Document:

Exhibit
10.3

 

BEHRINGER
HARVARD 1325 G STREET, LLC,

a Delaware limited liability company, as grantor

(Borrower)

to

LAWYERS
TITLE REALTY SERVICES, INC., a Virginia corporation, as
trustee (Trustee)

to

MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.,

a Delaware corporation, as nominee of Lender, as beneficiary

(Lender)

 

AMENDED AND RESTATED DEED OF TRUST AND
SECURITY AGREEMENT

Dated:  As of October 18, 2006

Property Location:  1325 G Street
NW, Washington, DC

MERS MIN:
8000101-0000004159-9

DOCUMENT PREPARED BY AND
WHEN RECORDED, RETURN TO:

Kelley Drye & Warren
LLP

101 Park Avenue

New York, New York 10178

Attention:  Paul A. Keenan, Esq.

 

 

THIS AMENDED AND RESTATED DEED OF TRUST AND SECURITY
AGREEMENT (this “Security
Instrument”) is made as of this 18th day of October, 2006, by BEHRINGER HARVARD 1325 G STREET, LLC, a Delaware limited
liability company, having its principal place of business c/o Behringer Harvard
Funds, 15601 Dallas Parkway, Suite 600, Addison, Texas 75001, as grantor (“Borrower”) to LAWYERS TITLE
REALTY SERVICES, INC., a Virginia corporation, having an address at 1015
15th Street, N.W., Suite 300, Washington, DC  20005, as trustee (“Trustee”)
for the benefit of MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., a Delaware corporation, having an address
at 1595 Spring Hill Road, Suite 310, Vienna, Virginia 22182 (“MERS”), as
nominee of BEAR STEARNS COMMERCIAL MORTGAGE, INC.,
a New York corporation, having an address at 383 Madison Avenue, New York, New
York 10179, as grantee (“Lender”).

R E C I T A L S:

WHEREAS, Borrower, by the
terms of that certain Amended and Restated Loan Agreement, dated as of the date
hereof, between Borrower and Lender (as the same may hereafter be amended,
restated, replaced, supplemented, renewed, extended or otherwise modified from
time to time, the “Loan Agreement”)
and evidenced by that certain Amended and Restated Promissory Note executed on
the same date as this Security Instrument (the “Note”)
and in connection with the loan (the “Loan”) from
Lender to Borrower, is indebted to Lender in the principal sum of ONE HUNDRED
MILLION AND NO/100 U.S. DOLLARS ($100,000,000.00).

WHEREAS, Borrower desires to
secure the payment of the Debt (as defined in the Loan Agreement) and the
performance of all of its obligations under the Note and certain Other
Obligations (as defined in Section 2.2).

WHEREAS, Lender has
required, as a condition to making the Loan to Borrower, that Borrower execute
and deliver this Security Instrument, which amends and restates the Original
Deed of Trust (as hereinafter defined) in its entirety, and Borrower, in order
to obtain the Loan, is willing to execute and deliver this Security Instrument.

WHEREAS, this Security Instrument is an amendment and restatement of
that certain Purchase Money Deed of Trust, Assignment of Leases and Rents, and
Security Agreement and Fixture Filing from Behringer Harvard 1325 G Street,
LLC, as Grantor to Roger N. Simon, as Trustee, dated November 15, 2005 and
recorded on November 17, 2005 among the Land Records of the District of Columbia
as Instrument No.: 2005166119, securing Behringer Harvard Operating Partnership
I LP (the “Original  Deed of
Trust”), and is intended to amend and restate the Original Deed of
Trust in its entirety (and if there is a conflict between the terms of the
Original Deed of Trust and this Security Instrument, the terms of this Security
Instrument shall prevail) and Lender is the current holder of the Note secured
by the Original Deed of Trust.  This
Security Instrument is given to secure payment of the Debt and the performance
of the Other Obligations and to reaffirm and clarify the rights and obligations
of the parties under the Loan Documents. 
This Security Instrument (i) shall in no way waive Lender’s rights,
powers or remedies under the Loan Documents, (ii) shall in no way limit, impair
or prejudice Lender from exercising any past, present or future right, power or
remedy from and after the date hereof under

 

 

the Loan Documents, and
(iii) shall not constitute or be deemed to be a novation of the Debt and Other
Obligations.

NOW, THEREFORE, in
consideration of the agreements hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, Trustee and Lender hereby agree as follows:

ARTICLE I - -
GRANTS OF SECURITY

Section 1.1            Property Mortgaged. 
Borrower does hereby irrevocably mortgage, grant, bargain, sell, pledge,
assign, warrant, transfer and convey to Trustee, for the benefit of MERS, as
nominee of Lender and its successors and assigns, all of Borrower’s right,
title and interest in, to and under the following property, rights, interests
and estates now owned, or hereafter acquired by Borrower (collectively, the “Property”):

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

(b)           Additional Land.  All additional lands, estates and development
rights hereafter acquired by Borrower for use in connection with the Land and
the development of the Land and all additional lands and estates therein which
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 (collectively, the
“Improvements”);

(d)           Easements.  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, 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 reversions and remainders, 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, rights of
dower, 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)           Equipment. 
All “equipment,” as such term is defined in Article 9 of the
Uniform Commercial Code (as hereinafter defined), now owned or hereafter
acquired by Borrower, which is used at or in connection with the Improvements
or the Land or is located thereon or therein (including, but not limited to,
all machinery, equipment, furnishings, and electronic data-processing and other
office equipment now owned or hereafter acquired by Borrower and used at the
Improvements or the Land and any and all additions, substitutions and
replacements of any of the foregoing), together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto (collectively, the “Equipment”).

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Notwithstanding the
foregoing, Equipment shall not include any property belonging to tenants under
leases except to the extent that Borrower shall have any right or interest
therein;

(f)            Fixtures.  All Equipment now owned, or the ownership of
which is hereafter acquired, by Borrower which is so related to the Land and
Improvements forming part of the Property that it is deemed fixtures or real
property under the law of the particular state in which the Land is located,
including, without limitation, all building or construction materials intended
for construction, reconstruction, alteration or repair of or installation on
the Property, construction equipment, appliances, machinery, plant equipment,
fittings, apparatuses, fixtures and other items now or hereafter attached to,
installed in or used in connection with (temporarily or permanently) any of the
Improvements or the Land, including, but not limited to, engines, devices for
the operation of pumps, pipes, plumbing, call and sprinkler systems, fire
extinguishing apparatuses and equipment, heating, ventilating, incinerating,
electrical, air conditioning and air cooling equipment and systems, gas and
electric machinery, appurtenances and equipment, pollution control equipment,
security systems, disposals, dishwashers, refrigerators and ranges,
recreational equipment and facilities of all kinds, and water, gas, electrical,
storm and sanitary sewer facilities, utility lines and equipment (whether owned
individually or jointly with others, and, if owned jointly, to the extent of
Borrower’s interest therein) and all other utilities whether or not situated in
easements, all water tanks, water supply, water power sites, fuel stations,
fuel tanks, fuel supply, and all other structures, together with all
accessions, appurtenances, additions, replacements, betterments and
substitutions for any of the foregoing and the proceeds thereof (collectively,
the “Fixtures”).  Notwithstanding the
foregoing, “Fixtures” shall not include any property which tenants are entitled
to remove pursuant to leases except to the extent that Borrower shall have any
right or interest therein;

(g)           Personal Property.  All furniture, furnishings, objects of art,
machinery, goods, tools, supplies, appliances, general intangibles, contract
rights, accounts, accounts receivable, franchises, licenses, certificates and
permits, and all other personal property of any kind or character whatsoever as
defined in and subject to the provisions of the Uniform Commercial Code,
whether tangible or intangible, other than Fixtures, which are now or hereafter
owned by Borrower and which are located within or about the Land and the
Improvements, together with all accessories, replacements and substitutions
thereto or therefor and the proceeds thereof (collectively, the “Personal
Property”), and the right, title and interest of Borrower in and to any of the
Personal Property which may be subject to any security interests, as defined in
the Uniform Commercial Code, as adopted and enacted by the state or states
where any of the Property is located (the “Uniform Commercial Code”), superior
in lien to the lien of this Security Instrument and all proceeds and products
of the above;

(h)           Leases and Rents. 
All leases, subleases or subsubleases, lettings, licenses, concessions
or other agreements (whether written or oral) pursuant to which any Person is
granted a possessory interest in, or right to use or occupy all or any portion
of the Land and the Improvements, and every modification, amendment or other
agreement relating to such leases, subleases, subsubleases, or other agreements
entered into in connection with such leases, subleases, subsubleases, or other
agreements and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto, heretofore or hereafter entered into (collectively, the “Leases”),
whether before or after the filing by or against Borrower of any petition for
relief under the Bankruptcy

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Code and all right, title
and interest of Borrower, its successors and assigns therein and thereunder,
including, without limitation, cash or securities deposited thereunder to
secure the performance by the lessees of their obligations thereunder and all
rents, additional rents, revenues, issues and profits (including all oil and
gas or other mineral royalties and bonuses) from the Land and 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;

(i)            Condemnation Awards.  All Awards, including interest thereon, which
may heretofore and hereafter be made with respect to the Property, whether from
the exercise of the right of eminent domain (including, but not limited to, any
transfer made in lieu of or in anticipation of the exercise of the right), or
for a change of grade, or for any other injury to or decrease in the value of
the Property;

(j)            Insurance Proceeds.  All Insurance Proceeds in respect of the
Property under any Policies covering the Property, including, without limitation,
the right to receive and apply the proceeds of any Policies, judgments, or
settlements made in lieu thereof, in connection with a Casualty to the
Property;

(k)           Tax Certiorari.  All refunds, rebates or credits in connection
with reduction in Taxes of Other Charges charged against the Property as a
result of tax certiorari or any applications or proceedings for reduction;

(l)            Conversion.  All proceeds of the conversion, voluntary or
involuntary, of any of the foregoing including, without limitation, Insurance
Proceeds and Awards, into cash or liquidation claims;

(m)          Rights.  The right, in the name and on behalf of
Borrower, to appear in and defend any action or proceeding brought with respect
to the Property and to commence any action or proceeding to protect the
interest of Lender in the Property;

(n)           Agreements.  All agreements, contracts, certificates,
instruments, 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 Land and any part thereof and any Improvements or any business
or activity conducted on the Land and any part thereof and all right, title and
interest of Borrower therein and thereunder, including, without limitation, the
right, upon the happening of any default hereunder, to receive and collect any
sums payable to Borrower thereunder;

(o)           Trademarks.  All tradenames, trademarks, servicemarks,
logos, copyrights, goodwill, books and records and all other general
intangibles relating to or used in connection with the operation of the
Property;

(p)           Accounts. 
All reserves, escrows and deposit accounts maintained by Borrower with
respect to the Property, including, without limitation (i) all accounts
established pursuant to the Cash Management Agreement and (ii) all
accounts established

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pursuant to the Lockbox
Agreement; together with all deposits or wire transfers made to the Lockbox
Account or Cash Management Account and all cash, checks, drafts, certificates,
securities, investment property, financial assets, instruments and other
property held therein from time to time and all proceeds, products,
distributions or dividends or substitutions thereon and thereof; and

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

AND without limiting any of
the other provisions of this Security Instrument, to the extent permitted by
applicable law, Borrower expressly grants to MERS, as nominee of Lender, as
secured party, a security interest in the portion of the Property which is or
may be subject to the provisions of the Uniform Commercial Code which are
applicable to secured transactions; it being understood and agreed that the
Improvements and Fixtures are part and parcel of the Land (the Land, the
Improvements and the Fixtures collectively referred to as the “Real Property”)
appropriated to the use thereof and, whether affixed or annexed to the Real
Property or not, shall for the purposes of this Security Instrument be deemed
conclusively to be real estate and subject to this Security Instrument.

Section 1.2            Assignment
of Rents.  Borrower hereby absolutely and
unconditionally assigns to MERS, as nominee of Lender all of Borrower’s right,
title and interest in and to all current and future Leases and Rents; it being
intended by Borrower that this assignment constitutes a present, absolute
assignment and not an assignment for additional security only.  Nevertheless, subject to the terms of the
Assignment of Leases, the Cash Management Agreement and Section 7.1(h) of
this Security Instrument, Lender grants to Borrower a revocable license to
collect, receive, use and enjoy the Rents and Borrower shall hold the Rents, or
a portion thereof sufficient to discharge all current sums due on the Debt, for
use in the payment of such sums.

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
MERS, as nominee of Lender, as security for the Obligations (hereinafter
defined), a security interest in the Fixtures, the Equipment and the Personal
Property to the full extent that the Fixtures, the Equipment and the Personal
Property may be subject to the Uniform Commercial Code (said portion of the
Property so subject to the Uniform Commercial Code being called the “Collateral”).  If an Event of Default shall occur and be
continuing, Lender, in addition to any other rights and remedies which it may
have, shall have and may exercise immediately and without demand, any and all
rights and remedies granted to a secured party upon default under the Uniform
Commercial Code, including, without limiting the generality of the foregoing, the
right to take possession of the Collateral or any part thereof, and to take
such other measures as Lender may deem necessary for the care, protection and
preservation of the Collateral.  Upon
request or demand of Lender after the occurrence and during the continuance of
an Event of Default, Borrower shall, at its expense, assemble the Collateral
and make it available to Lender at a convenient place (at the Land if tangible
property) reasonably acceptable to Lender. 
Borrower shall pay to Lender on demand any and all expenses,

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including reasonable legal
expenses and attorneys’ fees, incurred or paid by Lender in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect
to the Collateral after the occurrence and during the continuance of an Event
of Default.  Any notice of sale,
disposition or other intended action by Lender with respect to the Collateral
sent to Borrower in accordance with the provisions hereof at least ten (10)
Business Days prior to such action, shall, except as otherwise provided by
applicable law, constitute reasonable notice to Borrower.  The proceeds of any disposition of the
Collateral, or any part thereof, may, except as otherwise required by
applicable law, be applied by Lender to the payment of the Debt in such
priority and proportions as Lender in its discretion shall deem proper.  Borrower’s (debtor’s) principal place of
business is as set forth on page one hereof and the address of Lender (secured
party) is as set forth on page one hereof. 
Borrower’s organizational ID no. is 4058123.

Section 1.4            Fixture
Filing.  Certain of the Property is or will become “fixtures”
(as that term is defined in the Uniform Commercial Code) on the Land, and this
Security Instrument, upon being filed for record in the real estate records of
the city or county wherein such fixtures are situated, shall operate also as a
financing statement filed as a fixture filing in accordance with the applicable
provisions of said Uniform Commercial Code upon such of the Property that is or
may become fixtures.

Section 1.5            Pledges
of Monies Held.  Borrower hereby pledges to Lender any and all
monies now or hereafter held by Lender or on behalf of Lender, including,
without limitation, any sums deposited in the Lockbox Account, the Cash
Management Account, the Reserve Funds and Net Proceeds, as additional security
for the Obligations until expended or applied as provided in this Security
Instrument or other Loan Documents.

Section 1.6            Grants
to MERS.  This Security Instrument and the benefit of
grants, assignments and transfers made to MERS in this Article 1 shall inure to
MERS solely in its capacity as Lender’s nominee.

CONDITIONS TO GRANT

TO HAVE AND TO HOLD the above granted and described Property
unto Trustee for and on behalf of MERS, as nominee of Lender and to the use and
benefit of MERS as nominee of Lender and Trustee for their successors and
assigns, forever;

IN TRUST, WITH POWER OF SALE, to
secure payment to Lender of the Debt at the time and in the manner provided for
its payment in the Loan Agreement, the Note and in this Security Instrument.

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 Note, the Loan Agreement and this Security Instrument, shall well and truly
perform the Other Obligations as set forth in this Security Instrument and
shall well and truly abide by and comply with each and every covenant and
condition set forth herein and in the Note, the Loan Agreement and the other
Loan Documents, those presents and the estates hereby granted shall cease,
terminate and be void; provided, however, that Borrower’s obligation to
indemnify and

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hold harmless Lender
pursuant to the provisions hereof shall survive any such payment or release.

Upon payment in full of the
Debt in accordance with the Loan Agreement, Lender will execute and deliver a
release of the lien of this Security Instrument in customary form.

ARTICLE II - - DEBT
AND OBLIGATIONS SECURED

Section 2.1            Debt.  This
Security Instrument and the grants, assignments and transfers made in
Article I are given for the purpose of securing the Debt.

Section 2.2            Other
Obligations.  This Security Instrument and the grants,
assignments and transfers made in Article I are also given for the purpose
of securing the following (the “Other Obligations”):

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

(b)           the performance of each obligation of
Borrower contained in the Loan Agreement and any other Loan Document; and

(c)           the performance of each obligation of
Borrower contained in any renewal, extension, amendment, modification,
consolidation, change of, or substitution or replacement for, all or any part
of the Note, the Loan Agreement or any other Loan Document.

Section 2.3            Debt and
Other Obligations.  Borrower’s obligations for the payment of the
Debt and the performance of the Other Obligations shall be referred to
collectively herein as the “Obligations.”

ARTICLE III - -
BORROWER COVENANTS

Borrower covenants and
agrees that:

Section 3.1            Payment
of Debt.  Borrower will pay the Debt at the time and in
the manner provided in the Loan Agreement, the Note and this Security
Instrument.

Section 3.2            Incorporation
by Reference.  All the covenants, conditions and agreements
contained in (a) the Loan Agreement, (b) the Note and (c) all
and any of the other Loan Documents, 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. 
Borrower shall obtain and maintain, or cause to be maintained, in full
force and effect at all times insurance with respect to Borrower and the
Property as required pursuant to the Loan Agreement.

Section 3.4            Maintenance of Property.  Borrower
shall cause the Property to be maintained in a good and safe condition and
repair.  The Improvements, the Fixtures,
the Equipment and the Personal Property shall not be removed, demolished or
materially altered

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(except for normal
replacement of the Fixtures, the Equipment or the Personal Property, tenant
finish and refurbishment of the Improvements and for the disposal of Fixtures,
Equipment or Personal Property not material to the use or value of the Property
as an office building) 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
Condemnation, and shall complete and pay for any structure at any time in the
process of construction or repair on the Land.

Section 3.5            Waste. 
Borrower shall not commit or suffer any waste of the Property 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 allow the cancellation of any
Policy, or do or permit to be done thereon anything that may in any way
materially impair the value of the Property or the security of this Security
Instrument.  Borrower will 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 3.6            Payment
for Labor and Materials.

(a)           Subject to Section 3.6(b), Borrower
will promptly pay when due all bills and costs for labor, materials, and
specifically fabricated materials (“Labor and Material Costs”) 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 Encumbrances
and other Liens permitted pursuant to the Loan Documents.

(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 Labor and Material Costs,
provided that (i) no Event of Default has occurred and is continuing under
the Loan Agreement, the Note, this Security Instrument or any of the other Loan
Documents, (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 suspend the collection of the Labor and
Material Costs from Borrower and from the Property or Borrower shall have paid
all of the Labor and Material Costs (or such portion thereof as to which
collection is not suspended) 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 immediate danger of being sold, forfeited, terminated,
canceled or lost, and (vi) 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 Labor and Material Costs, together with
all interest and penalties thereon.

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Section 3.7            Performance
of Other Agreements.  Borrower shall observe and perform each and
every term, covenant and provision to be observed or performed by Borrower
pursuant to the Loan Agreement, any other Loan Document and any other agreement
or recorded instrument affecting or pertaining to the Property and any
amendments, modifications or changes thereto.

Section 3.8            Change
of Name, Identity or Structure.  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 without
notifying 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 Lender.  Borrower shall execute and deliver to Lender,
prior to or contemporaneously with the effective date of any such change, any
financing statement or financing statement change required by Lender to
establish or maintain the validity, perfection and priority of the security
interest granted herein.  At the request
of Lender, Borrower shall execute a certificate in form satisfactory to 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.

Section 3.9            Title. 
Borrower has good, marketable and insurable fee simple title to the real
property comprising part of the Property and good title to the balance of such
Property, free and clear of all Liens (as defined in the Loan Agreement)
whatsoever except the Permitted Encumbrances (as defined in the Loan
Agreement), such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. 
The Permitted Encumbrances in the aggregate do not materially and
adversely affect the value, operation or use of the Property or Borrower’s
ability to repay the Loan.  This Security
Instrument, when properly recorded in the appropriate records, together with
any Uniform Commercial Code financing statements required to be filed in
connection therewith, will create (a) a valid, perfected first priority
lien on that portion of the Property constituting interests in real estate,
subject only to Permitted Encumbrances and the Liens created by the Loan
Documents and (b) to the extent that a security interest therein may be
perfected by the filing of financing statements under the Uniform Commercial
Code, perfected security interests in and to, and perfected collateral
assignments of, all personalty (including, to the extent that they constitute
personalty subject to the Uniform Commercial Code, the Leases), all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents.  There are no claims for payment for work,
labor or materials affecting the Property which are past due and are or may
become a lien prior to, or of equal priority with, the Liens created by the
Loan Documents unless such claims for payments are being contested in
accordance with the terms and conditions of this Security Instrument.

Section 3.10         Partition.  Notwithstanding
anything to the contrary contained herein, for so long as the Loan is
outstanding Borrower shall not bring an action for partition with respect to
such Borrower’s ownership interest in the Property or to compel any sale
thereof and each Borrower hereby expressly waives any and all rights to
partition the Property.

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ARTICLE IV - -
OBLIGATIONS AND RELIANCES

Section 4.1            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 the Loan Agreement, the Note, this Security Instrument and the other 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 4.2            No
Reliance on Lender.  The general partners, members, principals and
(if Borrower is a trust) beneficial owners of Borrower are experienced in the
ownership and operation of properties similar to the Property, and Borrower and
Lender are relying solely upon such expertise and business plan 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 4.3            No
Lender Obligations.

(a)           Notwithstanding the provisions of
Subsections 1.1(h) and (n) or Section 1.2, Lender is not undertaking
the performance of (i) any obligations under the Leases; or (ii) any
obligations with respect to such agreements, contracts, certificates,
instruments, franchises, permits, trademarks, licenses and other documents.

(b)           By accepting or approving anything
required to be observed, performed or fulfilled or to be given to Lender
pursuant to this Security Instrument, the Loan Agreement, the Note or the other
Loan Documents, including, without limitation, any Officer’s Certificate,
balance sheet, statement of profit and loss or other financial statement,
survey, appraisal, or Policy, Lender shall not be deemed to have warranted,
consented to, or affirmed the sufficiency, the legality or effectiveness of
same, and such acceptance or approval thereof shall not constitute any warranty
or affirmation with respect thereto by Lender.

Section 4.4            Reliance. 
Borrower recognizes and acknowledges that in accepting the Loan
Agreement, the Note, this Security Instrument and the other Loan Documents,
Lender is expressly and primarily relying on the truth and accuracy of the
warranties and representations set forth in Section 4.1 of the Loan
Agreement 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 making the Loan; 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 in
Section 4.1 of the Loan Agreement.

ARTICLE V - - FURTHER
ASSURANCES

Section 5.1            Recording of Security Instrument,
etc.  Borrower forthwith upon the execution and
delivery of this Security Instrument and thereafter, from time to time upon
Lender’s request, will cause this Security Instrument and any of the other 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,
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

 11
 

 

 

protect and perfect the lien
or security interest hereof upon, and the interest of Lender in, the
Property.  Borrower will 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 other Loan Documents, any note, deed of trust 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
deed of trust or 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 5.2            Further
Acts, etc.  Borrower will, at the cost of Borrower, and
without expense to Lender, do, execute, acknowledge and deliver all and every
further acts, deeds, conveyances, deeds of trust, 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, deeded, 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 or for filing, registering or recording this
Security Instrument, or for complying with all Legal Requirements.  Borrower, on demand, will execute and
deliver, and in the event it shall fail to so execute and deliver, 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 to evidence 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
at law and in equity, including without limitation, such rights and remedies
available to Lender pursuant to this Section 5.2.

Section 5.3            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 which 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 (other than the inclusion of such
amounts as income for income tax purposes or taxes on Lender’s capital),
Borrower will pay the tax, with interest and penalties thereon, if any.  If Lender is advised by counsel chosen by it
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 by written notice of not less than one hundred
twenty (120) days to declare the Debt immediately due and payable.  If so accelerated, Borrower shall repay the
Loan without premium or penalty.

(b)           Borrower will 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

 12
 

 

 

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 one hundred twenty (120) days, to declare the Debt
immediately due and payable.  If so
accelerated, Borrower shall repay the Loan without premium or penalty.

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

Section 5.4            Severing
of Security Instrument.  This Security Instrument and
the Note shall, at any time until the same shall be fully paid and satisfied,
at the sole election of Lender, be severed into two or more notes and two or
more security instruments in such denominations as Lender shall determine in
its sole discretion, each of which shall cover all or a portion of the Property
to be more particularly described therein. 
To that end, Borrower, upon written request of Lender, shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered by
the then owner of the Property, 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 of this Security
Instrument, and containing terms, provisions and clauses similar to, and no
more onerous to Borrower than, those contained herein and in the Note, and such
other documents and instruments as may be required by Lender; provided that
Borrower’s obligations are not materially increased thereby.

Section 5.5            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
other Loan Document which is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such Note or other Loan
Document, Borrower will issue, in lieu thereof, a replacement Note or other
Loan Document, dated the date of such lost, stolen, destroyed or mutilated Note
or other Loan Document in the same principal amount thereof and otherwise of
like tenor.

ARTICLE VI - - DUE
ON SALE/ENCUMBRANCE

Section 6.1            Lender Reliance. 
Borrower acknowledges that Lender has examined and relied on the
experience of Borrower and its general partners, members, principals and (if
Borrower is a trust) beneficial owners in owning and operating properties such
as the Property in agreeing to make the Loan, and will continue to rely on
Borrower’s ownership of the Property as a means of maintaining the value of the
Property as security for repayment of the Debt and the performance of the Other
Obligations.  Borrower acknowledges that
Lender has a valid interest in maintaining the value of the Property so as to
ensure that, should Borrower default in the repayment of the Debt or the
performance of the Other Obligations, Lender can recover the Debt by a sale of
the Property.

Section
6.2            No Sale/Encumbrance.  Neither Borrower nor any Restricted Party
shall Transfer the Property or any part thereof or any interest therein or
permit or suffer the Property or any part thereof or any interest therein to be
Transferred other than as expressly permitted pursuant to the terms of the Loan
Agreement.

 13

 

ARTICLE VII - -
RIGHTS AND REMEDIES UPON DEFAULT

Section 7.1            Remedies.  Upon
the occurrence and during the continuance 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, but not limited to, the following actions, each of which
may be pursued concurrently or otherwise, at such time and in such order as
Lender may determine, in its sole discretion, 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, subject to the continuing lien and
security interest of this Security Instrument for the balance of the Debt not
then due, unimpaired and without loss of priority;

(d)           intentionally omitted;

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

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

(g)           apply for the appointment of a
receiver, trustee, liquidator or conservator of the Property, without notice
and without regard for the adequacy of the security for the Debt and without
regard for the solvency of Borrower, any Guarantor, Indemnifying Person with
respect to the Loan or of any Person liable for the payment of the Debt;

(h)           the license granted to Borrower under
Section 1.2 hereof 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,

 14
 

 

 

without limitation, 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 in its sole discretion after
deducting therefrom all expenses (including reasonable attorneys’ fees)
incurred in connection with the aforesaid operations and all amounts necessary
to pay the Taxes, Other Charges, Insurance Premiums 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;

(i)            exercise any and all rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code, including, without limiting the generality of the foregoing:  (i) the right to take possession of the
Fixtures, the Equipment, 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 Fixtures, the Equipment, the Personal Property, and
(ii) request Borrower at its expense to assemble the Fixtures, the
Equipment, 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 Fixtures, the Equipment, the Personal Property sent to Borrower
in accordance with the provisions hereof at least ten (10) days prior to
such action, shall constitute commercially reasonable notice to Borrower;

(j)            apply any sums then deposited or
held in escrow or otherwise by or on behalf of Lender in accordance with the
terms of the Loan Agreement, this Security Instrument or any other Loan
Document to the payment of the following items in any order in its uncontrolled
discretion:

(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;

(v)     All
other sums payable pursuant to the Note, the Loan Agreement, this Security
Instrument and the other Loan Documents, including without limitation advances
made by Lender pursuant to the terms of this Security Instrument;

(k)           pursue such other remedies as Lender
may have under applicable law; or

 15
 

 

 

(l)            apply the undisbursed balance of 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.

In the event of a sale, by
foreclosure, power of sale or otherwise, of less than all of 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.

Section 7.2            Application
of Proceeds.  The purchase money, proceeds and avails of
any disposition of the Property, and or any part thereof, or any other sums
collected by Lender pursuant to the Note, this Security Instrument or the other
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.

Section 7.3            Right to
Cure Defaults.  Upon the occurrence and during the
continuance 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, make any payment or do any act required
of Borrower hereunder 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 reasonable attorneys’ fees to the
extent permitted by law), with interest as provided in this Section 7.3,
shall constitute a portion of the Debt and shall be due and payable to Lender
upon demand.  All such costs and expenses
incurred by Lender in remedying such Event of Default or such failed payment or
act or in appearing in, defending, or bringing any such action or proceeding
shall bear interest at the Default Rate, for the period after 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 shall be deemed to constitute a portion of the Debt and be secured by this
Security Instrument and the other Loan Documents and shall be immediately due
and payable upon demand by Lender therefor.

Section 7.4            Actions
and Proceedings.  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, which Lender, in
its discretion, decides should be brought to protect its interest in the
Property.

Section 7.5            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 which 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 7.6            Examination
of Books and Records.  At reasonable times and upon reasonable
notice, Lender, its agents, accountants and attorneys shall have the right to
examine the records, books, management and other papers of Borrower which
reflect upon the financial

 16
 

 

 

condition of the Property or
of any Borrower owning a 20% or greater undivided interest therein, at the
Property or at any office regularly maintained by Borrower where the books and
records are located.  Lender and its
agents shall have the right to make copies and extracts from the foregoing
records and other papers.  In addition,
at reasonable times and upon reasonable notice, Lender, its agents, accountants
and attorneys shall have the right to examine and audit the books and records
of Borrower pertaining to the income, expenses and operation of the Property
during reasonable business hours at any office of Borrower where the books and
records are located.  This Section 7.6
shall apply throughout the term of the Note and without regard to whether an
Event of Default has occurred or is continuing.

Section 7.7            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 or any Guarantor or
Indemnifying Person with respect to the Loan to take any action to foreclose
this Security Instrument or otherwise enforce any of the provisions hereof or
of the Note or the other 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 other Loan
Documents.

(a)           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.

(b)           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 7.8            Right to
Release Any Portion of the Property. 
Lender may release any portion of the Property for such consideration as
Lender may require without, as to the remainder of the Property, 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.

 17
 

 

 

Section 7.9            Violation
of Laws.  If the Property is not in material compliance
with Legal Requirements, Lender may impose additional requirements upon
Borrower in connection herewith including, without limitation, monetary reserves
or financial equivalents.

Section 7.10         Recourse
and Choice of Remedies.  The provisions of
Section 9.4 of the Loan Agreement are hereby incorporated by reference
into this Security Instrument to the same extent and with the same force as if
fully set forth herein.

Section 7.11         Right of
Entry.  Upon reasonable notice to Borrower, Lender
and its agents shall have the right to enter and inspect the Property at all
reasonable times.

Section 7.12         References to Lender. 
Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, all references herein to “Lender” shall be deemed to
collectively or individually (as the context requires) refer to Lender or to
MERS, acting on behalf of and at the sole direction of Lender in its capacity
as Lender’s nominee, as each of their interests may appear; provided, that,
unless Lender, in its sole discretion, shall determine otherwise, only Lender
(and not MERS) shall be deemed to be “Lender” with respect to (a) any consent
or similar approval right granted to Lender hereunder or under any of the other
Loan Documents (including, without limitation, any consent or similar approval
right that is deemed granted if not approved or denied within a specified time
period), (b) any items, documents or other information required to be delivered
to Lender hereunder or under any of the other Loan Documents (other than
notices expressly required to be sent to MERS) or (c) any future funding or
other obligations of Lender to Borrower or any affiliate of Borrower hereunder
or under any of the other Loan Documents, if any.

Section 7.13         Failure to Act. 
Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, the failure of MERS to take any action hereunder or
under any of the other Loan Documents, other than such acts as it may be
required to take under applicable law by virtue of its capacity as lienholder
or secured party of record, shall not (a) be deemed to be a waiver of any term
or condition of this Security Instrument or any of the other Loan Documents, or
(b) adversely affect any rights of Lender hereunder or under any of the other
Loan Documents.

ARTICLE VIII - -
ENVIRONMENTAL HAZARDS

Section 8.1            Environmental
Representations and Warranties.  Except as otherwise disclosed
by that certain Phase I environmental report (or Phase II environmental report,
if required) delivered to Lender by Borrower in connection with the origination
of the Loan (such report is referred to below as the “Environmental Report”),
to Borrower’s Knowledge (a) there are no Hazardous Substances (defined
below) or underground storage tanks in, on, or under the Property, except those
that are (i) in compliance with Environmental Laws (defined below) and
with permits issued pursuant thereto (to the extent such permits are required
under Environmental Law), (ii) de-minimis amounts necessary to operate the
Property for the purposes set forth in the Loan Agreement which will not result
in an environmental condition in, on or under the Property and which are
otherwise permitted under and used in compliance with Environmental Law and
(iii) fully disclosed to Lender in writing pursuant the Environmental
Report; (b) there are no past, present or threatened Releases (defined
below) of Hazardous

 18
 

 

 

Substances in, on, under or
from the Property which has not been fully remediated in accordance with
Environmental Law; (c) there is no threat of any Release of Hazardous
Substances migrating to the Property; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant
thereto, in connection with the Property which has not been fully remediated in
accordance with Environmental Law; (e) Borrower does not know of, and has
not received, any written or oral notice or other communication from any Person
(including but not limited to a Governmental Authority) relating to Hazardous
Substances or Remediation (defined below) thereof, of possible liability of any
Person pursuant to any Environmental Law, other environmental conditions in
connection with the Property, or any actual or potential administrative or
judicial proceedings in connection with any of the foregoing; and
(f) Borrower has truthfully and fully disclosed 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 has provided to Lender all
information that is contained in Borrower’s files and records, including, but
not limited to, any reports relating to Hazardous Substances in, on, under or
from the Property and/or to the environmental condition of the Property.

“Environmental
Law” means any present and 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,
but is not limited to, 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 but not limited to 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, but is not limited to, any present and
future federal, state and local laws, statutes, ordinances, rules, regulations
and the like, as well as common law: 
conditioning transfer of property upon a negative declaration or other
approval of a governmental authority of the environmental condition of 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, whether or not in connection with transfer of title
to or interest in property; imposing conditions or requirements relating to
Hazardous Substances in connection with permits or other authorization for
lawful activity; relating to nuisance, trespass or other causes of action in
respect of Hazardous Substances related to the Property; or, to the extent
arising out of the presence of Hazardous Substances, relating to wrongful
death, personal injury, or property or other damage in connection with any
physical condition or use of the Property.

“Hazardous
Substances” include but are not limited to any and all substances
(whether solid, liquid or gas) defined, listed, or otherwise classified as
pollutants, hazardous wastes, hazardous substances, hazardous materials,
extremely hazardous wastes, or words of

 19
 

 

 

similar meaning or
regulatory effect under any present or future Environmental Laws or that may
have a negative impact on human health or the environment, including but not
limited to petroleum and petroleum products, asbestos and asbestos-containing
materials, polychlorinated biphenyls, lead, radon, radioactive materials,
flammables and explosives, but excluding substances of kinds and in amounts
ordinarily and customarily used or stored in similar properties for the purpose
of cleaning or other maintenance or operations and otherwise in compliance with
all Environmental Laws.

“Release”
of any Hazardous Substance includes but is not limited to any release, deposit,
discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing or other movement of Hazardous
Substances.

“Remediation”
includes but is not limited to any response, remedial, removal, or corrective
action, any activity to clean-up, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Substance, 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 Article 8.

Section 8.2            Environmental
Covenants.  Borrower covenants and agrees that:  (a) Borrower shall use commercially
reasonable efforts to ensure that all uses and operations on or of the Property
shall be in compliance with all Environmental Laws and permits issued pursuant
thereto; (b) Borrower shall use commercially reasonable efforts to prevent
any Releases of Hazardous Substances in, on, under or from the Property;
(c) Borrower shall not permit any Hazardous Substances in, on, or under
the Property, except those that are (i) in compliance with all
Environmental Laws and with permits issued pursuant thereto (to the extent such
permits are required by Environmental Law), (ii) de-minimis amounts
necessary to operate the Property for the purposes set forth in the Loan
Agreement which will not result in an environmental condition in, on or under
the Property and which are otherwise permitted under and used in compliance
with Environmental Law and (iii) fully disclosed to Lender in writing;
(d) Borrower shall keep the Property free and clear of all liens and other
encumbrances imposed pursuant to any Environmental Law, whether due to any act
or omission of Borrower or any other Person (the “Environmental Liens”);
(e) Borrower shall, at its sole cost and expense, fully and expeditiously
cooperate in all activities pursuant to Section 8.3 below, including but
not limited to 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 or other investigation of
environmental conditions in connection with the Property, pursuant to any
reasonable written request of Lender made in the event that Lender has reason
to believe that an environmental hazard exists on the Property (including but
not limited to sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas), 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 made in the event that Lender has reason
to believe that an environmental hazard exists on the Property to
(i) reasonably effectuate Remediation of any condition (including but not
limited to a Release of a Hazardous Substance) in, on, under or from the
Property; (ii) comply

 20
 

 

 

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 with respect to
Hazardous Substances that materially increases the dangers to human health or
the environment, poses an unreasonable risk of harm to any Person (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 of (A) any presence or Releases or threatened
Releases of Hazardous Substances in, on, under, from or migrating towards the
Property; (B) any non-compliance with any Environmental Laws related in
any way to the Property; (C) any actual or potential Environmental Lien;
(D) any required or proposed Remediation of environmental conditions
relating to the Property; and (E) any written notice or other written
communication of which Borrower becomes aware from any source whatsoever
(including but not limited to a governmental entity) relating in any way to
Hazardous Substances or Remediation thereof, possible liability of any Person
pursuant to any Environmental Law, other environmental conditions in connection
with the Property, or any actual or potential administrative or judicial
proceedings in connection with anything referred to in this Article 8.

Section 8.3            Lender’s
Rights.  In the event that Lender has reason to
believe that an environmental hazard exists on the Property that does not, in
Lender’s sole discretion, endanger any tenants or other occupants of the
Property or their guests or the general public or materially and adversely
affect the value of the Property, upon reasonable notice from Lender, Borrower
shall, at Borrower’s expense, promptly cause an engineer or consultant
satisfactory to Lender to conduct an environmental assessment or audit (the
scope of which shall be determined in Lender’s sole and absolute discretion)
and take any samples of soil, groundwater or other water, air, or building
materials or any other invasive testing requested by Lender and promptly deliver
the results of any such assessment, audit, sampling or other testing; provided,
however, if such results are not delivered to Lender within a reasonable period
or if Lender has reason to believe that an environmental hazard exists on the
Property that, in Lender’s sole judgment, endangers any tenant or other
occupant of the Property or their guests or the general public or may
materially and adversely affect the value of the Property, upon reasonable
notice to Borrower, Lender and any other Person designated by Lender, including
but not limited to any receiver, any representative of a governmental entity,
and any environmental consultant, shall have the right, but not the obligation,
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 but not
limited to conducting any environmental assessment or audit (the scope of which
shall be determined in Lender’s sole and absolute discretion) and taking
samples of soil, groundwater or other water, air, or building materials, and
reasonably conducting other invasive testing. 
Borrower shall cooperate with and provide Lender and any such Person
designated by Lender with access to the Property.

ARTICLE IX - -
INDEMNIFICATION

Section 9.1            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, without
limitation, strict liabilities), actions,

 21
 

 

 

proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value, fines,
penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, punitive damages, foreseeable and unforeseeable consequential
damages, of whatever kind or nature (including but not limited to reasonable
attorneys’ fees and other costs of defense) (collectively, 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, except, in each case, to the extent arising out of any
Indemnified Party’s gross negligence or willful misconduct:  (a) ownership of this Security
Instrument, the Property or any interest therein or receipt of any Rents;
(b) any amendment to, or restructuring of, the Debt, the Note, the Loan
Agreement, this Security Instrument, or any other Loan Documents; (c) any
and all lawful action that may be taken by Lender in connection with the
enforcement of the provisions of this Security Instrument, the Loan Agreement,
the Note or any of the other Loan Documents, whether or not suit is filed in
connection with same, or in connection with Borrower, any Guarantor or
Indemnifying Person and/or any 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, the Note, the Loan Agreement
or any of the other Loan Documents; (g) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Property or any part thereof; (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 this 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 Legal Requirements; (j) the enforcement by any Indemnified Party
of the provisions of this Article 9; (k) any and all claims and demands
whatsoever which 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; (l) the payment of
any commission, charge or brokerage fee to anyone claiming through Borrower
which may be payable in connection with the funding of the Loan; or
(m) any misrepresentation made by Borrower in this Security Instrument or
any other Loan Document.  Any amounts
payable to Lender by reason of the application of this Section 9.1 shall
become immediately due and payable and shall bear interest at the Default Rate
from the date loss or damage is sustained by Lender until paid.  For purposes of this Article 9, the term
“Indemnified Parties” means Lender and any Person who is or will have been
involved in the origination of the Loan, any Person who is or will have been
involved in the servicing of the Loan secured hereby, any Person in whose name
the encumbrance created by this Security Instrument is or will have been
recorded, any Person who may hold or acquire or will have held a full or
partial interest in the Loan secured hereby (including, but not limited to,
investors or prospective investors in the Securities, as well as custodians,
trustees and other fiduciaries who hold or have held a full or partial interest
in the Loan secured hereby for the benefit of third parties) as well as the
respective directors, officers, shareholders, partners, employees, agents,
servants, representatives, contractors, subcontractors,

 22
 

 

 

affiliates, subsidiaries,
participants, successors and assigns of any and all of the foregoing
(including, but not limited to, any other Person who holds or acquires or will
have held a participation or other full or partial interest in the Loan,
whether during the term of the Loan or as a part of or following a foreclosure
of the Loan and any successors by merger, consolidation or acquisition of all
or a substantial portion of Lender’s assets and business).

Section 9.2            Security
Instrument 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, but excluding any income, franchise or other similar taxes.

Section 9.3            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, without limitation, reasonable
attorneys’ fees and costs incurred in the investigation, defense, and
settlement of Losses incurred in correcting any prohibited transaction or in
the sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in Lender’s sole
discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 4.1.9 or 5.2.12 of the Loan Agreement.

Section 9.4            Environmental
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 and costs of Remediation (whether or not
performed voluntarily), engineers’ fees, environmental consultants’ fees, and
costs of investigation (including but not limited to 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: 
(a) any presence of any Hazardous Substances in, on, above, or
under the Property; (b) any past, present or threatened Release of
Hazardous Substances in, on, above, under or from the Property; (c) any
activity by Borrower, any Person affiliated with Borrower or any tenant or
other user of the Property in connection with any actual, proposed or
threatened use, treatment, storage, holding, existence, disposition or other
Release, generation, production, 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; (d) any activity by Borrower, any Person affiliated
with Borrower or any tenant or other user 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 pursuant to court or administrative order, including but not
limited to any removal, remedial or corrective action; (e) any past or
present non-compliance or violations of any Environmental Laws (or permits
issued pursuant to any Environmental Law) in connection with the Property or
operations thereon, including but not limited to any failure by Borrower, any
Affiliate of Borrower or any tenant or other user of the Property to comply
with any order of any Governmental Authority in connection with any Environmental
Laws; (f) the imposition, recording or filing of any Environmental Lien
encumbering the Property; (g) any administrative processes or proceedings
or judicial

 23
 

 

 

proceedings in any way
connected with any matter addressed in Article 8 and this Section 9.4;
(h) any past, present or threatened injury to, destruction of or loss of
natural resources in any way connected with the Property, including but not
limited to costs to investigate and assess such injury, destruction or loss;
(i) 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 and containing such or any similar Hazardous
Substance; (j) any acts of Borrower or other users of the Property, in
accepting any Hazardous Substance 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 the incurrence of costs for Remediation; (k) any
personal injury, wrongful death, or property damage arising under any statutory
or common law or tort law theory, including but not limited to 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 (in each case, to the
extent arising out of the presence of Hazardous Substances); and (l) any
misrepresentation or inaccuracy in any representation or warranty or material
breach or failure to perform any covenants or other obligations pursuant to
Article 8.  This indemnity shall
survive any termination, satisfaction or foreclosure of this Security
Instrument, subject to the provisions of Section 10.5.  Notwithstanding the foregoing, Borrower shall
have no liability for any Losses imposed upon or incurred by or asserted
against any Indemnified Parties and described in this Section 9.4 to the
extent that such Losses arose solely by actions, conditions or events relating
to the Hazardous Substances placed in, on, above or under the Property after
the date that Lender or any Affiliate or nominee of Lender (or any purchaser at
a foreclosure sale) actually acquired title to the Property and were not caused
by the direct or indirect actions of Borrower or any officer or director of
Borrower or any employee, agent, contractor or Affiliate of Borrower.

Section 9.5            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, if the defendants in any such claim or proceeding include both
Borrower and any Indemnified Party and Borrower and such Indemnified Party
shall have reasonably concluded that there are any legal defenses available to
it and/or other Indemnified Parties that are different from or additional to
those available to Borrower, such Indemnified Party shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party,
provided that no compromise or settlement shall be entered without Borrower’s
consent, which consent shall not be unreasonably withheld.  Upon demand, Borrower shall pay or, in the
sole and absolute discretion of the Indemnified Parties, reimburse, the
Indemnified Parties for the payment of reasonable fees and disbursements of
attorneys, engineers, environmental consultants, laboratories and other
professionals in connection therewith.

ARTICLE X - -
WAIVERS

Section 10.1         Waiver of
Counterclaim.  To the extent permitted by applicable law,
Borrower hereby waives the right to assert a counterclaim, other than a
mandatory or compulsory

 24
 

 

 

counterclaim, in any action
or proceeding brought against it by Lender arising out of or in any way
connected with this Security Instrument, the Loan Agreement, the Note, any of
the other Loan Documents, or the Obligations.

Section 10.2         Marshalling
and Other Matters.  To the extent permitted by applicable law,
Borrower hereby waives the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Property or any
part thereof or any interest therein. 
Further, Borrower hereby expressly waives 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.

Section 10.3         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 or any
other Loan Document 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 10.4         Waiver of
Statute of Limitations.  To the extent permitted by
applicable law, 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.

Section 10.5         Survival.  The
indemnifications made pursuant to Sections 9.3 and 9.4 herein and the
representations and warranties, covenants, and other obligations arising under
Article 8, shall continue indefinitely in full force and effect and shall
survive and shall in no way be impaired by any of the following:  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, but not
limited to, foreclosure or acceptance of a deed in lieu of foreclosure, any
exercise of any rights and remedies pursuant to the Loan Agreement, the Note or
any of the other Loan Documents, 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 Loan Agreement, the Note or the 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.

ARTICLE XI - -
EXCULPATION

The provisions of Section 9.4 of the Loan
Agreement are hereby incorporated by reference into this Security Instrument to
the same extent and with the same force as if fully set forth herein.

 25

 

ARTICLE XII -  - NOTICES

All notices or other written
communications hereunder shall be delivered in accordance with
Section 10.6 of the Loan Agreement.

Notices to Lender hereunder and under any
of the other Loan Documents shall include a copy thereof to Lender (to be
addressed and delivered in accordance with Section 10.6 of the Loan Agreement)
and shall be sent as follows:

	
  

  	
  Lender:

  	
   

  	
  MERS Commercial

  
	
   

  	
   

  	
   

  	
  P.O. Box 2300

  
	
   

  	
   

  	
   

  	
  Flint, Michigan 48501-2300

  

 

ARTICLE XIII -  - APPLICABLE LAW

Section 13.1         Governing
Law.  This Security Instrument
shall be governed in accordance with the terms and provisions of
Section 10.3 of the Loan Agreement.

Section 13.2         Usury
Laws.  Notwithstanding anything
to the contrary, (a) all agreements and communications between Borrower
and Lender are hereby and shall automatically be limited so that, after taking
into account all amounts deemed interest, the interest contracted for, charged
or received by Lender shall never exceed the Maximum Legal Rate or amount, (b) in
calculating whether any interest exceeds the Maximum Legal Rate, all such
interest shall be amortized, prorated, allocated and spread over the full
amount and term of all principal indebtedness of Borrower to Lender, and
(c) if through any contingency or event, Lender receives or is deemed to
receive interest in excess of the Maximum Legal Rate, any such excess shall be
deemed to have been applied toward payment of the principal of any and all then
outstanding indebtedness of Borrower to Lender, or if there is no such
indebtedness, shall immediately be returned to Borrower.

Section 13.3         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.  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 shall not be affected thereby.

ARTICLE XIV -  - DEFINITIONS

All capitalized terms not defined herein
shall have the respective meanings set forth in the Loan Agreement.  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 “each Borrower and any subsequent owner or
owners of a fee interest in the Property or any part thereof,” the word
“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 

 26
 

 

 

Instrument,”
the word “Property” shall include any portion of the Property and any interest
therein, and the phrases “attorneys’ fees”, “legal fees” and “counsel fees”
shall include any and all reasonable attorneys’, paralegal and law clerk fees
and disbursements, including, but not limited to, fees and disbursements at the
pre-trial, trial and appellate levels actually incurred or paid by Lender in
protecting its interest in the Property, the Leases and the Rents and enforcing
its rights hereunder.

ARTICLE XV -  - MISCELLANEOUS
PROVISIONS

Section 15.1         No
Oral Change. 
This Security Instrument, and any provisions hereof, 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.

Section 15.2         Successors
and Assigns. 
This Security Instrument shall be binding upon and inure to the benefit
of Borrower and Lender and their respective successors and assigns forever.

Section 15.3         Inapplicable
Provisions. 
If any term, covenant or condition of the Loan Agreement, the Note or
this Security Instrument is held to be invalid, illegal or unenforceable in any
respect, the Loan Agreement, the Note and this Security Instrument shall be
construed without such provision.

Section 15.4         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 15.5         Number
and Gender. 
Whenever the context may require, any pronouns used herein shall include
the corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.

Section 15.6         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 Loan Agreement,
the Note and the other Loan Documents and the performance and discharge of the
Other Obligations.

Section 15.7         Entire
Agreement.  The Note, the Loan
Agreement, this Security Instrument and the other Loan Documents 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 

 27
 

 

 

writing in the Note, the Loan Agreement, this Security Instrument
and the other Loan Documents, 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, the Loan Agreement, this Security
Instrument and the other Loan Documents.

Section 15.8         Limitation
on Lender’s Responsibility. 
No provision of this Security Instrument shall operate to place any
obligation or liability for the control, care, management or repair of the
Property upon Lender, nor shall it operate to make Lender responsible or liable
for any waste committed on the Property by the tenants or any other Person, or
for any dangerous or defective condition of the Property, or for any negligence
in the management, upkeep, repair or control of the Property resulting in loss
or injury or death to any tenant, licensee, employee or stranger.  Nothing herein contained shall be construed
as constituting Lender a “mortgagee in possession.”

ARTICLE XVI - DEED OF TRUST
PROVISIONS 

Section 16.1         CONCERNING THE TRUSTEE.  Trustee shall be under no duty
to take any action hereunder except as expressly required hereunder or by law,
or to perform any act which would involve Trustee in any expense or liability
or to institute or defend any suit in respect hereof, unless properly
indemnified to Trustee’s reasonable satisfaction.  Trustee, by acceptance of this Security
Instrument, covenants to perform and fulfill the trusts herein created, being
liable, however, only for gross negligence or willful misconduct, 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.  Trustee may resign at any time
upon giving thirty (30) days’ notice to Borrower and to Lender.  Lender may remove 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 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, 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 Section 16.1 for substitution of Trustee shall be in addition
to and not in exclusion of any other provisions for substitution, by law or
otherwise.

Section 16.2         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 16.3         CERTAIN
RIGHTS.  With the approval of Lender,
Trustee shall have the right to take any and all of the following actions:  (i) 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 the other Loan Documents, and shall be
fully protected in relying as to legal matters on the 

 28
 

 

 

advice of
counsel, (ii) to execute any of the trusts and powers hereof and to perform any
duty hereunder either directly or through his/her agents or attorneys, (iii) 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 Trustee shall not be answerable for any act, default,
negligence, or misconduct of any such accountant, engineer or other expert,
agent or attorney-in-fact, if selected with reasonable care, or for any error
of judgment or act done by Trustee in good faith, or be otherwise responsible
or accountable under any circumstances whatsoever, except for Trustee’s gross
negligence or willful misconduct, and (iv) 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.  Trustee
shall be entitled to reimbursement for actual expenses incurred by Trustee in
the performance of Trustee’s duties hereunder and to reasonable compensation
for such of Trustee’s services hereunder as shall be rendered.

Section 16.4         RETENTION
OF MONEY.  All moneys received by Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated in any manner
from any other moneys (except to the extent required by Applicable Law) and
Trustee shall be under no liability for interest on any moneys received by
Trustee hereunder.

Section 16.5         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.

Section 16.6         SUCCESSION
INSTRUMENTS.  Any substitute trustee appointed
pursuant to any of the provisions hereof shall, without any further act, deed,
or conveyance, become vested with all the estates, properties, rights, powers,
and trusts of its or his/her predecessor in the rights hereunder with like
effect as if originally named as Trustee herein; but nevertheless, upon the
written request of Lender or of the substitute trustee, the Trustee ceasing to
act shall execute and deliver any instrument transferring to such substitute
trustee, upon the trusts herein expressed, all the estates, properties, rights,
powers, and trusts of the Trustee so ceasing to act, and shall duly assign,
transfer and deliver any of the property and moneys held by such Trustee to the
substitute trustee so appointed in the Trustee’s place.

ARTICLE XVII - LOCAL LAW
PROVISIONS 

Section 17.1         Inconsistencies.  In the event of any inconsistencies between
the terms and conditions of this Article 17
and the other provisions
of this Security Instrument, the terms and conditions of this Article 17 shall control and be
binding. 

 29
 

 

 

Section 17.2         Supplemental
District of Columbia Remedies.  Upon the occurrence of any Event of Default,
Borrower agrees that Lender,
and when requested to do so by Lender, Trustee, may take such action, without
notice or demand except as otherwise required by law, as Lender deems advisable
to protect and enforce the rights of Lender and Trustee against Borrower and in and to the Property,
including, but not limited to the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such order as Lender may
determine, in its sole discretion, without impairing or otherwise affecting the
other rights and remedies of Lender or Trustee: 

(a)           Assent to the entry of a decree for
interest in the Property by any court of equity having jurisdiction over the
sale of the Property.

(b)           Upon the occurrence of an Event of
Default and the election of Lender to affect a trustee’s sale of the Property
under power of sale in lieu of a judicial foreclosure, then Lender may instruct
Trustee to commence such sale and consummate such sale in the following manner:

(i)            Foreclose pursuant to the power of
sale granted herein in any manner allowed by applicable law, including without
limitation Sections 42-815 and 42-818 of D.C. Code Ann. (2001) as amended, or
in accordance with customs and practices for foreclosure sales in the District
of Columbia; or sell or offer for to sell, at any time or different times, at
one place or at different places, the Property in such portions, order and
parcels, and on such terms and conditions, cash or credit, as Lender may
determine, with or without having first taken possession of same, to the
highest bidder for cash at public auction, with any postponement or
rescheduling of any such sale as Trustee may deem appropriate.  Such sale shall be made in any manner allowed
or permitted by any applicable law, including without limitation Sections
42-815 and 42-818 of D.C. Code Ann. (2001) as amended, or by custom or practice
in the District of Columbia or by Chapter 9 of the UCC relating to the sale of
collateral after default by a debtor (as such laws now exist or may be hereafter
amended or succeeded), or by any other present or subsequent articles or
enactments relating to same.  With
respect to any notices required or permitted under the UCC, Borrower agrees
that five (5) days' prior written notice shall be deemed commercially
reasonable.  At any such sale, whether
made under the power herein contained, the UCC, any other legal requirement or
by virtue of any judicial proceedings or any other legal right, remedy or
recourse, it shall not be necessary for Trustee to be physically present at or
to have constructive possession of the Property (Borrower shall deliver to
Trustee any portion of the Property not actually or constructively possessed by
Trustee immediately upon demand by Trustee), and the title to and right of
possession of any such property shall pass to the purchaser thereof as
completely as if Trustee had been actually present and delivered to purchaser
at such sale, each instrument of conveyance executed by Trustee shall contain a
general warranty of title, binding upon Borrower, each recital contained in any
instrument of conveyance made by Trustee shall conclusively establish the truth
and accuracy of the matters recited therein, including, without limitation,
nonpayment of the Debt, advertisement and conduct of such sale in the manner
provided herein 

 30
 

 

 

and otherwise by law, and appointment of any successor Trustee
hereunder, any prerequisites to the validity of such sale shall be conclusively
presumed to have been performed, the receipt of Trustee or other party making
the sale shall be a sufficient discharge to the purchaser or purchasers for his
or their purchase money and no such purchaser or purchasers, or his or their
assigns or personal representatives, shall thereafter be obligated to see to
the application of such purchase money or be in any way answerable for any
loss, misapplication or nonapplication thereof, and  to the fullest extent permitted by law,
Borrower shall be completely and irrevocably divested of all of its right,
title, interest, claim, equity, equity of redemption, and demand whatsoever,
either at law or in equity, in and to the property sold and such sale shall be
a perpetual bar both at law and in equity against Borrower, and against all
other persons claiming or to claim the property sold or any part thereof, by,
through or under Borrower.  Lender may be
a bidder at such sale or a purchaser at such sale and if Lender is the highest
bidder, and Lender may credit the portion of the purchase price that would be
distributed to Lender against the Indebtedness in lieu of paying cash. 

(ii)           Trustee may sell the Property at
public auction for cash, after first giving such notice and advertising such
sale in such manner as provided below or, to the extent not provided below, as
may be otherwise allowed by law, and, upon compliance with the then law
relating to foreclosure proceedings under power of sale, convey title to the
purchaser as hereinafter set forth; and Trustee shall deliver to the purchaser
at the settlement of such Trustee’s sale its deed, with special warranty, which
shall convey to the purchaser the interest in the Property which Borrower has
or has the power to convey at the time of execution of this Security
Instrument, and such as it may have acquired thereafter.  

(iii)          Trustee may sell all or any portion of
the Property, real, personal and mixed, together or in lots or parcels.  The sale or sales by Trustee of less than the
whole of the 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 or sales of less than the whole of the Property shall be less than
the aggregate of the Debt, including any expenses relating thereto, this
Security Instrument and the lien, security interest, and assignment hereof
shall remain in full force and effect as to the unsold portion of the Property
just as though no sale or sales had been made; provided, however, that Borrower
shall never have any right to require the sale or sales 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.  If an Event of Default occurs hereunder,
Lender also shall have the option to proceed with foreclosure either through
judicial proceedings or by directing Trustee to proceed under the power of sale
granted herein, conducting, to the extent permitted by applicable law, the sale
as herein provided without declaring the entire Debt due, and if sale is made
because of an Event of Default caused by failure to pay an installment, or a
part of an installment, such sale may, to the extent permitted by applicable
law, be made subject to the unmatured part of the Debt.  Such sale, if so made, shall not in any
manner affect the unmatured 

 31
 

 

 

part of the Debt, but as to such unmatured part this Security
Instrument shall remain in full force and effect as though no sale had been
made under the provisions of this subsection. 
Several sales may be made hereunder without exhausting the right of sale
for any unmatured part of any Debt.

(c)           At any foreclosure sale hereunder,
(A) Borrower hereby agrees, in Borrower’s behalf and in behalf of Borrower’s
successors and assigns, that any and all recitals made in any deed of
conveyance given by Trustee with respect to the identity of Lender, the
occurrence or existence of any default or Event of Default, the acceleration of
the maturity of any of the Debt, the request to sell, the notice of sale, the
giving of notice to all parties legally entitled thereto, the time, place,
terms, and manner of sale, and receipt, distribution, and application of the
money realized therefrom, or the due and proper appointment of a substitute
Trustee, and, without being limited by the foregoing, any other act or thing
having been duly done by Lender or by Trustee hereunder, shall be taken by all
courts of law and equity as prima facie evidence that the statements or
recitals state facts and are without further question to be so accepted, and
(B) the purchaser may disaffirm any easement granted, or rental, lease, or
other contract made in violation of any provision of this Security Instrument
or the Loan Documents, and may take immediate possession of the Property free
from, and despite the terms of, such grant of easement and rental, lease or
other contract.

(d)           Borrower hereby ratifies and confirms
any and all acts which Trustee, or his successor or substitute in this trust,
shall do lawfully by virtue hereof.

Section 17.3         Trustee’s
Commission. 
Immediately upon the first insertion of any advertisement or notice of
any such sale, even if the Debt thereafter is paid, there shall become due and
owing by Borrower all reasonable expenses incident to such advertisement or notice, all other costs and all
expenses (including without limitation Lender’s and Trustee’s reasonable
attorney’s fees) incident to any foreclosure proceedings brought under this
Security Instrument or otherwise in connection with such sale, and a Trustee’s
commission on the then outstanding principal balance of the Note not in excess
of one percent (1%) of the then outstanding principal balance of the Note.  No party shall be required to receive only
the aggregate Debt then
secured hereby with interest thereon to the date of payment unless it is
accompanied by a tender of payment of such expenses, costs and commissions. 

Section 17.4         Supplemental
District of Columbia Remedies Cumulative and Concurrent. 

(a)           The District of Columbia supplemental
remedies and rights granted to Lender and Trustee under this Article 17 to this Security
Instrument are intended to be and are cumulative and concurrent with the
remedies and rights set forth in the body of the Deed of Trust and are not in
lieu of, but are in addition to, and shall not be affected by any exercise of,
any other remedy or right available to Lender or Trustee whether now or
hereafter existing either at law, or in equity, or under this Security
Instrument or any other Loan Document.

(b)           No recovery of any judgment by Lender
and no levy of an execution under any judgment upon the Property or upon any
other property of Borrower shall affect in any manner or to any extent the lien
of this Security Instrument upon the Property or any part thereof, 

 32
 

 

 

or any liens, rights, powers or remedies of Lender hereunder, but
such liens, rights, powers and remedies of Lender shall continue unimpaired as
before.

Section 17.5         Fixtures;
Personal Property. 
Notwithstanding the filing of a financing statement covering any of the
Property or any of the Collateral in the records normally pertaining to
personal property, all of the Property, for all purposes and in all
proceedings, legal or equitable,
shall be regarded, at Lender’s option (to the extent permitted by law), as part
of the Property whether or not any such item is physically attached to the
Property or serial numbers are used for the better identification of certain
items.  The mention in any such financing
statement of any of the Property shall never be construed in any way as
derogating from or impairing this declaration.  Such mention in the financing statement is
hereby declared to be for the protection of Lender in the event any court shall
at any time hold that notice of the priority of this Security Instrument, to be
effective against any third party,
including the Federal government or any authority or agency thereof, must be
filed in the Uniform Commercial Code records. 
Pursuant to the provisions of the Uniform Commercial Code, Borrower
hereby authorizes Trustee and Lender, without the signature of Borrower, to
execute and file financing and continuation statements if Lender shall
determine, in its sole and absolute discretion, that such financing or
continuation statements are necessary or advisable in order to preserve or
perfect its security interest in the fixtures encumbered by this Security
Instrument, and Borrower shall pay to Lender, on demand, any expenses incurred
by Trustee and Lender in connection with the preparation, execution and filing
of such statements that may be filed by Trustee or Lender. 

Section 17.6         Discontinuance
of Proceedings. 
If Lender shall have proceeded to invoke any right, remedy or recourse
permitted under the Loan Documents and shall thereafter elect to discontinue or
abandon it for any reason, Lender shall have the unqualified
right to do so and, in such an event,
Borrower and Lender shall be restored to their former positions with respect to
the Indebtedness, the Obligations, the Loan Documents, the Property and otherwise, and the rights, remedies, recourses and powers
of Lender shall continue as if the right, remedy or recourse had never been
invoked, but no such discontinuance or abandonment shall waive any Event of
Default which may then exist or the right of Lender thereafter to exercise any
right, remedy or recourse under the Loan Documents for such Event of Default. 

Section 17.7         Application
of Proceeds. 
The proceeds of any sale of, and the rents and other amounts generated
by the holding, leasing, management, operation or other use of the
Property, shall be applied by Lender or Trustee (or the receiver, if one is
appointed) in the following order unless otherwise required by applicable law: 

(a)           to the payment of the costs and
expenses of taking possession of the Property and of holding, using, leasing,
repairing, improving and selling the same, including, without limitation  trustee's and receiver's fees and expenses,
court costs,  attorneys' and accountants' fees and expenses, costs of
advertisement, and  the payment of all
ground rent, real estate taxes and assessments, except any taxes, assessments,
or other charges subject to which the Property shall have been sold;

(b)           to the payment of all amounts
(including interest), other than the unpaid principal balance of the Note and
accrued but unpaid interest, which may be due to Lender under the Loan
Documents;

 33
 

 

 

(c)           to the payment of the Indebtedness
and performance of the Obligations in such manner and order of preference as
Lender in its sole discretion may determine; and

(d)           the balance, if any, to the payment
of the persons legally entitled thereto.

Section 17.8         Occupancy
After Foreclosure. 
The purchaser at any foreclosure sale shall pursuant to the terms hereof
become the legal owner of the Property. 
All occupants of the Property shall, at the option of such purchaser, become
tenants of the purchaser at the foreclosure sale and shall deliver possession
thereof immediately to the purchaser upon demand.  It shall not be necessary for the purchaser
at said sale to bring any action for possession of the Property other than
the statutory action of forcible detainer in any justice court having
jurisdiction over the Property. 

Section 17.9         Additional
Advances and Disbursements; Costs of Enforcement.  If any Event of Default exists, Lender shall
have the right, but not the obligation, to cure such Event of Default in the
name and on behalf of Borrower.  All sums
advanced and expenses incurred at any time by Lender under this Section, or
otherwise under this Security Instrument or any of the other Loan Documents or applicable law, shall bear interest
from the date that such sum is advanced or expense incurred, to and including
the date of reimbursement, computed at the Default Rate (as defined in the Loan
Agreement), and all such sums, together with interest thereon, shall be secured
by this Security Instrument. 

Section 17.10       No
Mortgagee in Possession. 
Neither the enforcement of any of the remedies under this Security
Instrument nor any other remedies afforded to Lender under the Loan Documents,
at law or in equity shall cause
Lender or Trustee to be deemed or construed to be a mortgagee in possession
of the Property, to obligate Lender or Trustee to lease the Property or attempt
to do so, or to take any action, incur any expense, or perform or discharge any obligation, duty or liability
whatsoever under any of the Leases or otherwise. 

[NO FURTHER TEXT ON THIS PAGE]

 34

 

IN WITNESS WHEREOF, Behringer
Harvard 1325 G Street, LLC, has caused these presents to be executed by Gerald
J. Reihsen, III and Gary S. Bresky, the Secretary and Chief Financial Officer,
and does hereby constitute                            
and                        
as its true and lawful attorneys-in-fact to acknowledge these presents as the
act and deed of Behringer Harvard 1325 G Street, LLC, effective as of the date
first hereinabove written.

 

 

	
  In the presence of:

  	
  BEHRINGER HARVARD 1325 G STREET,

  
	
   

  	
  LLC, a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
    [SEAL]

  
	
   

  	
   

  	
  Name: Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
    [SEAL]

  
	
   

  	
   

  	
  Name: Gary S. Bresky

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
							

 

 

 

ACKNOWLEDGMENTS

	
  STATE OF

  	
  )

  
	
   

  	
  ss:

  
	
  COUNTY OF

  	
  )

  

 

I,                         ,
a notary public in and for                                        ,
do hereby certify that Gerald J. Reihsen, III and Gary S. Bresky, of Behringer
Harvard 1325 G Street, LLC, a Delaware limited liability company, are named as
attorneys-in-fact for such company, the trustor in the foregoing and attached
Security Instrument bearing the date of                           ,
2006, personally appeared before me in                                                
and, being personally well known to me as the persons named as
attorneys-in-fact in said Security Instrument, acknowledged that the foregoing
instrument is the act and deed of such company, and that they delivered the
same as managers of such company.

Given under my hand and seal this             
day of                        ,
2006.

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  
	
   

  	
  (Notarial Seal)

  

 2
 

 

 

SIGNATURE PAGE TO AMENDED AND
RESTATED DEED OF TRUST AND SECURITY AGREEMENT

 

	
   

  	
  LENDER:

  
	
   

  	
  BEAR STEARNS COMMERCIAL

  MORTGAGE, INC., a New York corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title: 

  	
  Managing Director

  

 

 3
 

 

ACKNOWLEDGEMENTS

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  :   SS.:

  
	
  COUNTY OF NEW YORK

  	
  )

  

 

 

On the              
day of October, 2006, before me, the undersigned, a Notary Public in and for
said State, personally appeared                                                                                              ,
known to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is/are subscribed to the within instrument and acknowledged that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.

 

	
   

  	
   

  	
   

  
	
  

  	
  Notary Public

  

 

 4

 

EXHIBIT A

Legal
description

All that certain piece or
parcel of land, together with the improvements thereon and appurtenances
thereunto belonging, lying, situate and being in the District of Columbia,
being described as follows:

Lot Numbered Seventy-Nine
(79) in Square Numbered Two Hundred Fifty-Two (252), being a subdivision made
by 1325 G Street Associates, a Limited Partnership, as per plat thereof
recorded in Liber 151 at Folio 16 in the Office of the Surveyor for the
District of Columbia.

 EXH. A-1Exhibit 10.4

 

BEHRINGER HARVARD 1325 G STREET, LLC, as Borrower
                                                                                                        (Borrower)

to

MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS, INC., as nominee of Lender
                                                                                                        (Lender)

AMENDED AND RESTATED ASSIGNMENT
OF LEASES

AND RENTS

Dated:  As of October 18, 2006

Location: 1325 G
Street NW, Washington, DC

MERS MIN: 8000101-0000004159-9

PREPARED
BY AND UPON

RECORDATION RETURN TO:

Kelley Drye & Warren
LLP

101 Park Avenue

New York, New York 10178

Attention:  Paul A. Keenan, Esq.

 

 

AMENDED AND RESTATED ASSIGNMENT
OF LEASES AND RENTS

THIS AMENDED AND RESTATED
ASSIGNMENT OF LEASES AND RENTS (this “Assignment”)
made as of the 18th day of October, 2006, by BEHRINGER HARVARD
1325 G STREET, LLC, a Delaware limited liability company, as assignor, having
its principal place of business c/o Behringer Harvard Funds, 15601 Dallas
Parkway, Suite 600, Addison, Texas 75001 
(“Borrower”) to MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., a Delaware corporation, having an address at 1595
Spring Hill Road, Suite 310, Vienna, Virginia 22181 (“MERS”)
as nominee of BEAR STEARNS COMMERCIAL MORTGAGE, INC., a New York corporation,
as assignee, having an address at 383 Madison Avenue, New York, New York 10179
(“Lender”).

R E C I T A L S:

WHEREAS,
Borrower, by the terms of that certain Amended and Restated Loan Agreement,
dated as of the date hereof, between Borrower and Lender (as the same may
hereafter be amended, restated, replaced, supplemented, renewed, extended or
otherwise modified from time to time, the “Loan Agreement”)
and evidenced by that certain Amended and Restated Promissory Note executed on
the same date as this Assignment (the “Note”) and in
connection with the loan (the “Loan”) from
Lender to Borrower, is indebted to Lender in the principal sum of ONE HUNDRED
MILLION AND NO/100 U.S. DOLLARS ($100,000,000.00).

WHEREAS,
Borrower desires to secure the payment of the Debt (as defined in the Loan
Agreement) and the performance of all of its obligations under the Note, the
Loan Agreement and the other Loan Documents.

WHEREAS,
Lender has required, as a condition to making the Loan to Borrower, that
Borrower execute and deliver this Assignment, which amends and restates the
Original Assignment (as hereinafter defined) in its entirety, and Borrower, in
order to obtain the Loan, is willing to execute and deliver this Assignment.

WHEREAS,
this Assignment is an amendment and restatement of that certain Assignment of
Leases and Rents from Behringer Harvard 1325 G Street, LLC, as Assignor, to
Behringer Harvard Operating Partnership I LP, as Assignee, dated November 15,
2005 and recorded on November 17, 2005 among the Land Records of the District
of Columbia (as Instrument No.: 
2005166120 (the “Original Assignment”),
and is intended to amend and restate the Original Assignment in its entirety
(and if there is a conflict between the terms of the Original Assignment and
this Assignment, the terms of this Assignment shall prevail) and Lender is the
current holder of the Note secured by the Original Assignment.  This Assignment is given to secure payment of
the Debt and the performance of all of Borrower’s obligations under the Note,
the Loan Agreement and the other Loan Documents and to reaffirm and clarify the
rights and obligations of the parties under the Loan Documents.  This Assignment (i) shall in no way waive Lender’s
rights, powers or remedies under the Loan Documents, (ii) shall in no way
limit, impair or prejudice Lender from exercising any past, present or future
right, power or remedy from and after the date hereof under the Loan Documents,
and (iii) shall not constitute or be deemed to be a novation of the Debt.

 

 

NOW,
THEREFORE, in consideration of the agreements hereinafter set forth and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower and Lender hereby agree as follows:

ARTICLE 1 - ASSIGNMENT

Section 1.1             Property
Assigned.  Borrower hereby absolutely
and unconditionally assigns and grants to MERS, as nominee of Lender, the
following property, rights, interests and estates, now owned, or hereafter
acquired by Borrower:

(a)           Leases.  All leases, subleases or subsubleases,
lettings, licenses, concessions or other agreements made a part thereof
(whether written or oral and whether now or hereafter in effect), pursuant to
which any Person is granted a possessory interest in, or a right to use or
occupy, all or any portion of any space in that certain lot or piece of land,
more particularly described in Exhibit A annexed hereto and made a
part hereof, together with the buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter located thereon (collectively, the “Property”)
and every modification, amendment or other agreement relating to such leases,
subleases, subsubleases, or other agreements entered into in connection with
such leases, subleases, subsubleases, or other agreements and every guarantee
of the performance and observance of the covenants, conditions and agreements
to be performed and observed by the other party thereto, and the right, title
and interest of Borrower, its successors and assigns, therein and thereunder.

(b)           Other Leases and
Agreements.  All other leases and
other agreements, whether or not in writing, providing for the use, enjoyment
or occupancy of the Property or any portion thereof now or hereafter made,
whether made before or after the filing by or against Borrower of any petition
for relief under the Bankruptcy Code together with any extension, renewal or
replacement of the same.  This Assignment
of other present and future leases and present and future agreements being
effective without further or supplemental assignment.  The “leases” described in
Subsection 1.1(a) and the leases and other agreements described in this
Subsection 1.1(b) are collectively referred to as the “Leases.”

(c)           Rents.  All rents, rent equivalents, income,
receivables, revenues, receipts, insurance proceeds, deposits and profits
arising from the Leases and renewals thereof together with all rents, rent
equivalents, income, fees, receivables, accounts, profits (including, but not
limited to, all oil and gas or other mineral royalties and bonuses), charges
for services rendered and any and all payment and consideration of whatever
form or nature received by Borrower or its agents or employees from any and all
sources relating to the use, enjoyment and occupancy of the Property 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”).

(d)           Bankruptcy Claims.  All of Borrower’s claims and rights (the “Bankruptcy Claims”) to the payment of damages arising from
any rejection by a lessee of any Lease under the Bankruptcy Code.

(e)           Lease Guaranties.  All of Borrower’s right, title and interest
in and claims under any and all lease guaranties, letters of credit and any
other credit support (individually, a

 

 

 “Lease Guaranty,”
collectively, the “Lease Guaranties”)
given by any guarantor in connection with any of the Leases or leasing commissions
(individually, a “Lease Guarantor,”
collectively, the “Lease Guarantors”)
to Borrower.

(f)            Proceeds.  All proceeds from the sale or other
disposition of the Leases, the Rents, the Lease Guaranties and the Bankruptcy
Claims.

(g)           Other.  All rights, powers, privileges, options and
other benefits of Borrower as lessor under the Leases and beneficiary under the
Lease Guaranties, including without limitation the immediate and continuing
right to make claim for, receive and collect all Rents payable or receivable
under the Leases and all sums payable under the Lease Guaranties or pursuant
thereto (and to apply the same to the payment of the Debt or the Other
Obligations), and to do all other things which Borrower or any lessor is or may
become entitled to do under the Leases or the Lease Guaranties.

(h)           Entry.  The right, at Lender’s option, upon
revocation of the license granted herein, to enter upon the Property in person,
by agent or by court-appointed receiver, to collect the Rents.

(i)            Power of
Attorney.  Borrower’s irrevocable
power of attorney, coupled with an interest, to take any and all of the actions
set forth in Section 3.1 of this Assignment and any or all other actions
designated by Lender for the proper management and preservation of the Property.

(j)            Other Rights and
Agreements.  Any and all other rights
of Borrower in and to the items set forth in subsections (a) through (i)
above, and all amendments, modifications, replacements, renewals and
substitutions thereof.

ARTICLE 2 - TERMS OF ASSIGNMENT

Section 2.1             Present
Assignment And License Back.  It is
intended by Borrower that this Assignment constitute a present, absolute
assignment of the Leases, Rents, Lease Guaranties and Bankruptcy Claims, and
not an assignment for additional security only. 
Nevertheless, subject to the terms of this Section 2.1 and the Cash
Management Agreement, Lender grants to Borrower a revocable license to collect,
receive, use and enjoy the Rents and other sums due under the Lease Guaranties
and Borrower shall hold such Rents and all sums received pursuant to any Lease
Guaranty, or a portion thereof sufficient to discharge all current sums due on
the Debt, in trust for the benefit of Lender for use in the payment of such
sums.

Section 2.2             Notice
To Lessees.  Borrower hereby
authorizes and directs the lessees named in the Leases or any other future
lessees or occupants of the Property and all Lease Guarantors to pay over to
Lender or to such other party as Lender directs all Rents and all sums due
under any Lease Guaranties upon receipt from Lender of written notice to the
effect that Lender is then the holder of this Assignment and that an Event of
Default (as defined in the Loan Agreement) exists, and to continue so to do
until otherwise notified by Lender.

Section 2.3             Incorporation
By Reference.  All representations,
warranties, covenants, conditions and agreements contained in the Loan
Agreement and the other Loan

 

 

Documents as same
may be modified, renewed, substituted or extended are hereby made a part of
this Assignment to the same extent and with the same force as if fully set
forth herein.

Section 2.4             Grants to MERS.  This Assignment and the grants, assignments
and transfers made to MERS in this Assignment shall inure to MERS solely in its
capacity as Lender’s nominee.

ARTICLE 3 - REMEDIES

Section 3.1             Remedies
of Lender.  Upon or at any time after
the occurrence of an Event of Default, the license granted to Borrower in
Section 2.1 of this Assignment shall automatically be revoked, and Lender shall
immediately be entitled to possession of all Rents and sums due under any Lease
Guaranties, whether or not Lender enters upon or takes control of the
Property.  In addition, Lender may, at
its option, without waiving such Event of Default, without regard to the
adequacy of the security for the Debt, either in person or by agent, nominee or
attorney, with or without bringing any action or proceeding, or by a receiver
appointed by a court, dispossess Borrower and its agents and servants from the
Property, without liability for trespass, damages or otherwise and exclude
Borrower and its agents or servants wholly therefrom, and take possession of
the Property and all books, records and accounts relating thereto and have,
hold, manage, lease and operate the Property on such terms and for such period
of time as Lender may deem proper and either with or without taking possession
of the Property in its own name, demand, sue for or otherwise collect and
receive all Rents and sums due under all Lease Guaranties, including those past
due and unpaid with full power to make from time to time all alterations,
renovations, repairs or replacements thereto or thereof as Lender may deem
proper and may apply the Rents and sums received pursuant to any Lease
Guaranties to the payment of the following in such order and proportion as
Lender in its sole discretion may determine, any law, custom or use to the
contrary notwithstanding:  (a) all
expenses of managing and securing the Property, including, without being
limited thereto, the salaries, fees and wages of a managing agent and such
other employees or agents as Lender may deem necessary or desirable and all
expenses of operating and maintaining the Property, including, without being
limited thereto, all taxes, charges, claims, assessments, water charges, sewer
rents and any other liens, and premiums for all insurance which Lender may deem
necessary or desirable, and the cost of all alterations, renovations, repairs
or replacements, and all expenses incident to taking and retaining possession
of the Property; and (b) the Debt, together with all costs and reasonable
attorneys’ fees.  In addition, upon the
occurrence of an Event of Default, Lender, at its option, may (1) complete
any construction on the Property in such manner and form as Lender deems
advisable, (2) exercise all rights and powers of Borrower, including,
without limitation, the right to negotiate, execute, cancel, enforce or modify
any Leases, obtain and evict tenants, and demand, sue for, collect and receive
all Rents from the Property and all sums due under any Lease Guaranties,
(3) 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 occupancy of such part of the Property as may be in possession of
Borrower or (4) require Borrower to vacate and surrender possession of the
Property to Lender or to such receiver and, in default thereof, Borrower may be
evicted by summary proceedings or otherwise.

Section 3.2             Other
Remedies.  Nothing contained in this
Assignment and no act done or omitted by Lender pursuant to the power and
rights granted to Lender hereunder shall be

 

 

deemed to be a
waiver by Lender of its rights and remedies under the Loan Agreement, the Note,
or the other Loan Documents and this Assignment is made and accepted without
prejudice to any of the rights and remedies possessed by Lender under the terms
thereof.  The right of Lender to collect
the Debt and to enforce any other security therefor held by it may be exercised
by Lender either prior to, simultaneously with, or subsequent to any action
taken by it hereunder.  Borrower hereby
absolutely, unconditionally and irrevocably waives any and all rights to assert
any setoff, counterclaim or crossclaim of any nature whatsoever with respect to
the obligations of Borrower under this Assignment, the Loan Agreement, the
Note, the other Loan Documents or otherwise with respect to the Loan in any
action or proceeding brought by Lender to collect same, or any portion thereof,
or to enforce and realize upon the lien and security interest created by this
Assignment, the Loan Agreement, the Note, or any of the other Loan Documents
(provided, however, that the foregoing shall not be deemed a waiver of Borrower’s
right to assert any compulsory counterclaim if such counterclaim is compelled
under local law or rule of procedure, nor shall the foregoing be deemed a
waiver of Borrower’s right to assert any claim which would constitute a
defense, setoff, counterclaim or crossclaim of any nature whatsoever against
Lender in any separate action or proceeding).

Section 3.3             Other
Security.  Lender may take or release
other security for the payment of the Debt, may release any party primarily or
secondarily liable therefor and may apply any other security held by it to the
reduction or satisfaction of the Debt without prejudice to any of its rights
under this Assignment.

Section 3.4             Non-Waiver.  The exercise by Lender of the option granted
it in Section 3.1 of this Assignment and the collection of the Rents and sums
due under the Lease Guaranties and the application thereof as herein provided
shall not be considered a waiver of any default by Borrower under the Note, the
Loan Agreement, the Leases, this Assignment or the other Loan Documents.  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 Assignment.  Borrower shall not
be relieved of Borrower’s obligations hereunder by reason of (a) the
failure of Lender to comply with any request of Borrower or any other party to
take any action to enforce any of the provisions hereof or of the Loan
Agreement, the Note or the other Loan Documents, (b) the release
regardless of consideration, of the whole or any part of the Property, or (c) any
agreement or stipulation by Lender extending the time of payment or otherwise
modifying or supplementing the terms of this Assignment, the Loan Agreement,
the Note, or the other Loan Documents. 
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 any action to
recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Lender thereafter to enforce its rights under
this Assignment.  The rights of Lender
under this Assignment 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.

Section 3.5             Bankruptcy.  (a) 
Upon or at any time after the occurrence of an Event of Default, Lender
shall have the right to proceed in its own name or in the name of Borrower in
respect of any claim, suit, action or proceeding relating to the rejection of
any Lease, including, without limitation, the right to file and prosecute, to
the exclusion of Borrower,

 

 

any proofs of
claim, complaints, motions, applications, notices and other documents, in any
case in respect of the lessee under such Lease under the Bankruptcy Code.

(b)           If there shall be
filed by or against Borrower a petition under the Bankruptcy Code, and
Borrower, as lessor under any Lease, shall determine to reject such Lease pursuant
to Section 365(a) of the Bankruptcy Code, then Borrower shall give Lender
not less than ten (10) days’ prior notice of the date on which Borrower shall
apply to the bankruptcy court for authority to reject the Lease.  Lender shall have the right, but not the
obligation, to serve upon Borrower within such ten-day period a notice
stating that (i) Lender demands that Borrower assume and assign the Lease
to Lender pursuant to Section 365 of the Bankruptcy Code and
(ii) Lender covenants to cure or provide adequate assurance of future
performance under the Lease.  If Lender
serves upon Borrower the notice described in the preceding sentence, Borrower
shall not seek to reject the Lease and shall comply with the demand provided
for in clause (i) of the preceding sentence within thirty (30) days after
the notice shall have been given, subject to the approval of the bankruptcy
court having jurisdiction over the case and to the performance by Lender of the
covenant provided for in clause (ii) of the preceding sentence.

ARTICLE 4 - NO LIABILITY, FURTHER ASSURANCES

Section 4.1             No
Liability of Lender.  This Assignment
shall not be construed to bind Lender to the performance of any of the
covenants, conditions or provisions contained in any Lease or Lease Guaranty or
otherwise impose any obligation upon Lender. 
Lender shall not be liable for any loss sustained by Borrower resulting
from Lender’s failure to let the Property after an Event of Default or from any
other act or omission of Lender in managing the Property after an Event of
Default unless such loss is caused by the willful misconduct and bad faith of
Lender.  Lender shall not be obligated to
perform or discharge any obligation, duty or liability under the Leases or any
Lease Guaranties or under or by reason of this Assignment and Borrower shall,
and hereby agrees to, indemnify Lender for, and to hold Lender harmless from,
any and all liability, loss or damage which may or might be incurred under the
Leases, any Lease Guaranties or under or by reason of this Assignment and from
any and all claims and demands whatsoever, including the defense of any such
claims or demands which may be asserted against Lender by reason of any alleged
obligations and undertakings on its part to perform or discharge any of the terms,
covenants or agreements contained in the Leases or any Lease Guaranties.  Should Lender incur any such liability, the
amount thereof, including costs, expenses and reasonable attorneys’ fees, shall
be secured by this Assignment, the Mortgage and the other Loan Documents and
Borrower shall reimburse Lender therefor immediately upon demand and upon the
failure of Borrower so to do Lender may, at its option, declare all sums
secured by this Assignment, the Mortgage and the other Loan Documents
immediately due and payable.  This
Assignment shall not operate to place any obligation or liability for the
control, care, management or repair of the Property upon Lender, nor for the
carrying out of any of the terms and conditions of the Leases or any Lease
Guaranties; nor shall it operate to make Lender responsible or liable for any
waste committed on the Property by the tenants or any other parties, or for any
dangerous or defective condition of the Property including, without limitation,
the presence of any Hazardous Substances (as defined in the Mortgage), or for
any negligence in the management, upkeep, repair or control of the Property
resulting in loss or injury or death to any tenant, licensee, employee or
stranger.

 

 

Section 4.2             No
Mortgagee in Possession.  Nothing herein contained shall be
construed as constituting Lender a “mortgagee in possession” in the absence of
the taking of actual possession of the Property by Lender.  In the exercise of the powers herein granted
Lender, no liability shall be asserted or enforced against Lender, all such
liability being expressly waived and released by Borrower.

(a)           Further
Assurances.  Borrower will, at the
cost of Borrower, and without expense to Lender, do, execute, acknowledge and
deliver all and every such further acts, conveyances, 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 assigned 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 Assignment or for filing,
registering or recording this Assignment and, on demand, will execute and
deliver and hereby authorizes Lender to execute in the name of Borrower to the
extent Lender may lawfully do so, one or more financing statements, chattel
mortgages or comparable security instruments, to evidence more effectively the
lien and security interest hereof in and upon the Leases.

ARTICLE 5 - MISCELLANEOUS PROVISIONS

Section 5.1             Conflict
of Terms.  In case of any conflict
between the terms of this Assignment and the terms of the Loan Agreement, the
terms of the Loan Agreement shall prevail.

Section 5.2             No Oral
Change.  This Assignment and any
provisions hereof 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 the enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.

Section 5.3             General
Definitions.  All capitalized terms
not defined herein shall have the respective meanings set forth in the Loan
Agreement.  Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Assignment may be used interchangeably in singular or plural
form and the word “Borrower” shall mean “each Borrower and any subsequent owner
or owners of the Property or any part thereof or interest therein,” the word “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 the Loan
Agreement”, the word “Property” shall include any portion of the Property and
any interest therein, the phrases “attorneys’ fees,” “legal fees” and “counsel
fees” shall include any and all attorney’s, paralegal and law clerk fees and
disbursements, including, but not limited to, fees and disbursements at the pre-trial,
trial and appellate levels incurred or paid by Lender in protecting its
interest in the Property, the Leases and the Rents and enforcing its rights
hereunder; whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa.

 

 

Section 5.4             Inapplicable
Provisions.  If any term, covenant or
condition of this Assignment is held to be invalid, illegal or unenforceable in
any respect, this Assignment shall be construed without such provision.

Section 5.5             Governing
Law.  This Assignment shall be
governed in accordance with the terms and provisions of Section 10.3 of
the Loan Agreement.

Section 5.6             Termination
of Assignment.  Upon payment in full
of the Debt, this Assignment shall become and be void and of no effect.

Section 5.7             Notices.  All notices or other written communications
hereunder shall be delivered in accordance with Section 10.6 of the Loan
Agreement.

Section 5.8             WAIVER OF TRIAL BY JURY.  BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT
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 THIS ASSIGNMENT, THE NOTE, OR THE OTHER LOAN DOCUMENTS OR ANY
ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN
CONNECTION THEREWITH.

Section 5.9             Exculpation.  The provisions of Section 9.4 of the
Loan Agreement are hereby incorporated by reference into this Assignment to the
same extent and with the same force as if fully set forth herein.

Section 5.10           Successors
and Assigns.  This Assignment shall
be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.

Section 5.11           Headings,
Etc.  The headings and captions of
various paragraphs of this Assignment 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.

 

 

IN WITNESS WHEREOF, Behringer Harvard 1325 G
Street, LLC, has caused these presents to be executed by Gerald J. Reihsen, III
and Gary S. Bresky, the Secretary and Chief Financial Officer, and does hereby
constitute                           
and                       
as its true and lawful attorneys-in-fact to acknowledge these presents as the
act and deed of Behringer Harvard 1325 G Street, LLC, effective as of the date
first hereinabove written.

 

	
  In the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD 1325 G STREET,

  LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
     [SEAL]

  
	
   

  	
   

  	
   

  	
  Name: Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
     [SEAL]

  
	
   

  	
   

  	
   

  	
  Name: Gary S. Bresky

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Chief Financial Officer

  	
   

  

 

 

 

ACKNOWLEDGMENTS

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  ss:

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  

 

I,                                       ,
a notary public in and for                                                       ,
do hereby certify that Gerald J. Reihsen, III and Gary S. Bresky, of Behringer
Harvard 1325 G Street, LLC, a Delaware limited liability company, are named as
attorneys-in-fact for such company, the trustor in the foregoing and attached
Security Instrument bearing the date of                            ,
2006, personally appeared before me in                                                       
and, being personally well known to me as the persons named as
attorneys-in-fact in said Security Instrument, acknowledged that the foregoing
instrument is the act and deed of such company, and that they delivered the
same as managers of such company.

Given under my hand and seal this              
day of                            ,
2006.

 

	
   

  	
   

  
	
  

  	
  Notary Public

  
	
   

  	
  My Commission
  Expires:

  
	
   

  	
  (Notarial Seal)

  

 

 

 

SIGNATURE PAGE TO AMENDED AND RESTATED ASSIGNMENT OF LEASES AND RENTS

 

	
  

  	
  LENDER:

  
	
   

  	
  BEAR
  STEARNS COMMERCIAL

  MORTGAGE, INC., a New York corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:    Managing Director

  

 

 

 

ACKNOWLEDGEMENTS

	
  STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  :      SS.:

  	
   

  
	
  COUNTY OF NEW
  YORK

  	
  )

  	
   

  

 

 

On the            
day of October, 2006, before me, the undersigned, a Notary Public in and for
said State, personally appeared                                                                            ,
known to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is/are subscribed to the within instrument and acknowledged that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.

	
  

  	
   

  
	
   

  	
   

  
	
  

  	
  Notary Public

  

 

 

 

EXHIBIT A

LEGAL DESCRIPTION

All that certain piece or
parcel of land, together with the improvements thereon and appurtenances
thereunto belonging, lying, situate and being in the District of Columbia,
being described as follows:

Lot Numbered Seventy-Nine
(79) in Square Numbered Two Hundred Fifty-Two (252), being a subdivision made
by 1325 G Street Associates, a Limited Partnership, as per plat thereof
recorded in Liber 151 at Folio 16 in the Office of the Surveyor for the
District of Columbia.

 A-1

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