Document:

Exhibit 10.11

 

 

CHINA GREEN AGRICULTURE, INC.

 

October 25, 2011

 

Via Email

shiyiru@hotmail.com

 

Dear Ms. Shi:

 

This letter shall confirm
our discussions pursuant to which you have indicated your willingness to serve on the Board of Directors of China Green Agriculture,
Inc. (the “Company”) and the Audit Committee, Compensation Committee and Nominating Committee effective the date immediately
following the annual shareholders meeting scheduled to be held on December 8, 2011 (“2011 ASM”) on the terms set forth
below until the next annual shareholders meeting or your earlier resignation or the removal pursuant to the Company’s by-laws.

 

Our company compensates
our non-employee directors for all services they perform as a director of our company, including attendance at Board of Directors
meetings and service as members of committees of the Board of Directors to which they are appointed. The details of such compensation
are:

 

		1.	an annual compensation of $24,000;

		2.	eligible to participate in the Company’s 2009 Equity Compensation Plan and to be compensated
at the same level of other independent directors’ of the Company.

 

You would also be reimbursed
for all of your out-of-pocket expenses in traveling to and attending meetings of the Board of Directors and committees on which
you would serve.

 

We will have the D&O
insurance coverage for you. In addition, we will indemnify you to the fullest extent permitted by Nevada law as provided within
NRS 78.7502 and NRS 78.751 and according to our Certificate of Incorporation.

 

You may indicate your
agreement with these terms by signing and dating this letter agreement and returning it to the undersigned. By signing this letter
agreement, you reconfirm to the company that you have no contractual commitments or other legal obligations that would prohibit
you from performing your duties for the company.

 

Please note that the
effect of the letter is subject to the 2011 ASM, when the election of you is approved by the shareholders of the Company.

 

    	 

    	 

    

 

	 	Very truly yours,
	 	 
	 	CHINA GREEN AGRICULTURE, INC.
	 	 
	 	By:	 	 /s/  Tao Li
	 	 	Tao Li
	 	 	President & Chief Executive Officer

 

 

 

I have read and accept and agree to the above terms of employment:

 

	/s/ Yiru Shi	 
	Signature of Yiru (Melody) ShiAllan Hartley

Summary Term Sheet - Employment Agreement

December 13, 2011 

 

The following sets forth the agreement
between Allan Hartley (“AH”) and TRIG Special Purpose 1, LLC (“TRIG” or the “Company”).

 

	Title:	Chief
    Executive Officer and Director.
	 	 
	Company:	The
    Company’s plan is to acquire control of a publicly traded shell corporation (“Pubco”) and to use Pubco to
    effect the acquisitions of temporary staffing businesses pursuant to a rollup business strategy.  The AH employment agreement
    will be assumed by Pubco on acquisition of Pubco by TRIG Special Purpose 1, LLC, an affiliate of TRIG Capital Group, LLC.
	 	 
	Responsibilities:	AH’s
    duties and responsibilities shall those which are normally and customarily vested in the CEO in a public corporation. AH’s
    duties shall include those duties and services for the Company and its affiliates as the Board of Directors shall, in its
    sole and absolute discretion, from time to time reasonably direct which are not inconsistent with AH’s position including
    the identification, negotiation and acquisition of prospective businesses; interface with institutional and retail investors;
    operational and administrative activities.
	 	 
	Date of Commencement:	Part time, month-to-month:
    January 15, 2012 (see note below);
	 	Full time on
    completion of the initial acquisition.
	 	 
	Compensation:	Part
    time: $7500 per month;
	 	Full
    time: base salary at an annual rate of $180,000.
	 	 
	 	Note:
    Commencement of part time compensation is subject to completion of the Company’s current bridge loan offering anticipated
    to close prior to January 15, 2012.

 

 

	
        New York Office

        590 Madison Avenue

        Suite 2127

        New York, NY 10022

        800.330.1860
	
        Ft. Lauderdale Office

        300 S. Pine Island

        Suite 305

        Ft. Lauderdale, FL 33324

        954.467.8170

    	 

    	 	

    

 

Allan Hartley

Term Sheet

Employment Agreement 

December 13, 2011

Page 2...

 

	Expense
    Reimbursement:	AH shall
    be entitled to reimbursement from the Company for the reasonable costs and expenses that AH incurs in connection with the
    performance of AH’s duties and obligations under this Agreement.
	 	 
	Employee Benefit
    Plans:	AH will be included
    in the Company’s group medical program at Company’s expense.
	 	 
	Vacation:	Upon commencement
    as a full time employee, AH will accrue three weeks’ vacation per year.
	 	 
	Bonuses:	Based on certain
    performance milestones negotiated with the AH employment agreement.
	 	 
	Shares
    of Pubco:	The
    Company shall transfer (or cause to be transferred) to AH a number of shares (the “Shares”) of the Common Stock
    of Pubco that represent Five Percent (5%) of the outstanding Common Stock or Pubco as of the date of acquisition of control.
	 	 
	 	The Shares shall
    vest at the following milestones. Of the Five Percent (5%) total shares transferred to AH, Two Percent (2%) will vest simultaneous
    with the completion of the Company’s first acquisition. An additional One Percent (1%) will vest at the completion of
    the Company’s second acquisition. An additional One Percent (1%) will vest at the completion of the Company’s
    third acquisition. The remaining One Percent (1%) will vest after the completion of the Company’s fourth acquisition.

 

 

TRIG Special Purpose 1, LLC

 

By: ________________________

 

Its: ________________________

 

AGREED AND ACCEPTED

 

 

__________________________

Allan Hartley

 

 

	
        New York Office

        590 Madison Avenue

        Suite 2127

        New York, NY 10022

        800.330.1860
	
        Ft. Lauderdale Office

        300 S. Pine Island

        Suite 305

        Ft. Lauderdale, FL 33324

        954.467.8170ASSIGNMENT

 

 

Agreement entered into by and between
TRIG Capital Partners, LLC, a California Limited Liability Company (“Assignor”) and Staffing 360 Solutions, Inc., a
Nevada corporation (“Assignee”) as of this 21st day of February, 2012

 

WHEREAS, Assignor entered into an
employment agreement with Alan B. Hartley, a Massachusetts resident, dated December 15, 2011 (the “Agreement”) set
forth as Exhibit A attached hereto;

 

WHEREAS, the Assignor desires to
assign the Agreement to the Assignee;

 

THEREFORE, for good and valuable
consideration received, Assignor hereby unconditionally and irrevocably assigns, grants and transfers all rights, title, interest
and obligation in, to and under the Agreement to Assignee:

 

The Assignor hereby warrants and represents
that the Assignor possesses full right and authority to enter into this Agreement and to transfer the aforementioned rights, title,
interest and obligation.

 

The Assignor warrants
and represents that the aforementioned rights, title, interest and benefits are free from all liens, encumbrances, or adverse claims.

 

The Assignment shall be binding upon and
inure to the benefit of Assignor and Assignee, and to their successors, assigns and personal representatives.

 

 

Signed as of this 21th day of February, 2012.

 

	Assignor:	TRIG Capital Partners, LLC
	 	 
	 	By: ___________________________
	 	       Authorized Signature
	 	 
	 	 
	Assignee:	Staffing 360 Solutions, Inc.
	 	 
	 	By:  __________________________
	 	        Authorized SignatureLOAN AGREEMENT

 

between

 

COP - WESTERN AVE., LLC

as Borrower

 

and

 

GENERAL ELECTRIC CAPITAL CORPORATION

as Lender

 

September 7, 2012

 

 

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	ARTICLE 1 CERTAIN DEFINITIONS	1
	Section 1.1	Certain Definitions	1
	 	 	 
	ARTICLE 2 LOAN TERMS	10
	Section 2.1	The Loan	10
	Section 2.2	Interest Rate; Late Charge	10
	Section 2.3	Terms of Payment	11
	Section 2.4	Security	14
	Section 2.5	Interest Rate Cap Agreement	15
	 	 	 
	ARTICLE 3 INSURANCE, CONDEMNATION, AND IMPOUNDS	15
	Section 3.1	Insurance	15
	Section 3.2	Use and Application of Loss Proceeds	17
	Section 3.3	Condemnation Awards	18
	Section 3.4	Impounds	19
	 	 	 
	ARTICLE 4 REPRESENTATIONS AND WARRANTIES	19
	Section 4.1	Organization and Power	19
	Section 4.2	Validity of Loan Documents	19
	Section 4.3	Liabilities; Litigation; Other Secured Transactions	20
	Section 4.4	Taxes and Assessments	20
	Section 4.5	Other Agreements; Defaults	20
	Section 4.6	Compliance with Law; Project Condition.	20
	Section 4.7	Location of Borrower	21
	Section 4.8	ERISA.	21
	Section 4.9	Margin Stock	21
	Section 4.10	Tax Filings	21
	Section 4.11	Solvency	22
	Section 4.12	Full and Accurate Disclosure	22
	Section 4.13	Single Purpose Entity	22
	Section 4.14	Management Agreement	22
	Section 4.15	No Conflicts	23
	Section 4.16	Title	23
	Section 4.17	Use of Project	23
	Section 4.18	Flood Zone	23
	Section 4.19	Insurance	23
	Section 4.20	Filing and Recording Taxes	24
	Section 4.21	Investment Company Act	24
	 	 	 
	ARTICLE 5 ENVIRONMENTAL MATTERS	24
	Section 5.1	Representations and Warranties on Environmental Matters	24
	Section 5.2	Covenants on Environmental Matters	25
	Section 5.3	Allocation of Risks and Indemnity	26

 

    	-i-

    	 

    

 

	Section 5.4	Lender's Right to Protect Collateral	27
	Section 5.5	No Waiver	27
	 	 	 
	ARTICLE 6 LEASING MATTERS	27
	Section 6.1	Representations and Warranties on Leases	27
	Section 6.2	Standard Lease Form; Approval Rights	28
	Section 6.3	Covenants	28
	Section 6.4	Tenant Estoppels	28
	 	 	 
	ARTICLE 7 FINANCIAL REPORTING	28
	Section 7.1	Financial Statements.	28
	Section 7.2	Accounting Principles	29
	Section 7.3	Other Information	29
	Section 7.4	Annual Budget	29
	Section 7.5	Audits	30
	 	 	 
	ARTICLE 8 COVENANTS	30
	Section 8.1	Due on Sale and Encumbrance; Transfers of Interests	30
	Section 8.2	Taxes; Charges	31
	Section 8.3	Control; Management	32
	Section 8.4	Operation; Maintenance; Inspection	32
	Section 8.5	Taxes on Security	32
	Section 8.6	Legal Existence; Name, Etc.	33
	Section 8.7	Affiliate Transactions	33
	Section 8.8	Limitation on Other Debt	33
	Section 8.9	Mechanics Liens and Stop Payment Notices	33
	Section 8.10	Further Assurances	34
	Section 8.11	Estoppel Certificates	34
	Section 8.12	Notice of Certain Events	34
	Section 8.13	Indemnification	34
	Section 8.14	Application of Operating Revenues	35
	Section 8.15	Representations and Warranties	35
	Section 8.16	Post-Closing Matters	35
	 	 	 
	ARTICLE 9 ANTI-MONEY LAUNDERING AND INTERNATIONAL TRADE CONTROLS	36
	Section 9.1	Compliance with International Trade Control Laws and OFAC Regulations	36
	Section 9.2	Borrower's Funds	36
	 	 	 
	ARTICLE 10 EVENTS OF DEFAULT	37
	Section 10.1	Payments	37
	Section 10.2	Insurance	37
	Section 10.3	Transfer	37
	Section 10.4	Covenants	37
	Section 10.5	Representations and Warranties	38
	Section 10.6	Other Encumbrances	38

 

    	-ii-

    	 

    

 

	Section 10.7	Involuntary Bankruptcy or Other Proceeding	38
	Section 10.8	Voluntary Petitions, Etc.	38
	Section 10.9	Guarantor's Tangible Net Worth and Liquidity	38
	 	 	 
	ARTICLE 11 REMEDIES	38
	Section 11.1	Remedies - Insolvency Events	38
	Section 11.2	Remedies - Other Events	39
	Section 11.3	Lender's Right to Perform the Obligations	39
	 	 	 
	ARTICLE 12 MISCELLANEOUS	39
	Section 12.1	Notices	39
	Section 12.2	Amendments, Waivers, References.	42
	Section 12.3	Limitation on Interest	42
	Section 12.4	Invalid Provisions	43
	Section 12.5	Reimbursement of Expenses	43
	Section 12.6	Approvals; Third Parties; Conditions	43
	Section 12.7	Lender Not in Control; No Partnership	44
	Section 12.8	Time of the Essence	45
	Section 12.9	Successors and Assigns; Secondary Market Transactions	45
	Section 12.10	Renewal, Extension or Rearrangement	46
	Section 12.11	Waivers	46
	Section 12.12	Cumulative Rights	47
	Section 12.13	Singular and Plural	47
	Section 12.14	Phrases	47
	Section 12.15	Exhibits and Schedules	47
	Section 12.16	Titles of Articles, Sections and Subsections	47
	Section 12.17	Promotional Material	47
	Section 12.18	Survival	47
	Section 12.19	WAIVER OF JURY TRIAL	48
	Section 12.20	Punitive or Consequential Damages; Waiver	48
	Section 12.21	Governing Law	48
	Section 12.22	Entire Agreement	48
	Section 12.23	Counterparts	48
	Section 12.24	Brokers	48
	Section 12.25	Claims Against Lender	49
	 	 	 
	ARTICLE 13 LIMITATIONS ON LIABILITY	49
	Section 13.1	Limitation on Liability	49
	Section 13.2	Limitation on Liability of Lender's Officers, Employees, Etc.	51

 

    	-iii-

    	 

    

 

LIST OF EXHIBITS AND SCHEDULES

 

	EXHIBIT A	–	LEGAL DESCRIPTION OF PROJECT
	EXHIBIT B	–	BUDGET
	SCHEDULE 2.1	–	ADVANCE CONDITIONS
	SCHEDULE 2.3(4)	–	LIBOR BREAKAGE AMOUNT DEFINITION
	SCHEDULE 2.4(1)	–	CAPITAL REPLACEMENTS RESERVE
	SCHEDULE 4.1	–	ORGANIZATIONAL MATTERS

 

    	-iv-

    	 

    

 

LIST OF DEFINED TERMS

 

	Affiliate	1
	Agreement	1
	Anti-Money Laundering Laws	1
	Assignment of Rents and Leases	1
	Bank Secrecy Act	2
	Bankruptcy Party	38
	Borrower	1
	Borrower Party	2
	Budget	2
	Business Day	2
	Cap Agreement	14
	Cash Liquidity Balances	2
	Cash on Cash Return	2
	Closing Date	2
	Collateral	2
	Compliance Certificate	2
	Contract Rate	10
	Cornerstone REIT	2
	Counterparty	15
	Debt	3
	Debt Service	3
	Debt Service Coverage	3
	Default Rate	3
	Environmental Laws	3
	ERISA	21
	Eurodollar Business Day	1
	Event of Default	3
	Exit Fee	14
	Financial Institution	4
	Guarantors	4
	Guaranty	4
	Hazardous Materials	4
	Interest Holder	31
	Interest Period	4
	Lender	1
	Lender Investment Claims	45
	Libor Floor Rate	4
	Libor Rate	4
	Lien	4
	Loan	5
	Loan Documents	5
	Loan Year	5
	Loss Proceeds	5
	LTV Ratio	5

 

    	-v-

    	 

    

 

	Management Agreement	5
	Manager	5
	Maturity Date	6
	Mortgage	6
	Net Cash Flow	6
	Note	6
	OFAC	6
	Operating Expenses	6
	Operating Revenues	7
	Origination Fee	14
	Patriot Act	7
	Permitted Encumbrances	7
	Person	7
	Potential Default	7
	Project	7
	Restoration Threshold	7
	Secondary Market Transaction	7
	Single Purpose Entity	7
	Site Assessment	8
	Specially Designated National and Blocked Persons	8
	Spread Maintenance Amount	8
	Standard Adjustments	8
	Subordination of Property Management Agreement	9
	Tangible Net Worth	9
	Tax and Insurance Escrow Reserve	9
	Test Period	9
	Transfer	30
	U.S. Person	10
	UCC	9
	Underwritten NOI	10
	Underwritten Operating Expenses	10
	Underwritten Operating Revenues	10

 

    	-vi-

    	 

    

 

LOAN AGREEMENT

 

This Loan Agreement (this
"Agreement") is entered into as of September 7, 2012 between GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation ("Lender"), and COP - WESTERN AVE., LLC, a California limited liability company
("Borrower").

 

ARTICLE 1

 

CERTAIN DEFINITIONS

 

Section
1.1           Certain Definitions.
As used herein, the following terms have the meanings indicated:

 

"Affiliate"
means, as to any Person, (a) any corporation in which such Person or any partner, shareholder, director, officer, member,
or manager of such Person, at any level, directly or indirectly owns or controls more than ten percent (10%) of the beneficial
interest, (b) any partnership, joint venture or limited liability company in which such Person or any partner, shareholder,
director, officer, member, or manager of such Person, at any level, is a partner, joint venturer or member, (c) any trust
in which such Person or any partner, shareholder, director, officer, member or manager of such Person, at any level, or any individual
related by birth, adoption or marriage to such Person, is a trustee or beneficiary, (d) any entity of any type which is directly
or indirectly owned or controlled by (or is under common control with) such Person or any partner, shareholder, director, officer,
member or manager of such Person, at any level, (e) any partner, shareholder, director, officer, member, manager or employee
of such Person, or (f) any individual related by birth, adoption or marriage to any partner, shareholder, director, officer,
member, manager, or employee of such Person. Each Borrower Party shall be deemed to be an Affiliate of Borrower.

 

"Agreement"
means this Loan Agreement.

 

"Anti-Money
Laundering Laws" means those laws, regulations and sanctions, state and federal, criminal and civil, that (a) limit
the use of and/or seek the forfeiture of proceeds from illegal transactions; (b) limit commercial transactions with designated
countries or individuals believed to be terrorists, narcotics dealers or otherwise engaged in activities contrary to the interests
of the United States; (c) require identification and documentation of the parties with whom a Financial Institution conducts
business; or (d) are designed to disrupt the flow of funds to terrorist organizations. Such laws, regulations and sanctions
shall be deemed to include the Patriot Act, the Bank Secrecy Act, the Trading with the Enemy Act, 50 U.S.C. App. Section 1
et seq., the International Emergency Economic Powers Act, 50 U.S.C. Section 1701 et seq., and
the sanction regulations promulgated pursuant thereto by the OFAC, as well as laws relating to prevention and detection of money
laundering in 18 U.S.C. Sections 1956 and 1957.

 

"Assignment
of Rents and Leases" means the Assignment of Rents and Leases, executed by Borrower for the benefit of Lender, and
pertaining to leases of space in the Project.

 

    	-1-

    	 

    

 

"Bank Secrecy
Act" means the Bank Secrecy Act, 31 U.S.C. Sections 5311 et seq.

 

"Borrower
Party" means any Guarantor and any general partner or managing member in Borrower, at any level.

 

"Budget"
means the budget attached as Exhibit B showing total costs relating to the subject transaction, use of the initial
advance of the Loan, and amounts allocated for future advances (if any).

 

"Business
Day" means a day other than a Saturday, a Sunday, or a legal holiday on which national banks located in the State
of New York are not open for general banking business.

 

"Cash Liquidity
Balances" means Lien-free (a) cash balances maintained in the conventional forms of demand deposits and money
market account deposits, (b) monies held in cash reserves and other cash equivalents reasonably acceptable to Lender, (c) readily
marketable direct full faith and credit obligations of the United States of America or obligations unconditionally guaranteed by
the full faith and credit of the United States of America, in each case due within one year, (d) certificates of deposit issued
by any bank with combined capital, surplus and undivided profits of at least $500,000,000 (as of the date such certificate of deposit
is acquired), doing business in and incorporated under the laws of the United States of America or any State thereof, and whose
deposits are insured through the Federal Deposit Insurance Corporation, in each case due within one year, and (e) without
duplication, unfunded, unpledged and unencumbered capital commitments that are available to be called by Guarantor, without restriction,
in Guarantor's sole discretion. Notwithstanding the foregoing, Cash Liquidity Balances shall not include any reserves maintained
by Borrower with respect to the Project and shall not include any funds held in reserves or impounds maintained by Lender.

 

"Cash on Cash
Return" means, as of any date, the ratio, expressed as a percentage, of (a) Underwritten NOI to (b) the
outstanding principal balance of the Loans.

 

"Closing Date"
means the date on which Lender makes the initial advance of Loan proceeds.

 

"Collateral"
means the Project and all other "Mortgaged Property" described in the Mortgage, and any other property that at any time
secures the Loan or any portion thereof.

 

"Compliance
Certificate" means a certificate executed by Guarantor's chief financial officer, in scope and detail reasonably satisfactory
to Lender, certifying to Lender Guarantor's then-current Tangible Net Worth and Cash Liquidity Balances.

 

"Contract
Rate" has the meaning assigned in Article 2.

 

"Cornerstone
REIT" means Cornerstone Core Properties REIT, Inc., a Maryland corporation.

 

    	-2-

    	 

    

 

"Counterparty"
has the meaning assigned in Section 2.5.

 

"Debt"
means, for any Person, without duplication: (a) all indebtedness of such Person for borrowed money, for amounts drawn under
a letter of credit, or for the deferred purchase price of property for which such Person or any of its assets is liable or subject,
(b) all unfunded amounts under a loan agreement, letter of credit, or other credit facility for which such Person or any of
its assets would be liable or subject, if such amounts were advanced under the credit facility, (c) all amounts required to
be paid by such Person as a guaranteed payment to partners, members (or other equity holders) or a preferred or special dividend,
including any mandatory redemption of shares or interests, (d) all indebtedness guaranteed by such Person, directly or indirectly,
(e) all obligations under leases that constitute capital leases for which such Person or any of its assets is liable or subject,
and (f) all obligations of such Person under interest rate swaps, caps, floors, collars and other interest hedge agreements,
in each case whether such Person or any of its assets is liable or subject, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person otherwise assures a creditor against loss.

 

"Debt Service"
means the aggregate interest, fixed principal, and other payments due under the Loan for the period of time for which calculated,
provided that the interest component of such payments shall be reduced by amounts that would be payable (based on the then current
interest rate payable on the Loan) to Borrower under the Cap Agreement then in effect, provided (a) such Cap Agreement and
the Counterparty thereto comply with the requirements of Section 2.5 and (b) the benefits of such Cap
Agreement are pledged to Lender pursuant to an Interest Rate Cap Security Agreement. The foregoing calculation shall exclude payments
applied to escrows or reserves required by Lender under the Loan Documents.

 

"Debt Service
Coverage" means, as of any date, the ratio of Underwritten NOI to annualized Debt Service.

 

"Default Rate"
means the lesser of (a) the maximum per annum rate of interest allowed by applicable law, and (b) five percent (5%) per
annum in excess of the Contract Rate.

 

"Environmental
Laws" means any federal, state or local law (whether imposed by statute, ordinance, rule, regulation, administrative
or judicial order, or common law), now or hereafter enacted, governing health, safety, industrial hygiene, the environment or natural
resources, or Hazardous Materials, including, without limitation, such laws governing or regulating (a) the use, generation,
storage, removal, recovery, treatment, handling, transport, disposal, control, release, discharge of, or exposure to, Hazardous
Materials, (b) the transfer of property upon a negative declaration or other approval of a governmental authority of the environmental
condition of such property, or (c) requiring notification or disclosure of releases of Hazardous Materials or other environmental
conditions whether or not in connection with a transfer of title to or interest in property.

 

"Event of
Default" has the meaning assigned in Article 10.

 

    	-3-

    	 

    

 

"Financial
Institution" means a United States Financial Institution as defined in 31 U.S.C. Section 5312, as periodically
amended.

 

"Guarantors"
means the Persons, if any, executing a Guaranty, including Cornerstone REIT.

 

"Guaranty"
means the instruments of guaranty, if any, now or hereafter in effect from a Guarantor to Lender.

 

"Hazardous
Materials" means (a) petroleum or chemical products, whether in liquid, solid, or gaseous form, or any fraction
or by-product thereof, (b) asbestos or asbestos-containing materials, (c) polychlorinated biphenyls (pcbs), (d) radon
gas, (e) underground storage tanks, (f) any explosive or radioactive substances, (g) lead or lead-based paint, or
(h) any other substance, material, waste or mixture which is or shall be listed, defined, or otherwise determined by any governmental
authority to be hazardous, toxic, dangerous or otherwise regulated, controlled or giving rise to liability under any Environmental
Laws.

 

"Interest
Holder" has the meaning assigned in Section 8.1.

 

"Interest
Period" means (a) for the first Interest Period, the period from the Closing Date through the last day of the month
in which the Closing Date occurs, and (b) for each Interest Period thereafter, the 3-month period commencing on the first day of
the calendar month following the end of the preceding Interest Period through the last day of such 3-month period.

 

"Lender Investment
Claims" has the meaning assigned in Section 12.7.

 

"Libor Breakage
Amount" has the meaning assigned in Schedule 2.3(4).

 

"Libor Floor
Rate" means one-quarter percent (0.25%) per annum.

 

"Libor Rate"
means, for each Interest Period, the British Bankers Association LIBOR Rate (rounded upward to the nearest one-sixteenth of one
percent) listed on Reuters Screen LIBOR01 Page for U.S. Dollar deposits with a designated maturity of three (3) months, determined
as of 11:00 a.m. London Time on the date two Eurodollar Business Days prior to the first day of such Interest Period, provided
that (a) if Reuters publishes more than one (1) such rate, the average of such rates shall apply, or (b) if Reuters ceases to publish
such rate, or if in Lender's reasonable judgment the information contained on such page ceases to accurately reflect the rate offered
by leading banks in the London interbank market as reported by any publicly available source of similar market data selected by
Lender, the Libor Rate for such Interest Period shall be determined from such substitute financial reporting service as Lender
in its discretion shall determine. The term "Eurodollar Business Day" shall mean any Business Day on which
banks in the City of London are generally open for interbank or foreign exchange transactions.

 

    	-4-

    	 

    

 

"Lien"
means any interest, or claim thereof, in the Collateral securing an obligation owed to, or a claim by, any Person other than the
owner of the Collateral, whether such interest is based on common law, statute or contract, including the lien or security interest
arising from a deed of trust, mortgage, assignment, encumbrance, pledge, security agreement, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes. The term "Lien" shall include reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting the
Collateral.

 

"Loan"
means the loan to be made by Lender to Borrower under this Agreement and all other amounts evidenced or secured by the Loan Documents.

 

"Loan Documents"
means: (a) this Agreement, (b) the Note, (c) the Mortgage, (d) the Assignment of Rents and Leases, (e) UCC financing statements,
(f) the Subordination of Property Management Agreement, (g) each Guaranty, (h) such assignments of management agreements, contracts
and other rights as may be required by Lender, (i) any letter of credit provided to Lender in connection with the Loan, (j) all
other documents evidencing, securing, governing or otherwise pertaining to the Loan, and (k) all amendments, modifications, renewals,
substitutions and replacements of any of the foregoing.

 

"Loan Year"
means the period between the Closing Date and September 30, 2013 for the first Loan Year and the period between each succeeding
October 1 and September 30 until the Maturity Date.

 

"Loss Proceeds"
means amounts, awards or payments payable to Borrower or Lender in respect of all or any portion of the Project in connection with
a casualty or condemnation thereof (after the deduction therefrom and payment to Borrower and Lender, respectively, of any and
all reasonable out-of-pocket expenses incurred by Borrower and Lender in the recovery thereof, including all reasonable attorneys'
fees and disbursements, the fees of insurance experts and adjusters and the costs incurred in any litigation or arbitration with
respect to such casualty or condemnation) including proceeds from rental or business interruption insurance.

 

"LTV Ratio"
means, as of the date of determination, the ratio, expressed as a percentage, of (a) the outstanding principal balance of
the Loan as of such date, to (b) the value of the Project as of such date, as determined by Lender in its reasonable judgment
and in accordance with its customary underwriting practices and procedures in effect at the time of such determination for assets
of a similar nature to the Project.

 

"Management
Agreement" means that certain Real Estate Property Management Agreement dated as of December 10, 2008, between
Manager and Borrower with respect to the management of the Project by the Manager, together with any management agreements entered
into with future Managers in accordance with the terms of this Agreement.

 

"Manager"
means Essex Realty Management, Inc., a California corporation, which is the initial property manager of the Project under the Management
Agreement, together with any successor property managers appointed for the Project in accordance with the terms of this Agreement.

 

    	-5-

    	 

    

 

"Maturity
Date" means the earlier of (a) September 30, 2014, as such date may possibly be extended in accordance with
Section 2.3(3), or (b) any earlier date on which the entire Loan is required to be paid in full, by acceleration or
otherwise, under this Agreement or any of the other Loan Documents.

 

"Mortgage"
means the Deed of Trust, Security Agreement and Fixture Filing, executed by Borrower in favor of Lender, covering the Project.

 

"Net Cash
Flow" means, for any period, the amount by which Operating Revenues exceed the sum of (a) Operating Expenses,
(b) Debt Service paid during such period, (c) capital expenditures, tenant improvement costs and leasing commissions,
each approved by Lender and paid by Borrower during such period, (d) any actual payment into a working capital reserve maintained
by Borrower for the Project in an amount not to exceed $0.10, and (e) any actual payment into impounds, escrows, or reserves
required under the Loan Documents, except to the extent that any such payment is already included within the definition of Operating
Expenses. No deduction for capital expenditures shall be made until such expenditure is actually paid by Borrower or the reserve
amount is actually deposited with Lender. In addition, Net Cash Flow shall be increased by (i) any proceeds withdrawn from
reserves and impounds funded out of Operating Revenues to the extent such proceeds are not applied to Operating Expenses, and (ii) any
payments received under any Cap Agreement.

 

"Note"
means the Promissory Note of even date, in the stated principal amount of $9,620,000.00, executed by Borrower, and payable to the
order of Lender in evidence of the Loan, and all promissory notes delivered in substitution or exchange therefor, in each case
as the same may be consolidated, replaced, severed, modified, amended or extended from time to time in accordance with this Agreement.

 

"OFAC"
means the Office of Foreign Assets Control, Department of the Treasury.

 

"Operating
Expenses" means, for any period, all reasonable and necessary expenses of operating the Project in the ordinary course
of business which are paid in cash by Borrower during such period and which are directly associated with and fairly allocable to
the Project for the applicable period, including ad valorem real estate taxes and assessments, insurance premiums, utility charges,
regularly scheduled tax and insurance impounds paid to Lender, repair and maintenance costs, management fees and costs, wages,
salaries, personnel expenses, accounting, legal and other professional fees, fees and other expenses incurred by Lender and reimbursed
by Borrower under the Loan Documents and deposits to any capital replacement, leasing or other reserves required under the Loan
Documents. Notwithstanding the foregoing, Operating Expenses shall exclude Debt Service, capital expenditures, tenant improvement
costs, leasing commissions, any of the foregoing operating expenses which are paid from deposits to cash reserves and such deposits
were previously included as Operating Expenses, any payment or expense for which Borrower was or is to be reimbursed from Loss
Proceeds or proceeds of the Loan or by any third party, any sales, use, occupancy or other taxes on receipts for which Borrower
must account to any governmental authority, and any non-cash charges such as depreciation and amortization. For purposes of determining
Net Cash Flow only, any management fee or other expense payable to Borrower or to an Affiliate of Borrower shall be included as
an Operating Expense only with Lender's prior approval. Operating Expenses shall not include federal, state or local income taxes.

 

    	-6-

    	 

    

 

"Operating
Revenues" means, for any period, all cash receipts of Borrower during such period from the ownership and operation
of the Project or otherwise arising in respect of the Project after the date hereof which are properly allocable to the Project
for the applicable period, including receipts from leases and parking agreements, concession fees and charges, utility charges,
interest received on credit accounts, service fees and charges, license fees, any required pass-throughs and other reimbursements
paid by tenants under leases of any nature, other miscellaneous operating revenues and Loss Proceeds from rental or business interruption
insurance, but excluding (a) security deposits and earnest money deposits until they are forfeited by the depositor, (b) advance
rentals until they are earned, (c) proceeds from a sale or other disposition of the Project or any interest therein, (d) any
disbursements to Borrower from any impounds, escrows, or reserves required under the Loan Documents, and (e) any sales, use,
occupancy or other taxes on receipts for which Borrower must account to any governmental authority.

 

"Origination
Fee" has the meaning assigned in Section 2.3(5)

 

"Patriot Act"
means the USA PATRIOT Act of 2001, Pub. L. No. 107-56.

 

"Permitted
Encumbrances" has the meaning set forth in the Mortgage.

 

"Person"
means any individual, corporation, partnership, joint venture, association, joint stock company, trust, trustee, estate, limited
liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision
thereof, or any other form of entity.

 

"Potential
Default" means the occurrence of any event or condition which, with the giving of notice, the passage of time, or
both, would constitute an Event of Default.

 

"Project"
means an approximately 116,433 square foot industrial building, and all related facilities, amenities, fixtures, and personal property
owned by Borrower and any improvements now or hereafter located on the real property described in Exhibit A.

 

"Restoration
Threshold" means $350,000.

 

"Secondary
Market Transaction" has the meaning assigned in Section 12.9(2).

 

"Single Purpose
Entity" shall mean a Person (other than an individual, a government, or any agency or political subdivision thereof),
which (a) exists solely for the purpose of owning the Project, (b) conducts business only in its own name, (c) does
not engage in any business or have any assets unrelated to the Project, (d) does not have any Debt other than as permitted
by this Agreement, (e) has its own separate books, records and accounts (with no commingling of assets), (f) allocates
fairly and reasonably any overhead expenses that are shared with any Affiliate including paying for office space and services performed
by any employee of any Affiliate, (g) files its own tax returns, (h) holds itself out as being a Person separate
and apart from any other Person, and promptly corrects any known misunderstandings regarding its separate identity, (i) observes
corporate and partnership formalities independent of any other entity, and (j) otherwise constitutes a single purpose, bankruptcy
remote entity as determined by Lender.

 

    	-7-

    	 

    

 

"Site Assessment"
means an environmental engineering report for the Project prepared by an engineer engaged by Lender at Borrower's expense, and
in a manner satisfactory to Lender, based upon an investigation relating to and making appropriate inquiries concerning the existence
of Hazardous Materials on or about the Project, and the past or present discharge, disposal, release or escape of any such substances,
all consistent with ASTM Standard E1527-05 (or any successor thereto published by ASTM) or ASTM Standard E1903-97 (2002) (or
any successor thereto published by ASTM), as applicable, and other good customary and commercial practice.

 

"Specially
Designated National and Blocked Persons" means those Persons that have been designated by executive order or by the
sanction regulations of OFAC as Persons with whom U.S. Persons may not transact business or must limit their interactions to types
approved by OFAC.

 

"Spread Maintenance
Amount" means the amount equal to the product obtained by multiplying (a) the principal amount of the Loan being
prepaid by (b) the sum of 4.3% plus the positive difference (if any) between the Libor Floor Rate and the Libor Base Rate
by (c) the quotient obtained by dividing (i) the number of days from the date of such prepayment to (and including) September 30,
2013, by (ii) 360.

 

"Standard
Adjustments" means the following assumptions and adjustments to be made when calculating Underwritten NOI, Underwritten
Operating Expenses and Underwritten Operating Revenues:

 

(1)         an
occupancy rate equal to the lesser of (i) the market occupancy rate or (ii) the Project's actual occupancy rate; but
in no event more than a ninety-five percent (95%) occupancy rate;

 

(2)         capital
reserves of $0.10 per gross square foot;

 

(3)         a
management fee equal to the greater of the Project's actual management fee (as approved by Lender, if Lender's approval is required
under this Agreement) or three percent (3.0%) of Operating Revenues;

 

(4)         increases
in Operating Expenses estimated to occur during the twelve (12) months following the date of calculation due to, among other things,
inflation, projected increases in the Project's assessed value and compliance with Section 3.1 of this Agreement, as reasonably
determined by Lender; and

 

    	-8-

    	 

    

 

(5)         Operating
Revenues shall exclude, without limitation, (i) revenue from tenants (A) that are not physically occupying their leased
premises, (B) that are delinquent in the payment of their monetary obligations, or that are otherwise in default in a manner
that entitles the landlord to terminate their tenancy, (C) under month-to-month tenancies, (D) who are the subject of
any voluntary or involuntary bankruptcy, insolvency, liquidation, reorganization or similar proceeding (to the extent that such
tenant has not assumed such lease in bankruptcy), (E) then in a free rent period; provided, however, if any tenant's
lease has a remaining free rent period of nine (9) months or less as of the date of calculation, Operating Revenues shall include
the rent actually payable under such lease during the 12-month period following the date of calculation, (F) that exceeds
the then-current market rents for Comparable Projects (defined below), and (G) with leases that expire within six (6) months
following the date as of which Underwritten NOI is to be calculated, (ii) any interest income received or owed from any source
(except that Operating Revenues shall include payments received from tenants that are in the nature of rent even if such payments
are structured as interest payments for tax or other reasons), (iii) recovery from tenants of any amounts expended or reimbursed
by Borrower for tenant improvements, whether in the form of rent, loan repayment, or otherwise, (iv) lease termination fees
or payments, (v) Loss Proceeds (other than proceeds from rental or business interruption insurance), and (vi) any other
extraordinary or non-recurring revenue or expense items.

 

As used above, the "market
occupancy rate" means the average occupancy rate of industrial buildings that are similar in size and quality to the Project
and that are located in the Project's geographic market or sub-market area, all as determined by Lender ("Comparable
Projects").

 

"Subordination
of Property Management Agreement" means the Subordination of Property Management Agreement executed by the Manager
and Borrower in favor of Lender.

 

"Tangible
Net Worth" means total assets (excluding the value of Guarantor's direct or indirect interest in Borrower,
and excluding goodwill, patents, trademarks, trade names, organization expense, treasury stock, unamortized debt discount and expense,
deferred research and development costs, deferred marketing expenses, and other like intangibles) less total liabilities, including
accrued and deferred income taxes, and any reserves against assets, determined in accordance with generally accepted accounting
principles, consistently applied.

 

"Tax and Insurance
Escrow Reserve" has the meaning assigned in Section 3.4.

 

"Test Period"
means the 12-month period ending on the last day of the calendar month immediately preceding the calculation date.

 

"Transfer"
has the meaning assigned in Section 8.1.

  

    	-9-

    	 

    

 

"UCC"
means the Uniform Commercial Code as enacted and in effect in the state where the Project is located (and as it may from time to
time be amended); provided that, to the extent that the UCC is used to define any term in this Agreement or in any other Loan Document
and such term is defined differently in different Articles or Divisions of the UCC, the definition of such term contained in Article
or Division 9 shall govern; provided further, however, that if, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, Lender's Liens on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the state where the Project is located, the term "UCC"
shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for the purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

 

"Underwritten
NOI" means the amount by which Underwritten Operating Revenues exceed Underwritten Operating Expenses.

 

"Underwritten
Operating Expenses" means, for any Test Period, Operating Expenses for such Test Period, as determined and adjusted
by Lender to reflect the Standard Adjustments and otherwise in accordance with its then current audit policies and procedures for
properties similar to the Project.

 

"Underwritten
Operating Revenues" means, for any Test Period, Operating Revenues for the last calendar month of such Test Period,
times twelve, as determined and adjusted by Lender to reflect the Standard Adjustments and otherwise in accordance with its then
current audit policies and procedures for properties similar to the Project.

 

"U.S. Person"
means any United States citizen, any entity organized under the laws of the United States or its constituent states or territories,
or any entity, regardless of where organized, having its principal place of business within the United States or any of its territories.

 

ARTICLE 2

LOAN TERMS

 

Section
2.1           The Loan.
The Loan of up to NINE MILLION SIX HUNDRED TWENTY THOUSAND AND NO/100 DOLLARS ($9,620,000.00) shall be funded in one or more advances
and repaid in accordance with this Agreement. The initial advance of the Loan shall be in the amount of up to $8,900,000.00. The
initial advance and all subsequent advances for the items shown on the Budget shall be made upon Borrower's satisfaction of the
conditions for such advances described in Schedule 2.1. The Loan is not a revolving credit loan, and Borrower
is not entitled to any readvances of any portion of the Loan which it may (or is otherwise required to) prepay pursuant to the
provisions of this Agreement.

 

Section
2.2           Interest Rate; Late Charge.
During each Interest Period, the outstanding principal balance of the Loan (including any amounts added to principal under the
Loan Documents) shall bear interest at a rate of interest (the "Contract Rate"),
equal to the sum of four and three-tenths percent (4.30%) per annum plus the greater of (1) the Libor Rate in effect for
such Interest Period, or (2) the Libor Floor Rate. Interest owing for each month shall be computed on the basis of a fraction,
the denominator of which is three hundred sixty (360) and the numerator of which is the actual number of days elapsed from the
first day of such month (or, for the initial advance, from the date of such advance). Principal and other amortization payments
shall be applied to the Loan balance as and when actually received. If Borrower fails to pay any installment of interest or principal
within five (5) days of (and including) the date on which the same is due, Borrower shall pay to Lender a late charge on such
past-due amount, as liquidated damages and not as a penalty, equal to five percent (5%) of such amount, but not in excess of the
maximum amount of interest allowed by applicable law. The foregoing late charge is intended to compensate Lender for the expenses
incident to handling any such delinquent payment and for the losses incurred by Lender as a result of such delinquent payment.
Borrower agrees that, considering all of the circumstances existing on the date this Agreement is executed, the late charge represents
a reasonable estimate of the costs and losses Lender will incur by reason of late payment. Borrower and Lender further agree that
proof of actual losses would be costly, inconvenient, impracticable and extremely difficult to fix. Acceptance of the late charge
shall not constitute a waiver of the default arising from the overdue installment, and shall not prevent Lender from exercising
any other rights or remedies available to Lender. While any Event of Default exists, the Loan shall bear interest at the Default
Rate.

 

    	-10-

    	 

    

 

Section
2.3         Terms of Payment.
The Loan shall be payable as follows:

 

(1)         Interest.
On the Closing Date, Borrower shall make a payment of interest only for the first Interest Period. Thereafter, commencing on November 1,
2012, Borrower shall pay interest in arrears on the first day of each month until all amounts due under the Loan Documents are
paid in full.

 

(2)         Principal
Amortization. Commencing on November 1, 2013, and continuing on the first day of each month until all amounts due
under the Loan Documents are paid in full, Borrower shall make monthly principal amortization payments in accordance with this
Section 2.3(2), which payments shall be applied to the outstanding principal balance of the Loan. Lender shall calculate
the total amount of principal payments payable from November 1, 2013 to the Maturity Date based upon a 30-year amortization
schedule, an amortization period which begins on October 1, 2013, a fixed interest rate equal to the Contract Rate in effect
as of October 1, 2013 and the outstanding principal balance of the Loan as of October 1, 2013. The monthly amortization
payment shall equal the total amount of principal payable for such period (calculated as set forth above) divided by the number
of monthly payments during such period. The foregoing notwithstanding, upon any additional advance of Loan funds Lender shall recalculate
the amount of the monthly principal amortization payment owing for the remainder of the Loan term, based upon the new outstanding
principal balance and the Contract Rate then in effect, and such revised principal amortization payment shall be due commencing
on the first day of the month immediately following the month in which such additional advance or prepayment (as applicable) is
made. In addition, if the term of the Loan is extended in accordance with Section 2.3(3), then Lender shall recalculate
the amount of the monthly principal amortization payment owing during such extension period, based upon the then-remaining portion
of the 30-year amortization schedule, the outstanding principal balance of the Loan and the Contract Rate in effect as of the first
day of such period. Lender's determination of the amount of the monthly amortization payments to be made by Borrower under this
Agreement shall be conclusive absent manifest error.

 

    	-11-

    	 

    

 

(3)         Maturity.
On the Maturity Date, Borrower shall pay to Lender all outstanding principal, accrued and unpaid interest, and any other amounts
due under the Loan Documents. Subject to the provisions of this Section 2.3(3), Borrower, at its option, may extend
the term of the Loan for one (1) additional 12-month period. Borrower's right to extend the term of the Loan is subject to the
satisfaction of each of the following conditions:

 

(a)          Borrower
shall deliver to Lender a written request to extend the term of the Loan (the "Extension Request") at least
sixty (60) days, but not more than ninety (90) days, before the then existing Maturity Date.

 

(b)          No
Event of Default or Potential Default has occurred and is continuing on the date on which Borrower delivers the Extension Request
to Lender, or on the date the extension period commences.

 

(c)          Borrower
shall have paid to Lender, in immediately available funds, an extension fee equal to one-half percent (0.50%) of the outstanding
principal balance of the Loan as of the first day of such extension.

 

(d)          During
the extended term of the Loan, all terms and conditions of the Loan Documents (other than the original Maturity Date) shall continue
to apply except that Borrower shall have no further right to extend the term of the Loan.

 

(e)          The
Cash on Cash Return equals or exceeds nine percent (9.0%), and the Debt Service Coverage (based on the Contract Rate which will
be in effect upon commencement of such extension period) equals or exceeds 1.30:1.0; provided, however, that if, based on the outstanding
Loan balance as of the date of calculation, Borrower fails to satisfy the foregoing Cash on Cash Return and/or Debt Service Coverage
condition(s), Borrower may satisfy such condition(s) by paying down the outstanding Loan balance to an amount that would result
in such condition(s) being satisfied.

 

(f)          Borrower
shall have delivered to Lender (i) a copy of a Cap Agreement with a term through the end of the extension period, a notional
amount of not less than the then outstanding principal balance of the Loan, and a strike price that does not exceed the rate which,
when included in the Contract Rate, would result in a Debt Service Coverage of 1.05:1.0 (and that otherwise complies with the requirements
of Section 2.5, including the rating of the Counterparty), and (ii) an Interest Rate Cap Security Agreement
covering such Cap Agreement, duly executed by Borrower, together with the consent of the Counterparty to the Interest Rate Cap
Security Agreement.

 

    	-12-

    	 

    

 

(g)          Borrower
shall cause to be delivered to Lender at Borrower's expense an updated Site Assessment satisfactory to Lender, which shall show
no adverse matters or items not reflected in the Site Assessment obtained in connection with the closing of the Loan (and, as to
any adverse matters or items reflected in the original Site Assessment, none shall have worsened).

 

(h)          Borrower
shall cause to be delivered to Lender at Borrower's expense an updated engineering and an updated seismic report, each report satisfactory
to Lender, which shall show no adverse matters or items not reflected in the engineering report or the seismic report obtained
in connection with the closing of the Loan (and, as to any adverse matters or items reflected in the original engineering report
or the seismic report, none shall have worsened).

 

(i)          Borrower
shall deliver or cause Guarantor to deliver a Compliance Certificate and such other evidence reasonably satisfactory to Lender
that Guarantor's Tangible Net Worth and Cash Liquidity Balances equal or exceed the amounts set forth in Section 10.9.

 

(j)          Borrower
shall execute and deliver such other instruments, certificates, opinions of counsel and documentation as Lender shall reasonably
request in order to preserve, confirm or secure the Liens and security granted to Lender by the Loan Documents, including any amendments,
modifications or supplements to any of the Loan Documents, endorsements to Lender's title insurance policy and, if required by
Lender, estoppels and other certificates.

 

(k)          Borrower
shall pay all costs and expenses incurred by Lender in connection with such extension of the Loan, including Lender's attorneys'
fees and disbursements.

 

(4)         Prepayment.
During the first Loan Year (the "Prepayment Premium Period"), Borrower may prepay the Loan, in whole but
not in part, upon not less than thirty (30) days' prior written notice to Lender and upon payment of a prepayment premium
equal to the Spread Maintenance Amount. Thereafter, upon not less than thirty (30) days' prior written notice to Lender, Borrower
may prepay the Loan, in whole but not in part, without any prepayment premium (subject, however, to the payment of the Libor Breakage
Amount, if any, as required below). If the Loan is prepaid, in whole or in part, including pursuant to a casualty or condemnation,
each such prepayment shall be made to Lender together with (a) the accrued and unpaid interest on the principal amount prepaid,
(b) the Libor Breakage Amount, if any, calculated as provided in Schedule 2.3(4), and (c) the Exit Fee. If
the Loan is accelerated during the Prepayment Premium Period for any reason other than casualty, condemnation or pursuant to Section
8.5, Borrower shall pay, in addition to the amounts described in the preceding sentence, the Spread Maintenance Amount. The
prepayment premium required by this Section 2.3(4) is acknowledged by Borrower to be partial compensation to Lender
for the cost of reinvesting the Loan proceeds and for the loss of the contracted rate of return on the Loan. Furthermore, Borrower
acknowledges that the loss that may be sustained by Lender as a result of such a prepayment by Borrower is not susceptible of precise
calculation and the prepayment premium represents the good faith effort of Borrower and Lender to compensate Lender for such loss.
By initialing this provision where indicated below, Borrower waives any rights it may have under California Civil Code Section 2954.10,
or any successor statute, and Borrower confirms that Lender's agreement to make the Loan at the interest rate(s) and on the other
terms set forth herein constitutes adequate and valuable consideration, given individual weight by Borrower, for the prepayment
provisions set forth in this Section 2.3(4).

 

Borrower's Initials

 

    	-13-

    	 

    

 

(5)         Fees.
As partial consideration for Lender's agreement to make the Loan, Borrower shall pay to Lender (a) a loan origination fee
of $96,200.00 (the "Origination Fee"), and (b) an exit fee equal to $96,200.00 (the "Exit
Fee"). The Origination Fee shall be payable in full on or before the Closing Date and the Exit Fee shall be payable
in full upon the first to occur of (i) the Maturity Date, or (ii) repayment of the Loan in full, including any repayment
from Loss Proceeds or condemnation proceeds; provided, however, that upon any partial prepayment of the Loan from Loss Proceeds
or condemnation proceeds, Borrower shall pay to Lender a portion of the Exit Fee equal to one percent (1.0%) of the amount of the
prepayment.

 

(6)         Application
of Payments. All payments received by Lender under the Loan Documents shall be applied to the following, in such order
as Lender may elect in its sole discretion: (a) to any fees and expenses due to Lender under the Loan Documents; (b) to
any Default Rate interest or late charges; (c) to accrued and unpaid interest; (d) to amounts owed under any reserves or escrows
required under the Loan Documents; and (e) to the principal sum and other amounts due under the Loan Documents. Prepayments
of principal, if permitted or accepted, shall be applied against amounts owing in inverse order of maturity.

 

Section
2.4           Security.
The Loan shall be secured by the Mortgage creating a first Lien on the Project, the Assignment of Rents and Leases and the other
Loan Documents. As further security for the Loan, Borrower agrees:

 

(1)         to
fund the Capital Replacements Reserve in accordance with Schedule 2.4(1); and

 

(2)         to
fund the Tax and Insurance Escrow Reserve in accordance with Section 3.4.

 

    	-14-

    	 

    

 

Section
2.5           Interest
Rate Cap Agreement. On or before the Closing Date, Borrower shall enter into and at all times thereafter maintain
an interest rate cap agreement ("Cap Agreement") in connection with the Loan, which Cap Agreement shall
have (1) during the first Loan Year, a notional amount not less than the outstanding Loan balance and shall have a strike price
of, or shall otherwise cap Borrower's Libor Rate exposure at, (1) 1.55% during the first Loan Year and (2) 3.44% during
the second Loan Year. The form of the Cap Agreement required pursuant to this Section, and the counterparty to the Cap Agreement
(the "Counterparty"), shall be reasonably satisfactory to Lender (and shall otherwise satisfy the ratings
criteria set forth below). Substantially concurrently with entering into the Cap Agreement, Borrower shall deliver to Lender an
Interest Rate Cap Security Agreement, duly executed and delivered by Borrower in favor of Lender, together with the consent of
the Counterparty to such collateral assignment. The Counterparty must have long-term debt obligations rated not lower than "A-"
by Standard & Poor's and "A3" by Moody's, or a Counterparty Rating not lower than "A-" by Standard &
Poor's and "A3" by Moody's. In the event of any downgrade or withdrawal of the Counterparty rating below A- from Standard
& Poor's or below A3 from Moody's, Borrower shall replace the Cap Agreement with a replacement Cap Agreement with an acceptable
Counterparty not later than ten (10) Business Days following receipt of notice from Counterparty or Lender of such downgrade or
withdrawal, which substitute Cap Agreement shall otherwise comply with the foregoing provisions of this Section.

 

ARTICLE 3

INSURANCE, CONDEMNATION, AND IMPOUNDS

 

Section
3.1          Insurance.
Borrower shall maintain insurance as follows:

 

(1)         Property;
Business Interruption. Borrower shall keep the Project insured against damage by fire and the other hazards covered by
a standard extended coverage and all-risk insurance policy for the full insurable value thereof on a replacement cost claim recovery
basis with a deductible not to exceed $25,000 (without reduction for depreciation or co-insurance and without any exclusions or
reduction of policy limits for acts of domestic and foreign terrorism or other specified action/inaction), and shall maintain boiler
and machinery insurance, sinkhole insurance, acts of domestic and foreign terrorism endorsement coverage and such other property
insurance as reasonably required by Lender. Lender reserves the right to require from time to time the following additional insurance:
flood, earthquake, windstorm, worker's compensation, building law or ordinance and any additional insurance which may be reasonably
required by Lender; provided, however, that in determining whether earthquake insurance will be required, Lender shall evaluate
the Project in a manner that is substantially similar to the manner in which it evaluates substantially similar projects with substantially
similar seismic risk profiles. Borrower shall keep the Project insured against loss by flood if the Project is located currently
or at any time in the future in an area identified by the Federal Emergency Management Agency as an area having special flood hazards
in an amount at least equal to the lesser of (a) the maximum amount of the Loan or (b) the maximum limit of coverage available
(i) under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform
Act of 1994 (as such acts may from time to time be amended) or (ii) through such other flood insurance provider as Lender may approve
in its sole discretion. Any such flood insurance policy shall be issued in accordance with the requirements and current guidelines
of the Federal Insurance Administration. Borrower shall maintain business interruption insurance, including use and occupancy,
rental income loss and extra expense, against all periods covered by Borrower's property insurance for a limit equal to twelve
(12) calendar months' exposure, all without any exclusions or reduction of policy limits for acts of domestic and foreign terrorism
or other specified action/inaction. Borrower shall not maintain any separate or additional insurance which is contributing in the
event of loss unless it is properly endorsed and otherwise satisfactory to Lender in all respects. The proceeds of insurance paid
on account of any damage or destruction to the Project shall be paid to Lender to be applied as provided in Section 3.2.

 

    	-15-

    	 

    

 

(2)         Liability.
Borrower shall maintain (a) commercial general liability insurance with respect to the Project providing for limits of liability
of not less than $5,000,000 for both injury to or death of a person and for property damage per occurrence, and (b) other
liability insurance as reasonably required by Lender.

 

(3)         Form
and Quality. All insurance policies shall be endorsed in form and substance acceptable to Lender to name Lender as an additional
insured, loss payee or mortgagee thereunder, as its interest may appear, with loss payable to Lender, without contribution, under
a standard New York (or local equivalent) mortgagee clause. All such insurance policies and endorsements shall be fully paid for,
shall be issued by appropriately licensed insurance companies acceptable to Lender with a rating of "A-:IX" or better
as established by A.M. Best's Rating Guide, shall contain deductibles not to exceed $25,000 (with no increased deductible for acts
of domestic or foreign terrorism or other specified action/inaction), and shall be in such form, and shall contain such provisions
and expiration dates, as are acceptable to Lender. Each policy shall provide that such policy may not be canceled or materially
changed except upon thirty (30) days' prior written notice of intention of non-renewal, cancellation or material change to Lender
and that no act or thing done by Borrower shall invalidate any policy as against Lender. Blanket policies shall not be permitted
unless the terms and conditions of the coverage afforded thereunder are acceptable to Lender in its reasonable discretion. Lender
shall have the right to periodically evaluate the continuing acceptability of any previously approved blanket policies and to require
replacement insurance if any blanket policies are no longer acceptable as determined by Lender in its sole discretion. If Borrower
fails to maintain insurance in compliance with this Section 3.1, Lender may obtain such insurance and pay the premium
therefor and Borrower shall, on demand, reimburse Lender for all expenses incurred in connection therewith.

 

(4)         Assignment.
Borrower shall assign the policies or proofs of insurance to Lender, in such manner and form that Lender and its successors and
assigns shall at all times have and hold the same as security for the payment of the Loan. If requested by Lender, Borrower shall
deliver copies of all original policies certified to Lender by the insurance company or authorized agent as being true copies,
together with the endorsements required hereunder. If Borrower elects to obtain any insurance which is not required under this
Agreement (including earthquake insurance), all related insurance policies shall be endorsed in compliance with Section 3.1(3),
such additional insurance shall be renewed during the term of the Loan unless Lender provides its prior, written authorization.
From time to time upon Lender's request, Borrower shall identify to Lender all insurance maintained by Borrower with respect to
the Project. All Loss Proceeds shall be delivered directly to Lender, and shall be applied in accordance with Section 3.2.
The Loss Proceeds coming into the possession of Lender shall not be deemed trust funds, and Lender shall be entitled to apply such
proceeds as herein provided.

 

    	-16-

    	 

    

 

(5)         Adjustments.
Borrower shall give immediate written notice of any loss to the insurance carrier and to Lender. Borrower hereby irrevocably authorizes
and empowers Lender, as attorney-in-fact for Borrower coupled with an interest, to notify any of Borrower's insurance carriers
to add Lender as a loss payee, mortgagee insured or additional insured, as the case may be, to any policy maintained by Borrower
(regardless of whether such policy is required under this Agreement), to make proof of loss, to adjust and compromise any claim
under insurance policies, to appear in and prosecute any action arising from such insurance policies, to collect and receive Loss
Proceeds (and endorse, on Borrower's behalf, all checks, drafts and other negotiable demand instruments payable to Borrower, or
to Borrower and Lender jointly), and to deduct therefrom Lender's expenses incurred in the collection of such Loss Proceeds. Nothing
contained in this Section 3.1(5), however, shall require Lender to incur any expense or take any action hereunder.

 

Section
3.2         Use and Application of Loss Proceeds.
Lender shall apply Loss Proceeds (excluding proceeds from rental or business interruption insurance) to costs of restoring the
Project or the Loan as follows:

 

(1)         if
the loss is less than or equal to the Restoration Threshold, Lender shall apply the Loss Proceeds to restoration provided (a) no
Event of Default or Potential Default exists, and (b) Borrower promptly commences and is diligently pursuing restoration of
the Project;

 

(2)         if
the loss exceeds the Restoration Threshold, but is not more than twenty-five percent (25%) of the replacement value of the improvements
(for projects containing multiple phases or stand-alone structures, such calculation to be based on the damaged phase or structure,
not the project as a whole), Lender shall apply the Loss Proceeds to restoration provided that at all times during such restoration
(a) no Event of Default or Potential Default exists; (b) Lender determines that there are sufficient funds available
to restore and repair the Project to a condition approved by Lender; (c) Lender determines that the Underwritten NOI during
restoration will be sufficient to pay Debt Service during restoration; (d) Lender determines (based on leases which will remain
in effect after restoration is complete if the Project is not a multi-family project) that after restoration the Debt Service Coverage
and the Cash on Cash Return will be at least equal to 1.36:1.0 and 6.6%, respectively (if the restoration is projected to be completed
prior to the original Maturity Date), or 1.30:1.0 and 9.0%, respectively (if the restoration is projected to be completed during
the extension term); (e) Lender determines that the LTV Ratio after restoration will not exceed 75%; (f) Lender determines
that restoration and repair of the Project to a condition approved by Lender will be completed within six months after the date
of loss or casualty and in any event ninety (90) days prior to the Maturity Date; (g) Borrower promptly commences and
is diligently pursuing restoration of the Project; and (h) the Project after the restoration will be in compliance with and
permitted under all applicable zoning, building and land use laws, rules, regulations and ordinances;

 

    	-17-

    	 

    

 

(3)         if
the conditions set forth above are not satisfied or the loss exceeds the maximum amount specified in Section 3.2(2) above,
in Lender's sole discretion, Lender may apply any Loss Proceeds it may receive to the payment of amounts owing under the Loan Documents
in such order and manner as Lender in its sole discretion determines or allow all or a portion of such Loss Proceeds to be used
for the restoration of the Project; and

 

(4)         Loss
Proceeds applied to restoration will be disbursed on receipt of satisfactory plans and specifications, contracts and subcontracts,
schedules, budgets, lien waivers and architects' certificates, and otherwise in accordance with prudent commercial construction
lending practices for construction loan advances, including, as applicable, the advance conditions under Schedule 2.1.
Any Loss Proceeds remaining after payment of all restoration costs shall be applied by Lender to the Loan balance or, at Lender's
sole option, remitted to Borrower.

 

Section
3.3         Condemnation Awards.
Borrower shall immediately notify Lender of the institution of any proceeding for the condemnation or other taking of the Project
or any portion thereof. Lender may participate in any such proceeding and Borrower will deliver to Lender all instruments necessary
or required by Lender to permit such participation. Without Lender's prior consent, Borrower (1) shall not agree to any compensation
or award, and (2) shall not take any action or fail to take any action which would cause the compensation to be determined.
All awards and compensation for the taking or purchase in lieu of condemnation of the Project or any part thereof are hereby assigned
to and shall be paid to Lender. Borrower authorizes Lender to collect and receive such awards and compensation, to give proper
receipts and acquittances therefor, and in Lender's sole discretion to apply the same toward the payment of the Loan, notwithstanding
that the Loan may not then be due and payable, or to the restoration of the Project; however, if the award is less than or equal
to $100,000 and Borrower requests that such proceeds be used for non-structural site improvements (such as landscape, driveway,
walkway and parking area repairs) required to be made as a result of such condemnation, Lender will apply the award to such restoration
in accordance with disbursement procedures applicable to insurance proceeds provided there exists no Potential Default or Event
of Default. Borrower, upon request by Lender, shall execute all instruments requested to confirm the assignment of the awards
and compensation to Lender, free and clear of all liens, charges or encumbrances.

 

    	-18-

    	 

    

 

Section
3.4           Impounds. On the first day of each month,
Borrower shall pay to Lender, for deposit into a reserve established by Lender (the "Tax and Insurance Escrow Reserve"),
one-twelfth (1/12th) of the annual charges for ground or other rent, if any (but only if such rent is due less often than monthly
or, regardless of payment frequency, if Borrower has failed to make one or more of such payments), insurance premiums and real
estate taxes, assessments and similar charges relating to the Project. At or before the initial advance of the Loan, Borrower
shall deliver to Lender, for deposit in the Tax and Insurance Escrow Reserve, a sum of money which together with the monthly installments
will be sufficient to make each of such payments thirty (30) days prior to the date any delinquency or penalty becomes due with
respect to such payments. The amount of the monthly installments shall be determined on the basis of Lender's estimate from time
to time of the charges for the current year (after giving effect to any reassessment or, at Lender's election, on the basis of
the charges for the prior year, with adjustments when the charges are fixed for the then current year). All funds deposited in
the Tax and Insurance Escrow Reserve shall be held by Lender, without interest, and may be commingled with Lender's general funds.
Borrower hereby grants to Lender a security interest in all funds so deposited in the Tax and Insurance Escrow Reserve for the
purpose of securing the Loan. While an Event of Default exists, the funds held in the Tax and Insurance Escrow Reserve may be
applied in payment of the charges for which such funds have been deposited, or to the payment of the Loan or any other charges
affecting the security of Lender, as Lender may elect, but no such application shall be deemed to have been made by operation
of law or otherwise until actually made by Lender. Borrower shall furnish Lender with bills for the charges for which the Tax
and Insurance Escrow Reserve funds are required at least thirty (30) days prior to the date on which the charges first become
payable. If at any time the amount on deposit in the Tax and Insurance Escrow Reserve, together with the monthly installments
to be paid by Borrower before such charges are payable, is insufficient to pay such charges, Borrower shall pay any deficiency
to Lender immediately upon demand, for deposit in the Tax and Insurance Escrow Reserve. Lender shall pay such charges when the
amount on deposit in the Tax and Insurance Escrow Reserve is sufficient to pay such charges and Lender has received a bill for
such charges.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

 

Borrower represents and
warrants to Lender that:

 

Section
4.1           Organization and Power. Borrower and
each Borrower Party is duly organized, validly existing and in good standing under the laws of the state of its formation or existence,
and is in compliance with all legal requirements applicable to doing business in the state in which the Project is located. Borrower
is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code. Borrower and each
Borrower Party has only one state of incorporation or organization, which is set forth in Schedule 4.1. All other
information regarding Borrower and each Borrower Party contained in Schedule 4.1, including the ownership structure
of Borrower and its constituent entities, is true and correct as of the Closing Date.

 

Section
4.2           Validity of Loan Documents. The execution,
delivery and performance by Borrower and each Borrower Party of the Loan Documents: (1) are duly authorized and do not require
the consent or approval of any other party or governmental authority which has not been obtained; and (2) will not violate
any law or result in the imposition of any lien, charge or encumbrance upon the assets of any such party, except as contemplated
by the Loan Documents. The Loan Documents constitute the legal, valid and binding obligations of Borrower and each Borrower Party,
enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, or similar laws generally
affecting the enforcement of creditors' rights.

 

    	-19-

    	 

    

 

Section
4.3         Liabilities; Litigation; Other Secured Transactions.

 

(1)         The
financial statements delivered by Borrower and Guarantor are true and correct with no significant change since the date of preparation.
Except as disclosed in such financial statements, there are no liabilities (fixed or contingent) affecting the Project, Borrower
or any Borrower Party. There is no litigation, administrative proceeding, investigation or other legal action (including any proceeding
under any state or federal bankruptcy or insolvency law) pending or, to the knowledge of Borrower, threatened, against the Project,
Borrower or any Borrower Party which if adversely determined could have a material adverse effect on such party, the Project or
the Loan.

 

(2)         Borrower
is not, and has not been, bound (whether as a result of a merger or otherwise) as a debtor under a pledge or security agreement
entered into by another Person, which has not heretofore been terminated.

 

Section
4.4         Taxes and Assessments. The Project is
comprised of one or more parcels, each of which constitutes a separate tax lot and none of which constitutes a portion of any
other tax lot. There are no pending or, to Borrower's best knowledge, proposed, special or other assessments for public improvements
or otherwise affecting the Project, nor are there any contemplated improvements to the Project that may result in such special
or other assessments.

 

Section
4.5         Other Agreements; Defaults. Neither
Borrower nor any Borrower Party is a party to any agreement or instrument or subject to any court order, injunction, permit, or
restriction which might adversely affect the Project or the business, operations, or condition (financial or otherwise) of Borrower
or any Borrower Party. Neither Borrower nor any Borrower Party is in violation of any agreement which violation would have an
adverse effect on the Project, Borrower, or any Borrower Party or Borrower's or any Borrower Party's business, properties, or
assets, operations or condition, financial or otherwise.

 

Section
4.6         Compliance with Law; Project Condition.

 

(1)         Borrower
and each Borrower Party have all requisite licenses, permits, franchises, qualifications, certificates of occupancy or other governmental
authorizations to own, lease, occupy and operate the Project and carry on its business. The Project is in compliance with all applicable
zoning, subdivision, building and other legal requirements and is free of structural defects. All of the Project's building systems
and structural components are in good working order, subject to ordinary wear and tear. To Borrower's knowledge, no structural
or other material defects or damage in the Project exists, whether latent or otherwise, and Borrower has not received written notice
from any insurance company or bonding company of any defects or inadequacies in the Project, or any part thereof, which would adversely
affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination
or threatened termination of any policy of insurance or bond. The Project does not constitute, in whole or in part, a legally non-conforming
use under applicable legal requirements.

 

    	-20-

    	 

    

 

(2)         No
condemnation has been commenced or, to Borrower's knowledge, is contemplated with respect to all or any portion of the Project
or for the relocation of roadways providing access to the Project.

 

(3)         The
Project has adequate rights of access to public ways and is served by adequate water, sewer, sanitary sewer and storm drain facilities.
All public utilities necessary or convenient to the full use and enjoyment of the Project are located in the public right-of-way
abutting the Project, and all such utilities are connected so as to serve the Project without passing over other property, except
to the extent such other property is subject to a perpetual easement for such utility benefiting the Project. All roads necessary
for the full utilization of the Project for its current purpose have been completed and dedicated to public use and accepted by
all governmental authorities.

 

Section
4.7         Location of Borrower. Borrower's principal
place of business and chief executive offices are located at the address stated in Section 12.1 and, except as otherwise
set forth in Schedule 4.1, Borrower at all times has maintained its principal place of business and chief executive
office at such location or at other locations within the same state.

 

Section
4.8          ERISA.

 

(1)         As
of the Closing Date and throughout the term of the Loan, (a) Borrower is not and will not be an "employee benefit plan"
as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
which is subject to Title I of ERISA, and (b) the assets of Borrower do not and will not constitute "plan assets"
of one or more such plans for purposes of Title I of ERISA.

 

(2)         As
of the Closing Date and throughout the term of the Loan (a) Borrower is not and will not be a "governmental plan"
within the meaning of Section 3(32) of ERISA and (b) transactions by or with Borrower are not and will not be subject
to state statutes applicable to Borrower regulating investments of and fiduciary obligations with respect to governmental plans.

 

(3)         Borrower
has no employees.

 

Section
4.9          Margin Stock.
No part of proceeds of the Loan will be used for purchasing or acquiring any "margin stock" within the meaning of Regulations T,
U or X of the Board of Governors of the Federal Reserve System.

 

Section
4.10       Tax Filings.
Borrower and each Borrower Party have filed (or have obtained effective extensions for filing) all federal, state and local tax
returns required to be filed and have paid or made adequate provision for the payment of all federal, state and local taxes, charges
and assessments payable by Borrower and each Borrower Party, respectively.

 

    	-21-

    	 

    

 

Section
4.11         Solvency. Giving effect to the Loan, the fair saleable
value of Borrower's assets exceeds and will, immediately following the making of the Loan, exceed Borrower's total liabilities,
including, without limitation, subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value of Borrower's
assets is and will, immediately following the making of the Loan, be greater than Borrower's probable liabilities, including the
maximum amount of its contingent liabilities on its Debts as such Debts become absolute and matured. Borrower's assets do not
and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it will, incur Debts and liabilities
(including contingent liabilities and other commitments) beyond its ability to pay such Debts as they mature (taking into account
the timing and amounts of cash to be received by Borrower and the amounts to be payable on or in respect of obligations of Borrower).
Except as expressly disclosed to Lender in writing, no petition in bankruptcy has been filed by or against Borrower or any Borrower
Party in the last seven (7) years, and neither Borrower nor any Borrower Party in the last seven (7) years has ever
made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors. Neither Borrower
nor any Borrower Party is contemplating either the filing of a petition by it under state or federal bankruptcy or insolvency
laws or the liquidation of all or a major portion of its assets or property, and neither Borrower nor any Borrower Party has knowledge
of any Person contemplating the filing of any such petition against it.

 

Section
4.12         Full and Accurate Disclosure. No statement of fact
made by or on behalf of Borrower or any Borrower Party in this Agreement or in any of the other Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not
misleading. There is no fact presently known to Borrower which has not been disclosed to Lender which adversely affects, nor as
far as Borrower can foresee, might adversely affect, the Project or the business, operations or condition (financial or otherwise)
of Borrower or any Borrower Party. All information supplied by Borrower regarding any other Collateral is accurate and complete
in all material respects. All evidence of Borrower's and each Borrower Party's identity provided to Lender is genuine, and all
related information is accurate.

 

Section
4.13         Single Purpose Entity. Borrower is and has at all
times since its formation been a Single Purpose Entity.

 

Section
4.14         Management Agreement. The Management Agreement
is the only management agreement in existence with respect to the operation or management of the Project. The copy of the Management
Agreement delivered to Lender is a true and correct copy, and such agreement has not been amended or modified. Neither party to
such agreement is in default under such agreement and the Manager has no defense, offset right or other right to withhold performance
under or terminate such agreement.

 

    	-22-

    	 

    

 

Section
4.15         No Conflicts. The execution, delivery and performance
of this Agreement and the other Loan Documents by Borrower will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than pursuant to the
Loan Documents) upon any of the property or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of trust,
loan agreement, operating agreement or other agreement or instrument to which Borrower is a party or by which any of Borrower's
property or assets is subject, nor will such action result in any violation of the provisions of any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction over Borrower or any of Borrower's properties or
assets, and any consent, approval, authorization, order, registration or qualification of or with any court or any such regulatory
authority or other governmental agency or body required for the execution, delivery and performance by Borrower of this Agreement
or any other Loan Documents has been obtained and is in full force and effect.

 

Section
4.16         Title. Borrower has good, marketable and insurable title
to the Project, free and clear of all Liens whatsoever, except for the Permitted Encumbrances and such other Liens as are permitted
pursuant to the Loan Documents and has rights and the power to transfer each item of Collateral upon which it purports to grant
a Lien under the Mortgage or any of the other Loan Documents. The Mortgage creates (and upon the recordation thereof and of any
related financing statements there will be perfected) (1) a valid Lien on the Project, subject only to Permitted Encumbrances
and (2) security interests in and to, and collateral assignments of, all personalty (including the leases), all in accordance
with the terms thereof, in each case subject only to any applicable Permitted Encumbrances and such other Liens as are permitted
pursuant to the Loan Documents. There are no claims for payment for work, labor or materials affecting the Project which are or
may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents. None of the Permitted Encumbrances,
individually or in the aggregate, materially interfere with the benefits of the security intended to be provided by the Mortgage
and this Agreement, materially and adversely affect the value of the Project, impair the use or operations of the Project or impair
Borrower's ability to pay its obligations in a timely manner.

 

Section
4.17         Use of Project. The Project is being, and will
continue to be, used exclusively for flex/industrial and other appurtenant and related uses.

 

Section
4.18         Flood Zone. No portion of the improvements comprising
the Project is located in an area identified by the Secretary of Housing and Urban Development or any successor thereto as an
area having special flood hazards pursuant to the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973
or the National Flood Insurance Act of 1994, as amended, or any successor law.

 

Section
4.19         Insurance. Borrower has obtained and has delivered
to Lender evidence of all of the insurance policies for the Project reflecting the insurance coverages, amounts and other insurance
requirements set forth in this Agreement. No claims have been made under any such policy, and no Person, including Borrower, has
done, by act or omission, anything which would impair the coverage of any such policy.

 

    	-23-

    	 

    

 

  

 

Section 4.20         Filing
and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable legal requirements currently in effect in connection with the transfer of the
Project to Borrower or any transfer of a controlling interest in Borrower have been paid. All mortgage, mortgage recording, stamp,
intangible or other similar tax required to be paid by any Person under applicable legal requirements currently in effect in connection
with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including
the Mortgage, have been paid and, under current legal requirements, the Mortgage is enforceable in accordance with its terms by
Lender or any subsequent holder thereof, subject to applicable bankruptcy, insolvency, or similar laws generally affecting the
enforcement of creditors' rights.

 

Section 4.21         Investment
Company Act. Borrower is not (1) an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended; (2) a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (3) subject to any other federal
or state law or regulation which purports to restrict or regulate its ability to borrow money.

 

ARTICLE 5

 

ENVIRONMENTAL MATTERS

 

Section 5.1           Representations
and Warranties on Environmental Matters. Borrower represents and warrants to Lender that, to Borrower's knowledge,
except as set forth in the Site Assessment, (1) no Hazardous Material is now or was formerly used, stored, generated, manufactured,
installed, disposed of or otherwise present at or about the Project or any property adjacent to the Project (except for cleaning
and other products currently used in connection with the routine maintenance or repair of the Project, and the generation of a
small amount of lead by Fujitsu Ten Corp. of America as disclosed in Section 58 of its lease with Borrower, in each case
in full compliance with Environmental Laws), (2) all permits, licenses, approvals and filings required by Environmental Laws have
been obtained, and the use, operation and condition of the Project do not, and did not previously, violate any Environmental Laws,
(3) no civil, criminal or administrative action, suit, claim, hearing, investigation or proceeding has been brought or been threatened,
nor have any settlements been reached by or with any parties or any Liens imposed in connection with the Project concerning Hazardous
Materials or Environmental Laws and (4) no underground storage tanks exist at the Project.

 

    	-24-

    	 

    

 

Section 5.2         Covenants
on Environmental Matters.

 

(1)         Borrower
shall (a) comply with applicable Environmental Laws; (b) notify Lender immediately upon Borrower's discovery of any
spill, discharge, release or presence of any Hazardous Material at, upon, under, within, contiguous to or otherwise affecting
the Project; (c) promptly remove such Hazardous Materials and remediate the Project in full compliance with Environmental
Laws and in accordance with the recommendations and specifications of an independent environmental consultant approved by Lender;
and (d) promptly forward to Lender copies of all orders, notices, permits, applications or other communications and reports
in connection with any spill, discharge, release or the presence of any Hazardous Material or any other matters relating to the
Environmental Laws or any similar laws or regulations, as they may affect the Project or Borrower.

 

(2)         Borrower
shall not cause, shall prohibit any other Person within the control of Borrower from causing, and shall use prudent, commercially
reasonable efforts to prohibit other Persons (including tenants) from causing (a) any spill, discharge or release, or the
use, storage, generation, manufacture, installation, or disposal, of any Hazardous Materials at, upon, under, within or about
the Project or the transportation of any Hazardous Materials to or from the Project (except for cleaning and other products used
in connection with routine maintenance or repair of the Project, and the generation of a small amount of lead by Fujitsu Ten Corp.
of America as disclosed in Section 58 of its lease with Borrower, in each case in full compliance with Environmental Laws),
(b) any underground storage tanks to be installed at the Project, or (c) any activity that requires a permit or other
authorization under Environmental Laws to be conducted at the Project.

 

(3)         Borrower
shall provide to Lender, at Borrower's expense promptly upon the written request of Lender from time to time, a Site Assessment
or, if required by Lender, an update to any existing Site Assessment, to assess the presence or absence of any Hazardous Materials
and the potential costs in connection with abatement, cleanup or removal of any Hazardous Materials found on, under, at or within
the Project. Borrower shall pay the cost of no more than one such Site Assessment or update in any twelve (12)-month period, unless
Lender's request for a Site Assessment is based on either information provided under Section 5.2(1), a reasonable suspicion
of Hazardous Materials at or near the Project, a breach of representations under Section 5.1, or an Event of Default, in
which case any such Site Assessment or update shall be at Borrower's expense.

  

(4)         Borrower
shall at all times comply with the provisions of the Easement Agreement (defined below), including permitting Montrose Chemical
Corporation of California, a Delaware corporation ("Montrose"), access to the Project to conduct "Environmental
Activities" as defined in the Easement Agreement. As used above, the "Easement Agreement" means,
collectively, (a) that certain Easement Agreement dated October 18, 2010 by and between Borrower and Montrose, which
was recorded in the Official Records of Los Angeles County, California on December 29, 2010 as Instrument No. 20101933398,
and (b) that certain Memorandum of Easement Agreement dated September 23, 2010 by and between Borrower and Montrose,
which was recorded in the Official Records of Los Angeles County, California on December 29, 2010 as Instrument No. 20101933399.

 

    	-25-

    	 

    

 

Section 5.3           Allocation
of Risks and Indemnity. As between Borrower and Lender, all risk of loss associated with non-compliance with Environmental
Laws, or with the presence of any Hazardous Material at, upon, within, contiguous to or otherwise affecting the Project, shall
lie solely with Borrower. Accordingly, Borrower shall bear all risks and costs associated with any loss (including any loss in
value attributable to Hazardous Materials), damage or liability therefrom, including all costs of removal of Hazardous Materials
or other remediation reasonably required by Lender or by law. Borrower shall at all times indemnify, defend and hold Lender harmless
from and against any and all claims, suits, actions, debts, damages, losses, liabilities, litigations, judgments, charges, costs
and expenses (including reasonable costs of defense), of any nature whatsoever proffered or incurred by Lender, whether as mortgagee
or beneficiary under the Mortgage, as mortgagee in possession, or as successor-in-interest to Borrower by foreclosure deed or
deed in lieu of foreclosure, and whether based in contract, tort, implied or express warranty, strict liability, criminal or civil
statute or common law, including those arising from the joint, concurrent or comparative negligence of Lender, under or on account
of the Environmental Laws, including the assertion of any lien thereunder, with respect to: (1) a breach of any representation,
warranty or covenant of Borrower contained in this Article 5; (2) any acts performed by Lender pursuant to the
provisions of this Article 5; (3) any discharge of Hazardous Materials, the threat of discharge of any Hazardous
Materials or the storage or presence of any Hazardous Materials affecting the Project whether or not the same originates or emanates
from the Project or any contiguous real estate, including any loss of value of the Project as a result of the foregoing; (4) any
costs of removal or remedial action incurred by the United States Government or any costs incurred by any other Person or damages
from injury to, destruction of, or loss of natural resources including reasonable costs of assessing such injury, destruction
or loss incurred pursuant to any Environmental Laws; (5) liability for personal injury or property damage arising under any
statutory or common law tort theory, including without limitation damages assessed for the maintenance of a public or private
nuisance or for the carrying on of an abnormally dangerous activity at, upon, under or within the Project; and/or (6) any
other environmental matter affecting the Project within the jurisdiction of the Environmental Protection Agency, any other federal
agency or any state or local environmental agency. The foregoing notwithstanding, Borrower shall not be liable under the foregoing
indemnification to the extent any such loss, liability, damage, claim, cost or expense results solely from Lender's gross negligence
or willful misconduct. Borrower's obligations under this Article 5 shall arise upon the discovery of the presence
of any Hazardous Material, whether or not the Environmental Protection Agency, any other federal agency or any state or local
environmental agency has taken or threatened any action in connection with the presence of any Hazardous Materials and whether
or not the existence of any such Hazardous Material or potential liability on account thereof is disclosed in the Site Assessment,
and shall continue notwithstanding the repayment of the Loan or any transfer or sale of any right, title and interest in the Project
(by foreclosure, deed in lieu of foreclosure or otherwise). Notwithstanding the foregoing, subject to the conditions specified
below in this Section 5.3, Borrower shall not be liable under this Section 5.3 for such indemnified matters
directly created or arising from events or conditions caused or created by Lender and first existing after Lender acquires title
to the Project by foreclosure or acceptance of a deed in lieu thereof, but only if (a) not more than ninety (90) days
and not less than thirty (30) days prior to the date Lender acquires title, Borrower delivers to Lender a current site assessment
showing no adverse matters or items not reflected in the Site Assessment delivered to Lender prior to the Closing Date (and, as
to any adverse matters or items reflected in the original Site Assessment, none shall have worsened), and (b) such loss,
liability, damage, claim, cost or expense does not directly or indirectly arise from or relate to any release of or exposure to
any Hazardous Material (including personal injury or damage to property), non-compliance with any Environmental Laws, or remediation
existing or occurring prior to the date Lender acquires title to the Project.

 

    	-26-

    	 

    

 

Section 5.4           Lender's
Right to Protect Collateral. If (1) any discharge of Hazardous Materials or the threat of a discharge of Hazardous
Material affecting the Project occurs, whether originating or emanating from the Project or any contiguous real estate, and/or
(2) Borrower fails to comply with any Environmental Laws or related regulations, Lender may at its election, but without
the obligation so to do, give such notices and/or cause such work to be performed at the Project and/or take any and all other
actions as Lender shall deem necessary or advisable in order to abate the discharge of any Hazardous Material, remove the Hazardous
Material or cure Borrower's noncompliance.

 

Section 5.5           No
Waiver. Notwithstanding any provision in this Article 5 or elsewhere in the Loan Documents, or any rights or
remedies granted by the Loan Documents, Lender does not waive and expressly reserves all rights and benefits now or hereafter
accruing to Lender under any "security interest" or "secured creditor" exception under applicable Environmental
Laws, as the same may be amended. No action taken by Lender pursuant to the Loan Documents shall be deemed or construed to be
a waiver or relinquishment of any such rights or benefits under any "security interest exception."

 

ARTICLE 6

LEASING MATTERS

 

Section 6.1           Representations
and Warranties on Leases. Borrower represents and warrants to Lender with respect to leases of the Project that: (1) the
rent roll delivered to Lender is true and correct, and the leases are valid and in full force and effect; (2) the leases
(including amendments) are in writing, and there are no oral agreements with respect thereto; (3) the copies of the leases
delivered to Lender are true and complete; (4) neither the landlord nor any tenant is in default under any of the leases;
(5) Borrower has no knowledge of any notice of termination or default with respect to any lease; (6) Borrower has not
assigned or pledged any of the leases, the rents or any interests therein except to Lender; (7) no tenant or other party
has an option to purchase all or any portion of the Project; (8) except as expressly set forth in the leases provided to
Lender prior to the Closing Date, no tenant has the right to terminate its lease prior to expiration of the stated term of such
lease; (9) no tenant has prepaid more than one month's rent in advance (except for bona fide security deposits not in excess
of an amount equal to two month's rent); and (10) all existing leases are subordinate to the Mortgage either pursuant to
their terms or a recorded subordination agreement.

 

    	-27-

    	 

    

 

Section 6.2           Standard
Lease Form; Approval Rights. All leases and other rental arrangements shall in all respects be approved by Lender in its
reasonable discretion and shall be on a standard lease form approved by Lender with no material modifications (except as approved
by Lender). Such lease form shall provide that the tenant shall attorn to Lender, and that any cancellation, surrender, or amendment
of such lease without the prior written consent of Lender shall be voidable by Lender. Without limiting the provisions of Section
5.2(2), Borrower shall not enter into a lease with a new tenant that would use, generate or store at the Project chlorinated
solvents, chlorobenzine or parachlorobenzine sulfonic acid (pCBSA), and Borrower shall include in all future leases a provision
expressly prohibiting the use, generation or storage of such substances. Within ten (10) days after Lender's request, Borrower
shall furnish to Lender a statement of all tenant security deposits, and copies of all leases not previously delivered to Lender,
certified by Borrower as being true and correct.

 

Section 6.3           Covenants.
Borrower (1) shall perform the obligations which Borrower is required to perform under the leases; (2) shall enforce
the obligations to be performed by the tenants; (3) shall promptly furnish to Lender any notice of default or termination
received by Borrower from any tenant, and any notice of default or termination given by Borrower to any tenant; (4) shall
not collect any rents for more than thirty (30) days in advance of the time when the same shall become due, except for bona
fide security deposits not in excess of an amount equal to two months rent; (5) shall not enter into any ground lease or
master lease of any part of the Project; (6) shall not further assign or encumber any lease; (7) shall not, except with
Lender's prior written consent, cancel or accept surrender or termination of any lease (other than a termination resulting from
a tenant exercising a unilateral early termination right expressly set forth in a lease approved by Lender); and (8) shall
not, except with Lender's prior written consent, modify or amend any lease (except for minor modifications and amendments entered
into in the ordinary course of business, consistent with prudent property management practices, not affecting the economic terms
of the lease), and any action in violation of clauses (5), (6), (7), and (8) of this Section 6.3 shall be
void at the election of Lender.

 

Section 6.4           Tenant
Estoppels. At Lender's request (but not more frequently than once in any 12-month period, or while any Event of Default
exists), Borrower shall obtain and furnish to Lender, written estoppels in form and substance satisfactory to Lender, executed
by tenants under leases in the Project and confirming the term, rent, and other provisions and matters relating to the leases.

 

    	-28-

    	 

    

 

ARTICLE 7

FINANCIAL REPORTING

 

Section
7.1          Financial Statements.

 

(1)         Monthly
Reports. Within forty-five (45) days after the end of each calendar month, Borrower shall furnish to Lender a current
(as of the calendar month just ended) balance sheet, a detailed operating statement (showing monthly activity and year-to-date)
stating Operating Revenues, Operating Expenses and Net Cash Flow for the calendar month just ended, an updated rent roll, and,
as requested by Lender, a written statement setting forth any variance from the annual budget, a general ledger, copies of bank
statements and bank reconciliations and other documentation supporting the information disclosed in the most recent financial
statements.

 

(2)         Quarterly
Reports. Within forty-five (45) days after the end of each calendar quarter, Borrower shall furnish to Lender (a) a
detailed operating statement (showing quarterly activity and year-to-date) stating Operating Revenues, Operating Expenses and
Net Cash Flow for the calendar quarter just ended, and (b) a current (as of the end of such calendar quarter) balance sheet
and income statement (showing quarterly activity and year-to-date) for Guarantor, along with a Compliance Certificate.

 

(3)         Annual
Reports. Within one hundred twenty (120) days after the end of each fiscal year of Borrower's operation of the Project,
Borrower shall furnish to Lender a current (as of the end of such fiscal year) balance sheet, a detailed operating statement stating
Operating Revenues, Operating Expenses and Net Cash Flow for each of Borrower and the Project. In addition, within one hundred
twenty (120) after the end of each fiscal year of Guarantor, Borrower shall furnish to Lender a current (as of the end of such
fiscal year) balance sheet and income statement for Guarantor, along with a Compliance Certificate as of the end of such fiscal
year. If required by Lender, such annual financial statements for Borrower, the Project and/or Guarantor shall be prepared on
a review basis and certified by an independent public accountant satisfactory to Lender.

 

(4)         Certification;
Supporting Documentation. Each such financial statement shall be in scope and detail satisfactory to Lender and certified
by the chief financial representative of Borrower and Guarantor, as applicable.

 

(5)         Tax
Returns. Borrower shall furnish to Lender copies of Borrower's filed federal, state and (if applicable) local income tax
returns for each taxable year (with all forms and supporting schedules attached) within thirty (30) days after filing.

 

Section 7.2          Accounting
Principles. All financial statements shall be prepared in accordance with generally accepted accounting principles, consistently
applied from year to year. If the financial statements are prepared on an accrual basis, such statements shall be accompanied
by a reconciliation to cash basis accounting principles.

 

Section 7.3          Other
Information. Borrower shall deliver to Lender such additional information regarding Borrower, its subsidiaries, its business,
any Borrower Party, and the Project within thirty (30) days after Lender's request therefor.

 

Section 7.4          Annual
Budget. At least thirty (30) days prior to the commencement of each fiscal year, Borrower shall provide to Lender
its proposed annual capital improvements budget for such fiscal year for Lender's review and approval, and Borrower shall provide
to Lender its proposed annual operating budget for such fiscal year for Lender's review.

 

    	-29-

    	 

    

 

Section 7.5         Audits.
Lender's employees and third party consultants shall be entitled to perform such financial investigations and audits of
Borrower's books and records as Lender shall deem necessary. Borrower shall permit Lender and Lender's agents and consultants
to examine such records, books and papers of Borrower which reflect upon its financial condition, the income and expenses relative
to the Project and the representations set forth in Article 9. Borrower authorizes Lender to communicate directly
with Borrower's independent certified public accountants, and authorizes such accountants to disclose to Lender any and all financial
statements and other supporting financial documents and schedules, including copies of any management letter, with respect to
the business, financial condition and other affairs of Borrower.

 

ARTICLE 8

COVENANTS

 

Borrower covenants and
agrees with Lender as follows:

 

Section 8.1         Due
on Sale and Encumbrance; Transfers of Interests. Without the prior written consent of Lender,

 

(1)         no
Transfer shall occur or be permitted, nor shall Borrower enter into any easement or other agreement granting rights in or restricting
the use or development of the Project;

 

(2)         no
Transfer shall occur or be permitted which would (a) cause Cornerstone Operating Partnership, L.P., a Delaware limited partnership
("Operating Partnership"), to own less than one hundred percent (100%) of the beneficial interests in
Borrower and the Project, (b) cause Cornerstone REIT to (i) own less than ninety-nine and nine-tenths percent (99.9%)
of the Operating Partnership or (ii) cease to be the general partner of the Operating Partnership, or (c) result in
a new general partner, member or limited partner having the ability to control the affairs of Borrower being admitted to or created
in Borrower or the Operating Partnership (or result in any existing general partner or member or controlling limited partner withdrawing
from Borrower or the Operating Partnership); and

 

(3)         no
Transfer shall occur or be permitted which, either alone or together with all prior Transfers during the Loan term, would result
in the Transfer of more than twenty-five percent (25%) of the direct or indirect beneficial or other ownership interest in Borrower..

 

    	-30-

    	 

    

 

As used in this Agreement,
"Transfer" shall mean any direct or indirect sale, transfer, conveyance, installment sale, master lease,
mortgage, pledge, encumbrance, grant of Lien or other interest, license, lease, alienation or assignment, whether voluntary or
involuntary, of all or any portion of the direct or indirect legal or beneficial ownership of, or any interest in (a) the
Project or any part thereof, or (b) Borrower, including any agreement to transfer or cede to another Person any voting, management
or approval rights, or any other rights, appurtenant to any such legal or beneficial ownership or other interest. "Transfer"
is specifically intended to include any pledge or assignment, directly or indirectly, of a controlling interest in Borrower or
its general partner, controlling limited partner or controlling member for purposes of securing so-called "mezzanine"
indebtedness. "Transfer" shall not include (i) the leasing of individual units within the Project so long as Borrower
complies with the provisions of the Loan Documents relating to such leasing activity; or (ii) the transfer of ownership interests
in Cornerstone REIT, so long as Cornerstone REIT continues to be a public real estate investment trust, registered with the Securities
and Exchange Commission.

 

Without limiting the
foregoing, Borrower further agrees that it will require each Person that proposes to become a partner, member or shareholder (each
such Person, an "Interest Holder") in Borrower after the Closing Date to sign and deliver to Borrower,
within thirty (30) days after such transfer (and Borrower shall deliver to Lender promptly after receipt), a certificate
executed by a duly authorized officer of the new Interest Holder containing representations, warranties and covenants substantially
the same as the representations, warranties and covenants provided by Borrower in Article 9 hereof.

 

Section
8.2           Taxes; Charges. Borrower shall pay before
any fine, penalty, interest or cost may be added thereto, and shall not enter into any agreement to defer, any real estate taxes
and assessments, franchise taxes and charges, and other governmental charges that may become a Lien upon the Project or become
payable during the term of the Loan, and will promptly furnish Lender with evidence of such payment; however, Borrower's compliance
with Section 3.4 of this Agreement relating to impounds for taxes and assessments shall, with respect to payment of such
taxes and assessments, be deemed compliance with this Section 8.2. Borrower shall not suffer or permit the joint assessment
of the Project with any other real property constituting a separate tax lot or with any other real or personal property. Borrower
may in good faith contest, by proper legal actions or proceedings, the validity or amount of any tax or assessment assessed upon
the Project provided that at the time of commencement of any such action or proceeding, and during the pendency thereof, (1) no
Event of Default shall be continuing; (2) Borrower provides Lender with a release bond in such form and amount as are
satisfactory to Lender, including Lender's estimate of interest, penalties and attorneys' fees; (3) such contest operates
to suspend collection of the contested tax or assessment; (4) Borrower maintains and prosecutes such contest continuously
with diligence, and concludes such contest prior to the thirtieth (30th) day preceding the earlier to occur of the Maturity Date
or the date on which the Project is scheduled to be sold for non-payment; (5) the Project shall not be subject to forfeiture
or loss or any Lien by reason of the institution or prosecution of such contest; and (6) Borrower shall promptly pay or discharge
such contested tax or assessment and all additional charges, interest, penalties and expenses, if any, and shall deliver to Lender
evidence acceptable to Lender of such compliance, payment or discharge, if such contest is terminated or discontinued adversely
to Borrower.

 

    	-31-

    	 

    

 

Section 8.3           Control;
Management. Without the prior written consent of Lender, there shall be no change in the day-to-day control and management
of Borrower or Borrower's general partner or managing member, and no change in their respective organizational documents relating
to control over Borrower, Borrower's general partner or managing member and/or the Project. Borrower shall not terminate, replace
or appoint any Manager or terminate or amend the Management Agreement without Lender's prior written approval, which shall not
be unreasonably withheld. Any change in ownership or control of the Manager shall be cause for Lender to reapprove (in its reasonable
discretion) such Manager and Management Agreement, provided that Borrower shall not be in breach of this requirement unless Borrower
has failed to notify Lender of such change in ownership or control after Borrower obtains actual knowledge of such event. Each
Manager shall hold and maintain all necessary licenses, certifications and permits required by law. Borrower shall fully perform
all of its covenants, agreements and obligations under the Management Agreement.

 

Section 8.4           Operation;
Maintenance; Inspection. Borrower shall observe and comply with all legal requirements applicable to its existence and
to the ownership, use and operation of the Project. Borrower shall maintain the Project in good condition and promptly repair
any damage or casualty. Borrower shall not, without the prior written consent of Lender, undertake any material alteration of
the Project or permit any of the fixtures or personalty owned by Borrower to be removed at any time from the Project, unless the
removed item is removed temporarily for maintenance and repair or, if removed permanently, is obsolete and is replaced by an article
of equal or better suitability and value, owned by Borrower and free and clear of any Liens except those in favor of Lender. Borrower
shall permit Lender and its agents, representatives and employees, upon reasonable prior notice to Borrower, to inspect the Project
and conduct such environmental and engineering studies as Lender may require, provided such inspections and studies do not materially
interfere with the use and operation of the Project.

 

Section 8.5           Taxes
on Security. Borrower shall pay all taxes, charges, filing, registration and recording fees, excises and levies payable
with respect to the Note or the Liens created or secured by the Loan Documents, other than income, franchise and doing business
taxes imposed on Lender. If there shall be enacted any law (1) deducting the Loan from the value of the Project for the purpose
of taxation, (2) affecting any Lien on the Project, or (3) changing existing laws of taxation of mortgages, deeds of
trust, security deeds, or debts secured by real property, or changing the manner of collecting any such taxes, Borrower shall
either (a) promptly pay to Lender, on demand, all taxes, costs and charges for which Lender is or may be liable as a result
thereof; however, if such payment would be prohibited by law or would render the Loan usurious, then instead of collecting such
payment, Lender may declare all amounts owing under the Loan Documents to be immediately due and payable; or (b) repay the
Loan in full. Borrower shall not be required to pay any Spread Maintenance Amount in connection with any prepayment of the Loan
pursuant to this Section.

 

    	-32-

    	 

    

 

Section 8.6           Legal
Existence; Name, Etc.   Borrower shall preserve and keep in full force and effect its existence as, and
at all times operate as, a Single Purpose Entity, and Borrower and each general partner, managing member or non-member manager
in Borrower shall preserve and keep in full force and effect its entity status, franchises, rights and privileges under the laws
of the state of its formation, and all qualifications, licenses and permits applicable to the ownership, use and operation of
the Project. Neither Borrower nor any Borrower Party shall wind up, liquidate, dissolve, reorganize, merge, or consolidate with
or into any Person. Without limiting the foregoing, neither Borrower nor any general partner or managing member of Borrower shall
reincorporate or reorganize itself under the laws of any jurisdiction other than the jurisdiction in which it is incorporated
or organized as of the Closing Date. Borrower and each general partner or managing member in Borrower shall conduct business only
in its own name and shall not change its name, identity, organizational structure, state of formation or the location of its chief
executive office or principal place of business unless Borrower (1) shall have obtained the prior written consent of Lender to
such change, and (2) shall have taken all actions necessary or requested by Lender to file or amend any financing statement or
continuation statement to assure perfection and continuation of perfection of security interests under the Loan Documents. Borrower
(and each general partner or managing member in Borrower, if any) shall maintain its separateness as an entity, including maintaining
separate books, records, and accounts and observing corporate and partnership formalities independent of any other entity, shall
pay its obligations with its own funds and shall not commingle funds or assets with those of any other entity. If Borrower does
not have an organizational identification number and later obtains one, Borrower shall promptly notify Lender of its organizational
identification number.

 

Section 8.7           Affiliate
Transactions. Without the prior written consent of Lender, Borrower shall not engage in any transaction affecting the Project
with an Affiliate of Borrower or of any Borrower Party.

 

Section 8.8           Limitation
on Other Debt. Borrower (and each general partner or managing member in Borrower, if any) shall not, without the prior
written consent of Lender, incur any Debt other than the Loan and customary trade payables which are payable, and shall be paid,
within sixty (60) days of when incurred.

 

Section 8.9           Mechanics
Liens and Stop Payment Notices. Borrower shall pay when due all claims and demands of mechanics, materialmen, laborers
and others which, if unpaid, might result in a mechanics or materialmans or similar Lien and/or notice of pendency of action (each,
a "Mechanics Lien") being filed or recorded against the Project or the assertion of a stop payment notice
or similar claim ("Stop Payment Notice") against Loan proceeds, and shall defend, indemnify and hold Lender
harmless from all Mechanics Liens and Stop Payment Notices including all proceedings to foreclose on Mechanics Liens or to enforce
Stop Payment Notices. If any Mechanics Liens are filed, recorded or otherwise asserted against any portion of the Project, or
if any such Stop Payment Notices are asserted against Loan proceeds, Borrower shall, within ten (10) days of written demand, discharge
or cause to be discharged such Mechanics Lien and/or Stop Payment Notice, and shall promptly obtain the dismissal of any proceedings
for the foreclosure or the enforcement thereof. However, Borrower may contest in good faith the validity of any Mechanics Lien
or Stop Payment Notice so long as (1) Borrower notifies Lender that it intends to contest such Mechanics Lien or Stop Payment
Notice, (2) Borrower provides Lender with (a) an endorsement to Lender's title insurance policy (insuring against such
Mechanics Lien) in form and substance satisfactory to Lender, and (b) either a release bond or other security, in either
case in such form and amount as may be satisfactory to Lender, including Lender's estimate of interest, penalties and attorneys'
fees, and (3) Borrower is diligently contesting the same by appropriate legal proceedings in good faith, at its own expense,
and on its own behalf and on behalf of Lender, and concludes such contest prior to the tenth (10th) day preceding the earlier
to occur of the Maturity Date or the date on which the Project is scheduled to be sold for non-payment, and timely pays any award,
judgment or settlement in favor of such Mechanics Lien or Stop Payment Notice claimant. Lender shall have no obligation to make
any Loan advances until all Mechanics Liens and Stop Payment Notices have been fully released or discharged. Borrower's breach
of its obligations under this Section 8.9 with respect to any Mechanic's Lien shall constitute a Transfer in violation
of Section 8.9.

 

    	-33-

    	 

    

 

Section 8.10         Further
Assurances. Borrower shall promptly (1) cure any defects in the execution and delivery of the Loan Documents, (2) provide,
and cause each Borrower Party to provide, Lender such additional information and documentation on Borrower's and each Borrower
Party's legal or beneficial ownership, policies, procedures and sources of funds as Lender deems necessary or prudent to enable
Lender to comply with Anti-Money Laundering Laws as now in existence or hereafter amended, and (3) execute and deliver, or
cause to be executed and delivered, all such other documents, agreements and instruments as Lender may reasonably request to further
evidence and more fully describe the collateral for the Loan, to correct any omissions in the Loan Documents, to perfect, protect
or preserve any Liens created under any of the Loan Documents, or to make any recordings, file any notices, or obtain any consents,
as may be necessary or appropriate in connection therewith. From time to time upon the written request of Lender, Borrower shall
deliver to Lender a schedule of the name, legal domicile address and jurisdiction of organization, if applicable, for each Borrower
Party and each holder of a legal interest in Borrower.

 

Section 8.11         Estoppel
Certificates. Borrower, within ten (10) days after request (but not more frequently than once in any 12-month period,
or while any Event of Default exists), shall furnish to Lender a written statement, duly acknowledged, setting forth the amount
due on the Loan, the terms of payment of the Loan, the date to which interest has been paid, whether any offsets or defenses exist
against the Loan and, if any are alleged to exist, the nature thereof in detail, and such other matters as Lender reasonably may
request.

 

Section 8.12         Notice
of Certain Events. Borrower shall promptly notify Lender of (1) any Potential Default or Event of Default, together
with a detailed statement of the steps being taken to cure such Potential Default or Event of Default; (2) any notice of
default received by Borrower or any Borrower Party under other obligations relating to the Project or otherwise material to Borrower's
business; and (3) any threatened or pending legal, judicial or regulatory proceedings, including any dispute between Borrower
and any governmental authority, affecting Borrower or the Project.

 

Section 8.13         Indemnification.
Borrower shall indemnify, defend and hold Lender harmless from and against any and all losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs and disbursements (including the reasonable fees and actual
expenses of Lender's counsel) of any kind or nature whatsoever, including those arising from the joint, concurrent, or comparative
negligence of Lender, in connection with (1) any inspection, review or testing of or with respect to the Project, (2) any investigative,
administrative, mediation, arbitration, or judicial proceeding, whether or not Lender is designated a party thereto, commenced
or threatened at any time (including after the repayment of the Loan) in any way related to the execution, delivery or performance
of any Loan Document, to the Project, to the Borrower or its owners, or to the entire course of dealing, prior to the Closing
Date, between Lender and the Borrower or any Borrower Party with respect to the Loan or the transactions contemplated by the Loan
Documents, or to any dealings between the Borrower or its owners and any third parties (including any and all costs and expenses
incurred by Lender in responding to any third-party subpoenas or other third-party discovery requests and defending any depositions
of their respective directors, officers, employees, agents or attorneys), (3) any proceeding instituted by any Person claiming
a Lien, and (4) any brokerage commissions or finder's fees claimed by any broker or other party in connection with the Loan, the
Project, or any of the transactions contemplated in the Loan Documents, except to the extent any of the foregoing is caused by
Lender's gross negligence or willful misconduct.

 

    	-34-

    	 

    

 

Section 8.14        Application
of Operating Revenues. Borrower shall apply all Operating Revenues to the payment of Debt Service and other payments due
under the Loan Documents, taxes, assessments, water charges, sewer rents and other governmental charges levied, assessed or imposed
against the Project, insurance premiums, operations and maintenance charges relating to the Project, and other obligations of
the lessor under leases of space at the Project, before using Operating Revenues for any other purpose.

 

Section 8.15       Representations
and Warranties. Borrower will cause all representations and warranties to remain true and correct all times while any portion
of the Loan remains outstanding.

 

Section 8.16        Post-Closing
Matters.

 

(1)         Immediate
Repairs. Within six (6) months after the Closing Date, Borrower shall deliver to Lender evidence reasonably satisfactory
to Lender that Borrower has completed, Lien-free and in accordance with all applicable legal requirements, the immediate repairs
work (the "Immediate Repairs"), consisting of installing hand railings at the landings on exterior stairs,
as recommended in that certain Property Condition Assessment for the Project dated as of August 13, 2012 prepared by EMG
(EMG Project No. 102648.12R-001.042) (the "Property Report"). Borrower acknowledges receipt of the Property
Report, and Borrower shall commence work on the Immediate Repairs promptly after the Closing Date.

 

(2)         Delivery
of Sinkhole Endorsement. Within three Business Days after the Closing Date, Borrower shall deliver to Lender a copy of
the sinkhole endorsement to Borrower's property insurance, which endorsement is required pursuant to Section 3.1(1).

 

(3)         Delivery
of Counterparty Signature. Within three Business Days after the Closing Date, Borrower shall deliver to Lender the Counterparty's
signature to the Notice of Security Interest and Acknowledgment, substantially in the form of Exhibit B to the Interest Rate
Cap Security Agreement executed by Borrower in favor of Lender.

 

    	-35-

    	 

    

 

ARTICLE 9

ANTI-MONEY LAUNDERING AND

INTERNATIONAL TRADE CONTROLS

 

Section 9.1        Compliance
with International Trade Control Laws and OFAC Regulations.
Borrower represents, warrants and covenants to Lender that:

 

(1)         It
is not now nor shall it be at any time until after the Loan is fully repaid a Person with whom a U.S. Person, including a Financial
Institution, is prohibited from transacting business of the type contemplated by this Agreement, whether such prohibition arises
under U.S. law, regulation, executive orders and lists published by the OFAC (including those executive orders and lists published
by OFAC with respect to Specially Designated Nationals and Blocked Persons) or otherwise.

 

(2)         No
Borrower Party and no Person who owns a direct interest in Borrower is now nor shall be at any time until after the Loan is fully
repaid a Person with whom a U.S. Person, including a Financial Institution, is prohibited from transacting business of the type
contemplated by this Agreement, whether such prohibition arises under U.S. law, regulation, executive orders and lists published
by the OFAC (including those executive orders and lists published by OFAC with respect to Specially Designated Nationals and Blocked
Persons) or otherwise.

 

Section 9.2          Borrower's
Funds. Borrower represents, warrants and covenants to Lender that:

 

(1)         It
has taken, and shall continue to take until after the Loan is fully repaid, such measures as are required by law to verify that
the funds invested in the Borrower are derived (a) from transactions that do not violate U.S. law nor, to the extent such
funds originate outside the United States, do not violate the laws of the jurisdiction in which they originated; and (b) from
permissible sources under U.S. law and to the extent such funds originate outside the United States, under the laws of the jurisdiction
in which they originated.

 

(2)         To
the best of its knowledge, neither Borrower, nor any Borrower Party, nor any holder of a direct interest in Borrower, nor any
Person providing funds to Borrower (a) is under investigation by any governmental authority for, or has been charged with,
or convicted of, money laundering, drug trafficking, terrorist-related activities, any crimes which in the United States would
be predicate crimes to money laundering, or any violation of any Anti-Money Laundering Laws; (b) has been assessed civil
or criminal penalties under any Anti-Money Laundering Laws; and (c) has had any of its/his/her funds seized or forfeited
in any action under any Anti-Money Laundering Laws.

 

    	-36-

    	 

    

 

(3)         Borrower
shall make payments on the Loan solely from funds invested in Borrower, Operating Revenues or insurance proceeds unless otherwise
agreed to by Lender.

 

(4)         To
the best of Borrower's knowledge, as of the Closing Date and at all times during the term of the Loan, all Operating Revenues
are and will be derived from lawful business activities of Project tenants or other permissible sources under U.S. law.

 

(5)         Borrower
will take reasonable steps to verify that funds used to repay the Loan (whether in connection with a refinancing, asset sale or
otherwise) are from sources permissible under U.S. law and to the extent such funds originate outside the United States, permissible
under the laws of the jurisdiction in which they originated.

 

ARTICLE 10

EVENTS OF DEFAULT

 

Each of the following
shall constitute an Event of Default under the Loan:

 

Section
10.1         Payments. Borrower's failure to pay any regularly
scheduled installment of principal, interest or other amount due under the Loan Documents within five (5) days of (and
including) the date when due, or Borrower's failure to pay the Loan at the Maturity Date, whether by acceleration or
otherwise.

 

Section
10.2         Insurance. Borrower's failure to maintain insurance
as required under Section 3.1 of this Agreement.

 

Section 10.3         Transfer.
Any Transfer occurs in violation of Section 8.1 of this Agreement.

 

Section 10.4        Covenants.
Borrower's failure to perform, observe or comply with any of the agreements, covenants or provisions contained in this
Agreement or in any of the other Loan Documents (other than those agreements, covenants and provisions referred to elsewhere in
this Article 10), and the continuance of such failure for thirty (30) days after notice by Lender to Borrower; however,
subject to any shorter period for curing any failure by Borrower as specified in any of the other Loan Documents, Borrower shall
have an additional sixty (60) days to cure such failure if (1) such failure does not involve the failure to make payments
on a monetary obligation; (2) such failure cannot reasonably be cured within thirty (30) days but, using reasonable diligence,
is curable within such additional 60-day period; (3) Borrower is diligently undertaking to cure such default, and (4) Borrower
has provided Lender with security reasonably satisfactory to Lender against any interruption of payment or impairment of collateral
as a result of such continuing failure. The notice and cure provisions of this Section 10.4 do not apply to the other
Events of Default described in this Article 10 or to Borrower's failure to perform, observe or comply with any of
the agreements, covenants or provisions contained in Article 9 (for which no notice and cure period shall apply).

 

    	-37-

    	 

    

 

Section 10.5         Representations
and Warranties. Any representation or warranty made in any Loan Document proves to be untrue in any material respect when
made or deemed made.

 

Section 10.6         Other
Encumbrances. Any default under any document or instrument, other than the Loan Documents, evidencing or creating a Lien
on the Project or any part thereof.

 

Section 10.7         Involuntary
Bankruptcy or Other Proceeding. Commencement of an involuntary case or other proceeding against Borrower, any Borrower
Party or any other Person having an ownership or security interest in the Project (each, a "Bankruptcy Party")
which seeks liquidation, reorganization or other relief with respect to it or its Debts or other liabilities under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeks the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any of its property, and such involuntary case or other proceeding shall remain undismissed
or unstayed for a period of sixty (60) days; or an order for relief against a Bankruptcy Party shall be entered in any such
case under the Federal Bankruptcy Code.

 

Section 10.8         Voluntary
Petitions, Etc.  Commencement by a Bankruptcy Party of
a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its Debts or
other liabilities under any bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official for it or any of its property, or consent by a Bankruptcy Party to any such relief or to the
appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or the
making by a Bankruptcy Party of a general assignment for the benefit of creditors, or the failure by a Bankruptcy Party, or the
admission by a Bankruptcy Party in writing of its inability, to pay its debts generally as they become due, or any action by a
Bankruptcy Party to authorize or effect any of the foregoing.

  

Section 10.9         Guarantor's
Tangible Net Worth and Liquidity. The failure of Guarantor to maintain at all times (a) a Tangible Net Worth of not
less Ten Million and No/100 Dollars ($10,000,000.00) and (b) Cash Liquidity Balances of not less than Two Million and No/100
Dollars ($2,000,000.00).

 

ARTICLE 11

REMEDIES

 

Section
11.1         Remedies - Insolvency Events. Upon the occurrence of
any Event of Default described in Section 10.7 or Section 10.8, the obligations of Lender to advance amounts
hereunder shall immediately terminate, and all amounts due under the Loan Documents immediately shall become due and payable,
all without written notice and without presentment, demand, protest, notice of protest or dishonor, notice of intent to
accelerate the maturity thereof, notice of acceleration of the maturity thereof, or any other notice of default of any kind,
all of which are hereby expressly waived by Borrower; however, if the Bankruptcy Party under Section 10.7
or Section 10.8 is other than Borrower, then all amounts due under the Loan Documents shall become
immediately due and payable at Lender's election, in Lender's sole discretion.

 

    	-38-

    	 

    

 

Section 11.2         Remedies -
Other Events. Except as set forth in Section 11.1 above, while any Event of Default exists, Lender may (1) by
written notice to Borrower, declare the entire Loan to be immediately due and payable without presentment, demand, protest, notice
of protest or dishonor, notice of intent to accelerate the maturity thereof, notice of acceleration of the maturity thereof, or
other notice of default of any kind, all of which are hereby expressly waived by Borrower, (2) terminate the obligation,
if any, of Lender to advance amounts hereunder, and (3) exercise all rights and remedies therefor under the Loan Documents
and at law or in equity.

 

Section
11.3         Lender's Right to Perform the Obligations. If
Borrower shall fail, refuse or neglect to make any payment or perform any act required by the Loan Documents, then while any
Event of Default exists, and without notice to or demand upon Borrower and without waiving or releasing any other right,
remedy or recourse Lender may have because of such Event of Default, Lender may (but shall not be obligated to) make such
payment or perform such act for the account of and at the expense of Borrower, and shall have the right to enter upon the
Project for such purpose and to take all such action thereon and with respect to the Project as it may deem necessary or
appropriate. If Lender shall elect to pay any sum due with reference to the Project, Lender may do so in reliance on any
bill, statement or assessment procured from the appropriate governmental authority or other issuer thereof without
inquiring into the accuracy or validity thereof. Similarly, in making any payments to protect the security intended to be
created by the Loan Documents, Lender shall not be bound to inquire into the validity of any apparent or threatened adverse
title, Lien, encumbrance, claim or charge before making an advance for the purpose of preventing or removing the same.
Borrower shall indemnify, defend and hold Lender harmless from and against any and all losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever,
including reasonable attorneys' fees and disbursements, incurred or accruing by reason of any acts performed by Lender
pursuant to the provisions of this Section 11.3, including those arising from the joint, concurrent, or
comparative negligence of Lender, except to the extent caused by Lender's gross negligence or willful misconduct. All sums
paid by Lender pursuant to this Section 11.3 and all other sums expended by Lender to which it shall be entitled
to be indemnified, together with interest thereon at the Default Rate from the date of such payment or expenditure until
paid, shall constitute additions to the Loan, shall be secured by the Loan Documents and shall be paid by Borrower to Lender
upon demand.

 

ARTICLE 12

MISCELLANEOUS

 

Section
12.1         Notices. Any notice required or permitted to be
given under this Agreement shall be in writing and either shall be mailed by certified mail, postage prepaid, return receipt
requested, or sent by overnight air courier service, or personally delivered to a representative of the receiving party, or
sent by facsimile or electronic mail (provided that for both facsimile and electronic mail delivery, an identical notice is
also sent simultaneously by mail, overnight courier or personal delivery as otherwise provided in
this Section 12.1). All such notices shall be mailed, sent or delivered, addressed to the party for whom it is
intended at its address set forth below.

 

    	-39-

    	 

    

 

	If to Borrower:	COP – Western Ave., LLC
	 	1920 Main St, Suite 400
	 	Irvine, California  92614
	 	Attention:	Jon Carley
	 	Facsimile:	(949) 852-2734
	 	E-Mail:	jcarley@crefunds.com
	 	 
	 	with a copy to:
	 	 
	 	COP – Western Ave., LLC
	 	1920 Main St, Suite 400,
	 	Irvine, California 92614
	 	Attention:	Kent Eikanas
	 	Facsimile:	(949) 852-2734
	 	E-Mail:	keikanas@crefunds.com
	 	 
	 	with a copy to:
	 	 
	 	Hanson Bridgett LLP
	 	425 Market Street, 26th Floor
	 	San Francisco, California 94105
	 	Attention:	Jennifer Berland
	 	Facsimile:	(415) 541-9366
	 	E-Mail:	jberland@hansonbridgett.com

 

    	-40-

    	 

    

 

	If to Lender:	General Electric Capital Corporation
	 	1901 Main Street, 7th Floor
	 	Irvine, California  92614
	 	Attention:	Asset Manager (Cornerstone/Western Ave.)
	 	Facsimile:	(949) 477-0903
	 	E-Mail:	kurt.stuart@ge.com
	 	 
	 	with a copy to:
	 	 
	 	General Electric Capital Corporation
	 	c/o GE Capital Real Estate - Legal
	 	500 West Monroe Street, 15th Floor
	 	Chicago, Illinois 60661
	 	Attention:	Legal Counsel (Cornerstone/Western Ave.)
	 	Facsimile:	(312) 463-2252
	 	E-Mail:	pamela.kain@ge.com
	 	 
	 	with a copy to:
	 	 
	 	Sheppard, Mullin, Richter & Hampton LLP
	 	650 Town Center Drive, 4th Floor
	 	Costa Mesa, California 92626
	 	Attention:	Steven Cardoza, Esq.
	 	Facsimile:	(714) 424-8234
	 	E-Mail:	scardoza@sheppardmullin.com

 

Any notice so addressed
and sent by United States mail or overnight courier shall be deemed to be given on the earliest of (1) when actually delivered,
(2) on the first Business Day after deposit with an overnight air courier service, or (3) on the third Business Day
after deposit in the United States mail, postage prepaid, in each case to the address of the intended addressee (except as otherwise
provided in the Mortgage). Any notice so delivered in person shall be deemed to be given when receipted for by, or actually received
by Lender or Borrower, as the case may be. If given by facsimile, a notice shall be deemed given and received when the facsimile
is transmitted to the party's facsimile number specified above and confirmation of complete receipt is received by the transmitting
party during normal business hours or on the next Business Day if not confirmed during normal business hours, and an identical
notice is also sent simultaneously by mail, overnight courier, or personal delivery as otherwise provided in this Section 12.1.
If given by electronic mail, a notice shall be deemed given and received when the electronic mail is transmitted to the recipient's
electronic mail address specified above and electronic confirmation of receipt (either by reply from the recipient or by automated
response to a request for delivery receipt) is received by the sending party during normal business hours or on the next Business
Day if not confirmed during normal business hours, and an identical notice is also sent simultaneously by mail, overnight courier
or personal delivery as otherwise provided in this Section 12.1. Except for facsimile and electronic mail notices
sent as expressly described above, no notice hereunder shall be effective if sent or delivered by electronic means. Either party
may designate a change of address by written notice to the other by giving at least ten (10) days prior written notice of
such change of address.

 

    	-41-

    	 

    

 

Section 12.2        Amendments,
Waivers, References.

 

(1)         This
Agreement and any other Loan Document may be amended, modified or supplemented only by a written instrument signed by Borrower
and Lender. No waiver of any provision of the Loan Documents shall be effective unless in writing and signed by the party against
whom enforcement is sought.

 

(2)         This
Agreement and the other Loan Documents shall not be executed, entered into, altered, amended, or modified by electronic means.
Without limiting the generality of the foregoing, Borrower and Lender hereby agree that no exchange of electronic correspondence
between the parties shall operate to amend, modify or waive any term or provision of any Loan Document.

 

(3)         Any
reference to a Loan Document, whether in this Agreement or in any other Loan Document, shall be deemed to be a reference to such
Loan Document as it may hereafter from time to time be amended, modified, supplemented and restated in accordance with the terms
hereof.

 

Section 12.3        Limitation
on Interest. It is the intention of the parties hereto to conform strictly to applicable usury laws. Accordingly, all
agreements between Borrower and Lender with respect to the Loan are hereby expressly limited so that in no event, whether by reason
of acceleration of maturity or otherwise, shall the amount paid or agreed to be paid to Lender or charged by Lender for the use,
forbearance or detention of the money to be lent hereunder or otherwise, exceed the maximum amount allowed by law. If the Loan
would be usurious under applicable law, then, notwithstanding anything to the contrary in the Loan Documents: (1) the aggregate
of all consideration which constitutes interest under applicable law that is contracted for, taken, reserved, charged or received
under the Loan Documents shall under no circumstances exceed the maximum amount of interest allowed by applicable law, and any
excess shall be credited on the Note by the holder thereof (or, if the Note has been paid in full, refunded to Borrower); and
(2) if maturity is accelerated by reason of an election by Lender, or in the event of any prepayment, then any consideration
which constitutes interest may never include more than the maximum amount allowed by applicable law. In such case, excess interest,
if any, provided for in the Loan Documents or otherwise, to the extent permitted by applicable law, shall be amortized, prorated,
allocated and spread from the date of advance until payment in full so that the actual rate of interest is uniform through the
term hereof. If such amortization, proration, allocation and spreading is not permitted under applicable law, then such excess
interest shall be canceled automatically as of the date of such acceleration or prepayment and, if theretofore paid, shall be
credited on the Note (or, if the Note has been paid in full, refunded to Borrower). The terms and provisions of this Section 12.3
shall control and supersede every other provision of the Loan Documents. If at any time the laws of the United States of America
permit Lender to contract for, take, reserve, charge or receive a higher rate of interest than is allowed by applicable state
law (whether such federal laws directly so provide or refer to the law of any state), then such federal laws shall to such extent
govern as to the rate of interest which Lender may contract for, take, reserve, charge or receive under the Loan Documents.

 

    	-42-

    	 

    

 

Section 12.4         Invalid
Provisions. If any provision of any Loan Document is held to be illegal, invalid or unenforceable, such provision shall
be fully severable; the Loan Documents shall be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part thereof; the remaining provisions thereof shall remain in full effect and shall not be affected by
the illegal, invalid, or unenforceable provision or by its severance therefrom; and in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as a part of such Loan Document a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible to be legal, valid and enforceable.

 

Section 12.5         Reimbursement
of Expenses. Borrower shall pay or reimburse Lender on demand for (1) all costs and expenses incurred by Lender in
connection with the negotiation, documentation, closing, disbursement and administration of the Loan, including fees and expenses
of Lender's attorneys and Lender's environmental, engineering, accounting and other consultants; fees, charges and taxes for the
recording or filing of Loan Documents; financial investigation, audit and inspection fees and costs; settlement of condemnation
and casualty awards; title search costs, premiums for title insurance and endorsements thereto; and fees and costs for UCC and
litigation searches and background checks; and (2) all amounts expended, advanced or incurred by Lender to collect the Note,
or to enforce the rights of Lender under this Agreement or any other Loan Document, to defend or assert the rights, claims and
actions of Lender under the Loan Documents or with respect to the Collateral (by litigation or other proceedings) or to defend
any claims asserted against Lender by Borrower or any Borrower Party with respect to the Loan, the Loan Documents, the Collateral
or the transactions contemplated hereby, which amounts will include all court costs, attorneys' fees and expenses, fees of auditors
and accountants, and investigation expenses as may be incurred by Lender in connection with any such matters (whether or not litigation
is instituted), together with interest at the Default Rate on each such amount from the date of disbursement until the date of
reimbursement to Lender, all of which shall constitute part of the Loan and shall be secured by the Loan Documents.

 

Section 12.6         Approvals;
Third Parties; Conditions. All rights retained or exercised by Lender to review or approve leases, contracts, plans, studies
and other matters, including Borrower's and any other Person's compliance with the provisions of Article 9 and compliance
with laws applicable to Borrower, the Project or any other Person, are solely to facilitate Lender's credit underwriting, and
shall not be deemed or construed as a determination that Lender has passed on the adequacy thereof for any other purpose and may
not be relied upon by Borrower or any other Person. This Agreement is for the sole and exclusive use of Lender and Borrower and
may not be enforced, nor relied upon, by any Person other than Lender and Borrower. All conditions of the obligations of Lender
hereunder, including the obligation to make advances, are imposed solely and exclusively for the benefit of Lender, its successors
and assigns, and no other Person shall have standing to require satisfaction of such conditions or be entitled to assume that
Lender will refuse to make advances in the absence of strict compliance with any or all of such conditions, and no other Person
shall, under any circumstances, be deemed to be a beneficiary of such conditions, any and all of which may be freely waived in
whole or in part by Lender at any time in Lender's sole discretion.

 

    	-43-

    	 

    

 

Section 12.7        Lender
Not in Control; No Partnership.

 

(1)         None
of the covenants or other provisions contained in this Agreement shall, or shall be deemed to, give Lender the right or power
to exercise control over the affairs or management of Borrower. The power of Lender is limited to the right to exercise the rights
and remedies under the Loan Documents.

 

(2)         Borrower
and Lender agree that the relationship between Borrower and Lender is, and at all times shall remain, solely that of debtor and
creditor. No covenant or provision of the Loan Documents is intended, nor shall be deemed or construed, to create, and Lender
and Borrower disclaim any intention to create, a partnership, joint venture, agency or common interest in profits or income between
Lender and Borrower, or to create an equity in the Project in Lender, or any sharing of liabilities, losses, costs or expenses.
Lender neither undertakes nor assumes any responsibility or duty to Borrower, to any direct or indirect constituent partners,
members, stockholders or investors in Borrower (each, a "Borrower Investor") or to any other Person with
respect to the Collateral or the Loan, except as expressly provided in the Loan Documents. Notwithstanding any other provision
of the Loan Documents: (a) Lender is not, nor shall be construed as, a partner, joint venturer, alter ego, manager, controlling
person or other business associate or participant of any kind in Borrower or any Borrower Investor or Borrower Party, and Lender
does not intend to ever assume such status; (b) Lender shall in no event be liable for any debts, expenses or losses incurred
or sustained by Borrower or any Borrower Investor or Borrower Party; and (c) Lender shall not be deemed responsible for or
a participant in any acts, omissions or decisions of Borrower or any Borrower Investor or Borrower Party.

 

(3)         Borrower
and Lender acknowledge that Lender or one or more of its Affiliates may now or hereafter be an indirect investor in Borrower or
Affiliates of Borrower (each, a "Lender Investment"). No such present or future Lender Investment shall
terminate, qualify, impair or otherwise affect in any manner the obligations, agreements and understandings of Borrower and Lender
set forth in Section 12.7(1) and Section 12.7(2). Without limiting the foregoing, Borrower represents and warrants
that (a) Borrower was not required, compelled or influenced to enter into this Agreement or otherwise obtain the Loan by
any existing Lender Investment or the prospect of any future Lender Investment, and (b) any return or payment made on, or
loss incurred as the result of, any Lender Investment shall not be taken into account with respect to the obligations of Borrower
under this Agreement or with respect to the Loan, and with respect to both (a) and (b) above, Borrower covenants and agrees that
it shall forever be estopped from asserting to the contrary. Borrower hereby WAIVES AND RELEASES any offsets, defenses, claims
(including claims of equitable subordination in any bankruptcy proceeding involving Borrower or its assets) or counterclaims to
the payment of the Loan, to the enforcement of Borrower's other obligations under the Loan Documents, to the priority of the Liens
of the Loan Documents or to Lender's exercise of remedies against the Collateral to the extent such offsets, defenses, claims
or counterclaims are based on the existence of, or the prospect of, any Lender Investments (collectively, "Lender Investment
Claims"). Borrower shall indemnify, defend and hold Lender harmless from and against any and all losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs and disbursements (including the reasonable
fees and actual expenses of their counsel) of any kind or nature whatsoever, as a result of the assertion of any Lender Investment
Claims by Borrower, any Borrower Party or any other Affiliate of Borrower.

 

    	-44-

    	 

    

 

Section 12.8        Time
of the Essence. Time is of the essence with respect to this Agreement.

 

Section 12.9        Successors
and Assigns; Secondary Market Transactions.

 

(1)         This
Agreement shall be binding upon and inure to the benefit of Lender and Borrower and their respective successors and permitted
assigns, provided that neither Borrower nor any other Borrower Party shall, without the prior written consent of Lender, assign
any rights, duties or obligations hereunder.

 

(2)         Borrower
acknowledges that Lender and its successors and assigns may without notice to or consent from Borrower (a) sell this Agreement,
the Mortgage, the Note, the other Loan Documents, and any and all servicing rights thereto, or any portions thereof, to one or
more investors, (b) participate and/or syndicate the Loan to one or more investors, (c) deposit this Agreement, the
Note and the other Loan Documents, or any portions thereof, with a trust, which trust may sell certificates to investors evidencing
an ownership interest in the trust assets, or (d) otherwise sell, transfer or assign the Loan or interests therein in one
or more transactions to investors (the transactions referred to in clauses (a) through (d) are hereinafter each referred to as
a "Secondary Market Transaction"). Borrower shall reasonably cooperate with Lender in effecting any such
Secondary Market Transaction and shall reasonably cooperate and use all reasonable efforts to satisfy the market standards to
which Lender customarily adheres or which may be reasonably required by any participant, investor, purchaser or any rating agency
involved in any Secondary Market Transaction (including delivery of opinions of counsel in form and substance similar to the opinions
of counsel delivered to Lender on the Closing Date). Borrower shall provide such information and documents relating to Borrower,
the Guarantors and the Project as Lender may reasonably request in connection with such Secondary Market Transaction. In addition,
Borrower shall make available to Lender all information concerning the Project, its business and operations that Lender may reasonably
request. Lender shall be permitted to share all information with the participants, investors, purchasers, investment banking firms,
rating agencies, accounting firms, law firms and third-party advisory firms involved with the Loan and Loan Documents or the applicable
Secondary Market Transaction (collectively, "Interested Parties"). Lender and all of the Interested Parties
shall be entitled to rely on the information supplied by or on behalf of Borrower. Borrower and each Borrower Party agrees that
Lender shall have no liability whatsoever as a result of delivering any such information to any Interested Party, and Borrower
and the other Borrower Parties, on behalf of themselves and their successors and assigns, hereby release and discharge Lender
from any and all liabilities, claims, damages, or causes of action arising out of, connected with or incidental to the delivery
of any such information to any Interested Party. Borrower also agrees to execute any amendment of or supplement to this Agreement
and the other Loan Documents as Lender may reasonably request in connection with any Secondary Market Transaction, provided that
such amendment or supplement does not change the economic terms of the Loan, or increase, in any material respect, Borrower's
or any Borrower Party's duties, responsibilities or liabilities under the Loan Documents, or reduce, in any material respect,
the rights of Borrower or any Borrower Party under the Loan Documents.

 

    	-45-

    	 

    

 

(3)        Lender
shall have the right, at any time (whether prior to, in connection with, or after any Secondary Market Transaction), with respect
to all or any portion of the Loan, to modify, split and/or sever all or any portion of the Loan; provided, however, in each such
instance the outstanding principal balance of the Notes evidencing the Loan (or components of such Notes) immediately after the
effective date of such modification, split or severance equals the outstanding principal balance of the Loan immediately prior
to such modification, split or severance, and if such Notes have different stated interest rates, the weighted average of the
interest rates for all such Notes (or components of such Notes) immediately after the effective date of such modification, split
or severance (and at all times thereafter) equals the weighted average of the interest rates of the Notes immediately prior to
such modification, split or severance. Without limiting the foregoing, Lender may (a) cause the Note and the Mortgage (and
the other collateral documents now or hereafter executed to secure, or to perfect a security interest granted to secure, any or
all of the Loan) to be split into a first and second priority mortgage loan, (b) create one or more senior and subordinate
notes and, in connection therewith, allocate some or all rights and benefits under Mortgage (and under such other collateral documents)
to the holders of either such senior or subordinate notes, (c) create multiple components of the Note (and allocate or reallocate
the principal balance of the Loan among such components) or (d) otherwise sever membership interests (directly or indirectly)
in Borrower (i.e., a senior loan/mezzanine loan structure), in each such case, in whatever proportion and whatever priority Lender
determines. Borrower (and Borrower's constituent members, if applicable) shall promptly execute such documentation as Lender may
reasonably request to evidence and/or effectuate any such modification or severance.

 

Section 12.10      Renewal,
Extension or Rearrangement. Subject to Section 12.9, all provisions of the Loan Documents shall apply with equal
effect to each and all promissory notes and amendments thereof hereinafter executed which in whole or in part represent a renewal,
extension, increase or rearrangement of the Loan.

 

Section
12.11       Waivers.  No course of dealing on the part of Lender,
its officers, employees, consultants or agents, nor any failure or delay by Lender with respect to exercising any right, power
or privilege of Lender under any of the Loan Documents, shall operate as a waiver thereof.

 

    	-46-

    	 

    

 

Section 12.12         Cumulative
Rights. Rights and remedies of Lender under the Loan Documents shall be cumulative, and the exercise or partial exercise
of any such right or remedy shall not preclude the exercise of any other right or remedy.

 

Section 12.13         Singular
and Plural. Words used in this Agreement and the other Loan Documents in the singular, where the context so permits, shall
be deemed to include the plural and vice versa. The definitions of words in the singular in this Agreement and the other Loan
Documents shall apply to such words when used in the plural where the context so permits and vice versa.

 

Section 12.14         Phrases. When
used in this Agreement and the other Loan Documents, the phrase "including" shall mean "including, but not limited
to," the phrase "satisfactory to Lender" shall mean "in form and substance satisfactory to Lender in all respects,"
the phrase "with Lender's consent" or "with Lender's approval" shall mean such consent or approval at Lender's
sole discretion, and the phrase "acceptable to Lender" shall mean "acceptable to Lender at Lender's sole discretion."

 

Section 12.15         Exhibits
and Schedules. The exhibits and schedules attached to this Agreement are incorporated herein and shall be considered a
part of this Agreement for the purposes stated herein.

 

Section 12.16         Titles
of Articles, Sections and Subsections. All titles or headings to articles, sections, subsections or other divisions of
this Agreement and the other Loan Documents or the exhibits hereto and thereto are only for the convenience of the parties and
shall not be construed to have any effect or meaning with respect to the other content of such articles, sections, subsections
or other divisions, such other content being controlling as to the agreement between the parties hereto.

 

Section 12.17         Promotional
Material. Borrower authorizes Lender to issue press releases, advertisements and other promotional materials in connection
with Lender's own promotional and marketing activities, and describing the Loan in general terms or in detail and Lender's participation
in the Loan, provided that all references to Borrower contained in any such press releases, advertisements or promotional materials
shall be approved in writing by Borrower in advance of issuance. All references to Lender contained in any press release, advertisement
or promotional material issued by Borrower shall be approved in writing by Lender in advance of issuance.

 

Section
12.18         Survival. All of the representations, warranties,
covenants, and indemnities of Borrower hereunder, and under the indemnification provisions of the other Loan Documents, shall
survive the repayment in full of the Loan and the release of the Liens evidencing or securing the Loan, and shall survive the
transfer (by sale, foreclosure, conveyance in lieu of foreclosure or otherwise) of any or all right, title and interest in
and to the Project to any party, whether or not an Affiliate of Borrower.

 

    	-47-

    	 

    

 

Section 12.19         WAIVER
OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION
OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN ANY WAY RELATING TO THE
LOAN OR THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY CLAIM OR DEFENSE
ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT
FOR LENDER TO ENTER THIS AGREEMENT.

 

Section 12.20         Punitive
or Consequential Damages; Waiver. Neither Lender nor Borrower shall be responsible or liable to the other or to any other
Person for any punitive, exemplary or consequential damages which may be alleged as a result of the Loan or the transaction contemplated
hereby, including any breach or other default by any party hereto. Borrower represents and warrants to Lender that as of the Closing
Date neither Borrower nor any Borrower Party has any claims against Lender in connection with the Loan.

 

Section 12.21         Governing
Law. Except as expressly set forth in the definition of "UCC" in the Mortgage, the validity, construction, enforcement,
interpretation and performance of the Loan Documents, and any claim, controversy or dispute arising under or related to any of
the Loan Documents, the transactions contemplated thereby or the rights, duties and relationship of the parties thereto, shall
be governed by the laws of the State of California, without regard to the principles thereof regarding conflict of laws, and any
applicable laws of the United States of America.

 

Section 12.22         Entire
Agreement. This Agreement and the other Loan Documents embody the entire agreement and understanding between Lender and
Borrower and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and
thereof, including any commitment letter (if any) issued by Lender with respect to the Loan and any confidentiality agreements
previously executed by the parties with respect to the Loan. Accordingly, the Loan Documents may not be contradicted by evidence
of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.
If any conflict or inconsistency exists between this Agreement and any of the other Loan Documents, the terms of this Agreement
shall control.

 

Section 12.23         Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute
one document.

 

Section 12.24         Brokers.
Borrower hereby represents to Lender that Borrower has not dealt with any broker, underwriters, placement agent, or finder in
connection with the transactions contemplated by this Agreement and the other Loan Documents, other than Johnson Capital (the
"Broker"). Borrower hereby agrees to pay all fees and commissions due and payable to Broker and to indemnify
and hold Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind in any way relating
to or arising from a claim by any Person (including Broker) that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein.

 

    	-48-

    	 

    

 

 

Section
12.25         Claims Against Lender. Lender shall not be in default
under this Agreement, or under any other Loan Documents, unless a written notice specifically setting forth the default claimed
by Borrower shall have been given to Lender within three (3) months after Borrower first had knowledge of the occurrence of the
event which Borrower alleges gave rise to such claimed default and Lender does not remedy or cure the default, if any default
actually exists, promptly thereafter. Borrower waives any claim, set-off or defense against Lender arising by reason of any alleged
default by Lender as to which Borrower does not give such notice timely as required by this Section 12.25. Borrower acknowledges
that such waiver is or may be essential to Lender's ability to enforce its remedies without delay and that such waiver therefore
constitutes a substantial part of the bargain between Lender and Borrower with regard to the Loan. No Borrower Party or tenant
of the Project is intended to have any rights as a third-party beneficiary of the provisions of this Section 12.25.

 

ARTICLE 13

 

LIMITATIONS
ON LIABILITY

 

Section
13.1         Limitation on Liability.

 

(1)          Except
as provided below in this Section 13.1, Borrower shall not be personally liable for amounts due under the Loan Documents.

 

(2)          Borrower
shall be personally liable to Lender for any deficiency, loss or damage suffered by Lender because of: (a) Borrower's commission
of a criminal act; (b) the failure by Borrower or any Borrower Party to apply any funds derived from the Project, including
Operating Revenues, security deposits, insurance proceeds and condemnation awards, as required by the Loan Documents; (c) the
fraud or misrepresentation by Borrower or any Borrower Party made in or in connection with the Loan Documents or the Loan; (d) Borrower's
collection of rents more than one month in advance or entering into, modifying or canceling leases (excluding the exercise by
any tenant of a unilateral cancellation right expressly set forth a lease approved by Lender), or receipt of monies by Borrower
or any Borrower Party in connection with the modification or cancellation of any leases, in violation of this Agreement or any
of the other Loan Documents; (e) Borrower's interference with Lender's exercise of rights under the Assignment of Rents and
Leases; (f) Borrower's failure to turn over to Lender all tenant security deposits upon Lender's demand following an Event
of Default; (g) Borrower's failure to timely renew any letter of credit issued in connection with the Loan (for the avoidance
of doubt, the parties acknowledge that, as of the Closing Date, no letters of credit are required in connection with the Loan);
(h) Borrower's failure to maintain insurance as required by this Agreement or to pay any taxes or assessments affecting the
Project; (i) damage or destruction to the Project caused by the negligent or intentional acts or omissions of Borrower, its
agents, employees, or contractors (excluding any negligent acts or omissions that are fully covered by Borrower's insurance);
(j) Borrower's failure to perform its obligations with respect to environmental matters under Article 5; (k) Borrower's
failure to pay for any loss, liability or expense incurred by Lender arising out of any Lender Investment Claim or any other claim
or allegation made by Borrower, its successors or assigns, or any creditor of Borrower, that this Agreement or the transactions
contemplated by the Loan Documents establish a joint venture, partnership or other similar arrangement between Borrower and Lender;
or (l) any brokerage commission or finder's fees claimed in connection with the transactions contemplated by the Loan Documents.
Borrower also shall be personally liable to Lender for any and all attorneys' fees and expenses and court costs incurred by Lender
in enforcing this Section 13.1(2) or otherwise incurred by Lender in connection with any of the foregoing matters,
regardless of whether such matters are legal or equitable in nature or arise under tort or contract law.

 

    	-49-

    	 

    

 

(3)         Notwithstanding
anything to the contrary contained in the Loan Documents, the limitation on Borrower's liability contained in Section 13.1(1)
SHALL BECOME NULL AND VOID and shall be of no further force and effect if:

 

(a)       any
Transfer in violation of the Loan Documents occurs;

 

(b)       Borrower
files a petition under the United States Bankruptcy Code or similar state insolvency laws; or

 

(c)       Borrower
becomes the subject of an involuntary proceeding under the United States Bankruptcy Code or similar state insolvency laws, and
either (i) Borrower or any Affiliate of Borrower conspired or cooperated with, or solicited, one or more creditors of Borrower
to commence such involuntary proceeding, or (ii) the claims of one or more of the creditors of Borrower that commenced such involuntary
proceeding arise from Debts incurred by Borrower in violation of this Agreement, or (iii) Borrower fails to use commercially reasonable
efforts to obtain a dismissal of such involuntary proceeding.

 

(4)         The
limitation on Borrower's personal liability in Section 13.1(1) shall not modify, diminish or discharge the personal liability
of any Guarantor.

 

(5)         Nothing
in this Section 13.1 shall be deemed to be a waiver of any right which Lender may have under Sections 506(a), 506(b),
1111(b) or any other provision of the United States Bankruptcy Code, as such sections may be amended, or corresponding or superseding
sections of the Bankruptcy Amendments and Federal Judgeship Act of 1984, to file a claim for the full amount due to Lender under
the Loan Documents or to require that all Collateral shall continue to secure the amounts due under the Loan Documents.

 

    	-50-

    	 

    
 

Section
13.2         Limitation on Liability of Lender's Officers, Employees, Etc.
 Any obligation or liability whatsoever of Lender which may arise at any time under this Agreement or any other Loan
Document shall be satisfied, if at all, out of Lender's assets only. No such obligation or liability shall be personally
binding upon, nor shall resort for the enforcement thereof be had to, the property of any of Lender's shareholders,
directors, officers, employees or agents, regardless of whether such obligation or liability is in the nature of contract,
tort or otherwise.

 

[Remainder
of page intentionally left blank.]

 

    	-51-

    	 

    
  

EXECUTED
as of the date first written above.

 

	 	LENDER:
	 	 
	 	GENERAL ELECTRIC CAPITAL 

CORPORATION, a Delaware corporation
	 	 
	 	By:	/s/
    David R. Martindale
	 	 	Name:	David
    R. Martindale
	 	 	Title:	Managing Director
	 	 
	 	BORROWER:
	 	 
	 	COP – WESTERN AVE., LLC, a California limited liability company
	 	 
	 	By:	Cornerstone Operating Partnership, L.P., a Delaware limited partnership, its Sole Member
	 	 
	 	 	By:	Cornerstone Core Properties REIT, Inc., a Maryland corporation, its General Partner
	 	 	 	 
	 	 	 	By:	/s/ Kent Eikanas
	 	 	 	 	Name:	Kent Eikanas
	 	 	 	 	Title:	President and Chief 

Operating Officer

 

    	S-1

    	 

    
 

EXHIBIT
A

 

LEGAL
DESCRIPTION OF PROJECT

 

That
certain real property located in the City of Torrance, County of Los Angeles, State of California, and is described as follows:

 

PARCEL
A:

 

THOSE
PORTIONS OF LOTS 18, 19 AND 20 OF TRACT NO. 52172-02, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA,
AS PER MAP RECORDED IN BOOK 1238 PAGES 17 TO 22, INCLUSIVE, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, AS DESCRIBED
AS PARCEL 3 IN EXHIBIT "A" OF THAT CERTAIN CERTIFICATE OF COMPLIANCE FOR LOT LINE ADJUSTMENT 99-2594, RECORDED DECEMBER
8, 2000 AS INSTRUMENT NO. 00-1917705, OFFICIAL RECORDS AND BEING MORE PARTICULARLY DESCRIBED AS A WHOLE AS FOLLOWS:

 

COMMENCING
AT THE NORTHEAST CORNER OF SAID LOT 18; THENCE ALONG THE NORTHERLY LINE OF SAID LOT 18, SOUTH 86° 30’ 05" WEST
0.67 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID NORTHERLY LINE OF LOT 18, "SOUTH" 798.54 FEET TO THE SOUTHERLY
LINE OF SAID LOT 20; THENCE ALONG THE SOUTHERLY LINE OF SAID LOT 20, SOUTH 89° 59’ 31" WEST 346.30 FEET TO THE
SOUTHWEST CORNER OF SAID LOT 20; THENCE ALONG THE WESTERLY LINE OF SAID LOTS 18, 19, AND 20, NORTH 00° 23’ 15"
WEST 690.86 FEET; THENCE NORTH 89° 36’ 45" EAST 1.89 FEET TO A POINT OF A NON TANGENT CURVE CONCAVE SOUTHEASTERLY,
HAVING A RADIUS OF 90.00 FEET, A RADIAL LINE TO SAID POINT BEARS SOUTH 88° 54’ 26" WEST; THENCE NORTHEASTERLY ALONG
SAID CURVE, THROUGH A CENTRAL ANGLE OF 87° 35’ 39", AN ARC LENGTH OF 137.59 FEET; THENCE ALONG THE NORTHERLY LINE
OF SAID LOT 18, NORTH 86° 30’ 05" EAST 265.09 FEET TO THE TRUE POINT OF BEGINNING.

 

PARCEL
B:

 

EASEMENTS
FOR VEHICULAR AND PEDESTRIAN INGRESS AND EGRESS, DRAINAGE, FIRE HYDRANTS, UNDERGROUND UTILITIES, AND REFUSE ENCLOSURE AS CREATED
BY THAT CERTAIN DECLARATION AND GRANT OF EASEMENTS AND RECIPROCAL EASEMENT AGREEMENT, RECORDED SEPTEMBER 21, 2000 AS INSTRUMENT
NO. 00-1482684, OVER PORTIONS OF CERTAIN PARCELS OF LAND DESCRIBED AS PARCELS 1 AND 2 IN EXHIBIT "A" OF THAT CERTAIN
CERTIFICATE OF COMPLIANCE FOR LOT LINE ADJUSTMENT 99-2594, RECORDED DECEMBER 8, 2000 AS INSTRUMENT NO. 00-1917705, AS MORE PARTICULARLY
DESCRIBED IN SAID DECLARATION, UPON THE TERMS, COVENANTS AND PROVISIONS THEREIN CONTAINED, AS AMENDED BY A DOCUMENT ENTITLED "FIRST
AMENDMENT TO DECLARATION GRANT OF EASEMENTS AND RECIPROCAL EASEMENT AGREEMENT", RECORDED DECEMBER 19, 2000 AS INSTRUMENT
NO. 00-1975273.

 

    	EXHIBIT A – Page 1

    	 

    

 

PARCEL
C:

 

THOSE
CERTAIN EASEMENT RIGHTS AS CREATED BY THAT CERTAIN DOCUMENT ENTITLED "DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
FOR HARBOR GATEWAY CENTER, INDUSTRIAL TRACT PARCEL", RECORDED AUGUST 6, 1999 AS INSTRUMENT NO. 99-1483487, AS AMENDED BY
DOCUMENTS RECORDED DECEMBER 10, 1999 AS INSTRUMENT NOS. 99-2285253, 99-2285254, AND 99-2285255, AFFECTING THE COMMON AREA, AS
DEFINED THEREIN. SUBJECT TO THE TERMS, COVENANTS AND PROVISIONS CONTAINED THEREIN.

 

    	EXHIBIT A – Page 2

    	 

    
 

EXHIBIT
B

 

BUDGET

 

	Sources
	GECC Loan	 	 	 	 
	- Initial Advance	 	$	8,900,000	 
	- Subsequent Advances	 	$	720,000	 
	 	 	 	 	 
	Borrower's Funds	 	$	10,408,200	 
	 	 	 	 	 
	Total Sources:	 	$	20,028,200	 
	 	 	 	 	 

	
	Uses
	 	 	 	 	 
	Equity Reimbursement for Acquisition	 	$	19,050,000	 
	 	 	 	 	 
	Interest Reserve	 	$	120,000	 
	 	 	 	 	 
	Fujitsu Tenant Improvements	 	$	600,000	 
	 	 	 	 	 
	Origination Fee	 	$	96,200	 
	 	 	 	 	 
	Closing Costs	 	$	162,000	 
	 	 	 	 	 
	Total Uses:	 	$	20,028,200	 

 

    	EXHIBIT B

    	 

    
 

SCHEDULE
2.1

 

ADVANCE
CONDITIONS

 

Part A
- Conditions to Initial Advance

Part B
- General Conditions

Part C
- Improvements Advances

 

PART
A. CONDITIONS TO INITIAL ADVANCE

 

The
initial advance of the Loan shall be subject to the terms of any commitment letter (if any) issued by Lender with respect to the
Loan, and Lender's receipt, review, approval and/or confirmation of the following, at Borrower's cost and expense, each in form
and content satisfactory to Lender in its sole discretion:

 

1.          The
Underwritten NOI of the Project generates a Cash on Cash Return of at least 6.5% and a Debt Service Coverage of at least 1.37:1.0.

 

2.          The
LTV Ratio does not exceed 75%.

 

3.          Borrower's
cash equity in the Project is at least $10,000,000.

 

4.          The
Loan Documents, executed by Borrower and, as applicable, each Borrower Party and each other party thereto.

 

5.          The
Origination Fee of $96,200.00 in cash.

 

6.          An
ALTA (or equivalent) mortgagee policy of title insurance in the maximum amount of the Loan, with reinsurance and endorsements
as Lender may require, containing no exceptions to title (printed or otherwise) which are unacceptable to Lender, and insuring
that the Mortgage is a first-priority Lien on the Project and related collateral.

 

7.          All
documents evidencing the formation, organization, valid existence, good standing, and due authorization of and for Borrower and
each Borrower Party and the authorization for the execution, delivery, and performance of the Loan Documents by Borrower and each
Borrower Party.

 

8.          Legal
opinions issued by counsel for Borrower and each Borrower Party, opining as to the due organization, valid existence and good
standing of Borrower and each Borrower Party, and the due authorization, execution, delivery, enforceability and validity of the
Loan Documents with respect to, Borrower and each Borrower Party; that the Loan, as reflected in the Loan Documents, is not usurious;
to the extent that Lender is not otherwise satisfied, that the Project and its use is in full compliance with all legal requirements;
and as to such other matters as Lender and Lender's counsel reasonably may specify.

 

    	Schedule 2.1 - Page 1

    	 

    

 

 

9.          Current
UCC searches for Borrower and the immediately preceding owner of the Project.

 

10.         Evidence
of insurance as required by this Agreement, and conforming in all respects to the requirements of Lender.

 

11.         A
current ALTA/ACSM land title survey of the Project, dated or updated to a date not earlier than thirty (30) days prior to
the date hereof, certified to Lender and the issuer of Lender's title insurance, prepared by a licensed surveyor acceptable to
Lender and such title insurer, and conforming to Lender's current standard survey requirements.

 

12.         A
current engineering report or architect's certificate with respect to the Project, covering, among other matters, inspection of
heating and cooling systems, roof and structural details, and showing no failure of compliance with building plans and specifications,
applicable legal requirements (including requirements of the Americans with Disabilities Act) and fire, safety and health standards.
Such report shall also include an assessment of the Project's tolerance for earthquake and seismic activity.

 

13.         A
current Site Assessment.

 

14.         A
current rent roll of the Project, which Borrower or the current owner of the Project shall represent and warrant is true and correct.
Such rent roll shall include the following information: (a) tenant names; (b) unit/suite numbers; (c) area of each
demised premises and total area of the Project (stated in net rentable square feet); (d) rental rate (including escalations)
(stated in gross amount and in amount per net rentable square foot per year); (e) lease term (commencement, expiration and
renewal options); (f) expense pass-throughs; (g) cancellation/termination provisions; (h) security deposit; and
(i) material operating covenants and co-tenancy clauses. In addition, Borrower shall provide Lender with a copy of the standard
lease form to be used by Borrower in leasing space in the Project, and, at Lender's request, true and correct copies of all leases
of the Project.

 

15.         A
copy of the Management Agreement, certified by Borrower as being true, correct and complete.

 

16.         Borrower's
deposit with Lender of the amount required by Lender to impound for taxes and assessments and insurance under Article 3
and to fund any other required escrows or reserves.

 

17.         Evidence
that the Project and the operation thereof comply with all legal requirements, including that all requisite certificates of occupancy,
building permits, and other licenses, certificates, approvals or consents required of any governmental authority have been issued
without variance or condition and that there is no litigation, action, citation, injunctive proceedings, or like matter pending
or threatened with respect to the validity of such matters. At Lender's request, Borrower shall furnish Lender with a zoning endorsement
to Lender's title insurance policy, zoning letters from applicable municipal agencies, and utility letters from applicable service
providers.

 

    	Schedule 2.1 - Page 2

    	 

    

 

 

18.         No
change shall have occurred in the financial condition of Borrower or any Borrower Party or in the Underwritten NOI of the Project,
or in the financial condition of any major or anchor tenant, which would have, in Lender's sole judgment, a material adverse effect
on the Project or on Borrower's or any Borrower Party's ability to repay the Loan or otherwise perform its obligations under the
Loan Documents.

 

19.         No
condemnation or adverse zoning or usage change proceeding shall have occurred or shall have been threatened against the Project;
the Project shall not have suffered any significant damage by fire or other casualty which has not been repaired; no law, regulation,
ordinance, moratorium, injunctive proceeding, restriction, litigation, action, citation or similar proceeding or matter shall
have been enacted, adopted, or threatened by any governmental authority or other third party, which would have, in Lender's judgment,
a material adverse effect on Borrower, any Borrower Party or the Project.

 

20.         All
fees and commissions payable to real estate brokers, mortgage brokers, or any other brokers or agents in connection with the Loan
or the acquisition of the Project have been paid, such evidence to be accompanied by any waivers or indemnifications deemed necessary
by Lender.

 

21.         The
Budget showing all sources of funds and total costs relating to closing of the proposed transaction, all uses of the initial advance,
and amounts allocated for future advances (if any).

 

22.         Payment
of Lender's costs and expenses in underwriting, documenting, and closing the transaction, including fees and expenses of Lender's
inspecting engineers, consultants, and outside counsel.

 

23.         Estoppel
certificates and subordination, non-disturbance and attornment agreements from tenants, as requested by Lender.

 

24.         Such
credit checks, background investigations and other information required by Lender regarding Borrower, each Borrower Party and
any other Person holding a direct or indirect interest in Borrower, including such additional information as Lender may request
regarding compliance by Borrower, and by direct and indirect interest holders in Borrower, with the provisions of Article 9.

 

25.         Such
other documents or items as Lender or its counsel may require.

 

26.         The
representations and warranties contained in this Loan Agreement and in all other Loan Documents are true and correct.

 

27.         No
Potential Default or Event of Default shall have occurred or exist.

 

    	Schedule 2.1 - Page 3

    	 

    
 

PART
B. GENERAL CONDITIONS

 

Each
advance of the Loan from the Interest Reserve and Fujitsu Tenant Improvements line items of the Budget shall be shall be subject
to Lender's receipt, review, approval and/or confirmation of the following, each in form and content satisfactory to Lender in
its sole discretion:

 

1.          There
shall exist no Potential Default or Event of Default (currently and after giving effect to the requested advance).

 

2.          The
representations and warranties contained in this Agreement and in all other Loan Documents are true and correct as of the date
of the requested advance.

 

3.          Such
advance shall be secured by the Loan Documents, subject only to those exceptions to title approved by Lender at the time of Loan
closing, as evidenced by title insurance endorsements satisfactory to Lender.

 

4.          Borrower
shall have paid Lender's costs and expenses in connection with such advance (including title charges, and costs and expenses of
Lender's inspecting engineer and attorneys).

 

5.          No
change shall have occurred in the financial condition of Borrower or any Borrower Party, or in the Underwritten NOI of the Project,
or in the financial condition of any major or anchor tenant, which would have, in Lender's sole judgment, a material adverse effect
on the Loan, the Project, or Borrower's or any Borrower Party's ability to perform its obligations under the Loan Documents.

 

6.          Borrower
shall have delivered to Lender all information requested by Lender pursuant to Article 9 and all Interest Holder certifications
then required under Section 8.1.

 

7.          No
condemnation or adverse, as determined by Lender, zoning or usage change proceeding shall have occurred or shall have been threatened
against the Project; the Project shall not have suffered any damage by fire or other casualty which has not been repaired or is
not being restored in accordance with this Agreement; no law, regulation, ordinance, moratorium, injunctive proceeding, restriction,
litigation, action, citation or similar proceeding or matter shall have been enacted, adopted, or threatened by any governmental
authority, which would have, in Lender's judgment, a material adverse effect on the Project or Borrower's or any Borrower Party's
ability to perform its obligations under the Loan Documents.

 

8.          Lender
shall have no obligation to make any additional advance for less than $20,000, except for the final additional advance; provided,
however, that the foregoing minimum advance amount shall not apply to advances from the Interest Reserve line item of the Budget.

 

9.          Lender
shall have no obligation to make advances more often than once in any one-month period.

 

10.         Lender
shall not under any circumstances be obligated to make (a) any advance from the Interest Reserve line item of the Budget
after March 5, 2013 or (b) any advance from the Fujitsu Tenant Improvements line item of the Budget after June 30,
2013.

 

    	Schedule 2.1 - Page 4

    	 

    

 

 

11.         At
the option of Lender (a) each advance request shall be submitted to Lender at least ten (10) Business Days prior to
the date of the requested advance, and (b) all advances shall be made at the address of Lender set forth in Section 12.1
or at such other place as Lender may designate unless Lender exercises its option to make an advance directly to the Person
to whom payment is due.

 

12.         Borrower
shall immediately deposit all proceeds of the Loan advanced by Lender in a separate and exclusive account to be used solely for
the purposes specified in this Agreement and in Borrower's advance request and, upon Lender's request, shall promptly furnish
Lender with evidence thereof.

 

Each
request for and acceptance of a Loan advance shall be deemed to constitute, as of the date of such request or acceptance, a representation
and warranty by Borrower that the statements contained in paragraphs 2 and 3 above are true and correct.

 

PART
C. INTEREST RESERVE ADVANCES

 

Each
advance of the Loan from the Interest Reserve line item of the Budget also shall be subject to Lender's receipt of evidence reasonably
satisfactory to Lender that Operating Revenues are insufficient (after payment of current Operating Expenses) to pay Debt Service
then owing on the Loan. For purposes of this paragraph, any amounts paid by Borrower into the Capital Replacements Reserve described
in Schedule 2.4(1) shall not be included within Operating Expenses.

 

PART
D. IMPROVEMENTS ADVANCES

 

Each
advance of the Loan from the Fujitsu Tenant Improvements line item of the Budget, and each advance of funds from the Capital Replacements
Reserve, shall be made on the following terms and conditions:

 

1.          Each
request for such an advance shall specify the amount requested, shall be on forms satisfactory to Lender, and shall be accompanied
by appropriate invoices, bills paid affidavits, lien waivers, title updates, endorsements to the title insurance, and other documents
as may be required by Lender. Such advances may be made, at Lender's election, either: (a) in reimbursement for expenses
paid by Borrower, or (b) for payment of expenses incurred and invoiced but not yet paid by Borrower, or (c) with respect
to tenant improvements, by funding allowances for tenant improvements (the "Fujitsu TI's") undertaken
to be constructed by Fujitsu Ten Corp. of America ("Fujitsu") and completed in accordance with its lease
with Borrower dated May 1, 2012 (the "Fujitsu Lease"). Lender, at its option and without further direction
from Borrower, may disburse any advance to the Person to whom payment is due or through an escrow satisfactory to Lender. Borrower
hereby irrevocably directs and authorizes Lender to so advance the proceeds of the Loan or the Capital Replacements Reserve, as
applicable. All sums so advanced from the Fujitsu Tenant Improvements line item shall constitute advances of the Loan and shall
be secured by the Loan Documents. Lender may, at Borrower's expense, conduct an audit, inspection, or review of the Project to
confirm the amount of the requested advance.

 

    	Schedule 2.1 - Page 5

    	 

    

 

 

2.          Borrower
shall have submitted and Lender shall have approved (a) for capital replacements work only, the improvements to be constructed,
(b) for capital replacements work only, the plans and specifications for such improvements, which plans and specifications
may not be changed without Lender's prior written consent, and (c) if requested by Lender, each contract or subcontract for
an amount in excess of $20,000 for the performance of labor or the furnishing of materials for such improvements.

 

3.          Borrower
shall have submitted and Lender shall have approved the time schedule for completing the capital replacements work. After Lender's
approval of a detailed budget for such capital replacements work, such budget may not be changed without Lender's prior written
consent. If the estimated cost of such capital replacements work exceeds the unadvanced portion of the amount allocated therefor
in the approved budget, then Borrower shall provide such security as Lender may require to assure the Lien-free completion of
such work before the scheduled completion date.

 

4.          If
requested by Lender, Borrower shall have delivered to Lender reasonably satisfactory evidence that Fujitsu has satisfied the conditions
under the Fujitsu Lease for the tenant improvement allowance disbursement that corresponds to Borrower's requested Loan advance.

 

5.          All
Fujitsu TI's constructed prior to the date an advance is requested shall be completed to the satisfaction of Lender and Lender's
engineer and in accordance with the plans and budget for such work and all legal requirements. If Lender wishes to conduct an
inspection of the Fujitsu premises at the Project to confirm satisfaction of the foregoing condition, Lender shall endeavor to
coordinate such inspection with any inspection planned by Borrower, and shall otherwise use commercially reasonable efforts to
schedule any such inspection so as to minimize any disruption in Fujitsu’s tenant improvement work and allow Borrower to
meet its funding obligations under the Fujitsu Lease in a timely manner (provided Borrower has timely satisfied all of its obligations
under this Agreement with respect to the requested Loan advance).

 

6.          All
capital replacements work constructed prior to the date an advance is requested shall be completed to the satisfaction of Lender
and Lender's engineer and in accordance with the plans and budget for such work, as approved by Lender, and all legal requirements.

 

7.          Borrower
shall not use any portion of any advance for payment of any other cost except as specifically set forth in a request for advance
approved by Lender in writing.

 

8.          Each
advance, except for a final advance, shall be in the amount of actual costs incurred less ten percent (10%) of such costs
as retainage to be advanced as part of a final advance.

 

9.          No
funds will be advanced for materials stored at the Project unless Borrower furnishes Lender satisfactory evidence that such materials
are properly stored and secured at the Project.

 

    	Schedule 2.1 - Page 6

    	 

    

 

 

10.         Borrower
shall have submitted to Lender evidence (including canceled checks, invoices and receipts) satisfactory to Lender that the proceeds
of all prior advances have been used for the purposes for which such advances were requested.

 

11.         As
a condition to funding the final advance for the Fujitsu TI's:

 

(a)       Fujitsu
is in occupancy, has accepted the leased premises and is paying rent under the Fujitsu Lease, without offset, credit or defense,
as evidenced by a tenant estoppel certificate executed by Fujitsu, addressed to Lender, in form satisfactory to Lender;

 

(b)       the
brokers to whom lease commissions are payable (if any) have acknowledged payment in full of all commissions due with respect to
the lease in question and have released Lender, Borrower, the Project and the lease from all commissions due with respect to such
lease; and

 

(c)       Borrower
shall have furnished Lender with (i) a true and correct copy of the final and unconditional certificate of occupancy for
the space under said lease, issued without restriction by the appropriate governmental authority having jurisdiction over the
Project; and (ii) final original lien waivers executed by each contractor, subcontractor and materialmen supplying labor
or materials for the Fujitsu TI's;

 

provided, however,
that if any Loan funds remain undisbursed in the Fujitsu Tenant Improvements line item of the Budget after either (x) the
Fujitsu TI's have been completed in accordance with the Fujitsu Lease and the foregoing requirements, and all of Borrower's tenant
improvement allowance obligations with respect thereto have been fully satisfied, or (y) the time period during which Fujitsu
is entitled to seek disbursements of the tenant improvement allowance under the Fujitsu Lease has expired, and Borrower has no
further obligation to fund any such tenant improvements allowance disbursements, then upon Borrower's request (and satisfaction
of the conditions set forth in Part B), Lender shall advance to Borrower the remaining Loan funds in such line item.

 

    	Schedule 2.1 - Page 7

    	 

    
 

SCHEDULE
2.3(4)

 

LIBOR
BREAKAGE AMOUNT DEFINITION

 

The
"Libor Breakage Amount" means the sum on the date of prepayment of each Libor Monthly Interest Shortfall
(as hereinafter defined) for the remaining term of the then current Interest Period; provided, however, that if the difference
between (1) the Libor Rate in effect for the then current Interest Period (or the Libor Floor Rate, if greater) and (2) the Libor
Replacement Rate (as hereinafter defined) is one-half of one percent (0.5%) or less, then notwithstanding anything to the contrary
contained in this Schedule 2.3(4), the Libor Breakage Amount shall be deemed to be zero.

 

The
"Libor Monthly Interest Shortfall" will be calculated by Lender for each monthly payment date through
and including the monthly payment date immediately following the end of the then current Interest Period and means the product
of (1) the prepaid principal balance of the Loan divided by 12, and (2) the positive result, if any, from (a) the Libor Rate in
effect for the then current Interest Period (or the Libor Floor Rate, if greater), plus a break contract fee of 20 basis points,
minus (b) the Libor Replacement Rate (as hereinafter defined).

 

The
"Libor Replacement Rate" means the rate calculated by linear interpolation (rounded to one thousandth
of one percent (i.e., .001%)) of the rates, as listed on Reuters Screen LIBOR01 Page as of 11:00 a.m. London Time on the second
(2nd) full Eurodollar Business Day next preceding the prepayment date, of the British Bankers Association LIBOR Rate (rounded
upward to the nearest one sixteenth of one percent) for U.S. Dollar deposits with designated maturities (one longer and one shorter)
most nearly approximating the number of days remaining in the then current Interest Period as of the prepayment date. If Reuters
(a) publishes more than one (1) such Libor rate, the average of such rates shall apply, or (b) ceases to publish such Libor rate,
or if in Lender's reasonable judgment the information contained on such page ceases to accurately reflect the rate offered by
leading banks in the London interbank market as reported by any publicly available source of similar market data selected by Lender,
such Libor rate shall be determined from such substitute financial reporting service as Lender in its discretion shall determine.
The term "Eurodollar Business Day" shall mean any Business Day on which banks in the City of London are
generally open for interbank or foreign exchange transactions.

 

    	Schedule 2.3(4) – Page 1

    	 

    
 

SCHEDULE
2.4(1)

 

CAPITAL
REPLACEMENTS RESERVE

 

Capital
Replacements Reserve. On January 15, 2013, and by the fifteenth (15th) day of each January thereafter, Borrower shall
pay to Lender, for deposit into a capital improvements reserve established by Lender (the "Capital Replacements Reserve"),
an amount equal to the positive difference between (1) the product obtained by multiplying $0.10 by the existing number of
rentable square feet in the Project and (2) the sum of all expenditures by Borrower for capital improvements and replacements
to the Project during the preceding calendar year which were approved in advance by Lender and not paid with disbursements from
the Capital Replacements Reserve (provided that for the calendar year in which the Closing Date occurs, such amount shall be pro-rated
to reflect the portion of the calendar year during which the Loan is outstanding). The Capital Replacements Reserve will be held
by Lender, without interest, and may be commingled with Lender's own funds. The Capital Replacements Reserve shall be advanced
by Lender to Borrower for capital improvements and capital repairs to the Project, as approved by Lender; however, funds in the
Capital Replacements Reserve shall not be available for financing any of the improvements for which capital improvements advances
are contemplated by the Budget. Borrower grants to Lender a security interest in the Capital Replacements Reserve. While an Event
of Default or a Potential Default exists, Lender shall not be obligated to advance to Borrower any portion of the Capital Replacements
Reserve, and while an Event of Default exists, Lender shall be entitled, without notice to Borrower, to apply any funds in
the Capital Replacements Reserve to satisfy Borrower's obligations under the Loan Documents in such order and manner as Lender
shall determine in its sole discretion. Borrower and Lender shall meet annually on a date selected by Lender to establish monthly,
quarterly, and annual budgets for capital expenditures for the Project for the succeeding calendar year (the "Capital
Expenditures Budget"). The Capital Expenditures Budget shall be based on the previous year's experience and an assessment
of anticipated future needs, and shall be subject to Lender's approval. The Capital Replacements Reserve shall be advanced in
accordance with the conditions for improvements advances under Part D of Schedule 2.1.

 

    	Schedule 2.4(1) – Page 1

    	 

    
 

SCHEDULE
4.1

 

ORGANIZATIONAL
MATTERS

 

A.           Borrower's
Organizational Structure.

 

[ORGANIZATIONAL
CHART ATTACHED]

 

B.           Organizational
Information: (Borrower and each Borrower Party).

 

	Legal
    Name *	 	State
        of

        Incorporation
        or

        Organization
	 	Type
        of

        Entity
	 	State

        Organizational

        ID No. **
	 	Federal

        Tax
        ID No.

	COP – Western Ave., LLC	 	CA	 	Ltd. Liability Co.	 	200633210072	 	20-5946107
	Cornerstone Operating Partnership, L.P.	 	DE	 	Ltd. Partnership	 	3888683	 	72-1589471
	Cornerstone Core Properties REIT, Inc.	 	MD	 	Corporation	 	D10272573	 	73-1721791

* As it appears in official filings
in the state of its incorporation or organization.

**If none issued by applicable state
of organization/incorporation, insert "none issued."

 

	C.	Location Information.	 	 
	 	 	 	 
	1.	Borrower:	 	 
	 	a.	Chief Executive Office:	 	1920 Main Street, Suite
        400

        Irvine, California 92614

        Telephone No.: (949) 852-1007

	 	 	 	 	 
	 	b.	Location of any prior Chief Executive Office (during last 5 years):	 	N/A
	 	 	 	 	 
	 	c.	Other Office Location:	 	N/A
	 	 	 	 	 
	 	d.	Location of Collateral:	 	At the Project and
	 	 	 	 	 
	2.	Borrower Parties (Chief Executive Office):	 	 
	 	a.	Cornerstone Operating Partnership, L.P.:	 	same as Borrower
	 	b.	Cornerstone Core Properties REIT, Inc.:	 	same as Borrower

 

 

    	Schedule 4.1 – Page 1

    	 

    

 

BORROWER'S
ORGANIZATIONAL CHART

 

 

 

    	Schedule 4.1 – Page 2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}]]