Document:

oxford-instilbioxmezzani

29949910.v4  MEZZANINE LOAN AGREEMENT  Dated as of June 10, 2022  Between  COMPLEX THERAPEUTICS MEZZANINE LLC,  as Borrower  and  OPG HERMES INVESTMENTS (DE) LLC,  as Lender  Property:   18408-18412 Oxnard Street, Los Angeles, California  Loan Amount: $30,000,000  [***] Certain information in this document has been omitted from this exhibit because it is both (i) not material and (ii) is the type that the Registrant treats as private or confidential. 

 

-i- 29949910.v4  TABLE OF CONTENTS  Page  ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION ........................................................... 1  SECTION 1.1. Definitions ............................................................................................................... 1  SECTION 1.2. Principles of Construction ..................................................................................... 37  ARTICLE II GENERAL TERMS .............................................................................................................. 38  SECTION 2.1. The Loan ............................................................................................................... 38  SECTION 2.2. Interest Rate .......................................................................................................... 52  SECTION 2.3. Extension Option ................................................................................................... 60  SECTION 2.4. Loan Payment ....................................................................................................... 62  SECTION 2.5. Prepayments .......................................................................................................... 63  SECTION 2.6. Release on Payment in Full ................................................................................... 63  ARTICLE III CASH MANAGEMENT; RESERVE ACCOUNTS ........................................................... 64  SECTION 3.1. Cash Management ................................................................................................. 64  SECTION 3.2. Required Deposits ................................................................................................. 64  SECTION 3.3. Adjustments to Reserve Accounts ........................................................................ 66  SECTION 3.4. Disbursements from the Reserve Accounts .......................................................... 66  SECTION 3.5. Accounts Generally ............................................................................................... 67  SECTION 3.6. Distributions from Mortgage Borrower ................................................................ 68  SECTION 3.7. Waiver of Required Deposits; Transfer of Reserve Funds Under Mortgage Loan;  Grant of Lien .................................................................................................................................. 68  SECTION 3.8. Intentionally Omitted ............................................................................................ 68  ARTICLE IV REPRESENTATIONS AND WARRANTIES .................................................................... 69  SECTION 4.1. Borrower Representations ..................................................................................... 69  SECTION 4.2. Survival of Representations .................................................................................. 82  ARTICLE V BORROWER COVENANTS ............................................................................................... 82  SECTION 5.1. Covenants .............................................................................................................. 82  ARTICLE VI INSURANCE; CASUALTY AND CONDEMNATION .................................................. 107  SECTION 6.1. Insurance ............................................................................................................. 107  SECTION 6.2. Casualty ............................................................................................................... 108  SECTION 6.3. Condemnation ..................................................................................................... 108  SECTION 6.4. Restoration .......................................................................................................... 109  ARTICLE VII EVENTS OF DEFAULT; REMEDIES............................................................................ 109  SECTION 7.1. Events of Default ................................................................................................ 109  SECTION 7.2. Remedies ............................................................................................................. 111  ARTICLE VIII LIMITATION ON RECOURSE ..................................................................................... 114  SECTION 8.1. Exculpation ......................................................................................................... 114  SECTION 8.2. Recourse for Losses ............................................................................................ 115  SECTION 8.3. Full Recourse ...................................................................................................... 117  ARTICLE IX SECONDARY MARKET TRANSACTIONS; SERVICING........................................... 119  SECTION 9.1. Secondary Market Transactions .......................................................................... 119  

 

   -ii-  29949910.v4  SECTION 9.2. Borrower Cooperation ......................................................................................... 119  SECTION 9.3. Disclosure Indemnification ................................................................................. 121  SECTION 9.4. Costs and Expenses ............................................................................................. 121  ARTICLE X MISCELLANEOUS............................................................................................................ 121  SECTION 10.1. Survival ............................................................................................................. 121  SECTION 10.2. Lender’s Discretion ........................................................................................... 122  SECTION 10.3. Governing Law ................................................................................................. 122  SECTION 10.4. Modification, Waiver in Writing ....................................................................... 123  SECTION 10.5. Delay Not a Waiver ........................................................................................... 123  SECTION 10.6. Notices .............................................................................................................. 123  SECTION 10.7. Trial by Jury ...................................................................................................... 124  SECTION 10.8. Headings ............................................................................................................ 124  SECTION 10.9. Severability ....................................................................................................... 125  SECTION 10.10. Preferences ...................................................................................................... 125  SECTION 10.11. Waiver of Notice ............................................................................................. 125  SECTION 10.12. Remedies of Borrower .................................................................................... 125  SECTION 10.13. Expenses; Indemnity ....................................................................................... 125  SECTION 10.14. Schedules Incorporated ................................................................................... 127  SECTION 10.15. Offsets, Counterclaims and Defenses ............................................................. 127  SECTION 10.16. No Joint Venture or Partnership; No Third Party Beneficiaries ..................... 127  SECTION 10.17. Publicity .......................................................................................................... 128  SECTION 10.18. Waiver of Marshalling of Assets ..................................................................... 128  SECTION 10.19. Conflict; Construction of Documents; Reliance ............................................. 128  SECTION 10.20. Brokers and Financial Advisors ...................................................................... 128  SECTION 10.21. Prior Agreements ............................................................................................ 128  SECTION 10.22. Time is of the Essence..................................................................................... 129  SECTION 10.23. Certain Additional Rights of Lender (VCOC) ................................................ 129  SECTION 10.24. Duplicate Originals, Counterparts ................................................................... 129  SECTION 10.25. Prepayment Charges........................................................................................ 129  SECTION 10.26. Registrar .......................................................................................................... 130  SECTION 10.27. Acknowledgement and Consent to Bail-In of EEA Financial Institutions...... 130  SECTION 10.28. Servicer ........................................................................................................... 131  SECTION 10.29. Lead Lender and Co-Lender Provisions ......................................................... 131    

 

   -iii-  29949910.v4  EXHIBITS & SCHEDULES  Exhibit A  - Legal Description of Property  Exhibit B  - Form of Major Trade Contractor Consent  Exhibit C  - Form of Officer’s Certificate  Exhibit D  - Initial Approved Annual Budget  Exhibit E   - Form of Requisition Letter  Exhibit F   - Intentionally Omitted  Exhibit G   -  Intentionally Omitted  Exhibit H   - Intentionally Omitted  Exhibit I  - Intentionally Omitted  Exhibit J   - Intentionally Omitted  Exhibits K-1 to K-4 - Forms of U.S. Tax Compliance Certificate  Exhibit L  - Initial Construction Budget  Exhibit M  - Initial Construction Schedule    Schedule I  - Existing Construction Documents  Schedule II  - Organizational Structure  Schedule III  - List of Material Agreements  Schedule IV  - List of Design Professionals  Schedule V  - Construction Permits  Schedule VI  - List of REAs  Schedule VII  - Exceptions to Physical Condition Representation      

 

  29949910.v4  MEZZANINE LOAN AGREEMENT  THIS MEZZANINE LOAN AGREEMENT, dated as of June 10, 2022 (as amended, restated,  replaced, supplemented or otherwise modified from time to time, this “Agreement”), is made by and  between OPG HERMES INVESTMENTS (DE) LLC, a Delaware limited liability company (together with  its successors and assigns, “Lender”), and COMPLEX THERAPEUTICS MEZZANINE LLC, a Delaware  limited liability company (“Borrower”).  RECITALS  WHEREAS, OPG HERMES INVESTMENTS (DE) LLC, a Delaware limited liability company  (together with its successors and assigns, “Mortgage Lender”) has made a mortgage loan in the maximum  principal sum of up to $55,000,000 (the “Mortgage Loan Amount”) to COMPLEX THERAPEUTICS  LLC, a Delaware limited liability company (“Mortgage Borrower”) pursuant to that certain Loan  Agreement, dated as of the date hereof, by and among Mortgage Lender and Mortgage Borrower (as  amended, restated, replaced, supplemented or otherwise modified from time to time, the “Mortgage Loan  Agreement”). The Mortgage Loan is evidenced by that certain “Note” (as defined in the Mortgage Loan  Agreement) executed by Mortgage Borrower in favor of Mortgage Lender, in the maximum principal  amount of the Mortgage Loan Amount (as the same may be amended, restated, replaced, supplemented or  otherwise modified from time to time, the “Mortgage Note”) and is further evidenced by the documents  defined as the “Loan Documents” in the Mortgage Loan Agreement, and the Mortgage Note is secured by  the Security Instrument;  WHEREAS, Borrower is the legal and beneficial owner of one hundred percent (100%) of all of  the Equity Interests (as defined below) in Mortgage Borrower;  WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from Lender; and  WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with  the terms and conditions of this Agreement and the other Loan Documents (as hereinafter defined).  NOW THEREFORE, in consideration of the making of the Loan by Lender and the covenants,  agreements, representations and warranties set forth in this Agreement, and for other good and valuable  consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby  covenant, agree, represent and warrant as follows:  ARTICLE I    DEFINITIONS; PRINCIPLES OF CONSTRUCTION  SECTION 1.1. Definitions.  For all purposes of this Agreement, except as otherwise expressly  required or unless the context clearly indicates a contrary intent:  “Acceptable Counterparty” means a counterparty to an Interest Rate Cap Agreement, or the  guarantor of such counterparty’s obligations under an Interest Rate Cap Agreement (provided that the form  and substance of such guaranty is acceptable to Lender) that has a long-term unsecured debt rating of not  less than “A” by S&P and “A2” from Moody’s, which rating shall not include a “t” or otherwise reflect a  termination risk.  “Acceptable LLC” has the meaning set forth in the definition of Special Purpose Entity.  

 

   -2-  29949910.v4  “Accounts” means, collectively, the Clearing Account, the Cash Management Account, and each  of the Reserve Accounts.  “Act” has the meaning set forth in the definition of Special Purpose Entity.  “Additional Advance” has the meaning set forth in Section 2.1.3 hereof.  “Advance Date” means, with respect to each Additional Advance, the date on which such  Additional Advance is disbursed to Borrower pursuant to this Agreement.  “Advance Item” means, individually and collectively as the context may require, Approved Project  Expenditures and Interest and Carry Costs.  “Affiliate” means, as to any Person, any other Person that (a) directly or indirectly owns twenty  percent (20%) or more of the Equity Interests in such Person, and/or (b) is in Control of, is Controlled by  or is under common Control with such Person, and/or (c) is a director, partner, officer or employee of such  Person, and/or (d) is the spouse, issue, parent or officer of such Person.  “Affiliated Manager” means any Manager that is an Affiliate of Borrower or Mortgage Borrower.  “Agreement” has the meaning set forth in the introductory paragraph hereto.  “Alternate Rate” means, with respect to each Interest Accrual Period, the per annum rate of  interest of the Alternate Rate Index determined as of the Determination Date immediately preceding the  commencement of such Interest Accrual Period plus the Alternate Rate Spread; provided that in no event  will the Alternate Rate be less than the Minimum Rate.  “Alternate Rate Index” means a floating rate index determined by Lender in its sole but good faith  discretion (a) that is commonly accepted by market participants in commercial real estate loans as an  alternative to Term SOFR and (b) that is publicly recognized by the International Swaps and Derivatives  Association (ISDA) as an alternative to Term SOFR; provided that in no event will the Alternate Rate Index  be less than the Rate Index Floor.  “Alternate Rate Loan” means the Loan at such time as interest thereon accrues at a rate of interest  based upon the Alternate Rate.  “Alternate Rate Spread” means, in connection with any conversion of the Loan from (a) a Term  SOFR Loan to an Alternate Rate Loan, the difference (expressed as the number of basis points) of (i) Term  SOFR as of the Determination Date for which Term SOFR was last applicable to the Loan plus the Spread  minus (ii) the Alternate Rate Index as of such Determination Date, or (b) a Prime Rate Loan to an Alternate  Rate Loan, the difference (expressed as the number of basis points) of (i) the Prime Rate Index as of the  Determination Date for which the Prime Rate Index was last applicable to the Loan plus the Prime Rate  Spread minus (ii) the Alternate Rate Index as of such Determination Date; provided, however, that in either  such case, if such difference is a negative number, then the Alternate Rate Spread shall be zero.  “Applicable Rate Index” means (i) Term SOFR for so long as the Loan is a Term SOFR Rate  Loan, (ii) the Alternate Rate Index for so long as the Loan is an Alternate Rate Loan or (iii) the Prime Rate  Index for so long as the Loan is a Prime Rate Loan.  “Appraisal” means a written statement setting forth an opinion of the market value of the Property  that (i) has been independently and impartially prepared by an appraiser directly engaged by Lender, (ii)  

 

   -3-  29949910.v4  complies with all applicable federal and state laws and regulations dealing with appraisals or valuations of  real property, including the minimum appraisal standards for national banks promulgated by the  Comptroller of the Currency pursuant to Title XI of the Financial Institutions Reform, Recovery, and  Enforcement Act of 1989, as amended (FIRREA), (iii) has been prepared on “as-stabilized” basis, (iv) has  been prepared not more than sixty (60) days prior to the relevant date and (v) has been reviewed as to form  and content and approved by Lender, in its reasonable discretion.  “Approved Accounting Method” means generally accepted accounting principles set forth in the  opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified  Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or  agencies with similar functions of comparable stature and authority within the accounting profession), or  in such other statements by such entity as may be in general use by significant segments of the U.S.  accounting profession, to the extent such principles are applicable to the facts and circumstances on the  date of determination, consistently applied.  “Approved Annual Budget” has the meaning set forth in Section 5.1.1(f)(iv) hereof.  “Approved Bank” means a bank or other financial institution that has a minimum long term  unsecured debt rating of at least “A” by S&P or “A2” by Moody’s.  “Approved Extraordinary Expenses” has the meaning set forth in Section 3.1.(b) hereof.  “Approved Project Expenditures” means all Costs (other than Interest and Carry Costs) incurred  by Borrower with respect to the Project (a) in accordance with the Construction Budget or the applicable  Approved Annual Budget, as applicable, or (b) as may otherwise be reasonably approved by Lender from  time to time.  “Architect” means Ewing Cole, Inc., the architect engaged by (or on behalf of) Mortgage Borrower  with respect to the design and construction of the Project, together with any successor or additional architect  engaged by (or on behalf of) Mortgage Borrower in accordance with Section 5.1.3(k).  “Architect Agreement” means that certain AIA Document B101-Standard Form of Agreement  Between Owner and Architect, dated February 25, 2021 and any other agreements for architectural services  which Mortgage Borrower may enter into with any Architect in accordance with Section 5.1.3(k), as the  same may be amended, restated, replaced, supplemented or otherwise modified from time to time in  accordance with the terms and conditions of this Agreement.  “Architect Consent” means any consents and agreements required pursuant to the terms of this  Agreement to be executed and delivered by an Architect to Lender with respect to any Architect Agreements  entered into by and between Mortgage Borrower and any Architect, which, in each case, shall be, in form  and substance reasonably acceptable to Lender, as the same may be amended, restated, replaced,  supplemented or otherwise modified from time to time in accordance with the terms and conditions of this  Agreement.  “As-Stabilized Loan-to-Value Ratio” means as of the date of its calculation, the ratio of (a) the  sum of (x) the Outstanding Principal Balance as of the date of such calculation, and (y) the Mortgage Loan  Outstanding Principal Balance as of the date of such calculation, to (b) the “as-stabilized” value of the  Property, as determined by an Appraisal ordered by Lender.   “Assignment of Interest Rate Cap Agreement” has the meaning set forth in Section 2.2.7(a)  hereof.  

 

   -4-  29949910.v4  “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable  EEA Resolution Authority in respect of any liability of an EEA Financial Institution.  “Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55  of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the  implementing law for such EEA Member Country from time to time which is described in the EU Bail-In  Legislation Schedule.  “Bankruptcy Action” means with respect to any Person (a) such Person filing a voluntary petition  under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (b) the filing of an  involuntary petition against such Person under the Bankruptcy Code or any other Federal or state  bankruptcy or insolvency law; (c) such Person filing an answer consenting to or otherwise acquiescing in  or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or  any other Federal or state bankruptcy or insolvency law; or soliciting or causing to be solicited petitioning  creditors for any involuntary petition from any Person; (d) the appointment of a custodian, receiver, trustee,  or examiner for such Person or any portion of the Property or the Collateral; (e) such Person making an  assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or  inability to pay its debts as they become due, or (f) such Person commencing (or have commenced against  it) a proceeding for the dissolution or liquidation of it.  “Bankruptcy Code” means 11 U.S.C. § 101 et seq., as the same may be amended from time to  time.  “Bond” means a payment bond and a performance bond (i) in the form of AIA Document A312,  or in such other form as may be reasonably acceptable to Lender, (ii) with dual obligee riders that name  Lender as a co-obligee with Mortgage Borrower, and (iii) issued by a surety reasonably satisfactory to  Lender.  “Borrower” has the meaning set forth in the introductory paragraph hereto, together with its  successors and permitted assigns.  “Borrower Party” means, individually and collectively, (i) Borrower, SPE Component Entity (if  any), Guarantor, Mortgage Borrower, Mortgage Borrower SPE Component Entity (if any), Master Tenant,  and any Affiliated Manager, (ii) any Affiliate of any of the foregoing, and (iii) any officers, directors,  employees, or agents of any of the foregoing.  “Building A” has the meaning set forth in the Master Lease.  “Building B” has the meaning set forth in the Master Lease.  “Business Day” means any day other than a Saturday, Sunday or any other day on which national  banks in New York, New York, are not open for business.  “Carry Costs Guaranty” means that certain Mezzanine Carry Costs Guaranty, dated as of the  Closing Date, from Guarantor to and for the benefit of Lender, as the same may be amended, restated,  replaced, supplemented or otherwise modified from time to time.  “Cash Expenses” means, for any period, the operating expenses for the operation of the Property  as set forth in the Construction Budget or the then-effective Approved Annual Budget or, to the extent an  annual budget has not been approved by Lender in accordance with the terms of this Agreement, to the  extent that such expenses are actually incurred by Borrower (excluding (i) any deposits into the Tax Reserve  

 

   -5-  29949910.v4  Account and the Insurance Reserve Account that are being applied by Lender for payment of Taxes and  Insurance Premiums, as applicable, in accordance with the terms of this Agreement, (ii) any expenses which  Master Tenant reimburses Borrower for pursuant to the Master Lease, and (iii) any expenses that Master  Tenant pays in accordance with the express terms of the Master Lease, provided, that, in the case of the  immediately preceding clause (iii), there is no event of default by Master Tenant under the Master Lease.  “Cash Management Account” means the deposit account established pursuant to the Cash  Management Agreement, to the extent the same is required pursuant to this Agreement.  “Cash Management Agreement” means an agreement in form and substance acceptable to Lender  to be entered into by and among Cash Management Bank, Borrower and Lender, to the extent the same is  required under this Agreement, as the same may be amended, restated, replaced, supplemented or otherwise  modified from time to time.  “Cash Management Bank” means such bank or banks selected by Lender to maintain the Cash  Management Account (or any Reserve Accounts to the extent they are not subaccounts of the Cash  Management Account), in each case, to the extent the same is required pursuant to this Agreement.  “Cash Management Event” means the existence of any of the following: (a) the Closing Date; (b)  an Event of Default; (c) any Bankruptcy Action with respect to Borrower, Mortgage Borrower, Master  Tenant, Guarantor, or any Affiliated Manager; or (d) the determination by Lender at any time that the Debt  Yield is not at least eight and one-half percent (8.5%) (provided, that in the event of a failure of Borrower  to deliver the information and documentation required under Section 5.1.1(f) by the required delivery date  hereunder, at Lender’s option the Debt Yield will be presumed to be less than the levels required above  unless and until such information and documentation are provided to Lender and demonstrate otherwise).  “Cash Management Period” means the period commencing upon the occurrence of a Cash  Management Event and terminating upon the occurrence of a Cash Management Termination Event with  respect to all then existing Cash Management Events.  “Cash Management Termination Event” means the occurrence of any of the following:  (a) in  the event the related Cash Management Event occurred as a result of an Event of Default, such Event of  Default shall no longer exists (without implying that Borrower has a right to cure an Event of Default), no  other Default or Event of Default then exists, and Lender shall not have otherwise accelerated the Loan,  moved for a receiver, commenced foreclosure proceedings, or otherwise begun exercising remedies; (b) (i)  in the event that the related Cash Management Event occurred as a result of a Bankruptcy Action relating  to Borrower, Mortgage Borrower, Master Tenant or Guarantor, as applicable, such Bankruptcy Action no  longer exists and there has been no Material Adverse Effect as a result thereof, and (ii) in the event that the  related Cash Management Event occurred as a result of a Bankruptcy Action relating to any Affiliated  Manager, the replacement of such Affiliated Manager in accordance with the terms and conditions of this  Agreement, and (c) with respect to the Cash Management Event described in clause (a) or (d) of the  definition thereof, (i) Substantial Completion shall have occurred and (ii) Lender has determined that the  Debt Yield is at least eight and one-half percent (8.5%) for two (2) consecutive calendar quarters.  “Casualty” has the meaning set forth in Section 6.2 hereof.  “Cause” means, with respect to an Independent Director or Independent Manager, (a) acts or  omissions by such Person that constitute fraud, bad faith, gross negligence or willful disregard of such  Person’s duties under the applicable agreements, (b) that such Person has engaged in or has been charged  with, or has been convicted of, fraud or other acts constituting a felony under any law applicable to such  Person, (c) that such Independent Director or Independent Manager is unable to perform his or her duties  

 

   -6-  29949910.v4  as an Independent Director or Independent Manager due to death, disability, or incapacity, or (d) that such  Independent Director or Independent Manager no longer meets the definition of “Independent Director” or  “Independent Manager”.  “Change in Law” means the occurrence, after the date of this Agreement, of any of the following:   (a) the adoption or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule,  regulation or treaty or in the administration, interpretation, implementation or application thereof by any  Governmental Authority; or (c) the making or issuance of any request, rule, guideline or directive (whether  or not having the force of law) by any Governmental Authority; provided that notwithstanding anything  herein to the contrary, (i) all requests, rules, guidelines or directives thereunder or issued in connection with  the Dodd-Frank Wall Street Reform and Consumer Protection Act or any amendments thereto after the  Closing Date, and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International  Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the  United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be  deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.  “Change Order” means any amendment, supplement or other modification from and after the  Closing Date in any respect to (i) the Plans and Specifications, (ii) the Construction Schedule, (iii) the  Construction Budget or (iv) any Construction Contract.  “Clearing Account” means the deposit account established pursuant to the Clearing Account  Agreement, to the extent the same is required pursuant to the terms of this Agreement.  “Clearing Account Agreement” means an agreement entered into among Clearing Bank,  Borrower, Manager (if any) and Lender in form and substance acceptable to Lender, to the extent the same  is required pursuant to the terms of this Agreement, as the same may be amended, restated, replaced,  supplemented or otherwise modified from time to time.  “Clearing Bank” means a bank or banks selected by Borrower and approved in writing by Lender  in Lender’s sole discretion, in each case, to the extent the same is required under the terms of this  Agreement.  “Closing Certificate” means that certain Closing Certificate executed by Borrower as of the  Closing Date.  “Closing Date” means the date of this Agreement.  “Closing Date Minimum Equity Requirement” means the direct and indirect owners in Borrower  and Mortgage Borrower, in the aggregate, have invested at least $50,059,031 of cash equity in the Property  (including the acquisition cost thereof) as determined by Lender.  “Closing Date Term SOFR” means 1.19944%.   “Code” means the Internal Revenue Code of 1986, as amended, as it may be further amended from  time to time, and any successor statutes thereto, and applicable U.S. Department of Treasury regulations  issued pursuant thereto in temporary or final form.  “Collateral” has the meaning set forth in the Pledge Agreement.  “Co-Lender Agreement” has the meaning set forth in Section 10.29(b) hereof.  

 

   -7-  29949910.v4  “Combined Advance” means, as of any date, (a) the Additional Advance being made or to be  made by Lender pursuant to this Agreement, plus (b) the Mortgage Loan Additional Advance being made  or to be made by Mortgage Lender pursuant to the Mortgage Loan Agreement.  “Commercially Reasonable Efforts” means, with respect to Borrower, Mortgager Borrower or  Guarantor, as applicable, the continuous and diligent use of all commercially reasonable efforts in good  faith taking into account the interests of Lender, including, if commercially reasonable, the commencement  and prosecution of litigation or other enforcement of Borrower’s, Mortgager Borrower’s and/or Guarantor’s  rights under applicable agreements, at law or in equity. The use of commercially reasonable efforts shall  require Borrower, Mortgager Borrower and Guarantor to disregard the interests of its Affiliates.  Borrower’s, Mortgager Borrower’s or Guarantor’s lack of funds to pay for usual and customary reasonable  legal and other costs and expenses related to Borrower’s, Mortgager Borrower’s or Guarantor’s efforts to  perform shall not excuse Borrower, Mortgager Borrower or Guarantor from fully pursuing such efforts.  “Complete” means, with respect to the Approved Project Expenditures, that (i) Substantial  Completion has occurred, (ii) all Punchlist Items have been completed, (iii) the Property is free of all  mechanics’, materialmen’s, and other similar Liens (or such liens have otherwise been bonded over to  Lender’s reasonable satisfaction), (iv) Master Tenant has commenced paying full unabated rent with respect  to the entire Property, including without limitation “Building A” and “Building B” (as each such term is  defined in the Master Lease), (v) Lender has received evidence acceptable to Lender that all Legal  Requirements and all private restrictions and covenants relating to the Property have been complied with  or satisfied and that all necessary approvals from Governmental Authorities with respect to the  Improvements have been obtained, (vi) Lender has received copies of all warranties from suppliers covering  materials, equipment and appliances included within the applicable component of the work, and (vii) the  conditions set forth in Section 2.1.19 have been satisfied to the satisfaction of Lender. The terms  “Completed” and “Completion” shall have the same meaning when used in the Loan Documents.  “Completion Due Date” means December 1, 2023.  “Completion Guaranty” means that certain Mezzanine Completion Guaranty Agreement, dated  as of the Closing Date, from Guarantor to and for the benefit of Lender, as the same may be amended,  restated, replaced, supplemented or otherwise modified from time to time.  “Condemnation” means a temporary or permanent taking by any Governmental Authority as the  result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or  any part of the Property, or any interest therein or right accruing thereto, including any right of access  thereto or any change of grade affecting the Property or any part thereof.  “Conforming Changes” means, with respect to either the use or administration of Term SOFR or  the use, administration, adoption or implementation of any Alternate Rate Index or the Prime Rate Index,  any technical, administrative or operational changes (including, without limitation, changes to the  definitions of “Business Day”, “Determination Date”, “Interest Accrual Period”, “Payment Date” “U.S.  Government Securities Business Day”, preceding and succeeding business day conventions, rounding of  amounts, timing and frequency of determining rates and making payments of interest, the applicability and  length of lookback periods, and other technical, administrative or operational matters) that Lender decides  in good faith, from time to time, may be appropriate to reflect the adoption and implementation of any such  rate or to permit the use and administration thereof by Lender in a manner substantially consistent with  market practice for floating rate loans held on Lender’s balance sheet and secured by U.S. commercial real  estate assets  (or, if Lender decides that adoption of any portion of such market practice is not  administratively feasible or if Lender determines that no market practice for the administration of any such  

 

   -8-  29949910.v4  rate exists, in such other manner of administration as Lender decides is reasonably necessary in connection  with the administration of this Agreement and the other Loan Documents).  “Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by  net income (however denominated) or that are franchise Taxes or branch profits Taxes.  “Contractual Obligation” means, as to any Person, any provision of any security issued by such  Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or  any of its property is bound (other than the organizational documents of such Person).  “Construction Budget” means the construction and development budget prepared by, or on behalf  of, Mortgage Borrower for the construction and development of the Project, as the same may be adjusted  due to changes or reallocations made in accordance with Section 2.1.7 and Section 5.1.3(c) hereof, and  which, (A) shall contain Line Items with respect to the Approved Project Expenditures and setting forth (i)  the Line Items for all direct and indirect Costs estimated to be incurred in connection with the Completion  of the Approved Project Expenditures (including the Contingency with respect to the Approved Project  Expenditures), and (ii) whether each such Line Item constitutes a Hard Cost or a Soft Cost, (B) shall contain  a Line Item with respect to the estimated Interest and Carry Costs and setting forth the Line Items for all  direct and indirect Costs estimated to be incurred in connection with the payment in full of the Interest and  Carry Costs and (C) in any event (i) sets forth Borrower’s estimates for budgeted construction categories  of all items of direct and indirect Costs to be incurred or payable with respect to the foregoing (including  monthly interest on the Loan) and (ii) specifies each direct and indirect Cost that is to be funded from  proceeds of each of the Loan, as the same may be amended, restated, replaced, supplemented or otherwise  modified in accordance with the terms of this Agreement. The initial Construction Budget is attached hereto  as Exhibit L.  “Construction Consultant” means CBRE, Inc., or such other Person as may be designated and  engaged by Lender in its sole discretion from to time as construction consultant to advise, consult and  render reports to Lender concerning the status of the development and construction of the Project.  “Construction Contract” means the Architect Agreement, the General Contractor Agreement,  each Major Trade Contract, any other Trade Contract  to which Borrower, Mortgage Borrower, General  Contractor  or an Affiliate of Borrower or Mortgage Borrower is a party, and each agreement to which a  Design Professional is party, in each case, as the same may be amended, restated, replaced, supplemented  or otherwise modified from time to time to time in accordance with the terms and conditions of this  Agreement.  “Construction Documents” means, collectively, all Construction Contracts, the Plans and  Specifications, the Construction Budget, the Construction Permits and all Change Orders, as the same may  be amended, replaced, supplemented or otherwise modified from time to time in accordance with the terms  and conditions of this Agreement.  “Construction Drawings” means the drawings, calculations and final specifications acceptable for  permitting, bidding and construction of the Required Improvements.  “Construction Permits” means, collectively, all authorizations, consents and approvals, licenses  and permits given or issued by Governmental Authorities which are required, from time to time, for the  development and construction of the Project substantially in accordance with all Legal Requirements and  the Plans and Specifications, as the same may be amended, replaced, supplemented, assigned or otherwise  modified from time to time in accordance with the terms of this Agreement and applicable Legal  Requirements.  

 

   -9-  29949910.v4  “Construction Schedule” means a schedule for the projected progress of the development and  construction of the Project, setting forth a construction progress schedule reflecting, among other things,  the anticipated dates of completion, which shall include a trade-by-trade breakdown of the estimated periods  of commencement and completion of the specific work to be completed in connection with the completion  of the Project substantially in accordance with the Plans and Specifications and Legal Requirements, as the  same may be amended, restated, replaced, supplemented, updated or otherwise modified from time to time  in accordance with the terms of this Agreement. The initial Construction Schedule is attached hereto as  Exhibit M.  “Contingency” means the contingency line item set forth in the Construction Budget, initially in  the amount of $3,106,237 and available for Costs, pursuant to this Agreement, subject to compliance at all  times with the Lien Law.  “Contractor” means any contractor, subcontractor, sub-subcontractor, supplier or provider of  labor, materials, equipment and/or services in connection with the construction of the Project or any Design  Professional.  “Control” means the possession, directly or indirectly, of the power to direct or cause the direction  of management, policies or activities of a Person, whether through ownership of voting securities, by  contract or otherwise.  “Controlled” and “Controlling” shall have correlative meanings.  “Cost Saving” has the meaning set forth in Section 2.1.11(d) hereof.  “Costs” means, collectively, all costs and expenses of constructing the Project (or, with respect to  Reimbursable Costs, all costs and expenses of construction of the Project prior to the Closing Date, not to  exceed $18,236,032) and operating the Property (including, without limitation, all Approved Project  Expenditures and Interest and Carry Costs) through the Maturity Date whether or not set forth in the  Construction Budget or the Approved Annual Budget.  “Debt” means the Outstanding Principal Balance, together with all interest accrued and unpaid  thereon, and all other sums (including the Prepayment Premium) due from Borrower under the Loan  Documents to which it is a party.  “Debt Service” means, with respect to any particular period of time, scheduled principal and/or  interest payments due under this Agreement.  “Debt Yield” means, as of any date of determination, the amount (expressed as a percentage)  determined by dividing the UNOI by the sum of (a) the Outstanding Principal Balance and (b) the Mortgage  Loan Outstanding Principal Balance.  “Default” means the occurrence of any event hereunder or under any other Loan Document which,  but for the giving of notice or passage of time, or both, would be an Event of Default.  “Default Rate” means a rate per annum equal to the lesser of (a) the Maximum Legal Rate and  (b) five percent (5%) above the Interest Rate.  “Deficiency” means, as of any date of determination, the amount by which the sum of (i) such  portion of the Loan and the Mortgage Loan (so long as Mortgage Lender is not in default of its obligations  to fund Mortgage Loan Additional Advances thereunder), in each case, as remains to be advanced as of  such date in respect of Approved Project Expenditures (but only to the extent such unadvanced amounts  are permitted (or would be permitted, upon satisfaction of applicable conditions precedent) pursuant to the  

 

   -10-  29949910.v4  Loan Documents to be applied to the applicable Costs and excluding undisbursed amounts in the  Construction Budget for Interest and Carry Costs and other sums to be advanced to pay non-construction  costs such as marketing costs), plus (ii) amounts that are guaranteed pursuant to the Equity Funding  Guaranty (provided that no claim is then being pursued by Lender in respect of any of the Guarantees and  Guarantor is not then in default or in breach of any of its obligations in respect of any of the Guarantees)  with respect to Approved Project Expenditures, plus (iii) any unused Deficiency Collateral as of such date,  is less than the actual sum, as estimated by Lender or Construction Consultant in its good faith judgment,  which will be required to Complete the Project substantially in accordance with the Plans and Specifications  (taking into account all Landlord Requested Changes and all Tenant Requested Changes (each such term  as defined in the Master Lease), in each case, approved in accordance with the Master Lease and the Loan  Documents, and as the Plans and Specifications may otherwise be amended as provided herein), in  substantial accordance with the then current Construction Schedule (as the same may be amended as  provided herein), and all Legal Requirements and this Agreement, and to pay all unpaid Costs in connection  therewith, in each case, exclusive of any Interest and Carry Costs and other sums to be advanced to pay  non-construction costs such as marketing expenses.  Such estimate shall be binding and conclusive,  provided that it is made in good faith and absent manifest error.  “Deficiency Account” has the meaning set forth in the Mortgage Loan Agreement  “Deficiency Collateral” has the meaning set forth in Section 2.1.12(b) hereof.  “Design Drawings” means the drawings and outline specifications that illustrate and describe the  refinement of the design of the Required Improvements, establishing the scope, relationships, forms, size,  materials, systems and appearance of the Required Improvements by means of plans, sections and  elevations, typical construction details and equipment layouts.  “Design Professionals” means, collectively, all architects, engineers, consultants, and similar  professionals retained by or on behalf of Borrower or Mortgage Borrower or their respective Affiliates in  connection with the design of the Project (including the Architect), all of which shall be licensed  professionals in the State (if so required by the Legal Requirements) and shall be subject to approval by  Lender prior to such engagement in connection with the Project, not to be unreasonably withheld,  conditioned or delayed.  Lender has approved the Design Professions listed on Schedule IV.  “Determination Date” means, with respect to any determination of the Applicable Rate Index  applicable to an Interest Accrual Period, the date that is two (2) U.S. Government Securities Business Days  preceding the first day of the applicable Interest Accrual Period.  “Downgraded Counterparty” means a counterparty to an Interest Rate Cap Agreement, or the  guarantor of such counterparty’s obligations under an Interest Rate Cap Agreement that has a long-term  unsecured debt rating of “A-“ or lower by S&P and “A3” or lower from Moody’s.  “Draw Request” has the meaning set forth in Section 2.1.5(a) hereof.  “EEA Financial Institution” means (a) any credit institution or investment firm established in any  EEA Member Country which is subject to the supervision of an EEA Resolution Authority; (b) any entity  established in an EEA Member Country which is a parent of an institution described in clause (a) of this  definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of  an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with  its parent.  

 

   -11-  29949910.v4  “EEA Member Country” means any of the member states of the European Union, Iceland,  Liechtenstein, and Norway.  “EEA Resolution Authority” means any public administrative authority or any person entrusted  with public administrative authority of any EEA Member Country (including any delegee) having  responsibility for the resolution of any EEA Financial Institution.  “Eligible Account” means a separate and identifiable account from all other funds held by the  holding institution that is either (a) an account or accounts maintained with a federal or state-chartered  depository institution or trust company which complies with the definition of Eligible Institution or (b) a  segregated trust account or accounts maintained with a federal or state chartered depository institution or  trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution  or trust company, is subject to regulations substantially similar to 12 C.F.R. § 9.10(b), having in either case  a combined capital and surplus of at least $50,000,000.00 and is subject to supervision or examination by  federal and state authority.  An Eligible Account will not be evidenced by a certificate of deposit, passbook  or other instrument.  “Eligible Institution” means a depository institution or trust company insured by the Federal  Deposit Insurance Corporation the short term unsecured debt obligations or commercial paper of which are  rated at least “A-1” by S&P, “P-1” by Moody’s, and “F-1+” by Fitch in the case of accounts in which funds  are held for thirty (30) days or less or, in the case of letters of credit or accounts in which funds are held for  more than thirty (30) days, the long term unsecured debt obligations of which are rated at least “A” by Fitch  and S&P and “A2” by Moody’s.  “Embargoed Person” means any Person (a) that is subject to trade restrictions under United States  law, including 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 under  any such United States laws, with the result that transacting business with such Person (whether directly or  indirectly) is or would be prohibited by law; (b) that is listed in the annex to, or who is otherwise subject to  the provisions of, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and  relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to  Commit, or Support Terrorism (as amended or supplemented, the “Executive Order”) or any other  Prescribed Laws; (c) that is owned or Controlled by, or acting for or on behalf of, any person or entity that  is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order or any other  Prescribed Laws; (d) with whom a Person is prohibited from dealing or otherwise engaging in any  transaction by any terrorism or money laundering law, including the Executive Order and any other  Prescribed Laws; (e) who commits, threatens or conspires to commit or supports “terrorism” as defined in  the Executive Order or any other Prescribed Laws; (f) 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 or at any replacement website or other replacement official publication  of such list; (g) that is named on any other list of terrorists, terrorist organizations or narcotics traffickers  maintained pursuant to any of the Rules and Regulations of OFAC, or on any similar lists maintained by  the United States Department of State, the United States Department of Commerce or any other  Governmental Authority or pursuant to any Executive Order of the President of the United States of  America; (h) that has been previously indicted for or convicted of any felony involving a crime or crimes  of moral turpitude or for any violation of Prescribed Laws, or is currently under investigation by any  Governmental Authority for alleged criminal activity; or (i) who is an Affiliate of a Person listed in clauses  (a) through (h) above.  “Engineer” means each engineer with respect to the Project on the date hereof, together with any  successor or additional engineers engaged by (or on behalf of) Borrower or Mortgage Borrower or their  

 

   -12-  29949910.v4  respective Affiliate to perform any structural, mechanical, electrical and/or soil engineering services with  respect to all or any portion of the Project.  “Engineer Agreement” means each agreement for engineering services which Borrower or  Mortgage Borrower has entered into or may enter into with any Engineer in accordance with Section  5.1.3(k), as the same may be amended, replaced, supplemented or otherwise modified from time to time in  accordance with the terms hereof.  “Engineer Consent” means any consents and agreements required pursuant to the terms of this  Agreement to be executed and delivered by an Engineer to Lender with respect to any Engineer Agreements  entered into by and between Mortgage Borrower and any Engineer, which, in each case, shall be, in form  and substance reasonably acceptable to Lender, as the same may be amended, restated, replaced,  supplemented or otherwise modified from time to time in accordance with the terms and conditions of this  Agreement.  “Environmental Indemnity” means that certain Mezzanine Environmental Indemnity Agreement,  dated as of the Closing Date, executed by Borrower and Guarantor in connection with the Loan for the  benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified  from time to time.  “Environmental Report” means that certain Phase I Environmental Site Assessment Report, dated  as of May 6, 2022, prepared by Partner Engineering and Science, Inc., as Project No. 22-366205.1.  “Equity Collateral Enforcement Action” has the meaning set forth in Section 8.2(xxii) hereof.  “Equity Funding Guaranty” means that certain Mezzanine Guaranty of Equity Obligations, dated  as of the Closing Date, from Guarantor to and for the benefit of Lender, as the same may be amended,  restated, replaced, supplemented or otherwise modified from time to time.  “Equity Interests” means (a) partnership interests (general or limited) in a partnership; (b)  membership interests in a limited liability company; (c) shares or stock interests in a corporation, and (d)  the beneficial ownership interests in a trust.  “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.  “Estimated Interest and Carry Available Amount” has the meaning set forth in Section 2.1.9(d)  hereof.  “Estimated Interest and Carry Costs” has the meaning set forth in Section 2.1.9(d) hereof.  “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the  Loan Market Association (or any successor person), as in effect from time to time.  “Event of Default” has the meaning set forth in Section 7.1 hereof.  “Exchange Act” means the Securities and Exchange Act of 1934, as amended.  “Excluded Taxes” means any of the following Taxes imposed on or with respect to a Lender or  required to be withheld or deducted from a payment to a Lender:  (a) Taxes imposed on or measured by net  income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a  result of such Lender being organized under the laws of, or having its principal office or, in the case of any  

 

   -13-  29949910.v4  Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political  subdivision thereof), or (ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. federal  withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an  applicable interest in a Loan or commitment pursuant to a law in effect on the date on which (i) such Lender  acquires such interest in the Loan or commitment, or (ii) such Lender changes its lending office, except in  each case to the extent that, pursuant to Section 2.2.3(a), amounts with respect to such Taxes were payable  either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender  immediately before it changed its lending office; (c) Taxes attributable to such Lender’s failure to comply  with Section 2.2.3(b); and (d) any  withholding Taxes imposed under FATCA.  “Excusable Delay” means any delay or number of delays due to conditions beyond the reasonable  control of Borrower or Mortgage Borrower and/or their respective Affiliates (in each case, so long as  Borrower continuously and diligently uses (and cause Mortgage Borrower to continuously and diligently  use) all Commercially Reasonable Efforts to mitigate the effect thereof), including, without limitation,  strikes, stays, judgments, orders, decrees, labor disputes, governmental restrictions, acts of God, the  elements, enemy action, civil commotion, fire, casualty, accidents, shortages of, or inability to obtain, labor,  utilities or material, actual or threatened health emergency (including, without limitation, epidemic,  pandemic (including, for the avoidance of doubt, the ongoing COVID-19 pandemic), famine, disease,  plague, quarantine, and other health risk); provided, however, that (i) any lack of funds in and of itself shall  not be deemed to be a condition beyond the reasonable control of Borrower or Mortgage Borrower and (ii)  any failure by any contractor or sub-contractor to perform its obligations under any contractor or sub- contractor agreement in and of itself shall not be deemed to be a condition beyond the reasonable control  of Borrower and Mortgage Borrower (unless due to the bankruptcy or insolvency of such contractor or sub- contractor); provided that in no event shall Excusable Delay exceed sixty (60) consecutive calendar days  or ninety (90) days in the aggregate.  “Executive Order” has the meaning set forth in the definition of “Embargoed Person”.  “Existing Construction Documents” means, collectively, the Construction Documents in effect  as of the Closing Date, as more particularly described on Schedule I hereto.  “Extension Option” has the meaning set forth in Section 2.3.1 hereof.  “Extension Shortfall” has the meaning set forth in Section 2.3.1(k) hereof.  “Extension Term” has the meaning set forth in Section 2.3.1 hereof.  “Extraordinary Expenses” has the meaning set forth in Section 5.1.1(f)(iv).  “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or  any amended or successor version that is substantively comparable and not materially more onerous to  comply with), any current or future regulations or official interpretations thereof, any agreements entered  into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices  adopted  pursuant to any intergovernmental agreement, treaty or convention among Governmental  Authorities and implementing such Sections of the Code.  “Financial Covenant Requirements” means, collectively, the Guarantor Net Worth and Liquid  Assets (each such term as defined in the Recourse Guaranty) requirements set forth in the Recourse  Guaranty.  “Fitch” means Fitch, Inc.  

 

   -14-  29949910.v4  “Foreign Lender” means (a) if Borrower is a U.S. Person, a Lender that is not a U.S. Person, and  (b) if Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction  other than that in which Borrower is resident for tax purposes.  “General Contractor” means (i) Turner Construction Company or (ii) any other bondable general  contractor or construction manager, as the case may be, licensed in the State, engaged by Borrower or  Mortgage Borrower or its Affiliate with respect to the construction of the Project and approved by Lender,  such approval not to be unreasonably withheld, conditioned or delayed, and for which Lender has received  a general contractor in the form of the General Contractor Agreement Consent.  “General Contractor Agreement” means (i) that certain AIA Document A133-Standard Form  Agreement Between Owner and Construction Manager as Constructor, dated as of October 26, 2020,  between Mortgage Borrower and General Contractor, as amended by those two (2) certain Guaranteed  Maximum Price Amendments, dated as of December 17, 2020, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of December 31, 2020, as further amended by that  certain Guaranteed Maximum Price Amendment, dated as of January 27, 2021, by those two (2) certain  Guaranteed Maximum Price Amendment, dated March 5, 2021, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of March 30, 2021, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of April 20, 2021, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of April 26, 2021, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of May 13, 2021, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of May 21, 2021, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of May 27, 2021, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of June 20, 2021, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of July 23, 2021, as further amended by that certain  Guaranteed Maximum Price Amendment, dated as of August 25, 2021, and as further amended by that  certain Guaranteed Maximum Price Amendment, dated as of September 15, 2021, (b) any other  documentation executed by and between Mortgage Borrower and General Contractor evidencing or relating  to the guaranteed maximum price thereunder and (c) any guaranty of General Contractor’s obligations  under the General Contractor Agreement provided by any Person, and (ii) any general contractor or other  agreement which may be entered into by (or on behalf of) Mortgage Borrower or its Affiliate with any  successor or additional or other General Contractor subject to the requirements of Section 5.1.3(k), as each  of the foregoing in (i) and (ii) may be amended, restated, replaced, supplemented or otherwise modified  from time to time in accordance with the terms and conditions of this Agreement.  “General Contractor Agreement Consent” means that certain Mezzanine Consent of General  Contractor and Subordination of Fees, dated as of the Closing Date, executed and delivered by Borrower  and General Contractor to Lender, as the same may be amended, replaced, supplemented or otherwise  modified from time to time in accordance with the terms thereof.  “Governmental Authority” means any court, board, agency, bureau, department, commission,  office or other authority of any nature whatsoever for any governmental unit (federal, state, county, district,  municipal, city or otherwise), whether now or hereafter in existence.  “Guarantor” means Instil Sponsor, together with its successors and permitted assigns.  “Guarantees” means, collectively, the Recourse Guaranty, the Carry Cost Guaranty, the  Completion Guaranty and the Equity Funding Guaranty, each dated as of the Closing Date, from Guarantor  to and for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise  modified from time to time.  

 

   -15-  29949910.v4  “Hard Costs” means, collectively, all costs and expenses constituting Costs of the Project set forth  in the Construction Budget which are denominated in the Construction Budget as “Hard Costs”.  “HVCRE” means any loan classified as a Highly Volatile Commercial Real Estate Loan by the  Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority)  including the rules, guidelines and directives promulgated pursuant to Basel III.  “Improvements” has the meaning set forth in the granting clause of the Security Instrument.  “In Balance” has the meaning set forth in Section 2.1.11(a) hereof.  “Increased Costs” has the meaning set forth in Section 2.2.5(a) hereof.  “Indebtedness” means for any Person, on a particular date, the sum (without duplication) at such  date of (a) all indebtedness or liability of such Person (including amounts for borrowed money and  indebtedness in the form of mezzanine debt and preferred equity); (b) obligations of such Person that are  evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations of such Person for the  deferred purchase price of property or services (including trade obligations for which such Person is liable);  (d) obligations of such Person under letters of credit; (e) obligations of such Person under acceptance  facilities; (f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of  business) and other contingent obligations to purchase, to provide funds for payment, to supply funds, to  invest in any Person or entity, or otherwise to assure a creditor against loss; (g) obligations secured by any  liens granted by such Person, whether or not the obligations have been assumed or are those of any other  Person, and (h) without duplication of the foregoing, any contingent obligations of such Person (determined  in accordance with the Approved Accounting Method).  “Indemnified Party” has the meaning set forth in Section 10.13(b) hereof.  “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to  any payment made by or on account of any obligation of Borrower under any Loan Document, and (b) to  the extent not otherwise described in clause (a), Other Taxes.  “Independent” means, when used with respect to any Person, a Person that: (a) does not have any  direct financial interest or any material indirect financial interest in Borrower or in any Affiliate of  Borrower; (b) is not connected with Borrower or any Affiliate of Borrower as an officer, employee,  promoter, underwriter, trustee, partner, member, manager, creditor, director, supplier, customer, or person  performing similar functions; and (c) is not a member of the immediate family of a Person defined in  clause (a) or (b) above.  “Independent Accountant” means a “Big Four” accounting firm or another accounting firm of  nationally recognized, certified public accountants which is Independent and which is selected by Borrower  and reasonably acceptable to Lender.  “Independent Director” or “Independent Manager” means, of any Special Purpose Entity, or if  such Special Purpose Entity is a limited partnership, the general partner of such Special Purpose Entity, an  individual who has prior experience as an independent director, independent manager or independent  member with at least three years of employment experience and who is provided by CT Corporation,  Corporation Service Company, National Registered Agents, Inc. (or its affiliate NRAI Entity Services,  LLC), Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if  none of those companies is then providing professional Independent Directors or Independent Managers,  another nationally-recognized company reasonably approved by Lender, in each case that is not an Affiliate  

 

   -16-  29949910.v4  of the Borrower Parties and that provides professional Independent Directors and Independent Managers  and other corporate services in the ordinary course of its business, and which individual is duly appointed  as an Independent Manager or Independent Director, or as a member of the board of directors or board of  managers of such corporation or limited liability company, as applicable, and for the five-year period prior  to his or her appointment as an Independent Director has not been and during the continuation of his or her  serving as an Independent Director will not be, any of the following:  (a) a member (other than a Special Member), manager, director, trustee, officer,  employee, attorney, or counsel of any of the Borrower Parties or their Affiliates (provided that such person  may be an Independent Director or Independent Manager of Borrower as long as they are not a member,  manager, director, trustee, officer, employee, attorney, or counsel of any other Borrower Party or Affiliate  of a Borrower Party, except that a Person who otherwise satisfies the definition of Independent Director  or  Independent Manager other than this subparagraph (a) by reason of being the independent director or  independent manager of a “special purpose entity” that is an Affiliate of Borrower shall not be disqualified  from serving as an Independent Director  or Independent Manager of Borrower if such Person is either (i)  a professional Independent Director or Independent Manager or (ii) the fees that such individual earns from  serving as independent director or independent manager of Affiliates of Borrower in any given year  constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year);  (b) a creditor, customer, supplier, service provider (including provider of professional  services) or other Person who derives any of its purchases or revenues from its activities with any Borrower  Party or any Affiliate of a Borrower Party (other than an Independent Manager or Independent Director  provided by a nationally-recognized company that routinely provides professional Independent Directors  or Independent Managers and other corporate services to any Borrower Party or any Affiliate of a Borrower  Party in the ordinary course of business);  (c) a direct or indirect legal or beneficial owner in any Borrower Party or any Affiliate  of a Borrower Party;  (d) a member of the immediate family of any member, manager, employee, attorney,  customer, supplier or other Person referred to above; and  (e) a Person Controlling or under the common Control of anyone listed in  subparagraphs (a) through (d) above.  “Initial Advance” has the meaning set forth in Section 2.1.2 hereof.  “Initial Maturity Date” means the Payment Date in July 9, 2025.  “Initial Payment Date” means the Payment Date occurring in July, 2022.  “Instil Sponsor” means Instil Bio, Inc., a Delaware corporation.  “Insurance Reserve Account” has the meaning set forth in Section 3.2.2(a) hereof.  “Insurance Premiums” has the meaning set forth in Section 6.1(b) hereof.  “Interest Accrual Period” means, (i) with respect to the Initial Payment Date, the period  commencing on the Closing Date up to but not including the Initial Payment Date, and (ii) with respect to  any other Payment Date, the period commencing on and including the ninth (9th) day of the preceding  

 

   -17-  29949910.v4  calendar month and ending on and including the eighth (8th) day of the calendar month in which such  Payment Date occurs.  “Interest and Carry Costs” means all amounts required to be deposited or paid (as applicable)  pursuant to Section 3.1(b)(i) through (ix) of the Mortgage Loan Agreement (including, without limitation,  all fees, costs and expenses payable to Lender under the Loan Documents or Mortgage Lender under the  Mortgage Loan Documents).  “Interest and Carry Costs Advance Amount” means an amount equal to $217,866.  “Interest and Carry Cost Line Item” means the Line Item or Line Items set forth in the  Construction Budget in an amount equal to $1,210,369 and available for Interest and Carry Costs pursuant  to this Agreement and the Mortgage Loan Agreement.  “Interest and Carry Cost Shortfall” has the meaning set forth in Section 2.1.9(d) hereof.  “Interest Rate” means, for any Interest Accrual Period, (i) the Term SOFR Rate for so long as the  Loan is a Term SOFR Rate Loan, (ii) the Alternate Rate for so long as the Loan is an Alternate Rate Loan  or (iii) the Prime Rate for so long as the Loan is a Prime Rate Loan.  “Interest Rate Cap Agreement” has the meaning set forth in Section 2.2.7(a); provided, that, after  delivery of a Replacement Interest Rate Cap Agreement or a Substitute Interest Rate Cap Agreement to  Lender, the term “Interest Rate Cap Agreement” shall be deemed to include such Replacement Interest Rate  Cap Agreement or Substitute Interest Rate Cap Agreement and such Replacement Interest Rate Cap  Agreement or Substitute Interest Rate Cap Agreement shall be subject to all requirements applicable to the  Interest Rate Cap Agreement.  “Late Payment Charge” has the meaning set forth in Section 2.4.2 hereof.  “Lead Lender” has the meaning set forth in Section 10.29(a) hereof.  “Lease” means the Master Lease any other lease, sublease or sub-sublease, letting, license,  concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to  which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any  space in the Property, and (a) every modification, amendment or other agreement relating to such lease,  sublease, sub-sublease, or other agreement entered into in connection with such lease, sublease, sub- sublease, or other agreement and (b) every guarantee of the performance and observance of the covenants,  conditions and agreements to be performed and observed by the other party thereto.  “Legal Requirements” means all federal, state, county, municipal and other governmental statutes,  laws, rules, orders, regulations, ordinances, building codes, land laws, judgments, decrees and injunctions  of Governmental Authorities affecting the Loan, any Secondary Market Transaction with respect to the  Loan, Borrower, Mortgage Borrower, Master Tenant, Guarantor, the Collateral and/or the Property or any  part thereof, or the construction, use, alteration or operation thereof, or any part thereof, whether now or  hereafter enacted and in force, including the Securities Act, the Exchange Act, Regulation AB, and  regulations promulgated pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (or  any statute replacing or amending the same), the Americans with Disabilities Act of 1990, as amended, and  all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements,  restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any  time in force affecting Borrower, Mortgage Borrower, Master Tenant, Guarantor, the Collateral or any part  

 

   -18-  29949910.v4  thereof, or the Property or any part thereof, including any which may (a) require repairs, modifications or  alterations in or to the Property or any part thereof, or (b) in any way limit the use and enjoyment thereof.  “Lender” has the meaning set forth in the introductory paragraph hereto, together with its  successors and assigns (including the holder of each Note).  “Letter of Credit” means an irrevocable, unconditional, freely transferable (without cost to  Lender), clean sight draft letter of credit, as the same may be replaced, split, substituted, modified, amended,  supplemented, assigned or otherwise restated from time to time, which (a) names a Person other than  Borrower as the account party, (b) either does not expire sooner than, or can be renewed for successive one  (1) year periods ending not sooner than, thirty (30) days after the Maturity Date (or such earlier date as is  thirty (30) days after such Letter of Credit is no longer required pursuant to the terms of this Agreement),  (c) entitles Lender to draw thereon in New York City based solely on a statement purportedly executed by  an officer of Lender stating that it has the right to draw thereon, (d) is issued by a domestic Approved Bank  or the U.S. agency or branch of a foreign Approved Bank, or if there are no domestic Approved Banks or  U.S. agencies or branches of a foreign Approved Bank then issuing letters of credit, then such letter of  credit may be issued by a domestic bank, the long term unsecured debt rating of which is the highest such  rating then given by the Rating Agency or Rating Agencies, as applicable, to a domestic commercial bank,  in any event having an office in New York City where presentation may be made by Lender, and (e) is  otherwise in form and substance acceptable to Lender.  If at any time the bank issuing any such Letter of  Credit shall cease to be an Approved Bank, or if Borrower fails to cause such Letter of Credit to be renewed  or replaced no later than thirty (30) days prior to any annual expiration thereof, Lender shall have the right  immediately to draw down the same in full (or in part) and hold the proceeds of such draw as collateral for  the Loan in a Reserve Account.  “Lien” means any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation,  easement, restrictive covenant, preference, assignment, security interest, or any other encumbrance, charge  or transfer of, or any agreement to enter into or create any of the foregoing, on or affecting Borrower,  Mortgage Borrower, the Property or any portion thereof or any interest therein, the Collateral or any portion  thereof or any interest therein, or any direct or indirect interest in Borrower, Mortgage Borrower, SPE  Component Entity or Mortgage Borrower SPE Component Entity, including any conditional sale or other  title retention agreement, any financing lease having substantially the same economic effect as any of the  foregoing, the filing of any financing statement, and mechanic’s, materialman’s and other similar liens and  encumbrances.  “Lien Law” means the lien law of the State as in effect from time to time, with respect to  mechanic’s liens and lien priority.  “Line Item” means a line item of cost or expense set forth in the Construction Budget, as the same  may be adjusted in compliance with Section 2.1.11 or Section 5.1.3(c).  “Liquidation Event” means the occurrence of any of the following (without implying that the any  of the following are permitted hereunder other than as expressly provided here):  (i) any Casualty to the  Property or any material portion thereof, (ii) any Condemnation of the Property or any material portion  thereof, (iii) a Transfer of the Property in connection with realization thereon following an Event of Default  under the Mortgage Loan, including without limitation a foreclosure sale, (iv) any refinancing of the  Property or the Mortgage Loan or (v) the receipt by Mortgage Borrower of any excess proceeds realized  under its Owner’s Title Policy after application of such proceeds by Mortgage Borrower to cure any title  defect.   

 

   -19-  29949910.v4  “Loan” means the loan in the maximum principal amount of the Loan Amount made by Lender to  Borrower pursuant to this Agreement.  “Loan Amount” means the sum of $30,000,000.  “Loan Documents” means, collectively, this Agreement, the Note, the Pledge Agreement, the  Guarantees, the Environmental Indemnity, the Manager Consent, the General Contractor Agreement  Consent, each Architect Consent, each Engineer Consent, each Major Trade Contractor Consent, the Cash  Management Agreement, the Clearing Account Agreement, any Assignment of Interest Rate Cap  Agreement, the Closing Certificate, the Master Lease Recognition Agreement and all other certificates,  documents, agreements or instruments now or hereafter executed and/or delivered in connection with the  Loan (as each may be amended, modified, extended, consolidated or supplemented from time to time).  “Loss” or “Losses” means, with respect to any Person, all liabilities, obligations, losses, damages,  fines, penalties, actions, proceedings, judgments, suits, claims, debts, costs, expenses, charges, fees, awards,  amounts paid in settlement, demands, and disbursements of any kind or nature whatsoever (including  reasonable attorneys’ fees) of or suffered or incurred by such Person in connection with or relating to the  Loan, the Property, the Collateral, or any other collateral for the Loan (but not including (a) special,  speculative, exemplary, or punitive damages, or (b) consequential damages in the nature of alleged “lost  profits” or “lost opportunities”, in each case with respect to the foregoing clauses (a) and (b) except to the  extent that a party seeking indemnification of such amount has paid or is required to pay such measure of  damages other than as a result of (and to the extent of) its own gross negligence, willful misconduct or  fraud).  “Major Milestones” means the fulfillment of the following milestones for the Project as  determined by Lender in its sole but good faith discretion: (i) Substantial Completion shall have occurred  no later than the Substantial Completion Due Date; and (ii) Completion shall have occurred no later than  the Completion Due Date.  “Major Trade Contract” means, (a) each of those certain agreements, dated as of August 1, 2020  and November 1, 2020, between Mortgage Borrower and Project Manager, or (b) each Trade Contract, (i)  if such Trade Contract has been executed prior to the Closing Date, under which there are Costs remaining  to complete after the Closing Date equal to or in excess of $1,000,000, and (ii) if such Trade Contract is  executed from and after the Closing Date, that has a contract or purchase price, as the case may be, whether  initially or thereafter by virtue of any Change Order or Change Orders, equal to or in excess of $1,000,000;  provided that, for purposes of this definition, multiple Trade Contracts with a single Trade Contractor, or  an Affiliate thereof, as the case may be, shall be deemed to be one Trade Contract.  “Major Trade Contractor” means any Trade Contractor under a Major Trade Contract.  “Major Trade Contractor Consent” means each consent and agreement required pursuant to the  terms of this Agreement to be executed and delivered by a Major Trade Contractor to Lender in substantially  the form attached hereto as Exhibit B with respect to any Major Trade Contracts entered into by and between  Mortgage Borrower and any Major Trade Contractor, which, in each case, shall be, in form and substance  reasonably acceptable to Lender and the applicable Major Trade Contractor, as the same may be amended,  restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms and  conditions of this Agreement.  “Management Agreement” means any property management agreement entered into in  accordance with the terms of this Agreement between Borrower or Mortgage Borrower and a Qualified  

 

   -20-  29949910.v4  Manager that is reasonably acceptable to Lender, as the same may be amended, modified and/or  supplemented from time to time in accordance with the terms hereof.  “Manager” means a Qualified Manager that enters into a Management Agreement and delivers to  Lender a Manager Consent, in each case, in accordance with the terms and provisions of this Agreement.  “Manager Consent” means any Mezzanine Consent of Manager and Subordination of  Management Fees, entered into among Lender, Borrower, Mortgage Borrower and Manager in accordance  with the terms of this Agreement, as the same may be amended, restated, replaced, supplemented or  otherwise modified from time to time.  “Master Lease” means that certain Instil Bio Life Science Campus Lease, dated as of the Closing  Date, between Mortgage Borrower, as landlord, and Master Tenant, as tenant, as the same may be amended,  modified and/or supplemented from time to time in accordance with the terms hereof.  “Master Lease Payment Outside Date” has the meaning set forth in Section 4.1.2(l)(i).  “Master Lease Payments” means all Rent (as defined in the Master Lease) paid by Master Tenant  pursuant to the Master Lease.  “Master Lease Recognition Agreement” means that certain Mezzanine Recognition Agreement,  dated as of the Closing Date, among Lender, Borrower, Mortgage Borrower and Master Tenant, with  respect to the Master Lease, as the same may be amended, modified and/or supplemented from time to time  in accordance with the terms hereof.  “Master Tenant” means Instil Sponsor.  “Material Adverse Effect” means a material adverse effect on (a) the Property or the Collateral  or, in each case, the value or use thereof, (b) the business, profits, management, operations or condition  (financial or otherwise) of Borrower, SPE Component Entity, Mortgage Borrower, Mortgage Borrower  SPE Component Entity, Master Tenant, and Guarantor, taken as a whole, the Collateral or the Property, (c)  the enforceability, validity, perfection or priority of the lien of the Pledge Agreement or the other Loan  Documents, or (d) the ability of any Borrower Party to perform its obligations under the Loan Documents  to which it is a party; provided, however, that current financial and market conditions engendered by the   SARS-CoV-2 global pandemic shall not be given effect in determining whether a Material Adverse Effect  has occurred with respect to a Borrower Party unless such conditions result in a material adverse effect  specific to the business, condition (financial or otherwise), the Property, the Collateral, or operations of  Borrower, Mortgage Borrower, Guarantor and their respective Affiliates, taken as a whole, after the Closing  Date.  “Material Agreements” means each contract and agreement relating to the ownership,  management, development, use, operation, leasing, maintenance, repair or improvement of the Property,  other than the Management Agreement, the Construction Documents, the Master Lease and the other  Leases, as to which either (i) there is an obligation of Borrower to pay more than $100,000 per annum; or  (ii) the term thereof extends beyond one (1) year (unless cancelable on thirty (30) days or less notice without  requiring the payment of termination fees or payments).  “Maturity Date” means the Initial Maturity Date or, if applicable, the applicable date to which the  Initial Maturity Date has been extended pursuant to Section 2.3 hereof, or such other date on which the final  payment of the Debt becomes due and payable as herein provided, whether at the stated maturity date, by  declaration of acceleration, or otherwise.  

 

   -21-  29949910.v4  “Maximum Legal Rate” means the maximum nonusurious interest rate, if any, that at any time or  from time to time may be contracted for, taken, reserved, charged or received on the Loan and as provided  for herein or the other Loan Documents, under the laws of the state or states whose laws are held by any  court of competent jurisdiction to govern the interest rate provisions of the Loan.  “Mezzanine Funding Share” means 35.29%.  “Milestone Non-Compliance Event” means that any Major Milestone has not been timely  satisfied as provided in the definition of “Major Milestones”.  “Minimum Rate” means the Rate Index Floor plus the Spread.  “Monthly Debt Service Payment Amount” means, as of any Payment Date, all accrued and  unpaid interest that has accrued on the Outstanding Principal Balance at the Interest Rate for the Interest  Accrual Period in effect as of the day immediately preceding such Payment Date.  “Moody’s” means Moody’s Investors Service, Inc.  “Mortgage Borrower” has the meaning set forth in the Recitals hereto.  “Mortgage Borrower SPE Component Entity” means the SPE Component Entity (as defined in  the Mortgage Loan Agreement).  “Mortgage Debt” means the Debt (as defined under the Mortgage Loan Agreement).  “Mortgage Deficiency Provisions” has the meaning set forth in Section 2.1.12(f).  “Mortgage Funding Share” means 64.71%.  “Mortgage Lender” has the meaning set forth in the Recitals hereto.  “Mortgage Loan” means that certain loan in the original principal amount of $55,000,000 made  of even date herewith by Mortgage Lender to Mortgage Borrower.  “Mortgage Loan Accounts” means the “Accounts” as defined in the Mortgage Loan Agreement.  “Mortgage Loan Agreement” has the meaning set forth in the Recitals hereto.  “Mortgage Loan Additional Advance” means “Additional Advance” as defined in the Mortgage  Loan Agreement.  “Mortgage Loan Amount” has the meaning set forth in the Recitals hereto.  “Mortgage Loan Cash Management Account” means the “Cash Management Account” under  and as defined in the Mortgage Loan Agreement.  “Mortgage Loan Cash Management Bank” means the “Cash Management Bank” under and as  defined in the Mortgage Loan Agreement.  “Mortgage Loan Clearing Bank” means the “Clearing Bank” under and as defined in the  Mortgage Loan Agreement.  

 

   -22-  29949910.v4   “Mortgage Loan Debt” means the “Debt” under and as defined in the Mortgage Loan Agreement.  “Mortgage Loan Debt Service” means, with respect to any particular period of time, scheduled  principal and/or interest payments due under the Mortgage Loan Agreement.  “Mortgage Loan Deficiency Account” has means the “Deficiency Account” under and as defined  in the Mortgage Loan Agreement.  “Mortgage Loan Documents” means all documents evidencing and/or securing the Mortgage  Loan and all documents executed and/or delivered in connection therewith, as the same may be amended,  modified and/or supplemented from time to time.  “Mortgage Loan Event of Default” means an “Event of Default” as defined in the Mortgage Loan  Agreement.  “Mortgage Loan Excess Cash Flow Reserve Account” means the “Excess Cash Flow Reserve  Account” as defined in the Mortgage Loan Agreement.  “Mortgage Loan Note” has the meaning set forth in the Recitals hereto.  “Mortgage Loan Outstanding Principal Balance” means, as of any date, the outstanding  principal balance of the Mortgage Loan.  “Mortgage Loan Reserve Funds” means the “Reserve Funds” under and as defined in the  Mortgage Loan Agreement.  “Mortgage Loan Shortfall Account” means the “Shortfall Account” under and as defined in the  Mortgage Loan Agreement.  “Mortgage Shortfall Provisions” has the meaning set forth in Section 2.1.9(e).   “Net Liquidation Proceeds” shall mean, with respect to any Liquidation Event, all amounts paid  to or received by or on behalf of Mortgage Borrower in connection with such Liquidation Event, including,  without limitation, proceeds of any sale, refinancing or other disposition or liquidation, less (i) Lender’s  and/or Mortgage Lender’s reasonable costs incurred in connection with the recovery thereof, (ii) the costs  incurred by Mortgage Borrower in connection with a restoration of the Property made in accordance with  the Mortgage Loan Documents, (iii) amounts required or permitted to be deducted therefrom and amounts  paid pursuant to the Mortgage Loan Documents to Mortgage Lender, (iv) in the case of a foreclosure sale,  disposition or Transfer of the Property in connection with realization thereon following an Event of Default  under the Mortgage Loan, such reasonable and customary costs and expenses of sale or other disposition  (including attorneys’ fees and brokerage commissions), (v) in the case of a foreclosure sale, such costs and  expenses incurred by Mortgage Lender under the Mortgage Loan Documents as Mortgage Lender shall be  entitled to receive reimbursement for under the terms of the Mortgage Loan Documents, (vi) in the case of  a refinancing of the Mortgage Loan, such costs and expenses (including attorneys’ fees) of such refinancing  as shall be reasonably approved by Lender and (vii) the amount of any prepayments, yield maintenance  charges and/or prepayment premiums required pursuant to the Mortgage Loan Documents and/or the Loan  Documents in connection with any such Liquidation Event.  “Net Operating Income” has the meaning set forth in the Mortgage Loan Agreement.  “Net Proceeds” has the meaning set forth in the Mortgage Loan Agreement.  

 

   -23-  29949910.v4  “Net Proceeds Threshold” means the sum of One Million and No/100 Dollars ($1,000,000).  “Non-Lienable Work” means work conducted at, or for the benefit of, the Property, with respect  to which work, no Person shall have the right under applicable Legal Requirements to file or record a Lien  against the Property in respect of any non-payment of amounts due and owing to such Person.  “Note” means one or more loan promissory note(s) made by Borrower in favor of a Lender, as the  same may be amended, restated, replaced, supplemented, extended or otherwise modified from time to  time.  “Obligations” means, collectively, Borrower’s obligations for the payment of the Debt and the  performance of the all obligations of Borrower contained in the Loan Documents.  “OFAC” has the meaning set forth in the definition of “Prescribed Laws”.  “Officer’s Certificate” means a certificate delivered to Lender by Borrower that is signed by an  authorized senior officer of Borrower or of the entity that Controls Borrower, as applicable, in the form  attached hereto as Exhibit C.  “Off-Site Materials” has the meaning assigned to such term in the definition of Stored Materials.  “Operating Expenses” has the meaning set forth in the Mortgage Loan Agreement.  “Operating Income” has the meaning set forth in the Mortgage Loan Agreement.  “Operating Permits” means, collectively, all authorizations, consents and approvals given by and  licenses and permits issued by Governmental Authorities which are required for the ownership, use and  occupancy of the Property in accordance with all Legal Requirements (other than Construction Permits)  and for the performance and observance of all obligations and agreements of Borrower contained herein or  in the other Loan Documents that relate to the ownership, use and occupancy of the Property, including the  ownership, use and occupancy of the Project following Completion of the same.  “Other Charges” means all ground rents, assessments, maintenance charges, impositions other  than Property Taxes, and any other charges, including vault charges and license fees for the use of vaults,  chutes and similar areas adjoining the Property, now or hereafter levied or assessed or imposed against the  Property or any part thereof.  “Other Connection Taxes” means, with respect to any Lender, Taxes imposed as a result of a  present or former connection between such Lender and the jurisdiction imposing such Tax (other than  connections arising from such Lender having executed, delivered, become a party to, performed its  obligations under, received payments under, received or perfected a security interest under, engaged in any  other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan  or Loan Document).  “Other Taxes” means all present or future stamp, court or documentary, intangible, recording,  filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance,  enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with  respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with  respect to an assignment.  

 

   -24-  29949910.v4  “Outstanding Principal Balance” means, as of any date, the outstanding principal balance of the  Loan.  “Owner’s Title Policy” means an owner’s title insurance policy, issued or co-insured by the Title  Company, on ALTA form 2006 and otherwise in form and substance satisfactory to Lender.   “Oxford Acquisition” means the acquisition of the Property by any Oxford Entity (excluding any  acquisition of the Property by any Person in connection with the exercise by Lender of any of its rights  and/or remedies under this Agreement or the other Loan Documents) during the period commencing on the  Closing Date and ending on the date that is twelve (12) months following the Closing Date.  “Oxford Entity” means Oxford Properties Group or any Affiliate (pursuant to clause (b) of the  definition thereof) of Oxford Properties Group.  “Payment Date” means the ninth (9th) day of each calendar month during the term of the Loan or,  if such day is not a Business Day, the immediately preceding Business Day.  “Permitted Encumbrances” means, (a) with respect to the Property, collectively (i) the Liens and  security interests created by the Mortgage Loan Documents, (ii) all Liens, encumbrances and other matters  disclosed in the Title Insurance Policy or Survey, (iii) Liens, if any, for Taxes or Other Charges imposed  by any Governmental Authority not yet due or delinquent or which are being contested by Borrower or  Mortgage Borrower in accordance with the terms and conditions of this Agreement, (iv) such other title and  survey exceptions as Lender has approved or may approve in writing in Lender’s reasonable discretion, (v)  inchoate mechanics’ and materialmens’ liens, (vi) actual mechanics’ and materialmens’ liens provided same  are discharged or bonded within thirty (30) days of the filing thereof (but in any case prior to the date on  which any foreclosure or other realization thereon is scheduled to occur if sooner than such 30-day period)  or which are otherwise being contested by Borrower or Mortgage Borrower in accordance with the terms  and conditions of this Agreement, (vii) the Master Lease, (viii) Liens arising in connection with Permitted  Equipment Leases, (ix) other than the Master Lease, the Leases entered into prior to the Closing Date or  after the Closing Date in accordance with the terms and conditions of this Agreement, and (x) immaterial  Transfers and grants of easements, restrictions, covenants, reservations and rights of way in the ordinary  course of business, which, in each case, are (A) permitted by the terms of Section 5.1.1(d)(iii) and (B)  entered into in full compliance with the terms of Section 5.1.1(d)(iii), and (xi) Liens (1) of the Mortgage  Loan Clearing Bank and Mortgage Loan Cash Management Bank arising under Section 4-210 of the UCC  on items in the course of collection and (2) in favor of Clearing Bank and Cash Management Bank arising  as a matter of law encumbering deposits (including the right of set-off) arising in the ordinary course of  business in connection with the maintenance of such accounts, and (b) with respect to the Collateral, the  Liens of the Loan Documents.  “Permitted Equipment Leases” means equipment leases or other similar instruments entered into  with respect to equipment and/or Personal Property provided, that, in each case, such equipment leases or  similar instruments (i) are entered into on commercially reasonable terms and conditions in the ordinary  course of Borrower’s business, (ii) relate to equipment and/or Personal Property which is (A) used in  connection with the operation and maintenance of the Property in the ordinary course of Borrower’s  business and (B) readily replaceable without material interference or interruption to the operation of the  Property, and (iii) have annual payments not exceeding $100,000 in the aggregate.  “Permitted Indebtedness” means (a) in the case of Mortgage Borrower, (i) the Mortgage Debt,  and (ii) unsecured trade and operational debt incurred in the ordinary course of business relating to the  ownership and operation of the Property and the routine administration of Mortgage Borrower, in amounts  not to exceed 2% of the sum of the Loan Amount and the Mortgage Loan Amount, which liabilities are not  

 

   -25-  29949910.v4  payable more than sixty (60) days past the date incurred, are paid when due and are not evidenced by a  note, (iii) intentionally omitted, and (iv) Taxes imposed by any Governmental Authority not yet delinquent  or which are being contested in accordance with the terms and conditions of this Agreement, and (b) in the  case of Borrower, unsecured trade and operational debt incurred in the ordinary course of business relating  to the ownership of its Equity Interest in Mortgage Borrower, in amounts not to exceed $25,000, which  liabilities are not paid more than sixty (60) days past the date incurred, are not evidenced by a note, and are  paid when due.  “Permitted Transfers” has the meaning set forth in Section 5.1.1(d) hereof.  “Person” means any individual, corporation, partnership, joint venture, limited liability company,  estate, trust, unincorporated association, any Governmental Authority, and any fiduciary acting in such  capacity on behalf of any of the foregoing.  “Personal Property” has the meaning set forth in the granting clause of the Security Instrument.  “Plans and Specifications” means the plans and specifications for the construction of the Project  approved by Lender as of the Closing Date and any other plans and specifications for the construction of  the Project prepared or to be prepared by (or on behalf of) Borrower after the Closing Date, including any  other architectural, structural, foundation and elevator plans and specifications prepared by Architect and  any other mechanical, electrical, plumbing and fire protection plans and specifications prepared by any  Person retained or to be retained by Borrower, Architect or General Contractor as approved in writing by  Lender and Construction Consultant, to the extent such approval is required by the terms of this Agreement,  in each case, as the same may be amended by Change Orders applicable thereto, provided that such Change  Orders have been approved to the extent required pursuant to Section 5.1.3(g), in each case as the same  may be amended, replaced, supplemented or otherwise modified from time to time in accordance with the  terms of this Agreement.  “Pledge Agreement” means that certain Mezzanine Pledge and Security Agreement, dated as of  the Closing Date, by Borrower in favor of Lender, as the same may be amended, restated, replaced,  supplemented or otherwise modified in accordance with the provisions thereof.  “PLL Policy” has the meaning set forth in Section 6.1(a)(ix) hereof.  “Policy” and “Policies” has the meaning set forth in Section 6.1(b) hereof.  “Prepaid Revenues” has the meaning set forth in Section 3.1(b) hereof.  “Prepayment Date” has the meaning set forth in Section 2.5.1 hereof.  “Prepayment Premium” means, with respect to the principal amount of the Loan being prepaid  on or prior to the applicable Prepayment Premium End Date, other than in connection with Oxford  Acquisition, a payment to Lender in an amount equal to the product of (a) the Interest Rate as of the date  of the prepayment), (b) the portion of the Loan being repaid, and (c) a fraction, the numerator of which is  the number of days between the date through which interest on the amount being prepaid has been paid in  full and the Prepayment Premium End Date and the denominator of which is 360. Notwithstanding the  foregoing, with respect to any prepayment made after the Prepayment Premium End Date, the amount of  the Prepayment Premium shall be zero.  “Prepayment Premium End Date” means, (a) if the determination of the Prepayment Premium  is being made with respect to a prepayment in connection with a Third Party Sale, June 9, 2023, and (b) if  

 

   -26-  29949910.v4  the determination of the Prepayment Premium is being made in any case other than with respect to a  prepayment in connection with a Third Party Sale, December 9, 2023.  “Prescribed Laws” means, collectively, (a) the Uniting and Strengthening America by Providing  Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (The  USA PATRIOT Act), (b) Executive Order No. 13224 on Terrorist Financing, effective September 24,  2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten  to Commit, or Support Terrorism, (c) the International Emergency Economic Power Act, 50 U.S.C. § 1701  et.  seq., (d) the Racketeer Influenced and Corrupt Organizations Act, (e) all requirements contained in the  rules and regulations of the Office of Foreign Assets Control, Department of the Treasury (“OFAC”), and  (f) all other Legal Requirements relating to money laundering, anti-bribery and corruption or terrorism.  “Prime Rate” means a fluctuating rate per annum equal to the Prime Rate Index plus the Prime  Rate Spread; provided, however in no event shall the Prime Rate be deemed to be less than the Minimum  Rate.  “Prime Rate Index” means the annual rate of interest published in The Wall Street Journal from  time to time as the “Prime Rate.” If The Wall Street Journal ceases to publish the “Prime Rate,” Lender  shall select an equivalent publication that publishes such “Prime Rate,” and if such “Prime Rates” are no  longer generally published or are limited, regulated or administered by a governmental or quasi- governmental body, then Lender shall select a comparable interest rate index. Notwithstanding the  foregoing, in no event shall Prime Rate Index be less than the Rate Index Floor.  “Prime Rate Loan” means the Loan at such time as interest thereon accrues at a rate of interest  based upon the Prime Rate.  “Prime Rate Spread” means, in connection with the conversion of the Loan from a Term SOFR  Loan to a Prime Rate Loan, the difference (expressed as the number of basis points) of  (a) Term SOFR as  of the Determination Date for which Term SOFR was last applicable to the Loan plus the Spread minus (b)  the Prime Rate as of such Determination Date; provided, however,  that if such difference is a negative  number, the Prime Rate Spread shall be zero.  “Project” means the construction, development, Completion and payment in full of all work  relating to the Required Improvements as more specifically set forth herein and in accordance with the  Plans and Specifications, all Legal Requirements and all other applicable requirements of the Loan  Documents.  “Project Advance Amount” means an amount equal to $11,393,102.  “Project Manager” means Savills, Inc.  “Property” means each parcel of real property described on Exhibit A attached hereto, the  Improvements thereon and all Personal Property owned by Mortgage Borrower and encumbered by the  Security Instrument, together with all rights pertaining to such property and Improvements, as more  particularly described in the granting clause of the Security Instrument and referred to therein as the  “Property”.  “Property Taxes” means all real estate and personal property taxes, assessments, water rates or  sewer rents (excluding income taxes), now or hereafter levied or assessed or imposed against the Property  or part thereof, together with all interest and penalties thereon.  

 

   -27-  29949910.v4  “Punchlist Items” means, individually and/or collectively, as the context may require, minor or  insubstantial details of construction, decoration, mechanical adjustment or installation the non-completion  of which does not prevent the use, occupancy or operation of the Required Improvements for their intended  purposes and does not result in a violation of any Management Agreement, the Master Lease or any other  Lease.  “Qualified Manager” means, in the judgment of Lender, a reputable and experienced management  organization possessing experience in managing ten (10) or more properties of similar type, quality and  size as the Property and approved by Lender.  “Rate Conversion” means conversion of the Loan to an Alternate Rate Loan or Prime Rate Loan.  “Rate Index Floor” means Closing Date Term SOFR.  “Rating Agencies” means each of S&P, Moody’s, Fitch, DBRS, Inc., Morningstar, Inc., or Kroll  Bond Ratings, or any other nationally recognized statistical rating agency which has been approved by  Lender.  “REA” means, collectively, as the same may be amended, restated, supplemented or otherwise  modified from time to time, any reciprocal easement agreement or similar document affecting the Property  now or hereafter of record, as more particularly described on Schedule VI hereto.  “Recourse Guaranty” means that certain Mezzanine Guaranty Agreement, dated as of the Closing  Date, from Guarantor to and for the benefit of Lender, as the same may be amended, restated, replaced,  supplemented or otherwise modified from time to time.  “Recourse Liabilities” has the meaning set forth in Section 8.2 hereof.  “Reimbursable Costs” has the meaning set forth in Section 2.1.2 hereof.  “Relevant Governmental Body” means the Board of Governors of the Federal Reserve System  and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the  Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York or any  successor thereto.  “Replacement Interest Rate Cap Agreement” has the meaning set forth in Section 2.2.7(b).  “Required Borrower Equity Advance” means, with respect to each Combined Advance, non- borrowed cash equity in an amount equal to forty-nine percent (49%) of the total Costs that are the subject  of such Combined Advance.  “Required Equity/Control Requirements” means, collectively, (i) Guarantor owns 100% of the  direct equity interest in Borrower, (ii) Borrower owns 100% of the direct equity interest in Mortgage  Borrower, and (iii) Guarantor Controls Borrower and Mortgage Borrower.  “Required Improvements” means the construction on the Land (as defined in the Security  Instrument), in accordance with the Plans and Specifications, the Master Lease and all applicable Legal  Requirements, of Building B, consisting of an approximately 70,930 square foot, two-story lab  manufacturing and warehouse building, including all site improvements, utility work and other  improvements appurtenant thereto.  

 

   -28-  29949910.v4  “Reserve Accounts” means, collectively, the Tax Reserve Account, the Insurance Reserve  Account, the Unfunded Loan Proceeds Account, the Deficiency Account, the Shortfall Account and any  other reserve or escrow account established under the Loan Documents from time to time.  “Reserve Funds” means, collectively, any and all funds held in any Reserve Account from time to  time.  “Reserve Item” means, individually and collectively as the context may require, (i) Insurance  Premiums and/or (ii) Taxes and Other Charges.  “Restoration” means the repair and restoration of the Property after a Casualty or Condemnation  as nearly as possible to the condition the Property was in immediately prior to such Casualty or  Condemnation (subject to changes in zoning codes, building codes, or other applicable laws), with such  alterations as may be reasonably approved by Lender.  “Restricted Party” means, collectively, Borrower, any SPE Component Entity, Mortgage  Borrower, any Mortgage Borrower SPE Component Entity, any Affiliated Manager and Guarantor.  “Retainage” means the total amount actually held back by Mortgage Borrower or General  Contractor, as the case may be, from each Trade Contractor with respect to the value of its work in place  with respect to the Project, equal to ten percent (10%) (unless a greater retainage amount is provided for in  any applicable Construction Contract) of the value of such Trade Contractor’s work incurred by Mortgage  Borrower with respect to such Trade Contractor for work in place as of the date of the Draw Request in  question, as verified from time to time by Construction Consultant pursuant to the provisions of this  Agreement, provided that (i) from and after such time as such Trade Contract has achieved 50% Completion  (as shown on an Architect’s certificate, in form and substance reasonably satisfactory to Lender, submitted  with a Draw Request), the portion of each subsequent Draw Request applicable to such Trade Contract to  be held back by Mortgage Borrower as “Retainage” for the General Contractor Agreement shall be reduced  to five percent (5%) (unless a greater retainage percentage is provided for in any applicable Construction  Contract) and (ii) all “Retainage” is disbursed only in accordance with the provisions of Section 2.1.15.  “Revenues” has the meaning set forth in the Mortgage Loan Agreement.  “Shortfall Account” has the meaning set forth in Section 2.1.9(d) hereof.  “Soft Costs” means, collectively, all costs and expenses set forth in the Construction Budget which  are denominated as “Soft Costs”.  “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC  company  “Secondary Market Transaction” has the meaning set forth in Section 9.1 hereof.  “Securities Act” means the Securities Act of 1933, as amended.  “Security Instrument” has the meaning set forth in the Mortgage Loan Agreement.  “Servicer” has the meaning set forth in Section 10.28 hereof.  “SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR  Administrator and as published on the SOFR Administrator’s Website.  

 

   -29-  29949910.v4  “SOFR Administrator” means the Federal Reserve Bank of New York (or a successor  administrator of the secured overnight financing rate).  “SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York,  currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate  identified as such by the SOFR Administrator from time to time.  “SPE Component Entity” means:  (i) if Borrower is a limited partnership, the Special Purpose  Entity that is the general partner of Borrower; or (ii) if Borrower is a limited liability company other than  an Acceptable LLC, the Special Purpose Entity that is the managing member of Borrower; provided,  however, if Borrower is an Acceptable LLC or a corporation, the term “SPE Component Entity” shall  have no meaning when used in this Agreement.  “Special Member” has the meaning set forth in the definition of “Special Purpose Entity”.  “Special Purpose Entity” means a Person, other than an individual, which, since the date of its  formation and at all times prior to, on and after the date thereof, has complied with and shall at all times  comply with the following requirements:  (a) was, is and will be formed solely for the purpose of (i) in the case of Mortgage  Borrower, acquiring, developing, owning, holding, selling, leasing, transferring, exchanging, financing,  managing and operating the Property, and transacting lawful business that is incident, necessary and  appropriate to accomplish the foregoing, (ii) in the case of Borrower, acquiring, owning, holding, selling,  transferring, exchanging and financing the Collateral, and transacting lawful business that is incident,  necessary and appropriate to accomplish the foregoing  or (iii) in the case of any applicable SPE Component  Entity, acting as the general partner or managing member (as applicable) of Borrower;  (b) has not been, is not, and will not be engaged in any business unrelated to (i) in the  case of Mortgage Borrower, acquiring, developing, owning, holding, selling, leasing, transferring,  exchanging, financing, managing and operating the Property, and transacting lawful business that is  incident, necessary and appropriate to accomplish the foregoing, (ii) in the case of Borrower, acquiring,  owning, holding, selling, transferring, exchanging and financing the Collateral, and transacting lawful  business that is incident, necessary and appropriate to accomplish the foregoing, or (iii) in the case of any  applicable SPE Component Entity, acting as the general partner or managing member (as applicable) of  Borrower;  (c) has not had, does not have and will not have any assets other than (i) in the case of  Mortgage Borrower, the Property and those related to the ownership and operation of the Property  (including, without limitation, replacement thereof as permitted by the Mortgage Loan Documents), (ii) in  the case of Borrower, the Collateral, or (iii) in the case of any applicable SPE Component Entity, its Equity  Interest in Borrower;  (d) has not engaged in, sought or consented to, and will, to the fullest extent permitted  by law, not engage in, seek or consent to, (i) any dissolution, winding up, liquidation, consolidation, merger,  or sale of all or substantially all of its assets, (ii) except as permitted under the terms of this Agreement, any  transfer of partnership or membership interests (if such entity is a general partner in a limited partnership  or a member in a limited liability company), or (iii) any amendment of its limited partnership agreement,  articles of incorporation, articles of organization, certificate of formation or operating agreement (as  applicable) with respect to the matters set forth in this definition without the written consent of Lender;  (e) has been, is, and intends to remain solvent and has paid and intends to continue to  

 

   -30-  29949910.v4  pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its  assets as the same have or shall become due, and has maintained, is currently maintaining and will endeavor  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; provided, however, the foregoing shall not  require any owner of Borrower to make any additional capital contributions;  (f) has not failed, and will not fail, to correct any known misunderstanding regarding  the separate identity of such entity;  (g) has maintained and will maintain its accounts, financial statements, books, and  records separate from any other Person and has not permitted, and will not permit, its assets to be listed as  assets on the financial statement of any other entity except as required by the Approved Accounting Method  (provided, however, that Borrower’s assets may be included in a consolidated financial statement of its  Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to  indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit  are not available to satisfy the debts and other obligations of such Affiliates or any other Person, and (ii)  such assets shall be listed on Borrower’s own separate balance sheet;  (h) has filed and will file its own tax returns, except to the extent that it (i) has been or  is required to file consolidated tax returns by law or (ii) is treated as a disregarded entity for federal or state  tax purposes;  (i) other than as permitted in this Agreement, (i) has not commingled, and will not  commingle, its funds or assets with those of any other Person and (ii) has not participated and will not  participate in any cash management system with any other Person;  (j) has held and will hold its assets in its own name;  (k) has maintained and will maintain an arm’s-length relationship with its Affiliates;  (l) has paid and will pay its own liabilities and expenses, including the salaries of its  own employees (if any), out of its own funds and assets, and has maintained and will maintain a sufficient  number of employees (if any) in light of its contemplated business operations; provided, however, the  foregoing shall not require any owner of Borrower to make any additional capital contributions;  (m) has observed and will observe in all material respects all partnership, corporate or  limited liability company formalities, as applicable;  (n) has not had, and will not have, any Indebtedness other than Permitted  Indebtedness;  (o) except in connection with the Loan Documents, has not assumed or guaranteed or  become obligated for, and will not assume or guarantee or become obligated for, the debts of any other  Person (except to the extent SPE Component Entity is liable for the debts and obligations of Borrower by  virtue of being the general partner of Borrower) and has not held out and will not hold out its credit as being  available to satisfy the obligations of any other Person except, in each case, as permitted pursuant to this  Agreement;  (p) has not acquired and will not acquire obligations or securities of its partners,  members or shareholders or any other Affiliate (other than the securities of Borrower or Mortgage Borrower  held by any applicable SPE Component Entity or Mortgage Borrower SPE Component Entity);  

 

   -31-  29949910.v4  (q) has allocated and will allocate, fairly and reasonably, any overhead expenses that  are shared with any Affiliate, including paying for shared office space and services performed by any  employee of an Affiliate;  (r) has maintained and used, now maintains and uses, and will maintain and use,  separate stationery, invoices and checks bearing its name, and all stationery, invoices, and checks utilized  by such Person or utilized to collect its funds or pay its expenses have borne and shall bear its own name  and have not borne and shall not bear the name of any other entity unless such entity is clearly designated  as being such Person’s agent;  (s) has not pledged and will not pledge its assets for the benefit of any other Person  other than Lender in connection with the Loan;  (t) has conducted and will conduct its business in its name or in a name franchised or  licensed to it by an entity other than an Affiliate of Borrower, and has held itself out and identified itself,  and will hold itself out and identify itself, as a separate and distinct entity under its own name or in a name  franchised or licensed to it by an entity other than an Affiliate of Borrower and not as a division or part of  any other Person, except in each case for services rendered under a business management services  agreement with an Affiliate that complies with the terms contained in Subsection (x) below, so long as the  manager, or equivalent thereof, under such business management services agreement holds itself out as an  agent of Borrower;  (u) has maintained and will maintain its assets in such a manner that it will not be  costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;  (v) has not made and will not make loans to any Person or hold evidence of  Indebtedness issued by any other Person or entity (other than cash and investment-grade securities issued  by an entity that is not an Affiliate of or subject to common ownership with such entity);  (w) has not identified and will not identify its constituent partners, members or  shareholders (as applicable), or any Affiliate of any of them, as a division or part of it, and has not identified  itself, and shall not identify itself, as a division of any other Person;  (x) has not entered into or been a party to, and will not enter into or be a party to, any  transaction with its partners, members, shareholders or Affiliates except (i) in the ordinary course of its  business and on terms which are intrinsically fair, commercially reasonable and are no less favorable to it  than would be obtained in a comparable arm’s-length transaction with an unrelated third party, and (ii) in  connection with this Agreement;  (y) has not had and will not have any obligation to indemnify, and has not indemnified  and will not indemnify, its partners, officers, directors, managers or members, as the case may be, unless  such an obligation is, as of the Closing Date, fully subordinated to the Obligations and will continue at all  times to constitute a claim against such Special Purpose Entity that is subordinated to the Obligations in the  event that cash flow in excess of the amount required to pay the Obligations is insufficient to pay such  obligation;  (z) except as provided in the Loan Documents, does not and will not have any of its  obligations guaranteed by any Affiliate;  (aa) if such entity is a limited partnership, has had, now has and will have (i) as its only  general partners, Special Purpose Entities that are corporations or Acceptable LLCs that own at least one  

 

   -32-  29949910.v4  percent (1%) of the equity of the limited partnership, and (ii) a partnership agreement providing that (A)  such entity will not dissolve upon the bankruptcy of any partner, including any general partner, (B) the vote  of a majority-in-interest of the remaining partners is sufficient to, and such partners shall, continue the life  of the partnership in the event of such bankruptcy of the general partner, and (C) if the vote of a majority- in-interest of the remaining partners to continue the life of the partnership following the bankruptcy of the  general partner is not obtained, the partnership may not liquidate the Property without the consent of the  Lender for as long as the Loan is outstanding;  (bb) if such entity is a corporation, has had, now has and will have at least one (1)  Independent Director, and has not caused or allowed, and will not cause or allow, the board of directors of  such entity to take any Bankruptcy Action (or to collude with, or otherwise assist, solicit, or cause to be  solicited an involuntary Bankruptcy Action) or any other action requiring the unanimous affirmative vote  of one hundred percent (100%) of the members of its board of directors unless at least one (1) Independent  Director shall have participated in such vote and all of the directors have participated in such vote;  (cc) except as provided in clause (dd) below, if such entity is a limited liability  company, has been, now is, and will be a limited liability company formed under the laws of the State of  Delaware that will have an operating agreement which provides that as long as any portion of the Debt  remains outstanding:  (i) the company shall have at least one (1) Independent Manager that shall be a duly- appointed “manager” of the limited liability company within the meaning of Section 18-101(10) of the  Delaware Limited Liability Company Act (the “Act”), and the limited liability company shall not take any  Bankruptcy Action (or to collude with, or otherwise assist, solicit, or cause to be solicited an involuntary  Bankruptcy Action) unless (A) such Bankruptcy Action is approved by the prior unanimous written consent  of all members and managers thereof (including any Independent Manager), and (B) at the time of such  action such limited liability company has at least one (1) manager who is an Independent Manager  (provided, however, the managers shall only have the rights and duties expressly set forth in the limited  liability company agreement); (ii) upon the occurrence of any event that causes the last member of the  limited liability company to cease to be a member of such limited liability company (other than upon an  assignment by such member of all of its limited liability company interest in such limited liability company  and the admission of the transferee in accordance with the limited liability company agreement), (A) the  person(s) acting as Independent Manager of such limited liability company shall, without any action of any  Person and simultaneously with such member ceasing to be a member of such limited liability company,  automatically be admitted as the “Special Member” (an Independent Manager in such capacity, a “Special  Member”) and shall preserve and continue the existence of such limited liability company without  dissolution, and (B) without limiting the provisions of clause (A), upon the occurrence of any event that  causes the last remaining member of the limited liability company to cease to be a member of the limited  liability company or that causes the sole member to cease to be a member of the limited liability company  (other than upon continuation of the limited liability company without dissolution upon an assignment by  the member of all of its limited liability company interest in the limited liability company and the admission  of the transferee in accordance with the limited liability company agreement), to the fullest extent permitted  by law, the personal representative of such member shall be authorized to, and shall, within ninety (90)  days after the occurrence of the event that terminated the continued membership of such member in such  limited liability company, agree in writing to continue the limited liability company without dissolution and  to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute  member of such limited liability company, effective as of the occurrence of the event that terminated the  continued membership of such member in such limited liability company; (iii) no Special Member may  resign or transfer its rights as Special Member unless (A) a successor Special Member has been admitted  to such limited liability company as a Special Member, and (B) such successor Special Member has also  accepted its appointment as an Independent Manager and executed a counterpart to the limited liability  company agreement; provided, however, the Special Member shall automatically cease to be a member of  the limited liability company upon the admission to the limited liability company of a substitute member;  

 

   -33-  29949910.v4  (iv) the Special Member shall be a member of the limited liability company that has no interest in the profits,  losses and capital of the limited liability company and has no right to receive any distributions of limited  liability company assets; pursuant to Section 18-301 of the Act, a Special Member shall not be required to  make any capital contributions to the limited liability company and shall not receive a limited liability  company interest in the limited liability company; (v) a Special Member, in its capacity as Special Member,  may not bind the limited liability company; (vi) except as required by any mandatory provision of the Act,  a Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise  consent to any action by, or matter relating to, the limited liability company, including the merger,  consolidation or conversion of the limited liability company; (vii) in order to implement the admission to  the limited liability company of each Special Member, each Person acting as an Independent Manager shall  execute a counterpart to the limited liability company agreement; (viii) prior to its admission to the limited  liability company as Special Member, each Person acting as an Independent Manager shall not be a member  of the limited liability company; (ix) such limited liability company shall be dissolved, and its affairs shall  be wound up only upon the first to occur of the following (but subject to clause (ii) above):  (A) the  termination of the legal existence of the last remaining member of such limited liability company or the  occurrence of any other event which terminates the continued membership of the last remaining member  of such limited liability company in such limited liability company unless the business of such limited  liability company is continued in a manner permitted by its limited liability company agreement or the Act,  or (B) the entry of a decree of judicial dissolution of the limited liability company under Section 18-802 of  the Act; (x) neither the bankruptcy of any member of the limited liability company or the Special Member  shall cause such member or Special Member, respectively, to cease to be a member of such limited liability  company and upon the occurrence of such an event, the business of such limited liability company shall  continue without dissolution; (xi) in the event of dissolution of such limited liability company, such limited  liability company shall conduct only such activities as are necessary to wind up its affairs (including the  sale of the assets of such limited liability company in an orderly manner), and the assets of such limited  liability company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of  the Act; and (xii) to the fullest extent permitted by law, except as otherwise expressly provided in the limited  liability company agreement, each member of the limited liability company and the Special Members shall  irrevocably waive any right or power that they might have to cause such limited liability company or any  of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of  such limited liability company, to compel any sale of all or any portion of the assets of such limited liability  company pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in  equity to cause the dissolution, liquidation, winding up or termination of such limited liability company (a  limited liability company meeting the criteria of this clause (cc) is referred to herein as an “Acceptable  LLC”);  (dd) if such entity is a limited liability company that is not an Acceptable LLC, has had,  now has and will have at least one (1) member that is a Special Purpose Entity that is a corporation or an  Acceptable LLC that owns at least one percent (1%) of the Equity Interests in such limited liability  company;  (ee) the organizational documents of such entity shall further provide that:  (i) such  entity shall not be permitted take any action which, under the terms of any organizational documents of  such entity, requires a unanimous written consent of the board of directors or managers of such entity unless  at the time of such action there shall be at least one (1) Independent Manager or Independent Director  serving in such capacity as required by the terms hereof; (ii) no Independent Director or Independent  Manager may be removed or replaced except for Cause; (iii) any resignation, removal or replacement of  any Independent Director or Independent Manager shall not be effective without five (5) Business Days  prior written notice to Lender accompanied by a statement as to the reasons for such removal, the identity  of the proposed replacement Independent Director or Independent Manager, and a certificate that the  replacement Independent Director or Independent Manager satisfies the applicable terms and conditions of  

 

   -34-  29949910.v4  the definition of “Independent Director” or “Independent Manager”; (iv) to the fullest extent permitted by  applicable law, including Section 18-1101(c) of the Act and notwithstanding any duty otherwise existing  at law or in equity, the Independent Director or Independent Manager shall consider only the interests of  the constituent owners of such entity and such entity (including such entity’s creditors) in acting or  otherwise voting on a Bankruptcy Action (which such fiduciary duties to the owners of such entity and such  entity’s creditors, in each case, shall be deemed to apply solely to the extent of their respective economic  interests in such entity exclusive of (A) all other interests, (B) the interests of other affiliates of the owners  of such entity and such entity, and (C) the interests of any group of affiliates of which the owners of such  entity or such entity is a part); (v) other than as provided in clause (iv) above, to the fullest extent permitted  by law the Independent Director or Independent Manager shall not have any fiduciary duties to any owners  of such entity, any directors of such entity, or any other Person; (vi) the foregoing shall not eliminate the  implied contractual covenant of good faith and fair dealing under applicable law; and (vii) to the fullest  extent permitted by applicable law, including Section 18-1101(e) of the Act, an Independent Director or  Independent Manager shall not be liable to such entity, any owners of such entity, or any other Person  bound by the limited liability company agreement for breach of contract or breach of duties (including  fiduciary duties), unless the Independent Director or Independent Manager acted in bad faith or engaged in  gross negligence or willful misconduct;  (ff) has complied and will comply with all of the terms and provisions contained in its  organizational documents;  (gg) the statement of facts contained in its organizational documents are true and correct  and will remain true and correct;  (hh) has and will have an express acknowledgment in its organizational documents that  Lender is an intended third-party beneficiary of the “special purpose/separateness/bankruptcy remote”  provisions (as applicable) of such organizational documents; and  (ii) has not and will not consent to any other Person (i) operating its business in the  name of such Person, (ii) acting in the name of such Person, (iii) using such Person’s stationery or business  forms, (iv) holding out its credit as being available to satisfy the obligations of such Person, (v) having  contractual liability for the payment of any of the liabilities of such Person (except pursuant to the limited  extent provided under the Loan Documents), or (vi) failing to at all times specify to all relevant third parties  that it is acting in a capacity other than as the applicable Special Purpose Entity.  “Spread” means eight hundred ninety-two (892) basis points (i.e., 8.92%).  “Springing Recourse Event” has the meaning set forth in Section 8.3 hereof  “State” means the State of California.  “Stored Materials” means materials purchased by Mortgage Borrower at or prior to the date of a  Draw Request for use in the Project, but either (i) stored at a bonded warehouse, and not yet installed or  incorporated into the Project (“Unincorporated Materials”) or (ii) not yet delivered to the Property (“Off- Site Materials”), in each of the foregoing cases, other than operating supplies, operating equipment and  furniture, fixtures, equipment and machinery for the Property.  Stored Materials shall cease to be Stored  Materials only when the same are installed or incorporated into the Property.  “Stored Materials Cap” has the meaning set forth in Section 2.1.10 hereof.  

 

   -35-  29949910.v4  “Substantially Complete” means (i) the Approved Project Expenditures have been completed in  substantial accordance with the Plans and Specifications and all Legal Requirements, subject only to the  completion of all Punchlist Items, as evidenced by a written statement or certificate executed by General  Contractor or the Architect, as applicable, and verified by the Construction Consultant, (ii) if applicable, a  valid certificate of occupancy (or equivalent document, including without limitation, evidence that the  applicable Governmental Authority has inspected and approved the completion of the Approved Project  Expenditures, or a temporary certificate of occupancy) has been issued by the applicable Governmental  Authority permitting the full use of the Property for its intended purposes, (iii)  the Property is free of all  mechanics’, materialmen’s, and other similar Liens (or such liens have otherwise been bonded over to  Lender’s reasonable satisfaction), and (iv) Borrower has delivered to Lender reasonable evidence that the  applicable Governmental Authorities have conducted a final inspection of the Property and approved the  completion of such work. The terms “Substantially Completed” and “Substantial Completion” shall  have the same meaning when used in the Loan Documents.  “Substantial Completion Due Date” means June 1, 2023.  “Substitute Interest Rate Cap Agreement” means an index rate derivative product comparable  to the Interest Rate Cap Agreement described in Section 2.2.7(a), which product caps exposure to  fluctuations in, as applicable, the Alternate Rate Index or the Prime Rate Index, and which otherwise  satisfies all of the conditions set forth in Section 2.2.7 hereof; provided that references in such Section 2.2.7  to the previously applicable Applicable Rate Index shall be replaced with, as applicable, the Alternate Rate  Index or the Prime Rate Index; and provided further that the strike rate for such derivative product shall be  as determined by Lender (in its sole but good faith direction) as providing a hedge against rising interest  rates that is no less beneficial to Borrower and Lender than the Interest Rate Cap Agreement being replaced  or required to be purchased, as applicable.  “Substitute Deficiency Provisions” has the meaning set forth in Section 2.1.12(f).  “Substitute Shortfall Provisions” has the meaning set forth in Section 2.1.9(e).  “Survey” means the survey delivered to (and approved by) Lender in connection with the closing  of the Loan.  “Tax Reserve Account” has the meaning set forth in Section 3.2.1(a) hereof.  “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings  (including backup withholding), assessments, fees or other charges imposed by any Governmental  Authority, including any interest, additions to tax or penalties applicable thereto.  “Tenant Direction Letter” means an irrevocable written instruction to all tenants under Leases to  deliver all Revenues payable thereunder directly to the Clearing Account in form and substance reasonably  acceptable to Lender.  “Third Party Sale” means the sale by Mortgage Borrower of all of its right, title and interest in  the Property to a Person that is not Borrower, Mortgage Borrower, Master Tenant, Guarantor or Instil  Sponsor or any Affiliate of any of the forgoing pursuant to a bona fide, arms’ length sale on market terms,  as reasonably determined by Lender.  “Term SOFR” means the Term SOFR Reference Rate for a tenor of one month on the  Determination Date, as such rate is published by the Term SOFR Administrator; provided, however, that if  as of 5:00 p.m. (New York City time) on any Determination Date the Term SOFR Reference Rate for a  

 

   -36-  29949910.v4  tenor of one month has not been published by the Term SOFR Administrator, then Term SOFR will be the  Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first  preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such  tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government  Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such  Determination Date. Notwithstanding the foregoing or anything herein to the contrary, in no event shall  Term SOFR be less than the Rate Index Floor.  “Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or  a successor administrator of the Term SOFR Reference Rate selected by Lender).  “Term SOFR Loan” means the Loan at such time as interest thereon accrues at a rate of interest  based upon the Term SOFR Rate.  “Term SOFR Rate” means, with respect to each Interest Accrual Period, the per annum rate of  interest of Term SOFR determined as of the Determination Date immediately preceding the commencement  of such Interest Accrual Period plus the Spread; provided that in no event will the Term SOFR Rate be less  than the Minimum Rate.  “Term SOFR Reference Rate” means the forward-looking term rate based on SOFR.  “Title Company” means Fidelity National Title Insurance Company or any successor title  company acceptable to Lender and licensed to issue title insurance in the State in which the Property is  located.  “Title Insurance Policy” means the title insurance policy obtained by Mortgage Lender in  connection with the closing of the Mortgage Loan.  “Trade Contract” means any agreement, contract or purchase order between Mortgage Borrower,  an Affiliate of Mortgage Borrower or General Contractor, on the one hand, and any Trade Contractor, on  the other hand, pursuant to which such Trade Contractor agrees to provide labor, materials, equipment  and/or services in connection with the construction of the Project, in each case, as the same may be  amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the  terms of this Agreement.  The term “Trade Contract” shall not include the Architect Agreement, the General  Contractor Agreement or any other agreement, contract or purchase order pertaining solely to professional  services to be provided by any other Design Professional.  “Trade Contractor” means any Person that is a contractor, subcontractor, sub-subcontractor,  supplier or provider of labor, materials, equipment and/or services in connection with the construction of  the Project or any subsidiary and/or affiliate of any of the foregoing, under a Trade Contract.  “Transfer” means any sale, conveyance, transfer, lease, assignment, grant, mortgage, option,  encumbrance, hypothecation, pledge, or Lien, in each case whether by operation of law or otherwise, and  with respect to an entity shall include the merger of such entity with or into any other entity; provided,  however, that this definition shall not include any Condemnation.  “Tranche” has the meaning set forth in Section 9.2(a) hereof.  “UCC” means the Uniform Commercial Code as in effect in the State of New York.  

 

   -37-  29949910.v4  “UCC Title Policy” shall mean a title insurance policy in the form reasonably acceptable to Lender  issued with respect to the Collateral and insuring the Lien of the Pledge Agreement.  “Unfunded Loan Amount” has the meaning set forth in Section 2.3.2.  “Unfunded Loan Proceeds Account” has the meaning set forth in Section 2.3.2.  “UNOI” means the underwritten net operating income for the Property determined by Lender as  the sum of (a) Operating Income for the trailing twelve (12) month period, less (b) actual Operating  Expenses incurred in connection with the Property during the twelve (12) month period preceding the date  of calculation, with adjustments for any anticipated increases in such Operating Expenses projected to occur  during the twelve (12) month period following the date of calculation.  “Unincorporated Materials” has the meaning assigned to such term in the definition of Stored  Materials.  “U.S. Government Securities Business Day” means any day except for a Saturday, a Sunday or  a day on which the Securities Industry and Financial Markets Association, or any successor thereto,  recommends that the fixed income departments of its members be closed for the entire day for purposes of  trading in United States government securities.  “U.S. Person” shall mean any Person that is a “United States Person” as defined in  Section 7701(a)(30) of the Code.  “U.S. Tax Compliance Certificate” has the meaning set forth in Section 2.2.3(e)(ii)(B)(3) hereof.  “WARN Act” shall mean the Worker Adjustment and Retraining Notification Act or any other  applicable similar state law.  “Withdrawal Liability” has the meaning given to such term under Part I of Subtitle E of Title IV  of ERISA.  “Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority,  the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail- In Legislation for the applicable EEA Member Country, which write-down and conversion powers are  described in the EU Bail-In Legislation Schedule.  SECTION 1.2. Principles of Construction.  All references to sections and schedules are to  sections and schedules in or to this Agreement unless otherwise specified. All accounting terms not  specifically defined herein shall be construed in accordance with the Approved Accounting Method.  When  used herein, the term “financial statements” shall include the notes and schedules thereto.  Unless otherwise  specified herein or therein, all terms defined in this Agreement shall have the definitions given them in this  Agreement when used in any other Loan Document or in any certificate or other document made or  delivered pursuant thereto. All uses of the word “including” means “including, without limitation” unless  the context shall indicate otherwise. Unless otherwise specified, the words “hereof,” “herein” and  “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a  whole and not to any particular provision of this Agreement. Unless otherwise specified, all meanings  attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the  terms so defined. The words “to Borrower’s knowledge” or “to the knowledge of Borrower” (or words of  similar meaning) shall mean “to the knowledge Borrower and its Affiliates”. Borrower and Lender hereby  acknowledge and agree that, as to any clauses or provisions contained in this Agreement or any of the other  

 

   -38-  29949910.v4  Loan Documents to the effect that Borrower (a) represents or warrants on behalf of, or covenants on behalf  of, Mortgage Borrower or an Affiliate thereof, (b) shall cause Mortgage Borrower or an Affiliate thereof to  act or refrain from acting, to comply with, to permit, to perform, to pay, to furnish, to cure, to remove, to  observe, to deliver, to suffer, to initiate, to provide, to make available, to furnish in any manner, or (c) shall  cause to occur or not to occur, or otherwise be obligated in any manner with respect to, any matters  pertaining to Mortgage Borrower or an Affiliate thereof, such clause or provision is intended to mean, and  shall be construed as meaning, (i) that Borrower shall cause Mortgage Borrower or such Affiliate to take  such action and in all cases throughout the Loan Documents the words “Borrower shall” or “Borrower shall  not” (or words of similar meaning) means “Borrower shall cause Mortgage Borrower (or the applicable  Affiliate)” or “Borrower shall not permit Mortgage Borrower (or the applicable Affiliate)”, as applicable,  to so act or not to so act, as applicable, as the context may require (and any instance in the Loan Documents  where such words already appear shall not be deemed or construed to mean that any other instance where  such words do not appear were not intended to be interpreted as provided above), and (ii) that Borrower is  obligated only in Borrower’s capacity with respect to Mortgage Borrower or such Affiliate thereof, and not  directly with respect to Mortgage Borrower or such Affiliate thereof in any other manner which would  cause Borrower to fail to satisfy the definition of Special Purpose Entity, any other similar covenants  contained in Borrower’s or Mortgage Borrower’s organizational documents, or any other similar covenants  contained in any Loan Documents. With respect to terms defined by cross-reference to the Mortgage Loan  Documents or other references to the provisions of the Mortgage Loan Documents, such defined terms shall  have the definitions, and such other provisions shall be, as set forth in the Mortgage Loan Documents as of  the Closing Date, and no modifications to the Mortgage Loan Documents shall have the effect of changing  such definitions or provisions (including changes to other definitions or provisions set forth in the Mortgage  Loan Documents that are used in or otherwise modify such cross-referenced definitions or cross-referenced  provisions) for the purposes of this Agreement unless Lender has approved of such modification in writing.  Notwithstanding anything stated herein to the contrary, any provisions in this Agreement cross-referencing  or incorporating by reference provisions of the Mortgage Loan Documents shall be effective  notwithstanding the termination of the Mortgage Loan Documents by payment in full of the Mortgage Loan  or otherwise.  ARTICLE II    GENERAL TERMS  SECTION 2.1. The Loan.  2.1.1 Use of Loan Proceeds.  Subject to and upon the terms and conditions set forth herein,  Lender hereby agrees to make, and Borrower hereby agrees to borrow and accept, the Loan on the Closing  Date. Any amount borrowed and repaid hereunder may not be reborrowed.  2.1.2 Initial Advance.  Borrower shall receive, on the Closing Date, one (1) borrowing  hereunder with respect to the Loan in the amount of $18,389,032 (such borrowing hereinafter, the “Initial  Advance”). Borrower shall use the proceeds of the Initial Advance only to (a) reimburse certain Costs  incurred by Borrower in advance of the Closing Date and approved by Lender (such Costs, the  “Reimbursable Costs”), (b) make initial deposits into the Reserve Accounts in the amounts provided  herein, and (c) pay costs, fees and expenses incurred in connection with the closing of the Loan, as  reasonably approved by Lender.  2.1.3 Additional Advances. Lender agrees to fund additional advances of the Loan Amount  requested by Borrower from time to time (each, an “Additional Advance”) subject to the satisfaction of  the applicable terms and conditions of this Section 2.1. Borrower shall use the proceeds of the Additional  

 

   -39-  29949910.v4  Advances only to pay, in accordance with the terms and conditions of this Agreement, (a) Interest and Carry  Costs and (b) Approved Project Expenditures.  2.1.4 Disbursement of Additional Advances. Subject to the satisfaction of the terms and  conditions set forth below, Borrower shall be entitled to receive Additional Advances in an aggregate  amount not to exceed (i) the Project Advance Amount to fund Approved Project Expenditures and (ii) the  Interest and Carry Costs Advance Amount to pay for Interest and Carry Costs. All disbursements shall be  applied by Borrower solely for the purposes for which the funds have been disbursed. All Additional  Advances, once advanced, shall bear interest at the Interest Rate. It is hereby agreed that Lender shall have  no obligation to advance more than the Mortgage Funding Share of the amount of each Combined Advance  required to be disbursed under this Agreement.  2.1.5 Additional Advance Borrowing Procedures.  (a) Draw Requests.  In connection with a request for each Additional Advance,  Borrower shall submit to Lender and Construction Consultant a draw request (each, a “Draw Request”)  substantially in the form required pursuant to Section 2.1.5(b) not less than ten (10) Business Days (but not  more than sixty (60) days) prior to the applicable Advance Date; provided that there shall be no more than  one Draw Request for Approved Project Expenditures and no more than one Draw Request for Interest and  Carry Cost in each calendar month. Each Draw Request for Approved Project Expenditures shall specify  the Hard Costs (which shall not exceed the value of work in place and Stored Materials as supported by  invoices and other supporting documentation, as reasonably approved by Construction Consultant, less any  Retainage), including deposits paid to any Contractor or Trade Contractor, and Soft Costs (including  deposits required to be paid pursuant to any agreement covering Soft Costs)) and Interest and Carry Costs  to be paid from the proceeds of the requested Additional Advance. No Additional Advance with respect to  the payment of any Advance Item constituting Approved Project Expenditure shall be requested or  advanced (x) for an amount that, together with the amount of Additional Advance with respect to the  payment of all other Advance Items constituting Approved Project Expenditure then being requested  hereunder and under the Mortgage Loan Agreement, is less than $150,000 (other than the last requested  Additional Advance with respect to such Advance Item if less) or (y) more frequently than once in any  calendar month. Each Draw Request in connection with an Additional Advance for the payment of Hard  Costs shall specify the amount of any Retainage previously withheld and which has then become payable  by Borrower, with supporting documentation describing in reasonable detail the basis for any such  disbursements. All Draw Requests shall be approved by Lender, not to be unreasonably withheld, and, with  respect to Hard Costs, reasonably approved for payment by Construction Consultant.  (b) Required Documentation.  Each Draw Request submitted hereunder shall include  the following:  (i) a requisition letter in the form set forth on Exhibit E attached hereto;  (ii) an Officer’s Certificate in the form set forth on Exhibit C attached hereto;  (iii) proof of payment to (x) General Contractor and (y) each Trade Contractor  with respect to such Trade Contractor’s Non-Lienable Work (which proof of payment, in  the case of each such Trade Contractor, shall include, without limitation, copies of all  applicable invoices and wire confirmations), as the case may be, evidencing payment in  full for all work performed and/or material supplied to the date of the preceding Additional  Advance, except for Retainage and any disputed amounts being contested by Borrower in  accordance with Section 5.1.2(b) hereof;  

 

   -40-  29949910.v4  (iv) with respect to any Draw Request for payment of Hard Costs, the  following:  (A) a completed Application and Certificate for Payment (AIA  Documents G702 and G703) that is executed by the General Contractor, Architect  (or, if such Application and Certificate for Payment is not executed by Architect,  then the Draw Request shall include an Architect’s certificate in form and  substance reasonably satisfactory to Lender) and/or the Major Trade Contractors,  as applicable, each of which shall be certified as true and complete by Borrower  and shall be verified by the Construction Consultant;  (B) unconditional or conditional (conditioned upon payment from the  requested disbursement) waivers of liens from General Contractor and all Trade  Contractors with respect to all Costs (other than Interest and Carry Costs) incurred  in connection with the Project since the Closing Date or the last Advance Date, as  applicable, dated on or about the date of such Draw Request, in form and substance  reasonably acceptable to Lender, covering all work done and all sums received by  such Persons through the date such waiver is signed and noting the amounts then  due and owing (other than any Retainage), each of which shall be verified by  Construction Consultant;  (C) a list of all Trade Contracts executed since the date of the then last  preceding Additional Advance, together with a certification by Borrower that  copies of such Trade Contracts have been submitted to Construction Consultant  prior to the date of such Draw Request, together with, unless previously provided  to Lender and to the extent required herein, executed Major Trade Contractor  Consents for each new Major Trade Contractor who is to receive proceeds of the  applicable Additional Advance;  (D) a list of all Construction Contracts (to the extent not previously  provided, including pursuant to clause (C) above) in effect as of such Advance  Date and copies of any Construction Contracts (to the extent not previously  provided, including pursuant to clause (C) above) and any amendments,  restatements, replacements, supplements or other modifications to any  Construction Contracts, in each case, executed after the Closing Date or the date  of the last Draw Request, as the case may be, in accordance with the terms and  conditions of this Agreement;  (E) to the extent not previously delivered to Lender, copies of Change  Orders that have not been submitted to Lender prior to the date of such Draw  Request, together with (I) a statement by Borrower that copies of the same have  been submitted to Construction Consultant simultaneously with or prior to the date  of such Draw Request and (II) a list of all Change Orders then to date and a list of  all contemplated or pending Change Orders;  (F) evidence reasonably satisfactory to Lender (which evidence may,  in Lender’s discretion, be in the form of an Officer’s Certificate, in form and  substance reasonably acceptable to Lender, stating) that the full amount of the  applicable portion of the proceeds of the then last preceding Additional Advance  have been paid out by Borrower or General Contractor to the Persons with respect  

 

   -41-  29949910.v4  to whom the Additional Advance was disbursed and otherwise in accordance with  this Agreement; and  (G) such other information and documentation as may be reasonably  requested by Lender or Construction Consultant with respect to the Hard Costs  covered by such Draw Request; and  (v) with respect to any Draw Request for payment of Soft Costs, the  following:  (A) current requisitions for payment from Trade Contractors to the  extent allocable to the Project;  (B) such evidence as Lender reasonably requests that such Soft Costs  have been properly incurred and are due and payable and are in amounts set forth  in the Construction Budget;  (C) evidence reasonably satisfactory to Lender that the full amount of  the portion of the proceeds of the then last preceding Additional Advance have  been paid out by Borrower or General Contractor to the Persons with respect to  whom such Additional Advance was disbursed and otherwise in accordance with  this Agreement; and  (D) invoices, statements or such other information and documentation  as Lender reasonably requests with respect to such Soft Costs covered by such  Draw Request.  2.1.6 General Conditions Precedent to Additional Advances.  Lender shall not be obligated  to make an Additional Advance unless all of the following conditions are satisfied:  (a) No Event of Default.  No Default or Event of Default exists at the time the  Additional Advance is requested or as of the Advance Date;  (b) Draw Request.  Lender shall have received a Draw Request in accordance with the  requirements of Section 2.1.5(a) hereof, together with all applicable documents required to be delivered  with such Draw Request pursuant to Section 2.1.5(b) hereof;  (c) Additional Advance Maximum Amount. No Additional Advance required to be  made hereunder shall be in an amount that is more than the lesser of (i) the amount that, together with all  previous Additional Advances, equals the Loan Amount, and (ii) with respect to Additional Advances for  any Advance Item, the Advance Amount applicable to such Advance Item;  (d) Required Borrower Equity Advance. Lender shall have received evidence  reasonably satisfactory to it that Borrower shall have funded (or will simultaneously fund) the Required  Borrower Equity Advance applicable to such Additional Advance;  (e) Intentionally Omitted.  (f) Construction Consultant Certification.  With respect to each Draw Request relating  to Hard Costs, Lender shall have received a certificate or report of Construction Consultant based upon a  site observation of the Property made by Construction Consultant not more than thirty (30) days prior to  

 

   -42-  29949910.v4  such Advance Date, in which Construction Consultant shall in substance (i) verify that the portion of the  Project completed as of the date of such site observation has been substantially completed in accordance  with the Plans and Specifications and (ii) state Construction Consultant’s estimate of (A) the percentage of  the construction of the Project completed as of the date of such site observation on the basis of work in  place as part of the Project and the Construction Budget, (B) the Hard Costs actually incurred for work in  place as part of the Project as of the date of such site observation, (C) the sum necessary to complete  construction of the Project substantially in accordance with the Plans and Specifications, and (D) the  amount of time from the date of such site inspection that will be required to achieve Completion of the  Project;  (g) Plans and Specifications.  Borrower shall have delivered to Construction  Consultant a complete set of any amendments, replacements, supplements or other modifications made to  the Plans and Specifications, in each case, made after the Closing Date or the date of the last Draw Request,  as the case may be, in accordance with the terms and conditions of this Agreement, and Lender shall have  received a list identifying the Plans and Specifications as in effect as of such Advance Date;  (h) Title Date Down.  Borrower shall cause the Title Company (or Borrower shall have  obtained a commitment from the Title Company) to issue an ALTA 33 Disbursement Endorsement to the  Title Insurance Policy, to be dated and effective on the date of disbursement of the Additional Advance  which evidences (i) no new exceptions to the Title Insurance Policy other than Permitted Encumbrances  (other than Permitted Encumbrances set forth in clause (vi) of the definition thereof unless actually bonded  or discharged) since the date of the last Additional Advance (with affirmative insurance that no Taxes or  Other Charges (other than Taxes and Other Charges being contested in accordance with this Agreement)  are delinquent, and  (ii) increases the Title Insurance Policy liability amount by the amount of the Additional  Advance as of the new Date of Coverage (as defined in the ALTA 33 Disbursement Endorsement);  (i) Mortgage Loan Advance. Mortgage Lender shall have advanced (or be  simultaneously advancing) the Mortgage Funding Share of the amount of the applicable Combined  Advance with respect to which Lender is making an Additional Advance hereunder from proceeds of the  Mortgage Loan in accordance with the terms of the Mortgage Loan Agreement;  (j) Environmental Compliance.  Lender shall have received evidence of Borrower’s  compliance with all recommendations set forth in the Environmental Report or any future environmental  report or assessment requested by Lender under the terms of the Environmental Indemnity; provided, that,  by undertaking the measures identified in and pursuant to this Section 2.1.6(j), Lender shall not be deemed  to be exercising any control over operations of Borrower or the handling of any environmental matter or  hazardous wastes or substances of Borrower for purposes of incurring or being subject to liability therefor;  (k) Representations and Warranties.  Each of the representations and warranties of  Borrower and Guarantor contained in each of the Loan Documents shall be true, complete and correct in  all material respects as if made on (and with respect to facts and circumstances existing as of) the Advance  Date, except for any changes in facts or circumstances occurring since the Closing Date that do not  constitute a Default or Event of Default or were not caused by the occurrence of a Default or Event of  Default and, in any event, do not result in a Material Adverse Effect;  (l) Construction Permits.  Borrower shall have obtained all Construction Permits then- required under Legal Requirements for the actual stage of construction on the Property and delivered to  Lender a copy of each of the Construction Permits;  (m) Payment of Fees.  Borrower shall have paid or reimbursed all of Lender’s  outstanding fees and expenses (including fees and expenses of the Construction Consultant, and all other  

 

   -43-  29949910.v4  fees, costs and expenses of (including fees and expenses of outside legal counsel) relating to the Loan to  the extent then due and payable, pursuant to the applicable provisions of this Agreement and the other Loan  Documents;  (n) No Other Security Instruments.  Except as otherwise permitted under the Loan  Documents, all material and fixtures incorporated in the construction of the Project shall have been  purchased so that their absolute ownership shall have vested in Borrower immediately upon delivery to the  Property and Borrower shall have produced and furnished, if required by Lender, the contracts, bills of sale  or other agreements under which title to such materials and fixtures is claim;  (o) Loan Balancing.  The Loan shall be In Balance as provided in Section 2.1.11;  (p) Shortfall.  No Interest and Carry Cost Shortfall exists;  (q) Compliance with Laws.  Other than matters fully disclosed to Lender which are  curable and are being cured as part of the work comprising the Required Improvements, and subject to  Borrower’s right to contest in accordance with Section 5.1.2(b), the Property shall comply in all material  respects with all Legal Requirements;  (r) Pending Litigation. There shall be no pending or threatened litigation known to  Borrower or its counsel against Borrower, Mortgage Borrower, Master Tenant, Guarantor, Manager,  General Contractor, the Collateral or the Property which, if decided unfavorably, could reasonably be  expected to result in (i) a change in Control of Borrower, Master Tenant or Manager, (ii) a Material Adverse  Effect, or (iii) the failure of Guarantor to satisfy the Financial Covenant Requirement;  (s) No Casualty or Condemnation.  (i) Other than matters being cured as part of the  work comprising the Required Improvements, the Property shall comply in all material respects with all  Legal Requirements, (ii) if any Restoration is then continuing, Borrower is diligently pursuing such  Restoration and Lender has determined that the non-completion of such Restoration prior to the making of  the Additional Advance is not reasonably likely to have a Material Adverse Effect, and (iii) no Casualty or  Condemnation shall have occurred that permits any tenant party to a Lease a termination right (or such right  shall have been waived or lapsed);  (t) Milestones.  On the Advance Date, no event shall have occurred that would  reasonably be expected to result in Borrower being unable to achieve any Major Milestone within the time  period applicable to such Major Milestone, as determined by Lender.  (u) HVCRE.  Notwithstanding anything to the contrary set forth herein or in any other  Loan Document, Lender shall not be obligated to authorize an Additional Advance hereunder which could,  in Lender’s sole but good faith discretion, cause the Loan to be classified as an HVCRE;  (v) Payment and Performance Bonds; Sub-Guard Insurance. Borrower shall cause, at  Lender’s election, either (i) payment and performance Bonds, in form and substance reasonably satisfactory  to Lender and issued by sureties satisfactory to Lender to be maintained with respect to the obligations of  each Trade Contractor; and/or (ii) a sub-guard insurance policy in form and substance reasonably acceptable  to Lender to be maintained with respect to the obligations of each Trade Contractor, provided, that the  Bonds shall be in an amount not less than the full contract price for each such Trade Contract required to  be bonded pursuant to this Section 2.1.6(v);  (w) Closing Date Minimum Equity Requirement.  Lender shall have received  satisfactory evidence that the Closing Date Minimum Equity Requirement remains satisfied, which  

 

   -44-  29949910.v4  evidence may be in the form of an Officer’s Certificate, in form and substance reasonably acceptable to  Lender, stating that no distributions have been made;  (x) Master Lease.  The Master Lease shall remain in full force and effect and no default  shall have occurred under the Master Lease that remains uncured; and  (y) Miscellaneous.  Lender shall have received all documents, reports, certificates,  affidavits and other information, in form and substance reasonably satisfactory to Lender or Construction  Consultant, as each may reasonably require, to evidence compliance by Borrower with the terms and  conditions to be complied with by Borrower in connection with the disbursement of the applicable  Additional Advance.  2.1.7 Additional Advances for the Payment of Approved Project Expenditures.  With  respect to each Additional Advance requested for the payment of Approved Project Expenditures, in  addition to satisfaction by Borrower of all the applicable conditions precedent set forth in Sections 2.1.5  and 2.1.6 above, Lender shall not be obligated to make such Additional Advance unless all of the following  conditions are also satisfied:  (a) Lender shall have received an Officer’s Certificate with respect to any construction  work constituting the applicable Approved Project Expenditures to be funded by such Additional Advance  certifying that whatever portion of such work has been Completed to date has been Completed in good and  workmanlike manner in substantial accordance with all applicable Legal Requirements and the Plans and  Specifications;  (b) Lender shall have received (i) an updated Construction Budget for the Project in  accordance with Section 5.1.3(c) hereof, in form and substance reasonably satisfactory to Lender, which  indicates the Costs (other than Interest and Carry Costs) anticipated to complete the Required  Improvements, after giving effect to Costs (other than Interest and Carry Costs) incurred during the period  since the Closing Date, or the date of the last preceding Draw Request, as the case may be, and (ii) an  anticipated costs report in form and substance reasonably acceptable to Lender, which indicates the Costs  (other than Interest and Carry Costs) anticipated to complete the Required Improvements, after giving effect  to Costs incurred during the previous calendar month (or the date of the last preceding Draw Request, as  the case may be), and projected Costs; provided, that, no Line Item in the Construction Budget with respect  to Approved Project Expenditures shall be eligible for funding from the proceeds of an Additional Advance  until 100% of such Line Item has been bought out and Lender and Construction Consultant have reviewed  the related sub-contract(s) and, if applicable, Major Trade Contractor Consent(s);  (c) Lender shall have received a reconciliation by Borrower of the progress and cost  of the construction of the Project through the date of the Draw Request with the Construction Schedule and  the Construction Budget, together with a projection of such progress and costs through to Completion of  the Project; and  (d) in no event will the aggregate of all Additional Advances actually made under this  Agreement for the payment of Approved Project Expenditures exceed the Project Advance Amount.  2.1.8 Intentionally Omitted.  2.1.9 Advances to Pay Interest, Fees and Expenses.  (a) Subject to the terms of this Agreement, Additional Advances may be used to pay  Interest and Carry Costs. Subject to the remaining provisions of this Section 2.1.9, Borrower hereby  

 

   -45-  29949910.v4  irrevocably requests that Lender make an Additional Advance on each Payment Date to pay Interest and  Carry Costs to the extent of the Mortgage Funding Share of any shortfall of amounts on deposit in the Cash  Management Account. Additional Advances required to be made by Lender in accordance with the  foregoing shall be deposited by Lender into the Cash Management Account for application in the manner  and order of priority as set forth in Section 3.1(b) of this Agreement. Any Additional Advance so made  shall be deemed to be an Additional Advance made to and received by Borrower and shall be added to the  unpaid principal balance of the Loan.  (b) Notwithstanding anything to the contrary contained in this Agreement and without  relieving Borrower of any obligation to pay the same, Lender shall have no obligation to make any  Additional Advance with respect to Interest and Carry Costs as set forth in this Section 2.1.9 unless each  of the conditions precedent to an Additional Advance set forth in Sections 2.1.6(a), (c), (d), (h), (i), (k),  (m), (n), (o), (p), (q), (r), (s), (t), (u) and (w) have been satisfied. In addition, with respect to any Additional  Advance disbursed in accordance with the foregoing and disbursed to Borrower for payments of Cash  Expenses and/or Approved Extraordinary Expenses, in addition to any other requirements set forth in this  Agreement, Borrower shall also provide to Lender an Officer’s Certificate (i) certifying that such Additional  Advance (or a portion thereof) are to be used for the payment of Cash Expenses or Approved Extraordinary  Expenses, as applicable, (ii) including copies of all bills, invoices, receipts and other documentation  requested by Lender to be reimbursed or paid by the Additional Advance (or a portion thereof), and (iii)  stating that all prior Additional Advances requested for the payment of Costs have been spent on Cash  Expenses and/or Approved Extraordinary Expenses for which such Additional Advances were made. No  such Additional Advance shall be deemed to cure or waive any Default or Event of Default that may then  exist. The authorization hereby granted shall be irrevocable, and no further direction or authorization from  Borrower shall be necessary for Lender to make any Additional Advance in accordance with this Section  2.1.9. Lender shall not be deemed to be authorized to make an Additional Advance on any Payment Date  with respect to Interest and Carry Costs that are then due and payable that have otherwise been paid by  Borrower when due and payable and nothing contained in this Section 2.1.9 shall be deemed to prevent  Borrower from paying Interest and Carry Costs from its own funds.  (c) Lender agrees that Interest and Carry Costs on any Payment Date shall be paid as  follows: (i) first, pursuant to Section 3.1(b) of the Mortgage Loan Agreement, (ii) second, from the  Mortgage Loan Shortfall Account, (iii) third, from the Mortgage Loan Excess Cash Flow Reserve Account,  (iv) fourth, as (x) an Additional Advance to the extent there are unfunded Loan proceeds available to make  such Additional Advance in accordance with the terms of this Agreement, and (y) a Mortgage Loan  Additional Advance to the extent there are unfunded Mortgage Loan proceeds available to make such  Mortgage Loan Additional Advance in accordance with the terms of the Mortgage Loan Agreement, and  (v) fifth, from a current payment from Borrower as and when such Interest and Carry Costs are due.  (d) If, at any time and from time to time, Lender determines that, without duplication,  the sum (such sum, the “Estimated Interest and Carry Available Amount”) of (i) the then remaining  unadvanced Loan Amount and the then remaining unadvanced Mortgage Loan Amount available for  application toward the payment of Interest and Carry Costs, plus (ii) any funds then on deposit in the  Shortfall Account and any Reserve Account (but only to the extent that the funds then on deposit in the  Reserve Account are allocable for payment of Interest and Carry Costs, and provided that Lender’s access  to such funds is not restricted by (A) Legal Requirements, injunction or other court order, or (B) as a result  of any action, inaction or omission by Borrower, Guarantor or any Affiliate of Borrower or Guarantor),  plus (iii) amounts that are guaranteed pursuant to the Equity Funding Guaranty (provided that no claim is  then being pursued by Lender in respect of any of the Guarantees and Guarantor is not then in default or in  breach of any of its obligations in respect of any of the Guarantees) with respect to Interest and Carry Costs,  as determined by Lender, would be insufficient to fund the estimated Interest and Carry Costs projected to  be payable with respect to the Loan and the Mortgage Loan through the Maturity Date (the “Estimated  

 

-46- 29949910.v4  Interest and Carry Costs”), as determined by Lender in its good faith discretion (the amount by which the  Estimated Interest and Carry Costs exceeds the amount of the Estimated Interest and Carry Available  Amount, the “Interest and Carry Cost Shortfall”), Lender shall require that Borrower deposit cash into  an interest and shortfall reserve account established and maintained at Cash Management Bank by Lender  under the sole dominion and control of Lender (the “Shortfall Account”) in an amount equal to the Interest  and Carry Cost Shortfall. Any Interest and Carry Cost Shortfall payment that Borrower is required to deposit  in accordance with this Section 2.1.9(d) shall be due and payable to Lender not later than five (5) Business  Days after Lender’s delivery to Borrower of written demand for such payment.  Provided that (1) no Event  of Default or Mortgage Loan Event of Default has occurred and is continuing, (2) no Interest and Carry  Cost Shortfall then exists, and (3) all amounts then due and payable to Lender under this Agreement and  the other Loan Documents (including, without limitation, all Reserve Funds required to be deposited by  Borrower in accordance with the terms of this Agreement) have been made, amounts then remaining in the  Shortfall Account (after deducting thereof any amounts applied by Lender in accordance with the terms of  this Agreement) shall be used to pay shortfalls in deposits and/or payments, as applicable, pursuant to  Section 3.1(b), subject to the terms and conditions set forth in this Agreement with respect to Additional  Advances to pay Interest and Carry Costs.  (e) Borrower shall cause Mortgage Borrower to comply in all respects with the terms and provisions set forth in Section 2.1.9(d) of the Mortgage Loan Agreement (such terms and provisions,  collectively, the “Mortgage Shortfall Provisions”). If Mortgage Lender waives any of the Mortgage  Shortfall Provisions, or if the Mortgage Loan is refinanced or paid off in full (without a repayment in full  of the Loan) and any of the Mortgage Shortfall Provisions are not required under the new mortgage loan,  if any, or the Mortgage Shortfall Provisions cease to exist or are reduced, waived or modified in any respect,  then Borrower shall, to the extent any portion of the Debt hereunder remains outstanding, if requested by  Lender, cause any amounts that would have been deposited into the Mortgage Loan Shortfall Account in  accordance with the Mortgage Shortfall Provisions to be paid to and deposited in an account controlled by  Lender as though the applicable Mortgage Shortfall Provisions were incorporated herein, mutatis mutandis,  and all such other Mortgage Shortfall Provisions shall be incorporated herein, mutatis mutandis (the  “Substitute Shortfall Provisions”). In addition, if requested by Lender, Borrower shall execute any  documents to evidence the implementation of the Substitute Shortfall Provisions with Lender so long as the  Substitute Shortfall Provisions are substantially identical to the Mortgage Shortfall Provisions. Lender shall  have the same legal and economic rights and remedies as Mortgage Lender under the Mortgage Shortfall  Provisions, provided that in all events the disbursement and application of funds held in any such account  controlled by Lender shall be substantially identical to that provided in the Mortgage Shortfall Provisions  with respect to the Mortgage Loan Shortfall Account.  2.1.10 Advances for Stored Materials.  Lender shall make disbursements for Stored Materials  to be utilized in connection with the Project, as applicable, in amounts such that the sum of all Additional  Advances and Mortgage Loan Additional Advances on account of all such Stored Materials not yet installed  or incorporated into the Project shall not be in excess of $1,500,000 (“Stored Materials Cap”) in the  aggregate at any one time, it being agreed that once Borrower provides satisfactory evidence to Lender and  Construction Consultant that such applicable Stored Materials have been installed or incorporated into the  Project, such Stored Materials so installed or incorporated into the Project shall no longer count against the  Stored Materials Cap.  The aggregate amount of Additional Advances for Stored Materials shall in no event  at any time exceed the actual Hard Costs incurred by Borrower for such materials as verified by  Construction Consultant pursuant to the provisions of this Agreement. In addition to the foregoing  limitations, Additional Advances on account of Stored Materials shall be subject to the other provisions of  this Agreement and, prior to any Additional Advance for Stored Materials being made, Lender shall have  received the following, in form and substance reasonably satisfactory to Lender:  

 

   -47-  29949910.v4  (a) evidence that the Stored Materials are appropriate for purchase during the then  current stage of construction;  (b) (i) as to any Stored Materials, evidence that such Stored Materials are or will be  securely stored (A) on site at the Property or (B) in a bonded warehouse off-site properly inventoried and  clearly stenciled or otherwise marked to indicate that they are (I) the property of Borrower and (II) the  subject of a security interest by Lender and (ii) with respect to Stored Materials stored off-site in accordance  with the foregoing, an agreement of the owner of such warehouse to permit Lender and/or Construction  Consultant access to the same;  (c) evidence that the Stored Materials have been paid for and are owned by (or upon  payment of the amounts to be disbursed in the applicable Draw Request shall be paid for and owned by)  Borrower free of all liens or claims of the vendor or any third party;  (d) a perfected, first-priority security interest in such Stored Materials is held by  Lender;  (e) as to any Off-Site Materials, evidence reasonably satisfactory to Lender that such  Off-Site Materials are segregated and identified as Borrower’s property;  (f) as to any Unincorporated Materials, Construction Consultant shall have  determined, in a manner reasonably satisfactory to Construction Consultant, that such Unincorporated  Materials are not in excess of such building equipment and materials as would be kept at the Property in  accordance with good construction practice for current installation or incorporation;  (g) evidence reasonably satisfactory to Lender that the Off-Site Materials or  Unincorporated Materials, as the case may be, are insured against casualty, loss and theft for an amount  equal to their replacement costs and Lender is named as an additional insured and loss payee with respect  thereto;  (h) as to any Off-Site Materials, proof of payment reasonably satisfactory to Lender  from the supplier or fabricator of such Off-Site Materials, the cost of which is, in whole or in part, payment  for all amounts covered by any prior Draw Request; and  (i) if required by Lender in its reasonable discretion, a certification by the Architect  or Construction Consultant that it has inspected such Stored Materials and they are in the condition required  under the applicable Trade Contracts.  2.1.11 Loan Balancing and Construction Budget Reallocations.  (a) Loan Balancing.  Taking into account Borrower’s deposits of Deficiency Collateral  with Lender pursuant to Section 2.1.12(b), at all times that any portion of the Debt remains outstanding  until the Project is Completed in accordance with the terms and conditions hereof, no Deficiency shall exist  (the absence of any Deficiency shall be referred to herein as the Loan being “In Balance”), which  determination shall be made by Lender, in Lender’s sole but good faith discretion, after taking into account  any substantiated Cost Savings and any permitted reallocations of the Contingency and shall be made on  both a Line Item by Line Item basis and in the aggregate, and shall be final absent manifest error.  (b) Contingency Line Items.  Provided that no Event of Default has occurred and is  continuing, Borrower may revise the Construction Budget from time to time without the prior written  consent of Lender to move amounts available under the Contingency to other Line Items for Hard Costs or  

 

   -48-  29949910.v4  Soft Costs in the Construction Budget, in the same proportion as the percent of completion of the Project.   Any reallocation in excess of the percent of completion of the Project shall be subject to Lender’s prior  written consent, in Lender’s sole but good faith discretion.  (c) Cost Savings.  If there is a Cost Saving in a particular Line Item of the Construction  Budget and if such Cost Saving is substantiated by evidence reasonably satisfactory to Lender and  Construction Consultant that (i) all costs associated with such Line Item have been paid in full, (ii) all  mechanics lien waivers with respect to such Line Item have been received (to the extent applicable) and  (iii) all mechanics liens associated with such Line Item, if any, have been discharged of record, then  Borrower shall have the right upon Lender’s prior approval, which approval shall not be unreasonably  withheld, conditioned or delayed, to apply such Cost Saving to other Line Items or to the applicable  “Contingency” in the Construction Budget, in each case, at the option of Borrower; provided, however, that  Borrower shall in no event or under any circumstances have the right to:  (i) reallocate any portion of the Interest and Carry Cost Line Item prior to  Completion of the Project; or  (ii) reallocate any savings in any Line Item for Hard Costs to a Soft Costs Line  Item.  (d) Determination of Cost Savings.  For the purposes hereof, “Cost Saving” shall  mean, if the component of the construction of the Project (other than Interest and Carry Costs with respect  to the Loan) which is the subject of a Hard Cost Line Item shall be reasonably determined by Lender and  Construction Consultant to have been completed without the expenditure of the entire amount allocated in  the Construction Budget to such Hard Cost Line Item, and, subject to Borrower’s right to contest in  accordance with Section 5.1.2(b), all Trade Contractors have been paid in full or have an agreed upon final  settlement amount for work performed and materials provided with respect to the component of the  construction of the Project which is the subject of such Hard Cost Line Item, and all applicable mechanics’  lien waivers with respect to such component have been received, the difference between the amount of such  Hard Cost Line Item in the Construction Budget and the amount so expended for such Hard Cost Line Item.  (e) New Line Item.  Borrower shall not be permitted to create any new Line Items  without Lender’s prior written consent, not to be unreasonably withheld, conditioned or delayed.  2.1.12 Loan Balancing and Deficiency.  (a) Lender shall not be required to make an Additional Advance pursuant to the  provisions of this Agreement or any of the other Loan Documents for more than the aggregate amount of  the Line Items in the Construction Budget or if the Loan is otherwise not In Balance, unless Cost Savings  from other Line Items have previously been applied in accordance with Section 2.1.11(c) or all or a portion  of the Contingency has been reallocated to such Line Item in accordance with Section 2.1.11(b) hereof or  any of the actions set forth in Section 2.1.12(b) below are taken (which reallocation may be requested within  seven (7) Business Days prior to the delivery of any Draw Request).  (b) If Lender shall determine that a Deficiency exists, Lender shall deliver written  notice of such determination to Borrower and Lender shall not be obligated to make any Additional  Advances under this Agreement or any of the other Loan Documents until the Loan is In Balance as  hereinafter set forth.  Within ten (10) Business Days of receipt of such notice of determination, Borrower  shall take the following actions, individually or in combination:  

 

   -49-  29949910.v4  (i) subject to Sections 2.1.11(b) and Section 2.1.11(c), apply Cost Savings  and/or any permitted reallocation pursuant to Section 2.1.11 hereof such that the aggregate  sum of the Deficiency is reduced to zero; or  (ii) deposit cash (the “Deficiency Collateral”) into the Mortgage Loan  Deficiency Account in an amount such that the amount on deposit in the Deficiency  Account (following any application of any Cost Savings and/or any Contingency to the  Deficiency in accordance with the terms and conditions hereof, if any), shall be sufficient  to reduce the aggregate sum of the Deficiency to zero.  (c) If Borrower deposits the Deficiency Collateral with Lender, such deposit shall be  held in the Deficiency Account, and all interest earned thereon shall become part of the Deficiency  Collateral. The Deficiency Collateral shall first be exhausted (in accordance with the terms hereof) before  any further Additional Advances shall be made and Lender shall have no obligation to make Additional  Advances when the Loan is not In Balance.  (d) Borrower shall have no right to any Deficiency Collateral held by Lender, except  as described in this Section 2.1.12, and, until expended or applied as provided herein, such Deficiency  Collateral held by Lender shall constitute additional security for the Debt.  So long as no Event of Default  has occurred and is continuing, any amounts held by Lender as Deficiency Collateral shall be drawn and  advanced to pay costs for Approved Project Expenditures in the same manner as if such amounts were  Additional Advances (it being understood that the condition that Mortgage Lender has made a Mortgage  Loan Additional Advance shall be inapplicable (and no Additional Advance shall be made hereunder) so  long as funds from the Deficiency Account are being utilized to pay 100% of any Approved Project  Expenditures).  (e) If Master Tenant is required to deposit with Mortgage Borrower any amount  pursuant to Section 1.1.2.1 of the Master Lease, then Borrower shall cause Mortgage Borrower to direct  Master Tenant (subject to the rights of Mortgage Lender under the Mortgage Loan Agreement) to deposit  such amount with Lender. Any amount deposited with Lender pursuant to this Section 2.1.12(e) shall be  held in the Deficiency Account and shall be applied as Deficiency Collateral in accordance with the terms  and conditions set forth in this Agreement.  (f) Borrower shall cause Mortgage Borrower to comply in all respects with the terms  and provisions set forth in Sections 2.1.12(b) through (d) of the Mortgage Loan Agreement (such terms and  provisions, collectively, the “Mortgage Deficiency Provisions”). If Mortgage Lender waives any of the  Mortgage Deficiency Provisions, or if the Mortgage Loan is refinanced or paid off in full (without a  repayment in full of the Loan) and any of the Mortgage Deficiency Provisions are not required under the  new mortgage loan, if any, or the Mortgage Deficiency Provisions cease to exist or are reduced, waived or  modified in any respect, then Borrower shall, to the extent any portion of the Debt hereunder remains  outstanding, if requested by Lender, cause any amounts that would have been deposited into the Mortgage  Loan Deficiency Account in accordance with the Mortgage Deficiency Provisions to be paid to and  deposited in an account controlled by Lender as though the applicable Mortgage Deficiency Provisions  were incorporated herein, mutatis mutandis, and all such other Mortgage Deficiency Provisions shall be  incorporated herein, mutatis mutandis (the “Substitute Deficiency Provisions”). In addition, if requested  by Lender, Borrower shall execute any documents to evidence the implementation of the Substitute  Deficiency Provisions with Lender so long as the Substitute Deficiency Provisions are substantially  identical to the Mortgage Deficiency Provisions. Lender shall have the same legal and economic rights and  remedies as Mortgage Lender under the Mortgage Deficiency Provisions, provided that in all events the  disbursement and application of funds held in any such account controlled by Lender shall be substantially  

 

-50- 29949910.v4  identical to that provided in the Mortgage Deficiency Provisions with respect to the Mortgage Loan  Deficiency Account.  2.1.13 Direct Advances.  Lender shall have the right (but not the obligation) to make any or all  Additional Advances directly to General Contractor, any Trade Contractor that has a direct agreement with  Borrower or any other Person to whom payment is due from Borrower, provided that no direct Additional  Advance shall be made for any costs being disputed by Borrower pursuant to Section 5.1.2(b) hereof. If an  Event of Default is continuing, Additional Advances may be made by deposit in a bank account to be  designated by Lender which may be controlled by General Contractor, such Trade Contractor or by such  other Person, in each case individually or jointly with Lender, as Lender may elect. Such direct Additional  Advances may be made by check payable to the Person to whom an Additional Advance is to be made in  accordance with this Section 2.1.13. The execution of this Agreement by Borrower shall, and hereby does,  constitute an irrevocable direction and authorization to Lender to so disburse Additional Advances as  described in, and in accordance with, this Section 2.1.13. No further direction or authorization from  Borrower shall be necessary or required for such direct Additional Advances and all such Additional  Advances shall satisfy pro tanto the obligations of Lender hereunder and shall be secured by the Loan  Documents as fully as if made directly to Borrower, regardless of the disposition thereof by General  Contractor, any Trade Contractor or any other Person.  2.1.14 Partial Advances.  If any or all conditions precedent to making an Additional Advance  have not been satisfied on the date requested for such Additional Advance, Lender may, at its option in its  sole and absolute discretion, waive so many of such conditions precedent as Lender may elect. Lender may,  however, without waiving any of its rights or remedies, disburse that portion, if any, of the requested  Additional Advance for which all of the conditions precedent have been satisfied.  Notwithstanding the  foregoing, nothing set forth in this Section 2.1.14 shall require Lender to fund all or any portion of an  Additional Advance unless all of the conditions precedent have been satisfied  2.1.15 Retainage.  The amount of Loan proceeds disbursed on account of any Additional  Advance or portion thereof allocable to any Hard Costs shall be reduced by the Mortgage Funding Share  of the portion of the Retainage to be paid out of Additional Advances in accordance with this Agreement  and applicable to such Hard Costs. No final Retainage amounts shall be released with respect to a particular  Trade Contract prior to the date of final completion of all of the work of the Trade Contractor under such  Trade Contract and the expiration of the lien period for an individual subcontract (unless Borrower provides  an unconditional lien waiver from the applicable Trade Contractor satisfactory to Lender, in which event  such final Retainage shall be funded in connection with the Draw Request therefor). In no event shall Lender  be required to disburse any funds on account of Retainage prior to the time such sums are payable pursuant  to the applicable Trade Contract.  2.1.16 Costs and Additional Advances. Additional Advances shall be made on the basis of (a)  the Line Items for Hard Costs and Soft Costs specified in the Construction Budget or items not detailed in  the Construction Budget but which are funded by the Contingency, subject to the provisions of Section  2.1.11 and Section 2.1.12, and (b) the documented cost of work in place and performed and services  provided (without reduction for any retainage permitted under any applicable Trade Contract, but subject  to the Retainage required under this Agreement), or the extent provided in Section 2.1.10, Unincorporated  Materials or Off-Site Materials or deposits made, in each case, in accordance with this Agreement; provided  that Lender shall at no time be obligated to make an Additional Advance for work performed, materials  furnished or services provided under Construction Contracts that are not fully executed and delivered.  2.1.17 Conditions Precedent.  Lender shall not be obligated to make any Additional Advance  unless Lender is reasonably satisfied that the applicable conditions precedent to the Additional Advance as  set forth in this Section 2.1 have been satisfied by Borrower as of the applicable Advance Date. Without  

 

   -51-  29949910.v4  limiting the foregoing, the requesting of an Additional Advance shall constitute, without necessity of  specifically containing a written statement to such effect, a confirmation, representation and warranty by  Borrower to Lender that all of the applicable conditions to be satisfied in connection with the making of  such Additional Advance have been satisfied (unless waived in writing by Lender) and that all of the  representations and warranties of Borrower and Guarantor set forth in the Loan Documents are true and  correct as if made on (and with respect to facts and circumstances existing as of) the date on which such  Additional Advance is made, except as otherwise permitted by the terms and conditions hereof, and except  for any changes in facts or circumstances occurring since the Closing Date that do not constitute a Default  or Event of Default or were not caused by the occurrence of a Default or Event of Default and, in any event,  do not result in a Material Adverse Effect.  2.1.18 Separate Contracts for Additional Advances; Several Obligations.  Borrower  covenants and agrees not to take any action whatsoever, at law or in equity (including the assertion of any  right of rescission, set-off, counterclaim or defense) against any Lender on account of such Lender failing  to fund any portion of the Additional Advance in violation of this Agreement. In the event Borrower  breaches the foregoing covenant, Borrower shall indemnify, defend and hold each Lender harmless from  any and all Losses incurred by such Lender in any way related to such breach (which agreement to  indemnify such Lender shall be a personal liability of Borrower and not subject to Article VIII).  Borrower  acknowledges and agrees that (a) no Lender shall have any obligation to fund any other Lender’s portion  of any Additional Advance, and that such obligation shall be the several, sole and exclusive obligation of  such Lender, and (b) each Lender’s obligations to make its portion of each Additional Advance in  accordance with Section 2.1 are a several obligation of such Lender, and an independent contract made by  and between such Lender and Borrower separate and apart from any other obligation of any other Lender  under the other provisions of the Loan Documents, and that such Lender shall at no time be required to  make Additional Advances in an amount that exceeds such Lender’s commitment (which shall be equal to  a percentage of the Loan Amount that is determined by dividing the portion of the Loan Amount evidenced  by the Note executed in favor of such Lender by the total Loan Amount).  The obligations of the Borrower  under this Agreement and the other Loan Documents shall not be reduced, discharged or released because  or by reason of any existing or future offset, claim or defense of the Borrower, or any other party, against  any Lender by reason of such Lender’s failure to make any Additional Advance.  Borrower agrees that it  shall not assert (and shall not have) any defense (including the assertion of any right of rescission, set-off,  counterclaim or defense) to the payment of Debt owed to any Lender in the event such Lender breaches  any obligation to make an Additional Advance that it is required to make hereunder.  The making of any  Additional Advance by any Lender at the time when an Event of Default exists shall not be deemed a waiver  or cure by such Lender of that Event of Default, nor shall such Lender’s rights and remedies be prejudiced  in any manner thereby.  Nothing in this Section 2.1.18 shall be deemed to be a release of any claim that  Borrower may have against any Lender for its failure to perform its obligations under this Agreement and  the other Loan Documents.  2.1.19 Conditions Precedent to Completion.  The Project shall not be deemed Completed unless  and until the following conditions are satisfied:  (a) Approval by Construction Consultant.  Lender and Construction Consultant shall  have received evidence reasonably acceptable to them, or otherwise be reasonably satisfied, that  Completion of the Project has occurred.  (b) Final Lien Waivers and Release/Payment Receipts.  Subject to Borrower’s right to  contest pursuant to Section 5.1.2(b) hereof, Lender shall have received from Borrower final unconditional  Lien waivers and release/payment receipts from General Contractor and all Trade Contractors party to a  Trade Contract in the form required by California Civil Code Section 8138 (or any successor thereto).  

 

-52- 29949910.v4  (c) Certificates of Occupancy.  Lender shall have received a copy of the certificate of occupancy (or an equivalent document) and all other material Operating Permits for the Project.  (d) Final “As-Built” Plans and Specifications.  Borrower shall have delivered to Lender the final “as-built” Plans and Specifications for the Project.  (e) Final Survey.  Borrower shall have delivered to Lender the final survey of the Property upon Completion by a surveyor licensed in the State and reasonably satisfactory to Lender and the  Title Company, and that satisfies Lender’s survey requirements.  (f) Certificate of Architect.  Lender shall have received a certificate of Completion for the Project certified by Architect and confirmed by Construction Consultant, in its good faith determination,  which confirms that Completion has occurred substantially in accordance with the Plans and Specifications  and all Legal Requirements, including all Punchlist Items with respect thereto.  (g) Title Date Down. The requirements of Section 2.1.6(h) have been satisfied. (h) Payment of Fees.  Lender shall have received payment for any and all reasonable, actual, out-of-pocket fees then due and payable by Borrower to Lender pursuant to the Loan Documents,  including, but not limited to, the reasonable, fees and expenses of Construction Consultant and reasonable,  fees, costs and expenses of outside legal counsel of Lender (in each case, to the extent then due and payable).  (i) Certificate of Borrower. Borrower shall have furnished to Lender a certificate from Borrower, currently dated, certifying that:  (i) no written notices from any Governmental Authority of any  claimed violations of applicable Legal Requirements arising from the development or operation of the  Project which have not been cured were served upon Borrower or any contractor or subcontractor or their  respective agents or representatives and (ii) there are no circumstances which could give rise to the issuance  of any such notice of claimed violation.  (j) Fixtures, Equipment and Inventory. All fixtures, furnishings, equipment, all inventory and all other property contemplated under the Construction Budget and the Plans and  Specifications to be incorporated into or installed in the Project shall have been, to the extent required for  the Completion of the Project in accordance with the terms hereof, incorporated or installed free and clear  of all liens and security interests other than the Permitted Encumbrances.  (k) UCC Searches. Borrower shall have furnished Lender with current searches of all UCC financing statements filed with the Secretary of State of Delaware and the State against Borrower or  Mortgage Borrower as debtor, showing that no UCC financing statements are filed or recorded against  Borrower or Mortgage in which the collateral is described as any of the collateral for the Loan or the  Mortgage Loan, including any fixtures, furnishings and equipment or other personal property located on  the Property or used in connection with the Property, other than filings (i) pursuant to the Loan Documents  or the Mortgage Loan Documents or (ii) with respect to Permitted Equipment Leases, provided that such  UCC financing statements with respect to Permitted Equipment Leases have been filed after the Closing  Date and set forth a description of collateral that is limited solely to the collateral under the applicable  Permitted Equipment Lease.  SECTION 2.2. Interest Rate.  2.2.1 Interest Calculation.  Subject to Section 2.2.2 and Section 2.2.6, interest on the  Outstanding Principal Balance shall accrue, from the Closing Date until the Debt is repaid in full, at the  Interest Rate, and during the continuance of an Event of Default, at the Default Rate.  Interest on the  

 

   -53-  29949910.v4  Outstanding Principal Balance shall be calculated by multiplying (a) the actual number of days elapsed in  the period for which the calculation is being made by (b) a daily rate based on the Interest Rate (or the  Default Rate, if applicable) and a three hundred sixty (360) day year, by (c) the Outstanding Principal  Balance. The Interest Rate applicable to an Interest Accrual Period shall be determined by Lender as set  forth herein; provided, however, that Term SOFR for the Interest Accrual Period commencing on the  Closing Date through and including July 9, 2022 shall be Term SOFR on the Closing Date, which the parties  agree is Closing Date Term SOFR.  In connection with the use or administration of Term SOFR, Lender  will have the right to make Conforming Changes from time to time and, notwithstanding anything to the  contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes  will become effective without any further action or consent of Borrower. Lender will promptly notify  Borrower of the effectiveness of any Conforming Changes in connection with the use or administration of  Term SOFR.  2.2.2 Usury Savings.  This Agreement, the Note and the other Loan Documents are subject to  the express condition that at no time shall Borrower be obligated or required to pay interest on the  Outstanding Principal Balance at a rate which could subject Lender to either civil or criminal liability as a  result of being in excess of the Maximum Legal Rate.  If, by the terms of this Agreement or the other Loan  Documents, Borrower is at any time required or obligated to pay interest at a rate in excess of the Maximum  Legal Rate, the Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately  reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall  be deemed to have been payments in reduction of principal and not on account of the interest due hereunder.   All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under  the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread  throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on  account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and  applicable to the Loan for so long as the Loan is outstanding.  2.2.3 Taxes.  (a) Payment of Taxes.  Any and all payments by or on account of any obligation of  Borrower under any Loan Document shall be made free and clear of and without deduction or withholding  for any Taxes, except as required by applicable Legal Requirements. If any Legal Requirement requires the  deduction or withholding of any Tax from any such payment, then Borrower shall be entitled to make such  deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant  Governmental Authority in accordance with applicable Legal Requirements and, if such Tax is an  Indemnified Tax, the sum payable by Borrower shall be increased as necessary so that after such deduction  or withholding for Indemnified Taxes has been made (including such deductions and withholdings  applicable to additional sums payable under this Section 2.2.3(a)) the applicable Lender receives an amount  equal to the sum it would have received had no such deduction or withholding for Indemnified Taxes been  made. Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable  Legal Requirements any Other Taxes. Borrower shall pay to each Lender within ten (10) days after demand  therefor, the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on  or attributable to amounts payable under this Section 2.2.3(a)) payable or paid by such Lender or required  to be withheld or deducted from a payment to such Lender and any expenses arising therefrom or with  respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the  relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to  Borrower by a Lender shall be conclusive absent manifest error. As soon as practicable after any payment  of Taxes by Borrower to a Governmental Authority pursuant to this Section 2.2.3(a), Borrower shall deliver  to Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing  such payment, a copy of the return reporting such payment or other evidence of such payment reasonably  satisfactory to Lender. For purposes of this Section 2.2.3, “Legal Requirements” shall include FATCA.  

 

   -54-  29949910.v4  (b) Status of Lender.  (i) Any Lender that is entitled to an exemption from or reduction of  withholding tax with respect to payments made under any Loan Document shall deliver to  Borrower, (A) prior to becoming a party to this agreement or obtaining any interest in the  Loan, (B) at the time or times reasonably requested by Borrower, and (C) if any form or  certification previously delivered expires or becomes obsolete or inaccurate in any respect,  such properly completed and executed documentation reasonably requested by Borrower  as will permit such payments to be made without withholding or at a reduced rate of  withholding.  In addition, if reasonably requested by Borrower, any Lender shall deliver  such other documentation prescribed by applicable Legal Requirements (or reasonably  requested by Borrower) as will enable Borrower to determine whether or not such Lender  is subject to backup withholding or information reporting requirements.  (ii) Without limiting the generality of the foregoing, in the event that Borrower  is a U.S. Person,  (A) any Lender that is a U.S. Person shall deliver to Borrower and on  or about the date on which such Lender becomes a Lender under this Agreement  (and from time to time thereafter upon the reasonable request of Borrower),  executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S.  federal backup withholding tax;  (B) any Foreign Lender shall, to the extent it is legally entitled to do  so, deliver to Borrower (in such number of copies as shall be reasonably requested  by Borrower) on or about the date on which such Foreign Lender becomes a Lender  under this Agreement (and from time to time thereafter upon the reasonable request  of Borrower), whichever of the following is applicable:  1. in the case of a Foreign Lender claiming the benefits of  an income tax treaty to which the United States is a party (x) with respect  to payments of interest under any Loan Document, executed copies of IRS  Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from,  or reduction of, U.S. federal withholding Tax pursuant to the “interest”  article of such tax treaty and (y) with respect to any other applicable  payments under any Loan Document, IRS Form W-8BEN or IRS Form  W-8BEN-E establishing an exemption from, or reduction of, U.S. federal  withholding Tax pursuant to the “business profits” or “other income”  article of such tax treaty;  2. executed copies of IRS Form W-8ECI;  3. in the case of a Foreign Lender claiming the benefits of  the exemption for portfolio interest under Section 881(c) of the Code, (x)  a certificate substantially in the form of Exhibit K-1 attached hereto to the  effect that such Foreign Lender is not a “bank” within the meaning of  Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Borrower  within the meaning of Section 871(h)(3)(B) of the Code, or a “controlled  foreign corporation” related to Borrower as described in Section  881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y)  executed copies of IRS Form W-8BEN or IRS Form W 8BEN-E; or  

 

   -55-  29949910.v4  4. to the extent a Foreign Lender is not the beneficial owner,  executed copies of IRS Form W-8IMY, accompanied by IRS Form W- 8ECI, IRS Form W-8BEN, IRS Form W 8BEN-E, a U.S. Tax Compliance  Certificate substantially in the form of Exhibit K-2 or Exhibit K-3, each  attached hereto, IRS Form W-9, and/or other certification documents from  each beneficial owner, as applicable; provided that if the Foreign Lender  is a partnership and one or more direct or indirect partners of such Foreign  Lender are claiming the portfolio interest exemption, such Foreign Lender  may provide a U.S. Tax Compliance Certificate substantially in the form  of Exhibit K-4 attached hereto on behalf of each such direct and indirect  partner;  (C) any Foreign Lender shall, to the extent it is legally entitled to do  so, deliver to Borrower (in such number of copies as shall be reasonably requested  by the recipient) on or about the date on which such Foreign Lender becomes a  Lender under this Agreement (and from time to time thereafter upon the reasonable  request of Borrower), executed copies of any other form prescribed by applicable  law as a basis for claiming exemption from or a reduction in U.S. federal  withholding Tax, duly completed, together with such supplementary  documentation as may be prescribed by applicable law to permit Borrower to  determine the withholding or deduction required to be made; and  (D) if a payment made to a Lender under any Loan Document would  be subject to U.S. federal withholding Tax imposed by FATCA if such Lender  were to fail to comply with the applicable reporting requirements of FATCA  (including those contained in Section 1471(b) or 1472(b) of the Code, as  applicable), such Lender shall deliver to Borrower at the time or times prescribed  by law and at such time or times reasonably requested by Borrower such  documentation prescribed by applicable law (including as prescribed by Section  1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably  requested by Borrower as may be necessary for Borrower to comply with their  obligations under FATCA and to determine that such Lender has complied with  such Lender’s obligations under FATCA or to determine the amount to deduct and  withhold from such payment (and solely for purposes of this clause (D), “FATCA”  shall include any amendments made to FATCA after the date of this Agreement).  Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or  inaccurate in any respect, it shall update such form or certification or promptly notify Borrower in writing  of its legal inability to do so.  (c) Treatment of Certain Refunds.  If any party determines, in its sole discretion  exercised in good faith, that it has received a refund in respect of any Taxes as to which it has been  indemnified pursuant to this Section 2.2.3 (including by the payment of additional amounts pursuant to this  Section 2.2.3(c)), it shall pay to the indemnifying party an amount equal to such refund (but only to the  extent of indemnity payments made under this Section 2.2.3(c) with respect to the Taxes giving rise to such  refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest  (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such  indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the  amount paid over pursuant to this Section 2.2.3(c) (plus any penalties, interest or other charges imposed by  the relevant Governmental Authority) in the event that such indemnified party is required to repay such  refund to such Governmental Authority.  Notwithstanding anything to the contrary in this Section 2.2.3(c),  

 

   -56-  29949910.v4  in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to  this Section 2.2.3(c) the payment of which would place the indemnified party in a less favorable net after- Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving  rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments  or additional amounts with respect to such Tax had never been paid.  This Section 2.2.3(c) shall not be  construed to require any indemnified party to make available its tax returns (or any other information  relating to its taxes that it deems confidential) to the indemnifying party or any other Person.  (d) Survival.  Each party’s obligations under this Section 2.2.3 shall survive any  assignment of rights by, or the replacement of, a Lender, the termination of the commitments to make  Additional Advances and the repayment, satisfaction or discharge of all obligations under any Loan  Document.  (e) Designation of a Different Lending Office.  If any Lender requests compensation  under Section 2.2.5, or requires Borrower to pay any Indemnified Taxes or additional amounts to any  Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.2.3(a), then  such Lender shall (at the request of Borrower) use reasonable efforts to designate a different lending office  for funding or booking its Loan hereunder or to assign its rights and obligations hereunder to another of its  offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would  eliminate or reduce amounts payable pursuant to such Sections 2.2.3 or 2.2.5, as the case may be, in the  future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise  be disadvantageous to such Lender. Borrower hereby agrees to pay all out-of-pocket costs and expenses  incurred by any Lender in connection with any such designation or assignment.  2.2.4 Breakage Indemnity.  Borrower shall indemnify Lender against any Losses which Lender  may actually sustain or incur in liquidating or redeploying deposits from third parties acquired to effect or  maintain the Loan or any part thereof as a consequence of (a) any default by Borrower in payment of the  principal of or interest on a Term SOFR Loan, an Alternate Rate Loan or a Prime Rate Loan, as applicable,  including, without limitation, any such loss or expense arising from interest or fees payable by Lender to  lenders of funds obtained by it in order to maintain a Term SOFR Loan, an Alternate Rate Loan or a Prime  Rate Loan, as applicable, hereunder, (b) any prepayment (whether voluntary or mandatory) of the Term  SOFR Loan, an Alternate Rate Loan or a Prime Rate Loan, as applicable, on a day that is not the last day  of an Interest Accrual Period, including, without limitation, such loss or expense arising from interest or  fees payable by Lender to lenders of funds obtained by it in order to maintain the Term SOFR Loan, an  Alternate Rate Loan or a Prime Rate Loan, as applicable, hereunder, and (c) the conversion (for any reason  whatsoever, whether voluntary or involuntary) of the Applicable Rate Index from Term SOFR to an  Alternate Rate Index or the Prime Rate Index (or any other conversion of the Interest Rate) with respect to  any portion of the Loan Amount on a date other than the last day of an Interest Accrual Period; provided,  however, Borrower shall not indemnify Lender from any Losses arising from Lender’s willful misconduct  or gross negligence. Lender shall deliver to Borrower a statement for any such sums which it is entitled to  receive pursuant to this Section 2.2.4, which statement shall be binding and conclusive absent manifest  error.  Borrower’s obligations under this Section 2.2.4 are in addition to Borrower’s obligations to pay any  Prepayment Premium applicable to a payment or prepayment of the Outstanding Principal Balance. This  provision shall survive payment of the Note in full and the satisfaction of all other obligations of Borrower  under this Agreement and the other Loan Documents.  2.2.5 Legal Requirements.  (a) If any Change in Law shall (i) impose, modify or deem applicable any reserve,  special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with  or for the account of, or credit extended or participated in by, advances or loans by, or other credit extended  

 

   -57-  29949910.v4  by, or any other acquisition of funds by, any office of Lender which is not otherwise included in the  determination of Term SOFR, the Alternate Rate Index or the Prime Rate Index hereunder, (ii) have the  effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder to a  level below that which Lender could have achieved but for such adoption, change or compliance (taking  into consideration Lender’s policies with respect to capital adequacy) by any amount deemed by Lender to  be material, (iii) subject any Lender to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described  in clauses (b) through (d) of the definition of Excluded Taxes, and (C) Connection Income Taxes) on its  loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other  liabilities or capital attributable thereto, or (iv) impose on any Lender any other condition, cost or expense  (other than Taxes) affecting this Agreement or Loan made by such Lender or participation therein, and the  result of any of the foregoing shall be to increase the cost to such Lender of making, converting to,  continuing or maintaining the Loan or of maintaining its obligation to make any the Loan, or to reduce the  amount of any sum received or receivable by such Lender (whether of principal, interest or any other  amount) then, in any such case, upon written request of such Lender and delivery of the certificate described  in Section 2.25(c) below, subject to Section 2.25(d) below, Borrower will pay to such Lender such  additional amount or amounts as will compensate such Lender for such additional costs incurred or  reduction suffered (such increases in cost and reductions in amounts receivable hereinafter collectively, the  “Increased Costs”).  (b) If any Lender determines that any Change in Law affecting such Lender or any  lending office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity  requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the  capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loan made  by such Lender, to a level below that which such Lender or such Lender’s holding company could have  achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of  such Lender’s holding company with respect to capital adequacy), then from time to time Borrower will  pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s  holding company for any such reduction suffered.  (c) A certificate of a Lender setting forth the amount or amounts necessary to  compensate such Lender or its holding company, as the case may be, as specified in Section 2.2.5(a) or (b)  above and delivered to Borrower shall be conclusive absent manifest error.  Borrower shall pay such Lender  the amount shown as due on any such certificate within ten (10) days after receipt thereof.  (d) Failure or delay on the part of any Lender to demand compensation pursuant to  this Section 2.2.5 shall not constitute a waiver of such Lender’s right to demand such compensation;  provided that Borrower shall not be required to compensate a Lender pursuant to this Section 2.2.5 for any  Increased Costs incurred or reductions suffered more than twelve (12) months prior to the date that such  Lender notifies Borrower of the Change in Law giving rise to such Increased Costs or reductions, and of  such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to  such Increased Costs or reductions is retroactive, then the twelve-month period referred to above shall be  extended to include the period of retroactive effect thereof).  2.2.6 Rate Conversion.  (a) In the event that Lender shall have determined in its sole but good faith discretion  that Term SOFR cannot be determined as provided in the definition of Term SOFR as set forth herein or  Lender shall have reasonably determined that Term SOFR has been succeeded by an Alternate Rate Index,  then Lender shall forthwith give notice thereof by telephone of such fact, confirmed in writing, to Borrower  at least one (1) Business Day prior to the Determination Date.  If such notice is given, the Loan shall be  converted, from and after the first day of the next succeeding Interest Accrual Period, (i) to an Alternate  

 

   -58-  29949910.v4  Rate Loan bearing interest based on the Alternate Rate in effect on the related Determination Date provided  that (1) Lender has determined in its sole but good faith discretion that Term SOFR has been succeeded by  the Alternate Rate Index and (2) Lender has received evidence satisfactory to Lender that conversion to an  Alternate Rate Loan does not violate ERISA or (ii) at Lender’s option, to a Prime Rate Loan bearing interest  based on the Prime Rate in effect on the related Determination Date.  Notwithstanding any provision of this  Agreement to the contrary, in no event shall (x) Borrower have the right to convert (i) a Term SOFR Rate  Loan to a Prime Rate Loan or an Alternate Rate Loan, (ii) an Alternate Rate Loan to a Term SOFR Rate  Loan or a Prime Rate Loan, or (iii) a Prime Rate Loan to a Term SOFR Rate Loan or an Alternate Rate  Loan, (y) the Prime Rate be less than the Minimum Rate or the Alternate Rate be less than the Minimum  Rate.  (b) If, pursuant to the terms of Section 2.2.6(b) above, the Loan has been converted to  a Prime Rate Loan but thereafter either (i) Term SOFR can again be determined as provided in the definition  of Term SOFR as set forth herein or (ii) Lender has determined in good faith (which determination shall be  conclusive and binding upon Borrower absent manifest error) that Term SOFR has been succeeded by an  Alternate Rate Index and the conditions set forth in Section 2.2.6(b) above are satisfied, Lender shall give  notice thereof to Borrower and convert a Prime Rate Loan to a Term SOFR Rate Loan or to an Alternate  Rate Loan, as applicable, by delivering to Borrower notice of such conversion no later than 2:00 p.m. (New  York City time), one (1) Business Day prior to the next succeeding Determination Date.  If such notice is  given, the Loan shall be converted, from and after the first day of the next succeeding Interest Accrual  Period, to a Term SOFR Rate Loan or an Alternate Rate Loan, as applicable, bearing interest based on Term  SOFR or the Alternate Rate Index, as applicable, in effect on the related Determination Date.  (c) If any requirement of law or any change therein or in the interpretation or  application thereof, shall hereafter make it unlawful for Lenders to make or maintain a Term SOFR Rate  Loan or an Alternate Rate Loan as contemplated hereunder, (i) the obligation of Lender hereunder to make  a Term SOFR Rate Loan or an Alternate Rate Loan or to convert a Prime Rate Loan to a Term SOFR Rate  Loan or an Alternate Rate Loan shall be canceled forthwith and (ii) any outstanding Term SOFR Rate Loan  or Alternate Rate Loan shall be converted automatically to a Prime Rate Loan on the first day of the next  succeeding Interest Accrual Period or within such earlier period as required by law.  2.2.7 Interest Rate Cap Agreement.  (a) On or prior to the Closing Date, Borrower shall enter into an agreement with (or  guaranteed by) an Acceptable Counterparty, which agreement (an “Interest Rate Cap Agreement”) shall  (i) be in form and substance reasonably satisfactory to Lender, (ii) contain the agreement of such Acceptable  Counterparty to make payments to Borrower in the event the Applicable Rate Index exceeds a strike rate  of no greater than three percent (3.00%), (iii) require payments based on a notional amount at least equal  to the Loan Amount, (iv) not terminate prior to the date that is twenty-four (24) months following the  Closing Date, and (v) require payments to be made on the date that is three (3) Business Days prior to the  applicable Payment Date.  Borrower shall collaterally assign to Lender, pursuant to an assignment  agreement in form and substance acceptable to Lender (the “Assignment of Interest Rate Cap  Agreement”), all of its right, title and interest (but not its obligations) to receive any and all payments under  any Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart of such Interest Rate  Cap Agreement (which shall, by its terms, authorize the collateral assignment to Lender and require that  payments be deposited directly into the account designated by Lender) and shall notify the Acceptable  Counterparty of such assignment and obtain from such counterparty a confirmation of the assignment of  such Interest Rate Cap Agreement to Lender in form and content acceptable to Lender.  (b) Not later than the date that is sixty (60) days prior to the date on which the initial  Interest Rate Cap Agreement described in Section 2.2.7(a) terminates, Borrower shall enter into an  

 

   -59-  29949910.v4  agreement with (or guaranteed by) an Acceptable Counterparty, which agreement (a “Replacement  Interest Rate Cap Agreement”) shall (i) be in form and substance reasonably satisfactory to Lender, (ii)  contain the agreement of such Acceptable Counterparty to make payments to Borrower in the event the  Applicable Rate Index exceeds a strike rate of no greater than three percent (3.00%), (iii) require payments  based on a notional amount at least equal to the Loan Amount, (iv) be effective commencing immediately  upon the termination of such initial Interest Rate Cap Agreement and not terminate prior to the Maturity  Date, and (v) require payments to be made on the date that is three (3) Business Days prior to the applicable  Payment Date.  Borrower shall collaterally assign to Lender, pursuant to an Assignment of Interest Rate  Cap Agreement, all of its right, title and interest (but not its obligations) to receive any and all payments  under any Replacement Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart  of such Replacement Interest Rate Cap Agreement (which shall, by its terms, authorize the collateral  assignment to Lender and require that payments be deposited directly into the account designated by  Lender) and shall notify the Acceptable Counterparty of such assignment and obtain from such counterparty  a confirmation of the assignment of such Replacement Interest Rate Cap Agreement to Lender in form and  content acceptable to Lender.  (c) Borrower shall comply with all of its obligations under the terms and provisions  of the Interest Rate Cap Agreement. Borrower shall take all actions reasonably requested by Lender to  enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by an Acceptable  Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.  (d) In the event of any downgrade, withdrawal or qualification of the rating of the  counterparty under the Interest Rate Cap Agreement such that such counterparty is a Downgraded  Counterparty, or in the event of any default by an Acceptable Counterparty under the Interest Rate Cap  Agreement, Borrower shall, not later than fifteen (15) days following the receipt by Borrower of notice of  such downgrade, withdrawal, qualification, or default (whether received from Lender, the Acceptable  Counterparty, or otherwise), then Borrower shall replace the Interest Rate Cap Agreement with an Interest  Rate Cap Agreement satisfying the requirements of Section 2.2.7(a) above not later than fifteen (15) days  following the receipt by Borrower of notice of such downgrade (whether received from Lender, the  Acceptable Counterparty, or otherwise).  (e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate  Cap Agreement or fails to maintain the Interest Rate Cap Agreement, in each case, in accordance with the  terms and provisions of this Agreement, Lender may (but shall have no obligation to) purchase the Interest  Rate Cap Agreement and the cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall  be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred  by Lender until such cost is reimbursed by Borrower to Lender.  (f) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and  deliver to Lender, within twenty (20) Business Days following the Closing Date (or, with respect to a  Replacement Interest Rate Cap Agreement or Substitute Interest Rate Cap Agreement, within twenty (20)  Business Days following the effective date of such Replacement Interest Rate Cap Agreement or Substitute  Interest Rate Cap Agreement, as applicable), an opinion from counsel (which counsel may be in-house  counsel for the Acceptable Counterparty) for the Acceptable Counterparty (upon which Lender and its  successors and assigns may rely) which shall provide, in relevant part, that:  (i) the Acceptable Counterparty  is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation  and has the organizational power and authority to execute and deliver, and to perform its obligations under,  the Interest Rate Cap Agreement; (ii) the execution and delivery of the Interest Rate Cap Agreement by the  Acceptable Counterparty, and any other agreement which the Acceptable Counterparty has executed and  delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly  authorized by all necessary action and do not contravene any provision of its certificate of incorporation or  

 

   -60-  29949910.v4  by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding  on or affecting it or its property; (iii) all consents, authorizations and approvals required for the execution  and delivery by the Acceptable Counterparty of the Interest Rate Cap Agreement, and any other agreement  which the Acceptable Counterparty has executed and delivered pursuant thereto, and the performance of its  obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have  been duly complied with, and no other action by, and no notice to or filing with any governmental authority  or regulatory body is required for such execution, delivery or performance; and (iv) the Interest Rate Cap  Agreement, and any other agreement which the Acceptable Counterparty has executed and delivered  pursuant thereto, has been duly executed and delivered by the Acceptable Counterparty and constitutes the  legal, valid and binding obligation of the Acceptable Counterparty, enforceable against the Acceptable  Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws  affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity  (regardless of whether enforcement is sought in a proceeding in equity or at law).  (g) Notwithstanding anything to the contrary contained in this Section 2.2.7 or  elsewhere in this Agreement, in the event a Rate Conversion occurs, then, within ten (10) Business Days  after such Rate Conversion, Borrower shall enter into a Substitute Interest Rate Cap Agreement (and in  connection therewith, but not prior to Borrower taking all the actions described in this Section 2.2.7(g),  Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement), together with,  within five (5) Business Days thereafter, an assignment of interest rate cap agreement with respect to such  Substitute Interest Rate Cap Agreement in form and substance substantially similar to the Assignment of  Interest Rate Cap Agreement delivered in connection with the then-existing Interest Rate Cap Agreement,  together with legal opinions of counsel to the counterparty and Borrower as reasonably required by Lender.  Notwithstanding anything to the contrary set forth in this Section 2.2.7, if, following a Rate Conversion,  Lender determines (which determination will be based on market customs and/or proposals of industry  associations) that a Substitute Interest Rate Cap Agreement is not then generally commercially available  from an Acceptable Counterparty, then, Borrower shall not be required to obtain a Substitute Interest Rate  Cap Agreement but shall instead be required to purchase such other hedging product as reasonably  determined by Lender would afford Lender substantially equivalent protection from increases in the interest  rate, which such alternative shall be satisfactory to Lender in its reasonable discretion.  SECTION 2.3. Extension Option.  2.3.1 Borrower shall have the option to extend the term of the Loan beyond the Initial Maturity  Date (each such option, an “Extension Option”) for two (2) successive one-year terms (the period of each  sun extension, an “Extension Term”) upon satisfaction of each of the following conditions (it being agreed  that, except to the extent expressly provided in this Section 2.3.1, each of the following conditions are  required to be satisfied with respect to Borrower’s exercise of each Extension Option):  (a) Borrower shall have given at least thirty (30) days’ prior written irrevocable notice  (but not more than ninety (90) days’ prior written notice) to Lender of its election to extend the Maturity  Date;  (b) no Default or Event of Default shall have occurred and be continuing on the date  of delivery of the notice referred to in clause (a) above or on the Maturity Date;  (c) the Debt Yield calculated as of the Maturity Date shall be at least 8.5%;  (d) with respect to the second Extension Option only, the As-Stabilized Loan-to-Value  Ratio calculated as of the Maturity Date shall not be greater than 45%;  

 

   -61-  29949910.v4  (e) the Loan shall be In-Balance and no Interest and Carry Cost Shortfall shall exist;  (f) the Master Lease shall remain in full force and effect and no default shall have  occurred under the Master Lease that remains uncured beyond any applicable notice and cure period in  Lender’s sole but good faith determination;  (g) Completion of the Project shall have occurred;  (h) Borrower and Guarantor shall have executed and delivered amendments to and  reaffirmations of any or all of the Loan Documents as may be reasonably requested by Lender;  (i) each of the representations and warranties of Borrower and Guarantor contained  in each of the Loan Documents shall be true, complete and correct in all material respects as of the Maturity  Date, except for any changes in facts or circumstances occurring since the Closing Date that do not  constitute a Default or Event of Default or were not caused by the occurrence of a Default or Event of  Default and, in any event, do not result in a Material Adverse Effect;  (j) Borrower shall have paid to Lender a fee in the amount of 0.25% of the  Outstanding Principal Balance plus any amounts available to be advanced as Additional Advances under  this Agreement, and shall have paid or reimbursed all of Lender’s outstanding fees and expenses, in  accordance with the terms of this Agreement and the other Loan Documents;  (k) if Lender determines that the Estimated Interest and Carry Available Amount  calculated as of the first day of the applicable Extension Term would be insufficient to fund the estimated  Interest and Carry Costs projected to be payable with respect to the Loan and the Mortgage Loan through  the last day of the applicable Extension Term (the amount of any such shortfall, an “Extension Shortfall”),  Borrower shall deposit cash into the Unfunded Loan Proceeds Account in an amount equal to the Extension  Shortfall;  (l) Borrower either (i) extends the term of the Interest Rate Cap Agreement (or, if  following a Rate Conversion, the Substitute Interest Rate Cap Agreement) then in effect to a date not earlier  than the extended Maturity Date, or (ii) enters into a new Interest Rate Cap Agreement (or, if following a  Rate Conversion, the Substitute Interest Rate Cap Agreement) and assigns the same to Lender pursuant to  such documents as Lender may require, which Interest Rate Cap Agreement (or, if following a Rate  Conversion, the Substitute Interest Rate Cap Agreement) expires no earlier than the extended Maturity  Date, and which extension or new agreement complies with the requirements set forth in Section 2.2.7 and  has the effect of capping Term SOFR (or, following, a Rate Conversion, as applicable, the Alternate Rate  Index or the Prime Rate Index) at a strike price equal to 3.00%, on a notional principal amount not less than  the Outstanding Principal Balance;  (m) Mortgage Borrower shall have extended the Maturity Date (as defined in the  Mortgage Loan Agreement) of the Mortgage Loan to a date not sooner than the applicable extended  Maturity Date hereunder (including that all conditions precedent to such extension shall have been satisfied  by Mortgage Borrower or waived in writing by Mortgage Lender); and  (n) Mortgage Borrower shall have satisfied all requirements set forth in Section 2.3.1  of the Mortgage Loan Agreement for such extension of the Mortgage Loan (except to the extent that the  only condition not satisfied thereunder is Borrower’s simultaneous satisfaction of the conditions set forth  in this Section 2.3.1) and the Mortgage Loan has been extended pursuant to the terms and conditions of the  Mortgage Loan Agreement.  

 

   -62-  29949910.v4  2.3.2 Unfunded Loan Proceeds.  If (i) any Loan proceeds have not been advanced (such  unadvanced amounts hereinafter, the “Unfunded Loan Amount”) on or prior to the Initial Maturity Date  and (ii) Borrower has elected to exercise the first Extension Option in accordance with the terms and  conditions of Section 2.3.1 hereof, then, Lender, at its sole election, may elect by written notice to Borrower  given no less than ten (10) Business Days prior to the anticipated advance date, advance all or such  applicable portion of the Unfunded Loan Amount into an Eligible Account under the sole dominion and  control of Lender (the “Unfunded Loan Proceeds Account”) subject to Borrower’s satisfaction of the  conditions precedent to an Extension Term set forth in Section 2.3.1.  With respect to such portion of the  Unfunded Loan Amount that is not funded into the Unfunded Loan Proceeds Account in accordance with  this Section 2.3.2, Lender’s commitment to fund such amounts shall terminate on the Initial Maturity Date.   Lender shall be released from all obligations under this Agreement and the other Loan Documents with  respect to such terminated portion of the commitment.  So long as no Event of Default is continuing, any  amount funded into the Unfunded Loan Proceeds Account (including any Extension Shortfall deposited  therein and any amounts deposited therein by Mortgage Lender pursuant to Section 2.3.2 of the Mortgage  Loan Agreement) shall be disbursed to Borrower on each Payment Date by Lender to pay Interest and Carry  Cost Shortfalls, subject to the terms and conditions set forth in this Agreement with respect to Additional  Advances to pay Interest and Carry Costs.  SECTION 2.4. Loan Payment.  2.4.1 Required Payments.  Borrower shall pay to Lender on the Initial Payment Date (which  shall be the first Payment Date hereunder) and on each Payment Date thereafter up to and including the  Maturity Date, the Monthly Debt Service Payment Amount, which payments (prior to an Event of Default)  shall be applied (i) first to amounts due and payable with respect to the Loan other than principal and interest  (but including interest at the Default Rate), and then (ii) to accrued and unpaid interest at the Interest Rate,  and then (iii) to the Outstanding Principal Balance.  So long as no Event of Default then exists, all payments  received by Lender with respect to the Loan shall be applied by Lender to amounts due with respect to each  Note on a pro rata and pari passu basis, based on the outstanding principal amount due under each Note  and the interest rate applicable thereto; provided, however, that from and after an Event of Default, all  payments received by Lender shall be applied by Lender to amounts due with respect to the Notes in such  order and priority as Lender shall determine in its sole discretion.  Borrower shall pay the entire Debt to  Lender on the Maturity Date.  2.4.2 Late Payment Charge.  If any principal, interest or any other sums due under the Loan  Documents is not paid by Borrower by the date on which it is due, Borrower shall pay to Lender upon  demand an amount (such amount, a “Late Payment Charge”) equal to the lesser of five percent (5%) of  such unpaid sum or the maximum amount permitted by applicable law in order to defray the expense  incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the  loss of the use of such delinquent payment.  Late Payment Charges shall be secured by the Pledge  Agreement and the other Loan Documents to the extent permitted by applicable law.  2.4.3 Payments Generally.  For purposes of making payments hereunder, but not for purposes  of calculating Interest Accrual Periods, if the day on which such payment is due is not a Business Day, then  amounts due on such date shall be due on the immediately preceding Business Day.  All amounts due  pursuant to this Agreement and the other Loan Documents shall be payable without setoff, counterclaim,  defense or any other deduction whatsoever. Except as otherwise specifically provided herein, all payments  and prepayments under this Agreement and the Note shall be made to Lender not later than 11:00 A.M.,  New York City time, on the date when due and shall be made in lawful money of the United States of  America in immediately available funds at Lender’s office or as otherwise directed by Lender, and any  funds received by Lender after such time shall, for all purposes hereof, be deemed to have been paid on the  next succeeding Business Day.  Following an Event of Default, and for so long as such Event of Default  

 

   -63-  29949910.v4  continues, any prepayment shall be applied to payments of principal of the Loan and other amounts due  under the Loan Documents in such order and priority as Lender may determine in its sole discretion. All  payments received by Lender during the existence of an Event of Default (other than an Event of Default  resulting from a failure to repay the Debt on the Maturity Date) shall be deemed to have been made on the  next occurring Payment Date.  SECTION 2.5. Prepayments.  2.5.1 Voluntary Prepayments.  Except as otherwise expressly provided herein, Borrower shall  not have the right to prepay the Loan in whole or in part prior to the Maturity Date. Borrower may, at its  option and upon at least thirty (30) days prior written notice to Lender specifying the Business Day on  which such prepayment is to be made (a “Prepayment Date”) (which notice may be revoked by Borrower  at any time prior to the Prepayment Date provided that Borrower shall reimburse Lender for any costs  incurred by Lender as a result of such revocation), prepay the Debt in whole, but not in part (except as  otherwise expressly permitted under this Agreement), provided that such prepayment is accompanied by  (a) all interest accrued on the amount of the Loan being so prepaid through and including the last day of the  Interest Accrual Period in effect as of such Prepayment Date, (b) all other sums due and payable under this  Agreement and the other Loan Documents, including, but not limited to any amounts due under Section  2.2.4 hereof and all of Lender’s out-of-pocket costs and expenses (including reasonable attorney’s fees and  disbursements) incurred by Lender in connection with such prepayment, and (c) the Prepayment Premium  applicable to such payment (if any). Unless an Event of Default then exists, any voluntary prepayment of  the Loan and the Mortgage Loan shall be made such that Lender and Mortgage Lender shall receive their  respective pro rata share of any principal amount so repaid (based on the respective outstanding principal  balances of the Loan and the Mortgage Loan in effect at such time). Notwithstanding the foregoing, in no  event shall Borrower be permitted to prepay the Debt on a date during an Interest Accrual Period (other  than a prepayment of the Debt in whole on a Payment Date) which is prior to the Determination Date for  such Interest Accrual Period.  2.5.2 Liquidation Event.  (a) In the event of a Liquidation Event, Borrower shall cause the  related Net Liquidation Proceeds to be paid directly to Lender.  On the Payment Date following each date  on which Lender actually receives a distribution of Net Liquidation Proceeds, Borrower is deemed to have  authorized Lender to prepay the outstanding principal balance of the Mezzanine Note in an amount equal  to one hundred percent (100%) of such Net Liquidation Proceeds, together with interest accruing on such  amount calculated through and including the end of the Interest Accrual Period in which such Payment  Date occurs.  Any amounts of Net Liquidation Proceeds in excess of the Debt shall be paid to Borrower.   Any prepayment received by Lender pursuant to this Section 2.5.2(a) on a date other than a Payment Date  shall be held by Lender as collateral security for the Loan in an interest bearing account, with such interest  accruing to the benefit of Borrower, and shall be applied by Lender on the next Monthly Date.  (b) Borrower shall notify Lender of any contemplated Liquidation Event not later than  one (1) Business Day following the first date on which Borrower has knowledge of such event.  Borrower  shall be deemed to have knowledge of (i) a sale (other than a foreclosure sale) of the Property on the date  on which a contract of sale for such sale is entered into, and a foreclosure sale, on the date written notice of  such foreclosure sale is received by Borrower or Mortgage Borrower, and (ii) a refinancing of the Property,  on the date on which a commitment for such refinancing has been entered into.  The provisions of this  Section 2.5.2 shall not be construed to contravene in any manner the restrictions and other provisions  regarding refinancing of the Mortgage Loan or Transfer of the Property set forth in this Agreement and the  other Loan Documents.  SECTION 2.6. Release on Payment in Full.  Lender shall execute and deliver to or at the  direction of Borrower, upon the written request and at the expense of Borrower, upon payment in full of all  

 

   -64-  29949910.v4  principal and interest due on the Loan, any applicable Prepayment Premium, and all other amounts due and  payable under the Loan Documents in accordance with the terms and provisions of the Note and this  Agreement, a release of the Lien of the Pledge Agreement and other Loan Documents with respect to the  Collateral, in form and content reasonably acceptable to Lender.  ARTICLE III    CASH MANAGEMENT; RESERVE ACCOUNTS  SECTION 3.1. Cash Management.  Borrower shall cause Mortgage Borrower to cause all  Revenues to be deposited and applied in accordance with the Mortgage Loan Documents, and otherwise  cause Mortgage Borrower to comply with the requirements of Section 3.1 of the Mortgage Loan Agreement,  subject to the terms and conditions of the Mortgage Loan Documents.  If the terms and conditions of Article  III of the Mortgage Loan Agreement shall be waived by Mortgage Lender while the Debt is outstanding,  or if the Mortgage Loan shall be repaid in full while the Debt is outstanding, then Lender shall have the  right, at its option, to require Borrower to cause Mortgage Borrower to enter into cash management  arrangements in form and substance similar to that required pursuant to Article III of the Mortgage Loan  Agreement as of the Closing Date which terms and conditions, together with all related defined terms, are  hereby incorporated herein by this reference, mutatis mutandis, such that terms therein applicable to the  Mortgage Loan, Mortgage Borrower and Mortgage Lender apply to this Loan, Borrower and Lender,  respectively.  In such event, Borrower shall (and shall cause Mortgage Borrower to) execute and deliver to  Lender such documents and agreements as Lender may reasonably require in order to establish such  accounts on substantially the same terms and conditions as are set forth in Article III of the Mortgage Loan  Agreement as of the Closing Date (including an amendment to this Agreement incorporating the applicable  terms and conditions of said Article III of the Mortgage Loan Agreement and related defined terms), and  to create and perfect a Lien thereon (together with such opinions of counsel relating thereto as Lender may  reasonably require).  In addition, if Lender has notified Borrower that Lender has determined that a Cash  Management Event exists but Mortgage Lender has (for any reason) not declared such Cash Management  Event to exist under the Mortgage Loan Agreement (or has not otherwise required (for any reason) that all  Revenues be delivered to the Mortgage Loan Cash Management Account pursuant to the terms and  conditions of the Mortgage Loan Documents), Borrower shall (or shall cause Mortgage Borrower to)  nonetheless deliver all Revenues received by Mortgage Borrower directly to the Cash Management Account  established by Lender pursuant to this Agreement, in which event Lender, so long as no Event of Default  exists, shall apply such Revenues in the order described in Article III of the Mortgage Loan Agreement.  SECTION 3.2. Required Deposits.  3.2.1 Tax Reserve Account.  (a) Borrower shall, on each Payment Date, deposit into an Eligible Account  established by Lender from time to time (the “Tax Reserve Account”) the amount that Lender reasonably  estimates will be necessary in order to accumulate sufficient funds to pay, at least thirty (30) days prior to  their respective due dates, all Property Taxes and Other Charges due within the ensuing twelve (12) months  (the amount of such deposit required on any Payment Date, the “Tax Reserve Deposit Amount”).   Amounts deposited into the Tax Reserve Account are referred to herein as the “Tax Reserve Funds.”  If  at any time, Lender reasonably determines that the Tax Reserve Funds will not be sufficient to pay the  Property Taxes and Other Charges, Lender shall notify Borrower of such determination and Borrower shall  deposit the shortfall amount determined by Lender into the Tax Reserve Account within five (5) Business  Days following written notice from Lender to Borrower.  Notwithstanding the foregoing or anything to the  contrary herein, after the Closing Date, Lender shall disburse into the Tax Reserve Account in the order of  priority of application set forth in Section 2.1.9(c) hereof, (i) amounts available for deposit into the Tax  

 

   -65-  29949910.v4  Reserve Account pursuant to Section 3.1(b)(i) hereof, (ii) amounts then on deposit in the Shortfall Account  allocable for the payment of Property Taxes and Other Charges, (iii) amounts then on deposit in the  Mortgage Loan Excess Cash Flow Reserve Account allocable for the payment of Property Taxes and Other  Charges, and (iv) Additional Advances available for payment of Property Taxes and Other Charges, in each  case, for the payment of Property Taxes and Other Charges in an amount equal to the then-required Tax  Reserve Deposit Amount (such disbursement to be made by Lender, the “Tax Disbursement Amount”).  Lender’s disbursement of the Tax Disbursement Amount shall satisfy Borrower’s obligations to make a  deposit into the Tax Reserve Account in such amount, provided that, (x) if the Tax Disbursement Amount  is less than the then-required Tax Reserve Deposit Amount, Borrower shall deposit such deficiency in  accordance with the terms of this Section 3.2.1(a), and (y) with respect to disbursement of amounts on  deposit in the Shortfall Account, such disbursement shall be required only so long as Lender’s access to  such amounts is not restricted by (A) Legal Requirements, injunction or other court order, or (B) as a result  of any action, inaction or omission by Borrower, Guarantor or any Affiliate of Borrower or Guarantor.  (b) Provided no Event of Default shall exist, Lender shall apply the funds in the Tax  Reserve Account to payments of the Property Taxes and Other Charges for which such funds have been  reserved on their respective due dates.  In making any such payment, Lender may do so according to any  bill, statement or estimate procured from the appropriate public office without inquiry into the accuracy  thereof. If Lender so elects at any time, Borrower shall provide, at Borrower’s expense, a tax service  contract for the term of the Loan issued by a tax reporting agency acceptable to Lender.  If Lender does not  so elect, Borrower shall reimburse Lender for the out-of-pocket cost of making annual tax searches  throughout the term of the Loan.  (c) Notwithstanding the foregoing provisions of this Section 3.2.1, Borrower shall not  be required to deposit the Tax Reserve Deposit Amount as set in Section 3.2.1(a) at any time that, in  Lender’s determination, (i) Master Tenant pays all Property Taxes and Other Charges directly to the  appropriate taxing authority in accordance with the express terms of the Master Lease, (ii) there is no event  of default by Master Tenant under the Master Lease, and (iii) Borrower provides Lender, or causes to be  provided to Lender, evidence of payment of such Property Taxes and Other Charges prior to delinquency.  Borrower shall immediately commence depositing all Tax Reserve Deposit Amounts as required by Lender  pursuant to Section 3.2.1, within five (5) Business Days of receipt of notice from Lender of Borrower’s  failure to comply with items (i), (ii), or (iii) in the immediately preceding sentence, and such failure is not  cured within such five (5) Business Day period, which such notice shall instruct Borrower, in such event,  to immediately commence making all additional deposits of the Tax Reserve Deposit Amount.    3.2.2 Insurance Reserve Account.  (a) Borrower shall, on each Payment Date, deposit into an Eligible Account  established by Lender from time to time (the “Insurance Reserve Account”) the amount that Lender  estimates will be necessary in order to accumulate sufficient funds to pay, at least thirty (30) days prior to  its expiration, all Insurance Premiums for Policies required hereunder due within the ensuing twelve  (12) months (the amount of such deposit required on any Payment Date, the “Insurance Reserve Deposit  Amount”). Amounts deposited pursuant into the Insurance Reserve Account are referred to herein as the  “Insurance Reserve Funds”. If at any time, Lender reasonably determines that the Insurance Reserve  Funds will not be sufficient to pay the Insurance Premiums, Lender shall notify Borrower of such  determination and Borrower shall deposit the shortfall amount determined by Lender into the Insurance  Reserve Account within five (5) Business Days following written notice from Lender to Borrower.   Notwithstanding anything to the contrary herein, after the Closing Date, Lender shall disburse into the  Insurance Reserve Account in the order of priority of application set forth in Section 2.1.9(c) hereof, (i)  amounts available for deposit into the Insurance Reserve Account pursuant to Section 3.1(b)(ii) hereof, (ii)  amounts then on deposit in the Shortfall Account allocable for payment of Insurance Premiums, (iii)  

 

   -66-  29949910.v4  amounts then on deposit in the Mortgage Loan Excess Cash Flow Reserve Account allocable for payment  of Insurance Premiums, (iv) Additional Advances available for payment of Insurance Premiums, in each  case, for the payment of Insurance Premiums in an amount equal to the then-required Insurance Reserve  Deposit Amount (such disbursement to be made by Lender, the “Insurance Disbursement Amount”).  Lender’s disbursement of the Insurance Disbursement Amount shall satisfy Borrower’s obligations to make  a deposit into the Insurance Reserve Account in such amount, provided that, (x) if the Insurance  Disbursement Amount is less than the then-required Insurance Reserve Deposit Amount, Borrower shall  deposit such deficiency in accordance with the terms of this Section 3.2.2(a), and (y) with respect to  disbursement of amounts on deposit in the Shortfall Account, such disbursement shall be required only so  long as Lender’s access to such amounts is not restricted by (A) Legal Requirements, injunction or other  court order, or (B) as a result of any action, inaction or omission by Borrower, Guarantor or any Affiliate  of Borrower or Guarantor.  (b) Provided no Event of Default shall exist, Lender will apply the funds in the  Insurance Reserve Account to payments of Insurance Premiums for Policies required hereunder. In making  any such payment, Lender may do so according to any bill, statement or estimate procured from an insurer  or agent without inquiry into the accuracy thereof.  (c) Notwithstanding the foregoing provisions of this Section 3.2.2, Borrower shall not  be required to deposit the Insurance Reserve Deposit Amount as set in Section 3.2.2(a) at any time that, in  Lender’s determination, (i) Master Tenant pays all Insurance Premiums for Policies required hereunder  directly to the appropriate payee in accordance with the express terms of the Master Lease, (ii) there is no  event of default by Master Tenant under the Master Lease, and (iii) Borrower provides Lender, or causes  to be provided to Lender, evidence of payment of such Insurance Premiums for Policies required hereunder  prior to delinquency. Borrower shall immediately commence depositing all Insurance Reserve Deposit  Amounts as required by Lender pursuant to Section 3.2.2, within five (5) Business Days of receipt of notice  from Lender of Borrower’s failure to comply with items (i), (ii), or (iii) in the immediately preceding  sentence, and such failure is not cured within such five (5) Business Day period, which such notice shall  instruct Borrower, in such event, to immediately commence making all additional deposits of the Insurance  Reserve Deposit Amount.    SECTION 3.3. Adjustments to Reserve Accounts.  If at any time Lender determines in its good  faith discretion that the funds available in any Reserve Account will not be sufficient to pay for the cost or  expense for which such funds have been required to be deposited with Lender hereunder by the date  required therefor, or if Lender determines in its good faith discretion (based on the then-current Approved  Annual Budget or on review of a physical conditions report for the Property, among other sources) to  reassess its estimate of the amount necessary to be reserved for any such costs or expenses, then, at Lender’s  option, Borrower shall increase its monthly payments to Lender under with respect to the applicable  Reserve Account(s) by the amount that Lender so notifies Borrower is required and/or deposit the shortfall  amount determined by Lender into the applicable Reserve Account(s) within five (5) Business Days of  notice from Lender.  The insufficiency of any balance in any Reserve Account shall not relieve Borrower  from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents.  SECTION 3.4. Disbursements from the Reserve Accounts.  Lender shall disburse funds from  the applicable Reserve Account for the payment of the applicable Reserve Item, but not more frequently  than once in any thirty (30) day period, upon satisfaction by Borrower of each of the following conditions:   (a) Borrower shall submit a written request for payment to Lender (together with evidence reasonably  required by Lender to evidence satisfaction of the conditions set forth in this Section 3.4) at least thirty (30)  days prior to the date on which Borrower requests such payment be made and specifies the Reserve Item  for which such payment is requested; and (b) on the date such request is received by Lender and on the date  such payment is to be made, no Default or Event of Default exists. Lender shall not be required to make  

 

   -67-  29949910.v4  disbursements from the Reserve Accounts unless such requested disbursement is in an amount greater than  $50,000 (or a lesser amount if the total amount in the applicable Reserve Account is less than $50,000 in  which case only one disbursement of the amount remaining in the account shall be made).  No funds shall  be disbursed from a Reserve Account for the payment of a Reserve Item for which funds have been reserved  in a different Reserve Account (or for a Reserve Item for which no funds have been reserved).  Any amount  remaining in a Reserve Account after the Debt has been paid in full shall be returned to Borrower.  SECTION 3.5. Accounts Generally.  The Accounts are, and shall each be treated as, a “securities  account” as such term is defined in Section 8-501(a) of the UCC or a “deposit account” as such term is  defined in Section 9-102(a)(29) of the UCC, as the context may require.  Each item of property (whether  investment property, financial asset, securities, instrument, cash or other property) credited to the Accounts  shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.  Borrower  agrees that the each applicable bank shall, subject to the terms of this Agreement, treat Lender as entitled  to exercise the rights that comprise any financial asset credited to the Accounts.  All securities or other  property underlying any financial assets credited to the Accounts (other than cash) shall be registered in the  name of the applicable bank, indorsed to the such bank (or in blank) or credited to another securities account  maintained in the name of the applicable bank, and in no case will any financial asset credited to any such  account be registered in the name of Borrower, payable to the order of Borrower or specially indorsed to  Borrower.  Subject to the terms and conditions of this Agreement, the Accounts shall be under the sole  dominion and control of Lender (which dominion and control may be exercised by Servicer).  Lender and  Servicer shall have the sole right to make withdrawals from the Accounts (without limiting the terms and  conditions of this Agreement or the Clearing Account Agreement), and all out-of-pocket costs and expenses  for establishing and maintaining the Accounts incurred by Lender or Cash Management Bank shall be paid  by Borrower.  Lender may replace the Accounts or establish new Accounts from time to time in its sole  discretion, and Borrower hereby agrees that it shall take all reasonable action necessary to facilitate the  transfer of the respective obligations, duties and rights of the any applicable bank to the successor thereof  selected by Lender in its sole discretion.  If Lender transfers or assigns the Loan, at Lender’s request, the  names/beneficiaries of the Accounts may be changed by such transferee of the Loan.  Funds in the Clearing  Account and the Cash Management Account shall not bear interest (except, with respect to the Cash  Management Account, to the extent that the Reserve Accounts are actually subaccounts of the Cash  Management Account). In no event shall Lender or any Servicer be required to select any particular interest- bearing account or the account that yields the highest rate of interest, provided that selection of the account  shall be consistent with the general standards at the time being utilized by Lender or such Servicer, as  applicable, in establishing similar accounts for loans of comparable type.  All such interest that so becomes  part of the applicable Reserve Account shall be disbursed in accordance with the disbursement procedures  contained herein applicable to such Reserve Account; provided, however, that Lender may, at its election,  retain any such interest for its own account during the occurrence and continuance of an Event of Default.  Provided no Event of Default has occurred and is continuing beyond any applicable cure periods, Lender  or Servicer will direct such bank or financial institution where Reserve Accounts are established from time  to time to invest funds in the Reserve Accounts in an interest bearing account at a money market rate  customarily offered by such bank or financial institution (provided, however, that interest paid or payable  with respect to any such account may not be based on the highest rate of interest payable by Lender or such  bank or institution on deposits and shall not be calculated based on any particular external interest rate or  interest rate index, nor shall any such interest reflect the interest rate utilized by Lender or such bank or  institution to calculate interest payable on deposits held with respect to any particular loan or borrower or  class of loans or borrowers, and Lender shall have no liability with respect to the amount of interest paid  and/or loss of principal).  Any interest or other earnings which may accrue on the amounts held in Reserve  Accounts shall be added to the applicable Reserve Account and be allocated and/or disbursed in accordance  with the terms hereof applicable to such Reserve Account. The Reserve Funds shall not constitute trust  funds and may be held in Lender’s name and commingled with other monies held by Lender.  

 

   -68-  29949910.v4  SECTION 3.6. Distributions from Mortgage Borrower.  Borrower and Lender acknowledge  that, subject to, and in accordance with the terms of the Mortgage Loan Agreement, during the continuance  of a Mortgage Loan Event of Default, Mortgage Lender may elect to remit no amount to Lender, but the  same shall not excuse Borrower from any of its obligations hereunder or under the Loan Documents. Lender  may conclusively rely upon any notice received from Mortgage Lender with respect to the amount then  payable under the Mortgage Loan Agreement and with respect to the occurrence, continuance or  termination of a Mortgage Loan Event of Default. Lender shall be under no duty to inquire into or  investigate the validity, accuracy or content of any such notice. Any transfer of Mortgage Borrower’s funds  from any of the Mortgage Loan Accounts or other sources to or for the benefit of the Borrower is intended  by the parties to constitute, and shall constitute, distributions from Mortgage Borrower to Borrower and  shall be treated as such on the books and records of each party. All such distributions must comply with the  requirements of Section 18-607 of the Delaware Limited Liability Company Act. No provision of the Loan  Documents is intended to nor shall create a debtor-creditor relationship between Mortgage Borrower and  Mezzanine Lender.  SECTION 3.7. Waiver of Required Deposits; Transfer of Reserve Funds Under Mortgage  Loan; Grant of Lien.  Notwithstanding anything to the contrary contained in this Agreement, Borrower  shall be relieved of its obligation to make deposits to the Reserve Accounts pursuant to Sections 3.2.1 and  3.2.2 and Section 3.4 above for so long as (i) Mortgage Borrower is required to, as and to the extent set  forth therein, and does make all such required deposits pursuant to Sections 3.2.1 and 3.2.2 of the Mortgage  Loan Agreement, as and to the extent set forth therein, and (ii) Lender receives evidence of the making of  such deposits, as and to the extent set forth therein, and of the payment of all Property Taxes and premiums  for required Policies hereunder.  Borrower shall not cause or permit Mortgage Borrower to use the Mortgage  Loan Reserve Funds for any purpose other than as expressly permitted by Section 3.2 of the Mortgage Loan  Agreement. Borrower shall cause Mortgage Borrower to simultaneously provide Lender with copies of any  notices, information, documentation or other deliveries provided by Mortgage Borrower to Mortgage  Lender in connection with any release of funds in any Mortgage Loan Account (or any request for a release  of funds from any Mortgage Loan Account, as applicable) pursuant to Article III of the Mortgage Loan  Agreement, and Lender shall have the right to request and obtain additional information in connection with  any such request if and to the extent that Mortgage Lender has the right to request and obtain such additional  information pursuant to the Mortgage Loan Agreement. If Mortgage Lender waives any reserves or escrow  accounts required in accordance with the terms of the Mortgage Loan Agreement (other than pursuant to  the express terms of the Mortgage Loan Agreement), which reserves or escrow accounts are also required  in accordance with the terms of this Section 3.2, or if the Mortgage Loan is refinanced or paid in full  (without a prepayment in full of the Loan) and Reserve Funds that are required hereunder are not required  under the new mortgage loan approved by Lender, if any, then Borrower shall cause any amounts that  would have been deposited into any reserves or escrow accounts in accordance with the terms of the  Mortgage Loan Agreement to be transferred to and deposited with Lender in accordance with the terms of  this Section 3.7 (and Borrower shall enter into supplemental agreements that are similar in form and  substance to the Mortgage Loan Documents, as Lender may reasonably require in connection therewith),  and, if any letters of credit have been substituted by Mortgage Borrower for any such reserves or escrows  as may be specifically permitted by the Mortgage Loan Agreement, then Borrower shall also cause such  letters of credit to be transferred to Lender to be held by Lender upon the same terms and provisions as set  forth in the Mortgage Loan Agreement.    SECTION 3.8. Intentionally Omitted.   

 

   -69-  29949910.v4  ARTICLE IV    REPRESENTATIONS AND WARRANTIES  SECTION 4.1. Borrower Representations.  Borrower represents and warrants as of the Closing  Date that:  4.1.1 Borrower.  (a) Organization.    (i) Each of Borrower and SPE Component has been duly organized and is  validly existing and in good standing in the jurisdiction in which it is organized and has the  requisite power and authority to own its properties and to transact the businesses in which  it is now engaged.  Borrower is duly qualified to do business in, and is in good standing in,  the State and each other jurisdiction where it is required to be so qualified in connection  with its properties, businesses and operations.  Borrower possesses all rights, licenses,  permits and authorizations, governmental or otherwise, necessary to entitle it to own its  properties and to transact the businesses in which it is now engaged.  Borrower’s principal  place of business as of the Closing Date is the address set forth in the introductory  paragraph of this Agreement.  The organizational chart attached hereto as Schedule II  shows all Persons that (a) (i) except as set forth in the immediately following clause (ii),  own ten percent (10%) or more of the direct or indirect ownership interests in Borrower,  and (ii) to Borrower’s knowledge, own ten percent (10%) or more of the direct or indirect  ownership interests in Borrower constituting publicly traded shares on a nationally or  internationally recognized stock exchange and (b) Control Borrower.  (ii) Each of Mortgage Borrower and Mortgage Borrower SPE Component has  been duly organized and is validly existing and in good standing in the jurisdiction in which  it is organized and has the requisite power and authority to own its properties and to transact  the businesses in which it is now engaged.  Mortgage Borrower is duly qualified to do  business in, and is in good standing in, the State and each other jurisdiction where it is  required to be so qualified in connection with its properties, businesses and operations.   Mortgage Borrower possesses all rights, licenses, permits and authorizations,  governmental or otherwise, necessary to entitle it to own its properties and to transact the  businesses in which it is now engaged. Borrower has delivered to Lender true and correct  copies of the organizational documents of Mortgage Borrower, all of which are in full force  and effect. Borrower has the power and authority and requisite ownership interests in  Mortgage Borrower to control the actions of Mortgage Borrower, and upon the realization  of the Collateral, Lender or any other party succeeding to Borrower’s interest in the  Collateral would have such control. Without limiting the foregoing, Borrower has  sufficient control over Mortgage Borrower or to cause Mortgage Borrower to (i) take any  action on Mortgage Borrower’s part required by the Loan Documents and (ii) refrain from  taking any action prohibited by the Loan Documents.  (b) Authority; Enforceability.  Borrower has taken all necessary action to authorize  the execution, delivery and performance of this Agreement and the other Loan Documents. This Agreement  and the other Loan Documents have been duly executed and delivered by or on behalf of Borrower and  constitute the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance  with their respective terms, subject only to applicable bankruptcy, insolvency and similar laws affecting  rights of creditors generally, and subject, as to enforceability, to general principles of equity (regardless of  

 

   -70-  29949910.v4  whether enforcement is sought in a proceeding in equity or at law). The Loan Documents are not subject to  any right of rescission, set-off, counterclaim or defense by Borrower, SPE Component Entity or Guarantor  (including the defense of usury), nor would the operation of any of the terms of the Loan Documents, or  the exercise of any right thereunder, render the Loan Documents unenforceable (subject to principles of  equity and bankruptcy, insolvency and other laws generally affecting creditors’ rights and the enforcement  of debtors’ obligations), and none of Borrower, SPE Component Entity or Guarantor has asserted any right  of rescission, set-off, counterclaim or defense with respect to the Loan Documents.  (c) No Conflicts.    (i) The execution, delivery and performance of this Agreement and the other  Loan Documents by Borrower, SPE Component Entity, and/or Guarantor, as applicable,  does not (a) conflict with or result in a breach of any of the terms or provisions of, or  constitute a default under, any of such Person’s organizational or governing documents,  (b) conflict with or result in a breach of any, or result in the creation or imposition of any  lien, charge or encumbrance (other than pursuant to the Loan Documents) upon any of the  property or assets of such Person pursuant to the terms of, any indenture, mortgage, deed  of trust, loan agreement, partnership agreement, management agreement or other  agreement or instrument to which such Person is a party or by which any of such Person’s  property or assets is subject, or (c) result in any violation of the provisions of any statute  or any order, rule or regulation of any Governmental Authority having jurisdiction over  such Person or any of such Person’s properties or assets.  Any consent, approval,  authorization, order, registration or qualification of or with any Governmental Authority  required for the execution, delivery and performance by Borrower, SPE Component Entity,  and/or Guarantor, as applicable, of this Agreement or any other Loan Documents to which  it is a party has been obtained and is in full force and effect.  (ii) The execution, delivery and performance of the Mortgage Loan  Agreement and the other Mortgage Loan Documents by Mortgage Borrower, Mortgage  Borrower SPE Component Entity, and/or Guarantor, as applicable, does not (a) conflict  with or result in a breach of any of the terms or provisions of, or constitute a default under,  any of such Person’s organizational or governing documents, (b) conflict with or result in  a breach of any, or result in the creation or imposition of any lien, charge or encumbrance  (other than pursuant to the Loan Documents and the Mortgage Loan Documents) upon any  of the property or assets of such Person pursuant to the terms of, any indenture, mortgage,  deed of trust, loan agreement, partnership agreement, management agreement or other  agreement or instrument to which such Person is a party or by which any of such Person’s  property or assets is subject, or (c) result in any violation of the provisions of any statute  or any order, rule or regulation of any Governmental Authority having jurisdiction over  such Person or any of such Person’s properties or assets.  Any consent, approval,  authorization, order, registration or qualification of or with any Governmental Authority  required for the execution, delivery and performance by Borrower, SPE Component Entity,  and/or Guarantor, as applicable, of the Mortgage Loan Agreement or any other Mortgage  Loan Documents to which it is a party has been obtained and is in full force and effect.  (d) Litigation; Judgments.  There are no actions, suits or proceedings at law or in  equity by or before any Governmental Authority or other agency now pending or to Borrower’s knowledge,  threatened against or affecting Borrower, SPE Component Entity, Mortgage Borrower, Mortgage Borrower  SPE Entity, Guarantor, the Collateral or the Property, that, with respect to Guarantor only, (i) would  reasonably be expected to result in a Material Adverse Effect or (ii) purports to affect the legality, validity  or enforceability of any Loan Document or the consummation of the transactions contemplated by the Loan  

 

   -71-  29949910.v4  Documents.  Borrower, SPE Component Entity, Mortgage Borrower, Mortgage Borrower SPE Entity, and  Guarantor are not in default or violation with respect to any order, writ, injunction, decree or demand of  any Governmental Authority. If the Property is subject to a Management Agreement, to Borrower’s  knowledge, (i)  there are no actions, suits or proceedings at law or in equity by or before any Governmental  Authority or other agency now pending or threatened against or affecting Manager that, if determined  adversely, would be reasonably likely to have a Material Adverse Effect, and (ii) Manager is not in default  or violation with respect to any order, writ, injunction, decree or demand of any Governmental Authority  that would be reasonably likely to have a Material Adverse Effect.  (e) Agreements.    (i) Borrower is not a party to any agreement or instrument and has not  subjected itself, the Collateral or the Property to, and none of it, the Collateral or the  Property is subject to, any restriction which would reasonably be expected to have a  Material Adverse Effect. Borrower is not in default in any material respect in the  performance, observance or fulfillment of any of the obligations, covenants or conditions  contained in any agreement or instrument to which it is a party or by which Borrower, the  Collateral or the Property are bound. Borrower and SPE Component Entity have no  material financial obligations under any indenture, mortgage, deed of trust, loan agreement  or other agreement or instrument to which Borrower or SPE Component Entity is a party  or by which Borrower, SPE Component Entity, Mortgage Borrower, Mortgage Borrower  SPE Entity, the Collateral or the Property is otherwise bound, other than (A) Permitted  Indebtedness, and (B) other obligations which, in each case, would not reasonably be  expected to have a Material Adverse Effect.   (ii) Mortgage Borrower is not a party to any agreement or instrument and has  not subjected itself or the Property to, and neither it nor the Property are subject to, any  restriction which would reasonably be expected to have a Material Adverse Effect.  Mortgage Borrower is not in default following applicable notice and cure periods in any  material respect in the performance, observance or fulfillment of any of the obligations,  covenants or conditions contained in any agreement or instrument to which it is a party or  by which Mortgage Borrower or the Property is bound which would reasonably be  expected to have a Material Adverse Effect. Mortgage Borrower and Mortgage Borrower  SPE Component Entity have no material financial obligations under any indenture,  mortgage, deed of trust, loan agreement or other agreement or instrument to which  Mortgage Borrower or Mortgage Borrower SPE Component Entity is a party or by which  Mortgage Borrower, Mortgage Borrower SPE Component Entity, or the Property is  otherwise bound, other than (A) Permitted Indebtedness (as defined in the Mortgage Loan  Agreement), and (B) other obligations which, in each case, would not reasonably be  expected to have a Material Adverse Effect.  (f) Solvency.  Neither Borrower nor Mortgage Borrower has (a)  entered into the  transaction contemplated by this Agreement or the Mortgage Loan Agreement, as applicable, or executed  the Loan Documents or the Mortgage Loan Documents, as applicable, with the actual intent to hinder, delay  or defraud any creditor and (b) failed to receive reasonably equivalent value in exchange for its obligations  under such Loan Documents.  The fair saleable value of Borrower’s assets exceeds and will, immediately  following the making of the Loan, exceed Borrower’s total liabilities, including subordinated, unliquidated,  disputed and contingent liabilities.  The fair saleable value of Borrower’s assets is and will be, immediately  following the making of the Loan, greater than Borrower’s probable liabilities, including the maximum  amount of its contingent liabilities on its debts as such debts become absolute and matured.  Borrower’s  assets do not and, immediately following the making of the Loan will not, constitute unreasonably small  

 

   -72-  29949910.v4  capital to carry out its business as conducted or as proposed to be conducted. The fair saleable value of  Mortgage Borrower’s assets is and will be, immediately following the making of the Mortgage Loan,  greater than Mortgage Borrower’s probable liabilities, including the maximum amount of its contingent  liabilities on its debts as such debts become absolute and matured. Mortgage Borrower’s assets do not and,  immediately following the making of the Mortgage Loan will not, constitute unreasonably small capital to  carry out its business as conducted or as proposed to be conducted. Neither Borrower nor Mortgage  Borrower intends to, or believes that it will, incur debts and liabilities (including contingent liabilities and  other commitments) beyond its ability to pay such debts and liabilities as they mature (taking into account  the timing and amounts of cash to be received by Borrower or Mortgage Borrower, as applicable, and the  amounts to be payable on or in respect of the obligations of Borrower or Mortgage Borrower, as applicable).  No petition in bankruptcy has been filed against Borrower, SPE Component Entity, Mortgage Borrower or  Mortgage Borrower SPE Component Entity and none of Borrower, SPE Component Entity, Mortgage  Borrower or Mortgage Borrower SPE Component Entity has ever made an assignment for the benefit of  creditors or taken advantage of any insolvency act for the benefit of debtors.  None of Borrower, SPE  Component Entity, Mortgage Borrower or Mortgage Borrower SPE Component Entity, or any of their  respective direct or indirect owner is contemplating either the filing of a Bankruptcy Action by Borrower,  SPE Component Entity, Mortgage Borrower or Mortgage Borrower SPE Component Entity or the  liquidation of all or a major portion of its assets or properties, and Borrower has no knowledge of any  Person contemplating the filing of any such petition against Borrower, SPE Component Entity, Mortgage  Borrower or Mortgage Borrower SPE Component Entity.  None of the Property or any portion thereof or  the Collateral or any portion thereof is the subject of, and none of Borrower, SPE Component Entity,  Mortgage Borrower, Mortgage Borrower SPE Component Entity or Guarantor is a debtor in, state or federal  bankruptcy, insolvency or similar proceeding.  None of Borrower, SPE Component Entity, Mortgage  Borrower, Mortgage Borrower SPE Component Entity, Guarantor, or any Person owning a direct ownership  interest in any of the foregoing in excess of ten percent (10%) (other than as a result solely of the ownership  of publicly traded shares on a nationally or internationally recognized stock exchange) has ever been in a  state or federal bankruptcy or insolvency proceeding or convicted of a felony. To Borrower’s knowledge,  no Person owning publicly traded shares on a nationally or internationally recognized stock exchange  constituting a direct ownership interest in Borrower, SPE Component Entity, Mortgage Borrower,  Mortgage Borrower SPE Component Entity or Guarantor of ten percent (10%) or more has ever been in a  state or federal bankruptcy or insolvency proceeding or convicted of a felony.  (g) No Plan Assets.  None of Borrower, SPE Component Entity (if any), Mortgage  Borrower or Mortgage Borrower SPE Component Entity (if any) (a) is, sponsors, or is obligated to  contribute to an “employee benefit plan” (within the meaning of §3(3) of ERISA) which is subject to Title I  of ERISA or §4975 of the Code, and none of the assets of such Person constitute “plan assets” (within the  meaning of 29 C.F.R. §2510.3-101) for purposes of §3(42) of ERISA, or (b) is a “governmental plan”  (within the meaning of §3(32) of ERISA) or subject to any state statute regulating investments of, or  fiduciary obligations with respect to, such “governmental plans” which is similar to the provisions of §406  of ERISA or §4975 of the Code and which prohibit or otherwise restrict the transactions contemplated by  this Agreement (including the exercise by Lender of any of its rights under the Loan Documents).  (h) Special Purpose Entity/Separateness.  Each of Borrower, SPE Component  Entity (if any), Mortgage Borrower and Mortgage Borrower SPE Component Entity is (and has been, at all  times since their formation) a Special Purpose Entity.  All of the facts and assumptions contained in any  substantive consolidation opinion delivered to Lender in connection with the Loan are true and correct in  all material respects. Each of Borrower and Mortgage Borrower has been and is in compliance with all  Legal Requirements and has received all permits necessary for it to operate its contemplated business.  Neither Borrower nor Mortgage Borrower is, or has been, involved in any dispute with any taxing authority.  Each of Borrower and Mortgage Borrower has paid all Taxes and Other Charges. Borrower has never  owned any property other than the Collateral and has never engaged in any business except the ownership  

 

   -73-  29949910.v4  of the Collateral. Mortgage Borrower has never owned any property other than the Property and has never  engaged in any business except the ownership and operation of the Property. Neither Borrower nor  Mortgage Borrower is now or has ever been a party to any lawsuit, arbitration, summons or legal  proceeding. Borrower has no material contingent or actual obligations not related to the Collateral.  Mortgage Borrower has no material contingent or actual obligations not related to the Property. Any debt  incurred by Mortgage Borrower other than the Mortgage Debt that is secured by the Property has been  satisfied in full on or before the date hereof, none of Borrower, Mortgage Borrower or Guarantor have any  remaining liabilities or obligations in connection with such debt, and all collateral and security for such  debt has been released on or prior to the date hereof.  (i) Certain Regulations.  Neither Borrower nor Mortgage Borrower is (i) an  “investment company” or a company “controlled” by an “investment company,” within the meaning of the  Investment Company Act of 1940, as amended; (ii) a “holding company” or a “subsidiary company” of a  “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the  meaning of the Public Utility Holding Company Act of 1935, as amended; (iii) subject to any other federal  or state law or regulation which purports to restrict or regulate its ability to borrow money; (iv) a “bank  holding company” or a direct or indirect subsidiary of a “bank holding company” as defined in the Bank  Holding Company Act of 1956, as amended, and Regulation Y thereunder of the Board of Governors of  the Federal Reserve System; or (v) a “foreign person” within the meaning of § 1445(f)(3) of the Code.  No  part of the proceeds of the Loan or the Mortgage Loan will be used for the purpose of purchasing or  acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal  Reserve System or for any other purpose which would be inconsistent with such Regulation U or any other  Regulations of such Board of Governors, or for any purposes prohibited by any Legal Requirements or by  the terms and conditions of this Agreement or the other Loan Documents or the Mortgage Loan Agreement  or the other Mortgage Loan Documents.  (j) Embargoed Person; Prescribed Laws.  As of the Closing Date (and as of any  subsequent date on which this representation is re-made or deemed to be re-made):  (i) none of Borrower,  SPE Component Entity, Mortgage Borrower, Mortgage Borrower SPE Component Entity or Guarantor,  and none of the funds or other assets of Borrower, SPE Component Entity, Mortgage Borrower, Mortgage  Borrower SPE Component Entity or Guarantor constitute property of, or are beneficially owned (directly  or indirectly) by, any Embargoed Person; (ii) no Embargoed Person has any direct or indirect interest of  any nature whatsoever in Borrower, SPE Component Entity, Mortgage Borrower, Mortgage Borrower SPE  Component Entity or Guarantor, as applicable, with the result that the investment in Borrower, SPE  Component Entity, Mortgage Borrower, Mortgage Borrower SPE Component Entity or Guarantor, as  applicable (whether directly or indirectly), is or would be prohibited by law or the Loan is or would be in  violation of law; (iii) none of the funds of Borrower, SPE Component Entity, Mortgage Borrower, Mortgage  Borrower SPE Component Entity, or Guarantor, as applicable, have been derived from any unlawful  activity with the result that the investment in Borrower, SPE Component Entity, Mortgage Borrower,  Mortgage Borrower SPE Component Entity or Guarantor, as applicable (whether directly or indirectly), is  or would be prohibited by law or the Loan is or would be in violation of law; (iv) none of the Persons that  own a direct or indirect ownership interest in Borrower or Mortgage Borrower (A) is a government or  representative of a jurisdiction or a financial institution that has been designated by the U.S. Secretary of  the Treasury under Section 311 of the USA PATRIOT Act as of primary money laundering concern (a list  of these jurisdictions and financial institutions can be found on the Financial Crimes Enforcement Network  website at www.fincen.gov.), (B) resides or has a place of business in, or is organized under the laws of, a  country or territory subject to economic sanctions administered or enforced by OFAC or which is  designated as a non-cooperative country or territory by the Financial Action Task Force on Money  Laundering (which list of non-cooperative countries and territories can be found on the FATF web site),  (C) is a senior foreign political figure (defined as a senior official in the executive, legislative,  administrative, military or judicial branches of a non-U.S. government (whether elected or not), a senior  

 

   -74-  29949910.v4  official of a major non-U.S. political party, or a senior executive of a non-U.S. government-owned  corporation, and includes any corporation, business or other entity that has been formed by, or for the  benefit of, a senior foreign political figure), or any immediate family member (including parents, siblings,  spouse, children and in-laws) or close associate (meaning a Person who is widely and publicly known to  maintain an unusually close relationship with the senior foreign political figure, and includes a person who  is in a position to conduct substantial U.S. and non-U.S. financial transactions on behalf of the senior foreign  political figure) of a senior foreign political figure (other than certain passive indirect sovereign wealth fund  investors that are indirect owners of Borrower who do not otherwise fall within clauses (A) through (C)  above); (v) no portion of the Property has been or will be purchased with proceeds of any illegal activity;  (vi) Borrower, SPE Component Entity, Mortgage Borrower, Mortgage Borrower SPE Component Entity  and Guarantor are (and have always been) operated under policies, procedures and practices, if any, that  are in compliance with the Prescribed Laws and available to Lender for review and inspection during normal  business hours and upon reasonable prior notice; (vii) none of Borrower, SPE Component Entity, Mortgage  Borrower, Mortgage Borrower SPE Component Entity Guarantor, or any Person that Controls them is 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, nor any official of any State, claiming a violation or  possible violation of Prescribed Laws. Borrower represents and warrants that, in connection with this  Agreement, Borrower, Mortgage Borrower and, to Borrower’s knowledge, each Person that has an  economic interest in Borrower or Mortgage Borrower, has complied with and will continue to comply with  all applicable anti-bribery and corruption laws and regulations, including the U.S. Foreign Corrupt Practices  Act of 1977 and the U.K. Bribery Act 2010. Borrower shall, at all times throughout the term, maintain and  enforce appropriate policies, procedures and controls to ensure compliance with the Anti-Corruption  Obligation.  (k) Minimum Equity Requirement Satisfaction. As of the Closing Date, direct and  indirect owners in Borrower, in the aggregate, have invested no less than the Closing Date Minimum Equity  Requirement.  (l) Required Equity/Control Requirements. The Required Equity/Control  Requirements are satisfied.  4.1.2 Property.  (a) Title.  Mortgage Borrower has good, marketable and insurable fee simple title to  the part of the Property comprising real property (including, without limitation, the entirety of the alley  running through, and along the periphery of, the Property, which alley has been dedicated for public use by  virtue of an easement vested in the City of Los Angeles for street purposes) and good title to the balance of  the Property, free and clear of all Liens whatsoever except the Permitted Encumbrances (as defined in the  Mortgage Loan Agreement). Borrower has good and insurable title to the Collateral, free and clear of all  Liens whatsoever except the Permitted Encumbrances.  There are no Liens on the direct or indirect Equity  Interests in Borrower or Mortgage Borrower (other than the Lien created by the Loan Documents and  Permitted Encumbrances and Liens encumbering shares publicly traded on a nationally or internationally  recognized stock exchange).  None of the Property or any part thereof, the Collateral or any part thereof, or  any direct or indirect Equity Interests in Borrower or Mortgage Borrower, are subject to any purchase  options, rights of first refusal, rights of first offer or other similar rights in favor of any Person.  The  Permitted Encumbrances in the aggregate do not materially and adversely affect the value, operation or use  of the Property (as currently used) or the Collateral or Borrower’s ability to repay the Loan or Mortgage  Borrower’s ability to repay the Mortgage Loan.  The Pledge Agreement creates a valid, perfected first  priority lien in and to Borrower’s right, title and interest to the Collateral, subject only to Permitted  Encumbrances.  There are no claims for payment for work, labor or materials affecting the Property or the  Collateral, which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan  

 

   -75-  29949910.v4  Documents or the Mortgage Loan Documents.  This Agreement, together with the other applicable Loan  Documents, creates a valid and continuing security interest (as defined in the UCC) in each of the Accounts  in favor of Lender, which security interest is prior to all other Liens and is enforceable as such against  creditors of and purchasers from Borrower. Other than in connection with the Loan Documents and except  for Permitted Encumbrances, Borrower has not sold or otherwise conveyed the Accounts. Neither Borrower  nor Mortgage Borrower is a party to any outstanding contract or agreement requiring it to convey its interest  in the Property or the Collateral to any Person, other than the conveying by Mortgage Borrower of the  leasehold interest granted pursuant to the Master Lease.  (b) Compliance.  Borrower, Mortgage Borrower, the Collateral and the Property  (including the use thereof) comply in all material respects with all applicable Legal Requirements, including  building and zoning ordinances and codes and Prescribed Laws. Pursuant to all Legal Requirements,  Mortgage Borrower has sufficient development rights to construct the Project and there are no remaining  zoning or discretionary approvals required in order to complete the Required Improvements. There has not  been committed by Borrower or to Borrower’s knowledge, any other Person in occupancy of or involved  with the operation or use of the Property or the Collateral any act or omission affording any Governmental  Authority the right of forfeiture as against the Property or any part thereof or the Collateral or any part  thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents.   In the event that all or any part of the Improvements are destroyed or damaged, said Improvements can be  legally reconstructed to their condition prior to such damage or destruction, and thereafter exist for the same  use without violating any zoning or other ordinances applicable thereto and without the necessity of  obtaining any variances or special permits.  No legal proceedings are pending or, to the knowledge of  Borrower, threatened in writing with respect to the zoning of the Property.  Neither the zoning nor any other  right to construct, use or operate the Property is in any way dependent upon or related to any property other  than the Property (except for any easements or rights-of-way which are Permitted Encumbrances).  The use  being made of the Property is (or with respect to the Project, will be upon Completion) in conformity with  the certificate of occupancy issued for the Property and all other restrictions, covenants and conditions  affecting the Property.  The Loan is solely for the business purpose of Borrower, and is not for personal,  family, household, or agricultural purposes.  (c) Condemnation.  No Condemnation or other similar proceeding has been  commenced or, to Borrower’s best knowledge, is threatened or contemplated with respect to all or any  portion of the Property or for the relocation of any roadway providing access to the Property.  (d) Utilities and Public Access.  The Property is located on or adjacent to a public  road and has direct legal access to such road (or has access to it via an irrevocable easement or irrevocable  right of way permitting ingress and egress to and from such public road), and is served by water, sewer,  sanitary sewer and storm drain facilities adequate to service the Property for its intended uses.  All public  utilities necessary or convenient to the full use and enjoyment of the Property are located either in the public  right-of-way abutting the Property (which are connected so as to serve the Property without passing over  other property) or in recorded easements serving the Property and such easements are set forth in and  insured by the Title Insurance Policy.  All easements, cross easements, licenses, air rights and rights-of-way  or other similar property interests, if any, necessary for the full utilization of the Improvements for their  intended purposes have been obtained, are described in the Title Insurance Policy and are in full force and  effect without default thereunder.  All roads necessary for the use of the Property for its current purpose  have been completed and dedicated to public use and accepted by all Governmental Authorities.  (e) Separate Lots.  The Property is comprised of one (1) or more parcels that  constitute one (1) or more separate tax lots and do not constitute a portion of any other tax lot that is not a  part of the Property.  

 

   -76-  29949910.v4  (f) Assessments.  There are no pending or, to Borrower’s knowledge, proposed  special or other assessments for public improvements or otherwise affecting the Property, nor are there any  contemplated improvements to the Property that may result in such special or other assessments.  (g) Insurance.  Borrower has obtained and has delivered (or has caused Mortgage  Borrower to obtain and deliver) to Lender certificates for all Policies required hereunder, with all premiums  currently payable thereunder having been paid, reflecting the insurance coverages, amounts and other  requirements set forth in this Agreement.  No claims have been made under any such Policies, and no  Person has done, by act or omission, anything that would impair the coverage of any such Policies.  (h) Use of Property; Licenses.  The Property is used exclusively as a life sciences  research  related manufacturing and office facility and other appurtenant and related uses.  All certifications,  permits, licenses and approvals (including  certificates of completion and occupancy permits (or its  equivalent)) required for the legal use, occupancy and operation of the Property as described in the  foregoing sentence (collectively, the “Licenses”), have been obtained and are in full force and effect. As of  the Closing Date, Borrower has delivered to Lender copies of all other material Licenses which are required  for the legal use, occupancy and operation of the Property.  (i) Flood Zone.  Except as may be shown on the Survey, none of the Improvements  on the Property are located in an area identified by the Federal Emergency Management Agency as an area  having special flood hazards (or, if so located, the flood insurance required pursuant to Section 6.1(a)(i) of  the Mortgage Loan Agreement is in full force and effect with respect to the Property).  (j) Physical Condition.  Except for the matter set forth on Schedule VII hereto (the  costs of which are covered by insurance), subject to Completion of the Project, the Property (including all  buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems,  HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and  doors, landscaping, irrigation systems and all structural components) is in good condition, order and repair  in all material respects.  Except for the matter set forth on Schedule VII hereto (the costs of which are  covered by insurance), to Borrower’s knowledge, and subject to Completion of the Project, there exists no  structural or other material defects or damages in the Property, whether latent or otherwise, and Borrower  has not received written notice from any insurance company or bonding company of any defects or  inadequacies in the Property, or any part thereof, which would adversely affect the insurability of the same  or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened  termination of any policy of insurance or bond. Except for the matter set forth on Schedule VII hereto (the  costs of which are covered by insurance), the Improvements have suffered no material casualty or damage  which has not been fully repaired and the cost thereof fully paid.  (k) Boundaries; Survey.  All of the improvements which were included in  determining the appraised value of the Property lie wholly within the boundaries and building restriction  lines of the Property, and no improvements on adjoining properties encroach upon the Property, and no  easements or other encumbrances upon the Property encroach upon any of the Improvements, so as to affect  the value or marketability of the Property except those which are insured against by the Title Insurance  Policy.  The Survey does not fail to reflect any material matter affecting the Property or the title thereto.  (l) Leases.  (i) The Property is not subject to any Leases other than the Master Lease, and  the demised premises under the Master Lease constitute the entirety of the Land and the  Improvements. The initial term of the Master Lease does not expire prior to the date that is  the later to occur of the date that is (A) fifteen (15) years following the Must-Take Space  

 

   -77-  29949910.v4  Commencement Date (as defined in the Master Lease and (B) fifteen (15) years following  the Closing Date. Master Tenant is required to commence payment of base rental payments  under the Master Lease, with respect to Building A, not later than the Closing Date, and,  with respect to the Required Improvements, on the date (such date, the “Master Lease  Payment Outside Date”) that is the earlier to occur of (x) the date on which the Project is  Substantially Complete and (y) the Substantial Completion Due Date.  (ii) With respect to each Lease (including, without limitation, the Master  Lease, (A) Mortgage Borrower is the owner of landlord’s interest in such Lease, (B) other  than with respect to Permitted Encumbrances, no Person has any possessory interest in the  Property or right to occupy the same except under and pursuant to the provisions of such  Lease, (C) such Lease is in full force and effect, the tenants thereunder have accepted  possession of and are in occupancy of all of their respective demised premises (except,  prior to the Substantial Completion Due Date, Building B), are open for business, and are  paying (except, prior to the Master Lease Payment Outside Date, the Master Lease  Payments in respect of Building B) full, unabated rent, and no tenant under such Lease has  given Borrower or Mortgage Borrower any notice of its intent to terminate such Lease or  vacate the leased premises (and Borrower has no knowledge that any such tenant intends  to so terminate or vacate), (D) neither Borrower or Mortgage Borrower has received written  notice from any tenant under such Lease claiming that Mortgage Borrower (or any prior  landlord) is in default thereunder, and to the knowledge of Borrower there are no defaults  under such Lease by any party thereto, (E) no Revenue has been paid more than one  (1) month in advance of its due date, (F) all work to be performed by Mortgage Borrower  (or any prior landlord) under such Lease (other than, with respect to the Master Lease, the  Required Improvements) has been performed as required and has been accepted by the  applicable tenant, (G) any payments, free rent, partial rent, rebate of rent or other payments,  credits, allowances or abatements required to be given by Mortgage Borrower to any tenant  has already been received by such tenant, (H) all security deposits are held by Mortgage  Borrower in accordance with the terms of such Lease and applicable Legal Requirements,  (I) no tenant under such Lease is a debtor in state or federal bankruptcy, insolvency, or  similar proceeding, (J) other than Master Tenant under the Master Lease, no tenant under  such Lease (or any sublease) is an Affiliate of Borrower or Mortgage Borrower, (K) except,  in each case, in accordance with the express provisions of this Agreement, no tenant has  assigned any interest in such Lease or sublet all or any portion of the premises demised  thereby, no such tenant holds its leased premises under assignment or sublease, nor does  anyone except such tenant and its employees occupy such leased premises, (L) there are  no brokerage fees or commissions due and payable in connection with such Lease, and no  such fees or commissions will become due and payable in the future in connection with  such Lease, including by reason of any extension of such Lease or expansion of the space  leased thereunder, in each case except as has previously been disclosed to Lender in  writing, (M) no tenant under such Lease has a right or option pursuant to such Lease or  otherwise to purchase all or any part of the leased premises or the building of which the  leased premises are a part, (N) no tenant under such Lease has any right or option for  additional space in the Improvements, (O) other than as expressly permitted under the  Master Lease, no hazardous wastes or toxic substances, as defined by applicable federal,  state or local statutes, rules and regulations, have been disposed, stored or treated by any  tenant under such Lease on or about the leased premises nor does Borrower have any  knowledge of any tenant’s intention to use its leased premises for any activity which,  directly or indirectly, involves the use, generation, treatment, storage, disposal or  transportation of any petroleum product or any toxic or hazardous chemical, material,  substance or waste,  and (P) such Lease (including any renewal or expansion options)  

 

   -78-  29949910.v4  provides that it is subordinate to the Security Instrument and that the lessee agrees to attorn  to Lender or any purchaser at a sale of the Collateral by foreclosure or power of sale.  (m) Filing and Recording Taxes.  All transfer taxes, deed stamps, intangible taxes or  other amounts in the nature of transfer taxes required to be paid by any Person under applicable Legal  Requirements currently in effect in connection with the transfer of the Property to Mortgage Borrower have  been paid.  All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by  any Person under applicable Legal Requirements currently in effect in connection with the execution,  delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents,  including the Pledge Agreement, have been paid, and, under current Legal Requirements, the Pledge  Agreement and the other Loan Documents have been validly executed and delivered and are enforceable in  accordance with their respective terms by Lender (or any subsequent holder thereof), subject to principles  of equity and bankruptcy, insolvency and other laws generally applicable to creditors’ rights and the  enforcement of debtors’ obligations.  (n) Management Agreement.  As of the Closing Date, Mortgage Borrower self- manages the Property and no agent, affiliated or unaffiliated with Borrower, receives a fee or other  compensation for managing the Property. If Mortgage Borrower is required to engage a Qualified Manager  in accordance with Section 5.1.2(f)(ii), then the Management Agreement is in full force and effect and there  is no default thereunder by Mortgage Borrower or, to Borrower knowledge, by the Manager and no event  has occurred that, with the passage of time and/or the giving of notice would constitute a default thereunder.  (o) REA.  Each REA is in full force and effect and neither Mortgage Borrower nor, to  Borrower’s knowledge, any other party to any REA, is in default thereunder, and to Borrower’s knowledge,  there are no conditions which, with the passage of time or the giving of notice, or both, would constitute a  default thereunder.  No REA has been modified, amended or supplemented, except as set forth on Schedule  VI hereto.  (p) Material Agreements.  There are no Material Agreements in place with respect  to Borrower or the Collateral. As of the Closing Date, there are no Material Agreements in place with  respect to Mortgage Borrower or the Property other than as set forth in Schedule III attached hereto. With  respect to each Material Agreement, Borrower hereby represents that (i) each Material Agreement has not  been amended, restated, replaced or otherwise modified (except, in each case, in accordance with this  Agreement) and, to Borrower’s knowledge, is in full force and effect, (ii) there are no material defaults  (following applicable notice and cure periods) under any Material Agreement by Mortgage Borrower or to  Borrower’s knowledge, any other Person under the applicable Material Agreement, (iii) no party to any  Material Agreement has commenced any action or given or received any written notice for the purpose of  terminating any Material Agreement, and (iv) to Borrower’s knowledge, the representations made in any  estoppel certificate (if any) delivered with respect to any Material Agreement in connection with the Loan  are true, complete and correct.   4.1.3 Construction Matters.  (a) Labor.  No organized work stoppage or labor strike is pending or, to Borrower’s  knowledge, threatened by employees and other laborers at the Property.  None of Borrower, Mortgage  Borrower or, to Borrower’s knowledge, General Contractor (i) is involved in or threatened with any labor  dispute, grievance or litigation relating to labor matters involving any employees and other laborers at the  Property, including violation of any federal, state or local labor, safety or employment laws (domestic or  foreign) and/or charges of unfair labor practices or discrimination complaints; (ii) has engaged in any unfair  labor practices within the meaning of the National Labor Relations Act or the Railway Labor Act at the  Property; or (iii) is a party to, or bound by, any collective bargaining agreement or union contract with  

 

   -79-  29949910.v4  respect to employees and other laborers at the Property except as disclosed by Borrower to Lender in  advance and in writing and as approved in advance in writing by Lender (collectively, the “Labor  Agreements”).  (b) Construction Documents.  (i) Mortgage Borrower has all necessary power and authority to enter into and  perform its respective obligations under the Construction Documents to which Mortgage  Borrower is a party, and all other agreements and instruments to be executed by Mortgage  Borrower in connection with the construction and the development of the Project.  (ii) The Existing Construction Documents to which Mortgage Borrower is a  party have been, and any Future Construction Documents to which Mortgage Borrower  will be a party will be, duly executed and delivered by Mortgage Borrower.  (iii) The Existing Construction Documents to which Mortgage Borrower is a  party constitute, and any Future Construction Documents to which Mortgage Borrower  will be a party will constitute, when executed and delivered, a legal, valid and binding  obligation of Mortgage Borrower, enforceable against Mortgage Borrower in accordance  with its terms, subject only to applicable bankruptcy, insolvency and similar laws generally  affecting rights of creditors and the enforcement of debtors’ obligations, and by general  principles of equity (regardless of whether enforcement is sought in a proceeding in equity  or at law).  (iv) General Contractor has engaged subcontractors under subcontracts  representing one hundred percent (100%) of all subcontract amounts under the  Construction Budget (which shall include all of the Major Trade Contracts and the related  Major Trade Contractors under such Major Trade Contracts).  (v) Mortgage Borrower has obtained all Construction Permits (A) required for  Mortgage Borrower and/or General Contractor to commence construction work  constituting the applicable Required Improvements, and (B) otherwise then-required under  Legal Requirements for the actual stage of construction on the Property, and, in each case,  a true, complete and correct list of such Construction Permits is attached as Schedule V  hereto.  (vi) Borrower shall have delivered (or caused Mortgage Borrower to deliver)  evidence reasonably satisfactory to Lender that each of the Design Drawings and the  Construction Drawings with respect to the Required Improvements on such Parcel are  100% complete.  (c) No Violation.  The construction of the Project and the execution, delivery and  performance by Mortgage Borrower of its obligations under, and the consummation of the transactions  contemplated by each of the Construction Documents to which Mortgage Borrower is, or will be, a party,  and all other agreements and instruments to be executed by Borrower or Mortgage Borrower in connection  therewith do not and will not (i) violate any Legal Requirement applicable to Borrower or Mortgage  Borrower in any material respect, (ii) result in a breach of any of the terms, conditions or provisions of, or  constitute a default under the organizational documents of Borrower or Mortgage Borrower, or result in a  material breach of the terms, conditions or provisions of any mortgage, indenture, agreement, permit,  franchise, license, note or instrument to which Borrower or Mortgage Borrower is a party or by which it or  any of its properties is bound, or (iii) result in the creation or imposition of any mortgage, lien, charge or  

 

   -80-  29949910.v4  encumbrance of any nature whatsoever upon any of the assets of Borrower (except as contemplated by this  Agreement and the Permitted Encumbrances) or Mortgage Borrower (except as contemplated by the  Mortgage Loan Agreement and the Permitted Encumbrances (as defined in the Mortgage Loan  Agreement)).  (d) Consents.  All consents, approvals, orders or authorizations of, or registrations,  declarations or filings with, or other actions in respect of or by, any Governmental Authorities that are  required in connection with the execution, delivery and performance by Mortgage Borrower of the  Construction Documents and all other agreements and instruments to be executed by Borrower or Mortgage  Borrower in connection therewith and the construction and operation of the Project have been obtained or  will be obtained when required for the then applicable stage of construction of the Project and are or will  be in full force and effect.  (e) Plans and Specifications.  The Plans and Specifications applicable up to and  including the current stage construction as set forth in the Construction Schedule have been approved, to  the extent required by applicable Legal Requirements and by all applicable Governmental Authorities.  The  anticipated use of the Project complies in all material respects with all REAs and all Material Agreements  affecting the Property and all Legal Requirements, including all applicable zoning ordinances and  regulations and Environmental Laws.  (f) Compliance with Building Codes and Zoning Laws.  The current land use,  zoning law, regulations and declarations covering the Property permit on an as-of-right basis the  construction of the Project to be completed substantially in accordance with the Plans and Specifications,  the current zoning law and declarations covering the Property permit the Project to be operated and used as  contemplated by this Agreement and the other Loan Documents, and no additional variance, conditional  use permit, special use permit or other similar approval is required for such construction, use and occupancy  of the Project that has not been or will not, if and when required, be obtained.  The Property currently and,  upon completion of construction of the Project substantially in accordance with the Plans and  Specifications, the use thereof will be in all material respects in compliance with all current Construction  Permits then required and Operating Permits then required, as the case may be, and all other applicable  Legal Requirements, and such compliance is not dependent on any land, improvements or facilities that are  not a part of the Property, other than easement, encroachment and similar rights granted to the Property  pursuant to REAs. There are no pending or, to Borrower’s knowledge, threatened actions, suits or  proceedings to revoke, attach, invalidate, rescind or modify the zoning applicable to the Property or any  part thereof or any of the Current Construction Permits, as currently existing.  (g) Certain Agreements.  The Existing Construction Documents heretofore executed  by, or assigned to and assumed by, Mortgage Borrower are in full force and effect, have not been amended,  modified, terminated, assigned or otherwise changed (except as set forth on Schedule I), or the provisions  thereof waived.  (h) Construction Budget.  As of the Closing Date and as of each date on which this  representation is deemed remade, the Construction Budget (as the same may be amended from time to time  in accordance with this Agreement) accurately reflects Borrower’s and Mortgage Borrower’s best good  faith estimate of all anticipated Hard Costs, Soft Costs, Interest and Carry Costs and any other costs and  expenses reasonably anticipated to be incurred in connection with the construction, development and  operation of the Project.  (i) Loan Proceeds and Adequacy.  The sum of (i) the Loan Amount to be advanced  by Lender pursuant to this Agreement, (ii) the Mortgage Loan Amount to be advanced by Lender pursuant  to the Mortgage Loan Agreement, (iii) amounts that are guaranteed pursuant to the Equity Funding  

 

   -81-  29949910.v4  Guaranty (provided that no claim is then being pursued by Lender in respect of any of the Guarantees and  Guarantor is not then in default or in breach of any of its obligations in respect of any of the Guarantees),  and (iv) any amounts in the Deficiency Account, are sufficient to pay (A) all Costs necessary for Completion  of the Project substantially in accordance with the Construction Budget and the Plans and Specifications  and (B) all Interest and Carry Costs.  4.1.4 Financial Information; Disclosure.  All information submitted to Lender (including all  financial statements, rent rolls, reports, certificates and other documents submitted in connection with the  Loan or in satisfaction of the terms thereof, and all statements of fact made in this Agreement or in any  other Loan Document) (a) are accurate, complete and correct in all material respects as of the date given,  (b) accurately represent the financial condition of Borrower, Mortgage Borrower, Guarantor, the Collateral  and/or Property as of the date of such reports (as applicable), (c) to the extent prepared, audited or reviewed  by an Independent Accountant, have been prepared, audited or reviewed in accordance with the Approved  Accounting Method throughout the periods covered (except as disclosed therein), and (d) do not omit to  state any material fact necessary to make statements contained herein or therein not misleading.  Except for  Permitted Encumbrances, Borrower does not have any contingent liabilities, liabilities for taxes, unusual  forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments  that are known to Borrower and reasonably likely to have a Material Adverse Effect, except as referred to  or reflected in such financial statements.  There has been no material adverse change in any condition, fact,  circumstance or event that would make any such information inaccurate, incomplete or otherwise  misleading in any material respect or that would be reasonably likely to have a Material Adverse Effect.   Borrower has disclosed to Lender all material facts that could cause any information provided to Lender or  any representation or warranty made in any of the Loan Documents concerning Borrower, any SPE  Component Entity, Mortgage Borrower, any Mortgage Borrower SPE Component Entity, Guarantor,  Manager, the Collateral or the Property, to be materially misleading.  No statement of fact made by  Borrower or Guarantor in any of the Loan Documents to which such Person is a party contains any untrue  statement of a material fact or omits to state any material fact presently known to such Person and necessary  to make statements contained herein or therein not misleading.  4.1.5 Mortgage Loan Matters.  (a) True, correct and complete copies of each Mortgage Loan Document have been  delivered to Lender, and such Mortgage Loan Documents have not been amended or modified except as  disclosed in writing to Lender.  (b) The Mortgage Loan Documents are in full force and effect, (ii) no default or event  of default has occurred and is continuing thereunder, and (iii) there is no existing condition which, but for  the passage of time and/or the giving of notice, could result in a default or event of default under the terms  of the Mortgage Loan Documents. Neither Mortgage Borrower nor Mortgage Lender has commenced any  action or given or received any written notice of default or termination under any of the Mortgage Loan  Documents.  4.1.6 Interests in Mortgage Borrower Certificated.  The limited liability company interests in  Mortgage Borrower are and shall at all times during the term of the Loan be evidenced by a “certificated  security” governed by Article 8 of the UCC.  Mortgage Borrower has “opted in” to Article 8 of the UCC,  has not opted out and Borrower shall not permit Mortgage Borrower to opt out of such Article 8 of the  UCC, and Borrower shall cause a registry of the holders of limited liability company interests in Mortgage  Borrower to be maintained at all times.   4.1.7 Mortgage Loan Representations and Warranties.  All of the representations and  warranties contained in the Mortgage Loan Documents are hereby incorporated into this Agreement and  

 

   -82-  29949910.v4  deemed made hereunder as and when made thereunder, which shall remain incorporated herein without  regard to any waiver, amendment or other modification thereof by Mortgage Lender or to whether the  related Mortgage Loan Document has been repaid or otherwise terminated, unless otherwise consented to  in writing by Mortgage Lender, as the same may be updated or modified as provided therein.  4.1.1 No Contractual Obligations. Other than the Loan, the Loan Documents, the  organizational documents entered into by Borrower, any Independent Manager service agreement entered  into by Borrower that is approved by Lender and the Interest Rate Cap Agreement, as of the date of this  Agreement, Borrower is not subject to any Contractual Obligations and has not entered into any agreement,  instrument or undertaking by which it or its assets are bound, or has incurred any Indebtedness, in each  case, in violation of this Agreement.  4.1.2 Pledged Securities. There are no Liens on the Pledged Company Interests (other than the  Liens created by the Loan Documents).  4.1.3 No Default Under Mortgage Loan. No Mortgage Loan Event of Default has occurred  and, to Borrower’s knowledge, there exists no default with the giving of notice would constitute a Mortgage  Loan Event of Default.  4.1.4 UCC Insurance Policy. Borrower has caused Title Company to deliver to Lender a UCC  Title Policy with respect to the Collateral dated as of the Closing Date. The UCC Title Policy (i) provides  coverage in the amount of the Loan, (ii) insures Lender that the Pledge Agreement insured by the UCC  Title Policy creates a valid, perfected lien on the Collateral of the requisite priority and that Borrower is the  sole owner of the Collateral, free and clear of all exceptions from coverage other than the standard  exceptions and exclusions from coverage, (iii) contains such endorsements and affirmative coverages as  Lender has reasonably requested, and (iv) names Lender as the insured. The UCC Title Policy is freely  assignable. Borrower has, or will have on the Closing Date, paid all premiums in respect of the UCC Title  Policy.  SECTION 4.2. Survival of Representations.  Borrower agrees that all of the representations and  warranties of Borrower set forth in Section 4.1 hereof and elsewhere in this Agreement and in the other  Loan Documents shall survive for so long as any amount remains owing to Lender under this Agreement  or any of the other Loan Documents by Borrower.  All representations, warranties, covenants and  agreements made in this Agreement or in the other Loan Documents by Borrower shall be deemed to have  been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or  on its behalf.  ARTICLE V    BORROWER COVENANTS  SECTION 5.1. Covenants.  From the Closing Date and until payment and performance in full of  all Obligations (other than contingent indemnification obligations which expressly survive the repayment  of the Debt), in accordance with the terms of this Agreement and the other Loan Documents, Borrower  hereby covenants and agrees with Lender that it shall comply with the following (and where applicable  Borrower shall cause Mortgage Borrower to comply with the following):  5.1.1 Borrower.  (a) Existence; Compliance with Legal Requirements.  Borrower shall (and shall  cause Mortgage Borrower to) do or cause to be done all things necessary to preserve, renew and keep in  

 

   -83-  29949910.v4  full force and effect its existence, rights, licenses, permits, franchises, and trade names required for the  operation of the Property and the Collateral pursuant to Legal Requirements (and other material agreements  entered into by Borrower  or Mortgage Borrower in accordance with the terms of this Agreement) in the  manner presently being conducted.  Borrower shall (and shall cause Mortgage Borrower to) comply with  all Legal Requirements applicable to it, the Collateral and the Property, including Prescribed Laws (subject  to Borrower’s right to contest the applicability of any such Legal Requirement in accordance with Section  5.1.2(b) below).  (b) Organization; Compliance with Legal Requirements; Special Purpose Entity.  (i) Borrower shall not (and shall not cause or permit Mortgage Borrower to):   (A) change its principal place of business or state of organization without first giving  Lender thirty (30) days’ prior notice; (B) fail to be a Special Purpose Entity or, in the case  of Mortgage Borrower, a Special Purpose Entity (as defined in the Mortgage Loan  Agreement), or fail to cause any SPE Component Entity required hereunder or any  Mortgage Borrower SPE Component Entity to be a Special Purpose Entity, or fail to cause  all assumptions contained in any opinion concerning substantive consolidation delivered  to Lender in connection with the Loan to be true and correct in all material respects; (C)  remove or replace any Independent Director or Independent Manager except for Cause,  and in any event not without providing at least five (5) Business Days’ advance written  notice thereof to Lender; (D) to the fullest extent permitted by applicable Legal  Requirements, engage (nor permit Mortgage Borrower, any SPE Component Entity  required hereunder or any Mortgage Borrower SPE Component Entity required under the  Mortgage Loan Agreement to engage) in any dissolution, liquidation, or consolidation or  merger with or into any other business entity; (E) modify, amend, waive or terminate (nor  permit Mortgage Borrower, any SPE Component Entity required hereunder or any  Mortgage Borrower SPE Component Entity required under the Mortgage Loan Agreement  to modify, amend, waive or terminate) its organizational documents (other than pursuant  to amendments that are solely ministerial in nature); (F) fail to maintain qualification to do  business in any jurisdiction to the extent the same is required for the ownership of the  Collateral or Mortgage Borrower’s ownership, maintenance, management and operation of  the Property; or (G) cease to operate the Property in the manner in which it is presently  being operated (other than temporary cessation in connection with any continuous and  diligent renovation or restoration of the Property following a Casualty or Condemnation),  or change the trade name or names under which it operates the Property. Notwithstanding  anything to the contrary herein, in the event of the death, legal incapacity, or voluntary  non-collusive resignation of an Independent Director or Independent Manager, no prior  written notice to Lender shall be required, provided that, within two (2) Business Days  after Borrower’s knowledge of such, Borrower shall provide to Lender, the identity of the  proposed replacement Independent Director or Independent Manager, as applicable,  together with a certification that such replacement satisfies the requirements set forth with  respect to an Independent Director or Independent Manager in this Agreement.  (ii) Borrower shall not (and shall not cause or permit Mortgage Borrower to)  (A) violate, and shall not permit any other Person in occupancy of or involved with the  operation or use of the Property to violate, any Prescribed Laws or otherwise commit any  act or omission affording any Governmental Authority the right of forfeiture against the  Property or any part thereof or any monies paid in performance of Borrower’s obligations  under any of the Loan Documents or Mortgage Borrower’s obligations under any of the  Mortgage Loan Documents, or (B) at all times throughout the term of the Loan, including  after giving effect to any Transfers permitted pursuant to the Loan Documents, permit (or  

 

   -84-  29949910.v4  allow to occur) (I) any of the funds or other assets of Borrower, SPE Component Entity,  Mortgage Borrower, Mortgage Borrower SPE Component Entity, or Guarantor to  constitute property of, or be beneficially owned, directly or indirectly, by any Embargoed  Person, (II) an Embargoed Person to own any interest of any nature whatsoever in  Borrower, SPE Component Entity, Mortgage Borrower, Mortgage Borrower SPE  Component Entity or Guarantor, as applicable, or (III) any of the funds of Borrower, SPE  Component Entity, Mortgage Borrower, Mortgage Borrower SPE Component Entity or  Guarantor, as applicable, to be derived from any unlawful activity, in each case with respect  to the foregoing clauses (I) through (III) with the result that the investment in Borrower,  SPE Component Entity, Mortgage Borrower, Mortgage Borrower SPE Component Entity  or Guarantor, as applicable (whether directly or indirectly), is or would be prohibited by  applicable Legal Requirements, or the Loan is or would be in violation of applicable Legal  Requirements.  Borrower covenants and agrees that in the event Borrower receives any  notice that Borrower  or Mortgage Borrower (or any of the beneficial owners, affiliates or  participants of Borrower or Mortgage Borrower) or any Person that owns a direct or  indirect interest in the Collateral or the Property (other than a public shareholder of  Guarantor) becomes an Embargoed Person or is indicted, arraigned, or custodially detained  on charges involving money laundering or predicate crimes to money laundering, Borrower  shall promptly notify Lender.  At Lender’s option, it shall be an Event of Default hereunder  if any of the representations and warranties contained in Section 4.1.1(j) hereof are untrue  in any material respect at any time.  Borrower acknowledges that the Prescribed Laws  require all financial institutions to obtain, verify and record certain information that  identifies individuals or business entities which open an “account” with such financial  institution.  Consequently, Lender may from time-to-time request, and Borrower shall  provide to Lender, Borrower’s name, address, tax identification number and/or such other  identification information as shall be necessary for Lender to comply with federal law  (including such information concerning its direct and indirect owners), and re-make the  representations and warranties contained in Section 4.1.1(j) hereof.  An “account” for this  purpose may include, without limitation, a deposit account, cash management service, a  transaction or asset account, a credit account, a loan or other extension of credit, and/or  other financial services product.  (iii) Required Equity/Control Requirements. The Required Equity/Control  Requirements shall remain satisfied at all times.  (c) ERISA.  Assuming that no portion of the Loan is funded (initially or through  participation, assignment, transfer or securitization of the Loan) with plan assets of any plan covered by  ERISA or §4975 of the Code, unless the Lender (or other applicable party) relied on an available prohibited  transaction exemption, all of the conditions of which are and will continue to be satisfied, Borrower shall  not (and shall not cause or permit Mortgage Borrower to) engage in any transaction that would cause any  obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the  Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited  transaction under ERISA, or otherwise cause Borrower to be unable to make the representations contained  in Section 4.1.1(g) hereof.  Borrower further covenants and agrees to deliver to Lender such certifications  or other evidence from time to time throughout the term of the Loan, as reasonably requested by Lender,  that (i) the representations contained in Section 4.1.1(g) hereof are true and correct as of the date of such  certification, and (ii) one or more of the following circumstances is true:  (A) Equity Interests in Borrower  are publicly offered securities, within the meaning of 29 C.F.R §2510.3-101(b)(2); (B) 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); (C) 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 (D) the assets of  

 

   -85-  29949910.v4  Borrower and Mortgage Borrower are not otherwise “plan assets” (within the meaning of 29 C.F.R.  §2510.3-101) of one or more “employee benefit plans” (as defined in §3(3) of ERISA) subject to Title I of  ERISA.  (d) Transfers.  (i) Without the prior written consent of Lender, Borrower shall not, and shall  not permit to occur, any (y) Transfer (directly or indirectly, voluntarily or involuntarily, by  operation of law or otherwise, and whether or not for consideration or of record) of the  Property or the Collateral, in each case, any part thereof, or any legal or beneficial interest  therein, or any direct or indirect Equity Interest in any Restricted Party, or (z) effectuate  change of Control of a Restricted Party.  Notwithstanding the foregoing provisions of this  Section 5.1.1(d), the following Transfers (collectively, the “Permitted Transfers”) shall  be permitted without Lender’s consent (subject to the satisfaction of the applicable terms  and conditions set forth below):  (A) Permitted Encumbrances;  (B) Transfers of worn out or obsolete Personal Property that are  promptly replaced with property of equivalent value and functionality if  reasonably necessary or which is no longer necessary in connection with the  operation of any Property;  (C) the Master Lease and any other Leases that have been approved  by Lender (or that do not require Lender’s approval) in accordance with the this  Agreement;  (D) the pledge of any direct or indirect Equity Interest in Mortgage  Borrower by Borrower in connection with the Loan and, Transfer of the direct  Equity Interests in Mortgage Borrower to Lender (and any change of Control in  Mortgage Borrower or Borrower), in each case, pursuant to a foreclosure or  voluntary transfer in lieu thereof to the Lender or other exercise of remedies by  Lender under the Loan Documents;  (E) the Transfer of publicly traded shares on a nationally or  internationally recognized stock exchange in any direct or indirect equity owner of  Borrower; and  (F) Transfer of the Property pursuant to a foreclosure or voluntary  transfer in lieu thereof to Lender or other exercise of remedies by Lender;  provided, however, in each case with respect to any such Transfer described  in clause (E) above, the following conditions are satisfied:  1. to the extent Borrower has knowledge of any Transfer that  would cause the transferee to increase its direct or indirect interest in  Borrower or Mortgage Borrower to an amount which equals or exceeds  10% of the direct or indirect Equity Interests in Borrower or Mortgage  Borrower (and such transferee did not hold at least a 10% interest prior to  such Transfer), Borrower shall give Lender written notice of such  Transfer, and an Officer’s Certificate certifying that the requirements of  

 

   -86-  29949910.v4  this Section 5.1.1(d) have been satisfied, not less than ten (10) Business  Days after Borrower obtains knowledge of such Transfer;  2. such Transfer does not result in the Required  Equity/Control Requirements failing to be satisfied;  3. such Transfer does not and will not result in the  termination or dissolution of Borrower, SPE Component Entity (if any),  Mortgage Borrower, Mortgage Borrower SPE Component Entity (if any)  or Guarantor, by operation of law or otherwise;  4. no such Transfer shall be to any Person that would cause  the representations made in Sections 4.1.1(g), (h) or 4.1.1(j) to be untrue  if made immediately following such Transfer;  5. no such Transfer shall cause Borrower or any SPE  Component Entity or Mortgage Borrower or any Mortgage Borrower SPE  Component Entity to fail to be a Special Purpose Entity after such  Transfer;  6. no such Transfer shall consist of a Transfer of the Equity  Interests in Borrower or Mortgage Borrower owned by SPE Component  Entity (if any) or Mortgage Borrower SPE Component Entity (if any);  7. (I) if such Transfer would cause the transferee to increase  its direct or indirect interest in Borrower or Mortgage Borrower to an  amount which equals or exceeds 10% of the direct or indirect Equity  Interests in Borrower or Mortgage Borrower (and such transferee did not  hold at least a 10% interest prior to such Transfer), such proposed  transferee complies with, (x) other than with respect to Transfers of direct  or indirect ownership interests in Borrower or Mortgage Borrower  constituting publicly traded shares on a nationally or internationally  recognized stock exchange, all of Lender’s “know your customer”  requirements, and (y) all Prescribed Laws and all applicable banking rules  and regulations, and (II) unless the applicable Transfer is a Transfer of  direct or indirect ownership interests in Borrower or Mortgage Borrower  constituting publicly traded shares on a nationally or internationally  recognized stock exchange, Borrower shall, prior to such Transfer, deliver  to Lender (at Borrower’s sole cost and expense) customary searches  (credit, judgment, lien, etc.) acceptable to Lender with respect to such  transferee;  8. if approved by Lender, if any such Transfer results in a  Person owning more than forty-nine percent (49%) of the direct or indirect  interests in Borrower or Mortgage Borrower that did not own such amount  prior to such Transfer or results in a change of Control of Borrower or  Mortgage Borrower, then Lender shall have received a substantive  consolidation opinion in form and content acceptable to Lender; and  

 

   -87-  29949910.v4  9. Borrower shall have reimbursed Lender for all reasonable  and actual out-of-pocket expenses incurred by Lender in connection with  such Transfer.  (ii) 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 a Transfer in violation of this Agreement.  This Section 5.1.1(d) shall  apply to every such Transfer regardless of whether voluntary or not, or whether or not  Lender has consented to any previous such Transfer.  Borrower acknowledges that Lender  has examined and relied on the experience of Borrower and Guarantor in owning and  operating properties such as the Property in agreeing to make the Loan, and will continue  to rely on such Persons’ ownership of Borrower and the Collateral as a means of  maintaining the value of the Collateral as security for repayment of the Debt and the  performance of the Obligations contained in the Loan Documents.  Borrower  acknowledges that Lender has a valid interest in maintaining the value of the Collateral so  as to ensure that, should Borrower default in the repayment of the Debt or the performance  of the Obligations, Lender can recover the Debt by a sale of the Collateral.  For all purpose  under the Loan Documents, a Transfer of the Property, the Collateral, Mortgage Borrower  or Borrower shall include, but not be limited to:  (A) an installment sales agreement  wherein Borrower agrees to sell the Collateral or Mortgage Borrower agrees to sell the  Property, or, in each case, any part thereof, for a price to be paid in installments; (B) an  agreement by Mortgage Borrower leasing all or substantially all of the Property for other  than actual occupancy by a space tenant thereunder, or a sale, assignment or other transfer  of, or the grant of a security interest in, Mortgage Borrower’s right, title and interest in and  to any Leases or any Revenues (provided that the foregoing shall not be construed to  prohibit Mortgage Borrower from entering into a non-binding term sheets for the sale  and/or sale-leaseback of the Property which are not recorded and are expressly subject and  subordinate to the Loan Documents); (C) if a Restricted Party is a corporation, any merger,  consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of  new stock; (D) if a Restricted Party is a limited or general partnership or joint venture, any  merger or consolidation or the change, removal, resignation or addition of a general partner  or the Sale or Pledge of the limited liability company interest of any general partner or any  profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited  partnership interests or any profits or proceeds relating to such limited partnership interest  or the creation or issuance of new limited partnership interests; (E) if a Restricted Party is  a limited liability company, any merger or consolidation or the change, removal,  resignation or addition of a managing member or non-member manager (or if no managing  member, any member) or the Sale or Pledge of the limited liability company interest of a  managing member (or if no managing member, any member) or any profits or proceeds  relating to such limited liability company interest, or the Sale or Pledge of non-managing  limited liability company interests or the creation or issuance of new non-managing limited  liability company interests; (F) if a Restricted Party is a trust or nominee trust, any merger,  consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party  or the creation or issuance of new legal or beneficial interests; or (G) the removal or the  resignation of the Manager other than in accordance with Section 5.1.2(g) hereof.  (iii) Borrower may (and may cause or permit Mortgage Borrower to), without  the consent of Lender, grant easements, restrictions, covenants, reservations and rights of  way in the ordinary course of business for access, water and sewer lines, telephone and  telegraph lines, electric lines or other utilities, provided that no such encumbrance shall  materially impair the utility and operation of the Property or have a Material Adverse  

 

   -88-  29949910.v4  Effect. In connection with any encumbrance permitted pursuant to this Section 5.1.1(d)(iii),  Borrower shall deliver to Lender no less than fifteen (15) Business Days prior written  notice thereof, together with a copy of the applicable instruments, and an Officer’s  Certificate stating (x) the consideration, if any, being paid for such encumbrance is  commercially reasonable and (y) that such encumbrance does not materially impair the  utility and operation of the Property, materially reduce the value of the Property or  otherwise have a Material Adverse Effect. Borrower shall reimburse all of Lender’s costs  and expenses in connection with such encumbrance.  (e) Debt Cancellation.  Borrower shall not cancel or otherwise forgive or release any  claim or debt (other than termination of Leases in accordance herewith) owed to Borrower or Mortgage  Borrower by any Person, except for adequate consideration and in the ordinary course of Borrower’s  business. Borrower shall not cause or permit Mortgage Borrower to cancel or otherwise forgive or release  any claim or debt (other than termination of Leases in accordance herewith) owed to Borrower or Mortgage  Borrower by any Person, except for adequate consideration and in the ordinary course of Mortgage  Borrower’s business.  (f) Reporting.  (i) Borrower will (and will cause Mortgage Borrower to) keep and maintain  or cause to be kept and maintained on a fiscal year basis (commencing January 1 of each  year), in accordance with the Approved Accounting Method and Regulation AB, proper  and accurate books, records and accounts reflecting all of the financial affairs of Borrower  and Mortgage Borrower and all items of income and expense in connection with the  operation of the Collateral or the ownership of the Property, as applicable. Lender shall  have the right from time to time at all times during normal business hours upon reasonable  prior notice (which may be given verbally) to examine such books, records and accounts  at the office of Borrower or any other Person maintaining such books, records and accounts  and to make such copies or extracts thereof as Lender shall desire.  After the occurrence  and during the existence of an Event of Default, Borrower shall pay any reasonable costs  and expenses incurred by Lender to examine Borrower’s and Mortgage Borrower’s  accounting records with respect to the Property, as Lender shall reasonably determine to  be necessary or appropriate in the protection of Lender’s interest.  (ii) Borrower will furnish (or cause to be furnished) to Lender annually, within  ninety (90) days following the end of each fiscal year of Guarantor, a complete copy of  Guarantor’s consolidated annual financial statements (including consolidated statements  of income and expense and cash flow and a consolidated balance sheet for Guarantor and  its subsidiaries) prepared in accordance with the Approved Accounting Method and  Regulation AB and audited by an Independent Accountant, and, if requested by Lender,  Borrower shall deliver to Lender copies of all federal income tax returns to be filed by  Borrower, and statements of profit and loss for Borrower, Mortgage Borrower, the  Collateral and the Property (as applicable) and a balance sheet for Borrower and Mortgage  Borrower.  Borrower shall also provide Borrower-prepared and certified statements which  set forth the financial condition and the results of operations for the Property for such fiscal  year, and shall include, but not be limited to, amounts representing annual Net Operating  Income, Operating Income (and any other Revenues not already included therein) and  Operating Expenses, which shall be accompanied by (A) a comparison of the budgeted  income and expenses and the actual income and expenses for the prior fiscal year (including  Cash Expenses and Extraordinary Expenses for which Borrower or Mortgage Borrower  has received funds pursuant to Section 3.1(b) hereof or of the Mortgage Loan Agreement,  

 

   -89-  29949910.v4  if applicable) with a detailed explanation of any variances of five percent (5%) or more  between budgeted and actual amounts for such periods, and identifying any payment made  to an Affiliate of Borrower or Mortgage Borrower and the reasons therefor; (B) a list of  tenants, if any, occupying more than ten percent (10%) of the total floor area of the  Improvements; (C) a breakdown showing the year in which each Lease then in effect  expires and the percentage of total floor area of the Improvements and the percentage of  base rent with respect to which Leases shall expire in each such year, each such percentage  to be expressed on both a per year and cumulative basis (and such other occupancy statistics  for the Property as Lender may request); (D) an Officer’s Certificate certifying to such  officer’s knowledge that each annual financial statement fairly presents the financial  condition and the results of operations of Borrower, Mortgage Borrower, the Collateral and  the Property being reported upon and that such financial statements have been prepared in  accordance with the Approved Accounting Method and as of the date thereof whether there  exists an event or circumstance which constitutes a Default or Event of Default under the  Loan Documents executed and delivered by, or applicable to, Borrower and if such Default  or Event of Default exists, the nature thereof, the period of time it has existed and the action  then being taken to remedy the same; and (E) a certification to Lender identifying the name  and contact information of each Independent Director or Independent Manager required  hereunder.  (iii) Not later than forty-five (45) days prior to the commencement of each  fiscal year, Borrower shall submit to Lender its proposed annual budget for the Property  detailing all anticipated Operating Expenses and Operating Income for the Property for the  ensuing fiscal year in form reasonably satisfactory to Lender.  Such proposed budget shall  be subject to Lender’s written approval (when so approved, an “Approved Annual  Budget”), not to be unreasonably withheld, conditioned or delayed.  Until such time that  Lender approves a proposed budget, the most recently Approved Annual Budget shall  apply; provided, however, that such Approved Annual Budget shall be deemed adjusted to  reflect actual increases in the amount of Property Taxes, Insurance Premiums and Other  Charges.  The approved Annual Budget for the remainder of calendar year 2022 is attached  hereto as Exhibit D.  (i) Borrower will (and will cause Mortgage Borrower to) furnish, or cause to  be furnished, to Lender on or before thirty (30) days after the end of each calendar quarter,  (A) Borrower’s calculation of the Debt Yield for the twelve (12) month period ending at  the end of such calendar quarter (provided that Borrower may make such calculations using  its reasonable expectation of the adjustments to be made to such calculations pursuant to  the definition of UNOI contained herein) accompanied by an Officer’s Certificate with  respect thereto, together with Borrower’s method of calculation and such detail and  background information as Lender shall reasonably require, (B) accompanied by an  Officer’s Certificate stating that such items are true, correct, accurate, and complete in all  material respects and fairly present in all material respects the financial condition and  results of the operations of Borrower, Mortgage Borrower, the Collateral and the Property  (subject to normal year-end adjustments):  (I) a rent roll for the subject quarter; (II) subject  to any appropriate reconciliations, quarterly and year-to-date operating statements prepared  for each calendar month, noting Net Operating Income, Operating Income (and any other  Revenues not already included therein), and Operating Expenses, and, upon Lender’s  request, other information necessary and sufficient to fairly represent in all material  respects the financial position and results of operation of the Property during such calendar  quarter, and containing a comparison of budgeted income and expenses (including Cash  Expenses and Extraordinary Expenses for which Borrower or Mortgage Borrower has  

 

   -90-  29949910.v4  received funds pursuant to Section 3.1(b) hereof or of the Mortgage Loan Agreement) and  the actual income and expenses together with a detailed explanation of any variances of  five percent (5%) or more between budgeted and actual amounts for such periods, and  identifying any payment made to an Affiliate of Borrower or Mortgage Borrower and the  reasons therefor, all in form reasonably satisfactory to Lender; (III) a reasonably detailed  statement of operating expenses paid by Master Tenant in accordance with the Master  Lease during the subject calendar quarter; (IV) a copy of the quarterly statements for the  Clearing Account prior to such date (if applicable); and (V) upon Lender’s request, such  other information reasonably necessary and sufficient to fairly represent in all material  respects the financial position and results of operation of the Property during such calendar  quarter. In addition, such Officer’s Certificate shall also state that the representations and  warranties of Borrower set forth in Section 4.1.1(h) hereof are true and correct in all  material respects as of the date of such certificate to the actual knowledge of Borrower and  that there are no undisputed trade payables outstanding for more than sixty (60) days from  the later of the date incurred or the date an invoice was issued therefor.  (ii) In the event that Borrower or Mortgage Borrower must incur an  extraordinary Operating Expense not set forth in the Approved Annual Budget (each, an  “Extraordinary Expense”), then Borrower shall promptly deliver to Lender a reasonably  detailed explanation of such proposed Extraordinary Expense for Lender’s approval.  (iii) Any reports, statements or other information required to be delivered  under this Agreement shall be provided to Lender electronically unless Lender requests in  writing for such statements to be delivered in paper form or on a diskette.  Borrower agrees  that Lender may disclose information regarding the Property, the Collateral, Mortgage  Borrower and Borrower that is provided to Lender pursuant to this Section 5.1.1(f) in  connection with a Secondary Market Transaction to such parties requesting such  information in connection with such Secondary Market Transaction.  (iv) If any report, statement or other information required to be delivered to  Lender pursuant to this Section 5.1.1(f) (a “Required Report”) is not timely delivered  (and without limiting the terms and conditions of Article 8 hereof), Borrower shall  promptly pay to Lender, as a late charge, the sum of $200.00 per item per day until such  Required Report is delivered.  (v) Borrower shall furnish to Lender, within thirty (30) days after request,  such further detailed information with respect to the operation of the Property and the  financial affairs of Borrower, Mortgage Borrower, Manager, Guarantor, and their Affiliates  as may be reasonably requested by Lender.  Borrower shall give prompt written notice to  Lender of any litigation or governmental proceedings pending or threatened against  Borrower, any SPE Component Entity, Mortgage Borrower, any Mortgage Borrower SPE  Component Entity’s and Guarantor which would reasonably be expected to have a Material  Adverse Effect.  Borrower shall promptly advise Lender of any material adverse change in  Borrower’s, any SPE Component Entity’s, Mortgage Borrower’s, any Mortgage Borrower  SPE Component Entity’s or Guarantor’s condition, financial or otherwise, or of the  occurrence of any Default or Event of Default.  (g) Distributions. Borrower shall not make (or cause or permit Mortgage Borrower  to make) any distribution, payment on account of, or set apart assets for, a sinking or other analogous fund  for the purchase, redemption, defeasance, retirement or other acquisition of any equity or ownership interest  of Borrower or Mortgage Borrower, whether now or hereafter outstanding, or make any other distribution  

 

   -91-  29949910.v4  in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Borrower or  Mortgage Borrower. Notwithstanding the foregoing Borrower shall have the right to make distributions to  repay the Reimbursable Costs. Notwithstanding the foregoing, distributions deemed made pursuant to  Section 3.7 shall in no event be deemed restricted by this Section 5.1.2.  (h) Minimum Equity Requirement Satisfaction. The Closing Date Minimum  Equity Requirement shall remain satisfied at all times.  (i) No Contractual Obligations. Other than the Loan, the Loan Documents, the  organizational documents entered into by Borrower, any Independent Manager service agreement entered  into by Borrower that is approved by Lender and the Interest Rate Cap Agreement, Borrower shall not  become subject to any Contractual Obligations or enter into any agreement, instrument or undertaking by  which it or its assets will become bound.  5.1.2 Property.  (a) Title to the Property.  Borrower will (and will cause Mortgage Borrower to)  warrant and defend (i) the title to the Property and every part thereof and the Collateral and every part  thereof, and (ii) the validity and priority of the Lien of the applicable Loan Documents, in each case against  the claims of all Persons (subject only to the Permitted Encumbrances).  (b) Taxes, Other Charges, and Liens; Contests.  Borrower shall (or shall cause  Mortgage Borrower to) pay all Property Taxes, Other Charges, and Liens (other than Permitted  Encumbrances) now or hereafter levied or assessed or imposed against the Property or any part thereof  prior to the delinquency thereof; provided, however, Borrower’s obligation to directly pay or cause to be  paid Property Taxes shall be suspended for so long as Borrower complies with the terms and provisions of  Section 3.2(a) hereof (if in effect pursuant to Section 3.7 hereof).  Borrower will deliver to Lender receipts  for payment or other evidence satisfactory to Lender that the Property Taxes and Other Charges have been  so paid no later than ten (10) days prior to the date on which the Property Taxes and/or Other Charges  would otherwise be delinquent if not paid.  Notwithstanding the foregoing, Borrower’s obligation to directly  pay or cause to be paid Property Taxes for which Lender is reserving funds pursuant to Section 3.2(a) hereof  (if in effect pursuant to Section 3.7 hereof) (and to provide evidence of the same) shall be suspended for so  long as Borrower complies with the terms and provisions of said Section 3.2(a) (if in effect pursuant to  Section 3.7 hereof).  Borrower, at its own expense, may contest or permit Mortgage Borrower to contest (in  each case, after prior written notice to Lender) by appropriate legal proceeding, promptly initiated and  conducted in good faith and with reasonable diligence, the amount or validity or application in whole or in  part of any Property Taxes, Other Charges, or any Lien on the Property, and/or the applicability of any  Legal Requirement, provided that:  (i) such proceeding shall be permitted under and be conducted in  accordance with the provisions of any other instrument to which Borrower, Mortgage Borrower, the  Property, the Collateral or any collateral for the Loan, as applicable, is subject and shall not constitute a  default thereunder, and such proceeding shall be conducted in accordance with all applicable statutes, laws  and ordinances; (ii) none of the Property or any part thereof or interest therein or the Collateral or any part  thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (iii)  Borrower shall promptly, upon final non-appealable determination thereof, pay the amount of any such  Property Taxes, Other Charges, or Lien (together with all costs, interest and penalties which may be payable  in connection therewith) and/or comply with such contested Legal Requirement; and (iv) such proceeding  shall suspend the collection of such contested Property Taxes, or Other Charges (unless Borrower shall  have paid or caused Mortgage Borrower to have paid all such amounts so demanded under protest), and  with respect to Liens, Borrower shall have caused any such Lien to be discharged (by bonding or otherwise)  within thirty (30) days (or sooner if required to avoid a forfeiture of the Property) of the filing thereof, or  Borrower shall furnish such security as may be requested by Lender (not to exceed one hundred twenty- 

 

   -92-  29949910.v4  five percent (125%) of the amount of such Lien being contested), to insure the payment of any such Property  Taxes, Other Charges, or Liens, together with all interest and penalties thereon (and Lender may pay over  any such security to the claimant entitled thereto at any time when, in the judgment of Lender, the  entitlement of such claimant is established or the Property (or any part thereof or interest therein) shall be  in danger of being sold, forfeited, terminated, cancelled or lost, or there shall be any danger of the Lien of  the Security Instrument or the Pledge Agreement being primed by any related Lien).  Borrower shall  promptly upon final determination thereof pay (or cause Mortgage Borrower to pay) the amount of any  such Property Tax, Other Charge, or Lien, together with all costs, interest and penalties which may be  payable in connection therewith, and comply with any such contested Legal Requirement.  (c) Access to Property.  Borrower shall permit (and cause Mortgage Borrower to  permit) agents, representatives and employees of Lender to inspect the Property or any part thereof at  reasonable hours upon reasonable advance notice (and subject to the rights of tenants under Leases).   Borrower agrees pay or reimburse Lender within ten (10) Business Days after written demand for all  reasonable, out-of-pocket costs and expenses incurred by Lender in connection with the inspections  described in this Section 5.1.2(c).  (d) REAs.  Borrower shall (and shall cause Mortgage Borrower to), at its sole cost and  expense, promptly and timely perform and observe all the material terms, covenants and conditions required  to be performed and observed by Mortgage Borrower under the REAs.  Borrower shall notify Lender  promptly in writing of the occurrence of any material default by any party to the REAs or the occurrence  of any event that, with the passage of time or service of notice, or both, would constitute a material default  by any party to the REAs, and the receipt by Borrower or Mortgage Borrower of any notice (written or  otherwise) from any party under the REAs noting or claiming the occurrence of any default by Mortgage  Borrower under the REAs or the occurrence of any event that, with the passage of time or service of notice,  or both, would constitute a default by Mortgage Borrower under the REAs.  Borrower shall promptly deliver  to Lender a copy of any such written notice of default. So long as any of the Obligations remains outstanding  (other than contingent indemnification obligations which expressly survive the repayment of the Debt),  Borrower shall not cause or permit Mortgage Borrower to exercise any purchase right, purchase option or  similar rights granted to Borrower with respect to any real property without Lender’s approval.  (e) Zoning; REAs.  Borrower shall not initiate or consent to (and shall not cause or  permit Mortgage Borrower to initiate or consent to) any zoning reclassification of any portion of the  Property or seek any variance under any existing zoning ordinance or use or permit the use of any portion  of the Property in any manner that could result in such use becoming a non-conforming use under any  zoning ordinance or any other applicable land use law, rule or regulation, in each case, without the prior  consent of Lender.  Borrower shall not (and shall not cause or permit Mortgage Borrower), without Lender’s  written consent, (i) fail to exercise any option or right to renew or extend the term of the REAs (if applicable)  in accordance with the terms of the REAs, and shall give immediate written notice to Lender and shall  execute, acknowledge, deliver and record any document requested by Lender to evidence the Lien of the  Pledge Agreement on such extended or renewed term (and if Borrower or Mortgage Borrower shall fail to  exercise any such option or right as aforesaid, Lender may exercise the option or right as Borrower’s agent  and attorney-in-fact as provided above in Lender’s own name or in the name of and on behalf of a nominee  of Lender, as Lender may determine in the exercise of its sole and absolute discretion); (ii) waive, excuse,  condone or in any way release or discharge any party to the REAs of or from their material obligations,  covenant and/or conditions under the REAs; (iii) surrender, terminate, forfeit, or suffer or permit the  surrender, termination or forfeiture of, or change, modify or amend in a material or adverse manner, the  REAs.  (f) Operation of the Property.  

 

   -93-  29949910.v4  (i) Borrower shall (and shall cause Mortgage Borrower to ) cause the Property  to be maintained in a good and safe condition and repair in all material respects, and at all  times keep the Property in good working order and repair (subject to ordinary wear and  tear and casualty damage, and, with respect to Building B only, taking into account, prior  to Substantial Completion, the construction of the Required Improvements to the extent  effectuated in accordance with the terms and conditions set forth in this Agreement).  Lender acknowledges that the Property is managed as of the Closing Date by Mortgage  Borrower and does not have professional management as otherwise required by this  Section 5.1.2(f). Lender agrees, subject to the terms of Section 5.1.2(f)(ii), that Mortgage  Borrower may continue to manage the Property.  (ii) Borrower will not (and will not cause or permit Mortgage Borrower to)  engage a Manager, developer or leasing agent without Lender’s prior written consent, not  to be unreasonable withheld, conditioned or delayed. If Lender reasonably determines that  the Property is not being managed in accordance with generally accepted management  practices for properties similar to the Property, then Lender may, at its option, deliver  written notice to Borrower, which written notice will specify the issues for Lender’s  determination. If Lender determines that the issues specified in such written notice are not  remedied to Lender’s reasonable satisfaction by Borrower within thirty (30) days from  receipt of such written notice or that Borrower has failed to diligently undertake correcting  such issues within such thirty (30) day period, or if an Event of Default has occurred and  is continuing, Borrower will, at Lender’s direction, engage (or cause Mortgage Borrower  to engage) a Qualified Manager reasonably satisfactory to Lender at all times under a  property management agreement approved by Lender in writing, which Manager will  execute a Manager Consent in a form acceptable to Lender.  (iii) If Borrower is required to engage or cause to be engaged a Qualified  Manager in accordance with Section 5.1.2(f)(ii), then Borrower shall cause (and shall cause  Mortgage Borrower to cause) the Property to be operated, in all material respects, in  accordance with the Management Agreement.  If the Management Agreement expires or  is terminated (without limiting any obligation of Borrower to obtain Lender’s consent to  any termination or modification of the Management Agreement in accordance with the  terms and provisions of this Agreement), Borrower shall promptly enter (or cause  Mortgage Borrower to enter) into a Management Agreement in form and content  reasonably acceptable to Lender with Manager approved by Lender.  Borrower shall (and  shall cause Mortgage Borrower to):  (i) promptly perform and/or observe, in all material  respects, all of the covenants and agreements required to be performed and observed by  Borrower or Mortgage Borrower under the Management Agreement and do all things  necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly  notify Lender of any material default under the Management Agreement of which it is  aware; (iii) promptly deliver to Lender a copy of each financial statement, business plan,  capital expenditures plan, notice, report and estimate received by it under the Management  Agreement; and (IV) enforce the performance and observance of all of the covenants and  agreements required to be performed and/or observed by Manager under the Management  Agreement, in a commercially reasonable manner. If (1) an Event of Default occurs or if  Lender or any other Person takes possession of the Property or any portion thereof through  foreclosure, conveyance in lieu of foreclosure or other similar transaction, (2) if Manager  files or is the subject of a petition in bankruptcy or similar proceeding, or a trustee or  receiver is appointed for Manager’s assets or Manager makes an assignment for the benefit  of creditors or Manager is adjudicated insolvent, (3) a default occurs under the  Management Agreement on the part of any of Borrower, Mortgage Borrower or Manager,  

 

   -94-  29949910.v4  beyond any applicable grace and cure periods, (4) a change of Control of Manager occurs,  or (5) Manager shall commit gross negligence, fraud, illegal acts, or willful misconduct,  Borrower shall (or shall cause Mortgage Borrower), at the request of Lender, terminate the  Management Agreement and replace Manager with a Manager reasonably approved by  Lender.  (g) Management Agreement.  If Borrower is required to engage or cause to be  engaged a Qualified Manager in accordance with Section 5.1.2(f)(ii), then Borrower shall not (and shall not  permit Mortgage Borrower to), without Lender’s prior written consent:  (i) surrender, terminate or cancel  the Management Agreement; provided, that Borrower may, without Lender’s consent, not to be  unreasonably withheld, replace (or cause Mortgage Borrower to replace) the Manager so long as the  replacement manager is a Qualified Manager engaged pursuant to a Replacement Management Agreement;  (ii) reduce or consent to the reduction of the term of the Management Agreement; (iii) increase the amount  of any charges or fees payable to Manager under the Management Agreement in excess of three percent  (3.0%) of Operating Income per annum; or (iv) otherwise modify, change, supplement, alter or amend, or  waive or release any of its rights and remedies under, the Management Agreement in any material respect.   Borrower shall not (and shall not cause or permit Mortgage Borrower to) permit Manager to assign or  subcontract Manager’s rights, duties or responsibilities under the Management Agreement to any other  Person without the express written consent of Lender.  Following the occurrence and during the continuance  of an Event of Default, Borrower shall not (and shall not cause or permit Mortgage Borrower to) exercise  any rights, make any decisions, grant any approvals or otherwise take any action under the Management  Agreement without the prior written consent of Lender, which consent may be granted, conditioned or  withheld in Lender’s sole discretion.  (h) Leasing Matters.  (i) Without the prior written consent of Lender, not to be unreasonably  withheld, conditioned or delayed (except with respect to the Master Lease, in which case  Lender’s consent shall be in its sole discretion), Borrower shall not (and shall not cause or  permit Mortgage Borrower to) (A) enter into any Lease; (B) cancel or terminate (including  by exercise of any landlord recapture rights) any Lease; (C) approve any assignment of any  Lease that releases the original tenant from its obligations under such Lease, (D) amend,  modify or waive the provisions of any Lease in any material respect (including any  amendment, modification or waiver reducing the fixed initial term of any Lease, reducing  the rent payable under any Lease, changing any renewal provisions of any Lease or  materially increasing the obligations of the landlord or materially decreasing the  obligations of the tenant under any Lease or pursuant to which any premises covered by  such Lease is surrendered); or (E) cancel or modify any guaranty, or release any security  deposit, letter of credit, or other item constituting security pertaining to any Lease.  (ii) Any request for approval of a Lease, or assignment, termination,  amendment or modification of any Lease requiring approval as set forth above shall be  made to Lender in writing and together with such request Borrower shall furnish to Lender:   (A) such biographical and financial information about the proposed tenant and any  guarantor of such proposed Lease as Lender may reasonably require, (B) a copy of the  proposed form of Lease (or amendment or modification), and (C) a summary of the  material terms of such proposed Lease (or amendment or modification) including rental  terms and the term of the proposed Lease and any options.  (iii) Borrower shall promptly send Lender copies of any notices of default  received from the tenant under any Lease, and will enforce (short of terminating a Lease,  

 

   -95-  29949910.v4  unless Lender consents thereto, which consent shall not be unreasonably withheld or  unduly delayed) the performance by each tenant of the tenant’s obligations under any  Lease.  (iv) Except for security deposits, Borrower shall not (and shall not cause or  permit Mortgage Borrower to) collect rent more than one (1) month in advance.  Borrower,  at Lender’s request, shall furnish Lender with executed copies of all Leases hereafter made  (to the extent not theretofore provided to Lender).  All Leases executed after the Closing  Date (including any renewal or expansion options) shall provide that they are subordinate  to the Security Instrument and that the lessee agrees to attorn to Lender or any purchaser  at a sale by foreclosure or power of sale.  (v) Notwithstanding anything herein to the contrary, Borrower may cause or  permit Mortgage Borrower to sublease or license up to 10% of the Improvements to one or  more Permitted Users (as defined in the Master Lease).  (vi) For the avoidance of doubt, nothing herein shall prohibit Guarantor from  engaging in the business of contract manufacturing for third-parties.  (i) Liens; Indebtedness.  Subject to Borrower’s contest and similar rights contained  in the Loan Documents (including as set forth in Section 5.1.2(b) herein), Borrower shall not (and shall not  cause or permit Mortgage Borrower to) create, incur, assume or suffer to exist any Lien on any portion of  the Property or the Collateral or permit any such action to be taken, except Permitted Encumbrances.   Borrower shall not (and shall not cause or permit Mortgage Borrower to) (directly or indirectly) create,  incur, assume, or allow to exist any Indebtedness with respect to Borrower, Mortgage Borrower, SPE  Component Entity or Mortgage Borrower SPE Component Entity, other than Permitted Indebtedness.  (a) Alterations.  Other than as expressly provided herein with respect to the Required  Improvements, Borrower shall not (and shall not cause or permit Mortgage Borrower to) (i) cause or permit  any material waste of the Property, (ii) 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  intentionally take any action that might invalidate or allow the cancellation of any Policy, or do or permit  to be done thereon anything that may in any way materially impair the value of the Property or the security  of the Pledge Agreement or otherwise cause a Material Adverse Effect, (iii) 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, or (iv) in each case,  without having first obtained Lender’s prior written consent, permit or cause any alterations to any  Improvements that (A) would reasonably be likely to have a Material Adverse Effect, (B) result in any  decrease of Net Operating Income, (C) violate the terms of any Lease, (D) concern structural component  of any Improvements, any utility or HVAC system contained in the Improvements, or the exterior of any  building constituting a part of any Improvements, or (E) cost, in the aggregate of all related alterations, Five  Hundred Thousand and 00/100 Dollars ($500,000) or more; provided, however, that the foregoing  limitations shall not apply to alterations consisting of alterations performed as part of a Restoration required  hereunder.  Without limiting the foregoing, if the total unpaid amounts due and payable with respect to  alterations to the Improvements (other than such amounts to be paid or reimbursed by tenants under the  Leases) shall at any time exceed Five Hundred Thousand and 00/100 Dollars ($500,000), Borrower shall  promptly deliver to Lender as security for the payment of such amounts (and as additional security for the  Debt) cash, a Letter of Credit, or a completion and performance bond (issued by a surety acceptable to  Lender) (or a combination thereof), in an amount equal to the excess of the total unpaid amounts with  respect to such alterations (other than such amounts to be paid or reimbursed by tenants under the Leases),  

 

   -96-  29949910.v4  and Lender may apply such security from time to time at the option of Lender to pay for such alterations  (or, upon an Event of Default, to the payment of the Debt).  (b) No Joint Assessment.  Borrower shall not (and shall not cause or permit Mortgage  Borrower to) suffer, permit or initiate the joint assessment of all or any portion of the Property (i) with any  other real property constituting a tax lot separate from the Property, or (ii) which constitutes real property  with any portion of the Property which may be deemed to constitute personal property, or any other  procedure whereby the Lien of any taxes which may be levied against such personal property shall be  assessed or levied or charged to such real property portion of the Property.  (c) Cooperate in Legal Proceedings.  Borrower shall (and shall not cause or permit  Mortgage Borrower to) cooperate fully with Lender with respect to any proceedings before any court, board  or other Governmental Authority that may in any way affect the rights of Lender hereunder or any rights  obtained by Lender under any of the other Loan Documents and, in connection therewith, permit Lender,  at its election, to participate in any such proceedings.  Borrower shall (and shall not cause or permit  Mortgage Borrower to) cooperate with Lender in obtaining for Lender the benefits of any condemnation  proceeds or insurance proceeds lawfully or equitably payable in connection with the Collateral or the  Property, and Lender shall be reimbursed by Borrower for any out-of-pocket  expenses incurred in  connection therewith (including reasonable attorneys’ fees and disbursements, and the payment by  Borrower of the expense of an Appraisal on behalf of Lender in case of Casualty or Condemnation affecting  the Property or any part thereof) from such condemnation proceeds or insurance proceeds, as applicable.  (d) Intentionally Omitted.  (e) Material Agreements. Borrower shall (and shall not cause or permit Mortgage  Borrower to)  (i) promptly perform and/or observe all material terms, covenants and agreements required  to be performed and observed by it under the Material Agreements; (ii) promptly notify Lender of any  material default (following applicable notice and cure periods) under the Material Agreements of which  Borrower has knowledge; (iii) not, without the prior written consent of Lender, not to be unreasonably  withheld, conditioned or delayed, (A) enter into any new Material Agreement or execute modifications to  any existing Material Agreements, (B) surrender, terminate or cancel any Material Agreement, (C) reduce  or consent to the reduction of the term of the Material Agreements, (D) increase or consent to the increase  of the amount of any charges under the Material Agreements, (E) otherwise modify, change, supplement,  alter or amend, or waive or release any of its rights and remedies under, the Material Agreements, or (F)  following the occurrence and during the continuance of an Event of Default, exercise any rights, make any  decisions, grant any approvals or otherwise take any action under the Material Agreements.  (f) Labor Matters. Borrower shall not (and shall not cause or permit Mortgage  Borrower to), without Lender’s prior consent, enter into any collective bargaining agreement or union  contract with respect to employees and other laborers at the Property.  (g) Appraisal.  Lender shall have the right to order new Appraisals of the Property  from time to time at Borrower’s expense; provided, that Borrower’s obligation to pay for such expense  shall be limited to one (1) Appraisal during any twelve (12) month period, except (x) during the continuance  of an Event of Default or (y) in connection with a Secondary Market Transaction in accordance with Section  9.1-Each Appraisal is subject to review and approval by Lender.  Borrower shall pay to Lender the  reasonable out-of-pocket cost and expense for such Appraisals and a reasonable fee for Lender’s review of  each Appraisal.  (h) Parking Covenant. Borrower shall use Commercially Reasonable Efforts to cause  to be terminated and removed of record, no later than the Substantial Completion Due Date, that certain  

 

   -97-  29949910.v4  Covenant and Agreement Regarding Maintenance of Off-Street Parking Space, dated September 26, 1969  and recorded in the Official Records of Los Angeles County, California on October 6, 1969 as document  number 2214.  5.1.3 Construction Matters.  (a) Construction of Project.  (i) Borrower shall cause Mortgage Borrower to cause the Project to be  constructed on the Land (A) in a good and workmanlike manner, substantially in  accordance with the Plans and Specifications approved by Lender, (B) in a manner in  compliance with the terms of all documents of record, (C) free and clear of Liens and  claims for materials supplied or for labor or services performed in connection with the  construction of the Project or otherwise (other than Permitted Encumbrances), subject to  Borrower’s or Mortgage Borrower’s right to contest any such Liens or claims in accordance  with Section 5.1.2(b) hereof or Section 5.1.2(b) of the Mortgage Loan Agreement,  respectively, and (D) with diligence and continuity, in a good and workmanlike manner,  and in accordance with this Agreement so as to achieve, subject to Excusable Delay, the  Major Milestones within the time period applicable to each such Major Milestone.  (ii) Borrower shall cause Mortgage Borrower to use Commercially  Reasonable Efforts to cause the Costs of the construction of the Project to be in accordance  with the Construction Budget.  (iii) Borrower shall cause Mortgage Borrower to use Commercially  Reasonable Efforts to cause the construction of the Project to be diligently and  continuously performed throughout the Construction Phase until Completion of the  Project.  (b) Construction Schedule.  Each month prior to Completion of the Project, Borrower  shall deliver to Lender and Construction Consultant (which delivery may be made within seven (7) Business  Days prior to the delivery of any Draw Request) a copy of an updated Construction Schedule reflecting,  among other things, the anticipated dates of completion of and the timing of disbursements of incremental  amount of various subcategories of the Construction Budget, all in such form and containing such details  as Lender may require in its reasonable discretion.  (c) Construction Budget Adjustments.  No adjustments in the Construction Budget  shall be deemed to be approved without the prior written consent of Lender (which consent shall not be  unreasonably withheld); provided, however, that Construction Budget adjustments to reflect Change Orders  entered into in accordance with Section 5.1.3(g) shall be permitted.  (d) Inspection of Property and Books and Records.  (i) Without limiting Lender’s rights pursuant to Section 5.1.2(c) hereof,  Borrower agrees to permit (and to cause Mortgage Borrower to permit) Lender and  Construction Consultant, or designated representatives of any of them, to enter upon the  Property, at any reasonable times during business hours on reasonable notice, with access  to inspect or examine or, to the extent not located on the Property, to otherwise make  available in Los Angeles, California to Lender and Construction Consultant the following:  

 

   -98-  29949910.v4  (A) all materials and shop drawings pertaining to the construction of  the Project, to the extent in the possession or control of Borrower or its Affiliates  or available to Borrower or Mortgage Borrower under the General Contractor  Agreement or other Construction Contracts;  (B) any contracts, bills of sale, statements, receipts or vouchers  pertaining to the construction of the Project, to the extent in the possession or  control of Borrower or its Affiliates or available to Borrower under the General  Contractor Agreement or other Construction Contracts;  (C) all work done, labor performed or materials furnished in and about  the Project, including in connection with the construction of the Project;  (D) all books, contracts and records of Borrower or Mortgage  Borrower or General Contractor available to Borrower or Mortgage Borrower  under the General Contractor Agreement or other Construction Contracts  pertaining to the construction of the Project; and  (E) any other documents which are related to the construction of the  Project, to the extent in the possession or control of Borrower or its Affiliates or  available to Borrower or Mortgage Borrower under the General Contractor  Agreement or other Construction Contracts.  (ii) Borrower may satisfy the delivery or accessibility of any of the foregoing  by causing General Contractor to deliver or otherwise make available such materials on a  timely basis.  (iii) Borrower will (and will cause Mortgage Borrower to) promptly provide  Lender and Construction Consultant with copies of any of the foregoing as Lender or  Construction Consultant, as the case may be, may from time to time reasonably request.   Borrower will make its representatives available to discuss Borrower’s and Mortgage  Borrower’s affairs, finances and accounts relating to the construction of the Project, and  Borrower will case Mortgage Borrower to reasonably cooperate, and take all reasonable  steps to cause the General Contractor, the Architect and the Trade Contractors (including  Major Trade Contractors) to cooperate with Lender and Construction Consultant, or any of  their designated representatives, to enable such Person to perform its functions under this  Agreement.  (e) Construction Consultant.  Borrower acknowledges that (i) Construction  Consultant has been retained by Lender to act as a consultant to review Plans and Specifications,  Construction Contracts and Draw Requests, perform inspections and other services as determined by  Lender but only as a consultant to Lender in connection with the construction of the Project and  Construction Consultant has no duty to Borrower or Mortgage Borrower; (ii) Construction Consultant shall  in no event or under any circumstance have any power or authority to make any decision or to give any  approval or consent or to do any other act or thing which is binding upon Lender and any such purported  decision, approval, consent, act or thing by Construction Consultant on behalf of Lender shall be void and  of no force or effect; (iii) Lender reserves the right to make any and all decisions required to be made by  Lender under this Agreement and to give or refrain from giving any and all consents or approvals required  to be given by Lender, and to accept or not accept any matter or thing required to be accepted by Lender,  under and in accordance with the terms of this Agreement, and without being bound or limited in any  manner or under any circumstances whatsoever by any opinion expressed or not expressed, or advice given  

 

   -99-  29949910.v4  or not given, or information, certificate or report provided or not provided, by Construction Consultant to  Lender with respect thereto; (iv) Lender reserves the right in its sole and absolute discretion to disregard or  disagree, in whole or in part, with any opinion expressed, advice given or information, certificate or report  furnished or provided by the Construction Consultant to Lender, and (v) Lender reserves the right in its sole  and absolute discretion to replace Construction Consultant with another qualified construction consultant  at any time and without approval by or prior (but with subsequent) notice to Borrower. Borrower shall be  required to pay all reasonable fees and expenses payable to the Construction Consultant by Lender in  connection with the Loan.  (f) Changes to Plans and Specifications.  Borrower shall (and shall cause Mortgage  Borrower to) provide to Lender and Construction Consultant, concurrently with each Draw Request or at  such other times as Lender or Construction Consultant may reasonably request, copies of all orders,  documents or revisions to Plans and Specifications reflecting Change Orders, regardless of whether the  prior approval by Lender and/or Construction Consultant of any such order, document or revision or Change  Order is required pursuant to the terms of this Agreement or the other Loan Documents.  (g) Change Orders.  Borrower shall not (and shall not cause or permit Mortgage  Borrower to) request, initiate, agree to, approve or accept, cause or suffer directly or indirectly any Change  Order which (i) increases the Approved Project Expenditures by more than $1,000,000 for any single  Change Order or by more than $5,000,000 for all Change Orders in the aggregate, (ii) would affect the  structural integrity of the Property, (iii) constitutes a material downward change in the building material or  equipment specifications, (iv) will or is reasonably expected to cause a Milestone Non-Compliance Event,  (v) will decrease the aggregate net rentable square feet comprising Building B as compared to the net  rentable square feet comprising Building B in the Plans and Specifications approved by Lender as of the  Closing Date, (vi) will materially and adversely change the layout of the Required Improvements, (vii) will  result in a Deficiency, or (viii) will violate Legal Requirements, in each case, without Lender’s prior written  consent, not to be unreasonably withheld, conditioned or delayed (and neither Borrower nor Mortgage  Borrower shall be permitted to request, initiate, agree to, approve and accept all other Change Orders  without Lender’s prior consent).  Any approval by Lender of any Change Order (x) shall not obligate Lender  to increase the amount of the Loan, and (y) shall not obligate Lender to make any Additional Advance to  the extent the same would not otherwise be obligated pursuant to this Agreement to make such Additional  Advance.  Borrower shall (and shall cause Mortgage Borrower to) submit to Lender and Construction  Consultant copies of each proposed Change Order prior to entering into it, together with documentation  reasonably satisfactory to Lender and Construction Consultant, setting forth all additions and subtractions  theretofore made to or from the scope of the Project.  Lender shall promptly review all Change Orders so  submitted.  If any Change Order shall require the consent or approval of any third party, Borrower shall  provide Lender with written evidence of such consent or approval. Borrower shall submit (and cause  Mortgage Borrower to submit) to Lender and Construction Consultant copies of all Change Orders entered  into with respect to the Project within fifteen (15) days after the same are entered into.  (h) Correction of Work.  Borrower will, promptly after written notice from Lender,  cause Mortgage Borrower to correct any defect in the Project or the Improvements or any material departure  without Lender’s prior written approval from the Plans and Specifications.  Borrower agrees that the making  of any Additional Advance shall not constitute a waiver of Lender’s right to require compliance with this  Section 5.1.3(h) with respect to any such defects or material departures from the Plans and Specifications.   Borrower agrees that Lender’s failure to deliver such a written notice shall not constitute a waiver by Lender  of any of Lender’s rights in respect of such defect.  (i) Required Notices.  

 

   -100-  29949910.v4  (i) Without limiting any other notice requirement set forth in this Agreement,  Borrower shall (and shall cause Mortgage Borrower to) give notice to Lender promptly  upon the occurrence of:  (A) any cessation of construction of the Project for a period in excess  of fifteen (15) Business Days more than once in any sixty (60) calendar day period;  (B) any actual litigation or action of, or any litigation or action  threatened in writing by, a Governmental Authority of which Borrower or  Mortgage Borrower has knowledge concerning the actual or alleged presence,  release, threat of release, placement on or in, or the generation, transportation,  storage, treatment or disposal at, the Property and/or Project of any Hazardous  Material in violation of applicable Environmental Law;  (C) any written notice given pursuant to any Construction Document  alleging that there has occurred a default by Borrower, Mortgage Borrower or  General Contractor in the performance of their respective obligations thereunder;  and  (D) any condition which results in any delay, which would reasonably  be expected to result in Completion occurring after the date therefor set forth in  the Construction Schedule, or in any further delay beyond any delays of which  Lender has been previously notified;  (ii) Each notice pursuant to this Section 5.1.3(i)(ii) shall be accompanied by a  statement of Borrower setting forth details of the occurrence referred to therein and stating  what action Borrower proposes to take with respect thereto, in each case, in such detail as  Lender may reasonably require.  (j) Compliance with Construction Documents and Contracts.  Borrower shall  cause Mortgage Borrower to abide by, perform and comply with all of Mortgage Borrower’s material  obligations under the Architect Agreement, the General Contractor Agreement, the Trade Contracts, the  other Construction Contracts and the Construction Documents to which Mortgage Borrower is a party, and  Borrower, at its sole cost and expense, shall cause Mortgage Borrower to use all Commercially Reasonable  Efforts to secure or enforce the performance of each and every material obligation, covenant, condition and  agreement to be performed by the other parties thereunder.  (k) Construction Contracts.  Except to the extent otherwise permitted herein,  Borrower shall not (and shall not cause or permit Mortgage Borrower to) (i) enter into, surrender, terminate,  cancel, modify, amend or consent to the assignment of any Construction Document, or (ii) consent to or  approve of the entering into, surrender, termination, cancellation, modification, amendment or assignment  of any Trade Contract by the General Contractor (but only to the extent that such surrender, termination,  cancellation, modification, amendment or assignment by General Contractor requires Borrower’s or  Mortgage Borrower’s approval pursuant to the General Contractor Agreement), without Lender’s prior  written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  If and to the  extent any amendment, supplement, replacement or other modification is made to any of the foregoing  which requires Lender’s consent, upon reasonable request by Lender, Borrower shall promptly cause (and  cause Mortgage Borrower to promptly cause) the Architect, General Contractor, or Major Trade Contractor,  as the case may be, to deliver a certificate or other written statement which confirms, on and as of the date  thereof, that the Architect Consent, the Engineer Consent, the General Contractor Agreement Consent or  the Major Trade Contractor Consent, as the case may be, previously delivered in connection with the Loan  

 

   -101-  29949910.v4  remains valid, true, correct and complete in all material respects as of the date so amended, supplemented,  replaced or otherwise modified.  Borrower promptly will (and will cause Mortgage Borrower to) give notice  to Lender of the surrender, termination, cancellation, modification, amendment, substitution or assignment  of the other Construction Contracts, whether or not Lender consented thereto pursuant to the immediately  preceding sentence.  (l) Trade Contracts.  Borrower certifies that, on or prior to the Closing Date, Lender  has been provided with a true, correct and complete copy of each Existing Construction Document (other  than, with respect to Trade Contracts only, Trade Contracts to which none of Borrower or Mortgage  Borrower or any Affiliate of Borrower or Mortgage Borrower is a direct party).  Borrower shall deliver to  Lender an executed copy of any Major Trade Contract which General Contractor, Mortgage Borrower  and/or Borrower enters into (together with a Major Trade Contractor Consent) and shall promptly give  notice to Lender of the surrender, termination, cancellation, modification, amendment, substitution or  assignment of any Major Trade Contract.  Upon Lender’s reasonable request, Borrower shall deliver to  Lender a copy of each subcontract entered into by the General Contractor within ten (10) days of Lender’s  request.  (m) Cessation of Business.  With respect to any work relating to the Required  Improvements, Borrower shall not cause or permit Mortgage Borrower for any reason (i) subject to  Excusable Delay, to cease for a period in excess of fifteen (15) Business Days more than once in any sixty  (60) calendar day period the construction of the Project, or (ii) to enter into or engage in any other business  not expressly permitted by the terms of this Agreement.  (n) Construction Permits.  Promptly after obtaining any additional material  Construction Permits for the construction of the Project after the Closing Date, Borrower shall (or shall  cause Mortgage Borrower to) deliver a copy thereof to Lender.  (o) Certificate of Occupancy.  Borrower shall, to the extent required by applicable  Legal Requirements, obtain (and cause Mortgage Borrower to obtain) certificates of occupancy with respect  to the entire Project in accordance with this Agreement and, thereafter, shall continuously maintain in full  force and effect valid certificates of occupancy for the entire Property, but excluding temporary certificates  of occupancy for portions of the Property that can only be obtained following the build-out of such space  for or by a Tenant.  (p) Protection Against Liens.  Subject to its right of contest set forth in  Section 5.1.2(b), Borrower shall (and shall cause Mortgage Borrower to) pay, discharge or bond all claims  for labor, materials and services furnished in connection with construction of the Project and take all actions  reasonably required to prevent the assertion of claims of Liens (other than Permitted Encumbrances) against  the Property.  Borrower irrevocably appoints, designates and authorizes Lender as its agent (such agency  being coupled with an interest) with the authority (but no obligation) to file any notice relating to claims of  Liens (other than Permitted Encumbrances) that Lender reasonably deems advisable to protect its interests  under the Loan Documents.  If any stop notice or claim is asserted against Lender by any Person furnishing  labor, services, equipment or materials to the Project, upon demand by Lender, Borrower shall take such  action (and cause Mortgage Borrower to take such action) as Lender may reasonably require to release  Lender from any obligation or liability with respect to such stop notice or claim, including (i) if the claim  is being contested in accordance with Section 5.1.2(b) hereof, obtaining a bond or other security, in form,  substance and amount reasonably satisfactory to Lender, sufficient to discharge the same of record or  (ii) payment of such claim, in each case, except to the extent such stop notice or claim is the result of any  action or omission of Lender, Construction Consultant or their respective Affiliates, directors, officers,  employees or agents.  If Borrower fails to take such action required to be taken by Borrower pursuant to  this Section 5.1.3(p), Lender may, in its sole discretion, file an interpleader action requiring all claimants  

 

   -102-  29949910.v4  to interplead and litigate their respective claims, and in any such action Lender shall be released and  discharged from all obligations with respect to any funds deposited in court.  (q) Lender’s Review.  Observation, inspection and approvals by Lender of the Plans  and Specifications, any other Construction Documents, the construction of the Project and the workmanship  and materials used therein shall impose no responsibility or liability of any nature whatsoever on Lender or  Construction Consultant, and no Person shall, under any circumstances, be entitled to rely upon such  inspections and approvals by Lender or Construction Consultant for any reason.  Approvals granted by  Lender for any matters covered under this Agreement shall be narrowly construed to cover only the parties  and facts identified in any such approval.  Construction Consultant has been or will be retained by Lender  solely as a consultant and has no authority to bind or otherwise act for or on behalf of Lender.  (r) Submission of Evidence.  Any condition of this Agreement which requires the  submission of evidence of the existence or non-existence of a specified fact or facts implies as a condition  the existence or non-existence, as the case may be, of such fact or facts and Lender shall, at all times, be  free to independently establish to its reasonable satisfaction such existence or non-existence.  (s) Contractors.  Except as provided by law, no Trade Contractors or any other  Person dealing with Borrower or Mortgage Borrower, including the Architect and the General Contractor,  shall be, nor shall any of them be deemed to be, third party beneficiaries of this Agreement, but each shall  be deemed to have agreed (a) that the Trade Contractor(s) or other Person in question shall look to Borrower  or Mortgage Borrower or such Person, as the case may be, as their sole source of recovery if not paid and  (b) except as otherwise agreed to in writing between Lender and the Trade Contractor(s) or other Person in  question, that they may not claim against Lender under any circumstances.  (t) Completion of the Project.  Each of the Approved Project Expenditures that is a  subject of an Additional Advance shall be Completed in accordance with the Construction Schedule.  (u) Labor.  (i) Borrower shall not (and shall not cause or permit Mortgage Borrower to)  enter into (or consent or approve Manager entering into) any collective bargaining  agreements affecting the Property without Lender’s prior written consent; provided that,  notwithstanding the foregoing, in no event shall Borrower be required to be in violation in  any material respect of any applicable Legal Requirements as a result of Lender’s exercise  of its consent rights.  (ii) Borrower will, in a timely manner, pay (or cause to be paid), or satisfy (or  cause to be satisfied) when due all bills, costs, or other obligations incurred by Borrower  or Mortgage Borrower or on Borrower’s or Mortgage Borrower’s behalf in connection with  the employees employed by Borrower or Mortgage Borrower in connection the operation  of the Property, including but not limited to any obligations under ERISA, the  Multiemployer Pension Plan Amendments Act, the Internal Revenue Code, federal or state  wage and hour law, the Labor Agreements, or applicable State or Federal plant closing  laws (any such bills, costs, or liabilities a “Labor Liability”).  Borrower further covenants  and agrees to (and to cause Mortgage Borrower to) deliver to Lender promptly, and in any  event within ten (10) Business Days after receipt thereof by Borrower or any of its  Affiliates, a copy of each notice concerning a claim of Labor Liability.  (iii) Unless Lender consents in writing, Borrower shall not (and shall not cause  or permit Mortgage Borrower to) have any employees at the Property. To the extent  

 

   -103-  29949910.v4  Borrower or Mortgage Borrower has the right to provide prior written consent to the same  pursuant to the terms of the Management Agreement, Borrower shall not (and shall not  cause or permit Mortgage Borrower to) consent to Manager’s termination of the Property  employees in a way that would give rise to liability under the WARN Act, without the prior  written consent of Lender.  (iv) Borrower will (and will cause Mortgage Borrower to) comply in all  material respects with all applicable state and federal anti-discrimination laws and all  applicable state and federal laws regarding the payment of wages and benefits to its  employees in connection with the operation of the Property.  (v) Bonds; Sub-Guard Insurance.  Each Trade Contractor shall be, at Lender’s  election, either (a) bonded pursuant to a Bond issued by a surety satisfactory to Lender or (b) covered by a  sub-guard insurance policy in form and substance acceptable to Lender. Borrower will cause Lender to be  named as a co-obligee (as each its interest may appear) with Mortgage Borrower on all Bonds obtained by  Borrower or Mortgage Borrower.  5.1.4 Mortgage Loan Matters.  (a) Notices.  Borrower shall deliver to Lender, promptly after the receipt or delivery,  a copy of any notice of default received or sent by Mortgage Borrower with respect to the Mortgage Loan.  (b) Independent Approval Rights.  If any action, proposed action or other decision is  consented to or approved by Mortgage Lender, such consent or approval shall not be binding or controlling  on Lender.  Borrower hereby acknowledges and agrees that (i) the risks of Mortgage Lender in making the  Mortgage Loan are different from the risks of Lender in making the Loan, (ii) in determining whether to  grant, deny, withhold or condition any requested consent or approval, Mortgage Lender and Lender may  reasonably reach different conclusions, and (iii) Lender has an absolute independent right to grant, deny,  withhold or condition any requested consent or approval based on its own point of view, but subject to the  standards of consent set forth herein.  Furthermore, the denial by Lender of a requested consent or approval  shall not create any liability or other obligation of Lender if the denial of such consent or approval results  directly or indirectly in a default under the Mortgage Loan Documents, and Borrower hereby waives any  claim of liability against Lender arising from any such denial unless Lender has not complied with any  applicable standard for consent.  The rights described above may be exercised by any entity which owns  and controls, directly or indirectly, substantially all of the interests in Lender.  (c) Intercreditor Agreement. Borrower hereby acknowledges and agrees that any  intercreditor agreement entered into between Lender and Mortgage Lender will be solely for the benefit of  Lender and Mortgage Lender, and that neither Borrower nor Mortgage Borrower shall be third-party  beneficiaries (intended or otherwise) of any of the provisions therein, have any rights thereunder, or be  entitled to rely on any of the provisions contained therein.  Lender and Mortgage Lender have no obligation  to disclose to Borrower or Mortgage Borrower the contents of any such intercreditor agreement.   Borrower’s obligations hereunder are and will be independent of any such intercreditor agreement and shall  remain unmodified by the terms and provisions thereof. In the event that (i) a Mortgage Loan Event of  Default has occurred and is continuing (or the receipt by Lender of a payment would cause the occurrence  of a “Default” under the Mortgage Loan Agreement or a Mortgage Loan Event of Default), (ii) Lender is  required pursuant to the terms of any intercreditor agreement between Lender and Mortgage Lender to pay  over to Mortgage Lender any payment or distribution of assets, whether in cash, property or securities  which is applied to the Debt, including, without limitation, any proceeds of the Property or any other  collateral for the Debt previously received by Lender on account of the Loan, (iii) Lender has actually paid  over such amounts to Mortgage Lender, and (iv) Lender has not received such amounts in return, then, to  

 

   -104-  29949910.v4  the extent such amounts were actually received by Mortgage Lender and applied in accordance with the  Mortgage Loan Agreement, Borrower agrees to indemnify Lender for any amounts so paid, and any amount  so paid shall continue to be owing pursuant to the Loan Documents as part of the Debt notwithstanding the  prior receipt of such payment by Lender, in each of the foregoing cases, except as set forth in the Guaranties  with respect to double counting of obligations.  (d) Refinancing or Voluntary Prepayment of the Mortgage Loan.  Except as expressly  permitted hereunder, Borrower shall not make or permit to be made any voluntary partial or full prepayment  of amounts owing under the Mortgage Loan or any refinancing of the Mortgage Loan without the prior  written consent of Lender (other than in connection with (i) the simultaneous repayment in full of both the  Mortgage Loan and the Mezzanine Loan pursuant to the same refinancing, or (ii) any other prepayment of  the Mortgage Loan expressly permitted pursuant to this Agreement and the Mortgage Loan Agreement).  (e) Compliance with Mortgage Loan Documents.  Borrower shall cause Mortgage  Borrower to:  (i) diligently perform and observe all of the terms, covenants and conditions of the Mortgage  Loan Documents on the part of Mortgage Borrower to be performed and observed within any applicable  notice and cure periods under the Mortgage Loan Documents; (ii) not enter into or be bound by any new  Mortgage Loan Documents after the Closing Date (other than new Mortgage Loan Documents expressly  contemplated under the Mortgage Loan Documents as in effect on the Closing Date), agree to any material  modifications, consolidation, restatement, or waiver of any existing Mortgage Loan Documents, in each  case without the prior written approval of Lender; and (iii) provide Lender with a copy of any amendment  or modification of, or waiver or consent granted under, the Mortgage Loan Documents within five (5)  Business Days after its receipt thereof.  (f) Mortgage Loan Defaults.  If a Mortgage Loan Event of Default occurs and is  continuing beyond applicable notice and cure periods, Borrower agrees that Lender shall have the  immediate right to (but shall be under no obligation to), without prior notice to Borrower or any other  Person:  (i) pay all or any part of the Mortgage Loan and any other sums that are then due and payable, and  perform any act or take any action on behalf of Borrower or Mortgage Borrower as may be appropriate, to  cause all of the terms, covenants and conditions of the Mortgage Loan Documents on the part of Mortgage  Borrower to be performed or observed thereunder to be promptly performed or observed; (ii) pay any other  amounts and take any other action as Lender, in its sole and absolute discretion, shall deem advisable to  protect or preserve the rights and interests of Lender in the Loan and/or the Collateral and (iii) subject to  the prior right of Mortgage Lender under the Mortgage Loan Documents, Complete the Project.  Borrower  shall not impede, interfere with, hinder or delay, and shall not permit Mortgage Borrower to impede,  interfere with, hinder or delay, any effort or action on the part of Lender to cure any Mortgage Loan Event  of Default under the Mortgage Loan, or to otherwise protect or preserve Lender’s interests in the Loan and  the Collateral following the occurrence and during the continuance of a Mortgage Loan Event of Default  under the Mortgage Loan.  Subject to the prior right of Mortgage Lender under the Mortgage Loan  Documents, Borrower hereby grant Lender and its designees the right to enter upon the Property at any  time while an Event of Default exists, or the assertion by Mortgage Lender that a Mortgage Loan Event of  Default has occurred and is continuing, under the Mortgage Loan Documents, for the purpose of taking any  such action or to appear in, defend or bring any action or proceeding to protect Lender’s interest.  Lender  may take such action as Lender deems necessary to carry out the intents and purposes of this Section 5.1.6(f)  (including communicating with Mortgage Lender with respect to any Mortgage Loan Events of Default),  without prior notice to, or consent from, Borrower or Mortgage Borrower.  Lender shall have no obligation  to complete any cure or attempted cure undertaken or commenced by Lender.  All sums so paid and the  costs and expenses incurred by Lender in exercising rights under this Section 5.1.6(f) (including its  reasonable third-party attorneys’ fees and costs) (A) shall be added to the Debt, (B) if not paid within ten  (10) Business Days of demand therefor, shall thereafter bear interest at the Default Rate to the date of  payment to Lender, and (C) shall be secured by the Pledge Agreement.  Borrower hereby indemnifies  

 

   -105-  29949910.v4  Lender from and against all Losses of any kind or nature whatsoever which may be imposed on, incurred  by or asserted against Lender as a result of the foregoing actions, excluding such Losses arising from the  willful misconduct, gross negligence or illegal acts of Lender.  In the event that Lender makes any payment  in respect of the Mortgage Loan, Lender shall be subrogated to all of the rights of Mortgage Lender under  the Mortgage Loan Documents against the Property, in addition to all other rights it may have under the  Loan Documents.  If Lender shall receive a copy of any notice of a Mortgage Loan Event of Default under  the Mortgage Loan Documents sent by Mortgage Lender, such notice shall constitute full protection to  Lender for any action taken or omitted to be taken by Lender, in good faith, in reliance thereon prior to the  receipt of a Mortgage Loan Event of Default Revocation Notice.  As a material inducement to Lender’s  making the Loan, Borrower hereby absolutely and unconditionally release and waive all claims against  Lender arising out of Lender’s exercise of its rights and remedies provided in this Section 5.1.6, except for  Lender’s willful misconduct, gross negligence or illegal acts.  (g) No Amendments to Mortgage Loan Documents.  Without obtaining the prior  written consent of Lender, Borrower shall not cause or permit Mortgage Borrower to (i) enter into any  amendment or modification of any of the Mortgage Loan Documents or (ii) grant to Mortgage Lender any  consent or waiver.  Borrower shall cause Mortgage Borrower to provide Lender with a copy of any  amendment or modification to the Mortgage Loan Documents within five (5) days after the execution  thereof or such earlier period required hereunder or in the Mortgage Loan Documents.  (h) Acquisition of the Mortgage Loan.  None of Borrower, Mortgage Borrower,  Guarantor, or any Affiliate of any of the foregoing shall acquire or agree to acquire the Mortgage Loan, or  any portion thereof or any interest therein, or any direct or indirect ownership interest in the holder of the  Mortgage Loan, via purchase, transfer, exchange, operation of law, or otherwise (other than as a result of  acquisition of shares of any Person whose shares are traded over a nationally-recognized stock exchange,  but only to the extent such acquired shares, individually or in the aggregate, do not constitute a Controlling  share in such Person).  If, solely by operation of applicable subrogation law, Borrower, Mortgage Borrower,  Guarantor, or any Affiliate of any of the foregoing shall have failed to comply with the foregoing, then  Borrower shall (i) immediately notify Lender of such failure, and (ii) cause any and all such prohibited  parties acquiring any interest in the Mortgage Loan to (A) discontinue and terminate any enforcement  proceeding(s) under the Mortgage Loan Documents, and (B) without limiting the foregoing, pay over to  Lender any and all Revenues or other payments or proceeds received on account of the Mortgage Loan or  the exercise of any rights or remedies with respect thereto.  (i) Deed in Lieu of Foreclosure.  Without the express prior written consent of Lender,  Borrower shall not, and Borrower shall not cause, suffer or permit Mortgage Borrower to, enter into,  execute, deliver, or consent to, as the case may be, any deed-in-lieu or other consensual foreclosure with or  for the benefit of Mortgage Lender or any other Person.  (j) Distributions.  On each date on which amounts are due and payable to Lender  pursuant to the Loan Documents and/or are required to be disbursed to Lender pursuant to the terms of the  Mortgage Loan Documents, Borrower shall exercise its rights under the organizational documents of  Mortgage Borrower to cause Mortgage Borrower to make a distribution of funds to Borrower in an amount  sufficient to allow Borrower to make such required payment to Lender, but only to the extent there is  sufficient revenue derived from the operation of the Property after the payment of all amounts payable with  respect to the Mortgage Loan that is made available to Borrower (and not trapped by Lender or Mortgage  Lender) is sufficient to do so (provided that the foregoing is not intended to limit any of Borrower’s  obligations under this Agreement or the other Loan Documents).  During the existence of an Event of  Default, Borrower shall not, and shall not cause Mortgage Borrower to, make any distributions of any kind,  returns of capital, or repayment of any loans (in each case whether in cash, assets, Equity Interests, or  proceeds of any kind) to any Person that owns any direct or indirect Equity Interest in Borrower.  

 

   -106-  29949910.v4  (k) Discussions with Mortgage Lender and Manager.  In connection with the exercise  of its rights set forth in the Loan Documents, Lender shall have the right at any time to discuss the Property,  the Mortgage Loan, the Loan, and any other matter directly with Mortgage Lender and any property  manager (including Manager) and their respective consultants, agents or representatives, as applicable,  without notice to or permission from Borrower, nor shall Lender have any obligation to disclose such  discussions or the contents thereof to Borrower or any other Person.  (l) Title Insurance Policy.  Borrower covenants, subject to Mortgage Lender’s rights  under the Mortgage Loan, to remit (or cause Mortgage Borrower to remit) to Lender all title insurance  proceeds paid by the title insurance company under the Owner’s Title Policy, provided, in no event shall  the sums paid to Lender exceed the amount of the Debt prior to the acquisition by Lender of some or all of  the Collateral.  (m) Notices.  Borrower shall give notice, or cause notice to be given, to Lender  promptly upon the occurrence of:  (i) any Mortgage Loan Default or Mortgage Loan Event of Default;  (ii) any default beyond applicable notice and cure periods under any  Contractual Obligation of Borrower that would reasonably be expected to have a material adverse effect on  the ability of Borrower to perform under the Loan Documents or the rights and remedies of Lender under  the Loan Documents;  (iii) any litigation or proceeding affecting Borrower, or, to the knowledge of  Borrower, affecting Mortgage Borrower; and  (iv) a change in the business, operations, property or financial or other  condition or prospects of Borrower, or, to the knowledge of Borrower, Mortgage Borrower, which could  reasonably be expected to have a material adverse effect on Borrower, the ability of Borrower to perform  under the Loan Documents or the rights and remedies of Lender under the Loan Documents.  5.1.5 Further Assurances.  Borrower shall, at Borrower’s sole cost and expense, (a) furnish to  Lender all instruments, documents, boundary surveys, footing or foundation surveys, certificates, plans and  specifications, appraisals, title and other insurance reports and agreements, and each and every other  document, certificate, agreement and instrument required to be furnished by Borrower pursuant to the terms  of the Loan Documents or which are reasonably requested by Lender in connection therewith; (b) execute  and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do  such other acts necessary or desirable, to evidence, preserve and/or protect the collateral at any time  securing or intended to secure the Obligations under the Loan Documents, and to establish, maintain, and  perfect Lender’s security interest therein free of all other Liens (other than Permitted Encumbrances); and  (c) do and execute all and such further lawful and reasonable acts, conveyances and assurances for the  better and more effective carrying out of the intents and purposes of this Agreement and the other Loan  Documents, in each case as Lender shall reasonably require from time to time.  Borrower authorizes Lender,  at the expense of Borrower, to file any financing statement or statements (and amendments thereto and  continuations thereof) deemed necessary or desirable by Lender to perfect its security interest in any of the  collateral for the Loan (including an “all assets” financing statement within the meaning the UCC).   Borrower hereby irrevocably constitutes and appoints Lender as Borrower’s true and lawful attorney-in- fact, coupled with an interest and with full power of substitution, to execute, acknowledge and deliver any  instruments and to exercise and enforce every right, power, remedy, option and privilege of Borrower with  respect to the collateral for the Loan, and do in the name, place and stead of Borrower, all such acts, things  and deeds for and on behalf of and in the name of Borrower, which Borrower is required to do under the  

 

   -107-  29949910.v4  Loan Documents or which Lender may deem necessary or desirable to more fully vest in Lender the rights  and remedies provided for in the Loan Documents and to accomplish the purposes of this Loan Agreement,  including any amendment to the Loan Documents which may be required hereunder, in each case upon  Borrower’s failure to take any of the foregoing actions or any other applicable action required under the  Loan Documents within five (5) Business Days after notice from Lender.  The foregoing powers of attorney  are irrevocable and coupled with an interest.  5.1.6 Estoppel Statements.  After request by Lender, Borrower shall within ten (10) Business  Days furnish Lender with a statement, duly acknowledged and certified, setting forth (i) the original  principal amount of the Loan, (ii) the Outstanding Principal Balance, (iii) the Interest Rate of the Note,  (iv) the date installments of interest and/or principal were last paid, (v) any offsets or defenses to the  payment of the Debt or the performance of the Obligations, if any, (vi) that the Note, this Agreement, the  Pledge Agreement and the other Loan Documents are valid, legal and binding obligations of such party and  have not been modified or if modified, giving particulars of such modification and such other things as  Lender may reasonably request and (vii) such other matters as Lender may reasonably require.  Borrower  shall use Commercially Reasonable Efforts to deliver to Lender, promptly after Lender’s written request,  tenant estoppel certificates from each commercial tenant leasing space at the Property in form and substance  reasonably satisfactory to Lender, provided, however, that Borrower shall not be required to deliver such  certificates more frequently than two (2) times in any calendar year.  ARTICLE VI    INSURANCE; CASUALTY AND CONDEMNATION  SECTION 6.1. Insurance.  (a) Borrower shall obtain and maintain, or cause to be maintained, insurance for  Mortgage Borrower and the Property satisfying the requirements of Article VI of the Mortgage Loan  Agreement.  (b) All insurance provided for in Section 6.1(a) shall be obtained under valid and  enforceable policies (collectively, the “Policies” or in the singular, the “Policy”), and shall be subject to  the approval of Lender, not to be unreasonably withheld, conditioned or delayed, as to insurance companies,  amounts, deductibles, loss payees and insureds.  The Policies shall be issued by financially sound and  responsible insurance companies authorized to do business in the State and having a claims paying ability  rating of “A” or better by S&P, or “A2” or better by Moody’s, or “AX” or better by AM Best (but in such  case only to the extent that such Rating Agency rates the applicable insurer).  The Policies described in  Section 6.1(a) hereof (other than those strictly limited to liability protection) shall designate Lender as  mortgagee and loss payee.  Not less than ten (10) days prior to the expiration dates of the Policies theretofore  furnished to Lender, certificates of insurance evidencing the Policies accompanied by evidence satisfactory  to Lender of payment of the premiums due thereunder (the “Insurance Premiums”), shall be delivered by  Borrower to Lender. Complete copies of the Policies shall be submitted to Lender upon request.  (c) Intentionally omitted.  (d) All Policies provided for or contemplated by Section 6.1(a) hereof shall name  Borrower as a named insured and, in the case of liability coverages (except for the Policies referenced in  Section 6.1(a)(v) and (viii) hereof), shall name Lender as the additional insured, as its interests may appear,  and in the case of property coverages, including but not limited to all risk, boiler and machinery, terrorism,  and (if applicable) flood and earthquake insurance, shall contain a standard non-contributing mortgagee  clause in favor of Lender providing that the loss thereunder shall be payable to Lender.  

 

   -108-  29949910.v4  (e) All property Policies provided for in Section 6.1 hereof shall:  (i) provide that no  act or negligence of Borrower, or foreclosure or similar action, 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) provide that  the Policies shall not be canceled without at least thirty (30) days’ notice to Lender, except ten (10) days’  notice for non-payment of premium; (iii) provide that the issuers thereof shall give notice to Lender if the  Policies have not been renewed ten (10) days prior to its expiration; and (iv) not contain provisions that  would make Lender liable for any Insurance Premiums thereon or subject to any assessments thereunder.  (f) If at any time Lender is not in receipt of written evidence that all Policies are in  full force and effect, Lender shall have the right, without notice to Borrower, but subject to the prior right  of Mortgage Lender under the Mortgage Loan Agreement, to take such action as Lender reasonably deems  necessary to protect its interest in the Property and the Collateral, including the obtaining of such insurance  coverage as Lender in its sole discretion deems appropriate.  All premiums 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  within ten (10) Business Days after written demand and, until paid, shall be secured by the Pledge  Agreement and shall bear interest at the Default Rate.  Borrower shall promptly forward to Lender a copy  of each written notice received by Borrower of any cancellation of any of the Policies or of any of the  coverages afforded under any of the Policies.  SECTION 6.2. Casualty.  If the Property shall be damaged or destroyed, in whole or in part, by  fire or other casualty (a “Casualty”), Borrower shall (a) give prompt notice of such damage to Lender, and  (b) promptly commence and diligently prosecute the completion of Restoration so that such Property  resembles, as nearly as possible, the condition the Property was in immediately prior to such Casualty (so  long as applicable zoning laws in effect at the time permit such rebuilding), with such alterations as may  be reasonably approved by Lender and otherwise in accordance with Section 6.4 hereof or as otherwise  required by zoning codes, building codes, or other applicable laws.  Borrower shall cause Mortgage  Borrower to pay all costs of such Restoration whether or not such costs are covered by insurance.  Lender  may, but shall not be obligated to make proof of loss if not made promptly by Borrower.  In addition, Lender  may participate in any settlement discussions with any insurance companies (and shall have the right to  approve any final settlement) with respect to any Casualty in which the Net Proceeds or the costs of  completing the Restoration are equal to or greater than the Net Proceeds Threshold.  Borrower shall execute  and deliver to Lender all instruments reasonably required by Lender to permit such participation.  SECTION 6.3. Condemnation.  Borrower shall promptly give Lender notice of the actual or  threatened commencement of any proceeding in respect of any Condemnation of the Property and shall  deliver to Lender copies of any and all papers served in connection with such proceedings.  Lender may  participate in any such proceedings, and Borrower shall from time to time deliver to Lender all instruments  reasonably requested by Lender to permit such participation.  Borrower shall, at its expense, diligently  prosecute any such proceedings, and shall consult with Lender, its attorneys and experts, and cooperate  with them in the carrying on or defense of any such proceedings.  Furthermore, Borrower shall cooperate  with Lender in obtaining for Lender the benefits of any proceeds lawfully or equitably payable in connection  with a Condemnation of the Property.  Notwithstanding any taking by any public or quasi-public authority  through Condemnation or otherwise (including any transfer made in lieu of or in anticipation of the exercise  of such taking), Borrower shall continue to perform the Obligations at the time and in the manner provided  in this Agreement and the other Loan Documents, and the Outstanding Principal Balance shall not be  reduced until any condemnation proceeds shall have been actually received and applied by Lender, after  the deduction of expenses of collection, to the reduction or discharge of the Obligations.  Lender shall not  be limited to the interest paid on the Condemnation proceeds by the applicable Governmental Authority but  shall be entitled to receive out of the Condemnation proceeds interest at the rate or rates provided herein.   If the Property or any portion thereof is taken by a Governmental Authority, Borrower shall promptly  

 

   -109-  29949910.v4  commence and diligently prosecute Restoration (to the extent such taking resulted in repairable damage)  and otherwise comply with the provisions of Section 6.4 herein.  SECTION 6.4. Restoration.  All proceeds or awards payable in connection with any Casualty or  Condemnation shall be applied in accordance with the Mortgage Loan Agreement.  Borrower shall, or shall  cause Mortgage Borrower to, deliver to Lender all reports, plans, specifications, documents and other  materials that are delivered to Mortgage Lender under Section 6.4 of the Mortgage Loan Agreement in  connection with a restoration of the Property after a Casualty or Condemnation, and Lender shall have the  same rights (including, without limitation, all approval rights), but subject to the rights of Mortgage Lender  under the Mortgage Loan Agreement.  ARTICLE VII    EVENTS OF DEFAULT; REMEDIES  SECTION 7.1. Events of Default.  Each of the following events shall constitute an event of  default hereunder (an “Event of Default”):  (a) if (i) any payment of principal or interest due with respect to the Loan is not paid  on the Payment Date when due, or (ii) the entire Debt is not paid in full on the Maturity Date, or (iii) any  payment required to be made to a Reserve Account under this Agreement is not paid on the Payment Date  when due, (iv) the Prepayment Premium is not paid in full when due, or (v) any other monetary sum required  to be paid hereunder or under any other Loan Document is not paid within five (5) Business Days after  written demand from Lender; provided, that, solely with respect to subclause (i) of this clause (a), no Event  of Default shall result from a failure to pay the amounts described in such subclause (i) if (x) sums sufficient  to pay such amount are available from funds held by Lender and specifically allocated to the payment of  Debt Service, and such failure to pay arises solely from Lender’s failure to apply such funds to pay the  amount described in subclause (i) if and when required pursuant to the terms of this Agreement (unless  Lender’s access to such funds is restricted in any manner), or (y) such failure is solely as a result of any  Lender’s failure to make an Advance (which Advance is required to be made for the payment of the amount  described in subclause (i) pursuant to the terms of this Agreement) if and when required to do so hereunder;  (b) if any of the Property Taxes or Other Charges are not paid prior to delinquency  (unless same are being contested by Borrower in accordance with the terms and conditions of this  Agreement) ; provided, that, no Event of Default shall result from a failure to pay the amounts described in  this clause (b) if (x) sums sufficient to pay such amount are available from funds held by Lender and  specifically allocated to the payment of Property Taxes and Other Charges, and such failure to pay arises  solely from Lender’s failure to apply such funds to pay the amount described in this clause (b) if and when  required pursuant to the terms of this Agreement (unless Lender’s access to such funds is restricted in any  manner), or (y) such failure is solely as a result of any Lender’s failure to make an Advance (which Advance  is required to be made for the payment of the amount described in this clause (b) pursuant to the terms of  this Agreement) if and when required to do so hereunder;  (c) if the Policies are not kept in full force and effect pursuant to the terms hereof, or  if certified copies of the Policies are not delivered to Lender within thirty (30) days after Lender’s request  therefor;  (d) the occurrence of a Transfer (other than a Permitted Transfer in accordance with  this Agreement); provided, however, (i) the existence of inchoate mechanics liens imposed by operation of  law relating to labor or materials provided to the Property in compliance with the terms and conditions of  the Loan Documents and as to which no enforcement, collection, execution, levy or foreclosure proceeding  

 

   -110-  29949910.v4  shall have been commenced shall not constitute an Event of Default hereunder, and (ii) the existence of an  actual Lien relating to labor or materials provided to the Property in compliance with the terms and  conditions of the Loan Documents shall not constitute an Event of Default hereunder so long as the same  is being contested and/or has been bonded over as provided in Section 5.1.2(b) hereof within thirty (30)  days after Borrower acquires actual knowledge of the filing or recording of such Lien (but in any event not  later than five (5) Business Days after the commencement of an action to foreclose on such Lien);  (e) if (i) any representation or warranty made by Borrower herein or by Borrower or  Guarantor in any other Loan Document as of the date such representation or warranty was made or is  deemed to have been remade is, or (ii) any financial statement, report, certificate or other instrument,  agreement or document furnished to Lender by or on behalf of Borrower or Guarantor after the Closing  Date shall have been (or contained statements or information that is), false or misleading in any material  respect as of the date the same was delivered, unless with respect to the foregoing misrepresentations or  false or misleading information (each, a “Misrepresentation”) (A) such Misrepresentation was not  knowingly or intentionally made, (B) Lender has suffered no material Loss on account thereof (or Borrower  shall have reimbursed Lender for the amount of such Loss so demanded by Lender) nor has the same  resulted in a Material Adverse Effect, (C) such Misrepresentation can be cured (meaning that the facts and  circumstances underlying the applicable Misrepresentation can be changed such that the applicable  representation or information as made or delivered will be true and correct), and (D) such Misrepresentation  has been so cured within thirty (30) days after the earlier of (1) the date on which Borrower first has actual  knowledge that such Misrepresentation exists, and (2) the date on which Lender first notifies Borrower that  such Misrepresentation exists);  (f) if a Bankruptcy Action occurs with respect to Borrower, any SPE Component  Entity, or Guarantor; provided, however, if Bankruptcy Action was involuntary and not consented to by  such Person, the same shall constitute an Event of Default hereunder only upon the same not being  discharged, stayed or dismissed within sixty (60) days;  (g) if Borrower attempts to assign its rights under this Agreement or any of the other  Loan Documents or any interest herein or therein in contravention of the Loan Documents;  (h) if Borrower breaches any of the covenants set forth in Section 5.1.1(b), (d), (e),  (g), (h) or (i),  Section 5.1.2(f), (g), (h), (i), (j), (n), (o), (u) or (v), Section 5.1.3 or Section 5.1.4;  (i) if Borrower breaches any of its covenants contained in Section 5.1.1(f) hereof and  such breach continues for a period of ten (10) days following Lender’s notice to Borrower of the same;  (j) if one or more judgments or decrees shall be entered against (i) Borrower, or (ii)  Guarantor (individually or collectively) involving, in the case of clause (ii) only, in the aggregate a liability  in excess of $2,500,000 and, in either case, the same shall not have been vacated, bonded, satisfied or stayed  pending appeal within thirty (30) days from the date of entry of such judgment (or within thirty (30) days  after the termination of any stay thereon obtained within such aforementioned thirty (30) day period);  (k) if Guarantor breaches the Financial Covenant Requirements or fails to pay any  amounts due and payable under the Environmental Indemnity or any of the Guarantees and such failure  remains uncured for ten (10) Business Days;  (l) if (A) Borrower shall be in default under any REA, any Construction Document or  any Material Agreement beyond the expiration of applicable notice and grace periods, if any, thereunder,  (B) any of the REAs, Construction Documents or Material Agreements are amended, supplemented,  replaced, restated or otherwise modified without Lender’s prior written consent or (C) any REA or the  

 

   -111-  29949910.v4  estate created thereunder is canceled, rejected, terminated, surrendered or expires pursuant to its terms,  unless in such case Borrower enters into a replacement thereof in accordance with the applicable terms and  provisions hereof;  (m) Borrower fails to terminate any applicable Management Agreement if requested  by Lender (when Lender has the right to so require a termination of the Management Agreement pursuant  to this Agreement) and replace such Manager with a Qualified Manager pursuant to a Replacement  Management Agreement within thirty (30) days after Lender’s request therefor;  (n) if the General Contractor Agreement is terminated and a new General Contractor  is not appointed as a replacement General Contractor pursuant to the provisions hereof within thirty (30)  days after such termination;  (o) the occurrence of any Milestone Non-Compliance Event;  (p) if Borrower shall fail to obtain and/or maintain the Interest Rate Cap Agreement,  Replacement Interest Rate Cap Agreement or Substitute Interest Rate Cap Agreement as required pursuant  to Section 2.2.7 hereof (after giving effect to applicable notice and grace periods set forth in Section 2.2.7);  (q) if there shall exist an “Event of Default” under and as defined in any other Loan  Document, or with respect to any term, covenant or provision set forth in the Loan Documents which  specifically contains a notice requirement or grace period, if Borrower shall be in default under such term,  covenant or condition after the giving of such notice or the expiration of such grace period;  (r) a breach of the covenants set forth in Section 5.1.3(m);  (s) if Borrower or SPE Component Entity incurs any Indebtedness other than  Permitted Indebtedness;   (t) the occurrence of any Mortgage Loan Event of Default; or  (u) if a Default not specified in the clauses enumerated above continues to exist for  ten (10) days after notice to Borrower from Lender, in the case of any Default which can be cured by the  payment of a sum of money, or for thirty (30) days after notice from Lender in the case of any other Default;  provided, however, that if such non-monetary Default is susceptible of cure but cannot reasonably be cured  within such thirty (30) day period and provided further that Borrower or Guarantor (as applicable) shall  have commenced to cure such Default within such thirty (30) day period and thereafter diligently and  expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for such time as is  reasonably necessary for Borrower in the exercise of due diligence to cure such Default, such additional  period not to exceed sixty (60) days.  SECTION 7.2. Remedies.  (a) Upon the occurrence and during the continuance of an Event of Default (other than  an Event of Default described in Section 7.1(f) above), in addition to any other rights or remedies available  to it pursuant to this Agreement and the other Loan Documents or at law or in equity, Lender may take such  action, without notice or demand, that Lender deems advisable to protect and enforce its rights against  Borrower and in and to the Property and the Collateral, including declaring the Debt to be immediately due  and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan  Documents against Borrower, the Collateral and the Property, including all rights or remedies available at  law or in equity and all rights and remedies of a secured party under the UCC; and upon the occurrence and  

 

   -112-  29949910.v4  during the continuance of any Event of Default described in Section 7.1(f) above, the Debt shall  immediately and automatically become due and payable, without notice or demand, and Borrower hereby  expressly waives any such notice or demand, anything contained herein or in any other Loan Document to  the contrary notwithstanding.  (b) During the continuance of an Event of Default, all or any one or more of the rights,  powers, privileges and other remedies available to Lender against Borrower under this Agreement or any  of the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity  may be exercised by Lender at any time and from time to time, whether or not all or any of the Debt shall  be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding  or other action for the enforcement of its rights and remedies under any of the Loan Documents.  Any such  actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singularly,  successively, together or otherwise, at such time and in such order as Lender may determine in its sole  discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights  and remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan  Documents.  Without limiting the generality of the foregoing, Borrower agrees that if an Event of Default  is continuing, to the extent allowed by applicable laws, (i) Lender shall not be subject to any “one action”  or “election of remedies” law or rule, (ii) all liens and other rights, remedies or privileges provided to Lender  shall remain in full force and effect until Lender has exhausted all of its remedies against the Property and  the Collateral and the Lien created by the Pledge Agreement has been foreclosed, sold and/or otherwise  realized upon in satisfaction of the Debt or the Obligations have been paid in full, and (iii) Lender may, in  its sole discretion, without impairing or otherwise affecting any other rights and remedies of Lender  hereunder, at law or in equity, apply, ex parte, for the appointment of a custodian, trustee, receiver, keeper,  liquidator or conservator of the Property or any part thereof or the Collateral or any part thereof, irrespective  of the adequacy of the security for the Debt and without regard to the solvency of Borrower or of any Person  liable for the payment of the Debt, to which appointment Borrower does hereby consent and such receiver  or other official shall have all rights and powers permitted by applicable law and such other rights and  powers as the court making such appointment may confer, but the appointment of such receiver or other  official shall not impair or in any manner prejudice the rights of Lender to receive the Revenues with respect  to the Property or the Collateral pursuant to this Agreement or any other Loan Document.  (c) During the continuance of an Event of Default, Lender shall have the right from  time to time to sever the Notes and the other Loan Documents into one or more separate notes, mortgages  and other security documents in such denominations as Lender shall determine in its sole discretion for  purposes of evidencing and enforcing its rights and remedies provided hereunder.  Borrower shall execute  and deliver to Lender from time to time, promptly after the request of Lender, a severance agreement and  such other documents as Lender shall request in order to effect the severance described in the preceding  sentence, all in form and substance reasonably satisfactory to Lender.  Borrower hereby absolutely and  irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead  to make and execute all documents necessary or desirable to effect the aforesaid severance, Borrower  ratifying all that its said attorney shall do by virtue thereof; provided, however, Lender shall not make or  execute any such documents under such power until three (3) Business Days after notice has been given to  Borrower by Lender of Lender’s intent to exercise its rights under such power.  The costs or expenses  incurred in connection with the preparation, execution, recording or filing of the foregoing Loan Documents  (and amendments thereto) shall be paid by Borrower.  (d) With respect to Borrower, Mortgage Borrower, the Collateral and the Property,  nothing contained herein or in any other Loan Document shall be construed as requiring Lender to resort  to the Property and/or the Collateral for the satisfaction of any of the Debt in any preference or priority, and  Lender may seek satisfaction out of the Property or any part thereof or the Collateral or any part thereof, in  its absolute discretion in respect of the Debt.  Except as limited by applicable law, Lender shall have the  

 

   -113-  29949910.v4  right from time to time to partially foreclose the Pledge Agreement in any manner and for any amounts  secured by the Pledge Agreement then due and payable as determined by Lender, including the following  circumstances: (i) in the event Borrower defaults beyond any applicable grace period in the payment of one  or more scheduled payments of principal and/or interest, Lender may foreclose the Pledge Agreement to  recover such delinquent payments, or (ii) in the event Lender elects to accelerate less than the entire Debt,  Lender may foreclose the Pledge Agreement to recover so much of the Debt as Lender may accelerate and  such other sums secured by the Pledge Agreement as Lender may elect.  Notwithstanding one or more  partial foreclosures, the Collateral shall remain subject to the Pledge Agreement to secure payment of sums  secured by the Pledge Agreement and not previously recovered.  (e) In addition to all remedies conferred it by law and by the terms of this Agreement  and the other Loan Documents, during the continuance of an Event of Default Lender may pursue any one  or more of the following remedies concurrently or successively, it being the intent hereof that none of such  remedies shall be to the exclusion of any other, and with full rights to reimbursement from Borrower and  any Guarantor:  (i) take possession of the Collateral and complete any construction work at the Property,  including the right to avail itself of and procure performance of existing contracts or let any contracts with  the same contractors or others and to employ watchmen to protect the Property from injury.  Without  restricting the generality of the foregoing and for the purposes aforesaid to be exercised during the existence  and continuance of an Event of Default, Borrower hereby appoints and constitutes Lender its lawful  attorney-in-fact with full power of substitution to complete any construction work at the Property in the  name of Borrower; (ii) use Reserve Funds to complete any construction work at the Property; (iii) make  changes to the plans and specifications which shall be necessary or desirable to complete any construction  work at the Property in substantially the manner contemplated by such plans and specifications; (iv) retain  or employ new general contractors, subcontractors, architects, engineers and inspectors as shall be required  for said purposes; to pay, settle or compromise all existing bills and claims which may be liens or security  interests, or to avoid such bills and claims becoming liens against the Property or the Collateral, or as may  be necessary or desirable for the completion of any construction work at the Property or for the clearance  of title to the Property or the Collateral; (v) execute all applications and certificates in the name of Borrower  which may be required by any of the contract documents; (vi) prosecute and defend all actions or  proceedings in connection with any construction work at the Property; and (vii) take any action and require  such performance as it deems necessary to be furnished hereunder and to make settlements and  compromises with the surety or sureties thereunder, and in connection therewith, to execute instruments of  release and satisfaction.  (f) Any amounts recovered from the Property, the Collateral or any other collateral  for the Loan after an Event of Default may be applied by Lender toward the payment of the Debt in such  order, priority and proportions as Lender determines.  (g) The rights, powers and remedies of Lender under this Agreement shall be  cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower  or Guarantor pursuant to this Agreement or the other Loan Documents, or existing at law or in equity or  otherwise.  Lender’s rights, powers and remedies may be pursued singularly, concurrently or otherwise, at  such time and in such order as Lender may determine in Lender’s sole discretion.  (h) During the continuance of an Event of Default, Lender may, but without any  obligation to do so and without notice to or demand on Borrower and without releasing Borrower from any  obligation hereunder or under the other Loan Documents or being deemed to have cured any Event of  Default, make, do or perform any obligation of Borrower hereunder or under the other Loan Documents in  such manner and to such extent as Lender may deem necessary (including, without limitation, curing any  default under or breach of the Management Agreement, regardless of whether a Default or Event of Default  exists hereunder.  Lender is authorized to enter upon the Property for such purposes, or appear in, defend,  

 

   -114-  29949910.v4  or bring any action or proceeding to protect its interest in the Property and the Collateral for such purposes.   All out-of-pocket costs and expenses incurred by Lender in remedying or attempting to remedy such Event  of Default or such other breach or default by Borrower or in appearing in, defending, or bringing any action  or proceeding shall bear interest at the Default Rate from the date such costs and expenses were incurred to  the date reimbursement payment is received by Lender.  All such costs and expenses incurred by Lender,  together with interest thereon calculated at the Default Rate, shall be deemed to constitute a portion of the  Obligations, shall be secured by the liens and security interests provided to Lender under the Loan  Documents and shall be immediately due and payable upon demand by Lender therefore.  (i) Upon the occurrence of any Event of Default (irrespective of whether or not the  same consists of an ongoing condition, a one-time occurrence, or otherwise), the same shall be deemed to  continue at all times thereafter; provided, however, that such Event of Default shall cease to continue only  if Lender shall accept payment or performance of the defaulted obligation or shall execute and deliver a  written confirmation that such Event of Default has ceased to continue. Lender shall not be obligated under  any circumstances whatsoever to accept such payment or performance or execute and deliver any such  writing. Without limitation, this Section shall govern in any case where reference is made in this Loan  Agreement or elsewhere in the Loan Documents to (i) any “cure” (whether by use of such word or  otherwise) of any Event of Default, (ii) “during an Event of Default,” “the continuance of an Event of  Default” or “after an Event of Default has ceased” (in each case, whether by use of such words or otherwise),  or (iii) any condition or event which continues beyond the time when the same becomes an Event of Default.  ARTICLE VIII    LIMITATION ON RECOURSE  SECTION 8.1. Exculpation.  Subject to the qualifications set forth in this Article VIII, Lender  shall not enforce the liability and obligation of Borrower to perform and observe the obligations contained  in the Notes, this Agreement, the Pledge Agreement or the other Loan Documents by any action or  proceeding wherein a money judgment shall be sought against Borrower, or its direct or indirect owners  (other than pursuant to any separate agreement, indemnity or guaranty, including pursuant to the Guarantees  and the Environmental Indemnity), except that Lender may bring a foreclosure action, an action for specific  performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its  interest under the Notes, this Agreement, the Pledge Agreement and the other Loan Documents, or in the  Property, the Revenues, or any other collateral given to Lender pursuant to the Loan Documents; provided,  however, that, except as specifically provided herein, any judgment awarded in any such action or  proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property,  in the Revenues and in any other collateral given to Lender, and Lender, by accepting the Notes, this  Agreement, the Pledge Agreement and the other Loan Documents, and without limitation of the foregoing  and in addition thereto, agrees for itself and its successors and assigns that it and its successors and assigns  shall not sue for, seek or demand any deficiency judgment against Borrower in any such action or  proceeding under, or by reason of, or in connection with, the Notes, this Agreement, the Pledge Agreement  or the other Loan Documents.  The provisions of this Section 8.1 shall not, however, (a) constitute a waiver,  release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair  the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale  under the Pledge Agreement; (c) affect the validity or enforceability of any separate agreement, indemnity  or guaranty (including the Guarantees and the Environmental Indemnity), or any of the rights and remedies  of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) intentionally  omitted; or (f) constitute a prohibition against Lender seeking a deficiency judgment against Borrower in  order to fully realize the security granted by the Pledge Agreement or commencing any other appropriate  action or proceeding in order for Lender to exercise its remedies against the Property.  

 

   -115-  29949910.v4  SECTION 8.2. Recourse for Losses.  Nothing contained in this Agreement or any of the other  Loan Documents shall in any manner or way release, affect or impair the right of Lender to recover, and  Borrower shall be fully and personally liable for and subject to legal action to the extent of, any Losses  actually suffered or incurred by Lender to the extent arising out of or in connection with the following (all  such liability and obligation for any or all of the following being referred to herein as the “Recourse  Liabilities”):  (i) fraud, intentional misrepresentation, or intentional failure to disclose a  material fact concerning the Property, the Collateral, Borrower, Mortgage Borrower,  Guarantor, or the Loan by any of the Borrower Parties;  (ii) the gross negligence, willful misconduct, or illegal acts of any of the  Borrower Parties;  (iii) the breach of any representation, warranty, covenant or indemnification  provision in the Loan Documents concerning environmental laws or hazardous substances,  or any indemnification of Lender and other applicable indemnified parties with respect  thereto, in any of the Loan Documents;  (iv) intentional physical waste of the Property by any Borrower Party or any  Person at the direction of any of the foregoing;  (v) the removal or disposal of any portion of the Property after an Event of  Default;  (vi) the misappropriation, conversion, or application in a manner prohibited by  the Loan Documents by or on behalf of any Borrower Party of (A) any Net Proceeds, (B)  any funds disbursed from the Reserves, (C) the Initial Advance or any Additional  Advances, or (D) any Revenues received after an Event of Default, or (E) any Revenues  paid more than one (1) month in advance;  (vii) failure to pay charges for labor or materials or other charges that create a  Lien on any portion of the Property or the Collateral;  (viii) any security deposits, advance deposits or any other deposits collected  with respect to the Property which are not delivered to Mortgage Lender upon a foreclosure  of the Property or action in lieu thereof or to Lender upon a foreclosure of the Collateral or  action in lieu thereof (subject to the prior right of Mortgage Lender under the Mortgage  Loan Documents), except to the extent any such security deposits were applied in  accordance with the terms and conditions of any of the Leases prior to the occurrence of  the Event of Default that gave rise to such foreclosure or action in lieu thereof and permitted  hereunder;  (ix) failure of Borrower to purchase and maintain any Interest Rate Cap  Agreement, Replacement Interest Rate Cap Agreement or Substitute Interest Rate Cap  Agreement as required pursuant to this Agreement (including amounts payable by  Borrower pursuant to Section 2.2.7, it being agreed that Lender shall have no obligation to  purchase an Interest Rate Cap Agreement, Replacement Interest Rate Cap Agreement or  Substitute Interest Rate Cap Agreement on behalf of Borrower, and that Lender’s Losses  on account of Borrower’s failure to purchase an Interest Rate Cap Agreement, Replacement  Interest Rate Cap Agreement or Substitute Interest Rate Cap Agreement are not limited to  

 

   -116-  29949910.v4  the cost of such Interest Rate Cap Agreement, Replacement Interest Rate Cap Agreement  or Substitute Interest Rate Cap Agreement at the time the same was required to be  purchased);  (x) Borrower’s or Mortgage Borrower’s failure to obtain and maintain the  fully paid for Policies in accordance with Section 6.1 hereof and Section 6.1 of the  Mortgage Loan Agreement attributable to the time that Mortgage Borrower owns the  Property;  (xi) Borrower’s or Mortgage Borrower’s failure to pay all Property Taxes  attributable to the time that Mortgage Borrower owns the Property prior to the same  becoming delinquent;  (xii) the failure of Borrower, Mortgage Borrower, any SPE Component Entity  or any Mortgage Borrower SPE Component Entity to be a Special Purpose Entity;  (xiii) any liability under the WARN Act or any other applicable similar law that  arises as a result of the termination of any of the employees at the Property, provided that  Borrower shall in no event be liable under this clause 8.2(xiii) to the extent the termination  of employees was made by or at the direction of Lender;  (xiv) the forfeiture by any Borrower Party of the Property or any material  portion thereof, caused by or resulting from criminal conduct or activity by Borrower or  any Borrower Party in connection therewith;  (xv) any transfer, mortgage, mortgage recording, stamp, intangible or other  similar Taxes for which Lender becomes obligated, directly or indirectly, following a  foreclosure of the Property or the Collateral or action in lieu thereof;  (xvi) any Withdrawal Liability or similar amounts incurred by Borrower or  Mortgage Borrower or any Affiliate of Borrower or Mortgage Borrower for which Lender  becomes obligated, directly or indirectly, upon the conclusion of a foreclosure of the  Property or the Collateral or action in lieu thereof;  (xvii) any distributions made by any Borrower Party in violation of the terms of  the Loan Documents;  (xviii) intentionally omitted;  (xix) the failure of Borrower to comply with any provisions of Section 5.1.1(f)  hereof or the failure of Mortgage Borrower to comply with any provisions of Section  5.1.1(f) of the Mortgage Loan Agreement;  (xx) the failure of Borrower to comply with any provisions of Section 5.1.2(j)  the failure of Mortgage Borrower to comply with any provisions of Section 5.1.2(j) of the  Mortgage Loan Agreement;  (xxi) incurrence by Borrower, Mortgage Borrower, SPE Component Entity or  Mortgage Borrower SPE Component Entity of any Indebtedness in violation of this  Agreement;   

 

   -117-  29949910.v4  (xxii) the failure of the Property at any time to be in compliance with Legal  Requirements as a result of any deficiency in parking available to the Property;   (xxiii) the failure of Borrower or Mortgage Borrower at any time to have  renewed, extended or replaced the PLL Policy in order to cause the PLL Policy at all times  to satisfy the requirements of Section 6.1(a)(ix) of the Mortgage Loan Agreement; and/or  (xxiv) (A) any obligation of Mortgage Borrower to indemnify any Person that,  immediately prior to any acquisition of title to the Collateral pursuant to a UCC foreclosure  sale, a UCC strict foreclosure, an assignment in lieu of foreclosure or other enforcement  action under the Loan Documents (collectively, an “Equity Collateral Enforcement  Action”; and the date on which an Equity Collateral Enforcement Action is consummated,  an “Equity Collateral Transfer Date”), was an Affiliate of Mortgage Borrower, to the  extent such obligation continues to be the obligation of the transferee at or after such Equity  Collateral Enforcement Action and (B) any obligation of Mortgage Borrower accruing  prior to, on or after the Equity Collateral Transfer Date to pay (1) legal fees to counsel  engaged by of Mortgage Borrower prior to the Equity Collateral Transfer Date, (2) amounts  due under any contract between Mortgage Borrower, on the one hand, and any of Mortgage  Borrower, Guarantor or any affiliate of any of them, on the other hand (unless such contract  is assumed in writing by the Person acquiring the Collateral on or after the Equity Collateral  Transfer Date), or (3) amounts due under any contract between any of Mortgage Borrower,  Guarantor or any affiliate of any of them, on the one hand, and any Person not affiliated  with any of Mortgage Borrower, Guarantor or any affiliate of any of them, on the other  hand, that has been entered into without the prior written approval of Lender to the extent  such prior written approval was required under the Loan Documents (unless such contract  is assumed in writing by the Person acquiring the Collateral on or after the Equity Collateral  Transfer Date).  SECTION 8.3. Full Recourse.  Notwithstanding anything to the contrary in this Agreement, the  Notes or any of the Loan Documents, (a) Lender shall not be deemed to have waived any right which Lender  may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to  file a claim for the full amount of the Debt secured by the Pledge Agreement or to require that all collateral  shall continue to secure all of the Obligations in accordance with the Loan Documents; and (b) the Debt  shall be fully recourse to Borrower in the event of any of the following (each, a “Springing Recourse  Event”):  (i) Borrower, Mortgage Borrower, Guarantor, SPE Component Entity or  Mortgage Borrower SPE Component Entity filing a voluntary petition under the  Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;  (ii) the filing of an involuntary petition against Borrower, Mortgage Borrower,  Guarantor, SPE Component Entity or Mortgage Borrower SPE Component Entity under  the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law by a  Borrower Party or any other Person in which any of the Borrower Parties colludes with or  otherwise assists such Person;  (iii) any Borrower Party soliciting or causing to be solicited petitioning  creditors for any involuntary petition against Borrower, Mortgage Borrower, Guarantor,  SPE Component Entity or Mortgage Borrower SPE Component Entity from any Person  under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;  

 

   -118-  29949910.v4  (iv) Borrower, Mortgage Borrower, Guarantor, SPE Component Entity,  Mortgage Borrower SPE Component Entity, or any of the other Borrower Parties   consenting to, acquiescing in, or joining in any involuntary petition filed against Borrower,  Guarantor or SPE Component Entity, by any other Person under the Bankruptcy Code or  any other Federal or state bankruptcy or insolvency law;  (v) Borrower, Mortgage Borrower, Guarantor, SPE Component Entity,  Mortgage Borrower SPE Component Entity or any of the other Borrower Parties  consenting to, acquiescing in, or joining in an application for the appointment of a  custodian, receiver, trustee, or examiner for Borrower, Mortgage Borrower, Guarantor,  SPE Component Entity, Mortgage Borrower SPE Component Entity or all or any portion  of the Property (other than an application by Lender, or in the case of Mortgage Borrower  or Mortgage Borrower SPE Component Entity, Mortgage Lender, in connection with the  enforcement of Lender’s or Mortgage Lender’s, as the case may be, remedies under the  Loan Documents or the Mortgage Loan Documents, respectively);  (vi) Borrower, Mortgage Borrower, Guarantor, SPE Component Entity or  Mortgage Borrower SPE Component Entity making an assignment for the benefit of  creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to  pay its debts as they become due;  (vii) the failure of Borrower, Mortgage Borrower, Guarantor, SPE Component  Entity or Mortgage Borrower SPE Component Entity to be a Special Purpose Entity, and  such failure is cited as a factor in any order for substantive consolidation of Borrower,  Mortgage Borrower, Guarantor, SPE Component Entity or Mortgage Borrower SPE  Component Entity with any other Person;  (viii) the occurrence of a Transfer of the Property or Equity Interest in any  Restricted Party made in violation of this Agreement;  (ix) if any Borrower Party, in any judicial or quasi-judicial case, action or  proceeding contests (or any Borrower Party colludes with or otherwise assists any other  Person, or solicits or causes to be solicited any other Person to contest) the validity or  enforceability of the Loan Documents or contests or intentionally hinders, delays or  obstructs (or any Borrower Party colludes with or otherwise assists any other Person, or  solicits or causes to be solicited any other Person to contest, hinder, delay or obstruct) the  pursuit of any rights or remedies by Lender (including the commencement and/or  prosecution of a foreclosure action, judicial or non-judicial, the appointment of a receiver  for the Property or any portion thereof or the Collateral or any portion thereof or any  enforcement of the terms of the assignment of Leases pursuant to the Security Instrument),  unless a court of competent jurisdiction finds that such actions by any such Borrower Party  were undertaken in good faith, and were not based on a frivolous or meritless position;  (x) if any Borrower Party shall make a counterclaim against Lender, Servicer  or their Affiliates in violation of Section 10.15 hereof;  (xi) Borrower entering into any amendment or termination of the Master Lease  in violation of this Agreement;   (xii) the failure of Borrower to comply with any provisions of Section 5.1.4(i)  hereof;  

 

   -119-  29949910.v4  (xiii) Borrower or any Affiliate thereof acquires all or any portion of any interest  in the Mortgage Loan; and/or  (xiv) any of Borrower or Guarantor or any Affiliate of Borrower or Guarantor  causes Borrower or Mortgage Borrower to amend or otherwise modify their respective  organizational documents in order to amend or repeal the applicable election to be  governed by Article 8 of the UCC, or any termination or cancellation of the limited liability  company membership certificate evidencing Borrower’s one hundred percent (100%)  ownership interest in Mortgage Borrower, as delivered to Lender on the Closing Date in  connection with the Loan Documents.  ARTICLE IX    SECONDARY MARKET TRANSACTIONS; SERVICING  SECTION 9.1. Secondary Market Transactions.  Borrower acknowledges and agrees that  Lender may (a) sell all or any portion of the Loan and the Loan Documents, including, in each case, via a  CUSIP, and/or (b) grant or issue one or more participations therein (any such sales, transfers, and/or  participations described in the foregoing clauses, collectively, a “Secondary Market Transaction”).  If  Lender determines at any time to participate in a Secondary Market Transaction, Lender may forward to  each actual or potential purchaser, transferee, assignee, servicer, participant or investor in the Loan, counsel,  and accountants, all documents and information which Lender now has or may hereafter acquire relating to  the Loan, Borrower, Mortgage Borrower, Guarantor, and any direct or indirect equity owner of Borrower,  which shall have been furnished to Lender in connection with the Loan, as Lender in its discretion  determines necessary or desirable.  SECTION 9.2. Borrower Cooperation.  (a) In connection with any Secondary Market Transaction, Borrower shall execute and  deliver to Lender such documents, instruments, certificates, financial statements, assignments and other  writings, do such other acts and provide such information, and participate in such meetings and discussions,  in each case that are reasonably necessary to facilitate the consummation of each Secondary Market  Transaction, including executing and delivering such documents and agreements (and deliver such opinions  of counsel with respect thereto as Lender may require) necessary to (i) restructure the Loan into multiple  notes (which may include component notes and/or senior and junior notes) and/or reduce the number of  notes, and/or (ii) restructure the Loan into a mortgage loan and one or more mezzanine loans (to be made  to one or more Special Purpose Entities that will be the direct and/or indirect owners of the Equity Interests  in Borrower, and secured by a pledge of such Equity Interests, in each case including that such notes and/or  mezzanine loans, and/or (iii) establish different interest rates with respect to, and reallocate the amortization  and principal balances applicable to, each note or tranche of the Loan, and/or (iv) assign to each such note  or tranche or of each of the restructured Loan (collectively, “Tranches”) such order of priority as may be  designated by Lender, and/or (v) modify any operative dates within the Loan Documents (including the  Payment Date, the Determination Date, and the Interest Accrual Period); provided, however, that (A) the  aggregate principal amount of all such Tranches as of their date of creation shall equal the Outstanding  Principal Balance immediately prior to their creation, (B) the weighted average interest rate of all such  Tranches shall on the date created equal the interest rate that was applicable to the Loan immediately prior  to the creation of such Tranches, (C) the debt service payments on all such Tranches shall on the date they  are created equal the debt service payment that was due under the Loan immediately prior to the creation  of such Tranches, (D) no such amendment to the Loan Documents shall decrease in any material manner  the rights of Borrower or Guarantor under the Loan Documents, or result in any additional material liability  or material obligation to Borrower or Guarantor under the Loan Documents (except to the extent related to  

 

   -120-  29949910.v4  having different interest rates apply to the Tranches upon partial paydown thereof following the occurrence  of an Event of Default, or the extent related to having separate mortgage and mezzanine loans), and (E) no  such amendment described in clause (v) above shall be effective sooner than thirty (30) days after notice  thereof from Lender, nor shall it cause the Maturity Date to be an earlier date).  In connection with the  creation of any mezzanine loan as described above, Borrower shall cause the formation of one or more  Special Purpose Entities as required by Lender in order to serve as the borrower under any such mezzanine  loan (and the applicable organizational documents of Borrower and such new entity shall be acceptable to  Lender in form and content), and Borrower shall deliver to Lender a “UCC-9” insurance policy and a  mezzanine endorsement to the owner’s policy of title insurance held by Borrower, and such opinions of  legal counsel as lender may reasonably require.  If Borrower fails to cooperate with Lender within ten (10)  Business Days of written request by Lender, Lender is hereby appointed as Borrower’s attorney in fact,  coupled with an interest, to execute any and all documents necessary to accomplish such modifications (but  in any event the Loan Documents shall be deemed to have been modified to incorporate any such  modifications as Lender may so notify Borrower of in writing) and at Lender’s option, declare such failure  to be an Event of Default.  (b) At the request of Lender, Borrower shall provide information regarding Borrower,  Mortgage Borrower, Guarantor, the Collateral or the Property which is not in the possession of Lender or  which may be reasonably required by Lender in order to satisfy the market standards to which Lender  customarily adheres or which may be reasonably required by prospective investors or required by applicable  Legal Requirements in connection with any such Secondary Market Transaction, including to:  (i) provide  additional and/or updated information concerning Borrower, any SPE Component Entity, Mortgage  Borrower, any Mortgage Borrower SPE Entity, Guarantor, Manager, the Collateral, or the Property,  together with appropriate verification and/or consents related to such information through letters of auditors  or opinions of counsel of independent attorneys reasonably acceptable to Lender; (ii) assist in preparing  descriptive materials for presentations to any or all of the Rating Agencies, and work with, and if requested,  supervise, third-party service providers engaged by Borrower, any SPE Component Entity, Mortgage  Borrower and any Mortgage Borrower SPE Entity and their respective Affiliates to obtain, collect, and  deliver information requested or required by Lender; (iii) deliver (1) new or updated opinions of counsel as  to non-consolidation, due execution and enforceability with respect to the Property, the Collateral,  Borrower, any SPE Component Entity, Mortgage Borrower, any Mortgage Borrower SPE Entity, Guarantor  and their respective Affiliates, and the Loan Documents (including a so-called “10b-5” opinion), and (2)  revised organizational documents for Borrower, any SPE Component Entity, Mortgage Borrower and any  Mortgage Borrower SPE Entity and certificates of the relevant Governmental Authorities in all relevant  jurisdictions indicating the good standing and qualification of Borrower, any SPE Component Entity,  Mortgage Borrower and any Mortgage Borrower SPE Entity as of the date of the Secondary Market  Transaction, which counsel opinions and revisions to organizational documents shall be reasonably  satisfactory to Lender; (iv) use Commercially Reasonable Efforts to deliver such additional tenant estoppel  letters and subordination, non-disturbance and attornment agreements or, if applicable, estoppels from  parties to agreements that affect the Property and who are required to provide the same, which estoppel  letters and subordination non-disturbance and attornment agreements shall be reasonably satisfactory to  Lender; (v) make such representations and warranties as of the closing date of the Secondary Market  Transaction with respect to the Property, the Collateral, Borrower, any SPE Component Entity, Mortgage  Borrower, any Mortgage Borrower SPE Entity, Guarantor and the Loan Documents as may be reasonably  requested by Lender and consistent with the facts covered by such representations and warranties as they  exist on the date thereof, including the representations and warranties made in the Loan Documents; (vi) if  requested by Lender, review and certify as to the accuracy of any information regarding the Property, the  Collateral, Borrower, any SPE Component Entity, Mortgage Borrower, any Mortgage Borrower SPE  Entity, Guarantor, Manager, and the Loan which is contained in a preliminary or final private placement  memorandum, prospectus, prospectus supplement (including any amendment or supplement to either  thereof), or other disclosure document to be used by Lender or any Affiliate thereof; and (vii) supply to  

 

   -121-  29949910.v4  Lender such documentation, financial statements and reports in form and substance required in order to  comply with any applicable securities laws and other Legal Requirements.  SECTION 9.3. Disclosure Indemnification.  Borrower and Guarantor agree to provide, in  connection with any sale or participation of any direct or indirect interest in the Loan, an indemnification  agreement (a) certifying that (i) Borrower and Guarantor have carefully examined all written materials  provided to Borrower by Lender (to the extent such information relates to, or is based on, or includes any  information regarding the Property, the Collateral, Borrower, Mortgage Borrower, Master Tenant,  Guarantor, Manager and/or the Loan) and (ii) such written materials do not contain any untrue statement of  a material fact or omit to state a material fact necessary in order to make the statements made, in the light  of the circumstances under which they were made, not misleading, (b) jointly and severally indemnifying  Lender, and each of its officers, directors, partners, employees, representatives, agents and Affiliates and  each Person or entity who Controls any such Person within the meaning of Section 15 of the Securities Act  or Section 20 of the Exchange Act (collectively, the “Indemnified Persons”), for any losses, claims,  damages, liabilities, costs or expenses (including without limitation legal fees and expenses for enforcement  of these obligations (collectively, the “Liabilities”) to which any such Indemnified Person may become  subject insofar as the Liabilities arise out of or are based upon any untrue statement or alleged untrue  statement of any material fact contained in the written materials provided to Borrower by Lender or arise  out of or are based upon the omission or alleged omission to state in such written materials a material fact  required to be stated therein or necessary in order to make the statements in such written materials, in light  of the circumstances under which they were made, not misleading and (c) agreeing to reimburse each  Indemnified Person for any legal or other expenses incurred by such Indemnified Person, as they are  incurred, in connection with investigating or defending the Liabilities.  This indemnity agreement will be  in addition to any liability which Borrower may otherwise have.  Moreover, the indemnification and  reimbursement obligations provided for in clauses (b) and (c) above shall be effective, valid and binding  obligations of the indemnifying Persons, whether or not an indemnification agreement described in  clause (a) above is provided.  SECTION 9.4. Costs and Expenses.  Notwithstanding anything in this Agreement or the other  Loan Documents to the contrary, Borrower shall not be required to pay for any costs and expenses of Lender  pursuant to this Article IX following the Closing Date in excess of $75,000 in the aggregate; provided, that,  (a) such cap shall not apply to any legal fees or other costs or expenses (i) of Borrower or (ii) that are  incurred in connection with any opinion of counsel that Lender requires to be delivered in connection with  a Secondary Market Transaction, and (b) such cap shall be reduced by the amount of any costs and expenses  that Mortgage Borrower actually pays to Mortgage Lender pursuant to Article IX of the Mortgage Loan  Agreement.  ARTICLE X    MISCELLANEOUS  SECTION 10.1. Survival.  This Agreement and all covenants, agreements, representations and  warranties made herein and in the certificates delivered pursuant hereto shall survive the making by Lender  of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect  so long as all or any of the Obligations (other than contingent indemnification obligations which expressly  survive the repayment of the Debt) are outstanding and unpaid unless a longer period is expressly set forth  herein or in the other Loan Documents.  Whenever in this Agreement any of the parties hereto is referred  to, such reference shall be deemed to include the legal representatives, successors and assigns of such party.   All covenants, promises and agreements in this Agreement, by or on behalf of Borrower, shall inure to the  benefit of the legal representatives, successors and assigns of Lender.  

 

   -122-  29949910.v4  SECTION 10.2. Lender’s Discretion.  Whenever pursuant to this Agreement, Lender exercises  any right given to it to approve or disapprove, or to make any election, waiver, or request, or to make any  determination, or find that any arrangement or term is to be satisfactory to Lender, the decision of Lender  to approve or disapprove, or to make such election, waiver, request, or determination, decision, or finding  shall (except as is otherwise specifically herein provided) be in the sole and absolute discretion of Lender  and shall be final and conclusive. Whenever pursuant to this Agreement, Lender exercises any right given  to it to reasonably approve or disapprove, or to make any election, waiver, or request, or to make any  determination reasonably, or find that any arrangement or term is to be reasonably satisfactory to Lender,  during the continuance of an Event of Default, the decision of Lender to approve or disapprove, or to make  such election, waiver, request, or determination, decision, or finding shall (except as is otherwise  specifically herein provided) be in the sole and absolute discretion of Lender and shall be final and  conclusive.  SECTION 10.3. Governing Law.  (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW  YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE  STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT  HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE  PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE  UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,  INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS  OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE  AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER  AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE  AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS  OF LAWS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS  LAW)) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, TO THE  FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE  OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND  ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS  ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY  LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY  CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS  AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT,  THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND  CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK  PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.  (b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR  BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER  LOAN DOCUMENTS MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR  STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO  SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER  WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON  VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR  PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE  JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.   BORROWER DOES HEREBY DESIGNATE AND APPOINT:  

 

   -123-  29949910.v4  DELANEY CORPORATE SERVICES, LTD.  99 WASHINGTON AVENUE, SUITE 805A  ALBANY, NEW YORK, 12210  AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF  SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT,  ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW  YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS  AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN  THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE  SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING  IN THE STATE OF NEW YORK.  BORROWER (I) SHALL GIVE PROMPT NOTICE TO  LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,  (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE  AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH  SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND  ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH  A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW  YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.  NOTHING  CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE PROCESS IN  ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS  OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION.  THIS  PROVISION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.  SECTION 10.4. Modification, Waiver in Writing.  No modification, amendment, extension,  discharge, termination or waiver of any provision of this Agreement, or of the Note, or of any other Loan  Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the  same shall be in a writing signed by each of the parties hereto, and then such waiver or consent shall be  effective only in the specific instance, and for the purpose, for which given.  Except as otherwise expressly  provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future notice  or demand in the same, similar or other circumstances.  SECTION 10.5. Delay Not a Waiver.  Neither any failure nor any delay on the part of Lender in  insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right,  power, remedy or privilege hereunder, or under the Note or under any other Loan Document, or under any  other instrument given as security therefor, shall operate as or constitute a waiver thereof, nor shall a single  or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power,  remedy or privilege.  In particular, and not by way of limitation, by accepting payment after the due date  of any amount payable under this Agreement, the Note or any other Loan Document, Lender shall not be  deemed to have waived any right either to require prompt payment when due of all other amounts due under  this Agreement, the Note or the other Loan Documents, or to declare a default for failure to effect prompt  payment of any such other amount.  A waiver of one Default or Event of Default shall not be construed to  be a waiver of any subsequent Default or Event of Default or to impair any remedy, right or power  consequent thereon.  SECTION 10.6. Notices.  All notices, consents, approvals and requests required or permitted  hereunder or under any other Loan Document shall be given in writing and shall be effective for all purposes  if hand delivered or sent by (a) certified or registered United States mail, postage prepaid, return receipt  requested or (b) expedited prepaid delivery service, either commercial or United States Postal Service, with  proof of attempted delivery (with a copy of any notice delivered by the methods described in clause (a) or  clause (b) to be sent by electronic mail), addressed as follows (or at such other address and Person as shall  

 

   -124-  29949910.v4  be designated from time to time by any party hereto, as the case may be, in a written notice to the other  parties hereto in the manner provided for in this Section 10.6):  If to Lender: OPG Hermes Investments (DE) LLC  c/o Oxford Properties Group  450 Park Avenue 10th Floor  New York, New York 10022  Attention:  Legal Counsel  with a copy to: Fried, Frank, Harris, Shriver & Jacobson LLP  One New York Plaza  New York, New York 10004  Attention:  Michael Vines, Esq.  If to Borrower: Complex Therapeutics Mezzanine LLC  c/o Instil Bio, Inc.   3963 Maple Avenue, Suite 350  Dallas, Texas 75219  Attention:  Sandeep Laumas  With a copy to: Cooley LLP  4401 Eastgate Mall  San Diego, California 92121-1909  Attention:  David Crawford, Esq.  A notice shall be deemed to have been given:  (i) in the case of hand delivery or delivery by a reputable  overnight courier, at the time of delivery; (ii) in the case of registered or certified mail, when delivered or  the first attempted delivery on a Business Day; (iii) or in the case of expedited prepaid delivery, upon the  first attempted delivery on a Business Day. Any failure to deliver a notice by reason of a change of address  not given in accordance with this Section 10.6, or any refusal to accept notice, shall be deemed to have been  given when the delivery was attempted. Any notice required or permitted to be given by any party hereunder  or under any other Loan Document may be given by its counsel and any notice required or permitted to be  given by Lender hereunder or under any other Loan Document may also be given by a Servicer.  SECTION 10.7. Trial by Jury.  BORROWER AND LENDER HEREBY AGREE NOT TO  ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY  RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL  NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY  CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH.   THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND  VOLUNTARILY BY 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 AND BORROWER ARE EACH  HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS  CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER AND LENDER.  SECTION 10.8. Headings.  The Article and/or Section headings and the Table of Contents in this  Agreement are included herein for convenience of reference only and shall not constitute a part of this  Agreement for any other purpose.  

 

   -125-  29949910.v4  SECTION 10.9. Severability.  Wherever possible, each provision of this Agreement shall be  interpreted in such manner as to be effective and valid under applicable law, but if any provision of this  Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the  extent of such prohibition or invalidity, without invalidating the remainder of such provision or the  remaining provisions of this Agreement.  SECTION 10.10. Preferences.  Lender shall have the continuing and exclusive right to apply or  reverse and reapply any and all payments by Borrower to any portion of the Debt.  To the extent Borrower  makes a payment or payments to Lender, which payment or proceeds or any part thereof are subsequently  invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver  or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to  the extent of such payment or proceeds received, the Obligations hereunder or part thereof intended to be  satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been  received by Lender.  SECTION 10.11. Waiver of Notice.  Borrower hereby expressly waives, and shall not be entitled  to, any notices of any nature whatsoever from Lender except with respect to matters for which this  Agreement or the other Loan Documents specifically and expressly provide for the giving of notice by  Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable  Legal Requirements, permitted to waive the giving of notice.  Borrower hereby expressly waives the right  to receive any notice from Lender with respect to any matter for which this Agreement or the other Loan  Documents do not specifically and expressly provide for the giving of notice by Lender to Borrower.  SECTION 10.12. Remedies of Borrower.  In the event that a claim or adjudication is made  (except any claim or adjudication arising out of any exercise of remedies by Lender) that Lender or any of  its agents have acted unreasonably or unreasonably delayed acting in any case where by law or under this  Agreement or the other Loan Documents, Lender or such agent, as the case may be, has an obligation to  act reasonably or promptly, Borrower agrees that neither Lender nor its agents shall be liable for any  monetary damages, and Borrower’s sole remedies shall be limited to commencing an action seeking  injunctive relief or declaratory judgment.  The parties hereto agree that any action or proceeding to  determine whether Lender has acted reasonably shall be determined by an action seeking declaratory  judgment. Further, it is agreed Lender shall not be in default under this Agreement, or under any other Loan  Document, unless a written notice specifically setting forth the claim of Borrower shall have been given to  Lender within thirty (30) days after Borrower first had knowledge of the occurrence of the event which  Borrower alleges gave rise to such claim and Lender does not remedy or cure the default, if any there be,  promptly thereafter.  Failure to give such notice shall constitute a waiver of such claim.  SECTION 10.13. Expenses; Indemnity.  (a) Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse,  Lender, within ten (10) Business Days following receipt of written notice from Lender for all reasonable  out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by  Lender in connection with (i) the preparation, negotiation, execution and delivery of this Agreement and  the other Loan Documents and the consummation of the transactions contemplated hereby and thereby and  all the costs of furnishing all opinions by counsel for Borrower (including without limitation any opinions  requested by Lender as to any legal matters arising under this Agreement or the other Loan Documents with  respect to the Property or the Collateral); (ii) Borrower’s ongoing performance of and compliance with  Borrower’s respective agreements and covenants contained in this Agreement and the other Loan  Documents on its part to be performed or complied with after the Closing Date, including confirming  compliance with environmental and insurance requirements; (iii) Lender’s ongoing performance and  compliance with all agreements and conditions contained in this Agreement and the other Loan Documents  

 

   -126-  29949910.v4  on its part to be performed or complied with after the Closing Date; (iv) the negotiation, preparation,  execution, delivery and administration of any consents, amendments, waivers or other modifications to this  Agreement and the other Loan Documents and any other documents or matters requested by Lender;  (v) securing Borrower’s compliance with any requests made pursuant to the provisions of this Agreement  and the other Loan Documents; (vi) the filing and recording fees and expenses, title insurance and  reasonable fees and expenses of counsel for providing to Lender all required legal opinions, and other  similar expenses incurred in creating and perfecting the Liens in favor of Lender pursuant to this Agreement  and the other Loan Documents; (vii) enforcing or preserving any rights, either in response to third party  claims or in prosecuting or defending any action or proceeding or other litigation, in each case against,  under or affecting Borrower, Guarantor, this Agreement, the other Loan Documents, the Property, or any  other security given for the Loan; and (viii) enforcing any Obligations of or collecting any payments due  from Borrower under this Agreement, the other Loan Documents or with respect to the Property or the  Collateral or in connection with any refinancing or restructuring of the credit arrangements provided under  this Agreement in the nature of a “work-out” or of any insolvency or bankruptcy proceedings; provided,  however, that Borrower shall not be liable for the payment of any such costs and expenses to the extent the  same arise by reason of the illegal acts, gross negligence, bad faith or willful misconduct of Lender.  (b) Borrower shall indemnify, defend and hold harmless Lender, each Servicer, their  respective Affiliates, and their respective directors, managers, officers, partners, members, shareholders,  participants, employees, professionals and agents of any of the foregoing, and the successors and assigns  of the foregoing (each, an “Indemnified Party”), from and against any and all Losses that may be imposed  on, incurred by, or asserted against an Indemnified Party in any manner relating to or arising out of (i) any  Defaults or Events of Default under the Loan and/or in connection with the enforcement of the Loan  Documents, (ii) any breach by Borrower of its Obligations under, or any misrepresentation by any Borrower  Party contained in the Loan Documents, (iii) the use or intended use of the proceeds of the Loan, (iv) costs  incurred by Lender in connection with any amendment to, or restructuring of, the Debt or the Loan  Documents, (v) any accident, injury to, or death of, Persons or loss of or damage to the Property occurring  in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or  adjacent parking areas, streets or rights of way, (vi) any use, non-use or condition in, on or about the  Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking  areas, streets or rights of way, (vii) performance of any labor or services or the furnishing of any materials  or other property in respect of the Property or any part thereof, (viii) any failure of the Property to be in  compliance with any Legal Requirements, (ix) any and all claims and demands whatsoever which may be  asserted against an Indemnified Party by reason of any alleged obligations or undertakings on its part to  perform or discharge any of the terms, covenants, or agreements contained in any Lease or other agreement  relating to the Property, (x) any and all Losses that Lender may incur, directly or indirectly, as a result of a  breach of Sections 4.1.1(g) or 5.1.1(c) hereof by Borrower, and (xi) all Recourse Liabilities; provided,  however, that Borrower shall not have any obligation to Lender hereunder to the extent that the applicable  indemnified liabilities arise from the illegal acts, gross negligence, bad faith or willful misconduct of  Lender.  To the extent that the undertaking to indemnify, defend and hold harmless set forth in the preceding  sentence may be unenforceable because it violates any law or public policy, Borrower shall pay the  maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction  of all such indemnified liabilities incurred by Lender.  (c) 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 reasonably approved by the Indemnified Parties.  Notwithstanding the  foregoing, if the defendants in any such claim or proceeding include both Borrower and any Indemnified  Party and Borrower and such Indemnified Party shall have reasonably concluded that there are any legal  defenses available to it and/or other Indemnified Parties that are different from or in addition to those  available to Borrower, such Indemnified Party shall have the right to select separate counsel to assert such  

 

   -127-  29949910.v4  legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnified  Party, provided that no compromise or settlement shall be entered without Borrower’s consent, which  consent shall not be unreasonably withheld or delayed.  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.  (d) The indemnifications made pursuant to this Section 10.13 shall continue  indefinitely in full force and effect and shall survive and shall in no way be impaired by any of the following:  (i) any satisfaction, release or other termination of this Agreement, the Pledge Agreement or any other Loan  Document, (ii) any assignment or other transfer of all or any portion of this Agreement, the Pledge  Agreement or any other Loan Document or Lender’s interest in the Collateral (but, in such case, such  indemnifications shall benefit both the Indemnified Parties and any such assignee or transferee), (iii) any  exercise of Lender’s rights and remedies pursuant hereto, under the Pledge Agreement or under any other  Loan Document, including, but not limited to, foreclosure or acceptance of a deed in lieu of foreclosure,  (iv) any exercise of any rights and remedies pursuant to this Agreement, the Note or any of the other Loan  Documents, (v) any transfer of all or any portion of the Collateral (whether by Borrower or by Lender  following foreclosure or acceptance of a deed in lieu of foreclosure or at any other time), (vi) any  amendment to this Agreement, the Pledge Agreement, the Note or any other Loan Documents, and/or (vii)  any act or omission that might otherwise be construed as a release or discharge of Borrower from the  Obligations or any portion thereof.  SECTION 10.14. Schedules Incorporated.  The Schedules and Exhibits annexed hereto are  hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.  SECTION 10.15. Offsets, Counterclaims and Defenses.  Any assignee of Lender’s interest in  and to this Agreement, the Note and the other Loan Documents shall take the same free and clear of all  offsets, counterclaims or defenses which are unrelated to such documents which Borrower may otherwise  have against any assignor of such documents, and no such unrelated counterclaim or defense shall be  interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such  documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in  any such action or proceeding is hereby expressly waived by Borrower.  Borrower hereby waives  the right  to assert (and agrees not to assert) a counterclaim of any nature, other than a compulsory counterclaim, in  any action or proceeding brought against it by Lender or its agents or otherwise to offset any Obligations.   No failure by Lender to perform any of its obligations hereunder shall be a valid defense to, or result in any  offset against, any payments that Borrower is obligated to make under any of the Loan Documents.  SECTION 10.16. No Joint Venture or Partnership; No Third Party Beneficiaries.  Borrower  and Lender intend that the relationships created hereunder and under the other Loan Documents be solely  that of borrower and lender.  Nothing herein or therein is intended to create a joint venture, partnership,  tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor to grant Lender any  interest in the Collateral other than that of secured party or lender.  This Agreement and the other Loan  Documents are solely for the benefit of Lender and Borrower and nothing contained in this Agreement or  the other Loan Documents shall be deemed to confer upon anyone other than Lender and Borrower any  right to insist upon or to enforce the performance or observance of any of the Obligations contained herein  or therein.  All conditions to the obligations of Lender to make the Loan hereunder are imposed solely and  exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of such  conditions in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan  (or any disbursement of Reserve Funds) in the absence of strict compliance with any or all thereof and no  other Person shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of  

 

   -128-  29949910.v4  which may be freely waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deems it  advisable or desirable to do so.  SECTION 10.17. Publicity.  All news releases, publicity or advertising by Borrower or their  Affiliates through any media intended to reach the general public which refers to the Loan Documents or  the financing evidenced by the Loan Documents, to Lender or to any of its Affiliates shall be subject to the  prior approval of Lender, not to be unreasonably withheld, conditioned or delayed.  The foregoing shall not  be deemed to prohibit Guarantor from making disclosures of the Loan Documents and terms thereof as  required by applicable public company disclosure laws.  SECTION 10.18. Waiver of Marshalling of Assets.  To the fullest extent permitted by law,  Borrower, for itself and its successors and assigns, waives all rights to a marshalling of the assets of  Borrower, Borrower’s partners and others with interests in Borrower, and of the Collateral, or to a sale in  inverse order of alienation in the event of foreclosure of the Pledge Agreement, and agrees not to assert any  right under any laws pertaining to the marshalling of assets, the sale in inverse order of alienation,  homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat,  reduce or affect the right of Lender under the Loan Documents to a sale of the Collateral for the collection  of the Debt without any prior or different resort for collection or of the right of Lender to the payment of  the Debt out of the net proceeds of the Collateral in preference to every other claimant whatsoever.  SECTION 10.19. Conflict; Construction of Documents; Reliance.  In the event of any conflict  between the provisions of this Agreement and any of the other Loan Documents, the provisions of this  Agreement shall control.  The parties hereto acknowledge that they were represented by competent counsel  in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan  Documents shall not be subject to the principle of construing their meaning against the party that drafted  same.  Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely on its own  judgment and advisors in entering into the Loan without relying in any manner on any statements,  representations or recommendations of Lender or any parent, subsidiary or Affiliate of Lender.  Lender  shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it  under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue  of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them  may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take  any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies.   Borrower acknowledges that Lender engages in the business of real estate financings and other real estate  transactions and investments that may be viewed as adverse to or competitive with the business of Borrower  or its Affiliates.  SECTION 10.20. Brokers and Financial Advisors.  Borrower hereby represents that , except for  CBRE, the fees of which shall be paid solely by Borrower, it has dealt with no financial advisors, brokers,  underwriters, placement agents, agents or finders in connection with the transactions contemplated by this  Agreement.  Borrower shall indemnify, defend and hold Lender harmless from and against any and all  claims, liabilities, costs and expenses of any kind (including Lender’s attorneys’ fees and expenses) in any  way relating to or arising from a claim by any Person that such Person acted directly or indirectly, by or on  behalf of Guarantor, Borrower or any Affiliate thereof or was retained directly or indirectly, by or on behalf  of Guarantor, Borrower or any Affiliate thereof in connection with the transactions contemplated herein.   The provisions of this Section 10.20 shall survive the expiration and termination of this Agreement and the  payment of the Debt.  SECTION 10.21. Prior Agreements.  This Agreement and the other Loan Documents contain the  entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and  thereby, and all prior agreements among or between such parties, whether oral or written, including that  

 

   -129-  29949910.v4  certain Construction Loan Term Sheet, dated March 20, 2022, executed by Instil Bio, Inc., are superseded  by the terms of this Agreement and the other Loan Documents.  SECTION 10.22. Time is of the Essence.  Time is of the essence of each provision of this  Agreement and the other Loan Documents.  SECTION 10.23. Certain Additional Rights of Lender (VCOC).  Notwithstanding anything to  the contrary contained in this Agreement, Lender shall have:  (a) the right to routinely consult with and  advise Borrower’s management regarding the significant business activities and business and financial  developments of Borrower and Mortgage Borrower; provided, however, that such consultations shall not  include discussions of environmental compliance programs or disposal of hazardous substances.   Consultation meetings should occur on a regular basis (no less frequently than quarterly) with Lender  having the right to call special meetings at any reasonable times and upon reasonable advance notice; (b)  the right, in accordance with the terms of this Agreement, to examine the books and records of Borrower  and Mortgage Borrower at any reasonable times upon reasonable notice; (c) the right, in accordance with  the terms of this Agreement, including Section 5.1.1(f) hereof, to receive monthly, quarterly and year-end  financial reports, including balance sheets, statements of income, shareholder’s equity and cash flow, a  management report and schedules of outstanding Indebtedness; and (d) the right, without restricting any  other rights of Lender under this Agreement (including any similar right), to approve any acquisition by  Borrower and/or Mortgage Borrower of any other significant property (other than personal property  required for the day to day operation of the Property).  The rights described above in this Section 10.22  may be exercised by any entity which owns and Controls, directly or indirectly, substantially all of the  interests in Lender.  SECTION 10.24. Duplicate Originals, Counterparts.  This Agreement may be executed in any  number of duplicate originals and each duplicate original shall be deemed to be an original and all of which  together shall constitute a single agreement.  The failure of any party hereto to execute this Agreement, or  any counterpart hereof, shall relieve the other signatories from their obligations hereunder.  SECTION 10.25. Prepayment Charges.  Borrower acknowledges that (a) Lender is making the  Loan in consideration of the receipt by Lender of all interest and other benefits intended to be conferred by  the Loan Documents that is not prepayable except as provided in Section 2.4, and (b) if payments of  principal are made to Lender prior to the regularly scheduled due date for such payment, for any reason  whatsoever, whether voluntary, as a result of Lender’s acceleration of the Loan after an Event of Default,  by operation of law or otherwise, Lender will not receive all such interest and other benefits and may, in  addition, incur costs and expenses.  For these reasons, and to induce Lender to make the Loan, Borrower  expressly waives any right or privilege to prepay the Loan except as otherwise may be specifically permitted  herein and agrees that, except for any prepayment that is expressly permitted to be made pursuant to this  Agreement without the payment of the Prepayment Premium (as applicable), all prepayments, if any,  whether voluntary or involuntary, will be accompanied by the Prepayment Premium (as applicable), which  shall constitute additional interest.  Such Prepayment Premium (as applicable) shall be required whether  payment is made by Borrower, by a Person on behalf of Borrower, or by the purchaser at any foreclosure  sale, and may be included in any bid by Lender at such sale.  Borrower further acknowledges that (i) it is a  knowledgeable real estate developer or investor, (ii) it fully understands the effect of the provisions of this  Section 10.24, as well as the other provisions of this Agreement and the other Loan Documents, (iii) the  making of the Loan by Lender at the Interest Rate and other terms set forth in the Loan Documents are  sufficient consideration for Borrower’s obligation to pay the Prepayment Premium (as applicable), and (iv)  Lender would not make the Loan on the terms set forth herein without the inclusion of such provisions.   Borrower also acknowledges that the provisions of this Agreement limiting the right of prepayment and  providing for the payment of the Prepayment Premium (as applicable) and other charges specified herein  

 

   -130-  29949910.v4  were independently negotiated and bargained for and constitute a specific material part of the consideration  given by Borrower to Lender for the making of the Loan except as expressly permitted hereunder.  SECTION 10.26. Registrar.  Borrower (or its duly authorized agent; Borrower hereby appointing  Lender as its agent for such purpose; provided that if Lender uses a Servicer, such Servicer shall act for this  purpose as an agent of Borrower) (the “Registrar”) shall maintain or cause to be maintained a registry of  the ownership of the Note(s) at its principal office.  The Registrar shall act solely as an agent of Borrower  and shall maintain, subject to such reasonable regulations as it shall provide, such books and records (the  “Register”) as are necessary for the registration and transfer of the Note in a manner that shall cause the  Note(s) to be considered to be in “registered form” within the meaning of Sections 163(f), 871(h)(2) and  881(c)(2) of the Code and any related regulations (and any other relevant or successor provisions of the  Code or such regulations).  In connection with the foregoing:  (i) the Register shall reflect Lender as the  original owner of the Note(s), (ii) the Register shall reflect such subsequent transferees as the Registrar  shall receive notice of, by delivery to it of a notice of an assignment of such Note, duly executed by the  then current owner thereof, (iii) the Registrar shall record the name and address of each Lender and the  amount of principal (and stated interest) owing to each Lender under this Agreement, (iv) Borrower and  Lender shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as  Lender hereunder for all purposes of this Loan Agreement, notwithstanding notice to the contrary.  Failure  to make any such recordation, or any error in such recordation, shall not affect Borrower’s or Lender’s  obligations in respect of such Loan.  Any Lender that sells a participation under Section 9.1 shall, acting  solely for this purpose as an agent of Borrower, maintain or cause to be maintained a registry including the  name and address of each participant and the principal amounts (and stated interest) of each participant’s  interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided  that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including  the identity of any participant or any information relating to a Participant’s interest in any commitments,  loans, letters of credit or its other obligations under any Loan Document) to any person except to the extent  that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation  is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  Failure to make  any such recordation, or any error in such recordation, shall not affect Borrower’s or Lender’s obligations  in respect of such Loan.  Such Lender shall treat the person in whose name any participation is registered  as the owner thereof for the purpose of receiving all payments thereon and for all other purposes.  SECTION 10.27. Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  (a) Notwithstanding anything to the contrary in any Loan Document or in any other  agreement, arrangement or understanding among the respective parties thereto, each party hereto  acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the  extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA  Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:  (i) the application of any Write-Down and Conversion Powers by an EEA  Resolution Authority to any such liabilities arising hereunder which may be payable to it  by any party hereto that is an EEA Financial Institution; and  (ii) the effects of any Bail-in Action on any such liability, including, if  applicable:  (iii) a reduction in full or in part or cancellation of any such liability;  (A) a conversion of all, or a portion of, such liability into shares or  other instruments of ownership in such EEA Financial Institution, its parent  

 

   -131-  29949910.v4  undertaking, or a bridge institution that may be issued to it or otherwise conferred  on it, and that such shares or other instruments of ownership will be accepted by it  in lieu of any rights with respect to any such liability under this Agreement or any  other Loan Document; or  (B) the variation of the terms of such liability in connection with the  exercise of the Write-Down and Conversion Powers of any EEA Resolution  Authority.  SECTION 10.28. Servicer.  At the option of Lender, the Loan may be serviced by a  servicer/trustee (the “Servicer”) selected by Lender and Lender may delegate all or any portion of its  responsibilities under this Agreement and the other Loan Documents to the Servicer pursuant to a servicing  agreement between Lender and Servicer. Borrower shall be responsible for set up fees and other regularly  scheduled servicing fees and any other reasonable costs and expenses of the Servicer in connection with  the Loan, including (without limitation) any fees and expenses of the Servicer in connection with any  requests of Borrower, any prepayment, amendment or modification of the Loan, any special servicing or  work-out of the Loan or enforcement of the Loan Documents.  SECTION 10.29. Lead Lender and Co-Lender Provisions.  (a) Lead Lender.  Notwithstanding anything to the contrary contained in this  Agreement or any of the other Loan Documents, if at any time there is more than one Lender hereunder,  each such Lender shall deliver a written notice to Borrower designating one lender or an affiliate thereof as  the “Lead Lender” (such Lender, at all times thereafter and until resignation or replacement of such Lender  by written notice to Borrower, the “Lead Lender”).  Each Lender hereby appoints Lead Lender to serve as  non-fiduciary administrative agent and collateral agent for each Lender and hereby agrees that Lead Lender  shall be the sole party authorized to grant or withhold consents or approvals hereunder on behalf of the  other Lenders (subject, in each case, to appointment of a servicer to receive such notices, requests and other  communications and/or to grant or withhold consents or approvals, as the case may be). No Lender shall  have any liabilities or responsibilities to Borrower on account of the failure of any other Lender to perform  its obligations hereunder or to any Lender on account of the failure of Borrower to perform its obligations  hereunder or under any other Loan Document.  (b) Co-Lender Agreement.  Borrower hereby acknowledges and agrees that if at any  time there is more than one Lender hereunder, such Lenders may enter into one or more agreements (any  such agreement as the same may be modified, amended, restated supplemented or replaced from time to  time, a “Co-Lender Agreement”) governing the relationship between such parties, including, without  limitation, the rights of such Lenders and the manner in which such Lenders shall administer the Loan.  Any  Co-Lender Agreement is intended and will be solely for the benefit of the Lender, and Borrower  acknowledges and agrees that neither any Borrower Party nor any other Person shall be a third-party  beneficiary (intended or otherwise) of any of the provisions therein, or have any rights thereunder or be  entitled to rely on any of the provisions contained therein.  Lender shall not have any obligation to provide  a copy of any Co-Lender Agreement to any Borrower Party or any Affiliate of any Borrower Party or to  disclose to any Borrower Party or any Affiliate of any Borrower Party the contents of any Co-Lender  Agreement.  Each Borrower Party’s obligations under the Loan Documents are and will be independent of  any Co-Lender Agreement and shall remain unmodified by the provisions thereof (although Borrower  acknowledges that with respect to certain approvals, calculations and other decisions hereunder, any Co- Lender Agreement may require Lead Lender to consult with or receive the approval of one or more other  Lenders prior to providing its own approval or determination regarding the same).  Borrower shall be  entitled to rely on waivers, consents and/or approvals granted by Lead Lender.  [NO FURTHER TEXT ON THIS PAGE; SIGNATURE PAGE FOLLOWS]    

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above. BORROWER: COMPLEX THERAPEUTICS MEZZANINE LLC, a Delaware limited liability company By: Name: Sandeep Laumas Title: Authorized Signatory [Signature Page to Mezzanine Loan Agreement] 

 

 

 

 

 

EXHIBIT A  Property Description  THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LOS ANGELES, IN  THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS  FOLLOWS:  PARCEL 1:  LOT 150 OF TRACT NO. 5692, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES,  STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 60, PAGES 72 AND 73 OF MAPS,  IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.  PARCEL 2:  LOTS 151 AND 152 OF TRACT NO. 5692, IN THE CITY OF LOS ANGELES, COUNTY OF LOS  ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 60, PAGES 72 AND 73  OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.  PARCEL 3:  LOT 153 OF TRACT NO. 5692, IN THE CITY OF LOS ANGELES, IN THE COUNTY OF LOS  ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 60 PAGES 72 AND 73  OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.  PARCEL 4:  LOT 154 OF TRACT NO. 5692, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES,  STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 60, PAGES 72 AND 73 OF MAPS,  IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.  EXCEPT ALL MINERALS, COALS, OILS, PETROLEUM AND KINDRED SUBSTANCES AND  NATURAL GAS UNDER AND IN THAT PORTION OF SAID LAND LYING WITHIN THE  BOUNDARIES OF TRACT NO. 1875, AS PER MAP RECORDED IN BOOK 19, PAGE 38 OF  MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, AS RESERVED OF  RECORD.  APN: 2157-001-158  

 

EXHIBIT B  FORM OF MAJOR TRADE CONTRACTOR CONSENT  [ATTACHED]  

 

FORM MAJOR TRADE CONTRACTOR CONSENT AND AGREEMENT OPG Hermes Investments (DE) LLC  c/o Oxford Properties Group  450 Park Avenue 10th Floor  New York, NY 10022  Property: 18408-18412 Oxnard Street, Los Angeles, CA  91356  Mortgage Borrower: COMPLEX THERAPEUTICS LLC  Mezzanine Borrower: COMPLEX THERAPEUTICS MEZZANINE LLC  Ladies and Gentlemen:  The undersigned, a contractor (“Trade Contractor”) on the captioned Property,  understands that (i) OPG Hermes Investments (DE) LLC, a Delaware limited liability company,  having an address at c/o Oxford Properties Group, 450 Park Avenue, 10th Floor, New York,  New York 10022 (together with its successors and assigns, “Lender”) has made a loan to  Mezzanine Borrower in the maximum principal amount of up to $30,000,000.00 (the “Loan”)  pursuant to that certain Mezzanine Loan Agreement, dated as of the date hereof, between  Mezzanine Borrower and Lender (as the same may be amended, restated, supplemented,  extended, replaced or otherwise modified from time to time, the “Loan Agreement”), and (ii)  OPG Hermes Investments (DE) LLC, a Delaware limited liability company, having an address at  c/o Oxford Properties Group, 450 Park Avenue, 10th Floor, New York, New York 10022  (together with its successors and assigns, “Mortgage Lender”) has made a loan to Mortgage  Borrower in the maximum principal amount of up to $55,000,000.00 (the “Mortgage Loan”)  pursuant to that certain Loan Agreement, dated as of the date hereof, between Mortgage  Borrower and Mortgage Lender (as the same may be amended, restated, supplemented, extended,  replaced or otherwise modified from time to time, the “Mortgage Loan Agreement”). The Loan  shall be used in part to fund, among other things, a portion of the costs of constructing the  proposed improvements at the Property (the “Required Improvements”).  Capitalized terms  used but not otherwise defined herein shall have the respective meanings given thereto in the  Loan Agreement.  Trade Contractor hereby agrees with Lender as follows:  1. Attached hereto as Schedule I is a true and complete copy of our agreement with [____] (“Agent”), as agent for Borrower, dated [_______], 20[_], to construct and/or renovate a portion of the Required Improvements (the “Trade Contract”) in accordance with the plans and specifications set forth with respect to such portion of the Required Improvements as more particularly described in the Trade Contract. All provisions in this letter are subject to the rights of Mortgage Lender under the Mortgage Loan.  In the event of any conflict between the rights of any party under this letter and the rights of Mortgage Lender under the Mortgage Loan Agreement, the rights of Mortgage Lender under the Mortgage Loan Documents shall control. 

 

    2. Trade Contractor hereby acknowledges and consents to a subordination of the Trade  Contract to Lender.  In the event Lender, its nominee, subsidiary, successor(s) or assign(s) (the  “Successor”), shall acquire ownership of any direct or indirect interest in Mortgage Borrower  (such direct or indirect interest, the “Collateral”) through foreclosure, assignment in lieu of  foreclosure, or receivership, then, at the request of the Successor, and upon Successor’s written  agreement to accept Trade Contractor’s attornment, Trade Contractor shall attorn to Successor  (in its capacity as owner of the Mortgage Borrower) and shall promptly execute and deliver any  instrument the Successor may require to evidence such attornment.  Upon such attornment, the  Trade Contract shall continue in full force and effect.  3. At the request of the Mezzanine Borrower and in order to induce Lender to make  advances of the Loan, Trade Contractor hereby acknowledges and agrees that (i) no  amendment, modification, or supplement of the Trade Contract, in any material respect, shall be  permitted without Lender’s prior written consent, and (ii) Lender may enforce the obligations of  the Trade Contract with the same force and effect as if enforced by the Mortgage Borrower.   Except as permitted pursuant to the terms of paragraph 5 below, Trade Contractor shall not  terminate or surrender the Trade Contract without Lender’s prior written consent and will  promptly notify Lender in writing of any attempted termination or surrender of the Trade  Contract by Mortgage Borrower. Notwithstanding anything to the contrary contained in the  Trade Contract, if Lender or its designee shall become the owner of the Collateral by reason of  foreclosure, acceptance of an assignment-in-lieu of foreclosure, or otherwise, the Trade Contract  shall not terminate solely by reason of such sale, transfer or conveyance of the Collateral unless  Lender elects to terminate the Trade Contract in accordance with the terms of this Consent.  4. Trade Contractor represents and warrants that (i) except for any assignment to Mortgage  Lender, it has no notice of any prior assignment of the Trade Contract, (ii) the Trade Contract is  a valid, enforceable agreement, (iii) neither Trade Contractor nor, to the knowledge of Trade  Contractor, the Mortgage Borrower is in default thereunder, (iv) all covenants, conditions and  agreements required to have been performed by Trade Contractor have been performed as  required therein, except those not due to be performed until after the date hereof, (v) Trade  Contractor is duly licensed to conduct its business in the jurisdiction where the construction is to  be performed and will maintain said license in full force and effect throughout the life of the  Trade Contract, and (vi) as of the date hereof, the subcontractors employed by Trade Contractor  (if any) with respect to the Property have been paid all amounts due and payable in accordance  with their subcontracts. Trade Contractor further agrees that if it at any time gives a notice of  default to the Mortgage Borrower under the Trade Contract, Trade Contractor shall provide a copy of  such notice simultaneously to Lender at the following address:  If to Lender: OPG Hermes Investments (DE) LLC   c/o Oxford Properties Group   450 Park Avenue 10th Floor   New York, NY 10022   Attention:  Legal Counsel       with a copy to:   Fried, Frank, Harris, Shriver & Jacobson LLP       One New York Plaza  

 

New York, New York 10004  Attention:  Michael Vines, Esq.  5. Trade Contractor further agrees that if it at any time gives a notice of default to Mortgage Borrower under the Trade Contract, Trade Contractor shall not exercise any remedy, including, but not limited to, any right to terminate the Trade Contract, unless and until Trade Contractor gives notice to Lender of its intent to exercise such remedy and provides Lender the opportunity to remedy or cure such breach within  the greater of (i) the period set forth in the Trade Contract or (ii) ninety (90) days thereafter, or if such breach cannot by its nature be cured within ninety (90) days, such longer period as is required so long as Lender shall have commenced curing such breach during such period and thereafter shall diligently and continuously prosecute the same to completion; provided that Lender shall have no obligation to cure or cause the cure of such default. 6. Additionally, and in consideration of the Lender’s making of the Loan, Trade Contractor agrees that in the event of (x) a default under the Trade Contract by Mortgage Borrower beyond any applicable notice and cure periods or (y) a default by Borrower beyond applicable notice and cure periods under any of the documents now or hereafter executed and delivered in connection with the Loan, as the same may be from time to time amended and supplemented, Trade Contractor shall, at Lender’s request, (i) continue performance under the Trade Contract in accordance with the terms thereof, provided that Trade Contractor is paid in accordance with the Trade Contract, without regard to any modifications thereto not approved in writing by Lender (to the extent approval was required pursuant to Section 3 above), for all services rendered after Lender’s election to have Trade Contractor continue performing, further provided that the time periods set forth in the Trade Contract for performance by Mortgage Borrower shall be deemed extended by the period of time necessary to allow Lender to obtain ownership of the Collateral in accordance with the terms of the Loan Agreement, or (ii) terminate the Trade Contract without payment of any penalty or termination fees and, at Lender’s election, immediately assign all of its rights under any subcontracts to Lender. 7. If any proceeds of the Loan made by the Lender are disbursed directly to Trade Contractor, then Trade Contractor shall receive the same in trust for the purpose of paying the costs of constructing the Required Improvements due and payable to contractors, subcontractors, suppliers, laborers and materialmen and will apply the same to such payment. 8. The person executing this letter on behalf of Trade Contractor hereby certifies that he or she has the authority to do so and that Trade Contractor has full authority under all state and local laws and regulations to perform all of its obligations under the Trade Contract in accordance with the terms thereof. 9. The provisions set forth in this letter shall be binding upon Trade Contractor and Trade Contractor’s successors and assigns and shall inure to the benefit of Lender and its successors and assigns. 10. Trade Contractor agrees that any termination of Agent’s role as agent for Mortgage Borrower under the Trade Contract or any other termination, cancellation or expiration of that 

 

certain [______], dated as of [______, 20__], between Agent and Borrower shall not in and of  itself affect, impair, limit or otherwise alter the rights of Mortgage Borrower or Mezzanine  Borrower or obligations of Trade Contractor under the Trade Contract.  

 

Dated:  [______], 2022  [CONTRACTOR]  By:  ______________________________  Name:  Title:  

 

Schedule I  Trade Contract  

 

EXHIBIT C  FORM OF OFFICER’S CERTIFICATE  Borrower Name: COMPLEX THERAPEUTICS MEZZANINE LLC, a Delaware limited liability  company  Property Address: 18408-18412 Oxnard Street, Los Angeles, California 91356  This Officer’s Certificate is being delivered in accordance with that certain Mezzanine Loan  Agreement dated June 10, 2022 (the “Loan Agreement”) among Borrower, Complex Therapeutics LLC,  a Delaware limited liability company, and OPG Hermes Investments (DE) LLC, a Delaware limited liability  company (“Lender”).  Capitalized terms used in this Officer’s Certificate and not specifically defined  herein have the meaning provided in the Loan Agreement.  The undersigned officer of Borrower, having  personal knowledge of the matters set forth herein, hereby certifies on behalf of Borrower, and not in his/her  individual capacity, the following:  [___] Pursuant to Section 2.1.5(a) (Requests for Additional Advances):   Borrower requests  an Additional Advance pursuant to Section 2.1.5(a) and hereby represents, warrants, and certifies that:  (i)  all Advance Items to be funded by the requested disbursement involving construction or alteration work  have been completed in a good and workmanlike manner and in accordance in substantial accordance with  all applicable Legal Requirements and Plans and Specifications; (ii) all Additional Advance (or a portion  thereof) to be funded are to be used for the payment of Approved Project Expenditures, Cash Expenses or  Approved Extraordinary Expenses, as applicable; (iii) Borrower has previously provided to Lender, or  attached to this Officer’s Certificate is, a copy of any license, permit or other approval by any Governmental  Authority required to commence and/or complete such Advance Item; (iv) each Person that supplied  materials or labor in connection with the Advance Item to be funded by the requested disbursement is  identified on a schedule included with this Officer’s Certificate; (v) each such Person has been paid in full  or will be paid in full upon such disbursement for all amounts due and payable to such Person through the  date hereof; (vi) included with this Officer’s Certificate is a full or partial lien waiver (as applicable) or  other evidence of payment reasonably satisfactory to Lender with respect to such Person(s); (vii) included  with this Officer’s Certificate are copies of all bills, invoices, receipts and other documentation requested  by Lender to be reimbursed or paid by the Additional Advance (or a portion thereof); (viii) all prior  Additional Advances requested for the payment of Costs have been spent on Cash Expenses and/or  Approved Extraordinary Expenses for which such Additional Advances were made; and (ix) the Closing  Date Minimum Equity Requirement is satisfied and Borrower has made no distributions.  [___] Pursuant to Section 5.1.1(d) (Transfers): Borrower certifies that (i) all the  requirements of Section 5.1.1(d) are satisfied and (ii) with respect to Section 5.1.1(d)(iii), (x) the  consideration, if any, being paid for any such encumbrance is commercially reasonable and (y) any such  encumbrance does not materially impair the utility and operation of the Property, materially reduce the  value of the Property or otherwise have a Material Adverse Effect.   [___] Pursuant to Section 5.1.1(f) (Delivery of Reports): To the knowledge of the  undersigned:  [___] – Annual/Quarterly Reports:  Each financial statement, or other report included  with this Officer’s Certificate (as applicable) are true, correct, and complete in all material respects, and  fairly presents in all material respects the financial condition and the results of operations of Borrower and  the Property (subject to normal year-end adjustments) being reported upon as of the date set forth in such  

 

documents and such financial statements have been prepared in accordance with the Approved Accounting  Method.  [___] – Annual/Quarterly Reports:  As of the date hereof there exists no event or  circumstance which constitutes a Default or Event of Default under by Borrower under the Loan  Documents other than [PLEASE DESCRIBED IF APPLICABLE, INCLUDING THE PERIOD OF TIME  IT HAS EXISTED AND THE ACTION THEN BEING TAKEN TO REMEDY THE SAME:   ______________].   [___] – Quarterly Reports:  Subject to any appropriate reconciliations, the quarterly and  year-to-date operating statements included with this Officer’s Certificate, noting Net Operating Income,  Operating Income and Operating Expenses, are true, correct, accurate, and complete in all material respects  and fairly present in all material respects the financial condition and results of the operations of Borrower  and the Property (subject to normal year-end adjustments).  [___] – Quarterly Reports:  Borrower’s calculation of the Debt Yield for the twelve (12)  month period ending at the end of the most recently-completed calendar quarter (based on Borrower’s  reasonable expectation of the adjustments to be made to such calculations pursuant to the definition of  UNOI contained in the Loan Agreement), is as follows:  Debt Yield:  [___]%  BY SIGNING BELOW, the undersigned certifies on behalf of Borrower, and not in his/her individual  capacity,  that (a) all information provided in this Officer’s Certificate is true, complete, and correct in all  material respects and does not omit any material fact that would make any such information false or  misleading, and (b) the undersigned representative is duly authorized to sign this Officer’s Certificate on  Borrower’s behalf.  Date:  [________]  Name:  Title:  

 

EXHIBIT D  INITIAL APPROVED ANNUAL BUDGET  [***]  

 

EXHIBIT E  FORM OF REQUISITION LETTER  BORROWER AND MEZZANINE BORROWER’S REQUISITION LETTER  Requisition No.  MORTGAGE LENDER: OPG Hermes Investments (DE) LLC, a Delaware limited  liability company  MEZZANINE LENDER: OPG Hermes Investments (DE) LLC, a Delaware limited  liability company  MORTGAGE BORROWER: Complex Therapeutics LLC, a Delaware limited liability  company  MEZZANINE BORROWER: Complex Therapeutics Mezzanine LLC, a Delaware limited  liability company  DATE: [__________________]  PREMISES: 18408-18412 Oxnard Street, Los Angeles, California 91356  PERIOD COVERED: [___________________] to [__________________]  Pursuant to the Loan Agreement (the “Agreement”) and Mezzanine Loan Agreement (“Mezzanine  Loan Agreement”) for the subject Loan, Borrower and Mezzanine Borrower hereby authorize and request an  advance in the amount of $[_______] (the “Requested Amount”), which is comprised of the items provided  for in the attached requisition, Section 2.1.5(a) of the Loan Agreement and Mezzanine Loan Agreement  which sets forth and specifies the Hard Costs, Soft Costs and Interest and Carry Costs to be paid from the  proceeds of the requested Advance and which has become payable by Borrower.   Borrower requests that the funds be wired on [___________], 20[__] in accordance with the  following wire instructions:  Amount:  $[___________]  Bank:  [___________]  ABA #:  [___________]  Account Name: [___________]  Account #: [___________]  Attention:  [___________]  The Hard Costs, Soft Costs and Interest and Carry Costs to be paid by the Requested Amount are  more particularly set forth on Schedule I attached hereto. The Requested Amount is comprised of:  Mortgage Funding Share:   $[__________]  Mezzanine Funding Share: $[__________]  

 

In connection with and in order to induce Lender and Mezzanine Lender to advance the amount  requested above, Borrower hereby represents, warrants and stipulates, as of the date hereof, as follows:  1. To Borrower’s knowledge, the amounts requested herein are true and correct. 2. No Default or Event of Default exists at the time the Additional Advance is requested or as of the Advance Date.  3. Borrower submitted this Draw Request to Lender in accordance with the requirements of Section 2.1.5(a) of the Loan Agreement, together with all applicable documents  required to be delivered with such Draw Request pursuant to Section 2.1.5(b) Loan Agreement.  4. Borrower submitted evidence reasonably satisfactory to Lender that Borrower has paid (or will pay concurrently with the funding of the Additional Advance), from its own funds, at  least the greater of (A) (i) with respect to Additional Advances for Approved Project Expenditures,  the Required Borrower Equity Advance with respect to the cost of the applicable Approved Project  Expenditure and (ii) with respect to Additional Advances for Interest and Carry Costs, the Required  Borrower Equity Advance with respect to the applicable Interest and Carry Costs Shortfall, and (B)  the actual cost of the applicable Advance Item less the amount to be advanced by Lender hereunder  and by Mortgage Lender under the Mortgage Loan Agreement for such Advance Item.  5. Intentionally Omitted. 6. A list of amendments, replacements, supplements or other modifications made to the Plans and Specifications not previously delivered to Construction Consultant, and a true and  complete copy of each such amendments, replacements, supplements or other modification have  been delivered to Construction Consultant. Borrower submitted to Lender a list identifying the  Plans and Specifications as in effect as of such Advance Date.  7. Borrower has obtained (or has caused to be obtained) from the Title Company (or Borrower will cause to be obtained a commitment from the Title Company to issue) an ALTA 33  Disbursement Endorsement to the Title Policy, to be dated and effective on the date of disbursement  of the Additional Advance which evidences (i) no new exceptions to the Title Policy other than  Permitted Encumbrances (other than Permitted Encumbrances set forth in clause (vi) of the  definition thereof unless actually bonded or discharged) since the date of the last Additional  Advance (with affirmative insurance that no Taxes or Other Charges (other than Taxes and Other  Charges being contested in accordance with the Loan Agreement) are delinquent, and (ii) increases  the Title Policy liability amount by the amount of the Additional Advance as of the new Date of  Coverage (as defined in the ALTA 33 Disbursement Endorsement).  8. Each of the representations and warranties of Borrower and Guarantor contained in each of the Loan Documents will be true, complete and correct in all material respects as if made  on (and with respect to facts and circumstances existing as of) the Advance Date, except for any  changes in facts or circumstances occurring since the Closing Date that do not constitute a Default  or Event of Default or were not caused by the occurrence of a Default or Event of Default and, in  any event, do not result in a Material Adverse Effect.    

 

9. Borrower has obtained (or has caused to be obtained) all Construction Permits required under Legal Requirements for the actual stage of construction on the Property and  delivered to Lender a copy of each of the Construction Permits.  10. Borrower has paid or reimbursed all of Lender’s outstanding fees and expenses (including fees and expenses of the Construction Consultant, and all other fees, costs and expenses  of (including fees and expenses of outside legal counsel) relating to the Loan to the extent then due  and payable, pursuant to the applicable provisions of this Agreement and the other Loan  Documents.  11. Except as otherwise permitted under the Loan Documents, all material and fixtures incorporated in the construction of the Project have been purchased so that their absolute ownership  has vested in Borrower immediately upon delivery to the Property and Borrower has produced and  furnished, if required by Lender, the contracts, bills of sale or other agreements under which title  to such materials and fixtures is claim.  12. The Loan is in balance as provided in Section 2.1.11 of the Loan Agreement. 13. There is no pending or threatened litigation known to Borrower or its counsel against Borrower, Mortgage Borrower, Master Tenant, Guarantor, Manager, General Contractor or  the Property which, if decided unfavorably, could reasonably be expected to result in (i) a change  in Control of Borrower, Master Tenant or Manager, (ii) a Material Adverse Effect, or (iii) the failure  of Guarantor to satisfy the Financial Covenant Requirement.  14. Borrower has delivered (or has caused to be delivered) to Lender all documents, reports, certificates, affidavits and other information, in form and substance reasonably satisfactory  to Lender or Construction Consultant, as each may reasonably require, to evidence compliance by  Borrower with the terms and conditions to be complied with by Borrower in connection with the  disbursement of the applicable Additional Advance.  15. Borrower has delivered (or has caused to be delivered) to Lender evidence of compliance with all recommendations set forth in the Environmental Report or any future  environmental report or assessment requested by Lender under the terms of the Environmental  Indemnity; provided, that, by undertaking the measures identified in and pursuant to Section  2.1.6(j) of the Loan Agreement, Lender shall not be deemed to be exercising any control over  operations of Borrower or the handling of any environmental matter or hazardous wastes or  substances of Borrower for purposes of incurring or being subject to liability therefor.  16. No Interest and Carry Cost Shortfall exists. 17. Other than matters fully disclosed to Lender which are curable and are being cured as part of the work comprising the Required Improvements, and subject to Borrower’s right to  contest in accordance with Section 5.1.2(b) of the Loan Agreement, the Property complies in all  material respects with all Legal Requirements.  18. (i) Other than matters being cured as part of the work comprising the Required Improvements, the Property complies in all material respects with all Legal Requirements, (ii) if  

 

any Restoration is continuing, Borrower is diligently pursuing such Restoration and Lender has  determined that the non-completion of such Restoration prior to the making of the Additional  Advance is not reasonably likely to have a Material Adverse Effect, and (iii) no Casualty or  Condemnation has occurred that permits any tenant party to a Lease a termination right (or such  right shall have been waived or lapsed).  19. On the Advance Date, no event has occurred that would reasonably be expected to result in Borrower being unable to achieve any Major Milestone within the time period applicable  to such Major Milestone, as determined by Lender.  20. Borrower has caused, at Lender’s election, either (i) payment and performance Bonds, in form and substance reasonably satisfactory to Lender and issued by sureties satisfactory  to Lender have been maintained with respect to the obligations of each Trade Contractor; and/or  (ii) a sub-guard insurance policy in form and substance reasonably acceptable to Lender has been maintained with respect to the obligations of each Trade Contractor, provided, that the Bonds are in an amount not less than the full contract price for each such Trade Contract required to be bonded pursuant to Section 2.1.6(v) of the Loan Agreement. 21. Borrower has provided satisfactory evidence that the Closing Date Minimum Equity Requirement is satisfied and no distributions have been made.  22. The Master Lease is in full force and effect and no default has occurred under the Master Lease that remains uncured.   [The below items should be included for Additional Advances for the Payment of Approved Project  Expenditures.]  23. Borrower has delivered to Lender an Officer’s Certificate with respect to any construction work constituting the applicable Approved Project Expenditures to be funded by such  Additional Advance certifying that whatever portion of such work has been Completed to date has  been Completed in good and workmanlike manner substantially in accordance with all applicable  Legal Requirements and the Plans and Specifications.  24. Borrower has delivered (or has caused to be delivered) to Lender (i) an updated Construction Budget for the Project, in form and substance reasonably satisfactory to Lender, which  indicates the Costs (other than Interest and Carry Costs) anticipated to complete the Required  Improvements, after giving effect to Costs (other than Interest and Carry Costs) incurred during the  period since the Closing Date, or the date of the last preceding Draw Request, as the case may be,  and (ii) an anticipated costs report in form and substance reasonably acceptable to Lender, which  indicates the Costs (other than Interest and Carry Costs) anticipated to complete the Required  Improvements, after giving effect to Costs incurred during the previous calendar month (or the date  of the last preceding Draw Request, as the case may be), and projected Costs; provided, that, no  Line Item in the Construction Budget with respect to Approved Project Expenditures shall be  eligible for funding from the proceeds of an Additional Advance until 100% of such Line Item has  been bought out and Lender and Construction Consultant have reviewed the related sub contract(s)  and, if applicable, Major Trade Contractor Consent(s).  

 

25. Borrower has delivered to Lender a reconciliation by Borrower and/or Mortgage Borrower of the progress and cost of the construction of the Project through the date of the Draw  Request with the Construction Schedule and the Construction Budget, together with a projection  of such progress and costs through to Completion of the Project.   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 

MORTGAGE BORROWER:  COMPLEX THERAPEUTICS LLC,  a Delaware limited liability company  By: ____________________________  Name:  Title:  

 

MEZZANINE BORROWER:  COMPLEX THERAPEUTICS MEZZANINE LLC,  a Delaware limited liability company  By: ____________________________  Name:  Title: 

 

    EXHIBIT F    INTENTIONALLY OMITTED      

 

EXHIBIT G  INTENTIONALLY OMITTED  

 

EXHIBIT H  INTENTIONALLY OMITTED  

 

    EXHIBIT I    INTENTIONALLY OMITTED      

 

      EXHIBIT J    INTENTIONALLY OMITTED      

 

    EXHIBIT K-1  FORM OF U.S. TAX COMPLIANCE CERTIFICATE  (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)]    Reference is hereby made to the Mezzanine Loan Agreement dated as of [    ], 2022 (as  amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), by and  between [_____________], a [_____________] (together with its successors and assigns, “Lender”), and  Complex Therapeutics Mezzanine LLC, a Delaware limited liability company (“Borrower”), and each  lender from time to time party thereto.  Pursuant to the provisions of Section 2.2.3 of the Loan Agreement, the undersigned  hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s)  evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a “bank” within  the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a “ten percent shareholder” of the  Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign  corporation” related to Borrower as described in Section 881(c)(3)(C) of the Code.  The undersigned has furnished Borrower with a certificate of its non-U.S. Person status  on IRS Form W-8BEN or IRS Form W-8BEN-E.  By executing this certificate, the undersigned agrees  that (1) if the information provided in this certificate changes, the undersigned shall promptly so inform  Borrower, and (2) the undersigned shall have at all times furnished Borrower with a properly completed  and currently effective certificate in either the calendar year in which each payment is to be made to the  undersigned, or in either of the two calendar years preceding such payments.  Unless otherwise defined herein, terms defined in the Loan Agreement and used herein  shall have the meanings given to them in the Loan Agreement.  [NAME OF LENDER]    By:_________________________________  Name:  Title:  Date:  ________ __, 20[  ]    

 

    EXHIBIT K-2  FORM OF U.S. TAX COMPLIANCE CERTIFICATE  (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)]    Reference is hereby made to the Mezzanine Loan Agreement dated as of [    ], 2022 (as  amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), by and  between [_____________], a [_____________] (together with its successors and assigns, “Lender”), and  Complex Therapeutics Mezzanine LLC, a Delaware limited liability company (“Borrower”)and each  lender from time to time party thereto.  Pursuant to the provisions of Section 2.2.3 of the Loan Agreement, the undersigned  hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it  is providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code,  (iii) it is not a “ten percent shareholder” of Borrower within the meaning of Section 871(h)(3)(B) of the  Code and (iv) it is not a “controlled foreign corporation” related to Borrower as described in  Section 881(c)(3)(C) of the Code.  The undersigned has furnished its participating Lender with a certificate of its non- U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E.  By executing this certificate, the  undersigned agrees that (1) if the information provided in this certificate changes, the undersigned shall  promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such  Lender with a properly completed and currently effective certificate in either the calendar year in which  each payment is to be made to the undersigned, or in either of the two calendar years preceding such  payments.  Unless otherwise defined herein, terms defined in the Loan Agreement and used herein  shall have the meanings given to them in the Loan Agreement.  [NAME OF PARTICIPANT]    By:_________________________________  Name:  Title:  Date:  ________ __, 20[  ]  

 

    EXHIBIT K-3  FORM OF U.S. TAX COMPLIANCE CERTIFICATE  (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)]    Reference is hereby made to the Mezzanine Loan Agreement dated as of [    ], 2022 (as  amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), by and  between [_____________], a [_____________] (together with its successors and assigns, “Lender”), and  Complex Therapeutics Mezzanine LLC, a Delaware limited liability company (“Borrower”), and each  lender from time to time party thereto.  Pursuant to the provisions of Section 2.2.3 of the Loan Agreement, the undersigned  hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing  this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such  participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect  partners/members is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary  course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its  direct or indirect partners/members is a “ten percent shareholder” of Borrower within the meaning of  Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a “controlled  foreign corporation” related to Borrower as described in Section 881(c)(3)(C) of the Code.  The undersigned has furnished its participating Lender with IRS Form W-8IMY  accompanied by one of the following forms from each of its partners/members that is claiming the  portfolio interest exemption:  (i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W- 8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such  partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this  certificate, the undersigned agrees that (1) if the information provided in this certificate changes, the  undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times  furnished such Lender with a properly completed and currently effective certificate in either the calendar  year in which each payment is to be made to the undersigned, or in either of the two calendar years  preceding such payments.  Unless otherwise defined herein, terms defined in the Loan Agreement and used herein  shall have the meanings given to them in the Loan Agreement.  [NAME OF PARTICIPANT]    By:_________________________________  Name:  Title:  Date:  ________ __, 20[  ]    

 

    EXHIBIT K-4  FORM OF U.S. TAX COMPLIANCE CERTIFICATE  (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)]    Reference is hereby made to the Mezzanine Loan Agreement dated as of [    ], 2022 (as  amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), by and  between [_____________], a [_____________] (together with its successors and assigns, “Lender”), and  Complex Therapeutics Mezzanine LLC, a Delaware limited liability company (“Borrower”), and each  lender from time to time party thereto.  Pursuant to the provisions of Section 2.2.3 of the Loan Agreement, the undersigned  hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such  Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are  the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with  respect to the extension of credit pursuant to this Loan Agreement or any other Loan Document, neither  the undersigned nor any of its direct or indirect partners/members is a “bank” extending credit pursuant to  a loan agreement entered into in the ordinary course of its trade or business within the meaning of  Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a “ten percent  shareholder” of Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its  direct or indirect partners/members is a “controlled foreign corporation” related to Borrower as described  in Section 881(c)(3)(C) of the Code.  The undersigned has furnished the Lender and Borrower with IRS Form W-8IMY  accompanied by one of the following forms from each of its partners/members that is claiming the  portfolio interest exemption:  (i) an IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W- 8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such  partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this  certificate, the undersigned agrees that (1) if the information provided in this certificate changes, the  undersigned shall promptly so inform Borrower, and (2) the undersigned shall have at all times furnished  Borrower with a properly completed and currently effective certificate in either the calendar year in which  each payment is to be made to the undersigned, or in either of the two calendar years preceding such  payments.  Unless otherwise defined herein, terms defined in the Loan Agreement and used herein  shall have the meanings given to them in the Loan Agreement.  [NAME OF LENDER]    By:_________________________________  Name:  Title:  Date:  ________ __, 20[  ]     

 

EXHIBIT L  INITIAL CONSTRUCTION BUDGET  [***]  

 

EXHIBIT M  INITIAL CONSTRUCTION SCHEDULE  [***]  

 

SCHEDULE I  EXISTING CONSTRUCTION DOCUMENTS  [***]  

 

SCHEDULE II  ORGANIZATIONAL STRUCTURE  [ATTACHED]  

 

ORGANIZATIONAL CHART Instil Bio, Inc. (Delaware C corporation) Complex Therapeutics LLC (Delaware limited liability company) 100% Ownership 100% Ownership Complex Therapeutics Mezzanine LLC (a Delaware limited liability company) Borrower* Guarantor Mezzanine  Borrower 18408-18412 Oxnard Street, Los Angeles, California 91356 *To Borrower's knowledge based on the public reporting made as of March 31, 2022, no individual or entity owns, directly or indirectly, more than 10% of the Borrower other than FMR LLC and Curative Ventures V LLC. 

 

SCHEDULE III  LIST OF MATERIAL AGREEMENTS  [ATTACHED]  

 

Schedule III - List of Material Agreements None, service contracts will stay with Instil Bio, Inc. per matrix.  

 

SCHEDULE IV  LIST OF DESIGN PROFESSIONALS  [***]  

 

SCHEDULE V  CONSTRUCTION PERMITS  [ATTACHED]  

 

Schedule V - Construction Permits Clinical Building Permits  Permit # Brief  Description  Address Date  Issued on  Amount Licensed  Contractor  Description  21016 - 10000 - 06831 Bldg- Alter/Repair  18412 W  Oxnard St  4/21/2021 $1,222.31 TURNER  CONSTRUCTION  COMPANY  eplan Modify the existing slab.  20042 - 10000 - 21651 Plumbing 18412 W  Oxnard St  5/6/2021 $1,524.31 MUIR-CHASE  PLUMBING CO  INC  PLUMBING TI. INCLUDES  POTABLE WATER AND  WASTE/VENT. 3"  WATER METER WITH BACKFLOW  DEVICE AND PRV  20016 - 10000 - 28026 Bldg- Alter/Repair  18412 -  18424 W  Oxnard St  5/7/2021 $9,995.41 TURNER  CONSTRUCTION  COMPANY  T.I. TO EXISTING OFFICE AND  MANUFACTURING FACILITY.  REMOVE EXISTING RATED  CORRIDOR TO CONNECT TO  ADJACENT BUILDING. CHANGE  THE EXISTING BUILDING  CONSTRUCTION TYPE FROM V-B  TO III-B. REWORK EXTERIOR  STAIRS, NEW STAIR TO ROOF  AND NEW 20020 - 10001 - 02289 Nonbldg- New  18412 W  Oxnard St  5/7/2021 $1,392.96 TURNER  CONSTRUCTION  COMPANY  EARLY START SITE PREPARATION  WORK FOR " RESTRIPE PARKING  LOT,  NEW ACCESSIBLE RAMP AND  NEW EQUIPMENT CONCRETE  PAD"  20030 - 10000 - 06263 Grading 18412 W  Oxnard St  5/7/2021 $769.16 TURNER  CONSTRUCTION  COMPANY  GRADING FOR PARKING LOT. 75  CU YD CUT 250 CU YD FILL 175  NET CU  YD IMPORT  20041 - 10000 - 39638 Electrical 18412 W  Oxnard St B2  5/12/2021 $5,060.87 ROSENDIN  ELECTRIC INC  FULL PC TO A TI FULL PC TO A TI  TO COMMERCIAL PROPERTY  BUILDINGS 1 AND 2.  21041 - 10000 - 05696 Electrical 18424 W  Oxnard St B1  5/12/2021 $2,097.16 ROSENDIN  ELECTRIC INC  FULL PC TO A TI TO  COMMERCIAL PROPERTY  BUILDINGS 1 AND  2.  20044 - 10000 - 11181 HVAC 18412 W  Oxnard St  6/9/2021 $3,006.88 CONTROL AIR  ENTERPRISES LLC  HVAC TENANT IMPROVEMENT.  21042 - 20000 - 16025 Plumbing 18412 W  Oxnard St  BLDG 1, 2  9/1/2021 $357.52 MUIR-CHASE  PLUMBING CO  INC  Installation of low-pressure gas  system.  

 

Commercial Building Permits  Permit # Brief  Description  Address Date  Issued on  Amount Licensed  Contractor  Description  21042 - 20000 - 05846 Plumbing 18408 W  Oxnard St  3/24/2021 $59.95 TURNER  CONSTRUCTION  COMPANY  SEWER CAP PERMIT FOR  DEMOLITION OF BUILDING NO. 2  21307  SQFT OPEN  OFFICES/STAGE/PRODUCTION  UNDER PERMIT  21019-10000-00275  21042 - 20000 - 05847 Plumbing 18360 -  18364 W  Oxnard St  3/24/2021 $59.95 TURNER  CONSTRUCTION  COMPANY  SEWER CAP PERMIT FOR  DEMOLITION OF BUILDING NO. 2  21307  SQFT OPEN  OFFICES/STAGE/PRODUCTION  UNDER PERMIT  21019-10000-00270  21019 - 10000 - 00270 Bldg- Demolition  18360 -  18364 W  Oxnard St  4/13/2021 $1,791.74 TURNER  CONSTRUCTION  COMPANY  DEMOLITION OF OFFICE BUILDING,  CLEAR LOT, FENCE AND CANOPY  REQUIRED  21019 - 10000 - 00275 Bldg- Demolition  18408 W  Oxnard St  4/13/2021 $1,791.74 TURNER  CONSTRUCTION  COMPANY  DEMO (E) OFFICE BUILDING, CLEAR  LOT, FENCE AND CANOPY REQUIRED  21030 - 10000 - 02055 Grading 18412 W  Oxnard St  8/17/2021 $3,465.66 TURNER  CONSTRUCTION  COMPANY  ROUGH GRADING FOR A NEW  COMERCIAL MANUFACTURING  BUILDING  FOR CELL-THERAPY PRODUCTS-  21041 - 10000 - 21468 Electrical 18412 W  Oxnard St  9/1/2021 $19,779.14 TURNER  CONSTRUCTION  COMPANY  (EPLAN) FULL PLAN CHECK FOR  ELECTRICAL SYSTEM FOR NEW  CONSTRUCTION UNDER BUILDING  PERMIT 21010-10000-00719.  21044 - 20000 - 06428 HVAC 18412 W  Oxnard St  9/13/2021 $6,233.71 CONTROL AIR  ENTERPRISES LLC  MECHANICAL SYSTEM FOR NEW  COMMERCIAL MANUFACTURING  BUILDING FOR CELL-THERAPY  PRODUCTS.  21010 - 10000 - 00719 Bldg- Alter/Repair  18412 -  18424 W  Oxnard St  10/6/2021 $105,273.73 TURNER  CONSTRUCTION  COMPANY  FOUNDATION ONLY PERMIT FOR A  NEW COMERCIAL MANUFACTURING  BUILDING  21020 - 10000 - 01633 Nonbldg- New  18412 -  18424 W  Oxnard St  11/2/2021 $2,100.07 TURNER  CONSTRUCTION  COMPANY  SITE RETAINING WALLS , SLOPED  S.O.G., AND RAISED PLANTER  WALLS.  21010 - 10000 - 00719 Bldg-New 18408 W  Oxnard St  12/1/2021 $540,342.54 TURNER  CONSTRUCTION  COMPANY  NEW COMMERCIAL  MANUFACTURING BUILDING  21042 - 20000 - 10871 Plumbing 18412 W  Oxnard St  12/14/2021 $5,752.48 CONTROL AIR  ENTERPRISES LLC  PLUMBING SYSTEM PLAN CHECK  FOR POTABLE WATER, WASTE  & VENT , STORM DRAIN. 4'' water  meter, 4'' RPBP, two PRV.  21010 - 10000 - 00719 Bldg- Alter/Repair  18412 -  18424 W  Oxnard St  2/7/2022 $310.41 WALTERS &  WOLF GLASS  COMPANY  SUPPLEMENTAL TO PERMIT #  21010-10000-00719 DEFERRED  SUBMITTAL  FOR GLASS CURTAIN WALLS.  21010 - 10003 - 00719 Bldg- Alter/Repair  18408 W  Oxnard St  2/7/2022 $310.41 WALTERS &  WOLF GLASS  COMPANY  SUPPLEMENTAL TO PERMIT #  21010-10000-00719 DEFERRED  SUBMITTAL  FOR GLASS CURTAIN WALLS.  

 

Permit # Brief  Description  Address Date  Issued on  Amount Licensed  Contractor  Description  21042 - 20001 - 10871 Plumbing 18412 W  Oxnard St  2/16/2022 $148.24 CONTROL AIR  ENTERPRISES LLC  medium pressure gas system 5 psi.  Partial permit fees paid under  original  plan check.  21044 - 20002 - 06428 HVAC 18412 W  Oxnard St  3/31/2022 $227.81 CONTROL AIR  ENTERPRISES LLC  SUPPLEMENTAL TO PERMIT 21044- 20000-06428. Revision to  approved plans.  22041 - 90000 - 16334 Electrical,  Special  Equipment  18408 W  Oxnard St  4/13/2022 $274.46 TAFT ELECTRIC  COMPANY  Grounding for Temporary Generator  - Anning Johnson  22041 - 90000 - 16335 Electrical,  Special  Equipment  18408 W  Oxnard St  4/13/2022 $274.46 TAFT ELECTRIC  COMPANY  Grounding for temporary generator  #3 used by the flooring contractor  22041 - 90000 - 16336 Electrical,  Public  Safety Only  18408 W  Oxnard St  4/13/2022 $575.41 TAFT ELECTRIC  COMPANY  Install fire alarm and security  devices in walls and ceiling. primary  permit to follow  

 

SCHEDULE VI  LIST OF REAs   None. 

 

SCHEDULE VII  EXCEPTION TO PHYSICAL CONDITION REPRESENTATION  [ATTACHED]  

 

SCHEDULE 4.1.2(j)  On June 1, 2022, the General Contractor informed Borrower that the General Contractor observed some  surface settlement at the manhole cover (see below picture) directly above the landscape irrigation cisterns,  which are located underneath the outer portion of the north-west parking lot of the Building B (see below  site plan).  As of the date hereof, the General Contractor is investigating the cause of the settlement, and  has notified its insurance company of a potential claim.  As of the date hereof, the General Contractor  estimates repairs will cost between approximately $50,000 and $200,000, and take three to four weeks to  complete, depending on the cause of the surface settlement.EX-10.1

  EXHIBIT 10.1

   

  EMPLOYMENT AGREEMENT

  This Employment Agreement (this “Agreement”) is entered into on August 8, 2022 between KEN MCGRATH (“Employee”) and ORASURE TECHNOLOGIES, INC. (“OraSure” or the “Company”).

  WHEREAS, the parties wish to set forth the terms of their relationship and to enter into this Agreement and a confidentiality agreement of even date herewith (the “Confidentiality Agreement”).

  NOW, THEREFORE, in consideration of the mutual promises made herein, intending to be legally bound, the parties hereby agree as follows:

  1.	Services.

  1.1	Employment.  Subject to the terms hereof, the Company agrees to employ Employee as its Chief Financial Officer (the “Position”) and Employee hereby accepts such employment in accordance with the terms and conditions of this Agreement.  Employee shall begin his employment with the Company on August 8, 2022 or such other date agreed between the parties (the “Effective Date”).

  1.2	Direction and Duties.  Employee shall report to, and discharge his duties under the supervision and direction of, the Chief Executive Officer of OraSure (the “CEO”).  Upon the Effective Date, Employee shall have such powers and duties that are commensurate with the Position, as well as such other duties as are assigned to him from time to time by the Supervisor.  Employee’s primary place of work shall be the Company’s headquarters, at its present location in Bethlehem, Pennsylvania.

  1.3	Outside Activities.  Employee shall obtain the consent of the Supervisor before he engages, either directly or indirectly, in any other professional or business activities, except for (a) service as a non-employee director on a board as approved by the CEO; (b) reasonable time devoted to volunteer services for or on behalf of religious, educational, non-profit and/or other charitable organizations; and (c) reasonable time devoted to activities in professional societies or industry associations.  Notwithstanding the foregoing, Employee may engage in the outside activities described in clauses (a) – (c) above only to the extent that such activities do not violate the Confidentiality Agreement or otherwise conflict with Employee’s obligations and duties to the Company.

  2.	Term.  The term of this Agreement shall begin as of the Effective Date and shall continue until Employee’s employment ceases in accordance with Section 6 below (the “Term”).

  3.	Compensation and Expenses.

  3.1	Salary.  As compensation for services under this Agreement, the Company shall pay to Employee a base salary of $475,000 per annum.  Such salary will be subject to review by the Board of Directors of OraSure (the “Board of Directors”) or its compensation committee (the “Compensation Committee”) on an annual basis and may be increased from time to time in the discretion of the Board of Directors or the Compensation Committee.  Any reduction shall be subject to the provisions of Good Reason (as defined below) and Section 6 below.  Payment shall be made in accordance with the Company’s normal payroll practices as in effect from time to time, less all amounts required by law or authorized by Employee to be withheld or deducted.  For all purposes under this Agreement, the term “salary” shall mean the regular annual base salary of Employee payable under this Section 3.1, as increased.

  

  3.2	Bonus.  In addition to the salary described in Section 3.1 above, Employee shall be entitled to participate in the incentive plan established by OraSure each year for the payment of cash bonuses to senior executive officers of OraSure and its subsidiaries (each, a “Bonus Plan”), on such terms as may be approved by the Board of Directors or the Compensation Committee in its discretion.  With respect to each Bonus Plan, Employee shall have a target bonus opportunity as determined by the Board of Directors or Compensation Committee, but that is at least equal to 50% of Employee’s salary, and (b) any earned bonus will be paid not later than March 15th of the year following the year to which such bonus relates.  Employee’s 2022 annual cash bonus opportunity will not be pro-rated to reflect the commencement of Employee’s service after the start of 2022.

  3.3	Long-Term Incentive Awards.

  3.3.1	With respect to 2022 and subsequent calendar years, Employee shall be eligible to participate in the Long-Term Incentive Policy or comparable long-term incentive equity policy or plan that may from time to time be adopted by the Board of Directors or the Compensation Committee, in its discretion (an “LTIP”).

  3.3.2	All equity awards granted to Employee on or after the Effective Date (including the Make Whole Award described in Section 4) will be subject to accelerated vesting to the extent set forth below:

  (a)	in the event Employee’s service terminates due to his death or Disability (as defined in Section 6.1): (i) 50% of any outstanding and otherwise unvested time-based awards will then vest, and (ii) 50% of any outstanding performance-based awards subject to an open performance period will then vest at the target performance level;

  (b)	subject to the release requirement described in Section 6.7.2, in the event of Employee’s resignation for Good Reason or termination without Cause other than during the Change of Control Period (as those terms are defined in Section 6): (i) 50% of any outstanding and otherwise unvested time-based awards will then vest, and (ii) 50% of any outstanding performance-based awards subject to an open performance period will remain outstanding and vest (or be forfeited) based on actual performance through the end of the applicable performance period; and

  (c)	subject to the release requirement described in Section 6.7.2, in the event of Employee’s resignation for Good Reason or termination without Cause during the Change of Control Period: (i) all outstanding and otherwise unvested time-based awards will then vest, and (ii) all outstanding performance-based awards subject to an open performance period will remain outstanding and vest (or be forfeited) based on actual performance through the end of the applicable performance period (but at not less than the target performance level, where such resignation or termination occurs both during the Change of Control Period and upon or following the Change of Control).

  3.4	Employee Benefits.  Employee shall be entitled to receive or participate in any additional benefits, including without limitation medical and dental insurance programs, qualified and non-qualified profit sharing or pension plans, disability plans, medical reimbursement plans, and life insurance programs, which may from time to time be made available by the Company to other senior executive officers of the Company.  The Company may change or discontinue such benefits at any time in its sole discretion; provided that the benefits provided to Employee shall be determined in the same manner as the benefits provided to other similarly situated senior executive officers of the Company under such plans with respect to the same time period.

  

  3.5	Expenses.  The Company shall reimburse Employee for all reasonable and necessary expenses incurred in carrying out his duties under this Agreement, subject to compliance with the Company’s policies relating to expense reimbursement.  Expenses subject to reimbursement under this Section 3.5.3 shall include, but not be limited to, the cost of business-related travel, lodging and meals and the fees and expenses incurred by Employee to maintain his membership in relevant professional associations.

  3.6	Fees.  From and after the Effective Date, all compensation earned by Employee, other than pursuant to this Agreement, as a result of services performed on behalf of the Company or as a result of or arising out of any work done by Employee in any way related to the scientific or business activities of the Company shall belong to the Company.  Employee shall pay or deliver such compensation to the Company promptly upon receipt.  For the purposes of this provision, “compensation” shall include, but is not limited to, all professional and nonprofessional fees, lecture fees, expert testimony fees, publishing fees, royalties, and any related income, earnings, or other things of value; and “scientific or business activities of the Company” shall include, but not be limited to, any project or projects in which the Company is involved and any subject matter that is directly or indirectly researched, tested, developed, promoted, or marketed by the Company.

  4.	Make Whole Award.  Upon or within 30 days following the Effective Date, as an inducement for Employee to enter into this Agreement and accept employment with the Company, Employee will be granted a restricted stock (or restricted stock unit) award with respect to a number of shares of the Company’s common stock determined by dividing $400,000 by the average closing price of the Company’s common stock for the twenty (20) trading days immediately preceding the grant date (the “Make Whole Award”).  The Make Whole Award will vest in three equal annual installments, on the first three anniversaries of the Effective Date, subject in each case to the continued service of Employee through the applicable vesting date.

  5.	Confidentiality Agreement.  Employee’s execution and compliance with the terms of the Confidentiality Agreement is a material requirement of this Agreement.  Nothing in this Agreement or the Confidentiality Agreement shall prohibit the Employee from reporting possible violations of law or a regulation to any governmental agency or entity or self-regulatory organization or making disclosures that are protected under law, including the whistleblower provisions of U.S. federal law or regulation; and (ii) in accordance with the U.S. Defend Trade Secrets Act of 2016, Employee shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that:  (A) is made (i) in confidence to a U.S. federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

  6.	Termination.

  6.1	Termination Upon Death or Disability.  Employee’s employment under this Agreement shall terminate immediately upon Employee’s death or Disability.  The term “Disability” means Employee is (a) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (b) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company.

  

  6.2	Termination by Employee Without Good Reason. Employee may terminate his employment under this Agreement without Good Reason (as defined below) upon thirty (30) days’ written notice to the Company.

  6.3	Termination by the Company for Cause. Employee’s employment under this Agreement may be terminated by the Company at any time for Cause.  Only the following actions, failures, or events by or affecting Employee shall constitute “Cause” for termination of Employee by the Company:  (i) willful and continued failure by Employee to substantially perform his duties provided herein after a written demand for substantial performance is delivered to Employee by the Supervisor, which demand identifies with reasonable specificity the manner in which Employee has not substantially performed his duties, and Employee’s failure to comply with such demand within a reasonable time, which shall not be less than thirty (30) days after Employee’s receipt of such demand; (ii) the engaging by Employee gross negligence materially injurious to the Company or gross misconduct, which if capable of being cured, is not cured within thirty (30) days of written notice thereof from the Supervisor to Employee; (iii) a material breach by Employee of this Agreement, the Confidentiality Agreement or any other agreement between Employee and the Company or any of its affiliates, which if capable of being cured, is not cured within thirty (30) days of written notice thereof from the Supervisor to Employee; or (iv) the commission of any willful act that is materially detrimental to the best interests of the Company, which if capable of being cured, is not cured within thirty (30) days of written notice thereof from the Supervisor to Employee; or (v) Employee’s conviction of having committed a felony.  No action or failure to act on Employee’s part will be considered “willful” unless it is done without the good faith reasonable belief that such action was in the best interests of the Company, or if it is done upon the advice of Company counsel.

  6.4	Termination by Employee With Good Reason.  Employee may terminate his employment under this Agreement for Good Reason; provided that (i) Employee gives written notice to the Board of Directors within sixty (60) days of the event constituting Good Reason; (ii) the Company has not cured the event giving rise to such notice within thirty (30) days of receipt of Employee’s notice; and (iii) Employee resigns his employment within thirty (30) days following the expiration of such cure period.  The term “Good Reason” shall mean any of the following actions that are taken without Employee’s prior written consent: (a) a diminution in Employee’s base salary or target bonus opportunity, (b) a material diminution in Employee’s authority, duties or responsibilities as Chief Financial Officer; (c) a relocation of Employee’s principal worksite by more than thirty (30) miles, unless the new worksite is equidistant or closer to Employee’s primary residence than the former worksite; or (d) any other material breach of this Agreement by the Company (or its successor).

  6.5	Termination by the Company Without Cause.  The Company may terminate Employee’s employment under this Agreement without Cause at any time.

  6.6	Definitions.  For purposes of this Agreement, the term “Change of Control Period” shall mean the period which begins sixty (60) days prior to the consummation of a Change of Control and ends eighteen (18) months thereafter.  For purposes of this Agreement, the term “Change of Control” shall mean a change of control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A pursuant to the U.S. Securities Exchange Act of 1934 (the “Exchange Act”); provided, however, that a change of control shall only be deemed to have occurred at such time as (i) any person, or more than one person acting as a group within the meaning of Section 409A of the Internal Revenue Code (the “Code”) and the regulations issued thereunder, acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company; (ii) any person, or more than one person acting as a group within the meaning of Code Section 409A and the regulations issued thereunder, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition) ownership of stock of the Company possessing thirty percent (30%) or more of the total 

  

  voting power of the Company’s stock; (iii) a majority of the members of the Board of Directors is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors before the date of the appointment or election; or (iv) a person, or more than one person acting as a group within the meaning of Code Section 409A and the regulations issued thereunder, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition) assets from the Company that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all the assets of the Company immediately before such acquisition or acquisitions.

  6.7	Compensation Upon Termination.

  6.7.1	Termination Upon Death or Disability, by Employee (Other Than for Good Reason) or for Cause.  In the event of a termination of Employee’s employment under Sections 6.1, 6.2 or 6.3, all salary and benefits shall cease on the date of termination, subject to the terms of any benefit plans then in force and applicable to Employee, and the Company shall have no further liability or obligation hereunder by reason of such termination, save and except as stated herein.  In the event of a termination of Employee’s employment under Sections 6.1, 6.2 or 6.3, Employee or his estate, as applicable, shall be paid all salary earned under Section 3.1 through the date of termination on the next regularly scheduled payroll date following the termination date (“Accrued Salary”).  With respect to terminations under Sections 6.1 only, Employee or his estate, as applicable, shall receive any annual bonus that has been otherwise earned but not yet paid with respect to a year ending prior to the date of termination, payable at the time that cash bonuses are or would otherwise be payable to other officers of the Company in respect of such year.  In addition, in the event of a termination under Sections 6.1 that occurs after June 30 in any given year, Employee or his estate, as applicable, shall receive a prorated portion of his target annual cash bonus (subject to adjustment for bonus pool funding as determined by the Board of Directors or Compensation Committee) for the calendar year in which termination occurs (calculated based on the number of days in the calendar year that have passed prior to Employee’s termination), payable at the time that cash bonuses are or would otherwise be payable to other officers of the Company in respect of such year (the “Prorated Bonus”).  For greater certainty, in the event a termination under Sections 6.1 occurs on or before June 30 in any given year, Employee or his estate, as applicable, shall not receive a Prorated Bonus.

  6.7.2	Termination Without Cause or Upon Good Reason.  In the event of a termination of Employee’s employment under Sections 6.4 or 6.5 of this Agreement, the following shall occur: 

  (i)	Employee shall receive the Accrued Salary;

  (ii)	Employee shall receive any pro-rated annual bonus that has been otherwise earned but not yet paid with respect to a year ending prior to the year of the termination;

  (iii)	Employee shall receive: (A) if such termination does not occur during a Change of Control Period, a lump sum cash payment equivalent to 12 months of Employee’s annual base salary; or (B) if such termination occurs during a Change of Control Period, a lump sum payment equivalent to 24 months of the Employee’s annual base salary;

  (iv)	Employee shall receive an additional lump sum cash payment equal to Employee’s target bonus amount for the calendar year in which such termination occurs;

  (v)	if Employee validly elects to receive continuation coverage under OraSure’s group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall reimburse Employee each month for the applicable premium otherwise 

  

  payable for COBRA continuation coverage for a period equal to the shorter of (x) 12 months (or 18 months, if such termination is during a Change of Control Period) after the date of termination; or (y) the date Employee is no longer eligible for COBRA, but only with respect to the portion of such premium that exceeds the monthly amount charged to active employees of the Company for the same coverage; and

  (vi)	Employee shall receive accelerated equity vesting as described in Section 3.3.2 herein.

  The amounts payable under clauses (ii) through (vi) are collectively referred to as “severance.”  For clarity and the avoidance of doubt, in the case of a resignation for the Good Reason described in Section 6.4(a) (reduction in base salary or target bonus opportunity), references herein to Employee’s “annual base salary” and “target bonus” in clauses (iii) and (iv) above shall refer to such amounts immediately before the reduction giving rise to such Good Reason.  Subject to Section 6.8, all severance payments under clauses (ii) through (v) will be made (or commence) under this Section 6.7.2 on the 60th day after termination of employment hereunder.  As a condition to receipt of severance under this Section 6.7.2, within forty-five (45) days following termination of Employee’s employment, Employee shall sign, deliver and not revoke a general release of claims against the Company and its affiliates in a form prescribed by the Company.  The severance shall be in lieu of and not in addition to any other severance arrangement maintained by the Company, and to the extent consistent with Section 409A, shall be offset by any monies Employee may owe to the Company.  The Company’s obligation to pay the severence shall terminate if, during the period commencing on termination of employment and continuing until all severance payments have been made by the Company, Employee fails to comply with Sections 9, 13 or 19 of this Agreement or with the Confidentiality Agreement.

  6.7.3	Parachute Payment.  In the event that (i) Employee becomes entitled to any payments or benefits hereunder or otherwise from the Company or any of its affiliates which constitute a “parachute payment” as defined in Code Section 280G (the “Total Payments”) and (ii) Employee is subject to an excise tax imposed under Code Section 4999 (the “Excise Tax”), then, if it would be economically advantageous for Employee, the Total Payments shall be reduced by an amount (including zero) that results in the receipt by Employee on an after tax basis (including the applicable U.S. federal, state and local income taxes, and the Excise Tax) of the greatest Total Payments, notwithstanding that some or all of the portion of the Total Payments may be subject to the Excise Tax (it being understood that if Employee’s aggregate after tax benefit hereunder would be greater with the imposition of the Excise Tax and without such reduction, then no such reduction in Total Payments hereunder shall occur).  If a reduction in Total Payments is required pursuant to the preceding sentence, the reduction will occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Employee.  If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).  Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Total Payments being subject to taxes pursuant to Code Section 409A (as defined below) that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, will be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows:  (A) as a first priority, the modification will preserve to the greatest extent possible, the greatest economic benefit for Employee as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without Cause), will be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A will be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.  All calculations hereunder shall be performed by a nationally recognized independent accounting firm selected by the Company, who shall also determine the value of any services to be rendered by Employee in connection with any non-competition or other restrictive covenant in order to mitigate any potential impact of Sections 280G/4999 on the Company and 

  

  Employee, with the full cost of such firm being borne by the Company.  Any determinations made by such firm shall be final and binding on Employee and the Company.  

   

  6.8	Section 409A.  This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”) (to the extent applicable) and the parties hereto agree to interpret, apply and administer this Agreement in the least restrictive manner necessary to comply therewith and without resulting in any increase in the amounts owed hereunder by the Company.  To the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Code Section 409A to payments due to Employee upon or following his separation from service, then notwithstanding any other provision of this Agreement (or any otherwise applicable plan, policy, agreement or arrangement), any such payments that are otherwise due within six months following Employee’s separation from service will be deferred without interest and paid to Employee in a lump sum immediately following that six month period.  For purposes of the application of Code Section 409A, each payment in a series of payments will be deemed a separate payment.  Notwithstanding anything herein to the contrary, except to the extent any expense, reimbursement or in-kind benefit provided to the Employee does not constitute “nonqualified deferred compensation” within the meaning of Code Section 409A, and its implementing regulations and guidance, (i) the amount of expenses eligible for reimbursement or in-kind benefits provided to the Employee during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to the Employee in any other calendar year, (ii) the reimbursements for expenses for which the Employee is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred and (iii) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

  7.	Indemnification.  The Company agrees that if Employee is made a party (or is threatened to be made a party to) any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of his service (including past service) as an officer, director, employee, agent, or the like of the Company, or by reason of his service at the request of the Company as an officer, director, employee, agent, or the like of another entity, including, without limitation, as a fiduciary of an employee benefit plan sponsored or established by the Company (any such service for a subsidiary, affiliate, joint venture or other entity in which the Company has an ownership or other financial interest, or as a fiduciary of any employee benefit plan sponsored by the Company or any such other entity, shall be presumed to be at the request of the Company), then Employee shall be indemnified and held harmless by the Company to the fullest extent authorized by applicable law (including advancements for all reasonable attorneys’ fees and costs incurred by Employee, subject to any repayment undertakings required by Delaware law), and such indemnification shall continue even if Employee has ceased to be a director, officer, employee, agent, or the like of the Company for any reason.

  8.	Insurance.  During the Term and for a period of six (6) years thereafter (regardless of the reason for the termination of Employee’s employment), the Company shall maintain suitable directors and officers insurance coverage for Employee and shall name Employee as an additional insured under such insurance policies, which policies shall be no less favorable to Employee than such insurance policies that cover OraSure’s officers during such time period.

  9.	Non-Solicitation; Non-Competition.  During his employment with the Company and for eighteen (18) months following the cessation of that employment for any reason, Employee agrees that, unless he obtains written agreement from the Board of Directors, he will not directly or indirectly (including, for avoidance of doubt, either personally or through or on behalf of any other person):

   

  (a)	recruit, solicit, or hire any executive or employee of the Company or its affiliates (collectively, the “Company Group”);

  

   

  (b)	induce or solicit any current or prospective customer, client, or supplier of the Company Group to cease being a customer, client or supplier or divert Company Group business away from any customer, client, or supplier of the Company Group; or

   

  (c)	own, manage, control, work for, or provide services to any entity engaged in (i) the development, manufacture or sale of point of care diagnostic products for infectious disease self-testing, (ii) the collection and/or analysis of molecular samples, or the development, manufacture or sale of products or methods for the collection and/or analysis of molecular samples (but with respect to this clause (ii), only to the extent of the type of molecular samples that are the subject of the Company Group’s products or services (or products or services actively planned by the Company Group during Employee’s employment)), (iii) any other field of research or business in which the Company Group engages during Employee’s employment, or (iv) any other field of research or business which the Company Group is actively planning or preparing to engage in, if such planning or preparation occurs or occurred (at least in part) during Employee’s employment;

   

  provided, however, that this Section 9 shall not prevent Employee from purchasing or owning less than five percent (5%) of the stock or other securities of any entity, provided that such stock or other securities are traded on any national or regional securities exchange or are actively traded in the over-the-counter market and registered under Section 12(g) of the Securities Exchange Act of 1934, as amended.  The parties acknowledge that this Section 9 is intended to replace and supersede the section entitled “Non-Soliciation and Non-Competition” set forth on page 1 of the Confidentiality Agreement executed contemporaneously herewith.  Employee acknowledges that the market for the Company’s products and services is global and that these covenants therefore will be applied worldwide.  Employee further acknowledges that the covenants contained in this section are reasonable and necessary to protect the Company’s legitimate business interests and that damages alone would not be an adequate remedy for any breach of these covenants.  Accordingly, in addition to any other remedies that the Company may have, the Company shall be entitled to injunctive relief for any breach or threatened breach of any these covenants, without the posting of a bond.

   

  10.	Remedies.  The respective rights and duties of the Company and Employee under this Agreement are in addition to, and not in lieu of, those rights and duties afforded to and imposed upon them by law or at equity.

   

  11.	Severability of Provisions.  The provisions of this Agreement are severable, and if any provision hereof is held invalid or unenforceable, it shall be enforced to the maximum extent permissible, and the remaining provisions of the Agreement shall continue in full force and effect.

  12.	Non-Waiver.  Failure by either party at any time to require performance of any provision of this Agreement shall not limit the right of the party failing to require performance to enforce the provision.  No provision of this Agreement may be waived by either party except by a writing signed by that party.  A waiver of any breach of a provision of this Agreement shall be construed narrowly and shall not be deemed to be a waiver of any succeeding breach of that provision or a waiver of that provision itself or of any other provision.

  13.	Non-Disparagement.  Both during and after his employment, Employee agrees not to disparage the Company or its affiliates, or any of their stockholders, directors, officers, employees, products or services.  In addition, Employee agrees not to make any statement or engage in any conduct that could reasonably be expected to affect adversely the business or reputation of the Company, its affiliates or any of their stockholders, directors, officers, employees, products or services.  This paragraph will not restrict or prevent any party from providing truthful testimony as required by court order or other legal process.  In 

  

  addition, this paragraph will not prohibit Employee from reporting possible violations of law or regulation to any governmental agency or entity or self-regulatory organization, or making other disclosures that are protected under the whistleblower provisions of applicable law.

  14.	Other Agreements.  Employee represents, warrants and, where applicable, covenants to the Company that:

  (a)	There are no restrictions, agreements or understandings whatsoever to which Employee is a party which would prevent or make unlawful Employee’s execution of this Agreement or Employee’s employment hereunder, or which is or would be inconsistent or in conflict with this Agreement or Employee’s employment hereunder, or would prevent, limit or impair in any way the performance by Employee of his obligations hereunder;

  (b)	Employee’s execution of this Agreement and Employee’s employment hereunder shall not constitute a breach of any contract, agreement or understanding, oral or written, to which Employee is a party or by which Employee is bound; and

  (c)	Employee is free to execute this Agreement and to be employed by the Company as an employee pursuant to the provisions set forth herein.

  15.	Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the Company and Employee and their respective successors, executors, administrators, heirs and/or permitted assigns; provided, however, that neither Employee nor the Company may make any assignments of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other party, except that, without such consent, the Company may assign this Agreement to any successor to all or substantially all the business or assets of the Company by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise.  The Company will require any successor (whether direct or indirect, by merger, consolidation, transfer of assets, or otherwise) acquiring all or substantially all of the business and/or assets of the Company (whether such assets are held directly or indirectly) to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, in connection with a Change of Control, or otherwise.

  16.	Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or limit Employee’s continuing or further participation in any benefit, bonus, incentive, stock-based or other plan or program provided by the Company and for which Employee may qualify.

  17.	Entire Agreement; Amendments.  This Agreement and the Confidentiality Agreement contain the entire agreement and understanding of the parties hereto relating to the subject matter hereof and thereof, and supersede all prior and contemporaneous discussions, agreements and understandings of every nature relating to the employment of Employee by the Company.  This Agreement may not be changed or modified, except by an agreement in writing signed by each of the parties hereto.

   

  18.	Consent to Suit.  Any legal proceeding arising out of or relating to this Agreement shall be instituted in the United States District Court for the Eastern District of Pennsylvania, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in the county in Pennsylvania in which the Company maintains its principal place of business, and Employee and the Company hereby consent to the personal and exclusive jurisdiction of such court and hereby waive any objection that Employee or the Company may have to personal jurisdiction, venue, and any claim or defense

  

  of inconvenient forum.

   

  19.	Cooperation.  Employee further agrees that during and after his employment with the Company, subject to reimbursement of his reasonable expenses, he will cooperate fully with the Company and its counsel with respect to any matter (including, without limitation, litigation, investigations, or governmental proceedings) in which the Employee was in any way involved during his employment with the Company.  Employee shall render such cooperation in a timely manner on reasonable notice from the Company, so long as the Company, following Employee’s termination of employment, exercises commercially reasonable efforts to schedule and limit its need for Employee’s cooperation under this paragraph so as not to interfere with Employee’s other personal and professional commitments.

   

  20.	Company Policies.  Employee will be subject to and comply with all policies of the Company in effect from time to time, including (without limitation) policies regarding ethics, personal conduct, stock ownership, securities trading, clawback and hedging and pledging of securities.

   

  21.	Withholding. The Company may withhold from any amount payable to Employee such federal, state, local and any other taxes as the Company determines are required to be withheld pursuant to applicable law.

   

  22.	Survival.  The provisions of this Agreement will survive the cessation of Employee’s employment to the extent necessary to give effect to their intended purposes.

   

  23.	Counterparts and Facsimiles.  This Agreement may be executed, including execution by facsimile (including PDF) signature, in one or more counterparts, each of which shall be deemed an original, and all of which together shall be deemed to be one and the same instrument.

   

  24.	Governing Law.  This Agreement shall be governed by, and enforced in accordance with, the laws of the Commonwealth of Pennsylvania without regard to the application of the principles of conflicts of laws.

   

  

  The parties have executed this Employment Agreement on the date first above written.

  		
	EMPLOYEE
 
/s/ Kenneth J. McGrath
Kenneth J. McGrath
	ORASURE TECHNOLOGIES, INC.
 
By:  /s/ Carrie Eglinton Manner
        Carrie Eglinton Manner
 
Title:  President & CEO

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