Document:

Exhibit 10.2

 

AMENDED AND RESTATED SENIOR MEZZANINE  LOAN AGREEMENT

 

Originally Closed on April 1, 2008

Amendment Effective as of August 22, 2008

 

between

 

THE BORROWERS NAMED HEREIN

 

collectively, as Borrower

and

 

THE LENDERS NAMED HEREIN

 

collectively, as Lender

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  ARTICLE
  I

  	
   

  
	
  GENERAL
  TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
  The Loan

  	
  34

  
	
  Section 1.2.

  	
  The Term

  	
  34

  
	
  Section 1.3.

  	
  Interest and Principal

  	
  34

  
	
  Section 1.4.

  	
  Interest Rate Cap Agreements

  	
  35

  
	
  Section 1.5.

  	
  Method and Place of Payment

  	
  36

  
	
  Section 1.6.

  	
  Regulatory Change

  	
  37

  
	
  Section 1.7.

  	
  Taxes

  	
  37

  
	
  Section 1.8.

  	
  Release

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
   

  
	
  VOLUNTARY
  PREPAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  Voluntary Prepayment

  	
  38

  
	
  Section 2.2.

  	
  Property Releases

  	
  40

  
	
  Section 2.3.

  	
  Value Add Pool Equity Releases

  	
  42

  
	
  Section 2.4.

  	
  Release of Vacant Land

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
   

  
	
  ACCOUNTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
  Cash Management Account

  	
  45

  
	
  Section 3.2.

  	
  Distributions from Cash
  Management Account

  	
  46

  
	
  Section 3.3.

  	
  Loss Proceeds Account

  	
  47

  
	
  Section 3.4.

  	
  Environmental Escrow Account

  	
  47

  
	
  Section 3.5.

  	
  Intentionally Omitted

  	
  48

  
	
  Section 3.6.

  	
  Account Collateral

  	
  48

  
	
  Section 3.7.

  	
  Bankruptcy

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
  REPRESENTATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Organization

  	
  50

  
	
  Section 4.2.

  	
  Authorization

  	
  50

  
	
  Section 4.3.

  	
  No Conflicts

  	
  50

  
	
  Section 4.4.

  	
  Consents

  	
  50

  
	
  Section 4.5.

  	
  Enforceable Obligations

  	
  50

  
	
  Section 4.6.

  	
  No Default

  	
  51

  
	
  Section 4.7.

  	
  Payment of Taxes

  	
  51

  
	
  Section 4.8.

  	
  Compliance with Law

  	
  51

  

 

i

 

	
  Section 4.9.

  	
  ERISA

  	
  51

  
	
  Section 4.10.

  	
  Investment Company Act

  	
  51

  
	
  Section 4.11.

  	
  No Bankruptcy Filing

  	
  52

  
	
  Section 4.12.

  	
  Other Debt

  	
  52

  
	
  Section 4.13.

  	
  Litigation

  	
  52

  
	
  Section 4.14.

  	
  Leases; Material Agreements

  	
  52

  
	
  Section 4.15.

  	
  Full and Accurate Disclosure

  	
  53

  
	
  Section 4.16.

  	
  Financial Condition

  	
  53

  
	
  Section 4.17.

  	
  Single-Purpose Requirements

  	
  54

  
	
  Section 4.18.

  	
  [Intentionally Omitted]

  	
  54

  
	
  Section 4.19.

  	
  Not Foreign Person

  	
  54

  
	
  Section 4.20.

  	
  Labor Matters

  	
  54

  
	
  Section 4.21.

  	
  Title

  	
  54

  
	
  Section 4.22.

  	
  No Encroachments

  	
  54

  
	
  Section 4.23.

  	
  Physical Condition

  	
  55

  
	
  Section 4.24.

  	
  Fraudulent Conveyance

  	
  55

  
	
  Section 4.25.

  	
  Management

  	
  56

  
	
  Section 4.26.

  	
  Condemnation

  	
  56

  
	
  Section 4.27.

  	
  Utilities and Public Access

  	
  56

  
	
  Section 4.28.

  	
  Environmental Matters

  	
  56

  
	
  Section 4.29.

  	
  Assessments

  	
  57

  
	
  Section 4.30.

  	
  No Joint Assessment

  	
  57

  
	
  Section 4.31.

  	
  Separate Lots

  	
  57

  
	
  Section 4.32.

  	
  Permits; Certificate of
  Occupancy

  	
  57

  
	
  Section 4.33.

  	
  Flood Zone

  	
  57

  
	
  Section 4.34.

  	
  Security Deposits

  	
  58

  
	
  Section 4.35.

  	
  Acquisition Documents

  	
  58

  
	
  Section 4.36.

  	
  Insurance

  	
  58

  
	
  Section 4.37.

  	
  Ground Leased Parcels

  	
  58

  
	
  Section 4.38.

  	
  Intentionally Omitted

  	
  59

  
	
  Section 4.39.

  	
  Estoppel Certificates

  	
  59

  
	
  Section 4.40.

  	
  Embargoed Person

  	
  60

  
	
  Section 4.41.

  	
  Compliance with
  Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws

  	
  60

  
	
  Section 4.42.

  	
  Tax Basis

  	
  60

  
	
  Section 4.43.

  	
  Survival

  	
  60

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Existence

  	
  61

  
	
  Section 5.2.

  	
  Maintenance of Property

  	
  61

  
	
  Section 5.3.

  	
  Compliance with Legal
  Requirements

  	
  61

  
	
  Section 5.4.

  	
  Impositions and Other Claims

  	
  61

  
	
  Section 5.5.

  	
  Access to Property

  	
  62

  
	
  Section 5.6.

  	
  Cooperate in Legal
  Proceedings

  	
  62

  
	
  Section 5.7.

  	
  Leases

  	
  62

  

 

ii

 

	
  Section 5.8.

  	
  Plan Assets, etc.

  	
  64

  
	
  Section 5.9.

  	
  Further Assurances

  	
  65

  
	
  Section 5.10.

  	
  Management of Properties

  	
  65

  
	
  Section 5.11.

  	
  Notice of Material Change

  	
  66

  
	
  Section 5.12.

  	
  Annual Financial Statements

  	
  66

  
	
  Section 5.13.

  	
  Quarterly Financial
  Statements

  	
  67

  
	
  Section 5.14.

  	
  Monthly Financial Statements

  	
  68

  
	
  Section 5.15.

  	
  Insurance

  	
  69

  
	
  Section 5.16.

  	
  Casualty and Condemnation

  	
  73

  
	
  Section 5.17.

  	
  Annual Budget

  	
  75

  
	
  Section 5.18.

  	
  General Indemnity

  	
  75

  
	
  Section 5.19.

  	
  Nonbinding Consultation

  	
  76

  
	
  Section 5.20.

  	
  Compliance with Encumbrances

  	
  76

  
	
  Section 5.21.

  	
  Encumbered Property
  Indebtedness

  	
  77

  
	
  Section 5.22.

  	
  Disposition Assets

  	
  77

  
	
  Section 5.23.

  	
  Distributions

  	
  77

  
	
  Section 5.24.

  	
  Enumbered Property Defaults

  	
  78

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 6.1.

  	
  Liens on the Properties

  	
  78

  
	
  Section 6.2.

  	
  Ownership

  	
  78

  
	
  Section 6.3.

  	
  Transfer

  	
  79

  
	
  Section 6.4.

  	
  Debt

  	
  80

  
	
  Section 6.5.

  	
  Dissolution; Merger or
  Consolidation

  	
  80

  
	
  Section 6.6.

  	
  Change In Business

  	
  80

  
	
  Section 6.7.

  	
  Debt Cancellation

  	
  80

  
	
  Section 6.8.

  	
  Affiliate Transactions

  	
  81

  
	
  Section 6.9.

  	
  Misapplication of Funds

  	
  81

  
	
  Section 6.10.

  	
  Jurisdiction of Formation

  	
  81

  
	
  Section 6.11.

  	
  Modifications and Waivers

  	
  81

  
	
  Section 6.12.

  	
  ERISA

  	
  81

  
	
  Section 6.13.

  	
  Alterations and Expansions

  	
  82

  
	
  Section 6.14.

  	
  Advances and Investments

  	
  82

  
	
  Section 6.15.

  	
  Single-Purpose Entity

  	
  82

  
	
  Section 6.16.

  	
  Zoning and Uses

  	
  82

  
	
  Section 6.17.

  	
  Waste

  	
  83

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
  DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Event of Default

  	
  83

  
	
  Section 7.2.

  	
  Remedies

  	
  86

  
	
  Section 7.3.

  	
  No Waiver

  	
  87

  
	
  Section 7.4. 

  	
  Application of Payments after
  an Event of Default

  	
  87

  

 

iii

 

	
  ARTICLE VIII

  	
   

  
	
  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Conditions Precedent to Closing

  	
  87

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Successors

  	
  91

  
	
  Section 9.2.

  	
  GOVERNING LAW

  	
  91

  
	
  Section 9.3.

  	
  Modification, Waiver in
  Writing

  	
  91

  
	
  Section 9.4.

  	
  Notices

  	
  92

  
	
  Section 9.5.

  	
  TRIAL BY JURY

  	
  93

  
	
  Section 9.6.

  	
  Headings

  	
  93

  
	
  Section 9.7.

  	
  Assignment and Participation

  	
  93

  
	
  Section 9.8.

  	
  Severability

  	
  95

  
	
  Section 9.9.

  	
  Preferences

  	
  95

  
	
  Section 9.10.

  	
  Remedies of Borrower

  	
  95

  
	
  Section 9.11.

  	
  Offsets, Counterclaims and
  Defenses

  	
  95

  
	
  Section 9.12.

  	
  No Joint Venture

  	
  96

  
	
  Section 9.13.

  	
  Conflict; Construction of Documents

  	
  96

  
	
  Section 9.14.

  	
  Brokers and Financial
  Advisors

  	
  96

  
	
  Section 9.15.

  	
  Counterparts

  	
  96

  
	
  Section 9.16.

  	
  Estoppel Certificates

  	
  96

  
	
  Section 9.17.

  	
  Payment of Expenses; Mortgage
  Recording Taxes

  	
  96

  
	
  Section 9.18.

  	
  No Third-Party Beneficiaries

  	
  97

  
	
  Section 9.19.

  	
  Recourse

  	
  97

  
	
  Section 9.20.

  	
  Right of Set-Off

  	
  99

  
	
  Section 9.21.

  	
  Exculpation of Lender

  	
  99

  
	
  Section 9.22.

  	
  Servicer

  	
  99

  
	
  Section 9.23.

  	
  Prior Agreements

  	
  100

  

 

iv

 

AMENDED AND RESTATED SENIOR MEZZANINE LOAN AGREEMENT

 

This Amended and Restated Senior Mezzanine Loan Agreement (this “Agreement”)
is effective as of August 22, 2008 (“Effective Date”) and is
between GOLDMAN SACHS MORTGAGE COMPANY, a New York limited partnership (“GSMC”),
as successor in interest to Goldman Sachs Commercial Mortgage Capital, L.P. (“GSCMC”),
and CITICORP NORTH AMERICA, INC., a New York corporation (“Citigroup”
and, together with GSMC and their respective successors and assigns, including
any lawful holder of any portion of the Indebtedness (as hereinafter defined)
collectively, “Lender”), as lender, and each REQUIRED EQUITY PLEDGOR (as
hereinafter defined), AMERICAN FINANCIAL REALTY TRUST, a Maryland real estate
investment trust (“AFRT”), GKK STARS ACQUISITION LLC, a Delaware limited
liability company (“AFRT Owner”), FIRST STATES GROUP, L.P., a Delaware
limited partnership (“Operating Partnership”), FIRST STATES GROUP, LLC,
a Delaware limited liability company (“Operating Partnership GP” and together
with Operating Partnership, Required Equity Pledgor, AFRT, AFRT Owner and
Operating Partnership, collectively, jointly and severally, together with their
respective permitted successors and assigns, “Borrower”), as borrower.

 

RECITALS

 

GSCMC, Citigroup and SL Green made the Loan (as hereinafter defined) to
the Borrower on the Closing Date (the “Original Mezzanine Loan”) on the
terms and conditions set forth in that certain Loan Agreement, dated as of April 1,
2008 (“Original Loan Agreement”).

 

GSCMC assigned its right, title and interest in the Loan to GSMC, and
SL Green has assigned its right, title and interest in the Loan to GSCMC and
Citigroup in exchange for a portion of the Junior Mezzanine Loan (as defined
herein) and an additional portion Mortgage Loan.

 

Lender desires to bifurcate the Loan into two separate mezzanine loans,
and Borrower and Lender desire to make certain modifications to the Original
Loan Agreement.  In furtherance thereof,
Lender and Borrower have agreed to amend and restate the Original Loan
Agreement in its entirety.

 

Borrower and Lender agree that from and after the Effective Date, the
terms, covenants and provisions of the Original Loan Agreement are hereby
modified, amended, replaced, superseded and restated in their entirety so that
henceforth the terms, covenants and provisions of this Agreement shall
supersede the Original Loan Agreement.

 

Lender and Borrower therefore agree as follows:

 

DEFINITIONS

 

(a)           When used in this Agreement, the
following capitalized terms have the following meanings:

 

1

 

“Acceptable Counterparty” means any counterparty to an Interest
Rate Cap Agreement that has and maintains (a) either (i) a long-term
unsecured debt rating or counterparty rating of A+ or higher from S&P, or (ii) a
short-term unsecured debt rating of A-1 or higher from S&P, and (b) a
long-term unsecured debt rating of Aa3 or higher from Moody’s.

 

 “Account Collateral”
means, collectively, the Collateral Accounts and all sums at any time held,
deposited or invested therein, together with any interest or other earnings
thereon, and all proceeds thereof (including proceeds of sales and other
dispositions), whether accounts, general intangibles, chattel paper, deposit
accounts, instruments, documents or securities.

 

“Affiliate” means, with respect to any Person,
any other Person controlling, controlled by or under common control with such
Person (and “unaffiliated” means not an Affiliate).

 

“Affiliated Release Price” has the meaning set forth in Exhibit I.

 

“AFRT Equity” means 100% of the real estate investment trust
equity interests in AFRT.

 

“Aggregate Allocated Loan Amount” means, with respect to each
Property listed in Schedule E, the amount set forth in Schedule E
(which reflects the portion of the sum of (x) the Loan Amount (y) the
Junior Mezzanine Loan Amount and (z) the initial Encumbered Property Debt
allocated to such Property hereunder), subject to reduction to the extent
necessary to reflect Borrower’s then direct or indirect interest therein with
respect to any Joint Venture Property permitted hereunder.  The Aggregate Allocated Loan Amount of each
Property not listed on Schedule E shall be zero.

 

“Agreement” means this Amended and Restated Senior Mezzanine
Loan Agreement, as the same may from time to time hereafter be modified or
replaced.

 

“Allocated Loan Amount” means, with respect to
each Property, (x) the Aggregate Allocated Loan Amount, minus (y) the
portion of the applicable Encumbered Property Debt allocated to such Property
pursuant to the applicable Encumbered Property Debt Documents (but in no event
shall the Allocated Loan Amount of any Property be less than zero).

 

“ALTA” means the American Land Title Association, or any
successor thereto.

 

“Alteration” means any demolition, alteration, installation,
improvement  or expansion of or to any of
the Properties or any portion thereof other than (i) Tenant Improvements
required under Leases, (ii) any demolition, alteration, installation,
improvement or expansion performed in connection with the restoration of any of
the Properties as a result of a Casualty or Condemnation, (iii) routine
maintenance and repair worked performed at any of the Properties in the
ordinary course of business, and (iv) any demolition, alteration, installation,
improvement or expansion performed by any Tenant where such Tenant is entitled
to do the same without obtaining the consent or approval of the relevant
Property Owner pursuant to the applicable lease.

 

2

 

“Annual Budget” means a capital and operating expenditure budget
for the Properties prepared by Borrower and specifying amounts sufficient to
operate and maintain the Properties at a standard at least equal to that
maintained on the Closing Date.

 

“Appraisal” means an as-is appraisal that is prepared by a
member of the Appraisal Institute selected by Lender, meets the minimum
appraisal standards for national banks promulgated by the Comptroller of the
Currency pursuant to Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, as amended (FIRREA) and complies with the Uniform
Standards of Professional Appraisal Practice (USPAP).

 

“Approved Accounting Firm” means (i) PricewaterhouseCoopers,
(ii) Deloitte & Touche, (iii) KPMG, (iv) The Schonbraun
McCann Group, (v) Ernst & Young, (vi) Berdon LLP or any
other independent accounting firm reasonably approved by Lender in writing.

 

“Approved Annual Budget” has the meaning set forth in Section 5.17.

 

“Approved
Management Agreement” means, collectively or individually as the context
may require, those certain Property Management Agreements listed on Schedule
T, dated as of the Closing Date, between Borrower or a Property Owner and
the initial Approved Property Manager, as the same may be modified or replaced
in accordance herewith with the reasonable consent of Lender, and any other
management agreement that is approved by Lender, which approval shall not be
unreasonably withheld, conditioned or delayed, and with respect to which Lender
receives Rating Confirmation.

 

“Approved Property Manager” means (i) Sponsor, SL Green
Realty Corp. and their respective Affiliates, (ii) First States Management
Corp, L.P., (iii) First States Services Management LLC, (iv) GKK
Manager LLC, so long as it is an Affiliate of Sponsor, or (v) any other
management company that is approved by Lender, which approval shall not be
unreasonably withheld, conditioned or delayed, and with respect to which Lender
receives Rating Confirmation, in each case unless and until Lender requests the
termination of that management company pursuant to Section 5.10(d).

 

“Assignment” has the meaning set forth in Section 9.7(b).

 

“Assignment of Interest Rate Cap Agreement” means each
collateral assignment of an interest rate cap agreement executed by Borrower
and an Acceptable Counterparty in accordance herewith, each of which must be in
the form executed by Borrower and the initial Acceptable Counterparty on the
Closing Date, as the same may from time to time be modified or replaced in
accordance therewith and herewith.

 

“Bankruptcy Code” has the meaning set forth in Section 7.1(d).

 

“Blocked Account” has the meaning set forth in Section 3.1(b).

 

“Blocked Account Agreement” has the meaning set
forth in Section 3.1(b).

 

“Borrower” has the meaning set forth in the first paragraph of
this agreement.

 

3

 

“Borrower’s knowledge,” “the knowledge of Borrower” and
similar phrases shall (and shall be limited to) the actual (as distinguished from
imputed or construction knowledge) of Edward J. Matey, Jr., Sonya A.
Huffman, David Schonbraun, Andrew Levine and, with respect to leasing matters, Neil Kessner (and
Borrower hereby represents that such individuals are charged with having
knowledge regarding the Borrower and the Properties relevant to the
representations made herein); provided, however, with respect to any use of
this defined term as of a date after the Closing Date, “Borrower’s knowledge”
and “the knowledge of Borrower” shall be deemed to include such knowledge of
any Person who shall assume any actual or contemplated function of the
foregoing persons in the context in which this defined term is being used as of
the date with respect to which such knowledge is determined.  Lender acknowledges that the foregoing
individuals are identified solely for the purpose of defining the scope of
Borrower’s knowledge and not for the purpose of imposing personal liability or
creating any duties running from any such individual to Lender.

 

“Business Day” means any day other than (i) a Saturday and
a Sunday and (ii) a day on which federally insured depository institutions
in the State of New York or the state in which the offices of Lender, its
trustee, its Servicer or its Servicer’s collection account are located are
authorized or obligated by law, governmental decree or executive order to be
closed. When used with respect to an Interest Determination Date, “Business
Day” shall mean a day on which banks are open for dealing in foreign
currency and exchange in London.

 

“Capital Expenditure” means hard and soft costs incurred by
Borrower or its Affiliates with respect to replacements and capital repairs
made to the Properties (including repairs to, and replacements of, structural
components, roofs, building systems, parking garages, parking lots, and
expenditures for building improvements or major repairs), Leasing Commissions
and Tenant Improvements, in each case to the extent capitalized in accordance
with GAAP.

 

“Cash Management Bank” means a depository institution selected
by Lender in which Eligible Accounts may be maintained.  The initial Cash Management Bank shall be
LaSalle Bank, N.A.

 

“Casualty” means a fire, explosion, flood, collapse, earthquake
or other casualty affecting all or any portion of any Property.

 

“Certificates” means, collectively, any senior and/or
subordinate notes, debentures or pass-through certificates, or other evidence
of indebtedness, or debt or equity securities, or any combination of the
foregoing, representing a direct or beneficial interest, in whole or in part,
in the Loan or the Mortgage Loan, as the case may be.

 

“Change of Control” means the occurrence of
either or both of the following excluding any Transfer permitted in connection
with joint ventures pursuant to Section 6.3(b) or Section 2.3:
(i) the failure of any individual Borrower and/or Property Owner (other
than a Joint Venture Owner or any subsidiary thereof) to be directly or
indirectly 100% owned and controlled by Sponsor, or (ii) the failure of
any Single-Purpose Equityholder (if any) to be directly or indirectly 100%
owned and controlled by Sponsor.

 

4

 

“Closing Date” means April 1, 2008.

 

“Code” means 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
in temporary or final form.

 

“Collateral” means all assets owned from time to time by
Borrower including (i) the AFRT Equity, (ii) the Encumbered Property
Collateral, (iii) the Value Add Pool Equity, (iv) the Mortgage Loan
Property Owner Equity, (v) the Other Ground Lease Collateral, (vi) the
Revenues, (vii) all Distributions and (viii) all other tangible and intangible
property in respect of which Lender is granted a Lien under the Loan Documents,
and all proceeds thereof.

 

“Collateral Accounts” means, collectively, the Cash Management
Account, any Blocked Account, the Loss Proceeds Account, the Environmental Escrow
Account and any other Eligible Account established hereunder.

 

“Component Balance” has the meaning set forth in Section 1.3(c).

 

“Component Spread” has the meaning set forth in Section 1.3(c).

 

“Componentization Notice” has the meaning set forth in Section 1.3(c).

 

“Condemnation” means a taking or voluntary
conveyance of all or part of any of the Properties or any interest in or right
accruing to or use of any of the Properties, as the result of, or in settlement
of, any condemnation or other eminent domain proceeding by any Governmental
Authority.

 

“Consumer Price Index” means the
Consumer Price Index for All Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of Labor, New York Metropolitan
Statistical Area, All Items (1982-84=100), or any successor index thereto,
approximately adjusted, and in the event that the Consumer Price Index is
converted to a different standard reference base or otherwise revised, the
determination of adjustments provided for herein shall be made with the use of
such conversion factor, formula or table for converting the Consumer Price
Index as may be published by the Bureau of Labor Statistics or, if said Bureau
shall not publish the same, then with the use of such conversion factor, formula
or table as may be published by Prentice-Hall, Inc., or any other
nationally recognized publisher of similar statistical information; and if the
Consumer Price Index ceases to be published, and there is no successor thereto,
such other index as Lender and Borrower, each acting reasonably, shall agree
upon in writing.

 

“Contingent Obligation” means, with respect to any Person, any
obligation of such Person directly or indirectly guaranteeing any Debt of any
other Person in any manner and any contingent obligation to purchase, to
provide funds for payment, to supply funds to invest in any other Person or
otherwise to assure a creditor against loss.

 

“Cooperation Agreement” means that certain Cooperation
Agreement, dated as of the Closing Date, among Borrower, Lender and Sponsor, as
the same may from time to time be modified or replaced in accordance herewith.

 

5

 

“Damages” to a party means any and all liabilities, obligations,
losses, damages, penalties, assessments, actions, judgments, suits, claims,
costs, expenses (including reasonable attorneys’ fees whether or not suit is
brought), settlement costs and disbursements imposed on, incurred by or
asserted against such party; provided, however, Damages shall exclude
consequential damages incurred by Lender or Indemnified Parties, as the case
may be.

 

“Dana Portfolio” means those certain Properties specified in Schedule
Q, as modified from time to time to reflect any Transfer permitted pursuant
hereto.

 

“Dana Excess Cash Flow” means, for so long as the Dana
Portfolio, or any interest therein, shall be subject to the Liens of the Loan,
all Distributions deposited into the Cash Management Account that are
attributable to the Dana Portfolio.

 

“Dana Release Price” has the meaning set forth in Exhibit I.

 

“Debt” means, with respect to any Person,
without duplication:

 

(i)            all indebtedness of such Person to any
other party (regardless of whether such indebtedness is evidenced by a written
instrument such as a note, bond or debenture), including indebtedness for
borrowed money or for the deferred purchase price of property or services;

 

(ii)           all letters of credit issued for the
account of such Person and all unreimbursed amounts drawn thereunder;

 

(iii)          all indebtedness secured by a Lien on any
property owned by such Person (whether or not such indebtedness has been
assumed) except obligations for impositions which are not yet due and payable;

 

(iv)          all Contingent Obligations of such
Person;

 

(v)           all payment obligations of such Person
under any interest rate protection agreement (including any interest rate
swaps, floors, collars or similar agreements) and similar agreements;

 

(vi)          all contractual indemnity obligations of
such Person, other than those made in the ordinary course of business in
connection with the provision of goods and services to one or more of the
Properties; and

 

(vii)         any material actual or contingent liability to any
Person or Governmental Authority with respect to any employee benefit plan
(within the meaning of Section 3(3) of ERISA) subject to Title IV of
ERISA, Section 302 of ERISA or Section 412 of the Code.

 

“Debt Service” means, with respect to
any Test Period, the product of (x) the Principal Indebtedness plus the
Junior Mezzanine Loan Principal Indebtedness as of the last day of such Test
Period, times (y) the sum of the LIBOR Strike Rate plus the
weighted average of the 

 

6

 

Spread and the “Spread”
under and as defined in the Junior Mezzanine Loan Agreement, times (z) a
fraction, the numerator of which is 365 and the denominator of which is 360.

 

“Default” means the occurrence and uncured continuance of any
event which, but for the giving of notice or the passage of time, or both,
would be an Event of Default.

 

“Default Rate” means, with respect to any Note or Note
Component, the greater of (x) 4% per annum in excess of the interest rate
otherwise applicable to such Note or Note Component hereunder and (y) 1%
per annum in excess of the Prime Rate from time to time.

 

“Deferred
Maintenance Conditions” means the immediate repair and similar maintenance
items set forth in the Engineering Reports applicable to the Properties and
delivered to Borrower on or prior to the Closing Date.

 

“Disposition Assets” means the real property listed on Schedule
R.

 

“Distributions” means all (i) payments and distributions
and (ii) proceeds (as defined in Article 9 of the UCC) in respect of
the income, profits, payments, returns of capital, dividends and other
distributions (whether in the form of cash or otherwise), in each case,
actually distributed by the owner of an Encumbered Property, the TRS Owner or
any Joint Venture Owner to any Borrower.

 

“DSCR” means, with respect to any Test
Period, the quotient of:

 

 (i)           Net Operating Income for such period, less
actual aggregate principal, interest and required reserve payments (in each
case, due and payable, or then required to be reserved) in respect of
Encumbered Property Debt for such Test Period (adjusted to reflect Encumbered
Properties that have been theretofore released from the Liens of the Loan
Documents), calculated, in the case of floating rate Encumbered Property Debt,
as if LIBOR were at all times equal to the LIBOR strike rate on the interest
rate cap purchased in accordance with the corresponding Encumbered Property
Debt Documents (or, if no interest rate cap was required under such Encumbered
Property Debt Documents, LIBOR plus 3%), less, for purposes of
calculating the LIBOR Strike Rate for the Extension Term, projected Tenant
Improvements and Leasing Commissions reasonably approved by Lender and
Normalized Capital Expenditures; divided by

 

(ii)           the Debt
Service for such period.

 

Notwithstanding the foregoing, (a) rental income under the Lease
with Bank of America in respect of the Dana Portfolio for purposes of
calculating DSCR during the Extension Term or for purposes of calculating the
LIBOR Strike Rate for the Extension Term shall be deemed to be equal to the
annual rental payment that is contractually required to be paid by Bank of
America in respect of such Lease in January 2011 (i.e., rental payments
received under such Lease that are in excess of such January 2011 rental
amount shall be ignored for purposes of calculating DSCR) and (b) for
purposes of calculating DSCR at the time of the exercise of the extension
option described in Section 1.2(b), the LIBOR strike price for the
interest rate cap applicable to the Mortgage Loan shall be the LIBOR strike
price applicable to the extension term 

 

7

 

as described in clause (2) of the definition of “LIBOR
Strike Rate” in the Mortgage Loan Agreement.

 

“Eligible Account” means (i) a segregated account
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution, or (ii) a
segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state-chartered depository
institution which has an investment-grade rating and is subject to regulations
regarding fiduciary funds on deposit under, or similar to, Title 12 of the Code
of Federal Regulations Section 9.10(b) which, in either case, has
corporate trust powers, acting in its fiduciary capacity.

 

“Eligible Institution” means an institution (i) whose
commercial paper, short-term debt obligations or other short-term deposits are
rated at least A–1, Prime-1 or F-1, as applicable, by each of the Rating
Agencies and whose long-term senior unsecured debt obligations are rated
at least A or A2, as applicable, by each of the Rating Agencies, and whose
deposits are insured by the FDIC or (ii) with respect to which Lender
shall have received Rating Confirmation.

 

“Embargoed Person” has the meaning set forth in Section 4.40.

 

“Encumbered Property” means, individually or collectively, as
the context may require, each of the properties listed on Schedule A-2,
including each of the Properties securing the Mortgage Loan or otherwise owned
by the Mortgage Loan Property Owner, as modified from time to time to reflect
any Transfer permitted pursuant to Section 2.2.

 

“Encumbered Property Collateral” means the applicable percentage
of the direct and indirect equity interests in each Person that owns Encumbered
Property, as set forth on Schedule H hereto, as modified from time to
time to reflect any Transfer permitted pursuant to Section 6.3(b) or
Section 2.2.

 

“Encumbered Property Debt” or “Encumbered Property Loan”
means the Mortgage Loan and all indebtedness secured by Liens on Encumbered
Property pursuant to Encumbered Property Debt Documents.

 

“Encumbered Property Debt Documents” means, collectively or
individually, as the context may require, all loan documents in favor of any
Encumbered Property Lender with respect to each Encumbered Property as and to
the extent listed on Schedule U, as the same may be amended, replaced
(including, without limitation, in connection with any refinancing thereof
permitted hereunder) or otherwise modified from time to time with the prior
reasonable consent of Lender (Borrower acknowledging it shall be reasonable for
Lender to withhold such consent in connection with any amendment, replacement
or modification that would result in (i) an increase in the principal
amount, interest rate or the amortization of principal, (ii) limitations
on prepayments or the imposition of a fee in connection therewith, (iii) a
reduction on cash available for distribution or (iv) a Material Adverse
Effect).  Lender hereby consents to the
modifications made to the Encumbered Property Debt Documents relating to the
Dana Portfolio as contemplated by that certain approval letter dated March 28,
2008 from the lender thereunder, a copy of which was provided to Lender prior
to the Closing Date.

 

8

 

“Encumbered Property Lender” means, individually or
collectively, as the context may require, each holder of Encumbered Property
Debt.

 

“Encumbered Property Owner” means each owner of an Encumbered
Property.

 

“Encumbered Property Pledgor” means, individually or
collectively, as the context may require, each Person listed on Schedule H
hereto, as modified from time to time to reflect any Transfer permitted
pursuant to Section 6.3(b) or Section 2.2.

 

“Engineering Report” means a structural and seismic engineering
report or reports with respect to each of the Properties prepared by an
independent engineer reasonably approved by Lender and delivered to Lender in
connection with the Loan, and any amendments or supplements thereto delivered
to Lender.

 

“Environmental Claim” means any written notice, claim,
proceeding, investigation or demand by any Person or Governmental Authority
alleging or asserting liability with respect to Borrower, any Property Owner or
any of the Properties arising out of, based on or resulting from (i) the
alleged presence, Use or Release of any Hazardous Substance, (ii) any
alleged violation of any Environmental Law, or (iii) any alleged injury or
threat of injury to property, health or safety or to the environment caused by
Hazardous Substances.

 

“Environmental
Escrow Amount” means $850,000.

 

“Environmental Conditions” means those items described in Schedule
F.

 

“Environmental Escrow Account” has the meaning set forth in Section 3.4(a).

 

“Environmental Indemnity” means, with respect to each Property,
that certain environmental indemnity agreement executed by Borrower and the
Sponsor as of the Closing Date, as the same may from time to time be modified
or replaced in accordance herewith.

 

“Environmental Laws” means any and all present and future
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, any judicial or administrative orders, decrees or
judgments thereunder, and any permits, approvals, licenses, registrations,
filings and authorizations, in each case as now or hereafter in effect,
relating to the pollution, protection or cleanup of the environment, relating
to the impact of Hazardous Substances on property, health or safety, or the Use
or Release of Hazardous Substances, or relating to the liability for or costs
of other actual or threatened danger to health or the environment.  The term “Environmental Law” includes,
but is not limited to, the following statutes, as amended, any successors thereto,
and any regulations promulgated pursuant thereto, and any state or local
statutes, ordinances, rules, regulations and the like addressing similar
issues:  the Comprehensive Environmental
Response, Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Materials Transportation Act; the Resource
Conservation and Recovery Act (including Subtitle I relating to underground
storage tanks); the Clean Water Act; the Clean Air Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health
Act; the Federal Water Pollution Control Act; the Federal Insecticide,
Fungicide and Rodenticide Act; the Endangered Species Act; the National
Environmental Policy Act; and the River and Harbors 

 

9

 

Appropriation Act. 
The term “Environmental Law” also includes, but is not limited
to, any present and future federal, state and local laws, statutes, ordinances,
rules, regulations and the like, as well as common law, conditioning transfer
of property upon a negative declaration or other approval of a Governmental
Authority of the environmental condition of a property; or requiring
notification or disclosure of Releases of Hazardous Substances or other
environmental conditions of a property to any Governmental Authority or other
Person, whether or not in connection with transfer of title to or interest in
property.

 

“Environmental Reports” means “Phase I Environmental Site
Assessments” as referred to in the ASTM Standards on Environmental Site
Assessments for Commercial Real Estate, E 1527-05 (and, if necessary, “Phase
II Environmental Site Assessments”), prepared by an independent environmental
auditor reasonably approved by Lender and delivered to Lender and any
amendments or supplements thereto delivered to Lender or Mortgage Lender, and
shall also include any other environmental reports delivered to Lender pursuant
to this Agreement, the Mortgage Loan Documents and the Environmental
Indemnities.

 

“ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated thereunder.

 

“ERISA Affiliate,” at any time, means each trade or business
(whether or not incorporated) that would, at the time, be treated together with
Borrower or any Property Owner as a single employer under Title IV or Section 302
of ERISA or Section 412 of the Code.

 

“ERISA Event” means (i) the occurrence of a “reportable
event” described in Section 4043 of ERISA (other than a “reportable event”
not subject to the provisions for 30-day notice to the PBGC) or (ii) the
provision or filing of a notice of intent to terminate a Plan other than in a
standard termination within the meaning of Section 4041 of ERISA or the
treatment of a Plan amendment as a distress termination under Section 4041
of ERISA, or (iii) the institution of proceedings to terminate a Plan by
the PBGC, or (iv) the existence of any “accumulated funding deficiency” or
“liquidity shortfall” (within the meaning of Section 302 of ERISA or Section 412
of the Code), whether or not waived, or (v) the occurrence or existence of
any other event or condition which might reasonably be expected to constitute
grounds for the termination of, or the appointment of a trustee to administer,
any Plan other than in a standard termination within the meaning of Section 4041
of ERISA or the imposition of any lien on the assets of Borrower under ERISA,
including as a result of the operation of Section 4069 of ERISA.

 

“Event of Default” has the meaning set forth in
Section 7.1.

 

“Exception Report” means the report prepared by Borrower and
attached to this Agreement as Schedule B, setting forth any exceptions
to the representations set forth in Article IV.

 

“Excess Transfer Proceeds” means Net Proceeds arising from the
Transfer of a Property to the extent such Net Proceeds exceed the applicable
Release Price.

 

“Existing Debt Intercreditor Agreements” means the intercreditor
agreements listed on Schedule W hereto.

 

10

 

“Extension Interest Rate Cap Agreement” means an interest rate
cap confirmation between an Acceptable Counterparty and Borrower, relating to
the Extension Term, which is, at all times, in substantially the form of Exhibit C
(together with an interest rate cap agreement and schedules relating thereto,
which are consistent in form and substance with the terms set forth in such
confirmation).

 

“Extension Term” has the meaning set forth in Section 1.2(b).

 

“Fiscal Quarter” means the three-month period ending on March 31,
June 30, September 30 and December 31 of each year, or such
other fiscal quarter of Borrower as Borrower may select from time to time with
the prior consent of Lender, such consent not to be unreasonably withheld.

 

“Fiscal Year” means the 12-month period ending on December 31
of each year, or such other fiscal year of Borrower as Borrower may select from
time to time with the prior consent of Lender, not to be unreasonably withheld.

 

“Fitch” means Fitch, Inc. and its successors.

 

“Force Majeure” means a delay due to acts of God, governmental
restrictions, stays, judgments, orders, decrees, enemy actions, civil
commotion, fire, casualty, strikes, work stoppage, shortages of labor or
materials or similar causes beyond the reasonable control of Borrower; provided
that, with respect to any of such circumstances, for the purposes of this
Agreement, (1) any period of Force Majeure shall apply only to performance
of the obligations necessarily affected by such circumstance and shall continue
only so long as Borrower is continuously and diligently using all reasonable
efforts to minimize the effect and duration thereof; and (2) Force Majeure
shall not include the unavailability or insufficiency of funds.

 

“Form W-8BEN” means Form W-8BEN (Certificate of Foreign
Status of Beneficial Owner for United States Tax Withholding) of the Department
of Treasury of the United States of America, and any successor form.

 

“Form W-8ECI” means Form W-8ECI (Certificate of
Foreign Person’s Claim for Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of America, and
any successor form.

 

“GAAP” means generally accepted accounting principles in the United
States of America, consistently applied, or such other method of accounting
used by Borrower for books and records which is reasonably acceptable to
Lender.

 

“Governmental Authority” means any federal, state, county,
regional, local or municipal government, any bureau, department, agency or
political subdivision thereof and any Person with jurisdiction exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government (including any court).

 

“Ground Lease” means, with respect to each Property, any ground
lease (but not a space lease) encumbering such Property or otherwise creating
the interest of Borrower or its 

 

11

 

applicable Affiliate therein, which ground leases are more fully
described on Schedule V, as such ground lease may be modified or
replaced from time to time in accordance herewith.

 

“Ground Leased Parcel” means, with respect to each Property, any
portion of such Property with respect to which Borrower or its applicable
Affiliate is the lessee under a Ground Lease.

 

“Ground Rent” means rent payable pursuant to a Ground Lease, if
any.

 

“Guaranty” means that certain guaranty, dated as of the Closing
Date, executed by Sponsor for the benefit of Lender.

 

“Hazardous Substances” means any and all substances (whether
solid, liquid or gas) defined, listed, or otherwise classified as pollutants,
hazardous wastes, hazardous substances, hazardous materials, extremely
hazardous wastes, toxic substances, toxic pollutants, contaminants, pollutants
or words of similar meaning or regulatory effect under any present or future
Environmental Laws or that may have a negative impact on human health or the
environment or the presence of which on, in or under any of the Properties is
prohibited under Environmental Law, including petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, lead and
radon, and compounds containing them (including gasoline, diesel fuel, oil and lead-based
paint), and radioactive materials, flammables and explosives and compounds
containing them, but excluding substances of kinds and in amounts which may
ordinarily and customarily be used or stored in bank branch or office
properties (as the case may be) of the same quality as the Property as of the
date hereof for the purposes of cleaning or other maintenance or operations or
otherwise ordinarily found in bank branch or office properties (as the case may
be) of the same quality as the Property as of the date hereof and otherwise in
compliance in all material respects with all Environmental Laws.

 

“Increased
Costs” has the meaning set forth in Section 1.6.

 

“Indebtedness” means the Principal Indebtedness, together with
interest and all other obligations and liabilities of Borrower under the Loan
Documents, including all transaction costs and other amounts due or to become
due to Lender pursuant to this Agreement, under the Notes or in accordance with
any of the other Loan Documents, and all other amounts, sums and expenses
reimbursable by Borrower to Lender hereunder or pursuant to the Notes or any of
the other Loan Documents.

 

“Indemnified Liabilities” has the meaning set forth in Section 9.19(b).

 

“Indemnified Parties” has the meaning set forth in Section 5.18.

 

“Independent Director” of any corporation or limited liability
company means an individual who is duly admitted as an independent member of
Borrower or appointed as a member of the board of directors, board of managers
or other governing body of such corporation or limited liability company or, in
the case of a limited liability company, is a member of such limited liability
company and who is not, and has never been, and will not while serving as
Independent Director, be any of the following:

 

12

 

(i)            a partner, equityholder, manager,
director, officer or employee of Borrower, any Single-Purpose Equityholder, any
Property Owner or any of their respective equityholders or Affiliates (other
than as an independent member, director or manager of an Affiliate of Borrower,
any Property Owner or any Single-Purpose Equityholder that is not in the direct
chain of ownership of Borrower and that is required by a creditor to be a
single purpose bankruptcy remote entity, provided that such independent
director or manager is employed by a company that routinely provides
professional independent directors or managers);

 

 (ii)          a
creditor, supplier or service provider (including provider of professional
services) to Borrower, any Property Owner, any Single-Purpose Equityholder or
any of their respective equityholders or Affiliates (other than a company that
routinely provides professional independent managers or directors and which
also provides lien search and other similar services to Borrower, any Property
Owner  any Single-Purpose Equityholder or
any of their respective equityholders or Affiliates in the ordinary course of
business);

 

(iii)          a family member of any such member,
partner, equityholder, manager, director, officer, employee, creditor, supplier
or service provider; or

 

(iv)          a Person that controls (whether
directly, indirectly or otherwise) any of (i), (ii) or (iii) above.

 

“Initial Interest Rate Cap Agreement” means an interest rate cap
confirmation between an Acceptable Counterparty and Borrower, relating to the
initial term of the Loan, which is, at all times, in substantially the form of Exhibit C
(together with an interest rate cap agreement and schedules relating thereto,
which are consistent in form and substance with the terms set forth in such
confirmation), as amended to reflect the reallocation of principal between the
Loan and the Junior Mezzanine Loan.

 

“Insurance Requirements” means, collectively, (i) all
material terms of any insurance policy required pursuant to this Agreement and (ii) all
material regulations and then-current standards applicable to or affecting any
of the Properties or any portion thereof or any use or condition thereof, which
may, at any time, be recommended by the board of fire underwriters, if any,
having jurisdiction over any of the Properties, or any other body exercising
similar functions.

 

“Intercreditor
Reallocation Expenses means  the reasonable fees and expenses incurred
by Lender in connection with amending the Existing Debt Intercreditor
Agreements to reflect the bifurcation of the Original Mezzanine Loan and the
creation of the Junior Mezzanine Loan, which reasonable fees and expenses shall
be limited to Lender’s reasonable out-of-pocket legal expenses together with
(but without duplication) (1) in the case of each of the Existing Debt
Intercreditor Agreements, except for the PB Capital Intercreditor, the fees and
expenses set forth in Section 29 of such Existing Debt Intercreditor
Agreements and (2) in the case of the PB Capital Intercreditor, such
reasonable, out-of-pocket expenses as may be imposed on Lender by the senior
lenders under the PB Capital Intercreditor in connection with any such
amendment.

 

13

 

“Interest Accrual
Period” means, with respect to any
specified Payment Date, the period from and including the 15th day of the
calendar month preceding such specified Payment Date to but excluding the 15th
day of the calendar month containing such specified Payment Date; provided
that, prior to a Securitization, Lender shall have the right, in connection
with a change in the Payment Date in accordance with the definition thereof, to
make a corresponding change to the Interest Accrual Period provided same has no
adverse effect on Borrower in more than a de minimis extent.  Notwithstanding the foregoing, the first
Interest Accrual Period shall commence on and include the Closing Date.

 

“Interest Determination Date” means, in connection with the
calculation of interest accrued for any Interest Accrual Period, the second
Business Day preceding the first day of such Interest Accrual Period.

 

“Interest Rate Cap Agreements” means collectively, the Initial
Interest Rate Cap Agreement and any Extension Interest Rate Cap Agreements.

 

“Joint Venture Cash Flow” has the meaning set forth in Section 3.5(b).

 

“Joint Venture Owner” means each joint venture that directly or
indirectly owns a Joint Venture Property.

 

“Joint Venture Property” means, individually or collectively, as
the context may require, each Property subject, directly or indirectly, to
a  Qualified Joint Venture Agreement as
listed on Schedule P, as modified from time to time to reflect any
Transfer permitted pursuant to Section 6.3(b) or Section 2.2
and any additional joint venture permitted hereunder (including pursuant to Section 2.3).

 

“Junior Mezzanine Borrower” means GKK Stars Junior Mezz 2 LLC, a
Delaware limited liability company.

 

“Junior Mezzanine Lender” means the holders from time to time of
the Junior Mezzanine Loan, and their respective successors and/or assigns.

 

“Junior Mezzanine Loan” means that certain mezzanine loan made
by Junior Mezzanine Lender to Junior Mezzanine Borrower as evidenced by the
Junior Mezzanine Loan Documents.  If the
Junior Mezzanine Loan is hereafter bifurcated into multiple loans, then all
references to the Junior Mezzanine Loan herein shall be deemed to refer to all
such loans in the aggregate.

 

“Junior Mezzanine Loan Agreement” means that certain Junior
Mezzanine Loan Agreement, dated as of the Effective Date, by and among Junior
Mezzanine Borrower and Junior Mezzanine Lender.

 

“Junior Mezzanine Loan Amount” means $99,410,498.78.

 

“Junior Mezzanine Loan Documents” means the “Loan Documents”, as
defined in the Junior Mezzanine Loan Agreement.

 

14

 

 “Junior Mezzanine Loan Event
of Default” means the occurrence of any one or more events that would
constitute an “Event of Default” under and as defined in any of the Junior
Mezzanine Loan Documents, with respect to which Lender shall have received
written notice from Borrower or the Junior Mezzanine Lender.

 

“Junior Mezzanine Loan Principal Indebtedness” means the “Principal
Indebtedness” as defined in the Junior Mezzanine Loan Agreement.

 

“Lease” means any lease, license, letting, concession, occupancy
agreement, sublease to which Borrower is a party or has a consent right, or
other agreement (whether written or oral and whether now or hereafter in
effect) under which Borrower or a Property Owner is a lessor, existing as of
the Closing Date or hereafter entered into by Borrower or Property Owner, in
each case pursuant to which any Person is granted a possessory interest in, or
right to use or occupy all or any portion of any space in any of the
Properties, and every modification or amendment thereof, and every guarantee of
the performance and observance of the covenants, conditions and agreements to
be performed and observed by the other party thereto.

 

“Lease Term Sheet”
has the meaning set forth in Section 5.7(b).

 

“Leasing Commissions” means leasing commissions required to be
paid by Borrower or its Affiliates in connection with the leasing of space to
Tenants at any of the Properties pursuant to Leases either in effect on the
date hereof or entered into by Borrower or its Affiliates in accordance
herewith and payable in accordance with third-party/arm’s-length brokerage
agreements, provided that the commissions payable pursuant thereto are
commercially reasonable based upon the then current brokerage market for
property of a similar type and quality to such Property in the geographic
market in which such Property is located.

 

“Legal Requirements” means all governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities (including Environmental Laws)
affecting Borrower, any Property Owner, the Collateral or any of the Properties
or any portion of or the construction, ownership, use, alteration or operation
of, or any portion of any Property (whether now or hereafter enacted and in
force), and all permits, licenses and authorizations and regulations relating
thereto.

 

“Lender” has the meaning set forth in the first paragraph of
this Agreement and in Section 9.7.

 

“Letter of
Credit” shall mean an irrevocable, unconditional, freely transferable,
clean sight draft evergreen letter of credit in favor of Lender, with respect
to which Borrower has no reimbursement obligation, entitling Lender to draw
thereon in New York, New York, issued by a domestic Eligible Institution or the
U.S. agency or branch of a foreign Eligible Institution.

 

“LIBOR”
means the rate per annum calculated as set forth below:

 

(i)            On each Interest Determination Date,
LIBOR for the applicable period will be the rate for deposits in United States
dollars for a one-month period which appears as the London interbank offered
rate on the display designated as “LIBOR01” on the Reuters Screen (or such other page as may replace that page on
that service, or such 

 

15

 

page or
replacement therefor on any successor service) as the London
interbank offered rate as of 11:00 a.m., London time, on such date.

 

(ii)           With respect to an Interest
Determination Date on which no such rate appears as the London interbank
offered rate on “LIBOR01” on the Reuters Screen (or such other page as may replace that page on that service,
or such page or replacement therefor on any successor service) as
described above, LIBOR for the applicable period will be determined on the
basis of the rates at which deposits in United States dollars are offered by
the Reference Banks at approximately 11:00 a.m., London time, on such date
to prime banks in the London interbank market for a one-month period (each a “Reference
Bank Rate”).  Lender shall request
the principal London office of each of the Reference Banks to provide a
quotation of its Reference Bank Rate.  If
at least two such quotations are provided, LIBOR for such period will be the
arithmetic mean of such quotations.  If
fewer than two quotations are provided, LIBOR for such period will be the
arithmetic mean of the rates quoted by major banks in New York City, selected
by Lender, at approximately 11:00 a.m., New York City time, on such date
for loans in United States dollars to leading European banks for a one-month
period.

 

(iii)          If, on any Interest Determination
Date, Lender is required but unable to determine LIBOR in the manner provided
in paragraphs (i) and (ii) above, LIBOR for the applicable period
shall be LIBOR as determined on the previous Interest Determination Date.

 

All
percentages resulting from any calculations or determinations referred to in
this definition will be rounded upwards to the nearest multiple of 1/100 of 1%
and all U.S. dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent or more being rounded upwards).

 

“LIBOR Strike Rate” means (1) with respect
to the Initial Interest Rate Cap Agreement, 5.25%; and (2) with respect to
any Extension Interest Rate Cap Agreement, the lesser of (x) 6% and (y) the
interest rate that would result in a DSCR of 1.0x as of the first day of the
Extension Term.

 

“Lien” means any mortgage, lien (statutory or other), pledge,
hypothecation, assignment, preference, priority, security interest, or any
other encumbrance or charge on or affecting any Collateral or any portion
thereof, or any Encumbered Property, or any interest therein (including any
conditional sale or other title retention agreement, any sale-leaseback, any
financing lease or similar transaction having substantially the same economic
effect as any of the foregoing, the filing of any financing statement or
similar instrument under the Uniform Commercial Code or comparable law of any other
jurisdiction, domestic or foreign, and mechanics’, materialmen’s and other
similar liens and encumbrances, as well as any option to purchase, right of
first refusal, right of first offer or similar right).

 

“Loan” has the meaning set forth in Section 1.1.

 

“Loan Amount” means $500,000,000.

 

16

 

“Loan Documents” means this Agreement, each of the Notes, the
Assignment of Interest Rate Cap Agreement, each of the Environmental
Indemnities, each of the Subordination of Property Management Agreements, the
Cash Management Agreement, the Pledge Agreement, the Upper Tier Pledge, any
Blocked Account Agreement, the Cooperation Agreement, the Guaranty, any Letter
of Credit and all other agreements, instruments, certificates and documents
necessary to effectuate the granting to Lender of first-priority Liens on the
Collateral or otherwise in satisfaction of the requirements of this Agreement
or the other documents listed above, as all of the aforesaid may be modified or
replaced from time to time in accordance herewith.

 

“Loan Multiplier” means (i) for the period beginning on the
Closing Date and ending on the Effective Date, 5/6 (83.33 %) and (ii) from
and after the Effective Date, 83.43%.

 

“Loss
Proceeds” means amounts, awards or payments payable to Borrower or its
Affiliates, any Property Owner, Mortgage Lender or Lender in respect of all or
any portion of any of the Properties in connection with a Casualty or
Condemnation thereof (after the deduction therefrom and payment to Borrower or
its Affiliates, any Property Owner, Mortgage Lender and Lender, respectively,
of any and all reasonable expenses incurred by Borrower or its Affiliates and
Lender in the recovery thereof, including all attorneys’ fees and
disbursements, the fees of insurance experts and adjusters and the costs
incurred in any litigation or arbitration with respect to such Casualty or
Condemnation).

 

“Loss Proceeds Account” has the meaning set
forth in Section 3.3(a).

 

“Major Lease” means the Lease covering the Dana Portfolio on the
date hereof, as amended or modified in accordance herewith, and any Lease which
(i) when aggregated with all other Leases at the applicable Property with
the same Tenant (or affiliated Tenants), and assuming the exercise of all
expansion rights and all preferential rights to lease additional space
contained in each such Lease, is expected to contribute more than 7.5% of Net
Operating Income during any 12-month period (after adjustment to eliminate the
effect of free rent periods), (ii) is with an Affiliate of Borrower or a
Property Owner as Tenant, or (iii) is entered into during the continuance
of an Event of Default.

 

“Material Adverse Effect” means a material adverse effect upon (i) the
ability of Borrower or any Property Owner to perform, or of Lender or Mortgage
Lender to enforce, any material provision of any Loan Document or any
Encumbered Debt Document, as the case may be, (ii) the enforceability of
any material provision of any Loan Document, or (iii) the value, Net Operating
Income, use or enjoyment of any of the Properties or the operation thereof.

 

“Material Agreements” means (x) each contract and agreement
(other than the Leases, the Ground Leases, the Approved Management Agreement,
the Encumbered Property Debt Documents, brokerage and leasing agreements
negotiated at arm’s length and the Loan Documents) relating to a Property, or
otherwise imposing obligations on Borrower or any Property Owner, under which
Borrower or any Property Owner would have the obligation to pay more than
$1,000,000 per annum and which cannot be terminated by Borrower or any Property
Owner without cause upon 90 days’ notice or less without payment of a
termination fee or, in any case, with respect to any covenant contained herein
(but not with respect to any 

 

17

 

representation), imposing obligations on Borrower or any Property Owner
under which it would have the obligation to pay more than $5,000,000 per annum,
regardless of Borrower’s or any Property Owner’s right to terminate same, or
which is with an Affiliate of Borrower or any Property Owner, and (y) to
the extent the existence, breach or termination of same might have a Portfolio
Material Adverse Effect, any reciprocal easement agreement, declaration of
covenants, material parking agreement, condominium documents, or other material
Permitted Encumbrance.

 

“Material Alteration” means any Alteration to be performed by or
on behalf of Borrower or any Property Owner at any of the Properties which (a) is
reasonably likely to have a Material Adverse Effect with respect to the
applicable Property, (b) when aggregated with all contemporaneous
Alterations at the Properties is reasonably expected to cost in excess of
$20,000,000, or (c) is reasonably expected to permit (or is reasonably
likely to induce) any Tenant under a material Lease to terminate its Lease or
abate rent.

 

“Maturity Date” means the maturity date of the Loan as set forth
in Section 1.2.

 

“Merger” means the transactions contemplated by the Merger
Agreement.

 

“Merger Agreement” means that certain Agreement and Plan of
Merger, dated as of November 2, 2007, among Sponsor, GKK Capital LP, AFRT
Owner, and the other parties thereto, with only such modifications thereto as
have been agreed in writing by Lender.

 

“Minimum Balance” has the meaning set forth in Section 3.2(a).

 

“Moody’s” means Moody’s Investors Service, Inc.
and its successors.

 

“Mortgage” means, with respect to each Mortgage Loan Collateral
Property, that certain mortgage, deed of trust or deed to secure debt, as the
case may be, encumbering such Mortgage Loan Property, executed by Mortgage Loan
Property Owner as of the Closing Date, as the same may from time to time be
modified or replaced in accordance herewith.

 

“Mortgage Lender” means, collectively, Goldman Sachs Mortgage
Company (as successor in interest to Goldman Sachs Commercial Mortgage Capital,
L.P.), Citicorp North America, Inc., SL Green Realty Corp. and their
respective successors and assigns.

 

“Mortgage Loan” means that certain Loan in the original
principal amount of $250,000,000 from Mortgage Lender to Mortgage Loan Property
Owner.

 

“Mortgage Loan Agreement” means that certain Loan Agreement,
dated as of the date hereof, between Mortgage Lender and the Mortgage Loan Property
Owners, as same may be amended or modified from time to time with the consent
of Lender.

 

“Mortgage Loan Cash Management Account” means the “Cash
Management Account” under and as defined in the Mortgage Loan Agreement.

 

“Mortgage Loan Principal Indebtedness” means, from time to time,
the outstanding principal balance of the Mortgage Loan.

 

18

 

“Mortgage Loan Collateral Properties” means the real property
described on Schedule A-1, together with all buildings and other
improvements thereon, as modified from time to time to reflect any Transfer
permitted pursuant to Section 2.2.

 

“Mortgage Loan Event of Default” means an “Event of Default”
under and as defined in the Mortgage Loan Agreement.

 

“Mortgage Loan Property Owner” means each borrower under the
Mortgage Loan.

 

“Mortgage Loan Property Owner Equity” means 100% of the direct
equity interests in each Mortgage Loan Property Owner as set forth in the
Pledge Agreement, as modified from time to time to reflect any Transfer
permitted pursuant hereto.

 

“Mortgage Loan Property Owner Pledgor” means, individually or
collectively, as the context may require, each owner of Mortgage Loan Property
Owner Equity, as set forth on Schedule I, as modified from time to time
to reflect any Transfer permitted pursuant hereto.

 

“Net Lease” means each of the Leases listed on Schedule N.

 

“Net Operating Income” means, with
respect to any Test Period, the excess of (i) Operating Income for such
Test Period, minus (ii) Operating Expenses for such Test Period.

 

“Net Proceeds” means, in connection with the sale or disposition
to an unaffiliated third party in an arms’-length transaction, 100% of the
proceeds of such sale or disposition, net of any repayment of any Encumbered
Property Debt (including any prepayment or release premiums) that is required
to be and actually is repaid in connection therewith, and ordinary and
customary closing costs payable to unaffiliated third parties, limited in the
case of Joint Venture Properties and any joint venture entered into in
connection with the Transfer of any portion of the Value Add Pool Equity
pursuant to Section 2.3 to the portion of such net proceeds payable
to Borrower or its Affiliates pursuant to the applicable Qualified Joint
Venture Agreement in effect on the date hereof or as hereafter amended with
Lender’s reasonable consent (Borrower agreeing that it shall be reasonable for
Lender to withhold its consent in connection with any amendment that would
result in a reduction of Borrower’s percentage interest in (except in
connection with a Transfer permitted hereunder), or control rights over, any
Joint Venture Property or otherwise result in a Material Adverse Effect).

 

“New Borrower Entity” means a Single Purpose Entity 100% of the
equity interests in which are directly or indirectly owned by Sponsor and 100%
of the direct equity interests in which are pledged to Lender in a manner
reasonably satisfactory to Lender (including the delivery, at Borrower’s
expense, of UCC insurance with respect to such pledge), which Single Purpose
Entity: (i) shall have executed and delivered to Lender an assumption
agreement, in form and substance reasonably acceptable to Lender, evidencing
its agreement to abide and be bound by the terms of the Loan Documents and
containing representations substantially equivalent to those contained in Article IV,
and such other representations (and evidence of the accuracy of such
representations) as the Lender shall reasonably request; (ii) shall have
delivered such Uniform Commercial Code financing statements as may be
reasonably requested by 

 

19

 

Lender; (iii) if requested by Lender, shall have delivered to
Lender legal opinions of counsel reasonably acceptable to Lender which are
equivalent to the opinions delivered to Lender on the Closing Date, including
new enforceability, authorization and nonconsolidation opinions which are
reasonably satisfactory to Lender and satisfactory to each of the Rating
Agencies; and (iv) shall have delivered to Lender all documents reasonably
requested by it relating to the existence of such New Borrower Entity and the
due authorization of such New Borrower Entity to assume the Loan and to execute
and deliver any related documents, each in form and substance reasonably
satisfactory to Lender.

 

“Nonconsolidation Opinion” means, collectively, the opinion
letter dated the Closing Date, and the opinion letter, dated the Effective
Date, in each case delivered by Borrower’s counsel to Lender and addressing
issues relating to substantive consolidation in bankruptcy.

 

“Normalized Capital Expenditures” means anticipated annual
Capital Expenditures at the Properties, as reasonably determined by Lender,
based on historical Capital Expenditures at the Properties during the initial
term of the Loan (taking into account any amounts actually reimbursed in
respect of Capital Expenditures under Leases).

 

“Note” means, collectively, the promissory notes from time to
time issued hereunder, as such notes may be consolidated, replaced by multiple
Notes or divided into multiple Note Components in accordance with Section 1.3(c) and
as otherwise modified, assigned (in whole or in part) and/or replaced from time
to time in accordance herewith.

 

“Note Component” has the meaning set forth in Section 1.3(c).

 

“OFAC List” means 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 any other similar list
maintained by the U.S. Treasury Department, Office of Foreign Assets Control
pursuant to any applicable governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities, including, without limitation, trade embargo, economic sanctions,
or other prohibitions imposed by Executive Order of the President of the United
States.  The OFAC List currently is
accessible through the internet website at www.treas.gov/ofac/t11sdn.pdf.

 

“Officer’s Certificate” means a certificate delivered to Lender
which is signed by an authorized officer of Borrower and certifies the
information therein to such officer’s knowledge.

 

“Operating Expenses” means, for any period, all
operating, renting, administrative, management, legal and other ordinary
expenses of Borrower and, without duplication, Property Owners, during such
period (other than those relating to the Disposition Assets and each other
Property whose Release Price is zero), determined in accordance with GAAP; provided,
however, that such expenses shall not include (i) depreciation,
amortization or other noncash items (other than expenses that are due and
payable but not yet paid), (ii) interest, principal or any other sums due
and owing with respect to the Loan, (iii) income taxes or other taxes in
the nature of income taxes, (iv) Capital Expenditures, or (v) equity
distributions.

 

20

 

“Operating Income” means, for any period, all operating income
of Borrower and, without duplication, Property Owners, from each of the
Properties (other than the Disposition Assets and each other Property whose
Release Price or Aggregate Allocated Loan Amount is zero) during such period,
determined in accordance with GAAP (but without straight-lining of rents),
other than (i) Loss Proceeds (but Operating Income will include rental
loss insurance proceeds to the extent allocable to such period), (ii) any
revenue attributable to a Lease to the extent it is paid more than 30 days prior
to the due date, (iii) any interest income from any source, (iv) any
repayments received from any third party of principal loaned or advanced to
such third party by Borrower, (v) any proceeds resulting from the Transfer
of all or any portion of such Property, (vi) sales, use and occupancy or
other taxes on receipts required to be accounted for by Borrower to any
government or governmental agency, (vii) termination fees, and (viii) any
other extraordinary or non-recurring items.

 

“Original Mezzanine Loan” has the meaning set forth in the
recitals hereto.

 

“Other Ground Lease Collateral” means the equity interests in
the Persons listed on Schedule M in the percentages set forth thereon,
as modified from time to time to reflect any Transfer permitted hereunder.

 

“Other Equity Pledgor” means, individually or collectively, as
the context may require, each owner of Other Ground Lease Collateral as set
forth on Schedule M.

 

“Other Properties” means, collectively, each
Property that is not a Mortgage Loan Collateral Property.

 

“Par
Prepayment Date” means the first Payment Date following the 6-month
anniversary of the Closing Date.

 

“Parcel
Release Price” has the meaning
set forth in Exhibit I.

 

“Participation” has the meaning set forth in Section 9.7(b).

 

“Payment Date” means the 9th day of each month (or,
if such 9th day is not a Business Day, the first preceding Business
Day); provided, that, prior to a Securitization, Lender shall have the
right to change the Payment Date so long as a corresponding change to the
Interest Accrual Period is also made and same has no adverse effect on Borrower
in more than a de minimis extent. 
Notwithstanding the foregoing, the Maturity Date shall be the second to
last Business Day of the Interest Accrual Period in which the Maturity Date
falls.

 

“Permits” means all licenses, permits, variances and
certificates used in connection with the ownership, operation, use or occupancy
of each of the Properties (including certificates of occupancy, business
licenses, state health department licenses, licenses to conduct business and
all such other permits, licenses and rights, obtained from any Governmental
Authority or private Person concerning ownership, operation, use or occupancy
of such Property).

 

21

 

“Permitted Affiliate Sale” means the sale of a Property to an
Affiliate of Borrower that is not itself a Borrower, which Affiliate’s immediate
intention is to materially redevelop such Property as evidenced by an Officer’s
Certificate submitted to Lender describing such redevelopment in reasonable
detail; provided, however, no such sale shall be a “Permitted
Affiliate Sale” if, after giving effect thereto, the sum of the Allocated Loan
Amounts of all Properties subject to Permitted Affiliate Sales from and after
the Closing Date would exceed $25,000,000.

 

“Permitted Debt” means:

 

(i)            the Indebtedness;

 

(ii)           Trade Payables not represented by a
note, customarily paid by Borrower within 60 days of incurrence and in fact not
more than 60 days outstanding, which are incurred in the ordinary course of
Borrower’s ownership and operation of the Properties, in amounts reasonable and
customary for similar Properties and not exceeding 2.0% of the sum of the Loan
Amount and the Junior Mezzanine Loan Amount in the aggregate;

 

(iii)          the Encumbered Property Debt, to the
extent that there is no increase in the principal amount thereof from the
principal balance as of the date hereof (after giving effect to any prepayments
made on the date hereof) or any material amendment to any Encumbered Property
Debt Document without Lender’s prior written consent;

 

(iv)          refinancings of Encumbered Property
Debt on terms not materially more onerous (including as to interest rate,
transfer restrictions, amortization, prepayment provisions and cash trap
provisions) as the Encumbered Property Debt being refinanced, provided
that, in the case of each such refinancing, (x) the applicable Encumbered
Property Lender enter into an intercreditor agreement with Lender in form and
substance reasonably satisfactory to Lender (the Form of Intercreditor
Agreement attached hereto as Exhibit F is hereby deemed to be
reasonably satisfactory to Lender), (y) Lender is granted a perfected
first-priority pledge of 100% of the equity interests in the entity owning the
Encumbered Property securing the Encumbered Property Debt being so refinanced,
and (z) if any such refinancing is in a principal amount greater than the
Encumbered Property Debt being refinanced, then an amount equal to the product
of the Loan Multiplier times 100% of the increase (without reduction for
transaction, prepayment, defeasance or other expenses) is applied toward
prepayment of the Loan in accordance with Section 2.1 hereof;

 

(v)           the Mortgage Loan; and

 

(vi)          the Junior Mezzanine Loan.

 

“Permitted Encumbrances” means:

 

(i)            the Liens created by the Loan
Documents and the Encumbered Property Debt Documents;

 

22

 

(ii)           all Liens and other matters
specifically disclosed on Schedule B of the Qualified Title Insurance Policy;

 

(iii)          Liens, if any, for Taxes not yet
delinquent;

 

(iv)          mechanics’,
materialmen’s or similar Liens, if any, and Liens for delinquent taxes or
impositions, in each case only if being contested in good faith and by
appropriate proceedings, provided that no such Lien is in imminent
danger of foreclosure and provided  further that either (a) each
such Lien is released or discharged of record or fully insured over by the
title insurance company issuing the Qualified Title Insurance Policy within 60
days of its creation, or (b) Borrower deposits with Lender, by the
expiration of such 60-day period, an amount equal to 115% of the dollar amount
of such Lien or a bond in the aforementioned amount from such surety, and upon
such terms and conditions, as is reasonably satisfactory to Lender, as security
for the payment or release of such Lien (such 60-day period shall be extended
to 90 days with respect to any such Lien that is caused by a Tenant, provided
Borrower exercises commercially reasonable efforts during such 90-day period to
cause such Tenant to remove such Lien or provide the bond described above);

 

(v)           rights of existing Tenants under
Leases heretofore disclosed to Lender, and the rights of future Tenants and
subtenants as tenants only pursuant to written Leases entered into in
conformity with the provisions of this Agreement; and

 

(vi)          easements and other customary
encumbrances customarily encumbering like properties and entered into in the
ordinary course of business, to the extent such easements or encumbrances do
not result in a Material Adverse Effect.

 

“Permitted Investments” means the following, subject to the
qualifications hereinafter set forth:

 

(i)            obligations of, or
obligations guaranteed as to principal and interest by, the U.S. government or
any agency or instrumentality thereof, when such obligations are backed by the
full faith and credit of the United States of America;

 

(ii)           federal funds,
unsecured certificates of deposit, time deposits, banker’s acceptances, and repurchase
agreements having maturities of not more than 365 days of any bank, the
short-term debt obligations of which are rated A-1+ (or the equivalent) by each
of the Rating Agencies and, if it has a term in excess of three months, the
long-term debt obligations of which are rated AAA (or the equivalent) by each
of the Rating Agencies;

 

 (iii)         deposits that are fully insured by the Federal Deposit
Insurance Corp. (FDIC);

 

(iv)          debt obligations
that are rated AAA or higher (or the equivalent) by each of the Rating
Agencies;

 

23

 

(v)           commercial paper
rated A–1+ (or the equivalent) by each of the Rating Agencies;

 

(vi)          investment in money
market funds rated AAAm or AAAm–G (or the equivalent) by each of the Rating
Agencies; and

 

(vii)         such other
investments as to which Lender shall have received Rating Confirmation.

 

 

Notwithstanding
the foregoing, “Permitted Investments” (i) shall exclude any security with
the Standard & Poor’s “r” symbol (or any other Rating Agency’s
corresponding symbol) attached to the rating (indicating high volatility or
dramatic fluctuations in their expected returns because of market risk), as
well as any mortgage-backed securities and any security of the type commonly
known as “strips”; (ii) shall not have maturities in excess of one year; (iii) shall
be limited to those instruments that have a predetermined fixed dollar of
principal due at maturity that cannot vary or change; and (iv) shall
exclude any investment where the right to receive principal and interest
derived from the underlying investment provides a yield to maturity in excess
of 120% of the yield to maturity at par of such underlying investment.  Interest may either be fixed or variable, and
any variable interest must be tied to a single interest rate index plus a
single fixed spread (if any), and move proportionately with that index.  No investment shall be made which requires a
payment above par for an obligation if the obligation may be prepaid at the
option of the issuer thereof prior to its maturity.  All investments shall mature or be redeemable
upon the option of the holder thereof on or prior to the earlier of (x) three
months from the date of their purchase or (y) the Business Day preceding
the day before the date such amounts are required to be applied hereunder.

 

“Permitted TRS
Contribution Agreement” means a contribution agreement substantially in the
form of the contribution agreement attached as Exhibit H.

 

“Permitted TRS
Entity” means a Person that becomes a Mortgage Borrower under the Mortgage
Loan , fulfills the requirements of a “New Borrower Entity” under and as
defined in the Mortgage Loan Agreement and is formed solely for the purpose of
entering into one or more Permitted TRS Contribution Agreements and matters
directly relating thereto.

 

“Person” means any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated association
or Governmental Authority and any fiduciary acting in such capacity on behalf
of any of the foregoing.

 

“Plan” means any employee benefit plan (as defined in Section 3(3) of
ERISA) subject to Title IV or Section 302 of ERISA or Section 412 of
the Code.

 

“Plan Assets” means assets of any (i) employee benefit plan
(as defined in Section 3(3) of ERISA) subject to Title I of
ERISA or (ii) plan (as defined in Section 4975(e)(1) of the
Code) subject to Section 4975 of the Code.

 

“Pledge Agreement” means that certain Pledge and Security
Agreement, dated as of the date hereof, by the owners of the Required Equity
Pledgors for the benefit of Lender.

 

24

 

“Policies” has the meaning set forth in Section 5.15(b).

 

“Portfolio Material Adverse Effect” means a
material adverse effect upon (i) the ability of Borrower to perform, or of
Lender to enforce, any material provision of any Loan Document, (ii) the
enforceability of any material provision of any Loan Document, or (iii) the
value, Net Operating Income, use or enjoyment of the Properties or the
operation thereof, in each case, taken as a whole.

 

“Prepayment
Fee” shall mean, with respect to any prepayment received
by Lender prior to the Par Prepayment Date (other than with respect to a
prepayment pursuant to Section 2.1(c)(i), (ii) and (iii)),
any prepayment associated with the release of a Disposition Asset or any
release in connection with a Casualty or Condemnation pursuant to Section 5.16(d)),
an amount equal to 1.0% of the principal amount prepaid.

 

“Prime Rate” means the “prime rate” published in the “Money
Rates” section of The Wall Street Journal.  If The Wall Street Journal ceases to
publish the “prime rate,” then Lender shall select an equivalent publication
that publishes such “prime rate,” and if such “prime rate” is no longer
generally published or is limited, regulated or administered by a governmental
or quasi-governmental body, then Lender shall reasonably select a comparable
interest rate index.

 

“Principal Indebtedness” means the principal balance of the Loan
outstanding from time to time.

 

“Properties” means, collectively, all real property from time to
time owned or leased directly or indirectly by AFRT, including without
limitation the Encumbered Properties and the Mortgage Loan Collateral
Properties, together with all buildings and improvements thereon.  As used herein, “Property” means any of the
individual Properties.  Any reference
herein to a Transfer of a Property shall mean a Transfer of such Property or of
the direct or indirect equity interests therein (other than a Transfer of a direct
or indirect equity interest in Sponsor).

 

“Property Owner” means, individually or collectively, as the
context may require, each owner from time to time of a Property.  The current Property Owners are listed on Schedule
I.

 

“Qualified Joint Venture Agreement” means a (x) joint
venture agreement entered into prior to the date hereof and described in Schedule
K, (y) any joint venture agreement relating to a Value Add Pool
Property entered into pursuant to Section 2.3, and (z) a joint
venture agreement hereafter entered into pursuant to Section 6.3(b) that
(i) provides Lender with the right to force a sale or similar liquidation
of the assets of the joint venture following a foreclosure or transfer-in-lieu
of foreclosure on the equity interests pledged to Lender subject to customary
rights of first offer or appraisal sale or other similar rights reasonably
acceptable to Lender, (ii) provides to Borrower or its Affiliate (and,
after a foreclosure or transfer-in-lieu of foreclosure on the equity interests
pledged to Lender subject to customary rights of first offer, appraisal sale or
other similar rights reasonably acceptable to Lender, provides to Lender) the
right to control the joint venture, subject to customary major decisions, (iii) provides
that distributions of operating 

 

25

 

revenues, capital proceeds and all other income of the applicable
Properties, to the extent available for distribution, shall be made to the
equityholders in proportion to their respective equity interests, and (iv) is
otherwise acceptable to Lender in its reasonable discretion.

 

“Qualified Survey” means, with respect to each of the Mortgage
Loan Properties, current title surveys of such Mortgage Loan Property,
certified to Borrower, the title company issuing the Qualified Title Insurance
Policy and Lender and their respective successors and assigns, in form and
substance reasonably satisfactory to Lender.

 

 “Qualified Title Insurance
Policy” means (i) with respect to each of the Properties, (x) if
applicable, an ALTA extended coverage mortgagee’s title insurance policy in
form and substance reasonably satisfactory to Lender, together with such
endorsements as Lender shall reasonably request, and (y) an owner’s title
insurance policy in favor of the applicable Mortgage Loan Property Owner
(except that Borrower shall not be required to purchase new or updated owners’
policies) with a “Mezzanine Lender’s Financing Endorsement,” naming Lender as
an additional insured, in form and substance reasonably acceptable to Lender
(or in the alternative, a letter executed by the title company providing
substantially the same benefit to Lender), and (ii) with respect to the
equity pledged to Lender pursuant to the Loan Documents, a UCC insurance policy
insuring Lender’s first-priority security interest in 100% of the  equity pledged to Lender pursuant to the Loan
Documents, and otherwise in form and substance reasonably acceptable to Lender.

 

“Rating Agency”
shall mean, prior to the final Securitization of the Loan, each of S&P,
Moody’s and Fitch, or any other nationally-recognized statistical rating agency
which has been designated by Lender and, after the final Securitization of the
Loan, shall mean any of the foregoing that have rated and continue to rate any
of the Certificates.

 

“Rating Confirmation” means, with respect to any proposed
action, confirmation in writing from each of the Rating Agencies that such
action shall not result, in and of itself, in a downgrade, withdrawal or
qualification of any rating then assigned to any outstanding Certificates;
except that if any portion of the Loan shall not have been securitized pursuant
to a Securitization rated by the Rating Agencies, then “Rating Confirmation”
shall instead mean that the matter in question is subject to the prior written
approval of both (x) the applicable Rating Agencies (if and to the extent
that any portion of the Loan has been securitized pursuant to a Securitization
or series of Securitizations rated by such Rating Agencies), and (y) Lender
in its reasonable discretion (and Borrower agrees that it shall be reasonable
for Lender to withhold such approval, if such proposed action does not satisfy
Rating Agency criteria).  No Rating
Confirmation shall be regarded as having been received unless and until any
conditions imposed on its effectiveness by any Rating Agency shall have been
satisfied.

 

“Reference Banks”  means
four major banks in the London interbank market selected by Lender.

 

“Regulatory Change” means any change after the Closing Date in
federal, state or foreign laws or regulations or the adoption or the making,
after such date, of any interpretations, directives or requests applying to a
class of banks or companies controlling banks, including Lender, of or under
any federal, state or foreign laws or regulations (whether or not having the 

 

26

 

force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.

 

“Release” with respect to any Hazardous Substance means any
release, deposit, discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Substances into the indoor or outdoor
environment (including the movement of Hazardous Substances through ambient
air, soil, surface water, ground water, wetlands, land or subsurface strata) in
violation of Environmental Law.

 

“Release Parcel” has the meaning set forth Section 2.4.

 

“Release Price” has the meaning set forth in Exhibit I.

 

“Release Price Deficit” means has the meaning specified in Section 2.2(c).

 

“Rent Roll” has the meaning set forth in Section 4.14(a).

 

“Required Equity” means the equity pledged to Lender by Required
Equity Pledgors (or, in the case of First States Group, L.P. and its general
partner, the equity that is subject to the negative covenants contained herein)
pursuant to the Loan Documents.

 

“Required Equity Pledgor” means, individually or collectively,
as the context may require, AFRT Owner, each Value Add Pool Pledgor, each
Encumbered Property Pledgor, each Other Equity Pledgor and each Mortgage Loan
Property Owner Pledgor.

 

“Restricted Cash” means amounts released from collateral
accounts maintained pursuant and subject to Encumbered Debt Documents, except
for reserves for monthly expenses such as tax, insurance, capital expenditure
reserves funded monthly, but including reserves in the nature of deferred
maintenance, interest reserves, reserves for the purpose of credit enhancement
and excess cash reserves; provided that the foregoing shall not be required to
be remitted to Lender pursuant to the terms hereof at the time of a refinancing
of Encumbered Property Debt if, in connection with such refinancing, the same
shall be required to be maintained in a collateral account pursuant to the
amended or replacement Encumbered Debt Documents entered into in accordance
with the terms hereof.

 

“Revenues” means (i) to the extent attributable to any
Property, all rents, rent equivalents, moneys payable as damages pursuant to a
Lease or in lieu of rent or rent equivalents, royalties (including all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including security, utility and other deposits), accounts,
cash, issues, profits, charges for services rendered and other consideration of
whatever form or nature received by or paid to or for the account of or benefit
of Borrower from any and all sources including any obligations now existing or
hereafter arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of property or
rendering of services by Borrower and proceeds, if any, from business interruption
or other loss of income insurance; provided, however, that with
respect to any Encumbered Property, the foregoing shall not constitute “Revenues”
to the extent that it is subject to the Lien of an Encumbered Property Loan or
is required to be applied to an Encumbered Property 

 

27

 

pursuant to Encumbered Property Debt Documents, and (ii) all
amounts released from collateral accounts held by or on behalf of any
Encumbered Property Lender in connection with Encumbered Property Debt, to the
extent such amounts are not required to be applied to an Encumbered Property
pursuant to Encumbered Property Debt Documents. 
“Revenues” shall not include Loss Proceeds applied in accordance with Section 5.16
(other than the proceeds of rental interruption insurance), interest income
(other than interest on amounts contained in the Collateral Accounts), equity
contributions or other amounts to be funded by a member pursuant to Borrower’s
operating agreement and amounts which are received from the Collateral Accounts
in accordance herewith or are otherwise free of the Liens of the Loan Documents
pursuant to the terms hereof.

 

“S&P”
means Standard & Poor’s Ratings Services, a division of the
McGraw-Hill Companies, Inc., and its successors.

 

“Scaled
Allocated Loan Amount” means, with respect to each Property constituting
Senior Collateral, (i) the Aggregate Allocated Loan Amount of each such
Property, times (ii) the Scaling Factor of such Property, minus, after
such multiplication has been made, (iii) the portion of the applicable
Encumbered Property Debt allocated to such Property pursuant to the applicable
Encumbered Property Debt Documents.

 

“Scaling
Factor” means, with respect to each Property constituting Senior Collateral,
the percentage indicated in Schedule A-3.

 

“Securitization” means a transaction in which all or any portion
of the Loan is deposited into one or more trusts which issue Certificates to
investors, or a similar transaction.

 

“Senior Collateral” means all Collateral secured by a Mortgage
or a first-priority perfected pledge of equity that, in either case, would not
be subordinate (structurally or otherwise) to the Lien of a hypothetical
secured lender (such as a DIP lender) in a hypothetical bankruptcy of AFRT,
Operating Partnership or their respective subsidiaries, other than the Lien of
the Encumbered Property Debt as listed on Schedule O.

 

“Senior Collateral Value” means, with respect to each Property
not constituting Senior Collateral, zero; and with respect to each Property
constituting Senior Collateral, the product of (i) the Scaled Allocated
Loan Amount of such Property, times (ii) the applicable percentage of the
equity interest therein that is pledged pursuant to the Senior Mezzanine Lower
Tier Pledge (but in no event shall the Senior Collateral Value of any Property
be less than zero).

 

“Senior Mezzanine Lower Tier Pledge” means that certain Pledge
and Security Agreement (Lower Tier), dated as of April 1, 2008, by
Borrower for the benefit of Lender.

 

“Service” means the Internal Revenue Service or any successor
agency thereto.

 

“Servicer” means the entity or entities appointed by Lender from
time to time to serve as servicer and/or special servicer of the Loan.  If at any time no entity is so appointed, the
term “Servicer” shall be deemed to refer to Lender.

 

28

 

“Single Member LLC” means a limited liability company which
either (x) has only one member, or (y) has multiple members, none of
which is a Single-Purpose Equityholder.

 

“Single-Purpose Entity”
means a Person which (a) was formed solely for the purpose of acquiring
and holding (i) in the case of a Property Owner, an ownership interest in
its Property, (ii) in the case of a Required Equity Pledgor, an ownership
interest in its Required Equity or (iii) in the case of a Single-Purpose
Equityholder, an ownership interest in the Borrower, (b) does not engage
in any business unrelated to (i) in the case of a Property Owner, such
Property, (ii) in the case of a Required Equity Pledgor, such Required
Equity or (iii) in the case of a Single-Purpose Equityholder, its
ownership interest in the Borrower, (c) does not have any assets other
than those related to (i) in the case of a Property Owner, such Property, (ii) in
the case of a Required Equity Pledgor, such Required Equity or (iii) in
the case of a Single-Purpose Equityholder, its ownership interest in the
Borrower, (d) does not have any Debt other than, in the case of Borrower,
Permitted Debt, (e) maintains books, accounts, records, financial
statements, stationery, invoices and checks which are separate and apart from
those of any other Person (except that such Person’s financial position,
assets, results of operations and cash flows may be included in the
consolidated financial statements of an Affiliate of such Person in accordance
with GAAP, provided that any such consolidated financial statements
shall contain a note indicating that such Person and its Affiliates are
separate legal entities and maintain records, books of account separate and
apart from any other Person), (f) is subject to and complies with all of
the limitations on powers and separateness requirements set forth in the
organizational documentation of such Person as of the Closing Date, (g) 
holds itself out as being a Person separate and apart from each other Person
and not as a division or part of another Person, (h) conducts its business
in its own name (except for services rendered under a management agreement with
an Affiliate, so long as the manager, or equivalent thereof, under such
management agreement holds itself out as an agent of such Person), (i) exercises
reasonable efforts to correct any known misunderstanding actually known to it
regarding its separate identity, and maintains an arm’s-length relationship
with its Affiliates, (j) pays its own liabilities out of its own funds
(including the salaries of its own employees, if any) and reasonably allocates
any overhead that is shared with an Affiliate, including paying for shared
office space and services performed by any officer or employee of an Affiliate,
(k) maintains a sufficient number of employees in light of its
contemplated business operations, (l) conducts its business so that the
assumptions made with respect to it which are contained in the Nonconsolidation
Opinion shall at all times be true and correct in all material respects, (m) except
as contemplated by the Loan Documents, maintains its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any other Person, (n) observes all applicable corporate
entity-level formalities in all material respects, (o) except as
contemplated by the Loan Documents, does not commingle its assets with those of any other
Person and holds such assets in its own name, (p) except as
contemplated by the Loan Documents, except as set forth in the Encumbered Property Debt
Documents and the Loan Documents, does not assume, guarantee or become
obligated for the debts of any other Person, and does not hold out its credit
as being available to satisfy the obligations or securities of others, (q) does
not acquire obligations or securities of its shareholders, members or partners,
(r) except as contemplated by the Loan Documents, except in connection with the Loan, does
not pledge its assets for the benefit of any other Person and does not make any
loans or advances to any Person, (s) intends to maintain adequate capital
in light of its contemplated business operations, (t) has two Independent
Directors, or, in the case of a limited partnership, has a Single-Purpose 

 

29

 

Equityholder with two Independent Directors, (u) has by-laws or an
operating agreement, or, in the case of a limited partnership, has a
Single-Purpose Equityholder with by-laws or an operating agreement, which
provides that, for so long as the Loan is outstanding, such Person shall not
take or consent to any of the following actions except to the extent expressly
permitted in this Agreement and the other Loan Documents:

 

(i)            to the fullest
extent permitted by law, the dissolution, liquidation, consolidation, merger or
sale of all or substantially all of its assets (and, in the case of a
Single-Purpose Equityholder, the assets of the Borrower);

 

(ii)           the engagement by
such Person (and, in the case of a Single-Purpose Equityholder, the engagement
by the Borrower) in, (x) in the case of any Property Owner, any business
other than the acquisition, development, management, leasing, ownership,
maintenance and operation of its Property, and activities incidental thereto, (y) in
the case of any Required Equity Pledgor, any business other than the
acquisition and ownership of its Required Equity, and (iii) in the case of
a Single-Purpose Equityholder, activities incidental to the acquisition and
ownership of its interest in the Borrower;

 

(iii)          the filing, or
consent to the filing, of a bankruptcy or insolvency petition, any general
assignment for the benefit of creditors or the institution of any other
insolvency proceeding, or the seeking or consenting to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar
official in respect of such Person without the affirmative vote of all of its
Independent Directors (and, in the case of a Single-Purpose Equityholder, in
respect of the Borrower without the affirmative vote of both of such
Single-Purpose Equityholder’s Independent Directors); and

 

(iv)          any amendment or
modification of any provision of its (and, in the case of a Single-Purpose
Equityholder, the Borrower’s) organizational documents relating to
qualification as a “Single-Purpose Entity”,

 

and (v) if such entity is a Single Member LLC
that does not have an independent non-equity member, has organizational
documents which provide that upon the occurrence of any event (other than a
permitted equity transfer) that causes its sole member to cease to be a member
while the Loan is outstanding, at least one of its Independent Directors shall
automatically be admitted as the sole member of the Single Member LLC and shall
preserve and continue the existence of the Single Member LLC without
dissolution.

 

“Single-Purpose Equityholder” means a Single-Purpose Entity that
(x) is a limited liability company or corporation formed under the laws of
the State of Delaware, (y) owns at least a 0.5% direct equity interest in
Borrower, and (z) serves as the general partner or managing member of
Borrower.

 

“SNDA” has the meaning set forth in Section 5.7(f).

 

“Sponsor” means Gramercy Capital Corp., or any successors and
assigns thereof by merger, consolidation, amalgamation, reorganization,
acquisition of all or substantially all of 

 

30

 

the shares or other ownership interests in Sponsor, by transfer of all
or substantially all of Sponsor’s assets in a single transaction, or through a
similar transaction.

 

“Spread” means:

 

(i)            initially, 5.2%; and

 

(ii)           following the bifurcation of the Note
into multiple Note Components pursuant to Section 1.3(c), the
weighted average of the Component Spreads at the time of determination,
weighted on the basis of the corresponding Component Balances.

 

“Subordination of Property Management Agreement” means that
certain consent and agreement of manager and subordination of management
agreement executed by Borrower and the Approved Property Manager as of the
Closing Date, as the same may from time to time be modified or replaced in
accordance herewith.

 

“Taxes” means all real estate and personal property taxes,
assessments, fees, taxes on rents or rentals, water rates or sewer rents,
facilities and other governmental, municipal and utility district charges or
other similar taxes or assessments now or hereafter levied or assessed or
imposed against the Properties or Borrower with respect to the Properties or
rents therefrom or which may become Liens upon any of the Properties, without
deduction for any amounts reimbursable to Borrower by third parties.

 

“Tenant” means any Person liable by contract or otherwise to pay
monies (including a percentage of gross income, revenue or profits) pursuant to
a Lease.

 

“Tenant Improvements” means, collectively, (i) tenant
improvements to be undertaken for any Tenant which are required to be completed
by or on behalf of Borrower or any Property Owner pursuant to the terms of such
Tenant’s Lease, (ii) tenant improvements paid or reimbursed through  allowances to a Tenant pursuant to such
Tenant’s Lease, and (iii) other similar tenant inducements.

 

“Tenant Notice” has the meaning set forth in Section 3.1(b).

 

“Test Period” means each 12-month period ending on the last day
of a Fiscal Quarter; provided, however, “Test Period” shall mean
the most recently completed calendar quarter, annualized, for calculation of
the “LIBOR Strike Rate”.

 

“Trade Payables” means unsecured amounts payable by or on behalf
of Borrower for or in respect of the operation of the Properties in the
ordinary course and which would under GAAP be regarded as ordinary expenses,
including amounts payable to suppliers, vendors, contractors, mechanics,
materialmen or other Persons providing property or services to the Properties
or Borrower and the capitalized amount of any ordinary-course financing leases.

 

“Transaction” means, collectively, the Merger
and other transactions contemplated and/or financed by the Loan Documents.

 

31

 

“Transfer” means (i) with respect to a Property, the
pledge, sale or other whole or partial conveyance of all or any portion of any
of the Properties or any direct or indirect interest therein, or any direct or
indirect equity interest in the owner thereof, including granting of any
purchase options, rights of first refusal, rights of first offer or similar
rights in respect of any portion of such Property or the subjecting of any
portion of such Property to restrictions on transfer; except that the
conveyance of a space lease at such Property in accordance herewith shall not
constitute a Transfer and (ii) with respect to the Required Equity, unless
expressly permitted hereunder, the pledge, sale or other whole or partial
conveyance of all or any portion thereof or any direct or indirect equity
interest therein.

 

“TRS Owner” means American Financial TRS, Inc.

 

“TRS Property” means any Property directly or indirectly owned
by TRS Owner.

 

“Unaffiliated
Release Price” has the meaning set forth in Exhibit I.

 

“Underfunding” means with respect to any Plan, the excess, if
any, of the “projected benefit obligations” (within the meaning of Statement of
Financial Accounting Standards 87) under such Plan (determined using the
actuarial assumption used for financial statement disclosure in the most recent
financial statements of the Plan sponsor) over the fair market value of the assets
held under the Plan.

 

“Upper Tier Pledge” means that certain Pledge and Security
Agreement (Upper Tier) by GKK Stars Acquisition LLC and First States Group,
L.P. for the benefit of Lender.

 

“Use” means, with respect to any Hazardous Substance, the generation,
manufacture, processing, distribution, handling, use, treatment, recycling or
storage of such Hazardous Substance or transportation of such Hazardous
Substance.

 

“U.S. Person” means a United States person within the meaning of
Section 7701(a)(30) of the Code.

 

“U.S. Tax” means any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America or any
taxing authority thereof.

 

“Value
Add Pool Equity” means, collectively, 100% of the direct equity interests
in the owner of each Value Add Pool Owner.

 

“Value Add Pool Equity Release Price” has the meaning set forth
in Exhibit I.

 

“Value
Add Pool Owner” means, collectively or individually, as the context may
require, each  Person that owns a Value
Add Pool Property as listed on Schedule J.

 

“Value
Add Pool Pledgor” means each owner of a Value Add Pool Owner, as set forth
on Schedule J.

 

“Value Add Pool Property” means, collectively or individually,
as the context may require, each of the Properties listed on Schedule J.

 

32

 

“Waste” means any material abuse or destructive use (whether by
action or inaction) of the Properties.

 

“Zoning Report” means a zoning report or reports with respect to
each of the Properties approved by Lender and delivered to Lender in connection
with the Loan, and any amendments or supplements thereto delivered to Lender.

 

 (b)          Rules of Construction.  All references to sections, schedules and
exhibits are to sections, schedules and exhibits in or to this Agreement unless
otherwise specified.  Unless otherwise
specified: (i) all meanings attributed to defined terms in this Agreement
shall be equally applicable to both the singular and plural forms of the terms
so defined, (ii) “including” means “including, but not limited to”, (iii) references
to Payment Dates that fall in specified months ignore the preceding Business
Day convention, and (iv) “mortgage” means a mortgage, deed of trust, deed
to secure debt or similar instrument, as applicable, and “mortgagee” means the
secured party under a mortgage, deed of trust, deed to secure debt or similar
instrument.  All accounting terms not
specifically defined in this Agreement shall be construed in accordance with
GAAP, as same may be modified in this Agreement.  Notwithstanding anything to the contrary set
forth herein or in the other Loan Documents, wherever the Loan Documents
provide that a Property Owner or Joint Venture Owner shall take or refrain from
taking an action, and all references to Borrower taking an action with respect
to a Property (e.g., requirements that Borrower maintain the Property,
perform obligations under Leases, etc.), such provision shall be construed to
mean that Borrower shall cause the applicable Property Owner or Joint Venture
Owner (to the fullest extent permitted under the applicable Qualified Joint
Venture Agreements with respect to the Joint Venture Properties) to take or
refrain from taking such action, as applicable; and all references to the
creation or release of a Lien of Lender on an Encumbered Property shall mean
the creation or release of Lender’s Lien on the Collateral specifically related
to such Property.  The Schedules attached
hereto reflect the state of affairs as of the Closing Date but do not reflect
subsequent changes that may have occurred pursuant to and in accordance with
this Agreement.  The terms and provisions
in the Original Loan Agreement relating to the “Indenture”, as defined therein,
the obligations issued thereunder and the representations relating thereto,
shall apply with respect to the period from the Closing Date through and
including the day immediately following the Closing Date.

 

33

 

ARTICLE I

 

GENERAL TERMS

 

1.1.          The
Loan.  On the Closing Date, subject
to the terms and conditions of this Agreement, Lender shall make a loan to
Borrower (the “Loan”) in an amount equal to the Loan Amount.  The Loan shall initially be represented by a
single Note which shall bear interest as described in this Agreement at a per
annum rate as provided in Section 1.3(a).  The Loan shall be secured by the Collateral.

 

1.2.          The
Term.

 

(a)           The
Maturity Date of the Loan shall initially be the Payment Date in March 2010,
or such earlier date as may result from acceleration.

 

(b)           Borrower
shall have a single option to extend the scheduled Maturity Date of the Loan to
the Payment Date in the month containing the one-year anniversary of the
Maturity Date (the period of such extension, the “Extension Term”), provided
that (i) Borrower shall deliver to Lender written notice of such extension
at least 30 and not more than 60 days prior to the Maturity Date; (ii) no
monetary or other material Default shall be continuing on either the date of
such notice or the Maturity Date as theretofore in effect; (iii) Borrower
shall have obtained an Extension Interest Rate Cap Agreement for the Extension
Term and collaterally assigned such Extension Interest Rate Cap Agreement to
Lender pursuant to an Assignment of Interest Rate Cap Agreement; (iv) the
term of the Mortgage Loan shall have been extended in accordance with the
provisions of Section 1.2(b) of the Mortgage Loan Agreement and
Mortgage Borrower shall have obtained and collaterally assigned to Mortgage
Lender an “Extension Interest Rate Cap Agreement” (as defined in the Mortgage
Loan Agreement) for the applicable Extension Term; and (v) Borrower shall
have paid to Lender an extension fee in an amount equal to 0.75% of the Principal
Indebtedness and all reasonable out-of-pocket expenses incurred by Lender in
connection with such extension. If Borrower fails to exercise the extension
option in accordance with the provisions of this Agreement, the extension
option, and any subsequent extension option hereunder, will automatically cease
and terminate.

 

1.3.          Interest and Principal.

 

(a)           On
each Payment Date, Borrower shall pay interest on the Principal Indebtedness
for the Interest Accrual Period in which such Payment Date falls at a rate per
annum equal to the sum of LIBOR, determined as of the Interest Determination
Date immediately preceding such Interest Accrual Period, plus the
Spread (except that interest shall be payable on the Indebtedness, including
due but unpaid interest, at the Default Rate with respect to any portion of
such Interest Accrual Period falling during the continuance of an Event of
Default).  Interest accruing for the
first Interest Accrual Period shall be prepaid on the Closing Date from the
Loan proceeds otherwise to be disbursed to Borrower at Closing.  Interest payable hereunder shall be computed
on the basis of a 360-day year and the actual number of days elapsed.

 

34

 

(b)           No
prepayments of the Loan shall be permitted except as provided in Sections
2.1 and 5.16(d).  The entire
outstanding Principal Indebtedness, together with all interest thereon through
the end of the Interest Accrual Period in which the Maturity Date falls
(calculated as if such Principal Indebtedness were outstanding for the entire
Interest Accrual Period) and all other amounts then due under the Loan
Documents shall be due and payable by Borrower to Lender on the Maturity Date,
as such date may be extended pursuant to Section 1.2(b).

 

(c)           Upon written notice from Lender to
Borrower (the “Componentization Notice”), the Note will be deemed to
have been subdivided (retroactively as of the Closing) into multiple components
(“Note Components”).  Each Note
Component shall have such notional balance (a “Component Balance”) as
Lender shall specify in the Componentization Notice and an interest rate equal
to the sum of LIBOR plus such amount as Lender shall specify in the
Componentization Notice (each such amount, a “Component Spread”); provided
that (i) the sum of the Component Balances of all Note Components shall
equal the then-applicable Principal Indebtedness, and (ii) except
following a prepayment as the result of an Event of Default or as a result of
the application of Loss Proceeds in connection with a Casualty or Condemnation (x) all
payments of interest and principal hereunder shall be applied to the Note
Components on a pro rata basis and (y) the weighted average of the
Component Spreads, weighted on the basis of their respective Component
Balances, shall equal the percentage set forth in clause (i) of the
definition of “Spread”.  If requested by
Lender, each Note Component shall be represented by a separate physical Note
(and subject to any intercreditor agreement among Lender, Junior Mezzanine
Lender and/or any Encumbered Property Lender, and/or any co-lender agreement
among the Lenders hereunder, all payments of interest and principal hereunder
shall be applied to the Notes on a pro rata basis).  Borrower shall execute and return to Lender
each such Note within a reasonable period of time, but in any event not in
excess of four Business Days after Borrower’s receipt of an execution copy
thereof.

 

(d)           Any
payments of interest and principal not paid when due hereunder shall bear
interest at the applicable Default Rate and, when paid, shall be accompanied by
a late fee in an amount equal to 4% times the amount of such late payment in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment.  Borrowers shall have
no obligation hereunder to pay Default Rate interest or a late charge if such
failure to timely make a payment is due to Lender not complying with its
obligations under Article 3 hereof and the Cash Management
Agreement and no Default or Event of Default shall result under the Loan
Documents by reason thereof.

 

1.4.          Interest Rate Cap Agreements.

 

(a)           On or prior to the Closing Date,
Borrower shall obtain, and thereafter maintain in effect, an Initial Interest
Rate Cap Agreement, which shall be coterminous with the initial term of the
Loan and have a notional amount equal to the Loan Amount.   Any Initial Interest Rate Cap Agreement shall
have a LIBOR strike rate equal to or less than the LIBOR Strike Rate.

 

35

 

(b)           If Borrower exercises its option to
extend the term of the Loan pursuant to Section 1.2(b), then on or
prior to the commencement of the Extension Term Borrower shall obtain, and
thereafter maintain in effect, an Extension Interest Rate Cap Agreement having (x) a
term coterminous with the Extension Term, (y) a notional amount at least
equal to the Principal Indebtedness as of the first day of the Extension Term,
and (z) a LIBOR strike rate equal to or less than the LIBOR Strike Rate.

 

(c)           Borrower shall collaterally assign to
Lender pursuant to an Assignment of Interest Rate Cap Agreement all of its
right, title and interest in any and all payments under each Interest Rate Cap
Agreement and shall deliver to Lender an executed counterpart of such Interest
Rate Cap Agreement and obtain the consent of the Acceptable Counterparty to
such collateral assignment (as evidenced by the Acceptable Counterparty’s
execution of such Collateral Assignment of Interest Rate Cap Agreement).

 

(d)           Borrower shall comply with all of its
obligations under the terms and provisions of each Interest Rate Cap
Agreement.  All amounts paid under an
Interest Rate Cap Agreement shall be deposited directly into the Cash
Management Account.  Borrower shall take
all actions reasonably requested by Lender to enforce Lender’s rights under the
Interest Rate Cap Agreement in the event of a default by the counterparty
thereunder and shall not waive, amend or otherwise modify any of its rights
thereunder.

 

(e)           If, at any time during the term of
the Loan, the counterparty to the Interest Rate Cap Agreement then in effect
ceases to be an Acceptable Counterparty and thereafter fails to abide by the
requirements set forth in such Interest Rate Cap Agreement with respect to
ratings downgrades, then Borrower shall promptly obtain a replacement Interest
Rate Cap Agreement satisfying the requirements set forth in paragraph (a) or
(b) above, as applicable, with a counterparty that is an Acceptable
Counterparty.

 

(f)            At Closing and at any time that
Borrower obtains a replacement Interest Rate Cap Agreement pursuant to this Section 1.4,
Borrower shall deliver to Lender a legal opinion or opinions from counsel to
the applicable Acceptable Counterparty (which counsel may be internal counsel)
in substantially the form of Exhibit B.

 

1.5.          Method and Place of Payment.  Except as otherwise specifically provided in
this Agreement, all payments and prepayments under this Agreement and the Notes
(including any deposit into the Cash Management Account pursuant to Section 3.2(c))
shall be made to Lender not later than 1:00 p.m., New York City time, on
the date when due and shall be made in lawful money of the United States of
America by wire transfer in federal or other immediately available funds to the
account specified from time to time by Lender. 
Any funds received by Lender after such time shall be deemed to have
been paid on the next succeeding Business Day. 
Lender shall notify Borrower in writing of any changes in the account to
which payments are to be made.  If the
amount received from Borrower (or from the Cash Management Account pursuant to Section 3.2(b))
is less than the sum of all amounts then due and payable hereunder, such amount
shall be applied, at Lender’s sole discretion, either toward the components of
the Indebtedness (e.g., interest, principal and other amounts payable
hereunder) and the Note Components in such sequence as Lender shall elect in
its sole discretion, or toward the payment of Property expenses.

 

36

 

1.6.          Regulatory
Change.  If, as a result of any
Regulatory Change, any reserve, special deposit or similar requirements
relating to any extensions of credit or other assets of, or any deposits with,
any Lender is imposed, modified or deemed applicable and the result is to
increase the cost to such Lender of making LIBOR-based loans, or to reduce the
amount receivable by Lender hereunder in respect of any portion of the Loan
with respect to LIBOR-based loans by an amount deemed by such Lender to be
material (such increases in cost and reductions in amounts receivable, “Increased
Costs”), then Borrower agrees that it will pay to Lender upon Lender’s
request such additional amount or amounts (based upon a reasonable allocation
thereof by such Lender to the LIBOR-based loans made by such Lender) as will
compensate such Lender for such Increased Costs to the extent that such
Increased Costs are reasonably allocable to the Loan.  Lender will notify Borrower in writing of any
event occurring after the Closing Date which will entitle Lender to
compensation pursuant to this Section 1.6 as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation and will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender.  If such Lender shall fail
to notify Borrower of any such event within 90 days following the end of the
month during which such event occurred, then Borrower’s liability for any
amounts described in this Section incurred by such Lender as a result of
such event shall be limited to those attributable to the period occurring
subsequent to the 90th day prior to the date upon which such Lender actually
notified Borrower of the occurrence of such event.  Notwithstanding the foregoing, in no event
shall Borrower be required to compensate any Lender for any portion of the
income or franchise taxes of Lender, whether or not attributable to payments
made by Borrower.  If a Lender requests
compensation under this Section 1.6, Borrower may, by notice to
Lender, require that such Lender furnish to Borrower a statement setting forth
in reasonable detail the basis for requesting such compensation and the method
for determining the amount thereof.

 

1.7.          Taxes.

 

(a)           Borrower
agrees to indemnify Lender against any present or future stamp, documentary or
other similar or related taxes or other similar or related charges now or
hereafter imposed, levied, collected, withheld or assessed by any United States
Governmental Authority by reason of the execution and delivery of the Loan Documents
and any consents, waivers, amendments and enforcement of rights under the Loan
Documents.

 

(b)           If
Borrower is required by law to withhold or deduct any amount from any payment
hereunder in respect of any U.S. Tax, Borrower shall withhold or deduct the
appropriate amount, remit such amount to the appropriate Governmental Authority
and pay to each Person to whom there has been an Assignment or Participation of
a Loan and who is not a U.S. Person such additional amounts as are necessary in
order that the net payment of any amount due to such non-U.S. Person hereunder
after deduction for or withholding in respect of any U.S. Tax imposed with
respect to such payment (or in lieu thereof, payment of such U.S. Tax by such
non-U.S. Person), will not be less than the amount stated in this Agreement to
be then due and payable; except that the foregoing obligation to pay such
additional amounts shall not apply (i) to any assignee that has not
complied with the obligations contained in Section 9.7(c), (ii) to
any U.S. Taxes withheld or deducted from, or imposed on, any payment hereunder
or under the Note or any Note Components by reason of any present or former
connection between any non-U.S.

 

37

 

Person and the United States of America (other than solely on account
of the execution and performance of, the enforcement of any right under or the
receipt of any payment under, this Agreement or a Note), (iii) to any U.S.
Taxes withheld or deducted from, or imposed on, any payment hereunder or under
the Note or any Note Components at the time of any Assignment or Participation
of a Loan or the Note or any Note Components to any non-U.S. Person, (iv) to
any U.S. Taxes imposed solely by reason of the failure by such Person (or, if
such Person is not the beneficial owner of the relevant Loan, such beneficial
owner) to comply with applicable certification, information, documentation or
other reporting requirements concerning the nationality, residence, identity or
connections with the United States of America of such Person (or beneficial
owner, as the case may be) if such compliance is required by statute or
regulation of the United States of America as a precondition to relief or
exemption from such U.S. Taxes; or (v) with respect to any Person who is a
fiduciary or partnership or other than the sole beneficial owner of such
payment, to any U.S. Tax imposed with respect to payments made under any Note
to a fiduciary or partnership to the extent that the beneficial owner or member
of the partnership would not have been entitled to the additional amounts if
such beneficial owner or member of the partnership had been the holder of the
Note.

 

(c)           Within
30 days after paying any amount from which it is required by law to make any
deduction or withholding, and within 30 days after it is required by law to
remit such deduction or withholding to any relevant taxing or other authority,
Borrower shall deliver to such non-U.S. Person satisfactory evidence of such
deduction, withholding or payment (as the case may be).

 

1.8.          Release.  Upon payment of the Indebtedness in full when
permitted or required hereunder, Lender shall execute instruments prepared by
Borrower and reasonably satisfactory to Lender, which, at Borrower’s election: (a) release
and discharge all Liens on all Collateral securing payment of the Indebtedness
(subject to Borrower’s obligation to pay any associated fees and expenses),
including all balances in the Collateral Accounts, terminate the Loan Documents
(other than those provisions thereof that expressly survive repayment of the
Indebtedness in full) and provide notice to third parties, including the Cash
Management Bank and Tenants; or (b) assign such Liens (and the applicable
Loan Documents) to a new lender designated by Borrower.

 

ARTICLE II

 

PREPAYMENT

 

2.1.          Voluntary
and Mandatory Prepayment.

 

(a)           Borrower
shall have the right, at its option, upon ten Business Days’ prior written
notice to Lender (which notice may be revocable at any time by Borrower,
provided that Borrower shall reimburse Lender for all of its reasonable
out-of-pocket costs and expenses incurred as a result of any such revocation),
to prepay the Loan in whole or in part at any time, provided that if such
prepayment is made prior to the Par Prepayment Date then Borrower shall pay to
Lender simultaneously with such prepayment the applicable Prepayment Fee; provided,
however, that no Prepayment Fee shall be payable with respect to (i) a
prepayment of the Loan in connection with the release of one or more Value Add
Pool Properties or the release of one or

 

38

 

more of the Properties within the Dana Portfolio, except, in each case,  to the extent that aggregate prepayments of the Loan shall
exceed 30% of the Loan Amount, (ii) a prepayment of the Loan in connection
with the sale of a Disposition Asset or (iii) any prepayment of the Loan
pursuant to Section 5.16(d). 
Each such prepayment shall be accompanied by the amount of interest
theretofore accrued but unpaid in respect of the principal amount so prepaid,
plus the amount of interest that would have accrued on the principal amount so
prepaid had it remained outstanding through the end of the Interest Accrual
Period in which such prepayment is made and, if such prepayment is made during
the last two Business Days in any Interest Accrual Period, the amount of
additional interest that would have accrued on the principal amount so prepaid
had it remained outstanding through the end of the following Interest Accrual Period.  Following any such prepayment, Borrower may
release or transfer, free and clear of the Lien of the Loan Documents, a
portion of the notional amount of the Interest Rate Cap Agreement equal to the
amount of such prepayment.  Any partial
prepayment shall be applied to the last payments of principal due under the
Loan.

 

(b)           Borrower
shall not be permitted to make a voluntary prepayment of the Principal
Indebtedness (excluding any payment of any Affiliated Release Price,
Unaffiliated Release Price, Dana Release Price or any application of Loss
Proceeds) unless simultaneously therewith a prepayment of the Mortgage Loan and
the Junior Mezzanine Loan shall also be made in the amount necessary so that
the Principal Indebtedness, the Mortgage Loan Principal Indebtedness and the
Junior Mezzanine Loan Principal Indebtedness immediately after such prepayment
are in the same proportion as they were immediately prior to such prepayments
(but Borrower shall be permitted, and is required, to make the mandatory prepayments
set forth in Section 2.1(c)). 
If the Note has been bifurcated into multiple Note Components pursuant
to Section 1.3(c), all prepayments of the Loan, except those made
during the continuance of an Event of Default or pursuant to Section 5.16,
shall be applied to the Note Components on a pro rata basis.  All prepayments of the Loan made during the
continuance of an Event of Default or pursuant to Section 5.16
shall be applied to the Note Components in ascending order of interest rate (i.e.,
first to the Note Component with the lowest Component Spread until its
outstanding principal balance has been reduced to zero, then to the Note
Component with the second lowest Component Spread until its outstanding
principal balance has been reduced to zero, and so on) or in such other order
as Lender shall determine.

 

(c)           Borrower
shall make the following mandatory prepayments of the Loan:

 

(i)            on the first Payment Date following
the date on which any Restricted Cash is no longer required to be maintained as
collateral for the benefit of the applicable Encumbered Property Lender
pursuant to the applicable Encumbered Property Debt Documents, Borrower shall
prepay the Loan in accordance with Section 2.1 in an amount equal
to the product of (x) the amount of any such Restricted Cash, times
(y) the Loan Multiplier, provided that Borrower shall not be required to
pay any Prepayment Fee or other similar amount in connection therewith;

 

(ii)           on any Payment Date on which Dana
Excess Cash Flow is contained in the Cash Management Account, Borrower shall
prepay the Loan in an amount equal to the product of (x) the amount of
such Dana Excess Cash Flow times (y) the Loan Multiplier, provided that (i) Borrower
shall not be required to pay any Prepayment Fee or 

 

39

 

other similar amount in connection therewith and (ii) the
aggregate amount of prepayments of the Loan and the Junior Mezzanine Loan made
pursuant to this Section 2.1(c)(ii) shall not be required to
exceed $10,000,000 in the aggregate in any calendar year (which amount shall be
reduced on a proportionate basis to reflect any reduction in Borrower’s
interest in the Dana Portfolio in the event Borrower enters into a Qualified
Joint Venture Agreement with respect to the Dana Portfolio in accordance
herewith, and any release of a Property in the Dana Portfolio in accordance
herewith, in each case provided the Release Price required to be paid in
accordance therewith has been paid);

 

(iii)          simultaneously with, and as a
condition to, any sale and/or financing of any Disposition Asset (including
subsequent sales and/or financings to the extent any initial sale or financing
is with or to an Affiliate of Borrower) that shall cause the aggregate gross
proceeds theretofore realized from the sale and/or financing of Disposition
Assets to exceed $184,000,000 (which gross proceeds shall include the
assumption of Debt without reduction for repayment of Debt, but shall be net of
customary transaction costs, including legal fees, actually paid to third
parties, in each case with respect to any such sale or financing of a
Disposition Asset), subject to the last sentence of Section 3.1(b) below,
Borrower shall prepay the Loan in accordance with Section 2.1 in an
amount equal to the product of (x) the amount of any such excess, times
(y) the Loan Multiplier, provided that Borrower shall not be required to
pay any Prepayment Fee or other similar amount in connection therewith (by way
of example only: if the Disposition Assets are encumbered by $100,000,000 and
are purchased for $100,000,000 subject to existing Debt, or are purchased for
$200,000,000 and existing Debt is repaid, then in either case the Loan shall be
reduced or repaid, as applicable, in the amount of $16,000,000 (net of
customary third party transaction costs paid to unaffiliated third parties)
times the Loan Multiplier; and

 

(iv)          simultaneously with any voluntary
prepayment of all or any portion of the Mortgage Loan Principal Indebtedness
and/or the Junior Mezzanine Loan Principal Indebtedness, Borrower shall make a
prepayment hereunder in the amount necessary so that the Principal
Indebtedness, the Mortgage Loan Principal Indebtedness and the Junior Mezzanine
Loan Principal Indebtedness immediately after such prepayments are in the same proportion
as they were immediately prior to such prepayments.

 

2.2.          Property Releases.

 

(a)           So
long as no Event of Default is then continuing and all amounts then due and
owing to Lender have been paid in full, Borrower may from time to time obtain
the release of one or more of the Properties or direct or indirect equity
interests therein from the Liens of the Loan Documents in connection with a
sale to an unaffiliated third-party in an arms’-length transaction or a
Permitted Affiliate Sale, or pursuant to Section 5.24, provided
that: (1) at the time of such release (but provided that no Event of
Default has occurred and is continuing, not in connection with the transfer of
any Disposition Asset), Borrower shall prepay the Loan in accordance with Section 2.1
in an amount equal to the applicable Release Price, plus any additional amount
required to be prepaid in accordance with Section 2.2(c) in
order to reduce the Release Price Deficit, which aggregate prepayment shall be
accompanied by the other amounts specified in Section 2.1,
including the applicable Prepayment Fee if such prepayment is made 

 

40

 

prior to the Par Prepayment Date (for the avoidance of doubt, provided
no Event of Default or Junior Mezzanine Event of Default is continuing,
Borrower shall not be required to deposit into the Cash Management Account the
proceeds from the permitted sale of any Disposition Assets, except if and to
the extent that Borrower is required hereunder to pay to Lender a Release Price
or other amount in connection therewith), (2) except with respect to the
sale of the Dana Portfolio to an unaffiliated third party, DSCR for the Test
Period most recently ended, recalculated to include only income and expense
attributable to Borrower’s interest in the Properties remaining after the
contemplated release and to exclude the interest expense and principal payments
on the aggregate amount to be prepaid, shall be equal to or greater than DSCR
immediately prior to such release (as reasonably determined by Lender) (for
these purposes, in the case of the sale of a Mortgage Loan Collateral Property,
DSCR shall be adjusted to ignore the effect of so-called “rate creep” resulting
from the fact that the prepayment of the Loan and the Mortgage Loan will not
result in a pro-rata reduction of their respective principal amounts), (3) after
giving effect to such release, the aggregate Senior Collateral Value shall not
be less than 120% of the sum of the Principal Indebtedness and the Junior
Mezzanine Loan Principal Indebtedness and (4) Borrower shall reimburse
Lender for any actual reasonable out-of-pocket costs and expenses incurred by
Lender in connection with this Section 2.2 (including the
reasonable fees and expenses of legal counsel and the Servicer).  Notwithstanding anything to the contrary in
this Section 2.2(a) (x) the release price for a
Disposition Asset shall be zero, subject to the requirement specified in Section 2.1(c)(iii),
and the foregoing requirements set forth in clauses (1) through (4) inclusive
shall not apply, (y) with respect to the release of any Joint Venture
Property, the Release Price applicable to such Property shall be adjusted to
reflect the Joint Venture Owner’s percentage interest in the Joint Venture
Property as of the date of any such release, and (z) the release price for
any asset acquired by a Borrower from and after the date hereof (to the extent
Borrower is permitted to acquire any such asset pursuant this Agreement) shall
be zero, and the foregoing requirements set forth in clauses (1) through (4) inclusive
shall not apply.

 

(b)           Upon
satisfaction of the requirements set forth in Sections 2.1 and 2.2,
Lender will execute and deliver to Borrower such instruments, prepared by
Borrower and approved by Lender, as shall be necessary to release the
applicable Property or Properties from the Liens of the Loan Documents or to
assign the applicable portion of such Liens to a third party to the extent
necessary to avoid the incurrence of mortgage recording taxes.

 

(c)           Notwithstanding
anything herein to the contrary, in the case of a sale of a Property to an
unaffiliated third party in an arms’-length transaction, if the Net Proceeds
are less than the amount specified in clause (B)(x) of the definition of “Unaffiliated
Release Price”, then the amount of principal payable by Borrower under Section 2.2(a)(1) in
connection with the release of such Property shall be the Loan Multiplier times
100% of such Net Proceeds, subject to the following:

 

(i)            the Release Price Deficit (as defined
below) may not at any time exceed $30,000,000 times the Loan Multiplier; and

 

(ii)           if and to the extent the Release
Price Deficit is greater than zero, an amount equal to the product of the
Excess Transfer Proceeds times the Loan Multiplier shall be applied toward
prepayment of the Loan in accordance with Section 2.1 (and shall 

 

41

 

be accompanied by
any applicable Prepayment Fee) until the Release Price Deficit is reduced to
zero.

 

“Release Price Deficit” means, from time to
time, the excess, if any, of (x) the sum of all Release Prices of all
Properties theretofore released, minus (y) the sum of all amounts
theretofore applied toward the prepayment of the Loan in connection with
Transfers of Properties pursuant to Section 2.2(a)(1).

 

2.3.          Value
Add Pool Equity Releases.  So long as
no Event of Default is then continuing and all amounts then due and owing to
Lender have been paid in full, Borrower may obtain the release of up to and
including 80% of the Value Add Pool Equity in the aggregate from the Liens of
the Loan Documents in connection with the sale of such equity interests to an
unaffiliated third party, provided that (1) at the time of each
such release, Borrower shall prepay the Loan, in accordance with Section 2.1,
in an amount equal to the applicable Value Add Pool Equity Release Price, which
prepayment shall be accompanied by the other amounts specified in Section 2.1,
(2) DSCR for the Test Period most recently ended, recalculated to include
only Borrower’s share of income and expense attributable to the Properties
remaining after the contemplated sale and to exclude the interest expense and
principal payments on the aggregate amount to be prepaid, shall be equal to or
greater than DSCR immediately prior to such sale (as reasonably determined by
Lender), (3) after giving effect to such release, the aggregate Senior
Collateral Value shall not be less than 120% of the sum of the Principal
Indebtedness and the Junior Mezzanine Loan Principal Indebtedness (as
reasonably determined by Lender), (4) Borrower shall reimburse Lender for
any actual reasonable out-of-pocket costs and expenses incurred by Lender in
connection with this Section 2.2 (including the reasonable fees and
expenses of legal counsel and the Servicer), (5) Lender shall retain a
first-priority perfected pledge of the remaining Value Pool Property Equity,
which shall not be less than 20% of the initial Value Add Pool Equity, (6) Lender
shall have reasonably approved the joint venture or other applicable agreement
between Borrower and the purchaser(s) of Value Add Pool Equity and any
subsequent amendments and modifications thereof, and such joint venture or
other applicable agreement shall provide that (x) if Lender forecloses on
the Value Add Pool Equity pledged to Lender under the Loan Documents, then
unless 80% of the Value Add Pool Equity has been released in accordance with
this Section 2.3 (which 80% threshold may be reduced to 66.67% in
Lender’s reasonable discretion), Lender shall have the right to require that
the Value Add Pool Properties be liquidated, subject to customary rights of
first offer or appraisal sale or other similar rights reasonably acceptable to
Lender, and (y) distributions of operating revenues, capital proceeds and
all other income of the Value Add Pool Properties, to the extent available for
distribution, shall be made to the equityholders in proportion to their
respective equity interests and (7) in the event that 80% of the Value Add
Pool Equity has been released in accordance with the provisions of this Section 2.3,
any subsequent sale of a Value Add Pool Property or of Borrower’s entire
remaining 20% equity interest referenced in the preceding clause (5) shall
be subject to the requirements of foregoing clauses (1) through (6), provided,
however, that the applicable Unaffiliated Release Price shall be paid in
lieu of the Value Add Pool Equity Release Price, except that, for purposes of
this subsection (7) only, the Release Price payable in connection
therewith shall be the Unaffiliated Release Price (taking into account 100% of
the Aggregate Allocated Loan Amounts of the respective Properties, without
reduction for prior equity sales) reduced by multiplying the amount specified
in clause (x) of the definition of 

 

42

 

Unaffiliated Release Price by 20%, and the percentage specified in
clause (y) of the definition of Unaffiliated Release Price shall be
replaced with “100%”.

 

2.4  Release
of Vacant Land.  So long as no Event
of Default is then continuing, Borrower may obtain the release of one or more
vacant non-income producing parcels of land (each such parcel, a “Release
Parcel”) from the restrictions and Liens of the Loan Documents in
connection with the Transfer of such Release Parcel to an unaffiliated third
party in a bona fide arms-length transaction upon satisfaction of the following
conditions:

 

(i)            Borrower shall deliver to Lender
notice of its intent to release one or more Release Parcels, which notice must
be given at least 10 Business Days and not more than 60 days prior to the
Business Day upon which the release is to be made and shall specify the Release
Parcel(s) that Borrower intends to release.  Borrower shall promptly reimburse Lender for
any actual out-of-pocket costs and expenses (including the reasonable fees and
expenses of legal counsel and the Servicer) incurred by Lender in connection
with a release pursuant to this Section 2.4.

 

(ii)           At the time of such release, Borrower
shall prepay a portion of the Loan, in accordance with Section 2.1,
in an amount equal to the applicable Parcel Release Price.

 

(iii)          Lender shall have received evidence
reasonably satisfactory to it that the Mortgage Borrower shall have satisfied
all of the conditions to the proposed release set forth in the applicable
Encumbered Debt Documents.

 

(iv)          Borrower shall have delivered to
Lender satisfactory evidence that (1) the applicable Release Parcel has
been legally subdivided from the remaining Property, a separate tax
identification number shall have been issued for such Release Parcel and all
necessary variances, if any, shall have been obtained (with the result that,
upon the transfer and release of such Release Parcel, no part of the remaining
Property shall be part of a tax lot which includes any portion of such Release
Parcel); (2) after giving effect to such transfer, each of the Release
Parcel and the remaining Property conforms to and is in compliance in all
material respects with applicable Legal Requirements (including, without
limitation, all zoning and subdivision laws, setback requirements, sideline
requirements, parking ratio requirements, use requirements, building and fire
code requirements, environmental requirements and wetlands requirements) and
constitutes a separate tax lot, (3) the Release Parcel is not necessary
for the remaining Property to comply with any zoning, building, land use or
parking or other Legal Requirements applicable to it or for the then current
use of the remaining Property, including without limitation for access,
driveways, parking, utilities or drainage or, to the extent that the Release
Parcel is necessary for any such purpose, a reciprocal easement agreement or
other agreement has been executed and recorded that would allow the owner of the
remaining Property to continue to use the release Parcel (at no cost or expense
to Borrower) to the extent necessary for such purpose, and (4) the lots
have been demised to Lender’s satisfaction in its reasonable discretion;

 

(v)           In the case of a Mortgage Loan
Collateral Property, Borrower shall deliver to Mortgage Lender an endorsement
to the Qualified Title Insurance Policy insuring the 

 

43

 

applicable Mortgage (1) extending
the effective date of the policy to the effective date of the release; (2) confirming
no change in the priority of the Mortgage on the remaining Property (exclusive
of the Release Parcel) or in the amount of the insurance or the coverage of the
Property (exclusive of the Release Parcel) under the policy; and (3) insuring
the rights and benefits under any new or amended reciprocal easement agreement
or such other agreement required pursuant to clause (v)(3) of this Section that
has been executed and recorded, if any;

 

(vi)          Borrower shall have complied with any
requirements applicable to the release in the Leases, reciprocal easement
agreements, operating agreements, parking agreements or other similar
agreements affecting the remaining Property and the release does not violate
any of the provisions of such documents in any respect that would result in a
termination (or give any other party thereto the right to terminate),
extinguishment or other loss of material rights of Borrower or in a material
increase in Borrower’s obligations under such documents and, to the extent
necessary to comply with such documents, the transferee of the Release Parcel
has assumed Borrower’s obligations, if any, relating to the Release Parcel
under such documents;

 

(vii)         ingress to and egress from all portions
of the remaining Property shall be over (i) physically open and fully
dedicated public roads or (ii) vehicle and pedestrian easements which (1) provide
vehicular and pedestrian access to a physically open and fully dedicated public
road, (2) are recorded in the chain of title to both the property which is
encumbered thereby and the remaining Property, (3) are irrevocable and
non-terminable without the consent of the owner of the remaining Property; and
provided further that, if lawfully obtainable, in the case of a Mortgage Loan
Collateral Property, Borrower delivers to Mortgage Lender an endorsement to the
Qualified Title Insurance Policy, which endorsement shall insure that (A) the
benefit of each such easement inures and runs to the benefit of the owner of the
remaining Property, (B) the Lien of the Mortgage is a first Lien on
Mortgage Borrower’s beneficial interest in such easement, subject to no
exceptions other than Permitted Encumbrances and those approved by Lender in
its reasonable discretion and (C) no then-existing mortgages, Liens,
security interests or other encumbrances (other than Permitted Encumbrances) on
the Release Parcel burdened by such easement are superior to, or under any
circumstances could terminate, impair or limit the terms of such easement;

 

(viii)        Borrower shall have delivered an Officer’s
Certificate to the effect that the conditions in this Section 2.4
have occurred or shall occur concurrently with the transfer and release of the
applicable Release Parcel; and

 

(ix)           Borrower shall execute such documents
and instruments and obtain such opinions of counsel as are typical for similar
transactions.

 

44

 

ARTICLE III

 

ACCOUNTS

 

3.1.          Cash Management Account.

 

(a)           On
or prior to the Closing Date, Borrower shall establish and thereafter maintain
with the Cash Management Bank a cash management account into which income from
the Properties will be deposited (the “Cash Management Account”),
subject to and in accordance with the terms hereof.  As a condition precedent to the closing of
the Loan, Borrower shall cause the Cash Management Bank to execute and deliver
an agreement (as modified or replaced in accordance herewith, a “Cash
Management Agreement”) which provides, inter  alia, that no
party other than Lender and Servicer shall have the right to withdraw funds
from the Cash Management Account.  The
fees and expenses of the Cash Management Bank shall be paid by Borrower.

 

(b)           Subject
to the requirements of the Encumbered Property Debt Documents, within five
Business Days following the Closing Date, Borrower shall deliver to each Tenant
in the Properties (except for Tenants at Other Properties) a written notice (a “Tenant
Notice”) in the form of Exhibit D instructing that (i) all
payments under the Leases shall thereafter be transmitted by them directly to,
and deposited directly into, the Cash Management Account or a Blocked Account
and (ii) such instruction may not be rescinded unless and until such
Tenant receives from Borrower or Lender a copy of Lender’s written consent to
such rescission or Lender’s written notice that the Loan has been repaid in
full.  Borrower shall send a copy of each
such written notice to Lender and shall redeliver such notices to each Tenant
until such time as such Tenant complies therewith.  Subject to the Encumbered Property Debt
Documents and any Qualified Joint Venture Agreement, Borrower shall cause (i) all
cash Revenues relating to the Properties (other than the Encumbered Properties
and the TRS Properties) and all other money received by Borrower or the
Approved Property Manager (other than tenant security deposits required to be
held in escrow accounts) with respect to the Properties (other than the
Encumbered Properties and the TRS Properties) to be deposited in the Cash
Management Account or a Blocked Account by the end of the first Business Day
following Borrower’s or the Approved Property Manager’s receipt thereof and (ii) all
Distributions to be deposited in the Cash Management Account or a Blocked
Account by the end of the second Business Day following Borrower’s receipt
thereof.  “Blocked Account” means
an Eligible Account maintained with a financial institution reasonably satisfactory
to Lender that enters into a blocked account agreement or similar irrevocable
direction instruction (as modified or replaced in accordance herewith, the “Blocked
Account Agreement”) reasonably satisfactory to Lender pursuant to which
such financial institution will remit, at the end of each Business Day, all
amounts contained therein to an account specified by Lender (Lender hereby
agreeing to specify the Cash Management Account so long as no Event of Default
has occurred and is then continuing).  For the avoidance of doubt, notwithstanding
anything to the contrary in this Agreement, no amounts shall be deposited into
the Cash Management Account with respect to any Encumbered Property or TRS
Property, except for Distributions pursuant to Section 5.23.  Notwithstanding the foregoing, provided no
Event of Default is continuing, Borrower shall not be required to deposit into
the Cash Management Account the proceeds from the permitted sale 

 

45

 

of any Disposition
Assets, except to the extent that Borrower is required hereunder to pay to
Lender a Release Price or other amount in connection therewith.

 

(c)           Lender
shall have the right at any time, upon not less than 30 days’ prior written
notice to Borrower, to replace the Cash Management Bank with any Eligible
Institution at which Eligible Accounts may be maintained that will promptly
execute and deliver to Lender a Cash Management Agreement substantially
identical to the Cash Management Agreement executed at Closing.  In addition, subject to the provisions of the
Encumbered Property Debt Documents, during the continuance of an Event of
Default or if the Blocked Account Bank fails to comply with the Blocked Account
Agreement or ceases to be an Eligible Institution, Lender shall have the right
at any time, upon not less than 30 days’ prior written notice to Borrower, to
replace the Blocked Account Bank with any Eligible Institution at which
Eligible Accounts may be maintained that will promptly execute and deliver to
Lender a Blocked Account Agreement satisfactory to Lender.

 

(d)           Borrower
and Lender agree that the flow of funds with respect to the Cash Management
Account and the Blocked Account as depicted in the diagrams attached hereto as Schedule
C is in compliance with this Section 3.1.

 

3.2.          Distributions
from Cash Management Account.

 

(a)           The
Cash Management Agreement shall provide that the Cash Management Bank shall
remit to the Junior Mezzanine Cash Management Account, at the end of each
Business Day (or, at Borrower’s election, on a less frequent basis), the
amount, if any, by which amounts then contained in the Cash Management Account
(other than Dana Excess Cash Flow and Restricted Cash) exceed the aggregate
amount required to be paid to or reserved with Lender, or prepaid pursuant to Section 2.1(c)(i),
on the next Payment Date pursuant to Section 3.2(b) (the “Minimum
Balance”); provided, however, that Lender shall terminate
such remittances during the continuance of an Event of Default upon notice to
the Cash Management Bank.  Lender may
notify the Cash Management Bank at any time of any change in the Minimum
Balance.  Lender shall deliver a copy of
any notice of a change in the Minimum Balance to Borrower, for information only
(but any failure by Lender to do so shall not in any way limit Borrower’s
obligations or liabilities hereunder). 
Any payment received by any Borrower pursuant to this Section 3.2
shall be received free of the Lien of the Loan Documents.

 

(b)           On
each Payment Date, provided no Event of Default has occurred and is continuing,
Lender shall transfer amounts from the Cash Management Account, to the extent
available therein, to make the following payments in the following order of
priority:

 

(i)            to Lender, the amount of all
scheduled or delinquent interest on the Loan and all other amounts then due and
payable under the Loan Documents;

 

(ii)           to Lender, any Restricted Cash
required to be used to prepay the Loan pursuant to Section 2.1(c)(i);

 

(iii)          to Lender, any Dana Excess Cash Flow
required to be used to prepay the Loan pursuant to Section 2.1(c)(ii);

 

46

 

(iv)          for so long as the Junior Mezzanine
Loan remains outstanding, all remaining amounts to the Junior Mezzanine Cash
Management Account; and

 

(v)           if the Junior Mezzanine Loan is no
longer outstanding, all remaining amounts to such account as shall be
designated by Borrower from time to time, unless a Mortgage Loan Event of
Default shall be continuing, in which case, all remaining amounts shall be
remitted to the Mortgage Loan Cash Management Account.

 

(c)           If on any Payment Date the amount in
the Cash Management Account shall be insufficient to make the transfer
described in Section 3.2(b)(i), Borrower shall deposit into the
Cash Management Account on such Payment Date the amount of such
deficiency.  If Borrower shall fail to
make such deposit, the same shall constitute an Event of Default and, in
addition to all other rights and remedies provided for under the Loan
Documents, Lender may disburse and apply the amounts in the Collateral Accounts
in accordance with Section 3.5(c).

 

(d)           Notwithstanding anything to the
contrary contained in this Agreement, the Loan Documents, and/or the Junior
Mezzanine Loan Documents, the parties hereto acknowledge and agree that, as to
any clause or provision contained in this Agreement, the other Loan Documents,
and/or the Junior Mezzanine Loan Documents to the effect that payments,
distributions, or other similar effect are to be made by Borrower to Junior Mezzanine
Lender or applied to the Junior Mezzanine Loan or to any account specified by
Junior Mezzanine Lender, such clause or provision shall be deemed to mean, and
shall be construed as meaning, that Lender shall pay to Borrower, and Borrower
shall then immediately distribute to Junior Mezzanine Borrower, pursuant to and
in accordance with the organizational documents of Borrower and applicable law,
which distribution shall be immediately payable to Junior Mezzanine Lender, and
any such clause or provision shall not be construed as meaning that Borrower
and/or Junior Mezzanine Borrower is acting on behalf of, holding out its credit
for, or paying the obligations of, Junior Mezzanine Borrower, as applicable,
directly or in any other manner that would violate any of the single purpose
entity covenants contained in this Agreement or other similar covenants
contained in Borrower’s organizational documents or Junior Mezzanine Borrower’s
organizational documents, respectively.

 

3.3.          Loss
Proceeds Account.

 

(a)           On
or prior to the Closing Date, Borrower shall establish and thereafter maintain
with the Cash Management Bank an account for the purpose of depositing any Loss
Proceeds (the “Loss Proceeds Account”).

 

(b)           Provided
no Event of Default is continuing, funds in the Loss Proceeds account shall be
applied in accordance with Section 5.16.

 

3.4.          Environmental
Escrow Account.

 

(a)           On
or prior to the Closing Date, Borrower shall establish and thereafter maintain
with the Cash Management Bank an account for the purpose of reserving amounts

 

47

 

anticipated to be required to correct Environmental Conditions (the “Environmental
Escrow Account”).

 

(b)           On
the Closing Date, Borrower shall deposit into the Environmental Escrow Account,
from the proceeds of the Loan, an amount equal to the Environmental Escrow
Amount.

 

(c)           Upon
the request of Borrower at any time that no Event of Default is continuing (but
not more often than once per calendar month), Lender shall cause disbursements
to Borrower from the Environmental Escrow Account to reimburse Borrower for
reasonable costs and expenses incurred in order to correct Environmental
Conditions, provided that

 

(i)            Borrower shall deliver to Lender
invoices evidencing that the costs for which such disbursements are requested
are due and payable;

 

 

(ii)           Borrower shall deliver to Lender an
Officer’s Certificate confirming that all such costs have been previously paid
by Borrower or will be paid from the proceeds of the requested disbursement;
and

 

(iii)          Lender may condition the making of a
requested disbursement on (1) reasonable evidence establishing that
Borrower has applied any amounts previously received by it in accordance with
this Section for the expenses to which specific draws made hereunder
relate, (2) reasonably satisfactory site inspections, and (3) receipt
of lien releases and waivers from any contractors, subcontractors and others
with respect to such amounts.

 

(d)           Upon
substantial resolution (as reasonably determined by Lender) of the portion of
the Environmental Conditions identified on any line on Schedule F, and
provided no Event of Default is then continuing, the remainder of the portion
of the Environmental Escrow Account held for such line item (as shown adjacent
to such line item on Schedule F) shall promptly be remitted to
Borrower.  Upon the correcting of all
Environmental Conditions or other resolution reasonably satisfactory to Lender
with respect thereto, provided no Event of Default is then continuing, any
amounts then remaining in the Environmental Escrow Account shall promptly be
remitted to Borrower and the Environmental Escrow Account will no longer be
maintained.

 

3.5.          Intentionally
Omitted.

 

3.6.          Account
Collateral.

 

(a)           Borrower
hereby grants a perfected first-priority security interest in favor of Lender
in and to the Account Collateral as security for the Indebtedness, together
with all rights of a secured party with respect thereto.  Each Collateral Account shall be an Eligible
Account under the sole dominion and control of Lender and shall be in the name
of Borrower, as pledgor, and Lender, as pledgee.  Borrower shall have no right to make
withdrawals from any of the Collateral Accounts.  Funds in the Collateral Accounts shall not be
commingled with any other monies at any time. 
Borrower shall execute any additional documents that Lender in its 

 

48

 

reasonable discretion may require and shall provide all other evidence
reasonably requested by Lender to evidence or perfect its first-priority
security interest in the Account Collateral. 
Funds in the Collateral Account shall be invested in Permitted
Investments selected by Lender.  Unless
otherwise required by applicable law, provided no Event of Default is continuing,
all income and gains from the investment of funds in the Collateral Accounts
shall be for the account of Borrower and shall be paid to Borrower upon written
request therefor (but in any event, not more often than monthly). After the
Loan and all other Indebtedness have been paid in full, the Collateral Accounts
shall be closed and the balances therein, if any, shall be paid to Borrower.

 

(b)           The
insufficiency of amounts contained in the Collateral Accounts shall not relieve
Borrower from its obligation to fulfill all covenants contained in the Loan
Documents.

 

(c)           During
the continuance of an Event of Default, Lender may, in its sole discretion,
apply funds in the Collateral Accounts, and funds resulting from the
liquidation of Permitted Investments contained in the Collateral Accounts,
either toward the components of the Indebtedness (e.g., interest,
principal and other amounts payable hereunder), the Loan and the Note
Components in such sequence as Lender shall elect in its sole discretion,
and/or toward the payment of Property expenses.

 

3.7.          Bankruptcy.  Borrower and Lender acknowledge and agree
that upon the filing of a bankruptcy petition by or against Borrower under the
Bankruptcy Code, the Account Collateral and the Revenues (whether then already
in the Collateral Accounts, or then due or becoming due thereafter) shall be
deemed not to be property of Borrower’s bankruptcy estate within the meaning of
Section 541 of the Bankruptcy Code. 
If, however, a court of competent jurisdiction determines that,
notwithstanding the foregoing characterization of the Account Collateral and
the Revenues by Borrower and Lender, the Account Collateral and/or the Revenues
do constitute property of Borrower’s bankruptcy estate, then Borrower and
Lender further acknowledge and agree that all such Revenues, whether due and
payable before or after the filing of the petition, are and shall be cash
collateral of Lender.  Borrower
acknowledges that Lender does not consent to Borrower’s use of such cash
collateral and that, in the event Lender elects (in its sole discretion) to
give such consent, such consent shall only be effective if given in writing
signed by Lender.  Except as provided in
the immediately preceding sentence, Borrower shall not have the right to use or
apply or require the use or application of such cash collateral (i) unless
Borrower shall have received a court order authorizing the use of the same, and
(ii) Borrower shall have provided such adequate protection to Lender as
shall be required by the bankruptcy court in accordance with the Bankruptcy
Code.

 

ARTICLE IV

 

REPRESENTATIONS

 

Borrower represents to Lender that, as of the Closing
Date, except as set forth in the Exception Report:

 

49

 

4.1.          Organization.

 

(a)           Each
Borrower is duly formed, validly existing and in good standing under the laws
of the state of its formation, and is in good standing in each other
jurisdiction where ownership of its properties or the conduct of its business
requires it to be so, and each Borrower has all power and authority under such
laws and its organizational documents and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.

 

(b)           Each
Property Owner is duly formed, validly existing and in good standing under the
laws of the state of its formation, and is in good standing in each other
jurisdiction where ownership of its properties or the conduct of its business
requires it to be so, and each Property Owner has all power and authority under
such laws and its organizational documents and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.

 

(c)           No
Borrower has any subsidiaries and no Borrower owns any equity interest in any
other Person except as shown on the organizational chart contained in Exhibit A,
which organizational chart is true and correct as of the date hereof.

 

4.2.          Authorization.  Each Borrower has the power and authority to
enter into this Agreement and the other Loan Documents, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated by the Loan Documents and has by proper action duly authorized the
execution and delivery of the Loan Documents.

 

4.3.          No
Conflicts.  Neither the execution and
delivery of the Loan Documents, nor the consummation of the transactions
contemplated therein, nor performance of and compliance with the terms and
provisions thereof will (i) violate or conflict with any provision of its
formation and governance documents, (ii) violate any law, regulation
(including Regulation U, Regulation X or Regulation T), order, writ, judgment,
injunction, decree or permit applicable to it, (iii) violate or conflict
with contractual provisions of, or cause an event of default under, any
indenture, loan agreement, mortgage or contract to which any Borrower, any
Property Owner or Sponsor is a party or by which Borrower, any Property Owner
or Sponsor may be bound which violation, conflict or event of default is
reasonably likely to result in a Portfolio Material Adverse Effect, or (iv) result
in or require the creation of any Lien or other charge or encumbrance upon or
with respect to the Collateral in favor of any party other than Lender.

 

4.4.          Consents.  No consent, approval, authorization or order
of, or qualification with, any court or Governmental Authority is required in
connection with the execution, delivery or performance by any Borrower of this
Agreement or the other Loan Documents, or by any Required Equity Pledgor of the
Loan Documents to which it is a party, the failure to obtain which is
reasonably likely to result in a Portfolio Material Adverse Effect, except for
any of the foregoing which have already been obtained.

 

4.5.          Enforceable
Obligations.  This Agreement and the
other Loan Documents have been duly executed and delivered by Borrower and
constitute each Borrower’s legal, valid and binding obligations, enforceable in
accordance with their respective terms, subject to 

 

50

 

bankruptcy, insolvency and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity
principles.  The Loan Documents are not
subject to any right of rescission, set-off, counterclaim or defense by any
Borrower, including the defense of usury.

 

4.6.          No
Default.  No Default or Event of
Default will exist immediately following the making of the Loan.

 

4.7.          Payment
of Taxes.  Each Borrower and each
Property Owner has filed, or caused to be filed, all tax returns (federal,
state, local and foreign) required to be filed and paid all amounts of taxes
due (including interest and penalties) except for taxes which are not yet
delinquent and has paid all or made provision with the title company for the
payment of all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangible
taxes) owing by it necessary to preserve the Liens in favor of Lender (or in
the case of an Encumbered Property, to preserve the Liens under the Encumbered
Property Debt Documents).

 

4.8.          Compliance
with Law.  Except as disclosed in the
Zoning Reports, each Borrower, each Property and the uses thereof comply with
all applicable Insurance Requirements and Legal Requirements, including
building and zoning ordinances and codes, except to the extent that failure to
comply therewith would not result in a Portfolio Material Adverse Effect.  Except as disclosed in the Zoning Reports,
each Mortgage Loan Collateral Property, and to Borrower’s knowledge, each Other
Property conforms in all material respects to current zoning requirements
(including requirements relating to parking) and is not an illegal
nonconforming use.  No Borrower is in
default or violation of any order, writ, injunction, decree or demand of any
Governmental Authority the violation of which is reasonably likely to result in
a Material Adverse Effect.  There has not
been committed by or on behalf of any Borrower or to Borrower’s knowledge any
other person in occupancy of or involved with the operation or use of any
Mortgage Loan Collateral Property, or  to
Borrower’s knowledge, any other person in occupancy of or involved with the
operation or use of any Other Property, any act or omission affording any
federal Governmental Authority or any state or local Governmental Authority the
right of forfeiture as against any Property or any portion thereof or any
monies paid in performance of its obligations under any of the Loan
Documents.  No Borrower, Property Owner
nor Sponsor has purchased any portion of the Properties with proceeds of any
illegal activity.

 

4.9.          ERISA.  Neither Borrower nor any ERISA Affiliate of
Borrower has incurred or could be subjected to any liability under Title IV or Section 302
of ERISA or Section 412 of the Code or maintains or contributes to, or is
required to maintain or contribute to, any Plan.  The consummation of the transactions
contemplated by this Agreement will not constitute or result in any non-exempt
prohibited transaction under Section 406 of ERISA, Section 4975 of
the Code or substantially similar provisions under federal, state or local
laws, rules or regulations; provided that the foregoing representation is
subject to the assets used by the Lender not being or being treated under ERISA
as Plan Assets.

 

4.10.        Investment
Company Act.  No Borrower is an “investment
company”, or a company “controlled” by an “investment company”, registered or
required to be registered under the Investment Company Act of 1940, as amended.

 

51

 

4.11.        No
Bankruptcy Filing.  No Borrower is
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
its assets or property.  No Borrower has
any knowledge of any Person contemplating the filing of any such petition
against it.

 

4.12.        Other
Debt.  Borrower does not have
outstanding any Debt other than Permitted Debt. 
Borrower has no obligations under the Encumbered Property Debt Documents
except, in the case of AFRT and the Operating Partnership, certain customary
non-recourse carveouts.  As of June 30,
2008, (x) the aggregate principal amount of outstanding Encumbered
Property Debt equals approximately $1,912,796,638 and (y) the aggregate
principal amount of outstanding Encumbered Property Debt excluding amounts
attributable to Disposition Assets equals approximately $1,841,044,035.  Schedule X hereto is true and correct
in all material respects and accurately reflects the outstanding principal
balances attributable to the Encumbered Property Debt as of June 30,
2008.  For the avoidance of doubt, for
purposes of this representation, the stated amounts of Encumbered Property Debt
in (x) and (y) above and as set forth on Schedule X hereto (i) exclude
any portion of actually outstanding Encumbered Property Debt that is secured by
defeasance collateral,  (ii) exclude
the pro rata portion of the Encumbered Property Debt secured by the Property
located at 801 Market Street, Philadelphia, Pennsylvania, that is attributable
to the 11% equitable ownership interest held by Borrower’s joint venture
partner at  such Property, (iii) allocate
the amortized aggregate principal amounts of Encumbered Property Debt  on a pro rata basis among the Properties
based on the original allocated loan amounts for the Properties under their
respective Encumbered Property Debt Documents, and (iv) may be less than
the respective amounts Borrower would be required to pay  to release the Properties from the Encumbered
Property Debt on an individual Property basis.

 

4.13.        Litigation.  There are no actions, suits, proceedings,
arbitrations or governmental investigations by or before any Governmental Authority
or other court or agency now pending, and there are no such actions, suits,
proceedings, arbitrations or governmental investigations threatened, against or
affecting any Borrower, any Property Owner or any Property, which individually
or collectively would have a Portfolio Material Adverse Effect if determined
against Borrower.

 

4.14.        Leases;
Material Agreements.

 

(a)           Borrower
has delivered to Lender true and complete copies of all Leases requested by
Lender.  No person has any possessory
interest in any of the Properties or right to occupy the same except under and
pursuant to the provisions of the Leases. 
The certified rent roll delivered to Lender as of the Closing Date (the “Rent
Roll”) is true and correct in all material respects as of February 29,
2008, and since such date, there have been no changes to the Rent Roll that
would have a Portfolio Material Adverse Effect, no new Major Leases have been
entered into and no Major Lease has been terminated.  Borrower is holding approximately $2,150,000
in respect of Tenant security deposits and is holding no security deposits with
respect to Major Leases, no fixed rent has been paid more than 30 days in
advance of its due date and no payments of rent are more than 30 days
delinquent.  Except as set forth on Schedule
S, no Tenant under any of the Leases referenced in Schedule S has
any remaining termination or contraction options.  Except as set forth in the Leases, no Tenant
has any extension or renewal options. 
Except as set forth in the Qualified Title Policies, with respect to the
Mortgage Loan Collateral 

 

52

 

Properties, or the Leases, with respect to the Other Properties, no
Tenant or other party has any option, right of first refusal or similar preferential
right to purchase or lease all or any portion of any Property.

 

(b)           Except
as set forth on the Exception Report, to Borrower’s knowledge (x) all
material work to be performed by the landlord under Major Leases has been
substantially performed, all material contributions to be made by the landlord
to the Tenants thereunder have been made and all other material conditions to
each Tenant’s obligations thereunder have been satisfied, in each case, in all
material respects, and (y) no Tenant under a Major Lease has the right to
require any Borrower to perform or finance any material Tenant Improvements or
Material Alterations and no material Leasing Commissions are owed or would be
owed upon the exercise of any such Tenant’s existing renewal or expansion options.  Without limiting the foregoing, Wachovia is
required to pay for 100% of the cost of the “Demising Work” referenced in the
Wachovia estoppel letter delivered at Closing.

 

(c)           To
Borrower’s knowledge, there are no Material Agreements except as described in Schedule
D and no Encumbered Property Debt Documents except as described in
Schedule U.  To Borrower’s knowledge,
Borrower has made available to Lender true and complete copies of all Material
Agreements and all Encumbered Property Debt Documents.  To Borrower’s knowledge, each Material
Agreement has been entered into at arm’s length in the ordinary course of
business by or on behalf of Borrower.

 

(d)           The
Leases and the Material Agreements are in full force and effect and, except as
set forth on the Rent Roll, there are no defaults thereunder by any Borrower or
any other party thereto which is reasonably likely to result in a Portfolio
Material Adverse Effect.  No Borrower is
in default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Permitted Encumbrance or any other
agreement or instrument to which it is a party or by which it or any of the
Properties are bound which default is reasonably likely to result in a
Portfolio Material Adverse Effect.

 

4.15.        Full
and Accurate Disclosure.  To Borrower’s
knowledge, no statement of fact heretofore delivered by Sponsor or Borrower to
Lender in writing in respect of the Properties or any Borrower contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained therein not misleading unless
subsequently corrected.  There is no fact
presently actually known to Borrower which has not been disclosed to Lender
which is reasonably likely to result in a Portfolio Material Adverse Effect.

 

4.16.        Financial
Condition.  To Borrower’s knowledge,
except as otherwise disclosed in writing to Lender, all financial data
concerning Borrower and the Properties heretofore provided to Lender fairly
presents in accordance with GAAP the financial position of Borrower in all
material respects, as of the date on which it was made, and does not omit to
state any material fact necessary to make statements contained herein or
therein not misleading.  Since the
delivery of such data, except as otherwise disclosed in writing to Lender there
have occurred no changes or circumstances which have had or are reasonably
likely to result in a Portfolio Material Adverse Effect.

 

53

 

4.17.        Single-Purpose
Requirements.  Each Borrower, each
Property Owner and their respective Single-Purpose Equityholders, except as
disclosed on Exhibit A, is now a Single-Purpose Entity, and has
always been a Single-Purpose Entity to the extent relevant to the
Nonconsolidation Opinion.  All statements
of fact contained in the Nonconsolidation Opinion and in the certificates
referenced therein and attached thereto are true and correct in all material
respects.

 

4.18.        [Intentionally
Omitted].

 

4.19.        Not
Foreign Person.  No Borrower is a “foreign
person” within the meaning of Section 1445(f)(3) of the Code.

 

4.20.        Labor
Matters.  Except as listed on the
Exception Report, no Borrower is a party to any collective bargaining
agreements.

 

4.21.        Title.  Mortgage Loan Property Owners own good,
marketable and insurable title to the Mortgage Loan Collateral Properties and
good and marketable title to the related personal property, to the Collateral
Accounts and to any other Collateral, in each case free and clear of all Liens
whatsoever except the Permitted Encumbrances. 
Owners of Other Properties own good, marketable and insurable title to
the Other Properties and good and marketable title to the related personal
property free and clear of all Liens whatsoever except the Encumbered Property
Debt and the encumbrances permitted under, or created by, the Encumbered
Property Loan Documents.  Each Required
Equity Pledgor has good title to its Required Equity, in each case free and clear
of all Liens except the Permitted Encumbrances. 
The Mortgages, when properly recorded in the appropriate records,
together with any Uniform Commercial Code financing statements required to be
filed in connection therewith, will create (i) valid, perfected first
priority Liens on the Mortgage Loan Collateral Properties and the rents
therefrom, enforceable as such against creditors of and purchasers from
Borrower and subject only to Permitted Encumbrances, and (ii) perfected
Liens (pursuant to the Uniform Commercial Code of the State of Delaware) in and
to all personalty, all in accordance with the terms thereof, in each case
subject only to any applicable Permitted Encumbrances.  The Loan Documents creating a security
interest in the Required Equity, upon the filing of a UCC financing statement
in the appropriate jurisdiction and/or delivery of the certificates evidencing
the securities included in the Collateral, create and constitute a valid and
perfected first priority Lien on the Required Equity, free and clear of all
Liens other than the Loan Permitted Encumbrances. The Permitted Encumbrances do
not and will not materially and adversely affect or interfere with the value,
or current use or operation, of the Mortgage Loan Collateral Properties, or the
security intended to be provided by the Mortgages and the Loan Documents
creating a security interest in the Required Equity or Borrower’s ability to
repay the Indebtedness in accordance with the terms of the Loan Documents.  Except as insured over by a Qualified Title
Insurance Policy, there are no claims for payment for work, labor or materials
affecting the Mortgage Loan Collateral Properties which are or may become a
Lien prior to, or of equal priority with, the Liens created by the Loan
Documents.  No creditor of any Borrower
other than Lender has in its possession any goods that constitute or evidence
the Collateral.

 

4.22.        No
Encroachments.  Except as shown on
the applicable Qualified Survey, all of the improvements on each Mortgage Loan
Collateral Property lie wholly within the

 

54

 

boundaries and building restriction lines of the such Mortgage Loan
Collateral Property, and no improvements on adjoining property encroach upon
any Mortgage Loan Collateral Property, and no easements or other encumbrances
upon any Mortgage Loan Collateral Property encroach upon any of the
improvements, so as, in either case, to adversely affect the value or
marketability of the applicable Mortgage Loan Collateral Property, except those
which are insured against by a Qualified Title Insurance Policy.  All of the improvements on each of the Other
Properties lie wholly within the boundaries and building restriction lines of
the such Other Properties, except to the extent that failure of any
improvements to lie wholly within such boundaries and building restriction
lines does not cause a Portfolio Material Adverse Effect; and no improvements
on adjoining property encroach upon any of the Other Properties, and no
easements or other encumbrances upon any of the Other Properties encroach upon
any of the improvements, so as, in either case, to cause a Portfolio Material
Adverse Effect.

 

4.23.        Physical
Condition.

 

(a)           Based
solely on the Engineering Reports, each Mortgage Loan Collateral Property
(including sidewalks, storm drainage system, roof, plumbing system, HVAC
system, fire protection system, electrical system, equipment, elevators,
exterior sidings and doors, irrigation system and all structural components) is
in good condition, order and repair in all respects material to its use,
operation or value.  Each Other  Property (including sidewalks, storm drainage
system, roof, plumbing system, HVAC system, fire protection system, electrical
system, equipment, elevators, exterior sidings and doors, irrigation system and
all structural components) is in good condition, order and repair in all
respects material to its use, operation or value, except to the extent that the
failure of such Other Property to be in good condition, order and repair does
not result in a Portfolio Material Adverse Effect.

 

(b)           Based
solely on the Engineering Reports, Borrower is not aware of any material
structural or other material defect or damages in any of the Mortgage Loan
Collateral Properties, whether latent or otherwise.  Borrower is not aware of any material
structural or other material defect or damages in any of the Other Properties,
whether latent or otherwise, that would have a Portfolio Material Adverse
Effect.

 

(c)           No
Borrower has received or is aware of any other party’s receipt of written
notice from any insurance company or bonding company of any defects or
inadequacies in any of the Properties which would, alone or in the aggregate,
adversely affect in any material respect 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.

 

4.24.        Fraudulent
Conveyance.  Borrower has not entered
into the Transaction or any of the Loan Documents with the actual intent to hinder,
delay or defraud any creditor.  Borrower
has received reasonably equivalent value in exchange for its obligations under
the Loan Documents. On the Closing Date, the fair salable value of each
Borrower’s aggregate assets is and will, immediately following the making of
the Loan and the use and disbursement of the proceeds thereof, be greater than
such Borrower’s probable aggregate liabilities (including subordinated,
unliquidated, disputed and Contingent Obligations).  Each Borrower’s aggregate assets do not and,
immediately following the making of the Loan and the use and disbursement of
the proceeds thereof will not, constitute unreasonably small capital to carry
out its business as

 

55

 

conducted or as proposed to be conducted.  No Borrower intends to, and does not believe
that it will, incur debts and liabilities (including Contingent Obligations and
other commitments) beyond its ability to pay such debts as they mature (taking
into account the timing and amounts to be payable on or in respect of
obligations of such Borrower).

 

4.25.        Management.  Except for any Approved Management Agreement,
no property management agreements are in effect with respect to the Properties,
other than sub-management agreements entered into in accordance with the terms
of the Approved Management Agreements.

 

4.26.        Condemnation.  Except as listed on the Exception Report, no
Condemnation has been commenced or is contemplated with respect to all or any
material portion of any of the Mortgage Loan Collateral Properties or for the
relocation of roadways providing access to any of the Mortgage Loan Collateral
Properties or, to Borrower’s knowledge, is contemplated with respect to all or
any material portion of any of the Other Properties or for the relocation of
roadways providing access to any of the Other Properties.

 

4.27.        Utilities
and Public Access.  Each  Property has adequate rights of access to
dedicated public ways (and makes no material use of any means of access or
egress that is not pursuant to such dedicated public ways or recorded,
irrevocable rights-of-way or easements) and is adequately served by all public
utilities necessary to the continued use and enjoyment of such Property as
presently used and enjoyed.

 

4.28.        Environmental
Matters.  Except as disclosed in the
Environmental Reports and except as disclosed on the Exception Report:

 

(i)            To
Borrower’s knowledge, each Property is in compliance in all material respects
with all Environmental Laws applicable to such Property (which compliance
includes, but is not limited to, the possession of, and compliance with, all
environmental, health and safety permits, approvals, licenses, registrations
and other governmental authorizations required in connection with the ownership
and operation of such Property under all Environmental Laws).

 

(ii)           No
Environmental Claim is pending with respect to any of the Properties, nor, to
Borrower’s knowledge, is any threatened, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to any Borrower or any of the Properties.

 

(iii)          Without
limiting the generality of the foregoing, to Borrower’s knowledge, there is not
present at, on, in or under any Property, any Hazardous Substances,
PCB-containing equipment, asbestos or asbestos containing materials,
underground storage tanks or surface impoundments for any Hazardous Substance,
lead in drinking water (except in concentrations that comply with all
Environmental Laws), or lead-based paint, in each case in violation of
Environmental Law.

 

56

 

(iv)          To
Borrower’s knowledge, there have not been and are no past, present or
threatened Releases of any Hazardous Substance from or at any of the Properties
that are reasonably likely to form the basis of any Environmental Claim, and,
to Borrower’s knowledge, there is no threat of any Release of any Hazardous Substance
migrating to any of the Properties.

 

(v)           To
Borrower’s knowledge, no Liens are presently recorded with the appropriate land
records under or pursuant to any Environmental Law with respect to any of the
Properties and, to Borrower’s knowledge, no Governmental Authority has been
taking any action to subject any of the Properties to Liens under any
Environmental Law.

 

(vi)          To
Borrower’s knowledge, there  have been no
material environmental investigations, studies, audits, reviews or other
analyses conducted by or that are in the possession of Borrower in relation to
any of the Properties which have not been made available to Lender.

 

4.29.        Assessments.  There are no pending or, to Borrower’s
knowledge, proposed special or other assessments for public improvements or
otherwise affecting any of the Properties, nor are there any contemplated
improvements to any of the Properties that may result in such special or other
assessments.  No extension of time for
assessment or payment by Borrower of any federal, state or local tax is in
effect.

 

4.30.        No
Joint Assessment.  No Borrower has
suffered, permitted or initiated the joint assessment of any of the Properties (i) with
any other real property constituting a separate tax lot, or (ii) with any
personal property, or any other procedure whereby the Lien of any Taxes which
may be levied against such other real property or personal property shall be
assessed or levied or charged to any of the Properties as a single Lien.

 

4.31.        Separate
Lots.  No portion of any of the
Properties is part of a tax lot that also includes any real property that is
not Collateral.

 

4.32.        Permits;
Certificate of Occupancy.  Borrower
has obtained all material Permits necessary for the present and contemplated
use and operation of each Property and that Borrower is obligated to obtain
under Legal Requirements.  The permitted
uses set forth in the Leases are in conformity in all material respects with
the certificate of occupancy and/or material Permits for such Property and any
other restrictions, covenants or conditions affecting such Property and, to
Borrower’s knowledge, the actual uses being made of each Property are in
conformity in all material respects with the certificate of occupancy and/or
Permits for such Property and any other restrictions, covenants or conditions
affecting such Property, in each case where non-conformity would not have a
Material Adverse Effect.

 

4.33.        Flood
Zone.  None of the Improvements on
any of the Properties is located in an area identified by the Federal Emergency
Management Agency or the Federal Insurance Administration as a “100 year flood
plain” or as having special flood hazards (including Zones A, B, C, V and X and
Shaded X areas), or, to the extent that any portion of any of the Properties is
located in such an area, such Property is covered by flood insurance meeting
the requirements set forth in Section 5.15(a)(ii).

 

57

 

4.34.        Security
Deposits.  Each Borrower is in
compliance in all material respects with all Legal Requirements relating to
security deposits.

 

4.35.        Acquisition
Documents.  Borrower has made
available to Lender true and complete copies of all material agreements and
instruments under which Borrower or any of its Affiliates or the seller of any
of the Properties have remaining material rights or material obligations in
respect of Borrower’s acquisition of the Properties.

 

4.36.        Insurance.  Except with respect to the Properties subject
to a Net Lease, Borrower has obtained insurance policies reflecting the
insurance coverages, amounts and other requirements set forth in this
Agreement.  All premiums on such
insurance policies required to be paid as of the Closing Date have been paid
for the current policy period.  Borrower
has not done, and to Borrower’s knowledge, no other Person has done, by act or
omission, anything which would impair the coverage of any such policy.

 

4.37.        Ground
Leased Parcels.  With respect to each
Ground Leased Parcel, each of the following is true with respect to the related
Ground Lease (taking into account the terms of any applicable estoppel letter):

 

(i)            true and complete
copies of the Ground Leases have been delivered to Lender, and except as set
forth in the Exception Report the Ground Leases or memoranda thereof have been
duly recorded;

 

(ii)           to Borrower’s
knowledge, the Ground Leases are in full force and effect and no material
default beyond applicable grace, cure or notice periods has occurred thereunder
nor, to Borrower’s knowledge, is there any existing condition which, but for
the passage of time or the giving of notice or both, would result in a material
default under the terms of any of the Ground Leases;

 

(iii)          except as set forth in
the Exception Report, the Ground Leases have original terms which extend not
less than 30 years beyond the Maturity Date (assuming the exercise of all
extension options hereunder), taking into account any extension options that
are freely exercisable by the lessee under the Ground Lease, and all such
extension options have either been previously exercised or are first
exercisable not less than five years after the Maturity Date;

 

(iv)          except as set forth in
the Exception Report, the Ground Leases do not restrict the use of any portion
of the Properties by the lessee, its successors or its assigns in a manner that
would cause a Material Adverse Effect;

 

(v)           except as set forth in
the Exception Report, the Ground Leases permit the interest of the lessee
thereunder to be encumbered by leasehold mortgages and contains no restrictions
on the identity of a leasehold mortgagee;

 

(vi)          except as set forth in
the Exception Report, the Ground Leases may not be amended, modified, cancelled
or terminated without the prior written consent of a leasehold mortgagee;

 

58

 

(vii)         with respect to the
Mortgage Loan Collateral Properties, to Borrower’s knowledge, other than
Permitted Encumbrances, the Ground Leases are not subject to any Liens or
encumbrances superior to, or of equal priority with, the Mortgage (other than
the ground lessor’s fee interest);

 

(viii)        with respect to the
Mortgage Loan Collateral Properties, to Borrower’s knowledge, other than
Permitted Encumbrances, there are no Liens encumbering the ground lessor’s fee
interests, and, except as permitted herein, Borrower shall not permit or cause
any Lien to become superior to the Ground Lease upon the related fee interest
that may hereafter be granted;

 

(ix)           except as set forth in
the Exception Report, the Ground Leases are assignable by a holder of a
leasehold mortgage upon a foreclosure of such mortgage without the consent of
the lessor thereunder;

 

(x)            except as set forth in
the Exception Report, the Ground Leases require the lessor thereunder to give
notice of any default by the lessee to a holder of a leasehold mortgage; and
the Ground Leases further provide that no notice given thereunder is effective
against such holder, unless a copy has been given to such holder in the manner
described in such Ground Lease;

 

(xi)           except as set forth in
the Exception Report, a holder of a leasehold mortgage is permitted at least 30
days in addition to Borrower’s applicable cure period to cure any default under
each of the Ground Leases which is curable after the receipt of notice of any
such default before the lessor thereunder may terminate such Ground Lease (and,
where necessary, is permitted the opportunity to gain possession of the
interest of the lessee under such Ground Lease through legal proceedings or to
take other action so long as such holder is proceeding diligently);

 

(xii)          except
as set forth in the Exception Report, in the case of any default which is not
curable by a holder of a leasehold mortgage, or in the event of the bankruptcy
or insolvency of the lessee under one of the Ground Leases, such holder has the
right, following termination of such existing Ground Lease or rejection thereof
by a bankruptcy trustee or similar party, to enter into a new ground lease with
the lessor on the same terms as such existing Ground Lease, and all rights of
the lessee under such Ground Lease may be exercised by or on behalf of such
holder; and

 

(xiii)         except as set forth in
the Exception Report, the Ground Leases do not impose any restrictions on
subletting.

 

4.38.        Intentionally
Omitted.

 

4.39.        Estoppel
Certificates.  Borrower has delivered
to Lender true and complete copies of (a) the form(s) of estoppel
certificate heretofore sent by Borrower or an Affiliate to Tenants and lessors
under Ground Leases, and (b) each estoppel certificate received back from
any such Tenant or lessor prior to the Closing Date.

 

59

 

4.40         Embargoed
Person.  (a) None of the funds or other assets of
any of Borrower, any Single-Purpose Equityholder or Sponsor constitute property
of, or, to Borrower’s knowledge, are beneficially owned, directly or
indirectly, by any person, entity or government subject to trade restrictions
under federal law, including, without limitation, the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with
the Enemy Act, 50 U.S.C. App. 1 et seq. , and any executive orders or
regulations promulgated thereunder, with the result that (i) the
investment in any Borrower, any Single-Purpose Equityholder or Sponsor, as
applicable (whether directly or indirectly), is prohibited by law or (ii) the
Loan is in violation of law (any such person, entity or government, an “Embargoed
Person”); (b) to Borrower’s knowledge, no Embargoed Person has any
interest of any nature whatsoever in any Borrower, any Single-Purpose
Equityholder or Sponsor, as applicable (whether directly or indirectly), with
the result that (i) the investment in any Borrower, any Single-Purpose
Equityholder or Sponsor, as applicable (whether directly or indirectly) is
prohibited by law or (ii) the Loan is in violation of law and (c) to
Borrower’s knowledge, none of the funds of any Borrower, any Single-Purpose
Equityholder or Sponsor, as applicable, have been derived from any unlawful
activity with the result that (i) the investment in any Borrower, any
Single-Purpose Equityholder or Sponsor, as applicable (whether directly or
indirectly) is prohibited by law or (ii) the Loan is in violation of
law.  Notwithstanding Section 4.42
to the contrary, the representations and warranties contained in this Section 4.40
shall survive in perpetuity.

 

4.41         Compliance
with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws.  Each Borrower, and to Borrower’s knowledge, (a) each
Person owning an interest in any Borrower, any Single-Purpose Equityholder or
Sponsor, (b) each Single-Purpose Equityholder, if any, (c) Sponsor,
and (d) each property manager (including each Approved Property Manager): (i) is
not currently identified on the OFAC List and (ii) is not a Person with
whom a citizen of the United States is prohibited to engage in transactions by
any trade embargo, economic sanction, or other prohibition of any Legal
Requirement.  Borrower has implemented
procedures, and will consistently apply those procedures throughout the term of
the Loan, to ensure the foregoing representations and warranties remain true
and correct during the term of the Loan.

 

4.42.        Tax
Basis.  After giving effect to the
Transaction and certain other actions related thereto that will be completed on
or prior to the Closing Date, the U.S. Federal Income tax basis of the
Stepped-Up Properties (as defined below) will be increased in an aggregate
amount equal to the portion of the acquisition cost under the Merger Agreement
allocable to such Stepped-Up Properties on a pro rata basis, which
allocation shall be based on the ratio of the fair market value of such
Stepped-Up Properties to the fair market value of the total acquisition
cost.  For purposes of this Section 4.42,
the term “Stepped-Up Properties” means properties other than those held
through partnerships or other similar joint ventures with third parties not
related to AFRT.

 

4.43.        Survival.  Borrower agrees that all of the
representations of Borrower set forth in this Agreement and in the other Loan
Documents shall survive for so long as any portion of the Indebtedness is
outstanding.  All representations,
covenants and agreements made by Borrower in this Agreement or in the other
Loan Documents shall be deemed to have been relied upon by Lender notwithstanding
any investigation heretofore or hereafter made by Lender or on its behalf.  On the date of any Securitization, on not
less than 10 Business Days’ prior written

 

60

 

notice, Borrower shall deliver to Lender a certification (x) confirming
that all of the representations contained in this Agreement are true and
correct in all material respects as of the date of such Securitization, or (y) otherwise
specifying any changes in or qualifications to such representations as of such
date as may be necessary to make such representations consistent in all
material respects with the facts as they exist on such date.  Except as expressly required by this
Agreement and the other Loan Documents, Borrower shall have no further
obligation to update any representation or warranty nor shall any
representation or warranty be deemed to have been made on any date other than
the Closing Date or as of the date of any Securitization.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

5.1.          Existence.  Each Borrower, each Property Owner and, if
applicable, each Single-Purpose Equityholder shall do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
existence and all rights, licenses, Permits, franchises and other agreements
necessary for the continued use and operation of its business.  Each Borrower and, if applicable, each
Single-Purpose Equityholder shall deliver to Lender a copy of each amendment or
other modification to any of its organizational documents promptly after the
execution thereof.

 

5.2.          Maintenance
of Properties.

 

(a)           Borrower
or its designee will keep or cause each Property to be kept in good working
order and repair, reasonable wear and tear excepted.  Subject to Section 6.13, the
rights and obligations of Tenants under Leases and with respect to any
Encumbered Property, the provisions of any Encumbered Property Debt Documents,
Borrower shall from time to time make, or cause to be made, all reasonably
necessary and desirable repairs, renewals, replacements, betterments and
improvements thereto.

 

(b)           Subject
to the terms of any applicable Leases, if and to the extent reasonably required
by Lender, Borrower shall remediate the Deferred Maintenance Conditions
reasonably promptly following the Closing Date, subject to Force Majeure, and
upon request from Lender after the expiration of such period shall deliver to
Lender an Officer’s Certificate confirming that such remediation has been
substantially completed and that all associated expenses then due and payable
have been paid; provided that Borrower shall be deemed to have satisfied its
obligations hereunder with respect to any matter that is the obligation of a
Tenant under a Lease if Borrower shall be using commercially reasonable efforts
to cause such Tenant to complete such matter pursuant to the terms of such
Lease.

 

5.3.          Compliance
with Legal Requirements.  Borrower
shall comply with, and shall cause each Property to comply with and be
operated, maintained, repaired and improved in compliance in all material
respects with, all Legal Requirements, Insurance Requirements and all material
contractual obligations by which Borrower is legally bound.

 

5.4.          Impositions and Other
Claims.  Each Borrower shall pay and
discharge, or cause to be paid and discharged, all taxes, assessments and governmental
charges levied upon it,

 

61

 

its income and its assets and the Properties prior to delinquency, as
well as all lawful claims for labor, materials and supplies or otherwise,
subject to any rights to contest contained in the definition of Permitted
Encumbrances.  Each Borrower shall file
or cause to be filed all federal, state and local tax returns and other reports
that it or its subsidiaries are required by law to file.  If any law or regulation applicable to
Lender, any Note, any of the Mortgage Loan Collateral Properties or any of the
Mortgages is enacted that deducts from the value of property for the purpose of
taxation any Lien thereon, or imposes upon Lender the payment of the whole or
any portion of the taxes or assessments or charges or Liens required by this
Agreement to be paid by Borrower, or changes in any way the laws or regulations
relating to the taxation of mortgages or security agreements or debts secured
by mortgages or security agreements or the interest of the mortgagee or secured
party in the property covered thereby, or the manner of collection of such
taxes, so as to affect any of the Mortgages, the Indebtedness or Lender, then
Borrower, upon demand by Lender, shall pay such taxes, assessments, charges or
Liens, or reimburse Lender for any amounts paid by Lender.  If in the opinion of Lender’s counsel it
might be unlawful to require Borrower to make such payment or the making of
such payment might result in the imposition of interest beyond the maximum
amount permitted by applicable Law, Lender may elect to declare all of the
Indebtedness to be due and payable 90 days from the giving of written notice by
Lender to Borrower.

 

5.5.          Access
to Properties.  Subject to the rights
of Tenants under Leases, Borrower shall permit agents, representatives and
employees of Lender and the Servicer to inspect the Properties or any portion
thereof, and/or the books and records of Borrower, at such reasonable times as
may be requested by Lender upon reasonable advance notice.

 

5.6.          Cooperate
in Legal Proceedings.  Except with
respect to any claim by Borrower against Lender, Borrower shall cooperate fully
with Lender with respect to any proceedings before any Governmental Authority
which may in any way affect the rights of Lender hereunder or under any of the
Loan Documents and, in connection therewith, Lender may, at its election,
participate or designate a representative to participate in any such proceedings.

 

5.7.          Leases.

 

(a)           Upon
Lender’s request, Borrower shall furnish Lender with executed copies of all
Leases, together with a detailed breakdown of income and cost associated
therewith to the extent the same has been prepared by Borrower.  All new Leases and renewals or amendments of
Leases must be entered into on an arms-length basis with Tenants whose identity
and creditworthiness, in Borrower’s good faith judgment, is appropriate for
tenancy in property of comparable quality, must provide for rental rates and
other economic terms which, in Borrower’s good faith judgment, taken as a
whole, are at least equivalent to then-existing market rates, based on the
applicable market, and must contain terms and conditions that are commercially
reasonable (in each case, unless Lender consents to such Lease in its sole
discretion).  Subject to the terms of the
Encumbered Property Debt Documents, all new Leases must provide that they are
subject and subordinate to any current or future mortgage financing on the
applicable Property and that the Tenant agrees to attorn to any foreclosing
mortgagee at such mortgagee’s request, provided such mortgagee agrees to not
disturb such Tenant’s tenancy except in accordance with its Lease.

 

62

 

(b)           All new
Leases which are Major Leases, and all terminations, renewals and material
amendments of Major Leases, and any surrender of rights under any Major Lease,
shall be subject to the prior written consent of Lender, which consent shall
not be unreasonably withheld, conditioned or delayed.  To facilitate Borrower’s leasing process,
Borrower shall have the right to present prospective leasing transactions to
Lender for its approval prior to the negotiation of a final Lease.  Such presentation shall include a summary
term sheet of all material terms of the proposed Lease or a draft of the
proposed Lease together with any additional information concerning such
proposed Lease and the proposed Tenant thereunder as may be reasonably
requested by Lender (the “Lease
Term Sheet”).  Each
request for approval of a Lease or a Lease Term Sheet shall be submitted to
Lender in an envelope marked “URGENT – LENDER’S ATTENTION REQUIRED WITHIN 7
BUSINESS DAYS”, together with (i) a copy of the proposed Lease or the
Lease Term Sheet, (ii) a summary of the economic terms thereof and any
termination options contained therein together with a detailed breakdown of
income and costs associated with the proposed Lease, and (iii) copies of
all written materials obtained by the applicable Borrower in connection with
its evaluation of the creditworthiness of the proposed Tenant, and shall be
deemed approved if Lender shall not have notified Borrower in writing of its
disapproval thereof and the reasons for such disapproval within three Business
Days after Borrower shall have given Lender written notice confirming that at
least seven Business Days have elapsed since such submission, which written
notice shall be submitted to Lender in an envelope marked “URGENT – SECOND AND
FINAL NOTICE – LENDER’S ATTENTION REQUIRED BY [DATE]”.  If Lender approves or is deemed to have
approved the Lease Term Sheet, Lender’s approval of the final Lease shall be
limited to Lender’s reasonable confirmation that the final Lease does not (i) deviate
in any material adverse respect from the terms set forth on the Lease Term
Sheet or contain any material adverse terms not set forth in the Lease Term
Sheet, or (ii) deviate in any material respect from the approved Lease
form (and otherwise such final Lease shall be subject to Lender’s reasonable
written approval).  Borrower shall
deliver to Lender a copy of any Lease executed pursuant to a Lease Term Sheet
together with an Officer’s Certificate indicating any material deviations from
such Lease Term Sheet.

 

(c)           Borrower
shall (i) observe and perform all the material obligations imposed upon
the lessor under the Leases; (ii) enforce, to the extent commercially
reasonable,  all of the material terms,
covenants and conditions contained in the Leases on the part of the lessee
thereunder to be observed or performed, short of termination thereof, except
that Borrower may terminate any Lease following a material default thereunder
by the respective Tenant; (iii) not collect any of the rents thereunder
more than one month in advance; (iv) not execute any assignment of lessor’s
interest in the Leases or associated rents other than the assignments of rents
and leases under the Mortgages and the Encumbered Debt Documents; and (v) not
cancel or terminate any guarantee of any of the Major Leases without the prior
written consent of Lender.  Borrower
shall deliver to each new Tenant at a Mortgage Loan Collateral Property a
Tenant Notice upon execution of such Tenant’s Lease or include same in such
Tenant’s Lease or invoices, and promptly thereafter deliver to Lender a copy
thereof and evidence of such Tenant’s receipt thereof.

 

(d)           To the
extent required by applicable law, security deposits of Tenants under all
Leases, whether held in cash or any other form, shall not be commingled with
any other funds of Borrower and, if cash, shall be deposited by Borrower in an
Eligible Account or such other account at such commercial or savings bank as
may be reasonably satisfactory to Lender,

 

63

 

which account (if any) is hereby pledged to Lender.  Borrower shall, upon Lender’s request,
provide Lender with evidence reasonably satisfactory to Lender of Borrower’s
compliance with the foregoing.  During
the continuance of any Event of Default, subject to the Encumbered Property
Debt Documents, Borrower shall, upon Lender’s request, deposit with Lender in
an Eligible Account pledged to Lender an amount equal to the aggregate security
deposits of the Tenants (and any interest theretofore earned on such security
deposits and actually received by Borrower) which Borrower had not returned to
the applicable Tenants or applied in accordance with the terms of the
applicable Lease.

 

(e)           Whenever
a Lease at a Mortgage Loan Collateral Property is terminated, whether by
buy-out, cancellation, default or otherwise, and Borrower is entitled to any
payment, fee or penalty in respect of such termination, Borrower shall promptly
cause such payment, fee or penalty to be deposited into an Eligible Account
pledged to Mortgage Lender in accordance with the Mortgage Loan Agreement.  Subject to the terms of the Encumbered
Property Debt Documents, whenever a Lease at an Other Property is terminated,
whether by buy-out, cancellation, default or otherwise, and Borrower or a
Property Owner is entitled to any payment, fee or penalty in respect of such
termination (a “Termination Fee”), Borrower shall promptly cause such
Termination Fee to be deposited into an Eligible Account pledged to
Lender.  Provided no Event of Default has
occurred and is continuing, (i) Lender shall disburse such Termination Fee
to Borrower at the written request of Borrower in respect of Leasing
Commissions and Tenant Improvement costs incurred by Borrower in connection
with replacement Leases at any Properties other than Value Add Pool Properties,
Disposition Asset Properties or any Property with an Aggregate Allocated Loan
Amount of zero, in each case provided such Lease is entered into in accordance
with the terms of this Agreement.

 

(f)            Within
ten Business Days after receipt of written request therefor, provided Lender
has received a copy of the executed corresponding Lease, Lender shall execute
and deliver to Borrower a subordination, non-disturbance and attornment
agreement (an “SNDA”).  If the form of the SNDA shall be prescribed
by the Lease in question, and Lender shall have approved (or been deemed, in
accordance with Section 5.7(b) hereof,
to have approved) such Lease (and the form of SNDA was attached to the draft
Lease that was delivered to Lender as part of Borrower’s request for approval),
Lender shall execute and deliver the SNDA in the form prescribed by such
approved Lease.  Notwithstanding the
foregoing, in the case of any Lease as to which Lender’s approval is not
required pursuant to this Section 5.7
where such tenant thereunder requests an SNDA, the SNDA to be executed and
delivered by Lender shall be in substantially the form attached hereto as Exhibit G,
and such form shall also be attached to Borrower’s standard form of Lease as
approved by Lender.  Lender agrees to
reasonably negotiate the terms of the SNDA with any Tenant under any Lease, but
shall not be required to execute an SNDA that differs in any material respect
from the form attached hereto as Exhibit G.  All reasonable out-of-pocket attorneys’ fees
and disbursements incurred by Lender in connection with such SNDA shall be
payable by Borrower within ten Business Days after Lender’s written request
therefor, whether or not the SNDA is ultimately executed and/or recorded.

 

5.8.          Plan Assets, etc. 
Each Borrower will do, or cause to be done, all things  necessary to ensure that it will not be
deemed to hold Plan Assets at any time.

 

64

 

5.9.          Further
Assurances.  Each Borrower shall, at
such Borrower’s sole cost and expense, from time to time as reasonably
requested by Lender, execute, acknowledge, record, register, file and/or
deliver to Lender such other instruments, agreements, certificates and
documents (including Uniform Commercial Code financing statements and amended
or replacement mortgages) as Lender may reasonably request to evidence,
confirm, perfect and maintain the Liens securing or intended to secure the
obligations of Borrower under the Loan Documents or to facilitate a replacement
of the Cash Management Bank pursuant to Section 3.1(c) or a
bifurcation of the Note pursuant to Sections 1.3(c) and/or 9.7(a),
in each case if requested by Lender, and do and execute all such further lawful
and reasonable acts, conveyances and assurances for the better and more
effective carrying out of the intents and purposes of this Agreement and the
other Loan Documents as Lender shall reasonably request from time to time.  Each Borrower hereby authorizes and appoints
Lender as its attorney-in-fact to execute, acknowledge, record, register and/or
file such instruments, agreements, certificates and documents, and to do and
execute such acts, conveyances and assurances, should such Borrower fail to do
so itself in violation of this Agreement within 5 Business Days following
written request from Lender, in each case without the signature of such
Borrower.  The foregoing grant of
authority is a power of attorney coupled with an interest and such appointment
shall be irrevocable for the term of this Agreement.  Each Borrower hereby ratifies all actions
that such attorney shall lawfully take or cause to be taken in accordance with
this Section 5.9.  Lender
shall provide Borrower with copies on any instruments executed by Lender in
accordance with this Section 5.9.

 

5.10.        Management
of Properties.

 

(a)           Subject
to the terms of the Encumbered Property Debt Documents, each Property, other
than a Property that is entirely subject to a Lease under which the Tenant is
responsible for the management of the Property and liable for all related costs
thereunder, shall be managed at all times by an Approved Property Manager
pursuant to an Approved Management Agreement. 
Pursuant to the Subordination of Property Management Agreement or
Agreements, each Approved Property Manager shall agree that its Approved
Management Agreement and all fees thereunder (including any incentive fees) are
subject and subordinate to the Indebtedness. 
Borrower may from time to time appoint an Approved Property Manager to
manage the applicable Property pursuant to an Approved Management Agreement,
and such successor manager shall execute for Lender’s benefit a Subordination
of Property Management Agreement in form and substance reasonably satisfactory
to Lender (and Lender hereby agrees that a Subordination of Property Management
Agreement in substantially the same form as the Subordination of Property
Management Agreement delivered to Lender by Borrower as of the date hereof is
deemed to be reasonably satisfactory to Lender).  The per annum fees of the Approved Property
Manager (including any incentive fees) shall not, at any time, exceed 3.5% of
the gross revenues of the relevant Property for the then most recently
concluded Test Period.

 

(b)           Borrower
shall cause each Approved Property Manager (including any successor Approved
Property Manager) to maintain at all times worker’s compensation insurance as
required by Governmental Authorities.

 

(c)           Borrower
shall notify Lender in writing of any material default of any Borrower or an
Approved Property Manager under any of the Approved Management

 

65

 

Agreements, after the expiration of any applicable cure periods, of
which Borrower has actual knowledge. 
Lender shall have the right, after reasonable notice to Borrower and in
accordance with such Subordination of Management Agreement, to cure defaults of
Borrower under such Approved Management Agreement.  Any reasonable out-of-pocket expenses incurred
by Lender to cure any such default shall constitute a part of the Indebtedness
and shall be due from Borrower upon demand by Lender.

 

(d)           Subject
in the case of Encumbered Properties to the Encumbered Property Debt Documents,
and in the case of the Joint Venture Properties to their respective Qualified
Joint Venture Agreements, upon the occurrence and during the continuance of an
Event of Default, or a material default by an Approved Property Manager under
an Approved Management Agreement after the expiration of any applicable cure
period, which default is reasonably likely to result in a Material Adverse
Effect, or upon the filing of a bankruptcy petition or the occurrence of a
similar event with respect to an Approved Property Manager, Lender may, in its
sole discretion, require Borrower to terminate the Approved Management
Agreement and engage an Approved Property Manager selected by Lender to serve
as replacement Approved Property Manager pursuant to an Approved Management
Agreement.

 

5.11.        Notice of Material
Event.  Borrower shall give Lender
prompt notice (containing reasonable detail) of (i) any material change in
the financial or physical condition of any of the Properties taken as a whole,
as reasonably determined by Borrower, including the termination or cancellation
of any Major Lease, the termination or cancellation of terrorism or other
insurance required by this Agreement, the exercise of shedding, contraction or
termination rights under any Lease which Lease covers in excess of 125,000
rentable square feet or the accrual of such rights by any Tenant under any
Lease which Lease covers in excess of 125,000 rentable square feet, (ii) any
litigation or governmental proceedings pending or threatened in writing against
any Borrower which is reasonably likely to have a Portfolio Material Adverse
Effect, (iii) any notice by a lender asserting an event of default by an
Encumbered Property Owner or any of its Affiliates under any Encumbered
Property Debt Documents, (iv) any notice by Junior Mezzanine Lender of a
Junior Mezzanine Loan Event of Default and (v) any correspondence with
Tenants under Major Leases with respect to any alleged defaults by either party
thereunder.

 

5.12.        Annual Financial
Statements.  As soon as available,
and in any event within 120 days after the close of each Fiscal Year, beginning
with the 2008 Fiscal Year Borrower shall furnish to Lender, in an Excel
spreadsheet file in electronic format (which may be via an intralinks site at
Borrower’s sole cost and expense), or, in the case of predominantly text
documents, in Adobe .pdf format, a balance sheet of Borrower and (except to the
extent stock in Sponsor is publicly traded on a major stock exchange) Sponsor
as of the end of such year, which statements with respect to Borrower shall be
on a consolidated basis with respect to the Properties as a whole, together
with related consolidated statements of income for such Fiscal Year, which
statements shall include an attached schedule of Net Operating Income, gross
carrying value and accumulated depreciation, each on an individual property
basis, audited by an Approved Accounting Firm whose opinion shall be to the
effect that such financial statements have been prepared in accordance with
GAAP applied on a consistent basis and shall not be qualified as to the scope
of the audit or as to the status of Borrower as a going concern.  Together

 

66

 

with Borrower’s annual financial statements, Borrower shall furnish to
Lender in hard copy and electronic format:

 

(i)            then current rent roll
and occupancy reports of the Properties;

 

(ii)           to the extent not
otherwise described in this Section 5.12, copies of all financial
statements and similar reports delivered to Encumbered Property Lenders; and

 

(iii)          such other information
as Lender shall reasonably request, to the extent readily available to Borrower
or Sponsor without material cost or expense.

 

Notwithstanding
the foregoing, for so long as Lender is required on advice of Lender’s counsel
to include the same in Lender’s public filings with the Securities and Exchange
Commission, in addition to the foregoing, Borrower shall furnish to Lender,
within 75 days following the close of each Fiscal Year, an unaudited balance
sheet of Borrower for the Fiscal Year then ended, which statement shall include
a balance sheet of Borrower as of the end of such year, which statement shall
be on a consolidated basis with respect to Borrower and the Properties as a
whole, together with the related statement of income for such Fiscal Year,
which statements shall be accompanied by an Officer’s Certificate certifying
that the same are true and correct and were prepared in accordance with GAAP
and on a consistent basis, subject to changes resulting from audit and normal
year-end audit adjustments.

 

5.13.        Quarterly
Financial Statements.  As soon as
available, and in any event within 60 days after the end of each Fiscal Quarter
(including year-end), Borrower shall furnish to Lender, in an Excel spreadsheet
file in electronic format (which may be via an intralinks site at Borrower’s
sole cost and expense), or, in the case of predominantly text documents, in
Adobe .pdf format, quarterly and year-to-date an unaudited balance sheet
prepared for such Fiscal Quarter with respect to Borrower and (except to the
extent stock in Sponsor is publicly traded on a major stock exchange) Sponsor,
which statements with respect to Borrower shall be on a consolidated basis with
respect to the Properties as a whole, together with related consolidated statements
of income, for such Fiscal Quarter and for the portion of the Fiscal Year
ending with such Fiscal Quarter, which statements shall include an attached
schedule of Net Operating Income, gross carrying value and accumulated
depreciation, each on an individual property basis, which statements shall be
accompanied by an Officer’s Certificate certifying that the same are true and
correct and were prepared in accordance with GAAP applied on a consistent
basis, subject to changes resulting from audit and normal year-end audit
adjustments.  Each such quarterly report
shall be accompanied by the following, in hard copy and electronic format:

 

(i)            a
statement which calculates Net Operating Income for each of the Fiscal Quarters
in the Test Period ending in such Fiscal Quarter, in the case of each such
Fiscal Quarter, ending at the end thereof;

 

(ii)           copies of
each of the Major Leases signed during such quarter and each other Lease signed
during such quarter that is requested by Lender, and a summary of each material
Lease (and, to the extent prepared by Borrower or Approved Property Manager in
the ordinary course of business, each other Lease) signed during such quarter,

 

67

 

which shall include the Tenant’s name, lease term, base rent, Tenant
Improvements, leasing commissions paid, free rent and other material tenant
concessions;

 

(iii)          then current rent
roll and occupancy reports;

 

(iv)          to the extent not
otherwise described in this Section 5.13, copies of all financial
statements and similar reports delivered to Encumbered Property Lenders;

 

(v)           a copy of AFRT’s
business plan, to the extent updated after the date hereof; and

 

(vi)          such other
information as Lender shall reasonably request, to the extent readily available
to Borrower or Sponsor without material cost or expense.

 

Notwithstanding the foregoing, for so long as Lender
is required on advice of Lender’s counsel to include the same in Lender’s
public filings with the Securities and Exchange Commission,  Borrower shall provide the financial
statements required pursuant to the immediately preceding paragraph within 43
days following the end of each Fiscal Quarter (excluding year-end).

 

5.14.        Monthly Financial Statements.  If requested by Lender or during an Event of
Default (or, in the case of item (iv) below, at all times), Borrower shall
furnish within 30 days after the end of each calendar month (other than the
calendar month immediately following the final calendar month of any Fiscal
Year or Fiscal Quarter, in which case Borrower shall furnish same within the
respective time period specified in Section 5.12 or 5.13, as
applicable), in an Excel spreadsheet file in electronic format (which may be
via an intralinks site at Borrower’s sole cost and expense) or, in the case of
predominantly text documents, in Adobe .pdf format, monthly and year-to-date
unaudited financial statements prepared for the applicable month with respect
to Borrower, including a balance sheet and operating statement as of the end of
such month, together with related statements of income, for such month and for
the portion of the Fiscal Year ending with such month, which statements shall
be accompanied by an Officer’s Certificate certifying that the same are true
and correct and were prepared in accordance with GAAP applied on a consistent
basis, subject to changes resulting from audit and normal year-end audit
adjustments.  Each such monthly report
shall be accompanied by the following:

 

(i)            beginning with the
calendar month ending June 30, 2008, a summary of material Leases (and, to
the extent prepared by Borrower or Approved Property Manager in the ordinary
course of business, each other Lease) signed during such month, which summary
shall include the Tenant’s name, lease term, base rent, escalations, Tenant
Improvements, leasing commissions paid, free rent and other concessions;

 

(ii)           then current rent
roll and occupancy reports;

 

(iii)          to the extent not
otherwise described in this Section 5.14, copies of all financial
statements and similar reports delivered to Encumbered Property Lenders; and

 

(iv)          such other
information as Lender shall reasonably request, to the extent readily available
to Borrower or Sponsor without material cost or expense.

 

68

 

5.15.        Insurance.

 

(a)           Borrower shall obtain and maintain with respect to the Properties, for
the mutual benefit of Borrower and Lender at all times, the following policies
of insurance:

 

(i)            insurance against loss or damage by
standard perils included within the classification “All Risks Special Form Cause
of Loss” (including coverage for damage caused by windstorm and hail).  Such insurance shall (A) be in an
aggregate amount equal to the full replacement cost of the Properties and
fixtures (without deduction for physical depreciation); (B) have
deductibles acceptable to Lender (but in any event not in excess of $50,000), with the exception of flood coverage which may have a
deductible no greater than $500,000 and with the exception of wind and earthquake
coverage which may have a deductible no greater than 5% of the total insurable
value of the applicable Property; (C) be paid annually in advance; (D) contain
a “Replacement Cost Endorsement” and an “Agreed Upon Amount Endorsement” with a
waiver of coinsurance; (E) include an ordinance or law coverage
endorsement containing Coverage A: “Loss to the Undamaged Portion”, Coverage B: “Demolition Cost” and Coverage C: “Increased
Cost of Construction” coverages  in such
amounts as Lender may reasonably require but in no event less than a
$50,000,000 blanket sublimit, unless a Property is insured separately, in which
case the sublimit applicable thereto shall not exceed 10% of the replacement
cost of such Property; (F) permit that the improvements and other property
covered by such insurance be rebuilt at another location in the event that such
improvements and other property cannot be rebuilt at the location on which they
are situated as of the date hereof.   If
such insurance excludes mold, then the Borrowers shall implement a mold
prevention program satisfactory to Lender;

 

(ii)           Flood insurance if the Property is
located in a “100 Year Flood Plain” or “special hazard area” (including Zones
A, B, C, V, X and Shaded X Areas) in an amount equal to the maximum limit of
coverage available from FEMA/FIA, plus such excess limits requested by Lender  to the extent
available in the conventional insurance marketplace, with a deductible not in
excess of $500,000;

 

(iii)          commercial general liability insurance, including broad form coverage
of property damage, blanket contractual liability and personal injury
(including death resulting therefrom), containing minimum limits per occurrence
of not less than $1,000,000 with not less than a $2,000,000 general aggregate “per location” for any policy year.  In addition, at least $100,000,000 excess or
umbrella liability insurance,  unless a
Property is insured separately, in which case the limits applicable thereto
shall not be less than $25,000,000, on terms consistent with the commercial
general liability insurance policy required under this Section 5.15,
shall be obtained and maintained for any and all claims, including all legal
liability imposed upon Borrower and all related court costs and attorneys’ fees
and disbursements, in accordance with the policy form inclusive of contractual
liability;

 

(iv)          rental loss and/or business interruption
insurance covering the 18 month period commencing on the date of any Casualty
or Condemnation, and containing an extended period of indemnity endorsement
covering the 12 month period commencing on 

 

69

 

the date on which the applicable Property has been restored, as
reasonably determined by the applicable insurer.  The amount of such insurance shall be
increased from time to time as and when the gross revenues from such Property
increase;

 

(v)           insurance against loss or damage from
explosion of steam boilers, air conditioning equipment, high pressure piping,
machinery and equipment, pressure vessels or similar apparatus now or hereafter
installed in any of the Improvements (without exclusion for explosions) and
insurance against loss of occupancy or use arising from any breakdown, in such
amounts as are generally available and are generally required by institutional
lenders for properties comparable to the Properties;

 

(vi)          if applicable, worker’s compensation insurance with
respect to all employees of Borrower as and to the extent required by any
Governmental Authority or Legal Requirement and employer’s liability coverage
of at least $1,000,000;

 

(vii)         during any period of repair, alteration or restoration, and only if and
to the extent the property and liability policies acquired by Borrower pursuant
hereto do not contain such coverage, (A) owner’s contingent or protective
liability insurance; and (B) the insurance required pursuant to Section 5.15(i) and
(iv) written on a so-called builder’s risk completed value form,
which coverage shall (1) be on a non-reporting form, (2) cover any
improvements under construction, being renovated or otherwise being altered,
including coverage for 100% of the total hard and reoccurring soft construction
costs following a casualty, (3) include permission to occupy the
applicable Property and  (4) be in
an amount equal to not less than the full insurable value of each of the
Properties against such risks (including fire and extended coverage and
collapse of the Improvements to agreed limits) as Lender may request, all of
which shall be in form and substance acceptable to Lender;

 

(viii)        [Intentionally
Deleted]

 

(ix)           if required by Lender, earthquake
insurance (A) with minimum coverage equivalent to the greater of  1.0x SUL (scenario upper loss) and 1.5x SEL
(scenario expected loss), (B) having a deductible approved by Lender (but
in any event not be in excess of 5% of the total insurable value of such
Property, unless such limit is not commercially available in the insurance
marketplace), and (C) if the Property is legally nonconforming under
applicable zoning ordinances and codes, containing ordinance of law coverage in
amounts reasonably acceptable to Lender;

 

(x)            so long as the Terrorism Risk Insurance
Program Reauthorization Act of 2007 (“TRIPRA”) or a similar or
subsequent statute is in effect, terrorism insurance for Certified and
Non-Certified acts (as such terms are defined in TRIPRA or similar or
subsequent statute) in an amount equal to the full replacement cost of the
Properties (plus twelve months of business interruption coverage).  If TRIPRA or a similar or subsequent statute
is not in effect, then provided that terrorism insurance is commercially
available, Borrower shall be required to carry terrorism insurance throughout
the term of the Loan as required by the preceding sentence, but in such event
Borrower shall not be required to spend on terrorism insurance coverage more
than 150% of the amount of the insurance 

 

70

 

premium that is payable at such time in respect of the casualty and
business interruption/rental loss insurance required hereunder (without giving
effect to the cost of terrorism and earthquake components of such casualty and
business interruption/rental loss insurance); and

 

(xi)           such other insurance as may from time to time be reasonably requested
by Lender.

 

(b)           All policies of insurance (the “Policies”) required pursuant to
this Section 5.15 shall be issued by one or more primary insurers
having a claims-paying ability of at least “A” or “A2” by each of the Rating
Agencies, or by a syndicate of insurers through which at least 75% of the
coverage (if there are 4 or fewer members of the syndicate) or at least 60% of
the coverage (if there are 5 or more members of the syndicate) is with carriers
having such claims-paying ability ratings (provided that the first layers of
coverage are from carriers rated at least “A” or “A2” and all such carriers
shall have claims-paying ability ratings of not less than “BBB+”  or “Baa1”); provided, however,
that FM Global and Affiliated FM are hereby approved as providers of the
all-risk coverage required hereunder in amounts not exceeding the respective
amounts provided as of the date hereof, to the extent that each maintains an AM
Best and Fitch rating no lower than that in effect as of the Closing Date.  Notwithstanding anything to the contrary
herein, except in connection with FM Global and Affiliated FM, for purposes of
determining whether the insurer ratings requirements set forth above have been
satisfied, (1) any insurer that is not rated by Fitch will be regarded as
having a Fitch rating that is the equivalent of the rating given to such
insurer by any of Moody’s and S&P that does rate such insurer (or, if both
such rating agencies rate such insurer, the lower of the two ratings), and (2) any
insurer that is not rated by Moody’s will be regarded as having a Moody’s
rating of “Baa1” or better if it is rated “A-” or better by S&P and will be
regarded as having a Moody’s rating of  “A2”
or better if it is rated “A+” or better by S&P.

 

(c)           All Policies required pursuant to this
Section 5.15:

 

(i)            shall be maintained throughout the term
of the Loan without cost to Lender;

 

(ii)           with respect to casualty policies, shall
contain a standard noncontributory mortgagee clause naming Lender and its
successors and assigns as first mortgagee and loss payee;

 

(iii)          with respect to liability policies, shall name Lender and its
successors and assigns as additional insureds;

 

(iv)          with respect to rental or business
interruption insurance policies, shall name Lender and its successors and/or
assigns as loss payee;

 

(v)           shall contain an endorsement providing
that neither Borrower nor Lender nor any other party shall be a coinsurer under
said Policies;

 

(vi)          shall contain an endorsement providing
that Lender shall receive at least 30 days’ prior written notice of any
modification, reduction or cancellation thereof;

 

71

 

(vii)         shall contain an endorsement providing that no act or negligence of
Borrower or of a Tenant or other occupant shall affect the validity or
enforceability of the insurance insofar as a mortgagee is concerned;

 

(viii)        shall contain a waiver of subrogation against Lender;

 

(ix)           shall contain an endorsement providing
that Lender shall not be liable for any insurance premiums thereon or subject
to any assessments thereunder;

 

(x)            shall contain deductibles which, in
addition to complying with any other requirements expressly set forth in Section 5.15(a),
are acceptable to Lender and are no larger than is customary for similar policies
covering similar properties in the geographic market in which the applicable
Property is located;

 

(xi)           may be in the form of a blanket policy,
provided that Borrower shall provide evidence satisfactory to Lender that the
insurance premiums for the Properties are separately allocated under such
Policy to the Properties and that (i) payment of such allocated amount
shall maintain the effectiveness of such Policy as to the Properties
notwithstanding the failure of payment of any other portion of premiums, and (ii) overall
insurance limits will under no circumstance limit the amount that will be paid
in respect of the Properties, and provided further that any such blanket policy
shall contain an amendment setting forth that (A) the aggregate limit
under such policy shall apply separately to each property covered thereunder,
and (B) unless otherwise agreed to by Lender, the limit of such policy
shall be a “true blanket limit” and not limited by a schedule of values for the
Properties covered thereby.

 

(d)           Borrower shall pay the premiums for all Policies as the same become due
and payable.  Copies of such Policies
shall be delivered to Lender promptly upon request.  Not later than 30 days prior to the
expiration date of each Policy, Borrower shall deliver to Lender evidence,
reasonably satisfactory to Lender, of its renewal.

 

(e)           Borrower shall not procure any other insurance coverage which would be
on the same level of payment as the Policies or would adversely impact in any
way the ability of Lender or Borrower to collect any proceeds under any of the
Policies.  If at any time Lender is not
in receipt of written evidence that all Policies are in full force and effect
when and as required hereunder, Lender shall have the right to take such action
as Lender deems necessary to protect its interest in the Properties, including,
without limitation, the obtaining of such insurance coverage as Lender in its
sole discretion deems appropriate (but limited to the coverages and amounts
required hereunder).  All premiums
incurred by Lender in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Borrower to Lender upon
demand and, until paid, and shall bear interest at the Default Rate.

 

(f)            Notwithstanding anything to the contrary
contained in this Section 5.15, (i) Lender hereby approves the
insurance program described on Exhibit E hereto and any renewal
thereof upon the same terms (subject to any increases in such coverage required
to reflect increased revenues and values), provided the insurers
maintain their current ratings as in effect on the Closing Date or otherwise
satisfy the requirements herein, (ii) with
respect to the 

 

72

 

Encumbered Properties, the provisions of
this Section 5.15 shall be subject to the applicable provisions of
the Encumbered Debt Documents and (iii) with respect to the Properties
subject to a Net Lease, to the extent Lender has received reasonably
satisfactory evidence of the insurance maintained by a Tenant under a Net
Lease, Borrower shall be deemed to have complied with the requirements of this Section 5.15
with respect to the Property subject to such Net Lease).  Promptly after the date hereof, Borrower
shall request and use commercially reasonable efforts to cause the Tenant under
each Net Lease to add Lender as an additional insured or loss payee (as
applicable) under such insurance, in each case if and to the extent permitted
thereunder.

 

5.16.        Casualty
and Condemnation.

 

(a)           Borrower
shall give prompt notice to Lender of any Casualty or Condemnation in excess of
$250,000.  Subject to the Encumbered
Property Debt Documents, Leases and each Qualified Joint Venture Agreement,
Lender may (x) jointly with Borrower settle and adjust any claims, (y) during
the continuance of an Event of Default, settle and adjust any claims without
the consent or cooperation of Borrower, or (z) allow Borrower to settle
and adjust any claims; except that if no Event of Default has occurred and is
continuing, Borrower may settle and adjust any claim not in excess of
$2,500,000 if such settlement or adjustment is carried out in a competent and
timely manner, but Lender shall be entitled to collect and receive (as set
forth below) any and all Loss Proceeds. 
The reasonable expenses incurred by Lender in the adjustment and
collection of Loss Proceeds shall become part of the Indebtedness and shall be
reimbursed by Borrower to Lender within 10 Business Days of demand therefor.

 

(b)           Subject,
where applicable, to the Encumbered Property Debt Documents, Qualified Joint
Venture Agreements, and any Leases, all Loss Proceeds shall be immediately
deposited into the Loss Proceeds Account (monthly rental loss/business
interruption proceeds to be initially deposited into the Loss Proceeds Account
and subsequently deposited into the Cash Management Account in installments as
and when the lost rental income covered by such proceeds would have been
payable).  Following the occurrence of a
Casualty, Borrower, regardless of whether proceeds are available, shall in a
reasonably prompt manner proceed to restore, repair, replace or rebuild the
applicable Property to be of at least equal value and of substantially the same
character as prior to the Casualty, all in accordance with the terms hereof
applicable to Alterations (unless such Property has been released in accordance
herewith).  If, at any Property, a
Condemnation or Casualty occurs as to which, in the reasonable judgment of
Lender:

 

(i)            in the case of a
Casualty, the cost of restoration would not exceed 25% of the applicable
Allocated Loan Amount and the Casualty does not render untenantable, or result
in the cancellation of Leases covering, more than 25% of the gross rentable
area of such Property, or result in cancellation of Leases covering more than
25% of the base contractual rental revenue of such Property;

 

(ii)           in the case of a
Condemnation, the Condemnation does not render untenantable, or result in the
cancellation of Leases covering, more than 15% of the gross rentable area of such
Property;

 

73

 

(iii)          restoration of such
Property is reasonably expected to be completed prior to the expiration of
rental interruption insurance and at least six months prior to the Maturity
Date; and

 

(iv)          after such restoration,
the fair market value of the restored Property is reasonably expected to equal
at least the fair market value of such Property immediately prior to such
Condemnation or Casualty (assuming the affected portion of such Property is relet);

 

or if Lender otherwise elects to allow Borrower to
restore such Property or if restoration of such Property is required under a
Major Lease or a Ground Lease, then, provided no Event of Default shall have
occurred and is continuing, the Loss Proceeds after receipt thereof by Lender
and reimbursement of any reasonable expenses incurred by Lender in connection
therewith shall be applied to the cost of restoring, repairing, replacing or
rebuilding such Property or part thereof subject to the Casualty or
Condemnation, in the manner set forth below (and Borrower shall commence as
promptly and diligently as reasonably practicable to prosecute such restoring,
repairing, replacing or rebuilding of such Properties in a workmanlike fashion
and in accordance with applicable law to a status at least equivalent to the
quality and character of such Properties immediately prior to the Condemnation
or Casualty or such other character and with such other alterations as is
reasonably consented to by Lender). 
Provided that no Event of Default shall have occurred and be then
continuing,  Lender shall disburse such
Loss Proceeds to Borrower upon Lender’s being furnished with (i) evidence
reasonably satisfactory to it of the estimated cost of completion of the
restoration, (ii) funds, or assurances reasonably satisfactory to Lender
that such funds are available and sufficient in addition to any remaining Loss
Proceeds, to complete the proposed restoration, and (iii) such architect’s
certificates, waivers of lien, contractor’s sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of cost, payment
and performance as Lender may reasonably request; and Lender may, in any event,
require that all plans and specifications for restoration reasonably estimated
by Lender to exceed $2,000,000 be submitted to and approved by Lender prior to
commencement of work (which approval shall not be unreasonably withheld).  If Lender reasonably estimates that the cost
to restore will exceed $2,000,000, Lender may retain a local construction
consultant to inspect such work and review Borrower’s request for payments and
Borrower shall, on demand by Lender, reimburse Lender for the reasonable fees
and expenses of such consultant (which fees and expenses shall constitute
Indebtedness).  No payment shall exceed
90% of the value of the work performed from time to time until such time as 50%
of the restoration (calculated based on the anticipated aggregate cost of the
work) has been completed, and amounts retained prior to completion of 50% of
the restoration shall not be paid prior to the final completion of the
restoration.  Funds other than Loss
Proceeds shall be disbursed prior to disbursement of such Loss Proceeds, and at
all times the undisbursed balance of such proceeds remaining in the Loss
Proceeds Account, together with any additional funds irrevocably and
unconditionally deposited therein or irrevocably and unconditionally committed
for that purpose, shall be at least sufficient in the reasonable judgment of
Lender to pay for the cost of completion of the restoration free and clear of
all Liens or claims for Lien.

 

(c)           Borrower
shall cooperate with Lender in obtaining for Lender the benefits of any Loss
Proceeds lawfully or equitably payable to Lender in connection with the
Properties.  Lender shall be reimbursed
for any expenses reasonably incurred in connection therewith 

 

74

 

(including reasonable attorneys’ fees and disbursements, and, if
reasonably necessary to collect such proceeds, the expense of an Appraisal on
behalf of Lender) out of such Loss Proceeds or, if insufficient for such
purpose, by Borrower.

 

(d)           If
Borrower is not entitled to apply Loss Proceeds toward the restoration of a
Property pursuant to Section 5.16(b) and Lender elects not to
permit such Loss Proceeds to be so applied, such Loss Proceeds shall be applied
on the first Payment Date following such election to the prepayment of the Loan
(without the payment of any Prepayment Fee) and shall be accompanied by
interest through the end of the applicable Interest Accrual Period (calculated
as if the amount prepaid were outstanding for the entire Interest Accrual
Period).  If the Note has been bifurcated
into multiple Note Components pursuant to Section 1.3(c), all
prepayments of the Loan made by Borrower in accordance with this Section 5.16(d) shall
be applied to the Note Components in ascending order of interest rate (i.e.,
first to the Note Component with the lowest Component Spread until its
outstanding principal balance has been reduced to zero, then to the Note
Component with the second lowest Component Spread until its outstanding
principal balance has been reduced to zero, and so on) or in such other order
as Lender shall determine.  The Release
Price for any Property for which Loss Proceeds are applied to repayment of the
Loan pursuant to this Section 5.16(d) shall be reduced by the
amount of such repayment.  If Loss
Proceeds are not made available to restore any Property and are applied to the
prepayment of any Encumbered Property Debt or the Loan, Borrower shall be
entitled to obtain the release of the applicable Property pursuant to Section 2.2,
provided that (i) Borrower shall not be obligated to satisfy the
requirements of clauses (2) or (3) of Section 2.2(a) in
connection with such release, and (ii) the appropriate Release Price shall
be the Unaffiliated Release Price with respect thereto.

 

(e)           Notwithstanding
anything in this Section 5.16 to the contrary, with respect to
Encumbered Properties, Loss Proceeds shall be applied in accordance with the
Encumbered Property Debt Documents, and after such application, any excess Loss
Proceeds shall be applied in accordance with this Section 5.16.

 

5.17.        Annual Budget.  At least 30 days prior to the commencement of
each Fiscal Year during the term of the Loan beginning with the 2008 Fiscal
Year, and at least 30 days after the commencement of any Event of Default,
Borrower shall deliver to Lender an Annual Budget for the Properties for the
ensuing Fiscal Year and, promptly after preparation thereof, any subsequent
revisions to the Annual Budget.  During
the continuance of any Event of Default, such Annual Budget and any such
revisions shall be subject to Lender’s approval (the Annual Budget, as so
approved, or if no Event of Default exists, the Annual Budget, the “Approved
Annual Budget”); provided, however, that Borrower shall not
amend any Annual Budget more than once in any 60-day period.  If Borrower submits an Annual Budget for
approval in good faith and such Annual Budget is not approved within 30 days,
then the prior year’s Approved Annual Budget will remain in effect, subject to
increases for non-discretionary items such as insurance premiums and Taxes and
increases in the Consumer Price Index for the applicable calendar year over the
previous calendar year for discretionary items.

 

5.18.        General Indemnity.  (a)  Borrower shall indemnify, reimburse, defend and hold harmless Lender and
its officers, directors, employees and agents (collectively, the “Indemnified
Parties”) for, from and against any and all Damages of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Indemnified Parties,

 

75

 

in any way relating to or arising out of the
making or holding or enforcement of the Loan by Lender or the administration of
the Transaction to the extent resulting, directly or indirectly, from any claim
(including any Environmental Claim) made (whether or not in connection with any
legal action, suit, or proceeding) by or on behalf of any Person; provided,
however, that no Indemnified Party shall have the right to be
indemnified hereunder for its own fraud, bad faith, gross negligence or willful
misconduct.  The provisions of and
undertakings and indemnification set forth in this Section 5.18
shall survive the satisfaction and payment in full of the Indebtedness and
termination of this Agreement.

 

(b)           The applicable Indemnified Party shall promptly notify Borrower in writing
of any action, judgment, suit, claim or demand with respect to which such
Indemnified Party seeks the benefit of Section 5.18(a) and
provide Borrower the opportunity to defend same, and if such Indemnified Party
fails to do so it shall lose the benefit of Section 5.18(a) if
and to the extent Borrower is prejudiced thereby.  So long as Borrower is resisting and
defending in a prudent and commercially reasonable manner any action, judgment,
suit, claim or demand that gives rise to Damages (or same is being defended by
Borrower’s insurer and insurance is adequate for the reimbursement of such
Damages), the Indemnified Parties shall not be entitled to defend or settle
same and claim the benefit of Section 5.18(a) with respect
thereto without the consent of Borrower. 
Notwithstanding the foregoing, if the conditions set forth in the
preceding sentence are not being satisfied and Lender has provided Borrower
with 30 days’ prior written notice, or shorter period if mandated by the
requirements of applicable law, and opportunity to correct such determination,
Lender may in good faith settle such action, suit or proceeding and claim the
benefit of this Section 5.18 with respect thereto.

 

5.19.        Nonbinding Consultation.  Lender shall have the right to consult
with and advise Borrower regarding significant business activities and business
and financial developments of Borrower, provided that any such advice or
consultation or the result thereof shall be completely nonbinding on Borrower.

 

5.20         Compliance with
Encumbrances.  Each Borrower
covenants and agrees as follows:

 

(i)            Borrower shall comply
with all material terms, conditions and covenants of each material Permitted
Encumbrance, including any material reciprocal easement agreement, any
declaration of covenants, conditions and restrictions, and any condominium
arrangements.

 

(ii)           Borrower shall promptly
deliver to Lender a true and complete copy of each and every notice of default
received by Borrower with respect to any obligation of such Borrower under the
provisions of any such Permitted Encumbrance, in each case if the same would
reasonably be expected to have a Material Adverse Effect.

 

(iii)          Borrower shall deliver
to Lender copies of any written notices of event of default relating to any
such Permitted Encumbrance served by such Borrower, if the same would
reasonably be expected to have a Material Adverse Effect.

 

76

 

(iv)          After the occurrence of
an Event of Default, so long as the Loan is outstanding, Borrower shall not
grant or withhold any material consent, approval or waiver under any such
Permitted Encumbrance without the prior written consent of Lender.

 

(v)           Borrower shall deliver
to each other party to any such Permitted Encumbrance notice of the identity of
Lender and each assignee of Lender of which such Borrower has been notified in
writing if such notice is required in order to protect Lender’s interest
thereunder.

 

5.21         Encumbered Property Indebtedness.  Borrower
shall cause each Encumbered Property Owner to comply in all material respects
with all of their respective obligations and liabilities under the Encumbered
Property Debt Documents to which each is a party, in each case except to the
extent that any failure to so comply would not have a Material Adverse Effect
on the value of any of the Encumbered Properties or the Collateral.  Borrower shall cause each Encumbered Property
Owner, promptly upon receipt of any notice of breach or default under any
Encumbered Property Debt Documents, to deliver a copy of the same to Lender and
to grant access to, and otherwise cooperate with, Lender to permit Lender,
subject to the Encumbered Property Debt Documents, to cure such default to the
same extent as the right granted to Lender under Section 7.2(c) to
cure an Event of Default with respect to any Mortgage Loan Collateral
Property.  The actual costs and
expenses incurred by Lender in exercising rights under this paragraph
(including reasonable attorneys’ fees), with interest at the Default Rate for
the period after notice from Lender that such costs or expenses were incurred
to the date of payment to Lender, shall constitute a portion of the
Indebtedness, shall be secured by the Loan Documents and shall be due and
payable to Lender within 5 Business Days of demand therefor.  Within 30 days of the Closing Date, Borrower
shall take all steps necessary to cause Lender to be a notice party under the
Encumbered Property Debt Documents.

 

5.22         Disposition Assets.  Upon the
sale or other transfer or disposition of any Disposition Asset, Borrower shall
promptly deliver to Lender written notice thereof in the form of an Officer’s
Certificate identifying the relevant Disposition Asset, the price for which it
was sold and the transferee thereof and certifying that the transferee thereof
is unaffiliated with any Borrower.

 

5.23         Distributions.  Borrower shall cause each
Property Owner and each Joint Venture Owner to promptly make Distributions of
all available cash flow, after payment of Operating Expenses at the applicable
Property and other sums then required to be paid to the Encumbered Property
Lenders or otherwise required to be paid, in each case, to the extent expressly
set forth in the Encumbered Party Debt Documents or the Joint Venture
Documents, directly into the Cash Management Account or the Blocked Account on
the earliest date practicable in the maximum amount not prohibited by the
Encumbered Property Documents or the Qualified Joint Venture Agreements.  Borrower shall cause TRS Owner to promptly
make Distributions of all available cash flow, after payment of Operating
Expenses at the applicable TRS Property and other sums then required or
otherwise advisable to be paid by TRS Owner in order to ensure that TRS Owner
maintains its status as a taxable REIT subsidiary under applicable Legal
Requirements, directly into the Cash Management Account or the Blocked Account
on the earliest date practicable in the maximum amount then permissible

 

77

 

5.24                         Encumbered Property Defaults. 
Upon the occurrence of an event of default under any one or more
Encumbered Property Loans due to a claim that the Transaction was prohibited
thereunder, (x) AFRT shall repay or defease, or cause to be repaid or
defeased, such Encumbered Property Loan, as applicable, prior to the earlier of
(1) the date that is 10 days after the declaration of the event of default
under the applicable Encumbered Property Debt Documents and (2) the
acceleration of such Encumbered Property Loan; or (y) AFRT shall cause the
release of the Encumbered Property or Encumbered Properties securing such
Encumbered Property Loan from the Lien of the Loan Documents in accordance with
Section 2.2(a), prior to the earlier of (1) the date that is
10 days after the declaration of the event of default under the applicable
Encumbered Property Loan and (2) the acceleration of such Encumbered
Property Loan; provided, however, that (i) in connection
with any such release, notwithstanding anything to the contrary contained in
this Agreement, such Encumbered Property may be Transferred to an Affiliate,
and (ii) if the Transfer related to the release of such Encumbered
Property would result in a further default under the applicable Encumbered
Property Debt Documents, then Borrower shall be required to pay the applicable
Release Price for such Encumbered Property, but shall not be required to
Transfer such Property to actually effectuate such release.  The foregoing 10-day period may be extended
to up to 60 days, provided (x) prior to the expiration of such 10-day
period, AFRT shall deliver to Lender a Letter of Credit in the amount, if any,
by which the aggregate cost to repay or defease such Encumbered Property Loan
(e.g., transaction costs, defeasance costs and prepayment fees) exceeds the
outstanding principal balance thereof, (y) the aggregate outstanding
principal amount of Encumbered Property Loans for which an event of default
thereunder is continuing does not exceed $350,000,000 at such time, and (z) AFRT
shall deliver to Lender an Officer’s Certificate of Sponsor certifying that
such event of default under such Encumbered Property Loan does not trigger an
event of default under any other Debt of Sponsor, any Permitted Debt of
Borrower or any Debt of any of their respective Affiliates.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

6.1.                            Liens
on the Properties.  No Borrower, no
Property Owner, and, if applicable, no Single-Purpose Equityholder shall permit
or suffer the existence of any Lien on any of its assets, other than Permitted
Encumbrances.

 

6.2.                            Ownership.  No Borrower shall own any assets other than
its Properties and related personal property and fixtures located therein or
used in connection therewith or its Required Equity, as applicable.  Except to the extent required under the
Encumbered Property Debt Documents, no Property Owner shall own any assets
other than its Encumbered Property and related personal property and fixtures
located therein or used in connection therewith.  Except as otherwise shown on Exhibit A,
neither AFRT nor AFRT Owner has any direct or indirect subsidiary that is not a
Borrower or a Property Owner, and no new direct or indirect subsidiary shall be
formed, unless such subsidiary shall be a New Borrower Entity that becomes a “Borrower”
or “Property Owner” hereunder or a Permitted TRS Entity (unless Lender shall
otherwise consent thereto) and, if it is a Borrower, pledge all of its assets
to Lender, in each case pursuant to documentation reasonably acceptable to
Lender.

 

78

 

6.3.                            Transfer.

 

(a)                                No
Borrower shall Transfer any Collateral, and no Property Owner shall Transfer
any Property, other than in compliance with Article II and other than the
replacement or other disposition of obsolete or non-useful personal property
and fixtures in the ordinary course of business, and Borrower shall not
hereafter file a declaration of condominium with respect to any of the
Properties.

 

(b)                               Notwithstanding
the foregoing:

 

(i)                                   one
or more Borrowers, may, at their sole cost and expense, Transfer all or a
portion of the Required Equity to another Borrower or a New Borrower Entity
and/or enter into a Permitted TRS Contribution Agreement, provided that the
nature, extent and value of Lender’s collateral is not thereby impaired and (1) after
giving effect to any such Transfer or Permitted TRS Contribution Agreement, no
Change of Control shall have occurred, (2) Lender shall have received ten
days’ advance written notice of any such Transfer or Permitted TRS Contribution
Agreement together with a revised organizational chart reflecting such
Transfer, (3) such Required Equity shall remain or become (as the case may
be) subject to a first priority perfected Lien in favor of Lender, as evidenced
by a legal opinion and updated UCC title insurance policy, in each case
reasonably satisfactory to Lender and consistent with Rating Agency
requirements, (4) if reasonably requested by Lender, Borrower shall
deliver to Lender an updated nonconsolidation opinion satisfactory to Lender
and such other updated legal opinions, certifications and evidence of
compliance with this Agreement as Lender shall reasonably require, (5) such
Transfer shall have no adverse effect on Lender, (6) with respect to a
Permitted TRS Contribution Agreement, to the extent not already covered by the
Loan Documents, Borrower shall have caused the rights of both parties under
such agreement to be pledged to Lender as additional collateral for the Loan in
a manner reasonably satisfactory to Lender and (7) Borrower shall pay all
reasonable costs and expenses of Lender in connection with the foregoing;

 

(ii)                                so
long as no Event of Default is then continuing, Borrower may obtain the release
of up to and including 80% of the indirect equity interests in any Property
Owner in the aggregate from the Liens of the Loan Documents in connection with
the sale of such equity interests to an unaffiliated third party that enters
into a Qualified Joint Venture Agreement with Borrower, provided that (1) at
the time of each such release, Borrower shall prepay the Loan, in accordance
with Section 2.1, in an amount equal to the applicable Unaffiliated
Release Price for such Joint Venture Property, provided that, solely for these
purposes, (i) the amount specified in clause (x) of the definition of
“Unaffiliated Release Price” shall be multiplied by the percentage of the joint
venture interest being Transferred, and (ii) the percentage specified in
clause (y) of the definition of Unaffiliated Release Price shall be
replaced with “100%”, which prepayment shall be accompanied by the other
amounts specified in Section 2.1, (2) DSCR for the Test Period
most recently ended, recalculated to include only Borrower’s share of income
and expense attributable to the Properties remaining after the contemplated
sale and to exclude the interest expense and principal payments on the
aggregate amount to be prepaid, shall be equal to or greater than DSCR
immediately prior to such sale (as

 

79

 

reasonably determined by Lender), (3) after
giving effect to such release, the aggregate Senior Collateral Value shall not
be less than 120% of the sum of the Principal Indebtedness and the Junior
Mezzanine Loan Principal Indebtedness (as reasonably determined by Lender), (4) Borrower
shall reimburse Lender for any actual reasonable out-of-pocket costs and
expenses incurred by Lender in connection with this Section (including
the reasonable fees and expenses of legal counsel and the Servicer), (5) Lender
shall retain a first-priority perfected pledge of the remaining equity
interests in such Property Owner, which shall not be less than 20% of the
equity therein; and (6) any subsequent sale of a Joint Venture Property
shall be subject to the requirements of Section 2.2, except that,
for purposes of this subsection (6) only, the Release Price payable in
connection therewith shall be the Unaffiliated Release Price (taking into
account 100% of the Aggregate Allocated Loan Amounts of the respective
Properties, without reduction for prior equity sales) reduced by multiplying
the amount specified in clause (x) of the definition of Unaffiliated
Release Price by the percentage of the applicable joint venture not theretofore
released;

 

(iii)                             one or more Encumbered
Property Owners may transfer one or more Encumbered Properties to one or more
newly formed Single-Purpose Entities Controlled by Sponsor, in connection with
the incurrence of Permitted Debt pursuant to clause (iv) of the definition
of “Permitted Debt”;

 

(iv)                            Borrower
shall be permitted to Transfer Value Add Pool Equity pursuant to Section 2.3;
and

 

(v)                               a
transfer of direct and/or indirect equity interests in connection with a
foreclosure of the Junior Mezzanine Loan (or similar “in lieu” transaction)
shall be permitted, subject to the intercreditor agreement between Lender and
Junior Mezzanine Lender.

 

6.4.                            Debt.  Neither Borrower nor any Property Owner shall
have any Debt, other than Permitted Debt. 
No direct or indirect equityholder of Borrower or any Property Owner,
other than Sponsor and any direct or indirect equityholder of Sponsor, shall
have any debt, other than Permitted Debt.

 

6.5.                            Dissolution;
Merger or Consolidation.  No
Borrower, Property Owner that owns any assets nor, if applicable, any
Single-Purpose Equityholder shall dissolve, terminate, liquidate, merge with or
consolidate into another Person.

 

6.6.                            Change
in Business.  No Borrower nor any
Property Owner shall make any material change in the scope or nature of its
business objectives, purposes or operations or undertake or participate in
activities other than the continuance of its present business.

 

6.7.                            Debt
Cancellation.  No Borrower nor any
Property Owner shall cancel or otherwise forgive or release any material claim
or Debt owed to it by any Person, except for adequate consideration or in the
ordinary course of its business.

 

80

 

6.8.                            Affiliate
Transactions.  No Borrower nor any
Property Owner shall enter into, or be a party to, any transaction with any Affiliate
of Borrower, except on terms which are no less favorable to such Borrower or
Property Owner than would be obtained in a comparable arm’s length transaction
with an unrelated third party.

 

6.9.                            Misapplication
of Funds.  No Borrower shall (a) distribute
any Revenue or Loss Proceeds in violation of the provisions of this Agreement
(and shall promptly cause the reversal of any such distributions made in error
of which Borrower becomes aware), (b) fail to remit or cause to be
remitted amounts to the Cash Management Account as required by Section 3.1
(including, without limitation, all Distributions), or (c) misappropriate
any security deposit or portion thereof.

 

6.10.                      Jurisdiction
of Formation.  No Borrower or
Property Owner shall change its jurisdiction of formation without receiving
Lender’s prior written consent and promptly providing Lender such information
and replacement Uniform Commercial Code financing statements and legal opinions
as Lender may reasonably request in connection therewith.

 

6.11.                      Modifications
and Waivers.  Unless otherwise
consented to in writing by Lender:

 

(i)                                   No
Borrower or Property Owner shall amend, modify, terminate, renew, or surrender
any rights or remedies under any Major Lease, or enter into any Major Lease,
except in compliance with Section 5.7;

 

(ii)                                Except
for changing its registered agent and principal place of business (in each
case, upon advance written notice to Lender), no Borrower or Property Owner
nor, if applicable, any Single-Purpose Equityholder shall terminate, amend or
modify its organizational documents (including, without limitation, any
operating agreement, limited partnership agreement, by-laws, certificate of
formation, certificate of limited partnership or certificate of incorporation)
in a manner which (x) could reasonably be expected to affect its
qualification as a Single-Purpose Entity, with respect to entities required to
be Single-Purpose entities hereunder or (y) could reasonably be expected
to result in a Material Adverse Effect; and

 

(iii)                             No Borrower
or Property Owner shall terminate, materially amend or materially modify the
Approved Management Agreement without the consent of Lender not to be
unreasonably withheld, conditioned or delayed.

 

6.12.                      ERISA.

 

(a)                                No
Borrower shall maintain or contribute to, or agree to maintain or contribute
to, or permit any ERISA Affiliate of Borrower (except for Sponsor and any ERISA
Affiliate that is an equityholder in Sponsor) to maintain or contribute to or
agree to maintain or contribute to, any employee benefit plan (as defined in Section 3(3) of
ERISA) subject to Title IV or Section 302 of ERISA or Section 412 of
the Code.

 

(b)                               No
Borrower shall engage in a non-exempt prohibited transaction under Section 406
of ERISA, Section 4975 of the Code, or substantially similar provisions
under 

 

81

 

federal, state or
local laws, rules or regulations or in any transaction that would cause
any obligation or action taken or to be taken hereunder (or the exercise by
Lender of any of its rights under the Notes, this Agreement, the Mortgages or
any other Loan Document) to be a non-exempt prohibited transaction under such
provisions.

 

6.13.                      Alterations and Expansions.  During the continuance of any Event of
Default, no Borrower or Property Owner shall perform or contract to perform any
Capital Expenditures that are not consistent with the Approved Annual
Budget.  No Borrower or Property Owner
shall perform or contract to perform any Material Alteration without the prior
written consent of Lender, which consent (in the absence of an Event of
Default) shall not be unreasonably withheld, conditioned or delayed.  If Lender’s consent is requested hereunder
with respect to a Material Alteration, Lender may retain a construction
consultant to review such request and, if such request is granted, Lender may
retain a construction consultant to inspect the work from time to time.  Borrower shall, within 30 days of demand by
Lender, reimburse Lender for the reasonable fees and disbursements of such
consultant.

 

6.14.                      Advances
and Investments.  No Borrower or
Property Owner shall lend money or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, any
Person, except for Permitted Investments, or issue any additional equity
interests.  No Borrower or Property Owner
shall make any capital contribution to any Person that is not a Borrower or a
Property Owner .

 

6.15.                      Single-Purpose
Entity.  No Borrower shall cease to
be a Single-Purpose Entity.

 

6.16.                      Zoning
and Uses.  No Borrower or Property
Owner shall do any of the following with respect to any of the Properties
without the prior written consent of Lender (such consent not to be
unreasonably withheld, delayed or conditioned), except, as to clause (ii) below,
to the extent the same is commercially reasonable and not reasonably expected
to have a Material Adverse Effect:

 

(i)                                   initiate
or support any limiting change in the permitted uses of any of the Properties
(or to the extent applicable, zoning reclassification of any of the Properties)
or any portion thereof, seek any material variance under existing land use
restrictions, laws, rules or regulations (or, to the extent applicable,
zoning ordinances) applicable to a Property, or use or permit the use of a
Property in a manner that would result in the use of such Property becoming a
nonconforming use (other than a legal nonconforming use) in any material
respect under applicable land-use restrictions or zoning ordinances or that
would violate the terms of any Lease, Material Agreement or Legal Requirement
in any material respect;

 

(ii)                                consent
to any modification, amendment or supplement to any of the terms of, or
materially default in its obligations under, any Permitted Encumbrance, to the
extent the same would result in a Material Adverse Effect;

 

(iii)                             impose
or consent to the imposition of any restrictive covenants, easements or
encumbrances upon a Property in any manner that adversely affects in any
material respect its value, utility or transferability;

 

82

 

(iv)                            execute
or file any subdivision plat affecting any of the Properties, or institute, or
permit the institution of, proceedings to alter any tax lot comprising any of
the Properties;

 

(v)                               amend,
modify, surrender, terminate or waive any material rights or remedies under, or
enter into, or default (beyond applicable grace, cure or notice periods) in its
material obligations under, any Material Agreement in any manner that might
diminish (x) the value of the applicable Property or Properties or (y) the
rights of any Borrower or Property Owner or Lender thereunder;

 

(vi)                            amend,
modify, surrender, terminate or waive any material rights or remedies under, or
enter into, or default (beyond applicable grace, cure or notice periods) in its
material obligations under, any Ground Lease in any manner that might diminish (x) the
value of the applicable Property or Properties or (y) the rights of any
Borrower or Property Owner or Lender thereunder; or

 

(vii)                         permit or
consent to any of the Properties being used by the public or any Person in such
manner as might make possible a claim of adverse usage or possession or of any
implied dedication or easement.

 

6.17.                      Waste.  No Borrower or Property Owner shall commit or
permit any Waste on any of the Properties, nor take any actions that might
invalidate any insurance carried on any of the Properties (and Borrower or
Property Owner shall promptly correct any such actions of which Borrower or
Property Owner becomes aware).

 

ARTICLE VII

 

DEFAULTS

 

7.1.                            Event
of Default.  The occurrence of any
one or more of the following events shall be, and shall constitute the
commencement of, an “Event of Default” hereunder:

 

(a)                                Payment.

 

(i)                                   Borrower
shall default in the payment when due of any principal or interest owing
hereunder or under the Notes (including any mandatory prepayment required
hereunder); or

 

(ii)                                Borrower
shall default, and such default shall continue for at least five Business Days
after written notice to Borrower that such amounts are owing, in the payment
when due of fees, expenses or other amounts owing hereunder, under the Notes or
under any of the other Loan Documents (other than principal and interest owing
hereunder or under the Note).

 

(b)                               Representations.  Any representation made by Borrower or
Sponsor in any of the Loan Documents, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Lender shall
have been false or misleading in any material respect (or, with respect to any
representation which itself contains a materiality qualifier, in any

 

83

 

respect) as of the
date such representation was made, which failure, if capable of being cured or remedied,
has not been cured or remedied within 15 days after written notice to Borrower
of such failure.

 

(c)                                Other
Loan Documents.  Any Loan Document
shall fail to be in full force and effect or to convey the material Liens,
rights, powers and privileges purported to be created thereby; or a default
shall occur under any of the other Loan Documents, any of the Ground Leases (to
the extent such default would entitle the lessor thereunder to terminate the
Ground Lease) or under any Qualified Joint Venture Agreement, in each case
beyond the expiration of any applicable cure period (provided that if a default
occurs under a Loan Document and no cure period is provided therein, and such
Loan Document does not characterize such default as an “Event of Default”, then
clause (k) hereof shall apply).

 

(d)                               Bankruptcy, etc.

 

(i)                                   Any
Borrower, any Property Owner, any Joint Venture Owner or, if applicable, any
Single-Purpose Equityholder shall commence a voluntary case concerning itself
under Title 11 of the United States Code (as amended, modified, succeeded or
replaced, from time to time, the “Bankruptcy Code”);

 

(ii)                                Any
Borrower, any Property Owner, any Joint Venture Owner or, if applicable, any
Single-Purpose Equityholder shall commence any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of creditors,
dissolution, insolvency or similar law of any jurisdiction whether now or
hereafter in effect relating to such Borrower, Property Owner, Joint Venture
Owner or Single-Purpose Equityholder, or shall dissolve or otherwise cease to
exist;

 

(iii)                             there is commenced against
any Borrower, any Property Owner, any Joint Venture Owner or, if applicable,
any Single-Purpose Equityholder an involuntary case under the Bankruptcy Code,
or any such other proceeding, which remains undismissed for a period of 60 days
after commencement;

 

(iv)                            Any
Borrower, any Property Owner, any Joint Venture Owner or, if applicable, any
Single-Purpose Equityholder is adjudicated insolvent or bankrupt;

 

(v)                               Any
Borrower, any Property Owner, any Joint Venture Owner or, if applicable, any
Single-Purpose Equityholder suffers appointment of any custodian or the like
for it or for any substantial portion of its property and such appointment
continues unchanged or unstayed for a period of 60 days after commencement of
such appointment;

 

(vi)                            Any
Borrower, any Property Owner, any Joint Venture Owner or, if applicable, any
Single-Purpose Equityholder makes a general assignment for the benefit of
creditors; or

 

(vii)                         any action is taken by any
Borrower, Property Owner, Joint Venture Owner or, if applicable, any
Single-Purpose Equityholder for the purpose of effecting any of the foregoing.

 

84

 

(e)                                Change
of Control.

 

(i)                                   A
Change of Control shall occur; or

 

(ii)                                except
as expressly permitted hereunder, any party shall acquire any direct or
indirect equity interest in any Borrower, Property Owner or Single-Purpose
Equityholder (even if not constituting a Change of Control), other than a
direct or indirect equity interest in Sponsor; or

 

(iii)                             any party shall acquire
more than 49% of the direct or indirect equity interest in Borrower or a
Single-Purpose Equityholder (even if not constituting a Change of Control),
other than a direct or indirect equity interest in Sponsor, and Borrower shall
fail to deliver to Lender with respect to such new equityholder a new
non-consolidation opinion satisfactory to (A) prior to the occurrence of
any Securitization of the Loan, Lender in its reasonable discretion, and (B) at
any time following any Securitization or series of Securitizations of the Loan,
each of the Rating Agencies rating such Securitization or Securitizations.

 

(f)                                  Equity
Pledge; Preferred Equity.  Any direct
or indirect equity interest in or right to distributions from any Borrower,
Property Owner or Joint Venture Owner shall be subject to a Lien in favor of
any Person, or any such party or any holder of a direct or indirect interest in
any such party shall issue preferred equity (or debt granting the holder
thereof rights substantially similar to those generally associated with
preferred equity); except that the
following shall be permitted:

 

(i)                                   any pledge of direct and indirect equity
interests in and rights to distributions from Sponsor;

 

(ii)                                the
issuance of preferred equity interests in Sponsor;

 

(iii)                             the pledges in favor of
Lender created by the Loan Documents; and

 

(iv)                            the
pledge to Junior Mezzanine Lender of 100% of the equity interests in GKK Stars
Acquisition LLC as security for the Junior Mezzanine Loan.

 

(g)                               Insurance.  Borrower shall fail to maintain in full force
and effect or cause to be maintained in full force and effect all Policies
required hereunder.

 

(h)                               ERISA;
Negative Covenants.  A default shall
occur in the due performance or observance by any Borrower of any term,
covenant or agreement contained in Section 5.8 or in Article VI;
provided that if such default is susceptible of being cured, such default shall
not constitute an Event of Default unless and until it shall remain uncured for
10 days after Borrower receives written notice thereof, for a default which can
be cured by the payment of money, or for 30 days after Borrower receives
written notice thereof, for a default which cannot be cured by the payment of
money; or any ERISA Event with respect to a Plan shall have occurred and the
same shall have a Material Adverse Effect.

 

85

 

(i)                                   Cross-Default.  An event of default shall occur and be
continuing under any one or more Encumbered Property Loans, provided that (a) such
event of default shall not constitute an Event of Default unless the aggregate
outstanding principal amount of the applicable Encumbered Property Loans
exceeds $30 million at the time such event of default is declared and such
default is a monetary or material non-monetary event of default; and (b) if
an event of default is declared under any Encumbered Property Loan solely due
to a claim that the Transaction was prohibited thereunder, then same shall not
constitute an Event of Default if Borrower complies with Section 5.24
within the time periods specified therein.

 

(j)                                   Certificates
of Required Equity.  If any
additional direct or indirect equity interests in any Property Owner or
Borrower shall be issued and not pledged to Lender in a manner reasonably
satisfactory to Lender.

 

(k)                                Other
Covenants.  A default shall occur in
the due performance or observance by any Borrower of any term, covenant or
agreement (other than those referred to in subsections (a) through (j),
inclusive, of this Section 7.1) contained in this Agreement or in
any of the other Loan Documents, except that if such default referred to in
this subsection (k) is susceptible of being cured, such default
shall not constitute an Event of Default unless and until it shall remain
uncured for 10 days after Borrower receives written notice thereof, for a
default which can be cured by the payment of money, or for 30 days after
Borrower receives written notice thereof, for a default which cannot be cured
by the payment of money; and if a default cannot be cured by the payment of
money but is susceptible of being cured and cannot reasonably be cured within
such 30-day period, and Borrower commences to cure such default within such
30-day period and thereafter diligently and expeditiously proceeds to cure the
same, Borrower shall have such additional time as is reasonably necessary to
effect such cure, but in no event in excess of 120 days from the original
notice.

 

7.2.                            Remedies.

 

(a)                                During
the continuance of an Event of Default, Lender may by written notice to
Borrower, in addition to any other rights or remedies available pursuant to
this Agreement, the Notes, and the other Loan Documents, at law or in equity,
declare by written notice to Borrower all or any portion of the Indebtedness to
be immediately due and payable, whereupon all or such portion of the
Indebtedness shall so become due and payable, and Lender may enforce or avail
itself of any or all rights or remedies provided in the Loan Documents against
Borrower and the Collateral (including all rights or remedies available at law
or in equity); provided, however, that, notwithstanding the
foregoing, if an Event of Default specified in paragraph 7.1(d) shall
occur, then the Indebtedness shall immediately become due and payable without
the giving of any notice or other action by Lender.  Any actions taken by Lender shall be
cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of
Lender permitted by law, equity or contract or as set forth in this Agreement
or in the other Loan Documents.

 

(b)                               If
Lender forecloses on any of the Collateral, Lender shall apply all net proceeds
of such foreclosure to repay the Indebtedness, the Indebtedness shall be
reduced to the

 

86

 

extent of such net
proceeds and the remaining portion of the Indebtedness shall remain outstanding
and secured by the Collateral and the other Loan Documents, it being understood
and agreed by Borrower that Borrower is liable for the repayment of all the Indebtedness;
provided, however, that at the election of Lender, the Notes
shall be deemed to have been accelerated only to the extent of the net proceeds
actually received by Lender with respect to the Collateral and applied in
reduction of the Indebtedness.

 

(c)                                During
the continuance of any Event of Default (including an Event of Default
resulting from a failure to satisfy the insurance requirements specified
herein), Lender may, subject to the terms of the Encumbered Property Debt
Documents, but without any obligation to do so and without notice to or demand
on Borrower and without releasing Borrower from any obligation hereunder, take
any action to cure such Event of Default. 
Subject to the Encumbered Property Debt Documents, Lender may enter upon
any or all of the Properties upon reasonable notice to Borrower for such
purposes or appear in, defend, or bring any action or proceeding to protect its
interest in the Collateral or to foreclose on the Collateral or collect the
Indebtedness.  The costs and expenses
incurred by Lender in exercising rights under this paragraph (including
reasonable attorneys’ fees), with interest at the Default Rate for the period
after notice from Lender that such costs or expenses were incurred to the date
of payment to Lender, shall constitute a portion of the Indebtedness, shall be
secured by the Loan Documents and shall be due and payable to Lender upon
demand therefor.

 

(d)                               Interest
shall accrue on any judgment obtained by Lender in connection with its
enforcement of the Loan at a rate of interest equal to the Default Rate.

 

7.3.                            No
Waiver.  No delay or omission to
exercise any remedy, right or power accruing upon an Event of Default shall
impair any such remedy, right or power or shall be construed as a waiver
thereof, but any such remedy, right or power may be exercised from time to time
and as often as may be deemed by Lender to be expedient.  A waiver of any Default or Event of Default
shall not be construed to be a waiver of any subsequent Default or Event of
Default or to impair any remedy, right or power consequent thereon.

 

7.4.                            Application
of Payments after an Event of Default. Notwithstanding anything to the
contrary contained herein, during the continuance of an Event of Default, all
amounts received by Lender in respect of the Loan shall be applied at Lender’s
sole discretion either toward the components of the Indebtedness (e.g.,
Lender’s expenses in enforcing the Loan, interest, principal and other amounts
payable hereunder), and the Note Components in such sequence as Lender shall
elect in its sole discretion, or toward the payment of Property expenses.

 

ARTICLE VIII

 

CONDITIONS PRECEDENT

 

8.1.                            Conditions
Precedent to Closing.  This Agreement
shall become effective on the date that all of the following conditions shall
have been satisfied (or waived by Lender), it being agreed that Lender’s
funding of the Loan shall constitute Lender’s agreement that such conditions
have been satisfied or waived unless the parties shall otherwise have agreed in
writing:

 

87

 

(a)           Loan
Documents.  Lender shall have
received a duly executed copy of each Loan Document.  Each Loan Document which is to be recorded in
the public records shall be in form suitable for recording.

 

(b)           Collateral
Accounts.  Each of the Collateral
Accounts shall have been established with the Cash Management Bank and funded
to the extent required under Article III.

 

(c)           Opinions
of Counsel. Lender shall have received legal opinions reasonably
satisfactory to Lender.

 

(d)           Organizational
Documents.  Lender shall have
received all documents reasonably requested by Lender relating to the existence
of each Borrower, the validity of the Loan Documents and other matters relating
thereto, in form and substance satisfactory to Lender, including:

 

(i)            Authorizing
Resolutions.  A certified copy of the
resolutions approving and adopting the Loan Documents to be executed by
Borrower and authorizing the execution and delivery thereof.

 

(ii)           Organizational
Documents.  Certified copies of the
organizational documents of each Borrower and, if applicable, any
Single-Purpose Equityholder (including any certificate of formation,
certificate of limited partnership, certificate of incorporation, operating
agreement, limited partnership agreement or by-laws), in each case together
with all amendments thereto.

 

(iii)          Certificates
of Good Standing or Existence. 
Certificates of good standing or existence for each Borrower and, if
applicable, any Single-Purpose Equityholder issued as of a recent date by its
state of organization and by each state in which one of the Properties is
located.

 

(iv)          Certificates.  Original limited liability company or
partnership interest certificates, as the case may be, executed in blank for
AFRT and American Financial TRS, Inc.

 

(e)           Lease; Material
Agreements.  Lender shall have
received, with respect to each Property (i) true and complete copies of
all Material Agreements, Leases, Ground Leases, recorded reciprocal easement
agreements (and similar documents) and (ii) all rent rolls and material
contracts to the extent available to Borrower without material cost or expense.

 

(f)            Lien
Search Reports.  Lender shall have
received satisfactory reports of Uniform Commercial Code, tax lien, bankruptcy
and judgment searches conducted by a search firm acceptable to Lender with
respect to the Properties and each Borrower (including each Borrower’s
immediate predecessor, if any, and to the extent reasonably required,
subsidiaries of each Borrower), such searches to be conducted in such locations
as Lender shall have requested.

 

(g)           Material
Litigation.  Lender shall have
received a schedule of all material outstanding litigation that is not fully
covered by insurance.

 

88

 

(h)           No
Default or Event of Default.  No Default
or Event of Default shall have occurred and be continuing on such date either
before or after the execution and delivery of this Agreement.

 

(i)            No
Injunction.  No Legal Requirement
shall exist, and no litigation shall be pending or threatened, which in the
good faith judgment of Lender would enjoin, prohibit or restrain, or impose or
result in the imposition of any material adverse condition upon, the making or
repayment of the Loan or the consummation of the Transaction.

 

(j)            Representations.  The representations in this Agreement and in
the other Loan Documents shall be true and correct in all respects on and as of
the Closing Date with the same effect as if made on such date.

 

(k)           Estoppel
Letters.  To the extent obtained by
Borrower through the exercise of reasonably diligent efforts, Borrower shall
have delivered to Lender estoppel certificates from each Tenant under a Lease
and each lessor under a Ground Lease, in each case, which has been identified
by Lender prior to the date hereof, each of which shall specify that Lender and
its successors and assigns may rely thereon and otherwise be in such form and
substance as shall be satisfactory to Lender.

 

(l)            Merger
Agreement.  Lender shall have
received a complete copy of the executed Merger Agreement (including all
exhibits thereto) and each amendment thereto and all other related agreements.

 

(m)          No
Material Adverse Effect.  No event or
series of events shall have occurred which Lender reasonably believes has had
or is reasonably likely to have a Portfolio Material Adverse Effect.

 

(n)           Transaction
Costs.  Borrower shall have paid all
transaction costs (or provided for the direct payment of such transaction costs
by Lender from the proceeds of the Loan).

 

(o)           Insurance.  Lender shall have received certificates of
insurance on ACORD Form 28, demonstrating insurance coverage in respect of
the Properties of types, in amounts, with insurers and otherwise in compliance
with the terms, provisions and conditions set forth in this Agreement.  Such certificates shall indicate that Lender
and its successors and assigns are named as additional insured on each
liability policy, and that each casualty policy and rental interruption policy
contains a loss payee and mortgagee endorsement in favor of Lender, its successors
and assigns.

 

(p)           Title.  Lender shall have received a marked, signed
commitment to issue, or a pro-forma version of, a Qualified Title Insurance
Policy in respect of each Mortgage Loan Property, listing only usual and
customary permitted exceptions and such other exceptions reasonably approved by
Lender.

 

(q)           UCC
Insurance.  Lender shall have
received one or more UCC “Eagle-9” title insurance policies insuring the equity
pledges of the Loan Documents, subject only to usual and customary permitted
exceptions and other exceptions reasonably approved by Lender, and a 

 

89

 

copy of the owner’s title
insurance policy for each non-mortgaged Property, with a mezzanine endorsement
or the equivalent in favor of Lender if available (except that Borrower shall
not be required to purchase new or updated owners’ policies).

 

(r)            Zoning.  Lender shall have received zoning reports
with respect to (x) each Mortgage Loan Property, and (y) each other
Property that Lender reasonably determines necessary in order to syndicate the
Loan, satisfy regulatory requirements, resolve any material issues arising from
Lender’s due diligence, and/or pledge the Loan in connection with a repurchase
or similar facility.

 

(s)           Permits;
Certificate of Occupancy.  Lender
shall have received a copy of all Permits necessary for the use and operation
of each Property and the certificate(s) of occupancy, if required, for
each Property, all of which shall be in form and substance reasonably
satisfactory to Lender.

 

(t)            Engineering
Report, Environmental Report and Appraisals.  Lender shall have received existing
appraisals, Environmental Reports and engineering/seismic reports for each of
the Properties, and shall have received updates thereof with respect to (x) each
Mortgage Loan Property, and (y) each other Property that Lender reasonably
determines necessary in order to syndicate the Loan, satisfy regulatory
requirements, resolve any material issues arising from Lender’s due diligence,
and/or pledge the Loan in connection with a repurchase or similar
facility.  Providers of such reports
shall be reasonably approved by Lender. 
Each new appraisal shall conform to USPAP and FIRREA guidelines.

 

(u)           Qualified
Survey.  Lender shall have received a
Qualified Survey with respect to (x) each Mortgage Loan Property, and (y) each
other Property that Lender reasonably determines necessary in order to
syndicate the Loan, satisfy regulatory requirements, resolve any material
issues arising from Lender’s due diligence, and/or pledge the Loan in
connection with a repurchase or similar facility, which includes, without
limitation, all such items as may be reasonably required by Lender, together
with a certification from a surveyor and legal description for each Property reasonably
acceptable to Lender.

 

(v)           Consents, Licenses, Approvals, etc. 
Lender shall have received copies of all consents, licenses and
approvals, if any, required in connection with the execution, delivery and
performance by Borrower, and the validity and enforceability, of the Loan
Documents, and such consents, licenses and approvals shall be in full force and
effect.

 

(w)          Financial
Information.  Lender shall have
received (i) financial information relating to the Sponsor, Borrower and
the Properties which is satisfactory to Lender, including current operating
statements and historical operating statements for the past three years, to the
extent available to Borrower without material cost or expense and (ii) a
certified closing date balance sheet for Borrower and Sponsor.

 

(x)            Annual
Budget.  Lender shall have received
the 2008 Annual Budget with respect to the Properties.

 

90

 

(y)           Closing
Statement.  Lender shall have
received a reasonably detailed closing statement indicating all sources and
uses of funds.

 

(z)            Additional
Matters.  Lender shall have received
such other certificates, opinions, documents and instruments relating to the
Loan as may have been reasonably requested by Lender.  All corporate and other proceedings, all
other documents (including all documents referred to in this Agreement and not
appearing as exhibits to this Agreement) and all legal matters in connection
with the Loan shall be reasonably satisfactory in form and substance to Lender.

 

ARTICLE
IX

 

MISCELLANEOUS

 

9.1.          Successors.  Except as otherwise provided in this
Agreement, whenever in this Agreement any of the parties to this Agreement is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party.  All
covenants, promises and agreements in this Agreement contained, by or on behalf
of Borrower, shall inure to the benefit of Lender and its successors and
assigns.

 

9.2.          GOVERNING
LAW.

 

(A)          THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

(B)           ANY LEGAL
SUIT, ACTION OR PROCEEDING AGAINST LENDER, BORROWER OR THE SPONSOR ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (OTHER THAN
ANY ACTION IN RESPECT OF THE CREATION, PERFECTION OR ENFORCEMENT OF A LIEN OR
SECURITY INTEREST CREATED PURSUANT TO ANY LOAN DOCUMENTS NOT GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK) MAY BE INSTITUTED IN ANY FEDERAL OR STATE
COURT IN NEW YORK, NEW YORK.  LENDER,
BORROWER AND THE SPONSOR HEREBY (i) IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (ii) IRREVOCABLY SUBMIT
TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING,
AND (iii) IRREVOCABLY CONSENT TO SERVICE OF PROCESS BY MAIL, PERSONAL
SERVICE OR IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW, AT THE ADDRESS
SPECIFIED IN SECTION 9.4.

 

9.3.          Modification,
Waiver in Writing.  Neither this
Agreement nor any other Loan Document may be amended, changed, waived,
discharged or terminated, nor shall any consent or approval of Lender be
granted hereunder, unless such amendment, change, waiver, discharge,
termination, consent or approval is in writing signed by Lender.

 

91

 

9.4.      Notices.  All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing by expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of delivery or attempted delivery, addressed
as follows (or at such other address and person as shall be designated from
time to time by any party to this Agreement, as the case may be, in a written
notice to the other parties to this Agreement in the manner provided for in
this Section).  ANY NOTICE OF DEFAULT
UNDER ARTICLE VII OR ANY SIMILAR PROVISION OF ANY OF THE OTHER LOAN DOCUMENTS
MUST PROVIDE, IN ORDER TO BE EFFECTIVE AS A NOTICE THEREUNDER, THAT IT IS BEING
GIVEN AS A NOTICE OF DEFAULT WHICH IF NOT CURED WITHIN THE GRACE PERIOD CONTAINED
IN THE LOAN DOCUMENTS WILL RESULT IN AN EVENT OF DEFAULT.  A notice shall be deemed to have been given
when delivered or upon refusal to accept delivery.

 

If to
Lender:

 

Goldman
Sachs Commercial Mortgage Capital, L.P.

6011 Connection Drive, Suite 550

Irving, Texas 75039

Attention:  Michael Forbes

 

with copy to:

 

Goldman Sachs Mortgage Company

85 Broad Street, 11th Floor

New York, New York 10004

Attention: 
Daniel Ottensoser and Rene Theriault

 

with copy to

 

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, New York 10006

Attention: Michael Weinberger, Esq.

 

and

 

Citicorp
North America, Inc.

388 Greenwich Street

New York, New York 10013

Attention:  Mr. David Bouton

 

with
copy to

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York  10153

Attention:  Samuel M. Zylberberg, Esq.
(EG)

 

92

 

If to Borrower:

 

c/o
Gramercy Capital Corp.

420 Lexington Avenue, 19th Floor

New York, New York 10170

Attention:  Robert R. Foley, Chief
Operating Officer

 

with copies to:

 

c/o Gramercy
Capital Corp.

420 Lexington Avenue, 19th Floor

New York, New York  10170

Attention:  Office of the General Counsel

 

Fried, Frank, Harris,
Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004-1980

Attention:  Jonathan L. Mechanic, Esq.

 

9.5.  TRIAL BY JURY.  LENDER, BORROWER AND THE SPONSOR, TO THE
FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY AGREE NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. 
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY
BY LENDER, BORROWER AND THE SPONSOR AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE.  EACH OF LENDER,
BORROWER AND SPONSOR IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN
ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY LENDER, BORROWER AND
THE SPONSOR, AS THE CASE MAY BE.

 

9.6.          Headings.  The Article and Section headings in
this Agreement are included in this Agreement for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.

 

9.7.          Assignment
and Participation.

 

(a)           Except as
explicitly set forth in Sections 2.1 and 2.2, Borrower may not
sell, assign or transfer any interest in the Loan Documents or any portion thereof
(including Borrower’s rights, title, interests, remedies, powers and duties
hereunder and thereunder).

 

93

 

(b)          Lender
and each assignee of all or a portion of the Loan shall have the right from
time to time in its discretion to sell one or more of the Notes or any interest
therein (an “Assignment”) and/or sell a participation interest in one or
more of the Notes (a “Participation”). 
Borrower agrees reasonably to cooperate with Lender, at Lender’s
request, in order to effectuate any such Assignment or Participation.  In the case of an Assignment, (i) each
assignee shall have, to the extent of such Assignment, the rights, benefits and
obligations of the assigning Lender as a “Lender” hereunder and under the other
Loan Documents, (ii) the assigning Lender shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to an Assignment,
relinquish its rights and be released from its obligations under this
Agreement, and (iii) one Lender shall at all times serve as agent for all
Lenders and shall be the sole Lender to whom notices, requests and other
communications shall be addressed and the sole party authorized to grant or
withhold consents hereunder on behalf of the Lenders (subject, in each case, to
appointment of a Servicer, pursuant to Section 9.22, to receive
such notices, requests and other communications and/or to grant or withhold
consents or waivers or give notices, as the case may be) and to be the sole
Lender to designate the account to which payments shall be made by Borrower to
the Lenders hereunder (and Borrower may fully rely thereon, notwithstanding any
contrary notice from any other Lender), and (iv) any assigning Lender that
no longer holds any portion of the Loan shall deliver any Collateral held by it
as Lender to the other Lenders or their custodian and, if reasonably requested
by Borrower, shall deliver notices (prepared by Borrower and reasonably
satisfactory to such assigning Lender) to Tenants and/or the Cash Management
Bank confirming such assignment.  Goldman Sachs Mortgage Company or, upon the
appointment of a Servicer, such Servicer, shall maintain, or cause to be
maintained, as agent for Borrower, a register on which it shall enter the name
or names of the registered owner or owners from time to time of the Notes.  Borrower agrees that upon
effectiveness of any Assignment of any Note in part, Borrower will promptly
provide to the assignor and the assignee separate promissory notes in the
amount of their respective interests (but, if applicable, with a notation
thereon that it is given in substitution for and replacement of an original
Note or any replacement thereof), and otherwise in the form of such Note (and
with such other changes as may be reasonably required to reflect that such Note
evidences only a portion of the Loan and the provisions of clause (iii) above),
upon return of the Note then being replaced. The assigning Lender shall notify
in writing each of the other Lenders of any Assignment.  Each potential or actual assignee,
participant or investor in a Securitization, and each Rating Agency, shall be
entitled to receive all information received by Lender under this
Agreement.  After the effectiveness of
any Assignment, the party conveying the Assignment shall provide notice to
Borrower and each Lender of the identity and address of the assignee and the
amount so assigned.  Notwithstanding
anything in this Agreement to the contrary, after an Assignment, the assigning
Lender (in addition to the assignee) shall continue to have the benefits of any
indemnifications contained in this Agreement which such assigning Lender had
prior to such assignment with respect to matters occurring prior to the date of
such assignment.

 

(c)           If,
pursuant to this Section 9.7, any interest in this Agreement or any
Note is transferred to any transferee that is not a U.S. Person, the transferor
Lender shall cause such transferee, concurrently with the effectiveness of such
transfer, (i) to furnish to the transferor Lender either Form W-8BEN
or Form W-8ECI or any other form in order to

 

94

 

establish an exemption from, or reduction in the rate
of, U.S. withholding tax on all interest payments hereunder, and (ii) to
agree (for the benefit of Lender and Borrower) to provide the transferor Lender
a new Form W-8BEN or Form W-8ECI or any forms reasonably requested in
order to establish an exemption from, or reduction in the rate of, U.S.
withholding tax upon the expiration or obsolescence of any previously delivered
form and comparable statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by such transferee, and
to comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.

 

(d)          Borrower
shall bear its own costs and expenses incurred in connection with their
compliance with any request by Lender under this Section 9.7.

 

(e)           Each
Lender hereunder shall be individually and severally (and not jointly) liable
for the satisfaction of its obligations hereunder and under the other Loan
Documents.

 

9.8.         Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

 

9.9.         Preferences.  Lender shall have no obligation to marshal
any assets in favor of Borrower or any other party or against or in payment of
any or all of the obligations of Borrower pursuant to this Agreement, the Notes
or any other Loan Document.  During the
continuance of an Event of Default, Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by
Borrower to any portion of the obligations of Borrower hereunder and under the
Loan Documents.  To the extent Borrower
makes a payment or payments to Lender, which payment or proceeds or any portion
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or proceeds received, the
obligations hereunder or portion thereof intended to be satisfied shall be
revived and continue in full force and effect, as if such payment or proceeds
had not been received by Lender.

 

9.10.       Remedies of Borrower.  If a claim or adjudication is made that
Lender or its agents have unreasonably delayed acting or acted unreasonably in
any case where by law or under this Agreement, the Notes, or the other Loan
Documents, any of such Persons has an obligation to act promptly or reasonably,
Borrower agrees that no such Person shall be liable for any monetary damages,
and Borrower’s sole remedy shall be limited to commencing an action seeking
specific performance, injunctive relief and/or declaratory judgment, except in
any instance in which it has been finally determined by a court of competent
jurisdiction that Lender’s action, delay or inaction has constituted gross
negligence, willful misconduct or an illegal act.

 

9.11.       Offsets, Counterclaims and Defenses.  All payments made by Borrower hereunder or
under the other Loan Documents shall be made irrespective of, and without any
deduction for, any setoffs or counterclaims. 
Borrower waives the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or proceeding brought
against it by Lender arising out of or in any way connected with the Notes,
this Agreement, the other

 

95

 

Loan Documents or the Indebtedness.  Any assignee of Lender’s interest in the Loan
shall take the same free and clear of all offsets, counterclaims or defenses
which are unrelated to the Loan.

 

9.12.       No Joint Venture.  Nothing in this Agreement 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 any Mortgage
Loan Property other than that of mortgagee or lender.

 

9.13.       Conflict; Construction of Documents.  In the event of any conflict between the
provisions of this Agreement and the provisions of the Notes, the Mortgages or
any of the other Loan Documents, the provisions of this Agreement shall
prevail.

 

9.14.       Brokers and Financial Advisors.  Borrower represents that neither Borrower nor
Sponsor have dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the transactions contemplated by
this Agreement.  Borrower agrees to
indemnify and hold Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind in any way relating to or arising
from a claim by any Person that such Person acted on behalf of Borrower in
connection with the transactions contemplated in this Agreement.  The provisions of this Section 9.14
shall survive the expiration and termination of this Agreement and the
repayment of the Indebtedness.

 

9.15.       Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

 

9.16.       Estoppel Certificates.  Borrower and Lender each agrees at any time
and from time to time, to execute, acknowledge and deliver to the other, within
five Business Days after receipt of Lender’s or Borrower’s, as the case may be,
written request therefor, a statement in writing setting forth (A) the
Principal Indebtedness, (B) the date on which installments of interest
and/or principal were last paid, (C) in the case of Borrower’s estoppel,
any offsets or defenses to the payment of the Indebtedness, (D) in the
case of Borrower’s estoppel, that the Notes, this Agreement, and the other Loan
Documents are valid, legal and binding obligations, (E) that the Loan
Documents have not been modified or if modified, giving particulars of such
modification, (F) in the case of Borrower’s estoppel, that to Borrower’s
knowledge, Borrower is not in default under the Loan Documents (or specifying
any such default), and in the case of Lender’s estoppel, that Lender has not
delivered a written notice of default (or describing any such notice), and (G) such
other matters as Lender or Borrower may reasonably request.  Any prospective purchaser of any interest in
a Loan or any actual or prospective purchaser or holder of any direct or indirect
interest in the Borrowers (to the extent permitted hereunder) shall be
permitted to rely on such certificate.

 

9.17.       Payment of Expenses.  Borrower shall reimburse Lender upon receipt
of written notice from Lender for (i) all reasonable out-of-pocket costs
and expenses incurred by Lender (or any of its Affiliates) in connection with
the origination and any post-closing restructuring of the Loan, including legal
fees and disbursements, accounting fees, the Intercreditor Reallocation
Expenses and the costs of the Appraisal, the Engineering Report, the Qualified
Title Insurance Policy, the Qualified Survey, the Environmental Report and any
other

 

96

 

third-party diligence materials; (ii) all
reasonable out-of-pocket costs and expenses incurred by Lender (or any of its
Affiliates) in connection with (A) monitoring Borrower’s ongoing
performance of and compliance with Borrower’s agreements and covenants
contained in this Agreement and the other Loan Documents on its part to be
performed or complied with after the Closing Date, including confirming
compliance with environmental and insurance requirements, in each case if and
to the extent Lender has reasonable cause to suspect noncompliance, (B) the
negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement, the
other Loan Documents and any other documents or matters requested by Borrower
or by Lender (C) filing and recording fees and expenses and other similar
expenses incurred in creating and perfecting the Liens in favor of Lender
pursuant to this Agreement and the other Loan Documents, (D) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case
against, under or affecting Borrower, this Agreement, the other Loan Documents
or any Collateral, and (E) obtaining any Rating Confirmation required or
requested by Borrower hereunder; and (iii) all actual out-of-pocket costs
and expenses (including, if the Loan has been securitized and an Event of
Default has occurred, customary special servicing fees resulting therefrom)
incurred by Lender (or any of its Affiliates) in connection with the
enforcement of any obligations of Borrower, or a Default by Borrower, under the
Loan Documents, including any actual or attempted foreclosure, deed-in-lieu of
foreclosure, refinancing, restructuring or workout and any insolvency or
bankruptcy proceedings (including any applicable transfer taxes).

 

9.18.       No Third-Party Beneficiaries.  This Agreement and the other Loan Documents
are solely for the benefit of Lender and Borrower, and nothing contained in
this Agreement or the other Loan Documents shall be deemed to confer upon
anyone other than Lender and Borrower any right to insist upon or to enforce
the performance or observance of any of the obligations contained herein or
therein.  All conditions to the obligations
of Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender, and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled
to assume that Lender will refuse to make the Loan in the absence of strict
compliance with any or all thereof, and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole
discretion, Lender deems it advisable or desirable to do so.

 

9.19.       Recourse.

 

(a)           The
Loan shall be fully recourse to Borrower. 
No recourse shall be had for the Loan against any other Person,
including any Affiliate of Borrower or any officer, director, partner or equityholder
of Borrower or any such Affiliate, except for (i) claims against Sponsor
under the Guaranty and (ii) claims against Borrower and Sponsor under the
Environmental Indemnity.

 

(b)          Borrower
shall indemnify Lender and hold Lender harmless from and against any and all
Damages to Lender (plus the legal and other expenses of enforcing the
obligations of Borrower under this Section 9.19) resulting from or
arising out of any of the

 

97

 

following (the “Indemnified Liabilities”),
which Indemnified Liabilities shall be guaranteed by Sponsor, jointly and
severally, pursuant to the Guaranty:

 

(i)            any
intentional material physical Waste with respect to any Property committed or
permitted by any Borrower, the Sponsor or any of their respective Affiliates;

 

(ii)           any
fraud, willful misconduct or intentional material misrepresentation committed
by any Borrower, the Sponsor or any of their respective Affiliates;

 

(iii)          the misappropriation by any Borrower, the
Sponsor or any of their respective Affiliates of any funds in violation of the
Loan Documents (including misappropriation of Revenues, Distributions, security
deposits and/or Loss Proceeds and the violation of the last sentence of Section 5.7(d));

 

(iv)         any
breach by any Borrower or the Sponsor of any material representation or
covenant regarding environmental matters contained in this Agreement or in the
Environmental Indemnity;

 

(v)          the
failure of any Borrower, at any time, to comply with Single-Purpose Entity requirements
hereunder, in any material respect;

 

(vi)         any
failure to pay income tax liabilities of non pass-through entities comprising
any Borrower or its Affiliates;

 

(vii)        the failure of any Borrower to fully discharge
prior to the Closing Date any liabilities, contingent or otherwise, associated
with assets that were owned by Borrower or any of its Affiliates prior to the
Closing Date (including all employee liabilities), other than the Properties
and direct or indirect equity interests therein;

 

(viii)       failure to structure and consummate the Merger
in a manner that does not give rise to a shareholder lawsuit;

 

(ix)          any
liability of AFRT or its subsidiaries under any recourse carveout under any
Encumbered Property Debt, guaranty or similar obligations, in each case in
respect of Borrower, AFRT, Operating Partnership or any holding company;

 

(x)           any
failure by Borrower to cause each
holder of Encumbered Property Debt to add Lender as a party to whom all notices
of default must be given under the Encumbered Debt Documents; and any failure
by Borrower to instruct each holder of Encumbered Property Debt to accept any
payment from or action taken by Lender during the continuance of a default
thereunder as if it were received from or performed by the applicable Property
Owner; and any failure by Borrower to remit to any holder of Encumbered
Property Debt any amount proffered by Lender in order to cure a default
thereunder pursuant to Section 5.21;

 

(xi)          any
assumption fee, foreclosure fee or similar amount (and related expense
reimbursements) owed by Lender to any holder of Encumbered Property Debt or

 

98

 

related loan servicer as
a result of, or in order to permit, a foreclosure or transfer in lieu of
foreclosure of Collateral; and

 

(xii)         any failure of the representation made in Section 9.14
to be true and correct.

 

In addition to the foregoing (x) the Loan shall
be fully recourse to Borrower and Sponsor, jointly and severally, upon (i) 
any Transfer of Collateral or any Property, voluntary or collusive Lien on
Collateral or any Property, or Change
of Control which is prohibited hereunder or (ii) the occurrence of
any filing by any Borrower, Junior Mezzanine Borrower or Property Owner under
the Bankruptcy Code or any joining or colluding by any Borrower or any of their
respective Affiliates (including Sponsor) in the filing of an involuntary case
in respect of any Borrower, Junior Mezzanine Borrower or Property Owner under
the Bankruptcy Code; and (y) in the event AFRT shall fail to comply with Section 5.24,
the Loan shall be recourse to AFRT and Sponsor, jointly and severally, in an
amount equal to the Release Price of the applicable Property, plus all related
enforcement costs and any Damages resulting from a failure to release such
Property pursuant hereto.

 

9.20.       Right of Set-Off.  In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender may from time to time, without presentment, demand,
protest or other notice of any kind (all of such rights being hereby expressly
waived), set-off and appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by any Lender
(including branches, agencies or Affiliates of Lender wherever located) to or
for the credit or the account of Borrower against the obligations and
liabilities of Borrower to any Lender hereunder, under the Notes, the other
Loan Documents or otherwise, irrespective of whether such Lender shall have
made any demand hereunder and although such obligations, liabilities or claims,
or any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of Lender subsequent
thereto.

 

9.21.       Exculpation of Lender.  Lender neither undertakes nor assumes any
responsibility or duty to Borrower or any other party to select, review,
inspect, examine, supervise, pass judgment upon or inform Borrower or any third
party of (a) the existence, quality, adequacy or suitability of Appraisals
of the Properties or other Collateral, (b) any environmental report, or (c) any
other matters or items, including engineering, soils and seismic reports which
are contemplated in the Loan Documents. 
Any such selection, review, inspection, examination and the like, and
any other due diligence conducted by Lender, is solely for the purpose of
protecting Lender’s rights under the Loan Documents, and shall not render
Lender liable to Borrower or any third party for the existence, sufficiency,
accuracy, completeness or legality thereof.

 

9.22.       Servicer. 
Lender may delegate any and all rights and obligations of Lender
hereunder and under the other Loan Documents to the Servicer upon notice by
Lender to Borrower, whereupon any notice or consent from the Servicer to Borrower,
and any action by Servicer on Lender’s behalf, shall have the same force and
effect as if Servicer were Lender.

 

99

 

Lender shall bear the cost of all servicing fees,
costs and expenses other than those to which Lender is expressly entitled to
reimbursement hereunder and under the other Loan Documents, including without
limitation, the Cooperation Agreement.

 

9.23        Prior
Agreements.  THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONTAIN THE ENTIRE AGREEMENT OF THE PARTIES HERETO AND
THERETO IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND ALL
PRIOR AGREEMENTS AMONG OR BETWEEN SUCH PARTIES, WHETHER ORAL OR WRITTEN,
INCLUDING ANY TERM SHEETS, CONFIDENTIALITY AGREEMENTS AND COMMITMENT LETTERS,
ARE SUPERSEDED BY THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(EXCEPT THAT ANY ORIGINATION FEE SPECIFIED IN ANY TERM SHEET, COMMITMENT LETTER
OR FEE LETTER SHALL BE AN OBLIGATION OF BORROWER AND SHALL BE PAID AT CLOSING,
AND ANY INDEMNIFICATIONS,  FLEX
PROVISION, EXIT FEES AND THE LIKE PROVIDED FOR THEREIN SHALL SURVIVE THE
CLOSING).

 

100

 

Lender and Borrower are executing this Agreement as of
the date first above written.

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  GOLDMAN SACHS MORTGAGE
  COMPANY, a

  New York limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Goldman Sachs Real
  Estate Funding

  
	
   

  	
   

  	
  Corp., its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Mark Buono

  
	
   

  	
   

  	
   

  	
  Name: Mark Buono

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  CITICORP NORTH AMERICA,
  INC., a New York

  corporation

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Angelica Sukiennik

  
	
   

  	
   

  	
  Name: Angelica
  Sukiennik

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  

 

 

[Signatures
continue on following page]

 

1

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  The entities listed on
  Schedule A to this

  
	
   

  	
  signature page

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward J.
  Matey, Jr.

  
	
   

  	
   

  	
  Name: Edward J.
  Matey, Jr.

  
	
   

  	
   

  	
  Title: General Counsel
  and Vice President

  

 

 

Schedule A to Signature Page

 

GKK Stars Acquisition LLC (DE)

American Financial Realty Trust (MD)

First States Group, L.P. (DE)

American Financial TRS, Inc. (DE)

First States Group, LLC (DE)

First States Investors 104 Holdings, L.P.

(DE)

First States Investors 240 Holdings, LLC

(DE)

First States Investors 241 Holdings, LLC

(DE)

First States Investors 3300 Holdings, LLC

(DE)

First States Investors 4000A, L.P. (DE)

First States Investors 4100, LLC (DE)

First States Investors 4600 Holdings, LLC

(DE)

First States Investors 5000, LLC (DE)

First States Investors 6000, LLC

First States Investors 801, L.P. (PA)

First States Investors 923 Holdings, L.P.

First States Investors 927 Holdings, LLC

First States Investors Asset Group A, L.P.

First States Investors GS Pool A Holdings,

LLC (DE)

First States Investors GS Pool B Holdings,

LLC (DE)

First States Investors, L.P. (DE)

First States Partners III, L.P. (DE)

First States Partners, L.P.

First States Properties, L.P. (PA)

First States Wilmington JV, L.P.Exhibit
10.3

 

JUNIOR MEZZANINE 
LOAN AGREEMENT

 

Dated as of August 22, 2008

 

between

 

GKK STARS JUNIOR MEZZ 2 LLC,

 

as Borrower

 

and

 

THE LENDERS NAMED HEREIN

 

collectively, as Lender

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  GENERAL TERMS

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  The Loan

  	
  35

  
	
  Section 1.2.

  	
   

  	
  The Term

  	
  35

  
	
  Section 1.3.

  	
   

  	
  Interest and Principal

  	
  35

  
	
  Section 1.4.

  	
   

  	
  Interest Rate Cap Agreements

  	
  36

  
	
  Section 1.5.

  	
   

  	
  Method and Place of Payment

  	
  37

  
	
  Section 1.6.

  	
   

  	
  Regulatory Change

  	
  38

  
	
  Section 1.7.

  	
   

  	
  Taxes

  	
  38

  
	
  Section 1.8.

  	
   

  	
  Release

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
  VOLUNTARY
  PREPAYMENT

  
	
   

  
	
  Section 2.1.

  	
   

  	
  Voluntary Prepayment

  	
  39

  
	
  Section 2.2.

  	
   

  	
  Property Releases

  	
  41

  
	
  Section 2.3.

  	
   

  	
  Value Add Pool Equity
  Releases

  	
  43

  
	
  Section 2.4.

  	
   

  	
  Release of Vacant Land

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  ACCOUNTS

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Cash Management Account

  	
  46

  
	
  Section 3.2.

  	
   

  	
  Distributions from Cash
  Management Account

  	
  47

  
	
  Section 3.3.

  	
   

  	
  Senior
  Mezzanine Loan Covenants; Replacement of Senior Mezzanine Loan Collateral
  Accounts

  	
  48

  
	
  Section 3.4.

  	
   

  	
  Account Collateral

  	
  49

  
	
  Section 3.5.

  	
   

  	
  Bankruptcy

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  REPRESENTATIONS

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Organization

  	
  50

  
	
  Section 4.2.

  	
   

  	
  Authorization

  	
  51

  
	
  Section 4.3.

  	
   

  	
  No Conflicts

  	
  51

  
	
  Section 4.4.

  	
   

  	
  Consents

  	
  51

  
	
  Section 4.5.

  	
   

  	
  Enforceable Obligations

  	
  52

  
	
  Section 4.6.

  	
   

  	
  No Default

  	
  52

  
	
  Section 4.7.

  	
   

  	
  Payment of Taxes

  	
  52

  
	
  Section 4.8.

  	
   

  	
  Compliance with Law

  	
  52

  
	
  Section 4.9.

  	
   

  	
  ERISA

  	
  52

  

 

i

 

	
  Section 4.10.

  	
   

  	
  Investment Company Act

  	
  53

  
	
  Section 4.11.

  	
   

  	
  No Bankruptcy Filing

  	
  53

  
	
  Section 4.12.

  	
   

  	
  Other Debt

  	
  53

  
	
  Section 4.13.

  	
   

  	
  Litigation

  	
  53

  
	
  Section 4.14.

  	
   

  	
  Leases; Material Agreements

  	
  54

  
	
  Section 4.15.

  	
   

  	
  Full and Accurate Disclosure

  	
  54

  
	
  Section 4.16.

  	
   

  	
  Financial Condition

  	
  55

  
	
  Section 4.17.

  	
   

  	
  Single-Purpose Requirements

  	
  55

  
	
  Section 4.18.

  	
   

  	
  [Intentionally Omitted]

  	
  55

  
	
  Section 4.19.

  	
   

  	
  Not Foreign Person

  	
  55

  
	
  Section 4.20.

  	
   

  	
  Labor Matters

  	
  55

  
	
  Section 4.21.

  	
   

  	
  Title

  	
  55

  
	
  Section 4.22.

  	
   

  	
  No Encroachments

  	
  56

  
	
  Section 4.23.

  	
   

  	
  Physical Condition

  	
  56

  
	
  Section 4.24.

  	
   

  	
  Fraudulent Conveyance

  	
  57

  
	
  Section 4.25.

  	
   

  	
  Management

  	
  57

  
	
  Section 4.26.

  	
   

  	
  Condemnation

  	
  57

  
	
  Section 4.27.

  	
   

  	
  Utilities and Public Access

  	
  58

  
	
  Section 4.28.

  	
   

  	
  Environmental Matters

  	
  58

  
	
  Section 4.29.

  	
   

  	
  Assessments

  	
  59

  
	
  Section 4.30.

  	
   

  	
  No Joint Assessment

  	
  59

  
	
  Section 4.31.

  	
   

  	
  Separate Lots

  	
  59

  
	
  Section 4.32.

  	
   

  	
  Permits; Certificate of
  Occupancy

  	
  59

  
	
  Section 4.33.

  	
   

  	
  Flood Zone

  	
  59

  
	
  Section 4.34.

  	
   

  	
  Security Deposits

  	
  59

  
	
  Section 4.35.

  	
   

  	
  Acquisition Documents

  	
  59

  
	
  Section 4.36.

  	
   

  	
  Insurance

  	
  59

  
	
  Section 4.37.

  	
   

  	
  Ground Leased Parcels

  	
  60

  
	
  Section 4.38.

  	
   

  	
  Intentionally Omitted

  	
  61

  
	
  Section 4.39.

  	
   

  	
  Estoppel Certificates

  	
  61

  
	
  Section 4.40.

  	
   

  	
  Embargoed Person

  	
  61

  
	
  Section 4.41.

  	
   

  	
  Compliance with
  Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws

  	
  62

  
	
  Section 4.42.

  	
   

  	
  Tax Basis

  	
  62

  
	
  Section 4.43.

  	
   

  	
  Survival

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  AFFIRMATIVE COVENANTS

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Existence

  	
  63

  
	
  Section 5.2.

  	
   

  	
  Maintenance of Property

  	
  63

  
	
  Section 5.3.

  	
   

  	
  Compliance with Legal
  Requirements

  	
  63

  
	
  Section 5.4.

  	
   

  	
  Impositions and Other Claims

  	
  63

  
	
  Section 5.5.

  	
   

  	
  Access to Property

  	
  64

  
	
  Section 5.6.

  	
   

  	
  Cooperate in Legal
  Proceedings

  	
  64

  
	
  Section 5.7.

  	
   

  	
  Leases

  	
  64

  
	
  Section 5.8.

  	
   

  	
  Plan Assets, etc.

  	
  67

  

 

ii

 

	
  Section 5.9.

  	
   

  	
  Further Assurances

  	
  67

  
	
  Section 5.10.

  	
   

  	
  Management of Properties and
  Senior Mezzanine Loan Collatera;

  	
  67

  
	
  Section 5.11.

  	
   

  	
  Notice of Material Change

  	
  68

  
	
  Section 5.12.

  	
   

  	
  Annual Financial Statements

  	
  69

  
	
  Section 5.13.

  	
   

  	
  Quarterly Financial
  Statements

  	
  69

  
	
  Section 5.14.

  	
   

  	
  Monthly Financial Statements

  	
  70

  
	
  Section 5.15.

  	
   

  	
  Insurance

  	
  71

  
	
  Section 5.16.

  	
   

  	
  Casualty and Condemnation

  	
  71

  
	
  Section 5.17.

  	
   

  	
  Annual Budget

  	
  71

  
	
  Section 5.18.

  	
   

  	
  General Indemnity

  	
  72

  
	
  Section 5.19.

  	
   

  	
  Nonbinding Consultation

  	
  72

  
	
  Section 5.20.

  	
   

  	
  Compliance with Encumbrances

  	
  72

  
	
  Section 5.21.

  	
   

  	
  Encumbered Property
  Indebtedness

  	
  73

  
	
  Section 5.22.

  	
   

  	
  Disposition Assets

  	
  74

  
	
  Section 5.23.

  	
   

  	
  Distributions

  	
  74

  
	
  Section 5.24.

  	
   

  	
  Enumbered Property Defaults

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  NEGATIVE COVENANTS

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Liens on the Properties and
  Collateral

  	
  75

  
	
  Section 6.2.

  	
   

  	
  Ownership

  	
  75

  
	
  Section 6.3.

  	
   

  	
  Transfer

  	
  75

  
	
  Section 6.4.

  	
   

  	
  Debt

  	
  77

  
	
  Section 6.5.

  	
   

  	
  Dissolution; Merger or
  Consolidation

  	
  77

  
	
  Section 6.6.

  	
   

  	
  Change In Business

  	
  77

  
	
  Section 6.7.

  	
   

  	
  Debt Cancellation

  	
  77

  
	
  Section 6.8.

  	
   

  	
  Affiliate Transactions

  	
  77

  
	
  Section 6.9.

  	
   

  	
  Misapplication of Funds

  	
  77

  
	
  Section 6.10.

  	
   

  	
  Jurisdiction of Formation

  	
  78

  
	
  Section 6.11.

  	
   

  	
  Modifications and Waivers

  	
  78

  
	
  Section 6.12.

  	
   

  	
  ERISA

  	
  78

  
	
  Section 6.13.

  	
   

  	
  Alterations and Expansions

  	
  79

  
	
  Section 6.14.

  	
   

  	
  Advances and Investments

  	
  79

  
	
  Section 6.15.

  	
   

  	
  Single-Purpose Entity

  	
  79

  
	
  Section 6.16.

  	
   

  	
  Zoning and Uses

  	
  79

  
	
  Section 6.17.

  	
   

  	
  Waste

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  DEFAULTS

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  Event of Default

  	
  80

  
	
  Section 7.2.

  	
   

  	
  Remedies

  	
  83

  
	
  Section 7.3.

  	
   

  	
  No Waiver

  	
  84

  
	
  Section 7.4.

  	
   

  	
  Application of Payments after
  an Event of Default

  	
  84

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  CONDITIONS PRECEDENT

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Conditions Precedent to Closing

  	
  85

  

 

iii

 

	
  ARTICLE IX

  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Successors

  	
  88

  
	
  Section 9.2.

  	
   

  	
  GOVERNING LAW

  	
  88

  
	
  Section 9.3.

  	
   

  	
  Modification, Waiver in
  Writing

  	
  89

  
	
  Section 9.4.

  	
   

  	
  Notices

  	
  89

  
	
  Section 9.5.

  	
   

  	
  TRIAL BY JURY

  	
  90

  
	
  Section 9.6.

  	
   

  	
  Headings

  	
  91

  
	
  Section 9.7.

  	
   

  	
  Assignment and Participation

  	
  91

  
	
  Section 9.8.

  	
   

  	
  Severability

  	
  92

  
	
  Section 9.9.

  	
   

  	
  Preferences

  	
  92

  
	
  Section 9.10.

  	
   

  	
  Remedies of Borrower

  	
  92

  
	
  Section 9.11.

  	
   

  	
  Offsets, Counterclaims and
  Defenses

  	
  93

  
	
  Section 9.12.

  	
   

  	
  No Joint Venture

  	
  93

  
	
  Section 9.13.

  	
   

  	
  Conflict; Construction of
  Documents

  	
  93

  
	
  Section 9.14.

  	
   

  	
  Brokers and Financial
  Advisors

  	
  93

  
	
  Section 9.15.

  	
   

  	
  Counterparts

  	
  93

  
	
  Section 9.16.

  	
   

  	
  Estoppel Certificates

  	
  93

  
	
  Section 9.17.

  	
   

  	
  Payment of Expenses; Mortgage
  Recording Taxes

  	
  94

  
	
  Section 9.18.

  	
   

  	
  No Third-Party Beneficiaries

  	
  94

  
	
  Section 9.19.

  	
   

  	
  Recourse

  	
  94

  
	
  Section 9.20.

  	
   

  	
  Right of Set-Off

  	
  96

  
	
  Section 9.21.

  	
   

  	
  Exculpation of Lender

  	
  96

  
	
  Section 9.22.

  	
   

  	
  Servicer

  	
  97

  
	
  Section 9.23.

  	
   

  	
  Prior Agreements

  	
  97

  

 

iv

 

JUNIOR MEZZANINE LOAN AGREEMENT

 

Junior Mezzanine Loan Agreement (this “Agreement”) is dated as August 22,
2008 (“Effective Date”) and is between GOLDMAN SACHS MORTGAGE COMPANY, a
New York limited partnership (“GSMC”), CITICORP NORTH AMERICA, INC., a
New York corporation (“Citigroup”), and SL GREEN REALTY CORP., a
Maryland corporation (“SL Green”, and together with GSMC, Citigroup and
their respective successors and assigns, including any lawful holder of any
portion of the Indebtedness (as hereinafter defined) collectively, “Lender”),
as lender, and GKK STARS JUNIOR MEZZ 2 LLC, a Delaware limited liability
company (“Borrower”), as borrower.

 

RECITALS

 

Goldman Sachs Commercial Mortgage Capital, L.P. (“GSCMC”), as
predecessor in interest to GSMC, Citigroup and SL Green made a loan (the “Original
Mezzanine Loan”) in the original principal amount of $600,000,000 to
Affiliates of Borrower on the Closing Date on the terms and conditions set
forth in that certain Loan Agreement (“Original Loan Agreement”), dated
as of April 1, 2008 (“Original Closing Date”) among Lender and such
Affiliates of Borrower.

 

GSCMC assigned its right, title and interest in and to the Original
Mezzanine Loan to GSMC.

 

Lender desires to bifurcate the Original Mezzanine Loan into two separate
mezzanine loans, a senior mezzanine loan with an original principal balance of
$500,000,000 and the Loan (as hereinafter defined).  In furtherance thereof, (i) Lender and
the borrower under the Original Mezzanine Loan have amended and restated the
Original Loan Agreement and the related promissory notes and (ii) Borrower
and Lender are entering into this Agreement and Borrower is issuing promissory
notes to evidence the Loan.

 

Lender and Borrower therefore agree as follows:

 

DEFINITIONS

 

(a)           When used in this
Agreement, the following capitalized terms have the following meanings:

 

“Acceptable Counterparty” means any counterparty to an Interest
Rate Cap Agreement that has and maintains (a) either (i) a long-term
unsecured debt rating or counterparty rating of A+ or higher from S&P, or (ii) a
short-term unsecured debt rating of A-1 or higher from S&P, and (b) a
long-term unsecured debt rating of Aa3 or higher from Moody’s.

 

 “Account Collateral”
means, collectively, the Collateral Accounts and all sums at any time held,
deposited or invested therein, together with any interest or other earnings
thereon, and all proceeds thereof (including proceeds of sales and other
dispositions), whether accounts, general intangibles, chattel paper, deposit
accounts, instruments, documents or securities.

 

1

 

“Affiliate” means, with respect to any Person,
any other Person controlling, controlled by or under common control with such
Person (and “unaffiliated” means not an Affiliate).

 

“Affiliated Release Price” has the meaning set forth in Exhibit I.

 

“AFRT” means American Financial Realty Trust, a Maryland real
estate investment trust.

 

“AFRT Equity” means 100% of the real estate investment trust
equity interests in AFRT.

 

“AFRT Owner” means GKK Stars Acquisition LLC, a Delaware limited
liability company.

 

“Aggregate Allocated Loan Amount” means, with respect to each
Property listed in Schedule E, the amount set forth in Schedule E
(which reflects the portion of the sum of (x) the Loan Amount (y) the
Senior Mezzanine Loan Amount and (z) the initial Encumbered Property Debt
allocated to such Property hereunder), subject to reduction to the extent
necessary to reflect Borrower’s then direct or indirect interest therein with
respect to any Joint Venture Property permitted hereunder.  The Aggregate Allocated Loan Amount of each
Property not listed on Schedule E shall be zero.

 

“Agreement” means this Junior Mezzanine Loan Agreement, as the
same may from time to time hereafter be modified or replaced.

 

“Allocated Loan Amount” means, with respect to
each Property, (x) the Aggregate Allocated Loan Amount, minus (y) the
portion of the applicable Encumbered Property Debt allocated to such Property
pursuant to the applicable Encumbered Property Debt Documents (but in no event
shall the Allocated Loan Amount of any Property be less than zero.

 

“ALTA” means the American Land Title Association, or any
successor thereto.

 

“Alteration” means any demolition, alteration, installation,
improvement  or expansion of or to any of
the Properties or any portion thereof other than (i) Tenant Improvements
required under Leases, (ii) any demolition, alteration, installation,
improvement or expansion performed in connection with the restoration of any of
the Properties as a result of a Casualty or Condemnation, (iii) routine
maintenance and repair worked performed at any of the Properties in the
ordinary course of business, and (iv) any demolition, alteration,
installation, improvement or expansion performed by any Tenant where such
Tenant is entitled to do the same without obtaining the consent or approval of
the relevant Property Owner pursuant to the applicable lease.

 

“Annual Budget” means a capital and operating expenditure budget
for the Properties prepared by Borrower and specifying amounts sufficient to
operate and maintain the Properties at a standard at least equal to that
maintained on the Closing Date.

 

2

 

“Appraisal” means an as-is appraisal that is prepared by a
member of the Appraisal Institute selected by Lender, meets the minimum
appraisal standards for national banks promulgated by the Comptroller of the
Currency pursuant to Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, as amended (FIRREA) and complies with the Uniform
Standards of Professional Appraisal Practice (USPAP).

 

“Approved Accounting Firm” means (i) PricewaterhouseCoopers,
(ii) Deloitte & Touche, (iii) KPMG, (iv) The Schonbraun
McCann Group, (v) Ernst & Young, (vi) Berdon LLP or any
other independent accounting firm reasonably approved by Lender in writing.

 

“Approved Annual Budget” has the meaning set forth in Section 5.17.

 

“Approved
Management Agreement” means, collectively or individually as the context
may require, those certain Property Management Agreements listed on Schedule
T, dated as of the Closing Date, between Borrower or a Property Owner and
the initial Approved Property Manager, as the same may be modified or replaced
in accordance herewith with the reasonable consent of Lender, and any other
management agreement that is approved by Lender, which approval shall not be
unreasonably withheld, conditioned or delayed, and with respect to which Lender
receives Rating Confirmation.

 

“Approved Property Manager” means (i) Sponsor, SL Green
Realty Corp. and their respective Affiliates, (ii) First States Management
Corp, L.P., (iii) First States Services Management LLC, (iv) GKK
Manager LLC, so long as it is an Affiliate of Sponsor, or (v) any other management
company that is approved by Lender, which approval shall not be unreasonably
withheld, conditioned or delayed, and with respect to which Lender receives
Rating Confirmation, in each case unless and until Lender requests the
termination of that management company pursuant to Section 5.10(d).

 

“Assignment” has the meaning set forth in Section 9.7(b).

 

“Assignment of Interest Rate Cap Agreement” means each
collateral assignment of an interest rate cap agreement executed by Borrower
and an Acceptable Counterparty in accordance herewith, each of which must be in
the form executed by Senior Mezzanine Borrower and the initial Acceptable
Counterparty on the Closing Date, as the same may from time to time be modified
or replaced in accordance therewith and herewith.

 

“Bankruptcy Code” has the meaning set forth in Section 7.1(d).

 

“Blocked Account” has the meaning set forth in Section 3.1(b).

 

“Blocked Account Agreement” has the meaning set
forth in Section 3.1(b).

 

“Borrower” has the meaning set forth in the first paragraph of
this agreement.

 

“Borrower’s knowledge,” “the knowledge of Borrower” and
similar phrases shall (and shall be limited to) the actual (as distinguished
from imputed or construction knowledge) of Edward J. Matey, Jr., Sonya A.
Huffman, David Schonbraun, Andrew Levine and, with respect to leasing matters, Neil Kessner (and
Borrower hereby represents that such individuals are

 

3

 

charged with having knowledge regarding the Borrower
and the Properties relevant to the representations made herein); provided,
however, with respect to any use of this defined term as of a date after the
Closing Date, “Borrower’s knowledge” and “the knowledge of Borrower” shall be
deemed to include such knowledge of any Person who shall assume any actual or
contemplated function of the foregoing persons in the context in which this
defined term is being used as of the date with respect to which such knowledge
is determined.  Lender acknowledges that
the foregoing individuals are identified solely for the purpose of defining the
scope of Borrower’s knowledge and not for the purpose of imposing personal
liability or creating any duties running from any such individual to Lender.

 

“Business Day” means any day other than (i) a Saturday and
a Sunday and (ii) a day on which federally insured depository institutions
in the State of New York or the state in which the offices of Lender, its
trustee, its Servicer or its Servicer’s collection account are located are
authorized or obligated by law, governmental decree or executive order to be
closed. When used with respect to an Interest Determination Date, “Business
Day” shall mean a day on which banks are open for dealing in foreign
currency and exchange in London.

 

“Capital Expenditure” means hard and soft costs incurred by
Senior Mezzanine Borrower or its Affiliates with respect to replacements and
capital repairs made to the Properties (including repairs to, and replacements
of, structural components, roofs, building systems, parking garages, parking
lots, and expenditures for building improvements or major repairs), Leasing
Commissions and Tenant Improvements, in each case to the extent capitalized in
accordance with GAAP.

 

“Cash Management Bank” means a depository institution selected
by Lender in which Eligible Accounts may be maintained.  The initial Cash Management Bank shall be
LaSalle Bank, N.A.

 

“Casualty” means a fire, explosion, flood, collapse, earthquake
or other casualty affecting all or any portion of any Property.

 

“Certificates” means, collectively, any senior and/or
subordinate notes, debentures or pass-through certificates, or other evidence
of indebtedness, or debt or equity securities, or any combination of the
foregoing, representing a direct or beneficial interest, in whole or in part,
in the Loan or the Mortgage Loan, as the case may be.

 

“Change of Control” means the occurrence of
either or both of the following excluding any Transfer permitted in connection
with joint ventures pursuant to Section 6.3(b) or Section 2.3:
(i) the failure of Borrower or any individual Senior Mezzanine Borrower
and/or Property Owner (other than a Joint Venture Owner or any subsidiary
thereof) to be directly or indirectly 100% owned and controlled by Sponsor, or (ii) the
failure of any Single-Purpose Equityholder (if any) to be directly or
indirectly 100% owned and controlled by Sponsor.

 

“Closing Date” means August 22, 2008.

 

4

 

“Code” means 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
in temporary or final form.

 

“Collateral” means all assets owned from time to time by Borrower
including, without limitation, 100% of the issued and outstanding limited
liability company interests in Senior Mezzanine Borrower and all other tangible
and intangible property in respect of which Lender is granted a Lien under the
Loan Documents, and all proceeds thereof.

 

“Collateral Accounts” means such accounts into which amounts
pursuant to Section 3.1 shall be deposited and such accounts
established pursuant to Section 3.3.

 

“Component Balance” has the meaning set forth in Section 1.3(c).

 

“Component Spread” has the meaning set forth in Section 1.3(c).

 

“Componentization Notice” has the meaning set forth in Section 1.3(c).

 

“Condemnation” means a taking or voluntary
conveyance of all or part of any of the Properties or any interest in or right
accruing to or use of any of the Properties, as the result of, or in settlement
of, any condemnation or other eminent domain proceeding by any Governmental
Authority.

 

“Consumer Price Index” means the
Consumer Price Index for All Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of Labor, New York Metropolitan
Statistical Area, All Items (1982-84=100), or any successor index thereto,
approximately adjusted, and in the event that the Consumer Price Index is
converted to a different standard reference base or otherwise revised, the
determination of adjustments provided for herein shall be made with the use of
such conversion factor, formula or table for converting the Consumer Price
Index as may be published by the Bureau of Labor Statistics or, if said Bureau
shall not publish the same, then with the use of such conversion factor,
formula or table as may be published by Prentice-Hall, Inc., or any other
nationally recognized publisher of similar statistical information; and if the
Consumer Price Index ceases to be published, and there is no successor thereto,
such other index as Lender and Borrower, each acting reasonably, shall agree
upon in writing.

 

“Contingent Obligation” means, with respect to any Person, any
obligation of such Person directly or indirectly guaranteeing any Debt of any
other Person in any manner and any contingent obligation to purchase, to
provide funds for payment, to supply funds to invest in any other Person or
otherwise to assure a creditor against loss.

 

“Cooperation Agreement” means that certain Cooperation
Agreement, dated as of the Closing Date, among Borrower, Lender and Sponsor, as
the same may from time to time be modified or replaced in accordance herewith.

 

“Damages” to a party means any and all liabilities, obligations,
losses, damages, penalties, assessments, actions, judgments, suits, claims,
costs, expenses (including reasonable attorneys’ fees whether or not suit is
brought), settlement costs and disbursements imposed on,

 

5

 

incurred by or asserted against such party; provided,
however, Damages shall exclude consequential damages incurred by Lender or
Indemnified Parties, as the case may be.

 

“Dana Portfolio” means those certain Properties specified in Schedule
Q, as modified from time to time to reflect any Transfer permitted pursuant
hereto.

 

“Dana Excess Cash Flow” means, for so long as the Dana
Portfolio, or any interest therein, shall be subject to the Liens of the Loan,
all Distributions deposited into the Cash Management Account that are
attributable to the Dana Portfolio.

 

“Dana Release Price” has the meaning set forth in Exhibit I.

 

“Debt” means, with respect to any Person,
without duplication:

 

(i)            all
indebtedness of such Person to any other party (regardless of whether such
indebtedness is evidenced by a written instrument such as a note, bond or
debenture), including indebtedness for borrowed money or for the deferred
purchase price of property or services;

 

(ii)           all letters of
credit issued for the account of such Person and all unreimbursed amounts drawn
thereunder;

 

(iii)          all
indebtedness secured by a Lien on any property owned by such Person (whether or
not such indebtedness has been assumed) except obligations for impositions
which are not yet due and payable;

 

(iv)          all Contingent
Obligations of such Person;

 

(v)           all payment
obligations of such Person under any interest rate protection agreement
(including any interest rate swaps, floors, collars or similar agreements) and
similar agreements;

 

(vi)          all contractual
indemnity obligations of such Person, other than those made in the ordinary
course of business in connection with the provision of goods and services to
one or more of the Properties; and

 

(vii)         any
material actual or contingent liability to any Person or Governmental Authority
with respect to any employee benefit plan (within the meaning of Section 3(3) of
ERISA) subject to Title IV of ERISA, Section 302 of ERISA or Section 412
of the Code.

 

“Debt Service” means, with respect to
any Test Period, the product of (x) the Principal Indebtedness plus the
Senior Mezzanine Loan Principal Indebtedness as of the last day of such Test
Period, times (y) the sum of the LIBOR Strike Rate plus the
weighted average of the Spread and the “Spread” under and as defined in the
Senior Mezzanine Loan Agreement, times (z) a fraction, the
numerator of which is 365 and the denominator of which is 360.

 

6

 

“Default” means the occurrence and uncured continuance of any
event which, but for the giving of notice or the passage of time, or both,
would be an Event of Default.

 

“Default Rate” means, with respect to any Note or Note
Component, the greater of (x) 4% per annum in excess of the interest rate
otherwise applicable to such Note or Note Component hereunder and (y) 1%
per annum in excess of the Prime Rate from time to time.

 

“Deferred
Maintenance Conditions” means the immediate repair and similar maintenance
items set forth in the Engineering Reports applicable to the Properties and
delivered to Senior Mezzanine Borrower on or prior to the Closing Date.

 

“Disposition Assets” means the real property listed on Schedule
R.

 

“Distributions” means all (i) payments and distributions
and (ii) proceeds (as defined in Article 9 of the UCC) in respect of
the income, profits, payments, returns of capital, dividends and other
distributions (whether in the form of cash or otherwise), in each case,
actually distributed by the owner of an Encumbered Property, the TRS Owner or
any Joint Venture Owner to any Senior Mezzanine Borrower.

 

“DSCR” means, with respect to any Test
Period, the quotient of:

 

 (i)           Net Operating Income for such period, less actual
aggregate principal, interest and required reserve payments (in each case, due
and payable, or then required to be reserved) in respect of Encumbered Property
Debt for such Test Period (adjusted to reflect Encumbered Properties that have
been theretofore released from the Liens of the Loan Documents), calculated, in
the case of floating rate Encumbered Property Debt, as if LIBOR were at all
times equal to the LIBOR strike rate on the interest rate cap purchased in
accordance with the corresponding Encumbered Property Debt Documents (or, if no
interest rate cap was required under such Encumbered Property Debt Documents,
LIBOR plus 3%), less, for purposes of calculating the LIBOR Strike Rate
for the Extension Term, projected Tenant Improvements and Leasing Commissions
reasonably approved by Lender and Normalized Capital Expenditures; divided
by

 

(ii)           the Debt
Service for such period.

 

Notwithstanding the foregoing, (a) rental income under the Lease
with Bank of America in respect of the Dana Portfolio for purposes of
calculating DSCR during the Extension Term or for purposes of calculating the
LIBOR Strike Rate for the Extension Term shall be deemed to be equal to the
annual rental payment that is contractually required to be paid by Bank of
America in respect of such Lease in January 2011 (i.e., rental payments
received under such Lease that are in excess of such January 2011 rental
amount shall be ignored for purposes of calculating DSCR) and (b) for
purposes of calculating DSCR at the time of the exercise of the extension
option described in Section 1.2(b), the LIBOR strike price for the
interest rate cap applicable to the Mortgage Loan shall be the LIBOR strike
price applicable to the extension term as described in clause (2) of the
definition of “LIBOR Strike Rate” in the Mortgage Loan Agreement.

 

7

 

“Eligible Account” means (i) a segregated account
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution, or (ii) a
segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state-chartered depository
institution which has an investment-grade rating and is subject to regulations
regarding fiduciary funds on deposit under, or similar to, Title 12 of the Code
of Federal Regulations Section 9.10(b) which, in either case, has
corporate trust powers, acting in its fiduciary capacity.

 

“Eligible Institution” means an institution (i) whose
commercial paper, short-term debt obligations or other short-term deposits are
rated at least A–1, Prime-1 or F-1, as applicable, by each of the Rating
Agencies and whose long-term senior unsecured debt obligations are rated
at least A or A2, as applicable, by each of the Rating Agencies, and whose
deposits are insured by the FDIC or (ii) with respect to which Lender
shall have received Rating Confirmation.

 

“Embargoed Person” has the meaning set forth in Section 4.40.

 

“Encumbered Property” means, individually or collectively, as
the context may require, each of the properties listed on Schedule A-2,
including each of the Properties securing the Mortgage Loan or otherwise owned
by the Mortgage Loan Property Owner, as modified from time to time to reflect
any Transfer permitted pursuant to Section 2.2.

 

“Encumbered Property Collateral” means the applicable percentage
of the direct and indirect equity interests in each Person that owns Encumbered
Property, as set forth on Schedule H hereto, as modified from time to
time to reflect any Transfer permitted pursuant to Section 6.3(b) or
Section 2.2.

 

“Encumbered Property Debt” or “Encumbered Property Loan”
means the Mortgage Loan and all indebtedness secured by Liens on Encumbered
Property pursuant to Encumbered Property Debt Documents.

 

“Encumbered Property Debt Documents” means, collectively or
individually, as the context may require, all loan documents in favor of any
Encumbered Property Lender with respect to each Encumbered Property as and to
the extent listed on Schedule U, as the same may be amended, replaced
(including, without limitation, in connection with any refinancing thereof
permitted hereunder) or otherwise modified from time to time with the prior
reasonable consent of Lender (Borrower acknowledging it shall be reasonable for
Lender to withhold such consent in connection with any amendment, replacement
or modification that would result in (i) an increase in the principal
amount, interest rate or the amortization of principal, (ii) limitations
on prepayments or the imposition of a fee in connection therewith, (iii) a
reduction on cash available for distribution or (iv) a Material Adverse
Effect).  Lender hereby consents to the
modifications made to the Encumbered Property Debt Documents relating to the
Dana Portfolio as contemplated by that certain approval letter dated March 28,
2008 from the lender thereunder, a copy of which was provided to Lender prior
to the date hereof.

 

“Encumbered Property Lender” means, individually or
collectively, as the context may require, each holder of Encumbered Property
Debt.

 

8

 

“Encumbered Property Owner” means each owner of an Encumbered
Property.

 

“Encumbered Property Pledgor” means, individually or
collectively, as the context may require, each Person listed on Schedule H
hereto, as modified from time to time to reflect any Transfer permitted
pursuant to Section 6.3(b) or Section 2.2.

 

“Engineering Report” means a structural and seismic engineering
report or reports with respect to each of the Properties prepared by an
independent engineer reasonably approved by Lender and delivered to Lender in
connection with the Loan, and any amendments or supplements thereto delivered
to Lender.

 

“Environmental Claim” means any written notice, claim,
proceeding, investigation or demand by any Person or Governmental Authority
alleging or asserting liability with respect to Borrower, Senior Mezzanine
Borrower, any Property Owner or any of the Properties arising out of, based on
or resulting from (i) the alleged presence, Use or Release of any
Hazardous Substance, (ii) any alleged violation of any Environmental Law,
or (iii) any alleged injury or threat of injury to property, health or
safety or to the environment caused by Hazardous Substances.

 

“Environmental Indemnity” means, with respect to each Property,
that certain environmental indemnity agreement executed by Borrower and the
Sponsor as of the Closing Date, as the same may from time to time be modified
or replaced in accordance herewith.

 

“Environmental Laws” means any and all present and future
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, any judicial or administrative orders, decrees or
judgments thereunder, and any permits, approvals, licenses, registrations,
filings and authorizations, in each case as now or hereafter in effect,
relating to the pollution, protection or cleanup of the environment, relating
to the impact of Hazardous Substances on property, health or safety, or the Use
or Release of Hazardous Substances, or relating to the liability for or costs
of other actual or threatened danger to health or the environment.  The term “Environmental Law” includes,
but is not limited to, the following statutes, as amended, any successors
thereto, and any regulations promulgated pursuant thereto, and any state or
local statutes, ordinances, rules, regulations and the like addressing similar
issues:  the Comprehensive Environmental
Response, Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Materials Transportation Act; the Resource
Conservation and Recovery Act (including Subtitle I relating to underground
storage tanks); the Clean Water Act; the Clean Air Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health
Act; the Federal Water Pollution Control Act; the Federal Insecticide,
Fungicide and Rodenticide Act; the Endangered Species Act; the National
Environmental Policy Act; and the River and Harbors Appropriation Act.  The term “Environmental Law” also
includes, but is not limited to, any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, conditioning transfer of property upon a negative declaration or
other approval of a Governmental Authority of the environmental condition of a
property; or requiring notification or disclosure of Releases of Hazardous
Substances or other environmental conditions of a property to any Governmental
Authority or other Person, whether or not in connection with transfer of title
to or interest in property.

 

9

 

“Environmental Reports” means “Phase I Environmental Site
Assessments” as referred to in the ASTM Standards on Environmental Site
Assessments for Commercial Real Estate, E 1527-05 (and, if necessary, “Phase
II Environmental Site Assessments”), prepared by an independent environmental
auditor reasonably approved by Lender and delivered to Lender and any
amendments or supplements thereto delivered to Lender or Mortgage Lender, and
shall also include any other environmental reports delivered to Lender pursuant
to this Agreement, the Mortgage Loan Documents and the Environmental
Indemnities.

 

“ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated thereunder.

 

“ERISA Affiliate,” at any time, means each trade or business
(whether or not incorporated) that would, at the time, be treated together with
Borrower or any Property Owner as a single employer under Title IV or Section 302
of ERISA or Section 412 of the Code.

 

“ERISA Event” means (i) the occurrence of a “reportable
event” described in Section 4043 of ERISA (other than a “reportable event”
not subject to the provisions for 30-day notice to the PBGC) or (ii) the
provision or filing of a notice of intent to terminate a Plan other than in a
standard termination within the meaning of Section 4041 of ERISA or the
treatment of a Plan amendment as a distress termination under Section 4041
of ERISA, or (iii) the institution of proceedings to terminate a Plan by
the PBGC, or (iv) the existence of any “accumulated funding deficiency” or
“liquidity shortfall” (within the meaning of Section 302 of ERISA or Section 412
of the Code), whether or not waived, or (v) the occurrence or existence of
any other event or condition which might reasonably be expected to constitute
grounds for the termination of, or the appointment of a trustee to administer,
any Plan other than in a standard termination within the meaning of Section 4041
of ERISA or the imposition of any lien on the assets of Borrower under ERISA,
including as a result of the operation of Section 4069 of ERISA.

 

“Event of Default” has the meaning set forth in
Section 7.1.

 

“Exception Report” means the report prepared by Borrower and
attached to this Agreement as Schedule B, setting forth any exceptions
to the representations set forth in Article IV.

 

“Excess Transfer Proceeds” means Net Proceeds arising from the
Transfer of a Property to the extent such Net Proceeds exceed the applicable
Release Price.

 

“Extension Interest Rate Cap Agreement” means an interest rate
cap confirmation between an Acceptable Counterparty and Borrower, relating to
the Extension Term, which is, at all times, in substantially the form of Exhibit C
(together with an interest rate cap agreement and schedules relating thereto, which
are consistent in form and substance with the terms set forth in such
confirmation).

 

“Extension Term” has the meaning set forth in Section 1.2(b).

 

“Fiscal Quarter” means the three-month period ending on March 31,
June 30, September 30 and December 31 of each year, or such
other fiscal quarter of Borrower as 

 

10

 

Borrower may select from time to time with the prior
consent of Lender, such consent not to be unreasonably withheld.

 

“Fiscal Year” means the 12-month period ending on December 31
of each year, or such other fiscal year of Borrower as Borrower may select from
time to time with the prior consent of Lender, not to be unreasonably withheld.

 

“Fitch” means Fitch, Inc. and its successors.

 

“Force Majeure” means a delay due to acts of God,
governmental restrictions, stays, judgments, orders, decrees, enemy actions,
civil commotion, fire, casualty, strikes, work stoppage, shortages of labor or
materials or similar causes beyond the reasonable control of Borrower; provided
that, with respect to any of such circumstances, for the purposes of this
Agreement, (1) any period of Force Majeure shall apply only to performance
of the obligations necessarily affected by such circumstance and shall continue
only so long as Borrower is continuously and diligently using all reasonable
efforts to minimize the effect and duration thereof; and (2) Force Majeure
shall not include the unavailability or insufficiency of funds.

 

“Form W-8BEN” means Form W-8BEN (Certificate of
Foreign Status of Beneficial Owner for United States Tax Withholding) of the
Department of Treasury of the United States of America, and any successor form.

 

“Form W-8ECI” means Form W-8ECI (Certificate of
Foreign Person’s Claim for Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of America, and
any successor form.

 

“GAAP” means generally accepted accounting principles in the
United States of America, consistently applied, or such other method of
accounting used by Borrower for books and records which is reasonably
acceptable to Lender.

 

“Governmental Authority” means any federal, state, county,
regional, local or municipal government, any bureau, department, agency or
political subdivision thereof and any Person with jurisdiction exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government (including any court).

 

“Ground Lease” means, with respect to each Property, any ground
lease (but not a space lease) encumbering such Property or otherwise creating
the interest of Borrower, Senior Mezzanine Borrower or its applicable Affiliate
therein, which ground leases are more fully described on Schedule V, as
such ground lease may be modified or replaced from time to time in accordance
herewith.

 

“Ground Leased Parcel” means, with respect to each Property, any
portion of such Property with respect to which Borrower or its applicable
Affiliate is the lessee under a Ground Lease.

 

“Ground Rent” means rent payable pursuant to a Ground Lease, if
any.

 

11

 

“Guaranty” means that certain guaranty, dated as of the Closing
Date, executed by Sponsor for the benefit of Lender.

 

“Hazardous Substances” means any and all substances (whether
solid, liquid or gas) defined, listed, or otherwise classified as pollutants,
hazardous wastes, hazardous substances, hazardous materials, extremely hazardous
wastes, toxic substances, toxic pollutants, contaminants, pollutants or words
of similar meaning or regulatory effect under any present or future
Environmental Laws or that may have a negative impact on human health or the
environment or the presence of which on, in or under any of the Properties is
prohibited under Environmental Law, including petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, lead and
radon, and compounds containing them (including gasoline, diesel fuel, oil and
lead-based paint), and radioactive materials, flammables and explosives and
compounds containing them, but excluding substances of kinds and in amounts
which may ordinarily and customarily be used or stored in bank branch or office
properties (as the case may be) of the same quality as the Property as of the
date hereof for the purposes of cleaning or other maintenance or operations or
otherwise ordinarily found in bank branch or office properties (as the case may
be) of the same quality as the Property as of the date hereof and otherwise in
compliance in all material respects with all Environmental Laws.

 

“Increased
Costs” has the meaning set forth in Section 1.6.

 

“Indebtedness” means the Principal Indebtedness, together with
interest and all other obligations and liabilities of Borrower under the Loan
Documents, including all transaction costs and other amounts due or to become
due to Lender pursuant to this Agreement, under the Notes or in accordance with
any of the other Loan Documents, and all other amounts, sums and expenses
reimbursable by Borrower to Lender hereunder or pursuant to the Notes or any of
the other Loan Documents.

 

“Indemnified Liabilities” has the meaning set forth in Section 9.19(b).

 

“Indemnified Parties” has the meaning set forth in Section 5.18.

 

“Independent Director” of any corporation or limited liability
company means an individual who is duly admitted as an independent member of
Borrower or appointed as a member of the board of directors, board of managers
or other governing body of such corporation or limited liability company or, in
the case of a limited liability company, is a member of such limited liability
company and who is not, and has never been, and will not while serving as
Independent Director, be any of the following:

 

(i)            a partner, equityholder, manager,
director, officer or employee of Borrower, any Single-Purpose Equityholder,
Senior Mezzanine Borrower, any Property Owner or any of their respective
equityholders or Affiliates (other than as an independent member, director or
manager of an Affiliate of Borrower, Senior Mezzanine Borrower, any Property
Owner or any Single-Purpose Equityholder that is not in the direct chain of
ownership of Borrower and that is required by a creditor to be a single purpose
bankruptcy remote entity, provided that such independent director or manager is

 

12

 

employed by a
company that routinely provides professional independent directors or
managers);

 

(ii)           a creditor, supplier or service
provider (including provider of professional services) to Borrower, Senior
Mezzanine Borrower, any Property Owner, any Single-Purpose Equityholder or any
of their respective equityholders or Affiliates (other than a company that
routinely provides professional independent managers or directors and which
also provides lien search and other similar services to Borrower, Senior
Mezzanine Borrower, any Property Owner 
any Single-Purpose Equityholder or any of their respective equityholders
or Affiliates in the ordinary course of business);

 

(iii)          a family member of any such member,
partner, equityholder, manager, director, officer, employee, creditor, supplier
or service provider; or

 

(iv)          a Person that controls (whether directly,
indirectly or otherwise) any of (i), (ii) or (iii) above.

 

“Initial Interest Rate Cap Agreement” means an interest rate cap
confirmation between an Acceptable Counterparty and Borrower, relating to the
initial term of the Loan, which is, at all times, in substantially the form of Exhibit C
(together with an interest rate cap agreement and schedules relating thereto,
which are consistent in form and substance with the terms set forth in such
confirmation), as amended to reflect the reallocation of principal between the
Loan and the Senior Mezzanine Loan.

 

“Insurance Requirements” means, collectively, (i) all
material terms of any insurance policy required pursuant to this Agreement and (ii) all
material regulations and then-current standards applicable to or affecting any
of the Properties or any portion thereof or any use or condition thereof, which
may, at any time, be recommended by the board of fire underwriters, if any,
having jurisdiction over any of the Properties, or any other body exercising similar
functions.

 

“Interest Accrual
Period” means, with respect to any
specified Payment Date, the period from and including the 15th day of the
calendar month preceding such specified Payment Date to but excluding the 15th day of the calendar month containing such
specified Payment Date;
provided that, prior to a Securitization, Lender shall have the right,
in connection with a change in the Payment Date in accordance with the
definition thereof, to make a corresponding change to the Interest Accrual
Period provided same has no adverse effect on Borrower in more than a de
minimis extent.  Notwithstanding the
foregoing, the first Interest Accrual Period shall commence on and include the
Closing Date.

 

“Interest Determination Date” means, in connection with the
calculation of interest accrued for any Interest Accrual Period, the second
Business Day preceding the first day of such Interest Accrual Period.

 

“Interest Rate Cap Agreements” means collectively, the Initial
Interest Rate Cap Agreement and any Extension Interest Rate Cap Agreements.

 

13

 

“Joint Venture Owner” means each joint venture that directly or
indirectly owns a Joint Venture Property.

 

“Joint Venture Property” means, individually or collectively, as
the context may require, each Property subject, directly or indirectly, to
a  Qualified Joint Venture Agreement as
listed on Schedule P, as modified from time to time to reflect any
Transfer permitted pursuant to Section 6.3(b) or Section 2.2
and any additional joint venture permitted hereunder (including pursuant to Section 2.3).

 

“Junior Mezzanine Loan Permitted
Encumbrances” means collectively, (i) the Liens created by the Loan
Documents, (ii) Liens, if any, for Taxes not yet delinquent, (iii) any
attachment or judgment Lien on the Collateral, provided, that the judgment it
secures shall, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged within
60 days after the expiration of any such stay, provided, that no such Lien is
in imminent danger of foreclosure and (iv) any Liens which are hereafter
approved in writing by Lender in its sole discretion.

 

“Lease” means any lease, license, letting, concession, occupancy
agreement, sublease to which Borrower is a party or has a consent right, or
other agreement (whether written or oral and whether now or hereafter in
effect) under which Borrower, Senior Mezzanine Borrower or a Property Owner is
a lessor, existing as of the Closing Date or hereafter entered into by
Borrower, Senior Mezzanine Borrower or Property Owner, in each case pursuant to
which any Person is granted a possessory interest in, or right to use or occupy
all or any portion of any space in any of the Properties, and every
modification or amendment thereof, and every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto.

 

“Lease Term Sheet”
has the meaning set forth in Section 5.7(b).

 

“Leasing Commissions” means leasing commissions required to be
paid by Borrower, Senior Mezzanine Borrower or its Affiliates in connection
with the leasing of space to Tenants at any of the Properties pursuant to
Leases either in effect on the date hereof or entered into by Borrower, Senior
Mezzanine Borrower or its Affiliates in accordance herewith and payable in
accordance with third-party/arm’s-length brokerage agreements, provided
that the commissions payable pursuant thereto are commercially reasonable based
upon the then current brokerage market for property of a similar type and
quality to such Property in the geographic market in which such Property is
located.

 

“Legal Requirements” means all governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities (including Environmental Laws)
affecting Borrower, Senior Mezzanine Borrower any Property Owner, the
Collateral or any of the Properties or any portion of or the construction, ownership,
use, alteration or operation of, or any portion of any Property (whether now or
hereafter enacted and in force), and all permits, licenses and authorizations
and regulations relating thereto.

 

“Lender” has the meaning set forth in the first paragraph of
this Agreement and in Section 9.7.

 

14

 

“Letter of
Credit” shall mean an irrevocable, unconditional, freely transferable,
clean sight draft evergreen letter of credit in favor of Lender, with respect to
which Borrower has no reimbursement obligation, entitling Lender to draw
thereon in New York, New York, issued by a domestic Eligible Institution or the
U.S. agency or branch of a foreign Eligible Institution.

 

“LIBOR”
means the rate per annum calculated as set forth below:

 

(i)            On each Interest Determination Date,
LIBOR for the applicable period will be the rate for deposits in United States
dollars for a one-month period which appears as the London interbank offered
rate on the display designated as “LIBOR01” on the Reuters Screen (or such other page as may replace that page on
that service, or such page or replacement therefor on any successor service) as the London
interbank offered rate as of 11:00 a.m., London time, on such date.

 

(ii)           With respect to an Interest
Determination Date on which no such rate appears as the London interbank
offered rate on “LIBOR01” on the Reuters Screen (or such other page as may replace that page on that service,
or such page or replacement therefor on any successor service) as
described above, LIBOR for the applicable period will be determined on the
basis of the rates at which deposits in United States dollars are offered by
the Reference Banks at approximately 11:00 a.m., London time, on such date
to prime banks in the London interbank market for a one-month period (each a “Reference
Bank Rate”).  Lender shall request
the principal London office of each of the Reference Banks to provide a
quotation of its Reference Bank Rate.  If
at least two such quotations are provided, LIBOR for such period will be the
arithmetic mean of such quotations.  If
fewer than two quotations are provided, LIBOR for such period will be the
arithmetic mean of the rates quoted by major banks in New York City, selected
by Lender, at approximately 11:00 a.m., New York City time, on such date
for loans in United States dollars to leading European banks for a one-month
period.

 

(iii)          If, on any Interest Determination
Date, Lender is required but unable to determine LIBOR in the manner provided
in paragraphs (i) and (ii) above, LIBOR for the applicable period
shall be LIBOR as determined on the previous Interest Determination Date.

 

All
percentages resulting from any calculations or determinations referred to in
this definition will be rounded upwards to the nearest multiple of 1/100 of 1%
and all U.S. dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent or more being rounded upwards).

 

“LIBOR Strike Rate” means (1) with respect
to the Initial Interest Rate Cap Agreement, 5.25%; and (2) with respect to
any Extension Interest Rate Cap Agreement, the lesser of (x) 6% and (y) the
interest rate that would result in a DSCR of 1.0x as of the first day of the
Extension Term.

 

“Lien” means any mortgage, lien (statutory or other), pledge,
hypothecation, assignment, preference, priority, security interest, or any
other encumbrance or charge on or affecting any Collateral or any portion
thereof, or any Encumbered Property, or any interest 

 

15

 

therein (including any conditional sale or other title
retention agreement, any sale-leaseback, any financing lease or similar
transaction having substantially the same economic effect as any of the
foregoing, the filing of any financing statement or similar instrument under
the Uniform Commercial Code or comparable law of any other jurisdiction,
domestic or foreign, and mechanics’, materialmen’s and other similar liens and
encumbrances, as well as any option to purchase, right of first refusal, right
of first offer or similar right).

 

“Loan” has the meaning set forth in Section 1.1.

 

“Loan Amount” means 
$99,329,673.13.

 

“Loan Documents” means this Agreement, each of the Notes, the
Assignment of Interest Rate Cap Agreement, each of the Environmental
Indemnities, each of the Subordination of Property Management Agreements, the
Cash Management Agreement, the Pledge Agreement,  any Blocked Account Agreement, the
Cooperation Agreement, the Guaranty, any Letter of Credit and all other
agreements, instruments, certificates and documents necessary to effectuate the
granting to Lender of first-priority Liens on the Collateral or otherwise in
satisfaction of the requirements of this Agreement or the other documents
listed above, as all of the aforesaid may be modified or replaced from time to
time in accordance herewith.

 

“Loan Multiplier” means (i) for the period beginning on the
Closing Date and ending on the Effective Date, 1/6 (16.67%) and (ii) from
and after the Effective Date, 16.57%.

 

“Loss
Proceeds” means amounts, awards or payments payable to Borrower or its
Affiliates, Senior Mezzanine Borrower, any Property Owner, Mortgage Lender or
Lender in respect of all or any portion of any of the Properties in connection
with a Casualty or Condemnation thereof (after the deduction therefrom and
payment to Borrower or its Affiliates, Senior Mezzanine Borrower, any Property
Owner, Mortgage Lender and Lender, respectively, of any and all reasonable
expenses incurred by Borrower or its Affiliates and Lender in the recovery
thereof, including all attorneys’ fees and disbursements, the fees of insurance
experts and adjusters and the costs incurred in any litigation or arbitration
with respect to such Casualty or Condemnation).

 

“Major Lease” means the Lease covering the Dana Portfolio on the
date hereof, as amended or modified in accordance herewith, and any Lease which
(i) when aggregated with all other Leases at the applicable Property with
the same Tenant (or affiliated Tenants), and assuming the exercise of all
expansion rights and all preferential rights to lease additional space
contained in each such Lease, is expected to contribute more than 7.5% of Net
Operating Income during any 12-month period (after adjustment to eliminate the
effect of free rent periods), (ii) is with an Affiliate of Borrower,
Senior Mezzanine Borrower or a Property Owner as Tenant, or (iii) is
entered into during the continuance of an Event of Default.

 

“Material Adverse Effect” means a material adverse effect upon (i) the
ability of Borrower or any Property Owner to perform, or of Lender or Mortgage
Lender to enforce, any material provision of any Loan Document or any
Encumbered Debt Document, as the case may be, (ii) the enforceability of
any material provision of any Loan Document, or (iii) the value, Net
Operating Income, use or enjoyment of any of the Properties or the operation
thereof.

 

16

 

“Material Agreements” means (x) each contract and agreement
(other than the Leases, the Ground Leases, the Approved Management Agreement,
the Encumbered Property Debt Documents, brokerage and leasing agreements
negotiated at arm’s length and the Loan Documents) relating to a Property, or
otherwise imposing obligations on Borrower, Senior Mezzanine Borrower or any
Property Owner, under which Borrower, Senior Mezzanine Borrower, or any
Property Owner would have the obligation to pay more than $1,000,000 per annum
and which cannot be terminated by Borrower, Senior Mezzanine Borrower or any
Property Owner without cause upon 90 days’ notice or less without payment of a
termination fee or, in any case, with respect to any covenant contained herein
(but not with respect to any representation), imposing obligations on Borrower,
Senior Mezzanine Borrower or any Property Owner under which it would have the
obligation to pay more than $5,000,000 per annum, regardless of Borrower’s,
Senior Mezzanine Borrower’s or any Property Owner’s right to terminate same, or
which is with an Affiliate of Borrower, Senior Mezzanine Borrower or any
Property Owner, and (y) to the extent the existence, breach or termination
of same might have a Portfolio Material Adverse Effect, any reciprocal easement
agreement, declaration of covenants, material parking agreement, condominium
documents, or other material Permitted Encumbrance.

 

“Material Alteration” means any Alteration to be performed by or
on behalf of Borrower, Senior Mezzanine Borrower or any Property Owner at any
of the Properties which (a) is reasonably likely to have a Material
Adverse Effect with respect to the applicable Property, (b) when
aggregated with all contemporaneous Alterations at the Properties is reasonably
expected to cost in excess of $20,000,000, or (c) is reasonably expected
to permit (or is reasonably likely to induce) any Tenant under a material Lease
to terminate its Lease or abate rent.

 

“Maturity Date” means the maturity date of the Loan as set forth
in Section 1.2.

 

“Merger” means the transactions contemplated by the Merger
Agreement.

 

“Merger Agreement” means that certain Agreement and Plan of
Merger, dated as of November 2, 2007, among Sponsor, GKK Capital LP, AFRT
Owner, and the other parties thereto, with only such modifications thereto as
have been agreed in writing by Lender.

 

“Minimum Balance” has the meaning set forth in Section 3.2(a).

 

“Moody’s” means Moody’s Investors Service, Inc.
and its successors.

 

“Mortgage” means, with respect to each Mortgage Loan Collateral
Property, that certain mortgage, deed of trust or deed to secure debt, as the
case may be, encumbering such Mortgage Loan Property, executed by Mortgage Loan
Property Owner as of the Closing Date, as the same may from time to time be
modified or replaced in accordance herewith.

 

“Mortgage Borrower” means, as the context may require, one or
more “Borrowers” under and as defined in the Mortgage Loan Agreement.

 

“Mortgage Guarantor” means GKK Stars Junior Mezz 1 LLC.

 

17

 

“Mortgage Lender” means, collectively, Goldman Sachs Mortgage
Company (as successor in interest to Goldman Sachs Commercial Mortgage Capital,
L.P.), Citicorp North America, Inc. and SL Green Realty Corp. and their
respective successors and assigns.

 

“Mortgage Loan” means that certain Loan in the original
principal amount of $250,000,000 from Mortgage Lender to Mortgage Loan Property
Owner.

 

“Mortgage Loan Agreement” means that certain Loan Agreement,
dated as of the date hereof, between Mortgage Lender and the Mortgage Loan
Property Owners, as same may be amended or modified from time to time with the
consent of Lender.

 

“Mortgage Loan Cash Management Account” means the “Cash
Management Account” as defined in the Mortgage Loan Agreement.

 

“Mortgage Loan Collateral Properties” means the real property
described on Schedule A-1, together with all buildings and other
improvements thereon, as modified from time to time to reflect any Transfer
permitted pursuant to Section 2.2.

 

“Mortgage Loan Documents” means the “Loan Documents”, as defined
in the Mortgage Loan Agreement.

 

“Mortgage Loan Event of Default” means an “Event of Default”
under and as defined in the Mortgage Loan Agreement.

 

“Mortgage Loan Principal Indebtedness” means, from time to time,
the outstanding principal balance of the Mortgage Loan.

 

“Mortgage Loan Property Owner” means each borrower under the
Mortgage Loan.

 

“Mortgage Loan Property Owner Equity” means 100% of the direct
equity interests in each Mortgage Loan Property Owner as set forth in the
Pledge Agreement, as modified from time to time to reflect any Transfer
permitted pursuant hereto.

 

“Mortgage Loan Property Owner Pledgor” means, individually or
collectively, as the context may require, each owner of Mortgage Loan Property
Owner Equity, as set forth on Schedule I, as modified from time to time
to reflect any Transfer permitted pursuant hereto.

 

“Net Lease” means each of the Leases listed on Schedule N.

 

“Net Operating Income” means, with
respect to any Test Period, the excess of (i) Operating Income for such
Test Period, minus (ii) Operating Expenses for such Test Period.

 

“Net Proceeds” means, in connection with the sale or disposition
to an unaffiliated third party in an arms’-length transaction, 100% of the
proceeds of such sale or disposition, net of any repayment of any Encumbered Property
Debt (including any prepayment or release premiums) that is required to be and
actually is repaid in connection therewith, and ordinary and customary closing
costs payable to unaffiliated third parties, limited in the case of 

 

18

 

Joint Venture Properties and any joint venture entered
into in connection with the Transfer of any portion of the Value Add Pool
Equity pursuant to Section 2.3 to the portion of such net proceeds
payable to Borrower or its Affiliates pursuant to the applicable Qualified
Joint Venture Agreement in effect on the date hereof or as hereafter amended
with Lender’s reasonable consent (Borrower agreeing that it shall be reasonable
for Lender to withhold its consent in connection with any amendment that would
result in a reduction of Borrower’s percentage interest in (except in
connection with a Transfer permitted hereunder), or control rights over, any
Joint Venture Property or otherwise result in a Material Adverse Effect).

 

 “New Borrower Entity”
means a Single Purpose Entity 100% of the equity interests in which are
directly or indirectly owned by Sponsor and 100% of the direct equity interests
in which are pledged to Lender in a manner reasonably satisfactory to Lender
(including the delivery, at Borrower’s expense, of UCC insurance with respect
to such pledge), which Single Purpose Entity: (i) shall have executed and
delivered to Lender an assumption agreement, in form and substance reasonably
acceptable to Lender, evidencing its agreement to abide and be bound by the
terms of the Loan Documents and containing representations substantially
equivalent to those contained in Article IV, and such other
representations (and evidence of the accuracy of such representations) as the
Lender shall reasonably request; (ii) shall have delivered such Uniform
Commercial Code financing statements as may be reasonably requested by Lender; (iii) if
requested by Lender, shall have delivered to Lender legal opinions of counsel
reasonably acceptable to Lender which are equivalent to the opinions delivered
to Lender on the Closing Date, including new enforceability, authorization and
nonconsolidation opinions which are reasonably satisfactory to Lender and
satisfactory to each of the Rating Agencies; and (iv) shall have delivered
to Lender all documents reasonably requested by it relating to the existence of
such New Borrower Entity and the due authorization of such New Borrower Entity
to assume the Loan and to execute and deliver any related documents, each in
form and substance reasonably satisfactory to Lender.

 

“Nonconsolidation Opinion” means, the opinion letter dated the
Closing Date, delivered by Borrower’s counsel to Lender and addressing issues
relating to substantive consolidation in bankruptcy.

 

“Normalized Capital Expenditures” means anticipated annual
Capital Expenditures at the Properties, as reasonably determined by Lender,
based on historical Capital Expenditures at the Properties during the initial
term of the Loan (taking into account any amounts actually reimbursed in
respect of Capital Expenditures under Leases).

 

“Note” means, collectively, the promissory notes from time to
time issued hereunder, as such notes may be consolidated, replaced by multiple
Notes or divided into multiple Note Components in accordance with Section 1.3(c) and
as otherwise modified, assigned (in whole or in part) and/or replaced from time
to time in accordance herewith.

 

“Note Component” has the meaning set forth in Section 1.3(c).

 

“OFAC List” means 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 any other similar
list maintained by the U.S. Treasury Department, 

 

19

 

Office of Foreign Assets Control pursuant to any
applicable governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities, including,
without limitation, trade embargo, economic sanctions, or other prohibitions
imposed by Executive Order of the President of the United States.  The OFAC List currently is accessible through
the internet website at www.treas.gov/ofac/t11sdn.pdf.

 

“Officer’s Certificate” means a certificate delivered to Lender
which is signed by an authorized officer of Borrower and certifies the
information therein to such officer’s knowledge.

 

“Operating Expenses” means, for any period, all
operating, renting, administrative, management, legal and other ordinary
expenses of Borrower and, without duplication, Senior Mezzanine Borrower and
Property Owners, during such period (other than those relating to the
Disposition Assets and each other Property whose Release Price is zero),
determined in accordance with GAAP; provided, however, that such
expenses shall not include (i) depreciation, amortization or other noncash
items (other than expenses that are due and payable but not yet paid), (ii) interest,
principal or any other sums due and owing with respect to the Loan, (iii) income
taxes or other taxes in the nature of income taxes, (iv) Capital
Expenditures, or (v) equity distributions.

 

“Operating Income” means, for any period, all operating income
of Borrower and, without duplication, Senior Mezzanine Borrower and Property
Owners, from each of the Properties (other than the Disposition Assets and each
other Property whose Release Price or Aggregate Allocated Loan Amount is zero)
during such period, determined in accordance with GAAP (but without
straight-lining of rents), other than (i) Loss Proceeds (but Operating
Income will include rental loss insurance proceeds to the extent allocable to
such period), (ii) any revenue attributable to a Lease to the extent it is
paid more than 30 days prior to the due date, (iii) any interest income
from any source, (iv) any repayments received from any third party of
principal loaned or advanced to such third party by Borrower, (v) any
proceeds resulting from the Transfer of all or any portion of such Property, (vi) sales,
use and occupancy or other taxes on receipts required to be accounted for by
Borrower or Senior Mezzanine Borrower to any government or governmental agency,
(vii) termination fees, and (viii) any other extraordinary or
non-recurring items.

 

“Operating Partnership” means First States Group, L.P., a
Delaware limited partnership .

 

“Other Ground Lease Collateral” means the equity interests in
the Persons listed on Schedule M in the percentages set forth thereon,
as modified from time to time to reflect any Transfer permitted hereunder.

 

“Other Equity Pledgor” means, individually or collectively, as
the context may require, each owner of Other Ground Lease Collateral as set
forth on Schedule M.

 

“Other Properties” means, collectively, each
Property that is not a Mortgage Loan Collateral Property.

 

20

 

“Par
Prepayment Date” means the first Payment Date following the 6-month
anniversary of the Closing Date.

 

“Parcel
Release Price” has the meaning
set forth in Exhibit I.

 

“Participation” has the meaning set forth in Section 9.7(b).

 

“Payment Date” means the 9th day of each month (or,
if such 9th day is not a Business Day, the first preceding Business
Day); provided, that, prior to a Securitization, Lender shall have the
right to change the Payment Date so long as a corresponding change to the
Interest Accrual Period is also made and same has no adverse effect on Borrower
in more than a de minimis extent. 
Notwithstanding the foregoing, the Maturity Date shall be the second to
last Business Day of the Interest Accrual Period in which the Maturity Date
falls.

 

“Permits” means all licenses, permits, variances and
certificates used in connection with the ownership, operation, use or occupancy
of each of the Properties (including certificates of occupancy, business
licenses, state health department licenses, licenses to conduct business and
all such other permits, licenses and rights, obtained from any Governmental
Authority or private Person concerning ownership, operation, use or occupancy
of such Property).

 

“Permitted Affiliate Sale” means the sale of a Property to an
Affiliate of Borrower or Senior Mezzanine Borrower that is not itself a Senior
Mezzanine Borrower, which Affiliate’s immediate intention is to materially redevelop such Property as
evidenced by an Officer’s Certificate submitted to Lender describing such
redevelopment in reasonable detail; provided, however, no such
sale shall be a “Permitted Affiliate Sale” if, after giving effect thereto, the
sum of the Allocated Loan Amounts of all Properties subject to Permitted
Affiliate Sales from and after the Closing Date would exceed $25,000,000.

 

“Permitted Debt” means:

 

(a)           with
respect to the Senior Mezzanine Borrower, the “Permitted Debt” as defined in
the Senior Mezzanine Loan Agreement in effect as of the Closing Date, and

 

(b)           with
respect to Borrower,

 

(i)            the Indebtedness;

 

(ii)           amounts, not represented by a note, customarily paid by Borrower within
60 days of incurrence and in fact not more than 60 days outstanding, payable by
or on behalf of Borrower for or in respect of its customary corporate administration,
loan administration, financial reporting and overhead, and which are incurred
by Borrower in the ordinary course of Borrower’s ownership of Senior Mezzanine
Borrower; provided, that the amount outstanding under this clause (b)(ii) shall
in no event exceed $100,000 at any time.

 

(iii)          the Encumbered Property Debt, to the
extent that there is no increase in the principal amount thereof from the
principal balance as of the date hereof (after giving 

 

21

 

effect to any prepayments
made on the date hereof) or any material amendment to any Encumbered Property
Debt Document without Lender’s prior written consent;

 

(iv)          refinancings of Encumbered Property
Debt on terms not materially more onerous (including as to interest rate,
transfer restrictions, amortization, prepayment provisions and cash trap
provisions) as the Encumbered Property Debt being refinanced, provided
that, in the case of each such refinancing, (x) the applicable Encumbered
Property Lender enter into an intercreditor agreement with Lender in form and
substance reasonably satisfactory to Lender (the Form of Intercreditor
Agreement attached hereto as Exhibit F is hereby deemed to be
reasonably satisfactory to Lender), (y) Senior Mezzanine Lender is granted
a perfected first-priority pledge of 100% of the equity interests in the entity
owning the Encumbered Property securing the Encumbered Property Debt being so
refinanced, and (z) if any such refinancing is in a principal amount
greater than the Encumbered Property Debt being refinanced, then an amount
equal to the product of the Loan Multiplier times 100% of the increase (without
reduction for transaction, prepayment, defeasance or other expenses) is applied
toward prepayment of the Loan in accordance with Section 2.1
hereof;

 

(v)           the Mortgage Loan; and

 

(vi)          the Senior Mezzanine Loan.

 

“Permitted Encumbrances” means, collectively, the Senior
Mezzanine Loan Permitted Encumbrances and the Junior Mezzanine Loan Permitted
Encumbrances.

 

“Permitted Investments” means the following, subject to the
qualifications hereinafter set forth:

 

(i)            obligations
of, or obligations guaranteed as to principal and interest by, the U.S.
government or any agency or instrumentality thereof, when such obligations are
backed by the full faith and credit of the United States of America;

 

(ii)           federal funds,
unsecured certificates of deposit, time deposits, banker’s acceptances, and
repurchase agreements having maturities of not more than 365 days of any bank,
the short-term debt obligations of which are rated A-1+ (or the equivalent) by
each of the Rating Agencies and, if it has a term in excess of three months,
the long-term debt obligations of which are rated AAA (or the equivalent) by
each of the Rating Agencies;

 

 (iii)         deposits that are fully insured by the Federal Deposit
Insurance Corp. (FDIC);

 

(iv)          debt obligations
that are rated AAA or higher (or the equivalent) by each of the Rating
Agencies;

 

(v)           commercial paper
rated A–1+ (or the equivalent) by each of the Rating Agencies;

 

22

 

(vi)          investment in money
market funds rated AAAm or AAAm–G (or the equivalent) by each of the Rating
Agencies; and

 

(vii)         such other
investments as to which Lender shall have received Rating Confirmation.

 

Notwithstanding
the foregoing, “Permitted Investments” (i) shall exclude any security with
the Standard & Poor’s “r” symbol (or any other Rating Agency’s
corresponding symbol) attached to the rating (indicating high volatility or dramatic
fluctuations in their expected returns because of market risk), as well as any
mortgage-backed securities and any security of the type commonly known as “strips”;
(ii) shall not have maturities in excess of one year; (iii) shall be
limited to those instruments that have a predetermined fixed dollar of
principal due at maturity that cannot vary or change; and (iv) shall
exclude any investment where the right to receive principal and interest
derived from the underlying investment provides a yield to maturity in excess
of 120% of the yield to maturity at par of such underlying investment.  Interest may either be fixed or variable, and
any variable interest must be tied to a single interest rate index plus a
single fixed spread (if any), and move proportionately with that index.  No investment shall be made which requires a
payment above par for an obligation if the obligation may be prepaid at the
option of the issuer thereof prior to its maturity.  All investments shall mature or be redeemable
upon the option of the holder thereof on or prior to the earlier of (x) three
months from the date of their purchase or (y) the Business Day preceding
the day before the date such amounts are required to be applied hereunder.

 

“Permitted TRS Contribution Agreement” means a
contribution agreement substantially in the form of the contribution agreement
attached as Exhibit H.

 

“Permitted TRS Entity” means a Person that
becomes a Mortgage Borrower under the Mortgage Loan , fulfills the requirements
of a “New Borrower Entity” under and as defined in the Mortgage Loan Agreement
and is formed solely for the purpose of entering into one or more Permitted TRS
Contribution Agreements and matters directly relating thereto.

 

“Person” means any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated association
or Governmental Authority and any fiduciary acting in such capacity on behalf
of any of the foregoing.

 

“Plan” means any employee benefit plan (as defined in Section 3(3) of
ERISA) subject to Title IV or Section 302 of ERISA or Section 412 of
the Code.

 

“Plan Assets” means assets of any (i) employee benefit plan
(as defined in Section 3(3) of ERISA) subject to Title I of
ERISA or (ii) plan (as defined in Section 4975(e)(1) of the
Code) subject to Section 4975 of the Code.

 

“Pledge Agreement” means that certain Pledge and Security
Agreement, dated as of the date hereof, by Borrower for the benefit of Lender.

 

“Policies” has the meaning set forth in Section 5.15(b).

 

23

 

“Portfolio Material Adverse Effect” means a
material adverse effect upon (i) the ability of Borrower to perform, or of
Lender to enforce, any material provision of any Loan Document, (ii) the
enforceability of any material provision of any Loan Document, or (iii) the
value, Net Operating Income, use or enjoyment of the Properties or the
operation thereof, in each case, taken as a whole.

 

“Prepayment
Fee” shall mean, with respect to any prepayment received
by Lender prior to the Par Prepayment Date (other than with respect to a
prepayment pursuant to Section 2.1(c)(i), (ii) and (iii)),
any prepayment associated with the release of a Disposition Asset or any
release in connection with a Casualty or Condemnation pursuant to Section 5.16(d)),
an amount equal to 1.0% of the principal amount prepaid.

 

“Prime Rate” means the “prime rate” published in the “Money
Rates” section of The Wall Street Journal.  If The Wall Street Journal ceases to
publish the “prime rate,” then Lender shall select an equivalent publication
that publishes such “prime rate,” and if such “prime rate” is no longer
generally published or is limited, regulated or administered by a governmental
or quasi-governmental body, then Lender shall reasonably select a comparable
interest rate index.

 

“Principal Indebtedness” means the principal balance of the Loan
outstanding from time to time.

 

“Properties” means, collectively, all real property from time to
time owned or leased directly or indirectly by AFRT, including without
limitation the Encumbered Properties and the Mortgage Loan Collateral
Properties, together with all buildings and improvements thereon.  As used herein, “Property” means any of the
individual Properties.  Any reference
herein to a Transfer of a Property shall mean a Transfer of such Property or of
the direct or indirect equity interests therein (other than a Transfer of a
direct or indirect equity interest in Sponsor).

 

“Property Owner” means, individually or collectively, as the
context may require, each owner from time to time of a Property.  The current Property Owners are listed on Schedule
I.

 

“Qualified Joint Venture Agreement” means a (x) joint
venture agreement entered into prior to the date hereof and described in Schedule
K, (y) any joint venture agreement relating to a Value Add Pool
Property entered into pursuant to Section 2.3, and (z) a joint
venture agreement hereafter entered into pursuant to Section 6.3(b) that
(i) provides Senior Mezzanine Lender with the right to force a sale or
similar liquidation of the assets of the joint venture following a foreclosure
or transfer-in-lieu of foreclosure on the equity interests pledged to Senior
Mezzanine Lender subject to customary rights of first offer or appraisal sale
or other similar rights reasonably acceptable to Senior Mezzanine Lender, (ii) provides
to Borrower or its Affiliate (and, after a foreclosure or transfer-in-lieu of
foreclosure on the equity interests pledged to Senior Mezzanine Lender subject
to customary rights of first offer, appraisal sale or other similar rights
reasonably acceptable to Senior Mezzanine Lender, provides to Senior Mezzanine
Lender) the right to control the joint venture, subject to customary major
decisions, (iii) provides that distributions of operating revenues,
capital proceeds and all other income of the applicable 

 

24

 

Properties, to the extent available for distribution, shall be made to
the equityholders in proportion to their respective equity interests, and (iv) is
otherwise acceptable to Lender in its reasonable discretion.

 

“Qualified Survey” means, with respect to each of the Mortgage
Loan Properties, current title surveys of such Mortgage Loan Property,
certified to Borrower, the title company issuing the Qualified Title Insurance
Policy and Lender and their respective successors and assigns, in form and
substance reasonably satisfactory to Lender.

 

 “Qualified Title Insurance
Policy” means (i) with respect to each of the Properties, (x) if
applicable, an ALTA extended coverage mortgagee’s title insurance policy in
form and substance reasonably satisfactory to Lender, together with such
endorsements as Lender shall reasonably request, and (y) an owner’s title
insurance policy in favor of the applicable Mortgage Loan Property Owner
(except that Borrower shall not be required to purchase new or updated owners’
policies) with a “Mezzanine Lender’s Financing Endorsement,” naming Lender as
an additional insured, in form and substance reasonably acceptable to Lender
(or in the alternative, a letter executed by the title company providing
substantially the same benefit to Lender), and (ii) with respect to the
equity pledged to Lender pursuant to the Loan Documents, a UCC insurance policy
insuring Lender’s first-priority security interest in 100% of the equity
pledged to Lender pursuant to the Loan Documents, and otherwise in form and
substance reasonably acceptable to Lender.

 

“Rating Agency”
shall mean, prior to the final Securitization of the Loan, each of S&P,
Moody’s and Fitch, or any other nationally-recognized statistical rating agency
which has been designated by Lender and, after the final Securitization of the
Loan, shall mean any of the foregoing that have rated and continue to rate any
of the Certificates.

 

“Rating Confirmation” means, with respect to any proposed
action, confirmation in writing from each of the Rating Agencies that such
action shall not result, in and of itself, in a downgrade, withdrawal or
qualification of any rating then assigned to any outstanding Certificates;
except that if any portion of the Loan shall not have been securitized pursuant
to a Securitization rated by the Rating Agencies, then “Rating Confirmation”
shall instead mean that the matter in question is subject to the prior written
approval of both (x) the applicable Rating Agencies (if and to the extent
that any portion of the Loan has been securitized pursuant to a Securitization
or series of Securitizations rated by such Rating Agencies), and (y) Lender
in its reasonable discretion (and Borrower agrees that it shall be reasonable
for Lender to withhold such approval, if such proposed action does not satisfy
Rating Agency criteria).  No Rating
Confirmation shall be regarded as having been received unless and until any
conditions imposed on its effectiveness by any Rating Agency shall have been
satisfied.

 

“Reference Banks”  means
four major banks in the London interbank market selected by Lender.

 

“Regulatory Change” means any change after the Closing Date in
federal, state or foreign laws or regulations or the adoption or the making,
after such date, of any interpretations, directives or requests applying to a
class of banks or companies controlling banks, including Lender, of or under
any federal, state or foreign laws or regulations (whether or not having the 

 

25

 

force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.

 

“Release” with respect to any Hazardous Substance means any
release, deposit, discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Substances into the indoor or outdoor environment
(including the movement of Hazardous Substances through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata) in violation
of Environmental Law.

 

“Release Parcel” has the meaning set forth Section 2.4.

 

“Release Price” has the meaning set forth in Exhibit I.

 

“Release Price Deficit” means has the meaning specified in Section 2.2(c).

 

“Rent Roll” has the meaning set forth in Section 4.14(a).

 

“Required Equity” means the equity pledged to Senior Mezzanine
Lender by Required Equity Pledgors (or, in the case of First States Group, L.P.
and its general partner, the equity that is subject to the negative covenants
contained herein) pursuant to the Senior Mezzanine Loan Documents.

 

“Required Equity Pledgor” means, individually or collectively,
as the context may require, AFRT Owner, each Value Add Pool Pledgor, each
Encumbered Property Pledgor, each Other Equity Pledgor and each Mortgage Loan
Property Owner Pledgor.

 

“Restricted Cash” means amounts released from collateral accounts
maintained pursuant and subject to Encumbered Debt Documents, except for
reserves for monthly expenses such as tax, insurance, capital expenditure
reserves funded monthly, but including reserves in the nature of deferred
maintenance, interest reserves, reserves for the purpose of credit enhancement
and excess cash reserves; provided that the foregoing shall not be required to
be remitted to Senior Mezzanine Lender pursuant to the terms of the Senior
Mezzanine Loan Documents at the time of a refinancing of Encumbered Property
Debt if, in connection with such refinancing, the same shall be required to be
maintained in a collateral account pursuant to the amended or replacement
Encumbered Debt Documents entered into in accordance with the terms hereof.

 

“Revenues” means (i) to the extent attributable to any
Property, all rents, rent equivalents, moneys payable as damages pursuant to a
Lease or in lieu of rent or rent equivalents, royalties (including all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including security, utility and other deposits), accounts,
cash, issues, profits, charges for services rendered and other consideration of
whatever form or nature received by or paid to or for the account of or benefit
of Borrower or any Senior Mezzanine Borrower from any and all sources including
any obligations now existing or hereafter arising or created out of the sale,
lease, sublease, license, concession or other grant of the right of the use and
occupancy of property or rendering of services by Borrower and proceeds, if
any, from business interruption or other loss of income insurance; provided,
however, that with respect to any Encumbered Property, the foregoing
shall not constitute 

 

26

 

“Revenues” to the extent that it is subject to the Lien of an
Encumbered Property Loan or is required to be applied to an Encumbered Property
pursuant to Encumbered Property Debt Documents, and (ii) all amounts released
from collateral accounts held by or on behalf of any Encumbered Property Lender
in connection with Encumbered Property Debt, to the extent such amounts are not
required to be applied to an Encumbered Property pursuant to Encumbered
Property Debt Documents.  “Revenues”
shall not include Loss Proceeds applied in accordance with Section 5.16
(other than the proceeds of rental interruption insurance), interest income
(other than interest on amounts contained in the Collateral Accounts), equity
contributions or other amounts to be funded by a member pursuant to Borrower’s
or any Senior Mezzanine Borrower’s operating agreement and amounts which are
received from the Collateral Accounts in accordance herewith (or from the “Collateral
Accounts” as defined in the Senior Mezzanine Loan Agreement in accordance
therewith) or are otherwise free of the Liens of the Loan Documents pursuant to
the terms hereof.

 

“S&P”
means Standard & Poor’s Ratings Services, a division of the
McGraw-Hill Companies, Inc., and its successors.

 

“Scaled
Allocated Loan Amount” means, with respect to each Property constituting
Senior Collateral, (i) the Aggregate Allocated Loan Amount of each such
Property, times (ii) the Scaling Factor of such Property, minus, after
such multiplication has been made, (iii) the portion of the applicable
Encumbered Property Debt allocated to such Property pursuant to the applicable
Encumbered Property Debt Documents.

 

“Scaling
Factor” means, with respect to each Property constituting Senior
Collateral, the percentage indicated in Schedule A-3.

 

“Securitization” means, with respect to the Loan, the Senior
Mezzanine Loan and/or the Mortgage Loan, as the case may be, a transaction in
which all or any portion of the Loan, the Senior Mezzanine Loan and/or the
Mortgage Loan is deposited into one or more trusts which issue Certificates to
investors, or a similar transaction.

 

“Senior Collateral” means all Collateral secured by a Mortgage
or a first-priority perfected pledge of equity that, in either case, would not
be subordinate (structurally or otherwise) to the Lien of a hypothetical
secured lender (such as a DIP lender) in a hypothetical bankruptcy of AFRT,
Operating Partnership or their respective subsidiaries, other than the Lien of
the Encumbered Property Debt as listed on Schedule O.

 

“Senior Collateral Value” means, with respect to each Property
not constituting Senior Collateral, zero; and with respect to each Property
constituting Senior Collateral, the product of (i) the Scaled Allocated
Loan Amount of such Property, times (ii) the applicable percentage of the
equity interest therein that is pledged pursuant to that certain Senior
Mezzanine Lower Tier Pledge, as indicated in Schedule I thereto (but in no
event shall the Senior Collateral Value of any Property be less than zero).

 

“Senior Mezzanine Borrower” means individually or collectively,
as the context may require, the Persons listed as “Borrower” on the signature pages to
the Senior Mezzanine Loan Agreement.

 

27

 

“Senior Mezzanine Cash Management Account” means the “Cash
Management Account” as defined in the Senior Mezzanine Loan Agreement.

 

“Senior Mezzanine Loan Collateral” means the “Collateral” as
defined in the Senior Mezzanine Loan Agreement.

 

“Senior Mezzanine Loan Collateral Accounts” means the “Collateral
Accounts” as defined in the Senior Mezzanine Loan Agreement.

 

“Senior Mezzanine Lower Tier Pledge” means that certain Pledge
and Security Agreement (Lower Tier), dated as of April 1, 2008, by Senior
Mezzanine Borrower for the benefit of Senior Mezzanine Lender.

 

“Senior Mezzanine Lender” means the holders from time to time of
the Senior Mezzanine Loan, and their respective successors and/or assigns.

 

“Senior Mezzanine Loan” means that certain mezzanine loan made
by Senior Mezzanine Lender to Senior Mezzanine Borrower as evidenced by the
Senior Mezzanine Loan Documents.   If the
Senior Mezzanine Loan is hereafter bifurcated into multiple loans, then all
references to the Senior Mezzanine Loan herein shall be deemed to refer to all
such loans in the aggregate.

 

“Senior Mezzanine Loan Agreement” means that certain Amended and
Restated Senior Mezzanine Loan Agreement, dated as of the Closing Date, by and
among Senior Mezzanine Borrower and Senior Mezzanine Lender.

 

“Senior Mezzanine Loan Amount” means $500,000,000.

 

“Senior Mezzanine Loan Documents” means the “Loan Documents”, as
defined in the Senior Mezzanine Loan Agreement.

 

“Senior Mezzanine Loan Event of Default” means the occurrence of
any one or more events that would constitute an “Event of Default” under and as
defined in any of the Senior Mezzanine Loan Documents, with respect to which
Lender shall have received written notice from Borrower or the Senior Mezzanine
Lender.

 

“Senior Mezzanine Loan Permitted Encumbrances”
means:

 

(i)            the Liens created by the Loan
Documents and the Encumbered Property Debt Documents;

 

(ii)           all Liens and other matters
specifically disclosed on Schedule B of the Qualified Title Insurance Policy;

 

(iii)          Liens, if any, for Taxes not yet
delinquent;

 

(iv)          mechanics’,
materialmen’s or similar Liens, if any, and Liens for delinquent taxes or
impositions, in each case only if being contested in good faith and by 

 

28

 

appropriate proceedings,
provided that no such Lien is in imminent danger of foreclosure and provided
further that either (a) each such Lien is released or discharged of
record or fully insured over by the title insurance company issuing the
Qualified Title Insurance Policy within 60 days of its creation, or (b) Borrower
deposits with Lender, by the expiration of such 60-day period, an amount equal
to 115% of the dollar amount of such Lien or a bond in the aforementioned
amount from such surety, and upon such terms and conditions, as is reasonably
satisfactory to Lender, as security for the payment or release of such Lien
(such 60-day period shall be extended to 90 days with respect to any such Lien
that is caused by a Tenant, provided Borrower exercises commercially reasonable
efforts during such 90-day period to cause such Tenant to remove such Lien or
provide the bond described above);

 

(v)           rights of existing Tenants under
Leases heretofore disclosed to Lender, and the rights of future Tenants and
subtenants as tenants only pursuant to written Leases entered into in
conformity with the provisions of this Agreement; and

 

(vi)          easements and other customary
encumbrances customarily encumbering like properties and entered into in the
ordinary course of business, to the extent such easements or encumbrances do
not result in a Material Adverse Effect.

 

“Senior Mezzanine Loan Principal Indebtedness” means the “Principal
Indebtedness” as defined in the Senior Mezzanine Loan Agreement.

 

“Service” means the Internal Revenue Service or any successor
agency thereto.

 

“Servicer” means the entity or entities appointed by Lender from
time to time to serve as servicer and/or special servicer of the Loan.  If at any time no entity is so appointed, the
term “Servicer” shall be deemed to refer to Lender.

 

“Single Member LLC” means a limited liability company which
either (x) has only one member, or (y) has multiple members, none of
which is a Single-Purpose Equityholder.

 

“Single-Purpose Entity”
means a Person which (a) was formed solely for the purpose of acquiring
and holding (i) in the case of a Property Owner, an ownership interest in
its Property, (ii) in the case of a Required Equity Pledgor, an ownership
interest in its Required Equity (iii) in the case of the Borrower, an
ownership interest in the Senior Mezzanine Borrower or (iv) in the case of
a Single-Purpose Equityholder, an ownership interest in the Borrower, (b) does
not engage in any business unrelated to (i) in the case of a Property
Owner, such Property, (ii) in the case of a Required Equity Pledgor, such
Required Equity, (iii) in the case of the Borrower, its ownership interest
in Senior Mezzanine Borrower or (iv) in the case of a Single-Purpose
Equityholder, its ownership interest in the Borrower, (c) does not have
any assets other than those related to (i) in the case of a Property
Owner, such Property, (ii) in the case of a Required Equity Pledgor, such
Required Equity (iii) in the case of the Borrower, its ownership interest
in Senior Mezzanine Borrower or (iv) in the case of a Single-Purpose
Equityholder, its ownership interest in the Borrower, (d) does not have
any Debt other than, in the case of Borrower, Permitted Debt, (e) maintains
books, accounts, records, financial statements, stationery, invoices and checks
which are separate and apart from those of any other Person 

 

29

 

(except that such Person’s financial position, assets, results of
operations and cash flows may be included in the consolidated financial
statements of an Affiliate of such Person in accordance with GAAP, provided
that any such consolidated financial statements shall contain a note indicating
that such Person and its Affiliates are separate legal entities and maintain
records, books of account separate and apart from any other Person), (f) is
subject to and complies with all of the limitations on powers and separateness
requirements set forth in the organizational documentation of such Person as of
the Closing Date, (g)  holds itself out as being a Person separate and
apart from each other Person and not as a division or part of another Person, (h) conducts
its business in its own name (except for services rendered under a management
agreement with an Affiliate, so long as the manager, or equivalent thereof,
under such management agreement holds itself out as an agent of such Person), (i) exercises
reasonable efforts to correct any known misunderstanding actually known to it
regarding its separate identity, and maintains an arm’s-length relationship
with its Affiliates, (j) pays its own liabilities out of its own funds
(including the salaries of its own employees, if any) and reasonably allocates
any overhead that is shared with an Affiliate, including paying for shared
office space and services performed by any officer or employee of an Affiliate,
(k) maintains a sufficient number of employees in light of its
contemplated business operations, (l) conducts its business so that the
assumptions made with respect to it which are contained in the Nonconsolidation
Opinion shall at all times be true and correct in all material respects, (m) except as contemplated by the Loan
Documents, maintains its assets in such a manner that it will not be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person, (n) observes all applicable corporate
entity-level formalities in all material respects, (o) except as contemplated by the Loan Documents,
does not commingle its assets with those of any other Person and holds
such assets in its own name, (p) except
as contemplated by the Loan Documents, except as set forth in the
Encumbered Property Debt Documents and the Loan Documents, does not assume,
guarantee or become obligated for the debts of any other Person, and does not
hold out its credit as being available to satisfy the obligations or securities
of others, (q) does not acquire obligations or securities of its
shareholders, members or partners, (r) except as contemplated by the Loan Documents, except in
connection with the Loan, does not pledge its assets for the benefit of any
other Person and does not make any loans or advances to any Person, (s) intends
to maintain adequate capital in light of its contemplated business operations, (t) has
two Independent Directors, or, in the case of a limited partnership, has a
Single-Purpose Equityholder with two Independent Directors, (u) has
by-laws or an operating agreement, or, in the case of a limited partnership,
has a Single-Purpose Equityholder with by-laws or an operating agreement, which
provides that, for so long as the Loan is outstanding, such Person shall not
take or consent to any of the following actions except to the extent expressly
permitted in this Agreement and the other Loan Documents:

 

(i)            to the fullest
extent permitted by law, the dissolution, liquidation, consolidation, merger or
sale of all or substantially all of its assets (and, in the case of a
Single-Purpose Equityholder, the assets of the Borrower or Senior Mezzanine
Borrower, as the case may be);

 

(ii)           the engagement by
such Person (and, in the case of a Single-Purpose Equityholder, the engagement
by the Borrower or Senior Mezzanine Borrower, as the case may be) in, (a) in
the case of any Property Owner, any business other than the acquisition,
development, management, leasing, ownership, maintenance and operation 

 

30

 

of its Property, and activities incidental thereto, (b) in
the case of any Required Equity Pledgor, any business other than the
acquisition and ownership of its Required Equity, (c) in the case of
Borrower, any business other than the acquisition and ownership of the equity
interests in Senior Mezzanine Borrower and (d) in the case of a
Single-Purpose Equityholder, activities incidental to the acquisition and
ownership of its interest in the Borrower or the Senior Mezzanine Borrower;

 

(iii)          the filing, or
consent to the filing, of a bankruptcy or insolvency petition, any general
assignment for the benefit of creditors or the institution of any other insolvency
proceeding, or the seeking or consenting to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator, custodian or any similar official
in respect of such Person without the affirmative vote of all of its
Independent Directors (and, in the case of a Single-Purpose Equityholder, in
respect of the Borrower without the affirmative vote of both of such
Single-Purpose Equityholder’s Independent Directors); and

 

(iv)          any amendment or
modification of any provision of its (and, in the case of a Single-Purpose
Equityholder, the Borrower’s) organizational documents relating to
qualification as a “Single-Purpose Entity”,

 

and (v) if such entity is a Single Member LLC
that does not have an independent non-equity member, has organizational documents
which provide that upon the occurrence of any event (other than a permitted
equity transfer) that causes its sole member to cease to be a member while the
Loan is outstanding, at least one of its Independent Directors shall
automatically be admitted as the sole member of the Single Member LLC and shall
preserve and continue the existence of the Single Member LLC without
dissolution.

 

“Single-Purpose Equityholder” means a Single-Purpose Entity that
(x) is a limited liability company or corporation formed under the laws of
the State of Delaware, (y) owns at least a 0.5% direct equity interest in
Borrower, and (z) serves as the general partner or managing member of
Borrower.

 

“SNDA” has the meaning set forth in Section 5.7(f).

 

“Sponsor” means Gramercy Capital Corp., or any successors and
assigns thereof by merger, consolidation, amalgamation, reorganization,
acquisition of all or substantially all of the shares or other ownership
interests in Sponsor, by transfer of all or substantially all of Sponsor’s assets
in a single transaction, or through a similar transaction.

 

“Spread” means:

 

(i)            initially, 6.00%; and

 

(ii)           following the bifurcation of the Note
into multiple Note Components pursuant to Section 1.3(c), the
weighted average of the Component Spreads at the time of determination,
weighted on the basis of the corresponding Component Balances.

 

“Subordination of Property Management Agreement” means that
certain consent and agreement of manager and subordination of management
agreement executed by Borrower 

 

31

 

and the Approved Property Manager as of the Closing Date, as the same
may from time to time be modified or replaced in accordance herewith.

 

“Taxes” means all real estate and personal property taxes,
assessments, fees, taxes on rents or rentals, water rates or sewer rents,
facilities and other governmental, municipal and utility district charges or
other similar taxes or assessments now or hereafter levied or assessed or
imposed against the Properties or Borrower with respect to the Properties or
rents therefrom or which may become Liens upon any of the Properties, without
deduction for any amounts reimbursable to Borrower by third parties.

 

“Tenant” means any Person liable by contract or otherwise to pay
monies (including a percentage of gross income, revenue or profits) pursuant to
a Lease.

 

“Tenant Improvements” means, collectively, (i) tenant
improvements to be undertaken for any Tenant which are required to be completed
by or on behalf of Borrower, Senior Mezzanine Borrower or any Property Owner
pursuant to the terms of such Tenant’s Lease, (ii) tenant improvements
paid or reimbursed through allowances to a Tenant pursuant to such Tenant’s
Lease, and (iii) other similar tenant inducements.

 

“Tenant Notice” has the meaning set forth in Section 3.1(b).

 

“Test Period” means each 12-month period ending on the last day
of a Fiscal Quarter; provided, however, “Test Period” shall mean
the most recently completed calendar quarter, annualized, for calculation of
the “LIBOR Strike Rate”.

 

“Transaction” means, collectively, the Merger
and other transactions contemplated and/or financed by the Loan Documents.

 

“Transfer” means (i) with respect to a Property, the
pledge, sale or other whole or partial conveyance of all or any portion of any
of the Properties or any direct or indirect interest therein, or any direct or
indirect equity interest in the owner thereof, including granting of any
purchase options, rights of first refusal, rights of first offer or similar
rights in respect of any portion of such Property or the subjecting of any
portion of such Property to restrictions on transfer; except that the
conveyance of a space lease at such Property in accordance herewith shall not
constitute a Transfer and (ii) with respect to the Collateral, the Senior
Mezzanine Loan Collateral and/or the Required Equity, unless expressly
permitted hereunder, the pledge, sale or other whole or partial conveyance of
all or any portion thereof or any direct or indirect equity interest therein.

 

“TRS Owner” means American Financial TRS, Inc.

 

“TRS Property” means any Property directly or indirectly owned
by TRS Owner.

 

“Unaffiliated
Release Price” has the meaning set forth in Exhibit I.

 

“Underfunding” means with respect to any Plan, the excess, if
any, of the “projected benefit obligations” (within the meaning of Statement of
Financial Accounting Standards 87) under such Plan (determined using the
actuarial assumption used for financial 

 

32

 

statement disclosure in the most recent financial statements of the
Plan sponsor) over the fair market value of the assets held under the Plan.

 

“Use” means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation of such
Hazardous Substance.

 

“U.S. Person” means a United States person within the meaning of
Section 7701(a)(30) of the Code.

 

“U.S. Tax” means any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America or any
taxing authority thereof.

 

“Value
Add Pool Equity” means, collectively, 100% of the direct equity interests
in the owner of each Value Add Pool Owner.

 

“Value Add Pool Equity Release Price” has the meaning set forth
in Exhibit I.

 

“Value
Add Pool Owner” means, collectively or individually, as the context may
require, each Person that owns a Value Add Pool Property as listed on Schedule
J.

 

“Value
Add Pool Pledgor” means each owner of a Value Add Pool Owner, as set forth
on Schedule J.

 

“Value Add Pool Property” means, collectively or individually,
as the context may require, each of the Properties listed on Schedule J.

 

“Waste” means any material abuse or destructive use (whether by
action or inaction) of the Properties.

 

“Zoning Report” means a zoning report or reports with respect to
each of the Properties approved by Lender and delivered to Lender in connection
with the Loan, and any amendments or supplements thereto delivered to Lender.

 

 (b)          Rules of Construction.  All references to sections, schedules and
exhibits are to sections, schedules and exhibits in or to this Agreement unless
otherwise specified.  Unless otherwise
specified: (i) all meanings attributed to defined terms in this Agreement
shall be equally applicable to both the singular and plural forms of the terms
so defined, (ii) “including” means “including, but not limited to”, (iii) references
to Payment Dates that fall in specified months ignore the preceding Business
Day convention, and (iv) “mortgage” means a mortgage, deed of trust, deed
to secure debt or similar instrument, as applicable, and “mortgagee” means the
secured party under a mortgage, deed of trust, deed to secure debt or similar
instrument.  All accounting terms not
specifically defined in this Agreement shall be construed in accordance with
GAAP, as same may be modified in this Agreement.  Notwithstanding anything to the contrary set
forth herein or in the other Loan Documents, wherever the Loan Documents
provide that Senior Mezzanine Borrower, any Property Owner or any Joint Venture
Owner shall take or refrain from taking an action, and all references to
Borrower taking an action with respect to a Property (e.g., requirements
that Borrower maintain the Property, perform obligations under 

 

33

 

Leases, etc.), such provision shall be construed to mean that Borrower
shall cause the Senior Mezzanine Borrower to cause the applicable Property
Owner or Joint Venture Owner (to the fullest extent permitted under the
applicable Qualified Joint Venture Agreements with respect to the Joint Venture
Properties) to take or refrain from taking such action, as applicable; and all
references to the creation or release of a Lien of Lender on an Encumbered
Property shall mean the creation or release of Senior Mezzanine Lender’s Lien
on the Collateral specifically related to such Property.  The Schedules attached hereto reflect the
state of affairs as of the Closing Date but do not reflect subsequent changes
that may have occurred pursuant to and in accordance with this Agreement.  The terms and provisions in the Original Loan
Agreement relating to the “Indenture”, as defined therein, the obligations
issued thereunder and the representations relating thereto, shall apply with
respect to the period from the Closing Date through and including the day
immediately following the Closing Date.

 

34

 

ARTICLE I

 

GENERAL TERMS

 

1.1.         The Loan.  On the Closing Date, subject to the terms and
conditions of this Agreement, Lender shall make a loan to Borrower (the “Loan”)
in an amount equal to the Loan Amount. 
The Loan shall initially be represented by a single Note which shall
bear interest as described in this Agreement at a per annum rate as provided in
Section 1.3(a).  The Loan
shall be secured by the Collateral.

 

1.2.         The Term.

 

(a)           The
Maturity Date of the Loan shall initially be the Payment Date in March 2010,
or such earlier date as may result from acceleration.

 

(b)          Borrower
shall have a single option to extend the scheduled Maturity Date of the Loan to
the Payment Date in the month containing the one-year anniversary of the
Maturity Date (the period of such extension, the “Extension Term”), provided
that (i) Borrower shall deliver to Lender written notice of such extension
at least 30 and not more than 60 days prior to the Maturity Date; (ii) no
monetary or other material Default shall be continuing on either the date of
such notice or the Maturity Date as theretofore in effect; (iii) Borrower
shall have obtained an Extension Interest Rate Cap Agreement for the Extension
Term and collaterally assigned such Extension Interest Rate Cap Agreement to
Lender pursuant to an Assignment of Interest Rate Cap Agreement; (iv) the term of the Senior Mezzanine Loan shall
have been extended in accordance with the provisions of Section 1.2(b) of
the Senior Mezzanine Loan Agreement and Senior Mezzanine Borrower shall have
obtained and collaterally assigned to Senior Mezzanine Lender an “Extension
Interest Rate Cap Agreement” (as defined in the Senior Mezzanine Loan
Agreement) for the applicable Extension Term; and (v) Borrower
shall have paid to Lender an extension fee in an amount equal to 0.75% of the
Principal Indebtedness and all reasonable out-of-pocket expenses incurred by
Lender in connection with such extension. If Borrower fails to exercise the
extension option in accordance with the provisions of this Agreement, the
extension option, and any subsequent extension option hereunder, will
automatically cease and terminate.

 

1.3.         Interest
and Principal.

 

(a)           On each
Payment Date, Borrower shall pay interest on the Principal Indebtedness for the
Interest Accrual Period in which such Payment Date falls at a rate per annum
equal to the sum of LIBOR, determined as of the Interest Determination Date
immediately preceding such Interest Accrual Period, plus the Spread
(except that interest shall be payable on the Indebtedness, including due but
unpaid interest, at the Default Rate with respect to any portion of such
Interest Accrual Period falling during the continuance of an Event of
Default).  Interest accruing for the
first Interest Accrual Period shall be prepaid on the Closing Date from the
Loan proceeds otherwise to be disbursed to Borrower at Closing.  Interest payable hereunder shall be computed
on the basis of a 360-day year and the actual number of days elapsed.

 

35

 

(b)          No
prepayments of the Loan shall be permitted except as provided in Sections
2.1 and 5.16(d).  The entire
outstanding Principal Indebtedness, together with all interest thereon through
the end of the Interest Accrual Period in which the Maturity Date falls
(calculated as if such Principal Indebtedness were outstanding for the entire
Interest Accrual Period) and all other amounts then due under the Loan
Documents shall be due and payable by Borrower to Lender on the Maturity Date,
as such date may be extended pursuant to Section 1.2(b).

 

(c)           Upon
written notice from Lender to Borrower (the “Componentization Notice”),
the Note will be deemed to have been subdivided (retroactively as of the
Closing) into multiple components (“Note Components”).  Each Note Component shall have such notional
balance (a “Component Balance”) as Lender shall specify in the
Componentization Notice and an interest rate equal to the sum of LIBOR plus
such amount as Lender shall specify in the Componentization Notice (each such amount,
a “Component Spread”); provided that (i) the sum of the
Component Balances of all Note Components shall equal the then-applicable
Principal Indebtedness, and (ii) except following a prepayment as the
result of an Event of Default or as a result of the application of Loss
Proceeds in connection with a Casualty or Condemnation(x) all payments of
interest and principal hereunder shall be applied to the Note Components on a
pro rata basis and (y) the weighted average of the Component Spreads,
weighted on the basis of their respective Component Balances, shall equal the
percentage set forth in clause (i) of the definition of “Spread”.  If requested by Lender, each Note Component
shall be represented by a separate physical Note (and subject to any intercreditor
agreement among Lender, Junior Mezzanine Lender and/or any Encumbered Property
Lender, and/or any co-lender agreement among the Lenders hereunder, all
payments of interest and principal hereunder shall be applied to the Notes on a
pro rata basis).  Borrower shall execute
and return to Lender each such Note within a reasonable period of time, but in
any event not in excess of four Business Days after Borrower’s receipt of an
execution copy thereof.

 

(d)          Any
payments of interest and principal not paid when due hereunder shall bear
interest at the applicable Default Rate and, when paid, shall be accompanied by
a late fee in an amount equal to 4% times the amount of such late payment in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment.  Borrowers shall have
no obligation hereunder to pay Default Rate interest or a late charge if such
failure to timely make a payment is due to Lender not complying with its
obligations under Article 3 hereof and the Cash Management
Agreement and no Default or Event of Default shall result under the Loan
Documents by reason thereof.

 

1.4.         Interest
Rate Cap Agreements.

 

(a)           On or
prior to the Closing Date, Borrower shall obtain, and thereafter maintain in
effect, an Initial Interest Rate Cap Agreement, which shall be coterminous with
the initial term of the Loan and have a notional amount equal to the Loan
Amount.   Any Initial Interest Rate Cap
Agreement shall have a LIBOR strike rate equal to or less than the LIBOR Strike
Rate.

 

36

 

(b)          If Borrower
exercises its option to extend the term of the Loan pursuant to Section 1.2(b),
then on or prior to the commencement of the Extension Term Borrower shall
obtain, and thereafter maintain in effect, an Extension Interest Rate Cap
Agreement having (x) a term coterminous with the Extension Term, (y) a
notional amount at least equal to the Principal Indebtedness as of the first
day of the Extension Term, and (z) a LIBOR strike rate equal to or less
than the LIBOR Strike Rate.

 

(c)           Borrower
shall collaterally assign to Lender pursuant to an Assignment of Interest Rate
Cap Agreement all of its right, title and interest in any and all payments
under each Interest Rate Cap Agreement and shall deliver to Lender an executed
counterpart of such Interest Rate Cap Agreement and obtain the consent of the
Acceptable Counterparty to such collateral assignment (as evidenced by the Acceptable
Counterparty’s execution of such Collateral Assignment of Interest Rate Cap
Agreement).

 

(d)          Borrower
shall comply with all of its obligations under the terms and provisions of each
Interest Rate Cap Agreement.  All amounts
paid under an Interest Rate Cap Agreement shall be deposited directly into the
Cash Management Account.  Borrower shall
take all actions reasonably requested by Lender to enforce Lender’s rights
under the Interest Rate Cap Agreement in the event of a default by the
counterparty thereunder and shall not waive, amend or otherwise modify any of
its rights thereunder.

 

(e)           If, at any
time during the term of the Loan, the counterparty to the Interest Rate Cap
Agreement then in effect ceases to be an Acceptable Counterparty and thereafter
fails to abide by the requirements set forth in such Interest Rate Cap
Agreement with respect to ratings downgrades, then Borrower shall promptly
obtain a replacement Interest Rate Cap Agreement satisfying the requirements
set forth in paragraph (a) or (b) above, as applicable, with a
counterparty that is an Acceptable Counterparty.

 

(f)           As of the
Closing Date, and at any time that Borrower obtains a replacement Interest Rate
Cap Agreement pursuant to this Section 1.4, Borrower shall deliver
to Lender a legal opinion or opinions from counsel to the applicable Acceptable
Counterparty (which counsel may be internal counsel) in substantially the form
of Exhibit B.

 

1.5.         Method
and Place of Payment.  Except as
otherwise specifically provided in this Agreement, all payments and prepayments
under this Agreement and the Notes (including any deposit into the Cash
Management Account pursuant to Section 3.2(c)) shall be made to
Lender not later than 1:00 p.m., New York City time, on the date when due
and shall be made in lawful money of the United States of America by wire
transfer in federal or other immediately available funds to the account
specified from time to time by Lender. 
Any funds received by Lender after such time shall be deemed to have
been paid on the next succeeding Business Day. 
Lender shall notify Borrower in writing of any changes in the account to
which payments are to be made.  If the
amount received from Borrower (or from the Cash Management Account pursuant to Section 3.2(b))
is less than the sum of all amounts then due and payable hereunder, such amount
shall be applied, at Lender’s sole discretion, either toward the components of
the Indebtedness (e.g., interest, principal and other amounts payable
hereunder) and the Note Components in such sequence as Lender shall elect in
its sole discretion, or toward the payment of Property expenses.

 

37

 

1.6.         Regulatory
Change.  If, as a result of any
Regulatory Change, any reserve, special deposit or similar requirements
relating to any extensions of credit or other assets of, or any deposits with,
any Lender is imposed, modified or deemed applicable and the result is to
increase the cost to such Lender of making LIBOR-based loans, or to reduce the
amount receivable by Lender hereunder in respect of any portion of the Loan
with respect to LIBOR-based loans by an amount deemed by such Lender to be
material (such increases in cost and reductions in amounts receivable, “Increased
Costs”), then Borrower agrees that it will pay to Lender upon Lender’s
request such additional amount or amounts (based upon a reasonable allocation
thereof by such Lender to the LIBOR-based loans made by such Lender) as will
compensate such Lender for such Increased Costs to the extent that such
Increased Costs are reasonably allocable to the Loan.  Lender will notify Borrower in writing of any
event occurring after the Closing Date which will entitle Lender to
compensation pursuant to this Section 1.6 as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation and will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender.  If such Lender shall fail
to notify Borrower of any such event within 90 days following the end of the
month during which such event occurred, then Borrower’s liability for any
amounts described in this Section incurred by such Lender as a result of
such event shall be limited to those attributable to the period occurring
subsequent to the 90th day prior to the date upon which such Lender actually
notified Borrower of the occurrence of such event.  Notwithstanding the foregoing, in no event
shall Borrower be required to compensate any Lender for any portion of the
income or franchise taxes of Lender, whether or not attributable to payments
made by Borrower.  If a Lender requests
compensation under this Section 1.6, Borrower may, by notice to
Lender, require that such Lender furnish to Borrower a statement setting forth
in reasonable detail the basis for requesting such compensation and the method
for determining the amount thereof.

 

1.7.         Taxes.

 

(a)           Borrower
agrees to indemnify Lender against any present or future stamp, documentary or
other similar or related taxes or other similar or related charges now or
hereafter imposed, levied, collected, withheld or assessed by any United States
Governmental Authority by reason of the execution and delivery of the Loan
Documents and any consents, waivers, amendments and enforcement of rights under
the Loan Documents.

 

(b)          If Borrower
is required by law to withhold or deduct any amount from any payment hereunder
in respect of any U.S. Tax, Borrower shall withhold or deduct the appropriate
amount, remit such amount to the appropriate Governmental Authority and pay to
each Person to whom there has been an Assignment or Participation of a Loan and
who is not a U.S. Person such additional amounts as are necessary in order that
the net payment of any amount due to such non-U.S. Person hereunder after
deduction for or withholding in respect of any U.S. Tax imposed with respect to
such payment (or in lieu thereof, payment of such U.S. Tax by such non-U.S.
Person), will not be less than the amount stated in this Agreement to be then
due and payable; except that the foregoing obligation to pay such additional
amounts shall not apply (i) to any assignee that has not complied with the
obligations contained in Section 9.7(c), (ii) to any U.S.
Taxes withheld or deducted from, or imposed on, any payment hereunder or under
the Note or any Note Components by reason of any present or former connection
between any non-U.S. 

 

38

 

Person and the United States of America (other than
solely on account of the execution and performance of, the enforcement of any
right under or the receipt of any payment under, this Agreement or a Note), (iii) to
any U.S. Taxes withheld or deducted from, or imposed on, any payment hereunder
or under the Note or any Note Components at the time of any Assignment or
Participation of a Loan or the Note or any Note Components to any non-U.S.
Person, (iv) to any U.S. Taxes imposed solely by reason of the failure by
such Person (or, if such Person is not the beneficial owner of the relevant
Loan, such beneficial owner) to comply with applicable certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connections with the United States of
America of such Person (or beneficial owner, as the case may be) if such
compliance is required by statute or regulation of the United States of America
as a precondition to relief or exemption from such U.S. Taxes; or (v) with
respect to any Person who is a fiduciary or partnership or other than the sole
beneficial owner of such payment, to any U.S. Tax imposed with respect to
payments made under any Note to a fiduciary or partnership to the extent that
the beneficial owner or member of the partnership would not have been entitled
to the additional amounts if such beneficial owner or member of the partnership
had been the holder of the Note.

 

(c)           Within 30
days after paying any amount from which it is required by law to make any
deduction or withholding, and within 30 days after it is required by law to
remit such deduction or withholding to any relevant taxing or other authority,
Borrower shall deliver to such non-U.S. Person satisfactory evidence of such
deduction, withholding or payment (as the case may be).

 

1.8.         Release.  Upon payment of the Indebtedness in full when
permitted or required hereunder, Lender shall execute instruments prepared by
Borrower and reasonably satisfactory to Lender, which, at Borrower’s election: (a) release
and discharge all Liens on all Collateral securing payment of the Indebtedness
(subject to Borrower’s obligation to pay any associated fees and expenses),
including all balances in the Collateral Accounts, terminate the Loan Documents
(other than those provisions thereof that expressly survive repayment of the
Indebtedness in full) and provide notice to third parties, including the Cash
Management Bank and Tenants; or (b) assign such Liens (and the applicable
Loan Documents) to a new lender designated by Borrower.

 

ARTICLE II

 

PREPAYMENT

 

2.1.         Voluntary
and Mandatory Prepayment.

 

(a)           Borrower
shall have the right, at its option, upon ten Business Days’ prior written
notice to Lender (which notice may be revocable at any time by Borrower,
provided that Borrower shall reimburse Lender for all of its reasonable
out-of-pocket costs and expenses incurred as a result of any such revocation),
to prepay the Loan in whole or in part at any time, provided that if such
prepayment is made prior to the Par Prepayment Date then Borrower shall pay to
Lender simultaneously with such prepayment the applicable Prepayment Fee; provided,
however, that no Prepayment Fee shall be payable with respect to (i) a
prepayment of the Loan in connection with the release of one or more Value Add
Pool Properties or the release of one or 

 

39

 

more of the Properties within the Dana Portfolio,
except, in each case, to the extent that aggregate prepayments of the Loan
shall exceed 30% of the Loan Amount, (ii) a prepayment of the Loan in
connection with the sale of a Disposition Asset or (iii) any prepayment of
the Loan pursuant to Section 5.16(d).  Each such prepayment shall be accompanied by
the amount of interest theretofore accrued but unpaid in respect of the
principal amount so prepaid, plus the amount of interest that would have
accrued on the principal amount so prepaid had it remained outstanding through
the end of the Interest Accrual Period in which such prepayment is made and, if
such prepayment is made during the last two Business Days in any Interest
Accrual Period, the amount of additional interest that would have accrued on
the principal amount so prepaid had it remained outstanding through the end of
the following Interest Accrual Period. 
Following any such prepayment, Borrower may release or transfer, free
and clear of the Lien of the Loan Documents, a portion of the notional amount
of the Interest Rate Cap Agreement equal to the amount of such prepayment.  Any partial prepayment shall be applied to
the last payments of principal due under the Loan.

 

(b)          Borrower
shall not be permitted to make a voluntary prepayment of the Principal
Indebtedness (excluding any payment of any Affiliated Release Price,
Unaffiliated Release Price or Dana Release Price or any application of Loss
Proceeds) unless simultaneously therewith a prepayment of the Mortgage Loan and
the Senior Mezzanine Loan shall also be made in the amount necessary so that the
Principal Indebtedness, the Senior Mezzanine Loan Principal Indebtedness and
the Principal Indebtedness immediately after such prepayment are in the same
proportion as they were immediately prior to such prepayments (but Borrower
shall be permitted, and is required, to make the mandatory prepayments set
forth in Section 2.1(c)).  If
the Note has been bifurcated into multiple Note Components pursuant to Section 1.3(c),
all prepayments of the Loan, except those made during the continuance of an
Event of Default or pursuant to Section 5.16, shall be applied to
the Note Components on a pro rata basis. 
All prepayments of the Loan made during the continuance of an Event of
Default or pursuant to Section 5.16 shall be applied to the Note
Components in ascending order of interest rate (i.e., first to the Note
Component with the lowest Component Spread until its outstanding principal
balance has been reduced to zero, then to the Note Component with the second
lowest Component Spread until its outstanding principal balance has been
reduced to zero, and so on) or in such other order as Lender shall determine.

 

(c)           Borrower
shall make the following mandatory prepayments of the Loan:

 

(i)            on the first Payment
Date following the date on which any Restricted Cash is no longer required to
be maintained as collateral for the benefit of the applicable Encumbered
Property Lender pursuant to the applicable Encumbered Property Debt Documents,
Borrower shall prepay the Loan in accordance with Section 2.1 in an
amount equal to the product of (x) the amount of any such Restricted Cash,
times (y) the Loan Multiplier, provided that Borrower shall not be
required to pay any Prepayment Fee or other similar amount in connection
therewith;

 

(ii)           on any Payment Date on
which Dana Excess Cash Flow is contained in the Cash Management Account,
Borrower shall prepay the Loan in an amount equal to the product of (x) the
amount of such Dana Excess Cash Flow times (y) the Loan Multiplier,
provided that (i) Borrower shall not be required to pay any Prepayment Fee
or 

 

40

 

other similar
amount in connection therewith and (ii) the aggregate amount of
prepayments of the Loan and the Senior Mezzanine Loan made pursuant to this Section 2.1(c)(ii) shall
not be required to exceed $10,000,000 in the aggregate in any calendar year
(which amount shall be reduced on a proportionate basis to reflect any
reduction in Borrower’s interest in the Dana Portfolio in the event Senior
Mezzanine Borrower enters into a Qualified Joint Venture Agreement with respect
to the Dana Portfolio in accordance herewith, and any release of a Property in
the Dana Portfolio in accordance herewith, in each case provided the Release
Price required to be paid in accordance therewith has been paid);

 

(iii)          simultaneously with, and
as a condition to, any sale and/or financing of any Disposition Asset
(including subsequent sales and/or financings to the extent any initial sale or
financing is with or to an Affiliate of Borrower or Senior Mezzanine Borrower)
that shall cause the aggregate gross proceeds theretofore realized from the
sale and/or financing of Disposition Assets to exceed $184,000,000 (which gross
proceeds shall include the assumption of Debt without reduction for repayment
of Debt, but shall be net of customary transaction costs, including legal fees,
actually paid to third parties, in each case with respect to any such sale or
financing of a Disposition Asset) subject to the last sentence of Section 3.1(b) below,
Borrower shall prepay the Loan in accordance with Section 2.1 in an
amount equal to the product of (x) the amount of any such excess, times
(y) the Loan Multiplier, provided that Borrower shall not be required to
pay any Prepayment Fee or other similar amount in connection therewith (by way
of example only: if the Disposition Assets are encumbered by $100,000,000 and
are purchased for $100,000,000 subject to existing Debt, or are purchased for
$200,000,000 and existing Debt is repaid, then in either case the Loan shall be
reduced or repaid, as applicable, in the amount of $16,000,000 (net of
customary third party transaction costs paid to unaffiliated third parties)
times the Loan Multiplier); and

 

(iv)         simultaneously with any
voluntary prepayment of all or any portion of the Mortgage Loan Principal
Indebtedness and/or the Senior Mezzanine Loan Principal Indebtedness, Borrower
shall make a prepayment hereunder in the amount necessary so that the Principal
Indebtedness, the Mortgage Loan Principal Indebtedness and the Senior Mezzanine
Loan Principal Indebtedness immediately after such prepayments are in the same
proportion as they were immediately prior to such prepayments.

 

2.2.         Property Releases.

 

(a)           So long as
no Event of Default is then continuing and all amounts then due and owing to
Lender have been paid in full, Senior Mezzanine Borrower may from time to time
obtain the release of one or more of the Properties or direct or indirect
equity interests therein from the Liens of the Senior Mezzanine Loan Documents
in connection with a sale to an unaffiliated third-party in an arms’-length
transaction or a Permitted Affiliate Sale, or pursuant to Section 5.24, , provided
that: (1) at the time of such release (but provided that no Event of
Default has occurred and is continuing, not in connection with the transfer of
any Disposition Asset), Borrower shall prepay the Loan in accordance with Section 2.1
in an amount equal to the applicable Release Price, plus any additional amount
required to be prepaid in accordance with Section 2.2(c) in
order to reduce the Release Price Deficit, which aggregate prepayment shall be 

 

41

 

accompanied by the other amounts specified in Section 2.1,
including the applicable Prepayment Fee if such prepayment is made prior to the
Par Prepayment Date (for the avoidance of doubt, provided no Event of Default
is continuing, Borrower shall not be required to deposit into the Cash
Management Account the proceeds from the permitted sale of any Disposition
Assets, except if and to the extent that Borrower is required hereunder to pay
to Lender a Release Price or other amount in connection therewith), (2) except
with respect to the sale of the Dana Portfolio to an unaffiliated third party,
DSCR for the Test Period most recently ended, recalculated to include only
income and expense attributable to Senior Mezzanine Borrower’s interest in the
Properties remaining after the contemplated release and to exclude the interest
expense and principal payments on the aggregate amount to be prepaid, shall be
equal to or greater than DSCR immediately prior to such release (as reasonably
determined by Lender) (for these purposes, in the case of the sale of a
Mortgage Loan Collateral Property, DSCR shall be adjusted to ignore the effect
of so-called “rate creep” resulting from the fact that the prepayment of the
Loan and the Mortgage Loan will not result in a pro-rata reduction of their
respective principal amounts), (3) after giving effect to such release,
the aggregate Senior Collateral Value shall not be less than 120% of the sum of
the Principal Indebtedness and the Senior Mezzanine Loan Principal Indebtedness
and (4) Borrower shall reimburse Lender for any actual reasonable
out-of-pocket costs and expenses incurred by Lender in connection with this Section 2.2
(including the reasonable fees and expenses of legal counsel and the
Servicer).  Notwithstanding anything to
the contrary in this Section 2.2(a) (x) the release price
for a Disposition Asset shall be zero, subject to the requirement specified in Section 2.1(c)(iii),
and the foregoing requirements set forth in clauses (1) through (4) inclusive
shall not apply, (y) with respect to the release of any Joint Venture
Property, the Release Price applicable to such Property shall be adjusted to
reflect the Joint Venture Owner’s percentage interest in the Joint Venture
Property as of the date of any such release and (z) the release price for
any asset acquired by a Senior Mezzanine Borrower from and after the date
hereof (to the extent Senior Mezzanine Borrower is permitted to acquire any
such asset pursuant to the Senior Mezzanine Loan Agreement) shall be zero, and
the foregoing requirements set forth in clauses (1) through (4) inclusive
shall not apply.

 

(b)          Upon
satisfaction of the requirements set forth in Sections 2.1 and 2.2,
Lender will execute and deliver to Borrower such instruments, prepared by
Borrower and approved by Lender, as shall be necessary to release the
applicable Property or Properties from the Liens of the Loan Documents or to
assign the applicable portion of such Liens to a third party to the extent
necessary to avoid the incurrence of mortgage recording taxes.

 

(c)           Notwithstanding
anything herein to the contrary, in the case of a sale of a Property to an
unaffiliated third party in an arms’-length transaction, if the Net Proceeds
are less than the amount specified in clause (B)(x) of the definition of “Unaffiliated
Release Price”, then the amount of principal payable by Borrower under Section 2.2(a)(1) in
connection with the release of such Property shall be the Loan Multiplier times
100% of such Net Proceeds, subject to the following:

 

(i)            the Release Price
Deficit (as defined below) may not at any time exceed $30,000,000 times the
Loan Multiplier; and

 

(ii)           if and to the extent
the Release Price Deficit is greater than zero, an amount equal to the product
of the Excess Transfer Proceeds times the Loan Multiplier 

 

42

 

shall be applied toward prepayment of the Loan in accordance with Section 2.1
(and shall be accompanied by any applicable Prepayment Fee) until the Release
Price Deficit is reduced to zero.

 

“Release Price Deficit” means, from time to
time, the excess, if any, of (x) the sum of all Release Prices of all Properties
theretofore released, minus (y) the sum of all amounts theretofore
applied toward the prepayment of the Loan in connection with Transfers of
Properties pursuant to Section 2.2(a)(1).

 

2.3.         Value Add
Pool Equity Releases.  So long as no
Event of Default is then continuing and all amounts then due and owing to
Lender have been paid in full, Senior Mezzanine Borrower may obtain the release
of up to and including 80% of the Value Add Pool Equity in the aggregate from
the Liens of the Senior Mezzanine Loan Documents in connection with the sale of
such equity interests to an unaffiliated third party, provided that (1) at
the time of each such release, Borrower shall prepay the Loan, in accordance
with Section 2.1, in an amount equal to the applicable Value Add
Pool Equity Release Price, which prepayment shall be accompanied by the other
amounts specified in Section 2.1, (2) DSCR for the Test Period
most recently ended, recalculated to include only Senior Mezzanine Borrower’s
share of income and expense attributable to the Properties remaining after the
contemplated sale and to exclude the interest expense and principal payments on
the aggregate amount to be prepaid, shall be equal to or greater than DSCR
immediately prior to such sale (as reasonably determined by Lender), (3) after
giving effect to such release, the aggregate Senior Collateral Value shall not
be less than 120% of the sum of the Principal Indebtedness and the Senior
Mezzanine Loan Principal Indebtedness (as reasonably determined by Lender), (4) Borrower
shall reimburse Lender for any actual reasonable out-of-pocket costs and
expenses incurred by Lender in connection with this Section 2.2
(including the reasonable fees and expenses of legal counsel and the Servicer),
(5) Senior Mezzanine Lender shall retain a first-priority perfected pledge
of the remaining Value Pool Property Equity, which shall not be less than 20%
of the initial Value Add Pool Equity, (6) Lender shall have reasonably
approved the joint venture or other applicable agreement between Senior
Mezzanine Borrower and the purchaser(s) of Value Add Pool Equity and any
subsequent amendments and modifications thereof, and such joint venture or
other applicable agreement shall provide that (x) if Senior Mezzanine
Lender forecloses on the Value Add Pool Equity pledged to Senior Mezzanine
Lender under the Senior Mezzanine Loan Documents, then unless 80% of the Value
Add Pool Equity has been released in accordance with this Section 2.3
(which 80% threshold may be reduced to 66.67% in Lender’s reasonable
discretion), Senior Mezzanine Lender shall have the right to require that the
Value Add Pool Properties be liquidated, subject to customary rights of first
offer or appraisal sale or other similar rights reasonably acceptable to
Lender, and (y) distributions of operating revenues, capital proceeds and
all other income of the Value Add Pool Properties, to the extent available for
distribution, shall be made to the equityholders in proportion to their
respective equity interests and (7) in the event that 80% of the Value Add
Pool Equity has been released in accordance with the provisions of this Section 2.3,
any subsequent sale of a Value Add Pool Property or of Senior Mezzanine
Borrower’s entire remaining 20% equity interest referenced in the preceding
clause (5) shall be subject to the requirements of foregoing clauses (1) through
(6), provided, however, that the applicable Unaffiliated Release
Price shall be paid in lieu of the Value Add Pool Equity Release Price, except
that, for purposes of this subsection (7) only, the Release Price payable
in connection therewith shall be the Unaffiliated Release Price (taking into
account 100% of the Aggregate 

 

43

 

Allocated Loan Amounts of the respective Properties,
without reduction for prior equity sales) reduced by multiplying the amount
specified in clause (x) of the definition of Unaffiliated Release Price by
20%, and the percentage specified in clause (y) of the definition of
Unaffiliated Release Price shall be replaced with “100%”.

 

2.4  Release
of Vacant Land.  So long as no Event
of Default is then continuing, Senior Mezzanine Borrower may obtain the release
of one or more vacant non-income producing parcels of land (each such parcel, a
“Release Parcel”) from the restrictions and Liens of the Senior
Mezzanine Loan Documents in connection with the Transfer of such Release Parcel
to an unaffiliated third party in a bona fide arms-length transaction upon
satisfaction of the following conditions:

 

(i)            Borrower shall deliver
to Lender notice of its intent to release one or more Release Parcels, which
notice must be given at least 10 Business Days and not more than 60 days prior
to the Business Day upon which the release is to be made and shall specify the
Release Parcel(s) that Borrower intends to release.  Borrower shall promptly reimburse Lender for
any actual out-of-pocket costs and expenses (including the reasonable fees and
expenses of legal counsel and the Servicer) incurred by Lender in connection
with a release pursuant to this Section 2.4.

 

(ii)           At the time of such
release, Borrower shall prepay a portion of the Loan, in accordance with Section 2.1,
in an amount equal to the applicable Parcel Release Price.

 

(iii)          Lender shall have
received evidence reasonably satisfactory to it that (x) the Mortgage
Borrower shall have satisfied all of the conditions to the proposed release set
forth in the applicable Encumbered Debt Documents any (y) Senior Mezzanine
Borrower shall have satisfied all of the conditions to the proposed release set
forth in the Senior Mezzanine Loan Documents.

 

(iv)         Borrower shall have
delivered to Lender satisfactory evidence that (1) the applicable Release
Parcel has been legally subdivided from the remaining Property, a separate tax
identification number shall have been issued for such Release Parcel and all
necessary variances, if any, shall have been obtained (with the result that,
upon the transfer and release of such Release Parcel, no part of the remaining
Property shall be part of a tax lot which includes any portion of such Release
Parcel); (2) after giving effect to such transfer, each of the Release
Parcel and the remaining Property conforms to and is in compliance in all
material respects with applicable Legal Requirements (including, without
limitation, all zoning and subdivision laws, setback requirements, sideline
requirements, parking ratio requirements, use requirements, building and fire
code requirements, environmental requirements and wetlands requirements) and
constitutes a separate tax lot, (3) the Release Parcel is not necessary
for the remaining Property to comply with any zoning, building, land use or
parking or other Legal Requirements applicable to it or for the then current
use of the remaining Property, including without limitation for access,
driveways, parking, utilities or drainage or, to the extent that the Release
Parcel is necessary for any such purpose, a reciprocal easement agreement or
other agreement has been executed and recorded that would allow the owner of
the remaining Property to continue to use the release Parcel (at no cost or
expense to 

 

44

 

Borrower or Senior Mezzanine Borrower) to the extent necessary for such
purpose, and (4) the lots have been demised to Lender’s satisfaction in
its reasonable discretion;

 

(v)          In the case of a
Mortgage Loan Collateral Property, Senior Mezzanine Borrower shall deliver to
Mortgage Lender an endorsement to the Qualified Title Insurance Policy insuring
the applicable Mortgage (1) extending the effective date of the policy to
the effective date of the release; (2) confirming no change in the
priority of the Mortgage on the remaining Property (exclusive of the Release
Parcel) or in the amount of the insurance or the coverage of the Property
(exclusive of the Release Parcel) under the policy; and (3) insuring the
rights and benefits under any new or amended reciprocal easement agreement or
such other agreement required pursuant to clause (v)(3) of this Section that
has been executed and recorded, if any;

 

(vi)         Borrower and Senior
Mezzanine Borrower shall have complied with any requirements applicable to the
release in the Leases, reciprocal easement agreements, operating agreements,
parking agreements or other similar agreements affecting the remaining Property
and the release does not violate any of the provisions of such documents in any
respect that would result in a termination (or give any other party thereto the
right to terminate), extinguishment or other loss of material rights of
Borrower and/or Senior Mezzanine Borrower or in a material increase in Borrower’s
or Senior Mezzanine Borrower’s obligations under such documents and, to the
extent necessary to comply with such documents, the transferee of the Release
Parcel has assumed Borrower’s and Senior Mezzanine Borrower’s obligations, if
any, relating to the Release Parcel under such documents;

 

(vii)        ingress to and egress from
all portions of the remaining Property shall be over (i) physically open
and fully dedicated public roads or (ii) vehicle and pedestrian easements
which (1) provide vehicular and pedestrian access to a physically open and
fully dedicated public road, (2) are recorded in the chain of title to
both the property which is encumbered thereby and the remaining Property, (3) are
irrevocable and non-terminable without the consent of the owner of the
remaining Property; and provided further that, if lawfully obtainable, in the
case of a Mortgage Loan Collateral Property, Senior Mezzanine Borrower delivers
to Mortgage Lender an endorsement to the Qualified Title Insurance Policy,
which endorsement shall insure that (A) the benefit of each such easement
inures and runs to the benefit of the owner of the remaining Property, (B) the
Lien of the Mortgage is a first Lien on Mortgage Borrower’s beneficial interest
in such easement, subject to no exceptions other than Permitted Encumbrances
and those approved by Lender in its reasonable discretion and (C) no
then-existing mortgages, Liens, security interests or other encumbrances (other
than Permitted Encumbrances) on the Release Parcel burdened by such easement
are superior to, or under any circumstances could terminate, impair or limit
the terms of such easement;

 

(viii)       Borrower shall have
delivered an Officer’s Certificate to the effect that the conditions in this Section 2.4
have occurred or shall occur concurrently with the transfer and release of the
applicable Release Parcel; and

 

45

 

(ix)          Borrower shall execute
such documents and instruments and obtain such opinions of counsel as are
typical for similar transactions.

 

ARTICLE III

 

ACCOUNTS

 

3.1.         Cash
Management Account.

 

(a)           On or
prior to the Closing Date Borrower shall establish and thereafter maintain with
the Cash Management Bank a cash management account into which distributions
from the Senior Mezzanine Cash Management Account will be deposited (the “Cash
Management Account”), subject to and in accordance with the terms
hereof.  As a condition precedent to the
closing of the Loan, Borrower shall cause the Cash Management Bank to execute
and deliver an agreement (as modified or replaced in accordance herewith, a “Cash
Management Agreement”) which provides, inter  alia, that no
party other than Lender and Servicer shall have the right to withdraw funds
from the Cash Management Account.  The
fees and expenses of the Cash Management Bank shall be paid by Borrower.  From and after the Closing Date, Borrower
shall cause Senior Mezzanine Borrower to maintain the Senior Mezzanine Loan
Cash Management Account and the Senior Mezzanine Loan Collateral Accounts, in
each case, in accordance with the Senior Mezzanine Loan Documents,
notwithstanding any waiver or future amendment of the Senior Mezzanine Loan
Documents.  Provided that no Senior
Mezzanine Loan Event of Default or Mortgage Loan Event of Default shall have
occurred and be continuing, on each Business Day, all amounts on deposit in the
Senior Mezzanine Cash Management Account in excess of the “Minimum Balance”, as
defined in the Senior Mezzanine Loan Agreement, shall be remitted to the Cash
Management Account.

 

(b)          Subject to
the requirements of the Encumbered Property Debt Documents, within five
Business Days following the Original Closing Date, Borrower shall cause Senior
Mezzanine Borrower to deliver to each Tenant in the Properties (except for
Tenants at Other Properties) a written notice (a “Tenant Notice”) in the
form of Exhibit D instructing that (i) all payments under the
Leases shall thereafter be transmitted by them directly to, and deposited
directly into, the Senior Mezzanine Cash Management Account or a Blocked
Account and (ii) such instruction may not be rescinded unless and until
such Tenant receives from Borrower or Lender a copy of Lender’s written consent
to such rescission or Lender’s written notice that the Loan has been repaid in
full.  Borrower shall send a copy of each
such written notice to Lender and shall cause such notices to be redelivered to
each Tenant until such time as such Tenant complies therewith.  Subject to the Encumbered Property Debt
Documents and any Qualified Joint Venture Agreement, Borrower shall cause (i) all
cash Revenues relating to the Properties (other than the Encumbered Properties
and the TRS Properties) and all other money received by Borrower or the
Approved Property Manager (other than tenant security deposits required to be
held in escrow accounts) with respect to the Properties (other than the
Encumbered Properties and the TRS Properties) to be deposited in the Senior
Mezzanine Cash Management Account or a Blocked Account by the end of the first
Business Day following Senior Mezzanine Borrower’s or the Approved Property
Manager’s receipt thereof and (ii) all Distributions to be deposited in
the Senior Mezzanine Cash Management Account or a Blocked Account by the end of
the second Business Day following Borrower’s receipt thereof.  “Blocked Account” means an 

 

46

 

Eligible
Account maintained with a financial institution reasonably satisfactory to
Lender that enters into a blocked account agreement or similar irrevocable
direction instruction (as modified or replaced in accordance herewith, the “Blocked
Account Agreement”) reasonably satisfactory to Senior Mezzanine Lender
pursuant to which such financial institution will remit, at the end of each
Business Day, all amounts contained therein to an account specified by Senior
Mezzanine Lender.  For the avoidance of
doubt, notwithstanding anything to the contrary in this Agreement, no amounts
shall be deposited into the Senior Mezzanine Cash Management Account with
respect to any Encumbered Property or TRS Property, except for Distributions
pursuant to Section 5.23. 
Notwithstanding the foregoing, provided no Event of Default is
continuing, Borrower shall not be required to cause Senior Mezzanine Borrower
to deposit into the Senior Mezzanine Cash Management Account the proceeds from
the permitted sale of any Disposition Assets, except to the extent that
Borrower is required hereunder to pay to Lender a Release Price or other amount
in connection therewith.

 

(c)           Lender
shall have the right at any time, upon not less than 30 days’ prior written
notice to Borrower, to replace the Cash Management Bank with any Eligible
Institution at which Eligible Accounts may be maintained that will promptly
execute and deliver to Lender a Cash Management Agreement substantially
identical to the Cash Management Agreement executed at Closing.

 

(d)          Borrower
and Lender agree that the flow of funds with respect to the Senior Mezzanine
Cash Management Account and the Blocked Account as depicted in the diagrams
attached hereto as Schedule C is in compliance with this Section 3.1.

 

3.2.         Distributions
from Cash Management Account.

 

(a)           The Cash
Management Agreement shall provide that the Cash Management Bank shall remit to
an account specified by Borrower, at the end of each Business Day (or, at
Borrower’s election, on a less frequent basis), the amount, if any, by which
amounts then contained in the Cash Management Account (other than Dana Excess
Cash Flow and Restricted Cash) exceed the aggregate amount required to be paid
to or reserved with Lender, or prepaid pursuant to Section 2.1(c)(i),
on the next Payment Date pursuant to Section 3.2(b) (the “Minimum
Balance”); provided, however, that Lender shall terminate
such remittances during the continuance of an Event of Default or Mortgage Loan
Event of Default upon notice to the Cash Management Bank.  Lender may notify the Cash Management Bank at
any time of any change in the Minimum Balance. 
Lender shall deliver a copy of any notice of a change in the Minimum
Balance to Borrower, for information only (but any failure by Lender to do so
shall not in any way limit Borrower’s obligations or liabilities
hereunder).  Any payment received by any
Borrower pursuant to this Section 3.2 shall be received free of the
Lien of the Loan Documents.

 

(b)          On each
Payment Date, provided no Event of Default has occurred and is continuing,
Lender shall transfer amounts from the Cash Management Account, to the extent
available therein, to make the following payments in the following order of
priority:

 

(i)            to Lender, the amount
of all scheduled or delinquent interest on the Loan and all other amounts then
due and payable under the Loan Documents;

 

47

 

(ii)          to Lender, any
Restricted Cash required to be used to prepay the Loan pursuant to Section 2.1(c)(i);

 

(iii)         to Lender, all Dana
Excess Cash Flow pursuant to Section 2.1(c)(ii); and

 

(iv)         all remaining amounts to
such accounts as Borrower shall direct from time to time, unless a Mortgage
Loan Event of Default shall have occurred and be continuing, in which case, all
remaining amounts to the Mortgage Loan Cash Management Account.

 

(c)           If on any Payment Date
the amount in the Cash Management Account shall be insufficient to make the
transfer described in Section 3.2(b)(i)-(iii), Borrower shall
deposit into the Cash Management Account on such Payment Date the amount of
such deficiency.  If Borrower shall fail
to make such deposit, the same shall constitute an Event of Default and, in
addition to all other rights and remedies provided for under the Loan
Documents, Lender may disburse and apply the amounts in the Collateral Accounts
in accordance with Section 3.5(c).

 

3.3.         Senior Mezzanine Loan Covenants; Replacement
of Senior Mezzanine Loan Collateral Accounts.

 

(a)           Borrower hereby covenants that it shall cause Senior Mezzanine Borrower
to fully comply in all material respects with each of the covenants of Senior
Mezzanine Borrower set forth in Article III of the Senior Mezzanine Loan
Agreement, notwithstanding any waiver or future amendment of such covenants by
Senior Mezzanine Lender and Senior Mezzanine Borrower.

 

(b)          Notwithstanding anything to the contrary contained in this Agreement, if
at any time and for any reason, Senior Mezzanine Borrower is no longer required
to maintain any of the Senior Mezzanine Loan Collateral Accounts in accordance
with the terms of the Senior Mezzanine Loan Documents (including, for these
purposes, any Letter of Credit delivered in lieu of cash), (i) Borrower
shall be required to immediately establish and maintain with banking
institutions selected by Lender and reasonably approved by Borrower and for the
benefit of Lender, reserves in replacement and substitution thereof, which
substitute reserves shall be subject to all of the same terms and conditions
applicable under the Senior Mezzanine Loan Documents with respect to the Senior
Mezzanine Loan Collateral Account(s) being replaced, it being the intent
of Lender and Borrower that such substitute reserves replicate in purpose and
function the Senior Mezzanine Loan Collateral Account(s) no longer held by
the Senior Mezzanine Lender; and (ii) Borrower shall remit, or cause
Senior Mezzanine Borrower to remit, to such approved banking institution for
the benefit of Lender any funds from the Senior Mezzanine Loan Collateral
Accounts that were remaining in such reserves at the time of the termination of
such reserves for the purpose of funding the equivalent substitute
reserves.  Borrower hereby pledges,
assigns and grants a security interest to Lender, as security for payment of
all sums due under the Loan and the performance of all other terms, conditions
and provisions of the Loan Documents and this Agreement on Borrower’s part to
be paid and performed, of all Borrower’s right, title and interest in and to
such substitute reserves and the accounts in which the same may be held and
agrees that Borrower shall not, without obtaining the prior written consent of
Lender (which consent shall be given or withheld in Lender’s sole 

 

48

 

discretion), further pledge, assign or grant any security interest in any
such replacement reserves or account in which the same may be held, or permit
any lien or encumbrance to attach thereto, or any levy to be made thereon, or
any Uniform Commercial Code financing statements, except those naming Lender as
the secured party, to be filed with respect thereto.  This Agreement is, among other things,
intended by the parties to be a security agreement for purposes of the Uniform
Commercial Code in effect in New York and each other jurisdiction in which any
accounts may be located.

 

(c)           Simultaneously with the repayment of the Senior Mezzanine Loan in full,
unless the Loan is also being repaid in full, Borrower and Lender shall have
established, in a manner reasonably satisfactory to Lender, new collateral
accounts (corresponding to each Senior Mezzanine Loan Collateral Account)
pledged to and under the control of Lender in which shall be reserved the same
amounts that would have been reserved in the corresponding Senior Mezzanine
Loan Collateral Accounts if the Senior Mezzanine Loan Documents were still in
effect and no prepayments had been made thereunder.  In full or partial satisfaction of the
foregoing obligations (as the case may be), Borrower may (i) cause to be
delivered to Lender any Letter of Credit which would have been required to be
delivered to Senior Mezzanine Lender had the Senior Mezzanine Loan not been
fully repaid and (ii) cause Senior Mezzanine Borrower to cause Senior
Mezzanine Lender to assign to Lender, at Borrower’s sole cost, any Letter of
Credit in Senior Mezzanine Lender’s possession as of the date of the repayment
of the Senior Mezzanine Loan.

 

(d)          Borrower shall, and shall cause Sponsor and Senior Mezzanine Borrower to,
execute any and all documents reasonably necessary for the implementation or
furtherance of the actions contemplated in this Section 3.3.

 

3.4          Account
Collateral.

 

(a)           Borrower
hereby grants a perfected first-priority security interest in favor of Lender
in and to the Account Collateral as security for the Indebtedness, together
with all rights of a secured party with respect thereto.  Each Collateral Account shall be an Eligible
Account under the sole dominion and control of Lender and shall be in the name
of Borrower, as pledgor, and Lender, as pledgee.  Borrower shall have no right to make
withdrawals from any of the Collateral Accounts.  Funds in the Collateral Accounts shall not be
commingled with any other monies at any time. 
Borrower shall execute any additional documents that Lender in its
reasonable discretion may require and shall provide all other evidence
reasonably requested by Lender to evidence or perfect its first-priority
security interest in the Account Collateral. 
Funds in the Collateral Account shall be invested in Permitted Investments
selected by Lender.  Unless otherwise
required by applicable law, provided no Event of Default is continuing, all
income and gains from the investment of funds in the Collateral Accounts shall
be for the account of Borrower and shall be paid to Borrower upon written
request therefor (but in any event, not more often than monthly). After the
Loan and all other Indebtedness have been paid in full, the Collateral Accounts
shall be closed and the balances therein, if any, shall be paid to Borrower.

 

(b)          The
insufficiency of amounts contained in the Collateral Accounts shall not relieve
Borrower from its obligation to fulfill all covenants contained in the Loan
Documents.

 

49

 

(c)           During the
continuance of an Event of Default, Lender may, in its sole discretion, apply
funds in the Collateral Accounts, and funds resulting from the liquidation of
Permitted Investments contained in the Collateral Accounts, either toward the
components of the Indebtedness (e.g., interest, principal and other
amounts payable hereunder), the Loan and the Note Components in such sequence
as Lender shall elect in its sole discretion, and/or toward the payment of
Property expenses.

 

3.5.         Bankruptcy.  Borrower and Lender acknowledge and agree
that upon the filing of a bankruptcy petition by or against Borrower under the
Bankruptcy Code, the Account Collateral and the Revenues (whether then already
in the Collateral Accounts, or then due or becoming due thereafter) shall be
deemed not to be property of Borrower’s bankruptcy estate within the meaning of
Section 541 of the Bankruptcy Code. 
If, however, a court of competent jurisdiction determines that,
notwithstanding the foregoing characterization of the Account Collateral and
the Revenues by Borrower and Lender, the Account Collateral and/or the Revenues
do constitute property of Borrower’s bankruptcy estate, then Borrower and
Lender further acknowledge and agree that all such Revenues, whether due and
payable before or after the filing of the petition, are and shall be cash collateral
of Lender.  Borrower acknowledges that
Lender does not consent to Borrower’s use of such cash collateral and that, in
the event Lender elects (in its sole discretion) to give such consent, such
consent shall only be effective if given in writing signed by Lender.  Except as provided in the immediately
preceding sentence, Borrower shall not have the right to use or apply or
require the use or application of such cash collateral (i) unless Borrower
shall have received a court order authorizing the use of the same, and (ii) Borrower
shall have provided such adequate protection to Lender as shall be required by
the bankruptcy court in accordance with the Bankruptcy Code.

 

ARTICLE IV

 

REPRESENTATIONS

 

Borrower represents to Lender that, as of the Closing
Date (solely with respect to the formation, existence, organization and good
standing of the Borrower, and its ownership of the Collateral) and as of the
Original Closing Date (with respect to all other matters contained in the
following representations), except as set forth in the Exception Report:

 

4.1.         Organization.

 

(a)           Borrower
and each Senior Mezzanine Borrower is duly formed, validly existing and in good
standing under the laws of the state of its formation, and is in good standing
in each other jurisdiction where ownership of its properties or the conduct of
its business requires it to be so, and Borrower and each Senior Mezzanine
Borrower has all power and authority under such laws and its organizational
documents and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.

 

(b)          Each
Property Owner is duly formed, validly existing and in good standing under the
laws of the state of its formation, and is in good standing in each other
jurisdiction where ownership of its properties or the conduct of its business
requires it to be so, and each Property Owner has all power and authority under
such laws and its organizational 

 

50

 

documents and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.

 

(c)           No Senior
Mezzanine Borrower has any subsidiaries and no Senior Mezzanine Borrower owns
any equity interest in any other Person except as shown on the organizational
chart contained in Exhibit A, which organizational chart is true
and correct as of the date hereof.

 

(d)          Borrower
has no subsidiaries and Borrower owns no equity interest in any other Person
except as shown on the organizational chart contained in Exhibit A,
which organizational chart is true and correct as of the date hereof.

 

4.2.         Authorization.  Borrower has the power and authority to enter
into this Agreement and the other Loan Documents, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated by the
Loan Documents and has by proper action duly authorized the execution and
delivery of the Loan Documents.  Each
Senior Mezzanine Borrower has the power and authority to enter into the Senior
Mezzanine Loan Agreement and the other Senior Mezzanine Loan Documents, to
perform its obligations thereunder and to consummate the transactions
contemplated by the Senior Mezzanine Loan Documents and has by proper action
duly authorized the execution and delivery of the Senior Mezzanine Loan
Documents.

 

4.3.         No
Conflicts.  Neither the execution and
delivery of the Loan Documents or the Senior Mezzanine Loan Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof will (i) violate or
conflict with any provision of its formation and governance documents, (ii) violate
any law, regulation (including Regulation U, Regulation X or Regulation T), order,
writ, judgment, injunction, decree or permit applicable to Borrower or Senior
Mezzanine Borrower, (iii) violate or conflict with contractual provisions
of, or cause an event of default under, any indenture, loan agreement, mortgage
or contract to which Borrower, any Senior Mezzanine Borrower, any Property
Owner or Sponsor is a party or by which Borrower, any Senior Mezzanine
Borrower, any Property Owner or Sponsor may be bound which violation, conflict
or event of default is reasonably likely to result in a Portfolio Material
Adverse Effect, or (iv) result in or require the creation of any Lien or
other charge or encumbrance upon or with respect to the Collateral or the
Senior Mezzanine Loan Collateral in favor of any party other than Lender, in
the case of the Collateral, and the Senior Mezzanine Lender, in the case of the
Senior Mezzanine Loan Collateral.

 

4.4.         Consents.  No consent, approval, authorization or order
of, or qualification with, any court or Governmental Authority is required in
connection with the execution, delivery or performance by Borrower of this
Agreement or the other Loan Documents, Senior Mezzanine Borrower of the Senior
Mezzanine Loan Documents, or by any Required Equity Pledgor of the Senior
Mezzanine Loan Documents to which it is a party, the failure to obtain which is
reasonably likely to result in a Portfolio Material Adverse Effect, except for
any of the foregoing which have already been obtained.

 

51

 

4.5.         Enforceable
Obligations.  This Agreement, the
other Loan Documents and the Senior Mezzanine Loan Documents have been duly
executed and delivered by Borrower and Senior Mezzanine Borrower, as the case
may be, and constitute Borrower’s and each Senior Mezzanine Borrower’s legal,
valid and binding obligations, enforceable in accordance with their respective
terms, subject to bankruptcy, insolvency and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles.  The Loan Documents and the
Senior Mezzanine Loan Documents are not subject to any right of rescission,
set-off, counterclaim or defense by Borrower or any Senior Mezzanine Borrower,
as the case may be, including the defense of usury.

 

4.6.         No
Default.  No Default, Event of
Default or Senior Mezzanine Loan Event of Default will exist immediately
following the making of the Loan.

 

4.7.         Payment
of Taxes.  Borrower, each Senior
Mezzanine Borrower and each Property Owner has filed, or caused to be filed,
all tax returns (federal, state, local and foreign) required to be filed and
paid all amounts of taxes due (including interest and penalties) except for
taxes which are not yet delinquent and has paid all or made provision with the
title company for the payment of all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangible taxes) owing by it necessary to preserve the Liens in
favor of Lender and the Lien of the Senior Mezzanine Loan Documents in favor of
Senior Mezzanine Lender (or in the case of an Encumbered Property, to preserve
the Liens under the Encumbered Property Debt Documents).

 

4.8.         Compliance
with Law.  Except as disclosed in the
Zoning Reports, Borrower each Senior Mezzanine Borrower, each Property and the
uses thereof comply with all applicable Insurance Requirements and Legal
Requirements, including building and zoning ordinances and codes, except to the
extent that failure to comply therewith would not result in a Portfolio Material
Adverse Effect.  Except as disclosed in
the Zoning Reports, each Mortgage Loan Collateral Property, and to Borrower’s
knowledge, each Other Property conforms in all material respects to current
zoning requirements (including requirements relating to parking) and is not an
illegal nonconforming use.  Neither
Borrower nor any Senior Mezzanine Borrower is in default or violation of any
order, writ, injunction, decree or demand of any Governmental Authority the
violation of which is reasonably likely to result in a Material Adverse
Effect.  There has not been committed by
or on behalf of Borrower, any Senior Mezzanine Borrower or to Borrower’s
knowledge any other person in occupancy of or involved with the operation or
use of any Mortgage Loan Collateral Property, or to Borrower’s knowledge, any
other person in occupancy of or involved with the operation or use of any Other
Property, any act or omission affording any federal Governmental Authority or
any state or local Governmental Authority the right of forfeiture as against
any Property or any portion thereof or any monies paid in performance of its
obligations under any of the Loan Documents. 
None of Borrower Senior Mezzanine Borrower, Property Owner or Sponsor
has purchased any portion of the Properties or interests therein with proceeds
of any illegal activity.

 

4.9.         ERISA.  None of Borrower, Senior Mezzanine Borrower
or any ERISA Affiliate of Borrower or Senior Mezzanine Borrower has incurred or
could be subjected to any liability under Title IV or Section 302 of ERISA
or Section 412 of the Code or maintains or contributes to, or is required
to maintain or contribute to, any Plan. 
The consummation of the 

 

52

 

transactions contemplated by this Agreement and the
Senior Mezzanine Loan Documents will not constitute or result in any non-exempt
prohibited transaction under Section 406 of ERISA, Section 4975 of
the Code or substantially similar provisions under federal, state or local
laws, rules or regulations; provided that the foregoing representation is
subject to the assets used by the Lender not being or being treated under ERISA
as Plan Assets.

 

4.10.       Investment
Company Act.  None of Borrower or any
Senior Mezzanine Borrower is an “investment company”, or a company “controlled”
by an “investment company”, registered or required to be registered under the
Investment Company Act of 1940, as amended.

 

4.11.       No
Bankruptcy Filing.  None of Borrower
or any Senior Mezzanine Borrower is contemplating either the filing of a
petition by it under any state or federal bankruptcy or insolvency laws or the
liquidation of all or a major portion of its assets or property.  None of Borrower or any Senior Mezzanine
Borrower has any knowledge of any Person contemplating the filing of any such
petition against it.

 

4.12.       Other
Debt.  Neither Borrower nor Senior
Mezzanine Borrower has any outstanding Debt other than Permitted Debt.  None of Borrower or any Senior Mezzanine
Borrower has any obligations under the Encumbered Property Debt Documents
except, in the case of AFRT and the Operating Partnership, certain customary
non-recourse carveouts.  As of June 30,
2008, (x) the aggregate principal amount of outstanding Encumbered
Property Debt equals approximately $1,912,796,638 and (y) the aggregate
principal amount of outstanding Encumbered Property Debt excluding amounts
attributable to Disposition Assets equals approximately $1,841,044,035.  Schedule X hereto is true and correct
in all material respects and accurately reflects the outstanding principal
balances attributable to the Encumbered Property Debt as of June 30,
2008.  For the avoidance of doubt, for
purposes of this representation, the stated amounts of Encumbered Property Debt
in (x) and (y) above and as set forth on Schedule X hereto (i) exclude
any portion of actually outstanding Encumbered Property Debt that is secured by
defeasance collateral, (ii) exclude the pro rata portion of the Encumbered
Property Debt secured by the Property located at 801 Market Street,
Philadelphia, Pennsylvania, that is attributable to the 11% equitable ownership
interest held by Borrower’s joint venture partner at such Property, (iii) allocate
the amortized aggregate principal amounts of Encumbered Property Debt on a pro
rata basis among the Properties based on the original allocated loan amounts
for the Properties under their respective Encumbered Property Debt Documents,
and (iv) may be less than the respective amounts Borrower or Senior
Mezzanine Borrower would be required to pay to release the Properties from the
Encumbered Property Debt on an individual Property basis.

 

4.13.       Litigation.  There are no actions, suits, proceedings,
arbitrations or governmental investigations by or before any Governmental
Authority or other court or agency now pending, and there are no such actions,
suits, proceedings, arbitrations or governmental investigations threatened,
against or affecting Borrower, any Senior Mezzanine Borrower, any Property
Owner or any Property, which individually or collectively would have a
Portfolio Material Adverse Effect if determined against Borrower, any Senior
Mezzanine Borrower, any Property Owner or any Property.

 

53

 

4.14.       Leases;
Material Agreements.

 

(a)           Borrower
has delivered to Lender true and complete copies of all Leases requested by
Lender.  No person has any possessory
interest in any of the Properties or right to occupy the same except under and
pursuant to the provisions of the Leases. 
The certified rent roll delivered to Lender as of the Closing Date (the “Rent
Roll”) is true and correct in all material respects as of February 29,
2008, and as of the Original Closing Date, there were no changes to the Rent Roll
that would have had a Portfolio Material Adverse Effect, no new Major Leases
had been entered into and no Major Lease had been terminated.  As of the Original Closing Date, Borrower
held approximately $2,150,000 in respect of Tenant security deposits and held
no security deposits with respect to Major Leases, no fixed rent had been paid
more than 30 days in advance of its due date and no payments of rent were more
than 30 days delinquent.  Except as set
forth on Schedule S, no Tenant under any of the Leases referenced in Schedule
S had any remaining termination or contraction options as of the Original
Closing Date.  Except as set forth in the
Leases, no Tenant has any extension or renewal options.  Except as set forth in the Qualified Title
Policies, with respect to the Mortgage Loan Collateral Properties, or the
Leases, with respect to the Other Properties, no Tenant or other party has any
option, right of first refusal or similar preferential right to purchase or
lease all or any portion of any Property.

 

(b)          Except
as set forth on the Exception Report, to Borrower’s knowledge (x) all
material work to be performed by the landlord under Major Leases has been
substantially performed, all material contributions to be made by the landlord
to the Tenants thereunder have been made and all other material conditions to
each Tenant’s obligations thereunder have been satisfied, in each case, in all
material respects, and (y) no Tenant under a Major Lease has the right to
require Borrower or any Senior Mezzanine Borrower to perform or finance any
material Tenant Improvements or Material Alterations and no material Leasing
Commissions are owed or would be owed upon the exercise of any such Tenant’s
existing renewal or expansion options. 
Without limiting the foregoing, Wachovia is required to pay for 100% of
the cost of the “Demising Work” referenced in the Wachovia estoppel letter
delivered to Senior Mezzanine Lender as of the Original Closing Date.

 

(c)           To
Borrower’s knowledge, there are no Material Agreements except as described in Schedule
D and no Encumbered Property Debt Documents except as described in
Schedule U.  To Borrower’s knowledge,
Borrower has made available to Lender true and complete copies of all Material
Agreements and all Encumbered Property Debt Documents.  To Borrower’s knowledge, each Material
Agreement has been entered into at arm’s length in the ordinary course of
business by or on behalf of Borrower.

 

(d)          The
Leases and the Material Agreements are in full force and effect and, except as
set forth on the Rent Roll, there are no defaults thereunder by any Borrower or
any other party thereto which is reasonably likely to result in a Portfolio
Material Adverse Effect.  None of
Borrower or any Senior Mezzanine Borrower is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any Permitted Encumbrance or any other agreement or instrument to
which it is a party or by which it or any of the Properties are bound which
default is reasonably likely to result in a Portfolio Material Adverse Effect.

 

4.15.       Full
and Accurate Disclosure.  To Borrower’s
knowledge, no statement of fact heretofore delivered by Borrower, Sponsor or
Senior Mezzanine Borrower to Lender or 

 

54

 

Senior Mezzanine Lender in writing in respect of the
Properties, Borrower or any Senior Mezzanine Borrower contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained therein not misleading unless subsequently
corrected.  There is no fact presently
actually known to Borrower which has not been disclosed to Lender which is
reasonably likely to result in a Portfolio Material Adverse Effect.

 

4.16.       Financial
Condition.  To Borrower’s knowledge,
except as otherwise disclosed in writing to Lender, all financial data
concerning Borrower, Senior Mezzanine Borrower and the Properties heretofore
provided to Lender fairly presents in accordance with GAAP the financial
position of Borrower and/or Senior Mezzanine Borrower in all material respects,
as of the date on which it was made, and does not omit to state any material
fact necessary to make statements contained herein or therein not misleading.  Since the delivery of such data, except as
otherwise disclosed in writing to Lender there have occurred no changes or
circumstances which have had or are reasonably likely to result in a Portfolio
Material Adverse Effect.

 

4.17.       Single-Purpose Requirements.  Borrower, each Senior Mezzanine Borrower,
each Property Owner and their respective Single-Purpose Equityholders, except
as disclosed on Exhibit A, is now a Single-Purpose Entity, and has
always been a Single-Purpose Entity to the extent relevant to the
Nonconsolidation Opinion.  All statements
of fact contained in the Nonconsolidation Opinion and in the certificates
referenced therein and attached thereto are true and correct in all material
respects.

 

4.18.       [Intentionally
Omitted].

 

4.19.       Not
Foreign Person.  None of Borrower or any
Senior Mezzanine Borrower is a “foreign person” within the meaning of Section 1445(f)(3) of
the Code.

 

4.20.       Labor
Matters.  Except as listed on the
Exception Report, None of Borrower or any Senior Mezzanine Borrower is a party
to any collective bargaining agreements.

 

4.21.       Title.  Borrower has good title to the Collateral
free and clear of all Liens except the Junior Mezzanine Loan Permitted
Encumbrances.  Mortgage Loan Property
Owners own good, marketable and insurable title to the Mortgage Loan Collateral
Properties and good and marketable title to the related personal property, to
the Senior Mezzanine Collateral Accounts and to any other Senior Mezzanine
Collateral, in each case free and clear of all Liens whatsoever except the
Permitted Encumbrances.  Owners of Other
Properties own good, marketable and insurable title to the Other Properties and
good and marketable title to the related personal property free and clear of
all Liens whatsoever except the Encumbered Property Debt and the encumbrances permitted
under, or created by, the Encumbered Property Loan Documents.  Each Required Equity Pledgor has good title
to its Required Equity, in each case free and clear of all Liens except the
Permitted Encumbrances.  The Mortgages,
when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (i) valid, perfected first priority Liens on the
Mortgage Loan Collateral Properties and the rents therefrom, enforceable as
such against creditors of and purchasers from Borrower and subject only to
Permitted Encumbrances, and (ii) perfected Liens (pursuant to the Uniform
Commercial Code of the State 

 

55

 

of Delaware) in and to all personalty, all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances.  The Senior
Mezzanine Loan Documents creating a security interest in the Required Equity
and the Loan Documents creating a security interest in the Collateral, in each
case, upon the filing of a UCC financing statement in the appropriate
jurisdiction and/or delivery of the certificates evidencing the securities
included in the Collateral or the Senior Mezzanine Loan Collateral, as the case
may be, create and constitute a valid and perfected first priority Lien on the
Collateral or Required Equity, as the case may be, free and clear of all Liens
other than the Permitted Encumbrances. The Permitted Encumbrances do not and
will not materially and adversely affect or interfere with (i) the value,
or current use or operation, of the Mortgage Loan Collateral Properties, (ii) the
security intended to be provided by the Mortgages, (iii) the security
intended to be provided by the Senior Mezzanine Loan Documents creating a
security interest in the Required Equity or the Loan Documents creating a
security interest in the Collateral or (iv) Borrower’s ability to repay
the Indebtedness in accordance with the terms of the Loan Documents.  Except as insured over by a Qualified Title
Insurance Policy, there are no claims for payment for work, labor or materials
affecting the Mortgage Loan Collateral Properties which are or may become a
Lien prior to, or of equal priority with, the Liens created by the Loan
Documents or the Senior Mezzanine Loan Documents.  No creditor of Borrower or any Senior
Mezzanine Borrower other than Lender or Senior Mezzanine Lender, as the case
may be, has in its possession any goods that constitute or evidence the
Collateral or the Senior Mezzanine Loan Collateral.

 

4.22.       No
Encroachments.  Except as shown on
the applicable Qualified Survey, all of the improvements on each Mortgage Loan
Collateral Property lie wholly within the boundaries and building restriction
lines of the such Mortgage Loan Collateral Property, and no improvements on
adjoining property encroach upon any Mortgage Loan Collateral Property, and no
easements or other encumbrances upon any Mortgage Loan Collateral Property
encroach upon any of the improvements, so as, in either case, to adversely
affect the value or marketability of the applicable Mortgage Loan Collateral
Property, except those which are insured against by a Qualified Title Insurance
Policy.  All of the improvements on each
of the Other Properties lie wholly within the boundaries and building
restriction lines of the such Other Properties, except to the extent that
failure of any improvements to lie wholly within such boundaries and building
restriction lines does not cause a Portfolio Material Adverse Effect; and no
improvements on adjoining property encroach upon any of the Other Properties,
and no easements or other encumbrances upon any of the Other Properties
encroach upon any of the improvements, so as, in either case, to cause a
Portfolio Material Adverse Effect.

 

4.23.       Physical
Condition.

 

(a)           Based
solely on the Engineering Reports, each Mortgage Loan Collateral Property
(including sidewalks, storm drainage system, roof, plumbing system, HVAC
system, fire protection system, electrical system, equipment, elevators,
exterior sidings and doors, irrigation system and all structural components) is
in good condition, order and repair in all respects material to its use,
operation or value.  Each Other Property
(including sidewalks, storm drainage system, roof, plumbing system, HVAC
system, fire protection system, electrical system, equipment, elevators,
exterior sidings and doors, irrigation system and all structural components) is
in good condition, order and repair in all respects material to its use,
operation or 

 

56

 

value, except to the extent that the failure of such
Other Property to be in good condition, order and repair does not result in a
Portfolio Material Adverse Effect.

 

(b)          Based
solely on the Engineering Reports, Borrower is not aware of any material
structural or other material defect or damages in any of the Mortgage Loan
Collateral Properties, whether latent or otherwise.  Borrower is not aware of any material
structural or other material defect or damages in any of the Other Properties,
whether latent or otherwise, that would have a Portfolio Material Adverse
Effect.

 

(c)           Borrower
has received or is aware of any other party’s receipt of written notice from
any insurance company or bonding company of any defects or inadequacies in any
of the Properties which would, alone or in the aggregate, adversely affect in
any material respect 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.

 

4.24.       Fraudulent
Conveyance.  None of Borrower or any
Senior Mezzanine Borrower has entered into the Transaction, any of the Loan
Documents or any of the Senior Mezzanine Loan Documents, as the case may be,
with the actual intent to hinder, delay or defraud any creditor.  Borrower has received reasonably equivalent
value in exchange for its obligations under the Loan Documents and Senior
Mezzanine Borrower has received reasonably equivalent value in exchange for its
obligations under the Senior Mezzanine Loan Documents. On the Original Closing
Date and immediately following the making of the Senior Mezzanine Loan, and the
use and disbursement of the proceeds thereof, the fair salable value of each
Senior Mezzanine Borrower’s aggregate assets were greater than its probable
aggregate liabilities (including subordinated, unliquidated, disputed and
Contingent Obligations).  Each Senior
Mezzanine Borrower’s aggregate assets, immediately following the making of the
Senior Mezzanine Loan and the use and disbursement of the proceeds thereof, did
not constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. 
None of Borrower or any Senior Mezzanine Borrower intends to, and does
not believe that it will, incur debts and liabilities (including Contingent
Obligations and other commitments) beyond its ability to pay such debts as they
mature (taking into account the timing and amounts to be payable on or in
respect of obligations of Borrower or such Senior Mezzanine Borrower).  As of the Original Closing Date (i) the
fair salable value of Borrower’s aggregate assets are greater than its probable
aggregate liabilities (including subordinated, unliquidated, disputed and
Contingent Obligations) and (ii) Borrower’s aggregate assets do not
constitute unreasonably small capital to carry out its business as conducted or
as proposed to be conducted.

 

4.25.       Management.  Except for any Approved Management Agreement,
no property management agreements are in effect with respect to the Properties,
other than sub-management agreements entered into in accordance with the terms
of the Approved Management Agreements.

 

4.26.       Condemnation.  Except as listed on the Exception Report, no
Condemnation has been commenced or is contemplated with respect to all or any
material portion of any of the Mortgage Loan Collateral Properties or for the
relocation of roadways providing access to any of the Mortgage Loan Collateral
Properties or, to Borrower’s knowledge, 

 

57

 

is contemplated with respect to all or any material
portion of any of the Other Properties or for the relocation of roadways
providing access to any of the Other Properties.

 

4.27.       Utilities
and Public Access.  Each Property has
adequate rights of access to dedicated public ways (and makes no material use
of any means of access or egress that is not pursuant to such dedicated public
ways or recorded, irrevocable rights-of-way or easements) and is adequately
served by all public utilities necessary to the continued use and enjoyment of
such Property as presently used and enjoyed.

 

4.28.       Environmental Matters.  Except as disclosed in the Environmental
Reports and except as disclosed on the Exception Report:

 

(i)            To
Borrower’s knowledge, each Property is in compliance in all material respects
with all Environmental Laws applicable to such Property (which compliance
includes, but is not limited to, the possession of, and compliance with, all
environmental, health and safety permits, approvals, licenses, registrations
and other governmental authorizations required in connection with the ownership
and operation of such Property under all Environmental Laws).

 

(ii)           No
Environmental Claim is pending with respect to any of the Properties, nor, to
Borrower’s knowledge, is any threatened, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to Borrower, any Senior Mezzanine Borrower or any of the
Properties.

 

(iii)          Without
limiting the generality of the foregoing, to Borrower’s knowledge, there is not
present at, on, in or under any Property, any Hazardous Substances,
PCB-containing equipment, asbestos or asbestos containing materials,
underground storage tanks or surface impoundments for any Hazardous Substance,
lead in drinking water (except in concentrations that comply with all
Environmental Laws), or lead-based paint, in each case in violation of
Environmental Law.

 

(iv)         To
Borrower’s knowledge, there have not been and are no past, present or
threatened Releases of any Hazardous Substance from or at any of the Properties
that are reasonably likely to form the basis of any Environmental Claim, and,
to Borrower’s knowledge, there is no threat of any Release of any Hazardous
Substance migrating to any of the Properties.

 

(v)          To
Borrower’s knowledge, no Liens are presently recorded with the appropriate land
records under or pursuant to any Environmental Law with respect to any of the
Properties and, to Borrower’s knowledge, no Governmental Authority has been
taking any action to subject any of the Properties to Liens under any
Environmental Law.

 

(vi)         To
Borrower’s knowledge, there have been no material environmental investigations,
studies, audits, reviews or other analyses conducted by or that are in the
possession of Borrower in relation to any of the Properties which have not been
made available to Lender.

 

58

 

4.29.       Assessments.  There are no pending or, to Borrower’s
knowledge, proposed special or other assessments for public improvements or
otherwise affecting any of the Properties, nor are there any contemplated
improvements to any of the Properties that may result in such special or other
assessments.  No extension of time for
assessment or payment by Borrower of any federal, state or local tax is in
effect.

 

4.30.       No
Joint Assessment.  None of Borrower
or any Senior Mezzanine Borrower has suffered, permitted or initiated the joint
assessment of any of the Properties (i) with any other real property
constituting a separate tax lot, or (ii) with any personal property, or
any other procedure whereby the Lien of any Taxes which may be levied against
such other real property or personal property shall be assessed or levied or
charged to any of the Properties as a single Lien.

 

4.31.       Separate
Lots.  No portion of any of the Properties
is part of a tax lot that also includes any real property that is not
Collateral.

 

4.32.       Permits;
Certificate of Occupancy.  Senior
Mezzanine Borrower has obtained all material Permits necessary for the present
and contemplated use and operation of each Property and that Senior Mezzanine
Borrower is obligated to obtain under Legal Requirements.  The permitted uses set forth in the Leases
are in conformity in all material respects with the certificate of occupancy
and/or material Permits for such Property and any other restrictions, covenants
or conditions affecting such Property and, to Borrower’s knowledge, the actual
uses being made of each Property are in conformity in all material respects
with the certificate of occupancy and/or Permits for such Property and any
other restrictions, covenants or conditions affecting such Property, in each
case where non-conformity would not have a Material Adverse Effect.

 

4.33.       Flood
Zone.  None of the Improvements on
any of the Properties is located in an area identified by the Federal Emergency
Management Agency or the Federal Insurance Administration as a “100 year flood
plain” or as having special flood hazards (including Zones A, B, C, V and X and
Shaded X areas), or, to the extent that any portion of any of the Properties is
located in such an area, such Property is covered by flood insurance meeting
the requirements set forth in Section 5.15(a)(ii).

 

4.34.       Security
Deposits.  Borrower and each Senior
Mezzanine Borrower is in compliance in all material respects with all Legal
Requirements relating to security deposits.

 

4.35.       Acquisition
Documents.  Borrower has made
available to Lender true and complete copies of all material agreements and
instruments under which Senior Mezzanine Borrower or any of its Affiliates or
the seller of any of the Properties have remaining material rights or material
obligations in respect of Borrower’s acquisition of the Properties.

 

4.36.       Insurance.  Except with respect to the Properties subject
to a Net Lease, Senior Mezzanine Borrower has obtained insurance policies
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement.  All premiums on such
insurance policies required to be paid as of the Closing Date have been paid
for the current policy period.  

 

59

 

Borrower has not done,
and to Borrower’s knowledge, no other Person has done, by act or omission,
anything which would impair the coverage of any such policy.

 

4.37.       Ground
Leased Parcels.  With respect to each
Ground Leased Parcel, each of the following is true with respect to the related
Ground Lease (taking into account the terms of any applicable estoppel letter):

 

(i)            true and complete
copies of the Ground Leases have been delivered to Lender, and except as set
forth in the Exception Report the Ground Leases or memoranda thereof have been
duly recorded;

 

(ii)           to Borrower’s
knowledge, the Ground Leases are in full force and effect and no material
default beyond applicable grace, cure or notice periods has occurred thereunder
nor, to Borrower’s knowledge, is there any existing condition which, but for
the passage of time or the giving of notice or both, would result in a material
default under the terms of any of the Ground Leases;

 

(iii)          except as set forth
in the Exception Report, the Ground Leases have original terms which extend not
less than 30 years beyond the Maturity Date (assuming the exercise of all
extension options hereunder), taking into account any extension options that
are freely exercisable by the lessee under the Ground Lease, and all such
extension options have either been previously exercised or are first
exercisable not less than five years after the Maturity Date;

 

(iv)         except as set forth
in the Exception Report, the Ground Leases do not restrict the use of any
portion of the Properties by the lessee, its successors or its assigns in a
manner that would cause a Material Adverse Effect;

 

(v)          except as set forth
in the Exception Report, the Ground Leases permit the interest of the lessee
thereunder to be encumbered by leasehold mortgages and contains no restrictions
on the identity of a leasehold mortgagee;

 

(vi)         except as set forth
in the Exception Report, the Ground Leases may not be amended, modified,
cancelled or terminated without the prior written consent of a leasehold
mortgagee;

 

(vii)        with respect to the
Mortgage Loan Collateral Properties, to Borrower’s knowledge, other than
Permitted Encumbrances, the Ground Leases are not subject to any Liens or
encumbrances superior to, or of equal priority with, the Mortgage (other than
the ground lessor’s fee interest);

 

(viii)       with respect to the
Mortgage Loan Collateral Properties, to Borrower’s knowledge, other than
Permitted Encumbrances, there are no Liens encumbering the ground lessor’s fee
interests, and, except as permitted herein, Borrower shall not permit or cause
any Lien to become superior to the Ground Lease upon the related fee interest
that may hereafter be granted;

 

60

 

(ix)          except as set forth
in the Exception Report, the Ground Leases are assignable by a holder of a
leasehold mortgage upon a foreclosure of such mortgage without the consent of
the lessor thereunder;

 

 (x)          except as set forth in the Exception Report, the Ground
Leases require the lessor thereunder to give notice of any default by the
lessee to a holder of a leasehold mortgage; and the Ground Leases further
provide that no notice given thereunder is effective against such holder,
unless a copy has been given to such holder in the manner described in such
Ground Lease;

 

(xi)          except as set forth
in the Exception Report, a holder of a leasehold mortgage is permitted at least
30 days in addition to Borrower’s applicable cure period to cure any default
under each of the Ground Leases which is curable after the receipt of notice of
any such default before the lessor thereunder may terminate such Ground Lease
(and, where necessary, is permitted the opportunity to gain possession of the
interest of the lessee under such Ground Lease through legal proceedings or to
take other action so long as such holder is proceeding diligently);

 

(xii)         except as set forth
in the Exception Report, in the case of any default which is not curable by a
holder of a leasehold mortgage, or in the event of the bankruptcy or insolvency
of the lessee under one of the Ground Leases, such holder has the right,
following termination of such existing Ground Lease or rejection thereof by a
bankruptcy trustee or similar party, to enter into a new ground lease with the
lessor on the same terms as such existing Ground Lease, and all rights of the
lessee under such Ground Lease may be exercised by or on behalf of such holder;
and

 

(xiii)        except as set forth
in the Exception Report, the Ground Leases do not impose any restrictions on
subletting.

 

4.38.       Intentionally
Omitted.

 

4.39.       Estoppel
Certificates.  Borrower has delivered
to Lender true and complete copies of (a) the form(s) of estoppel
certificate heretofore sent by Senior Mezzanine Borrower or an Affiliate to
Tenants and lessors under Ground Leases, and (b) each estoppel certificate
received back from any such Tenant or lessor prior to the Closing Date.

 

4.40        Embargoed
Person.  (a) None of the funds or other assets of
any of Borrower, any Senior Mezzanine Borrower, any Single-Purpose Equityholder
or Sponsor constitute property of, or, to Borrower’s knowledge, are
beneficially owned, directly or indirectly, by any person, entity or government
subject to trade restrictions under federal law, including, without limitation,
the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et
seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and
any executive orders or regulations promulgated thereunder, with the result
that (i) the investment in Borrower, any Senior Mezzanine Borrower, any
Single-Purpose Equityholder or Sponsor, as applicable (whether directly or
indirectly), is prohibited by law or (ii) the Loan is in violation of law
(any such person, entity or government, an “Embargoed Person”); (b) to
Borrower’s knowledge, no Embargoed Person has any interest of any nature
whatsoever in Borrower, any Senior Mezzanine 

 

61

 

Borrower, any
Single-Purpose Equityholder or Sponsor, as applicable (whether directly or
indirectly), with the result that (i) the investment in Borrower, any
Senior Mezzanine Borrower, any Single-Purpose Equityholder or Sponsor, as
applicable (whether directly or indirectly) is prohibited by law or (ii) the
Loan is in violation of law and (c) to Borrower’s knowledge, none of the
funds of Borrower, any Senior Mezzanine Borrower, any Single-Purpose
Equityholder or Sponsor, as applicable, have been derived from any unlawful
activity with the result that (i) the investment in Borrower, any Senior
Mezzanine Borrower, any Single-Purpose Equityholder or Sponsor, as applicable
(whether directly or indirectly) is prohibited by law or (ii) the Loan is
in violation of law.  Notwithstanding Section 4.42
to the contrary, the representations and warranties contained in this Section 4.40
shall survive in perpetuity.

 

4.41        Compliance
with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws.  Borrower and each Senior Mezzanine Borrower,
and to Borrower’s knowledge, (a) each Person owning an interest in
Borrower, any Senior Mezzanine Borrower, any Single-Purpose Equityholder or
Sponsor, (b) each Single-Purpose Equityholder, if any, (c) Sponsor,
and (d) each property manager (including each Approved Property Manager): (i) is
not currently identified on the OFAC List and (ii) is not a Person with
whom a citizen of the United States is prohibited to engage in transactions by
any trade embargo, economic sanction, or other prohibition of any Legal
Requirement.  Borrower has implemented
procedures, and will consistently apply those procedures throughout the term of
the Loan, to ensure the foregoing representations and warranties remain true
and correct during the term of the Loan.

 

4.42.       Tax
Basis.  After giving effect to the
Transaction and certain other actions related thereto that will be completed on
or prior to the Closing Date, the U.S. Federal Income tax basis of the
Stepped-Up Properties (as defined below) will be increased in an aggregate
amount equal to the portion of the acquisition cost under the Merger Agreement
allocable to such Stepped-Up Properties on a pro rata basis, which
allocation shall be based on the ratio of the fair market value of such
Stepped-Up Properties to the fair market value of the total acquisition cost.  For purposes of this Section 4.42,
the term “Stepped-Up Properties” means properties other than those held
through partnerships or other similar joint ventures with third parties not
related to AFRT.

 

4.43.       Survival.  Borrower agrees that all of the representations
of Borrower set forth in this Agreement and in the other Loan Documents shall
survive for so long as any portion of the Indebtedness is outstanding.  All representations, covenants and agreements
made by Borrower in this Agreement or in the other Loan Documents shall be
deemed to have been relied upon by Lender notwithstanding any investigation
heretofore or hereafter made by Lender or on its behalf.  On the date of any Securitization, on not
less than 10 Business Days’ prior written notice, Borrower shall deliver to
Lender a certification (x) confirming that all of the representations
contained in this Agreement are true and correct in all material respects as of
the date of such Securitization, or (y) otherwise specifying any changes
in or qualifications to such representations as of such date as may be
necessary to make such representations consistent in all material respects with
the facts as they exist on such date. 
Except as expressly required by this Agreement and the other Loan
Documents, Borrower shall have no further obligation to update any
representation or warranty nor shall any representation or warranty be deemed
to have been made on any date other than the Closing Date or as of the date of
any Securitization.

 

62

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

5.1.         Existence.  Borrower, each Senior Mezzanine Borrower,
each Property Owner and, if applicable, each Single-Purpose Equityholder shall
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its existence and all rights, licenses, Permits, franchises
and other agreements necessary for the continued use and operation of its
business.  Borrower, each Senior
Mezzanine Borrower and, if applicable, each Single-Purpose Equityholder shall
deliver to Lender a copy of each amendment or other modification to any of its
organizational documents promptly after the execution thereof.

 

5.2.         Maintenance
of Properties.

 

(a)           Borrower
or its designee will keep or cause each Property to be kept in good working
order and repair, reasonable wear and tear excepted.  Subject to Section 6.13, the
rights and obligations of Tenants under Leases and with respect to any
Encumbered Property, the provisions of any Encumbered Property Debt Documents,
Borrower shall from time to time make, or cause to be made, all reasonably
necessary and desirable repairs, renewals, replacements, betterments and
improvements thereto.

 

(b)          Subject
to the terms of any applicable Leases, if and to the extent reasonably required
by Lender, Borrower shall cause Senior Mezzanine Borrower to remediate the
Deferred Maintenance Conditions reasonably promptly following the Closing Date,
subject to Force Majeure, and upon request from Lender after the expiration of
such period shall deliver to Lender an Officer’s Certificate confirming that
such remediation has been substantially completed and that all associated
expenses then due and payable have been paid; provided that Borrower shall be
deemed to have satisfied its obligations hereunder with respect to any matter
that is the obligation of a Tenant under a Lease if Borrower shall be using
commercially reasonable efforts to cause Senior Mezzanine Borrower to cause
such Tenant to complete such matter pursuant to the terms of such Lease.

 

5.3.         Compliance
with Legal Requirements.  Borrower
shall, and shall cause Senior Mezzanine Borrower to, comply with, and shall
cause each Property to comply with and be operated, maintained, repaired and
improved in compliance in all material respects with, all Legal Requirements,
Insurance Requirements and all material contractual obligations by which
Borrower or any Senior Mezzanine Borrower is legally bound.

 

5.4.         Impositions
and Other Claims.  Borrower shall,
and shall cause each Senior Mezzanine Borrower to, pay and discharge, or cause
to be paid and discharged, all taxes, assessments and governmental charges
levied upon it, its income and its assets and the Properties prior to
delinquency, as well as all lawful claims for labor, materials and supplies or otherwise,
subject to any rights to contest contained in the definition of Permitted
Encumbrances.  Borrower shall, and shall
cause each Senior Mezzanine Borrower to, file or cause to be filed all federal,
state and local tax returns and other reports that it or its subsidiaries are
required by law to file.  If any law or
regulation applicable to Lender, any Note, any of the Mortgage Loan Collateral
Properties, the Collateral, the Pledge or any of the Mortgages is enacted that
deducts from the

 

63

 

value of property for the
purpose of taxation any Lien thereon, or imposes upon Lender the payment of the
whole or any portion of the taxes or assessments or charges or Liens required
by this Agreement to be paid by Borrower, or changes in any way the laws or
regulations relating to the taxation of mortgages or security agreements or
debts secured by mortgages or security agreements or the interest of the
mortgagee or secured party in the property covered thereby, or the manner of
collection of such taxes, so as to affect any of the Mortgages, the Pledge
Agreement, the Collateral, the Indebtedness or Lender, then Borrower, upon
demand by Lender, shall pay, or cause to be paid, such taxes, assessments,
charges or Liens, or reimburse Lender for any amounts paid by Lender.  If in the opinion of Lender’s counsel it
might be unlawful to require Borrower to make such payment or the making of
such payment might result in the imposition of interest beyond the maximum
amount permitted by applicable Law, Lender may elect to declare all of the
Indebtedness to be due and payable 90 days from the giving of written notice by
Lender to Borrower.

 

5.5.         Access to Properties.  Subject to the rights of Tenants under
Leases, Borrower shall permit or cause Senior Mezzanine Borrower and/or
Property Owners to permit agents, representatives and employees of Lender and
the Servicer to inspect the Properties or any portion thereof, and/or the books
and records of Borrower, at such reasonable times as may be requested by Lender
upon reasonable advance notice.

 

5.6.         Cooperate in Legal Proceedings.  Except with respect to any claim by Borrower
against Lender, Borrower shall, and shall cause Senior Mezzanine Borrower to,
cooperate fully with Lender with respect to any proceedings before any
Governmental Authority which may in any way affect the rights of Lender
hereunder or under any of the Loan Documents and, in connection therewith,
Lender may, at its election, participate or designate a representative to
participate in any such proceedings.

 

5.7.         Leases.

 

(a)           Upon
Lender’s request, Borrower shall, or shall cause Senior Mezzanine Borrower to,
furnish Lender with executed copies of all Leases, together with a detailed
breakdown of income and cost associated therewith to the extent the same has
been prepared by Borrower or Senior Mezzanine Borrower.  All new Leases and renewals or amendments of
Leases must be entered into on an arms-length basis with Tenants whose identity
and creditworthiness, in Borrower’s good faith judgment, is appropriate for
tenancy in property of comparable quality, must provide for rental rates and
other economic terms which, in Borrower’s good faith judgment, taken as a
whole, are at least equivalent to then-existing market rates, based on the
applicable market, and must contain terms and conditions that are commercially
reasonable (in each case, unless Lender consents to such Lease in its sole
discretion).  Subject to the terms of the
Encumbered Property Debt Documents, all new Leases must provide that they are
subject and subordinate to any current or future mortgage financing on the
applicable Property and that the Tenant agrees to attorn to any foreclosing
mortgagee at such mortgagee’s request, provided such mortgagee agrees to not
disturb such Tenant’s tenancy except in accordance with its Lease.

 

(b)          All
new Leases which are Major Leases, and all terminations, renewals and material
amendments of Major Leases,

 

64

 

and any surrender of
rights under any Major Lease, shall be subject to the prior written consent of
Lender, which consent shall not be unreasonably withheld, conditioned or
delayed.  To facilitate Borrower’s
leasing process, Borrower shall have the right to present prospective leasing
transactions to Lender for its approval prior to the negotiation of a final
Lease.  Such presentation shall include a
summary term sheet of all material terms of the proposed Lease or a draft of
the proposed Lease together with any additional information concerning such
proposed Lease and the proposed Tenant thereunder as may be reasonably
requested by Lender (the “Lease
Term Sheet”).  Each
request for approval of a Lease or a Lease Term Sheet shall be submitted to
Lender in an envelope marked “URGENT – LENDER’S ATTENTION REQUIRED WITHIN 7
BUSINESS DAYS”, together with (i) a copy of the proposed Lease or the
Lease Term Sheet, (ii) a summary of the economic terms thereof and any
termination options contained therein together with a detailed breakdown of
income and costs associated with the proposed Lease, and (iii) copies of
all written materials obtained by Borrower or the applicable Senior Mezzanine
Borrower in connection with its evaluation of the creditworthiness of the
proposed Tenant, and shall be deemed approved if Lender shall not have notified
Borrower in writing of its disapproval thereof and the reasons for such
disapproval within three Business Days after Borrower shall have given Lender
written notice confirming that at least seven Business Days have elapsed since
such submission, which written notice shall be submitted to Lender in an
envelope marked “URGENT – SECOND AND FINAL NOTICE – LENDER’S ATTENTION REQUIRED
BY [DATE]”.  If Lender approves or is
deemed to have approved the Lease Term Sheet, Lender’s approval of the final
Lease shall be limited to Lender’s reasonable confirmation that the final Lease
does not (i) deviate in any material adverse respect from the terms set
forth on the Lease Term Sheet or contain any material adverse terms not set
forth in the Lease Term Sheet, or (ii) deviate in any material respect
from the approved Lease form (and otherwise such final Lease shall be subject
to Lender’s reasonable written approval). 
Borrower shall deliver to Lender a copy of any Lease executed pursuant
to a Lease Term Sheet together with an Officer’s Certificate indicating any
material deviations from such Lease Term Sheet.

 

(c)           Borrower
shall, and shall cause Senior Mezzanine Borrower to (i) observe and
perform all the material obligations imposed upon the lessor under the Leases; (ii) enforce,
to the extent commercially reasonable, all of the material terms, covenants and
conditions contained in the Leases on the part of the lessee thereunder to be
observed or performed, short of termination thereof, except that Senior
Mezzanine Borrower may terminate any Lease following a material default
thereunder by the respective Tenant; (iii) not collect any of the rents
thereunder more than one month in advance; (iv) not execute any assignment
of lessor’s interest in the Leases or associated rents other than the
assignments of rents and leases under the Mortgages and the Encumbered Debt
Documents; and (v) not cancel or terminate any guarantee of any of the
Major Leases without the prior written consent of Lender.  Borrower shall cause Senior Mezzanine
Borrower to deliver to each new Tenant at a Mortgage Loan Collateral Property a
Tenant Notice upon execution of such Tenant’s Lease or include same in such Tenant’s
Lease or invoices, and promptly thereafter deliver to Lender a copy thereof and
evidence of such Tenant’s receipt thereof.

 

(d)          To
the extent required by applicable law, security deposits of Tenants under all
Leases, whether held in cash or any other form, shall not be commingled with
any other funds of Borrower or Senior Mezzanine Borrower and, if cash, shall be
deposited by Senior Mezzanine Borrower in an Eligible Account or such other
account at such commercial or savings

 

65

 

bank as may be reasonably
satisfactory to Senior Mezzanine Lender (or Lender, if Senior Mezzanine Loan is
no longer outstanding or Senior Mezzanine Lender is otherwise not requiring
Senior Mezzanine Borrower to be in compliance with Section 5.7(d) of
the Senior Mezzanine Loan Agreement), which account shall be pledged to Senior
Mezzanine Lender (or Lender, if Senior Mezzanine Loan is no longer outstanding
or Senior Mezzanine Lender is otherwise not requiring Senior Mezzanine Borrower
to be in compliance with Section 5.7(d) of the Senior Mezzanine Loan
Agreement).  Borrower shall, upon Lender’s
request, provide Lender with evidence reasonably satisfactory to Lender of
Borrower’s or Senior Mezzanine Borrower’s , as the case may be, compliance with
the foregoing.  During the continuance of
any Event of Default, subject to the Encumbered Property Debt Documents and the
rights of Senior Mezzanine Lender under the Senior Mezzanine Loan Documents,
Borrower shall, upon Lender’s request, deposit with Lender in an Eligible
Account pledged to Lender an amount equal to the aggregate security deposits of
the Tenants (and any interest theretofore earned on such security deposits and
actually received by Borrower) which Borrower, Senior Mezzanine Borrower or
their respective Affiliates had not returned to the applicable Tenants or
applied in accordance with the terms of the applicable Lease.

 

(e)           Whenever
a Lease at a Mortgage Loan Collateral Property is terminated, whether by
buy-out, cancellation, default or otherwise, and Senior Mezzanine Borrower is
entitled to any payment, fee or penalty in respect of such termination,
Borrower shall promptly cause such payment, fee or penalty to be deposited into
an Eligible Account pledged to Mortgage Lender in accordance with the Mortgage
Loan Agreement.  Subject to the terms of
the Encumbered Property Debt Documents, whenever a Lease at an Other Property
is terminated, whether by buy-out, cancellation, default or otherwise, and
Senior Mezzanine Borrower or a Property Owner is entitled to any payment, fee
or penalty in respect of such termination (a “Termination Fee”),
Borrower shall promptly cause such Termination Fee to be deposited into an
Eligible Account pledged to Senior Mezzanine Lender (or Lender, if Senior
Mezzanine Loan is no longer outstanding or Senior Mezzanine Lender is otherwise
not requiring Senior Mezzanine Borrower to be in compliance with Section 5.7(e) of
the Senior Mezzanine Loan Agreement).  At
any time that such Eligible Account is pledged to Lender, provided no Event of
Default has occurred and is continuing, (i) Lender shall disburse such
Termination Fee to Borrower at the written request of Borrower in respect of
Leasing Commissions and Tenant Improvement costs incurred by Borrower or Senior
Mezzanine Borrower in connection with replacement Leases at any Properties
other than Value Add Pool Properties, Disposition Asset Properties or any
Property with an Aggregate Allocated Loan Amount of zero, in each case provided
such Lease is entered into in accordance with the terms of this Agreement.

 

(f)           Within
ten Business Days after receipt of written request therefor, provided Lender
has received a copy of the executed corresponding Lease, Lender shall execute
and deliver to Borrower a subordination, non-disturbance and attornment
agreement (an “SNDA”).  If the form of the SNDA shall be prescribed
by the Lease in question, and Lender shall have approved (or been deemed, in
accordance with Section 5.7(b) hereof,
to have approved) such Lease (and the form of SNDA was attached to the draft
Lease that was delivered to Lender as part of Borrower’s request for approval),
Lender shall execute and deliver the SNDA in the form prescribed by such
approved Lease.  Notwithstanding the
foregoing, in the case of any Lease as to which Lender’s approval is not
required pursuant to this Section 5.7
where such tenant thereunder requests an SNDA, the SNDA to be executed and
delivered by

 

66

 

Lender shall be in
substantially the form attached hereto as Exhibit G, and such form
shall also be attached to Senior Mezzanine Borrower’s standard form of Lease as
approved by Lender.  Lender agrees to
reasonably negotiate the terms of the SNDA with any Tenant under any Lease, but
shall not be required to execute an SNDA that differs in any material respect
from the form attached hereto as Exhibit G.  All reasonable out-of-pocket attorneys’ fees
and disbursements incurred by Lender in connection with such SNDA shall be
payable by Borrower within ten Business Days after Lender’s written request
therefor, whether or not the SNDA is ultimately executed and/or recorded.

 

5.8.         Plan
Assets, etc.  Borrower will do, or cause to be done,
all things necessary to ensure that none of Borrower or any Senior Mezzanine Borrower
will be deemed to hold Plan Assets at any time.

 

5.9.         Further Assurances.  At Borrower’s sole cost and expense, from
time to time as reasonably requested by Lender, Borrower shall, and shall cause
Senior Mezzanine Borrower to, execute, acknowledge, record, register, file
and/or deliver to Lender such other instruments, agreements, certificates and
documents (including Uniform Commercial Code financing statements and amended
or replacement mortgages or pledges) as Lender may reasonably request to evidence,
confirm, perfect and maintain the Liens securing or intended to secure the
obligations of Borrower under the Loan Documents or to facilitate a replacement
of the Cash Management Bank pursuant to Section 3.1(c) or a
bifurcation of the Note pursuant to Sections 1.3(c) and/or 9.7(a),
in each case if requested by Lender, and do and execute all such further lawful
and reasonable acts, conveyances and assurances for the better and more
effective carrying out of the intents and purposes of this Agreement and the
other Loan Documents as Lender shall reasonably request from time to time.  Borrower hereby authorizes and appoints
Lender as its attorney-in-fact to execute, acknowledge, record, register and/or
file such instruments, agreements, certificates and documents, and to do and
execute such acts, conveyances and assurances, should Borrower fail to do so
itself in violation of this Agreement within 5 Business Days following written
request from Lender, in each case without the signature of Borrower.  The foregoing grant of authority is a power
of attorney coupled with an interest and such appointment shall be irrevocable
for the term of this Agreement.  Borrower
hereby ratifies all actions that such attorney shall lawfully take or cause to
be taken in accordance with this Section 5.9.  Lender shall provide Borrower with copies of
any instruments executed by Lender in accordance with this Section 5.9.

 

5.10.       Management
of Properties and Senior Mezzanine Loan Collateral.

 

(a)           Subject
to the terms of the Encumbered Property Debt Documents, each Property, other
than a Property that is entirely subject to a Lease under which the Tenant is responsible
for the management of the Property and liable for all related costs thereunder,
shall be managed at all times by an Approved Property Manager pursuant to an
Approved Management Agreement.  Pursuant
to the Subordination of Property Management Agreement or Agreements, each
Approved Property Manager shall agree that its Approved Management Agreement
and all fees thereunder (including any incentive fees) are subject and
subordinate to the Indebtedness. 
Borrower may from time to time appoint, or cause to be appointed, an
Approved Property Manager to manage the applicable Property pursuant to an
Approved Management Agreement, and such successor manager shall execute for
Lender’s benefit a

 

67

 

Subordination of Property
Management Agreement in form and substance reasonably satisfactory to Lender
(and Lender hereby agrees that a Subordination of Property Management Agreement
in substantially the same form as the Subordination of Property Management
Agreement delivered to Lender by Borrower as of the date hereof is deemed to be
reasonably satisfactory to Lender).  The
per annum fees of the Approved Property Manager (including any incentive fees)
shall not, at any time, exceed 3.5% of the gross revenues of the relevant
Property for the then most recently concluded Test Period.

 

(b)          Borrower
shall cause Senior Mezzanine Borrower to cause each Approved Property Manager
(including any successor Approved Property Manager) to maintain at all times
worker’s compensation insurance as required by Governmental Authorities.

 

(c)           Borrower
shall notify Lender in writing of any material default of any Senior Mezzanine
Borrower or an Approved Property Manager under any of the Approved Management
Agreements, after the expiration of any applicable cure periods, of which
Borrower has actual knowledge.  Subject
to the rights of Senior Mezzanine Lender, Lender shall have the right, after
reasonable notice to Borrower and in accordance with such Subordination of
Management Agreement, to cure defaults of Senior Mezzanine Borrower under such
Approved Management Agreement.  Any
reasonable out-of-pocket expenses incurred by Lender to cure any such default
shall constitute a part of the Indebtedness and shall be due from Borrower upon
demand by Lender.

 

(d)          Subject
in the case of Encumbered Properties to the Encumbered Property Debt Documents,
and in the case of the Joint Venture Properties to their respective Qualified
Joint Venture Agreements, upon the occurrence and during the continuance of an
Event of Default, or a material default by an Approved Property Manager under
an Approved Management Agreement after the expiration of any applicable cure
period, which default is reasonably likely to result in a Material Adverse
Effect, or upon the filing of a bankruptcy petition or the occurrence of a
similar event with respect to an Approved Property Manager, Lender may, in its
sole discretion, require Borrower to terminate, or cause to be terminated, the
Approved Management Agreement and engage, or cause to be engaged, an Approved
Property Manager selected by Lender to serve as replacement Approved Property
Manager pursuant to an Approved Management Agreement.

 

5.11.       Notice
of Material Event.  Borrower shall
give Lender prompt notice (containing reasonable detail) of (i) any
material change in the financial or physical condition of any of the Properties
taken as a whole, as reasonably determined by Borrower, including the
termination or cancellation of any Major Lease, the termination or cancellation
of terrorism or other insurance required by this Agreement, the exercise of
shedding, contraction or termination rights under any Lease which Lease covers
in excess of 125,000 rentable square feet or the accrual of such rights by any
Tenant under any Lease which Lease covers in excess of 125,000 rentable square
feet, (ii) any litigation or governmental proceedings pending or
threatened in writing against Borrower or any Senior Mezzanine Borrower which
is reasonably likely to have a Portfolio Material Adverse Effect, (iii) any
notice by a lender asserting an event of default by an Encumbered Property
Owner or any of its Affiliates under any Encumbered Property Debt Documents, (iv) any
notice by Senior Mezzanine Lender of a Senior Mezzanine Loan Event of

 

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Default and (v) any
correspondence with Tenants under Major Leases with respect to any alleged
defaults by either party thereunder.

 

5.12.       Annual
Financial Statements.  As soon as
available, and in any event within 120 days after the close of each Fiscal
Year, beginning with the 2008 Fiscal Year Borrower shall furnish to Lender, in
an Excel spreadsheet file in electronic format (which may be via an intralinks
site at Borrower’s sole cost and expense), or, in the case of predominantly
text documents, in Adobe .pdf format, a balance sheet of Borrower and (except
to the extent stock in Sponsor is publicly traded on a major stock exchange)
Sponsor as of the end of such year, which statements with respect to Borrower
shall be on a consolidated basis with respect to the Properties as a whole,
together with related consolidated statements of income for such Fiscal Year,
which statements shall include an attached schedule of Net Operating Income,
gross carrying value and accumulated depreciation, each on an individual
property basis, audited by an Approved Accounting Firm whose opinion shall be
to the effect that such financial statements have been prepared in accordance
with GAAP applied on a consistent basis and shall not be qualified as to the
scope of the audit or as to the status of Borrower as a going concern.  Together with Borrower’s annual financial
statements, Borrower shall furnish to Lender in hard copy and electronic
format:

 

(i)           then current rent
roll and occupancy reports of the Properties;

 

(ii)          to the extent not
otherwise described in this Section 5.12, copies of all financial
statements and similar reports delivered to Encumbered Property Lenders; and

 

(iii)         such other
information as Lender shall reasonably request, to the extent readily available
to Borrower or Sponsor without material cost or expense.

 

5.13.       Quarterly
Financial Statements.  As soon as
available, and in any event within 60 days after the end of each Fiscal Quarter
(including year-end), Borrower shall furnish to Lender, in an Excel spreadsheet
file in electronic format (which may be via an intralinks site at Borrower’s
sole cost and expense), or, in the case of predominantly text documents, in
Adobe .pdf format, quarterly and year-to-date an unaudited balance sheet
prepared for such Fiscal Quarter with respect to Borrower and (except to the
extent stock in Sponsor is publicly traded on a major stock exchange) Sponsor,
which statements with respect to Borrower shall be on a consolidated basis with
respect to the Properties as a whole, together with related consolidated
statements of income, for such Fiscal Quarter and for the portion of the Fiscal
Year ending with such Fiscal Quarter, which statements shall include an
attached schedule of Net Operating Income, gross carrying value and accumulated
depreciation, each on an individual property basis, which statements shall be
accompanied by an Officer’s Certificate certifying that the same are true and
correct and were prepared in accordance with GAAP applied on a consistent
basis, subject to changes resulting from audit and normal year-end audit
adjustments.  Each such quarterly report
shall be accompanied by the following, in hard copy and electronic format:

 

(i)           a statement which
calculates Net Operating Income for each of the Fiscal Quarters in the Test
Period ending in such Fiscal Quarter, in the case of each such Fiscal Quarter,
ending at the end thereof;

 

69

 

(ii)          copies of each of
the Major Leases signed during such quarter and each other Lease signed during
such quarter that is requested by Lender, and a summary of each material Lease
(and, to the extent prepared by Borrower or Approved Property Manager in the
ordinary course of business, each other Lease) signed during such quarter,
which shall include the Tenant’s name, lease term, base rent, Tenant
Improvements, leasing commissions paid, free rent and other material tenant
concessions;

 

(iii)         then current rent
roll and occupancy reports;

 

(iv)         to the extent not
otherwise described in this Section 5.13, copies of all financial
statements and similar reports delivered to Encumbered Property Lenders;

 

(v)          a copy of AFRT’s
business plan, to the extent updated after the date hereof; and

 

(vi)         such other
information as Lender shall reasonably request, to the extent readily available
to Borrower or Sponsor without material cost or expense.

 

5.14.       Monthly
Financial Statements.  If requested
by Lender or during an Event of Default (or, in the case of item (iv) below,
at all times), Borrower shall furnish within 30 days after the end of each
calendar month (other than the calendar month immediately following the final
calendar month of any Fiscal Year or Fiscal Quarter, in which case Borrower
shall furnish same within the respective time period specified in Section 5.12
or 5.13, as applicable), in an Excel spreadsheet file in electronic
format (which may be via an intralinks site at Borrower’s sole cost and
expense) or, in the case of predominantly text documents, in Adobe .pdf format,
monthly and year-to-date unaudited financial statements prepared for the
applicable month with respect to Borrower and Senior Mezzanine Borrower,
including a balance sheet and operating statement as of the end of such month,
together with related statements of income, for such month and for the portion
of the Fiscal Year ending with such month, which statements shall be
accompanied by an Officer’s Certificate certifying that the same are true and
correct and were prepared in accordance with GAAP applied on a consistent
basis, subject to changes resulting from audit and normal year-end audit adjustments.  Each such monthly report shall be accompanied
by the following:

 

(i)           beginning with the
calendar month ending June 30, 2008, a summary of material Leases (and, to
the extent prepared by Borrower or Approved Property Manager in the ordinary
course of business, each other Lease) signed during such month, which summary
shall include the Tenant’s name, lease term, base rent, escalations, Tenant
Improvements, leasing commissions paid, free rent and other concessions;

 

(ii)          then current rent
roll and occupancy reports;

 

(iii)         to the extent not
otherwise described in this Section 5.14, copies of all financial
statements and similar reports delivered to Encumbered Property Lenders; and

 

(iv)         such other
information as Lender shall reasonably request, to the extent readily available
to Borrower or Sponsor without material cost or expense.

 

70

 

5.15.       Insurance.  Borrower shall cause Senior Mezzanine
Borrower to obtain and maintain or cause to be obtained and maintained with
respect to the Properties the Policies of insurance required to be
maintained pursuant to the provisions of Section 5.15 of the Senior
Mezzanine Loan Agreement.  Borrower shall
cause (or shall cause Property Owner to cause) Lender at all times to be named
as an additional insured (but not a “loss payee” unless and until the Senior
Mezzanine Loan is no longer outstanding) under the Policies and shall
deliver, or cause to be delivered, to Lender evidence, reasonably satisfactory
to Lender, of the insurance described in Section 5.15 hereof and of
the Senior Mezzanine Loan Agreement.

 

5.16.       Casualty
and Condemnation.

 

(a)           Borrower
shall give, or cause to be given, prompt notice to Lender of any Casualty or
Condemnation in excess of $250,000.  In the
event any Casualty or Condemnation, in respect of which Senior Mezzanine Lender
applies Loss Proceeds toward the prepayment of the Senior Mezzanine Loan, all
excess Loss Proceeds remaining after the Senior Mezzanine Loan has been paid in
full shall be applied toward the prepayment of the Loan and shall be
accompanied by interest through the end of the applicable Interest Accrual
Period (calculated as if the amount prepaid were outstanding for the entire
Interest Accrual Period during which the prepayment is applied).  If the Note has been bifurcated into multiple
Note Components pursuant to Section 1.3(c), all prepayments of the
Loan applied toward such Note shall
be applied to the Note Components of
such Note in ascending order of interest rate (i.e., first to the
Note Component with the lowest Component Spread until its outstanding principal
balance has been reduced to zero, then to the Note Component with the second
lowest Component Spread until its outstanding principal balance has been
reduced to zero, and so on).

 

(b)          Borrower shall provide, or cause Senior Mezzanine Borrower
to provide, to Lender copies of all insurance claims and settlement notices,
and in the case where the Loss Proceeds are applied towards restoration of the
applicable Property under the Senior Mezzanine Loan Agreement, copies of the
plans and specifications, architect’s certificates, waivers of lien, contractor’s
sworn statements, plans, bonds, plats of survey and such other documents as
Lender may reasonably request, to the extent delivered to Senior Mezzanine
Lender.

 

(c)           In the event the Senior Mezzanine Loan is paid in full,
the provisions of Section 5.16 of the Senior Mezzanine Loan Agreement as
in effect on the date hereof (subject to any amendments approved by Lender
unless such approval is not required hereunder) shall apply herein and Borrower
and Lender shall each have the same rights and obligations with respect to Loss
Proceeds, availability of funds, claims adjustments and the restoration of any
Property, as provided therein between Senior Mezzanine Borrower and Senior
Mezzanine Lender.

 

(d)          Notwithstanding anything in this Section 5.16
to the contrary, with respect to Encumbered Properties, Loss Proceeds shall be
applied in accordance with the Encumbered Property Debt Documents , and after
such application, any excess Loss Proceeds shall be applied in accordance with
this Section 5.16.

 

5.17.       Annual
Budget.  At least 30 days prior to
the commencement of each Fiscal Year during the term of the Loan beginning with
the 2008 Fiscal Year, and at least 30 days after the commencement of any Event
of Default, Borrower shall deliver to Lender an

 

71

 

Annual Budget for the Properties for the ensuing
Fiscal Year and, promptly after preparation thereof, any subsequent revisions
to the Annual Budget.  During the
continuance of any Event of Default, such Annual Budget and any such revisions
shall be subject to Lender’s approval (the Annual Budget, as so approved, or if
no Event of Default exists, the Annual Budget, the “Approved Annual Budget”);
provided, however, that Borrower shall not amend any Annual
Budget more than once in any 60-day period. 
If Borrower submits an Annual Budget for approval in good faith and such
Annual Budget is not approved within 30 days, then the prior year’s Approved
Annual Budget will remain in effect, subject to increases for non-discretionary
items such as insurance premiums and Taxes and increases in the Consumer Price
Index for the applicable calendar year over the previous calendar year for
discretionary items.

 

5.18.       General
Indemnity.  (a)  Borrower shall indemnify, reimburse, defend and hold harmless Lender and
its officers, directors, employees and agents (collectively, the “Indemnified
Parties”) for, from and against any and all Damages of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Indemnified Parties, in any way relating to or arising out of the making or
holding or enforcement of the Loan by Lender or the administration of the
Transaction to the extent resulting, directly or indirectly, from any claim
(including any Environmental Claim) made (whether or not in connection with any
legal action, suit, or proceeding) by or on behalf of any Person; provided,
however, that no Indemnified Party shall have the right to be
indemnified hereunder for its own fraud, bad faith, gross negligence or willful
misconduct.  The provisions of and
undertakings and indemnification set forth in this Section 5.18
shall survive the satisfaction and payment in full of the Indebtedness and
termination of this Agreement.

 

(b)          The applicable Indemnified Party shall promptly notify
Borrower in writing of any action, judgment, suit, claim or demand with respect
to which such Indemnified Party seeks the benefit of Section 5.18(a) and
provide Borrower the opportunity to defend same, and if such Indemnified Party
fails to do so it shall lose the benefit of Section 5.18(a) if
and to the extent Borrower is prejudiced thereby.  So long as Borrower is resisting and
defending in a prudent and commercially reasonable manner any action, judgment,
suit, claim or demand that gives rise to Damages (or same is being defended by
Borrower’s insurer and insurance is adequate for the reimbursement of such
Damages), the Indemnified Parties shall not be entitled to defend or settle
same and claim the benefit of Section 5.18(a) with respect
thereto without the consent of Borrower. 
Notwithstanding the foregoing, if the conditions set forth in the
preceding sentence are not being satisfied and Lender has provided Borrower
with 30 days’ prior written notice, or shorter period if mandated by the
requirements of applicable law, and opportunity to correct such determination,
Lender may in good faith settle such action, suit or proceeding and claim the
benefit of this Section 5.18 with respect thereto.

 

5.19.       Nonbinding
Consultation.  Lender shall have the right to consult
with and advise Borrower regarding significant business activities and business
and financial developments of Borrower, provided that any such advice or
consultation or the result thereof shall be completely nonbinding on Borrower.

 

5.20        Compliance with Encumbrances.  Each Borrower covenants and agrees as
follows:

 

72

 

(i)           Borrower shall, and
shall cause Senior Mezzanine Borrower to, comply with all material terms,
conditions and covenants of each material Permitted Encumbrance, including any
material reciprocal easement agreement, any declaration of covenants,
conditions and restrictions, and any condominium arrangements.

 

(ii)          Borrower shall, and
shall cause Senior Mezzanine Borrower to, promptly deliver to Lender a true and
complete copy of each and every notice of default received by Borrower or any
Senior Mezzanine Borrower with respect to any obligation of Borrower or such
Senior Mezzanine Borrower under the provisions of any such Permitted
Encumbrance, in each case if the same would reasonably be expected to have a
Material Adverse Effect.

 

(iii)         Borrower shall
deliver to Lender copies of any written notices of event of default relating to
any such Permitted Encumbrance served by Borrower or any Senior Mezzanine
Borrower, if the same would reasonably be expected to have a Material Adverse
Effect.

 

(iv)         After the occurrence
of an Event of Default, so long as the Loan is outstanding, Borrower shall not,
and shall not permit Senior Mezzanine Borrower to, grant or withhold any
material consent, approval or waiver under any such Permitted Encumbrance
without the prior written consent of Lender.

 

(v)          Borrower shall
deliver, or cause to be delivered, to each other party to any such Permitted
Encumbrance notice of the identity of Lender and each assignee of Lender of
which Borrower has been notified in writing if such notice is required in order
to protect Lender’s interest thereunder.

 

5.21        Encumbered Property Indebtedness.  Borrower
shall cause Senior Mezzanine Borrower to cause each Encumbered Property Owner
to comply in all material respects with all of their respective obligations and
liabilities under the Encumbered Property Debt Documents to which each is a
party, in each case except to the extent that any failure to so comply would
not have a Material Adverse Effect on the value of any of the Encumbered
Properties or the Collateral.  Borrower
shall cause Senior Mezzanine Borrower to cause each Encumbered Property Owner,
promptly upon receipt of any notice of breach or default under any Encumbered
Property Debt Documents, to deliver a copy of the same to Lender and to grant
access to, and otherwise cooperate with, Lender to permit Lender, subject to
the Encumbered Property Debt Documents and the rights of Senior Mezzanine
Lender under the Senior Mezzanine Loan Documents, to cure such default to the same
extent as the right granted to Lender under Section 7.2(c) to
cure an Event of Default with respect to any Mortgage Loan Collateral
Property.  The actual costs and
expenses incurred by Lender in exercising rights under this paragraph
(including reasonable attorneys’ fees), with interest at the Default Rate for
the period after notice from Lender that such costs or expenses were incurred
to the date of payment to Lender, shall constitute a portion of the
Indebtedness, shall be secured by the Loan Documents and shall be due and
payable to Lender within 5 Business Days of demand therefor.  Within 30 days of the Closing Date, Borrower
shall take all steps necessary to cause Junior Mezzanine Lender to be a notice
party under the Encumbered Property Debt Documents.

 

73

 

5.22        Disposition Assets.  Upon the
sale or other transfer or disposition of any Disposition Asset, Borrower shall
promptly deliver to Lender written notice thereof in the form of an Officer’s
Certificate identifying the relevant Disposition Asset, the price for which it
was sold and the transferee thereof and certifying that the transferee thereof
is unaffiliated with Borrower or any Senior Mezzanine Borrower.

 

5.23        Distributions.  Borrower shall cause Senior
Mezzanine Borrower to cause each Property Owner and each Joint Venture Owner to
promptly make Distributions of all available cash flow, after payment of
Operating Expenses at the applicable Property and other sums then required to
be paid to the Encumbered Property Lenders or otherwise required to be paid, in
each case, to the extent expressly set forth in the Encumbered Party Debt
Documents or the Joint Venture Documents, directly into the Cash Management
Account or the Blocked Account on the earliest date practicable in the maximum
amount not prohibited by the Encumbered Property Documents or the Qualified
Joint Venture Agreements.  Borrower shall
cause Senior Mezzanine Borrower to cause TRS Owner to promptly make
Distributions of all available cash flow, after payment of Operating Expenses
at the applicable TRS Property and other sums then required or otherwise
advisable to be paid by TRS Owner in order to ensure that TRS Owner maintains
its status as a taxable REIT subsidiary under applicable Legal Requirements,
directly into the Cash Management Account or the Blocked Account on the
earliest date practicable in the maximum amount then permissible

 

5.24        Encumbered Property Defaults. 
Upon the occurrence of an event of default under any one or more
Encumbered Property Loans due to a claim that the Transaction was prohibited
thereunder, (x) AFRT shall repay or defease, or cause to be repaid or
defeased, such Encumbered Property Loan, as applicable, prior to the earlier of
(1) the date that is 10 days after the declaration of the event of default
under the applicable Encumbered Property Debt Documents and (2) the
acceleration of such Encumbered Property Loan; or (y) AFRT shall cause the
release of the Encumbered Property or Encumbered Properties securing such
Encumbered Property Loan from the Lien of the Loan Documents in accordance with
Section 2.2(a) prior to the earlier of (1) the date that
is 10 days after the declaration of the event of default under the applicable
Encumbered Property Loan and (2) the acceleration of such Encumbered
Property Loan; provided, however, that (i) in connection
with any such release, notwithstanding anything to the contrary contained in
this Agreement, such Encumbered Property may be Transferred to an Affiliate,
and (ii) if the Transfer related to the release of such Encumbered
Property would result in a further default under the applicable Encumbered
Property Debt Documents, then Borrower shall be required to pay the applicable
Release Price for such Encumbered Property, but shall not be required to
Transfer such Property to actually effectuate such release.  The foregoing 10-day period may be extended
to up to 60 days, provided (x) prior to the expiration of such 10-day
period, AFRT shall deliver to Senior Mezzanine Lender (or to Lender, if the
Senior Mezzanine Loan shall no longer be outstanding or if the Senior Mezzanine
Lender has otherwise waived the requirements of Section 5.24 of the Senior
Mezzanine Loan Agreement) a Letter of Credit in the amount, if any, by which
the aggregate cost to repay or defease such Encumbered Property Loan (e.g.,
transaction costs, defeasance costs and prepayment fees) exceeds the
outstanding principal balance thereof, (y) the aggregate outstanding
principal amount of Encumbered Property Loans for which an event of default
thereunder is continuing does not exceed $350,000,000 at such time, and (z) AFRT
shall deliver to Lender an Officer’s Certificate of Sponsor certifying that
such event of default under such Encumbered Property Loan does not

 

74

 

trigger an event of
default under any other Debt of Sponsor, any Permitted Debt of Borrower or any
Debt of any of their respective Affiliates.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

6.1.         Liens
on the Properties and Collateral. 
None of Borrower, any Senior Mezzanine Borrower, any Property Owner,
and, if applicable, any Single-Purpose Equityholder shall permit or suffer the
existence of any Lien on any of its assets, other than Permitted Encumbrances.

 

6.2.         Ownership.  Borrower shall not own any assets other than
its equity interests in Senior Mezzanine Borrower and assets related
thereto.  No Senior Mezzanine Borrower
shall own any assets other than its Properties and related personal property
and fixtures located therein or used in connection therewith or its Required
Equity, as applicable.  Except to the
extent required under the Encumbered Property Debt Documents, Borrower shall
not permit any Property Owner to own any assets other than its Encumbered
Property and related personal property and fixtures located therein or used in
connection therewith.  Except as
otherwise shown on Exhibit A, neither AFRT nor AFRT Owner has any
direct or indirect subsidiary that is not Borrower, a Senior Mezzanine Borrower
or a Property Owner, and no new direct or indirect subsidiary shall be formed,
unless such subsidiary shall be a New Borrower Entity that becomes a “Borrower”
hereunder or under the Senior Mezzanine Loan or a Permitted TRS Entity under
the Senior Mezzanine Loan (unless Lender shall otherwise consent thereto) and,
if it is a Borrower hereunder or a “Borrower” under the Senior Mezzanine Loan,
pledge all of its assets to Lender or Senior Mezzanine Lender, as the case may
be, in each case pursuant to documentation reasonably acceptable to Lender.

 

6.3.         Transfer.

 

(a)           Borrower
shall not (i) Transfer any Collateral, (ii) permit any Senior
Mezzanine Borrower to transfer any Senior Mezzanine Collateral or (iii) permit
any Property Owner to Transfer any Property, other than in compliance with Article II
hereof and Article II of the Senior Mezzanine Loan Agreement, as
applicable, and other than the replacement or other disposition of obsolete or
non-useful personal property and fixtures in the ordinary course of business,
and Borrower shall not, and shall not permit Senior Mezzanine Borrower or any
Property Owner to, hereafter file a declaration of condominium with respect to
any of the Properties.

 

(b)          Notwithstanding
the foregoing:

 

(i)            Borrower may permit
one or more Senior Mezzanine Borrowers, at their sole cost and expense, to
Transfer all or a portion of the Required Equity to another Borrower or a New
Borrower Entity and/or enter into a Permitted TRS Contribution Agreement,
provided that the nature, extent and value of Lender’s collateral is not
thereby impaired and (1) after giving effect to any such Transfer or
Permitted TRS Contribution Agreement, no Change of Control shall have occurred,
(2) Lender shall

 

75

 

have received ten
days’ advance written notice of any such Transfer or Permitted TRS Contribution
Agreement together with a revised organizational chart reflecting such
Transfer, (3) such Required Equity shall remain or become (as the case may
be) subject to a first priority perfected Lien in favor of Senior Mezzanine
Lender, as evidenced by a legal opinion and updated UCC title insurance policy,
in each case reasonably satisfactory to Lender and consistent with Rating
Agency requirements, (4) if reasonably requested by Lender, Borrower shall
deliver to Lender an updated nonconsolidation opinion satisfactory to Lender
and such other updated legal opinions, certifications and evidence of
compliance with this Agreement as Lender shall reasonably require, (5) such
Transfer shall have no adverse effect on Lender, (6) with respect to a
Permitted TRS Contribution Agreement, to the extent not already covered by the
Senior Mezzanine Loan Documents, Borrower shall have caused the rights of both
parties under such agreement to be pledged to Senior Mezzanine Lender as
additional collateral for the Senior Mezzanine Loan in a manner reasonably
satisfactory to Lender and (7) Borrower shall pay all reasonable costs and
expenses of Lender in connection with the foregoing;

 

(ii)           so long as no Event
of Default is then continuing, Borrower may cause Senior Mezzanine Borrower to
obtain the release of up to and including 80% of the indirect equity interests
in any Property Owner in the aggregate from the Liens of the Senior Mezzanine
Loan Documents in connection with the sale of such equity interests to an
unaffiliated third party that enters into a Qualified Joint Venture Agreement
with Senior Mezzanine Borrower, provided that (1) at the time of
each such release, Borrower shall prepay the Loan, in accordance with Section 2.1,
in an amount equal to the applicable Unaffiliated Release Price for such Joint
Venture Property, provided that, solely for these purposes, (i) the amount
specified in clause (x) of the definition of “Unaffiliated Release Price”
shall be multiplied by the percentage of the joint venture interest being
Transferred, and (ii) the percentage specified in clause (y) of the
definition of Unaffiliated Release Price shall be replaced with “100%”, which
prepayment shall be accompanied by the other amounts specified in Section 2.1,
(2) DSCR for the Test Period most recently ended, recalculated to include
only Senior Mezzanine Borrower’s share of income and expense attributable to
the Properties remaining after the contemplated sale and to exclude the
interest expense and principal payments on the aggregate amount to be prepaid,
shall be equal to or greater than DSCR immediately prior to such sale (as
reasonably determined by Lender), (3) after giving effect to such release,
the aggregate Senior Collateral Value shall not be less than 120% of the sum of
the Principal Indebtedness and the Senior Mezzanine Loan Principal Indebtedness
(as reasonably determined by Lender), (4) Borrower shall reimburse Lender
for any actual reasonable out-of-pocket costs and expenses incurred by Lender
in connection with this Section (including the reasonable fees and
expenses of legal counsel and the Servicer), (5) Senior Mezzanine Lender
shall retain a first-priority perfected pledge of the remaining equity
interests in such Property Owner, which shall not be less than 20% of the
equity therein; and (6) any subsequent sale of a Joint Venture Property
shall be subject to the requirements of Section 2.2, except that,
for purposes of this subsection (6) only, the Release Price payable in
connection therewith shall be the Unaffiliated Release Price (taking into
account 100% of the Aggregate Allocated Loan Amounts of the respective
Properties, without reduction for prior equity sales) reduced by multiplying
the amount

 

76

 

specified in
clause (x) of the definition of Unaffiliated Release Price by the
percentage of the applicable joint venture not theretofore released;

 

(iii)          Borrower may cause
one or more Encumbered Property Owners to transfer one or more Encumbered Properties
to one or more newly formed Single-Purpose Entities Controlled by Sponsor, in
connection with the incurrence of Permitted Debt pursuant to clause (iv) of
the definition of “Permitted Debt”;

 

(iv)         Borrower shall be
permitted to cause Senior Mezzanine Borrower to Transfer Value Add Pool Equity
pursuant to Section 2.3; and

 

(v)          a transfer of the
direct and indirect equity interests in Senior Mezzanine Borrower to the Lender
in connection with a foreclosure (or similar “in lieu” transaction) of the Loan
shall be permitted, subject to the intercreditor agreement between Lender and
Senior Mezzanine Lender.

 

6.4.         Debt.  None of Borrower, any Senior Mezzanine
Borrower or any Property Owner shall have any Debt, other than Permitted
Debt.  No direct or indirect equityholder
of Borrower, any Senior Mezzanine Borrower or any Property Owner, other than
Sponsor and any direct or indirect equityholder of Sponsor, shall have any
debt, other than Permitted Debt. 
Notwithstanding the foregoing, the Mortgage Guarantor shall be permitted
to guaranty 100% of the Mortgage Loan.

 

6.5.         Dissolution;
Merger or Consolidation.  None of
Borrower, any Senior Mezzanine Borrower, any Property Owner that owns any
assets or, if applicable, any Single-Purpose Equityholder shall dissolve,
terminate, liquidate, merge with or consolidate into another Person.

 

6.6.         Change
in Business.  No Borrower nor any
Property Owner shall make any material change in the scope or nature of its
business objectives, purposes or operations or undertake or participate in
activities other than the continuance of its present business.

 

6.7.         Debt
Cancellation.  None of Borrower, any
Senior Mezzanine Borrower or any Property Owner shall cancel or otherwise
forgive or release any material claim or Debt owed to it by any Person, except
for adequate consideration or in the ordinary course of its business.

 

6.8.         Affiliate
Transactions.  None of Borrower, any
Senior Mezzanine Borrower or any Property Owner shall enter into, or be a party
to, any transaction with any Affiliate of Borrower or Senior Mezzanine
Borrower, except on terms which are no less favorable to Borrower, such Senior
Mezzanine Borrower or such Property Owner than would be obtained in a
comparable arm’s length transaction with an unrelated third party.

 

6.9.         Misapplication
of Funds.  None of Borrower or any
Senior Mezzanine Borrower shall (a) distribute any Revenue or Loss
Proceeds in violation of the provisions of this Agreement (and shall promptly
cause the reversal of any such distributions made in error of which Borrower
becomes aware), (b) fail to remit or cause to be remitted amounts to the
Cash

 

77

 

Management Account as
required by Section 3.1 (including, without limitation, all
Distributions), or (c) misappropriate any security deposit or portion
thereof.

 

6.10.       Jurisdiction
of Formation.  None of Borrower, any
Senior Mezzanine Borrower or any Property Owner shall change its jurisdiction
of formation without receiving Lender’s prior written consent and promptly
providing Lender such information and replacement Uniform Commercial Code
financing statements and legal opinions as Lender may reasonably request in
connection therewith.

 

6.11.       Modifications
and Waivers.  Unless otherwise
consented to in writing by Lender:

 

(i)            None of Borrower,
Senior Mezzanine Borrower or Property Owner shall amend, modify, terminate,
renew, or surrender any rights or remedies under any Major Lease, or enter into
any Major Lease, except in compliance with Section 5.7;

 

(ii)           Except
for changing its registered agent and principal place of business (in each
case, upon advance written notice to Lender), none of Borrower, Senior
Mezzanine Borrower, Property Owner or, if applicable, any Single-Purpose
Equityholder shall terminate, amend or modify its organizational documents
(including, without limitation, any operating agreement, limited partnership
agreement, by-laws, certificate of formation, certificate of limited
partnership or certificate of incorporation) in a manner which (x) could
reasonably be expected to affect its qualification as a Single-Purpose Entity,
with respect to entities required to be Single-Purpose entities hereunder or (y) could
reasonably be expected to result in a Material Adverse Effect; and

 

(iii)          None
of Borrower, Senior Mezzanine Borrower or Property Owner shall terminate,
materially amend or materially modify the Approved Management Agreement without
the consent of Lender not to be unreasonably withheld, conditioned or delayed.

 

6.12.       ERISA.

 

(a)           None
of Borrower or any Senior Mezzanine Borrower shall maintain or contribute to,
or agree to maintain or contribute to, or permit any ERISA Affiliate of
Borrower or Senior Mezzanine Borrower (except for Sponsor and any ERISA
Affiliate that is an equityholder in Sponsor) to maintain or contribute to or
agree to maintain or contribute to, any employee benefit plan (as defined in Section 3(3) of
ERISA) subject to Title IV or Section 302 of ERISA or Section 412 of
the Code.

 

(b)          None
of Borrower or any Senior Mezzanine Borrower shall engage in a non-exempt
prohibited transaction under Section 406 of ERISA, Section 4975 of
the Code, or substantially similar provisions under federal, state or local
laws, rules or regulations or in any transaction that would cause any
obligation or action taken or to be taken hereunder (or the exercise by Lender
of any of its rights under the Notes, this Agreement, the Mortgages, the Pledge
Agreement or any other Loan Document or Senior Mezzanine Loan Document) to be a
non-exempt prohibited transaction under such provisions.

 

78

 

6.13.       Alterations
and Expansions.  During the
continuance of any Event of Default, none of Borrower, Senior Mezzanine
Borrower or Property Owner shall perform or contract to perform any Capital
Expenditures that are not consistent with the Approved Annual Budget.  None of Borrower, Senior Mezzanine Borrower
or Property Owner shall perform or contract to perform any Material Alteration
without the prior written consent of Lender, which consent (in the absence of
an Event of Default) shall not be unreasonably withheld, conditioned or
delayed.  If Lender’s consent is
requested hereunder with respect to a Material Alteration, Lender may retain a
construction consultant to review such request and, if such request is granted,
Lender may retain a construction consultant to inspect the work from time to
time.  Borrower shall, within 30 days of
demand by Lender, reimburse Lender for the reasonable fees and disbursements of
such consultant.

 

6.14.       Advances
and Investments.  None of Borrower,
Senior Mezzanine Borrower or Property Owner shall lend money or make advances
to any Person, or purchase or acquire any stock, obligations or securities of,
or any other interest in, any Person, except for Permitted Investments, or
issue any additional equity interests.  
None of Borrower, Senior Mezzanine Borrower or Property Owner shall make
any capital contribution to any Person other than Borrower, a Senior Mezzanine
Borrower or a Property Owner .

 

6.15.       Single-Purpose
Entity.  None of Borrower or any
Senior Mezzanine Borrower shall cease to be a Single-Purpose Entity.

 

6.16.       Zoning
and Uses.    None of Borrower,
Senior Mezzanine Borrower or Property Owner shall do any of the following with
respect to any of the Properties without the prior written consent of Lender
(such consent not to be unreasonably withheld, delayed or conditioned), except,
as to clause (ii) below, to the extent the same is commercially
reasonable and not reasonably expected to have a Material Adverse Effect:

 

(i)            initiate
or support any limiting change in the permitted uses of any of the Properties
(or to the extent applicable, zoning reclassification of any of the Properties)
or any portion thereof, seek any material variance under existing land use
restrictions, laws, rules or regulations (or, to the extent applicable,
zoning ordinances) applicable to a Property, or use or permit the use of a
Property in a manner that would result in the use of such Property becoming a
nonconforming use (other than a legal nonconforming use) in any material
respect under applicable land-use restrictions or zoning ordinances or that
would violate the terms of any Lease, Material Agreement or Legal Requirement
in any material respect;

 

(ii)           consent
to any modification, amendment or supplement to any of the terms of, or
materially default in its obligations under, any Permitted Encumbrance, to the
extent the same would result in a Material Adverse Effect;

 

(iii)          impose
or consent to the imposition of any restrictive covenants, easements or
encumbrances upon a Property in any manner that adversely affects in any
material respect its value, utility or transferability;

 

79

 

(iv)         execute
or file any subdivision plat affecting any of the Properties, or institute, or
permit the institution of, proceedings to alter any tax lot comprising any of
the Properties;

 

(v)          amend,
modify, surrender, terminate or waive any material rights or remedies under, or
enter into, or default (beyond applicable grace, cure or notice periods) in its
material obligations under, any Material Agreement in any manner that might
diminish (x) the value of the applicable Property or Properties or (y) the
rights of Borrower, any Senior Mezzanine Borrower, Property Owner or Lender
thereunder;

 

(vi)         amend,
modify, surrender, terminate or waive any material rights or remedies under, or
enter into, or default (beyond applicable grace, cure or notice periods) in its
material obligations under, any Ground Lease in any manner that might diminish (x) the
value of the applicable Property or Properties or (y) the rights of
Borrower, any Senior Mezzanine Borrower, any Property Owner or Lender
thereunder; or

 

(vii)        permit
or consent to any of the Properties being used by the public or any Person in
such manner as might make possible a claim of adverse usage or possession or of
any implied dedication or easement.

 

6.17.  Waste.  None of Borrower, Senior Mezzanine Borrower
or Property Owner shall commit or permit any Waste on any of the Properties,
nor take any actions that might invalidate any insurance carried on any of the
Properties (and Borrower shall cause Senior Mezzanine Borrower or Property
Owner to promptly correct any such actions of which Borrower becomes aware).

 

ARTICLE VII

 

DEFAULTS

 

7.1.         Event
of Default.  The occurrence of any
one or more of the following events shall be, and shall constitute the
commencement of, an “Event of Default” hereunder:

 

(a)           Payment.

 

(i)            Borrower shall default
in the payment when due of any principal or interest owing hereunder or under
the Notes (including any mandatory prepayment required hereunder); or

 

(ii)           Borrower shall
default, and such default shall continue for at least five Business Days after
written notice to Borrower that such amounts are owing, in the payment when due
of fees, expenses or other amounts owing hereunder, under the Notes or under
any of the other Loan Documents (other than principal and interest owing
hereunder or under the Note).

 

(b)          Representations.  Any representation made by Borrower or
Sponsor in any of the Loan Documents, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Lender shall
have been false or misleading in any material

 

80

 

respect (or, with respect
to any representation which itself contains a materiality qualifier, in any
respect) as of the date such representation was made, which failure, if capable
of being cured or remedied, has not been cured or remedied within 15 days after
written notice to Borrower of such failure.

 

(c)           Other
Loan Documents.  Any Loan Document
shall fail to be in full force and effect or to convey the material Liens,
rights, powers and privileges purported to be created thereby; or a default
shall occur under any of the other Loan Documents, any of the Ground Leases (to
the extent such default would entitle the lessor thereunder to terminate the
Ground Lease) or under any Qualified Joint Venture Agreement, in each case
beyond the expiration of any applicable cure period (provided that if a default
occurs under a Loan Document and no cure period is provided therein, and such
Loan Document does not characterize such default as an “Event of Default”, then
clause (k) hereof shall apply).

 

(d)          Bankruptcy, etc.

 

(i)            Borrower, any
Senior Mezzanine Borrower, any Property Owner, any Joint Venture Owner or, if
applicable, any Single-Purpose Equityholder shall commence a voluntary case
concerning itself under Title 11 of the United States Code (as amended,
modified, succeeded or replaced, from time to time, the “Bankruptcy Code”);

 

(ii)           Borrower, any
Senior Mezzanine Borrower, any Property Owner, any Joint Venture Owner or, if
applicable, any Single-Purpose Equityholder shall commence any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of creditors,
dissolution, insolvency or similar law of any jurisdiction whether now or
hereafter in effect relating to Borrower, such Senior Mezzanine Borrower,
Property Owner, Joint Venture Owner or Single-Purpose Equityholder, or shall
dissolve or otherwise cease to exist;

 

(iii)          there is commenced
against Borrower, any Senior Mezzanine Borrower, any Property Owner, any Joint
Venture Owner or, if applicable, any Single-Purpose Equityholder an involuntary
case under the Bankruptcy Code, or any such other proceeding, which remains
undismissed for a period of 60 days after commencement;

 

(iv)         Borrower, any Senior
Mezzanine Borrower, any Property Owner, any Joint Venture Owner or, if
applicable, any Single-Purpose Equityholder is adjudicated insolvent or
bankrupt;

 

(v)          Borrower, any Senior
Mezzanine Borrower, any Property Owner, any Joint Venture Owner or, if
applicable, any Single-Purpose Equityholder suffers appointment of any
custodian or the like for it or for any substantial portion of its property and
such appointment continues unchanged or unstayed for a period of 60 days after
commencement of such appointment;

 

(vi)         Borrower, any Senior
Mezzanine Borrower, any Property Owner, any Joint Venture Owner or, if
applicable, any Single-Purpose Equityholder makes a general assignment for the
benefit of creditors; or

 

81

 

(vii)                           any action is taken by Borrower, any
Senior Mezzanine Borrower, Property Owner, Joint Venture Owner or, if
applicable, any Single-Purpose Equityholder for the purpose of effecting any of
the foregoing.

 

(e)                                  Change of Control.

 

(i)                                     A Change of Control shall occur; or

 

(ii)                                  except as expressly permitted hereunder,
any party shall acquire any direct or indirect equity interest in Borrower, any
Senior Mezzanine Borrower, Property Owner or Single-Purpose Equityholder (even
if not constituting a Change of Control), other than a direct or indirect
equity interest in Sponsor; or

 

(iii)                               any party shall acquire more than 49% of
the direct or indirect equity interest in Borrower, any Senior Mezzanine
Borrower or a Single-Purpose Equityholder (even if not constituting a Change of
Control), other than a direct or indirect equity interest in Sponsor, and
Borrower shall fail to deliver to Lender with respect to such new equityholder
a new non-consolidation opinion satisfactory to (A) prior to the
occurrence of any Securitization of the Loan, Lender in its reasonable
discretion, and (B) at any time following any Securitization or series of
Securitizations of the Loan, each of the Rating Agencies rating such
Securitization or Securitizations.

 

(f)                                    Equity Pledge; Preferred Equity. 
Any direct or indirect equity interest in or right to distributions from
Borrower, any Senior Mezzanine Borrower, Property Owner or Joint Venture Owner
shall be subject to a Lien in favor of any Person, or any such party or any
holder of a direct or indirect interest in any such party shall issue preferred
equity (or debt granting the holder thereof rights substantially similar to
those generally associated with preferred equity); except that the following shall be permitted:

 

(i)                                     any pledge of direct and indirect equity
interests in and rights to distributions from Sponsor;

 

(ii)                                  the issuance of preferred equity
interests in Sponsor;

 

(iii)                               the pledges in favor of Lender created by
the Loan Documents; and

 

(iv)                              the pledges in favor of Senior Mezzanine
Lender created by the Senior Mezzanine Loan Documents.

 

(g)                                 Insurance.  Borrower
shall fail to maintain in full force and effect or cause to be maintained in
full force and effect all Policies required hereunder.

 

(h)                                 ERISA; Negative Covenants. 
A default shall occur in the due performance or observance by Borrower
of any term, covenant or agreement contained in Section 5.8 or in Article VI;
provided that if such default is susceptible of being cured, such default shall
not constitute an Event of Default unless and until it shall remain uncured for
10 days after Borrower receives written notice thereof, for a default which can
be cured by the payment of money, or for 30 days after Borrower receives
written notice thereof, for a default

 

82

 

which cannot be cured by the payment of money; or any
ERISA Event with respect to a Plan shall have occurred and the same shall have
a Material Adverse Effect.

 

(i)                                     Cross-Default.

 

(i)                                     A Senior Mezzanine Loan Event of Default
shall be continuing; or

 

(ii)                                  an event of default shall occur and be
continuing under any one or more Encumbered Property Loans, provided that (a) such
event of default shall not constitute an Event of Default unless the aggregate
outstanding principal amount of the applicable Encumbered Property Loans
exceeds $30 million at the time such event of default is declared and such
default is a monetary or material non-monetary event of default; and (b) if
an event of default is declared under any Encumbered Property Loan solely due
to a claim that the Transaction was prohibited thereunder, then same shall not
constitute an Event of Default if (x) Borrower complies with Section 5.24
within the time periods specified therein and (y) Senior Mezzanine Borrower
complies with Section 5.24 of the Senior Mezzanine Loan Agreement within
the time periods specified therein.

 

(j)                                     Certificates of Required Equity. 
If at any time the equity interests pledged by Borrower pursuant to the
Pledge Agreement shall be evidenced by new, replacement or additional
certificates and Borrower shall fail to deliver such certificates to Lender,
together with an executed stock, membership or partnership power, as
applicable, in blank.

 

(k)                              Other Covenants. 
A default shall occur in the due performance or observance by Borrower
of any term, covenant or agreement (other than those referred to in subsections
(a) through (j), inclusive, of this Section 7.1)
contained in this Agreement or in any of the other Loan Documents, except that if
such default referred to in this subsection (k) is susceptible of
being cured, such default shall not constitute an Event of Default unless and
until it shall remain uncured for 10 days after Borrower receives written
notice thereof, for a default which can be cured by the payment of money, or
for 30 days after Borrower receives written notice thereof, for a default which
cannot be cured by the payment of money; and if a default cannot be cured by
the payment of money but is susceptible of being cured and cannot reasonably be
cured within such 30-day period, and Borrower commences to cure such default
within such 30-day period and thereafter diligently and expeditiously proceeds
to cure the same, Borrower shall have such additional time as is reasonably necessary
to effect such cure, but in no event in excess of 120 days from the original
notice.

 

7.2.                          Remedies.

 

(a)                              During the continuance of an Event of
Default, Lender may by written notice to Borrower, in addition to any other
rights or remedies available pursuant to this Agreement, the Notes, and the
other Loan Documents, at law or in equity, declare by written notice to
Borrower all or any portion of the Indebtedness to be immediately due and
payable, whereupon all or such portion of the Indebtedness shall so become due
and payable, and Lender may enforce or avail itself of any or all rights or
remedies provided in the Loan Documents against Borrower and the Collateral
(including all rights or remedies available at law or in equity); provided,
however, that, notwithstanding the foregoing, if an Event of Default
specified

 

83

 

in
paragraph 7.1(d) shall occur, then the Indebtedness shall
immediately become due and payable without the giving of any notice or other
action by Lender.  Any actions taken by
Lender shall be cumulative and concurrent and may be pursued independently,
singly, successively, together or otherwise, at such time and in such order as
Lender may determine in its sole discretion, to the fullest extent permitted by
law, without impairing or otherwise affecting the other rights and remedies of
Lender permitted by law, equity or contract or as set forth in this Agreement
or in the other Loan Documents.

 

(b)                                 If Lender forecloses on any of the Collateral,
Lender shall apply all net proceeds of such foreclosure to repay the
Indebtedness, the Indebtedness shall be reduced to the extent of such net
proceeds and the remaining portion of the Indebtedness shall remain outstanding
and secured by the Collateral and the other Loan Documents, it being understood
and agreed by Borrower that Borrower is liable for the repayment of all the
Indebtedness; provided, however, that at the election of Lender,
the Notes shall be deemed to have been accelerated only to the extent of the
net proceeds actually received by Lender with respect to the Collateral and
applied in reduction of the Indebtedness.

 

(c)                                  During the continuance of any Event of
Default (including an Event of Default resulting from a failure to satisfy the
insurance requirements specified herein), Lender may, subject to the terms of
the Encumbered Property Debt Documents and the rights of the Senior Mezzanine
Lender, but without any obligation to do so and without notice to or demand on
Borrower and without releasing Borrower from any obligation hereunder, take any
action to cure such Event of Default. 
Subject to the Encumbered Property Debt Documents and the rights of
Senior Mezzanine Lender, Lender may enter upon any or all of the Properties
upon reasonable notice to Borrower for such purposes or appear in, defend, or
bring any action or proceeding to protect its interest in the Collateral or to
foreclose on the Collateral or collect the Indebtedness.  The costs and expenses incurred by Lender in
exercising rights under this paragraph (including reasonable attorneys’ fees),
with interest at the Default Rate for the period after notice from Lender that
such costs or expenses were incurred to the date of payment to Lender, shall
constitute a portion of the Indebtedness, shall be secured by the Loan
Documents and shall be due and payable to Lender upon demand therefor.

 

(d)                             Interest shall accrue on any judgment
obtained by Lender in connection with its enforcement of the Loan at a rate of
interest equal to the Default Rate.

 

7.3.                          No Waiver.  No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed by Lender to be expedient.  A waiver of any Default or Event of Default
shall not be construed to be a waiver of any subsequent Default or Event of Default
or to impair any remedy, right or power consequent thereon.

 

7.4.                              Application of Payments after an Event of
Default.
Notwithstanding anything to the contrary contained herein, during the
continuance of an Event of Default, all amounts received by Lender in respect
of the Loan shall be applied at Lender’s sole discretion either toward the
components of the Indebtedness (e.g., Lender’s expenses in enforcing the
Loan,

 

84

 

interest, principal and other amounts payable
hereunder), and the Note Components in such sequence as Lender shall elect in
its sole discretion, or toward the payment of Property expenses.

 

ARTICLE VIII

 

CONDITIONS PRECEDENT

 

8.1.                              Conditions Precedent to Closing. 
This Agreement shall become effective on the date that all of the
following conditions shall have been satisfied (or waived by Lender), it being
agreed that Lender’s funding of the Loan shall constitute Lender’s agreement
that such conditions have been satisfied or waived unless the parties shall
otherwise have agreed in writing:

 

(a)                                  Loan Documents. 
Lender shall have received a duly executed copy of each Loan
Document.  Each Loan Document which is to
be recorded in the public records shall be in form suitable for recording.

 

(b)                                 Collateral Accounts. 
Each of the Collateral Accounts shall have been established with the
Cash Management Bank and funded to the extent required under Article III.

 

(c)                                  Opinions of Counsel. Lender shall have received legal
opinions reasonably satisfactory to Lender.

 

(d)                                 Organizational Documents. 
Lender shall have received all documents reasonably requested by Lender
relating to the existence of each Borrower, the validity of the Loan Documents
and other matters relating thereto, in form and substance satisfactory to
Lender, including:

 

(i)                                     Authorizing Resolutions. 
A certified copy of the resolutions approving and adopting the Loan
Documents to be executed by Borrower and authorizing the execution and delivery
thereof.

 

(ii)                                  Organizational Documents. 
Certified copies of the organizational documents of Borrower and, if
applicable, any Single-Purpose Equityholder (including any certificate of
formation, certificate of limited partnership, certificate of incorporation,
operating agreement, limited partnership agreement or by-laws), in each case together
with all amendments thereto.

 

(iii)                               Certificates of Good Standing or
Existence.  Certificates of good standing or existence
for Borrower and, if applicable, any Single-Purpose Equityholder issued as of a
recent date by its state of organization and by each state in which one of the
Properties is located.

 

(iv)                              Certificates. 
Original limited liability company or partnership interest certificates,
as the case may be, executed in blank for Senior Mezzanine Borrower.

 

(e)                                  Lease; Material Agreements.  Lender
shall have received, with respect to each Property (i) true and complete
copies of all Material Agreements, Leases, Ground Leases,

 

85

 

recorded reciprocal
easement agreements (and similar documents) and (ii) all rent rolls and
material contracts to the extent available to Borrower without material cost or
expense.

 

(f)                                    Lien Search Reports. 
Lender shall have received satisfactory reports of Uniform Commercial
Code, tax lien, bankruptcy and judgment searches conducted by a search firm
acceptable to Lender with respect to the Properties and each Borrower
(including each Borrower’s immediate predecessor, if any, and to the extent
reasonably required, subsidiaries of each Borrower), such searches to be conducted
in such locations as Lender shall have requested.

 

(g)                                 Material Litigation. 
Lender shall have received a schedule of all material outstanding
litigation that is not fully covered by insurance.

 

(h)                                 No Default or Event of Default. 
No Default or Event of Default shall have occurred and be continuing on
such date either before or after the execution and delivery of this Agreement.

 

(i)                                     No Injunction. 
No Legal Requirement shall exist, and no litigation shall be pending or
threatened, which in the good faith judgment of Lender would enjoin, prohibit
or restrain, or impose or result in the imposition of any material adverse
condition upon, the making or repayment of the Loan or the consummation of the
Transaction.

 

(j)                                     Representations. 
The representations in this Agreement and in the other Loan Documents
shall be true and correct in all respects on and as of the Closing Date with
the same effect as if made on such date.

 

(k)                                  Estoppel Letters. 
To the extent obtained by Borrower through the exercise of reasonably
diligent efforts, Borrower shall have delivered to Lender estoppel certificates
from each Tenant under a Lease and each lessor under a Ground Lease, in each
case, which has been identified by Lender prior to the date hereof, each of
which shall specify that Lender and its successors and assigns may rely thereon
and otherwise be in such form and substance as shall be satisfactory to Lender.

 

(l)                                     Merger Agreement. 
Lender shall have received a complete copy of the executed Merger
Agreement (including all exhibits thereto) and each amendment thereto and all
other related agreements.

 

(m)                               No Material Adverse Effect. 
No event or series of events shall have occurred which Lender reasonably
believes has had or is reasonably likely to have a Portfolio Material Adverse
Effect.

 

(n)                                 Transaction Costs. 
Borrower shall have paid all transaction costs (or provided for the
direct payment of such transaction costs by Lender from the proceeds of the
Loan).

 

(o)                                 Insurance.  Lender shall
have received certificates of insurance on ACORD Form 28, demonstrating
insurance coverage in respect of the Properties of types, in amounts, with
insurers and otherwise in compliance with the terms, provisions and conditions
set

 

86

 

forth in this
Agreement.  Such certificates shall
indicate that Lender and its successors and assigns are named as additional
insured on each liability policy, and that each casualty policy and rental
interruption policy contains a loss payee and mortgagee endorsement in favor of
Lender, its successors and assigns.

 

(p)                                 Title.  Lender shall
have received a marked, signed commitment to issue, or a pro-forma version of,
a Qualified Title Insurance Policy in respect of each Mortgage Loan Property,
listing only usual and customary permitted exceptions and such other exceptions
reasonably approved by Lender.

 

(q)                                 UCC Insurance. 
Lender shall have received one or more UCC “Eagle-9” title insurance
policies insuring the equity pledges of the Loan Documents, subject only to
usual and customary permitted exceptions and other exceptions reasonably
approved by Lender, and a copy of the owner’s title insurance policy for each
non-mortgaged Property, with a mezzanine endorsement or the equivalent in favor
of Lender if available (except that Borrower shall not be required to purchase
new or updated owners’ policies).

 

(r)                                    Zoning.  Lender shall
have received zoning reports with respect to (x) each Mortgage Loan
Property, and (y) each other Property that Lender reasonably determines
necessary in order to syndicate the Loan, satisfy regulatory requirements,
resolve any material issues arising from Lender’s due diligence, and/or pledge
the Loan in connection with a repurchase or similar facility.

 

(s)                                  Permits; Certificate of Occupancy. 
Lender shall have received a copy of all Permits necessary for the use
and operation of each Property and the certificate(s) of occupancy, if
required, for each Property, all of which shall be in form and substance
reasonably satisfactory to Lender.

 

(t)                                    Engineering Report, Environmental Report
and Appraisals.  Lender shall have received existing
appraisals, Environmental Reports and engineering/seismic reports for each of
the Properties, and shall have received updates thereof with respect to (x) each
Mortgage Loan Property, and (y) each other Property that Lender reasonably
determines necessary in order to syndicate the Loan, satisfy regulatory
requirements, resolve any material issues arising from Lender’s due diligence,
and/or pledge the Loan in connection with a repurchase or similar
facility.  Providers of such reports
shall be reasonably approved by Lender. 
Each new appraisal shall conform to USPAP and FIRREA guidelines.

 

(u)                                 Qualified Survey. 
Lender shall have received a Qualified Survey with respect to (x) each
Mortgage Loan Property, and (y) each other Property that Lender reasonably
determines necessary in order to syndicate the Loan, satisfy regulatory
requirements, resolve any material issues arising from Lender’s due diligence,
and/or pledge the Loan in connection with a repurchase or similar facility,
which includes, without limitation, all such items as may be reasonably
required by Lender, together with a certification from a surveyor and legal
description for each Property reasonably acceptable to Lender.

 

(v)                                 Consents,
Licenses, Approvals, etc.  Lender shall have received copies of all consents,
licenses and approvals, if any, required in connection with the execution,
delivery

 

87

 

and performance by
Borrower, and the validity and enforceability, of the Loan Documents, and such
consents, licenses and approvals shall be in full force and effect.

 

(w)                               Financial Information. 
Lender shall have received (i) financial information relating to the
Sponsor, Borrower and the Properties which is satisfactory to Lender, including
current operating statements and historical operating statements for the past
three years, to the extent available to Borrower without material cost or
expense and (ii) a certified closing date balance sheet for Borrower and
Sponsor.

 

(x)                                   Annual Budget. 
Lender shall have received the 2008 Annual Budget with respect to the
Properties.

 

(y)                                 Closing Statement. 
Lender shall have received a reasonably detailed closing statement indicating
all sources and uses of funds.

 

(z)                                   Additional Matters. 
Lender shall have received such other certificates, opinions, documents
and instruments relating to the Loan as may have been reasonably requested by
Lender.  All corporate and other proceedings,
all other documents (including all documents referred to in this Agreement and
not appearing as exhibits to this Agreement) and all legal matters in
connection with the Loan shall be reasonably satisfactory in form and substance
to Lender.

 

ARTICLE
IX

 

MISCELLANEOUS

 

9.1.                          Successors.  Except as
otherwise provided in this Agreement, whenever in this Agreement any of the
parties to this Agreement is referred to, such reference shall be deemed to
include the successors and permitted assigns of such party.  All covenants, promises and agreements in
this Agreement contained, by or on behalf of Borrower, shall inure to the
benefit of Lender and its successors and assigns.

 

9.2.                          GOVERNING LAW.

 

(A)                            THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(B)                                ANY LEGAL SUIT, ACTION OR PROCEEDING
AGAINST LENDER, BORROWER OR THE SPONSOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (OTHER THAN ANY ACTION IN RESPECT
OF THE CREATION, PERFECTION OR ENFORCEMENT OF A LIEN OR SECURITY INTEREST
CREATED PURSUANT TO ANY LOAN DOCUMENTS NOT GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK) MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW
YORK.  LENDER, BORROWER AND THE SPONSOR
HEREBY (i) IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM

 

88

 

THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM, (ii) IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND (iii) IRREVOCABLY
CONSENT TO SERVICE OF PROCESS BY MAIL, PERSONAL SERVICE OR IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW, AT THE ADDRESS SPECIFIED IN SECTION 9.4.

 

9.3.                          Modification, Waiver in Writing. 
Neither this Agreement nor any other Loan Document may be amended, changed,
waived, discharged or terminated, nor shall any consent or approval of Lender
be granted hereunder, unless such amendment, change, waiver, discharge,
termination, consent or approval is in writing signed by Lender.

 

9.4.              Notices.  All notices,
consents, approvals and requests required or permitted hereunder or under any
other Loan Document shall be given in writing by expedited prepaid delivery
service, either commercial or United States Postal Service, with proof of
delivery or attempted delivery, addressed as follows (or at such other address
and person as shall be designated from time to time by any party to this
Agreement, as the case may be, in a written notice to the other parties to this
Agreement in the manner provided for in this Section).  ANY NOTICE OF DEFAULT UNDER ARTICLE VII OR
ANY SIMILAR PROVISION OF ANY OF THE OTHER LOAN DOCUMENTS MUST PROVIDE, IN ORDER
TO BE EFFECTIVE AS A NOTICE THEREUNDER, THAT IT IS BEING GIVEN AS A NOTICE OF
DEFAULT WHICH IF NOT CURED WITHIN THE GRACE PERIOD CONTAINED IN THE LOAN
DOCUMENTS WILL RESULT IN AN EVENT OF DEFAULT. 
A notice shall be deemed to have been given when delivered or upon
refusal to accept delivery.

 

If to
Lender:

 

Goldman Sachs Mortgage
Company

85 Broad Street, 11th Floor

New York, New York 10004

Attention:  Daniel Ottensoser and Rene
Theriault

 

with copy to:

 

Goldman Sachs Commercial Mortgage Capital, L.P.

6011 Connection Drive,
Suite 550

Irving, Texas 75039

Attention:  Michael Forbes

 

with copy to

 

Cleary Gottlieb Steen &
Hamilton LLP

One Liberty Plaza

New York, New York 10006

Attention: Michael Weinberger, Esq.

 

and

 

89

 

Citicorp
North America, Inc.

388 Greenwich Street

New York, New York 10013

Attention:  Mr. David Bouton

 

with
copy to

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York  10153

Attention:  Samuel M. Zylberberg, Esq.
(EG)

 

If to Borrower:

 

c/o
Gramercy Capital Corp.

420 Lexington Avenue, 19th Floor

New York, New York 10170

Attention:  Robert R. Foley, Chief
Operating Officer

 

with copies to:

 

c/o Gramercy
Capital Corp.

420 Lexington Avenue, 19th Floor

New York, New York  10170

Attention:  Office of the General Counsel

 

Fried, Frank, Harris,
Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004-1980

Attention:  Jonathan L. Mechanic, Esq.

 

9.5.  TRIAL BY JURY.  LENDER, BORROWER AND THE SPONSOR, TO THE
FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY AGREE NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. 
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY
BY LENDER, BORROWER AND THE SPONSOR AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE.  EACH OF LENDER,
BORROWER AND SPONSOR IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN
ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY LENDER, BORROWER AND
THE SPONSOR, AS THE CASE MAY BE.

 

90

 

9.6.          Headings.  The Article and
Section headings in this Agreement are included in this Agreement for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

 

9.7.          Assignment and Participation.

 

(a)           Except as
explicitly set forth in Sections 2.1 and 2.2, Borrower may not
sell, assign or transfer any interest in the Loan Documents or any portion
thereof (including Borrower’s rights, title, interests, remedies, powers and
duties hereunder and thereunder).

 

(b)           Lender and each
assignee of all or a portion of the Loan shall have the right from time to time
in its discretion to sell one or more of the Notes or any interest therein (an “Assignment”)
and/or sell a participation interest in one or more of the Notes (a “Participation”).  Borrower agrees reasonably to cooperate with
Lender, at Lender’s request, in order to effectuate any such Assignment or
Participation.  In the case of an
Assignment, (i) each assignee shall have, to the extent of such
Assignment, the rights, benefits and obligations of the assigning Lender as a “Lender”
hereunder and under the other Loan Documents, (ii) the assigning Lender
shall, to the extent that rights and obligations hereunder have been assigned
by it pursuant to an Assignment, relinquish its rights and be released from its
obligations under this Agreement, and (iii) one Lender shall at all times
serve as agent for all Lenders and shall be the sole Lender to whom notices,
requests and other communications shall be addressed and the sole party
authorized to grant or withhold consents hereunder on behalf of the Lenders
(subject, in each case, to appointment of a Servicer, pursuant to Section 9.22,
to receive such notices, requests and other communications and/or to grant or
withhold consents or waivers or give notices, as the case may be) and to be the
sole Lender to designate the account to which payments shall be made by
Borrower to the Lenders hereunder (and Borrower may fully rely thereon,
notwithstanding any contrary notice from any other Lender), and (iv) any
assigning Lender that no longer holds any portion of the Loan shall deliver any
Collateral held by it as Lender to the other Lenders or their custodian and, if
reasonably requested by Borrower, shall deliver notices (prepared by Borrower
and reasonably satisfactory to such assigning Lender) to Tenants and/or the
Cash Management Bank confirming such assignment.  Goldman
Sachs Mortgage Company or, upon the appointment of a Servicer, such Servicer,
shall maintain, or cause to be maintained, as agent for Borrower, a register on
which it shall enter the name or names of the registered owner or owners from
time to time of the Notes.  Borrower
agrees that upon effectiveness of any Assignment of any Note in part, Borrower
will promptly provide to the assignor and the assignee separate promissory
notes in the amount of their respective interests (but, if applicable, with a
notation thereon that it is given in substitution for and replacement of an
original Note or any replacement thereof), and otherwise in the form of such
Note (and with such other changes as may be reasonably required to reflect that
such Note evidences only a portion of the Loan and the provisions of clause (iii) above),
upon return of the Note then being replaced. The assigning Lender shall notify
in writing each of the other Lenders of any Assignment.  Each potential or actual assignee,
participant or investor in a Securitization, and each Rating Agency, shall be
entitled to receive all information received by Lender under this
Agreement.  After the effectiveness of
any Assignment, the party conveying the Assignment shall provide notice to
Borrower and each Lender of the identity and address of the assignee and the
amount so assigned.  Notwithstanding
anything in this Agreement to the contrary, after an Assignment, the assigning
Lender (in addition to the assignee) shall continue to have the benefits of any

 

91

 

indemnifications contained in this Agreement which such
assigning Lender had prior to such assignment with respect to matters occurring
prior to the date of such assignment.

 

(c)           If, pursuant to this
Section 9.7, any interest in this Agreement or any Note is
transferred to any transferee that is not a U.S. Person, the transferor Lender
shall cause such transferee, concurrently with the effectiveness of such
transfer, (i) to furnish to the transferor Lender either Form W-8BEN
or Form W-8ECI or any other form in order to establish an exemption from,
or reduction in the rate of, U.S. withholding tax on all interest payments
hereunder, and (ii) to agree (for the benefit of Lender and Borrower) to
provide the transferor Lender a new Form W-8BEN or Form W-8ECI or any
forms reasonably requested in order to establish an exemption from, or
reduction in the rate of, U.S. withholding tax upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.

 

(d)           Borrower shall bear
its own costs and expenses incurred in connection with their compliance with
any request by Lender under this Section 9.7.

 

(e)           Each Lender
hereunder shall be individually and severally (and not jointly) liable for the
satisfaction of its obligations hereunder and under the other Loan Documents.

 

9.8.          Severability. 
Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

9.9.          Preferences. 
Lender shall have no obligation to marshal any assets in favor of
Borrower or any other party or against or in payment of any or all of the
obligations of Borrower pursuant to this Agreement, the Notes or any other Loan
Document.  During the continuance of an
Event of Default, Lender shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder and under the Loan Documents.  To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any portion thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, receiver or any other party under any bankruptcy
law, state or federal law, common law or equitable cause, then, to the extent
of such payment or proceeds received, the obligations hereunder or portion
thereof intended to be satisfied shall be revived and continue in full force
and effect, as if such payment or proceeds had not been received by Lender.

 

9.10.        Remedies of
Borrower.  If a claim or adjudication
is made that Lender or its agents have unreasonably delayed acting or acted
unreasonably in any case where by law or under this Agreement, the Notes, or
the other Loan Documents, any of such Persons has an obligation to act promptly
or reasonably, Borrower agrees that no such Person shall be liable for any
monetary damages, and Borrower’s sole remedy shall be limited to commencing an
action

 

92

 

seeking specific performance, injunctive relief and/or
declaratory judgment, except in any instance in which it has been finally
determined by a court of competent jurisdiction that Lender’s action, delay or
inaction has constituted gross negligence, willful misconduct or an illegal
act.

 

9.11.        Offsets,
Counterclaims and Defenses.  All
payments made by Borrower hereunder or under the other Loan Documents shall be
made irrespective of, and without any deduction for, any setoffs or
counterclaims.  Borrower waives the right
to assert a counterclaim, other than a mandatory or compulsory counterclaim, in
any action or proceeding brought against it by Lender arising out of or in any
way connected with the Notes, this Agreement, the other Loan Documents or the
Indebtedness.  Any assignee of Lender’s
interest in the Loan shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to the Loan.

 

9.12.        No Joint Venture.  Nothing in this Agreement is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Borrower and Lender, nor to grant Lender any interest in
the Collateral; other than that of pledgor or lender.

 

9.13.        Conflict;
Construction of Documents.  In the
event of any conflict between the provisions of this Agreement and the
provisions of the Notes, the Pledge Agreement or any of the other Loan
Documents, the provisions of this Agreement shall prevail.

 

9.14.        Brokers and
Financial Advisors.  Borrower
represents that neither Borrower nor Sponsor have dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement.  Borrower agrees to indemnify and hold Lender
harmless from and against any and all claims, liabilities, costs and expenses
of any kind in any way relating to or arising from a claim by any Person that
such Person acted on behalf of Borrower in connection with the transactions
contemplated in this Agreement.  The
provisions of this Section 9.14 shall survive the expiration and
termination of this Agreement and the repayment of the Indebtedness.

 

9.15.        Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

 

9.16.        Estoppel
Certificates.  Borrower and Lender
each agrees at any time and from time to time, to execute, acknowledge and
deliver to the other, within five Business Days after receipt of Lender’s or
Borrower’s, as the case may be, written request therefor, a statement in
writing setting forth (A) the Principal Indebtedness, (B) the date on
which installments of interest and/or principal were last paid, (C) in the
case of Borrower’s estoppel, any offsets or defenses to the payment of the
Indebtedness, (D) in the case of Borrower’s estoppel, that the Notes, this
Agreement, and the other Loan Documents are valid, legal and binding
obligations, (E) that the Loan Documents have not been modified or if
modified, giving particulars of such modification, (F) in the case of
Borrower’s estoppel, that to Borrower’s knowledge, Borrower is not in default
under the Loan Documents (or specifying any such default), and in the case of
Lender’s estoppel, that Lender has not delivered a written notice of default
(or describing any such notice), and (G) such other matters as Lender or
Borrower may reasonably request.  Any
prospective purchaser of any interest in a Loan or any actual or prospective
purchaser or holder

 

93

 

of any direct or indirect interest in the Borrowers
(to the extent permitted hereunder) shall be permitted to rely on such
certificate.

 

9.17.        Payment of Expenses. 
Borrower shall reimburse Lender upon receipt of written notice from
Lender for (i) all reasonable out-of-pocket costs and expenses incurred by
Lender (or any of its Affiliates) in connection with the origination and any
post-closing restructuring of the Loan, including legal fees and disbursements,
accounting fees, and the costs of the Appraisal, the Engineering Report, the
Qualified Title Insurance Policy, the Qualified Survey, the Environmental
Report and any other third-party diligence materials; (ii) all reasonable
out-of-pocket costs and expenses incurred by Lender (or any of its Affiliates)
in connection with (A) monitoring Borrower’s ongoing performance of and
compliance with Borrower’s agreements and covenants contained in this Agreement
and the other Loan Documents on its part to be performed or complied with after
the Closing Date, including confirming compliance with environmental and
insurance requirements, in each case if and to the extent Lender has reasonable
cause to suspect noncompliance, (B) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any
other documents or matters requested by Borrower or by Lender, (C) filing
fees and expenses and other similar expenses incurred in creating and
perfecting the Liens in favor of Lender pursuant to this Agreement and the
other Loan Documents, (D) enforcing or preserving any rights, in response
to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents or any Collateral, and (E) obtaining
any Rating Confirmation required or requested by Borrower hereunder; and (iii) all
actual out-of-pocket costs and expenses (including, if the Loan has been
securitized and an Event of Default has occurred, customary special servicing
fees resulting therefrom) incurred by Lender (or any of its Affiliates) in
connection with the enforcement of any obligations of Borrower, or a Default by
Borrower, under the Loan Documents, including any actual or attempted
foreclosure, deed-in-lieu of foreclosure, refinancing, restructuring or workout
and any insolvency or bankruptcy proceedings (including any applicable transfer
taxes).

 

9.18.        No Third-Party Beneficiaries.  This Agreement and the other Loan Documents
are solely for the benefit of Lender and Borrower, and nothing contained in
this Agreement or the other Loan Documents shall be deemed to confer upon
anyone other than Lender and Borrower any right to insist upon or to enforce
the performance or observance of any of the obligations contained herein or
therein.  All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender, and no other Person shall have standing
to require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof, and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole
discretion, Lender deems it advisable or desirable to do so.

 

9.19.        Recourse.

 

(a)           The
Loan shall be fully recourse to Borrower. 
No recourse shall be had for the Loan against any other Person,
including any Affiliate of Borrower or any officer,

 

94

 

director, partner or equityholder of Borrower or any
such Affiliate, except for (i) claims against Sponsor under the Guaranty
and (ii) claims against Borrower and Sponsor under the Environmental
Indemnity.

 

(b)           Borrower
shall indemnify Lender and hold Lender harmless from and against any and all
Damages to Lender (plus the legal and other expenses of enforcing the
obligations of Borrower under this Section 9.19) resulting from or
arising out of any of the following (the “Indemnified Liabilities”),
which Indemnified Liabilities shall be guaranteed by Sponsor, jointly and
severally, pursuant to the Guaranty:

 

(i)            any
intentional material physical Waste with respect to any Property committed or
permitted by Borrower, any Senior Mezzanine Borrower, the Sponsor or any of their
respective Affiliates;

 

(ii)           any fraud,
willful misconduct or intentional material misrepresentation committed by
Borrower, any Senior Mezzanine Borrower, the Sponsor or any of their respective
Affiliates;

 

(iii)          the
misappropriation by Borrower, any Senior Mezzanine Borrower, the Sponsor or any
of their respective Affiliates of any funds in violation of the Loan Documents
(including misappropriation of Revenues, Distributions, security deposits
and/or Loss Proceeds and the violation of the last sentence of Section 5.7(d));

 

(iv)          any breach by
Borrower, any Senior Mezzanine Borrower or the Sponsor of any material
representation or covenant regarding environmental matters contained in this
Agreement or in the Environmental Indemnity;

 

(v)           the failure of
Borrower or any Senior Mezzanine Borrower, at any time, to comply with
Single-Purpose Entity requirements hereunder, in any material respect;

 

(vi)          any failure to pay
income tax liabilities of non pass-through entities comprising Borrower any
Senior Mezzanine Borrower or their respective Affiliates;

 

(vii)         the failure of
Borrower or any Senior Mezzanine Borrower to fully discharge prior to the
Closing Date any liabilities, contingent or otherwise, associated with assets
that were owned by Borrower, any Senior Mezzanine Borrower or any of their
respective Affiliates prior to the Closing Date (including all employee
liabilities), other than the Properties and direct or indirect equity interests
therein;

 

(viii)        failure to structure
and consummate the Merger in a manner that does not give rise to a shareholder
lawsuit;

 

(ix)           any liability of
AFRT or its subsidiaries under any recourse carveout under any Encumbered
Property Debt, guaranty or similar obligations, in each case in respect of
Borrower, any Senior Mezzanine Borrower, AFRT, Operating Partnership or any
holding company;

 

95

 

(x)            any failure by Borrower or
Senior Mezzanine Borrower to cause each holder of Encumbered Property Debt to
add Lender as a party to whom all notices of default must be given under the
Encumbered Debt Documents; and any failure by Borrower to instruct each holder
of Encumbered Property Debt to accept any payment from or action taken by
Lender during the continuance of a default thereunder as if it were received
from or performed by the applicable Property Owner; and any failure by Borrower
to remit, or cause to be remitted, to any holder of Encumbered Property Debt
any amount proffered by Lender in order to cure a default thereunder pursuant
to Section 5.21;

 

(xi)           any assumption fee,
foreclosure fee or similar amount (and related expense reimbursements) owed by
Lender or Senior Mezzanine Lender to any holder of Encumbered Property Debt or
related loan servicer as a result of, or in order to permit, a foreclosure or
transfer in lieu of foreclosure of Collateral; and

 

(xii)          any failure of the
representation made in Section 9.14 to be true and correct.

 

In addition to the foregoing (x) the Loan shall
be fully recourse to Borrower and Sponsor, jointly and severally, upon (i) 
any Transfer of Collateral or any Property, voluntary or collusive Lien on
Collateral or any Property, or Change
of Control which is prohibited hereunder or (ii) the occurrence of
any filing by Borrower, any Senior Mezzanine Borrower or Property Owner under
the Bankruptcy Code or any joining or colluding by Borrower, any Senior
Mezzanine Borrower or any of their respective Affiliates (including Sponsor) in
the filing of an involuntary case in respect of Borrower, any Senior Mezzanine
Borrower or Property Owner under the Bankruptcy Code; and (y) in the event
AFRT shall fail to comply with Section 5.24, the Loan shall be
recourse to AFRT and Sponsor, jointly and severally, in an amount equal to the
Release Price of the applicable Property, plus all related enforcement costs
and any Damages resulting from a failure to release such Property pursuant
hereto.

 

9.20.  Right of Set-Off.  In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender may from time to time, without presentment, demand,
protest or other notice of any kind (all of such rights being hereby expressly
waived), set-off and appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by any Lender
(including branches, agencies or Affiliates of Lender wherever located) to or
for the credit or the account of Borrower against the obligations and
liabilities of Borrower to any Lender hereunder, under the Notes, the other
Loan Documents or otherwise, irrespective of whether such Lender shall have
made any demand hereunder and although such obligations, liabilities or claims,
or any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of Lender subsequent thereto.

 

9.21.  Exculpation of Lender.  Lender neither undertakes nor assumes any
responsibility or duty to Borrower or any other party to select, review,
inspect, examine, supervise, pass judgment upon or inform Borrower or any third
party of (a) the existence,

 

96

 

quality, adequacy or suitability of Appraisals of the
Properties, the Senior Mezzanine Loan Collateral or the Collateral, (b) any
environmental report, or (c) any other matters or items, including engineering,
soils and seismic reports which are contemplated in the Loan Documents.  Any such selection, review, inspection,
examination and the like, and any other due diligence conducted by Lender, is
solely for the purpose of protecting Lender’s rights under the Loan Documents,
and shall not render Lender liable to Borrower or any third party for the
existence, sufficiency, accuracy, completeness or legality thereof.

 

9.22.        Servicer.  Lender
may delegate any and all rights and obligations of Lender hereunder and under
the other Loan Documents to the Servicer upon notice by Lender to Borrower,
whereupon any notice or consent from the Servicer to Borrower, and any action
by Servicer on Lender’s behalf, shall have the same force and effect as if
Servicer were Lender.  Lender shall bear
the cost of all servicing fees, costs and expenses other than those to which
Lender is expressly entitled to reimbursement hereunder and under the other
Loan Documents, including without limitation, the Cooperation Agreement.

 

9.23  Prior Agreements.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
CONTAIN THE ENTIRE AGREEMENT OF THE PARTIES HERETO AND THERETO IN RESPECT OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND ALL PRIOR AGREEMENTS
AMONG OR BETWEEN SUCH PARTIES, WHETHER ORAL OR WRITTEN, INCLUDING ANY TERM
SHEETS, CONFIDENTIALITY AGREEMENTS AND COMMITMENT LETTERS, ARE SUPERSEDED BY
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT THAT ANY
ORIGINATION FEE SPECIFIED IN ANY TERM SHEET, COMMITMENT LETTER OR FEE LETTER
SHALL BE AN OBLIGATION OF BORROWER AND SHALL BE PAID AT CLOSING, AND ANY
INDEMNIFICATIONS, FLEX PROVISION, EXIT FEES AND THE LIKE PROVIDED FOR THEREIN
SHALL SURVIVE THE CLOSING).

 

97

 

Lender and Borrower are executing this Agreement as of the date first
above written.

 

 

	
   

  	
   

  	
  LENDER:

  
	
  BORROWER:

  	
   

  	
   

  
	
   

  	
   

  	
  GOLDMAN SACHS
  MORTGAGE COMPANY,

  
	
  GKK STARS JUNIOR MEZZ 2
  LLC, a

  Delaware limited liability company

  	
   

  	
  a New York limited
  partnership

  
	
   

  	
   

  	
  By:

  	
  Goldman Sachs Real
  Estate Funding

  
	
   

  	
   

  	
   

  	
  Corp., its general
  partner

  
	
  By:

  	
  /s/ Edward J.
  Matey, Jr.

  	
   

  	
   

  
	
   

  	
  Name: Edward J. Matey, Jr.

  	
   

  	
  By:

  	
  /s/ Mark Buono

  
	
   

  	
  Title: General Counsel and Vice President

  	
   

  	
   

  	
  Name: Mark Buono

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  CITICORP NORTH AMERICA,
  INC., a New

  York corporation

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Angelica Sukiennik

  
	
   

  	
   

  	
   

  	
  Name: Angelica Sukiennik

  
	
   

  	
   

  	
   

  	
   Title: Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SL GREEN REALTY CORP.,
  a Maryland

  corporation

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/s
  Gregory F. Hughes

  
	
   

  	
   

  	
   

  	
  Name:
  Gregory F. Hughes

  
	
   

  	
   

  	
   

  	
  Title:
  Chief Operating Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]