Document:

Exhibit 10.3

Loan No. 502858632

 

PROMISSORY
NOTE

	
  $75,000,000.00

  	
  December     ,
  2006

  

 

FOR VALUE RECEIVED,
BEHRINGER HARVARD ELDRIDGE PLACE LP, a
Delaware limited partnership, as maker, having its principal place of business
c/o Behringer Harvard Funds, 15601 Dallas Parkway, Suite 600, Addison, Texas
75001 (“Borrower”), hereby unconditionally
promises to pay to the order of WACHOVIA
BANK, NATIONAL ASSOCIATION,
a banking association chartered under the laws of the United States of America,
having an office at Wachovia Bank,
National Association, Commercial Real Estate Services, 8739 Research
Drive URP 4, NC 1075, Charlotte, North Carolina  28262 (“Lender”), or at such other place as the holder hereof may
from time to time designate in writhing, the principal sum of Seventy-Five
Million and No/100 Dollars ($75,000,000), in lawful money of the United States
of America with interest thereon to be computed from the date of this Note at
the Interest Rate, and to be paid in accordance with the terms of this Note and
that certain Loan Agreement, dated 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”).  All
capitalized terms not defined herein shall have the respective meanings set
forth in the Loan Agreement.

ARTICLE 1

PAYMENT TERMS

Borrower agrees to pay
the principal sum of this Note and interest on the unpaid principal sum of this
Note from time to time outstanding at the rates and at the times specified in
Article 2 of the Loan Agreement and the outstanding balance of the principal
sum of this Note and all accrued and unpaid interest thereon shall be due and
payable on the Maturity Date.

ARTICLE 2

DEFAULT AND ACCELERATION

Except as otherwise
provided in the Loan Agreement, the Debt shall without notice become
immediately due and payable at the option of Lender if any payment required in
this Note is not paid on or prior to the date when due or if not paid on the
Maturity Date or on the happening of any other Event of Default.

ARTICLE 3

LOAN DOCUMENTS

This Note is secured by
the Mortgage and the other Loan Documents. 
All of the terms, covenants and conditions contained in the Loan
Agreement, the Mortgage and the other Loan Documents are hereby made part of
this Note to the same extent and with the same force as if they were fully set
forth herein.  In the event of a conflict
or inconsistency between the terms 

 

of this Note and the Loan
Agreement, the terms and provisions of the Loan Agreement shall govern.

ARTICLE 4

SAVINGS CLAUSE

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, (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.

ARTICLE 5

NO ORAL CHANGE

This Note 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.

ARTICLE 6

WAIVERS

Borrower and all others
who may become liable for the payment of all or any part of the Debt do hereby
severally waive presentment and demand for payment, notice of dishonor, notice
of intention to accelerate, notice of acceleration, protest and notice of
protest and non-payment and all other notices of any kind, except for such
notices as are expressly provided for in any Loan Document.  No release of any security for the Debt or
extension of time for payment of this Note or any installment hereof, and no
alteration, amendment or waiver of any provision of this Note, the Loan
Agreement or the other Loan Documents made by agreement between Lender or any
other Person shall release, modify, amend, waive, extend, change, discharge,
terminate or affect the liability of Borrower, and any other Person who may
become liable for the payment of all or any part of the Debt, under this Note,
the Loan Agreement or the other Loan Documents, except as may be expressly
provided in such release, alteration, amendment or waiver.  No notice to or demand on Borrower shall be
deemed to be a waiver of the obligation of Borrower or of the right of Lender
to take further action without further notice or demand as provided for in this
Note, the Loan Agreement or the other Loan Documents.  If Borrower is a partnership, the agreements
herein contained shall remain in force and be applicable, notwithstanding any
changes in the individuals or entities comprising the partnership, and the term
“Borrower,” as used herein, shall include any alternate or successor
partnership, but any predecessor partnership and their partners shall not
thereby be released from any liability. 
If Borrower is a corporation, the agreements contained herein shall
remain in full force and be applicable notwithstanding any changes in the
shareholders comprising, or the officers and

 2
 

 

directors relating to,
the corporation, and the term “Borrower” as used herein, shall include any
alternative or successor corporation, but any predecessor corporation shall not
be relieved of liability hereunder.  If
any Borrower is a limited liability company, the agreements herein contained
shall remain in force and be applicable, notwithstanding any changes in the
members comprising the limited liability company, and the term “Borrower” as
used herein, shall include any alternate or successor limited liability
company, but any predecessor limited liability company shall not thereby be
released from any liability.  Nothing in
the foregoing sentence shall be construed as a consent to, or a waiver of, any
prohibition or restriction on transfers of interests in such partnership,
corporation or limited liability company which may be set forth in the Loan
Agreement, the Mortgage or any other Loan Document.

ARTICLE 7

TRANSFER

Upon the transfer of this
Note, Borrower hereby waiving prior notice of any such transfer, Lender may
deliver all the collateral mortgaged, granted, pledged or assigned pursuant to
the Loan Documents, or any part thereof, to the transferee who shall thereupon
become vested with all the rights herein or under applicable law given to
Lender with respect thereto, and Lender shall thereafter forever be relieved
and fully discharged from any liability or responsibility in the matter; but
Lender shall retain all rights hereby given to it with respect to any
liabilities and the collateral not so transferred.

ARTICLE 8

EXCULPATION

The provisions of
Section 9.3 of the Loan Agreement are hereby incorporated by reference
into this Note to the same extent and with the same force as if fully set forth
herein.

ARTICLE 9

GOVERNING LAW

This Note shall be
governed by and construed in accordance with the laws of the state in which the
Property is located (without regard to any conflict of laws or principles) and
the applicable laws of the United States of America.

ARTICLE 10

NOTICES

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

ARTICLE 11

JOINT AND SEVERAL

If more than one Person
has executed this Note as “Borrower”, the obligations of all such Persons
hereunder shall be joint and several except as set forth in the Loan Documents.

 3

 

IN WITNESS WHEREOF,
Borrower has duly executed this Note as of the day and year first above
written.

 

	
   

  	
  BEHRINGER HARVARD ELDRIDGE PLACE

  LP, a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Title: SecretaryExhibit
10.4

PREPARED BY AND UPON

RECORDATION RETURN TO:

Proskauer Rose LLP

1585 Broadway

New York, New York  10036

Attention:  David J. Weinberger,
Esq.

Telephone:  212-969-3405

 

Space above this
line for recorder’s use

Loan No. 502858632

BEHRINGER HARVARD
ELDRIDGE PLACE LP, as borrower

(Borrower)

to

WILLIAM D. CLEVELAND,
ESQ., as trustee

(Trustee)

for the benefit of

WACHOVIA BANK, NATIONAL
ASSOCIATION, as lender

(Lender)

 

DEED OF TRUST, ASSIGNMENT OF LEASES

AND RENTS, SECURITY AGREEMENT AND

FIXTURE FILING

 

 

Dated: December      ,
2006

 

DEED
OF TRUST, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND
RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “Security Instrument”)
is made as of this          day of
December, 2006, by BEHRINGER HARVARD ELDRIDGE
PLACE LP, a Delaware limited partnership, having its principal place
of business c/o Behringer Harvard Funds, 15601 Dallas Parkway, Suite 600,
Addison, Texas 75001, as mortgagor (“Borrower”) to WILLIAM D. CLEVELAND, ESQ., having an address at 909 Fannin,
Suite 200, Houston, Texas 77010, as trustee (“Trustee”)
for the benefit of WACHOVIA
BANK, NATIONAL ASSOCIATION,
a banking association chartered under the laws of the United States of America,
having its principal place of business at Wachovia Bank, National Association,
Commercial Real Estate Services, 8739 Research Drive URP 4, NC 1075, Charlotte,
North Carolina  28262, as grantee (“Lender”).

W
I T N E S S E T H:

WHEREAS, this Security
Instrument is given to secure a loan (the “Loan”) in the principal sum of
Seventy-Five Million and No/100 Dollars ($75,000,000.00) advanced pursuant to
that certain 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 Promissory Note, dated the date hereof, made by
Borrower in favor of Lender (as the same may hereafter be amended, restated,
replaced, supplemented, renewed, extended or otherwise modified from time to
time, the “Note”);

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 (as herein defined); and

WHEREAS, this Security
Instrument is given pursuant to the Loan Agreement, and payment, fulfillment,
and performance by Borrower of its obligations thereunder and under the other
Loan Documents are secured hereby, and each and every term and provision of the
Loan Agreement, the Note, and that certain Assignment of Leases and Rents of
even date herewith made by Borrower in favor of Lender delivered in connection
with this Security Instrument (as the same may be amended, restated, replaced,
supplemented, renewed, extended or otherwise modified from time to time, the “Assignment of Leases”),
including the rights, remedies, obligations, covenants, conditions, agreements,
indemnities, representations and warranties of the parties therein, are hereby
incorporated by reference herein as though set forth in full and shall be
considered a part of this Security Instrument (the Loan Agreement, the Note,
this Security Instrument, the Assignment of Leases and Rents and all other
documents evidencing or securing the Debt (including all additional mortgages,
deeds to secure debt and assignments of leases and rents) or pursuant to which
any Person incurs, has incurred or assumes any obligation to or for the benefit
of Lender in connection therewith, are hereinafter referred to collectively as
the “Loan
Documents”).

 

NOW THEREFORE, in consideration
of the making of the Loan by Lender and the covenants, agreements,
representations and warranties set forth in this Security Instrument:

ARTICLE I - GRANTS OF SECURITY

Section
1.1                                      Property Mortgaged.  Borrower does hereby irrevocably grant,
bargain, sell, convey, mortgage, pledge, assign, warrant and transfer to
Trustee, forever in trust WITH POWER OF SALE, 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”).  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 

 2
 

 

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”; provided, however, that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-perfection or
priority of the security interest in any item or portion of the collateral
granted as security under the Loan is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State in which the Property is
located (“Other UCC State”), the term “Uniform Commercial Code” shall means the Uniform Commercial
Code as in effect in such Other UCC State for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection or
priority of such collateral), 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 

 3
 

 

before or after the filing by or against Borrower of
any petition for relief under the Bankruptcy 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 or 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, all accounts established or

 4
 

 

maintained pursuant to (i) the Cash Management
Agreement and (ii) the Lockbox Agreement; together with all deposits or wire
transfers made to such accounts 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;

(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 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 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 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, including reasonable
legal expenses and attorneys’ fees, incurred or paid by Lender in protecting 

 5
 

 

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.

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.  The addresses of
the Debtor (Borrower) and the Secured Party (Lender) are set forth in the first
paragraph hereof.

Section
1.5                                      Pledges of Monies Held.  Borrower hereby pledges to Lender and grants
to Lender a security interest in all of Borrower’s right, title and interest in
and to 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.

CONDITIONS
TO GRANT

TO HAVE AND TO HOLD the above
granted and described Property unto Trustee, in trust for the use and benefit
of Lender and its successors and assigns, forever;

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 (hereinafter defined) 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, these presents and the estate hereby granted shall
cease, terminate and be void; provided, however, that Borrower’s obligation to
indemnify and hold harmless Lender pursuant to the provisions hereof shall
survive any such payment or release.

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.

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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 (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

 7
 

 

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.

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

 8
 

 

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 maybe 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.

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.

 9
 

 

(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 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

 10
 

 

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 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.

 11
 

 

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.

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 or
instruct Trustee to 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
or instruct Trustee to 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  or
instruct Trustee to 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;

 12
 

 

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

(e)                                  institute  or instruct Trustee to 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 or
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, 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 Premium 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

 13
 

 

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 sole 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

(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 the Property,
this Security Instrument shall continue as a lien and security interest on the
remaining portion of the Property unimpaired and without loss of priority.

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

 14
 

 

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 condition of the Property or of Borrower, 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

 15
 

 

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.

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

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

Section
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.

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 9.3 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.

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

 16
 

 

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 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 with respect to exposure to
Hazardous Substances, 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 with respect to exposure to Hazardous
Substances.  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; the River and
Harbors Appropriation Act; the Pennsylvania Clean Streams Law; the Pennsylvania
Hazardous Site Clean-Up Act and the Pennsylvania Solid Waste Management
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

 17

 

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 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 by reason of exposure
thereto, including but not limited to petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, lead,
radon, radioactive materials, flammables and explosives, including molds or
other fungi, bacteria or other microorganisms, or any etiologic agents or
materials, 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 

 18
 

 

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 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; (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;
and (j) to the extent possible using commercially reasonable efforts, the
Property shall be maintained in such a manner as to prevent excess humidity or
accumulation of moisture that may promote the growth of molds or other fungi
and other microorganisms.

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

 19
 

 

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, 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 

 20
 

 

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 Trustee, 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, 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 (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 for the benefit of
third parties) as well as the respective directors, officers, shareholders,
partners, employees, agents, servants, representatives, contractors,
subcontractors, 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,

 21
 

 

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 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 (1) 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

 22
 

 

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 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

 23
 

 

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 9.3 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.

ARTICLE XII - NOTICES

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

ARTICLE XIII - APPLICABLE LAW

Section
13.1                                Governing Law.  This Security Instrument shall be governed by
and construed in accordance with the laws of the state in which the Property is
located (without regard to any conflict of laws or principles) and the
applicable laws of the United States of America.

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.

 24
 

 

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 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 attorneys’,
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.

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

 25
 

 

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 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.”

Section
15.9                                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 by written instrument to that effect
delivered 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 reasons 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 a bond for the faithful performance of the duties of Trustee
hereunder unless required by Lender.  The
procedure provided for in this Section 15.9 for substitution of Trustee shall
be in addition to and not in exclusion of any other provisions for
substitution, by law or otherwise.

Section
15.10                          Trustee’s Fees.  Borrower shall pay all costs, fees and expenses incurred by Trustee and Trustee’s
agents and counsel in connection with the performance by

 26
 

 

Trustee of Trustee’s duties
hereunder, and all such costs, fees and expenses shall be secured by this
Security Instrument.

ARTICLE XVI - LOCAL LAW PROVISIONS

Section
16.1                                Certain Matters Relating to
Property Located in the State of Texas.  With respect to the Property which is located
in the State of Texas, notwithstanding anything contained herein:

(a)                                  Borrower
represents and covenants that no part of the Property forms any part of any
property owned, used or claimed by Borrower as a business or residential
homestead.

(b)                                 Without
limiting any other rights or remedies herein provided and provided by law at
law and in equity, upon the occurrence and the continuation of an Event of
Default, Lender may request the Trustee to enforce this Security Instrument and
to sell the Property as an entirety or in parcels, by one sale or by several
sales, held at one time or at different times as the Trustee may elect (all
rights to a marshalling of the Property, or to a sale in inverse order of
alienation, being hereby expressly waived by Borrower), at the place for sale
designated from time to time by applicable authorities in the county in which
the Property, or a part of the Property, to be sold is situated, each sale to
be made on the first Tuesday of a calendar month between the hours of ten o’clock
a.m. and four o’clock p.m. (subject to any obligation imposed by applicable law
to designate the times during which the sale is to be held) to the highest
bidder for cash at public auction, after posting or causing to be posted
written or printed notice of the time, place and terms of sale at the door of
the Courthouse of said county (or such other place designated by the
commissioner’s court of said county for such postings), for at least twenty-one
(21) days before the day of sale (such twenty-one (21) day period commencing on
the date of posting), and to execute and deliver to the purchasers at each such
sale proper conveyances of the property sold, with general warranty of title
binding upon Borrower and the heirs, legal representatives, successors and
assigns of Borrower.  In addition, the holders
of the Debt shall at least twenty-one (21) days preceding the date of sale
(such twenty-one (21) day period commencing on the date of posting), (i) file a
copy of such notice with the clerk of each county in which the Property is
situated and (ii) serve written notice of the proposed sale by certified mail
on each debtor obligated to pay the Debt according to the records of such
holder(s).  Service of such notice shall
be completed upon deposit of the notice, enclosed in a postpaid wrapper,
properly addressed to each debtor at such debtor’s most recent address as shown
by Lender’s records, in a post office or official depository under the care and
custody of the United States Postal Service. 
The affidavit of any person having knowledge of the facts to the effect
that such service was completed shall be prima facie evidence of the fact of
service.  No notice of such sale or sales
other than that herein provided for need be given to Borrower or any other
person or party.  The Trustee shall apply
the proceeds arising from each such sale as provided hereinbefore.  Lender or other holders of the Debt shall
have the right to become the purchaser at any sale to the same extent as any
other party, being the highest bidder, and in lieu of paying cash may credit
the amount of the bid upon the Debt held by Lender or such other holders up to
the full amount of the Debt then unpaid. 
Lender shall not be held liable for any damages in connection with
actions taken by Lender or by Trustee hereunder.  If a sale under this Security Instrument is
made because of an Event of Default relating to payment of any portion of the
Debt, and Lender elects not to accelerate the Debt, the sale may be made
subject to the

 27
 

 

unmatured part of the Debt, and as to the unmatured
part of the Debt, this Security Instrument shall remain in full force and
effect.  Several sales may be made
hereunder without exhausting the power of foreclosure and the power to sell the
Property, in whole or in part, for any other part of the Debt whether then matured
or subsequently maturing.  Borrower shall
indemnify Trustee against all liabilities and expenses that he may incur in the
performance of his duties under this Security Instrument.

(c)                                  Except
as expressly otherwise provided in this Security Instrument, Borrower waives
any and all rights of presentment, protest, notice of protest, demand, notice
of dishonor, notice of nonpayment, notice of intent to accelerate, notice of
acceleration and all other notices.  To
the full extent Borrower may do so, Borrower agrees that Borrower will not at
any time insist upon, plead, claim or take the benefit or advantage of any law
now or hereafter in force providing for any moratorium, appraisement,
valuation, stay, extension, reinstatement or redemption, and Borrower, for
Borrower, Borrower’s heirs, devisees, representatives, successors and assigns,
and for any and all persons ever claiming any interest in the Property, to the
extent permitted by applicable law, hereby waives and releases all rights of
moratorium, reinstatement, redemption, valuation, appraisement, stay of
execution, notice of intention to mature or declare due the whole of the Debt,
notice of election to mature or declare due the whole of the Debt and all
rights to a marshalling of assets of Borrower, including the Property, or to a
sale in inverse order of alienation in the event of foreclosure of the liens
and/or security interest hereby created. 
Borrower shall not have or assert any right under any statute or rule of
law pertaining to the marshalling of assets, sale in inverse order of alienation,
the exemption of homestead, the administration of estates of decedents, or
other matters whatever to defeat, reduce or affect the right of Lender under
the terms of this Security Instrument to a sale of the Property for the
collection of the Debt without any prior or different resort for collection, or
the right of Lender under the terms of this Security Instrument to the payment
of the Debt out of the proceeds of sale of the Property in preference to every
other claimant whatever.  Borrower waives
any right or remedy which Borrower may have or be able to assert pursuant to
Chapter 34 of the Texas Business and Commerce Code, or any other provision of
Texas law, pertaining to the rights and remedies of sureties.  If any law referred to in this Section and
now in force, of which Borrower or Borrower’s heirs, devisees, representatives,
successors or assigns or any other persons claiming any interest in the
Property might take advantage despite this Section, shall hereafter be repealed
or cease to be in force, such law shall not thereafter be deemed to preclude
the application of this Section.

TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, BORROWER HEREBY WAIVES ANY RIGHT TO DETERMINATION
OF FAIR MARKET VALUE AND TO AN OFFSET AGAINST ANY DEFICIENCY RESULTING FROM A
FORECLOSURE SALE OF THE PROPERTY (OR ANY PORTION THEREOF) PURSUANT TO SECTION
51.002 OF THE TEXAS PROPERTY CODE (AS AMENDED AND IN EFFECT FROM TIME TO TIME
AND/OR ANY SUCCESSOR STATUTE; HEREIN CALLED THE “PROPERTY CODE”), OR PURSUANT
TO A JUDICIAL FORECLOSURE INCLUDING, WITHOUT LIMITATION, ANY SUCH RIGHTS THAT
BORROWER MAY OTHERWISE HAVE HAD UNDER SECTION 51.003 AND/OR SECTION 51.004 OF
THE PROPERTY CODE.

 28
 

 

(d)                                 Without
limiting any other rights or remedies herein provided and provided by law at
law and in equity, upon the occurrence and the continuation of an Event of
Default, with respect to that portion of the Property constituting collateral
subject to the Uniform Commercial Code of the State of Texas, Lender may, at
his option, accomplish the sale of such collateral jointly with the sale of the
real property pursuant to the Property Code relating to the sale of real
estate, or separately by Chapter 9 of the Texas Business and Commerce Code
relating to the sale of collateral after default by the debtors (as said
section and chapter now exist or may be hereafter amended or succeeded), or by
any other present or subsequent articles of enactments relating to same.  In the event of a sale of collateral pursuant
to Chapter 9 of the Texas Business and Commerce Code, if notice to Borrower of
the intended disposition is required by law, such notice shall be decreed
commercially reasonable if given to Borrower at least ten (10) calendar days
prior to the date of the sale.  Nothing
contained in this paragraph shall be construed to limit in any way Lender’s
right to sell the Property by private sale if any court of competent
jurisdiction orders the same.  At any
such sale:

(i)                                     whether
made under the power herein contained, the aforesaid Section 51.002, the Texas
Business and Commerce Code, 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 Lender to be physically present at, or to have constructive
possession of, the Property (Borrower shall deliver to Lender any portion of
the Property not actually or constructively possessed by Lender immediately
upon demand by Lender) and the title to and right of possession of any such
property shall pass to the purchaser thereof as completely as if the same had
been actually present and delivered to purchaser at such sale;

(ii)                                  each
instrument of conveyance executed by Trustee shall contain a general warranty
of title, binding upon Borrower;

(iii)                               each
and every 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 Note, advertisement
and conduct of such sale in the manner provided herein and otherwise by law and
appointment of any successor Lender hereunder;

(iv)                              any
and all prerequisites to the validity thereof shall be conclusively presumed to
have been performed;

(v)                                 the
receipt by Trustee or such other party or officer making the sale of the full
amount of the purchase money shall be sufficient to discharge the purchaser or
purchasers from any further obligation for the payment thereof, 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;

(vi)                              to
the fullest extent permitted by law, Borrower shall be completely and
irrevocably divested of all of its right, title, interest, claim and

 29
 

 

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 to any part thereof by,
through or under Borrower; and

(vii)                           to the
extent and under such circumstances as are permitted by law, Lender may be a
purchaser at any such sale.

(e)                                  The
Property may be sold in one or more parcels and in such manner and order as
Lender may elect, it being expressly understood and agreed that the right of
sale arising out of any Event of Default shall not be exhausted by any one or
more sales.

(f)                                    Subject
to the provisions of any written agreement to the contrary, the purchaser at
any foreclosure sale hereunder shall become the legal owner of the
Property.  All occupants (except those
which have previously executed a prior written agreement with the purchaser) of
the Property or any part thereof shall become tenants at sufferance 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.

(g)                                 THE
WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO ORAL AGREEMENTS
BETWEEN THE PARTIES.

(h)                                 WITHOUT
LIMITATION, THE INDEMNITIES CONTAINED IN THIS SECURITY INSTRUMENT SHALL APPLY
TO EACH INDEMNIFIED PERSON WITH RESPECT TO MATTERS WHICH IN WHOLE OR IN PART
ARE CAUSED BY OR ARISE OUT OF, OR ARE CLAIMED TO BE CAUSED BY OR ARISE OUT OF,
THE NEGLIGENCE (WHETHER SOLE, COMPARATIVE OR CONTRIBUTORY) OR STRICT LIABILITY
OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PERSON. 
HOWEVER, SUCH INDEMNITIES SHALL NOT APPLY TO A PARTICULAR INDEMNIFIED
PERSON TO THE EXTENT THAT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR
ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THAT INDEMNIFIED
PERSON.

(i)                                     This
Security Instrument shall be a security agreement between Borrower, as the
debtor, and Lender, as the secured party, cover the Property constituting
personal property or fixtures governed by the Texas Business and Commerce Code
(hereinafter called the “Texas Code”), and Borrower grants to Lender a
security interest in such portion of the Property.  In addition to Lender’s other rights
hereunder, Lender shall have all rights of a secured party under the Texas
Code.  Borrower shall execute and deliver
to Lender all financing statements that may be required by Lender to establish
and maintain the validity and priority of Lender’s security interest and
Borrower shall bear all costs thereof, including all Uniform Commercial Code

 30
 

 

searches reasonably required by Lender.  If Lender should dispose of any of the
Property pursuant to the Texas Code, ten (10) days written notice by Lender to
Borrower shall be deemed to be reasonable notice; provided, however, Lender may
dispose of such property in accordance with the foreclosure procedures of this
Security Instrument in lieu of proceeding under the Texas Code.

(j)                                     Certain
of the Property is or will become “fixtures” (as that term is defined in the
Texas Code) on the real property hereinabove described, and this Security
Instrument upon being filed for record in the real property records shall also
operate as a financing statement upon such of the Property which is or may
become fixtures.  Borrower has an
interest of record in the real property.

(k)                                  WAIVER OF CONSUMER RIGHTS.  TO THE EXTENT NOW OR HEREAFTER APPLICABLE,
BORROWER HEREBY WAIVES BORROWER’S RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES -
CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., OF THE TEXAS CODE, A LAW THAT
GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. 
AFTER CONSULTATION WITH AN ATTORNEY OF BORROWER’S OWN SELECTION,
BORROWER VOLUNTARILY CONSENTS TO THIS WAIVER.

(l)                                     TEXAS
FINANCE CODE SECTION 307.052 COLLATERAL PROTECTION INSURANCE NOTICE:  (A) BORROWER IS REQUIRED TO: (I) KEEP THE
PREMISES INSURED AGAINST DAMAGE IN THE AMOUNT LENDER SPECIFIES (IN ACCORDANCE
WITH THE PROVISIONS OF THE LOAN AGREEMENT); (II) PURCHASE THE INSURANCE FROM AN
INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE
SURPLUS LINES INSURER; AND (III) NAME LENDER AS THE PERSON TO BE PAID UNDER THE
POLICY IN THE EVENT OF A LOSS; (B) BORROWER MUST, IF REQUIRED BY LENDER,
DELIVER TO LENDER A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS;
AND (C) IF BORROWER FAILS TO MEET ANY REQUIREMENT LISTED IN PARAGRAPH (A) OR
(B), LENDER MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF BORROWER AT
THE BORROWER’S EXPENSE.

[NO FURTHER TEXT ON THIS PAGE]

 31

 

IN WITNESS WHEREOF, this
Security Instrument has been executed by Borrower as of the day and year first
above written.

	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD ELDRIDGE PLACE 

  LP, a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  Gerald
  J. Reihsen, III

  
	
   

  	
   

  	
  Title:    Secretary

  
					

 

 

I hereby certify
that the address of the Lender is 8739 Research Drive URP 4, NC 1075,
Charlotte, North Carolina  28262.

	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION,

  a banking association chartered under the laws of the 

  United States of America

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

ACKNOWLEDGMENT

	
  STATE OF TEXAS

  	
  )

  
	
   

  	
   

  	
  :

  
	
   

  	
  COUNTY

  	
  )

  

 

I,
the undersigned, a notary public in and for said county in said state, hereby
certify that GERALD J. REIHSEN, III, whose name as Secretary of BEHRINGER                                ,
LLC, a Delaware limited liability company, is signed to the foregoing
instrument, and who is known to me, acknowledged before me on this day that,
being informed of the contents of said instrument, he, as such officer and with
full authority, executed the same voluntarily for and as the act of said
limited liability company.

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

 

	
  

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
  [NOTARIAL SEAL]

  	
  My commission expires:

  

 

 

ACKNOWLEDGMENT

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
   

  	
  :

  
	
  COUNTY OF NEW YORK

  	
   

  	
  )

  

 

On                    ,
2006, before me,                                     ,
the undersigned officer, personally appeared                        
who acknowledged himself to be the                        
of WACHOVIA BANK, NATIONAL ASSOCIATION, a banking association chartered under
the laws of the United States of America, and that as such                        
, being authorized to do so, executed the foregoing instrument for the purposes
therein contained by signing the name of such entity by himself/herself as                             .

IN WITNESS WHEREOF,
I have hereunto set my hand and official seal.

 

[S E A L]

	
   

  	
  Notary Public

  
	
   

  	
  My Commission Expires:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Printed Name of Notary Public

  	
   

  

 

 

EXHIBIT
A

LEGAL
DESCRIPTION

 A-1

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