other environmental
conditions in connection with the Property, or any actual administrative or judicial proceedings in
connection with any of the foregoing; (e) Borrower has truthfully and fully provided to Lender, in
writing, any and all information relating to environmental conditions in, on, under or from the
Property that is known to Borrower and that is contained in Borrower’s files and records, including
any reports relating to Hazardous Substances in, on, under or from the Property and/or to the
environmental condition of the Property; and (f) there are no Institutional Controls on or
affecting the Property.

     SECTION 12.3 ENVIRONMENTAL COVENANTS. Borrower covenants and agrees that so long as the
Borrower owns, manages, is in possession of, or otherwise controls the operation of the Property:
(a) all uses and operations on or of the Property, whether by Borrower or any other person or
entity, shall be in compliance with all Environmental Laws and permits issued pursuant thereto; (b)
there shall be no Releases of Hazardous Substances in, on, under or from the Property; (c) there
shall be no Hazardous Substances in, on, or under the Property, except those that are in compliance
with all Environmental Laws and with permits issued pursuant thereto, if and to the extent
required; (d) Borrower shall keep the Property free and clear of all Environmental Liens; (e)
Borrower shall, at its sole cost and expense, fully and expeditiously cooperate in all activities
pursuant to Section 12.4 below, including providing all relevant information and making
knowledgeable persons available for interviews; (f) Borrower shall, at its sole cost and expense,
perform any environmental site assessment

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or other investigation of environmental conditions in connection with the Property, pursuant
to any reasonable written request of Lender after Lender has reason to believe this Section 12.3
has been violated (including sampling, testing and analysis of soil, water, air, building materials
and other materials and substances whether solid, liquid or gas, and the preparation of any O&M
Plan required by Lender), and share with Lender the reports and other results thereof, and Lender
and other Indemnified Parties shall be entitled to rely on such reports and other results thereof;
(g) Borrower shall, at its sole cost and expense, comply with all reasonable written requests of
Lender to (i) reasonably effectuate Remediation of any condition (including a Release of a
Hazardous Substance or the correction of any conditions identified in any O&M Plan) in, on, under
or from the Property, (ii) comply with any Environmental Law, (iii) comply with any directive from
any governmental authority, and (iv) take any other reasonable action necessary or appropriate for
protection of human health or the environment; (h) Borrower shall not do or allow any tenant or
other user of the Property to do any act that materially increases the dangers to human health or
the environment, poses an unreasonable risk of harm to any person or entity (whether on or off the
Property), impairs or may impair the value of the Property, is contrary to any requirement of any
insurer, constitutes a public or private nuisance, constitutes waste, or violates any covenant,
condition, agreement or easement applicable to the Property; and (i) Borrower shall immediately
notify Lender in writing promptly after it has become aware of (A) any presence or Releases or
threatened Releases of Hazardous Substances in, on, under, from or migrating towards the Property
which is required to be reported to a governmental authority under any Environmental Law, (B) any
actual Environmental Lien affecting the Property, (C) any required Remediation of environmental
conditions relating to the Property, and (D) any written or oral notice or other communication of
which Borrower becomes aware from any source whatsoever (including a governmental entity) relating
in any way to Hazardous Substances or Remediation thereof, possible liability of any person or
entity pursuant to any Environmental Law, other environmental conditions in connection with the
Property, or any actual or threatened administrative or judicial proceedings in connection with
anything referred to in this Article 12, (j) Borrower shall not allow any Institutional Control on
or to affect the Property; and (k) Borrower shall take all acts necessary to preserve its status,
if applicable, as an “innocent landowner,” “contiguous property owner,” or “prospective purchaser”
as to the Property and as those terms are defined in CERCLA; provided, however, that this covenant
does not limit or modify any of Borrower’s other duties or obligations under this Security
Instrument.

     SECTION 12.4 LENDER’S RIGHTS. Lender, its environmental consultant, and any other person or
entity designated by Lender, including any receiver and any representative of a governmental
entity, shall have the right, but not the obligation, at intervals of not less than one year, or
more frequently if the Lender reasonably believes that a Hazardous Substance or other environmental
condition violates or threatens to violate any Environmental Law, after notice to Borrower, to
enter upon the Property at all reasonable times to assess any and all aspects of the environmental
condition of the Property and its use, including conducting any environmental assessment or audit
of the Property or portions thereof to confirm Borrower’s compliance with the provisions of this
Article 12 and performance of any Remediation required under any O&M Plan, and Borrower shall
cooperate in all reasonable ways with Lender in connection with any such audit. Such audit shall
be performed in a manner so as to minimize interference with the conduct of business at the
Property. If such audit discloses that a violation of or a liability under any Environmental Law
exists or if such audit was required or prescribed by law, regulation or governmental or
quasi-governmental authority, Borrower shall pay all costs and expenses incurred in connection with
such audit; otherwise, the costs and
expenses of such audit shall, notwithstanding anything to the contrary set forth in this
Section, be paid by Lender.

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ARTICLE 13 — INDEMNIFICATION

     SECTION 13.1 GENERAL INDEMNIFICATION. Borrower shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all
claims, suits, liabilities (including strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, diminution in value, fines, penalties, charges, fees,
expenses, judgments, awards, amounts paid in settlement, or punitive damages, of whatever kind or
nature (including attorneys’ fees and other costs) (the “Losses”) imposed upon or incurred by or
asserted against any Indemnified Parties and directly or indirectly arising out of or in any way
relating to any one or more of the following (but excluding Losses arising out of Lender’s gross
negligence or willful misconduct): (a) ownership, servicing or administration of this Security
Instrument, the Property or any interest therein or the receipt of any Rents or other income or
proceeds from the Property; (b) any amendment to, or restructuring of, the Debt, and the Note, this
Security Instrument, or any other Loan Document; (c) any and all lawful actions that may be taken
by Lender in connection with the enforcement of the provisions of this Security Instrument or the
Note or any other Loan Document, whether or not suit is filed in connection with same, or in
connection with Borrower, any Guarantor or Indemnitor and/or any member, partner, joint venturer or
shareholder thereof 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; (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 Security Instrument; (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; (h) the failure of any person to file timely with the
Internal Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds from Real
Estate, Broker and Barter Exchange Transactions, which may be required in connection with the
Security Instrument, or to supply a copy thereof in a timely fashion to the recipient of the
proceeds of the transaction in connection with which this Security Instrument is made; (i) any
failure of the Property to be in compliance with any Applicable Laws; (j) the enforcement by any
Indemnified Party of the provisions of this Article 13; (k) any and all claims and demands
whatsoever that may be asserted against Lender 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 or otherwise, (l) any and all claims (including lender liability claims) or demands by
Borrower or any third parties, including any Guarantor or Indemnitor; (m) the payment of any
commission, charge or brokerage fee to anyone which may be payable in connection with the funding
of the loan evidenced by the Note and secured by this Security Instrument; or (n) any
misrepresentation made by Borrower in this Security Instrument or other Loan Document.

     Any amounts payable to Lender by reason of the application of this Article 13 shall become
immediately due and payable and shall bear interest at the Default Rate (as defined in the Note)
from the date loss or damage is sustained by Lender until paid, and be secured by this Security
Instrument and the other Loan Documents. The obligations and liabilities of Borrower under this
Article 13 shall survive any termination, satisfaction, or assignment of this Security Instrument
and the exercise by
Lender of any of its rights or remedies hereunder including the acquisition of the Property by
foreclosure or a conveyance in lieu of foreclosure.

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     As used in this Security Instrument, the term “Indemnified Parties” means Lender and any
person or entity who is or will have been involved in the origination of this Loan, any person or
entity who is or will have been involved in the servicing of this Loan (whether or not such person
or entity has any ownership interest therein), any person or entity in whose name the encumbrance
created by this Security Instrument is or will have been recorded, persons and entities who may
hold or acquire or will have held a full or partial interest in this Loan (including Investors in
the Securities (as such terms are defined in Section 18.1 hereof), as well as custodians, trustees
and other fiduciaries who hold or have held a full or partial interest in this Loan for the benefit
of third parties) as well as the respective directors, officers, shareholders, members, partners,
employees, agents, attorneys, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the foregoing (including any
other person or entity who holds or acquires or will have held a participation or other full or
partial interest in this loan or the Property, whether during the term of this Loan or as a part of
or following a foreclosure of this Loan and including any successors by merger, consolidation or
acquisition of all or a substantial portion of Lender’s assets and business).

     SECTION 13.2 MORTGAGE AND/OR INTANGIBLE TAX. 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 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 Security Instrument, the Note or any of the other Loan Documents.

     SECTION 13.3 ERISA INDEMNIFICATION. 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 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 Lender’s discretion) that Lender may incur, directly or indirectly, as a result of a default
under Section 4.2 or 5.9.

     SECTION 13.4 ENVIRONMENTAL INDEMNIFICATION.

     (a) 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 and costs of
Remediation (whether or not performed voluntarily or required under any O&M Plan),
engineers’ fees, environmental consultants’ fees, and costs of investigation (including
sampling, testing and analysis of soil, water, air, building materials and other materials
and substances whether solid, liquid or gas) imposed upon or incurred by or asserted against
any Indemnified Parties, and arising out of or in any way relating to any one or more of the
following, unless caused by the gross negligence or willful misconduct of any Indemnified
Party: (i) any presence of any Hazardous Substances in, on, above or under the Property;
(ii) any past, present or threatened release of Hazardous Substances in, on, above, under or
from the Property; (iii) any activity by Borrower, any person or entity affiliated with
Borrower or tenant or other users of the Property in connection with any actual, proposed or
threatened use, treatment, storage, holding, existence, disposition or other Release,
generation, production,

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manufacturing, processing, refining, control, management, abatement, removal, handling,
transfer or transportation to or from the Property of any Hazardous Substances at any time
located in, under, on or above the Property; (iv) any activity by Borrower, any person or
entity affiliated with Borrower or tenant or other users of the Property in connection with
any actual or proposed Remediation of any Hazardous Substances at any time located in,
under, on or above the Property, whether or not such Remediation is voluntary or required
under any O&M Plan or pursuant to court or administrative order, including any removal,
remedial or corrective action; (v) any past, present or threatened violations of any
Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with
the Property or operations thereon, including any failure by Borrower, any person or entity
affiliated with Borrower or tenant or other users of the Property to comply with any order
of any governmental authority in connection with Environmental Laws; (vi) the imposition,
recording or filing of any Environmental Lien encumbering the Property; (vii) any
administrative processes or proceedings or judicial proceedings in any way connected with
any matter addressed in Article 12 and this Section 13.4; (viii) any past, present or
threatened injury to, destruction of or loss of natural resources in any way connected with
the Property, including costs to investigate and assess such injury, destruction or loss;
(ix) any acts of Borrower or other users of the Property in arranging for disposal or
treatment, or arranging with a transporter for transport for disposal or treatment, of
Hazardous Substances owned or possessed by such Borrower or other users, at any facility or
incineration vessel owned or operated by another person or entity and containing such or
similar Hazardous Substance; (x) any acts of Borrower or other users of the Property, in
accepting any Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites selected by Borrower or such other users, from which there is
a Release, or a threatened Release of any Hazardous Substance which causes costs for
Remediation to be incurred; (xi) any personal injury, wrongful death, or property damage
caused by Hazardous Substances arising under any statutory or common law or tort law theory,
including damages assessed for the maintenance of a private or public nuisance or for the
conducting of an abnormally dangerous activity on or near the Property; and (xii) any
misrepresentation in any representation or warranty set forth in Article 12 or any breach or
failure to perform any covenants or other obligations pursuant to Article 12. Provided,
however, if Lender, its nominee, designee or affiliate acquires title to the Property
through a foreclosure, trustee’s sale or deed in lieu of foreclosure (each a “Foreclosure
Acquisition”), Borrower shall not be liable under this Section 13.4(a) for such Losses,
costs of Remediation or fees attributable to such occurrence, event, condition or activity
by any party other than Borrower or its affiliates first occurring after the date of the
Foreclosure Acquisition (“Foreclosure Acquisition Date”) provided such occurrence, event,
condition or activity is unrelated to any occurrence, event, condition or activity which
existed prior to the Foreclosure Acquisition Date.

     (b) The indemnity provided in this Section 13.4 shall not be included in any
exculpation of Borrower or its partners, members, shareholders or any other Person from
personal liability provided in this Security Instrument or in any of the other Loan
Documents. Further, Borrower’s obligations under this Section 13.4 shall survive (in
perpetuity) the closing and disbursement of the funds evidenced by the Note, payment of the
Note, payment and performance of the Obligations, any release, reconveyance, discharge or
foreclosure of this Security Instrument, conveyance by deed in lieu of foreclosure, and any
subsequent conveyance of the Property. Nothing in this Section 13.4 shall be deemed to
deprive Lender of
any rights or remedies provided to it elsewhere in this Security Instrument or the
other Loan Documents or otherwise available to it under law. Borrower waives and releases
Lender and all other Indemnified Parties from any rights or defenses Borrower may have under
common law or Environmental Laws for liability arising or resulting from the presence, use
or Release of Hazardous Substances except to the extent directly and solely caused by the
gross negligence or willful misconduct of the Indemnified Party seeking indemnification
hereunder.

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     SECTION 13.5 DUTY TO DEFEND, ATTORNEYS’ FEES AND OTHER FEES AND EXPENSES. Upon written
request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any
Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals
approved by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may
engage their own attorneys and other professionals to defend or assist them, and, at the option of
Indemnified Parties, their attorneys shall control the resolution of any claim or proceeding. Upon
demand, Borrower shall pay or reimburse, the Indemnified Parties for the payment of reasonable fees
and disbursements of attorneys, accountants, financial advisors, engineers, environmental
consultants, laboratories and other professionals in connection therewith.

ARTICLE 14 — WAIVERS

     SECTION 14.1 WAIVER OF COUNTERCLAIM. Borrower hereby waives the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding
brought against it by Lender arising out of or in any way connected with this Security Instrument,
the Note, any of the other Loan Documents, or the Debt.

     SECTION 14.2 MARSHALLING AND OTHER MATTERS. Borrower hereby waives, to the extent permitted
by law, the benefit of all homestead, appraisement, valuation, stay, extension, reinstatement and
redemption laws now or hereafter in force and all rights of marshalling in the event of or in
connection with any sale hereunder of the Property or any part thereof or any interest therein.
Further, Borrower hereby expressly waives any and all rights of redemption from sale under any
order or decree of foreclosure of this Security Instrument on behalf of Borrower, and on behalf of
each and every person acquiring any interest in or title to the Property subsequent to the date of
this Security Instrument and on behalf of all persons to the extent permitted by Applicable Law,
and hereby waives any defense Borrower might assert or have by reason of Lender’s failure to make
any tenant or lessee of the Property a party defendant in any foreclosure proceeding or action
instituted by Lender.

     SECTION 14.3 WAIVER OF NOTICE. To the extent permitted by Applicable Law, Borrower shall not
be entitled to any notices of any nature whatsoever from Lender except with respect to matters for
which this Security Instrument specifically and expressly provides for the giving of notice by
Lender to Borrower and except with respect to matters for which Lender is required by Applicable
Law to give notice, and Borrower hereby expressly waives the right to receive any notice from
Lender with respect to any matter for which this Security Instrument does not specifically and
expressly provide for the giving of notice by Lender to Borrower.

     SECTION 14.4 WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby expressly waives and releases
to the fullest extent permitted by law, the pleading of any statute of limitations as a defense to
payment of the Debt or performance of its other obligations under this Security Instrument.

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     SECTION 14.5 SURVIVAL. Except as hereinafter specifically set forth below, the
representations and warranties, covenants, and other obligations arising under Article 12 shall in
no way be impaired by: any satisfaction or other termination of this Security Instrument, any
assignment or other transfer of all or any portion of this Security Instrument or Lender’s interest
in the Property (but, in such case, shall benefit both Indemnified Parties and any assignee or
transferee), any exercise of Lender’s rights and remedies pursuant hereto, including foreclosure or
acceptance of a deed in lieu of foreclosure, any exercise of any rights and remedies pursuant to
the Note or any other Loan Document, any transfer of all or any portion of the Property (whether by
Borrower or by Lender following foreclosure or acceptance of a deed in lieu of foreclosure or at
any other time), any amendment to this Security Instrument, the Note or any other Loan Documents,
and any act or omission that might otherwise be construed as a release or discharge of Borrower
from the obligations pursuant hereto.

     SECTION 14.6 WAIVER OF TRIAL BY JURY. BORROWER AND LENDER HEREBY WAIVE, TO THE FULLEST EXTENT
NOW OR HEREAFTER PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN
EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY
INSTRUMENT OR ANY OTHER LOAN DOCUMENT OR ANY ACTS OR OMISSIONS OF BORROWER OR LENDER, ITS OFFICERS,
EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.

ARTICLE 15 — EXCULPATION

     To the extent of any conflict between the provisions of this Security Instrument and Section
21 of the Note, the provisions of Section 21 of the Note shall control.

ARTICLE 16 — NOTICES

     SECTION 16.1 NOTICES. Any notice required or permitted to be given hereunder must be in
writing and given (a) by depositing same in the United States mail, addressed to the party to be
notified, postage prepaid and registered or certified with return receipt requested; (b) by
delivering the same in person to such party; (c) by transmitting a facsimile copy to the correct
facsimile number of the intended recipient (with a second copy to be sent to the intended recipient
by any other means permitted under this Section 16.1); or (d) by depositing the same into the
custody of a nationally recognized overnight delivery service addressed to the party to be
notified. In the event of mailing, notices shall be deemed effective three (3) days after posting;
in the event of overnight delivery, notices shall be deemed effective on the next Business Day
following deposit with the delivery service; in the event of personal service or facsimile
transmissions, notices shall be deemed effective when delivered. For purposes of notice, the
addresses of the parties shall be as set forth in the Preamble to this Security Instrument. A copy
of any notice sent, transmitted or delivered to Lender shall also be delivered to Daniel Flanigan,
Esq., Polsinelli Shalton Welte Suelthaus PC, 700 W. 47th Street, Suite 1000, Kansas City, Missouri
64112, facsimile number: (816) 753-1536. From time to time, either party may designate another
address than the address set forth in the Preamble by giving the other party no less than ten (10)
days advance notice of such change of address in accordance with the notice provisions hereof.

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     For purposes of this Subsection, “Business Day” shall mean a day on which commercial banks are
not authorized or required by law to close in the State in which the Land is located.

ARTICLE 17 — APPLICABLE LAW

     SECTION 17.1 CHOICE OF LAW/JURISDICTION AND VENUE. This Security Instrument shall be
governed, construed, applied and enforced in accordance with the laws of the state where the Land
is located without regard to the conflicts of law provisions thereof (“Governing State”). Borrower
hereby consents to personal jurisdiction in the Governing State. JURISDICTION AND VENUE OF ANY
ACTION BROUGHT TO ENFORCE THIS SECURITY INSTRUMENT OR ANY OTHER LOAN DOCUMENT OR ANY ACTION
RELATING TO THE LOAN OR THE RELATIONSHIPS CREATED BY OR UNDER THE LOAN DOCUMENTS (“ACTION”) SHALL,
AT THE ELECTION OF LENDER, BE IN (AND IF ANY ACTION IS ORIGINALLY BROUGHT IN ANOTHER VENUE, THE
ACTION SHALL AT THE ELECTION OF LENDER BE TRANSFERRED TO) A STATE OR FEDERAL COURT OF APPROPRIATE
JURISDICTION LOCATED IN THE GOVERNING STATE. BORROWER HEREBY CONSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF THE STATE COURTS OF THE GOVERNING STATE AND OF FEDERAL COURTS LOCATED IN THE
GOVERNING STATE IN CONNECTION WITH ANY ACTION AND HEREBY WAIVES ANY AND ALL PERSONAL RIGHTS UNDER
THE LAWS OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN SUCH GOVERNING STATE FOR PURPOSES OF
ANY ACTION. Borrower hereby waives and agrees not to assert, as a defense to any Action or a
motion to transfer venue of any Action, (i) any claim that it is not subject to such jurisdiction,
(ii) any claim that any Action may not be brought against it or is not maintainable in those courts
or that this Security Instrument may not be enforced in or by those courts, or that it is exempt or
immune from execution, (iii) that the Action is brought in an inconvenient forum, or (iv) that the
venue for the Action is in any way improper.

     SECTION 17.2 USURY LAWS. This Security Instrument and the Note are subject to the express
condition that at no time shall Borrower be obligated or required to pay interest on the Debt at a
rate which could subject the holder of the Note to either civil or criminal liability as a result
of being in excess of the maximum interest rate which Borrower is permitted by Applicable Law to
contract or agree to pay. If by the terms of this Security Instrument or the Note, Borrower is at
any time required or obligated to pay interest on the Debt at a rate in excess of such maximum
rate, the rate of interest under the Security Instrument and the Note shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate shall be applied and shall be
deemed to have been payments in reduction of the principal balance of the Note. All sums paid or
agreed to be paid to Lender for the use, forbearance, or detention of the Debt shall, to the extent
permitted by Applicable Law, be amortized, prorated, allocated, and spread throughout the full
stated term of the Note until payment in full so that the rate or amount of interest on account of
the Debt does not exceed the maximum lawful rate of interest from time to time in effect and
applicable to the Debt for so long as the Debt is outstanding.

     SECTION 17.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers and remedies provided
in this Security Instrument may be exercised only to the extent that the exercise thereof does not
violate any applicable provisions of law and are intended to be limited to the extent
necessary so that they will not render this Security Instrument invalid, unenforceable or not
entitled to be recorded, registered or filed under the provisions of any Applicable Law.

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     SECTION 17.4 INAPPLICABLE PROVISION. If any term of this Security Instrument or any
application thereof shall be invalid or unenforceable, the remainder of this Security Instrument
and any other application of the term, at the option of Lender, shall not be affected thereby.

ARTICLE 18 — SECONDARY MARKET

     SECTION 18.1 TRANSFER OF LOAN. Lender may at any time, (a) sell, transfer or assign the Note,
this Security Instrument, and the other Loan Documents (a “Loan Sale”), (b) transfer any or all
servicing rights with respect thereto (“Servicing Rights Transfers”), (c) grant participations
therein (“Participations”), or (d) issue mortgage pass-through certificates or other securities
(“Securities”) evidencing a beneficial interest in a rated or unrated public offering or private
placement (a “Securitization”). Lender may forward to each purchaser, transferee, assignee,
servicer, participant, or investor (including any broker or authorized representative thereof) in
such Loan Sale, Servicing Rights Transfers, Participations or Securities (collectively, the
“Investor”) or any Rating Agency rating such Securities, each prospective Investor, and any
organization maintaining databases on the underwriting and performance of commercial mortgage
loans, all documents and information that Lender now has or may hereafter acquire relating to the
Debt, Borrower, any Guarantor, any Indemnitor, the Property and any other matter relating to the
Loan, whether furnished by Borrower, any Guarantor, any Indemnitor or otherwise, as Lender
determines necessary or desirable. Borrower irrevocably waives any and all rights it may have to
limit or prevent such disclosure, including any right of privacy or any claims arising therefrom.

     SECTION 18.2 SECONDARY MARKET TRANSACTIONS. Lender shall have the right to engage in one or
more Secondary Market Transactions (as hereinafter defined) with respect to the Loan, and to
structure and restructure all or any part of the Loan, including in multiple tranches, as a
wraparound loan, or for inclusion in a “real estate mortgage investment conduit” (a “REMIC”) within
the meaning of Section 860D of the Internal Revenue Code of 1986, as amended, or other
Securitization. Without limitation, Lender shall have the right to cause the Note and the Security
Instrument to be split into a first and a second mortgage loan, or into one or more loans secured
by mortgages in whatever proportion Lender determines, and thereafter to engage in Secondary Market
Transactions with respect to all or any part of the indebtedness and loan documentation. Borrower
acknowledges that it is the intention of the parties that all or a portion of the Loan will be
securitized and that all or a portion of the Loan will be rated by one or more Rating Agencies.
Borrower further acknowledges that additional structural modifications may be required to satisfy
issues raised by any Rating Agencies. As used herein, “Secondary Market Transaction” means any of
(a) the sale, assignment, or other transfer of all or any portion of the Debt or the Loan Documents
or any interest therein to one or more Investors, (b) the sale, assignment, or other transfer of
one or more participation interests in the Debt or Loan Documents to one or more Investors, (c) the
transfer or deposit of all or any portion of the Debt or Loan Documents to or with one or more
trusts or other entities which may sell certificates or other instruments to Investors evidencing
an ownership interest in the assets of such trust or the right to receive income or proceeds
therefrom or (d) any other Securitization backed in whole or in part by the Loan or any interest
therein.

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     SECTION 18.3 COOPERATION; LIMITATIONS. Borrower shall, at Lender’s cost and expense,
cooperate in good faith with Lender in effecting any such restructuring or Secondary Market
Transaction. Such cooperation shall include executing and delivering such amendments to the Loan
Documents and the organizational documents of Borrower and any constituent entities as Lender or
any Rating Agency, purchaser; transferee, assignee, trustee, servicer or potential Investor (the
Rating Agencies and all of the foregoing parties are herein collectively referred to as “Interested
Parties”) may request, provided however, that no such amendment shall modify (a) the interest rate
payable under the Note (except as set forth in Section 18.5); (b) the stated maturity date of the
Note, (c) the amortization of the principal amount of the Note, (d) any other material economic
terms of the Loan, (e) the non-recourse provisions of the Loan or (f) any provision, the effect of
which would materially increase Borrower’s obligations or materially decrease Borrower’s rights
under the Loan Documents. Such cooperation also shall include using best efforts to obtain such
certificates and assurances from governmental entities and others as Lender may request. Borrower
shall not be required to provide additional collateral that was not initially contemplated by the
parties to effect any such restructuring or Secondary Market Transaction. Borrower shall not be
required to pay any third party costs and expenses incurred by Borrower or Lender in connection
with any such Secondary Market Transaction unless otherwise payable by Borrower under this Security
Instrument or the other Loan Documents.

     SECTION 18.4 INFORMATION. Borrower shall provide such access to personnel and such
information and documents relating to Borrower, its constituent persons or entities, any Guarantor
or Indemnitor, the Property and the business and operations of all of the foregoing and such
opinions of counsel (including Non-Consolidation Opinions) as Lender, any Rating Agency or any
other Interested Party may request (and in form and substance acceptable to Lender and each
Interested Party) in connection with any such Secondary Market Transaction including updated
financial information, appraisals, market studies, environmental reviews (Phase I’s and, if
appropriate, Phase II’s), property condition reports and other due diligence investigations
together with appropriate verification of such updated information and reports through letters of
auditors and consultants and, as of the closing date of the Secondary Market Transaction, updated
representations and warranties made in the Loan Documents and such additional representations and
warranties as any Rating Agency or other Interested Party may request. If requested by any Rating
Agency or required by Lender, Borrower shall provide revisions or “bringdowns” to any opinions
delivered at Closing (including Non-Consolidation Opinions), or if required new versions of such
opinions, addressed to Lender, any trustee under any Securitization backed in whole or in part by
the Loan, any Rating Agency that assigns a rating to any securities in connection therewith and any
investor purchasing securities therein. Lender shall be permitted to share all such information
with the investment banking firms, Rating Agencies, accounting firms, law firms, other third party
advisory firms, potential investors, servicers and other service providers and other parties
involved in any proposed Secondary Market Transaction. Borrower understands that any such
information may be incorporated into any offering circular, prospectus, prospectus supplement,
private placement memorandum or other offering documents for any Secondary Market Transaction.
Lender and all of the aforesaid third-party advisors and professional firms and investors shall be
entitled to rely upon such information.

     SECTION 18.5 SEVERANCE. In connection with any Secondary Market Transaction, Borrower shall,
at the request of Lender and at Lender’s sole cost and expense (a) sever the Loan into two or more
portions in such individual amounts as Lender may determine, each of which portion shall be secured
by a mortgage lien on the Property (“Loan Splitting”) or (b) sever the Loan into two or more
tranches in such individual amounts as Lender may determine (“Loan Tranching”; Loan

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Splitting and Loan Tranching are collectively referred to herein as a “Conversion”). To
effectuate a Loan Split, Borrower, shall, upon written request of Lender, execute, acknowledge and
deliver to Lender and/or its designee or designees substitute notes and security instruments in
such principal amounts, aggregating not more than the then unpaid principal amount secured by this
Security Instrument, and containing terms, provisions and clauses no less favorable to Borrower
than those contained herein and in the Note, and such other documents and instruments as may be
required by Lender to effect the splitting of the Note and this Security Instrument. Any such Loan
Tranching shall be evidenced by Lender’s then standard form “A/B Loan.” Any Conversion shall not
preclude any further Conversion or modification of the Loan by agreement of Borrower and Lender.
In the event any portion of the Loan is converted into an “A/B Loan,” the interest rate on any one
or more components of the Loan may be changed at Lender’s request provided that the weighted
average interest rate of all components of the Loan shall in no event exceed the interest rate set
forth in the Note. Borrower shall cooperate with all of Lender’s requests made in connection with
a Conversion and shall deliver such documents as Lender may request in connection therewith,
including any opinion letters which Lender may request, all of which shall be in form and substance
acceptable to Lender. The aggregate of the principal amount of all such portions shall in no event
exceed the then principal balance of the Loan.

ARTICLE 19 — COSTS

     SECTION 19.1 ORIGINATION, ADMINISTRATION, ENFORCEMENT, AND DEFENSE EXPENSES Borrower shall
pay Lender, on demand, all Administration and Enforcement Expenses (as hereinafter defined) now or
hereafter incurred by Lender, together with interest thereon at the Default Rate from the date paid
or incurred by Lender until such fees and expenses are paid by Borrower, whether or not an Event of
Default or Default then exists. For the purpose of this Security Instrument, “Administration and
Enforcement Expenses” shall mean all fees and expenses incurred at any time or from time to time by
Lender, including legal (whether for the purpose of advice, negotiation, documentation, defense,
enforcement or otherwise), accounting, financial advisory, auditing, rating agency, appraisal,
valuation, title or title insurance, engineering, environmental, collection agency, or other expert
or consulting or similar services, in connection with: (a) the origination of the Loan, including
the negotiation and preparation of this Security Instrument, any other Loan Document and any
amendments or modifications of the Loan or the Loan Documents, whether or not consummated; (b) the
administration, servicing or enforcement of the Loan or the Loan Documents, including any request
for interpretation or modification of the Loan Documents or any matter related to the Loan or the
servicing thereof (which shall include the consideration of any requests for consents, waivers,
modifications, approvals, lease reviews or similar matters and any proposed transfer of the
Property or any interest therein), (c) any litigation, contest, dispute, suit, arbitration,
mediation, proceeding or action (whether instituted by or against Lender, including actions brought
by or on behalf of Borrower or Borrower’s bankruptcy estate or any indemnitor or guarantor of the
Loan or any other person) in any way relating to the Loan or the Loan Documents including in
connection with any bankruptcy, reorganization, insolvency, or receivership proceeding; (d) any
attempt to enforce any rights of Lender against Borrower or any other person that may be obligated
to Lender by virtue of any Loan Document or otherwise whether or not litigation is commenced in
pursuance of such rights; and (e) protection, enforcement against, or liquidation of the Property
or any other collateral for the Loan, including any attempt to inspect, verify, preserve, restore,
collect, sell, liquidate or otherwise dispose of or realize upon the Loan, the Property or any
other collateral for the Loan. Provided no Event of Default has occurred, fees and expenses
related solely to origination and

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administration of the Loan shall be limited to reasonable fees and expenses, but charges of
Rating Agencies, governmental entities or other third parties that are outside of the control of
Lender shall not be subject to the reasonableness standard. All Administration and Enforcement
Expenses shall be additional Debt hereunder secured by the Property, and may be funded, if Lender
so elects, by Lender paying the same to the appropriate persons and thus making an advance on
Borrower’s behalf. Borrower further acknowledges and confirms that it shall be responsible for the
payment of all costs of reappraisal of the Property or any part thereof, whether required by law,
regulation, Lender or any governmental or quasi-governmental authority. Wherever it is provided
for herein that Borrower pay any costs and expenses, such costs and expenses shall include all
legal fees and disbursements of Lender, whether of retained firms, the reimbursement for the
expenses of in-house staff or otherwise.

ARTICLE 20 — CERTAIN DEFINITIONS, HEADINGS, RULE OF CONSTRUCTION

     SECTION 20.1 GENERAL DEFINITIONS. Unless the context clearly indicates a contrary intent or
unless otherwise specifically provided herein, words used in this Security Instrument may be used
interchangeably in singular or plural form and the word “Borrower” shall mean “individually and
collectively, jointly and severally, each Borrower (if more than one) and any subsequent owner or
owners of the Property or any part thereof or any interest therein and Borrower in its capacity as
debtor-in-possession after the commencement of a proceeding under the Bankruptcy Code; “Lender”
shall mean “Lender and any subsequent holder of the Note,” the word “Note” shall mean “the Note and
any other evidence of indebtedness secured by this Security Instrument,” the word “person” shall
include an individual, corporation, limited liability company, partnership, trust, unincorporated
association, government, governmental authority, and any other entity, the word “Property” shall
include any portion of the Property and any interest therein, and the phrases “attorneys’ fees” and
“counsel fees” shall include any and all attorneys’, paralegal and law clerk fees and
disbursements, including fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Lender (a) in protecting its interest in the Property, the Leases and the
Rents, (b) relating to or arising out of any lawsuit or proceeding brought by or against Lender in
any court or other forum (including actions or proceedings brought by or on behalf of Borrower’s
bankruptcy estate or any guarantor or indemnitor), or (c) in enforcing its rights under this
Security Instrument.

     SECTION 20.2 HEADINGS, ETC. The headings and captions of various Sections of this Security
Instrument are for convenience of reference only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.

     SECTION 20.3 RULES OF CONSTRUCTION.

     The following rules of construction shall be applicable for all purposes of this Security
Instrument and all documents or instruments supplemental hereto, unless the context otherwise
clearly requires:

     (a) The terms “include,” “including” and similar terms shall be construed as if
followed by the phrase “without being limited to”;

     (b) any pronoun used herein shall be deemed to cover all genders, and words importing
the singular number shall mean and include the plural number, and vice versa;

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     (c) all captions to the Sections hereof are used for convenience and reference only and
in no way define, limit or describe the scope or intent of, or in any way affect, this
Security Instrument;

     (d) the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or”;

     (e) the words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
Security Instrument refer to this Security Instrument as a whole and not to any particular
provision or section of this Security Instrument;

     (f) an Event of Default shall “continue” or be “continuing” until such Event of Default
has been waived in writing by Lender;

     (g) No inference in favor of or against any party shall be drawn from the fact that
such party has drafted any portion hereof or any other Loan Document;

     (h) The cover page (if any) of, all recitals set forth in, and all Exhibits to, this
Security Instrument are hereby incorporated herein; and

     (i) Wherever Lender’s judgment, consent, approval or discretion is required under this
Security Instrument or any other Loan Document for any matter or thing or Lender shall have
an option, election, or right of determination or any other power to decide any matter
relating to the terms and conditions of this Security Instrument, including any right to
determine that something is satisfactory or not (“Decision Power”), such Decision Power
shall be exercised in the sole and absolute discretion of Lender unless otherwise expressly
stated to be reasonably exercised. Such Decision Power and each other power granted to
Lender upon this Security Instrument or any other Loan Document may be exercised by Lender
or by any authorized agent of Lender (including any servicer and/or attorney-in-fact), and
Borrower hereby expressly agrees to recognize the exercise of such Decision Power by such
authorized agent. Without limiting the generality of the foregoing, any authorized agent of
Lender (including any servicer and/or attorney-in-fact) is hereby specifically authorized to
remove a trustee and select and appoint a successor trustee.

ARTICLE 21 — MISCELLANEOUS

     SECTION 21.1 NO ORAL CHANGE. This Security Instrument, and any provisions hereof, including
the provisions of this Section, may not be modified, amended, waived, extended, changed, discharged
or terminated orally or by any act or failure to act on the part of Borrower or Lender, but only by
an agreement in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought, and the parties hereby:
(a) expressly agree that it shall not be reasonable for any of them to rely on any alleged,
non-written amendment to this Security Instrument; (b) irrevocably waive any and all right to
enforce any alleged, non-written amendment to this Security Instrument; and (c) expressly agree
that it shall be beyond the scope of authority (apparent or otherwise) for any of their respective
agents to agree to any non-written modification of this Security Instrument.

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     SECTION 21.2 LIABILITY. If Borrower consists of more than one person, the obligations and
liabilities of each such person hereunder shall be joint and several. Under no circumstances
whatsoever shall Lender have any liability for punitive, special, consequential or incidental
damages in connection with, arising out of, or in any way related to or under this Security
Instrument or any other Loan Document or in any way related to the transactions contemplated or any
relationship established by this Agreement or any other Loan Document or any act, omission or event
occurring in connection herewith or therewith, and, to the extent not expressly prohibited by
Applicable Laws, Borrower for itself and its Guarantors and Indemnitors waives all claims for
punitive, special, consequential or incidental damages. Lender shall have no duties or
responsibilities except those expressly set forth in this Security Instrument and the other Loan
Documents. Neither Lender nor any of its officer, directors, employees or agents shall be liable
for any action taken or omitted by them as such hereunder or in connection herewith, unless caused
by their gross negligence or willful misconduct. This Security Instrument shall be binding upon
and inure to the benefit of Borrower and Lender and their respective successors and assigns
forever.

     SECTION 21.3 DUPLICATE ORIGINALS; COUNTERPARTS. This Security Instrument may be executed in
any number of duplicate originals and each duplicate original shall be deemed to be an original.
This Security Instrument may be executed in several counterparts, each of which counterpart shall
be deemed an original instrument and all of which together shall constitute a single Security
Instrument. The failure of any party hereto to execute this Security Instrument, or any
counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

     SECTION 21.4 SUBROGATION. If any or all of the proceeds of the Note have been used to
extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the
extent of the funds so used, Lender shall be subrogated to all of the rights, claims, liens,
titles, and interests existing against the Property heretofore held by, or in favor of, the holder
of such indebtedness and such former rights, claims, liens, titles, and interests, if any, are not
waived but rather are continued in full force and effect in favor of Lender and are merged with the
lien and security interest created herein as cumulative security for the repayment of the Debt, the
performance and discharge of Borrower’s obligations hereunder, under the Note and any other Loan
Document, and the performance and discharge of the obligations.

     SECTION 21.5 ENTIRE AGREEMENT. The Note, this Security Instrument and any other Loan Document
constitute the entire understanding and agreement between Borrower and Lender with respect to the
transactions arising in connection with the Debt and supersede all prior written or oral
understandings and agreements between Borrower and Lender with respect thereto. Borrower hereby
acknowledges that, except as incorporated in writing in the Note, this Security Instrument and any
other Loan Document, there are not, and were not, and no persons are or were authorized by Lender
to make, any representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the transaction which is the subject of the Note, this Security Instrument
and any other Loan Document.

     SECTION 21.6 LENDER’S RIGHT TO SUBORDINATE. Lender may, at its election, subordinate the lien
of this Security Instrument and any or all of Lender’s rights, titles or interests hereunder to any
lien, leasehold interest, easement, plat, covenant, restriction, dedication, encumbrance or other
matter affecting the Property or any part thereof by recording a written declaration of such
subordination in the office of the register or recorder of deeds or similar filing officer for the
county in

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which the Land is located. If foreclosure sale occurs hereunder after the recording of any
such declaration, the title received by the purchaser at such sale shall be subject to the matters
specified in such declaration, but such declaration shall not otherwise affect the validity or
terms of this Security Instrument or any other Loan Document or the priority of any lien or
security interest created hereunder or under any other Loan Document. Without limitation of the
foregoing, Lender shall have the right to unilaterally modify any Loan Document to release any lien
on any portion of the Property.

ARTICLE 22 — TRUSTEE PROVISIONS

     SECTION 22.1 CONCERNING THE TRUSTEE. Each Trustee, by acceptance of this Security Instrument,
covenants to perform and fulfill the trusts herein created and hereby waives any statutory fee and
agrees to accept reasonable compensation, in lieu thereof, for any services rendered by Trustee in
accordance with the terms hereof. Either Trustee may act hereunder and either Trustee may resign
at any time upon giving thirty (30) days notice to Borrower and to Lender. Lender may remove
either Trustee at any time or from time to time and select a successor trustee. In the event of
the death, removal, resignation, refusal to act, or inability to act of either Trustee, or in its
sole discretion for any reason whatsoever Lender may, without notice and without specifying any
reason therefor and without applying to any court, select and appoint a successor trustee for
either or both of Trustee, by an instrument recorded wherever this Security Instrument is recorded
and all powers, rights, duties and authority of Trustee, as aforesaid, shall thereupon become
vested in such successor. Such substitute trustee shall not be required to give bond for the
faithful performance of the duties of Trustee hereunder unless required by Lender. The procedure
provided for in this paragraph for substitution of Trustee shall be in addition to and not in
exclusion of any other provisions for substitution, by law or otherwise.

     SECTION 22.2 TRUSTEE’S FEES. Borrower shall pay all reasonable costs, fees and expenses
incurred by Trustee and Trustee’s agents and counsel in connection with the performance by Trustee
of Trustee’s duties hereunder and all such costs, fees and expenses shall be secured by this
Security Instrument.

     SECTION 22.3 CERTAIN RIGHTS. With the approval of Lender, Trustee shall have the right to
take any and all of the following actions: (a) to select, employ, and advise with counsel (who may
be, but need not be, counsel for Lender) upon any matters arising hereunder, including the
preparation, execution, and interpretation of the Note, this Security Instrument or any other Loan
Document, and shall be fully protected in relying as to legal matters on the advice of counsel, (b)
to execute any of the trusts and powers hereof and to perform any duty hereunder either directly or
through his/her agents or attorneys, (c) to select and employ, in and about the execution of
his/her duties hereunder, suitable accountants, engineers and other experts, agents and
attorneys-in-fact, either corporate or individual, not regularly in the employ of Trustee, and (d)
any and all other lawful action as Lender may instruct Trustee to take to protect or enforce
Lender’s rights hereunder. Trustee shall not be personally liable in case of entry by Trustee, or
anyone entering by virtue of the powers herein granted to Trustee, upon the Property for debts
contracted for or liability or damages incurred in the management or operation of the Property.
Trustee shall have the right to rely on any instrument, document, or signature authorizing or
supporting an action taken or proposed to be taken by Trustee hereunder, believed by Trustee in
good faith to be genuine.

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     SECTION 22.4 PERFECTION OF APPOINTMENT. Should any deed, conveyance, or instrument of any
nature be required from Borrower by any Trustee or substitute trustee to more fully and certainly
vest in and confirm to the Trustee or substitute trustee such estates rights, powers, and duties,
then, upon request by the Trustee or substitute trustee, any and all such deeds, conveyances and
instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded
and/or filed by Borrower.

ARTICLE 23 — LOCAL LAW PROVISIONS

     SECTION 23.1 INCONSISTENCIES. In the event of any inconsistencies between the terms and
conditions of this Article 23 and the other provisions of this Security Instrument (other than the
terms and provisions of Article 24), the terms and conditions of this Article 23 shall control and
be binding.

     SECTION 23.2 PROPERTY MORTGAGED. In the first sentence of Section 1.1, the phrase “deed,
mortgage, grant, bargain, sell, alien, enfeoff, hypothecate, remise, release, pledge, assign,
warrant, transfer, confirm, and convey” is replaced with “grants and conveys, with general warranty
and the English covenants of title.”

     SECTION 23.3 SECURITY AGREEMENT. In the fifth line of Section 1.3, the phrase “and conveys”
is hereby inserted between “grants” and “to.”

     SECTION 23.4 NO SALE/ENCUMBRANCE/CHANGE OF OWNERSHIP WITHOUT CONSENT. The following is
inserted at the end of Section 8.1: “Without limiting the generality of the foregoing, the
following provision is set forth herein in order to comply with the requirements of Section
6.1-330.88 of the Code of Virginia, if such requirements are applicable to the Property:
NOTICE—THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL OR THE TERMS THEREOF BEING MODIFIED IN
THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY CONVEYED.”

     SECTION 23.5 ADDITIONAL RIGHTS AND REMEDIES. In addition to all of the other rights and
remedies granted to Lender herein, including, without limitation, those set forth in Article 11,
Borrower hereby authorizes and empowers Trustee, or his successor or substitute, and it shall be
his duty at the request of Lender to take possession of and/or to sell (or in the case of any
default of any purchaser to resell) the Property or any part thereof. Prior to any sale of the
Property by Trustee, Trustee shall notify Borrower in accordance with all applicable laws. In the
event of a postponement of any sale of the Property, which may be done in the sole discretion of
Trustee, no new or additional notice need be given by Trustee to Borrower for the next scheduled
sale of the Property. Any sale made by Trustee hereunder may be as an entirety or in such parcels
as Lender may request at such time and place, and after such previous public advertisement as
Trustee shall deem advantageous and proper and at such times and containing such information as
required by applicable laws and rules, without regard to any right of Borrower or any other person
to the marshalling of assets; provided however that advertising by the Trustee of a notice of sale
once a week for two weeks shall be sufficient. Except as may be required by Section 58-1.3340 of
the Virginia Code, no purchaser of the Property shall be required to see to the proper application
of the purchase money. To the extent permitted by applicable law, any sale may be adjourned by
announcement at the time and place appointed for such sale without further notice except as may be
required by law. The sale by Trustee of less than the whole of the

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Property shall not exhaust the power of sale herein granted, and Trustee is specifically
empowered to make successive sale or sales under such power until the whole of the Property shall
be sold; and, if the proceeds of such sale of less than the whole of the Property shall be less
than the aggregate of the Debt and the expense of executing this trust as provided herein, this
Security Instrument and the lien hereof shall remain in full force and effect as to the unsold
portion of the Property just as though no sale had been made; provided, however, that Borrower
shall never have any right to require the sale of less than the whole of the Property but Lender
shall have the right, at its sole election, to request Trustee to sell less than the whole of the
Property. Trustee may, after any request or direction by Lender, sell not only the Land and
Improvements but also the Personal Property and other interests which are a part of the Property,
or any part thereof, as a unit and as a part of a single sale, or may sell any part of the Property
separately from the remainder of the Property. It shall not be necessary for Trustee to have taken
possession of any part of the Property separately from the remainder of the Property. It shall not
be necessary for Trustee to have taken possession of any part of the Property or to have present or
to exhibit at any sale any of the Personal Property. After each sale, Trustee shall make to the
purchaser or purchasers at such sale good and sufficient conveyances, conveying the property so
sold to the purchaser or purchasers in fee simple, subject to the permitted encumbrances (and to
such leases and other matters, if any, as Trustee may elect upon request of Lender), and shall
receive the proceeds of said sale or sales and apply the same as herein provided. Payment of the
purchase price to the Trustee shall satisfy the obligation of purchaser at such sale therefor, and
such purchaser shall not be responsible for the application thereof. The power of sale granted
herein shall not be exhausted by any sale held hereunder by Trustee or his substitute or successor,
and such power of sale may be exercised from time to time and as many times as Lender may deem
necessary until all of the Property has been duly sold and all secured indebtedness has been fully
paid. In the event any sale hereunder is not completed or is defective in the opinion of Lender,
such sale shall not exhaust the power of sale hereunder and Lender shall have the right to cause a
subsequent sale or sales to be made hereunder. Any and all statements of fact or other recitals
made in any deed or deeds or other conveyances given by Trustee or any successor or substitute
appointed hereunder as to nonpayment of the Debt or as to the occurrence of any default, or as to
Lender’s having declared all of said indebtedness to be due and payable, or as to the request to
sell, or as to notice of time, place and terms of sale and the properties to be sold having been
duly given, or as to the refusal, failure or inability to act of Trustee or any substitute or
successor trustee, or as to the appointment of any substitute or successor trustee, or as to any
other act or thing having been duly done by Lender or by such Trustee, substitute or successor,
shall be taken as prima facie evidence of the truth of the facts so stated and recited. The
Trustee or his successor or substitute may appoint or delegate any one or more persons as agent to
perform any act or acts necessary or incident to any sale held by Trustee, including the posting of
notices and the conduct of sale, but in the name and on behalf of Trustee, his successor or
substitute. If Trustee or his successor or substitute shall have given notice of sale hereunder,
any successor or substitute Trustee thereafter appointed may complete the sale and the conveyance
of the property pursuant thereto as if such notice had been given by the successor or substitute
Trustee conducting the sale. Trustee shall apply the proceeds of any sale hereunder in accordance
with the applicable laws of the Commonwealth of Virginia.

     23.6 DEED OF TRUST. Notwithstanding anything to the contrary herein, this Security Instrument
is intended to be a deed of trust and not a mortgage.

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ARTICLE 24 — ADDITIONAL OR SPECIAL PROVISIONS OR MODIFICATIONS

     SECTION 24.1 INCONSISTENCIES. In the event of any inconsistencies between the terms and
conditions of this Article 24 and the other provisions of this Security Instrument, the terms and
conditions of this Article 24 shall control and be binding.

     SECTION 24.2 CONDITIONS TO GRANT. The third paragraph of the Conditions To Grant Section is
hereby deleted and the following substituted therefor: “PROVIDED, HOWEVER, these presents are upon
the express condition that, if Borrower shall well and truly pay to Lender the Debt in accordance
with the provisions of the Loan Documents, these presents and the estate hereby granted shall
terminate.

     SECTION 24.3 INSURANCE. The second sentence of Section 3.3(a)(i) is hereby modified by
deleting “determined annually at Borrower’s sole cost and expense by an insurer, a recognized
independent insurance broker or an independent appraiser selected by Borrower and approved by
Lender”

     Section 3.3(a)(v) is hereby deleted and the following is substituted therefor: “(v)
Ordinance/Law Coverage. Ordinance or law coverage and insurance coverage to compensate for
the cost of demolition or rebuilding of the undamaged portion of the Property along with any
reduced value and the increased cost of construction in amounts as are customary and are reasonably
requested by Lender in the event the Property becomes a legally non-conforming use;”.

     Section 3.3(a)(vi) is hereby modified by adding the following to the end thereof: “and may be
provided in any combination of a primary general liability policy and one or more excess liability
policies.”

     The third line of Section 3.3(b) is hereby modified by deleting “A:V” and substituting “A:VII”
therefor.

     The fifth line of Section 3.3(b) is hereby modified by deleting “AA” and substituting “A”
therefor.

     Section 3.3(b)(1) is hereby modified by deleting “’non-contributory mortgagee’ endorsement”
and substituting “mortgagee clause” therefor. Section 3.3(b)(1) is also modified by deleting “,
inter alia,”.

     Section 3.3(b)(2) is hereby modified by inserting “prior to closing” between “Lender” and
“as”.

     Section 3.3(e) is hereby modified by adding the following to the end thereof: “, to the
extent of the Net Proceeds”.

     SECTION 24.4 TAX IMPOUND ACCOUNT. Lender agrees to waive the requirement of the Impound
Account for Taxes provided in Section 3.5 so long as no Event of Default shall have occurred. If
an Event of Default shall occur, Lender may immediately reinstate the provisions of Section 3.5
relating to an Impound Account for Taxes.

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     SECTION 24.5 INSURANCE IMPOUND ACCOUNT. So long as Borrower maintains blanket policies of
insurance in accordance with Section 3.3 hereof, the provisions of Section 3.5 hereof with regard
to Insurance Premiums shall not be applicable, until and unless Lender elects to apply such
provisions following (i) the issuance by any insurer or its agent of any notice of cancellation,
termination, or lapse of any insurance coverage required under Section 3.3 hereof, (ii) any
cancellation, termination, or lapse of any insurance coverage required under Section 3.3 hereof
whether or not any notice is issued, (iii) Lender having not received from Borrower evidence of
insurance coverages as required by and in accordance with the terms of Section 3.3 hereof, or (iv)
the occurrence of any Event of Default or the occurrence of any event which with the giving of
notice, the passage of time or both would result in an Event of Default.

     SECTION 24.6 CONDEMNATION. The 35th line of Section 3.6 is hereby modified by
inserting “and Condemnation Awards are made available” between “domain,” and “Borrower”. The
36th line of Section 3.6 is hereby modified by inserting “, to the extent of the
Condemnation Awards” between “Instrument” and “.”.

     SECTION 24.7 BOOKS AND RECORDS. The sixth line of Section 3.11 is hereby modified by
inserting “and an Event of Default shall have occurred” between “more” and “, Lender”.

     The first two lines of Section 3.11(a)(iii) are hereby modified by deleting “For the first
twelve (12) months after the date of this Security Instrument” and substituting “Until the earlier
to occur of (x) that certain date which is 12 months after the date hereof or (y) Securitization of
the Loan” therefor.

     The third line of Section 3.11(a)(iv) is hereby modified by deleting “thirty (30)” and
substituting “forty-five (45)” therefor.

     Section 3.11(b) is hereby deleted and the following is substituted therefor: “(b) Not later
than each February 1 during the term of the Note upon Lender’s request, Borrower shall deliver to
Lender a budget for the Property.”

     Section 3.11(c) is hereby deleted and the following is substituted therefor: “[Intentionally
Deleted]”.

     Section 3.11(e) is hereby deleted and the following is substituted therefor: “(e) Borrower
and its affiliates shall furnish Lender with such other additional financial or management
information as may, from time to time, be customarily prepared by Borrower.”

     SECTION 24.8 PROPERTY USE. Section 4.1 is hereby deleted and the following is substituted
therefor: “The Property shall be used only for office and ancillary retail use and for no other
use without the prior written consent of Lender.”

     SECTION 24.9 RESTORATION AFTER CASUALTY/CONDEMNATION. Section 4.4 is modified in the
following manner:

     (a) Section 4.4(a)(i) is hereby modified by deleting “$30,000.00” and substituting
“$1,000,000.00” therefor.

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     (b) Section 4.4(b)(vi) is hereby modified by adding the following to the end thereof:
“Notwithstanding the foregoing, nothing in this subsection (vi) shall require Borrower to
deposit the Net Proceeds Deficiency with Lender, but, if Borrower fails to do so, Lender
shall not make any further disbursement of the Net Proceeds and Section 4.4(c) hereof shall
control with regard to the remaining Net Proceeds.”

     (c) The following is inserted at the end of Section 4.4: “Notwithstanding the
foregoing, if the Net Proceeds are not made available to Borrower for Restoration of the
Property, then provided that no Event of Default has occurred and no event has occurred
that, with notice and/or the passage of time, or both, would constitute an Event of Default
hereunder, Borrower shall be permitted to pay the remainder of the Debt in full and no
Prepayment Consideration shall be payable by Borrower in connection with such payment.”

     SECTION 24.10 LEASES. The first line of Section 5.10 is hereby modified by deleting “rent
roll for the Property” and substituting “Leases” therefor.

     SECTION 24.11 MANAGEMENT. Section 5.18(a) is hereby deleted and the following is substituted
therefor: “(a) unless and until an Event of Default shall have occurred, Borrower or an affiliate
of Borrower; or”.

     SECTION 24.12 ESTOPPEL CERTIFICATES. The first line of Section 7.4(b) is hereby modified by
inserting “use commercially reasonable efforts to” between “shall” and “furnish”. The eighth line
of Subsection 7.4(b) is hereby modified by inserting “or otherwise limit the information required
to be given” between “request,” and “Borrower”.

     SECTION 24.13 NO SALE/ENCUMBRANCE/CHANGE OF OWNERSHIP WITHOUT CONSENT. The third line of
Section 8.1(a) is hereby modified by inserting “, which may be given or withheld in its reasonable
discretion,” between “Lender” and “in”. The following is hereby inserted between the first and
second sentences of Section 8.1(a): “Notwithstanding the foregoing, Lender’s consent to any
further encumbrance of the Property shall be given or withheld in Lender’s sole and absolute
discretion.”

     Section 8.1(b) is hereby modified by adding the following to the end thereof: “Provided,
further, that the following shall not be deemed to be a Prohibited Transfer: the issuance, sale or
transfer of limited partnership interests in Republic Property Limited Partnership so long as
Republic Property Trust, a Maryland real estate investment trust, remains the general partner of
such limited partnership and in Control of such limited partnership.”

     SECTION 24.14 CONDITIONS TO LENDER’S CONSENT. Section 8.2(a)(v) is hereby deleted and the
following is substituted therefor: “[Intentionally Deleted]”.

     Section 8.2(a)(vi) is hereby deleted and the following substituted therefor: “(vi) Borrower
remits to Lender a fee (the “Transfer Fee”) in the amount of: (A) one quarter of one percent
(.25%) of the outstanding principal balance of the Debt as of the date such transfer is consummated
for the first
such transfer and (B) one percent (1%) of the outstanding principal balance of the Debt as of
the date such transfer is consummated for any subsequent transfers;”

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     SECTION 24.15 TEMPORARY CONSTRUCTION EASEMENTS. Notwithstanding any provision in Sections
8.1 or 8.2 to the contrary, Borrower may, without the consent of Lender, grant temporary
construction easements in the ordinary course of business in connection with any construction on
the Release Parcel (as hereinafter defined) so long as said temporary construction easements do not
(a) adversely affect the Improvements located on the Property; (b) adversely affect the use or
operation of the Property; (c) adversely affect access to the Property; (d) cause the Property to
violate zoning laws or regulations or any other Applicable Law; (e) materially adversely affect the
value of the Property; or (f) materially adversely affect the net operating income of the Property.
If Borrower shall receive any consideration in connection with said temporary construction
easements, Borrower shall have the right to use any such proceeds in connection with any
alterations performed in connection therewith, or required thereby.

     SECTION 24.16 EVENTS OF DEFAULT. The third line of Section 10.1(a) is hereby modified by
deleting “within five (5) days after” and substituting “on” therefor.

     SECTION 24.17 NOTICES. In addition to the requirements of Section 16.1 hereof, Lender shall
use reasonable efforts to provide a courtesy copy of any notice required or permitted to be given
by Lender to Borrower hereunder to the following addressee:

Lori Honigman, Esq.

Glazer Winston Honigman Ellick

5301 Wisconsin Avenue, Suite 740

Washington, DC 20015

Fax: 202-537-5505

Lender’s failure to send such courtesy copies shall not impair the effect of the notice sent to
Borrower.

     SECTION 24.18 TRANSFER OF LOAN. The second sentence of Section 18.1 is hereby modified by
deleting “and any organization maintaining databases on the underwriting and performance of
commercial mortgage loans”.

     SECTION 24.19 COOPERATION; LIMITATIONS. Section 18.3 is hereby modified in
the following manner:

     (a) The fourth line of Section 18.3 is hereby modified by deleting the phrase “and the
organizational documents of Borrower and any constituent entities” therefrom.

     (b) The first line of Subsection 18.3(f) is hereby modified by inserting “other”
between “any” and “provision”.

     (c) The 12th line of Section 18.3 is hereby modified by deleting “best” and
substituting “commercially reasonable” therefore.

     SECTION 24.20 INFORMATION. Section 18.4 is hereby modified in the following manner:

     (a) The third, fourth and fifth lines of Section 18.4 is hereby modified by deleting
“and such opinions of counsel (including Non-Consolidation Opinions) as Lender, any Rating
Agency or any other Interested Party may request (and in form and substance acceptable to
Lender and each Interested Party)” therefrom.

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     (b) The 11th line of Section 18.4 is hereby modified by deleting the phrase
“and such additional representations and warranties” therefrom.

     (c) The 13th line of Section 18.4 is hereby modified by deleting “revisions
or” and substituting “, at Lender’s sole cost and expense,” therefor.

     SECTION 24.21 ORIGINATION, ADMINISTRATION, ENFORCEMENT, AND DEFENSE EXPENSES. Section 19.1
is hereby modified by adding the following to the end thereof:

“Notwithstanding anything to the contrary in this Security Instrument, unless an Event of
Default shall have occurred, Borrower shall only be responsible for the payment of Lender’s
fees and expenses relating to the servicing of the Loan if Lender is acting upon a request
of Borrower or in response to a notice relating to the Property, Borrower, any guarantor or
indemnitor or as a result of failure of any party to perform its obligations under the Loan
Documents.”

     SECTION 24.22 RULES OF CONSTRUCTION. The sixth line of Section 20.3(i) is amended to add the
following phrase between the words “Lender” and “unless”: “and in good faith”.

     SECTION 24.23 PARTIAL RELEASE. Lender shall release (“Partial Release”) the portion of the
Property consisting of the excess, unimproved land which is generally identified on Exhibit A-1
attached hereto and not considered in Lender’s underwriting of the Loan (“Release Parcel”) upon
Borrower’s request and satisfaction of all the following conditions:

	 	(a)	 	Borrower’s request for the Partial Release shall be given to
Lender in writing and no later than forty-five (45) days preceding the date such
Partial Release is requested;
	 
	 	(b)	 	If any existing parcel is being split into separate parcels:

	 	i)	 	Borrower shall have provided
satisfactory evidence to Lender that the Release Parcel has been
separately subdivided or otherwise lawfully “split” from the
Remaining Property, including, if applicable, evidence that a plat
of the Land upon which the Release Parcel is shown as a separate
lot has been duly approved by all required governmental
authorities and shall have been duly filed, if necessary; and
	 
	 	ii)	 	Borrower shall have obtained and
furnished to Lender, at Borrower’s expense, a survey of the
Release Parcel and the Remaining Property, conforming to Lender’s
then current
underwriting standards, which shall, among other things: (i) be
certified to Lender and the title insurer and (ii) provide
evidence reasonably satisfactory to Lender that (A) the
Remaining 

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	 	 	 	Property abuts a duly dedicated and physically open
street and (B) water, gas, electric, telephone, storm sewer and
sanitary sewer services are available to the Remaining Property
either over, under or upon public rights of way directly
adjacent to the Remaining Property or over, under or upon an
easement (not terminable by the grantor thereof or by such
grantor’s heirs, personal representatives, successor or
assigns) for the benefit of said Remaining Property that
connects to public rights of way.

	 	(c)	 	Any and all sums then due and payable to Lender under the Loan
Documents shall be fully paid and no Event of Default or event which, but for
the passage of time, the giving of notice or both would constitute an Event of
Default, shall have occurred under the Security Instrument or any of the Loan
Documents;
	 
	 	(d)	 	Neither the release of the Release Parcel from the lien of this
Security Instrument nor the foreclosure of this Security Instrument on the
Remaining Property would violate (or cause any of the Property to violate) any
applicable zoning, subdivision or other Applicable Law;
	 
	 	(e)	 	Borrower shall deliver an endorsement to Lender’s title policy at
Borrower’s expense insuring the priority of this Security Instrument as a first
lien on the Remaining Property (to be properly legally described) in accordance
with all the provisions of the title policy (and updating the title policy with
no additional title matters);
	 
	 	(f)	 	Borrower shall grant, as an appurtenance to the Remaining
Property, any easement rights over the Release Parcel for the benefit of the
Remaining Property that Lender may request and which is consistent with Lender’s
then current underwriting standards for the maintenance, operation and
improvement of the Remaining Property;
	 
	 	(g)	 	Upon Lender’s request, Borrower shall have caused to be recorded
a reciprocal easement agreement or declaration of reciprocal easements providing
reciprocal rights of parking, ingress, egress and other matters as may be
required by Lender, between and across the Release Parcel and the Remaining
Property, such reciprocal easement agreement or declaration to be in form and
substance satisfactory to Lender;
	 
	 	(h)	 	Borrower shall have paid or reimbursed Lender for all expenses
incurred by Lender in connection with the Partial Release (including without
limitation, attorneys’ fees, title insurance costs, appraisal fees, recording
costs and trustee’s fees);
	 
	 	(i)	 	Borrower shall submit partial release instruments, prepared at
Borrower’s expense, in form and substance satisfactory to Lender and the
execution and delivery of such partial release instruments shall not affect any
of Borrower’s obligations under any of the Loan Documents;

78

 

	 	(j)	 	Borrower shall have provided evidence and documentation
satisfactory to Lender (i) of the conveyance of the Release Parcel to a separate
entity such that the single purpose and related covenants set forth in Section
4.3 hereof are consistently adhered to by Borrower with respect to the Remaining
Property, (ii) of the grant of a security interest in any easements for the
benefit of the Remaining Property created as a part of the Partial Release,
(iii) that the Release Parcel will be assessed as a separate tax parcel with
respect to all property taxes and assessments, (iv) that the Remaining Property
will comply with all federal, state, and local environmental, land use and
zoning laws (including minimum lot size, minimum parking requirements, setback
requirements, lot coverage ratios, frontage, subdivision, site plan approval and
access to a public right of way), (v) that access to the Remaining Property
following the Partial Release to any previously dedicated streets and utilities
shall not be impaired and that the construction of any future improvements on
the Release Parcel will not impair the visibility of the Remaining Property from
such streets, and (vi) that all required notices have been given and consents
obtained in connection with the proposed Partial Release, including the consent
of any Guarantor; and
	 
	 	(k)	 	The future uses of the Release Parcel may not violate any
exclusivity or other provision in any Lease pertaining to the Property nor any
covenant, restriction, condition or other title matter then encumbering the
Property.

     SECTION 24.24 PARKING PROJECT CONSTRUCTION. Notwithstanding any provision herein to the
contrary, surface parking and/or a parking garage (the “Parking Project”) may be constructed on any
unimproved portion of the Property commonly referred to as 13461 Sunrise Valley Drive, Herndon,
Virginia, provided the following conditions are satisfied:

	 	(i)	 	No Event of Default has occurred;
	 
	 	(ii)	 	At least thirty (30) days prior to the commencement of construction of the
Parking Project, Borrower shall have delivered to Lender for Lender’s approval: (A) a
copy of all architectural plans, construction plans, drawings and site plans
(collectively, the “Construction Plans”), which shall be substantially consistent with
the layout of the Property as surveyed in connection with the closing of the Loan and
architecturally consistent with the existing Improvements at the Property; (B) a
budget, based on the Construction Plans, for completion of the Parking Project
(“Budget”); and (C) all proposed contracts or work orders with contractors,
subcontractors, suppliers or other parties providing labor or materials in connection
with the Parking Project (“Construction Contracts”).
	 
	 	(iii)	 	Prior to construction of the Parking Project, Lender, in its reasonable
discretion, shall have approved the Construction Plans, the Budget and the Construction
Contracts
(individually and collectively, the “Construction Documents”). Failure of Lender to
approve or disapprove any request for approval of Construction Documents within 30
days of receipt of Borrower’s request for same shall constitute approval provided
that on the face of any such request, Borrower clearly states that Lender’s failure
to respond in such time period shall be deemed approval thereof;

79

 

	 	(iv)	 	Prior to construction of the Parking Project, Borrower shall have delivered to
Lender evidence sufficient to Lender in its reasonable discretion of Borrower’s
financial ability to fund the construction of the Parking Project based on the Budget;
	 
	 	(v)	 	Prior to construction of the Parking Project, all permits, variances, and
approvals for the construction of the Parking Project shall have been obtained and
copies of same shall have been delivered to Lender;
	 
	 	(vi)	 	Prior to construction of the Parking Project, Borrower shall have certified to
Lender that the Parking Project and/or the construction thereof shall not violate any
lease demising any portion of the Property;
	 
	 	(vii)	 	Prior to construction of the Parking Project, Borrower shall have delivered to
Lender evidence that Borrower shall have obtained all insurance required by the Loan
Documents, any Governmental Authority and Applicable Law in connection with said
construction;
	 
	 	(viii)	 	If construction of the Parking Project shall adversely affect any parking available
to the Property as of the date hereof, then, prior to construction of the Parking
Project, Borrower shall have delivered to Lender evidence of alternative parking
arrangements satisfactory to Lender in its reasonable discretion and otherwise in
compliance with all leases of the Property and all Applicable Laws;
	 
	 	(ix)	 	Prior to construction of the Parking Project, if required under the operative
documents with respect to any Secondary Market Transaction referred to in Article 18
hereof, Lender shall have received confirmation from each Rating Agency that the
construction of the Parking Project would not cause a downgrade, withdrawal or
qualification of any securities then rated by such Rating Agency;
	 
	 	(x)	 	The Parking Project shall be fully completed by Borrower in a diligent and good
and workmanlike manner in accordance with all Applicable Laws and ordinances (including
zoning);
	 
	 	(xi)	 	During the construction of the Parking Project, Borrower shall provide Lender
on a monthly basis copies of all receipted bills, invoices, lien waivers and other such
documents from each of the contractors and materialmen which provided work or services
in connection with the Parking Project in excess of $10,000.00 (for each individual
contractor or materialman) sufficient to reflect that all materials installed and work
and labor performed in connection with the construction of the Additional Improvements
have been paid for in full or will be paid with the next installment
payment;
	 
	 	(xii)	 	Upon completion of the Parking Project, Borrower shall certify to Lender that
the Parking Project has been completed in all material respects in accordance with the
Construction Plans;

80

 

	 	(xiii)	 	Upon completion of the Parking Project, Borrower shall provide Lender evidence that
no mechanic’s or other liens have been placed against the Property, which evidence
shall consist of either (A) an endorsement to the mortgage title insurance policy
issued to Lender updating the effective date of the policy to a date which is after the
completion of the Parking Project or (B) a Certificate of Title satisfactory to Lender
in its discretion;
	 
	 	(xiv)	 	Upon Lender’s request, an opinion of counsel shall be delivered to Lender
indicating that upon completion of the Parking Project, the Loan will remain a
“qualified mortgage” under Section 860G(a)(3) of the Internal Revenue Code;
	 
	 	(xv)	 	Borrower shall deliver to Lender a final as-built survey for the Property
within one month of the completion of the construction of the Parking Project; and
	 
	 	(xvi)	 	Borrower shall reimburse Lender for any fees (including fees for inspection,
attorney’s, engineer, architect, or inspector) incurred by Lender in connection with
the completion of the Parking Project.

          Failure to comply with the foregoing subsections (i) through (ix) shall be an Event of Default
hereunder. Failure to comply with the foregoing subsections (x) through (xvi) shall be an Event of
Default if such failure is not cured within ten (10) days after written notice from Lender to
Borrower.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

81

 

     IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by Borrower the day and year
first above written.

	 	 	 	 	 	 	 
	Borrower:	 	REPUBLIC PARK LLC,	 	 
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/Gary Siegel	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Gary R. Siegel	 	 
	 

	 	 	 	Chief Operating Officer	 	 

 

 

	 	 	STATE OF   Maryland  

COUNTY OF   Prince Georges          , to wit

     The foregoing instrument was acknowledged before me this ___27___day of September, 2006,
by Gary R. Siegel, Chief Operating Officer, on behalf of REPUBLIC PARK LLC, a Delaware limited
liability company.

	 	 	 	 	 
	 

	 	/s/ LeslieD.Bridges
 

Notary Public
	 	 

My
commission expires: 5/7/07

This Instrument Prepared By:

Daniel Flanigan

POLSINELLI SHALTON WELTE SUELTHAUS

700 W. 47th Street, Suite 1000

Kansas City, Missouri 64112

(816) 753-1000

FAX (816) 753-1536

 

 

EXHIBIT A

(Description of Land)

All those certain lots or parcels of land situate and lying in Fairfax
County, Virginia, and more particularly described as follows:

     Parcel I

Parcels B-4A1 and B-4A2 as shown on plat entitled “Plat Showing Division
of Land on Parcel B-4A DSV Dulles Limited Partnership” attached to Deed
of Subdivision recorded in Deed Book 10640 at page 1, among the Land
Records of Fairfax County, Virginia.

Tax Map Nos. 016-3-01-0040 and 015-4-01-0034-B

Parcels B-4A1 and B-4A2 are collectively described by metes and bounds
as follows:

BEGINNING at an iron pipe found on the northerly right of way line of
Dulles Technology Drive (Route 8160) marking the southwesterly corner of
Lot 1, Arrowhead International Business Park and being the property now
or formerly of Durden/Crowder Enterprises, LLC, said pipe marking the
point of curvature of a curve to the left;

thence with said northerly right of way line of Dulles Technology Drive
and continuing with the northwesterly and westerly right of way lines of
said Dulles Technology Center Drive the following three (3) courses:

568.15 feet along the arc of said curve having a radius of 530.00 feet
and a chord bearing and chord of S 69 degrees 17’ 28” W, 541.33 feet
respectively, to an iron pipe found;

S 38 degrees 34’ 57” W, 381.59 feet to an iron pipe found marking the
point of curvature of a curve to the left and
529.89 feet along the arc of said curve having a radius of 545.00 feet
and a chord bearing and chord of S 10 degrees 43’ 43” W, 509.27 feet
respectively,

to an iron pipe found marking the point of curvature of a 25.00 foot
radius return to the right at the northwesterly intersection of said
Dulles Technology Drive with River Birch Road (Route 8161);

 

 

thence departing from said Dulles Technology Drive and with said radius
return

35.56 feet along the arc of said return having a chord bearing and chord
of S 23 degrees 37’ 31” W, 32.64 feet respectively,

to an iron pipe found on the northwesterly right of way line of said
River Birch Road marking the point of reverse curvature of a curve to
the left;

thence with said northwesterly right of way line of River Birch Road

214.17 feet along the arc of said curve having a radius of 475.74 feet
and a chord bearing and chord of S 51 degrees 28’ 45” W, 212.37 feet
respectively, to an iron pipe found and

S 38 degrees 34’ 57” W, 311.54 feet

to an iron pipe found marking the northeasterly corner of Parcel B,
Coppermine Development L.C., and being the property now or formerly of
Fairfax County School Board; thence departing said River Birch Road and
with the northeasterly lines of said Parcel B, the following seven (7)
courses:

N 51 degrees 25’ 03” W, 43.06 feet to an iron pipe found;

N 58 degrees 25’ 43” W, 36.52 feet to a nail found;

N 66 degrees 40’ 46” W, 154.72 feet to an iron pipe found;

N 51 degrees 14’ 54” W, 144.00 feet to an iron pipe found;

N 37 degrees 14’ 54” W, 56.00 feet to an iron pipe found;

N 64 degrees 14’ 54” W, 140.00 feet to an iron pipe found and

N 48 degrees 59’ 54” W, 30.63 feet

to an iron pipe found on the southeasterly line of the property now or
formerly of Merrybrook Run Limited Partnership marking the northwesterly
corner of said Parcel B;

thence with said southeasterly line of the property of Merrybrook Run
Limited Partnership and continuing with the southeasterly lines of the
properties now or formerly of Station Residential Limited Partnership,

 

 

Station Residences, L.L.C. and Houston Office Partners Limited
Partnership

N 38 degrees 34’ 57” E, 2169.78 feet

to an iron pipe found marking the most westerly corner of Parcel B-1A,
Campus at Dulles Technology Center and being the property now or
formerly of Dulles Park Tech Center LLC;

thence with southwesterly lines of said Parcel B-1A, the following five
(5) courses:

S 51 degrees 25’ 03” E, 163.71 feet to a nail found;

S 06 degrees 25’ 03” E, 58.12 feet to an iron pipe found;

S 51 degrees 25’ 03” E, 333.31 feet to an iron pipe found;

S 64 degrees 15’ 03” E, 50.37 feet to a nail found and

S 14 degrees 23’ 29” W, 53.29 feet

to an iron pipe found on the northerly line of aforementioned Lot 1,
Arrowhead International Business Park marking the southwest corner to
said Parcel B-1A;

thence with said northerly line and continuing with the westerly line of
said Lot 1, Arrowhead International Business Park

N 75 degrees 36’ 31” W, 18.11 feet to an iron pipe found and

S 14 degrees 23’ 29” W, 192.55 feet

to the point of beginning.

Containing 1,079,222 square feet or 24.77553 acres of land, more or
less.

     PARCEL II:

Parcel B-1A as shown on plat attached to Deed of Subdivision entitled
“Plat Showing the Campus at Dulles Technology Center Being a
Resubdivision of Parcels B-1 and B-4, C. Thomas Hicks, III and John
Engel, Trustees”, recorded in Deed Book 10461 at page 420, among the

 

 

Land Records of Fairfax County, Virginia.

As adjusted by the Quitclaim Deed dated April 17, 2000, by and between
DSV Dulles Fox Mill Limited Partnership, a Texas limited partnership,
and KDC-Dulles Tech LLC, a Virginia limited liability company, recorded
April 18, 2000 in Deed Book 11319 at page 314.

Tax Map No.: 016-3-01-0032-D

Parcel B-1A is described by metes and bounds as follows:

Beginning at an iron pipe found on the westerly right of way line of
Sunrise Valley Drive (Route 5320) marking the northeasterly corner of
now or formerly WM&F Fox Mill, LLC;

thence departing from said Sunrise Valley Drive and with the northerly

line of said WM&F Fox Mill, LLC

N 75o 36’ 31” W, 273.41 feet

to an iron pipe on the easterly line of Parcel B-4A1, The Campus at
Dulles Technology Center; thence with said easterly line and continuing
with the northeasterly lines of said Parcel B-4A1, The Campus at Dulles
Technology Center the following five (5) courses;

N 14o 23’ 29” E, 53.29 feet to an iron pipe found;

N 64o 15’ 03” W, 50.37 feet to an iron pipe found;

N 51o 25’ 03” W, 333.30 feet to an iron pipe found;

N 06o 25’ 03” W, 58.12 feet to an iron pipe found and

N 51o 25’ 03” W, 163.71 feet

to an iron pipe found on the southeasterly line of now or formerly
Houston Office Partners, L.P.; thence with the said southeasterly line
of Houston Office Partners, L.P.

N 38o 34’ 57” E, 432.60 feet

to an iron pipe found on the southwesterly right of way line of
aforementioned Sunrise Valley Drive marking the point of curvature of a
nontangent curve to the right;

 

 

thence with said right of way line of Sunrise Valley Drive

1023.22 feet along the arc of said curve having a radius of 755.00 feet
and a chord bearing and chord of S 26o 29’ 06” E, 946.69 feet
respectively, to the point of beginning. Containing 331,003 square feet
or 7.59878 acres of land, more or less.

TOGETHER WITH the benefits conferred upon the above described property
as set forth in the two (2) Storm Water Detention Agreements with
Fairfax County Board of Supervisors, recorded in Deed Book 5550 at page
840 and Deed Book 10250 at page 791, respectively.

FURTHER TOGETHER WITH the benefits conferred upon the above described
property, but subject to the conditions set forth therein, as set forth
in that certain Grading and Temporary Construction Easement dated July
8, 1998, by and between DSV Dulles Limited Partnership, Guaranty Federal
Bank, F.S.B., David P. Nelson, Trustee and KDC-Dulles Tech LLC, filed
for record July 17, 1998, in Deed Book 10482 at page 569.

FURTHER TOGETHER WITH the benefits conferred upon the above described
property, but subject to the conditions set forth therein, as set forth
in that certain Storm Drainage Easement, Sight Distance Easement,
Wetlands Mitigation and Grading and Temporary Construction Easement
Agreement dated July 7, 1998, by and between Sun NLF Limited Partnership
and KDC-Dulles Tech LLC, filed for record August 4, 1998, in Deed Book
10510 at page 676. Modified by Deed of Vacation dated May 23, 2001 and
recorded September 18, 2001 in Deed Book 12231 at page 1065.

FURTHER TOGETHER WITH the benefits reserved to the above described
property and the rights to make use of the easements conveyed, but
subject to the conditions set forth therein, in that certain Deed of
Easement and Vacation dated December 9, 1997 by and between DSV Dulles
Limited Partnership, David P. Nelson, Trustee, and The Board of
Supervisors of Fairfax County, Virginia filed for record December 19,
1997 in Deed Book 10211, page 308.exv10w3

 

Exhibit 10.3

PROMISSORY NOTE

LOAN TERMS TABLE

Lender: KeyBank National Association, a national banking association, its successors and assigns

Loan No.: 10032325

Lender’s Address: 911 Main Street, Suite #1500, Kansas City, Missouri 64105

Lender’s Facsimile No.: (816) 221-8848

Borrower: REPUBLIC PARK LLC, a Delaware limited liability company

Borrower’s Address: 1280 Maryland Avenue, SW, Suite 280, Washington, DC 20024

Borrower’s Facsimile No.: (202) 863-4049

Borrower’s Tax Identification Number: 20-3241959

			
	Property:	 	Real property located at 13605, 13615, 13625, 13635, 13645, 13655 and 13665 Dulles
Technology Drive and 13461 Sunrise Valley Drive, Herndon, Virginia, in Fairfax County, Virginia
and certain personal property

Note Date: September ___, 2006

Original Principal Amount: $100,000,000.00

Maturity Date: October 1, 2016

Interest Rate: 6.09 percent (6.09%) per annum

Initial Interest Payment Per Diem: $16,916.67

Interest Only Monthly Payment: See Section 25.2.

Interest Only Monthly Payment Date: November 11, 2006 and on the eleventh day of each
successive month thereafter through and including October 11, 2013

Amortizing Monthly Payment: $605,349.01

Amortizing Monthly Payment Date: November 11, 2013 and on the eleventh day of each successive
month thereafter

     1. Loan Amount and Rate. FOR VALUE RECEIVED, Borrower promises to pay to the order of Lender,
the Original Principal Amount (or so much thereof as is outstanding from time to time, which is
referred to herein as the “Outstanding Principal Balance” or “OPB”), with interest on the unpaid
OPB from the date of disbursement of the Loan (as hereinafter defined) evidenced by this Promissory
Note (“Note”) at the Interest Rate. Interest shall be calculated based on the daily rate which is
produced assuming a three hundred sixty (360) day year multiplied by the actual number of days
elapsed. The loan evidenced by this Note will sometimes hereinafter be called the “Loan.” The
above Loan Terms Table (hereinafter referred to as the “Table”) is a part of the Note and all terms
used in this Note that are defined in the Table shall have the meanings set forth therein.

     2. Principal and Interest Payments. Payments of principal and interest shall be made as
follows:

     (a) An interest payment on the date of disbursement of the Loan proceeds in an amount
calculated by multiplying the Initial Interest Payment Per Diem by the number of days

 

 

from (and including) the date of the disbursement of the Loan proceeds through the last day of the
calendar month in which the disbursement was made;

     (b) A Monthly Payment on each Monthly Payment Date until the Maturity Date, each of such
payments to be applied: (i) to the payment of interest computed at the Interest Rate; and (ii) the
balance applied toward the reduction of the Outstanding Principal Balance; and

     (c) If not sooner paid, the Outstanding Principal Balance, all unpaid interest thereon, and
all other amounts owed to Lender pursuant to this Note or any other Loan Document (as hereinafter
defined) or otherwise in connection with the Loan or the security for the Loan shall be due and
payable on the Maturity Date.

     3. Security for Note. This Note is secured by a first deed of trust, mortgage, or deed to
secure debt (which is herein called the “Security Instrument”) encumbering the Property. This
Note, the Security Instrument, and all other documents and instruments existing now or after the
date hereof that evidence, secure or otherwise relate to the Loan, including any assignments of
leases and rents, other assignments, security agreements, financing statements, guaranties,
indemnity agreements (including environmental indemnity agreements), letters of credit, or
escrow/holdback or similar agreements or arrangements, together with all amendments, modifications,
substitutions or replacements thereof, are sometimes herein collectively referred to as the “Loan
Documents” or individually as a “Loan Document.” All amounts that are now or in the future become
due and payable under this Note, the Security Instrument, or any other Loan Document, including any
Prepayment Consideration (as hereinafter defined) and all applicable expenses, costs, charges, and
fees, will be referred to herein as the “Debt.” The remedies of Lender as provided in this Note,
any other Loan Document, or under applicable law shall be cumulative and concurrent, may be pursued
singularly, successively, or together at the discretion of Lender, and may be exercised as often as
the occurrence of an occasion for which Lender is entitled to a remedy under the Loan Documents or
applicable law. The failure to exercise any right or remedy shall not be construed as a waiver or
release of the right or remedy respecting the same or any subsequent default.

     4. [INTENTIONALLY DELETED].

     5. Payments. All amounts payable hereunder shall be payable in lawful money of the United
States of America to Lender at Lender’s Address or such other place as the holder hereof may
designate in writing. Each payment made hereunder shall be made in immediately available funds and
must state the Borrower’s Loan Number. If any payment of principal or interest on this Note is due
on a day other than a Business Day (as hereinafter defined), such payment shall be made on the next
succeeding Business Day. Any payment on this Note received after 2:00 o’clock p.m. local time at
the place then designated as the place for receipt of payments hereunder shall be deemed to have
been made on the next succeeding Business Day. All amounts due under this Note shall be payable
without set off, counterclaim, or any other deduction whatsoever. All payments from Borrower to
Lender following the occurrence of an Event of Default shall be applied in such order and manner as
Lender elects in reduction of costs, expenses, charges, disbursements and fees payable by Borrower
hereunder or under any other Loan Document, in reduction of interest due on the Outstanding
Principal Balance, or in reduction of the Outstanding Principal Balance. Lender may, without
notice to Borrower or any

2

 

other person, accept one or more partial payments of any sums due or past due hereunder from time
to time while an Event of Default exists hereunder, after Lender accelerates the indebtedness
evidenced hereby, and/or after Lender commences enforcement of its remedies under any Loan Document
or applicable law, without thereby waiving any Event of Default, rescinding any acceleration, or
waiving, delaying, or forbearing in the pursuit of any remedies under the Loan Documents. Lender
may endorse and deposit any check or other instrument tendered in connection with such a partial
payment without thereby giving effect to or being bound by any language purporting to make
acceptance of such instrument an accord and satisfaction of the indebtedness evidenced hereby. As
used herein, the term “Business Day” shall mean a day upon which commercial banks are not
authorized or required by law to close in the city designated from time to time as the place for
receipt of payments hereunder.

     6. Late Charge. If any sum payable under this Note or any other Loan Document is not received
by Lender by close of business on the fifth (5th) day after the date on which it was due, Borrower
shall pay to Lender an amount (the “Late Charge”) equal to the lesser of (a) five percent (5%) of
the full amount of such sum or (b) the maximum amount permitted by applicable law in order to help
defray the expenses incurred by Lender in handling and processing such delinquent payment and to
compensate Lender for the loss of the use of such delinquent payment. Any such Late Charge shall
be secured by the Security Instrument and other Loan Documents. The collection of any Late Charge
shall be in addition to, and shall not constitute a waiver of or limitation of, a default or Event
of Default hereunder or a waiver of or limitation of any other rights or remedies that Lender may
be entitled to under any Loan Document or applicable law.

     7. Default Rate. Upon the occurrence of an Event of Default (including the failure of
Borrower to make full payment on the Maturity Date), Lender shall be entitled to receive and
Borrower shall pay interest on the Outstanding Principal Balance at the rate of five percent (5%)
per annum above the Interest Rate (“Default Rate”) but in no event greater than the maximum rate
permitted by applicable law. Interest shall accrue and be payable at the Default Rate from the
occurrence of an Event of Default until all Events of Default have been waived in writing by Lender
in its discretion. Such accrued interest shall be added to the Outstanding Principal Balance, and
interest shall accrue thereon at the Default Rate until fully paid. Such accrued interest shall be
secured by the Security Instrument and other Loan Documents. Borrower agrees that Lender’s right
to collect interest at the Default Rate is given for the purpose of compensating Lender at
reasonable amounts for Lender’s added costs and expenses that occur as a result of Borrower’s
default and that are difficult to predict in amount, such as increased general overhead,
concentration of management resources on problem loans, and increased cost of funds. Lender and
Borrower agree that Lender’s collection of interest at the Default Rate is not a fine or penalty,
but is intended to be and shall be deemed to be reasonable compensation to Lender for increased
costs and expenses that Lender will incur if there occurs an Event of Default hereunder.
Collection of interest at the Default Rate shall not be construed as an agreement or privilege to
extend the Maturity Date or to limit or impair any rights and remedies of Lender under any Loan
Documents. If judgment is entered on this Note, interest shall continue to accrue post-judgment at
the greater of (a) the Default Rate or (b) the applicable statutory judgment rate.

     8. Origination, Administration, Enforcement, and Defense Expenses. Borrower shall pay Lender,
on demand, all Administration and Enforcement Expenses (as hereinafter

3

 

defined) now or hereafter incurred by Lender, together with interest thereon at the Default Rate,
from the date paid or incurred by Lender until such fees and expenses are paid by Borrower, whether
or not an Event of Default or Default then exists. Provided no Event of Default has occurred, fees
and expenses related solely to origination and administration of the Loan shall be limited to
reasonable fees and expenses, but charges of rating agencies, governmental entities or other third
parties that are outside of the control of Lender shall not be subject to the reasonableness
standard. For the purpose of this Note, “Administration and Enforcement Expenses” shall mean all
fees and expenses incurred at any time or from time to time by Lender, including legal (whether for
the purpose of advice, negotiation, documentation, defense, enforcement or otherwise), accounting,
financial advisory, auditing, rating agency, appraisal, valuation, title or title insurance,
engineering, environmental, collection agency, or other expert or consulting or similar services,
in connection with: (a) the origination of the Loan, including the negotiation and preparation of
the Loan Documents and any amendments or modifications of the Loan or the Loan Documents, whether
or not consummated; (b) the administration, servicing or enforcement of the Loan or the Loan
Documents, including any request for interpretation or modification of the Loan Documents or any
matter related to the Loan or the servicing thereof (which shall include the consideration of any
requests for consents, waivers, modifications, approvals, lease reviews or similar matters and any
proposed transfer of the Property or any interest therein), (c) any litigation, contest, dispute,
suit, arbitration, mediation, proceeding or action (whether instituted by or against Lender,
including actions brought by or on behalf of Borrower or Borrower’s bankruptcy estate or any
indemnitor or guarantor of the Loan or any other person) in any way relating to the Loan or the
Loan Documents including in connection with any bankruptcy, reorganization, insolvency, or
receivership proceeding; (d) any attempt to enforce any rights of Lender against Borrower or any
other person that may be obligated to Lender by virtue of any Loan Document or otherwise whether or
not litigation is commenced in pursuance of such rights; and (e) protection, enforcement against,
or liquidation of the Property or any other collateral for the Loan, including any attempt to
inspect, verify, preserve, restore, collect, sell, liquidate or otherwise dispose of or realize
upon the Loan, the Property or any other collateral for the Loan. All Administration and
Enforcement Expenses shall be additional Debt hereunder secured by the Property, and may be
funded, if Lender so elects, by Lender paying the same to the appropriate persons and thus making
an advance on Borrower’s behalf.

     9. Prepayment; Defeasance.

     (a) Restrictions. Voluntary prepayment of this Note is prohibited except during the last
ninety (90) days of the term when prepayment may be made in whole, but not in part, without payment
of any Prepayment Consideration (as hereinafter defined), on any Business Day; provided that, if
such date is not a Monthly Payment Date, such prepayment shall include interest that would accrue
from the date of such payment to the next succeeding Monthly Payment Date. Notwithstanding
anything contained in this Article 9 to the contrary, provided no Default (as hereinafter defined)
or Event of Default has occurred, no Prepayment Consideration shall be due in connection with a
complete or partial prepayment resulting from: (i) the application of insurance proceeds or
condemnation awards pursuant to the Security Instrument; or (ii) changes in tax or debt credit laws
as may be required pursuant to the Security Instrument, but Borrower shall be required to pay all
other sums due hereunder together with all interest accrued thereon. Any such partial prepayments
shall reduce the Outstanding Principal Balance, but shall not reduce the amount of the Monthly
Payment.

4

 

     (b) Defeasance.

          (i) Provided that as of the Release Date (as hereinafter defined) the Debt has not been
accelerated, no Event of Default exists, and no event has occurred that with the passage of time,
giving of notice, or modification or termination of the automatic stay of Section 362 of the United
States Bankruptcy Code may become an Event of Default (“Default”), Borrower may cause the release
of the Property from the lien of the Security Instrument and the other Loan Documents
(“Defeasance”) on any Monthly Payment Date following the date that is two (2) years and fifteen
(15) days after the “startup day” within the meaning of Section 860G(a)(9) of the Internal Revenue
Code of 1986, as amended (together with any successor statute and the related Treasury Department
Regulations including temporary regulations, the “Code”) of any “real estate mortgage investment
conduit” within the meaning of Section 860D of the Code (“REMIC”) that holds this Note upon
Borrower’s satisfaction of the following conditions:

     (A) Borrower shall provide Lender not less than thirty (30) days prior written notice
specifying a Monthly Payment Date (such Date, or any extended date upon which Borrower and
Lender may mutually agree is referred to herein as the “Release Date”) on which the
Defeasance Collateral (as hereinafter defined) is to be delivered;

     (B) On the Release Date Borrower shall pay in full all accrued and unpaid interest and
all other sums due under this Note and under the other Loan Documents up to the Release
Date, including all costs and expenses (including attorneys’ fees) incurred by Lender or its
servicers or other agent(s) or to or on behalf of any rating agencies or other third parties
in connection with such release and related transactions (including the review of the
proposed Defeasance Collateral and the preparation of the Defeasance Security Agreement (as
hereinafter defined) and related documentation), together with a defeasance processing fee
in an amount equal to one-half of one percent (0.5%) of the then Outstanding Principal
Balance but in no event less than (A) $7,500 or greater than (B) $20,000; and

     (C) Borrower shall deliver the following, all of which must be satisfactory to Lender,
at or prior to the release of the Property and substitution of the Defeasance Collateral:

     (1) Direct, non-callable and non-redeemable securities evidencing an obligation to pay
principal and interest in a full and timely manner that are direct obligations of the United
States of America for the payment of which its full faith and credit is pledged (the
“Defeasance Collateral”) in amounts sufficient to pay all scheduled principal and interest
payments required under this Note, which securities provide for payments prior, but as close
as possible, to the Business Day prior to each successive Monthly Payment Date occurring
after the Release Date, with each such payment being equal to or greater than the amount of
the corresponding Monthly Payment required to be made hereunder for the balance of the term
hereof plus the amount required to be paid on the Maturity Date (the “Scheduled Defeasance
Payments”), each of which shall be duly endorsed by the holder thereof as directed by Lender
or accompanied by a written instrument of transfer in form and substance satisfactory to
Lender (including such instruments as may be required by the depository

5

 

institution or other entity holding such securities or the issuer thereof, as the case may
be, to effectuate book-entry transfers and pledges through the book-entry facilities of such
institution) in order to perfect upon the delivery of the Defeasance Security Agreement (as
hereinafter defined) a valid, first priority lien and security interest therein in favor of
Lender in conformity with all applicable state and federal laws governing granting of such
security interest;

     (2) any and all agreements, certificates, opinions, documents or instruments required
by Lender in connection with the Defeasance including (a) a pledge and security agreement,
in form and substance satisfactory to Lender, creating a first priority security interest in
favor of Lender in the Defeasance Collateral (the “Defeasance Security Agreement”), and (b)
any and all agreements, certificates, opinions, documents, or instruments required by Lender
that affect or relate in any way to the maintenance by any REMIC that holds this Note of its
qualification and status for tax purposes as a REMIC;

     (3) a certificate of Borrower certifying that (a) all of the requirements set forth in
this Section 9(b) have been satisfied, (b) the transactions that are being carried out
pursuant to this Section 9(b) (including specifically the release of the lien of the
Security Instrument) are being effected to facilitate the disposition of the Property or any
other customary commercial transaction and not as part of an arrangement to collateralize a
REMIC offering with obligations that are not real estate mortgages, and (c) the amounts of
the Defeasance Collateral comply with all the requirements of this section including the
requirement that the Defeasance Collateral shall generate monthly amounts equal to or
greater than the Scheduled Defeasance Payments required to be paid under this Note through
the Maturity Date;

     (4) an opinion of counsel for Borrower , delivered by counsel acceptable to Lender,
stating, among other things but without substantive qualification, that (a) Lender has a
valid, duly perfected, first priority security interest in the Defeasance Collateral and
that the Defeasance Security Agreement is enforceable against Borrower in accordance with
its terms and that the delivery of the Defeasance Collateral to Lender does not constitute a
fraudulent or preferential or other avoidable transfer under applicable bankruptcy and
nonbankruptcy law, (b) neither the Defeasance nor any other transaction that occurs pursuant
to the provisions of this Section 9(b) has caused or will cause the Loan (including for this
purpose the Loan Documents) to cease to be a “qualified mortgage” within the meaning of
Section 860G of the Code, either under the provisions of Treasury Regulation Sections
1.860G-2(a)(8) or 1.860G-2(b) (as such regulations may be amended or superseded from time to
time) or under any other provision of the Code or otherwise, and (c) the tax qualification
and status of any REMIC or any other entity that holds this Note will not be adversely
impaired or affected as a result of the Defeasance and/or any other transaction that occurs
pursuant to the provisions of this Section 9(b). The opinions set forth in clauses (b) and
(c) above may, in Lender’s discretion, be rendered by counsel to Lender at Borrower’s sole
cost and expense;

6

 

     (5) a certificate and opinion delivered by an independent certified public accounting
firm acceptable to Lender certifying that the amounts of the Defeasance Collateral comply
with all the requirements of this Section including the requirement that the Defeasance
Collateral shall generate monthly amounts equal to or greater than the Scheduled Defeasance
Payments required to be paid under this Note through the Maturity Date. Upon Lender’s
request, such accounting firm shall also certify the change in the yield of the Loan that
results from the Defeasance and any other transactions that occur pursuant to the provisions
of this Section 9(b), including supporting computations which shall be made in a manner that
is consistent with the provisions of Treasury Regulation Sections 1.1001-3(e)(1) and (2);

     (6) Upon Lender’s request, written confirmation from the rating agencies that have
rated any of the securities issued by any REMIC that holds this Note to the effect that the
Defeasance will not result in a downgrading, withdrawal or qualification of the respective
ratings in effect immediately prior to such Defeasance for any rated securities then
outstanding or a waiver from any such rating agency stating that it has declined to review
the Defeasance. If required by any rating agency or Lender, a non-consolidation opinion
with respect to the Defeasance Obligor (as hereinafter defined) in form and substance
satisfactory to Lender and such rating agency; and

     (7) Borrower shall (unless otherwise agreed to in writing by Lender), at Borrower’s
expense, assign all of its obligations under this Note, together with the Defeasance
Collateral, to a successor entity (“Defeasance Obligor”) designated by Lender (which may
include an entity that is owned and/or controlled by Lender) that is a single purpose,
bankruptcy remote entity as determined by Lender in its discretion. The Defeasance Obligor
shall execute an assumption agreement pursuant to which it shall assume Borrower’s
obligations under this Note, the Loan Documents, and the Defeasance Security Agreement. As
conditions to such assignment and assumption, Borrower shall (a) deliver to Lender an
opinion of counsel delivered by counsel acceptable to Lender stating, among other things,
that such assumption agreement has been duly authorized and is enforceable against Borrower
and the Defeasance Obligor in accordance with its terms, that the Note, the Defeasance
Security Agreement and the other Loan Documents, as so assumed, have been duly authorized
and are enforceable against the Defeasance Obligor in accordance with their respective
terms, and that the delivery of the Defeasance Collateral to the Defeasance Obligor does not
constitute a fraudulent transfer or preferential or other avoidable transfer under
applicable bankruptcy and nonbankruptcy law and that, in the event of Borrower’s bankruptcy,
neither the Defeasance Collateral nor any proceeds thereof will be property of Borrower’s
bankruptcy estate under Section 541 of the Bankruptcy Code or any similar statute and (b)
pay all costs and expenses including attorneys’ fees incurred by Lender or its servicer or
other agent(s) in connection with such assignment and assumption (including the review of
the proposed transferee and the preparation of the assumption agreement and related
documentation). Upon such assumption, Borrower shall be relieved of its obligations under
this Note, the Defeasance Security Agreement and the other Loan Documents, other than those
obligations which are specifically intended to survive the payment of this Note and the
termination, satisfaction or assignment of this Note, the Defeasance Security Agreement

7

 

or the other Loan Documents or the exercise of Lender’s rights and remedies under any of
such documents and instruments.

          (ii) Upon compliance with the requirements of this Section, Lender shall release the Property
from the lien of the Security Instrument and the other Loan Documents, and the Defeasance
Collateral shall secure this Note and all other obligations under the Loan Documents. Lender will,
at Borrower’s expense, execute and deliver any agreements reasonably requested by Borrower to
release the lien of the Security Instrument from the Property. Borrower, pursuant to the
Defeasance Security Agreement, shall authorize and direct that the payments received from
Defeasance Collateral be made directly to Lender and applied to satisfy the obligations of Borrower
under this Note.

          (iii) Upon the release of the Property in accordance with this Section 9(b), Borrower shall
have no further right to prepay this Note. Borrower shall pay all costs and expenses incurred or
to be incurred in connection with the Defeasance and related transactions, including all charges
imposed by any rating agencies and any revenue, documentary stamp or intangible taxes or any other
tax or charge due in connection with the transfer of this Note or otherwise required to accomplish
the Defeasance and related transactions.

          (iv) If any notice of defeasance is given pursuant to Section 9(b)(i)(A), Borrower shall be
required to defease the Loan on the Release Date (unless such notice is revoked by Borrower prior
to the Release Date in which event Borrower shall immediately reimburse Lender for any and all
reasonable costs and expenses incurred by Lender in connection with Borrower’s giving of such
notice and revocation).

          (v) At Borrower’s request, Lender may agree that Lender or its servicer or other agent, acting
on Borrower’s behalf as Borrower’s agent and attorney-in-fact, shall purchase the Defeasance
Collateral that Borrower is required to deliver to Lender pursuant to Section 9(b)(i)(C)(1). If
such an agreement is made then Borrower shall deposit with Lender or Lender’s servicer or other
agent, as directed by Lender or Lender’s agent(s), on or prior to the Release Date a sum of money
sufficient to purchase the Defeasance Collateral. By making such deposit Borrower shall thereby
appoint Lender or Lender’s servicer or other agent as Borrower’s agent and attorney-in-fact, with
full power of substitution, for the purpose of purchasing the Defeasance Collateral with the funds
so provided and delivering the Defeasance Collateral to Lender pursuant to Section 9(b)(i)(C)(1).

          (vi) Notwithstanding any release of the Security Instrument or any Defeasance hereunder, the
Defeasance Obligor shall be bound by and obligated under Sections 3.1 (Payment of Debt), 7.2
(Further Acts Etc.), 7.4(a) (Estoppel Certificates), 11.2 (Application of Proceeds), 11.7 (Other
Rights Etc.) and 14.2 (Marshalling and Other Matters) and Article 13 (Indemnification) of the
Security Instrument; provided, however, that all references therein to “Property” or “Personal
Property” shall be deemed to refer only to the Defeasance Collateral delivered to Lender.

     (c) Default Prepayment. If a Default Prepayment (as hereinafter defined) occurs, such Default
Prepayment shall be deemed to be a voluntary prepayment under this Note and in such case the
applicable Prepayment Consideration (as hereinafter defined) shall be due and

8

 

payable to Lender in connection with such Default Prepayment (unless Lender voluntarily and
expressly waives in writing the right to collect such Prepayment Consideration). The Prepayment
Consideration shall be secured by all security and collateral for the Loan and shall, after it
becomes due and payable, be treated as if it were added to the Outstanding Principal Balance for
all purposes including accrual of interest, judgment on the Note, foreclosure (whether through
power of sale, judicial proceeding, or otherwise) (“Foreclosure Sale”), redemption, and bankruptcy
(including pursuant to Section 506 of the United States Bankruptcy Code or any successor
provision); without limiting the generality of the foregoing, it is understood and agreed that the
Prepayment Consideration may be added to Lender’s bid at any Foreclosure Sale. If Prepayment
Consideration is due hereunder, Lender shall deliver to Borrower a statement setting forth the
amount and determination of the Prepayment Consideration, and, provided that Lender shall have in
good faith applied the formula described below, Borrower shall not have the right to challenge the
calculation or the method of calculation set forth in any such statement in the absence of manifest
error, which calculation may be made by Lender on any day during the thirty (30) day period
preceding the date of such prepayment.

     The term “Default Prepayment” shall mean a prepayment of any portion of the principal amount
of this Note made after occurrence of a Default or Event of Default under any circumstances
including a prepayment in connection with (i) reinstatement of the Security Instrument provided by
statute under foreclosure proceedings or exercise of power of sale, (ii) any statutory right of
redemption exercised by Borrower or any other party having a statutory right to redeem or prevent
foreclosure or power of sale, (iii) any sale in foreclosure or under exercise of a power of sale or
otherwise (including pursuant to a credit bid made by Lender in connection with such sale), (iv)
any other collection action by Lender, or (v) exercise by any governmental authority of any civil
or criminal forfeiture action with respect to any collateral for the Loan. Prepayment
Consideration shall be due and payable upon acceleration of the Debt in accordance with the terms
of this Note, and the “Prepayment Date,” for the purpose of computing Prepayment Consideration,
shall be the date of acceleration (automatic or otherwise) of the Debt in accordance with the terms
of this Note. Exchange of this Note for a different instrument or modification of the terms of
this Note, including classification and treatment of Lender’s claim (other than non-impairment
under Section 1124 of the United States Bankruptcy Code or any successor provision) pursuant to a
plan of reorganization in bankruptcy shall also be deemed to be a Default Prepayment hereunder.

     The “Prepayment Consideration” (as the term is used in this Note) shall mean the present
value, as of the date of the occurrence of the Default, of the remaining scheduled payments of
principal and interest from the date of the occurrence of the Default through the Maturity Date
(including any balloon payment), which shall be determined by discounting such payments at the
Discount Rate (hereinafter defined) less the amount of principal being prepaid. The term “Discount
Rate” shall mean the rate that, when compounded monthly, is equivalent to the Treasury Rate
(hereinafter defined) when compounded semi-annually. The term “Treasury Rate” shall mean the yield
calculated by the linear interpolation of the yields, as reported in Federal Reserve Statistical
Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant
Maturities for the week ending prior to the Prepayment Date, of U.S. Treasury constant maturities
with maturity dates (one longer and one shorter) most nearly approximating the Maturity Date. (If
Release H.15 is no longer published, Lender shall select a comparable publication to determine the
Treasury Rate.)

9

 

     Borrower acknowledges that: (i) Lender has made the Loan to Borrower in reliance on, and the
Loan has been originated for the purpose of selling the Loan in the secondary market to investors
who will purchase the Loan or direct or indirect interests therein in reliance on, the actual
receipt over time of the stream of payments of principal and interest agreed to by Borrower herein;
and (ii) Lender or any subsequent investor in the Loan will incur substantial additional costs and
expenses in the event of a prepayment of the Loan; and (iii) the Prepayment Consideration is
reasonable and is a bargained for consideration and not a penalty and the terms of the Loan are in
various respects more favorable to Borrower than they would have been absent Borrower’s agreement
to pay Prepayment Consideration as provided herein. Borrower agrees that Lender shall not, as a
condition to receiving the Prepayment Consideration, be obligated to actually reinvest the amount
prepaid in any treasury obligation or in any other manner whatsoever. Nothing contained herein
shall be deemed to be a waiver by Lender of any right it may have to require specific performance
of any obligation of Borrower hereunder including to make payments hereunder strictly according to
the terms hereof or to furnish Defeasance Collateral.

     In addition to Prepayment Consideration, Borrower shall pay all hedging and breakage costs of
any kind and in any amount incurred by Lender due to any prepayment (including a Default
Prepayment).

     10. Maximum Rate Permitted by Law. All agreements in this Note and all other Loan Documents
are expressly limited so that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount agreed
to be paid hereunder for the use, forbearance, or detention of money exceed the highest lawful rate
permitted under applicable usury laws. If, from any circumstance whatsoever, fulfillment of any
provision of this Note or any other Loan Document at the time performance of such provision shall
be due shall involve exceeding any usury limit prescribed by law that a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligations to be fulfilled
shall be reduced to allow compliance with such limit, and if, from any circumstance whatsoever,
Lender shall ever receive as interest an amount that would exceed the highest lawful rate, the
receipt of such excess shall be deemed a mistake and shall be canceled automatically or, if
theretofore paid, such excess shall be credited against the principal amount of the indebtedness
evidenced hereby to which the same may lawfully be credited, and any portion of such excess not
capable of being so credited shall be refunded immediately to Borrower.

     11. Events of Default; Acceleration of Amount Due. Lender may in its discretion, without
notice to Borrower, declare the entire Debt, including the Outstanding Principal Balance, all
accrued interest, all costs, expenses, charges and fees payable under any Loan Document, and
Prepayment Consideration immediately due and payable, and Lender shall have all remedies available
to it at law or equity for collection of the amounts due, if any of the following (the “Events of
Default”) occurs:

          (a) Borrower fails to make full and punctual payment of any Monthly Payment or any other
amount payable on a monthly basis under this Note, the Security Instrument or any other Loan
Document within five (5) days of the date on which such payment was due; or

10

 

          (b) Borrower fails to make full payment of the Debt when due, whether on the Maturity Date,
upon acceleration or prepayment, or otherwise; or

          (c) Borrower fails to make full and punctual payment of any Late Charges, costs and expenses
due hereunder, or any other sum of money required to be paid to Lender under this Note, the
Security Instrument or under any other Loan Document (other than any payment described in
subclauses (a) and (b) immediately above), which failure is not cured on or before the fifth (5th)
day after Lender’s written notice to Borrower that such payment is required.

          (d) an Event of Default occurs under the Security Instrument or any other Loan Document that
has continued beyond any applicable cure period therefor.

     12. Time of Essence. Time is of the essence with regard to each provision contained in this
Note.

     13. Transfer and Assignment. This Note may be freely transferred and assigned by Lender.
Borrower’s right to transfer its rights and obligations with respect to the Debt, and to be
released from liability under this Note, shall be governed by the Security Instrument.

     14. Authority of Persons Executing Note. Borrower warrants and represents that the persons or
officers who are executing this Note and the other Loan Documents on behalf of Borrower have full
right, power and authority to do so, and that this Note and the other Loan Documents constitute
valid and binding documents, enforceable against Borrower in accordance with their terms, and that
no other person, entity, or party is required to sign, approve, or consent to, this Note.

     15. Severability. The terms of this Note are severable, and should any provision be declared
by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions
shall, at the option of Lender, remain in full force and effect and shall in no way be impaired.

     16. Borrower’s Waivers. Borrower and all others liable hereon hereby waive presentation for
payment, demand, notice of dishonor, protest, and notice of protest, notice of intent to
accelerate, and notice of acceleration, stay of execution and all other suretyship defenses to
payment generally. No release of any security held for the payment of this Note, or extension of
any time periods for any payments due hereunder, or release of collateral that may be granted by
Lender from time to time, and no alteration, amendment or waiver of any provision of this Note or
of any of the other Loan Documents, shall modify, waive, extend, change, discharge, terminate or
affect the liability of Borrower and any others that may at any time be liable for the payment of
this Note or the performance of any covenants contained in any of the Loan Documents.

     17. Governing Law. This Note shall be governed and construed generally according to the laws
of the jurisdiction in which the real property collateral for this Note is located without regard
to the conflicts of law provisions thereof (“Governing State”).

     18. JURISDICTION AND VENUE. BORROWER HEREBY CONSENTS TO PERSONAL JURISDICTION IN THE
GOVERNING STATE. VENUE OF ANY ACTION

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BROUGHT TO ENFORCE THIS NOTE OR ANY OTHER LOAN DOCUMENT OR ANY ACTION RELATING TO THE LOAN OR THE
DEBT OR THE RELATIONSHIPS CREATED BY OR UNDER THE LOAN DOCUMENTS (“ACTION”) SHALL, AT THE ELECTION
OF LENDER, BE IN (AND IF ANY ACTION IS ORIGINALLY BROUGHT IN ANOTHER VENUE, THE ACTION SHALL AT THE
ELECTION OF LENDER BE TRANSFERRED TO) A STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION LOCATED
IN THE GOVERNING STATE. BORROWER HEREBY CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF THE
STATE COURTS OF THE GOVERNING STATE AND OF FEDERAL COURTS LOCATED IN THE GOVERNING STATE IN
CONNECTION WITH ANY ACTION AND HEREBY WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY
OTHER STATE TO OBJECT TO JURISDICTION WITHIN SUCH STATE FOR PURPOSES OF ANY ACTION. Borrower
hereby waives and agrees not to assert, as a defense to any Action or a motion to transfer venue of
any Action, (i) any claim that it is not subject to such jurisdiction, (ii) any claim that any
Action may not be brought against it or is not maintainable in those courts or that this Note or
any of the other Loan Documents may not be enforced in or by those courts, or that it is exempt or
immune from execution, (iii) that the Action is brought in an inconvenient forum, or (iv) that the
venue for the Action is in any way improper.

     19. Notices. Any notice required or permitted to be given hereunder must be in writing and
given (a) by depositing same in the United States mail, addressed to the party to be notified,
postage prepaid and registered or certified with return receipt requested; (b) by delivering the
same in person to such party; (c) by transmitting a facsimile copy to the correct facsimile phone
number of the intended recipient (with a second copy to be sent to the intended recipient by any
other means permitted under this Section 19); or (d) by depositing the same into the custody of a
nationally recognized overnight delivery service addressed to the party to be notified. In the
event of mailing, notices shall be deemed effective three (3) days after posting; in the event of
overnight delivery, notices shall be deemed effective on the next Business Day following deposit
with the delivery service; in the event of personal service or facsimile transmissions, notices
shall be deemed effective when delivered. For purposes of notice, the addresses of the parties
shall be as set forth in the Table. From time to time either party may designate another address
than the address set forth for all purposes of this Note by giving the other party no less than ten
(10) days advance notice of such change of address in accordance with the notice provisions hereof.
A copy of any notice sent, transmitted or delivered to Lender shall also be delivered to Daniel
Flanigan, Esq., Polsinelli Shalton Welte Suelthaus PC, 700 W. 47th Street, Suite 1000,
Kansas City, Missouri 64112, facsimile number: (816) 753-1536.

     20. Avoidance of Debt Payments. To the extent that any payment to Lender and/or any payment
or proceeds of any collateral received by Lender in reduction of the Debt is subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, to Borrower (or Borrower’s successor) as a debtor in possession, or to a receiver,
creditor, or any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then the portion of the Debt intended to have been satisfied by such payment or
proceeds shall remain due and payable hereunder, be evidenced by this Note, and shall continue in
full force and effect as if such payment or proceeds had never been received by Lender whether or
not this Note has been marked “paid” or otherwise cancelled or satisfied and/or has been delivered
to Borrower, and in such event Borrower shall be immediately

12

 

obligated to return the original Note to Lender and any marking of “paid” or other similar marking
shall be of no force and effect.

     21. Nonrecourse.

          (a) Subject to the provisions of subsections (b) and (c) of this Section 21, Lender shall not
be entitled to recover any deficiency judgment against Borrower or any general partner (if any) of
Borrower on this Note, provided, however, the foregoing shall not be interpreted to: (i) impair or
affect the right of Lender to enforce any of its rights or remedies (other than any right to a
deficiency judgment) provided for in any of the Loan Documents or under applicable law in full
accordance with the terms thereof including the right of Lender to name Borrower or any general
partner of Borrower as a party defendant in any action or suit for specific performance,
foreclosure, or sale (or similar remedy) under the Security Instrument or any other Loan Document;
(ii) impair or affect the validity or enforceability of any guaranty, indemnity agreement
(including any environmental indemnity agreement), letter of credit, or other similar third party
agreement or undertaking made in connection with this Note, the Security Instrument, or any other
Loan Document; (iii) impair or affect Lender’s right to offset any and all amounts outstanding
under any of the Loan Documents against any claim or amount that may be asserted against Lender by
Borrower or any partners, members, shareholders, or other owners of legal or beneficial interests
in Borrower; or (iv) affect the validity or enforceability of or impair the right of Lender to
bring suit and obtain specific performance or personal, recourse judgment to enforce the liability
of Borrower or any other person or entity to the extent of, and Borrower hereby agrees to be
personally liable for, any loss, damage, cost, expense or liability incurred by Lender (including
all attorneys’ fees and expenses and other collection and litigation expenses) arising out of or in
connection with any of the following:

          (A) Borrower or any affiliate, agent, or employee of Borrower misappropriates any rents
or other Property income or collateral proceeds including insurance or condemnation proceeds
or awards;

          (B) Borrower or any affiliate, agent, or employee of Borrower fails to apply or pay
over any tenant security deposits or other refundable deposits in accordance with the terms
of the applicable lease or other agreement or the Security Instrument or any other Loan
Document;

          (C) Borrower or any affiliate, agent, or employee of Borrower receives rents or other
payments from tenants more than one month in advance and fails to apply them in accordance
with the Loan Documents;

          (D) following the occurrence of an Event of Default, Borrower or any affiliate, agent,
or employee of Borrower (including Borrower in its capacity as a debtor or debtor in
possession in a bankruptcy proceeding) fails either to apply rents or other Property income,
whether collected before or after such Event of Default, to the ordinary, customary, and
necessary expenses of operating the Property or, upon demand, to deliver such rents or other
Property income to Lender;

13

 

          (E) waste is committed on the Property during a period while Borrower or any affiliate,
agent, or employee of Borrower is in possession thereof (“waste” meaning the diminution in
the Property’s value resulting from Borrower’s grossly negligent or willful failure to
manage, maintain, repair and otherwise operate the Property in a commercially reasonable
manner);

          (F) any damage to the Property or the Lender is caused as a result of the intentional
misconduct or gross negligence of Borrower or any affiliate, agent, or employee of Borrower;

          (G) any Property is removed in violation of the terms of the Loan Documents;

          (H) Borrower fails, in accordance with the terms of the Loan Documents, to maintain
insurance or to pay taxes, assessments, or other liens or claims that could create liens
affecting the Property (unless Lender is escrowing funds therefor and fails to make such
payments or has taken possession of the Property following an Event of Default, has received
all rents from the Property applicable to the period for which such insurance, taxes or
other items are due, and thereafter fails to make such payments);

          (I) there is any fraud or material misrepresentation by Borrower or any of its
affiliates, any guarantor, any indemnitor or any agent, employee, or other person with
actual or apparent authority to make statements or representations on behalf of Borrower,
any affiliate of Borrower, or any guarantor or indemnitor (“apparent authority” meaning such
authority as the principal knowingly or negligently permits the agent to assume, or which he
holds the agent out as possessing); or

          (J) Borrower fails, following an Event of Default, to deliver to Lender on demand all
security deposits, books and records relating to the Property and in the possession or
control of Borrower or any affiliate, agent, or employee of Borrower.

          (b) Notwithstanding anything to the contrary in the provisions of subsection (a) of this
Section, subsection (a) of this Section shall not apply and Borrower and any general partner of
Borrower shall be personally liable for the Debt if (i) there shall be any violation of the
due-on-sale or due-on-encumbrance provisions of the Security Instrument, (ii) Borrower shall at any
time hereafter make an assignment for the benefit of its creditors, or (iii) the Property or any
part thereof shall at any time hereafter become property of the estate or an asset in (a) a
voluntary bankruptcy, insolvency, receivership, liquidation, winding up, or other similar type of
proceeding, or (b) an involuntary bankruptcy or insolvency proceeding (other than one filed by
Lender) that is not dismissed within sixty (60) days of filing.

          (c) Nothing herein shall be deemed to constitute a waiver by Lender of any right Lender may
have under Sections 506(a), 506(b), 1111(b) or any other provision of the United States Bankruptcy
Code to file a claim for the full amount of the Debt (as defined in the Security Instrument) or to
require that all collateral shall continue to secure all of the Debt.

14

 

     22. Miscellaneous. Neither this Note nor any of the terms hereof, including the provisions of
this Section, may be terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing executed by the party against which enforcement of the termination,
amendment, supplement, waiver or modification is sought, and the parties hereby: (a) expressly
agree that it shall not be reasonable for any of them to rely on any alleged, non-written amendment
to this Note; (b) irrevocably waive any and all right to enforce any alleged, non-written amendment
to this Note; and (c) expressly agree that it shall be beyond the scope of authority (apparent or
otherwise) for any of their respective agents to agree to any non-written modification of this
Note. This Note may be executed in several counterparts, each of which counterpart shall be deemed
an original instrument and all of which together shall constitute a single Note. The failure of
any party hereto to execute this Note, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder. If Borrower consists of more than one person or
entity, then the obligations and liabilities of each person or entity shall be joint and several
and in such case, the term “Borrower” shall mean individually and collectively, jointly and
severally, each Borrower. As used in this Note, (i) the terms “include,” “including” and similar
terms shall be construed as if followed by the phrase “without being limited to,” (ii) any pronoun
used herein shall be deemed to cover all genders, and words importing the singular number shall
mean and include the plural number, and vice versa, (iii) all captions to the Sections hereof are
used for convenience and reference only and in no way define, limit or describe the scope or intent
of, or in any way affect, this Note, (iv) no inference in favor of, or against, Lender or Borrower
shall be drawn from the fact that such party has drafted any portion hereof or any other Loan
Document, (v) the words “Lender” and “Borrower” shall include their respective successors
(including, in the case of Borrower, any subsequent owner or owners of the Property or any part
thereof or any interest therein and Borrower in its capacity as debtor-in-possession after the
commencement of any bankruptcy proceeding), assigns, heirs, personal representatives, executors and
administrators, (vi) the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or,” (vii) the words “hereof,” “herein,” “hereby,” “hereunder,” and
similar terms in this Note refer to this Note as a whole and not to any particular provision or
section of this Note, and (viii) an Event of Default shall “continue” or be “continuing” until such
Event of Default has been waived in writing by Lender. Wherever Lender’s judgment, consent,
approval or discretion is required under this Note or Lender shall have an option, election, or
right of determination or any other power to decide any matter relating to the terms of this Note,
including any right to determine that something is satisfactory or not (“Decision Power”), such
Decision Power shall be exercised in the sole and absolute discretion of Lender except as may be
otherwise expressly and specifically provided herein. Such Decision Power and each other power
granted to Lender upon this Note or any other Loan Document may be exercised by Lender or by any
authorized agent of Lender (including any servicer and/or attorney-in-fact), and Borrower hereby
expressly agrees to recognize the exercise of such Decision Power by such authorized agent. In the
event of a conflict between or among the terms, covenants, conditions or provisions of the Loan
Documents, the term(s), covenant(s), condition(s) and/or provision(s) that Lender may elect to
enforce from time to time so as to enlarge the interest of Lender in its security, afford Lender
the maximum financial benefits or security for the Debt, and/or provide Lender the maximum
assurance of payment of the Debt in full shall control. BORROWER ACKNOWLEDGES AND AGREES THAT IT
HAS BEEN PROVIDED WITH SUFFICIENT AND NECESSARY TIME AND OPPORTUNITY TO REVIEW THE TERMS OF THIS
NOTE, THE SECURITY

15

 

INSTRUMENT, AND EACH OF THE LOAN DOCUMENTS, WITH ANY AND ALL COUNSEL IT DEEMS APPROPRIATE, AND THAT
NO INFERENCE IN FAVOR OF, OR AGAINST, LENDER OR BORROWER SHALL BE DRAWN FROM THE FACT THAT EITHER
SUCH PARTY HAS DRAFTED ANY PORTION HEREOF, OR THE SECURITY INSTRUMENT, OR ANY OF THE LOAN
DOCUMENTS.

     23. Waiver of Counterclaim and Jury Trial. BORROWER HEREBY KNOWINGLY WAIVES THE RIGHT TO
ASSERT ANY COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION OR PROCEEDING BROUGHT
AGAINST BORROWER BY LENDER OR ITS AGENTS. ADDITIONALLY, TO THE EXTENT NOW OR HEREAFTER PERMITTED
BY APPLICABLE LAW, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THE LOAN OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THE LOAN, THIS NOTE, THE SECURITY INSTRUMENT, OR ANY OTHER
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN),
OR ACTION OF BORROWER OR LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER’S MAKING OF
THE LOAN.

     24. Local Law Provisions. In the event of any inconsistencies between the terms and
conditions of this Section and any other terms and conditions of this Note (other than the terms
and conditions of Section 25), the terms and conditions of this Section shall be binding.

NONE.

     25. Additional Provisions. In the event of any inconsistencies between the terms and
conditions of this Section and any other terms and conditions of this Note, the terms and
conditions of this Section shall be binding.

     25.1 Loan Amount and Rate. Section 1 is modified by inserting the following at the end
thereof:

     “The term “Monthly Payment” shall mean, as applicable, the Interest Only
Monthly Payment or the Amortizing Monthly Payment.”

     25.2 Principal and Interest Payments. Section 2 is modified in the following manner:

     (a) The text of Section 2(b) is deleted and the following substituted therefor:

     “(b) (i) An interest only payment (“Interest Only Monthly Payment”) at
the Interest Rate on the Outstanding Principal Balance shall be payable in
arrears on each Interest Only Monthly Payment Date, and (ii) an Amortizing
Monthly Payment on each Amortizing Monthly Payment Date until the Maturity
Date, each of such payments to be applied: (A) to the payment of interest
computed at the Interest Rate; and

16

 

     (B) the balance applied toward the reduction of the Outstanding
Principal Balance; and”.

         (b) The following sentence is added to the end of Section 2: “An “Interest
Only Payment Date” and an “Amortizing Monthly Payment Date” are each referred to
herein as a “Monthly Payment Date”.”

     25.3 Payments. The seventh line of Section 5 is hereby modified by deleting “2:00” and
substituting “3:00” therefor.

     25.4 Late Charge. The opening phrase of the first sentence of Section 6 is hereby
deleted and the following is substituted therefor: “If any sum payable under this Note or
any other Loan Document is not received by Lender by close of business on the date on which
it was due, Borrower shall pay to Lender an amount (the “Late Charge”) equal to the lesser
of”.

     Section 6 is hereby further modified by inserting the following sentence between the
second sentence and the third sentence. “The Late Charge shall not apply to the final
payment due on the Maturity Date.” Nothing in this section shall be interpreted to amend,
alter or waive Lender’s right to collect interest at the Default Rate upon the occurrence of
an Event of Default.

     25.5 Origination, Administration, Enforcement, and Defense Expenses. The second
sentence of Section 8 is hereby deleted.

     Section 8 is hereby further modified by adding the following to the end thereof:

     “Notwithstanding anything to the contrary in this Note, unless an Event of Default
shall have occurred, Borrower shall only be responsible for the payment of Lender’s fees and
expenses relating to the servicing of the Loan if Lender is acting upon a request of
Borrower or in response to a notice relating to the Property, Borrower, any guarantor or
indemnitor or as a result of failure of any party to perform its obligations under the Loan
Documents.”

     25.6 Prepayment; Defeasance. The second line of Section 9(a) is hereby modified by
deleting “ninety (90)” and substituting “one hundred twenty (120)” therefor.

     The second line of Section 9(b)(i) is hereby modified by inserting the following after
“no Event of Default exists”: “unless such Event of Default shall be waived in conjunction
with the Defeasance”.

     The last line of Section 9(b)(i)(B) is modified by deleting “$20,000” and substituting
“$10,000” therefor.

     The second line of Section 9(b)(i)(C) is modified by inserting the following after
“Lender”: “, acting reasonably and in good faith,”.

17

 

     The fourth line of Section 9(b)(i)(C)(1) is hereby modified by inserting “or similar
REMIC eligible collateral issued by any agency of the United States of America which is
acceptable to Lender and the Rating Agencies and in compliance with any requirements
established upon Securitization (as defined in the Security Instrument) of the Loan, which
obligations or collateral must, in any event, be in compliance with Treasury Reg. Section
1.86G-2(a)(8)(i)” between “pledged” and “(the”.

     The second line of Section 9(b)(i)(C)(2) is hereby modified by inserting “reasonably”
between “instruments” and “required.”

     Section 9(b)(i)(C)(4)(a) is hereby deleted.

     The first line of the final paragraph in Section 9A(c) is hereby modified by inserting
“actual” between “all” and “hedging.”

     25.7 Events of Default; Acceleration of Amount Due. The third line of Section 11(a) is
hereby modified by deleting “within five (5) days of” and substituting “on” therefor.

     25.8 Nonrecourse. Section 21 is hereby modified in the following manner:

     (a) The fourth line of Section 21(a)(iv)(D) is hereby modified by deleting the
following: “, whether collected before or after such Event of Default,”.

     (b) The third line of Section 21(a)(iv)(E) is hereby modified by inserting
“material” between “ the” and “diminution.”

     (c) The second line of Section 21(a)(iv)(H) is hereby modified by inserting the
following immediately after “taxes”: “(unless Borrower applies all revenue from the
Property actually received by or on behalf of Borrower first to the payment of taxes
and such amounts are insufficient to pay all taxes).”

     (d) Section 21(a)(iv)(I) is hereby deleted and the following substituted
therefor:

“(I) there is any fraud or material misrepresentation by Borrower or any
guarantor, any indemnitor or any agent employee, or other person under
Borrower’s direct control with actual authority to make statements on behalf
of Borrower, any affiliate of Borrower, or any guarantor or indemnitor; or”

     (e) The following is hereby deleted from the end of Section 21(b): “, or (b)
an involuntary bankruptcy or insolvency proceeding (other than one filed by Lender)
that is not dismissed within sixty (60) days of filing”.

18

 

     25.9 ACH. Notwithstanding any provision herein to the contrary, Borrower shall use
Automatic Clearing House (“ACH”) loan payment procedures and the following provisions shall
apply:

     (a) The terms of Borrower’s account (the “ACH Account”) shall provide that Lender or
Lender’s other designee shall have the right to make withdrawals from the account in the
amount of the Monthly Payment, on the Monthly Payment Date or the next business day
thereafter, each month that such Monthly Payments are due under the Loan.

     (b) In the event that the funds in the ACH Account are insufficient to enable Lender to
make a withdrawal in the amount of the Monthly Payment, this shall constitute an Event of
Default under the Note, and (i) Borrower shall be subject to a Late Charge and the balance
of the Note shall accrue interest at the Default Rate, pursuant to the provisions of the
Note, and (ii) Lender shall be entitled to exercise its rights and remedies under the Loan
Documents for such default.

     (c) In the event that Lender fails to request a disbursement from the ACH Account in
sufficient time to receive the Monthly Payment by the Monthly Payment Date, the inability of
Lender to receive the Monthly Payment by the Monthly Payment Date shall not be considered to
be an Event of Default under the Loan Documents.

     (d) Lender agrees that a malfunction in the ACH system or an error by Lender in
initiating the withdrawal which prevents Lender from receiving the Monthly Payment by the
Monthly Payment Date shall not constitute an Event of Default hereunder. Notwithstanding
the foregoing, the failure of Lender to timely receive the Monthly Payment as set forth in
this subsection, shall not relieve Borrower of its obligations to promptly and timely make
all payments required under this Note when due and to comply with Borrower’s other
obligations hereunder.

19

 

     Intending to be fully bound, Borrower has executed this Note effective as of the day and year
first above written.

	 	 	 	 	 
	Borrower:	 REPUBLIC PARK LLC,

a Delaware limited liability company

 	 
	 	By:  	               /s/ Gary Siegel
 	 
	 	 	Gary R. Siegel 	 
	 	 	Chief Operating Officer 	 
	 

     Pay to the order of                                         , without recourse.

	 	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION,
	 	 	a national banking association
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Print Name:	 	 
	 

	 	 	 	 
	 

	 	Print Title:	 	 
	 

	 	 	 	 

20

 

 Exhibit
10.3

STATE OF Maryland          

COUNTY OF Prince Georges                    , to wit

     The foregoing instrument was acknowledged before me this ___27th___day of September,
2006, by Gary R. Siegel, Chief Operating Officer, on behalf of REPUBLIC PARK LLC, a Delaware
limited liability company.

	 	 	 	 	 
	 	 	 
	 	     /s/ Leslie D.Bridges
 	 
	 	Notary Public 	 
	 	 	 
	 

My commission expires: 5/7/07

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