Document:

exv10w3

 

Exhibit 10.3

GAV Pool — Connecticut

 

GERA DANBURY LLC,

as Borrower

to

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Lender

OPEN-END MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND FIXTURE FILING

 

Dated: June 15, 2007

PREPARED BY AND UPON RECORDATION RETURN TO:

Proskauer Rose llp

1585 Broadway

New York, New York 10036

Attention: David J. Weinberger, Esq.

 

 

 

     THIS OPEN-END MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND FIXTURE FILING (the
“Security Instrument”) is made as of the 15th day of June, 2007, by GERA DANBURY LLC, a
Delaware limited liability company, having its chief executive office at c/o Grubb & Ellis Realty
Advisors, 500 West Monroe, Suite 2800, Chicago, Illinois 60661 (hereinafter referred to as
“Borrower”), to WACHOVIA BANK, NATIONAL ASSOCIATION, having an address at Wachovia Bank,
National Association, Commercial Real Estate Services, 8739 Research Drive URP 4, NC 1075,
Charlotte, North Carolina 28262 (hereinafter referred to as “Lender”).

W I T N E S S E T H:

     WHEREAS, Lender has authorized a loan (hereinafter referred to as the “Loan”) to
Borrower in the maximum principal sum of SEVENTY EIGHT MILLION and NO/100 DOLLARS ($78,000,000.00)
(hereinafter referred to as the “Loan Amount”), which Loan is evidenced by that certain
promissory note, dated the date hereof (together with any supplements, amendments, modifications or
extensions thereof, hereinafter referred to as the “Note”) given by Borrower, as maker, to
Lender, as payee;

     WHEREAS, in consideration of the Loan, Borrower has agreed to make payments in amounts
sufficient to pay and redeem, and provide for the payment and redemption of the principal of,
premium, if any, and interest on the Note when due;

     WHEREAS, Borrower desires by this Security Instrument to provide for, among other things, the
issuance of the Note and for the deposit, deed and pledge by Borrower with, and the creation of a
security interest in favor of, Lender, as security for Borrower’s obligations to Lender from time
to time pursuant to the Note and the other Loan Documents;

     WHEREAS, Borrower and Lender intend these recitals to be a material part of this Security
Instrument; and

     WHEREAS, all things necessary to make this Security Instrument the valid and legally binding
obligation of Borrower in accordance with its terms, for the uses and purposes herein set forth,
have been done and performed.

     NOW THEREFORE, to secure the payment of the principal of, prepayment premium (if any) and
interest on the Note and all other obligations, liabilities or sums due or to become due under this
Security Instrument, the Note or any other Loan Documents, including, without limitation, interest
on said obligations, liabilities or sums (said principal, premium, interest and other sums being
hereinafter referred to as the “Debt”), and the performance of all other covenants,
obligations and liabilities of Borrower pursuant to the Loan Documents, Borrower has executed and
delivered this Security Instrument; and Borrower has irrevocably granted, and by these presents and
by the execution and delivery hereof does hereby irrevocably grant, bargain, sell, alien, demise,
release, convey, assign, transfer, deed, hypothecate, pledge, set over, warrant, mortgage and
confirm to Lender, forever with power of sale, all right, title and interest of Borrower in and to
all of the following property, rights, interests and estates:

 

 

     (a) the plot(s), piece(s) or parcel(s) of real property described in Exhibit A attached hereto
and made a part hereof (individually and collectively, hereinafter referred to as the
“Premises”);

     (b) (i) all buildings, foundations, structures, fixtures, additions, enlargements, extensions,
modifications, repairs, replacements and improvements of every kind or nature now or hereafter
located on the Premises (hereinafter collectively referred to as the “Improvements”); and
(ii) to the extent permitted by law, the name or names, if any, as may now or hereafter be used for
any of the Improvements, and the goodwill associated therewith;

     (c) all easements, servitudes, rights-of-way, strips and gores of land, streets, ways, alleys,
passages, sewer rights, water, water courses, water rights and powers, ditches, ditch rights,
reservoirs and reservoir rights, air rights and development rights, lateral support, drainage, gas,
oil and mineral rights, tenements, hereditaments and appurtenances of any nature whatsoever, in any
way belonging, relating or pertaining to the Premises or the Improvements and the reversion and
reversions, remainder and remainders, whether existing or hereafter acquired, and all land lying in
the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Premises to
the center line thereof and any and all sidewalks, drives, curbs, passageways, streets, spaces and
alleys adjacent to or used in connection with the Premises and/or Improvements and all the estates,
rights, titles, interests, property, possession, claim and demand whatsoever, both in law and in
equity, of Borrower of, in and to the Premises and Improvements and every part and parcel thereof,
with the appurtenances thereto;

     (d) all machinery, equipment, fittings, apparatus, appliances, furniture, furnishings, tools,
fixtures (including, but not limited to, all heating, air conditioning, ventilating, waste
disposal, sprinkler and fire and theft protection equipment, plumbing, lighting, communications and
elevator fixtures) and other property of every kind and nature whatsoever, now or hereafter located
upon, or in, and used in connection with the Premises or the Improvements, or appurtenant thereto,
and all building equipment, materials and supplies of any nature whatsoever owned by Borrower, or
in which Borrower has or shall have an interest, now or hereafter located upon, or in, and used in
connection with the Premises or the Improvements or appurtenant thereto (hereinafter, all of the
foregoing items described in this paragraph (d) are collectively called the “Equipment”),
all of which, and any replacements, modifications, alterations and additions thereto, to the extent
permitted by applicable law, shall be deemed to constitute fixtures (the “Fixtures”), and
are part of the real estate and security for the payment of the Debt and the performance of
Borrower’s obligations. To the extent any portion of the Equipment is not real property or
fixtures under applicable law, it shall be deemed to be personal property, and this Security
Instrument shall constitute a security agreement creating a security interest therein in favor of
Lender under the UCC;

     (e) all awards or payments, including interest thereon, which may hereafter be made with
respect to the Premises, the Improvements, the Fixtures, or the Equipment, whether from the
exercise of the right of eminent domain (including but not limited to any transfer made in lieu of
or in anticipation of the exercise of said right), or for a change of grade, or for any other
injury to or decrease in the value of the Premises, the Improvements or the Equipment or refunds
with

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respect to the payment of property taxes and assessments, and all other proceeds of the
conversion, voluntary or involuntary, of the Premises, Improvements, Equipment, Fixtures or
any other Property or part thereof into cash or liquidated claims;

     (f) all leases, tenancies, licenses and other agreements affecting the use, enjoyment or
occupancy of the Premises, the Improvements, the Fixtures, or the Equipment or any portion thereof
now or hereafter entered into, whether before or after the filing by or against Borrower of any
petition for relief under the Bankruptcy Code and all reciprocal easement agreements, license
agreements and other agreements with Pad Owners (hereinafter collectively referred to as the
“Leases”), together with all cash or security deposits, lease termination payments, advance
rentals and payments of similar nature and guarantees or other security held by, or issued in favor
of, Borrower in connection therewith to the extent of Borrower’s right or interest therein and all
remainders, reversions and other rights and estates appurtenant thereto, and all base, fixed,
percentage or additional rents, and other rents, oil and gas or other mineral royalties, and
bonuses, issues, profits and rebates and refunds or other payments made by any Governmental
Authority from or relating to the Premises, the Improvements, the Fixtures or the Equipment plus
all rents, common area charges and other payments now existing or hereafter arising, whether paid
or accruing before or after the filing by or against Borrower of any petition for relief under the
Bankruptcy Code (the “Rents”) and all proceeds from the sale or other disposition of the
Leases and the right to receive and apply the Rents to the payment of the Debt;

     (g) all proceeds of and any unearned premiums on any insurance policies covering the Premises,
the Improvements, the Fixtures, the Rents or the Equipment, including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Premises, the Improvements, the Fixtures or the Equipment and all
refunds or rebates of Impositions, and interest paid or payable with respect thereto;

     (h) all deposit accounts, securities accounts, funds or other accounts maintained or deposited
with Lender, or its assigns, in connection herewith, including, without limitation, the Security
Deposit Account (to the extent permitted by law), the Escrow Accounts, the Central Account, the
Rent Account, and the Sub-Accounts and all monies and investments deposited or to be deposited in
such accounts;

     (i) all accounts receivable, contract rights (including, without limitation, contract rights
of Borrower pursuant to that certain Environmental Escrow Agreement, dated as of even date
herewith, among Danbury Buildings, Inc., as agent for and general partner of Danbury Buildings Co.,
L.P., and Danbury Buildings Co., L.P., collectively, as seller, and Borrower, as owner, and Chicago
Title Insurance Company, as escrowee and that certain Environmental Indemnity Agreement, dated as
of even date herewith, by Danbury Buildings, Inc., as agent for and general partner of Danbury
Buildings Co., L.P., and Danbury Buildings Co., L.P., collectively, as both seller and indemnitor,
and Bridgewater Investments, Inc. and Buckeye Casa Grande L.P., collectively, as both guarantor and
indemnitor, in favor of Borrower, as owner), franchises, interests, estate or other claims, both at
law and in equity, now existing or hereafter

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arising, and relating to the Premises, the
Improvements, the Fixtures or the Equipment, not included in Rents;

     (j) all now existing or hereafter arising claims against any Person with respect to any damage
to the Premises, the Improvements, the Fixtures or the Equipment, including, without limitation,
damage arising from any defect in or with respect to the design or construction of the
Improvements, the Fixtures or the Equipment and any damage resulting therefrom;

     (k) all deposits or other security or advance payments, including rental payments now or
hereafter made by or on behalf of Borrower to others, with respect to (i) insurance policies, (ii)
utility services, (iii) cleaning, maintenance, repair or similar services, (iv) refuse removal or
sewer service, (v) parking or similar services or rights and (vi) rental of Equipment, if any,
relating to or otherwise used in the operation of the Premises, the Improvements, the Fixtures or
the Equipment;

     (l) all intangible property now or hereafter relating to the Premises, the Improvements, the
Fixtures or the Equipment or its operation, including, without limitation, software, letter of
credit rights, trade names, trademarks (including, without limitation, any licenses of or
agreements to license trade names or trademarks now or hereafter entered into by Borrower), logos,
building names and goodwill (excluding any right, title or interest in and to the names “Grubb”,
“Grubb & Ellis”, “Grubb & Ellis Company”, “Grubb & Ellis Realty Advisers, Inc.” and variants
thereof, the Grubb & Ellis logo or the goodwill associated with such names and/or logo);

     (m) all now existing or hereafter arising advertising material, guaranties, warranties,
building permits, other permits, licenses, plans and specifications, shop and working drawings,
soil tests, appraisals and other documents, materials and/or personal property of any kind now or
hereafter existing in or relating to the Premises, the Improvements, the Fixtures, and the
Equipment;

     (n) all now existing or hereafter arising drawings, designs, plans and specifications prepared
by architects, engineers, interior designers, landscape designers and any other consultants or
professionals for the design, development, construction, repair and/or improvement of the Property,
as amended from time to time;

     (o) the right, in the name of and on behalf of Borrower, to appear in and defend any now
existing or hereafter arising action or proceeding brought with respect to the Premises, the
Improvements, the Fixtures or the Equipment and to commence any action or proceeding to protect the
interest of Lender in the Premises, the Improvements, the Fixtures or the Equipment; and

     (p) all proceeds, products, substitutions and accessions (including claims and demands
therefor) of each of the foregoing.

     All of the foregoing items (a) through (p), together with all of the right, title and interest
of Borrower therein, are collectively referred to as the “Property”.

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     TO HAVE AND TO HOLD the above granted and described Property unto Lender, and the successors
and assigns of Lender in fee simple, forever.

     PROVIDED, ALWAYS, and these presents are upon this express condition, if Borrower shall well
and truly pay and discharge the Debt and perform and observe the terms, covenants and conditions
set forth in the Loan Documents, then these presents and the estate hereby granted shall cease and
be void.

     AND Borrower covenants with and warrants to Lender that:

ARTICLE I: DEFINITIONS

     Section 1.01. Certain Definitions.

     For all purposes of this Security Instrument, except as otherwise expressly provided or unless
the context clearly indicates a contrary intent:

     (i) the capitalized terms defined in this Section have the meanings assigned to them in
this Section, and include the plural as well as the singular;

     (ii) all accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with GAAP; and

     (iii) the words “herein”, “hereof”, and “hereunder” and other words of similar import
refer to this Security Instrument as a whole and not to any particular Section or other
subdivision.

     “Adjusted Net Cash Flow” shall mean Pro-Forma Net Operating Income projected over the
twelve (12)-month period subsequent to the date of calculation less (a) the Recurring Replacement
Reserve Monthly Installment multiplied by twelve (12), (b) Reletting Expenses, and (c)
extraordinary capital improvements projected by Lender, in its reasonable discretion, for the
subsequent twelve (12) month period for which sums were not deposited into the Recurring
Replacement Reserve Escrow Account. The Adjusted Net Cash Flow shall be calculated by Borrower
and shall be subject to the reasonable review and approval of Lender.

     “Affiliate” of any specified Person shall mean any other Person directly or indirectly
Controlling or Controlled by or under direct or indirect common Control with such specified Person.

     “Annual Budget” shall mean an annual budget submitted by Borrower to Lender in
accordance with the terms of Section 2.09 hereof.

     “Appraisal” shall mean the appraisal of the Property and all supplemental reports or
updates thereto previously delivered to Lender in connection with the Loan.

     “Appraiser” shall mean the Person who prepared the Appraisal.

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     “Approved Annual Budget” shall mean each Annual Budget approved by Lender in
accordance with the terms hereof.

     “Approved Manager Standard” shall mean the standard of business operations, practices
and procedures customarily employed by entities having a senior executive with at least seven (7)
years’ experience in the management of first class office buildings which manage not less than five
(5) first class office buildings having an aggregate leasable square footage of not less than the
lesser of (a) one million leasable square feet and (b) five (5) times the leasable square feet of
the Property.

     “Architect” shall have the meaning set forth in Section 3.04(b)(i) hereof.

     “Assignment” shall mean the Assignment of Leases and Rents and Security Deposits of
even date herewith relating to the Property given by Borrower to Lender, as the same may be
modified, amended or supplemented from time to time.

     “Bank” shall mean the bank, trust company, savings and loan association or savings
bank designated by Lender, in its sole and absolute discretion, in which the Central Account shall
be located.

     “Bankruptcy Code” shall mean 11 U.S.C. §101 et seq., as amended from time to time.

     “Basic Carrying Costs” shall mean the sum of the following costs associated with the
Property: (a) Impositions and (b) insurance premiums.

     “Basic Carrying Costs Escrow Account” shall mean the Escrow Account maintained
pursuant to Section 5.06 hereof.

     “Basic Carrying Costs Monthly Installment” shall mean Lender’s estimate of one-twelfth
(1/12th) of the annual amount for Basic Carrying Costs. “Basic Carrying Costs Monthly Installment”
shall also include, if required by Lender, a sum of money which, together with such monthly
installments, will be sufficient to make the payment of each such Basic Carrying Cost at least
thirty (30) days prior to the date initially due. Should such Basic Carrying Costs not be
ascertainable at the time any monthly deposit is required to be made, the Basic Carrying Costs
Monthly Installment shall be determined by Lender in its reasonable discretion on the basis of the
aggregate Basic Carrying Costs for the prior Fiscal Year or month or the prior payment period for
such cost. As soon as the Basic Carrying Costs are fixed for the then current Fiscal Year, month
or period, the next ensuing Basic Carrying Costs Monthly Installment shall be adjusted to reflect
any deficiency or surplus in prior monthly payments. If at any time during the term of the Loan
Lender reasonably determines that there will be insufficient funds in the Basic Carrying Costs
Escrow Account to make payments when they become due and payable, Lender shall have the right to
adjust the Basic Carrying Costs Monthly Installment such that there will be sufficient funds to
make such payments. Notwithstanding anything to the contrary contained herein, provided that (a)
no Event of Default has occurred and is continuing and (b) Borrower delivers proof reasonably
satisfactory to Lender that all insurance premiums have been paid on or prior to the date which is
five (5) Business Days prior to the date upon which such insurance

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premiums are due and payable and
that the Property is insured pursuant to blanket insurance policies in accordance with Section
3.02(d) hereof, the “Basic Carrying Costs Monthly Installment” allocable to insurance premiums
shall be $0.

     “Basic Carrying Costs Sub-Account” shall mean the Sub-Account of the Central Account
established pursuant to Section 5.02 into which the Basic Carrying Costs Monthly Installments shall
be deposited.

     “Borrower” shall mean Borrower named herein and any successor to the obligations of
Borrower.

     “Business Day” shall mean any day other than (a) a Saturday or Sunday, or (b) a day on
which banking and savings and loan institutions in the State of New York or the State of North
Carolina are authorized or obligated by law or executive order to be closed, or at any time during
which the Loan is an asset of a Securitization, the cities, states and/or commonwealths used in the
comparable definition of “Business Day” in the Securitization documents.

     “Capital Expenditures” shall mean for any period, the amount expended for items
capitalized under GAAP including expenditures for building improvements or major repairs, leasing
commissions and tenant improvements.

     “Cash Expenses” shall mean for any period, the operating expenses (excluding Capital
Expenditures) for the Property as set forth in an Approved Annual Budget to the extent that such
expenses are actually incurred by Borrower minus payments into the Basic Carrying Costs
Sub-Account, the Debt Service Payment Sub-Account and the Recurring Replacement Reserve Sub-Account
(to the extent such sums are for the payment of sums set forth as operating expenses in the
Approved Annual Budget).

     “Central Account” shall mean an Eligible Account, maintained at the Bank, in the name
of Borrower for the benefit of Lender or its successors or assigns (as secured party) as may be
designated by Lender.

     “Closing Date” shall mean the date of the Note.

     “Code” shall mean the Internal Revenue Code of 1986, as amended and as it may be
further amended from time to time, any successor statutes thereto, and applicable U.S. Department
of Treasury regulations issued pursuant thereto.

     “Condemnation Proceeds” shall mean all of the proceeds in respect of any Taking or
purchase in lieu thereof.

     “Contractual Obligation” shall mean, 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 the property owned by it is bound.

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     “Control” means, when used with respect to any specific Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of such Person whether through ownership of voting securities, beneficial interests, by
contract or otherwise. The definition is to be construed to apply equally to variations of the
word “Control” including “Controlled,” “Controlling” or “Controlled by.”

     “CPI” shall mean “The Consumer Price Index (New Series) (Base Period 1982-84=100) (all
items for all urban consumers)” issued by the Bureau of Labor Statistics of the United States
Department of Labor (the “Bureau”). If the CPI ceases to use the 1982-84 average equaling
100 as the basis of calculation, or if a change is made in the term, components or number of items
contained in said index, or if the index is altered, modified, converted or revised in any other
way, then the index shall be adjusted to the figure that would have been arrived at had the change
in the manner of computing the index in effect at the date of this Security Instrument not been
made. If at any time during the term of this Security Instrument the CPI shall no longer be
published by the Bureau, then any comparable index issued by the Bureau or similar agency of the
United States issuing similar indices shall be used in lieu of the CPI.

     “Curtailment Reserve Escrow Account” shall mean the Escrow Account maintained pursuant
to Section 5.11 hereof.

     “Curtailment Reserve Sub-Account” shall mean the Sub-Account of the Central Account
established pursuant to Section 5.02 hereof into which excess cash flow shall be deposited pursuant
to Section 5.05.

     “Debt” shall have the meaning set forth in the Recitals hereto.

     “Debt Service” shall mean the amount of interest and principal payments due and
payable in accordance with the Note during an applicable period.

     “Debt Service Coverage” shall mean the quotient obtained by dividing Adjusted Net Cash
Flow by the sum of the (a) aggregate payments of interest, principal and all other sums due for
such specified period under the Note (determined as of the date the calculation of Debt Service
Coverage is required or requested hereunder) and (b) aggregate payments of interest, principal and
all other sums due for such specified period pursuant to the terms of subordinate or mezzanine
financing, if any, then affecting or related to the Property or, if Debt Service Coverage is being
calculated in connection with a request for consent to any subordinate or mezzanine financing, then
proposed. In determining Debt Service Coverage, the applicable interest rate for the Loan and for
any floating rate loan referred to in clause (b) above, if any, shall be the greater of (1) the
LIBOR Margin, with respect to the Loan, and the applicable margin over the applicable index, with
respect to any other loan referred to in clause (b) above, plus the then current LIBOR Rate, with
respect to the Loan, or the then current applicable index rate, with respect to any other loan
described in clause (b) above (but in no event more than the strike price set forth in the Rate Cap
Agreement or any similar agreement applicable to any loan referred to in clause (b) above) and (2)
8.50%.

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     “Debt Service Payment Sub-Account” shall mean the Sub-Account of the Central Account
established pursuant to Section 5.02 hereof into which the Required Debt Service Payment shall be
deposited.

     “Debt Service Reserve Escrow Account” shall mean an Escrow Account established and
maintained pursuant to Section 5.15 hereof.

     “Default” shall mean any Event of Default or event which would constitute an Event of
Default if all requirements in connection therewith for the giving of notice, the lapse of time,
and the happening of any further condition, event or act, had been satisfied.

     “Default Rate” shall mean the lesser of (a) the highest rate allowable at law and (b)
five percent (5%) above the interest rate set forth in the Note.

     “Default Rate Interest” shall mean, to the extent the Default Rate becomes applicable,
interest in excess of the interest which would have accrued on (a) the Principal Amount and (b) any
accrued but unpaid interest, if the Default Rate was not applicable.

     “Development Laws” shall mean all applicable subdivision, zoning, environmental
protection, wetlands protection, or land use laws or ordinances, and any and all applicable rules
and regulations of any Governmental Authority promulgated thereunder or related thereto.

     “Disclosure Document” shall mean a prospectus, prospectus supplement, private
placement memorandum, or similar offering memorandum or offering circular, in each case in
preliminary or final form, used to offer securities in connection with a Securitization.

     “Dollar” and the sign “$” shall mean lawful money of the United States of America.

     “Eligible Account” shall mean a segregated account which is either (a) an account or
accounts maintained with a federal or state chartered depository institution or trust company the
long term unsecured debt obligations of which are rated by each of the Rating Agencies (or, if not
rated by Fitch, Inc. (“Fitch”), otherwise acceptable to Fitch, as confirmed in writing that
such account would not, in and of itself, result in a downgrade, qualification or withdrawal of the
then current ratings assigned to any certificates issued in connection with a Securitization) in
its second highest rating category at all times or, if the funds in such account are to be held in
such account for less than thirty (30) days, the short term obligations of which are rated by each
of the Rating Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch, as confirmed in
writing that such account would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to any certificates issued in connection with a
Securitization) in its second highest rating category at all times 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 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 $100,000,000 and subject to supervision or
examination by federal and state authority, or otherwise acceptable (as evidenced by a written
confirmation from each Rating Agency that such account would not, in and of itself, cause a
downgrade, qualification or

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withdrawal of the then current ratings assigned to any certificates
issued in connection with a Securitization) to each Rating Agency, which may be an account
maintained by Lender or its agents. Eligible Accounts may bear interest. The title of each
Eligible Account shall indicate that the funds held therein are held in trust for the uses and
purposes set forth herein.

     “Engineer” shall have the meaning set forth in Section 3.04(b)(i) hereof.

     “Engineering Escrow Account” shall mean an Escrow Account established and maintained
pursuant to Section 5.12 hereof relating to payments for any Required Engineering Work.

     “Environmental Problem” shall mean any of the following:

     (a) the presence of any Hazardous Material on, in, under, or above all or any portion
of the Property;

     (b) the release or threatened release of any Hazardous Material from or onto the
Property;

     (c) the violation of any Environmental Statute with respect to the Property; or

     (d) the failure to obtain or to abide by the terms or conditions of any permit or
approval required under any Environmental Statute with respect to the Property.

A condition described above shall be an Environmental Problem regardless of whether or not any
Governmental Authority has taken any action in connection with the condition and regardless of
whether that condition was in existence on or before the date hereof.

     “Environmental Report” shall mean the environmental audit report for the Property and
any supplements or updates thereto, previously delivered to Lender in connection with the Loan.

     “Environmental Statute” shall mean any federal, state or local statute, ordinance,
rule or regulation, any judicial or administrative order (whether or not on consent) or judgment
applicable to Borrower or the Property including, without limitation, any judgment or settlement
based on common law theories, and any provisions or conditions of any permit, license or other
authorization binding on Borrower relating to (a) the protection of the environment, the safety and
health of persons (including employees) or the public welfare from actual or potential exposure (or
effects of exposure) to any actual or potential release, discharge, disposal or emission (whether
past or present) of any Hazardous Materials or (b) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any Hazardous Materials, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980
(“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. §9601 et seq., the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, as amended by the Solid and Hazardous Waste Amendments of
1984, 42 U.S.C. §6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. §1251 et

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seq., the Toxic Substances
Control Act of 1976, 15 U.S.C. §2601 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. §1101 et seq., the Clean Air Act of 1966, as
amended, 42 U.S.C. §7401 et seq., the National Environmental Policy Act of 1975, 42
U.S.C. §4321, the Rivers and Harbors Act of 1899, 33 U.S.C. §401 et seq., the
Endangered Species Act of 1973, as amended, 16 U.S.C. §1531 et seq., the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §651 et seq., and
the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §300(f) et seq., and all
rules, regulations and guidance documents promulgated or published thereunder.

     “Equipment” shall have the meaning set forth in granting clause (d) of this Security
Instrument.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated thereunder. Section references to ERISA are to
ERISA, as in effect at the date of this Security Instrument and, as of the relevant date, any
subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

     “ERISA Affiliate” shall mean any corporation or trade or business that is a member of
any group of organizations (a) described in Section 414(b) or (c) of the Code of which Borrower is
a member and (b) solely for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which Borrower is a member.

     “Escrow Account” shall mean each of the Engineering Escrow Account, the Basic Carrying
Costs Escrow Account, the Recurring Replacement Reserve Escrow Account, the Reletting Reserve
Escrow Account, the Debt Service Reserve Escrow Account and the Underwritten Rent Escrow Account,
the Operation and Maintenance Expense Escrow Account and the Curtailment Reserve Escrow Account,
each of which shall be an Eligible Account or book entry sub-account of an Eligible Account.

     “Event of Default” shall have the meaning set forth in Section 13.01 hereof.

     “Extraordinary Expense” shall mean an extraordinary operating expense or capital
expense not set forth in the Approved Annual Budget or allotted for in the Recurring Replacement
Reserve Sub-Account.

     “First Interest Accrual Period” shall have the meaning set forth in the Note.

     “Fiscal Year” shall mean the twelve (12) month period commencing on January 1 and
ending on December 31 during each year of the term of this Security Instrument, or such other
fiscal year of Borrower as Borrower may select from time to time with the prior written consent of
Lender.

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     “Fixtures” shall have the meaning set forth in granting clause (d) of this Security
Instrument.

     “GAAP” shall mean generally accepted accounting principles in the United States of
America, as of the date of the applicable financial report, consistently applied.

     “General Partner” shall mean, if Borrower is a partnership, each general partner of
Borrower and, if Borrower is a limited liability company, each managing member of Borrower and in
each case, if applicable, each general partner or managing member of such general partner or
managing member. In the event that Borrower is a single member limited liability company, the term
“General Partner” shall include such single member.

     “Governmental Authority” shall mean, with respect to any Person, any federal or State
government or other political subdivision thereof and any entity, including any regulatory or
administrative authority or court, exercising executive, legislative, judicial, regulatory or
administrative or quasi-administrative functions of or pertaining to government, and any
arbitration board or tribunal, in each case having jurisdiction over such applicable Person or such
Person’s property and any stock exchange on which shares of capital stock of such Person are listed
or admitted for trading.

     “Hazardous Material” shall mean any flammable, explosive or radioactive materials,
hazardous materials or wastes, hazardous or toxic substances, pollutants or related materials,
asbestos or any material containing asbestos, molds, spores and fungus which may pose a risk to
human health or the environment or any other substance or material as defined in or regulated by
any Environmental Statutes.

     “Impositions” shall mean all taxes (including, without limitation, all real estate, ad
valorem, sales (including those imposed on lease rentals), use, single business, gross receipts,
value added, intangible, transaction, privilege or license or similar taxes), assessments
(including, without limitation, all assessments for public improvements or benefits, whether or not
commenced or completed prior to the date hereof and whether or not commenced or completed within
the term of this Security Instrument), ground rents, water, sewer or other rents and charges,
excises, levies, fees (including, without limitation, license, permit, inspection, authorization
and similar fees), and all other governmental charges, in each case whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Property
and/or any Rent (including all interest and penalties thereon), which at any time prior to, during
or in respect of the term hereof may be assessed or imposed on or in respect of or be a lien upon
(a) Borrower (including, without limitation, all franchise, single business or other taxes imposed
on Borrower for the privilege of doing business in the jurisdiction in which the Property or any
other collateral delivered or pledged to Lender in connection with the Loan is located) or Lender,
(b) the Property or any part thereof or any Rents therefrom or any estate, right, title or interest
therein, or (c) any occupancy, operation, use or possession of, or sales from, or activity
conducted on, or in connection with the Property, or any part thereof, or the leasing or use of the
Property, or any part thereof, or the acquisition or financing of the acquisition of the Property,
or any part thereof, by Borrower.

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     “Improvements” shall have the meaning set forth in granting clause (b) of this
Security Instrument.

     “Indemnified Parties” shall have the meaning set forth in Section 12.01 hereof.

     “Independent” shall mean, when used with respect to any Person, a Person who (a) is in
fact independent, (b) does not have any direct financial interest or any material indirect
financial interest in Borrower, or in any Affiliate of Borrower or any constituent partner,
shareholder, member or beneficiary of Borrower, (c) is not connected with Borrower or any Affiliate
of Borrower or any constituent partner, shareholder, member or beneficiary of Borrower as an
officer, employee, promoter, underwriter, trustee, partner, director or person performing similar
functions and (d) is not a member of the immediate family of a Person defined in (b) or (c) above.
Whenever it is herein provided that any Independent Person’s opinion or certificate shall
be provided, such opinion or certificate shall state that the Person executing the same has
read this definition and is Independent within the meaning hereof.

     “Independent Director” shall have the meaning set forth in Section 2.02(g)(xvi)
hereof.

     “Initial Debt Service Reserve Deposit” shall equal the amount set forth on Exhibit B
attached hereto and made a part hereof.

     “Initial Engineering Deposit” shall equal the amount set forth on Exhibit B attached
hereto and made a part hereof.

     “Initial Reletting Reserve Deposit” shall equal the amount set forth on Exhibit B
attached hereto and made a part hereof.

     “Initial Underwritten Rent Deposit” shall equal the amount set forth on Exhibit B
attached hereto and made a part hereof.

     “Institutional Lender” shall mean any of the following Persons: (a) any bank, savings
and loan association, savings institution, trust company or national banking association, acting
for its own account or in a fiduciary capacity, (b) any charitable foundation, (c) any insurance
company or pension and/or annuity company, (d) any fraternal benefit society, (e) any pension,
retirement or profit sharing trust or fund within the meaning of Title I of ERISA or for which any
bank, trust company, national banking association or investment adviser registered under the
Investment Advisers Act of 1940, as amended, is acting as trustee or agent, (f) any investment
company or business development company, as defined in the Investment Company Act of 1940, as
amended, (g) any small business investment company licensed under the Small Business Investment Act
of 1958, as amended, (h) any broker or dealer registered under the Securities Exchange Act of 1934,
as amended, or any investment adviser registered under the Investment Adviser Act of 1940, as
amended, (i) any government, any public employees’ pension or retirement system, or any other
government agency supervising the investment of public funds, or (j) any other entity all of the
equity owners of which are Institutional Lenders; provided that each of said Persons shall have net
assets in excess of $1,000,000,000 and a net worth in excess of $500,000,000, be in the business of
making commercial mortgage loans, secured by properties

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of like type, size and value as the
Property and have a long term credit rating which is not less than “BBB-” (or its equivalent) from
each Rating Agency.

     “Insurance Proceeds” shall mean all of the proceeds received under the insurance
policies required to be maintained by Borrower pursuant to Article III hereof.

     “Insurance Requirements” shall mean all terms of any insurance policy required by this
Security Instrument, all requirements of the issuer of any such policy, and all regulations and
then current standards applicable to or affecting the Property or any use or condition thereof,
which may, at any time, be recommended by the Board of Fire Underwriters, if any, having
jurisdiction over the Property, or such other Person exercising similar functions.

     “Interest Accrual Period” shall have the meaning set forth in the Note.

     “Interest Rate” shall have the meaning set forth in the Note.

     “Interest Shortfall” shall mean any shortfall in the amount of interest required to be
paid with respect to the Loan Amount on any Payment Date.

     “Late Charge” shall have the meaning set forth in Section 13.09 hereof.

     “Leases” shall have the meaning set forth in granting clause (f) of this Security
Instrument.

     “Legal Requirement” shall mean as to any Person, the certificate of incorporation,
by-laws, certificate of limited partnership, agreement of limited partnership or other organization
or governing documents of such Person, and any law, statute, order, ordinance, judgment, decree,
injunction, treaty, rule or regulation (including, without limitation, Environmental Statutes,
Development Laws and Use Requirements) or determination of an arbitrator or a court or other
Governmental Authority and all covenants, agreements, restrictions and encumbrances contained in
any instruments, in each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

     “Lender” shall mean the Lender named herein and its successors or assigns.

     “LIBOR Margin” shall have the meaning set forth in the Note.

     “LIBOR Rate” shall have the meaning set forth in the Note.

     “Loan” shall have the meaning set forth in the Recitals hereto.

     “Loan Amount” shall have the meaning set forth in the Recitals hereto.

     “Loan Documents” shall mean this Security Instrument, the Note, the Assignment, and
any and all other agreements, instruments, certificates or documents executed and delivered by
Borrower or any Affiliate of Borrower in connection with the Loan, together with any supplements,
amendments, modifications or extensions thereof.

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     “Loan Year” shall mean each 365 day period (or 366 day period if the month of February
in a leap year is included) commencing on the first day of the month following the Closing Date
(provided, however, that the first Loan Year shall also include the period from the Closing Date to
the end of the month in which the Closing Date occurs).

     “Loss Proceeds” shall mean, collectively, all Insurance Proceeds and all Condemnation
Proceeds.

     “Major Space Lease” shall mean any Space Lease of a tenant or Affiliate of such tenant
where such tenant, together with such Affiliate, leases, in the aggregate, 25,000 or more square
feet.

     “Management Agreement” shall have the meaning set forth in Section 7.02 hereof.

     “Manager” shall mean the Person, other than Borrower, which manages the Property on
behalf of Borrower.

     “Manager Certification” shall have the meaning set forth in Section 2.09 hereof.

     “Material Adverse Effect” shall mean any event or condition that has a material
adverse effect on (a) the Property, (b) the business, prospects, profits, management, operations or
condition (financial or otherwise) of Borrower, (c) the enforceability, validity, perfection or
priority of the lien of any Loan Document or (d) the ability of Borrower to perform any obligations
under any Loan Document.

     “Maturity”, when used with respect to the Note, shall mean the Maturity Date set forth
in the Note or such other date pursuant to the Note on which the final payment of principal, and
premium, if any, on the Note becomes due and payable as therein or herein provided, whether at
Stated Maturity or by declaration of acceleration, or otherwise.

     “Maturity Date” shall mean the Maturity Date set forth in the Note, as the same may be
extended from time to time pursuant to the terms of the Note.

     “Multiemployer Plan” shall mean a multiemployer plan defined as such in Section 3(37)
of ERISA to which contributions have been, or were required to have been, made by Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.

     “Net Capital Expenditures” shall mean for any period the amount by which Capital
Expenditures during such period exceed reimbursements for such items during such period from any
fund established pursuant to the Loan Documents.

     “Net Operating Income” shall mean in each Fiscal Year or portion thereof during the
term hereof, Operating Income less Operating Expenses.

     “Net Proceeds” shall mean the excess of (a)(i) the purchase price (at foreclosure or
otherwise) actually received by Lender with respect to the Property as a result of the exercise by
Lender of its rights, powers, privileges and other remedies after the occurrence of an Event of

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Default, or (ii) in the event that Lender (or Lender’s nominee) is the purchaser at foreclosure by
credit bid, then the amount of such credit bid, in either case, over (b) all costs and expenses,
including, without limitation, all attorneys’ fees and disbursements and any brokerage fees, if
applicable, incurred by Lender in connection with the exercise of such remedies, including the sale
of such Property after a foreclosure against the Property.

     “Note” shall have the meaning set forth in the Recitals hereto.

     “O&M Operative Period” shall commence upon such time as Lender determines that there
are not adequate sums in the Debt Service Reserve Escrow Account to make the required Debt Service
payment due on the next Payment Date.

     “OFAC List” shall mean the list of specially designated nationals and blocked persons
subject to financial sanctions that is maintained by the U.S. Treasury Department, Office of
Foreign Assets Control and accessible through the internet website
www.treas.gov/ofac/t11sdn.pdf.

     “Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower which
is signed on behalf of Borrower by an authorized representative of Borrower which states that the
items set forth in such certificate are true, accurate and complete in all material respects.

     “Operating Expenses” shall mean, in each Fiscal Year or portion thereof during the
term hereof, all expenses directly attributable to the operation, repair and/or maintenance of the
Property including, without limitation, (a) Impositions, (b) insurance premiums, (c) management
fees, whether or not actually paid, equal to the greater of the actual management fees and four
percent (4%) of annual “base” or “fixed” Rent due under the Leases and (d) costs attributable to
the operation, repair and maintenance of the systems for heating, ventilating and air conditioning
the Improvements and actually paid for by Borrower. Operating Expenses shall not include interest,
principal and premium, if any, due under the Note or otherwise in connection with the Debt, income
taxes, extraordinary capital improvement costs, any non-cash charge or expense such as depreciation
or amortization or any item of expense otherwise includable in Operating Expenses which is paid
directly by any tenant except real estate taxes paid directly to any taxing authority by any
tenant.

     “Operating Income” shall mean, in each Fiscal Year or portion thereof during the term
hereof, all revenue derived by Borrower arising from the Property including, without limitation,
rental revenues (whether denominated as basic rent, additional rent, escalation payments,
electrical payments or otherwise) and other fees and charges payable pursuant to Leases or
otherwise in connection with the Property, and business interruption, rent or other similar
insurance proceeds. Operating Income shall not include (a) Insurance Proceeds (other than proceeds
of rent, business interruption or other similar insurance allocable to the applicable period) and
Condemnation Proceeds (other than Condemnation Proceeds arising from a temporary taking or the use
and occupancy of all or part of the applicable Property allocable to the applicable period), or
interest accrued on such Condemnation Proceeds, (b) proceeds of any financing, (c) proceeds of any
sale, exchange or transfer of the Property or any part thereof or interest therein, (d) capital
contributions or loans to Borrower or an Affiliate of Borrower, (e)

16

 

any item of income otherwise
includable in Operating Income but paid directly by any tenant to a Person other than Borrower
except for real estate taxes paid directly to any taxing authority by any tenant, (f) any other
extraordinary, non-recurring revenues, (g) Rent paid by or on behalf of any lessee under a Space
Lease which is the subject of any proceeding or action relating to its bankruptcy, reorganization
or other arrangement pursuant to the Bankruptcy Code or any similar federal or state law or which
has been adjudicated a bankrupt or insolvent unless such Space Lease has been affirmed by the
trustee in such proceeding or action, (h) Rent paid by or on behalf of any lessee under a Space
Lease the demised premises of which are not occupied either by such lessee or by a sublessee
thereof, (i) Rent paid by or on behalf of any lessee under a Space Lease in whole or partial
consideration for the termination of any Space Lease, or (j) sales tax rebates from any
Governmental Authority.

     “Operation and Maintenance Expense Escrow Account” shall mean the Escrow Account
maintained pursuant to Section 5.09 hereof relating to the payment of Operating Expenses (exclusive
of Basic Carrying Costs).

     “Operation and Maintenance Expense Sub-Account” shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof into which sums allocated for the
payment of Cash Expenses, Net Capital Expenditures and approved Extraordinary Expenses shall be
deposited.

     “Pad Owners” shall mean any owner of any fee interest in property contiguous to or
surrounded by the Property who has entered into or is subject to a reciprocal easement agreement or
other agreement or agreements with Borrower either (a) in connection with an existing or potential
improvement on such property or (b) relating to or affecting the Property.

     “Payment Date” shall have the meaning set forth in the Note.

     “PBGC” shall mean the Pension Benefit Guaranty Corporation established under ERISA, or
any successor thereto.

     “Permitted Encumbrances” shall have the meaning set forth in Section 2.05(a) hereof.

     “Person” shall mean any individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association, any federal, state, county
or municipal government or any bureau, department or agency thereof and any fiduciary acting in
such capacity on behalf of any of the foregoing.

     “Plan” shall mean an employee benefit or other plan established or maintained by
Borrower or any ERISA Affiliate during the five-year period ended prior to the date of this
Security Instrument or to which Borrower or any ERISA Affiliate makes, is obligated to make or has,
within the five year period ended prior to the date of this Security Instrument, been required to
make contributions (whether or not covered by Title IV of ERISA or Section 302 of ERISA or Section
401(a) or 412 of the Code), other than a Multiemployer Plan.

17

 

     “Premises” shall have the meaning set forth in granting clause (a) of this Security
Instrument.

     “Principal Amount” shall mean the Loan Amount as such amount may be reduced from time
to time pursuant to the terms of this Security Instrument, the Note or the other Loan Documents.

     “Principal Payments” shall mean all payments of principal made pursuant to the terms
of the Note.

     “Pro-Forma Net Operating Income” shall mean Pro-Forma Operating Income less Pro-Forma
Operating Expenses.

     “Pro-Forma Operating Expenses” shall mean projected annualized Operating Expenses
based on a trailing twelve (12)-month period as reasonably adjusted by Lender to take into account,
among other things, anticipated increases in Operating Expenses.

     “Pro-Forma Operating Income” shall mean projected annualized Operating Income based on
the most recent rent rolls and such other information as is required to be delivered by Borrower
pursuant to Section 2.09 hereof excluding rent relating to tenants under Space Leases (pursuant to
the most recent rent roll) that are more than thirty (30) days old as reasonably adjusted by Lender
to take into account, among other things, a vacancy factor equal to the greater of (a) anticipated
vacancies and (b) market vacancies for the market in which the Property is located.

     “Prohibited Person” shall mean any Person and/or any Affiliate thereof identified on
the OFAC List or any other Person or foreign country or agency thereof with whom a U.S. Person may
not conduct business or transactions by prohibition of Federal law or Executive Order of the
President of the United States of America.

     “Property” shall have the meaning set forth in the granting clauses of this Security
Instrument.

     “Property Agreements” shall mean all agreements, grants of easements and/or
rights-of-way, reciprocal easement agreements, permits, declarations of covenants, conditions and
restrictions, disposition and development agreements, planned unit development agreements, parking
agreements, party wall agreements or other instruments affecting the Property, including, without
limitation any agreements with Pad Owners, but not including any brokerage agreements, management
agreements, service contracts, Space Leases or the Loan Documents.

     “Rate Cap Agreement” shall mean that certain interest rate protection agreement
(together with the confirmation and schedules relating thereto) with a notional amount which shall
not at any time be less than the Principal Amount and a LIBOR Rate strike price equal to six
percent 6%) entered into by Borrower in accordance with the terms hereof or of the other Loan
Documents and any similar interest rate cap or collar agreements subsequently entered into in
replacement or substitution therefor by Borrower with respect to the Loan.

18

 

     “Rating Agency” shall mean each of Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Company, Inc. (“Standard & Poor’s”), Fitch, Inc., and Moody’s Investors
Service, Inc. (“Moody’s”) and any successor to any of them; provided, however, that at any
time after a Securitization, “Rating Agency” shall mean those of the foregoing rating agencies that
from time to time rate the securities issued in connection with such Securitization.

     “Realty” shall have the meaning set forth in Section 2.05(b) hereof.

     “Recurring Replacement Expenditures” shall mean expenditures related to capital
repairs, replacements and improvements performed at the Property from time to time.

     “Recurring Replacement Reserve Escrow Account” shall mean the Escrow Account
maintained pursuant to Section 5.08 hereof relating to the payment of Recurring Replacement
Expenditures.

     “Recurring Replacement Reserve Monthly Installment” shall mean the amount per month
set forth on Exhibit B attached hereto and made a part hereof (the “Initial Recurring
Installments”).

     “Recurring Replacement Reserve Sub-Account” shall mean the Sub-Account of the Central
Account established pursuant to Section 5.02 hereof into which the Recurring Replacement Reserve
Monthly Installment shall be deposited.

     “Regulation AB” shall mean Regulation AB under the Securities Act and the Securities
Exchange Act of 1934 (as amended).

     “Reletting Expenditures” shall mean reasonable and actual out-of-pocket expenditures
payable to bona-fide third parties and the Manager or its Affiliates incurred by Borrower relating
to reletting of space at the Property and in connection with any brokerage commissions due and
payable, or any improvements and replacements required to be made by Borrower (or reasonable and
actual out-of-pocket expenditures paid to tenants in connection with any improvements and
replacements made by tenants at the Property) under the terms of any Lease to prepare the relevant
space for occupancy by the tenant thereunder.

     “Reletting Expenses” shall mean Lender’s estimate of expenditures to be incurred by
Borrower on an annual basis during the term of the Loan relating to reletting of space at the
Property and in connection with any brokerage commissions due and payable in connection therewith,
or any improvements and replacements required to be made by Borrower (or expenditures to be paid to
tenants in connection with any improvements and replacements to be made by tenants at the Property)
to prepare the relevant space for occupancy.

     “Reletting Reserve Escrow Account” shall mean the Escrow Account maintained pursuant
to Section 5.07 hereof relating to the payment of Reletting Expenditures.

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     “Rent Account” shall mean an Eligible Account maintained in a bank acceptable to
Lender in the joint names of Borrower and Lender or such other name as Lender may designate in
writing.

     “Rents” shall have the meaning set forth in granting clause (f) of this Security
Instrument.

     “Rent Roll” shall have the meaning set forth in Section 2.05 (o) hereof.

     “Required Debt Service Coverage” shall mean a Debt Service Coverage of not less than
1.2:1.

     “Required Debt Service Payment” shall mean, as of any Payment Date, the amount of
interest and principal then due and payable pursuant to the Note, together with any other sums due
thereunder, including, without limitation, any prepayments required to be made or for which
notice has been given under this Security Instrument, Default Rate Interest and premium, if
any, paid in accordance therewith.

     “Required Engineering Work” shall mean the immediate engineering and/or environmental
remediation work set forth on Exhibit D attached hereto and made a part hereof.

     “Retention Amount” shall have the meaning set forth in Section 3.04(b)(vii) hereof.

     “Securities Act” shall mean the Securities Act of 1933, as the same shall be amended
from time to time.

     “Securitization” shall mean a public or private offering of securities by Lender or
any of its Affiliates or their respective successors and assigns which are collateralized, in whole
or in part, by this Security Instrument.

     “Security Deposit Account” shall have the meaning set forth in Section 5.01 hereof.

     “Security Instrument” shall mean this Security Instrument as originally executed or as
it may hereafter from time to time be supplemented, amended, modified or extended by one or more
indentures supplemental hereto.

     “Significant Obligor” shall have the meaning set forth in Item 1101(k) of Regulation
AB.

     “Single Purpose Entity” shall mean a corporation, partnership, joint venture, limited
liability company, trust or unincorporated association, which is formed or organized solely for the
purpose of holding, directly, an ownership interest in the Property and has complied, does comply
and shall comply with the representations and covenants set forth in Section 2.02(g) hereof.

     “Solvent” shall mean, as to any Person, that (a) the sum of the assets of such Person,
at a fair valuation, exceeds its liabilities, including contingent liabilities, (b) such Person has
sufficient capital with which to conduct its business as presently conducted and as proposed to be
conducted and (c) such Person has not incurred debts, and does not intend to incur debts, beyond

20

 

its ability to pay such debts as they mature. For purposes of this definition, “debt”
means any liability on a claim, and “claim” means (a) a right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured, or (b) a right to an equitable remedy
for breach of performance if such breach gives rise to a payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured. With respect to any such contingent liabilities, such
liabilities shall be computed in accordance with GAAP at the amount which, in light of all the
facts and circumstances existing at the time, represents the amount which can reasonably be
expected to become an actual or matured liability.

     “Space Leases” shall mean any Lease or sublease thereunder (including, without
limitation, any Major Space Lease) or any other agreement providing for the use and occupancy
of a portion of the Property together with any supplements, renewals, amendments,
modifications or extensions thereof.

     “State” shall mean any of the states which are members of the United States of
America.

     “Stated Maturity” when used with respect to the Note or any installment of interest
and/or principal payment thereunder, shall mean the date specified in the Note as the fixed date on
which a payment of all or any portion of principal and/or interest is due and payable , as such
date may be extended from time to time pursuant to the terms of the Note.

     “Sub-Accounts” shall have the meaning set forth in Section 5.02 hereof.

     “Substantial Casualty” shall have the meaning set forth in Section 3.04 hereof.

     “Taking” shall mean a condemnation or taking pursuant to the lawful exercise of the
power of eminent domain.

     “Total GLA” shall mean the total gross leasable area of the Property, including all
Space Leases.

     “Transfer” shall mean the conveyance, assignment, sale, mortgaging, encumbrance,
pledging, hypothecation, granting of a security interest in, granting of options with respect to,
or other disposition of (directly or indirectly, voluntarily or involuntarily, by operation of law
or otherwise, and whether or not for consideration or of record) all or any portion of any legal or
beneficial interest (a) in all or any portion of the Property; (b) if Borrower is a corporation or,
if Borrower is a partnership and any General Partner is a corporation, in the stock of Borrower or
any General Partner; (c) in Borrower (or any trust of which Borrower is a trustee); or (d) if
Borrower is a limited or general partnership, joint venture, limited liability company, trust,
nominee trust, tenancy in common or other unincorporated form of business association or form of
ownership interest, in any Person having a legal or beneficial ownership in Borrower, excluding any
legal or beneficial interest in any constituent limited partner, if Borrower is a limited
partnership, or in any non-managing member, if Borrower is a limited liability company, unless such
interest would, or together with all other direct or indirect interests in Borrower

21

 

which were
previously transferred, aggregate 49% or more of the partnership or membership, as applicable,
interest in Borrower or would result in any Person who, as of the Closing Date, did not own,
directly or indirectly, 49% or more of the partnership or membership, as applicable, interest in
Borrower, owning, directly or indirectly, 49% or more of the partnership or membership, as
applicable, interest in Borrower and excluding any legal or beneficial interest in any General
Partner unless such interest would, or together with all other direct or indirect interest in the
General Partner which were previously transferred, aggregate 49% or more of the partnership or
membership, as applicable, interest in the General Partner (or result in a change in control of the
management of the General Partner from the individuals exercising such control immediately prior to
the conveyance or other disposition of such legal or beneficial interest) and shall also include,
without limitation to the foregoing, the following: an installment sales agreement wherein
Borrower agrees to sell the Property or any part thereof or any interest therein for a price to be
paid in installments; an agreement by Borrower leasing all or substantially all of the Property to
one or more Persons pursuant to a single or related
transactions, or a sale, assignment or other transfer of, or the grant of a security interest
in, Borrower’s right, title and interest in and to any Leases or any Rent; any instrument
subjecting the Property to a condominium regime or transferring ownership to a cooperative
corporation; and the dissolution or termination of Borrower or the merger or consolidation of
Borrower with any other Person.

     “UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in the
State in which the Realty is located; provided, however, that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-perfection or priority of the security
interest in any item or portion of the collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State in which the Realty is located (“Other UCC
State”), “UCC” means the Uniform Commercial Code as in effect in such Other UCC State
for purposes of the provisions hereof relating to such perfection or effect of perfection or
non-perfection or priority.

     “Underwritten Rent Escrow Account” shall mean an Escrow Account maintained pursuant to
Section 5.14 hereof.

     “Unscheduled Payments” shall mean (a) all Loss Proceeds that Borrower has elected or
is required to apply to the repayment of the Debt pursuant to this Security Instrument, the Note or
any other Loan Documents, (b) any funds representing a voluntary or involuntary principal
prepayment and (c) any Net Proceeds.

     “Use Requirements” shall mean any and all building codes, permits, certificates of
occupancy or compliance, laws, regulations, or ordinances (including, without limitation, health,
pollution, fire protection, medical and day-care facilities, waste product and sewage disposal
regulations), restrictions of record, easements, reciprocal easements, declarations or other
agreements affecting the use of the Property or any part thereof.

     “Welfare Plan” shall mean an employee welfare benefit plan as defined in Section 3(1)
of ERISA established or maintained by Borrower or any ERISA Affiliate or that covers any current or
former employee of Borrower or any ERISA Affiliate.

22

 

     “Work” shall have the meaning set forth in Section 3.04(a)(i) hereof.

 ARTICLE II: REPRESENTATIONS, WARRANTIES

 AND COVENANTS OF BORROWER

     Section 2.01. Payment of Debt. Borrower will pay the Debt at the time and in the
manner provided in the Note and the other Loan Documents, all in lawful money of the United States
of America in immediately available funds.

     Section 2.02. Representations, Warranties and Covenants of Borrower. Borrower
represents and warrants to and covenants with Lender:

          (a) Organization and Authority. Borrower (i) is a limited liability company, general
partnership, limited partnership or corporation, as the case may be, duly organized,
validly existing and in good standing under the laws of the jurisdiction of its formation,
(ii) has all requisite power and authority and all necessary licenses and permits to own and
operate the Property and to carry on its business as now conducted and as presently proposed to be
conducted and (iii) is duly qualified, authorized to do business and in good standing in the
jurisdiction where the Property is located and in each other jurisdiction where the conduct of its
business or the nature of its activities makes such qualification necessary. If Borrower is a
limited liability company, limited partnership or general partnership, each general partner or
managing member, as applicable, of Borrower which is a corporation is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its formation.

          (b) Power. Borrower and, if applicable, each General Partner has full power and
authority to execute, deliver and perform, as applicable, the Loan Documents to which it is a
party, to make the borrowings thereunder, to execute and deliver the Note and to grant to Lender a
first, prior, perfected and continuing lien on and security interest in the Property, subject only
to the Permitted Encumbrances.

          (c) Authorization of Borrowing. The execution, delivery and performance of the Loan
Documents to which Borrower is a party, the making of the borrowings thereunder, the execution and
delivery of the Note, the grant of the liens on the Property pursuant to the Loan Documents to
which Borrower is a party and the consummation of the Loan are within the powers of Borrower and
have been duly authorized by Borrower and, if applicable, the General Partners, by all requisite
action (and Borrower hereby represents that no approval or action of any member, limited partner or
shareholder, as applicable, of Borrower is required to authorize any of the Loan Documents to which
Borrower is a party) and will constitute the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with their terms, except as enforcement may be stayed or
limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity (whether considered in proceedings at law or in
equity) and will not (i) violate any provision of its partnership agreement or partnership
certificate or certificate of incorporation or by-laws, or operating agreement, limited liability
company agreement, certificate of formation or articles of organization, as applicable, or, to its
knowledge, any law, judgment, order, rule or regulation of any court, arbitration panel or other
Governmental Authority, domestic or foreign, or other

23

 

Person affecting or binding upon Borrower or
the Property, or (ii) violate any provision of any indenture, agreement, mortgage, deed of trust,
contract or other instrument to which Borrower or, if applicable, any General Partner is a party or
by which any of their respective property, assets or revenues are bound, or be in conflict with,
result in an acceleration of any obligation or a breach of or constitute (with notice or lapse of
time or both) a default or require any payment or prepayment under, any such indenture, agreement,
mortgage, deed of trust, contract or other instrument, or (iii) result in the creation or
imposition of any lien, except those in favor of Lender as provided in the Loan Documents to which
it is a party.

          (d) Consent. Neither Borrower nor, if applicable, any General Partner, is required to
obtain any consent, approval or authorization from, or to file any declaration or statement with,
any Governmental Authority or other agency in connection with or as a condition to the execution,
delivery or performance of this Security Instrument, the Note or the other Loan Documents which has
not been so obtained or filed.

          (e) Interest Rate. The rate of interest paid under the Note and the method and manner
of the calculation thereof do not violate any usury or other law or applicable Legal Requirement.

          (f) Other Agreements. Borrower is not a party to nor is otherwise bound by any
agreements or instruments which, individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect. Neither Borrower nor, if applicable, any General Partner, is in violation
of its organizational documents or other restriction or any agreement or instrument by which it is
bound, or any judgment, decree, writ, injunction, order or award of any arbitrator, court or
Governmental Authority, or any Legal Requirement, in each case, applicable to Borrower or the
Property, except for such violations that would not, individually or in the aggregate, have a
Material Adverse Effect.

          (g) Maintenance of Existence. (i) Borrower is familiar with the criteria of the
Rating Agency required to qualify as a special-purpose bankruptcy-remote entity and Borrower and,
if applicable, each General Partner at all times since their formation have been duly formed and
existing at all times and at all times have preserved and shall preserve and has kept and shall
keep in full force and effect their existence as a Single Purpose Entity.

     (ii) Borrower and, if applicable, each General Partner, at all times since their
organization have complied, and will continue to comply, with the provisions of its
certificate of limited partnership and agreement of limited partnership or certificate of
incorporation and by-laws or articles of organization, certificate of formation, limited
liability company agreement and operating agreement, as applicable, and the laws of its
jurisdiction of organization relating to partnerships, corporations or limited liability
companies, as applicable.

     (iii) Borrower and, if applicable, each General Partner have done or caused to be done
and will do all things necessary to observe organizational formalities and preserve their
existence and Borrower and, if applicable, each General Partner will not amend, modify or
otherwise change any of the single purpose entity provisions in the

24

 

certificate of limited
partnership and agreement of limited partnership or certificate of incorporation and by-laws
or articles of organization, certificate of formation, limited liability company agreement
and operating agreement, as applicable, or other organizational documents of Borrower and,
if applicable, each General Partner.

     (iv) Borrower and, if applicable, each General Partner, have at all times accurately
maintained, and will continue to accurately maintain, their respective financial statements,
accounting records and other partnership, company or corporate documents separate from those
of any other Person and Borrower and/or, if applicable, General Partner, have filed and will
file its own tax returns or, if Borrower and/or, if applicable, General Partner is part of a
consolidated group for purposes of filing tax returns or if Borrower, and General Partner,
if applicable, are disregarded entities for federal tax purposes, Borrower and, General
Partner, as applicable, may be included in a consolidated tax return provided that Borrower
and, General Partner, if applicable, have been shown and will be shown as separate members
of such group. Borrower and, if applicable, each General Partner have not at any time since
their formation commingled,
and will not commingle, their respective assets with those of any other Person and each
has maintained and will maintain their assets in such a manner such that it will not be
costly or difficult to segregate, ascertain or identify their individual assets from those
of any other Person. Borrower and, if applicable, each General Partner has not permitted
and will not permit any Affiliate independent access to their bank accounts. Borrower and,
if applicable, each General Partner have at all times since their formation accurately
maintained and utilized, and will continue to accurately maintain and utilize, their own
separate bank accounts, payroll and separate books of account, stationery, invoices and
checks.

     (v) Borrower and, if applicable, each General Partner, have at all times paid, and will
continue to pay, their own liabilities from their own separate assets and each has allocated
and charged and shall each allocate and charge fairly and reasonably any overhead which
Borrower and, if applicable, any General Partner, shares with any other Person, including,
without limitation, for office space and services performed by any employee of another
Person.

     (vi) Borrower and, if applicable, each General Partner, have at all times identified
themselves, and will continue to identify themselves, in all dealings with the public, under
their own names and as separate and distinct entities and have corrected and shall correct
any known misunderstanding regarding their status as separate and distinct entities.
Borrower and, if applicable, each General Partner, have not at any time identified
themselves, and will not identify themselves, as being a division of any other Person.

     (vii) Borrower and, if applicable, each General Partner, have been at all times, and
will continue to be, adequately capitalized for the normal obligations reasonably
foreseeable in light of the nature of their respective businesses.

25

 

     (viii) Borrower and, if applicable, each General Partner, (A) have not owned, do not
own and will not own any assets or property other than, with respect to Borrower, the
Property and any incidental personal property necessary for the ownership, management or
operation of the Property and, with respect to General Partner, if applicable, its interest
in Borrower, (B) have not engaged and will not engage in any business other than the
ownership, management and operation of the Property or, with respect to General Partner, if
applicable, its interest in Borrower, (C) have not incurred and will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any obligation), other
than, with respect to Borrower, (X) the Loan and (Y) unsecured trade and operational debt
which (1) is not evidenced by a note, (2) is incurred in the ordinary course of the
operation of the Property, (3) does not exceed in the aggregate four percent (4%) of the
Loan Amount and (4) is, unless being contested in accordance with the terms of this Security
Instrument, paid prior to the earlier to occur of the sixtieth (60th) day after the date
incurred and the date when due, (D) have not pledged and will not pledge their assets for
the benefit of any other Person and (E) have not made and will not make any loans or
advances to any Person (including any Affiliate).

     (ix) Neither Borrower nor, if applicable, any General Partner will change its name or
principal place of business without giving Lender at least thirty (30) days prior written
notice.

     (x) Neither Borrower nor, if applicable, any General Partner has, and neither of such
Persons will have, any subsidiaries (other than, with respect to General Partner, Borrower).

     (xi) Borrower has preserved and maintained and will preserve and maintain its existence
as a Delaware limited liability company and all material rights, privileges, tradenames and
franchises.

     (xii) Neither Borrower, nor, if applicable, any General Partner, has merged or
consolidated with, and except as specifically permitted in this Security Instrument and/or
in any other Loan Documents, neither will merge or consolidate with, and neither has sold
all or substantially all of its respective assets to any Person, and except as specifically
permitted in this Security Instrument and/or in any other Loan Documents, neither will sell
all or substantially all of its respective assets to any Person, and neither has liquidated,
wound up or dissolved itself (or suffered any liquidation, winding up or dissolution) and
neither will liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or
dissolution). Neither Borrower, nor, if applicable, any General Partner has acquired nor
will acquire any business or assets from, or capital stock or other ownership interest of,
or be a party to any acquisition of, any Person.

     (xiii) Borrower and, if applicable, each General Partner, have not at any time since
their formation assumed, guaranteed or held themselves out to be responsible for, and will
not assume, guarantee or hold themselves out to be responsible for the liabilities or the
decisions or actions respecting the daily business affairs of their partners, shareholders
or members or any predecessor company, corporation or partnership, each

26

 

as applicable, any
Affiliates, or any other Persons except as provided in the Loan Documents. Borrower and, if
applicable, each General Partner, have not at any time since their formation acquired, and
will not acquire, obligations or securities of its partners or shareholders, members or any
predecessor company, corporation or partnership, each as applicable, or any Affiliates
except as provided in the Loan Documents. Borrower and, if applicable, each General
Partner, have not at any time since their formation made, and will not make, loans to its
partners, members or shareholders or any predecessor company, corporation or partnership,
each as applicable, or any Affiliates of any of such Persons. Borrower and, if applicable,
each General Partner, have no known contingent liabilities nor do they have any material
financial liabilities under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Person is a party or by which it is otherwise bound
other than under the Loan Documents except as provided in the Loan Documents.

     (xiv) Borrower and, if applicable, each General Partner, have not at any time since
their formation entered into and was not a party to, and, will not enter into or be a party
to, any transaction with its Affiliates, members, partners or shareholders, as applicable,
or any Affiliates thereof except in the ordinary course of business of such
Person on terms which are no less favorable to such Person than would be obtained in a
comparable arm’s length transaction with an unrelated third party.

     (xv) If Borrower is a limited partnership or a limited liability company, the General
Partner shall be a corporation or limited liability company whose sole asset is its interest
in the Borrower and the General Partner will at all times comply, and will cause Borrower to
comply, with each of the representations, warranties, and covenants contained in this
Section 2.02(g) as if such representation, warranty or covenant was made directly by such
General Partner.

     (xvi) Borrower shall at all times cause there to be at least two duly appointed members
of the board of directors or board of managers or other governing board or body, as
applicable (an “Independent Director”), of, if Borrower is a corporation, Borrower,
if Borrower is a limited partnership, of the General Partner, and if Borrower is a limited
liability company, of the General Partner or of Borrower, reasonably satisfactory to Lender
who shall not have been at the time of such individual’s appointment, and may not be or have
been at any time during the preceding five (5) years (A) a shareholder, officer, director,
attorney, counsel, partner, member or employee of Borrower or any of the foregoing Persons
or Affiliates thereof, (other than its capacity as an Independent Director) (B) a customer
or creditor of, or supplier or service provider to, Borrower or any of its shareholders,
partners, members or their Affiliates who derives more than one percent (1%) of its profits
or revenues (excluding any fee paid by any such parties for such director to serve as an
Independent Director) from its activities with Borrower or any of its shareholders,
partners, members or their Affiliates, (C) a member of the immediate family of any Person
referred to in (A) or (B) above or (D) a Person Controlling, Controlled by or under common
Control with any Person referred to in (A) through (C) above. A natural person who satisfies
the foregoing definition other than

27

 

subparagraph (B) shall not be disqualified from serving
as an Independent Director of Borrower, if such individual is an Independent Director
provided by a nationally-recognized company that provides professional independent directors
and/or managers (a “Professional Independent Director”) and other corporate services
in the ordinary course of its business. A natural person who otherwise satisfies the
foregoing definition other than subparagraph (A) by reason of being the independent director
of a “special purpose entity” affiliated with Borrower or an Affiliate thereof shall not be
disqualified from serving as an Independent Director of Borrower if such individual is
either (i) a Professional Independent Director or (ii) the fees that such individual earns
from serving as independent director 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.

     (xvii) Borrower and, if applicable, each General Partner, shall not cause or permit the
board of directors or board of managers or other governing board or body, as applicable, of
Borrower or, if applicable, each General Partner, to take any action which, under the terms
of any certificate of incorporation, by-laws, limited liability company agreement, operating
agreement, limited liability company agreement, certificate of formation or articles of
organization requires a vote of the board of directors or board of managers or other
governing board or body of Borrower, or, if applicable, the General
Partner, unless at the time of such action there shall be at least two members who are
Independent Directors.

     (xviii) Borrower and, if applicable, each General Partner has paid and shall pay the
salaries of their own employees and has maintained and shall maintain a sufficient number of
employees in light of their contemplated business operations.

     (xix) Borrower shall, and shall cause its Affiliates to, and Borrower has and has
caused its Affiliates to, conduct its business so that the assumptions made with respect to
Borrower and, if applicable, each General Partner, in that certain opinion letter relating
to substantive non-consolidation dated the date hereof (the “Insolvency Opinion”)
delivered in connection with the Loan has been and shall be true and correct in all
respects.

     Notwithstanding anything to the contrary contained in this Section 2.02(g), provided Borrower
is a Delaware single member limited liability company which satisfies the single purpose bankruptcy
remote entity requirements of each Rating Agency for a single member limited liability company as
of the date of this Security Instrument, the foregoing provisions of this Section 2.02(g) shall not
apply to the General Partner. Lender hereby acknowledges that as of the date hereof, Section
2.02(g) is not applicable to the General Partner.

     Notwithstanding anything to the contrary contained in this Security Instrument or in the other
Loan Documents, Borrower shall have the right to distribute the proceeds from the Loan to General
Partner and General Partner shall have the right to distribute the proceeds from the Loan to its
sole member.

     (h) No Defaults. No Default or Event of Default has occurred and is continuing or
would occur as a result of the consummation of the transactions contemplated by the Loan

28

 

Documents.
Borrower is not in default in the payment or performance of any of its Contractual Obligations in
any respect.

     (i) Consents and Approvals. Borrower and, if applicable, each General Partner, have
obtained or made all necessary (i) consents, approvals and authorizations, and registrations and
filings of or with all Governmental Authorities and (ii) consents, approvals, waivers and
notifications of partners, stockholders, members, creditors, lessors and other nongovernmental
Persons, in each case, which are required to be obtained or made by Borrower or, if applicable, the
General Partner, in connection with the execution and delivery of, and the performance by Borrower
of its obligations under, the Loan Documents.

     (j) Investment Company Act Status, etc. Borrower is not (i) an “investment company,”
or a company “controlled” by an “investment company,” as such terms are defined in the Investment
Company Act of 1940, as amended, (ii) a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended, or (iii) subject to any
other federal or state law or regulation which purports to restrict or regulate its ability to
borrow money.

     (k) Compliance with Law. Borrower is in compliance in all material respects with all
Legal Requirements to which it or the Property is subject, including, without limitation, all
Environmental Statutes, the Occupational Safety and Health Act of 1970, the Americans with
Disabilities Act and ERISA. No portion of the Property has been or will be purchased, improved,
fixtured, equipped or furnished with proceeds of any illegal activity and, to the best of
Borrower’s knowledge, no illegal activities are being conducted at or from the Property.

     (l) Financial Information. All financial data that has been delivered by Borrower to
Lender (i) is true, complete and correct in all material respects as of the date of such financial
data, (ii) accurately represents the financial condition and results of operations of the Persons
covered thereby as of the date on which the same shall have been furnished, and (iii) has been
prepared in accordance with GAAP (or such other accounting basis as is reasonably acceptable to
Lender) throughout the periods covered thereby. As of the date hereof, neither Borrower nor, if
applicable, any General Partner, has any contingent liability, liability for taxes or other unusual
or forward commitment not reflected in such financial statements delivered to Lender. Since the
date of the last financial statements delivered by Borrower to Lender except as otherwise disclosed
in such financial statements or notes thereto, there has been no change in the assets, liabilities
or financial position of Borrower nor, if applicable, any General Partner, or in the results of
operations of Borrower which would have a Material Adverse Effect. Neither Borrower nor, if
applicable, any General Partner, has incurred any obligation or liability, contingent or otherwise
not reflected in such financial statements which would have a Material Adverse Effect.

     (m) Transaction Brokerage Fees. Borrower has not dealt with any financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with the transactions
contemplated by this Security Instrument. All brokerage fees, commissions and other expenses
payable in connection with the transactions contemplated by the Loan Documents have been

29

 

paid in
full by Borrower contemporaneously with the execution of the Loan Documents and the funding of the
Loan. Borrower hereby agrees to indemnify and hold Lender harmless for, from and against any and
all claims, liabilities, costs and expenses of any kind in any way relating to or arising from (i)
a claim by any Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein or (ii) any breach of the foregoing representation. The
provisions of this subsection (m) shall survive the repayment of the Debt.

     (n) Federal Reserve Regulations. No part of the proceeds of the Loan will be used for
the purpose of “purchasing” or “carrying” any “margin stock” within the meaning of Regulations T, U
or X of the Board of Governors of the Federal Reserve System or for any other purpose which would
be inconsistent with such Regulations T, U or X or any other Regulations of such Board of
Governors, or for any purposes prohibited by Legal Requirements or by the terms and conditions of
the Loan Documents.

     (o) Pending Litigation. There are no actions, suits or proceedings pending or, to the
best knowledge of Borrower, threatened against or affecting Borrower or the Property in any court
or before any Governmental Authority which if adversely determined either individually or
collectively has or is reasonably likely to have a Material Adverse Effect.

     (p) Solvency; No Bankruptcy. Each of Borrower and, if applicable, the General
Partner, (i) is and has at all times been Solvent and will remain Solvent immediately upon the
consummation of the transactions contemplated by the Loan Documents and (ii) is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment for the benefit of
creditors and is not contemplating the filing of a petition under any state or federal bankruptcy
or insolvency laws or the liquidation of all or a major portion of such Person’s assets or property
and Borrower has no knowledge of any Person contemplating the filing of any such petition against
it or, if applicable, the General Partner. None of the transactions contemplated hereby will be or
have been made with an intent to hinder, delay or defraud any present or future creditors of
Borrower and Borrower has received reasonably equivalent value in exchange for its obligations
under the Loan Documents. Borrower’s assets do not, and immediately upon consummation of the
transaction contemplated in the Loan Documents will not, constitute unreasonably small capital to
carry out its business as presently conducted or as proposed to be conducted. Borrower does not
intend to, nor believes that it will, incur debts and liabilities beyond its ability to pay such
debts as they may mature.

     (q) Use of Proceeds. The proceeds of the Loan shall be used for the business purpose
of Borrower and no portion of the proceeds of the Loan will be used for family, personal,
agricultural or household use.

     (r) Tax Filings. Borrower and, if applicable, each General Partner, have filed all
federal, state and local tax returns required to be filed and have paid or made adequate provision
for the payment of all federal, state and local taxes, charges and assessments payable by Borrower
and, if applicable, the General Partners. Borrower and, if applicable, the General Partners,
believe that their respective tax returns properly reflect the income and taxes of Borrower and
said General Partner, if any, for the periods covered thereby, subject only to

30

 

reasonable
adjustments required by the Internal Revenue Service or other applicable tax authority upon audit.

     (s) Not Foreign Person. Borrower is not a “foreign person” within the meaning of
§1445(f)(3) of the Code.

     (t) ERISA. (i) The assets of Borrower are not and will not become treated as “plan
assets”, whether by operation of law or under regulations promulgated under ERISA. If any Person
having a legal or beneficial ownership interest in Borrower is using (or is deemed under ERISA to
be using) “plan assets”, Borrower will qualify as a “real estate operating company” within the
meaning of 29 C.F.R. §2510.3-101(e) at all times that the Loan is outstanding. Each Plan and
Welfare Plan, and, to the knowledge of Borrower, each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material respects in compliance with, its
terms and the applicable provisions of ERISA, the Code and any other applicable Legal Requirement,
and no event or condition has occurred and is continuing as to which Borrower would be under an
obligation to furnish a report to Lender under clause (ii)(A) of this Section. Other than an
application for a favorable determination letter with respect to a Plan, there are no pending
issues or claims before the Internal Revenue Service, the United States Department of Labor or any
court of competent jurisdiction related to any Plan or Welfare Plan under which Borrower or any
ERISA Affiliate, directly or indirectly (through an
indemnification agreement or otherwise), could be subject to any material risk of liability
under Section 409 or 502(i) of ERISA or Section 4975 of the Code. No Welfare Plan provides or will
provide benefits, including, without limitation, death or medical benefits (whether or not insured)
with respect to any current or former employee of Borrower or any ERISA Affiliate beyond his or her
retirement or other termination of service other than (A) coverage mandated by applicable law, (B)
death or disability benefits that have been fully provided for by fully paid up insurance or (C)
severance benefits.

     (ii) Borrower will furnish to Lender as soon as possible, and in any event within ten
(10) days after Borrower knows or has reason to believe that any of the events or conditions
specified below with respect to any Plan, Welfare Plan or Multiemployer Plan has occurred or
exists, an Officer’s Certificate setting forth details respecting such event or condition
and the action, if any, that Borrower or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with or given to PBGC (or
any other relevant Governmental Authority)) by Borrower or an ERISA Affiliate with respect
to such event or condition, if such report or notice is required to be filed with the PBGC
or any other relevant Governmental Authority:

     (A) any reportable event, as defined in Section 4043 of ERISA and the
regulations issued thereunder, with respect to a Plan, as to which PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA that it be notified
within thirty (30) days of the occurrence of such event (provided that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA, including, without limitation, the failure to make on or before its due date
a required installment under Section 412(m) of the Code and of

31

 

Section 302(e) of
ERISA, shall be a reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code), and any request for a waiver under
Section 412(d) of the Code for any Plan;

     (B) the distribution under Section 4041 of ERISA of a notice of intent to
terminate any Plan or any action taken by Borrower or an ERISA Affiliate to
terminate any Plan;

     (C) the institution by PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by Borrower or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by PBGC with respect to such Multiemployer Plan;

     (D) the complete or partial withdrawal from a Multiemployer Plan by Borrower or
any ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a result of a purchaser
default) or the receipt by Borrower or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA;

     (E) the institution of a proceeding by a fiduciary of any Multiemployer Plan
against Borrower or any ERISA Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within thirty (30) days;

     (F) the adoption of an amendment to any Plan that, pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of
tax-exempt status of the trust of which such Plan is a part if Borrower or an ERISA
Affiliate fails to timely provide security to the Plan in accordance with the
provisions of said Sections; or

     (G) the imposition of a lien or a security interest in connection with a Plan.

     (iii) Borrower shall not knowingly engage in or permit any transaction in connection
with which Borrower or any ERISA Affiliate could be subject to either a civil penalty or tax
assessed pursuant to Section 502(i) or 502(l) of ERISA or Section 4975 of the Code, permit
any Welfare Plan to provide benefits, including without limitation, medical benefits
(whether or not insured), with respect to any current or former employee of Borrower or any
ERISA Affiliate beyond his or her retirement or other termination of service other than (A)
coverage mandated by applicable law, (B) death or disability benefits that have been fully
provided for by paid up insurance or otherwise or (C) severance benefits, permit the assets
of Borrower to become “plan assets”, whether by operation of law or under regulations
promulgated under ERISA or adopt, amend (except as may be required by applicable law) or
increase the amount of any benefit or amount

32

 

payable under, or permit any ERISA Affiliate to
adopt, amend (except as may be required by applicable law) or increase the amount of any
benefit or amount payable under, any employee benefit plan (including, without limitation,
any employee welfare benefit plan) or other plan, policy or arrangement maintained by
Borrower, except for adoptions, amendments or normal increases in the ordinary course of
business consistent with past practice that, in the aggregate, do not result in a material
increase in benefits expense or liability to Borrower or any ERISA Affiliate; provided,
however, that in the case of ERISA Affiliates of the Borrower, the prohibition set forth in
this subsection 2.02(t)(iii) shall apply only to plans covered under Title IV of ERISA or
Section 412 of the Code.

     (u) Labor Matters. No organized work stoppage or labor strike is pending or
threatened by employees or other laborers at the Property and neither Borrower nor Manager (i) is
involved in or to Borrower’s knowledge, threatened with any labor dispute, grievance or litigation
relating to labor matters involving any employees and other laborers at the Property, including,
without limitation, 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)
to Borrower’s knowledge, has engaged in any unfair labor practices within the meaning of the
National Labor Relations Act or the Railway Labor Act; or (iii) except as disclosed to Lender, is a
party to, or bound by, any collective bargaining agreement or union contract with respect to
employees and other laborers at the Property and no such agreement or contract is currently being
negotiated by Borrower, Manager or any of their Affiliates.

     (v) Borrower’s Legal Status. Borrower’s exact legal name that is indicated on the
signature page hereto, organizational identification number and place of business or, if more than
one, its chief executive office, as well as Borrower’s mailing address, if different, which were
identified by Borrower to Lender and contained in this Security Instrument, are true, accurate and
complete. Borrower (i) will not change its name, its place of business or, if more than one place
of business, its chief executive office, or its mailing address or organizational identification
number if it has one without giving Lender at least thirty (30) days prior written notice of such
change, (ii) if Borrower does not have an organizational identification number and later obtains
one, Borrower shall promptly notify Lender of such organizational identification number and (iii)
will not change its type of organization, jurisdiction of organization or other legal structure.

     (w) Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws. (i) None
of Borrower, General Partner, or any Person who owns any equity interest (other than shareholders
in the publicly traded stock of Grubb & Ellis Company which do not individually own five percent
(5%) or more of the stock thereof) in or Controls Borrower or any General Partner is identified on
the OFAC List or otherwise qualifies as a Prohibited Person, and Borrower has implemented
procedures, approved by Borrower and, if applicable, General Partner, to ensure that no Person who
now or hereafter owns an equity interest in Borrower or General Partner is a Prohibited Person or
Controlled by a Prohibited Person, (ii) no proceeds of the Loan will be used to fund any operations
in, finance any investments or activities in or make any payments to, Prohibited Persons, and (iii)
none of Borrower or General Partner is in violation of any Legal Requirements relating to
anti-money laundering or anti-terrorism, including, without limitation, Legal Requirements related
to transacting business with Prohibited

33

 

Persons or the requirements of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001, U.S. Public Law 107-56, and the related regulations issued thereunder, including
temporary regulations, all as amended from time to time. No tenant at the Property currently is
identified on the OFAC List or otherwise qualifies as a Prohibited Person, and, to the best of
Borrower’s knowledge, no tenant at the Property is owned or Controlled by a Prohibited Person.
Borrower has determined that Manager has implemented procedures, approved by Borrower, to ensure
that no tenant at the Property is a Prohibited Person or owned or Controlled by a Prohibited
Person.

     Section 2.03. Further Acts, etc. Borrower will, at the cost of Borrower, and without
expense to Lender, do, execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, mortgages or deeds of trust, as applicable, assignments, notices of assignments,
transfers and assurances as Lender shall, from time to time, reasonably require for the better
assuring, conveying, assigning, transferring, and confirming unto Lender the property and rights
hereby mortgaged, given, granted, bargained, sold, alienated, enfeoffed, conveyed, confirmed,
pledged, assigned and hypothecated, or which Borrower may be or may hereafter become bound to
convey or assign to Lender, or for carrying out or facilitating the performance of the terms of
this Security Instrument or for filing, registering or recording this Security Instrument and,
within five (5) Business Days of written demand, will execute and deliver and hereby authorizes
Lender to execute in the name of Borrower or without the signature of Borrower to the extent Lender
may lawfully do so, one or more financing statements, chattel mortgages or comparable security
instruments to evidence more effectively the lien hereof upon the Property. Borrower grants to
Lender an irrevocable power of attorney coupled with an interest for the purpose of
protecting, perfecting, preserving and realizing upon the interests granted pursuant to this
Security Instrument and to effect the intent hereof, all as fully and effectually as Borrower might
or could do; and Borrower hereby ratifies all that Lender shall lawfully do or cause to be done by
virtue hereof; provided, however, that Lender shall not exercise such power of attorney unless and
until Borrower fails to take the required action within the five (5) Business Day time period
stated above unless the failure to so exercise, could, in Lender’s reasonable judgment, result in a
Material Adverse Effect. Upon (a) receipt of an affidavit of an officer of Lender as to the loss,
theft, destruction or mutilation of the Note or any other Loan Document which is not of public
record, (b) receipt of an indemnity of Lender related to losses resulting solely from the issuance
of a replacement note or other applicable Loan Document or any claims for losses resulting from a
claim by a party in possession of a note previously deemed lost and (c) in the case of any such
mutilation, upon surrender and cancellation of such Note or other applicable Loan Document,
Borrower will issue, in lieu thereof, a replacement Note or other applicable Loan Document, dated
the date of such lost, stolen, destroyed or mutilated Note or other Loan Document in the same
principal amount thereof and otherwise of like tenor.

     Section 2.04. Recording of Security Instrument, etc. Borrower forthwith upon the
execution and delivery of this Security Instrument and thereafter, from time to time, will cause
this Security Instrument, and any security instrument creating a lien or security interest or
evidencing the lien hereof upon the Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully protect the lien or security interest hereof
upon,

34

 

and the interest of Lender in, the Property. Borrower will pay all filing, registration or
recording fees, and all expenses incident to the preparation, execution and acknowledgment of this
Security Instrument, any mortgage or deed of trust, as applicable, supplemental hereto, any
security instrument with respect to the Property and any instrument of further assurance, and all
federal, state, county and municipal, taxes, duties, imposts, assessments and charges arising out
of or in connection with the execution and delivery of this Security Instrument, any mortgage or
deed of trust, as applicable, supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, except where prohibited by law to do so, in which
event Lender may declare the Debt to be immediately due and payable. Borrower shall hold harmless
and indemnify Lender, and its successors and assigns, against any liability incurred as a result of
the imposition of any tax on the making and recording of this Security Instrument.

     Section 2.05. Representations, Warranties and Covenants Relating to the Property.
Borrower represents and warrants to and covenants with Lender with respect to the Property as
follows:

     (a) Lien Priority. This Security Instrument is a valid and enforceable first lien on
the Property, free and clear of all encumbrances and liens having priority over the lien of this
Security Instrument, except for the items set forth as exceptions to or subordinate matters in the
title insurance policy insuring the lien of this Security Instrument, none of which, individually
or in the aggregate, materially interfere with the benefits of the security intended to be provided
by this Security Instrument (other than taxes and/or assessments not yet due and payable),
materially affect the value or marketability of the Property, impair the use or operation of the
Property for the use currently being made thereof or impair Borrower’s ability to pay its
obligations in a timely manner (such items being the “Permitted Encumbrances”).

     (b) Title. Borrower has, subject only to the Permitted Encumbrances, good, insurable
and marketable fee simple title to the Premises, Improvements and Fixtures (collectively, the
“Realty”) and to all easements and rights benefiting the Realty and has the right, power
and authority to mortgage, encumber, give, grant, bargain, sell, alien, enfeoff, convey, confirm,
pledge, assign, and hypothecate the Property. Borrower will preserve its interest in and title to
the Property and will forever warrant and defend the same to Lender against any and all claims made
by, through or under Borrower and will forever warrant and defend the validity and priority of the
lien and security interest created herein against the claims of all Persons whomsoever claiming by,
through or under Borrower. The foregoing warranty of title shall survive the foreclosure of this
Security Instrument and shall inure to the benefit of and be enforceable by Lender in the event
Lender acquires title to the Property pursuant to any foreclosure. In addition, there are no
outstanding options or rights of first refusal to purchase the Property or Borrower’s ownership
thereof.

     (c) Taxes and Impositions. Subject to Borrower’s right to contest as set forth in
this Security Instrument, all taxes and other Impositions and governmental assessments due and
owing in respect of, and affecting, the Property have been paid. Borrower has paid all Impositions
which constitute special governmental assessments in full, except for those assessments which are
permitted by applicable Legal Requirements to be paid in installments, in

35

 

which case all
installments which are due and payable have been paid in full. 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.

     (d) Casualty; Flood Zone. The Realty is free and clear of any damage, destruction or
casualty (whether or not covered by insurance) that would materially affect the value of the Realty
or the use for which the Realty was intended, to Borrower’s best knowledge, there exists no
structural or other material defects or damages in or to the Property and Borrower has not received
any written notice from any insurance company or bonding company of any material defect or
inadequacies in the Property, or any part thereof, which would materially and 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. No portion of the
Premises is located in an “area of special flood hazard,” as that term is defined in the
regulations of the Federal Insurance Administration, Department of Housing and Urban Development,
under the National Flood Insurance Act of 1968, as amended (24 CFR § 1909.1) or Borrower has
obtained the flood insurance required by Section 3.01(a)(vi) hereof. The Premises either does not
lie in a 100 year flood plain that has been identified by the Secretary of Housing and Urban
Development or any other Governmental Authority or, if it does, Borrower has obtained the flood
insurance required by Section 3.01(a)(vi) hereof.

     (e) Completion; Encroachment. All Improvements necessary for the efficient use and
operation of the Premises, including, without limitation, all Improvements which were included for
purposes of determining the appraised value of the Property in the Appraisal, have been
completed and, except as set forth in the survey of the Premises delivered to Lender in
connection with the origination of the Loan, none of said Improvements lie outside the boundaries
and building restriction lines of the Premises. Except as set forth in the title insurance policy
insuring the lien of this Security Instrument, no improvements on adjoining properties encroach
upon the Premises.

     (f) Separate Lot. The Premises are taxed separately without regard to any other real
estate and constitute a legally subdivided lot under all applicable Legal Requirements (or, if not
subdivided, no subdivision or platting of the Premises is required under applicable Legal
Requirements), and for all purposes may be mortgaged, encumbered, conveyed or otherwise dealt with
as an independent parcel. The Property does not benefit from any tax abatement or exemption.

     (g) Use. The existence of all Improvements, the present use and operation thereof and
the access of the Premises and the Improvements to all of the utilities and other items referred to
in paragraph (k) below are in compliance in all material respects with all Leases affecting the
Property and all applicable Legal Requirements, including, without limitation, Environmental
Statutes, Development Laws and Use Requirements. Borrower has not received any written notice from
any Governmental Authority alleging any uncured violation relating to the Property of any
applicable Legal Requirements.

36

 

     (h) Licenses and Permits. Borrower currently holds and will continue to hold all
certificates of occupancy, licenses, registrations, permits, consents, franchises and approvals of
any Governmental Authority or any other Person which are material for the lawful occupancy and
operation of the Realty or which are material to the ownership or operation of the Property or the
conduct of Borrower’s business. All such certificates of occupancy, licenses, registrations,
permits, consents, franchises and approvals are current and in full force and effect.

     (i) Intentionally Omitted.

     (j) Property Proceedings. There are no actions, suits or proceedings pending or to
Borrower’s knowledge threatened in any court or before any Governmental Authority or arbitration
board or tribunal (i) relating to (A) the zoning of the Premises or any part thereof, (B) any
certificates of occupancy, licenses, registrations, permits, consents or approvals issued with
respect to the Property or any part thereof, (C) except as specifically disclosed in writing to
Lender by Borrower, the condemnation of the Property or any part thereof, or (D) the condemnation
or relocation of any roadways abutting the Premises required for access or the denial or limitation
of access to the Premises or any part thereof from any point of access to the Premises, (ii)
asserting that (A) any such zoning, certificates of occupancy, licenses, registrations, permits,
consents and/or approvals do not permit the operation of any material portion of the Realty as
presently being conducted, (B) any material improvements located on the Property or any part
thereof cannot be located thereon or operated with their intended use or (C) the operation of the
Property or any part thereof is in violation in any material respect of any Environmental Statutes,
Development Laws or other Legal Requirements or Space Leases or Property Agreements or (iii) which
might (A) affect the validity or priority of any Loan Document or (B) have a Material Adverse
Effect. Borrower is not aware of any facts or
circumstances which may give rise to any actions, suits or proceedings described in the
preceding sentence, except as otherwise previously disclosed in writing to Lender.

     (k) Utilities. The Premises has all necessary legal access to water, gas and
electrical supply, storm and sanitary sewerage facilities, other required public utilities (with
respect to each of the aforementioned items, by means of either a direct connection to the source
of such utilities or through connections available on publicly dedicated roadways directly abutting
the Premises or through permanent insurable easements benefiting the Premises), fire and police
protection, parking, and means of direct access between the Premises and public highways over
recognized curb cuts (or such access to public highways is through private roadways which may be
used for ingress and egress pursuant to permanent insurable easements).

     (l) Mechanics’ Liens. The Property is free and clear of any mechanics’ liens or liens
in the nature thereof, and no rights are outstanding that under law could give rise to any such
liens, any of which liens are or may be prior to, or equal with, the lien of this Security
Instrument, except those which are insured against by the title insurance policy insuring the lien
of this Security Instrument.

     (m) Title Insurance. Lender has received a lender’s title insurance policy insuring
this Security Instrument as a first lien on the Realty subject only to Permitted Encumbrances.

37

 

     (n) Insurance. The Property is insured in accordance with the requirements set forth
in Article III hereof.

     (o) Space Leases.

     (i) Borrower has delivered a true, correct and complete schedule of all Space Leases as
of the date hereof, which accurately and completely sets forth in all material respects, for
each such Space Lease, the following (collectively, the “Rent Roll”): the name and
address of the tenant; the lease expiration date; the base rent and percentage rent payable;
all additional rent and pass-through obligations; and the security deposit held thereunder.

     (ii) Each Space Lease constitutes the legal, valid and binding obligation of Borrower
and, to the knowledge of Borrower, is enforceable against the tenant thereof. Other than as
expressly disclosed to Lender on the rent roll for the Improvements or the tenant estoppel
certificates delivered to Lender in connection with origination of the Loan, no default
exists, or with the passing of time or the giving of notice would exist, (A) under any Major
Space Lease or (B) under any other Space Leases which would, in the aggregate, have a
Material Adverse Effect.

     (iii) Other than as expressly disclosed to Lender on the rent roll for the Improvements
or the tenant estoppel certificates delivered to Lender in connection with origination of
the Loan, no tenant under any Space Lease has, as of the date hereof, paid Rent more than
thirty (30) days in advance, and the Rents under such Space Leases have not been waived,
released, or otherwise discharged or compromised.

     (iv) Other than as expressly disclosed to Lender on the rent roll for the Improvements
or the tenant estoppel certificates delivered to Lender in connection with origination of
the Loan, all work to be performed by Borrower under the Space Leases has been substantially
performed, all contributions to be made by Borrower to the tenants thereunder have been made
except for any held-back amounts, and all other conditions precedent to each such tenant’s
obligations thereunder have been satisfied.

     (v) Except as previously disclosed to Lender in writing, there are no options to
terminate any Space Lease.

     (vi) Other than as expressly disclosed to Lender on the rent roll for the Improvements
or the tenant estoppel certificates delivered to Lender in connection with origination of
the Loan, each tenant under a Major Space Lease has entered into occupancy of the demised
premises to the extent required under the terms of its Major Space Lease, and each such
tenant is open and conducting business with the public in the demised premises. To the
knowledge of Borrower, other than as expressly disclosed to Lender on the rent roll for the
Improvements or the tenant estoppel certificates delivered to Lender in connection with
origination of the Loan, each tenant under a Lease other than a Major Space Lease has
entered into occupancy of its demised premises under its

38

 

Lease to the extent required under
the terms of its Lease and each such tenant is open and conducting business with the public
in the demised premises.

     (vii) Borrower has delivered to Lender true, correct and complete copies of all Space
Leases described in the Rent Roll.

     (viii) Each Space Lease is in full force and effect and (except as disclosed on the
Rent Roll or in the tenant estoppel certificates delivered to Lender in connection with
origination of the Loan) has not been assigned, modified, supplemented or amended in any
way.

     (ix) To Borrower’s knowledge, each tenant under each Space Lease is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment for the
benefit of creditors.

     (x) No Space Lease provides any party with the right to obtain a lien or encumbrance
upon the Property superior to the lien of this Security Instrument.

     (p) Property Agreements.

     (i) Borrower has delivered to Lender true, correct and complete copies of all Property
Agreements.

     (ii) No Property Agreement provides any party with the right to obtain a lien or
encumbrance upon the Property superior to the lien of this Security Instrument.

     (iii) No default exists or with the passing of time or the giving of notice or both
would exist under any Property Agreement which would, individually or in the aggregate, have
a Material Adverse Effect.

     (iv) Borrower has not received or given any written communication which alleges that a
default exists or, with the giving of notice or the lapse of time, or both, would exist
under the provisions of any Property Agreement.

     (v) No condition exists whereby Borrower or any future owner of the Property may be
required to purchase any other parcel of land which is subject to any Property Agreement or
which gives any Person a right to purchase, or right of first refusal with respect to, the
Property other than set forth in the Space Leases.

     (vi) To the best knowledge of Borrower, no offset or any right of offset exists
respecting continued contributions to be made by any party to any Property Agreement except
as expressly set forth therein. Except as previously disclosed to Lender in writing, no
material exclusions or restrictions on the utilization, leasing or improvement of the
Property (including non-compete agreements) exists in any Property Agreement.

     (vii) All “pre-opening” requirements contained in all Property Agreements (including,
but not limited to, all off-site and on-site construction requirements), if any,

39

 

have been
fulfilled, and, to the best of Borrower’s knowledge, no condition now exists whereby any
party to any such Property Agreement could refuse to honor its obligations thereunder.

     (viii) All work, if any, to be performed by Borrower under each of the Property
Agreements has been substantially performed, all contributions to be made by Borrower to any
party to such Property Agreements have been made, and all other conditions to such party’s
obligations thereunder have been satisfied.

     (q) Personal Property. Borrower has delivered to Lender a true, correct and complete
schedule of all personal property, if any, owned by Borrower and located upon the Property or used
in connection with the use or operation of the Realty and Borrower represents that it has good and
marketable title to all such personal property, free and clear of any liens, except for liens
created under the Loan Documents and liens which describe the equipment and other personal property
owned by tenants.

     (r) Leasing Brokerage and Management Fees. Except as previously disclosed to Lender
in writing, there are no brokerage fees or commissions payable by Borrower with respect to the
leasing of space at the Property and there are no management fees payable by Borrower with respect
to the management of the Property.

     (s) Security Deposits. All cash security deposits with respect to the Property on the
date hereof have been transferred to the Security Deposit Account on the date hereof, and Borrower
is in compliance with all Legal Requirements relating to such security deposits as to which failure
to comply might, individually or in the aggregate, have a Material Adverse Effect.

     (t) Appraisal. Borrower has no knowledge that any of the facts or assumptions on
which the Appraisal was based are false or incomplete in any material respect and has no
information that would reasonably suggest that the fair market value determined in the Appraisal
does not reflect the actual fair market value of the Property.

     (u) Representations Generally. The representations and warranties contained in this
Security Instrument, and the review and inquiry made on behalf of Borrower therefor, have all been
made by Persons having the requisite expertise and knowledge to provide such representations and
warranties. No representation, warranty or statement of fact made by or on behalf of Borrower in
this Security Instrument or in any certificate, document or schedule furnished to Lender pursuant
hereto, contains any untrue statement of a material fact or intentionally omits to state any
material fact necessary to make statements contained therein or herein not misleading (which may be
to Borrower’s best knowledge where so provided herein). There are no facts presently known to
Borrower which have intentionally not been disclosed to Lender which would, individually or in the
aggregate, have a Material Adverse Effect nor as far as Borrower can foresee might, individually or
in the aggregate, have a Material Adverse Effect.

     Section 2.06. Removal of Lien. (a) Borrower shall, at its expense, maintain this
Security Instrument as a first lien on the Property and shall keep the Property free and clear of
all liens and encumbrances of any kind and nature other than the Permitted Encumbrances. Borrower

40

 

shall, within twenty (20) days following the filing thereof, promptly discharge of record, by bond
or otherwise, any such liens and, promptly upon request by Lender, shall deliver to Lender evidence
reasonably satisfactory to Lender of the discharge thereof.

     (b) Without limitation to the provisions of Section 2.06(a) hereof, Borrower shall (i) pay,
from time to time when the same shall become due, all claims and demands of mechanics, materialmen,
laborers, and others which, if unpaid, might result in, or permit the creation of, a lien on the
Property or any part thereof, (ii) cause to be removed of record (by payment or posting of bond or
settlement or otherwise) any mechanics’, materialmens’, laborers’ or other lien on the Property, or
any part thereof, or on the revenues, rents, issues, income or profit arising therefrom, and (iii)
in general, do or cause to be done, without expense to Lender, everything reasonably necessary to
preserve in full the lien of this Security Instrument. If Borrower fails to comply with the
requirements of this Section 2.06(b), then, upon five (5) Business Days’ prior notice to Borrower,
Lender may, but shall not be obligated to, pay any such lien, and Borrower shall, within five (5)
Business Days after Lender’s demand therefor, reimburse Lender for all sums so expended, together
with interest thereon at the Default Rate from the date advanced, all of which shall be deemed part
of the Debt. Nothing contained herein shall be deemed a consent or request of Lender, express or
implied, by inference or otherwise, to the performance of any alteration, repair or other work by
any contractor, subcontractor or laborer or the furnishing of any materials by any materialmen in
connection therewith.

     (c) Notwithstanding the foregoing, Borrower may contest any lien (other than a lien relating
to non-payment of Impositions, the contest of which shall be governed by Section 4.04 hereof) of
the type set forth in subparagraph (b)(ii) of this Section 2.06 provided that, following prior
notice to Lender (i) Borrower is contesting the validity of such lien with due diligence and in
good faith and by appropriate proceedings, without cost or expense to Lender or any of its
agents, employees, officers, or directors, (ii) Borrower shall preclude the collection of, or
other realization upon, any contested amount from the Property or any revenues from or interest in
the Property, (iii) neither the Property nor any part thereof nor interest therein, shall be in any
danger of being sold, forfeited or lost by reason of such contest by Borrower, (iv) such contest by
Borrower shall not affect the ownership, use or occupancy of the Property, (v) such contest by
Borrower shall not subject Lender or Borrower to the risk of civil or criminal liability (other
than the civil liability of Borrower for the amount of the lien in question), (vi) such lien is
subordinate to the lien of this Security Instrument, (vii) Borrower has not consented to such lien,
(viii) Borrower has given Lender prompt notice of the filing of such lien and the bonding thereof
by Borrower and, upon request by Lender from time to time, notice of the status of such contest by
Borrower and/or confirmation of the continuing satisfaction of the conditions set forth in this
Section 2.06(c), (ix) Borrower shall promptly pay the obligation secured by such lien upon a final
determination of Borrower’s liability therefor, and (x) Borrower shall deliver to Lender cash, a
bond or other security acceptable to Lender equal to 125% of the contested amount pursuant to
collateral arrangements reasonably satisfactory to Lender.

     Section 2.07. Cost of Defending and Upholding this Security Instrument Lien. If any
action or proceeding is commenced to which Lender is made a party relating to the Loan Documents
and/or the Property or Lender’s interest therein or in which it becomes necessary to

41

 

defend or
uphold the lien of this Security Instrument or any other Loan Document, Borrower shall, on demand,
reimburse Lender for all expenses (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Lender in connection therewith, and such sum, together with interest
thereon at the Default Rate from and after such demand until fully paid, shall constitute a part of
the Debt.

     Section 2.08. Use of the Property. Borrower will use, or cause to be used, the
Property for such use as is permitted pursuant to applicable Legal Requirements including, without
limitation, under the certificate of occupancy applicable to the Property, and which is required by
the Loan Documents. Borrower shall not suffer or permit the Property or any portion thereof to be
used by the public, any tenant, or any Person not subject to a Lease, in a manner as is reasonably
likely to impair Borrower’s title to the Property, or in such manner as may give rise to a claim or
claims of adverse usage or adverse possession by the public, or of implied dedication of the
Property or any part thereof.

     Section 2.09. Financial Reports. (a) Borrower will keep and maintain or will cause to
be kept and maintained on a Fiscal Year basis, in accordance with GAAP (or such other accounting
basis reasonably acceptable to Lender) consistently applied, proper and accurate books, tax
returns, records and accounts reflecting all of the financial affairs of Borrower. Lender shall
have the right from time to time at all times during normal business hours upon reasonable notice
to examine such books, tax returns, records and accounts at the office of Borrower or other Person
maintaining such books, tax returns, records and accounts and prior to the occurrence of an Event
of Default, at Lender’s sole cost and expense and after an Event of Default, at Borrower’s sole
cost and expense, to make such copies or extracts thereof as Lender shall desire. After the
occurrence of an Event of Default and during the continuance thereof, Borrower shall pay any
reasonable costs and expenses incurred by Lender to examine Borrower’s accounting
records with respect to the Property, as Lender shall determine to be necessary or appropriate
in the protection of Lender’s interest.

     (b) Borrower will furnish Lender (i) annually, within one hundred twenty (120) days following
the end of each Fiscal Year of Borrower and (ii) on a quarterly basis, within sixty (60) days
following the end of each fiscal quarter of Borrower, with a complete copy of Borrower’s financial
statement consistently applied covering (i) all of the financial affairs of Borrower and (ii) the
operation of the Property for such Fiscal Year or fiscal quarters, as applicable, and containing a
statement of revenues and expenses, a statement of assets and liabilities and a statement of
Borrower’s equity. Each annual financial statement shall be audited by an Independent certified
public accountant that is reasonably acceptable to Lender in accordance with GAAP (or such other
accounting basis reasonably acceptable to Lender). Together with the financial statements required
to be furnished pursuant to this Section 2.09(b), Borrower shall furnish to Lender (A) an Officer’s
Certificate certifying as of the date thereof (1) that the financial statements accurately
represent the results of operations and financial condition of Borrower and the Property all in
accordance with GAAP (or such other accounting basis reasonably acceptable to Lender) consistently
applied, and (B) together with the financial statements delivered pursuant to Section 2.09(b)(ii)
above, a statement showing (1) Pro-Forma Net Operating Income for the subsequent twelve (12) month
period adjusted to reflect the

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Adjusted Net Cash Flow (subject to verification by Lender in its
reasonable discretion) and (2) the calculation of the Debt Service Coverage.

     (c) When requested by Lender, Borrower will furnish Lender monthly, within twenty (20) days
following the end of each month, with a true, complete and correct cash flow statement with respect
to the Property in the form attached hereto as Exhibit C and made a part hereof, showing (i) all
cash receipts of any kind whatsoever and all cash payments and disbursements, (ii) year-to-date
summaries of such cash receipts, payments and disbursements, and (iii) Pro-Forma Net Operating
Income for the subsequent twelve (12) month period adjusted to reflect the Adjusted Net Cash Flow
(subject to the verification by Lender in its reasonable discretion) and a calculation of the Debt
Service Coverage, together with a certification of Manager stating that such cash flow statement is
true, complete and correct and a list of all litigation and proceedings affecting Borrower or the
Property in which the amount involved is $250,000 or more, if not covered by insurance (or
$1,000,000 or more whether or not covered by insurance).

     (d) When requested by Lender, Borrower will furnish Lender monthly, within twenty (20) days
following the end of each month, with a certification of Manager stating that all Operating
Expenses with respect to the Property which had accrued as of the last day of the month preceding
the delivery of the cash flow statement referred to in clause (c) above have been fully paid or
otherwise reserved for by Manager (any such certification or any certification furnished by a
Manager pursuant to clause (c) above, a “Manager Certification”).

     (e) Borrower will furnish Lender annually, within twenty (20) days following the end of each
year but, provided no Event of Default exists, not more than four (4) times per calendar year, and
within twenty (20) days following receipt of such request therefor, with a true, complete and
correct rent roll for the Property, including a list of which tenants are in default under their
respective Leases, dated as of the date of Lender’s request, identifying each tenant,
the monthly rent and additional rent, if any, payable by such tenant, the expiration date of
such tenant’s Lease, the security deposit, if any, held by Borrower under the Lease, the space
covered by the Lease, each tenant that has filed a bankruptcy, insolvency, or reorganization
proceeding since delivery of the last such rent roll, and the arrearages for such tenant, if any,
and, if requested by Lender, a summary of the material terms of the Leases, including, without
limitation, the dates of occupancy, the dates of expiration, any Rent concessions, work obligations
or other inducements granted to the tenants thereunder, and any renewal options, and such rent roll
shall be accompanied by an Officer’s Certificate, dated as of the date of the delivery of such rent
roll, certifying that such rent roll is true, correct and complete in all material respects as of
its date.

     (f) Borrower shall furnish to Lender, within thirty (30) days after Lender’s request therefor,
with such further detailed information with respect to the operation of the Property and the
financial affairs of Borrower as may be reasonably requested by Lender.

     (g) Intentionally omitted.

     (h) Borrower will furnish Lender annually, within ninety (90) days after the end of each
Fiscal Year, with a report setting forth (i) the Net Operating Income for such Fiscal Year,

43

 

(ii)
the average occupancy rate of the Property during such Fiscal Year, (iii) the capital repairs,
replacements and improvements performed at the Property during such Fiscal Year and the aggregate
Recurring Replacement Expenditures made in connection therewith, and (iv) the balance contained in
each of the Escrow Accounts as of the end of such Fiscal Year (which balance Lender shall provide
upon Borrower’s written request therefor).

     (i) Intentionally omitted.

     (j) Borrower shall submit to Lender for Lender’s written approval an Annual Budget not later
than sixty (60) days prior to the commencement of each Fiscal Year or, with respect to the Fiscal
Year in which the Closing Date occurs, within sixty (60) days of the Closing Date, in form
satisfactory to Lender setting forth in reasonable detail budgeted monthly operating income and
monthly operating capital and other expenses for the Property. Each Annual Budget shall contain,
among other things, management fees, third party service fees, and other expenses as Borrower may
reasonably determine. Lender shall have the right to approve such Annual Budget which approval
shall not be unreasonably withheld, and in the event that Lender objects to the proposed Annual
Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15)
days after receipt thereof (and deliver to Borrower a reasonably detailed description of such
objections) and Borrower shall, within five (5) days after receipt of notice of any such
objections, revise such Annual Budget and resubmit the same to Lender. Lender shall advise
Borrower of any objections to such revised Annual Budget within five (5) days after receipt thereof
(and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall
revise the same in accordance with the process described herein until Lender approves an Annual
Budget, provided, however, that if Lender shall not advise Borrower of its objections to any
proposed Annual Budget within the applicable time period set forth in this Section, then such
proposed Annual Budget shall be deemed approved by Lender. Until such time that Lender approves a
proposed Annual Budget, the most recently Approved Annual Budget shall apply; provided that, such
Approved Annual Budget shall be adjusted to
reflect actual increases in Basic Carrying Costs and utilities expenses and to delete any
non-recurring expenses. In the event that Borrower must incur an Extraordinary Expense, then
Borrower shall promptly deliver to Lender a reasonably detailed explanation of such proposed
Extraordinary Expense for Lender’s approval, which approval may be granted or denied in Lender’s
sole and absolute discretion. Borrower may, at its option, request Lender to approve changes to
the Approved Annual Budget not more than three (3) times per year.

     (k) In the event that Borrower fails to deliver any of the financial statements, reports or
other information required to be delivered to Lender pursuant to this Section 2.09 on or prior to
their due dates, if any such failure shall continue for fifteen (15) days following notice thereof
from Lender, Borrower shall pay to Lender an administrative fee in the amount of Two Thousand
Dollars ($2,000) for each due date with respect to which such a failure occurs (and not on a
per-item basis). Borrower agrees that such administrative fee (i) is a fair and reasonable fee
necessary to compensate Lender for its additional administrative costs and increased costs
relating to Borrower’s failure to deliver the aforementioned statements, reports or other items as
and when required hereunder and (ii) is not a penalty.

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     Section 2.10. Litigation. Borrower will give prompt written notice to Lender of any
litigation or governmental proceedings pending or threatened (in writing) against Borrower which
could reasonably have a Material Adverse Effect.

     Section 2.11. Updates of Representations. Borrower shall deliver to Lender within
fifteen (15) Business Days of the request of Lender an Officer’s Certificate updating all of the
representations and warranties contained in this Security Instrument and the other Loan Documents
and certifying that all of the representations and warranties contained in this Security Instrument
and the other Loan Documents, as updated pursuant to such Officer’s Certificate, are true, accurate
and complete as of the date of such Officer’s Certificate or shall set forth the exceptions to
representations and/or warranties in reasonable detail, as applicable, and, upon Lender’s request
for further information with respect to such exceptions, shall provide Lender such additional
information as Lender may reasonably request. Notwithstanding the foregoing, provided that no
Event of Default has occurred and is continuing, Borrower shall not be required to deliver the
foregoing Officer’s Certificate more than two (2) times during the term of the Loan.

ARTICLE III:  INSURANCE AND CASUALTY RESTORATION

     Section 3.01. Insurance Coverage. Borrower shall, at its expense, maintain the
following insurance coverages with respect to the Property during the term of this Security
Instrument:

     (a) (i) Insurance against loss or damage by fire, casualty and other hazards included in an
“all-risk” coverage endorsement or its equivalent (which, in the case of insurance during
the time of any construction work (“Construction”) shall be in “builder’s risk
completed value non-reporting form” together with rents, earnings and extra expense
insurance covering loss due to delay in completion of the Improvements unless otherwise
included in the “all-risk” coverage endorsement), with such endorsements as Lender may from
time to time reasonably require and which are customarily required by Institutional Lenders
of similar properties similarly situated, including, without limitation, if the
Property constitutes a legal non-conforming use, an ordinance of law coverage endorsement
which contains “Demolition Cost”, “Loss Due to Operation of Law” and “Increased Cost of
Construction” coverages, covering the Property in an amount not less than the greater of (A)
100% of the insurable replacement value of the Property (exclusive of the Premises and
footings and foundations) and (B) such other amount as is necessary to prevent any reduction
in such policy by reason of and to prevent Borrower, Lender or any other insured thereunder
from being deemed to be a co-insurer. Not less frequently than once every three (3) years,
Borrower, at its option, shall either (A) have the Appraisal updated or obtain a new
appraisal of the Property, (B) have a valuation of the Property made by or for its insurance
carrier conducted by an appraiser experienced in valuing properties of similar type to that
of the Property which are in the geographical area in which the Property is located or (C)
provide such other evidence as will, in Lender’s sole judgment, enable Lender to determine
whether there shall have been an increase in the insurable value of the Property and
Borrower shall deliver such updated Appraisal, new appraisal, insurance valuation or other
evidence acceptable to Lender, as

45

 

the case may be, and, if such updated Appraisal, new
appraisal, insurance valuation, or other evidence acceptable to Lender (including without
limitation an insurance certificate including the then current valuations) reflects an
increase in the insurable value of the Property, the amount of insurance required hereunder
shall be increased accordingly and Borrower shall deliver evidence satisfactory to Lender
that such policy has been so increased.

     (ii) Commercial general liability insurance against claims for personal and bodily
injury and/or death to one or more persons or property damage, occurring on, in or about the
Property (including the adjoining streets, sidewalks and passageways therein the maintenance
or upkeep of which is the responsibility of Borrower) in such amounts as Lender may from
time to time reasonably require (but in no event shall Lender’s requirements be increased
more frequently than once during each twelve (12) month period) and which are customarily
required by Institutional Lenders for similar properties similarly situated, but not less
than $1,000,000 per occurrence and $2,000,000 general aggregate on a per location basis and,
in addition thereto, not less than $25,000,000 excess and/or umbrella liability insurance
shall be maintained for any and all claims.

     (iii) Business interruption, rent loss or other similar insurance (A) with loss payable
to Lender, (B) covering “all risks” or “special perils” required to be covered by the
insurance provided for in Section 3.01(a)(i) hereof and (C) in an amount not less than 100%
of the projected fixed or base rent plus percentage rent for the succeeding twelve (12)
month period based on an occupancy rate of 100%. The amount of such insurance shall be
determined upon the execution of this Security Instrument, and not more frequently than once
each calendar year thereafter based on Borrower’s reasonable estimate of projected fixed or
base rent plus percentage rent, from the Property for the next succeeding twelve (12) months
together with a six (6) month extended period of indemnity. Nothing herein contained shall
be deemed to relieve Borrower of its obligations to timely pay all amounts due under the
Loan Documents.

     (iv) Intentionally omitted.

     (v) Insurance against loss or damages from (A) leakage of sprinkler systems and (B)
explosion of steam boilers, air conditioning equipment, pressure vessels or similar
apparatus now or hereafter installed at the Property, in such amounts as Lender may from
time to time reasonably require and which are then customarily required by Institutional
Lenders of similar properties similarly situated.

     (vi) Flood insurance in an amount equal to the full insurable value of the Property or
the maximum amount available, whichever is less, if the Improvements are located in an area
designated by the Secretary of Housing and Urban Development as being “an area of special
flood hazard” under the National Flood Insurance Program (i.e., having a one percent
or greater chance of flooding), and if flood insurance is available under the National Flood
Insurance Act.

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     (vii) Worker’s compensation insurance or other similar insurance which may be required
by Governmental Authorities or Legal Requirements.

     (viii) Intentionally omitted.

     (ix) Insurance against damage resulting from acts of terrorism, or an insurance policy
without an exclusion for damages resulting from terrorism, on terms consistent with the
commercial property insurance policy required under subsections (i), (ii) and (iii) above to
the extent not included in the policies of insurance required pursuant to subsections (i),
(ii) and (iii) above.

     (x) At all times during Construction relating to a casualty and/or any condemnation the
approval of which is required by Lender, contractor’s liability insurance to a limit of not
less than $25,000,000 on a per occurrence basis covering each contractor’s construction
operation at the Premises.

     (xi) Such other insurance as may from time to time be required by Lender (excluding
environmental limited liability insurance) and which is then customarily required by
Institutional Lenders for similar properties similarly situated, against other insurable
hazards, including, but not limited to, malicious mischief, vandalism, sinkhole and mine
subsidence, acts of terrorism, windstorm, war risk and/or earthquake, due regard to be given
to the size and type of the Premises, Improvements, Fixtures and Equipment and their
location, construction and use. Additionally, Borrower shall carry such insurance coverage
as Lender may from time to time require if the failure to carry such insurance may result in
a downgrade, qualification or withdrawal of any class of securities issued in connection
with a Securitization or, if the Loan is not yet part of a Securitization, would result in
an increase in the subordination levels of any class of securities anticipated to be issued
in connection with a proposed Securitization.

     (b) Borrower shall cause any Manager of the Property to maintain fidelity insurance in an
amount not less than $2,500,000 and payable or such lesser amount as Lender shall approve.

     Section 3.02. Policy Terms. (a) All insurance required by this Article III shall be
in the form (other than with respect to Sections 3.01(a)(vi) and (vii) above when insurance in
those two sub-sections is placed with a governmental agency or instrumentality on such agency’s
forms) and amount and with deductibles as, from time to time, shall be reasonably acceptable to
Lender, under valid and enforceable policies issued by financially responsible insurers authorized
to do business in the State where the Property is located, with a general policyholder’s service
rating of not less than A and a financial rating of not less than XIII as rated in the most
currently available Best’s Insurance Reports (or the equivalent, if such rating system shall
hereafter be altered or replaced) and shall have a claims paying ability rating and/or financial
strength rating, as applicable, of not less than “A” (or its equivalent), or such lower claims
paying ability rating and/or financial strength rating, as applicable, as Lender shall, in its sole
and absolute discretion, consent to, from a Rating Agency (one of which after a Securitization in
which Standard & Poor’s rates any securities issued in connection with such Securitization, shall
be Standard &

47

 

Poor’s). Certificates evidencing all insurance policies shall be delivered to and
held by Lender. All insurance policies shall (i) name Lender, its successors and/or assigns as a
loss payee, or with respect to liability insurance, an additional named insured, (ii) include a
standard mortgagee endorsement or its equivalent with respect to the insurance required pursuant to
Section 3.01(a)(i) above; (iii) include a waiver of subrogation endorsement as to Lender; (iv) an
endorsement indicating that neither Lender nor Borrower shall be or be deemed to be a co-insurer
with respect to any casualty risk insured by such policies; (v) shall provide for a deductible per
loss of an amount not more than $100,000; and (vi) a provision that such policies shall not be
canceled, terminated, denied renewal or amended, including, without limitation, any amendment
reducing the scope or limits of coverage, without at least thirty (30) days’ prior written notice
to Lender in each instance (or five (5) days with respect to termination as a result of non-payment
of premiums). Not less than five (5) days prior to the expiration dates of the insurance policies
obtained pursuant to this Security Instrument, certificates of insurance evidencing renewals of
such policies and within thirty (30) days after renewal evidencing the payment of premiums or
accompanied by other reasonable evidence of such payment (which premiums shall not be paid by
Borrower through or by any financing arrangement which would entitle an insurer to terminate a
policy) shall be delivered by Borrower to Lender. Borrower shall deliver originals or certified
copies of the insurance policies required hereunder promptly upon receipt thereof. Borrower shall
not carry separate insurance, concurrent in kind or form or contributing in the event of loss, with
any insurance required under this Article III.

     (b) If Borrower fails to maintain and deliver to Lender the original policies or certificates
of insurance required by this Security Instrument, or if there are insufficient funds in the Basic
Carrying Costs Escrow Account to pay the premiums for same, Lender may, at its option, procure such
insurance, and Borrower shall pay, or as the case may be, reimburse Lender for, all premiums
thereon promptly, upon demand by Lender, with interest thereon at the Default Rate from the date
paid by Lender to the date of repayment and such sum shall constitute a part of the Debt.

     (c) Borrower shall notify Lender of the renewal premium of each insurance policy and Lender
shall be entitled to pay such amount on behalf of Borrower from the Basic Carrying Costs Escrow
Account.

     (d) The insurance required by this Security Instrument may, at the option of Borrower, be
effected by blanket and/or umbrella policies issued to Borrower covering the Property provided
that, in each case, the policies otherwise comply with the provisions of this Security Instrument
and allocate to the Property, from time to time (but in no event less than once a year), the
coverage specified by this Security Instrument, without possibility of reduction or coinsurance by
reason of, or damage to, any other property (real or personal) named therein. If the insurance
required by this Security Instrument shall be effected by any such blanket or umbrella policies,
Borrower shall furnish to Lender (i) an original certificate of insurance together with reasonable
access to the original of such policy to review such policy’s coverage of the Property, with
schedules attached thereto showing the amount of the insurance provided under such policies
applicable to the Property and (ii) an Officer’s Certificate setting forth (A) the number of
properties covered by such policy, (B) the location by city (if available, otherwise,

48

 

county) and
state of the properties, (C) the average square footage of the properties, (D) a brief description
of the typical construction type included in the blanket policy and (E) such other information as
Lender may reasonably request.

     Section 3.03. Assignment of Policies. (a) Borrower hereby assigns to Lender the
proceeds of all insurance (other than worker’s compensation and liability insurance) obtained
pursuant to this Security Instrument, all of which proceeds shall be payable to Lender as
collateral and further security for the payment of the Debt and the performance of Borrower’s
obligations hereunder and under the other Loan Documents, and Borrower hereby authorizes and
directs the issuer of any such insurance to make payment of such proceeds directly to Lender.
Except as otherwise expressly provided in Section 3.04 or elsewhere in this Article III, Lender
shall have the option, in its discretion, and without regard to the adequacy of its security, to
apply all or any part of the proceeds it may receive pursuant to this Article in such manner as
Lender may elect to any one or more of the following: (i) the payment of the Debt, whether or not
then due, in any proportion or priority as Lender, in its discretion, may elect, (ii) the repair or
restoration of the Property, (iii) the cure of any Default or (iv) the reimbursement of the costs
and expenses of Lender incurred pursuant to the terms hereof in connection with the recovery of the
Insurance Proceeds. Nothing herein contained shall be deemed to excuse Borrower from repairing or
maintaining the Property as provided in this Security Instrument or restoring all damage or
destruction to the Property, regardless of the sufficiency of the Insurance Proceeds, and the
application or release by Lender of any Insurance Proceeds shall not cure or waive any Default or
notice of Default.

     (b) In the event of the foreclosure of this Security Instrument or any other transfer of title
or assignment of all or any part of the Property in extinguishment, in whole or in part, of the
Debt, all right, title and interest of Borrower in and to all policies of insurance required by
this Security Instrument shall inure to the benefit of the successor in interest to Borrower or the
purchaser of the Property. If, prior to the receipt by Lender of any proceeds, the Property or any
portion thereof shall have been sold on foreclosure of this Security Instrument or by deed in lieu
thereof or otherwise, or any claim under such insurance policy arising during the term of this
Security Instrument is not paid until after the extinguishment of the Debt, and Lender shall not
have received the entire amount of the Debt outstanding at the time of such extinguishment, whether
or not a deficiency judgment on this Security Instrument shall have been sought or recovered or
denied, then, the proceeds of any such insurance to the extent of the amount of the
Debt not so received, shall be paid to and be the property of Lender, together with interest
thereon at the Default Rate, and the reasonable attorney’s fees, costs and disbursements incurred
by Lender in connection with the collection of the proceeds which shall be paid to Lender and
Borrower hereby assigns, transfers and sets over to Lender all of Borrower’s right, title and
interest in and to such proceeds. Notwithstanding any provisions of this Security Instrument to
the contrary, Lender shall not be deemed to be a trustee or other fiduciary with respect to its
receipt of any such proceeds, which may be commingled with any other monies of Lender; provided,
however, that Lender shall use such proceeds for the purposes and in the manner permitted by this
Security Instrument. Any proceeds deposited with Lender shall be held by Lender in an
interest-bearing account, but Lender makes no representation or warranty as to the rate or amount
of interest, if any, which may accrue on such deposit and shall have no liability in

49

 

connection
therewith. Interest accrued, if any, on the proceeds shall be deemed to constitute a part of the
proceeds for purposes of this Security Instrument. The provisions of this Section 3.03(b) shall
survive the termination of this Security Instrument by foreclosure, deed in lieu thereof or
otherwise as a consequence of the exercise of the rights and remedies of Lender hereunder after a
Default.

Section 3.04. Casualty Restoration. (a) (i) In the event of any damage to or
destruction of the Property, Borrower shall give prompt written notice to Lender (which
notice shall set forth Borrower’s good faith estimate of the cost of repairing or restoring
such damage or destruction, or if Borrower cannot reasonably estimate the anticipated cost
of restoration, Borrower shall nonetheless give Lender prompt notice of the occurrence of
such damage or destruction, and will diligently proceed to obtain estimates to enable
Borrower to quantify the anticipated cost and time required for such restoration, whereupon
Borrower shall promptly notify Lender of such good faith estimate) and, provided that
restoration does not violate any Legal Requirements, Borrower shall promptly commence and
diligently prosecute to completion the repair, restoration or rebuilding of the Property so
damaged or destroyed to a condition such that the Property shall be at least equal in value
to that immediately prior to the damage to the extent practicable, in full compliance with
all Legal Requirements and the provisions of all Leases, and in accordance with Section
3.04(b) below. Such repair, restoration or rebuilding of the Property are sometimes
hereinafter collectively referred to as the “Work”.

     (ii) Borrower shall not adjust, compromise or settle any claim for Insurance Proceeds
without the prior written consent of Lender, which shall not be unreasonably withheld or
delayed and Lender shall have the right, at Borrower’s sole cost and expense, to participate
in any settlement or adjustment of Insurance Proceeds; provided, however, that, except
during the continuance of an Event of Default, Lender’s consent shall not be required with
respect to the adjustment, compromising or settlement of any claim for Insurance Proceeds in
an amount less than $250,000.

     (iii) Subject to Section 3.04(a)(iv), Lender shall apply any Insurance Proceeds which
it may receive towards the Work in accordance with Section 3.04(b) and the other applicable
sections of this Article III.

     (iv) If (A) a Default shall have occurred and is continuing, (B) Lender is not
reasonably satisfied that the Debt Service Coverage, after substantial completion of the
Work, will be at least equal to the Required Debt Service Coverage, (C) more than thirty
percent (30%) of the reasonably estimated fair market value of the Property is damaged or
destroyed, (D) more than 30% of the rentable area of the Improvements is rendered
untenantable, (E) Lender is not reasonably satisfied that the Work can be completed six (6)
months prior to Maturity or (F) Lender is not reasonably satisfied that the Work can be
completed within twelve (12) months of the damage to or destruction of the Property (each, a
“Substantial Casualty”), Lender shall have the option, in its sole discretion to
apply any Insurance Proceeds it may receive pursuant to this Security Instrument (less

50

 

any
reasonable out of pocket cost to Lender of recovering and paying out such proceeds incurred
pursuant to the terms hereof and not otherwise reimbursed to Lender, including, without
limitation, reasonable attorneys’ fees and expenses) to the payment of the Debt, without any
prepayment fee or charge of any kind, or to allow such proceeds to be used for the Work
pursuant to the terms and subject to the conditions of Section 3.04(b) hereof and the other
applicable sections of this Article III.

     (v) In the event that Lender elects or is obligated hereunder to allow Insurance
Proceeds to be used for the Work, any excess proceeds remaining after completion of such
Work shall be applied to the payment of the Debt without any prepayment fee or charge of any
kind.

     (b) If any Condemnation Proceeds in accordance with Section 6.01(a), or any Insurance Proceeds
in accordance with Section 3.04(a), are to be applied to the repair, restoration or rebuilding of
the Property, then such proceeds shall be deposited into a segregated interest-bearing bank account
at the Bank, which shall be an Eligible Account, held by Lender and shall be paid out from time to
time to Borrower as the Work progresses (less any reasonable out of pocket cost to Lender of
recovering and paying out such proceeds, including, without limitation, reasonable attorneys’ fees
and costs allocable to inspecting the Work and the plans and specifications therefor) subject to
Section 5.13 hereof and to all of the following conditions:

     (i) An Independent architect or engineer selected by Borrower and reasonably acceptable
to Lender (an “Architect” or “Engineer”) or a Person otherwise reasonably
acceptable to Lender, shall have delivered to Lender a certificate estimating the cost of
completing the Work, and, if the amount set forth therein is more than the sum of the amount
of Insurance Proceeds then being held by Lender in connection with a casualty and amounts
agreed to be paid as part of a final settlement under the insurance policy upon or before
completion of the Work, Borrower shall have delivered to Lender (A) cash collateral in an
amount equal to such excess, (B) an unconditional, irrevocable, clean sight draft letter of
credit, in form, substance and issued by a bank reasonably acceptable to Lender, in the
amount of such excess and draws on such letter of credit shall be made by Lender to make
payments pursuant to this Article III following exhaustion of the Insurance Proceeds
therefor or (C) a completion bond in form, substance and issued by a surety company
reasonably acceptable to Lender.

     (ii) If the cost of the Work is reasonably estimated by an Architect or Engineer in a
certification reasonably acceptable to Lender to be equal to or exceed five percent (5%) of
the Loan Amount, such Work shall be performed under the supervision of an Architect or
Engineer, it being understood that the plans and specifications with respect thereto shall
provide for Work so that, upon completion thereof, the Property shall be at least equal in
replacement value and general utility to the Property prior to the damage or destruction.

     (iii) Each request for payment shall be made on not less than ten (10) days’ prior
notice to Lender and shall be accompanied by a certificate of an Architect or Engineer, or,
if the Work is not required to be supervised by an Architect or Engineer, by

51

 

an Officer’s
Certificate stating (A) that payment is for Work completed in compliance with the plans and
specifications, if required under clause (ii) above, (B) that the sum requested is required
to reimburse Borrower for payments by Borrower to date, or is due to the contractors,
subcontractors, materialmen, laborers, engineers, architects or other Persons rendering
services or materials for the Work (giving a brief description of such services and
materials), and that when added to all sums previously paid out by Lender does not exceed
the value of the Work done to the date of such certificate, (C) if the sum requested is to
cover payment relating to repair and restoration of personal property required or relating
to the Property, that title to the personal property items covered by the request for
payment is vested in Borrower (unless Borrower is lessee of such personal property), and (D)
that the Insurance Proceeds and other amounts deposited by Borrower held by Lender after
such payment is more than the estimated remaining cost to complete such Work; provided,
however, that if such certificate is given by an Architect or Engineer, such Architect or
Engineer shall certify as to clause (A) above, and such Officer’s Certificate shall certify
as to the remaining clauses above, and provided, further, that Lender shall not be obligated
to disburse such funds if Lender determines, in Lender’s reasonable discretion, that
Borrower shall not be in compliance with this Section 3.04(b). Additionally, each request
for payment shall contain a statement signed by Borrower stating that the requested payment
is for Work satisfactorily done to date.

     (iv) Each request for payment shall be accompanied by waivers of lien, in customary
form and substance, covering that part of the Work for which payment or reimbursement is
being requested and, if required by Lender, a search prepared by a title company or licensed
abstractor, or by other evidence reasonably satisfactory to Lender that there has not been
filed with respect to the Property any mechanic’s or other lien or instrument for retention
of title relating to any part of the Work not discharged of record. Additionally, as to any
personal property covered by the request for payment, Lender shall be furnished with
evidence of Borrower having incurred a payment obligation therefor and such further evidence
reasonably satisfactory to assure Lender that UCC filings therefor provide a valid first
lien on the personal property.

     (v) Lender shall have the right to inspect the Work at all reasonable times upon
reasonable prior notice and may condition any disbursement of Insurance Proceeds upon
satisfactory compliance by Borrower with the provisions hereof. Neither the approval by
Lender of any required plans and specifications for the Work nor the
inspection by Lender of the Work shall make Lender responsible for the preparation of
such plans and specifications, or the compliance of such plans and specifications of the
Work, with any applicable law, regulation, ordinance, covenant or agreement.

     (vi) Insurance Proceeds shall not be disbursed more frequently than once every thirty
(30) days.

     (vii) Until such time as the Work has been substantially completed, Lender shall not be
obligated to disburse up to ten percent (10%) of the cost of the Work (the “Retention
Amount”) to Borrower. Upon substantial completion of the Work, Borrower

52

 

shall send
notice thereof to Lender and, subject to the conditions of Section 3.04(b)(i)-(iv), Lender
shall disburse one-half of the Retention Amount to Borrower; provided, however, that the
remaining one-half of the Retention Amount shall be disbursed to Borrower when Lender shall
have received copies of any and all final certificates of occupancy or other certificates,
licenses and permits required for the ownership, occupancy and operation of the Property in
accordance with all Legal Requirements. Borrower hereby covenants to diligently seek to
obtain any such certificates, licenses and permits.

     (viii) Upon failure on the part of Borrower promptly to commence the Work or to proceed
diligently and continuously to completion of the Work, which failure shall continue after
notice for thirty (30) days, Lender may apply any Insurance Proceeds or Condemnation
Proceeds it then or thereafter holds to the payment of the Debt in accordance with the
provisions of the Note; provided, however, that Lender shall be entitled to apply at any
time all or any portion of the Insurance Proceeds or Condemnation Proceeds it then holds to
the extent necessary to cure any Event of Default.

     (c) If Borrower (i) within ninety (90) days (plus, if all approvals from Governmental
Authorities have not been obtained within such period and Borrower has continuously and
expeditiously attempted to obtain such approvals within such time period, such additional period of
time required to obtain approvals from all Governmental Authorities up to one hundred twenty (120)
days in total, provided Borrower deposits with Lender an amount, as reasonably determined by
Lender, equal to the portion of the Required Debt Service Payment allocable to the Property which
was the subject of the casualty for each additional thirty (30) day period) after the occurrence of
any damage to the Property or any portion thereof (or such shorter period as may be required under
any Major Space Lease) shall fail to submit to Lender for approval plans and specifications for the
Work (approved by the Architect and by all Governmental Authorities whose approval is required),
(ii) after any such plans and specifications are approved by all Governmental Authorities, the
Architect and Lender, shall fail to promptly commence such Work or (iii) shall fail to diligently
prosecute such Work to completion, then, in addition to all other rights available hereunder, at
law or in equity, Lender, or any receiver of the Property or any portion thereof, upon five (5)
days prior notice to Borrower (except in the event of emergency in which case no notice shall be
required), may (but shall have no obligation to) perform or cause to be performed such Work, and
may take such other steps as it reasonably deems advisable. Borrower hereby waives, for Borrower,
any claim, other than for gross
negligence or willful misconduct, against Lender and any receiver arising out of any act or
omission of Lender or such receiver pursuant hereto, and Lender may apply all or any portion of the
Insurance Proceeds (without the need to fulfill any other requirements of this Section 3.04) to
reimburse Lender and such receiver, for all costs not reimbursed to Lender or such receiver upon
demand together with interest thereon at the Default Rate from the date such amounts are advanced
until the same are paid to Lender or the receiver.

     (d) Borrower hereby irrevocably appoints Lender as its attorney-in-fact, coupled with an
interest except as otherwise provided in this Security Instrument, to collect and receive any

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Insurance Proceeds paid with respect to any portion of the Property or the insurance policies
required to be maintained hereunder, and to endorse any checks, drafts or other instruments
representing any Insurance Proceeds whether payable by reason of loss thereunder or otherwise.

     (e) Notwithstanding the foregoing provisions of this Section 3.04, upon the occurrence of any
damage to or destruction of the Property, provided that such damage or destruction is not a
Substantial Casualty, if in Lender’s sole and absolute judgment the cost of repair of or
restoration to the Property required as a result of any damage or destruction is less than $250,000
in the aggregate and the Work can be completed in less than one hundred twenty (120) days (but in
no event beyond the date which is six (6) months prior to the Maturity Date), then Lender, upon
written request by Borrower, shall permit Borrower to apply for and receive the Insurance Proceeds
directly from the insurer (and Lender shall advise the insurer to pay over such Insurance Proceeds
directly to Borrower), to the extent required to pay for any such Work, with any excess thereof to
be promptly paid by Borrower to Lender to be applied against the Debt.

     Section 3.05. Compliance with Insurance Requirements. Borrower promptly shall comply
with, and shall cause the Property to comply with, all Insurance Requirements, even if such
compliance requires structural changes or improvements or would result in interference with the use
or enjoyment of the Property or any portion thereof provided Borrower shall have a right to contest
in good faith and with diligence such Insurance Requirements provided (a) no Default shall exist
during such contest and such contest shall not subject the Property or any portion thereof to any
lien or affect the priority of the lien of this Security Instrument, (b) failure to comply with
such Insurance Requirements will not subject Lender or any of its agents, employees, officers or
directors to any civil or criminal liability, (c) such contest will not cause any reduction in
insurance coverage, (d) such contest shall not affect the ownership, use or occupancy of the
Property, (e) the Property or any part thereof or any interest therein shall not be in any danger
of being sold, forfeited or lost by reason of such contest by Borrower, (f) Borrower has given
Lender prompt notice of such contest and, upon request by Lender from time to time, notice of the
status of such contest by Borrower and/or information of the continuing satisfaction of the
conditions set forth in clauses (a) through (e) of this Section 3.05, (g) upon a final
determination of such contest, Borrower shall promptly comply with the requirements thereof, and
(h) prior to and during such contest, Borrower shall furnish to Lender security reasonably
satisfactory to Lender, in its reasonable discretion, against loss or injury by reason of such
contest or the non-compliance with such Insurance Requirement (and if such security is cash, Lender
shall deposit the same in an interest-bearing account and interest accrued thereon, if any, shall
be deemed to constitute a part of such security for purposes of this Security Instrument, but
Lender (i) makes no representation or warranty as to the rate or amount of interest, if any,
which may accrue thereon and shall have no liability in connection therewith and (ii) shall not be
deemed to be a trustee or fiduciary with respect to its receipt of any such security and any such
security may be commingled with other monies of Lender). If Borrower shall use the Property or any
portion thereof in any manner which could permit the insurer to cancel any insurance required to be
provided hereunder, Borrower immediately shall obtain a substitute policy which shall satisfy the
requirements of this Security Instrument and which shall be effective on or prior to the date on
which any such other insurance policy shall be canceled. Borrower shall not by

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any action or
omission invalidate any insurance policy required to be carried hereunder unless such policy is
replaced as aforesaid, or materially increase the premiums on any such policy above the normal
premium charged for such policy. Borrower shall reasonably cooperate with Lender in obtaining for
Lender the benefits of any Insurance Proceeds lawfully or equitably payable to Lender in connection
with the transaction contemplated hereby.

     Section 3.06. Event of Default During Restoration. Notwithstanding anything to the
contrary contained in this Security Instrument including, without limitation, the provisions of
this Article III, if, at the time of any casualty affecting the Property or any part thereof, or at
any time during any Work, or at any time that Lender is holding or is entitled to receive any
Insurance Proceeds pursuant to this Security Instrument, either a Default of which Borrower has
been given notice or an Event of Default exists and is continuing, Lender shall then have no
obligation to make such proceeds available for Work and Lender shall have the right and option, to
be exercised in its sole and absolute discretion and election, with respect to the Insurance
Proceeds, either to retain and apply such proceeds in reimbursement for the actual out of pocket
costs, fees and expenses incurred by Lender in accordance with the terms hereof in connection with
the adjustment of the loss and, after the occurrence of an Event of Default, any balance toward
payment of the Debt in such priority and proportions as Lender, in its sole discretion, shall deem
proper, or towards the Work, upon such terms and conditions as Lender shall determine, or to cure
such Event of Default, or to any one or more of the foregoing as Lender, in its sole and absolute
discretion, may determine. If Lender shall receive and retain such Insurance Proceeds, the lien of
this Security Instrument shall be reduced only by the amount thereof received, after reimbursement
to Lender of expenses of collection, and actually applied by Lender in reduction of the principal
sum payable under the Note in accordance with the Note.

     Section 3.07. Application of Proceeds to Debt Reduction. (a) No damage to the
Property, or any part thereof, by fire or other casualty whatsoever, whether such damage be partial
or total, shall relieve Borrower from its liability to pay in full the Debt and to perform its
obligations under this Security Instrument and the other Loan Documents.

     (b) If any Insurance Proceeds are applied to reduce the Debt, Lender shall apply the same in
accordance with the provisions of the Note.

ARTICLE IV:  IMPOSITIONS

     Section 4.01. Payment of Impositions, Utilities and Taxes, etc. (a) Subject to
Section 5.06 of this Security Instrument, Borrower shall pay or cause to be paid all Impositions at
least five (5) days prior to the date upon which any fine, penalty, interest or cost for nonpayment
is imposed, and furnish to Lender, upon request, receipted bills of the appropriate taxing
authority
or other documentation reasonably satisfactory to Lender evidencing the payment thereof. If
Borrower shall fail to pay any Imposition in accordance with this Section and is not contesting or
causing a contesting of such Imposition in accordance with Section 4.04 hereof, or if there are
insufficient funds in the Basic Carrying Costs Escrow Account to pay any Imposition, Lender shall
have the right, but shall not be obligated, to pay that Imposition, and Borrower shall repay to
Lender, on demand, any amount paid by Lender, with interest thereon at the Default Rate from

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the
date of the advance thereof to the date of repayment, and such amount shall constitute a portion of
the Debt secured by this Security Instrument.

     (b) Borrower shall, prior to the date upon which any fine, penalty, interest or cost for the
nonpayment is imposed, pay or cause to be paid all charges for electricity, power, gas, water and
other services and utilities in connection with the Property, and shall, upon Lender’s request,
deliver to Lender receipts or other documentation reasonably satisfactory to Lender evidencing
payment thereof. If Borrower shall fail to pay any amount required to be paid by Borrower pursuant
to this Section 4.01 and is not contesting such charges in accordance with Section 4.04 hereof,
Lender shall have the right, but shall not be obligated, to pay that amount, and Borrower will
repay to Lender, on demand, any amount paid by Lender with interest thereon at the Default Rate
from the date of the advance thereof to the date of repayment, and such amount shall constitute a
portion of the Debt secured by this Security Instrument.

     (c) Borrower shall pay all taxes, charges, filing, registration and recording fees, excises
and levies imposed upon Lender by reason of or in connection with its ownership of any Loan
Document or any other instrument related thereto, or resulting from the execution, delivery and
recording of, or the lien created by, or the obligation evidenced by, any of them, other than
income, franchise and other similar taxes imposed on Lender and shall pay all corporate stamp
taxes, if any, and other taxes, required to be paid on the Loan Documents. If Borrower shall fail
to make any such payment within ten (10) days after written notice thereof from Lender, Lender
shall have the right, but shall not be obligated, to pay the amount due, and Borrower shall
reimburse Lender therefor, on demand, with interest thereon at the Default Rate from the date of
the advance thereof to the date of repayment, and such amount shall constitute a portion of the
Debt secured by this Security Instrument.

     Section 4.02. Deduction from Value. In the event of the passage after the date of
this Security Instrument of any Legal Requirement deducting from the value of the Property for the
purpose of taxation, any lien thereon or changing in any way the Legal Requirements now in force
for the taxation of this Security Instrument and/or the Debt for federal, state or local purposes,
or the manner of the operation of any such taxes so as to adversely affect the interest of Lender,
or imposing any tax or other charge on any Loan Document, then Borrower will pay such tax, with
interest and penalties thereon, if any, within the statutory period. In the event the payment of
such tax or interest and penalties by Borrower would be unlawful, or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then in any such event, Lender shall
have the option, by written notice of not less than thirty (30) days, to declare the Debt
immediately due and payable, with no prepayment fee or charge of any kind.

     Section 4.03. No Joint Assessment. Borrower shall not consent to or initiate the
joint assessment of the Premises or the Improvements (a) with any other real property constituting
a
separate tax lot and Borrower represents and covenants that the Premises and the Improvements
are and shall remain a separate tax lot or (b) 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 the Property as a
single lien.

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     Section 4.04. Right to Contest. Borrower shall have the right, after prior notice to
Lender, at its sole expense, to contest by appropriate legal proceedings diligently conducted in
good faith, without cost or expense to Lender or any of its agents, employees, officers or
directors, the validity, amount or application of any Imposition or any charge described in Section
4.01(b), provided that (a) no Default or Event of Default shall exist during such proceedings and
such contest shall not (unless Borrower shall comply with clause (d) of this Section 4.04) subject
the Property or any portion thereof to any lien or affect the priority of the lien of this Security
Instrument, (b) failure to pay such Imposition or charge will not subject Lender or any of its
agents, employees, officers or directors to any civil or criminal liability, (c) the contest
suspends enforcement of the Imposition or charge (unless Borrower first pays the Imposition or
charge), (d) prior to and during such contest, Borrower shall furnish to Lender security
satisfactory to Lender, in its reasonable discretion, against loss or injury by reason of such
contest or the non-payment of such Imposition or charge (and if such security is cash, Lender may
deposit the same in an interest-bearing account and interest accrued thereon, if any, shall be
deemed to constitute a part of such security for purposes of this Security Instrument, but Lender
(i) makes no representation or warranty as to the rate or amount of interest, if any, which may
accrue thereon and shall have no liability in connection therewith and (ii) shall not be deemed to
be a trustee or fiduciary with respect to its receipt of any such security and any such security
may be commingled with other monies of Lender), (e) such contest shall not affect the ownership,
use or occupancy of the Property, (f) the Property or any part thereof or any interest therein
shall not be in any danger of being sold, forfeited or lost by reason of such contest by Borrower,
(g) Borrower has given Lender notice of the commencement of such contest and upon request by
Lender, from time to time, notice of the status of such contest by Borrower and/or confirmation of
the continuing satisfaction of clauses (a) through (f) of this Section 4.04, and (h) upon a final
determination of such contest, Borrower shall promptly comply with the requirements thereof. Upon
completion of any contest, Borrower shall immediately pay the amount due, if any, and deliver to
Lender proof of the completion of the contest and payment of the amount due, if any, following
which Lender shall return the security, if any, deposited with Lender pursuant to clause (d) of
this Section 4.04. Borrower shall not pay any Imposition in installments unless permitted by
applicable Legal Requirements, and shall, upon the request of Lender, deliver copies of all notices
and bills relating to any Imposition or other charge covered by this Article IV to Lender.

     Section 4.05. No Credits on Account of the Debt. Borrower will not claim or demand or
be entitled to any credit or credits on account of the Debt for any part of the Impositions
assessed against the Property or any part thereof and no deduction shall otherwise be made or
claimed from the taxable value of the Property, or any part thereof, by reason of this Security
Instrument or the Debt. In the event such claim, credit or deduction shall be required by Legal
Requirements, Lender shall have the option, by written notice of not less than thirty (30) days, to
declare the Debt immediately due and payable, and Borrower hereby agrees to pay such amounts
not later than thirty (30) days after such notice.

     Section 4.06. Documentary Stamps. If, at any time, the United States of America, any
State or Commonwealth thereof or any subdivision of any such State shall require revenue or other
stamps to be affixed to the Note, this Security Instrument or any other Loan Document, or

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impose
any other tax or charges on the same, Borrower will pay the same, with interest and penalties
thereon, if any.

ARTICLE V:  CENTRAL CASH MANAGEMENT

     Section 5.01. Cash Flow. Borrower hereby acknowledges and agrees that (a) the Rents
(which for the purposes of this Section 5.01 shall not include security deposits from tenants under
Leases held by Borrower and not applied towards Rent) derived from the Property, (b) Loss Proceeds
and (c) all proceeds of the Rate Cap Agreement shall be utilized to fund the Sub-Accounts.
Borrower shall cause Manager to collect all security deposits from tenants under valid Leases,
which shall be held by Manager, as agent for Borrower, in accordance with applicable law (the
“Security Deposit Account”). Borrower shall notify Lender of any security deposits held as
letters of credit and, upon Lender’s request, such letters of credit shall be promptly delivered to
Lender. Borrower shall have no right to withdraw funds from the Security Deposit Account;
provided that, prior to the occurrence of an Event of Default, Borrower may withdraw funds
from the Security Deposit Account to refund or apply security deposits as required by the Leases or
by applicable Legal Requirements. After the occurrence of an Event of Default, all withdrawals
from the Security Deposit Account must be approved by Lender. Borrower shall cause all Rent which
is due and payable to Borrower pursuant to the terms of the Leases (other than security deposits
under valid Leases which are held in the Security Deposit Account) to be paid by check drawn on a
bank located in the United States of America or through automated clearing house funds
(“ACH”) or by Federal wire directly to the Rent Account. Borrower shall give each tenant
under a Lease an irrevocable direction in the form of Exhibit E attached hereto and made a part
hereof to deliver all rent payments made by tenants and other payments constituting Rent directly
to the Rent Account and shall deliver copies of such letters to Lender, together with an Officer’s
Certificate certifying that such letters will be delivered to each tenant under the Leases within
two (2) Business Days of the Closing Date. Borrower shall cause Manager to give to the bank in
which the Rent Account is located an irrevocable written instruction, in form and substance
acceptable to Lender, that all funds deposited in such account shall be automatically transferred
through ACH or by Federal wire to the Central Account prior to 3:00 p.m. (New York City time) on a
daily basis. Within two (2) Business Days of the Closing Date, Borrower shall deliver to Lender a
copy of the irrevocable notice which Borrower has delivered to the bank in which the Rent Account
is located pursuant to the provisions of this Section 5.01, the receipt of which is acknowledged in
writing by such bank. Notwithstanding the foregoing, if any Rent is received by Borrower or
Manager, then (a) such amounts shall be held in trust for the benefit, and as the property, of
Lender, (b) such amounts shall not be commingled with any other funds or property of Borrower or
Manager and (c) Borrower or Manager shall deposit such amounts in the Rent Account within one (1)
Business Day of receipt. Upon execution of any Space Lease after the Closing Date, Borrower shall
deliver to Lender a copy of the irrevocable direction letter referred to above, the receipt of
which has been acknowledged by
the tenant under such Space Lease, unless such instruction is included in the applicable Space
Lease and a copy of such executed Space Lease has been delivered to Lender. Lender may elect to
change the financial institution in which the Central Account shall be maintained; however,
Lender shall give Borrower and the bank in which the Rent Account is located not fewer than five
(5) Business Days’ prior notice of such change. Neither Borrower nor Manager shall change

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such
bank or the Rent Account without the prior written consent of Lender. All fees and charges of the
bank(s) in which the Rent Account and Central Account are located shall be paid by Borrower.

     Section 5.02. Establishment of Accounts. Lender has established the Escrow Accounts
and the Central Account in the name of Borrower for the benefit of Lender and the Rent Account in
the joint name of Borrower and Lender, as secured party. The Escrow Accounts, the Rent Account and
the Central Account shall be under the sole dominion and control of Lender and funds held therein
shall not constitute trust funds. Borrower hereby irrevocably directs and authorizes Lender to
withdraw funds from the Rent Account, and to deposit into and withdraw funds from the Central
Account and the Escrow Accounts, all in accordance with the terms and conditions of this Security
Instrument. Borrower shall have no right of withdrawal in respect of the Rent Account, the Central
Account or the Escrow Accounts except as specifically provided herein. Each transfer of funds to
be made hereunder shall be made only to the extent that funds are on deposit in the Rent Account,
the Central Account or the affected Sub-Account or Escrow Account, and Lender shall have no
responsibility to make additional funds available in the event that funds on deposit are
insufficient. The Central Account shall contain the Basic Carrying Costs Sub-Account, the Debt
Service Payment Sub-Account, the Recurring Replacement Reserve Sub-Account, the Operation and
Maintenance Expense Sub-Account, and the Curtailment Reserve Sub-Account, each of which accounts
shall be Eligible Accounts or book-entry sub-accounts of an Eligible Account (each a
“Sub-Account” and collectively, the “Sub-Accounts”) to which certain funds shall be
allocated and from which disbursements shall be made pursuant to the terms of this Security
Instrument. Sums held in the Sub-Accounts and the Escrow Accounts may be commingled with other
monies held by Lender.

     Section 5.03. Permitted Investments. All sums deposited into the Operation and
Maintenance Expense Escrow Account, the Curtailment Reserve Escrow Account, the Recurring
Replacement Reserve Escrow Account, the Debt Service Reserve Escrow Account, the Reletting Reserve
Escrow Account, the Underwritten Rent Escrow Account and the Engineering Escrow Account shall be
held in an interest bearing account but Borrower acknowledges that Lender makes no representation
or warranty as to the rate of return. Lender shall not have any liability for any loss in
investments of funds in the Operation and Maintenance Expense Escrow Account, the Curtailment
Reserve Escrow Account, the Recurring Replacement Reserve Escrow Account, the Debt Service Reserve
Escrow Account, the Reletting Reserve Escrow Account, the Underwritten Rent Escrow Account or the
Engineering Escrow Account and no such loss shall affect Borrower’s obligation to fund, or
liability for funding, the Central Account and each Sub-Account and Escrow Account, as the case may
be. Borrower agrees that Lender shall include all such earnings on the Recurring Replacement
Reserve Escrow Account, the Debt Service Reserve Escrow Account, the Reletting Reserve Escrow
Account, the Underwritten Rent Escrow Account, the Engineering Escrow Account, the Operation and
Maintenance Expense Escrow Account and the Curtailment Reserve Escrow Account as income of Borrower
(and, if Borrower
is a partnership, limited liability company or other pass-through entity, the partners,
members or beneficiaries of Borrower, as the case may be) for federal and applicable state and
local tax purposes. All interest paid or other earnings on funds deposited into the Operation and
Maintenance Expense Escrow Account, the Curtailment Reserve Escrow Account, the Recurring
Replacement Reserve Escrow Account, the Debt Service Reserve Escrow Account, the Reletting Reserve
Escrow Account, the Underwritten Rent Escrow Account and the Engineering Escrow Account made
hereunder shall be deposited into the Central Account and shall be allocated to the Operation and
Maintenance Expense Escrow Account, the Curtailment Reserve Escrow Account, the Recurring
Replacement Reserve Escrow Account, the Reletting Reserve Escrow Account, the Debt Service Reserve
Escrow Account, the Underwritten Rent Escrow Account or the Engineering Escrow Account, as
applicable. Borrower shall pay all costs, fees and expenses incurred in connection with the
establishment and maintenance of, or the disbursement from, the Operation and Maintenance Expense
Escrow Account, the Curtailment Reserve Escrow Account, the Recurring

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Replacement Reserve Escrow
Account, the Debt Service Reserve Escrow Account, the Reletting Reserve Escrow Account, the
Underwritten Rent Escrow Account and the Engineering Escrow Account, which sums shall be due and
payable by Borrower upon demand and may be deducted by Lender from amounts on deposit in the
Central Account or the Escrow Accounts.

     Section 5.04. Intentionally Omitted.

     Section 5.05. Monthly Funding of Sub-Accounts and Escrow Accounts. (a) On or before
each Payment Date during the term of the Loan, commencing on the first (1st) Payment Date occurring
after the month in which the Loan is initially funded, Borrower shall pay or cause to be paid to
the Central Account all sums required to be deposited in the Sub-Accounts pursuant to this Section
5.05(a) and all funds transferred or deposited into the Central Account shall be allocated among
the Sub-Accounts as follows and in the following priority:

     (i) first, to the Basic Carrying Costs Sub-Account, until an amount equal to the Basic
Carrying Costs Monthly Installment for such Payment Date has been allocated to the Basic
Carrying Costs Sub-Account;

     (ii) second, but only during an O&M Operative Period, to the Operation and Maintenance
Expense Sub-Account in an amount equal to the Cash Expenses for the Interest Accrual Period
ending immediately prior to such Payment Date pursuant to the related Approved Annual
Budget;

     (iii) third, but only during an O&M Operative Period, to the Operation and Maintenance
Expense Sub-Account in an amount equal to the amount, if any, of the Net Capital
Expenditures for the Interest Accrual Period ending immediately prior to such Payment Date
pursuant to the related Approved Annual Budget;

     (iv) fourth, to the Debt Service Payment Sub-Account, until an amount equal to the
Required Debt Service Payment for such Payment Date has been allocated to the Debt Service
Payment Sub-Account; and

     (v) fifth, to the Recurring Replacement Reserve Sub-Account, until an amount equal to
the Recurring Replacement Reserve Monthly Installment for such Payment Date has been
allocated to the Recurring Replacement Reserve Sub-Account.

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     (vi) sixth, but only during an O&M Operative Period, to the Operation and Maintenance
Expense Sub-Account in an amount equal to the amount, if any, of the Extraordinary Expenses
approved by Lender for the Interest Accrual Period ending immediately prior to such Payment
Date; and

     (vii) seventh, but only during an O&M Operative Period, the balance, if any, to the
Curtailment Reserve Sub-Account.

     Provided that no Event of Default has occurred and is continuing, Lender agrees that in each
Interest Accrual Period any amounts deposited into or remaining in the Central Account after the
Sub-Accounts have been funded as set forth in this Section 5.05(a) with respect to such Interest
Accrual Period and any periods prior thereto, shall be disbursed by Lender to Borrower on each
Payment Date applicable to such Interest Accrual Period. The balance of the funds distributed to
Borrower after payment of all Operating Expenses then due and payable by or on behalf of Borrower
may be retained by Borrower. After the occurrence, and during the continuance, of an Event of
Default, no funds held in the Central Account shall be distributed to, or withdrawn by, Borrower,
and Lender shall have the right to apply all or any portion of the funds held in the Central
Account or any Sub-Account or any Escrow Account to the Debt in Lender’s sole discretion.

     (b) On each Payment Date, (i) sums held in the Basic Carrying Costs Sub-Account shall be
transferred to the Basic Carrying Costs Escrow Account, (ii) sums held in the Debt Service Payment
Sub-Account, together with any amounts deposited into the Central Account that are either (x) Loss
Proceeds that Lender has elected to apply to reduce the Debt in accordance with the terms of
Article III hereof or (y) excess Loss Proceeds remaining after the completion of any restoration
required hereunder, shall be transferred to Lender to be applied towards the Required Debt Service
Payment, (iii) sums held in the Recurring Replacement Reserve Sub-Account shall be transferred to
the Recurring Replacement Reserve Escrow Account, (iv) sums held in the Operation and Maintenance
Expense Sub-Account shall be transferred to the Operation and Maintenance Expense Escrow Account
and (v) sums held in the Curtailment Reserve Sub-Account shall be transferred to the Curtailment
Reserve Escrow Account.

     Section 5.06. Payment of Basic Carrying Costs. Borrower hereby agrees to pay all
Basic Carrying Costs (without regard to the amount of money in the Basic Carrying Costs Sub-Account
or the Basic Carrying Costs Escrow Account). At least ten (10) Business Days prior to the due date
of any Basic Carrying Costs, and not more frequently than once each month, Borrower may notify
Lender in writing and request that Lender pay such Basic Carrying Costs on behalf of Borrower on or
prior to the due date thereof, and, provided that no Event of Default has occurred and that there
are sufficient funds available in the Basic Carrying Costs Escrow Account, Lender shall make such
payments out of the Basic Carrying Costs Escrow Account before same shall be delinquent. Together
with each such request, Borrower shall furnish Lender with bills and all other documents necessary,
as reasonably determined by Lender, for the
payment of the Basic Carrying Costs which are the subject of such request. Borrower’s
obligation to pay (or cause Lender to pay) Basic Carrying Costs pursuant to this Security

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Instrument shall include, to the extent permitted by applicable law, Impositions resulting from
future changes in law which impose upon Lender an obligation to pay any property taxes or other
Impositions or which otherwise adversely affect Lender’s interests.

     Provided that no Event of Default shall have occurred, all funds deposited into the Basic
Carrying Costs Escrow Account shall be held by Lender pursuant to the provisions of this Security
Instrument and shall be applied in payment of Basic Carrying Costs in accordance with the terms
hereof. Should an Event of Default occur, the sums on deposit in the Basic Carrying Costs
Sub-Account and the Basic Carrying Costs Escrow Account may be applied by Lender in payment of any
Basic Carrying Costs or may be applied to the payment of the Debt or any other charges affecting
all or any portion of the Property as Lender in its sole discretion may determine;
provided, however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.

     Section 5.07. Reletting Reserve Escrow Account. (a) Borrower has deposited with
Lender on the Closing Date an amount equal to the Initial Reletting Reserve Deposit. Borrower
hereby agrees to pay all Reletting Expenditures (without regard to the amount of money then
available in the Reletting Reserve Escrow Account). Upon the execution of any Space Lease with
respect to which Borrower is obligated to undertake or pay for any Reletting Expenditures, Borrower
shall submit to Lender (i) an itemized line item budget (a “Budget”) reasonably acceptable
to Lender outlining all of the expenses relating to said Reletting Expenditures, (ii) a copy of the
signed Lease for which said Reletting Expenditures relate, in each case which has a term of at
least three (3) years and which is otherwise in compliance with the provisions of this Security
Instrument, (iii) a copy of the plans and specifications for the proposed Reletting Expenditures
and (iv) an Officer’s Certificate with respect to the items referred to in clauses (i) through
(iii) and setting forth an anticipated completion date for the Reletting Expenditures. Thereafter,
provided that no Event of Default has occurred and is continuing and that Lender has received a
written request from Borrower for reimbursement of any costs incurred in connection with any
Reletting Expenditures, together with (i) unconditional lien waivers, (ii) a statement from an
Architect or Engineer, indicating that the Reletting Expenditures in question have been completed
in compliance with all Legal Requirements, (iii) copies of bills for such Reletting Expenditures
marked “paid in full”, “paid” or other words of similar import, (iv) upon final completion of such
Reletting Expenditures, tenant estoppel certificates from the tenant leasing space in the Premises
for whom the Reletting Expenditures are being made which indicate, among other things, that the
tenant under such Space Lease has been in occupancy and open for business for at least one full
calendar month and paid all rents due under the Space Lease without abatement, suspension,
deferment, diminution, reduction or other allowances for at least one full calendar month, and (v)
such other documentation as may be reasonably requested by Lender to establish that the Reletting
Expenditures or portion thereof which are the subject of such request have been completed, all of
which are reasonably acceptable in form and substance to Lender, Lender shall disburse to Borrower
any actual expenses incurred in connection with such Reletting Expenditures which were set forth in
the approved Budget provided that Borrower may make a request for disbursement of sums from the
Reletting Reserve Escrow Account no more than once during any month and any request shall be in a
minimum amount of $20,000. With
respect to any Reletting Expenditures which relate to brokerage commissions, upon the receipt
of

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(i) copies of bills for such Reletting Expenditures marked “paid in full”, “paid” or other words
of similar import, (ii) tenant estoppel certificates from the tenant leasing space in the Premises
for which Lease the brokerage commissions are due which indicate, among other things, that the
tenant under such Space Lease has been in occupancy and open for business for at least one full
calendar month and paid all rents due under the Space Lease without abatement, suspension,
deferment, diminution, reduction or other allowances for at least one full calendar month and (iii)
a copy of the signed Lease for which said Reletting Expenditures relate, in each case which has a
term of at least three (3) years, all of which are reasonably acceptable to Lender, Lender shall
disburse to Borrower any actual expenses incurred in connection with such Reletting Expenditures
out of the Reletting Reserve Escrow Account. Lender shall not be required to make any
disbursements out of the Reletting Reserve Escrow Account if an Event of Default shall have
occurred and is continuing, if more than one such request is made in any month or if sufficient
funds are not available in the Reletting Reserve Escrow Account.

     (b) Provided that no Event of Default shall have occurred, all funds deposited into the
Reletting Reserve Escrow Account relating to Reletting Expenditures shall be held by Lender
pursuant to the provisions of this Security Instrument and shall be applied in payment of Reletting
Expenditures. Should an Event of Default occur, the sums on deposit in the Reletting Reserve
Escrow Account may be applied by Lender in payment of any Reletting Expenditures or may be applied
to the payment of the Debt or any other charges affecting all or any portion of the Property, as
Lender, in its sole discretion, may determine; provided, however, that no such
application shall be deemed to have been made by operation of law or otherwise until actually made
by Lender as herein provided.

     (c) In the event that Borrower holds any letters of credit as security for obligations under
Leases, within thirty (30) days (or if any letters of credit may expire within such thirty (30) day
period, prior to the expiration of such letter of credit) of the occurrence of a monetary event of
default or a material non-monetary event of default under the related Lease, Borrower shall present
for draw and use all commercially reasonable efforts to draw the full amount which it is entitled
to draw under such letter of credit; provided, however, Borrower shall not be obliged to draw on
such letter of credit if (i) Borrower has submitted to Lender a plan of action to resolve any event
of default which gave rise to Borrower’s right to draw on the applicable letter of credit and
Lender shall, in its reasonable discretion, have consented to such plan or Borrower is precluded
from making a draw on the applicable letter of credit by applicable law, and (ii) the term of such
letter of credit will not expire prior to the implementation of such submitted plan. Borrower
shall deliver to Lender all security deposits which are applied against sums due to Borrower under
Leases (including, without limitation, all sums drawn on letters of credit held as security for
obligations of tenants under Leases) and Rent paid by or on behalf of any lessee under a Space
Lease in whole or partial consideration for the termination, cancellation or surrender of any Space
Lease including, without limitation, surrender or cancellation fees, buy-out fees or reimbursements
for tenant improvements or leasing commissions, within five (5) Business Days of receipt thereof
and all such sums shall be held in the Reletting Reserve Escrow Account and shall be disbursed
therefrom as set forth above.

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     Section 5.08. Recurring Replacement Reserve Escrow Account. Borrower hereby agrees to
pay all Recurring Replacement Expenditures with respect to the Property (without regard to the
amount of money then available in the Recurring Replacement Reserve Sub-Account or the Recurring
Replacement Reserve Escrow Account). Provided that (a) Lender has received written notice from
Borrower at least five (5) Business Days prior to the due date of any payment relating to Recurring
Replacement Expenditures and not more frequently than once each month, and further provided that no
Event of Default has occurred, (b) there are sufficient funds available in the Recurring
Replacement Reserve Escrow Account and (c) Borrower shall have theretofore furnished Lender with
lien waivers, copies of bills, invoices and other reasonable documentation as may be required by
Lender to establish that the Recurring Replacement Expenditures which are the subject of such
request represent amounts due for completed or partially completed capital work and improvements
performed at the Property, Lender shall make such payments out of the Recurring Replacement Reserve
Escrow Account.

     Provided that no Event of Default shall have occurred, all funds deposited into the Recurring
Replacement Reserve Escrow Account shall be held by Lender pursuant to the provisions of this
Security Instrument and shall be applied in payment of Recurring Replacement Expenditures. Should
an Event of Default occur, the sums on deposit in the Recurring Replacement Reserve Sub-Account and
the Recurring Replacement Reserve Escrow Account may be applied by Lender in payment of any
Recurring Replacement Expenditures or may be applied to the payment of the Debt or any other
charges affecting all or any portion of the Property, as Lender in its sole discretion may
determine; provided, however, that no such application shall be deemed to have been
made by operation of law or otherwise until actually made by Lender as herein provided.

     Section 5.09. Operation and Maintenance Expense Escrow Account. Borrower hereby
agrees to pay all Operating Expenses with respect to the Property (without regard to the amount of
money then available in the Operation and Maintenance Expense Sub-Account or the Operation and
Maintenance Expense Escrow Account). All funds allocated to the Operation and Maintenance Expense
Escrow Account shall be held by Lender pursuant to the provisions of this Security Instrument. Any
sums held in the Operation and Maintenance Expense Escrow Account shall be disbursed to Borrower
within five (5) Business Days of receipt by Lender from Borrower of (a) a written request for such
disbursement which shall indicate the Operating Expenses (exclusive of Basic Carrying Costs) for
which the requested disbursement is to pay and (b) if requested by Lender, an Officer’s Certificate
stating that no Operating Expenses with respect to the Property are more than sixty (60) days past
due; provided, however, in the event that Borrower legitimately disputes any
invoice for an Operating Expense, and (i) no Event of Default has occurred and is continuing
hereunder, (ii) Borrower shall have set aside adequate reserves for the payment of such disputed
sums together with all interest and late fees thereon, (iii) Borrower has complied with all the
requirements of this Security Instrument relating thereto, and (iv) the contesting of such sums
shall not constitute a default under any other instrument, agreement, or document to which Borrower
is a party, then Borrower may, after certifying to Lender as to items (i) through (iv) hereof,
contest such invoice. Together with each such request, Borrower shall furnish Lender with bills
and all other documents necessary for the payment of the Operating Expenses which are the subject
of such request. Borrower may request a

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disbursement from the Operation and Maintenance Expense
Escrow Account no more than one
(1) time per calendar month. Should an Event of Default occur and be continuing, the sums on
deposit in the Operation and Maintenance Expense Sub-Account or the Operation and Maintenance
Expense Escrow Account may be applied by Lender in payment of any Operating Expenses for the
Property or may be applied to the payment of the Debt or any other charges affecting all or any
portion of the Property as Lender, in its sole discretion, may determine; provided,
however, that no such application shall be deemed to have been made by operation of law or
otherwise until actually made by Lender as herein provided.

     Section 5.10. Rate Cap Agreement. (a) Borrower shall maintain the Rate Cap Agreement
at all times during the term of the Loan and pay all fees, charges and expenses incurred in
connection therewith. Borrower shall comply with all of its obligations under the terms of the
Rate Cap Agreement. All amounts paid by the issuer of the Rate Cap Agreement (the
“Counterparty”) to Borrower or Lender shall be deposited immediately into the Central
Account. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights
under the Rate Cap Agreement in the event of a default by the Counterparty. In the event that (a)
the long-term unsecured debt obligations of the Counterparty are downgraded by the Rating Agency
below “A+” or its equivalent or (b) the Counterparty shall default in any of its obligations under
the Rate Cap Agreement, Borrower shall, at the request of Lender, promptly but in all events within
five (5) Business Days, replace the Rate Cap Agreement with an agreement having identical payment
terms and maturity as the Rate Cap Agreement and which is otherwise in form and substance
substantially similar to the Rate Cap Agreement and otherwise acceptable to Lender with a cap
provider, the long-term unsecured debt of which is rated at least “AA-” (or its equivalent) by each
Rating Agency, or which will allow each Rating Agency to reaffirm their then current ratings of all
rated certificates issued in connection with the Securitization. In the event that Borrower fails
to maintain the Rate Cap Agreement as provided in this Section 5.10, Lender may purchase the Rate
Cap Agreement and the cost incurred by Lender in connection therewith shall be paid by Borrower to
Lender with interest thereon at the Default Rate from the date such cost is incurred until such
cost is paid by Borrower to Lender.

     Section 5.11. Curtailment Reserve Escrow Account. Funds deposited into the
Curtailment Reserve Escrow Account shall be held by Lender in the Curtailment Reserve Escrow
Account as additional security for the Loan until the Loan has been paid in full. Should an Event
of Default occur, the sums on deposit in the Curtailment Reserve Sub-Account and the Curtailment
Reserve Escrow Account may be applied by Lender to the payment of the Debt or other charges
affecting all or any portion of the Property, as Lender, in its sole discretion, may determine;
provided, however, that no such application shall be deemed to have been made by operation of law
or otherwise until actually made by Lender as herein provided.

     Section 5.12. Performance of Engineering Work. (a) Borrower has deposited with Lender
on the Closing Date an amount equal to the Initial Engineering Deposit. Borrower shall promptly
commence and diligently thereafter pursue to completion (without regard to the amount of money then
available in the Engineering Escrow Account) the Required Engineering Work prior to the six (6)
month anniversary of the Closing Date. After Borrower completes an item of Required Engineering
Work, Borrower may submit to Lender an invoice therefor with lien

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waivers and a statement from the
Engineer, reasonably acceptable to Lender, indicating that the portion of the Required Engineering
Work in question has been completed in compliance with all
Legal Requirements, and Lender shall, within twenty (20) days thereafter, although in no event
more frequently than once each month, reimburse such amount to Borrower from the Engineering Escrow
Account; provided, however, that Borrower shall not be reimbursed more than the
amount set forth on Exhibit D hereto as the amount allocated to the portion of the Required
Engineering Work for which reimbursement is sought.

     (b) From and after the date all of the Required Engineering Work is completed, Borrower may
submit a written request, which request shall be delivered together with final lien waivers and a
statement from the Engineer, as the case may be, reasonably acceptable to Lender, indicating that
all of the Required Engineering Work has been completed in compliance with all Legal Requirements,
and Lender shall, within twenty (20) days thereafter, disburse any balance of the Engineering
Escrow Account to Borrower. Should an Event of Default occur, the sums on deposit in the
Engineering Escrow Account may be applied by Lender in payment of any Required Engineering Work or
may be applied to the payment of the Debt or any other charges affecting all or any portion of the
Property, as Lender in its sole discretion may determine; provided, however, that
no such application shall be deemed to have been made by operation of law or otherwise until
actually made by Lender as herein provided.

     Section 5.13. Loss Proceeds. In the event of a casualty to the Property, unless
Lender elects, or is required pursuant to Article III hereof to make all of the Insurance Proceeds
available to Borrower for restoration, Lender and Borrower shall cause all such Insurance Proceeds
to be paid by the insurer directly to the Central Account, whereupon Lender shall, after deducting
Lender’s out of pocket costs of recovering and paying out such Insurance Proceeds, including
without limitation, reasonable attorneys’ fees, apply same to reduce the Debt in accordance with
the terms of the Note; provided, however, that if Lender elects, or is deemed to
have elected, to make the Insurance Proceeds available for restoration, all Insurance Proceeds in
respect of rent loss, business interruption or similar coverage shall be maintained in the Central
Account, to be applied by Lender in the same manner as Rent received with respect to the operation
of the Property; provided, further, however, that in the event that the
Insurance Proceeds with respect to such rent loss, business interruption or similar insurance
policy are paid in a lump sum in advance, Lender shall hold such Insurance Proceeds in a segregated
interest-bearing escrow account, which shall be an Eligible Account, shall estimate, in Lender’s
reasonable discretion, the number of months required for Borrower to restore the damage caused by
the casualty, shall divide the aggregate rent loss, business interruption or similar Insurance
Proceeds by such number of months, and shall disburse from such bank account into the Central
Account each month during the performance of such restoration such monthly installment of said
Insurance Proceeds. In the event that Insurance Proceeds are to be applied toward restoration,
Lender shall hold such funds in a segregated bank account at the Bank, which shall be an Eligible
Account, and shall disburse same in accordance with the provisions of Section 3.04 hereof. Unless
Lender elects, or is required pursuant to Section 6.01 hereof to make all of the Condemnation
Proceeds available to Borrower for restoration, Lender and Borrower shall cause all such
Condemnation

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Proceeds to be paid to the Central Account, whereupon Lender shall, after deducting
Lender’s out of pocket costs of recovering and paying out such Condemnation Proceeds, including
without limitation, reasonable attorneys’ fees, apply same to reduce the Debt in accordance with
the terms of the Note; provided, however, that any Condemnation Proceeds received
in connection with a temporary Taking shall be maintained in the Central Account, to
be applied by Lender in the same manner as Rent received with respect to the operation of the
Property; provided, further, however, that in the event that the
Condemnation Proceeds of any such temporary Taking are paid in a lump sum in advance, Lender shall
hold such Condemnation Proceeds in a segregated interest-bearing bank account, which shall be an
Eligible Account, shall estimate, in Lender’s reasonable discretion, the number of months that the
Property shall be affected by such temporary Taking, shall divide the aggregate Condemnation
Proceeds in connection with such temporary Taking by such number of months, and shall disburse from
such bank account into the Central Account each month during the pendency of such temporary Taking
such monthly installment of said Condemnation Proceeds. In the event that Condemnation Proceeds
are to be applied toward restoration, Lender shall hold such funds in a segregated bank account at
the Bank, which shall be an Eligible Account, and shall disburse same in accordance with the
provisions of Section 3.04 hereof. If any Loss Proceeds are received by Borrower, such Loss
Proceeds shall be received in trust for Lender, shall be segregated from other funds of Borrower,
and shall be forthwith paid into the Central Account, or paid to Lender to hold in a segregated
bank account at the Bank, in each case to be applied or disbursed in accordance with the foregoing.
Any Loss Proceeds made available to Borrower for restoration in accordance herewith, to the extent
not used by Borrower in connection with, or to the extent they exceed the cost of, such
restoration, shall be deposited into the Central Account, whereupon Lender shall apply same to
reduce the Debt in accordance with the terms of the Note.

     Section 5.14. Underwritten Rent Escrow Account. Borrower has deposited with Lender on
the Closing Date an amount equal to the Initial Underwritten Rent Deposit. Provided that no Event
of Default has occurred and is continuing, on each Payment Date set forth on Exhibit G, attached
hereto and made a part hereof, Lender shall transfer a sum equal to the amount specified on Exhibit
G to the Central Account from the Underwritten Rent Escrow Account. Should an Event of Default
occur, sums on deposit in the Underwritten Rent Escrow Account may be applied by Lender to the
payment of the Debt or any other charges affecting all or any portion of the Property, as Lender in
its sole discretion may determine; provided, however, that no such application
shall be deemed to have been made by operation of law or otherwise until actually made by Lender as
herein provided.

     Section 5.15. Debt Service Reserve Escrow Account. Borrower has deposited with Lender
on the Closing Date an amount equal to the Initial Debt Service Reserve Deposit in the Debt Service
Reserve Escrow Account. Provided that no Event of Default has occurred and is continuing,
commencing on the Payment Date occurring in August 2007 and on each Payment Date thereafter, an
amount equal to all sums required to be allocated pursuant to clauses (i) through (iii) of Section
5.05(a) minus Rent received during the Interest Accrual Period ending immediately prior to such
Payment Date shall be transferred from the Debt Service Reserve Escrow Account to the Debt Service
Payment Sub-Account. Should an Event of Default occur, sums on deposit in the Debt Service Reserve
Escrow Account may be applied by Lender to the payment of the Debt or any other charges affecting
all or any portion of the Property, as Lender in its sole discretion may determine; provided,
however, that no such application shall be deemed

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to have been made by operation of law or
otherwise until actually made by Lender as herein provided.

ARTICLE VI:  CONDEMNATION

     Section 6.01. Condemnation. (a) Borrower shall notify Lender promptly of the
commencement or threat of any Taking of the Property or any portion thereof. Lender is hereby
irrevocably appointed as Borrower’s attorney-in-fact, coupled with an interest, with exclusive
power to collect, receive and retain the proceeds of any such Taking as to which Borrower is or may
be entitled and to make any compromise or settlement in connection with such proceedings (subject
to Borrower’s reasonable approval, except after the occurrence and during the continuation of an
Event of Default, in which event Borrower’s approval shall not be required), subject to the
provisions of this Security Instrument; provided, however, that Borrower may participate in any
such proceedings (without regard to the extent of the Taking) and Borrower shall be authorized and
entitled to compromise or settle any such proceeding with respect to Condemnation Proceeds in an
amount less than five percent (5%) of the Loan Amount. Borrower shall execute and deliver to
Lender any and all instruments reasonably required in connection with any such proceeding promptly
after request therefor by Lender. Except as set forth above, Borrower shall not adjust,
compromise, settle or enter into any agreement with respect to such proceedings without the prior
consent of Lender. All Condemnation Proceeds are hereby assigned to and shall be paid to Lender to
be applied in accordance with the terms hereof. With respect to Condemnation Proceeds in an amount
in excess of five percent (5%) of the Loan Amount, Borrower hereby authorizes Lender to compromise,
settle, collect and receive such Condemnation Proceeds, and to give proper receipts and acquittance
therefor. Subject to the provisions of this Article VI, Lender may apply such Condemnation
Proceeds (less any reasonable out of pocket cost to Lender of recovering and paying out such
proceeds, including, without limitation, reasonable attorneys’ fees and disbursements and costs
allocable to inspecting any repair, restoration or rebuilding work and the plans and specifications
therefor) toward the payment of the Debt or to allow such proceeds to be used for the Work.

     (b) “Substantial Taking” shall mean (i) a Taking of such portion of the Property that
would, in Lender’s reasonable discretion, leave remaining a balance of the Property which would not
under then current economic conditions, applicable Development Laws and other applicable Legal
Requirements, permit the restoration of the Property so as to constitute a complete, rentable
facility of the same type as existed prior to the Taking, having adequate ingress and egress to the
Property, capable of producing a projected Net Operating Income (as reasonably determined by
Lender) yielding a projected Debt Service Coverage therefrom for the next two (2) years of not less
than the Required Debt Service Coverage or (ii) a Taking which occurs less than two (2) years prior
to the Maturity Date or (iii) a Taking which Lender is not reasonably satisfied could be repaired
within twelve (12) months and at least six (6) months prior to the Maturity Date or (iv) a Taking
of fifteen percent (15%) or more of the Premises.

     (c) In the case of a Substantial Taking, Condemnation Proceeds shall be payable to Lender in
reduction of the Debt but without any prepayment fee or charge of any kind and, if Borrower elects
to apply any Condemnation Proceeds it may receive pursuant to this Security Instrument to

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the
payment of the Debt, Borrower may prepay the balance of the Debt without any prepayment fee or
charge of any kind.

     (d) In the event of a Taking which is less than a Substantial Taking, Borrower at its sole
cost and expense (whether or not the award shall have been received or shall be sufficient for
restoration) shall proceed diligently to restore, or cause the restoration of, the remaining
Improvements not so taken, to maintain a complete, rentable, self-contained fully operational
facility of the same sort as existed prior to the Taking in as good a condition as is reasonably
possible. In the event of such a Taking, Lender shall receive the Condemnation Proceeds and shall
pay over the same:

          (i) first, provided no Default shall have occurred and be continuing, to Borrower to the
extent of any portion of the award as may be necessary to pay the reasonable cost of restoration of
the Improvements remaining, and

          (ii) second, to Lender, in reduction of the Debt without any prepayment premium or charge of
any kind.

If one or more Takings in the aggregate create a Substantial Taking, then, in such event, the
sections of this Article VI above applicable to Substantial Takings shall apply.

     (e) In the event Lender is obligated to or elects to make Condemnation Proceeds available for
the restoration or rebuilding of the Property, such proceeds shall be disbursed in the manner and
subject to the conditions set forth in Section 3.04(b) hereof. If, in accordance with this Article
VI, any Condemnation Proceeds are used to reduce the Debt, they shall be applied in accordance with
the provisions of the Note and, with no prepayment fee or charge of any kind. Borrower shall
promptly execute and deliver all instruments requested by Lender for the purpose of confirming the
assignment of the Condemnation Proceeds to Lender. Application of all or any part of the
Condemnation Proceeds to the Debt shall be made in accordance with the provisions of Sections 3.06
and 3.07 hereof. No application of the Condemnation Proceeds to the reduction of the Debt shall
have the effect of releasing the lien of this Security Instrument until the remainder of the Debt
has been paid in full. In the case of any Taking, Lender, to the extent that Lender has not been
reimbursed by Borrower, shall be entitled, as a first priority out of any Condemnation Proceeds, to
reimbursement for all out of pocket costs, fees and expenses reasonably incurred in the
determination and collection of any Condemnation Proceeds. All Condemnation Proceeds deposited
with Lender pursuant to this Section, until expended or applied as provided herein, shall be held
in accordance with Section 3.04(b) hereof and shall constitute additional security for the payment
of the Debt and the payment and performance of Borrower’s obligations, but Lender shall not be
deemed a trustee or other fiduciary with respect to its receipt of such Condemnation Proceeds or
any part thereof. All awards so deposited with Lender shall be held by Lender in an Eligible
Account, but Lender makes no representation or warranty as to the rate or amount of interest, if
any, which may accrue on any such deposit and shall have no liability in connection therewith. For
purposes hereof, any reference to the award shall be deemed to include interest, if any, which has
accrued thereon.

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ARTICLE VII:  LEASES AND RENTS

     Section 7.01. Assignment. (a) Borrower does hereby bargain, sell, assign and set over
unto Lender, all of Borrower’s interest in the Leases and Rents. The assignment of Leases and
Rents in this Section 7.01 is an absolute, unconditional and present assignment from Borrower to
Lender and not an assignment for security and the existence or exercise of Borrower’s revocable
license to collect Rent shall not operate to subordinate this assignment to any subsequent
assignment. The exercise by Lender of any of its rights or remedies pursuant to this Section
7.01 shall not be deemed to make Lender a mortgagee-in-possession. In addition to the provisions
of this Article VII, Borrower shall comply with all terms, provisions and conditions of the
Assignment.

     (b) So long as there shall exist and be continuing no Event of Default, Borrower shall have a
revocable license to take all actions with respect to all Leases and Rents, present and future,
including the right to collect and use the Rents, subject to the terms of this Security Instrument
and the Assignment.

     (c) In a separate instrument Borrower shall assign to Lender or its nominee by specific or
general assignment, any and all Leases, such assignments to be in form and content reasonably
acceptable to Lender, but subject to the provisions of Section 7.01(a) and (b) hereof. Borrower
agrees to deliver to Lender, within thirty (30) days after Lender’s request, a true and complete
copy of every Lease.

     (d) The rights of Lender contained in this Article VII, the Assignment or any other assignment
of any Lease shall not result in any obligation or liability of Lender to Borrower or any lessee
under a Lease or any party claiming through any such lessee.

     (e) At any time after an Event of Default, the license granted hereinabove may be revoked by
Lender, and Lender or a receiver appointed in accordance with this Security Instrument may enter
upon the Property, and collect, retain and apply the Rents toward payment of the Debt in such
priority and proportions as Lender in its sole discretion shall deem proper; provided, however,
that if the Event of Default that giving rise to such revocation is (i) cured by Borrower or (ii)
waived by Lender, the Borrower’s license shall be reinstated.

     (f) In addition to the rights which Lender may have herein, upon the occurrence of any Event
of Default and during the continuance thereof, Lender, at its option, may require Borrower to pay
monthly in advance to Lender, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such part of the Property as may be used and
occupied by Borrower and may require Borrower to vacate and surrender possession of the Property to
Lender or to such receiver and, in default thereof, Borrower may be evicted by summary proceedings
or otherwise.

     Section 7.02. Management of Property. (a) Borrower shall manage the Property or cause
the Property to be managed in a manner which is consistent with the Approved Manager Standard. All
Space Leases shall provide for rental rates comparable to then existing local market rates and
terms and conditions which constitute good and prudent business practice and

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are consistent with
prevailing market terms and conditions, and shall be arms-length transactions. All Leases shall be
on a form previously approved by Lender and shall provide that they are subordinate to this
Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver
copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed
Leases for the Property shall be subject to the prior written approval of Lender, such approval not
to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into
new leases with unrelated third parties without obtaining the prior consent of Lender, provided
that: (i) the proposed leases conform with the applicable
requirements of this Section 7.02; (ii) the space to be leased pursuant to such proposed lease
together with any space leased or to be leased to an Affiliate of the tenant thereunder does not
exceed 25,000 square feet. Lender’s consent to any Lease shall be deemed given, if the first
correspondence from Borrower to Lender requesting such approval is in an envelope marked “PRIORITY”
and contains a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF
YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN SEVEN (7)
BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and is accompanied by the information and
documents required above and any other information reasonably requested by Lender in writing prior
to the expiration of such seven (7) Business Day period in order to adequately review the same has
been delivered and, if Lender fails to respond or to expressly deny such request for approval in
writing within the seven (7) Business Day period, a second notice is delivered to Lender from
Borrower in an envelope marked “PRIORITY” requesting approval containing a bold-faced, conspicuous
legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY
DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN THREE (3) BUSINESS DAYS, YOUR APPROVAL SHALL BE
DEEMED GIVEN” and Lender fails to respond or to expressly deny such request for approval within the
three (3) Business Day period. In the event Lender does not approve a Space Lease, the approval of
which has been requested by Borrower, Lender shall upon receipt of request by Borrower, give
Borrower an explanation of why such consent was denied. In the event that all materials reasonably
required by Lender in connection with the review and approval by Lender of a Space Lease are
delivered to Lender simultaneously with Borrower’s original request for approval, Lender shall not
disapprove a Space Lease based solely upon insufficient time to review such request.

     (b) Borrower (i) shall observe and perform all of its material obligations under the Leases
pursuant to applicable Legal Requirements and shall not do or knowingly permit to be done anything
to impair the value of the Leases as security for the Debt; (ii) shall promptly send copies to
Lender of all notices of default which Borrower shall receive under the Leases; (iii) shall,
consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions
contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under
the Leases more than one (1) month in advance (except that Borrower may collect in advance such
security deposits as are permitted pursuant to applicable Legal Requirements and are commercially
reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s
interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this
Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender
thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall

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not convey,
transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the
Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify
or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such
guaranty (except as required pursuant to the express terms of any existing Major Space Lease or
Major Space Lease hereafter approved by Lender); (ix) shall, in accordance with the Approved
Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and
enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or
materially modify, alter or amend any Major Space Lease or Property Agreement
without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi)
shall, without limitation to any other provision hereof, execute and deliver at the request of
Lender all such further assurances, confirmations and assignments in connection with the Property
as are required herein and as Lender shall from time to time reasonably require.

     (c) All security deposits of lessees, whether held in cash or any other form, shall be treated
by Borrower as trust funds, shall not be commingled with any other funds of Borrower and, if cash,
shall be deposited by Borrower in the Security Deposit Account. Any bond or other instrument which
Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements
shall be maintained in full force and effect unless replaced by cash deposits as hereinabove
described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted
pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or
be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements
and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender
with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing.
Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon
Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits
(and any interest thereon) to Lender to be held by Lender in accordance with the terms of the
Leases and all Legal Requirements.

     (d) If requested by Lender, Borrower shall use commercially reasonable efforts to furnish, or
shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements
in accordance with Regulation AB for any lessee of the Property if, in connection with a
Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated
lessees, a concentration within all of the mortgage loans included or expected to be included, as
applicable, in such Securitization such that such lessee or group of affiliated lessees would
constitute a Significant Obligor; provided, however, that in the event the related Space Lease does
not require the related lessee to provide the foregoing information, Borrower shall use
commercially reasonable efforts to cause the applicable lessee to furnish such information.

     (e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all
times by Manager pursuant to the management agreement reasonably approved by Lender (the
“Management Agreement”), (ii) after Borrower has knowledge of a fifty percent (50%) or more
change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a
“Manager Control Notice”) and (iii) the Management Agreement may be terminated

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by Lender at
any time for cause (including, but not limited to, Manager’s gross negligence, misappropriation of
funds, willful misconduct or fraud) or at any time following (A) the occurrence of an Event of
Default, or (B) the receipt of a Manager Control Notice, and a substitute managing agent shall be
appointed by Borrower, subject to Lender’s prior written approval, which may be given or withheld
in Lender’s sole discretion and which may be conditioned on, inter alia, a letter from each Rating
Agency confirming that any rating issued by the Rating Agency in connection with a Securitization
will not, as a result of the proposed change of Manager, be downgraded from the then current
ratings thereof, qualified or withdrawn. Borrower may from time to time appoint a successor
manager to manage the Property with Lender’s prior written consent which consent shall not be
unreasonably withheld
or delayed, provided that any such successor manager shall be a reputable management company
which meets the Approved Manager Standard and each Rating Agency shall have confirmed in writing
that any rating issued by the Rating Agency in connection with a Securitization will not, as a
result of the proposed change of Manager, be downgraded from the then current ratings thereof,
qualified or withdrawn. Lender hereby approves as of the date hereof Grubb & Ellis Management
Services, Inc., a Delaware corporation, Grubb & Ellis Realty Advisers, Inc., a Delaware
corporation, Grubb & Ellis Company, a Delaware corporation or any Affiliate of any such entities
that is controlled by or under common control with either Grubb and Ellis Company or Grubb & Ellis
Realty Advisers, Inc. as Manager. Borrower further covenants and agrees that Borrower shall
require Manager (or any successor managers) to maintain at all times during the term of the Loan
worker’s compensation insurance as required by Governmental Authorities.

     (f) Lender shall, upon request of Borrower, enter into a subordination, nondisturbance and
attornment agreement (“SNDA”) with respect to each proposed tenant entering into a Lease in
compliance with the requirements of this Security Instrument; provided, that such Lease is
(i) for at least five percent (5%) of the Total GLA, (ii) with a tenant reasonably approved by
Lender in writing prior to Borrower’s execution of any such Lease and (iii) on the standard form of
Lease previously approved in writing by Lender. Any SNDA executed by Lender shall be in Lender’s
then standard form and provide that in the event Lender or any purchaser at foreclosure shall
succeed to Borrower’s interest in the Property, the Leases of such tenants will remain in full
force and effect and be binding upon Lender or such purchaser and such tenant as though each were
original parties thereto.

ARTICLE VIII:  MAINTENANCE AND REPAIR

     Section 8.01. Maintenance and Repair of the Property; Alterations; Replacement of
Equipment. Borrower hereby covenants and agrees:

     (a) Borrower shall not (i) desert or abandon the Property, (ii) change the use of the Property
or cause or permit the use or occupancy of any part of the Property to be discontinued if such
discontinuance or use change would violate any zoning or other law, ordinance or regulation; (iii)
consent to or seek any lowering of the zoning classification, or greater zoning restriction
affecting the Property; or (iv) take any steps whatsoever to convert the Property, or any portion
thereof, to a condominium or cooperative form of ownership.

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     (b) Borrower shall, at its expense, (i) take good care of the Property including grounds
generally, and utility systems and sidewalks, roads, alleys, and curbs therein, and shall keep the
same in good, safe and insurable condition and in compliance with all applicable Legal
Requirements, (ii) promptly make all repairs to the Property, above grade and below grade, interior
and exterior, structural and nonstructural, ordinary and extraordinary, unforeseen and foreseen,
and maintain the Property in a manner appropriate for the facility in Borrower’s prudent business
judgment and (iii) not commit or suffer to be committed any intentional waste of the Property or do
or suffer to be done anything which will increase the risk of fire or other hazard to the Property
or impair the value thereof. Borrower shall keep the sidewalks, vaults, gutters and curbs
comprising, or adjacent to, the Property, clean and free from dirt, snow, ice,
rubbish and obstructions. All repairs made by Borrower shall be made with first-class
materials, in a good and workmanlike manner, shall be equal or better in quality and class to the
original work and shall comply with all applicable Legal Requirements and Insurance Requirements.
To the extent any of the above obligations are obligations of tenants under Space Leases or Pad
Owners or other Persons under Property Agreements, Borrower may fulfill its obligations hereunder
by causing such tenants, Pad Owners or other Persons, as the case may be, to perform their
obligations thereunder. As used herein, the terms “repair” and “repairs” shall be deemed to
include all necessary replacements.

     (c) Borrower shall not demolish, remove, construct, or, except as otherwise expressly provided
herein, restore, or alter the Property or any portion thereof; nor consent to or permit any such
demolition, removal, construction, restoration, addition or alteration (hereinafter, referred to as
an “Alteration”) which would diminish the value of the Property without Lender’s prior
written consent in each instance, which consent shall not be unreasonably withheld, conditioned or
delayed; provided, however, notwithstanding the foregoing, Borrower may make
Alterations to the Improvements provided that: (i) a Default (whether or not it constitutes an
Event of Default) shall not have occurred and be continuing; (ii) the pro-forma Debt Service
Coverage (as determined by Lender in its reasonable discretion), during and after completion of
said Alterations will be at least equal to the Debt Service Coverage prior to the Alteration; (iii)
Borrower shall provide plans and specifications, which were prepared by an Architect or Engineer
and which were previously approved by all Governmental Authorities the approval of which is
required, to Lender for Lender’s approval, which approval shall not be unreasonably withheld; (iv)
such Alterations shall be performed by a licensed, if required by applicable law, reputable
construction company with experience with work similar in scope and type to the Alterations and
under the supervision of an Architect or Engineer; (v) such Alterations shall not result in the
Property violating any Environmental Laws, Legal Requirements, Leases or Property Agreements; (vi)
such Alterations shall not result in a Material Adverse Effect; (vii) such Alterations shall be
performed in a first class manner, (viii) Lender shall have the right to inspect the Alterations at
all reasonable times during the construction process upon reasonable prior notice; (ix) such
Alterations shall be completed within nine (9) months of commencement and at least twelve (12)
months prior to Maturity; (x) an Architect or Engineer or Person otherwise reasonably acceptable to
Lender shall have delivered to Lender a certificate estimating the costs of completing the
Alterations and Borrower shall have delivered to Lender (A) evidence satisfactory to Lender in its
reasonable discretion of cash in an amount equal to the estimated costs of completion of the
Alterations, or (B) a completion bond in form, substance

74

 

and issued by a surety company reasonably
acceptable to Lender; (xi) the total cost of the Alterations shall not exceed five percent (5%) of
the Loan Amount, obtained by Borrower at Borrower’s sole cost and expense or such other evidence as
may be acceptable to Lender; and (xii) Borrower shall diligently pursue completion of the
Alterations; provided, however, Borrower may make structural or exterior Alterations to the
Improvements or interior Alterations of a non-structural type without Lender’s prior written
consent provided that the aggregate cost of such Alterations does not exceed $250,000.00. Neither
the approval by Lender of any required plans and specifications for the Alterations nor the
inspection by Lender of the Alterations shall make Lender responsible for the preparation of such
plans and specifications, or the compliance of such plans and specifications or the Alterations,
with any applicable law, regulation, ordinance, covenant or agreement.

     (d) Borrower represents and warrants to Lender that (i) there are no fixtures, machinery,
apparatus, tools, equipment or articles of personal property attached or appurtenant to, or located
on, or used in connection with the management, operation or maintenance of the Property, except for
the Equipment and equipment leased by Borrower for the management, operation or maintenance of the
Property in accordance with the Loan Documents; (ii) the Equipment and the leased equipment
constitute all of the fixtures, machinery, apparatus, tools, equipment and articles of personal
property necessary to the proper operation and maintenance of the Property; and (iii) all of the
Equipment is free and clear of all liens, except for the lien of this Security Instrument and the
Permitted Encumbrances. All right, title and interest of Borrower in and to all extensions,
improvements, betterments, renewals and appurtenances to the Property hereafter acquired by, or
released to, Borrower or constructed, assembled or placed by Borrower in the Property, and all
changes and substitutions of the security constituted thereby, shall be and, in each such case,
without any further mortgage, encumbrance, conveyance, assignment or other act by Lender or
Borrower, shall become subject to the lien and security interest of this Security Instrument as
fully and completely, and with the same effect, as though now owned by Borrower and specifically
described in this Security Instrument, but at any and all times Borrower shall execute and deliver
to Lender any documents Lender may reasonably deem necessary or appropriate for the purpose of
specifically subjecting the same to the lien and security interest of this Security Instrument.

     (e) Notwithstanding the provisions of this Security Instrument to the contrary, Borrower shall
have the right, at any time and from time to time, to remove and dispose of Equipment which may
have become obsolete or unfit for use or which is no longer useful in the management, operation or
maintenance of the Property. Borrower shall promptly replace any such Equipment so disposed of or
removed with other Equipment of equal value and utility, free of any security interest or superior
title, liens or claims; except that, if by reason of technological or other developments,
replacement of the Equipment so removed or disposed of is not necessary or desirable for the proper
management, operation or maintenance of the Property, Borrower shall not be required to replace the
same. All such replacements or additional equipment shall be deemed to constitute “Equipment” and
shall be covered by the security interest herein granted.

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ARTICLE IX:  TRANSFER OR ENCUMBRANCE OF THE PROPERTY

     Section 9.01. Other Encumbrances. Borrower shall not further encumber or permit the
further encumbrance in any manner (whether by grant of a pledge, security interest or otherwise) of
the Property or any part thereof or interest therein, including, without limitation, of the Rents
therefrom. In addition, Borrower shall not further encumber and shall not permit the further
encumbrance in any manner (whether by grant of a pledge, security interest or otherwise) of
Borrower or any direct or indirect interest in Borrower except as expressly permitted pursuant to
this Security Instrument.

     Section 9.02. No Transfer. Borrower acknowledges that Lender has examined and relied
on the expertise of Borrower and, if applicable, General Partner, in owning and operating
properties such as the Property in agreeing to make the Loan and will continue to rely on
Borrower’s ownership of the Property as a means of maintaining the value of the Property as
security for repayment of the Debt and Borrower acknowledges that Lender has a valid interest
in maintaining the value of the Property. Borrower shall not Transfer, nor permit any
Transfer, without the prior written consent of Lender, which consent Lender may withhold in its
sole and absolute discretion. 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 without Lender’s consent. This provision shall apply to every
Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any
previous Transfer.

     Section 9.03. Due on Sale. Lender may declare the Debt immediately due and payable
upon any Transfer or further encumbrance without Lender’s consent without regard to whether any
impairment of its security or any increased risk of default hereunder can be demonstrated. This
provision shall apply to every Transfer or further encumbrance of the Property or any part thereof
or interest in the Property or in Borrower regardless of whether voluntary or not, or whether or
not Lender has consented to any previous Transfer or further encumbrance of the Property or
interest in Borrower.

     Section 9.04. Permitted Transfers. Notwithstanding any provisions of this Security
Instrument or any other Loan Documents to the contrary, Lender hereby permits transfers of the
Property or any part thereof or direct or indirect interests in Borrower (i) to Grubb & Ellis
Realty Advisors, Inc. (“GAV”), and (ii) to a member of Borrower (or a wholly owned
Affiliate of such member) in each case of which Lender has received notice and provided that (x)
either the Person which Controls directly or indirectly Borrower, shall remain in Control of
Borrower or Borrower shall be controlled by GAV, and (y) GERA Property Acquisition LLC
(“GP”) shall continue to own, directly or indirectly, at least thirty-five percent (35%)
interest in, Borrower. In addition, Lender hereby permits (a) transfers of indirect interests in
Borrower and GP provided that the Person which Controls directly or indirectly Borrower, shall
remain in control of Borrower and GP shall continue to own, directly or indirectly, at least a
thirty-five percent (35%) interest in, Borrower; and (b) any Grubb Transfer (as defined below).
“Grubb Transfer” means any of the following transfers or events:

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     (A) the issuance, conveyance, sale, assignment, transfer, pledge, encumbrance or other
disposition of any direct or indirect interest in Grubb & Ellis Company (“G&E”), GAV or any
Grubb Successor (hereinafter defined) or one of their wholly-owned Affiliates, provided that G&E,
GAV or one of its wholly-owned Affiliates shall at all times be the sole trustee, general partner
or managing member, as the case may be, of Borrower; or

     (B) the issuance, conveyance, sale, assignment, transfer, pledge, encumbrance or other
disposition of any direct or indirect interest in G&E or GAV; or

     (C) the merger between GP, G&E and/or GAV and another entity, or any other reorganization of
GP, G&E and/or GAV so long as (i) GP, G&E and/or GAV, as the case may be, is the surviving entity
after such merger or consolidation, or (ii) the individuals constituting GP’s, G&E’s or GAV’s Board
of Trustees or Board of Directors immediately prior to such merger or consolidation represent a
majority of G&E’s or GAV’s Board of Directors of Board of Trustees immediately after such merger or
consolidation (the surviving entity in any such merger or reorganization permitted by this proviso,
is referred to as the “Grubb Successor”) and G&E or
GAV or a wholly owned subsidiary is the sole trustee, general partner or managing member of GP
(or any Grubb Successor); and

     (D) provided that Lender is given prior written notice thereof, a Transfer of the Property to
any wholly-owned Affiliate of Borrower, GP, G&E, or GAV.

provided that in each of the foregoing cases (a) no such Transfer shall release the liability of
Borrower under the Loan Documents and Lender may require, as a condition to the assumption, that
all such obligations be assumed (subject to the limitations on recourse herein) by the transferee
under as assumption agreement in form and substance reasonably acceptable to Lender which may
include such financial reporting requirements with respect to the transferee as Lender may
reasonably require and (b) Lender shall have received information satisfactory to it confirming
that neither the proposed transferee nor any Affiliate of the proposed transferee (i) is a
Prohibited Person or would, if such Person assumes the Loan or obtains an interest in Borrower,
cause Lender to be in violation of Legal Requirements or (ii) has been within the seven (7) years
prior to the proposed transfer, subject to any material uncured event of default in connection
with a loan financing which resulted in litigation or acceleration of indebtedness or the subject
to any bankruptcy, reorganization or insolvency proceeding and, in the event any Person (as
“Principal Transferee”) who does not, as of the Closing Date, own of Control, directly or
indirectly, 49% or more of the stock, partnership interest or membership interest, as applicable,
in Borrower acquires directly or indirectly, 49% or more of the stock, partnership interest or
membership interest, as applicable, in Borrower as a result of such transfer, conveyance,
assignment, sale, mortgaging, encumbrance, pledging, hypothecation or granting of a security
interest, Lender shall be furnished an opinion, in form and substance and from counsel reasonably
satisfactory to Lender, substantially similar to the Insolvency Opinion which discusses the
substantive non-consolidation of Borrower with the Principal Transferee in the event of bankruptcy,
insolvency or similar proceeding relating to the Principal Transferee.

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ARTICLE X:  CERTIFICATES

     Section 10.01. Estoppel Certificates. (a) After request by Lender not more than three
(3) times in any calendar year, Borrower, within fifteen (15) days and at its expense, will furnish
Lender with a statement, duly acknowledged and certified, setting forth (i) the amount of the
original principal amount of the Note, and the unpaid principal amount of the Note, (ii) the rate
of interest of the Note, (iii) the date payments of interest and/or principal were last paid, (iv)
any offsets or defenses to the payment of the Debt, and if any are alleged, the nature thereof, (v)
that the Note, this Security Instrument and the other Loan Documents have not been modified or if
modified, giving particulars of such modification and (vi) that there has occurred and is then
continuing no Default or if such Default exists, the nature thereof, the period of time it has
existed, and the action being taken to remedy such Default.

     (b) Within fifteen (15) days after written request by Borrower, Lender shall furnish to
Borrower a written statement confirming the amount of the Debt, the maturity date of the Note, the
rate of interest of the Note and the date to which interest has been paid.

     (c) After request by Lender, provided an Event of Default has not occurred, not more than once
in any calendar year, Borrower shall use all reasonable efforts to obtain estoppel certificates
from tenants in form and substance reasonably acceptable to Lender.

ARTICLE XI:  NOTICES

     Section 11.01. Notices. Any notice, demand, statement, request or consent made
hereunder shall be in writing and delivered personally or sent to the party to whom the notice,
demand or request is being made by Federal Express or other nationally recognized overnight
delivery service, as follows and shall be deemed given when delivered personally or one (1)
Business Day after being deposited with Federal Express or such other nationally recognized
delivery service:

	 	 	 	 	 
	 

	 	If to Lender:
	 	Wachovia Bank, National Association
	 

	 	 	 	Commercial Real Estate Services
	 

	 	 	 	8739 Research Drive URP 4
	 

	 	 	 	NC 1075
	 

	 	 	 	Charlotte, North Carolina 28262
	 

	 	 	 	Loan Number: 509850567
	 

	 	 	 	Attention: Portfolio Management
	 

	 	 	 	Fax No.: (704) 715-0036
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Proskauer Rose llp
	 

	 	 	 	1585 Broadway
	 

	 	 	 	New York, New York 10036
	 

	 	 	 	Attn: David J. Weinberger, Esq.
	 

	 	 	 	Fax No.: (212) 969-2900
	 
	 	 	 	 
	 

	 	If to Borrower:
	 	To Borrower, at the address first written above,

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	 	with copies to:
	 	Grubb & Ellis
	 

	 	 	 	500 West Monroe — Suite 2800
	 

	 	 	 	Chicago, Illinois 60661
	 

	 	 	 	Attn: General Counsel
	 

	 	 	 	Fax No.: (312) 207-1822
	 
	 	 	 	 
	 

	 	and
	 	DLA Piper US llp
	 

	 	 	 	203 North LaSalle Street — Suite 1900
	 

	 	 	 	Chicago, Illinois 60601
	 

	 	 	 	Attn: James L. Beard, Esq.
	 

	 	 	 	Fax No.: (312) 630-7379

or such other address as Borrower or Lender shall hereafter specify by not less than ten (10) days
prior written notice as provided herein; provided, however, that notwithstanding any provision of
this Article to the contrary, such notice of change of address shall be deemed given only upon
actual receipt thereof. Rejection or other refusal to accept or the inability to deliver because
of
changed addresses of which no notice was given as herein required shall be deemed to be receipt of
the notice, demand, statement, request or consent.

ARTICLE XII:  INDEMNIFICATION

     Section 12.01. Indemnification Covering Property. In addition, and without
limitation, to any other provision of this Security Instrument or any other Loan Document, Borrower
shall protect, indemnify and save harmless Lender and its successors and assigns, and each of their
agents, employees, officers, directors, stockholders, partners and members (collectively,
“Indemnified Parties”) for, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or nature, known or unknown,
contingent or otherwise, whether incurred or imposed within or outside the judicial process,
including, without limitation, reasonable attorneys’ fees and disbursements imposed upon or
incurred by or asserted against any of the Indemnified Parties by reason of (a) ownership of this
Security Instrument, the Assignment, the Property or any part thereof or any interest therein or
receipt of any Rents; (b) any accident, injury to or death of any person or loss of or damage to
property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks,
curbs, parking areas, streets or ways; (c) any use, nonuse or condition in, on or about, or
possession, alteration, repair, operation, maintenance or management of, the Property or any part
thereof or on the adjoining sidewalks, curbs, parking areas, streets or ways; (d) any failure on
the part of Borrower to perform or comply with any of the terms of this Security Instrument or the
Assignment; (e) performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof; (f) any claim by brokers, finders or
similar Persons claiming to be entitled to a commission in connection with any Lease or other
transaction involving the Property or any part thereof; (g) any Imposition including, without
limitation, any Imposition attributable to the execution, delivery, filing, or recording of any
Loan Document, Lease or memorandum thereof; (h) any lien or claim arising on or against the
Property or any part thereof under any Legal Requirement or any liability asserted against any of

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the Indemnified Parties with respect thereto; (i) any claim arising out of or in any way relating
to any tax or other imposition on the making and/or recording of this Security Instrument, the Note
or any of the other Loan Documents; (j) a Default under Sections 2.02(f), 2.02(g), 2.02(k), 2.02(t)
or 2.02(w) hereof, (k) the failure of any Person to file timely with the Internal Revenue Service
an accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, which may be required in connection with the Loan, or to supply a copy
thereof in a timely fashion to the recipient of the proceeds of the Loan; (l) the claims of any
lessee or any Person acting through or under any lessee or otherwise arising under or as a
consequence of any Lease or (m) the failure to pay any insurance premiums. Notwithstanding the
foregoing provisions of this Section 12.01 to the contrary, Borrower shall have no obligation to
indemnify the Indemnified Parties pursuant to this Section 12.01 for liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses relative to the foregoing which
result from Lender’s, and its successors’ or assigns’, willful misconduct or gross negligence. Any
amounts payable to Lender by reason of the application of this Section 12.01 shall constitute a
part of the Debt secured by this Security Instrument and the other Loan Documents and shall become
immediately due and payable and shall bear interest at the Default Rate from the date the
liability, obligation, claim, cost or expense is sustained by Lender, as
applicable, until paid. The provisions of this Section 12.01 shall survive the termination of
this Security Instrument whether by repayment of the Debt, foreclosure or delivery of a deed in
lieu thereof, assignment or otherwise. In case any action, suit or proceeding is brought against
any of the Indemnified Parties by reason of any occurrence of the type set forth in (a) through (m)
above, Borrower shall, at Borrower’s expense, resist and defend such action, suit or proceeding or
will cause the same to be resisted and defended by counsel at Borrower’s expense for the insurer of
the liability or by counsel designated by Borrower (unless reasonably disapproved by Lender
promptly after Lender has been notified of such counsel); provided, however, that
nothing herein shall compromise the right of Lender (or any other Indemnified Party) to appoint its
own counsel at Borrower’s expense for its defense with respect to any action which, in the
reasonable opinion of Lender or such other Indemnified Party, as applicable, presents a conflict or
potential conflict between Lender or such other Indemnified Party that would make such separate
representation advisable. Any Indemnified Party will give Borrower prompt notice after such
Indemnified Party obtains actual knowledge of any potential claim by such Indemnified Party for
indemnification hereunder. The Indemnified Parties shall not settle or compromise any action,
proceeding or claim as to which it is indemnified hereunder without notice to Borrower.
Notwithstanding the foregoing, so long as no Default has occurred and is continuing and Borrower is
resisting and defending such action, suit or proceeding as provided above in a prudent and
commercially reasonable manner, in order to obtain the benefit of this Section 12.01 with respect
to such action, suit or proceeding, Lender and the Indemnified Parties agree that they shall not
settle such action, suit or proceeding without obtaining Borrower’s consent which Borrower agrees
not to unreasonably withhold, condition or delay; provided, however, (x) if
Borrower is not diligently defending such action, suit or proceeding in a prudent and commercially
reasonable manner as provided above and Lender has provided Borrower with thirty (30) days’ prior
written notice, or shorter period if mandated by the requirements of the applicable law, and
Borrower has failed to correct such failure, or (y) failure to settle could, in Lender’s reasonable
judgment, expose leader to criminal liability, Lender may settle such action,

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suit or proceeding
without the consent of Borrower and be entitled to the benefits of this Section 12.01 with respect
to the settlement of such action, suit or proceeding.

ARTICLE XIII:  DEFAULTS

     Section 13.01. Events of Default. The Debt shall become immediately due at the option
of Lender upon any one or more of the following events (“Event of Default”):

     (a) if the final payment or prepayment premium, if any, due under the Note shall not be paid
on Maturity;

     (b) if any monthly payment of interest and/or principal due under the Note (other than the
sums described in (a) above) shall not be fully paid on the date upon which the same is due and
payable thereunder;

     (c) if payment of any sum (other than the sums described in (a) above or (b) above) required
to be paid pursuant to the Note, this Security Instrument or any other Loan Document
shall not be paid within five (5) days after Lender delivers written notice to Borrower that
same is due and payable thereunder or hereunder;

     (d) if Borrower, or if Borrower is a partnership, any general partner of Borrower, or, if
Borrower is a limited liability company, any member of Borrower shall institute or cause to be
instituted any proceeding for the termination or dissolution of Borrower or any such general
partner or member;

     (e) if the insurance policies required hereunder are not kept in full force and effect, or if
the insurance policies are not assigned and delivered to Lender as herein provided;

     (f) if Borrower attempts to assign its rights under this Security Instrument or any other Loan
Document or any interest herein or therein, or if any Transfer occurs other than in accordance with
the provisions hereof;

     (g) if any representation or warranty of Borrower made herein or in any other Loan Document or
in any certificate, report, financial statement or other instrument or agreement furnished to
Lender shall prove false or misleading in any material respect as of the date the representation or
warranty was made;

     (h) if Borrower or any general partner of Borrower shall make an assignment for the benefit of
creditors or shall admit in writing its inability to pay its debts generally as they become due;

     (i) if a receiver, liquidator or trustee of Borrower, or any general partner of Borrower shall
be appointed or if Borrower, shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced in, by Borrower or
if

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any proceeding for the dissolution or liquidation of Borrower shall be instituted; however, if
such appointment, adjudication, petition or proceeding was involuntary and not consented to by
Borrower upon the same not being discharged, stayed or dismissed within seventy five (75) days or
if Borrower shall generally not be paying its debts as they become due;

     (j) if Borrower shall be in default beyond any notice or grace period, if any, under any other
mortgage or deed of trust or security agreement covering any part of the Property without regard to
its priority relative to this Security Instrument; provided, however, this provision shall not be
deemed a waiver of the provisions of Article IX prohibiting further encumbrances affecting the
Property or any other provision of this Security Instrument;

     (k) if the Property becomes subject (i) to any lien which is superior to the lien of this
Security Instrument, other than a lien for real estate taxes and assessments not due and payable,
or (ii) to any mechanic’s, materialman’s or other lien which is or is asserted to be superior to
the lien of this Security Instrument, and such lien shall remain undischarged (by payment, bonding,
or otherwise) for twenty (20) days unless contested in accordance with the terms hereof;

     (l) if Borrower abandons all or a material portion of the Property, the Improvements or any
part thereof;

     (m) except as permitted in this Security Instrument, any material alteration, demolition or
removal of any of the Improvements without the prior consent of Lender;

     (n) if Borrower consummates a transaction which would cause this Security Instrument or
Lender’s rights under this Security Instrument, the Note or any other Loan Document to constitute a
non-exempt prohibited transaction under ERISA or result in a violation of a state statute
regulating government plans subjecting Lender to liability for a violation of ERISA or a state
statute; or

     (o) Intentionally omitted; or

     (p) if a default shall occur under any of the other terms, covenants or conditions of the
Note, this Security Instrument or any other Loan Document, other than as set forth in (a) through
(o) above, for ten (10) days after notice 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 or an additional thirty (30) days if Borrower is diligently and continuously
effectuating a cure of a curable non-monetary default, other than as set forth in (a) through (o)
above.

     Section 13.02. Remedies. (a) Upon the occurrence and during the continuance of any
Event of Default, Lender may, in addition to any other rights or remedies available to it hereunder
or under any other Loan Document, at law or in equity, take such action, without notice or demand,
as it reasonably deems advisable to protect and enforce its rights against Borrower and in and to
the Property including, but not limited to, the following actions, each of which may be pursued
singly, concurrently or otherwise, at such time and in such order as Lender may determine, in its
sole discretion, without impairing or otherwise affecting any other

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rights and remedies of Lender
hereunder, at law or in equity: (i) declare all or any portion of the unpaid Debt to be
immediately due and payable; provided, however, that upon the occurrence of any of the events
specified in Section 13.01(i), the entire Debt will be immediately due and payable without notice
or demand or any other declaration of the amounts due and payable; or (ii) bring an action to
foreclose this Security Instrument and without applying for a receiver for the Rents, but subject
to the rights of the tenants under the Leases, enter into or upon the Property or any part thereof,
either personally or by its agents, nominees or attorneys, and dispossess Borrower and its agents
and servants therefrom, and thereupon Lender may (A) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of the Property and conduct
the business thereat, (B) make alterations, additions, renewals, replacements and improvements to
or on the Property or any part thereof, (C) exercise all rights and powers of Borrower with respect
to the Property or any part thereof, whether in the name of Borrower or otherwise, including,
without limitation, the right to make, cancel, enforce or modify Leases, obtain and evict tenants,
and demand, sue for, collect and receive all earnings, revenues, rents, issues, profits and other
income of the Property and every part thereof, and (D) apply the receipts from the Property or any
part thereof to the payment of the Debt, after deducting therefrom all expenses (including, without
limitation, reasonable attorneys’ fees and disbursements) reasonably incurred in connection with
the aforesaid operations and all amounts necessary to pay the Impositions, insurance and other
charges in connection with the Property or any part thereof, as well as just and reasonable
compensation for the services of Lender’s
third-party agents; or (iii) have an appraisal or other valuation of the Property or any part
thereof performed by an Appraiser (and Borrower covenants and agrees it shall cooperate in causing
any such valuation or appraisal to be performed) and any cost or expense incurred by Lender in
connection therewith shall constitute a portion of the Debt and be secured by this Security
Instrument and shall be immediately due and payable to Lender with interest, at the Default Rate,
until the date of receipt by Lender; or (iv) sell the Property or institute proceedings for the
complete foreclosure of this Security Instrument, or take such other action as may be allowed
pursuant to Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument in which case the Property or any part thereof may be sold for cash or credit in one or
more parcels; or (v) with or without entry, and to the extent permitted and pursuant to the
procedures provided by applicable Legal Requirements, institute proceedings for the partial
foreclosure of this Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security Instrument for the
portion of the Debt then due and payable, subject to the lien of this Security Instrument
continuing unimpaired and without loss of priority so as to secure the balance of the Debt not then
due; or (vi) sell the Property or any part thereof and any or all estate, claim, demand, right,
title and interest of Borrower therein and rights of redemption thereof, pursuant to power of sale
or otherwise, at one or more sales, in whole or in parcels, in any order or manner, at such time
and place, upon such terms and after such notice thereof as may be required or permitted by law, at
the discretion of Lender, and in the event of a sale, by foreclosure or otherwise, of less than all
of the Property, this Security Instrument shall continue as a lien on the remaining portion of the
Property; or (vii) institute an action, suit or proceeding in equity for the specific performance
of any covenant, condition or agreement contained in the Loan Documents, or any of them; or (viii)
recover judgment on the Note or any guaranty either before, during or after (or in lieu of) any
proceedings for the enforcement of this Security Instrument; or (ix) apply, ex
parte, for the

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appointment of a custodian, trustee, receiver, keeper, liquidator or
conservator of the Property 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 Rent with
respect to any of the Property pursuant to this Security Instrument or the Assignment; or (x)
require, at Lender’s option, Borrower to pay monthly in advance to Lender, or any receiver
appointed to collect the Rents, the fair and reasonable rental value for the use and occupation of
any portion of the Property occupied by Borrower and may require Borrower to vacate and surrender
possession to Lender of the Property or to such receiver and Borrower may be evicted by summary
proceedings or otherwise; or (xi) without notice to Borrower (A) apply all or any portion of the
cash collateral in any Sub-Account and Escrow Account, including any interest and/or earnings
therein, to carry out the obligations of Borrower under this Security Instrument and the other Loan
Documents, to protect and preserve the Property and for any other purpose permitted under this
Security Instrument and the other Loan Documents and/or (B) have all or any portion of such cash
collateral immediately paid to Lender to be applied against the Debt in the order and priority set
forth in the Note; or (xii) pursue any or all such other rights or remedies as Lender may have
under applicable law or in equity; provided, however, that the provisions of this Section 13.02(a)
shall not be construed to extend or modify any of the notice requirements or
grace periods provided for hereunder or under any of the other Loan Documents. Borrower
hereby waives, to the fullest extent permitted by Legal Requirements, any defense Borrower might
otherwise raise or have by the failure to make any tenants parties defendant to a foreclosure
proceeding and to foreclose their rights in any proceeding instituted by Lender.

     (b) Any time after an Event of Default Lender shall have the power to sell the Property or any
part thereof at public auction, in such manner, at such time and place, upon such terms and
conditions, and upon such public notice as Lender may deem best for the interest of Lender, or as
may be required or permitted by applicable law, consisting of advertisement in a newspaper of
general circulation in the jurisdiction and for such period as applicable law may require and at
such other times and by such other methods, if any, as may be required by law to convey the
Property in fee simple by Lender’s deed with special warranty of title to and at the cost of the
purchaser, who shall not be liable to see to the application of the purchase money. The proceeds
or avails of any sale made under or by virtue of this Section 13.02, together with any other sums
which then may be held by Lender under this Security Instrument, whether under the provisions of
this Section 13.02 or otherwise, shall be applied as follows:

First: To the payment of the third-party costs and expenses reasonably incurred in
connection with any such sale and to advances, fees and expenses, including, without
limitation, reasonable fees and expenses of Lender’s legal counsel as applicable, and of any
judicial proceedings wherein the same may be made, and of all expenses, liabilities and
advances reasonably made or incurred by Lender under this Security Instrument, together with
interest as provided herein on all such advances made by Lender, and all

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Impositions, except
any Impositions or other charges subject to which the Property shall have been sold;

Second: To the payment of the whole amount then due, owing and unpaid under the Note for
principal and interest thereon, with interest on such unpaid principal at the Default Rate
from the date of the occurrence of the earliest Event of Default that formed a basis for
such sale until the same is paid;

Third: To the payment of any other portion of the Debt required to be paid by Borrower
pursuant to any provision of this Security Instrument, the Note, or any of the other Loan
Documents; and

Fourth: The surplus, if any, to Borrower unless otherwise required by Legal Requirements.

Lender and any receiver or custodian of the Property or any part thereof shall be liable to account
for only those rents, issues, proceeds and profits actually received by it.

     (c) Lender may adjourn from time to time any sale by it to be made under or by virtue of this
Security Instrument by announcement at the time and place appointed for such sale or for such
adjourned sale or sales and, except as otherwise provided by any applicable provision of Legal
Requirements, Lender, without further notice or publication, may make such sale at the time and
place to which the same shall be so adjourned.

     (d) Upon the completion of any sale or sales made by Lender under or by virtue of this Section
13.02, Lender, or any officer of any court empowered to do so, shall execute and deliver to the
accepted purchaser or purchasers a good and sufficient instrument, or good and sufficient
instruments, granting, conveying, assigning and transferring all estate, right, title and interest
in and to the property and rights sold. Lender is hereby irrevocably appointed the true and lawful
attorney-in-fact of Borrower (coupled with an interest), in its name and stead, to make all
necessary conveyances, assignments, transfers and deliveries of the property and rights so sold and
for that purpose Lender may execute all necessary instruments of conveyance, assignment, transfer
and delivery, and may substitute one or more Persons with like power, Borrower hereby ratifying and
confirming all that its said attorney-in-fact or such substitute or substitutes shall lawfully do
by virtue hereof. Nevertheless, Borrower, if so requested by Lender, shall ratify and confirm any
such sale or sales by executing and delivering to Lender, or to such purchaser or purchasers all
such instruments as may be advisable, in the sole judgment of Lender, for such purpose, and as may
be designated in such request. Any such sale or sales made under or by virtue of this Section
13.02, whether made under the power of sale herein granted or under or by virtue of judicial
proceedings or a judgment or decree of foreclosure and sale, shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of
Borrower in and to the property and rights so sold, and shall, to the fullest extent permitted
under Legal Requirements, be a perpetual bar, both at law and in equity against Borrower and
against any and all Persons claiming or who may claim the same, or any part thereof, from, through
or under Borrower.

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     (e) In the event of any sale made under or by virtue of this Section 13.02 (whether made under
the power of sale herein granted or under or by virtue of judicial proceedings or a judgment or
decree of foreclosure and sale), the entire Debt immediately thereupon shall, anything in the Loan
Documents to the contrary notwithstanding, become due and payable.

     (f) Upon any sale made under or by virtue of this Section 13.02 (whether made under the power
of sale herein granted or under or by virtue of judicial proceedings or a judgment or decree of
foreclosure and sale), Lender may bid for and acquire the Property or any part thereof and in lieu
of paying cash therefor may make settlement for the purchase price by crediting upon the Debt the
net sales price after deducting therefrom the expenses of the sale and the costs of the action.

     (g) No recovery of any judgment by Lender and no levy of an execution under any judgment upon
the Property or any part thereof or upon any other property of Borrower shall release the lien of
this Security Instrument upon the Property or any part thereof, or any liens, rights, powers or
remedies of Lender hereunder, but such liens, rights, powers and remedies of Lender shall continue
unimpaired until all amounts due under the Note, this Security Instrument and the other Loan
Documents are paid in full.

     (h) Upon the exercise by Lender of any power, right, privilege, or remedy pursuant to this
Security Instrument which requires any consent, approval, registration, qualification, or
authorization of any Governmental Authority, Borrower agrees to execute and deliver, or will cause
the execution and delivery of, all applications, certificates, instruments, assignments and other
documents and papers that Lender or any purchaser of the Property may be required to
obtain for such governmental consent, approval, registration, qualification, or authorization
and Lender is hereby irrevocably appointed the true and lawful attorney-in-fact of Borrower
(coupled with an interest), in its name and stead, to execute all such applications, certificates,
instruments, assignments and other documents and papers.

     Section 13.03. Payment of Debt After Default. If, following the occurrence of any
Event of Default, Borrower shall tender payment of an amount sufficient to satisfy the Debt in
whole or in part at any time prior to a foreclosure sale of the Property, and if at the time of
such tender prepayment of the principal balance of the Note is not permitted by the Note or this
Security Instrument, Borrower shall, in addition to the entire Debt, also pay to Lender a sum equal
to interest which would have accrued on the principal balance of the Note at an interest rate equal
to the LIBOR Margin for the Note plus the greater of (x) the then current LIBOR Rate and (y) the
then current average yield for “This Week” as published by the Federal Reserve Board during the
most recent full week preceding the date on which Borrower tenders such payment in Federal Reserve
Statistical Release H.15 (519) for instruments having a ten (10) year maturity, from the date of
such tender to the earlier of (a) the Maturity Date or (b) the first day of the period during which
prepayment of the principal balance of the Note would have been permitted together with a
prepayment consideration equal to the prepayment consideration which would have been payable as of
the first day of the period during which prepayment would have been permitted. If at the time of
such tender, prepayment of the principal balance of the Note is permitted, such tender by Borrower
shall be deemed to be a voluntary prepayment of the

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principal balance of the Note and Borrower
shall, in addition to the entire Debt, also pay to Lender the applicable prepayment consideration
specified in the Note and this Security Instrument.

     Section 13.04. Possession of the Property. Upon the occurrence of any Event of
Default and the acceleration of the Debt or any portion thereof, Borrower, if an occupant of the
Property or any part thereof, upon demand of Lender, shall immediately surrender possession of the
Property (or the portion thereof so occupied) to Lender, and if Borrower is permitted to remain in
possession, the possession shall be as a month-to-month tenant of Lender and, on demand, Borrower
shall pay to Lender monthly, in advance, a reasonable rental for the space so occupied and in
default thereof Borrower may be dispossessed. The covenants herein contained may be enforced by a
receiver of the Property or any part thereof. Nothing in this Section 13.04 shall be deemed to be
a waiver of the provisions of this Security Instrument making the Transfer of the Property or any
part thereof without Lender’s prior written consent an Event of Default.

     Section 13.05. Interest After Default. If any amount due under the Note, this
Security Instrument or any of the other Loan Documents is not paid within any applicable notice and
grace period after same is due, whether such date is the stated due date, any accelerated due date
or any other date or at any other time specified under any of the terms hereof or thereof, then, in
such event, Borrower shall pay interest on the amount not so paid from and after the date on which
such amount first becomes due at the Default Rate; and such interest shall be due and payable at
such rate until the earlier of the cure of all Events of Default or the payment of the entire
amount due to Lender, whether or not any action shall have been taken or proceeding commenced to
recover the same or to foreclose this Security Instrument. All unpaid and accrued interest shall
be secured by this Security Instrument as part of the Debt. Nothing in this Section
13.05 or in any other provision of this Security Instrument shall constitute an extension of
the time for payment of the Debt.

     Section 13.06. Borrower’s Actions After Default. After the happening of any Event of
Default and immediately upon the commencement of any action, suit or other legal proceedings by
Lender to obtain judgment for the Debt, or of any other nature in aid of the enforcement of the
Loan Documents, Borrower will (a) after receipt of notice of the institution of any such action,
waive the issuance and service of process and enter its voluntary appearance in such action, suit
or proceeding, and (b) if required by Lender, consent to the appointment of a receiver or receivers
of the Property or any part thereof and of all the earnings, revenues, rents, issues, profits and
income thereof.

     Section 13.07. Control by Lender After Default. Notwithstanding the appointment of
any custodian, receiver, liquidator or trustee of Borrower, or of any of its property, or of the
Property or any part thereof, to the extent permitted by Legal Requirements, Lender shall be
entitled to obtain possession and control of all property now and hereafter covered by this
Security Instrument and the Assignment in accordance with the terms hereof.

     Section 13.08. Right to Cure Defaults. (a) Upon the occurrence of any Event of
Default, Lender or its agents may, but without any obligation to do so and without notice to or
demand on Borrower and without releasing Borrower from any obligation hereunder, make or do the
same

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in such manner and to such extent as Lender may deem necessary to protect the security hereof.
Lender and its agents are authorized to enter upon the Property or any part thereof for such
purposes, or appear in, defend, or bring any action or proceedings to protect Lender’s interest in
the Property or any part thereof or to foreclose this Security Instrument or collect the Debt, and
the cost and expense thereof (including reasonable attorneys’ fees to the extent permitted by law),
with interest as provided in this Section 13.08, shall constitute a portion of the Debt and shall
be immediately due and payable to Lender upon demand. All such costs and expenses incurred by
Lender or its agents in remedying such Event of Default or in appearing in, defending, or bringing
any such action or proceeding shall bear interest at the Default Rate, for the period from the date
so demanded to the date of payment to Lender. All such costs and expenses incurred by Lender or
its agents together with interest thereon calculated at the above rate shall be deemed to
constitute a portion of the Debt and be secured by this Security Instrument.

     (b) If Lender makes any payment or advance that Lender is authorized by this Security
Instrument to make in the place and stead of Borrower (i) relating to the Impositions or tax liens
asserted against the Property, Lender may do so according to any bill, statement or estimate
procured from the appropriate public office without inquiry into the accuracy of the bill,
statement or estimate or into the validity of any of the Impositions or the tax liens or claims
thereof; (ii) relating to any apparent or threatened adverse title, lien, claim of lien,
encumbrance, claim or charge, Lender will be the sole judge of the legality or validity of same; or
(iii) relating to any other purpose authorized by this Security Instrument but not enumerated in
this Section 13.08, Lender may do so whenever, in its judgment and discretion, the payment or
advance seems necessary or desirable to protect the Property and the full security interest
intended to be created by this Security Instrument. In connection with any payment or advance made
pursuant
to this Section 13.08, Lender has the option and is authorized, but in no event shall be
obligated, to obtain a continuation report of title prepared by a title insurance company. The
payments and the advances made by Lender pursuant to this Section 13.08 and the cost and expenses
of said title report will be due and payable by Borrower on demand, together with interest at the
Default Rate, and will be secured by this Security Instrument.

     Section 13.09. Late Payment Charge. If any portion of the Debt is not paid in full on
or before the day on which it is due and payable hereunder, Borrower shall pay to Lender an amount
equal to five percent (5%) of such unpaid portion of the Debt (“Late Charge”) to defray the
expense incurred by Lender in handling and processing such delinquent payment, and such amount
shall constitute a part of the Debt.

     Section 13.10. Recovery of Sums Required to Be Paid. Lender shall have the right from
time to time to take action to recover any sum or sums which constitute a part of the Debt as the
same become due and payable hereunder (after the expiration of any grace period or the giving of
any notice herein provided, if any), without regard to whether or not the balance of the Debt shall
be due, and without prejudice to the right of Lender thereafter to bring an action of foreclosure,
or any other action, for a default or defaults by Borrower existing at the time such earlier action
was commenced.

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     Section 13.11. Marshalling and Other Matters. Borrower hereby waives, to the fullest
extent permitted by law, the benefit of all appraisement, valuation, stay, extension,
reinstatement, redemption (both equitable and statutory) and homestead laws now or hereafter in
force and all rights of marshalling in the event of any sale hereunder of the Property or any part
thereof or any interest therein. Further, Borrower hereby expressly waives any and all rights of
redemption from sale under any order or decree of foreclosure of this Security Instrument on behalf
of Borrower, whether equitable or statutory and on behalf of each and every Person acquiring any
interest in or title to the Property or any part thereof subsequent to the date of this Security
Instrument and on behalf of all Persons to the fullest extent permitted by applicable law.

     Section 13.12. Tax Reduction Proceedings. After an Event of Default, Borrower shall
be deemed to have appointed Lender as its attorney-in-fact to seek a reduction or reductions in the
assessed valuation of the Property for real property tax purposes or for any other purpose and to
prosecute any action or proceeding in connection therewith. This power, being coupled with an
interest, shall be irrevocable for so long as any part of the Debt remains unpaid and any Event of
Default shall be continuing.

     Section 13.13. General Provisions Regarding Remedies.

     (a) Right to Terminate Proceedings. Lender may terminate or rescind any proceeding or
other action brought in connection with its exercise of the remedies provided in Section 13.02 at
any time before the conclusion thereof, as determined in Lender’s sole discretion and without
prejudice to Lender.

     (b) No Waiver or Release. The failure of Lender to exercise any right, remedy or
option provided in the Loan Documents shall not be deemed a waiver of such right, remedy or option
or of any covenant or obligation contained in the Loan Documents. No acceptance by
Lender of any payment after the occurrence of an Event of Default and no payment by Lender of
any payment or obligation for which Borrower is liable hereunder shall be deemed to waive or cure
any Event of Default. No sale of all or any portion of the Property, no forbearance on the part of
Lender, and no extension of time for the payment of the whole or any portion of the Debt or any
other indulgence given by Lender to Borrower or any other Person, shall operate to release or in
any manner affect the interest of Lender in the Property or the liability of Borrower to pay the
Debt. No waiver by Lender shall be effective unless it is in writing and then only to the extent
specifically stated.

     (c) No Impairment; No Releases. The interests and rights of Lender under the Loan
Documents shall not be impaired by any indulgence, including (i) any renewal, extension or
modification which Lender may grant with respect to any of the Debt; (ii) any surrender,
compromise, release, renewal, extension, exchange or substitution which Lender may grant with
respect to the Property or any portion thereof; or (iii) any release or indulgence granted to any
maker, endorser, guarantor or surety of any of the Debt.

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ARTICLE XIV:  COMPLIANCE WITH REQUIREMENTS

     Section 14.01. Compliance with Legal Requirements. (a) Borrower shall promptly comply
with all present and future Legal Requirements, foreseen and unforeseen, ordinary and
extraordinary, whether requiring structural or nonstructural repairs or alterations including,
without limitation, all zoning, subdivision, building, safety and environmental protection, land
use and development Legal Requirements, all Legal Requirements which may be applicable to the curbs
adjoining the Property or to the use or manner of use thereof, and all rent control, rent
stabilization and all other similar Legal Requirements relating to rents charged and/or collected
in connection with the Leases. Borrower represents and warrants that the Property is in compliance
in all respects with all Legal Requirements as of the date hereof, no notes or notices of
violations of any Legal Requirements have been entered or received by Borrower and there is no
basis for the entering of such notes or notices.

     (b) Borrower shall have the right to contest by appropriate legal proceedings diligently
conducted in good faith, without cost or expense to Lender, the validity or application of any
Legal Requirement and to suspend compliance therewith if permitted under applicable Legal
Requirements, provided (i) failure to comply therewith may not subject Lender to any civil or
criminal liability, (ii) prior to and during such contest, Borrower shall furnish to Lender
security reasonably satisfactory to Lender, in its discretion, against loss or injury by reason of
such contest or non-compliance with such Legal Requirement, (iii) no Default or Event of Default
shall exist during such proceedings and such contest shall not otherwise violate any of the
provisions of any of the Loan Documents, (iv) such contest shall not (unless Borrower shall comply
with the provisions of clause (ii) of this Section 14.01(b)) subject the Property to any lien or
encumbrance the enforcement of which is not suspended or otherwise affect the priority of the lien
of this Security Instrument; (v) such contest shall not affect the ownership, use or occupancy of
the Property; (vi) the Property or any part thereof or any interest therein shall not be in any
danger of being sold, forfeited or lost by reason of such contest by Borrower; (vii) Borrower shall
give Lender prompt notice of the commencement of such proceedings and, upon request by Lender,
notice of the status of such proceedings and/or confirmation of the continuing
satisfaction of the conditions set forth in clauses (i) — (vi) of this Section 14.01(b); and
(viii) upon a final determination of such proceeding, Borrower shall take all steps necessary to
comply with any requirements arising therefrom.

     (c) Borrower shall at all times comply with all applicable Legal Requirements with respect to
the construction, use and maintenance of any vaults adjacent to the Property. If by reason of the
failure to pay taxes, assessments, charges, permit fees, franchise taxes or levies of any kind or
nature, the continued use of the vaults adjacent to Property or any part thereof is discontinued,
Borrower nevertheless shall, with respect to any vaults which may be necessary for the continued
use of the Property, take such steps (including the making of any payment) to ensure the continued
use of vaults or replacements.

     Section 14.02. Compliance with Recorded Documents; No Future Grants. Borrower shall
promptly perform and observe or cause to be performed and observed, all of the terms,

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covenants and
conditions of all Property Agreements and all things necessary to preserve intact and unimpaired
any and all appurtenances or other interests or rights affecting the Property.

ARTICLE XV:  PREPAYMENT

     Section 15.01. Prepayment. (a) Except as set forth in Section 15.01(b) hereof, no
prepayment of the Debt may be made in whole or in part.

     (b) At any time subsequent to the first (1st) anniversary of the date hereof, Borrower may
prepay the Loan, in whole, but not in part (except pursuant to the provisions of Section 5.11
hereof), as of the last day of an Interest Accrual Period in accordance with the following
provisions:

     (i) Lender shall have received from Borrower, not less than ten (10) days’, nor more
than ninety (90) days’, prior written notice specifying the date proposed for such
prepayment and the amount which is to be prepaid.

     (ii) Borrower shall also pay to Lender all interest due through and including the last
day of the Interest Accrual Period in which such prepayment is being made, together with any
and all other amounts due and owing pursuant to the terms of the Note, this Security
Instrument or the other Loan Documents.

     (iii) Except as to partial prepayments in connection with a casualty or condemnation as
provided in this Security Instrument, any partial prepayment shall be in a minimum amount
not less than $25,000 and shall be in whole multiples of $1,000 in excess thereof.

     (iv) No Event of Default shall have occurred and be continuing.

     (v) Any partial prepayment of the Principal Amount, including, without limitation,
Unscheduled Payments, shall be applied to the installments of principal last due hereunder
and shall not release or relieve Borrower from the obligation to pay the regularly scheduled
installments of principal and interest becoming due under the Note.

     (vi) Borrower shall pay to Lender, together with such prepayment and all other amounts
due in connection therewith, a non-refundable amount which shall be deemed earned by Lender
upon the funding of the Loan and shall not count to or be credited to payment of the
Principal Amount, any interest thereon or any other amounts payable under the Note, this
Security Instrument or any of the other Loan Document, equal to one percent (1%) of the
Principal Amount being repaid if such prepayment occurs on or prior to the Payment Date
occurring in July, 2008. The Loan may be prepaid after the Payment Date occurring in July,
2008 or, unless an Event of Default exists, in the event of a casualty or Taking, if Lender
elects to apply Loss Proceeds to the payment of the Debt as a result of a Substantial
Casualty or a Substantial Taking, without such additional fee or charge.

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     (c) Borrower shall have the right to revoke any notice of prepayment twice during the term of
the Loan by giving Lender not less than two (2) Business Days prior written notice of such
revocation, provided that Borrower shall pay any and all costs and expenses, including, but not
limited to, breakage costs, incurred by Lender in connection with any such revocation.

ARTICLE XVI:  ENVIRONMENTAL COMPLIANCE

     Section 16.01. Covenants, Representations and Warranties. (a) Borrower has not, at
any time, and, to Borrower’s best knowledge after due inquiry and investigation, except as set
forth in the Environmental Report, no other Person has at any time, handled, buried, stored,
retained, refined, transported, processed, manufactured, generated, produced, spilled, allowed to
seep, leak, escape or leach, or pumped, poured, emitted, emptied, discharged, injected, dumped,
transferred or otherwise disposed of or dealt with Hazardous Materials on, to or from the Premises
except for use and storage for use of heating oil, cleaning fluids, pesticides and other substances
customarily used in the operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is in compliance with
the requirements hereof and the other Loan Documents and does not give rise to liability under
applicable Legal Requirements or Environmental Statutes or be the basis for a lien against the
Property or any part thereof, and Borrower does not intend to and shall not use the Property or any
part thereof for the purpose of handling, burying, storing, retaining, refining, transporting,
processing, manufacturing, generating, producing, spilling, seeping, leaking, escaping, leaching,
pumping, pouring, emitting, emptying, discharging, injecting, dumping, transferring or otherwise
disposing of or dealing with Hazardous Materials, except for use and storage for use of heating
oil, cleaning fluids, pesticides and other substances customarily used in the operation of
properties that are being used for the same purposes as the Property is presently being used,
provided such use and/or storage for use is in compliance with the requirements hereof and the
other Loan Documents and does not give rise to liability under applicable Legal Requirements or
Environmental Statutes or be the basis for a lien against the Property or any part thereof. In
addition, without limitation to the foregoing provisions, Borrower represents and warrants that, to
the best of its knowledge, after due inquiry and investigation, except as previously disclosed in
writing to Lender, there is no asbestos in, on, over, or under all or any portion of the
fire-proofing or any other portion of the Property.

     (b) Borrower, after due inquiry and investigation, knows of no seepage, leak, escape, leach,
discharge, injection, release, emission, spill, pumping, pouring, emptying or dumping of Hazardous
Materials into waters on, under or adjacent to the Property or any part thereof or any other real
property owned and/or occupied by Borrower, or onto lands from which such Hazardous Materials might
seep, flow or drain into such waters, except as disclosed in the Environmental Report.

     (c) Except for Hazardous Materials disclosed in the Environmental Report, Borrower shall not
permit any Hazardous Materials to be handled, buried, stored, retained, refined, transported,
processed, manufactured, generated, produced, spilled, allowed to seep, leak, escape or leach, or
to be pumped, poured, emitted, emptied, discharged, injected, dumped, transferred or otherwise
disposed of or dealt with on, under, to or from the Property or any portion thereof at

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any time,
except for use and storage for use of heating oil, ordinary cleaning fluids, pesticides and other
substances customarily used in the operation of properties that are being used for the same
purposes as the Property is presently being used, provided such use and/or storage for use is in
compliance with the requirements hereof and the other Loan Documents and does not give rise to
liability under applicable Legal Requirements or be the basis for a lien against the Property or
any part thereof.

     (d) Borrower represents and warrants that no actions, suits, or proceedings have been
commenced, or are pending, or to the best knowledge of Borrower, are threatened with respect to any
Legal Requirement governing the use, manufacture, storage, treatment, transportation, or processing
of Hazardous Materials with respect to the Property or any part thereof. Borrower has received no
notice of, and, except as disclosed in the Environmental Report, has no knowledge of any fact,
condition, occurrence or circumstance which with notice or passage of time or both would give rise
to a claim under or pursuant to any Environmental Statute pertaining to Hazardous Materials on, in,
under or originating from the Property or any part thereof or any other real property owned or
occupied by Borrower or arising out of the conduct of Borrower, including, without limitation,
pursuant to any Environmental Statute.

     (e) Borrower has not waived any Person’s liability with regard to Hazardous Materials in, on,
under or around the Property, nor has Borrower retained or assumed, contractually or by operation
of law, any other Person’s liability relative to Hazardous Materials or any claim, action or
proceeding relating thereto.

     (f) In the event that there shall be filed a lien against the Property or any part thereof
pursuant to any Environmental Statute pertaining to Hazardous Materials, Borrower shall, within
sixty (60) days or, in the event that the applicable Governmental Authority has commenced steps to
cause the Premises or any part thereof to be sold pursuant to the lien, within twenty five (25)
days, from the date that Borrower receives notice of such lien, either (i) pay the claim and remove
the lien from the Property, or (ii) furnish (A) a bond satisfactory to Lender in the amount of the
claim out of which the lien arises, (B) a cash deposit in the amount of the claim out of which the
lien arises, or (C) other security reasonably satisfactory to Lender in an amount sufficient to
discharge the claim out of which the lien arises.

     (g) Borrower represents and warrants that (i) except as disclosed in the Environmental Report,
Borrower has no knowledge of any violation of any Environmental
Statute or any Environmental Problem in connection with the Property, nor has Borrower been
requested or required by any Governmental Authority to perform any remedial activity or other
responsive action in connection with any Environmental Problem and (ii) neither the Property nor
any other property owned by Borrower is included or, to Borrower’s best knowledge, after due
inquiry and investigation, proposed for inclusion on the National Priorities List issued pursuant
to CERCLA by the United States Environmental Protection Agency (the “EPA”) or on the
inventory of other potential “Problem” sites issued by the EPA or has been identified by the EPA as
a potential CERCLA site or included or, to Borrower’s knowledge, after due inquiry and
investigation, proposed for inclusion on any list or inventory issued pursuant to any other
Environmental Statute, if any, or issued by any other Governmental Authority. Borrower

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covenants
that Borrower will comply with all Environmental Statutes affecting or imposed upon Borrower or the
Property.

     (h) Borrower covenants that it shall promptly notify Lender of the presence and/or release of
any Hazardous Materials and of any request for information or any inspection of the Property or any
part thereof by any Governmental Authority with respect to any Hazardous Materials and provide
Lender with copies of such request and any response to any such request or inspection. Borrower
covenants that it shall or shall cause to, in compliance with applicable Legal Requirements,
conduct and complete all investigations, studies, sampling and testing (and promptly shall provide
Lender with copies of any such studies and the results of any such test) and all remedial, removal
and other actions required by Governmental Authorities to clean up and remove all Hazardous
Materials in, on, over, under, from or affecting the Property or any part thereof in accordance
with all such Legal Requirements applicable to the Property or any part thereof.

     (i) Following the occurrence of an Event of Default hereunder, and without regard to whether
Lender shall have taken possession of the Property or a receiver has been requested or appointed or
any other right or remedy of Lender has or may be exercised hereunder or under any other Loan
Document, Lender shall have the right (but no obligation) to conduct such investigations, studies,
sampling and/or testing of the Property or any part thereof as Lender may, in its discretion,
determine to conduct, relative to Hazardous Materials. All costs and expenses incurred in
connection therewith including, without limitation, consultants’ fees and disbursements and
laboratory fees, shall constitute a part of the Debt and shall, upon demand by Lender, be
immediately due and payable and shall bear interest at the Default Rate from the date so demanded
by Lender until reimbursed. Borrower shall, at its sole cost and expense, fully and expeditiously
cooperate in all such investigations, studies, samplings and/or testings including, without
limitation, providing all relevant information and making knowledgeable people available for
interviews.

     (j) To Borrower’s knowledge, except as disclosed to Lender in the Environmental Report,
Borrower represents and warrants that all paint and painted surfaces existing within the interior
or on the exterior of the Improvements are not flaking, peeling, cracking, blistering, or chipping,
and do not contain lead or are maintained in a condition that prevents exposure of young children
to lead-based paint, as of the date hereof, and that the current inspections, operation, and
maintenance program at the Property with respect to lead-based paint is consistent with FNMA
guidelines and sufficient to ensure that all painted surfaces within the Property shall
be maintained in a condition that prevents exposure of tenants to lead-based paint. To
Borrower’s knowledge, except as disclosed to Lender in the Environmental Report, there have been no
claims for adverse health effects from exposure on the Property to lead-based paint or requests for
the investigation, assessment or removal of lead-based paint at the Property.

     (k) Borrower represents and warrants that except in accordance with all applicable
Environmental Statutes and as disclosed in the Environmental Report, (i) no underground treatment
or storage tanks or pumps or water, gas, or oil wells are or have been located about the Property,
(ii) no PCBs or transformers, capacitors, ballasts or other equipment that contain

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dielectric fluid
containing PCBs are located about the Property, (iii) no insulating material containing urea
formaldehyde is located about the Property and (iv) no asbestos-containing material is located
about the Property.

     Section 16.02. Environmental Indemnification. Borrower shall defend, indemnify and
hold harmless the Indemnified Parties for, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages (excluding consequential or punitive damages), costs and expenses
of whatever kind or nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation, reasonable attorneys’ and
consultants’ fees and disbursements and investigations and laboratory fees arising out of, or in
any way related to any Environmental Problem, including without limitation:

     (a) the presence, disposal, escape, seepage, leakage, spillage, discharge, emission, release
or threat of release of any Hazardous Materials in, on, over, under, from or affecting the Property
or any part thereof whether or not disclosed by the Environmental Report;

     (b) any personal injury (including wrongful death, disease or other health condition related
to or caused by, in whole or in part, any Hazardous Materials) or property damage (real or
personal) arising out of or related to any Hazardous Materials in, on, over, under, from or
affecting the Property or any part thereof whether or not disclosed by the Environmental Report;

     (c) any action, suit or proceeding brought or threatened, settlement reached, or order of any
Governmental Authority relating to such Hazardous Material whether or not disclosed by the
Environmental Report; and/or

     (d) any violation of the provisions, covenants, representations or warranties of Section 16.01
hereof or of any Legal Requirement which is based on or in any way related to any Hazardous
Materials in, on, over, under, from or affecting the Property or any part thereof including,
without limitation, the cost of any work performed and materials furnished in order to comply
therewith whether or not disclosed by the Environmental Report.

     Notwithstanding the foregoing provisions of this Section 16.02 to the contrary, Borrower shall
have no obligation to indemnify Lender for liabilities, claims, damages, penalties, causes of
action, costs and expenses relative to the foregoing which result directly from Lender’s willful
misconduct or gross negligence. Additionally, the obligations and liabilities of Borrower under
this Section 16.02 shall terminate and be of no further force and effect if all of the following
conditions are satisfied in full: (i) there has been no change, between the date hereof and the
date the Loan is paid in full, in any Environmental Law, the effect of which change may be to
make a lender or mortgagee liable in respect to any matter for which the Indemnified Parties are
entitled to indemnification pursuant to this Section 16.02, notwithstanding the fact that the Loan
is paid in full; (ii) Lender shall have received, at Borrower’s sole cost and expense, an
environmental report relating to the Property in form and substance and prepared by a qualified
Person, in each case acceptable to Lender, dated no earlier than the date upon which the Loan is
paid in full showing, to the satisfaction of Lender, that there exists no matter for which the
Indemnified Parties are entitled to indemnification pursuant to this Section 16.02; (iii) no Event

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of Default shall have occurred; (iv) Lender shall have received an opinion letter in form and
substance and from counsel satisfactory to Lender that none of the Indemnified Persons shall be
deemed an “owner” or “operator” (or any other analogous definition) under any Environmental Law;
and (iii) five (5) years have passed since the date on which the Debt shall have been paid in full.
Any amounts payable to Lender by reason of the application of this Section 16.02 shall be secured
by this Security Instrument and shall, upon demand by Lender, become immediately due and payable
and shall bear interest at the Default Rate from the date so demanded by Lender until paid.

     This indemnification shall survive the termination of this Security Instrument whether by
repayment of the Debt, foreclosure or deed in lieu thereof, assignment, or otherwise. The
indemnity provided for in this Section 16.02 shall not be included in any exculpation of Borrower
or its principals from personal liability provided for in this Security Instrument or in any of the
other Loan Documents. Nothing in this Section 16.02 shall be deemed to deprive Lender of any
rights or remedies otherwise available to Lender, including, without limitation, those rights and
remedies provided elsewhere in this Security Instrument or the other Loan Documents.

ARTICLE XVII:  ASSIGNMENTS

     Section 17.01. Participations and Assignments. Lender shall have the right, at no
cost to Borrower, to assign this Security Instrument and/or any of the Loan Documents, and to
transfer, assign or sell participations and subparticipations (including blind or undisclosed
participations and subparticipations) in the Loan Documents and the obligations hereunder to any
Person; provided, however, that no such participation shall increase, decrease or otherwise affect
either Borrower’s or Lender’s obligations under this Security Instrument or the other Loan
Documents.

ARTICLE XVIII:  MISCELLANEOUS

     Section 18.01. Right of Entry. Lender and its agents shall have the right to enter
and at no cost to Borrower, to inspect the Property or any part thereof at all reasonable times,
and, except in the event of an emergency, upon reasonable notice and to inspect Borrower’s books
and records and to make abstracts and reproductions thereof.

     Section 18.02. Cumulative Rights. The rights of Lender under this Security Instrument
shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of Lender shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision. Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled, subject to the terms of this Security
Instrument, to every right and remedy now or hereafter afforded by law.

     Section 18.03. Liability. If Borrower consists of more than one Person, the
obligations and liabilities of each such Person hereunder shall be joint and several.

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     Section 18.04. Exhibits Incorporated. The information set forth on the cover hereof,
and the Exhibits annexed hereto, are hereby incorporated herein as a part of this Security
Instrument with the same effect as if set forth in the body hereof.

     Section 18.05. Severable Provisions. If any term, covenant or condition of the Loan
Documents including, without limitation, the Note or this Security Instrument, is held to be
invalid, illegal or unenforceable in any respect, such Loan Document shall be construed without
such provision.

     Section 18.06. Duplicate Originals. This Security Instrument may be executed in any
number of duplicate originals and each such duplicate original shall be deemed to constitute but
one and the same instrument.

     Section 18.07. No Oral Change. The terms of this Security Instrument, together with
the terms of the Note and the other Loan Documents, constitute the entire understanding and
agreement of the parties hereto and supersede all prior agreements, understandings and negotiations
between Borrower and Lender with respect to the Loan. This Security Instrument, and any provisions
hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or
by any act on the part of Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.

     Section 18.08. Waiver of Counterclaim, Etc. BORROWER HEREBY WAIVES THE RIGHT TO
ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION OR PROCEEDING BROUGHT
AGAINST IT BY LENDER OR ITS AGENTS, AND WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY
EITHER PARTY HERETO AGAINST THE OTHER OR IN ANY COUNTERCLAIM BORROWER MAY BE PERMITTED TO ASSERT
HEREUNDER OR WHICH MAY BE ASSERTED BY LENDER OR ITS AGENTS, AGAINST BORROWER, OR IN ANY MATTERS
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS SECURITY INSTRUMENT OR THE DEBT.

     Section 18.09. Headings; Construction of Documents; etc. The table of contents,
headings and captions of various paragraphs of this Security Instrument are for convenience of
reference only and are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof. Borrower acknowledges that it was represented by competent counsel in
connection with the negotiation and drafting of this Security Instrument and the other Loan
Documents and that neither this Security Instrument nor the other Loan Documents shall be subject
to the principle of construing the meaning against the Person who drafted same.

     Section 18.10. Sole Discretion of Lender. Whenever Lender exercises any right given
to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the
decision of Lender to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Lender and shall be final and
conclusive, except as may be otherwise specifically provided herein.

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     Section 18.11. Waiver of Notice. Borrower shall not be entitled to any notices of any
nature whatsoever from Lender except with respect to matters for which this Security Instrument
specifically and expressly provides for the giving of notice by Lender to Borrower and except with
respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted
to waive the giving of notice.

     Section 18.12. Covenants Run with the Land. All of the grants, covenants, terms,
provisions and conditions herein shall run with the Premises, shall be binding upon Borrower and
shall inure to the benefit of Lender, subsequent holders of this Security Instrument and their
successors and assigns. Without limitation to any provision hereof, the term “Borrower” shall
include and refer to the borrower named herein, any subsequent owner of the Property, and its
respective heirs, executors, legal representatives, successors and assigns. The representations,
warranties and agreements contained in this Security Instrument and the other Loan Documents are
intended solely for the benefit of the parties hereto, shall confer no rights hereunder, whether
legal or equitable, in any other Person and no other Person shall be entitled to rely thereon.

     Section 18.13. Applicable Law. THIS SECURITY INSTRUMENT WAS NEGOTIATED IN NEW YORK,
AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE
WERE DISBURSED FROM 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
SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA AND THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO INTERNAL CHOICE OF
LAW DOCTRINES, THE PARTIES HEREBY AGREEING TO HAVE NEW YORK LAW GOVERN AS PROVIDED FOR IN NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1401; PROVIDED, HOWEVER THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, PRIORITY, ENFORCEMENT AND FORECLOSURE OF THE LIENS AND SECURITY INTERESTS
CREATED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
PREMISES ARE LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH
STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS, AND THE DEBT OR OBLIGATIONS ARISING HEREUNDER.

     Section 18.14. Security Agreement. (a) (i) This Security Instrument is both a real
property mortgage, deed to secure debt or deed of trust, as applicable, and a “security agreement”
within the meaning of the UCC. The Property includes both real and personal property and all other
rights and interests, whether tangible or intangible in nature, of Borrower in the Property. This
Security Instrument is filed as a fixture filing and covers goods which are or are to become

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fixtures on the Property. Borrower by executing and delivering this Security Instrument has
granted to Lender, as security for the Debt, a security interest in the Property to the full
extent that the Property may be subject to the UCC (said portion of the Property so subject to the
UCC being called in this Section 18.14 the “Collateral”). If an Event of Default shall
occur, Lender, in addition to any other rights and remedies which it may have, shall have and may
exercise immediately and without demand, any and all rights and remedies granted to a secured party
upon default under the UCC, including, without limiting the generality of the foregoing, the right
to take possession of the Collateral or any part thereof, and to take such other measures as Lender
may deem necessary for the care, protection and preservation of the Collateral. Upon request or
demand of Lender following an Event of Default, Borrower shall, at its expense, assemble the
Collateral and make it available to Lender at a convenient place acceptable to Lender. Borrower
shall pay to Lender on demand any and all expenses, including reasonable legal expenses and
attorneys’ fees, incurred or paid by Lender in protecting its interest in the Collateral and in
enforcing its rights hereunder with respect to the Collateral. Any disposition pursuant to the UCC
of so much of the Collateral as may constitute personal property shall be considered commercially
reasonable if made pursuant to a public sale which is advertised at least twice in a newspaper in
which sheriff’s sales are advertised in the county where the Premises is located. Any notice of
sale, disposition or other intended action by Lender with respect to the Collateral given to
Borrower in accordance with the provisions hereof at least ten (10) days prior to such action,
shall constitute reasonable notice to Borrower. The proceeds of any disposition of the Collateral,
or any part thereof, may be applied by Lender to the payment of the Debt in such priority and
proportions as Lender in its discretion shall deem proper. It is not necessary that the Collateral
be present at any disposition thereof. Lender shall have no obligation to clean-up or otherwise
prepare the Collateral for disposition.

     (ii) The mention in a financing statement filed in the records normally pertaining to
personal property of any portion of the Property shall not derogate from or impair in any
manner the intention of this Security Instrument. Lender hereby declares that all items of
Collateral are part of the real property encumbered hereby to the fullest extent permitted
by law, regardless of whether any such item is physically attached to the Improvements or
whether serial numbers are used for the better identification of certain items.
Specifically, the mention in any such financing statement of any items included in the
Property shall not be construed to alter, impair or impugn any rights of Lender as
determined by this Security Instrument or the priority of Lender’s lien upon and security
interest in the Property in the event that notice of Lender’s priority of interest as to any
portion of the Property is required to be filed in accordance with the UCC to be effective
against or take priority over the interest of any particular class of persons, including the
federal government or any subdivision or instrumentality thereof. No portion of the
Collateral constitutes or is the proceeds of “Farm Products”, as defined in the UCC.

     (iii) If Borrower is at any time a beneficiary under a letter of credit now or hereafter
issued in favor of Borrower, Borrower shall promptly notify Lender thereof and, at the
request and option of Lender, Borrower shall, pursuant to an agreement in form and substance
satisfactory to Lender, either (A) arrange for the issuer and any confirmer of such letter
of credit to consent to an assignment to Lender of the proceeds of any drawing

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under the
letter of credit or (B) arrange for Lender to become the transferee beneficiary of the
letter of credit, with Lender agreeing, in each case, that the proceeds of any drawing under
the letter to credit are to be applied as provided in this Security Instrument.

     (iv) Borrower and Lender acknowledge that for the purposes of Article 9 of the UCC,
the law of the State of New York shall be the law of the jurisdiction of the bank in which
the Central Account is located.

     (v) Lender may comply with any applicable Legal Requirements in connection with the
disposition of the Collateral, and Lender’s compliance therewith will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

     (vi) Lender may sell the Collateral without giving any warranties as to the Collateral.
Lender may specifically disclaim any warranties of title, possession, quiet enjoyment or the
like. This procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

     (vii) If Lender sells any of the Collateral upon credit, Borrower will be credited only
with payments actually made by the purchaser, received by Lender and applied to the
indebtedness of Borrower. In the event the purchaser of the Collateral fails to fully pay
for the Collateral, Lender may resell the Collateral and Borrower will be credited with the
proceeds of such sale.

     (b) Borrower hereby irrevocably appoints Lender as its attorney-in-fact, coupled with an
interest, to file with the appropriate public office on its behalf any financing or other
statements signed only by Lender, as secured party, or, to the extent permitted under the UCC,
unsigned, in connection with the Collateral covered by this Security Instrument.

     Section 18.15. Actions and Proceedings. Lender has the right to appear in and defend
any action or proceeding brought with respect to the Property in its own name or, if required by
Legal Requirements or, if an Event of Default exists and in Lender’s reasonable judgment, it is
necessary, in the name and on behalf of Borrower, which Lender believes will adversely affect the
Property or this Security Instrument and to bring any action or proceedings, in its name or in the
name and if an Event of Default exists on behalf of Borrower, which Lender, in its discretion,
decides should be brought to protect its interest in the Property.

     Section 18.16. Usury Laws. This Security Instrument and the Note are subject to the
express condition, and it is the expressed intent of the parties, that at no time shall Borrower be
obligated or required to pay interest on the principal balance due under the Note at a rate which
could subject the holder of the Note to either civil or criminal liability as a result of being in
excess of the maximum interest rate which Borrower is permitted by law to contract or agree to
pay. If by the terms of this Security Instrument or the Note, Borrower is at any time
required or obligated to pay interest on the principal balance due under the Note at a rate in
excess of such maximum rate, such rate of interest shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum rate and all prior

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interest payments in excess of such maximum rate shall be applied and shall be deemed to have been
payments in reduction of the principal balance of the Note. No application to the principal
balance of the Note pursuant to this Section 18.16 shall give rise to any requirement to pay any
prepayment fee or charge of any kind due hereunder, if any.

     Section 18.17. Remedies of Borrower. In the event that a claim or adjudication is
made that Lender has acted unreasonably or unreasonably delayed acting in any case where by law or
under the Note, this Security Instrument or the Loan Documents, it has an obligation to act
reasonably or promptly, Lender shall not be liable for any monetary damages, and Borrower’s
remedies shall be limited to injunctive relief or declaratory judgment.

     Section 18.18. Offsets, Counterclaims and Defenses. Any assignee of this Security
Instrument, the Assignment and the Note shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to the Note, the Assignment or this Security
Instrument which Borrower may otherwise have against any assignor of this Security Instrument, the
Assignment and the Note 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 this Security
Instrument, the Assignment or the Note 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.

     Section 18.19. No Merger. If Borrower’s and Lender’s estates become the same
including, without limitation, upon the delivery of a deed by Borrower in lieu of a foreclosure
sale, or upon a purchase of the Property by Lender in a foreclosure sale, this Security Instrument
and the lien created hereby shall not be destroyed or terminated by the application of the doctrine
of merger and in such event Lender shall continue to have and enjoy all of the rights and
privileges of Lender as to the separate estates; and, as a consequence thereof, upon the
foreclosure of the lien created by this Security Instrument, any Leases or subleases then existing
and created by Borrower shall not be destroyed or terminated by application of the law of merger or
as a result of such foreclosure unless Lender or any purchaser at any such foreclosure sale shall
so elect. No act by or on behalf of Lender or any such purchaser shall constitute a termination of
any Lease or sublease unless Lender or such purchaser shall give written notice thereof to such
lessee or sublessee.

     Section 18.20. Restoration of Rights. In case Lender shall have proceeded to enforce
any right under this Security Instrument by foreclosure sale, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason or shall have been determined
adversely, then, in every such case, Borrower and Lender shall be restored to their former
positions and rights hereunder with respect to the Property subject to the lien hereof.

     Section 18.21. Waiver of Statute of Limitations. The pleadings of any statute of
limitations as a defense to any and all obligations secured by this Security Instrument are hereby
waived to the full extent permitted by Legal Requirements.

     Section 18.22. Advances. This Security Instrument shall cover any and all advances
made pursuant to the Loan Documents, rearrangements and renewals of the Debt and all

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extensions in
the time of payment thereof, even though such advances, extensions or renewals be evidenced by new
promissory notes or other instruments hereafter executed and irrespective of whether filed or
recorded. Likewise, the execution of this Security Instrument shall not impair or affect any other
security which may be given to secure the payment of the Debt, and all such additional security
shall be considered as cumulative. The taking of additional security, execution of partial
releases of the security, or any extension of time of payment of the Debt shall not diminish the
force, effect or lien of this Security Instrument and shall not affect or impair the liability of
Borrower and shall not affect or impair the liability of any maker, surety, or endorser for the
payment of the Debt.

     Section 18.23. Application of Default Rate Not a Waiver. Application of the Default
Rate shall not be deemed to constitute a waiver of any Default or Event of Default or any rights or
remedies of Lender under this Security Instrument, any other Loan Document or applicable Legal
Requirements, or a consent to any extension of time for the payment or performance of any
obligation with respect to which the Default Rate may be invoked.

     Section 18.24. Intervening Lien. To the fullest extent permitted by law, any
agreement hereafter made pursuant to this Security Instrument shall be superior to the rights of
the holder of any intervening lien.

     Section 18.25. No Joint Venture or Partnership. Borrower and Lender intend that the
relationship created hereunder be solely that of mortgagor and mortgagee or grantor and beneficiary
or borrower and lender, as the case may be. Nothing herein 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 Property other than that of mortgagee, beneficiary or lender.

     Section 18.26. Time of the Essence. Time shall be of the essence in the performance
of all obligations of Borrower hereunder.

     Section 18.27. Borrower’s Obligations Absolute. Borrower acknowledges that Lender
and/or certain Affiliates of Lender are engaged in the business of financing, owning, operating,
leasing, managing, and brokering real estate and in other business ventures which may be viewed as
adverse to or competitive with the business, prospect, profits, operations or condition (financial
or otherwise) of Borrower. Except as set forth to the contrary in the Loan Documents, all sums
payable by Borrower hereunder shall be paid without notice or demand, counterclaim, set-off,
deduction or defense and without abatement, suspension, deferment, diminution or reduction, and the
obligations and liabilities of Borrower hereunder shall in no way be released, discharged, or
otherwise affected (except as expressly provided herein) by reason of: (a) any damage to or
destruction of or any Taking of the Property or any portion thereof; (b) any restriction or
prevention of or interference with any use of the Property or any portion thereof; (c) any title
defect or encumbrance or any eviction from the Premises or any portion thereof by title paramount
or otherwise; (d) any bankruptcy proceeding relating to Borrower, any General Partner, or any
guarantor or indemnitor, or any action taken with respect to this Security Instrument or any other
Loan Document by any trustee or receiver of Borrower or any such
General Partner, guarantor or indemnitor, or by any court, in any such proceeding; (e) any
claim

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which Borrower has or might have against Lender; (f) any default or failure on the part of
Lender to perform or comply with any of the terms hereof or of any other agreement with Borrower;
or (g) any other occurrence whatsoever, whether similar or dissimilar to the foregoing, whether or
not Borrower shall have notice or knowledge of any of the foregoing.

     Section 18.28. Publicity. All promotional news releases, publicity or advertising by
Manager, Borrower or their respective Affiliates through any media intended to reach the general
public shall not refer to the Loan Documents or the financing evidenced by the Loan Documents, or
to Lender or to any of its Affiliates without the prior written approval of Lender or such
Affiliate, as applicable, in each instance, such approval not to be unreasonably withheld or
delayed. Notwithstanding anything herein to the contrary, without obtaining Lender’s consent,
Borrower shall be authorized to provide information relating to the Loan Documents or the financing
evidenced by the Loan Documents, or to Lender or to any of its Affiliates, (i) to rating agencies,
underwriters, potential securities investors, auditors, regulatory authorities and to any Persons
which may be entitled to such information by operation of law and without limiting the foregoing to
issue press releases, and make Form 8-K and other securities filings containing the above-described
information as it or its counsel reasonably deems required by law, (ii) in the GAV proxy statement
(the “Proxy Statement”) pertaining to the proposed purchase of GERA Property Acquisition
LLC by GAV and to GAV’s stockholders and potential investors in communications related to the Proxy
Statement, (iii) in the S-4 related to the proposed transaction between Grubb & Ellis Company
(“GBE”) and NNN Realty Advisors, Inc. (“NNN”) and to GBE’s and NNN’s stockholders and GBE’s
potential investors in communications related to such proposed transactions, and (iv) in GBE’s and
GAV’s ‘34 Act filings and earnings releases and to GBE’s and NNN’s stockholders and GBE’s potential
investors in connection with such earnings releases. Lender shall be authorized to provide
information relating to the Property, the Loan and matters relating thereto to rating agencies,
underwriters, potential securities investors, auditors, regulatory authorities and to any Persons
which may be entitled to such information by operation of law and may use basic transaction
information (including, without limitation, the name of Borrower, the name and address of the
Property and the Loan Amount) in press releases or other marketing materials.

     Section 18.29. Securitization Opinions. In the event the Loan is included as an asset
of a Securitization by Lender or any of its Affiliates, Borrower shall, within thirty (30) days
after Lender’s written request therefor, at Borrower’s sole cost and expense, deliver opinions in
form and substance and delivered by counsel reasonably acceptable to Lender and each Rating Agency,
as may be reasonably required by Lender and/or the Rating Agency in connection with such
securitization provided in no event shall Borrower be obligated to cause its counsel to deliver a
“10b-5” opinion or a “true sale” opinion unless said opinion is paid for by Lender . Borrower’s
failure to deliver the opinions required hereby within such thirty (30) days period shall
constitute an “Event of Default” hereunder.

     Section 18.30. Cooperation with Rating Agencies; etc. At the request of Lender and,
to the extent not already required to be provided by Borrower under this Security Instrument,
Borrower shall use commercially reasonable efforts to cooperate with Lender’s efforts in accordance
with the market standards which may be reasonably required in the marketplace or

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by the Rating Agencies in connection with a Securitization of rated single or multi-class
securities (the “Securities”) secured by or evidencing ownership interests in the Note and
this Security Instrument (but not resecuritization or an further secondary market transaction with
respect to the sale of the Note), by satisfying (or cause to be satisfied) the conditions in this
Section 18.30 and in Sections 18.29 and 18.31 (but borrower shall not in any event be required to
incur, suffer or accept) any lesser rights or greater obligations than as currently set forth in
the Loan Documents. Borrower covenants and agrees that in the event the Loan is to be included as
an asset of a Securitization, Borrower shall (a) gather any information with respect to the
Property, Borrower and/or Manager reasonably required by each Rating Agency in connection with such
a Securitization, (b) at Lender’s request, meet with representatives of each Rating Agency to
discuss the business and operations of the Property, and (c) cooperate with the reasonable requests
of each Rating Agency and Lender in connection with all of the foregoing as well as in connection
with all other matters and the preparation of any offering documents with respect thereto,
including, without limitation, entering into any amendments or modifications to this Security
Instrument or to any other Loan Document which may be requested by Lender to conform to Rating
Agency or market standards for a Securitization provided that no such modification shall modify (a)
the interest rate payable under the Note, (b) the stated maturity of the Note, (c) the amortization
of principal under the Note, (d) Section 18.32 hereof, (e) any other economic term of the Loan or
(f) any provision, the effect of which would increase Borrower’s obligations or decrease Borrower’s
rights under the Loan Documents. Borrower acknowledges that the information provided by Borrower
to Lender may be incorporated into the offering documents for a Securitization and to the fullest
extent permitted, Borrower irrevocably waives all rights, if any, to prohibit such disclosures
including, without limitation, any right of privacy. Lender and each Rating Agency shall be
entitled to rely on the information supplied by, or on behalf of, Borrower and Borrower indemnifies
and holds harmless the Indemnified Parties, their Affiliates and each Person who controls such
Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as same may be amended from time to time, for, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind
or nature, known or unknown, contingent or otherwise, whether incurred or imposed within or outside
the judicial process, including, without limitation, reasonable attorneys’ fees and disbursements
that arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such information or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated in such information or
necessary in order to make the statements in such information, or in light of the circumstances
under which they were made, not misleading (collectively, “Securities Liabilities”);
provided, however, that Borrower will be liable under the foregoing indemnity only to the extent
that such Securities Liabilities arise out of, or are based upon, any such untrue statement or
omission made therein in reliance upon, and in conformity with, information furnished to Lender by
or on behalf of Borrower or its Affiliates in connection with the preparation of the disclosure
documents or in connection with the underwriting of the Loan; and provided further, however, that
with respect to information provided by third parties and with respect to statements made in the
disclosure documents that are based upon information provided by third parties, Borrower will be
liable only if Borrower or its Affiliates knew that such information was false or omitted to state
a material fact known to

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Borrower and necessary to make the statements made, in light of the
circumstances under which they were made, not misleading.

     Section 18.31. Securitization Financials. Borrower covenants and agrees that, upon
Lender’s written request therefor in connection with a Securitization, Borrower shall, at
Borrower’s sole cost and expense, promptly deliver if, at the time one or more Disclosure Documents
are being prepared in connection with a Securitization, and if required by Regulation AB Lender
expects that Borrower alone or Borrower and one or more of its Affiliates collectively, or the
Property alone or the Property and any other parcel(s) of real property, together with improvements
thereon and personal property related thereto, that is “related”, within the meaning of the
definition of Significant Obligor, to the Property (a “Related Property”) collectively,
will be a Significant Obligor, (i) the selected financial data or, if applicable, net operating
income, required under Item 1112(b)(1) of Regulation AB and meeting the requirements thereof, if
Lender expects that the principal amount of the Loan, together with any loans made to an Affiliate
of Borrower or secured by a Related Property that is included in a Securitization with the Loan (a
“Related Loan”), as of the cut-off date for such Securitization may, or if the principal
amount of the Loan together with any Related Loans as of the cut-off date for such Securitization
and at any time during which the Loan and any Related Loans are included in a Securitization does,
equal or exceed ten percent (10%) (but less than twenty percent (20%)) of the aggregate principal
amount of all mortgage loans included or expected to be included, as applicable, in the
Securitization or (ii) the financial statements required under Item 1112(b)(2) of Regulation AB and
meeting the requirements thereof, if Lender expects that the principal amount of the Loan together
with any Related Loans as of the cut-off date for such Securitization may, or if the principal
amount of the Loan together with any Related Loans as of the cut-off date for such Securitization
and at any time during which the Loan and any Related Loans are included in a Securitization does,
equal or exceed twenty percent (20%) of the aggregate principal amount of all mortgage loans
included or expected to be included, as applicable, in the Securitization. Such financial data or
financial statements shall be furnished to Lender within ten (10) Business Days after notice from
Lender in connection with the preparation of Disclosure Documents for the Securitization and, with
respect to the data or financial statements required pursuant to clause (b) hereof, (A) not later
than thirty (30) days after the end of each fiscal quarter of Borrower and (B) not later than
seventy-five (75) days after the end of each Fiscal Year; provided, however, that Borrower shall
not be obligated to furnish financial data or financial statements pursuant to clauses (A) or (B)
of this sentence with respect to any period for which a filing pursuant to the Securities Exchange
Act of 1934 in connection with or relating to the Securitization is not required.

     Section 18.32. Exculpation. Notwithstanding anything herein or in any other Loan
Document to the contrary, except as otherwise set forth in this Section 18.32 to the contrary,
Lender shall not enforce the liability and obligation of Borrower or any Person holding a direct or
indirect interest in Borrower or (a) if Borrower or any of its direct or indirect owners is a
partnership, its or their direct or indirect constituent partners or any of their respective
partners, (b) if Borrower or any of its direct or indirect owners is a trust, its or their
beneficiaries or any of their respective Partners (as hereinafter defined), (c) if Borrower or any
of its direct or indirect owners is a corporation, any of its or their direct or indirect
shareholders, directors, principals,

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officers or employees, or (d) if Borrower or any of its direct
or indirect owners is a limited liability company, any of its or their direct or indirect members
(the Persons described in the foregoing clauses (a) — (d), as the case may be, are hereinafter
referred to as the “Partners”) to perform and observe the obligations contained in this
Security Instrument or any of the other
Loan Documents by any action or proceeding, including, without limitation, any action or
proceeding wherein a money judgment shall be sought against Borrower or the Partners, except that
Lender may bring a foreclosure action, action for specific performance, or other appropriate action
or proceeding (including, without limitation, an action to obtain a deficiency judgment) against
Borrower solely for the purpose of enabling Lender to realize upon (i) Borrower’s interest in the
Property, (ii) the Rent to the extent received by Borrower during the existence of an Event of
Default (all Rent covered by this clause (ii) being hereinafter referred to as the “Recourse
Distributions”) and not applied towards Debt Service or the operation or maintenance of the
Property and (iii) any other collateral then subject to the Loan Documents (the collateral
described in the foregoing clauses (i) — (iii) is hereinafter referred to as the “Default
Collateral”); provided, however, that any judgment in any such action or proceeding shall be
enforceable against Borrower and the Partners only to the extent of any such Default Collateral.
The provisions of this Section shall not, however, (a) impair the validity of the Debt evidenced by
the Note or in any way affect or impair the lien of this Security Instrument or any of the other
Loan Documents or the right of Lender to foreclose this Security Instrument during the existence of
an Event of Default; (b) impair the right of Lender to name Borrower as a party defendant in any
action or suit for judicial foreclosure and sale under this Security Instrument; (c) affect the
validity or enforceability of the Note, this Security Instrument, or any of the other Loan
Documents; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the
enforcement of the Assignment; (f) impair the right of Lender to bring suit for a monetary judgment
against Borrower with respect to fraud or material misrepresentation by Borrower, or any Affiliate
of Borrower in connection with this Security Instrument, the Note or the other Loan Documents, and
the foregoing provisions shall not modify, diminish or discharge the liability of Borrower; (g)
impair the right of Lender to bring suit for a monetary judgment to obtain the Recourse
Distributions received by Borrower and the foregoing provisions shall not modify, diminish or
discharge the liability of Borrower with respect to same; (h) impair the right of Lender to bring
suit for a monetary judgment against Borrower with respect to Borrower’s misappropriation of tenant
security deposits or Rent collected more than one (1) month in advance and not applied to the
operation of the Property (including the Basic Carrying Costs), and the foregoing provisions shall
not modify, diminish or discharge the liability of Borrower; (i) impair the right of Lender to
obtain Loss Proceeds due to Lender pursuant to this Security Instrument; (j) impair the right of
Lender to enforce the provisions of Sections 2.02(g) (other than the provisions of clause (vii)
thereof), 16.01 or 16.02, inclusive of this Security Instrument, even after repayment in full by
Borrower of the Debt or to bring suit for a monetary judgment against Borrower with respect to any
obligation set forth in said Sections; (k) prevent or in any way hinder Lender from exercising, or
constitute a defense, or counterclaim, or other basis for relief in respect of the exercise of, any
other remedy against any or all of the collateral securing the Note as provided in the Loan
Documents; (l) impair the right of Lender to bring suit for a monetary judgment against Borrower
with respect to any misapplication or conversion of Loss Proceeds, and the foregoing provisions
shall not modify, diminish or discharge the liability of Borrower; (m) impair the right of Lender
to sue for, seek or demand a deficiency judgment

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against Borrower solely for the purpose of
foreclosing the Property or any part thereof, or realizing upon the Default Collateral; provided,
however, that any such deficiency judgment referred to in this clause (m) shall be enforceable
against Borrower only to the extent of any of the Default Collateral; (n) impair the ability of
Lender to bring suit for a monetary judgment against Borrower with respect to arson or physical
waste to or of the Property or damage to the
Property resulting from the gross negligence or willful misconduct of Borrower or, to the
extent that there is sufficient cash flow, failure to pay any Imposition, or in lieu thereof,
deposit a sum equal to any Impositions into the Basic Carrying Costs Sub-Account; (o) impair the
right of Lender to bring a suit for a monetary judgment against Borrower in the event of the
exercise of any right or remedy under any federal, state or local forfeiture laws resulting in the
loss of the lien of this Security Instrument, or the priority thereof, against the Property; (p) be
deemed a waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b) or any
other provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to
require that all collateral shall continue to secure all of the Debt; (q) impair the right of
Lender to bring suit for monetary judgment against Borrower with respect to any actual losses
resulting from any claims, actions or proceedings initiated by Borrower (or any Affiliate of
Borrower) alleging that the relationship of Borrower and Lender is that of joint venturers,
partners, tenants in common, joint tenants or any relationship other than that of debtor and
creditor; or (r) impair the right of Lender to bring suit for a monetary judgment against Borrower
in the event of a Transfer in violation of the provisions of Article IX hereof. The provisions of
this Section 18.32 shall be inapplicable to Borrower if (a) any proceeding, action, petition or
filing under the Bankruptcy Code, or any similar state or federal law now or hereafter in effect
relating to bankruptcy, reorganization or insolvency, or the arrangement or adjustment of debts,
shall be (A) filed by Borrower or (B) filed against Borrower and consented to or acquiesced in by
Borrower or if any Affiliate of Borrower, or if Borrower or any Affiliate of Borrower shall
institute any proceeding for Borrower’s dissolution or liquidation, or Borrower shall make an
assignment for the benefit of creditors, or (b) Borrower or any Affiliate contests or in any
material way interferes with, directly or indirectly (collectively, a “Contest”), any
foreclosure action, UCC sale or other material remedy exercised by Lender upon the occurrence of an
Event of Default under the Loan Documents whether by making any motion, bringing any counterclaim
(other than a compulsory counterclaim), claiming any defense, seeking any injunction or other
restraint, commencing any action, or otherwise (provided that if any such Person obtains a
non-appealable order successfully asserting a Contest, Borrower shall have no liability under this
clause (b) and provided, further, that the liability under this clause (b) shall be limited to the
actual costs, expenses and damages of Lender which result from any such Contest). Nothing
contained in this Section 18.32 is intended to impose any liability upon the Partners or any of
them which the Partners would not otherwise have as a matter of law or equity.

     Section 18.33. Intentionally Omitted.

     Section 18.34. Intentionally Omitted.

     Section 18.35. Mezzanine Loan Option. (a) Lender shall have the right at any time to
divide the Loan into two or more parts (the “Mezzanine Option”): a “mortgage loan” and one
or more “mezzanine loans.” The principal amount of the mortgage loan plus the principal amount

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of
the mezzanine loan(s) shall equal the outstanding principal balance of the Loan immediately prior
to the creation of the mortgage loan and the mezzanine loan(s). In effectuating the foregoing,
Lender will make one or more loans to one or more entities that will be the direct or indirect
equity owner(s) of Borrower as described in Section 18.35(b) (collectively, the “Mezzanine
Borrower”). The Mezzanine Borrower will contribute the amount of the mezzanine loan(s) to
Borrower (in its capacity as borrower under the mortgage loan, “mortgage borrower”)
and the mortgage borrower will apply the contribution to pay down the Loan to the mortgage
loan amount. The mortgage loan and the mezzanine loan(s) will be on the same terms and subject to
the same conditions set forth in the Loan Documents except as follows. The mezzanine loan(s) shall
be made pursuant to Lender’s standard mezzanine loan documents as reasonably negotiated by the
parties to such mezzanine loan documents.

     (b) Lender shall have the right to establish different interest rates and debt service
payments for the mortgage loan and the mezzanine loan(s) and to require the payment of the mortgage
loan and the mezzanine loan(s) in such order of priority as may be designated by Lender; provided,
that (i) the total loan amounts for the mortgage loan and the mezzanine loan(s) shall equal the
amount of the Loan immediately prior to the creation of the mortgage loan and the mezzanine
loan(s), (ii) the weighted average interest rate of the mortgage loan and the mezzanine loan(s)
shall on the date created equal the interest rate which was applicable to the Loan immediately
prior to creation of the mortgage loan and mezzanine loan(s) and (iii) the debt service payments on
the mortgage loan note and the mezzanine loan note(s) shall on the date created equal the debt
service payment which was due under the Loan immediately prior to creation of a mortgage loan and a
mezzanine loan(s).

     (c) The Mezzanine Borrower shall be a special purpose, bankruptcy remote entity pursuant to
applicable Rating Agency criteria and shall own directly or indirectly one hundred percent (100%)
of the mortgage borrower. The security for the mezzanine loan(s) shall be a pledge of one hundred
percent (100%) of the direct and indirect ownership interests in the mortgage borrower.

     (d) Borrower shall cooperate with all reasonable requests of Lender in order to convert the
Loan into a mortgage loan and one or more mezzanine loans and shall execute and deliver such
documents as shall reasonably be required by Lender in connection therewith, including, without
limitation, the delivery of non-consolidation, enforceability, authorization and execution opinions
(which opinions may include qualifications and assumptions consistent with those set forth in any
opinions delivered on the Closing Date) and an “Eagle 9” or “UCC plus” (or equivalent) UCC
insurance policy and the modification of organizational documents and loan documents and the
transfer of the membership interest in Borrower to the Mezzanine Borrower.

     It shall be an Event of Default if Borrower fails to comply with any of the terms, covenants
or conditions of this Section 18.35 after expiration of fifteen (15) Business Days notice thereof.

     Section 18.36. Component Notes. Lender, without in any way limiting Lender’s other
rights hereunder, in its sole and absolute discretion, shall have the right at any time to require
Borrower to execute and deliver “component” notes (including senior and junior notes), which

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notes
may be paid in such order of priority as may be designated by Lender, provided that (a) the
aggregate principal amount of such “component” notes shall equal the outstanding principal balance
of the Loan immediately prior to the creation of such “component” notes, (b) the weighted average
interest rate of all such “component” notes shall on the date created equal the interest rate which
was applicable to the Loan immediately prior to the creation of such “component” notes, (c) the
debt service payments on all such “component” notes shall on the date created equal the debt
service payment which was due under the Loan immediately prior to
the creation of such component notes and (d) the other terms and provisions of each of the
“component” notes shall be identical in substance and substantially similar in form to the Loan
Documents. Borrower shall cooperate with all reasonable requests of Lender in order to establish
the “component” notes and shall execute and deliver such documents as shall reasonably be required
by Lender in connection therewith, all in form and substance reasonably satisfactory to Lender,
including, without limitation, the severance of security documents if requested. It shall be an
Event of Default if Borrower fails to comply with any of the terms, covenants or conditions of this
Section 18.36 after the expiration of fifteen (15) Business Days after notice thereof.

     Section 18.37. Certain Matters Relating to Property Located in the State of
Connecticut.

With respect to the Property which is located in the State of Connecticut, notwithstanding anything
contained herein to the contrary:

     (a) The title of this Security Instrument, as executed, recorded and enforced in the State of
Connecticut shall be “Open-End Mortgage, Security Agreement, Assignment of Rents and Fixture
Filing” and the term “Security Instrument” as used herein shall mean this “Open-End Mortgage Deed.”

     (b) This Security Instrument shall constitute an Open-End Mortgage Deed in accordance with
Conn. Gen. Statutes Section 49-2. Further, it is agreed that additional advancement may be made by
Lender or its assignees as provided in this Security Instrument or any of the other Loan Documents
for the benefit of Borrower, whether such future advances are obligatory or made at the option of
Lender. Each such advance is to be secured with and have the same priority as the Debt to the
extent the amount of such subsequent advance when added to the amount of the Debt does not exceed
the sum of $150,000,000. For the purposes of complying with Section 49-2(c) of the Conn. Gen.
Statutes, the full amount of the loan authorized by this Security Instrument shall be $150,000,000.
Such advances are repayable no later than the maturity date specified in the Loan Documents.
Borrower shall execute a note or notes evidencing such future advances, which note or notes shall
be delivered to Lender or its assigns and which note or notes shall be included in the words “Note”
or “Debt” wherever either appears in the context of this Security Instrument. To the extent
permitted by law, the failure to execute such note or notes shall not impair the validity of this
Security Instrument and such advances shall be secured by the lien of this Security Instrument.
The foregoing reference to Section 49-2 of the Connecticut General Statutes shall not limit the
effect or the enforceability of the Security Instrument pursuant to any other provision of law.

109

 

     (c) COMMERCIAL TRANSACTION. BORROWER HEREBY ACKNOWLEDGES THAT THE TRANSACTION OF
WHICH THIS OPEN-END MORTGAGE IS A PART IS A COMMERCIAL TRANSACTION, AS THAT TERM IS DEFINED IN
SECTION 52-278(a) OF THE CONNECTICUT GENERAL STATUTES, AS AMENDED, AND BORROWER HEREBY VOLUNTARILY
AND KNOWINGLY WAIVES AND RELINQUISHES ANY AND ALL RIGHTS WHICH IT MAY HAVE, PURSUANT TO ANY LAW OR
CONSTITUTIONAL PROVISION, INCLUDING, WITHOUT LIMITATION, SECTION 52-278(a) ET SEQ.
OF THE CONNECTICUT GENERAL STATUTES, TO ANY NOTICE OR HEARING OR BOND PRIOR TO ANY ATTEMPT BY
LENDER TO OBTAIN
A PREJUDGMENT REMEDY AGAINST BORROWER IN CONNECTION WITH SUCH TRANSACTION.

     (d) A copy of the Note is attached hereto as Exhibit H and made a part hereof.

     (e) Borrower acknowledges, represents, and warrants that the Loan is for commercial purposes.
Borrower further acknowledges, represents and warrants that it is engaged exclusively in commercial
pursuits and that the proceeds of the Note are to be utilized in the business activities of
Borrower and will not be utilized for consumer purposes.

[Intentionally left blank]

110

 

     IN WITNESS WHEREOF, Borrower has duly executed this Security Instrument the day and year first
above written.

	 	 	 	 	 	 	 	 	 
	Borrower’s Organizational Identification Number: 4357580	 	 	 	GERA DANBURY LLC, Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	Signed, sealed and delivered in the presence of:
	 	 	 	 	By: 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	WITNESSES:

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 

Name:

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

Name:

	 	 	 	 	 	 	 	 

 

 

ACKNOWLEDGEMENT

	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	)	 	 	ss.:
	COUNTY OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 

     On the ___day of                      in the year ___, before me, the undersigned, a Notary Public in
and for said State, personally appeared                                          and                             
            , personally known
to me or proved to me on the basis of satisfactory evidence to be the individuals whose names are
subscribed to the within instrument and acknowledged to me that they executed the same in their
capacities, and that by their signatures on the instrument, the individuals, or the person upon
behalf of which the individuals acted, executed the instrument.

                                                            

Notary Public (SEAL)

 

 

EXHIBIT A

Legal Description of Premises

 

 

EXHIBIT B

SUMMARY OF RESERVES

 

 

EXHIBIT C

	 	 	 	 	 	 
	 

	 	Property: 	 	 	 
	 

	 	 	 	 	 
	 

	 	Location:	 	 	 
	 

	 	 	 	 	 
	Cash Flow Statement for Month of:                                        

	 	Year:	 	 	 

	 	 	 	 	 	 	 	 	 
	 	 	Current	 	 	Year to	 
	 	 	Month	 	 	Date	 
	 
	REVENUE
	 	 	 	 	 	 	 	 
	Net Rental Revenue
	 	 	 	 	 	 	 	 
	Other Revenue
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Effective Gross Income
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	OPERATING EXPENSES
	 	 	 	 	 	 	 	 
	Common Area Maintenance
	 	 	 	 	 	 	 	 
	Payroll
	 	 	 	 	 	 	 	 
	Administration
	 	 	 	 	 	 	 	 
	Leasing
	 	 	 	 	 	 	 	 
	Service
	 	 	 	 	 	 	 	 
	Clean & Decorate
	 	 	 	 	 	 	 	 
	Utilities
	 	 	 	 	 	 	 	 
	Repairs & Maintenance
	 	 	 	 	 	 	 	 
	Taxes
	 	 	 	 	 	 	 	 
	Insurance
	 	 	 	 	 	 	 	 
	Management Fees
	 	 	 	 	 	 	 	 
	Other
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Total Operating Expenses
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Net Operating Income
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	RECURRING EXPENSES
	 	 	 	 	 	 	 	 
	To Include Expenses for: Carpet Replacement, Appliance Replacement, HVAC/Water Heater
Replacement; Miniblinds/Drapes/Ceiling Fans:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	NON-RECURRING EXPENSES
	 	 	 	 	 	 	 	 
	To Include Capital Expenses for: Playground, Major Signage, Lawns/Trees/Shrubs,
Paving/Parking, Roof Replacement, Carpentry/Siding/Balconies, Exterior Paint, Major
Concrete/Sidewalks, Foundations, Major Exterior, Boiler Replacement, Major HVAC
Replacement, Plumbing Replace, Electrical Replace, Other Major, Fire & Storm, Ins. Loss
Recovery:
	 	 	 	 	 	 	 	 
	Net Cash Flow
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	Certified By:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Management Company:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

EXHIBIT D

Required Engineering Work

 

 

EXHIBIT E

Form of Direction Letter

[Letterhead of Landlord]

[Name and Address of tenant]

Re: [Address of Premises]

Dear tenant:

     You are hereby directed to make all future payments of rent and other sums due to Landlord
under the Lease payable as follows:

Payable To: Borrower and Wachovia Bank, National Association, as secured party

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	ABA #	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Account #	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Address:	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

     Only funds paid as set forth above will be credited against sums due by you to landlord.
Until otherwise advised in writing by Landlord and the above-mentioned bank (or its
successor), you should continue to make your payments for rent and other sums as directed by the
terms of this letter.

     Thank you in advance for your cooperation with this change in payment procedures.

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

 

 

EXHIBIT F

Intentionally Omitted.

 

 

EXHIBIT G

Underwritten Rent

None.

 

 

EXHIBIT H

Copy of Noteexv10w1

 

Exhibit 10.1

 

    TRADEMARK
    LICENSE AGREEMENT

 

    THIS TRADEMARK LICENSE AGREEMENT   (the
    “Agreement”) has an effective date of
    June 18, 2007 (the “Effective Date”), and
    is made by and between Grubb & Ellis Company, its
    subsidiaries, successors and assigns, a Delaware Corporation
    (the “Licensor”) and Grubb & Ellis
    Realty Advisors, Inc., its subsidiaries, successors and assigns,
    a Delaware Corporation (the “Licensee”).

 

    WITNESSETH:

 

    WHEREAS, Licensor is the owner of certain trademarks,
    trade names, emblems
    and/or logos
    identified in Exhibit A to this Agreement
    (collectively, the “Licensed Marks”);

 

    WHEREAS, Licensee has been using the Licensed Marks, with
    Licensor’s express knowledge and consent, in such a manner
    in which Licensor fully approves (the “Prior Use”);

 

    WHEREAS, each of Licensor and Licensee wish to formally
    set forth the terms and conditions on which Licensee shall
    continue to use the Licensed Marks; and

 

    WHEREAS, Licensor is willing to grant to Licensee the
    nonexclusive right to use the Licensed Marks subject to the
    terms and conditions of this Agreement, and Licensee is willing
    to accept such rights and obligations.

 

    NOW, THEREFORE, in consideration of the mutual covenants
    and conditions contained herein and intending to be legally
    bound, the parties hereby agree as follows.

 

			
	 	    1.  
	
    Grant of License.   Subject to the terms and
    conditions of this Agreement, Licensor grants to Licensee for
    the “Term” of this agreement, as defined in
    Paragraph 11 below, the nonexclusive, nontransferable right
    and license to use the Licensed Marks in a manner and form
    consistent with the Prior Use and only in connection with the
    providing, distribution, promotion, advertising or sale of those
    services identified in Exhibit B (the
    “Licensed Services”), throughout the world (the
    “Territory”).

	 
	 	    2.  
	
    Limitations on Grant of License; Acknowledgment of Prior
    Use.

 

			
	 	    a.  
	
    All rights in the Licensed Marks other than those specifically
    granted herein are hereby expressly reserved to Licensor for its
    benefit and use. Licensee acknowledges that it will not acquire
    any rights in the Licensed Marks as a result of Licensee’s
    use thereof.

	 
	 	    b.  
	
    Licensee shall at no time use or authorize the use of any
    trademark, logo, service mark, trade name or other designation
    identical with, or confusingly or colorably similar to, the
    Licensed Marks.

	 
	 	    c.  
	
    The license herein granted is personal and may not be
    sublicensed, assigned, transferred, pledged, mortgaged or
    otherwise encumbered in whole or in part by Licensee without the
    prior express written consent of Licensor.

	 
	 	    d.  
	
    As between Licensor and Licensee, Licensor shall be deemed to be
    the Licensor of all materials created for the Licensed Services
    hereunder, including but not limited to artwork. For copyright
    purposes, Licensee shall be considered the owner of all designs,
    artwork, tools or dies manufactured or

 

 

			
	 	
	
    created in association with the Licensed Services; provided,
    however, that Licensee claims no right, title or interest in
    and is granted no ownership or control of the Licensed Marks (or
    any modification thereto, or derivative work thereof)) other
    than as expressly provided herein, and provided further
    that Licensee’s ownership of copyrights related to
    designs and artwork extends only to those portions of designs
    and artwork that are separate and distinct from the Licensed
    Marks.

 

			
	 	    e.  
	
    The parties hereto acknowledge and agree that Licensee’s
    Prior Use of the Licensed Marks has been in a manner consistent
    with the terms and conditions hereof and that this Agreement
    shall be deemed to ratify such Prior Use, and retroactively
    grant to Licensee prior to the Effective Date, Licensee’s
    right to the Licensed Marks in accordance with the terms hereof.

 

			
	 	    3.  
	
    Licensee Obligations.

 

			
	 	    a.  
	
    Licensee shall provide, advertise, distribute and sell the
    Licensed Services in an ethical manner and in accordance with
    the provisions and intent of this Agreement throughout the Term
    of this Agreement.

	 
	 	    b.  
	
    Licensee shall not encumber or cause to be encumbered in any
    manner, the Licensed Marks, or cause or permit any expenses to
    be charged to Licensor without Licensor’s prior written
    approval in each instance.

 

			
	 	    4.  
	
    Quality Assurance.

 

			
	 	    a.  
	
    Licensee shall use the Licensed Marks in accordance with the
    requirements of all applicable laws and regulations and in the
    manner and form consistent with the Prior Use.

	 
	 	    b.  
	
    Licensor shall have the right, at its sole cost and expense, and
    upon reasonable notice to Licensee to audit for quality control
    purposes Licensee’s (i) facilities,
    (ii) inventory of materials bearing the Licensed Marks, and
    (iii) books and records relating to the provision,
    distribution, sale, advertising and promotion of the Licensed
    Services
    and/or the
    use of the Licensed Marks in connection therewith. Licensor
    shall conduct no more than one (1) such quality control
    audits in any given calendar year, unless additional audits are
    agreed to in advance in writing by Licensee. In the event
    Licensor determines that the quality control of Licensee falls
    below Licensor’s standards and specifications, Licensor
    promptly shall give Licensee written notice setting forth all
    such deficiencies, and shall further provide Licensee a
    reasonable period of not less than thirty (30) days in
    which Licensee shall have the right to cure such deficiencies.

 

			
	 	    5.  
	
    Trademark Notice.   Licensee shall cause to be
    imprinted irremovably and legibly on or adjacent to (as
    practicable) any use of the Licensed Mark the designation
    ®
    or tm,
    as the Licensor deems appropriate to protect such trademark (and
    as is in compliance with relevant trademark law). Licensor
    agrees that, in instances where the Licensee cannot imprint the
    designation
    ®
    or
    tm
    directly adjacent to the use of the Licensed Marks, Licensee may
    include a trademark notice in form and substance approved in
    advance by Licensor.

 

 

 

			
	 	    6.  
	
    Compensation.

 

			
	 	    a.  
	
    For ten dollars ($10) and other good and valuable consideration,
    the receipt of which is hereby acknowledged, Licensee shall be
    entitled to use the Licensed Marks in its business on a
    royalty-free basis.

 

			
	 	    7.  
	
    Licensor Warranties and Representations.
      Licensor warrants and represents that:

 

			
	 	    a.  
	
    Each Licensed Mark is valid and enforceable;

	 
	 	    b.  
	
    Use of any Licensed Marks does not infringe any rights of third
    parties; and

	 
	 	    c.  
	
    It has the right and authority to enter into this Agreement.

 

			
	 	    8.  
	
    Licensee Warranties and Representations.  
    Licensee warrants and represents that:

 

			
	 	    a.  
	
    It shall use the Licensed Marks only as set forth in
    Paragraph 1 above, and for the purposes and set forth in
    Paragraph 1 above;

	 
	 	    b.  
	
    It shall cooperate and comply with Licensor’s instructions
    in preparing and filing Trademark registrations, if needed, as
    required by law and in obtaining any necessary government
    approvals; and shall execute any documents deemed necessary by
    Licensor to obtain protection for the Licensed Marks or to
    maintain their continued validity and enforceability;

	 
	 	    c.  
	
    It shall not engage in any action or practice that disparages or
    devalues the Licensed Marks or Licensor; and

	 
	 	    d.  
	
    It has the right and authority to enter into this Agreement.

 

			
	 	    9.  
	
    Ownership.   Licensee acknowledges
    Licensor’s right, title, and interest in and to all
    Licensed Marks. Licensee shall not at any time do or cause to be
    done, or fail to do or cause not to be done, any act or thing,
    directly or indirectly, contesting or in any way impairing
    Licensor’s right, title, or interest in any of the Licensed
    Marks. Each and every use of any of the Licensed Marks by
    Licensee shall inure to the benefit of Licensor.

	 
	 	    10. 
	
    Indemnification.

 

			
	 	    a.  
	
    Subject to the terms and conditions of this paragraph, Licensor
    shall, at its own cost and expense, defend (with counsel of
    Licensor’s choice), indemnify and hold harmless Licensee,
    and/or its
    officers, directors, employees and agents (collectively, the
    “Licensee Entities”) from and against any and
    all losses, liability, claims, suits, actions, proceedings,
    judgments, awards, damages and expenses (including reasonable
    attorneys’ fees) that they, or any of them, may incur or
    suffer by reason of any claim for trademark infringement on
    account of Licensee’s use of the Licensed Marks, but only
    to the extent the Licensed Marks have been used in accordance
    with the terms and conditions of this Agreement. The Licensee
    Entities shall notify Licensor of any claim or notice of claim
    for indemnification which would be subject to this paragraph as
    soon as practicable after the date upon which the claim for
    which indemnification is sought is first asserted against
    Licensee, provided, however, Licensee’s failure timely to
    provide such notice shall not negate Licensor’s obligations
    under this

 

 

			
	 	
	
    sub-paragraph. The Licensee Entities may seek counsel of their
    own choice to represent them in such matter at their cost and
    expense. If Licensor fails to defend the Licensee Entities, the
    Licensee Entities may (but are not obligated to) assume the
    conduct of the defense or settle the claim with Licensor’s
    consent, which consent shall not be unreasonably withheld,
    delayed or conditioned, and in such event Licensor shall also be
    fully responsible for the costs and expenses of the defense
    and/or
    settlement, including, without limitation, counsel fees and
    expense (including expert fees) and any judgments, settlements
    and awards incurred against the Licensee Entities.

 

			
	 	    b.  
	
    Subject to the terms and conditions of this paragraph, Licensee
    shall, at its own cost and expense, defend (with counsel of
    Licensee’s choice), indemnify and hold harmless Licensor,
    and/or its
    officers, directors, employees and agents (collectively, the
    “Licensor Entities”) from and against any and
    all losses, liability, claims, suits, actions, proceedings,
    judgments, awards, damages and expenses (including reasonable
    attorneys’ fees) that they, or any of them, may incur or
    suffer by reason of any claim or action involving any
    liabilities arising out of Licensee’s breach of this
    Agreement. The Licensor Entities shall notify Licensee of any
    claim or notice of claim for indemnification which would be
    subject to this paragraph as soon as practicable, after the date
    upon which the claim for which indemnification is sought is
    first asserted against Licensor, provided, however,
    Licensor’s failure timely to provide such notice shall not
    negate Licensee’s obligations under this sub-paragraph. The
    Licensor Entities may seek counsel of their own choice to
    represent them in such matter at their cost and expense. If
    Licensee fails to defend the Licensor Entities, the Licensor
    Entities may (but are not obligated to) assume the conduct of
    the defense or settle the claim with Licensee’s consent,
    which consent shall not be unreasonably withheld, delayed or
    conditioned, and in such event Licensee shall thereupon be fully
    responsible for the costs and expenses of the defense
    and/or
    settlement, including, without limitation, counsel fees and
    expense (including expert fees) and any judgments, settlements
    and awards incurred against the Licensor Entities.

 

			
	 	    11. 
	
    Term.   The “Term” of this
    Agreement shall be perpetual unless this Agreement is terminated
    according to its terms or by operation of law.

	 
	 	    12. 
	
    Termination.   This Agreement may be terminated
    prior to the expiration of the term as follows:

 

			
	 	    a.  
	
    By mutual written agreement of the parties;

	 
	 	    b.  
	
    By either party on thirty (30) days written notice with
    opportunity for cure in the event the non-terminating party has
    failed or neglected to perform any of its obligations under this
    agreement;

 

			
	 	    13. 
	
    Rights and Duties Upon Termination or Expiration.
      Upon termination or expiration of this Agreement:

 

			
	 	    a.  
	
    Licensee shall immediately cease all provision, distribution,
    sale, offering for sale, advertising and promotion of services
    using the Licensed Marks.

 

 

 

    14.  Miscellaneous.

 

			
	 	    a.  
	
    Notices. Any and all notices, elections, offers,
    acceptances, or demands permitted or required to be made under
    this Agreement shall be in writing, signed by the person giving
    such notice, election, offer, acceptance, or demand and shall be
    delivered personally, or sent by registered or certified mail,
    postage prepaid, by facsimile transmission (only if a machine
    confirmation of receipt is obtained and a copy of the notice is
    sent by mail), or any professional delivery service that
    requires a signed, written receipt confirming delivery of the
    envelope or package containing the notice, at the addresses
    listed below or at such other address as may be supplied in
    writing:

 

    Licensee:

 

    Licensor:

 

			
	 	        
	
    The effective date of such notice, election, offer, acceptance,
    or demand shall be: (i) the date delivered or transmitted,
    if delivery is by hand or facsimile, or (ii) three
    (3) days after the date of mailing, for all other forms of
    delivery.

	 
	 	    b.  
	
    Successors and Assigns.  This Agreement shall
    be binding on and shall inure to the benefit of the parties,
    their respective permitted (a) successors,
    (b) successors in title, and (c) assigns; and each
    party agrees, on behalf of it, its successors, successors in
    title, and assigns, to execute any instruments that may be
    necessary or appropriate to carry out and execute the purpose
    and intentions of this Agreement.

	 
	 	    c.  
	
    Amendment.  No change, modification, or
    amendment of this Agreement shall be valid or binding on the
    parties unless such change or modification shall be in writing
    signed by both parties to this Agreement.

	 
	 	    d.  
	
    Relationship of the Parties.  This Agreement
    does not constitute and shall not be construed as constituting a
    partnership or joint venture between Licensor and Licensee.
    Neither party shall have any right to obligate or bind the other
    party in any manner whatsoever by virtue of this Agreement, and
    nothing herein contained shall give, or is intended to give, any
    rights of any kind to any third persons.

	 
	 	    e.  
	
    No Waiver.  The failure of any party to insist
    on strict performance of a covenant hereunder or of any
    obligation hereunder shall not be a waiver of such party’s
    right to demand strict compliance therewith in the future, nor
    shall the same be construed as a novation of this Agreement.

	 
	 	    f.  
	
    Integration.  This Agreement constitutes the
    full and complete agreement of the parties with respect to the
    subject matter hereof, and supersedes any and all prior
    agreements between the parties.

	 
	 	    g.  
	
    Captions.  Titles or captions of articles and
    paragraphs contained in this Agreement are inserted only as a
    matter of convenience and for reference, and in no way define,
    limit, extend, or describe the scope of this Agreement or the
    intent of any provision hereof.

	 
	 	    h.  
	
    Counterparts.  This Agreement may be executed
    one or more original, facsimile or electronic counterparts, each
    of which shall for all purposes constitute

 

 

			
	 	
	
    the original Agreement, binding on the parties, and each party
    hereby covenants and agrees to execute all duplicates or
    replacement counterparts of this Agreement as may be required.

 

			
	 	    i.  
	
    Choice of Law and Forum.  This Agreement shall
    be governed by and construed in accordance with the laws of the
    State of New York without regard to its conflict of law
    principles. Any action or any proceeding of any kind or nature,
    with respect to or arising out this Agreement shall be
    instituted and tried exclusively in the state or federal courts
    located in New York County, New York, and courts with appellate
    jurisdiction therefrom, and the parties hereby agree that venue
    in New York County, New York is proper and convenient.

	 
	 	    j.  
	
    Severability.  In the event any provision,
    clause, sentence, phrase, or word hereof, or the application
    thereof in any circumstances, is held to be invalid or
    unenforceable, such invalidity or unenforceability shall not
    affect the validity or enforceability of the remainder hereof,
    or of the application of any such provision, sentence, clause,
    phrase, or word in any other circumstances.

 

    Remainder of page intentionally
    blank.

    Signature page
    follows.

 

 

 

    IN WITNESS WHEREOF, the parties hereto have caused this
    Agreement to be executed on the Effective Date by their duly
    authorized officers.

 

    Grubb & Ellis Company

    (“Licensor”)

 

	 	 	 	 
	By:	/s/
Mark E. Rose 	 
	 
	Its:	Chief
Executive Officer	 
	 
	Date:	June
18, 2007	 

 

 

    Grubb & Ellis Realty Advisors, Inc.

    (“Licensee”)

 

	 	 	 	 
	By:	/s/
Rich W. Pehlke 	 
	 
	Its:	Chief
Financial Officer	 
	 
	Date:	June
18, 2007	 

 

 

    Signature Page to

    Trademark License
    Agreement

 

 

    EXHIBIT A

    Licensed Marks

 

    The marks identified on the following pages shall be considered
    Licensed Marks.

 

 

    EXHIBIT B

    Licensed Services

 

    Licensor authorizes the following Licensed Services to be
    provided by Licensee bearing the Licensed Marks:

 

    Real Estate related activities.

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