Document:

exv10w71

 

Exhibit 10.71

SUMMARY OF EMPLOYMENT AGREEMENTS – MATTHEW J. MILLER

     Mr. Miller’s employment agreement with the Company was signed on September 7, 2005 with an
effective date of January 6, 2005, relating to Mr. Miller’s at-will employment in the position of
Vice President Americas Sales. Its form is substantially similar to Exhibit 10.46 to the 10-K
filed March 30, 2004. Under the employment agreement, Mr. Miller is entitled to receive (a) a
base salary of $175,000 per year (subject to increase upon annual review), plus (b) contingent
incentive bonus compensation and sales commissions based on achievement of certain management
objectives in accordance with a plan approved annually by the Compensation Committee and the
independent directors of the Board. Mr. Miller is also entitled to participate in the Company’s
401k plan, employee stock purchase plan, and other benefit plans. If the Company terminates Mr.
Miller’s employment other than for cause or disability, or if Mr. Miller resigns for good reason
(as defined in the agreement) or if he dies, then he is (or his heirs and assigns are) entitled to
receive (i) a severance period of six months if termination occurs before January 6, 2006 or of
nine months if termination occurs on or after January 6, 2006, during which he shall continue to
receive his base salary along with medical and insurance benefits, as well as (ii) a pro-rated
portion of any bonus earned prior to termination under such an approved bonus plan.

     Mr. Miller’s change of control agreement with the Company was signed on the same date, and has
the same effective date, as the employment agreement described above. The form of his change of
control agreement is substantially similar to Exhibit 10.51 to the 10-K filed March 30, 2004. In
the event of a change of control, as defined in the agreement, Mr. Miller’s stock options and
restricted stock will become fully vested. If, in connection with a change of control, Mr.
Miller’s employment is terminated other than for cause or he resigns for good reason (each as
defined in the employment agreement), then the officer is entitled to (a) all severance benefits
provided in the employment agreement described above; (b) a special severance payment in an amount
equal to, and in addition to, the officer’s base salary during the severance period defined in the
employment agreement; (c) continuation of insurance-related benefits for an additional period of
time equal to that stated in his employment agreement; and (d) to exercise any vested, unexercised
options for one year after the date of termination of employment. If any payment by BindView to
Mr. Miller would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
or any interest or penalties with respect to such excise tax, then he is entitled to receive a
gross-up payment in an amount such that, after payment by him of all taxes (including any interest
or penalties imposed with respect to such taxes), including any excise tax imposed upon the
gross-up payment, he retains an amount of the gross-up payment equal to the excise tax imposed upon
the payments.

     Mr. Miller’s indemnification agreement with the Company was signed on the same date, and has
the same effective date, as the employment agreement described above. Its form is essentially
identical to Exhibit 10.1 to the 10-Q filed November 14, 2001. Subject to certain conditions and
limitations, if Mr. Miller was, is, becomes at any time, or is threatened to be made a party to
(or a witness in or otherwise a participant in) an action, suit, proceeding, appeal, inquiry or
investigation relating to the fact that he was a director, officer or employee of the Company (and
in certain other capacities), the Indemnification Agreement provides that the Company shall
indemnify Mr. Miller for expenses, judgments, fines, penalties and amounts paid in settlement.
The agreement also provides that the Company shall advance expenses to Mr. Miller in connection
with its indemnification obligations.

Page 4exv10w72

 

Exhibit 10.72

SUMMARY OF EMPLOYMENT AGREEMENTS – DONALD E. CLOSSER

     Mr. Closser’s employment agreement with the Company was signed on September 7, 2005 with an
effective date of August 11, 2005, relating to Mr. Closser’s at-will employment in the position of
Vice President R&D Houston. Its form is substantially similar to Exhibit 10.55 to the 10-K filed
March 30, 2004. Under the employment agreement, Mr. Closser is entitled to receive (a) a base
salary of $150,000 per year (subject to increase upon annual review), plus (b) contingent incentive
bonus compensation at target of $45,000, based on achievement of certain management objectives in
accordance with a plan approved annually by the Compensation Committee and the independent
directors of the Board. Mr.Closser is also entitled to participate in the Company’s 401k plan,
employee stock purchase plan, and other benefit plans. If the Company terminates Mr. Closser’s
employment other than for cause or disability, or if Mr. Closser resigns for good reason (as
defined in the agreement) or if he dies, then he is (or his heirs and assigns are) entitled to
receive (i) a severance period of six months, during which he shall continue to receive his base
salary along with medical and insurance benefits, as well as (ii) a pro-rated portion of any bonus
earned prior to termination under such an approved bonus plan.

     Mr. Closser’s change of control agreement with the Company was signed on the same date, and
has the same effective date, as the employment agreement described above. The form of his change
of control agreement is substantially similar to Exhibit 10.56 to the 10-K filed March 30, 2004.
In the event of a change of control, as defined in the agreement, Mr. Closser’s stock options will
become fully vested. If, in connection with a change of control, Mr. Closser’s employment is
terminated other than for cause or he resigns for good reason (each as defined in the employment
agreement), then the officer is entitled to (a) all severance benefits provided in the employment
agreement described above; (b) a special severance payment in an amount equal to, and in addition
to, the officer’s base salary during the severance period defined in the employment agreement; (c)
continuation of insurance-related benefits for an additional period of time equal to that stated in
his employment agreement; and (d) to exercise any vested, unexercised options for one year after
the date of termination of employment.

     Mr. Closser’s indemnification agreement with the Company was signed on the same date, and has
the same effective date, as the employment agreement described above. Its form is essentially
identical to Exhibit 10.1 to the 10-Q filed November 14, 2001. Subject to certain conditions and
limitations, if Mr. Closser was, is, becomes at any time, or is threatened to be made a party to
(or a witness in or otherwise a participant in) an action, suit, proceeding, appeal, inquiry or
investigation relating to the fact that he was a director, officer or employee of the Company (and
in certain other capacities), the Indemnification Agreement provides that the Company shall
indemnify Mr. Closser for expenses, judgments, fines, penalties and amounts paid in settlement.
The agreement also provides that the Company shall advance expenses to Mr. Closser in connection
with its indemnification obligations.

Page 5exv10w6

 

 

Exhibit 10.6

260 SPRINGSIDE DRIVE, AKRON OH LLC, a Delaware limited liability company, as mortgagor

(“Borrower”)

to

JPMORGAN CHASE BANK, N.A., as mortgagee

(“Lender”)

 

MORTGAGE AND SECURITY AGREEMENT

 

	 	 	 	 	 
	 

	 	Dated: September 12, 2005	 	 
	 
	 	 	 	 
	 

	 	PREPARED BY AND UPON	 	 
	 

	 	RECORDATION RETURN TO:	 	 
	 
	 	 	 	 
	 

	 	Stites & Harbison, PLLC	 	 
	 

	 	400 W. Market Street, Suite 1800	 	 
	 

	 	Louisville, Kentucky 40202	 	 
	 

	 	Attention: Barry A. Hines, Esq.	 	 

 

NOTE TO CLERK/RECORDER:

THIS INSTRUMENT IS ALSO A FIXTURE FINANCING STATEMENT.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	INDEX OF DEFINED TERMS	 	 	1	 
	ARTICLE 1 - GRANTS OF SECURITY	 	 	1	 
	Section 1.1
	 	PROPERTY MORTGAGED	 	 	1	 
	Section 1.2
	 	ASSIGNMENT OF RENTS	 	 	4	 
	Section 1.3
	 	DEFINITION OF PERSONAL PROPERTY	 	 	4	 
	Section 1.4
	 	PLEDGE OF MONIES HELD	 	 	4	 
	CONDITIONS TO GRANT	 	 	4	 
	ARTICLE 2 - DEBT AND OBLIGATIONS SECURED	 	 	4	 
	Section 2.1
	 	DEBT	 	 	4	 
	Section 2.2
	 	OTHER OBLIGATIONS	 	 	5	 
	Section 2.3
	 	DEBT AND OTHER OBLIGATIONS	 	 	5	 
	Section 2.4
	 	PAYMENTS	 	 	5	 
	ARTICLE 3 - BORROWER COVENANTS	 	 	6	 
	Section 3.1
	 	INCORPORATION BY REFERENCE	 	 	6	 
	Section 3.2
	 	INSURANCE	 	 	6	 
	Section 3.3
	 	PAYMENT OF TAXES, ETC	 	 	12	 
	Section 3.4
	 	CONDEMNATION	 	 	13	 
	Section 3.5
	 	USE AND MAINTENANCE OF PROPERTY	 	 	13	 
	Section 3.6
	 	WASTE	 	 	14	 
	Section 3.7
	 	COMPLIANCE WITH LAWS; ALTERATIONS	 	 	14	 
	Section 3.8
	 	BOOKS AND RECORDS	 	 	14	 
	Section 3.9
	 	PAYMENT FOR LABOR AND MATERIALS	 	 	16	 
	Section 3.10
	 	PERFORMANCE OF OTHER AGREEMENTS	 	 	16	 
	ARTICLE 4 - SPECIAL COVENANTS	 	 	16	 
	Section 4.1
	 	PROPERTY USE	 	 	16	 
	Section 4.2
	 	ERISA	 	 	16	 
	Section 4.3
	 	SINGLE PURPOSE ENTITY	 	 	17	 
	Section 4.4
	 	EMBARGOED PERSON	 	 	19	 
	Section 4.5
	 	OFAC	 	 	20	 
	ARTICLE 5 - REPRESENTATIONS AND WARRANTIES	 	 	21	 

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 5.1
	 	BORROWER'S REPRESENTATIONS	 	 	21	 
	Section 5.2
	 	WARRANTY OF TITLE	 	 	21	 
	Section 5.3
	 	STATUS OF PROPERTY	 	 	21	 
	Section 5.4
	 	NO FOREIGN PERSON	 	 	23	 
	Section 5.5
	 	SEPARATE TAX LOT	 	 	23	 
	ARTICLE 6 - OBLIGATIONS AND RELIANCES	 	 	23	 
	Section 6.1
	 	RELATIONSHIP OF BORROWER AND LENDER	 	 	23	 
	Section 6.2
	 	NO RELIANCE ON LENDER	 	 	23	 
	Section 6.3
	 	NO LENDER OBLIGATIONS	 	 	23	 
	Section 6.4
	 	RELIANCE	 	 	23	 
	ARTICLE 7 - FURTHER ASSURANCES	 	 	24	 
	Section 7.1
	 	RECORDING FEES	 	 	24	 
	Section 7.2
	 	FURTHER ACTS	 	 	24	 
	Section 7.3
	 	CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS	 	 	24	 
	Section 7.4
	 	CONFIRMATION STATEMENT	 	 	25	 
	Section 7.5
	 	SPLITTING OF SECURITY INSTRUMENT	 	 	25	 
	Section 7.6
	 	REPLACEMENT DOCUMENTS	 	 	26	 
	ARTICLE 8 - DUE ON SALE/ENCUMBRANCE	 	 	26	 
	Section 8.1
	 	LENDER RELIANCE	 	 	26	 
	Section 8.2
	 	NO SALE/ENCUMBRANCE	 	 	26	 
	Section 8.3
	 	EXCLUDED AND PERMITTED TRANSFERS	 	 	27	 
	Section 8.4
	 	NO IMPLIED FUTURE CONSENT	 	 	28	 
	Section 8.5
	 	COSTS OF CONSENT	 	 	28	 
	Section 8.6
	 	CONTINUING SEPARATENESS REQUIREMENTS	 	 	29	 
	ARTICLE 9 - DEFAULT	 	 	29	 
	Section 9.1
	 	EVENTS OF DEFAULT	 	 	29	 
	Section 9.2
	 	DEFAULT INTEREST	 	 	31	 
	ARTICLE 10 - RIGHTS AND REMEDIES	 	 	31	 
	Section 10.1
	 	REMEDIES	 	 	31	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 10.2
	 	RIGHT OF ENTRY	 	 	37	 
	ARTICLE 11 - INDEMNIFICATION; SUBROGATION	 	 	37	 
	Section 11.1
	 	GENERAL INDEMNIFICATION	 	 	37	 
	Section 11.2
	 	ENVIRONMENTAL INDEMNIFICATION	 	 	38	 
	Section 11.3
	 	DUTY TO DEFEND AND ATTORNEYS AND OTHER FEES AND EXPENSES	 	 	41	 
	Section 11.4
	 	SURVIVAL OF INDEMNITIES	 	 	41	 
	ARTICLE 12 - SECURITY AGREEMENT	 	 	41	 
	Section 12.1
	 	SECURITY AGREEMENT	 	 	41	 
	Section 12.2
	 	FIXTURE FILING INFORMATION	 	 	42	 
	ARTICLE 13 - WAIVERS	 	 	43	 
	Section 13.1
	 	MARSHALLING AND OTHER MATTERS	 	 	43	 
	Section 13.2
	 	WAIVER OF NOTICE	 	 	43	 
	Section 13.3
	 	SOLE DISCRETION OF LENDER	 	 	43	 
	Section 13.4
	 	SURVIVAL	 	 	43	 
	Section 13.5
	 	WAIVER OF TRIAL BY JURY	 	 	44	 
	Section 13.6
	 	WAIVER OF AUTOMATIC OR SUPPLEMENTAL STAY	 	 	44	 
	ARTICLE 14 - NOTICES	 	 	44	 
	Section 14.1
	 	NOTICES	 	 	44	 
	ARTICLE 15 - APPLICABLE LAW	 	 	46	 
	Section 15.1
	 	GOVERNING LAW; JURISDICTION	 	 	46	 
	Section 15.2
	 	USURY LAWS	 	 	46	 
	Section 15.3
	 	PROVISIONS SUBJECT TO APPLICABLE LAW	 	 	46	 
	ARTICLE 16 - SECONDARY MARKET	 	 	46	 
	Section 16.1
	 	TRANSFER OF LOAN	 	 	46	 
	ARTICLE 17 - COSTS	 	 	47	 
	Section 17.1
	 	PERFORMANCE AT BORROWER'S EXPENSE	 	 	47	 
	Section 17.2
	 	ATTORNEY'S FEES FOR ENFORCEMENT	 	 	47	 
	ARTICLE 18 - DEFINITIONS	 	 	47	 
	Section 18.1
	 	GENERAL DEFINITIONS	 	 	47	 

-iii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE 19 - MISCELLANEOUS PROVISIONS	 	 	48	 
	Section 19.1
	 	NO ORAL CHANGE	 	 	48	 
	Section 19.2
	 	LIABILITY	 	 	48	 
	Section 19.3
	 	INAPPLICABLE PROVISIONS	 	 	48	 
	Section 19.4
	 	HEADINGS, ETC	 	 	48	 
	Section 19.5
	 	DUPLICATE ORIGINALS; COUNTERPARTS	 	 	48	 
	Section 19.6
	 	NUMBER AND GENDER	 	 	48	 
	Section 19.7
	 	SUBROGATION	 	 	48	 
	Section 19.8
	 	ENTIRE AGREEMENT	 	 	48	 
	Section 19.9
	 	EXCULPATION	 	 	49	 
	ARTICLE 20 - SPECIAL STATE OF OHIO PROVISIONS	 	 	49	 
	ARTICLE 21 - RELEASE PROVISIONS	 	 	49	 

-iv-

 

INDEX
OF DEFINED TERMS

	 	 	 	 	 
	 	 	Page	 
	“ADA”
	 	 	14	 
	“Applicable Laws”
	 	 	14	 
	“attorneys’ fees,”
	 	 	45	 
	“attorneys”
	 	 	38	 
	“Bankruptcy Code”
	 	 	2	 
	“Business Day”
	 	 	43	 
	“Cash Management Agreement”
	 	 	4	 
	“Collateral”
	 	 	39	 
	“counsel fees”
	 	 	45	 
	“Debt”
	 	 	5	 
	“Default Rate”
	 	 	31	 
	“Embargoed Person”
	 	 	20	 
	“Environmental Indemnity”
	 	 	6	 
	“ERISA”
	 	 	17	 
	“Escrow Agreement”
	 	 	3	 
	“Event of Default”
	 	 	29	 
	“Event”
	 	 	44	 
	“Exculpated Portion”
	 	 	37	 
	“fees and expenses”
	 	 	38	 
	“Guarantor”
	 	 	18	 
	“Improvements”
	 	 	1	 
	“Insurance Premiums”
	 	 	9	 
	“Insured Casualty”
	 	 	10	 
	“Intangibles”
	 	 	3	 
	“Investor”
	 	 	44	 
	“Land”
	 	 	1	 
	“Lease”
	 	 	2	 
	“Leases”
	 	 	2	 
	“legal fees”
	 	 	45	 
	“Lender”
	 	 	1	 
	“Loan Documents”
	 	 	6	 
	“Loan”
	 	 	28	 
	“Note”
	 	 	1	 
	“Obligations
	 	 	5	 
	“OFAC”
	 	 	20	 
	“Other Charges”
	 	 	12	 
	“Other Loan Documents”
	 	 	6	 
	“Other Obligations”
	 	 	5	 
	“Patriot Act”
	 	 	21	 
	“Permitted Exceptions”
	 	 	21	 
	“person”
	 	 	45	 
	“Personal Property
	 	 	4	 
	“Policies”
	 	 	8	 

 

 

	 	 	 	 	 
	 	 	Page	 
	“Policy”
	 	 	8	 
	“Prohibited Person”
	 	 	20	 
	“Property”
	 	 	1	 
	“Qualified Insurer”
	 	 	8	 
	“Rating Agency”
	 	 	44	 
	“Rents”
	 	 	2	 
	“Securities”
	 	 	44	 
	“Security Instrument”
	 	 	1	 
	“Taxes”
	 	 	12	 
	“Uniform Commercial Code”
	 	 	2	 

2

 

MORTGAGE AND SECURITY AGREEMENT

     THIS MORTGAGE AND SECURITY AGREEMENT (this “Security Instrument”) is made as of the 12th day
of September, 2005, by 260 SPRINGSIDE DRIVE, AKRON OH LLC, a Delaware limited liability company,
having its principal place of business at 1521 Westbranch Drive, Suite 200, McLean, Virginia 22102
(“Borrower”), to JPMORGAN CHASE BANK, N.A., a banking association chartered under the laws of the
United States of America, having its principal place of business at 270 Park Avenue, New York, New
York 10017, as mortgagee (“Lender”).

RECITALS:

     Borrower by its Fixed Rate Note of even date herewith given to Lender is indebted to Lender in
the principal sum of $12,588,000.00 in lawful money of the United States of America (such Fixed
Rate Note, together with all extensions, renewals, modifications, substitutions and amendments
thereof, shall collectively be referred to as the “Note”), with interest from the date thereof at
the rates set forth in the Note, principal and interest to be payable in accordance with the terms
and conditions provided in the Note, and with a final maturity date of October 1, 2015.

     Borrower desires to secure the payment of the Debt (as defined in Article 2) and the
performance of all of its obligations under the Note and the Other Obligations (as defined in
Article 2 ).

ARTICLE 1 — GRANTS OF SECURITY

     Section 1.1 PROPERTY MORTGAGED. Borrower does hereby irrevocably, unconditionally and
absolutely mortgage, grant, bargain, sell, pledge, enfeoff, assign, warrant, transfer and convey to
Lender (with power of sale), and does hereby grant a first priority security interest to Lender in,
the following property, rights, interests and estates now owned, or hereafter acquired, by Borrower
(collectively, the “Property”):

     (a) Land. The real property described in Exhibit A attached hereto and
made a part hereof (collectively, the “Land”), together with additional lands, estates and
development rights hereafter acquired by Borrower for use in connection with the
development, ownership or occupancy of such real property, and all additional lands and
estates therein which may, from time to time, by supplemental mortgage or otherwise be
expressly made subject to the lien of this Security Instrument;

     (b) Improvements. The buildings, structures, fixtures, additions, accessions,
enlargements, extensions, modifications, repairs, replacements and improvements now or
hereafter erected or located on the Land (the “Improvements”);

     (c) Easements. All easements, rights-of-way or use, rights, strips and gores
of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights
and powers, air rights and development rights, and all estates, rights, titles, interests,
privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any
nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the

 

 

Land
and the Improvements and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or proposed, in front of or
adjoining the Land, to the center line thereof and all the estates, rights, titles,
interests, dower and rights of dower, curtesy and rights of curtesy, property, possession,
claim and demand whatsoever, both at law and in equity, of Borrower of, in and to the Land
and the Improvements and every part and parcel thereof, with the appurtenances thereto;

     (d) Fixtures and Personal Property. All machinery, equipment, goods,
inventory, fixtures (including, but not limited to, all heating, air conditioning, plumbing,
lighting, communications and elevator fixtures) and other property of every kind and nature
whatsoever owned by Borrower, or in which Borrower has or shall have an interest, now or
hereafter located upon the Land and the Improvements, or appurtenant thereto, and usable in
connection with the present or future use, maintenance, enjoyment, operation and occupancy
of the Land and the Improvements and all building equipment, materials and supplies of any
nature whatsoever owned by Borrower, or in which Borrower has or shall have an interest, now
or hereafter located upon the Land and the Improvements, or appurtenant thereto, or usable
in connection with the present or future operation and occupancy of the Land and the
Improvements, and the right, title and interest of Borrower in and to any of the Personal
Property (as hereinafter defined) which may be subject to any security interests, as defined
in the Uniform Commercial Code, as adopted and enacted by the state or states where any of
the Property is located (the “Uniform Commercial Code”), superior in lien to the lien of
this Security Instrument and all proceeds and products of the above;

     (e) Leases and Rents. All leases and other agreements affecting the use,
enjoyment or occupancy of the Land and the Improvements heretofore or hereafter entered
into, whether before or after the filing by or against Borrower of any petition for relief
under 11 U.S.C. §101 et seq., as the same may be amended from time to time
(the “Bankruptcy Code”) (individually, a “Lease”; collectively, the “Leases”) and all right,
title and interest of Borrower, its successors and assigns therein and thereunder,
including, without limitation, cash or securities deposited thereunder to secure the
performance by the lessees of their obligations thereunder and all rents (including all
tenant security and other deposits), additional rents, revenues, issues and profits
(including all oil and gas or other mineral royalties and bonuses) from the Land and the
Improvements whether paid or accruing before or after the filing by or against Borrower of
any petition for relief under the Bankruptcy Code (collectively the “Rents”) and all
proceeds from the sale or other disposition of the Leases and the right to receive and apply
the Rents to the payment of the Debt;

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

     (g) Insurance Proceeds. All proceeds of and any unearned premiums on any
insurance policies covering the Property, including, without limitation, the right to

2

 

receive and apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Property;

     (h) Tax Certiorari. All refunds, rebates or credits in connection with a
reduction in real estate taxes and assessments charged against the Property as a result of
tax certiorari or any applications or proceedings for reduction;

     (i) Conversion. All proceeds of the conversion, voluntary or involuntary, of
any of the foregoing including, without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims;

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

     (k) Agreements. All agreements, contracts (including purchase, sale, option,
right of first refusal and other contracts pertaining to the Property), certificates,
instruments, franchises, permits, licenses, approvals, consents, plans, specifications and
other documents, now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or operation of
the Property (including any Improvements or respecting any business or activity conducted on
the Land and any part thereof) and all right, title and interest of Borrower therein and
thereunder, including, without limitation, the right, upon the happening of any default
hereunder, to receive and collect any sums payable to Borrower thereunder;

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

     (m) Accounts. All accounts, accounts receivable, escrows (including, without
limitation, all escrows, deposits, reserves and impounds established pursuant to that
certain Escrow Agreement for Reserves and Impounds of even date herewith between Borrower
and Lender; hereinafter, the “Escrow Agreement”), documents, instruments, chattel paper,
deposit accounts, investment property, claims, reserves (including deposits)
representations, warranties and general intangibles, as one or more of the foregoing terms
may be defined in the Uniform Commercial Code, and all contract rights, franchises, books,
records, plans, specifications, permits, licenses (to the extent assignable), approvals,
actions, choses, commercial tort claims, suits, proofs of claim in bankruptcy and causes of
action which now or hereafter relate to, are derived from or are used in connection with the
Property, or the use, operation, maintenance, occupancy or enjoyment thereof or the conduct
of any business or activities thereon (hereinafter collectively called the “Intangibles”);
and

     (n) Other Rights. Any and all other rights of Borrower in and to the Property
and any accessions, renewals, replacements and substitutions of all or any portion of the
Property and all proceeds derived from the sale, transfer, assignment or financing of the
Property or any portion thereof.

3

 

     Section 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely and unconditionally
assigns to Lender Borrower’s right, title and interest in and to all current and future Leases and
Rents; it being intended by Borrower that this assignment constitutes a present, absolute and
unconditional assignment and not an assignment for additional security only. Nevertheless, subject
to the terms of this Section 1.2 and the terms and conditions of that certain Assignment of
Rents and Leases, of even date herewith from Borrower to Lender, Lender grants to Borrower a
revocable license to collect and receive the Rents. Borrower shall hold the Rents, or a portion
thereof sufficient to discharge all current sums due on the Debt, for use in the payment of such
sums.

     Section 1.3 DEFINITION OF PERSONAL PROPERTY. For purposes of this Security
Instrument, the Property identified in Subsections 1.1(d) through 1.1(n), inclusive, shall
be collectively referred to herein as the “Personal Property.”

     Section 1.4 PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender any and all
monies now or hereafter held by Lender, including, without limitation, any sums deposited in the
Funds (as defined in the Escrow Agreement), all insurance proceeds described in Section 3.2
and condemnation awards or payments described in Section 3.4, as additional security for
the Obligations until expended or applied as provided in this Security Instrument.

CONDITIONS TO GRANT

          TO HAVE AND TO HOLD the above granted and described Property unto and to the use and
benefit of Lender, and the successors and assigns of Lender, forever;

          PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall well
and truly pay to Lender the Debt at the time and in the manner provided in the Note and this
Security Instrument, shall well and truly perform the Other Obligations as set forth in this
Security Instrument and shall well and truly abide by and comply with each and every covenant and
condition set forth herein and in the Note, these presents and the estate hereby granted shall
cease, terminate and be void; provided however, that Borrower’s obligation to indemnify and
hold harmless Lender pursuant to the provisions hereof with respect to matters relating to any
period of time during which this Security Instrument was in effect shall survive any such payment
or release.

ARTICLE 2 — DEBT AND OBLIGATIONS SECURED

     Section 2.1 DEBT. This Security Instrument and the grants, assignments and transfers
made in Article 1 are given for the purpose of securing the following, in such order of
priority as Lender may determine in its sole discretion (the “Debt”):

     (a) the payment of the indebtedness evidenced by the Note in lawful money of the United
States of America;

     (b) the payment of interest, default interest, late charges and other sums, as provided
in the Note, this Security Instrument or the Other Loan Documents (as hereinafter defined);

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     (c) the payment of all other moneys agreed or provided to be paid by Borrower in the
Note, this Security Instrument or the Other Loan Documents (as hereinafter defined);

     (d) the payment of all sums advanced pursuant to this Security Instrument to protect
and preserve the Property and the lien and the security interest created hereby pursuant to
and in compliance with Ohio Revised Code Section 5301.233; and

     (e) the payment of all sums advanced, costs and expenses incurred, and processing fees
charged by Lender in connection with the Debt or any part thereof, any renewal, extension,
or change of or substitution for the Debt or any part thereof, or the acquisition or
perfection of the security therefor, whether made or incurred at the request of Borrower or
Lender.

     Section 2.2 OTHER OBLIGATIONS. This Security Instrument and the grants, assignments
and transfers made in Article 1 are also given for the purpose of securing the following
(the “Other Obligations”):

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

     (b) the performance of each obligation of Borrower contained in any other agreement
given by Borrower to Lender which is for the purpose of further securing the obligations
secured hereby, and any amendments, modifications and changes thereto; and

     (c) the performance of each obligation of Borrower contained in any renewal, extension,
amendment, modification, consolidation, change of, or substitution or replacement for, all
or any part of the Note, this Security Instrument or the Other Loan Documents (as
hereinafter defined).

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

     Section 2.4 PAYMENTS. Unless payments are made in the required amount in immediately
available funds at the place where the Note is payable, remittances in payment of all or any part
of the Debt shall not, regardless of any receipt or credit issued therefor, constitute payment
until the required amount is actually received by Lender in funds immediately available at the
place where the Note is payable (or any other place as Lender, in Lender’s sole discretion, may
have established by delivery of written notice thereof to Borrower) and shall be made and accepted
subject to the condition that any check or draft may be handled for collection in accordance with
the practice of the collecting bank or banks. Acceptance by Lender of any payment in an amount
less than the amount then due shall be deemed an acceptance on account only, and the failure to pay
the entire amount then due shall be and continue to be an Event of Default (as hereinafter
defined).

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ARTICLE 3 — BORROWER COVENANTS

     Borrower covenants and agrees that:

     Section 3.1 INCORPORATION BY REFERENCE. All the covenants, conditions and agreements
contained in (a) the Note, and (b) all and any of the documents other than the Note or this
Security Instrument now or hereafter executed by Borrower and/or others and by or in favor of
Lender in connection with the creation of the Obligations, the payment of any other sums owed by
Borrower to Lender or the performance of any Obligations (collectively the “Other Loan Documents”),
are hereby made a part of this Security Instrument to the same extent and with the same force as if
fully set forth herein. The term “Loan Documents” as used herein shall individually and
collectively refer to the Note, this Security Instrument and the Other Loan Documents;
provided, however, that notwithstanding any provision of this Security Instrument
to the contrary, the Obligations of the Borrower under that certain Environmental Indemnity
Agreement of even date herewith executed by Borrower in favor of Lender (the “Environmental
Indemnity”) shall not be deemed or construed to be secured by this Security Instrument or otherwise
restricted or affected by the foreclosure of the lien hereof or any other exercise by Lender of its
remedies hereunder or under any other Loan Document, such Environmental Indemnity being intended by
the signatories thereto to be its (or their) unsecured obligation.

     Section 3.2 INSURANCE.

     (a) Borrower shall obtain and maintain, and shall pay all premiums in accordance with
Subsection 3.2(b) below for, insurance for Borrower and the Property providing at
least the following coverages:

     (i) comprehensive all risk insurance (including, without limitation, riot and
civil commotion, vandalism, malicious mischief, water, fire, burglary and theft and
without any exclusion for terrorism) on the Improvements and the Personal Property
and in each case (A) in an amount equal to 100% of the “Full Replacement Cost,”
which for purposes of this Security Instrument shall mean actual replacement value
(exclusive of costs of excavations, foundations, underground utilities and footings)
with a waiver of depreciation; (B) containing an agreed amount endorsement with
respect to the Improvements and Personal Property waiving all co-insurance
provisions; (C) providing that the deductible shall not exceed the lesser of
$10,000.00 or one percent (1%) of the face value of the policy; and (D) containing
Demolition Costs, Increased Cost of Construction and “Ordinance or Law Coverage” or
“Enforcement” endorsements in amounts satisfactory to Lender if any of the
Improvements or the use of the Property shall at any time constitute legal
non-conforming structures or uses or the ability to rebuild the Improvements is
restricted or prohibited. The Full Replacement Cost may be redetermined from time
to time by an appraiser or contractor designated and paid by Lender or by an
engineer or appraiser in the regular employ of the insurer. No omission on the part
of Lender to request any such appraisals shall relieve Borrower of any of its
obligations under this Subsection;

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     (ii) comprehensive general liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about the
Property, such insurance (A) to be on the so-called “occurrence” form with a
combined single limit of not less than $1,000,000.00 and not less than $3,000,000.00
if the Property has one or more elevators, as well as liquor liability insurance in
a minimum amount of $2,000,000.00 if any part of the Property is covered by a liquor
license and an aggregate coverage limit acceptable to Lender; (B) to continue at not
less than the aforesaid limit until required to be changed by Lender in writing by
reason of changed economic conditions making such protection inadequate; (C) to
cover at least the following hazards: (1) premises and operations; (2) products and
completed operations on an “if any” basis; (3) independent contractors; (4) blanket
contractual liability for all written and oral contracts; (5) contractual liability
covering the indemnities contained in Article 11 hereof to the extent the
same is available; and (D) to be without deductible;

     (iii) business income insurance (A) with loss payable to Lender; (B) covering
losses of income and Rents derived from the Property and any non-insured property on
or adjacent to the Property resulting from any risk or casualty whatsoever; (C)
containing an extended period of indemnity endorsement which provides that after the
physical loss to the Improvements and Personal Property has been repaired, the
continued loss of income will be insured until such income either returns to the
same level it was at prior to the loss, or the expiration of eighteen (18) months
from the date of the loss, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period; and (D) in an amount equal to
100% of the projected gross income from the Property for a period of eighteen (18)
months. The amount of such business income insurance shall be determined by Lender
prior to the date hereof and at least once each year thereafter based on Borrower’s
reasonable estimate of the gross income from the Property for the succeeding
eighteen (18) month period. All insurance proceeds payable to Lender pursuant to
this Subsection 3.2(a) shall be held by Lender and shall be applied to the
obligations secured hereunder from time to time due and payable hereunder and under
the Note; provided, however, that nothing herein contained shall be
deemed to relieve Borrower of its obligations to pay the obligations secured
hereunder on the respective dates of payment provided for in the Note except to the
extent such amounts are actually paid out of the proceeds of such business income
insurance;

     (iv) at all times during which structural construction, repairs or alterations
are being made with respect to the Improvements: (A) owner’s contingent or
protective liability insurance covering claims not covered by or under the terms or
provisions of the above mentioned commercial general liability insurance policy; and
(B) the insurance provided for in Subsection 3.2(a)(i) written in a
so-called builder’s risk completed value form (1) on a non-reporting basis, (2)
against all risks insured against pursuant to Subsection 3.2(a)(i), (3)
including permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;

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     (v) workers’ compensation, subject to the statutory limits of the state in
which the Property is located, and employer’s liability insurance with a limit of at
least $1,000,000.00 per accident and per disease per employee, and $1,000,000.00 for
disease aggregate in respect of any work or operations on or about the Property, or
in connection with the Property or its operation (if applicable);

     (vi) comprehensive boiler and machinery insurance (without exclusion for
explosion), if applicable, in amounts as shall be reasonably required by Lender and
covering all boilers or other pressure vessels, machinery and equipment located at
or about the Property (including, without limitation, electrical equipment,
sprinkler systems, heating and air conditioning equipment, refrigeration equipment
and piping);

     (vii) if any portion of the Improvements is currently or at any time in the
future located in a federally designated “special flood hazard area,” flood hazard
insurance in an amount equal to the Full Replacement Cost; and

     (viii) such other insurance and in such amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time are
commonly insured against for property similar to the Property located in or around
the region in which the Property is located, including, without limitation,
earthquake insurance (in the event the Property is located in an area with a high
degree of seismic activity), sinkhole insurance, mine subsidence insurance and
environmental insurance.

     (b) All insurance provided for in Subsection 3.2(a) hereof shall be obtained
under valid and enforceable policies (the “Policies” or in the singular, the “Policy”), in
such forms and, from time to time after the date hereof, in such amounts as may from time to
time be satisfactory to Lender, issued by financially sound and responsible insurance
companies authorized to do business in the state in which the Property is located as
admitted or unadmitted carriers which, in either case, have been approved by Lender and
which have a claims paying ability rating of A or better issued by Standard & Poor’s Ratings
Group or with a claims paying ability rating otherwise acceptable to Lender (each such
insurer shall be referred to below as a “Qualified Insurer”). Such Policies shall not be
subject to invalidation due to the use or occupancy of the Property for purposes more
hazardous than the use of the Property at the time such Policies were issued. No Policy
required under Sections 3.2(a)(i) and (iii) hereof shall contain an exclusion from
coverage under such Policy for loss or damage incurred as a result of an act of terrorism or
similar acts of sabotage. Not less than thirty (30) days prior to the expiration dates of
the Policies theretofore furnished to Lender pursuant to Subsection 3.2(a),
certified copies of the Policies marked “premium paid” or accompanied by evidence
satisfactory to Lender of payment of the premiums due thereunder (the “Insurance Premiums”),
shall be delivered by Borrower to Lender; provided, however, that in the
case of renewal Policies, Borrower may furnish Lender with binders therefor to be followed
by the original Policies when issued.

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     (c) Borrower shall not obtain (i) separate insurance concurrent in form or contributing
in the event of loss with that required in Subsection 3.2(a) to be furnished by, or
which may be reasonably required to be furnished by, Borrower, or (ii) any umbrella or
blanket liability or casualty Policy unless, in each case, Lender’s interest is included
therein as provided in this Security Instrument and such Policy is issued by a Qualified
Insurer. If Borrower obtains separate insurance or an umbrella or a blanket Policy,
Borrower shall notify Lender of the same and shall cause certified copies of each Policy to
be delivered as required in Subsection 3.2(a). Any blanket insurance Policy shall
specifically allocate to the Property the amount of coverage from time to time required
hereunder and shall otherwise provide the same protection as would a separate Policy
insuring only the Property in compliance with the provisions of Subsection 3.2(a).

     (d) All Policies of insurance provided for or contemplated by Subsection 3.2(a)
shall name Lender, its successors and assigns, including any servicers, trustees or other
designees of Lender, and Borrower as the insured or additional insured, as their respective
interests may appear, and in the case of property damage, boiler and machinery, and flood
insurance, shall contain a so-called New York standard non-contributing Lender clause in
favor of Lender providing that the loss thereunder shall be payable to Lender.

     (e) All Policies of insurance provided for in Subsection 3.2(a) shall contain
clauses or endorsements to the effect that:

     (i) no act or negligence of Borrower, or anyone acting for Borrower, or of any
tenant under any Lease or other occupant, or failure to comply with the provisions
of any Policy which might otherwise result in a forfeiture of the insurance or any
part thereof, shall in any way affect the validity or enforceability of the
insurance insofar as Lender is concerned;

     (ii) the Policy shall not be materially changed (other than to increase the
coverage provided on the Property thereby) or canceled without at least thirty (30)
days’ prior written notice to Lender and any other party named therein as an
insured;

     (iii) each Policy shall provide that the issuers thereof shall give written
notice to Lender if the Policy has not been renewed thirty (30) days prior to its
expiration; and

     (iv) Lender shall not be liable for any Insurance Premiums thereon or subject
to any assessments thereunder.

     (f) Borrower shall furnish to Lender within ten (10) calendar days after Lender’s
request therefor, a statement certified by Borrower or a duly authorized officer of Borrower
of the amounts of insurance maintained in compliance herewith, of the risks covered by such
insurance and of the insurance company or companies which carry such insurance and, if
requested by Lender, verification of the adequacy of such insurance by an independent
insurance broker or appraiser acceptable to Lender.

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     (g) If at any time Lender is not in receipt of written evidence that all insurance
required hereunder is in full force and effect, Lender shall have the right but not the
obligation, without notice to Borrower, to take such action as Lender deems necessary to
protect its interest in the Property, including, without limitation, the obtaining of such
insurance coverage as Lender in its sole discretion deems appropriate, and all expenses
incurred by Lender in connection with such action or in obtaining such insurance and keeping
it in effect shall be paid by Borrower to Lender upon demand and until paid shall be secured
by this Security Instrument and shall bear interest at the Default Rate (as hereinafter
defined).

     (h) If the Property shall be damaged or destroyed, in whole or in part, by fire or
other casualty, Borrower shall give prompt notice thereof to Lender.

     (i) In case of loss covered by Policies, Lender may either (1) settle and
adjust any claim without the consent of Borrower, or (2) allow Borrower to agree
with the insurance company or companies on the amount to be paid upon the loss;
provided, that Borrower may adjust losses aggregating not in excess of
$100,000.00 if such adjustment is carried out in a competent and timely manner, and
provided that in any case Lender shall and is hereby authorized to collect and
receive any such insurance proceeds; and the expenses incurred by Lender in the
adjustment and collection of insurance proceeds shall become part of the Debt and be
secured hereby and shall be reimbursed by Borrower to Lender upon demand (unless
deducted by and reimbursed to Lender from such proceeds).

     (ii) In the event of any insured damage to or destruction of the Property or
any part thereof (herein called an “Insured Casualty”), if (A) in the reasonable
judgment of Lender, the Property can be restored within six (6) months after
insurance proceeds are made available and at least six (6) months prior to the
Maturity Date (as defined in the Note) to an economic unit not less valuable
(including an assessment by Lender of the impact of the termination of any Leases
due to such Insured Casualty) and not less useful than the same was prior to the
Insured Casualty, and after such restoration will adequately secure the outstanding
balance of the Debt, and (B) no Event of Default (hereinafter defined) shall have
occurred and be then continuing, then the proceeds of insurance shall be applied to
reimburse Borrower for the cost of restoring, repairing, replacing or rebuilding the
Property or part thereof subject to Insured Casualty, as provided below; and
Borrower hereby covenants and agrees forthwith to commence and diligently to
prosecute such restoring, repairing, replacing or rebuilding; provided,
however, in any event Borrower shall pay all costs (and if required by
Lender, Borrower shall deposit the total thereof with Lender in advance) of such
restoring, repairing, replacing or rebuilding in excess of the net proceeds of
insurance made available pursuant to the terms hereof.

     (iii) Except as provided above, the proceeds of insurance collected upon any
Insured Casualty shall, at the option of Lender in its sole discretion, be applied
to the payment of the Debt or applied to reimburse Borrower for the cost
of restoring, repairing, replacing or rebuilding the Property or part thereof
subject

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to the Insured Casualty, in the manner set forth below. Any such
application to the Debt shall not be considered a voluntary prepayment requiring
payment of the prepayment consideration provided in the Note, and shall not reduce
or postpone any payments otherwise required pursuant to the Note, other than the
final payment on the Note.

     (iv) If proceeds of insurance, if any, are made available to Borrower for the
restoring, repairing, replacing or rebuilding of the Property, Borrower hereby
covenants to restore, repair, replace or rebuild the same to be of at least equal
value and of substantially the same character as prior to such damage or
destruction, all to be effected in accordance with applicable law and plans and
specifications approved in advance by Lender.

     (v) If Borrower is entitled to reimbursement out of insurance proceeds held by
Lender, such proceeds shall be disbursed from time to time upon Lender being
furnished with (1) evidence satisfactory to it (which evidence may include
inspection[s] of the work performed) that the restoration, repair, replacement and
rebuilding covered by the disbursement has been completed in accordance with plans
and specifications approved by Lender, (2) evidence satisfactory to it of the
estimated cost of completion of the restoration, repair, replacement and rebuilding,
(3) funds, or, at Lender’s option, assurances satisfactory to Lender that such funds
are available, sufficient in addition to the proceeds of insurance to complete the
proposed restoration, repair, replacement and rebuilding, and (4) such architect’s
certificates, waivers of lien, contractor’s sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of cost, payment and
performance as Lender may reasonably require and approve; and Lender may, in any
event, require that all plans and specifications for such restoration, repair,
replacement and rebuilding be submitted to and approved by Lender prior to
commencement of work. With respect to disbursements to be made by Lender: (A) no
payment made prior to the final completion of the restoration, repair, replacement
and rebuilding shall exceed ninety percent (90%) of the value of the work performed
from time to time; (B) funds other than proceeds of insurance shall be disbursed
prior to disbursement of such proceeds; and (C) at all times, the undisbursed
balance of such proceeds remaining in the hands of Lender, together with funds
deposited for that purpose or irrevocably committed to the satisfaction of Lender by
or on behalf of Borrower for that purpose, shall be at least sufficient in the
reasonable judgment of Lender to pay for the cost of completion of the restoration,
repair, replacement or rebuilding, free and clear of all liens or claims for lien
and the costs described in Subsection 3.2(h)(vi) below. Any surplus which
may remain out of insurance proceeds held by Lender after payment of such costs of
restoration, repair, replacement or rebuilding shall be paid to any party entitled
thereto. In no event shall Lender assume any duty or obligation for the adequacy,
form or content of any such plans and specifications, nor for the performance,
quality or workmanship of any restoration, repair, replacement and rebuilding.

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     (vi) Notwithstanding anything to the contrary contained herein, the proceeds of
insurance reimbursed to Borrower in accordance with the terms and provisions of this
Security Instrument shall be reduced by the reasonable costs (if any) incurred by
Lender in the adjustment and collection thereof and in the reasonable costs incurred
by Lender of paying out such proceeds (including, without limitation, reasonable
attorneys’ fees and costs paid to third parties for inspecting the restoration,
repair, replacement and rebuilding and reviewing the plans and specifications
therefor).

     Section 3.3 PAYMENT OF TAXES, ETC.

     (a) Borrower shall pay all taxes, assessments, water rates, sewer rents, governmental
impositions, and other charges, including without limitation, vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Land, now or hereafter levied
or assessed or imposed against the Property or any part thereof (the “Taxes”), all ground
rents, maintenance charges and similar charges, now or hereafter levied or assessed or
imposed against the Property or any part thereof (the “Other Charges”), and all charges for
utility services provided to the Property as same become due and payable. Borrower will
deliver to Lender, promptly upon Lender’s request, evidence satisfactory to Lender that the
Taxes, Other Charges and utility service charges have been so paid or are not then
delinquent. Borrower shall not allow and shall promptly cause to be paid and discharged any
lien or charge whatsoever which may be or become a lien or charge against the Property.
Except to the extent sums sufficient to pay all Taxes and Other Charges have been deposited
with Lender in accordance with the terms of this Security Instrument, Borrower shall furnish
to Lender paid receipts for the payment of the Taxes and Other Charges prior to the date the
same shall become delinquent.

     (b) After prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any of the Taxes,
provided that (i) no Event of Default has occurred and is continuing under the Note,
this Security Instrument or any of the Other Loan Documents, (ii) Borrower is permitted to
do so under the provisions of any other mortgage, deed of trust or deed to secure debt
affecting the Property, (iii) such proceeding shall suspend the collection of the Taxes from
Borrower and from the Property or Borrower shall have paid all of the Taxes under protest,
(iv) such proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower is subject and shall not constitute a
default thereunder, (v) neither the Property nor any part thereof or interest therein will
be in danger of being sold, forfeited, terminated, canceled or lost, (vi) Borrower shall
have set aside and deposited with Lender adequate reserves for the payment of the Taxes,
together with all interest and penalties thereon, unless Borrower has paid all of the Taxes
under protest, and (vii) Borrower shall have furnished the security as may be required in
the proceeding, or as may be requested by Lender to insure the payment of any contested
Taxes, together with all interest and penalties thereon.

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     Section 3.4 CONDEMNATION. Borrower shall promptly give Lender notice of the actual or
threatened commencement of any condemnation or eminent domain proceeding and shall deliver to
Lender copies of any and all papers served in connection with such proceedings. Lender is hereby
irrevocably appointed as Borrower’s attorney-in-fact, coupled with an interest, with exclusive
power to collect, receive and retain any award or payment for said condemnation or eminent domain
and to make any compromise or settlement in connection with such proceeding, subject to the
provisions of this Security Instrument. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including but not limited to any transfer made in
lieu of or in anticipation of the exercise of such taking), Borrower shall continue to pay the Debt
at the time and in the manner provided for its payment in the Note and in this Security Instrument
and the Debt shall not be reduced until any award or payment therefor shall have been actually
received and applied by Lender, after the deduction of expenses of collection, to the reduction or
discharge of the Debt. Lender shall not be limited to the interest paid on the award by the
condemning authority but shall be entitled to receive out of the award interest at the rate or
rates provided herein or in the Note. Borrower shall cause the award or payment made in any
condemnation or eminent domain proceeding, which is payable to Borrower, to be paid directly to
Lender. Lender may apply any award or payment to the reduction or discharge of the Debt whether or
not then due and payable (such application to be free from any prepayment consideration provided in
the Note, except that if an Event of Default, or an event which with notice and/or the passage of
time, or both, would constitute an Event of Default, has occurred, then such application shall be
subject to the full prepayment consideration computed in accordance with the Note). If the
Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of the award or
payment, Lender shall have the right, whether or not a deficiency judgment on the Note shall have
been sought, recovered or denied, to receive the award or payment, or a portion thereof sufficient
to pay the Debt.

     Section 3.5 USE AND MAINTENANCE OF PROPERTY. Borrower shall cause the Property to be
maintained and operated in a good and safe condition and repair and in keeping with the condition
and repair of properties of a similar use, value, age, nature and construction. Borrower shall not
use, maintain or operate the Property in any manner which constitutes a public or private nuisance
or which makes void, voidable, or cancelable, or increases the premium of, any insurance then in
force with respect thereto. The Improvements and the Personal Property shall not be removed,
demolished or materially altered (except for normal replacement of the Personal Property with items
of the same utility and of equal or greater value) without the prior written consent of Lender.
Borrower shall promptly repair, replace or rebuild any part of the Property which may be destroyed
by any casualty, or become damaged, worn or dilapidated or which may be affected by any proceeding
of the character referred to in Section 3.4 hereof and shall complete and pay for any
structure at any time in the process of construction or repair on the Land. Borrower shall not
initiate, join in, acquiesce in, or consent to any change in any private restrictive covenant,
zoning law or other public or private restriction, limiting or defining the uses which may be made
of the Property or any part thereof. If under applicable zoning provisions the use of all or any
portion of the Property is or shall become a nonconforming use, Borrower will not cause or permit
the nonconforming use to be discontinued or abandoned without the express written consent of
Lender. Borrower shall not take any steps whatsoever to convert the Property, or any portion
thereof, to a condominium or cooperative form of management.

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     Section 3.6 WASTE. Borrower shall not commit or suffer any waste of the Property or,
without first obtaining such additional insurance as may be necessary to cover a proposed change in
use of the Property, make any change in the use of the Property which will in any way materially
increase the risk of fire or other hazard arising out of the operation of the Property, or take any
action that might invalidate or give cause for cancellation of any Policy, or do or permit to be
done thereon anything that may in any way impair the value of the Property or the security of this
Security Instrument. Borrower will not, without the prior written consent of Lender, permit any
drilling or exploration for or extraction, removal, or production of any minerals from the surface
or the subsurface of the Land, regardless of the depth thereof or the method of mining or
extraction thereof.

     Section 3.7 COMPLIANCE WITH LAWS; ALTERATIONS.

     (a) Borrower shall promptly comply with all existing and future federal, state and
local laws, orders, ordinances, governmental rules and regulations or court orders affecting
or which may be interpreted to affect the Property, or the use thereof, including, but not
limited to, the Americans with Disabilities Act (the “ADA”) (collectively “Applicable
Laws”).

     (b) Notwithstanding any provisions set forth herein or in any document regarding
Lender’s approval of alterations of the Property, Borrower shall not alter the Property in
any manner which would increase Borrower’s responsibilities for compliance with Applicable
Laws without the prior written approval of Lender. Lender’s approval of the plans,
specifications, or working drawings for alterations of the Property shall create no
responsibility or liability on behalf of Lender for their completeness, design, sufficiency
or their compliance with Applicable Laws. The foregoing shall apply to tenant improvements
constructed by Borrower or by any of its tenants. Lender may condition any such approval
upon receipt of a certificate of compliance with Applicable Laws from an independent
architect, engineer, or other person acceptable to Lender.

     (c) Borrower shall give prompt notice to Lender of the receipt by Borrower of any
notice related to a violation of any Applicable Laws and of the commencement of any
proceedings or investigations which relate to compliance with Applicable Laws.

     (d) Borrower shall take appropriate measures to prevent and will not engage in or
knowingly permit any illegal activities at the Property.

     Section 3.8 BOOKS AND RECORDS.

     (a) Borrower shall keep accurate books and records of account in accordance with sound
accounting principles in which full, true and correct entries shall be promptly made with
respect to Borrower, the Property and the operation thereof, and will permit all such books
and records (including without limitation all contracts, statements, invoices, bills and
claims for labor, materials and services supplied for the construction, repair or operation
to Borrower of the Improvements) to be inspected or audited and copies made by Lender and
its representatives during normal business hours and at any other reasonable times.
Borrower represents that its chief executive office is as set forth in the

14

 

introductory paragraph of this Security Instrument and that all books and records
pertaining to the Property are maintained at the Property or such other location as may be
expressly disclosed to Lender in writing. Borrower will furnish, or cause to be furnished,
to Lender on or before forty-five (45) calendar days after the end of each calendar quarter
the following items, each certified by Borrower as being true and correct, in such format
and in such detail as Lender or its servicer may request:

     (i) a written statement (rent roll) dated as of the last day of each such
calendar quarter identifying each of the Leases by the term, space occupied, rental
required to be paid (including percentage rents and tenant sales), security deposit
paid, any rental concessions, all rent escalations, any rents paid more than one (1)
month in advance, any special provisions or inducements granted to tenants, any
taxes, maintenance and other common charges paid by tenants, all vacancies and
identifying any defaults or payment delinquencies thereunder; and

     (ii) quarterly and year-to-date operating statements prepared for each calendar
quarter during each such reporting period detailing the total revenues received,
total expenses incurred, total cost of all capital improvements, total debt service
and total cash flow.

     (b) Within ninety (90) calendar days following the end of each calendar year, Borrower
shall furnish a statement of the financial affairs and condition of the Borrower and the
Property including a statement of profit and loss for the Property in such format and in
such detail as Lender or its servicer may request, and setting forth the financial condition
and the income and expenses for the Property for the immediately preceding calendar year
prepared by an independent certified public accountant. Borrower shall deliver to Lender
copies of all income tax returns, requests for extension and other similar items
contemporaneously with its delivery of same to the Internal Revenue Service.

     (c) Borrower will permit representatives appointed by Lender, including independent
accountants, agents, attorneys, appraisers and any other persons, to visit and inspect
during its normal business hours and at any other reasonable times any of the Property and
to make photographs thereof, and to write down and record any information such
representatives obtain, and shall permit Lender or its representatives to investigate and
verify the accuracy of the information furnished to Lender under or in connection with this
Security Instrument or any of the Other Loan Documents and to discuss all such matters with
its officers, employees and representatives. Borrower will furnish to Lender at Borrower’s
expense all evidence which Lender may from time to time reasonably request as to the
accuracy and validity of or compliance with all representations and warranties made by
Borrower in the Loan Documents and satisfaction of all conditions contained therein. Any
inspection or audit of the Property or the books and records of Borrower, or the procuring
of documents and financial and other information, by or on behalf of Lender, shall be at
Borrower’s expense and shall be for Lender’s protection only, and shall not constitute any
assumption of responsibility or liability by Lender to Borrower or anyone else with regard
to the condition, construction, maintenance or

15

 

operation of the Property, nor Lender’s approval of any certification given to Lender
nor relieve Borrower of any of Borrower’s obligations.

     (d) Prior to the transfer of the Loan by Lender pursuant to Section 16.1
hereof, Borrower shall deliver to Lender the reports required by Section 3.8(a)
on a monthly basis. Such reports shall be delivered within twenty (20) calendar days after
the end of each calendar month.

     Section 3.9 PAYMENT FOR LABOR AND MATERIALS. Borrower will promptly pay when due all
bills and costs for labor, materials, and specifically fabricated materials incurred in connection
with the Property and never permit to exist beyond the due date thereof in respect of the Property
or any part thereof any lien or security interest, even though inferior to the liens and the
security interests hereof, and in any event never permit to be created or exist in respect of the
Property or any part thereof any other or additional lien or security interest other than the liens
or security interests hereof, except for the Permitted Exceptions (as hereinafter defined).

     Section 3.10 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe and perform each
and every term to be observed or performed by Borrower pursuant to the terms of any agreement or
recorded instrument affecting or pertaining to the Property, or given by Borrower to Lender for the
purpose of further securing an obligation secured hereby and any amendments, modifications or
changes thereto.

ARTICLE 4 — SPECIAL COVENANTS

     Borrower covenants and agrees that:

     Section 4.1 PROPERTY USE. The Property shall be used only for: one office building
on the Akron Premises (as shown on Exhibit A); one office building on the North Canton Premises (as
shown on Exhibit A); and one office building on the Dayton Premises (as shown on Exhibit A), and
for no other use without the prior written consent of Lender, which consent may be withheld in
Lender’s sole and absolute discretion.

     Section 4.2 ERISA.

     (a) It shall not engage in any transaction which would cause any obligation, or action
taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the
Note, this Security Instrument and the Other Loan Documents) to be a non-exempt (under a
statutory or administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”).

     (b) It shall deliver to Lender such certifications or other evidence from time to time
throughout the term of the Security Instrument, as requested by Lender in its sole
discretion, that (i) Borrower is not an “employee benefit plan” as defined in Section 3(3)
of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning
of Section 3(32) of ERISA; (ii) Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental plans;
and (iii) one or more of the following circumstances is true:

16

 

     (i) Equity interests in Borrower are publicly offered securities, within the
meaning of 29 C.F.R. § 2510.3-101(b)(2);

     (ii) Less than twenty-five percent (25%) of each outstanding class of equity
interests in Borrower are held by “benefit plan investors” within the meaning of 29
C.F.R. § 2510.3-101(f)(2); or

     (iii) Borrower qualifies as an “operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. § 2510.3-101(c) or (e) or an investment
company registered under The Investment Company Act of 1940.

     Section 4.3 SINGLE PURPOSE ENTITY. Borrower covenants and agrees that it has not and
shall not:

     (a) engage in any business or activity other than the acquisition, ownership, operation
and maintenance of the Property, and activities incidental thereto;

     (b) acquire or own any material asset other than (i) the Property, and (ii) such
incidental Personal Property as may be necessary for the operation of the Property;

     (c) merge into or consolidate with any person or entity or dissolve, terminate or
liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of
its assets or change its legal structure, without in each case Lender’s consent;

     (d) fail to preserve its existence as an entity duly organized, validly existing and in
good standing (if applicable) under the laws of the jurisdiction of its organization or
formation, or without the prior written consent of Lender, amend, modify, terminate or fail
to comply with the provisions of Borrower’s Partnership Agreement, Articles or Certificate
of Incorporation, Articles of Organization, Operating Agreement or similar organizational
documents, as the case may be;

     (e) own any subsidiary or make any investment in or acquire the obligations or
securities of any other person or entity without the consent of Lender;

     (f) commingle its assets with the assets of any of its partner(s), members,
shareholders, affiliates, or of any other person or entity or transfer any assets to any
such person or entity other than distributions on account of equity interests in the
Borrower permitted hereunder and properly accounted for;

     (g) incur any debt, secured or unsecured, direct or contingent (including guaranteeing
any obligation), other than the Debt, except unsecured trade and operational debt incurred
with trade creditors in the ordinary course of its business of owning and operating the
Property in such amounts as are normal and reasonable under the circumstances, provided that
such debt is not evidenced by a note and is paid when due
and provided in any event the outstanding principal balance of such debt shall not
exceed at any one time one percent (1%) of the outstanding Debt;

17

 

     (h) allow any person or entity to pay its debts and liabilities (except a Guarantor) or
fail to pay its debts and liabilities solely from its own assets;

     (i) fail to maintain its records, books of account and bank accounts separate and apart
from those of the shareholders, partners, members, principals and affiliates of Borrower,
the affiliates of a shareholder, partner or member of Borrower, and any other person or
entity or fail to prepare and maintain its own financial statements in accordance with
generally accepted accounting principles and susceptible to audit, or if such financial
statements are consolidated fail to cause such financial statements to contain footnotes
disclosing that the Property is actually owned by the Borrower;

     (j) enter into any contract or agreement with any shareholder, partner, member,
principal or affiliate of Borrower, any guarantor of all or a portion of the Debt (a
“Guarantor”) or any shareholder, partner, member, principal or affiliate thereof, except
upon terms and conditions that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third parties other than any
shareholder, partner, member, principal or affiliate of Borrower or Guarantor, or any
shareholder, partner, member, principal or affiliate thereof;

     (k) seek dissolution or winding up, in whole or in part;

     (l) fail to correct any known misunderstandings regarding the separate identity of
Borrower;

     (m) hold itself out to be responsible or pledge its assets or credit worthiness for the
debts of another person or entity or allow any person or entity to hold itself out to be
responsible or pledge its assets or credit worthiness for the debts of the Borrower (except
for a Guarantor);

     (n) make any loans or advances to any third party, including any shareholder, partner,
member, principal or affiliate of Borrower, or any shareholder, partner, member, principal
or affiliate thereof;

     (o) fail to file its own tax returns or to use separate contracts, purchase orders,
stationery, invoices and checks;

     (p) fail either to hold itself out to the public as a legal entity separate and
distinct from any other entity or person or to conduct its business solely in its own name
in order not (i) to mislead others as to the entity with which such other party is
transacting business, or (ii) to suggest that Borrower is responsible for the debts of any
third party (including any shareholder, partner, member, principal or affiliate of Borrower,
or any shareholder, partner, member, principal or affiliate thereof);

     (q) fail to allocate fairly and reasonably among Borrower and any third party
(including, without limitation, any Guarantor) any overhead for common employees, shared
office space or other overhead and administrative expenses;

18

 

     (r) allow any person or entity to pay the salaries of its own employees or fail to
maintain a sufficient number of employees for its contemplated business operations;

     (s) fail to maintain adequate capital for the normal obligations reasonably foreseeable
in a business of its size and character and in light of its contemplated business
operations;

     (t) file a voluntary petition or otherwise initiate proceedings to have the Borrower or
any general partner, manager or managing member of Borrower adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings against the
Borrower or any general partner, manager or managing member of Borrower, or file a petition
seeking or consenting to reorganization or relief of the Borrower or any general partner,
manager or managing member of Borrower as debtor under any applicable federal or state law
relating to bankruptcy, insolvency, or other relief for debtors with respect to the Borrower
or any general partner, manager or managing member of Borrower; or seek or consent to the
appointment of any trustee, receiver, conservator, assignee, sequestrator, custodian,
liquidator (or other similar official) of the Borrower or any general partner, manager or
managing member of Borrower or of all or any substantial part of the properties and assets
of the Borrower or any general partner, manager or managing member of Borrower, or make any
general assignment for the benefit of creditors of the Borrower or any general partner,
manager or managing member of Borrower , or admit in writing the inability of the Borrower
or any general partner, manager or managing member of Borrower to pay its debts generally as
they become due or declare or effect a moratorium on the Borrower or any general partner,
manager or managing member of Borrower debt or take any action in furtherance of any such
action;

     (u) share any common logo with or hold itself out as or be considered as a department
or division of (i) any shareholder, partner, principal, member or affiliate of Borrower,
(ii) any affiliate of a shareholder, partner, principal, member or affiliate of Borrower, or
(iii) any other person or entity or allow any person or entity to identify the Borrower as a
department or division of that person or entity; or

     (v) conceal assets from any creditor, or enter into any transaction with the intent to
hinder, delay or defraud creditors of the Borrower or the creditors of any other person or
entity.

     Section 4.4 EMBARGOED PERSON. As of the date hereof and at all times throughout the
term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan
Documents, (a) none of the funds or other assets of Borrower and Guarantor constitute property of,
or are beneficially owned, directly or indirectly, by any person, entity or government subject to
trade restrictions under U.S. law, including but not limited to, the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated
thereunder with the result that the investment in Borrower or Guarantor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan made by the Lender is in violation of law
(“Embargoed Person”); (b) no Embargoed Person has any interest of any nature whatsoever in

19

 

Borrower
or Guarantor, as applicable, with the result that the investment in Borrower or Guarantor, as
applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of
law; and (c) none of the funds of Borrower or Guarantor, as applicable, have been derived from any
unlawful activity with the result that the investment in Borrower or Guarantor, as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in violation of law.

     Section 4.5 OFAC. Borrower hereby represents and warrants that Borrower and Guarantor
and each and every Person affiliated with Borrower and/or Guarantor or that to Borrower’s knowledge
has an economic interest in Borrower, or, to Borrower’s knowledge, that has or will have an
interest in the transaction contemplated by this Security Instrument or in the Property or will
participate, in any manner whatsoever, in the Loan are (i) in full compliance with all applicable
orders, rules, regulations and recommendations of The Office of Foreign Assets Control of the U.S.
Department of the Treasury; (ii) is not a Prohibited Person (as defined below); (iii) in full
compliance with the requirements of the Patriot Act and all other requirements contained in the
rules and regulations of the Office of Foreign Assets Control, Department of the Treasury (as used
in this Section only, “OFAC”); (iv) operated under policies, procedures and practices, if any, that
are in compliance with the Patriot Act and available to Lender for Lender’s review and inspection
during normal business hours and upon reasonable prior notice; (v) not in receipt of any notice
from the Secretary of State or the Attorney General of the United States or any other department,
agency or office of the United States claiming a violation or possible violation of the Patriot
Act; (vi) not a person who has been determined by competent authority to be subject to any of the
prohibitions contained in the Patriot Act; and (vii) not owned or controlled by or now acting and
or will in the future act for or on behalf of any person who has been determined to be subject to
the prohibitions contained in the Patriot Act. Borrower covenants and agrees that in the event
Borrower receives any notice that Borrower or Guarantor (or any of their respective beneficial
owners, affiliates or participants) become listed on the Annex or any other list promulgated under
the Patriot Act or is indicted, arraigned, or custodially detained on charges involving money
laundering or predicate crimes to money laundering, Borrower shall immediately notify Lender. It
shall be an Event of Default hereunder if Borrower, Guarantor, or any other party to any Loan
Document becomes listed on any list promulgated under the Patriot Act or is indicted, arraigned or
custodially detained on charges involving money laundering or predicate crimes to money laundering.

     “Prohibited Person” shall mean any person or entity:

     (a) a “blocked” person listed in the Annex, or otherwise subject to the provisions of,
the Executive Order Nos. 12947, 13099 and 13224 on Terrorist Financing, effective September
24, 2001, and all modifications thereto or thereof, and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(as used in this Section only, the “Annex”);

     (b) that is owned or controlled by, or acting for or on behalf of, any person or entity
that is listed to the Annex, or is otherwise subject to the provisions of, the Annex;

     (c) with whom Lender is prohibited from dealing or otherwise engaging in any
transaction by any terrorism or money laundering law, including the Annex;

20

 

     (d) who commits, threatens or conspires to commit or supports “terrorism” as defined in
the Annex;

     (e) that is named as a “specially designated national and blocked person” on the most
current list published by the U.S. Treasury Department Office of Foreign Assets Control at
its official website, http://www.treas.gov.ofac/t11sdn.pdf or at any replacement website or
other replacement official publication of such list or any other list of terrorists or
terrorist organizations maintained pursuant to any of the rules and regulations of the OFAC
issued pursuant to the Patriot Act or on any other list of terrorists or terrorist
organizations maintained pursuant to the Patriot Act; or

     (f) who is an Affiliate of or affiliated with a person or entity listed above.

“Patriot Act” shall mean the USA PATRIOT Act of 2001, 107 Public Law 56 (October 26, 2001) and in
other statutes and all orders, rules and regulations of the United States government and its
various executive departments, agencies and offices related to the subject matter of the Patriot
Act, including Executive Order 13224 effective September 24, 2001.

ARTICLE 5 — REPRESENTATIONS AND WARRANTIES

     Section 5.1 BORROWER’S REPRESENTATIONS. Borrower represents and warrants to Lender
that each of the representations and warranties set forth in that certain Closing Certificate of
even date herewith executed by Borrower in favor of Lender are true and correct as of the date
hereof and are hereby incorporated and restated in this Security Instrument by this reference.

     Section 5.2 WARRANTY OF TITLE. Borrower represents and warrants that it has good and
marketable title to the Property and has the right to mortgage, grant, bargain, sell, pledge,
assign, warrant, transfer and convey the same and that Borrower possesses an unencumbered fee
simple absolute estate in the Land and the Improvements and that it owns the Property free and
clear of all liens, encumbrances and charges whatsoever except for those exceptions shown in the
title insurance policy insuring the lien of this Security Instrument (the “Permitted Exceptions”).
Borrower shall, at its sole cost and expense, forever warrant, defend and preserve the title and
the validity and priority of the lien of this Security Instrument and shall, at its sole cost and
expense, forever warrant and defend the same to Lender against the claims of all persons
whomsoever.

     Section 5.3 STATUS OF PROPERTY.

     (a) No portion of the Improvements is located in an area identified by the Secretary of
Housing and Urban Development or any successor thereto as an area having
special flood hazards pursuant to the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973, as amended, or any successor law, or, if located within any
such area, Borrower has obtained and will maintain the insurance prescribed in Section
3.2 hereof.

     (b) Borrower has obtained all necessary certificates, permits, licenses and other
approvals, governmental and otherwise, necessary for the use, occupancy and

21

 

operation of the
Property and the conduct of its business (including, without limitation, certificates of
completion and certificates of occupancy) and all required zoning, building code, land use,
environmental and other similar permits or approvals, all of which are in full force and
effect as of the date hereof and not subject to revocation, suspension, forfeiture or
modification.

     (c) The Property and the present and contemplated use and occupancy thereof are to the
knowledge of Borrower in full compliance with all Applicable Laws, including, without
limitation, zoning ordinances, building codes, land use and environmental laws, laws
relating to the disabled (including, but not limited to, the ADA) and other similar laws.

     (d) The Property is served by all utilities required for the current or contemplated
use thereof. All utility service is provided by public utilities and the Property has
accepted or is equipped to accept such utility service.

     (e) All public roads and streets necessary for service of and access to the Property
for the current or contemplated use thereof have been completed, are serviceable and are
physically and legally open for use by the public.

     (f) The Property is served by public water and sewer systems.

     (g) The Property is free from damage caused by fire or other casualty. There is no
pending or, to the knowledge of Borrower, threatened condemnation proceedings affecting the
Property or any portion thereof.

     (h) All costs and expenses of any and all labor, materials, supplies and equipment used
in the construction of the Improvements have been paid in full and no notice of any
mechanics’ or materialmen’s liens or of any claims of right to any such liens have been
received.

     (i) Borrower has paid in full for, and is the owner of, all furnishings, fixtures and
equipment (other than tenants’ property) used in connection with the operation of the
Property, free and clear of any and all security interests, liens or encumbrances, except
the lien and security interest created hereby.

     (j) All liquid and solid waste disposal, septic and sewer systems located on the
Property are to the knowledge of Borrower in a good and safe condition and repair and in
compliance with all Applicable Laws.

     (k) All Improvements lie within the boundary of the Land.

     (l) The North Canton Premises and Dayton Premises will be managed solely by at will
employees of the Borrower or by the tenant(s) under the Lease(s), and no property manager
shall be retained or appointed without the prior written consent of Lender. Such property
manager(s) and any property management agreement(s) shall be satisfactory to Lender in its
sole discretion, and as a condition to Lender’s approval such property manager(s) shall
execute and deliver a lien waiver and subordination agreement

22

 

satisfactory to Lender in its
sole discretion which also provides Lender the right, at its option, to terminate the
property management agreement(s) or assume Borrower’s obligations thereunder upon an Event
of Default.

     Section 5.4 NO FOREIGN PERSON. Borrower is not a “foreign person” within the meaning
of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended, and the related Treasury
Department regulations, including temporary regulations.

     Section 5.5 SEPARATE TAX LOT. The Property is assessed for real estate tax purposes
as one or more wholly independent tax lot or lots, separate from any adjoining land or improvements
not constituting a part of such lot or lots, and no other land or improvements is assessed and
taxed together with the Property or any portion thereof.

ARTICLE 6 — OBLIGATIONS AND RELIANCES

     Section 6.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship between Borrower
and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special
relationship with Borrower, and no term or condition of any of the Note, this Security Instrument
and the other Loan Documents shall be construed so as to deem the relationship between Borrower and
Lender to be other than that of debtor and creditor.

     Section 6.2 NO RELIANCE ON LENDER. The partners, members, principals and (if Borrower
is a trust) beneficial owners of Borrower are experienced in the ownership and operation of
properties similar to the Property, and Borrower and Lender are relying solely upon such expertise
and business plan in connection with the ownership and operation of the Property. Borrower is not
relying on Lender’s expertise, business acumen or advice in connection with the Property.

     Section 6.3 NO LENDER OBLIGATIONS.

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

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

     Section 6.4 RELIANCE. Borrower recognizes and acknowledges that in accepting the
Note, this Security Instrument and the Other Loan Documents, Lender is expressly and primarily
relying on the truth and accuracy of the warranties and representations set forth in Article
5 and that certain Closing Certificate of even date herewith executed by Borrower, without any

23

 

obligation to investigate the Property and notwithstanding any investigation of the Property by
Lender; that such reliance existed on the part of Lender prior to the date hereof; that such
warranties and representations are a material inducement to Lender in accepting the Note, this
Security Instrument and the Other Loan Documents; and that Lender would not be willing to make the
Loan (as hereinafter defined) and accept this Security Instrument in the absence of the warranties
and representations as set forth in Article 5 and such Closing Certificate.

ARTICLE 7 — FURTHER ASSURANCES

     Section 7.1 RECORDING FEES. Borrower will pay all taxes, filing, registration or
recording fees, and all expenses incident to the preparation, execution, acknowledgment and/or
recording of the Note, this Security Instrument, the Other Loan Documents, any note or mortgage
supplemental hereto, any security instrument with respect to the Property and any instrument of
further assurance, and any modification or amendment of the foregoing documents, and all federal,
state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security Instrument, any mortgage supplemental
hereto, any security instrument with respect to the Property or any instrument of further
assurance, and any modification or amendment of the foregoing documents, except where prohibited by
law so to do.

     Section 7.2 FURTHER ACTS. Borrower will, at the cost of Borrower, and without expense
to Lender, do, execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, mortgages, assignments, notices of assignments, transfers and assurances as Lender
shall, from time to time, require, for the better assuring, conveying, assigning, transferring, and
confirming unto Lender the property and rights hereby mortgaged, granted, bargained, sold,
conveyed, confirmed, pledged, assigned, warranted and transferred or intended now or hereafter so
to be, or which Borrower may be or may hereafter become bound to convey or assign to Lender, or for
carrying out the intention or facilitating the performance of the terms of this Security Instrument
or for filing, registering or recording this Security Instrument, or for complying with all
Applicable Laws. Borrower, on demand, will execute and deliver and hereby authorizes Lender to
execute in the name of Borrower or without the signature of Borrower to the extent Lender may
lawfully do so, one or more financing statements, chattel mortgages or other instruments, to
evidence more effectively the security interest of Lender in the Property. Borrower grants to
Lender an irrevocable power of attorney coupled with an interest for the purpose of exercising and
perfecting any and all rights and remedies available to Lender at law and in equity, including
without limitation such rights and remedies available to Lender pursuant to this Section
7.2.

     Section 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.

     (a) If any law is enacted or adopted or amended after the date of this Security
Instrument which imposes a tax, either directly or indirectly, on the Debt or Lender’s
interest in the Property, requires revenue or other stamps to be affixed to the Note, this
Security Instrument, or the Other Loan Documents, or imposes any other tax or charge on the
same, Borrower will pay the same, with interest and penalties thereon, if any. If Lender is
advised by counsel chosen by it that the payment of tax by Borrower would be

24

 

unlawful or
taxable to Lender or unenforceable or provide the basis for a defense of usury, then Lender
shall have the option, by written notice of not less than ninety (90) calendar days, to
declare the Debt immediately due and payable.

     (b) Borrower will not claim or demand or be entitled to any credit or credits on
account of the Debt for any part of the Taxes or Other Charges assessed against the
Property, or any part thereof, and no deduction shall otherwise be made or claimed from the
assessed value of the Property, or any part thereof, for real estate tax purposes by reason
of this Security Instrument or the Debt. If such claim, credit or deduction shall be
required by law, Lender shall have the option, by written notice of not less than ninety
(90) calendar days, to declare the Debt immediately due and payable.

     Section 7.4 CONFIRMATION STATEMENT.

     (a) After request by Lender, Borrower, within ten (10) days, shall furnish Lender or
any proposed assignee with a statement, duly acknowledged and certified, confirming to
Lender (or its designee) (i) the amount of the original principal amount of the Note, (ii)
the unpaid principal amount of the Note, (iii) the rate of interest of the Note, (iv) the
terms of payment and maturity date of the Note, (v) the date installments of interest and/or
principal were last paid, and (vi) that, except as provided in such statement, there are no
defaults or events which with the passage of time or the giving of notice or both, would
constitute an event of default under the Note or this Security Instrument; provided,
however, Lender shall not be entitled hereunder to receive more than one (1) such
statement in each calendar year.

     (b) Subject to the provisions of the Leases, Borrower shall deliver to Lender, promptly
upon request (but not more frequently than once annually so long as Borrower is not in
default hereunder), duly executed estoppel certificates from any one or more lessees as
required by Lender attesting to such facts regarding the Lease as Lender may require,
including but not limited to attestations that each Lease covered thereby is in full force
and effect with no defaults thereunder on the part of any party, that none of the Rents have
been paid more than one month in advance, and that the lessee claims no defense or offset
against the full and timely performance of its obligations under the Lease.

     (c) Upon any transfer or proposed transfer contemplated by Section 16.1 hereof,
at Lender’s request, Borrower, and any Guarantors shall provide an estoppel
certificate to the Investor (defined in Section 16.1) or any prospective
Investor in such form, substance and detail as Lender, such Investor or prospective Investor
may require.

     Section 7.5 SPLITTING OF SECURITY INSTRUMENT. This Security Instrument and the Note
shall, at any time until the same shall be fully paid and satisfied, at the sole election of
Lender, be split or divided into two or more notes and two or more security instruments, each of
which shall cover all or a portion of the Property to be more particularly described therein. To
that end, Borrower, upon written request of Lender, shall execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered by the then owner of the Property, to Lender
and/or its designee or designees substitute notes and security instruments in such principal

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amounts, aggregating not more than the then unpaid principal amount of Debt, and containing terms,
provisions and clauses similar to those contained herein and in the Note, and such other documents
and instruments as may be required by Lender.

     Section 7.6 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an officer of
Lender as to the loss, theft, destruction or mutilation of the Note or any Other Loan Document
which is not of public record, and, in the case of any such mutilation, upon surrender and
cancellation of such Note or Other Loan Document, Borrower, at its expense, will issue, in lieu
thereof, a replacement Note or Other Loan Document, dated the date of such lost, stolen, destroyed
or mutilated Note or Other Loan Document in the same principal amount thereof and otherwise of like
tenor.

ARTICLE 8 — DUE ON SALE/ENCUMBRANCE

     Section 8.1 LENDER RELIANCE. Borrower acknowledges that Lender has examined and
relied on the creditworthiness of Borrower and experience of Borrower and its partners, members,
principals and (if Borrower is a trust) beneficial owners in owning and operating properties such
as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership of
the Property as a means of maintaining the value of the Property as security for repayment of the
Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid
interest in maintaining the value of the Property so as to ensure that, should Borrower default in
the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt
by a sale of the Property.

     Section 8.2 NO SALE/ENCUMBRANCE.

     (a) Borrower agrees that Borrower shall not, without the prior written consent of
Lender, Transfer the Property or any part thereof or permit the Property or any part thereof
to be Transferred. Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default hereunder in order to declare the Debt immediately
due and payable upon Borrower’s Transfer of the Property without Lender’s consent.

     (b) As used in Section 8.2(a), “Transfer” shall mean any voluntary or
involuntary sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment or
transfer of all or any part of the Property or any interest therein including, but not
limited to: (i) an installment sales agreement wherein Borrower agrees to sell the
Property or any part thereof for a price to be paid in installments; (ii) an agreement
by Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder; (iii) a sale, assignment or other transfer of, or
the grant of a security interest in, Borrower’s right, title and interest in and to any
Leases or any Rents; (iv) if Borrower, Guarantor, or any manager, managing member or general
partner of Borrower or Guarantor is a corporation, any Transfer of such corporation’s stock
(or the stock of any corporation directly or indirectly controlling such Borrower,
Guarantor, manager, managing member or general partner 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 forty-nine percent (49%) or more of such corporation’s stock shall directly or
indirectly

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be vested in or pledged to a party or parties who are not now stockholders
(provided, however, in no event shall this subpart [iv] apply to any
Guarantor whose stock or shares are traded on a nationally recognized stock exchange); (v)
if Borrower, Guarantor, manager, or any managing member or general partner of Borrower or
Guarantor is a limited liability company or partnership, the Transfer by which an aggregate
of forty-nine percent (49%) or more of the ownership interest in such limited liability
company or forty-nine percent (49%) or more of the partnership interests in such partnership
shall directly or indirectly be vested in or pledged to parties not having an ownership
interest as of the date of this Security Instrument; (vi) if Borrower, any Guarantor or any
manager, managing member or general partner of Borrower or any Guarantor is a partnership,
limited liability company or joint venture, the change, removal or resignation of a general
partner, manager, managing member or joint venturer or the Transfer directly or indirectly
of all or any portion of the partnership or ownership interest of any general partner,
manager, managing member or joint venturer; and (vii) except as expressly permitted by
Section 8.3, any Transfer by Gladstone Commercial Limited Partnership, a Delaware
limited partnership (“GCLP”), directly or indirectly, of its ownership interest in the
Borrower.

     Section 8.3 EXCLUDED AND PERMITTED TRANSFERS.

     (a) A Transfer within the meaning of this Article 8 shall not include (i)
transfers by operation of law in the event of a bankruptcy, or (ii) a Lease of a portion of
the Property to a space tenant.

     (b) Notwithstanding the provisions of Section 8.2 above, GCLP shall have the
right to transfer its ownership interest in Borrower upon a merger or consolidation of GCLP,
provided the following conditions precedent have been satisfied: (i) no Event of Default,
or an event which with notice and/or the passage of time, or both, would constitute an Event
of Default shall have occurred and then be continuing; (ii) the successor to GCLP shall
have a net worth, at the time of the merger or consolidation, of no less than the net worth
of GCLP immediately prior the merger or consolidation; and (iii) all of the beneficial
ownership interests of Borrower shall be owned (directly or indirectly) by, and control over
the Property and the Borrower shall remain with, Gladstone Commercial Corporation, a
Maryland corporation (“GCC”), or any successor of GCC resulting from a merger or
consolidation (provided that the merged or consolidated entity shall have a net worth of no
less than the net worth of GCC immediately prior such merger or consolidation). The term
“control” means the
possession, directly or indirectly, of the power to direct or cause the direction of
management, policies or activities of a person or entity, whether through ownership of
voting securities, by contract or otherwise.

     (c) Notwithstanding the provisions of Section 8.2 above, Lender will give its
consent to three separate sales or transfers of the Property or ownership interests in the
Borrower, a general partner, manager or managing member of the Borrower, or any Guarantor,
if (but only if) no Event of Default under the Loan Documents has occurred and is
continuing, and if each of the following conditions precedent have been fully satisfied (as
determined in Lender’s sole and absolute discretion): (i) the grantee’s or

27

 

transferee’s
integrity, reputation, financial condition, character and management ability are
satisfactory to Lender in its sole discretion, and all information relating thereto
requested by Lender is delivered to Lender at least 30 days prior to the proposed transfer,
(ii) the grantee’s or transferee’s (and its sole general partner’s or managing member’s)
single purpose and bankruptcy remote character are satisfactory to Lender in its sole
discretion, and all information relating thereto requested by Lender is delivered to Lender
at least 30 days prior to the proposed transfer, (iii) Lender has obtained such estoppels
from any guarantors of the Note or replacement guarantors and such other legal opinions
regarding substantive consolidation issues, enforceability of the assumption documents, no
adverse impact on the Securities or any REMIC holding the Note and similar matters as Lender
may require, (iv) all of Lender’s costs and expenses associated with the sale or transfer
(including reasonable attorneys’ fees) are paid by Borrower or the grantee or transferee,
(v) the payment of a transfer fee not to exceed 1% of the then unpaid principal balance of
the loan evidenced by the Note and secured hereby (the “Loan”), (vi) the execution and
delivery to Lender of a written assumption agreement and/or substitute guaranty (in its sole
and absolute discretion) and such modifications to the Loan Documents executed by such
parties and containing such terms and conditions as Lender may require in its sole and
absolute discretion prior to such sale or transfer (provided that in the event the Loan is
included in a REMIC and is a performing Loan, no modification to the terms and conditions
shall be made or permitted that would cause (A) any adverse tax consequences to the REMIC or
any holders of any Mortgage-Backed Pass-Through Securities, (B) the Security Instrument to
fail to be a Qualifying Security Instrument under applicable federal law relating to
REMIC’s, or (C) result in a taxation of the income from the Loan to the REMIC or cause a
loss of REMIC status), and (vii) if applicable, the delivery to Lender of an endorsement (at
Borrower’s sole cost and expense) to Lender’s policy of title insurance then insuring the
lien created by this Security Instrument in form and substance acceptable to Lender in its
sole judgment.

     (d) Without limiting the foregoing, if Lender shall consent to a transfer of the
Property, the written assumption agreement described in Subsection 8.3(c)(vi) above
shall provide for the release of Borrower and, if approved by Lender, each Guarantor of
personal liability under the Note and Other Loan Documents, but only as to acts or events
occurring, or obligations arising, after the closing of such transfer.

     (e) Notwithstanding the provisions of Section 8.2 above, Borrower shall be
permitted to transfer any of the Released Parcels upon compliance with the terms and
conditions set forth in Article 21 hereof.

     Section 8.4 NO IMPLIED FUTURE CONSENT. Lender’s consent to one sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Property shall not be deemed to be a
waiver of Lender’s right to require such consent to any future occurrence of same. Any sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property made in
contravention of this Article 8 shall be null and void and of no force and effect.

     Section 8.5 COSTS OF CONSENT. Borrower agrees to bear and shall pay or reimburse
Lender on demand for all reasonable expenses (including, without limitation, all recording costs,
reasonable in-house and outside attorneys’ fees and disbursements and title

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search costs) incurred
by Lender, and a reasonable processing fee to Lender, in connection with the review, approval and
documentation of any such sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer.

     Section 8.6 CONTINUING SEPARATENESS REQUIREMENTS. In no event shall any of the terms
and provisions of this Article 8 amend or modify the terms and provisions contained in
Section 4.3 herein.

ARTICLE 9 — DEFAULT

     Section 9.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an “Event of Default”:

     (a) if any portion of the Debt is not paid prior to the seventh (7th) calendar day
after the same is due or if the entire Debt is not paid on or before the maturity date,
along with applicable prepayment premiums, if any;

     (b) if Borrower, or its general partner, manager or managing member, if applicable,
violates or does not comply with any of the provisions of Section 4.3, Article
8, or the Undelivered Items Letter, fails to deliver any of the reports required by
Section 3.8, or fails to complete any “Immediate Repairs” (as defined in the Escrow
Agreement);

     (c) if any representation or warranty of Borrower or of its members, general partners,
principals, affiliates, agents or employees, or of any Guarantor made herein or in the
Environmental Indemnity or in any other Loan Document, in any guaranty, or in any
certificate, report, financial statement or other instrument or document furnished to Lender
shall have been false or misleading in any material respect when made;

     (d) if Borrower or any Guarantor shall make an assignment for the benefit of creditors
or if Borrower or any Guarantor shall admit in writing its inability to pay, or Borrower’s
or any Guarantor’s failure to pay its debts as they become due;

     (e) if (i) Borrower or any subsidiary or general partner, manager or managing member of
Borrower, or any Guarantor shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or Borrower or any
subsidiary or general partner, manager or managing member of Borrower, or any Guarantor
shall make a general assignment for the benefit of its creditors; or (ii) there shall be
commenced against Borrower or any subsidiary or general partner, manager or managing member
of Borrower, or any Guarantor any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a

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period of sixty (60) calendar days; or (iii) there shall be commenced against Borrower or
any subsidiary or general partner, manager or managing member of Borrower or any Guarantor
any case, proceeding or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets which results
in the entry of any order for any such relief which shall not have been vacated, discharged,
or stayed or bonded pending appeal within sixty (60) calendar days from the entry thereof;
or (iv) Borrower or any subsidiary or general partner, manager or managing member of
Borrower, or any Guarantor shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii)
or (iii) above; or (v) Borrower or any subsidiary or general partner, manager or managing
member of Borrower, or any Guarantor shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due;

     (f) subject to Borrower’s right to contest certain liens as provided in this Security
Instrument, if the Property becomes subject to any mechanic’s, materialman’s or other lien
other than a lien for local real estate taxes and assessments not then due and payable and
the lien shall remain undischarged of record (by payment, bonding or otherwise) for a period
of thirty (30) calendar days;

     (g) if any federal tax lien is filed against Borrower, any general partner, manager or
managing member of Borrower, any Guarantor or the Property and same is not discharged of
record within thirty (30) calendar days after same is filed;

     (h) except as permitted in this Security Instrument, the actual or threatened
alteration, improvement, demolition or removal of any of the Improvements, or any
construction on the Property, without the prior consent of Lender;

     (i) Borrower’s failure to maintain the insurance required under this Security
Instrument;

     (j) if a managing agent is appointed for either the North Canton Premises or the Dayton
Premises in compliance with Section 5.3(l), and subsequently, without Lender’s prior written
consent, (i) the managing agent for either the North Canton
Premises or the Dayton Premises resigns or is removed and is not, within thirty (30)
days after such resignation or removal, replaced with a new managing agent reasonably
acceptable to Lender, (ii) the ownership, management or control of such managing agent is
transferred to a person or entity other than the general partner, managing partner,
managing member of the Borrower, or to GCLP or GCC, and in connection with such transfer,
the Borrower fails to terminate the applicable property management agreement, or (iii) there
is any material change in the property management agreement(s) of any portion of the
Property;

     (k) this Security Instrument shall cease to constitute a first-priority lien on the
Property (other than in accordance with its terms);

30

 

          (l) seizure or forfeiture of the Property, or any portion thereof, or Borrower’s
interest therein, resulting from criminal wrongdoing or other unlawful action of Borrower,
its affiliates, or any tenant in the Property under any federal, state or local law;

          (m) if Borrower consummates a transaction which would cause this Security Instrument or
Lender’s exercise of its rights under this Security Instrument, the Note or the Other Loan
Documents to constitute a nonexempt prohibited transaction under ERISA or result in a
violation of a state statute regulating governmental plans, subjecting Lender to liability
for a violation of ERISA or a state statute;

          (n) if any default occurs under any guaranty or indemnity including the Environmental
Indemnity executed in connection herewith and such default continues after the expiration of
applicable grace periods, or such guaranty or indemnity shall cease to be in full force and
effect, or any guarantor or indemnitor shall deny or disaffirm its obligation thereunder;
and

          (o) if Borrower or any Guarantor, as the case may be, shall continue to be in default
under any other term, covenant or condition of this Security Instrument or any Other Loan
Documents for thirty (30) calendar days after notice from Lender; provided that if
such default cannot reasonably be cured within such thirty (30) calendar day period and
Borrower (or such Guarantor as the case may be) shall have commenced to cure such default
within such thirty (30) calendar day period and thereafter diligently and expeditiously
proceeds to cure the same, such thirty (30) calendar day period shall be extended for so
long as it shall require Borrower (or such Guarantor as the case may be) in the exercise of
due diligence to cure such default, it being agreed that no such extension shall be for a
period in excess of sixty (60) calendar days after the notice from Lender referred to above.

     Section 9.2 DEFAULT INTEREST. Borrower will pay, from the date of an Event of Default
through the earlier of the date upon which the Event of Default is cured or the date upon which the
Debt is paid in full, interest on the unpaid principal balance of the Note at a per annum rate
equal to the lesser of (a) the greater of (i) five percent (5%) plus the Prime Rate (as defined in
the Note), and (ii) five percent (5%) plus the Applicable Interest Rate (as defined in the Note),
and (b) the maximum interest rate which Borrower may by law pay or Lender may charge and collect
(the “Default Rate”).

ARTICLE 10 — RIGHTS AND REMEDIES

     Section 10.1 REMEDIES. Upon the occurrence of any Event of Default, Borrower agrees
that Lender may take such action, without notice or demand, as it deems advisable to protect and
enforce its rights against Borrower and in and to the Property, including, but not limited to, the
following actions, each of which may be pursued concurrently or otherwise, at such time and in such
order as Lender may determine, in its sole discretion, without impairing or otherwise affecting the
other rights and remedies of Lender:

          (a) Right to Perform Borrower’s Covenants. If Borrower has failed to keep or
perform any covenant whatsoever contained in this Security Instrument or the Other Loan

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Documents, Lender may, but shall not be obligated to any person to do so, perform or attempt
to perform said covenant and any payment made or expense incurred in the performance or
attempted performance of any such covenant, together with any sum expended by Lender that is
chargeable to Borrower or subject to reimbursement by Borrower under the Loan Documents,
shall be and become a part of the “Debt”, and Borrower promises, upon demand, to pay to
Lender, at the place where the Note is payable, all sums so incurred, paid or expended by
Lender, with interest from the date when paid, incurred or expended by Lender at the Default
Rate.

          (b) Right of Entry. Lender may, prior or subsequent to the institution of any
foreclosure proceedings, enter upon the Property, or any part thereof, and take exclusive
possession of the Property and of all books, records, and accounts relating thereto and to
exercise without interference from Borrower any and all rights which Borrower has with
respect to the management, possession, operation, protection, or preservation of the
Property, including without limitation the right to rent the same for the account of
Borrower and to deduct from such Rents all costs, expenses, and liabilities of every
character incurred by Lender in collecting such Rents and in managing, operating,
maintaining, protecting, or preserving the Property and to apply the remainder of such Rents
on the Debt in such manner as Lender may elect. All such costs, expenses, and liabilities
incurred by Lender in collecting such Rents and in managing, operating, maintaining,
protecting, or preserving the Property, if not paid out of Rents as hereinabove provided,
shall constitute a demand obligation owing by Borrower and shall bear interest from the date
of expenditure until paid at the Default Rate, all of which shall constitute a portion of
the Debt. If necessary to obtain the possession provided for above, Lender may invoke any
and all legal remedies to dispossess Borrower, including specifically one or more actions
for forcible entry and detainer, trespass to try title, and restitution. In connection with
any action taken by Lender pursuant to this Subsection 10.1(b), Lender shall not be
liable for any loss sustained by Borrower resulting from any failure to let the Property, or
any part thereof, or from any other act or omission of Lender in managing the Property
unless such loss is caused by the willful misconduct of Lender, nor shall Lender be
obligated to perform or discharge any obligation, duty, or liability under any Lease or
under or by reason hereof or the exercise of rights or remedies hereunder. Borrower shall
and does hereby agree to indemnify Lender for, and to hold Lender harmless from, any and all
liability, loss, or damage, which may or might be incurred by Lender under any such Lease or
under or by reason hereof or the exercise of rights or remedies hereunder, and from any and
all claims and demands whatsoever
which may be asserted against Lender by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants, or agreements
contained in any such Lease. Should Lender incur any such liability, the amount thereof,
including without limitation costs, expenses, and reasonable attorneys’ fees, together with
interest thereon from the date of expenditure until paid at the Default Rate, shall be
secured hereby, and Borrower shall reimburse Lender therefor immediately upon demand.
Nothing in this Subsection 10.1(b) shall impose any duty, obligation, or
responsibility upon Lender for the control, care, management, leasing, or repair of the
Property, nor for the carrying out of any of the terms and conditions of any such Lease; nor
shall it operate to make Lender responsible or liable for any waste committed on the
Property by the tenants or by any other parties, or for any hazardous substances or

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environmental conditions on or under the Property, or for any dangerous or defective
condition of the Property or for any negligence in the management, leasing, upkeep, repair,
or control of the Property resulting in loss or injury or death to any tenant, licensee,
employee, or stranger. Borrower hereby assents to, ratifies, and confirms any and all
actions of Lender with respect to the Property taken under this subsection.

          (c) Right to Accelerate. Lender may, without notice (except as provided in
Section 9.1(o) above) demand, presentment, notice of nonpayment or nonperformance,
protest, notice of protest, notice of intent to accelerate, notice of acceleration, or any
other notice or any other action, all of which are hereby waived by Borrower and all other
parties obligated in any manner whatsoever on the Debt, declare the entire unpaid balance of
the Debt immediately due and payable, and upon such declaration, the entire unpaid balance
of the Debt shall be immediately due and payable.

          (d) Foreclosure-Power of Sale. Lender may institute a proceeding or
proceedings, judicial, or nonjudicial, by advertisement or otherwise, for the complete or
partial foreclosure of this Security Instrument or the complete or partial sale of the
Property under power of sale or under any applicable provision of law. Lender may sell the
Property, and all estate, right, title, interest, claim and demand of Borrower therein, and
all rights of redemption thereof, at one or more sales, as an entirety or in parcels, with
such elements of real and/or personal property, and at such time and place and upon such
terms as it may deem expedient, or as may be required by applicable law, and in the event of
a sale, by foreclosure or otherwise, of less than all of the Property, this Security
Instrument shall continue as a lien and security interest on the remaining portion of the
Property.

          (e) Rights Pertaining to Sales. Subject to the requirements of applicable law
and except as otherwise provided herein, the following provisions shall apply to any sale or
sales of all or any portion of the Property under or by virtue of Subsection 10.1(d)
above, whether made under the power of sale herein granted or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale:

               (i) Lender may conduct any number of sales from time to time. The power of
sale set forth above shall not be exhausted by any one or more such sales as to any
part of the Property which shall not have been sold, nor by any sale
which is not completed or is defective in Lender’s opinion, until the Debt
shall have been paid in full.

               (ii) Any sale may be postponed or adjourned by public announcement at the time
and place appointed for such sale or for such postponed or adjourned sale without
further notice.

               (iii) After each sale, Lender or an officer of any court empowered to do so
shall execute and deliver to the purchaser or purchasers at such sale a good and
sufficient instrument or instruments granting, conveying, assigning and transferring
all right, title and interest of Borrower in and to the property and rights sold and
shall receive the proceeds of said sale or sales and apply the same

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as specified in
the Note. Lender is hereby appointed the true and lawful attorney-in-fact of
Borrower, which appointment is irrevocable and shall be deemed to be coupled with an
interest, in Borrower’s name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the property and rights so sold, Borrower
hereby ratifying and confirming all that said attorney or such substitute or
substitutes shall lawfully do by virtue thereof. Nevertheless, Borrower, if
requested by Lender, shall ratify and confirm any such sale or sales by executing
and delivering to Lender or such purchaser or purchasers all such instruments as may
be advisable, in Lender’s judgment, for the purposes as may be designated in such
request.

               (iv) Any and all statements of fact or other recitals made in any of the
instruments referred to in Subsection 10.1(e)(iii) given by Lender shall be
taken as conclusive and binding against all persons as to evidence of the truth of
the facts so stated and recited.

               (v) Any such sale or sales shall operate to divest all of the estate, right,
title, interest, claim and demand whatsoever, whether at law or in equity, of
Borrower in and to the properties and rights so sold, and shall be a perpetual bar
both at law and in equity against Borrower and any and all persons claiming or who
may claim the same, or any part thereof or any interest therein, by, through or
under Borrower to the fullest extent permitted by applicable law.

               (vi) Upon any such sale or sales, Lender may bid for and acquire the Property
and, in lieu of paying cash therefor, may make settlement for the purchase price by
crediting against the Debt the amount of the bid made therefor, after deducting
therefrom the expenses of the sale, the cost of any enforcement proceeding
hereunder, and any other sums which Lender is authorized to deduct under the terms
hereof, to the extent necessary to satisfy such bid.

               (vii) Upon any such sale, it shall not be necessary for Lender or any public
officer acting under execution or order of court to have present or constructively
in its possession any of the Property.

          (f) Lender’s Judicial Remedies. Lender may proceed by suit or suits, at law or
in equity, to enforce the payment of the Debt to foreclose the liens and security interests
of this Security Instrument as against all or any part of the Property, and to have all or
any part of the Property sold under the judgment or decree of a court of competent
jurisdiction. This remedy shall be cumulative of any other nonjudicial remedies available
to Lender under this Security Instrument, the Note or the Other Loan Documents. Proceeding
with a request or receiving a judgment for legal relief shall not be or be deemed to be an
election of remedies or bar any available nonjudicial remedy of Lender.

          (g) Lender’s Right to Appointment of Receiver. Lender, as a matter of right
and (i) without regard to the sufficiency of the security for repayment of the Debt and
without notice to Borrower, (ii) without any showing of insolvency, fraud, or mismanagement
on the part of Borrower, (iii) without the necessity of filing any judicial

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or other
proceeding other than the proceeding for appointment of a receiver, and (iv) without regard
to the then value of the Property, shall be entitled to the appointment of a receiver or
receivers for the protection, possession, control, management and operation of the Property,
including (without limitation), the power to collect the Rents, enforce this Security
Instrument and, in case of a sale and deficiency, during the full statutory period of
redemption (if any), whether there be a redemption or not, as well as during any further
times when Borrower, except for the intervention of such receiver, would be entitled to
collection of such Rents. Borrower hereby irrevocably consents to the appointment of a
receiver or receivers. Any receiver appointed pursuant to the provisions of this subsection
shall have the usual powers and duties of receivers in such matters.

          (h) Commercial Code Remedies. Exercise any and all rights and remedies granted
to a secured party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing: (i) the right to take possession of the Personal
Property or any part thereof, and to take such other measures as Lender may deem necessary
for the care, protection and preservation of the Personal Property, and (ii) request
Borrower at its expense to assemble the Personal Property and make it available to Lender at
a convenient place acceptable to Lender. Any notice of sale, disposition or other intended
action by Lender with respect to the Personal Property sent to Borrower in accordance with
the provisions hereof at least ten (10) days prior to such action, shall constitute
commercially reasonable notice to Borrower.

          (i) Apply Escrow Funds. Lender may apply any Funds (as defined in the Escrow
Agreement) and any other sums held in escrow or otherwise by Lender in accordance with the
terms of this Security Instrument or any Other Loan Document to the payment of the following
items in any order in its uncontrolled discretion:

               (i) Taxes and Other Charges;

               (ii) Insurance Premiums;

               (iii) Interest on the unpaid principal balance of the Note;

               (iv) Amortization of the unpaid principal balance of the Note; and

               (v) All other sums payable pursuant to the Note, this Security Instrument and
the Other Loan Documents, including without limitation advances made by Lender
pursuant to the terms of this Security Instrument and reasonable internal costs and
expenses incurred by Lender including, without limitation, Lender’s reasonable
in-house legal fees.

          (j) Other Rights. Lender (i) may surrender the Policies maintained pursuant to
this Security Instrument or any part thereof, and upon receipt shall apply the unearned
premiums as a credit on the Debt, and, in connection therewith, Borrower hereby appoints
Lender as agent and attorney-in-fact (which is coupled with an interest and is therefore
irrevocable) for Borrower to collect such premiums; and (ii) may apply the Tax and Insurance
Funds (as defined in the Escrow Agreement) and/or the On-going

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Replacement Funds (as defined
in the Escrow Agreement) and any other funds held by Lender toward payment of the Debt; and
(iii) shall have and may exercise any and all other rights and remedies which Lender may
have at law or in equity, or by virtue of any of the Loan Documents, or otherwise.

          (k) Discontinuance of Remedies. In case Lender shall have proceeded to invoke
any right, remedy, or recourse permitted under the Loan Documents and shall thereafter elect
to discontinue or abandon same for any reason, Lender shall have the unqualified right so to
do and, in such event, Borrower and Lender shall be restored to their former positions with
respect to the Debt, the Loan Documents, the Property or otherwise, and the rights,
remedies, recourses and powers of Lender shall continue as if same had never been invoked.

          (l) Remedies Cumulative. All rights, remedies, and recourses of Lender granted
in the Note, this Security Instrument and the Other Loan Documents, any other pledge of
collateral, or otherwise available at law or equity: (i) shall be cumulative and
concurrent; (ii) may be pursued separately, successively, or concurrently against Borrower,
the Property, or any one or more of them, at the sole discretion of Lender; (iii) may be
exercised as often as occasion therefor shall arise, it being agreed by Borrower that the
exercise or failure to exercise any of same shall in no event be construed as a waiver or
release thereof or of any other right, remedy, or recourse; (iv) shall be nonexclusive; (v)
shall not be conditioned upon Lender exercising or pursuing any remedy in relation to the
Property prior to Lender bringing suit to recover the Debt; and (vi) in the event Lender
elects to bring suit on the Debt and obtains a judgment against Borrower prior to exercising
any remedies in relation to the Property, all liens and security interests, including the
lien of this Security Instrument, shall remain in full force and effect and may be exercised
thereafter at Lender’s option.

          (m) Bankruptcy Acknowledgment. In the event the Property or any portion
thereof or any interest therein becomes property of any bankruptcy estate or subject to any
state or federal insolvency proceeding, then Lender shall immediately become entitled, in
addition to all other relief to which Lender may be entitled under this Security Instrument,
to obtain (i) an order from the Bankruptcy Court or other appropriate court
granting immediate relief from the automatic stay pursuant to § 362 of the Bankruptcy
Code so to permit Lender to pursue its rights and remedies against Borrower as provided
under this Security Instrument and all other rights and remedies of Lender at law and in
equity under applicable state law, and (ii) an order from the Bankruptcy Court prohibiting
Borrower’s use of all “cash collateral” as defined under § 363 of the Bankruptcy Code. In
connection with such Bankruptcy Court orders, Borrower shall not contend or allege in any
pleading or petition filed in any court proceeding that Lender does not have sufficient
grounds for relief from the automatic stay. Any bankruptcy petition or other action taken
by the Borrower to stay, condition, or inhibit Lender from exercising its remedies are
hereby admitted by Borrower to be in bad faith and Borrower further admits that Lender would
have just cause for relief from the automatic stay in order to take such actions authorized
under state law.

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          (n) Application of Proceeds. The proceeds from any sale, lease, or other
disposition made pursuant to this Security Instrument, or the proceeds from the surrender of
any insurance policies pursuant hereto, or any Rents collected by Lender from the Property,
or the Tax and Insurance Escrow Fund or the Replacement Escrow Fund (as defined in the
Escrow Agreement) or proceeds from insurance which Lender elects to apply to the Debt
pursuant to Article 3 hereof, shall be applied by Lender to the Debt in the
following order and priority: (1) to the payment of all expenses of advertising, selling,
and conveying the Property or part thereof, and/or prosecuting or otherwise collecting
Rents, proceeds, premiums or other sums including reasonable attorneys’ fees; (2) to that
portion, if any, of the Debt with respect to which no person or entity has personal or
entity liability for payment (the “Exculpated Portion”), and with respect to the Exculpated
Portion as follows: first, to accrued but unpaid interest, second, to matured principal, and
third, to unmatured principal in inverse order of maturity; (3) to the remainder of the Debt
as follows: first, to the remaining accrued but unpaid interest, second, to the matured
portion of principal of the Debt, and third, to prepayment of the unmatured portion, if any,
of principal of the Debt applied to installments of principal in inverse order of maturity;
(4) the balance, if any or to the extent applicable, remaining after the full and final
payment of the Debt to the holder or beneficiary of any inferior liens covering the
Property, if any, in order of the priority of such inferior liens (Lender shall hereby be
entitled to rely exclusively on a commitment for title insurance issued to determine such
priority); and (5) the cash balance, if any, to the Borrower. The application of proceeds
of sale or other proceeds as otherwise provided herein shall be deemed to be a payment of
the Debt like any other payment. The balance of the Debt remaining unpaid, if any, shall
remain fully due and owing in accordance with the terms of the Note and the other Loan
Documents.

     Section 10.2 RIGHT OF ENTRY. Lender and its agents shall have the right to enter and
inspect the Property at all reasonable times.

ARTICLE 11 —  INDEMNIFICATION; SUBROGATION

     Section 11.1
GENERAL INDEMNIFICATION.

          (a) Borrower shall indemnify, defend and hold Lender harmless against: (i) any and all
claims for brokerage, leasing, finder’s or similar fees which may be made relating to the
Property or the Debt, and (ii) any and all liability, obligations, losses, damages,
penalties, claims, actions, suits, costs and expenses (including Lender’s reasonable
attorneys’ fees, together with reasonable appellate counsel fees, if any) of whatever kind
or nature which may be asserted against, imposed on or incurred by Lender in connection with
the Debt, this Security Instrument, the Property, or any part thereof, or the exercise by
Lender of any rights or remedies granted to it under this Security Instrument;
provided, however, that nothing herein shall be construed to obligate
Borrower to indemnify, defend and hold harmless Lender from and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and
expenses enacted against, imposed on or incurred by Lender by reason of Lender’s willful
misconduct or gross negligence.

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          (b) If Lender is made a party defendant to any litigation or any claim is threatened or
brought against Lender concerning the secured indebtedness, this Security Instrument, the
Property, or any part thereof, or any interest therein, or the construction, maintenance,
operation or occupancy or use thereof, then Lender shall notify Borrower of such litigation
or claim and Borrower shall indemnify, defend and hold Lender harmless from and against all
liability by reason of said litigation or claims, including reasonable attorneys’ fees
(together with reasonable appellate counsel fees, if any). The right to such attorneys’
fees (together with reasonable appellate counsel fees, if any) and expenses incurred by
Lender in any such litigation or claim of the type described in this Subsection
11.1(b), whether or not any such litigation or claim is prosecuted to judgment,
shall be deemed to have accrued on the commencement of such claim or action and shall be
enforceable whether or not such claim or action is prosecuted to judgment. If Lender
commences an action against Borrower to enforce any of the terms hereof or to prosecute any
breach by Borrower of any of the terms hereof or to recover any sum secured hereby, Borrower
shall pay to Lender its reasonable attorneys’ fees (together with reasonable appellate
counsel fees, if any) and expenses. If Borrower breaches any term of this Security
Instrument, Lender may engage the services of an attorney or attorneys to protect its rights
hereunder, and in the event of such engagement following any breach by Borrower, Borrower
shall pay Lender reasonable attorneys’ fees (together with reasonable appellate counsel
fees, if any) and expenses incurred by Lender, whether or not an action is actually
commenced against Borrower by reason of such breach. All references to “attorneys” in this
Subsection 11.1(b) and elsewhere in this Security Instrument shall include without
limitation any attorney or law firm engaged by Lender and Lender’s in-house counsel, and all
references to “fees and expenses” in this Subsection 11.1(b) and elsewhere in this
Security Instrument shall include without limitation any fees of such attorney or law firm
and any allocation charges and allocation costs of Lender’s in-house counsel.

          (c) A waiver of subrogation shall be obtained by Borrower from its insurance carrier
and, consequently, Borrower waives any and all right to claim or recover against Lender, its
officers, employees, agents and representatives, for loss of or damage to Borrower, the
Property, Borrower’s property or the property of others under Borrower’s control from any
cause insured against or required to be insured against by the provisions of this Security
Instrument.

     Section 11.2 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and
against any and all Losses (as hereinafter defined) imposed upon or incurred by or asserted against
any Indemnified Parties (other than those arising solely from a state of facts that first came into
existence after Lender acquired title to the Property through foreclosure or a deed in lieu
thereof), and directly or indirectly arising out of or in any way relating to any one or more of
the following: (a) any presence of any Hazardous Substances (as hereinafter defined) in, on,
above, or under the Property; (b) any past, present or future Release (as hereinafter defined) of
Hazardous Substances in, on, above, under or from the Property; (c) any activity by Borrower, any
person or entity affiliated with Borrower, and any tenant or other user of the Property in
connection with any actual, proposed or threatened use, treatment, storage, holding, existence,
disposition or other Release, generation, production, manufacturing, processing, refining,

38

 

control,
management, abatement, removal, handling, transfer or transportation to or from the Property of any
Hazardous Substances at any time located in, under, on or above the Property; (d) any activity by
Borrower, any person or entity affiliated with Borrower, and any tenant or other user of the
Property in connection with any actual or proposed Remediation (as hereinafter defined) of any
Hazardous Substances at any time located in, under, on or above the Property, whether or not such
Remediation is voluntary or pursuant to court or administrative order, including but not limited to
any removal, remedial or corrective action; (e) any past, present or threatened non-compliance or
violations of any Environmental Law (as hereinafter defined) (or permits issued pursuant to any
Environmental Law) in connection with the Property or operations thereon, including but not limited
to any failure by Borrower, any person or entity affiliated with Borrower, and any tenant or other
user of the Property to comply with any order of any governmental authority in connection with any
Environmental Laws; (f) the imposition, recording or filing or the future imposition, recording or
filing of any Environmental Lien (as hereinafter defined) encumbering the Property; (g) any
administrative processes or proceedings or judicial proceedings in any way connected with any
matter addressed in this Section 11.2; (h) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to perform any covenants or other
obligations under the Environmental Indemnity of even date executed by Borrower; and (i) any
diminution in value of the Property in any way connected with any occurrence or other matter
referred to in this Section 11.2.

     The term “Environmental Law” means any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law, relating to
protection of human health or the environment, relating to Hazardous Substances, relating to
liability for or costs of Remediation or prevention of Releases of Hazardous Substances or relating
to liability for or costs of other actual or threatened danger to human health or the environment.
The term “Environmental Law” includes, but is not limited to, the following statutes, as amended,
any successor thereto, and any regulations promulgated pursuant thereto, and any state or local
statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive Environmental
Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act;
the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including
but not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water
Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental
Policy Act; and the River and Harbors Appropriation Act. The term “Environmental Law” also
includes, but is not limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law conditioning transfer of
property upon a negative declaration or other approval of a governmental authority of the
environmental condition of the Property; requiring notification or disclosure of Releases of
Hazardous Substances or other environmental condition of the Property to any governmental authority
or other person or entity, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or other authorization for
lawful activity; relating to nuisance, trespass or other causes of action related to the Property;
and relating to wrongful death, personal injury, or property or other damage in connection with any
physical condition or use of the Property.

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     The term “Environmental Lien” includes but is not limited to any lien or other encumbrance
imposed pursuant to Environmental Law, whether due to any act or omission of Borrower or any other
person or entity.

     The term “Hazardous Substances” includes but is not limited to any and all substances (whether
solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes,
hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning
or regulatory effect under any present or future Environmental Laws or that may have a negative
impact on human health or the environment, including but not limited to petroleum and petroleum
products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, lead-based
paints, radon, radioactive materials, flammables and explosives.

     The term “Indemnified Parties” includes but is not limited to Lender, any person or entity who
is or will have been involved in originating the Loan evidenced by the Note, any person or entity
who is or will have been involved in servicing the Loan, any person or entity in whose name the
encumbrance created by this Security Instrument is or will have been recorded, persons and entities
who may hold or acquire or will have held a full or partial interest in the Loan (including but not
limited to those who may acquire any interest in Securities, as well as custodians, trustees and
other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of
third parties), as well as the respective directors, officers, shareholders, partners, employees,
agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries,
participants, successors and assign of any and all of the foregoing (including but not limited to
any other person or entity who holds or acquires or will have held a participation or other full or
partial interest in the Loan or the Property, whether during the term of the Loan or as part of or
following foreclosure pursuant to the Loan) and
including but not limited to any successors by merger, consolidation or acquisition of all or
a substantial part of Lender’s assets and business.

     The term “Losses” includes but is not limited to any claims, suits, liabilities (including but
not limited to strict liabilities), administrative or judicial actions or proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value, fines, penalties, charges, fees,
expenses, costs of Remediation (whether or not performed voluntarily), judgments, award, amounts
paid in settlement, foreseeable and unforeseeable consequential damages, litigation costs,
attorneys’ fees, engineer’s fees, environmental consultants’ fees and investigation costs
(including but not limited to costs for sampling, testing and analysis of soil, water, air,
building materials, and other materials and substances whether solid, liquid or gas), of whatever
kind or nature, and whether or not incurred in connection with any judicial or administrative
proceedings.

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

     The term “Remediation” includes but is not limited to any response, remedial, removal, or
corrective action; any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate
any Hazardous Substance; any actions to prevent, cure or mitigate any Release of any

40

 

Hazardous
Substance; any action to comply with any Environmental Laws or with any permits issued pursuant
thereto; any inspection, investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous Substances or to anything
referred to in this Article 11.

     Section 11.3 DUTY TO DEFEND AND ATTORNEYS AND OTHER FEES AND EXPENSES. Upon written
request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any
Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals
approved by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may,
in their sole and absolute discretion, engage their own attorneys and other professionals to defend
or assist them, and, at the option of Indemnified Parties, their attorneys shall control the
resolution of claim or proceeding. Upon demand, Borrower shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of
reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories
and other professionals in connection therewith.

     Section 11.4 SURVIVAL OF INDEMNITIES. Notwithstanding any provision of this Security
Instrument or any other Loan Document to the contrary, the provisions of Section 11.1 and
Section 11.2, and Borrower’s obligations thereunder, shall survive (a) the repayment of the
Note, (b) the foreclosure of this Security Instrument, and (c) the release (or reconveyance, as
applicable) of the lien of this Security Instrument.

ARTICLE 12 — SECURITY AGREEMENT

     Section 12.1 SECURITY AGREEMENT. This Security Instrument is both a real property
mortgage and a “security agreement” within the meaning of the Uniform Commercial Code. The
Property includes both real and personal property and all other rights and interests, whether
tangible or intangible in nature, of Borrower in the Property. Borrower by executing and
delivering this Security Instrument has granted and hereby grants to Lender, as security for the
Obligations, a security interest in the Property to the full extent that the Property may be
subject to the Uniform Commercial Code (said portion of the Property so subject to the Uniform
Commercial Code being called in this paragraph the “Collateral”). Borrower hereby authorizes
Lender to prepare and file, in form and substance satisfactory to Lender, such financing
statements, continuation statements, other uniform commercial code forms and shall pay all expenses
and fees in connection with the filing and recording thereof, and such further assurances as Lender
may from time to time, reasonably consider necessary to create, perfect, and preserve Lender’s
security interest herein granted. This Security Instrument shall also be effective as a “fixture
filing” as to Property which is or is to become fixtures. Information concerning the security
interest herein granted may be obtained from the parties at the addresses of the parties set forth
in the first paragraph of this Security Instrument. If an Event of Default shall occur, Lender, in
addition to any other rights and remedies which they may have, shall have and may exercise
immediately and without demand, any and all rights and remedies granted to a secured party upon
default under the Uniform Commercial Code, including, without limiting the generality of the
foregoing, the right to take possession of the Collateral or any part thereof, and to take such
other measures as Lender may deem necessary for the care, protection and preservation of the
Collateral. Upon request or demand of Lender, Borrower shall at its expense

41

 

assemble the
Collateral and make it available to Lender at a convenient place acceptable to Lender. Borrower
shall pay to Lender on demand any and all expenses, including legal expenses and attorneys’ fees,
incurred or paid by Lender in protecting the interest in the Collateral and in enforcing the rights
hereunder with respect to the Collateral. Any notice of sale, disposition or other intended action
by Lender with respect to the Collateral sent to Borrower in accordance with the provisions hereof
at least ten (10) days prior to such action, shall constitute commercially reasonable notice to
Borrower. The proceeds of any disposition of the Collateral, or any part thereof, may be applied
by Lender to the payment of the Obligations in such priority and proportions as Lender in its
discretion shall deem proper. Borrower shall promptly advise Lender of the accrual of any
commercial tort claims involving the Property. In the event of any change in name, identity,
structure, or jurisdiction or form of organization of any Borrower, such Borrower shall notify
Lender thereof, and Lender shall be authorized to prepare and file such Uniform Commercial Code
forms as Lender may deem necessary to maintain the priority of Lender’s lien upon and security
interest in the Collateral, and Borrower shall pay all expenses and fees in connection with such
filing. Lender shall also be authorized to prepare and file such other additional Uniform
Commercial Code forms or continuation statements as Lender shall deem necessary, and Borrower shall
pay all expenses and fees in connection with the filing thereof, it being understood and agreed,
however, that no such additional documents shall increase Borrower’s obligations under the Note,
this Security Instrument and the Other Loan Documents. Borrower hereby irrevocably appoints Lender
as its attorney-in-fact, coupled with an interest, to file with the appropriate public office on
its behalf any financing or other statements signed only by Lender, as Borrower’s attorney-in-fact,
in connection with the Collateral covered by this Security Instrument. Notwithstanding the
foregoing, Borrower shall appear and defend in any action or proceeding which affects or
purports to affect the Property and any interest or right therein, whether such proceeding affects
title or any other rights in the Property (and in conjunction therewith, Borrower shall fully
cooperate with Lender in the event Lender is a party to such action or proceeding).

     Section 12.2 FIXTURE FILING INFORMATION. The information in the subsections below this
paragraph is provided in connection with the filing of this Security Instrument as a financing
statement as referred to above, and the Borrower hereby represents and warrants such information to
be true and complete as of the date of this Security Instrument.

          (a) The Borrower is the record owner of the real estate described in this Security
Instrument. The name and mailing address of the record owner of the real estate described
in this Security Instrument is set forth in the first paragraph of this Security Instrument.

          (b) For purposes of the Uniform Commercial Code, Borrower is the Debtor. The name,
mailing address, type of organization and state of formation of the Debtor (Borrower) is set
forth in the first paragraph of this Security Instrument. The Organizational Identification
Number of the Borrower is 3794611.

          (c) For purposes of the Uniform Commercial Code, the Lender is the Secured Party. The
name and mailing address of the Secured Party (Lender) is:

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JPMorgan Chase Bank, N.A.

c/o ARCap Servicing, Inc.

5605 North MacArthur Boulevard, Suite 950

Irving, Texas 75038

          (d) This document covers goods which are or are to become fixtures.

ARTICLE 13 — WAIVERS

     Section 13.1 MARSHALLING AND OTHER MATTERS. Borrower hereby waives, to the extent
permitted by law, the benefit of all appraisement, valuation, stay, extension, reinstatement and
redemption laws now or hereafter in force and all rights of marshalling in the event of any sale
hereunder of the Property or any part thereof or any interest therein. Further, Borrower hereby
expressly waives any and all rights of redemption from sale under any order or decree of
foreclosure of this Security Instrument on behalf of Borrower, and on behalf of each and every
person acquiring any interest in or title to the Property subsequent to the date of this Security
Instrument and on behalf of all persons to the extent permitted by applicable law.

     Section 13.2 WAIVER OF NOTICE. Borrower shall not be entitled to any notices of any
nature whatsoever from Lender except with respect to matters for which this Security Instrument
specifically and expressly provides for the giving of notice by Lender to Borrower and except with
respect to matters for which Lender is required by applicable law to give notice, and Borrower
hereby expressly waives the right to receive any notice from Lender with respect to any matter for
which this Security Instrument does not specifically and expressly provide for the giving of notice
by Lender to Borrower.

     Section 13.3 SOLE DISCRETION OF LENDER. Wherever pursuant to this Security Instrument
Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to
be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide that
arrangements or terms are satisfactory or not satisfactory shall be in the sole discretion of
Lender and shall be final and conclusive, except as may be otherwise expressly and specifically
provided herein.

     Section 13.4 SURVIVAL. The indemnifications made pursuant to Article 11,
shall continue indefinitely in full force and effect and shall survive and shall in no way be
impaired by: any satisfaction or other termination of this Security Instrument, any assignment or
other transfer of all or any portion of this Security Instrument or Lender’s interest in the
Property (but, in such case, shall benefit both Indemnified Parties and any assignee or
transferee), any exercise of Lender’s rights and remedies pursuant hereto including but not limited
to foreclosure or acceptance of a deed in lieu of foreclosure, any exercise of any rights and
remedies pursuant to the Note or any of the Other Loan Documents, any transfer of all or any
portion of the Property (whether by Borrower or by Lender following foreclosure or acceptance of a
deed in lieu of foreclosure or at any other time), any amendment to this Security Instrument, the
Note or the Other Loan Documents, and any act or omission that might otherwise be construed as a
release or discharge of Borrower from the obligations pursuant hereto.

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     Section 13.5 WAIVER OF TRIAL BY JURY. BORROWER AND LENDER HEREBY AGREE NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND EACH WAIVES ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS SECURITY
INSTRUMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION
ARISING IN CONNECTION THEREWITH INCLUDING, BUT NOT LIMITED TO THOSE RELATING TO (A) ALLEGATIONS
THAT A PARTNERSHIP EXISTS BETWEEN LENDER AND BORROWER; (B) USURY OR PENALTIES OR DAMAGES THEREFOR;
(C) ALLEGATIONS OF UNCONSCIONABLE ACTS, DECEPTIVE TRADE PRACTICE, LACK OF GOOD FAITH OR FAIR
DEALING, LACK OF COMMERCIAL REASONABLENESS, OR SPECIAL RELATIONSHIPS (SUCH AS FIDUCIARY, TRUST OR
CONFIDENTIAL RELATIONSHIP); (D) ALLEGATIONS OF DOMINION, CONTROL, ALTER EGO, INSTRUMENTALITY,
FRAUD, REAL ESTATE FRAUD, MISREPRESENTATION, DURESS, COERCION, UNDUE INFLUENCE, INTERFERENCE OR
NEGLIGENCE; (E) ALLEGATIONS OF TORTIOUS INTERFERENCE WITH PRESENT OR PROSPECTIVE BUSINESS
RELATIONSHIPS OR OF ANTITRUST; OR (F) SLANDER, LIBEL OR DAMAGE TO REPUTATION. THIS WAIVER OF RIGHT
TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. LENDER OR BORROWER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH
IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY LENDER AND BORROWER.

     Section 13.6 WAIVER OF AUTOMATIC OR SUPPLEMENTAL STAY. In the event of the filing of
any voluntary or involuntary petition under the Bankruptcy Code by or against Borrower (other than
an involuntary petition filed by or joined in by Lender), the Borrower shall not assert, or request
any other party to assert, that the automatic stay under § 362 of the Bankruptcy Code shall
operate or be interpreted to stay, interdict, condition, reduce or inhibit the ability of Lender to
enforce any rights it has by virtue of this Security Instrument, or any other rights that Lender
has, whether now or hereafter acquired, against any guarantor of the Debt. Further, Borrower shall
not seek a supplemental stay or any other relief, whether injunctive or otherwise, pursuant to §
105 of the Bankruptcy Code or any other provision therein to stay, interdict, condition,
reduce or inhibit the ability of Lender to enforce any rights it has by virtue of this Security
Instrument against any guarantor of the Debt. The waivers contained in this paragraph are a
material inducement to Lender’s willingness to enter into this Security Instrument and Borrower
acknowledges and agrees that no grounds exist for equitable relief which would bar, delay or impede
the exercise by Lender of Lender’s rights and remedies against Borrower or any guarantor of the
Debt.

ARTICLE 14 — NOTICES

     Section 14.1 NOTICES. All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery, if delivered in person or by facsimile
transmission with receipt acknowledged, (ii) one (1) Business Day after having been deposited

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for
overnight delivery with any reputable overnight courier service, or (iii) three (3) Business Days
after having been deposited in any post office or mail depository regularly maintained by the U.S.
Postal Service and sent by registered or certified mail, postage prepaid, addressed as follows:

	 	 	 
	If to Borrower:

	 	260 Springside Drive, Akron OH LLC
	 

	 	1521 Westbranch Drive, Suite 200
	 

	 	McLean, Virginia 22102
	 

	 	Attention: Matt Tucker
	 

	 	Facsimile No.: (703) 287-5801
	 
	 	 
	With a copy to:

	 	Winston & Strawn LLP
	 

	 	1700 K Street, N.W.
	 

	 	Washington D.C. 20006
	 

	 	Attention: Richard R. Williamson, Esq.
	 

	 	Facsimile No.: (202) 282-5100
	 
	 	 
	If to Lender:

	 	JPMorgan Chase Bank, N.A.
	 

	 	c/o L.J. Melody & Company
	 

	 	5847 San Felipe Street, Suite 4400
	 

	 	Houston, Texas 77057
	 

	 	Attention: Manager, Loan Servicing and Administration
	 

	 	Facsimile No.: (713) 787-1998
	 
	 	 
	With a copy to:

	 	ARCap Servicing, Inc.
	 

	 	5605 North MacArthur Boulevard, Suite 950
	 

	 	Irving, Texas 75038
	 

	 	Attention: Clyde F. Greenhouse
	 

	 	Facsimile No.: (972) 580-0778
	 
	 	 
	With a copy to:

	 	Stites & Harbison, PLLC
	 

	 	400 W. Market Street
	 

	 	Suite 1800
	 

	 	Louisville, Kentucky 40202
	 

	 	Attention: Barry A. Hines, Esq.
	 

	 	Facsimile No.: (502) 587-6391

or addressed as such party may from time to time designate by written notice to the other parties.
For purposes of this subsection, the term “Business Day” shall mean a day on which commercial banks
are not authorized or required by law to close in New York, New York.

     Any party by notice to the other parties may designate additional or different addresses for
subsequent notices or communications.

45

 

ARTICLE 15 — APPLICABLE LAW

     Section 15.1 GOVERNING LAW; JURISDICTION. This Security Instrument shall be governed
by and construed in accordance with applicable federal law and the laws of the state where the
Property is located, without reference or giving effect to any choice of law doctrine. Borrower
hereby irrevocably submits to the jurisdiction of any court of competent jurisdiction located in
the state in which the Property is located in connection with any proceeding arising out of or
relating to this Security Instrument.

     Section 15.2 USURY LAWS. This Security Instrument and the Note are subject to the
express condition that at no time shall Borrower be obligated or required to pay interest on the
Debt at a rate which could subject the holder of the Note to either civil or criminal liability as
a result of being in excess of the maximum interest rate which Borrower is permitted by applicable
law to contract or agree to pay. If by the terms of this Security Instrument or the Note, Borrower
is at any time required or obligated to pay interest on the Debt at a rate in excess of such
maximum rate, the rate of interest under the Security Instrument and the Note shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate shall be applied and shall be
deemed to have been payments in reduction of the principal balance of the Note. All sums paid or
agreed to be paid to Lender for the use, forbearance, or detention of the Debt shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full
stated term of the Note until payment in full so that the rate or amount of interest on account of
the Debt does not exceed the maximum lawful rate of interest from time to time in effect and
applicable to the Debt for so long as the Debt is outstanding.

     Section 15.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers and remedies
provided in this Security Instrument may be exercised only to the extent that the exercise thereof
does not violate any applicable provisions of law and are intended to be limited to the extent
necessary so that they will not render this Security Instrument invalid, unenforceable or not
entitled to be recorded, registered or filed under the provisions of any applicable law. If any
term of this Security Instrument or any application thereof shall be invalid or unenforceable, the
remainder of this Security Instrument and any other application of the term shall not be affected
thereby.

ARTICLE 16 — SECONDARY MARKET

     Section 16.1 TRANSFER OF LOAN. Lender may, at any time, sell, transfer or assign the
Note, this Security Instrument and the Other Loan Documents, and any or all servicing rights with
respect thereto, or grant participations therein or issue mortgage pass-through certificates or
other securities evidencing a beneficial interest in a rated or unrated public offering or private
placement (the “Securities”). Lender may forward to each purchaser, transferee, assignee,
servicer, participant, investor in such Securities or any Rating Agency (as hereinafter defined)
rating such Securities (collectively, the “Investor”) and each prospective Investor, all documents
and information which Lender now has or may hereafter acquire relating to the Debt and to Borrower,
any Guarantor, and the Property, whether furnished by Borrower, any Guarantor, or otherwise, as
Lender determines necessary or desirable. The term “Rating Agency” shall mean each statistical
rating agency that has assigned a rating to the Securities.

46

 

ARTICLE 17 — COSTS

     Section 17.1 PERFORMANCE AT BORROWER’S EXPENSE. Borrower acknowledges and confirms
that Lender shall impose certain administrative processing and/or commitment fees in connection
with (a) the extension, renewal, modification, amendment and termination (excluding the scheduled
maturity of the Note) of its loans, (b) the release or substitution of collateral therefor, (c)
obtaining certain consents, waivers and approvals with respect to the Property, (d) reviewing
leases, easements, or any other document submitted by or on behalf of Borrower to Lender for review
or approval, or (e) determining, at Borrower’s request, Borrower’s satisfaction of any condition
under the Loan Documents (the occurrence of any of the above shall be called an “Event”). Borrower
hereby acknowledges and agrees to pay, immediately, upon demand, all such fees (as the same may be
increased or decreased from time to time), including Lender’s reasonable in-house legal fees, and
any additional fees of a similar type or nature which may be imposed by Lender from time to time,
upon the occurrence of any Event.

     Section 17.2 ATTORNEY’S FEES FOR ENFORCEMENT. (a) Borrower shall pay all reasonable
legal fees incurred by Lender in connection with (i) the preparation of the Note, this Security
Instrument and the Other Loan Documents and (ii) the items set forth in Section 17.1 above,
and (b) Borrower shall pay to Lender on demand any and all expenses, including in-house and outside
legal expenses and attorneys’ fees, incurred or paid by Lender in protecting its interest in the
Property or Personal Property and/or collecting any amount payable or in enforcing its rights
hereunder with respect to the Property or Personal Property, whether or not
any legal proceeding is commenced hereunder or thereunder and whether or not any default or
Event of Default shall have occurred and is continuing, together with interest thereon at the
Default Rate from the date of payment or incurring by Lender until paid by Borrower.

ARTICLE 18 — DEFINITIONS

     Section 18.1 GENERAL DEFINITIONS. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this Security Instrument may
be used interchangeably in singular or plural form and the word “Borrower” shall mean “each
Borrower and any subsequent owner or owners of the Property or any part thereof or any interest
therein,” the word “Lender” shall mean “Lender and any subsequent holder of the Note,” the word
“Note” shall mean “the Note and any other evidence of indebtedness secured by this Security
Instrument,” the word “person” shall include an individual, corporation, partnership, trust,
unincorporated association, government, governmental authority, and any other entity, the word
“Property” shall include any portion of the Property and any interest therein, and the phrases
“attorneys’ fees,” “legal fees” and “counsel fees” shall include any and all attorneys’, paralegal
and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the
pre- trial, trial and appellate levels incurred or paid by Lender in protecting its interest in the
Property, the Leases and the Rents and enforcing its rights hereunder.

47

 

ARTICLE 19 — MISCELLANEOUS PROVISIONS

     Section 19.1 NO ORAL CHANGE. This Security Instrument, the Note, and the Other Loan
Documents and any provisions hereof or thereof, may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is sought.

     Section 19.2 LIABILITY. If Borrower consists of more than one person, the obligations
and liabilities of each such person hereunder shall be joint and several. This Security Instrument
shall be binding upon and inure to the benefit of Borrower and Lender and their respective
successors and assigns forever.

     Section 19.3 INAPPLICABLE PROVISIONS. If any term, covenant or condition of the Note
or this Security Instrument is held to be invalid, illegal or unenforceable in any respect, the
Note and this Security Instrument shall be construed without such provision.

     Section 19.4 HEADINGS, ETC. The headings and captions of various Sections of this
Security Instrument are for convenience of reference only and are not to be construed as defining
or limiting, in any way, the scope or intent of the provisions hereof.

     Section 19.5 DUPLICATE ORIGINALS; COUNTERPARTS. This Security Instrument may be
executed in any number of duplicate originals and each duplicate original shall be deemed to be an
original. This Security Instrument may be executed in several counterparts, each of which
counterparts shall be deemed an original instrument and all of which
together shall constitute a single Security Instrument. The failure of any party hereto to
execute this Security Instrument, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.

     Section 19.6 NUMBER AND GENDER. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and the singular form
of nouns and pronouns shall include the plural and vice versa.

     Section 19.7 SUBROGATION. If any or all of the proceeds of the Note have been used to
extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the
extent of the funds so used, Lender shall be subrogated to all of the rights, claims, liens,
titles, and interests existing against the Property heretofore held by, or in favor of, the holder
of such indebtedness and such former rights, claims, liens, titles, and interests, if any, are not
waived but rather are continued in full force and effect in favor of Lender and are merged with the
lien and security interest created herein as cumulative security for the repayment of the Debt, the
performance and discharge of Borrower’s obligations hereunder, under the Note and the Other Loan
Documents and the performance and discharge of the Other Obligations.

     Section 19.8 ENTIRE AGREEMENT. The Note, this Security Instrument and the Other Loan
Documents constitute the entire understanding and agreement between Borrower and Lender with
respect to the transactions arising in connection with the Debt and supersede all prior written or
oral understandings and agreements between Borrower and Lender with respect

48

 

thereto. Borrower
hereby acknowledges that, except as incorporated in writing in the Note, this Security Instrument
and the Other Loan Documents, there are not, and were not, and no persons are or were authorized by
Lender to make, any representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the transaction which is the subject of the Note, this Security Instrument
and the Other Loan Documents.

     Section 19.9 EXCULPATION. Reference is hereby made to Section 10 of the Note for
limitation on the liability of the Borrower hereunder. Section 10 of the Note is incorporated
herein by reference.

ARTICLE 20 — SPECIAL STATE OF OHIO PROVISIONS

     Lender is authorized, but not required, to do anything permitted to be done by a Lender by
Ohio Revised Code Section 1311.14, and any amendments thereto, for the protection of Lender’s
interest in the Property.

ARTICLE 21 — RELEASE PROVISIONS

     Upon satisfaction of the conditions set forth in Section 7(d) of the Note, Lender shall
release from the lien of this Security Instrument and the other Loan Documents the “Akron
Premises”, the “North Canton Premises”, or the “Dayton Premises”, all as shown on Exhibit A
attached hereto (the “Release Parcels”). The “Partial Release Amount” for each of the Release
Parcels is set forth on Exhibit B attached hereto.

[SIGNATURES ON FOLLOWING PAGE]

49

 

     IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by Borrower effective the day
and year first above written.

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	260 SPRINGSIDE DRIVE, AKRON OH LLC, a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	GLADSTONE COMMERCIAL LIMITED
	 

	 	 	 	PARTNERSHIP, a Delaware limited partnership, its
	 

	 	 	 	manager and sole member

	 	 	 	 	 
	 

	 	By:
	 	GLADSTONE COMMERCIAL PARTNERS, LLC,
	 

	 	 	 	a Delaware limited liability company, its general partner

	 	 	 	 	 
	 

	 	By:
	 	GLADSTONE COMMERCIAL CORPORATION,

a Maryland corporation, its Managing Member

	 	 	 	 	 
	 

	 	By:	 	 
	 	 	 	 	 
	 

	 	 	 	George Stelljes, III, Executive Vice
	 

	 	 	 	President and Chief Investment Officer

	 	 	 	 	 
	STATE OF                                         

	 	)	 
	 

	 	) ss:

	COUNTY OF                                    

	 	)	 

     On this                      day of September, 2005, before me, a Notary Public in and for said County and
State, personally appeared George Stelljes, III, the individual named in the foregoing instrument,
as Executive Vice President and Chief Investment Officer of GLADSTONE COMMERCIAL CORPORATION, a
Maryland corporation, the Managing Member of GLADSTONE COMMERCIAL PARTNERS, LLC, a Delaware limited
liability company, the general partner of GLADSTONE COMMERCIAL LIMITED PARTNERSHIP, a Delaware
limited partnership, the sole member of 260 SPRINGSIDE DRIVE, AKRON OH LLC, a Delaware limited
liability company which executed the foregoing instrument, and acknowledged that he did sign the
foregoing instrument as such Executive Vice President and Chief Investment Officer of said
corporation and that such signing is the free act and deed of said                                                              for the
uses and purposes therein mentioned.

     In testimony whereof, I have hereunto subscribed my name and affixed my official seal at
                                        ,                                         , the                      day of September, 2005.

	 	 	 
	[SEAL]
	 	 
	 	 	 
	 

	 	Notary Public

     My commission expires:                                                            

Security Instrument

 

 

This Instrument Prepared By:

Barry A. Hines, Esq.

Robert S. Greenwell, Esq.

Stites & Harbison, PLLC

400 W. Market Street, Suite 1800

Louisville, Kentucky 40202

2

 

EXHIBIT A

Page 1 of 3

Legal Description

THE AKRON PREMISES:

     All of that certain lot, piece or parcel of land, with the buildings and improvements thereon,
situate and lying at 260 Springside Drive, Summit County, Akron, Ohio and being more particularly
described as follows:

[Description of Akron Property]

     Borrower acquired the foregoing land by instrument recorded in deed records of the Summit County,
Ohio Recorder on                                          at Volume                     , Page                     .

A - 1

 

EXHIBIT A

Page 2of 3

Legal Description

THE NORTH CANTON PREMISES:

     All of that certain lot, piece or parcel of land, with the buildings and improvements thereon,
situate and lying at 3874 North Highland Park Street N. W., Stark County, North Canton, Ohio and
being more particularly described as follows:

[Description of North Canton Property]

     Borrower acquired the foregoing land by instrument recorded in deed records of the Stark County,
Ohio Recorder on                                          at Volume                     , Page                     .

2

 

EXHIBIT A

Page 3of 3

Legal Description

THE DAYTON PREMISES:

     All of that certain lot, piece or parcel of land, with the buildings and improvements thereon,
situate and lying at 4032 Linden Avenue, Montgomery County, Dayton, Ohio and being more
particularly described as follows:

[Description of Dayton Property]

     Borrower acquired the foregoing land by instrument recorded in deed records of the Montgomery
County, Ohio Recorder on                                          at Volume                     , Page                     .

3

 

EXHIBIT B

PARTIAL RELEASE AMOUNTS

	 	 	 	 	 
	Akron Premises
	 	$	7,560,000.00	 
	North Canton Premises
	 	$	2,950,000.00	 
	Dayton Premises
	 	$	2,078,000.00	 

4

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