Document:

KBS SOR Q2 2014 Exhibit 10.2

Exhibit 10.2

LOAN ASSUMPTION AND SUBSTITUTION AGREEMENT
by and among
110 WILLIAM, LLC 
(Borrower),
110 WILLIAM PROPERTY INVESTORS III, LLC 
(New Borrower),
KENT M. SWIG and LONGWING INCORPORATED 
(collectively, Guarantor),
SAVANNA REAL ESTATE FUND III, L.P. 
(New Guarantor)
and
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF UBS-BARCLAYS COMMERCIAL MORTGAGE TRUST 2012-C2, COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2012-C2 
(Lender)
	
		
	Dated:
	As of May 2, 2014

	 
	 

	 
	 

	Block:
	77

	Lot:
	8

	County:
	New York

	State:
	New York

	 
	 

	PREPARED BY AND

	RECORD AND RETURN TO:

	 
	 

	Seyfarth Shaw LLP

	620 Eighth Avenue

	New York, New York 10018

	Attention: Mitchell S. Kaplan, Esq.

Loan No. 61-1100001
LOAN ASSUMPTION AND SUBSTITUTION AGREEMENT
This LOAN ASSUMPTION AND SUBSTITUTION AGREEMENT (“Agreement”) is made this 2nd day of May, 2014, by and among U.S. Bank National Association, as Trustee for the Registered Holders of UBS-Barclays Commercial Mortgage Trust 2012-C2, Commercial Mortgage Pass-Through Certificates, Series 2012-C2 (together with its successors and assigns, “Lender”), 110 William, LLC, a Delaware limited liability company (“Borrower”), Kent M. Swig, an individual (“Swig”), Longwing Incorporated, a Delaware corporation (“Longwing”; together with Swig, collectively and each as the context may require, “Guarantor”), 110 William Property Investors III, LLC, a Delaware limited liability company (together with its permitted successors and assigns, “New Borrower”), and Savanna Real Estate Fund III, L.P., a Delaware limited partnership (together with its permitted successors and assigns, “New Guarantor”).
RECITALS
		
	A.
	Lender’s predecessor in interest, UBS Real Estate Securities Inc., a Delaware corporation (“Original Lender”), made a loan to Borrower in the original principal amount of One Hundred Forty-One Million Five Hundred Thousand and 00/100 Dollars ($141,500,000.00) (“Loan”), under the terms and provisions set forth in the following loan documents, all of which are dated as of June 11, 2012, unless otherwise noted:

		
	1.
	Loan Agreement, executed by Borrower and Original Lender (“Loan Agreement”);

		
	2.
	Amended and Restated Promissory Note (“Note”) in the original principal amount of the Loan, made by Borrower and payable to Original Lender;

		
	3.
	Consolidated, Amended and Restated Mortgage and Security Agreement (as assigned, as set forth below, “Security Instrument”), executed by Borrower, as mortgagor, for the benefit of Original Lender, as mortgagee, which secures the Note and other obligations of Borrower and which was recorded on June 25, 2012, as CRFN 2012000249538, in the Official Records of New York County, New York (“Official Records”), as assigned to Lender pursuant to that certain Assignment of Mortgage, dated as of July 17, 2012 and recorded on August 29, 2012, as CRFN 2012000342467, in the Official Records.  The Security Instrument encumbers the real and personal property as more particularly described therein, including, without limitation, the real property described in Exhibit A attached hereto and made a part hereof (the “Property”);

		
	4.
	Assignment of Leases and Rents (as assigned, as set forth below, the “Assignment of Leases”), executed by Borrower in favor of Original Lender and recorded on June 25, 2012, as CRFN 2012000249539 in the Official Records, as assigned to Lender pursuant to that certain Assignment of Assignment of Leases and Rents, dated as of July 17, 2012 and recorded on August 29, 2012, as CRFN 2012000342468 in the Official Records.

		
	5.
	UCC-1 Financing Statement identifying Borrower as the debtor and Original Lender as the secured party and recorded on June 25, 2012, as CRFN 2012000249540 in the Official Records, as assigned to Lender pursuant to that certain UCC-3 Financing Statement Amendment recorded on August 29, 2012, as CRFN 2012000342469 in the Official Records;

		
	6.
	UCC-1 Financing Statement identifying Borrower as the debtor and Original Lender as the secured party and filed on June 14, 2012, as filing number 20122304808 with the Secretary of State of the State of Delaware (the “Filing Office”), as assigned to Lender pursuant to that certain UCC-3 Financing Statement Amendment filed on September 6, 2012, as filing number 20123442979, with the Filing Office;

		
	7.
	Assignment of Management Agreement and Subordination of Management Fees (“Manager’s Subordination”), executed by Swig Equities, LLC, a New York limited liability company (“Manager”), and Borrower in favor of Original Lender;

		
	8.
	Guaranty of Recourse Obligations, executed by Swig in favor of Original Lender (“Swig Guaranty”);

		
	9.
	Guaranty of Recourse Obligations, executed by Longwing in favor of Original Lender (“Longwing Guaranty”; together with the Swig Guaranty, collectively and each as the context may require, the “Guaranty”);

		
	10.
	Environmental Indemnity Agreement, executed by Borrower and Swig in favor of Original Lender (the “Environmental Indemnity”);

		
	11.
	Cash Management Agreement (the “Cash Management Agreement”), executed by and among Borrower, Original Lender, Manager and Wells Fargo Bank, N.A. (“Cash Management Bank”);

		
	12.
	Deposit Account Control Agreement (“Lockbox Agreement”), executed by and among Borrower, Original Lender, Manager and Cash Management Bank;

		
	13.
	Post-Closing Obligations Agreement (“Post-Closing Agreement”), executed by Borrower and Original Lender; and

		
	14.
	Operations and Maintenance Agreement, executed by Borrower and Original lender (the “OM Agreement”)

The above documents, together with any other documents and instruments evidencing and/or securing the Loan that were effective prior to the Effective Date (as hereinafter defined), are referred to herein as the “Original Loan Documents”.  This Agreement, the Original Loan Documents, the New Guaranty, the New Environmental Indemnity, the New Lockbox Agreement, the First Amendment to Cash Management Agreement, the New Assignment of Management Agreement (as each such capitalized term is defined herein), and all other documents and instruments executed by New Borrower and/or New Guarantor in connection with this Agreement, and all other documents and instruments evidencing and/or securing the Loan, including, in each case, any subsequent 

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amendments, modifications or supplements thereto or replacements, substitutions or restatements thereof are hereinafter collectively defined as the “Loan Documents”.  As used herein, the term “Excluded Original Loan Documents” shall mean the Manager’s Subordination, the Swig Guaranty, the Longwing Guaranty, the Environmental Indemnity and the Lockbox Agreement.
		
	B.
	Borrower and Lender hereby confirm that as of May 2, 2014:

		
	1.
	The principal balance outstanding under the Note and the outstanding principal balance secured by the Security Instrument was One Hundred Forty One Million Five Hundred Thousand and 00/100ths Dollars ($141,500,000.00);

		
	2.
	Accrued interest on the Note has been paid through April 5, 2014;

		
	3.
	Accrued but unpaid interest on the Note was Four Hundred Eighty Eight Thousand Seven Hundred Ninety Six and 03/100ths Dollars ($488,796.03);

		
	4.
	The balance in the Required Repair Account was Five Hundred Sixty One Thousand Four and 50/100ths Dollars ($561,004.50);

		
	5.
	The balance in the Cash Management Account (as such term is defined in the Cash Management Agreement) was Two Million Nine Thousand Three Hundred Forty Nine and 93/100ths Dollars ($2,009,349.93);

		
	6.
	The balance in the Tax Subaccount was One Million Seven Hundred Fifty One Thousand One Hundred Seventy Five and 96/100ths Dollars ($1,751,175.96);

		
	7.
	The balance in the Insurance Subaccount was Three Hundred Thirty One Thousand One Hundred Thirteen and 71/100ths Dollars ($331,113.71);

		
	8.
	The balance in the Capital Expenditure Subaccount was Six Hundred Sixty Nine Thousand Three Hundred Fifty Four and 81/100ths Dollars ($669,354.81);

		
	9.
	The balance in the Rollover Subaccount was One Million Seven Hundred Six Thousand Seven Hundred Sixty Nine and 87/100ths Dollars ($1,706,769.87); and

		
	10.
	The balance in the Clearing Account was Five Thousand and 10/100ths Dollars ($5,000.00).

The account and subaccounts described in this Paragraph (B) shall have the meanings ascribed to them in the Cash Management Agreement.

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	C.
	Borrower desires to sell and convey the Property to New Borrower and to assign and convey all of its right, title and interest under the Loan Documents (except the Excluded Original Loan Documents) to New Borrower and New Borrower desires to purchase the Property from Borrower (collectively, the “Transfer”) (which sale and conveyance constitutes a Transfer under the Loan Agreement), and both Borrower and New Borrower desire to obtain from Lender its consent to such Transfer and the Assumption (as hereinafter defined) and a waiver of any right Lender may have under the Loan Documents to accelerate the Maturity Date by virtue of such Transfer.

		
	D.
	Subject to the terms and conditions hereof, Lender is willing to consent to the Transfer and waive any right of acceleration of the Maturity Date upon (i) assumption by New Borrower (the “Assumption”) of the Loan and all of the obligations of Borrower under the Original Loan Documents (other than the Excluded Original Loan Documents) and (ii) execution and delivery by New Borrower and New Guarantor, as applicable, of this Agreement, the New Environmental Indemnity (as defined below), the New Guaranty (as defined below), the New Lockbox Agreement (as defined below), the First Amendment to Cash Management Agreement (as defined below), and the New Manager’s Subordination (as defined below) in accordance with the terms and conditions of this Agreement and the other documents executed in connection with this Agreement.

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, including, without limitation, the mutual covenants and promises contained herein, the parties agree as follows:
		
	8.
	Incorporation.  The foregoing recitals are incorporated herein by this reference.

		
	9.
	Fee. As consideration for Lender’s execution of this Agreement and in addition to any other sums due hereunder, on the date hereof, Borrower and/or New Borrower have agreed to pay Lender for the account of its servicer(s) or Lender’s servicer(s) an assumption fee of Seven Hundred Seven Thousand Five Hundred and 00/100ths Dollars ($707,500.00).

		
	10.
	Consent. Subject to the terms and conditions hereof, Lender hereby consents to the Transfer, the termination of the existing property management agreement for the Property by Borrower, and the execution of the new property management agreement (“New Property Management Agreement”) between New Borrower and Swig Equities, LLC, a New York limited liability company (“New Manager”), in the form attached to the New Manager’s Subordination.

		
	11.
	Conditions Precedent.  The following are conditions precedent to the effectiveness of this Agreement; it being acknowledged and agreed that Lender’s execution and delivery of this Agreement shall mean that such conditions precedent are deemed satisfied, this Agreement is effective as of the Effective Date and Lender has consented to the Transfer and the Assumption:

		
	a.
	The irrevocable commitment of National Land Tenure Company, LLC, as agent for Stewart Title Insurance Company and First Nationwide Title Agency as agent for Stewart Title Insurance Company (collectively, “Title Company”), to issue a new 

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title insurance policy or an endorsement that brings forward the date of the existing title policy issued to Original Lender by the Title Company in form and substance acceptable to Lender, without deletions or exceptions other than Permitted Encumbrances and as otherwise expressly approved by Lender, insuring Lender with respect to such matters as Lender requires, including that the priority and validity of the Security Instrument has not been and will not be impaired by this Agreement, the sale and conveyance of the Property, or the transactions contemplated hereby, that any Taxes on the Property are not yet delinquent, and that the rights of Tenants at the Property are as tenants only with no rights of first refusal or options to purchase;
		
	b.
	Receipt and approval by Lender of: (i) an executed original of this Agreement; and (ii) any other documents and agreements which are required pursuant to this Agreement, in form and content acceptable to Lender;

		
	c.
	Submission for recording, or causing submission for recording, in the Official Records of the Deed (as defined below), the UCCs (as defined below) and such other documents and agreements, if any, required pursuant to this Agreement or which Lender has requested to be recorded or filed;

		
	d.
	Intentionally Deleted;

		
	e.
	Delivery to Lender of UCC-3 Financing Statements and UCC-1 Financing Statements (the “UCCs”) in proper form for recording or filing in the appropriate jurisdictions as determined by Lender;

		
	f.
	Execution and delivery to Lender by New Guarantor of an original Guaranty of Recourse Obligations, dated as of the date hereof (the “New Guaranty”), in favor of Lender and in form and substance acceptable to Lender;

		
	g.
	Execution and delivery to Lender by New Borrower and New Guarantor of an original Environmental Indemnity Agreement, dated as of the date hereof (the “New Environmental Indemnity”), in favor of Lender and in form and substance acceptable to Lender;

		
	h.
	Execution and delivery to Lender by New Borrower and New Manager, of an original Assignment of Management Agreement and Subordination of Management Fees (the “New Manager’s Subordination”), dated as of the date hereof, in form and substance acceptable to Lender;

		
	i.
	Execution and delivery to Lender by New Borrower, New Manager and Cash Management Bank of an original Deposit Account Control Agreement (the “New Lockbox Agreement”), dated as of the date hereof, in form and substance acceptable to Lender;

		
	j.
	Execution and delivery to Lender by New Borrower, Cash Management Bank, New Manager, Borrower, and Manager of an original First Amendment to Deposit Account Agreement (the “First Amendment to Cash Management Agreement”), dated as of the date hereof, in form and substance acceptable to Lender;

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	k.
	Execution and delivery to Lender of officer’s certificates addressing or attaching, as applicable, true, correct and complete copies of the organizational documents, resolutions, incumbency of officers and such other items as Lender may reasonably require with respect to New Borrower, New Guarantor and such other affiliates thereof as Lender shall reasonably require, setting forth, among other things, such entity’s authority to assume the Loan, execute and deliver the Loan Documents (except the Excluded Original Loan Documents), as applicable, and comply with all requirements in this Agreement and the other Loan Documents (except the Excluded Original Loan Documents), executed by the appropriate persons and/or on behalf of New Borrower and New Guarantor and such other affiliates thereof as Lender shall reasonably require;

		
	l.
	Execution and delivery to Lender of a Certificate of Authority, executed by New Borrower;

		
	m.
	The representations and warranties contained herein shall be true and correct in all material respects as of the Effective Date;

		
	n.
	Receipt by Lender of New Borrower’s insurance policies or certificates of insurance as required by Lender pursuant to the Loan Documents, as amended hereby, and in form, substance and amount required pursuant to the Loan Documents, as amended hereby;

		
	o.
	Receipt by Lender of an executed copy of the Agreement of Purchase and Sale, dated as of December 4, 2013, by and between Borrower and 110 William Holdings III, LLC, a Delaware limited liability company (the “Original Purchaser”), governing the terms of the sale of the Property from Borrower to New Borrower, together with executed copies of all further amendments, assignments and other modifications thereto, including, without limitation, an assignment and assumption of the Purchase Agreement to New Borrower (as amended and assigned, collectively, the “Purchase Agreement”);

		
	p.
	Receipt by Lender of an executed copy of the deed by which title to the Property will be conveyed to New Borrower (the “Deed”) and a bill of sale by which the personal property will be transferred to New Borrower, in each case, in form and substance acceptable to Lender;

		
	q.
	Receipt by Lender of executed copies of the (i) Assignment and Assumption of Leases, (ii) Assignment and Assumption of Contracts, Warranties and Guaranties and Other Intangible Property; (iii) Owner’s Affidavit, (iv) Tenant Notice Letters and (v) FIRPTA Affidavit, each in the form attached to the Purchase Agreement and otherwise in form and substance acceptable to Lender;

		
	r.
	Receipt by Lender of an executed copy of the termination of the existing property management agreement, in form and substance acceptable to Lender;

		
	s.
	Receipt by Lender of a copy of the New Property Management Agreement for the Property with the New Manager, in form and substance acceptable to Lender;

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	t.
	Receipt by Lender of all tenant estoppel certificates obtained by Borrower, to the extent required pursuant to the Purchase Agreement;

		
	u.
	Receipt by Lender of an executed Form W-9 for New Borrower;

		
	v.
	Receipt by Lender of the written approval of the Assumption and other transactions contemplated hereby by the special servicer of the Loan and any loan participants, if applicable;

		
	w.
	Receipt by Lender of the written approval of the Assumption and other transactions contemplated hereby by Pearlmark Mezzanine Realty Partners III, L.L.C. and TMRP III Co-Investment, L.L.C., each a Delaware limited liability company and, collectively, the mezzanine lenders of the Loan (collectively, the “Mezzanine Lenders”);

		
	x.
	Receipt by Lender of the written approval of the assumption by 110 William Mezz III, LLC (the “New Mezzanine Borrower”), the sole member of New Borrower, of the Mezzanine Loan and other transactions contemplated thereby by the Mezzanine Lenders;

		
	y.
	Receipt by Lender from each relevant Rating Agency of a “no downgrade letter” with respect to the Assumption or waiver by such Rating Agency of its right to review the terms of the Assumption and other transactions contemplated hereby;

		
	z.
	Receipt by Lender of an opinion of counsel to Lender with respect to the compliance of the Assumption and other transactions contemplated hereby with the provisions of the Internal Revenue Code as the same pertain to real estate mortgage investment conduits, such opinion to be in form, scope and substance satisfactory to Lender;

		
	aa.
	Receipt by Lender from New Borrower of opinions of New Borrower’s and New Guarantor’s counsel (i) with respect to non-consolidation issues (the “New Non-consolidation Opinion”) and (ii) with respect to due formation, execution, authority, and enforceability of this Agreement and the other loan documents executed in connection herewith and such other matters as Lender may reasonably require, all such opinions in form, scope and substance satisfactory to Lender;

		
	bb.
	Payment to Lender of the fee provided for in Section 2 above; and

		
	cc.
	Payment to Lender of all of Lender’s costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, including, without limitation, title insurance costs, escrow and recording fees, rating agency fees, attorneys’ fees, appraisal, engineers’ and inspection fees and documentation costs and charges, whether such services are furnished by Lender’s employees, agents or independent contractors.

		
	5.
	Effective Date.  This Agreement shall be effective as of the date hereof (“Effective Date”) and upon the Effective Date, this Agreement shall be incorporated into the terms of the Loan Documents.

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	6.
	Assumption. New Borrower (i) hereby assumes and agrees to pay when due all sums due or to become due or owing by Borrower under the Note, the Loan Agreement, the Security Instrument, and the other Original Loan Documents (except the Excluded Original Loan Documents), each as amended hereby and by the First Amendment to Cash Management Agreement, as applicable, (ii) shall hereafter faithfully perform all of Borrower’s or, as applicable, “Maker’s” or “Assignor’s” obligations under the Note, the Loan Agreement, the Security Instrument, and the other Original Loan Documents (except the Excluded Original Loan Documents), each as amended hereby and by the First Amendment to Cash Management Agreement, as applicable, (iii) shall be bound by all of the provisions of the Note, the Loan Agreement, the Security Instrument, and the other Loan Documents (except the Excluded Original Loan Documents), each as amended hereby and by the First Amendment to Cash Management Agreement, as applicable, and (iv) assumes all liabilities and obligations of Borrower or, as applicable, “Maker” or “Assignor” under the Note, the Loan Agreement, the Security Instrument, and the other Original Loan Documents (except the Excluded Original Loan Documents), each as amended hereby and by the First Amendment to Cash Management Agreement, as applicable, in each case, as if New Borrower were an original signatory thereto as “Borrower”, “Maker” or “Assignor”, as the case may be. The execution of this Agreement by New Borrower shall be deemed its execution of the Note, the Loan Agreement, the Security Instrument, and the other Original Loan Documents (except the Excluded Original Loan Documents), each as amended hereby and by the First Amendment to Cash Management Agreement, as “Borrower”, “Maker” or “Assignor”, as applicable.

		
	7.
	Partial Release of Borrower. Lender hereby releases (on the Effective Date) Borrower from liability under the Original Loan Documents; provided, however, Borrower is expressly not released from, and nothing contained herein is intended to limit, impair, waive, forgive, terminate or revoke, any of Borrower’s liabilities or obligations arising under the Note, the Loan Agreement, the Security Instrument, or any of the other Loan Documents, to the extent the same arise out of or are otherwise related to any act, condition or omission occurring or existing on or before the Effective Date (the “Retained Obligations”), and the Retained Obligations shall continue in full force and effect in accordance with the terms and provisions thereof and hereof. The Retained Obligations shall not be modified, discharged, waived, forgiven or reduced by any amendment or modification to, or extension, renewal, restatement or replacement of, the Note, the Loan Agreement, the Security Instrument, or any other Loan Document, including, without limitation, changes to the terms of repayment thereof, amendments, modifications, extensions or renewals of repayment dates, releases or subordinations of security in whole or in part, changes in the interest rate or advances of additional funds by Lender in its discretion for purposes related to those set forth in the Loan Documents.

Borrower agrees that from time to time without first requiring performance on the part of New Borrower, Lender may look to and require performance by Borrower of all Retained Obligations. Borrower waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest and notices of dishonor of all or any part of the indebtedness or any other obligation or liability now existing or hereafter arising under the Loan Documents.

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	8.
	Confirmation of Environmental Indemnity; Partial Release of Indemnitor. Lender hereby releases (on the Effective Date) Indemnitor (as defined in the Environmental Indemnity) from liability and obligations under the Environmental Indemnity to the extent first accruing after the Effective Date; provided, however, that the parties hereby acknowledge and agree that Indemnitor is expressly not released from and nothing contained herein is intended to limit, impair, terminate, waive, forgive or revoke, any of Indemnitor’s obligations under the Environmental Indemnity, if, or to the extent that, the same arise out of or in connection with any act, condition or omission occurring or existing on or before the Effective Date (the “Environmental Indemnitee Retained Obligations”), and that the Environmental Indemnitee Retained Obligations shall continue in full force and effect in accordance with the terms and provisions thereof and hereof. Indemnitor’s obligations under the Environmental Indemnity with respect to the Environmental Indemnitee Retained Obligations shall not be modified, discharged, waived, forgiven or reduced by any amendment or modification to, or extension, renewal, restatement or replacement of, the Note, the Security Instrument or any other Loan Documents, including, without limitation, changes to the terms of repayment thereof, modifications, extensions or renewals of repayment dates, releases or subordinations of security in whole or in part, changes in the interest rate or advances of additional funds by Lender in its discretion for purposes related to those set forth in the Loan Documents.

		
	11.
	Confirmation of Guaranty; Partial Release of Guarantor.

		
	a.
	Subject to the terms of Section 9(b) hereof, Guarantor hereby acknowledges, covenants and agrees that neither the Transfer nor the Assumption nor anything contained in this Agreement, the other Loan Documents or otherwise shall be deemed or construed to release Guarantor from any liability or other obligations under the Loan Documents including, without limitation, Guarantor’s liability under the terms of the Guaranty (any and all such obligations shall be herein referred to as the “Original Guarantor Obligations”).  Subject to the terms of Section 9(b) hereof, Guarantor hereby expressly ratifies and confirms its obligations under and with respect to the Original Guarantor Obligations.  Subject to the terms of Section 9(b) hereof, Guarantor’s acknowledgment and ratification of the Original Guarantor Obligations (i) is absolute, unconditional and is not subject to any defenses, waivers, claims or offsets, and (ii) shall not be affected or impaired by any agreement, condition, statement or representation of any person or entity.

		
	b.
	Anything to the contrary notwithstanding, from and after the Effective Date, Guarantor shall, with respect only to those matters first arising or accruing after the Effective Date, be released of its liability in respect of the Original Guarantor Obligations.  Guarantor expressly acknowledges and agrees that the release set forth in the preceding sentence shall not be construed to release Guarantor from any liability in respect of the Original Guarantor Obligations for any acts or events occurring or obligations arising prior to the date hereof, whether or not such acts, events or obligations are, as of the date of this Agreement, known or ascertainable.  Guarantor ratifies, affirms, reaffirms, acknowledges, confirms and agrees that the Original Guarantor Obligations, as limited above, continue to be the legal, valid and binding obligations of Guarantor, in accordance with their terms.

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	10.
	Release of Lender Parties and Covenant Not to Sue. Borrower, Guarantor, New Borrower and New Guarantor, on behalf of themselves and their respective affiliates, heirs, successors and assigns, hereby release and forever discharge, as of the Effective Date, Lender, any trustee of the Loan, any participant in the Loan, any servicer or special servicer of the Loan, each of their respective predecessors in interest and successors and assigns, together with the officers, directors, partners, employees, investors, certificate holders and agents of each of the foregoing (collectively, the “Lender Parties”), from all debts, accountings, bonds, warranties, representations, covenants, promises, contracts, controversies, agreements, claims, damages, judgments, executions, actions, inactions, liabilities, demands or causes of action of any nature, at law or in equity, which Borrower, Guarantor, New Borrower and/or New Guarantor now have by reason of any cause, matter, or thing through and including the Effective Date, including, without limitation, matters arising out of or relating to: (a) the Loan, including, without limitation, its funding, administration and servicing; (b) the Loan Documents; or (c) the Property (collectively, “Pre-Transfer Claims”).  Each of Borrower, Guarantor, New Borrower and Guarantor on behalf of itself and its successors and assigns, covenants and agrees never to institute or cause to be instituted or continue prosecution of any suit or other form of action or proceeding of any kind or nature whatsoever against any of the Lender Parties by reason of or in connection with any Pre-Transfer Claims.

THIS RELEASE INCLUDES CLAIMS OF WHICH BORROWER, NEW BORROWER, NEW GUARANTOR AND/OR GUARANTOR ARE PRESENTLY UNAWARE OR WHICH BORROWER, NEW BORROWER, NEW GUARANTOR AND/OR GUARANTOR DO NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY BORROWER, NEW BORROWER, NEW GUARANTOR AND/OR GUARANTOR, WOULD MATERIALLY AFFECT BORROWER’S RELEASE OF THE LENDER PARTIES, NEW BORROWER’S RELEASE OF THE LENDER PARTIES, NEW GUARANTOR’S RELEASE OF THE LENDER PARTIES OR GUARANTOR’S RELEASE OF THE LENDER PARTIES.
BORROWER, GUARANTOR, NEW BORROWER AND NEW GUARANTOR EACH ACKNOWLEDGES THAT (i) THIS SECTION 10 HAS BEEN READ AND FULLY UNDERSTOOD, (ii) BORROWER, GUARANTOR, NEW BORROWER AND NEW GUARANTOR HAVE EACH HAD THE CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE, AND (iii) BORROWER, GUARANTOR, NEW BORROWER AND NEW GUARANTOR EACH HAS ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS SECTION 10.
		
	13.
	Representations and Warranties.

		
	a.
	Assignment.  Borrower and New Borrower each hereby represents and warrants to Lender as of the Effective Date that Borrower has irrevocably and unconditionally transferred and assigned to New Borrower all of Borrower’s right, title and interest in and to:

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	i.
	The Property;

		
	ii.
	The Original Loan Documents (except the Excluded Original Loan Documents);

		
	iii.
	All Leases related to the Property;

		
	iv.
	All easements, rights-of-way, reciprocal easement agreements, operating agreements, declarations of conditions, covenants and restrictions, and any other documents or instruments related to the Property;

		
	v.
	All prepaid rents and security deposits, if any, held by Borrower in connection with Leases of any part of the Property;

		
	vi.
	All rights as named insured under all casualty and liability insurance policies (and all endorsements in connection therewith) relating to the Property (unless, but only to the extent that, New Borrower is obtaining its own such insurance policies); and

		
	vii.
	All funds, if any, deposited in impound accounts, including, without limitation, the accounts and subaccounts described in Paragraph (B) of the recitals of this Agreement, held by or for the benefit of Lender pursuant to the terms of the Loan Documents.

Each of Borrower and New Borrower, as to itself only, hereby further represents and warrants to Lender that no consent to either (x) the Transfer and Assumption or (y) termination of the current property manager as Manager and engagement of New Manager as Manager is required by any Governmental Authority or required under any agreement to which Borrower or New Borrower, respectively, is a party or to which the Property is subject, including, without limitation, under any Lease, operating agreement, mortgage or deed of trust (other than the Loan Documents), or if any such consent is required, that it has obtained all such consents and delivered copies of the same to Lender.
		
	b.
	No Defaults; Representations and Warranties.  Borrower and, to the best of its knowledge, New Borrower, each hereby represents and warrants that no default, Event of Default, breach or failure of condition has occurred, or would exist with notice or the lapse of time or both, under any of the Loan Documents.  Borrower hereby represents and warrants that all representations and warranties in the Loan Agreement, the Security Instrument and the other Original Loan Documents are true and correct in all material respects on the date hereof, as if made on the Effective Date.  New Borrower hereby represents and warrants that all representations and warranties in the Loan Agreement, the Security Instrument and the other Original Loan Documents (other than the Excluded Original Loan Documents) are true and correct in all material respects on the date hereof, as if made on the Effective Date, other than any representations or warranties that are unique and specific only to Borrower (e.g., Borrower’s date of formation).

12

		
	c.
	Loan Documents.  New Borrower and New Guarantor each represents and warrants to Lender that New Borrower and New Guarantor have received copies of the Loan Documents, and agrees that, Lender has no obligation or duty to provide any information to New Borrower or New Guarantor regarding the terms and conditions of the Loan Documents or advise New Borrower or New Guarantor of the terms and conditions therein. New Borrower further agrees that, as of the Effective Date, all representations, warranties, covenants and agreements in the Original Loan Documents (except the Excluded Original Loan Documents), as amended hereby, shall apply to New Borrower, as though New Borrower were the borrower originally named in the Original Loan Documents (as such Original Loan Documents are modified by this Agreement) (it being agreed and acknowledged that any representations, warranties, covenants, acknowledgments or agreements, which, by their terms, refer to “as of the date hereof” or words of similar import, in the Original Loan Documents shall be deemed to mean, for purposes of this Agreement, “as of the Effective Date”). New Borrower further understands that, except as expressly set forth herein, Lender has not waived any right of Lender or obligation of Borrower under the Original Loan Documents or New Borrower under the Loan Documents and Lender has not agreed to any modification or waiver of any provision of any Loan Document, other than as expressly provided herein and by the First Amendment to Cash Management Agreement, as applicable, or to any extension of the Loan. New Borrower hereby represents and warrants that, after giving effect to this Agreement, all representations and warranties in the Loan Agreement and the other Loan Documents (except the Excluded Original Loan Documents) are true and correct in all material respects on the date hereof, as if made on the Effective Date other than those representations and warranties that are unique and specific only to Borrower (e.g., Borrower’s date of formation).

		
	d.
	Recorded Documents. Borrower and New Borrower each represent and warrant that they have reviewed the Recorded Documents (as defined below), and that the Transfer and the Assumption do not, and will not, (i) adversely affect the use, possession, ownership or operation of the Property under or with respect to the Recorded Documents, (ii) adversely affect any right, privilege, benefit, liability or obligation of the owner of the Property under or with respect to the Recorded Documents, (iii) violate any term or condition of any Recorded Document, or (iv) deprive Lender of any direct or indirect benefits of, or rights under, any of the Recorded Documents. For the purposes of this subsection, “Recorded  Documents” shall mean any and all documents or agreements of record, encumbering the Property, or affecting or relating to the Property, including, without limitation, any covenants, conditions, easements, encumbrances, liens or other restrictions, in each case as amended, supplemented or otherwise modified as of the date hereof.

		
	e.
	Financial Statements.  New Borrower and New Guarantor represent and warrant to Lender that the financial statements of New Borrower, New Guarantor or any affiliate thereof previously delivered by or on behalf of such parties to Lender: (i) are true, complete and correct in all material respects as of the date of such financial statements; (ii) present fairly and accurately the financial condition of each of such parties as of the date of such financial statements; and (iii) have been prepared in 

13

accordance with generally accepted accounting principles consistently applied or other accounting standards approved in writing by Lender. New Borrower and New Guarantor further represent and warrant to Lender as of the Effective Date that, since the date of such financial statements, there has been no material adverse change in the financial condition of any of such parties, and, except in the ordinary course of business or as previously disclosed in writing by New Borrower or New Guarantor to Lender and approved in writing by Lender, no material assets or properties reflected on such financial statements have been sold, transferred, assigned, mortgaged, pledged or encumbered. New Borrower and New Guarantor represent and warrant to Lender that none of New Borrower, New Guarantor, or any sole or managing member, general partner or controlling stockholder of New Borrower or New Guarantor, or any other entities which may be owned or controlled directly or indirectly by New Borrower or New Guarantor is currently a debtor in any bankruptcy, reorganization, insolvency or similar proceeding. New Borrower and New Guarantor represent and warrant to Lender that neither New Borrower nor New Guarantor is presently insolvent, and the proposed Transfer and Assumption will not render New Borrower or New Guarantor insolvent.
		
	f.
	Reports and Other Documents.

		
	i.
	Borrower and Guarantor represent and warrant to Lender that all reports, tax returns, documents, instruments and information delivered to Lender, by or on behalf of Borrower or Guarantor, in connection with New Borrower’s assumption of the Loan: (i) are correct in all material respects and sufficiently complete to give Lender accurate knowledge of their subject matter, and (ii) do not contain any misrepresentation of a material fact or omission of a material fact which omission makes the provided information misleading, and there has been no adverse change in Borrower or Guarantor’s financial condition since the delivery of such documentation.

		
	ii.
	New Borrower and New Guarantor represent and warrant to Lender that all reports, tax returns, documents, instruments and written information delivered to Lender, by or on behalf of New Borrower or New Guarantor, in connection with the Assumption: (i) are correct and complete in all material respects as of the date of the reports, tax returns, documents and written information, and (ii) do not contain any misrepresentation of a material fact or omission of a material fact which omission makes the provided information misleading, and there has been no material adverse change in New Borrower or New Guarantor’s financial condition since the delivery of such documentation.

		
	g.
	Organization.

		
	i.
	Borrower represents and warrants to Lender that it is duly formed, validly existing and in good standing as a limited liability company under the laws of the State of Delaware. Longwing represents and warrants to Lender that 

14

it is duly formed, validly existing and in good standing as a corporation under the laws of the State of Delaware. Swig represents and warrants that he is an individual residing in the State of New York. Each of Borrower and Guarantor represents and warrants to Lender that it has the full power and authority to own its assets and conduct its business, and is duly qualified in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such qualification, and that such entity has taken all necessary action to authorize the execution, delivery and performance of this Agreement, the other Loan Documents and the other documents executed by it in connection with this Agreement, and has the power and authority to execute, deliver and perform under this Agreement, the other Loan Documents, all other documents executed in connection herewith and all of the transactions contemplated hereby.
		
	ii.
	New Borrower represents and warrants to Lender that it is duly formed, validly existing and in good standing as a limited liability company under the laws of the State of Delaware. New Guarantor represents and warrants to Lender that it is duly formed, validly existing and in good standing as a limited partnership under the laws of the State of Delaware.  Each of New Borrower and New Guarantor represents and warrants to Lender that it has the full power and authority to own its assets and conduct its business, and is duly qualified in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such qualification, and that such entity has taken all necessary action to authorize the execution, delivery and performance of this Agreement, the other Loan Documents to which it is a party and any other documents executed by it in connection with this Agreement, and has the power and authority to execute, deliver and perform under this Agreement, the other Loan Documents to which it is a party, any other documents executed by it in connection herewith and all of the transactions contemplated hereby. The organizational chart attached as Schedule III hereto, relating to New Borrower, New Guarantor and the other named parties therein, is true, complete and correct on and as of the Effective Date.

		
	h.
	Consents, Execution, Delivery and Performance.

		
	i.
	Borrower and Guarantor each represent and warrant to Lender as of the Effective Date that the execution, delivery and performance by such Person of this Agreement and the other documents to be entered into by such Person in connection herewith or therewith (A) do not violate such Person’s organizational documents; (B) do not violate any constitution, statute, regulation, rule, order or law to which such Person or the Property is subject; (C) do not constitute a breach or default under any agreements to which such Person is a party or by which such Person or the Property is bound and will not result in the creation or imposition of a lien, charge or encumbrance upon the Property or any of the assets of such Person (other than pursuant to the terms of this Agreement, the other Loan Documents 

15

and the other documents to be entered into in connection herewith or therewith); (D) do not violate any judicial or administrative decree, writ, judgment or order to which such Person or the Property is subject; (E) do not require any consent, approval, authorization or order of any court, governmental authority or any other Person, other than for those which have already been obtained by Borrower or New Borrower; and (F) constitute the legal, valid and binding obligations of such Person, enforceable against such Person in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency, moratorium or other laws affecting the enforcement of creditors’ rights, or by the application of the rules of equity.
		
	ii.
	New Borrower represents and warrants to Lender that the execution, delivery and performance by New Borrower of this Agreement, the New Environmental Indemnity, the other Loan Documents to which it is a party and any other documents to be entered into by New Borrower in connection herewith or therewith (A) do not violate New Borrower’s organizational documents; (B) do not violate any constitution, statute, regulation, rule, order or law to which New Borrower or the Property is subject; (C) do not constitute a breach or default under any agreements to which New Borrower is a party or by which New Borrower or the Property is bound and will not result in the creation or imposition of a lien, charge or encumbrance upon the Property or any of the assets of New Borrower (other than pursuant to the terms of this Agreement, the other Loan Documents and the other documents to be entered into in connection herewith or therewith); (D) do not violate any judicial or administrative decree, writ, judgment or order to which New Borrower or the Property is subject; (E) do not require any consent, approval, authorization or order of any court, governmental authority or any other Person, other than for those which have already been obtained by Borrower, New Borrower or New Mezzanine Borrower; and (F) constitute the legal, valid and binding obligations of New Borrower, enforceable against New Borrower in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency, moratorium or other laws affecting the enforcement of creditors’ rights, or by the application of the rules of equity.

		
	iii.
	New Guarantor represents and warrants to Lender that the execution, delivery and performance by New Guarantor of this Agreement, the New Guaranty and any other documents to be entered into by New Guarantor in connection herewith or therewith (A) do not violate New Guarantor’s organizational documents; (B) do not violate any constitution, statute, regulation, rule, order or law to which New Guarantor or the Property is subject; (C) do not constitute a breach or default under any agreements to which New Guarantor is a party or by which New Guarantor or the Property is bound and will not result in the creation or imposition of a lien, charge or encumbrance upon the 

16

Property or any of the assets of New Guarantor (other than pursuant to the terms of this Agreement and the other documents to be entered into in connection herewith or therewith); (D) do not violate any judicial or administrative decree, writ, judgment or order to which New Guarantor or the Property is subject; (E) do not require any consent, approval, authorization or order of any court, governmental authority or any other Person, other than for those which have already been obtained; and (F) constitute the legal, valid and binding obligations of New Guarantor, enforceable against New Guarantor in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency, moratorium or other laws affecting the enforcement of creditors’ rights, or by the application of the rules of equity.
		
	i.
	Single Purpose.

		
	i.
	Borrower represents and warrants to Lender that it has not owned any real property or assets other than the Property and does not operate any business other than the management and operation of the Property.

		
	ii.
	New Borrower represents and warrants to Lender that it does not own any real property or assets other than the Property and does not operate any business other than the management and operation of the Property.

		
	j.
	Transfer Taxes.  Borrower and New Borrower each represents and warrants to Lender that all realty transfer taxes or similar taxes or charges have been or shall be paid in full in connection with the consummation of the Transfer.

		
	k.
	Compliance with Laws.  Borrower, Guarantor, New Borrower and New Guarantor each represents and warrants to Lender that the Transfer shall be completed and effectuated in compliance with all applicable laws and the requirements of any governmental authority.

		
	l.
	Encumbrances.  New Borrower and New Guarantor each represents and warrants to Lender that there are no and will not be any  pledges of or encumbrances on the direct or indirect ownership interests in New Borrower to which Lender’s consent is required under the Loan Documents (other than the pledge of New Mezzanine Borrower’s ownership interests in New Borrower in connection with the Mezzanine Loan).

		
	m.
	New Borrower’s Name and Location.  New Borrower represents and warrants to Lender that (i) New Borrower’s principal place of business is located at c/o Savanna, 430 Park Avenue, 12th Floor, New York, New York 10022; (ii) all organizational documents of New Borrower delivered to Lender are true, correct and complete in every respect; and (iii) New Borrower’s legal name is exactly as shown on page one of this Agreement.

		
	n.
	Fair Market Value.  Borrower, New Borrower, Guarantor and New Guarantor each represents and warrants to Lender that the fair market value of the interest in real 

17

property that secures the Loan immediately after the closing of the Transfer and Assumption equals or exceeds the fair market value of the interest in real property that secured the Loan immediately before the closing of the Transfer and Assumption within the meaning of Section 1.860G-2(b)(7)(iii) of the Income Tax Regulations promulgated under the Internal Revenue Code of 1986, as amended.
		
	o.
	No Prohibited Persons or Embargoed Persons. New Borrower and New Guarantor each represents and warrants to Lender that none of New Borrower, New Guarantor or any of their respective affiliates is a Prohibited Person (as defined below), and New Borrower, New Guarantor and their respective affiliates are and have been since their respective dates of formation in full compliance with all applicable orders, rules, regulations and recommendations of The Office of Foreign Assets Control of the U.S. Department of the Treasury. New Borrower and New Guarantor each covenants and represents and warrants to Lender that, as of the Effective Date and at all times throughout the term of the Loan, including after giving effect to any transfers or assignments permitted pursuant to the Loan Documents, (i) none of the funds or other assets of New Borrower or New Guarantor constitute property of, or are beneficially owned, directly or indirectly, by any Person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder with the result that the investment in New Borrower or New Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law (any such Person, entity or government, an “Embargoed Person”); (ii) no Embargoed Person has any interest of any nature whatsoever in New Borrower or New Guarantor, as applicable, with the result that the investment in New Borrower or New Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law; and (iii) none of the funds of New Borrower or New Guarantor, as applicable, have been derived from any unlawful activity with the result that the investment in New Borrower or New Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law.

A “Prohibited Person” is any Person (i) listed in the Annex to, or otherwise subject to the provisions of, the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”), (ii) that is owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order, (iii) with whom Lender is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order, (iv) who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order, (v) that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov.ofac/t11sdn.pdf or at any replacement website or other replacement official publication of such list, or (vi) who is an affiliate of or affiliated with a Person listed above.

18

		
	p.
	Purchase Agreement.  New Borrower represents and warrants to Lender that (i) the Purchase Agreement, together with all agreements and other instruments executed and delivered in connection therewith (collectively, the “Purchase Documents”), and the New Property Management Agreement are the only agreements between Borrower and New Borrower (or any of their respective affiliates) with respect to the Property and (ii) none of the Purchase Documents and none of the terms, conditions or provisions therein have been amended, modified, waived, terminated or otherwise changed.

		
	q.
	Tenant Direction Letters.  New Borrower hereby covenants and agrees to deliver, or cause to be delivered, an executed tenant notification letter to each tenant at the Property, in the form attached hereto as Exhibit B, within one (1) business day following the Assumption, and to deliver, or cause to be delivered, to Lender, within five (5) business days after the date hereof, a certification executed by New Borrower certifying delivery of such tenant notification letter, together with an executed copy of each applicable tenant notification letter.

		
	r.
	Uncalled Capital Commitments.  New Guarantor hereby represents and warrants to Lender that New Guarantor has received Twelve Million Thirty Five Thousand Four Hundred Twenty Eight and 60/100 Dollars ($12,035,428.60) in called capital commitments and One Hundred Eight Million Three Hundred Eighteen Thousand Eight Hundred Fifty Seven and 40/100 Dollars ($108,318,857.40) in uncalled capital commitments.

		
	12.
	Loan Agreement Amendments. New Borrower and Lender agree (and Guarantor, Borrower and New Guarantor acknowledge) that the Loan Agreement is hereby amended as of the Effective Date as follows:

		
	a.
	The following definitions, “JV Agreement”, “Longwing Guarantor”, “Longwing Guaranty”, “Permitted Transfer”, “Sole Member”, “Sponsor”, “Swig Family Entity” and “Swig Guaranty”, set forth in the Loan Agreement are hereby deleted in their entirety and such definitions (as applicable) are replaced with the following:

		
	i.
	“JV Agreement” shall mean that certain Limited Liability Company Agreement dated as of December 23, 2013 of the JV Entity.

		
	ii.
	“Mezzanine Borrower shall mean 110 William Mezz III, LLC, a Delaware limited liability company.”

		
	iii.
	“Permitted Transfer shall mean any of the following:  (i) any transfer, directly as a result of the death of a natural person, of stock, membership interests, partnership interests or other ownership interests previously held by the decedent in question to the Person or Persons lawfully entitled thereto, (ii) any transfer, directly as a result of the legal incapacity of a natural person, of stock, membership interests, partnership interests or other ownership interests previously held by such natural person to the Person or Persons lawfully entitled thereto, (iii) any Lease of space in the 

19

Improvements to Tenants in accordance with the terms and provisions of Section 4.1.9 hereof, (iv) any Transfer permitted without Lender’s prior consent in accordance with the terms and provisions of Section 8.2 hereof, and (v) any pledge by Mezzanine Borrower of the direct ownership interests in Borrower and other collateral pursuant to the Mezzanine Loan Agreement, as well as any Transfer made in accordance with all requirements of the Intercreditor Agreement occurring upon the foreclosure of, or other remedial action with respect to, any such ownership interests or delivery of an assignment in lieu of foreclosure in respect of any such ownership interests.”
		
	iv.
	“Sole Member shall mean 110 William Mezz III, LLC, a Delaware limited liability company.”

		
	v.
	“Sponsor” shall mean, individually and collectively, Savanna Sponsor and KBS Sponsor.”

Notwithstanding the deletion of the definitions “Longwing Guarantor”, “Longwing Guaranty”, “Swig Family Entity” and “Swig Guaranty” from the Loan Agreement as provided in this Section 12(a), nothing in this Section 12(a) shall be deemed or construed to release Guarantor from any Original Guarantor Obligations, except as may otherwise be provided in Section 9 of this Agreement, or to release Indemnitor (as defined in the Environmental Indemnity) from the Environmental Indemnitee Retained Obligations, excepts as may otherwise be provided in Section 8 of this Agreement.
		
	b.
	The following definitions are hereby added to the Loan Agreement as defined terms therein:

		
	i.
	“Corporate Loan shall have the meaning ascribed to such term in Section 8.2 hereof.”

		
	ii.
	“JV Entity shall mean KBS SOR SREF III 110 William, LLC, a Delaware limited liability company.”

		
	iii.
	“KBS Sponsor shall mean KBS Strategic Opportunity REIT, Inc., a Maryland corporation.”

		
	iv.
	“KBS Guarantor Conditions shall have the meaning ascribed to such term as set forth in Section 8.4 hereof.”

		
	v.
	“KBS JV Partner shall mean KBS SOR 110 William JV, LLC, a Delaware limited liability company.”

		
	vi.
	“REIT Transfer shall have the meaning ascribed to such term in Section 8.2 hereof.”

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	vii.
	“Savanna Sponsor shall mean Savanna Real Estate Fund III, L.P., a Delaware limited partnership.”

		
	viii.
	“Savanna JV Partner shall mean SREF III 110 William JV, LLC, a Delaware limited liability company.”

		
	c.
	The last two (2) sentences of Section 3.1.1(b) of the Loan Agreement are hereby deleted in its entirety and replaced with the following sentences:  “Borrower’s organizational identification number, if any, assigned by the state of its incorporation or organization is 5454173.  Borrower’s federal tax identification number is 46-4412896.”

		
	d.
	Section 3.1.47(d) of the Loan Agreement is hereby deleted in its entirety and replaced with the following:  “Except as provided on Schedule VI hereof, no Material Agreement has as a party an Affiliate of Borrower.”

		
	e.
	The following shall be added as Section 3.1.51 of the Loan Agreement:  “Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and at all times on and after the date hereof and until such time as the Debt shall be paid in full, JV Entity’s Organizational Documents provide that JV Entity will not directly or indirectly, without the prior written consent of Savanna Sponsor, cause Borrower to (i) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, (ii) seek or consent to the appointment of a trustee, custodian, receiver, liquidator or any similar official for Borrower or a substantial portion of its assets or properties, (iii) make an assignment for the benefit of creditors, or (iv) take any action in furtherance of any of the foregoing.”

		
	f.
	Section 3.1.44 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

		
	iii.
	“Purchase Option.  Except with respect to transfers between KBS JV Partner and Savanna JV Partner as may be expressly provided in the JV Agreement, neither the Property nor any part thereof or interest therein is subject to any purchase options, rights of first refusal to purchase, rights of offer to purchase or other similar rights in favor of any Person; provided, however, transfers between KBS JV Partner and Savanna JV Partner shall be subject to the terms and conditions set forth in Article VIII hereof.”

		
	g.
	The following shall be added to the end of Section 8.1 of the Loan Agreement:  “For purposes of clarification, the execution by KBS SOR Properties, LLC, KBS Strategic Opportunity Limited Partnership, KBS Strategic Opportunity REIT, Inc., and KBS Strategic Opportunity Holdings, LLC of unsecured guaranties and/or indemnity agreements in and of themselves shall not be deemed a Transfer.”

		
	h.
	Section 8.2 of the Loan Agreement is hereby modified as follows:

21

“Section 8.2    Permitted Transfers of Interests in Borrower.  Notwithstanding anything to the contrary contained in Section 8.1 hereof, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than forty-nine percent (49%) in the aggregate of the direct or indirect ownership interests in Borrower, provided that the following conditions are satisfied:  (a) no monetary or material non-monetary Default nor any Event of Default shall have occurred and remain outstanding or shall occur solely as a result of such Transfer; (b) such Transfer shall not (i) cause the transferee, together with its Affiliates, to acquire control of Borrower, (ii) result in Borrower no longer being controlled by one or more Sponsors, or (iii) cause the transferee, together with its Affiliates, to increase its direct or indirect interest in Borrower to an amount which exceeds forty-nine percent (49%) in the aggregate; (c) to the extent the transferee owns twenty percent (20%) or more of the direct or indirect interests in Borrower immediately following such Transfer (provided that such transferee did not own 20% or more of the direct or indirect ownership interests in such Borrower as of the Closing date), Borrower shall deliver, at Borrower’s sole cost and expense, customary searches (OFAC, KYC, credit, judgment, lien, bankruptcy, etc.) reasonably acceptable to Lender with respect to such transferee and its Affiliates as Lender may reasonably require; (d) after giving effect to such Transfer, one or more Sponsors shall continue to own, directly or indirectly, in the aggregate, at least fifty percent (50%) of all legal, beneficial and economic interests in Borrower; (e) the Property shall continue to be managed by Manager or a Qualified Manager; (f) Borrower shall give Lender notice of such proposed Transfer, together with copies of all instruments effecting such Transfer and copies of any Organizational Documents, including without limitation, a revised organizational structure chart, that Lender shall reasonably require, not less than ten (10) Business Days prior to the proposed date of such Transfer; and (g) the structure of Borrower (including, without limitation, its single purpose nature and bankruptcy remoteness) shall not be adversely affected by such Transfer.
In addition, notwithstanding anything to the contrary contained herein, nothing herein shall be deemed to prohibit, and no consent of Lender is required for:
(u)    Transfers of interests in Savanna Sponsor, provided (I) the foregoing clauses (a) through (g) in this Section 8.2 remain satisfied, (II) Savanna Sponsor continues to hold fifty-one percent (51%) or more of the membership interest (directly or indirectly) in Savanna JV Partner, (III) there is no change in control of Savanna Sponsor as a result of the Transfers and (IV) there is no change in control of Borrower as a result of the Transfers;
(v)    Transfers of any direct or indirect interests in Borrower by KBS Sponsor, provided (I) the foregoing clauses (a) through (g) in this Section 8.2 remain satisfied, (II) KBS Sponsor continues to hold fifty one percent (51%) or more of the membership interest (directly or indirectly) in KBS JV Partner, (III) there is no change of control of KBS Sponsor and (IV) there is no change in control of Borrower as a result of such Transfers;
(w)    Transfers of any direct or indirect interests in Borrower by Savanna Sponsor, provided (I) the foregoing clauses (a) through (g) in this Section 8.2 remain satisfied, (II) Savanna Sponsor continues to hold fifty one percent (51%) or more of the 

22

membership interests (directly or indirectly) in Savanna JV Partner, (III) there is no change of control of Savanna Sponsor, and (IV) there is no change in control of Borrower as a result of the Transfers;
(x)    Transfer of less than all of KBS JV Partner’s ownership in JV Entity to Savanna JV Partner, provided the foregoing clauses (a), (b)(ii), and (c) through (g) in this Section 8.2 remain satisfied; 
(y)    Transfers of less than all of Savanna JV Partner’s ownership in the JV Entity to KBS JV Partner, provided the foregoing clauses (a), (b)(ii), and (c) through (g) in this Section 8.2 remain satisfied; or
(z)    the removal of the Savanna JV Partner as the “Managing Member” of the JV Entity upon the occurrence of a “Just Cause Event” (as such term is defined in the Limited Liability Company Agreement of the JV Entity) provided the KBS JV Partner then becomes the sole “Managing Member” of the JV Entity and KBS Sponsor has satisfied each of the KBS Guarantor Conditions (as hereinafter defined) and the foregoing clauses (b)(ii), and (c) through (g) of this Section 8.2 remain satisfied.
As used in this Section 8.2, (x) the terms “change in control” or “change of control” mean (i) a change in the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of the controlled Person, whether through ownership of voting securities or other beneficial interest, by contract or otherwise or (ii) any transfer of interests or series of transfers of interests in the applicable entity which results in more than 49% of the ownership interests of such entity or the surviving entity, as applicable, being held by any single person or entity or related group of people or entities which does not currently own more than 49% of the interests in the applicable entity and (y) term “control” or “controlled” shall mean the possession, directly or indirectly of the power to direct or cause the direction of the management, policies or activities of the controlled Person, whether through ownership of voting securities or other beneficial interest, by contract or otherwise.  Notwithstanding any other provision herein to the contrary, with respect to KBS Sponsor, the sale, conveyance, transfer, disposition, alienation, hypothecation, pledge or encumbrance (whether voluntary or involuntary) of any shares of stock in KBS Sponsor (a “REIT Transfer”) shall be permitted without Lender’s prior written consent, provided that such REIT Transfer does not result in a change in control of KBS Sponsor, the Borrower or KBS Strategic Opportunity Limited Partnership.  For avoidance of doubt, Lender’s prior written consent shall also be required for (a) KBS Sponsor to enter into a merger and/or acquisition and/or consolidation and/or other business combination which would result in KBS Sponsor or KBS Strategic Opportunity Limited Partnership not being the surviving entities or (b) a sale of all or substantially all of KBS Sponsor’s assets.  Furthermore, for avoidance of doubt, it is acknowledged and agreed the removal or replacement of KBS Capital Advisors LLC as the advisor to KBS Sponsor shall also be deemed a change of control  of KBS Sponsor that is prohibited without Lender’s consent; provided, however, that Lender’s consent shall not be unreasonably withheld or delayed in connection with any such removal or replacement of KBS Capital Advisors LLC.

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In addition, KBS Strategic Opportunity Limited Partnership, KBS Strategic Opportunity REIT, Inc., and any of the other parties owning interests in KBS Strategic Opportunity Limited Partnership, direct or indirect, shall be permitted to obtain loans from, or incur indebtedness to any third-party lender (each a “Corporate Loan”) and pledge up to 49% in the aggregate of their respective interests (direct or indirect) in KBS Strategic Opportunity Limited Partnership and KBS SOR Properties, LLC, as security for any such Corporate Loan so long as the ownership interests in Borrower, Mezzanine Borrower, JV Entity, KBS JV Partner and KBS SOR Acquisition XXV, LLC are not pledged to secure such Corporate Loan; provided, however, as a condition precedent for such pledgee to realize on such pledge and take title to such interests each of the foregoing clauses (b) through (g) of this Section 8.2 must be satisfied.”
		
	i.
	Article VIII of the Loan Agreement is hereby modified so as to add the following new Section 8.4 therein:

“Section 8.4    Sponsor Transfers.  Notwithstanding anything contained in this Article VIII, in this Agreement or in the other Loan Documents to the contrary, (x) if at any time Savanna JV Partner wishes to acquire, in its entirety, KBS JV Partner’s ownership interest in the JV Entity and such acquisition would result in neither KBS Sponsor nor any of its affiliates having any direct or indirect interest in Borrower, then Lender shall permit such acquisition to occur only if each of the following conditions have been satisfied or waived in writing by Lender: (i) Savanna Sponsor shall then have a Net Worth (as defined in the Guaranty) of not less than $100,000,000 (and shall then covenant in writing to Lender to maintain at all times until the Loan is paid in full a Net Worth of not less than $100,000,000), (ii) Borrower pays Lender’s reasonable out-of-pocket fees and disbursements incurred in connection with such acquisition (including, but not limited to, Lender’s reasonable legal fees) and (iii) clauses 8.2(a), (b)(ii) and (c) through (g) hereof are satisfied, and (y) if at any time KBS JV Partner wishes to acquire, in its entirety, Savanna JV Partner’s ownership in the JV Entity and such acquisition would result in neither Savanna Sponsor nor any of its affiliates having any direct or indirect interest in Borrower, then, Lender shall permit such acquisition to occur only if each of the following conditions have been satisfied or waived in writing by Lender: (i) KBS SOR Properties, LLC executes and delivers to Lender a guaranty of recourse obligations and environmental indemnity agreement in form and substance substantially and materially the same as the Guaranty and the Environmental Indemnity, (ii) KBS SOR Properties, LLC shall then have a Net Worth (as defined in the Guaranty) of not less than $100,000,000 (and shall then covenant in writing to Lender to maintain at all times until the Loan is paid in full a Net Worth of not less than $100,000,000), (iii) KBS Sponsor delivers to Lender any and all other documents reasonably required by Lender, including, without limitation, a legal opinion as to the due authority and enforceability of the new guaranty and environmental indemnity, (iv) Borrower pays Lender a processing fee of $5,000 and Lender’s reasonable fees and disbursements incurred in connection with such transaction (including, but not limited to, Lender’s reasonable legal fees), (v) KBS SOR Properties, LLC at such time shall control KBS JV Partner and hold fifty-one (51%) percent or more of the membership interest, directly or indirectly, in KBS JV Partner, (vi) KBS SOR Properties, LLC and Borrower deliver a written acknowledgment and agreement to Lender in form and substance reasonably satisfactory to Lender stating that (A) no Transfers shall thereafter occur without Lender’s consent that could result in a change of control of KBS SOR 

24

Properties, LLC and (B) KBS SOR Properties, LLC at all times shall continue to control Borrower and (vii) clauses 8.2(a), (b)(ii) and (c) through (g) hereof are satisfied (the immediately preceding conditions (i) through (vi) shall be collectively referred to as the “KBS Guarantor Conditions”).  In the event each of the conditions set forth in the immediately preceding sentence are satisfied, Lender shall agree to release Savanna Sponsor from its obligations under the Guaranty and the Environmental Indemnity for any acts, events or circumstances which first occur from and after the consummation of such purchase.”
		
	j.
	Section 11.6 of the Loan Agreement is amended by deleting the stated addresses for Lender and Borrower therefrom and substituting the following therein:

	
			
	If to Borrower:
	 
	c/o Savanna

	 
	 
	430 Park Avenue, 12th Floor

	 
	 
	New York, New York 10022

	 
	 
	Attention: Nicholas Bienstock and Andrew Fichte

	 
	 
	 

	With a copy to:
	 
	c/o Savanna

	 
	 
	430 Park Avenue, 12th Floor

	 
	 
	New York, New York 10022

	 
	 
	Attention: 110 William Asset Manager

	 
	 
	 

	And a copy to:
	 
	Hunton & Williams LLP

	 
	 
	200 Park Avenue

	 
	 
	New York, New York 10166

	 
	 
	Attention: Laurie Grasso, Esq.

	 
	 
	 

	And a copy to:
	 
	c/o Wells Fargo Bank, N.A.

	 
	 
	550 South Tryon Street, 14th Floor

	 
	 
	MAC D1086-120

	 
	 
	Charlotte, NC 28202

	 
	 
	Attention: Asset Manager

	 
	 
	Loan No.: 61-1100001

	 
	 
	 

	With a copy to:
	 
	Seyfarth Shaw LLP

	 
	 
	620 Eighth Avenue

	 
	 
	New York, New York 10018

	 
	 
	Attention: Mitchell S. Kaplan, Esq.

	 
	 
	Facsimile: (917) 344-1264

		
	k.
	Borrower’s authorized agent in Section 11.3(B) of the Loan Agreement is amended by deleting the name and address of such agent and substituting the following therein:

	
			
	 
	 
	Corporation Service Company

	 
	 
	80 State Street

	 
	 
	Albany, New York 12207-2543

25

		
	l.
	Schedule I (Rent Roll), Schedule III (Organizational Chart), Schedule VI (Material Agreements) and Schedule VIII (Leasing Exceptions) to the Loan Agreement are deleted in their entirety and are replaced with Schedule VI (Material Agreements) and Schedule VIII (Leasing Exceptions) attached to this Agreement.

		
	13.
	Other Loan Document Amendments.

		
	a.
	Omnibus Amendment. New Borrower, New Guarantor and Lender agree (and Guarantor and Borrower acknowledge) that all of the Original Loan Documents (except the Excluded Original Loan Documents) are hereby amended from and after the date hereof as follows:

		
	i.
	As defined in, and as used in, each of the Original Loan Documents (including, without limitation, the Loan Agreement, but excluding the Excluded Original Loan Documents):

(1)    the term “Borrower”, “Maker”, “Mortgagor” or “Assignor”, as applicable, shall be deemed to refer to New Borrower, as such term is defined in this Agreement;
(2)    the term “Lender”, “Beneficiary”, “Assignee”, “Mortgagee”, “Payee” or “Holder”, as applicable, shall be deemed to refer to Lender, as such term is defined in this Agreement;
(3)    the term “Note” shall be deemed to refer to the Note, as amended by this Agreement, and as the same may be further amended, replaced or otherwise modified;
(4)    the term “Loan Agreement” shall be deemed to refer to the Loan Agreement, as amended by this Agreement, and as the same may be further amended, replaced or otherwise modified;
(5)    the term “Guarantor” shall be deemed to refer to Guarantor and New Guarantor, individually or collectively, as the context may require, and on a joint and several basis, collectively, as defined herein or any replacement guarantor;
(6)    the term “Guaranty” and any similar reference shall be deemed to refer to the New Guaranty, as the same may be amended, replaced or otherwise modified from time to time;
(7)    the term “Environmental Indemnity” shall be deemed to refer to the New Environmental Indemnity, as the same may be amended, replaced or otherwise modified from time to time;
(8)    the term “Assignment of Management Agreement” and any similar references shall be deemed to refer to the New Manager’s 

26

Subordination, as the same may be amended, replaced or otherwise modified from time to time;
(9)    the term “Management Agreement” or “Property Management Agreement”, as applicable, shall be deemed to refer to the New Property Management Agreement, as such term is defined in this Agreement;
(10)    the term “Clearing Account Agreement” and any similar reference shall be deemed to refer to the New Lockbox Agreement, as the same may be amended, replaced or otherwise modified from time to time;
(11)    the term “Manager” or “Property Manager” and any similar reference shall be deemed to refer to the New Manager, together with any permitted replacement of, or successor to, such property manager;
(12)    the term “Mezzanine Borrower” and any similar reference shall be deemed to refer to 110 William Mezz III, LLC, a Delaware limited liability company;
(13)    The term “Insolvency Opinion” and any similar term or reference shall be deemed to refer to, as the context may require, that certain bankruptcy non-consolidation opinion letter, dated as of the Effective Date, rendered by Hunton & Williams LLP in connection with the Loan, and (ii) any other bankruptcy non-consolidation opinion delivered to Lender in connection with the Loan after the Effective Date;
(14)    The term “Mezzanine Loan Agreement” shall be deemed to refer to that certain Amended and Restated Mezzanine Loan Agreement dated as of the Effective Date between Mezzanine Borrower and Mezzanine Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
		
	ii.
	From and after the Effective Date the term “Loan Documents”, as used in any of the Original Loan Documents, shall be deemed to refer to the Loan Documents, as defined in this Agreement (other than the Excluded Original Loan Documents).

		
	14.
	References.  From and after the Effective Date:  (a) references in any of the Loan Documents to any of the other Loan Documents will be deemed to be references to such other Loan Documents as modified by this Agreement; and (b) all references to the term “Loan Documents” or “Security Documents” in any of the Loan Documents shall hereinafter refer to the Loan Documents as defined herein, this Agreement, and all documents executed in connection with this Agreement.

27

		
	15.
	Property Remains as Security.  The Property shall remain in all respects subject to the lien, charge or encumbrance of the Security Instrument.  Except as expressly provided in this Agreement, nothing contained herein shall affect or be construed to release or affect the liability of any party or parties who may now or hereafter be liable under or on account of the Note or the Security Instrument, nor shall anything contained herein affect or be construed to affect any other security for the Note held by Lender.  Nothing in this Agreement shall in any way release, diminish or affect the lien position of the Security Instrument or any liens created by, or, except as expressly provided in this Agreement, the agreements or covenants contained in the Loan Documents, or the lien priority of any such liens.

		
	16.
	No Representation of Lender Regarding Property.  The parties agree that (a) Lender has made no representations or warranties, either express or implied, regarding the Property and it has no responsibility whatsoever with respect to the Property, its condition, or its use, occupancy or status, and (b) no claims arising from, or in any way connected to, matters prior to the date hereof and relating to the Property, its condition, or its use, occupancy or status, will be asserted against the Lender or its agents, employees, professional consultants, affiliated entities, successors or assigns, either affirmatively or as a defense.

		
	17.
	Waiver of Acceleration. Lender hereby agrees that it shall not exercise its right to cause all sums secured by the Security Instrument to become immediately due and payable because of the Transfer contemplated in this Agreement; provided, however, Lender reserves its right under the terms of the Loan Agreement or any other Loan Document to accelerate all principal and interest in the event of any subsequent sale, transfer, encumbrance or other conveyance of the Property or any interest in New Borrower, except as expressly permitted by the Loan Documents, as amended hereby.

		
	18.
	Hazardous Substances.

		
	a.
	Without in any way limiting any other provision of this Agreement, Borrower expressly reaffirms to its knowledge as of the Effective Date: (a) each and every representation and warranty in the Loan Documents respecting any Hazardous Substances or environmental matters; and (b) each and every covenant and indemnity in the Loan Documents respecting any Hazardous Substances or environmental matters.

		
	b.
	Without in any way limiting any other provision of this Agreement, New Borrower (a) expressly reaffirms to its knowledge as of the Effective Date, each and every representation and warranty in the Loan Documents (except the Excluded Original Loan Documents) respecting any Hazardous Substances or environmental matters set forth in the Loan Documents; and (b) expressly reaffirms to its knowledge as of the Effective Date and continuing hereafter, each and every covenant and indemnity in the Loan Documents (except the Excluded Original Loan Documents) respecting any Hazardous Substances or environmental matters set forth in the Loan Documents (except the Excluded Original Loan Documents).

28

		
	19.
	Borrower Estoppel.  Borrower hereby acknowledges and confirms each of the following:

		
	a.
	Lender and Original Lender have not waived any requirements of the Loan Documents nor any of Lender’s or Original Lender’s rights thereunder (other than the partial releases set forth in Sections 7, 8 and 9 hereof).

		
	b.
	There has been no amendment or modification of the Loan Documents, except as expressly provided in this Agreement.

		
	c.
	There are no facts that would support a claim of usury to defeat or avoid its obligation to repay the principal of, interest on, and other sums or amounts due and payable under the Loan Documents.

		
	20.
	New Borrower Estoppel.  

(A)    Lender hereby informs New Borrower of, and New Borrower hereby acknowledges, each of the following:
		
	a.
	Lender and Original Lender have not waived any requirements of the Loan Documents nor any of Lender’s or Original Lender’s rights thereunder (other than the partial releases set forth in Sections 7, 8 and 9 hereof).

		
	b.
	There has been no amendment or modification of the Loan Documents, except as expressly provided in this Agreement.

(B)    New Borrower hereby acknowledges and confirms that there are no facts that would support a claim of usury to defeat or avoid its obligation to repay the principal of, interest on, and other sums or amounts due and payable under the Loan Documents.    
		
	21.
	Guarantor Estoppel.  Guarantor hereby acknowledges and confirms each of the following:

		
	a.
	Lender and Original Lender have not waived any requirements of the Loan Documents nor any of Lender’s or Original Lender’s rights thereunder (other than the partial releases set forth in Sections 7, 8 and 9 hereof).

		
	22.
	New Guarantor Estoppel.  Lender hereby informs New Guarantor of, and New Guarantor hereby acknowledges, each of the following:

		
	a.
	Lender and Original Lender have not waived any requirements of the Loan Documents nor any of Lender’s or Original Lender’s rights thereunder (other than the partial releases set forth in Sections 7, 8 and 9 hereof.

		
	23.
	Lender Estoppel.  Lender hereby acknowledges and confirms each of the following:

		
	a.
	Lender has not waived any of Lender’s rights under the Loan Documents (other than the partial releases set forth in Sections 7, 8 and 9 hereof).

29

		
	b.
	There are no outstanding notices of default given by Lender that remain uncured.

		
	24.
	Reliance.  Lender is entitled to rely, and has relied, upon the representations, warranties and covenants of Borrower, New Borrower, Guarantor and New Guarantor contained in this Agreement in the execution and delivery of this Agreement and all other documents and instruments executed and delivered by Lender in connection with this Agreement.

		
	25.
	Notices. All notices to be given to New Borrower or Lender pursuant to the Loan Documents shall be given and shall become effective as provided in Section 11.6 of the Loan Agreement, as amended hereby. All notices to be given to Guarantor shall be given and shall become effective as provided in Section 6.2 of the Guaranty. All notices to be given to New Guarantor shall be given and shall become effective as provided in Section 6.2 of the New Guaranty.

		
	26.
	Confirmation of Security Interest. Nothing contained herein shall affect or be construed to affect any lien, charge or encumbrance created by any Loan Document or the priority of that lien, charge or encumbrance. All assignments and transfers by Borrower to New Borrower are subject to any security interest(s) held by Lender pursuant to the Loan Documents. New Borrower hereby ratifies and confirms the security interests, liens, charges and encumbrances in favor of Lender granted by Borrower pursuant to the Security Instrument. New Borrower does hereby irrevocably mortgage, give, grant, bargain, sell, alienate, enfeoff, pledge, assign, warrant, transfer, confirm, hypothecate and convey a security interest in and to Lender and its successors and assigns in the New Borrower’s now owned or hereafter acquired rights, interests and estates in the “Property” (as defined in the Security Instrument).

		
	27.
	Relationship with Loan Documents.  To the extent that this Agreement is inconsistent with the other Loan Documents, this Agreement will control and the other Loan Documents will be deemed amended by this Agreement.  Except as explicitly amended hereby, the Loan Documents shall remain unchanged and in full force and effect.

		
	28.
	Integration; Interpretation. The Loan Documents, including this Agreement, contain or expressly incorporate by reference the entire agreement of the parties with respect to the matters contemplated herein and supersede all prior negotiations. The Loan Documents shall not be modified except by written instrument executed by Lender and the other parties thereto. All capitalized terms used herein which are not defined shall have the meanings ascribed to such terms in the Loan Agreement, as amended hereby. This Agreement shall constitute a “Loan Document” under, and for purposes of, the Loan Agreement and each other Loan Document. Titles and captions of sections and subsections of this Agreement have been inserted for convenience only, and neither limit nor amplify the provisions of this Agreement.

		
	29.
	Successors and Assigns. This Agreement is binding upon and shall inure to the benefit of the heirs, successors and assigns of the parties but shall be subject to all prohibitions on transfers contained in any Loan Document.

30

		
	30.
	Attorneys’ Fees; Enforcement. If any attorney is engaged by Lender to enforce, construe or defend any provision of this Agreement against New Borrower or New Guarantor, or as a consequence of any default under or breach of this Agreement by New Borrower or New Guarantor, with or without the filing of any legal action or proceeding, New Borrower shall pay to Lender, upon demand, the amount of all reasonable attorneys’ fees and costs incurred by Lender in connection therewith, together with interest thereon from the date of such demand at the rate of interest applicable to the principal balance of the Note as specified therein.

		
	31.
	Cumulative Remedies.  All remedies contained in this Agreement are cumulative and Lender shall also have all other remedies provided at law and in equity contained in the Loan Agreement and the other Loan Documents.  Such remedies may be pursued separately, successively or concurrently at the sole discretion of Lender and may be exercised in any order and as often as occasion therefor shall arise.

		
	32.
	WAIVER OF JURY TRIAL.  EACH OF BORROWER, NEW BORROWER, GUARANTOR, NEW GUARANTOR AND LENDER, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THE LOAN DOCUMENTS OR THIS AGREEMENT.

		
	33.
	Governing Law; Miscellaneous. This Agreement and the obligations arising hereunder shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to rules regarding conflict of laws). In any action brought or arising out of this Agreement, Borrower, Guarantor, New Borrower and New Guarantor hereby consent to the jurisdiction of any state (or commonwealth) or federal court having proper venue as specified in the other Loan Documents and also consent to the service of process by any means authorized by the law of such jurisdiction(s). Time is of the essence of each term of the Loan Documents, including this Agreement. If any provision of this Agreement or any of the other Loan Documents shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that portion shall be deemed severed therefrom and the remaining parts shall remain in full force as though the invalid, illegal or unenforceable portion had not been a part thereof.

		
	34.
	Further Assurances. Each of Borrower, Guarantor, New Borrower and New Guarantor agrees to execute and deliver such further agreements, instruments and other documents, and to take such other actions, in each case, as Lender may reasonably request, at no out-of-pocket cost or expense to Lender, in order to consummate the transactions contemplated herein. Each of Borrower, Guarantor, New Borrower and New Guarantor acknowledge and agree that the covenants set forth in this Section 34 shall survive the Effective Date.

31

		
	35.
	Counterparts. This Agreement may be executed in any number of counterparts, each of which when executed and delivered will be deemed an original and all of which taken together will be deemed to be one and the same instrument.

32

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
LENDER:
U.S. BANK NATIONAL ASSOCIATION, AS
TRUSTREE FOR THE REGISTERED 
HOLDERS OF UBS-BARCLAYS
COMMERCIAL MORTGAGE TRUST 2012-
C2, COMMERCIAL MORTGAGE PASS-
THROUGH CERTIFICATES, SERIES 2012-C2

By:    Wells Fargo Bank, National Association,
solely in its capacity as Master Servicer
pursuant to that certain Pooling and 
Servicing Agreement, dated as of July 1,
2012

	
			
	By:
	/s/ Wayne Ventus, JR

	Name:
	Wayne Ventus, JR

	Title:
	Assistant Vice President

[Signature continued on next page]

[signature page to Loan Assumption and Substitution Agreement]

BORROWER:
110 WILLIAM, LLC, 
a Delaware limited liability company
		
	By:
	110 William Mezz, LLC, 
a Delaware limited liability company, 
its sole equity member

		
	By:
	110 William Mezz Parent, LLC, 
a Delaware limited liability company, 
its sole equity member

		
	By:
	SE 110 William Management, LLC 
a New York limited liability company, 
its managing member

By:__/s/ Kent M. Swig   _____ 
Name:  Kent M. Swig 
Title:    Managing Member

GUARANTOR:
___/s/ Kent M. Swig____________________
 
KENT M. SWIG, an individual

LONGWING INCORPORATED, 
a Delaware corporation
By:_/s/ Authorized Signatory____
Name: 
Title: Authorized Signatory

[Signatures continued on next page]

[signature page to Loan Assumption and Substitution Agreement]

NEW BORROWER:
110 WILLIAM PROPERTY INVESTORS III, LLC, 
a Delaware limited liability company
By:__/s/ Nicolas Bienstock ____
Name: Nicholas Bienstock
Title: Authorized Signatory

NEW GUARANTOR:
SAVANNA REAL ESTATE FUND III, L.P., 
a Delaware limited partnership
By:__/s/ Nicolas Bienstock ____
Name: Nicholas Bienstock
Title: Authorized Signatory

[signature page to Loan Assumption and Substitution Agreement]

SCHEDULE I
RENT ROLL

New Borrower and Lender agree (and Guarantor, Borrower and New Guarantor acknowledge) that the rent roll attached as Exhibit B to that certain Borrower’s Certificate, dated as of the date hereof, is hereby incorporated into Schedule I of this Agreement.

SCHEDULE III
ORGANIZATIONAL CHART

New Borrower and Lender agree (and Guarantor, Borrower and New Guarantor acknowledge) that the organizational chart attached as Exhibit A to that certain Borrower’s Certificate, dated as of the date hereof, is hereby incorporated into Schedule III of this Agreement.

SCHEDULE VI
MATERIAL AGREEMENTS
		
	1.
	Rental Agency Agreement, executed by New Borrower and Savanna Commercial Services, LLC, a Delaware limited liability company (“Agent”), dated as of the date hereof.*

		
	2.
	Rental Agency Agreement, executed by New Borrower and Agent, dated as of the date hereof, as amended by that certain Letter Agreement executed by Owner, acknowledged and agreed to by Swig Equities, LLC, a New York limited liability company (“Swig Equities”), and consented to by Agent, dated as of the date hereof. *

		
	3.
	Project Management Agreement, executed by New Borrower and Savanna Project Management, LLC, dated as of the date hereof.*

		
	4.
	Consulting Agreement, executed by New Borrower and Kent M. Swig, an individual, and consented and agreed to by Swig Equities, dated as of dated as of the date hereof.

		
	5.
	Property Management Agreement, executed by New Borrower and Swig Equities, dated as of the date hereof.

		
	6.
	Service Contract with Perfect Building Maintenance.

		
	7.
	Service Contract with Classic Security, LLC

*These agreements are entered into by parties which are Affiliates of New Borrower .

SCHEDULE VIII
LEASING EXCEPTIONS
	
	
	Tenant Subleases

	Access Intelligence, LLC sublease of Suite 1810 to Committee for Hispanic Children & Families, Inc.

	Access Intelligence, LLC sublease of Suite 1100 to Artemiss, LLC

	Don Congdon Associates, Inc. sublease of 231 square feet within Suite 2202 to Dunham Literary, Inc.

	 

	Tenant Renewal Options

	Access Intelligence, LLC (fka Chemical Week)

	City of NY - Administration for Children Services - Suites 2000-05

	City of NY - Department of Juvenile Justice

	City of NY - Independent Budget Office

	HSBC Bank USA

	Kinko's, Inc.

	NYC Housing Development Corp.

	Superintendent of Insurance of the State of New York

	 

	Tenant Termination Options

	City of NY - Department of Juvenile Justice

	City of NY - Independent Budget Office

	Superintendent of Insurance of the State of New York

	WB Engineering & Consulting, PLLC

	Tenant Rights of First Offer

	Access Intelligence, LLC (fka Chemical Week)

	NYC Housing Development Corp.

	Superintendent of Insurance of the State of New York

	Tobmar Int'l, Inc. (dba Gateway Newsstands)

	WB Engineering & Consulting, PLLC

	 

	 

	Additional Tenant Improvements not Complete

	 

	PCOM
Guidepost
EP Engineering
Helbrum Levy
Stack Exchange
Wilentz Goldman

	
	
	WB. Engineering
NYHDC
NYEDC

EXHIBIT A
LEGAL DESCRIPTION
ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and being in the Borough of Manhattan, County and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the easterly side of William Street and the northerly side of John Street;
RUNNING THENCE northerly along the easterly side of William Street, 188 feet 3 inches to a point in said easterly side of William Street, distant 154 feet 10 1/4 inches southerly from the corner formed by the intersection of the southerly side of Fulton Street and the said easterly side of William Street;
THENCE easterly on a line forming an angle of 86 degrees 52 minutes 30 seconds on its northerly side with the easterly side of William Street, 159 feet 4 1/4 inches;
THENCE southwesterly on a line forming an angle of 82 degrees 44 minutes 30 seconds on its westerly side with the last mentioned course, 49 feet 5 inches;
THENCE continuing southwesterly on a line forming an angle of 180 degrees 49 minutes 30 seconds on its easterly side with the last mentioned course, 25 feet 7 1/2 inches;
THENCE continuing southwesterly along a line making an angle of 179 degrees 48 minutes on its easterly side with the last mentioned course, 23 feet 2 1/2 inches;
THENCE southeasterly and along a line forming an angle of 93 degrees 51 minutes 50 seconds on its northerly side with the last mentioned course, 24 feet 10 1/4 inches;
THENCE southerly along a line forming an angle of 96 degrees 20 minutes 30 seconds on its westerly side with the last mentioned course, 104 feet 3 1/4 inches to the northerly side of John Street;
THENCE westerly along the northerly side of John Street, 173 feet 4 1/4 inches to the corner formed by the intersection of the northerly side of John Street with the easterly side of William Street at the point or place of BEGINNING.
		
	Premises:
	110 William Street 
New York, NY 10038 
Block: 77 
Lot: 8

EXHIBIT B
TENANT DIRECTION LETTER
[see attached]

FORM OF TENANT DIRECTION LETTER
[BORROWER LETTERHEAD]
[__________________, 20__]
To:    Tenant at 110 William Street, New York, New York
		
	Re:
	Lease (the “Lease”) between 110 William, LLC, a Delaware limited liability company (“Lessor”), and Tenant for 110 William Street, New York, New York (the “Premises”)

Gentlemen:
This letter shall constitute notice to you that the Premises have been acquired by, and the Lessor’s interest in the Lease has been assigned to, 110 William Property Investors III, LLC, a Delaware limited liability company (“New Owner”), and that New Owner has granted a lien and security interest in your lease at 110 William Street, New York, New York and all rents, additional rent and all other monetary obligations to New Owner thereunder (collectively, “Rent”) in favor of U.S. Bank National Association, as Trustee for the Registered Holders of UBS-Barclays Commercial Mortgage Trust 2012-C2, Commercial Mortgage Pass-Through Certificates, Series 2012-C2, as lender (“Lender”), to secure certain of New Owner’s obligations to Lender.  New Owner and Lessor hereby irrevocably instruct and authorize you to disregard any and all previous notices sent to you in connection with Rent and hereafter to deliver all Rent to the following account or address:
Wells Fargo Bank, National Association
U.S. Mail Address:
110 William Property Investors III, LLC
P.O. Box 7312
Philadelphia, PA 19178-7312

Overnight Mail Address:
110 William Property Investors III, LLC
Lockbox #7312
Wells Fargo Bank
MAC Y1372-045
401 Market Street
Philadelphia, PA 19106

Wire Transfer:
Wells Fargo Bank, N.A.
San Francisco, CA
ABA Number:  121000248
Account Number:  4120161104
Account Name:  110 William Property Investors III, LLC

The instructions set forth herein are irrevocable and are not subject to modification in any manner, except that Lender, or any successor lender so identified by Lender, may by written notice to you rescind the instructions contained herein.
Any further inquiries regarding your Lease should be directed to Brian Reiver at the following address:
Savanna 
430 Park Avenue, 12th Floor 
New York, New York 10022 
Tel: (212) 600-2517 
Email: breiver@savannafund.com
[Remainder of page intentionally left blank; signature page to follow]

Sincerely,

NEW OWNER:

110 WILLIAM PROPERTY INVESTORS III, LLC, 
a Delaware limited liability company
By: _______________________________________Name:  
Title:    Authorized Signatory

[Signatures continued on next page]

[signature page to Tenant Direction Letter]

LESSOR:

110 WILLIAM, LLC, 
a Delaware limited liability company
By:   110 William Mezz, LLC, 
a Delaware limited liability company, 
its sole equity member
By:   110 William Mezz Parent, LLC, 
a Delaware limited liability company, 
its sole equity member
By:   SE 110 William Management, LLC 
a New York limited liability company, 
its managing member
By:_________________________________ 
Name:  Kent M. Swig 
Title:    Managing Member

[signature page to Tenant Direction Letter]KBS SOR Q2 2014 Exhibit 10.3

Exhibit 10.3

CASH MANAGEMENT AGREEMENT

Dated: as of June 11, 2012

among

110 WILLIAM, LLC
as Borrower

and

UBS REAL ESTATE SECURITIES INC.
as Lender

and

WELLS FARGO BANK, N.A.
as Cash Management Bank

and

SWIG EQUITIES, LLC
as Manager

CASH MANAGEMENT AGREEMENT
THIS CASH MANAGEMENT AGREEMENT (this "Agreement"), is entered into as of June 11, 2012, among 110 WILLIAM, LLC, a Delaware limited liability company ("Borrower"), having an address at c/o Swig Equities, LLC, 110 William Street, 1st Floor, New York, New York 10038, WELLS FARGO BANK, N.A., a national association ("Cash Management Bank"), having an address at 1901 Harrison Street, 2nd Floor, Oakland, CA 94612, UBS REAL ESTATE SECURITIES INC., a Delaware corporation ("Lender"), having an address at 1285 Avenue of the Americas, New York, New York 10019 and SWIG EQUITIES, LLC, a New York limited liability company ("Manager"), having an address at 110 William Street, 1st Floor, New York, New York 10038.
W I T N E S S E T H:
WHEREAS, pursuant to a certain Loan Agreement (the "Loan Agreement") dated the date hereof between Borrower and Lender, Lender has made a loan to Borrower in the principal amount of$141,500,000.00;
WHEREAS, pursuant to the Security Instrument and the Assignment of Leases, Borrower has granted to Lender a security interest in all of Borrower's right, title and interest in, to and under the Rents, and has assigned and conveyed to Lender all of Borrower's right, title and interest in, to and under the Rents due and to become due to Borrower or to which Borrower is now or may hereafter become entitled, arising out of the Property or any part or parts thereof;
WHEREAS, Borrower, Manager, Lender and Clearing Bank have entered into that certain Clearing Account Agreement of even date herewith, pursuant to which the Clearing Bank shall receive and process all Rents and shall transfer by wire transfer or via the ACH System to the Cash Management Account on each Business Day all amounts constituting available funds on deposit in the Clearing Account;
NOW, THEREFORE, in consideration of the covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms not otherwise defined herein shall have the meaning set forth in the Loan Agreement. As used herein, the following terms shall have the following definitions:
"ACH System" shall mean the automated clearinghouse system.
"Account Documentation" shall have the meaning set forth m Section 7 .17 hereof.
"Allocation Letter" shall have the meaning set forth in Section 3.2 hereof.

"Borrower's Operating Account" shall mean that certain account described on Exhibit B hereto, as the same may be modified from time to time by Borrower upon at least five (5) Business Days written notice to Cash Management Bank and Lender.
"Capital Expenditure Subaccount" shall have the meaning set forth in Section 2.He) hereof.
"Cash Management Account" shall have the meaning set forth in Section 2.1 hereof.
"Cash Management Fee Subaccount" shall have the meaning set forth m Section 2.Hc) hereof.
"Clearing Account" shall mean that certain collection account established by Borrower with Clearing Account Bank into which Borrower and Manager shall cause all Rents to be deposited in accordance with the terms and conditions of the Clearing Account Agreement.
"Clearing Account Agreement" shall mean that certain Deposit Account Control Agreement (Hard Lockbox), dated as of the date hereof, among Borrower, Lender and Clearing Bank.
"Clearing Bank" shall mean Wells Fargo Bank, National Association, together with its successors and assigns.
"Collateral" shall have the meaning set forth in Section 4.2 hereof.
"Debt Service Subaccount" shall have the meaning set forth in Section 2. Hd) hereof.
"Delinquency Subaccount" shall have the meaning set forth in Section 2. l(g) hereof.
"Designee" shall mean the Servicer or other agent of Lender designated by, and acting for the benefit of, Lender. Lender shall provide notice of such designation to Borrower and Cash Management Bank. This Agreement shall constitute written notice to Borrower and Cash Management Bank that, until further written notice from Lender, the Servicer's name and address is as set forth in Section 7.8 hereof.
"Eligible Account" shall mean a separate and identifiable account from all other funds held by the holding institution that is either (i) an account or accounts (or subaccounts thereof) maintained with a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (ii) a segregated trust account or accounts (or subaccounts thereof) maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity that has a Moody's rating of at least "Baa3" and that, in the case of a state chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R. §9.lO(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal

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and state authority. An Eligible Account shall not be evidenced by a certificate of deposit, passbook or other instrument.
"Eligible Institution" shall mean a depository institution or trust company insured by the Federal Deposit Insurance Corporation the short term unsecured debt obligations or commercial paper of which are rated at least "A-1" by S&P, "P-1" by Moody's, and "F-1" by Fitch in the case of accounts in which funds are held for thirty (30) days or less or, in the case of accounts in which funds are held for more than thirty (30) days, the long term unsecured debt obligations of which are rated at least "A+" by S&P, "A2" by Moody's and "AA-" by Fitch.
"Excess Cash Flow Subaccount" shall have the meaning set forth in Section 2.1 (i) hereof.
"Extraordinary Expense Subaccount" shall have the meaning set forth in Section 2. l(i) hereof.
"Insurance Subaccount" shall have the meaning set forth inSection 2.l(b) hereof.
"Minimum Balance" shall have the meaning set forth in Section 2.1 hereof.
"Obligations" shall have the meaning set forth in Section 4.2 hereof.
"Operating Expense Subaccount" shall have the meaning set forth in Section 2.l(h) hereof.
"Permitted Investments" shall mean any one or more of the following obligations or securities acquired at a purchase price of not greater than par, including those issued by Servicer, or any Certificate Administrator under any Securitization or any of their respective Affiliates, payable on demand or having a maturity date not later than the Business Day immediately prior to the first Monthly Payment Date following the date of acquiring such investment and meeting one of the appropriate standards set forth below:
(a)    obligations of, or obligations directly and unconditionally guaranteed as to principal and interest by, the U.S. government or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America and have maturities not in excess of one year;
(b)     federal funds, unsecured certificates of deposit, time deposits, banker's acceptances, and repurchase agreements having maturities of not more than 365 days of any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia, the short-term debt obligations of which are rated (i) "A-1+" (or the equivalent) by S&P and, if it has a term in excess of three months, the long-term debt obligations of which are rated "AAA" (or the equivalent) by S&P, and that (1) is at least "adequately capitalized" (as defmed in the regulations of its primary Federal banking regulator) and (2) has Tier 1 capital (as defined in such regulations) of not less than $1,000,000,000, (ii) in one of the following Moody's rating categories: (1) for maturities less than one month, a long-term rating of "A2" or a short-term rating of "P-1 '', (2) for maturities between one and three months, a long-

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term rating of "Al" and a short-term rating of "P-1 ", (3) for maturities between three months to six months, a long-term rating of "Aa3" and a short-term rating of "P-1" and (4) for maturities over six months, a long-term rating of "Aaa" and a short-term rating of "P-1", or such other ratings approved by Lender, or, after a Securitization, as confirmed in a Rating Agency Confirmation and (c) in one of the following DBRS rating categories: (1) for maturities less than three months, a short term rating by DBRS ofR-1 (high) and (2) for maturities greater than three months, a long-term rating by DBRS of AAA;
(c)     deposits that are fully insured by the Federal Deposit Insurance Corp. ("FDIC");
(d)     commercial paper rated (i) "A-1 +" (or the equivalent) by S&P and having a maturity of not more than 365 days, (ii) in one of the following Moody's rating categories: (1) for maturities less than one month, a long-term rating of"A2" or a short-term rating of"P-1", (2) for maturities between one and three months, a long-term rating of "Al" and a short-term rating of "P-1", (3) for maturities between three months to six months, a long-term rating of"Aa3" and a short-term rating of "P-1" and ( 4) for maturities over six months, a long-term rating of "Aaa" and a short-term rating of "P-1" and (c) in one of the following DBRS rating categories: (1) for maturities less than six months, a short-term rating by DBRS of R-l(high) and (2) for maturities greater than six months, a long-term rating by DBRS of AAA;
(e)     any money market funds that (i) has substantially all of its assets invested continuously in the types of investments referred to in clause (a) above, (ii) seek to maintain a constant net asset value per share, and (iii) has the highest rating obtainable from S&P and Moody's; and
(f)     such other investments approved by Lender, or, after a Securitization, as to which each Rating Agency shall have delivered a Rating Agency Confirmation. Notwithstanding the foregoing, "Permitted Investments" (w) shall exclude any security with the S&P's "r" symbol (or any other Rating Agency's corresponding symbol) attached to the rating (indicating high volatility or dramatic fluctuations in their expected returns because of market risk), as well as any mortgage-backed securities and any security of the type commonly known as "strips"; (x) shall be limited to those instruments that have a predetermined fixed dollar of principal due at maturity that cannot vary or change; (y) shall only include instruments that qualify as "cash flow investments" (within the meaning of Section 860G(a)(6) of the Code); and (z) shall exclude any investment where the right to receive principal and interest derived from the underlying investment provides a yield to maturity in excess of one hundred twenty percent (120%) of the yield to maturity at par of such underlying investment. Interest may either be fixed or variable, and any variable interest must be tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with that index. No investment shall be made which requires a payment above par for an obligation if the obligation may be prepaid at the option of the issuer thereof prior to its maturity. All investments shall mature or be redeemable upon the option of the holder thereof on or prior to the Business Day preceding the day before the date such amounts are required to be applied hereunder.
"Rollover Subaccount" shall have the meaning set forth in Section 2.1(f) hereof.

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"Subaccount" shall have the meaning set forth in Section 2.1 hereof.
"Tax Subaccount" shall have the meaning set forth in Section 2.1(a) hereof.
"UCC" shall have the meaning set forth in the Section 4.2(a)(iv) hereof.
ARTICLE II 
THE ACCOUNTS
Section 2.1        Establishment of Accounts.  As of the date hereof, Borrower and Cash Management Bank have established an Eligible Account with Cash Management Bank bearing account number 4126134279 (the "Cash Management Account") into which, pursuant to the Clearing Account Agreement, Clearing Bank shall transfer by wire transfer or via the ACH System on each Business Day all amounts constituting available funds on deposit in the Clearing Account, which Cash Management Account shall be maintained for the remainder of the term of the Loan. The  Cash Management Account  shall at all times have  a minimum  balance  of $5,000.00 (the "Minimum Balance"). If at any time during the term of the Loan, the balance in the Cash Management Account is less than the Minimum Balance, Borrower shall immediately deposit into the Cash Management Account sufficient funds to meet the Minimum Balance requirement. The following subaccounts (each a "Subaccount") of the Cash Management Account shall be maintained on a ledger-entry basis:
(a)    A Subaccount into which funds sufficient to pay the next Monthly Tax Deposit to the Tax Account in accordance with the terms and conditions of Section 6.2 of the Loan Agreement shall be deposited (the "Tax Subaccount");
(b)    A Subaccount into which funds sufficient to pay the next Monthly Insurance Deposit to the Insurance Account in accordance with the terms and conditions of Section 6.3 of the Loan Agreement shall be deposited (the "Insurance Subaccount");
(c)     A Subaccount into which funds sufficient to pay the fees and expenses of Cash Management Bank then due an payable to Cash Management Bank in accordance with the terms of this Agreement shall be deposited (the "Cash Management Fee Subaccount");
(d)     A Subaccount into which funds sufficient to pay the next Monthly Debt Service Payment Amount shall be deposited (the "Debt Service Subaccount");
(e)     A Subaccount into which funds sufficient to pay the next Monthly Capital Expenditure Deposit to the Capital Expenditure Account in accordance with the terms and conditions of Section 6.4 of the Loan Agreement shall be deposited (the "Capital Expenditure Subaccount");
(f)     A Subaccount into which funds sufficient to pay the next Monthly Rollover Deposit to the Rollover Account in accordance with the terms  and  conditions  of Section 6.5 of the Loan Agreement shall be deposited (the "Rollover Subaccount");
(g)     A Subaccount into which funds sufficient to pay any interest accruing at the Default Rate (without duplication with clause (d) above), late payment charges and any other

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amounts then due and payable under the Loan Documents shall be deposited (the "Delinquency Subaccount");
(h)     A Subaccount into which funds sufficient to pay for Operating Expenses for the applicable period incurred in accordance with an Approved Annual Budget and as set forth in a request for payment submitted by Borrower to Lender specifying the individual Operating Expenses in form and substance reasonably acceptable to Lender shall be deposited (the "Operating Expense Subaccount");
(i)     A Subaccount into which funds sufficient to pay for Extraordinary Expenses for the applicable period approved by Lender, if any (the "Extraordinary Expense Subaccount"); and
(j)     A Subaccount into which all Excess Cash Flow shall be deposited in accordance with the provisions of the Loan Agreement and this Agreement (the "Excess Cash Flow Subaccount"). 
Section 2.2     Additional Subaccounts. Upon Lender's request, Cash Management Bank will establish any additional subaccounts which may be required by Lender from time to time in connection with any payments otherwise required by the Loan Agreement, the Note or other Loan Documents. Borrower hereby agrees that Lender may modify this Agreement for the purpose of establishing such additional sub-accounts and all costs and expenses for establishing and maintaining such accounts shall be paid by Borrower. 
Section 2.3     Account Name. The Cash Management Account shall be entitled "110 William, LLC for the benefit of UBS Real Estate Securities Inc." In the event Lender transfers or assigns the Loan, Cash Management Bank, at Lender's request, shall change the name of the Cash Management Account to the name of the transferee or assignee. In the event Lender retains a Servicer to service the Loan, Cash Management Bank, at Lender's request, shall change the name of the Cash Management Account to the name of Servicer, as agent for Lender.
Section 2.4     Eligible Accounts/Characterization of Accounts. Borrower and Cash Management Bank shall maintain the Cash Management Account as an Eligible Account. The Cash Management Account is and shall be treated as a "securities account" as such term is defined in Section 8-SOl(a) of the UCC and control of the Cash Management Account shall be vested in Lender in accordance with Section 9-104 of the UCC. In the event that balances in the Cash Management Account are uninvested and maintained as cash, the Cash Management Account shall be treated as a "deposit account" as such term is defined in Section 9-102(a) of the UCC. Cash Management Bank hereby agrees that each item of property (whether investment property, financial asset, securities, instrument, cash or other property) credited to the Cash Management Account shall be treated as a "financial asset" within the meaning of Section 8-102( a )(9) of the UCC. Cash Management Bank shall, subject to the terms of this Agreement, treat Lender as entitled to exercise the rights that comprise any financial asset credited to the Cash Management Account. All securities or other property underlying any financial assets credited to the Cash Management Account shall be registered in the name of Cash Management Bank, indorsed to Cash Management Bank or in blank or credited to another securities account maintained in the name of Cash Management Bank and in no case will any financial asset

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credited to the Cash Management Account be registered in the name of Borrower, payable to the order of Borrower or specially indorsed to Borrower.
Section 2.5    Permitted Investments. Sums on deposit in the Cash Management Account shall be invested in Permitted Investments as may be directed by Lender. Absent express investment direction from Lender, account balances shall be uninvested and maintained as cash. All income earned on the funds in the Cash Management Account shall belong to Lender. Borrower acknowledges and agrees that funds on deposit in the Cash Management Account shall not constitute Reserve Funds. Investment of funds on the deposit in the Cash Management Account and entitlement to income thereon shall be governed by this Section 2.5. Investment of Reserve Funds and entitlement to income thereon shall be governed by the terms and conditions of the Loan Agreement.
ARTICLE III
DEPOSITS AND DISBURSEMENTS
Section 3.1    Application of Cash Management Funds to Subaccounts. Provided no Event of Default shall have occurred and is continuing, commencing on the first Business Day following the date hereof and on each Business Day thereafter, Cash Management Bank shall apply all funds on deposit in the Cash Management Account (less the Minimum Balance) to the following Subaccounts in the following amounts and order of priority as per written instructions from Lender or Designee:
(a)    First, funds sufficient to pay the next Monthly Tax Deposit to the Tax Account in accordance with the terms and conditions of Section 6.2 of the Loan Agreement shall be deposited into the Tax Subaccount;
(b)    Second, funds sufficient to pay the next Monthly Insurance Deposit to the Insurance Account in accordance with the terms and conditions of Section 6.3 of the Loan Agreement shall be deposited into the Insurance Subaccount;
(c)    Third, funds sufficient to pay the fees and expenses of Cash Management Bank then due and payable to Cash Management Bank in accordance with this Agreement shall be deposited into the Cash Management Fee Subaccount;
(d)    Fourth, funds sufficient to pay the next Monthly Debt Service Payment Amount shall be deposited into the Debt Service Subaccount;
(e)    Fifth, funds sufficient to pay the next Monthly Capital Expenditure Deposit to the Capital Expenditure Account in accordance with the terms and conditions of Section 6.4 of the Loan Agreement shall be deposited into the Capital Expenditure Subaccount;
(f)    Sixth, funds sufficient to pay the next Monthly Rollover Deposit to the Rollover Account in accordance with the terms and conditions of Section 6.5 of the Loan Agreement shall be deposited into the Rollover Subaccount;

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(g)    Seventh, funds sufficient to pay any interest accruing at the Default Rate (without duplication with clause (d) above), late payment charges and any other amounts then due and payable under the Loan Documents shall be deposited into the Delinquency Subaccount;
(h)    Eighth, funds sufficient to pay for Operating Expenses for the applicable period incurred in accordance with an Approved Annual Budget (subject to a five percent (5%) variance for any line item in the Approved Annual Budget), provided, that during a Cash Sweep Event Period or a Mezzanine Cash Sweep Event Period, such funds shall only be disbursed up to an amount equal to the lesser of (A) the actual cost of the individual Operating Expense and (B) the budgeted amount of such individual Operating Expense as set forth in such Approved Annual Budget, in the case of each of the foregoing clauses (A) and (B), as set forth in a request for payment submitted by Borrower to Lender specifying the individual Operating Expenses in form and substance reasonably acceptable to Lender shall be deposited into the Operating Expense Subaccount;
(i)    Ninth, funds sufficient to pay for Extraordinary Expenses for the applicable period approved by Lender (or for which Lender's approval is not required), if any, shall be deposited into the Extraordinary Expense Subaccount;
(j)    Tenth, funds sufficient to pay the next monthly installment of Mezzanine Debt Service shall be remitted to the Mezzanine Lender;
(k)    Eleventh, for the period commencing on the Closing Date through the Monthly Payment Date occurring in July, 2016, the remaining amount shall be deposited into the Rollover Account (i) until such time that the aggregate amount so deposited, together with the Initial Rollover Reserve Deposit Amount, the Monthly Rollover Deposits deposited from time to time after the Closing Date and the interest accrued on all such Rollover Funds, shall equal or exceed in the aggregate $18,500,000, or (ii) during a Cash Sweep Event Period (regardless of the aggregate amounts that have been deposited pursuant to the preceding clause (i));
(l)    Twelfth, all amounts not otherwise required to be deposited into any other Subaccount pursuant to the terms of this Agreement shall be deposited into the Excess Cash Flow Subaccount to be disbursed in accordance with Section 3.2(j).
Section 3.2    Disbursements. At least one (1) Business Day prior to the Monthly Payment Date, Lender or Designee shall deliver to Cash Management Bank an allocation letter with instructions regarding the disbursement of funds on deposit in the Cash Management Account ("Allocation Letter"). On each Monthly Payment Date, Cash Management Bank shall withdraw all funds on deposit in the Cash Management Account (less the Minimum Balance) and disburse such funds pursuant to the Allocation Letter as follows:
(a)    Disbursements from the Tax Subaccount. Cash Management Bank shall disburse funds on deposit in the Tax Subaccount to Designee for deposit into the Tax Account in accordance with the terms and conditions of Section 6.2 of the Loan Agreement;
(b)    Disbursement from the Insurance Subaccount. Cash Management Bank shall disburse funds on deposit in the Insurance Subaccount to Designee for deposit into the

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Insurance Account in accordance with the terms and conditions of Section 6.3 of the Loan Agreement;
(c)    Disbursement from the Cash Management Fee Subaccount. Cash Management Bank shall disburse funds on deposit in the Cash Management Fee Subaccount to itself for payment of sums then due and payable to Cash Management Bank in accordance with this Agreement;
(d)    Disbursement from the Debt Service Subaccount. Cash Management Bank shall disburse funds on deposit in the Debt Service Subaccount to Designee for the payments set forth in Section 2.3 of the Loan Agreement;
(e)    Disbursement from the Capital Expenditure Subaccount. Cash Management Bank shall disburse funds on deposit in the Capital Expenditure Subaccount to Designee for deposit into the Capital Expenditure Account in accordance with the terms and conditions of Section 6.4 of the Loan Agreement;
(f)    Disbursements from the Rollover Subaccount. Cash Management Bank shall disburse funds on deposit in the Rollover Subaccount to Designee for deposit into the Rollover Account in accordance with the terms and conditions of Section 6.5 of the Loan Agreement;
(g)    Disbursements from the Delinquency Subaccount. Cash Management Bank shall disburse funds on deposit in the Delinquency Subaccount to Designee for payment of any interest accruing at the Default Rate, late payment charges or any other amounts then due and payable under the Loan Documents;
(h)    Disbursements from the Operating Expense Subaccount. Cash Management Bank shall disburse funds in the Operating Expense Subaccount to Borrower for payment of Operating Expenses for the applicable period approved by Lender;
(i)    Disbursements from the Extraordinary Expense Subaccount. Cash Management Bank shall disburse funds in the Extraordinary Expense Subaccount to Borrower for payment of Extraordinary Expenses for the applicable period approved by Lender; and
(j)    Disbursements from the Excess Cash Flow Subaccount. Cash Management Bank shall disburse funds in the Excess Cash Flow Subaccount (i) following Cash Management Bank's receipt of notice from Lender or Designee that a Cash Sweep Event Period has occurred and is continuing, to Designee for deposit into the Excess Cash Flow Account to be held and applied in accordance with the terms and conditions of Sections 6. 7 of the Loan Agreement and (ii) if Cash Management Bank has received no notice that a Cash Sweep Event Period has occurred and is continuing, on each Monthly Payment Date and on the twenty-first (21st) day of each calendar month (unless such day is not a Business Day then on the next succeeding Business Day) (A) in the event a Mezzanine Cash Sweep Event Period shall be continuing, transferred to the Mezzanine Lender to be applied in accordance with the Mezzanine Loan Documents, or (B) in the event no Mezzanine Cash Sweep Event Period shall be continuing, to Borrower's Operating Account.

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ARTICLE IV
PLEDGE OF ACCOUNTS
Section 4.1    Sole Dominion and Control. Borrower and Manager acknowledge and agree that the Cash Management Account and all Subaccounts are subject to the sole dominion, control and discretion of Lender, its authorized agents or designees, including Cash Management Bank, subject to the terms hereof. Neither Borrower nor Manager shall have the right of withdrawal with respect to the Cash Management Account. Cash Management Bank shall have the right and agrees to comply with instructions originated by Lender with respect to the disposition of funds in the Cash Management Account without the further consent of Borrower or Manager or any other Person. Cash Management Bank shall comply with all "entitlement orders" (as defined in Section 8-102(a)(8) of the UCC) and instructions originated by Lender directing transfer or redemptions of any financial asset relating to the Cash Management Account without further consent by Borrower or any other Person. Both this Agreement and the Cash Management Account (as well as the securities entitlement related thereto) shall be governed by the laws of the State of New York. Regardless of any provision of any other agreement, for purposes of the UCC, New York shall be deemed the jurisdiction of Cash Management Bank, as securities intermediary.
Section 4.2    Security for Obligations. (a) To secure the full and punctual payment and performance of all obligations of Borrower now or hereafter existing with respect to the Loan, whether for principal, interest, fees, expenses or otherwise, and all obligations of Borrower now or hereafter existing under the Loan Agreement, the Note, the Security Instrument, this Agreement and all other Loan Documents (all such obligations, collectively, the "Obligations"), Borrower hereby grants to Lender a first priority continuing security interest in and to the following property of Borrower, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of the same, collectively, the "Collateral"):
(i)    the Cash Management Account and all cash, checks, drafts,certificates and instruments, if any, from time to time deposited or held in the Cash Management Account, including, without limitation, all deposits or wire transfers made to the Cash Management Account;
(ii)    any and all amounts invested in Permitted Investments;
(iii)    all interest, dividends, cash, instruments, investment property and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and
(iv)    to the extent not covered by clauses (i), (ii) or (iii) above, all "proceeds" (as defined under the Uniform Commercial Code as in effect in the State of New York (the "UCC")) of any or all of the foregoing.
(b)    Lender, its authorized agents or designees, including Cash Management Bank, shall have with respect to the Collateral, in addition to the rights and remedies herein set forth, all of the rights and remedies available to a secured party under the UCC, as if such rights and remedies were fully set forth herein.

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(c)    All statements and reports prepared by Cash Management Bank with respect to the Cash Management Account shall to be sent to Borrower and Lender or Designee no less frequently than monthly.
Section 4.3    Rights on Default. Upon the occurrence of an Event of Default, Lender shall promptly notify Cash Management Bank in writing of such Event of Default and, without notice from Cash Management Bank or Lender, (a) Borrower shall have no further right in respect of (including, without limitation, the right to instruct Lender or Cash Management Bank to transfer excess funds from) the Cash Management Account or Subaccounts, (b) Lender may direct Cash Management Bank to liquidate and transfer any amounts then invested in Permitted Investments to the Cash Management Account or reinvest such amounts in other Permitted Investments as Lender may reasonably determine is necessary to perfect or protect any security interest granted or purported to be granted hereby or to enable Cash Management Bank, as agent for Lender, or Lender to exercise and enforce Lender's rights and remedies hereunder with respect to any Collateral, and ( c) Lender may apply any Collateral to any Obligations in such order of priority as Lender may determine in its sole discretion.
Section 4.4    Financing Statement; Further Assurances. Simultaneously herewith, Borrower shall deliver to Lender for filing a financing statement or statements in connection with the Collateral in the form required by Lender to properly perfect Lender's security interest therein. Borrower agrees that at any time and from time to time, at the expense of Borrower, Borrower will promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary or desirable, or that Cash Management Bank or Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby (including, without limitation, any security interest in and to any Permitted Investments) or to enable Cash Management Bank or Lender to exercise and enforce its rights and remedies hereunder with respect to any Collateral.
Section 4.5    Termination of Agreement. This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until payment in full of the Obligations. Upon payment and performance in full of the Obligations, this Agreement shall terminate and Borrower shall be entitled to the return, upon its request and at its expense, of such of the Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof, and Cash Management Bank and/or Lender shall execute such instruments and documents as may be reasonably requested by Borrower to evidence such termination and the release of the lien hereof.
ARTICLEV
RIGHTS AND DUTIES OF LENDER AND AGENT
Section 5.1    Reasonable Care. Beyond the exercise of reasonable care in the custody thereof or as otherwise expressly provided herein, neither Cash Management Bank nor Lender shall have any duty as to any Collateral in its possession or control as agent therefor or bailee thereof or any income thereon or the preservation of rights against any Person or otherwise with respect thereto. Cash Management Bank and Lender each shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which Cash Management Bank

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or Lender accords its own property, it being understood that Lender shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in value thereof, by reason of the act or omission of Cash Management Bank or Lender, its Affiliates, agents, employees or bailees, except to the extent that such loss or damage results from Cash Management Bank's or Lender's gross negligence or willful misconduct, provided that nothing in this Article V shall be deemed to relieve Cash Management Bank from the duties and standard of care which, as a commercial bank, it generally owes to depositors. Neither Lender nor Cash Management Bank shall have any liability for any loss or the amount of income resulting from the investment of funds in Permitted Investments in accordance with the terms and conditions of this Agreement and the Loan Agreement.
Section 5.2    Indemnitv. Cash Management Bank, in its capacity as agent hereunder, shall be responsible for the performance only of such duties as are specifically set forth herein, and no duty shall be implied from any provision hereof. Cash Management Bank shall not be under any obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any suit in respect hereof, or to advance any of its own monies. Borrower shall indemnify and hold Cash Management Bank and Lender, their respective employees and officers harmless from and against any loss, cost or damage (including, without limitation, reasonable attorneys' fees and disbursements) incurred by Cash Management Bank or Lender in connection with the transactions contemplated hereby, except to the extent that such loss or damage results from Cash Management Bank's or Lender's gross negligence or willful misconduct.
Section 5.3    Reliance. Cash Management Bank shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper, document or signature reasonably believed by it to be genuine, and it may be assumed that any person purporting to act on behalf of Borrower giving any of the foregoing in connection with the provisions hereof has been duly authorized to do so. Cash Management Bank may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder and in good faith in accordance therewith. Cash Management Bank shall not be liable to Borrower for any act or omission done or omitted to be done by Cash Management Bank in reliance upon any instruction, direction or certification received by Cash Management Bank and without gross negligence or willful or reckless misconduct.
Section 5.4    Resignation of Cash Management Bank. (a) Cash Management Bank shall have the right to resign as Cash Management Bank hereunder upon thirty (30) days' prior written notice to Borrower and Lender, and in the event of such resignation, Lender shall appoint a successor Cash Management Bank which must be an Eligible Institution. No such resignation by Cash Management Bank shall become effective until a successor cash management bank shall have accepted such appointment and executed an instrument by which it shall have assumed all of the rights and obligations of Cash Management Bank hereunder. If no such successor cash management bank is appointed within sixty (60) days after receipt of the resigning Cash Management Bank's notice of resignation, the resigning Cash Management Bank shall disburse available funds on deposit in the Cash Management Account to an account designated in writing by Lender.

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(b)    In connection with any resignation by Cash Management Bank, (i) the resigning Cash Management Bank shall, at the sole cost of Borrower, (A) duly assign, transfer and deliver to the successor cash management bank this Agreement and all cash and Permitted Investments held by it hereunder, (B) execute and/or authorize such financing statements and other instruments as may be necessary to assign to the successor cash management bank the security interest in the Collateral existing in favor of the retiring Cash Management Bank hereunder and to otherwise give effect to such succession and (C) take such other actions as may be reasonably required by Lender or the successor cash management bank in connection with the foregoing, (ii) the successor cash management bank shall establish in its name, as secured party, cash collateral accounts, which shall become the Cash Management Account for purposes of this Agreement upon the succession of such cash management bank and (iii) Borrower shall cooperate with Lender to issue new joint instructions to the Clearing Account Bank with respect to the transfer of funds to such successor cash management bank. Cash Management Bank shall have the right to deduct from the final disbursement of funds from the Cash Management Account any amounts that are then due and owing to Cash Management Bank under this Agreement, including, without limitation, cash management fees and Bank Fees incurred during the month in which the Agreement is terminated but not yet billed to the Cash Management Account, as well as any reasonable and customary costs and expenses anticipated in connection with the termination of this Agreement.
(c)    Lender at its sole discretion shall have the right, upon thirty (30) days notice to Cash Management Bank and Borrower, to substitute Cash Management Bank with a successor cash management bank that satisfies the requirements of an Eligible Institution or to have the Cash Management Account held by another Eligible Institution, provided that such successor cash management bank shall become a party to, and perform the duties of Cash Management Bank pursuant to the terms of this Agreement or execute and deliver a replacement Cash Management Agreement having terms and provisions substantially similar to this Agreement.
(d)    Borrower's obligation to make payments due to Cash Management Bank, as well as the indemnifications made, and the limitations on liability of Cash Management Bank accepted by Borrower and Lender under this Agreement will continue after the termination of this Agreement or resignation by Cash Management Bank, as applicable, with respect to all circumstances to which they are applicable, existing or occurring before such termination, and any liability of any party to this Agreement, as determined under the provisions of this Agreement, with respect to acts or omissions of such party prior to such termination will also survive such termination.
Section 5.5    Lender Appointed Attorney-In-Fact. Borrower hereby irrevocably constitutes and appoints Lender as Borrower's true and lawful attorney-in-fact, with full power of substitution, to execute, acknowledge and deliver any instruments and to exercise and enforce every right, power, remedy, option and privilege of Borrower with respect to the Collateral, and do in the name, place and stead of Borrower, all such acts, things and deeds for and on behalf of and in the name of Borrower, which Borrower could or might do or which Lender or Cash Management Bank (as agent of Lender) may deem necessary or desirable to more fully vest in Lender and Cash Management Bank (as agent of Lender), the rights and remedies provided for herein and to accomplish the purposes of this Agreement. The foregoing

13

powers of attorney are irrevocable and coupled with an interest. If Borrower fails to perform any agreement herein contained and such failure shall continue for five (5) Business Days after notice of such failure is given to Borrower, Lender may perform or cause performance of any such agreement, and any reasonable expenses of Lender and Cash Management Bank in connection therewith shall be paid by Borrower.
Section 5.6    Acknowledgment of Lien/Offset Rights. Cash Management Bank hereby acknowledges and agrees that (a) the Cash Management Account shall be held by Cash Management Bank in the name of Lender, (b) all funds held in the Accounts shall be held for the benefit of Lender, (c) Borrower has granted to Lender a first priority security interest in the Collateral, (d) Cash Management Bank shall not disburse any funds from the Cash Management Account or any Subaccount except as provided herein, and ( e) Cash Management Bank shall invest and reinvest any balance of the Cash Management Account in Permitted Investments as Lender shall so direct as provided herein. Cash Management Bank hereby waives any right of offset, banker's lien or similar rights against, or any assignment of, or security interest or other interest in, the Collateral.
ARTICLE VI
REMEDIES
Section 6.1    Remedies. Upon the occurrence of an Event of Default, Lender or Cash Management Bank, as agent for Lender, may:
(a)    without notice to Borrower, except as required by law, and at any time or from time to time, charge, set-off and otherwise apply all or any part of the Collateral against the Obligations or any part thereof;
(b)    in its sole discretion, at any time and from time to time, exercise any and all rights and remedies available to it under this Agreement, and/or as a secured party under the UCC and/or under any other applicable law; and
(c)    demand, collect, take possession of, receive, settle, compromise, adjust, sue for, foreclose or realize upon the Collateral (or any portion thereof) as Lender may determine in its sole discretion.
Section 6.2    Waiver. Borrower hereby expressly waives, to the fullest extent permitted by law, presentment, demand, protest or any notice of any kind in connection with this Agreement or the Collateral. Borrower acknowledges and agrees that ten (10) days' prior written notice of the time and place of any public sale of the Collateral or any other intended disposition thereof shall be reasonable and sufficient notice to Borrower within the meaning of the UCC.
ARTICLE VII
MISCELLANEOUS
Section 7 .1    Transfers and Other Liens. Borrower agrees that it will not (i) sell or otherwise dispose of any of the Collateral or (ii) create or permit to exist any Lien upon

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or with respect to all or any of the Collateral, except for the Lien granted to Cash Management Bank, as agent for Lender, under this Agreement. 
Section 7.     Lender's Right to Perform Borrower's Obligations; No Liability of Lender. If Borrower fails to perform any of the covenants or obligations contained herein, and such failure shall continue for a period of ten (10) Business Days after Borrower's receipt of written notice thereof from Lender, Lender may itself perform, or cause performance of, such covenants or obligations, and the reasonable expenses of Lender incurred in connection therewith shall be payable by Borrower to Lender. Notwithstanding Lender's right to perform certain obligations of Borrower, it is acknowledged and agreed that Borrower retains control of the Property and operation thereof and notwithstanding anything contained herein or Cash Management Bank's or Lender's exercise of any of its rights or remedies hereunder, under the Loan Documents or otherwise at law or in equity, neither Cash Management Bank nor Lender shall be deemed to be a mortgagee-in-possession nor shall Lender be subject to any liability with respect to the Property or otherwise based upon any claim of lender liability.
Section 7.3    Waiver. The rights and remedies provided in this Agreement and the other Loan Documents are cumulative and may be exercised independently or concurrently, and are not exclusive of any other right or remedy provided at law or in equity. No failure to exercise or delay by Cash Management Bank or Lender in exercising any right or remedy hereunder or under the Loan Documents shall impair or prohibit the exercise of any such rights or remedies in the future or be deemed to constitute a waiver or limitation of any such right or remedy or acquiescence therein. Every right and remedy granted to Cash Management Bank and/or Lender hereunder or by law may be exercised by Cash Management Bank and/or Lender at any time and from time to time, and as often as Cash Management Bank and/or Lender may deem it expedient. Any and all of Cash Management Bank's and/or Lender's rights with respect to the lien and security interest granted hereunder shall continue unimpaired, and Borrower shall be and remain obligated in accordance with the terms hereof, notwithstanding (a) any proceeding of Borrower under the Federal Bankruptcy Code or any bankruptcy, insolvency or reorganization laws or statutes of any state, (b) the release or substitution of Collateral at any time, or of any rights or interests therein or (c) any delay, extension of time, renewal, compromise or other concession or accommodation granted by the Cash Management Bank and/or Lender in the event of any default, with respect to the Collateral or otherwise hereunder. No delay or extension of time by Cash Management Bank and/or Lender in exercising any power of sale, option or other right or remedy hereunder, and no notice or demand which may be given to or made upon Borrower by Cash Management Bank and/or Lender, shall constitute a waiver thereof, or limit, impair or prejudice Cash Management Bank's and/or Lender's right, without notice or demand, to take any action against Borrower or to exercise any other power of sale, option or any other right or remedy.
Section 7.4    Expenses. (a) Borrower shall pay to Cash Management Bank and Lender and/or Cash Management Bank's and Lender's counsel on demand, from time to time, all reasonable out-of-pocket costs and expenses (including, but not limited to, reasonable attorneys' fees and disbursements, and transfer, recording and filing fees, taxes and other charges) of the creation or perfection of any lien or security interest granted or intended to be granted hereby, the custody, care, sale, transfer, administration, collection of or realization on the Collateral, or in any way relating to the enforcement, protection or preservation of the rights or remedies of Cash

15

Management Bank and/or Lender under this Agreement, the Loan Agreement, the Note, the Security Instrument, or the other Loan Documents.
(b)    Cash Management Bank shall be entitled to charge the Cash Management Account (to be paid in accordance with Section 3.2(c)) for such fees and charges pursuant to a separate Fee Agreement between Borrower and Cash Management Bank (the "Fee Agreement"), a form of which is attached hereto as Exhibit A. Notwithstanding the foregoing, Cash Management Bank shall have no right to charge, set-off or otherwise apply any portion of the Collateral against any amounts owed Cash Management Bank by Borrower or Lender other than Cash Management Bank's right to collect fees and expenses owed to Cash Management Bank pursuant to the Fee Agreement in accordance with the terms and provisions of this Agreement.
Section 7.5    Entire Agreement. This Agreement constitutes the entire and final agreement between the parties with respect to the subject matter hereof and may not be changed, terminated or otherwise varied, except by a writing duly executed by the parties.
Section 7.6    No Waiver. No waiver of any term or condition of this Agreement, whether by delay, omission or otherwise, shall be effective unless in writing and signed by the party sought to be charged, and then such waiver shall be effective only in the specific instance and for the purpose for which given.
Section 7.7    Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective successors and permitted assigns.
Section 7.8    Notices. All notices, demands, requests, consents, approvals and other communications (any of the foregoing, a ''Notice") required, permitted, or desired to be given hereunder shall be in writing sent by telefax or by registered or certified mail, postage prepaid, return receipt requested or delivered by hand or reputable overnight courier addressed to the party to be so notified at its address hereinafter set forth, or to such other address as such party may hereafter specify in accordance with the provisions of this Section 7.8. Any such Notice shall be deemed to have been received three (3) days after the date such Notice is mailed or on the date of sending by telefax (if the sender thereof shall have confirmation thereof and a hard copy is also sent by mail to the recipient) or delivery by hand or the next day if sent by an overnight commercial courier addressed to the parties as follows:
	
		
	If to Lender:
	USB Real Estate Securities Inc.

	 
	1285 Avenue of the Americas

	 
	New York, New York 10019

	 
	Attention: Transaction Management -

	 
	Henry Chung

	 
	Facsimile No.: (212) 821-2943

16

	
		
	with a copy to:
	Dechert LLP

	 
	1095 Avenue of the Americas

	 
	New York, New York 10036

	 
	Attention: Timothy A. Stafford, Esq.

	 
	Facsimile No.: (212) 698-3599

	 
	 

	If to Borrower:
	110 William, LLC

	 
	c/o Swig Equities, LLC

	 
	110 William Street, 1st Floor

	 
	New York, New York 10038

	 
	Attn: Kent M. Swig

	 
	Fax No.: (212) 508-7610

	 
	 

	With a copy to:
	Fried, Frank, Harris, Shriver, & Jacobson 

	 
	LLP

	 
	One New York Plaza

	 
	New York, New York 10004

	 
	Attn: Robert Sorin, Esq.

	 
	Fax No.: (212) 859-4000

	 
	 

	With a copy to:
	Silverpeak Real Estate Partners

	 
	1330 6th Street Avenue, Suite 1200

	 
	New York, New York 10019

	 
	Attention: Anthony Juliano

	 
	Facsimile No.: (212) 716-2065

	 
	 

	With a copy to:
	Morrison & Foerster LLP

	 
	1290 Avenue of the Americas

	 
	New York, New York 10104-0050

	 
	Attention: Thomas P. McGovern, Esq.

	 
	Facsimile No.: (212) 903-3623

	 
	 

	If to Manager:
	Swig Equities, LLC

	 
	110 William Street, 1st Floor

	 
	New York, New York 10038

	 
	Attn: Kent M. Swig

	 
	Fax No.: (212) 508-7610

	 
	 

	With a copy to:
	Fried, Frank, Harris, Shriver, & Jacobson 

	 
	LLP

	 
	One New York Plaza

	 
	New York, New York 10004

	 
	Attn: Robert Sorin, Esq.

	 
	Fax No.: (212) 859-4000

	 
	 

	If to Cash Management Bank:
	Wells Fargo Bank, N.A.

	 
	1901 Harrison Street, 2nd Floor

17

	
		
	 
	Oakland, California 94618

	 
	Attn: CMS Cash Management Servicing

	 
	Fax No.: 866-359-5954

	 
	 

	If to Servicer:
	Midland Loan Services

	 
	10851 Mastin, Suite 700

	 
	Overland Park, Kansas 66210

	 
	Attn: Jon Porter

	 
	Fax No.: 913-253-9708

Section 7.9    Captions. All captions in this Agreement are included herein for convenience of reference only and shall not constitute part of this Agreement for any other purpose.
Section 7.10    Governing Law. THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO TIDS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEWYORK, COUNTY OF NEW YORK, PURSUANT TO SECTIONS-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HA VE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

18

United Corporate Services, Inc.,
874 Walker Road, Suite C
Dover, Delaware, 19904 

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 7.11    Counterparts. This Agreement may be executed in any number of counterparts each of which shall be deemed an original and all of which, taken together, shall constitute this Agreement.
Section 7.12    Interpleader. If Cash Management Bank, at any time in good faith, is in doubt as to the action it should take under this Agreement, it shall have the right to commence, at Borrower's expense, an interpleader action in any United States district court in the State of New York and to take no further action except in accordance with joint instructions from Borrower and Lender or in accordance with the final order of the court in such action.
Section 7.13    Conflicts. In the event of any conflict between the provisions of this Agreement and the Loan Agreement, the provisions of the Loan Agreement shall control. 
Section 7.14    Entire Agreement. This Agreement constitutes the entire and final agreement between the parties with respect to the subject matter hereof and may not be changed, terminated or otherwise varied, except by a writing duly executed by the parties.
Section 7.15    Exculpation. The provisions of Section 11.22 of the Loan Agreement are hereby incorporated by reference into this Agreement to the same extent and with the same force as if fully set forth herein.
(a)    Notwithstanding anything to the contrary contained herein, as between Cash Management Bank and Borrower only, (i) the covenants, agreements and obligations of Borrower under this Agreement shall bind only Borrower's interest in the Property and (ii) no personal liability or responsibility is assumed by, or shall be asserted by Cash Management Bank

19

against Borrower nor shall any recourse be had by Cash Management Bank beyond Borrower's interest in the Property or be enforceable by Cash Management Bank against Borrower on account of this Agreement or anything contained herein.
Section 7.16    TRIAL BY JURY. THE PARTIES HERETO HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH PARTY HERETO, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF TIDS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF TIDS WAIVER.
Section 7.17    Account Documentation. Except as specifically provided in this Agreement, Lender and Borrower agree that the Cash Management Account (including the Subaccounts) will be subject to, and Cash Management Bank's operation of the Cash Management Account (including the Subaccounts) will be in accordance with, the terms of Cash Management Bank's applicable deposit account agreement and other related account documentation governing the Cash Management Account (including the Subaccounts) (collectively, the "Account Documentation"). Borrower agrees, upon Cash Management Bank's request, to promptly execute and deliver the Account Documentation to Cash Management Bank. The parties agree that, in the event of a conflict between this Agreement and the Account Documentation, this Agreement shall control.

[NO FURTHER TEXT ON THIS PAGE]

20

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written,

BORROWER:

110 WILLIAM, LLC.
a Delaware limited liability company

By:    110 William Mezz, LLC.
a Delaware limited liability company,
its sole equity member

By:    110 William Mezz Parent, LLC.
a Delaware limited liability company,
its sole equity member

By:    SE 110 William Management, LLC.
a New York limited liability company,
its managing member

By: /s/ Kent M. Swig                           
Name: Kent M. Swig
Title: Managing Member

[Signatures continue on next page]

[Signature Page to Cash Management Agreement]

LENDER:

UBS REAL ESTATE SECURITIES, INC., a Delaware
corporation 

By: /s/ Timothy McGuire                             
Name: Timothy McGuire
Title: Director 

By: /s/ Maryann Fisher                                 
Name: Maryann Fisher
Title: Director

[Signatures continue on next page]

[Signature Page to Cash Management Agreement]

CASH MANAGEMENT BANK:

WELLS FARGO BANK, N.A.,
a national banking association

By: /s/ Perry J. Monroe                          
Name: Perry J. Monroe
Title: Vice President

[Signatures continue on next page]

[Signature Page to Cash Management Agreement]

MANAGER:

SWIG EQUITIES, LLC.
a New York limited liability company

By: /s/ Kent M. Swig                      
Name: Kent M. Swig
Title: Managing Member

[Signature Page to Cash Management Agreement]

EXHIBIT A
FEE AGREEMENT

FEE AGREEMENT
June 11, 2012

	
		
	Lender:
	USB REAL ESTATE SECURITIES INC.

	Borrower:
	110 WILLIAM, LLC

	Services Offered:
	Cash Collateral Services

	Loan Size:
	$141,500,000.00

	Anticipated Close Date:
	June 11, 2012

	 
	 

Acceptance Fee..............................................................................................................................................W AIVED
This one-time fee is payable upon closing and includes the review of this Agreement and supporting documentation
Monthly Servicing Administration Fee...........................................................................................$300.00 I month*
Monthly Treasury Account Fee ..................................................................................$125.00 I month** (estimate)
*The Monthly Servicing Administration Fee is subject to change in Agent's reasonable discretion (i) upon the occurrence of a trigger or cash sweep event, or (ii) pursuant to Agent's then current fee structure for the servicing and administration of accounts of this type, provided that the minimum monthly servicing and administration fee shall not be less than $300 I month_
**The Monthly Treasury Account Fee is an estimate of the treasury services fees incurred on a monthly basis and includes the following: treasury account maintenance fee, credit/disbursement fees, account analysis and statement fee and online treasury reporting fee.
Out-of-Pocket Expenses
Fees quoted do not include any out-of-pocket expenses including, but not limited to, expenses of foreign depositaries, stationery, overnight courier, and messenger costs. These expenses will be billed, at our cost, when incurred. In the event the transaction terminates before closing, all out-of-pocket expenses incurred will be billed to the account.

EXH. A

EXHIBIT B

BORROWER'S OPERATING ACCOUNT

Bank:    Capital One Bank
Account Name:    110 William LLC
ABA Routing Number:    021407912
Account Number:     9654009506

A-2

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