Document:

RIII Q2 2011 Exhibit 10.2

Exhibit 10.2

LOAN AGREEMENT

BY

AND BETWEEN

JP ABERDEEN PARTNERS, LP,
a Delaware limited partnership
(“Borrower”)

AND

KBS DEBT HOLDINGS III, LLC,
a Delaware limited liability company
(As “Agent” and a “Lender”)

AND

the Other Lenders Now or
Hereafter Parties Hereto 

TABLE OF CONTENTS

    	
					
	 
	 
	Page
	 

	1.
	Recitals
	2
	

	 
	 
	 
	 

	2.
	Definitions
	2
	

	 
	 
	 
	 

	3.
	The Loan; Disbursement of Loan; Establishment of Accounts
	15
	

	 
	 
	 
	 

	 
	(a)
	Loan
	15
	

	 
	(b)
	Loan Disbursements
	15
	

	 
	(c)
	Interest Reserve Account
	16
	

	 
	(d)
	No Reborrowings
	17
	

	 
	(e)
	Accounts
	17
	

	 
	(f)
	Disbursement Deadline
	17
	

	 
	 
	 
	 

	4.
	Interest Payments; Default Interest Rate; Loan Free; Prepayment Fee; Stated Maturity
	17
	

	 
	 
	 
	 

	 
	(a)
	Interest
	17
	

	 
	(b)
	Default Interest Rate
	17
	

	 
	(c)
	Loan Fee
	18
	

	 
	(d)
	Prepayment Fee
	18
	

	 
	(e)
	Stated Maturity
	18
	

	 
	(f)
	Extension Option
	18
	

	 
	 
	 
	 

	5.
	Security for Loan; Guaranty
	19
	

	 
	 
	 
	 

	 
	(a)
	Security for Loan
	19
	

	 
	(b)
	Guaranty
	19
	

	 
	 
	 
	 

	6.
	Conditions Precedent to Closing of the Loan
	19
	

	 
	 
	 
	 

	 
	(a)
	Loan Documents
	20
	

	 
	(b)
	Third Party Agreements
	21
	

	 
	(c)
	Financial Statements
	21
	

	 
	(d)
	Borrower's Equity
	21
	

	 
	(e)
	Insurance Policies
	21
	

	 
	(f)
	Leases
	21
	

	 
	(g)
	Title Insurance Policy
	22
	

	 
	(h)
	ALTA Survey
	22
	

	 
	(i)
	Zoning; Conditional User Permits and Certificates of Occupancy
	22
	

	 
	(j)
	Flood Plain Certification
	22
	

	 
	(k)
	Appraisal
	22
	

	 
	(l)
	Engineering Report
	23
	

	 
	(m)
	Environmental Report
	23
	

	 
	(n)
	Borrower Authority
	23
	

- i -

TABLE OF CONTENTS
(continued)

	
					
	 
	 
	Page
	 

	 
	(o)
	Legal Opinion
	24
	

	 
	(p)
	UCC and Lien Searches
	25
	

	 
	(q)
	Utilities
	25
	

	 
	(r)
	Environmental Disclosure
	25
	

	 
	(s)
	Conditional Use Permits
	25
	

	 
	(t)
	Additional Matters
	26
	

	 
	 
	 
	 

	7.
	Title Insurance
	26
	

	 
	 
	 
	 

	 
	(a)
	Title Insurance
	26
	

	 
	 
	 
	 

	8.
	Insurance
	28
	

	 
	 
	 
	 

	 
	(a)
	Isurance Requirements
	28
	

	 
	(b)
	Automatice Reinstatement
	31
	

	 
	(c)
	Other Requirements With Respect to Insurance
	31
	

	 
	(d)
	Insurance Review
	33
	

	 
	(e)
	Notice of Casualty
	34
	

	 
	(f)
	Settlement of Claim
	34
	

	 
	(g)
	Application of Insurance Proceeds
	34
	

	 
	 
	 
	 

	9.
	Eminent Domain
	35
	

	 
	 
	 
	 

	 
	(a)
	Notice of Condemnation
	35
	

	 
	(b)
	Settlement of Claim
	35
	

	 
	(c)
	Application of Condemnation Awards
	35
	

	 
	(d)
	No Lender Obligation
	36
	

	 
	 
	 
	 

	10.
	Rights of Access and Inspection
	36
	

	 
	 
	 
	 

	 
	(a)
	Loan Documents
	20
	

	 
	 
	 
	 

	11.
	Financial Reports, Property Reports and Annual Budget
	36
	

	 
	 
	 
	 

	 
	(a)
	Annual Financial Reports
	36
	

	 
	(b)
	Monthly Reports
	37
	

	 
	(c)
	Preparation and Certification
	38
	

	 
	(d)
	Annual Budget
	38
	

	 
	(e)
	Right to Audit
	38
	

	 
	(f)
	Quarterly Meetings; Annual Operating Statements; Additional Financial 
and Other Records
	39
	

	 
	 
	 
	 

	12.
	General Covenants of Borrower
	40
	

	 
	 
	 
	 

	 
	(a)
	Operation and Maintenance of Property
	40
	

	 
	(b)
	Restricted Sale and Encumbrance of Property and of Borrower Interests; 
Other Indebtedness
	41
	

- ii -

TABLE OF CONTENTS
(continued)

	
					
	 
	 
	Page
	 

	 
	(c)
	General Indemnity
	41
	

	 
	(d)
	Leases
	42
	

	 
	(e)
	Notices
	43
	

	 
	(f)
	Property Management
	43
	

	 
	(g)
	General ERISA Covenant
	44
	

	 
	(h)
	Principal Place of Business; Choice of Law
	44
	

	 
	(i)
	Compliance with Governmental Prohibitions
	44
	

	 
	(j)
	No Distributions
	45
	

	 
	(k)
	Patriot Act Compliance
	45
	

	 
	(l)
	Partial Satisfaction
	46
	

	 
	(m)
	Assumption in Non-Consolidation Opinion
	47
	

	 
	 
	 
	 

	13.
	Further Assurances
	47
	

	 
	 
	 
	 

	14.
	Appraisals
	48
	

	 
	 
	 
	 

	15.
	General Representations and Warranties of Borrower
	48
	

	 
	 
	 
	 

	 
	(a)
	Organization; Corporate Powers; Authorization of Borrowing
	48
	

	 
	(b)
	Title to Property; Matters Affecting Property
	50
	

	 
	(c)
	Financial Statements
	51
	

	 
	(d)
	No Loan Broker
	52
	

	 
	(e)
	No Default
	52
	

	 
	(f)
	Lawful Interest
	52
	

	 
	(g)
	RICO
	52
	

	 
	(h)
	ERISA
	52
	

	 
	(i)
	Business Purpose
	52
	

	 
	(j)
	Solvency
	52
	

	 
	(k)
	Adequate Capitalization
	52
	

	 
	(l)
	Violations of Governmental Prohibitions
	53
	

	 
	(m)
	No Separate Insurance
	53
	

	 
	(n)
	Federal Reserve Regulations; Investment Company Act
	53
	

	 
	(o)
	Submission of Requests for Advance
	53
	

	 
	(p)
	No Other Indebtedness
	54
	

	 
	(q)
	Recycled Entity Representations
	54
	

	 
	(r)
	Third Party Agreements
	54
	

	 
	(s)
	Accounts
	54
	

	 
	 
	 
	 

	16.
	Event of Default
	55
	

	 
	 
	 
	 

	 
	(a)
	Event of Default
	55
	

	 
	(b)
	Right to Cure Non-Monetary Default
	57
	

- iii -

TABLE OF CONTENTS
(continued)

	
					
	 
	 
	Page
	 

	17.
	Remedies
	59
	

	 
	 
	 
	 

	 
	(a)
	Actions upon Event of Default
	59
	

	 
	(b)
	Appointment of Agent as Attorney-in-Fact
	59
	

	 
	(c)
	Cross-Default to Note and Other Loan Documents
	59
	

	 
	 
	 
	 

	18.
	Joint and Several Liability
	59
	

	 
	 
	 
	 

	19.
	Title Endsorsements; Tax Searches; Administrative Costs
	59
	

	 
	 
	 
	 

	20.
	Miscellaneous
	60
	

	 
	 
	 
	 

	 
	(a)
	Notices
	60
	

	 
	(b)
	Waivers
	61
	

	 
	(c)
	Agent's Expenses; Rights of Lenders
	61
	

	 
	(d)
	Agent and Lenders Not Partner of Borrower; Borrower in Control
	61
	

	 
	(e)
	No Third Party
	62
	

	 
	(f)
	Time of Essence; Context
	62
	

	 
	(g)
	Successors and Assigns
	62
	

	 
	(h)
	Governing Jurisdiction
	62
	

	 
	(i)
	Entire Agreement
	62
	

	 
	(j)
	Headings
	63
	

	 
	(k)
	Severability
	63
	

	 
	(l)
	Counterparts
	63
	

	 
	(m)
	Waiver of Jury Trial
	63
	

	 
	(n)
	Including Means Without Limitation
	63
	

	 
	(o)
	Sole and Absolute Discretion
	63
	

	 
	(p)
	Replacement Notes
	63
	

	 
	 
	 
	 

	21.
	Borrower Exculpation
	64
	

	 
	 
	 
	 

	 
	(a)
	Borrower's Recourse Liabilities
	64
	

	 
	(b)
	Full Liability for all Indebtedness
	65
	

	 
	 
	 
	 

	22.
	Intentionally Omitted
	66
	

	 
	 
	 
	 

	23.
	Special Representations, Warranties and Covenants of Borrower
	66
	

	 
	 
	 
	 

	24.
	No Withholdings
	67
	

	 
	 
	 
	 

	25.
	Special Providions
	67
	

	 
	 
	 
	 

	 
	(a)
	Sale of Note and Secondary Market Transaction
	67
	

- iv -

TABLE OF CONTENTS
(continued)

	
					
	 
	 
	Page
	 

	 
	(b)
	Use of Information
	68
	

	 
	(c)
	Borrower's Obligations Regarding Disclosure Documents
	69
	

	 
	(d)
	Borrower Indemnity Regarding Filings
	69
	

	 
	(e)
	Indemnification Procedure
	70
	

	 
	(f)
	Contribution
	70
	

	 
	(g)
	Severance of Loan
	70
	

	 
	(h)
	Retention of Servicer
	71
	

	 
	 
	 
	 

	26.
	The Agent And The Lenders
	71
	

	 
	 
	 
	 

	 
	(a)
	Rights, Duties and Immunities of the Agent
	71
	

	 
	(b)
	Lenders' Pro Rata Shares
	76
	

	 
	(c)
	Respecting Loans and Payments
	76
	

	 
	(d)
	No Other Duties, Etc
	79
	

	 
	 
	 
	 

	27.
	Assignment And Participation Provisions And Certain Administrative Matters
	79
	

	 
	 
	 
	 

	 
	(a)
	Assignment and Participation Provisions
	79
	

	 
	(b)
	Certain Administrative Matters
	83
	

	 
	(c)
	Certain Lender Representations
	84
	

- v -

LOAN AGREEMENT
THIS LOAN AGREEMENT (this “Agreement”) is made as of June 23, 2011, by and among (i) KBS DEBT HOLDINGS III, LLC, a Delaware limited liability company (hereinafter sometimes referred to as "Agent" and sometimes as "KBS"), as a Lender and in its capacity as Agent for itself and for each of the other Lenders who are now or who hereafter become parties to this Agreement, (ii) each of the Lenders, including Agent, named on the execution pages hereof and such other Lenders as may from time to time become a party to this Agreement pursuant to the terms hereof, and (iii) JP ABERDEEN PARTNERS, LP, a Delaware limited partnership (“Borrower”).
R E C I T A L S:
This Agreement is made with reference to the following facts:
(i)    Borrower is the owner in fee simple of the real property (the “Real Property”) described on Exhibit A attached hereto and made a part hereof.  The Real Property is improved by that certain nine (9) story commercial building and all other improvements, fixtures, machinery, furnishings, equipment and other property of any kind installed or used at the Real Property (collectively, the “Improvements”).  The Real Property and the Improvements are sometimes collectively referred herein as the “Property”. 
(ii)    The Property is currently being operated as an office building and is leased to certain tenants pursuant to written leases.
(iii)    Borrower has applied to Agent for a loan (the “Loan”) in the amount of Twenty Three Million Nine Hundred Thousand and No/100 Dollars ($23,900,000.00) (the “Loan Amount”), which Loan is to be advanced by Lenders as hereinafter provided and is to be evidenced by the Note (defined below).  The Note is to be secured by the Mortgage and the other collateral referred to in Section 5 below. 
(iv)    Borrower desires to borrow the Loan Amount from Lenders, the proceeds of which are to be used by Borrower to, among other things, pay the costs and expenses, if any, referred to in Section 3(b) below.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1.Recitals.  The recitals set forth above are true and correct and are incorporated herein by reference.
2.Definitions.  The following terms shall have the meanings set forth next to them:

1

“Accounts”:  shall mean the Restricted Account (as defined in the Cash Management Agreement), the Clearing Account (as defined in the Clearing Account Agreement), the Tax and Insurance Reserve Account, and the Tenant Capital Reserve Account (as each are defined in the Pledge and Assignment of Reserve Accounts) and any other accounts required to be established under this Agreement or the Loan Documents.
“Account Agreements”: shall mean the Cash Management Agreement, Clearing Account Agreement, the Pledge and Assignment of Reserve Accounts, the Deposit Account Control Agreements, and any other Loan Document which creates, grants a security interest in or purports to govern the Accounts.
“Actual Maturity”:  shall mean the date upon which the entire unpaid indebtedness evidenced by the Note becomes due and payable in accordance with the terms of the Note, this Agreement or the other Loan Documents (whether at Stated Maturity, upon acceleration following an Event of Default, voluntary prepayment or otherwise).
“Advance” or “Advances”:  shall mean any disbursement of the proceeds of the Loan by Agent or Lenders pursuant to the terms of this Agreement.
“Affiliate”:  shall mean with respect to a specified person or entity, any individual, partnership, corporation, limited liability company, trust, unincorporated organization, association or other entity which, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such person or entity, including, without limitation, any general or limited partnership in which such person or entity is a partner.
“Agent” means KBS or any other Person which is at the time in question serving as the agent under the terms of Section 25 hereof and the other Loan Documents.
“Aggregate Commitment”: shall mean the aggregate Commitment of the Lenders.
“Annual Budget”:  shall have the meaning ascribed to it in Section 11(d).
“Bankruptcy Code”:  shall mean 11 U.S.C. Section 101, et. seq.
“Bankruptcy Proceedings”:  shall have the meaning set forth in Section 16(a)(ix) hereof.
“Base Interest”:  shall have the meaning ascribed to it in the Note.
“Benefit Plan Investor”:  shall mean a benefit plan investor as defined in paragraph (f)(2) of the Plan Asset Regulation.
“Borrower's Certificate”:  shall mean that certain Borrower's Certificate, dated as of even date hereof, executed by Borrower for the benefit of Agent and the Lenders.
“Borrower's Knowledge”:  shall mean the actual knowledge of the Borrower.
“Borrower's Recourse Liabilities”: shall have the meaning ascribed to it in Section 21(a).

2

“Business Day”: shall mean any day other than a Saturday, Sunday or any day on which commercial banks in New York, New York, are authorized or required to close.
“Cash Management Agreement”:  shall mean that certain Cash Management Agreement, dated as of even date hereof by and among Borrower and Agent, and joined by Manager.
“Clearing Account”:  shall have the meaning ascribed to it in the Clearing Account Agreement. 
“Clearing Account Agreement”:  shall mean that certain Clearing Account Agreement, dated as of even date hereof by and among Borrower and Agent.
“Closing Date”:  shall mean shall mean the date of this Agreement.
“Code”:  shall mean the Internal Revenue Code of 1986, as amended from time to time, or the corresponding provisions of any successor Federal Income Tax Law.  Any reference to a particular provision of the Code shall include any amendment of such provision or the corresponding provision of any successor Federal Income Tax Law.
“Commissions”:  shall have the meaning given to it in Schedule 2.
“Commitment”:  shall have the meaning given to it in Section 3(a).
“Commitment Percentage”: Subject to Section 25(c)(iii), with respect to each Lender, the percentage determined by the dividing (a) the Aggregate Commitment of such Lender, by (b) the Aggregate Commitment (or, if the Aggregate Commitment has terminated, the percentage determined by dividing (a) the outstanding and unpaid Advances of such Lender, by (b) all outstanding and unpaid Advances).
“Condemnation Awards”:  shall have the meaning ascribed to it in Section 9(b).
“Control”:  as such term is used with respect to any person or entity, including the correlative meanings of the terms “controlled by” and “under common control with”, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such person or entity, whether through the ownership of voting securities, by contract or otherwise.
“Default Interest Rate”:  shall have the meaning ascribed to it in the Note.
“Defaulting Lender”:  shall have the ascribed to it in Section 25(c).
“Deposit Account Control Agreements”: shall collectively mean (i) that certain Deposit Account Control Agreement (Access Restricted After Notice), and (ii) that certain Deposit Account Control Agreement (Access Restricted Immediately), both of even date herewith by and among Agent, Borrower and Depository Bank.

3

“Depository Bank”:  shall mean the financial institution selected by Borrower and approved by Agent to hold the Accounts as required under the Account Agreements approved by Agent.
“Disbursement Schedule”:    shall mean the Disbursement Schedule attached hereto as Exhibit D and made a part hereof.
“Disclosure Document”: shall have the meaning ascribed to it in Section 27(b).
“Encumbrance”:  shall mean any mortgage, deed of trust, lien (statutory or otherwise) pledge, encumbrance, hypothecation or other grant of security interest, whether direct or indirect, voluntary or involuntary or by operation of law, and whether or not consented to by Agent and/or the Lenders of or in (i) all or any portion of, or interest in, the Property, or (ii) any legal or beneficial ownership interest in Borrower or the Sole Member.
“Environmental Indemnity”:  shall mean that certain Unsecured Environmental Indemnity Agreement of even date herewith, on Agent's form, executed by Borrower and the Guarantors containing representations, warranties, covenants and indemnities in favor of Agent, as agent for the Lenders with respect to Hazardous Substances.
“Event of Default”:  shall have the meaning ascribed to it in Section 16.
“Exchange Act”: shall have the meaning ascribed to it in Section 27(b).
“Expenses”:  shall mean, for the Property and each month, all costs and expenses, calculated on a cash basis, required to be paid during such month by or on behalf of the related Borrower in connection with the ownership and operation of the Property in accordance with the Annual Budget.
“Fax”:  shall have the meaning ascribed to it in Section 20(a).
“Forbearance Termination Event”: shall have the meaning given to it in Section 21(b) below.
“Full Replacement Cost”:  shall have the meaning ascribed to it in Section 8(a)(i).
“GAAP”: shall mean the generally accepted accounting principles in the United States of America as of the date of the applicable financial report, consistently applied. 
“Governing Jurisdiction”:  shall mean the State of Texas.
“Government Lists”:  shall have the meaning ascribed to it in Section 12(k).
“Governmental Authority”:  shall mean board, commission, department or body or any municipal or county, state or Federal government unit, or any subdivision of any of them.
“Gross Receipts”:  shall mean all revenue derived from the ownership and operation of the Property from whatever source, including, but not limited to, rents and license fees, but 

4

excluding sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any Governmental Authority, non-recurring revenues as determined or approved by Agent, payments received by Borrower under any interest rate protection agreement pertaining to the Loan, security deposits (except to the extent such security deposits are properly utilized to offset a loss of rent), refunds and uncollectible accounts, proceeds of casualty insurance (other than business interruption or other loss of income insurance related to business interruption or loss of income for the period in question), Condemnation Awards.
“Guarantor” or “Guarantors”:  shall mean Mark Jordan, an individual.  To the extent that at any time there is only one Guarantor, all references in this Agreement and the other Loan Documents to “Guarantors” shall be deemed to refer to the single Guarantor.
“Guaranty”:  shall mean that certain Guaranty of Non-Recourse Carveouts, dated as of even date herewith, from the Guarantor to Agent for the benefit of itself and the other Lenders, as the same may be amended, modified or restated from time to time.
“Hazardous Substances”:  shall have the meaning ascribed to it in the Environmental Indemnity.
“Holdback Funds”:  shall have the meaning ascribed to it in Schedule 2 attached hereto.  The Holdback Funds are not being advanced as part of the Initial Disbursement, but shall be advanced if at all, pursuant to the provisions of Schedule 2 attached hereto.
“Improvements”: shall have the meaning ascribed to it in the Recitals above.
“Indebtedness”:  shall mean the principal of, interest on, and any other amounts due at any time under, this Agreement, the Note, the Mortgage or any other Loan Document, including prepayment premiums, late charges, default interest, and advances to protect the lien and security interest of the Mortgage thereunder.
“Indemnified Parties”:  shall have the meaning ascribed to it in Section 12(c).
“Initial Disbursement”: shall have the meaning ascribed to it in Section 3(b)(i).
“Insolvency Laws”: shall mean the Bankruptcy Code and any and all present and future federal, state and local laws, ordinances, regulations, rules and any other requirements of any Governmental Authority relating to the bankruptcy, insolvency, appointment of receiver, reorganization, arrangement, readjustment of debt, dissolution or liquidation of, for or relating to, any Person, each as hereafter amended from time to time and the present and future rules, regulations and guidance documents promulgated under any of the foregoing.
“Insurance Premiums”: shall mean the insurance premiums payable by Borrower with respect to the insurance policies that Borrower is required to maintain pursuant to Section 8 of this Agreement (the “Policies”).
“Issuer”: shall have the meaning ascribed to it in Section 27(c).
“Law” or “Laws”:  shall have the meaning ascribed to it in Section 15(l).

5

“Lease” or “Leases”:  shall mean all leases, subleases, licenses, occupancy agreements, concessions or other arrangements, whether written or oral, whether now existing or entered into at any time hereafter in accordance with the terms of Section 12(d) hereof, whereby any person agrees to pay money or any other consideration for the use, possession or occupancy of, or any estate in, all or any part of the Property, each as the same may be amended, modified and restated from time to time in accordance with Section 12(d) hereof.
“Lender”:  shall mean KBS and any other Person that is a signatory hereto under the caption "Lenders" on the signature pages hereto and any other Person which hereafter becomes a party hereto as a "Lender" pursuant to the terms of Section 25(a) each in their individual capacity, and Lenders means KBS and each such other Person.
“Liabilities”: shall have the meaning ascribed to it in Section 27(c).
“Loan”:  shall have the meaning ascribed to it in the Recitals above.
“Loan Amount”: shall have the meaning ascribed to it in the Recitals above.
“Loan Documents”: shall mean this Agreement, the Note, the Mortgage, the other documents listed in Section 6(a) below, and all other documents evidencing, securing or pertaining to the Loan, each as the same may hereafter be amended, modified and restated from time to time.
“Loan Fee”:  shall mean the non-refundable fee described in Section 4(c) below.
“Loan Year”:  shall mean each full calendar year during the Term of this Loan plus the partial calendar years at the commencement and termination of such Term.
“Losses”:  shall have the meaning ascribed to it in Section 21(a).
“Major Lease”:  shall mean any Lease that does not satisfy all of the requirements to be a non-Major Lease as described in Exhibit E attached hereto
“Management Agreement”: shall mean that certain Property Management Agreement dated as of June 23, 2011, entered into by and between Borrower and Manager, pursuant to which Manager has agreed to manage the operations of the Property, as the same may be amended, modified or restated from time to time, or any other property management agreement approved by Agent pursuant to Section 12(f) hereof.
“Manager”:  shall mean Sooner National Property Management, L.P. or any other property manager approved by Agent pursuant to Section 12(f) hereof.
“Material Adverse Effect”: shall mean the occurrence or existence of a condition or event which would have a material adverse effect on (i) the business, profits, operations or financial condition of Borrower, (ii) the ability of Borrower to pay any amounts under the Loan Documents as they become due or (iii) the value of the Property.

6

“Mortgage”:  shall mean that certain Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing of even date herewith, on Agent's form, executed by Borrower and encumbering the Property.
“Note”:  any individual promissory note of Borrower payable to the order of Agent, as agent for Lenders, or to a Lender, as applicable, and evidencing all or a portion of the Loan, and Notes means all of the Notes, collectively; together with any renewals, extensions or modifications thereof and substitutions therefor.  To the extent that at any time there is only one Note in effect, all references in this Agreement and the other Loan Documents to the "Notes" shall be deemed to refer to such single Note.
“Note Rate”:  shall have the meaning ascribed to it in the Note.
“OFAC”:  shall have the meaning ascribed to it in Section 12(k).
“Operating Holdback Funds”:  shall have the meaning given to it in Schedule 2.
“Patriot Act”:  shall have the meaning ascribed to it in Section 12(k). 
“Patriot Act Offense”:  shall have the meaning ascribed to it in Section 12(k).
“Payment Date”: shall mean the first of every calendar month (or if any such date is not a Business Day, the first Business Day immediately following such date).
“Permitted Exceptions”: shall have the meaning ascribed to it in the Mortgage.
“Permits”:  shall have the meaning ascribed to it in Section 6(v).
“Person”:  shall mean any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.
“Plan Asset Regulation”:  shall mean the regulation published by the Department of Labor at 29 C.F.R. § 2510.3-101.
“Pledge and Assignment of Reserve Accounts”: shall mean that certain Pledge and Assignment of Reserve Accounts, dated as of even date herewith, by and among Borrower, and Agent, as agent for the Lenders.
“PML”: shall have the meaning ascribed to it in Section 8(a)(vi).
“Property”:  shall mean the Real Property and the Improvements.
“Provided Information”:  shall have the meaning ascribed to it in Section 27(a).
“Rating Agency”: shall mean each of Standard & Poor's, a division of The McGraw-Hill Companies, Inc. (“S&P”), Moody's Investors Service, Inc. (“Moody's”), and Fitch, Inc., a division of Fitch Ratings Ltd. (“Fitch”) or any other nationally-recognized statistical rating 

7

organization to the extent any of the foregoing have been engaged by Agent or its designee in connection with or in anticipation of any Secondary Market Transaction.
“Real Property”: shall have the meaning ascribed to it in the Recitals above.
“Registration Statement”: shall have the meaning ascribed to it in Section 27(c).
“Restricted Account”:  shall have the meaning ascribed to it in the Cash Management Agreement.
“Request for Advance”:  shall have the meaning ascribed to it in Schedule 2.
“Required Repairs”:  shall have the meaning ascribed to it in Section 3(e).
“RICO”:  shall have the meaning ascribed to it in Section 15(g).
“RICO Related Laws”:  shall have the meaning ascribed to it in Section 15(g).
“Sale”:  shall mean (i) any sale, conveyance, transfer, lease (of all or a substantial part of the Property other than Leases and subleases made to tenants in compliance with Section 12(d) below) or assignment, or the entry into any agreement to sell, convey, transfer, lease (of all or a substantial part of the Property other than Leases and subleases made to tenants in compliance with Section 12(d) below) or assign, whether by law or otherwise, of, on, in or affecting (x) all or part of the Property (including any legal or beneficial direct or indirect interest therein but excluding Leases made to tenants of the Property in Borrower's ordinary course of business and otherwise in compliance with Section 12(d) hereof), (y) any direct or indirect interest in Borrower (including any profit interest), or (z) any direct or indirect interest in Sole Member or (ii) any change of Control of Borrower or Sole Member.
For purposes hereof:
(i)    a Sale of an interest in Borrower or Sole Member shall be deemed to include:
(A)    if Borrower or Sole Member or a controlling shareholder of Borrower or Sole Member is a corporation, the voluntary or involuntary sale, conveyance or transfer of such corporation's stock (or the stock of any corporation directly or indirectly controlling such corporation by operation of law or otherwise) or the creation or issuance of new stock in one or a series of transactions by which an aggregate of more than ten percent (10%) of such corporation's stock shall be vested in a party or parties who are not now stockholders or any change in the Control of such corporation; and
(B)    if Borrower, Sole Member or controlling shareholder of Borrower or Sole Member is a limited or general partnership, joint venture or limited liability company, the change, removal, resignation or addition of a general partner, managing partner, limited partner, joint venturer or member or the transfer of the partnership interest of any general partner, managing partner or limited partner or the transfer of the interest of any joint venturer or member; and

8

(ii)    a change of Control of Borrower or Sole Member shall be deemed to have occurred if:
(A)    there is any change in the identity of any individual or entity or any group of individuals or entities who have the right, by virtue of any partnership agreement, articles of incorporation, by-laws, articles of organization, operating agreement or any other agreement, with or without taking any formative action, to cause Borrower (or Sole Member) to take some action or to prevent, restrict or impede Borrower (or Sole Member) from taking some action which, in either case, Borrower (or Sole Member) could take or could refrain from taking were it not for the rights of such individuals, or
(B)    the individual or entity or group of individuals or entities that Control Borrower (and Sole Member) as described in clause (A) ever cease to own at least fifty-one percent (51%) of all equity interests (direct or indirect) in Borrower (and Sole Member).
Provided, however, that, notwithstanding the provisions hereof, if the Borrower or Sole Member or controlling partner or member of Borrower or Sole Member is a limited partnership or limited liability company, the transfer of partnership interests in Borrower or membership interests in the Sole Member to family members or a trust upon the death of the current holder of such interest shall not be deemed a Sale.
“Secondary Market Transaction”:  shall have the meaning ascribed to it in Section 27 (a).
“Securities”:  shall have the meaning ascribed to it in Section 27(a).
“Securities Act”: shall have the meaning ascribed to it in Section 27(b).
“SEL”: shall have the meaning ascribed to it in Section 8(a)(vi).
“Servicer” shall mean any servicer selected by Agent to service the Loan, including any “master servicer” or “special servicer” appointed under the terms of any pooling and servicing agreement or similar agreement entered into as a result of a Secondary Market Transaction.
“Sole Member”: shall mean JP Aberdeen LLC, a Delaware limited liability company, the general partner of Borrower.
“Special Purpose Bankruptcy Remote Entity”:  shall have the meaning ascribed to it in Section 23.
“Stated Maturity”:  shall mean July 1, 2016.
“Survey”:  shall have the meaning ascribed to it in Section 6(h).
“Tax” or “Taxes”: shall mean any and all present or future taxes, levies, imposts, duties, deductions, filings, charges, withholdings or other fees imposed by any Governmental Authority.

9

“Tenant Capital Reserve Account”:  shall have the meaning ascribed to it in the Pledge and Assignment of Reserve Accounts.
“Tenant Improvements”:  shall have the meaning given to it in Schedule 2.
“Term”:  shall mean the period beginning on the date of the Notes and ending at Actual Maturity, at which time Borrower must pay the outstanding principal balance of the Loan and all accrued but unpaid interest thereon (including all Base Interest and all other amounts due under the Notes and the other Loan Documents).
“Terrorism Laws”:  shall have the meaning ascribed to it in Section 15(l).
“Third Party Agreement”:  shall have the meaning ascribed to it in Section 1.14(a) of the Mortgage.
“TI/Commission Holdback Funds”:  shall have the meaning given to it in Schedule 2.
“Title Insurer”:  shall mean Chicago Title Insurance Company or another nationally recognized, creditworthy title insurance company licensed to do business in the state where the Real Property is located and otherwise acceptable to Agent.
“Title Policy”:  shall have the meaning ascribed to it in Section 7(a)(i).
“Underwriter”: shall have the meaning ascribed to it in Section 27(c).
“Underwriter Group”: shall have the meaning ascribed to it in Section 27(c).
3.The Loan; Disbursement of Loan; Establishment of Accounts.
(a)Loan.  On the basis of the covenants, agreements and representations of Borrower contained herein and subject to the terms and conditions hereinafter set forth, each Lender severally agrees to lend to Borrower and Borrower shall borrow from each Lender such Lender's Pro Rata Share of the Loan (each Lender's “Commitment”) the proceeds of which are to be disbursed by the Lenders in accordance with the provisions of Section 3(b) hereof.
(b)Loan Disbursements.  Upon satisfaction of all of the conditions set forth in Section 6 hereof, Borrower hereby directs and authorizes each Lender to disburse its portion of the Loan in the following order of priority, as follows:
(i)Initial Disbursement.  Upon recordation of the Mortgage, provided that the Title Insurer has issued or irrevocably committed in writing to issue to Agent, as agent for the Lenders the Title Policy (defined below), and subject to the satisfaction of the conditions set forth in Section 6 hereof, Lenders shall disburse to or for the account of Borrower, or to the persons, firms or corporation entitled thereto the amounts set forth on the Disbursement Schedule (the “Initial Disbursement”), including the amounts on the Disbursement Schedule, necessary to pay all or portions of:

10

(1)Loan Fee.  A sum sufficient to pay in full the unpaid portion of the Loan Fee described in Section 4(c) hereof shall be disbursed to Agent or as Agent may so direct.
(2)Lenders' Costs and Expenses.  A sum sufficient to pay in full all of the costs, charges and expenses incurred by Agent and payable to Agent hereunder, including without limitation, cost and expenses incurred by Agent in connection with (1) the negotiation, execution and recordation of the Loan Documents, (2) the delivery, execution and preparation of the items required to be delivered pursuant to Section 6 hereof, (3) the hiring and retention of any appraiser, engineer or other consultant, including without limitation, performing due diligence or analysis for Agent, and (4) the making of the Loan and the transactions described in the Loan Documents.
(3)Borrower's Costs and Expenses. A sum sufficient to pay in full all of the costs, charges and expenses incurred by Borrower in connection with title charges and premiums, tax and lien service charges, recording fees, escrow fees, recording and transfer taxes, insurance premiums, loan brokerage commissions, attorneys' fees and any other closing costs and third-party costs as and to the extent reflected in the Disbursement Schedule.
(4)Accounts.  Such sums as may be required to fully fund the Accounts pursuant to the terms of the Account Agreements.
(5)Purchase Price.  The balance to the purchase price of the Property, through the escrow established with the Title Insurer.
(ii)Future Advances.  The balance of the Loan proceeds that are not being disbursed in the Initial Disbursement shall be advanced to Borrower by Lender from time to time upon Agent's prior written approval thereof and Borrower's satisfaction of each of the terms and conditions contained herein, including without limitation, Schedule 2 attached hereto.  Subject to and upon the terms and conditions set forth herein, Lenders agree to make Advances of the Loan to Borrower from time to time in accordance with the provisions hereof, and Borrower shall accept such Advances in an aggregate amount up to the Loan Amount.  
(c)    No Reborrowings.  Any amount borrowed and repaid hereunder in respect of the Loan may not be reborrowed.
(d)    Accounts.
(i)Opening of Accounts.  Concurrently with the closing of the Loan and as a condition precedent thereto, Borrower shall (1) open the Accounts in accordance with the Account Agreements and execute such documents as are necessary to establish the same, and (2) deposit into the Accounts the funds required to be deposited therein pursuant to the Account Agreements.
(ii)Withdrawals from Accounts.  Borrower shall not have the right to make any withdrawals, or authorize any disbursement from, any of the Accounts except as expressly set forth in the Account Agreements.

11

(iii)Security Interest.  In accordance with the terms of the Account Agreements, Borrower shall irrevocably and unconditionally grant to Agent, as agent for the Lenders, as security for the Loan, all of Borrower's right, title and interest in and to the Accounts, the funds deposited therein and in and to all investment income earned on the funds in the Accounts or proceeds thereof.
(e)    Required Repairs.  Borrower shall perform the repairs at the Property set forth on Exhibit B attached hereto (such repairs hereinafter referred to as the “Required Repairs” and shall complete the Required Repairs on or before the respective deadline for each repair as set forth in Exhibit B.
4.Interest Payments; Default Interest Rate; Loan Fee; Prepayment Fee; Stated Maturity.
(a)Interest.  Base Interest at its stated rate or at its rate as adjusted by the Default Interest Rate, as applicable, shall be payable in the amounts and at the times set forth in the Note.
(b)Default Interest Rate.  The Default Interest Rate shall be applied and paid in accordance with the terms set forth in the Note.
(c)Loan Fee.  Concurrently with the closing of the Loan, and as a condition precedent thereto, Agent shall disburse to itself or as it may so direct from the Loan funds, a non-refundable Loan Fee in the amount of Two Hundred Thirty Nine Thousand and No/100 Dollars ($239,000.00), which shall be deemed to have been earned in full, and is non-refundable, upon the disbursement of all or any portion of the Loan.  The parties agree that the Loan Fee is consideration for the Lenders' agreement to enter into the Loan, and that such fee constitutes compensation to Lenders for the use of Lenders' funds and is not in exchange for services rendered to Borrower.  The Loan Fee shall be allocated among Agent and the Lenders pursuant to their separate agreement.
(d)Prepayment Fee.  All amounts due and owing under the Note from time to time may only be prepaid in accordance with the terms of the Note.
(e)Stated Maturity.  The outstanding principal balance of the Note and all accrued and unpaid interest thereon shall become due and payable at the Stated Maturity, unless the same is otherwise accelerated in accordance with the provisions hereof or the other Loan Documents.
5.Security for Loan; Guaranty.
(a)Security for Loan.  The Loan shall be secured and/or supported by, among other things, the Mortgage, the Cash Management Agreement, the Clearing Account Agreement, the Pledge and Assignment of Reserve Accounts, the Environmental Indemnity, all of the Accounts, the Guaranty, and the other Loan Documents.
(b)Guaranty.  The Loan shall be guaranteed by the Guarantor executing and delivering to Agent, as agent for the Lenders, the Guaranty on Agent's form.

12

6.Conditions Precedent to Closing of the Loan.  Prior to the recordation of the Mortgage and the closing of the Loan (unless otherwise provided), all of the following conditions shall have been satisfied and/or Borrower shall have furnished to Agent the following, all in form and substance satisfactory to Agent, which consent may be given or withheld in Agent's sole and absolute discretion:
(a)Loan Documents.  Duly executed and, where appropriate, notarized originals of the Loan Documents, each on Agent's form and otherwise satisfactory to Agent and the Lenders in their sole and absolute discretion, including the following:
(i)this Agreement;
(ii)the Note;
(iii)the Mortgage;
(iv)the Guaranty;
(v)the Environmental Indemnity;
(vi)the Clearing Account Agreement;
(vii)the Cash Management Agreement;
(viii)the Consent and Subordination of Property Manager;
(ix)Pledge and Assignment of Reserve Accounts;
(x)the Deposit Account Control Agreements
(xi)UCC Financing Statements, both state and local, as appropriate, with respect to items which are, or may be, fixtures, personal property or other collateral including the collateral as described in:
(1)the Mortgage;
(2)the Pledge and Assignment of Reserve Accounts;
(3)the Cash Management Agreement;
(4)the Clearing Account Agreement; and
(xii)Such other agreements by Borrower or the Sole Member as may be required by other provisions of this Agreement or as Agent may reasonably require in order to evidence or secure the Loan, including without limitation, an interest rate protection agreement.

13

(b)Third Party Agreements:
(i)Copies.  Executed copies, certified by the Borrower as being true, correct and complete, of the Management Agreement, and the other Third Party Agreements;
(ii)Estoppel Certificate.  If requested by Agent, an estoppel certificate from the parties to the Management Agreement and the other Third Party Agreements confirming the absence of any default thereunder and such other matters as Agent may require.
(iii)Management Subordination Agreement.  The Borrower shall cause the Manager to enter into a subordination agreement with the Agent, as agent for the Lenders, on Agent's standard form.
(iv)Assignments.  If requested by Agent, separate collateral assignments of Borrower's interest in the Third Party Agreements, on Agent's standard form.
(c)Financial Statements.  With respect to the Borrower, the Property and the Sole Member, audited financial statements and other financial information, in the form and containing the detail and supporting information required pursuant to Section 11 hereof.  The financial statements for the Sole Member and the Borrower shall be executed by the Sole Member and the Borrower, as applicable.  The financial statements for the Property shall be executed by the Borrower.
(d)Borrower's Equity.  Borrower shall have delivered evidence acceptable to Agent that Borrower has invested no less than Eleven Million and No/100 Dollars ($11,000,000.00) of its own funds (which may include preferred equity from its Affiliates) into the Property.
(e)Insurance Policies.  Agent must receive certified copies of all the required insurance policies under Section 8 hereof (or certificates of insurance with respect to such insurance) at least fifteen (15) Business Days prior to Closing.  Agent may require certified copies, detailed binders, endorsements and/or certificates of insurance as evidence of continuation of coverage for subsequent renewals.
(f)Leases:
(i)Copies.  Copies, certified by Borrower as being true, correct and complete of (a) the form lease for the Property, previously approved by Agent and (b) all Leases covering the Property;
(ii)Rent Roll.  A current rent roll for the Property listing each tenant leasing space in the Property, the rental rate (including the amount of any security deposits, the commencement date and termination date of each Lease in effect, a list of those tenants whose rent is delinquent, and such other information as Agent may reasonably request from time to time.
(iii)Estoppels.  Unless waived by Agent with respect to a particular tenant, estoppel certificates on Agent's form duly executed and acknowledged by the tenants 

14

under all of the Leases.  Borrower shall use commercially reasonable and diligent efforts to obtain estoppel certificates on Agent's form from all tenants at the Property.
(g)Title Insurance Policy.  The Title Policy referred to in Section 7(a) hereof.
(h)ALTA Survey.  A current ALTA survey of the Property (the “Survey”) prepared by a surveyor or engineer licensed by the appropriate governmental authorities of the jurisdiction in which the Property is located and otherwise acceptable to Agent.  The Survey shall be satisfactory to Agent and to the Title Insurer and shall be certified to Agent Lenders, and the Title Insurer as (a) having been prepared in accordance with the “Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys,” jointly established and adopted by ALTA and NSPS in 2005, (b) containing Table A Items 1, 2, 3, 4, 6, 7(a), 7(b)(1)-(2), 7(c), 8, 9, 10, 11(a), 13, 14, 15 and 16 and (c) meeting the strictest accuracy requirements of an ALTA Survey.
(i)Zoning; Conditional Use Permits and Certificates of Occupancy.  A copy of the applicable zoning ordinance and zoning map covering the Property, any conditional use permit(s) affecting the Property and final certificates of occupancy for the Property and such evidence as Agent may require (including the written certification of Borrower's engineer or any other person satisfactory to Agent) that the zoning of the Property is satisfactory and compatible with the Improvements and that the Property can be operated and maintained in accordance with all zoning laws, other applicable laws and regulations, conditional use permits and other agreements affecting the Property.
(j)Flood Plain Certification.  To the extent not provided on the Survey, such evidence as Agent may require (including the written certification of Borrower's engineer or any other person satisfactory to Agent) that the Property is not located within any flood plain or, if the Property is located within a flood plain, Borrower has obtained and is maintaining in full force and effect a policy or policies of flood insurance pursuant to Section 8 hereof.
(k)Appraisal.  An appraisal of the Property in a form and substance satisfactory to Agent (including the assumptions on which it is based), addressed to Agent, as agent for the Lenders and prepared by a licensed appraiser acceptable to Agent.
(l)Engineering Report.  An engineering report covering the construction, structural integrity and functional utility of the Property and the Improvements as well as their compliance with the Americans With Disabilities Act and all other applicable laws, in form and substance satisfactory to Agent and certified to Agent, as agent for the Lenders.
(m)Environmental Report.  An environmental report covering the Property, certified to Agent, as agent for the Lenders and in form and substance satisfactory to Agent, prepared by a professional acceptable to Agent.
(n)Borrower Authority.  With respect to Borrower:
(i)    Good Standing.  A certificate issued by the appropriate agency of the state in which Borrower was formed dated not more than thirty (30) days prior to the date of this Agreement, certifying that such company is a company duly formed and in good standing under the laws of such state, and if such state is not the Governing Jurisdiction, a certificate

15

issued by the appropriate agency of the Governing Jurisdiction dated not more than thirty (30) days prior to the date of this Agreement certifying that such company is duly authorized to transact business in the Governing Jurisdiction; 
(ii)Partnership Agreement.  A certified copy of Borrower's partnership agreement and any amendments thereto certified by the general partner to be true, correct and complete, which agreement shall comply with the provisions of Section 23 below;
(iii)Certificate of Formation.  A certified copy of Borrower's certificate of formation, certified by the Secretary of State of the state of formation as well as the general partner to be true, correct and complete, which shall conform to the requirements of Section 23 below;
(iv)Resolutions.  A certified copy of resolutions of Borrower's general partner.  Such resolutions shall be duly executed by the general partner authorizing such company's execution of the Loan Documents to be executed by such company and the consummation of the transactions contemplated thereby; and
(v)Incumbency.  A certificate of incumbency, duly executed by a duly authorized officer of Borrower, certifying the identity, incumbency and specimen signature(s) of the officer of Borrower who is executing the Loan Documents on behalf of Borrower.
(o)Sole Member Authority.  With respect to Sole Member:
(i)Good Standing.  A certificate issued by the appropriate agency of the state in which Sole Member was formed dated not more than thirty (30) days prior to the date of this Agreement, certifying that such company is a company duly formed and in good standing under the laws of such state, and if such state is not the Governing Jurisdiction, a certificate issued by the appropriate agency of the Governing Jurisdiction dated not more than thirty (30) days prior to the date of this Agreement certifying that such company is duly authorized to transact business in the Governing Jurisdiction; 
(ii)Operating Agreement.  A certified copy of Sole Member's operating agreement and any amendments thereto certified by the managing member to be true, correct and complete, which agreement shall comply with the provisions of Section 23 below;
(iii)Articles of Organization.  A certified copy of Sole Member's articles of organization, certified by the Secretary of State of the state of formation as well as the managing member to be true, correct and complete, which shall conform to the requirements of Section 23 below;
(iv)Resolutions.  A certified copy of resolutions of Sole Member's members, if such company is member-managed or of such company's board of managers, if such company is manager-managed.  Such resolutions shall be duly executed by the President or Vice President of such company, authorizing such company's execution of the Loan Documents to be executed by such company and the consummation of the transactions contemplated thereby; and

16

(v)Incumbency.  A certificate of incumbency, duly executed by a duly authorized officer of Sole Member, certifying the identity, incumbency and specimen signature(s) of the member(s) of Sole Member who is executing the Loan Documents on behalf of Sole Member.
(p)Legal Opinion.  A written legal opinion from Borrower's, Guarantor's and Sole Members' counsel (which counsel must be acceptable to Agent) in form acceptable to Agent and its attorneys, opining as to such matters as Agent may reasonably require, including an opinion regarding:  (1) due organization and valid existence; (2) authority; (3) enforceability of the Loan Documents (subject to the effects of applicable Insolvency Laws and equitable limitations on the enforcement of creditors' rights generally); (4) lack of substantive consolidation of Borrower with other entities; (5) the lack of a partnership relationship between Borrower and Agent and Lenders; (6) choice of law (as applicable); (7) usury; (8) doing business; (9) franchise and income taxation; (10) perfection of security interest in the Accounts (and permitted investments) as well as the collateral pledged under the Mortgage; and (11) such other matters as may be reasonably requested by Agent.  In addition, if Borrower's counsel is not authorized to practice law in the Governing Jurisdiction, a written legal opinion from Borrower's counsel in such Governing Jurisdiction in form and substance acceptable to Agent and its attorneys, opining as to the enforceability of the Loan Documents, the perfection of the security interests described above and such other matters as Agent may reasonably require.
(q)UCC and Lien Searches.  Full uniform commercial code, federal and state tax lien, bankruptcy, judgment and pending litigation searches, performed by a search company and in jurisdictions satisfactory to Agent, with respect to the Borrower and the Sole Member and disclosing no matters objectionable to Agent.
(r)Utilities.  Evidence that all sewer, water, electrical, telephone and any other utility services are available at the Property in adequate supply for the use and operation of the Property.  This evidence may include letters from the applicable utility providers.
(s)Environmental Disclosure.  In accordance with all applicable Laws, including the laws of the Governing Jurisdiction, Borrower shall provide a true, correct and complete copy of any disclosure document or other instrument required by any such Law relating to environmental matters, Hazardous Substances or otherwise required in connection with the making of the Loan or the recording of the Mortgage.
(t)Conditional Use Permits.  Evidence satisfactory to Agent that all conditions under any conditional use permit relating to the Improvements have been satisfied.
(u)Purchase Documents.  Copies of all documents relating to Borrower's acquisition of the Property.
(v)Additional Matters.  The Borrower shall have delivered to Agent such other or additional documents, instruments, information or items as the Agent may request prior to the disbursing of the Loan.
7.Title Insurance .

17

(a)Title Insurance.
(i)Concurrently with the closing of the Loan, Borrower shall deliver or cause to be delivered to Agent a T-2 Loan Policy of Title Insurance (unmodified State of Texas Form) with extended coverage (the “Title Policy”)  issued by the Title Insurer, with a liability limit equal to not less than the Loan Amount, and with coverage and in form satisfactory to Agent, insuring Agent's interest under the Mortgage as a valid first lien on the Property, together with such reinsurance (with direct access to the reinsurers thereunder) or coinsurance agreements and such endorsements to the Title Policy as Agent may require.  The Title Policy shall not be subject to any exceptions of any kind whatsoever other than the matters approved by Agent in writing.  Any easements benefiting the Real Property shall be additional insured parcels under the Title Policy.  Moreover, to the extent available in the Governing Jurisdiction, the Title Policy shall contain the following endorsements, each in form and substance satisfactory to Agent:  (i) Restrictions, Encroachments, Mineral Endorsement No. T-19 (ii) Access Endorsement No. T-23, (iii) survey, (iv) Environmental lien endorsement, and (v) such other endorsements deemed necessary by Agent.
(ii)Continuation and Date-Down Endorsements.  After recordation of the Mortgage and as a condition precedent to each Advance under Schedule 2 hereof, Borrower shall, at its own cost and expense, deliver or cause to be delivered to Agent from time to time such continuation and date-down endorsements to be attached to the Title Policy, in form and substance satisfactory to Agent, as Agent deems necessary to insure the lien priority of the Mortgage as set forth in Section 7(a) hereof, as of the date of and including the amount covered by each such Advance, and Borrower agrees to furnish to the Title Insurer such surveys and other information as are required by Agent or the Title Insurer to enable the Title Insurer to issue such endorsements to Agent.
8.Insurance.
(a)Insurance Requirements.  During the term of the Loan, Borrower shall, at its sole cost and expense, obtain and maintain, without interruption, not less than the following minimum insurance coverage for the Property:
(i)    Property Insurance.  The Property shall be insured for the benefit of Agent, as agent for the Lenders on a “Full Replacement Cost” basis, (defined as the cost of replacing the Improvements on such property, together with appurtenances and betterments in compliance with the prevailing building codes, without deduction for physical depreciation thereof, at the time of replacement of property, following a loss) or such other limits as may be approved by Agent, based on insurable values, for each property securing the Loan.  The policy will not be subject to coinsurance.  Borrower will not make a decision not to replace the Improvements, unless upon written consent of Agent.  Full Replacement Cost shall be determined by an appraisal at Borrower's sole expense, by an insurance company, appraiser, appraisal company, or any other entity or method selected by Borrower and approved by Agent.  The value so determined shall be binding and conclusive upon the parties hereto.  The policy shall further provide that Borrower shall not be unreasonably restricted from applying such proceeds to the building of the Improvements at such other location as Borrower and/or Agent shall elect.  The Property shall be insured on an All Risk basis.  If determined necessary by

18

Agent, Borrower will also maintain coverage for flood, earthquake, windstorm, sections (v) and (vi) notwithstanding.  The policy shall be endorsed to provide demolition and increased cost of construction.
(ii)Rent Loss/Business Interruption.  Borrower shall maintain rent loss or business interruption insurance sufficient to prevent Agent from being a co­insurer, and in an amount not less than eighteen (18) months' projected gross income from the Property, and whenever possible, for the length of reconstruction, whichever is longer.
(iii)Boiler and Machinery.  If applicable, Borrower shall maintain boiler and machinery insurance covering physical damage to the Property and to the major components of any central heating, air conditioning or ventilation systems, and such other equipment as Agent may require.  The policy shall include coverage for business interruption due to mechanical equipment malfunctions, including expediting and extra expense, in an amount usual and customary for similar risks, or as determined by Agent.  Unless the insurance required in subparagraphs (i), (iii) and (iv) is provided on a single policy, a Joint Loss Agreement between separate policies must be provided on each policy.
(iv)Builder's Risk.  The coverage may be provided as an extension to the property policy in force (as required in subparagraph (i) above), if the requirements herein are satisfied.
(v)Intentionally Omitted.
(vi)Intentionally Omitted.
(vii)Windstorm Insurance.  Borrower shall maintain windstorm insurance in amounts and in a form and substance satisfactory to Agent, which shall not provide for a deductible greater than two percent (2%) of the Full Replacement Cost of the Property, subject to a $250,000 minimum deductible.
(viii)Liability Insurance.  The following liability insurance:
(1)Comprehensive General Liability.  Comprehensive commercial liability insurance on the broadest forms available for similar risks, written on an “occurrence policy form,” against all claims for bodily injury, disease or death, property damage, personal injury and contractual liability in an amount not less than $2,000,000.00 for loan amounts under $5,000,000.00, and $5,000,000.00 for loans of $5,000,000.00 or more in the aggregate and $1,000,000.00 per occurrence plus a $7,000,000.00 umbrella excess policy, or at Agent's discretion, such other limits as may reasonably be determined to be usual and customary for similar use and occupancy in the area.  If liability coverage for the Property is included under Borrower's blanket policy written on an aggregate form, then the annual aggregate limit of insurance must not be less than $7,000,000.00.  The policy shall be endorsed to include Agent as an additional insured subject to the benefits stipulated under subsection (f)(iv) hereof.
(2)Contractors.  Borrower shall require general contractors and subcontractors engaged on the Property to maintain commercial liability insurance, with extension to cover products or completed operations, with limits of not less than $1,000,000.00 

19

per occurrence.  The general contractors and the subcontractors will have Borrower and Agent included on their insurance required herein as additional insureds.
(3)Vendors.  Borrower will require vendors who will operate independently, or perform services for Borrower on the Property, to maintain commercial general liability coverage (including products or completed operations) with limits of not less than $1,000,000.00 per occurrence.
(ix)Workers' Compensation and Employers' Liability.  Borrower shall maintain for all its employees, and will cause any of its agents, contractors, subcontractors, and vendors to maintain similar insurance for all their respective employees, to the fullest extent required under the laws of the state or country in which the Property is located.
(x)Other Insurance.  The types and limits of coverage stipulated herein are the minimum requirements.  Agent retains the right to make any changes it deems necessary.  Borrower shall also maintain all insurance, surety and fidelity bonds that Borrower is required to maintain as landlord under tenants' leases, if any.  Borrower may also maintain any other insurance and bonds, even if not specifically required herein, in amounts, and for such periods that are deemed to be prudent, or are customarily maintained by persons or entities operating properties of like kind, construction and occupancy in the locality of the Property, or as Agent may from time to time require and approve.  Compliance with insurance requirements will not in itself be construed to be limitation of Borrower's liability.
(xi)Terrorism.  The commercial property, liability and business income required above shall cover perils of terrorism and acts of terrorism (whether caused by a foreign or domestic source) consistent with the requirements described above at all times during the term of the Loan.
(b)Automatic Reinstatement.  If any policies are subject to exhaustion of limits, Borrower will exercise effort to have such policies include warranties of the right to reinstate coverage and policy limits of not less than the amount specified in Section 8(a), if any.  Agent shall reasonably determine whether such blanket policies provide sufficient limits of insurance.
(c)Other Requirements With Respect to Insurance.  The following provisions shall apply with respect to the insurance coverage required in Section 8(a) above:
(i)    Insurance Companies.  All insurance required herein shall be issued by insurance companies selected by Borrower, but subject to approval by Agent, which approval shall not be unreasonably withheld.  The insurers must be of recognized good standing, with a rating of AX or better in Best's Key Rating Guide for loans under $20,000,000, “A-“ or better by S&P (and the equivalent by any other Rating Agency) for loans between $20,000,000 and $35,000,000, and “A” or better by S&P (and the equivalent by any other Rating Agency) for loans over $35,000,000, and must be licensed to do business in the state in which the Property is located.  Coverage under blanket policies may be extended by endorsements provided the insurers meet the requirements stipulated herein.  Each policy shall not have more than a $25,000.00 deductible for any occurrence without Agent's approval, except for mandatory 

20

deductibles where required under local regulations, or when required by insurers for specific catastrophic perils.
(ii)Evidence of Insurance.  Each of the policies required herein will specify the Property as an insured location.  Borrower shall deliver to Agent, at least five (5) Business Days prior to the Loan closing, certified copies of certificates of insurance evidencing that the required coverage is in force, and thereafter at least 15 days before the expiration date of each such policy, Borrower shall deliver to Agent certified copies of the policies or certificates in form and content satisfactory to Agent.  These certificates must provide that the insurance in force is not contributory, participating with, nor excess over any other insurance, unless such other insurance is part of and applicable to the same risk, with the knowledge of, and consent of Agent.  Upon request by Agent, Borrower shall produce receipts evidencing payment of the current premiums.
(iii)Certificates of Insurance.  Whenever a certificate of insurance is issued, it must, at the minimum:
(1)indicate Borrower as the named insured;
(2)indicate the required limits of insurance for property and liability;
(3)indicate the Property as a covered location;
(4)specify Agent, as agent for the Lenders as a “mortgagee” or “loss payee,” and additional insured;
(5)show Agent, as agent for the Lenders as the “Certificate Holder”;
(6)indicate policy numbers and policy terms;
(7)identify insurance companies for each type of coverage; and
(8)bear an authorized signature.
(iv)Mortgagee and Loss Payee Clause.  The Property insurance shall have attached thereto a standard non­contributing, non­reporting mortgagee clause or its equivalent satisfactory to, and naming Agent, as agent for the Lenders, as first mortgagee, entitled to collect directly from the insurers the proceeds payable under such insurance, as its interest may appear, and stipulating that this entitlement will in no way be adversely affected by any act, error or omission of Borrower which may void any or all coverage provided.
(v)Waiver of Subrogation.  The Property policies will contain a standard waiver of subrogation provision.

21

(v)Reinsurance.  For all policies for which the insurer has purchased reinsurance, Borrower shall request a “cut­through” clause.
(vi)Cancellation.  Borrower shall immediately notify Agent of any cancellation of, non­renewal, or such material change as may adversely affect any insurance policy or coverage in force.  Each policy shall contain a provision obligating the insurer to send at least 30 days prior written notice to Agent notifying Agent of the intent to cancel or make such change, and that any loss otherwise payable to Agent thereunder shall be paid notwithstanding any act or negligence of Agent or Borrower which might, absent of such provision, result in a forfeiture of all or part of such insurance payment.
(vii)Separate Insurance.  Borrower shall not purchase separate insurance concurrent in form or contributing in the event of loss, with the insurance required hereunder, without Agent's prior written consent.
(viii)Contravention of Insurance.  Borrower will not intentionally do, allow or permit anything to be done on or about the Property that will affect, impair or contravene any policies of insurance that may be in force for the Property, or any part thereof, or the use thereof, against damage or destruction by fire, public liability, or any other cause of loss.  Further, Borrower at its sole cost and expense, will comply and cause compliance of the Property and the operations, maintenance and use thereof with all insurance requirements, whether or not compliance therewith shall require structural changes in or interfere with the use and enjoyment of the Property, or any part thereof.
(ix)Payment of Premium.  Borrower shall be solely responsible for, and promptly pay when due, any and all premiums for all such insurance.  Should Borrower fail to effect, maintain or renew any of the insurance as stipulated in this Agreement, or fail to pay the premiums thereof, or fail to deliver to Agent any evidence of such insurance, then, at its option but without the obligation to do so, Agent may procure such insurance.  Any sums expended by Agent and/or the Lenders to procure such insurance shall be payable by Borrower on demand, and with interest; however, it is expressly understood that procurement by Agent and/or the Lenders of any such insurance shall not be deemed to waive or release the default of Borrower, or the right of Agent, at its option, to exercise the remedies set forth in the Mortgage upon the occurrence of an Event of Default under the Loan Documents.  Should Borrower fail to repay any such sums expended by Agent and/or the Lenders, Agent may add such sums to the outstanding Loan balance.  Agent shall not be responsible for obtaining or maintaining any insurance required under the provisions of Section 8(a), and shall not, by reason of accepting, rejecting, approving or obtaining any such insurance, incur any liability for the existence, nonexistence of, or insufficient coverage of such insurance, or from legal liability arising therefrom.
(x)Sale under the Mortgage.  In the event of a sale of all or part of the Property pursuant to the provisions of the Mortgage, or if the title to any or all of the Property is transferred in extinguishment of the indebtedness evidenced by the Note, Agent, as agent for the Lenders, shall succeed to all the rights and interest of Borrower, including any right of Borrower to unearned premiums, in and to all such policies of insurance.

22

(xi)Notice of Transfer or Loss.  Upon a change in ownership or use or occupancy of the Property, Borrower shall immediately notify, in writing, Agent, and all other parties insured under the policies herein, provided that nothing herein shall be construed to permit such change in ownership if otherwise prohibited under the provisions hereof.  If a loss (defined herein for the purpose of this subsection to mean any act or occurrence of any kind or nature, whether or not insured, which results in damage, loss or destruction to any or all of the Property or any interest therein) occurs, Borrower will likewise give immediate written notice to Agent of the loss, and Agent may, but is not obligated to, make proof of such loss if not made promptly by Borrower.  With the exception of Workers' Compensation, all policies of the insurance required herein will allow, but not obligate, Agent, as agent for the Lenders, to participate in the adjustment and settlement process of all claims expected to exceed $100,000.00.
(xii)Leases.  Borrower will require on all leases signed after the date hereof that each of its tenants' property insurance policy provide a standard waiver of subrogation, and each such policy shall include Agent, as agent for the Lenders, as an additional insured.
(d)Insurance Review.  At Agent's option, but not more often than annually, Borrower shall provide Agent with a report from an independent insurance consultant of regional or national prominence, acceptable to Agent, certifying that Borrower's insurance is in compliance with this Section 8.
(e)Notice of Casualty.  Borrower shall give to Agent immediate notice of any loss occurring on or with respect to the Property.
(f)Settlement of Claim.  In case of loss covered by any of such policies, Agent, as agent for the Lenders is authorized to adjust, collect and compromise, in its discretion, all claims thereunder.  In the event of any adjustment, collection and compromise by Agent, Borrower covenants to sign upon demand, or Agent may sign or endorse, on Borrower's behalf, all necessary proofs of loss, receipts, releases and other papers required by the insurance companies to be signed by Borrower.  Borrower hereby irrevocably appoints Agent, as agent for the Lenders as its attorney-in-fact for the purposes set forth in the preceding sentence.  Agent may deduct from such insurance proceeds any expenses incurred by Agent and/or the Lenders in the collection and settlement thereof, including reasonable attorneys' and adjustors' fees and charges.
Nothing contained in this Agreement shall create any responsibility or obligation on the Agent or the Lenders to collect any amounts owing on any insurance policy, to rebuild or replace any damaged or destroyed Property or to perform any other act hereunder.  The Agent shall not by the fact of approving, disapproving, accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts, solvency of insurance companies, or payment or defense of lawsuits, and the Borrower hereby expressly assumes full responsibility therefor and all liability, if any, with respect thereto.

23

(g)Application of Insurance Proceeds.  Any insurance proceeds received by Borrower under any of such policies shall be delivered to Agent, as agent for the Lenders, and applied, at the option of the Agent, toward prepayment or reimbursement of the Indebtedness and any other amounts evidenced or secured by the Loan Documents, or to the rebuilding or repairing of the Property so damaged or destroyed, as the Agent in its sole and unreviewable discretion may elect.  Agent's election to apply such insurance proceeds to the Loan and other amounts evidenced or secured by the Loan Documents shall not relieve the Borrower of the duty to rebuild or repair.
Notwithstanding the foregoing, the Agent shall consent to the application of any proceeds of said insurance to the restoration of the Property so damaged if and only if Borrower fulfills all of the following conditions not waived in writing by Agent:
(i)that no Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, has occurred and is continuing under this Agreement or any of the Loan Documents;
(ii)the insurance proceeds shall be sufficient to fully restore and rebuild the Property free and clear of all liens except the lien of the Mortgage and the Permitted Exceptions, or in the event that such proceeds are in Agent's sole judgment insufficient to restore and rebuild the Property, then Borrower shall deposit upon demand the shortfall with Agent or in an account approved by Agent;
(iii)any and all monies which are made available for restoration and rebuilding hereunder shall be disbursed substantially in accordance with the disbursement procedures for advances under this Agreement including, if requested by Agent, monthly lien waivers and title insurance date-downs, or in any other manner approved by Agent;
(iv)construction and completion of restoration and rebuilding of the Property can, in Agent's judgment be completed within the earlier of (A) two (2) months prior to Stated Maturity and (B) fourteen (14) months of the casualty;
(v)for any restorations involving structural components or where the cost of restoration exceeds $200,000.00, construction and completion of restoration and rebuilding of the Property is completed in accordance with plans, specifications and drawings submitted to and approved by Agent, which plans, specifications and drawings shall not be modified, changed or revised without the Agent's prior written consent, and shall be in conformity with all governmental regulation, including building, zoning, land use and environmental regulations; and
(vi)Agent shall also have approved all general or prime contractors and all subcontractors, and the general contract or contracts the Borrower proposes to enter into with respect to the restoration and rebuilding, which approval shall not be unreasonably withheld or delayed.
(h)    TEXAS FINANCE CODE SECTION 307.052 COLLATERAL PROTECTION INSURANCE NOTICE.  (A) BORROWER IS REQUIRED TO: (I) KEEP THE PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNT SPECIFIED IN

24

THE LOAN DOCUMENTS; (II) PURCHASE THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER; AND (III) NAME AGENT AS THE PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS AS AND TO THE EXTENT REQUIRED IN THE LOAN DOCUMENTS; (B) BORROWER MUST, IF REQUIRED BY AGENT PURSUANT TO THE LOAN DOCUMENTS, DELIVER TO AGENT A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS; AND (C) IF BORROWER FAILS TO MEET ANY REQUIREMENT LISTED IN CLAUSE (A) OR (B) OF THIS SECTION, AGENT MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF BORROWER AT BORROWER'S EXPENSE AS AND TO EXTENT EXPLICITLY PERMITTED BY THE LOAN DOCUMENTS.
9.Eminent Domain.
(a)Notice of Condemnation.  Borrower shall give to Agent immediate notice of any taking of any portion of Property or the institution of any proceedings the effect of which is to achieve a taking of any portion of any Property by condemnation.
(b)Settlement of Claim.  In case the Property, or any part or interest in any thereof, is taken by condemnation, the Agent is hereby empowered to collect and receive all compensation and awards of any kind whatsoever (referred to collectively herein as “Condemnation Awards”) which may be paid for any property taken or for damages to any property not taken (all of which the Borrower hereby assigns to Agent).  In the event of any adjustment, collection and compromise by Agent, Borrower covenants to sign upon demand, or Agent may sign or endorse on Borrower's behalf, all necessary proofs of loss, receipts, releases and other papers required by the condemning authority to be signed by Borrower.  Borrower hereby irrevocably appoints Agent, as agent for the Lenders as its attorney-in-fact for the purposes set forth in this Section 9.  Agent may deduct from any Condemnation Awards, any expenses incurred by Agent in the collection and settlement thereof, including reasonable attorneys' and adjusters' fees and charges.
(c)Application of Condemnation Awards.  All Condemnation Awards so received shall be delivered to Agent, as agent for the Lenders, forthwith and applied by the Agent, as it may elect in its sole and unreviewable discretion, to the payment or reimbursement of the Loan or the other amounts evidenced or secured by the Loan Documents, or to the repair and restoration of any property not so taken or damaged.  No election made by the Agent under this Section 9 shall relieve the Borrower of the duty to repair and restore.
(d)No Lender Obligation.  Nothing contained in this Agreement shall create any responsibility or obligation of Agent to collect any amounts owing on account of any such condemnation or proceedings relating to the Property, to rebuild or replace any damaged or destroyed property or to perform any other act hereunder.
10.    Rights of Access and Inspection.  Borrower grants Agent, its agents and representatives the right to enter and visit the Property at any reasonable time for the purposes of observing it, performing appraisals, inspecting the Property, taking soil or groundwater samples,

25

and conducting tests, among other things, to investigate for the presence of Hazardous Substances.  Without limiting the foregoing, Borrower expressly grants Agent the rights of inspection prior to, or as a part of, any proceeding to exercise its rights under the Mortgage or in any other way enforce its rights and remedies under the Loan Documents.  Borrower shall also allow Agent access to the Property in order to examine, copy and audit its books and records including any audit performed pursuant to Section 11(e) hereof.  Agent is under no duty to visit or observe the Property, or to examine any books or records.  Any site visit, observation or examination by Agent shall be solely for the purpose of protecting the security for the Loan and preserving Agent's and Lenders' rights under the Loan Documents.  Neither Borrower nor any other party is entitled to rely on any site visit, observation or testing by Agent, its agents or representatives.  Agent owes no duty of care to protect Borrower or any other party against, or to inform Borrower or any other party of, any adverse condition affecting the Property, including any defects in the design or construction of any improvements on the Property or the presence of any Hazardous Substances on the Property.  So long as no Event of Default has occurred and is continuing, Agent shall give Borrower reasonable prior notice of its intent to enter the Property.  Agent shall exercise reasonable efforts to avoid interfering with Borrower's or any tenant's use of the Property in connection with the activities permitted under this Section 10.
11.Financial Reports, Property Reports and Annual Budget.
(a)Annual Financial Reports.  Within sixty (60) days after the end of each Loan Year, Borrower and Sole Member shall deliver to Agent copies of their annual financial statements which shall include comparative balance sheets, income statements, cash flow statements (sources and application of funds), and statements of changes in financial position for such Loan Year.  In addition, for Borrower, such statement shall also include a calculation of the Gross Receipts and Expenses for the immediately preceding Loan Year.  Each such annual report shall (i) be in a form reasonably satisfactory to Agent, (ii) be prepared on an accrual basis, in accordance with an income tax method of accounting consistently applied and certified by Borrower as true and correct, and (iii) otherwise comply with the reporting requirements of Agent.
(b)Monthly Reports.  Within ten (10) days after the end of each calendar month, Borrower will provide or cause to be provided the following reports in format acceptable to Agent:
(i)Income Statement.  An income statement which provides both actual and budgeted results for the prior month and year-to-date, which statement identifies Gross Receipts and Expenses for the immediately preceding month, each broken out for each type of utilization of the Property such as commercial, office, residential and parking (if applicable).
(ii)Balance Sheet.  A balance sheet.
(iii)Supporting Balance Sheet Schedules.  Supporting balance sheet schedules on the following topics:

26

(1)Aged Accounts Receivable.  Aged accounts receivable in intervals of 30/60/90 and 90+ days.  Such information shall be prepared for both the commercial and residential operations of the Property (if applicable).
(2)Aged Accounts Payables.  Aged accounts payables in the same intervals as presented for receivables.  Notwithstanding the foregoing, no aged accounts payable shall be scheduled for payables thirty (30) days old or less.
(3)Bank Statements.  To the extent not provided by the Depository Bank, monthly bank statements for each of the Accounts.
(4)Other Information.  Other documentation for balance sheet accounts as are usual and customary, as may be requested by Agent.
(iv)Rent Roll.  A rent roll for the Property listing each tenant leasing space in the Property, the rental rate (including the amount of any security deposit), the total rent received by Borrower, the commencement date and termination date of each Lease in effect and such other information as Agent may reasonably request from time to time.  If applicable, the rent roll shall be broken out for each type of utilization of the Property such as commercial, office and residential, if applicable.
(v)Security Deposits.  In addition to the bank statements required under Section 11(b)(iv)(3) above, a statement, certified as true, correct and complete, showing for each individual Lease and also in the aggregate for all Leases, the amount of security deposits currently held, and any receipts or disbursements of such security deposits occurring since the date of the prior month's statement.
(vi)Management Information Narrative.  A management information narrative certified by Borrower which contains the following elements:
(1)Monthly and Year-to-Date Variances.  A brief discussion of material monthly or year-to-date variances incurred versus the Annual Budget (defined below).
(2)Material Operating Items.  Comments on material operating items such as major pass-through receivables, tax appeals or capital expenditures.
(3)Leasing Status Report.  A leasing status report in the form and with detail reasonably satisfactory to Agent.
(c)Preparation and Certification.  All of the financial statements and reports set forth in this Section 11 shall be prepared in accordance with an income tax method of accounting consistently applied and be certified by Borrower's and each Guarantor's, if any, chief financial officer or Sole Member.
(d)Annual Budget.  The “Annual Budget” for any period, shall mean the budget submitted to and approved by Agent for such period.  The Annual Budget shall set forth, in sufficient detail, Borrower's projection of Gross Receipts and Expenses for such period.  Each
    

27

Annual Budget shall be for a calendar year except that the Annual Budget for the year in which this Loan originates or terminates, shall only cover the periods after origination or prior to termination, as applicable.  The Annual Budget for 2011 through and including December 31, 2011, is set forth on Exhibit C attached hereto and made a part hereof.  Borrower shall submit to Agent, for Agent's review and approval, a proposed Property budget for each Loan Year, not later than sixty (60) days prior to the commencement of such Loan Year.  If Agent has not approved a proposed Annual Budget within thirty (30) days of submission, Borrower shall continue to operate the Property pursuant to the prior year's Annual Budget until such time as the new proposed Annual Budget is approved by Agent.  Borrower shall attach to each Annual Budget any supporting schedules requested by Agent, including schedules stating the Gross Receipts from tenants on a tenant-by-tenant basis.
(e)Right to Audit.  Within one hundred eighty (180) days after receipt of the financial statements for a particular Loan Year satisfying the requirements of Section 11(a), Agent may notify Borrower in writing that Agent disputes any computation or item contained in any portion of such statement.  In the event Agent shall so notify Borrower, the parties shall meet in good faith to resolve such disputed items.  If the parties are unable to resolve such disputed items between themselves within fifteen (15) days, then the items shall be submitted to arbitration, which arbitration shall be performed by an independent certified public accountant selected by Agent and reasonably satisfactory to Borrower.  The determination of such arbitrator shall be final.  The fees of such arbitrator shall be paid by Borrower if the arbitrator determines that Borrower's financial statements overstated net operating income by more than two percent (2%).  If Agent does not so notify Borrower of a dispute in the manner and within the time period set forth in this Section 11(e), then such statements shall be deemed acceptable to Agent.
12.General Covenants of Borrower.  Until the full and final payment of the Loan, unless Agent waives compliance in writing, Borrower hereby covenants and agrees as follows:
(a)Operation and Maintenance of Property.  In addition to the terms, conditions and provisions set forth in the other Loan Documents:
(i)Record Keeping.  Borrower shall keep and maintain full and accurate accounts and records of Borrower's operations according to generally accepted accounting principles consistently applied and in sufficient detail to accurately calculate Gross Receipts, and Expenses .  Borrower shall keep all such accounts and records at the Property or at its address set forth in Section 20(a) hereof.
(ii)Payment of Lawful Claims.  Borrower shall pay or discharge all lawful claims, including Taxes, assessments and governmental charges or levies imposed upon Borrower or its income or profits or upon any property belonging to Borrower prior to the date upon which penalties attach thereto.  Without limiting the generality of the foregoing, Borrower shall pay (a) all taxes and recording expenses, including stamp taxes, if any, relating to the Mortgage and any other documents and instruments securing the Loan, (b) the fees and commissions (if any) lawfully due to brokers in connection with this transaction and hold Agent and Lenders harmless from all such claims, whether or not lawfully due, and (c) the fees and expenses of Agent's counsel relating to Agent's consultation with such counsel in connection 

28

with the Loan, the negotiation, documentation and closing of the Loan, and any subsequent modifications of the Loan.
(iii)No Amendments.  Borrower shall not, without Agent's prior written consent, enter into any amendments or modifications of (a) the insurance policies required by Section 8 hereof, except that Borrower shall be entitled to modify its insurance policies provided that Borrower continues to comply with the insurance provisions set forth in Section 8 herein, (b) if Borrower or Sole Member is a corporation, the Borrower's and Sole Member's by-laws and articles of incorporation, (c) if Borrower or Sole Member is a limited liability company, such entity's operating agreement or articles of organization, (d) if Borrower or Sole Member is a limited partnership, such entity's partnership agreement or certificate of limited partnership, or (e) the Third Party Agreements.  In addition, Guarantor(s), if any, shall not amend or modify Guarantor's by-laws or articles of incorporation, or its operating agreement or articles of organization, as applicable.
(iv)No Separate Insurance.  Borrower shall not obtain any separate insurance whatsoever which is concurrent in form or contributing in the event of loss with that required under Section 8 hereof or under the Mortgage without first obtaining Agent's prior written consent thereto, which such consent shall be exercised in Agent's sole and absolute discretion.
(v)Maintenance and Repair of Property.  Borrower shall (a) maintain the Property, including the parking and landscaping portions thereof, in good condition and repair, (b) promptly make all necessary structural and non-structural repairs to the Property, including the Required Repairs, and (c) not demolish, alter, remove or add to any Improvements, excepting (i) the repair and restoration of Improvements following damage thereto as required by this Agreement, and (ii) as otherwise required by any applicable law, rule or regulations, and (d) not erect any new buildings, structures or building additions on the Property, without the prior written consent of Agent.  Borrower shall pay when due all claims for labor performed and materials furnished therefor in connection with any improvements or construction activities.
(b)Restricted Sale and Encumbrance of Property and of Borrower Interests; Other Indebtedness.  Borrower shall not engage in any Sale or Encumbrance without the prior written consent of Agent (which may be withheld by Agent in Agent's sole and absolute discretion).  All easements, declarations of covenants, conditions and restrictions and private and public dedications affecting the Property shall be submitted to Agent for its approval and such approval shall be obtained prior to the execution or granting of any thereof by Borrower, accompanied by a drawing or survey showing the precise location of each thereof.  In addition, Borrower shall not incur any Indebtedness, whether secured or unsecured, other than this Loan; provided, however, that Agent shall not unreasonably withhold its consent to a subordinate mezzanine loan in an amount not to exceed Ten Million and No/100 Dollars ($10,000,000.00), provided that all of the following conditions are satisfied: (i) Agent shall have had the opportunity to first provide such financing on market terms and elected not to provide such financing; (ii) the amount of such subordinate mezzanine loan shall also be constrained by the more restrictive of (A) a maximum loan to value of seventy percent (70%) as determined by Agent, and (B) a minimum debt service coverage ratio (based on a trailing 12 month cash flow), as determined by Agent, of no less than 1.45 to 1.00; (iii) Agent shall have approved the lender

29

of such subordinate mezzanine loan; (iv) Agent shall have approved the form and substance of the loan documents evidencing and securing the subordinate mezzanine loan; and (v) subordinate mezzanine lender shall execute a subordination agreement on Agent's form.  Notwithstanding anything stated to the contrary in this Agreement, Agent shall not unreasonably withhold its consent to a one time right to transfer the Property and an assumption of this Loan by the purchaser of the Property, provided that all of the following conditions are satisfied: (1) no Event of Default then exists; (2) such purchaser meets Agent's credit and ownership requirements; (3) the Property satisfies a debt service coverage ratio of 1.35 to 1.00 based on the projected net operating income for the Property as reasonably determined by Agent; (4) either (A) the loan to value of the Property does not exceed seventy percent (70%) based on an appraisal obtained at Borrower's or such purchaser's cost, as reasonably determined by Agent, or (B) the loan to actual purchase price does not exceed seventy percent (70%) as reasonably determined by Agent; and (5) Agent receives a replacement guaranty in the form of the existing Guaranty or otherwise satisfactory to Agent in its sole discretion; and (6) Agent receives an assumption fee in the amount of one percent (1%) of the then-outstanding principal amount of the Loan.
(c)General Indemnity.  Borrower shall, at Borrower's expense, protect, defend, indemnify, save and hold Agent and each Lender and each of their respective members or partners and its members' or partner's stockholders, directors, officers, members, employees and agents (collectively the “Indemnified Parties”) harmless against any and all claims, demands, losses, expenses (including court costs and reasonable attorney's fees and expenses), damages, causes of action (whether legal or equitable in nature) asserted by any person or entity arising out of, caused by or relating to the Loan, the Property, the Agent's exercise of its rights under the Loan Documents and the construction or interpretation of the relationship between Agent, Lenders and Borrower contrary to Section 20(d) hereof, except if suSch claims, demands, losses, damages, causes of action arise out of the gross negligence or willful misconduct of the Indemnified Parties.  Borrower shall pay to Agent upon demand all claims, judgments, damages, losses and expenses (including court costs and reasonable attorneys' fees and expenses) incurred by Agent and/or the Lenders as a result of any legal or other action arising out of the aforesaid matters.  Borrower acknowledges that the Indemnified Parties may defend any matter covered by the above indemnification by counsel of the relevant Indemnified Party's choice, and the costs of such defense (including reasonable attorney's fees) are part of the costs covered by this indemnity.  The foregoing indemnification shall not be subject to the limitations on liability contained in Section 21 below and shall survive repayment of the Loan.  WITHOUT LIMITATION, IT IS THE INTENTION OF BORROWER AND BORROWER AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY WITH RESPECT TO CLAIMS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES OR ANY STRICT LIABILITY, BUT SHALL NOT APPLY WITH RESPECT TO THE GROSS NEGLIGENCE OF SUCH INDEMNIFIED PARTIES.
(d)Leases:
(i)    Lease Requirements.  All Leases entered into after the date of this Agreement shall be on the standard form of Lease (residential or commercial, as applicable) approved by Agent.  Borrower shall not enter into any Major Leases without Agent's prior written consent in each instance.  Borrower shall have the right to enter into Leases that are not

30

Major Leases without Agent's prior written consent, so long as: (1) the tenant thereunder is an independent third party unaffiliated with Borrower; (2) the terms and conditions of the Lease comply with the leasing guidelines attached hereto as Exhibit E; (3) the space demised does not include any public or common areas of the Property except corridors in leases of full floors; (4) such space is to be used solely for legal purposes consistent with the present and presently contemplated use of the Property and such space; (5) the Lease does not grant any option or right to acquire the Property or any part thereof or interest therein; (6) such Lease is executed on the standard form lease delivered to and approved by Agent, without material modification; (7) the rental under such Lease is fixed and determined and not based on the net income of the tenant; and (8) no Event of Default has occurred and is continuing under this Agreement or the other Loan Documents.
(ii)Time for Granting Approval.  With respect to any Lease (and/or any amendment to any Lease) requiring Agent's approval, Agent shall grant or withhold its approval within six (6) Business Days after Agent's receipt of (a) a written request by Borrower requesting such approval and (b) supporting documentation sufficient to enable Agent to make an informed decision concerning such Lease.  Agent's failure to respond within such six (6) day period shall constitute Agent's disapproval of the Lease.
(iii)Performance of Obligations.  Borrower shall pay, perform and discharge, as and when payment, performance and discharge are due, all obligations of Borrower as landlord under all Leases.  Borrower shall give Agent prompt notice of any default by Borrower claimed by any tenant under any Lease, together with a copy of any notice of default given by any such tenant to Borrower or Manager.
(iv)Enforcement of Lease.  Borrower shall enforce all covenants and agreements on the tenant's part to be performed or complied with under each of the Leases and on the part to be performed or complied with by any guarantor under any guaranty given in connection with any Lease.  Borrower shall not, without the prior written consent of Agent in each instance, (1) amend or modify any Lease, (2) consent to the assignment or subletting of the whole or any portion of the tenant's interest under any Lease or (3) cancel, terminate or accept the surrender of any Lease except as a result of a default by the tenant thereunder or waive or release any obligation or liability of any tenant under any Lease or of any guarantor under any guaranty thereof.  Notwithstanding anything set forth herein to the contrary, Borrower may amend any existing Lease that complies with the leasing guidelines attached hereto as Exhibit E without Agent's consent so long as the amended terms and conditions also comply with the leasing guidelines set forth on Exhibit E.
(v)Prepayments; Security Interest.  Borrower shall not, without Agent's prior written consent in each instance, accept prepayment of rent (including any lease termination payments) under any Lease or permit any tenant to offset or credit sums due and payable by Borrower to such tenant against rents, as the case may be, for more than thirty (30) days in advance.  Borrower shall not further assign, pledge, transfer or otherwise encumber the Leases or the rents under the Leases.  If an Event of Default has occurred and Borrower shall receive all or any portion of any lease termination payments, Borrower shall cause such portion of any lease termination payments to be deposited into the Restricted Account and all such

31

amounts shall then be applied to the payment of the Indebtedness or the payment of Expenses, as Agent may elect in its sole and unreviewable discretion.
(vi)Defense; Pursuit of Remedies.  Borrower shall, at Borrower's expense, appear in and defend any action or proceeding arising from or connected with any of the Leases or any obligation or liability of Borrower as landlord thereunder.  Borrower shall diligently pursue all remedies, including claims for damages available at law or in equity against any tenant under a Lease or guarantor thereof and shall not settle or compromise any such claims without Agent's prior written consent in each instance.
(vii)Copies of Leases.  Borrower shall furnish to Agent copies of all Leases requested by Agent within ten (10) days following Agent's demand therefor.  Borrower shall deliver copies of any Leases and amendments to Leases within five (5) Business Days after Borrower's execution thereof.
(e)Notices.  Borrower shall promptly notify Agent in writing of any litigation affecting (a) Borrower or Sole Member and Guarantor, if any, and, if Borrower or Sole Member is other than a natural person or trust, any general partner or controlling shareholder of Borrower or Sole Member, or (b) the Property, to the extent that any such litigation may result in a material adverse change in (i) the financial condition of any of the foregoing parties, (ii) Borrower's or Sole Member's and Guarantor's, if any, ability to timely perform any of its obligations under any of the Loan Documents, or (iii) the physical condition or operation of the Property.
(f)Property Management.  Borrower shall (i) cause the Property to be managed pursuant to the Management Agreement; (ii) promptly perform and observe all of the covenants required to be performed and observed by it under the Management Agreement and do all things necessary to preserve and to keep unimpaired its rights thereunder; (iii) promptly notify Agent of any default under the Management Agreement of which it is aware; (iv) if requested, promptly deliver to Agent a copy of each financial statement, business plan, capital expenditure plan, and property improvement plan and any other notice, report and estimate received by Borrower under the Management Agreement; and (v) promptly enforce the performance and observance of all of the covenants required to be performed and observed by Manager under the Management Agreement, the failure of which covenants could cause a Material Adverse Effect.  Without Agent's prior written consent (not to be unreasonably withheld), Borrower shall not (a) surrender, terminate, cancel, extend or renew the Management Agreement or otherwise replace the Manager or enter into any other management agreement; (b) reduce or consent to the reduction of the term of the Management Agreement; (c) increase or consent to the increase of the amount of any charges under the Management Agreement; (d) otherwise modify, change, supplement, alter or amend in any material respect, or waive or release any of its rights and remedies under, the Management Agreement; or (e) suffer or permit the occurrence and continuance of a default beyond any applicable cure period under the Management Agreement (or any successor management agreement) if such default permits the Manager to terminate the Management Agreement (or such successor management agreement).  If (i) an Event of Default shall be continuing, or (ii) upon the gross negligence, malfeasance or willful misconduct of the Manager, Borrower shall, at the request of Agent, terminate the Management Agreement and replace Manager with a replacement manager acceptable to Agent in Agent's discretion and the applicable 

32

Rating Agencies on terms and conditions satisfactory to Agent and the applicable Rating Agencies.  Borrower's failure to appoint an acceptable manager within thirty (30) days after Agent's request of Borrower to terminate the Management Agreement shall constitute an immediate Event of Default
(g)General ERISA Covenant.  In the event that the ownership of any class of equity interests of the Borrower by Benefit Plan Investors is “significant” as defined in paragraph (f) of the Plan Asset Regulation, the Borrower shall operate at all times so that it qualifies as a “real estate operating company” as defined in paragraph (3) of the Plan Asset Regulation.
(h)Principal Place of Business; Choice of Law.  Borrower shall not change its principal place of business or, if Borrower has more than one place of business, its chief executive office, from its address set forth in Section 20(a).  In addition, Borrower shall not make an election under the Uniform Commercial Code to treat, as the governing law for perfection of uncertificated securities, the law of any jurisdiction other than the jurisdiction of its formation.  Agent agrees not to unreasonably withhold its consent to any change in the Borrower's principal place of business or the governing law with respect to uncertificated securities so long as (1) Borrower and any other party requested by Agent execute all documents and instruments deemed necessary by Agent to perfect the security interests granted pursuant to the Loan Documents, (2) the Borrower pays all of the Agent's  and each Lender's costs and expenses perfecting such security interests and (3) Borrower delivers to Agent, as agent for the Lenders, an opinion from counsel selected by Agent opining as to the continued perfection of such security interest.
(i)Compliance with Governmental Prohibitions.  No portion of the Loan proceeds will be used, disbursed or distributed by Borrower or Sole Member for any purpose, or to any person, in violation of any Law (as defined in Section 15 (l)) including, without limitation, any of the Terrorism Laws (as defined in Section 15 (l)).  Borrower shall provide Agent with immediate written notice (a) of any failure of any of the representations and warranties set forth in Section 15(l) of this Agreement to be true, correct and complete in all respects at any time, or (b) if Borrower obtains knowledge that Borrower, Sole Member, or any holder at any time of any direct or indirect equitable, legal or beneficial interest in Borrower or Sole Member is the subject of any of the Terrorism Laws.  Borrower shall immediately and diligently take, or cause to be immediately and diligently taken, all necessary action to comply with all Terrorism Laws and to cause the representations and warranties set forth in Section 15(l) to be true, correct and complete in all respects.
(j)No Distributions.  Borrower shall not make any distributions to its partners, members or shareholders after the occurrence and during the continuation of an Event of Default.
(k)Patriot Act Compliance.  Borrower will use its good faith and commercially reasonable efforts to comply with the Patriot Act (as defined below) and all applicable requirements of Governmental Authorities having jurisdiction over Borrower and the Property, including those relating to money laundering and terrorism.  Agent shall have the right to audit Borrower's compliance with the Patriot Act and all applicable requirements of Governmental Authorities having jurisdiction over Borrower and the Property, including those relating to money laundering and terrorism.  In the event that Borrower fails to comply with the 

33

Patriot Act or any such requirements of Governmental Authorities, then Agent may, at its option, cause Borrower to comply therewith and any and all reasonable costs and expenses incurred by Agent and/or the Lenders in connection therewith shall be secured by the Mortgage and the other Loan Documents and shall be immediately due and payable.  For purposes hereof, the term “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as the same may be amended from time to time, and corresponding provisions of future laws.
Neither Borrower nor any member of Borrower or member or partner of such member nor to Borrower's Knowledge, any owner of a direct or indirect interest in Borrower (a) is listed on any Government Lists (as defined below), (b) is a person who has been determined by competent authority to be subject to the prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the rules and regulations of OFAC (as defined below) or in any enabling legislation or other Presidential Executive Orders in respect thereof, (c) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense (as defined below), or (d) is currently under investigation by any governmental authority for alleged criminal activity.  For purposes hereof, the term “Patriot Act Offense” means any violation of the criminal laws of the United States of America or of any of the several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under (a) the criminal laws against terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or the (e) Patriot Act.  “Patriot Act Offense” also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense.  For purposes hereof, the term “Government Lists” means (i) the Specially Designated Nationals and Blocked Persons Lists maintained by Office of Foreign Assets Control (“OFAC”), (ii) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC that Agent notified Borrower in writing is now included in “Governmental Lists”, or (iii) any similar lists maintained by the United States Department of State, the United States Department of Commerce or any other government authority or pursuant to any Executive Order of the President of the United States of America that Agent notified Borrower in writing is now included in “Governmental Lists”.
(l)Partial Satisfaction.  Borrower agrees not to send Agent payments marked “paid in full,” “without recourse,” or similar language.  If Borrower sends such a payment, Agent may accept it without losing any of Agent's and Lenders' rights under the Loan Documents, and Borrower will remain obligated to pay any further amounts owed to the Agent and the Lenders.
(m)Assumption in Non-Consolidation Opinion.   Borrower and Sole Member shall each conduct its business so that the assumptions (with respect to each Person) made in that certain substantive non-consolidation opinion letter delivered by Borrower's counsel in connection with the Loan, shall be true and correct in all respects.
13.    Further Assurances.  Borrower shall, from time to time, upon Agent's request, execute, deliver, record and furnish such documents and do such other acts as Agent may reasonably deem necessary or desirable to (i) perfect and maintain valid liens upon the security

34

contemplated by the Loan Documents, (ii) correct any errors of a typographical or other manifest nature which may be contained in any of the Loan Documents, (iii) evidence Borrower's compliance with the Loan Documents, and (iv) consummate fully and carry out the intent of the transactions contemplated under this Agreement or the Loan Documents.  Borrower shall also cause to be delivered to the Agent, as agent of the Lenders, such opinions of counsel (in form and substance reasonably satisfactory to the Agent and from counsel reasonably acceptable to the Agent) as the Agent may from time to time reasonably request because of a change of law, change of fact, or other legitimate reason, concerning any material matters incident to this Agreement or the transactions contemplated in this Agreement or the Loan Documents.
14.Appraisals.  Agent has the right to obtain a new appraisal or update an existing appraisal of the Property at any time while the Loan or any portion thereof remains outstanding (a) when, in Agent's reasonable judgment, such an appraisal is warranted as a result of Agent's internal evaluation of the Loan, and/or (b) to comply with statutes, rules, regulations or directives of Governmental Authorities.  Borrower shall pay, upon demand, all appraisers' fees and related expenses incurred by Agent from time to time in obtaining such appraisal reports.
15.General Representations and Warranties of Borrower.  Borrower represents and warrants to Agent and the Lenders, which representations and warranties shall survive the termination of this Agreement, the repayment of the Loan, any investigations, inspections or inquiries made by Agent or the Lenders or any of their representatives, the recording of the Mortgage, and any disbursements made by Agent or the Lenders hereunder, as follows:
(a)Organization; Corporate Powers; Authorization of Borrowing.
(i)Organization.
(1)Borrower is a limited partnership which has been duly formed and is validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in the Governing Jurisdiction.
(2)Sole Member is the general partner of Borrower.
(ii)Power and Authority.  Borrower and Sole Member, and Guarantor(s), if any, have full power and authority to execute the Loan Documents to which they are a party and to undertake and consummate the transactions contemplated hereby and thereby, and to pay, perform and observe the conditions, covenants, agreements and obligations herein and therein contained; and the Loan Documents have been duly and validly executed by Borrower and Sole Member and constitute the legal, valid and binding obligations of Borrower and Sole Member and Guarantor(s), if any, and are and will continue to be enforceable in accordance with their respective terms, except as such enforcement may be qualified or limited by Insolvency Laws or other similar laws affecting creditors' rights generally.
(iii)Not a Foreign Person.  Borrower is not a foreign person and is a “United States Person” as such term is defined in Section 7701(a) of the Internal Revenue Code and is not a person with respect to which the applicable Laws of the Governing Jurisdiction require state income tax withholding.

35

(iv)No Defaults Under Existing Agreements.  The consummation of the transactions contemplated hereby and the performance by Borrower, Sole Member, the Guarantor(s), if any, or by any other parties which are a party thereto of their respective obligations under the Loan Documents will not result in any breach of, or constitute a default under any other Third Party Agreements or any mortgage, deed of trust, lease, bank loan or security agreement, or any other instrument to which Borrower, Sole Member, the Guarantor(s), if any, or such other parties are a party or by which the Property, the Borrower, Sole Member or such other parties may be bound or affected.
(v)True and Correct Copies of Documents.  All due diligence documents required to be delivered by or on behalf of Borrower to Agent hereunder (including those due diligence documents referred to in Section 6 hereof) are true, correct and complete copies thereof and the same have not been amended or modified except as expressly disclosed therein.
(vi)No Bankruptcy Filing.  Borrower is not contemplating filing a Bankruptcy Proceeding (defined below) and Borrower has no knowledge of any Person contemplating the filing of a Bankruptcy Proceeding against it.  In addition, neither Borrower nor Sole Member has been a party to, or the subject of a Bankruptcy Proceeding for the past ten (10) years.
(vii)Full and Accurate Disclosure.  No statement of fact made by Borrower in any Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained therein not misleading.  There is no material fact presently known to Borrower that has not been disclosed to Agent which might have a Material Adverse Effect.  All financial data, including the statements of cash flow and income and operating expense, that have been delivered to Agent in respect of Borrower and, to Borrower's Knowledge, the Property (i) are true, complete and correct in all material respects, (ii) accurately represent the financial condition of  Borrower and the Property as of the date of such reports, and (iii) to the extent prepared by an independent certified public accounting firm, have been prepared in accordance with GAAP consistently applied throughout the periods covered, except as disclosed therein.  Borrower has no contingent liabilities, liabilities for delinquent taxes, unusual forward or long-term commitments, unrealized or anticipated losses from any unfavorable commitments or any liabilities or obligations not expressly permitted by this Agreement.  Since the date of such financial statements, there has been no materially adverse change in the financial condition, operations or business of Borrower or, to Borrower's Knowledge, the Property from that set forth in said financial statements.
(viii)Tax Filings.  To the extent required, Borrower has filed (or has obtained effective extensions for filing) all federal, state and local tax returns required to be filed and have paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Borrower.  Borrower believes that its tax returns (if any) properly reflect the income and taxes of Borrower for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit.

36

(ix)Name; Principal Place of Business.  Borrower does not use and will not use any trade name and has not done and will not do business under any name other than its actual name set forth herein.  The principal place of business of Borrower is its primary address for notices as set forth in Section 20(a) hereof, and Borrower has no other place of business.
(x)Other Debt.  There is no indebtedness with respect to the Property or any excess cash flow or any residual interest therein, whether secured or unsecured, other than Permitted Exceptions.
(b)Title to Property; Matters Affecting Property.
(i)Title to Property.  Borrower has and will have good and marketable fee simple title to the Property, subject only to such exceptions as have been approved in writing by Agent, and good, marketable and freely alienable title to all personal property located on the Property,  subject only to such exceptions as have been approved in writing by Agent; Borrower will protect or cause to be protected the title to the Property and Borrower will forever warrant and defend the same against any other claims of any persons or parties whomsoever.
(ii)No Actions.  There are no actions, suits or proceedings at law or in equity (including condemnation or eminent domain proceedings) currently pending, or to the knowledge of Borrower threatened, against or affecting Borrower, Sole Member or the Property or involving the validity or enforceability of the Loan Documents or the priority of the lien of any thereof, or for or by any Governmental Authority having or exercising jurisdiction over the Property.  Borrower will promptly notify Agent of any such future actions, suits or proceedings.  To Borrower's Knowledge, neither Borrower nor the Property is in default with respect to, or in violation of, any order, writ, injunction, decree or demand of any court or any Governmental Authority having or exercising jurisdiction over Borrower or the Property.
(iii)No Contracts Giving Rise to Liens.  Borrower has made no contract or arrangement of any kind, that does or could give rise to a lien on the Property.  Neither the Borrower nor Sole Member has made any contract or arrangement of any kind that does or could give rise to a lien or Encumbrance on the Sole Member's interests in Borrower.
(iv)Utility Services.  All utility services necessary either are available at the boundaries of the Property or all necessary steps have been taken by Borrower to insure the complete construction and installation of facilities for such services, including water supply facilities, storm and sanitary sewer facilities, and gas, electric and telephone facilities.
(v)Roads.  All roads necessary for the full utilization of the Improvements for their intended purposes have been completed and/or the necessary rights-of-way therefor have been acquired by the Governmental Authority having or exercising jurisdiction over such matters or have been dedicated to public use and accepted by such Governmental Authority and all necessary steps have been taken by Borrower and such Governmental Authority to assure the complete use thereof.

37

(vi)Compliance with Property Agreements.  The Improvements in all respects conform to and comply with all covenants, conditions, restrictions, reservations, regulatory agreements, conditional use permits and zoning ordinances affecting the Property whether or not recorded against the Property.
(vii)Personal Property.  Any personal property owned by Borrower is vested in Borrower free and clear of all liens, Encumbrances and adverse claims not disclosed in writing to and approved by Agent.
(viii)Leases.  The Leases of the Property heretofore submitted by Borrower to Agent are in full force and effect, and there are no defaults under any of the provisions thereof, and all conditions to the effectiveness or continuing effectiveness thereof required to be satisfied by Borrower by the date hereof have been satisfied.  There are no Leases of the Property except those disclosed in the rent roll delivered pursuant to Section 6 hereof.
(ix)Permits.  All permits required for the operation of the Property are or will be in effect and will remain in effect and the Property and its contemplated use and operation comply or will comply therewith.
(c)Financial Statements.  The financial statements heretofore delivered to Agent by Borrower and Sole Member and Guarantor(s), if any, are true and correct in all respects, have been prepared in accordance with sound accounting practices, and fairly present the financial condition(s) of the person(s) referred to therein as of the date(s) indicated; no materially adverse change has occurred in the financial condition(s) reflected in such financial statements since the date(s) shown thereon and no additional borrowings or liabilities have been made or incurred by such person(s) since the date(s) thereof other than the borrowing contemplated hereby or other borrowings disclosed in writing to and approved by Agent.
(d)No Loan Broker.  Except for Holliday, Fenoglio, Fowler L.P., Borrower has not dealt with any other person, firm or corporation who is or may be entitled to any finder's fee, brokerage commission, loan commission or other sum in connection with the execution of this Agreement, the consummation of the transactions contemplated hereby or the making of the Loan by Agent and the Lenders to Borrower.  Borrower does hereby indemnify and agree to defend and hold Agent and the Lenders harmless from and against any and all loss, liability or expense, including court costs and reasonable attorneys' fees and expenses, which Agent and/or the Lenders may suffer or sustain should such warranty or representation prove inaccurate in whole or in part.
(e)No Default.  There is no default under the Loan Documents on the part of Borrower, Sole Member or Guarantor(s), if any, or the other parties signatory thereto, and no event has occurred and is continuing which, with the giving of notice or the passage of time, or both, would constitute a default by Borrower, Sole Member or any Guarantor(s), if any, under any thereof.
(f)Lawful Interest.  The amounts to be received by Agent and the Lenders as interest payments under the Note shall constitute lawful interest and shall be neither usurious nor illegal under the laws of the Governing Jurisdiction (defined below).

38

(g)RICO.  To the best of Borrower's Knowledge, there are no actions, suits or proceedings under the Racketeer Influenced and Corrupt Organization Act of 1970, 18 U.S.C. Sections 1961-1968 (“RICO”), or any other federal or state law for which forfeiture of assets is a potential penalty (collectively, “RICO Related Laws”), currently pending or threatened against Borrower, Sole Member or any of such parties' partners, shareholders or Affiliates.  Borrower will promptly notify Agent of any such future actions, suits or proceedings.
(h)ERISA.  In the event the ownership of any class of equity interests of the Borrower by Benefit Plan Investors is “significant” as defined in paragraph (f) of the Plan Asset Regulation, the Borrower represents and warrants that it qualifies as a “real estate operating company” as defined in paragraph (e) of the Plan Asset Regulation.
(i)Business Purpose.  The undersigned represents and agrees that the Loan evidences indebtedness arising from the regular conduct of Borrower's business (which is carried on for the purpose of profit and not for household purposes), and that the indebtedness evidenced and secured by the Loan Documents constitutes a business loan under applicable Law and is not usurious.
(j)Solvency.  As of the date hereof, the Borrower is solvent and able to pay its debts from its assets as the same shall become shall due and payable.
(k)Adequate Capitalization.  As of the date hereof, the Borrower and Guarantor have adequate capitalization for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.
(l)Violations of Governmental Prohibitions.  Neither the making of the Loan, nor the receipt of Loan proceeds by Borrower or Sole Member, violates any federal, state, county, municipal and other governmental and quasi-governmental statutes, laws, rules, orders, regulations, ordinances, judgments or decrees (collectively, “Law” or “Laws”, as applicable) applicable to such parties, including, without limitation, any of the Terrorism Laws (defined below).  Neither the making of the Loan, nor the receipt of Loan proceeds by Borrower, Sole Member or any principal, violates any of the Terrorism Laws applicable to the Sole Member.  To Borrower's best knowledge, no holder of any direct or indirect equitable, legal or beneficial interest in Borrower or Sole Member is the subject of any of the Terrorism Laws.  No portion of the Loan proceeds will be used, disbursed or distributed by Borrower for any purpose, or to any person, directly or indirectly, in violation of any Law including, without limitation, any of the Terrorism Laws.  “Terrorism Laws” means Executive Order 13224 issued by the President of the United States of America, the Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of Federal Regulations), the Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of Federal Regulations), and the Foreign Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the U.S. Code of Federal Regulations), and all other present and future federal, state and local laws, ordinances, regulations, policies and any other requirements of any Governmental Authority (including, without limitation, the United States Department of the Treasury Office of Foreign Assets Control) addressing, relating to, or attempting to eliminate, terrorist acts and acts of war, each as hereafter supplemented, amended or modified from time to time, and the present and future rules, regulations and guidance 

39

documents promulgated under any of the foregoing, or under similar laws, ordinances, regulations, policies or requirements of other states or localities.
(m)No Separate Insurance.  Borrower does not carry any separate insurance whatsoever which is concurrent in form or contributing in the event of loss with that required under Section 8 hereof or under the Mortgage.
(n)Federal Reserve Regulations; Investment Company Act.  No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose that would be inconsistent with such Regulation U or any other regulation of such Board of Governors, or for any purpose prohibited by Law or any Loan Document.  Borrower is not (i) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (ii) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (iii) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.
(o)Submission of Requests for Advance.  Each Request for Advance submitted by Borrower to Agent pursuant to Section 3(b)(ii) hereof shall be true and accurate and the submission of each such Request for Advance or the receipt of funds so requested shall constitute a reaffirmation by Borrower of the representations, warranties and covenants contained herein.
(p)Third Party Agreements.  Each of the Third Party Agreements is in full force and effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or the giving of notice or both would constitute a default thereunder or otherwise give rise  to a termination right.
(q)Accounts.  None of the Accounts are in the name of any Person other than Borrower, as pledgor, or Agent, as pledgee.
16.Event of Default.
(a)Events of Default.  Borrower shall be in default under this Agreement upon the occurrence of any of the following events (hereinafter referred to as an “Event of Default”):
(i)Non-Payment.  The failure of Borrower to pay any installment of principal and/or interest due and payable under the Note, including, but not limited to, Base Interest, or any other sum due and payable by Borrower to Agent or to any other person under any of the Loan Documents, including Holdback Funds provided for herein or deposits required under any Account Agreement, within five (5) days following the date when the same shall be due and payable hereunder or thereunder; provided, however, that in any given twelve (12) month period, Borrower shall have a one-time right to receive notice from Agent of any nonpayment and so long as Borrower pays all sums due and payable within five (5) days after

40

receipt of such notice of nonpayment, such nonpayment shall not be deemed an Event of Default; or
(ii)Waste.  Except for the work performed pursuant to the Annual Budget, the actual or threatened waste, removal, demolition or alteration of the Property or any part thereof without the prior written consent in each instance of Agent; or
(iii)Insurance.  The failure of Borrower to keep in force any insurance policy required hereunder or to deliver such policy or evidence of its renewal to Agent; or
(iv)Reports and Documents.  The failure of Borrower to deliver any notice, report, assignment, certificate, instrument or other document which Borrower is required to deliver to Agent under any of the Loan Documents within ten (10) days following written demand by Agent therefor; or
(v)Sale, Encumbrance or Other Indebtedness.  The taking of any action by Borrower, Sole Member or any other person contrary to the provisions of Section 12(b) of this Agreement (and Agent, as the agent for the Lenders, shall not be required to demonstrate any actual impairment of the security or any increased risk of default in order to exercise any of its remedies with respect to an Event of Default under this Section 16(a)(v)); or
(vi)Representations and Warranties.  The failure of any warranty or representation made in this Agreement or in any other Loan Document or in any notice, report, assignment, certificate or other document given by Borrower to Agent on the date hereof or at any time hereafter to be true and correct in any material respect as of the date made; or
(vii)Other Breaches under the Note or this Agreement.  The failure of Borrower to perform and observe any covenant, obligation, agreement or undertaking under the Note or this Agreement not otherwise referred to in this Section 16 within thirty (30) days following written notice thereof from Agent or, if such failure cannot with due diligence be cured within thirty (30) days, such longer period, not to exceed sixty (60) days in the aggregate from and after the giving of such written notice, as may be necessary to cure the same with due diligence, provided Borrower commences to cure within such thirty (30) days and proceeds diligently thereafter to cure the same; or
(viii)Other Breaches Under Other Loan Documents.  The failure of Borrower or any guarantor, indemnitor or obligor to perform and observe any covenant, obligation, agreement or undertaking under any Loan Document other than the Note following such notice and/or grace period, if any, as may be provided therein for curing such failure; or
(ix)Bankruptcy Proceedings.  If the Borrower or the Guarantor(s), if any, shall (each of the following proceedings or events are collectively referred to as “Bankruptcy Proceedings”):
(1)Become insolvent, make a transfer in fraud of, or an assignment for the benefit of, creditors, or admit in writing its inability, or is unable, to pay debts as they become due; or

41

(2)Have a receiver, custodian, liquidator or trustee appointed for all or substantially all of its assets or for the Property in any proceeding brought by the Borrower or any such receiver or trustee is appointed in any proceeding brought against the Borrower or the Property and such appointment is not promptly contested and is not dismissed or discharged within ninety (90) days after such appointment; or
(3)File a petition under Title 11 of the United States Code as amended or under any similar Federal or state law or statute; or
(4)Have a petition filed against it commencing an involuntary case under any present or future Federal or state bankruptcy or similar law and such petition is not dismissed or discharged within ninety (90) days after the filing thereof; or
(5)Request any composition, rearrangement, liquidation, extension, reorganization or other relief of debtors now or hereafter existing; or
(x)Attachment.  The taking, attaching or sequestering on execution or other process of law of the Property in any action against Borrower; or
(xi)Priority.  The upholding by any court of competent jurisdiction or consent to by Borrower of any claim of priority to this Agreement or any of the Loan Documents by title, lien or otherwise; or
(xii)Third Party Agreements.  If Borrower fails to cure any default by Borrower under any of the Leases or any of the Third Party Agreements within the shorter of thirty (30) days following the giving of notice of default by any party thereunder or the applicable grace period set forth therein; or
(xiii)Filing of Charges Under RICO.  The filing of formal charges, including the issuance of an indictment, by any governmental or quasi-governmental entity under RICO or any RICO Related Law, against Borrower, Sole Member, Guarantor(s), if any, or against any such party's partners, shareholders or Affiliates; or
(xiv)Service of Bonded Notice to Withhold Loan Funds.  The service upon Agent, as agent for the Lenders, in accordance with the laws of the Governing Jurisdiction of a bonded notice to withhold Loan funds from Borrower and within thirty (30) Business Days after Agent's receipt of such notice either (a) the claim set forth therein is not discharged by Borrower or (b) if the amount claimed is disputed in good faith by Borrower or Borrower's contractor, Borrower fails to deliver to Agent, as agent for the Lenders, a bond, in form and substance and issued by a surety company acceptable to Agent, insuring Agent, as agent for the Lenders, against such claim; or
(xv)Enjoinder of Construction or Performance of Obligations.  The making of any order or the entry of any decree by a court of competent jurisdiction enjoining or prohibiting Borrower and Agent, or either of them, from performing or satisfying their respective covenants, obligations or conditions contained herein and such proceedings are not discontinued or such order or decree is not vacated within sixty (60) days after the making or granting thereof; or

42

(xvi)Failure to Discharge Mechanics' Liens.  The filing for record of a mechanic's lien or materialman's lien against the Property or the filing of an action to foreclose such lien and within thirty (30) Business Days after the filing thereof either (a) the claim set forth therein is not discharged by Borrower or (b) if the amount claimed is disputed in good faith by Borrower or any contractor, Borrower fails to provide a bond for such lien or to prosecute the dispute diligently.
(b)Right to Cure Non-Monetary Default.
(i)Except as provided in Section 16(b)(ii) below, upon the occurrence of any Event of Default, Agent shall not accelerate the debt evidenced by the Note, make any payments for which Borrower is primarily liable or foreclose upon or attach any assets of Borrower until five (5) days after notice is given by Agent of the occurrence of an Event of Default not described in Section 16(b)(ii) below, provided (A) within three (3) days after the delivery or mailing of the notice of default Borrower commences its cure and submits to Agent in writing its plan to cure, and (B) said cure is continuously pursued by Borrower with due diligence.  If said Event of Default is not reasonably capable of being cured within five (5) days, Borrower shall have such additional time as is reasonably necessary to complete the cure, but in no event more than fifteen (15) days after the delivery or mailing of the notice of default; provided:  (i) said Event of Default is in Agent's reasonable judgment curable within said period; (ii) Borrower provides Agent with written, detailed progress reports at least every five (5) days until cure is complete; and (iii) Borrower continuously and diligently pursues said cure.
(ii)Notwithstanding anything stated to the contrary in Section 16(b)(i) herein, the cure period provided for in Section 16(b)(i) herein shall not apply in any of the following circumstances:
(1)the occurrence of an Event of Default described in Section 16(a)(i) herein; or
(2)the occurrence of an Event of Default described in Section 16(a)(v) herein; or
(3)in any circumstance when a delay in effecting a cure is, in the reasonable judgment of Agent, likely to result in any security being damaged, becoming uninsured or the value thereof being materially and adversely affected; or
(4)any failure to proceed with the construction or repair of Improvements to the Property as required by this Agreement; or
(5)the occurrence of any Event of Default described in Section 16(a)(ix) herein; or
(6)any Event of Default which Agent reasonably determines is not capable of being cured within the requisite period.
(iii)    Notwithstanding anything stated to the contrary in this Agreement or in any of the other Loan Documents, but subject to the provisions of Section 16(b)(ii) herein, 

43

the provisions of Section 16(b)(i) herein shall apply to Events of Default under this Agreement and under the Loan Documents, and unless expressly stated to the contrary in such documents, any cure period referred to therein shall be deemed to incorporate the provisions of Section 16(b) herein.  If the provisions of any said Loan Documents are inconsistent with the provisions of Section 16(b) herein, the provisions of Section 16(b) herein shall be controlling.  Where additional notice or cure periods are provided in the Note or any other Loan Documents, or are required by any other contract or by law, said periods and those contained in this Section 16(b) shall run concurrently.  Nothing in this Section 16(b) herein shall be construed as extending the term of the Stated Maturity, the Note or the date upon which an Event of Default occurs, and no decision to forego any remedy for any given Event of Default shall be deemed a waiver on the part of the Agent or any Lender of any right relating to any other Event of Default.  The provisions of this Section 16(b)(iii) shall be strictly construed and shall not impair the exercise of any remedy for an Event of Default referred to in Section 16(b)(ii) herein, including, without limitation, the seeking of any mandatory or prohibitive injunction or restraining order.
17.Remedies.
(a)Actions upon Event of Default.  If an Event of Default shall occur, Agent, in addition to any other rights of Agent, as agent for the Lenders, under the Loan Documents, may at its option and without prior notice or demand (and Borrower hereby expressly waives notice, notice of intention to accelerate the indebtedness secured by the Loan Documents, notice of acceleration of the indebtedness secured by the Loan Documents, presentment and demand for payment), declare the unpaid principal balance of the Note and all accrued but unpaid interest thereon, as well as all other sums owing under the Loan Documents, immediately due and payable, except that Agent and the Lenders may make any advances after the happening of any one or more of said Events of Default without thereby waiving the right to demand payment in full of the Note and such other amounts and without liability to make any other or further advances.
(b)Appointment of Agent as Attorney-in-Fact.  Borrower hereby irrevocably, unconditionally and presently appoints Agent, as agent for the Lenders, as Borrower's attorney-in-fact, with full power of substitution, to be exercised by Agent only upon the occurrence of an Event of Default, to exercise its rights under the Mortgage (in its own name or the name of a designee) for purposes of preserving and protecting the Property or the collateral pledged under the Mortgage; and, as Agent in its sole discretion deems necessary or proper, to execute, acknowledge (when appropriate) and deliver all instruments and documents in the name of Borrower which may be necessary or desirable in order to do any and every act which Borrower might do on its own behalf.  This power of attorney is a power coupled with an interest and is irrevocable.
(c)Cross-Default to Note and Other Loan Documents.  At the option of Agent, any default by Borrower under this Agreement or in the performance of any of Borrower's covenants, agreements or obligations contained herein, shall constitute a default under the Note, the Mortgage or any of the other Loan Documents to the same extent as though the Note had by its own terms become due and payable at maturity and payment thereof had been refused, and in such event Agent, as agent for the Lenders, may, without liability to Borrower, assert and exercise any and all rights and remedies provided for herein or in the Note, 

44

the Mortgage or any of the other Loan Documents or otherwise as may be provided by law.  Such rights and remedies may be asserted concurrently or successively from time to time (either before or after commencement of foreclosure proceedings or before or after the exercise of any other remedy) until the Note, including interest thereon, and all other indebtedness of Borrower under this Agreement and the other Loan Documents, have been paid in full.
18.Joint and Several Liability.  If Borrower is more than one entity, the liability of each Borrower under this Agreement shall be joint and several.
19.Title Endorsements; Tax Searches; Administrative Costs.  From time to time during the term of the Loan, Agent may, at Borrower's sole cost and expense, obtain or require Borrower to obtain, from such person or entity as Agent shall approve, in its discretion, such (a) title insurance endorsements to be attached to the Policy, in form and substance satisfactory to Agent, (b) surveys of the Property, (c) tax and insurance service contracts regarding the Property, and (d) title searches, service contracts or other information regarding Borrower or the Property as Agent deems reasonably necessary.  In connection herewith, Borrower shall be responsible for the payment of all costs incurred by Borrower or Agent in obtaining any of the foregoing including recording fees, attorneys' and accountants' fees, administrative costs and title and other insurance premiums.
20.Miscellaneous.
(a)Notices.  Any notice, election, communication, request, approval or other document or demand required or permitted under this Note shall be in writing and transmitted to the applicable party either by receipted courier service, or by the United States Postal Service, first class registered or certified mail, postage prepaid, return receipt requested, or by electronic facsimile transmission (“Fax”), at the address or addresses indicated for such party below (and/or to such other address as such party may from time to time by written notice designate to the other):

	
		
	To Borrower, as follows:
	JP Aberdeen Partners, LP

	 
	c/o JP Realty Partners

	 
	14801 Quorum Drive, Suite 200

	 
	Dallas, Texas  75254

	 
	Attention:       Mark Jordan
Fax:                (972) 458-7601

	With a copy to:
	 

	 
	Glast, Phillips & Murray, P.C.

	 
	14801 Quorum Drive, Suite 500

	 
	Dallas, Texas  75254

	 
	Attention:        Ira Levy
Fax:                 (972) 419-8329

	To KBS as Agent or a Lender, as follows:
	 

45

	
		
	 
	c/o KBS Capital Advisors LLC

	 
	620 Newport Center Drive, Suite 1300

	 
	Newport Beach, California  92660

	 
	Attention:Brian Ragsdale

	 
	Fax:  (949) 417-6518

	 
	and

	 
	c/o KBS Capital Advisors LLC

	 
	620 Newport Center Drive, Suite 1300

	 
	Newport Beach, California  92660

	 
	Attention: Jeff Rader

	 
	Fax:   (949) 417-6518

	 
	and

	 
	Greenberg Traurig, LLP

	 
	3161 Michelson Drive, Suite 1000

	 
	Irvine, California  92612

	 
	Attention: L. Bruce Fischer and 
Scott A. Morehouse

	 
	Fax :  (949) 732-6501

If to any other Lender to the addresses set forth in Exhibit F attached hereto.
and shall be deemed delivered and received: (A) if delivery is made or Fax transmission completed before 5:00 p.m. recipient's local time on a Business Day, or if tendered for delivery between 9:00 a.m. and 5:00 p.m. recipient's local time on a Business Day and refused, then on the date of such actual or attempted delivery or completed transmission, as evidenced by postal or courier receipt or by the transmission log sheet generated by the sending Fax machine; and otherwise (B) on the Business Day next following the date of actual delivery or completed transmission; provided, however, that any communication by Fax to be effective must be confirmed within three (3) Business Days after transmission by duplicate notice delivered as otherwise provided herein.
(b)Waivers.  No delay or omission of Agent in exercising any right or power arising from any default by Borrower shall be construed as a waiver of such default or as an acquiescence therein, nor shall any single or partial exercise thereof preclude any further exercise thereof or the exercise of any other right or power arising from any default by Borrower.  No waiver of any breach of any of the covenants or conditions of this Agreement shall be construed to be a waiver of or an acquiescence in or a consent to any previous or subsequent breach of the same or of any other condition or covenant.
(c)Agent's Expenses; Rights of Lenders.  Borrower shall promptly pay to Agent, upon demand, with interest thereon from the date of demand at the lesser of (a) the Default Interest Rate or (b) the Maximum Legal Rate of Interest, reasonable attorneys' fees and all costs and other expenses paid or incurred by Agent in enforcing or exercising its rights or remedies created by, connected with or provided for in this Agreement or any of the other Loan

46

Documents, and payment thereof shall be secured by the Mortgage.  If at any time Borrower fails, refuses or neglects to do any of the things herein provided to be done by Borrower, Agent, as agent for the Lenders, shall have the right, but not the obligation, to do the same but at the expense and for the account of Borrower.  The amount of any monies so expended or obligations so incurred by Agent and/or Lenders, together with interest thereon at the lesser of (x) the Default Interest Rate or (y) the Maximum Legal Rate of Interest, shall be repaid to Agent forthwith upon written demand therefor and payment thereof shall be secured by the Mortgage.  As used in this Agreement, the term “Maximum Legal Rate of Interest” shall mean and refer to the maximum non-usurious rate of interest, if any, that may be lawfully contracted for, charged, taken, reserved or received by Agent from Borrower in connection with the indebtedness secured by the Loan Documents and in regard to which Borrower would be prevented successfully from raising the claim or defense of usury under applicable law as now, or to the extent permitted by law, as may hereafter be, in effect (said law permitting the highest rate being referred to in this Agreement as the “Interest Law”).  Unless changed in accordance with law, the applicable rate ceiling under Texas law shall be the indicated (weekly) rate ceiling, from time to time in effect, as provided in Section 303 of the Texas Finance Code, as amended.  It is the intention of Agent and Borrower to conform strictly to the Interest Law applicable to this loan transaction.  Accordingly, it is agreed that notwithstanding any provision to the contrary in this Agreement or in any of the Loan Documents or otherwise relating thereto, the aggregate of all interest and any other charges or consideration constituting interest under applicable Interest law that is taken, reserved, contracted for, charged or received under this Agreement, or under any of the other aforesaid agreements or otherwise in connection with this loan transaction shall under no circumstances exceed the maximum amount of interest allowed by the Interest Law applicable to this loan transaction.  If any usurious interest in such respect is provided for, or shall be adjudicated to be so provided for, in this Agreement or in any of the Loan Documents securing payment of the indebtedness secured hereby or otherwise relating thereto or if any acceleration of the maturity of the indebtedness secured hereby or if any prepayment of said indebtedness results in the payment of any interest in excess of the maximum amount of interest allowed by the applicable Interest Law, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither Borrower nor Borrower's successors or assigns or any other party liable for the payment of the Liabilities shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest allowed by the Interest Law applicable to this loan transaction, (c) any excess shall be deemed a mistake and cancelled automatically and, if theretofore paid, shall be credited on said indebtedness by Agent (or if the Liabilities shall have been paid in full, refunded to Borrower) and (d) the effective rate of interest shall be automatically subject to reduction to the Maximum Legal Rate of Interest allowed under such Interest Law as now or hereafter construed by courts of appropriate jurisdiction.  All sums paid or agreed to be paid the Agent for the use, forbearance or detention of the indebtedness secured hereby shall, to the extent permitted by the Interest Law applicable to this loan transaction, be amortized, prorated, allocated, and spread throughout the full term of said indebtedness until paid in full so that the rate or amount of interest does not exceed the applicable usury ceiling.  Notwithstanding any provision contained in this Agreement or any of the Loan Documents that permits the compounding of interest, including without limitation any provision by which any of the accrued interest is added to the principal amount of the indebtedness secured hereby, the total amount of interest that Borrower is obligated to pay and Agent is entitled to receive with respect to the indebtedness secured hereby shall not exceed the amount calculated on a simple (i.e., non-compounded) interest basis at the Maximum Legal Rate of Interest on principal amounts actually advanced to or for the account of Borrower and any advances made pursuant to the Loan Documents (such as for the payment of taxes, insurance premiums, and the like).  This Section 20(c) shall be applicable to and govern all of the Loan Documents.

47

(d)Agent and Lenders Not Partner of Borrower; Borrower in Control.  Neither the execution nor the performance of any of the Loan Documents by the Agent or the Lenders, nor the exercise by the Agent, as agent for the Lenders, of any of its rights, privileges or remedies conferred under the Loan Documents or under applicable law, shall be deemed to render the Agent or any Lender a partner or a joint venturer with the Borrower, any Guarantor of the Loan or any other person, or to render Borrower an agent of the Agent or any Lender for any purposes.  Nothing contained herein shall characterize or be deemed to characterize, or be used as a basis for characterizing, Agent or any Lender as a “mortgagee-in-possession”.  Agent, Lenders and Borrower agree that Borrower remains in control of the Property, that it determines the business plan for, and employment, management, leasing and operating directions and decisions for, the Property and for Borrower.  All of Agent's rights, and actions taken by Agent as provided or permitted, in or under this Agreement or the other Loan Documents, are for and in its capacity as a secured lender attempting to protect the collateral security for the Loan and to collect the indebtedness and any other amounts owing or outstanding under the Note or the Loan Documents.
(e)No Third Party.  This Agreement is made for the sole benefit of Borrower and Agent and Lenders and each of their successors and assigns, and no other person or persons shall have any rights or remedies under or by reason of this Agreement or any right to the exercise of any right or power of Agent and the Lenders hereunder or arising from any default by Borrower, nor shall Agent and/or the Lenders owe any duty whatsoever to any claimant for labor performed or materials furnished, to apply any undisbursed portion of the Loan to the payment of any such claims.
(f)Time of Essence; Context.  Time is hereby declared to be of the essence of this Agreement and of every part hereof.  When the context and construction so require, all words used in the singular herein shall be deemed to have been used in the plural and the masculine shall include the feminine and the neuter and vice versa.
(g)Successors and Assigns.  This Agreement may not be assigned by Borrower without the prior written consent of Agent and each Lender.  Subject to the foregoing restriction, this Agreement shall inure to the benefit of Agent and each Lender, their successors, assigns and representatives and shall bind Borrower, its successors, assigns and representatives.
(h)Governing Jurisdiction.  This Agreement and all of the other Loan Documents (except as otherwise expressly provided therein with respect to the enforcement of specific remedies) shall be governed by and construed in accordance with the laws of the Governing Jurisdiction without regard to the application of choice of law principles, and Borrower hereby consents to the personal jurisdiction of the state courts of the Governing Jurisdiction and of the United States District Court for the Northern District of the Governing 

48

Jurisdiction in any action that may be commenced by Agent, as agent for the Lenders, to enforce its rights hereunder or under the Loan Documents.
(i)Entire Agreement.  This Agreement, the Notes, and all of the other Loan Documents constitute the entire understanding between the parties hereto with respect to the subject matter hereof, superseding all prior written or oral understandings (including the provisions of that certain Term Sheet delivered to Agent on May 19, 2011, and may not be modified, amended or terminated except by a written agreement signed by Agent and Borrower.  Notwithstanding the foregoing, (i) the provisions of this Agreement are not intended to supersede the provisions of the Mortgage, but shall be construed as supplemental thereto, and (ii) Agent and Lenders shall have the right to modify, amend or terminate in any manner any and all agreements between Agents and Lenders, including without limitation, Sections 25 and 26 hereof, without the consent or signature of Borrower, Guarantor or any other obligors.  Borrower hereby acknowledges that this Agreement and the other Loan Documents accurately reflect the agreements and understandings of the parties hereto with respect to the subject matter hereof and hereby waives any claims against Agent and/or the Lenders which Borrower may now have or may hereafter acquire to the effect that the actual agreements and understandings of the parties hereto with respect to the subject matter hereof may not be accurately set forth in this Agreement or such other Loan Documents.
This Agreement represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.  There are no unwritten oral agreements between the parties.

__________________            /s/ CJS                 
Borrower's Initials                Agent's Initials

(j)Headings.  The various headings of this Agreement are included for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof.
(k)Severability.  Each provision of this Agreement shall be interpreted so as to be effective and valid under applicable law, but if any such provision shall in any respect be ineffective or invalid under such law, such ineffectiveness or invalidity shall not affect the remainder of such provision or the remaining provisions of this Agreement.
(l)Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute but one and the same document.
(m)Waiver of Jury Trial.  BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN 

49

CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF THE LENDER.  BORROWER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE LENDER TO ENTER INTO THIS LOAN AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT, AND THAT THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN.
(n)Including Means Without Limitation.  The use in this Agreement of the term “including”, and related terms such as “include”, shall in all cases mean “including without limitation”.
(o)Sole and Absolute Discretion.  Any option, consent, approval, or discretion or similar right of Agent or any Lender set forth in this Agreement or any of the other Loan Documents may be exercised by Agent or such Lender in its sole, absolute and unreviewable discretion, unless the provisions of this Agreement or the other Loan Documents specifically require such option, consent, approval, discretion or similar right to be exercised in Agent's or such Lender's reasonable discretion.
(p)Replacement Notes.  In connection with the closing of the Loan, Borrower is executing and delivering the Notes.  Thereafter, Borrower shall execute such replacement and substitute Notes (the “Replacement Note(s)”) as may be requested by Agent from time to time to (i) replace the original Note in the event it is lost or misplaced, and (ii) facilitate the assignment by Agent or a Lender of all or part of its rights and obligations under the Loan Agreement; provided, however, such Replacement Note(s) shall in the aggregate total the amount of the Note being replaced, and upon delivery of a Replacement Note, the applicable Lender shall conspicuously mark the face of the Note being substituted (unless such Note has been lost or misplaced) with the following legend: “THIS NOTE HAS BEEN RENEWED AND SUBSTITUTED” and promptly return same to Borrower.
21.Borrower Exculpation.  Except as set forth below or as provided in the Guaranty or the Environmental Indemnity, no trustee, beneficiary, partner, shareholder, director, officer or member of Borrower (other than a Guarantor) or any trustee, beneficiary, partner, shareholder, director, officer or member of a partner, shareholder or member of Borrower (other than a Guarantor), and no legal representative, heir or estate of any of the foregoing shall have any personal liability for (i) the payment of any sum of money which is or may be payable hereunder or under the Loan Documents, including the repayment of the indebtedness evidenced by the Note, or (ii) the performance or discharge of any covenants or undertakings of Borrower hereunder or under any of the Loan Documents.  In the enforcement of any of its rights hereunder, Agent, as agent for the Lenders, shall proceed solely against the assets of Borrower from time to time, and any other collateral given as security for payment of the Note or for payment or performance under the Loan Documents, and shall not seek any deficiency judgment.
(a)Borrower's Recourse Liabilities.  Nothing contained in this Section 21 shall (i) constitute a waiver, release or impairment of the lien of the Mortgage or any obligation evidenced or secured by any of the other Loan Documents; (ii) impair the right of Agent, as agent for the Lenders, to name Borrower as a party defendant in any action or suit under the Mortgage or any of the other Loan Documents; (iii) affect the validity or enforceability of any of

50

the Loan Documents or any guaranty made in connection with the Loan or any of the rights and remedies of Agent, as agent for the Lenders, thereunder; (iv) impair the right of Agent, as agent for the Lenders, to obtain the appointment of a receiver; (v) constitute a prohibition against Agent, as agent for the Lenders, to commence any other appropriate action or proceeding in order for Lender to fully realize the lien and security granted by the Mortgage or the other Loan Documents or to exercise its remedies against all or any portion of the Property.  In addition, nothing in this Section 21 shall be deemed to impede or prejudice the rights of the holder of the Note to recover (including reasonable attorney's fees and costs) against Borrower, for and to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Agent and/or the Lenders (including reasonable attorney's fees and costs) (collectively, the “Losses”) arising out of or in connection with the following (all such liability and obligation of  Borrower for any or all of the following being referred hereto as “Borrower's Recourse Liabilities”) as a result of:
(i)the commission of fraud or any material misrepresentation made in connection with the Loan or under this Agreement or the Loan Documents;
(ii)the misappropriation or misapplication of funds associated with the Property, or failure to apply funds in accordance with the provisions of the Loan Documents, including (i) lease security deposits and prepaid rents, (ii) casualty insurance proceeds and Condemnation Awards, (iii) judgments, settlements or bankruptcy claims for unpaid rent, (iv) Gross Receipts from the Property not applied to payment of Expenses, debt service and other expenditures required by the Loan Documents (provided that Borrower may make distributions to its partners if no Event of Default exists and is continuing and Expenses are paid on a current basis), and (v) the Holdback Funds;
(iii)waste in connection with the Property;
(iv)removal from the Property of any personal property in violation of any of the Loan Documents;
(v)forfeiture of the Property;
(vi)payment by Agent and/or any Lender of any recording, transfer, gains or any other transaction specific taxes, fees or charges assessed in connection with making or foreclosing the Loan, Bankruptcy Proceedings affecting the Loan or the delivery of a deed in lieu of foreclosure or equivalent, and Agent's attorneys' fees and any disbursements incurred in connection with the enforcement of Agent's rights, remedies or recourse under the Loan Documents after default, including foreclosure, bankruptcy or deed in lieu of foreclosure or equivalent;
(vii)the breach of any of the representations and warranties set forth in the Loan Documents;
(viii)the failure to pay for or carry insurance as required by the Loan Documents and the failure to pay real estate taxes and assessments with respect to the Property; or

51

(ix)costs and expenses incurred by Agent in connection with the exercise by Agent, as agent for the Lenders, of its right and remedies under this Agreement and the Loan Documents to the extent incurred as a result of any of the foregoing or the matters and events listed in Section 21(b) below, including, without limitation, any transfer, recordation or other similar taxes payable upon a foreclosure of the Loan.
Notwithstanding anything to the contrary in this Agreement or any of the Loan Documents, neither Agent nor any Lender shall be deemed to have waived any right which any of them may have under Sections 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Indebtedness or to require that all collateral for the Loan shall continue to secure all of the Indebtedness in accordance with the Loan Documents.
(b)Full Liability for all Indebtedness.  In addition to all amounts for which Borrower is personally liable for under Section 21(a), Borrower shall be fully liable to Agent and the Lenders for all Indebtedness (including, without limitation, all Losses incurred by Agent and the Lenders in collecting any of such amounts), and nothing in the Loan Documents shall limit the liability of any Borrower for all Indebtedness (including, without limitation, all Losses incurred by Agent and the Lenders in collecting any of such amounts) and Agent's agreement (as agent for the Lenders) not to pursue the personal liability of any Borrower as set forth above SHALL BECOME NULL AND VOID and shall be of no force and effect and the Indebtedness shall become fully recourse to Borrower in the event one or more of following occurs (each, a “Forbearance Termination Event”):
(i)The rights of Agent and the Lenders are impaired by an intentional act of Borrower or any Affiliate of Borrower, Sole Member or Guarantor;
(ii)Any voluntary bankruptcy or insolvency proceeding of Borrower or any Affiliate of Borrower, Sole Member or Guarantor;
(iii)Borrower or any Affiliate of Borrower, Sole Member or Guarantor commits fraud;
(iv)Borrower or any Affiliate of Borrower, Sole Member or Guarantor violates any of the debt or transfer restrictions set forth in this Agreement and the other Loan Documents;
(v)Borrower's breach or violation of any of the provisions of Section 23 of this Agreement; or
(vi)Borrower or any Affiliate of Borrower, Sole Member or Guarantor files or joins in the filing of an involuntary proceeding against any of Borrower or any Affiliate of Borrower, Sole Member or Guarantor under any provision or chapter of the Bankruptcy Code or any other federal or state law relating to insolvency, bankruptcy or reorganization, or an assignment for the benefit of creditors or any other federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against any of Borrower or any Affiliate of Borrower, Sole Member or Guarantor.

52

(c)The provisions of this Section 21 shall survive the Agent's (or its designee's) (i) acquiring the Property pursuant to the Mortgage or and other Loan Documents (whether by foreclosure, deed in lieu of foreclosure or otherwise) or (ii) enforcement of any of the other rights and remedies under the Loan Documents.  Any amounts required to be paid under this Section 21 shall be payable on demand and shall bear interest from the date of such demand, until paid in full, at the Default Interest Rate.
22.NOTICE OF INDEMNIFICATION.  borrower acknowledges that this agreement provides for indemnification of the indemnified parties by borrower.  except for the gross negligence, willful misconduct, bad faith, fraud or illegal acts of the indemnified parties which shall be excluded from the indemnification of borrower, it is specifically intended by borrower and agent that all indemnity debt and liabilities assumed by borrower hereunder be without limit and without regard to the cause or causes thereof (including preexisting conditions), strict liability, or the negligence of any party or parties (including the indemnified parties) whether such negligence be sole, joint or concurrent, or passive.  the parties specifically intend that the indemnified par ties are to be indemnified against their own negligence, but not their own gross negligence.
23.Special Representations, Warranties and Covenants of Borrower.  Agent's  and each Lender's willingness and ability to make the Loan is contingent upon, among other things, the Borrower being a Special Purpose Bankruptcy Remote Entity.  Therefore, the Borrower hereby represents, warrants and covenants to Agent and the Lenders that Borrower shall at all times be a Special Purpose Bankruptcy Remote Entity.  Borrower shall not directly or indirectly make any change, amendment or modification to its organizational documents, or otherwise take any action which could result in Borrower not being a Special Purpose Bankruptcy Remote Entity.  A “Special Purpose Bankruptcy Remote Entity” shall have the meaning set forth on Schedule 1 hereto.
24.No Withholdings.  All sums payable by Borrower under the Note, this Agreement and the other Loan Documents, shall be paid in full and without set-off or counterclaims  and free of any deductions or withholdings for any and all Taxes.  In the event that Borrower is prohibited by any law from making any such payment free of such deductions or withholdings with respect to Taxes, then Borrower shall pay such additional amount to Agent as may be necessary in order that the actual amount received by Agent and the Lenders after such deduction or withholding (and after payment of any additional Taxes due as a consequence of the payment of such additional amount) shall equal the amount that would have been received if such deduction or withholding were not required; provided, however, that Borrower shall not be obligated to pay such additional amount solely because Agent and/or any Lender, although having a legal basis to do so, fails to deliver to Borrower a duly executed copy of United States Internal Revenue Service Form W-8 BEN or W-9 or any successor form or any required renewal thereof, establishing that a full exemption exists from United States backup withholding tax, and as a result of such failure, Borrower was prohibited by the Code, from making any such payment 

53

free of such deductions or withholding.  Notwithstanding anything contained in this Section 24, in no event will Agent's or any Lender's failure to deliver any such forms, or any renewal or extension thereof, affect, postpone or relieve Borrower from any obligation to pay Base Interest, principal and other amounts due under the Loan Documents (other than amounts due under this Section 24 as a result of Agent's or any Lender's failure to deliver such forms).  Such additional amount shall be due concurrently with the payment with respect to which such additional amount is owed in the amount of Taxes certified by Agent.  A certificate as to the amount of Taxes submitted by Agent to Borrower setting forth Agent's basis for the determination of Taxes shall be conclusive evidence of the amount thereof, absent manifest error.  Failure on the part of Agent to demand payment from Borrower for any Taxes attributable to any particular period shall not constitute a waiver of Agent's right to demand payment of such amount for any subsequent or prior period.
25.Agreement Among Lenders and Agent.
(a)Agent.
(i)Appointment.  Each Lender hereby irrevocably designates and appoints KBS as the Agent of such Lender under this Agreement, the Notes, and the other Loan Documents, and each such Lender irrevocably authorizes Agent, as Agent for such Lender, to take such action on its behalf  under the provisions of this Agreement, the Notes, and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to Agent, by the terms of this Agreement, the Notes, and the other Loan Documents, and such other documents as are executed by and between Agent and Lenders, together with such other powers as are reasonably incidental thereto.  Agent is hereby authorized to execute all Loan Documents (other than this Agreement) on behalf of Lenders.  Borrower is entitled to rely on instructions, consents and approvals given by Agent on behalf of Lenders.
(ii)Agent's Standard.  Agent shall exercise all of its powers, discretion and authority under this Agreement in good faith and in accordance with the same standards which it customarily applies to loans held solely for its own account (the “Agent's Standard”).
(iii)Use of the Term “Agent”.  The term “Agent” is used in the Loan Documents in reference to Agent merely as a matter of custom.  It is intended to reflect only an administrative relationship between Agent and Lenders as independent contracting parties.  In no event shall the use of such term create or imply any fiduciary relationship or any other obligation arising under the general law of agency.  Notwithstanding any provision to the contrary elsewhere in this Agreement, Agent shall not have any duties or responsibilities, except those expressly set forth herein or in any other documents signed by and between Agent and the Lenders, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or other document as otherwise exist against Agent in such capacity.
(iv)Delegation of Duties.  Agent may execute any of its duties under this Agreement and the other Loan Documents or any other document by and between Agent and Lenders by or through a servicer, agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  Agent shall not be responsible for the 

54

negligence or misconduct of any servicer, agents or attorneys-in-fact selected by it with reasonable care.
(v)Reliance by Agent.  Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, facsimile, e-mail, statement, order or other document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper person or entity and upon advice and statements of legal counsel (including, without limitation, counsel to Borrower, Guarantors, or other obligors), the independent accountants and other experts selected by Agent.  Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with Agent.  Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the Notes and the other Loan Documents in accordance with a request of Required Lenders or all Lenders, to the extent required, and such request and any action taken or failure to act pursuant thereto shall be binding upon all Lenders and all future holders of the Notes.
(vi)Agent in Individual Capacity.  Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with Borrower, Guarantors, or other obligors, as though Agent was not Agent hereunder and under the other Loan Documents.  With respect to Agent, the Loan made by Agent or its affiliate and the Notes issued to Agent or its affiliate shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and Agent may exercise the same as though it were not Agent.  The terms “Lender” and “Lenders” shall include Agent in its individual capacities.  Agent may accept deposits from, lend money to, and generally engage, and continue to engage, in any kind of business with Borrower, any Guarantor, or other obligors as if Agent were not an agent hereunder.
(vii)Resignation or Removal.  Agent may resign as Agent upon thirty (30) days' notice to Lenders and Borrower.  Required Lenders may remove Agent by a vote of the Required Lenders for Agent's gross negligence or willful misconduct.  If Agent shall be removed or if Agent shall resign as Agent under this Agreement and the other Loan Documents, then Required Lenders shall appoint from among Lenders (unless otherwise agreed by all Lenders), a successor agent for Lenders and shall promptly notify Borrower in writing, whereupon such successor agent shall succeed to the rights, powers and duties of Agent and the term “Agent” shall mean such successor agent, effective upon its appointment, and the former Agent's rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement or any holders of the Notes.
(viii)Successor Agent.  After any retiring Agent's removal or resignation as Agent, the provisions of this Section 25 shall inure to the benefit of the Successor Agent as to any actions taken or omitted to be taken by it while it was Agent, under this Agreement and the other Loan Documents.
(b)Agent's Authority and Powers; Required Lender Approvals.

55

(i)Powers Granted to Agent.  Agent, acting on behalf of itself and Lenders and without notice to Lenders, but subject to the limitations contained herein, shall have the right and power to take such actions as may be desirable or necessary to carry out the routine, day to day administration of the Loan Documents, including, without limitation, the following:
(1)to administer, control, manage and service the Loan;
(2)to review and approve Requests for Advances;
(3)except as set forth in Section 25(b)(ii), below, to give routine consents, approvals or waivers in connection with any term, provision or condition of any Loan Document or Lease relating to the Project, subject to the terms of the Loan Documents;
(4)except as set forth in Section 25(b)(ii), below, to make all decisions under the Loan Documents in connection with the day to day administration of the Loan, including, without limitation, approval of inspections and other routine administrating and servicing matters; and
(5)to collect and receive from Borrower or any third persons all Loan Recoveries (as hereinafter defined) and other payments due under the Loan Documents (except such payments as may be made directly to Lenders under the terms of the Notes).
(ii)Limitations on Agent's Actions.
(1)Unanimous Consent.  Without the prior written consent or approval of each Lender, Agent shall not:  (A) reduce the interest rate of the Notes (except as provided in this Agreement) or otherwise reduce the amount of payment of any fee, principal or interest payable under the Notes or this Agreement (except waiver or reduction of late fees and interest at the Default Interest Rate which shall only require Agent's approval); (B) forgive, or postpone payment of, or waive any default under the Loan Documents in connection with the payment of principal or interest due under the Notes, this Agreement or any other Loan Document (except waiver or reduction of late fees and interest at the Default Interest Rate which shall only require Agent's approval); (C) increase the amount of the Aggregate Commitment or any Lender's Commitment; (D) extend the Initial Maturity Date or the date of any interest payment thereunder, except as specifically provided in this Agreement; (E) release, partially or fully, any material collateral given as security for the Loan, except as specifically provided in this Agreement; (F) release, partially or fully, any Guarantor, except as provided in the Loan Documents; (G) consent to or accept any cancellation or termination of any Loan Document; (H) agree to a transfer or termination of an instrument now or hereafter assigned to it as security for the Loan; or (I) change the definition of Required Lenders or change the requirement for the approval of Required Lenders or all Lenders to certain actions of Agent, as provided herein.
(2)Required Lenders' Consent.  Without the prior written consent or approval of the Required Lenders, Agent shall not: (A) exercise any remedies under the Loan Documents, including, without limitation, foreclosing the lien of the Mortgage and submitting a bid at the foreclosure sale; (B) waive one or more Events of Default specified in the Loan Documents (except as provided in Section 25(b)(ii)(1)(B)); (C) agree to accept a deed in lieu of foreclosure to the Property (or other similar arrangement); (D) waive or amend any 

56

provisions of Sections 16 or 25 of this Agreement; (E) apply insurance proceeds or condemnation awards in any manner other than as required or permitted under the Loan Documents; or (F) consent to any subordinate financing, except as permitted by the Loan Documents.  Notwithstanding the foregoing, Agent, in its discretion, may deliver to Borrower and Guarantors notices of default and demands for payment or performance of their obligations under the Loan Documents and accelerate the maturity of the Loan at any time after the occurrence of any Event of Default.  Agent shall deliver copies of such notices and demands to Lenders.
(3)Requests for Approval.  Agent shall provide written notice to Lenders of any proposed action requiring their approval under this Agreement, together with such background information as is in Agent's possession with respect to the proposed action.  Lenders shall promptly consider in good faith, whether to approve or disapprove of any proposed action that is the subject of any such notice.  A proposed action shall be deemed approved by a Lender if such Lender does not provide a response with the reason or reasons why it does not approve of the proposed action within seven (7) Business Days after receipt of the written notice from Agent proposing such action; provided that any such request for approval shall prominently state that such approval shall be deemed given if no response is given within such seven (7) Business Day period.  
(4)Purchase Option.  If a Lender responds in the negative to such a request for approval, and if the action requires unanimous approval of Lenders under Section 25(b)(ii)(1) hereof and such unanimous approval cannot be agreed upon within an additional ten (10) Business Days after the initial seven (7) Business Day period, then Agent or any Lender that is in agreement with the proposed action and that wishes to do so, shall have the right (but not the obligation) to purchase such dissenting Lender's Commitment Percentage in the Loan at par value plus accrued interest and other amounts due to such Lender (other than late fees and interest at the Default Interest Rate).  If more than one Lender elects to purchase the dissenting Lender's Commitment Percentage in the Loan, then all such Lenders shall purchase the same, on a pro rata basis calculated based on their respective Commitment Percentages.  Agent and any other Lender which elects to purchase a dissenting Lender's Commitment Percentage shall notify such dissenting Lender in writing within ten (10) days after the expiration of the foregoing periods.  Such dissenting Lender shall then have five (5) Business Days after receipt of such written notice to approve the contested action.  If the dissenting Lender shall not approve such action and if another Lender elects to purchase the dissenting Lender's Commitment Percentage, then the purchase of its interest shall be closed by payment in cash to the dissenting Lender of the amount described above within forty-five (45) days after the election to do so is made.  At the Closing of the sale, the selling Lender shall assign to the purchasing Lender(s) its entire interest in the Loan, the Loan Documents and its Note, but such sale shall be without recourse, representation or warranty to the selling Lender and the selling Lender shall thereafter have no further obligation or liability hereunder.
(c)Defaulting Lenders.
(i)If any Lender fails to fund such Lender's Commitment Percentage of a Request for Advance that has been approved by Agent as provided in this Agreement, or any other amount due in accordance with this Agreement within five (5) Business Days after written 

57

demand therefor from Agent to Lender, then such Lender (the “Defaulting Lender”) shall be in default hereunder.
(ii)Upon any default by a Defaulting Lender as described in Section 26(c)(i) above, any Lender, by written notice to Agent at such Lender's sole option, may (but shall not be obligated to) fund such amounts on behalf of such Defaulting Lender.  If more than one Lender elects to fund a Defaulting Lender's share then each such Lender shall fund on a pro rata basis, based on their respective Commitment Percentages, and shall be entitled to reimbursement from the Defaulting Lender on demand of the amount so funded.  If such reimbursement is not made on demand, then until such time as full reimbursement is received, the Lender or Lenders that are entitled to the reimbursement shall be entitled to receive the next moneys becoming payable to the Defaulting Lender in order to recover such reimbursement.  Whether or not a Lender funds such amounts on behalf of such Defaulting Lender, the following provisions shall apply:
(1)Subject to the right of a Lender which has funded the Defaulting Lender's Commitment Percentage to reimbursement thereof as provided above, Agent may, but shall not be obligated to, withhold and apply any and all amounts payable to the Defaulting Lender pursuant to this Agreement in such order of priority as Agent shall determine, in its sole discretion:  (A) to fund the Defaulting Lender's Commitment Percentage of any Request for Advance which the Defaulting Lender is obligated to fund pursuant to the Loan Documents and this Agreement, and (B) to reimburse Agent for the Defaulting Lender's Commitment Percentage of any costs, expenses or disbursements incurred or made by Agent pursuant to this Agreement; and
(2)Agent may exercise any combination or all of the remedies set forth above, or any other remedies available at law or in equity.
(iii)The right of a Defaulting Lender to consent, approve or disapprove of any matter under this Agreement or otherwise in connection with the Loan or the Property, or receive payments from Agent, or exercise the rights granted herein to purchase the interest of Lenders in the Loan, or to fund the Commitment Percentage of another Defaulting Lender, shall be suspended during the period such Lender is in default hereunder (the “Suspension Period”).  During any Suspension Period, the Commitment Percentage of each Lender shall be recalculated, solely for purposes or consenting, approving or disapproving of any matter under this Agreement or otherwise in connection with the Loan or the Project or to receive payments from Agent, to proportionately increase each Lender's Commitment Percentages as if the Defaulting Lender did not have an interest in the Loan.  Such recalculation shall not increase the Commitment Percentage of any non-defaulting Lender for the purposes of funding Advances, except to the extent that a non-defaulting Lender has agreed to fund the Defaulting Lender's share of such Request for Advance or other payment due.
(iv)Any of the following shall constitute a default by a Lender under this Agreement:  If a Lender shall fail to cure any default under Section 25(c)(i) of this Agreement within thirty (30) days after written notice thereof from Agent, or if Agent is in default, from another Lender, or if any proceeding is commenced which involves the dissolution, termination of existence, insolvency or business failure of any Lender, or the appointment of a 

58

receiver for any part of the property of a Lender, or the assignment for the benefit of creditors of a Lender or any proceeding is commenced under any Bankruptcy or insolvency law, state or federal, by or against a Lender. Upon the occurrence of any such default, in addition to all other remedies available at law or in equity, any Lender that is not in default hereunder that elects to do so, shall have the right (but not the obligation) to purchase on a pro rata basis, based upon their respective Commitment Percentages, the interest in the Loan owed by such Lender in default, at par value plus accrued interest and any other amounts due to such Lender (other than late fees and interest at the Default Interest Rate).  Any such purchase by a Lender shall be completed within forty-five (45) days after the election to do so is made.  At the closing of the sale, the selling Lender shall assign to the purchasing Lender(s) its entire interest in the Loan, the Loan Documents and its Note but such sale shall be without recourse, representation or warranty to the Lender whose interest in the Loan is being purchased and thereafter, such selling Lender shall have no further obligation or liability hereunder.  Any Lender not in default shall also each have the right to maintain an action for specific performance against the Defaulting Lender to enforce their rights under this Agreement unless Agent has elected to undertake such action on behalf of the non-defaulting Lenders.
(d)Non-Reliance on Agent and Other Lenders.  Each Lender expressly acknowledges that neither Agent nor any officer, director, employee, agent, attorney-in-fact or affiliate thereof has made any representations or warranties to it and that no act taken by Agent hereafter, including any review of the affairs of Borrower or any Guarantor, or other obligor shall be deemed to constitute any representation or warranty by Agent to any Lender.  Each Lender represents to Agent that it has, independently and without reliance upon Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of Borrower, Guarantors, and other obligors, and made its own decision to make its Commitment Percentage of the Loan and enter into this Agreement.  Each Lender also represents that it will, independently and without reliance upon Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of Borrower, Guarantors, Obligors and other obligors.  Each Lender assumes all risk of loss in connection with its interest in the Loan.  Without limiting the generality of the foregoing, Agent shall not in any way be responsible for:  (a) the accuracy of any information given or to be given to Lenders by or on behalf of Borrower or any Guarantor; (b) the validity, enforceability or legal effect of any of the Loan Documents; (c) any title insurance policies furnished to Agent by Borrower or any other party or the validity or effectiveness of the examination thereof; (d) the solvency or creditworthiness of Borrower or any Guarantor or the collectability of the Loan; (e) the value of any collateral given to secure the Loan; (f) any recitals, representations, or warranties contained in, or for the execution, validity, genuineness, effectiveness, or enforceability of any Loan Document or any other instrument or document delivered hereunder or in connection herewith; or (g) the validity, genuineness, perfection, effectiveness, enforceability, existence, value, or enforcement of any collateral.
(e)Collections; Disbursements To Lenders.

59

(i)Collections of Payments by Agent.  Each Lender's interest under the Loan shall be payable solely from payments, collections and proceeds actually received by Agent under the Loan Documents; and Agent's only liability to a Lender with respect to any such payments, collections or proceeds shall be to account for such Lender's Commitment Percentage thereof in accordance with this Agreement.  Agent shall have the exclusive right to collect sums on account of the Loan, including, without limitation, protective advances, fees, prepayment premiums (if any), and repayment of advances in excess of the face amount of the Loan, whether such sums are received directly from Borrower or any other persons, or as amounts payable by Agent's enforcement of its security interests, exercise of the right of offset by Agent of any kind against the deposits, accounts, moneys, or other property of Borrower deposited at or held by Agent, or by reason of total or partial condemnation or taking by governmental authority, proceeds or recoveries under insurance policies collected and not applied to repair and restore the Project, payment and performance bonds (if any), title insurance policies, amounts realized by reason of any sale or operation of the collateral for the Loan or enforcement of the Loan Documents (all collectively, the “Loan Recoveries”).
(ii)Distribution of Payments.  Whenever Agent receives a payment of any Loan Recoveries in connection with the Loan to which a Lender is entitled to its Commitment Percentage, Agent shall promptly pay to such Lender its Commitment Percentage thereof, subject to the provisions of Section 25(c) above.  If payment is received by Agent before 1:00 p.m. Pacific time on any Business Day, Agent shall pay Lenders on the next Business Day.  If any such payment is received by Agent after 1:00 p.m. Pacific time, Agent shall pay Lenders before the end of the second Business Day following receipt by Agent.  For purposes of the foregoing, funds shall be deemed “paid” to Lenders if Agent receives a confirmation number from the Federal Reserve.  Agent shall not be required to remit to Lenders any amount not actually collected by Agent, whether or not the Loan is then in default.
(iii)Standard of Care.  Agent will hold the Loan Documents (other than each individual Lender's Note) and perform all of its obligations under each provision of this Agreement in accordance with Agent's Standard. Agent will receive and hold all receipts and collections with respect to the Loan for the benefit of each Lender in accordance with its respective Commitment Percentage, subject to the provisions of Section 25(c) above.  Agent's relationship to Lenders shall be that of an independent contractor and Agent is not a partner, employee or joint venturer of Lenders and shall have no fiduciary obligations to Lenders.
(iv)Repayment.  If claim is ever made upon Agent for repayment of any amount or amounts received by Agent in payment of the obligations under the Loan Documents following distribution to Lenders (whether or not all or any part of such payment is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid by Agent) and Agent repays or is obligated to repay all or any part of said amount, then, notwithstanding any revocation or termination of this Agreement or the cancellation of any Note or any other instrument evidencing the Loan; Lenders shall promptly pay over to Agent their Commitment Percentages of the amount so recovered, returned or to be paid over, together with their Commitment Percentages of any interest or other amount that Agent is required to pay in connection with such recovery.

60

(v)Application of Loan Recoveries.  All Loan Recoveries received by Agent in connection with the Loan or the Loan Documents shall be applied by Agent as set forth herein.
(f)Borrower's Default.
(i)Notice of Borrower's Default.  Each Lender shall notify Agent, and Agent shall notify each Lender, within five (5) Business Days after acquiring actual knowledge of any Event of Default under the Loan Documents or any event which, with the lapse of time or giving of notice, or both, would constitute an Event of Default under the Loan Documents.  Agent shall have no duty to inquire into any performance or failure to perform by Borrower and shall not be deemed to have knowledge of the occurrence of an Event of Default unless Agent has received notice from a Lender or Borrower specifying the occurrence of such Event of Default.  Agent is entitled to assume that no Event of Default or event or omission which, with the giving of notice or lapse of time, or both, would constitute such an Event of Default, has occurred and is continuing unless Agent (i) has actual knowledge of such Event of Default or event, or (ii) has been notified by a Lender in writing that the Lender considers that such an Event of Default or event or omission has occurred and is continuing and specifies the nature thereof.  Such notice shall be given in accordance with Section 20(a) hereof.
(ii)Consultation and Remedies.  Agent shall promptly consult with Lenders regarding the actions to be taken in response to an Event of Default, and the applicable provisions of Section 25(b)(ii) hereof shall govern the consent by Agent and Lenders to the action to be taken in response to such Event of Default.  If a vote of the Required Lenders fails to establish a course of action to be taken in response to such Event of Default as provided in Section 25(b)(ii)(2) above, then the course of action taken shall be deemed to be forbearance until the earlier to occur of (i) the date an alternate course of action is decided upon by Required Lenders, or (ii) 30 days after the date the Event of Default has been declared, in which event Agent may begin to exercise its remedies as Agent (for the benefit of Lenders) under the Loan Documents including, without limitation, the exercise of the power of sale under the Loan Documents.  Notwithstanding the consent provisions of Section 25(b)(ii) or the consultation requirement of this Section 25(f)(ii), Agent shall have the right at any time to take such actions as Agent believes in good faith must be taken immediately without an opportunity for consultation with Lenders in order to protect and preserve the value of any security held for the Loan.  Each Lender shall be liable for that Lender's Commitment Percentage of all costs and expenses incurred by Agent in analysis and exercise of Agent's rights and remedies under the Loan Documents, as provided in Section 25(k).
(iii)Purchase Right.  In addition to the rights provided for under the foregoing provisions of this Section 25(f), if at any time the Required Lenders are not in agreement as to a course of action to be taken in response to an Event of Default, then Agent, and any Lender that is in agreement with the course of action favored by Agent and that wishes to do so, shall have the right in its sole discretion (but not the obligation) to purchase the interest in the Loan of any Lender that is not in agreement with the course of action favored by Agent, at par value plus accrued interest and other amounts, due to such Lender.  If more than one Lender elects to purchase the dissenting Lender's Commitment Percentage in the Loan, then all such Lenders shall purchase the same on a pro rata basis based on their respective Commitment 

61

Percentages.  Any such purchase shall be completed within forty-five (45) days after the election to do so is made.  At the closing of the sale, the selling Lender shall assign to the purchasing Lender(s) its entire interest in the Loan, the Loan Documents and its Note, but such sale shall be without recourse, representation or warranty to the Lender or Lenders whose interest or interests in the Loan are being purchased and thereafter, such Lender(s) shall have no further obligation or liability hereunder.
(iv)Advances and Reimbursements.  If Borrower fails to pay taxes, assessments, insurance premiums or any other charges or expenditures for which Borrower is responsible or liable under the Loan Documents, Agent may, but shall not be required to, advance the amount necessary to make such payments.  Each Lender shall, immediately upon demand, reimburse Agent for such Lender's Commitment Percentage thereof pursuant to Section 1.11.  Agent shall use reasonable efforts to recover from Borrower all advances and expenses that are the obligation of Borrower under the Loan Documents, but making such efforts shall not be a precondition to Lenders' reimbursing Agent promptly.
(v)Ownership of the Property.  If the Required Lenders elect (or Agent has the right to under Section 25(f)(ii) above) to take title to the Property, whether by the exercise of remedies under the Loan Documents or by a consensual agreement with Borrower or otherwise, then in the absence of any alternate structure selected by vote of the Required Lenders, Agent, as agent for the Lenders, shall form a limited liability company (the “Ownership LLC”) to hold such ownership interest in the Property.  The Managing Member of the LLC shall be Agent (the “Managing Member”).  The member interests in the Ownership LLC shall be held by Agent and Lenders (or their designees or affiliates) in accordance with their respective Commitment Percentages.  The Operating Agreement for the Ownership LLC shall have terms and provisions similar to this Agreement with respect to the ownership and administration of the Property.  Agent shall have a right to resign as Managing Member, and Agent and Lenders shall have the right to remove Agent as Managing Member for cause only under the same terms and conditions as are required for removal or replacement of Agent under Section 25(a)(vii).  Agent and Lenders shall have voting control of the Ownership LLC in accordance with their respective Commitment Percentages.  Agent and each of the Lenders shall enter into a contribution agreement pursuant to which Agent and each Lender shall agree to (i) fund all amounts due from it or from its affiliates in connection with the Ownership LLC with respect to the Property, and (ii) guaranty any indemnities made by its affiliate in connection with the Ownership LLC.  Notwithstanding the foregoing, in the event that Agent determines that, to protect the collateral securing the Loan, title to the Property must be transferred for the benefit of Lenders before the ownership structure described above can be completed, then Agent shall have the right to elect to take title to the Property in its own name or in the name of its wholly-owned affiliate, on behalf of itself and each Lender, and thereafter, transfer title to the Ownership LLC as soon as reasonably practicable.  The specific terms and provisions of the (A) agreements, instruments, certificates, articles and other documents evidencing, governing and creating the Ownership LLC, and (B) any other agreements with a third-party corporation or management company shall be subject to the approval of Lenders and Agent by vote of the Required Lenders.  If the terms and provisions of any such agreements are so approved and are not inconsistent with the provisions of this Agreement, all Lenders shall join in executing and delivering such agreements, instruments, certificates, articles and other documents and abide by the terms thereof.

62

(g)Retention of Counsel.  If, in Agent's judgment, attorneys should be retained for the administration of the Loan or the Property or the protection of the interests of Agent and Lenders, including, without limitation, in connection with actual or threatened litigation, Agent may, following written notice to Lenders, employ counsel to represent Agent and Lenders.  Agent shall seek to cause Borrower to pay the fees and expenses of such counsel in accordance with other terms of this Agreement and the other Loan Documents, but Lenders shall pay their respective Commitment Percentages of such reasonable fees and expenses to Agent immediately upon request pursuant to Section 25(k) hereof, whether or not Agent has sought or received reimbursement from Borrower.  If Agent later receives reimbursement therefor from Borrower, Agent shall return Lenders' respective Commitment Percentages, without interest (unless such interest is actually paid by Borrower), to Lenders.  Each Lender shall have the right to retain counsel on its own behalf and at such Lender's sole cost and expense, in connection with any matters pertaining to the Loan.
(h)Interest in Loan Documents.
(i)Proportional Interest.  Each Lender shall, upon funding its share of an Advance, become vested with its Commitment Percentage of the Advance without the necessity of any written instrument of assignment or document.  Upon such funding, the respective interests of each Lender in the Loan Documents shall be of equal priority with one another, except as otherwise expressly provided in this Agreement. If Agent or its designee acquires an ownership interest in any of the collateral for the Loan due to the foreclosure or other realization of any security interest in or lien granted by any of the Loan Documents, each Lender shall have an interest in such ownership interest in such collateral equal to its Commitment Percentage in the Loan, notwithstanding that title is taken in the name of Agent or its designee alone.
(ii)Documents and Third Parties.  All original Loan Documents, other than each individual Lender's Note, shall be held by Agent in its customary fashion in accordance with Agent's Standard.  Agent is authorized to retain the Loan and the Loan Documents in Agent's own name, and, as to parties other than Lenders, to deal with such parties as though an absolute owner of the Loan and the Loan Documents.  Lenders hereby authorize any third person, without inquiry as to whether any action by Agent is authorized hereunder, to deal with Agent concerning the Loan in the same manner as if Lenders' interests were not outstanding and Agent were the sole owner of the Loan.
(iii)Other Collateral.  Agent holds for its own and Lenders' proportional benefit all collateral described in the Loan Documents which secures the performance and payment of Borrower's obligations and liabilities under the Loan.  Lenders, however, shall have no interest in any (i) other property taken as security for any credit, loan or financial accommodation made or furnished to Borrower, any Guarantor or any of their affiliates by Agent, other than the Loan; (ii) property now or hereafter in Agent's possession or under Agent's control other than by reason of the Loan or the Loan Documents; or (iii) deposits or other indebtedness which may be or might become security for performance or payment of any of Borrower's or any Guarantor's obligations and liabilities under the Loan Documents by reason of the general description contained in any instrument other than the Loan Documents held by Agent or by reason of any right of setoff, counterclaim, Lender's lien or otherwise.  

63

Likewise, Agent shall have no interest in any property or deposits of Lenders, as described in clauses (i)-(iii) above.  If, however, such property, deposit, indebtedness or the proceeds thereof shall actually be applied to the payment or reduction of principal, interest, fees, commissions or any other amounts owing by Borrower to Agent in connection with the Loan, then each Lender shall be entitled to that Lender's Commitment Percentage of the amounts so applied to the Loan, subject to Section 25(c).
(i)Bookkeeping Entries.  Each Lender shall record in its financial records the amount of its undivided interest in the Loan and its participation in Agent's right and obligations in connection with the Loan.  Agent shall record in its financial records the existence of the undivided interests of Lenders in the Loan.
(j)Information and Copies to Lenders.  Agent shall from time to time, promptly after receipt thereof, furnish to Lenders copies of material documents, notices and non-oral financial information received from Borrower or sent by Agent to Borrower regarding the Loan, the Loan Documents and the transactions contemplated thereby.  Upon written request, Agent will promptly provide to Lenders from time to time such material information regarding the Loan as is then available to Agent which Lenders may reasonably request and which has not previously been so furnished to Lenders.  Agent shall have no responsibility with respect to the authenticity, validity, accuracy or completeness of the information provided by Borrower or any other party.  Lenders agree and acknowledge that Agent need not provide copies of or information pertaining to confidential Lender examiner's reports, including any classification of Borrower or the Loan by an examiner.  Upon reasonable advance written notice, Lenders may, at their expense, inspect and copy, during normal business hours, Agent's books and records specifically and solely relating to collections, disbursements, costs and expenses under the Loan.
(k)Reimbursement for Costs and Expenses.
(i)Agent's Right to Reimbursement.  All payments, collections and proceeds received or effected by Agent may be applied first to pay or reimburse Agent for all reasonable costs and expenses at any time incurred by or imposed upon Agent in connection with this Agreement or any other Loan Document (including, but not limited to, all reasonable attorney's fees, including allocated costs of in-house counsel), foreclosure expenses and advances made to protect the security of any collateral, but excluding any costs, expenses, damages or liabilities arising from the gross negligence or willful misconduct of Agent.  Each Lender shall, within ten (10) Business Days after demand, indemnify and reimburse Agent for such Lender's Commitment Percentage of any and all costs and expenses, including, without limitation, reasonable attorneys' fees and expenses, title insurance and foreclosure costs, costs of consultants, court costs and disbursements (collectively, “Administrative Costs”) which may be incurred or paid by Agent under or in connection with actions taken by Agent in connection with the Loan or any of the Loan Documents, or in any action taken by Agent to collect the liabilities created under or in connection with the Loan or any Loan Document or to enforce or protect any collateral for any such liabilities, for which Agent has not previously been reimbursed by or on behalf of Borrower, which actions are permitted by the terms of the Loan Documents.  All such payments and reimbursements by Lenders shall be made to Agent in immediately available funds in Newport Beach, California.  However, if Agent later is reimbursed by Borrower or any obligor for any such expenses, Agent shall immediately reimburse each Lender according to each 

64

Lender's Commitment Percentage.  Each Lender shall have the right to review a full and complete accounting of Administrative Costs incurred by Agent promptly upon request therefor.
(ii)Collection from Defaulting Lender.  Any and all costs, expenses and disbursements (including, without limitation, reasonable attorneys' fees and other legal  expenses) incurred by Agent or a Lender in any effort to collect any amounts payable under this Agreement from Defaulting Lender shall be paid by the Defaulting Lender against which such collection efforts are taken, immediately upon demand.  If suit is filed by Agent or a Lender in connection with such collection efforts, the party prevailing in such suit shall be entitled to an award of attorneys' fees and costs, in addition to all other awards.
(iii)Legal Fees.  Except as otherwise provided in Section 25(k)(ii), neither Agent nor Lenders are responsible for any other party's attorney's fees or any other expenses in connection with the negotiation and execution of the Loan Documents or this Agreement, or any disputes among Agent and/or Lenders.  In the event a Lender, other than Agent acting in its capacity as Agent pursuant to Section 25(g), shall retain counsel, consultants or accountants or incur any expenses in connection with the Loan, the Loan Documents or this Agreement, such fees and expenses shall be paid by such Lender alone.
(iv)Recovery of Expenses from Payments and Proceeds.  If Agent does not receive payments, collections or proceeds sufficient to cover any such costs and expenses within five (5) days after their incurrence or imposition from Borrower or Guarantor, each Lender shall, upon demand, remit to Agent such Lender's Commitment Percentage of the difference between (i) such costs and expenses and (ii) such payments, collections and proceeds, together with interest on such amount for each day following the tenth (10th) day after demand therefor until so remitted at a rate equal to the Federal Funds Effective Rate for each such day.  The foregoing provision is intended only to set forth certain rules for the application of payments, proceeds and collections in the event that a Lender has breached its obligations hereunder and shall not be deemed to excuse any Lender from such obligations.
(l)Payments Received Directly by Lenders.  If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise) on account of any Note or on account of any fees under this Agreement in excess of such Lender's Commitment Percentage, such Lender shall promptly give notice of such fact to Agent and shall promptly remit to Agent such amount as shall be necessary to cause the remitting Lender to share such excess payment or other recovery ratably with each Lender in accordance with their respective Commitment Percentages together with interest for each day on such amount until so remitted at a rate equal to the Note Rate (but not the Default Interest Rate) for each such day; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such Lender or holder, the remittance shall be restored to the extent of such recovery.
(m)Borrower not a Beneficiary or Party.  The provisions and agreements in this Section 25, and the provisions of Section 26 are solely among Lenders and Agent and Borrower shall not be considered a party thereto or a beneficiary thereof.

65

(n)Indemnification.  Each Lender hereby agrees to indemnify and hold Agent harmless from and against each Lender's Commitment Percentage of any and all loss, cost, liability, damage, penalty, action, suit and expense (including reasonable attorneys' fees and other legal expenses) which may be imposed upon, asserted against, paid or incurred by Agent (except to the extent that the same arises from Agent's gross negligence or willful misconduct) at any time and from time to time in connection herewith, including, without limitation, (a) the prosecution or defense of any suit relating to or arising out of the Loan Documents, (b) any default by a Lender under this Agreement, or the Ownership LLC, (c) the exercise of Agent's right pursuant to Section 25(f)(v) hereof to acquire title to the Property in Agent's name or in the name of Agent's wholly-owned affiliate on behalf of the Lenders, (d) any matter related to its capacity as Agent; and (e) any matter relating to or arising out of this Agreement, or any of the Loan Documents, or any documents contemplated therein or herein.  Each Lender's obligations to Agent under this Section 25(n) shall include, without limitation, Agent's being held liable to Borrower or any third party for breach of any duty or obligation, either express or implied, in contract or otherwise, including alleged wrongful termination of the Loan, improper collection and enforcement actions and interference or involvement in Borrower's business activities.  If the indemnity provided by this Agreement shall become impaired, Agent may require an additional indemnity from the Lenders and may cease to perform the acts with respect to which the indemnity is impaired until such additional indemnity is received.  So long as any indemnification obligations of a Lender to Agent pursuant to this Agreement are outstanding, this Agreement shall not terminate.  Notwithstanding anything contained herein to the contrary, this indemnity is not intended to excuse Agent from failing to perform hereunder in accordance with Agent's Standard.
(o)Exculpation of Agent.  Neither Agent nor any of its shareholders, directors. officers, employees or agents shall be liable to Lenders for any obligation, undertaking, act or judgment of Borrower or any other person, or for any error of judgment or any action taken or omitted to be taken by Agent (except and only to the extent that the same arises from the gross negligence or willful misconduct of Agent), or be bound to ascertain or inquire as to the performance or observance of any term of any Loan Document.  Without limiting the generality of the foregoing, and subject thereto, Agent (a) may consult with legal counsel, accountants, financial advisers and other consultants and experts selected by Agent and shall not be liable for any action taken or omitted to be taken in good faith in accordance with the advice of such counsel and advisers; (b) makes no warranty or representation and shall not be responsible for any warranty or representation made in or in connection with any Loan Document, or for the financial condition of Borrower, any Guarantor or any other person, or for the value of any collateral, or for the observance or performance of any obligations of Borrower, any Guarantor or any other person or entity; and (c) makes no warranty or representation and shall not be responsible for the due execution, validity, enforceability, genuineness, sufficiency or collectability of any of the Loan Documents.  
(p)Authorization and Enforceability Representations.  Agent and Lenders each hereby represents to the other parties hereto that (a) all necessary corporate and other action has been taken to authorize it to execute, and to perform its obligations under, this Agreement, and (b) this Agreement is binding and enforceable against it.

66

(q)Assignment by Lenders.  Lenders shall not be authorized to assign their respective rights and obligations under the Loan Documents and this Agreement except in accordance with Sections 26 and 27 of this Agreement, as applicable.
(r)Other Transactions between Lenders and Borrower.  Agent and the Lenders and their respective affiliates may accept deposits from, lend money to, act as trustee under indentures for and generally engage in any kind of business with Borrower and its subsidiaries, owners, partners and affiliates (collectively, “Borrower's Affiliates”) and any person who may do business with or own interests in any of them.  Neither Agent nor Lenders shall have any interest in any property taken as security for any other loans or any credits extended to Borrower or any of Borrower's Affiliates by Agent or Lenders, respectively, other than pursuant to the Loan Documents.  Nothing herein shall in any manner be deemed to limit or preclude the right of Agent to enter into any such other arrangements or to exercise any rights or remedies available in connection therewith, including the exercise of any right of set-off or other rights available as a matter of law.
(s)Effect of Agreement and Relationship of Parties.  This Agreement is not intended to constitute, and shall not be construed to establish, a partnership or joint venture between Agent and Lenders.  Agent will have no obligation or responsibility to any Lender except as specifically stated herein, and Agent shall not have a fiduciary duty of any kind to any Lender.  The execution of this Agreement, the performance of the terms or provisions hereof and the performance or exercise of any obligations or rights pursuant hereto (including Lenders' purchase of and ownership interest in the Loan and the Loan Documents) shall not constitute Lenders as owners, holders, purchasers or sellers of any security (as that term is defined in the Securities Act of 1933 or the Securities Exchange Act of 1934) issued, owned, purchased or sold by Agent, either as principal or as agent for Borrower.  Each Lender is purchasing and acquiring legal and equitable ownership of its Commitment Percentage of the Loan and is not making a loan to Agent, and no debtor-creditor relationship exists between them as a result of this Agreement.  This Agreement and the provisions of the Loan Documents constitute the entire agreement among the parties, and no representation, promise, inducement or statement of intent has been made by Agent to Lenders which is not embodied in this Agreement or in the other Loan Documents.

67

26.Assignment by Lenders.Agent and the Lenders shall have the right at any time and from time to time (i) to sell or otherwise transfer the Loan or any portion thereof or the Loan Documents or any interest therein to one or more investors, (ii) to sell or grant participation interests in the Loan (or any part thereof) to one or more investors, (iii) to modify, split and/or sever all or any portion of the Loan, or (iv) to pledge all or any portion of the Loan.  In connection with any transaction contemplated under this Section, Borrower authorizes Agent and each Lender to disclose to any relevant party any and all financial information in such Lender's possession concerning Borrower and the Property which has been delivered to Agent or such Lender by or on behalf of Borrower pursuant to this Agreement or any other Loan Document or which has been delivered to Agent or such Lender by or on behalf of Borrower or any Guarantors, or other obligors in connection with Agent's or such Lender's credit evaluation of Borrower prior to becoming a party to this Agreement.  
(a)Participants.  Any Lender may at any time sell to one or more Lenders or other entities (“Participants”) participating interests in the rights of such Lender hereunder and under the other Loan Documents; provided any such sale must result in the Participant acquiring at least $500,000 risk participation interest in the Aggregate Commitment and other obligations under this Agreement and the other Loan Documents.  A Participant shall have the right to vote only on the extension of regularly scheduled maturity of principal or interest under the Note and this Agreement executed in favor of its selling Lender, reduction of the principal amount or rate of interest of such Note or the release of any material portion of the collateral (except as otherwise expressly permitted in this Agreement in which case no such consent shall be required).  In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of its Note for all purposes under this Agreement and the other Loan Documents, and Borrower and Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Loan Documents. 
(b)Purchasing Lenders.  Any Lender may, without the consent of Borrower, at any time sell to any of its affiliates or to any Lender, any affiliate thereof or to one or more additional lenders or financial institutions (“Purchasing Lenders”) all or any part of its rights and obligations under this Agreement, the Notes and the other Loan Documents pursuant to an assignment agreement (an “Assignment and Acceptance”) executed by such Purchasing Lender and such transferor Lender, and delivered to Agent accompanied by a $3,500 processing fee (which fee Borrower is not obligated to pay); provided, however, that any such sale must result in the Purchasing Lender having an interest in at least $500,000 in aggregate amount of obligations under this Agreement and the other Loan Documents.  Upon such execution and delivery from and after the transfer effective date determined pursuant to such Assignment and Acceptance, (i) the Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder, and (ii) the transferor Lender thereunder shall, to the extent of such assigned portion and as provided in the Assignment and Acceptance, be released from its obligations under this Agreement and the other Loan Documents (and, in the case of an Assignment and Acceptance covering all or the remaining portion of a transferor Lender's rights and obligations under this Agreement, such transferor Lender shall cease to be a party hereto).  Any such Assignment and 

68

Acceptance shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the other Loan Documents.  Borrower, at its expense, shall execute and deliver to Agent in exchange for the surrendered Notes, new Notes to the order of such Purchasing Lender in an amount equal to the Commitment Percentage in the Loan assumed by it, and if the transferor Lender has retained a Commitment Percentage in the Loan hereunder, new Notes to the order of the transferor Lender in an amount equal to such Commitment Percentage retained by it hereunder.  Such new Notes shall be dated the effective date of such assignment, or as of the date of this Agreement, as Agent shall direct. 
(c)Pledge.  Agent and Lenders may, without the consent of Borrower, pledge all or any portion of the Loan.  
27.Special Provisions.
(a)Further Splits and Secondary Market Transactions.  Agent and the Lenders shall have the right at any time and from time to time (i) to cause the Loan to be split into two or more separate loans, or (ii) to securitize the Loan or any portion thereof in a single asset securitization or a pooled loan securitization of rated single or multi-class securities (the “Securities”) secured by or evidencing ownership interests in the Notes and the Loan Documents (each such severance of the Loan, loan split, securitization, and each of transactions described in Section 26 above, is referred to herein as a “Secondary Market Transaction”).  In connection with any Secondary Market Transaction, Borrower shall use all reasonable efforts and cooperate fully and in good faith with Agent and each Lender and otherwise assist Agent and each Lender in satisfying the market standards to which Agent and such Lender customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies in connection with any such Secondary Market Transactions, including: (A) to (i) provide such financial and other information with respect to the Property, the Collateral (as defined in the Mortgage), Borrower, and its Affiliates, Manager and any tenants of the Property, (ii) provide business plans and budgets relating to the Property and (iii) subject to the rights of tenants at the Property, perform or permit or cause to be performed or permitted such site inspection, appraisals, surveys, market studies, environmental reviews and reports, engineering reports and other due diligence investigations of the Property, as may be reasonably requested from time to time by Agent or a Lender or the Rating Agencies or as may be necessary or appropriate in connection with a Secondary Market Transaction or Exchange Act requirements (the items provided to Agent or a Lender pursuant to this paragraph (A) being called the “Provided Information”), together, if customary, with appropriate verification of and/or consents to the Provided Information through letters of auditors or opinions of counsel of independent attorneys acceptable to Agent and such Lender and the Rating Agencies; (B) cause counsel to render opinions as to non-consolidation and any other opinion customary in securitization transactions with respect to the Collateral, the Property, Borrower, and its Affiliates, which counsel and opinions shall be reasonably satisfactory to Agent and such Lender and the Rating Agencies; (C) make such representations and warranties as of the closing date of any Secondary Market Transaction with respect to the Collateral, the Property, Borrower, and the Loan Documents as are customarily provided in such transactions and as may be reasonably requested by Agent and 

69

such Lender or the Rating Agencies and consistent with the facts covered by such representations and warranties as they exist on the date thereof, including the representations and warranties made in the Loan Documents; (D) provide current certificates of good standing and qualification with respect to Borrower, and Sole Member from appropriate Governmental Authorities; and (E) execute such amendments to the Loan Documents and Borrower's organizational documents, as may be requested by Agent and such Lender or the Rating Agencies or otherwise to effect a Secondary Market Transaction, provided that nothing contained in this subsection (E) shall result in a material economic change in the transaction; provided that notwithstanding anything to the contrary in this Section 27(a), Borrower shall not be required to (i) incur any out-of-pocket expense in connection with the Secondary Market Transaction unless Agent or the applicable Lender agrees to pay for such out-of-pocket expenses as they are incurred by Borrower (including, without limitation, a change in the Spread (as defined in the Note) or the Stated Maturity of the Loan), (ii) agree to a modification of any Loan Document that would have a material impact upon the rights, liabilities, or responsibilities of Borrower, or (iii) take any actions that would impose a significant burden on Borrower.  Borrower's cooperation obligations set forth herein shall continue until the Loan has been paid in full.
(b)Use of Information.  Borrower understands that all or any portion of the Provided Information may be included in disclosure documents in connection with a Secondary Market Transaction, including a prospectus or private placement memorandum (each, a “Disclosure Document”) and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or provided or made available to investors or prospective investors in the Securities, the Rating Agencies, and service providers or other parties relating to the Secondary Market Transaction.  If the Disclosure Document is required to be revised, Borrower shall cooperate with Agent and the Lenders in updating the Provided Information for inclusion or summary in the Disclosure Document or for other use reasonably required in connection with a Secondary Market Transaction by providing all current information pertaining to Borrower, Manager, the Collateral and the Property necessary to keep the Disclosure Document accurate and complete in all material respects with respect to such matters.
(c)Borrower's Obligations Regarding Disclosure Documents.  In connection with a Disclosure Document, Borrower shall: (a) if requested by Agent and/or a Lender, certify in writing that Borrower has carefully examined those portions of such Disclosure Document, pertaining to Borrower, the Collateral, the Property, Manager and the Loan, and that such portions do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (b) indemnify (in a separate instrument of indemnity, if so requested by Agent and/or a Lender) (i) any underwriter, syndicate member or placement agent (collectively, the “Underwriters”) retained by Agent and/or a Lender or its issuing company affiliate (the “Issuer”) in connection with a Secondary Market Transaction, (ii) Agent and the Lenders and (iii) the Issuer that is named in the Disclosure Document or registration statement relating to a Secondary Market Transaction (the “Registration Statement”), and each of the Issuer's directors, each of its officers who have signed the Registration Statement and each person or entity who controls the Issuer Agent or each of the Lenders within the meaning of Section 15 of the Securities Act or Section 30 of the  Exchange Act (collectively within (iii), the 

70

“Lender Group”), and each of its directors and each person who controls each of the Underwriters, within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any losses, claims, damages or liabilities (the “Liabilities”) to which Agent, the Lenders, the Lender Group or the Underwriter Group may become subject (including reimbursing all of them for any legal or other expenses actually incurred in connection with investigating or defending the Liabilities) insofar as the Liabilities arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any of the Provided Information or in any of the applicable portions of such sections of the Disclosure Document applicable to Borrower, Manager, the Collateral, the Property or the Loan, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated in the applicable portions of such sections or necessary in order to make the statements in the applicable portions of such sections in light of the circumstances under which they were made, not misleading, provided, however, that Borrower shall not be required to indemnify Agent and the Lenders for any Liabilities relating to untrue statements or omissions which Borrower identified to Agent in writing at the time of Borrower's examination of such Disclosure Document.
(d)Borrower Indemnity Regarding Filings.  In connection with filings under the Exchange Act, Borrower shall (i) indemnify Agent and the Lenders, the Lender Group and the Underwriter Group for any Liabilities to which Agent, Lenders, the Lender Group or the Underwriter Group may become subject insofar as the Liabilities arise out of or are based upon the omission or alleged omission to state in the Provided Information a material fact required to be stated in the Provided Information in order to make the statements in the Provided Information, in light of the circumstances under which they were made not misleading and (ii) reimburse Agent, Lenders, the Lender Group or the Underwriter Group for any legal or other expenses actually incurred by Agent, Lenders, Lender Group or the Underwriter Group in connection with defending or investigating the Liabilities.
(e)Indemnification Procedure.  Promptly after receipt by an indemnified party under Section 12(c) of notice of the commencement of any action for which a claim for indemnification is to be made against Borrower, such indemnified party shall notify Borrower in writing of such commencement, but the omission to so notify Borrower will not relieve Borrower from any liability that it may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to Borrower.  If any action is brought against any indemnified party, and it notifies Borrower of the commencement thereof, Borrower will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice of commencement, to assume the defense thereof with counsel satisfactory to such indemnified party in its discretion.  After notice from Borrower to such indemnified party under this Section 27(e), Borrower shall not be responsible for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both Borrower and an indemnified party, and any indemnified party shall have reasonably concluded that there are any legal defenses available to it and/or other indemnified parties that are different from or additional to those available to Borrower, then the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties.  

71

Borrower shall not be liable for the expenses of more than one separate counsel unless there are legal defenses available to it that are different from or additional to those available to another indemnified party.
(f)Contribution.  In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 12(c) is for any reason held to be unenforceable by an indemnified party in respect of any Liabilities (or action in respect thereof) referred to therein which would otherwise be indemnifiable under Section 27(c) or 27(d), Borrower shall contribute to the amount paid or payable by the indemnified party as a result of such Liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation.  In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered:  (i) the Lender Group's and Borrower's relative knowledge and access to information concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances.  Agent, Lenders, and Borrower hereby agree that it may not be equitable if the amount of such contribution were determined by pro rata or per capita allocation.
(g)Severance of Loan.  Agent and Lenders shall have the right, at any time (whether prior to, in connection with, or after any Secondary Market Transaction), with respect to all or any portion of the Loan, to modify, split and/or sever all or any portion of the Loan as hereinafter provided.  Without limiting the foregoing, Agent may (i) cause the Note and the Mortgage to be split into a first and second loan, (ii) create one (1) or more senior and subordinate notes (i.e., an A/B or A/B/C structure), (iii) create multiple components of the Note or Notes (and allocate or reallocate the principal balance of the Loan among such components) or (iv) otherwise sever the Loan into two (2) or more loans secured by mortgages and by a pledge of partnership or membership interests (directly or indirectly) in Borrower (i.e., a senior loan/mezzanine loan structure), in each such case, in whatever proportion and whatever priority Agent determines; provided, however, in each such instance the outstanding principal balance of all the Notes evidencing the Loan (or components of such Notes) immediately after the effective date of such modification equals the outstanding principal balance of the Loan immediately prior to such modification and the weighted average of the interest rates for all such Notes (or components of such Notes) immediately after the effective date of such modification equals the interest rate of the original Note immediately prior to such modification.  If requested by Agent, Borrower (and Borrower's constituent members, if applicable) shall execute within two (2) Business Days after such request, such documentation as Agent may reasonably request to evidence and/or effectuate any such modification or severance.  Borrower shall not be required to (A) incur any out-of-pocket expense in connection with any action taken pursuant to this Section 27(g) unless Agent agrees to pay for such out of pocket expenses as they are incurred by Borrower (including, without limitation, a change in the Spread or the Stated Maturity of the Loan), (B) agree to a modification of any Loan Document that would have a material impact upon the rights, liabilities, or responsibilities of Borrower, or (C) take any actions that would impose a significant burden on Borrower.

72

(h)Retention of Servicer.  Agent reserves the right to retain the Servicer to act as its agent hereunder with such powers as are specifically delegated to the Servicer by Agent, whether pursuant to the terms of this Agreement, any pooling and servicing agreement or similar agreement entered into as a result of a Secondary Market Transaction or otherwise, together with such other powers as are reasonably incidental thereto.  Borrower shall pay any reasonable fees and expenses of the Servicer (i) in connection with a release of the Property (or any portion thereof), (ii) in connection with an assumption or modification of the Loan, (iii) in connection with the enforcement of the Loan Documents or (iv) in connection with any other action or approval taken by Servicer hereunder on behalf of Agent (which shall not include ongoing regular servicing fees relating to the day-to-day servicing of the Loan, for which Borrower shall not be charged).

(the remainder of the page left intentionally blank)

73

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

BORROWER:

JP ABERDEEN PARTNERS, LP,
a Delaware limited partnership

By:    JP Aberdeen LLC,
a Delaware limited liability company,
its General Partner
    
By:    JP Holdings, LLC,
its Sole Member

By:     /s/ Mark D. Jordan
Mark D. Jordan
Manager

74

AGENT:
KBS DEBT HOLDINGS III, LLC,
a Delaware limited liability company

By:    KBS LIMITED PARTNERSHIP III,
a Delaware limited partnership,
its manager

By:    KBS REAL ESTATE INVESTMENT TRUST III, INC.,
a Maryland corporation,    
its sole general partner

        
By:    /s/ Charles J. Schreiber, Jr.
Charles J. Schreiber, Jr.
Chief Executive Officer

LENDERS:
KBS DEBT HOLDINGS III, LLC,
a Delaware limited liability company

By:    KBS LIMITED PARTNERSHIP III,
a Delaware limited partnership,
its manager

By:    KBS REAL ESTATE INVESTMENT TRUST III, INC.,
a Maryland corporation,    
its sole general partner

        
By:    /s/ Charles J. Schreiber, Jr.
Charles J. Schreiber, Jr.
Chief Executive Officer

JOINDER
The undersigned, the Sole Member, has duly executed and delivered this Agreement as of the day and year first above written for the purpose of agreeing and consenting to (i) the provisions of Section 23 of the Agreement and (ii) the other provisions of this Agreement concerning the Sole Member.

JP Aberdeen LLC,
a Delaware limited liability company

By:    JP Holdings, LLC,
its Sole Member

By:     /s/ Mark D. Jordan
Mark D. Jordan
Manager

77

EXHIBIT A

Legal Description of Real Property

(Attached)

All that certain 2.423 acres of land, which is the Aberdeen Quorum Addition, an addition to the Town of Addison, recorded in Volume 84225, Page 2009 in the Deed Records of Dallas County Texas (called D.R.D.C.T. hereafter) which is the same property described in the deed to Equastone Aberdeen, LLC, recorded in Document Number 20070275765 D.R.D.C.T., in the Josiah Pancoast Survey, A-1146, Town of Addison, Dallas County, Texas, and 

more particularly described by metes and bounds as follows (all bearings based on the Aberdeen Quorum Addition):

BEGINNING at an "X" in concrete found for the southwest corner of the herein described tract, common to the most southerly southeast corner of the 1.8459 acre tract described in the deed to SMII/TRP Properties/LP, L.P., rcorded in Volume 98231, Page 4579 D.R.D.C.T.,  in the north right-of-way line of Quorum Drive (R.O.W. Varies)

THENCE North 02°24"31" West - 192.97" along an "X" on a concrete curb found for the most westerly northwest corner of the herein described tract, common to an angle corner of said 1.8459 acre tract;

THENCE EAST - 136.00" to a 1/2" iron rod for an angle of the herein descriged tract, common to the most easterly southeast corner of said 1.8459 acre tract;

THENCE North - 352.82" to a 1/2" iron rod for the most northerly northwest corner of the herein described tract, common to the northeast corner of the Murphree Company Subdivision, an addition to the Town of Addison, recorded in Volume 84072, Page 4851, D.R.C.T., and in the south line of the Marriott at the Quorum, an addition to the Town of Addison, recorded in Volume 82111, Page 2578, D.R.D.C.T.;

THENCE North 89°46'47" East - 152.99' to an "X" in concrete found for the northeast corner of the herein described tract, in the west right-of-way line of Dallas Parkway (R.O.W. Varies), which is a point on a curve to the left, with a central angle of 01°49'22", a radius of 1,250.92' and a chord bearing and distance of South 00°49'14" East - 39.79';

THENCE along the west right-of-way line of said Dallas Parkway, along said curve to the left, an arc distance of 39.80', to a 60d nail found for the end of said curve;

THENCE South 01°43'55" E - 459.36' continuing along said west right-of-way line of Dallas Parkway, to a 1/2" iron rod found for the north corner of the northwest right-of-way cutback line at the intersection of said Dallas Parkway and Quorum Drive;

THENCE South 43°17'36" W - 23.67' along said northwest right-of-way cutback line, to an "X" on a concrete vault found for the west corner of said cutback, in the north right-of-way line of said Quorum Drive;

THENCE North 85°27'46" West - 77.08' along the north right-of-way line of said Quorum Drive, to a 1/2" iron rod found for a point on a curve to the left, having a central angle of 23°59'43", a radius of 260.00' and a chord bearing and distance of South 82°32'33" West - 108.09';

THENCE continuing along the north right-of-way line of said Quorum Drive, along said curve to the left, an arc distance of 108.89', to a 1/2" iron rod found for the point of compound curvature of a curve to the left, having a central angle of 02°14'23", a radius of 470.90', and a chord bearing and distance of South 69°25'29" West - 18.41';

THENCE continuing along the north right-of-way line of said Quorum Drive, along said curve to the left, an arc distance of 18.41', to a 1/2" iron rod found for the point of reverse curvature of a curve to the right, having a central angle of 19°15'33", a radius of 238.00' and a chord bearing and distance of South 77°56'04" West - 79.62';

THENCE continuing along the nroth right-of-way line of said Quorum Drive, along said curve to the right, an arc distance of 80.00', to the POINT OF BEGINNING and containing 2.423 acres of land.

NOTE: THE COMPANY DOES NOT REPRESENT THAT THE ACREAGE AND/OR SQUARE FOOTAGE CALCULATIONS ARE CORRECT.

TRACT 2 (EASEMENT ESTATE):

All that certain 1.847 acres of land, which is the "Quorum #1 Tract", described in the Reciprocal Agreement recorded in Volume 80188, Page 2417, D.R.D.C.T.

EXHIBIT B

Required Repairs

None.

EXHIBIT C

Initial Annual Budget

(Attached)

	
																															
	The Aberdeen

	2011-2012 Budget

	PROJECT # Aberdeen

	 
	BUILDING SQUARE FOOTAGE:
	 
	319,758
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	RECOVERABLE OP. EXP.:
	 
	$4.41
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	ACCOUNT
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	2011-12

	OR SPACE
	 
	Lease
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	2011-12
	COST PER

	NUMBER
	DESCRIPTION
	End Date
	SQ.FT.
	JUL
	AUG
	SEP
	OCT
	NOV
	DEC
	JAN
	FEB
	MAR
	APR
	MAY
	JUN
	TOTAL
	SQ.FT.

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	BASE RENT (4500):
	 
	 
	 
	14,425
	

	14,425
	

	14,425
	

	14,425
	

	14,425
	

	14,425
	

	14,425
	

	14,425
	

	14,425
	

	14,425
	

	14,425
	

	14,425
	

	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	100
	Vacant
	 
	36,263
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	200
	Vacant
	 
	31,441
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	300
	Vacant
	 
	46,911
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	400
	Vacant
	 
	22,504
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	450
	EMC Corporation
	7/31/2013
	13,329
	

	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$286,574
	$21.50

	475
	Vacant
	 
	1,561
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	500
	Vacant
	 
	37,027
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	600
	Vacant
	 
	35,962
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	700
	Vacant
	 
	34,345
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	800
	Vacant
	 
	32,138
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	900
	Vacant
	 
	27,181
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	160S
	Security & Maintenance
	7/31/2013
	1,096
	

	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	BASE RENT TOTALS (4500):
	 
	319,758
	

	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$23,881
	$286,574
	$0.90

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	REIMBURSE ELECTRIC (5109):
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$55,315
	$0.17

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	REIMBURSEMENTS TOTALS (5109):
	 
	 
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$4,610
	$55,315
	$0.17

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	CAM/ TAX REIMBURSEMENTS
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$35,374
	$0.11

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	OTHER INCOME TOTALS
	 
	 
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$2,948
	$35,374
	$0.11

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	TOTAL INCOME
	 
	 
	 
	$31,439
	$31,439
	$31,439
	$31,439
	$31,439
	$31,439
	$31,439
	$31,439
	$31,439
	$31,439
	$31,439
	$31,439
	$377,263
	$1.18

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	
																		
	The Aberdeen

	2011-2012 Budget

	PROJECT # Aberdeen

	 
	BUILDING SQUARE FOOTAGE:
	 
	319,758
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	RECOVERABLE OP. EXP.:
	 
	$4.41
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	ACCOUNT
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	2011-12

	OR SPACE
	 
	Lease
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	2011-12
	COST PER

	NUMBER
	DESCRIPTION
	End Date
	SQ.FT.
	JUL
	AUG
	SEP
	OCT
	NOV
	DEC
	JAN
	FEB
	MAR
	APR
	MAY
	JUN
	TOTAL
	SQ.FT.

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	EXPENSES:
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	6220
	Janitorial Contract
	 
	 
	$1,250
	$1,418
	$1,418
	$1,418
	$1,418
	$1,418
	$1,418
	$1,418
	$1,418
	$1,418
	$1,418
	$1,418
	$16,848
	$0.05

	6225
	Janitorial Supplies
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	6226
	Window Cleaning
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	6231
	Plumbing Repairs
	 
	 
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$3,000
	$0.01

	6235
	Pest Control
	 
	 
	$167
	$167
	$167
	$167
	$167
	$167
	$167
	$167
	$167
	$167
	$167
	$167
	$2,000
	$0.01

	6240
	HVAC Repairs
	 
	 
	$1,750
	$1,750
	$1,750
	$1,750
	$1,750
	$1,750
	$1,750
	$1,750
	$1,750
	$1,750
	$1,750
	$1,750
	$21,000
	$0.07

	6245
	Fire System
	 
	 
	$250
	$250
	$3,714
	$250
	$250
	$250
	$250
	$2,750
	$250
	$250
	$250
	$250
	$8,964
	$0.03

	6250
	Elevators
	 
	 
	$2,800
	$2,800
	$2,800
	$2,800
	$2,800
	$2,800
	$2,800
	$2,800
	$2,800
	$2,800
	$2,800
	$2,800
	$33,600
	$0.11

	6260
	Landscaping
	 
	 
	$1,400
	$1,400
	$1,400
	$1,400
	$1,400
	$1,400
	$1,400
	$1,400
	$1,400
	$1,400
	$1,400
	$1,400
	$16,800
	$0.05

	6265
	Landscaping- Interior Plants
	 
	 
	$375
	$375
	$375
	$375
	$375
	$375
	$375
	$375
	$375
	$375
	$375
	$375
	$4,500
	$0.01

	6280
	Electrical Repairs
	 
	 
	$500
	$500
	$500
	$500
	$2,250
	$500
	$500
	$500
	$500
	$500
	$500
	$500
	$7,750
	$0.02

	6285
	Maintenance - Roof
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	6286
	Supplies & Tools
	 
	 
	$100
	$100
	$100
	$100
	$100
	$100
	$100
	$100
	$100
	$100
	$100
	$100
	$1,200
	$0.00

	6287
	Locks & Keys
	 
	 
	$5,000
	$50
	$50
	$50
	$50
	$50
	$50
	$50
	$50
	$50
	$50
	$50
	$5,550
	$0.02

	6290
	Parking Lot- Sweeping
	 
	 
	$400
	$400
	$400
	$400
	$400
	$400
	$400
	$400
	$400
	$400
	$400
	$400
	$4,800
	$0.02

	6291
	Parking Lot
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	6295
	General Building Maintenance
	 
	 
	$1,500
	$1,500
	$1,500
	$1,500
	$1,500
	$1,500
	$1,500
	$1,500
	$1,500
	$1,500
	$1,500
	$1,500
	$18,000
	$0.06

	6300
	Management Fees
	 
	 
	$4,000
	$4,000
	$4,000
	$4,000
	$4,000
	$4,000
	$4,000
	$4,000
	$4,000
	$4,000
	$4,000
	$4,000
	$48,000
	$0.15

	6305
	Salaries & Bonuses
	 
	 
	$13,542
	$13,542
	$13,542
	$13,542
	$13,542
	$13,542
	$13,542
	$13,542
	$13,542
	$13,542
	$13,542
	$13,542
	$162,500
	$0.51

	6307
	Owners Association
	 
	 
	$0
	$0
	$0
	$5,000
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$5,000
	$0.02

	6310
	Security Service
	 
	 
	$6,200
	$6,200
	$6,200
	$6,200
	$6,200
	$6,200
	$6,200
	$6,200
	$6,200
	$6,200
	$6,200
	$6,200
	$74,400
	$0.23

	6320
	Insurance
	 
	 
	$4,167
	$4,167
	$4,167
	$4,167
	$4,167
	$4,167
	$4,167
	$4,167
	$4,167
	$4,167
	$4,167
	$4,167
	$50,004
	$0.16

	6350
	Property Taxes
	 
	 
	$33,727
	$33,727
	$33,727
	$33,727
	$33,727
	$33,727
	$33,727
	$33,727
	$33,727
	$33,727
	$33,727
	$33,727
	$404,721
	$1.27

	6410
	Utilities - Electric
	 
	 
	$40,000
	$40,000
	$40,000
	$40,000
	$40,000
	$40,000
	$40,000
	$40,000
	$40,000
	$40,000
	$40,000
	$40,000
	$480,000
	$1.50

	6420
	Utilities - Gas
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	6430
	Utilities - Water
	 
	 
	$2,500
	$2,500
	$2,500
	$2,500
	$2,500
	$2,500
	$2,500
	$2,500
	$2,500
	$2,500
	$2,500
	$2,500
	$30,000
	$0.09

	6435
	Telephone
	 
	 
	$750
	$750
	$750
	$750
	$750
	$750
	$750
	$750
	$750
	$750
	$750
	$750
	$9,000
	$0.03

	6450
	Trash Removal
	 
	 
	$80
	$80
	$380
	$80
	$80
	$380
	$80
	$80
	$380
	$80
	$80
	$380
	$2,160
	$0.01

	TOTAL RECOVERABLE EXPENSES:
	 
	 
	$120,707
	$115,925
	$119,689
	$120,925
	$117,675
	$116,225
	$115,925
	$118,425
	$116,225
	$115,925
	$115,925
	$116,225
	$1,409,797
	$4.41

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	7420
	Office Supplies/ Copier
	 
	 
	$500
	$500
	$500
	$500
	$500
	$500
	$500
	$500
	$500
	$500
	$500
	$500
	$6,000
	$0.02

	7500
	Advertising & Promotion
	 
	 
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$2,550
	$5,300
	$0.02

	7610
	Legal & Accounting
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$1,500
	$0
	$0
	$0
	$0
	$1,500
	$0.00

	7620
	Taxes & Licenses
	 
	 
	$100
	$100
	$100
	$2,500
	$100
	$100
	$100
	$100
	$3,100
	$100
	$100
	$100
	$6,600
	$0.02

	7630
	Travel/ Mileage Reimbursement
	 
	 
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$250
	$3,000
	$0.01

	7640
	Courier/ Postage
	 
	 
	$150
	$150
	$150
	$150
	$150
	$150
	$150
	$150
	$150
	$150
	$150
	$150
	$1,800
	$0.01

	7650
	Architects/ Engineering Fees
	 
	 
	$1,000
	$1,000
	$1,000
	$1,000
	$1,000
	$1,000
	$1,000
	$1,000
	$1,000
	$1,000
	$1,000
	$1,000
	$12,000
	$0.04

	7642
	Bank Fees
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	$2,250
	$2,250
	$2,250
	$4,650
	$2,250
	$2,250
	$2,250
	$3,750
	$5,250
	$2,250
	$2,250
	$4,550
	$36,200
	$0.11

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	TOTAL OPERATING EXPENSES:
	 
	 
	$122,957
	$118,175
	$121,939
	$125,575
	$119,925
	$118,475
	$118,175
	$122,175
	$121,475
	$118,175
	$118,175
	$120,775
	$1,445,997
	4.52

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	NET OPERATING INCOME:
	 
	 
	-$91,519
	-$86,737
	-$90,501
	-$94,137
	-$88,487
	-$87,037
	-$86,737
	-$90,737
	-$90,037
	-$86,737
	-$86,737
	-$89,337
	-$1,068,734
	-3.34

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	
																																
	The Aberdeen

	2011-2012 Budget

	PROJECT # Aberdeen

	 
	BUILDING SQUARE FOOTAGE:
	 
	319,758
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	RECOVERABLE OP. EXP.:
	 
	$4.41
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	ACCOUNT
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	2011-12

	OR SPACE
	 
	Lease
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	2011-12
	COST PER

	NUMBER
	DESCRIPTION
	End Date
	SQ.FT.
	JUL
	AUG
	SEP
	OCT
	NOV
	DEC
	JAN
	FEB
	MAR
	APR
	MAY
	JUN
	TOTAL
	SQ.FT.

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Interest Expense
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	8510
	Interest Expense
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Permanent Loan
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	2110
	Permanent Loan
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	TOTAL NET INCOME:
	 
	 
	-$91,519
	-$86,737
	-$90,501
	-$94,137
	-$88,487
	-$87,037
	-$86,737
	-$90,737
	-$90,037
	-$86,737
	-$86,737
	-$89,337
	-$1,068,734
	-$3.34

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	TENANT IMPROVEMENTS (1720):
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	See Leasing Assumptions
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	TENANT IMPROVEMENTS TOTAL (1720):
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	COMMISSIONS (1730)
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	See Leasing Assumptions
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	COMMISSIONS TOTAL (1730)
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	BUILDING IMPROVEMENTS (1705):
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0.00

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	TOTAL BUILDING IMPROVEMENTS (1705):
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	TOTAL CAPITAL EXPENDITURES
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	CAPITAL FUNDING
	 
	 
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0
	$0

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	NET CASH FLOW
	 
	 
	(91,519
	)
	(86,737
	)
	(90,501
	)
	(94,137
	)
	(88,487
	)
	(87,037
	)
	(86,737
	)
	(90,737
	)
	(90,037
	)
	(86,737
	)
	(86,737
	)
	(89,337
	)
	(1,068,734
	)
	(3.34
	)

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

EXHIBIT D

Disbursement Schedule

EXHIBIT E

Non-Major Lease Guidelines

a.    Length of Term:  The term of the lease shall not be less than three (3) years and not longer than ten (10) years.

b.    The initial rental rate for any lease shall not be less than $19.00 per square foot, per year.  Increases shall not be less than two percent (2%) per year.

c.    Renewal Options - Nothing other than a renewal option for one hundred percent (100%) of the leased premises at no less than ninety-five percent (95%) of market rent for no less than three (3) years and no more than ten (10) years.

d.    Free Rent - No more than one (1) month of free rent shall be given for every year of the lease term.

e.    Tenant improvement amounts may not be more than $25.00 per square foot.

f.    Leasing commissions may not be more than 6.75%.

g.    Recoveries - Pro rata over a base year stop plus a direct recovery of electric.  A subsequent year's expense stop will be allowed for any lease transacted beyond the third quarter of the current year.

h.    Tenant Credit    - Must be reasonably approved by Lender.

EXHIBIT F

Lender's Pro Rata Shares and Addresses

	
			
	Name of Lender
	Address
	Pro Rata Share

	KBS Debt Holdings III, LLC
	620 Newport Center Drive, Suite 1300
Newport Beach, CA  92660
	100%

SCHEDULE 1
A “Special Purpose Bankruptcy Remote Entity” means (x) a limited liability company that is a Single Member Bankruptcy Remote LLC (defined below) or (y) a corporation, limited partnership or limited liability company which at all times since its formation and at all times thereafter:
(i)was and will be organized solely for the purpose of (A) owning the Property or (B) acting as a general partner of the limited partnership that owns the Property or member of the limited liability company that owns the Property;
(ii)has not engaged and will not engage in any business unrelated to (A) the ownership of the Property, (B) acting as general partner of the limited partnership that owns the Property or (C) acting as a member of the limited liability company that owns the Property, as applicable;
(iii)has not had and will not have any assets other than those related to the Property or its partnership or member interest in the limited partnership or limited liability company that owns the Property, as applicable;
(iv)has not engaged, sought or consented to and will not engage in, seek or consent to any dissolution, winding up, liquidation, consolidation, merger, asset sale (except as expressly permitted by this Agreement), transfer of partnership or membership interests or the like, or amendment of its limited partnership agreement, articles of incorporation, articles of organization, certificate of formation or operating agreement (as applicable);
(v)if such entity is a limited partnership, has and will have a general partner that has been and will be a Special Purpose Bankruptcy Remote Entity that has been and will be a corporation or a limited liability company and such corporation or limited liability company is the general partner of such limited partnership;
(vi)[Intentionally Omitted];
(vii)if such entity is a limited liability company, other than a Single Member Bankruptcy Remote LLC, has and will have at least one member that has been and will be a Special Purpose Bankruptcy Remote Entity that has been and will be a corporation or a limited liability company and such corporation or limited liability company is the managing member of such limited liability company;
(viii)[Intentionally Omitted];
(ix)has not, and without the unanimous consent of all of its partners, directors or members (including all Independent Directors), as applicable, will not, with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest (A) file a bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally, (B) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for such entity or for 

all or any portion of such entity's properties, (C) make any assignment for the benefit of such entity's creditors or (D) take any action with the intention of rendering such entity insolvent;
(x)has remained and will remain solvent and has maintained and will maintain adequate capital in light of its contemplated business operations;
(xi)has not failed and will not fail to correct any known misunderstanding regarding the separate identity of such entity;
(xii)has maintained and will maintain its accounts, books and records separate from any other Person and will file its own tax returns;
(xiii)has maintained and will maintain its books, records, resolutions and agreements as official records;
(xiv)has not commingled and will not commingle its funds or assets with those of any other Person;
(xv)has held and will hold its assets in its own name;
(xvi)has conducted and will conduct its business in its name,
(xvii)has maintained and will maintain its financial statements, accounting records and other entity documents separate from any other Person;
(xviii)has paid and will pay its own liabilities, including the salaries of its own employees, out of its own funds and assets;
(xix)has observed and will observe all partnership, corporate or limited liability company formalities, as applicable;
(xx)has maintained and will maintain an arm's-length relationship with its Affiliates;
(xxi)(a) if such entity owns the Property, has and will have no indebtedness other than the Loan and unsecured trade payables in the ordinary course of business which (1) do not exceed  $100,000, at any time, and (2) are paid within sixty (60) days of the date incurred, or (b) if such entity acts as the general partner of a limited partnership which owns the Property, has and will have no indebtedness other than unsecured trade payables in the ordinary course of business relating to acting as general partner of the limited partnership which owns the Property which (1) do not exceed, at any time, $100,000 and (2) are paid within sixty (60) days of the date incurred, or (c) if such entity acts as a managing member of a limited liability company which owns the Property, has and will have no indebtedness other than unsecured trade payables in the ordinary course of business relating to acting as a member of the limited liability company which owns the Property which (1) do not exceed, at any time, $100,000 and (2) are paid within sixty (60) days of the date incurred;

2

(xxii)has not and will not assume or guarantee or become obligated for the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person except for the Loan and except in its capacity as a general partner of the limited partnership that owns the Property, as applicable;
(xxiii)has not and will not acquire obligations or securities of its partners, members or shareholders;
(xxiv)has allocated and will allocate fairly and reasonably shared expenses, including shared office space, and uses separate stationery, invoices and checks;
(xxv)except in connection with the Loan, has not pledged and will not pledge its assets for the benefit of any other Person;
(xxvi)has held itself out and identified itself and will hold itself out and identify itself as a separate and distinct entity under its own name and not as a division or part of any other Person;
(xxvii)has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xxviii)has not made and will not make loans to any Person;
(xxix)has not identified and will not identify its partners, members or shareholders, or any Affiliate of any of them, as a division or part of it;
(xxx)has not entered into or been a party to, and will not enter into or be a party to, any transaction with its partners, members, shareholders or Affiliates except in the ordinary course of its business and on terms which are intrinsically fair and are no less favorable to it than would be obtained in a comparable arm's-length transaction with an unrelated third party;
(xxxi)has and will have no obligation to indemnify its partners, officers, directors, members or Special Members, as the case may be, or has such an obligation that is fully subordinated to the Indebtedness and will not constitute a claim against it if cash flow in excess of the amount required to pay the Indebtedness is insufficient to pay such obligation; and
(xxxii)will consider the interests of its creditors in connection with all corporate, partnership or limited liability actions, as applicable.
“Independent Director” means (x) in the case of a Single Member Bankruptcy Remote LLC:  a natural person selected by the Single Member Bankruptcy Remote LLC and reasonably satisfactory to Agent who shall not have been at the time of such individual's appointment as an Independent Director of the Single Member Bankruptcy Remote LLC, does not thereafter become while serving as an Independent Director (except pursuant to an express provision in the Single Member Bankruptcy Remote LLC's limited liability company agreement providing for the Independent Director to become a Special Member (defined below) upon the 

3

sole member of such Single Member Bankruptcy Remote LLC ceasing to be a member in such Single Member Bankruptcy Remote LLC) and shall not have been at any time during the preceding five (5) years (i) a shareholder/partner/member of, or an officer or employee of, Borrower or any of its shareholders, subsidiaries or Affiliates, (ii) a director (other than as an Independent Director) of any shareholder, subsidiary or Affiliate of the Single Member Bankruptcy Remote LLC, (iii) a customer of, or supplier to, the Single Member Bankruptcy Remote LLC or any of its shareholders, subsidiaries or Affiliates, (iv) a Person who Controls any such shareholder, supplier or customer, or (v) a member of the immediate family of any such shareholder/ director/partner/member, officer, employee, supplier or customer or of any director of the Single Member Bankruptcy Remote LLC (other than as an Independent Director); and (y) in the case of a corporation, an individual selected by the corporation and reasonably satisfactory to Agent who shall not have been at the time of such individual's appointment as a director, does not thereafter become while serving as an Independent Director and shall not have been at any time during the preceding five (5) years (i) a shareholder/partner/member of, or an officer, employee, consultant, agent or advisor of, the corporation or any of its shareholders, subsidiaries, members or Affiliates, (ii) a director of any shareholder, subsidiary, member, or Affiliate of the corporation other than such entity's general partner or managing member, (iii) a customer of, or supplier to, the corporation or any of its shareholders, subsidiaries or Affiliates that derives more than 10% of its purchases or income from its activities with the corporation or any Affiliate of the corporation, (iv) a Person who Controls any such shareholder, supplier or customer, or (v) a member of the immediate family (including a grandchild or sibling) of any such shareholder/director/partner/member, officer, employee, supplier or customer or of any other director of such entity' general partner or managing member.  
“Single Member Bankruptcy Remote LLC” means a limited liability company organized under the laws of the State of Delaware which at all times since its formation and at all times thereafter (i) complies with the following clauses of the definition of Special Purpose Bankruptcy Remote Entity above:  (i), (ii), (iii), (iv) and (ix) through (xxxii); (ii) has maintained and will maintain its accounts, books and records separate from any other person; (iii) has and will have an operating agreement which provides that the business and affairs of Borrower shall be managed by or under the direction of a board of one or more directors designated by Sole Member, and at all times there shall be at least one (1) duly appointed Independent Director on the board of directors, and the board of directors will not take any action requiring the unanimous affirmative vote of 100% of the members of its board of directors unless, at the time of such action there is at least one (1) member of the board of directors who is an Independent Director, and all of the directors and all Independent Directors shall have participated in such vote; (iv) has and will have an operating agreement which provides that, as long as any portion of the Indebtedness remains outstanding, (A) upon the occurrence of any event that causes Sole Member to cease to be a member of Borrower (other than (x) upon an assignment by Sole Member of all of its limited liability company interest in Borrower and the admission of the transferee, if permitted pursuant to the organizational documents of Borrower and the Loan Documents, or (y) the resignation of Sole Member and the admission of an additional member of Borrower, if permitted pursuant to the organizational documents of Borrower and the Loan Documents), the person acting as an Independent Director of Borrower shall, without any action of any Person and simultaneously with Sole Member ceasing to be a member of Borrower, automatically be admitted as the sole member of Borrower (the “Special Member”) and shall preserve and continue the existence of Borrower without dissolution, (B) no Special Member may resign or transfer its rights as Special 

4

Member unless (x) a successor Special Member has been admitted to Borrower as a Special Member, and (y) such successor Special Member has also accepted its appointment as an Independent Director and (C) except as expressly permitted pursuant to the terms of this Agreement, Sole Member may not resign and no additional member shall be admitted to Borrower; (v) has and will have an operating agreement which provides that, as long as any portion of the Indebtedness remains outstanding, (A) Borrower shall be dissolved, and its affairs shall be would up only upon the first to occur of the following:  (x) the termination of the legal existence of the last remaining member of Borrower or the occurrence of any other event which terminates the continued membership of the last remaining member of Borrower in Borrower unless the business of Borrower is continued in a manner permitted by its operating agreement or the Delaware Limited Liability Company Act (the “Act”) or (y) the entry of a decree of judicial dissolution under Section 18‐802 of the Act; (B) upon the occurrence of any event that causes the last remaining member of Borrower to cease to be a member of Borrower or that causes Sole Member to cease to be a member of Borrower (other than (x) upon an assignment by Sole Member of all of its limited liability company interest in Borrower and the admission of the transferee, if permitted pursuant to the organizational documents of Borrower and the Loan Documents, or (y) the resignation of Sole Member and the admission of an additional member of Borrower, if permitted pursuant to the organizational documents of Borrower and the Loan Documents), to the fullest extent permitted by law, the personal representative of such member shall be authorized to, and shall, within 90 days after the occurrence of the event that terminated the continued membership of such member in Borrower, agree in writing to continue the existence of Borrower and to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of Borrower, effective as of the occurrence of the event that terminated the continued membership of such member in Borrower; (C) the bankruptcy of Sole Member or a Special Member shall not cause such member or Special Member, respectively, to cease to be a member of Borrower and upon the occurrence of such an event, the business of Borrower shall continue without dissolution; (D) in the event of dissolution of Borrower, Borrower shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of Borrower in an orderly manner), and the assets of Borrower shall be applied in the manner, and in the order of priority, set forth in Section 18‐804 of the Act; and (E) to the fullest extent permitted by law, each of Sole Member and the Special Members shall irrevocably waive any right or power that they might have to cause Borrower or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of Borrower, to compel any sale of all or any portion of the assets of Borrower pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of Borrower.

5

SCHEDULE 2
1.    Holdbacks.  Disbursement of the remaining Fourteen Million Two Hundred Thousand and No/100 Dollars ($14,200,000.00) (the “Holdback Funds”) of the Loan shall be made in accordance with this Schedule 2 and the other applicable provisions of this Agreement.  Agent, Lenders and Borrower agree that the Holdback Funds shall be allocated as follows: 
(a)    Two Million Eight Hundred Thousand and No/100 Dollars ($2,800,000.00) (the “Operating Holdback Funds”) for the payment of monthly Operating Shortfalls (as defined in Section 2(a) below) during the first thirty (30) months of the Term;
(b)    Ten Million Nine Hundred Thousand and No/100 Dollars ($10,900,000.00) (the “TI/Commission Holdback Funds”) for the payment of capital expenditures (“Tenant Improvements”) and leasing commissions (“Commissions”) approved by Lender associated with the leasing of the vacant space in the Property that existed as of the Closing Date during the first 30 months of the Term; and
(c)    Five Hundred Thousand and No/100 Dollars ($500,000.00) (the “Lobby Renovation Holdback Funds”) for the payment of capital expenditures approved by Lender associated with the renovation of the lobby (“Lobby Renovation”).
2.    Releases of Holdback Funds.  Concurrently with the request for Agent's disbursement of the Holdback Funds, Borrower shall furnish to Agent, separately with respect to each disbursement request, a request for advance (“Request for Advance”), approved by Agent, duly signed and sworn to with all blanks appropriately filled in, setting forth such details as Agent shall require and as more particularly set forth below with respect to the TI/Commission Holdback Funds and Lobby Renovation Holdback Funds.  Each Request for Advance and all documentation delivered or required to be delivered with a Request for Advance shall be in form and substance acceptable to Agent and must be delivered to Agent during the first thirty (30) months of the Term.
(a)    Release of Operating Holdback Funds.  Subject to the satisfaction of the conditions set forth in Section 3 below and the terms of this section and so long as there remain sufficient Operating Holdback Funds available, if the Gross Receipts from the Property are not sufficient to cover Expenses (including without limitation, debt service under the Loan and any other amounts paid by or approved by Agent) (an “Operating Shortfall”), Agent shall make Advances of Operating Holdback Funds to cover Operating Shortfalls.  In lieu of disbursing any portion of the Operating Holdback Funds to Borrower for payment of any Operating Shortfalls, Agent may handle such disbursement and payment of Operating Shortfalls by making appropriate entries on the books and records of Agent, whereupon such amounts shall be deemed outstanding under the Loan, and a statement summarizing such entries shall be furnished to Borrower.  The amount of any disbursement from the Operating Holdback Funds to pay any Operating Shortfalls shall reduce the balance of the Operating Holdback Funds.  The depletion of the Operating Holdback Funds shall not in any manner affect or impair Borrower's obligation to continue to pay any and all amounts required under the Loan Agreement or the Loan Documents.

6

(b)    Releases of TI/Commission Holdback Funds.  Subject to the satisfaction of the conditions set forth in Section 3 below and the terms of this section and so long as there remain sufficient TI/Commission Holdback Funds available, Agent shall make Advances of TI/Commission Holdback Funds for Tenant Improvement and Commissions incurred by Borrower pursuant to Leases (as consented to by Agent, to the extent required pursuant to the terms of Section 12(d) of this Agreement).  All such Tenant Improvements and Commissions, to the extent not otherwise approved by Agent in connection with Lease approvals, shall be approved by Agent in its discretion as part of the disbursement process hereunder.  Advances as requested by Borrower shall be made on a monthly basis in increments of no less than $10,000 upon delivery by Borrower of a Request for Advance accompanied by copies of paid invoices for the amounts requested and, if required by Agent, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment.  Agent may require an inspection of the Property at Borrower's expense prior to making a monthly disbursement in order to verify completion of Tenant Improvements in excess of $10,000 for which reimbursement is sought.
(c)    Release of Lobby Renovation Holdback Funds.  Subject to the satisfaction of the conditions set forth in Section 3 below and the terms of this section and so long as there remain sufficient Lobby Renovation Holdback Funds available, Agent shall make Advances of Lobby Renovation Holdback Funds for capital expenditures associated with the Lobby Renovation incurred by Borrower and approved by Agent in its discretion.  Advances as requested by Borrower shall be made on a monthly basis in increments of no less than $10,000 upon delivery by Borrower of a Request for Advance accompanied by copies of paid invoices for the amounts requested and, if required by Agent, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment.  Agent may require an inspection of the Property at Borrower's expense prior to making a monthly disbursement in order to verify completion of the Lobby Renovations in excess of $10,000 for which reimbursement is sought.
(d)    Time for Release.  Provided that the conditions set forth in Section 3 below are satisfied with respect to an Advance requested by Borrower, such Advance shall be funded within fifteen (15) days after Borrower's request therefor.
3.    Conditions to Advances of Holdback Funds.  In addition to any other applicable provisions of this Agreement, each Advance of Holdback Funds is subject to the following conditions: 
(a)    No Defaults.  No Event of Default may exist either as of the date of the Request for Advance or through the date of the disbursement of the applicable Holdback Funds, nor may any event have occurred under the Loan which, after notice or the passage of time or both, would constitute an Event of Default; and
(b)    Maximum Loan-to-Value.  The loan to value of the Property does not exceed sixty-six percent (66%) based on an updated appraisal obtained at Borrower's cost; provided that Borrower shall not be obligated to pay for more than two updated appraisals in any calendar year.

7

(c)    Disbursement of Advances.  All Advances disbursed under this Agreement shall be evidenced by the Note and shall be secured by the Mortgage, and all such Advances shall be disbursed pursuant to the terms of this Agreement, to Borrower or, at Agent's option, directly to contractors or to such persons as have actually supplied labor, materials or services in connection with or incidental to the Tenant Improvements and Commissions, as applicable.  Advances shall be made by Agent only to defray costs actually incurred by Borrower.
(d)    Title Endorsement.  Agent shall receive an endorsement to the Title Policy insuring that the priority of Agent's lien has been maintained and increasing the amount of such Title Policy.
(e)    Costs and Expenses.  Borrower shall pay all of Agent's costs and expenses incurred in connection with each Advance under this Schedule 2, including, without limitation, outside attorneys' fees (if any), recording and filing charges, title company charges and the cost of any endorsement(s) to the Title Policy. 
(f)    Interest; Security.  Each Advance shall be added to the outstanding principal balance of the Note, shall accrue interest at the Base Rate from the date of disbursement and shall be secured by the Mortgage and the other Loan Documents.
(g)    Approval of Tenant Improvements, Commissions and Lobby Renovations.  Borrower shall have provided Lender with documentation evidencing the actual amount of monies spent or incurred by Borrower on the Tenant Improvements, Commissions and/or Lobby Renovations, and Lender shall have approved each proposed Tenant Improvement, Commission and/or Lobby Renovation.  The cost of Tenant Improvements may not exceed $30.00 per square foot and Commissions must not be more than market commissions payable on a lease of no less than 3 years and no more than 10 years in a term.
(h)    No Reborrowing.  Advances may not be reborrowed once repaid.
4.    Tenant Capital Reserve Account.  If at the end of the 30th month of the Term, the Holdback Funds have not been fully advanced, Borrower shall have a one-time right to request that the full amount of the remaining Holdback Funds be advanced and deposited into the Tenant Capital Reserve Account, subject to satisfaction of the conditions set forth in Section 3 above.  Any amounts deposited into the Tenant Capital Reserve Account shall be available for withdrawal in the same manner and subject to the same conditions precedent to advances of the Holdback Funds as set forth in this Schedule 2 (except that the references to the first thirty (30) months of the Term shall not apply).
5.    Holdback Funds Generally.  
(a)    No Interest.  Borrower shall not be entitled to any earnings or interest on the Holdback Funds.  Borrower shall not be obligated to pay interest on any Holdback Funds until such Holdback Funds, or any portion thereof, have been disbursed. 
(b)    No Acceptance.  No Advance of the Loan by Agent or any Lender shall be deemed to be an approval of or acceptance by Agent or the Lenders or its servicer of any work performed thereon or the materials furnished with respect thereto.

8

(c)    Quality of Work.  No Advance or any portion thereof shall be made with respect to defective work or to any contractor that has performed work that is defective and that has not been cured, but Agent may disburse all or part of any Advance before the sum shall become due if Agent believes it advisable to do so, and all such Advances or parts thereof shall be deemed to have been made pursuant to this Agreement.  
(d)    Indemnity.  Borrower shall indemnify Agent and the Lenders and hold Agent and the Lenders harmless from and against any and all actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses (including litigation costs and reasonable attorneys fees and expenses) arising from or in any way connected with the Holdback Funds or the performance of the obligations for which the Holdback Funds were established.  Borrower shall assign to Agent, as agent for the Lenders, all rights and claims Borrower may have against all Persons supplying labor, materials or other services which are to be paid from or secured by the Holdback Funds; provided, however, that Agent may not pursue any such right or claim unless an Event of Default has occurred and remains uncured.

9RIII Q2 2011 Exhibit 10.3

Exhibit 10.3

PROMISSORY NOTE
	
					
	$23,900,000.00
	 
	 
	 
	June 23, 2011

JP ABERDEEN PARTNERS, LP, a Delaware limited partnership (“Borrower”), FOR VALUE RECEIVED, promises to pay to KBS DEBT HOLDINGS III, LLC, a Delaware limited liability company (“Lender”), at such place as the holder hereof may from time to time designate in writing, the principal sum of Twenty Three Million Nine Hundred Thousand and No/100 DOLLARS ($23,900,000.00) or so much thereof as may from time to time have been advanced to Borrower under this Note with interest on the outstanding principal amount at the Note Rate (as hereinafter defined), payable as set forth herein.
DEFINITIONS
For the purpose of this Note:
“Accounts” shall have the meaning ascribed to it in the Loan Agreement (defined below).
“Actual Maturity” shall mean the date upon which the entire unpaid indebtedness evidenced by this Note becomes due and payable in accordance with the terms hereof or any of the other Loan Documents (whether at Stated Maturity, or upon acceleration following an Event of Default, voluntary prepayment or otherwise).
“Agent” shall have the meaning ascribed t it in the Loan Agreement.
“Bankruptcy Proceeding” shall have the meaning ascribed to it in the Loan Agreement.
“Base Interest” shall mean the interest accruing on the principal balance of the Loan outstanding under this Note from time to time at the then applicable Note Rate.
“Borrower” shall mean JP Aberdeen Partners, LP, a Delaware limited partnership, and its successors and assigns.
“Default Interest Rate” shall mean interest on any overdue amount outstanding hereunder from time to time at the lesser rate of (i) five percent (5%) plus the Note Rate, or (ii) the Maximum Legal Rate of Interest.
“Event of Default” shall have the meaning ascribed to it in Section 4(a) hereof.
“First Payment Date” shall mean August 1, 2011.
“Lender” shall mean KBS DEBT HOLDINGS III, LLC, a Delaware limited liability company, or its successors or assigns.
“Loan” shall mean the loan evidenced by this Note.

1

“Loan Agreement” shall mean that certain Loan Agreement, by and among Borrower, Agent and the Lenders dated as of even date herewith, as the same may hereafter be amended, modified and restated from time to time.
“Loan Documents” shall mean this Note, the Loan Agreement, the Mortgage, the Guaranty, the Environmental Indemnity, the Clearing Account Agreement, the Cash Management Agreement, Pledge and Assignment of Reserve Accounts (each as defined in the Loan Agreement) and all other documents executed in connection with the Loan, each as the same may hereafter be amended, modified and restated from time to time.
“Mortgage” shall have the meaning ascribed to it in the Loan Agreement.  
“Note Rate” shall mean, except as herein provided with respect to interest accruing at the Default Interest Rate, a fixed interest rate equal to seven and one-half percent (7.5%) per annum.
“Paid Base Interest” shall mean, at any time, the aggregate amount of Base Interest that has been paid to Lender.
“Payment Date” shall be the first day of every calendar month (or if any such date is not a Business Day, the first Business Day immediately following such date).
“Permitted Prepayment Date” shall have the meaning ascribed to it in Section 2(a) hereof.
“Prepayment Event” shall have the meaning ascribed to it in Section 2(b) hereof.
“Property” shall have the meaning ascribed to it in the Loan Agreement.
“Stated Maturity” shall mean July 1, 2016.
“Term” shall mean the period beginning on the date of this Note and ending at Actual Maturity.
“Yield Maintenance Premium” shall mean with respect to each applicable prepayment in accordance with the terms of the Loan Agreement, (1) for the period beginning on the date hereof and ending on January 31, 2015, an amount equal to the greater of (A) one percent (1%) of the outstanding principal balance of the Loan which is being prepaid on the date of such prepayment, and (B) the Present Value of this Loan (hereinafter defined) calculated as of the date of such prepayment less the amount of principal being prepaid, and (2) for the period beginning on February 1, 2015, and ending on January 31, 2016, an amount equal to three percent (3%) of the outstanding principal balance of the Loan which is being prepaid on the date of such prepayment.  For purposes of the foregoing, the “Present Value of this Loan” with respect to any prepayment as of any date that Yield Maintenance Premium is due, shall be determined by discounting all scheduled payments of principal and interest remaining to Stated Maturity attributed to the amount being prepaid, at the Discount Rate (hereinafter defined).  The “Discount Rate” is the rate which, when compounded monthly is equivalent to the Treasury Rate (hereinafter defined).  The “Treasury Rate” means the yield, as of the date of such prepayment, on the U.S. Treasury issue (primary issue) with a maturity date closest to the Stated 

2

Maturity Date.  In the event that any Yield Maintenance Premium is due hereunder, Agent shall deliver to Borrower a statement setting forth the amount and determination of the Yield Maintenance Premium, and, provided that Agent shall have in good faith applied the formula described above, Borrower shall not have the right to challenge the calculation or the method of calculation set forth in any such statement in the absence of manifest error, which calculation shall be made by Agent and disclosed to Borrower within two (2) Business Days following the earlier of (a) delivery of Borrower's written request therefore, and (b) delivery of Borrower's notice of prepayment.  Agent shall not be obligated or required to have actually reinvested the prepaid principal balance at the Discount Rate or otherwise as a condition to receiving the Yield Maintenance Premium.
All capitalized terms not otherwise defined in this Note shall have the meanings ascribed to them in the Loan Agreement.
		
	1.
	Payments.

(a)Base Interest - Interest Only Period.  Beginning on the First Payment Date and continuing through and including the Payment Date in June of 2013, Borrower shall make monthly payments of Base Interest, in arrears, on each Payment Date.  On the Closing Date, Borrower shall make a payment of Base Interest for the period from the date of this Note as set forth on Page 1 of this Note through June 30, 2011.
(b)Principal and Interest Payments.  Beginning on the Payment Date in July of 2013, and continuing through and including the Stated Maturity, Borrower shall make monthly principal and interest payments under this Note in the amounts and on the dates set forth on Exhibit A1  attached hereto and made a part hereof.
(c)Actual/360 Interest Calculation.  All interest due under Section 1(a) and Section 1(b) shall be computed on the basis of a 360 day year, and the amount of interest payable each month pursuant to this Section 1(c) will be based on the actual number of calendar days during such month and shall be calculated by multiplying the unpaid principal balance of this Note by the Note Rate, dividing the product by 360 and multiplying the quotient by the actual number of days elapsed during the month.  Borrower understands that the amount allocated to interest for each month will vary depending on the actual number of calendar days during such month.
(d)Actual Maturity.  The entire outstanding principal amount advanced hereunder together with all accrued and unpaid interest, including Base Interest, and all other charges due hereunder shall be due and payable at Actual Maturity.
(e)Application of Payments.  All payments made on this Note shall be applied first to reasonable and actual third party costs and expenses (including reasonable attorneys' fees) 

1.  The payment schedule attached hereto as Exhibit A assumes full funding of the Loan as of the Payment Date in July of 2013.  To the extent the Loan balance is different at that time, the Payment Schedule will need to be revised accordingly.

3

payable with respect to any Event of Default, then to Base Interest currently due, and then to principal under this Note.
(f)Form of Payments.  Payments hereunder shall be made in lawful money of the United States of America by wire transfer of immediately available funds, payable to the order of Agent, for the benefit of Lenders, such wire transfer to be sent in accordance with the wire instructions provided by Agent from time to time.
2.Prepayment.
(a)Voluntary Prepayment.  Borrower shall have the right to prepay in whole (but not in part) without prepayment premium or fee, except as otherwise provided below in Section 2(b), all sums due hereunder and under the Loan Documents on a Payment Date, provided that:
(i)Agent shall have received at least thirty (30) days prior written notice of prepayment; and
(ii)Concurrently with any such prepayment, Borrower shall pay to Lender the Yield Maintenance Premium applicable to such prepayment.  Notwithstanding the foregoing, from and after February 1, 2016 (the “Permitted Prepayment Date”), Borrower shall have the right to prepay the Loan in whole (but not in part) without the payment of the Yield Maintenance Premium or any other prepayment fee or penalty, provided that no Event of Default is continuing and Borrower provides Lender with at least thirty (30) days prior written notice thereof.  No Yield Maintenance Premium shall be payable in connection with any prepayment of the Loan resulting from the application of casualty or condemnation proceeds pursuant to the provisions of the Loan Documents.
(b)Acceleration.  Except as specified in Section 2(a) or in connection with the application of casualty or condemnation proceeds pursuant to the Loan Documents, Borrower shall not make any prepayment of principal, in whole or in part, before Stated Maturity.  If the indebtedness evidenced hereby is prepaid in violation of this Section 2(b) or as a result of acceleration after an Event of Default (each, a “Prepayment Event”), Borrower shall be obligated to pay to Lender, all amounts owing under this Note and the other Loan Documents, including Yield Maintenance Premium, unpaid interest, and any other amounts owing by Borrower.
3.Late Charge.  In the event any amount of the Base Interest due with respect to the Loan remains unpaid for more than ten (10) days after the date the same becomes due and payable (without regard to any applicable notice or cure period), Borrower shall immediately, without notice, pay Lender a late charge of five percent (5%) of the amount of the payment due.  Such charge shall be payable to Lender as additional interest and not as a penalty.
4.Default.
(a)Event of Default.  An “Event of Default” shall occur hereunder in the event of the following:

4

(i)the failure of Borrower to make the full and punctual payment of any installment of principal and/or interest due hereunder or any other sum due and payable hereunder or under the other Loan Documents, which failure is not cured on or before the fifth (5th) day after the date such payment was due; or
(ii)the failure of Borrower to perform and observe any covenant, obligation, agreement or undertaking hereunder (not otherwise referred to in this Section 4(a)) within twenty (20) days following written notice thereof from Lender; or
(iii)the occurrence of an Event of Default under the Loan Agreement, the Mortgage or any of the other Loan Documents, which has not been cured within the time permitted thereunder.
(b)Acceleration.  Lender may, by notice to Borrower at any time during the existence of an Event of Default, declare immediately due and payable the entire principal amount outstanding hereunder, together with all interest and other charges due hereunder, including, without limitation, all Base Interest.
(c)Default Interest Rate.  After an Event of Default, the Default Interest Rate shall apply in place of the Note Rate to all amounts outstanding under the Loan. Subject to the limitations of Section 10(k) below, such default interest shall be compounded on the monthly anniversary of such Event of Default until paid in full.
(d)Remedies.  The remedies of Lender as provided herein, or in the Loan Documents, or at law or in equity shall be cumulative and concurrent, and may be pursued singly, successively, or together at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur.  The failure at any time to exercise any right or remedy shall not constitute a waiver of the right to exercise the right or remedy at any other time.
5.Security.  Borrower's obligations under this Note are secured by, among other instruments, the Mortgage and the other Loan Documents.
6.Waiver.  Except for notices which are required by the express terms of the Loan Documents, the following are hereby waived by Borrower: notice of intent to accelerate, notice of acceleration, presentment for payment, demand, notice of dishonor, protest, and notice of protest, stay of execution and all other defenses to payment generally.  No extension or indulgence or release of collateral granted from time to time shall be construed as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of the rights of Lender herein.
7.Exculpation.
(a)Borrower Exculpation.  The provisions of this Note are subject to the provisions of Section 21 of the Loan Agreement.  
(b)Lender Exculpation.  Notwithstanding anything to the contrary contained in this Note, neither Lender nor any present or future shareholder, director, officer, member or partner of Lender or of any entity which is now or hereafter a shareholder, director, officer, member or 

5

partner of Lender (or of any entity which is now or hereafter a shareholder, director, officer, member or partner of a shareholder, director, officer, member or partner of Lender) shall have any personal liability, directly or indirectly, under or in connection with this Note or any agreement made or entered into under or in connection with the provisions of this Note, or any amendment or amendments to any of the foregoing made at any time or times, heretofore or hereafter, and Borrower hereby forever and irrevocably waives and releases any and all such personal liability.  In addition, neither Lender nor any successor or assign of Lender shall have at any time or times hereafter any personal liability, directly or indirectly, under or in connection with or secured by any agreement, lease, instrument, encumbrance, claim or right affecting or relating to the Property or to which the Property is now or hereafter subject.  The limitation of liability provided in this paragraph is in addition to, and not in limitation of, any limitation on liability applicable to Lender provided by law or by any other contract, agreement or instrument.
8.Governing Law; Severability.
(a)Governing Law.  This Note shall be governed by, and construed in accordance with, the substantive law of the State of Texas without regard to the application of choice of law principles, and Borrower hereby consents to the personal jurisdiction of the state courts of the State of Texas and of the United States District Court for the Northern District of Texas in any action that may be commenced by Agent or Lenders to enforce its rights hereunder or under the Loan Documents.
(b)Severability.  If any provision of this Note is held to be invalid or unenforceable by a court of competent jurisdiction, the other provisions of this Note shall remain in full force and effect, and shall be liberally construed in favor of Lender.
9.Notices.
(a)Any notice, election, communication, request, approval or other document or demand required or permitted under this Note shall be in writing and transmitted to the applicable party either by receipted courier service, or by the United States Postal Service, first class registered or certified mail, postage prepaid, return receipt requested, or by electronic facsimile transmission (“Fax”) at the address or addresses indicated for such party below (and/or to such other address as such party may from time to time by written notice designate to the other):
To Borrower, as follows:
JP Aberdeen Partners, LP
c/o JP Realty Partners
14801 Quorum Drive, Suite 200
Dallas, Texas  75254
Attention:  Mark Jordan
Fax:  972-458-7601

With a copy to:

6

Glast, Phillips & Murray, P.C.
14801 Quorum Drive, Suite 500
Dallas, Texas  75254
Attention:  Ira Levy
Fax:  972-419-8329

To Lender, as follows:
c/o KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
Newport Beach, CA  92660
Attention:  Brian Ragsdale
Fax:  949-417-6518

and
c/o KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
Newport Beach, CA  92660
Attention:  Jeff Rader  
Fax:  949-417-6518

With a copy to:
Greenberg Traurig, LLP
3161 Michelson Drive, Suite 1000
Irvine, California  92612
Attention:  L. Bruce Fischer and Scott A. Morehouse
Fax:  949-732-6501

and shall be deemed delivered and received: (A) if delivery is made or Fax transmission completed before 5:00 p.m. recipient's local time on a Business Day, or if tendered for delivery between 9:00 a.m. and 5:00 p.m. recipient's local time on a Business Day and refused, then on the date of such actual or attempted delivery or completed transmission, as evidenced by postal or courier receipt or by the transmission log sheet generated by the sending Fax machine; and otherwise (B) on the Business Day next following the date of actual delivery or completed transmission; provided, however, that any communication by Fax to be effective must be confirmed within three (3) Business Days after transmission by duplicate notice delivered as otherwise provided herein.
		
	10.
	Miscellaneous.

(a)Costs.  If, and as often as, this Note is referred to an attorney for the collection of any sum payable hereunder, or to defend or enforce any of Lender's rights hereunder, or to commence an action, cross-claim, third-party claim or counterclaim by Lender against Borrower relating to this Note, Borrower agrees to pay to Lender all actual third party costs and expenses incurred in connection therewith including reasonable attorney's fees (including such fees 

7

incurred in appellate, bankruptcy or insolvency proceedings), with or without the institution of any action or proceeding, and in addition, all costs, disbursements and allowances provided by law.
(b)Modification.  Neither this Note nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is sought.
(c)Successors.  As used herein, the terms “Borrower” and “Lender” shall be deemed to include their respective successors and assigns whether by voluntary action of the parties or by operation of law.  All of the rights, privileges and obligations hereof shall inure to the benefit of and bind such successors and assigns.
(d)Intentionally Omitted.
(e)Loan Agreement.  To the extent not expressly stated otherwise herein, all of the terms and conditions of the Loan Agreement shall survive the execution of this Note and shall remain in full force and effect; provided, however, to the extent of any irreconcilable conflict between the terms and conditions of the Loan Agreement and this Note, the terms and provisions of this Note shall govern and control.
(f)No Waiver.  No failure or delay by Lender in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  Without limiting the foregoing, no disbursement by Lender after a default by Borrower hereunder shall constitute a waiver of any of Lender's remedies established or referred to hereunder or shall obligate Lender to make any further disbursement.  No waiver, consent or approval of any kind by Lender shall be effective unless (and it shall be effective only to the extent) expressly set out in a writing signed and delivered by Lender.  No notice to or demand on Borrower in any case shall entitle Borrower to any other notice or demand in similar or other circumstances, nor shall such notice or demand constitute a waiver of the rights of Lender to any other or further actions.  In its sole discretion, Lender may, at any time and from time to time, waive any one or more of the requirements contained herein, but such waiver in any instance or under any particular circumstances shall not be considered a waiver of such requirement or requirements in any other instance or under any other circumstance.
(g)Waiver of Jury Trial.  BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF LENDER IN CONNECTION WITH THE LOAN.  BORROWER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR LENDER TO DISBURSE THE MONEY EVIDENCED BY THIS NOTE AND TO ENTER INTO THE OTHER LOAN DOCUMENTS.

8

(h)Withdrawals From Accounts.  Borrower hereby agrees that Lender shall have the right to withdraw from the Accounts, if any, to the extent permitted by the Account Agreements, any amount due Lender hereunder or under any other Loan Documents at the time such payment is due from Borrower.  The insufficiency of any funds in the Accounts shall not in any way relieve Borrower from its obligations hereunder or under any other Loan Document and Borrower shall pay to Lender, from other sources, all amounts due to Lender hereunder or under the other Loan Documents, at the time such payment is due.
(i)Sole and Absolute Discretion.  Any option, consent, approval, discretion or similar right of Lender set forth in this Note may be exercised by Lender in its sole, absolute and unreviewable discretion, unless the provisions of this Note specifically require such option, consent, approval, discretion or similar right to be exercised in Lender's reasonable discretion.
(j)Joint and Several Liability.  If this Note is executed by more than one person or entity as Borrower, the obligations of each such person or entity shall be joint and several.  No person or entity shall be a mere accommodation maker, but each shall be primarily and directly liable hereunder.
(k)Excess Interest.  The invalidity, or unenforceability in particular circumstances, of any provision of this Note shall not extend beyond such provision or such circumstances, and no other provision of this instrument shall be affected thereby.  As used in this Note, the term “Maximum Legal Rate of Interest” shall mean and refer to the maximum non-usurious rate of interest, if any, that may be lawfully contracted for, charged, taken, reserved or received by Lender from Borrower in connection with the indebtedness secured by this Note and in regard to which Borrower would be prevented successfully from raising the claim or defense of usury under applicable law as now, or to the extent permitted by law, as may hereafter be, in effect (said law permitting the highest rate being referred to in this Note as the “Interest Law”).  Unless changed in accordance with law, the applicable rate ceiling under Texas law shall be the indicated (weekly) rate ceiling, from time to time in effect, as provided in Section 303 of the Texas Finance Code, as amended.  It is the intention of Lender and Borrower to conform strictly to the Interest Law applicable to this loan transaction.  Accordingly, it is agreed that notwithstanding any provision to the contrary in this Note or in any of the Loan Documents or otherwise relating thereto, the aggregate of all interest and any other charges or consideration constituting interest under applicable Interest law that is taken, reserved, contracted for, charged or received under this Note, or under any of the other aforesaid agreements or otherwise in connection with this loan transaction shall under no circumstances exceed the maximum amount of interest allowed by the Interest Law applicable to this loan transaction.  If any usurious interest in such respect is provided for, or shall be adjudicated to be so provided for, in this Note or in any of the Loan Documents securing payment of the indebtedness secured  hereby or otherwise relating thereto or if any acceleration of the maturity of the indebtedness secured hereby or if any prepayment of said indebtedness results in the payment of any interest in excess of the maximum amount of interest allowed by the applicable Interest Law, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither Borrower nor Borrower's successors or assigns or any other party liable for the payment of the Liabilities shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest allowed by the Interest Law applicable to this loan transaction, (c) any excess shall be deemed a mistake and cancelled automatically and, if theretofore paid, shall be credited 

9

on said indebtedness by Lender (or if the Liabilities shall have been paid in full, refunded to Borrower) and (d) the effective rate of interest shall be automatically subject to reduction to the Maximum Legal Rate of Interest allowed under such Interest Law as now or hereafter construed by courts of appropriate jurisdiction.  All sums paid or agreed to be paid the Lender for the use, forbearance or detention of the indebtedness secured hereby shall, to the extent permitted by the Interest Law applicable to this loan transaction, be amortized, prorated, allocated, and spread throughout the full term of said indebtedness until paid in full so that the rate or amount of interest does not exceed the applicable usury ceiling.  Notwithstanding any provision contained in this Note or any of the Loan Documents that permits the compounding of interest, including without limitation any provision by which any of the accrued interest is added to the principal amount of the indebtedness secured hereby, the total amount of interest that Borrower is obligated to pay and Lender is entitled to receive with respect to the indebtedness secured hereby shall not exceed the amount calculated on a simple (i.e., non-compounded) interest basis at the Maximum Legal Rate of Interest on principal amounts actually advanced to or for the account of Borrower and any advances made pursuant to this Note or the Loan Documents (such as for the payment of taxes, insurance premiums, and the like).
This Note may not at any time be endorsed to, or made to the order of, bearer, nor may the Note be endorsed in blank.

[remainder of this page left intentionally blank]

10

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Note as of the date first set forth above.
BORROWER:
JP ABERDEEN PARTNERS, LP,
a Delaware limited partnership
By:    JP Aberdeen LLC,
a Delaware limited liability company,
its General Partner
By:    JP Holdings, LLC, 
its Sole Member

By:     /s/ Mark D. Jordan
Name:     Mark D. Jordan
Title:    Manager

11

EXHIBIT A

PAYMENT SCHEDULE

(Attached)

12

	
										
	Year
	Periods
	Date of PMT
	Beg. Balance
	Additional Funding
	Current Balance
	Princ. + Interest
	Interest
	Principal
	Ending Balance

	3
	25
	7/1/2013
	$23,900,000
	$0
	$23,900,000
	$167,112
	$149,375
	$17,737
	$23,882,263

	3
	26
	8/1/2013
	$23,882,263
	$0
	$23,882,263
	$167,112
	$154,240
	$12,873
	$23,869,390

	3
	27
	9/1/2013
	$23,869,390
	$0
	$23,869,390
	$167,112
	$154,156
	$12,956
	$23,856,434

	3
	28
	10/1/2013
	$23,856,434
	$0
	$23,856,434
	$167,112
	$149,103
	$18,010
	$23,838,425

	3
	29
	11/1/2013
	$23,838,425
	$0
	$23,838,425
	$167,112
	$153,956
	$13,156
	$23,825,269

	3
	30
	12/1/2013
	$23,825,269
	$0
	$23,825,269
	$167,112
	$148,908
	$18,204
	$23,807,065

	3
	31
	1/1/2014
	$23,807,065
	$0
	$23,807,065
	$167,112
	$153,754
	$13,358
	$23,793,706

	3
	32
	2/1/2014
	$23,793,706
	$0
	$23,793,706
	$167,112
	$153,668
	$13,445
	$23,780,262

	3
	33
	3/1/2014
	$23,780,262
	$0
	$23,780,262
	$167,112
	$138,718
	$28,394
	$23,751,868

	3
	34
	4/1/2014
	$23,751,868
	$0
	$23,751,868
	$167,112
	$153,397
	$13,715
	$23,738,153

	3
	35
	5/1/2014
	$23,738,153
	$0
	$23,738,153
	$167,112
	$148,363
	$18,749
	$23,719,404

	3
	36
	6/1/2014
	$23,719,404
	$0
	$23,719,404
	$167,112
	$153,188
	$13,924
	$23,705,480

	4
	37
	7/1/2014
	$23,705,480
	$0
	$23,705,480
	$167,112
	$148,159
	$18,953
	$23,686,527

	4
	38
	8/1/2014
	$23,686,527
	$0
	$23,686,527
	$167,112
	$152,975
	$14,137
	$23,672,390

	4
	39
	9/1/2014
	$23,672,390
	$0
	$23,672,390
	$167,112
	$152,884
	$14,228
	$23,658,162

	4
	40
	10/1/2014
	$23,658,162
	$0
	$23,658,162
	$167,112
	$147,864
	$19,249
	$23,638,913

	4
	41
	11/1/2014
	$23,638,913
	$0
	$23,638,913
	$167,112
	$152,668
	$14,444
	$23,624,469

	4
	42
	12/1/2014
	$23,624,469
	$0
	$23,624,469
	$167,112
	$147,653
	$19,459
	$23,605,009

	4
	43
	1/1/2015
	$23,605,009
	$0
	$23,605,009
	$167,112
	$152,449
	$14,663
	$23,590,346

	4
	44
	2/1/2015
	$23,590,346
	$0
	$23,590,346
	$167,112
	$152,354
	$14,758
	$23,575,588

	4
	45
	3/1/2015
	$23,575,588
	$0
	$23,575,588
	$167,112
	$137,524
	$29,588
	$23,546,000

	4
	46
	4/1/2015
	$23,546,000
	$0
	$23,546,000
	$167,112
	$152,068
	$15,044
	$23,530,956

	4
	47
	5/1/2015
	$23,530,956
	$0
	$23,530,956
	$167,112
	$147,068
	$20,044
	$23,510,912

	4
	48
	6/1/2015
	$23,510,912
	$0
	$23,510,912
	$167,112
	$151,841
	$15,271
	$23,495,641

	5
	49
	7/1/2015
	$23,495,641
	$0
	$23,495,641
	$167,112
	$146,848
	$20,265
	$23,475,377

	5
	50
	8/1/2015
	$23,475,377
	$0
	$23,475,377
	$167,112
	$151,612
	$15,500
	$23,459,876

	5
	51
	9/1/2015
	$23,459,876
	$0
	$23,459,876
	$167,112
	$151,512
	$15,601
	$23,444,275

	5
	52
	10/1/2015
	$23,444,275
	$0
	$23,444,275
	$167,112
	$146,527
	$20,586
	$23,423,690

	5
	53
	11/1/2015
	$23,423,690
	$0
	$23,423,690
	$167,112
	$151,278
	$15,834
	$23,407,856

	5
	54
	12/1/2015
	$23,407,856
	$0
	$23,407,856
	$167,112
	$146,299
	$20,813
	$23,387,043

	5
	55
	1/1/2016
	$23,387,043
	$0
	$23,387,043
	$167,112
	$151,041
	$16,071
	$23,370,972

	5
	56
	2/1/2016
	$23,370,972
	$0
	$23,370,972
	$167,112
	$150,938
	$16,175
	$23,354,797

	5
	57
	3/1/2016
	$23,354,797
	$0
	$23,354,797
	$167,112
	$141,102
	$26,010
	$23,328,786

	5
	58
	4/1/2016
	$23,328,786
	$0
	$23,328,786
	$167,112
	$150,665
	$16,447
	$23,312,339

	5
	59
	5/1/2016
	$23,312,339
	$0
	$23,312,339
	$167,112
	$145,702
	$21,410
	$23,290,929

	5
	60
	6/1/2016
	$23,290,929
	$0
	$23,290,929
	$167,112
	$150,421
	$16,692
	$23,274,237

*  This payment schedule assumes full funding of the Loan as of the Payment Date in July of 2013.  To the extent the Loan balance is different at that time, this payment schedule will need to be revised accordingly

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}]]